As filed with the Securities and Exchange Commission
on February 27, 1998
Securities Act of 1933 Registration No. 33-55024
Investment Company Act of 1940 File No. 811-985
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. ___ [ ]
Post-Effective Amendment No. 6 [X]
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No. 23 [X]
STATE STREET RESEARCH GROWTH TRUST
(Exact Name of Registrant as Specified in Charter)
One Financial Center, Boston, Massachusetts 02111
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (617) 357-1200
Francis J. McNamara, III
Executive Vice President, Secretary & General Counsel
State Street Research & Management Company
One Financial Center
Boston, Massachusetts 02111
(Name and Address of Agent for Service)
Thomas J. Kelly, Esq.
Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
One Financial Center
Boston, Massachusetts 02111
It is proposed that this filing will become effective under Rule 485:
[ ] Immediately upon filing pursuant to paragraph (b),
[ ] On May 1, 1997 pursuant to paragraph (b),
[ ] 60 days after filing pursuant to paragraph (a)(1)
[X] On May 1, 1998 pursuant to paragraph (a)(1).
[ ] 75 days after filing pursuant to paragraph (a)(2).
[ ] On_________pursuant to paragraph (a)(2).
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
<PAGE>
CROSS REFERENCE SHEET
Pursuant to Rule 481 (a)
Part A
CAPTION OR LOCATION IN
FORM N-1A ITEM NO. PROSPECTUS
1. Cover Page................... Same
2. Synopsis..................... Investor Expenses
3. Condensed Financial
Information.................. Financial Highlights; Performance and
Volatility
4. General Description of
Registrant................... Goal and Strategy; Other Securities and
Risks; Your Account; Fund Details
5. Management of the Fund....... Fund Details
5A. Management's Discussion
of Fund Performance.......... [To be included in Financial Statements]
6. Capital Stock and Other
Securities................... Your Account; Fund Details
7. Purchase of Securities
Being Offered................ Your Account
8. Redemption or Repurchase..... Your Account
9. Legal Proceedings............ Not Applicable
( i )
<PAGE>
Part B
CAPTION OR LOCATION IN STATEMENT
FORM N-1A ITEM NO. OF ADDITIONAL INFORMATION
10. Cover Page................... Same
11. Table of Contents............ Same
12. General Information.......... Not Applicable
and History
13. Investment Objectives
and Policies................. Investment Objective; Additional Investment
Policies and Restrictions; Additional
Information Concerning Certain Investment
Techniques; Debt Instruments and Permitted
Cash Investments; Portfolio Transactions
14. Management of the
Registrant................... Trustees and Officers
15. Control Persons and
Principal Holders of
Securities................... Trustees and Officers
16. Investment Advisory
and Other Services........... Investment Advisory Services;
Custodian; Independent Accountants;
Distribution of Shares of the Fund
17. Brokerage Allocation......... Portfolio Transactions
18. Capital Stock and
Other Securities............. The Trust, the Fund and its Shares
19. Purchase, Redemption and
Pricing of Securities
Being Offered................ Purchase and Redemption of Shares;
Shareholder Accounts; Net Asset Value
( ii )
<PAGE>
CAPTION OR LOCATION IN STATEMENT
FORM N-1A ITEM NO. OF ADDITIONAL INFORMATION
20. Tax Status................... Certain Tax Matters
21. Underwriters................. Distribution of Shares of the Fund
22. Calculation of
Performance Data............. Calculation of Performance Data
23. Financial Statements......... Financial Statements
( iii )
<PAGE>
20 Feb 98 Mechanical
[STATE STREET RESEARCH LOGO]
Growth Fund
[GRAPHIC OF TALL BUILDING]
This prospectus has information you should know before you invest. Please read
it carefully and keep it with your investment records.
Although these securities have been registered with the Securities and Exchange
Commission, the commission has not judged them for investment merit and does not
guarantee the accuracy or adequacy of the information in this prospectus. Anyone
who informs you otherwise is committing a federal crime.
A stock fund investing for long-term growth of capital.
Prospectus
May 1, 1998
<PAGE>
Who May Want to Invest
- -------------------------------------------------------------------------------
State Street Research Growth Fund is designed for investors who seek one or more
of the following:
[bullet] a stock fund for a long-term goal
[bullet] a fund to complement a portfolio of more conservative investments
[bullet] a fund that uses a growth-oriented strategy
The fund is NOT appropriate for investors who:
[bullet] want to avoid high volatility or possible losses
[bullet] are making short-term investments
[bullet] are investing emergency reserve money
[bullet] are seeking regular income
The fund's shares will rise and fall in value. There is a risk that you could
lose money by investing in the fund.
The fund cannot be certain that it will achieve its goal.
Fund shares are not bank deposits and are not guaranteed, endorsed or insured by
any financial institution, government entity or the FDIC.
<PAGE>
Contents 1
- --------------------------------------------------------------------------------
2 The Fund
--------
The fund's goal and strategy, main
risks, expenses and performance,
plus financial highlights
12 Your Account
------------
Managing your State Street Research investments
12 Opening an Account
12 Choosing a Share Class
14 Sales Charges
16 Policies for Buying Shares
18 Policies for Selling Shares
20 Account Policies
21 Distributions and Taxes
23 Investor Services
24 Fund Details
------------
The fund's business structure
and dealer compensation, plus
additional policies
26 Other Securities and Risks
--------------------------
Information on additional
portfolio securities and
practices, and the risks
associated with them
Back Cover For Additional Information
<PAGE>
2 The Fund
- --------------------------------------------------------------------------------
[Graphic of Horse's Head] Goal and Strategy
Fundamental Goal The fund seeks to provide long-term growth of capital.
Strategy Under normal market conditions, the fund invests at least 65% of total
assets in stocks and convertible securities that have long-term growth
potential.
In selecting stocks, the fund first attempts to identify the industries that
over the long term will grow faster than the economy as a whole. It then looks
for companies within those industries that appear most capable of sustained
growth. While the fund tends to emphasize established companies, from time to
time it may emphasize other sizes or types of companies, including small,
emerging growth companies. Current income is not a significant factor in stock
selection.
The fund reserves the right to invest up to 35% of net assets in other
securities. These may include U.S. government securities, as well as corporate
bonds rated investment-grade at the time of purchase and their unrated
equivalents.
The fund may adjust the composition of its portfolio as market conditions and
economic outlooks change. For more information about the fund's investments and
practices, see page 26.
<PAGE>
3
------------
[Graphic of Arrow] Portfolio Risks
Because the fund invests primarily in stocks, its major risks are those of stock
investing, including sudden, unpredictable drops in value and the potential for
periods of lackluster performance.
As a general rule, growth stocks often are more sensitive to market movements
than other types of stocks, because their market prices tend to reflect future
expectations. At times when it appears these expectations may not be met, growth
stock prices typically fall.
In addition, there are particular risks associated with investing in companies
of a given size. Larger, more established companies are generally not nimble and
may be unable to respond quickly to competitive challenges, such as changes in
technology and consumer tastes. Smaller companies may be particularly sensitive
to market movements. Stocks of these companies may be thinly traded and the
companies may be less able to withstand hard times.
Because of these and other risks, the fund may underperform certain other stock
funds (those emphasizing value stocks, for example) during periods when growth
stocks are out of favor. The success of the fund's investment strategy depends
largely on the portfolio manager's skill in assessing the potential of the
stocks the fund buys.
[Graphic of Magnifying Glass] Growth Investing
A fund that uses a growth-oriented strategy seeks to invest in stocks of
companies that are growing faster than the economy as a whole. Often, these
companies are in expanding industries, such as computers and pharmaceuticals.
While the size of a company is not necessarily a factor in determining whether
its stock is suitable for a growth fund, a growth strategy that focuses on
larger companies is generally considered less aggressive than one that focuses
on smaller companies.
Many stocks owned by growth funds do not pay dividends and can be more volatile
than other types of investments. As a result, growth funds are appropriate for
investors who have long-term investment horizons.
<PAGE>
4 The Fund continued
- -------------------------------------------------------------------------------
The fund's management approach, which may include short-term trading, could
cause the fund's portfolio turnover rate to be above average for a stock fund.
High turnover will increase the fund's transaction costs and may increase your
tax liability.
Information on other securities and risks appears on page 26.
A "snapshot" of the fund's investments may be found in the current annual or
semiannual report (see back cover).
[Graphic of Thinking Man] Investment Management
The fund's investment manager is State Street Research & Management Company. The
firm traces its heritage back to 1924 and the founding of one of America's first
mutual funds. Today the firm has more than $___ billion in assets under
management (as of ____________), including more than $____ billion in mutual
funds.
Kennard Woodworth, Jr. has been responsible for the fund's day-to-day portfolio
management since August 1997. A senior vice president, he joined the firm in
1986 and has worked as an investment professional since 1961.
<PAGE>
Investor Expenses 5
- --------------------------------------------------------------------------------
Shareholder fees are paid directly by investors.
Annual fund expenses are deducted from fund assets.
Example Here is what you would pay if you invested $1,000 over the years
indicated. The example is for comparison only and does not represent the fund's
actual expenses, either past or future(5).
(1) Not charged on reinvestments or exchanges.
(2) Before November 1, 1997, Class C shares were designated Class D and Class S
shares were designated Class C.
(3) Except for investments of $1 million or more; see page 14.
<TABLE>
<CAPTION>
Class descriptions begin on page 12
-----------------------------------------------
Shareholder Fees (% of offering price)(1) Class A Class B Class C(2) Class S(2)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Maximum front-end sales charge 4.50 0.00 0.00 0.00
Maximum deferred sales charge 0.00(3) 5.00 1.00 0.00
Annual Fund Expenses (% of average net assets) Class A Class B Class C(2) Class S(2)
- --------------------------------------------------------------------------------------------------
Management fee 0.475 0.475 0.475 0.475
Marketing/service (12b-1) fees(4) 0.250 1.000 1.000 0.000
Other expenses 0.205 0.205 0.205 0.205
----- ------ ----- ------
Total annual fund expenses 0.930 1.680 1.680 0.680
===== ===== ===== =====
Year Class A Class B(6) Class C(6) Class S
- --------------------------------------------------------------------------------------------------
1 $54 $67/$17 $27/$17 $7
3 $73 $83/$53 $53/$53 $22
5 $94 $111/$91 $91/$91 $38
10 $154 $179/$179 $199/$199 $85
</TABLE>
(4) For share classes that have marketing/service (12b-1) fees, long-term
shareholders may pay more than the equivalent of the regulatory maximum
sales charge.
(5) Example assumes dividend reinvestment, hypothetical 5% annual return,
maximum applicable sales charges and conversion of Class B shares to Class A
after eight years.
(6) The first number assumes you sold all your shares at the end of the period,
the second assumes you stayed in the fund.
<PAGE>
6 Financial Highlights
- --------------------------------------------------------------------------------
The information in these tables has been audited by Coopers & Lybrand L.L.P.,
the fund's independent accountants. The top section of each table shows
information for a single share of the fund. Total return figures assume
reinvestment of all distributions.
<TABLE>
<CAPTION>
Years ended December 31
----------------------------------------------------------
Class A 1993(1) 1994 1995(2) 1996(2) 1997(2)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ($) 9.63 8.50 7.09 7.02 7.17
---- ---- ---- ---- ----
Net investment income (loss) ($) 0.06 0.05 0.01 (0.03) (0.00)
Net realized and unrealized
gain (loss) on investments ($) 0.37 (0.38) 2.30 0.93 0.68
---- ---- ---- ---- ----
Total from investment operations ($) 0.43 (0.33) 2.31 0.90 0.68
---- ---- ---- ---- ----
Dividends from net investment income ($) (0.08) (0.05) (0.02) -- --
Distributions from capital gains ($) (1.48) (1.03) (2.36) (0.75) (0.78)
---- ---- ---- ---- ----
Total distributions ($) (1.56) (1.08) (2.38) (0.75) (0.78)
---- ---- ---- ---- ----
Net asset value, end of year ($) 8.50 7.09 7.02 7.17 7.07
==== ==== ==== ==== ====
Total return (%)(3) 4.52(4) (3.83) 32.57 12.65 10.14
Ratios/supplemental data:
Net assets at end of year ($ thousands) 602 719 2,379 15,181 16,470
Expense ratio (%) 0.96(5) 0.90 0.89 0.90 0.93
Ratio of net investment income (loss)
to average net assets (%) 0.48(5) 0.54 0.12 (0.34) (0.05)
Portfolio turnover rate (%) 68.36 57.18 234.43 237.85 258.99
Average commission rate ($)(6) n/a n/a n/a 0.0331 0.0383
</TABLE>
<PAGE>
7
--------
<TABLE>
<CAPTION>
Years ended December 31
---------------------------------------------------------------------
Class B 1993(1) 1994 1995(2) 1996(2) 1997(2)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ($) 9.56 8.46 7.02 6.89 6.96
---- ----- ----- ----- -----
Net investment income (loss) ($) 0.03 (0.00) (0.06) (0.08) (0.06)
Net realized and unrealized
gain (loss) on investments ($) 0.42 (0.41) 2.29 0.90 0.67
---- ----- ----- ----- -----
Total from investment operations ($) 0.45 (0.41) 2.23 0.82 0.61
---- ----- ----- ----- -----
Dividends from net investment income ($) (0.07) -- -- -- --
Distributions from capital gains ($) (1.48) (1.03) (2.36) (0.75) (0.78)
---- ----- ----- ----- -----
Total distributions ($) (1.55) (1.03) (2.36) (0.75) (0.78)
---- ----- ----- ----- -----
Net asset value, end of year ($) 8.46 7.02 6.89 6.96 6.79
==== ===== ===== ===== ====
Total return (%)(3) 4.64(4) (4.80) 31.71 11.73 9.44
Ratios/supplemental data:
Net assets at end of year ($ thousands) 986 1,544 10,684 31,119 36,442
Expense ratio (%) 1.71(5) 1.63 1.63 1.65 1.68
Ratio of net investment loss
to average net assets (%) (0.36)(5) (0.20) (0.69) (1.07) (0.82)
Portfolio turnover rate (%) 68.36 57.18 234.43 237.85 258.99
Average commission rate ($)(6) n/a n/a n/a 0.0331 0.0383
</TABLE>
(1) Commencement of share class designations (March 16, 1993 for Class A and
March 18, 1993 for Class B) to December 31, 1993.
(2) Per-share figures have been calculated using the average shares method.
(3) Does not reflect any front-end or contingent deferred sales charges.
(4) Not annualized.
(5) Annualized.
(6) Average commission rate per share paid by the fund for security trades on
which commissions are charged beginning with the fiscal year ended December
31, 1996.
<PAGE>
8 Financial Highlights continued
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Years ended December 31
----------------------------------------------------------------------
Class C (formerly Class D) 1993(1) 1994 1995(2) 1996(2) 1997(2)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ($) 9.56 8.45 7.02 6.88 6.95
---- ---- ---- ---- ----
Net investment income (loss) ($) 0.03 (0.00) (0.06) (0.08) (0.06)
Net realized and unrealized
gain (loss) on investments ($) 0.41 (0.40) 2.28 0.90 0.67
---- ---- ---- ---- ----
Total from investment operations ($) 0.44 (0.40) 2.22 0.82 0.61
---- ---- ---- ---- ----
Dividends from net investment income ($) (0.07) -- -- -- --
Distributions from capital gains ($) (1.48) (1.03) (2.36) (0.75) (0.78)
---- ---- ---- ---- ----
Total distributions ($) (1.55) (1.03) (2.36) (0.75) (0.78)
---- ---- ---- ---- ----
Net asset value, end of year ($) 8.45 7.02 6.88 6.95 6.78
==== ==== ==== ==== ====
Total return (%)(3) 4.59(4) (4.68) 31.57 11.89 9.30
Ratios/supplemental data:
Net assets at end of year ($ thousands) 242 384 2,117 5,584 4,562
Expense ratio (%) 1.71(5) 1.63 1.63 1.65 1.68
Ratio of net investment loss
to average net assets (%) (0.34)(5) (0.20) (0.67) (1.07) (0.79)
Portfolio turnover rate (%) 68.36 57.18 234.43 237.85 258.99
Average commission rate ($)(6) n/a n/a n/a 0.0331 0.0383
</TABLE>
<PAGE>
9
---------
<TABLE>
<CAPTION>
Years ended December 31
------------------------------------------------------------------------------------------------
Class S (formerly Class C) 1988 1989 1990 1991 1992 1993 1994 1995(2) 1996(2) 1997(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
year ($) 6.05 6.23 8.23 7.44 9.14 9.26 8.51 7.08 7.02 7.18
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Net investment income (loss) ($) 0.23 0.20 0.20 0.17 0.14 0.09 0.07 0.04 (0.00) 0.01
Net realized and unrealized
gain (loss) on investments ($)* 0.18 2.14 (0.78) 1.71 0.15 0.74 (0.40) 2.29 0.92 0.70
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Total from investment operations ($) 0.41 2.34 (0.58) 1.88 0.29 0.83 (0.33) 2.33 0.92 0.71
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Dividends from net investment
income ($) (0.23) (0.20) (0.21) (0.18) (0.14) (0.10) (0.07) (0.03) (0.01) --
Distributions from capital
gains ($) -- (0.14) -- -- (0.03) (1.48) (1.03) (2.36) (0.75) (0.78)
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Total distributions ($) (0.23) (0.34) (0.21) (0.18) (0.17) (1.58) (1.10) (2.39) (0.76) (0.78)
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Net asset value, end of year ($) 6.23 8.23 7.44 9.14 9.26 8.51 7.08 7.02 7.18 7.11
==== ==== ==== ==== ==== ==== ==== ==== ==== ====
Total return (%)(3) 9.27 39.83 (6.16) 26.77 5.71 8.94 (3.82) 33.02 12.74 10.54
Ratios/supplemental data:
Net assets at end of year
($ thousands) 228,071 284,940 234,338 273,607 263,781 250,786 186,108 186,689 177,147 164,689
Expense ratio (%) 0.60 0.56 0.55 0.56 0.57 0.66 0.64 0.64 0.65 0.68
Ratio of net investment income
(loss) to average net assets (%) 3.55 2.60 2.42 2.02 1.56 0.92 0.78 0.43 (0.06) 0.19
Portfolio turnover rate (%) 42.18 28.48 16.09 31.89 35.60 68.36 57.18 234.43 237.85 258.99
Average commission rate ($)(6) n/a n/a n/a n/a n/a n/a n/a n/a 0.0331 0.0383
*Net of federal taxes paid
on retained capital gains 0.15 0.13 0.08 0.12 0.22 -- -- -- -- --
</TABLE>
(1) Commencement of share class designations (March 18, 1993) to December 31,
1993.
(2) Per-share figures have been calculated using the average shares method.
(3) Does not reflect any front-end or contingent deferred sales charges.
(4) Not annualized.
(5) Annualized.
(6) Average commission rate per share paid by the fund for security trades on
which commissions are charged beginning with the fiscal year ended December
31, 1996.
<PAGE>
10 Performance and Volatility
- -------------------------------------------------------------------------------
As of December 31, 1997
--------------------------------------
Average Annual Total Return(1) 1 Year 5 Years 10 Years
- -------------------------------------------------------------------------------
Class A (%) 5.18 10.42 12.17
Class B (%) 4.56 10.42 12.27
Class C (%) 8.32 10.61 12.27
Class S (%) 10.54 11.67 12.81
Russell 1000 Growth Index (%) 30.49 18.42 17.94
S&P 500 Index (%) 33.35 20.25 18.02
Lipper Growth Funds Index (%) 28.08 17.08 16.08
<TABLE>
<CAPTION>
Years ended December 31
-------------------------------------------------------------------------------------
Class A Year-by-Year Total Return(1) 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(10%) 9.27 39.83 (6.16) 26.77 5.71 8.68 (3.83) 32.57 12.65 10.14
0%
10%
20%
40%
30%
</TABLE>
(1) Fund returns include performance from before the creation of share classes
in 1993. Because Classes A, B and C involve higher marketing/service (12b-1)
fees (as described on page 5), performance since that time is somewhat lower
for these classes.
<PAGE>
11
---------
[Graphic of Understanding
magnifying Performance
glass] and Volatility
The information on the opposite page is designed to show two aspects of the
fund's track record:
[bullet] Average annual total return is a measure of the fund's performance over
time. It is determined by taking the fund's performance over a given
period and expressing it as an average annual rate. Average annual
total return includes the effects of fund expenses and maximum sales
charges for each class, and assumes that you sold your shares at the
end of the period.
[bullet] The graph of the year-by-year returns shows how volatile the fund has
been: how much the difference has been, historically, between its best
years and worst years. In general, funds with higher average annual
total returns will also have higher volatility. The graph includes the
effects of fund expenses, but not sales charges.
Also included are three independent measures of performance. Two are unmanaged
stock indices: the S&P 500 (officially, the "Standard & Poor's 500 Composite
Stock Price Index"), which includes 500 domestic stocks, and the Russell 1000
Growth Index, which contains only those stocks within the complete Russell 1000
Index (a large company index) that show above-average growth. The Lipper Growth
Funds Index shows the performance of a category of mutual funds with similar
goals. This index, which is unmanaged, shows you how well the fund has done
compared to competing funds.
