<PAGE>
1940 Act File No. 811-______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
STATE STREET MASTER TRUST
(Exact Name of Registrant as Specified in Charter)
PO BOX 1713, BOSTON, MASSACHUSETTS 02105-1713
(Address of Principal Executive Offices)
(617) 662-3966
(Registrant's Telephone Number)
Michael E. Gillespie
PO Box 1713
Boston, Massachusetts 02105-1713
(Name and Address of Agent for Service)
Copy to:
Timothy W. Diggins
Ropes & Gray
One International Place
Boston, Massachusetts 02110-2624
EXPLANATORY NOTE
This Registration Statement on Form N-1A has been filed by the Registrant
pursuant to Section 8(b) of the Investment Company Act of 1940, as amended
(the "1940 Act"). However, beneficial interests in the Registrant are not
being registered under the Securities Act of 1933 (the "1933 Act") because
such interests will be issued solely in private placement transactions that
do not involve any "public offering" within the meaning of Section 4(2) of
the 1933 Act. Investments in the Registrant may only be made by domestic
investment companies, institutional client separate accounts, 401(k) plan
assets, common or commingled trust funds or collective investment trusts or
similar organizations or entities that are "accredited investors" within the
meaning of Regulation D under the 1933 Act. This Registration Statement does
not constitute an offer to sell, or the solicitation of an offer to buy,
within the meaning of the 1933 Act, any beneficial interests in the
Registrant.
<PAGE>
PART A--STATE STREET EQUITY 500 INDEX PORTFOLIO
We have omitted responses to Items 1, 2, 3, 5 and 9 pursuant to paragraph
2(b) of General Instruction B to Form N-1A.
INTRODUCTION
State Street Master Trust (the "Trust") is a no-load, open-end
management investment company. It was organized as a business trust under the
laws of The Commonwealth of Massachusetts on July 27, 1999. The Trust issues
beneficial interests solely in private placement transactions that do not
involve any "public offering" within the meaning of Section 4(2) of the
Securities Act of 1933, as amended (the "1933 Act"). Only investment
companies, institutional client separate accounts, 401(k) plan assets, common
or commingled trust funds or collective investment trusts or similar
organizations or entities that are "accredited investors" within the meaning
of Regulation D under the 1933 Act may invest in the Trust. This Registration
Statement does not constitute an offer to sell, or the solicitation of an
offer to buy, any "security" within the meaning of the 1933 Act. The State
Street Equity 500 Index Portfolio, the State Street Equity 400 Index
Portfolio, the State Street Equity 2000 Index Portfolio, the State Street
EAFE Index Portfolio and the State Street Aggregate Bond Index Portfolio (the
"Equity 500 Index Portfolio," the "Equity 400 Index Portfolio," "Equity 2000
Index Portfolio," the "EAFE Index Portfolio" and the "Aggregate Bond Index
Portfolio" respectively) are each a diversified separate series of the Trust.
ITEM 4. INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES, AND RELATED RISKS
The investment objective, principal strategies and risks of the Equity
500 Index Portfolio (the "Portfolio") are described below; the investment
objectives, principal strategies and risks of the Equity 400 Index Portfolio,
the Equity 2000 Index Portfolio, the EAFE Index Portfolio and the Aggregate
Bond Index Portfolio are described separately. See Part B for a description
of certain fundamental investment restrictions for the Portfolio.
SUMMARY
INVESTMENT OBJECTIVE. The Portfolio's investment objective is to replicate
as closely as possible, before expenses, the performance of the Standard &
Poor's 500 Composite Stock Price Index (the "S&P 500 Index" or the "Index").
There is no assurance that the Portfolio will achieve its investment objective.
PRINCIPAL INVESTMENT STRATEGIES. The Portfolio uses a passive management
strategy designed to track the performance of the S&P 500 Index. The S&P 500
Index is a well-known stock market index that includes common stocks of 500
companies from
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several industrial sectors representing a significant portion of the market
value of all stocks publicly traded in the United States.
The Portfolio is not managed according to traditional methods of
"active" investment management, which involve the buying and selling of
securities based upon economic, financial and market analysis and investment
judgment. Instead, the Portfolio, using a "passive" or "indexing" investment
approach, attempts to replicate, before expenses, the performance of the S&P
500 Index. State Street Bank and Trust Company, through its State Street
Global Advisors division (the "Adviser"), seeks a correlation of 0.95 or
better between the Portfolio's performance and the performance of the Index;
a figure of 1.00 would represent perfect correlation.
The Portfolio intends to invest in all 500 stocks comprising the Index
in proportion to their weightings in the Index. However, under various
circumstances, it may not be possible or practicable to purchase all 500
stocks in those weightings. In those circumstances, the Portfolio may
purchase a sample of the stocks in the Index in proportions expected by the
Adviser to replicate generally the performance of the Index as a whole. In
addition, from time to time stocks are added to or removed form the Index.
The Portfolio may sell stocks that are represented in the Index, or purchase
stocks that are not yet represented in the Index, in anticipation of their
removal from or addition to the Index.
In addition, the Portfolio may at times purchase or sell futures
contracts on the Index, or options on those futures, in lieu of investment
directly in the stocks making up the Index. The Portfolio might do so, for
example, in order to increase its investment exposure pending investment of
cash in the stocks comprising the Index. Alternatively, the Portfolio might
use futures or options on futures to reduce its investment exposure in
situations where it intends to sell a portion of the stocks in its portfolio
but the sale has not yet been completed. The Portfolio may also, to the
extent permitted by applicable law, invest in shares of other mutual funds
whose investment objectives and policies are similar to those of the
Portfolio. The Portfolio may also enter into other derivatives transactions,
including the purchase or sale of options or enter into swap transactions,
to assist in replicating the performance of the Index.
PRINCIPAL RISKS OF INVESTING IN THE PORTFOLIO
- - Stock values could decline generally or could underperform other
investments.
- - Returns on investments in stocks of large U.S. companies could trail the
returns on investments in stocks of smaller companies.
- - The Portfolio's return may not match the return of the Index for a number
of reasons. For example, the Portfolio incurs a number of operating
expenses not applicable to the Index, and incurs costs in buying and
selling securities. The Portfolio may not be fully invested at times,
either as a result of cash flows into the Portfolio or reserves of cash
held by the Portfolio to meet redemptions. The return on the sample of
stocks purchased by the Adviser, or futures or other derivative positions
taken by the Adviser, to replicate the performance of the Index may not
correlate precisely with the return on the Index.
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THE PORTFOLIO'S BENEFICIAL INTERESTS WILL CHANGE IN VALUE, AND YOU COULD LOSE
MONEY BY INVESTING IN THE PORTFOLIO. THE PORTFOLIO MAY NOT ACHIEVE ITS
OBJECTIVE. AN INVESTMENT IN THE PORTFOLIO IS NOT A DEPOSIT WITH A BANK AND IS
NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
OTHER GOVERNMENT AGENCY.
OTHER INVESTMENT CONSIDERATIONS AND RISKS
THE S&P 500 INDEX. The S&P 500 Index is a well-known stock market index
that includes common stocks of 500 companies from several industrial sectors
representing a significant portion of the market value of all common stocks
publicly traded in the United States, most of which are listed on the New
York Stock Exchange, Inc. (the "NYSE"). Stocks in the S&P 500 Index are
weighted according to their market capitalizations (I.E., the number of shares
outstanding multiplied by the stock's current price). The composition of the
S&P 500 Index is determined by Standard & Poor's and is based on such factors
as the market capitalization and trading activity of each stock and its
adequacy as a representation of stocks in a particular industry group, and
may be changed from time to time. "Standard & Poor's-Registered Trademark-,"
"S&P," "S&P 500," "Standard & Poor's 500" and "500" are trademarks of The
McGraw-Hill Companies, Inc. and have been licensed for use by the Portfolio.
The Portfolio is not sponsored, endorsed, sold or promoted by S&P, and S&P
makes no representation regarding the advisability of investing in the
Portfolio.
INDEX FUTURES CONTRACTS AND RELATED OPTIONS. The Portfolio may buy and
sell futures contracts on the Index and options on those futures contracts.
An "index futures" contract is a contract to buy or sell units of an index at
an agreed price on a specified future date. Depending on the change in value
of the index between the time when the Portfolio enters into and terminates
an index future or option transaction, the Portfolio realizes a gain or loss.
Options and futures transactions involve risks. For example, it is possible
that changes in the prices of futures contracts on the Index will not
correlate precisely with changes in the value of the Index. In those cases,
use of futures contracts and related options might decrease the correlation
between the return of the Portfolio and the return of the Index. In addition,
the Portfolio incurs transaction costs in entering into, and closing out,
positions in futures contracts and related options. These costs typically
have the effect of reducing the correlation between the return of the
Portfolio and the return of the Index.
OTHER DERIVATIVE TRANSACTIONS. The Portfolio may enter into derivatives
transactions involving options and swaps. These transactions involve many of the
same risks as those described above under "Index futures contracts and related
options." In addition, since many of such transactions are conducted directly
with counterparties, and not on an exchange or board of trade, the Portfolio's
ability to realize any investment return on such transactions may be dependent
on the counterparty's ability or willingness to meet its obligations.
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REPURCHASE AGREEMENTS AND SECURITIES LOANS. The Portfolio may enter into
repurchase agreements and securities loans. Under a repurchase agreement, the
Portfolio purchases a debt instrument for a relatively short period (usually
not more than one week), which the seller agrees to repurchase at a fixed
time and price, representing the Portfolio's cost plus interest. Under a
securities loan, the Portfolio lends portfolio securities. The Portfolio will
enter into repurchase agreements and securities loans only with commercial
banks and with registered broker-dealers who are members of a national
securities exchange or market makers in government securities, and in the
case of repurchase agreements, only if the debt instrument is a U.S.
government security. Although the Adviser will monitor these transactions to
ensure that they will be fully collateralized at all times, the Portfolio
bears a risk of loss if the other party defaults on its obligation and the
Portfolio is delayed or prevented from exercising its rights to dispose of
the collateral. If the other party should become involved in bankruptcy or
insolvency proceedings, it is possible that the Portfolio may be treated as
an unsecured creditor and be required to return the underlying collateral to
the other party's estate.
YEAR 2000. The Portfolio's operations depend on the smooth functioning of
its service providers' computer systems. The Portfolio and its interestholders
could be adversely affected if those computer systems do not properly process
and calculate date-related information on or after January 1, 2000. Many
computer software systems in use today cannot distinguish between the year 2000
and the year 1900. Although year 2000 related computer problems could have a
negative effect on the Portfolio and its interestholders, the service providers
have advised the Portfolio that they are working to avoid such problems and
expect all systems to be adapted in time for the event. Because it is the
obligation of those service providers to ensure the proper functioning of their
computer systems, the Portfolio does not expect to incur any material expense in
connection with year 2000 preparations.
CHANGES IN POLICIES. The Trust's Trustees may change the Portfolio's
investment strategies and other policies without interestholder approval, except
as otherwise indicated. The Trustees will not materially change the Portfolio's
investment objective without interestholder approval.
ITEM 6. MANAGEMENT, ORGANIZATION AND CAPITAL STRUCTURE
The Trustees of the Trust are responsible for generally overseeing the
conduct of the Trust's business. Subject to such policies as the Trustees may
determine, the Adviser furnishes a continuing investment program for the
Portfolio and makes investment decisions on its behalf.
The Adviser places all orders for purchases and sales of the Portfolio's
investments. In selecting broker-dealers, the Adviser may consider research and
brokerage services furnished to it and its affiliates. Affiliates of the Adviser
may receive brokerage commissions from the Portfolio in accordance with
procedures adopted by the
5
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Trustees under the 1940 Act, which require periodic review of these
transactions.
State Street Bank and Trust Company ("State Street"), through its State
Street Global Advisors division, serves as Adviser to the Portfolio and, subject
to the supervision of the Board of Trustees, will be responsible for the
investment management of the Portfolio. As of June 30, 1999, the Adviser managed
approximately $574 billion in assets. The Adviser's principal address is Two
International Place, Boston, Massachusetts 02110.
ADMINISTRATOR, CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT
State Street is the Administrator for the Portfolio and the Custodian for
the Portfolio's assets, and serves as the Transfer Agent to the Portfolio.
UNITARY FEE
As compensation for its services as Adviser, Administrator, Custodian
and Transfer Agent (and for assuming ordinary operating expenses of the
Portfolio, including ordinary legal and audit expenses), State Street
receives a unitary fee at an annual rate of 0.08% of average daily net assets
of the Portfolio.
LENDING AGENT
State Street is expected to be designated as the lending agent for the
Trust. In such capacity, it would cause the delivery of loaned securities from
the Portfolio to borrowers, arrange for the return of loaned securities to the
Portfolio at the termination of loans, request deposit of collateral, monitor
daily the value of the loaned securities and collateral, request that borrowers
add to the collateral when required by the loan agreements, and provide
recordkeeping and accounting services necessary for the operation of the
program. For its services, the lending agent would typically receive a portion
of the net investment income, if any, earned on the collateral for the
securities loaned.
ITEM 7. INTERESTHOLDER INFORMATION
DETERMINATION OF NET ASSET VALUE
The Portfolio's net asset value is calculated on each day the New York
Stock Exchange (the "NYSE") is open at the earlier of: (i) the close of
trading on the NYSE, and (ii) 4:00 p.m. Eastern time. The net asset value is
based on the market value of the securities held in the Portfolio. The net
asset value per beneficial interest is calculated by dividing the value of
the net asset value of the Portfolio by the number of interests outstanding.
If quotations are not readily available, the portfolio securities will be
valued by
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methods approved by the Board of Trustees intended to reflect fair value.
PURCHASING BENEFICIAL INTERESTS
The Portfolio issues beneficial interests solely in private placement
transactions that do not involve any "public offering" within the meaning of
Section 4(2) of the 1933 Act. Investment companies, institutional client
separate accounts, 401(k) plan assets, common and commingled trust funds or
collective investment trusts or similar organizations that are "accredited
investors" within the meaning of Regulation D of the 1933 Act are the only
investors currently permitted to invest in the Portfolio.
Investors pay no sales load to invest in this Portfolio. The price for
Portfolio beneficial interests is the net asset value per beneficial
interest. Orders will be priced at the net asset value next calculated after
the order is accepted by the Portfolio.
The minimum initial investment in the Portfolio is $25 million, although
the Adviser may waive the minimum in its discretion. There is no minimum
subsequent investment. The Portfolio intends to be as fully invested as is
practicable; therefore, investments must be made either in Federal Funds
(i.e., monies credited to the account of the Portfolio's custodian bank by a
Federal Reserve Bank) or securities acceptable to the Adviser. (Please
consult your tax adviser regarding in-kind transactions). The Portfolio
reserves the right to cease accepting investments at any time or to reject
any investment order.
REDEEMING BENEFICIAL INTERESTS
An investor may withdraw all or any portion of its investment at the net
asset value next determined after it submits a withdrawal request, in proper
form, to the Portfolio. The Portfolio will pay the proceeds of the withdrawal
either in Federal Funds or in securities ("in-kind") at the discretion of the
Adviser, normally on the next Portfolio business day after the withdrawal,
but in any event no more than seven days after the withdrawal. (Please
consult your tax adviser regarding in-kind transactions). At the request of
an investor, the Portfolio will normally redeem in-kind to the investor.
Investments in the Portfolio may not be transferred. The right of any
investor to receive payment with respect to any withdrawal may be suspended
or the payment of the withdrawal proceeds postponed during any period in
which the NYSE is closed (other than weekends or holidays) or trading on the
NYSE is restricted or, to the extent otherwise permitted by the 1940 Act, if
an emergency exists.
TAX CONSIDERATIONS
The Portfolio does not expect to be subject to any income tax as it has
been determined that it will be properly treated as a partnership for federal
and state income tax purposes. Each investor in the Portfolio, however, will be
taxable on its allocable share (as determined in accordance with the governing
instruments of the Trust) of the
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Portfolio's ordinary income and capital gain in determining its income tax
liability. The determination of such share will be made in accordance with the
Internal Revenue Code of 1986, as amended (the "Code"), and regulations
promulgated thereunder.
The Portfolio expects to manage its assets and income in such a way that
an investment company investing in the Portfolio will be able to satisfy the
requirements of Subchapter M of the Code, assuming that it invests all of its
assets in the Portfolio.
ITEM 8. DISTRIBUTION ARRANGEMENTS
Not applicable.
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PART A--STATE STREET EQUITY 400 INDEX PORTFOLIO
We have omitted responses to Items 1, 2, 3, 5 and 9 pursuant to paragraph
2(b) of General Instruction B to Form N-1A.
INTRODUCTION
State Street Master Trust (the "Trust") is a no-load, open-end
management investment company. It was organized as a business trust under the
laws of The Commonwealth of Massachusetts on July 27, 1999. The Trust issues
beneficial interests solely in private placement transactions that do not
involve any "public offering" within the meaning of Section 4(2) of the
Securities Act of 1933, as amended (the "1933 Act"). Only investment
companies, institutional client separate accounts, 401(k) plan assets, common
or commingled trust funds or collective investment trusts or similar
organizations or entities that are "accredited investors" within the meaning
of Regulation D under the 1933 Act may invest in the Trust. This Registration
Statement does not constitute an offer to sell, or the solicitation of an
offer to buy, any "security" within the meaning of the 1933 Act. The State
Street Equity 500 Index Portfolio, the State Street Equity 400 Index
Portfolio, the State Street Equity 2000 Index Portfolio, the State Street
EAFE Index Portfolio and the State Street Aggregate Bond Index Portfolio (the
"Equity 500 Index Portfolio," the "Equity 400 Index Portfolio," "Equity 2000
Index Portfolio," the "EAFE Index Portfolio" and the "Aggregate Bond Index
Portfolio," respectively) are each a diversified separate series of the Trust.
ITEM 4. INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES, AND RELATED RISKS
The investment objective, principal strategies and risks of the Equity 400
Index Portfolio (the "Portfolio") are described below; the investment
objectives, principal strategies and risks of the Equity 500 Index Portfolio,
the Equity 2000 Index Portfolio, the EAFE Index Portfolio and the Aggregate Bond
Index Portfolio are described separately. See Part B for a description of
certain fundamental investment restrictions for the Portfolio.
SUMMARY
INVESTMENT OBJECTIVE. The Portfolio's investment objective is to replicate
as closely as possible, before expenses, the performance of the Standard &
Poor's MidCap 400 Composite Stock Price Index (the "S&P 400 Index" or the
"Index"). There is no assurance that the Portfolio will achieve its investment
objective.
PRINCIPAL INVESTMENT STRATEGIES. The Portfolio uses a passive management
strategy designed to track the performance of the S&P 400 Index. The S&P 400
Index is a well-known stock market index that includes common stocks of 400
companies from several industrial sectors representing a large cross-section of
mid-cap stocks
9
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publicly traded in the United States.
The Portfolio is not managed according to traditional methods of "active"
investment management, which involve the buying and selling of securities based
upon economic, financial and market analysis and investment judgment. Instead,
the Portfolio, using a "passive" or "indexing" investment approach, attempts to
replicate, before expenses, the performance of the S&P 400 Index. State Street
Bank and Trust Company, through its State Street Global Advisors division (the
"Adviser"), seeks a correlation of 0.95 or better between the Portfolio's
performance and the performance of the Index; a figure of 1.00 would represent
perfect correlation.
The Portfolio intends to invest in all of the stocks comprising the Index
in proportion to their weightings in the Index. However, under various
circumstances, it may not be possible or practicable to purchase all 400 stocks
in those weightings. In those circumstances, the Portfolio may purchase a sample
of the stocks in the Index in proportions expected by the Adviser to replicate
generally the performance of the Index as a whole. In addition, from time to
time stocks are added to or removed from the Index. The Portfolio may sell
stocks that are represented in the Index, or purchase stocks that are not yet
represented in the Index, in anticipation of their removal from or addition to
the Index.
In addition, the Portfolio may at times purchase or sell futures
contracts on the Index, or options on those futures, in lieu of investment
directly in the stocks making up the Index. The Portfolio might do so, for
example, in order to increase its investment exposure pending investment of
cash in the stocks comprising the Index. Alternatively, the Portfolio might
use futures or options on futures to reduce its investment exposure in
situations where it intends to sell a portion of the stocks in its portfolio
but the sale has not yet been completed. The Portfolio may also, to the
extent permitted by applicable law, invest in shares of other mutual funds
whose investment objectives and policies are similar to those of the
Portfolio. The Portfolio may also enter into other derivatives transactions,
including the purchase or sale of options or enter into swap transactions, to
assist in replicating the performance of the Index.
PRINCIPAL RISKS OF INVESTING IN THE PORTFOLIO
- - Stock values could decline generally or could underperform other
investments.
- - Returns on investments in mid-cap stocks could be more volatile than, or
trail the returns on, investments in larger or smaller cap U.S. stocks.
- - Mid-cap companies may be more likely than large-cap companies to have
relatively limited product lines, markets or financial resources, or depend
on a few key employees.
- - The Portfolio's return may not match the return of the Index for a number
of reasons. For example, the Portfolio incurs a number of operating
expenses not applicable to the Index, and incurs costs in buying and
selling securities. The Portfolio may not be fully invested at times,
either as a result of cash flows into
10
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the Portfolio or reserves of cash held by the Portfolio to meet
redemptions. The return on the sample of stocks purchased by the Adviser,
or futures or other derivative positions taken by the Adviser, to
replicate the performance of the Index may not correlate precisely with
the return on the Index.
THE PORTFOLIO'S BENEFICIAL INTERESTS WILL CHANGE IN VALUE, AND YOU COULD LOSE
MONEY BY INVESTING IN THE PORTFOLIO. THE PORTFOLIO MAY NOT ACHIEVE ITS
OBJECTIVE. AN INVESTMENT IN THE PORTFOLIO IS NOT A DEPOSIT WITH A BANK AND IS
NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
OTHER GOVERNMENT AGENCY.
OTHER INVESTMENT CONSIDERATIONS AND RISKS
THE S&P 400 INDEX. The S&P 400 Index is a well-known stock market index
that includes common stocks of 400 companies from several industrial sectors
representing a large cross-section of mid-cap stocks publicly traded in the
United States, most of which are listed on the New York Stock Exchange, Inc.
(the "NYSE"). Stocks in the S&P 400 Index are weighted according to their
market capitalizations (i.e., the number of shares outstanding multiplied by
the stock's current price). The composition of the S&P 400 Index is
determined by Standard and Poor's and is based on such factors as the market
capitalization and trading activity of each stock and its adequacy as a
representation of stocks in a particular industry group, and may be changed
from time to time. "Standard & Poor's-Registered Trademark-," "S&P," "S&P
400," "Standard & Poor's 400" and "400" are trademarks of The McGraw-Hill
Companies, Inc. and have been licensed for use by the Portfolio. The
Portfolio is not sponsored, endorsed, sold or promoted by S&P, and S&P makes
no representation regarding the advisability of investing in the Portfolio.
INDEX FUTURES CONTRACTS AND RELATED OPTIONS. The Portfolio may buy and
sell futures contracts on the Index and options on those futures contracts.
An "index futures" contract is a contract to buy or sell units of an index at
an agreed price on a specified future date. Depending on the change in value
of the index between the time when the Portfolio enters into and terminates
an index future or option transaction, the Portfolio realizes a gain or loss.
Options and futures transactions involve risks. For example, it is possible
that changes in the prices of futures contracts on the Index will not
correlate precisely with changes in the value of the Index. In those cases,
use of futures contracts and related options might decrease the correlation
between the return of the Portfolio and the return of the Index. In addition,
the Portfolio incurs transaction costs in entering into, and closing out,
positions in futures contracts and related options. These costs typically
have the effect of reducing the correlation between the return of the
Portfolio and the return of the Index.
OTHER DERIVATIVE TRANSACTIONS. The Portfolio may enter into derivatives
transactions involving options and swaps. These transactions involve many of the
same
11
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risks as those described above under "Index futures contracts and related
options." In addition, since many of such transactions are conducted directly
with counterparties, and not on an exchange or board of trade, the Portfolio's
ability to realize any investment return on such transactions may be dependent
on the counterparty's ability or willingness to meet its obligations.
REPURCHASE AGREEMENTS AND SECURITIES LOANS. The Portfolio may enter into
repurchase agreements and securities loans. Under a repurchase agreement, the
Portfolio purchases a debt instrument for a relatively short period (usually
not more than one week), which the seller agrees to repurchase at a fixed
time and price, representing the Portfolio's cost plus interest. Under a
securities loan, the Portfolio lends portfolio securities. The Portfolio will
enter into repurchase agreements and securities loans only with commercial
banks and with registered broker-dealers who are members of a national
securities exchange or market makers in government securities, and in the
case of repurchase agreements, only if the debt instrument is a U.S.
government security. Although the Adviser will monitor these transactions to
ensure that they will be fully collateralized at all times, the Portfolio
bears a risk of loss if the other party defaults on its obligation and the
Portfolio is delayed or prevented from exercising its rights to dispose of
the collateral. If the other party should become involved in bankruptcy or
insolvency proceedings, it is possible that the Portfolio may be treated as
an unsecured creditor and be required to return the underlying collateral to
the other party's estate.
YEAR 2000. The Portfolio's operations depend on the smooth functioning of
its service providers' computer systems. The Portfolio and its interestholders
could be adversely affected if those computer systems do not properly process
and calculate date-related information on or after January 1, 2000. Many
computer software systems in use today cannot distinguish between the year 2000
and the year 1900. Although year 2000 related computer problems could have a
negative effect on the Portfolio and its interestholders, the service providers
have advised the Portfolio that they are working to avoid such problems and
expect all systems to be adapted in time for the event. Because it is the
obligation of those service providers to ensure the proper functioning of their
computer systems, the Portfolio does not expect to incur any material expense in
connection with year 2000 preparations.
CHANGES IN POLICIES. The Trust's Trustees may change the Portfolio's
investment strategies and other policies without interestholder approval, except
as otherwise indicated. The Trustees will not materially change the Portfolio's
investment objective without interestholder approval.
ITEM 6. MANAGEMENT, ORGANIZATION AND CAPITAL STRUCTURE
The Trustees of the Trust are responsible for generally overseeing the
conduct of the Trust's business. Subject to such policies as the Trustees may
determine, the Adviser
12
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furnishes a continuing investment program for the Portfolio and makes investment
decisions on its behalf.
The Adviser places all orders for purchases and sales of the Portfolio's
investments. In selecting broker-dealers, the Adviser may consider research and
brokerage services furnished to it and its affiliates. Affiliates of the Adviser
may receive brokerage commissions from the Portfolio in accordance with
procedures adopted by the Trustees under the 1940 Act, which require periodic
review of these transactions.
State Street Bank and Trust Company ("State Street"), through its State
Street Global Advisors division, serves as Adviser to the Portfolio and, subject
to the supervision of the Board of Trustees, will be responsible for the
investment management of the Portfolio. As of June 30, 1999, the Adviser managed
approximately $574 billion in assets. The Adviser's principal address is Two
International Place, Boston, Massachusetts 02110.
ADMINISTRATOR, CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT
State Street is the Administrator for the Portfolio and the Custodian for
the Portfolio's assets, and serves as the Transfer Agent to the Portfolio.
UNITARY FEE
As compensation for its services as Adviser, Administrator, Custodian
and Transfer Agent (and for assuming ordinary operating expenses of the
Portfolio, including ordinary legal and audit expenses), State Street
receives a unitary fee at an annual rate of 0.08% of average daily net assets
of the Portfolio.
LENDING AGENT
State Street is expected to be designated as the lending agent for the
Trust. In such capacity, it would cause the delivery of loaned securities from
the Portfolio to borrowers, arrange for the return of loaned securities to the
Portfolio at the termination of loans, request deposit of collateral, monitor
daily the value of the loaned securities and collateral, request that borrowers
add to the collateral when required by the loan agreements, and provide
recordkeeping and accounting services necessary for the operation of the
program. For its services, the lending agent would typically receive a portion
of the net investment income, if any, earned on the collateral for the
securities loaned.
ITEM 7. INTERESTHOLDER INFORMATION
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DETERMINATION OF NET ASSET VALUE
The Portfolio's net asset value is calculated on each day the New York
Stock Exchange (the "NYSE") is open at the earlier of: (i) the close of
trading on the NYSE, and (ii) 4:00 p.m. Eastern time. The net asset value is
based on the market value of the securities held in the Portfolio. The net
asset value per beneficial interest is calculated by dividing the value of
the net asset value of the Portfolio by the number of interests outstanding.
If quotations are not readily available, the portfolio securities will be
valued by methods approved by the Board of Trustees intended to reflect fair
value.
PURCHASING BENEFICIAL INTERESTS
The Portfolio issues beneficial interests solely in private placement
transactions that do not involve any "public offering" within the meaning of
Section 4(2) of the 1933 Act. Investment companies, institutional client
separate accounts, 401(k) plan assets, common and commingled trust funds or
collective investment trusts or similar organizations that are "accredited
investors" within the meaning of Regulation D of the 1933 Act are the only
investors currently permitted to invest in the Portfolio.
Investors pay no sales load to invest in this Portfolio. The price for
Portfolio beneficial interests is the net asset value per beneficial
interest. Orders will be priced at the net asset value next calculated after
the order is accepted by the Portfolio.
The minimum initial investment in the Portfolio is $25 million, although
the Adviser may waive the minimum in its discretion. There is no minimum
subsequent investment. The Portfolio intends to be as fully invested as is
practicable; therefore, investments must be made either in Federal Funds
(i.e., monies credited to the account of the Portfolio's custodian bank by a
Federal Reserve Bank) or securities acceptable to the Adviser. (Please
consult your tax adviser regarding in-kind transactions.) The Portfolio
reserves the right to cease accepting investments at any time or to reject
any investment order.
REDEEMING BENEFICIAL INTERESTS
An investor may withdraw all or any portion of its investment at the net
asset value next determined after it submits a withdrawal request, in proper
form, to the Portfolio. The Portfolio will pay the proceeds of the withdrawal
either in Federal Funds or in securities ("in-kind") at the discretion of the
Adviser, normally on the next Portfolio business day after the withdrawal,
but in any event no more than seven days after the withdrawal. (Please
consult your tax adviser regarding in-kind transactions.) At the request of
an investor, the Portfolio will normally redeem in-kind to the investor.
Investments in the Portfolio may not be transferred. The right of any
investor to receive payment with respect to any withdrawal may be suspended
or the payment of the withdrawal proceeds postponed during any period in
which the NYSE is closed (other than weekends or holidays) or trading on the
NYSE is restricted or, to the extent otherwise permitted by the 1940 Act, if
an emergency exists.
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TAX CONSIDERATIONS
The Portfolio does not expect to be subject to any income tax as it has
been determined that it will be properly treated as a partnership for federal
and state income tax purposes. Each investor in the Portfolio, however, will be
taxable on its allocable share (as determined in accordance with the governing
instruments of the Trust) of the Portfolio's ordinary income and capital gain in
determining its income tax liability. The determination of such share will be
made in accordance with the Internal Revenue Code of 1986, as amended (the
"Code"), and regulations promulgated thereunder.
The Portfolio expects to manage its assets and income in such a way that
an investment company investing in the Portfolio will be able to satisfy the
requirements of Subchapter M of the Code, assuming that it invests all of its
assets in the Portfolio.
ITEM 8. DISTRIBUTION ARRANGEMENTS
Not applicable.
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PART A--STATE STREET EQUITY 2000 INDEX PORTFOLIO
We have omitted responses to Items 1, 2, 3, 5 and 9 pursuant to paragraph
2(b) of General Instruction B to Form N-1A.
INTRODUCTION
State Street Master Trust (the "Trust") is a no-load, open-end
management investment company. It was organized as a business trust under the
laws of The Commonwealth of Massachusetts on July 27, 1999. The Trust issues
beneficial interests solely in private placement transactions that do not
involve any "public offering" within the meaning of Section 4(2) of the
Securities Act of 1933, as amended (the "1933 Act"). Only investment
companies, institutional client separate accounts, 401(k) plan assets, common
or commingled trust funds or collective investment trusts or similar
organizations or entities that are "accredited investors" within the meaning
of Regulation D under the 1933 Act may invest in the Trust. This Registration
Statement does not constitute an offer to sell, or the solicitation of an
offer to buy, any "security" within the meaning of the 1933 Act. The State
Street Equity 500 Index Portfolio, the State Street Equity 400 Index
Portfolio, the State Street Equity 2000 Index Portfolio, the State Street
EAFE Index Portfolio and the State Street Aggregate Bond Index Portfolio (the
"Equity 500 Index Portfolio," the "Equity 400 Index Portfolio," "Equity 2000
Index Portfolio," the "EAFE Index Portfolio" and the "Aggregate Bond Index
Portfolio," respectively) are each a diversified separate series of the Trust.
ITEM 4. INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES, AND RELATED RISKS
The investment objective, principal strategies and risks of the Equity
2000 Index Portfolio (the "Portfolio") are described below; the investment
objectives, principal strategies and risks of the Equity 500 Index Portfolio,
the Equity 400 Index Portfolio, the EAFE Index Portfolio and the Aggregate Bond
Index Portfolio are described separately. See Part B for a description of
certain fundamental investment restrictions for the Portfolio.
SUMMARY
INVESTMENT OBJECTIVE. The Portfolio's investment objective is to replicate
as closely as possible, before expenses, the performance of the Russell 2000
Index (the "Russell 2000 Index"). There is no assurance that the Portfolio will
achieve its investment objective.
PRINCIPAL INVESTMENT STRATEGIES. The Portfolio uses a management strategy
designed to track the performance of the Russell 2000 Index. The Russell 2000
Index is one of the most widely accepted benchmarks of U.S. small capitalization
stock market total return. It includes the 2,000 smallest capitalization stocks
of the 3,000 largest capitalization U.S. stocks.
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The Portfolio, using an "indexing" investment approach, attempts to
replicate, before expenses, the performance of the Russell 2000 Index. State
Street Bank and Trust Company, through its State Street Global Advisors division
(the "Adviser"), seeks a correlation of 0.95 or better between the Portfolio's
performance and the performance of the Index; a figure of 1.00 would represent
perfect correlation.
The Portfolio may invest in all of the stocks comprising the Index in
proportion to their weightings in the Index. However, under various
circumstances, it may not be possible or practicable to purchase all of those
stocks in those weightings. In those circumstances, the Portfolio may purchase a
sample of the stocks in the Index in proportions expected by the Adviser to
replicate generally the performance of the Index as a whole. In addition, from
time to time stocks are added to or removed from the Index. The Portfolio may
sell stocks that are represented in the Index, or purchase stocks that are not
yet represented in the Index, in anticipation of their removal from or addition
to the Index.
In addition, the Portfolio may at times purchase or sell futures
contracts on the Index or on U.S. securities, or options on those futures, in
lieu of investment directly in debt securities. The Portfolio might do so,
for example, in order to increase its investment exposure pending investment
in debt securities. Alternatively, the Portfolio might use futures or options
on futures to reduce its investment exposure in situations where it intends
to sell a portion of the securities in its portfolio but the sale has not yet
been completed. The Portfolio may also, to the extent permitted by applicable
law, invest in shares of other mutual funds whose investment objectives and
policies are similar to those of the Portfolio. The Portfolio may also enter
into other derivatives transactions, including the purchase or sale of
options or entering into swap transactions, to assist in replicating the
performance of the Index.
PRINCIPAL RISKS OF INVESTING IN THE PORTFOLIO
- - Stock values could decline generally, or could underperform other
investments.
- - Returns on investments in stocks of small U.S. companies could trail the
returns on investments in stocks of larger companies.
- - Small companies may be more likely than mid-cap and large-cap companies
to have relatively limited product lines, markets or financial
resources, or depend on a few key employees.
- - The Portfolio's return may not match the return of the Index for a number
of reasons. For example, the return on the securities and other investments
selected by the Adviser may not correlate precisely with the return on the
Index. The Portfolio incurs a number of operating expenses not applicable
to the Index, and incurs costs in buying and selling securities. The
Portfolio may not be fully invested at times, either as a result of cash
flows into the Portfolio or reserves of cash held by the Portfolio to meet
redemptions. The return on the sample of stocks purchased by the Adviser,
or futures or other derivative positions taken by the Adviser, to replicate
the performance of the Index may not correlate precisely with the return on
the Index.
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THE PORTFOLIO'S SHARES WILL CHANGE IN VALUE, AND YOU COULD LOSE MONEY BY
INVESTING IN THE PORTFOLIO. THE PORTFOLIO MAY NOT ACHIEVE ITS OBJECTIVE. AN
INVESTMENT IN THE PORTFOLIO IS NOT A DEPOSIT WITH A BANK AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY.
OTHER INVESTMENT CONSIDERATIONS AND RISKS
THE RUSSELL 2000 INDEX. The Russell 2000 Index is composed of 2000 common
stocks, which are chosen by Frank Russell Company ("Russell"), based upon market
capitalization. Each year on May 31st, Russell ranks the 3,000 largest U.S.
stocks by market capitalization in order to create the Russell 3000 Index, which
represents approximately 98% of the total U.S. equity market. After the initial
list of 3,000 eligible stocks is determined, the shares outstanding for each
company are adjusted for corporate cross-ownership and large private holdings.
The Russell 2000 Index is a subset of the Russell 3000 Index, representing the
smallest 2000 stocks of the Russell 3000. The purpose of the Russell 2000 Index
is to provide a comprehensive representation of the investable U.S.
small-capitalization equity market. The inclusion of a stock in the Russell 2000
Index in no way implies that Russell believes the stock to be an attractive
investment, nor is Russell a sponsor or in any way affiliated with the
Portfolio. The 2000 securities, most of which trade on the New York Stock
Exchange and NASDAQ, represent approximately 8% of the market value of all U.S.
common stocks. Russell indices only include common stocks domiciled in the
United States and its territories.
INDEX FUTURES CONTRACTS AND RELATED OPTIONS. The Portfolio may buy and
sell futures contracts on the Index and options on those futures contracts.
An "index futures" is a contract to buy or sell units of an index at an
agreed price on a specified future date. Depending on the change in value of
the index between the time when the Portfolio enters into and terminates an
index future or option transaction, the Portfolio realizes a gain or loss.
Options and futures transactions involve risks. For example, it is possible
that changes in the prices of futures contracts on the Index will not
correlate precisely with changes in the value of the Index. In those cases,
use of futures contracts and related options might decrease the correlation
between the return of the Portfolio and the return of the Index. In addition,
the Portfolio incurs transaction costs in entering into, and closing out,
positions in futures contracts and related options. These costs typically
have the effect of reducing the correlation between the return of the
Portfolio and the return of the Index.
OTHER DERIVATIVE TRANSACTIONS. The Portfolio may enter into derivatives
transactions involving options and swaps. These transactions involve many of the
same risks as those described above under "Index futures contracts and related
options." In addition, since many of such transactions are conducted directly
with counterparties, and not on an exchange or board of trade, the Portfolio's
ability to realize any investment return on such transactions may be dependent
on the counterparty's ability or willingness to meet its obligations.
REITS. The Portfolio may invest in real estate investment trusts, known as
"REITs." REITs involve certain special risks in addition to those risks
associated with investing in the real estate industry in general (such as
possible declines in the value of real estate, lack of availability of mortgage
funds or extended vacancies of property). Equity REITs may be affected by
changes in the value of the underlying property owned by the REITs, while
mortgage REITs may be affected by the quality of any credit extended. REITs are
dependent upon management skills, are subject to heavy cash flow
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dependency, risks of default by borrowers, and self-liquidation. REITs are also
subject to the possibilities of failing to qualify for tax-free pass-through of
income under the Internal Revenue Code, and failing to maintain their exemptions
from registration under the 1940 Act. Investing in REITs involves risks similar
to those associated with investing in small capitalization companies. REITs may
have limited financial resources, may trade less frequently and in limited
volume and may be subject to more volatility than other investments.
REPURCHASE AGREEMENTS AND SECURITIES LOANS. The Portfolio may enter into
repurchase agreements and securities loans. Under a repurchase agreement, the
Portfolio purchases a debt instrument for a relatively short period (usually
not more than one week), which the seller agrees to repurchase at a fixed
time and price, representing the Portfolio's cost plus interest. Under a
securities loan, the Portfolio lends portfolio securities. The Portfolio will
enter into repurchase agreements and securities loans only with commercial
banks and with registered broker-dealers who are members of a national
securities exchange or market makers in government securities, and in the
case of repurchase agreements, only if the debt instrument is a U.S.
government security. Although the Adviser will monitor these transactions to
ensure that they will be fully collateralized at all times, the Portfolio
bears a risk of loss if the other party defaults on its obligation and the
Portfolio is delayed or prevented from exercising its rights to dispose of
the collateral. If the other party should become involved in bankruptcy or
insolvency proceedings, it is possible that the Portfolio may be treated as
an unsecured creditor and be required to return the underlying collateral to
the other party's estate.
YEAR 2000. The Portfolio's operations depend on the smooth functioning of
its service providers' computer systems. The Portfolio and its shareholders
could be adversely affected if those computer systems do not properly process
and calculate date-related information on or after January 1, 2000. Many
computer software systems in use today cannot distinguish between the year 2000
and the year 1900. Although year 2000 related computer problems could have a
negative effect on the Portfolio and its shareholders, the service providers
have advised the Portfolio that they are working to avoid such problems and
expect all systems to be adapted in time for the event. Because it is the
obligation of those service providers to ensure the proper functioning of their
computer systems, the Portfolio does not expect to incur any material expense in
connection with year 2000 preparations.
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CHANGES IN POLICIES. The Trust's Trustees may change the Portfolio's
investment strategies and other policies without interestholder approval, except
as otherwise indicated. The Trustees will not materially change the Portfolio's
investment objective without shareholder approval.
ITEM 6. MANAGEMENT, ORGANIZATION AND CAPITAL STRUCTURE
The Trustees of the Trust are responsible for generally overseeing the
conduct of the Trust's business. Subject to such policies as the Trustees may
determine, the Adviser furnishes a continuing investment program for the
Portfolio and makes investment decisions on its behalf.
The Adviser places all orders for purchases and sales of the Portfolio's
investments. In selecting broker-dealers, the Adviser may consider research and
brokerage services furnished to it and its affiliates. Affiliates of the Adviser
may receive brokerage commissions from the Portfolio in accordance with
procedures adopted by the Trustees under the 1940 Act, which require periodic
review of these transactions.
State Street Bank and Trust Company ("State Street"), through its State
Street Global Advisors division, serves as Adviser to the Portfolio and, subject
to the supervision of the Board of Trustees, will be responsible for the
investment management of the Portfolio. As of June 30, 1999, the Adviser managed
approximately $574 billion in assets. The Adviser's principal address is Two
International Place, Boston, Massachusetts 02110.
ADMINISTRATOR, CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT
State Street is the Administrator for the Portfolio and the Custodian for
the Portfolio's assets, and serves as the Transfer Agent to the Portfolio.
UNITARY FEE
As compensation for its services as Adviser, Administrator, Custodian
and Transfer Agent (and for assuming ordinary operating expenses of the
Portfolio, including ordinary legal and audit expenses), State Street
receives a unitary fee at an annual rate of 0.10% of average daily net assets
of the Portfolio.
LENDING AGENT
State Street is expected to be designated as the lending agent for the
Trust. In such capacity, it would cause the delivery of loaned securities from
the Portfolio to
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borrowers, arrange for the return of loaned securities to the Portfolio at the
termination of loans, request deposit of collateral, monitor daily the value of
the loaned securities and collateral, request that borrowers add to the
collateral when required by the loan agreements, and provide recordkeeping and
accounting services necessary for the operation of the program. For its
services, the lending agent would typically receive a portion of the net
investment income, if any, earned on the collateral for the securities loaned.
ITEM 7. INTERESTHOLDER INFORMATION
DETERMINATION OF NET ASSET VALUE
The Portfolio's net asset value is calculated on each day the New York
Stock Exchange (the "NYSE") is open at the earlier of: (i) the close of
trading on the NYSE, and (ii) 4:00 p.m. Eastern time. The net asset value is
based on the market value of the securities held in the Portfolio. The net
asset value per beneficial interest is calculated by dividing the value of
the net asset value of the Portfolio by the number of interests outstanding.
If quotations are not readily available, the portfolio securities will be
valued by methods approved by the Board of Trustees intended to reflect fair
value.
PURCHASING BENEFICIAL INTERESTS
The Portfolio issues beneficial interests solely in private placement
transactions that do not involve any "public offering" within the meaning of
Section 4(2) of the 1933 Act. Investment companies, institutional client
separate accounts, 401(k) plan assets, common and commingled trust funds or
collective investment trusts or similar organizations that are "accredited
investors" within the meaning of Regulation D of the 1933 Act are the only
investors currently permitted to invest in the Portfolio.
Investors pay no sales load to invest in this Portfolio. The price for
Portfolio beneficial interests is the net asset value per beneficial
interest. Orders will be priced at the net asset value next calculated after
the order is accepted by the Portfolio.
The minimum initial investment in the Portfolio is $25 million, although
the Adviser may waive the minimum in its discretion. There is no minimum
subsequent investment. The Portfolio intends to be as fully invested as is
practicable; therefore, investments must be made either in Federal Funds
(i.e., monies credited to the account of the Portfolio's custodian bank by a
Federal Reserve Bank) or securities acceptable to the Adviser. (Please
consult your tax adviser regarding in-kind transactions.) The Portfolio
reserves the right to cease accepting investments at any time or to reject
any investment order.
REDEEMING BENEFICIAL INTERESTS
An investor may withdraw all or any portion of its investment at the
net asset value next determined after it submits a withdrawal request, in proper
form, to the
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Portfolio. The Portfolio will pay the proceeds of the withdrawal either in
Federal Funds or in securities ("in-kind") at the discretion of the Adviser,
normally on the next Portfolio business day after the withdrawal, but in any
event no more than seven days after the withdrawal. (Please consult your tax
adviser regarding in-kind transactions.) At the request of an investor, the
Portfolio will normally redeem in-kind to the investor. Investments in the
Portfolio may not be transferred. The right of any investor to receive payment
with respect to any withdrawal may be suspended or the payment of the withdrawal
proceeds postponed during any period in which the NYSE is closed (other than
weekends or holidays) or trading on the NYSE is restricted or, to the extent
otherwise permitted by the 1940 Act, if an emergency exists.
TAX CONSIDERATIONS
The Portfolio does not expect to be subject to any income tax as it has
been determined that it will be properly treated as a partnership for federal
and state income tax purposes. Each investor in the Portfolio, however, will be
taxable on its allocable share (as determined in accordance with the governing
instruments of the Trust) of the Portfolio's ordinary income and capital gain in
determining its income tax liability. The determination of such share will be
made in accordance with the Internal Revenue Code of 1986, as amended (the
"Code"), and regulations promulgated thereunder.
The Portfolio expects to manage its assets and income in such a way that
an investor in the Portfolio will be able to satisfy the requirements of
Subchapter M of the Code, assuming that it invests all of its assets in the
Portfolio.
ITEM 8. DISTRIBUTION ARRANGEMENTS
Not applicable.
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PART A--STATE STREET EAFE INDEX PORTFOLIO
We have omitted responses to Items 1, 2, 3, 5 and 9 pursuant to paragraph
2(b) of General Instruction B to Form N-1A.
INTRODUCTION
State Street Master Trust (the "Trust") is a no-load, open-end
management investment company. It was organized as a business trust under the
laws of The Commonwealth of Massachusetts on July 27, 1999. The Trust issues
beneficial interests solely in private placement transactions that do not
involve any "public offering" within the meaning of Section 4(2) of the
Securities Act of 1933, as amended (the "1933 Act"). Only investment
companies, institutional client separate accounts, 401(k) plan assets, common
or commingled trust funds or collective investment trusts or similar
organizations or entities that are "accredited investors" within the meaning
of Regulation D under the 1933 Act may invest in the Trust. This Registration
Statement does not constitute an offer to sell, or the solicitation of an
offer to buy, any "security" within the meaning of the 1933 Act. The State
Street Equity 500 Index Portfolio, the State Street Equity 400 Index
Portfolio, the State Street Equity 2000 Index Portfolio, the State Street
EAFE Index Portfolio and the State Street Aggregate Bond Index Portfolio (the
"Equity 500 Index Portfolio," the "Equity 400 Index Portfolio," "Equity 2000
Index Portfolio," the "EAFE Index Portfolio" and the "Aggregate Bond Index
Portfolio," respectively) are each a diversified separate series of the Trust.
