<PAGE>
Filed with the Securities and Exchange Commission on
February 18, 2000
1933 Act File No. __________
1940 Act File No. 811-______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 /X/
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 /X/
STATE STREET INSTITUTIONAL INVESTMENT TRUST
(Exact Name of Registrant as Specified in Charter)
PO BOX 1713, BOSTON, MASSACHUSETTS 02105-1713
(Address of Principal Executive Offices)
(617) 662-3968
(Registrant's Telephone Number)
Copy to:
Julie Tedesco Timothy W. Diggins
PO Box 1713 Ropes & Gray
Boston, Massachusetts 02105-1713 One International Place
(Name and Address of Agent for Service) Boston, Massachusetts 02110-2624
It is proposed that this filing will become effective (check appropriate box):
/ / Immediately upon filing pursuant to / / On (date) pursuant to
paragraph (b) paragraph (b)
/ / 60 days after filing pursuant to paragraph / / On (date) pursuant to
(a)(1) paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph / / On (date) pursuant to
(a)(2) paragraph (a)(2) of Rule
485.
If appropriate, check the following box:
/ / This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
1
<PAGE>
State Street Institutional Investment Trust
PO Box 1713, Boston, Massachusetts 02105-1713
(617) 662-3968
STATE STREET EQUITY 500 INDEX FUND
CLASS A SHARES
Prospectus Dated March __, 2000
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a criminal offense.
2
<PAGE>
INTRODUCTION
The State Street Equity 500 Index Fund (the "Fund") is a mutual fund that
seeks to provide an investment return matching, as closely as possible before
expenses, the performance of the Standard & Poor's 500 Composite Stock Price
Index (the "S&P 500 Index"). The Fund is a series of the State Street
Institutional Investment Trust ("the Trust"), which is an open-end management
investment company organized as a business trust under the laws of the
Commonwealth of Massachusetts. State Street Bank and Trust Company, acting
through its division, State Street Global Advisors (the "Adviser"), is the
investment adviser to the Fund and to the portfolio in which it invests.
RISK/RETURN SUMMARY
INVESTMENT OBJECTIVE. The Fund's investment objective is to match as
closely as possible, before expenses, the performance of the S&P 500 Index. The
Fund seeks to achieve its investment objective by investing substantially all of
its investable assets in a corresponding portfolio (the "Portfolio") of State
Street Master Trust that has the same investment objective as, and investment
policies that are substantially similar to those of, the Fund. In reviewing the
investment objective and policies of the Fund below, you should assume that the
investment objective and policies of the Portfolio are the same in all material
respects as those of the Fund (and that, at times when the Fund has invested its
assets in the Portfolio, the descriptions below of the Fund's investment
strategies and risks should be read as also applicable to the Portfolio). There
is no assurance that the Fund will achieve its investment objective.
PRINCIPAL INVESTMENT STRATEGIES. The Fund 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 Fund, using a "passive" or "indexing"
investment approach, attempts to match, before expenses, 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 several industrial sectors
representing a significant portion of the market value of all stocks publicly
traded in the United States. The Adviser seeks a correlation of 0.95 or better
between the Fund's performance and the performance of the Index. (1.00 would
represent perfect correlation.)
The Fund 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 Fund may purchase a sample of
the stocks in the Index in proportions expected by the Adviser to match
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 Fund 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.
3
<PAGE>
In addition, the Fund 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 Fund might do so, for example, in order to
increase its investment exposure pending investment of cash in the stocks
comprising the Index. Alternatively, the Fund 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 Fund 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 Fund. The Fund may also enter into other derivatives
transactions, including the purchase or sale of options or enter into swap
transactions, to assist in matching the performance of the Index.
PRINCIPAL RISKS.
- - 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 Fund's return may not match the return of the Index for a number of
reasons. For example, the Fund incurs a number of operating expenses not
applicable to the Index, and incurs costs in buying and selling securities.
The Fund may not be fully invested at times, either as a result of cash
flows into the Fund or reserves of cash held by the Fund 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 Fund's shares will change in value, and YOU COULD LOSE MONEY BY INVESTING IN
THE FUND. An investment in the Fund is not a deposit with a bank and is not
insured or guaranteed by the federal deposit insurance corporation or any other
government agency.
PERFORMANCE INFORMATION.
Performance information for the Fund has been omitted because the Fund had
not commenced investment operations as of the date of this Prospectus.
4
<PAGE>
FEES AND EXPENSES
The following table describes the fees and expenses that you may pay if you
buy and hold shares of the Fund. As a shareholder in a Portfolio, the Fund bears
its ratable share of the Portfolio's expenses, including advisory and
administrative fees, and at the same time continues to pay its own fees and
expenses. The table and the Example reflect the expenses of both the Fund and
the Portfolio.
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets)
<TABLE>
<CAPTION>
<S> <C>
Management Fees(1) 0.045%
------
Distribution (12b-1) Fees 0.15%
------
Other Expenses 0.05%
------
Total Annual Fund Operating Expenses 0.245%
------
</TABLE>
EXAMPLE: This Example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 in the Fund for the time periods indicated and then redeem all of
your shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
<TABLE>
<CAPTION>
<S> <C>
1 year 3 years
$25 $79
</TABLE>
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 Fund. The Fund is not sponsored,
endorsed, sold or
- ---------------------------
(1) This fee reperesents the advisory fee paid by the corresponding Portfolio
of the State Street Master Trust.
5
<PAGE>
promoted by S&P, and S&P makes no representation regarding the advisability of
investing in the Fund.
INDEX FUTURES CONTRACTS AND RELATED OPTIONS. The Fund 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 Fund enters into and terminates an index future or
option transaction, the Fund 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 Fund
and the return of the Index. In addition, the Fund 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 Fund and the return of the Index.
OTHER DERIVATIVE TRANSACTIONS. The Fund 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 Fund'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 Fund may enter into
repurchase agreements and securities loans. Under a repurchase agreement, the
Fund 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 Fund's cost plus interest. Under a securities loan, the Fund
lends portfolio securities. The Fund 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 Fund bears a risk of loss if the other party defaults on its
obligation and the Fund 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 Fund may be
treated as an unsecured creditor and be required to return the underlying
collateral to the other party's estate.
CHANGES IN POLICIES. The Trust's Trustees may change the Fund's investment
strategies and other policies without shareholder approval, except as otherwise
indicated. The Trustees will not materially change the Fund's investment
objective without shareholder approval.
6
<PAGE>
MANAGEMENT AND ORGANIZATION
THE FUND AND THE PORTFOLIO. State Street Institutional Investment Trust is
an open-end management investment company. It was organized as a business trust
under the laws of The Commonwealth of Massachusetts on February ___, 2000. The
Fund is a separate diversified series of the Trust. The Portfolio in which the
Fund invests is managed under the general oversight of the Board of Trustees of
the State Street Master Trust. State Street, through its State Street Global
Advisors division, has served as investment adviser to the Portfolio since its
inception.
The Trustees of the Fund are responsible for generally overseeing the
investments of the Fund's shares. If the Adviser were to invest the Fund's
assets directly, it would, subject to such policies as the Trustees may
determine, furnish a continuing investment program for the Fund and makes
investment decisions on its behalf.
The Equity 500 Index Fund offers both Class A and Class B shares. Only the
Class A shares of the Fund are discussed in this prospectus.
THE ADVISER. The Fund has entered into an investment advisory agreement
with State Street pursuant to which the Adviser would manage the Fund's assets
directly in the event that the Fund were to cease investing substantially all of
its assets in the Portfolio. State Street does not receive any fees from the
Fund under that agreement so long as the Fund continues to invest substantially
all of its assets in the Portfolio or in another investment company.
The Adviser places all orders for purchases and sales of the Fund's (or the
underlying 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 Fund or
Portfolio in accordance with procedures adopted by the Trustees under the 1940
Act, which require periodic review of these transactions.
As of December 31, 1999, the Adviser managed approximately $672 billion in
assets. The Adviser's principal address is Two International Place, Boston,
Massachusetts 02110.
THE ADMINISTRATOR, CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT. State
Street is the Administrator for the Fund and the Custodian for the Fund's
assets, and serves as the Transfer Agent to the Fund. As compensation for its
services as Administrator (and for assuming ordinary operating expenses of the
Fund, including ordinary legal and audit expenses), State Street receives an
administrative fee at an annual rate of 0.05% of average daily net assets of the
Fund.
THE LENDING AGENT. State Street may serve as the lending agent for the
Trust. In such capacity, it would cause the delivery of loaned securities from
the Fund to borrowers, arrange for the return of loaned securities to the Fund
at the termination of
7
<PAGE>
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. (At any time when the
Fund invests in the Portfolio, the Fund would not likely engage directly in
securities lending activities; State Street may serve as lending agent for the
Portfolio on the same terms.)
SHAREHOLDER INFORMATION
DETERMINATION OF NET ASSET VALUE. The Fund's net asset value is
calculated on each day the New York Stock Exchange (the "NYSE") is open as of
the close of trading on the NYSE. The net asset value is based on the market
value of the securities held in the Fund. The net asset value per share is
calculated by dividing the value of the net asset value of the Fund by the
number of shares outstanding. If quotations are not readily available, the
portfolio securities will be valued by methods approved by the Trustees
intended to reflect fair value.
PURCHASING SHARES. Investors pay no sales load to invest in this Fund. The
price for Fund shares is the net asset value per share. Orders will be priced at
the net asset value next calculated after the order is accepted by the Fund.
There is no minimum initial investment in the Fund, although the
Trustees may impose a minimum initial investment amount at any time. There is
no minimum subsequent investment. The Fund 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 Fund's custodian bank by a
Federal Reserve Bank) or securities acceptable to the Adviser. (Please
consult your tax adviser regarding in-kind transactions.) The Fund reserves
the right to cease accepting investments at any time or to reject any
investment order.
REDEEMING SHARES. 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 Fund. The Fund 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 Fund 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 Fund will normally redeem in-kind to the investor. 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.
DISTRIBUTION/SERVICING (12b-1) PLAN
8
<PAGE>
The Fund has adopted a distribution plan under which the Fund may
compensate its distributor (or others) for services in connection with the
distribution of the Fund's Class A shares and for services provided to Fund
shareholders. The plan calls for payments at an annual rate (based on average
net assets) of up to 0.15%. Because these fees are paid out of the Fund's assets
on an ongoing basis, they will increase the cost of your investment and may cost
you more over time than paying other types of sales charges.
DIVIDENDS, DISTRIBUTIONS AND TAX CONSIDERATIONS
Dividends and capital gains of the Fund will be declared and paid annually.
For federal income tax purposes, distributions of investment income are
taxable as ordinary income. Taxes on distributions of capital gains are
determined by how long the Fund owned the investments that generated them,
rather than how long you have owned your shares. Distributions are taxable to
you even if they are paid from income or gains earned by the Fund before your
investment (and thus were included in the price you paid). Distributions from
gains from investments that the Fund owned for more than one year will be
taxable as capital gains (generally at a 20% rate for noncorporate
shareholders). Distributions of gains from investments that the Fund owned for
one year or less will be taxable as ordinary income. Distributions are taxable
whether you received them in cash or reinvested them in additional shares.
Any gain resulting from the sale or exchange of your shares will generally
also be subject to tax. You should consult your tax advisor for more information
on your own tax situation, including possible foreign, state and local taxes.
9
<PAGE>
For more information about STATE STREET EQUITY 500
INDEX FUND:
The Fund's statement of additional information (SAI) includes additional
information about the Fund and is incorporated by reference into this document.
Additional information about the Fund's investments will be available in the
Fund's annual and semi-annual reports to shareholders. In the Fund's annual
report, you will find a discussion of the market conditions and investment
strategies that significantly affected the Fund's performance during its last
fiscal year.
The SAI and the Fund's annual and semi-annual reports will be available,
without charge, upon request. Shareholders in the Fund may make inquiries to the
Fund to receive such information by calling the Fund toll free at
(---) -----------.
Information about the Fund (including the SAI) can be reviewed and copied at the
Commission's Public Reference Room in Washington, D.C. Information on the
operation of the Public Reference Room may be obtained by calling the Commission
at 1-202-942-8090. Reports and other information about the Fund are available
free of charge on the EDGAR Database on the Commission's Internet site at
http://www.sec.gov; copies of this information also may be obtained, after
paying a duplicating fee, by electronic request at the following E-mail address:
[email protected], or by writing the Commission's Public Reference Section,
Washington, D.C. 20549-0102.
STATE STREET GLOBAL ADVISORS
TWO INTERNATIONAL PLACE
BOSTON, MASSACHUSETTS 02109
1-___-___-________
10
<PAGE>
State Street Institutional Investment Trust
PO Box 1713, Boston, Massachusetts 02105-1713
(617) 662-3968
STATE STREET EQUITY 500 INDEX FUND
CLASS B SHARES
Prospectus Dated March __, 2000
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a criminal offense.
11
<PAGE>
INTRODUCTION
The State Street Equity 500 Index Fund (the "Fund") is a mutual fund that
seeks to provide an investment return matching, as closely as possible before
expenses, the performance of the Standard & Poor's 500 Composite Stock Price
Index (the "S&P 500 Index"). The Fund is a series of the State Street
Institutional Investment Trust (the "Trust"), which is an open-end management
investment company organized under the laws of the Commonwealth of
Massachusetts. State Street Bank and Trust Company, acting through its division,
State Street Global Advisors (the "Adviser"), is the investment adviser to the
Fund and to the portfolio in which it invests.
RISK/RETURN SUMMARY
INVESTMENT OBJECTIVE. The Fund's investment objective is to match as
closely as possible, before expenses, the performance of the S&P 500 Index. The
Fund seeks to achieve its investment objective by investing substantially all of
its investable assets in a corresponding portfolio (the "Portfolio") of State
Street Master Trust that has the same investment objective as, and investment
policies that are substantially similar to those of, the Fund. In reviewing the
investment objective and policies of the Fund below, you should assume that the
investment objective and policies of the Portfolio are the same in all material
respects as those of the Fund (and that, at times when the Fund has invested its
assets in the Portfolio, the descriptions below of the Fund's investment
strategies and risks should be read as also applicable to the Portfolio). There
is no assurance that the Fund will achieve its investment objective.
PRINCIPAL INVESTMENT STRATEGIES. The Fund 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 Fund, using a "passive" or "indexing"
investment approach, attempts to match, before expenses, 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 several industrial sectors
representing a significant portion of the market value of all stocks publicly
traded in the United States. The Adviser seeks a correlation of 0.95 or better
between the Fund's performance and the performance of the Index. (1.00 would
represent perfect correlation.)
The Fund 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 Fund may purchase a sample of
the stocks in the Index in proportions expected by the Adviser to match
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 Fund 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.
12
<PAGE>
In addition, the Fund 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 Fund might do so, for example, in order to
increase its investment exposure pending investment of cash in the stocks
comprising the Index. Alternatively, the Fund 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 Fund 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 Fund. The Fund may also enter into other derivatives
transactions, including the purchase or sale of options or enter into swap
transactions, to assist in matching the performance of the Index.
PRINCIPAL RISKS.
- - 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 Fund's return may not match the return of the Index for a number of
reasons. For example, the Fund incurs a number of operating expenses not
applicable to the Index, and incurs costs in buying and selling securities.
The Fund may not be fully invested at times, either as a result of cash
flows into the Fund or reserves of cash held by the Fund 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 Fund's shares will change in value, and YOU COULD LOSE MONEY BY INVESTING IN
THE FUND. An investment in the Fund is not a deposit with a bank and is not
insured or guaranteed by the federal deposit insurance corporation or any other
government agency.
PERFORMANCE INFORMATION.
Performance information for the Fund has been omitted because the Fund had not
commenced investment operations as of the date of this Prospectus.
13
<PAGE>
FEES AND EXPENSES
The following table describes the fees and expenses that you may pay if you
buy and hold shares of the Fund. As a shareholder in a Portfolio, the Fund bears
its ratable share of the Portfolio's expenses, including advisory and
administrative fees, and at the same time continues to pay its own fees and
expenses. The table and the Example reflect the expenses of both the Fund and
the Portfolio.
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets)
<TABLE>
<S> <C>
Management Fees(1) 0.045%
------
Distribution (12b-1) Fees 0.25%
-----
Other Expenses 0.05%
-----
Total Annual Fund Operating Expenses 0.345%
------
</TABLE>
EXAMPLE: This Example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 in the Fund for the time periods indicated and then redeem all of
your shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
<TABLE>
<S> <C>
1 year 3 years
$35 $111
</TABLE>
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 Fund. The Fund is not sponsored,
endorsed, sold or promoted by S&P, and S&P makes no representation regarding the
advisability of investing in the Fund.
14
<PAGE>
INDEX FUTURES CONTRACTS AND RELATED OPTIONS. The Fund 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 Fund enters into and terminates an index future or
option transaction, the Fund 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 Fund
and the return of the Index. In addition, the Fund 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 Fund and the return of the Index.
OTHER DERIVATIVE TRANSACTIONS. The Fund 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 Fund'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 Fund may enter into
repurchase agreements and securities loans. Under a repurchase agreement, the
Fund 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 Fund's cost plus interest. Under a securities loan, the Fund
lends portfolio securities. The Fund 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 Fund bears a risk of loss if the other party defaults on its
obligation and the Fund 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 Fund may be
treated as an unsecured creditor and be required to return the underlying
collateral to the other party's estate.
CHANGES IN POLICIES. The Trust's Trustees may change the Fund's investment
strategies and other policies without shareholder approval, except as otherwise
indicated. The Trustees will not materially change the Fund's investment
objective without shareholder approval.
15
<PAGE>
MANAGEMENT AND ORGANIZATION
THE FUND AND THE PORTFOLIO. State Street Institutional Investment Trust is
an open-end management investment company. It was organized as a business trust
under the laws of The Commonwealth of Massachusetts on February ___, 2000. The
Fund is a separate diversified series of the Trust. The Portfolio in which the
Fund invests is managed under the general oversight of the Board of Trustees of
the State Street Master Trust. State Street, through its State Street Global
Advisors division, has served as investment adviser to the Portfolio since its
inception.
The Trustees of the Fund are responsible for generally overseeing the
investments of the Fund's shares. If the Adviser were to invest the Fund's
assets directly, it would, subject to such policies as the Trustees may
determine, furnish a continuing investment program for the Fund and makes
investment decisions on its behalf.
The Equity 500 Index Fund offers both Class A and Class B shares. Only the
Class B shares of the Fund are discussed in this prospectus.
THE ADVISER. The Fund has entered into an investment advisory agreement
with State Street pursuant to which the Adviser would manage the Fund's assets
directly in the event that the Fund were to cease investing substantially all of
its assets in the Portfolio. State Street does not receive any fees from the
Fund under that agreement so long as the Fund continues to invest substantially
all of its assets in the Portfolio or in another investment company.
The Adviser places all orders for purchases and sales of the Fund's (or the
underlying 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 Fund or
Portfolio in accordance with procedures adopted by the Trustees under the 1940
Act, which require periodic review of these transactions.
As of December 31, 1999, the Adviser managed approximately $672 billion in
assets. The Adviser's principal address is Two International Place, Boston,
Massachusetts 02110.
THE ADMINISTRATOR, CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT. State
Street is the Administrator for the Fund and the Custodian for the Fund's
assets, and serves as the Transfer Agent to the Fund. As compensation for its
services as Administrator (and for assuming ordinary operating expenses of the
Fund, including ordinary legal and audit expenses), State Street receives an
administrative fee at an annual rate of 0.05% of average daily net assets of the
Fund.
THE LENDING AGENT. State Street may serve as the lending agent for the
Trust. In such capacity, it would cause the delivery of loaned securities from
the Fund to borrowers, arrange for the return of loaned securities to the Fund
at the termination of
16
<PAGE>
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. (At any time when the
Fund invests in the Portfolio, the Fund would not likely engage directly in
securities lending activities; State Street may serve as lending agent for the
Portfolio on the same terms.)
SHAREHOLDER INFORMATION
DETERMINATION OF NET ASSET VALUE. The Fund's net asset value is
calculated on each day the New York Stock Exchange (the "NYSE") is open as
of the close of trading on the NYSE. The net asset value is based on
the market value of the securities held in the Fund. The net asset value per
share is calculated by dividing the value of the net asset value of the Fund
by the number of shares outstanding. If quotations are not readily available,
the portfolio securities will be valued by methods approved by the Trustees
intended to reflect fair value.
PURCHASING SHARES. Investors pay no sales load to invest in this Fund. The
price for Fund shares is the net asset value per share. Orders will be priced at
the net asset value next calculated after the order is accepted by the Fund.
There is no minimum initial investment in the Fund, although the Trustees
may impose a minimum initial investment amount at any time. There is no minimum
subsequent investment. The Fund 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 Fund's custodian bank by a Federal Reserve
Bank) or securities acceptable to the Adviser. (Please consult your tax adviser
regarding in-kind transactions.) The Fund reserves the right to cease accepting
investments at any time or to reject any investment order.
REDEEMING SHARES. 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 Fund. The Fund 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 Fund 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 Fund will normally redeem in-kind to the investor. 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.
17
<PAGE>
DISTRIBUTION/SERVICING (12b-1) PLAN
The Fund has adopted a distribution plan under which the Fund may
compensate its distributor (or others) for services in connection with the
distribution of the Fund's Class B shares and for services provided to Fund
shareholders. The plan calls for payments at an annual rate (based on average
net assets) of up to 0.25%. Because these fees are paid out of the Fund's assets
on an ongoing basis, they will increase the cost of your investment and may cost
you more over time than paying other types of sales charges.
DIVIDENDS, DISTRIBUTIONS AND TAX CONSIDERATIONS
Dividends and capital gains will be declared and paid annually.
For federal income tax purposes, distributions of investment income are
taxable as ordinary income. Taxes on distributions of capital gains are
determined by how long the Fund owned the investments that generated them,
rather than how long you have owned your shares. Distributions are taxable to
you even if they are paid from income or gains earned by the Fund before your
investment (and thus were included in the price you paid). Distributions from
gains from investments that the Fund owned for more than one year will be
taxable as capital gains (generally at a 20% rate for noncorporate
shareholders). Distributions of gains from investments that the Fund owned for
one year or less will be taxable as ordinary income. Distributions are taxable
whether you received them in cash or reinvested them in additional shares.
Any gain resulting from the sale or exchange of your shares will generally
also be subject to tax. You should consult your tax advisor for more information
on your own tax situation, including possible foreign, state and local taxes.
18
<PAGE>
For more information about STATE STREET EQUITY 500 INDEX FUND
The Fund's statement of additional information (SAI) includes additional
information about the Fund and is incorporated by reference into this document.
Additional information about the Fund's investments will be available in the
Fund's annual and semi-annual reports to shareholders. In the Fund's annual
report, you will find a discussion of the market conditions and investment
strategies that significantly affected the Fund's performance during its last
fiscal year.
The SAI and the Fund's annual and semi-annual reports will be available,
without charge, upon request. Shareholders in the Fund may make inquiries to the
Fund to receive such information by calling the Fund toll free at (--- )
- -----------.
Information about the Fund (including the SAI) can be reviewed and copied
at the Commission's Public Reference Room in Washington, D.C. Information on the
operation of the Public Reference Room may be obtained by calling the Commission
at 1-202-942-8090. Reports and other information about the Fund are available
free of charge on the EDGAR Database on the Commission's Internet site at
http://www.sec.gov; copies of this information also may be obtained, after
paying a duplicating fee, by electronic request at the following E-mail address:
[email protected], or by writing the Commission's Public Reference Section,
Washington, D.C. 20549-0102.
STATE STREET GLOBAL ADVISORS
TWO INTERNATIONAL PLACE
BOSTON, MASSACHUSETTS 02109
1-___-___-________
19
<PAGE>
State Street Institutional Investment Trust
PO Box 1713, Boston, Massachusetts 02105-1713
(617) 662-3968
STATE STREET EQUITY 400 INDEX FUND
Prospectus Dated March __, 2000
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a criminal offense.
20
<PAGE>
INTRODUCTION
The State Street Equity 400 Index Fund (the "Fund") is a mutual fund that
seeks to provide an investment return matching, as closely as possible before
expenses, the performance of the Standard & Poor's MidCap 400 Composite Stock
Price Index (the "S&P 400 Index"). The Fund is a series of the State Street
Institutional Investment Trust (the "Trust"), which is an open-end management
investment company organized as a business trust under the laws of the
Commonwealth of Massachusetts. State Street Bank and Trust Company, acting
through its division, State Street Global Advisors (the "Adviser"), is the
investment adviser to the Fund and to the portfolio in which it invests.
RISK/RETURN SUMMARY
INVESTMENT OBJECTIVE. The Fund's investment objective is to match as
closely as possible, before expenses, the performance of the S&P 400 Index. The
Fund seeks to achieve its investment objective by investing substantially all of
its investable assets in a corresponding portfolio (the "Portfolio") of State
Street Master Trust that has the same investment objective as, and investment
policies that are substantially similar to those of, the Fund. In reviewing the
investment objective and policies of the Fund below, you should assume that the
investment objective and policies of the Portfolio are the same in all material
respects as those of the Fund (and that, at times when the Fund has invested its
assets in the Portfolio, the descriptions below of the Fund's investment
strategies and risks should be read as also applicable to the Portfolio). There
is no assurance that the Fund will achieve its investment objective.
PRINCIPAL INVESTMENT STRATEGIES. The Fund 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 Fund, using a "passive" or "indexing"
investment approach, attempts to match, before expenses, 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 significant portion of the market value of all stocks publicly
traded in the United States. The Adviser seeks a correlation of 0.95 or better
between the Fund's performance and the performance of the Index. (1.00 would
represent perfect correlation.)
The Fund 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 Fund may purchase a sample of
the stocks in the Index in proportions expected by the Adviser to match
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 Fund 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.
21
<PAGE>
In addition, the Fund 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 Fund might do so, for example, in order to
increase its investment exposure pending investment of cash in the stocks
comprising the Index. Alternatively, the Fund 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 Fund 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 Fund. The Fund may also enter into other derivatives
transactions, including the purchase or sale of options or enter into swap
transactions, to assist in matching the performance of the Index.
PRINCIPAL RISKS.
- - 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 Fund's return may not match the return of the Index for a number of
reasons. For example, the Fund incurs a number of operating expenses not
applicable to the Index, and incurs costs in buying and selling securities.
The Fund may not be fully invested at times, either as a result of cash
flows into the Fund or reserves of cash held by the Fund 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 Fund's shares will change in value, and YOU COULD LOSE MONEY BY INVESTING IN
THE FUND. An investment in the Fund is not a deposit with a bank and is not
insured or guaranteed by the federal deposit insurance corporation or any other
government agency.
PERFORMANCE INFORMATION.
Performance information for the Fund has been omitted because the Fund had not
commenced investment operations as of the date of this Prospectus.
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and
hold shares of the Fund. As a shareholder in a Portfolio, the Fund bears its
ratable share of the Portfolio's expenses, including advisory and administrative
fees, and at the same time
22
<PAGE>
continues to pay its own fees and expenses. The table and the Example reflect
the expenses of both the Fund and the Portfolio.
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets)
<TABLE>
<S> <C>
Management Fees(1) 0.08%
-----
Distribution (12b-1) Fees 0.25%
-----
Other Expenses 0.10%
-----
Total Annual Fund Operating Expenses 0.43%
-----
</TABLE>
EXAMPLE: This Example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 in the Fund for the time periods indicated and then redeem all of
your shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
<TABLE>
<CAPTION>
1 year 3 years
<S> <C>
$44 $138
</TABLE>
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 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 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 & 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 5 400,"
"Standard & Poor's 400" and "400" are trademarks of The McGraw-Hill Companies,
Inc. and have been licensed for use by the Fund. The Fund is not sponsored,
endorsed, sold or promoted by S&P, and S&P makes no representation regarding the
advisability of investing in the Fund.
INDEX FUTURES CONTRACTS AND RELATED OPTIONS. The Fund 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
- --------------------
(1) This fee represents the advisory fee paid by the corresponding Portfolio of
the State Street Master Trust.
23
<PAGE>
future date. Depending on the change in value of the index between the time when
the Fund enters into and terminates an index future or option transaction, the
Fund 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 Fund and the return of the Index. In
addition, the Fund 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 Fund and the
return of the Index.
OTHER DERIVATIVE TRANSACTIONS. The Fund 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 Fund'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 Fund may enter into
repurchase agreements and securities loans. Under a repurchase agreement, the
Fund 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 Fund's cost plus interest. Under a securities loan, the Fund
lends portfolio securities. The Fund 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 Fund bears a risk of loss if the other party defaults on its
obligation and the Fund 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 Fund may be
treated as an unsecured creditor and be required to return the underlying
collateral to the other party's estate.
CHANGES IN POLICIES. The Trust's Trustees may change the Fund's investment
strategies and other policies without shareholder approval, except as otherwise
indicated. The Trustees will not materially change the Fund's investment
objective without shareholder approval.
MANAGEMENT AND ORGANIZATION
THE FUND AND THE PORTFOLIO. State Street Institutional Investment Trust is
an open-end management investment company. It was organized as a business trust
under the laws of The Commonwealth of Massachusetts on February ___, 2000. The
Fund is a separate diversified series of the Trust. The Portfolio in which the
Fund invests is
24
<PAGE>
managed under the general oversight of the Board of Trustees of the State Street
Master Trust. State Street, through its State Street Global Advisors division,
has served as investment adviser to the Portfolio since its inception.
The Trustees of the Fund are responsible for generally overseeing the
investments of the Fund's shares. If the Adviser were to invest the Fund's
assets directly, it would, subject to such policies as the Trustees may
determine, furnish a continuing investment program for the Fund and makes
investment decisions on its behalf.
THE ADVISER. The Fund has entered into an investment advisory agreement
with State Street pursuant to which the Adviser would manage the Fund's assets
directly in the event that the Fund were to cease investing substantially all of
its assets in the Portfolio. State Street does not receive any fees from the
Fund under that agreement so long as the Fund continues to invest substantially
all of its assets in the Portfolio or in another investment company.
The Adviser places all orders for purchases and sales of the Fund's (or the
underlying 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 Fund or
Portfolio in accordance with procedures adopted by the Trustees under the 1940
Act, which require periodic review of these transactions.
As of December 31, 1999, the Adviser managed approximately $672 billion in
assets. The Adviser's principal address is Two International Place, Boston,
Massachusetts 02110.
THE ADMINISTRATOR, CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT. State
Street is the Administrator for the Fund and the Custodian for the Fund's
assets, and serves as the Transfer Agent to the Fund. As compensation for its
services as Administrator (and for assuming ordinary operating expenses of the
Fund, including ordinary legal and audit expenses), State Street receives an
administrative fee at an annual rate of 0.10% of average daily net assets of the
Fund.
THE LENDING AGENT. State Street may serve as the lending agent for the
Trust. In such capacity, it would cause the delivery of loaned securities from
the Fund to borrowers, arrange for the return of loaned securities to the Fund
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.
(At any time when the Fund invests in the Portfolio, the Fund would not likely
engage directly in securities lending activities; State Street may serve as
lending agent for the Portfolio on the same terms.)
25
<PAGE>
SHAREHOLDER INFORMATION
DETERMINATION OF NET ASSET VALUE. The Fund's net asset value is
calculated on each day the New York Stock Exchange (the "NYSE") is open as
of the close of trading on the NYSE. The net asset value is based on the
market value of the securities held in the Fund. The net asset value per
share is calculated by dividing the value of the net asset value of the Fund
by the number of shares outstanding. If quotations are not readily available,
the portfolio securities will be valued by methods approved by the Trustees
intended to reflect fair value.
PURCHASING SHARES. Investors pay no sales load to invest in this Fund. The
price for Fund shares is the net asset value per share. Orders will be priced at
the net asset value next calculated after the order is accepted by the Fund.
There is no minimum initial investment in the Fund, although the Trustees
may impose a minimum initial investment amount at any time. There is no minimum
subsequent investment. The Fund 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 Fund's custodian bank by a Federal Reserve
Bank) or securities acceptable to the Adviser. (Please consult your tax adviser
regarding in-kind transactions.) The Fund reserves the right to cease accepting
investments at any time or to reject any investment order.