While the fund does not seek to match the returns or the volatility of any
index, these indices can be used as rough guides when gauging the return of this
and other investments. When making comparisons, keep in mind that none of the
indices includes the effect of sales charges. Also, even if your stock portfolio
were identical to the S&P 500 or the Russell 1000 Growth, your returns would
always be lower, because these indices don't include brokerage and
administrative expenses.
<PAGE>
12 Your Account
- --------------------------------------------------------------------------------
[Graphic of a Key] Opening an Account
If you are opening an account through a financial professional, he or she can
assist you with all phases of your investment.
If you are investing through a large retirement plan or other special program,
follow the instructions in your program materials.
To open an account without the help of a financial professional, please use the
instructions on these pages.
[Graphic of a checklist] Choosing a Share Class
The fund offers four share classes, each with its own sales charge and expense
structure.
If you are investing a substantial amount and plan to hold your shares for a
long period, Class A shares may make the most sense for you. If you are
investing a lesser amount, you
Class A -- Front Load
[bullet] Initial sales charge of 4.5% or less; schedule on page 14
[bullet] Lower sales charges for larger investments; see sidebar on facing page
and sales charge schedule
[bullet] Lower annual expenses than Class B or C shares due to lower
marketing/service (12b-1) fee of 0.25%
Class B -- Back Load
[bullet] No initial sales charge
[bullet] Deferred sales charge of 5% or less on shares you sell within five
years; schedule on page 14
[bullet] Annual marketing/service (12b-1) fee
[bullet] Automatic conversion to Class A shares after eight years, reducing
future annual expenses
Class C(1) -- Level Load
[bullet] No initial sales charge
[bullet] Deferred sales charge of 1%, paid if you sell shares within one year of
purchase
[bullet] Lower deferred sales charge than Class B shares
[bullet] Annual marketing/service (12b-1) fee
[bullet] No conversion to Class A shares after eight years, so annual expenses
do not decrease
(1) Before November 1, 1997, these were designated
Class D.
<PAGE>
13
-----------
may want to consider Class B shares (if investing for at least five years) or
Class C shares (if investing for less than five years). If you are investing
through a special program, such as a large employer-sponsored retirement plan or
certain programs available through brokers, you may be eligible to purchase
Class S shares.
Because all future investments in your account will be made in the share class
you designate when opening the account, you should make your decision carefully.
Your financial professional can help you choose the share class that makes the
most sense for you.
[Graphic of magnifying glass]
Class A Sales
Charge Reductions
and Waivers
[bullet] Substantial investments receive lower sales charge rates; see
information on the following page.
[bullet] The "right of accumulation" allows you to include your existing State
Street Research investments (except Money Market Fund Class E shares)
as part of your current investment for sales charge purposes.
[bullet] A "letter of intent" allows you to count all investments in this or
other State Street Research funds over the next 13 months as if you
were making them all at once, for purposes of calculating sales
charges.
To take advantage of right of accumulation or letter of intent waivers, consult
your financial professional or State Street Research.
Class S(2) -- No Load
[bullet] No sales charges of any kind
[bullet] No marketing/service (12b-1) fees; annual expenses are lower than other
share classes
[bullet] Available through certain retirement accounts, advisory accounts of the
investment manager and special programs, including broker programs with
recordkeeping and other services; these programs usually involve
special conditions and separate fees (contact your financial
professional for information).
(2) Before November 1, 1997, these were designated Class C.
<PAGE>
14 Your Account continued
- --------------------------------------------------------------------------------
Sales Charges
Class A -- Front Load
when you invest this % is which equals
this amount deducted this % of
for sales your net
charges investment
- ---------------------------------------------------------------
Up to $99,999 4.50 4.71
$100,000 - $249,999 3.50 3.63
$250,000 - $499,999 2.50 2.56
$500,000 - $999,999 2.00 2.04
$1 million or more see next column
With Class A shares, you pay a sales charge only when you buy shares.
If you are investing $1 million or more (either as a lump sum or through any of
the methods described on the previous page), you can purchase Class A shares
without any sales charge. However, you may be charged a "contingent deferred
sales charge" (CDSC) if you sell any shares you have held for less than one
year. Policies regarding the calculation of the CDSC are the same as for Class
B.
Class A shares are also offered with low or no sales charges through various
wrap-fee programs and other sponsored arrangements (contact your financial
professional for information).
Class B -- Back Load
this % of net asset value
when you sell shares at the time of purchase (or
in this year after you of sale, if lower) is deduct-
bought them ed from your proceeds
- -------------------------------------------------------------
First year 5.00
Second year 4.00
Third year 3.00
Fourth year 3.00
Fifth year 2.00
Sixth year or later None
With Class B shares, you pay no sales charge when you invest, but you are
charged a "contingent deferred sales charge" (CDSC) when you sell shares you
have held for five years or less, as described in the table above. Any shares
acquired through reinvestment are not subject to the CDSC. There is no CDSC on
exchanges into other State Street Research funds, and the
<PAGE>
15
--------
date of your initial investment will continue to be used as the basis for CDSC
calculations when you exchange. To ensure that you pay the lowest CDSC possible,
the fund will always use the shares with the lowest CDSC to fill your sell
requests.
The CDSC is waived on shares sold for mandatory retirement distributions or
because of disability or death. Consult your financial professional or the State
Street Research Service Center.
Class B shares automatically convert to Class A shares after eight years,
lowering your annual expenses from that time on.
Class C (Formerly Class D) -- Level Load
this % of net asset value
when you sell shares at the time of purchase (or
in this year after you of sale, if lower) is deduct-
bought them ed from your proceeds
- -------------------------------------------------------------
First year 1.00
Second year or later None
With Class C shares, you pay no sales charge when you invest, but you are
charged a "contingent deferred sales charge" (CDSC) when you sell shares you
have held for one year or less, as described in the table above. Policies
regarding the calculation of the CDSC are the same as for Class B.
Class C shares currently have the same annual expenses as Class B shares, but
never convert to Class A shares (with their lower annual expenses).
Class S (Formerly Class C) -- No Load
Class S shares have no sales charges or CDSC.
<PAGE>
16 Your Account continued
- --------------------------------------------------------------------------------
[Graphic of Cash Register]
Policies for
Buying Shares
Once you have chosen a share class, the next step is to determine the amount you
want to invest.
Minimum Initial Investments:
[bullet] $1,000 for accounts that use the Investamatic program
[bullet] $2,000 for Individual Retirement Accounts
[bullet] $2,500 for all other accounts
Minimum Additional Investments:
[bullet] $50 for any account
Complete the enclosed application. You can avoid future inconvenience by signing
up now for any services you might later use.
Timing of Requests All requests received by State Street Research before 4:00
p.m. eastern time will be executed the same day, at that day's closing share
price. Orders received after 4:00 p.m. will be executed the following day, at
that day's closing share price.
Wire Transactions Funds may be wired between 8:00 a.m. and 4:00 p.m. eastern
time. To make a same-day wire investment, please notify State Street Research by
12:00 noon of your intention to wire funds, and make sure your wire arrives by
4:00 p.m. Your bank may charge a fee for wiring money.
<PAGE>
Buying Shares 17
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
[Graphic of Briefcase] To Open an Account To Add to an Account
Through a Contact your financial professional. Contact your financial professional.
Financial
Professional
By Mail Make your check payable to "State Street Fill out the investment stub from an
[Graphic of Mailbox] Research Funds." Forward the check and account statement, or indicate the fund
your application to State Street name and account number on your check.
Research. Make your check payable to "State Street
Research Funds." Forward the check and
stub to State Street Research.
[Graphic of Building] Forward your application to State Street Call State Street Research to obtain a
Research, then call to obtain an account control number. Instruct your bank to
By Federal number. Wire funds using the wire funds to:
Funds Wire instructions at right. [bullet] State Street Bank and Trust Company, Boston, MA
[bullet] ABA: 011000028
[bullet] BNF: fund name and share class you want to buy
[bullet] AC: 99029761
[bullet] OBI: your name and your account number
[bullet] Control: the number given to you
by State Street Research
[Graphic of Plug] Verify that your bank is a member of the Call State Street Research to verify
ACH (Automated Clearing House) system. that the necessary bank information is
By Electronic Forward your application to State Street on file for your account. If it is, you
Funds Transfer Research. Please be sure to include the may request a transfer with the same
(ACH) appropriate bank information. Call State phone call. If not, please ask State
Street Research to request a purchase. Street Research to provide you with an
EZ Trader application.
[Graphic of an Forward your application, with all Call State Street Research to verify
application] appropriate sections completed, to State that Investamatic is in place on your
By Investamatic Street Research, along with a check for account, or to request a form to add it.
your initial investment payable to Investments are automatic once
"State Street Research Funds." Investamatic is in place.
By Exchange Call State Street Research or visit our Call State Street Research or visit our
[Graphic of Arrows] Web site. Web site.
State Street Research Service Center PO Box 8408, Boston, MA 02266-8408 Internet www.ssrfunds.com
Call toll-free: 1-800-562-0032 (business days 8:00 a.m. - 6:00 p.m., eastern time)
</TABLE>
<PAGE>
18 Your Account continued
- --------------------------------------------------------------------------------
[Graphic of Adding Machine]
Policies for
Selling Shares
Circumstances that Require Written Requests Please submit instructions in
writing when any of the following apply:
[bullet] you are selling more than $100,000 worth of shares
[bullet] the name or address on the account has changed within the last 30 days
[bullet] you want the proceeds to go to a name or address not on the account
registration
[bullet] you are transferring shares to an account with a different registration
or share class
[bullet] you are selling shares held in a corporate or fiduciary account; for
these accounts, additional documents are required:
corporate accounts: certified copy of a corporate resolution
fiduciary accounts: copy of power of attorney or other governing
document
To protect your account against fraud, all signatures on these documents must be
guaranteed. You may obtain a signature guarantee at most banks and securities
dealers. A notary public cannot provide a signature guarantee.
Incomplete Sell Requests State Street Research will attempt to notify you
promptly if any information necessary to process your request is missing.
Timing of Requests All requests received in good order by State Street Research
before 4:00 p.m. eastern time will be executed the same day, at that day's
closing share price. Requests received after 4:00 p.m. will be executed the
following day, at that day's closing share price.
Wire Transactions Proceeds sent by federal funds wire must total at least
$5,000. A fee of $7.50 will be deducted from all proceeds sent by wire, and your
bank may charge an additional fee to receive wired funds.
Selling Recently Purchased Shares If you sell shares before the check or
electronic funds transfer (ACH) for those shares has been collected, you will
not receive the proceeds until your initial payment has cleared. This may take
up to 15 days after your purchase was recorded (in rare cases, longer). If you
open an account with shares purchased by wire, you cannot sell those shares
until your application has been processed.
<PAGE>
Selling Shares 19
- --------------------------------------------------------------------------------
To Sell Some or All of Your Shares
[Graphic of Briefcase]
Contact your financial professional.
Through a
Financial
Professional
By Mail Send a letter of instruction, an endorsed stock
[Graphic of Mailbox] power or share certificates (if you hold
certificate shares) to State Street Research.
Specify the fund, the account number and the
dollar value or number of shares. Be sure to
include all necessary signatures and any
additional documents, as well as signature
guarantees if required (see facing page).
[Graphic of Building] Check with State Street Research to make sure that
By Federal a wire redemption privilege, including a bank
Funds Wire designation, is in place on your account. Once
this is established, you may place your request to
sell shares with State Street Research. Proceeds
will be wired to your pre-designated bank account.
(See "Wire Transactions" on facing page.)
[Graphic of Plug] Check with State Street Research to make sure
By Electronic that the EZ Trader feature, including a bank
Funds Transfer designation, is in place on your account. Once
(ACH) this is established, you may place your request to
sell shares with State Street Research. Proceeds
will be sent to your pre-designated bank account.
[Graphic of Phone] As long as the transaction does not require a
By Telephone written request (see facing page), you or your
financial professional can sell shares by calling
State Street Research. A check will be mailed to
you on the following business day.
By Exchange Read the prospectus for the fund into which you
[Graphic of Arrows] are exchanging. Call State Street Research or
visit our Web site.
[Graphic of Pad] See plan information on page 23.
By Systematic
Withdrawal Plan
State Street Research Service Center PO Box 8408, Boston, MA 02266-8408
Internet www.ssrfunds.com
Call toll-free: 1-800-562-0032 (business days 8:00 a.m. - 6:00 p.m., eastern
time)
<PAGE>
20 Your Account continued
- --------------------------------------------------------------------------------
[Graphic of papers] Account Policies
The Fund's Business Hours The fund is open the same days as the New York Stock
Exchange (generally Monday through Friday). Fund representatives are available
from 8:00 a.m. to 6:00 p.m. eastern time on these days.
Calculating Share Price The fund calculates its net asset value per share (NAV)
every business day at the close of regular trading on the New York Stock
Exchange (usually at 4:00 p.m. eastern time). Each class's share price is
calculated by dividing its net assets by the number of its shares outstanding.
Telephone Requests When you open an account you automatically receive telephone
privileges, allowing you to place requests on your account by telephone. Your
financial professional can also use these privileges to request exchanges on
your account and, with your written permission, redemptions. For your
protection, all telephone calls are recorded.
As long as State Street Research takes certain measures to authenticate
telephone requests on your account, you may be held responsible for unauthorized
requests. Unauthorized telephone requests are rare, but if you want to protect
yourself completely, you can decline the telephone privilege on your
application. The fund may suspend or eliminate the telephone privilege at any
time.
Exchange Privileges There is no fee to exchange shares among State Street
Research funds. Your new fund shares will be the equivalent class as your
current shares. Any contingent deferred sales charges will continue to be
calculated from the date of your initial investment.
Frequent exchanges can interfere with fund management and drive up costs for all
shareholders. Because of this, the fund currently limits each account, or group
of accounts under common ownership or control, to six exchanges per calendar
year. The fund may change or eliminate the exchange privilege at any time, may
<PAGE>
21
-------
limit or cancel any shareholder's exchange privilege and may refuse to accept
any exchange request, particularly those associated with "market timing"
strategies.
For Merrill Lynch customers, exchange privileges extend to Summit Cash Reserves
Fund, which is related to the fund for purposes of investment and investor
services.
Accounts with Low Balances If the value of your account falls below $1,500,
State Street Research may mail you a notice asking you to bring the account back
up to $1,500 or close it out. If you do not take action within 60 days, State
Street Research may either sell your shares and mail the proceeds to you at the
address of record or may deduct an annual maintenance fee (currently $18).
Reinstating Recently Sold Shares For 120 days after you sell shares, you have
the right to "reinstate" your investment by putting some or all of the proceeds
into any currently available State Street Research fund at net asset value. Any
CDSC you paid on the amount you are reinstating will be credited to your
account. You may only use this privilege once in any twelve-month period with
respect to your shares of a given fund.
[Graphic of Uncle Sam] Distributions and Taxes
Income and Capital Gains Distributions The fund typically distributes its net
income and net capital gains, if any, around the end of the fund's fiscal year,
which is December 31.
You may have your distributions reinvested in the fund, invested in a different
State Street Research fund, deposited in a bank account, or mailed out by check.
If you do not give State Street Research other instructions, your distributions
will automatically be reinvested in the fund.
<PAGE>
22 Your Account continued
- --------------------------------------------------------------------------------
[Graphic of magnifying glass] Tax Considerations
Unless your investment is in a tax-deferred account, you may want to avoid:
[bullet] investing a large amount in the fund close to the end of its fiscal
year (if the fund makes a capital gains distribution, you will receive
some of your investment back as a taxable distribution)
[bullet] selling shares at a loss for tax purposes and investing in a
substantially identical investment within 30 days before or after that
sale (such a transaction is usually considered a "wash sale," and you
will not be allowed to claim a tax loss)
Tax Effects of Distributions and Transactions In general, any dividends and
short-term capital gain distributions you receive from the fund are taxable as
ordinary income. Distributions of other capital gains are generally taxable as
capital gains. This is true no matter how long you have owned your shares and
whether you reinvest your distributions or take them in cash.
Every year, the fund will send you information detailing the amount of ordinary
income and capital gains distributed to you for the previous year.
The sale of shares in your account may produce a gain or loss, and is a taxable
event. For tax purposes, an exchange is the same as a sale.
Your investment in the fund could have additional tax consequences. Please
consult your tax professional for assistance.
Backup Withholding By law, the fund must withhold 31% of your distributions
and proceeds if you have not provided complete, correct taxpayer information.
<PAGE>
23
-------
[Graphic of hands] Investor Services
Investamatic Program Use Investamatic to set up regular automatic investments in
the fund from your bank account. You determine the frequency and amount of your
investments, and you can skip an investment with three days notice. Not
available with Class S shares.
Systematic Withdrawal Plan This plan is designed for retirees and other
investors who want regular withdrawals from a fund account. The plan is free and
allows you to withdraw up to 8% of your fund assets a year without incurring any
contingent deferred sales charges. Certain terms and minimums apply.
Dividend Allocation Plan This plan automatically invests your distributions from
the fund into another fund of your choice, without any fees or sales charges.
Automatic Bank Connection This plan lets you route any distributions or
Systematic Withdrawal Plan payments directly to your bank account.
State Street Research also offers a full range of prototype retirement plans for
individuals, sole proprietors, partnerships, corporations and employees. Call
1-800-562-0032 for information on retirement plans or any of the services
described above.
<PAGE>
24 Fund Details
- --------------------------------------------------------------------------------
[Graphic of pillar] Business Structure
Originally formed in 1960, the fund was reorganized in 1989 as a diversified
series of State Street Research Growth Trust, an open-end management investment
company that is organized as a Massachusetts business trust. The fund began
offering its shares to the public on a continuous basis in 1993.
A board of trustees representing shareholder interests oversees the fund's
operations, including the hiring of the investment manager and other service
providers. The fund does not hold regular shareholder meetings, but may call
meetings when matters arise that require shareholder approval. These may include
amendments to the investment management agreement, the election of trustees or
proposed changes in the fund's fundamental goal, which cannot be changed without
shareholder approval.
The investment manager is responsible for the fund's investment and business
activities, and receives the management fee (0.475% of fund assets, annually) as
compensation.
The investment manager and the distributor are subsidiaries of Metropolitan Life
Insurance Company.
Brokers for Portfolio Trades
When placing trades for the fund's portfolio, State Street Research chooses
brokers that provide the best execution (a term defined by service as well as
price), but may also consider a broker's sales of fund shares.
Investment Manager
State Street Research & Management Company
One Financial Center, Boston, MA 02111
Distributor
State Street Research Investment Services, Inc.
One Financial Center, Boston, MA 02111
Service Center
State Street Research Service Center
P.O. Box 8408, Boston, MA 02266
Custodian
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110
<PAGE>
25
------
[Graphic of check] Dealer Compensation
Dealers who sell shares of the fund and perform services for fund investors
receive sales commissions and annual fees. These are paid by the fund's
distributor, using money from sales charges, marketing/service (12b-1) fees and
its other resources.
Maximum Dealer Compensation Class A Class B Class C Class S
- -------------------------------------------------------------------------------
Initial commission (%) -- 4.00 1.00 0.00
Investments up to $100,000 (%) 4.00 -- -- --
$100,000 - $249,999 (%) 3.00 -- -- --
$250,000 - $499,999 (%) 2.00 -- -- --
$500,000 - $999,999 (%) 1.75 -- -- --
First $1-3 million (%) 1.00(1) -- -- --
Next $2 million (%) 0.50(1) -- -- --
Next $1 and above (%) 0.25(1) -- -- --
Annual fee (%) 0.25 0.25 0.90 0.00
Additional Policies Please note that the fund maintains additional policies and
reserves certain rights, including:
[bullet] The fund may vary its initial or additional investments in the case of
exchanges, reinvestments, periodic investment plans, retirement and
employee benefit plans, sponsored arrangements and other similar
programs.
[bullet] All orders to purchase shares are subject to acceptance by the fund.
[bullet] At any time, the fund may change or discontinue its sales charge
waivers and any of its order acceptance practices, and may suspend the
sale of its shares.
[bullet] To permit investors to obtain the current price, dealers are
responsible for transmitting all orders to the State Street Research
Service Center promptly.
[bullet] Dealers may impose a transaction fee on the purchase or sale of shares
by shareholders.
[bullet] The distributor may pay its affiliate MetLife Securities, Inc.
additional compensation of up to 0.25% of certain sales or assets.
(1) If your broker declines this commission, the one-year CDSC on your
investment is waived.
<PAGE>
26 Other Securities and Risks
- --------------------------------------------------------------------------------
[Graphic of security]
Other Securities
and Risks
Each of the fund's portfolio securities and investment practices offers certain
opportunities and carries various risks. Major investments and risk factors are
outlined in the fund description starting on page 2. Below are brief
descriptions of other securities and practices, along with their associated
risks. A table of limitations follows.