ITEM 4. INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES, AND RELATED RISKS
The investment objective, principal strategies and risks of the EAFE Index
Portfolio (the "Portfolio") are described below; the investment objectives,
principal strategies and risks of the Equity 500 Index Portfolio, the Equity 400
Index Portfolio, the Equity 2000 Portfolio and the Aggregate Bond Index
Portfolio are described separately. See Part B for a description of certain
fundamental investment restrictions for the Portfolio.
SUMMARY
INVESTMENT OBJECTIVE. The Portfolio's investment objective is to replicate
as closely as possible, before expenses, the performance of the Morgan Stanley
Capital International Europe Australia and Far East Index (the "MSCI EAFE
Index"). There is no assurance that the Portfolio will achieve its investment
objective.
PRINCIPAL INVESTMENT STRATEGIES. The Portfolio uses a passive management
strategy designed to track the performance of the MSCI EAFE Index. The MSCI EAFE
Index is a well-known international stock market index that includes over 1,000
securities listed on the stock exchanges of 20 developed market countries (but
not the United States).
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The Portfolio is not managed according to traditional methods of "active"
investment management, which involve the buying and selling of securities based
upon economic, financial and market analysis and investment judgment. Instead,
the Portfolio, using a "passive" or "indexing" investment approach, attempts to
replicate, before expenses, the performance of the MSCI EAFE Index. State Street
Bank and Trust Company, through its State Street Global Advisors division (the
"Adviser"), seeks a correlation of 0.95 or better between the Portfolio's
performance and the performance of the Index; a figure of 1.00 would represent
perfect correlation.
The Portfolio may invest in all of the stocks comprising the Index in
proportion to their weightings in the Index. However, under various
circumstances, it may not be possible or practicable to purchase all of those
stocks in those weightings. In those circumstances, the Portfolio may purchase a
sample of the stocks in the Index in proportions expected by the Adviser to
replicate generally the performance of the Index as a whole. In addition, from
time to time stocks are added to or removed from the Index. The Portfolio may
sell stocks that are represented in the Index, or purchase stocks that are not
yet represented in the Index, in anticipation of their removal from or addition
to the Index.
In addition, the Portfolio may at times purchase or sell futures
contracts on the Index, or options on those futures, in lieu of investment
directly in the stocks making up the Index. The Portfolio might do so, for
example, in order to increase its investment exposure pending investment of
cash in the stocks comprising the Index. Alternatively, the Portfolio might
use futures or options on futures to reduce its investment exposure in
situations where it intends to sell a portion of the stocks in its portfolio
but the sale has not yet been completed. The Portfolio may also, to the
extent permitted by applicable law, invest in shares of other mutual funds
whose investment objectives and policies are similar to those of the
Portfolio. The Portfolio may also enter into other derivatives transactions,
including the purchase or sale of options or entering into swap transactions,
to assist in replicating the performance of the Index.
PRINCIPAL RISKS OF INVESTING IN THE PORTFOLIO
- - Stock values could decline generally or could underperform other
investments.
- - Returns on investments in foreign stocks could be more volatile than, or
trail the returns on, investments in U.S. stocks.
- - Foreign investments are subject to a variety of risks not associated with
investing in the United States, including currency fluctuations, economic
or financial instability, lack of timely or reliable information, and
unfavorable political or legal developments.
- - The Portfolio's return may not match the return of the Index for a number
of reasons. For example, the Portfolio incurs a number of operating
expenses not applicable to the Index, and incurs costs in buying and
selling securities. The Portfolio may not be fully invested at times,
either as a result of cash flows into the Portfolio or reserves of cash
held by the Portfolio to meet redemptions. The
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return on the sample of stocks purchased by the Adviser, or futures or
other derivative positions taken by the Adviser, to replicate the
performance of the Index may not correlate precisely with the return of the
Index.
THE PORTFOLIO'S SHARES WILL CHANGE IN VALUE, AND YOU COULD LOSE MONEY BY
INVESTING IN THE PORTFOLIO. THE PORTFOLIO MAY NOT ACHIEVE ITS OBJECTIVE. AN
INVESTMENT IN THE PORTFOLIO IS NOT A DEPOSIT WITH A BANK AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY.
OTHER INVESTMENT CONSIDERATIONS AND RISKS
THE MSCI EAFE INDEX. The MSCI EAFE Index is an arithmetic, market
value-weighted average of the performance of over 1,000 securities listed on
the stock exchanges of the of countries determined by MSCI to be "developed."
Although the list of developed markets may change over time, at the date of
this prospectus, these included: Australia, Austria, Belgium, Denmark,
Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Netherlands, New
Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the
United Kingdom. The designation of a market as "developed", by MSCI, arises
from several factors, the most common of which is minimum GDP per capita. The
Index is structured to represent the opportunities available to an
international investor in developed markets. MSCI targets 60% of the
available market capitalization of each country for inclusion in the index.
Securities selected by MSCI for inclusion in the Index must have acceptable
levels of liquidity and free float. MSCI also avoids inclusion of companies
which have a significant ownership stake in another company since substantial
cross-ownership can skew industry weights, distort country-level valuations
and overstate a country's true market size. The inclusion of a stock in the
MSCI EAFE Index in no way implies that MSCI believes the stock to be an
attractive investment, nor is MSCI a sponsor or in any way affiliated with
the Portfolio. The MSCI EAFE Index is the exclusive property of MSCI. Morgan
Stanley Capital International is a service mark of MSCI and has been licensed
for use by the Trust.
INDEX FUTURES CONTRACTS AND RELATED OPTIONS. The Portfolio may buy and
sell futures contracts on the Index and options on those futures contracts.
An "index future" is a contract to buy or sell units of an index at an agreed
price on a specified future date. Depending on the change in value of the
index between the time when the Portfolio enters into and terminates an index
future or option transaction, the Portfolio realizes a gain or loss. Options
and futures transactions involve risks. For example, it is possible that
changes in the prices of futures contracts on the Index will not correlate
precisely with changes in the value of the Index. In those cases, use of
futures contracts and related options might decrease the correlation between
the return of the Portfolio and the return of the Index. In addition, the
Portfolio incurs transaction costs in entering into, and closing out,
positions in futures contracts and related options. These costs typically
have the effect of reducing the correlation between the return of the
Portfolio and the return of the Index.
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OTHER DERIVATIVE TRANSACTIONS. The Portfolio may enter into derivatives
transactions involving options and swaps. These transactions involve many of the
same risks as those described above under "Index futures contracts and related
options." In addition, since many of such transactions are conducted directly
with counterparties, and not on an exchange or board of trade, the Portfolio's
ability to realize any investment return on such transactions may be dependent
on the counterparty's ability or willingness to meet its obligations.
REPURCHASE AGREEMENTS AND SECURITIES LOANS. The Portfolio may enter into
repurchase agreements and securities loans. Under a repurchase agreement, the
Portfolio purchases a debt instrument for a relatively short period (usually
not more than one week), which the seller agrees to repurchase at a fixed
time and price, representing the Portfolio's cost plus interest. Under a
securities loan, the Portfolio lends portfolio securities. The Portfolio will
enter into repurchase agreements and securities loans only with commercial
banks and with registered broker-dealers who are members of a national
securities exchange or market makers in government securities, and in the
case of repurchase agreements, only if the debt instrument is a U.S.
government security. Although the Advisor will monitor these transactions to
ensure that they will be fully collateralized at all times, the Portfolio
bears a risk of loss if the other party defaults on its obligation and the
Portfolio is delayed or prevented from exercising its rights to dispose of
the collateral. If the other party should become involved in bankruptcy or
insolvency proceedings, it is possible that the Portfolio may be treated as
an unsecured creditor and be required to return the underlying collateral to
the other party's estate.
YEAR 2000. The Portfolio's operations depend on the smooth functioning of
its service providers' computer systems. The Portfolio and its shareholders
could be adversely affected if those computer systems do not properly process
and calculate date-related information on or after January 1, 2000. Many
computer software systems in use today cannot distinguish between the year 2000
and the year 1900. Although year 2000 related computer problems could have a
negative effect on the Portfolio and its shareholders, the service providers
have advised the Portfolio that they are working to avoid such problems and
expect all systems to be adapted in time for the event. Because it is the
obligation of those service providers to ensure the proper functioning of their
computer systems, the Portfolio does not expect to incur any material expense in
connection with year 2000 preparations.
CHANGES IN POLICIES. The Trust's Trustees may change the Portfolio's
investment strategies and other policies without interestholder approval, except
as otherwise indicated. The Trustees will not materially change the Portfolio's
investment objective without interestholder approval.
ITEM 6. MANAGEMENT, ORGANIZATION AND CAPITAL STRUCTURE
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The Trustees of the Trust are responsible for generally overseeing the
conduct of the Trust's business. Subject to such policies as the Trustees may
determine, the Adviser furnishes a continuing investment program for the
Portfolio and makes investment decisions on its behalf.
The Adviser places all orders for purchases and sales of the Portfolio's
investments. In selecting broker-dealers, the Adviser may consider research and
brokerage services furnished to it and its affiliates. Affiliates of the Adviser
may receive brokerage commissions from the Portfolio in accordance with
procedures adopted by the Trustees under the 1940 Act, which require periodic
review of these transactions.
State Street Bank and Trust Company ("State Street"), through its State
Street Global Advisors division, serves as Adviser to the Portfolio and, subject
to the supervision of the Board of Trustees, will be responsible for the
investment management of the Portfolio. As of June 30, 1999, the Adviser managed
approximately $574 billion in assets. The Adviser's principal address is Two
International Place, Boston, Massachusetts 02110.
ADMINISTRATOR, CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT
State Street is the Administrator for the Portfolio and the Custodian for
the Portfolio's assets, and serves as the Transfer Agent to the Portfolio.
UNITARY FEE
As compensation for its services as Adviser, Administrator, Custodian
and Transfer Agent (and for assuming ordinary operating expenses of the
Portfolio, including ordinary legal and audit expenses), State Street
receives a unitary fee at an annual rate of 0.15% of average daily net assets
of the Portfolio.
LENDING AGENT
State Street is expected to be designated as the lending agent for the
Trust. In such capacity, it would cause the delivery of loaned securities from
the Portfolio to borrowers, arrange for the return of loaned securities to the
Portfolio at the termination of loans, request deposit of collateral, monitor
daily the value of the loaned securities and collateral, request that borrowers
add to the collateral when required by the loan agreements, and provide
recordkeeping and accounting services necessary for the operation of the
program. For its services, the lending agent would typically receive a portion
of the net investment income, if any, earned on the collateral for the
securities loaned.
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ITEM 7. INTERESTHOLDER INFORMATION
DETERMINATION OF NET ASSET VALUE
The Portfolio's net asset value is calculated on each day the New York
Stock Exchange (the "NYSE") is open at the earlier of: (i) the close of
trading on the NYSE, and (ii) 4:00 p.m. Eastern time. The net asset value is
based on the market value of the securities held in the Portfolio. The net
asset value per beneficial interest is calculated by dividing the value of
the net asset value of the Portfolio by the number of interests outstanding.
If quotations are not readily available, the portfolio securities will be
valued by methods approved by the Board of Trustees intended to reflect fair
value.
PURCHASING BENEFICIAL INTERESTS
The Portfolio issues beneficial interests solely in private placement
transactions that do not involve any "public offering" within the meaning of
Section 4(2) of the 1933 Act. Investment companies, institutional client
separate accounts, 401(k) plan assets, common and commingled trust funds or
collective investment trusts or similar organizations that are "accredited
investors" within the meaning of Regulation D of the 1933 Act are the only
investors currently permitted to invest in the Portfolio.
Investors pay no sales load to invest in this Portfolio. The price for
Portfolio beneficial interests is the net asset value per beneficial
interest. Orders will be priced at the net asset value next calculated after
the order is accepted by the Portfolio.
The minimum initial investment in the Portfolio is $25 million, although
the Adviser may waive the minimum in its discretion. There is no minimum
subsequent investment. The Portfolio intends to be as fully invested as is
practicable; therefore, investments must be made either in Federal Funds
(i.e., monies credited to the account of the Portfolio's custodian bank by a
Federal Reserve Bank) or securities acceptable to the Adviser. (Please
consult your tax adviser regarding in-kind transactions.) The Portfolio
reserves the right to cease accepting investments at any time or to reject
any investment order.
REDEEMING BENEFICIAL INTERESTS
An investor may withdraw all or any portion of its investment at the net
asset value next determined after it submits a withdrawal request, in proper
form, to the Portfolio. The Portfolio will pay the proceeds of the withdrawal
either in Federal Funds or in securities ("in-kind") at the discretion of the
Adviser, normally on the next Portfolio business day after the withdrawal,
but in any event no more than seven days after the withdrawal. (Please
consult your tax adviser regarding in-kind transactions.) At the request of
an investor, the Portfolio will normally redeem in-kind to the investor.
Investments in the Portfolio may not be transferred. The right of any
investor to receive payment with respect to any withdrawal may be suspended
or the payment of the withdrawal proceeds postponed during any period in
which the NYSE is closed (other
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than weekends or holidays) or trading on the NYSE is restricted or, to the
extent otherwise permitted by the 1940 Act, if an emergency exists.
TAX CONSIDERATIONS
The Portfolio does not expect to be subject to any income tax as it has
been determined that it will be properly treated as a partnership for federal
and state income tax purposes. Each investor in the Portfolio, however, will be
taxable on its allocable share (as determined in accordance with the governing
instruments of the Trust) of the Portfolio's ordinary income and capital gain in
determining its income tax liability. The determination of such share will be
made in accordance with the Internal Revenue Code of 1986, as amended (the
"Code"), and regulations promulgated thereunder.
The Portfolio expects to manage its assets and income in such a way that
an investment company investing in the Portfolio will be able to satisfy the
requirements of Subchapter M of the Code, assuming that it invests all of its
assets in the Portfolio.
ITEM 8. DISTRIBUTION ARRANGEMENTS
Not applicable.
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PART A--STATE STREET AGGREGATE BOND INDEX PORTFOLIO
We have omitted responses to Items 1, 2, 3, 5 and 9 pursuant to paragraph
2(b) of General Instruction B to Form N-1A.
INTRODUCTION
State Street Master Trust (the "Trust") is a no-load, open-end
management investment company. It was organized as a business trust under the
laws of The Commonwealth of Massachusetts on July 27, 1999. The Trust issues
beneficial interests solely in private placement transactions that do not
involve any "public offering" within the meaning of Section 4(2) of the
Securities Act of 1933, as amended (the "1933 Act"). Only investment
companies, institutional client separate accounts, 401(k) plan assets, common
or commingled trust funds or collective investment trusts or similar
organizations or entities that are "accredited investors" within the meaning
of Regulation D under the 1933 Act may invest in the Trust. This Registration
Statement does not constitute an offer to sell, or the solicitation of an
offer to buy, any "security" within the meaning of the 1933 Act. The State
Street Equity 500 Index Portfolio, the State Street Equity 400 Index
Portfolio, the State Street Equity 2000 Index Portfolio, the State Street
EAFE Index Portfolio and the State Street Aggregate Bond Index Portfolio (the
"Equity 500 Index Portfolio," the "Equity 400 Index Portfolio," "Equity 2000
Index Portfolio," the "EAFE Index Portfolio" and the "Aggregate Bond Index
Portfolio," respectively) are each a diversified separate series of the Trust.
ITEM 4. INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES, AND RELATED RISKS
The investment objective, principal strategies and risks of the Aggregate
Bond Index Portfolio (the "Portfolio") are described below; the investment
objectives, principal strategies and risks of the Equity 500 Index Portfolio,
the Equity 400 Index Portfolio, the Equity 2000 Index Portfolio and the EAFE
Index Portfolio are described separately. See Part B for a description of
certain fundamental investment restrictions for the Portfolio.
SUMMARY
INVESTMENT OBJECTIVE. The Portfolio's investment objective is to replicate,
as closely as possible, before expenses, the performance of the Lehman Brothers
Aggregate Bond Index (the "LBAB Index"). There is no assurance that the
Portfolio will achieve its investment objective.
PRINCIPAL INVESTMENT STRATEGIES. The Portfolio uses a management
strategy designed to track the performance of the LBAB Index. The LBAB Index
is a well-known fixed-income securities index, which emphasizes government
securities, mortgage-backed securities and corporate investment grade debt
securities.
State Street Bank and Trust Company, through its State Street Global
Advisors
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division (the "Adviser"), seeks to track the performance of the LBAB Index by
investing in debt securities and other investments that are representative of
the LBAB Index as a whole. Due to the large number of securities in the LBAB
Index and the fact that certain Index securities are unavailable for purchase,
complete replication is not possible. Rather, the Portfolio intends to select
securities that the Adviser believes will track the LBAB Index in terms of
industry weightings, market capitalization and other characteristics.
The Portfolio may make direct investments in U.S. government securities;
corporate debt securities; mortgage-backed and other asset-backed securities;
commercial paper, notes, and bonds issued by domestic and foreign
corporations; instruments of U.S. and foreign banks, including certificates
of deposit, time deposits, letters of credit, and banker's acceptances; and
swap agreements. Securities in which the Portfolio invests may be
fixed-income securities, zero-coupon securities, or variable rate securities.
In addition, the Portfolio may at times purchase or sell futures
contracts on fixed-income securities, or options on those futures, in lieu of
investment directly in fixed-income securities themselves. It may also
purchase or sell futures contracts and options on the LBAB Index (or other
fixed-income securities indices), if and when they become available. The
Portfolio might do so, for example, in order to adjust the interest-rate
sensitivity of the Portfolio to bring it more closely in line with that of
the Index. It might also do so to increase its investment exposure pending
investment of cash in the bonds comprising the Index or to reduce its
investment exposure in situations where it intends to sell a portion of the
securities in its portfolio but the sale has not yet been completed. The
Portfolio may also, to the extent permitted by applicable law, invest in
shares of other mutual funds whose investment objectives and policies are
similar to those of the Portfolio. The Portfolio may also enter into other
derivatives transactions, including the purchase or sale of options or
entering into swap transactions, to assist in replicating the performance of
the Index.
PRINCIPAL RISKS OF INVESTING IN THE PORTFOLIO
- - Values of fixed-income securities could decline generally in response to
changes in interest rates or other factors.
- - Returns on investments in fixed-income securities could trail the returns
on other investment options, including investments in equity securities.
- - Issuers of the Portfolio's investments may not make timely payments of
interest and principal or may fail to make such payments at all.
- - The Portfolio's return may not match the return of the Index for a number
of reasons. For example, the return on the securities and other investments
selected by the Adviser may not correlate precisely with the return on the
Index. The Portfolio incurs a number of operating expenses not applicable
to the Index, and incurs costs in buying and selling securities. The
Portfolio may not be fully invested at times, either as a result of cash
flows into the Portfolio or reserves
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<PAGE>
of cash held by the Portfolio to meet redemptions.
THE PORTFOLIO'S SHARES WILL CHANGE IN VALUE, AND YOU COULD LOSE MONEY BY
INVESTING IN THE PORTFOLIO. THE PORTFOLIO MAY NOT ACHIEVE ITS OBJECTIVE. AN
INVESTMENT IN THE PORTFOLIO IS NOT A DEPOSIT WITH A BANK AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY.
OTHER INVESTMENT CONSIDERATIONS AND RISKS
THE LBAB INDEX. The LBAB Index is a well-known bond market index that
covers the U.S. investment-grade fixed-income bond market, including
government, corporate, mortgage-backed and asset-backed bonds, all with
maturities of over one year. Bonds in the LBAB Index are weighted according
to their market capitalizations. The composition of the Index is determined
by Lehman Brothers and is based on such factors as the market capitalization
of each bond, its remaining time to maturity and quality rating as determined
by Moody's Investor Securities, an outside ratings agency, and may be changed
from time to time. The Portfolio is not sponsored, endorsed, sold, or
promoted by Lehman Brothers, and Lehman Brothers makes no representation
regarding the advisability of investing in the Portfolio.
DEBT SECURITIES. The values of debt securities generally rise and fall
inversely with changes in interest rates. Interest rate risk is usually
greater for debt securities with longer maturities. The Portfolio's
investments will normally include debt securities with longer maturities,
although the Advisor will seek to ensure that the maturity characteristics of
the Portfolio as a whole will generally be similar to those of the LBAB
Index. Mortgage-backed and asset-backed securities are also subject to
increased interest rate risk, because prepayment rates on such securities
typically increase as interest rates decline and decrease as interest rates
rise. Changes in prepayment rates on mortgage-backed and asset-backed
securities effectively increase and decrease the Portfolio's average maturity
when that is least desirable. The Portfolio will also be subject to credit
risk (the risk that the issuer of a security will fail to make timely
payments of interest and principal).
FUTURES CONTRACTS AND RELATED OPTIONS. The Portfolio may buy and sell
futures contracts on securities contained in the LBAB Index and options on
those futures contracts. A "futures contract" on debt securities (such as
U.S. Treasury securities) is a contract to buy or sell the securities at an
agreed price on a specified future date. Depending on the change in value of
the index between the time when the Portfolio enters into and terminates a
future or option transaction, the Portfolio realizes a gain or loss. Options
and futures transactions involve risks. For example, it is possible that
changes in the prices of futures contracts will not correlate precisely with
changes in the value of the underlying security. In those cases, use of
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futures contracts and related options might decrease the correlation between
the return of the Portfolio and the return of the LBAB Index. In addition,
the Portfolio incurs transaction costs in entering into, and closing out,
positions in futures contracts and related options. These costs typically
have the effect of reducing the correlation between the return of the
Portfolio and the return of the LBAB Index.
OTHER DERIVATIVE TRANSACTIONS. The Portfolio may enter into derivatives
transactions involving options and swaps. These transactions involve many of the
same risks as those described above under "Futures contracts and related
options." In addition, since many of such transactions are conducted directly
with counterparties, and not on an exchange or board of trade, the Portfolio's
ability to realize any investment return on such transactions may be dependent
on the counterparty's ability or willingness to meet its obligations.
REPURCHASE AGREEMENTS AND SECURITIES LOANS. The Portfolio may enter into
repurchase agreements and securities loans. Under a repurchase agreement, the
Portfolio purchases a debt instrument for a relatively short period (usually
not more than one week), which the seller agrees to repurchase at a fixed
time and price, representing the Portfolio's cost plus interest. Under a
securities loan, the Portfolio lends portfolio securities. The Portfolio will
enter into repurchase agreements and securities loans only with commercial
banks and with registered broker-dealers who are members of a national
securities exchange or market makers in government securities, and in the
case of repurchase agreements, only if the debt instrument is a U.S.
government security. Although the Advisor will monitor these transactions to
ensure that they will be fully collateralized at all times, the Portfolio
bears a risk of loss if the other party defaults on its obligation and the
Portfolio is delayed or prevented from exercising its rights to dispose of
the collateral. If the other party should become involved in bankruptcy or
insolvency proceedings, it is possible that the Portfolio may be treated as
an unsecured creditor and be required to return the underlying collateral to
the other party's estate.
YEAR 2000. The Portfolio's operations depend on the smooth functioning of
its service providers' computer systems. The Portfolio and its shareholders
could be adversely affected if those computer systems do not properly process
and calculate date-related information on or after January 1, 2000. Many
computer software systems in use today cannot distinguish between the year 2000
and the year 1900. Although year 2000 related computer problems could have a
negative effect on the Portfolio and its shareholders, the service providers
have advised the Portfolio that they are working to avoid such problems and
expect all systems to be adapted in time for the event. Because it is the
obligation of those service providers to ensure the proper functioning of their
computer systems, the Portfolio does not expect to incur any material expense in
connection with year 2000 preparations.
CHANGES IN POLICIES. The Trust's Trustees may change the Portfolio's
33
<PAGE>
investment strategies and other policies without interestholder approval, except
as otherwise indicated. The Trustees will not materially change the Portfolio's
investment objective without shareholder approval.
ITEM 6. MANAGEMENT, ORGANIZATION AND CAPITAL STRUCTURE
The Trustees of the Trust are responsible for generally overseeing the
conduct of the Trust's business. Subject to such policies as the Trustees may
determine, the Adviser furnishes a continuing investment program for the
Portfolio and makes investment decisions on its behalf.
The Adviser places all orders for purchases and sales of the Portfolio's
investments. In selecting broker-dealers, the Adviser may consider research and
brokerage services furnished to it and its affiliates. Affiliates of the Adviser
may receive brokerage commissions from the Portfolio in accordance with
procedures adopted by the Trustees under the 1940 Act, which require periodic
review of these transactions.
State Street Bank and Trust Company ("State Street"), through its State
Street Global Advisors division, serves as Adviser to the Portfolio and, subject
to the supervision of the Board of Trustees, will be responsible for the
investment management of the Portfolio. As of June 30, 1999, the Adviser managed
approximately $574 billion in assets. The Adviser's principal address is Two
International Place, Boston, Massachusetts 02110.
ADMINISTRATOR, CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT
State Street is the Administrator for the Portfolio and the Custodian for
the Portfolio's assets, and serves as the Transfer Agent to the Portfolio.
UNITARY FEE
As compensation for its services as Adviser, Administrator, Custodian
and Transfer Agent (and for assuming ordinary operating expenses of the
Portfolio, including ordinary legal and audit expenses), State Street
receives a unitary fee at an annual rate of 0.10% of average daily net assets
of the Portfolio.
LENDING AGENT
State Street is expected to be designated as the lending agent for the
Trust. In such capacity, it would cause the delivery of loaned securities from
the Portfolio to borrowers, arrange for the return of loaned securities to the
Portfolio at the termination of loans, request deposit of collateral, monitor
daily the value of the loaned securities and
34
<PAGE>
collateral, request that borrowers add to the collateral when required by the
loan agreements, and provide recordkeeping and accounting services necessary for
the operation of the program. For its services, the lending agent would
typically receive a portion of the net investment income, if any, earned on the
collateral for the securities loaned.
ITEM 7. INTERESTHOLDER INFORMATION
DETERMINATION OF NET ASSET VALUE
The Portfolio's net asset value is calculated on each day the New York
Stock Exchange (the "NYSE") is open at the earlier of: (i) the close of
trading on the NYSE, and (ii) 4:00 p.m. Eastern time. The net asset value is
based on the market value of the securities held in the Portfolio. The net
asset value per beneficial interest is calculated by dividing the value of
the net asset value of the Portfolio by the number of interests outstanding.
If quotations are not readily available, the portfolio securities will be
valued by methods approved by the Board of Trustees intended to reflect fair
value.
PURCHASING BENEFICIAL INTERESTS
The Portfolio issues beneficial interests solely in private placement
transactions that do not involve any "public offering" within the meaning of
Section 4(2) of the 1933 Act. Investment companies, institutional client
separate accounts, 401(k) plan assets, common and commingled trust funds or
collective investment trusts or similar organizations that are "accredited
investors" within the meaning of Regulation D of the 1933 Act are the only
investors currently permitted to invest in the Portfolio.
Investors pay no sales load to invest in this Portfolio. The price for
Portfolio beneficial interests is the net asset value per beneficial
interest. Orders will be priced at the net asset value next calculated after
the order is accepted by the Portfolio.
The minimum initial investment in the Portfolio is $25 million, although
the Adviser may waive the minimum in its discretion. There is no minimum
subsequent investment. The Portfolio intends to be as fully invested as is
practicable; therefore, investments must be made either in Federal Funds
(i.e., monies credited to the account of the Portfolio's custodian bank by a
Federal Reserve Bank) or securities acceptable to the Adviser. (Please
consult your tax adviser regarding in-kind transactions.) The Portfolio
reserves the right to cease accepting investments at any time or to reject
any investment order.
REDEEMING BENEFICIAL INTERESTS
An investor may withdraw all or any portion of its investment at the net
asset value next determined after it submits a withdrawal request, in proper
form, to the Portfolio. The Portfolio will pay the proceeds of the withdrawal
either in Federal Funds or in securities ("in-kind") at the discretion of the
Adviser, normally on the next Portfolio
35
<PAGE>
business day after the withdrawal, but in any event no more than seven days
after the withdrawal. (Please consult your tax adviser regarding in-kind
transactions.) At the request of an investor, the Portfolio will normally
redeem in-kind to the investor. Investments in the Portfolio may not be
transferred. The right of any investor to receive payment with respect to any
withdrawal may be suspended or the payment of the withdrawal proceeds
postponed during any period in which the NYSE is closed (other than weekends
or holidays) or trading on the NYSE is restricted or, to the extent otherwise
permitted by the 1940 Act, if an emergency exists.
TAX CONSIDERATIONS
The Portfolio does not expect to be subject to any income tax as it has
been determined that it will be properly treated as a partnership for federal
and state income tax purposes. Each investor in the Portfolio, however, will be
taxable on its allocable share (as determined in accordance with the governing
instruments of the Trust) of the Portfolio's ordinary income and capital gain in
determining its income tax liability. The determination of such share will be
made in accordance with the Internal Revenue Code of 1986, as amended (the
"Code"), and regulations promulgated thereunder.
The Portfolio expects to manage its assets and income in such a way that
an investment company investing in the Portfolio will be able to satisfy the
requirements of Subchapter M of the Code, assuming that it invests all of its
assets in the Portfolio.
ITEM 8. DISTRIBUTION ARRANGEMENTS
Not applicable.
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PART B
ITEM 10. COVER PAGE AND TABLE OF CONTENTS
Trust History
Description of the Portfolio and its Investments and Risks
Management of the Portfolio
Control Persons and Principal Holders of Securities
Investment Advisory and Other Services
Brokerage Allocation and Other Practices
Capital Stock and Other Securities
Purchase, Redemption and Pricing of Beneficial Interests
Taxation of the Portfolio
Underwriters
Calculation of Performance Data
Financial Statements
ITEM 11. TRUST HISTORY
The Trust was organized as a business trust under the laws of The Commonwealth
of Massachusetts on July 27, 1999.
ITEM 12. DESCRIPTION OF PORTFOLIO AND ITS INVESTMENTS AND RISKS
Each Part A contains information about the investment objective and policies
of the respective Portfolio of State Street Master Trust (the "Trust"). This
Part B should only be read in conjunction with the Part A of the Portfolio or
Portfolios in which you intend to invest. In addition to the principal
investment strategies and the principal risks of the Portfolio described in
Part A, the Portfolio may employ other investment practices and may be
subject to additional risks, which are described below.
ADDITIONAL INFORMATION CONCERNING THE S&P 500 INDEX
The Portfolio is not sponsored, endorsed, sold or promoted by Standard & Poor's,
a division of the McGraw-Hill Companies Inc. ("S&P"). S&P makes no
representation or warranty, express or implied, to the owners of beneficial
interests of the Portfolio or any member of the public regarding the
advisability of investing in securities generally or in the Portfolio
particularly or the ability of the S&P 500 to track general stock market
performance. S&P's only relationship to the Portfolio is the licensing of
certain trademarks and trade names of S&P and of the S&P 500 which is
determined, composed and calculated by S&P without regard to the Portfolio. S&P
has no obligation to take the needs of the Portfolio or the owners of beneficial
interests of the Portfolio into consideration in determining, composing or
calculating the S&P 500 Index. S&P is not responsible for and has not
participated in the determination of the prices and amount of the Portfolio or
the timing of the issuance of sale of beneficial interests of the Portfolio.
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<PAGE>
S&P has no obligation or liability in connection with the administration,
marketing or trading of the Portfolio.
S&P does not guarantee the accuracy or the completeness of the S&P 500 Index or
any data included therein and S&P shall have no liability for any errors,
omissions or interruptions therein. S&P makes no warranty, express or implied,
as to results to be obtained by the Portfolio, owners of beneficial interests of
the Portfolio or any other person or entity from the use of the S&P 500 Index or
any data included therein. S&P makes no express or implied warranties, and
expressly disclaims all warranties of merchantability or fitness for a
particular purpose or use with respect to the S&P 500 Index or any data included
therein. Without limiting any of the foregoing, in no event shall S&P have any
liability for any special, punitive, indirect or consequential damages
(including lost profits), even if notified of the possibility of such damages.
ADDITIONAL INFORMATION CONCERNING THE S&P 400 INDEX
The Portfolio is not sponsored, endorsed, sold or promoted by Standard & Poor's,
a division of the McGraw-Hill Companies Inc. ("S&P"). S&P makes no
representation or warranty, express or implied, to the owners of beneficial
interests of the Portfolio or any member of the public regarding the
advisability of investing in securities generally or in the Portfolio
particularly or the ability of the S&P 400 Index to track general stock market
performance. S&P's only relationship to the Portfolio is the licensing of
certain trademarks and trade names of S&P and of the S&P 400 Index which is
determined, composed and calculated by S&P without regard to the Portfolio. S&P
has no obligation to take the needs of the Portfolio or the owners of beneficial
interests of the Portfolio into consideration in determining, composing or
calculating the S&P 400 Index. S&P is not responsible for and has not
participated in the determination of the prices and amount of the Portfolio or
the timing of the issuance of sale of beneficial interests of the Portfolio. S&P
has no obligation or liability in connection with the administration, marketing
or trading of the Portfolio.
S&P does not guarantee the accuracy or the completeness of the S&P 400 Index or
any data included therein and S&P shall have no liability for any errors,
omissions or interruptions therein. S&P makes no warranty, express or implied,
as to results to be obtained by the Portfolio, owners of beneficial interests of
the Portfolio or any other person or entity from the use of the S&P 400 Index or
any data included therein. S&P makes no express or implied warranties, and
expressly disclaims all warranties of merchantability or fitness for a
particular purpose or use with respect to the S&P 400 Index or any data included
therein. Without limiting any of the foregoing, in no event shall S&P have any
liability for any special, punitive, indirect or consequential damages
(including lost profits), even if notified of the possibility of such damages.
ADDITIONAL INFORMATION CONCERNING THE RUSSELL 2000 INDEX
The Portfolio is not sponsored, endorsed, sold or promoted by Frank Russell
Company ("Russell").
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Russell makes no representation or warranty, express or implied, to the owners
of beneficial interests of the Portfolio or any member of the public regarding
the advisability of investing in securities generally or in the Portfolio
particularly or the ability of the Russell 2000 Index to track general stock
market performance. Russell's only relationship to the Portfolio is the
licensing of certain trademarks and trade names of Russell and of the Russell
2000 Index which is determined, composed and calculated by Russell without
regard to the Portfolio. Russell has no obligation to take the needs of the
Portfolio or the owners of beneficial interests of the Portfolio into
consideration in determining, composing or calculating the Russell 2000 Index.
Russell is not responsible for and has not participated in the determination of
the prices and amount of the Portfolio or the timing of the issuance of sale of
beneficial interests of the Portfolio. Russell has no obligation or liability in
connection with the administration, marketing or trading of the Portfolio.
Russell does not guarantee the accuracy or the completeness of the Russell 2000
Index or any data included therein and Russell shall have no liability for any
errors, omissions or interruptions therein. Russell makes no warranty, express
or implied, as to results to be obtained by the Portfolio, owners of beneficial
interests of the Portfolio or any other person or entity from the use of the
Russell 2000 Index or any data included therein. Russell makes no express or
implied warranties, and expressly disclaims all warranties of merchantability or
fitness for a particular purpose or use with respect to the Russell 2000 Index
or any data included therein. Without limiting any of the foregoing, in no event
shall Russell have any liability for any special, punitive, indirect or
consequential damages (including lost profits), even if notified of the
possibility of such damages.
ADDITIONAL INFORMATION CONCERNING THE MSCI EAFE INDEX
The Portfolio is not sponsored, endorsed, sold or promoted by MSCI or any
affiliate of MSCI. Neither MSCI nor any other party makes any representation
or warranty, express or implied, to the owners of this fund or any member of
the public regarding the advisability of investing in funds generally or in
this fund particularly or the ability of the MSCI-Registered Trademark-
EAFE-Registered Trademark- index to track general stock market performance.
MSCI is the licensor of certain trademarks, service marks and trade names of
MSCI and of the MSCI-Registered Trademark- EAFE-Registered Trademark- index
which is determined, composed and calculated by MSCI without regard to the
issuer of the Portfolio or the Portfolio. MSCI has no obligation to take the
needs of the issuer of this fund or the owners of the Portfolio into
consideration in determining, composing or calculating the MSCI-Registered
Trademark- EAFE-Registered Trademark- index. MSCI is not responsible for and
has not participated in the determination of the timing of, prices at, or
quantities of the Portfolio to be issued or in the determination or
calculation of the equation by which the Portfolio is redeemable for cash.
Neither MSCI nor any other party has any obligation or liability to owners of
the Portfolio in connection with the administration, marketing or trading of
the Portfolio.
Although MSCI shall obtain information for inclusion in or for use in the
calculation of the indexes from sources which MSCI considers reliable,
neither MSCI nor any other party guarantees the accuracy and/or the
completeness of the indexes or any data included therein. Neither MSCI nor
any other party makes any warranty, express or implied, as to results to be
obtained by licensee, licensee's customers and counterparties, owners of the
funds, or any other person or entity from the use of the indexes or any data
included therein in connection with the rights licensed hereunder or for any
other use. Neither MSCI nor any other party makes any express or implied
warranties, and MSCI hereby expressly disclaims all warranties of
merchantability or fitness for a particular purpose with respect to the
indexes or any data included therein. Without limiting any of the foregoing,
in no event shall MSCI or any other party have any liability for any direct,
indirect, special, punitive, consequential or any other damages (including
lost profits) even if notified of the possibility of such damages.
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ADDITIONAL INFORMATION CONCERNING THE LBAB INDEX
The Portfolio is not sponsored, endorsed, sold or promoted by Lehman Brothers.
Lehman Brothers makes no representation or warranty, express or implied, to the
owners of beneficial interests of the Portfolio or any member of the public
regarding the advisability of investing in securities generally or in the
Portfolio particularly or the ability of the LBAB Index to track general
performance. Lehman Brother's only relationship to the Portfolio is the
licensing of certain trademarks and trade names of Lehman Brothers and of the
LBAB Index which is determined, composed and calculated by Lehman Brothers
without regard to the Portfolio. Lehman Brothers has no obligation to take the
needs of the Portfolio or the owners of beneficial interests of the Portfolio
into consideration in determining, composing or calculating the LBAB Index.
Lehman Brothers is not responsible for and has not participated in the
determination of the prices and amount of the Portfolio or the timing of the
issuance of sale of beneficial interests of the Portfolio. Lehman Brothers has
no obligation or liability in connection with the administration, marketing or
trading of the Portfolio.
Lehman Brothers does not guarantee the accuracy or the completeness of the LBAB
Index or any data included therein and Lehman Brothers shall have no liability
for any errors, omissions or interruptions therein. Lehman Brothers makes no
warranty, express or implied, as to results to be obtained by the Portfolio,
owners of beneficial interests of the Portfolio or any other person or entity
from the use of the LBAB Index or any data included therein. Lehman Brothers
makes no express or implied warranties, and expressly disclaims all warranties
of merchantability or fitness for a particular purpose or use with respect to
the LBAB Index or any data included therein. Without limiting any of the
foregoing, in no event shall Lehman Brothers have any liability for any special,
punitive, indirect or consequential damages (including lost profits), even if
notified of the possibility of such damages.
ADDITIONAL INVESTMENTS AND RISKS
CASH RESERVES
Each Portfolio may hold portions of its assets in short-term debt instruments
with remaining maturities of 397 days or less pending investment or to meet
anticipated redemptions and day-to-day operating expenses. Short-term debt
instruments consist of:
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(i) short-term obligations of the U.S. government, its agencies,
instrumentalities, authorities or political subdivisions; (ii) other short-term
debt securities rated at the time of purchase Aa or higher by Moody's Investors
Service, Inc. ("Moody's") or AA or higher by Standard & Poor's Rating Group
("S&P") or, if unrated, of comparable quality in the opinion of the Adviser;
(iii) commercial paper; (iv) bank obligations, including negotiable certificates
of deposit, time deposits and bankers' acceptances; and (v) repurchase
agreements. At the time a Portfolio invests in commercial paper, bank
obligations or repurchase agreements, the issuer or the issuer's parent must
have outstanding debt rated Aa or higher by Moody's or AA or higher by S&P or
outstanding commercial paper or bank obligations rated Prime-1 by Moody's or A-1
by S&P; or, if no such ratings are available, the instrument must be of
comparable quality in the opinion of the Adviser. To the extent that a Portfolio
holds the foregoing instruments its ability to track its corresponding Index may
be adversely effected.
FUTURES CONTRACTS AND OPTIONS ON FUTURES
Each Portfolio may enter into futures contracts on securities in which it may
invest or on indices comprised of such securities and may purchase and write
call and put options on such contracts.
A financial futures contract is a contract to buy or sell a specified
quantity of financial instruments such as U.S. Treasury bills, notes and
bonds at a specified future date at a price agreed upon when the contract is
made. An index futures contract is a contract to buy or sell specified units
of an index at a specified future date at a price agreed upon when the
contract is made. The value of a unit is based on the current value of the
index. Under such contracts no delivery of the actual securities making up
the index takes place. Rather, upon expiration of the contract, settlement is
made by exchanging cash in an amount equal to the difference between the
contract price and the closing price of the index at expiration, net of
variation margin previously paid.
Substantially all futures contracts are closed out before settlement date or
called for cash settlement. A futures contract is closed out by buying or
selling an identical offsetting futures contract. Upon entering into a futures
contract, a Portfolio is required to deposit an initial margin with the
Custodian for the benefit of the futures broker. The initial margin serves as a
"good faith" deposit that a Portfolio will honor their futures commitments.
Subsequent payments (called "variation margin") to and from the broker are made
on a daily basis as the price of the underlying investment fluctuates.
Options on futures contracts give the purchaser the right to assume a position
in a futures contract at a specified price at any time before expiration of the
option. A Portfolio will not commit more than 5% of the market value of its
total assets to initial margin deposits on futures and premiums paid for options
on futures.
ILLIQUID SECURITIES
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Each Portfolio may invest in illiquid securities. A Portfolio will invest no
more than 15% of its net assets in illiquid securities or securities that are
not readily marketable, including repurchase agreements and time deposits of
more than seven days' duration. The absence of a regular trading market for
illiquid securities imposes additional risks on investments in these
securities. Illiquid securities may be difficult to value and may often be
disposed of only after considerable expense and delay.
LENDING OF PORTFOLIO SECURITIES
Each Portfolio has the authority to lend portfolio securities to brokers,
dealers and other financial organizations in amounts up to 33 1/3% of the
total value of its assets. Any such loan must be continuously secured by
collateral in cash or cash equivalents maintained on a current basis in an
amount at least equal to the market value of the securities loaned by a
Portfolio. The Portfolio would continue to receive the equivalent of the
interest or dividends paid by the issuer on the securities loaned, and would
receive an additional return that may be in the form of a fixed fee or a
percentage of the collateral. The Portfolio would have the right to call the
loan and obtain the securities loaned at any time on notice of not more than
five business days. In the event of bankruptcy or other default of the
borrower, the Portfolio could experience both delays in liquidating the loan
collateral or recovering the loaned securities and losses including (a)
possible decline in the value of collateral or in the value of the securities
loaned during the period while the Portfolio seeks to enforce its rights
thereto, (b) possible subnormal levels of income and lack of access to income
during this period, and (c) expenses of enforcing its rights.
OPTIONS ON SECURITIES AND SECURITIES INDICES
Each Portfolio may purchase or sell options on securities in which it may invest
and on indices that are comprised of securities in which it may invest, subject
to the limitations set forth above and provided such options are traded on a
national securities exchange or in the over-the-counter market. Options on
securities indices are similar to options on securities except there is no
transfer of a security and settlement is in cash. A call option on a securities
index grants the purchaser of the call, for a premium paid to the seller, the
right to receive in cash an amount equal to the difference between the closing
value of the index and the exercise price of the option times a multiplier
established by the exchange upon which the option is traded. Typically, a call
option will be profitable to the holder of the option if the value of the
security or the index increases during the term of the option; a put option will
be valuable if the value of the security or the index decreases during the term
of the option. The Portfolios may also invest in warrants which entitle the
holder to buy equity securities at a specific price for a specific period of
time.
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PURCHASE OF OTHER INVESTMENT COMPANY FUNDS
Each Portfolio may, to the extent permitted under the 1940 Act and exemptive
rules and orders thereunder, invest in shares of other investment companies
which invest exclusively in money market instruments or in investment companies
with investment policies and objectives which are substantially similar to the
Portfolio's. These investments may be made temporarily, for example, to invest
uncommitted cash balances or, in limited circumstances, to assist in meeting
interestholder redemptions.
REPURCHASE AGREEMENTS
Each Portfolio may enter into repurchase agreements with banks and other
financial institutions, such as broker-dealers. In substance, a repurchase
agreement is a loan for which the Portfolio receives securities as collateral.
Under a repurchase agreement, the Portfolio purchases securities from a
financial institution that agrees to repurchase the securities at the
Portfolio's original purchase price plus interest within a specified time
(normally one business day). The Portfolio will limit repurchase transactions to
those member banks of the Federal Reserve System and broker-dealers whose
creditworthiness the Adviser considers satisfactory. Should the counterparty to
a transaction fail financially, the Portfolio may encounter delay and incur
costs before being able to sell the securities, or may be prevented from
realizing on the securities. Further, the amount realized upon the sale of the
securities may be less than that necessary to fully compensate the Portfolio.
US GOVERNMENT SECURITIES
Each Portfolio may purchase US government securities. US government securities
include US Treasury bills, notes, and bonds and other obligations issued or
guaranteed as to interest and principal by the US government and its agencies or
instrumentalities. Obligations issued or guaranteed as to interest and principal
by the US government, its agencies or instrumentalities include securities that
are supported by the full faith and credit of the United States Treasury,
securities that are supported by the right of the issuer to borrow from the
United States Treasury, discretionary authority of the US government agency or
instrumentality, and securities supported solely by the creditworthiness of the
issuer.
WHEN-ISSUED SECURITIES
Each Portfolio may purchase securities on a when-issued basis. Delivery of
and payment for these securities may take place as long as a month or more
after the date of the purchase commitment. The value of these securities is
subject to market fluctuation during this period, and no income accrues to
the Portfolio until settlement takes place. The Portfolio segregates liquid
securities in an amount at least equal to these commitments. When entering
into a when-issued transaction, the Portfolio will
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rely on the other party to consummate the transaction; if the other party fails
to do so, the Portfolio may be disadvantaged.
ADDITIONAL INVESTMENTS AND RISKS FOR THE EAFE INDEX PORTFOLIO AND THE
AGGREGATE BOND INDEX PORTFOLIO
REVERSE REPURCHASE AGREEMENTS
The EAFE Index Portfolio and the Aggregate Bond Index Portfolio may enter
into reverse repurchase agreements under the circumstances described in
"Investment Restrictions." In substance, a reverse repurchase agreement is a
borrowing for which the Portfolio provides securities as collateral. Under a
reverse repurchase agreement, the Portfolio sells portfolio securities to a
financial institution in return for cash in an amount equal to a percentage
of the portfolio securities' market value and agrees to repurchase the
securities at a future date at a prescribed repurchase price equal to the
amount of cash originally received plus interest on such amount. A Portfolio
retains the right to receive interest and principal payments with respect to
the securities while they are in the possession of the financial
institutions. Reverse repurchase agreements involve the risk of default by
the counterparty, which may adversely affect a Portfolio's ability to
reacquire the underlying securities.