REDEEMING SHARES. 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 Fund. The Fund 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 Fund 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 Fund will normally redeem in-kind to the investor. 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.
DISTRIBUTION/SERVICING (12b-1) PLAN
The Fund has adopted a distribution plan under which the Fund may
compensate its distributor (or others) for services in connection with the
distribution of the Fund's shares and for services provided to Fund
shareholders. The plan calls for payments at an annual rate (based on average
net assets) of up to 0.25%. Because these fees are paid out of the Fund's assets
on an ongoing basis, they will increase the cost of your investment and may cost
you more over time than paying other types of sales charges.
DIVIDENDS, DISTRIBUTIONS AND TAX CONSIDERATIONS
26
<PAGE>
Dividends and capital gains of the Fund will be declared and paid annually.
For federal income tax purposes, distributions of investment income are
taxable as ordinary income. Taxes on distributions of capital gains are
determined by how long the Fund owned the investments that generated them,
rather than how long you have owned your shares. Distributions are taxable to
you even if they are paid from income or gains earned by the Fund before your
investment (and thus were included in the price you paid). Distributions from
gains from investments that the Fund owned for more than one year will be
taxable as capital gains (generally at a 20% rate for noncorporate
shareholders). Distributions of gains from investments that the Fund owned for
one year or less will be taxable as ordinary income. Distributions are taxable
whether you received them in cash or reinvested them in additional shares.
Any gain resulting from the sale or exchange of your shares will generally
also be subject to tax. You should consult your tax advisor for more information
on your own tax situation, including possible foreign, state and local taxes.
27
<PAGE>
For more information about STATE STREET EQUITY 400 INDEX FUND:
The Fund's statement of additional information (SAI) includes additional
information about the Fund and is incorporated by reference into this document.
Additional information about the Fund's investments will be available in the
Fund's annual and semi-annual reports to shareholders after the Fund has been in
existence for a calendar year. In the Fund's annual report, you will find a
discussion of the market conditions and investment strategies that significantly
affected the Fund's performance during its last fiscal year.
The SAI and the Fund's annual and semi-annual reports are available,
without charge, upon request. Shareholders in the Fund may make inquiries to the
Fund to receive such information by calling the Fund toll free at (--- )
- -----------.
Information about the Fund (including the SAI) can be reviewed and copied
at the Commission's Public Reference Room in Washington, D.C. Information on the
operation of the Public Reference Room may be obtained by calling the Commission
at 1-202-942-8090. Reports and other information about the Fund are available
free of charge on the EDGAR Database on the Commission's Internet site at
http://www.sec.gov; copies of this information also may be obtained, after
paying a duplicating fee, by electronic request at the following E-mail address:
[email protected], or by writing the Commission's Public Reference Section,
Washington, D.C. 20549-0102.
STATE STREET GLOBAL ADVISORS
TWO INTERNATIONAL PLACE
BOSTON, MASSACHUSETTS 02109
1-___-___-________
28
<PAGE>
State Street Institutional Investment Trust
PO Box 1713, Boston, Massachusetts 02105-1713
(617) 662-3968
STATE STREET EQUITY 2000 INDEX FUND
Prospectus Dated March __, 2000
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a criminal offense.
29
<PAGE>
INTRODUCTION
The State Street Equity 2000 Index Fund (the "Fund") is a mutual fund that
seets to provide an investment return matching, as closely as possible before
expenses, the performance of the Russell 2000 Index. The Fund is a series of the
State Street Institutional Investment Trust, which is an open-end management
investment company organized as a business trust under the laws of the
Commonwealth of Massachusetts. State Street Bank and Trust Company, acting
through its division, State Street Global Advisors (the "Adviser"), is the
investment adviser to the Fund and to the portfolio in which it invests.
RISK/RETURN SUMMARY
INVESTMENT OBJECTIVE. The Fund's investment objective is to match as
closely as possible, before expenses, the performance of the Russell 2000 Index.
The Fund seeks to achieve its investment objective by investing substantially
all of its investable assets in a corresponding portfolio (the "Portfolio") of
State Street Master Trust that has the same investment objective as, and
investment policies that are substantially similar to those of, the Fund. In
reviewing the investment objective and policies of the Fund below, you should
assume that the investment objective and policies of the Portfolio are the same
in all material respects as those of the Fund (and that, at times when the Fund
has invested its assets in the Portfolio, the descriptions below of the Fund's
investment strategies and risks should be read as also applicable to the
Portfolio). There is no assurance that the Fund will achieve its investment
objective.
PRINCIPAL INVESTMENT STRATEGIES. The Fund 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.
The Fund, using an "indexing" investment approach, attempts to match,
before expenses, the performance of the Russell 2000 Index. The Adviser seeks a
correlation of 0.95 or better between the Fund's performance and the performance
of the Index. (1.00 would represent perfect correlation.)
The Fund 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 Fund may purchase a sample of the stocks
in the Index in proportions expected by the Adviser to match 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 Fund 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.
30
<PAGE>
In addition, the Fund 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 Fund might do so, for example, in
order to increase its investment exposure pending investment in debt securities.
Alternatively, the Fund 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 Fund 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 Fund. The Fund may also enter into other derivatives transactions, including
the purchase or sale of options or enter into swap transactions, to assist in
matching the performance of the Index.
PRINCIPAL RISKS.
- - 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 Fund'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 Fund incurs a number of operating expenses not applicable to the
Index, and incurs costs in buying and selling securities. The Fund may not
be fully invested at times, either as a result of cash flows into the Fund
or reserves of cash held by the Fund 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 match the performance of the Index may
not correlate precisely with the return on the Index.
The Fund's shares will change in value, and YOU COULD LOSE MONEY BY INVESTING IN
THE FUND. An investment in the Fund is not a deposit with a bank and is not
insured or guaranteed by the federal deposit insurance corporation or any other
government agency.
PERFORMANCE INFORMATION.
Performance information for the Fund has been omitted because the Fund had not
commenced investment operations as of the date of this Prospectus.
FEES AND EXPENSES
31
<PAGE>
This table describes the fees and expenses that you may pay if you buy and
hold shares of the Fund. As a shareholder in a Portfolio, the Fund bears its
ratable share of the Portfolio's expenses, including advisory and administrative
fees, and at the same time continues to pay its own fees and expenses. The table
and the Example reflect the expenses of both the Fund and the Portfolio.
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets)
<TABLE>
<S> <C>
Management Fees(1) 0.10%
-----
Distribution (12b-1) Fees 0.25%
-----
Other Expenses 0.10%
-----
Total Annual Fund Operating Expenses 0.45%
-----
</TABLE>
EXAMPLE: This Example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 in the Fund for the time periods indicated and then redeem all of
your shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
<TABLE>
<CAPTION>
1 year 3 years
<S> <C>
$46 $145
</TABLE>
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 Index. 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 Fund. 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.
32
<PAGE>
INDEX FUTURES CONTRACTS AND RELATED OPTIONS. The Fund 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 Fund enters into and terminates an index future or
option transaction, the Fund 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 Fund
and the return of the Index. In addition, the Fund 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 Fund and the return of the Index.
OTHER DERIVATIVE TRANSACTIONS. The Fund 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 Fund'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 Fund 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 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 Fund may enter into
repurchase agreements and securities loans. Under a repurchase agreement, the
Fund 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 Fund's cost plus interest. Under a securities loan, the Fund
lends portfolio securities. The Fund 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
33
<PAGE>
collateralized at all times, the Fund bears a risk of loss if the other party
defaults on its obligation and the Fund 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 Fund
may be treated as an unsecured creditor and be required to return the underlying
collateral to the other party's estate.
CHANGES IN POLICIES. The Trust's Trustees may change the Fund's investment
strategies and other policies without shareholder approval, except as otherwise
indicated. The Trustees will not materially change the Fund's investment
objective without shareholder approval.
MANAGEMENT AND ORGANIZATION
THE FUND AND THE PORTFOLIO. State Street Institutional Investment Trust is
an open-end management investment company. It was organized as a business trust
under the laws of The Commonwealth of Massachusetts on February ___, 2000. The
Fund is a separate diversified series of the Trust. The Portfolio in which the
Fund invests is managed under the general oversight of the Board of Trustees of
the State Street Master Trust. State Street, through its State Street Global
Advisors division, has served as investment adviser to the Portfolio since its
inception.
The Trustees of the Fund are responsible for generally overseeing the
investments of the Fund's shares. If the Adviser were to invest the Fund's
assets directly, it would, subject to such policies as the Trustees may
determine, furnish a continuing investment program for the Fund and makes
investment decisions on its behalf.
THE ADVISER. The Fund has entered into an investment advisory agreement
with State Street pursuant to which the Adviser would manage the Fund's assets
directly in the event that the Fund were to cease investing substantially all of
its assets in the Portfolio. State Street does not receive any fees from the
Fund under that agreement so long as the Fund continues to invest substantially
all of its assets in the Portfolio or in another investment company.
The Adviser places all orders for purchases and sales of the Fund's (or the
underlying 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 Fund or
Portfolio in accordance with procedures adopted by the Trustees under the 1940
Act, which require periodic review of these transactions.
As of December 31, 1999, the Adviser managed approximately $672 billion in
assets. The Adviser's principal address is Two International Place, Boston,
Massachusetts 02110.
THE ADMINISTRATOR, CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT. State
Street is the Administrator for the Fund and the Custodian for the Fund's
assets, and
34
<PAGE>
serves as the Transfer Agent to the Fund. As compensation for its services as
Administrator (and for assuming ordinary operating expenses of the Fund,
including ordinary legal and audit expenses), State Street receives an
administrative fee at an annual rate of 0.10% of average daily net assets of the
Fund.
THE LENDING AGENT. State Street may serve as the lending agent for the
Trust. In such capacity, it would cause the delivery of loaned securities from
the Fund to borrowers, arrange for the return of loaned securities to the Fund
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.
(At any time when the Fund invests in the Portfolio, the Fund would not likely
engage directly in securities lending activities; State Street may serve as
lending agent for the Portfolio on the same terms.)
SHAREHOLDER INFORMATION
DETERMINATION OF NET ASSET VALUE. The Fund's net asset value is
calculated on each day the New York Stock Exchange (the "NYSE") is open as
of the close of trading on the NYSE. The net asset value is based on the
market value of the securities held in the Fund. The net asset value per
share is calculated by dividing the value of the net asset value of the Fund
by the number of shares outstanding. If quotations are not readily available,
the portfolio securities will be valued by methods approved by the Trustees
intended to reflect fair value.
PURCHASING SHARES. Investors pay no sales load to invest in this Fund. The
price for Fund shares is the net asset value per share. Orders will be priced at
the net asset value next calculated after the order is accepted by the Fund.
There is no minimum initial investment in the Fund, although the Trustees
may impose a minimum initial investment amount at any time. There is no minimum
subsequent investment. The Fund 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 Fund's custodian bank by a Federal Reserve
Bank) or securities acceptable to the Adviser. (Please consult your tax adviser
regarding in-kind transactions.) The Fund reserves the right to cease accepting
investments at any time or to reject any investment order.
REDEEMING SHARES. 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 Fund. The Fund 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 Fund 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
35
<PAGE>
request of an investor, the Fund will normally redeem in-kind to the investor.
Investments in the Fund 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.
DISTRIBUTION/SERVICING (12b-1) PLAN
The Fund has adopted a distribution plan under which the Fund may
compensate its distributor (or others) for services in connection with the
distribution of the Fund's shares and for services provided to Fund
shareholders. The plan calls for payments at an annual rate (based on average
net assets) of up to 0.25%. Because these fees are paid out of the Fund's assets
on an ongoing basis, they will increase the cost of your investment and may cost
you more over time than paying other types of sales charges.
DIVIDENDS, DISTRIBUTIONS AND TAX CONSIDERATIONS
Dividends and capital gains of the Fund will be declared and paid annually.
For federal income tax purposes, distributions of investment income are
taxable as ordinary income. Taxes on distributions of capital gains are
determined by how long the Fund owned the investments that generated them,
rather than how long you have owned your shares. Distributions are taxable to
you even if they are paid from income or gains earned by the Fund before your
investment (and thus were included in the price you paid). Distributions from
gains from investments that the Fund owned for more than one year will be
taxable as capital gains (generally at a 20% rate for noncorporate
shareholders). Distributions of gains from investments that the Fund owned for
one year or less will be taxable as ordinary income. Distributions are taxable
whether you received them in cash or reinvested them in additional shares.
Any gain resulting from the sale or exchange of your shares will generally
also be subject to tax. You should consult your tax advisor for more information
on your own tax situation, including possible foreign, state and local taxes.
36
<PAGE>
For more information about STATE STREET EQUITY 2000 INDEX FUND:
The Fund's statement of additional information (SAI) includes additional
information about the Fund and is incorporated by reference into this document.
Additional information about the Fund's investments will be available in the
Fund's annual and semi-annual reports to shareholders after the Fund has been in
existence for a calendar year. In the Fund's annual report, you will find a
discussion of the market conditions and investment strategies that significantly
affected the Fund's performance during its last fiscal year.
The SAI and the Fund's annual and semi-annual reports are available,
without charge, upon request. Shareholders in the Fund may make inquiries to the
Fund to receive such information by calling the Fund toll free at (--- )
- -----------.
Information about the Fund (including the SAI) can be reviewed and copied
at the Commission's Public Reference Room in Washington, D.C. Information on the
operation of the Public Reference Room may be obtained by calling the Commission
at 1-202-942-8090. Reports and other information about the Fund are available
free of charge on the EDGAR Database on the Commission's Internet site at
http://www.sec.gov; copies of this information also may be obtained, after
paying a duplicating fee, by electronic request at the following E-mail address:
[email protected], or by writing the Commission's Public Reference Section,
Washington, D.C. 20549-0102.
STATE STREET GLOBAL ADVISORS
TWO INTERNATIONAL PLACE
BOSTON, MASSACHUSETTS 02109
1-___-___-________
37
<PAGE>
State Street Institutional Investment Trust
PO Box 1713, Boston, Massachusetts 02105-1713
(617) 662-3968
STATE STREET MSCI-Registered Trademark- EAFE-Registered Trademark- INDEX FUND
Prospectus Dated March __, 2000
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a criminal offense.
38
<PAGE>
INTRODUCTION
The State Street MSCI-Registered Trademark- EAFE-Registered Trademark-
Index Fund (the "Fund") is a mutual fund that seeks to provide an investment
return matching, as closely as possible before expenses, the performance of
the Morgan Stanley Capital International Europe, Australasia, Far East Index
(the "MSCI-Registered Trademark- EAFE-Registered Trademark- Index"). The Fund
is a series of the State Street Institutional Investment Trust (the "Trust"),
which is an open-end management investment company organized under the laws
of the Commonwealth of Massachusetts. State Street Bank and Trust Company,
acting through its division, State Street Global Advisors (the "Adviser"), is
the investment adviser to the Fund and to the portfolio in which it invests.
RISK/RETURN SUMMARY
INVESTMENT OBJECTIVE. The Fund's investment objective is to match as
closely as possible, before expenses, the performance of the MSCI-Registered
Trademark- EAFE-Registered Trademark- Index. The Fund seeks to achieve its
investment objective by investing substantially all of its investable assets in
a corresponding portfolio (the "Portfolio") of State Street Master Trust that
has the same investment objective as, and investment policies that are
substantially similar to those of, the Fund. In reviewing the investment
objective and policies of the Fund below, you should assume that the investment
objective and policies of the Portfolio are the same in all material respects
as those of the Fund (and that, at times when the Fund has invested its assets
in the Portfolio, the descriptions below of the Fund's investment strategies
and risks should be read as also applicable to the Portfolio). There is no
assurance that the Fund will achieve its investment objective.
PRINCIPAL INVESTMENT STRATEGIES. The Fund 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 Fund, using a "passive" or "indexing"
investment approach, attempts to replicate, before expenses, the performance of
the MSCI-Registered Trademark- EAFE-Registered Trademark- Index. The
MSCI-Registered Trademark- EAFE-Registered Trademark- 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). The Adviser seeks a correlation of 0.95 or better between the Fund's
performance and the performance of the Index. (1.00 would represent perfect
correlation.)
The Fund 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 Fund may purchase a sample of the stocks
in the Index in proportions expected by the Adviser to match 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 Fund 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.
39
<PAGE>
In addition, the Fund 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 Fund might do so, for example, in order to
increase its investment exposure pending investment of cash in the stocks
comprising the Index. Alternatively, the Fund 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 Fund 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 Fund. The Fund may also enter into other derivatives
transactions, including the purchase or sale of options or enter into swap
transactions, to assist in matching the performance of the Index.
PRINCIPAL RISKS.
- - 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 Fund's return may not match the return of the Index for a number of
reasons. For example, the Fund incurs a number of operating expenses not
applicable to the Index, and incurs costs in buying and selling securities.
The Fund may not be fully invested at times, either as a result of cash
flows into the Fund or reserves of cash held by the Fund 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 Fund's shares will change in value, and YOU COULD LOSE MONEY BY INVESTING IN
THE FUND. An investment in the Fund is not a deposit with a bank and is not
insured or guaranteed by the federal deposit insurance corporation or any other
government agency.
PERFORMANCE INFORMATION.
Performance information for the Fund has been omitted because the Fund had not
commenced investment operations as of the date of this Prospectus.
FEES AND EXPENSES
40
<PAGE>
The following table describes the fees and expenses that you may pay if you
buy and hold shares of the Fund. As a shareholder in a Portfolio, the Fund bears
its ratable share of the Portfolio's expenses, including advisory and
administrative fees, and at the same time continues to pay its own fees and
expenses. The table and the Example reflect the expenses of both the Fund and
the Portfolio.
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets)
<TABLE>
<S> <C>
Management Fees(1) 0.15%
-----
Distribution (12b-1) Fees 0.25%
-----
Other Expenses 0.10%
-----
Total Annual Fund Operating Expenses 0.50%
-----
</TABLE>
EXAMPLE: This Example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 in the Fund for the time periods indicated and then redeem all of
your shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
<TABLE>
<CAPTION>
1 year 3 years
<S> <C>
$51 $161
</TABLE>
OTHER INVESTMENT CONSIDERATIONS AND RISKS
THE MSCI-Registered Trademark- EAFE-Registered Trademark- INDEX. The
MSCI-Registered Trademark- EAFE-Registered Trademark- Index is an arithmetic,
market value-weighted average of the performance of over 1,000 securities
listed on the stock exchanges of the countries determined by MSCI-Registered
Trademark-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-Registered Trademark-, arises from several factors, the
most common of which is minimum gross domestic product per capita. The
MSCI-Registered Trademark- EAFE-Registered Trademark- Index is structured to
represent the opportunities available to an international investor in
developed markets. MSCI-Registered Trademark- targets 60% of the available
market capitalization of each country for inclusion in the Index. Securities
selected by MSCI-Registered Trademark- for inclusion in the Index must have
acceptable levels of liquidity and free float. MSCI-Registered Trademark-
also avoids inclusion of companies that 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-Registered Trademark- EAFE-Registered
Trademark- Index in no way implies that MSCI-Registered Trademark- believes
41
<PAGE>
the stock to be an attractive investment, nor is MSCI-Registered Trademark- a
sponsor or in any way affiliated with the Fund. The MSCI-Registered Trademark-
EAFE-Registered Trademark- Index is the exclusive property of MSCI-Registered
Trademark-. Morgan Stanley Capital International is a service mark of
MSCI-Registered Trademark- and has been licensed for use by the Trust.
INDEX FUTURES CONTRACTS AND RELATED OPTIONS. The Fund 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 Fund enters into and terminates an index future or
option transaction, the Fund 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 Fund
and the return of the Index. In addition, the Fund 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 Fund and the return of the Index.
OTHER DERIVATIVE TRANSACTIONS. The Fund 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 Fund'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 Fund may enter into
repurchase agreements and securities loans. Under a repurchase agreement, the
Fund 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 Fund's cost plus interest. Under a securities loan, the Fund
lends portfolio securities. The Fund 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 Fund bears a risk of loss if the other party defaults on its
obligation and the Fund 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 Fund may be
treated as an unsecured creditor and be required to return the underlying
collateral to the other party's estate.
CHANGES IN POLICIES. The Trust's Trustees may change the Fund's investment
strategies and other policies without shareholder approval, except as otherwise
indicated.
42
<PAGE>
The Trustees will not materially change the Fund's investment objective without
shareholder approval.
MANAGEMENT AND ORGANIZATION
THE FUND AND THE PORTFOLIO. State Street Institutional Investment Trust is
an open-end management investment company. It was organized as a business trust
under the laws of The Commonwealth of Massachusetts on February ___, 2000. The
Fund is a separate diversified series of the Trust. The Portfolio in which the
Fund invests is managed under the general oversight of the Board of Trustees of
the State Street Master Trust. State Street, through its State Street Global
Advisors division, has served as investment adviser to the Portfolio since its
inception.
The Trustees of the Fund are responsible for generally overseeing the
investments of the Fund's shares. If the Adviser were to invest the Fund's
assets directly, it would, subject to such policies as the Trustees may
determine, furnish a continuing investment program for the Fund and makes
investment decisions on its behalf.
THE ADVISER. The Fund has entered into an investment advisory agreement
with State Street pursuant to which the Adviser would manage the Fund's assets
directly in the event that the Fund were to cease investing substantially all of
its assets in the Portfolio. State Street does not receive any fees from the
Fund under that agreement so long as the Fund continues to invest substantially
all of its assets in the Portfolio or in another investment company.
The Adviser places all orders for purchases and sales of the Fund's (or the
underlying 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 Fund or
Portfolio in accordance with procedures adopted by the Trustees under the 1940
Act, which require periodic review of these transactions.
As of December 31, 1999, the Adviser managed approximately $672 billion in
assets. The Adviser's principal address is Two International Place, Boston,
Massachusetts 02110.
THE ADMINISTRATOR, CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT. State
Street is the Administrator for the Fund and the Custodian for the Fund's
assets, and serves as the Transfer Agent to the Fund. As compensation for its
services as Administrator (and for assuming ordinary operating expenses of the
Fund, including ordinary legal and audit expenses), State Street receives an
administrative fee at an annual rate of 0.10% of average daily net assets of the
Fund.
THE LENDING AGENT. State Street may serve as the lending agent for the
Trust. In such capacity, it would cause the delivery of loaned securities from
the Fund to borrowers, arrange for the return of loaned securities to the Fund
at the termination of
43
<PAGE>
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. (At any time when the
Fund invests in the Portfolio, the Fund would not likely engage directly in
securities lending activities; State Street may serve as lending agent for the
Portfolio on the same terms.)
SHAREHOLDER INFORMATION
DETERMINATION OF NET ASSET VALUE. The Fund's net asset value is
calculated on each day the New York Stock Exchange (the "NYSE") is open as
of the close of trading on the NYSE. The net asset value is based on the
market value of the securities held in the Fund. The net asset value per
share is calculated by dividing the value of the net asset value of the Fund
by the number of shares outstanding. If quotations are not readily available,
the portfolio securities will be valued by methods approved by the Trustees
intended to reflect fair value.
PURCHASING SHARES. Investors pay no sales load to invest in this Fund. The
price for Fund shares is the net asset value per share. Orders will be priced at
the net asset value next calculated after the order is accepted by the Fund.
There is no minimum initial investment in the Fund, although the Trustees
may impose a minimum initial investment amount at any time. There is no minimum
subsequent investment. The Fund 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 Fund's custodian bank by a Federal Reserve
Bank) or securities acceptable to the Adviser. (Please consult your tax adviser
regarding in-kind transactions.) The Fund reserves the right to cease accepting
investments at any time or to reject any investment order.
REDEEMING SHARES. 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 Fund. The Fund 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 Fund 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 Fund will normally redeem in-kind to the investor. 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.
DISTRIBUTION/SERVICING (12b-1) PLAN
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<PAGE>
The Fund has adopted a distribution plan under which the Fund may
compensate its distributor (or others) for services in connection with the
distribution of the Fund's shares and for services provided to Fund
shareholders. The plan calls for payments at an annual rate (based on average
net assets) of up to 0.25%. Because these fees are paid out of the Fund's assets
on an ongoing basis, they will increase the cost of your investment and may cost
you more over time than paying other types of sales charges.
DIVIDENDS, DISTRIBUTIONS AND TAX CONSIDERATIONS
Dividends and capital gains of the Fund will be declared and paid annually.
For federal income tax purposes, distributions of investment income are
taxable as ordinary income. Taxes on distributions of capital gains are
determined by how long the Fund owned the investments that generated them,
rather than how long you have owned your shares. Distributions are taxable to
you even if they are paid from income or gains earned by the Fund before your
investment (and thus were included in the price you paid). Distributions from
gains from investments that the Fund owned for more than one year will be
taxable as capital gains (generally at a 20% rate for noncorporate
shareholders). Distributions of gains from investments that the Fund owned for
one year or less will be taxable as ordinary income. Distributions are taxable
whether you received them in cash or reinvested them in additional shares.
The Fund's investments in foreign securities may be subject to foreign
withholding taxes. In that case, the Fund's yield on those securities would be
decreased. Shareholders may be entitled to claim a credit or deduction with
respect to foreign taxes. In addition, the Fund's investments in foreign
securities or foreign currencies may increase or accelerate the Fund's
recognition of ordinary income and may affect the timing or amount of the Fund's
distributions.
Any gain resulting from the sale or exchange of your shares will generally
also be subject to tax. You should consult your tax advisor for more information
on your own tax situation, including possible foreign, state and local taxes.
45
<PAGE>
For more information about STATE STREET MSCI-Registered Trademark-
EAFE-Registered Trademark- INDEX Fund:
The Fund's statement of additional information (SAI) includes additional
information about the Fund and is incorporated by reference into this document.
Additional information about the Fund's investments will be available in the
Fund's annual and semi-annual reports to shareholders after the Fund has been in
existence for a calendar year. In the Fund's annual report, you will find a
discussion of the market conditions and investment strategies that significantly
affected the Fund's performance during its last fiscal year.
The SAI and the Fund's annual and semi-annual reports are available,
without charge, upon request. Shareholders in the Fund may make inquiries to the
Fund to receive such information by calling the Fund toll free at (--- )
- -----------.
Information about the Fund (including the SAI) can be reviewed and copied
at the Commission's Public Reference Room in Washington, D.C. Information on the
operation of the Public Reference Room may be obtained by calling the Commission
at 1-202-942-8090. Reports and other information about the Fund are available
free of charge on the EDGAR Database on the Commission's Internet site at
http://www.sec.gov; copies of this information also may be obtained, after
paying a duplicating fee, by electronic request at the following E-mail address:
[email protected], or by writing the Commission's Public Reference Section,
Washington, D.C. 20549-0102.
STATE STREET GLOBAL ADVISORS
TWO INTERNATIONAL PLACE
BOSTON, MASSACHUSETTS 02109
1-___-___-________
46
<PAGE>
State Street Institutional Investment Trust
PO Box 1713, Boston, Massachusetts 02105-1713
(617) 662-3968
STATE STREET AGGREGATE BOND INDEX FUND
Prospectus Dated March __, 2000
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a criminal offense.
47
<PAGE>
INTRODUCTION
The State Street Aggregate Bond Index Fund (the "Fund") is a mutual fund
that seeks to provide an investment return matching, as closely as possible
before expenses, the performance of the Lehman Brothers Aggregate Bond Index
(the "LBAB Index"). The Fund is a series of the State Street Institutional
Investment Trust, which is an open-end management investment company organized
as a business trust under the laws of the Commonwealth of Massachusetts. State
Street Bank and Trust Company, acting through its division, State Street Global
Advisors (the "Adviser"), is the investment adviser to the Fund and to the
portfolio in which it invests.
RISK/RETURN SUMMARY
INVESTMENT OBJECTIVE. The Fund's investment objective is to match as
closely as possible, before expenses, the performance of the LBAB INDEX. The
Fund seeks to achieve its investment objective by investing investing
substantially all of its investable assets in a corresponding portfolio (the
"Portfolio") of State Street Master Trust that has the same investment objective
as, and investment policies that are substantially similar to those of, the
Fund. In reviewing the investment objective and policies of the Fund below, you
should assume that the investment objective and policies of the Portfolio are
the same in all material respects as those of the Fund (and that, at times when
the Fund has invested its assets in the Portfolio, the descriptions below of the
Fund's investment strategies and risks should be read as also applicable to the
Portfolio). There is no assurance that the Fund will achieve its investment
objective.
PRINCIPAL INVESTMENT STRATEGIES. The Fund 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.
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 Fund intends to select securities that
the Adviser believes will track the LBAB Index in terms of industry weightings,
market capitalization and other characteristics.
The Fund 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 Fund invests may be fixed-income securities, zero-coupon
securities, or variable rate securities. In addition, the Fund may at times
purchase or sell futures contracts and options on the LBAB Index (or other
fixed-income securities indices), if and when they become available. The Fund
48
<PAGE>
might do so, for example, in order to adjust the interest-rate sensitivity of
the Fund 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 Fund 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 Fund. The Fund may also
enter into other derivatives transactions, including the purchase or sale of
options or entering into swap transactions, to assist in matching the
performance of the Index.
PRINCIPAL RISKS.
- - 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 Fund's investments may not make timely payments of interest
and principal or may fail to make such payments at all.
- - The Fund'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 Fund incurs a number of operating expenses not applicable to the
Index, and incurs costs in buying and selling securities. The Fund may not
be fully invested at times, either as a result of cash flows into the Fund
or reserves of cash held by the Fund to meet redemptions.
The Fund's shares will change in value, and YOU COULD LOSE MONEY BY INVESTING IN
THE FUND. An investment in the Fund is not a deposit with a bank and is not
insured or guaranteed by the federal deposit insurance corporation or any other
government agency.
PERFORMANCE INFORMATION.
Performance information for the Fund has been omitted because the Fund had not
commenced investment operations as of the date of this Prospectus.
49
<PAGE>
FEES AND EXPENSES
The following table describes the fees and expenses that you may pay if you
buy and hold shares of the Fund. As a shareholder in a Portfolio, the Fund bears
its ratable share of the Portfolio's expenses, including advisory and
administrative fees, and at the same time continues to pay its own fees and
expenses. The table and the Example reflect the expenses of both the Fund and
the Portfolio.
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets)
<TABLE>
<S> <C>
Management Fees(1) 0.10%
-----
Distribution (12b-1) Fees 0.25%
-----
Other Expenses 0.10%
-----
Total Annual Fund Operating Expenses 0.45%
-----
</TABLE>
EXAMPLE: This Example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 in the Fund for the time periods indicated and then redeem all of
your shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
<TABLE>
<CAPTION>
1 year 3 years
<S> <C>
$46 $145
</TABLE>
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
Fund is not sponsored, endorsed, sold, or promoted by Lehman Brothers, and
Lehman Brothers makes no representation regarding the advisability of investing
in the Fund.
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 Fund's investments will normally
include debt securities with
50
<PAGE>
longer maturities, although the Adviser will seek to ensure that the maturity
characteristics of the Fund 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 Fund's average maturity when that is least
desirable. The Fund 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 Fund may buy and sell futures
contracts on securities contained in the LBAB Index and options on those futures
contracts. An "futures contract" on debt securities (such as U.S. Treasury
securities) 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 futures
contract between the time when the Fund enters into and terminates an index
future or option transaction, the Fund 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 underlying security. In those cases, use of futures
contracts and related options might decrease the correlation between the return
of the Fund and the return of the LBAB Index. In addition, the Fund 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 Fund and the return of the LBAB Index.
OTHER DERIVATIVE TRANSACTIONS. The Fund 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 Fund'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 Fund may enter into
repurchase agreements and securities loans. Under a repurchase agreement, the
Fund 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 Fund's cost plus interest. Under a securities loan, the Fund
lends portfolio securities. The Fund 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 Fund bears a risk of loss if the other party defaults on its
obligation and the Fund 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 Fund may be
treated as an unsecured creditor and be required to return the underlying
collateral to the other party's estate.