Foreign Investments Foreign securities are generally more volatile than their
domestic counterparts, in part because of higher political and economic risks,
lack of reliable information, and fluctuations in currency exchange rates. These
risks are usually higher in less developed countries. The trust may use foreign
currencies and related instruments to hedge its foreign investments.
In addition, foreign securities may be more difficult to resell and the markets
for them less efficient than for comparable U.S. securities. Even where a
foreign security increases in price in its local currency, the appreciation may
be diluted by the negative effect of exchange rates when the security's value is
converted to U.S. dollars. Foreign withholding taxes also may apply and errors
and delays may occur in the settlement process for foreign securities.
Derivatives Derivatives, a category that includes options and futures, are
financial instruments whose value derives from another security or an index. The
trust may use derivatives for hedging (attempting to offset a potential loss in
one position by establishing an interest in an opposite
<PAGE>
27
------
position). The trust may also use derivatives for speculation (investing for
potential income or capital gain).
While hedging can guard against potential risks, it adds to the trust's expenses
and can eliminate some opportunities for gains. There is also a risk that a
derivative intended as a hedge may not perform as expected.
The main risk with derivatives is that some types can amplify a gain or loss,
potentially earning or losing substantially more money than the actual cost of
the derivative.
With all derivatives, whether used for hedging or speculation, there is also the
risk that the counterparty may fail to honor its contract terms, causing a loss
for the trust.
Securities Lending The fund may seek additional income by lending portfolio
securities to qualified institutions. By reinvesting the collateral it receives
in these transactions, the fund could magnify any gain or loss it realizes on
the underlying investment. If the borrower fails to return the securities and
the collateral is insufficient to cover the loss, the fund could lose money.
When-issued Securities The fund may invest in securities prior to the date of
their issue. These securities could fall in value prior to the time they are
actually issued, which may be anytime from a few days to over a year.
Restricted and Illiquid Securities Any securities that are thinly traded or
whose resale is restricted can be difficult to sell at a desired time and price.
Some of these securities are new and complex, and trade only among institutions;
the markets for these securities are still developing, and may not function as
efficiently as established markets. Owning a large percentage of restricted and
illiquid securities could hamper the fund's ability to raise cash to meet
redemptions. Also, because there may not be an established market price for
these securities, the fund may have to estimate their value, which means that
their valuation (and, to a much smaller extent, the valuation of the fund) may
have a subjective element.
<PAGE>
28 Other Securities and Risks continued
- --------------------------------------------------------------------------------
Repurchase Agreements The fund may buy securities with the understanding that
the seller will buy them back with interest at a later date. If the seller is
unable to honor its commitment to repurchase the securities, the fund could lose
money.
Bonds The value of any bonds held by the fund is likely to decline when interest
rates rise; the risk is greater for bonds with longer maturities. A less
significant risk is that a bond issuer could default on principal or interest
payments, causing a loss for the fund.
Defensive Investing During unusual market conditions, the fund may place up to
100% of total assets in cash or quality short-term debt securities.
Investment Limitations
<TABLE>
<CAPTION>
Limitations at the time of investment
-------------------------------------
Practice % of total assets % of net assets
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Investing in securities of any given issuer
(other than the U.S. government and its agencies)(1) 5(2) --
Investing in any given industry(1) 25 --
Lending securities 33-1\3 --
Lending money(1) Prohibited --
Repurchase agreements 30
Swap arrangements -- 5
Security
- ----------------------------------------------------------------------------------------
Commodity futures contracts and options contracts
(for non-hedging purposes) -- 5(3)
Other options contracts (for non-hedging purposes) -- 5(3)
Illiquid securities -- 15(4)
Restricted securities 10(5) --
Foreign securities 35(6) --
</TABLE>
(1) Fundamental policy; may not be changed without shareholder approval.
(2) Applies only to 75% of fund's total assets. The fund is also prohibited from
investing in more than 10% of an issuer's securities.
(3) Initial margin deposits plus premiums may not exceed 5% of the market value
of the fund's net assets in non-hedging transactions. No limits apply when
used in hedging strategies.
(4) Includes repurchase agreements extending over more than seven days.
(5) Does not include Rule 144A securities.
(6) Applies to all direct and indirect interests in securities of non-U.S.
issuers.
<PAGE>
Notes 29
- --------------------------------------------------------------------------------
<PAGE>
For Additional Information
- -------------------------------------------------------------------------------
You can obtain a free copy of the
current annual/semiannual report
or SAI by contacting:
[STATE STREET RESEARCH LOGO]
Service Center
P.O. Box 8408, Boston, MA 02266
Telephone: 1-800-562-0032
Internet: www.ssrfunds.com
Or you can visit the SEC Web site at:
www.sec.gov
Control Number: xxxx-xxxxxx(xxxx)SSR-LD
You can find additional information on the fund's structure and its performance
in the following documents:
Annual/Semiannual Reports While the prospectus describes the fund's potential
investments, these reports detail the fund's actual investments as of the
report date. Reports include a discussion by fund management of recent economic
and market trends and fund performance. The annual report also includes the
report of the fund's independent accountants.
Statement of Additional Information (SAI) A supplement to the prospectus, the
SAI contains further information about the fund and its investment limitations
and policies. It also includes the most recent annual report and the independent
accountants' report. A current SAI for this fund is on file with the Securities
and Exchange Commission and is incorporated by reference (is legally part of
this prospectus).
prospectus
- --------------
EIN-xxxx-xxxxx
<PAGE>
STATE STREET RESEARCH GROWTH FUND
a Series of
STATE STREET RESEARCH GROWTH TRUST
STATEMENT OF ADDITIONAL INFORMATION
May 1, 1998
TABLE OF CONTENTS
Page
----
INVESTMENT OBJECTIVE................................................2
ADDITIONAL INVESTMENT POLICIES AND RESTRICTIONS.....................2
ADDITIONAL INFORMATION CONCERNING
CERTAIN INVESTMENT TECHNIQUES...................................5
DEBT INSTRUMENTS AND PERMITTED CASH INVESTMENTS....................15
THE TRUST, THE FUND AND ITS SHARES.................................20
TRUSTEES AND OFFICERS..............................................22
INVESTMENT ADVISORY SERVICES.......................................26
PURCHASE AND REDEMPTION OF SHARES..................................27
SHAREHOLDER ACCOUNTS...............................................33
NET ASSET VALUE....................................................37
PORTFOLIO TRANSACTIONS.............................................39
CERTAIN TAX MATTERS................................................42
DISTRIBUTION OF SHARES OF THE FUND.................................44
CALCULATION OF PERFORMANCE DATA....................................50
CUSTODIAN..........................................................53
INDEPENDENT ACCOUNTANTS............................................54
FINANCIAL STATEMENTS...............................................54
The following Statement of Additional Information is not a Prospectus.
It should be read in conjunction with the Prospectus of State Street Research
Growth Fund (the "Fund") dated May 1, 1998, which may be obtained without charge
from the offices of State Street Research Growth Trust (the "Trust") or State
Street Research Investment Services, Inc. (the "Distributor"), One Financial
Center, Boston, Massachusetts 02111-2690.
CONTROL NUMBER: 12850-970131(0298)SSR-LD CF-879D-0198
<PAGE>
INVESTMENT OBJECTIVE
As set forth under "The Fund--Goal and Strategy--Fundamental Goal" in
the Prospectus of State Street Research Growth Fund (the "Fund"), the Fund's
investment goal, which is to provide long-term growth of capital, is fundamental
and may not be changed by the Fund except by the affirmative vote of a majority
of the outstanding voting securities of the Fund, as defined in the Investment
Company Act of 1940, as amended (the "1940 Act"). (Under the 1940 Act, a "vote
of the majority of the outstanding voting securities" means the vote, at the
annual or a special meeting of security holders duly called, (i) of 67% or more
of the voting securities present at the meeting if the holders of more than 50%
of the outstanding voting securities are present or represented by proxy or (ii)
of more than 50% of the outstanding voting securities, whichever is less.)
ADDITIONAL INVESTMENT POLICIES AND RESTRICTIONS
As set forth under "Growth Fund--Portfolio Risks" and "Other Securities
and Risks" in the Fund's Prospectus, the Fund has adopted certain investment
restrictions, and those investment restrictions are either fundamental or not
fundamental. Fundamental restrictions may not be changed by the Fund except by
the affirmative vote of a majority of the outstanding voting securities of the
Fund. Restrictions that are not fundamental may be changed by a vote of a
majority of the Trustees of the Trust.
The Fund's fundamental investment restrictions are set forth below.
Under these restrictions, it is the Fund's policy:
(1) not to purchase for its portfolio the securities of any issuer if
such purchase at the time thereof would cause less than seventy
five percent (75%) of the total assets of the Fund to be invested
in cash and cash items including receivables), government
securities, securities of other investment companies, and other
securities limited in respect of any one issuer to an amount not
greater in value than five percent (5%) of said total assets of
the Fund;
(2) not to purchase for its portfolio the securities of any one
issuer if such purchase at the time thereof would cause more than
10% of any class of securities of such issuer (as disclosed by
the last available financial statement of such issuer) to be held
by the Fund;
(3) not to issue senior securities except that this restriction shall
not apply to the establishment of multiple classes of shares of
the Fund or other issuance of any
2
<PAGE>
securities or related actions that may be construed to involve
senior securities otherwise permitted by law and regulatory
authorities;
(4) not to underwrite or participate in the marketing of securities
of other issuers, except the Fund may, acting alone or in
syndicates or groups, purchase or otherwise acquire securities of
other issuers for investment, either from the issuers or from
persons in a control relationship with the issuers or from
underwriters of such securities [as a matter of interpretation,
which is not part of the fundamental policy, this restriction
does not apply to the extent that, in connection with the
disposition of the Fund's securities, the Fund may be deemed to
be an underwriter under certain federal securities laws];
(5) not to invest in or hold for investment any real property [as a
matter of interpretation, which is not part of the fundamental
policy, this restriction does not apply to the extent the Fund
purchases or sells other interests in real estate including
securities which are secured by real estate, or securities of
companies which own or invest or deal in real estate];
(6) not to invest in commodities or commodity contracts in excess of
10% of the Fund's total assets, except that investments in
foreign currencies, forward contracts, futures contracts and
options on futures contracts on securities, securities indices
and foreign currencies shall not be deemed an investment in
commodities or commodities contracts;
(7) not to lend money, except that the Fund may lend portfolio
securities and purchase bonds, debentures, notes and similar
obligations (and enter into repurchase agreements with respect
thereto);
(8) not to make any investment which would cause more than 25% of the
Fund's total assets, taken at market value, to be invested in any
one industry [as a matter of interpretation, which is not part of
the fundamental policy, under this restriction, (a) utilities
will be divided according to their services so that, for example,
gas, gas transmission, electric and telephone companies will each
be deemed in a separate industry, (b) oil and oil related
companies will be divided by type so that, for example, oil
production companies, oil service companies and refining and
marketing companies will each be deemed in a separate industry,
(c) finance companies will be classified according to the
industries of their parent companies, and (d) securities issued
or guaranteed as to principal or interest by the U.S. Government
or its agencies or instrumentalities (including repurchase
agreements involving such U.S. Government securities to the
extent excludable under relevant regulatory interpretations)
shall be excluded];
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<PAGE>
(9) not to borrow money, except that the Board of Trustees may
authorize the borrowing of money on an unsecured basis for the
general purposes of the Fund and may authorize the issue therefor
of notes or debentures, but no money shall be borrowed for the
Fund except pursuant to the authority of the Board of Trustees,
and no borrowings for the Fund shall be authorized to an
aggregate amount greater than 10% of the net assets of the Fund
[as a matter of interpretation, which is not part of the
fundamental policy, this restriction is deemed to include reverse
repurchase agreements, and as a current nonfundamental policy,
the Fund will not borrow money except from banks for
extraordinary and emergency purposes, such as to permit
redemption requests to be honored, and except the use of funds in
the clearance of portfolio transactions may be regarded as
borrowing];
(10) not to purchase securities on margin or make a short sale of any
securities;
(11) not to purchase for its portfolio securities of companies which
have a record of less than three (3) years' continuous operation
if such purchase at the time thereof would cause more than 5% of
the total assets of the Fund to be invested in the securities of
such company or companies; such period of three years may include
the operation of any predecessor company or companies,
partnership or individual enterprise, if the company whose
securities are taken as an investment for funds of the Fund, has
come into existence as a result of a merger, consolidation,
reorganization, or the purchase of substantially all the assets
of such predecessor company or companies, partnership or
individual enterprise; and
(12) not to purchase for, or retain in, its portfolio any securities
issued by an issuer any of whose officers, directors or security
holders is an Officer, Trustee or Director of the Trust or of the
investment adviser of the Fund if, to the knowledge of the Trust,
one or more of the Officers, Trustees or Directors of the Trust
or of its investment adviser own beneficially more than one-half
of one percent (0.5%) of the shares or securities or both (taken
at market value) of such issuer and all such Officers and
Directors owning more than one-half of one percent (0.5%) of such
shares or securities together own beneficially more than five
percent (5%) of such shares or securities or both (taken at
market value); and if the Secretary of the Trust shall have
requested all Officers, Trustees and Directors of the Trust and
of its investment adviser to notify the Trust at least quarter
annually as to their ownership interest in the securities held by
the Fund, then the Fund shall not be charged with knowledge of
any such ownership interest in the absence of receiving such
notice.
The following investment restrictions are not fundamental. Under these
restrictions, it is the Fund's policy:
4
<PAGE>
(1) not to purchase any security or enter into a repurchase agreement
if as a result more than 15% of its net assets would be invested
in securities that are illiquid (including repurchase agreements
not entitling the holder to payment of principal and interest
within seven days);
(2) not to engage in transactions in options except in connection
with options on securities, securities indices and foreign
currencies, and options on futures contracts on securities,
securities indices and foreign currencies;
(3) not to hypothecate, mortgage or pledge any of its assets except
as may be necessary in connection with permitted borrowings (for
the purpose of this restriction, futures, options and forward
commitments, and related escrow or custodian receipts or letters,
margin or safekeeping accounts, or similar arrangements used in
the industry in connection with the trading of such investments,
are not deemed to involve a hypothecation, mortgage or pledge of
assets);
(4) not to purchase a security issued by another investment company,
except to the extent permitted under the 1940 Act or except by
purchases in the open market involving only customary brokers'
commissions, or securities acquired as dividends or distributions
or in connection with a merger, consolidation or similar
transaction or other exchange; and
(5) not to invest in companies for the purpose of exercising control
over their management, although the Fund may from time to time
present its views on various matters to the management of issuers
in which it holds investments.
ADDITIONAL INFORMATION CONCERNING
CERTAIN INVESTMENT TECHNIQUES
Derivatives
The Fund may buy and sell certain types of derivatives, such as options,
futures contracts, options on futures contracts, and swaps under circumstances
in which such instruments are expected by State Street Research & Management
Company (the "Investment Manager") to aid in achieving the Fund's investment
objective. The Fund may also purchase instruments with characteristics of both
futures and securities (e.g., debt instruments with interest and principal
payments determined by reference to the value of a commodity or a currency at a
future time) and which, therefore, possess the risks of both futures and
securities investments.
Derivatives, such as options, futures contracts, options on futures
contracts, and swaps enable the Fund to take both "short" positions (positions
which anticipate a decline in the market
5
<PAGE>
value of a particular asset or index) and "long" positions (positions which
anticipate an increase in the market value of a particular asset or index). The
Fund may also use strategies which involve simultaneous short and long positions
in response to specific market conditions, such as where the Investment Manager
anticipates unusually high or low market volatility.
The Investment Manager may enter into derivative positions for the Fund
for either hedging or non-hedging purposes. The term hedging is applied to
defensive strategies designed to protect the Fund from an expected decline in
the market value of an asset or group of assets that the Fund owns (in the case
of a short hedge) or to protect the Fund from an expected rise in the market
value of an asset or group of assets which it intends to acquire in the future
(in the case of a long or "anticipatory" hedge). Non-hedging strategies include
strategies designed to produce incremental income (such as the option writing
strategy described below) or "speculative" strategies, which are undertaken to
profit from (i) an expected decline in the market value of an asset or group of
assets which the Fund does not own or (ii) expected increases in the market
value of an asset which it does not plan to acquire. Information about specific
types of instruments is provided below.
Futures Contracts. Futures contracts are publicly traded contracts to
buy or sell an underlying asset or group of assets, such as a currency or an
index of securities, at a future time at a specified price. A contract to buy
establishes a long position while a contract to sell establishes a short
position.
The purchase of a futures contract on an equity security or an index of
equity securities normally enables a buyer to participate in the market movement
of the underlying asset or index after paying a transaction charge and posting
margin in an amount equal to a small percentage of the value of the underlying
asset or index. The Fund will initially be required to deposit with the Trust's
custodian or the broker effecting the futures transaction an amount of "initial
margin" in cash or securities, as permitted under applicable regulatory
policies.
Initial margin in futures transactions is different from margin in
securities transactions in that the former does not involve the borrowing of
funds by the customer to finance the transaction. Rather, the initial margin is
like a performance bond or good faith deposit on the contract. Subsequent
payments (called "maintenance margin") to and from the broker will be made on a
daily basis as the price of the underlying asset fluctuates. This process is
known as "marking to market." For example, when the Fund has taken a long
position in a futures contract and the value of the underlying asset has risen,
that position will have increased in value and the Fund will receive from the
broker a maintenance margin payment equal to the increase in value of the
underlying asset. Conversely, when the Fund has taken a long position in a
futures contract and the value of the underlying instrument has declined, the
position would be less valuable, and the Fund would be required to make a
maintenance margin payment to the broker.
6
<PAGE>
At any time prior to expiration of the futures contract, the Fund may
elect to close the position by taking an opposite position which will terminate
the Fund's position in the futures contract. A final determination of
maintenance margin is then made, additional cash is required to be paid by or
released to the Fund, and the Fund realizes a loss or a gain. While futures
contracts with respect to securities do provide for the delivery and acceptance
of such securities, such delivery and acceptance are seldom made.
In transactions establishing a long position in a futures contract,
assets equal to the face value of the futures contract will be identified by the
Fund to the Trust's custodian for maintenance in a separate account to insure
that the use of such futures contracts is unleveraged. Similarly, assets having
a value equal to the aggregate face value of the futures contract will be
identified with respect to each short position. The Fund will utilize such
assets and methods of cover as appropriate under applicable exchange and
regulatory policies.
Options. The Fund may use options to implement its investment strategy.
There are two basic types of options: "puts" and "calls." Each type of option
can establish either a long or a short position, depending upon whether the Fund
is the purchaser or the writer of the option. A call option on a security, for
example, gives the purchaser of the option the right to buy, and the writer the
obligation to sell, the underlying asset at the exercise price during the option
period. Conversely, a put option on a security gives the purchaser the right to
sell, and the writer the obligation to buy, the underlying asset at the exercise
price during the option period.
Purchased options have defined risk, that is, the premium paid for the
option, no matter how adversely the price of the underlying asset moves, while
affording an opportunity for gain corresponding to the increase or decrease in
the value of the optioned asset. In general, a purchased put increases in value
as the value of the underlying security falls and a purchased call increases in
value as the value of the underlying security rises.
The principal reason to write options is to generate extra income (the
premium paid by the buyer). Written options have varying degrees of risk. An
uncovered written call option theoretically carries unlimited risk, as the
market price of the underlying asset could rise far above the exercise price
before its expiration. This risk is tempered when the call option is covered,
that is, when the option writer owns the underlying asset. In this case, the
writer runs the risk of the lost opportunity to participate in the appreciation
in value of the asset rather than the risk of an out-of-pocket loss. A written
put option has defined risk, that is, the difference between the agreed-upon
price that the Fund must pay to the buyer upon exercise of the put and the
value, which could be zero, of the asset at the time of exercise.
The obligation of the writer of an option continues until the writer
effects a closing purchase transaction or until the option expires. To secure
its obligation to deliver the underlying asset in the case of a call option, or
to pay for the underlying asset in the case of a put
7
<PAGE>
option, a covered writer is required to deposit in escrow the underlying
security or other assets in accordance with the rules of the applicable clearing
corporation and exchanges.
Among the options which the Fund may enter are options on securities
indices. In general, options on indices of securities are similar to options on
the securities themselves except that delivery requirements are different. For
example, a put option on an index of securities does not give the holder the
right to make actual delivery of a basket of securities but instead gives the
holder the right to receive an amount of cash upon exercise of the option if the
value of the underlying index has fallen below the exercise price. The amount of
cash received will be equal to the difference between the closing price of the
index and the exercise price of the option expressed in dollars times a
specified multiple. As with options on equity securities, or futures contracts,
a Fund may offset its position in index options prior to expiration by entering
into a closing transaction on an exchange or it may let the option expire
unexercised.
A securities index assigns relative values to the securities included in
the index and the index options are based on a broad market index. In connection
with the use of such options, the Fund may cover its position by identifying
assets having a value equal to the aggregate face value of the option position
taken.