TOTAL RETURN SWAPS
The EAFE Index Portfolio and the Aggregate Bond Index Portfolio may contract
with a counterparty to pay a stream of cash flows and receive the total return
of an index or a security for purposes of attempting to obtain a particular
desired return at a lower cost to the Portfolio than if the Portfolio had
invested directly in an instrument that yielded that
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desired return. A Portfolio's return on a swap will depend on the ability of its
counterparty to perform its obligations under the swap. The Advisor will cause
the Portfolio to enter into swap agreements only with counterparties that would
be eligible for consideration as repurchase agreement counterparties under the
Portfolio's repurchase agreement guidelines.
ADDITIONAL INVESTMENTS AND RISKS FOR THE EAFE INDEX PORTFOLIO
AMERICAN DEPOSITARY RECEIPTS (ADRS) AND EUROPEAN DEPOSITARY RECEIPTS (EDRS)
The EAFE Index Portfolio may purchase American Depository Receipts and European
Depository Receipts of foreign corporations represented in the Portfolio's
Index.
Generally, ADRs, in registered form, are designed for use in the US securities
markets and EDRs are issued for trading primarily in European securities
markets. ADRs are receipts typically issued by a US bank or trust company
evidencing ownership of the underlying securities. ADRs represent the right to
receive securities of foreign issuers deposited in a domestic bank or a
correspondent bank. ADRs do not eliminate the risk inherent in investing in the
securities of foreign issuers. However, by investing in ADRs rather than
directly in a foreign issuer's stock, the Portfolio can avoid currency risks
during the settlement period for either purchases or sales. In general, there is
a large liquid market in the US for many ADRs. The information available for
ADRs is subject to the accounting, auditing and financial reporting standards of
the domestic market or exchange on which they are traded, which standards are
more uniform and more exacting than those to which many foreign issuers are
subject. For purposes of the Portfolio's investment policies, the Portfolio's
investments in ADRs, EDRs, and similar instruments will be deemed to be
investments in the equity securities representing securities of foreign issuers
to which they relate.
FOREIGN CURRENCY EXCHANGE CONTRACTS
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The EAFE Index Portfolio may invest in foreign currency exchange contracts. The
Portfolio has the authority to deal in forward foreign currency exchange
contracts (including those involving the US dollar). This is accomplished
through individually negotiated contractual agreements to purchase or to sell a
specified currency at a specified future date and price set at the time of the
contract. The Portfolio's dealings in forward foreign currency exchange
contracts may be with respect to a specific purchase or sale of a security or
with respect to its portfolio positions generally.
ADDITIONAL INVESTMENTS AND RISKS FOR THE AGGREGATE BOND INDEX PORTFOLIO
ASSET-BACKED SECURITIES
The Aggregate Bond Index Portfolio may invest in asset-backed securities.
Asset-backed securities represent undivided fractional interests in pools of
instruments, such as consumer loans, and are similar in structure to
mortgage-related securities described below. Payments of principal and interest
are passed through to holders of the securities and are typically supported by
some form of credit enhancement, such as a letter of credit, surety bond,
limited guarantee by another entity or by priority to certain of the borrower's
other securities. The degree of credit enhancement varies, generally applying
only until exhausted and covering only a fraction of the security's par value.
If the credit enhancement of an asset-backed security held by the Portfolio has
been exhausted, and if any required payments of principal and interest are not
made with respect to the underlying loans, the Portfolio may experience loss or
delay in receiving payment and a decrease in the value of the security.
EURODOLLAR CERTIFICATES OF DEPOSIT (ECDS), EURODOLLAR TIME DEPOSITS (ETDS) AND
YANKEE CERTIFICATES OF DEPOSIT (YCDS)
The Aggregate Bond Index Portfolio may invest in ECDs, ETDs and YCDs. ECDs are
US dollar denominated certificates of deposit issued by foreign branches of
domestic banks. ETDs are US dollar denominated deposits in foreign branches of
US banks and foreign banks. YCDs are US dollar denominated certificates of
deposit issued by US branches of foreign banks.
Different risks than those associated with the obligations of domestic banks may
exist for ECDs, ETDs and YCDs because the banks issuing these instruments, or
their domestic or foreign branches, are not necessarily subject to the same
regulatory requirements that apply to domestic banks, such as loan limitations,
examinations and reserve, accounting, auditing, recordkeeping and public
reporting requirements.
FORWARD COMMITMENTS
The Aggregate Bond Index Portfolio may contract to purchase securities for a
fixed price at a future date beyond customary settlement time. When effecting
such transactions, cash or marketable securities held by a Portfolio of a
dollar amount sufficient to make payment for the Portfolio securities to be
purchased will be segregated on a Portfolio's records at the trade date and
maintained until the transaction is settled. The failure of the other Party
to complete the transaction may cause the Portfolio to miss an advantageous
price or yield. Forward commitments involve risk of loss if the value of the
security to be purchased declines prior to settlement date, or if the other
party fails to complete the transaction.
INTEREST RATE SWAPS
The Aggregate Bond Index Portfolio may enter into interest rate swap
transactions with respect to any security it is entitled to hold. Interest rate
swaps involve the exchange by
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the Portfolio with another party of their respective rights to receive interest,
e.g., an exchange of floating rate payments for fixed rate payments. The
Portfolio expects to enter into these transactions primarily to preserve a
return or spread on a particular investment or portion of its portfolio or to
protect against any increase in the price of securities it anticipates
purchasing at a later date. The Portfolio intends to use these transactions as a
hedge and not as a speculative investment.
INVESTMENT-GRADE BONDS
The Aggregate Bond Index Portfolio may invest in corporate notes and bonds which
are rated investment-grade by a Nationally Recognized Statistical Rating
Organization ("NRSRO") or, if unrated, are determined by the Advisor to be of
comparable quality. Investment-grade securities include securities rated Baa by
Moody's or BBB- by S&P (and securities of comparable quality), which securities
have speculative characteristics.
MORTGAGE-RELATED SECURITIES
The Aggregate Bond Index Portfolio may invest in mortgage-related securities,
including Government National Mortgage Association ("GNMA") Certificates
("Ginnie Maes"), Federal Home Loan Mortgage Corporation ("FHLMC") Mortgage
Participation Certificates ("Freddie Macs") and Federal National Mortgage
Association ("FNMA") Guaranteed Mortgage Certificates ("Fannie Maes") and
commercial mortgage backed securities which are in the Index. Mortgage
certificates are mortgage-backed securities representing undivided fractional
interests in pools of mortgage-backed loans. These loans are made by mortgage
bankers, commercial banks, savings and loan associations and other lenders.
Ginnie Maes are guaranteed by the full faith and credit of the US Government,
but Freddie Macs and Fannie Maes are not.
MORTGAGE-BACKED SECURITY ROLLS
The Aggregate Bond Index Portfolio may enter into "forward roll" transactions
with respect to mortgage-backed securities issued by GNMA, FNMA or FHLMC. In
a forward roll transaction, the Portfolio will sell a mortgage security to a
dealer or other permitted entity and simultaneously agree to repurchase a
similar security from the institution at a later date at an agreed upon
price. The mortgage securities that are repurchased will bear the same
interest rate as those sold, but generally will be collateralized by
different pools of mortgages with different prepayment histories than those
sold. There are two primary risks associated with the roll market for
mortgage-backed securities. First, the value and safety of the roll depends
entirely upon the counterparty's ability to redeliver the security at the
termination of the roll. Therefore, the counterparty to a roll must meet the
same credit criteria as the Portfolio's repurchase agreement counterparties.
Second, the security which is redelivered at the end of the roll period must
be substantially the same as the initial security, i.e., it must have the
same coupon, be issued by the same agency and be of the same type, have the
same original stated term to maturity, be priced to result in similar market
yields and must be "good delivery."
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Within these parameters, however, the actual pools that are redelivered could be
less desirable than those originally rolled, especially with respect to
prepayment characteristics.
SECTION 4(2) COMMERCIAL PAPER
The Aggregate Bond Index Portfolio may also invest in commercial paper issued
in reliance on the so-called private placement exemption from registration
afforded by Section 4(2) of the Securities Act of 1933 ("Section 4(2)
paper"). Section 4(2) paper is restricted as to disposition under the federal
securities laws and generally is sold to institutional investors that agree
that they are purchasing the paper for investment and not with a view to
public distribution. Any resale by the purchaser must be in an exempt
transaction. Section 4(2) paper normally is resold to other institutional
investors like the Portfolio through or with the assistance of the issuer or
investment dealers that make a market in Section 4(2) paper. Section 4(2)
paper will not be subject to the Portfolio's percentage limitations on
illiquid securities where the Advisor (pursuant to guidelines adopted by the
Board) determines that a liquid trading market exists.
VARIABLE AND FLOATING RATE SECURITIES
The Aggregate Bond Index Portfolio may invest in variable and floating rate
securities. A variable rate security provides for the automatic establishment of
a new interest rate on set dates. Interest rates on these securities are
ordinarily tied to, and are a percentage of, a widely recognized interest rate,
such as the yield on 90-day US Treasury bills or the prime rate of a specified
bank. These rates may change as often as twice daily. Generally, changes in
interest rates will have a smaller effect on the market value of variable and
floating rate securities than on the market value of comparable fixed income
obligations. Thus, investing in variable and floating rate securities generally
allows less opportunity for capital appreciation and depreciation than investing
in comparable fixed income securities.
ZERO COUPON SECURITIES
The Aggregate Bond Index Portfolio may invest in zero coupon securities. Zero
coupon securities are notes, bonds and debentures that: (1) do not pay current
interest and are issued at a substantial discount from par value; (2) have been
stripped of their unmatured interest coupons and receipts; or (3) pay no
interest until a stated date one or more years into the future. These securities
also include certificates representing interests in such stripped coupons and
receipts. Generally, changes in interest rates will have a greater impact on the
market value of a zero coupon security than on the market value of comparable
securities that pay interest periodically during the life of the instrument.
INVESTMENT RESTRICTIONS
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The Trust has adopted the following restrictions applicable to all of the
Portfolios, which may not be changed without the affirmative vote of a "majority
of the outstanding voting securities" of a Portfolio, which is defined in the
Investment Company Act of 1940, as amended (the "1940 Act"), to mean the
affirmative vote of the lesser of (1) more than 50% of the outstanding interests
of the Portfolio and (2) 67% or more of the interests present at a meeting if
more than 50% of the outstanding interests are present at the meeting in person
or by proxy.
A Portfolio may not:
(1) Borrow more than 33 1/3% of the value of its total assets less all
liabilities and indebtedness (other than such borrowings).
(2) Underwrite securities issued by other persons except to the extent
that, in connection with the disposition of its portfolio investments, it may be
deemed to be an underwriter under certain federal securities laws.
(3) Purchase or sell real estate, although it may purchase securities of
issuers which deal in real estate, securities which are secured by interests in
real estate, and securities which represent interests in real estate, and it may
acquire and dispose of real estate or interests in real estate acquired through
the exercise of its rights as a holder of debt obligations secured by real
estate or interests therein.
(4) Purchase or sell commodities or commodity contracts, except that it may
purchase and sell financial futures contracts and options and may enter into
foreign exchange contracts and other financial transactions not involving the
direct purchase or sale of physical commodities.
(5) Make loans, except by purchase of debt obligations in which the
Portfolio may invest consistent with its investment policies, by entering into
repurchase agreements, or by lending its portfolio securities.
(6) With respect to 75% of its total assets, invest in the securities of
any issuer if, immediately after such investment, more than 5% of the total
assets of the Portfolio (taken at current value) would be invested in the
securities of such issuer; provided that this limitation does not apply to
obligations issued or guaranteed as to interest or principal by the U.S.
government or its agencies or instrumentalities.
(7) With respect to 75% of its total assets, acquire more than 10% of the
outstanding voting securities of any issuer.
(8) Purchase securities (other than securities of the U.S. government, its
agencies or instrumentalities) if, as a result of such purchase, more than 25%
of the Portfolio's total assets would be invested in any one industry.
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(9) Issue any class of securities which is senior to the Portfolio's
beneficial interests, to the extent prohibited by the Investment Company Act of
1940, as amended.
In addition, it is contrary to each Portfolio's present policy, which may be
changed without interestholder approval, to invest in (a) securities which are
not readily marketable, (b) securities restricted as to resale (excluding
securities determined by the Trustees of the Trust (or the person designated by
the Trustees of the Trust to make such determinations) to be readily
marketable), and (c) repurchase agreements maturing in more than seven days, if,
as a result, more than 15% of the Portfolio's net assets (taken at current
value) would be invested in securities described in (a), (b) and (c) above.
All percentage limitations on investments will apply at the time of the making
of an investment and shall not be considered violated unless an excess or
deficiency occurs or exists immediately after and as a result of such
investment. Except for the investment restrictions listed above as fundamental
or to the extent designated as such in the Prospectus with respect to a
Portfolio, the other investment policies described in this Statement or in the
Prospectus are not fundamental and may be changed by approval of the Trustees.
ITEM 13. MANAGEMENT OF THE PORTFOLIO
The Trustees are responsible for generally overseeing the Trust's business. The
following table provides biographical information with respect to each Trustee
and officer of the Trust. Each Trustee who is an "interested person" of the
Trust, as defined in the 1940 Act, is indicated by an asterisk.
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William L. Boyan Trustee, 9/99 - present; Director of John
Age 61 Hancock Mutual Life Insurance Company,
John Hancock Mutual Life Insurance 1983 -1998; President and Chief
Company Operations Officer of John Hancock
200 Clarendon St. Mutual Life Insurance Company, 1992 -
Boston, Massachusetts 02117 1998.
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Michael F. Holland Trustee, 9/99 - present; Director and
Age 54 President Holland & Company LLC,
375 Park Ave. Chairman, 6/95 - present; The Blackstone
New York, New York 10152 Group, general partner, 1/94 - 5/95;
Oppenheimer & Company Inc., Vice
Chairman, 3/92 - 1/94; Salomon Brothers
Asset Management Inc., Chairman and
Chief Executive Officer, 5/89 - 3/92;
Salomon Brothers Inc., Managing Director
5/89 - 3/92.
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Rina K. Spence Trustee, 7/99 - present; Founder, President
Age 50 and CEO Spence Center for Women's
7 Acacia Street Health, 1994 - 1998; President and CEO
Cambridge, MA 02138 Emerson Hospital and Emerson Health
Systems, Inc., 1984 - 1994.
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James Little President and Treasurer, 9/99 - present;
Age 64 CFO, John Hancock Funds, 1986-1999.
695 Adams Street
Dorchester, MA 02122-1905
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The By-Laws of the Trust provide that the Trust shall indemnify each person who
is or was a Trustee of the Trust against all expenses, judgements, fines
settlements and other amounts actually and reasonable incurred in connection
with any proceeding if the person in good faith and reasonably believes that his
or her conduct was in the Trust's best interest. The Trust, at its expense,
provides liability insurance for the benefit of its Trustees and officers.
Each Trustee receives a $20,000 retainer in addition to $2,500 for each
in-person meeting and $500 for each telephonic meeting for his or her
services. The Trustees periodically review their fees to assure that such
fees continue to be appropriate in light of their responsibilities as well as
in relation to fees paid to trustees of other mutual funds.
The following table sets forth the total (estimated) remuneration of Trustees
and officers of the Trust for the fiscal year ended August 31, 2000, based on
an estimated four in-person meetings:
- --------------------------------------------------------------------------------
Name/Position Aggregate Pension or Estimated Total
Compensation Retirement Annual Compensation
from Trust Benefits Benefits Upon from Trust &
Accrued as Retirement Trust Complex
Part of Trust Paid to
Expenses Trustees
- --------------------------------------------------------------------------------
William L. $30,000 $0 $0 $0
Boyan, Trustee
- --------------------------------------------------------------------------------
Michael F. $30,000 $0 $0 $0
Holland, Trustee
- --------------------------------------------------------------------------------
Rina K. $30,000 $0 $0 $0
Spence, Trustee
- --------------------------------------------------------------------------------
ITEM 14. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
Not applicable.
ITEM 15. INVESTMENT ADVISORY AND OTHER SERVICES
Under the terms of the Investment Advisory Agreement with the Adviser (the
"Advisory Agreement"), the Adviser manages each Portfolio subject to the
supervision and direction of the Board of Trustees of the Trust.
State Street is a wholly owned subsidiary of State Street Corporation, a
publicly held
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bank holding company.
State Street may have deposit, loan and other commercial banking relationships
with the issuers of obligations which may be purchased on behalf of the
Portfolio, including outstanding loans to such issuers which could be repaid in
whole or in part with the proceeds of securities so purchased. Such affiliates
deal, trade and invest for their own accounts in such obligations and are among
the leading dealers of various types of such obligations. The Adviser has
informed the Portfolio that, in making its investment decisions, it does not
obtain or use material inside information in its possession or in the possession
of any of its affiliates. In making investment recommendations for the
Portfolio, the Adviser will not inquire or take into consideration whether an
issuer of securities proposed for purchase or sale by the Portfolio is a
customer of State Street, its parent or its subsidiaries or affiliates and, in
dealing with its customers, the Adviser, its parent, subsidiaries and affiliates
will not inquire or take into consideration whether securities of such customers
are held by any Portfolio managed by the Adviser or any such affiliate.
BANKING REGULATORY MATTERS
The Adviser has been advised by its counsel that, in counsel's opinion, the
Adviser currently may perform the services for the Portfolio described in this
Registration Statement without violation of the Glass-Steagall Act or other
applicable banking laws or regulations.
ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT
Under the Administrative Services Agreement (the "Administration Agreement"),
State Street is obligated on a continuous basis to provide such administrative
services as the Board of Trustees of the Trust reasonably deems necessary for
the proper administration of the Trust and the Portfolio. State Street will
generally assist in all aspects of the Trust's and the Portfolios' operations;
supply and maintain office facilities (which may be in State Street's own
offices); provide statistical and research data, data processing services,
clerical, accounting, bookkeeping and record keeping services (including without
limitation the maintenance of such books and records as are required under the
1940 Act and the rules thereunder, except as maintained by other agents),
internal auditing, executive and administrative services, and stationery and
office supplies; prepare reports to interestholders or investors; prepare and
file tax returns; supply financial information and supporting data for reports
to and filings with the SEC and various state Blue Sky authorities; supply
supporting documentation for meetings of the Board of Trustees; provide
monitoring reports and assistance regarding compliance with Declarations of
Trust, by-laws, investment objectives and policies and with Federal and state
securities laws; arrange for appropriate insurance coverage; calculate NAVs, net
income and realized capital gains or losses; and negotiate arrangements with,
and supervise and coordinate the activities of, agents and others to supply
services. Pursuant to the Administration Agreement, the Trust has agreed to
indemnify the Administrator for certain liabilities, including certain
liabilities arising under federal securities laws, unless
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such loss or liability results from the Administrator's gross negligence or
willful misconduct in the performance of its duties.
State Street serves as Custodian for the Portfolio pursuant to the Custody
Agreement. As Custodian, it holds the Portfolio's assets. State Street also
serves as transfer agent of the Portfolios pursuant to the Transfer Agency
Agreement.
UNITARY FEE
Under the Advisory Agreement, the Administration Agreement, the Custody
Agreement and the Transfer Agency Agreement, State Street is paid a "unitary
fee." See Item 6 in Part A for a description of the unitary fee.
COUNSEL AND INDEPENDENT ACCOUNTS
Ropes & Gray, One International Place, Boston, Massachusetts 02110, serves as
counsel to the Trust. Ernst & Young LLP are the independent accountants for the
Portfolios, providing audit services, tax return preparation, and assistance and
consultation with respect to the preparation of filings with the Securities and
Exchange Commission. The principal business address of Ernst & Young LLP is 200
Clarendon St., Boston, Massachusetts 02116.
ITEM 16. BROKERAGE ALLOCATION AND OTHER PRACTICES
The policy of the Trust regarding purchases and sales of securities for the
Portfolios is that primary consideration will be given to obtaining the most
favorable prices and efficient executions of transactions. Consistent with this
policy, when securities transactions are effected on a stock exchange, the
Trust's policy is to pay commissions which are considered fair and reasonable
without necessarily determining that the lowest possible commissions are paid in
all circumstances. The Trust believes that a requirement always to seek the
lowest possible commission cost could impede effective portfolio management and
preclude the Portfolio and the Adviser from obtaining a high quality of
brokerage and research services.
In seeking to determine the reasonableness of brokerage commissions paid in any
transaction, the Adviser relies upon its experience and knowledge regarding
commissions generally charged by various brokers and on its judgment in
evaluating the brokerage and research services received from the broker
effecting the transaction. Such determinations are necessarily subjective and
imprecise, as in most cases an exact dollar value for those services is not
ascertainable. In seeking to implement the Trust's policies, the Adviser effects
transactions with those brokers and dealers who the Adviser believes provides
the most favorable prices and are capable of providing efficient executions. If
the Adviser believes such price and execution are obtainable from more than one
broker or dealer, it may give consideration to placing portfolio transactions
with those brokers and dealers who also furnish research and other services to
the Portfolios or the Adviser. Such
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services may include, but are not limited to, information as to the
availability of securities for purchase or sale and statistical information
pertaining to corporate actions affecting stocks, including but not limited
to, stocks within the index whose performance the Portfolio in question seeks
to replicate. The fee paid by the Portfolios is not reduced because the
Adviser and its affiliates receive these services even though the Adviser
might otherwise have been required to purchase some of these services for
cash.
The Adviser assumes general supervision over placing orders on behalf of the
Trust for the purchase or sale of portfolio securities. If purchases or sales of
portfolio securities of the Trust and one or more other investment companies or
clients supervised by the Adviser are considered at or about the same time,
transactions in such securities are allocated among the several investment
companies and clients in a manner deemed equitable to all by the Adviser. In
some cases, this procedure could have a detrimental effect on the price or
volume of the security so far as the Trust is concerned. However, in other
cases, it is possible that the ability to participate in volume transactions and
to negotiate lower brokerage commissions will be beneficial to the Trust. The
primary consideration is prompt execution of orders at the most favorable net
price.
ITEM 17. CAPITAL STOCK AND OTHER SECURITIES
Under the Declaration of Trust, the Trustees are authorized to issue an
unlimited number of beneficial interests in each Portfolio. Upon liquidation
or dissolution of a Portfolio, investors are entitled to share pro rata in
the Portfolio's net assets available for distribution to its investors.
Investments in a Portfolio have no preference, preemptive, conversion or
similar rights and are fully paid and nonassessable, except as set forth
below. Investments in a Portfolio may not be transferred.
Each investor is entitled to a vote in proportion to the amount of its
investment in the Portfolio. Investors do not have cumulative voting rights,
and investors holding more than 50% of the aggregate beneficial interest in
the Trust may elect all of the Trustees if they choose to do so. The Trust is
not required and has no current intention to hold annual meetings of
investors but the Trust will hold special meetings of investors when in the
judgment of the Trustees it is necessary or desirable to submit matters for
an investor vote.
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Under Massachusetts law, interestholders in a Massachusetts business trust
could, under certain circumstances, be held personally liable for the
obligations of the trust. However, the Declaration of Trust disclaims
interestholder liability for acts or obligations of the Trust and provides
for indemnification out of the Trust's property for any claim or liability to
which the interestholder may become subject by reason of being or having been
an interestholder and for reimbursement of the interestholder for all legal
and other expenses reasonably incurred by the interestholder in connection
with any such claim or liability. Thus the risk of an interestholder's
incurring financial loss on account of interestholder liability is limited to
circumstances in which the Trust would be unable to meet its obligations.
ITEM 18. PURCHASE, REDEMPTION AND PRICING OF BENEFICIAL INTERESTS
Beneficial interests of the Portfolio are issued solely in private placement
transactions that do not involve any "public offering" within the meaning of
Section 4(2) of the 1933 Act. See "Purchase of Securities Being Offered" and
"Redemption or Repurchase" in Part A.
Each Portfolio determines the net asset value per interest in the Portfolio
on each day on which the NYSE is open ("Portfolio Business Day"). This
determination is made each Portfolio Business Day at the earlier of: (i) the
close of trading on the NYSE, and (ii) 4:00 p.m. Eastern time (the "Valuation
Time") by dividing the value of the Portfolio's net assets (i.e., the value
of its securities and other assets less its liabilities, including expenses
payable or accrued) by the number of interests outstanding at the time the
determination is made. (As of the date of this Part B, the NYSE is open for
trading every weekday except for: (a) the following holidays: New Year's Day,
Martin Luther King, Jr.'s Birthday, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas; and (b) the
preceding Friday or the subsequent Monday when one of the calendar-determined
holidays falls on a Saturday or Sunday, respectively). Purchases and
withdrawals will be effected at the time of determination of net asset value
next following the receipt of any purchase or withdrawal order.
Equity and debt securities (other than short-term debt obligations maturing in
60 days or less), including listed securities and securities for which price
quotations are available,
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will normally be valued on the basis of market value. This generally means
that equity securities and fixed income securities listed and traded
principally on any national securities exchange, including securities traded
on the NASDAQ NMS System, are valued on the basis of the last sale price or,
lacking any sales, at the closing bid price, on the primary exchange on which
the security is traded. U.S. equity and fixed-income securities traded
principally over-the-counter and options are valued on the basis of the last
reported bid price prior to the Valuation Time. Futures contracts are valued
on the basis of the last reported sale price prior to the Valuation Time.
Short-term debt obligations and money market securities maturing in 60 days
or less are valued at amortized cost, which approximates market. Other assets
are valued at fair value using methods determined in good faith by the Board
of Trustees.
ITEM 19. TAXATION OF THE PORTFOLIO
The Trust is organized as a business trust under Massachusetts Law. It is
intended that each Portfolio operate and be treated as a partnership for
federal income tax purposes and not as a "publicly traded partnership". As a
result, the Portfolio should not be subject to federal income tax; instead,
each investor in a Portfolio is required to take into account in determining
its federal income tax liability its allocable share of the Portfolio's
income, gains, losses, deductions, credits and tax preference items, without
regard to whether it has received any cash or property distributions from the
Portfolio. The determination of such share will be made in accordance with
the Internal Revenue Code of 1986, as amended (the "Code"), and the
regulations promulgated thereunder. Although the partnership is not subject
to federal income tax, the Trust will file the appropriate income tax returns.
It is intended that each Portfolio's assets, and the income generated therefrom,
will be managed in such a way that an investor in the Portfolio desiring to
qualify as a regulated investment company ("RIC") will satisfy the requirements
of Subchapter M of the Code, assuming that the investor invests all of its
assets in the Portfolio.
An investor's adjusted tax basis in a Portfolio will generally be the
aggregate price paid therefor, increased by the amounts of its distributive
shares of items of realized net income and gain, and reduced, but not below
zero, by the amounts of its distributive shares of items of net loss and the
amounts of any distributions received by the investor. To the extent the cash
proceeds of any withdrawal or distribution exceed an investor's adjusted tax
basis in the Portfolio, the investor will generally realize gain for federal
income tax purposes. If, upon complete withdrawal, (i.e., redemption of entire
interest in the Portfolio) the investor's adjusted tax basis in its interest in
the Portfolio exceeds the proceeds of the withdrawal, the investor will
generally realize a loss for federal income tax purposes.
Taxation of Certain Financial Instruments. A Portfolio may enter into futures
contracts, options on futures contracts and options on securities indices. Such
contracts held by the Portfolio at the close of its taxable year will generally
be treated for federal income tax purposes as sold for their fair market value
on the last business day of such
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year, a process known as "marking-to-market". Forty percent of any gain or loss
resulting from this constructive sale will be treated as short-term capital gain
or loss and 60 percent of such gain or loss will be treated as long-term capital
gain or loss without regard to the period the Portfolio actually held the
instruments. The amount of any capital gain or loss actually realized by the
Portfolio in a subsequent sale or other disposition of the instruments is
adjusted to reflect any capital gain or loss taken into account in a prior year
as a result of the constructive sale of the instruments. The hedging
transactions undertaken by the Portfolio may result in "straddles" for federal
income tax purposes. The straddle rules may affect the character of gains or
losses realized by a Portfolio. In addition, losses realized by the Portfolio
on positions that are part of a straddle may be deferred under the straddle
rules, rather than being taken into account in calculating the taxable income
for the taxable year in which the losses are realized.
A Portfolio may make one or more of the elections available under the Code
which are applicable to straddles. If a Portfolio makes any of the elections,
the amount, character and timing of the recognition of gains and losses from the
affected straddle positions will be determined under the rules that vary
according to the election(s) made. The rules applicable under certain of the
elections may operate to accelerate the recognition of gains or losses from the
affected straddle positions. Because the straddle rules may affect the character
of gains or losses, defer losses and/or accelerate the recognition of gains or
losses from the affected straddle positions, the amount which may be reported to
investors and which will be taxable to them as ordinary income or long-term
capital gain, may be increased or decreased as compared to a Portfolio that did
not engage in such hedging transactions.
Foreign Income. Income received by a Portfolio from sources within foreign
countries may be subject to withholding and other foreign taxes. Tax conventions
between certain countries and the United States may reduce or eliminate such
taxes. It is impossible to determine the effective rate of foreign tax in
advance since the amount of a Portfolio's assets to be invested in various
countries will vary. If a Portfolio is liable for foreign taxes, and if more
than 50% of the value of the Portfolio's total assets at the close of its
taxable year consists of stocks or securities of foreign corporations, an
investor in the Portfolio that is a RIC may make an election pursuant to which
certain foreign taxes paid by it would be treated as having been paid directly
by its shareholders. Pursuant to such election, the RIC's share of the amount of
foreign taxes paid by the Portfolio will be included in the income of the RIC's
shareholders, and such shareholders (except tax-exempt shareholders) may,
subject to certain limitations, claim either a credit or deduction for the
taxes. Each RIC investor will be notified after the close of the Portfolio's
taxable year whether the foreign taxes paid will "pass through" for that year
and, if so, such notification will designate (a) the RIC investor's portion of
the foreign taxes paid to each such country and (b) the portion which represents
income derived from sources within each such country.
The amount of foreign taxes for which an investor may claim a credit in any year
will generally be subject to a separate limitation for "passive income," which
includes, among
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other items of income, dividends, interest and certain foreign currency gains.
Because capital gains realized by a Portfolio on the sale of foreign
securities will be treated as U.S.-source income, the available credit of
foreign taxes paid with respect to such gains may be restricted by this
limitation.
The foregoing discussion summarizes some of the consequences under the current
federal tax law of an investment in the Portfolios. It is not a substitute for
personal tax advice. Consult your personal tax adviser about the potential tax
consequences of an investment in the Portfolio including in-kind transactions
under all applicable tax laws.
Non-U.S. investors in the Portfolio should consult their tax advisers concerning
the tax consequences of ownership of an interest in the Portfolio, including the
possibility that distributions may be subject to a 30 percent United States
withholding tax (or a reduced rate of withholding provided by treaty).
ITEM 20. UNDERWRITERS
Investment companies, common and commingled trust funds and similar
organizations and entities may continuously invest in the Portfolio.
ITEM 21. CALCULATION OF PERFORMANCE DATA
Not applicable.
ITEM 22. FINANCIAL STATEMENTS
Not applicable.
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PART C
We have omitted responses to Items 23(e) and (i)-(k) pursuant to paragraph 2(b)
of General Instruction B to Form N-1A.
ITEM 23. EXHIBITS
(a) Declaration of Trust is filed herewith.
(b) By-laws of the Trust are filed herewith.
(c) Not applicable.
(d) Form of Investment Advisory Contract is filed herewith.
(f) Not applicable.
(g) Form of Custodian Agreement is filed herewith.
(h)(1) Form of Transfer Agent and Services Agreement to be filed by amendment.
(h)(2) Form of Administration Agreement is filed herewith.
(h)(3) Form of License Agreement to use S&P 500 Composite Stock Price Index is
filed herewith.
(h)(4) Form of License Agreement to use S&P MidCap 400 Index is filed herewith.
(h)(5) Form of License Agreement to use Russell 2000 Index to be filed by
amendment.
(h)(6) Form of License Agreement to use MSCI EAFE Index to be filed by
amendment.
(l) Not applicable.
(m) Not applicable.
(n) Not applicable.
(Other) Powers of Attorney
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE PORTFOLIO
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None.
ITEM 25. INDEMNIFICATION
Pursuant to Section 5.3 of the Registrant's Amended and Restated Declaration of
Trust and under Section 4.8 of the Registrant's By-Laws, the Trust will
indemnify any person who is, or has been, a Trustee, officer, employee or agent
of the Trust against all expenses reasonably incurred or paid by him/her in
connection with any claim, action, suit or proceeding in which he/she becomes
involved as a party or otherwise by virtue of his/her being or having been a
Trustee, officer, employee or agent and against amounts paid or incurred by
him/her in the settlement thereof, if he/she acted in good faith and in a manner
he/she reasonably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had no reasonable
cause to believe his/her conduct was unlawful. In addition, indemnification is
permitted only if it is determined that the actions in question did not render
him/her liable by reason of willful misfeasance, bad faith or gross negligence
in the performance of his/her duties or by reason of reckless disregard of
his/her obligations and duties to the Registrant. The Registrant may also
advance money for litigation expenses provided that Trustees, officers,
employees and/or agents give their undertakings to repay the Registrant unless
their conduct is later determined to permit indemnification.
Pursuant to Section 5.2 of the Registrant's Amended and Restated Declaration of
Trust, no Trustee, officer, employee or agent of the Registrant shall be liable
for any action or failure to act, except in the case of willful misfeasance, bad
faith or gross negligence or reckless disregard of duties to the Registrant.
Pursuant to paragraph 9 of the Registrant's Investment Advisory Agreement, the
Adviser shall not be liable for any action or failure to act, except in the case
of willful misfeasance, bad faith or gross negligence or reckless disregard of
duties to the Registrant.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions of Rule 484 under the Act, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
The Registrant hereby undertakes that it will apply the indemnification
provision of its
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by-laws in a manner consistent with Release 11330 of the Securities and Exchange
Commission under the Investment Company Act of 1940, so long as the
interpretation of Sections 17(h) and 17(i) of such Act remains in effect. The
Registrant maintains insurance on behalf of any person who is or was a Trustee,
officer, employee or agent of Registrant, or who is or was serving at the
request of Registrant as a trustee, director, officer, employee or agent of
another trust or corporation, against any liability asserted against him/her and
incurred by him/her or arising out of his/her position. However, in no event
will Registrant maintain insurance to indemnify any such person for any act for
which Registrant itself is not permitted to indemnify him/her.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER
See "Management" in Part B. Information as to the directors and officers of the
Adviser is included in its Form ADV filed with the SEC and is incorporated
herein by reference thereto.
ITEM 27. PRINCIPAL UNDERWRITERS
Not applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
The accounts and records of the Registrant are located, in whole or in part, at
the office of the Registrant and the following locations:
STATE STREET MASTER TRUST PO Box 1713
("Registrant") Boston, MA 02105-1713
STATE STREET BANK AND TRUST Two International Place
COMPANY ("Adviser") Boston, MA 02110
STATE STREET BANK AND TRUST PO Box 1713
COMPANY ("Custodian, Administrator, Boston, MA 02105-1713
Transfer Agent and Dividend Disbursing
Agent")
ITEM 29. MANAGEMENT SERVICES
Not applicable.
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ITEM 30. UNDERTAKINGS
Not applicable.
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SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant, State Street Master Trust, has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Cambridge and Commonwealth of Massachusetts on the
30th the day of September, 1999.
STATE STREET MASTER TRUST
By: /s/ Rina K. Spence*
____________________________
Rina K. Spence
Trustee
By: /s/ William L. Boyan*
____________________________
William L. Boyan
Trustee
By: /s/ Michael F. Holland*
____________________________
Michael F. Holland
Trustee
* By Michael E. Gillespie pursuant to Powers of Attorney filed herewith.
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EXHIBIT LIST
- --------------------------------------------------------------------------------
EXHIBIT NO. DESCRIPTION
- --------------------------------------------------------------------------------
(a) Declaration of Trust
- --------------------------------------------------------------------------------
(b) By-laws of the Trust
- --------------------------------------------------------------------------------
(d) Form of Investment Advisory Contract
- --------------------------------------------------------------------------------
(g) Form of Custodian Agreement
- --------------------------------------------------------------------------------
(h)(2) Form of Administration Agreement
- --------------------------------------------------------------------------------
(h)(3) Form of License Agreement to use S&P 500 Composite Stock Price Index
- --------------------------------------------------------------------------------
(h)(4) Form of License Agreement to use S&P MidCap 400 Index
- --------------------------------------------------------------------------------
(Other) Powers of Attorney
- --------------------------------------------------------------------------------
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DECLARATION OF TRUST OF
STATE STREET MASTER TRUST
THE DECLARATION OF TRUST of State Street Master Trust made the 27th of
July, 1999, by the signatory hereto, as trustee (such person, so long as she
shall continue in office in accordance with the terms of this Declaration of
Trust, and all other persons who at the time in question have been duly elected
or appointed as trustees in accordance with the provisions of this Declaration
of Trust and are then in office, being hereinafter called the "TRUSTEES")
WITNESSETH:
WHEREAS, it is the intention that the Trust constitute a trust fund
under the laws of The Commonwealth of Massachusetts for the investment and
reinvestment of funds contributed thereto; and
WHEREAS, it is proposed that the trust assets be composed of money and
property contributed thereto by the holders of beneficial interests in the Trust
entitled to ownership rights in the Trust;
NOW, THEREFORE, the Trustees hereby declare that they will hold in
trust, all money and property contributed to the trust fund to manage and
dispose of the same for the benefit of the holders of beneficial interests in
the Trust and subject to the provisions hereof, to wit:
ARTICLE I
NAME AND DEFINITIONS
SECTION I.1 NAME. The name of the trust created hereby is State Street
Master Trust and so far as may be practicable the Trustees shall conduct the
Trust's activities, execute all documents and sue or be sued under that name,
which name (and the word "TRUST" wherever herein used) shall refer to the
Trustees as Trustees, and not as individuals, or personally, and shall not refer
to the officers, agents, employees or holders of beneficial interests in the
Trust. Should the Trustees determine that the use of such name is not advisable,
they may use such other name for the Trust as they deem proper and the Trust may
hold its property and conduct its activities under such other name.
SECTION I.2 DEFINITIONS. Wherever they are used herein, the following
terms have the following respective meanings:
(a) "BOOK CAPITAL ACCOUNT" means for any Holder at any time the
Book Capital Account of the Holder for such day is determined
in accordance with Section VIII.1 hereof.
(b) "BYLAWS" means the Bylaws referred to in Section III.10
hereof, as from time to time amended.
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(c) "CODE" means the United States Internal Revenue Code of 1986,
as amended from time to time.
(d) The terms "COMMISSION," "AFFILIATED PERSON" and "INTERESTED
PERSON" have the meanings given them in the 1940 Act.
(e) "DECLARATION" means this Declaration of Trust, as amended from
time to time. Reference in this Declaration of Trust to
"DECLARATION," "HEREOF," "HEREIN," and "HEREUNDER" shall be
deemed to refer to this Declaration rather than the article or
section in which such words appear.
(f) "FUNDAMENTAL POLICIES" shall mean the investment policies and
restrictions set forth in the Registration Statement and
designated as fundamental policies therein.
(g) "HOLDERS" shall mean as of any particular time all holders of
record of interests in the Trust or applicable Series.
(h) "INSTITUTIONAL INVESTOR(S)" shall mean any regulated
investment company, segregated asset account, foreign
investment company, common or commingled trust fund,
institutional client accounts, 401k plan assets, group trust,
collective investment trusts or similar organizations or
entities that are "Accredited Investors" within the meaning of
Regulation D of the 1933 Act.
(i) "INTEREST(S)" shall mean the beneficial interest of a Holder
in the Trust or applicable Series, including all rights,
powers and privileges accorded to Holders by this Declaration,
which interest may be expressed as a percentage, determined by
calculating, at such times and on such basis as the Trustees
shall from time to time determine, the ratio of each Holder's
Book Capital Account balance to the total of all Holders' Book
Capital Account balances. Reference herein to a specified
percentage of, or fraction of, Interests means Holders whose
combined Book Capital Account balances represent such
specified percentage or fraction of the combined Book Capital
Account balances of all, or a specified group of, Holders.
(j) "INVESTMENT ADVISER" means any party, other than the Trust, to
an investment advisory contract described in Section IV.1
hereof.
(k) "MAJORITY INTERESTS VOTE" means the vote of the Holders of a
majority of Interests which shall consist of: (i) a majority
of Interests voted on the matter at a meeting of Holders at
which a quorum, as determined in accordance with the Bylaws is
present; (ii) a majority of Interests voted when action is
taken by written consent of the Holders; and (iii) when any
action is required by the 1940 Act: (A) 67% or more of the
Interests present or represented by proxy at a meeting of
Holders, or (B) more than 50% of all Interests, whichever is
less;
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(l) "MANAGER" means any party, other than the Trust, to a
management contract described in Section IV.1 hereof.
(m) "1940 ACT" means the Investment Company Act of 1940 and the
rules and regulations thereunder, as amended from time to
time.
(n) "PERSON" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures and other
entities, whether or not legal entities, and governments and
agencies and political subdivisions thereof.
(o) "REDEMPTION" shall mean the complete withdrawal of an Interest
of a Holder, the result of which is to reduce the Book Capital
Account Balance of that Holder to zero, and the term "redeem"
shall mean to effect a Redemption.
(p) "REGISTRATION STATEMENT" means the Trust's Registration
Statement under the 1940 Act as such Registration Statement
may be amended or supplemented from time to time.
(q) "SERIES" means one of the separately managed components of the
Trust (or, if the Trust shall have only one such component,
then that one) as set forth in Section VI.1 hereof or as may
be established and designated from time to time by the
Trustees pursuant to that section.
(r) "TRANSFER AGENT" means the party, other than the Trust, to the
contract described in Section IV.4 hereof.
(s) "TRUST" means the State Street Master Trust, including any
series thereof.
(t) "TRUST PROPERTY" means any and all property real or personal,
tangible or intangible, which is owned or held by or for the
account of the Trust or the Trustees.
(u) "TRUSTEES" means the persons who have signed the Declaration,
so long as they shall continue in office in accordance with
the terms hereof, and all other persons who may from time to
time be duly elected or appointed, qualified and serving as
Trustees in accordance with the provisions hereof, and
reference herein to a Trustee or the Trustees shall refer to
such person or persons in their capacity as trustees
hereunder.
ARTICLE II
TRUSTEES
SECTION II.1 NUMBER OF TRUSTEES. The Trustees serving as such, whether
named above or hereafter becoming Trustees, may increase or decrease the number
of Trustees to a number other than the number theretofore determined, so long as
the number shall never be less than two (2); provided, however, that the number
of Trustees may be one (1) until such time as the initial Trustee shall elect
additional Trustees.
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SECTION II.2 ELECTION AND TERM. Trustees may become such by election by
Interestholders or by the Trustees then in office pursuant to Section II.4
hereof. The Trustees shall have the power to set and alter the terms of office
of the Trustees, and they may at any time lengthen or lessen their own terms or
make their terms of unlimited duration, subject to the resignation and removal
provisions of Section II.3 hereof. The Trustees may adopt Bylaws that divide the
Trustees into classes and proscribe the tenure of office of the several classes.
The Trustees may elect their own successors and may, pursuant to Section II.4
hereof, appoint Trustees to fill vacancies. The Trustees shall adopt Bylaws not
inconsistent with this Declaration or any provision of law to provide for
election of Trustees by Holders at such time or times as the Trustees shall
determine to be necessary or advisable.
SECTION II.3 RESIGNATION AND REMOVAL. Any Trustee may resign his or her
trust (without need for prior or subsequent accounting) by an instrument in
writing signed by him and delivered to the other Trustees and such resignation
shall be effective upon such delivery, or at a later date according to the terms
of the instrument. Any of the Trustees may be removed (provided the aggregate
number of Trustees after such removal shall not be less than one) by the action
of two-thirds of the remaining Trustees or by the action of the Holders by not
less than two-thirds of the Interests (for purposes of determining the
circumstances and procedures under which such removal by the Holders may take
place, the provisions of Section 16(c) of the 1940 Act shall be applicable to
the same extent as if the Trust were subject to the provisions of that Section).
Upon the resignation or removal of a Trustee, or his or her otherwise ceasing to
be a Trustee, he or she shall execute and deliver such documents as the
remaining Trustees shall require for the purpose of conveying to the Trust or
the remaining Trustees any Trust Property held in the name of the resigning or
removed Trustee. Upon the incapacity or death of any Trustee, his or her legal
representative shall execute and deliver on his or her behalf such documents as
the remaining Trustees shall require as provided in the preceding sentence. The
provisions of this Section II.3 may not be amended except by a vote of the
Holders of not less than two-thirds of the Interests.
SECTION II.4 VACANCIES. The term of office of a Trustee shall terminate
and a vacancy shall occur in the event of the death, resignation, removal,
bankruptcy, adjudicated incompetence or other incapacity to perform the duties
of the office of a Trustee. No such vacancy shall operate to annul the
Declaration or to revoke any existing agency created pursuant to the terms of
the Declaration. In the case of an existing vacancy existing by reason of an
increase in the number of Trustees, the remaining Trustees or, prior to the
public offering of Interests in the Trust, if only one Trustee shall then remain
in office, the remaining Trustee, shall fill such vacancy by the appointment of
such other Person as they or he/she, in their or his/her discretion, shall see
fit, made by a written instrument signed by a majority of the remaining Trustees
or by the remaining Trustee, as the case may be. An appointment of a Trustee may
be made in anticipation of a vacancy to occur at a later date by reason of
retirement, resignation or increase in the number of Trustees, provided that
such appointment shall not become effective prior to such retirement,
resignation or increase in the number of Trustees. Whenever a vacancy in the
number of Trustees shall occur, until such vacancy is filled as provided in this
Section II.4, the Trustees in office, regardless of their number, shall have all
the powers granted to the Trustees and shall discharge all the duties imposed
upon the Trustees by the Declaration. A written instrument certifying the
existence of such vacancy signed by a majority of the Trustees shall be
conclusive evidence of the existence of such vacancy.
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SECTION II.5 DELEGATION OF POWER TO OTHER TRUSTEES. Any Trustee may, by
power of attorney, delegate his or her power for a period not exceeding six (6)
months at any one time to any other Trustee or Trustees; provided that in no
case shall less than two (2) Trustees personally exercise the powers granted to
the Trustees under the Declaration except as herein otherwise expressly
provided.
ARTICLE III
POWERS OF TRUSTEES
SECTION III.1 GENERAL. The Trustees shall have exclusive and absolute
control over the Trust Property and over the business of the Trust to the same
extent as if the Trustees were the sole owners of the Trust Property and
business in their own right, but with such powers of delegation as may be
permitted by the Declaration. The Trustees shall have power to conduct the
business of the Trust and carry on its operations in any and all of its branches
and maintain offices both within and without The Commonwealth of Massachusetts,
in any and all states of the United States of America, in the District of
Columbia, and in any and all commonwealths, territories, dependencies, colonies,
possessions, agencies or instrumentalities wheresoever in the world they may be
located as they deem necessary, proper or desirable in order to promote the
interests of the Trust although such things are not herein specifically
mentioned. Any determination as to what is in the interests of the Trust made by
the Trustees in good faith shall be conclusive. In construing the provisions of
the Declaration, the presumption shall be in favor of a grant of power to the
Trustees.
The enumeration of any specific power herein shall not be construed as
limiting the aforesaid power. Such powers of the Trustees may be exercised
without order of or resort to any court.