51
<PAGE>
CHANGES IN POLICIES. The Trust's Trustees may change the Fund's investment
strategies and other policies without shareholder approval, except as otherwise
indicated. The Trustees will not materially change the Fund's investment
objective without shareholder approval.
MANAGEMENT AND ORGANIZATION
THE FUND AND THE PORTFOLIO. State Street Institutional Investment Trust is
an open-end management investment company. It was organized as a business trust
under the laws of The Commonwealth of Massachusetts on February ___, 2000. The
Fund is a separate diversified series of the Trust. The Portfolio in which the
Fund invests is managed under the general oversight of the Board of Trustees of
the Master Trust. State Street, through its State Street Global Advisors
division, has served as investment adviser to the Portfolio since its inception.
The Trustees of the Fund are responsible for generally overseeing the
investments of the Fund's shares. If the Adviser were to invest the Fund's
assets directly, it would, subject to such policies as the Trustees may
determine, furnish a continuing investment program for the Fund and makes
investment decisions on its behalf.
THE ADVISER. The Fund has entered into an investment advisory agreement
with State Street pursuant to which the Adviser would manage the Fund's assets
directly in the event that the Fund were to cease investing substantially all of
its assets in the Portfolio. State Street does not receive any fees from the
Fund under that agreement so long as the Fund continues to invest substantially
all of its assets in the Portfolio or in another investment company.
The Adviser places all orders for purchases and sales of the Fund's (or the
underlying 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 Fund or
Portfolio in accordance with procedures adopted by the Trustees under the 1940
Act, which require periodic review of these transactions.
As of December 31, 1999, the Adviser managed approximately $672 billion in
assets. The Adviser's principal address is Two International Place, Boston,
Massachusetts 02110.
THE ADMINISTRATOR, CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT. State
Street is the Administrator for the Fund and the Custodian for the Fund's
assets, and serves as the Transfer Agent to the Fund. As compensation for its
services as Administrator (and for assuming ordinary operating expenses of the
Fund, including ordinary legal and audit expenses), State Street receives an
administrative fee at an annual rate of 0.10% of average daily net assets of the
Fund.
52
<PAGE>
THE LENDING AGENT. State Street may serve as the lending agent for the
Trust. In such capacity, it would cause the delivery of loaned securities from
the Fund to borrowers, arrange for the return of loaned securities to the Fund
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.
(At any time when the Fund invests in the Portfolio, the Fund would not likely
engage directly in securities lending activities; State Street may serve as
lending agent for the Portfolio on the same terms.)
SHAREHOLDER INFORMATION
DETERMINATION OF NET ASSET VALUE. The Fund's net asset value is
calculated on each day the New York Stock Exchange (the "NYSE") is open as
of the close of trading on the NYSE. The net asset value is based on the
market value of the securities held in the Fund. The net asset value per
share is calculated by dividing the value of the net asset value of the Fund
by the number of shares outstanding. If quotations are not readily available,
the portfolio securities will be valued by methods approved by the Trustees
intended to reflect fair value.
PURCHASING SHARES. Investors pay no sales load to invest in this Fund. The
price for Fund shares is the net asset value per share. Orders will be priced at
the net asset value next calculated after the order is accepted by the Fund.
There is no minimum initial investment in the Fund, although the Trustees
may impose a minimum initial investment amount at any time. There is no minimum
subsequent investment. The Fund 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 Fund's custodian bank by a Federal Reserve
Bank) or securities acceptable to the Adviser. (Please consult your tax adviser
regarding in-kind transactions.) The Fund reserves the right to cease accepting
investments at any time or to reject any investment order.
REDEEMING SHARES. 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 Fund. The Fund 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 Fund 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 Fund will normally redeem in-kind to the investor. 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.
53
<PAGE>
DISTRIBUTION/SERVICING (12b-1) PLAN
The Fund has adopted a distribution plan under which the Fund may
compensate its distributor (or others) for services in connection with the
distribution of the Fund's shares and for services provided to Fund
shareholders. The plan calls for payments at an annual rate (based on average
net assets) of up to 0.25%. Because these fees are paid out of the Fund's assets
on an ongoing basis, they will increase the cost of your investment and may cost
you more over time than paying other types of sales charges.
DIVIDENDS, DISTRIBUTIONS AND TAX CONSIDERATIONS
Dividends and capital gains of the Fund will be declared and paid annually.
For federal income tax purposes, distributions of investment income are
taxable as ordinary income. Taxes on distributions of capital gains are
determined by how long the Fund owned the investments that generated them,
rather than how long you have owned your shares. Distributions are taxable to
you even if they are paid from income or gains earned by the Fund before your
investment (and thus were included in the price you paid). Distributions from
gains from investments that the Fund owned for more than one year will be
taxable as capital gains (generally at a 20% rate for noncorporate
shareholders). Distributions of gains from investments that the Fund owned for
one year or less will be taxable as ordinary income. Distributions are taxable
whether you received them in cash or reinvested them in additional shares.
Any gain resulting from the sale or exchange of your shares will generally
also be subject to tax. You should consult your tax advisor for more information
on your own tax situation, including possible foreign, state and local taxes.
54
<PAGE>
For more information about STATE STREET AGGREGATE BOND INDEX FUND:
The Fund's statement of additional information (SAI) includes additional
information about the Fund and is incorporated by reference into this document.
Additional information about the Fund's investments will be available in the
Fund's annual and semi-annual reports to shareholders after the Fund has been in
existence for a calendar year. In the Fund's annual report, you will find a
discussion of the market conditions and investment strategies that significantly
affected the Fund's performance during its last fiscal year.
The SAI and the Fund's annual and semi-annual reports are available,
without charge, upon request. Shareholders in the Fund may make inquiries to the
Fund to receive such information by calling the Fund toll free at (--- )
- -----------.
Information about the Fund (including the SAI) can be reviewed and copied
at the Commission's Public Reference Room in Washington, D.C. Information on the
operation of the Public Reference Room may be obtained by calling the Commission
at 1-202-942-8090. Reports and other information about the Fund are available
free of charge on the EDGAR Database on the Commission's Internet site at
http://www.sec.gov; copies of this information also may be obtained, after
paying a duplicating fee, by electronic request at the following E-mail address:
[email protected], or by writing the Commission's Public Reference Section,
Washington, D.C. 20549-0102.
STATE STREET GLOBAL ADVISORS
TWO INTERNATIONAL PLACE
BOSTON, MASSACHUSETTS 02109
1-___-___-________
55
<PAGE>
STATE STREET INSTITUTIONAL INVESTMENT TRUST
STATE STREET EQUITY 400 INDEX FUND
STATE STREET EQUITY 500 INDEX FUND
STATE STREET EQUITY 2000 INDEX FUND
STATE STREET MSCI-Registered Trademark- EAFE-Registered Trademark- INDEX FUND
STATE STREET AGGREGATE BOND INDEX FUND
This following Statement of Additional Information includes additional
information about the Funds. The statement of Additional Information is not a
prospectus. To obtain a copy of a Fund's prospectus, please contact the Trust
at:
State Street Institutional Investment Trust
PO Box 1713
Boston, Massachusetts 02105-1713
(---) --------
This Statement of Additional Information dated March __, 2000 relates to the
Funds' prospectuses dated March __, 2000
56
<PAGE>
TABLE OF CONTENTS
Trust History
Description of the Fund and its Investments and Risks
Management of the Fund
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 Shares
Taxation of the Fund
Underwriters
Calculation of Performance Data
Financial Statements
57
<PAGE>
TRUST HISTORY
The Trust was organized as a business trust under the laws of The
Commonwealth of Massachusetts on February __, 2000.
The Trust is an open-end management investment company. Each of the
Equity 500 Index Fund, Equity 400 Index Fund, Equity 2000 Index Fund,
MSCI-Registered Trademark- EAFE-Registered Trademark- Index Fund and Aggregate
Bond Index Fund is a separate diversified series of the Trust.
DESCRIPTION OF FUND AND ITS INVESTMENTS AND RISKS
Each Fund prospectus contains information about the investment
objective and policies of that Fund. This statement of additional information
should only be read in conjunction with the prospectus of the Fund or Funds in
which you intend to invest. In addition to the principal investment strategies
and the principal risks of the Fund described in the Fund's prospectus, the Fund
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 State Street Equity 500 Index Fund 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 shares of the Fund or any member of the public regarding the
advisability of investing in securities generally or in the Fund particularly or
the ability of the S&P 500 Index to track general stock market performance.
S&P's only relationship to the Fund 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 Fund. S&P has no obligation to take the
needs of the Fund or the owners of shares of the Fund 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 price and number of
shares of the Fund or the timing of the issuance or sale of shares of the Fund,
or calculation of the equation by which shares of the Fund are redeemable for
cash.
S&P has no obligation or liability in connection with the
administration, marketing or trading of shares of the Fund.
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 Fund, owners of shares of the Fund
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
58
<PAGE>
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 State Street Equity 400 Index Fund 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 shares of the Fund or any member of the public regarding the
advisability of investing in securities generally or in the Fund particularly or
the ability of the S&P 400 Index to track general stock market performance.
S&P's only relationship to the Fund 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 Fund. S&P has no obligation to take the
needs of the Fund or the owners of shares of the Fund 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 price and number of
shares of the Fund or the timing of the issuance or sale of shares of the Fund,
or calculation of the equation by which shares of the Fund are redeemable for
cash.
S&P has no obligation or liability in connection with the
administration, marketing or trading of shares of the Fund.
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 Fund, owners of shares of the Fund
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 State Street Equity 2000 Index Fund is not sponsored, endorsed,
promoted by, or in any way affiliated with Frank Russell Company ("Russell").
Russell is not responsible for and has not reviewed the State Street Equity 2000
Index Fund or any associated literature or publications, and Russell makes no
representation or warranty, express or implied, as to their accuracy or
completeness, or otherwise. Russell reserves the right, at any time and without
notice, to alter, amend, terminate or in any way change the Russell 2000 Index.
Russell has no obligation to take the needs of any particular fund or its
participants or any other product or person into consideration in determining,
composing or calculating the Russell 2000 Index. Russell's publication of the
Index in no way suggests or implies an opinion by Russell as to the
attractiveness or appropriateness of investment in any or all securities upon
which the Index is based.
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Russell makes no representation, warranty or guarantee as to the accuracy,
completeness, reliability, or otherwise of the Russell 2000 Index or any data
included in the Index. Russell makes no representation or warranty regarding the
use, or the results of use, of the Russell 2000 Index or any data included
therein, or any security (or combination thereof) comprising the Index. Russell
makes no express or implied warranties, and expressly disclaims all warranties
of merchantability or fitness for a particular purpose with respect to the
Russell 2000 Index or any data or any security (or combination thereof) included
therein.
ADDITIONAL INFORMATION CONCERNING THE MSCI-Registered Trademark- EAFE-Registered
Trademark- INDEX
The State Street MSCI-Registered Trademark- EAFE-Registered Trademark-
Index Fund is not sponsored, endorsed, sold or promoted by MSCI-Registered
Trademark- or any affiliate of MSCI-Registered Trademark-. Neither
MSCI-Registered Trademark- 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-Registered Trademark- is the licensor of certain trademarks, service marks
and trade names of MSCI-Registered Trademark- and of the MSCI-Registered
Trademark- EAFE-Registered Trademark- Index which is determined, composed and
calculated by MSCI-Registered Trademark- without regard to the issuer of the
Fund or the Fund. MSCI-Registered Trademark- has no obligation to take the needs
of the issuer of this fund or the owners of shares of the Fund into
consideration in determining, composing or calculating the MSCI-Registered
Trademark- EAFE-Registered Trademark- Index. MSCI-Registered Trademark- is not
responsible for and has not participated in the determination of the timing of,
prices at, or quantities of shares of the Fund to be issued or in the
determination or calculation of the equation by which shares of the Fund are
redeemable for cash. Neither MSCI-Registered Trademark- nor any other party has
any obligation or liability to owners of shares of the Fund in connection with
the administration, marketing or trading of shares of the Fund.
Although MSCI-Registered Trademark- shall obtain information for
inclusion in or for use in the calculation of the indexes from sources which
MSCI-Registered Trademark- considers reliable, neither MSCI-Registered
Trademark- nor any other party guarantees the accuracy and/or the completeness
of the indexes or any data included therein. Neither MSCI-Registered Trademark-
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-Registered Trademark- nor any other party makes any
express or implied warranties, and MSCI-Registered Trademark- 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-Registered Trademark- 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.
ADDITIONAL INFORMATION CONCERNING THE LBAB INDEX
The State Street Aggregate Bond Index Fund is not sponsored, endorsed,
sold or promoted by Lehman Brothers. Lehman Brothers makes no representation or
warranty,
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express or implied, to the owners of shares of the Fund or any member of the
public regarding the advisability of investing in securities generally or in the
Fund particularly or the ability of the LBAB Index to track general performance.
Lehman Brother's only relationship to the Fund 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
Fund. Lehman Brothers has no obligation to take the needs of the Fund or the
owners of shares of the Fund 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 price and number of shares of the Fund
or the timing of the issuance or sale of shares of the Fund. Lehman Brothers has
no obligation or liability in connection with the administration, marketing or
trading of shares of the Fund. 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 Fund, owners of shares of the Fund 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 Fund 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:
(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 Fund 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 Fund holds the foregoing
instruments its ability to track its corresponding Index may be adversely
effected.
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FUTURES CONTRACTS AND OPTIONS ON FUTURES
Each Fund 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 Fund 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 Fund 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 Fund 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
Each Fund may invest in illiquid securities. A Fund 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 FUND SECURITIES
Each Fund 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 Fund. The Fund 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 Fund would
have the right to call the loan and obtain the securities loaned at any
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time on notice of not more than five business days. In the event of bankruptcy
or other default of the borrower, the Fund 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 Fund 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 Fund 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 Funds may also invest in warrants which entitle the holder to
buy equity securities at a specific price for a specific period of time.
PURCHASE OF OTHER INVESTMENT COMPANY FUNDS
Each Fund 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
Fund's. These investments may be made temporarily, for example, to invest
uncommitted cash balances or, in limited circumstances, to assist in meeting
share holder redemptions.
REPURCHASE AGREEMENTS
Each Fund 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 Fund receives securities as collateral. Under
a repurchase agreement, the Fund purchases securities from a financial
institution that agrees to repurchase the securities at the Fund's original
purchase price plus interest within a specified time(normally one business day).
The Fund 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
Fund 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 Fund.
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U.S. GOVERNMENT SECURITIES
Each Fund 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 Fund 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 Fund until
settlement takes place. The Fund segregates liquid securities in an amount at
least equal to these commitments. When entering into a when-issued transaction,
the Fund will rely on the other party to consummate the transaction; if the
other party fails to do so, the Fund may be disadvantaged.
ADDITIONAL INVESTMENTS AND RISKS FOR THE MSCI-Registered Trademark-
EAFE-Registered Trademark- INDEX FUND AND THE AGGREGATE BOND INDEX FUND
REVERSE REPURCHASE AGREEMENTS
The MSCI-Registered Trademark- EAFE-Registered Trademark- Index Fund
and the Aggregate Bond Index Fund 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 Fund provides
securities as collateral. Under a reverse repurchase agreement, the Fund 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
Fund 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 Fund's ability to reacquire the
underlying securities.
TOTAL RETURN SWAPS
The MSCI-Registered Trademark- EAFE-Registered Trademark- Index Fund
and the Aggregate Bond Index Fund 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
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lower cost to the Fund than if the Fund had invested directly in an instrument
that yielded that desired return. A Fund's return on a swap will depend on the
ability of its counterparty to perform its obligations under the swap. The
Adviser will cause the Fund to enter into swap agreements only with
counterparties that would be eligible for consideration as repurchase agreement
counterparties under the Fund's repurchase agreement guidelines.
ADDITIONAL INVESTMENTS AND RISKS FOR THE MSCI-Registered Trademark-
EAFE-Registered Trademark- INDEX FUND
AMERICAN DEPOSITARY RECEIPTS (ADRS) AND EUROPEAN DEPOSITARY RECEIPTS (EDRS)
The MSCI-Registered Trademark- EAFE-Registered Trademark- Index Fund
may purchase American Depository Receipts and European Depository Receipts of
foreign corporations represented in the Fund'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 Fund 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 Fund's investment policies, the Fund'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
The MSCI-Registered Trademark- EAFE-Registered Trademark- Index Fund
may invest in foreign currency exchange contracts. The Fund 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 Fund'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 FUND
ASSET-BACKED SECURITIES
The Aggregate Bond Index Fund may invest in asset-backed securities.
Asset-backed securities represent undivided fractional interests in pools of
instruments, such as
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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 Fund has been exhausted, and if any
required payments of principal and interest are not made with respect to the
underlying loans, the Fund 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 Fund 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 Fund 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 Fund of a dollar
amount sufficient to make payment for the Fund securities to be purchased will
be segregated on a Fund'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 Fund 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 Fund may enter into interest rate swap
transactions with respect to any security it is entitled to hold. Interest rate
swaps involve the exchange by the Fund with another party of their respective
rights to receive interest, e.g., an exchange of floating rate payments for
fixed rate payments. The Fund 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
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anticipates purchasing at a later date. The Fund intends to use these
transactions as a hedge and not as a speculative investment.
INVESTMENT-GRADE BONDS
The Aggregate Bond Index Fund 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 Adviser 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 Fund 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 Fund may enter into "forward roll"
transactions with respect to mortgage-backed securities issued by GNMA, FNMA or
FHLMC. In a forward roll transaction, the Fund 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 Fund'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." Within these
parameters, however, the actual pools that are redelivered could be less
desirable than those originally rolled, especially with respect to prepayment
characteristics.
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SECTION 4(2) COMMERCIAL PAPER
The Aggregate Bond Index Fund 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 Fund 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 Fund's percentage limitations on illiquid securities
where the Adviser (pursuant to guidelines adopted by the Board) determines that
a liquid trading market exists.
VARIABLE AND FLOATING RATE SECURITIES
The Aggregate Bond Index Fund 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 Fund 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. In order to satisfy a requirement for qualification as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended (the
"Code"), the Aggregate Bond Index Fund must distribute at least 90% of its net
investment income, including the original issue discount accrued on zero coupon
bonds. Because the Fund will not receive cash payments on a current basis from
the issuer in respect of accrued original discount, the Fund may have to
distribute cash obtained from other sources in order to satisfy the 90%
distribution requirement. Such cash might be obtained from selling other
portfolio holdings of the Fund. In some circumstances such sales might be
necessary in order to
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satisfy cash distribution requirements even though investment considerations
might otherwise make it undesirable for the Fund to sell such securities at such
time.
INVESTMENT RESTRICTIONS
The portfolios in which State Street Equity 500 Index Fund, State
Street Equity 400 Index Fund, State Street Equity 2000 Index Fund, State Street
MSCI-Registered Trademark- EAFE-Registered Trademark- Index Fund and State
Street Aggregate Bond Index Fund invest have substantially the same investment
restrictions as their corresponding Portfolio. In reviewing the description of a
Fund's investment restrictions below, you should assume that the investment
restrictions of the corresponding Portfolio are the same in all material
respects as those of the Fund.
The Trust has adopted the following restrictions applicable to all of
the Funds, which may not be changed without the affirmative vote of a "majority
of the outstanding voting securities" of a Fund, 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 shares of
the Fund and (2) 67% or more of the shares present at a meeting if more than 50%
of the outstanding shares are present at the meeting in person or by proxy. A
Fund 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
Fund 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 Fund (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
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the U.S. government or its agencies or instrumentalities, or to securities
issued by other investment companies.
(7) With respect to 75% of its total assets, acquire more than 10% of
the outstanding voting securities of any issuer, provided that such limitation
does not apply to securities issued by other investment companies.
(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 Fund's total assets would be invested in any one industry.
(9) Issue any class of securities which is senior to the Fund's shares,
to the extent prohibited by the Investment Company Act of 1940, as amended.
In addition, it is contrary to each Fund's present policy, which may be
changed without shareholder 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 Fund'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 Fund, the other investment policies
described in this Statement or in the Prospectus are not fundamental and may be
changed by approval of the Trustees.
MANAGEMENT OF THE FUND
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.
- --------------------------------------------------------------------------------
Rina K. Spence Trustee, 2/00 - present; Founder, President
Age 50 and CEO Spence Center for Women's Health,
7 Acacia Street 1994 - 1998; President and CEO Emerson
Cambridge, MA 02138 Hospital and Emerson Health Systems, Inc.,
1984 - 1994.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
James Little President and Treasurer, 2/00 - present; CFO,
Age 64 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 $- retainer in addition to $- for each
in-person meeting and $- 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 December 31, 2000,
based on an estimated four in-person meetings:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
Name/Position Aggregate Pension or Estimated Total
Compensation Retirement Annual Compensation
from Trust Benefits Benefits Upon from Trust &
Accrued as Part Retirement Trust Complex
of Trust Part of Paid To
Trust Expenses Trustees
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Rina K. Spence, $0 $0 $0 $0
Trustee
- -----------------------------------------------------------------------------------------
</TABLE>
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
Not applicable.
INVESTMENT ADVISORY AND OTHER SERVICES
Under the terms of the Investment Advisory Agreement with the Adviser
(the "Advisory Agreement"), the Adviser is required to manage each Fund 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 bank holding company.
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State Street may have deposit, loan and other commercial banking
relationships with the issuers of obligations which may be purchased on behalf
of the Funds, 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 Funds that, in making its investment decisions, it would not
obtain or use material inside information in its possession or in the possession
of any of its affiliates. In making investment recommendations for a Fund, the
Adviser would not inquire or take into consideration whether an issuer of
securities proposed for purchase or sale by the Fund 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 would not
inquire or take into consideration whether securities of such customers were
held by any Fund managed by the Adviser or any such affiliate.
INVESTMENT ADVISORY AGREEMENTS
Each Fund currently invests all of its assets in a related Portfolio
that has the same investment objectives and substantially the same investment
policies as the relevant Fund. As long as a Fund remains completely invested in
a Portfolio (or any other investment company), State Street is not entitled to
receive any investment advisory fee with respect to the Fund. A Fund may
withdraw its investment from the related Portfolio at any time if the Trust's
Board of Trustees determines that it is in the best interests of the Fund and
its shareholders to do so. The Trust has retained the Adviser as investment
adviser to manage a Fund's assets in the event that the Fund withdraws its
investment from its related Portfolio.
State Street Global Advisors is the investment adviser to each of the
related Portfolios pursuant to an investment advisory agreement (the "Portfolio
Advisory Agreement") between State Street Bank and Trust Company ("State
Street") and State Street Master Trust, on behalf of the Portfolios. State
Street receives an investment advisory fee with respect to each related
Portfolio. The Portfolio Advisory Agreement is the same in all material respects
as the Investment Advisory Agreement between the Trust on behalf of the Funds
and State Street. Each of the Funds that invests in a related Portfolio bears a
proportionate part of the management fees paid by the Portfolio (based on the
percentage of the Portfolio's assets attributable to the Fund).
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 Fund. State Street
will generally assist in all aspects of the Trust's and the Funds' 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
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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 shareholders 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 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 Funds pursuant to the Custody
Agreement. As Custodian, it holds the Funds' assets. State Street also serves as
Transfer Agent of the Funds pursuant to the Transfer Agency and Service
Agreement.
FEES
See "Fees and Expenses" in each Fund's prospectus for a description of
the fees paid by each Fund.
RULE 12b-1 PLAN
The Trust has adopted a distribution plan pursuant to Rule 12b-1
(the "Rule 12b-1 Plan") under which the Funds may compensate its distributor
(others) for services in connection with the distribution of the Funds'
shares and for services provided to Fund shareholders. The Rule 12b-1 Plan
calls for payments at an annual rate (based on average net assets) as follows:
<TABLE>
<S> <C>
State Street Equity 500 Index Fund - Class A: 0.15%
State Street Equity 500 Index Fund - Class B: 0.25%
State Street Equity 400 Index Fund: 0.25%
State Street Equity 2000 Index Fund: 0.25%
State Street MSCI-Registered Trademark-
EAFE-Registered Trademark- Index Fund: 0.25%
State Street Aggregate Bond Index Fund: 0.25%.
</TABLE>
COUNSEL AND INDEPENDENT ACCOUNTANTS
Ropes & Gray, One International Place, Boston, Massachusetts 02110,
serves as counsel to the Trust. Ernst & Young LLP are the independent
accountants for the Funds, 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.
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<PAGE>
BROKERAGE ALLOCATION AND OTHER PRACTICES
The policy of the Trust regarding purchases and sales of securities for
the Funds 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 Fund 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 Funds or the Adviser. Such 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 Fund
in question seeks to replicate. The fee paid by the Funds 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.
CAPITAL STOCK AND OTHER SECURITIES
Under the Declaration of Trust, the Trustees are authorized to issue an
unlimited number of shares of each Fund. Upon liquidation or dissolution of a
Fund, investors are
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entitled to share pro rata in the Fund's net assets available for distribution
to its investors. Investments in a Fund have no preference, preemptive,
conversion or similar rights and are fully paid and nonassessable, except as set
forth below. Investments in a Fund may not be transferred.
Each investor is entitled to a vote in proportion to the number of Fund
shares it owns. Shares do not have cumulative voting rights, and investors
holding more than 50% of the aggregate outstanding shares 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.
Under Massachusetts law, shareholders 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
shareholder 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 shareholder may become subject by reason of being or having been an
shareholder and for reimbursement of the shareholder for all legal and other
expenses reasonably incurred by the shareholder in connection with any such
claim or liability. Thus the risk of an shareholder's incurring financial loss
on account of shareholder liability is limited to circumstances in which the
Trust would be unable to meet its obligations.
PURCHASE, REDEMPTION AND PRICING OF SHARES
Shares of the Fund are offered continuously at a price equal to the net
asset value attributable to each share.
Each Fund determines the net asset value per share in the Fund on each
day on which the NYSE is open for trading ("Fund Business Day"). This
determination is made each Fund 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 Fund'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 shares 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 net
asset value next determined following the receipt of any purchase or withdrawal
order in good 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, will normally be valued on the basis of
market value. This generally means
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<PAGE>
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.
TAXATION OF THE FUND
QUALIFICATION AS A REGULATED INVESTMENT COMPANY
Each Fund intends to qualify each year as a regulated investment
company under Subchapter M of the Code. In order so to qualify and to qualify
for the favorable tax treatment accorded regulated investment companies, each
Fund must, among other things, (i) derive at least 90% of its gross income from
dividends, interest, payments with respect to certain securities loans, gains
from the sale of securities or foreign currencies, or other income (including,
but not limited to, gains from options, futures or forward contracts) derived
with respect to its business of investing in such stock, securities or
currencies; (ii) distribute with respect to each taxable year at least 90% of
the sum of its taxable net investment income, its tax-exempt income and the
excess, if any, of net short-term capital gains over net long-term capital
losses for each year; and (iii) diversify its holdings so that at the end of
each fiscal quarter (a) at least 50% of the value of its total assets are
invested in cash, U.S. government securities, securities of other regulated
investment companies, and other securities of issuers which represent, with
respect to each issuer, no more than 5% of the value of the Fund's total assets
and 10% of the outstanding voting securities of such issuer, and (b) not more
than 25% of its assets are invested in the securities (other than those of the
U.S. government or other regulated investment companies) of any one issuer or of
two or more issuers which the Fund controls and which are engaged in the same,
similar or related trades and businesses. To the extent it qualifies for
treatment as a regulated investment company, the Fund will not be subject to
federal income tax on income paid to its shareholders in the form of dividends
or capital gain distributions.
An excise tax at the rate of 4% will be imposed on the excess, if any,
of each Fund's "required distribution" over its actual distributions in any
calendar year. Generally, the "required distribution" is 98% of the Fund's
ordinary income for the calendar year plus 98% of its capital gain net income
recognized during the one-year period ending on October 31 (or December 31, if
the Fund so elects) plus undistributed amounts from prior years. Each Fund
intends to make distributions sufficient to avoid imposition of the excise tax.
Distributions declared by a Fund during October, November or December to
shareholders of record on a date in any such month and paid by the Fund
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<PAGE>
during the following January will be treated for federal tax purposes as paid by
the Fund and received by shareholders on December 31 of the year in which
declared.
TAXATION OF DISTRIBUTIONS RECEIVED BY SHAREHOLDERS
Shareholders of each Fund will be subject to federal income taxes on
distributions made by the Fund whether received in cash or additional shares of
the Fund. Distributions by each Fund of net income and short-term capital gains,
if any, will be taxable to shareholders as ordinary income. Distributions
designated by a Fund as deriving from net gains on securities held for more than
one year will be taxable to shareholders as long-term capital gain (generally
taxed at a 20% rate for noncorporate shareholders), without regard to how long a
shareholder has held shares of the Fund.
Dividends and distributions on a Fund's shares are generally subject to
federal income tax as described herein to the extent they do not exceed the
Fund's realized income and gains, even though such dividends and distributions
may economically represent a return of a particular shareholder's investment.
Such distributions are likely to occur in respect of shares purchased at a time
when a Fund's net asset value reflects gains that are either unrealized, or
realized but not distributed. Such realized gains may be required to be
distributed even when a Fund's net asset value also reflects unrealized losses.
TAXATION OF CERTAIN FINANCIAL INSTRUMENTS
A Fund may enter into futures contracts, options on futures contracts
and options on securities indices. Such contracts held by the Fund 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 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 Fund actually held the
instruments. The amount of any capital gain or loss actually realized by the
Fund 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 Fund may result in "straddles" for federal income tax purposes. The
straddle rules may affect the character of gains or losses realized by a Fund.
In addition, losses realized by the Fund 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 Fund may make one or more of the elections available under the Code
which are applicable to straddles. If a Fund 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
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<PAGE>
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 Fund that
did not engage in such hedging transactions.
FOREIGN INCOME
Income received by the MSCI-Registered Trademark- EAFE-Registered
Trademark- Index Fund 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 the
MSCI-Registered Trademark- EAFE-Registered Trademark- Index Fund's assets to be
invested in various countries will vary. If the MSCI-Registered Trademark-
EAFE-Registered Trademark- Index Fund is liable for foreign taxes, and if more
than 50% of the value of the Fund's total assets at the close of its taxable
year consists of stocks or securities of foreign corporations, the Fund 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
MSCI-Registered Trademark- EAFE-Registered Trademark- Index Fund's share of the
amount of foreign taxes paid by it will be included in the income of its
shareholders, and such shareholders (except tax-exempt shareholders) may,
subject to certain limitations, claim either a credit or deduction for the
taxes. Each MSCI-Registered Trademark- EAFE-Registered Trademark- Index Fund
investor will be notified after the close of the Fund's taxable year whether the
foreign taxes paid will "pass through" for that year and, if so, such
notification will designate (a) the regulated investment company 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 other items of income, dividends, interest and
certain foreign currency gains. Because capital gains realized by a Fund 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. In addition a shareholder must hold shares of the
MSCI-Registered Trademark- EAFE-Registered Trademark- Index Fund (without
protection from risk of loss) on the ex-dividend date and for at least 16 days
during the 30-day period beginning on the date that is 15 days before the
ex-dividend date in order to be eligible to claim a foreign tax credit passed
through by the Fund.
THE AGGREGATE BOND INDEX FUND'S INVESTMENTS IN ORIGINAL ISSUE DISCOUNT
SECURITIES
A Fund's investment in securities issued at a discount and certain
other obligations will (and investments in securities purchased at a discount
may) require the Fund to accrue and distribute income not yet received. In such
cases, a Fund may be required to sell assets (including when it is not
advantageous to do so) to generate the cash necessary to distribute as dividends
to its shareholders all of its income and gains and therefore to eliminate any
tax liability at the Fund level.
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REDEMPTIONS AND EXCHANGES
Redemptions and exchanges of each Fund's shares are taxable events and,
accordingly, shareholders may realize gain or loss on these transactions. In
general, any gain realized upon a taxable disposition of shares will be treated
as long-term capital gain if the shares have been held for more than one year.