Options on Futures Contracts. An option on a futures contract gives the
purchaser the right, in return for the premium paid, to assume a position in a
futures contract (a long position if the option is a call and a short position
if the option is a put) at a specified exercise price at any time during the
period of the option.
Limitations and Risks of Options and Futures Activity. The Fund may not
establish a position in a commodity futures contract or purchase or sell a
commodity option contract for other than bona fide hedging purposes if
immediately thereafter the sum of the amount of initial margin deposits and
premiums required to establish such positions for such nonhedging purposes would
exceed 5% of the market value of the Fund's net assets. The Fund applies a
similar policy to options that are not commodities.
As noted above, the Fund may engage in both hedging and nonhedging
strategies. Although effective hedging can generally capture the bulk of a
desired risk adjustment, no hedge is completely effective. The Fund's ability to
hedge effectively through transactions in futures and options depends on the
degree to which price movements in its holdings correlate with price movements
of the futures and options.
Nonhedging strategies typically involve special risks. The profitability
of the Fund's nonhedging strategies will depend on the ability of the Investment
Manager to analyze both the applicable derivatives market and the market for the
underlying asset or group of assets. Derivatives markets are often more volatile
than corresponding securities markets and a
8
<PAGE>
relatively small change in the price of the underlying asset or group of assets
can have a magnified effect upon the price of a related derivative instrument.
Derivatives markets also are often less liquid than the market for the
underlying asset or group of assets. Some positions in futures and options may
be closed out only on an exchange which provides a secondary market therefor.
There can be no assurance that a liquid secondary market will exist for any
particular futures contract or option at any specific time. Thus, it may not be
possible to close such an option or futures position prior to maturity. The
inability to close options and futures positions also could have an adverse
impact on the Fund's ability to effectively carry out their derivative
strategies and might, in some cases, require a Fund to deposit cash to meet
applicable margin requirements. The Fund will enter into an option or futures
position only if it appears to be a liquid investment.
Swaps. The Fund may enter into various forms of swap arrangements with
counterparties with respect to interest rates, currency rates or indices,
including purchase of caps, floors and collars as described below. In an
interest rate swap the Fund could agree for a specified period to pay a bank or
investment banker the floating rate of interest on a so-called notional
principal amount (i.e., an assumed figure selected by the parties for this
purpose) in exchange for agreement by the bank or investment banker to pay the
Fund a fixed rate of interest on the notional principal amount. In a currency
swap the Fund would agree with the other party to exchange cash flows based on
the relative differences in values of a notional amount of two (or more)
currencies; in an index swap, the Fund would agree to exchange cash flows on a
notional amount based on changes in the values of the selected indices. Purchase
of a cap entitles the purchaser to receive payments from the seller on a
notional amount to the extent that the selected index exceeds an agreed upon
interest rate or amount whereas purchase of a floor entitles the purchaser to
receive such payments to the extent the selected index falls below an agreed
upon interest rate or amount. A collar combines a cap and a floor.
The Fund may enter credit protection swap arrangements involving the
sale by the Fund of a put option on a debt security which is exercisable by the
buyer upon certain events, such as a default by the referenced creditor on the
underlying debt or a bankruptcy event of the creditor.
Most swaps entered into by the Fund will be on a net basis; for example,
in an interest rate swap, amounts generated by application of the fixed rate and
the floating rate to the notional principal amount would first offset one
another, with the Fund either receiving or paying the difference between such
amounts. In order to be in a position to meet any obligations resulting from
swaps, the Fund will set up a segregated custodial account to hold appropriate
liquid assets, including cash; for swaps entered into on a net basis, assets
will be segregated having a daily net asset value equal to any excess of the
Fund's accrued obligations over the accrued obligations of the other party,
while for swaps on other than a net basis assets will be segregated having a
value equal to the total amount of the Fund's obligations.
9
<PAGE>
These arrangements will be made primarily for hedging purposes, to
preserve the return on an investment or on a portion of the Fund's portfolio.
However, the Fund may, as noted above, enter into such arrangements for income
purposes to the extent permitted by the Commodities Futures Trading Commission
for entities which are not commodity pool operators, such as the Fund. In
entering a swap arrangement, the Fund is dependent upon the creditworthiness and
good faith of the counterparty. The Fund attempts to reduce the risks of
nonperformance by the counterparty by dealing only with established, reputable
institutions. The swap market is still relatively new and emerging; positions in
swap arrangements may become illiquid to the extent that nonstandard
arrangements with one counterparty are not readily transferable to another
counterparty or if a market for the transfer of swap positions does not develop.
The use of interest rate swaps is a highly specialized activity which involves
investment techniques and risks different from those associated with ordinary
portfolio securities transactions. If the Investment Manager is incorrect in its
forecasts of market values, interest rates and other applicable factors, the
investment performance of the Fund would diminish compared with what it would
have been if these investment techniques were not used. Moreover, even if the
Investment Manager is correct in its forecasts, there is a risk that the swap
position may correlate imperfectly with the price of the asset or liability
being hedged.
Currency Transactions
The Fund may engage in currency exchange transactions in order to
protect against the effect of uncertain future exchange rates on securities
denominated in foreign currencies. The Fund will conduct its currency exchange
transactions either on a spot (i.e., cash) basis at the rate prevailing in the
currency exchange market, or by entering into forward contracts to purchase or
sell currencies. The Fund's dealings in forward currency exchange contracts will
be limited to hedging involving either specific transactions or aggregate
portfolio positions. A forward currency contract involves an obligation to
purchase or sell a specific currency at a future date, which may be any fixed
number of days from the date of the contract agreed upon by the parties, at a
price set at the time of the contract. These contracts are not commodities and
are entered into in the interbank market conducted directly between currency
traders (usually large commercial banks) and their customers. In entering a
forward currency contract, the Fund is dependent upon the creditworthiness and
good faith of the counterparty. The Fund attempts to reduce the risks of
nonperformance by the counterparty by dealing only with established, reputable
institutions. Although spot and forward contracts will be used primarily to
protect the Fund from adverse currency movements, they also involve the risk
that anticipated currency movements will not be accurately predicted, which may
result in losses to the Fund. This method of protecting the value of the Fund's
portfolio securities against a decline in the value of a currency does not
eliminate fluctuations in the underlying prices of the securities. It simply
establishes a rate of exchange that can be achieved at some future point in
time. Although such contracts tend to minimize the risk of loss due to a decline
in the value of hedged currency, they tend to limit any potential gain that
might result should the value of such currency increase.
10
<PAGE>
Repurchase Agreements
The Fund may enter into repurchase agreements. Repurchase agreements
occur when the Fund acquires a security and the seller, which may be either (i)
a primary dealer in U.S. Government securities or (ii) an FDIC-insured bank
having gross assets in excess of $500 million, simultaneously commits to
repurchase it at an agreed-upon price on an agreed-upon date within a specified
number of days (usually not more than seven) from the date of purchase. The
repurchase price reflects the purchase price plus an agreed-upon market rate of
interest which is unrelated to the coupon rate or maturity of the acquired
security. The Fund will only enter into repurchase agreements involving U.S.
Government securities. Repurchase agreements could involve certain risks in the
event of default or insolvency of the other party, including possible delays or
restrictions upon the Fund's ability to dispose of the underlying securities.
Repurchase agreements will be limited to 30% of the Fund's net assets, except
that repurchase agreements extending for more than seven days when combined with
any other illiquid securities held by the Fund will be limited to 15% of the
Fund's net assets.
Reverse Repurchase Agreements
The Fund may enter into reverse repurchase agreements. However, the Fund
may not engage in reverse repurchase agreements in excess of 5% of the Fund's
total assets. In a reverse repurchase agreement the Fund transfers possession of
a portfolio instrument to another person, such as a financial institution,
broker or dealer, in return for a percentage of the instrument's market value in
cash, and agrees that on a stipulated date in the future the Fund will
repurchase the portfolio instrument by remitting the original consideration plus
interest at an agreed-upon rate. The ability to use reverse repurchase
agreements may enable, but does not ensure the ability of, the Fund to avoid
selling portfolio instruments at a time when a sale may be deemed to be
disadvantageous.
When effecting reverse repurchase agreements, assets of the Fund in a
dollar amount sufficient to make payment of the obligations to be purchased are
segregated on the Fund's records at the trade date and maintained until the
transaction is settled.
When-Issued Securities
The Fund may purchase "when-issued" securities, which are traded on a
price or yield basis prior to actual issuance. Such purchases will be made only
to achieve the Fund's investment objective and not for leverage. The when-issued
trading period generally lasts from a few days to months, or over a year or
more; during this period dividends or interest on the securities are not
payable. A frequent form of when-issued trading occurs when corporate securities
to be created by a merger of companies are traded prior to the actual
consummation of the merger. Such transactions may involve a risk of loss if the
value of the securities falls below the price committed to prior to actual
issuance. The Trust's custodian will establish a segregated
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<PAGE>
account when the Fund purchases securities on a when-issued basis consisting of
cash or liquid securities equal to the amount of the when-issued commitments.
Securities transactions involving delayed deliveries or forward commitments are
frequently characterized as when-issued transactions and are similarly treated
by the Fund.
Restricted Securities
It is the Fund's policy not to make an investment in restricted
securities, including restricted securities sold in accordance with Rule 144A
under the Securities Act of 1933 ("Rule 144A Securities") if, as a result, more
than 35% of the Fund's total assets are invested in restricted securities,
provided not more than 10% of the Fund's total assets are invested in restricted
securities other than Rule 144A Securities.
Securities may be resold pursuant to Rule 144A under certain
circumstances only to qualified institutional buyers as defined in the rule, and
the markets and trading practices for such securities are relatively new and
still developing; depending on the development of such markets, Rule 144A
Securities may be deemed to be liquid as determined by or in accordance with
methods adopted by the Trustees. Under such methods the following factors are
considered, among others: the frequency of trades and quotes for the security,
the number of dealers and potential purchasers in the market, market making
activity, and the nature of the security and marketplace trades. Investments in
Rule 144A Securities could have the effect of increasing the level of the Fund's
illiquidity to the extent that qualified institutional buyers become, for a
time, uninterested in purchasing such securities. Also, the Fund may be
adversely impacted by the subjective valuation of such securities in the absence
of a market for them. Restricted securities that are not resalable under Rule
144A may be subject to risks of illiquidity and subjective valuations to a
greater degree than Rule 144A Securities.
Foreign Investments
The Fund reserves the right to invest without limitation in securities
of non-U.S. issuers directly, or indirectly in the form of American Depositary
Receipts ("ADRs") and European Depositary Receipts ("EDRs"). Under current
policy, however, the Fund limits such investments, including ADRs and EDRs, to a
maximum of 35% of its total assets.
ADRs are receipts, typically issued by a U.S. bank or trust company,
which evidence ownership of underlying securities issued by a foreign
corporation or other entity. EDRs are receipts issued in Europe which evidence a
similar ownership arrangement. Generally, ADRs in registered form are designed
for use in U.S. securities markets and EDRs are designed for use in European
securities markets. The underlying securities are not always denominated in the
same currency as the ADRs or EDRs. Although investment in the form of ADRs or
EDRs facilitates trading in foreign securities, it does not mitigate all the
risks associated with investing in foreign securities.
12
<PAGE>
ADRs are available through facilities which may be either "sponsored" or
"unsponsored." In a sponsored arrangement, the foreign issuer establishes the
facility, pays some or all of the depository's fees, and usually agrees to
provide shareholder communications. In an unsponsored arrangement, the foreign
issuer is not involved, and the ADR holders pay the fees of the depository.
Sponsored ADRs are generally more advantageous to the ADR holders and the issuer
than are unsponsored ADRs. More and higher fees are generally charged in an
unsponsored program compared to a sponsored facility. Only sponsored ADRs may be
listed on the New York or American Stock Exchanges. Unsponsored ADRs may prove
to be more risky due to (a) the additional costs involved to the Fund; (b) the
relative illiquidity of the issue in U.S. markets; and (c) the possibility of
higher trading costs in the over-the-counter market as opposed to exchange based
tradings. The Fund will take these and other risk considerations into account
before making an investment in an unsponsored ADR.
The risks associated with investments in foreign securities include
those resulting from fluctuations in currency exchange rates, revaluation of
currencies, future political and economic developments, including the risks of
nationalization or expropriation, the possible imposition of currency exchange
blockages, higher operating expenses, foreign withholding and other taxes which
may reduce investment return, reduced availability of public information
concerning issuers, the difficulties in obtaining and enforcing a judgment
against a foreign issuer and the fact that foreign issuers are not generally
subject to uniform accounting, auditing and financial reporting standards or to
other regulatory practices and requirements comparable to those applicable to
domestic issuers. Moreover, securities of many foreign issuers may be less
liquid and their prices more volatile than those of securities of comparable
domestic issuers.
These risks are usually higher in less-developed countries. Such
countries include countries that have an emerging stock market that trades a
small number of securities and/or countries with economies that are based on
only a few industries. The Fund may also invest in the securities of issuers in
countries with less developed economies as deemed appropriate by the Investment
Manager. However, it is anticipated that a majority of the foreign investments
by the Fund will consist of securities of issuers in countries with developed
economies.
Securities Lending
The Fund may lend portfolio securities with a value of up to 33-1/3% of
its total assets. The Fund will receive cash or cash equivalents (e.g., U.S.
Government obligations) as collateral in an amount equal to at least 100% of the
current market value of any loaned securities plus accrued interest. Collateral
received by the Fund will generally be held in the form tendered, although cash
may be invested in unaffiliated mutual funds with quality short-term portfolios,
securities issued or guaranteed by the U.S. Government or its agencies or
instrumentalities or certain unaffiliated mutual funds, irrevocable stand-by
letters of credit issued by a bank, or
13
<PAGE>
repurchase agreements, or other similar investments. The investing of cash
collateral received from loaning portfolio securities involves leverage which
magnifies the potential for gain or loss on monies invested and, therefore,
results in an increase in the volatility of the Fund's outstanding securities.
Such loans may be terminated at any time.
The Fund will retain rights to dividends, interest or other
distributions, on the loaned securities. Voting rights pass with the lending,
although the Fund may call loans to vote proxies if desired. Should the borrower
of the securities fail financially, there is a risk of delay in recovery of the
securities or loss of rights in the collateral. Loans are made only to borrowers
which are deemed by the Investment Manager or its agents to be of good financial
standing.
Short-Term Trading
The Fund may engage in short-term trading of securities and reserves
full freedom with respect to portfolio turnover. In periods where there are
rapid changes in economic conditions and security price levels or when
reinvestment strategy changes significantly, portfolio turnover may be higher
than during times of economic and market price stability or when investment
strategy remains relatively constant. The Fund's portfolio turnover rate may
involve greater transaction costs, relative to other funds in general, and may
have tax and other consequences.
Temporary and Defensive Investments
The Fund may hold up to 100% of its assets in cash or short-term debt
securities for temporary defensive purposes. The Fund will adopt a temporary
defensive position when, in the opinion of the Investment Manager, such a
position is more likely to provide protection against adverse market conditions
than adherence to the Fund's other investment policies. The types of short-term
instruments in which the Fund may invest for such purposes include short-term
money market securities, such as repurchase agreements, and securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities,
certificates of deposit, time deposits and bankers' acceptances of certain
qualified financial institutions and corporate commercial paper, which at the
time of purchase are rated at least within the "A" major rating category by
Standard & Poor's Corporation ("S&P") or the "Prime" major rating category by
Moody's Investor's Service, Inc. ("Moody's"), or, if not rated, issued by
companies having an outstanding long-term unsecured debt issued rated at least
within the "A" category by S&P or Moody's.
Industry Classifications
In determining how much of the Fund's portfolio is invested in a given
industry, the following industry classifications are currently used. Securities
issued or guaranteed as to principal or interest by the U.S. Government or its
agencies or instrumentalities or mixed-ownership Government corporations or
sponsored enterprises (including repurchase agreements involving U.S. Government
securities to the extent excludable under relevant
14
<PAGE>
regulatory interpretations) are excluded. Securities issued by foreign
governments are also excluded. Companies engaged in the business of financing
may be classified according to the industries of their parent or sponsor
companies or industries that otherwise most affect such financing companies.
Issuers of asset-backed pools will be classified as separate industries based on
the nature of the underlying assets, such as mortgages and credit card
receivables. "Asset-backed-Mortgages" includes private pools of nongovernment
backed mortgages.
<TABLE>
<CAPTION>
Basic Industries Consumer Staple Science & Technology
- --------------- --------------- --------------------
<S> <C> <C>
Chemical Business Service Aerospace
Diversified Container Computer Software
Electrical Equipment Drug & Service
Forest Products Food & Beverage Electronic Components
Machinery Hospital Supply Electronic Equipment
Metal & Mining Personal Care Office Equipment
Railroad Printing & Publishing
Truckers Tobacco
Utility Energy Consumer Cyclical
- ------ ------ -----------------
Electric Oil Refining & Marketing Airline
Gas Oil Production Automotive
Gas Transmission Oil Service Building
Telephone Hotel & Restaurant
Photography
Other Finance Recreation
- ----- ------- Retail Trade
Trust Certificates-- Bank Textile & Apparel
Government Related Lending Financial Service
Asset-backed--Mortgages Insurance
Asset-backed--Credit Card
Receivables
</TABLE>
DEBT INSTRUMENTS AND PERMITTED CASH INVESTMENTS
The Fund may invest in long-term and short-term debt securities.
Certain debt securities and money market instruments in which the Fund may
invest are described below.
Managing Volatility. In administering the Fund's portfolio, the
Investment Manager attempts to manage volatility in part by managing the
duration and weighted average maturity of the Fund's bond position.
Duration is an indicator of the expected volatility of a bond position
in response to changes in interest rates. In calculating duration, the Fund
measures the average time required to receive all cash flows associated with
those debt securities held in the Fund's portfolio -- representing payments of
principal and interest -- by considering the timing, frequency and amount of
payment expected from each portfolio security. The higher the duration, the
greater the gains and losses when interest rates change. Duration generally is a
more accurate measure of potential volatility with a portfolio composed of
high-quality debt securities, such as U.S. government securities, municipal
securities and high-grade U.S. corporate bonds, than with lower-grade
securities.
The Investment Manager may use several methods to manage the duration
of the Fund's bond position in order to increase or decrease its exposure to
changes in interest rates. First, the Investment Manager may adjust portfolio
duration by adjusting the mix of debt securities held by the Fund. For example,
if the Investment Manager intends to shorten duration, it may sell debt
instruments that individually have a long duration and purchase other debt
instruments that individually have a shorter duration. Among the factors that
will affect a debt security's duration are the length of time to maturity, the
timing of interest and principal payments, and whether the terms of the security
give the issuer of the security the right to call the security prior to
maturity. Second, the Investment Manager may adjust bond portfolio duration
using derivative transactions, especially with interest rates futures and
options contracts. For example, if the Investment Manager wants to lengthen the
duration of the Fund's bond position, it could purchase interest rate futures
contracts instead of buying longer-term bonds or selling shorter-term bonds.
Similarly, during periods of lower interest rate volatility, the Investment
Manager may use a technique to extend duration in the event rates rise by
writing an out-of-the-money put option and receiving premium income with the
expectation that the option could be exercised. In managing duration, the use of
such derivatives may be faster and more efficient than trading specific
portfolio securities.
Weighted average maturity is another indicator of potential volatility
used by the Investment Manager with respect to the Fund's bond portfolio,
although for certain types of debt securities, such as high quality debt
securities, it is not as accurate as duration in quantifying potential
volatility. Weighted average maturity is the average of all maturities of the
individual debt securities held by the Fund, weighted by the market value of
each security. Generally, the longer the weighted average maturity, the more
bond prices will vary in response to changes in interest rates.
U.S. Government and Related Securities. U.S. Government securities are
securities which are issued or guaranteed as to principal or interest by the
U.S. Government, a U.S.
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Government agency or instrumentality, or certain mixed-ownership Government
corporations as described herein. The U.S. Government securities in which the
Fund invests include, among others:
o direct obligations of the U.S. Treasury, i.e., U.S. Treasury
bills, notes, certificates and bonds;
o obligations of U.S. Government agencies or instrumentalities, such
as the Federal Home Loan Banks, the Federal Farm Credit Banks, the
Federal National Mortgage Association, the Government National
Mortgage Association and the Federal Home Loan Mortgage
Corporation; and
o obligations of mixed-ownership Government corporations such as
Resolution Funding Corporation.
U.S. Government securities which the Fund may buy are backed in a
variety of ways by the U.S. Government, its agencies or instrumentalities. Some
of these obligations, such as Government National Mortgage Association
mortgage-backed securities, are backed by the full faith and credit of the U.S.
Treasury. Other obligations, such as those of the Federal National Mortgage
Association, are backed by the discretionary authority of the U.S. Government to
purchase certain obligations of agencies or instrumentalities, although the U.S.