SECTION III.2 INVESTMENTS. The Trustees shall have the power to:
(a) conduct, operate and carry on the business of an investment
company;
(b) subscribe for, invest in, reinvest in, purchase or otherwise
acquire, hold, pledge, sell, assign, transfer, exchange,
distribute, lend or otherwise deal in or dispose of negotiable
or nonnegotiable instruments, obligations, evidences of
indebtedness, certificates of deposit or indebtedness,
commercial paper, repurchase agreements, reverse repurchase
agreements, options, commodities, commodity future contracts
and related options, currencies, currency futures and forward
contracts, and other securities, investment contracts and
other instruments of any kind, including, without limitation,
those issued, guaranteed or sponsored by any and all Persons
including, without limitation, states, territories and
possessions of the United States, the District of Columbia and
any of the political subdivisions, agencies or
instrumentalities thereof, and by the United States Government
or its agencies or instrumentalities, foreign or international
instrumentalities, or by any bank or savings institution, or
by any corporation or organization organized under the laws of
the United States or of any state, territory or possession
thereof, and of corporations or organizations organized under
foreign laws, or in "when issued" contracts for any such
securities, or retain Trust assets in cash and from time to
time change the investments of the assets of the Trust; and to
exercise any and all rights,
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powers and privileges of ownership or interest in respect of
any and all such investments of every kind and description,
including, without limitation, the right to consent and
otherwise act with respect thereto, with power to designate
one or more persons, firms, associations or corporations to
exercise any of said rights, powers and privileges in respect
of any of said instruments.
The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust, nor shall the Trustees be limited
by any law limiting the investments which may be made by fiduciaries.
SECTION III.3 LEGAL TITLE. Legal title to all the Trust Property shall
be vested in the Trustees as joint tenants except that the Trustees shall have
power to cause legal title to any Trust Property to be held by or in the name of
one or more of the Trustees, or in the name of the Trust, or in the name of any
other Person as nominee, on such terms as the Trustees may determine, provided
that the interest of the Trust therein is appropriately protected. The right,
title and interest of the Trustees in the Trust Property shall vest
automatically in each Person who may hereafter become a Trustee. Upon the
resignation, removal or death of a Trustee he or she shall automatically cease
to have any right, title or interest in any of the Trust Property, and the
right, title and interest of such Trustee in the Trust Property shall vest
automatically in the remaining Trustees. Such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed and
delivered.
SECTION III.4 SALE AND INCREASES OF INTERESTS. The Trustees, in their
discretion, may, from time to time, without a vote of the Holders, permit any
Person to purchase an Interest, or increase its Interest, for such type of
consideration, including cash or property, at such time or times (including,
without limitation, each business day), and on such terms as the Trustees may
deem best, and may in such manner acquire other assets (including the
acquisition of assets subject to, and in connection with the assumption of,
liabilities) and businesses.
SECTION III.5 DECREASES AND REDEMPTIONS OF INTERESTS. Subject to
Article VII hereof, the Trustees, in their discretion, may, from time to time,
without a vote of the Holders, permit a Holder to redeem its Interest, or
decrease its Interest, for either cash or property, at such time or times
(including, without limitation, each business day), and on such terms as the
Trustees may deem best.
SECTION III.6 BORROWING MONEY; LENDING TRUST ASSETS. The Trustees shall
have power to borrow money or otherwise obtain credit and to secure the same by
mortgaging, pledging or otherwise subjecting as security the assets of the
Trust, to endorse, guarantee, or undertake the performance of any obligation,
contract or engagement of any other Person and to lend Trust assets.
SECTION III.7 DELEGATION; COMMITTEES. The Trustees shall have power,
consistent with their continuing exclusive authority over the management of the
Trust and the Trust Property, to delegate from time to time to such of their
number or to officers, employees or agents of the Trust the doing of such things
and the execution of such instruments either in the name of the Trust or the
names of the Trustees or otherwise as the Trustees may deem expedient.
SECTION III.8 COLLECTION AND PAYMENT. Subject to Section VI.4 hereof,
the Trustees shall have power to collect all property due to the Trust; to pay
all claims, including taxes, against the Trust
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Property; to prosecute, defend, compromise or abandon any claims relating to the
Trust Property; to foreclose any security interest securing any obligations, by
virtue of which any property is owed to the Trust; and to enter into releases,
agreements and other instruments.
SECTION III.9 EXPENSES. Subject to Section VI.4 hereof the Trustees
shall have the power to incur and pay any expenses which in the opinion of the
Trustees are necessary or incidental to carry out any of the purposes of the
Declaration, and to pay reasonable compensation from the funds of the Trust to
themselves as Trustees. The Trustees shall fix the compensation of all officers,
employees and Trustees.
SECTION III.10 MANNER OF ACTING; BYLAWS. Except as otherwise provided
herein or in the Bylaws or by any provision of law, any action to be taken by
the Trustees may be taken by a majority of the Trustees present at a meeting of
Trustees (a quorum being present), including any meeting held by means of a
conference telephone circuit or similar communications equipment by means of
which all persons participating in the meeting can hear each other, or by
written consents of all the Trustees. The Trustees may adopt Bylaws not
inconsistent with this Declaration to provide for the conduct of the business of
the Trust and may amend or repeal such Bylaws to the extent such power is not
reserved to the Holders.
SECTION III.11 MISCELLANEOUS POWERS. The Trustees shall have the power
to: (a) employ or contract with such Persons as the Trustees may deem desirable
for the transaction of the business of the Trust or any Series thereof; (b)
enter into joint ventures, partnerships and any other combinations or
associations; (c) remove Trustees or fill vacancies in or add to their number,
elect and remove such officers and appoint and terminate such agents or
employees as they consider appropriate, and appoint from their own number, and
terminate, any one or more committees which may exercise some or all of the
power and authority of the Trustees as the Trustees may determine; (d) purchase
and pay for out of Trust Property or the property of the appropriate Series of
the Trust, insurance policies insuring the Holders, Trustees, officers,
employees, agents, investment advisers, placement agents, or independent
contractors of the Trust against all claims arising by reason of holding any
such position or by reason of any action taken or omitted to be taken by any
such Person in such capacity, whether or not constituting negligence, or whether
or not the Trust would have the power to indemnify such Person against such
liability; (e) establish pension, profit-sharing, and other retirement,
incentive and benefit plans for any Trustees, officers, employees and agents of
the Trust; (f) indemnify, to the extent permitted by law, any person with whom
the Trust or any Series thereof has dealings, including any investment adviser,
administrator, placement agent, transfer agent and, to such extent as the
Trustees shall determine; (g) guarantee indebtedness or contractual obligations
of others; (h) determine and change the fiscal year of the Trust or any Series
thereof and the method by which its accounts shall be kept; and (i) adopt a seal
for the Trust but the absence of such seal shall not impair the validity of any
instrument executed on behalf of the Trust.
SECTION III.12 LITIGATION. The Trustees shall have the power to engage
in and to prosecute, defend, compromise, abandon, or adjust, by arbitration, or
otherwise, any actions, suits, proceedings, disputes, claims, and demands
relating to the Trust, and out of the assets of the Trust or any Series thereof
to pay or to satisfy any debts, claims or expenses incurred in connection
therewith, including those of litigation, and such power shall include, without
limitation, the power of the Trustees or any appropriate committee thereof, in
the exercise of their or its good faith business judgment, to dismiss any
action, suit, proceeding, dispute, claim, or demand, derivative or otherwise,
brought by any person, including a
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Holder in its own name or the name of the Trust, whether or not the Trust or any
of the Trustees may be named individually therein or the subject matter arises
by reason of business for or on behalf of the Trust.
ARTICLE IV
INVESTMENT ADVISER, MANAGER, ADMINISTRATOR, CUSTODIAN
AND TRANSFER AGENT
SECTION IV.1 INVESTMENT ADVISER AND MANAGER. Subject to applicable
provisions of the 1940 Act, the Trustees may in their discretion from time to
time enter into one or more investment advisory and management contracts or, if
the Trustees establish multiple Series, separate investment advisory and
management contracts with respect to one or more Series whereby the other party
or parties to any such contracts shall undertake to furnish the Trust or such
Series such management, investment advisory, administration, accounting, legal,
statistical and research facilities and services, promotional or marketing
activities, and such other facilities and services, if any, as the Trustees
shall from time to time consider desirable and all upon such terms and
conditions as the Trustees may in their discretion determine. Notwithstanding
any provisions of the Declaration, the Trustees may authorize the Investment
Advisers, or any of them, under any such contracts (subject to such general or
specific instructions as the Trustees may from time to time adopt) to effect
purchases, sales, loans or exchanges of portfolio securities and other
investments of the Trust on behalf of the Trustees or may authorize any officer,
employee or Trustee to effect such purchases, sales, loans or exchanges pursuant
to recommendations of such Investment Advisers, or any of them (and all without
further action by the Trustees). Any such purchases, sales, loans and exchanges
shall be deemed to have been authorized by all of the Trustees.
SECTION IV.2 ADMINISTRATIVE SERVICES. The Trustees may in their
discretion from time to time enter into an administration contract whereby the
other party shall agree to provide the Trustees or the Trust administrative
personnel and services to operate the Trust on a daily or other basis, on such
terms and conditions as the Trustees may in their discretion determine. Such
services may be provided by one or more persons or entities.
SECTION IV.3 PLACEMENT AGENT. The Trustees may in their discretion from
time to time enter into one or more placement agent agreements on such terms and
conditions as the Trustees may in their discretion determine.
SECTION IV.4 TRANSFER AGENT The Trustees may, in their discretion from
time to time, enter into a transfer agency and service contract whereby the
other party to such contract shall undertake to furnish transfer agency and
other services to the Trust and its Holders. The contract shall have such terms
and conditions as the Trustees may, in their discretion, determine not
inconsistent with the Declaration. Such service may be provided by one or more
persons.
SECTION IV.5 CUSTODIANS. The Trustees may appoint or otherwise engage
one or more banks, broker-dealers or trust companies to serve as custodian with
authority as its agent, but subject to
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applicable requirements of the 1940 Act and to such restrictions, limitations
and other requirements, if any, as may be contained in the By-laws of the Trust.
SECTION IV.6 PARTIES TO CONTRACT. Any contract of the character
described in Sections IV.1, IV.2, IV.3, IV.4 or IV.5 of this Article IV and any
other contract may be entered into with any Person, although one or more of the
Trustees or officers of the Trust may be an officer, director, trustee,
shareholder, or member of such other party to the contract, and no such contract
shall be invalidated or rendered voidable by reason of the existence of any such
relationship; nor shall any Person holding such relationship be liable merely by
reason of such relationship for any loss or expense to the Trust under or by
reason of said contract or accountable for any profit realized directly or
indirectly therefrom, provided that the contract when entered into was not
inconsistent with the provisions of this Article IV. The same Person may be the
other party to any contracts entered into pursuant to Sections IV.1, IV.2, IV.3,
IV.4 or IV.5 above or otherwise, and any individual may be financially
interested or otherwise affiliated with Persons who are parties to any or all of
the contracts mentioned in this Section IV.4.
ARTICLE V
LIABILITY OF HOLDERS; LIMITATIONS OF LIABILITIES OF
TRUSTEES AND OTHERS
SECTION V.1 NO PERSONAL LIABILITY OF INTERESTHOLDERS. No Interestholder
shall be subject to any personal liability whatsoever to any person in
connection with Trust Property or the acts, obligations or affairs of the Trust.
The Trust shall indemnify out of the property of the Trust and hold each
Interestholder harmless from and against all claims and liabilities, to which
such Interestholder may become subject by reason of his being or having been a
Interestholder, and shall reimburse such Interestholder for all legal and other
expenses reasonably incurred by him in connection with any such claim or
liability; provided that, in the event the Trust shall consist of more than one
Series, Interestholders of a particular Series who are faced with claims or
liabilities solely by reason of their status as Interestholders of that Series
shall be limited to the assets of that Series for recovery of such loss and
related expenses. The rights accruing to an Interestholder under this Section
V.1 shall not exclude any other right to which such Interestholder may be
lawfully entitled, nor shall anything herein contained restrict the right of the
Trust to indemnify or reimburse a Interestholder in any appropriate situation
even though not specifically provided herein.
SECTION V.2 NONLIABILITY OF TRUSTEES, ETC. No Trustee, officer,
employee or agent of the Trust shall be liable to the Trust or its Holders for
any action or failure to act (including, without limitation, the failure to
compel in any way any former or acting Trustee to redress any breach of trust)
except for his or her own bad faith, willful misfeasance, gross negligence or
reckless disregard of his or her duties, and all such Persons shall look solely
to the Trust Property, or to the Property of one or more specific Series of the
Trust if the claim arises from the conduct of such Trustee, officer, employee or
agent with respect to only such Series, for satisfaction of claims of any nature
arising in connection with the affairs of the Trust.
SECTION V.3 INDEMNIFICATION.
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(a) The Trustees shall provide for indemnification by the Trust,
or by one or more Series thereof if the claim arises from his
or her conduct with respect to only such Series, of any person
who is, or has been, a Trustee, officer, employee or agent of
the Trust against all liability and against all expenses
reasonably incurred or paid by him in connection with any
claim, action, suit or proceeding in which he or she becomes
involved as a party or otherwise by virtue of his or her being
or having been a Trustee, officer, employee or agent and
against amounts paid or incurred by him or her in the
settlement thereof, in such manner as the Trustees may provide
from time to time in the Bylaws.
(b) The word "claim," "action," "suit," or "proceeding" shall
apply to all claims, actions, suits and proceedings (civil,
criminal, or other, including appeals), actual or threatened;
and the words "liability" and "expenses" shall include,
without limitation, attorneys' fees, costs, judgments, amounts
paid in settlement, fines, penalties and other liabilities.
SECTION V.4 NO BOND REQUIRED OF TRUSTEES. No Trustee shall be obligated
to give any bond or other security for the performance of any of his or her
duties hereunder.
SECTION V.5 NO DUTY OF INVESTIGATION; NOTICE IN TRUST INSTRUMENTS, ETC.
No purchaser, lender, transfer agent or other Person dealing with the Trustees
or any officer, employee or agent of the Trust or a Series thereof shall be
bound to make any inquiry concerning the validity of any transaction purporting
to be made by the Trustees or by said officer, employee or agent or be liable
for the application of money or property paid, loaned or delivered to or on the
order of the Trustees or of said officer, employee or agent. Every obligation,
contract, instrument, certificate, Interest, other security of the Trust or a
Series thereof or undertaking, and every other act or thing whatsoever executed
in connection with the Trust shall be conclusively presumed to have been
executed or done by the executors thereof only in their capacity as officers,
employees or agents of the Trust or a Series thereof. Every written obligation,
contract, instrument, certificate, Interest, other security of the Trust or
undertaking made or issued by the Trustees shall recite that the same is
executed or made by them not individually, but as Trustees under the
Declaration, and that the obligations of the Trust or a Series thereof under any
such instrument are not binding upon any of the Trustees, individually, but bind
only the Trust Estate (or, in the event the Trust shall consist of more than one
Series, in the case of any such obligation which relates to a specific Series,
only the Series which is a party thereto), and may contain any further recital
which they or he/she may deem appropriate, but the omission of such recital
shall not affect the validity of such obligation, contract instrument
certificate, Interest, security or undertaking and shall not operate to bind the
Trustees, officers, employees or agents, individually. The Trustees may maintain
insurance for the protection of the Trust Property, its Holders, Trustees,
officers, employees and agents in such amount as the Trustees shall deem
adequate to cover possible tort liability, and such other insurance as the
Trustees in their sole judgment shall deem advisable.
SECTION V.6 RELIANCE ON EXPERTS, ETC. Each Trustee and officer or
employee of the Trust shall, in the performance of his or her duties, be fully
and completely justified and protected with regard to any act or any failure to
act resulting from reliance in good faith upon the books of account or other
records of the Trust, upon an opinion of counsel, or upon reports made to the
Trust by any of its officers or employees or by any investment adviser,
placement agent, administrator accountants, appraisers or other experts or
consultants selected with reasonable care by the Trustees, officers or employees
of the Trust, regardless of whether such counsel or expert may also be a
Trustee.
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ARTICLE VI
INTERESTS
SECTION VI.1 INTERESTS. The beneficial interest in the Trust Property
shall consist of non-transferable Interests. The Interests shall be personal
property giving only the rights in this Declaration specifically set forth. The
value of an Interest shall be equal to the Book Capital Account balance of the
Holder of the Interest. The Trustees shall have the authority to establish and
designate one or more Series or classes of Interests. Each Interest of any
Series shall represent an equal proportionate share in the assets of that Series
with each other Interest in that Series. The Trustees may divide or combine the
Interests of any Series into a greater or lesser number of Interests in that
Series without thereby changing the proportionate Interests in the assets of
that Series. Subject to the provisions of Section VI.4(g) hereof, the Trustees
may also authorize the creation of additional series of Interests (the proceeds
of which may be invested in separate, independently managed portfolios) and
additional classes of Interests within any series. All Interests issued
hereunder including, without limitation, Interests issued in connection with a
dividend in Interests or a split in Interests, shall be fully paid and
nonassessable.
SECTION VI.2 NON-TRANSFERABILITY. A Holder may not transfer, sell or
exchange its Interest.
SECTION VI.3 REGISTER OF INTERESTS. A register shall be kept at the
Trust under the direction of the Trustees which shall contain the name, address
and Book Capital Account balance of each Holder. Such register shall be
conclusive as to the identity of the Holders. No Holder shall be entitled to
receive payment of any distribution, nor to have notice given to it as herein
provided, until it has given its address to such officer or agent of the Trust
as is keeping such register for entry thereon.
SECTION VI.4 SERIES OR CLASSES OF INTERESTS. The following provisions
are applicable regarding the Series of Interests of the Trust established in
Section VI.1 hereof and shall be applicable if the Trustees shall establish
additional Series or shall divide the Interests of any Series into two or more
classes and all provisions relating to the Trust shall apply equally to each
Series thereof except as the context requires:
(a) The number of Interests that may be issued shall be
unlimited.
(b) All consideration received by the Trust for the issue
or sale of Interests of a particular Series or class
together with all assets in which such consideration
is invested or reinvested, all income, earnings,
profits, and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation of
such assets, and any funds or payments derived from
any reinvestment of such proceeds in whatever form
the same may be, shall irrevocably belong to that
Series or class for all purposes, subject only to the
rights of creditors, and shall be so recorded upon
the books of account of the Trust. In the event that
there are any assets, income, earnings, profits, and
proceeds thereof, funds, or payments which are not
readily identifiable as belonging to any particular
Series or class, the Trustees, or their designees,
shall allocate them among any one or more of
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the Series or classes established and designated from
time to time in such manner and on such basis as
they, in their sole discretion, deem fair and
equitable. Each such allocation shall be conclusive
and binding upon the Holders of all Series or classes
for all purposes. No Holder of any Series shall have
any claim on or right to any assets allocated or
belonging to any other Series.
(c) The assets belonging to each particular Series shall
be charged with the liabilities of the Trust in
respect of that Series and all expenses, costs,
charges and reserves attributable to that Series. All
expenses and liabilities incurred or arising in
connection with a particular Series, or in connection
with the management thereof, shall be payable solely
out of the assets of that Series and creditors of a
particular Series shall be entitled to look solely to
the property of such Series for satisfaction of their
claims. Any general liabilities, expenses, costs,
charges or reserves of the Trust which are not
readily identifiable as belonging to any particular
Series shall be allocated and charged by the
Trustees, or their designees, to and among any one or
more of the Series established and designated from
time to time in such manner and on such basis as the
Trustees, or their designees, in their sole
discretion deem fair and equitable. Each allocation
of liabilities, expenses, costs, charges and reserves
by the Trustees shall be conclusive and binding upon
the Holders of all Series for all purposes. The
Trustees shall have full discretion to determine
which items shall be treated as income and which
items as capital; and each such determination and
allocation shall be conclusive and binding upon the
interestholders.
(d) The power of the Trustees to pay dividends and make
distributions shall be governed by Section VIII.2 of
this Declaration with respect to any one or more
Series or classes which represents the Interests in
the assets of the Trust immediately prior to the
establishment of any additional Series or classes.
With respect to any other Series or class, dividends
and distributions on Interests of a particular Series
or class may be paid with such frequency as the
Trustees may determine, which may be daily or
otherwise, pursuant to a standing resolution or
resolutions adopted only once or with such frequency
as the Trustees may determine, to the Holders of that
Series or class, from such of the income and capital
gains, accrued or realized, from the assets belonging
to that Series or class, as the Trustees may
determine, after providing for actual and accrued
liabilities belonging to that Series or class. All
dividends and distributions on Interests of a
particular Series or class shall be distributed pro
rata to the Holders of that Series or class in
proportion to the Interests of that Series or Class
held by such Holders at the date and time of record
established for the payment of such dividends or
distributions.
(e) The Trustees shall have the power to determine the
designations, preferences, privileges, limitations
and rights, including voting and dividend rights, of
each class and Series.
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(f) The establishment and designation of any Series or
class of Interests in addition to those established
in Section VI.1 hereof shall be effective by
resolution adopted by a majority of the then Trustees
setting forth such establishment and designation and
the relative rights, preferences, voting powers,
restrictions, limitations as to dividends,
qualifications, and terms and conditions of
Redemption of such Series or class, or as otherwise
provided in such instrument. At any time that there
are no Interests outstanding of any particular Series
or class previously established and designated, the
Trustees may, by a resolution adopted by a majority
of their number, abolish that Series or class and the
establishment and designation thereof. Each
resolution referred to in this paragraph shall have
the status of an amendment to this Declaration.
(g) Each Interest shall represent an interest in the net
assets of such Series. Each Holder of Interests of
Series shall be entitled to receive his pro rata
share of distributions of income and capital gains
made with respect to such Series. In the event of the
liquidation of a particular Series, the Holders of
that Series which has been established and designated
and which is being liquidated shall be entitled to
receive, when and as declared by the Trustees, the
excess of the assets belonging to that Series over
the liabilities belonging to that Series. The Holders
of any Series shall not be entitled hereby to any
distribution upon liquidation of any other Series.
The assets so distributable to the Holders of any
Series shall be distributed among such Holders in
proportion to the Interests of that Series held by
them and recorded on the books of the Trust. The
liquidation of any particular Series in which there
are Interests then outstanding may be authorized by
an instrument in writing, without a meeting, signed
by a majority of the Trustees then in office, subject
to the approval by a Majority Interests Vote as that
term is defined in Section I.2(k)(iii).
ARTICLE VII
INCREASES, DECREASES AND REDEMPTIONS OF INTERESTS
SECTION VII.1 Subject to applicable law, to the provisions of this
Declaration and to such restrictions as may from time to time be adopted by the
Trustees, each Holder shall have the right to vary its investment in the Trust
at any time without limitation by increasing (through a capital contribution) or
decreasing (through a capital withdrawal) or by a Redemption of its Interest. An
increase in the investment of a Holder in the Trust of any Series thereof shall
be reflected as an increase in the Book Capital Account balance of that Holder
and a decrease in the investment of a Holder in the Trust or the Redemption of
the Interest of a Holder shall be reflected as a decrease in the Book Capital
Account balance of that Holder. The Trust or any Series thereof shall, upon
appropriate and adequate notice from any Holder increase, decrease or redeem
such Holder's Interest for an amount determined by the application of a formula
adopted for such purpose by resolution of the Trustees; provided that (a) the
amount received by the Holder upon any such decrease or Redemption shall not
exceed the decrease in the Holder's Book Capital Account balance effected by
such decrease or Redemption of its Interest, and (b) if so authorized by the
Trustees, the Trust may, at any time and from time to time, charge fees for
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effecting any such decrease or Redemption, at such rates as the Trustees may
establish, and may, at any time and from time to time, suspend such right of
decrease or Redemption. The procedures for effecting decreases or Redemptions
shall be as determined by the Trustees from time to time.
SECTION VII.2 DECREASE OR REDEMPTION AT THE OPTION OF THE TRUST. Each
Interest shall be subject to repurchase by the Trust at the option of the Trust
at the redemption price determined in accordance with Section VII.1: (i) at any
time if the Trustees determine, in their sole discretion, that failure to so
redeem may have materially adverse consequences to the Holders, or (ii) upon
such other conditions with respect to maintenance of Holder accounts of a
minimum amount as may from time to time be determined by the Trustees. Upon such
decrease or Redemption the Holder so decreased or redeemed shall have no further
right with respect thereto other than to receive payment of such redemption
price.
SECTION VII.3 SUSPENSION OF RIGHT OF DECREASE OR REDEMPTION. The
Trustees may declare a suspension of the right of decrease or redeem interests
or postpone the date of payment of the proceeds of a decrease or Redemption as
and to the extent consistent with applicable law. Such suspension shall take
effect at such time as the Trust shall specify but not later than the close of
business on the business day next following the declaration of suspension, and
thereafter there shall be no right of decrease, Redemption or payment on
decrease or Redemption until the Trust shall declare the suspension at an end.
In the case of a suspension of the right of decrease or Redemption, a Holder may
either withdraw his request to decrease or redeem Interests or receive payment
based on the net asset value existing after the termination of the suspension.
ARTICLE VIII
DETERMINATION OF BOOK CAPITAL
ACCOUNT BALANCES, ALLOCATIONS AND DISTRIBUTIONS
AND NET ASSET VALUE
SECTION VIII.1 BOOK CAPITAL ACCOUNT BALANCES. The Book Capital Account
balance of each Holder shall be determined on such days and at such time or
times as the Trustees may determine. The Trustees shall adopt resolutions
setting forth the method of determining the Book Capital Account balance of each
Holder. The power and duty to make calculations pursuant to such resolutions may
be delegated by the Trustees to the Investment Adviser, Manager, administrator,
custodian, or such other Person as the Trustees may determine. Upon the
Redemption of an Interest, the Holder of that Interest shall be entitled to
receive the balance of its Book Capital Account. A Holder may not transfer, sell
or exchange its Book Capital Account balance.
SECTION VIII.2 ALLOCATIONS AND DISTRIBUTIONS TO HOLDERS. The Trustees
shall establish the procedures by which the Trust of any Series thereof shall
make (i) the allocation of unrealized gains and losses, taxable income and tax
loss, and profit and loss, or any item or items thereof, to each Holder, (ii)
the payment of distributions, if any, to Holders, and (iii) upon liquidation,
the final distribution of items of taxable income and expense. The Trustees may
amend the procedures adopted pursuant to this Section VIII.2 from time to time.
The Trustees may retain from the net profits such amount as they may deem
necessary to pay the liabilities and expenses of the Trust, including any series
thereof, to meet obligations of the Trust, including any series thereof, and as
they may deem desirable to use in the conduct of the
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affairs of the Trust, including any series thereof, or to retain for future
requirements or extensions of the business.
SECTION VIII.3 NET ASSET VALUE. The term "Net Asset Value" shall mean,
with respect to any Series, that amount by which the assets of the Series exceed
its liabilities, all as determined by or under the direction of the Trustees. In
making this determination, the Trustees, without Holder approval, may alter the
method of valuing portfolio securities. The Trustees may delegate any of their
powers and duties under this Section VIII.3 with respect to valuation of assets
and liabilities.
SECTION VIII. 4 POWER TO MODIFY FOREGOING PROCEDURES. Notwithstanding
any of the foregoing provisions of this Article VIII, the Trustees may
prescribe, in their absolute discretion, such other bases and times for
determining the net income of the Trust, including any series thereof, the
allocation of income of the Trust, the Book Capital Account balance of each
Holder, or the payment of distributions to the Holders as they may deem
necessary or desirable.
ARTICLE IX
DURATION; TERMINATION OF TRUST;
AMENDMENT; MERGERS, ETC.
SECTION IX.1 DURATION. The Trust shall continue without limitation of
time but subject to the provisions of this Article IX.
SECTION IX.2 TERMINATION OF TRUST OR A SERIES. The Trust or any Series
may be terminated either by (i) resolution of the Board of Trustees with notice
in writing to the Holders, (ii) the affirmative vote of the Holders of not less
than two-thirds of the Interests at any meeting of Holders or the appropriate
Series thereof, or (iii) a Majority Interests Vote if such termination is
recommended by the Trustees. The foregoing provisions may not be amended except
by the approval by the Holders of not less than two-thirds of the Interests.
Upon termination of the Trust or Series:
(a) The Trust or the Series shall carry on no business
except for the purpose of winding up its affairs.
(b) The Trustees shall proceed to wind up the affairs of
the Trust or the Series and all of the powers of the
Trustees under this Declaration shall continue until
the affairs of the Trust shall have been wound up,
including the power to fulfill or discharge the
contracts of the Trust or the Series, collect its
assets, sell, convey, assign, exchange, transfer or
otherwise dispose of all or any part of the remaining
Trust Property or Trust Property allocated or
belonging to such Series to one or more persons at
public or private sale for consideration which may
consist in whole or in part of cash, securities or
other property of any kind, discharge or pay its
liabilities, and to do all other acts appropriate to
liquidate its business.
(c) After paying or adequately providing for the payment
of all liabilities, and upon receipt of such
releases, indemnities and refunding agreements, as
they deem
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necessary for their protection, the Trustees may
distribute the remaining Trust Property or Trust
Property allocated or belonging to such Series, in
cash or in kind or partly each, among the Holders of
Interests of the Trust according to their respective
rights.
SECTION IX.3 AMENDMENT PROCEDURE. (a) This Declaration may be amended
by a Majority Interests Vote or such greater vote as may be prescribed in this
Declaration at a meeting of Holders, or by written consent without a meeting.
The provisions of the preceding sentence may not be amended except by vote of
the Holders of not less than two-thirds of the Interests. The Trustees may also
amend this Declaration without the vote or consent of the Holders (i) to change
the name of the Trust or any Series or classes of Shares, (ii) to supply any
omission, or cure, correct or supplement any ambiguous, defective or
inconsistent provision hereof, (iii) if they deem it necessary to conform this
declaration to the requirements of applicable federal or state laws or
regulations or the requirements of the Internal Revenue Code, or to eliminate or
reduce any federal, state or local taxes which are or may be payable by the
Trust or the Holders, but the Trustees shall not be liable for failing to do so,
or (iv) for any other purpose which does not adversely affect the rights of any
Holder with respect to which the amendment is or purports to be applicable.
(a) No amendment may be made under this Section IX.4
which would change any rights with respect to any
Interests in the Trust or of any Series of the Trust
by reducing the amount payable thereon upon
liquidation of the Trust or of such Series of the
Trust or by diminishing or eliminating any voting
rights pertaining thereto, except with the vote or
consent of the Holders of not less than two-thirds of
any Interests in the Trust or of such Series or by
such other vote as may be established by the Trustees
with respect to any Series or class. Nothing
contained in this Declaration shall permit the
amendment of this Declaration to impair the exemption
from personal liability of the Trustees, officers,
employees and agents of the Trust.
(b) Notwithstanding any other provision hereof until such
time as Interests are first sold, this Declaration
may be terminated or amended in any respect by the
affirmative vote of a majority of the Trustees at any
meeting of Trustees or by an instrument executed by a
majority of the Trustees.
SECTION IX.4 MERGER, CONSOLIDATION AND SALE OF ASSETS. The Trust may
merge or consolidate with any other corporation, association, trust or other
organization or may sell, lease or exchange all or substantially all of the
Trust Property, including goodwill, upon such terms and conditions and for such
consideration when and as authorized by the Trustee.
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SECTION IX.5 INCORPORATION. Upon a Majority Interests Vote, the
Trustees may cause to be organized or assist in organizing a corporation or
corporations under the law of any jurisdiction or a trust, partnership,
association or other organization to take over the Trust Property or to carry on
any business in which the Trust directly or indirectly has any interest, and to
sell, convey and transfer the Trust Property to any such corporation, trust,
partnership, association or other organization in exchange for the equity
interests thereof or otherwise, and to lend money to, subscribe for the equity
interests of, and enter into any contract with any such corporation, trust,
partnership, association or other organization, or any corporation, trust,
partnership, association or other organization in which the Trust holds or is
about to acquire equity interests. The Trustees may also cause a merger or
consolidation between the Trust or any successor thereto and any such
corporation, trust, partnership, association or other organization if and to the
extent permitted by law. Nothing contained herein shall be construed as
requiring approval of the Holders for the Trustees to organize or assist in
organizing one or more corporations, trusts, partnerships, associations or other
organizations and selling, conveying or transferring a portion of the Trust
Property to one or more of such organizations or entities.
ARTICLE X
REPORTS TO SHAREHOLDERS
The Trustees shall at least semiannually submit or cause the officers
of the Trust to submit to the Holders a written financial report of each Series
of the Trust, including financial statements which shall at least annually be
certified by independent public accountants.
ARTICLE XI
MISCELLANEOUS
SECTION XI.1 FILING. This Declaration and any amendment hereto shall be
filed in the office of the Department of State of The Commonwealth of
Massachusetts and in such other places as may be required under the laws of The
Commonwealth of Massachusetts. A restated Declaration, integrating into a single
instrument all of the provisions of the Declaration which are then in effect and
operative, may be executed from time to time by a majority of the Trustees and
shall, upon filing with the Secretary of The Commonwealth of Massachusetts, be
conclusive evidence of all amendments contained therein and may thereafter be
referred to in lieu of the original Declaration and the various amendments
thereto.
GOVERNING LAW. This Declaration is executed by the Trustees and
delivered in The Commonwealth of Massachusetts and with reference to the laws
thereof and the rights of all parties and the validity and construction of every
provision hereof shall be subject to and construed according to the laws of said
State.
SECTION XI.2 COUNTERPARTS. The Declaration may be simultaneously
executed in several counterparts, each of which shall be deemed to be an
original, and such counterparts, together, shall
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constitute one and the same instrument, which shall be sufficiently evidenced by
any such original counterpart.
SECTION XI.3 RELIANCE BY THIRD PARTIES. Any certificate executed by an
individual who, according to the records of the Trust, appears to be a Trustee
hereunder, or Secretary or Assistant Secretary of the Trust, certifying to: (a)
the number or identity of Trustees or Holders, (b) the due authorization of the
execution of any instrument or writing, (c) the form of any vote passed at a
meeting of Trustees or Holders, (d) the fact that the number of Trustees or
Holders present at any meeting or executing any written instrument satisfies the
requirements of this Declaration, (e) the form of any Bylaws adopted by or the
identity of any officers elected by the Trustees, or (f) the existence of any
fact or facts which in any manner relate to the affairs of the Trust, shall be
conclusive evidence as to the matters so certified in favor of any Person
dealing with the Trustees and their successors.
SECTION XI.4 PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS. (a) The
provisions of the Declaration are severable, and if the Trustees shall
determine, with the advice of counsel, that any of such provisions is in
conflict with the 1940 Act, the regulated investment company provisions of the
Internal Revenue Code or with other applicable laws and regulations, the
conflicting provisions shall be deemed superseded by such law or regulation to
the extent necessary to eliminate such conflict; provided, however, that such
determination shall not affect any of the remaining provisions of the
Declaration or render invalid or improper any action taken or omitted prior to
such determination.
(b) If any provision of the Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
pertain only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of the
Declaration in any jurisdiction.
SECTION XI.5 PRINCIPAL PLACE OF BUSINESS; RESIDENT AGENT. The principal
place of business of the Trust shall be 225 Franklin Street, Boston,
Massachusetts 02110, or such other location as the Trustees may designate from
time to time. To the extent required, the Trustees shall have the power to
appoint a resident agent for service of process on the Trust and from time to
time to replace the resident agent so appointed. State Street Bank and Trust
Company, 225 Franklin Street, Boston, Massachusetts 02110, is hereby designated
as the initial resident agent for the Trust in Massachusetts. The Trustees may,
without the approval of the Holders, change the resident agent of the Trust or
the principal place of business of the Trust.
IN WITNESS WHEREOF, the undersigned has executed this Declaration of
Trust this 27th day of July, 1999.
----------------------------------------
Rina K. Spence, Trustee
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COMMONWEALTH OF MASSACHUSETTS )
) : ss.:
COUNTY OF )
On this 27th day of July, 1999, Rina K. Spence known to me and known to
be the individual described in and who executed the foregoing instrument,
personally appeared before me and acknowledged the foregoing instrument to be
her free act and deed.
Notary Public
My commission expires:_______________________
<PAGE>
BY-LAWS
FOR THE REGULATION, EXCEPT AS
OTHERWISE PROVIDED BY STATUTE OR THE
DECLARATION OF TRUST, OF
STATE STREET MASTER TRUST
A MASSACHUSETTS BUSINESS TRUST
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I
OFFICES ...........................................................................................1
Section 1. PRINCIPAL EXECUTIVE OFFICE.......................................................1
Section 2. MASSACHUSETTS OFFICE.............................................................1
Section 3. OTHER OFFICES....................................................................1
ARTICLE II
MEETINGS OF INTERESTHOLDERS........................................................................1
Section 1. PLACE OF MEETING.................................................................1
Section 2. CALL OF MEETING..................................................................1
Section 3. NOTICE OF INTERESTHOLDERS' MEETING...............................................1
Section 4. MANNER OF GIVING NOTICE: AFFIDAVIT OF NOTICE.....................................1
Section 5. ADJOURNED MEETING; NOTICE........................................................2
Section 6. VOTING...........................................................................2
Section 7. WAIVER OF NOTICE BY CONSENT OF ABSENT
INTERESTHOLDERS..................................................................2
Section 8. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A
MEETING..........................................................................3
Section 9. RECORD DATE FOR SHAREHOLDER NOTICE, VOTING
AND GIVING CONSENTS..............................................................3
Section 10. PROXIES..........................................................................3
Section 11. INSPECTORS OF ELECTION...........................................................4
ARTICLE III
TRUSTEES ..........................................................................................4
Section 1. POWERS...........................................................................4
Section 2. NUMBER OF TRUSTEES...............................................................5
Section 3. VACANCIES........................................................................5
Section 4. PLACE OF MEETINGS AND MEETINGS BY TELEPHONE......................................5
Section 5. REGULAR MEETINGS.................................................................5
Section 6. SPECIAL MEETINGS.................................................................5
Section 7. QUORUM...........................................................................5
Section 8. WAIVER OF NOTICE.................................................................6
Section 9. ADJOURNMENT......................................................................6
Section 10. NOTICE OF ADJOURNMENT............................................................6
Section 11. ACTION WITHOUT A MEETING.........................................................6
Section 12. FEES AND COMPENSATION OF TRUSTEES................................................6
Section 13. DELEGATION OF POWER TO OTHER TRUSTEES............................................6
ARTICLE IV
COMMITTEES OF TRUSTEES.............................................................................7
Section 1. COMMITTEES OF TRUSTEES...........................................................7
Section 2. MEETINGS AND ACTION OF COMMITTEES................................................7
ARTICLE V
OFFICERS ..........................................................................................7
Section 1. OFFICERS.........................................................................7
<PAGE>
Section 2. ELECTION OF OFFICERS.............................................................8
Section 3. SUBORDINATE OFFICERS.............................................................8
Section 4. REMOVAL AND RESIGNATION OF OFFICERS..............................................8
Section 5. VACANCIES IN OFFICES.............................................................8
Section 6. CHAIRMAN OF THE BOARD............................................................8
Section 7. PRESIDENT........................................................................8
Section 8. VICE PRESIDENTS..................................................................8
Section 9. SECRETARY........................................................................9
Section 10. TREASURER........................................................................9
ARTICLE VI
INDEMNIFICATION OF TRUSTEES, OFFICERS, EMPLOYEES AND
OTHER AGENTS ......................................................................................9
Section 1. AGENTS, PROCEEDINGS AND EXPENSES.................................................9
Section 2. ACTIONS OTHER THAN BY TRUST.....................................................10
Section 3. ACTIONS BY THE TRUST............................................................10
Section 4. EXCLUSION OF INDEMNIFICATION....................................................10
Section 5. SUCCESSFUL DEFENSE BY AGENT.....................................................11
Section 6. REQUIRED APPROVAL...............................................................11
Section 7. ADVANCE OF EXPENSES.............................................................11
Section 8. OTHER CONTRACTUAL RIGHTS........................................................11
Section 9. LIMITATIONS.....................................................................11
Section 10. INSURANCE.......................................................................12
Section 11. FIDUCIARIES OF EMPLOYEE BENEFIT PLAN............................................12
ARTICLE VII
RECORDS AND REPORTS...............................................................................12
Section 1. MAINTENANCE AND INSPECTION OF SHARE REGISTER....................................12
Section 2. MAINTENANCE AND INSPECTION OF BY-LAWS...........................................12
Section 3. MAINTENANCE AND INSPECTION OF OTHER RECORDS.....................................12
Section 4. INSPECTION BY TRUSTEES..........................................................12
Section 5. FINANCIAL STATEMENTS............................................................13
ARTICLE VIII
GENERAL MATTERS ..................................................................................13
Section 1. CHECKS, DRAFTS, EVIDENCE OF INDEBTEDNESS........................................13
Section 2. CONTRACTS AND INSTRUMENTS - HOW EXECUTED........................................13
Section 3. CERTIFICATES FOR INTERESTS......................................................13
Section 4. LOST CERTIFICATES...............................................................13
Section 5. REPRESENTATION OF INTERESTS OF OTHER
ENTITIES HELD BY TRUST..........................................................14
Section 6. FISCAL YEAR.....................................................................14
ARTICLE IX
AMENDMENTS .......................................................................................14
Section 1. AMENDMENT BY INTERESTHOLDERS....................................................14
Section 2. AMENDMENT BY TRUSTEES...........................................................14
Section 3. INCORPORATION BY REFERENCE INTO AGREEMENT AND
DECLARATION OF TRUST OF THE TRUST...............................................14
<PAGE>
ARTICLE X
DIVIDENDS AND DISTRIBUTIONS.......................................................................14
Section 1. DECLARATION OF DIVIDENDS AND DISTRIBUTIONS......................................14
Section 2. DISTRIBUTION OF INCOME DIVIDENDS................................................14
ARTICLE XI
CUSTODIAN ........................................................................................14
Section 1. APPOINTMENT AND DUTIES..........................................................14
Section 2. CENTRAL CERTIFICATE SYSTEM......................................................15
</TABLE>
<PAGE>
BY-LAWS
OF
THE STATE STREET INDEX TRUST
MASSACHUSETTS BUSINESS TRUST
ARTICLE I
OFFICES
Section 1. PRINCIPAL EXECUTIVE OFFICE. The Board of Trustees shall fix
and, from time to time, may change the location of the principal executive
office of State Street Master Trust (the "Trust") at any place within or outside
the Commonwealth of Massachusetts.
Section 2. MASSACHUSETTS OFFICE. The Board of Trustees shall establish
a registered office in the Commonwealth of Massachusetts and shall appoint as
the Trust's registered agent for service of process in the Commonwealth of
Massachusetts an individual resident of the Commonwealth of Massachusetts or a
Massachusetts corporation or a corporation authorized to transact business in
the Commonwealth of Massachusetts; in each case the business office of such
registered agent for service of process shall be identical with the registered
Massachusetts office of the Trust.
Section 3. OTHER OFFICES. The Board of Trustees may at any time
establish branch or subordinate offices at any place or places where the Trust
intends to do business.
ARTICLE II
MEETINGS OF INTERESTHOLDERS
Section 1. PLACE OF MEETING. Meetings of interestholders shall be held
at any place designated by the Board of Trustees. In the absence of any such
designation, shareholder meetings shall be held at the principal executive
office of the Trust.
Section 2. CALL OF MEETING. A meeting of the interestholders may be
called at any time by the Board of Trustees or by the Chairman of the Board or
by the President.
Section 3. NOTICE OF INTERESTHOLDERS' MEETING. All notices of meetings
of interestholders shall be sent or otherwise given in accordance with Section 4
of this Article II not less than seven (7) nor more than seventy-five (75) days
before the date of the meeting. The notice shall specify (i) the place, date and
hour of the meeting, and (ii) the general nature of the business to be
transacted. The notice of any meeting at which Trustees are to be elected also
shall include the name of any nominee or nominees who at the time of the notice
are intended to be presented for election.
If action is proposed to be taken at any meeting for approval of (i) a
contract or transaction in which a Trustee has a direct or indirect financial
interest, (ii) an amendment of the Declaration of Trust of the Trust, (iii) a
reorganization of the Trust, or (iv) a voluntary dissolution of the Trust, the
notice shall also state the general nature of that proposal.
Section 4. MANNER OF GIVING NOTICE: AFFIDAVIT OF NOTICE. Notice of any
meeting of interestholders shall be given either personally or by first-class
mail or telegraphic or other written communication, charges prepaid, addressed
to the shareholder at the address of that shareholder appearing on the books of
the Trust or its transfer agent or given by the shareholder to the Trust for the
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purpose of notice. If no such address appears on the Trust's books or is given,
notice shall be deemed to have been given if sent to that shareholder by
first-class mail or telegraphic or other written communication to the Trust's
principal executive office, or if published at least once in a newspaper of
general circulation in the county where that office is located. Notice shall be
deemed to have been given at the time when delivered personally or deposited in
the mail or sent by telegram or other means of written communication.
If any notice addressed to a shareholder at the address of that
shareholder appearing on the books of the Trust is returned to the Trust by the
United States Postal Service marked to indicate that the Postal Service is
unable to deliver the notice to the shareholder at that address, all future
notices or reports shall be deemed to have been duly given without further
mailing if these shall be available to the shareholder on written demand of the
shareholder at the principal executive office of the Trust for a period of one
year from the date of the giving of the notice.
An affidavit of the mailing or other means of giving any notice of any
shareholder's meeting shall be executed by the Secretary, Assistant Secretary or
any transfer agent of the Trust giving the notice and shall be filed and
maintained in the minute book of the Trust.
Section 5. ADJOURNED MEETING; NOTICE. Any shareholder's meeting,
whether or not a quorum is present, may be adjourned from time to time by the
vote of the majority of the interests represented at that meeting, either in
person or by proxy.
When any meeting of interestholders is adjourned to another time or
place, notice need not be given of the adjourned meeting at which the
adjournment is taken, unless a new record date of the adjourned meeting is fixed
or unless the adjournment is for more than sixty (60) days from the date set for
the original meeting, in which case the Board of Trustees shall set a new record
date. Notice of any such adjourned meeting shall be given to each shareholder of
record entitled to vote at the adjourned meeting in accordance with the
provisions of Sections 3 and 4 of this Article II. At any adjourned meeting, the
Trust may transact any business which might have been transacted at the original
meeting.
Section 6. VOTING. The interestholders entitled to vote at any meeting
of interestholders shall be determined in accordance with the provisions of the
Declaration of Trust of the Trust, as in effect at such time. The
interestholders' vote may be by voice vote or by ballot, provided, however, that
any election for Trustees must be by ballot if demanded by any shareholder
before the voting has begun. On any matter other than elections of Trustees, any
shareholder may vote part of the interests in favor of the proposal and either
refrain from voting the remaining interests or vote them against the proposal,
but if the shareholder fails to specify the number of interests which the
shareholder is voting affirmatively, it will be conclusively presumed that the
shareholder's approving vote is with respect to the total interests that the
shareholder is entitled to vote on such proposal.
Section 7. WAIVER OF NOTICE BY CONSENT OF ABSENT INTERESTHOLDERS. The
transactions of the meeting of interestholders, however called and noticed and
wherever held, shall be as valid as though had at a meeting duly held after
regular call and notice if a quorum be present either in person or by proxy and
if either before or after the meeting, each person entitled to vote who was not
present in person or by proxy signs a written waiver of notice or a consent to a
holding of the meeting or an approval of the minutes. The waiver of notice or
consent need not specify either the business to be transacted or the purpose of
any meeting of interestholders.
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Attendance by a person at a meeting shall also constitute a waiver of
notice of that meeting, except when the person objects at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened and except that attendance at a meeting is not a waiver of
any right to object to the consideration of matters not included in the notice
of the meeting if that objection is expressly made at the beginning of the
meeting.
Section 8. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING. Any
action which may be taken at any meeting of interestholders may be taken without
a meeting and without prior notice if a consent in writing setting forth the
action so taken is signed by the holders of outstanding interests having not
less than the minimum number of votes that would be necessary to authorize or
take that action at a meeting at which all interests entitled to vote on that
action were present and voted. All such consents shall be filed with the
Secretary of the Trust and shall be maintained in the Trust's records. Any
shareholder giving a written consent or the shareholder's proxy holders or a
transferee of the interests or a personal representative of the Shareholder or
their respective Proxy holders may revoke the consent by a writing received by
the Secretary of the Trust before written consents of the number of interests
required to authorize the proposed action have been filed with the Secretary.