Otherwise, the gain on the sale, exchange or redemption of Fund shares will be
treated as short-term capital gain. However, if a shareholder sells Fund shares
at a loss within six months after purchasing the shares, the loss will be
treated as a long-term capital loss to the extent of any long-term capital gain
distributions received by the shareholder. Furthermore, no loss will be allowed
on the sale of Fund shares to the extent the shareholder acquired other shares
of the same Fund within 30 days prior to the sale of the loss shares or 30 days
after such sale.
The foregoing discussion summarizes some of the consequences under the
current federal tax law of an investment in the Funds. It is not a substitute
for personal tax advice. Consult your personal tax adviser about the potential
tax consequences of an investment in the Fund including in-kind transactions
under all applicable tax laws.
Non-U.S. investors in the Fund should consult their tax advisers
concerning the tax consequences of ownership of shares in the Fund, 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).
UNDERWRITERS
ALPS Mutual Funds Services, Inc., serves as Distributor (the
"Distributor") pursuant to the Distribution Agreement dated February __, 2000.
The Distributor is located at 370 17th Street, Suite 3100, Denver, Colorado
80202. Pursuant to the Distribution Agreement, the Funds pay the Distributor
fees under the Rule 12b-1 Plan in effect for each of the Funds of the Trust. For
a description of the fees paid to the Distributor under the Rule 12b-1 Plan, see
"Rule 12b-1 Plan", above. The Distributor is not obligated to sell any specific
number of shares and will sell shares of a Fund on a continuous basis only
against orders to purchase shares.
CALCULATION OF PERFORMANCE DATA
Not applicable.
FINANCIAL STATEMENTS
Not applicable.
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PART C
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.
(e) Form of Distribution Agreement is filed herewith.
(f) Not applicable.
(g) Form of Custodian Agreement is filed herewith.
(h)(1) Form of Transfer Agent and Services Agreement is filed herewith.
(h)(2) Form of Administration Agreement is filed herewith.
(h)(3) Form of License Agreement to use S&P 500 Composite Stock Price Index to
be filed by amendment.
(h)(4) Form of License Agreement to use S&P MidCap 400 Index to be filed by
amendment.
(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-Registered Trademark-
EAFE-Registered Trademark- Index to be filed by amendment.
(i) Legal Opinion of Ropes & Gray to be filed by amendment.
(j)(1) Power of Attorney dated February 4, 2000 is filed herewith.
(j)(2) Power of Attorney dated February 16, 2000 is filed herewith.
(k) Not applicable.
(l) Not applicable.
(m) Form of Rule 12b-1 Plan is filed herewith.
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(n) Form of Rule 18f-3 Plan is filed herewith.
(p)(1) Form of Code of Ethics is filed herewith.
(p)(2) Code of Ethics of State Street Master Trust is filed herewith.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND
None.
ITEM 25. INDEMNIFICATION
The Trust shall indemnify each of its Trustees and officers (including
persons who serve at the Trust's request as directors, officers or trustees of
another organization in which the Trust has any interest as a shareholder,
creditor or otherwise) (hereinafter referred to as a "Covered Person") against
all liabilities and expenses, including but not limited to amounts paid in
satisfaction of judgments, in compromise or as fines and penalties, and counsel
fees reasonably incurred by any Covered Person in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or criminal,
before any court or administrative or legislative body, in which such Covered
Person may be or may have been involved as a party or otherwise or with which
such Covered Person may be or may have been threatened, while in office or
thereafter, by reason of any alleged act or omission as a Trustee or officer or
by reason of his or her being or having been such a Trustee or officer, except
with respect to any matter as to which such Covered Person shall have been
finally adjudicated in any such action, suit or other proceeding not to have
acted in good faith in the reasonable belief that such Covered Person's action
was in the best interest of the Trust and except that no Covered Person shall be
indemnified against any liability to the Trust or its Shareholders to which such
Covered Person would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office. Expenses, including counsel fees so
incurred by any such Covered Person, may be paid from time to time by the Trust
in advance of the final disposition of any such action, suit or proceeding on
the condition that the amounts so paid shall be repaid to the Trust if it is
ultimately determined that indemnification of such expenses is not authorized
under this Article.
As to any matter disposed of by a compromise payment by any such
Covered Person referred to above, pursuant to a consent decree or otherwise, no
such indemnification either for said payment or for any other expenses shall be
provided unless such compromise shall be approved as in the best interests of
the Trust, after notice that it involved such indemnification, (a) by a
disinterested majority of the Trustees then in office; or (b) by a majority of
the disinterested Trustees then in office; or (c) by any disinterested person or
persons to whom the question may be referred by the Trustees, provided that in
the case of approval pursuant to clause (b) or (c) there has been obtained an
opinion in writing of independent legal counsel to the effect that such
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Covered Person appears to have acted in good faith in the reasonable belief that
his or her action was in the best interests of the Trust and that such
indemnification would not protect such person against any liability to the Trust
or its Shareholders to which such person would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of office; or (d) by vote of Shareholders holding
a majority of the Shares entitled to vote thereon, exclusive of any Shares
beneficially owned by any interested Covered Person. Approval by the Trustees
pursuant to clause (a) or (b) or by any disinterested person or persons pursuant
to clause (c) of this Section shall not prevent the recovery from any Covered
Person of any amount paid to such Covered Person in accordance with any of such
clauses as indemnification if such Covered Person is subsequently adjudicated by
a court of competent jurisdiction not to have acted in good faith in the
reasonable belief that such Covered Person's action was in the best interests of
the Trust or to have been liable to the Trust or its Shareholders by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office.
The right of indemnification hereby provided shall not be exclusive of
or affect any other rights to which any such Covered Person may be entitled. As
used in this Article 4, the term "Covered Person" shall include such person's
heirs, executors and administrators; an "interested Covered Person" is one
against whom the action, suit or other proceeding in question or another action,
suit or other proceeding on the same or similar grounds is then or has been
pending; and a "disinterested Trustee" or "disinterested person" is a Trustee or
a person against whom none of such actions, suits or other proceedings or
another action, suit or other proceeding on the same or similar grounds is then
or has been pending. Nothing contained in this Article shall affect any rights
to indemnification to which personnel of the Trust, other than Trustees and
officers, and other persons may be entitled by contract or otherwise under law,
nor the power of the Trust to purchase and maintain liability insurance on
behalf of any such person.
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
(a) In addition to the Registrant, ALPS Mutual Funds Services,
Inc., currently acts as distributor to Diamonds Trust,
Financial Investors Trust, First Funds Trust, Holland
Balanced Fund, SPDR Trust, MidCap SPDR Trust, Select Sector
SPDR Trust, Stonebridge Funds Trust and Westcore Funds
Trust. ALPS Mutual Funds Services, Inc., is registered with
the Securities and Exchange Commission as a broker/dealer
and is a member of the National Association of Securities
Dealers, Inc.
82
<PAGE>
(b) For each director or officer of ALPS Mutual Funds Services,
Inc.
<TABLE>
<CAPTION>
Name and Principal Business
Address Positions & Offices Positions & Offices
with Underwriter with Distributor with Registrant
<S> <C> <C>
W. Robert Alexander Chairman and None
370 Seventeenth Street Chief Executive Officer
Suite 3100
Denver, Colorado 80202
Arthur J. Lucey President None
370 Seventeenth Street
Suite 3100
Denver, Colorado 80202
Edmund J. Burke Executive Vice President None
370 Seventeenth Street
Suite 3100
Denver, Colorado 80202
Thomas A. Carter Chief Financial Officer None
370 Seventeenth Street
Suite 3100
Denver, Colorado 80202
Russell Burk General Counsel None
370 Seventeenth Street
Suite 3100
Denver, Colorado 80202
Jeremy O. May Vice President None
370 Seventeenth Street
Suite 3100
Denver, Colorado 80202
Robert J. Szydlowski Vice President None
370 Seventeenth Street
Suite 3100
Denver, Colorado 80202
Rick A. Pederson Director None
370 Seventeenth Street
Suite 3100
Denver, Colorado 80202
Chris Woessner Director None
370 Seventeenth Street
Suite 3100
83
<PAGE>
Denver, Colorado 80202
(c) Not applicable.
</TABLE>
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 Institutional Investment Trust ("Registrant")
PO Box 1713 Boston, MA 02105-1713
State Street Bank And Trust Company ("Adviser")
Two International Place
Boston, MA 02110
State Street Bank And Trust Company ("Custodian, Administrator,
Transfer Agent and Dividend Disbursing Agent")
PO Box 1713
Boston, MA 02105-1713
ITEM 29. MANAGEMENT SERVICES
Not applicable.
ITEM 30. UNDERTAKINGS
Not applicable.
84
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant, State Street Institutional Investment
Trust, has duly caused this Registration Statement to be signed on its behalf
by the undersigned, thereto duly authorized, in the City of Boston and
Commonwealth of Massachusetts on the 17th day of February, 2000.
STATE STREET INSTITUTIONAL INVESTMENT TRUST
By: *
---------------------------------
James B. Little
President and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement for State Street Institutional Investment Trust has been signed below
by the following persons in the capacities and on the dates indicated:
SIGNATURE TITLE
*
______________________
James Little President (Principal Executive
Officer) and Treasurer (Principal
Accounting Officer)
*
______________________ Trustee
Rina K. Spence
*Attorney in-fact: /s/ Julie A. Tedesco
-------------------------
85
<PAGE>
EXHIBIT A
STATE STREET INSTITUTIONAL INVESTMENT TRUST
AGREEMENT AND DECLARATION OF TRUST
THIS AGREEMENT AND DECLARATION OF TRUST made at Boston, Massachusetts this
_____________ day of February, 2000 by the Trustees hereunder and the holders of
shares of beneficial interest issued hereunder and to be issued hereunder as
hereinafter provided:
WITNESSETH that
WHEREAS, this Trust has been formed to carry on the business of an
investment company; and
WHEREAS, the Trustees have agreed to manage all property coming into their
hands as trustees of a Massachusetts voluntary association with transferable
shares in accordance with the provisions hereinafter set forth;
NOW, THEREFORE, the Trustees hereby declare that they will hold all cash,
securities and other assets, which they may from time to time acquire in any
manner as Trustee hereunder, IN TRUST to manage and dispose of the same upon the
following terms and conditions for the benefit of the holders from time to time
of shares in this Trust as hereinafter set forth.
ARTICLE I
Name and Definitions
SECTION 1. This Trust shall be known as "State Street Institutional
Investment Trust" and the Trustees shall conduct the business of the Trust under
that name or any other name as they may from time to time determine.
SECTION 2. DEFINITIONS. Whenever used herein, unless otherwise required by
the context or specifically provided:
(a) "Trust" refers to the Massachusetts business trust established by this
Agreement and Declaration of Trust, as amended from time to time;
<PAGE>
(b) "Trustees" refers to the Trustees of the Trust named in Article IV
hereof or elected in accordance with such Article;
(c) "Shares" means the equal proportionate units of interest into which the
beneficial interest in the Trust or in the Trust property belonging to any
Series of the Trust or in any class of Shares of the Trust (as the context may
require) shall be divided from time to time;
(d) "Shareholder" means a record owner of Shares;
(e) "1940 Act" refers to the Investment Company Act of 1940 and the Rules
and Regulations thereunder, all as amended from time to time;
(f) The terms "Commission" and "principal underwriter" shall have the
meanings given them in the 1940 Act;
(g) "Declaration of Trust" or "Declaration" shall mean this Agreement and
Declaration of Trust, as amended or restated from time to time;
(h) "By-Laws" shall mean the By-Laws of the Trust, as amended from time to
time;
(i) "Series Company" refers to the form of registered open-end investment
company described in Section 18(f)(2) of the 1940 Act or in any successor
statutory provision;
(j) "Series" refers to Series of Shares established and designated under or
in accordance with the provisions of Article III;
(k) "Multi-Class Series" refers to Series of Shares established and
designated as Multi-Class Series under or in accordance with the provisions of
Article III, Section 6; and
(l) The terms "class" and "class of Shares" refer to each class of Shares
into which the Shares of any Multi-Class Series may from time to time be divided
in accordance with the provisions of Article III.
ARTICLE II
Purpose of Trust
The purpose of the Trust is to provide investors a managed investment
primarily in securities (including options), debt instruments, commodities,
commodity contracts and options thereon.
-2-
<PAGE>
ARTICLE III
Shares
SECTION 1. DIVISION OF BENEFICIAL INTEREST. The beneficial interest in the
Trust shall at all times be divided into an unlimited number of Shares, without
par value. Subject to the provisions of Section 6 of this Article III, each
Share shall have voting rights as provided in Article V hereof, and holders of
the Shares of any Series or class shall be entitled to receive dividends, when
and as declared with respect thereto in the manner provided in Article VI,
Section 1 hereof. Except as otherwise provided in Section 6 of this Article III
with respect to Shares of Multi-Class Series, no Share shall have any priority
or preference over any other Share of the same Series with respect to dividends
or distributions upon termination of the Trust or of such Series made pursuant
to Article VIII, Section 4 hereof. Except as otherwise provided in Section 6 of
this Article III with respect to Shares of Multi-Class Series, all dividends and
distributions shall be made ratably among all Shareholders of a particular
Series from the assets belonging to such Series according to the number of
Shares of such Series held of record by such Shareholders on the record date for
any dividend or distribution or on the date of termination, as the case may be.
Shareholders shall have no preemptive or other right to subscribe to any
additional Shares or other securities issued by the Trust. The Trustees may from
time to time divide or combine the Shares of any particular Series or class into
a greater or lesser number of Shares of that Series or class without thereby
changing the proportionate beneficial interest of the Shares of that Series or
class in the assets belonging to that Series or attributable to that class or in
any way affecting the rights of Shares of any other Series or class.
SECTION 2. OWNERSHIP OF SHARES. The ownership of Shares shall be recorded
on the books of the Trust or a transfer or similar agent for the Trust, which
books shall be maintained separately for the Shares of each Series and class. No
certificates certifying the ownership of Shares shall be issued except as the
Trustees may otherwise determine from time to time. The Trustees may make such
rules as they consider appropriate for the transfer of Shares of each Series and
class and similar matters. The record books of the Trust as kept by the Trust or
any transfer or similar agent, as the case may be, shall be conclusive as to who
are the Shareholders of each Series and class and as to the number of Shares of
each Series and class held from time to time by each.
SECTION 3. INVESTMENTS IN THE TRUST. The Trustees shall accept investments
in the Trust from such persons and on such terms and for such consideration as
they from time to time authorize.
SECTION 4. STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY. Shares
shall be deemed to be personal property giving only the rights provided in this
instrument. Every Shareholder by virtue of having become a Shareholder shall be
held to have expressly assented and agreed to the terms hereof and to have
become a party hereto. The death of a Shareholder during the continuance of the
Trust shall not operate to terminate the same nor entitle the representative of
any deceased Shareholder to an accounting or to take any action in court or
elsewhere against the Trust or the Trustees, but entitles such
-3-
<PAGE>
representative only to the rights of said deceased Shareholder under this Trust.
Ownership of Shares shall not entitle the Shareholder to any title in or to the
whole or any part of the Trust property or right to call for a partition or
division of the same or for an accounting, nor shall the ownership of Shares
constitute the Shareholders partners. Neither the Trust nor the Trustees, nor
any officer, employee or agent of the Trust, shall have any power to bind
personally any Shareholders, nor except as specifically provided herein to call
upon any Shareholder for the payment of any sum of money or assessment
whatsoever other than such as the Shareholder may at any time personally agree
to pay.
SECTION 5. POWER OF TRUSTEES TO CHANGE PROVISIONS RELATING TO SHARES.
Notwithstanding any other provisions of this Declaration of Trust and without
limiting the power of the Trustees to amend the Declaration of Trust as provided
elsewhere herein, the Trustees shall have the power to amend this Declaration of
Trust, at any time and from time to time, in such manner as the Trustees may
determine in their sole discretion, without the need for Shareholder action, so
as to add to, delete, replace or otherwise modify any provisions relating to the
Shares contained in this Declaration of Trust for the purpose of (i) responding
to or complying with any regulations, orders, rulings or interpretations of any
governmental agency or any laws, now or hereafter applicable to the Trust, or
(ii) designating and establishing Series or classes in addition to those
established in Section 6 of this Article III; provided that before adopting any
such amendment without Shareholder approval the Trustees shall determine that it
is consistent with the fair and equitable treatment of all Shareholders. The
establishment and designation of any Series of Shares in addition to the Series
established and designated in Section 6 of this Article III shall be effective
upon the execution by a majority of the then Trustees of an amendment to this
Declaration of Trust, taking the form of a complete restatement or otherwise,
setting forth such establishment and designation and the relative rights and
preferences of such Series, or as otherwise provided in such instrument. The
establishment and designation of any class of Shares shall be effective upon
either the execution by a majority of the then Trustees of an amendment to this
Declaration of Trust or the adoption by vote or written consent of a majority of
the then Trustees of a resolution setting forth such establishment and
designation and the relative rights and preferences of such class and such
eligibility requirements for investment therein as the Trustees may determine,
or as otherwise provided in such amendment or resolution.
Without limiting the generality of the foregoing, the Trustees may, for the
above-stated purposes, amend the Declaration of Trust to:
(a) create one or more Series or classes of Shares (in addition to any
Series or classes already existing or otherwise) with such rights and
preferences and such eligibility requirements for investment therein as the
Trustees shall determine and reclassify any or all outstanding Shares as shares
of particular Series or classes in accordance with such eligibility
requirements;
(b) amend any of the provisions set forth in paragraphs (a) through (j) of
Section 6 of this Article III;
-4-
<PAGE>
(c) combine one or more Series or classes of Shares into a single Series or
class on such terms and conditions as the Trustees shall determine;
(d) change or eliminate any eligibility requirements for investment in
Shares of any Series or class, including without limitation the power to provide
for the issue of Shares of any Series or class in connection with any merger or
consolidation of the Trust with another trust or company or any acquisition by
the Trust of part or all of the assets of another trust or company;
(e) change the designation of any Series or class of Shares;
(f) change the method of allocating dividends among the various Series and
classes of Shares;
(g) allocate any specific assets or liabilities of the Trust or any
specific items of income or expense of the Trust to one or more Series or
classes of Shares; and
(h) specifically allocate assets to any or all Series of Shares or create
one or more additional Series of Shares which are preferred over all other
Series of Shares in respect of assets specifically allocated thereto or any
dividends paid by the Trust with respect to any net income, however determined,
earned from the investment and reinvestment of any assets so allocated or
otherwise and provide for any special voting or other rights with respect to
such Series or any classes of Shares thereof.
SECTION 6. ESTABLISHMENT AND DESIGNATION OF SERIES AND CLASSES. Without
limiting the authority of the Trustees set forth in Section 5, INTER ALIA, to
establish and designate any further Series or classes or to modify the rights
and preferences of any Series or class, the following Series shall be, and is
hereby, established and designated as a Multi-Class Series: the "Original
Series."
Shares of each Series established in this Section 6 shall have the
following rights and preferences relative to Shares of each other Series, and
Shares of each class of a Multi-Class Series shall have such rights and
preferences relative to other classes of the same Series as are set forth below,
together with such other rights and preferences relative to such other classes
as are set forth in any resolution of the Trustees establishing and designating
such class of Shares:
(a) ASSETS BELONGING TO SERIES. Subject to the provisions of paragraph (c)
of this Section 6:
All consideration received by the Trust for the issue or sale of Shares of
a particular Series, together with all assets in which such consideration is
invested or reinvested, all income, earnings, profits and proceeds thereof from
whatever source derived, including, without limitation, 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
-5-
<PAGE>
Series for all purposes, subject only to the rights of creditors, and shall be
so recorded upon the books of account of the Trust. Such consideration, assets,
income, earnings, profits and proceeds thereof, from whatever source derived,
including, without limitation, 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, are herein
referred to as "assets belonging to" that Series. 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
(collectively "General Assets"), the Trustees shall allocate such General Assets
to, between or among any one or more of the Series established and designated
from time to time in such manner and on such basis as they, in their sole
discretion, deem fair and equitable, and any General Asset so allocated to a
particular Series shall belong to that Series. Each such allocation by the
Trustees shall be conclusive and binding upon the Shareholders of all Series for
all purposes.
(b) LIABILITIES BELONGING TO SERIES. Subject to the provisions of paragraph
(c) of this Section 6:
The assets belonging to each particular Series shall be charged solely with
the liabilities of the Trust in respect to that Series, the expenses, costs,
charges and reserves attributable to that Series, and any general liabilities of
the Trust which are not readily identifiable as belonging to any particular
Series but which are allocated and charged by the Trustees to and among any one
or more of the Series established and designated from time to time in a manner
and on such basis as the Trustees in their sole discretion deem fair and
equitable. The liabilities, expenses, costs, charges and reserves so charged to
a Series are herein referred to as "liabilities belonging to" that Series. Each
allocation of liabilities, expenses, costs, charges and reserves by the Trustees
shall be conclusive and binding upon the Shareholders of all Series for all
purposes.
(c) APPORTIONMENT OF ASSETS ETC. IN CASE OF MULTI-CLASS SERIES. In the case
of any Multi-Class Series, to the extent necessary or appropriate to give effect
to the relative rights and preferences of any classes of Shares of such Series,
(i) any assets, income, earnings, profits, proceeds, liabilities, expenses,
charges, costs and reserves belonging or attributable to that Series may be
allocated or attributed to a particular class of Shares of that Series or
apportioned among two or more classes of Shares of that Series; and (ii) Shares
of any class of such Series may have priority or preference over shares of other
classes of such Series with respect to dividends or distributions upon
termination of the Trust or of such Series or class or otherwise, provided that
no Share shall have any priority or preference over any other Shares of the same
class and that all dividends and distributions to Shareholders of a particular
class shall be made ratably among all Shareholders of such class according to
the number of Shares of such class held of record by such Shareholders on the
record date for any dividend or distribution or on the date of termination, as
the case may be.
(d) DIVIDENDS, DISTRIBUTIONS, REDEMPTIONS AND REPURCHASES. Notwithstanding
any other provisions of this Declaration, including, without limitation, Article
VI, no dividend or distribution
-6-
<PAGE>
(including, without limitation, any distribution paid upon termination of the
Trust or of any Series or class) with respect to, nor any redemption or
repurchase of, the Shares of any Series or class shall be effected by the Trust
other than from the assets belonging to such Series or attributable to such
class, nor shall any Shareholder of any particular Series or class otherwise
have any right or claim against the assets belonging to any other Series or
attributable to any other class except to the extent that such Shareholder has
such a right or claim hereunder as a Shareholder of such other Series or class.
(e) VOTING. Notwithstanding any of the other provisions of this
Declaration, including, without limitation, Section 1 of Article V, the
Shareholders of any particular Series or class shall not be entitled to vote on
any matters as to which such Series or class is not affected. On any matter
submitted to a vote of Shareholders, all Shares of the Trust then entitled to
vote shall, except as otherwise provided in the By-Laws, be voted in the
aggregate as a single class without regard to Series or class of Shares, except
that (1) when required by the 1940 Act or when the Trustees shall have
determined that the matter affects one or more Series or classes of Shares
materially differently, Shares shall be voted by individual Series or class and
(2) when the matter affects only the interests of one or more Series or classes,
only Shareholders of such Series or classes shall be entitled to vote thereon.
There shall be no cumulative voting in the election of Trustees.
(f) EQUALITY. Except to the extent necessary or appropriate to give effect
to the relative rights and preferences of any classes of Shares of a Multi-Class
Series, all the Shares of each particular Series shall represent an equal
proportionate interest in the assets belonging to that Series (subject to the
liabilities belonging to that Series), and each Share of any particular Series
shall be equal to each other Share of that Series. All the Shares of each
particular class of Shares within a Multi-Class Series shall represent an equal
proportionate interest in the assets belonging to such Series that are
attributable to such class (subject to the liabilities attributable to such
class), and each Share of any particular class within a Multi-Class Series shall
be equal to each other Share of such class.
(g) FRACTIONS. Any fractional Share of a Series or class shall carry
proportionately all the rights and obligations of a whole Share of that Series
or class, including rights with respect to voting, receipt of dividends and
distributions, redemption of Shares and termination of the Trust.
(h) EXCHANGE PRIVILEGE. The Trustees shall have the authority to provide
that the holders of Shares of any Series or class shall have the right to
exchange said Shares for Shares of one or more other Series or classes of Shares
in accordance with such requirements and procedures as may be established by the
Trustees.
(i) COMBINATION OF SERIES OR CLASSES. The Trustees shall have the
authority, without the approval of the Shareholders of any Series or class
unless otherwise required by applicable law, to combine the assets and
liabilities belonging to any two or more Series or attributable to any class
into assets and liabilities belonging to a single Series or attributable to a
single class.
-7-
<PAGE>
(j) ELIMINATION OF SERIES OR CLASS. At any time that there are no Shares
outstanding of any particular Series previously established and designated, the
Trustees may amend this Declaration of Trust to abolish that Series and to
rescind the establishment and designation thereof, such amendment to be effected
in the manner provided in Section 5 of this Article III for the establishment
and designation of Series. At any time that there are no Shares outstanding of
any particular class previously established and designated of a Multi-Series
Class, the Trustees may abolish that class and rescind the establishment and
designation thereof, either by amending this Declaration of Trust in the manner
provided in Section 5 of this Article III for the establishment and designation
of classes (if such class was established and designated by an amendment to this
Declaration of Trust), or by vote or written consent of a majority of the then
Trustees (if such class was established and designated by Trustee vote or
written consent).
SECTION 7. INDEMNIFICATION OF SHAREHOLDERS. In case any Shareholder or
former Shareholder shall be held to be personally liable solely by reason of his
or her being or having been a Shareholder of the Trust or of a particular Series
or class and not because of his or her acts or omissions or for some other
reason, the Shareholder or former Shareholder (or his or her heirs, executors,
administrators or other legal representatives or, in the case of a corporation
or other entity, its corporate or other general successor) shall be entitled out
of the assets of the Series (or attributable to the class) of which he or she is
a Shareholder or former Shareholder to be held harmless from and indemnified
against all loss and expense arising from such liability.
SECTION 8. NO PREEMPTIVE RIGHTS. Shareholders shall have no preemptive or
other right to subscribe to any additional Shares or other securities issued by
the Trust.
SECTION 9. DERIVATIVE CLAIMS. No Shareholder shall have the right to bring
or maintain any court action, proceeding or claim on behalf of the Trust or any
Series without first making demand on the Trustees requesting the Trustees to
bring or maintain such action, proceeding or claim. Such demand shall be excused
only when the plaintiff makes a specific showing that irreparable injury to the
Trust or Series would otherwise result. Such demand shall be mailed to the
Secretary of the Trust at the Trust's principal office and shall set forth in
reasonable detail the nature of the proposed court action, proceeding or claim
and the essential facts relied upon by the Shareholder to support the
allegations made in the demand. The Trustees shall consider such demand within
45 days of its receipt by the Trust. In their sole discretion, the Trustees may
submit the matter to a vote of Shareholders of the Trust or Series, as
appropriate. Any decision by the Trustees to bring, maintain or settle (or not
to bring, maintain or settle) such court action, proceeding or claim, or to
submit the matter to a vote of Shareholders, shall be made by the Trustees in
their business judgment and shall be binding upon the Shareholders. Any decision
by the Trustees to bring or maintain a court action, proceeding or suit on
behalf of the Trust or a Series shall be subject to the right of the
Shareholders under Article V, Section 1 hereof to vote on whether or not such
court action, proceeding or suit should or should not be brought or maintained.
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<PAGE>
ARTICLE IV
The Trustees
SECTION 1. ELECTION AND TENURE. The Trustees shall be Rina K. Spence and
others to be hereafter appointed. The Trustees may fix the number of Trustees,
fill vacancies in the Trustees, including vacancies arising from an increase in
the number of Trustees, or remove Trustees with or without cause. Each Trustee
shall serve during the continued lifetime of the Trust until he or she dies,
resigns or is removed, or, if sooner, until the next meeting of Shareholders
called for the purpose of electing Trustees and until the election and
qualification of his or her successor. Any Trustee may resign at any time by
written instrument signed by him or her and delivered to any officer of the
Trust or to a meeting of the Trustees. Such resignation shall be effective upon
receipt unless specified to be effective at some other time. Except to the
extent expressly provided in a written agreement with the Trust, no Trustee
resigning and no Trustee removed shall have any right to any compensation for
any period following his or her resignation or removal, or any right to damages
on account of such removal. The Shareholders may fix the number of Trustees and
elect Trustees at any meeting of Shareholders called by the Trustees for that
purpose and to the extent required by applicable law, including paragraphs (a)
and (b) of Section 16 of the 1940 Act.
SECTION 2. EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE. The death,
declination, resignation, retirement, removal or incapacity of the Trustees, or
any of them, shall not operate to annul the Trust or to revoke any existing
agency created pursuant to the terms of this Declaration of Trust.
SECTION 3. POWERS. Subject to the provisions of this Declaration of Trust,
the business of the Trust shall be managed by the Trustees, and they shall have
all powers necessary or convenient to carry out that responsibility including
the power to engage in securities transactions of all kinds on behalf of the
Trust. Without limiting the foregoing, the Trustees may adopt By-Laws not
inconsistent with this Declaration of Trust providing for the regulation and
management of the affairs of the Trust and may amend and repeal them to the
extent that such By-Laws do not reserve that right to the Shareholders; they may
elect and remove such officers and appoint and terminate such agents as they
consider appropriate; they may appoint from their own number and terminate one
or more committees consisting of two or more Trustees which may exercise the
powers and authority of the Trustees to the extent that the Trustees determine;
they may employ one or more custodians of the assets of the Trust and may
authorize such custodians to employ subcustodians and to deposit all or any part
of such assets in a system or systems for the central handling of securities or
with a Federal Reserve Bank, retain a transfer agent or a shareholder servicing
agent, or both, provide for the distribution of Shares by the Trust, through one
or more principal underwriters or otherwise, set record dates for the
determination of Shareholders with respect to various matters, and in general
delegate such authority as they consider desirable to any officer of the Trust,
to any committee of the Trustees and to any agent or employee of the Trust or to
any such custodian or underwriter.
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<PAGE>
Without limiting the foregoing, the Trustees shall have power and
authority:
(a) To invest and reinvest cash, and to hold cash uninvested;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate, lease, write
options with respect to or otherwise deal in any property rights relating to any
or all of the assets of the Trust;
(c) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and deliver
proxies or powers of attorney to such person or persons as the Trustees shall
deem proper, granting to such person or persons such power and discretion with
relation to securities or property as the Trustees shall deem proper;
(d) To exercise powers and rights of subscription or otherwise which in any
manner arise out of ownership of securities;
(e) To hold any security or property in a form not indicating any trust,
whether in bearer, unregistered or other negotiable form, or in its own name or
in the name of a custodian or subcustodian or a nominee or nominees or
otherwise;
(f) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer of any security which is
held in the Trust; to consent to any contract, lease, mortgage, purchase or sale
of property by such corporation or issuer; and to pay calls or subscriptions
with respect to any security held in the Trust;
(g) To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to deposit any
security with, or transfer any security to, any such committee, depositary or
trustee, and to delegate to them such power and authority with relation to any
security (whether or not so deposited or transferred) as the Trustees shall deem
proper, and to agree to pay, and to pay, such portion of the expenses and
compensation of such committee, depositary or trustee as the Trustees shall deem
proper;
(h) To compromise, arbitrate or otherwise adjust claims in favor of or
against the Trust or any matter in controversy, including but not limited to
claims for taxes;
(i) To enter into joint ventures, general or limited partnerships and any
other combinations or associations;
(j) To borrow funds or other property;
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<PAGE>
(k) To endorse or guarantee the payment of any notes or other obligations
of any person; and to make contracts of guaranty or suretyship, or otherwise
assume liability for payment of such notes or other obligations;
(l) To purchase and pay for entirely out of Trust property such insurance
as they may deem necessary or appropriate for the conduct of the business of the
Trust, including, without limitation, insurance policies insuring the assets of
the Trust and payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, investment advisers, principal underwriters or
independent contractors of the Trust individually against all claims and
liabilities of every nature arising by reason of holding, being or having held
any such office or position, or by reason of any action alleged to have been
taken or omitted by any such person as Trustee, officer, employee, agent,
investment adviser, principal underwriter or independent contractor, including
any action taken or omitted that may be determined to constitute negligence,
whether or not the Trust would have the power to indemnify such person against
liability; and
(m) To pay pensions as deemed appropriate by the Trustees and to adopt,
establish and carry out pension, profit-sharing, share bonus, share purchase,
savings, thrift and other retirement, incentive and benefit plans, trusts and
provisions, including the purchasing of life insurance and annuity contracts as
a means of providing such retirement and other benefits, for any or all of the
Trustees, officers, employees and agents of the Trust.