Government has no legal obligation to do so. Obligations such as those of the
Federal Home Loan Banks, the Federal Farm Credit Banks, the Federal National
Mortgage Association and the Federal Home Loan Mortgage Corporation are backed
by the credit of the agency or instrumentality issuing the obligations. Certain
obligations of Resolution Funding Corporation, a mixed-ownership Government
corporation, are backed with respect to interest payments by the U.S. Treasury,
and with respect to principal payments by U.S. Treasury obligations held in a
segregated account with a Federal Reserve Bank. Except for certain
mortgage-related securities, the Fund will only invest in obligations issued by
mixed-ownership Government corporations where such securities are guaranteed as
to payment of principal or interest by the U.S. Government or a U.S. Government
agency or instrumentality, and any unguaranteed principal or interest is
otherwise supported by U.S. Government obligations held in a segregated account.
U.S. Government securities may be acquired by the Fund in the form of
separately traded principal and interest components of securities issued or
guaranteed by the U.S. Treasury. The principal and interest components of
selected securities are traded independently under the Separate Trading of
Registered Interest and Principal of Securities ("STRIPS") program. Under the
STRIPS program, the principal and interest components are individually numbered
and separately issued by the U.S. Treasury at the request of depository
financial institutions, which then trade the component parts independently.
Obligations of Resolution Funding Corporation are similarly divided into
principal and interest components and maintained as such on the book entry
records of the Federal Reserve Banks.
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<PAGE>
In addition, the Fund may invest in custodial receipts that evidence
ownership of future interest payments, principal payments or both on certain
U.S. Treasury notes or bonds in connection with programs sponsored by banks and
brokerage firms. Such notes and bonds are held in custody by a bank on behalf of
the owners of the receipts. These custodial receipts are known by various names,
including "Treasury Receipts" ("TRs"), "Treasury Investment Growth Receipts"
("TIGRs") and "Certificates of Accrual on Treasury Securities" ("CATS"), and may
not be deemed U.S. Government securities.
The Fund may also invest from time to time in collective investment
vehicles, the assets of which consist principally of U.S. Government securities
or other assets substantially collateralized or supported by such securities,
such as Government trust certificates.
Bank Money Investments. Bank money investments include, but are not
limited to, certificates of deposit, bankers' acceptances and time deposits.
Certificates of deposit are generally short-term (i.e., less than one year),
interest-bearing negotiable certificates issued by commercial banks or savings
and loan associations against funds deposited in the issuing institution. A
banker's acceptance is a time draft drawn on a commercial bank by a borrower,
usually in connection with an international commercial transaction (to finance
the import, export, transfer or storage of goods). A banker's acceptance may be
obtained from a domestic or foreign bank, including a U.S. branch or agency of a
foreign bank. The borrower is liable for payment as well as the bank, which
unconditionally guarantees to pay the draft at its face amount on the maturity
date. Most acceptances have maturities of six months or less and are traded in
secondary markets prior to maturity. Time deposits are nonnegotiable deposits
for a fixed period of time at a stated interest rate. The Fund will not invest
in any such bank money investment unless the investment is issued by a U.S. bank
that is a member of the Federal Deposit Insurance Corporation ("FDIC"),
including any foreign branch thereof, a U.S. branch or agency of a foreign bank,
a foreign branch of a foreign bank, or a savings bank or savings and loan
association that is a member of the FDIC and which at the date of investment has
capital, surplus and undivided profits (as of the date of its most recently
published financial statements) in excess of $50 million. The Fund will not
invest in time deposits maturing in more than seven days and will not invest
more than 10% of its total assets in time deposits maturing in two to seven
days.
U.S. branches and agencies of foreign banks are offices of foreign
banks and are not separately incorporated entities. They are chartered and
regulated either federally or under state law. U.S. federal branches or agencies
of foreign banks are chartered and regulated by the Comptroller of the Currency,
while state branches and agencies are chartered and regulated by authorities of
the respective states or the District of Columbia. U.S. branches of foreign
banks may accept deposits and thus are eligible for FDIC insurance; however, not
all such branches elect FDIC insurance. Unlike U.S. branches of foreign banks,
U.S. agencies of foreign banks may not accept deposits and thus are not eligible
for FDIC insurance. Both branches and agencies can maintain credit balances,
which are funds received by the office incidental to or
17
<PAGE>
arising out of the exercise of their banking powers and can exercise other
commercial functions, such as lending activities.
Short-Term Corporate Debt Instruments. Short-term corporate debt
instruments include commercial paper to finance short-term credit needs (i.e.,
short-term, unsecured promissory notes) issued by corporations including but not
limited to (a) domestic or foreign bank holding companies or (b) their
subsidiaries or affiliates where the debt instrument is guaranteed by the bank
holding company or an affiliated bank or where the bank holding company or the
affiliated bank is unconditionally liable for the debt instrument. Commercial
paper is usually sold on a discounted basis and has a maturity at the time of
issuance not exceeding nine months.
Commercial Paper Ratings. Commercial paper investments at the time of
purchase will be rated within the "A" major rating category by S&P or within the
"Prime" major rating category by Moody's, or, if not rated, issued by companies
having an outstanding long-term unsecured debt issue rated at least within the
"A" category by S&P or by Moody's. The money market investments in corporate
bonds and debentures (which must have maturities at the date of settlement of
one year or less) must be rated at the time of purchase at least within the "A"
category by S&P or within the "Prime" category by Moody's.
Commercial paper rated within the "A" category (highest quality) by S&P
is issued by entities which have liquidity ratios which are adequate to meet
cash requirements. Long-term senior debt is rated within the "A" category or
better, although in some cases credits within the "BBB" category may be allowed.
The issuer has access to at least two additional channels of borrowing. Basic
earnings and cash flow have an upward trend with allowance made for unusual
circumstances. Typically, the issuer's industry is well established and the
issuer has a strong position within the industry. The reliability and quality of
management are unquestioned. The relative strength or weakness of the above
factors determines whether the issuer's commercial paper is rated A-1, A-2 or
A-3. (Those A-1 issues determined to possess overwhelming safety characteristics
are denoted with a plus (+) sign: A-1+.)
The rating Prime is the highest commercial paper rating category
assigned by Moody's. Among the factors considered by Moody's in assigning
ratings are the following: evaluation of the management of the issuer; economic
evaluation of the issuer's industry or industries and an appraisal of
speculative-type risks which may be inherent in certain areas; evaluation of the
issuer's products in relation to competition and customer acceptance; liquidity;
amount and quality of long-term debt; trend of earnings over a period of 10
years; financial management of obligations which may be present or may arise as
a result of public interest questions and preparations to meet such obligations.
These factors are all considered in determining whether the commercial paper is
rated Prime-1, Prime-2 or Prime-3.
In the event the lowering of ratings of debt instruments held by the
Fund by applicable rating agencies results in a material decline in the overall
quality of the Fund's portfolio, the
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<PAGE>
Trustees of the Trust will review the situation and take such action as they
deem in the best interests of the Fund's shareholders, including, if necessary,
changing the composition of the portfolio.
Rating Categories of Debt Securities. Set forth below is a description
of S&P corporate bond and debenture rating categories for securities which are
deemed to be investment grade:
AAA: Debt rated AAA has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA: Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small degree.
A: Debt rated A has a strong capacity to pay interest and repay
principal, although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher rated
categories.
BBB: Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
Plus (+) or Minus (-): The ratings from AA to BBB may be modified by
the addition of a plus or minus sign to show relative standing within the major
rating categories.
S&P may attach the "r" symbol to derivative, hybrid, and certain other
obligations that S&P believes may experience high volatility or high variability
in expected returns due to noncredit risks created by the terms of the
obligation, such as securities whose principal or interest return is indexed to
equities, commodities, or currencies; certain swaps and options; and interest
only (IO) and principal only (PO) mortgage securities.
Set forth below is a description of Moody's corporate bond and
debenture ratings categories for securities which are deemed to be investment
grade:
Aaa: Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are-generally referred to
as "gilt-edge." Interest payments are protected by a large or by an
exceptionally stable margin, and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally know as
high-grade bonds. They are rated
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<PAGE>
lower than the best bonds because margins of protection may not be as large as
in Aaa securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the long-term risks
appear somewhat larger then in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Baa: Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present, but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
1, 2, or 3: The ratings from Aa through Baa may be modified by the
addition of a numeral indicating a bond's rank within its major rating category.
THE TRUST, THE FUND AND ITS SHARES
State Street Research Growth Trust is currently comprised of only one
series: State Street Research Growth Fund. The Trustees of the Trust have
authority to issue an unlimited number of shares of beneficial interest of
separate series, $.001 par value per share. The Trustees also have authority,
without the necessity of a shareholder vote, to create any number of new series
or classes or to commence the public offering of shares of any previously
established series or classes. A "series" is a separate pool of assets of the
Trust which is separately managed and has a different investment objective and
different investment policies from those of another series.
The Trustees have authorized shares of the Fund to be issued in four
classes: Class A, Class B, Class C and Class S shares. Prior to November 1,
1997, the Fund's current Class C shares were designated as Class D shares and
the Fund's current Class S shares were designated as Class C shares.
Each share of each class of shares represents an identical legal
interest in the same portfolio of investments of the Fund, has the same rights
and is identical in all respects, except that Class A, Class B and Class C
shares bear the expenses of the deferred sales arrangement and any expenses
(including the higher service and distribution fees) resulting from such sales
arrangement, and certain other incremental expenses related to a class. Each
class will have exclusive voting rights with respect to provisions of the Rule
12b-1 distribution plan pursuant to which the service and distribution fees, if
any, are paid. Although the legal rights of holders of each class of shares are
identical, it is likely that the different expenses borne by each class will
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<PAGE>
result in different net asset values and dividends. The different classes of
shares of the Fund also have different exchange privileges. Except for those
differences between classes of shares described above, in the Fund's Prospectus
and otherwise this Statement of Additional Information, each share of the Fund
has equal dividend, redemption and liquidation rights with other shares of the
Fund, and when issued, is fully paid and nonassessable by the Fund.
The rights of holders of shares may be modified by the Trustees at any
time, so long as such modifications do not have a material, adverse effect on
the rights of any shareholder. On any matter submitted to the shareholders, the
holder of a Fund share is entitled to one vote per share (with proportionate
voting for fractional shares) regardless of the relative net asset value
thereof.
Under the Master Trust Agreement, no annual or regular meeting of
shareholders is required. Thus, there ordinarily will be no shareholder meetings
unless required by the 1940 Act. Except as otherwise provided under the 1940
Act, the Board of Trustees will be a self-perpetuating body until fewer than
two-thirds of the Trustees serving as such are Trustees who were elected by
shareholders of the Trust. In the event less than a majority of the Trustees
serving as such were elected by shareholders of the Trust, a meeting of
shareholders will be called to elect Trustees. Under the Master Trust Agreement,
any Trustee may be removed by vote of two-thirds of the outstanding Trust
shares; holders of 10% or more of the outstanding shares of the Trust can
require that the Trustees call a meeting of shareholders for purposes of voting
on the removal of one or more Trustees. In connection with such meetings called
by shareholders, shareholders will be assisted in shareholder communications to
the extent required by applicable law.
Under Massachusetts law, the shareholders of the Trust could, under
certain circumstances, be held personally liable for the obligations for the
Trust. However, the Master Trust Agreement of the Trust disclaims shareholder
liability for acts or obligations of the Trust and provides for indemnification
for all losses and expenses of any shareholder of the Fund held personally
liable for the obligations of the Trust. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which the Fund would be unable to meet its obligations. The
Investment Manager believes that, in view of the above, the risk of personal
liability to shareholders is remote.
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TRUSTEES AND OFFICERS
The Trustees and principal officers of the Trust, their addresses, and
their principal occupations and positions with certain affiliates of the
Investment Manager are set forth below.
*+Peter C. Bennett, One Financial Center, Boston, MA 02111, serves as
Vice President of the Trust. He is 59. His principal occupation is currently,
and during the past five years has been, Executive Vice President of State
Street Research & Management Company. Mr. Bennett is also a Director of State
Street Research & Management Company. Mr. Bennett's other principal business
affiliations include Director, State Street Research Investment Services, Inc.
and Executive Vice President, GFM International Investors Limited, Inc.
+Steve A. Garban, The Pennsylvania State University, 210 Old Main,
University Park, PA 16802, serves as Trustee of the Trust. He is 60. He is
retired and was formerly Senior Vice President for Finance and Operations and
Treasurer of The Pennsylvania State University.
+Malcolm T. Hopkins, 14 Brookside Road, Biltmore Forest, Asheville, NC
28803, serves as Trustee of the Trust. He is 70. He is engaged principally in
private investments. Previously, he was Vice Chairman of the Board and Chief
Financial Officer of St. Regis Corp.
+Edward M. Lamont, Box 1234, Moores Hill Road, Syosset, NY 11791,
serves as Trustee of the Trust. He is 71. He is engaged principally in private
investments and civic affairs and is an author of business history. Previously,
he was with an affiliate of J.P. Morgan Co. in New York.
+Robert A. Lawrence, 175 Federal Street, Boston, MA 02110, serves as
Trustee of the Trust. He is 71. He is retired and was formerly a Partner in
Saltonstall & Co., a private investment firm.
*+Gerard P. Maus, One Financial Center, Boston, MA 02111, serves as
Treasurer of the Trust. He is 47. His principal occupation is currently, and
during the past five years has been, Executive Vice President, Treasurer, Chief
Financial Officer and Director of State Street Research & Management Company.
Mr. Maus's other principal business affiliations include Executive Vice
President, Treasurer, Chief Financial Officer and Director of State Street
Research Investment Services, Inc. and Executive Vice President, Chief Financial
Officer, Administrative Officer and Director, GFM International Investors
Limited, Inc.
*+Francis J. McNamara, III, One Financial Center, Boston, MA 02111,
serves as Secretary and General Counsel of the Trust. He is 42. His principal
occupation is Executive Vice President, General Counsel and Secretary of State
Street Research & Management
- -------------------
* or +, see footnotes on page 24.
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Company. During the past five years he has also served as Senior Vice President
of State Street Research & Management Company and as Senior Vice President,
General Counsel and Assistant Secretary of The Boston Company, Inc., Boston Safe
Deposit and Trust Company and The Boston Company Advisors, Inc. Mr. McNamara's
other principal business affiliations include Senior Vice President, Clerk and
General Counsel of State Street Research Investment Services, Inc. and Executive
Vice President and General Counsel, GFM International Investors Limited, Inc.
+Dean O. Morton, 3200 Hillview Avenue, Palo Alto, CA 94304, serves as
Trustee of the Trust. He is 66. He is retired, having served during the past
five years, until October 1992, as Executive Vice President, Chief Operating
Officer and Director of Hewlett-Packard Company.
+Toby Rosenblatt, 3409 Pacific Avenue, San Francisco, CA 94118, serves
as Trustee of the Trust. He is 59. His principal occupations during the past
five years have been President of The Glen Ellen Company, a private investment
company, and Vice President of Founders Investments Ltd.
+Michael S. Scott Morton, Massachusetts Institute of Technology, 77
Massachusetts Avenue, Cambridge, MA 02139, serves as Trustee of the Trust. He is
60. His principal occupation during the past five years has been Jay W.
Forrester Professor of Management at Sloan School of Management, Massachusetts
Institute of Technology.
*+Ralph F. Verni, One Financial Center, Boston, MA 02111, serves as
Chairman of the Board, President, Chief Executive Officer and Trustee of the
Trust. He is 55. His principal occupation is currently, and during the past five
years has been, Chairman of the Board, President, Chief Executive Officer and
Director of State Street Research & Management Company. Mr. Verni's other
principal business affiliations include Chairman of the Board and Director of
State Street Research Investment Services, Inc. (and until February 1996, prior
positions as President and Chief Executive Officer of that company) and Chairman
of the Board, President, and Chief Executive Officer and Director of GFM
International Investors Limited, Inc.
*+Dudley F. Wade, One Financial Center, Boston, MA 02111, serves as
Vice President of the Trust. He is 79. His principal occupation during the past
five years has been Senior Vice President of State Street Research & Management
Company.
*+James M. Weiss, One Financial Center, Boston, MA 02111, serves as
Vice President of the Trust. He is 51. His principal occupation is Senior Vice
President of State Street Research & Management Company. During the past five
years he has also served as President and Chief Investment Officer of IDS
Advisory Group, Inc.
- -------------------
* or +, see footnotes on page 24.
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<PAGE>
*+Kennard Woodworth, Jr., One Financial Center, Boston, MA 02111,
serves as Vice President of the Trust. He is 59. His principal occupation is
Senior Vice President of State Street Research & Management Company.
- -----------------
* These Trustees and/or officers are or may be deemed to be "interested
persons" of the Trust under the 1940 Act because of their affiliations
with the Fund's investment adviser.
+ Serves as a Trustee/Director and/or officer of one or more of the
following investment companies, each of which has an advisory
relationship with the Investment Manager or its parent, Metropolitan
Life Insurance Company ("Metropolitan"): State Street Research Equity
Trust, State Street Research Financial Trust, State Street Research
Income Trust, State Street Research Money Market Trust, State Street
Research Tax-Exempt Trust, State Street Research Capital Trust, State
Street Research Exchange Trust, State Street Research Growth Trust,
State Street Research Master Investment Trust, State Street Research
Securities Trust, State Street Research Portfolios, Inc. and
Metropolitan Series Fund, Inc.
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As of January 31, 1998, the Trustees and principal officers of the
Trust owned as a group approximately ___% of the outstanding Class A shares of
the Fund and less than __% of the outstanding Class S shares of the Fund. The
Trustees and principal officers owned none of the Fund's outstanding Class B or
Class C shares.
Record ownership of shares of the Fund as of January 31, 1998 was as
follows:
Class Holder % of Class
- ---- ------ ----------
B Merrill Lynch 28.60
C(a) Merrill Lynch 60.20
The full name and address of the above person or institution is:
Merrill Lynch, Pierce, Fenner & Smith Incorporated (b)
4800 Deerlake Drive East
Jacksonville, FL 32246
Ownership of 25% or more of a voting security is deemed "control," as
defined in the 1940 Act. So long as 25% of a class of shares is so owned, such
owners will be presumed to be in control of such class of shares for purposes of
voting on certain matters submitted to a vote of shareholders, such as any
Distribution Plan for a given class.
- -------------------
(a) Prior to November 1, 1997, the Fund's current Class C shares were
designated as Class D shares and the Fund's current Class S shares were
designated as Class C shares.
(b) The Fund believes that each named recordholder does not have beneficial
ownership of such shares.
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<PAGE>
The Trustees were compensated as follows:
Total
Compensation
Aggregate From Trust
Name of Compensation and Complex Paid
Trustee From Trust(a) to Trustees (b)
------- ------------ ----------------
Steve A. Garban $3,165 $
Malcolm T. Hopkins $3,465 $
Edward M. Lamont $4,000 $
Robert A. Lawrence $4,100 $
Dean O. Morton $4,300 $
Toby Rosenblatt $4,000 $
Michael S. Scott Morton $4,600 $
Ralph F. Verni $ 0 $ 0
(a) For the Fund's fiscal year ended December 31, 1997. See "The Trust, the
Fund and its Shares" in this Statement of Additional Information for a
listing of series.
(b) Includes compensation on behalf of all series of 12 investment
companies for which the Investment Manager or its parent, Metropolitan
served as investment adviser. "Total Compensation from Trust and
Complex Paid to Trustees" for the 12 months ended December 31, 1997.
The Trust does not provide any pension or retirement benefits for the
Trustees.
INVESTMENT ADVISORY SERVICES
State Street Research & Management Company, the Investment Manager, a
Delaware corporation, with offices at One Financial Center, Boston,
Massachusetts 02111-2690, acts as investment adviser to the Fund. The Investment
Manager was founded by Paul Cabot, Richard Saltonstall and Richard Paine to
serve as investment adviser to one of the nation's first mutual funds, presently
known as State Street Research Investment Trust, which they had formed in 1924.
Their investment management philosophy emphasized comprehensive
fundamental research and analysis, including meetings with the management of
companies under consideration for investment. The Investment Manager's portfolio
management group has extensive investment industry experience managing equity
and debt securities. In managing debt securities, if any, for a portfolio, the
Investment Manager may consider yield curve positioning, sector rotation and
duration, among other factors.
The Advisory Agreement provides that the Investment Manager shall
furnish the Fund with an investment program, office facilities and such
investment advisory, research and administrative services as may be required
from time to time. The Investment Manager compensates all executive and clerical
personnel and Trustees of the Trust if such persons are
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<PAGE>
employees of the Investment Manager or its affiliates. The Investment Manager is
an indirect wholly-owned subsidiary of Metropolitan Life Insurance Company
("Metropolitan").
The advisory fee payable monthly by the Fund to the Investment Manager
is computed as a percentage of the average of the value of the net assets of the
Fund as determined at the close of regular trading on the New York Stock
Exchange (the "NYSE") on each day the NYSE is open for trading, at the annual
rate of 0.475% of the net assets of the Fund.