If the consents of all interestholders entitled to vote have not been
solicited in writing and if the unanimous written consent of all such
interestholders shall not have been received, the Secretary shall give prompt
notice of the action approved by the interestholders without a meeting. This
notice shall be given in the manner specified in Section 4 of this Article II.
In the case of approval of (i) contracts or transactions in which a Trustee has
a direct or indirect financial interest, (ii) indemnification of agents of the
Trust, or (iii) a reorganization of the Trust, the notice shall be given at
least ten (10) days before the consummation of any action authorized by that
approval.
Section 9. RECORD DATE FOR SHAREHOLDER NOTICE, VOTING AND GIVING
CONSENTS. For purposes of determining the interestholders entitled to notice of
any meeting or to vote or entitled to give consent to action without a meeting,
the Board of Trustees may fix in advance a record date which shall not be more
than ninety (90) days nor less than seven (7) days before the date of any such
meeting as provided in the Declaration of Trust of the Trust.
If the Board of Trustees does not so fix a record date:
(a) The record date for determining interestholders entitled to
notice of or to vote at a meeting of interestholders shall be
at the close of business on the business day next preceding
the day on which notice is given or if notice is waived, at
the close of business on the business day next preceding the
day on which the meeting is held.
(b) The record date for determining interestholders entitled to
give consent to action in writing without a meeting, (i) when
no prior action by the Board of Trustees has been taken, shall
be the day on which the first written consent is given, or
(ii) when prior action of the Board of Trustees has been
taken, shall be at the close of business on the day on which
the Board of Trustees adopt the resolution relating to that
action or the seventy-fifth day before the date of such other
action, whichever is later.
Section 10. PROXIES. Every person entitled to vote for Trustees or on
any other matter shall have the right to do so either in person or by one or
more agents authorized by a written proxy signed by the person and filed with
the Secretary of the Trust. A proxy shall be deemed signed if the
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shareholder's name is placed on the proxy (whether by manual signature,
typewriting, telegraphic transmission or otherwise) by the shareholder or the
shareholder's attorney-in-fact. A validly executed proxy which does not state
that it is irrevocable shall continue in full force and effect unless (i)
revoked by the person executing it before the vote pursuant to that proxy by a
writing delivered to the Trust stating that the proxy is revoked or by a
subsequent proxy executed by, or attendance at the meeting and voting in person
by, the person executing that proxy; or (ii) written notice of the death or
incapacity of the maker of that proxy is received by the Trust before the vote
pursuant to that proxy is counted; provided however, that no proxy shall be
valid after the expiration of eleven (11) months from the date of the proxy
unless otherwise provided in the proxy.
Section 11. INSPECTORS OF ELECTION. Before any meeting of
interestholders, the Board of Trustees may appoint any persons other than
nominees for office to act as inspectors of election at the meeting or its
adjournment. If no inspectors of election are so appointed, the chairman of the
meeting may, and on the request of any shareholder or a shareholder's proxy
shall, appoint inspectors of election at the meeting. The number of inspectors
shall be either one (1) or three (3). If inspectors are appointed at a meeting
on the request of one or more interestholders or proxies, the holders of a
majority of interests or their proxies present at the meeting shall determine
whether one (1) or three (3) inspectors are to be appointed. If any person
appointed as inspector fails to appear or fails or refuses to act, the Chairman
of the meeting may, and on the request of any shareholder or a shareholder's
proxy shall, appoint a person to fill the vacancy.
These inspectors shall:
(a) Determine the number of interests outstanding and the voting
power of each, the interests represented at the meeting, the
existence of a quorum and the authenticity, validity and
effect of proxies;
(b) Receive votes, ballots or consents;
(c) Hear and determine all challenges and questions in any way
arising in connection with the right to vote;
(d) Count and tabulate all votes or consents;
(e) Determine when the polls shall close;
(f) Determine the result; and
(g) Do any other acts that may be proper to conduct the election
or vote with fairness to all interestholders.
ARTICLE III
TRUSTEES
Section 1. POWERS. Subject to the applicable provisions of the Trust's
Declaration of Trust and these By-Laws relating to action(s) required to be
approved by the interestholders or by the outstanding interests, the business
and affairs of the Trust shall be managed and all powers shall be exercised by
or under the direction of the Board of Trustees.
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Section 2. NUMBER OF TRUSTEES. The exact number of Trustees within the
limits specified in the Declaration of Trust of the Trust shall be fixed from
time to time by a written instrument signed or a resolution approved at a duly
constituted meeting by a majority of the Board of Trustees.
Section 3. VACANCIES. Vacancies in the Board of Trustees may be filled
by a majority of the remaining Trustees, though less than a quorum, or by a sole
remaining Trustee, unless the Board of Trustees calls a meeting of
interestholders for the purposes of electing Trustees. In the event that at any
time less than a majority of the Trustees holding office at that time were so
elected by the interestholders of the outstanding voting securities of the
Trust, the Board of Trustees shall forthwith cause to be held as promptly as
possible, and in any event within sixty (60) days, a meeting of such holders for
the purpose of electing Trustees to fill any existing vacancies in the Board of
Trustees, unless such period is extended by order of the United States
Securities and Exchange Commission. Notwithstanding the above, whenever and for
so long as the Trust is a participant in or otherwise has in effect a Plan under
which the Trust may be deemed to bear expenses of distributing its interests as
that practice is described in Rule 12b-1 under the Investment Company Act of
1940, then the selection and nomination of the Trustees who are not interested
persons of the Trust (as that term is defined in the Investment Company Act of
1940) shall be, and is, committed to the discretion of such disinterested
Trustees.
Section 4. PLACE OF MEETINGS AND MEETINGS BY TELEPHONE. All meetings of
the Board of Trustees may be held at any place that has been designated from
time to time by resolution of the Board. In the absence of such a designation,
regular meetings shall be held at the principal executive office of the Trust.
With the exception of a meeting at which an Investment Management Agreement,
Portfolio Advisory Agreement or any Distribution Plan adopted pursuant to Rule
12b-1 is approved by the Board, any meeting, regular or special, may be held by
conference telephone or similar communication equipment, so long as all Trustees
participating in the meeting can hear one another and all such Trustees shall be
deemed to be present in person at the meeting.
Section 5. REGULAR MEETINGS. Regular meetings of the Board of Trustees
shall be held without call at such time as shall from time to time be fixed by
the Board of Trustees. Such regular meetings may be held without notice.
Section 6. SPECIAL MEETINGS. Special meetings of the Board of Trustees
for any purpose or purposes may be called at any time by the Chairman of the
Board or the President or any Vice President or the Secretary or any two (2)
Trustees.
Notice of the time and place of special meetings shall be delivered
personally or by telephone to each Trustee or sent by first-class mail or
telegram, charges prepaid, addressed to each Trustee at that Trustee's address
as it is shown on the records of the Trust. In case the notice is mailed, it
shall be deposited in the United States mail at least seven (7) calendar days
before the time of the holding of the meeting. In case the notice is delivered
personally or by telephone or to the telegraph company or by express mail or
similar service, it shall be given at least forty-eight (48) hours before the
time of the holding of the meeting. Any oral notice given personally or by
telephone may be communicated either to the Trustee or to a person at the office
of the Trustee who the person giving the notice has reason to believe will
promptly communicate it to the Trustee. The notice need not specify the purpose
of the meeting or the place if the meeting is to be held at the principal
executive office of the Trust.
Section 7. QUORUM. A majority of the authorized number of Trustees
shall constitute a quorum for the transaction of business, except to adjourn as
provided in Section 10 of this Article III. Every act or decision done or made
by a majority of the Trustees present at a meeting duly held at which
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a quorum is present shall be regarded as the act of the Board of Trustees,
subject to the provisions of the Declaration of Trust of the Trust. A meeting at
which a quorum is initially present may continue to transact business
notwithstanding the withdrawal of Trustees if any action taken is approved by at
least a majority of the required quorum for that meeting.
Section 8. WAIVER OF NOTICE. Notice of any meeting need not be
given to any Trustee who either before or after the meeting signs a written
waiver of notice, a consent to holding the meeting, or an approval of the
minutes. The waiver of notice or consent need not specify the purpose of the
meeting. All such waivers, consents, and approvals shall be filed with the
records of the Trust or made a part of the minutes of the meeting. Notice of
a meeting shall also be deemed given to any Trustee who attends the meeting
without protesting before or at its commencement the lack of notice to that
Trustee.
Section 9. ADJOURNMENT. A majority of the Trustees present, whether or
not constituting a quorum, may adjourn any meeting to another time and place.
Section 10. NOTICE OF ADJOURNMENT. Notice of the time and place of
holding an adjourned meeting need not be given unless the meeting is adjourned
for more than forty-eight (48) hours, in which case notice of the time and place
shall be given before the time of the adjourned meeting in the manner specified
in Section 7 of this Article III to the Trustees who were present at the time of
the adjournment.
Section 11. ACTION WITHOUT A MEETING. With the exception of the
approval of an Investment Management Agreement, Portfolio Advisory Agreement, or
any Distribution Plan adopted pursuant to Rule 12b-1, any action required or
permitted to be taken by the Board of Trustees may be taken without a meeting if
a majority of the members of the Board of Trustees shall individually or
collectively consent in writing to that action. Such action by written consent
shall have the same force and effect as a majority vote of the Board of
Trustees. Such written consent or consents shall be filed with the minutes of
the proceedings of the Board of Trustees.
Section 12. FEES AND COMPENSATION OF TRUSTEES. Trustees and members of
committees may receive such compensation, if any, for their services and such
reimbursement of expenses as may be fixed or determined by resolution of the
Board of Trustees. This Section 12 shall not be construed to preclude any
Trustee from serving the Trust in any other capacity as an officer, agent,
employee, or otherwise and receiving compensation for those services.
Section 13. DELEGATION OF POWER TO OTHER TRUSTEES. Any Trustee may, by
power of attorney, delegate his or her power for a period not exceeding six (6)
months at any one time to any other Trustee or Trustees; provided that in no
case shall fewer than two (2) Trustees personally exercise the powers granted to
the Trustees under the Declaration of Trust of the Trust except as otherwise
expressly provided herein or by resolution of the Board of Trustees. Except
where applicable law may require a Trustee to be present in person, a Trustee
represented by another Trustee pursuant to such power of attorney shall be
deemed to be present for purposes of establishing a quorum and satisfying the
required majority vote.
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ARTICLE IV
COMMITTEES OF TRUSTEES
Section 1. COMMITTEES OF TRUSTEES. The Board of Trustees may by
resolution adopted by a majority of the authorized number of Trustees designate
one or more committees, each consisting of two (2) or more Trustees, to serve at
the pleasure of the Board. The Board may designate one or more Trustees as
alternate members of any committee who may replace any absent member at any
meeting of the committee. Any committee to the extent provided in the resolution
of the Board, shall have the authority of the Board, except with respect to:
(a) the approval of any action which under applicable law also
requires interestholders' approval or approval of the
outstanding interests, or requires approval by a majority of
the entire Board or certain members of said Board;
(b) the filling of vacancies on the Board of Trustees or in any
committee;
(c) the fixing of compensation of the Trustees for serving on the
Board of Trustees or on any committee;
(d) the amendment or repeal of the Declaration of Trust of the
Trust or of the By-Laws or the adoption of new By-Laws;
(e) the amendment or repeal of any resolution of the Board of
Trustees which by its express terms is not so amendable or
repealable;
(f) a distribution to the interestholders of the Trust, except at
a rate or in a periodic amount or within a designated range
determined by the Board of Trustees; or
(g) the appointment of any other committees of the Board of
Trustees or the members of these committees.
Section 2. MEETINGS AND ACTION OF COMMITTEES. Meetings and action of
committees shall be governed by and held and taken in accordance with the
provisions of Article III of these By-Laws, with such changes in the context
thereof as are necessary to substitute the committee and its members for the
Board of Trustees and its members, except that the time of regular meetings of
committees may be determined either by resolution of the Board of Trustees or by
resolution of the committee. Special meetings of committees may also be called
by resolution of the Board of Trustees. Alternate members shall be given notice
of meetings of committees and shall have the right to attend all meetings of
committees. The Board of Trustees may adopt rules for the government of any
committee not inconsistent with the provisions of these By-Laws.
ARTICLE V
OFFICERS
Section 1. OFFICERS. The officers of the Trust shall be a President, a
Secretary, and a Treasurer. The Trust may also have, at the discretion of the
Board of Trustees, a Chairman of the Board, one or more Vice Presidents, one or
more Assistant Secretaries, one or more Assistant Treasurers, and
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such other officers as may be appointed in accordance with the provisions of
Section 3 of this Article V. Any number of offices may be held by the same
person.
Section 2. ELECTION OF OFFICERS. The officers of the Trust, except such
officers as may be appointed in accordance with the provisions of Section 3 or
Section 5 of this Article V, shall be chosen by the Board of Trustees, and each
shall serve at the pleasure of the Board of Trustees, subject to the rights, if
any, of an officer under any contract of employment.
Section 3. SUBORDINATE OFFICERS. The Board of Trustees may appoint and
may empower the President to appoint such other officers as the business of the
Trust may require, each of whom shall hold office for such period, have such
authority and perform such duties as are provided in these By-Laws or as the
Board of Trustees may from time to time determine.
Section 4. REMOVAL AND RESIGNATION OF OFFICERS. Subject to the rights,
if any, of an officer under any contract of employment, any officer may be
removed, either with or without cause, by the Board of Trustees at any regular
or special meeting of the Board of Trustees or by the principal executive
officer or by such other officer upon whom such power of removal may be
conferred by the Board of Trustees.
Any officer may resign at any time by giving written notice to the
Trust. Any resignation shall take effect at the date of the receipt of that
notice or at any later time specified in that notice; and unless otherwise
specified in that notice, the acceptance of the resignation shall not be
necessary to make it effective. Any resignation is without prejudice to the
rights, if any, of the Trust under any contract to which the officer is a party.
Section 5. VACANCIES IN OFFICES. A vacancy in any office because of
death, resignation, removal, disqualification or other cause shall be filled in
the manner prescribed in these By-Laws for regular appointment to that office.
The President may make temporary appointments to a vacant office pending action
by the Board of Trustees.
Section 6. CHAIRMAN OF THE BOARD. The Chairman of the Board, if such an
Officer is elected, shall if present preside at meetings of the Board of
Trustees, shall be the Chief Executive Officer of the Trust and shall, subject
to the control of the Board of Trustees, have general supervision, direction and
control of the business and the Officers of the Trust and exercise and perform
such other powers and duties as may be from time to time assigned to him by the
Board of Trustees or prescribed by the By-Laws.
Section 7. PRESIDENT. Subject to such supervisory powers, if any, as
may be given by the Board of Trustees to the Chairman of the Board, if there be
such an officer, the President shall be the chief operating officer of the Trust
and shall, subject to the control of the Board of Trustees and the Chairman,
have general supervision, direction and control of the business and the officers
of the Trust. He or she shall preside at all meetings of the interestholders and
in the absence of the Chairman of the Board or if there be none, at all meetings
of the Board of Trustees. He or she shall have the general powers and duties of
management usually vested in the office of President of a corporation and shall
have such other powers and duties as may be prescribed by the Board of Trustees
or these By-Laws.
Section 8. VICE PRESIDENTS. In the absence or disability of the
President, the Vice Presidents, if any, in order of their rank as fixed by the
Board of Trustees or if not ranked, the Executive Vice President (who shall be
considered first ranked) and such other Vice Presidents as shall be
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designated by the Board of Trustees, shall perform all the duties of the
President and when so acting shall have all powers of and be subject to all the
restrictions upon the President. The Vice Presidents shall have such other
powers and perform such other duties as from time to time may be prescribed for
them respectively by the Board of Trustees or the President or the Chairman of
the Board or by these By-Laws.
Section 9. SECRETARY. The Secretary shall keep or cause to be kept at
the principal executive office of the Trust, or such other place as the Board of
Trustees may direct, a book of minutes of all meetings and actions of Trustees,
committees of Trustees and interestholders with the time and place of holding,
whether regular or special, and if special, how authorized, the notice given,
the names of those present at Trustees' meetings or committee meetings, the
number of interests present or represented at interestholders, meetings, and the
proceedings.
The Secretary shall keep or cause to be kept at the principal executive
office of the Trust or at the office of the Trust's transfer agent or registrar,
a share register or a duplicate share register showing the names of all
interestholders and their addresses, the number and classes of interests held by
each, the number and date of certificates issued for the same and the number and
date of cancellation of every certificate surrendered for cancellation.
The Secretary shall give or cause to be given notice of all meetings of
the interestholders and of the Board of Trustees required to be given by these
By-Laws or by applicable law and shall have such other powers and perform such
other duties as may be prescribed by the Board of Trustees or by these By-Laws.
Section 10. TREASURER. The Treasurer shall be the chief financial
officer and chief accounting officer of the Trust and shall keep and maintain or
cause to be kept and maintained adequate and correct books and records of
accounts of the properties and business transactions of the Trust, including
accounts of its assets, liabilities, receipts, disbursements, gains, losses,
capital, retained earnings and interests. The books of account shall at all
reasonable times be open to inspection by any Trustee.
The Treasurer shall deposit all monies and other valuables in the name
and to the credit of the Trust with such depositories as may be designated by
the Board of Trustees. The Treasurer shall disburse the funds of the Trust as
may be ordered by the Board of Trustees, shall render to the President and
Trustees, whenever they request it, an account of all of his transactions as
chief financial officer and of the financial condition of the Trust and shall
have other powers and perform such other duties as may be prescribed by the
Board of Trustees or these By-Laws.
ARTICLE VI
INDEMNIFICATION OF TRUSTEES, OFFICERS, EMPLOYEES AND OTHER AGENTS
Section 1. AGENTS, PROCEEDINGS AND EXPENSES. For the purpose of this
Article, "agent" means any person who is or was a Trustee, officer, employee or
other agent of this Trust or is or was serving at the request of this Trust as a
Trustee, director, officer, employee or agent of another foreign or domestic
corporation, partnership, joint venture, trust or other enterprise or was a
Trustee, director, officer, employee or agent of a foreign or domestic
corporation which was a predecessor of another enterprise at the request of such
predecessor entity; "proceeding" means any threatened, pending or completed
action or proceeding, whether civil, criminal, administrative or investigative;
and "expenses" includes without limitation attorney's fees and any expenses of
establishing a right to indemnification under this Article.
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Section 2. ACTIONS OTHER THAN BY TRUST. This Trust shall indemnify any
person who was or is a party or is threatened to be made a party to any
proceeding (other than an action by or in the right of this Trust) by reason of
the fact that such person is or was an agent of this Trust, against expenses,
judgments, fines, settlements and other amounts actually and reasonably incurred
in connection with such proceeding, if it is determined that person acted in
good faith and reasonably believed:
(a) in the case of conduct in his or her official capacity as a
Trustee of the Trust, that his or her conduct was in the
Trust's best interests, and
(b) in all other cases, that his or her conduct was at least not
opposed to the Trust's best interests, and
(c) in the case of a criminal proceeding, that he or she had no
reasonable cause to believe the conduct of that person was
unlawful.
The termination of any proceeding by judgment order, settlement,
conviction or upon a plea of nolo contendere or its equivalent shall not of
itself create a presumption that the person did not act in good faith and in a
manner which the person reasonably believed to be in the best interests of this
Trust or that the person had reasonable cause to believe that the person's
conduct was unlawful.
Section 3. ACTIONS BY THE TRUST. This Trust shall indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action by or in the right of this Trust to procure a
judgment in its favor by reason of the fact that that person is or was an agent
of this Trust, against expenses actually and reasonably incurred by that person
in connection with the defense or settlement of that action if that person acted
in good faith, in a manner that person believed to be in the best interests of
this Trust and with such care, including reasonable inquiry, as an ordinarily
prudent person in a like position would use under similar circumstances.
Section 4. EXCLUSION OF INDEMNIFICATION. Notwithstanding any provision
to the contrary contained herein, there shall be no right to indemnification for
any liability arising by reason of willful misfeasance, bad faith, gross
negligence, or the reckless disregard of the duties involved in the conduct of
the agent's office with this Trust.
No indemnification shall be made under Sections 2 or 3 of this Article:
(a) In respect of any claim, issue, or matter as to which that
person shall have been adjudged to be liable on the basis that
personal benefit was improperly received by him or her,
whether or not the benefit resulted from an action taken in
the person's official capacity; or
(b) In respect of any claim, issue or matter as to which that
person shall have been adjudged to be liable in the
performance of that person's duty to this Trust, unless and
only to the extent that the court in which that action was
brought shall determine upon application that in view of all
the circumstances of the case, that person was not liable by
reason of the disabling conduct set forth in the preceding
paragraph and is fairly and reasonably entitled to indemnity
for the expenses which the court shall determine; or
(c) Of amounts paid in settling or otherwise disposing of a
threatened or pending action, with or without court approval,
or of expenses incurred in defending a threatened or pending
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action which is settled or otherwise disposed of without court
approval, unless the required approval set forth in Section 6
of this Article is obtained.
Section 5. SUCCESSFUL DEFENSE BY AGENT. To the extent that an agent of
this Trust has been successful on the merits in defense of any proceeding
referred to in Sections 2 or 3 of this Article or in defense of any claim, issue
or matter therein, before the court or other body before whom the proceeding was
brought, the agent shall be indemnified against expenses actually and reasonably
incurred by the agent in connection therewith, provided that the Board of
Trustees, including a majority who are disinterested, non-party Trustees, also
determines that based upon a review of the facts, the agent was not liable by
reason of the disabling conduct referred to in Section 4 of this Article.
Section 6. REQUIRED APPROVAL. Except as provided in Section 5 of this
Article, any indemnification under this Article shall be made by this Trust only
if authorized in the specific case on a determination that indemnification of
the agent is proper in the circumstances because the agent has met the
applicable standard of conduct set forth in Sections 2 or 3 of this Article and
is not prohibited from indemnification because of the disabling conduct set
forth in Section 4 of this Article, by:
(a) A majority vote of a quorum consisting of Trustees who are not
parties to the proceeding and are not interested persons of
the Trust (as defined in the Investment Company Act of 1940);
or
(b) A written opinion by an independent legal counsel.
Section 7. ADVANCE OF EXPENSES. Expenses incurred in defending any
proceeding may be advanced by this Trust before the final disposition of the
proceeding upon a written undertaking by or on behalf of the agent, to repay the
amount of the advance if it is ultimately determined that he or she is not
entitled to indemnification, together with at least one of the following as a
condition to the advance: (i) security for the undertaking; or (ii) the
existence of insurance protecting the Trust against losses arising by reason of
any lawful advances; or (iii) a determination by a majority of a quorum of
Trustees who are not parties to the proceeding and are not interested persons of
the Trust, or by an independent legal counsel in a written opinion, based on a
review of readily available facts that there is reason to believe that the agent
ultimately will be found entitled to indemnification. Determinations and
authorizations of payments under this Section must be made in the manner
specified in Section 6 of this Article for determining that the indemnification
is permissible.
Section 8. OTHER CONTRACTUAL RIGHTS. Nothing contained in this Article
shall affect any right to indemnification to which persons other than Trustees
and officers of this Trust or any subsidiary hereof may be entitled by contract
or otherwise.
Section 9. LIMITATIONS. No indemnification or advance shall be made
under this Article, except as provided in Sections 5 or 6 in any circumstances
where it appears:
(a) that it would be inconsistent with a provision of the
Declaration of Trust of the Trust, a resolution of the
interestholders, or an agreement in effect at the time of
accrual of the alleged cause of action asserted in the
proceeding in which the expenses were incurred or other
amounts were paid which prohibits or otherwise limits
indemnification; or
(b) that it would be inconsistent with any condition expressly
imposed by a court in approving a settlement.
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Section 10. INSURANCE. Upon and in the event of a determination by the
Board of Trustees of this Trust to purchase such insurance, this Trust shall
purchase and maintain insurance on behalf of any agent of this Trust against any
liability asserted against or incurred by the agent in such capacity or arising
out of the agent's status as such, but only to the extent that this Trust would
have the power to indemnify the agent against that liability under the
provisions of this Article and the Declaration of Trust of the Trust.
Section 11. FIDUCIARIES OF EMPLOYEE BENEFIT PLAN. This Article does not
apply to any proceeding against any Trustee, investment manager or other
fiduciary of an employee benefit plan in that person's capacity as such, even
though that person may also be an agent of this Trust as defined in Section 1 of
this Article. Nothing contained in this Article shall limit any right to
indemnification to which such a Trustee, investment manager, or other fiduciary
may be entitled by contract or otherwise which shall be enforceable to the
extent permitted by applicable law other than this Article.
ARTICLE VII
RECORDS AND REPORTS
Section 1. MAINTENANCE AND INSPECTION OF SHARE REGISTER. This Trust
shall keep at its principal executive office or at the office of its transfer
agent or registrar, if either be appointed and as determined by resolution of
the Board of Trustees, a record of its interestholders, giving the names and
addresses of all interestholders and the number and series of interests held by
each shareholder.
Section 2. MAINTENANCE AND INSPECTION OF BY-LAWS. The Trust shall keep
at its principal executive office the original or a copy of these By-Laws as
amended to date, which shall be open to inspection by the interestholders at all
reasonable times during office hours.
Section 3. MAINTENANCE AND INSPECTION OF OTHER RECORDS. The accounting
books and records and minutes of proceedings of the interestholders and the
Board of Trustees and any committee or committees of the Board of Trustees shall
be kept at such place or places designated by the Board of Trustees or in the
absence of such designation, at the principal executive office of the Trust. The
minutes shall be kept in written form and the accounting books and records shall
be kept either in written form or in any other form capable of being converted
into written form. The minutes and accounting books and records shall be open to
inspection upon the written demand of any shareholder at any reasonable time
during usual business hours for a purpose reasonably related to the
shareholder's interests as a shareholder. The inspection may be made in person
or by an agent or attorney and shall include the right to copy and make
extracts.
Section 4. INSPECTION BY TRUSTEES. Every Trustee shall have the
absolute right at any reasonable time to inspect all books, records, and
documents of every kind and the physical properties of the Trust. This
inspection by a Trustee may be made in person or by an agent or attorney and the
right of inspection includes the right to copy and make extracts of documents.
Section 5. FINANCIAL STATEMENTS. A copy of any financial statements and
any income statement of the Trust for each quarterly period of each fiscal year
and accompanying balance sheet of the Trust as of the end of each such period
that has been prepared by the Trust shall be kept on file in the principal
executive office of the Trust for at least twelve (12) months and each such
statement
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shall be exhibited at all reasonable times to any shareholder demanding an
examination of any such statement or a copy shall be mailed to any such
shareholder.
The quarterly income statements and balance sheets referred to in this
section shall be accompanied by the report, if any, of any independent
accountants engaged by the Trust or the certificate of an authorized officer of
the Trust that the financial statements were prepared without audit from the
books and records of the Trust.
ARTICLE VIII
GENERAL MATTERS
Section 1. CHECKS, DRAFTS, EVIDENCE OF INDEBTEDNESS. All checks,
drafts, or other orders for payment of money, notes or other forms of evidence
of indebtedness issued in the name of or payable to the Trust shall be signed or
endorsed in such manner and by such person or persons as shall be designated
from time to time in accordance with the resolution of the Board of Trustees.
Section 2. CONTRACTS AND INSTRUMENTS - HOW EXECUTED. The Board of
Trustees, except as otherwise provided in these By-Laws, may authorize any
officer or officers, agent or agents, to enter into any contract or execute any
instrument in the name of and on behalf of the Trust and this authority may be
general or confined to specific instances; and unless so authorized or ratified
by the Board of Trustees or within the agency power of an officer, no officer,
agent, or employee shall have any power or authority to bind the Trust by any
contract or engagement or to pledge its credit or to render it liable for any
purpose or for any amount.
Section 3. CERTIFICATES FOR INTERESTS. A certificate or certificates
for interests of beneficial interest in any series of the Trust may be issued to
a shareholder upon request when such interests are fully paid. All certificates
shall be signed in the name of the Trust by the Chairman of the Board or the
President or Vice President and by the Treasurer or an Assistant Treasurer or
the Secretary or any Assistant Secretary, certifying the number of interests and
the series of interests owned by the interestholders. Any or all of the
signatures on the certificate may be facsimile. In case any officer, transfer
agent, or registrar who has signed or whose facsimile signature has been placed
on a certificate shall have ceased to be that officer, transfer agent, or
registrar before that certificate is issued, it may be issued by the Trust with
the same effect as if that person were an officer, transfer agent or registrar
at the date of issue. Notwithstanding the foregoing, the Trust may adopt and use
a system of issuance, recordation and transfer of its interests by electronic or
other means.
Section 4. LOST CERTIFICATES. Except as provided in this Section 4, no
new certificates for interests shall be issued to replace an old certificate
unless the latter is surrendered to the Trust and canceled at the same time. The
Board of Trustees may in case any share certificate or certificate for any other
security is lost, stolen, or destroyed, authorize the issuance of a replacement
certificate on such terms and conditions as the Board of Trustees may require,
including a provision for indemnification of the Trust secured by a bond or
other adequate security sufficient to protect the Trust against any claim that
may be made against it, including any expense or liability on account of the
alleged loss, theft, or destruction of the certificate or the issuance of the
replacement certificate.
Section 5. REPRESENTATION OF INTERESTS OF OTHER ENTITIES HELD BY TRUST.
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<PAGE>
The Chairman of the Board, the President or any Vice President or any other
person authorized by resolution of the Board of Trustees or by any of the
foregoing designated officers, is authorized to vote or represent on behalf of
the Trust any and all interests of any corporation, partnership, trusts, or
other entities, foreign or domestic, standing in the name of the Trust. The
authority granted may be exercised in person or by a proxy duly executed by such
designated person.
Section 6. FISCAL YEAR. The fiscal year of the Trust shall be fixed and
refixed or changed from time to time by resolution of the Trustees. The fiscal
year of the Trust shall be the taxable year of each Series of The Trust.
ARTICLE IX
AMENDMENTS
Section 1. AMENDMENT BY INTERESTHOLDERS. These By-Laws may be amended
or repealed by the affirmative vote or written consent of a majority of the
outstanding interests entitled to vote, except as otherwise provided by
applicable law or by the Declaration of Trust of the Trust or these By-Laws.
Section 2. AMENDMENT BY TRUSTEES. Subject to the right of
interestholders as provided in Section 1 of this Article to adopt, amend or
repeal By-Laws, and except as otherwise provided by applicable law or by the
Declaration of Trust of the Trust, these By-Laws may be adopted, amended, or
repealed by the Board of Trustees.
Section 3. INCORPORATION BY REFERENCE INTO DECLARATION OF TRUST OF THE
TRUST. These By-Laws and any amendments thereto shall be incorporated by
reference to the Declaration of Trust of the Trust.
ARTICLE X
DIVIDENDS AND DISTRIBUTIONS
Section 1. DECLARATION OF DIVIDENDS AND DISTRIBUTIONS. Subject to any
applicable provisions of law and the Declaration of Trust of the Trust,
dividends and distributions upon the Interests may be declared at such intervals
as the Trustees may determine, in cash, in securities or other property, or in
Interests, from any sources permitted by law, all as the Trustees shall from
time to time determine.
Section 2. DISTRIBUTION OF INCOME DIVIDENDS. Inasmuch as the
computation of net income and net profits from the sales of securities or other
properties for federal income tax purposes may vary from the computation thereof
on the records of the Trust, the Trustees shall have power, in their discretion,
to distribute as income dividends and as capital gain distributions,
respectively, amounts sufficient to enable the Trust to avoid or reduce
liability for federal income taxes.
ARTICLE XI
CUSTODIAN
Section 1. APPOINTMENT AND DUTIES. The Trust shall at times employ a
bank or trust company having capital, surplus and undivided profits of at least
five million dollars ($5,000,000) as custodian with authority as its agent, but
subject to such restrictions, limitations and other requirements, if any, as may
be contained in these By-Laws and the Investment Company Act of 1940:
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<PAGE>
(1) to receive and hold the securities owned by the Trust and deliver
the same upon written or electronically transmitted order;
(2) to receive and hold any monies due to the Trust and deposit the
same in its own banking department or elsewhere as the Trustees may
direct;
(3) to disburse such funds upon orders or vouchers;
all upon such basis of compensation as may be agreed upon between the Trustees
and the custodian. If so directed by a Majority Interestholder Vote, the
custodian shall deliver and pay over all property of the Trust held by it as
specified in such vote.
The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services of the
custodian and upon such terms and conditions as may be agreed upon between the
custodian and such sub-custodian and approved by the Trustees.
Section 2. CENTRAL CERTIFICATE SYSTEM. Subject to such rules,
regulations and orders as the Commission may adopt, the Trustees may direct the
custodian to deposit all or any part of the securities owned by the Trust in a
system for the central handling of securities established by a national
securities exchange or a national securities association registered with the
Commission under the Securities Exchange Act of 1934, or such other person as
may be permitted by the Commission, or otherwise in accordance with the
Investment Company Act of 1940, pursuant to which system all securities of any
particular class or series of any issuer deposited within the system are treated
as fungible and may be transferred or pledged by bookkeeping entry without
physical delivery of such securities, provided that all such deposits shall be
subject to withdrawal only upon the order of the Trust.
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<PAGE>
INVESTMENT ADVISORY AGREEMENT
BETWEEN
STATE STREET BANK AND TRUST COMPANY
AND
STATE STREET MASTER TRUST
This Agreement is made as of this ___________, between State Street Master
Trust, a Massachusetts business trust (the "Trust"), and State Street Bank and
Trust Company, a Massachusetts bank acting through its division, State Street
Global Advisors (the "Adviser").
WHEREAS, the Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), currently
consisting of the five separate portfolio series set forth on Exhibit A to this
Agreement (each a "Fund" and collectively, the "Initial Funds"), each having its
own investment policies; and
WHEREAS, the Adviser is in the business of providing, among other things,
fiduciary and investment advisory services; and
WHEREAS, the Trust desires to retain the Adviser to render investment
advisory services to the Trust with respect to the Initial Funds and such other
series subsequently established by the Trust and made subject to this Agreement
in accordance with paragraph 1(b) (the "Additional Funds") (the Initial Funds
together with the Additional Funds being referred to herein as the "Funds"), and
the Adviser is willing to render such services;
NOW, THEREFORE, in consideration of the mutual agreements contained herein,
the Trust and Adviser agree as follows:
1. APPOINTMENT OF ADVISER.
(a) Initial Funds: The Trust hereby appoints the Adviser to act as
investment adviser to the Initial Funds for the period and on the terms set
forth in this Agreement. The Adviser accepts such appointment and agrees to
render the services herein set forth, for the compensation herein provided. The
Trust warrants that the Adviser has been duly appointed to act hereunder.
(b) Additional Funds: In the event that the Trust establishes one or more
series other than the Initial Funds with respect to which it desires to retain
the Adviser to render investment advisory services hereunder, it shall so notify
the Adviser in writing, indicating the advisory fee to be payable with respect
to each Additional Fund. If the Adviser is willing to render such services at
such fee, it shall so notify the Trust in writing, whereupon each such
Additional Fund shall become a Fund hereunder. In such event, a writing signed
by both the Trust and the 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. ADVISORY DUTIES. Subject to the supervision of the Board of Trustees of
the Trust (the "Board"), the Adviser shall manage the investment operations and
determine the composition of the 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 and Statement of Additional Information for such
Fund contained in the Trust's Registration Statement on Form N-1A (the
"Registration Statement"), as such prospectus and
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<PAGE>
Statement of Additional Information are amended or supplemented from time to
time. The Adviser's duties hereunder are subject to the following
understandings:
(a) The Adviser shall provide supervision of 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;
(b) The Adviser, in the performance of its duties and obligations under
this Agreement, shall act in conformity with the Trust's Declaration of Trust,
By-Laws, Registration Statement, and with the instructions and directions of the
Board, provided, however, the Adviser shall not be responsible for acting
contrary to any of the foregoing that are changed without notice of such change
to the Adviser; and the Adviser shall conform to and comply with the applicable
requirements of the 1940 Act and all other applicable federal or state laws and
regulations;
(c) The Adviser shall promptly communicate to the officers and Trustees of
the Trust such information relating to transactions of the Funds as they may
reasonably request. On occasions when the Adviser deems the purchase or sale of
a security to be in the best interest of a Fund as well as other clients, the
Adviser, to the extent permitted by applicable laws and regulations, may
aggregate the securities to be sold or purchased, provided that all accounts are
treated equitably and fairly. In such event, allocation of the securities so
purchased or sold, as well as the expenses incurred in the transactions, shall
be made by the Adviser in the manner it considers to be the most equitable and
consistent with its fiduciary obligations to the Trust and to such other
clients;
(d) The Adviser shall maintain books and records with respect to the
Trust's securities transactions and shall render to the Board such periodic and
special reports as the Board may reasonably request;
(e) The Adviser shall provide the Trust with a list of all securities
transactions as reasonably requested by the Trust;
(f) The investment advisory services of the Adviser to the Trust under
this Agreement are not to be deemed exclusive, and the Adviser shall be free to
render similar services to others.
3. EXECUTION AND ALLOCATION OF PORTFOLIO BROKERAGE COMMISSIONS. The Adviser,
subject to and in accordance with any directions which the Board may issue from
time to time, shall place, in the name of the Trust, orders for the execution of
the securities transactions in which any Fund is authorized to invest. When
placing such orders, the primary objective of the Adviser shall be to obtain the
best net price and execution ("best execution") for the Trust but this
requirement shall not be deemed to obligate the Adviser to place any order
solely on the basis of obtaining the lowest commission rate if the other
standards set forth in this section have been satisfied. The Trust recognizes
that there are likely to be many cases in which different brokers are equally
able to provide such best execution and that, in selection among such brokers
with respect to particular trades, it is desirable to choose those brokers who
furnish "brokerage and research services" (as defined in Section 28(e)(3) of the
Securities and Exchange Act of 1934) or statistical quotations and other
information to the Trust and/or the Adviser in accordance with the standards set
forth below. Moreover, to the extent that it continues to be lawful to do so and
so long as the Board determines as a matter of general policy that the Trust and
the respective Funds will benefit, directly or indirectly, by doing so, the
Adviser may place orders with a broker who charges a higher commission than
another broker would have charged for effecting that transaction, provided that
the excess commission is reasonable in relation to the value of brokerage and
research
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<PAGE>
services provided by that broker. Accordingly, the Trust and the Adviser agree
that the Adviser shall select brokers for the execution of any Fund's securities
transactions from among:
a. Those brokers and dealers who provide brokerage and research services,
or statistical quotations and other information to the Trust, specifically
including the quotations necessary to determine the Trust's net assets, in such
amount of total brokerage as may reasonably be required in light of such
services.
b. Those brokers and dealers who provide brokerage and research services
to the Adviser which relate directly to portfolio securities, actual or
potential, of the Trust, or which place the Adviser in a better position to make
decisions in connection with the management of the Trust's assets, whether or
not such data may also be useful to the Adviser in managing other portfolios or
advising other clients, in such amount of total brokerage as may reasonably be
required.
The Adviser agrees that no investment decision will be made or influenced
by a desire to provide brokerage for allocation in accordance with the
foregoing, and that the right to make such allocation of brokerage shall not
interfere with the Adviser's primary duty to obtain the best execution for the
Trust.
4. BOOKS AND RECORDS. The Adviser shall keep the Trust's books and records
required to be maintained by it pursuant to paragraph 2(d) hereof. The Adviser
agrees that all records which it maintains for the Trust are the property of the
Trust and it shall surrender promptly to the Trust any of such records upon the
Trust's request. The Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 of the Securities and Exchange Commission (the
"Commission") under the 1940 Act any such records as are required to be
maintained by Rule 31a-1(f) of the Commission under the 1940 Act. Nothing herein
shall prevent the Adviser from maintaining its own records as required by law,
which may be a duplication of the Trust's records.
5. REPORTS TO ADVISER. The Trust agrees to furnish the Adviser at its
principal office all prospectuses, proxy statements, reports to stockholders,
sales literature or other material prepared for distribution to shareholders of
the Trust or the public, which refer in any way to the Adviser, if reasonably
practicable ten (10) days prior to use thereof and not to use such material if
the Adviser should object thereto in writing within seven (7) days after receipt
of such material; provided, however, that the Adviser hereby approves all uses
of its name which merely refer in accurate terms to its appointment as
investment adviser hereunder, which merely identifies the Trust, or which are
required by the Commission or a state securities commission. In the event of
termination of this Agreement, the Trust shall, on written request of the
Adviser, forthwith delete any reference to the Adviser from any materials
described in the preceding sentence. The Trust shall furnish or otherwise make
available to the Adviser such other information relating to the business affairs
of the Trust as the Adviser at any time, or from time to time, reasonably
requests in order to discharge its obligations hereunder.
6. PROXIES. Unless the Trust gives written instructions to the contrary, the
Adviser shall vote or not vote all proxies solicited by or with respect to the
issuers of securities in which assets of any Fund may be invested. The Adviser
shall use its best good faith judgment to vote or not vote such proxies in a
manner which best serves the interests of the Trust's shareholders. The Trust
has received and reviewed the proxy guidelines of the Adviser which indicate how
the Adviser will vote.
7. EXPENSES. During the term of this Agreement, the Adviser shall pay all of
its own expenses incurred by it in connection with its activities under this
Agreement and each Fund of the Trust shall bear all expenses that are incurred
in its operations not specifically assumed by the Adviser.
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<PAGE>
Expenses borne by each Fund will include but not be limited to the
following (or the Fund's proportionate share of the following): (a) brokerage
commissions relating to securities purchased or sold by the Fund or any losses
incurred in connection therewith; (b) fees payable to and expenses incurred on
behalf of the Fund by the Trust's administrator; (c) expenses of organizing the
Trust and the Fund; (d) fees and expenses of registering and maintaining the
registration of the Fund's shares and the Trust under federal securities laws
and making and maintaining any notice filings required under any state
securities laws; (e) fees and salaries payable to the Trust's Trustees and
officers who are not officers or employees of the Adviser or any underwriter of
the Trust; (f) taxes (including any income or franchise taxes) and governmental
fees; (g) costs of any liability, uncollectible items of deposit and other
insurance or fidelity bonds; (h) any costs, expenses or losses arising out of
any liability of or claim for damage or other relief asserted against the Trust
or the Fund for violation of any law; (i) legal, accounting and auditing
expenses, including legal fees of special counsel for the independent Trustees,
if any; (j) charges of custodians, transfer agents and other agents; (k) costs
of preparing share certificates (if any); (l) expenses of setting in type and
printing prospectuses and Statements of Additional Information and supplements
thereto for existing shareholders, reports and statements to shareholders and
proxy material; (m) any extraordinary expenses (including fees and disbursements
of counsel) incurred by the Trust or the Fund; and (n) fees and other expenses
incurred in connection with membership in investment company organizations.
8. COMPENSATION OF THE ADVISER. For the services to be rendered by the Adviser
as provided in this Agreement, the Trust shall pay to the Adviser such
compensation as is designated in Exhibit A to this Agreement, so long as the
Adviser has not waived all or a portion of such compensation.
9. LIMITATION OF ADVISER'S LIABILITY. In the absence of (a) willful
misfeasance, bad faith or gross negligence on the part of the Adviser in
performance of its obligations and duties hereunder, (b) reckless disregard by
the Adviser of its obligations and duties hereunder, or (c) a loss resulting
from a breach of fiduciary duty with respect to the receipt of compensation for
services (in which case, any award of damages shall be limited to the period and
the amount set forth in Section 36(b)(3) of the 1940 Act), the Adviser shall not
be subject to any liability whatsoever to the Trust, or to any shareholder of
the Trust, for any error of judgment, mistake of law or any other act or
omission in the course of, or connected with, rendering services hereunder
including, without limitation, for any losses that may be sustained in
connection with the purchase, holding, redemption or sale of any security on
behalf of the Trust.
10. DURATION AND TERMINATION.
(a) This Agreement shall become effective with respect to each Initial
Fund on the date hereof, or, with respect to any Additional Fund on the date of
the written notification specified in Section 1(b). This Agreement, unless
sooner terminated as provided herein, shall continue for each Fund for two years
following the effective date of this Agreement with respect to the Fund, and
thereafter shall continue for periods of one year so long as such continuance is
specifically approved at least annually (a) by the vote of a majority of those
members of the Board who are not parties to this Agreement or "interested
persons" (as defined in the 1940 Act) of any such party, cast in person at a
meeting called for the purpose of voting such approval, and (b) by the Board or
by vote of a majority of the outstanding voting securities of the Fund in
accordance with the provisions of the 1940 Act.
(b) This Agreement may be terminated by the Trust at any time, without
the payment of any penalty, by the Board or by the majority vote of either the
entire Board or by vote of a majority of the outstanding voting securities of
the Fund (in accordance with the provisions of the 1940 Act) on 60 days' written
notice to the Adviser. This Agreement may also be terminated by the Adviser on
90 days' written
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<PAGE>
notice to the Trust. This Agreement will automatically and immediately terminate
in the event of its assignment (as defined in the 1940 Act and the rules
thereunder).
11. CHOICE OF LAW. This Agreement shall be construed in accordance with the
laws of The Commonwealth of Massachusetts and any applicable federal law.
12. LIMITATION OF LIABILITY. The Declaration of Trust dated July 27, 1999,
establishing the Trust, which is hereby referred to and a copy of which is on
file with the Secretary of The Commonwealth of Massachusetts, provides that the
name State Street Master Trust means the Trustees from time to time serving (as
Trustees but not personally) under such Declaration of Trust. It is expressly
acknowledged and agreed that the obligations of the Trust hereunder shall not be
binding upon any of the interest holders, Trustees, officers, employees or
agents of the Trust, personally, but shall bind only the trust property of the
Trust, as provided in its Declaration of Trust. The execution and delivery of
this Agreement have been authorized by the Trustees of the Trust and signed by
an officer of the Trust, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officer shall be deemed to have
been made by any of them individually or to impose any liability on any of them
personally, but shall bind only the trust property of the Trust as provided in
its Declaration of Trust.
IN WITNESS WHEREOF, the due execution hereof as of the date first above
written.
Attest: STATE STREET MASTER TRUST
By: By:
-------------------------------- -------------------------------
James Little
Treasurer
Attest: STATE STREET BANK AND TRUST COMPANY
Acting through its division
STATE STREET GLOBAL ADVISORS
By: By:
-------------------------------- -------------------------------
Name:
-----------------------------
Title:
----------------------------
5
<PAGE>
EXHIBIT A
As consideration for the State Street Bank and Trust Company's services as
advisor, administrator and custodian to each of the following Funds, State
Street shall receive from each Fund an annual unitary fee, accrued daily at the
rate of 1/365th of the applicable fee rate and payable monthly on the first
business day of each month, of the following annual percentages of the Fund's
average daily net assets during the month:
<TABLE>
<CAPTION>
Annual percentage of
Fund average daily net assets
---------------------------------------------------------------------
<S> <C>
STATE STREET EQUITY 500 INDEX PORTFOLIO .08%
STATE STREET EQUITY 2000 INDEX PORTFOLIO .08%
STATE STREET EQUITY 400 INDEX PORTFOLIO .08%
STATE STREET EAFE INDEX PORTFOLIO .08%
STATE STREET AGGREGATE BOND INDEX PORTFOLIO .08%
</TABLE>
6
<PAGE>
CUSTODIAN CONTRACT
This Contract between State Street Master Trust, a business trust
organized and existing under the laws of the Commonwealth of Massachusetts,
having its principal place of business at 225 Franklin Street, Boston,
Massachusetts, 02110, hereinafter called the "Trust", and State Street Bank and
Trust Company, a Massachusetts trust company, having its principal place of
business at 225 Franklin Street, Boston, Massachusetts, 02110, hereinafter
called the "Custodian",
WITNESSETH:
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Trust is authorized to issue shares in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets; and
WHEREAS, the Trust intends to initially offer shares (the "Shares") in
five (5) series, State Street Equity 500 Index Portfolio, State Street Equity
2000 Index Portfolio, State Street Equity 400 Index Portfolio, State Street EAFE
Index Portfolio and State Street Aggregate Bond Index Portolio (such series
together with all other series subsequently established by the Trust and made
subject to this Contract in accordance with paragraph 17, being herein referred
to as the "Fund(s)");
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
The Trust hereby employs the Custodian as the custodian of the assets
of the Funds of the Trust pursuant to the provisions of the Declaration of
Trust. The Trust on behalf of the Fund(s) agrees to deliver to the Custodian all
securities and cash of the Funds, and all payments of income, payments of
principal or capital distributions received by it with respect to all securities
owned by the Fund(s) from time to time, and the consideration received by it for
such new or treasury Shares as may be issued or sold from time to time. The
Custodian shall not be responsible for any property of a Fund held or received
by the Fund and not delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Article
4), the Custodian shall on behalf of the applicable Fund(s) from time to time
employ one or more sub-custodians, but only in accordance with an applicable
vote by the Board of Trustees of the Trust on behalf of the applicable Fund(s),
and provided that the Custodian shall have no more or less responsibility or
liability to the Trust on account of any actions or omissions of any
sub-custodian so employed than any such sub-custodian has to the Custodian.