The Trustees shall not in any way be bound or limited by any present or
future law or custom in regard to investments by Trustees. The Trustees shall
not be required to obtain any court order to deal with any assets of the Trust
or take any other action hereunder.
SECTION 4. PAYMENT OF EXPENSES BY THE TRUST. The Trustees are authorized to
pay or cause to be paid out of the principal or income of the Trust, or partly
out of principal and partly out of income, as they deem fair, all expenses,
fees, charges, taxes and liabilities incurred or arising in connection with the
Trust, or in connection with the management thereof, including but not limited
to, the Trustees' compensation and such expenses and charges for the services of
the Trust's officers, employees, administrators, investment advisers or
managers, principal underwriter, auditor, counsel, custodian, transfer agent,
shareholder servicing agent, and such other agents or independent contractors,
and such other expenses and charges, as the Trustees may deem necessary or
proper to incur.
SECTION 5. PAYMENT OF EXPENSES BY SHAREHOLDERS. The Trustees shall have the
power, as frequently as they may determine, to cause each Shareholder, or each
Shareholder of any particular Series or class, to pay directly, in advance or
arrears, for charges of the Trust's custodian or transfer, shareholder servicing
or similar agent, an amount fixed from time to time by the Trustees, by setting
off such charges due from such Shareholder from declared but unpaid dividends
owed such Shareholder and/or by reducing the number of Shares in the account of
such Shareholder by that number of full
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and/or fractional Shares which represents the outstanding amount of such charges
due from such Shareholder.
SECTION 6. OWNERSHIP OF ASSETS OF THE TRUST. Title to all of the assets of
the Trust shall at all times be considered as vested in the Trustees.
SECTION 7. ADVISORY, MANAGEMENT AND DISTRIBUTION CONTRACTS. Subject to such
requirements and restrictions as may be set forth in the By-Laws, the Trustees
may, at any time and from time to time, contract for exclusive or nonexclusive
advisory and/or management services for the Trust or for any Series or class
with State Street Global Advisors, a division of State Street Bank and Trust
Company or any other corporation, trust, association or other organization (the
"Manager"); and any such contract may contain such other terms as the Trustees
may determine, including without limitation, authority for a Manager to
determine from time to time without prior consultation with the Trustees what
investments shall be purchased, held, sold or exchanged and what portion, if
any, of the assets of the Trust shall be held uninvested and to make changes in
the Trust's investments. The Trustees may also, at any time and from time to
time, contract with the Manager or any other corporation, trust, association or
other organization, appointing it exclusive or nonexclusive distributor or
principal underwriter for the Shares, every such contract to comply with such
requirements and restrictions as may be set forth in the By-Laws; and any such
contract may contain such other terms as the Trustees may determine.
The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust
is a shareholder, director, officer, partner, trustee, employee,
manager, adviser, principal underwriter, distributor or affiliate or
agent of or for any corporation, trust, association or other
organization, or of or for any parent or affiliate of any organization,
with which an advisory or management contract, or principal
underwriter's or distributor's contract or transfer, shareholder
servicing or other agency contract may have been or may hereafter be
made, or that any such organization, or any parent or affiliate
thereof, is a Shareholder or has an interest in the Trust, or that
(ii) any corporation, trust, association or other organization
with which an advisory or management contract or principal
underwriter's or distributor's contract, or transfer, shareholder
servicing or other agency contract may have been or may hereafter be
made also has an advisory or management contract, or principal
underwriter's or distributor's contract or transfer, shareholder
servicing or other agency contract with one or more other corporations,
trusts, associations or other organizations, or has other business or
interests
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.
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ARTICLE V
Shareholders' Voting Powers and Meetings
SECTION 1. VOTING POWERS. The Shareholders shall have power to vote only
(i) for the election of Trustees as provided in Article IV, Section 1, (ii) with
respect to any amendment of this Declaration of Trust to the extent and as
provided in Article VIII, Section 8, (iii) to the same extent as the
stockholders of a Massachusetts business corporation as to whether or not a
court action, proceeding or claim should or should not be brought or maintained
derivatively or as a class action on behalf of the Trust or the Shareholders,
(iv) with respect to the termination of the Trust or any Series or class to the
extent and as provided in Article VIII, Section 4, (v) to remove Trustees from
office to the extent and as provided in Article V, Section 7 and (vi) with
respect to such additional matters relating to the Trust as may be required by
this Declaration of Trust, the By-Laws or any registration of the Trust with the
Commission (or any successor agency) or any state, or as the Trustees may
consider necessary or desirable. Each whole Share shall be entitled to one vote
as to any matter on which it is entitled to vote and each fractional Share shall
be entitled to a proportionate fractional vote. There shall be no cumulative
voting in the election of Trustees. Shares may be voted in person or by proxy. A
proxy with respect to Shares held in the name of two or more persons shall be
valid if executed by any one of them unless at or prior to exercise of the proxy
the Trust receives a specific written notice to the contrary from any one of
them. A proxy purporting to be executed by or on behalf of a Shareholder shall
be deemed valid unless challenged at or prior to its exercise and the burden of
proving invalidity shall rest on the challenger. At any time when no Shares of a
Series or class are outstanding the Trustees may exercise all rights of
Shareholders of that Series or class with respect to matters affecting that
Series or class and may with respect to that Series or class take any action
required by law, this Declaration of Trust or the By-Laws to be taken by the
Shareholders thereof.
SECTION 2. VOTING POWER AND MEETINGS. Meetings of the Shareholders may be
called by the Trustees for the purpose of electing Trustees as provided in
Article IV, Section 1 and for such other purposes as may be prescribed by law,
by this Declaration of Trust or by the By-Laws. Meetings of the Shareholders may
also be called by the Trustees from time to time for the purpose of taking
action upon any other matter deemed by the Trustees to be necessary or
desirable. A meeting of Shareholders may be held at any place designated by the
Trustees. Notice of any meeting of Shareholders, stating the time and place of
the meeting, shall be given or caused to be given by the Trustees to each
Shareholder by mailing such notice, postage prepaid, at least seven days before
such meeting, at the Shareholder's address as it appears on the records of the
Trust, or by facsimile or other electronic transmission, at least seven days
before such meeting, to the telephone or facsimile number or e-mail or other
electronic address most recently furnished to the Trust (or its agent) by the
Shareholder. Whenever notice of a meeting is required to be given to a
Shareholder under this Declaration of Trust or the By-Laws, a written waiver
thereof, executed before or after the meeting by such Shareholder or
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his attorney thereunto authorized and filed with the records of the meeting,
shall be deemed equivalent to such notice.
SECTION 3. QUORUM AND REQUIRED VOTE. Except when a larger quorum is
required by law, by the By-Laws or by this Declaration of Trust, 40% of the
Shares entitled to vote shall constitute a quorum at a Shareholders' meeting.
When any one or more Series or classes is to vote as a single class separate
from any other Shares which are to vote on the same matters as a separate class
or classes, 40% of the Shares of each such class entitled to vote shall
constitute a quorum at a Shareholders' meeting of that class. Any meeting of
Shareholders may be adjourned from time to time by a majority of the votes
properly cast upon the question, whether or not a quorum is present, and the
meeting may be held as adjourned within a reasonable time after the date set for
the original meeting without further notice. When a quorum is present at any
meeting, a majority of the Shares voted shall decide any questions and a
plurality shall elect a Trustee, except when a larger vote is required by any
provision of this Declaration of Trust or the By-Laws or by law. If any question
on which the Shareholders are entitled to vote would adversely affect the rights
of any Series or class of Shares, the vote of a majority (or such larger vote as
is required as aforesaid) of the Shares of such Series or class which are
entitled to vote, voting separately, shall also be required to decide such
question.
SECTION 4. ACTION BY WRITTEN CONSENT. Any action taken by Shareholders may
be taken without a meeting if Shareholders holding a majority of the Shares
entitled to vote on the matter (or such larger proportion thereof as shall be
required by any express provision of this Declaration of Trust or by the
By-Laws) and holding a majority (or such larger proportion as aforesaid) of the
Shares of any Series or class entitled to vote separately on the matter consent
to the action in writing and such written consents are filed with the records of
the meetings of Shareholders. Such consent shall be treated for all purposes as
a vote taken at a meeting of Shareholders.
SECTION 5. RECORD DATES. For the purpose of determining the Shareholders of
any Series or class who are entitled to vote or act at any meeting or any
adjournment thereof, the Trustees may from time to time fix a time, which shall
be not more than 90 days before the date of any meeting of Shareholders, as the
record date for determining the Shareholders of such Series or class having the
right to notice of and to vote at such meeting and any adjournment thereof, and
in such case only Shareholders of record on such record date shall have such
right, notwithstanding any transfer of Shares on the books of the Trust after
the record date. For the purpose of determining the Shareholders of any Series
or class who are entitled to receive payment of any dividend or of any other
distribution, the Trustees may from time to time fix a date, which shall be on
or before the date for the payment of such dividend or such other payment, as
the record date for determining the Shareholders of such Series or class having
the right to receive such dividend or distribution. Without fixing a record date
the Trustees may for voting and/or distribution purposes close the register or
transfer books for one or more Series or classes for all or any part of the
period prior to a meeting of Shareholders or the payment of a distribution.
Nothing in this Section shall be construed as precluding the Trustees from
setting different record dates for different Series or classes.
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SECTION 6. ADDITIONAL PROVISIONS. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters.
SECTION 7. REMOVAL OF TRUSTEES. No natural person shall serve as Trustee
after the holders of record of not less than two-thirds of the outstanding
Shares have declared that such Trustee be removed from that office either by
declaration in writing filed with the Trust's custodian or by votes cast in
person or by proxy at a meeting called for the purpose. The Trustees shall
promptly call a meeting of Shareholders for the purpose of voting upon the
question of removal of any Trustee when requested in writing so to do by the
record holders of not less than 10 per centum of the outstanding Shares.
Whenever ten or more Shareholders of record who have been such for at least
six months preceding the date of application, and who hold in the aggregate
Shares having a net asset value of at least 1 per centum of the outstanding
Shares, shall apply to the Trustees in writing, stating that they wish to
communicate with other Shareholders with a view to obtaining signatures to a
request for a meeting pursuant to this Section and accompanied by a form of
communication and request which they wish to transmit, the Trustees shall within
five business days after receipt of such application either (a) afford to such
applicants access to a list of the names and addresses of all Shareholders as
recorded on the books of the Trust; or (b) inform such applicants as to the
approximate number of Shareholders of record, and the approximate cost of
transmitting to them the proposed communication and form of request. If the
Trustees elect to follow the course specified in clause (b), the Trustees, upon
the written request of such applicants, accompanied by a tender of the material
to be transmitted and of the reasonable expenses of transmittal, shall, with
reasonable promptness, transmit such material to all Shareholders of record at
their addresses as recorded on the books of the Trust (or at the telephone or
facsimile number or e-mail or other electronic address most recently furnished
to the Trust (or its agent) by the Shareholder), unless within five business
days after such tender the Trustees shall transmit to such applicants and file
with the Commission, together with a copy of the material proposed to be
transmitted, a written statement signed by at least a majority of the Trustees
to the effect that in their opinion either such material contains untrue
statements of fact or omits to state facts necessary to make the statements
contained therein not misleading, or would be in violation of applicable law,
and specifying the basis of such opinion. If the Commission shall enter an order
refusing to sustain any of the objections specified in the written statement so
filed, or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for hearing,
that all objections so sustained have been met, and shall enter an order so
declaring, the Trustees shall transmit copies of such material to all
Shareholders with reasonable promptness after the entry of such order and the
renewal of such tender.
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ARTICLE VI
Net Income, Distributions, and Redemptions and Repurchases
SECTION 1. DISTRIBUTIONS OF NET INCOME. The Trustees shall each year, or
more frequently if they so determine in their sole discretion, distribute to the
Shareholders of each Series, in Shares of that Series, cash or otherwise, an
amount approximately equal to the net income attributable to the assets
belonging to such Series and may from time to time distribute to the
Shareholders of each Series, in Shares of that Series, cash or otherwise, such
additional amounts, but only from the assets belonging to such Series, as they
may authorize. Except as otherwise permitted by paragraph (c) of Section 6 of
Article III in the case of Multi-Class Series, all dividends and distributions
on Shares of a particular Series shall be distributed pro rata to the holders of
that Series in proportion to the number of Shares of that Series held by such
holders and recorded on the books of the Trust at the date and time of record
established for the payment of such dividend or distributions.
The manner of determining net income, income, asset values, capital gains,
expenses, liabilities and reserves of any Series or class may from time to time
be altered as necessary or desirable in the judgment of the Trustees to conform
such manner of determination to any other method prescribed or permitted by
applicable law. Net income shall be determined by the Trustees or by such person
as they may authorize at the times and in the manner provided in the By-Laws.
Determinations of net income of any Series or class and determinations of
income, asset value, capital gains, expenses and liabilities made by the
Trustees, or by such person as they may authorize, in good faith, shall be
binding on all parties concerned. The foregoing sentence shall not be construed
to protect any Trustee, officer or agent of the Trust against any liability to
the Trust or its security holders to which he or she would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office.
If, for any reason, the net income of any Series or class determined at any
time is a negative amount, the pro rata share of such negative amount allocable
to each Shareholder of such Series or class shall constitute a liability of such
Shareholder to that Series or class which shall be paid out of such
Shareholder's account at such times and in such manner as the Trustees may from
time to time determine (x) out of the accrued dividend account of such
Shareholder, (y) by reducing the number of Shares of that Series or class in the
account of such Shareholder or (z) otherwise.
SECTION 2. REDEMPTIONS AND REPURCHASES. The Trust shall purchase such
Shares as are offered by any Shareholder for redemption, upon the presentation
of a proper instrument of transfer together with a request directed to the Trust
or a person designated by the Trust that the Trust purchase such Shares or in
accordance with such other procedures for redemption as the Trustees may from
time to time authorize; and the Trust will pay therefor the net asset value
thereof, as determined in accordance with the By-Laws, next determined. Payment
for said Shares shall be made by the Trust to the Shareholder within seven days
after the date on which the request is made. The obligation set forth
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in this Section 2 is subject to the provision that in the event that any time
the New York Stock Exchange is closed for other than weekends or holidays, or if
permitted by the rules of the Commission during periods when trading on the New
York Stock Exchange is restricted or during any emergency which makes it
impracticable for the Trust to dispose of the investments of the applicable
Series or to determine fairly the value of the net assets belonging to such
Series or attributable to any class thereof or during any other period permitted
by order of the Commission for the protection of investors, such obligations may
be suspended or postponed by the Trustees. The Trust may also purchase or
repurchase Shares at a price not exceeding the net asset value of such Shares in
effect when the purchase or repurchase or any contract to purchase or repurchase
is made.
The redemption price may in any case or cases be paid wholly or partly in
kind if the Trustees determine that such payment is advisable in the interest of
the remaining Shareholders of the Series the Shares of which are being redeemed.
In making any such payment wholly or partly in kind, the Trust shall, so far as
may be practicable, deliver assets which approximate the diversification of all
of the assets belonging at the time to the Series the Shares of which are being
redeemed. Subject to the foregoing, the fair value, selection and quantity of
securities or other property so paid or delivered as all or part of the
redemption price may be determined by or under authority of the Trustees. In no
case shall the Trust be liable for any delay of any corporation or other person
in transferring securities selected for delivery as all or part of any payment
in kind.
SECTION 3. REDEMPTIONS AT THE OPTION OF THE TRUST. The Trust shall have the
right at its option and at any time to redeem Shares of any Shareholder at the
net asset value thereof as described in Section 1 of this Article VI: (i) if at
such time such Shareholder owns Shares of any Series or class having an
aggregate net asset value of less than an amount determined from time to time by
the Trustees; or (ii) to the extent that such Shareholder owns Shares equal to
or in excess of a percentage determined from time to time by the Trustees of the
outstanding Shares of the Trust or of any Series or class.
ARTICLE VII
Compensation and Limitation of Liability of Trustees
SECTION 1. COMPENSATION. The Trustees as such shall be entitled to
reasonable compensation from the Trust; they may fix the amount of their
compensation. Nothing herein shall in any way prevent the employment of any
Trustee for advisory, management, legal, accounting, investment banking or other
services and payment for the same by the Trust.
SECTION 2. LIMITATION OF LIABILITY. The Trustees shall not be responsible
or liable in any event for any neglect or wrong-doing of any officer, agent,
employee, Manager or principal underwriter of the Trust, nor shall any Trustee
be responsible for the act or omission of any other Trustee, but nothing
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herein contained shall protect any Trustee against any liability to which he or
she would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his or her office.
Every note, bond, contract, instrument, certificate or undertaking and
every other act or thing whatsoever issued, executed or done by or on behalf of
the Trust or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been issued, executed or done only in or with
respect to their or his or her capacity as Trustees or Trustee, and such
Trustees or Trustee shall not be personally liable thereon.
ARTICLE VIII
Miscellaneous
SECTION 1. TRUSTEES, SHAREHOLDERS, ETC. NOT PERSONALLY LIABLE; NOTICE. All
persons extending credit to, contracting with or having any claim against the
Trust or any Series or class shall look only to the assets of the Trust, or, to
the extent that the liability of the Trust may have been expressly limited by
contract to the assets of a particular Series or attributable to a particular
class, only to the assets belonging to the relevant Series or attributable to
the relevant class, for payment under such credit, contract or claim; and
neither the Shareholders nor the Trustees, nor any of the Trust's officers,
employees or agents, whether past, present or future, shall be personally liable
therefor. Nothing in this Declaration of Trust shall protect any Trustee against
any liability to which such Trustee would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee.
Every note, bond, contract, instrument, certificate or undertaking made or
issued on behalf of the Trust by the Trustees, by any officer or officers or
otherwise shall give notice that this Declaration of Trust is on file with the
Secretary of the Commonwealth of Massachusetts and shall recite that the same
was executed or made by or on behalf of the Trust or by them as Trustee or
Trustees or as officer or officers or otherwise and not individually and that
the obligations of such instrument are not binding upon any of them or the
Shareholders individually but are binding only upon the assets and property of
the Trust or upon the assets belonging to the Series or attributable to the
class for the benefit of which the Trustees have caused the note, bond,
contract, instrument, certificate or undertaking to be made or issued, and may
contain such further recital as he or she or they may deem appropriate, but the
omission of any such recital shall not operate to bind any Trustee or Trustees
or officer or officers or Shareholders or any other person individually.
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SECTION 2. TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY.
The exercise by the Trustees of their powers and discretions hereunder shall be
binding upon everyone interested. A Trustee shall be liable for his or her own
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee, and for nothing else,
and shall not be liable for errors of judgment or mistakes of fact or law. The
Trustees may take advice of counsel or other experts with respect to the meaning
and operation of this Declaration of Trust, and shall be under no liability for
any act or omission in accordance with such advice or for failing to follow such
advice. The Trustees shall not be required to give any bond as such, nor any
surety if a bond is required.
SECTION 3. LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES. No person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the Trust or upon
its order.
SECTION 4.TERMINATION OF TRUST, SERIES OR CLASS. Unless terminated as
provided herein, the Trust shall continue without limitation of time. The Trust
may be terminated at any time by vote of at least 66-2/3% of the Shares of each
Series entitled to vote and voting separately by Series, or by the Trustees by
written notice to the Shareholders. Any Series or class may be terminated at any
time by vote of at least 66-2/3% of the Shares of that Series or class, or by
the Trustees by written notice to the Shareholders of that Series or class.
Upon termination of the Trust (or any Series or class, as the case may be),
after paying or otherwise providing for all charges, taxes, expenses and
liabilities belonging, severally, to each Series (or the applicable Series or
attributable to the particular class, as the case may be), whether due or
accrued or anticipated as may be determined by the Trustees, the Trust shall, in
accordance with such procedures as the Trustees consider appropriate, reduce the
remaining assets belonging, severally, to each Series (or the applicable Series
or attributable to the particular class, as the case may be), to distributable
form in cash or shares or other securities, or any combination thereof, and
distribute the proceeds belonging to each Series (or the applicable Series or
attributable to the particular class, as the case may be), to the Shareholders
of that Series (or class, as the case may be), as a Series (or class, as the
case may be), ratably according to the number of Shares of that Series (or
class, as the case may be) held by the several Shareholders on the date of
termination.
SECTION 5. MERGER AND CONSOLIDATION. The Trustees may cause the Trust to be
merged into or consolidated with another trust or company or its shares
exchanged under or pursuant to any state or federal statute, if any, or
otherwise to the extent permitted by law, if such merger or consolidation or
share exchange has been authorized by vote of a majority of the outstanding
Shares; provided that in all respects not governed by statute or applicable law,
the Trustees shall have power to prescribe the procedure necessary or
appropriate to accomplish a sale of assets, merger or consolidation.
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SECTION 6. FILING OF COPIES, REFERENCE, HEADINGS. The original or a copy of
this instrument and of each amendment hereto shall be kept at the office of the
Trust where it may be inspected by any Shareholder. A copy of this instrument
and of each amendment hereto shall be filed by the Trust with the Secretary of
the Commonwealth of Massachusetts and with any other governmental office where
such filing may from time to time be required. Anyone dealing with the Trust may
rely on a certificate by an officer of the Trust as to whether or not any such
amendments have been made and as to any matters in connection with the Trust
hereunder; and, with the same effect as if it were the original, may rely on a
copy certified by an officer of the Trust to be a copy of this instrument or of
any such amendments. In this instrument and in any such amendment, references to
this instrument, and all expressions like "herein," "hereof" and "hereunder,"
shall be deemed to refer to this instrument as amended or affected by any such
amendments. Headings are placed herein for convenience of reference only and
shall not be taken as a part hereof or to control or affect the meaning,
construction or effect of this instrument. This instrument may be executed in
any number of counterparts each of which shall be deemed an original.
SECTION 7. APPLICABLE LAW. This Declaration of Trust is made in the
Commonwealth of Massachusetts, and it is created under and is to be governed by
and construed and administered according to the laws of said Commonwealth. The
Trust shall be of the type commonly called a Massachusetts business trust, and,
without limiting the provisions hereof, the Trust may exercise all powers which
are ordinarily exercised by such a trust.
SECTION 8. AMENDMENTS. This Declaration of Trust may be amended at any time
by an instrument in writing signed by a majority of the then Trustees when
authorized so to do by vote of a majority of the Shares entitled to vote with
respect to such amendment, except that amendments described in Article III,
Section 5 or Article III, Section 6 hereof or having the purpose of changing the
name of the Trust or of any Series or class of Shares or of supplying any
omission, curing any ambiguity or curing, correcting or supplementing any
defective or inconsistent provision contained herein shall not require
authorization by Shareholder vote.
SECTION 9. ADDRESSES. The address of the Trust is 225 Franklin Street,
Boston, Massachusetts 02110. The address of the Trustees is c/o State Street
Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts 02110.
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IN WITNESS WHEREOF, the undersigned has hereunto set their hands and
seal for themselves and for their successors and assigns this _____________ day
of February, 2000.
--------------
Rina K. Spence
Trustee
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EXHIBIT B
BY-LAWS
OF
STATE STREET INSTITUTIONAL INVESTMENT TRUST
ARTICLE 1
Agreement and Declaration
of Trust and Principal Office
1.1 AGREEMENT AND DECLARATION OF TRUST. These By-Laws shall be subject to the
Agreement and Declaration of Trust, as from time to time in effect (the
"Declaration of Trust"), of State Street Institutional Investment Trust (the
"Trust"), the Massachusetts business trust established by the Declaration of
Trust.
1.2 PRINCIPAL OFFICE OF THE TRUST. The principal office of the Trust shall be
located in Boston, Massachusetts.
ARTICLE 2
Meetings of Trustees
2.1 REGULAR MEETINGS. Regular meetings of the Trustees may be held without call
or notice at such places and at such times as the Trustees may from time to time
determine, provided that notice of the first regular meeting following any such
determination shall be given to absent Trustees.
2.2 SPECIAL MEETINGS. Special meetings of the Trustees may be held, at any time
and at any place designated in the call of the meeting, when called by the
Chairman of the Board, if any, the President or the Treasurer or by two or more
Trustees, sufficient notice thereof being given to each Trustee by the Clerk or
an Assistant Clerk or by the officer or the Trustees calling the meeting.
2.3 NOTICE. It shall be sufficient notice to a Trustee of a special meeting to
send notice by mail or courier at least forty-eight hours or by telegram at
least twenty-four hours before the meeting addressed to the Trustee at his or
her usual or last known business or residence address or to give notice to him
or her in person or by telephone at least twenty-four hours before the meeting.
Notice of a meeting need not be given to any Trustee if a written waiver of
notice, executed by him or her before or after the meeting, is filed with the
records of the meeting, or to any Trustee who attends the meeting without
protesting prior thereto or at its commencement the lack of notice to him or
her. Except as required by law, neither notice of a meeting nor a waiver of a
notice need specify the purposes of the meeting.
<PAGE>
2.4 QUORUM. At any meeting of the Trustees a majority of the Trustees then in
office shall constitute a quorum. Any meeting may be adjourned from time to time
by a majority of the votes cast upon the question, whether or not a quorum is
present, and the meeting may be held as adjourned without further notice to any
Trustee who was present at the time of such adjournment; notice of the time and
place of any adjourned session of such meeting shall, however, be given in the
manner provided in Section 2.3 of these By-Laws to each Trustee who was not
present at the time of such adjournment.
2.5 ACTION BY VOTE. When a quorum is present at any meeting, a majority of
Trustees present may take any action, except when a larger vote is expressly
required by law, by the Declaration of Trust or by these By-Laws.
2.6 ACTION BY WRITING. Except as required by law, any action required or
permitted to be taken at any meeting of the Trustees may be taken without a
meeting if a majority of the Trustees (or such larger proportion thereof as
shall be required by any express provision of the Declaration of Trust or these
By-Laws) consent to the action in writing and such written consents are filed
with the records of the meetings of the Trustees. Such consent shall be treated
for all purposes as a vote taken at a meeting of Trustees.
2.7 PRESENCE THROUGH COMMUNICATIONS EQUIPMENT. Except as required by law, the
Trustees may participate in a meeting of Trustees by means of a conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other at the same time, and
participation by such means shall constitute presence in person at a meeting.
ARTICLE 3
Officers
3.1 ENUMERATION; QUALIFICATION. The officers of the Trust shall be a President,
a Treasurer, a Clerk and such other officers, if any, as the Trustees from time
to time may in their discretion elect. The Trust may also have such agents as
the Trustees from time to time may in their discretion appoint. If a Chairman of
the Board is elected, he or she shall be a Trustee and may but need not be a
Shareholder; and any other officer may be but none need be a Trustee or
Shareholder. Any two or more offices may be held by the same person.
3.2 ELECTION AND TENURE. The President, the Treasurer, the Clerk and such other
officers as the Trustees may in their discretion from time to time elect shall
each be elected by the Trustees to serve until his or her successor is elected
or qualified, or until he or she sooner dies, resigns, is removed or becomes
disqualified. Each officer shall hold office and each agent shall retain
authority at the pleasure of the Trustees.
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3.3 POWERS. Subject to the other provisions of these By-Laws, each
officer shall have, in addition to the duties and powers herein and in the
Declaration of Trust set forth, such duties and powers as are commonly incident
to the office occupied by him or her as if the Trust were organized as a
Massachusetts business corporation and such other duties and powers as the
Trustees may from time to time designate.
3.4 PRESIDENT AND VICE PRESIDENTS. The President shall have the duties and
powers specified in these By-Laws and shall have such other duties and powers as
may be determined by the Trustees.
Any Vice Presidents shall have such duties and powers as shall be designated
from time to time by the Trustees.
3.5 CHIEF EXECUTIVE OFFICER. The Chief Executive Officer of the Trust shall be
the Chairman of the Board, the President or such other officer as is designated
by the Trustees and shall, subject to the control of the Trustees, have general
charge and supervision of the business of the Trust and, except as the Trustees
shall otherwise determine, preside at all meetings of the Shareholders and of
the Trustees. If no such designation is made, the President shall be the Chief
Executive Officer.
3.6 CHAIRMAN OF THE BOARD. If a Chairman of the Board of Trustees is elected, he
shall have the duties and powers specified in these By-Laws and shall have such
other duties and powers as may be determined by the Trustees.
3.7 TREASURER. The Treasurer shall be the chief financial and accounting officer
of the Trust, and shall, subject to the provisions of the Declaration of Trust
and to any arrangement made by the Trustees with a custodian, investment adviser
or manager, administrator or transfer, shareholder servicing or similar agent,
be in charge of the valuable papers, books of account and accounting records of
the Trust, and shall have such other duties and powers as may be designated from
time to time by the Trustees or by the President.
3.8 CLERK. The Clerk shall record all proceedings of the Shareholders and the
Trustees in books to be kept therefor, which books or a copy thereof shall be
kept at the principal office of the Trust. In the absence of the Clerk from any
meeting of the Shareholders or Trustees, an assistant Clerk, or if there be none
or if he or she is absent, a temporary clerk chosen at such meeting shall record
the proceedings thereof in the aforesaid books.
3.9 RESIGNATIONS AND REMOVALS. Any officer may resign at any time by written
instrument signed by him or her and delivered to the President or the Clerk or
to a meeting of the Trustees. Such resignation shall be effective upon receipt
unless specified to be effective at some other time. The Trustees may remove any
officer with or without cause. Except to the extent expressly provided in a
written agreement with the Trust, no officer resigning and no officer removed
shall have any right to any compensation for any period following his or her
officer removed shall have any right to any
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compensation for any period following his or her resignation or removal, or any
right to damages on account of such removal.
ARTICLE 4
Indemnification
4.1 TRUSTEES, OFFICERS, ETC. The Trust shall indemnify each of its Trustees and
officers (including persons who serve at the Trust's request as directors,
officers or trustees of another organization in which the Trust has any interest
as a shareholder, creditor or otherwise) (hereinafter referred to as a "Covered
Person") against all liabilities and expenses, including but not limited to
amounts paid in satisfaction of judgments, in compromise or as fines and
penalties, and counsel fees reasonably incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such Covered Person may be or may have
been threatened, while in office or thereafter, by reason of any alleged act or
omission as a Trustee or officer or by reason of his or her being or having been
such a Trustee or officer, except with respect to any matter as to which such
Covered Person shall have been finally adjudicated in any such action, suit or
other proceeding not to have acted in good faith in the reasonable belief that
such Covered Person's action was in the best interest of the Trust and except
that no Covered Person shall be indemnified against any liability to the Trust
or its Shareholders to which such Covered Person would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of such Covered Person's office. Expenses,
including counsel fees so incurred by any such Covered Person, may be paid from
time to time by the Trust in advance of the final disposition of any such
action, suit or proceeding on the condition that the amounts so paid shall be
repaid to the Trust if it is ultimately determined that indemnification of such
expenses is not authorized under this Article.