The advisory fees paid by the Fund to the Investment Manager for the
last three fiscal years, prior to the assumption of fees or expenses, were as
follows: 1997, $1,125,505; 1996, $1,100,839; and 1995, $1,089,143.
The Advisory Contract provides that it will continue from year to year
as long as it is approved at least annually both (i) by a vote of a majority of
the outstanding voting securities of the Fund (as defined in the 1940 Act) or by
the Trustees of the Trust, and (ii) in either event by a vote of a majority of
the Trustees who are not parties to the Advisory Contract or "interested
persons" of any party thereto, cast in person at a meeting called for the
purpose of voting on such approval. The Advisory Contract may be terminated on
60 days' written notice by either party and will terminate automatically in the
event of its assignment, as defined under the 1940 Act and regulations
thereunder. Such regulations provide that a transaction which does not result in
a change of actual control or management of an adviser is not deemed an
assignment.
Under a Shareholders' Administrative Services Agreement between the
Trust and the Distributor, the Distributor provides shareholders' administrative
services, such as responding to inquiries and instructions from investors
respecting the purchase and redemption of shares of the Fund, and is entitled to
reimbursements of its costs for providing such services. Under certain
arrangements for Metropolitan to provide subadministration services,
Metropolitan may receive a fee for the maintenance of certain share ownership
records for participants in sponsored arrangements, such as employee benefit
plans, through or under which the Fund's shares may be purchased.
Under the Code of Ethics of the Investment Manager, personnel are only
permitted to engage in personal securities transactions in accordance with
certain conditions relating to such person's position, the identity of the
security, the timing of the transaction, and similar factors. Such personnel
must report their personal securities transactions quarterly and supply broker
confirmations of such transactions to the Investment Manager.
PURCHASE AND REDEMPTION OF SHARES
Shares of the Fund are distributed by State Street Research Investment
Services, Inc., the Distributor. The Fund offers four classes of shares which
may be purchased at the next
27
<PAGE>
determined net asset value per share plus, in the case of all classes except
Class S shares, a sales charge which, at the election of the investor, may be
imposed (i) at the time of purchase (the Class A shares) or (ii) on a deferred
basis (the Class B and Class C shares). General information on how to buy shares
of the Fund, as well as sales charges involved, are set forth under "Your
Account" in the Prospectus. The following supplements that information.
Public Offering Price. The public offering price for each class of
shares is based on their net asset value determined as of the close of regular
trading on the NYSE on the day the purchase order is received by State Street
Research Service Center (the "Service Center"), provided that the order is
received prior to the close of regular trading on the NYSE on that day;
otherwise the net asset value used is that determined as of the close of the
NYSE on the next day it is open for unrestricted trading. When a purchase order
is placed through a dealer, that dealer is responsible for transmitting the
order promptly to the Service Center in order to permit the investor to obtain
the current price. Any loss suffered by an investor which results from a
dealer's failure to transmit an order promptly is a matter for settlement
between the investor and the dealer.
Class A Shares--Reduced Sales Charges. The reduced sales charges set
forth under "Your Account--Class A Sales Charge Reductions and Waivers" in the
Fund's Prospectus apply to purchases made at any one time by any "person," which
includes: (i) an individual, or an individual combining with his or her spouse
and their children and purchasing for his, her or their own account; (ii) a
"company" as defined in Section 2(a)(8) of the 1940 Act; (iii) a trustee or
other fiduciary purchasing for a single trust estate or single fiduciary account
(including a pension, profit sharing or other employee benefit trust created
pursuant to a plan qualified under Section 401 of the Internal Revenue Code);
(iv) a tax-exempt organization under Section 501(c)(3) or (13) of the Internal
Revenue Code; and (v) an employee benefit plan of a single employer or of
affiliated employers.
Investors may purchase Class A shares of the Fund at reduced sales
charges by executing a Letter of Intent to purchase no less than an aggregate of
$100,000 of the Fund or any combination of Class A shares of "Eligible Funds"
(which include the Fund and other funds as designated by the Distributor from
time to time) within a 13-month period. The sales charge applicable to each
purchase made pursuant to a Letter of Intent will be that which would apply if
the total dollar amount set forth in the Letter of Intent were being bought in a
single transaction. Purchases made within a 90-day period prior to the execution
of a Letter of Intent may be included therein; in such case the date of the
earliest of such purchases marks the commencement of the 13-month period.
An investor may include toward completion of a Letter of Intent the
value (at the current public offering price) of all of his or her Class A shares
of the Fund and of any of the other Class A shares of Eligible Funds held of
record as of the date of his or her Letter of Intent, plus the value (at the
current offering price) as of such date of all of such shares held by
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any "person" described herein as eligible to join with the investor in a single
purchase. Class B, Class C and Class S shares may also be included in the
combination under certain circumstances.
A Letter of Intent does not bind the investor to purchase the specified
amount. Shares equivalent to 5% of the specified amount will, however, be taken
from the initial purchase (or, if necessary, subsequent purchases) and held in
escrow in the investor's account as collateral against the higher sales charge
which would apply if the total purchase is not completed within the allotted
time. The escrowed shares will be released when the Letter of Intent is
completed or, if it is not completed, when the balance of the higher sales
charge is, upon notice, remitted by the investor. All dividends and capital
gains distributions with respect to the escrowed shares will be credited to the
investor's account.
Investors may purchase Class A shares of the Fund or a combination of
Eligible Funds at reduced sales charges pursuant to a Right of Accumulation. The
applicable sales charge under the right is determined on the amount arrived at
by combining the dollar amount of the purchase with the value (at the current
public offering price) of all Class A shares of the other Eligible Funds owned
as of the purchase date by the investor plus the value (at the current public
offering price) of all such shares owned as of such date by any "person"
described herein as eligible to join with the investor in a single purchase.
Class B, Class C and Class S shares may also be included in the combination
under certain circumstances. Investors must submit to the Distributor sufficient
information to show that they qualify for this Right of Accumulation.
Other Programs Related to Class A Shares. Class A shares of the Fund
may be sold or issued in an exchange at a reduced sales charge or without sales
charge pursuant to certain sponsored arrangements, which include programs under
which a company, employee benefit plan or other organization makes
recommendations to, or permits group solicitation of, its employees, members or
participants, except any organization created primarily for the purpose of
obtaining shares of the Fund at a reduced sales charge or without a sales
charge. Sales without a sales charge, or with a reduced sales charge, may also
be made through brokers, registered investment advisers, financial planners,
institutions, and others, under managed fee-based programs (e.g., "wrap fee" or
similar programs) which meet certain requirements established from time to time
by the Distributor. Information on such arrangements and further conditions and
limitations is available from the Distributor.
In addition, no sales charge is imposed in connection with the sale of
Class A shares of the Fund to the following entities and person: (A) the
Investment Manager, Distributor or any affiliated entities, including any direct
or indirect parent companies and other subsidiaries of such parents
(collectively "Affiliated Companies"); (B) employees, officers, sales
representatives or current or retired directors or trustees of the Affiliated
Companies or any investment company managed by any of the Affiliated Companies,
any relatives of any such
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individuals whose relationship is directly verified by such individuals to the
Distributor, or any beneficial account for such relatives or individuals; and
(C) employees, officers, sales representatives or directors of dealers and other
entities with a selling agreement with the Distributor to sell shares of any
aforementioned investment company, any spouse or child of such person, or any
beneficial account for any of them. The purchase must be made for investment and
the shares purchased may not be resold except through redemption. This purchase
program is subject to such administrative policies, regarding the qualification
of purchasers and any other matters, as may be adopted by the Distributor from
time to time.
Conversion of Class B Shares to Class A Shares. A shareholder's Class B
shares of the Fund, including all shares received as dividends or distributions
with respect to such shares, will automatically convert to Class A shares of the
Fund at the end of eight years following the issuance of such Class B shares;
consequently, they will no longer be subject to the higher expenses borne by
Class B shares. The conversion rate will be determined on the basis of the
relative per share net asset values of the two classes and may result in a
shareholder receiving either a greater or fewer number of Class A shares than
the Class B shares so converted. As noted above, holding periods for Class B
shares received in exchange for Class B shares of other Eligible Funds will be
counted toward the eight-year period.
Contingent Deferred Sales Charges. The amount of any contingent
deferred sales charge paid on Class A shares (on sales of $1 million or more and
which do not involve an initial sales charge) or on Class B or Class C shares of
the Fund will be paid to the Distributor. The Distributor will pay dealers at
the time of sale a 4% commission for selling Class B shares and a 1% commission
for selling Class C shares. In certain cases, a dealer may elect to waive the 4%
commission on Class B shares and receive in lieu thereof a 1% annual fee with
respect to such outstanding shares until the shares convert to Class A shares.
The proceeds of the contingent deferred sales charges and the distribution fees
are used to offset distribution expenses and thereby permit the sale of Class B
and Class C shares without an initial sales charge.
In determining the applicability and rate of any contingent deferred
sales charge of Class B or Class C shares, it will be assumed that a redemption
of the shares is made first of those shares having the greatest capital
appreciation, next of shares representing reinvestment of dividends and capital
gains distributions and finally of remaining shares held by shareholder for the
longest period of time. Class B shares that are redeemed within a five-year
period after their purchase, and Class C shares that are redeemed within a
one-year period after their purchase, will not be subject to a contingent
deferred sales charge to the extent that the value of such shares represents (1)
capital appreciation of Fund assets or (2) reinvestment of dividends or capital
gains distributions. The holding period for purposes of applying a contingent
deferred sales charge for a particular class of shares of the Fund acquired
through an exchange from another Eligible Fund will be measured from the date
that such shares were initially acquired in the other Eligible Fund, and shares
of the same class being redeemed will
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be considered to represent, as applicable, capital appreciation or dividend and
capital gains distribution reinvestments in such other Eligible Fund. These
determinations will result in any contingent deferred sales charge being imposed
at the lowest possible rate. For federal income tax purposes, the amount of the
contingent deferred sales charge will reduce the gain or increase the loss, as
the case may be, on the amount realized on redemption.
Contingent Deferred Sales Charge Waivers. With respect to Class A
shares (on sales of $1 million or more and which do not involve an initial sales
charge), and Class B and Class C shares of the Fund, the contingent deferred
sales charge does not apply to exchanges or to redemptions under a systematic
withdrawal plan which meets certain conditions. In addition, the contingent
deferred sales charge will be waived for: (i) redemptions made within one year
of the death or total disability, as defined by the Social Security
Administration, of all shareholders of an account; (ii) redemptions made after
attainment of a specific age in an amount which represents the minimum
distribution required at such age under Section 401(a)(9) of the Internal
Revenue Code of 1986, as amended, for retirement accounts or plans (e.g., age 70
70-1/2 for Individual Retirement Accounts and Section 403(b) plans), calculated
solely on the basis of assets invested in the Fund or other Eligible Funds; and
(iii) a redemption resulting from a tax-free return of an excess contribution to
an Individual Retirement Account. (The foregoing waivers do not apply to a
tax-free rollover or transfer of assets out of the Fund). The Fund may modify or
terminate the waivers at any time; for example, the Fund may limit the
application of multiple waivers and establish other conditions for employee
benefit plans.
Class S Shares. Class S shares are currently available to certain
employee benefit plans such as qualified retirement plans which meet criteria
relating to number of participants, service arrangements, or similar factors;
insurance companies; investment companies; advisory accounts of the Investment
Manager; endowment funds of nonprofit organizations with substantial minimum
assets (currently a minimum of $10 million); and other similar institutional
investors. Class S shares may be acquired through programs or products sponsored
by Metropolitan, its affiliates, or both for which Class S shares have been
designated. In addition, Class S shares are available through programs under
which, for example, investors pay an asset-based fee and/or a transaction fee to
intermediaries. Class S share availability is determined by the Distributor and
intermediaries based on the overall direct and indirect costs of a particular
program, expected assets, account sizes and similar considerations.
Reorganizations. In the event of mergers or reorganizations with other
public or private collective investment entities, including investment companies
as defined in the 1940 Act, the Fund may issue its shares at net asset value (or
more) to such entities or to their security holders.
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Redemptions. The Fund reserves the right to pay redemptions in kind
with portfolio securities in lieu of cash. In accordance with its election
pursuant to Rule 18f-1 under the 1940 Act, the Fund may limit the amount of
redemption proceeds paid in cash. Although it has no present intention to do so,
the Fund may, under unusual circumstances, limit redemptions in cash with
respect to each shareholder during any ninety-day period to the lesser of (i)
$250,000 or (ii) 1% of the net asset value of the Fund at the beginning of such
period. In connection with any redemptions paid in kind with portfolio
securities, brokerage and other costs may be incurred by the redeeming
shareholder in the sale of the securities received.
Systematic Withdrawal Plan. A shareholder who owns noncertificated
Class A or Class S shares with a value of $5,000 or more, or Class B or Class C
shares with a value of $10,000 or more, may elect, by participating in the
Fund's Systematic Withdrawal Plan, to have periodic checks issued for specified
amounts. These amounts may not be less than certain minimums, depending on the
class of shares held. The Plan provides that all income dividends and capital
gains distributions of the Fund shall be credited to participating shareholders
in additional shares of the Fund. Thus, the withdrawal amounts paid can only be
realized by redeeming shares of the Fund under the Plan. To the extent such
amounts paid exceed dividends and distributions from the Fund, a shareholder's
investment will decrease and may eventually be exhausted.
In the case of shares otherwise subject to contingent deferred sales
charges, no such charges will be imposed on withdrawals of up to 8% annually of
either (a) the value, at the time the Systematic Withdrawal Plan is initiated,
of the shares then in the account or (b) the value, at the time of a withdrawal,
of the same number of shares as in the account when the Systematic Withdrawal
Plan was initiated, whichever is higher.
Expenses of the Systematic Withdrawal Plan are borne by the Fund. A
participating shareholder may withdraw from the Systematic Withdrawal Plan, and
the Fund may terminate the Systematic Withdrawal Plan at any time on written
notice. Purchase of additional shares while a shareholder is receiving payments
under a Systematic Withdrawal Plan is ordinarily disadvantageous because of
duplicative sales charges. For this reason, a shareholder may not participate in
the Investamatic Program (see "Your Account--Investor Services--Investamatic
Program" in the Fund's Prospectus) and the Systematic Withdrawal Plan at the
same time.
Request to Dealer to Repurchase. For the convenience of shareholders,
the Fund has authorized the Distributor as its agent to accept orders from
dealers by wire or telephone for the repurchase of shares by the Distributor
from the dealer. The Fund may revoke or suspend this authorization at any time.
The repurchase price is the net asset value for the applicable shares next
determined following the time at which the shares are offered for repurchase by
the dealer to the Distributor. The dealer is responsible for promptly
transmitting a shareholder's order to the Distributor.
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Signature Guarantees. Signature guarantees are required for, among
other things: (1) written requests for redemptions for more than $100,000; (2)
written requests for redemptions for any amount if the proceeds are transmitted
to other than the current address of record (unchanged in the past 30 days); (3)
written requests for redemptions for any amount submitted by corporations and
certain fiduciaries and other intermediaries; and (4) requests to transfer the
registration of shares to another owner. Signatures must be guaranteed by a
bank, a member firm of a national stock exchange, or other eligible guarantor
institution. The Transfer Agent will not accept guarantees (or notarizations)
from notaries public. The above requirements may be waived in certain instances.
Dishonored Checks. If a purchaser's check is not honored for its full
amount, the purchaser could be subject to additional charges to cover collection
costs and any investment loss, and the purchase may be canceled.
Processing Charges. Purchases and redemptions processed through
securities dealers may be subject to processing charges imposed by the
securities dealer in addition to sales charges that may be imposed by the Fund
or the Distributor.
SHAREHOLDER ACCOUNTS
General information on shareholder accounts is included in the Fund's
Prospectus under "Your Account." The following supplements that information.
Maintenance Fees and Involuntary Redemption. Because of the relatively
high cost of maintaining small shareholder accounts, the Fund reserves the right
to redeem at its option any shareholder account which remains below $1,500 for a
period of 60 days after notice is mailed to the applicable shareholder, or to
impose a maintenance fee on such account after 60 days' notice. Such
involuntarily redemptions will be subject to applicable sales charges, if any.
The Fund may increase such minimum account value above such amount in the future
after notice to affected shareholders. Involuntarily redeemed shares will be
priced at the net asset value on the date fixed for redemption by the Fund, and
the proceeds of the redemption will be mailed to the affected shareholder at the
address of record. Currently, the maintenance fee is $18 annually, which is paid
to the Transfer Agent. The fee does not apply to certain retirement accounts or
if the shareholder has more than an aggregate $50,000 invested in the Fund and
other Eligible Funds combined. Imposition of a maintenance fee on a small
account could, over time, exhaust the assets of such account.
To cover the cost of additional compliance administration, a $20 fee
will be charged against any shareholder account that has been determined to be
subject to escheat under applicable state laws.
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The Fund may not suspend the right of redemption or postpone the date
of payment of redemption proceeds for more than seven days, except that (a) it
may elect to suspend the redemption of shares or postpone the date of payment of
redemption proceeds: (1) during any period that the NYSE is closed (other than
customary weekend and holiday closings) or trading on the NYSE is restricted;
(2) during any period in which an emergency exists as a result of which disposal
of portfolio securities is not reasonably practicable or it is not reasonably
practicable to fairly determine the Fund's net asset values; or (3) during such
other periods as the Securities and Exchange Commission (the "SEC") may by order
permit for the protection of investors; and (b) the payment of redemption
proceeds may be postponed as otherwise provided under "Purchase and Redemption
of Shares" in this Statement of Additional Information.
The Open Account System. Under the Open Account System full and
fractional shares of the Fund owned by shareholders are credited to their
accounts by the Transfer Agent, State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110. Certificates representing Class B
or Class C shares will not be issued, while certificates representing Class A or
Class S shares will only be issued if specifically requested in writing and, in
any case, will only be issued for full shares, with any fractional shares to be
carried on the shareholder's account. Shareholders will receive periodic
statements of transactions in their accounts.
The Fund's Open Account System provides the following options:
1. Additional purchases of shares of the Fund may be made through
dealers, by wire or by mailing a check payable to "State
Street Research Funds" under the terms set forth above under
"Purchase and Redemption of Shares" in this Statement of
Additional Information.
2. The following methods of receiving dividends from investment
income and distributions from capital gains generally are
available:
(a) All income dividends and capital gains distributions
reinvested in additional shares of the Fund.
(b) All income dividends and capital gains distributions
in cash.
(c) All income dividends and capital gains distributions
invested in any one available Eligible Fund
designated by the shareholder as described below. See
"--Dividend Allocation Plan" herein.
Dividend and distribution selections should be made on the Application
accompanying the initial investment. If no selection is indicated on the
Application, that account will be
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automatically coded for reinvestment of all dividends and distributions in
additional shares of the same class of the Fund. Selections may be changed at
any time by telephone or written notice to the Service Center. Dividends and
distributions are reinvested at net asset value without a sales charge.
Exchange Privileges. Shareholders of the Fund may exchange their shares
for available shares with corresponding characteristics of any of the other
Eligible Funds at any time on the basis of the relative net asset values of the
respective shares to be exchanged, subject to compliance with applicable
securities laws. Shareholders of any other Eligible Fund may similarly exchange
their shares for Fund shares with corresponding characteristics. Prior to making
an exchange, shareholders should obtain the Prospectus of the Eligible Fund into
which they are exchanging. Under the Direct Program, subject to certain
conditions, shareholders may make arrangements for regular exchanges from the
Fund into other Eligible Funds. To effect an exchange, Class A, Class B and
Class C shares may be redeemed without the payment of any contingent deferred
sales charge that might otherwise be due upon an ordinary redemption of such
shares. The State Street Research Money Market Fund issues Class E shares which
are sold without any sales charge. Exchanges of State Street Research Money
Market Fund Class E shares into Class A shares of the Fund or any other Eligible
Fund are subject to the initial sales charge or contingent deferred sales charge
applicable to an initial investment in such Class A shares, unless a prior Class
A sales charge has been paid directly or indirectly with respect to the shares
redeemed. For purposes of computing the contingent deferred sales charge that
may be payable upon disposition of any acquired Class A, Class B and Class C
shares, the holding period of the redeemed shares is "tacked" to the holding
period of any acquired shares. No exchange transaction fee is currently imposed
on any exchange.
Shares of the Fund may also be acquired or redeemed in exchange for
shares of the Summit Cash Reserves Fund ("Summit Cash Reserves") by customers of
Merrill Lynch, Pierce, Fenner & Smith Incorporated (subject to completion of
steps necessary to implement the program). The Fund and Summit Cash Reserves are
related mutual funds for purposes of investment and investor services. Upon the
acquisition of shares of Summit Cash Reserves by exchange for redeemed shares of
the Fund, (a) no sales charge is imposed by Summit Cash Reserves, (b) no
contingent deferred sales charge is imposed by the Fund on the Fund shares
redeemed, and (c) any applicable holding period of the Fund shares redeemed is
"tolled," that is, the holding period clock stops running pending further
transactions. Upon the acquisition of shares of the Fund by exchange for
redeemed shares of Summit Cash Reserves, (a) the acquisition of Class A shares
shall be subject to the initial sales charges or contingent deferred sales
charges applicable to an initial investment in such Class A shares, unless a
prior Class A sales charge has been paid indirectly, and (b) the acquisition of
Class B or Class C shares of the Fund shall restart any holding period
previously tolled, or shall be subject to the contingent deferred sales charge
applicable to an initial investment in such shares.