<PAGE>
2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE TRUST HELD BY
THE CUSTODIAN
2.1 HOLDING SECURITIES. The Custodian shall hold and physically segregate
for the account of each Fund all non-cash property, including all
securities owned by such Fund, other than (a) securities which are
maintained pursuant to Section 2.10 in a clearing agency registered
with the United States Securities and Exchange Commission (the "SEC")
under Section 17A of the Exchange Act, which acts as a securities
depository, or in the book-entry system authorized by the U.S.
Department of the Treasury and certain federal agencies (each, a "U.S.
Securities System") and (b) commercial paper of an issuer for which
State Street Bank and Trust Company acts as issuing and paying agent
("Direct Paper") which is deposited and/or maintained in the Direct
Paper System (the "Direct Paper System") of the Custodian pursuant to
Section 2.11.
2.2 DELIVERY OF SECURITIES. The Custodian shall release and deliver
securities owned by a Fund held by the Custodian or in a Securities
System account of the Custodian or in the Custodian's Direct Paper book
entry system account ("Direct Paper System Account") only upon receipt
of Proper Instructions from the Trust on behalf of the applicable Fund,
which may be continuing instructions when deemed appropriate by the
parties, and only in the following cases:
1) Upon sale of such securities for the account of the Fund and
receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Fund;
3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.10 hereof;
4) To the depository agent in connection with tender or other
similar offers for securities of the Fund;
5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable;
provided that, in any such case, the cash or other
consideration is to be delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the
name of the Fund or into the name of any nominee or nominees
of the Custodian or into the name or nominee name of any agent
appointed pursuant to Section 2.9 or into the name or nominee
name of any sub-custodian appointed pursuant to Article 1; or
for exchange for a different number of bonds, certificates or
other evidence representing the same aggregate face amount or
number of units; PROVIDED that, in any such case, the new
securities are to be delivered to the Custodian;
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<PAGE>
7) Upon the sale of such securities for the account of the Fund,
to the broker or its clearing agent, against a receipt, for
examination in accordance with "street delivery" custom;
provided that in any such case, the Custodian shall have no
responsibility or liability for any loss arising from the
delivery of such securities prior to receiving payment for
such securities except as may arise from the Custodian's own
negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion contained
in such securities, or pursuant to any deposit agreement;
provided that, in any such case, the new securities and cash,
if any, are to be delivered to the Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities; provided that,
in any such case, the new securities and cash, if any, are to
be delivered to the Custodian;
10) For delivery in connection with any loans of securities made
by the Fund, BUT ONLY against receipt of adequate collateral
as agreed upon from time to time by the Custodian and the
Trust on behalf of the Fund, which may be in the form of cash
or obligations issued by the United States government, its
agencies or instrumentalities, except that in connection with
any loans for which collateral is to be credited to the
Custodian's account in the book-entry system authorized by the
U.S. Department of the Treasury, the Custodian will not be
held liable or responsible for the delivery of securities
owned by the Fund prior to the receipt of such collateral;
11) For delivery as security in connection with any borrowings by
the Trust on behalf of the Fund requiring a pledge of assets
by the Trust on behalf of the Fund, BUT ONLY against receipt
of amounts borrowed;
12) For delivery in accordance with the provisions of any
agreement among the Trust on behalf of the Fund, the Custodian
and a broker-dealer registered under the Securities Exchange
Act of 1934 (the "Exchange Act") and a member of The National
Association of Securities Dealers, Inc. ("NASD"), relating to
compliance with the rules of The Options Clearing Corporation
and of any registered national securities exchange, or of any
similar organization or organizations, regarding escrow or
other arrangements in connection with transactions by the Fund
of the Trust;
13) For delivery in accordance with the provisions of any
agreement among the Trust on behalf of the Fund, the
Custodian, and a futures commission merchant registered
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<PAGE>
under the Commodity Exchange Act, relating to compliance with
the rules of the Commodity Futures Trading Commission ("CFTC")
and/or any contract market, or any similar organization or
organizations, regarding account deposits in connection with
transactions by the Fund of the Trust;
14) Upon receipt of instructions from the transfer agent for the
Trust (the "Transfer Agent") for delivery to such Transfer
Agent or to the holders of Shares in connection with
distributions in kind, as may be described from time to time
in the Prospectus, in satisfaction of requests by holders of
Shares for repurchase or redemption; and
15) For any other proper trust purpose, BUT ONLY upon receipt of
Proper Instructions from the Trust on behalf of the applicable
Fund specifying the securities of the Fund to be delivered,
setting forth the purpose for which such delivery is to be
made, declaring such purpose to be a proper trust purpose, and
naming the person or persons to whom delivery of such
securities shall be made.
2.3 REGISTRATION OF SECURITIES. Securities held by the Custodian (other
than bearer securities) shall be registered in the name of the Fund or
in the name of any nominee of the Trust on behalf of the Fund or of any
nominee of the Custodian which nominee shall be assigned exclusively to
the Fund, UNLESS the Trust has authorized in writing the appointment of
a nominee to be used in common with other registered investment
companies having the same investment adviser as the Fund, or in the
name or nominee name of any agent appointed pursuant to Section 2.9 or
in the name or nominee name of any sub-custodian appointed pursuant to
Article 1. All securities accepted by the Custodian on behalf of the
Fund under the terms of this Contract shall be in "street name" or
other good delivery form. If, however, the Trust directs the Custodian
to maintain securities in "street name", the Custodian shall utilize
its best efforts only to timely collect income due the Trust on such
securities and to notify the Trust on a best efforts basis only of
relevant corporate actions including, without limitation, pendency of
calls, maturities, tender or exchange offers.
2.4 BANK ACCOUNTS. The Custodian shall open and maintain a separate bank
account or accounts in the name of each Fund of the Trust, subject only
to draft or order by the Custodian acting pursuant to the terms of this
Contract, and shall hold in such account or accounts, subject to the
provisions hereof, all cash received by it from or for the account of
the Fund, other than cash maintained by the Fund in a bank account
established and used in accordance with Rule 17f-3 under the Investment
Company Act of 1940, as amended (the "1940 Act"). Funds held by the
Custodian for a Fund may be deposited by it to its credit as Custodian
in the Banking Department of the Custodian or in such other banks or
trust companies as it may in its discretion deem necessary or
desirable; PROVIDED, however, that every such bank or trust company
shall be qualified to act as a custodian under the 1940 Act and that
each such bank or trust company and the funds to be deposited with each
such bank or trust company shall on behalf of each applicable Fund be
approved by vote of a majority
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of the Board of Trustees of the Trust. Such funds shall be deposited by
the Custodian in its capacity as Custodian and shall be withdrawable by
the Custodian only in that capacity.
2.5 DETERMINATION OF FUND DEPOSIT, ETC. Subject to and in accordance with
the directions of the investment adviser for the Funds, the Custodian
shall determine for each Fund after the end of each trading day on the
New York Stock Exchange, in accordance with the respective Fund's
policies as adopted from time to time by the Board of Trustees and in
accordance with the procedures set forth in the Prospectus, (i) the
identity and weighting of the securities in the Fund Deposit and the
Fund Securities, (ii) the Cash Component (including the Dividend
Equivalent Amount), and (iii) the amount of cash redemption proceeds
(all as defined in the Registration Statement) required for the
issuance or redemption, as the case may be, of Shares in Creation Unit
aggregations of such Fund on such date. The Custodian shall provide or
cause to be provided this information to the Funds' distributor and
other persons according to the policy established by the Trust's Board
of Trustees and shall disseminate such information on each day that the
American Stock Exchange is open, including through the facilities of
the National Securities Clearing Corporation, prior to the opening of
trading on the American Stock Exchange.
2.6 COLLECTION OF INCOME. Subject to the provisions of Section 2.3, the
Custodian shall collect on a timely basis all income and other payments
with respect to registered securities held hereunder to which each Fund
shall be entitled either by law or pursuant to custom in the securities
business, and shall collect on a timely basis all income and other
payments with respect to bearer securities if, on the date of payment
by the issuer, such securities are held by the Custodian or its agent
thereof and shall credit such income, as collected, to such Fund's
custodian account. Without limiting the generality of the foregoing,
the Custodian shall detach and present for payment all coupons and
other income items requiring presentation as and when they become due
and shall collect interest when due on securities held hereunder.
Income due each Fund on securities loaned pursuant to the provisions of
Section 2.2 (10) shall be the responsibility of the Trust. The
Custodian will have no duty or responsibility in connection therewith,
other than to provide the Trust with such information or data as may be
necessary to assist the Trust in arranging for the timely delivery to
the Custodian of the income to which the Fund is properly entitled.
2.7 PAYMENT OF TRUST MONIES. Upon receipt of Proper Instructions from the
Trust on behalf of the applicable Fund, which may be continuing
instructions when deemed appropriate by the parties, the Custodian
shall pay out monies of a Fund in the following cases only:
1) Upon the purchase of domestic securities, options, futures
contracts or options on futures contracts for the account of
the Fund but only (a) against the delivery of such securities
or evidence of title to such options, futures contracts or
options on futures contracts to the Custodian (or any bank,
banking firm or trust company doing business in the United
States or abroad which is qualified under the 1940 Act, as
amended, to act as a custodian and has been designated by the
Custodian as its agent
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for this purpose) registered in the name of the Fund or in the
name of a nominee of the Custodian referred to in Section 2.3
hereof or in proper form for transfer; (b) in the case of a
purchase effected through a U.S. Securities System, in
accordance with the conditions set forth in Section 2.10
hereof; (c) in the case of a purchase involving the Direct
Paper System, in accordance with the conditions set forth in
Section 2.11; (d) in the case of repurchase agreements entered
into between the Trust on behalf of the Fund and the
Custodian, or another bank, or a broker-dealer which is a
member of NASD, (i) against delivery of the securities either
in certificate form or through an entry crediting the
Custodian's account at the Federal Reserve Bank with such
securities or (ii) against delivery of the receipt evidencing
purchase by the Fund of securities owned by the Custodian
along with written evidence of the agreement by the Custodian
to repurchase such securities from the Fund or (e) for
transfer to a time deposit account of the Trust in any bank,
whether domestic or foreign; such transfer may be effected
prior to receipt of a confirmation from a broker and/or the
applicable bank pursuant to Proper Instructions from the Trust
as defined herein;
2) In connection with conversion, exchange or surrender of
securities owned by the Fund as set forth in Section 2.2
hereof;
3) For the redemption or repurchase of Creation Unit aggregations
of Shares issued as set forth in Article 4 hereof;
4) For the payment of any expense or liability incurred by the
Fund, including but not limited to the following payments for
the account of the Fund: interest, taxes, management,
accounting, transfer agent and legal fees, and operating
expenses of the Trust whether or not such expenses are to be
in whole or part capitalized or treated as deferred expenses;
5) For the payment of any dividends on Shares declared pursuant
to the governing documents of the Trust;
6) For repayment of loans made to a Fund or upon redelivery of
collateral for loans of securities made by a Fund or for
payment in connection with a foreign exchange transaction;
7) For any other proper Trust purpose, BUT ONLY upon receipt of
Proper Instructions from the Trust on behalf of the Fund
specifying the amount of such payment, setting forth the
purpose for which such payment is to be made, declaring such
purpose to be a proper Trust purpose, and naming the person or
persons to whom such payment is to be made.
2.8 [RESERVED].
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2.9 APPOINTMENT OF AGENTS. The Custodian may at any time or times, in
compliance with the 1940 Act, in its discretion appoint (and may at any
time remove) any other bank or trust company which is itself qualified
under the 1940 Act to act as a custodian, as its agent to carry out
such of the provisions of this Article 2 as the Custodian may from time
to time direct; PROVIDED, however, that the appointment of any agent
shall not relieve the Custodian of its responsibilities or liabilities
hereunder.
2.10 DEPOSIT OF TRUST ASSETS IN U.S. SECURITIES SYSTEMS. The Custodian may
deposit and/or maintain securities owned by a Fund in a U.S. Securities
System in accordance with applicable Federal Reserve Board and SEC
rules and regulations, if any, and subject to the following provisions:
1) The Custodian may keep securities of the Fund in a U.S.
Securities System provided that such securities are
represented in an account of the Custodian in the U.S.
Securities System (the "U.S. Securities System Account") which
account shall not include any assets of the Custodian other
than assets held as a fiduciary, custodian or otherwise for
customers;
2) The records of the Custodian with respect to securities of the
Fund which are maintained in a U.S. Securities System shall
identify by book-entry those securities belonging to the Fund;
3) The Custodian shall pay for securities purchased for the
account of the Fund upon (i) receipt of advice from the U.S.
Securities System that such securities have been transferred
to the U.S. Securities System Account, and (ii) the making of
an entry on the records of the Custodian to reflect such
payment and transfer for the account of the Fund. The
Custodian shall transfer securities sold for the account of
the Fund upon (i) receipt of advice from the U.S. Securities
System that payment for such securities has been transferred
to the U.S. Securities System Account, and (ii) the making of
an entry on the records of the Custodian to reflect such
transfer and payment for the account of the Fund. Copies of
all advices from the U.S. Securities System of transfers of
securities for the account of the Fund shall identify the
Fund, be maintained for the Fund by the Custodian and be
provided to the Trust at its request. Upon request, the
Custodian shall furnish the Trust on behalf of the Fund
confirmation of each transfer to or from the account of the
Fund in the form of a written advice or notice and shall
furnish to the Trust on behalf of the Fund copies of daily
transaction sheets reflecting each day's transactions in the
U.S. Securities System for the account of the Fund;
4) The Custodian shall provide the Trust with any report obtained
by the Custodian on the U.S. Securities System's accounting
system, internal accounting control and procedures for
safeguarding securities deposited in the U.S. Securities
System;
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5) The Custodian shall have received from the Trust on behalf of
the Fund the initial or annual certificate, as the case may
be, required by Article 14 hereof;
6) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Trust for the benefit of the
Fund for any loss or damage to the Fund resulting from use of
the U.S. Securities System by reason of any negligence,
misfeasance or misconduct of the Custodian or any of its
agents or of any of its or their employees or from failure of
the Custodian or any such agent to enforce effectively such
rights as it may have against the U.S. Securities System; at
the election of the Trust, it shall be entitled to be
subrogated to the rights of the Custodian with respect to any
claim against the U.S. Securities System or any other person
which the Custodian may have as a consequence of any such loss
or damage if and to the extent that the Fund has not been made
whole for any such loss or damage.
2.11 TRUST ASSETS HELD IN THE CUSTODIAN'S DIRECT PAPER SYSTEM. The Custodian
may deposit and/or maintain securities owned by a Fund in the Direct
Paper System of the Custodian subject to the following provisions:
1) No transaction relating to securities in the Direct Paper
System will be effected in the absence of Proper Instructions
from the Trust on behalf of the Fund;
2) The Custodian may keep securities of the Fund in the Direct
Paper System only if such securities are represented in the
Direct Paper System Account which account shall not include
any assets of the Custodian other than assets held as a
fiduciary, custodian or otherwise for customers;
3) The records of the Custodian with respect to securities of the
Fund which are maintained in the Direct Paper System shall
identify by book-entry those securities belonging to the Fund;
4) The Custodian shall pay for securities purchased for the
account of the Fund upon the making of an entry on the records
of the Custodian to reflect such payment and transfer of
securities to the account of the Fund. The Custodian shall
transfer securities sold for the account of the Fund upon the
making of an entry on the records of the Custodian to reflect
such transfer and receipt of payment for the account of the
Fund;
5) The Custodian shall furnish the Trust on behalf of the Fund
confirmation of each transfer to or from the account of the
Fund, in the form of a written advice or notice, of Direct
Paper on the next business day following such transfer and
shall furnish to
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the Trust on behalf of the Fund copies of daily transaction
sheets reflecting each day's transaction in the Direct Paper
System for the account of the Fund;
6) The Custodian shall provide the Trust on behalf of the Fund
with any report on its system of internal accounting control
as the Trust may reasonably request from time to time.
2.12 SEGREGATED ACCOUNT. The Custodian shall upon receipt of Proper
Instructions from the Trust on behalf of each applicable Fund establish
and maintain a segregated account or accounts for and on behalf of each
such Fund, into which account or accounts may be transferred cash
and/or securities, including securities maintained in an account by the
Custodian pursuant to Section 2.10 hereof, (i) in accordance with the
provisions of any agreement among the Trust on behalf of the Fund, the
Custodian and a broker-dealer registered under the Exchange Act and a
member of the NASD (or any futures commission merchant registered under
the Commodity Exchange Act), relating to compliance with the rules of
The Options Clearing Corporation and of any registered national
securities exchange (or the CFTC or any registered contract market), or
of any similar organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Fund, (ii) for
purposes of segregating cash or securities in connection with options
purchased, sold or written by the Fund or commodity futures contracts
or options thereon purchased or sold by the Fund, (iii) for the
purposes of compliance by the Fund with the procedures required by
Investment Company Act Release No. 10666, or any subsequent release of
the SEC, or interpretative opinion of the staff of the SEC relating to
the maintenance of segregated accounts by registered investment
companies, (iv) for purposes of segregating cash deposits, representing
115% of missing Deposit Securities, made pending delivery of such
missing Deposit Securities and utilized by the Trust to cover costs of
acquiring such missing Deposit Securities as provided for in the
Prospectus, and (v) for other proper trust purposes, BUT ONLY, in the
case of clause (v), upon receipt of Proper Instructions from the Trust
on behalf of the applicable Fund setting forth the purpose or purposes
of such segregated account and declaring such purpose to be a proper
trust purpose.
2.13 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian shall execute
ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other
payments with respect to securities of each Fund held by it and in
connection with transfers of securities.
2.14 PROXIES. The Custodian shall, with respect to the securities held
hereunder, cause to be promptly executed by the registered holder of
such securities, if the securities are registered otherwise than in the
name of the Fund or a nominee of the Fund, all proxies, without
indication of the manner in which such proxies are to be voted, and
shall promptly deliver to the Fund such proxies, all proxy soliciting
materials and all notices relating to such securities.
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2.15 COMMUNICATIONS RELATING TO FUND SECURITIES. Subject to the provisions
of Section 2.3, the Custodian shall transmit promptly to the Trust for
each Fund all written information (including, without limitation,
pendency of calls and maturities of securities and expirations of
rights in connection therewith and notices of exercise of call and put
options written by the Trust on behalf of the Fund and the maturity of
futures contracts purchased or sold by the Fund) received by the
Custodian from issuers of the securities being held for the Fund. With
respect to tender or exchange offers, the Custodian shall transmit
promptly to the Fund all written information received by the Custodian
from issuers of the securities whose tender or exchange is sought and
from the party (or his agents) making the tender or exchange offer. If
the Fund desires to take action with respect to any tender offer,
exchange offer or any other similar transaction, the Fund shall notify
the Custodian at least three business days prior to the date on which
the Custodian is to take such action.
3. PAYMENTS FOR REPURCHASES OR REDEMPTIONS AND SALES OF SHARES OF THE
TRUST
From such funds and securities as may be available for the purpose but
subject to the limitations of the Declaration of Trust and any applicable votes
of the Board of Trustees of the Trust pursuant thereto, the Custodian shall,
upon receipt of instructions from the Transfer Agent, make funds and securities
available for payment to Authorized Participants (as defined in the Prospectus)
who have delivered to the Transfer Agent a Proper Instructions for the
redemption or repurchase of their Shares, in Creation Unit aggregations, which
shall have been accepted by the Transfer Agent, the applicable Fund Securities
(as defined in the Prospectus) (or such securities in lieu thereof as may be
designated by the investment adviser of the Trust in accordance with the
Prospectus) for such Fund and the cash redemption payment, if applicable, less
any applicable cash redemption transaction fee. The Custodian will transfer the
applicable Trust Securities to or on the order of the Authorized Participant
through the Clearing Process (as defined in the Prospectus) or, at the election
of the Authorized Participant, outside the Clearing Process through the DTC
system (as defined in the Prospectus). Any cash redemption payment (less any
applicable cash redemption transaction fees) due to the Authorized Participant
on redemption shall be effected through the Clearing Process or through wire
transfer in the case of redemptions effected outside of the Clearing Process
through the DTC system.
4. PROPER INSTRUCTIONS
Proper Instructions as used throughout this Contract means a writing
signed or initialed by one or more person or persons as the Board of Trustees
shall have from time to time authorized. Each such writing shall set forth the
specific transaction or type of transaction involved, including a specific
statement of the purpose for which such action is requested. Oral instructions
will be considered Proper Instructions if the Custodian reasonably believes them
to have been given by a person authorized to give such instructions with respect
to the transaction involved. The Trust shall cause all oral instructions to be
confirmed in writing. Proper Instructions may include communications effected
directly between electro-mechanical or electronic devices provided that
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the Trust and the Custodian agree to security procedures, including but not
limited to, the security procedures selected by the Trust in the Funds Transfer
Addendum attached hereto. For purposes of this Section, Proper Instructions
shall include instructions received by the Custodian pursuant to any three-party
agreement which requires a segregated asset account in accordance with Section
2.12.
5. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY
The Custodian may in its discretion, without express authority from the
Trust on behalf of each applicable Fund:
1) make payments to itself or others for minor expenses of
handling securities or other similar items relating to its
duties under this Contract, PROVIDED that all such payments
shall be accounted for to the Trust on behalf of the Fund;
2) surrender securities in temporary form for securities in
definitive form;
3) endorse for collection, in the name of the Fund, checks,
drafts and other negotiable instruments; and
4) in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with the securities and property
of the Fund except as otherwise directed by the Board of
Trustees of the Trust.
6. EVIDENCE OF AUTHORITY
The Custodian shall be protected in acting upon any instructions,
notice, request, consent, certificate or other instrument or paper believed by
it to be genuine and to have been properly executed by or on behalf of the
Trust. The Custodian may receive and accept a certified copy of a vote of the
Board of Trustees of the Trust as conclusive evidence (a) of the authority of
any person to act in accordance with such vote or (b) of any determination or of
any action by the Board of Trustees pursuant to the Declaration of Trust as
described in such vote; and such vote may be considered as in full force and
effect until receipt by the Custodian of written notice to the contrary.
7. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND
CALCULATION OF NET ASSET VALUE, NET INCOME AND OTHER INFORMATION
The Custodian shall keep the books of account of each Fund and compute
the net asset value per Share of the outstanding Shares. The Custodian shall
transmit the net asset value per share of each Fund to the Transfer Agent, the
Distributor, the American Stock Exchange (the "AMEX") and to such other entities
as directed in writing by the Trust. If directed in writing by the Trust to do
so, the Custodian shall also calculate daily the net income of the Fund as
described in
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the Prospectus and shall advise the Trust, the Distributor and the Transfer
Agent daily of the total amounts of such net income and, if instructed in
writing by an officer of the Trust to do so, shall advise the Transfer Agent
periodically of the division of such net income among its various components.
The calculations of the net asset value per Share and the daily income of each
Fund shall be made at the time or times described from time to time in the
Prospectus. The Custodian shall on each day a Fund is open for the purchase or
redemption of Shares of such Fund compute the number of Shares of each Deposit
Security (as defined in the Prospectus) to be included in the current Trust
Deposit, the Dividend Equivalent Payment (as defined in the Prospectus) and the
Fund Securities (as defined in the Prospectus) and shall transmit such
information to the AMEX.
8. RECORDS
The Custodian shall with respect to each Fund create and maintain all
records relating to its activities and obligations under this Contract in such
manner as will meet the obligations of the Trust under the 1940 Act, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder.
All such records shall be the property of the Trust and shall at all times
during the regular business hours of the Custodian be open for inspection by
duly authorized officers, employees or agents of the Trust and employees and
agents of the SEC. The Custodian shall, at the Trust's request, supply the Trust
with a tabulation of securities owned by each Fund and held by the Custodian and
shall, when requested to do so by the Trust and for such compensation as shall
be agreed upon between the Trust and the Custodian, include certificate numbers
in such tabulations.
9. OPINION OF TRUST'S INDEPENDENT ACCOUNTANT
The Custodian shall take all reasonable action, as the Trust on behalf
of each applicable Fund may from time to time request, to obtain from year to
year favorable opinions from the Trust's independent accountants with respect to
its activities hereunder in connection with the preparation of the Trust's Form
N-1A, and Form N-SAR or other annual reports to the SEC and with respect to any
other requirements thereof.
10. REPORT TO TRUST BY INDEPENDENT PUBLIC ACCOUNTANTS
The Custodian shall provide the Trust, on behalf of each of the Funds
at such times as the Trust may reasonably require, with reports by independent
public accountants on the accounting system, internal accounting control and
procedures for safeguarding securities, futures contracts and options on futures
contracts, including securities deposited and/or maintained in a U.S. Securities
System relating to the services provided by the Custodian under this Contract
such reports, shall be of sufficient scope and in sufficient detail, as may
reasonably be required by the Trust to provide reasonable assurance that any
material inadequacies would be disclosed by such examination, and, if there are
no such inadequacies, the reports shall so state.
11. COMPENSATION OF CUSTODIAN
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The Custodian shall receive from the Trust such compensation for the
Custodian's services provided pursuant to this Agreement as may be agreed to
from time to time in a written fee schedule approved by the parties and
described in the then current Prospectus, and initially set forth as a "Unitary
Fee" in the Custody, Accounting, Transfer Agent, Stock Transfer, Fund
Administration and Advisory Fee Schedule to this Agreement.
12. RESPONSIBILITY OF CUSTODIAN
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties,
including any futures commission merchant acting pursuant to the terms of a
two-party or three-party futures or options agreement. The Custodian shall be
held to the exercise of reasonable care in carrying out the provisions of this
Contract but shall be kept indemnified by and shall be without liability to the
Trust for any action taken or omitted by it in good faith without negligence. It
shall be entitled to rely on and may act upon advice of counsel (who may be
counsel for the Trust) on all matters, and shall be without liability for any
action reasonably taken or omitted pursuant to such advice.
If the Trust on behalf of a Fund requires the Custodian to take any
action with respect to securities, which action involves the payment of money or
which action may, in the opinion of the Custodian, result in the Custodian or
its nominee assigned to the Trust or the Fund being liable for the payment of
money or incurring liability of some other form, the Trust on behalf of the
Fund, as a prerequisite to requiring the Custodian to take such action, shall
provide indemnity to the Custodian in an amount and form satisfactory to it.
If the Trust requires the Custodian, its affiliates, subsidiaries or
agents, to advance cash or securities for any purpose (including but not limited
to securities settlements, foreign exchange contracts and assumed settlement) or
in the event that the Custodian or its nominee shall incur or be assessed any
taxes, charges, expenses, assessments, claims or liabilities in connection with
the performance of this Contract except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful misconduct,
any property at any time held for the account of the applicable Fund shall be
security therefor and should the Trust fail to repay the Custodian promptly, the
Custodian shall be entitled to utilize available cash and to dispose of such
Fund's assets to the extent necessary to obtain reimbursement.
In no event shall the Custodian be liable for indirect, special or
consequential damages.
13. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT
This Contract shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided, may
be amended at any time by mutual agreement
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of the parties hereto and may be terminated by either party by an instrument in
writing delivered or mailed, postage prepaid to the other party, such
termination to take effect not sooner than thirty (30) after the date of such
delivery or mailing; PROVIDED, however that the Custodian shall not with respect
to a Fund act under Section 2.10 hereof in the absence of receipt of an initial
certificate of the Secretary or an Assistant Secretary that the Board has
approved the initial use of a particular Securities System by such Fund, as
required by Rule 17f-4 under the 1940 Act and that the Custodian shall not with
respect to a Fund act under Section 2.11 hereof in the absence of receipt of an
initial certificate of the Secretary or an Assistant Secretary that the Board
has approved the initial use of the Direct Paper System by such Fund; PROVIDED
FURTHER, however, that the Trust shall not amend or terminate this Contract in
contravention of any applicable federal or state regulations, or any provision
of the Declaration of Trust, and further provided, that the Trust on behalf of
one or more of the Trust's may at any time by action of its Board (i) substitute
another bank or trust company for the Custodian by giving notice as described
above to the Custodian, or (ii) immediately terminate this Contract Agreement in
the event of the appointment of a conservator or receiver for the Custodian by
the Comptroller of the Currency or upon the happening of a like event at the
direction of an appropriate regulatory agency or court of competent
jurisdiction.
Upon termination of the Contract the Trust on behalf of each applicable
Fund shall pay to the Custodian such compensation as may be due as of the date
of such termination and shall likewise reimburse the Custodian for its
reasonable costs, expenses and disbursements.
14. SUCCESSOR CUSTODIAN
If a successor custodian for one or more Funds shall be appointed by
the Board, the Custodian shall, upon termination, deliver to such successor
custodian at the office of the Custodian, duly endorsed and in the form for
transfer, all securities of each applicable Fund then held by it hereunder and
shall transfer to an account of the successor custodian all of the securities of
each such Fund held in a Securities System.
If no such successor custodian shall be appointed, the Custodian shall,
in like manner, upon receipt of a Certified Resolution, deliver at the office of
the Custodian and transfer such securities, funds and other properties in
accordance with such resolution.
In the event that no written order designating a successor custodian or
Certified Resolution shall have been delivered to the Custodian on or before the
date when such termination shall become effective, then the Custodian shall have
the right to deliver to a bank or trust company, which is a "bank" as defined in
the 1940 Act, doing business in Boston, Massachusetts, or New York, New York, of
its own selection, having an aggregate capital, surplus, and undivided profits,
as shown by its last published report, of not less than $25,000,000, all
securities, funds and other properties held by the Custodian on behalf of each
applicable Fund and all instruments held by the Custodian relative thereto and
all other property held by it under this Contract on behalf of each applicable
Fund and to transfer to an account of such successor custodian all of the
securities of
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each such Fund held in any Securities System. Thereafter, such bank or trust
company shall be the successor of the Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Trust to procure the Certified Resolution to appoint a successor
custodian, the Custodian shall be entitled to fair compensation for its services
during such period as the Custodian retains possession of such securities, funds
and other properties and the provisions of this Contract relating to the duties
and obligations of the Custodian shall remain in full force and effect.
15. INTERPRETIVE AND ADDITIONAL PROVISIONS
In connection with the operation of this Contract, the Custodian and
the Trust on behalf of each of the Funds, may from time to time agree on such
provisions interpretive of or in addition to the provisions of this Contract as
may in their joint opinion be consistent with the general tenor of this
Contract. Any such interpretive or additional provisions shall be in a writing
signed by both parties and shall be annexed hereto, provided that no such
interpretive or additional provisions shall contravene any applicable federal or
state regulations or any provision of the Declaration of Trust of the Trust. No
interpretive or additional provisions made as provided in the preceding sentence
shall be deemed to be an amendment of this Contract.
16. ADDITIONAL TRUSTS
In the event that the Trust establishes one or more series of Shares in
addition to State Street Equity 500 Index Portfolio, State Street Equity 2000
Index Portfolio, State Street Equity 400 Index Portfolio, State Street EAFE
Index Portfolio and State Street Aggregate Bond Index Portfolio with respect to
which it desires to have the Custodian render services as custodian under the
terms hereof, it shall so notify the Custodian in writing, and if the Custodian
agrees in writing to provide such services, such series of Shares shall become a
Fund hereunder.
17. MASSACHUSETTS LAW TO APPLY
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.
18. PRIOR CONTRACTS
This Contract supersedes and terminates, as of the date hereof, all
prior contracts between the Trust on behalf of each of the Funds and the
Custodian relating to the custody of the Trust's assets.
18A. NOTICES
15
<PAGE>
Any notice, instruction or other instrument required to be given
hereunder may be delivered in person to the offices of the parties as set forth
herein during normal business hours or delivered prepaid registered mail or by
telex, cable or telecopy to the parties at the following addresses or such other
addresses as may be notified by any party from time to time.
To the Trust: State Street Master Trust
c/o State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
Attention: Joseph J. McBrien
Telephone: 617-662-3979
Telecopy: 617-662-3805
To the Custodian: State Street Bank and Trust Company
Attention:
Telephone:
Telecopy:
Such notice, instruction or other instrument shall be deemed to have
been served in the case of a registered letter at the expiration of five
business days after posting, in the case of cable twenty-four hours after
dispatch and, in the case of telex, immediately on dispatch and if delivered
outside normal business hours commence and in the case of cable, telex or
telecopy on the business day after the receipt thereof. Evidence that the notice
was properly addressed, stamped and put into the post shall be conclusive
evidence of posting.
16
<PAGE>
19. REPRODUCTION OF DOCUMENTS
This Contract and all schedules, exhibits, attachments and amendments
hereto may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties hereto
all/each agree that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not the
original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.
19A. DATA ACCESS SERVICES ADDENDUM
The Custodian and the Trust agree to be bound by the terms of the Data
Access Services Addendum attached hereto.
20. SHAREHOLDER COMMUNICATIONS ELECTION
SEC Rule 14b-2 requires banks which hold securities for the account of
customers to respond to requests by issuers of securities for the names,
addresses and holdings of beneficial owners of securities of that issuer held by
the bank unless the beneficial owner has expressly objected to disclosure of
this information. In order to comply with the rule, the Custodian needs the
Trust to indicate whether it authorizes the Custodian to provide the Trust's
name, address, and share position to requesting companies whose securities the
Trust owns. If the Trust tells the Custodian "no", the Custodian will not
provide this information to requesting companies. If the Trust tells the
Custodian "yes" or does not check either "yes" or "no" below, the Custodian is
required by the rule to treat the Trust as consenting to disclosure of this
information for all securities owned by the Trust or any funds or accounts
established by the Trust. For the Trust's protection, the Rule prohibits he
requesting company from using the Trust's name and address for any purpose other
than corporate communications. Please indicate below whether the Trust consents
or objects by checking one of the alternatives below.
YES [ ] The Custodian is authorized to release the Trust's name,
address, and share positions.
NO [ ] The Custodian is not authorized to release the Trust's name,
address, and share positions.
[The remainder of this page is intentionally left blank.]
17
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the day of , 1999.
ATTEST STATE STREET MASTER TRUST
By
- ---------------------------------- ---------------------------------
ATTEST STATE STREET BANK AND TRUST COMPANY
By
- ---------------------------------- ---------------------------------
Executive Vice President
<PAGE>
FUNDS TRANSFER ADDENDUM
[LOGO]
OPERATING GUIDELINES
1. OBLIGATION OF THE SENDER: State Street is authorized to promptly debit
Client's (as named below) account(s) upon the receipt of a payment order in
compliance with the selected Security Procedure chosen for funds transfer and in
the amount of money that State Street has been instructed to transfer. State
Street shall execute payment orders in compliance with the Security Procedure
and with the Client's instructions on the execution date provided that such
payment order is received by the customary deadline for processing such a
request, unless the payment order specifies a later time. All payment orders and
communications received after this time will be deemed to have been received on
the next business day.
2. SECURITY PROCEDURE: The Client acknowledges that the Security Procedure it
has designated on the Selection Form was selected by the Client from Security
Procedures offered by State Street. The Client shall restrict access to
confidential information relating to the Security Procedure to authorized
persons as communicated in writing to State Street. The Client must notify State
Street immediately if it has reason to believe unauthorized persons may have
obtained access to such information or of any change in the Client's authorized
personnel. State Street shall verify the authenticity of all instructions
according to the Security Procedure.
3. ACCOUNT NUMBERS: State Street shall process all payment orders on the basis
of the account number contained in the payment order. In the event of a
discrepancy between any name indicated on the payment order and the account
number, the account number shall take precedence and govern.
4. REJECTION: State Street reserves the right to decline to process or delay
the processing of a payment order which (a) is in excess of the collected
balance in the account to be charged at the time of State Street's receipt of
such payment order; (b) if initiating such payment order would cause State
Street, in State Street's sole judgment, to exceed any volume, aggregate dollar,
network, time, credit or similar limits upon wire transfers which are applicable
to State Street; or (c) if State Street, in good faith, is unable to satisfy
itself that the transaction has been properly authorized.
5. CANCELLATION OR AMENDMENT: State Street shall use reasonable efforts to act
on all authorized requests to cancel or amend payment orders received in
compliance with the Security Procedure provided that such requests are received
in a timely manner affording State Street reasonable opportunity to act.
However, State Street assumes no liability if the request for amendment or
cancellation cannot be satisfied.
6. ERRORS: State Street shall assume no responsibility for failure to detect
any erroneous payment order provided that State Street complies with the payment
order instructions as received and State Street complies with the Security
Procedure. The Security Procedure is established for the purpose of
authenticating payment orders only and not for the detection of errors in
payment orders.
7. INTEREST AND LIABILITY LIMITS: State Street shall assume no responsibility
for lost interest with respect to the refundable amount of any unauthorized
payment order, unless State Street is notified of the unauthorized payment order
within thirty (30) days of notification by State Street of the acceptance of
such payment order. In no event shall State Street be liable for special,
indirect or consequential damages, even if advised of the possibility of such
damages and even for failure to execute a payment order.
8. AUTOMATED CLEARING HOUSE ("ACH") CREDIT ENTRIES/PROVISIONAL PAYMENTS: When
a Client initiates or receives ACH credit and debit entries pursuant to these
Guidelines and the rules of the National Automated Clearing House Association
and the New England Clearing House Association, State Street will act as an
Originating Depository Financial Institution and/or Receiving Depository
Institution, as the case may be, with respect to such entries. Credits given by
State Street with respect to an ACH credit entry are provisional until State
Street receives final settlement for such entry from the Federal Reserve Bank.
If State Street does not receive such final settlement, the Client agrees that
State Street shall receive a refund of the amount credited to the Client in
connection with such entry, and the party making payment to the Client via such
entry shall not be deemed to have paid the amount of the entry.
<PAGE>
FUNDS TRANSFER ADDENDUM
[LOGO]
9. CONFIRMATION STATEMENTS: Confirmation of State Street's execution of
payment orders shall ordinarily be provided within 24 hours notice which may
be delivered through State Street's proprietary information systems, such as,
but not limited to Horizon and GlobalQuest-Registered Trademark-, or by
facsimile or callback. The Client must report any objections to the execution
of a payment order within 30 days.
<PAGE>
FUNDS TRANSFER ADDENDUM
[LOGO]
SECURITY PROCEDURE(S) SELECTION FORM
Please select one or more of the funds transfer security procedures indicated
below.
/ / SWIFT
SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a
cooperative society owned and operated by member financial institutions that
provides telecommunication services for its membership. Participation is limited
to securities brokers and dealers, clearing and depository institutions,
recognized exchanges for securities, and investment management institutions.
SWIFT provides a number of security features through encryption and
authentication to protect against unauthorized access, loss or wrong delivery of
messages, transmission errors, loss of confidentiality and fraudulent changes to
messages. SWIFT is considered to be one of the most secure and efficient
networks for the delivery of funds transfer instructions.
SELECTION OF THIS SECURITY PROCEDURE WOULD BE MOST APPROPRIATE FOR EXISTING
SWIFT MEMBERS.
/ / STANDING INSTRUCTIONS
Standing Instructions may be used where funds are transferred to a broker on the
Client's established list of brokers with which it engages in foreign exchange
transactions. Only the date, the currency and the currency amount are variable.
In order to establish this procedure, State Street will send to the Client a
list of the brokers that State Street has determined are used by the Client. The
Client will confirm the list in writing, and State Street will verify the
written confirmation by telephone. Standing Instructions will be subject to a
mutually agreed upon limit. If the payment order exceeds the established limit,
the Standing Instruction will be confirmed by telephone prior to execution.
/ / REMOTE BATCH TRANSMISSION
Wire transfer instructions are delivered via Computer-to-Computer (CPU-CPU) data
communications between the Client and State Street. Security procedures include
encryption and or the use of a test key by those individuals authorized as
Automated Batch Verifiers.
CLIENTS SELECTING THIS OPTION SHOULD HAVE AN EXISTING FACILITY FOR COMPLETING
CPU-CPU TRANSMISSIONS. THIS DELIVERY MECHANISM IS TYPICALLY USED FOR HIGH-VOLUME
BUSINESS.
/ / GLOBAL HORIZON INTERCHANGE-SM- FUNDS TRANSFER SERVICE
Global Horizon Interchange Funds Transfer Service (FTS) is a State Street
proprietary microcomputer-based wire initiation system. FTS enables Clients to
electronically transmit authenticated Fedwire, CHIPS or internal book transfer
instructions to State Street.
THIS DELIVERY MECHANISM IS MOST APPROPRIATE FOR CLIENTS WITH A LOW-TO-MEDIUM
NUMBER OF TRANSACTIONS (5-75 PER DAY), ALLOWING CLIENTS TO ENTER, BATCH, AND
REVIEW WIRE TRANSFER INSTRUCTIONS ON THEIR PC PRIOR TO RELEASE TO STATE STREET.
/ / TELEPHONE CONFIRMATION (CALLBACK)
Telephone confirmation will be used to verify all non-repetitive funds transfer
instructions received via untested facsimile or phone. This procedure requires
Clients to designate individuals as authorized initiators and authorized
verifiers. State Street will verify that the instruction contains the signature
of an authorized person and prior to execution, will contact someone other than
the originator at the Client's location to authenticate the instruction.
SELECTION OF THIS ALTERNATIVE IS APPROPRIATE FOR CLIENTS WHO DO NOT HAVE THE
CAPABILITY TO USE OTHER SECURITY PROCEDURES.
/ / REPETITIVE WIRES
For situations where funds are transferred periodically (minimum of one
instruction per calendar quarter) from an existing authorized account to the
same payee (destination bank and account number) and only the date and currency
amount are variable, a repetitive wire may be implemented. Repetitive wires will
be subject to a mutually agreed upon limit. If the payment order exceeds the
established limit, the instruction will be confirmed by telephone prior to
execution. Telephone confirmation is used to establish this process. Repetitive
wire instructions must be reconfirmed annually.
THIS ALTERNATIVE IS RECOMMENDED WHENEVER FUNDS ARE FREQUENTLY TRANSFERRED
BETWEEN THE SAME TWO ACCOUNTS.
<PAGE>
FUNDS TRANSFER ADDENDUM
/ / TRANSFERS INITIATED BY FACSIMILE
[LOGO]
The Client faxes wire transfer instructions directly to State Street Mutual Fund
Services. Standard security procedure requires the use of a random number test
key for all transfers. Every six months the Client receives test key logs from
State Street. The test key contains alpha-numeric characters, which the Client
puts on each document faxed to State Street. This procedure ensures all wire
instructions received via fax are authorized by the Client.
WE PROVIDE THIS OPTION FOR CLIENTS WHO WISH TO BATCH WIRE INSTRUCTIONS AND
TRANSMIT THESE AS A GROUP TO STATE STREET MUTUAL FUND SERVICES ONCE OR SEVERAL
TIMES A DAY.
/ / AUTOMATED CLEARING HOUSE (ACH)
State Street receives an automated transmission or a magnetic tape from a Client
for the initiation of payment (credit) or collection (debit) transactions
through the ACH network. The transactions contained on each transmission or tape
must be authenticated by the Client. Clients using ACH must select one or more
of the following delivery options:
<PAGE>
FUNDS TRANSFER ADDENDUM
[LOGO]
/ / GLOBAL HORIZON INTERCHANGE AUTOMATED CLEARING HOUSE SERVICE
Transactions are created on a microcomputer, assembled into batches and
delivered to State Street via fully authenticated electronic transmissions in
standard NACHA formats.
/ / Transmission from Client PC to State Street Mainframe with Telephone
Callback
/ / Transmission from Client Mainframe to State Street Mainframe with Telephone
Callback
/ / Transmission from DST Systems to State Street Mainframe with Encryption
/ / Magnetic Tape Delivered to State Street with Telephone Callback
State Street is hereby instructed to accept funds transfer instructions only via
the delivery methods and security procedures indicated. The selected delivery
methods and security procedure(s) will be effective _______________ for payment
orders initiated by our organization.
KEY CONTACT INFORMATION
Whom shall we contact to implement your selection(s)?
CLIENT OPERATIONS CONTACT ALTERNATE CONTACT
- --------------------------------- ----------------------------------
Name Name
- --------------------------------- ----------------------------------
Address Address
- --------------------------------- ----------------------------------
City/State/Zip Code City/State/Zip Code
- --------------------------------- ----------------------------------
Telephone Number Telephone Number
- --------------------------------- ----------------------------------
Facsimile Number Facsimile Number
- ---------------------------------
SWIFT Number
- ---------------------------------
Telex Number
<PAGE>
INSTRUCTION(S)
TELEPHONE CONFIRMATION
CLIENT State Street Master Trust
-----------------------------------------------------------------------
INVESTMENT MANAGER State Street Bank and Trust Company
-----------------------------------------------------------
AUTHORIZED INITIATORS
Please Type or Print
PLEASE PROVIDE A LISTING OF YOUR STAFF MEMBERS WHO ARE CURRENTLY AUTHORIZED TO
INITIATE WIRE TRANSFER INSTRUCTIONS TO STATE STREET:
NAME TITLE (SPECIFY WHETHER POSITION SPECIMEN SIGNATURE
IS WITH CLIENT OR INVESTMENT
MANAGER)
- ------------------------ ------------------------------- ---------------------
- ------------------------ ------------------------------- ---------------------
- ------------------------ ------------------------------- ---------------------
- ------------------------ ------------------------------- ---------------------
- ------------------------ ------------------------------- ---------------------
<PAGE>
FUNDS TRANSFER ADDENDUM
[LOGO]
AUTHORIZED VERIFIERS
Please Type or Print
PLEASE PROVIDE A LISTING OF YOUR STAFF MEMBERS WHO WILL BE CALLED BACK TO VERIFY
THE INITIATION OF REPETITIVE WIRES OF $10 MILLION OR MORE AND ALL NON REPETITIVE
WIRE INSTRUCTIONS:
NAME CALLBACK PHONE NUMBER DOLLAR LIMITATION (IF ANY)
- ------------------------ -------------------------- ---------------------------
- ------------------------ -------------------------- ---------------------------
- ------------------------ -------------------------- ---------------------------
- ------------------------ -------------------------- ---------------------------
- ------------------------ -------------------------- ---------------------------
<PAGE>
DATA ACCESS SERVICES ADDENDUM TO CUSTODIAN AGREEMENT
AGREEMENT between State Street Master Trust (the "Customer") and State
Street Bank and Trust Company ("State Street").