4.2 COMPROMISE PAYMENT. As to any matter disposed of by a compromise payment by
any such Covered Person referred to in Section 4.1 above, pursuant to a consent
decree or otherwise, no such indemnification either for said payment or for any
other expenses shall be provided unless such compromise shall be approved as in
the best interests of the Trust, after notice that it involved such
indemnification, (a) by a disinterested majority of the Trustees then in office;
or (b) by a majority of the disinterested Trustees then in office; or (c) by any
disinterested person or persons to whom the question may be referred by the
Trustees, provided that in the case of approval pursuant to clause (b) or (c)
there has been obtained an opinion in writing of independent legal counsel to
the effect that such Covered Person appears to have acted in good faith in the
reasonable belief that his or her action was in the best interests of the Trust
and that such indemnification would not protect such person against any
liability to the Trust or its Shareholders to which such person would otherwise
be subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of office; or (d) by
vote of Shareholders holding a majority of the involved in the conduct of
office; or (d) by vote of Shareholders holding a majority of the Shares entitled
to vote
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thereon, exclusive of any Shares beneficially owned by any interested Covered
Person. Approval by the Trustees pursuant to clause (a) or (b) or by any
disinterested person or persons pursuant to clause (c) of this Section shall not
prevent the recovery from any Covered Person of any amount paid to such Covered
Person in accordance with any of such clauses as indemnification if such Covered
Person is subsequently adjudicated by a court of competent jurisdiction not to
have acted in good faith in the reasonable belief that such Covered Person's
action was in the best interests of the Trust or to have been liable to the
Trust or its Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of such
Covered Person's office.
4.3 INDEMNIFICATION NOT EXCLUSIVE. The right of indemnification hereby provided
shall not be exclusive of or affect any other rights to which any such Covered
Person may be entitled. As used in this Article 4, the term "Covered Person"
shall include such person's heirs, executors and administrators; an "interested
Covered Person" is one against whom the action, suit or other proceeding in
question or another action, suit or other proceeding on the same or similar
grounds is then or has been pending; and a "disinterested Trustee" or
"disinterested person" is a Trustee or a person against whom none of such
actions, suits or other proceedings or another action, suit or other proceeding
on the same or similar grounds is then or has been pending. Nothing contained in
this Article shall affect any rights to indemnification to which personnel of
the Trust, other than Trustees and officers, and other persons may be entitled
by contract or otherwise under law, nor the power of the Trust to purchase and
maintain liability insurance on behalf of any such person.
ARTICLE 5
Reports
5.1 GENERAL. The Trustees and officers shall render reports at the time and in
the manner required by the Declaration of Trust or any applicable law. Officers
shall render such additional reports as they may deem desirable or as may from
time to time be required by the Trustees.
ARTICLE 6
Fiscal Year
6.1 GENERAL. Except as from time to time otherwise provided by the Trustees, the
fiscal year of the Trust shall end on December 31 in each year.
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ARTICLE 7
Seal
7.1 GENERAL. The seal of the Trust shall consist of a flat-faced die with the
word "Massachusetts," together with the name of the Trust and the year of its
organization cut or engraved thereon, but, unless otherwise required by the
Trustees, the seal shall not be necessary to be placed on, and its absence shall
not impair the validity of, any document, instrument or other paper executed and
delivered by or on behalf of the Trust.
ARTICLE 8
Execution of Papers
8.1 GENERAL. Except as the Trustees may generally or in particular cases
authorize the execution thereof in some other manner, all checks, notes, drafts
and other obligations and all registration statements and amendments thereto and
all applications and amendments thereto to the Securities and Exchange
Commission shall be signed by the Chairman, if any, the President, any Vice
President or the Treasurer or any of such other officers or agents as shall be
designated for that purpose by a vote of the Trustees.
ARTICLE 9
Provisions Relating to the
Conduct of the Trust's Business
9.1 DETERMINATION OF NET ASSET VALUE. The Trustees or any officer or officers or
agent or agents of the Trust designated from time to time for this purpose by
the Trustees shall determine at least once daily the net income and the value of
all the assets belonging to any Series or attributable to any class of Shares of
the Trust on each day upon which the New York Stock Exchange is open for
unrestricted trading and at such other times as the Trustees shall designate. In
determining asset values, all securities for which representative market
quotations are readily available shall be valued at market value, and all
securities and other assets for which representative market quotations are not
readily available shall be valued at fair value, all as determined in good faith
by the Trustees or an officer or officers or agent or agents, as aforesaid, in
accordance with accounting principles generally accepted at the time.
Notwithstanding the foregoing, the assets belonging to any Series or
attributable to any class of Shares of the Trust may, if so authorized by the
Trustees, be valued in accordance with the amortized cost method, and the asset
value so determined, subject to the power of the Trustees to alter the asset
value so determined, less total liabilities belonging to that Series or
attributable to any class of Shares (exclusive of capital stock and surplus)
shall be the net asset value until a new asset value is determined by the
Trustees or such
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officers or agents. In determining the net asset value the Trustees or such
officers or agents may include in liabilities such reserves for taxes, estimated
accrued expenses and contingencies in accordance with accounting principles
generally accepted at the time as the Trustees or such officers or agents may in
their best judgment deem fair and reasonable under the circumstances. The manner
of determining net asset value may from time to time be altered as necessary or
desirable in the judgment of the Trustees to conform it to any other method
prescribed or permitted by applicable law or regulation. Determinations of net
asset value made by the Trust or such officers or agents in good faith shall be
binding on all parties concerned. The foregoing sentence shall not be construed
to protect any Trustee, officer or agent of the Trust against any liability to
the Trust or its security holders to which he or she would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his or her office.
ARTICLE 10
Amendments to the By-Laws
10.1 GENERAL. These By-Laws may be amended or repealed, in whole or in part, by
a majority of the Trustees then in office at any meeting of the Trustees, or by
written consent in lieu thereof.
ARTICLE 11
11.1 PROXY INSTRUCTIONS TRANSMITTED BY TELEPHONIC OR ELECTRONIC MEANS. The
placing of a Shareholder's name on a proxy pursuant to telephonic or
electronically transmitted instructions obtained pursuant to procedures
reasonably designed to verify that such instructions have been authorized by
such Shareholder shall constitute execution of such proxy by or on behalf of
such Shareholder.
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EXHIBIT D
INVESTMENT ADVISORY AGREEMENT
BETWEEN
STATE STREET BANK AND TRUST COMPANY
AND
STATE STREET INSTITUTIONAL INVESTMENT TRUST
This Agreement is made as of this ____ day of ________, 2000, between
State Street Institutional Investment 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
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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 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;
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(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 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
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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.
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
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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 so long as substantially all of the assets of each Fund are
invested in the corresponding Portfolio of State Street Master Trust, no fees
shall be received for the services to be rendered by the Adviser under this
Agreement; otherwise, the Adviser shall receive fees, payable monthly, at the
following annual rates (expressed as a percentage of the average daily net
assets of each Fund):
<TABLE>
<CAPTION>
<S> <C>
State Street Equity 500 Index Fund .045%
State Street Equity 400 Index Fund .08%
State Street Equity 2000 Index Fund .10%
State Street MSCI-Registered Trademark-EAFE-Registered Trademark-Index Fund .15%
State Street Aggregate Bond Index Fund .10%
</TABLE>
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
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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 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 February ___,
2000, 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 Institutional Investment 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.
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IN WITNESS WHEREOF, the due execution hereof as of the date first above
written.
Attest: STATE STREET INSTITUTIONAL INVESTMENT TRUST
By: By:
----------------------- --------------------------------
James Little
President and Treasurer
Attest: STATE STREET BANK AND TRUST
COMPANY
Acting through its division
STATE STREET GLOBAL ADVISORS
By: By:
----------------------- -------------------------------
Name:
-------------------------------
Title:
-------------------------------
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EXHIBIT E
DISTRIBUTION AGREEMENT
Distribution Agreement made this __ day of February, 2000, by and between
The State Street Institutional Investment Trust, a Massachusetts trust (the
"Trust"), and ALPS Mutual Funds Services, Inc., a Colorado corporation (the
"Distributor").
WHEREAS, the Trust is a registered open-end management investment company
organized as a series trust offering a number of portfolios of securities (each
a "Fund" and collectively the "Funds"), each investing primarily in interests of
a portfolio of the State Street Master Trust, having filed with the Securities
and Exchange Commission (the "Commission") a registration statement on Form N-1A
under the Securities Act of 1933, as amended (the "1933 Act"), and the
Investment Company Act of 1940, as amended;
WHEREAS, the Trust desires to retain the services of the Distributor in
connection with the promotion and distribution of the shares of each Fund (the
"Shares");
WHEREAS, the Board of Trustees of the Trust has adopted a plan of
distribution (the "12b-1 Plan") pursuant to Rule 12b-1 under the 1940 Act with
respect to each Fund and may make payments to the Distributor pursuant to such
12b-1 Plan, subject to and in accordance with the terms and conditions thereof
and any related agreements;
WHEREAS, the Distributor is a registered broker-dealer under the Securities
Exchange Act of 1934, as amended (the "1934 Act") and a member of the National
Association of Securities Dealers ("NASD"); and
WHEREAS, the Distributor desires to provide such services to the Trust.
NOW, THEREFORE, in consideration of the mutual promises and undertakings
herein contained, the parties agree as follows:
1. APPOINTMENT. The Trust hereby appoints the Distributor as the exclusive
distributor for Shares of each Fund listed in Annex I hereto, as the same may be
amended by the parties from time to time, on the terms and for the period set
forth in this Agreement and subject to the registration requirements of the 1933
Act and of the laws governing the sale of securities in the various states, and
the Distributor hereby accepts such appointment and agrees to act in such
capacity hereunder.
2. DEFINITIONS. Wherever they are used herein, the following terms have the
following respective meanings:
a. "1940 Act" means the Investment Company Act of 1940 and the rules and
regulations thereunder as amended from time to time;
b. "Prospectus" means the Prospectus and Statement of Additional
Information constituting parts of the Registration Statement of the Trust under
the 1933 Act and the 1940 Act as such Prospectus and Statement of Additional
Information may be amended or supplemented and filed with the Commission from
time to time;
<PAGE>
c. "Registration Statement" means the registration statement most
recently filed from time to time by the Trust with the Commission and effective
under the 1933 Act and the 1940 Act, as such registration statement is amended
by any amendments thereto at the time in effect;
d. All capitalized terms used but not defined in this Agreement shall
have the meanings ascribed to such terms in the Registration Statement and the
Prospectus.
3. DUTIES OF THE DISTRIBUTOR.
(a) The Trust grants to the Distributor the right to sell the Shares as
agent on behalf of each Fund, during the term of this Agreement, subject to the
registration requirements of the 1933 Act and the 1940 Act and of the laws
governing the sale of securities in the various states ("Blue Sky Laws"), under
the terms and conditions set forth in this Agreement. The Distributor shall have
the right to sell, as agent on behalf of each Fund, the Shares covered by the
registration statement, prospectus and statement of additional information for
the Trust then in effect under the 1933 Act and the 1940 Act.
(b) The Distributor agrees to act as agent of the Trust with respect to
the continuous distribution of Shares of each Fund as set forth in the
Registration Statement and in accordance with the provisions thereof. The
Distributor further agrees as follows: (a) the Distributor shall generate and
transmit confirmations of Share purchase order acceptances to the purchaser; (b)
the Distributor shall deliver copies of the prospectus, included in the
Registration Statement, to purchasers of such Shares and upon request the
Statement of Additional Information; and (c) the Distributor shall maintain
telephonic, facsimile and/or access to direct computer communications links with
the Transfer Agent.
(c) The rights granted to the Distributor shall be nonexclusive in that
the Trust reserves the right to sell Shares to investors on applications
received and accepted by the Trust.
(d) The Distributor agrees to administer the Rule 12b-1 Plan on behalf of
the Trust. The Distributor shall, at its own expense, set up and maintain a
system of recording and payments for fees and reimbursement of expenses
disseminated pursuant to this Agreement and any other related agreements under
the Funds' Rule 12b-1 Plan and shall, pursuant to the 1940 Act, report such
payment activity under the Rule 12b-1 Plan to the Trust at least quarterly.
(e) All activities by the Distributor and its agents and employees which
are primarily intended to result in the sale of Shares shall comply with the
Registration Statement and Prospectus, the instructions of the Board of Trustees
of the Trust and all applicable laws, rules and regulations including, without
limitation, all rules and regulations made or adopted pursuant to the 1940 Act
by the Commission or any securities association registered under the 1934 Act,
including the NASD.
(f) Except as otherwise noted in the Registration Statement and
Prospectus, the offering price for all Shares will be the aggregate net asset
value of the Shares of the relevant Fund, as determined in the manner described
in the Registration Statement and Prospectus.
(g) If and whenever the determination of net asset value is suspended and
until such suspension is terminated, no further orders for Shares will be
processed by the Distributor except such unconditional orders as may have been
placed with the Distributor before it had knowledge of the suspension. In
addition, the Trust reserves the right to suspend sales and Distributor's
authority to process orders for Shares on behalf of the Trust, upon due notice
to the Distributor, if, in the judgment of
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<PAGE>
the Trust, it is in the best interests of the Trust to do so. Suspension will
continue for such period as may be determined by the Trust.
(h) The Distributor is not authorized by the Trust to give any
information or to make any representations other than those contained in the
Registration Statement or Prospectus or contained in shareholder reports or
other material that may be prepared by or on behalf of the Trust for the
Distributor's use. The Distributor shall be entitled to rely on and shall not be
responsible in any way for information provided to it by the Trust and its
respective service providers and shall not be liable or responsible for the
errors and omissions of such service providers, provided that the foregoing
shall not be construed to protect the Distributor against any liability to the
Trust or the Trust's shareholders to which the Distributor would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.
(i) The Board of Trustees shall approve the form of any Investor Services
Agreement to be entered into by the Distributor.
(j) At the request of the Trust, the Distributor shall enter into
agreements in the form specified by the Trust (each a "Participant Agreement")
with participants in the system for book-entry of The Depository Trust Company
and the NSCC as described in the Prospectus.
(k) The Distributor shall ensure that all direct requests for
Prospectuses and Statements of Additional of Information are fulfilled. The
Distributor will generally make it known in the brokerage community that
prospectuses and statements of additional information are available, including
by (i) making such disclosure in all marketing and advertising materials
prepared and/or filed by the Distributor with the NASD, and (ii) as may
otherwise be required by the Commission.
(l) The Distributor agrees to make available, at the Trust's request, one
or more members of its staff to attend Board meetings of the Trust in order to
provide information with regard to the ongoing distribution process and for such
other purposes as may be requested by the Board of Trustees of the Trust.
4. DUTIES OF THE TRUST.
(a) The Trust agrees to issue Shares of each Fund and to request The
Depository Trust Company to record on its books the ownership of such Shares in
accordance with the book-entry system procedures described in the Prospectus in
such amounts as the Distributor has requested through the Transfer Agent in
writing or by other means of data transmission, as promptly as practicable after
receipt by the Trust of the requisite purchase price and acceptance of such
order, upon the terms described in the Registration Statement. The Trust may
reject any order for Shares or stop all receipts of such orders at any time upon
reasonable notice to the Distributor, in accordance with the provisions of the
Prospectus.
(b) The Trust agrees that it will take all action necessary to register
an indefinite number of Shares under the 1933 Act. The Trust will make available
to the Distributor such number of copies of its then currently effective
Prospectus as the Distributor may reasonably request. The Trust will furnish to
the Distributor copies of all information, financial statements and other papers
that the Distributor may reasonably request for use in connection with the
distribution of Shares. The Trust shall keep the Distributor informed of the
jurisdictions in which Shares of the Trust are authorized for sale and shall
promptly notify the Distributor of any change in this information. The
Distributor shall not be liable for
3
<PAGE>
damages resulting from the sale of Shares in authorized jurisdictions where the
Distributor had no information from the Trust that such sale or sales were
unauthorized at the time of such sale or sales.
(c) The Trust represents to the Distributor that the Registration
Statement and Prospectus filed by the Trust with the Commission with respect to
the Trust have been prepared in conformity with the requirements of the 1933
Act, the 1940 Act and the rules and regulations of the Commission thereunder.
The Trust will notify the Distributor promptly of any amendment to the
Registration Statement or supplement to the Prospectus and any stop order
suspending the effectiveness of the Registration Statement.
5. FEES AND EXPENSES.
(a) The Trust will, with respect to each Fund, pay to the Distributor all
fees and expenses pursuant to the terms of the Rule 12b-1 Plan in effect for
each respective Fund.
(b) The Distributor will bear the following costs and expenses relating
to the distribution of Shares of the Funds: (a) the costs of maintaining the
records required of a broker-dealer registered under the 1934 Act; (b) the
expenses of maintaining its registration or qualification as a dealer or broker
under federal or state laws; (c) the expenses incurred by the Distributor in
connection with normal (non-expedited) NASD filing fees; and (d) all other
expenses incurred in connection with the distribution services contemplated
herein, except as specifically provided in this Agreement.
(c) The Distributor shall pay, from the fees received by it from the
Funds pursuant to the Rule 12b-1 Plan, all fees and make reimbursement of
expenses, pursuant to and in accordance with any and all Investor Services
Agreements, as approved by the Board of Trustees of the Trust, as set forth in
Section 3 of this Agreement. Further, the Distributor will pay, from the fees
received by it from the Funds pursuant to the Rule 12b-1 Plan, all fees with
respect to expedited NASD filing fees.
6. INDEMNIFICATION.
(a) The Trust agrees to indemnify and hold harmless the Distributor and
each of the directors, officers, agents and employees and any person who
controls the Distributor within the meaning of Section 15 of the 1933 Act (any
of the Distributor, its officers, agents, employees and directors or such
control persons, for purposes of this paragraph, an "Indemnitee") against any
loss, liability, claim, damages or expense (including the reasonable cost of
investigating or defending any alleged loss, liability, claim, damages or
expense and reasonable counsel fees incurred in connection therewith) arising
out of or based upon the claim that the Registration Statement, Prospectus,
shareholder reports or other information filed or made public by the Trust (as
from time to time amended) included an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein (and in the case of the Prospectus, in
light of the circumstances under which they were made) not misleading under the
1933 Act, or any other statute or the common law. However, the Trust does not
agree to indemnify the Distributor or hold it harmless to the extent that the
statement or omission was made in reliance upon, and in conformity with
information furnished to the Trust by or on behalf of the Distributor. The Trust
will also not indemnify any Indemnitee with respect to any untrue statement or
omission made in the Registration Statement or Prospectus that is subsequently
corrected in such document (or an amendment thereof or supplement thereto) if a
copy of the Prospectus (or such amendment or supplement) was not sent or given
to the person asserting any such loss, liability, claim, damage or expense at or
before the written confirmation to such person in any case where such delivery
is required by the 1933 Act and the Trust had notified the Distributor of the
amendment or
4
<PAGE>
supplement prior to the sending of the confirmation. In no case (i) is the
indemnity of the Trust in favor of any Indemnitee to be deemed to protect the
Indemnitee against any liability to the Trust or its shareholders to which the
Indemnitee would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under this Agreement, or (ii)
is the Trust to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against any Indemnitee unless the
Indemnitee shall have notified the Trust in writing of the claim within a
reasonable time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon Indemnitee
(or after Indemnitee shall have received notice of service on any designated
agent). However, failure to notify the Trust of any claim shall not relieve the
Trust from any liability which it may have to any Indemnitee against whom such
action is brought otherwise than on account of its indemnity agreement contained
in this paragraph. The Trust shall be entitled to participate at its own expense
in the defense, or, if it so elects, to assume the defense of any suit brought
to enforce any claims, but if the Trust elects to assume the defense, the
defense shall be conducted by counsel chosen by it and satisfactory to
Indemnitee, defendant or defendants in the suit. In the event the Trust elects
to assume the defense of any suit and retain counsel, Indemnitee, defendant or
defendants in the suit, shall bear the fees and expenses of any additional
counsel retained by them. If the Trust does not elect to assume the defense of
any suit, it will reimburse the Indemnitee, defendant or defendants in the suit,
for the reasonable fees and expenses of any counsel retained by them. The Trust
agrees to notify the Distributor and any Indemnified Dealer promptly of the
commencement of any litigation or proceedings against it or any of its officers
or trustees in connection with the issuance or sale of any of the Shares.
(b) The Distributor agrees to indemnify and hold harmless the Trust and
each of its Trustees and officers and any person who controls the Trust within
the meaning of Section 15 of the 1933 Act (for purposes of this paragraph, the
Trust and each of its Trustees and officers and its controlling persons are
collectively referred to as the "Trust Affiliates") against any loss, liability,
claim, damages or expense (including the reasonable cost of investigating or
defending any alleged loss, liability, claim, damages or expense and reasonable
counsel fees incurred in connection therewith) which the Trust Affiliate may
incur under the 1933 Act or any other statute or common law, but only to the
extent that such loss, liability, claim, damages or expense shall arise out of
or be based upon (i) the allegation of any wrongful act of the Distributor or
any of its employees or (ii) allegation that the Registration Statement,
Prospectus, shareholder reports or other information filed or made public by the
Trust (as from time to time amended) included an untrue statement of a material
fact or omitted to state a material fact required to be stated or necessary in
order to make the statements not misleading, insofar as the statement or
omission was made in reliance upon, and in conformity with information furnished
to the Trust by or on behalf of the Distributor. In no case (i) is the indemnity
of the Distributor in favor of any Trust Affiliate to be deemed to protect any
Trust Affiliate against any liability to the Trust or its security holders to
which such Trust Affiliate would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
by reason of its reckless disregard of its obligations and duties under this
Agreement, or (ii) is the Distributor to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against any Trust
Affiliate unless the Trust Affiliate shall have notified the Distributor in
writing of the claim within a reasonable time after the summons or the first
written notification giving information of the nature of the claim shall have
been served upon the Trust Affiliate (or after the Trust Affiliate shall have
received notice of service on any designated agent). However, failure to notify
the Distributor of any claim shall not relieve the Distributor from any
liability which it may have to the Trust Affiliate against whom the action is
brought otherwise than on account of its indemnity agreement contained in this
paragraph. The Distributor shall be entitled to participate at its own expense
in the defense or, if it so elects, to assume the defense of any suit brought to
enforce the claim, but if the Distributor elects to assume the defense, the
defense shall be conducted by counsel
5
<PAGE>
chosen by it and satisfactory to the Trust, its officers and Board and to any
controlling person or persons, defendant or defendants in the suit. In the event
that Distributor elects to assume the defense of any suit and retain counsel,
the Trust or controlling person or persons, defendant or defendants in the suit,
shall bear the fees and expenses of any additional counsel retained by them. If
the Distributor does not elect to assume the defense of any suit, it will
reimburse the Trust, its officers and Board or controlling person or persons,
defendant or defendants in the suit, for the reasonable fees and expenses of any
counsel retained by them. The Distributor agrees to notify the Trust promptly of
the commencement of any litigation or proceedings against it in connection with
the issuance and sale of any of the shares.
(c) No indemnified party shall settle any claim against it for which it
intends to seek indemnification from the indemnifying party, under the terms of
section 6(a) or 6(b) above, without the prior written notice to and consent from
the indemnifying party, which consent shall not be unreasonably withheld. No
indemnified or indemnifying party shall settle any claim unless the settlement
contains a full release of liability with respect to the other party in respect
of such action. This section 6 shall survive the termination of this Agreement.
7. REPRESENTATIONS.
(a) The Distributor represents and warrants that (i) it is duly organized
as a Colorado corporation and is and at all times will remain duly authorized
and licensed to carry out its services as contemplated herein; (ii) the
execution, delivery and performance of this Agreement are within its power and
have been duly authorized by all necessary action; and (iii) its entering into
this Agreement or providing the services contemplated hereby does not conflict
with or constitute a default or require a consent under or breach of any
provision of any agreement or document to which the Distributor is a party or by
which it is bound and (iv) it is registered as a broker-dealer under the 1934
Act and is a member of the NASD.
(b) The Trust represents and warrants that (i) it is duly organized as a
Massachusetts trust and is and at all times will remain duly authorized to carry
out its obligations as contemplated herein; (ii) it is registered as an
investment company under the 1940 Act; (iii) the execution, delivery and
performance of this Agreement are within its power and have been duly authorized
by all necessary action; and (iv) its entering into this Agreement does not
conflict with or constitute a default or require a consent under or breach of
any provision of any agreement or document to which the Trust is a party or by
which it is bound.
8. DURATION, TERMINATION AND AMENDMENT.
(a) This Agreement shall be effective on March 1, 2000, and unless
terminated as provided herein, shall continue for two years from its effective
date, and thereafter from year to year, provided such continuance is approved
annually by the vote of a majority of the Board of Trustees, and by the vote of
those Trustees who are not "interested persons" of the Trust (the "Independent
Trustees") and, if a plan under Rule 12b-1 under the 1940 Act is in effect, by
the vote of those Trustees who are not "interested persons" of the Trust and who
are not parties to such plan or this Agreement and have no financial interest in
the operation of such plan or in any agreements related to such plan, cast in
person at a meeting called for the purpose of voting on the approval. This
Agreement may be terminated at any time, without the payment of any penalty, as
to each Fund (i) by vote of a majority of the Independent Trustees or (ii) by
vote of a majority (as defined in the 1940 Act) of the outstanding voting
securities of the Fund, on at least sixty (60) days prior written notice to the
Distributor. In addition, this Agreement may be terminated at any time by the
Distributor upon at least sixty (60) days prior written notice to the Trust.
6
<PAGE>
This Agreement shall automatically terminate in the event of its assignment. As
used in this paragraph, the terms "assignment" and "interested persons" shall
have the respective meanings specified in the 1940 Act.
(b) During such period as the Distributor receives compensation pursuant
to the 12b-1 Plan, and this Agreement constitutes a Rule 12b-1 Plan related
agreement, (i) any material amendment to this Agreement requires the approval
provided for in paragraph (a) with respect to annual renewals of this Agreement,
and (ii) any amendment that materially increases the amount to be spent for
distribution services requires the additional approval of the majority of the
Trust's outstanding voting securities (as defined in the 1940 Act) of each
affected Fund; and (iii) the selection and nomination of those Trustees who are
not "interested persons" (as defined in the 1940 Act) of the Trust shall be
committed to the discretion of the Trustees of the Trust who are not such
"interested persons" of the Trust;
(c) No provision of this Agreement may be changed, waived, discharged or
terminated except by an instrument in writing signed by the party against which
an enforcement of the change, waiver, discharge or termination is sought.
9. NOTICE. 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
Distributor: ALPS Mutual Funds Services, Inc., 370 17th Street, Suite 3100,
Denver, CO 80202, Attn.: General Counsel, fax: (303) 623-7850; if to the Trust:
State Street Bank and Trust Company, Attn.: Fund Administration Legal
Department, P.O. Box 1713, Boston, MA 02105-1713 fax: (617) 662-3805.
10. LIMITATION OF LIABILITY. The Distributor is expressly put on notice of the
limitation of shareholder liability as set forth in the Declaration of Trust of
the Trust and agrees that the obligations assumed by the Trust under this
contract shall be limited in all cases to the Trust and its assets. The
Distributor shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Trust, nor shall the Distributor seek
satisfaction of any such obligation from the Trustees or any individual Trustee
of the Trust. The Distributor understands that the rights and obligations of
each series of shares of the Trust under the Declaration of Trust are separate
and distinct from those of any and all other series.
11. CHOICE OF LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of The Commonwealth of Massachusetts, without giving
effect to the choice of laws provisions thereof.
12. COUNTERPARTIES. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
13. SEVERABILITY. If any provisions of this Agreement shall be held or made
invalid, in whole or in part, then the other provisions of this Agreement shall
remain in force. Invalid provisions shall, in accordance with this Agreement's
intent and purpose, be amended, to the extent legally possible, by valid
provisions in order to effectuate the intended results of the invalid
provisions.
14. INSURANCE. The Distributor will maintain at its expense an errors and
omissions insurance policy that covers services by the Distributor hereunder.
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<PAGE>
15. SEGREGATION OF FEES AND EXPENSES. Amounts paid by each Fund to the
Distributor under its Rule 12b-1 Plan either for distribution related services
or shareholder services shall not be used to pay for the distribution of Shares
of, or shareholder servicing in respect of, any other Fund. However, fees under
the Rule 12b-1 Plan attributable to the Trust as a whole shall be allocated to
each Fund according to the method adopted by the Trust's Board of Trustees. Fees
attributable to the Trust as a whole shall include any amounts payable under the
Rule 12b-1 Plan to the Distributor for its services rendered hereunder. The
Distributor's allocation of such Rule 12b-1 Plan fees shall be subject to review
by the Trust's Board of Trustees.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date first set forth
above.
THE STATE STREET INSTITUTIONAL INVESTMENT TRUST
By:
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Name:
---------------------------------------------
Title:
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ALPS MUTUAL FUNDS SERVICES, INC.
By:
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Name:
---------------------------------------------
Title:
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8
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ANNEX I
FUND
State Street Equity 500 Index Fund (classes A and B)
State Street Equity 400 Index Fund
State Street Equity 2000 Index Fund
State Street MSCI-Registered Trademark
EAFE-Registered Trademark- Index Fund
State Street Aggregate Bond Index Fund
As of February __, 2000
9
<PAGE>
CUSTODIAN CONTRACT
This Contract between State Street Institutional Investment 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 Fund, State Street Equity 2000
Index Fund, State Street Equity 400 Index Fund, State Street MSCI-Registered
Trademark- EAFE-Registered Trademark- Index Fund and State Street Aggregate
Bond Index Fund (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)");
WHEREAS, the parties hereto are contemporaneously entering into an
Administration Agreement, dated the date hereof (the "Administration
Agreement"), pursuant to which the Trust will delegate to State Street Bank and
Trust Company certain responsibilities;
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.
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<PAGE>
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.
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;
-2-
<PAGE>
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;
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
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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 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;
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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 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 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
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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 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 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.
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2.8 [RESERVED].
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 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;
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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.
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
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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 shareholders who have delivered to the Transfer Agent
Proper Instructions for the redemption or repurchase of their Shares. In
connection with the redemption or repurchase of shares of the Trust, the
Custodian is authorized upon receipt of instructions from the Transfer Agent to
wire funds to or through a commercial bank designated by the redeeming
shareholders. In connection with the redemption or repurchase of shares of the
Trust, the Custodian shall honor checks drawn on the Custodian by a shareholder,
which checks have been furnished by the Trust to the shareholder, when presented
to the Custodian in accordance with such procedures and controls as are mutually
agreed upon from time to time between the Trust and the Custodian.
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 the
Trust and the Custodian agree to security procedures, including but not limited
to, the
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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 and
the Distributor 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 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
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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.
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
The Custodian shall receive for its services under this Agreement such fees
as may be agreed to by the parties from time to time.
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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 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
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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.
If the Trust shall terminate the Administration Agreement, State Street
Bank and Trust Company shall have the right to terminate this Agreement. Such
termination shall become effective concurrently with the effective termination
of the Administration Agreement.
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 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
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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 Fund, State Street Equity 2000
Index Fund, State Street Equity 400 Index Fund, State Street MSCI-Registered
Trademark- EAFE-Registered Trademark- Index Fund and State Street Aggregate
Bond Index Fund 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
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 Institutional Investment Trust
c/o State Street Bank and Trust Company
P.O. Box 1713
Boston, Massachusetts 02105-1713
Attention: Julie Tedesco
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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.
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.
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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.]
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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 _____________ , 2000.
ATTEST STATE STREET INSTITUTIONAL
INVESTMENT TRUST
- ----------------------------- ----------------------------------
ATTEST STATE STREET BANK AND TRUST
COMPANY
- ----------------------------- ----------------------------------
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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
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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.
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.
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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
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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.
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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:
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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.
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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
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<PAGE>
INSTRUCTION(S)
TELEPHONE CONFIRMATION
CLIENT State Street Institutional Investment 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
INVESTMENTMANAGER)
- ---------------- -------------------- -----------------
- ---------------- -------------------- -----------------
- ---------------- -------------------- -----------------
- ---------------- -------------------- -----------------
- ---------------- -------------------- -----------------
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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 NO. DOLLAR LIMITATION (IF ANY)
- ---------------- -------------------- -----------------
- ---------------- -------------------- -----------------
- ---------------- -------------------- -----------------
- ---------------- -------------------- -----------------
- ---------------- -------------------- -----------------
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DATA ACCESS SERVICES ADDENDUM TO CUSTODIAN AGREEMENT
AGREEMENT between State Street Institutional Investment 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)
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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.