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The exchange privilege may be terminated or suspended or its terms
changed at any time, subject, if required under applicable regulations, to 60
days' prior notice. New accounts established for investments upon exchange from
an existing account in another fund will have the same telephone privileges with
respect to the Fund (see "Your Account--Account Policies--Telephone Requests" in
the Fund's Prospectus and "--Telephone Privileges," below) as the existing
account unless the Service Center is instructed otherwise. Related
administrative policies and procedures may also be adopted with regard to a
series of exchanges, street name accounts, sponsored arrangements and other
matters.
The exchange privilege is not designed for use in connection with
short-term trading or market timing strategies. To protect the interests of
shareholders, the Fund reserves the right to temporarily or permanently
terminate the exchange privilege for any person who makes more than six
exchanges out of or into the Fund per calendar year. Accounts under common
ownership or control, including accounts with the same taxpayer identification
number, may be aggregated for purposes of the six exchange limit.
Notwithstanding the six exchange limit, the Fund reserves the right to refuse
exchanges by any person or group if, in the Investment Manager's judgment, the
Fund would be unable to invest effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely affected.
Exchanges may be restricted or refused if the Fund receives or anticipates
simultaneous orders affecting significant portions of the Fund's assets. In
particular, a pattern of exchanges that coincides with a "market timing"
strategy may be disruptive to the Fund. The Fund may impose these restrictions
at any time. The exchange limit may be modified for accounts in certain
institutional retirement plans because of plan exchange limits, Department of
Labor regulations or administrative and other considerations. Subject to the
foregoing, if an exchange request in good order is received by the Service
Center and delivered by the Service Center to the Transfer Agent by 12 noon
Boston time on any business day, the exchange usually will occur that day. For
further information regarding the exchange privilege, shareholders should
contact the Service Center.
Reinvestment Privilege. A shareholder of the Fund who has redeemed
shares or had shares repurchased at his or her request may reinvest all or any
portion of the proceeds (plus that amount necessary to acquire a fractional
share to round off his or her reinvestment to full shares) in shares, of the
same class as the shares redeemed, of the Fund or any other Eligible Fund at net
asset value and without subjecting the reinvestment to an initial sales charge,
provided such reinvestment is made within 120 calendar days after a redemption
or repurchase. Upon such reinvestment, the shareholder will be credited with any
contingent deferred sales charge previously charged with respect to the amount
reinvested. The redemption of shares is, for federal income tax purposes, a sale
on which the shareholder may realize a gain or loss. If a redemption at a loss
is followed by a reinvestment within 30 days, the transaction may be a "wash
sale" resulting in a denial of the loss for federal income tax purposes.
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Any reinvestment pursuant to the reinvestment privilege will be subject
to any applicable minimum account standards imposed by the fund into which the
reinvestment is made. Shares are sold to a reinvesting shareholder at the net
asset value thereof next determined following timely receipt by the Service
Center of such shareholder's written purchase request and delivery of the
request by the Service Center to the Transfer Agent. A shareholder may exercise
this reinvestment privilege only once per 12-month period with respect to his or
her shares of the Fund.
Dividend Allocation Plan. The Dividend Allocation Plan allows
shareholders to elect to have all their dividends and any other distributions
from the Fund or any Eligible Fund automatically invested at net asset value in
one other such Eligible Fund designated by the shareholder, provided the account
into which the dividends and distributions are directed is initially funded with
the requisite minimum amount.
Telephone Privileges. A shareholder with telephone privileges that are
offered with his or her Account (see "Your Account--Account Policies--Telephone
Requests") is deemed to authorize the Service Center and the Transfer Agent to:
(1) act upon the telephone instructions of any person purporting to be the
shareholder or the shareholder's financial professional to redeem or exchange,
shares from any account; and (2) honor any written instructions for a change of
address regardless of whether such request is accompanied by a signature
guarantee. All telephone calls will be recorded. Neither the Fund, the other
Eligible Funds, the Transfer Agent, the Investment Manager nor the Distributor
will be liable for any loss, expense or cost arising out of any request,
including any fraudulent or unauthorized requests. Shareholders assume the risk
to the full extent of their accounts that telephone requests may be
unauthorized. Reasonable procedures will be followed to confirm that
instructions communicated by telephone are genuine. The shareholder will not be
liable for any losses arising from unauthorized or fraudulent instructions if
such procedures are not followed.
Alternative Means of Contacting the Fund. It is unlikely, during
periods of extraordinary market conditions, that a shareholder may have
difficulty in reaching the Service Center. In that event, however, the
shareholder should contact the Service Center at 1-800-562-0032, 1-617-357-7800
or otherwise at its main office at One Financial Center, Boston, Massachusetts
02111-2690.
NET ASSET VALUE
The net asset value of the shares of the Fund is determined once daily
as of the close of regular trading on the NYSE, ordinarily 4 P.M. New York City
time, Monday through Friday, on each day during which the NYSE is open for
unrestricted trading. The NYSE is currently closed on New Year's Day, Martin
Luther King, Jr. Day, Presidents Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day.
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The net asset value per share of the Fund is computed by dividing the
sum of the value of the securities held by the Fund plus any cash or other
assets minus all liabilities by the total number of outstanding shares of the
Fund at such time. Any expenses, except for extraordinary or nonrecurring
expenses, borne by the Fund, including the investment management fee payable to
the Investment Manager, are accrued daily.
In determining the values of portfolio assets as provided below, the
Trustees utilize one or more pricing services in lieu of market quotations for
certain securities which are not readily available on a daily basis. Such
services utilize information with respect to market transactions, quotations
from dealers and various relationships among securities in determining value and
may provide prices determined as of times prior to the close of the NYSE.
In general, securities are valued as follows. Securities which are
listed or traded on the New York or American Stock Exchange are valued at the
price of the last quoted sale on the respective exchange for that day.
Securities which are listed or traded on a national securities exchange or
exchanges, but not on the New York or American Stock Exchange, are valued at the
price of the last quoted sale on the exchange for that day prior to the close of
the NYSE. Securities not listed on any national securities exchange which are
traded "over the counter" and for which quotations are available on the National
Association of Securities Dealers, Inc.'s (the "NASD") NASDAQ System are valued
at the closing price supplied through such system for that day at the close of
the NYSE. Other securities are, in general, valued at the mean of the bid and
asked quotations last quoted prior to the close of the NYSE if there are market
quotations readily available, or in the absence of such market quotations, then
at the fair value thereof as determined by or under authority of the Trustees of
the Trust with the use of such pricing services as may be deemed appropriate or
methodologies approved by the Trustees.
The Trustees have authorized the use of the amortized cost method to
value short-term debt instruments issued with a maturity of one year or less and
having a remaining maturity of 60 days or less when the value obtained is fair
value, provided that during any period in which more than 25% of the Fund's
total assets is invested in short-term debt securities the current market value
of such securities will be used in calculating net asset value per share in lieu
of the amortized cost method. Under the amortized cost method of valuation, the
security is initially valued at cost on the date of purchase (or in the case of
short-term debt instruments purchased with more than 60 days remaining to
maturity, the market value on the 61st day prior to maturity), and thereafter a
constant amortization to maturity of any discount or premium is assumed
regardless of the impact of fluctuating interest rates on the market value of
the security.
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PORTFOLIO TRANSACTIONS
Portfolio Turnover
The Fund's portfolio turnover rate is determined by dividing the lesser
of securities purchases or sales for a year by the monthly average value of
securities held by the Fund (excluding, for purposes of this determination,
securities the maturities of which as of the time of their acquisition were one
year or less). The Fund's portfolio turnover rates for the fiscal years ended
December 31, 1997 and 1996 were 258.99% and 237.85%, respectively.
Brokerage Allocation
The Investment Manager's policy is to seek for its clients, including
the Fund, what in the Investment Manager's judgment will be the best overall
execution of purchase or sale orders and the most favorable net prices in
securities transactions consistent with its judgment as to the business
qualifications of the various broker or dealer firms with whom the Investment
Manager may do business, and the Investment Manager may not necessarily choose
the broker offering the lowest available commission rate. Decisions with respect
to the market where the transaction is to be completed, to the form of
transaction (whether principal or agency), and to the allocation of orders among
brokers or dealers are made in accordance with this policy. In selecting brokers
or dealers to effect portfolio transactions, consideration is given to their
proven integrity and financial responsibility, their demonstrated execution
experience and capabilities both generally and with respect to particular
markets or securities, the competitiveness of their commission rates in agency
transactions (and their net prices in principal transactions), their willingness
to commit capital, and their clearance and settlement capability. The Investment
Manager makes every effort to keep informed of commission rate structures and
prevalent bid/ask spread characteristics of the markets and securities in which
transactions for the Fund occur. Against this background, the Investment Manager
evaluates the reasonableness of a commission or a net price with respect to a
particular transaction by considering such factors as difficulty of execution or
security positioning by the executing firm. The Investment Manager may or may
not solicit competitive bids based on its judgment of the expected benefit or
harm to the execution process for that transaction.
When it appears that a number of firms could satisfy the required
standards in respect of a particular transaction, consideration may also be
given to services other than execution services which certain of such firms have
provided in the past or may provide in the future. Negotiated commission rates
and prices, however, are based upon the Investment Manager's judgment of the
rate which reflects the execution requirements of the transaction without regard
to whether the broker provides services in addition to execution. Among such
other services are the supplying of supplemental investment research; general
economic, political and business information; analytical and statistical data;
relevant market information, quotation equipment and services; reports and
information about specific companies, industries and
39
<PAGE>
securities; purchase and sale recommendations for stocks and bonds; portfolio
strategy services; historical statistical information; market data services
providing information on specific issues and prices; financial publications;
proxy voting data and analysis services; technical analysis of various aspects
of the securities markets, including technical charts; computer hardware used
for brokerage and research purposes; computer software and databases (including
those used for portfolio analysis and modeling in conjunction with certain
trading systems and including software providing investment personnel with
efficient access to current and historical data from a variety of internal and
external sources) and portfolio evaluation services and relative performance of
accounts. Certain of the nonexecution services provided by broker-dealers may in
turn be obtained by the broker-dealers from third parties who are paid for such
services by the broker-dealers.
In the case of the Fund and other registered investment companies
advised by the Investment Manager or its affiliates, the above services may
include data relating to performance, expenses and fees of those investment
companies and other investment companies; this information is used by the
Trustees or Directors of the investment companies to fulfill their
responsibility to oversee the quality of the Investment Manager's advisory
contracts between the investment companies and the Investment Manager. The
Investment Manager considers these investment company services only in
connection with the execution of transactions on behalf of its investment
company clients and not its other clients.
The Investment Manager regularly reviews and evaluates the services
furnished by broker-dealers. Among other measures, the Investment Manager's
investment management personnel seek to evaluate the quality of research and
other services received, and the results of this effort are made available to
the equity trading department, which sometimes uses this information as
consideration in the selection of brokers to execute portfolio transactions.
Some services furnished by broker-dealers may be used for research and
investment decision-making purposes, and also for marketing or administrative
purposes. Under these circumstances, the Investment Manager allocates the cost
of such services to determine the appropriate proportion of the cost which is
allocable to purposes other than research or investment decision-making and the
Investment Manager pays for that portion directly from its
40
<PAGE>
own funds. Some research and execution services may benefit the Investment
Manager's clients as a whole, while others may benefit a specific segment of
clients. Not all such services will necessarily be used exclusively in
connection with the accounts which pay the commissions to the broker-dealer
producing the services.
The Investment Manager has no fixed agreements or understandings with
any broker-dealer as to the amount of brokerage business which the firm may
expect to receive for services supplied to the Investment Manager or otherwise.
There may be, however, understandings with certain firms that in order for such
firms to be able to continuously supply certain services, they need to receive
allocation of a specified amount of brokerage business. These understandings are
honored to the extent possible in accordance with the policies set forth above.
It is not the Investment Manager's policy to intentionally pay a firm a
brokerage commission higher than that which another firm would charge for
handling the same transaction in recognition of services (other than execution
services) provided. However, the Investment Manager is aware that this is an
area where differences of opinion as to fact and circumstances may exist, and in
such circumstances, if any, the Investment Manager relies on the provisions of
Section 28(e) of the Securities Exchange Act of 1934, to the extent applicable.
Brokerage commissions paid by the Fund in secondary trading during the last
three fiscal years were as follows: 1997, $1,122,012, 1996, $905,310 and 1995,
$981,788. The Investment Manager believes the amount of brokerage commissions
paid by the Fund during the fiscal year ended December 31, 1997 was
significantly higher than during the previous fiscal year because of increased
levels of assets and increased market volatility, and the Investment Manager's
efforts to restructure the portfolio and to take advantage of the resulting
opportunities to purchase certain securities at attractive prices and to sell
certain securities in order to realize gains.
During and at the end of its most recent fiscal year, the Fund did not
hold in its portfolio securities of any entity that might be deemed to be a
regular broker-dealer of the Fund as defined under the 1940 Act.
In the case of the purchase of fixed income securities in underwriting
transactions, the Investment Manager follows any instructions received from its
clients as to the allocation of new issue discounts, selling commissions and
designations to brokers or dealers which provide the client with research,
performance evaluation, master trustee and other services. In the absence of
instructions from the client, the Investment Manager may make such allocations
to broker-dealers which have provided the Investment Manager with research and
brokerage services.
When more than one client of the Investment Manager is seeking to buy
or sell the same security, the sale or purchase is carried out in a manner which
is considered fair and
41
<PAGE>
equitable to all accounts. In allocating investments among various clients
(including in what sequence orders for trades are placed), the Investment
Manager will use its best business judgment and will take into account such
factors as the investment objectives of the clients, the amount of investment
funds available to each, the amount already committed for each client to a
specific investment and the relative risks of the investments, all in order to
provide on balance a fair and equitable result to each client over time.
Although sharing in large transactions may sometimes affect price or volume of
shares acquired or sold, overall it is believed there may be an advantage in
execution. The Investment Manager may follow the practice of grouping orders of
various clients for execution to get the benefit of lower prices or commission
rates. In certain cases where the aggregate order may be executed in a series of
transactions at various prices, the transactions are allocated as to amount and
price in a manner considered equitable to each so that each receives, to the
extent practicable, the average price of such transactions. Exceptions may be
made based on such factors as the size of the account and the size of the trade.
For example, the Investment Manager may not aggregate trades where it believes
that it is in the best interests of clients not to do so, including situations
where aggregation might result in a large number of small transactions with
consequent increased custodial and other transactional costs which may
disproportionately impact smaller accounts. Such disaggregation, depending on
the circumstances, may or may not result in such accounts receiving more or less
favorable execution relative to other clients.
CERTAIN TAX MATTERS
Federal Income Taxation of Fund--in General
The Fund intends to qualify and elect to be treated each taxable year
as a "regulated investment company" under Subchapter M of the Internal Revenue
Code of 1986, as amended (the "Code"), although it cannot give complete
assurance that it will do so. Accordingly, the Fund must, among other things,
(a) derive at least 90% of its gross income in each taxable year from dividends,
interest, payments with respect to securities loans, gains from the sale or
other disposition of stock, 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 (the "90% test"); (b) satisfy certain diversification
requirements; and (c) in order to be entitled to utilize the dividends paid
deduction, distribute annually at least 90% of its investment company taxable
income (determined without regard to the deduction for dividends paid).
If the Fund should fail to qualify as a regulated investment company in
any year, it would lose the beneficial tax treatment accorded regulated
investment companies under Subchapter M of the Code and all of its taxable
income would be subject to tax at regular corporate rates without any deduction
for distributions to shareholders, and such distributions will be taxable to
shareholders as ordinary income to the extent of the Fund's current or
42
<PAGE>
accumulated earnings and profits. Also, the shareholders, if they received a
distribution in excess of current or accumulated earnings and profits, would
receive a return of capital that would reduce the basis of their shares of the
Fund to the extent thereof. Any distribution in excess of a shareholder's basis
in the shareholder's shares would be taxable as gain realized from the sale of
such shares.
The Fund will be liable for a nondeductible 4% excise tax on amounts
not distributed (or deemed distributed) on a timely basis in accordance with a
calendar year distribution requirement. To avoid the tax, during each calendar
year the Fund must distribute (or be deemed to have distributed) an amount equal
to at least 98% of the sum of its ordinary income (not taking into account any
capital gains or losses) for the calendar year, and its capital gain net income
for the 12-month period ending on October 31, in addition to any undistributed
portion of the respective balances from the prior year. For that purpose, any
income or gain retained by the Fund that is subject to corporate tax will be
considered to have been distributed by year-end. The Fund intends to make
sufficient distributions to avoid this 4% excise tax.
Federal Income Taxation of the Fund's Investments
Original Issue Discount. For federal income tax purposes, debt
securities purchased by the Fund may be treated as having original issue
discount. Original issue discount represents interest for federal income tax
purposes and can generally be defined as the excess of the stated redemption
price at maturity of a debt obligation over the issue price. Original issue
discount is treated for federal income tax purposes as income earned by the
Fund, whether or not any income is actually received, and therefore is subject
to the distribution requirements of the Code. Generally, the amount of original
issue discount is determined on the basis of a constant yield to maturity which
takes into account the compounding of accrued interest. Under section 1286 of
the Code, an investment in a stripped bond or stripped coupon may result in
original issue discount.
Debt securities may be purchased by the Fund at a discount that exceeds
the original issue discount plus previously accrued original issue discount
remaining on the securities, if any, at the time the Fund purchases the
securities. This additional discount represents market discount for federal
income tax purposes. In the case of any debt security issued after July 18,
1984, having a fixed maturity date of more than one year from the date of issue
and having market discount, the gain realized on disposition will be treated as
interest to the extent it does not exceed the accrued market discount on the
security (unless the Fund elects to include such accrued market discount in
income in the tax year to which it is attributable). Generally, market discount
is accrued on a daily basis. The Fund may be required to capitalize, rather than
deduct currently, part or all of any direct interest expense incurred or
continued to purchase or carry any debt security having market discount, unless
the Fund makes the election to include market discount currently. Because the
Fund must include original issue discount in income, it will be more difficult
for the Fund to make the distributions required for the Fund to
43
<PAGE>
maintain its status as a regulated investment company under Subchapter M of the
Code or to avoid the 4% excise tax described above.
Options and Futures Transactions. Certain of the Fund's investments may
be subject to provisions of the Code that (i) require inclusion of unrealized
gains or losses in the Fund's income for purposes of the 90% test, the excise
tax and the distribution requirements applicable to regulated investment
companies; (ii) defer recognition of realized losses; and (iii) characterize
both realized and unrealized gain or loss as short-term, medium-term or
long-term gain or loss. Such provisions generally apply to, among other
investments, options on debt securities, indices on securities and futures
contracts.
Federal Income Taxation of Shareholders
Dividends paid by the Fund may be eligible for the 70%
dividends-received deduction for corporations. The percentage of the Fund's
dividends eligible for such tax treatment may be less than 100% to the extent
that less than 100% of the Fund's gross income may be from qualifying dividends
of domestic corporations. Any dividend declared in October, November or December
and made payable to shareholders of record in any such month is treated as
received by such shareholder on December 31, provided that the Fund pays the
dividend during January of the following calendar year.
Distributions by the Fund can result in a reduction in the fair market
value of the Fund's shares. Should a distribution reduce the fair market value
below a shareholder's cost basis, such distribution nevertheless may be taxable
to the shareholder as ordinary income or capital gain, even though, from an
investment standpoint, it may constitute a partial return of capital. In
particular, investors should be careful to consider the tax implications of
buying shares just prior to a taxable distribution. The price of shares
purchased at that time includes the amount of any forthcoming distribution.
Those investors purchasing shares just prior to a taxable distribution will then
receive a return of investment upon distribution which will nevertheless be
taxable to them.
DISTRIBUTION OF SHARES OF THE FUND
The Trust has entered into a Distribution Agreement with State Street
Research Investment Services, Inc., as Distributor, whereby the Distributor acts
as agent to sell and distribute shares of the Fund. Shares of the Fund are sold
through dealers who have entered into sales agreements with the Distributor. The
Distributor distributes shares of the Fund on a continuous basis at an offering
price which is based on the net asset value per share of the Fund plus (subject
to certain exceptions) a sales charge which, at the election of the investor,
may be imposed (i) at the time of purchase (the Class A shares) or (ii) on a
deferred basis
44
<PAGE>
(Class B and Class C shares). The Distributor may reallow all or portions of
such sales charges as concessions to dealers.