PREAMBLE
WHEREAS, State Street has been appointed as custodian of certain assets
of the Customer pursuant to a certain Custodian Agreement (the "Custodian
Agreement") dated as of ________________, 1998;
WHEREAS, State Street has developed and utilizes proprietary
accounting and other systems, including State Street's proprietary
Multicurrency HORIZON-SM- Accounting System, in its role as custodian of the
Customer, and maintains certain Customer-related data ("Customer Data") in
databases under the control and ownership of State Street (the "Data Access
Services"); and
WHEREAS, State Street makes available to the Customer certain Data
Access Services solely for the benefit of the Customer, and intends to provide
additional services, consistent with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and for other good and valuable consideration, the parties
agree as follows:
1. SYSTEM AND DATA ACCESS SERVICES
(a) SYSTEM. Subject to the terms and conditions of this Agreement,
State Street hereby agrees to provide the Customer with access to State Street's
Multicurrency HORIZON-SM- Accounting System and the other information systems
(collectively, the "System") as described in Attachment A, on a remote basis for
the purpose of obtaining reports and information, solely on computer hardware,
system software and telecommunication links as listed in Attachment B (the
"Designated Configuration") of the Customer, or certain third parties approved
by State Street that serve as independent auditors, investment advisors or
investment managers ("Investment Advisor"), or in other service capacities, of
the Customer or other third parties such as the Customer's independent auditors,
solely with respect to the Customer or on any designated substitute or back-up
equipment configuration with State Street's written consent, such consent not to
be unreasonably withheld.
(b) DATA ACCESS SERVICES. State Street agrees to make available to the
Customer the Data Access Services subject to the terms and conditions of this
Agreement and data access operating standards and procedures as may be issued by
State Street from time to time. The ability of the Customer to originate
electronic instructions to State Street on behalf of the Customer in order to
(i) effect the transfer or movement of cash or securities held under custody by
State Street or (ii) transmit accounting or other information (such transactions
are referred to herein as "Client Originated Electronic Financial
Instructions"), and (iii) access data for the purpose of reporting and analysis,
shall be deemed to be Data Access Services for purposes of this Agreement.
<PAGE>
(c) ADDITIONAL SERVICES. State Street may from time to time agree to
make available to the Customer additional Systems that are not described in the
attachments to this Agreement. In the absence of any other written agreement
concerning such additional systems, the term "System" shall include, and this
Agreement shall govern, the Customer's access to and use of any additional
System made available by State Street and/or accessed by the Customer.
2. NO USE OF THIRD PARTY SYSTEMS-LEVEL SOFTWARE
State Street and the Customer acknowledge that in connection with the
Data Access Services provided under this Agreement, the Customer will have
access, through the Data Access Services, to Customer Data and to functions of
State Street's proprietary systems; provided, however that in no event will the
Customer have direct access to any third party systems-level software that
retrieves data for, stores data from, or otherwise supports the System.
3. LIMITATION ON SCOPE OF USE
a. DESIGNATED EQUIPMENT; DESIGNATED LOCATION. The System and the Data
Access Services shall be used and accessed solely on and through the Designated
Configuration at the offices of the Customer or the Investment Advisor located
in Boston, Massachusetts ("Designated Location").
b. DESIGNATED CONFIGURATION; TRAINED PERSONNEL. State Street shall be
responsible for supplying, installing and maintaining the Designated
Configuration at the Designated Location. State Street and the Customer agree
that each will engage or retain the services of trained personnel to enable both
parties to perform their respective obligations under this Agreement. State
Street agrees to use commercially reasonable efforts to maintain the System so
that it remains serviceable, provided, however, that State Street does not
guarantee or assure uninterrupted remote access use of the System.
c. SCOPE OF USE. The Customer will use the System and the Data Access
Services only for the processing of securities transactions, the keeping of
books of account for the Customer and accessing data for purposes of reporting
and analysis. The Customer shall not, and shall cause its employees and agents
not to (i) permit any third party to use the System or the Data Access Services,
(ii) sell, rent, license or otherwise use the System or the Data Access Services
in the operation of a service bureau or for any purpose other than as expressly
authorized under this Agreement, (iii) use the System or the Data Access
Services for any fund, trust or other investment vehicle without the prior
written consent of State Street, (iv) allow access to the System or the Data
Access Services through terminals or any other computer or telecommunications
facilities located outside the Designated Locations, (v) allow or cause any
information (other than Fund holdings, valuations of Fund holdings, and other
information reasonably necessary for the management or distribution of the
assets of the Customer) transmitted from State Street's databases, including
data from third party sources, available through use of the System or the Data
Access Services to be redistributed or retransmitted to another computer,
terminal or other device for other than use for or on behalf of the Customer or
(vi) modify the System in any way, including without limitation, developing any
software for or attaching any devices or computer programs to any equipment,
system, software or database which forms a part of or is resident on the
Designated Configuration.
<PAGE>
d. OTHER LOCATIONS. Except in the event of an emergency or of a planned
System shutdown, the Customer's access to services performed by the System or to
Data Access Services at the Designated Location may be transferred to a
different location only upon the prior written consent of State Street. In the
event of an emergency or System shutdown, the Customer may use any back-up site
included in the Designated Configuration or any other back-up site agreed to by
State Street, which agreement will not be unreasonably withheld. The Customer
may secure from State Street the right to access the System or the Data Access
Services through computer and telecommunications facilities or devices complying
with the Designated Configuration at additional locations only upon the prior
written consent of State Street and on terms to be mutually agreed upon by the
parties.
e. TITLE. Title and all ownership and proprietary rights to the System,
including any enhancements or modifications thereto, whether or not made by
State Street, are and shall remain with State Street.
f. NO MODIFICATION. Without the prior written consent of State Street, the
Customer shall not modify, enhance or otherwise create derivative works based
upon the System, nor shall the Customer reverse engineer, decompile or otherwise
attempt to secure the source code for all or any part of the System.
g. SECURITY PROCEDURES. The Customer shall comply with data access
operating standards and procedures and with user identification or other
password control requirements and other security procedures as may be issued
from time to time by State Street for use of the System on a remote basis and to
access the Data Access Services. The Customer shall have access only to the
Customer Data and authorized transactions agreed upon from time to time by State
Street and, upon notice from State Street, the Customer shall discontinue remote
use of the System and access to Data Access Services for any security reasons
cited by State Street; provided, that, in such event, State Street shall, for a
period not less than 180 days (or such other shorter period specified by the
Customer) after such discontinuance, assume responsibility to provide accounting
services under the terms of the Custodian Agreement.
h. INSPECTIONS. State Street shall have the right to inspect the use of
the System and the Data Access Services by the Customer and the Investment
Advisor to ensure compliance with this Agreement. The on-site inspections shall
be upon prior written notice to the Customer and the Investment Advisor and at
reasonably convenient times and frequencies so as not to result in an
unreasonable disruption of the Customer's or the Investment Advisor's business.
4. PROPRIETARY INFORMATION
a. PROPRIETARY INFORMATION. The Customer acknowledges and State Street
represents that the System and the databases, computer programs, screen formats,
report formats, interactive design techniques, documentation and other
information made available to the Customer by State Street as part of the Data
Access Services and through the use of the System constitute copyrighted, trade
secret, or other proprietary information of substantial value to State Street.
Any and all such information provided by State Street to the Customer shall be
deemed proprietary and confidential information of State Street (hereinafter
"Proprietary Information"). The Customer agrees that it will hold such
Proprietary Information in the strictest confidence and secure and protect it in
a
<PAGE>
manner consistent with its own procedures for the protection of its own
confidential information and to take appropriate action by instruction or
agreement with its employees who are permitted access to the Proprietary
Information to satisfy its obligations hereunder. The Customer further
acknowledges that State Street shall not be required to provide the Investment
Advisor with access to the System unless it has first received from the
Investment Advisor an undertaking with respect to State Street's Proprietary
Information in the form of Attachment C to this Agreement. The Customer shall
use all commercially reasonable efforts to assist State Street in identifying
and preventing any unauthorized use, copying or disclosure of the Proprietary
Information or any portions thereof or any of the logic, formats or designs
contained therein.
b. COOPERATION. Without limitation of the foregoing, the Customer shall
advise State Street immediately in the event the Customer learns or has reason
to believe that any person to whom the Customer has given access to the
Proprietary Information, or any portion thereof, has violated or intends to
violate the terms of this Agreement, and the Customer will, at its expense,
co-operate with State Street in seeking injunctive or other equitable relief in
the name of the Customer or State Street against any such person.
c. INJUNCTIVE RELIEF. The Customer acknowledges that the disclosure of any
Proprietary Information, or of any information which at law or equity ought to
remain confidential, will immediately give rise to continuing irreparable injury
to State Street inadequately compensable in damages at law. In addition, State
Street shall be entitled to obtain immediate injunctive relief against the
breach or threatened breach of any of the foregoing undertakings, in addition to
any other legal remedies which may be available.
d. SURVIVAL. The provisions of this Section 4 shall survive the
termination of this Agreement.
5. LIMITATION ON LIABILITY
a. LIMITATION ON AMOUNT AND TIME FOR BRINGING ACTION. The Customer agrees
that any liability of State Street to the Customer or any third party arising
out of State Street's provision of Data Access Services or the System under this
Agreement shall be limited to the amount paid by the Customer for the preceding
24 months for such services. In no event shall State Street be liable to the
Customer or any other party for any special, indirect, punitive or consequential
damages even if advised of the possibility of such damages. No action,
regardless of form, arising out of this Agreement may be brought by the Customer
more than two years after the Customer has knowledge that the cause of action
has arisen.
b. LIMITED WARRANTIES. NO OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE, ARE MADE BY STATE STREET.
c. THIRD-PARTY DATA. Organizations from which State Street may obtain
certain data included in the System or the Data Access Services are solely
responsible for the contents of such data, and State Street shall have no
liability for claims arising out of the contents of such third-party data,
including, but not limited to, the accuracy thereof.
<PAGE>
d. REGULATORY REQUIREMENTS. As between State Street and the Customer, the
Customer shall be solely responsible for the accuracy of any accounting
statements or reports produced using the Data Access Services and the System and
the conformity thereof with any requirements of law.
e. FORCE MAJEURE. Neither party shall be liable for any costs or damages
due to delay or nonperformance under this Agreement arising out of any cause or
event beyond such party's control, including without limitation, cessation of
services hereunder or any damages resulting therefrom to the other party, or the
Customer as a result of work stoppage, power or other mechanical failure,
computer virus, natural disaster, governmental action, or communication
disruption.
6. INDEMNIFICATION
The Customer agrees to indemnify and hold State Street harmless from any loss,
damage or expense including reasonable attorney's fees, (a "loss") suffered by
State Street arising from (i) the negligence or willful misconduct in the use by
the Customer of the Data Access Services or the System, including any loss
incurred by State Street resulting from a security breach at the Designated
Location or committed by the Customer's employees or agents or the Investment
Advisor and (ii) any loss resulting from incorrect Client Originated Electronic
Financial Instructions. State Street shall be entitled to rely on the validity
and authenticity of Client Originated Electronic Financial Instructions without
undertaking any further inquiry as long as such instruction is undertaken in
conformity with security procedures established by State Street from time to
time.
7. FEES
Fees and charges for the use of the System and the Data Access Services and
related payment terms shall be as set forth in the Custody Fee Schedule in
effect from time to time between the parties (the "Fee Schedule"). Any tariffs,
duties or taxes imposed or levied by any government or governmental agency by
reason of the transactions contemplated by this Agreement, including, without
limitation, federal, state and local taxes, use, value added and personal
property taxes (other than income, franchise or similar taxes which may be
imposed or assessed against State Street) shall be borne by the Customer. Any
claimed exemption from such tariffs, duties or taxes shall be supported by
proper documentary evidence delivered to State Street.
8. TRAINING, IMPLEMENTATION AND CONVERSION
a. TRAINING. State Street agrees to provide training, at a designated
State Street training facility or at the Designated Location, to the Customer's
personnel in connection with the use of the System on the Designated
Configuration. The Customer agrees that it will set aside, during regular
business hours or at other times agreed upon by both parties, sufficient time to
enable all operators of the System and the Data Access Services, designated by
the Customer, to receive the training offered by State Street pursuant to this
Agreement.
b. INSTALLATION AND CONVERSION. State Street shall be responsible for the
technical installation and conversion ("Installation and Conversion") of the
Designated Configuration. The Customer shall have the following responsibilities
in connection with Installation and Conversion of the System:
<PAGE>
(i) The Customer shall be solely responsible for the timely
acquisition and maintenance of the hardware and software that
attach to the Designated Configuration in order to use the
Data Access Services at the Designated Location.
(ii) State Street and the Customer each agree that they will assign
qualified personnel to actively participate during the
Installation and Conversion phase of the System implementation
to enable both parties to perform their respective obligations
under this Agreement.
9. SUPPORT
During the term of this Agreement, State Street agrees to provide the
support services set out in Attachment D to this Agreement.
10. TERM OF AGREEMENT
a. TERM OF AGREEMENT. This Agreement shall become effective on the date
of its execution by State Street and shall remain in full force and effect until
terminated as herein provided.
b. TERMINATION OF AGREEMENT. Either party may terminate this Agreement
(i) for any reason by giving the other party at least one-hundred and eighty
days' prior written notice in the case of notice of termination by State Street
to the Customer or thirty days' notice in the case of notice from the Customer
to State Street of termination; or (ii) immediately for failure of the other
party to comply with any material term and condition of the Agreement by giving
the other party written notice of termination. In the event the Customer shall
cease doing business, shall become subject to proceedings under the bankruptcy
laws (other than a petition for reorganization or similar proceeding) or shall
be adjudicated bankrupt, this Agreement and the rights granted hereunder shall,
at the option of State Street, immediately terminate with notice to the
Customer. This Agreement shall in any event terminate as to any Customer within
90 days after the termination of the Custodian Agreement applicable to such
Customer.
c. TERMINATION OF THE RIGHT TO USE. Upon termination of this Agreement for
any reason, any right to use the System and access to the Data Access Services
shall terminate and the Customer shall immediately cease use of the System and
the Data Access Services. Immediately upon termination of this Agreement for any
reason, the Customer shall return to State Street all copies of documentation
and other Proprietary Information in its possession; provided, however, that in
the event that either party terminates this Agreement or the Custodian Agreement
for any reason other than the Customer's breach, State Street shall provide the
Data Access Services for a period of time and at a price to be agreed upon by
the parties.
11. MISCELLANEOUS
a. ASSIGNMENT; SUCCESSORS. This Agreement and the rights and obligations
of the Customer and State Street hereunder shall not be assigned by either party
without the prior written consent of the other party, except that State Street
may assign this Agreement to a successor of all or a
<PAGE>
substantial portion of its business, or to a party controlling, controlled by,
or under common control with State Street.
b. SURVIVAL. All provisions regarding indemnification, warranty,
liability and limits thereon, and confidentiality and/or protection of
proprietary rights and trade secrets shall survive the termination of this
Agreement.
c. ENTIRE AGREEMENT. This Agreement and the attachments hereto
constitute the entire understanding of the parties hereto with respect to the
Data Access Services and the use of the System and supersedes any and all prior
or contemporaneous representations or agreements, whether oral or written,
between the parties as such may relate to the Data Access Services or the
System, and cannot be modified or altered except in a writing duly executed by
the parties. This Agreement is not intended to supersede or modify the duties
and liabilities of the parties hereto under the Custodian Agreement or any other
agreement between the parties hereto except to the extent that any such
agreement specifically refers to the Data Access Services or the System. No
single waiver of any right hereunder shall be deemed to be a continuing waiver.
d. SEVERABILITY. If any provision or provisions of this Agreement shall
be held to be invalid, unlawful, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired.
e. GOVERNING LAW. This Agreement shall be interpreted and construed in
accordance with the internal laws of The Commonwealth of Massachusetts without
regard to the conflict of laws provisions thereof.
<PAGE>
ATTACHMENT A
Multicurrency HORIZON-SM- Accounting System
SYSTEM PRODUCT DESCRIPTION
I. The Multicurrency HORIZON-SM- Accounting System is designed to provide
lot level Fund and general ledger accounting for SEC and ERISA type requirements
and includes the following services: 1) recording of general ledger entries; 2)
calculation of daily income and expense; 3) reconciliation of daily activity
with the trial balance, and 4) appropriate automated feeding mechanisms to (i)
domestic and international settlement systems, (ii) daily, weekly and monthly
evaluation services, (iii) Fund performance and analytic services, (iv)
customer's internal computing systems and (v) various State Street provided
information services products.
II. GlobalQuest-Registered Trademark- is designed to provide customer
access to the following information maintained on The Multicurrency HORIZON-SM-
Accounting System: 1) cash transactions and balances; 2) purchases and sales;
3) income receivables; 4) tax reFund receivables; 5) daily priced positions;
6) open trades; 7) settlement status; 8) foreign exchange transactions; 9)
trade history, and 10) daily, weekly and monthly evaluation services.
III. HORIZON-Registered Trademark- GATEWAY. HORIZON-Registered
Trademark- Gateway provides customers with the ability to (i) generate
reports using information maintained on the Multicurrency HORIZON-Registered
Trademark- Accounting System which may be viewed or printed at the customer's
location; (ii) extract and download data from the Multicurrency
HORIZON-Registered Trademark- Accounting System; and (iii) access previous
day and historical data. The following information which may be accessed for
these purposes: 1) holdings; 2) holdings pricing; 3) transactions, 4) open
trades; 5) income; 6) general ledger and 7) cash.
IV. SAFIRE-SM-. SaFiRe-SM- is designed to provide the customer with the
ability to prepare its own financial reports by permitting the customer to
access customer information maintained on the Multicurrency
HORIZON-Registered Trademark- Accounting System, to organize such information
in a flexible reporting format and to have such reports printed on the
customer's desktop or by its printing provider.
V. STATE STREET INTERCHANGE. State Street Interchange is an open
information delivery architecture wherein proprietary communication products,
data formats and workstation tools are replaced by industry standards and is
designed to enable the connection of State Street's network to customer
networks, thereby facilitating the sharing of information.
<PAGE>
ATTACHMENT B
DESIGNATED CONFIGURATION
ATTACHMENT B
ADVISOR/SUBADVISOR
[ICON] Software is installed for access. [GRAPHIC]
Click on icon for access.
DIAL UP ACCESS
CONFIGURATION
<PAGE>
ATTACHMENT C
UNDERTAKING
The Undersigned understands that in the course of its employment as
Investment Advisor to STATE STREET MASTER TRUST (the "Customer") it will have
access to State Street Bank and Trust Company's ("State Street") Multicurrency
HORIZON-SM- Accounting System and other information systems (collectively, the
"System").
The Undersigned acknowledges that the System and the databases,
computer programs, screen formats, report formats, interactive design
techniques, documentation and other information made available to the
Undersigned by State Street as part of the Data Access Services provided to the
Customer and through the use of the System constitute copyrighted, trade secret,
or other proprietary information of substantial value to State Street. Any and
all such information provided by State Street to the Undersigned shall be deemed
proprietary and confidential information of State Street (hereinafter
"Proprietary Information"). The Undersigned agrees that it will hold such
Proprietary Information in confidence and secure and protect it in a manner
consistent with its own procedures for the protection of its own confidential
information and to take appropriate action by instruction or agreement with its
employees who are permitted access to the Proprietary Information to satisfy its
obligations hereunder.
The Undersigned will not attempt to intercept data, gain access to data
in transmission, or attempt entry into any system or files for which it is not
authorized. It will not intentionally adversely affect the integrity of the
System through the introduction of unauthorized code or data, or through
unauthorized deletion.
Upon notice by State Street for any reason, any right to use the System
and access to the Data Access Services shall terminate and the Undersigned shall
immediately cease use of the System and the Data Access Services. Immediately
upon notice by State Street for any reason, the Undersigned shall return to
State Street all copies of documentation and other Proprietary Information in
its possession.
State Street Global Advisors, Inc.
By:
-------------------------------------
Title:
----------------------------------
Date:
----------------------------------
<PAGE>
ATTACHMENT D
SUPPORT
During the term of this Agreement, State Street agrees to provide the
following on-going support services:
a. TELEPHONE SUPPORT. The Customer Designated Persons may contact State
Street's Multicurrency HORIZON-SM- Help Desk and Customer Assistance Center
between the hours of 8 a.m. and 6 p.m. (Eastern time) on all business days for
the purpose of obtaining answers to questions about the use of the System, or to
report apparent problems with the System. From time to time, the Customer shall
provide to State Street a list of persons, not to exceed five in number, who
shall be permitted to contact State Street for assistance (such persons being
referred to as "the Customer Designated Persons").
b. TECHNICAL SUPPORT. State Street will provide technical support to
assist the Customer in using the System and the Data Access Services. The total
amount of technical support provided by State Street shall not exceed 10
resource days per year. State Street shall provide such additional technical
support as is expressly set forth in the fee schedule in effect from time to
time between the parties (the "Fee Schedule"). Technical support, including
during installation and testing, is subject to the fees and other terms set
forth in the Fee Schedule.
c. MAINTENANCE SUPPORT. State Street shall use commercially reasonable
efforts to correct system functions that do not work according to the System
Product Description as set forth on Attachment A in priority order in the next
scheduled delivery release or otherwise as soon as is practicable.
d. SYSTEM ENHANCEMENTS. State Street will provide to the Customer any
enhancements to the System developed by State Street and made a part of the
System; provided that, sixty (60) days prior to installing any such enhancement,
State Street shall notify the Customer and shall offer the Customer reasonable
training on the enhancement. Charges for system enhancements shall be as
provided in the Fee Schedule. State Street retains the right to charge for
related systems or products that may be developed and separately made available
for use other than through the System.
e. CUSTOM MODIFICATIONS. In the event the Customer desires custom
modifications in connection with its use of the System, the Customer shall make
a written request to State Street providing specifications for the desired
modification. Any custom modifications may be undertaken by State Street in its
sole discretion in accordance with the Fee Schedule.
f. LIMITATION ON SUPPORT. State Street shall have no obligation to
support the Customer's use of the System: (i) for use on any computer equipment
or telecommunication facilities which does not conform to the Designated
Configuration or (ii) in the event the Customer has modified the System in
breach of this Agreement.
<PAGE>
ADMINISTRATION AGREEMENT
Agreement dated as of ________________ by and between State Street
Bank and Trust Company, a Massachusetts trust company (the "Administrator"), and
State Street Master Trust (the "Trust").
WHEREAS, the Trust is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Trust desires to retain the Administrator to furnish
certain administrative services to the Trust, and the Administrator is willing
to furnish such services, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto agree as follows:
1. APPOINTMENT OF ADMINISTRATOR
The Trust hereby appoints the Administrator to act as administrator
with respect to the Trust for purposes of providing certain administrative
services for the period and on the terms set forth in this Agreement. The
Administrator accepts such appointment and agrees to render the services stated
herein.
The Trust will initially consist of the Funds listed in Schedule A to
this Agreement. In the event that the Trust establishes one or more additional
Funds with respect to which it wishes to retain the Administrator to act as
administrator hereunder, the Trust shall notify the Administrator in writing.
Upon written acceptance by the Administrator, such Fund shall become subject to
the provisions of this Agreement to the same extent as the existing Funds,
except to the extent that such provisions (including those relating to the
compensation and expenses payable by the Trust and its Funds) may be modified
with respect to each additional Fund in writing by the Trust and the
Administrator at the time of the addition of the Fund.
2. DELIVERY OF DOCUMENTS
The Trust will promptly deliver to the Administrator copies of each of
the following documents and all future amendments and supplements, if any:
a. The Trust's Declaration of Trust;
<PAGE>
b. The Trust's currently effective registration statement
under the 1940 Act and the Trust's Prospectus(es) and
Statement(s) of Additional Information relating to all
Funds and all amendments and supplements thereto as in
effect from time to time;
c. Certified copies of the resolutions of the Board of
Trustees of the Trust (the "Board") authorizing (1) the
Trust to enter into this Agreement and (2) certain
individuals on behalf of the Trust to (a) give
instructions to the Administrator pursuant to this
Agreement and (b) sign checks and pay expenses;
d. A copy of the investment advisory agreement between the
Trust and its investment adviser;
e. A copy of the distribution agreement between the Trust
and its distributor; and
f. Such other certificates, documents or opinions which
the Administrator may, in its reasonable discretion,
deem necessary or appropriate in the proper performance
of its duties.
3. REPRESENTATIONS AND WARRANTIES OF THE ADMINISTRATOR
The Administrator represents and warrants to the Trust
that:
a. It is a Massachusetts trust company, duly organized and
existing under the laws of The Commonwealth of
Massachusetts;
b. It has the corporate power and authority to carry on
its business in The Commonwealth of Massachusetts;
c. All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement;
d. No legal or administrative proceedings have been
instituted or threatened which would impair the
Administrator's ability to perform its duties and
obligations under this Agreement; and
e. Its entrance into this Agreement shall not cause a
material breach or be in material conflict with any
other agreement or obligation of the Administrator or
any law or regulation applicable to it.
4. REPRESENTATIONS AND WARRANTIES OF THE TRUST
The Trust represents and warrants to the Administrator
that:
a. It is a business trust, duly organized, existing and in
good standing under the laws of The Commonwealth of
Massachusetts;
<PAGE>
b. It has the corporate power and authority under
applicable laws and by its Declaration of Trust and
by-laws to enter into and perform this Agreement;
c. All requisite proceedings have been taken to authorize
it to enter into and perform this Agreement;
d. It is an investment company properly registered under
the 1940 Act;
e. A registration statement under the 1940 Act has been
filed and will be effective and remain effective during
the term of this Agreement. The Trust also warrants to
the Administrator that as of the effective date of this
Agreement, all necessary filings under the securities
laws of the states in which the Trust offers or sells
its shares have been made;
f. No legal or administrative proceedings have been
instituted or threatened which would impair the Trust's
ability to perform its duties and obligations under
this Agreement;
g. Its entrance into this Agreement will not cause a
material breach or be in material conflict with any
other agreement or obligation of the Trust or any law
or regulation applicable to it; and
h. As of the close of business on the date of this
Agreement, the Trust is authorized to issue shares of
beneficial interest, and it will initially offer
shares, in the authorized amounts as set forth in
Schedule A to this Agreement.
5. ADMINISTRATION SERVICES
The Administrator shall provide the following services, in each case,
subject to the control, supervision and direction of the Trust and the review
and comment by the Trust's auditors and legal counsel and in accordance with
procedures which may be established from time to time between the Trust and the
Administrator:
a. Oversee the determination and publication of the
Trust's net asset value in accordance with the Trust's
policy as adopted from time to time by the Board;
b. Oversee the maintenance by the Trust's custodian of
certain books and records of the Trust as required
under Rule 31a-1(b) of the 1940 Act;
c. Prepare the Trust's federal, state and local income tax
returns for review by the Trust's independent
accountants and filing by the Trust's treasurer;
d. Review calculation, submit for approval by officers of
the Trust and arrange for payment of the Trust's
expenses;
<PAGE>
e. Prepare for review and approval by officers of the
Trust financial information for the Trust's semi-annual
and annual reports, proxy statements and other
communications required or otherwise to be sent to
Trust interest holders, and arrange for the printing
and dissemination of such reports and communications to
record and beneficial shareholders through The
Depository Trust Company;
f. Prepare for review by an officer of and legal counsel
for the Trust the Trust's periodic financial reports
required to be filed with the Securities and Exchange
Commission ("SEC") on Form N-SAR and financial
information required by Form N-1A and such other
reports, forms or filings as may be mutually agreed
upon;
g. Prepare reports relating to the business and affairs of
the Trust as may be mutually agreed upon and not
otherwise prepared by the Trust's investment adviser,
custodian, legal counsel or independent accountants;
h. Prepare recommendations as to each Fund's income and
capital gains available for distribution; calculate
such distributions for each Fund in accordance with
applicable regulations and the distribution policies
set forth in the Trust's registration statement, and
assist Trust management in making final determination
of distribution amounts;
i. Make such reports and recommendations to the Board
concerning the performance of the independent
accountants as the Board may reasonably request;
j. Make such reports and recommendations to the Board
concerning the performance and fees of the Trust's
custodian and transfer and dividend disbursing agent
("Transfer Agent") as the Board may reasonably request
or deems appropriate;
k. Oversee and review calculations of fees paid to the
Trust's investment adviser, custodian and Transfer
Agent;
l. Consult with the Trust's officers, independent
accountants, legal counsel, custodian and Transfer
Agent in establishing the accounting policies of the
Trust;
m. Respond to, or refer to the Trust's officers or the
Distributor or the Transfer Agent, shareholder
inquiries relating to the Trust;
n. Provide periodic testing of portfolios to assist the
Trust's investment adviser in complying with Internal
Revenue Code mandatory qualification requirements, the
requirements of the 1940 Act and Trust prospectus
limitations as may be mutually agreed upon;
o. Review and provide assistance on shareholder
communications;
<PAGE>
p. Maintain general corporate calendar;
q. Maintain copies of the Trust's Declaration of Trust and
by-laws;
r. File annual and semi-annual interest holder reports
with the appropriate regulatory agencies; review text
of "President's letters" to interest holders and
"Management's Discussion of Trust Performance" (which
shall also be subject to review by the Trust's legal
counsel);
s. Organize, attend and prepare minutes of shareholder
meetings;
t. Provide consultation on regulatory matters relating to
portfolio management, Trust operations and any
potential changes in the Trust's investment policies,
operations or structure; act as liaison to legal
counsel to the Trust and, where applicable, to legal
counsel to the Trust's independent Board members;
u. Maintain continuing awareness of significant emerging
regulatory and legislative developments which may
affect the Trust, update the Board and the investment
adviser on those developments and provide related
planning assistance where requested or appropriate;
v. Develop or assist in developing guidelines and
procedures to improve overall compliance by the Trust
and its various agents;
w. Counsel and assist the Trust in the handling of routine
regulatory examinations and work closely with the
Trust's legal counsel in response to any non-routine
regulatory matters;
Subject to review and comment by the Trust's legal counsel:
x. Prepare and file with the SEC amendments to the Trust's
registration statement, including updating the
Prospectus and Statement of Additional Information,
where applicable;
y. Prepare and file with the SEC proxy statements; provide
consultation on proxy solicitation matters;
z. Prepare agenda and background materials for Board
meetings, make presentations where appropriate, prepare
minutes and follow-up on matters raised at Board
meetings;
aa. Prepare and file with the SEC Rule 24f-2 notices;
bb. Perform Blue Sky services pursuant to the specific
instructions of the Trust and as detailed in Schedule B
to this Agreement; and
<PAGE>
The Administrator shall provide the office facilities and the personnel required
by it to perform the services contemplated herein.
6. FEES; EXPENSES; EXPENSE REIMBURSEMENT
The Administrator shall receive from the Trust such compensation for
the Administrator's services provided pursuant to this Agreement as may be
agreed to from time to time in a written fee schedule approved by the parties
and described in the then current Prospectus, and initially set forth as a
"Unitary Fee" in the Custody, Accounting, Transfer Agent, Fund Administration
and Advisory Fee Schedule to this Agreement. The fees are accrued daily and
billed monthly and shall be due and payable upon receipt of the invoice. Upon
the termination of this Agreement before the end of any month, the fee for the
part of the month before such termination shall be prorated according to the
proportion which such part bears to the full monthly period and shall be payable
upon the date of termination of this Agreement. In addition, the Trust shall
reimburse the Administrator for its out-of-pocket costs incurred in connection
with this Agreement.
The Trust agrees promptly to reimburse the Administrator for any
equipment and supplies specially ordered by or for the Trust through the
Administrator and for any other expenses not contemplated by this Agreement that
the Administrator may incur on the Trust's behalf at the Trust's request or with
the Trust's consent.
The Trust will bear all expenses that are incurred in its operation
and not specifically assumed by the Administrator or another party. Expenses to
be borne by the Trust, include, but are not limited to: organizational expenses;
cost of services of independent accountants and outside legal and tax counsel
(including such counsel's review of the Trust's registration statement, proxy
materials, federal and state tax qualification as a regulated investment company
and other reports and materials prepared by the Administrator under this
Agreement); cost of any services contracted for by the Trust directly from
parties other than the Administrator; cost of trading operations and brokerage
fees, commissions and transfer taxes in connection with the purchase and sale of
securities for the Trust; investment advisory fees; taxes, insurance premiums
and other fees and expenses applicable to its operation; costs incidental to any
meetings of shareholders including, but not limited to, legal and accounting
fees, proxy filing fees and the costs of preparation, printing and mailing of
any proxy materials; costs incidental to Board meetings, including fees and
expenses of Board members; the salary and expenses of any officer,
director\trustee or employee of the Trust; costs incidental to the preparation,
printing and distribution of the Trust's registration statements and any
amendments thereto and shareholder reports; cost of typesetting and printing of
prospectuses; cost of preparation and filing of the Trust's tax returns, Form
N-1A and Form N-SAR, and all notices, registrations and amendments associated
with applicable federal and state tax and securities laws; all applicable
registration fees and filing fees required under federal and state securities
laws; fidelity bond and directors' and officers' liability insurance; and cost
of independent pricing services used in computing the Trust's net asset value.
The Administrator is authorized to and may employ or associate with
such person or persons as the Administrator may deem desirable to assist it in
performing its duties under this Agreement; provided, however, that the
compensation of such person or persons shall be paid by the Administrator and
that the Administrator shall be as fully responsible to the Trust for the acts
and omissions of any such person or
<PAGE>
persons as it is for its own acts and omissions.
7. INSTRUCTIONS AND ADVICE
At any time, the Administrator may apply to any officer of the Trust
for instructions and may consult with its own legal counsel or outside counsel
for the Trust or the independent accountants for the Trust at the expense of the
Trust, with respect to any matter arising in connection with the services to be
performed by the Administrator under this Agreement. The Administrator shall not
be liable, and shall be indemnified by the Trust, for any action taken or
omitted by it in good faith in reliance upon any such instructions or advice or
upon any paper or document believed by it to be genuine and to have been signed
by the proper person or persons. The Administrator shall not be held to have
notice of any change of authority of any person until receipt of written notice
thereof from the Trust. Nothing in this paragraph shall be construed as imposing
upon the Administrator any obligation to seek such instructions or advice, or to
act in accordance with such advice when received.
8. LIMITATION OF LIABILITY AND INDEMNIFICATION
The Administrator shall be responsible for the performance of only
such duties as are set forth in this Agreement and, except as otherwise provided
under Section 6, shall have no responsibility for the actions or activities of
any other party, including other service providers. The Administrator shall have
no liability for any error of judgment or mistake of law or for any loss or
damage resulting from the performance or nonperformance of its duties hereunder
unless solely caused by or resulting from the gross negligence or willful
misconduct of the Administrator, its officers or employees. The Administrator
shall not be liable for any special, indirect, incidental, or consequential
damages of any kind whatsoever (including, without limitation, attorneys' fees)
under any provision of this Agreement or for any such damages arising out of any
act or failure to act hereunder. In any event, the Administrator's liability
under this Agreement shall be limited to two times its total annual compensation
earned and fees paid hereunder during the preceding twelve months for any
liability or loss suffered by the Trust including, but not limited to, any
liability relating to qualification of the Trust as a regulated investment
company or any liability relating to the Trust's compliance with any federal or
state tax or securities statute, regulation or ruling.
The Administrator shall not be responsible or liable for any failure
or delay in performance of its obligations under this Agreement arising out of
or caused, directly or indirectly, by circumstances beyond its control,
including without limitation, work stoppage, power or other mechanical failure,
computer virus, natural disaster, governmental action or communication
disruption.
The Trust shall indemnify and hold the Administrator harmless from all
loss, cost, damage and expense, including reasonable fees and expenses for
counsel, incurred by the Administrator resulting from any claim, demand, action
or suit in connection with the Administrator's acceptance of this Agreement, any
action or omission by it in the performance of its duties hereunder, or as a
result of acting upon any instructions reasonably believed by it to have been
duly authorized by the Trust, provided that this indemnification shall not apply
to actions or omissions of the Administrator, its officers or employees in cases
of its or their own gross negligence or willful misconduct.
The indemnification contained herein shall survive the termination of
this Agreement.
<PAGE>
9. CONFIDENTIALITY
The Administrator agrees that, except as otherwise required by law or
in connection with any required disclosure to a banking or other regulatory
authority, it will keep confidential all records and information in its
possession relating to the Trust or its shareholders or shareholder accounts and
will not disclose the same to any person except at the request or with the
written consent of the Trust.
10. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS; RECORDS
The Trust assumes full responsibility for complying with all
securities, tax, commodities and other laws, rules and regulations applicable to
it.
In compliance with the requirements of Rule 31a-3 under the 1940 Act,
the Administrator agrees that all records which it maintains for the Trust shall
at all times remain the property of the Trust, shall be readily accessible
during normal business hours, and shall be promptly surrendered upon the
termination of the Agreement or otherwise on written request. The Administrator
further agrees that all records which it maintains for the Trust pursuant to
Rule 31a-1 under the 1940 Act will be preserved for the periods prescribed by
Rule 31a-2 under the 1940 Act unless any such records are earlier surrendered as
provided above. Records shall be surrendered in usable machine-readable form.
11. SERVICES NOT EXCLUSIVE
The services of the Administrator to the Trust are not to be deemed
exclusive, and the Administrator shall be free to render similar services to
others. The Administrator shall be deemed to be an independent contractor and
shall, unless otherwise expressly provided herein or authorized by the Trust
from time to time, have no authority to act or represent the Trust in any way or
otherwise be deemed an agent of the Trust.
12. TERM, TERMINATION AND AMENDMENT
This Agreement shall become effective on the date of its execution and
shall remain in full force and effect from the effective date for an initial
term of two years from the effective date and shall automatically continue in
full force and effect after such initial term unless either party terminates
this Agreement by written notice to the other party at least sixty (60) days
prior to the expiration of the initial term. Either party may terminate this
Agreement at any time after the initial term upon at least sixty (60) days'
prior written notice to the other party. Termination of this Agreement with
respect to any given Fund shall in no way affect the continued validity of this
Agreement with respect to any other Fund. Upon termination of this Agreement,
the Trust shall pay to the Administrator such compensation and any reimbursable
expenses as may be due under the terms hereof as of the date of such
termination, including reasonable out-of-pocket expenses associated with such
termination. This Agreement may be modified or amended from time to time by
mutual written agreement of the parties hereto.
<PAGE>
13. NOTICES
Any notice or other communication authorized or required by this
Agreement to be given to either party shall be in writing and deemed to have
been given when delivered in person or by confirmed facsimile, or posted by
certified mail, return receipt requested, to the following address (or such
other address as a party may specify by written notice to the other): if to
the Trust: , Attn: , fax: ; if to the
Administrator: State Street Bank and Trust Company, 2 Avenue De Lafayette,
Boston, Massachusetts 02111, Attn: Fund Administration Legal Department, fax:
617-537-2578.
14. NON-ASSIGNABILITY
This Agreement shall not be assigned by either party hereto without
the prior consent in writing of the other party, except that the Administrator
may assign this Agreement to a successor of all or a substantial portion of its
business, or to a party controlling, controlled by or under common control with
the Administrator.
15. SUCCESSORS
This Agreement shall be binding on and shall inure to the benefit of
the Trust and the Administrator and their respective successors and permitted
assigns.
16. ENTIRE AGREEMENT
This Agreement contains the entire understanding between the parties
hereto with respect to the subject matter hereof and supersedes all previous
representations, warranties or commitments regarding the services to be
performed hereunder whether oral or in writing.
17. WAIVER
The failure of a party to insist upon strict adherence to any term of
this Agreement on any occasion shall not be considered a waiver nor shall it
deprive such party of the right thereafter to insist upon strict adherence to
that term or any term of this Agreement. Any waiver must be in writing signed by
the waiving party.
18. SEVERABILITY
If any provision of this Agreement is invalid or unenforceable, the
balance of the Agreement shall remain in effect, and if any provision is
inapplicable to any person or circumstance it shall nevertheless remain
applicable to all other persons and circumstances.
19. GOVERNING LAW
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of The Commonwealth of
Massachusetts.
<PAGE>
20. REPRODUCTION OF DOCUMENTS
This Agreement and all schedules, exhibits, attachments and amendments
hereto may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties hereto
all/each agree that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not the
original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.
20. LIMITATION OF LIABILITY
The Declaration of Trust dated July 27, 1999, establishing the Trust,
which is hereby referred to and a copy of which is on file with the Secretary of
The Commonwealth of Massachusetts, provides that the name State Street Master
Trust means the Trustees from time to time serving (as Trustees but not
personally) under such Declaration of Trust. It is expressly acknowledged and
agreed that the obligations of the Trust hereunder shall not be binding upon any
of the shareholders, Trustees, officers, employees or agents of the Trust,
personally, but shall bind only the trust property of the Trust, as provided in
its Declaration of Trust. The execution and delivery of this Agreement have been
authorized by the Trustees of the Trust and signed by an officer of the Trust,
acting as such, and neither such authorization by such Trustees nor such
execution and delivery by such officer shall be deemed to have been made by any
of them individually or to impose any liability on any of them personally, but
shall bind only the trust property of the Trust as provided in its Declaration
of Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date first written above.
STATE STREET MASTER TRUST
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
STATE STREET BANK AND TRUST COMPANY
By:
---------------------------------
Name: Kathleen C. Cuocolo
---------------------------------
Title: Senior Vice President
---------------------------------
<PAGE>
ADMINISTRATION AGREEMENT
- --------------------------------------------------------------------------------
SCHEDULE A
- --------------------------------------------------------------------------------
LISTING OF FUNDS AND AUTHORIZED INTERESTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FUND AUTHORIZED INTERESTS
- --------------------------------------------------------------------------------
State Street Equity 500 Index Portfolio Unlimited
- --------------------------------------------------------------------------------
State Street Equity 2000 Index Portfolio Unlimited
- --------------------------------------------------------------------------------
State Street Equity 400 Index Portfolio Unlimited
- --------------------------------------------------------------------------------
State Street EAFE Index Portfolio Unlimited
- --------------------------------------------------------------------------------
State Street Aggregate Bond Index Portfolio Unlimited
- --------------------------------------------------------------------------------
<PAGE>
ADMINISTRATION AGREEMENT
SCHEDULE B
NOTICE FILING WITH
STATE SECURITIES ADMINISTRATORS
AT THE SPECIFIC DIRECTION OF THE TRUST, THE ADMINISTRATOR WILL PREPARE REQUIRED
DOCUMENTATION AND MAKE NOTICE FILINGS IN ACCORDANCE WITH THE SECURITIES LAWS OF
EACH JURISDICTION IN WHICH TRUST SHARES ARE TO BE OFFERED OR SOLD PURSUANT TO
INSTRUCTIONS GIVEN TO THE ADMINISTRATOR BY THE TRUST.
THE TRUST SHALL BE SOLELY RESPONSIBLE FOR THE DETERMINATION (I) OF THOSE
JURISDICTIONS IN WHICH NOTICE FILINGS ARE TO BE SUBMITTED AND (II) THE NUMBER OF
TRUST SHARES TO BE PERMITTED TO BE SOLD IN EACH SUCH JURISDICTION. IN THE EVENT
THAT THE ADMINISTRATOR BECOMES AWARE OF (A) THE SALE OF TRUST SHARES IN A
JURISDICTION IN WHICH NO NOTICE FILING HAS BEEN MADE OR (B) THE SALE OF TRUST
SHARES IN EXCESS OF THE NUMBER OF TRUST SHARES PERMITTED TO BE SOLD IN SUCH
JURISDICTION, THE ADMINISTRATOR SHALL REPORT SUCH INFORMATION TO THE TRUST, AND
IT SHALL BE THE TRUST'S RESPONSIBILITY TO DETERMINE APPROPRIATE CORRECTIVE
ACTION AND INSTRUCT THE ADMINISTRATOR WITH RESPECT THERETO.
The Blue Sky services shall consist of the following:
1. Filing of Trust's Initial Notice Filings, as directed by the
Trust;
2. Filing of Trust's renewals and amendments as required;
3. Filing of amendments to the Trust's registration statement where
required;
4. Filing Trust sales reports where required;
5. Payment at the expense of the Trust of all Trust Notice Filing
fees;
6. Filing the Prospectuses and Statements of Additional Information
and any amendments or supplements thereto where required;
7. Filing of annual reports and proxy statements where required; and
8. The performance of such additional services as the Administrator
and the Trust may agree upon in writing.
Unless otherwise specified in writing by the Administrator, Blue Sky services by
the Administrator shall not include determining the availability of exemptions
under a jurisdiction's blue sky law. Any such determination shall be made by the
Trust or its legal counsel. In connection with the services described herein,
the Trust shall issue in favor of the Administrator a power of attorney to
submit Notice Filings on behalf of the Trust, which power of attorney shall be
substantially in the form of Exhibit I attached hereto.
<PAGE>
EXHIBIT I
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, as of _____________________, that State Street
Master Trust with principal offices at 225 Franklin Street, Boston,
Massachusetts 02110 (the "Trust") makes, constitutes, and appoints STATE STREET
BANK AND TRUST COMPANY (the "Administrator") with principal offices at 225
Franklin Street, Boston, Massachusetts its lawful attorney-in-fact for it to do
as if it were itself acting, the following:
1. REGISTRATION OF TRUST SHARES. The power to register shares of each series
of the Trust in each jurisdiction in which each series of Trust shares are
offered or sold and in connection therewith the power to prepare, execute,
and deliver and file any and all Trust applications, including without
limitation, applications to register shares, consents, including consents
to service of process, reports, including without limitation, all periodic
reports, claims for exemption, or other documents and instruments now or
hereafter required or appropriate in the judgment of the Administrator in
connection with the registration of Trust shares.
2. AUTHORIZED SIGNERS. Pursuant to this Limited Power of Attorney, individuals
holding the titles of Officer, Blue Sky Manager, or Senior Blue Sky
Administrator at the Administrator shall have authority to act on behalf of the
Trust with respect to item 1 above.
The execution of this limited power of attorney shall be deemed coupled with an
interest and shall be revocable only upon receipt by the Administrator of such
termination of authority. Nothing herein shall be construed to constitute the
appointment of the Administrator as or otherwise authorize the Administrator to
act as an officer, director or employee of the Trust.
IN WITNESS WHEREOF, the Trust has caused this Agreement to be executed in its
name and on its behalf by and through its duly authorized officer, as of the
date first written above.
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
<PAGE>
LICENSE AGREEMENT
LICENSE AGREEMENT, dated as of___________________________ (the
"Commencement Date") by and between STANDARD & POOR'S, a division of The
McGraw-Hill Companies, Inc. ("S&P"), a New York corporation, having an office at
55 Water Street, New York, NY 10041-0003, and __________________________________
("Licensee"), a _________________________having an office at____________________
____________________ .
WHEREAS, S&P compiles, calculates, maintains and owns rights in and to
the S&P 500 Composite Stock Price Index and to the proprietary data therein
contained (such rights being hereinafter individually and collectively referred
to as the "S&P 500 Index"); and
WHEREAS, S&P uses in commerce and has trade name and trademark
rights to the designations "Standard & Poor's-Registered Trademark-",
"S&P-Registered Trademark-", "S&P 500-Registered Trademark-", "Standard &
Poor's 500", and "500", in connection with the S&P 500 Index (such rights
being hereinafter individually and collectively referred to as the "S&P
Marks"); and
WHEREAS, Licensee wishes to use the S&P 500 Index as a component of the
product or products described in Exhibit A attached hereto and made a part
hereof (individually and collectively referred to as the "Product"); and
WHEREAS, Licensee wishes to use the S&P Marks in connection with the
marketing and/or promotion of the Product and in connection with making
disclosure about the Product under applicable law, rules and regulations in
order to indicate that S&P is the source of the S&P 500 Index; and
<PAGE>
WHEREAS, Licensee wishes to obtain S&P's authorization to use the S&P
500 Index and the S&P Marks in connection with the Product pursuant to the terms
and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto agree as follows:
1. GRANT OF LICENSE.
(a) Subject to the terms and conditions of this Agreement, S&P
hereby grants to Licensee a non-transferable, non-exclusive license (i) to use
the S&P 500 Index as a component of the Product to be marketed and/or promoted
by Licensee and (ii) to use and refer to the S&P Marks in connection with the
distribution, marketing and promotion of the Product (including in the name of
the Product) and in connection with making such disclosure about the Product as
Licensee deems necessary or desirable under any applicable law, rules,
regulations or provisions of this Agreement, but, in each case, only to the
extent necessary to indicate the source of the S&P 500 Index. It is expressly
agreed and understood by Licensee that no rights to use the S&P 500 Index and
the S&P Marks are granted hereunder other than those specifically described and
expressly granted herein.