(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
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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.
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
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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 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
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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.
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
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<PAGE>
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:
(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.
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<PAGE>
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 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
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<PAGE>
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.
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<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.
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<PAGE>
ATTACHMENT B
DESIGNATED CONFIGURATION
ADVISOR/SUBADVISOR
[ICON] Software is installed for access. [GRAPHIC]
Click on icon for access.
DIAL UP ACCESS
CONFIGURATION
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<PAGE>
ATTACHMENT C
UNDERTAKING
The Undersigned understands that in the course of its employment as
Investment Advisor to STATE STREET INSTITUTIONAL INVESTMENT 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:------------------------------------
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<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
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<PAGE>
Configuration or (ii) in the event the Customer has modified the
System in breach of this Agreement.
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<PAGE>
EXHIBIT H(1)
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the ____day of_______, 2000, by and between STATE STREET
INSTITUTIONAL INVESTMENT TRUST, a Massachusetts business trust, having its
principal office and place of business at 225 Franklin Street, Boston,
Massachusetts 02110 (the "Trust"), and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts trust company having its principal office and place of business at
225 Franklin Street, Boston, Massachusetts 02110 (the "Bank").
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 shares in a separate portfolio of securities and other
assets;
WHEREAS, the Trust intends to initially offer shares in five (5) series,
State Street Equity 500 Index Fund, State Street Equity 2000 Index Fund,
State Street Equity 400 Index Fund, State Street MSCI-Registered Trademark-
EAFE-Registered Trademark- Index Fund and State Street Aggregate Bond Index
Fund (each herein referred to as a "Fund", and collectively as the "Funds");
WHEREAS, the parties hereto are contemporaneously entering into an
Administration Agreement, dated the date hereof (the "Administration
Agreement"), pursuant to which the Trust will delegate to the Bank certain
responsibilities;
WHEREAS, the Trust on behalf of the Funds desires to appoint the Bank as its
transfer agent, dividend disbursing agent, and agent in connection with certain
other activities, and the Bank desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
1. TERMS OF APPOINTMENT; DUTIES OF THE BANK
1.1 Subject to the terms and conditions set forth in this Agreement, the
Trust, on behalf of the Funds, hereby employs and appoints the Bank to
act as, and the Bank agrees to act as its transfer agent for the
authorized and issued shares of beneficial interest, $ 0.001 par value of
each Fund listed on Annex A hereto ("Shares"), and as the Trust's
dividend disbursing agent.
1.2 The Bank agrees that it will perform the following services:
<PAGE>
(a) In accordance with procedures established from time to time by
agreement between the Trust on behalf of each of the Funds, as
applicable, and the Bank, the Bank shall:
(i) Receive for acceptance, orders for the purchase of Shares,
and promptly deliver payment and appropriate documentation
thereof to the Custodian of the Trust (the "Custodian");
(ii) Pursuant to purchase orders, issue the appropriate number
of Shares and hold such Shares in the appropriate
Shareholder account;
(iii) Receive for acceptance redemption requests and redemption
directions and deliver the appropriate documentation
thereof to the Custodian;
(iv) In respect to the transactions in items (i), (ii) and (iii)
above, the Bank shall execute transactions directly with
broker-dealers authorized by the Trust who shall thereby be
deemed to be acting on behalf of the Trust;
(v) At the appropriate time as and when it receives monies paid
to it by the Custodian with respect to any redemption, pay
over or cause to be paid over in the appropriate manner
such monies as instructed by the redeeming Shareholders;
(vi) Effect transfers of Shares by the registered owners thereof
upon receipt of appropriate instructions;
(vii) Prepare and transmit payments for dividends and
distributions declared by the Trust on behalf of the
applicable Fund;
(viii) Issue replacement certificates for those certificates
alleged to have been lost, stolen or destroyed upon receipt
by the Bank of indemnification satisfactory to the Bank and
protecting the Bank and the Trust, and the Bank at its
option, may issue replacement certificates in place of
mutilated stock certificates upon presentation thereof and
without such indemnity;
(ix) Maintain records of account for and advise the Trust and
its Shareholders as to the foregoing; and
(x) Record the issuance of Shares of the Trust and maintain
pursuant to SEC Rule 17Ad-10(e) a record of the total
number of Shares of the Trust which are authorized, based
upon data provided to it by the Trust, and issued and
outstanding. The Bank shall also provide the Trust on a
regular basis with the total number of Shares which are
authorized and issued and outstanding and shall have no
obligation, when recording the issuance of Shares, to
monitor the issuance of such Shares or to take cognizance
of any
<PAGE>
laws relating to the issue or sale of such Shares, which
functions shall be the sole responsibility of the Trust.
(b) In addition to and neither in lieu nor in contravention of the
services set forth in the above paragraph (a), the Bank shall: (i)
perform the customary services of a transfer agent and dividend
disbursing agent including but not limited to: maintaining all
Shareholder accounts, preparing Shareholder meeting lists, mailing
proxy materials, Shareholder reports and prospectuses to current
Shareholders, withholding taxes on U.S. resident and non-resident
alien accounts, preparing and filing U.S. Treasury Department
Forms 1099 and other appropriate forms required with respect to
dividends and distributions by federal authorities for all
Shareholders, preparing and mailing confirmation forms and
statements of account to Shareholders for all purchases and
redemptions of Shares and other confirmable transactions in
Shareholder accounts, preparing and mailing activity statements
for Shareholders, and providing Shareholder account information.
(c) In addition, the Trust shall (i) identify to the Bank in writing
those transactions and assets to be treated as exempt from blue
sky reporting for each State and (ii) verify the establishment of
transactions for each State on the system prior to activation and
thereafter monitor the daily activity for each State. The
responsibility of the Bank for the Trust's blue sky State
registration status is solely limited to the initial establishment
of transactions subject to blue sky compliance by the Trust and
the reporting of such transactions to the Trust as provided above.
(d) The Bank shall provide additional services on behalf of the Trust
(i.e., escheatment services) which may be agreed upon in writing
between the Trust and the Bank.
2. FEES AND EXPENSES
2.1 For the performance by the Bank pursuant to this Agreement, the Bank
shall receive such fees as may be agreed to by the parties from time to
time.
2.2 The Trust agrees on behalf of each of the Funds to pay all fees and
reimbursable expenses within five days following the receipt of the
respective billing notice. Postage for mailing of dividends, proxies,
Trust reports and other mailings to all Shareholder accounts shall be
advanced to the Bank by the Trust at least seven (7) days prior to the
mailing date of such materials.
3. REPRESENTATIONS AND WARRANTIES OF THE BANK
The Bank represents and warrants to the Trust that:
3.1 It is a trust company duly organized and existing under the laws of The
Commonwealth of Massachusetts.
<PAGE>
3.2 It is duly qualified to carry on its business in The Commonwealth of
Massachusetts.
3.3 It is empowered under applicable laws and by its Charter and By-Laws to
act as transfer agent and dividend disbursing agent and to enter into and
perform this Agreement.
3.4 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
3.5 It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement.
4. REPRESENTATIONS AND WARRANTIES OF THE TRUST
The Trust represents and warrants to the Bank that:
4.1 It is a trust duly organized and existing and in good standing under the
laws of The Commonwealth of Massachusetts.
4.2 It is empowered under applicable laws and by its Declaration of Trust and
By-Laws to enter into and perform this Agreement.
4.3 All corporate proceedings required by said Declaration of Trust and
By-Laws have been taken to authorize it to enter into and perform this
Agreement.
4.4 It is an open-end management investment company registered under the
Investment Company Act of 1940, as amended.
4.5 A registration statement under the Investment Company Act of 1940, as
amended, on behalf of each of the Funds has been filed with the
Securities and Exchange Commission.
5. DATA ACCESS AND PROPRIETARY INFORMATION
5.1 The Trust acknowledges that the data bases, computer programs, screen
formats, report formats, interactive design techniques, and documentation
manuals furnished to the Trust by the Bank as part of the Trust's ability
to access certain Trust-related data ("Customer Data") maintained by the
Bank on data bases under the control and ownership of the Bank or other
third party ("Data Access Services") constitute copyrighted, trade
secret, or other proprietary information (collectively, "Proprietary
Information") of substantial value to the Bank or other third party. In
no event shall Proprietary Information be deemed Customer Data. The Trust
agrees to treat all Proprietary Information as proprietary to the Bank
and further agrees that it shall not divulge any Proprietary Information
to any person or organization except as may be provided hereunder.
Without limiting the foregoing, the Trust agrees for itself and its
employees and agents:
<PAGE>
(a) to access Customer Data solely from locations as may be designated
in writing by the Bank and solely in accordance with the Bank's
applicable user documentation;
(b) to refrain from copying or duplicating in any way the Proprietary
Information;
(c) to refrain from obtaining unauthorized access to any portion of
the Proprietary Information, and if such access is inadvertently
obtained, to inform in a timely manner of such fact and dispose of
such information in accordance with the Bank's instructions;
(d) to refrain from causing or allowing the data acquired hereunder
from being retransmitted to any other computer facility or other
location, except with the prior written consent of the Bank;
(e) that the Trust shall have access only to those authorized
transactions agreed upon by the parties;
(f) to honor all reasonable written requests made by the Bank to
protect at the Bank's expense the rights of the Bank in
Proprietary Information at common law, under federal copyright law
and under other federal or state law.
Each party shall take reasonable efforts to advise its employees of their
obligations pursuant to this Section 5. The obligations of this Section shall
survive any earlier termination of this Agreement.
5.2 If the Trust notifies the Bank that any of the Data Access Services do
not operate in material compliance with the most recently issued user
documentation for such services, the Bank shall endeavor in a timely
manner to correct such failure. Organizations from which the Bank may
obtain certain data included in the Data Access Services are solely
responsible for the contents of such data and the Trust agrees to make no
claim against the Bank arising out of the contents of such third-party
data, including, but not limited to, the accuracy thereof. DATA ACCESS
SERVICES AND ALL COMPUTER PROGRAMS AND SOFTWARE SPECIFICATIONS USED IN
CONNECTION THEREWITH ARE PROVIDED ON AN AS IS, AS AVAILABLE BASIS. THE
BANK EXPRESSLY DISCLAIMS ALL WARRANTIES EXCEPT THOSE EXPRESSLY STATED
HEREIN INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
5.3 If the transactions available to the Trust include the ability to
originate electronic instructions to the Bank in order to (i) effect the
transfer or movement of cash or Shares or (ii) transmit Shareholder
information or other information, then in such event the Bank shall be
entitled to rely on the validity and authenticity of such instruction
without undertaking any further inquiry as long as such instruction is
undertaken in conformity with security procedures established by the Bank
from time to time.
6. INDEMNIFICATION
<PAGE>
6.1 The Bank shall not be responsible for, and the Trust shall on behalf of
the applicable Fund indemnify and hold the Bank harmless from and
against, any and all losses, damages, costs, charges, counsel fees,
payments, expenses and liability arising out of or attributable to:
(a) All actions of the Bank or its agents or subcontractors required
to be taken pursuant to this Agreement, provided that such actions
are taken in good faith and without negligence or willful
misconduct.
(b) The Trust's negligence, willful misconduct or lack of good faith
which arise out of the breach of any representation or warranty of
the Trust hereunder.
(c) The reliance on or use by the Bank or its agents or subcontractors
of information, records, documents or services which (i) are
received by the Bank or its agents or subcontractors, and (ii)
have been prepared, maintained or performed by the Trust or any
other person or firm on behalf of the Trust including but not
limited to any previous transfer agent or registrar.
(d) The reliance on, or the carrying out by the Bank or its agents or
subcontractors of any instructions or requests of the Trust on
behalf of the applicable Fund.
(e) The offer or sale of Shares in violation of any requirement under
the federal securities laws or regulations or the securities laws
or regulations of any state that such Shares be registered in such
state or in violation of any stop order or other determination or
ruling by any federal agency or any state with respect to the
offer or sale of such Shares in such state.
6.2 At any time the Bank may apply to any officer of the Trust for
instructions, and may consult with legal counsel with respect to any
matter arising in connection with the services to be performed by the
Bank under this Agreement, and the Bank and its agents or subcontractors
shall not be liable and shall be indemnified by the Trust on behalf of
the applicable Fund for any action taken or omitted by it in reliance
upon such instructions or upon the opinion of such counsel. The Bank, its
agents and subcontractors shall be protected and indemnified in acting
upon any paper or document, reasonably believed to be genuine and to have
been signed by the proper person or persons, or upon any instruction,
information, data, records or documents provided the Bank or its agents
or subcontractors by machine readable input, telex, CRT data entry or
other similar means authorized by the Trust, and shall not be held to
have notice of any change of authority of any person, until receipt of
written notice thereof from the Trust.
6.3 In order that the indemnification provisions contained in this Section 6
shall apply, upon the assertion of a claim for which the Trust may be
required to indemnify the Bank, the Bank shall promptly notify the Trust
of such assertion, and shall keep the Trust advised with respect to all
developments concerning such claim. The Trust shall have the option
<PAGE>
to participate with the Bank in the defense of such claim or to defend
against said claim in its own name or in the name of the Bank. The Bank
shall in no case confess any claim or make any compromise in any case in
which the Trust may be required to indemnify the Bank except with the
Trust's prior written consent.
7. STANDARD OF CARE
The Bank shall at all times act in good faith and agrees to use its best
efforts within reasonable limits to insure the accuracy of all services
performed under this Agreement, but assumes no responsibility and shall
not be liable for loss or damage due to errors unless said errors are
caused by its negligence, bad faith, or willful misconduct or that of its
employees.
8. COVENANTS OF THE TRUST AND THE BANK
8.1 The Trust shall on behalf of each of the Funds promptly furnish to the
Bank the following:
(a) A certified copy of the resolution of the Board of Trustees of the
Trust authorizing the appointment of the Bank and the execution
and delivery of this Agreement.
(b) A copy of the Declaration of Trust and By-Laws of the Trust and
all amendments thereto.
8.2 The Bank shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the extent
required by Section 31 of the Investment Company Act of 1940, as amended,
and the Rules thereunder, the Bank agrees that all such records prepared
or maintained by the Bank relating to the services to be performed by the
Bank hereunder are the property of the Trust and will be preserved,
maintained and made available in accordance with such Section and Rules,
and will be surrendered promptly to the Trust on and in accordance with
its request.
8.3 The Bank and the Trust agree that all books, records, information and
data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this
Agreement shall remain confidential, and shall not be voluntarily
disclosed to any other person, except as may be required by law.
8.4 In case of any requests or demands for the inspection of the Shareholder
records of the Trust, the Bank will endeavor to notify the Trust and to
secure instructions from an authorized officer of the Trust as to such
inspection. The Bank reserves the right, however, to exhibit the
Shareholder records to any person whenever it is advised by its counsel
that it may be held liable for the failure to exhibit the Shareholder
records to such person.
9. TERMINATION OF AGREEMENT
<PAGE>
9.1 This Agreement may be terminated by either party upon thirty (30) days
written notice to the other.
9.2 Should the Trust terminate the Administration Agreement, the Bank shall
have the right to terminate this Agreement. Such termination shall become
effective concurrently with the effective termination of the
Administration Agreement.
9.3 Should the Trust exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be
borne by the Trust on behalf of the applicable Fund(s). Additionally, the
Bank reserves the right to charge for any other reasonable expenses
associated with such termination and/or a charge equivalent to the
average of three (3) months' fees.
10. ADDITIONAL SERIES
In the event that the Trust establishes one or more series in addition to
the Funds with respect to which it desires to have the Bank render
services as transfer agent under the terms hereof, it shall so notify the
Bank in writing, and if the Bank agrees in writing to provide such
services, such series shall become a Fund hereunder.
11. ASSIGNMENT
11.1 Except as provided in Section 11.3 below, neither this Agreement nor any
rights or obligations hereunder may be assigned by either party without
the written consent of the other party.
11.2 This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
11.3 The Bank may, without further consent on the part of the Trust,
subcontract for the performance, in whole or in part, of this Agreement
with (i) Boston Financial Data Services, Inc., a Massachusetts
corporation ("BFDS") which is duly registered as a transfer agent
pursuant to Section 17A(c)(2) of the Securities Exchange Act of 1934, as
amended ("Section 17A(c)(2)"), (ii) a BFDS subsidiary duly registered as
a transfer agent pursuant to Section 17A(c)(2), (iii) a BFDS affiliate or
(iv) Boston EquiServe Trust Company, N.A.; provided, however, that the
Bank shall be as fully responsible to the Trust for the acts and
omissions of any subcontractor as it is for its own acts and omissions.
12. AMENDMENT
<PAGE>
This Agreement may be amended or modified by a written agreement executed
by both parties and authorized or approved by a resolution of the Board
of Trustees of the Trust.
13. MASSACHUSETTS LAW TO APPLY
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of The Commonwealth of
Massachusetts.
14. FORCE MAJEURE
In the event either party is unable to perform its obligations under the
terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other
causes reasonably beyond its control, such party shall not be liable for
damages to the other for any damages resulting from such failure to
perform or otherwise from such causes.
15. SPECIAL, INDIRECT AND CONSEQUENTIAL DAMAGES
Neither party to this Agreement shall be liable to the other party 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 Bank'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.
16. MERGER OF AGREEMENT
This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject
matter hereof whether oral or written.
17. LIMITATIONS OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS
A copy of the Declaration of Trust of the Trust is on file with the
Secretary of The Commonwealth of Massachusetts, and notice is hereby
given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or Shareholders
individually but are binding only upon the assets and property of the
Trust.
<PAGE>
18. COUNTERPARTS
This Agreement may be executed by the parties hereto on any number of
counterparts, and all of said counterparts taken together shall be deemed
to constitute one and the same instrument.
19. 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
STATE STREET INSTITUTIONAL INVESTMENT TRUST
BY:
------------------------------------------
ATTEST:
- ------------------------------
STATE STREET BANK AND TRUST COMPANY
BY:
------------------------------------------
Executive Vice President
ATTEST:
- ------------------------------
<PAGE>
ANNEX A
State Street Equity 500 Index Fund
State Street Equity 2000 Index Fund
State Street Equity 400 Index Fund
State Street MSCI-Registered Trademark- EAFE-Registered Trademark- Index Fund
State Street Aggregate Bond Index Fund
Dated:
<PAGE>
ADMINISTRATION AGREEMENT
Agreement dated as of ________ __, 2000 by and between State Street
Bank and Trust Company, a Massachusetts trust company (the "Administrator"), and
State Street Institutional Investment 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;
b. The Trust's currently effective registration statement under
the 1940 Act and the Trust's Prospectus(es) and Statement(s)
of Additional Information
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<PAGE>
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 materially 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;
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<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 materially 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 [why is the administrator overseeing this?
Shouldn't this just be in the Custody Contract?];
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<PAGE>
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;
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 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;
-4-
<PAGE>
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;
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;
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<PAGE>
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
address follow-up on matters raised at Board meetings;
aa. Prepare and file with the SEC Rule 24f-2 notices; and
bb. Perform Blue Sky services pursuant to the specific
instructions of the Trust and as detailed in Schedule B to
this Agreement.
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 as set forth on
Schedule C 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
-6-
<PAGE>
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 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
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<PAGE>
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.
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
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<PAGE>
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.
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: P.O. Box 1713, Boston, MA 02105-1713, Attn: Julie Tedesco, fax:
617-662-3805; 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.
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<PAGE>
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.
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.
21. LIMITATION OF LIABILITY
The Declaration of Trust dated February __, 2000, establishing the
Trust, which is hereby referred to and a copy of which is on file with the
Secretary of The
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<PAGE>
Commonwealth of Massachusetts, provides that the name State Street Institutional
Investment 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 INSTITUTIONAL INVESTMENT TRUST
By: _____________________________________
Name: ____________________________________
Title: ___________________________________
STATE STREET BANK AND TRUST COMPANY
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
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<PAGE>
ADMINISTRATION AGREEMENT
SCHEDULE A
LISTING OF FUNDS AND AUTHORIZED SHARES
<TABLE>
<CAPTION>
FUND AUTHORIZED SHARES
- ---- -----------------
<S> <C>
State Street Equity 500 Index Fund Unlimited
State Street Equity 2000 Index Fund Unlimited
State Street Equity 400 Index Fund Unlimited
State Street MSCI-Registered Trademark-
EAFE-Registered Trademark- Index Fund Unlimited
State Street Aggregate Bond Index Fund Unlimited
</TABLE>
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<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.
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<PAGE>
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.
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<PAGE>
EXHIBIT C
As consideration for State Street Bank and Trust Company's services as
administrator to each of the following Funds and such other services as the
parties may from time to time agree, State Street shall receive from each Fund
an annual administrative 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 FUND .05%
- CLASS A SHARES
STATE STREET EQUITY 500 INDEX FUND .05%
- CLASS B SHARES
STATE STREET EQUITY 2000 INDEX FUND .10%
STATE STREET EQUITY 400 INDEX FUND .10%
STATE STREET MSCI-Registered Trademark-
EAFE-Registered Trademark- INDEX FUND .10%
STATE STREET AGGREGATE BOND INDEX FUND .10%
</TABLE>
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EXHIBIT I
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, as of _____________________, that State
Street Institutional Investment 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: ________________________________
-16-
<PAGE>
POWER OF ATTORNEY
The undersigned officer of State Street Institutional Investment Trust (the
"Trust") hereby constitutes and appoints Julie A. Tedesco, Esq., and Jennifer S.
Fromm, Esq. each of them with full powers of substitution, as his true and
lawful attorney-in-fact and agent to execute in his name and on his 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 or its
affiliates 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 or its
affiliates 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 his 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 hereby revokes any
Powers of Attorney previously granted with respect to the Trust or its
affiliates concerning the filings and actions described herein.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the 4 day
of February, 2000.
SIGNATURE TITLE
/s/ JAMES B. LITTLE President and Treasurer
- ----------------------------------
James B. Little
<PAGE>
POWER OF ATTORNEY
The undersigned officer of State Street Institutional Investment Trust (the
"Trust") hereby constitutes and appoints Julie A. Tedesco, Esq., and Jennifer S.
Fromm, Esq. each of them with full powers of substitution, as his true and
lawful attorney-in-fact and agent to execute in his name and on his 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 or its
affiliates 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 or its
affiliates 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 his 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 hereby revokes any
Powers of Attorney previously granted with respect to the Trust or its
affiliates concerning the filings and actions described herein.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the 26 day
of February, 2000.
SIGNATURE TITLE
/s/ RINA K. SPENCE Trustee
- ----------------------------------
Rina K. Spence
<PAGE>
EXHIBIT M
RULE 12b-1 PLAN
State Street Institutional Investment Trust
1. THE TRUST. The State Street Institutional Investment Trust (the "Trust")
is an open-end management investment company registered as such under the
Investment Company Act of 1940, as amended (the "1940 Act"), and organized as a
series trust (each such series is referred to herein as a "Fund").
2. THE PLAN. The Trust desires to adopt a plan of distribution pursuant to
Rule 12b-1 under the 1940 Act with respect to the shares of beneficial interest
("Shares") of each Fund, and the Board of Trustees of the Trust (the "Board of
Trustees") has determined that there is a reasonable likelihood that adoption of
this Rule 12b-1 Plan (the "Plan") will benefit each State Street Institutional
Investment Fund (each a "Designated Fund" and collectively the "Designated
Funds") and their holders of Shares. Accordingly, each Designated Fund hereby
adopts this Plan in accordance with Rule 12b-1 under the 1940 Act on the
following terms and conditions (capitalized terms not otherwise defined herein
have the meanings assigned thereto in the Funds' registration statement under
the 1940 Act and under the Securities Act of 1933, as amended, as such
registration statement is amended by any amendments thereto at the time in
effect).
3. THE DISTRIBUTOR. The Trust has entered into a written Distribution
Agreement with ALPS Mutual Funds Services, Inc. (the "Distributor"), pursuant to
which the Distributor will act as the exclusive distributor with respect to the
distribution of Shares as described in the Funds' registration statement of each
Fund.
4. PAYMENTS. Each Designated Fund will pay fees, in the amounts and on the
terms set forth below, or as may hereafter be determined by the Board of
Trustees, that collectively will not exceed, on an annualized basis, the fees
set forth on Exhibit A attached hereto, as compensation to the Fund's
distributor or others for services in connection with the distribution of the
Fund's shares and services provided to the Fund's sharholders.
<PAGE>
5. EFFECTIVE DATE. This Plan shall become effective upon approval by a vote
of both a majority of the Board of Trustees and a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on this
Plan.
6. TERM. This Plan shall, unless terminated as hereinafter provided, remain in
effect with respect to the Designated Fund for one year from its effective date
and shall continue thereafter, provided that its continuance is specifically
approved at least annually by a vote of both a majority of the Trustees and a
majority of Independent Trustees, cast in person at a meeting called for the
purpose of voting on this Plan.
7. AMENDMENT. This Plan may be amended at any time by the Board of Trustees,
provided that (a) any amendment to increase materially the amount to be spent
for the services provided for in paragraph 4 hereof shall be effective only upon
approval by a vote of a majority of the outstanding voting securities (as such
term is defined in the 1940 Act) of the Designated Fund, and (b) any material
amendment of this Plan shall be effective only upon approval by a vote of both a
majority of the Board of Trustees and a majority of the Independent Trustees,
cast in person at a meeting called for the purpose of voting on such amendment.
8. TERMINATION. This Plan may be terminated at any time, without payment of
any penalty, by vote of a majority of the Independent Trustees, or by vote of a
majority of the outstanding voting securities (as such term is defined in the
1940 Act) of the Designated Fund. In the event of termination or non-continuance
of this Plan, the Trust may reimburse any expense that it incurred prior to such
termination or non-continuance, provided that such reimbursement is specifically
approved by both a majority of the Board of Trustees and a majority of the
Independent Trustees.
9. REPORTS. While this Plan is in effect, the Distributor shall provide to the
Trustees, and the Trustees shall review, at least quarterly, a written report of
the amounts expended pursuant to the Plan and the purposes for which such
expenditures were made.
10. RECORDS. The Trust shall preserve copies of this Plan, each agreement
related hereto and each report referred to in paragraph 9 hereof for a period of
at least six years from the date of the Plan, agreement and report, the first
two years in an easily accessible place.
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<PAGE>
11. INDEPENDENT TRUSTEES. While this Plan is in effect, the selection and
nomination of Independent Trustees shall be committed to the discretion of the
Trustees who are not "interested persons" of the Trust (as defined in the 1940
Act).
12. SEVERABILITY. If any provision of the Plan shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of the Plan shall
not be affected thereby.
Plan adopted _______________, 2000
3
<PAGE>
EXHIBIT A
The fees payable to the Distributor under this Plan shall not exceed, with
respect to a particular Fund and its classes of shares, if applicable, on an
annualized basis, the percentage of such class's average daily net assets set
forth below next to the class's name.
<TABLE>
<CAPTION>
FUND AND CLASS FEE LIMITATION
<S> <C>
State Street Equity 500 Index Fund
Class A 0.15%
Class B 0.25%
State Street Equity 400 Index Fund 0.25%
State Street Equity 2000 Index Fund 0.25%
State Street MSCI-Registered Trademark-
EAFE-Registered Trademark- Index Fund 0.25%
State Street Aggregate Bond Index Fund 0.25%
</TABLE>
4
<PAGE>
EXHIBIT N
STATE STREET INSTITUTIONAL INVESTMENT TRUST
PLAN PURSUANT TO RULE 18f-3(d) UNDER THE INVESTMENT COMPANY ACT OF 1940
Effective ___________, 2000
WHEREAS, the Board of Trustees of the State Street Institutional
Investment Trust (the "Trust") has considered the following multi-class plan
(the "Plan") under which the Trust may offer multiple classes of shares of its
now existing and hereafter created series pursuant to Rule 18f-3 (the "Rule")
under the Investment Company Act of 1940 (the "1940 Act"); and
WHEREAS, a majority of the Trustees of the Trust and a majority of the
Trustees who are not interested persons of the Trust have found the Plan, as
proposed, to be in the best interests of each class of shares of each series of
the Trust individually and the Trust as a whole.
NOW, THEREFORE, the Trust hereby approves and adopts the following Plan
pursuant to the Rule.
THE PLAN
Each now existing and hereafter created series ("Fund") of the Trust
may from time to time issue one or more of the following classes of shares:
Class A shares and Class B shares. Each Class is subject to such investment
minimums and other conditions of eligibility as are set forth in the Trust's
prospectuses, each as from time to time in effect (each, a "Prospectus"). The
differences in expenses between these Classes of shares, and the exchange
features of each Class of shares, are set forth below in this Plan, which is
subject to change, to the extent permitted by law and by the Agreement and
Declaration of Trust and Bylaws of the Trust, as amended from time to time, by
action of the Board of Trustees of the Trust. There are no conversion rights or
features relating to either Class A or Class B shares. Nothing in this Plan
shall limit the authority of the Trustees to create additional classes of shares
of any Fund.
CLASS CHARACTERISTICS
Class A and Class B shares of a Fund represent interests in the assets
of such Fund. The Classes differ materially only with respect to the amount of
Rule 12b-1 fees (the "Rule 12b-1 Fees") borne by the Classes. Rule 12b-1 Fees
are paid under a plan adopted pursuant to Rule 12b-1 promulgated under the 1940
Act (the "Rule 12b-1 Plan") relating to the Classes of shares adopted by the
Trustees of the Trust.
<PAGE>
EXPENSE ALLOCATIONS
Class A shares pay Rule 12b-1 Fees at an annual rate of up to .15% of a
Fund's average daily net assets, while Class B shares pay Rule 12b-1 Fees at an
annual rate of up to .25% of a Fund's average daily net assets. Each Class may,
at the Trustees' discretion, also pay a different share of other expenses, not
including advisory or custodial fees or other expenses related to the management
of the Trust's assets, if these expenses are actually incurred in a different
amount by that class, or if the Class receives services of a different kind or
to a different degree than the other Classes ("Class Expenses"). All other
expenses will be allocated to each Class on the basis of the net asset value of
that Class in relation to the net asset value of a particular Fund attributable
to that Class.
VOTING RIGHTS
Each Class of shares of each Fund has identical voting rights except
that each Class has exclusive voting rights on any matter submitted to
shareholders that relates solely to that Class, and has separate voting rights
on any matter submitted to shareholders in which the interests of one Class
differ from the interests of any other Class. In matters as to which one or more
Classes do not have exclusive voting rights, all Classes of shares of a Fund
will vote together, except when a Class vote is required by the 1940 Act.
AMENDMENTS
The Plan may be amended from time to time in accordance with the
provisions and requirements of the Rule.
2
<PAGE>
EXHIBIT P(1)
STATE STREET INSTITUTIONAL INVESTMENT TRUST (THE "TRUST")
CODE OF ETHICS
I. DEFINITIONS
1. "Access Person" shall have the same meaning as that set forth
in Rule 17j-1(a)(1) of the 1940 Act.
2. "Adviser" shall mean State Street Bank and Trust Company.
3. "Adviser Access Person" shall mean a director, officer or
advisory person, as defined in Rule 17j-1(e)(2), of the Adviser who, with
respect to the Trust, makes any recommendation, participates in the
determination of which recommendation shall be made, or whose principal function
or duties relate to the determination of which recommendation shall be made to
the Trust; or who, in connection with his or her duties, obtains any information
concerning securities recommendations being made by the Adviser to the Trust.
4. "Adviser's Code of Ethics" shall mean the Code of Ethics of
State Street Bank and Trust Company with respect to personal securities
transactions.
5. "Beneficial Ownership" shall be interpreted in the manner as it
would be in determining whether a person is subject to the provisions of Section
16 of the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder.
6. A Security is being "considered for purchase or sale" by a Fund
when a recommendation that such Fund purchase or sell the Security has been made
by the Adviser or an Access Person of the Adviser or Trust. "Code" shall mean
this Code of Ethics.
7. "Control" shall have the same meaning as that set forth in
Section 2(a)(9) of the 1940 Act. Generally it means the power to exercise a
controlling influence over the management or policies of a company, unless such
power is solely the result of an official position with such company.
8. "Compliance Officer" shall mean (i) with respect to the
Adviser, a person designated by the Adviser to receive reports and take certain
actions, as provided in the Adviser's Code of Ethics, and (ii) with respect to
the Trust, a person designated by the Trust to receive reports and take certain
actions, as provided in this Code of Ethics.
9. "Fund" or "Funds" shall mean such portfolio or series of the
Trust.
10. "Interested Person" shall have the meaning as considered in
Section 2(a)(19) of the 1940 Act.
11. "Independent Trustee" shall mean any Trustee of the Trust who
is not an Interested Person of the Trust.
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12. An "Initial Public Offering" means an offering registered under
the Securities Act of 1933, the issuer of which, immediately before the
registration, was not subject to the reporting requirements of Sections 13 or
15(d) of the Securities Exchange Act of 1934.
13. "Investment Company Access Person" shall mean a trustee,
officer or advisory person, as defined in Rule 17j-1(e)(2), of the Trust other
than an Independent Trustee or an Adviser Access Person.
14. "Investment Personnel" of the Trust or the Adviser shall mean
(a) any employee of the Trust or the Adviser (or of any company in a control
relationship to the Trust or the Adviser) who, in connection with his or her
regular functions or duties, makes or participates in making recommendations
regarding the purchase or sale of securities by the Trust; and (b) any natural
person who controls the Trust or the Adviser and who obtains information
concerning recommendations made to the Trust regarding the purchase or sale of
securities by the Trust.
15. "Limited Offering" means an offering that is exempt from
registration under the Securities Act of 1933 pursuant to section 4(2) or
section 4(6) or pursuant to rule 504, rule 505, or rule 506 under the Securities
Act of 1933.
16. "Purchase" or "sale" of a security includes, among other
things, the writing of an option to purchase or sell a security.
17. "Security" shall have the same meanings as that set forth in
Section 2(a)(36) of the 1940 Act (generally, all securities) except that it
shall not include securities issued by the Government of the United States or an
agency or instrumentality thereof (including all short-term debt securities
which are "government securities" within the meaning of Section 2(a)(16) of the
1940 Act), bankers' acceptances, bank certificates of deposit, commercial paper
and shares of registered open-end investment companies.
18. "Trust" means the State Street Master Trust.
II. CODE PROVISIONS APPLICABLE TO ALL ACCESS PERSONS
No Access Person of the Trust, in connection with the purchase or sale,
directly or indirectly, by such Access Person of a Security held or to be
acquired by the Trust, shall:
1. employ any device, scheme or artifice to defraud the Trust;
2. make to the Trust any untrue statement of a material fact or
omit to state to the Trust a material fact necessary in order to make
the statements made, in light of the circumstances under which they are
made, not misleading;
3. engage in any act, practice, or course of business which
operates or would operate as a fraud or deceit upon the Trust; or
4. engage in any manipulative practice with respect to the Trust.
2
<PAGE>
III. CODE PROVISIONS APPLICABLE ONLY TO ADVISER ACCESS PERSONS
1. CODE OF ETHICS. The provisions of the Adviser's Code of Ethics
are hereby adopted as the Code of Ethics of the Trust applicable to Adviser
Access Persons. A violation of the Adviser's Code of Ethics by any Adviser
Access Person shall also constitute a violation of this Code of Ethics.
2. REPORTS. Adviser Access Persons shall file the reports required
by the Adviser's Code of Ethics. Such filings shall be deemed to be filings with
the Trust under this Code of Ethics, and shall at all times be available to the
Trust.
3. REVIEW AND SANCTIONS. At periodic intervals established by the
Trustees of the Trust, but no less frequently than annually, the Compliance
Officer of the Adviser shall report to the Board of Trustees of the Trust all
material violations by Adviser Access Persons of the Adviser's Code of Ethics
during such period and the corrective action taken by the Adviser.
IV. CODE PROVISIONS APPLICABLE ONLY TO INDEPENDENT TRUSTEES OF THE TRUST
1. PROHIBITED PURCHASES AND SALES. No Independent Trustee of the
Trust shall purchase or sell, directly or indirectly, any Security in which
such Independent Trustee has, or by reason of such transaction acquires, any
direct or indirect Beneficial Ownership and which to such Independent Trustee's
actual knowledge at the time of such purchase or sale:
(a) is being considered for purchase or sale by a Fund; or
(b) is being purchased or sold by a Fund.
2. EXEMPTED TRANSACTIONS. The prohibitions of Section IV.1 of
this Code shall not apply to:
(a) purchases or sales effected in any account over which
the Independent Trustee has no direct or indirect influence or
control;
(b) purchases or sales which are non-volitional on the
part of the Independent Trustee;
(c) purchases or sales which are part of an automatic
dividend reinvestment plan;
(d) purchases effected upon the exercise of rights issued
by an issuer PRO RATA to all holders of a class of its
securities, to the extent such rights were acquired from such
issuer, and sales of such rights so acquired;
(e) sales of securities held in a margin account to the
extent necessary in order to meet margin requirements;
(f) purchases or sales other than those exempted in (a)
through (e) above, (i) which will not cause the Independent
Trustee to gain improperly a personal profit as a result of
such Independent Trustee's relationship with the Trust, or
(ii) which are only remotely potentially harmful to a Fund
because the proposed transaction would be unlikely to affect a
highly institutional market, or (iii) which, because of the
circumstances of the
3
<PAGE>
proposed transaction, are not related economically to the
Securities purchased or sold or to be purchased or sold by a
Fund, and in each case which are previously approved by the
Compliance Officer of the Trust, which approval shall be
confirmed in writing.
3. REPORTING.
(a) Whether or not one of the exemptions listed in Section
IV.2 hereof applies, each Independent Trustee of the Trust
shall file with the Compliance Officer of the Trust a dated
written report containing the information described in Section
IV.3(b) of this Code with respect to each transaction in any
Security in which such Independent Trustee has, or by reason
of such transaction acquires, any direct or indirect
Beneficial Ownership, if such Independent Trustee, at the time
the transaction was entered into, actually knew, or in the
ordinary course of fulfilling official duties as a trustee of
the Trust should have known, that during the 15-day period
immediately preceding or after the date of that transaction:
(i) such Security was or is to be purchased or sold
by a Fund, or
(ii) such Security was or is being considered for
purchase or sale by a Fund;
PROVIDED, HOWEVER, that such Independent Trustee shall not be
required to make a report with respect to any transaction
effected for any account over which such Independent Trustee
does not have any direct or indirect influence or control.
Each such report shall be deemed to be filed with the Trust
for purposes of this Code, and may contain a statement that
the report shall not be construed as an admission by the
Independent Trustee that such Independent Trustee has any
direct or indirect Beneficial Ownership in the Security to
which the report relates.
(b) Such report shall be made not later than 10 days after
the end of the calendar quarter in which the transaction to
which the report relates was effected, and shall contain the
following information:
(i) the date of the transaction, the title of and the
number of shares, and the principal amount of each
Security involved;
(ii) the nature of the transaction (I.E., purchase,
sale or any other type of acquisition or disposition);
(iii) the price at which the transaction was effected;
and
(iv) the name of the broker, dealer or bank with or
through whom the transaction was effected.
Any report concerning a purchase or sale prohibited under Section IV.1 hereof
with respect to which the Independent Trustee relies upon one of the exemptions
provided in Section IV.2 shall contain a brief statement of the exemption relied
upon and the circumstances of the transaction.
4. REVIEW. The Compliance Officer of the Trust shall review or
supervise the review of the personal securities transactions reported pursuant
to Section IV.3. As part of that review, each such
4
<PAGE>
reported securities transaction shall be compared against completed and
contemplated portfolio transactions of the Trust to determine whether a
violation of this Code may have occurred. If the Compliance Officer of the Trust
determines that a violation may have occurred, the Compliance Officer of the
Trust shall submit the pertinent information regarding the transaction to the
Trustees of the Trust. The Trustees shall evaluate whether a material violation
of this Code has occurred, taking into account all the exemptions provided under
Section IV.2. Before making any determination that a violation has occurred, the
Trustees shall give the person involved an opportunity to supply additional
information regarding the transaction in question and shall consult with counsel
for the Independent Trustee whose transaction is in question.
5. SANCTIONS. If the Trustees of the Trust determine that a
material violation of this Code has occurred, the Trustees may take such action
and impose such sanctions as said Trustees deem appropriate.
V. CODE PROVISIONS APPLICABLE ONLY TO INVESTMENT COMPANY ACCESS PERSON
1. PROHIBITED PURCHASES AND SALES. No Investment Company Access
Person shall purchase or sell, directly or indirectly, any Security in which
such Investment Company Access Person has, or by reason of such transaction
acquires, any direct or indirect Beneficial Ownership and which to such
Investment Company Access Person's actual knowledge as the time of such
purchase or sale:
(a) is being considered for purchase or sale by a Fund; or
(b) is being purchased or sold by a Fund.
2. EXEMPTED TRANSACTIONS. The prohibitions of Section V.1 of this
Code shall not apply to:
(a) purchases or sales effected in any account over which
the Investment Company Access Person has no direct or indirect
influence or control;
(b) purchases or sales which are non-volitional on the part
of the Investment Company Access Person;
(c) purchases or sales which are part of an automatic
dividend reinvestment plan;
(d) purchases effected upon the exercise of rights issued
by an issuer PRO RATA to all holders of a class of its
securities, to the extent such rights were acquired from such
issuer, and sales of such rights so acquired;
(e) sales of securities held in a margin account to the
extent necessary in order to meet margin requirements;
(f) purchases or sales other than those exempted in (a)
through (e) above, (i) which will not cause the Investment
Company Access Person to gain improperly a personal profit as
a result of such Investment Company Access Person's
relationship with the Trust, or (ii) which are only remotely
potentially harmful to a Fund because the proposed transaction
would be unlikely to affect a highly institutional market, or
(iii) which, because of the circumstances of the proposed
transaction, are not related economically to
5
<PAGE>
the Securities purchased or sold or to be purchased or sold by
a Fund, and in each case which are previously approved by the
Compliance Officer of the Trust, which approval shall be
confirmed in writing.
3. REPORTING. Whether or not one of the exemptions listed in
Section V.2 hereof applies, each Investment Company Access Person shall file
with the Compliance Officer of the Trust:
(a) within 10 days of becoming an Investment Company Access
Person, a dated initial holdings report. Such report shall
contain the title of, the number of shares of, and the
principal amount of each security beneficially owned by the
Investment Company Access Person. Such report shall also list
the name of any broker, dealer or bank with whom the
Investment Company Access person maintained an account in
which any securities were held for the direct or indirect
benefit of the Investment Company Access Person as of the date
the person became an Investment Company Access Person;
(b) an annual holdings report which updates the information
provided in the initial holdings report. Such report shall
provide the information required in subparagraph (a) above,
which information must be as of a date no more than 30 days
prior to the date such report is submitted;
(c) a quarterly dated transaction written report containing
the information described below with respect to each
transaction in any Security in which such Investment Company
Access Person has, or by reason of such transaction acquires,
any direct or indirect Beneficial Ownership; PROVIDED, HOWEVER,
that such Investment Company Access Person shall not be
required to make a report with respect to any transaction
effected for any account over which such Investment Company
Access Person does not have any direct or indirect influence or
control. Each such report shall be deemed to be filed with the
Trust for purposes of this Code, and may contain a statement
that the report shall not be construed as an admission by the
Investment Company Access Person that he or she has any direct
or indirect Beneficial Ownership in the Security to which the
report relates. Such report shall be made not later than 10
days after the end of the calendar quarter in which the
transaction to which the report relates was effected, and
shall contain the following information:
(i) the date of the transaction, the title of and the
number of shares, and the principal amount of each
Security involved;
(ii) the nature of the transaction (I.E., purchase,
sale or any other type of acquisition or disposition);
(iii) the price at which the transaction was effected;
and
(iv) the name of the broker, dealer or bank with or
through whom the transaction was effected.
Any report concerning a purchase or sale prohibited under Section V.1 hereof
with respect to which the Investment Company Access Person relies upon one of
the exemptions provided in Section V.2 shall contain a brief statement of the
exemption relied upon and the circumstances of the transaction.
6
<PAGE>
4. REVIEW. The Compliance Officer of the Trust shall review or
supervise the review of the personal securities transactions reported pursuant
to Section V.3. As part of that review, each such reported securities
transaction shall be compared against completed and contemplated portfolio
transactions of the Trust to determine whether a violation of this Code may have
occurred. If the Compliance Officer of the Trust determines that a violation may
have occurred, the Compliance Officer of the Trust shall submit the pertinent
information regarding the transaction to the Trustees of the Trust. The Trustees
shall evaluate whether a material violation of this Code has occurred, taking
into account all the exemptions provided under Section V.2. Before making any
determination that a violation has occurred, the Trustees shall give the person
involved an opportunity to supply additional information regarding the
transaction in question and shall consult with counsel for the Investment
Company Access Person whose transaction is in question.
5. SANCTIONS. If the Trustees of the Trust determine that a
material violation of this Code has occurred, the Trustees may take such action
and impose such sanctions as said Trustees deem appropriate.
6. EXCEPTION TO REPORTING REQUIREMENTS. No Investment Company
Access Person shall be required to comply with the provisions of Section V.3.(c)
hereof if the report required thereunder would duplicate information contained
in broker trade confirmations or account statements timely received by the
Designated Person of the Trust.
VI. CODE PROVISIONS APPLICABLE ONLY TO INESTMENT PERSONNEL
INVESTMENTS IN IPOs AND LIMITED OFFERINGS. Investment Personnel must
obtain approval from the Compliance Officer of the Trust or the Adviser prior to
directly or indirectly acquiring beneficial ownership in any securities in an
Initial Public Offering or in a Limited Offering. In granting such approval, the
Compliance Officer shall consider, among other factors, whether the investment
opportunity in question should be reserved for the Trust and whether the
opportunity is being offered to an individual by virtue of his position with the
Trust or the Adviser.
VII. MISCELLANEOUS PROVISIONS
1. APPROVAL OF CODE. This Code shall be deemed to be Trust's Code
of Ethics upon approval by the Trustees of the Trust, including a majority of
the Independent Trustees.
2. AMENDMENT OR REVISION OF THE CODE. Any amendment to or revision
of this Code of Ethics shall be promptly furnished to the Trust's Trustees and
any material amendment to or revision of this Code of Ethics must be approved
by the Trustees, including a majority of the Independent Trustees, no later
than six months after adoption of such amendment or revision.
3. AMENDMENT OR REVISION OF ADVISER'S CODE OF ETHICS. Any amendment
or revision of the Adviser's Code of Ethics shall be deemed to be an amendment
or revision of Section III.1 of this Code, and such amendment or revision shall
be promptly furnished to the Independent Trustees of the Trust.
4. ANNUAL ISSUES AND CERTIFICATION REPORT. At periodic intervals
established by the Trustees of the Trust, but no less frequently than annually,
the Compliance Officer of the Trust shall provide a written report to the
Trustees of the Trust regarding any issues which arose under this Code of Ethics
since the last report to the Board of Trustees, including, but not limited to,
information about material Code or procedure violations and sanctions imposed in
response to any material violations. In addition,
7
<PAGE>
the Compliance Officer of the Trust will provide to the Trustees of the Trust
in writing a certification that the Trust has adopted procedures reasonably
necessary to prevent Investment Company Access Persons from violating this Code
of Ethics.
5. RECORDS. The Trust shall maintain records in the manner and to
the extent set forth below, which records may be maintained on microfilm under
the conditions described in Rule 31a-2(f)(1) under the 1940 Act and shall be
available for examination by representatives of the Securities and Exchange
Commission:
(a) A copy of this Code and any other code that is, or at
any time within the past five years has been, in effect shall be
preserved in an easily accessible place;
(b) A record of any violation of this Code and of any action
taken as a result of such violation shall be preserved in an
easily accessible place for a period of not less than five
years following the end of the fiscal year in which the
violation occurs;
(c) A copy of each report made pursuant to this Code shall
be preserved for a period of not less than five years from the
end of the fiscal year in which its is made, the first two
years in an easily accessible place; and
(d) A list of persons who are, or within the past five years
have been, required to make reports pursuant to this Code
shall be maintained in an easily accessible place.
6. CONFIDENTIALITY. All reports of securities transactions and any
other information filed with the Trust or furnished to any person pursuant to
this Code shall be treated as confidential, but are subject to review as
provided herein and by representatives of the Securities and Exchange
Commission.
7. INTERPRETATION OF PROVISIONS. The Trustees of the Trust may from
time to time adopt such interpretation of this Code as they deem appropriate.
8. EFFECT OF VIOLATION OF THIS CODE. In adopting Rule 17j-1, the
Securities and Exchange Commission specifically noted in Investment Company Act
Release No. 11421 that a violation of any provision of a particular code of
ethics, such as this Code, would not be considered a PER SE unlawful act
prohibited by the general anti-fraud provisions of the Rule. In adopting this
Code of Ethics, it is not intended that a violation of this Code is or should be
considered to be a violation of Rule 17j-1.
Adopted: [ ]
8
<PAGE>
EXHIBIT P(2)
STATE STREET MASTER TRUST (THE "TRUST")
CODE OF ETHICS
I. DEFINITIONS
1. "Access Person" shall have the same meaning as that set forth
in Rule 17j-1(e)(1) of the 1940 Act.
2. "Adviser" shall mean State Street Bank and Trust Company.
3. "Adviser Access Person" shall mean a director, officer or
advisory person, as defined in Rule 17j-1(e)(2), of the Adviser who, with
respect to the Trust, makes any recommendation, participates in the
determination of which recommendation shall be made, or whose principal function
or duties relate to the determination of which recommendation shall be made to
the Trust; or who, in connection with his or her duties, obtains any information
concerning securities recommendations being made by the Adviser to the Trust.
4. "Adviser's Code of Ethics" shall mean the Code of Ethics of
State Street Bank and Trust Company with respect to personal securities
transactions.
5. "Beneficial Ownership" shall be interpreted in the manner as it
would be in determining whether a person is subject to the provisions of Section
16 of the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder.
6. A Security is being "considered for purchase or sale" by a Fund
when a recommendation that such Fund purchase or sell the Security has been made
by the Adviser or an Access Person of the Adviser or Trust. "Code" shall mean
this Code of Ethics.
7. "Control" shall have the same meaning as that set forth in
Section 2(a)(9) of the 1940 Act. Generally it means the power to exercise a
controlling influence over the management or policies of a company, unless such
power is solely the result of an official position with such company.
8. "Compliance Officer" shall mean (i) with respect to the Adviser,
a person designated by the Adviser to receive reports and take certain actions,
as provided in the Adviser's Code of Ethics, and (ii) with respect to the Trust,
a person designated by the Trust to receive reports and take certain actions, as
provided in this Code of Ethics.
9. "Fund" or "Funds" shall mean such portfolio or series of the
Trust.
10. "Interested Person" shall have the meaning as considered in
Section 2(a)(19) of the 1940 Act.
11. "Independent Trustee" shall mean any Trustee of the Trust who
is not an Interested Person of the Trust.
<PAGE>
12. "Investment Company Access Person" shall mean a trustee, officer
or advisory person, as defined in Rule 17j-1(e)(2), of the Trust other than an
Independent Trustee or an Adviser Access Person.
13. "Purchase" or "sale" of a security includes, among other things,
the writing of an option to purchase or sell a security.
14. "Security" shall have the same meanings as that set forth in
Section 2(a)(36) of the 1940 Act (generally, all securities) except that it
shall not include securities issued by the Government of the United States or an
agency or instrumentality thereof (including all short-term debt securities
which are "government securities" within the meaning of Section 2(a)(16) of the
1940 Act), bankers' acceptances, bank certificates of deposit, commercial paper
and shares of registered open-end investment companies.
15. "Trust" means the State Street Master Trust.
II. CODE PROVISIONS APPLICABLE TO ALL ACCESS PERSONS
No Access Person of the Trust, in connection with the purchase or sale,
directly or indirectly, by such Access Person of a Security held or to be
acquired by the Trust, shall:
1. employ any device, scheme or artifice to defraud the Trust;
2. make to the Trust any untrue statement of a material fact or
omit to state to the Trust a material fact necessary in order to make
the statements made, in light of the circumstances under which they are
made, not misleading;
3. engage in any act, practice, or course of business which
operates or would operate as a fraud or deceit upon the Trust; or
4. engage in any manipulative practice with respect to the Trust.
III. CODE PROVISIONS APPLICABLE ONLY TO ADVISER ACCESS PERSONS
1. CODE OF ETHICS. The provisions of the Adviser's Code of Ethics
are hereby adopted as the Code of Ethics of the Trust applicable to Adviser
Access Persons. A violation of the Adviser's Code of Ethics by any Adviser
Access Person shall also constitute a violation of this Code of Ethics.
2. REPORTS. Adviser Access Persons shall file the reports required
by the Adviser's Code of Ethics. Such filings shall be deemed to be filings with
the Trust under this Code of Ethics, and shall at all times be available to the
Trust.
3. REVIEW AND SANCTIONS. At periodic intervals established by the
Trustees of the Trust, but no less frequently than annually, the Compliance
Officer of the Adviser shall report to the Board of Trustees of the Trust all
material violations by Adviser Access Persons of the Adviser's Code of Ethics
during such period and the corrective action taken by the Adviser.
<PAGE>
IV. CODE PROVISIONS APPLICABLE ONLY TO INDEPENDENT TRUSTEES OF THE TRUST
1. PROHIBITED PURCHASES AND SALES. No Independent Trustee of the
Trust shall purchase or sell, directly or indirectly, any Security in which such
Independent Trustee has, or by reason of such transaction acquires, any direct
or indirect Beneficial Ownership and which to such Independent Trustee's actual
knowledge at the time of such purchase or sale:
(a) is being considered for purchase or sale by a Fund; or
(b) is being purchased or sold by a Fund.
2. EXEMPTED TRANSACTIONS. The prohibitions of Section IV.1 of this
Code shall not apply to:
(a) purchases or sales effected in any account over which
the Independent Trustee has no direct or indirect influence or
control;
(b) purchases or sales which are non-volitional on the part
of the Independent Trustee;
(c) purchases or sales which are part of an automatic
dividend reinvestment plan;
(d) purchases effected upon the exercise of rights issued
by an issuer PRO RATA to all holders of a class of its
securities, to the extent such rights were acquired from such
issuer, and sales of such rights so acquired;
(e) sales of securities held in a margin account to the
extent necessary in order to meet margin requirements;
(f) purchases or sales other than those exempted in (a)
through (e) above, (i) which will not cause the Independent
Trustee to gain improperly a personal profit as a result of
such Independent Trustee's relationship with the Trust, or
(ii) which are only remotely potentially harmful to a Fund
because the proposed transaction would be unlikely to affect
a highly institutional market, or (iii) which, because of the
circumstances of the proposed transaction, are not related
economically to the Securities purchased or sold or to be
purchased or sold by a Fund, and in each case which are
previously approved by the Compliance Officer of the Trust,
which approval shall be confirmed in writing.
3. REPORTING.
(a) Whether or not one of the exemptions listed in Section
IV.2 hereof applies, each Independent Trustee of the Trust
shall file with the Compliance Officer of the Trust a written
report containing the information described in Section IV.3(b)
of this Code with respect to each transaction in any Security
in which such Independent Trustee has, or by reason of such
transaction acquires, any direct or indirect Beneficial
Ownership, if such Independent Trustee, at the time the
transaction was entered into, actually knew, or in the
ordinary course of fulfilling official duties as a trustee of
the Trust should have known, that during the 15-day period
immediately preceding or after the date of that transaction:
<PAGE>
(i) such Security was or is to be purchased or sold
by a Fund, or
(ii) such Security was or is being considered for
purchase or sale by a Fund;
PROVIDED, HOWEVER, that such Independent Trustee shall not be
required to make a report with respect to any transaction
effected for any account over which such Independent Trustee
does not have any direct or indirect influence or control.
Each such report shall be deemed to be filed with the Trust
for purposes of this Code, and may contain a statement that
the report shall not be construed as an admission by the
Independent Trustee that such Independent Trustee has any
direct or indirect Beneficial Ownership in the Security to
which the report relates;
(b) Such report shall be made not later than 10 days after
the end of the calendar quarter in which the transaction to
which the report relates was effected, and shall contain the
following information:
(i) the date of the transaction, the title of and
the number of shares, and the principal amount of each
Security involved;
(ii) the nature of the transaction (I.E., purchase,
sale or any other type of acquisition or disposition);
(iii) the price at which the transaction was effected;
and
(iv) the name of the broker, dealer or bank with or
through whom the transaction was effected.
Any report concerning a purchase or sale prohibited under Section IV.1 hereof
with respect to which the Independent Trustee relies upon one of the exemptions
provided in Section IV.2 shall contain a brief statement of the exemption relied
upon and the circumstances of the transaction.
4. REVIEW. The Compliance Officer of the Trust shall review or
supervise the review of the personal securities transactions reported pursuant
to Section IV.3. As part of that review, each such reported securities
transaction shall be compared against completed and contemplated portfolio
transactions of the Trust to determine whether a violation of this Code may have
occurred. If the Compliance Officer of the Trust determines that a violation may
have occurred, the Compliance Officer of the Trust shall submit the pertinent
information regarding the transaction to the Trustees of the Trust. The Trustees
shall evaluate whether a material violation of this Code has occurred, taking
into account all the exemptions provided under Section IV.2. Before making any
determination that a violation has occurred, the Trustees shall give the person
involved an opportunity to supply additional information regarding the
transaction in question and shall consult with counsel for the Independent
Trustee whose transaction is in question.
5. SANCTIONS. If the Trustees of the Trust determine that a
material violation of this Code has occurred, the Trustees may take such action
and impose such sanctions as said Trustees deem appropriate.
<PAGE>
V. CODE PROVISIONS APPLICABLE ONLY TO INVESTMENT COMPANY ACCESS PERSON
1. PROHIBITED PURCHASES AND SALES. No Investment Company Access
Person shall purchase or sell, directly or indirectly, any Security in which
such Investment Company Access Person has, or by reason of such transaction
acquires, any direct or indirect Beneficial Ownership and which to such
Investment Company Access Person's actual knowledge as the time of such purchase
or sale:
(a) is being considered for purchase or sale by a Fund; or
(b) is being purchased or sold by a Fund.
2. EXEMPTED TRANSACTIONS. The prohibitions of Section V.1 of this
Code shall not apply to:
(a) purchases or sales effected in any account over which
the Investment Company Access Person has no direct or indirect
influence or control;
(b) purchases or sales which are non-volitional on the part
of the Investment Company Access Person;
(c) purchases or sales which are part of an automatic
dividend reinvestment plan;
(d) purchases effected upon the exercise of rights issued by
an issuer PRO RATA to all holders of a class of its
securities, to the extent such rights were acquired from such
issuer, and sales of such rights so acquired;
(e) sales of securities held in a margin account to the
extent necessary in order to meet margin requirements;
(f) purchases or sales other than those exempted in (a)
through (e) above, (i) which will not cause the Investment
Company Access Person to gain improperly a personal profit as
a result of such Investment Company Access Person's
relationship with the Trust, or (ii) which are only remotely
potentially harmful to a Fund because the proposed transaction
would be unlikely to affect a highly institutional market, or
(iii) which, because of the circumstances of the proposed
transaction, are not related economically to the Securities
purchased or sold or to be purchased or sold by a Fund, and in
each case which are previously approved by the Compliance
Officer of the Trust, which approval shall be confirmed in
writing.
3. REPORTING.
(a) Whether or not one of the exemptions listed in
Section V.2 hereof applies, each Investment Company Access
Person shall file with the Compliance Officer of the Trust a
written report containing the information described in Section
V.3(b) of this Code with respect to each transaction in any
Security in which such Investment Company Access Person has, or
by reason of such transaction acquires, any direct or indirect
Beneficial Ownership; PROVIDED, HOWEVER, that such Investment
Company Access Person shall not be required to make a report
with respect to any transaction effected for any account over
which such Investment Company Access Person does not have any
direct or indirect
<PAGE>
influence or control. Each such report shall be deemed to be
filed with the Trust for purposes of this Code, and may contain
a statement that the report shall not be construed as an
admission by the Investment Company Access Person has any direct
or indirect Beneficial Ownership in the Security to which the
report relates;
(b) Such report shall be made not later than 10 days after
the end of the calendar quarter in which the transaction to
which the report relates was effected, and shall contain the
following information:
(i) the date of the transaction, the title of and
the number of shares, and the principal amount of each
Security involved;
(ii) the nature of the transaction (I.E., purchase,
sale or any other type of acquisition or disposition);
(iii) the price at which the transaction was effected;
and
(iv) the name of the broker, dealer or bank with or
through whom the transaction was effected.
Any report concerning a purchase or sale prohibited under Section V.1 hereof
with respect to which the Investment Company Access Person relies upon one of
the exemptions provided in Section V.2 shall contain a brief statement of the
exemption relied upon and the circumstances of the transaction.
4. REVIEW. The Compliance Officer of the Trust shall review or
supervise the review of the personal securities transactions reported pursuant
to Section V.3. As part of that review, each such reported securities
transaction shall be compared against completed and contemplated portfolio
transactions of the Trust to determine whether a violation of this Code may have
occurred. If the Compliance Officer of the Trust determines that a violation may
have occurred, the Compliance Officer of the Trust shall submit the pertinent
information regarding the transaction to the Trustees of the Trust. The Trustees
shall evaluate whether a material violation of this Code has occurred, taking
into account all the exemptions provided under Section V.2. Before making any
determination that a violation has occurred, the Trustees shall give the person
involved an opportunity to supply additional information regarding the
transaction in question and shall consult with counsel for the Investment
Company Access Person whose transaction is in question.
5. SANCTIONS. If the Trustees of the Trust determine that a
material violation of this Code has occurred, the Trustees may take such action
and impose such sanctions as said Trustees deem appropriate.
VI. MISCELLANEOUS PROVISIONS
1. AMENDMENT OR REVISION OF ADVISER'S CODE OF ETHICS. Any amendment
or revision of the Adviser's Code of Ethics shall be deemed to be an amendment
or revision of Section III.1 of this Code, and such amendment or revision shall
be promptly furnished to the Independent Trustees of the Trust.
<PAGE>
2. RECORDS. The Trust shall maintain records in the manner and to
the extent set forth below, which records may be maintained on microfilm under
the conditions described in Rule 31a-2(f)(1) under the 1940 Act and shall be
available for examination by representatives of the Securities and Exchange
Commission:
(a) A copy of this Code and any other code which is, or at
any time within the past five years has been, in effect shall
be preserved in an easily accessible place;
(b) A record of any violation of this Code and of any action
taken as a result of such violation shall be preserved in an
easily accessible place for a period of not less than five
years following the end of the fiscal year in which the
violation occurs;
(c) A copy of each report made pursuant to this Code shall
be preserved for a period of not less than five years from the
end of the fiscal year in which its is made, the first two
years in an easily accessible place; and
(d) A list of persons who are, or within the past five years
have been, required to make reports pursuant to this Code
shall be maintained in an easily accessible place.
3. CONFIDENTIALITY. All reports of securities transactions and any
other information filed with the Trust or furnished to any person pursuant to
this Code shall be treated as confidential, but are subject to review as
provided herein and by representatives of the Securities and Exchange
Commission.
4. INTERPRETATION OF PROVISIONS. The Trustees of the Trust may from
time to time adopt such interpretation of this Code as they deem appropriate.
5. EFFECT OF VIOLATION OF THIS CODE. In adopting Rule 17j-1, the
Securities and Exchange Commission specifically noted in Investment Company Act
Release No. 11421 that a violation of any provision of a particular code of
ethics, such as this Code, would not be considered a PER SE unlawful act
prohibited by the general anti-fraud provisions of the Rule. In adopting this
Code of Ethics, it is not intended that a violation of this Code is or should be
considered to be a violation of Rule 17j-1.
Adopted: [ ]