(b) S&P agrees that no person or entity (other than the
Licensee) shall need to obtain a license from S&P with respect to the Product.
2. TERM.
The term of this Agreement shall commence on the Commencement
Date and shall continue in effect thereafter until it is terminated in
accordance with its terms.
3. LICENSE FEES.
- --------------------------------------------------------------------------------
[inst] -2-
<PAGE>
(a) Licensee shall pay to S&P the license fees ("License
Fees") specified and provide the data called for in Exhibit B, attached hereto
and made a part hereof.
(b) During the term of this Agreement and for a period of one
(1) year after its termination, S&P shall have the right, during normal business
hours and upon reasonable notice to Licensee, to audit on a confidential basis
the relevant books and records of Licensee to determine that License Fees have
been accurately determined. The costs of such audit shall be borne by S&P unless
it determines that it has been underpaid by five percent (5%) or more; in such
case, costs of the audit shall be paid by Licensee.
4. TERMINATION.
(a) At any time during the term of this Agreement, either
party may give the other party sixty (60) days prior written notice of
termination if the terminating party believes in good faith that material damage
or harm is occurring to the reputation or goodwill of that party by reason of
its continued performance hereunder, and such notice shall be effective on the
date specified therein of such termination, unless the other party shall correct
the condition causing such damage or harm within the notice period.
(b) In the case of breach of any of the material terms or
conditions of this Agreement by either party, the other party may terminate this
Agreement by giving sixty (60) days prior written notice of its intent to
terminate, and such notice shall be effective on the date specified therein for
such termination unless the breaching party shall correct such breach within the
notice period.
(c) S&P shall have the right, in its sole discretion, to cease
compilation and publication of the S&P 500 Index and, in such event, to
terminate this Agreement if S&P does not offer a
- --------------------------------------------------------------------------------
[inst] -3-
<PAGE>
replacement or substitute index. In the event that S&P intends to discontinue
the S&P 500 Index, S&P shall give Licensee at least one (1) year's written
notice prior to such discontinuance, which notice shall specify whether a
replacement or substitute index will be made available.
Licensee shall have the option hereunder within sixty (60)
days after receiving such written notice from S&P to notify S&P in writing of
its intent to use the replacement or substitute index, if any, under the terms
of this Agreement. In the event that Licensee does not exercise such option or
no substitute or replacement index is made available, this Agreement shall be
terminated as of the date specified in the S&P notice and the License Fees to
the date of such termination shall be computed as provided in Subsection 4(f).
(d) Licensee may terminate this Agreement upon ninety (90)
days prior written notice to S&P if (i) Licensee is informed of the final
adoption of any legislation or regulation or the issuance of any interpretation
that in Licensee's reasonable judgment materially impairs Licensee's ability to
market and/or promote the Product; (ii) any material litigation or regulatory
proceeding regarding the Product is threatened or commenced; or (iii) Licensee
elects to terminate the public offering or other distribution of the Product, as
may be applicable. In such event the License Fees to the date of such
termination shall be computed as provided in Subsection 4(f).
(e) S&P may terminate this Agreement upon ninety (90) days (or
upon such lesser period of time if required pursuant to a court order) prior
written notice to Licensee if (i) S&P is informed of the final adoption of any
legislation or regulation or the issuance of any interpretation that in S&P's
reasonable judgment materially impairs S&P's ability to license and provide the
S&P 500 Index and S&P Marks under this Agreement in connection with such
Product; or (ii) any litigation or proceeding is
- --------------------------------------------------------------------------------
[inst] -4-
<PAGE>
threatened or commenced and S&P reasonably believes that such litigation or
proceeding would have a material and adverse effect upon the S&P Marks and/or
the S&P 500 Index or upon the ability of S&P to perform under this Agreement. In
such event the License Fees to the date of such termination shall be computed as
provided in Subsection 4(f).
(f) In the event of termination of this Agreement as provided
in Subsections 4(a), (b), (c), (d) or (e), the License Fees to the date of such
termination shall be computed by prorating the amount of the applicable License
Fees shown in Exhibit B on the basis of the number of elapsed days in the
current term.
(g) Upon termination of this Agreement, Licensee shall cease
to use the S&P 500 Index and the S&P Marks in connection with the Product;
provided that Licensee may continue to utilize any previously printed materials
which contain the S&P Marks for a period of ninety (90) days following such
termination.
5. S&P'S OBLIGATIONS.
(a) It is the policy of S&P to prohibit its employees
who are directly responsible for changes in the components of the S&P 500 Index
from purchasing or beneficially owning any interest in the Product and S&P
believes that its employees comply with such policy. Licensee shall have no
responsibility for ensuring that such S&P employees comply with such S&P policy
and shall have no duty to inquire whether any investors or sellers of the
Product are such S&P employees. S&P shall have no liability to the Licensee with
respect to its employees' adherence or failure to adhere to such policy.
(b) S&P shall not and is in no way obliged to engage in any
marketing or promotional activities in connection with the Product or in making
any representation or statement to investors
- --------------------------------------------------------------------------------
[inst] -5-
<PAGE>
or prospective investors in connection with the promotion by Licensee of the
Product.
(c) S&P agrees to provide reasonable support for Licensee's
development and educational efforts with respect to the Product as follows: (i)
S&P shall provide Licensee, upon request but subject to any agreements of
confidentiality with respect thereto, copies of the results of any marketing
research conducted by or on behalf of S&P with respect to the S&P 500 Index; and
(ii) S&P shall respond in a timely fashion to any reasonable requests for
information by Licensee regarding the S&P 500 Index.
(d) S&P or its agent shall calculate and disseminate the S&P
500 Index at least once each fifteen (15) seconds in accordance with its current
procedures, which procedures may be modified by S&P.
(e) S&P shall promptly correct or instruct its agent to
correct any mathematical errors made in S&P's computations of the S&P 500 Index
which are brought to S&P's attention by Licensee, provided that nothing in this
Section 5 shall give Licensee the right to exercise any judgment or require any
changes with respect to S&P's method of composing, calculating or determining
the S&P 500 Index; and, provided further, that nothing herein shall be deemed to
modify the provisions of Section 9 of this Agreement.
6. INFORMATIONAL MATERIALS REVIEW.
Licensee shall use its best efforts to protect the goodwill
and reputation of S&P and of the S&P Marks in connection with its use of the S&P
Marks under this Agreement. Licensee shall submit to S&P for its review and
approval all informational materials pertaining to and to be used in connection
with the Product, including, where applicable, all prospectuses, plans,
registration statements, application forms, contracts, videos, internet sites,
electronic commerce, advertisements, brochures
- --------------------------------------------------------------------------------
[inst] -6-
<PAGE>
and promotional and any other similar informational materials (including
documents required to be filed with governmental or regulatory agencies) that in
any way use or refer to S&P, the S&P 500 Index, or the S&P Marks (the
"Informational Materials"). S&P's approval shall be required with respect to the
use of and description of S&P, the S&P Marks and the S&P 500 Index and shall not
be unreasonably withheld or delayed by S&P. Specifically, S&P shall notify
Licensee of its approval or disapproval of any Informational Materials within
forty-eight (48) hours (excluding Saturday, Sunday and New York Stock Exchange
Holidays) following receipt thereof from Licensee. Any disapproval shall
indicate S&P's reasons therefor. Any failure by S&P to respond within such
forty-eight (48) hour period shall be deemed to constitute a waiver of S&P's
right to review such Informational Materials. Informational Materials shall be
addressed to S&P, c/o Sandra Weinberger, Specialist - Index Licensing/Marketing,
Equity Index Services, at the address specified in Subsection 12(d).
Informational Materials may be submitted via facsimile (to 212-438-3523 or
212-438-3543) if they are less than 20 pages and legible after transmission.
Once Informational Materials have been approved by S&P, subsequent Informational
Materials which do not alter the use or description of S&P, the S&P Marks or the
S&P 500 Index need not be submitted for review and approval by S&P.
7. PROTECTION OF VALUE OF LICENSE.
(a) During the term of this Agreement, S&P shall use its best
efforts to maintain in full force and effect federal registrations for
"Standard & Poor's-Registered Trademark-", "S&P-Registered Trademark-", and
"S&P 500-Registered Trademark-". S&P shall at S&P's own expense and sole
discretion exercise S&P's common law and statutory rights against infringement
of the S&P Marks, copyrights and other proprietary rights.
(b) Licensee shall cooperate with S&P in the maintenance of
such rights and registrations and shall take such actions and execute such
instruments as S&P may from time to time reasonably request, and shall use the
following notice when
- --------------------------------------------------------------------------------
[inst] -7-
<PAGE>
referring to the S&P 500 Index or the S&P Marks in any Informational Material:
"Standard & Poor's-Registered Trademark-", "S&P-Registered
Trademark-", "S&P 500-Registered Trademark-", "Standard &
Poor's 500", and "500", are trademarks of The McGraw-Hill
Companies, Inc. and have been licensed for use by ____________
__________________. The Product is not sponsored, endorsed,
sold or promoted by Standard & Poor's and Standard & Poor's
makes no representation regarding the advisability of
investing in the Product.
or such similar language as may be approved in advance by S&P, it being
understood that such notice need only refer to the specific S&P Marks referred
to in the Informational Material.
8. PROPRIETARY RIGHTS.
(a) Licensee acknowledges that the S&P 500 Index is selected,
coordinated, arranged and prepared by S&P through the application of methods and
standards of judgment used and developed through the expenditure of considerable
work, time and money by S&P. Licensee also acknowledges that the S&P 500 Index
and the S&P Marks are the exclusive property of S&P, that S&P has and retains
all proprietary rights therein (including, but not limited to trademarks and
copyrights) and that the S&P 500 Index and its compilation and composition and
changes therein are in the control and discretion of S&P.
(b) S&P reserves all rights with respect to the S&P 500 Index
and the S&P Marks except those expressly licensed to Licensee hereunder.
(c) Each party shall treat as confidential and shall not
disclose or transmit to any third party any documentation or other written
materials that are marked as "Confidential and Proprietary" by the providing
party ("Confidential Information").
- --------------------------------------------------------------------------------
[inst] -8-
<PAGE>
Confidential Information shall not include (i) any information that is available
to the public or to the receiving party hereunder from sources other than the
providing party (provided that such source is not subject to a confidentiality
agreement with regard to such information) or (ii) any information that is
independently developed by the receiving party without use of or reference to
information from the providing party. Notwithstanding the foregoing, either
party may reveal Confidential Information to any regulatory agency or court of
competent jurisdiction if such information to be disclosed is (a) approved in
writing by the other party for disclosure or (b) required by law, regulatory
agency or court order to be disclosed by a party, provided, if permitted by law,
that prior written notice of such required disclosure is given to the other
party and provided further that the providing party shall cooperate with the
other party to limit the extent of such disclosure. The provisions of this
Subsection 8(c) shall survive any termination of this Agreement for a period of
five (5) years from disclosure by either party to the other of the last item of
such Confidential Information.
9. WARRANTIES; DISCLAIMERS.
(a) S&P represents and warrants that S&P has the right to
grant the rights granted to Licensee herein and that the license granted herein
shall not infringe any trademark, copyright or other proprietary right of any
person not a party to this Agreement.
(b) Licensee agrees expressly to be bound itself by and
furthermore to include all of the following disclaimers and limitations in each
prospectus or each Statement of Additional Information ("SAI") relating to the
Product, provided the SAI is incorporated by reference into the prospectus and
the prospectus contains disclosure regarding the S&P 500 Index that conforms to
the notice in Subsection 7(b), including a cross reference to the SAI
disclosure. Licensee shall furnish a copy of the prospectus and, if applicable,
the SAI, to S&P:
- --------------------------------------------------------------------------------
[inst] -9-
<PAGE>
The Product is not sponsored, endorsed, sold or promoted by
Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"). S&P
makes no representation or warranty, express or implied, to the owners of the
Product or any member of the public regarding the advisability of investing in
securities generally or in the Product particularly or the ability of the S&P
500 Index to track general stock market performance. S&P's only relationship to
the Licensee is the licensing of certain trademarks and trade names of S&P and
of the S&P 500 Index which is determined, composed and calculated by S&P without
regard to the Licensee or the Product. S&P has no obligation to take the needs
of the Licensee or the owners of the Product into consideration in determining,
composing or calculating the S&P 500 Index. S&P is not responsible for and has
not participated in the determination of the prices and amount of the Product or
the timing of the issuance or sale of the Product or in the determination or
calculation of the equation by which the Product is to be converted into cash.
S&P has no obligation or liability in connection with the administration,
marketing or trading of the Product.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF
THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO LIABILITY
FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS OF THE
PRODUCT, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500 INDEX OR ANY
DATA INCLUDED THEREIN. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY
DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OR USE WITH RESPECT TO THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY
SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS),
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
- --------------------------------------------------------------------------------
[inst] -10-
<PAGE>
Any changes in the foregoing disclaimers and limitations must
be approved in advance in writing by an authorized officer of S&P.
(c) Each party represents and warrants to the other that it
has the authority to enter into this Agreement according to its terms and that
its performance does not violate any laws, regulations or agreements applicable
to it.
(d) Licensee represents and warrants to S&P that the Product
shall at all times comply with the description in Exhibit A.
(e) Licensee represents and warrants to S&P that the Product
shall not violate any applicable law, including but not limited to banking,
commodities and securities laws.
(f) Neither party shall have any liability for lost profits or
indirect, punitive, special, or consequential damages arising out of this
Agreement, even if notified of the possibility of such damages. Without
diminishing the disclaimers and limitations set forth in Subsection 9(b), in no
event shall the cumulative liability of S&P to Licensee exceed the average
annual License Fees actually paid to S&P hereunder.
(g) Use of any marks by Licensee in connection with its
Product (including in the name of such Product) which are not the S&P Marks is
at Licensee's sole risk.
(h) The provisions of this Section 9 shall survive any
termination of this Agreement.
10. INDEMNIFICATION.
(a) Licensee shall indemnify and hold harmless S&P, its
affiliates and their officers, directors, employees and agents
- --------------------------------------------------------------------------------
[inst] -11-
<PAGE>
against any and all judgments, damages, costs or losses of any kind (including
reasonable attorneys' and experts' fees) as a result of any claim, action, or
proceeding that arises out of or relates to (a) this Agreement, except insofar
as it relates to a breach by S&P of its representations or warranties hereunder,
or (b) the Product; provided, however, that S&P notifies Licensee promptly of
any such claim, action or proceeding. Licensee shall periodically reimburse S&P
for its reasonable expenses incurred under this Subsection 10(a). S&P shall have
the right, at its own expense, to participate in the defense of any claim,
action or proceeding against which it is indemnified hereunder; provided,
however, it shall have no right to control the defense, consent to judgment, or
agree to settle any such claim, action or proceeding without the written consent
of Licensee without waiving the indemnity hereunder. Licensee, in the defense of
any such claim, action or proceeding except with the written consent of S&P,
shall not consent to entry of any judgment or enter into any settlement which
either (a) does not include, as an unconditional term, the grant by the claimant
to S&P of a release of all liabilities in respect of such claims or (b)
otherwise adversely affects the rights of S&P. This provision shall survive the
termination or expiration of this Agreement.
(b) S&P shall indemnify and hold harmless Licensee, its
affiliates and their officers, directors, employees and agents against any and
all judgments, damages, costs or losses of any kind (including reasonable
attorneys' and experts' fees) as a result of any claim, action, or proceeding
that arises out of or relates to any breach by S&P of its representations or
warranties under this Agreement; provided, however, that (a) Licensee notifies
S&P promptly of any such claim, action or proceeding; (b) Licensee grants S&P
control of its defense and/or settlement; and (c) Licensee cooperates with S&P
in the defense thereof. S&P shall periodically reimburse Licensee for its
reasonable expenses incurred under this Subsection 10(b). Licensee shall have
the right, at its own expense, to participate in the defense of any
- --------------------------------------------------------------------------------
[inst] -12-
<PAGE>
claim, action or proceeding against which it is indemnified hereunder; provided,
however, it shall have no right to control the defense, consent to judgment, or
agree to settle any such claim, action or proceeding without the written consent
of S&P without waiving the indemnity hereunder. S&P, in the defense of any such
claim, action or proceeding, except with the written consent of Licensee, shall
not consent to entry of any judgment or enter into any settlement which either
(a) does not include, as an unconditional term, the grant by the claimant to
Licensee of a release of all liabilities in respect of such claims or (b)
otherwise adversely affects the rights of Licensee. This provision shall survive
the termination or expiration of this Agreement.
11. SUSPENSION OF PERFORMANCE.
Neither S&P nor Licensee shall bear responsibility or
liability for any losses arising out of any delay in or interruptions of their
respective performance of their obligations under this Agreement due to any act
of God, act of governmental authority, act of the public enemy or due to war,
the outbreak or escalation of hostilities, riot, fire, flood, civil commotion,
insurrection, labor difficulty (including, without limitation, any strike, or
other work stoppage or slow down), severe or adverse weather conditions,
communications line failure, or other similar cause beyond the reasonable
control of the party so affected.
12. OTHER MATTERS.
(a) This Agreement is solely and exclusively between the
parties hereto and shall not be assigned or transferred by either party, without
prior written consent of the other party, and any attempt to so assign or
transfer this Agreement without such written consent shall be null and void.
(b) This Agreement constitutes the entire agreement of the
parties hereto with respect to its subject matter and may be amended or modified
only by a writing signed by duly authorized
- --------------------------------------------------------------------------------
[inst] -13-
<PAGE>
officers of both parties. This Agreement supersedes all previous agreements
between the parties with respect to the subject matter of this Agreement. There
are no oral or written collateral representations, agreements, or understandings
except as provided herein.
(c) No breach, default, or threatened breach of this Agreement
by either party shall relieve the other party of its obligations or liabilities
under this Agreement with respect to the protection of the property or
proprietary nature of any property which is the subject of this Agreement.
(d) Except as set forth in Section 6 hereof with respect to
Informational Materials, all notices and other communications under this
Agreement shall be (i) in writing, (ii) delivered by hand, by registered or
certified mail, return receipt requested, or by facsimile transmission to the
address or facsimile number set forth below or such address or facsimile number
as either party shall specify by a written notice to the other and (iii) deemed
given upon receipt.
NOTICE TO S&P: Standard & Poor's
55 Water Street
New York, NY 10041-0003
Attn.: Robert Shakotko
Senior Vice President
Index Services
Fax #: (212) 438-3523
NOTICE TO LICENSEE:
---------------------------------------
---------------------------------------
---------------------------------------
Attn:
----------------------------------
Fax #:
---------------------------------
(e) This Agreement shall be interpreted, construed and
enforced in accordance with the laws of the State of New York.
- --------------------------------------------------------------------------------
[inst] -14-
<PAGE>
(f) Each party agrees that in connection with any legal action
or proceeding arising with respect to this Agreement, they will bring such
action or proceeding only in the United States District Court for the Southern
District of New York or in the Supreme Court of the State of New York in and for
the First Judicial Department and each party agrees to submit to the
jurisdiction of such court and venue in such court and to waive any claim that
such court is an inconvenient forum.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first set forth above.
STANDARD & POOR'S
- ------------------------------- a division of
The McGraw-Hill Companies, Inc.
BY: BY:
---------------------------- ---------------------------
- ------------------------------- -------------------------------
(Print Name) (Print Name)
- ------------------------------- -------------------------------
(Print Title) (Print Title)
- --------------------------------------------------------------------------------
[inst] -15-
<PAGE>
EXHIBIT A
PRODUCT DESCRIPTION
Product:____________________________ (the "Product") is an investment fund whose
investment objective is to track the price and yield performance of
publicly-traded common stocks of companies as represented by the S&P 500 Index.
- --------------------------------------------------------------------------------
[inst] -16-
<PAGE>
EXHIBIT B
LICENSE FEES
Licensee shall pay S&P License Fees computed as follows:
The annual License Fees shall be the greater of $10,000 (the "Minimum Annual
Fee") or one-tenth basis point (.00001) of the average daily net assets of the
Product computed quarterly. The Minimum Annual Fee shall be payable on the
Commencement Date and each one-year anniversary thereof. Amounts in excess of
the Minimum Annual Fee shall be paid to S&P within thirty (30) days after the
close of each calendar quarter in which they are incurred; each such payment
shall be accompanied by a statement setting forth the basis for its calculation.
The parties agree that the terms upon which License Fees are calculated pursuant
to this Exhibit B shall be considered "Confidential Information" for purposes of
Subsection 8(c) of this Agreement.
- --------------------------------------------------------------------------------
[inst] -17-
<PAGE>
LICENSE AGREEMENT
LICENSE AGREEMENT, dated as of ____________________________(the
"Commencement Date") by and between STANDARD & POOR'S, a division of The
McGraw-Hill Companies, Inc. ("S&P"), a New York corporation, having an office at
55 Water Street, New York, NY 10041-0003, and __________________________________
("Licensee"), a _________________________________ having an office
at __________________________________ .
WHEREAS, S&P compiles, calculates, maintains and owns rights in and to
the S&P MidCap 400 Index and to the proprietary data therein contained (such
rights being hereinafter individually and collectively referred to as the "S&P
MidCap 400 Index"); and
WHEREAS, S&P uses in commerce and has trade name and trademark
rights to the designations "Standard & Poor's-Registered Trademark-",
"S&P-Registered Trademark-", "S&P MidCap 400 Index", and "Standard & Poor's
MidCap 400 Index", in connection with the S&P MidCap 400 Index (such rights
being hereinafter individually and collectively referred to as the "S&P
Marks"); and
WHEREAS, Licensee wishes to use the S&P MidCap 400 Index as a component
of the product or products described in Exhibit A attached hereto and made a
part hereof (individually and collectively referred to as the "Product"); and
WHEREAS, Licensee wishes to use the S&P Marks in connection with the
marketing and/or promotion of the Product and in connection with making
disclosure about the Product under applicable law, rules and regulations in
order to indicate that S&P is the source of the S&P MidCap 400 Index; and
- --------------------------------------------------------------------------------
S&P Standard Form License Agreement 400inst]
<PAGE>
WHEREAS, Licensee wishes to obtain S&P's authorization to use the S&P
MidCap 400 Index and the S&P Marks in connection with the Product pursuant to
the terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto agree as follows:
1. GRANT OF LICENSE.
(a) Subject to the terms and conditions of this Agreement, S&P
hereby grants to Licensee a non-transferable, non-exclusive license (i) to use
the S&P MidCap 400 Index as a component of the Product to be marketed and/or
promoted by Licensee and (ii) to use and refer to the S&P Marks in connection
with the distribution, marketing and promotion of the Product (including in the
name of the Product) and in connection with making such disclosure about the
Product as Licensee deems necessary or desirable under any applicable law,
rules, regulations or provisions of this Agreement, but, in each case, only to
the extent necessary to indicate the source of the S&P MidCap 400 Index. It is
expressly agreed and understood by Licensee that no rights to use the S&P 400
Index and the S&P Marks are granted hereunder other than those specifically
described and expressly granted herein.
(b) S&P agrees that no person or entity (other than the
Licensee) shall need to obtain a license from S&P with respect to the Product.
2. TERM.
The term of this Agreement shall commence on the Commencement
Date and shall continue in effect thereafter until it is terminated in
accordance with its terms.
3. LICENSE FEES.
- --------------------------------------------------------------------------------
[400inst] -2-
<PAGE>
(a) Licensee shall pay to S&P the license fees ("License
Fees") specified and provide the data called for in Exhibit B, attached hereto
and made a part hereof.
(b) During the term of this Agreement and for a period of one
(1) year after its termination, S&P shall have the right, during normal business
hours and upon reasonable notice to Licensee, to audit on a confidential basis
the relevant books and records of Licensee to determine that License Fees have
been accurately determined. The costs of such audit shall be borne by S&P unless
it determines that it has been underpaid by five percent (5%) or more; in such
case, costs of the audit shall be paid by Licensee.
4. TERMINATION.
(a) At any time during the term of this Agreement, either
party may give the other party sixty (60) days prior written notice of
termination if the terminating party believes in good faith that material damage
or harm is occurring to the reputation or goodwill of that party by reason of
its continued performance hereunder, and such notice shall be effective on the
date specified therein of such termination, unless the other party shall correct
the condition causing such damage or harm within the notice period.
(b) In the case of breach of any of the material terms or
conditions of this Agreement by either party, the other party may terminate this
Agreement by giving sixty (60) days prior written notice of its intent to
terminate, and such notice shall be effective on the date specified therein for
such termination unless the breaching party shall correct such breach within the
notice period.
(c) S&P shall have the right, in its sole discretion, to cease
compilation and publication of the S&P MidCap 400 Index and, in such event, to
terminate this Agreement if S&P does not
- --------------------------------------------------------------------------------
[400inst] -3-
<PAGE>
offer a replacement or substitute index. In the event that S&P intends to
discontinue the S&P MidCap 400 Index, S&P shall give Licensee at least one (1)
year's written notice prior to such discontinuance, which notice shall specify
whether a replacement or substitute index will be made available.
Licensee shall have the option hereunder within sixty (60)
days after receiving such written notice from S&P to notify S&P in writing of
its intent to use the replacement or substitute index, if any, under the terms
of this Agreement. In the event that Licensee does not exercise such option or
no substitute or replacement index is made available, this Agreement shall be
terminated as of the date specified in the S&P notice and the License Fees to
the date of such termination shall be computed as provided in Subsection 4(f).
(d) Licensee may terminate this Agreement upon ninety (90)
days prior written notice to S&P if (i) Licensee is informed of the final
adoption of any legislation or regulation or the issuance of any interpretation
that in Licensee's reasonable judgment materially impairs Licensee's ability to
market and/or promote the Product; (ii) any material litigation or regulatory
proceeding regarding the Product is threatened or commenced; or (iii) Licensee
elects to terminate the public offering or other distribution of the Product, as
may be applicable. In such event the License Fees to the date of such
termination shall be computed as provided in Subsection 4(f).
(e) S&P may terminate this Agreement upon ninety (90) days (or
upon such lesser period of time if required pursuant to a court order) prior
written notice to Licensee if (i) S&P is informed of the final adoption of any
legislation or regulation or the issuance of any interpretation that in S&P's
reasonable judgment materially impairs S&P's ability to license and provide the
S&P MidCap 400 Index and S&P Marks under this Agreement in connection with such
Product; or (ii) any litigation or proceeding
- --------------------------------------------------------------------------------
[400inst] -4-
<PAGE>
is threatened or commenced and S&P reasonably believes that such litigation or
proceeding would have a material and adverse effect upon the S&P Marks and/or
the S&P MidCap 400 Index or upon the ability of S&P to perform under this
Agreement. In such event the License Fees to the date of such termination shall
be computed as provided in Subsection 4(f).
(f) In the event of termination of this Agreement as provided
in Subsections 4(a), (b), (c), (d) or (e), the License Fees to the date of such
termination shall be computed by prorating the amount of the applicable License
Fees shown in Exhibit B on the basis of the number of elapsed days in the
current term.
(g) Upon termination of this Agreement, Licensee shall cease
to use the S&P MidCap 400 Index and the S&P Marks in connection with the
Product; provided that Licensee may continue to utilize any previously printed
materials which contain the S&P Marks for a period of ninety (90) days following
such termination.
5. S&P'S OBLIGATIONS.
(a) It is the policy of S&P to prohibit its employees who are
directly responsible for changes in the components of the S&P MidCap 400 Index
from purchasing or beneficially owning any interest in the Product and S&P
believes that its employees comply with such policy. Licensee shall have no
responsibility for ensuring that such S&P employees comply with such S&P policy
and shall have no duty to inquire whether any investors or sellers of the
Product are such S&P employees. S&P shall have no liability to the Licensee with
respect to its employees' adherence or failure to adhere to such policy.
(b) S&P shall not and is in no way obliged to engage in any
marketing or promotional activities in connection with the Product or in making
any representation or statement to investors
- --------------------------------------------------------------------------------
[400inst] -5-
<PAGE>
or prospective investors in connection with the promotion by Licensee of the
Product.
(c) S&P agrees to provide reasonable support for Licensee's
development and educational efforts with respect to the Product as follows: (i)
S&P shall provide Licensee, upon request but subject to any agreements of
confidentiality with respect thereto, copies of the results of any marketing
research conducted by or on behalf of S&P with respect to the S&P MidCap 400
Index; and (ii) S&P shall respond in a timely fashion to any reasonable requests
for information by Licensee regarding the S&P MidCap 400 Index.
(d) S&P or its agent shall calculate and disseminate the S&P
MidCap 400 Index at least once each fifteen (15) seconds in accordance with its
current procedures, which procedures may be modified by S&P.
(e) S&P shall promptly correct or instruct its agent to
correct any mathematical errors made in S&P's computations of the S&P MidCap 400
Index which are brought to S&P's attention by Licensee, provided that nothing in
this Section 5 shall give Licensee the right to exercise any judgment or require
any changes with respect to S&P's method of composing, calculating or
determining the S&P MidCap 400 Index; and, provided further, that nothing herein
shall be deemed to modify the provisions of Section 9 of this Agreement.
6. INFORMATIONAL MATERIALS REVIEW.
Licensee shall use its best efforts to protect the goodwill
and reputation of S&P and of the S&P Marks in connection with its use of the S&P
Marks under this Agreement. Licensee shall submit to S&P for its review and
approval all informational materials pertaining to and to be used in connection
with the Product, including, where applicable, all prospectuses, plans,
registration statements, application forms, contracts, videos,
- --------------------------------------------------------------------------------
[400inst] -6-
<PAGE>
internet sites, electronic commerce, advertisements, brochures and promotional
and any other similar informational materials (including documents required to
be filed with governmental or regulatory agencies) that in any way use or refer
to S&P, the S&P MidCap 400 Index, or the S&P Marks (the "Informational
Materials"). S&P's approval shall be required with respect to the use of and
description of S&P, the S&P Marks and the S&P MidCap 400 Index and shall not be
unreasonably withheld or delayed by S&P. Specifically, S&P shall notify Licensee
of its approval or disapproval of any Informational Materials within forty-eight
(48) hours (excluding Saturday, Sunday and New York Stock Exchange Holidays)
following receipt thereof from Licensee. Any disapproval shall indicate S&P's
reasons therefor. Any failure by S&P to respond within such forty-eight (48)
hour period shall be deemed to constitute a waiver of S&P's right to review such
Informational Materials. Informational Materials shall be addressed to S&P, c/o
Sandra Weinberger, Specialist - Index Licensing/Marketing, Equity Index
Services, at the address specified in Subsection 12(d). Informational Materials
may be submitted via facsimile (to 212-438-3523 or 212-438-3543) if they are
less than 20 pages and legible after transmission. Once Informational Materials
have been approved by S&P, subsequent Informational Materials which do not alter
the use or description of S&P, the S&P Marks or the S&P MidCap 400 Index need
not be submitted for review and approval by S&P.
7. PROTECTION OF VALUE OF LICENSE.
(a) During the term of this Agreement, S&P shall use its
best efforts to maintain in full force and effect federal registrations for
"Standard & Poor's-Registered Trademark-" and "S&P-Registered Trademark-". S&P
shall at S&P's own expense and sole discretion exercise S&P's common law and
statutory rights against infringement of the S&P Marks, copyrights and other
proprietary rights.
- --------------------------------------------------------------------------------
[400inst] -7-
<PAGE>
(b) Licensee shall cooperate with S&P in the maintenance of
such rights and registrations and shall take such actions and execute such
instruments as S&P may from time to time reasonably request, and shall use the
following notice when referring to the S&P MidCap 400 Index or the S&P Marks in
any Informational Material:
"Standard & Poor's-Registered Trademark-", "S&P-Registered
Trademark-", "S&P MidCap 400 Index" and "Standard & Poor's
MidCap 400 Index" are trademarks of The McGraw-Hill
Companies, Inc. and have been licensed for use by
_______________________________. The Product is not
sponsored, endorsed, sold or promoted by Standard & Poor's
and Standard & Poor's makes no representation regarding the
advisability of investing in the Product.
or such similar language as may be approved in advance by S&P, it being
understood that such notice need only refer to the specific S&P Marks referred
to in the Informational Material.
8. PROPRIETARY RIGHTS.
(a) Licensee acknowledges that the S&P MidCap 400 Index is
selected, coordinated, arranged and prepared by S&P through the application of
methods and standards of judgment used and developed through the expenditure of
considerable work, time and money by S&P. Licensee also acknowledges that the
S&P MidCap 400 Index and the S&P Marks are the exclusive property of S&P, that
S&P has and retains all proprietary rights therein (including, but not limited
to trademarks and copyrights) and that the S&P MidCap 400 Index and its
compilation and composition and changes therein are in the control and
discretion of S&P.
(b) S&P reserves all rights with respect to the S&P MidCap 400
Index and the S&P Marks except those expressly licensed to Licensee hereunder.
- --------------------------------------------------------------------------------
[400inst] -8-
<PAGE>
(c) Each party shall treat as confidential and shall not
disclose or transmit to any third party any documentation or other written
materials that are marked as "Confidential and Proprietary" by the providing
party ("Confidential Information"). Confidential Information shall not include
(i) any information that is available to the public or to the receiving party
hereunder from sources other than the providing party (provided that such source
is not subject to a confidentiality agreement with regard to such information)
or (ii) any information that is independently developed by the receiving party
without use of or reference to information from the providing party.
Notwithstanding the foregoing, either party may reveal Confidential Information
to any regulatory agency or court of competent jurisdiction if such information
to be disclosed is (a) approved in writing by the other party for disclosure or
(b) required by law, regulatory agency or court order to be disclosed by a
party, provided, if permitted by law, that prior written notice of such required
disclosure is given to the other party and provided further that the providing
party shall cooperate with the other party to limit the extent of such
disclosure. The provisions of this Subsection 8(c) shall survive any termination
of this Agreement for a period of five (5) years from disclosure by either party
to the other of the last item of such Confidential Information.
9. WARRANTIES; DISCLAIMERS.
(a) S&P represents and warrants that S&P has the right to
grant the rights granted to Licensee herein and that the license granted herein
shall not infringe any trademark, copyright or other proprietary right of any
person not a party to this Agreement.
(b) Licensee agrees expressly to be bound itself by and
furthermore to include all of the following disclaimers and limitations in each
prospectus or each Statement of Additional Information ("SAI") relating to the
Product, provided the SAI is
- --------------------------------------------------------------------------------
[400inst] -9-
<PAGE>
incorporated by reference into the prospectus and the prospectus contains
disclosure regarding the S&P MidCap 400 Index that conforms to the notice in
Subsection 7(b), including a cross reference to the SAI disclosure. Licensee
shall furnish a copy of the prospectus and, if applicable, the SAI, to S&P:
The Product is not sponsored, endorsed, sold or promoted by
Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"). S&P
makes no representation or warranty, express or implied, to the owners of the
Product or any member of the public regarding the advisability of investing in
securities generally or in the Product particularly or the ability of the S&P
MidCap 400 Index to track general stock market performance. S&P's only
relationship to the Licensee is the licensing of certain trademarks and trade
names of S&P and of the S&P MidCap 400 Index which is determined, composed and
calculated by S&P without regard to the Licensee or the Product. S&P has no
obligation to take the needs of the Licensee or the owners of the Product into
consideration in determining, composing or calculating the S&P MidCap 400 Index.
S&P is not responsible for and has not participated in the determination of the
prices and amount of the Product or the timing of the issuance or sale of the
Product or in the determination or calculation of the equation by which the
Product is to be converted into cash. S&P has no obligation or liability in
connection with the administration, marketing or trading of the Product.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF
THE S&P MidCap 400 INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO
LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO
WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS
OF THE PRODUCT, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P MidCap 400
INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES,
AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE
- --------------------------------------------------------------------------------
[400inst] -10-
<PAGE>
OR USE WITH RESPECT TO THE S&P MidCap 400 INDEX OR ANY DATA INCLUDED THEREIN.
WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY
FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST
PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
Any changes in the foregoing disclaimers and limitations must
be approved in advance in writing by an authorized officer of S&P.
(c) Each party represents and warrants to the other that it
has the authority to enter into this Agreement according to its terms and that
its performance does not violate any laws, regulations or agreements applicable
to it.
(d) Licensee represents and warrants to S&P that the Product
shall at all times comply with the description in Exhibit A.
(e) Licensee represents and warrants to S&P that the Product
shall not violate any applicable law, including but not limited to banking,
commodities and securities laws.
(f) Neither party shall have any liability for lost profits or
indirect, punitive, special, or consequential damages arising out of this
Agreement, even if notified of the possibility of such damages. Without
diminishing the disclaimers and limitations set forth in Subsection 9(b), in no
event shall the cumulative liability of S&P to Licensee exceed the average
annual License Fees actually paid to S&P hereunder.
(g) Use of any marks by Licensee in connection with its
Product (including in the name of such Product) which are not the S&P Marks is
at Licensee's sole risk.
- --------------------------------------------------------------------------------
[400inst] -11-
<PAGE>
(h) The provisions of this Section 9 shall survive any
termination of this Agreement.
10. INDEMNIFICATION.
(a) Licensee shall indemnify and hold harmless S&P, its
affiliates and their officers, directors, employees and agents against any and
all judgments, damages, costs or losses of any kind (including reasonable
attorneys' and experts' fees) as a result of any claim, action, or proceeding
that arises out of or relates to (a) this Agreement, except insofar as it
relates to a breach by S&P of its representations or warranties hereunder, or
(b) the Product; provided, however, that S&P notifies Licensee promptly of any
such claim, action or proceeding. Licensee shall periodically reimburse S&P for
its reasonable expenses incurred under this Subsection 10(a). S&P shall have the
right, at its own expense, to participate in the defense of any claim, action or
proceeding against which it is indemnified hereunder; provided, however, it
shall have no right to control the defense, consent to judgment, or agree to
settle any such claim, action or proceeding without the written consent of
Licensee without waiving the indemnity hereunder. Licensee, in the defense of
any such claim, action or proceeding except with the written consent of S&P,
shall not consent to entry of any judgment or enter into any settlement which
either (a) does not include, as an unconditional term, the grant by the claimant
to S&P of a release of all liabilities in respect of such claims or (b)
otherwise adversely affects the rights of S&P.
This provision shall survive the termination or expiration of this Agreement.
(b) S&P shall indemnify and hold harmless Licensee, its
affiliates and their officers, directors, employees and agents against any and
all judgments, damages, costs or losses of any kind (including reasonable
attorneys' and experts' fees) as a result of any claim, action, or proceeding
that arises out of or relates to any breach by S&P of its representations or
warranties under this Agreement; provided, however, that (a) Licensee
- --------------------------------------------------------------------------------
[400inst] -12-
<PAGE>
notifies S&P promptly of any such claim, action or proceeding; (b) Licensee
grants S&P control of its defense and/or settlement; and (c) Licensee cooperates
with S&P in the defense thereof. S&P shall periodically reimburse Licensee for
its reasonable expenses incurred under this Subsection 10(b). Licensee shall
have the right, at its own expense, to participate in the defense of any claim,
action or proceeding against which it is indemnified hereunder; provided,
however, it shall have no right to control the defense, consent to judgment, or
agree to settle any such claim, action or proceeding without the written consent
of S&P without waiving the indemnity hereunder. S&P, in the defense of any such
claim, action or proceeding, except with the written consent of Licensee, shall
not consent to entry of any judgment or enter into any settlement which either
(a) does not include, as an unconditional term, the grant by the claimant to
Licensee of a release of all liabilities in respect of such claims or (b)
otherwise adversely affects the rights of Licensee. This provision shall survive
the termination or expiration of this Agreement.
11. SUSPENSION OF PERFORMANCE.
Neither S&P nor Licensee shall bear responsibility or
liability for any losses arising out of any delay in or interruptions of their
respective performance of their obligations under this Agreement due to any act
of God, act of governmental authority, act of the public enemy or due to war,
the outbreak or escalation of hostilities, riot, fire, flood, civil commotion,
insurrection, labor difficulty (including, without limitation, any strike, or
other work stoppage or slow down), severe or adverse weather conditions,
communications line failure, or other similar cause beyond the reasonable
control of the party so affected.
12. OTHER MATTERS.
(a) This Agreement is solely and exclusively between the
parties hereto and shall not be assigned or transferred by either party, without
prior written consent of the other party,
- --------------------------------------------------------------------------------
[400inst] -13-
<PAGE>
and any attempt to so assign or transfer this Agreement without such written
consent shall be null and void.
(b) This Agreement constitutes the entire agreement of the
parties hereto with respect to its subject matter and may be amended or modified
only by a writing signed by duly authorized officers of both parties. This
Agreement supersedes all previous agreements between the parties with respect to
the subject matter of this Agreement. There are no oral or written collateral
representations, agreements, or understandings except as provided herein.
(c) No breach, default, or threatened breach of this Agreement
by either party shall relieve the other party of its obligations or liabilities
under this Agreement with respect to the protection of the property or
proprietary nature of any property which is the subject of this Agreement.
(d) Except as set forth in Section 6 hereof with respect to
Informational Materials, all notices and other communications under this
Agreement shall be (i) in writing, (ii) delivered by hand, by registered or
certified mail, return receipt requested, or by facsimile transmission to the
address or facsimile number set forth below or such address or facsimile number
as either party shall specify by a written notice to the other and (iii) deemed
given upon receipt.
Notice to S&P: Standard & Poor's
55 Water Street
New York, NY 10041-0003
Attn.: Robert Shakotko
Senior Vice President
Index Services
Fax #: (212) 438-3523
NOTICE TO LICENSEE:
---------------------------------------
---------------------------------------
---------------------------------------
Attn:
----------------------------------
- --------------------------------------------------------------------------------
[400inst] -14-
<PAGE>
Fax #:
---------------------------------
(e) This Agreement shall be interpreted, construed and
enforced in accordance with the laws of the State of New York.
(f) Each party agrees that in connection with any legal action
or proceeding arising with respect to this Agreement, they will bring such
action or proceeding only in the United States District Court for the Southern
District of New York or in the Supreme Court of the State of New York in and for
the First Judicial Department and each party agrees to submit to the
jurisdiction of such court and venue in such court and to waive any claim that
such court is an inconvenient forum.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first set forth above.
STANDARD & POOR'S
- ------------------------------- a division of
The McGraw-Hill Companies, Inc.
BY: BY:
---------------------------- ---------------------------
- ------------------------------- -------------------------------
(Print Name) (Print Name)
- ------------------------------- -------------------------------
(Print Title) (Print Title)
- --------------------------------------------------------------------------------
[400inst] -15-
<PAGE>
EXHIBIT A
PRODUCT DESCRIPTION
Product:________________________________ (the "Product") is an investment fund
whose investment objective is to track the price and yield performance of
publicly-traded common stocks of companies as represented by the S&P MidCap 400
Index.
- --------------------------------------------------------------------------------
[400inst] -16-
<PAGE>
EXHIBIT B
LICENSE FEES
Licensee shall pay S&P License Fees computed as follows:
The annual License Fees shall be the greater of $10,000 (the "Minimum Annual
Fee") or one-tenth basis point (.00001) of the average daily net assets of the
Product computed quarterly. The Minimum Annual Fee shall be payable on the
Commencement Date and each one-year anniversary thereof. Amounts in excess of
the Minimum Annual Fee shall be paid to S&P within thirty (30) days after the
close of each calendar quarter in which they are incurred; each such payment
shall be accompanied by a statement setting forth the basis for its calculation.
The parties agree that the terms upon which License Fees are calculated pursuant
to this Exhibit B shall be considered "Confidential Information" for purposes of
Subsection 8 (c) of this Agreement.
- --------------------------------------------------------------------------------
[400inst] -17-
<PAGE>
POWER OF ATTORNEY
The undersigned Trustee of State Street Master Trust (the "Trust") hereby
constitutes and appoints Michael E. Gillespie, Esq., and Stephanie M. Nichols
each of them with full powers of substitution, as his true and lawful
attorney-in-fact and agent to execute in her name and on her behalf in any and
all capacities the Registration Statements on Form N-1A, and any and all
amendments thereto, and all other documents, filed by the Trust with the
Securities and Exchange Commission (the "SEC"') under the Investment Company Act
of 1940, as amended, and (as applicable) the Securities Act of 1933, as amended,
and any and all instruments which such attorneys and agents, or any of them,
deem necessary or advisable to enable the Trust to comply with such Acts, the
rules, regulations and requirements of the SEC, and the securities or Blue Sky
laws of any state or other jurisdiction, and to file the same, with all exhibits
thereto and other documents in connection therewith, with the SEC and such other
jurisdictions, and the undersigned each hereby ratifies and confirms as her own
act and deed any and all acts that such attorneys and agents, or any of them,
shall do or cause to be done by virtue hereof. Any one of such attorneys and
agents has, and may exercise, all of the powers hereby conferred. The
undersigned each hereby revokes any Powers of Attorney previously granted with
respect to any Trust concerning the filings and actions described herein.
IN WITNESS WHEREOF, the undersigned has hereunto set her hand as of the 10th day
of September, 1999.
SIGNATURES TITLE
- ------------------- Trustee
Rina K. Spence
<PAGE>
POWER OF ATTORNEY
The undersigned Trustee of State Street Master Trust (the "Trust") hereby
constitutes and appoints Michael E. Gillespie, Esq., and Stephanie M. Nichols
each of them with full powers of substitution, as his true and lawful
attorney-in-fact and agent to execute in her name and on her behalf in any and
all capacities the Registration Statements on Form N-1A, and any and all
amendments thereto, and all other documents, filed by the Trust with the
Securities and Exchange Commission (the "SEC"') under the Investment Company Act
of 1940, as amended, and (as applicable) the Securities Act of 1933, as amended,
and any and all instruments which such attorneys and agents, or any of them,
deem necessary or advisable to enable the Trust to comply with such Acts, the
rules, regulations and requirements of the SEC, and the securities or Blue Sky
laws of any state or other jurisdiction, and to file the same, with all exhibits
thereto and other documents in connection therewith, with the SEC and such other
jurisdictions, and the undersigned each hereby ratifies and confirms as her own
act and deed any and all acts that such attorneys and agents, or any of them,
shall do or cause to be done by virtue hereof. Any one of such attorneys and
agents has, and may exercise, all of the powers hereby conferred. The
undersigned each hereby revokes any Powers of Attorney previously granted with
respect to any Trust concerning the filings and actions described herein.
IN WITNESS WHEREOF, the undersigned has hereunto set her hand as of the 10th day
of September, 1999.
SIGNATURES TITLE
- ---------------------- Trustee
William L. Boyan
<PAGE>
POWER OF ATTORNEY
The undersigned Trustee of State Street Master Trust (the "Trust") hereby
constitutes and appoints Michael E. Gillespie, Esq., and Stephanie M. Nichols
each of them with full powers of substitution, as his true and lawful
attorney-in-fact and agent to execute in her name and on her behalf in any and
all capacities the Registration Statements on Form N-1A, and any and all
amendments thereto, and all other documents, filed by the Trust with the
Securities and Exchange Commission (the "SEC"') under the Investment Company Act
of 1940, as amended, and (as applicable) the Securities Act of 1933, as amended,
and any and all instruments which such attorneys and agents, or any of them,
deem necessary or advisable to enable the Trust to comply with such Acts, the
rules, regulations and requirements of the SEC, and the securities or Blue Sky
laws of any state or other jurisdiction, and to file the same, with all exhibits
thereto and other documents in connection therewith, with the SEC and such other
jurisdictions, and the undersigned each hereby ratifies and confirms as her own
act and deed any and all acts that such attorneys and agents, or any of them,
shall do or cause to be done by virtue hereof. Any one of such attorneys and
agents has, and may exercise, all of the powers hereby conferred. The
undersigned each hereby revokes any Powers of Attorney previously granted with
respect to any Trust concerning the filings and actions described herein.
IN WITNESS WHEREOF, the undersigned has hereunto set her hand as of the 10th day
of September, 1999.
SIGNATURES TITLE
- ---------------------- Trustee
Michael Holland