Total sales charges on Class A shares paid to the Distributor for the
last three fiscal years were as follows: 1997, $129,131; 1996, $275,526; and
1995, $26,227.
For the same periods, the Distributor retained the following amounts
after reallowance of concessions to dealers: 1997, $23,824; 1996, $35,003; and
1995, $3,476.
The differences in the price at which the Fund's Class A shares are
offered due to scheduled variations in sales charges, as described in the Fund's
Prospectus, result from cost savings inherent in economies of scale. Management
believes that the cost of sales efforts of the Distributor and broker-dealers
tends to decrease as the size of purchases increases, or does not involve any
incremental sales expenses as in the case of, for example, exchanges,
reinvestments or dividend investments at net asset value. Similarly, no
significant sales effort is necessary for sales of shares at net asset value to
certain Directors, Trustees, officers, employees, their relatives and other
persons directly or indirectly related to the Fund or associated entities. Where
shares of the Fund are offered at a reduced sales charge or without a sales
charge pursuant to sponsored arrangements, managed fee-based programs and
so-called "mutual fund supermarkets," among other programs, the amount of the
sales charge reduction will similarly reflect the anticipated reduction in sales
expenses associated with such arrangements. The reductions in sales expenses,
and therefore the reduction in sales charges, will vary depending on factors
such as the size and other characteristics of the organization or program, and
the nature of its membership or the participants. The Fund reserves the right to
make variations in, or eliminate, sales charges at any time or to revise the
terms of or to suspend or discontinue sales pursuant to sponsored arrangements
or similar programs at any time.
On any sale of Class A shares to a single investor in the amount of
$1,000,000 or more, the Distributor will pay the authorized securities dealer
making such sale a commission based on the aggregate of such sales. Such
commission also is payable to authorized securities dealers upon sales of Class
A shares made pursuant to a Letter of Intent to purchase shares having a net
asset value of $1,000,000 or more. Shares sold with such commissions payable are
subject to a one-year contingent deferred sales charge of 1.00% on any portion
of such shares redeemed within one year following their sale. After a particular
purchase of Class A shares is made under the Letter of Intent, the commission
will be paid only in respect of that particular purchase of shares. If the
Letter of Intent is not completed, the commission paid will be deducted from any
discounts or commissions otherwise payable to such dealer in respect of shares
actually sold. If an investor is eligible to purchase shares at net asset value
on account of the Right of Accumulation, the commission will be paid only in
respect of the incremental purchase at net asset value.
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<PAGE>
For the periods shown below, the Distributor received contingent
deferred sales charges upon redemption of Class A, Class B and Class C shares of
the Fund and paid initial commissions to securities dealers for sales of such
Class A, Class B and Class C shares as follows:
<TABLE>
<CAPTION>
Fiscal Year Fiscal Year Fiscal Year
Ended December 31, 1997 Ended December 31, 1996 Ended December 31, 1995
----------------------- ----------------------- -----------------------
Contingent Commissions Contingent Commissions Contingent Commissions
Deferred Paid to Deferred Paid to Deferred Paid to
Sales Charges Dealers Sales Charges Dealers Sales Charges Dealers
------------- ---------- ------------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Class A $ 0 $112,609 $ 0 $240,523 $ 0 $ 22,751
Class B $66,560 $365,912 $36,816 $737,511 $18,143 $306,316
Class C $ 508 $ 3,969 $ 250 $ 32,916 $ 557 $ 16,698
</TABLE>
The Fund has adopted a "Plan of Distribution Pursuant to Rule 12b-1"
(the "Distribution Plan") under which the Fund may engage, directly or
indirectly, in financing any activities primarily intended to result in the sale
of Class A, Class B and Class C shares, including, but not limited to, (1) the
payment of commissions and/or reimbursement to underwriters, securities dealers
and others engaged in the sale of shares, including payments to the Distributor
to be used to pay commissions and/or reimbursement to securities dealers (which
securities dealers may be affiliates of the Distributor) engaged in the
distribution and marketing of shares and furnishing ongoing assistance to
investors, (2) reimbursement of direct out-of-pocket expenditures incurred by
the Distributor in connection with the distribution and marketing of shares and
the servicing of investor accounts including expenses relating to the
formulation and implementation of marketing strategies and promotional
activities such as direct mail promotions and television, radio, newspaper,
magazine and other mass media advertising, the preparation, printing and
distribution of Prospectuses of the Fund and reports for recipients other than
existing shareholders of the Fund, and obtaining such information, analyses and
reports with respect to marketing and promotional activities and investor
accounts as the Fund may, from time to time, deem advisable, and (3)
reimbursement of expenses incurred by the Distributor in connection with the
servicing of shareholder accounts including payments to securities dealers and
others in consideration of the provision of personal service to investors and/or
the maintenance or servicing of shareholder accounts and expenses associated
with the provision of personal service by the Distributor directly to investors.
In addition, the Distribution Plan is deemed to authorize the Distributor and
the Investment Manager to make payments out of general profits, revenues or
other sources to underwriters, securities dealers and others in connection with
sales of shares, to the extent, if any, that such payments may be deemed to be
within the scope of Rule 12b-1 under the 1940 Act.
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<PAGE>
Some or all of the service fees are used to pay or reimburse dealers
(including dealers that are affiliates of the Distributor) or others for
personal services and/or the maintenance of shareholder accounts. A portion of
any initial commission paid to dealers for the sale of shares of the Fund
represents payment for personal services and/or the maintenance or servicing of
shareholder accounts by such dealers. Dealers who have sold Class A shares are
eligible for further reimbursement commencing as of the time of such sale.
Dealers who have sold Class B and Class C shares are eligible for further
reimbursement after the first year during which such shares have been held of
record by such dealer as nominee for its clients (or by such clients directly).
Any service fees received by the Distributor and not allocated to dealers may be
applied by the Distributor in reduction of expenses incurred by it directly for
personal services and the maintenance or servicing of shareholder accounts.
The distribution fees are used primarily to offset initial and ongoing
commissions paid to dealers for selling such shares. Any distribution fees
received by the Distributor and not allocated to dealers may be applied by the
Distributor in connection with sales or marketing efforts, including special
promotional fees and cash and noncash incentives based upon sales by dealers.
The Distributor provides distribution services on behalf of other funds
having distribution plans and receives similar payments from, and incurs similar
expenses on behalf of, such other funds. When expenses of the Distributor cannot
be identified as relating to a specific fund, the Distributor allocates expenses
among the funds in a manner deemed fair and equitable to each fund.
Commissions and other cash and noncash incentives and payments to
dealers, to the extent payable out of the general profits, revenues or other
sources of the Distributor (including the advisory fees paid by the Fund), have
also been authorized pursuant to the Distribution Plan.
The expenditures to be made pursuant to the Distribution Plan may not
exceed (i) with respect to Class A shares, an annual rate of 0.25% of the
average daily value of net assets represented by such Class A shares, and (ii)
with respect to Class B and Class C shares, an annual rate of 0.75% of the
average daily value of the net assets represented by such Class B or Class C
shares (as the case may be) to finance sales or promotion expenses and an annual
rate of 0.25% of the average daily value of the net assets represented by such
Class B or Class C shares (as the case may be) to make payments for personal
services and/or the maintenance or servicing of shareholder accounts. The
distribution and servicing expenses of a particular class will be borne solely
by that class. In addition, a rule of the NASD limits annual expenditures that
the Fund may incur under the Distribution Plan to 1%, of which 0.75% may be used
to pay distribution expenses and 0.25% may be used to pay shareholder service
fees. The NASD rule also limits the aggregate amount that the Fund may pay for
such distribution costs to 6.25% of gross share sales of a class since the
inception of any asset-based
47
<PAGE>
sales charge plus interest at the prime rate plus 1% on unpaid amounts thereof
(less any contingent deferred sales charges). Such limitation does not apply to
shareholder service fees. Payments to the Distributor or to dealers funded under
the Distribution Plan may be discontinued at any time.
The Distributor may pay certain dealers and other intermediaries
additional compensation for sales and administrative services. The Distributor
may provide cash and noncash incentives to intermediaries who, for example, sell
significant amounts of shares or develop particular distribution channels. The
Distributor may compensate dealers with clients who maintain their investments
in the Fund over a period of years. The incentives can include merchandise and
trips to, and attendance at, sales seminars at resorts. The Distributor may pay
for administrative services, such as technological and computer systems support
for the maintenance of pension plan participant records, for subaccounting, and
for distribution through mutual fund supermarkets or similar arrangements.
During the fiscal year ended December 31, 1997, the Fund paid the
Distributor fees under the Distribution Plan and the Distributor used all of
such payments for expenses incurred on behalf of the Fund as follows:
48
<PAGE>
<TABLE>
<CAPTION>
Class A Class B Class C*
------- ------- --------
<S> <C> <C> <C>
Advertising $ 1,102 $ 8,012 $ 5,754
Printing and mailing of prospectuses to
other than current shareholders 332 2,416 1,735
Compensation to dealers 38,918 327,098 27,477
Compensation to sales
personnel 2,332 16,679 12,328
Interest 0 0 0
Carrying or other
financing charges 0 0 0
Other expenses: marketing; general 1,119 8,129 5,852
------- -------- -------
Total fees received $43,803 $362,334 $53,146
======= ======== =======
</TABLE>
- -----------------
* Prior to November 1, 1997, the Fund's current Class C shares were
designated as Class D shares.
No interested Trustee of the Trust has any direct or indirect financial
interest in the operation of the Distribution Plan or any related agreements
thereunder. The Distributor's interest in the Distribution Plan is described
above.
To the extent that the Glass-Steagall Act may be interpreted as
prohibiting banks and other depository institutions from being paid for
performing services under the Distribution Plan, the Fund will make alternative
arrangements for such services for shareholders who acquired shares through such
institutions.
49
<PAGE>
CALCULATION OF PERFORMANCE DATA
From time to time, in advertisements or in communications to
shareholders or prospective investors, the Fund may compare the performance of
its Class A, Class B, Class C or Class S shares to the performance of other
mutual funds with similar investment objectives, to certificates of deposit
and/or to other financial alternatives. The Fund may also compare its
performance to appropriate indices, such as Standard & Poor's 500 Index,
Consumer Price Index and Dow Jones Industrial Average and/or to appropriate
rankings and averages such as those compiled by Lipper Analytical Services,
Inc., Morningstar, Inc., Money Magazine, Business Week, Forbes Magazine, The
Wall Street Journal and Investor's Daily. For example, the performance of the
Fund might be compared to the Lipper Capital Appreciation Funds Index.
The average annual total return ("standard total return") of the Class
A, Class B, Class C and Class S shares of the Fund will be calculated as set
forth below. Total return is computed separately for each class of shares of the
Fund. Performance data for a specified class includes periods prior to the
adoption of class designations on March 16, 1993, when designations were
assigned based on the pricing and Rule 12b-1 fees applicable to shares sold
thereafter. The application of the additional Rule 12b-1 fees, if any, of up to
1% will, for periods after March 16, 1993, adversely affect Fund performance
results. Thus, performance data or rankings for a given class of shares should
be interpreted carefully by investors who hold or may invest in a different
class of shares.
The performance data below reflect Rule 12b-1 fees and, where
applicable, sales charges as follows:
50
<PAGE>
<TABLE>
<CAPTION>
Rule 12b-1 Fees Sales Charges
------------------------------- --------------------------------
Class Amount Period
- ----- ------ ------
<S> <C> <C> <C>
A 0.25% March 16, 1993 to present; Maximum 4.5% sales charge
Fee will reduce performance reflected
for periods after March 16,
1993
B 1.00% March 18, 1993 to present; fee 1- and 5-year periods reflect a 5%
will reduce performance for and a 2% contingent deferred sales
periods after March 18, 1993 charge, respectively
C* 1.00% March 18, 1993 to present; fee 1-year period reflects a 1%
will reduce performance for contingent deferred sales charge
periods after March 18, 1993
S* 0.00% Since commencement of None
operations to present
</TABLE>
- --------------------
* Prior to November 1, 1997, the Fund's current Class C shares were
designated as Class D shares and the Fund's current Class S shares were
designated as Class C shares.
All calculations of performance data in this section reflect the
voluntary measures, if any, by the Fund's affiliates to reduce fees or expenses
relating to the Fund; see "--Accrued Expenses and Recurring Charges" later in
this section.
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<PAGE>
Total Return
The Fund's standard average annual total returns ("standard total
return") of each class of shares were as follows:
Five Years One Year
Ten Years Ended Ended Ended
December 31, 1997 December 31, 1997 December 31, 1997
----------------- ----------------- -----------------
Class A 12.17% 10.42% 5.18%
Class B 12.27% 10.42% 4.56%
Class C* 12.27% 10.61% 8.32%
Class S* 12.81% 11.67% 10.54%
- ----------------
* Prior to November 1, 1997, the Fund's current Class C shares were
designated as Class D shares and the Fund's current Class S shares were
designated as Class C shares.
Standard total return is computed separately for each class of shares
by determining the average annual compounded rates of return over the designated
periods that, if applied to the initial amount invested, would produce the
ending redeemable value in accordance with the following formula:
P(1+T)(n) = ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the designated period
assuming a hypothetical $1,000 payment made at the beginning
of the designated period
The calculation is based on the further assumptions that the highest
applicable initial or contingent deferred sales charge is deducted, and that all
dividends and distributions by the Fund are reinvested at net asset value on the
reinvestment dates during the periods. All accrued expenses and recurring
charges are also taken into account as described later herein.
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<PAGE>
Accrued Expenses and Recurring Charges
Accrued expenses include all recurring charges that are charged to all
shareholder accounts in proportion to the length of the base period. The
standard total return results take sales charges, if applicable, into account,
although the results do not take into account recurring and nonrecurring charges
for optional services which only certain shareholders elect and which involve
nominal fees, such as the $7.50 fee for wire orders.
Accrued expenses do not include the subsidization, if any, by
affiliates of fees or expenses during the subject period. In the absence of such
subsidization, the performance of the Fund would have been lower.
Nonstandardized Total Return
The Fund may provide the above described standard total return results
for Class A, Class B, Class C and Class S shares for periods which end no
earlier than the most recent calendar quarter end and which begin twelve months
before, five years before and ten years before. In addition, the Fund may
provide nonstandardized total return results for differing periods, such as for
the period since the Fund commenced operations in 1960, and/or without taking
sales charges into account. Such nonstandardized total return is computed as
otherwise described under "--Total Return" except the result may or may not be
annualized, and as noted any applicable sales charge may not be taken into
account and therefore not deducted from the hypothetical initial payment of
$1,000. For example, the Fund's nonstandardized total returns for the six months
ended December 31, 1997, without taking sales charges into account, were as
follows:
Class A 4.31%
Class B 4.05%
Class C 3.92%
Class S 4.42%
CUSTODIAN
State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110, is the Trust's custodian. As custodian, State Street Bank
and Trust Company is responsible for, among other things, safeguarding and
controlling the Fund's cash and securities, handling the receipt and delivery of
securities and collecting interest and dividends on the Fund's investments.
State Street Bank and Trust Company is not an affiliate of the Investment
Manager or its affiliates.
53
<PAGE>
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P., One Post Office Square, Boston, Massachusetts
02109, serves as the Trust's independent accountants, providing professional
services including (1) audits of the Fund's annual financial statements, (2)
assistance and consultation in connection with SEC filings and (3) review of the
annual income tax returns filed on behalf of the Fund.
FINANCIAL STATEMENTS
In addition to the reports provided to holders of record on a
semiannual basis, other supplementary financial reports may be made available
from time to time through electronic or other media. Shareholders with
substantial holdings in one or more State Street Research Funds may also receive
reports and other information which reflect or analyze their positions in a
consolidated manner. For more information, call State Street Research Service
Center.
The following financial statements are for the Fund's fiscal year ended
December 31, 1997 and reflect the Fund's class designations prior to November 1,
1997. Information pertaining to Class C and Class D in the financial statements
now pertains to Class S and Class C, respectively.
DOCSC\601146.3
54
<PAGE>
STATE STREET RESEARCH GROWTH FUND
- -------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
- -------------------------------------------------------------------------------
December 31, 1997
- -------------------------------------------------------------------------------
Value
Shares (Note 1)
- ------------------------------------------------------------------------------
COMMON STOCKS 99.3%
BASIC INDUSTRIES 5.6%
FOREST PRODUCT 1.5%
IKON Office Solutions Inc. ......................... 117,500 $ 3,304,687
------------
MACHINERY 3.2%
Tyco International Ltd. ............................ 157,200 7,083,825
------------
METAL & MINING 0.9%
Wyman-Gordon Co.* .................................. 100,000 1,962,500
------------
Total Basic Industries ............................. 12,351,012
------------
CONSUMER CYCLICAL 22.0%
AUTOMOTIVE 2.2%
Budget Group Inc. Cl. A* ........................... 143,700 4,966,631
------------
HOTEL & RESTAURANT 0.5%
Extended Stay America Inc.* ........................ 99,700 1,240,019
------------
RECREATION 5.8%
CBS Corp. .......................................... 114,000 3,355,875
Chancellor Media Corp.* ............................ 72,200 5,387,925
Florida Panthers Holdings Inc. Cl. A* .............. 92,800 1,600,800
International Game Technology Inc. ................. 102,300 2,583,075
------------
12,927,675
------------
RETAIL TRADE 11.5%
Borders Group Inc.* ................................ 77,000 2,411,063
Cendant Corp.* ..................................... 335,232 11,523,615
CVS Corp. .......................................... 38,100 2,440,781
Dayton Hudson Corp. ................................ 37,500 2,531,250
Proffitts Inc.* .................................... 69,600 1,979,250
Safeway Inc.* ...................................... 72,600 4,591,950
------------
25,477,909
------------
TEXTILE & APPAREL 2.0%
Men's Wearhouse, Inc.* ............................. 125,400 4,357,650
------------
Total Consumer Cyclical ............................ 48,969,884
------------
CONSUMER STAPLE 21.9%
BUSINESS SERVICE 8.0%
Apollo Group Inc. Cl. A* ........................... 61,000 2,882,250
Caribiner International Inc.* ...................... 125,000 5,562,500
HBO & Co. .......................................... 65,800 3,158,400
Republic Industries Inc.* .......................... 266,200 6,205,788
------------
17,808,938
------------
AIRPORT 1.1%
Trinity Industries Inc. ............................ 52,800 2,356,200
------------
DRUG 4.9%
Schering-Plough Corp. .............................. 75,600 4,696,650
Warner-Lambert Co. ................................. 49,400 6,125,600
------------
10,822,250
------------
FOOD & BEVERAGE 0.5%
Starbucks Corp.* ................................... 32,100 1,231,838
------------
HOSPITAL SUPPLY 5.0%
Guidant Corp. ...................................... 113,600 7,071,600
Tenet Healthcare Corp.* ............................ 62,400 2,067,000
Trigon Healthcare Inc.* ............................ 78,100 2,040,362
------------
11,178,962
------------
PERSONAL CARE 2.4%
Colgate-Palmolive Co. .............................. 73,000 5,365,500
------------
Total Consumer Staple .............................. 48,763,688
------------
ENERGY 3.8%
OIL 2.9%
Seagull Energy Corp.* .............................. 312,000 6,435,000
------------
OIL SERVICE 0.9%
Ensco International Inc. ........................... 20,000 $ 670,000
Schlumberger Ltd. .................................. 15,500 1,247,750
------------
1,917,750
------------
Total Energy ....................................... 8,352,750
------------
FINANCE 11.1%
BANK 3.5%
BankAmerica Corp. .................................. 56,800 4,146,400
H.F. Ahmanson & Co. ................................ 29,100 1,947,881
NationsBank Corp. .................................. 25,900 1,575,044
------------
7,669,325
------------
FINANCIAL SERVICE 2.2%
LaSalle Partners Inc.* ............................. 47,400 1,688,625
Merrill Lynch & Company Inc. ....................... 43,400 3,165,488
------------
4,854,113
------------
INSURANCE 5.4%
Ace Ltd. ........................................... 22,600 2,180,900
AMBAC Inc. ......................................... 95,800 4,406,800
Hartford Financial Services Group, Inc. ............ 14,600 1,366,012
Travelers Group Inc. ............................... 76,650 4,129,519
------------
12,083,231
------------
Total Finance ...................................... 24,606,669
------------
SCIENCE & TECHNOLOGY 30.8%
COMPUTER SOFTWARE & SERVICE 11.3%
Cisco Systems Inc.* ................................ 67,350 3,754,763
Computer Associates International Inc. ............. 93,300 4,933,237
EMC Corp.* ......................................... 62,800 1,723,075
i2 Technologies Inc.* .............................. 22,000 1,160,500
Microsoft Corp.* ................................... 42,800 5,531,900
Oracle Systems Corp.* .............................. 139,200 3,105,900
PeopleSoft Inc.* ................................... 128,000 4,992,000
------------
25,201,375
------------
ELECTRONIC COMPONENTS 4.8%
Analog Devices Inc.* ............................... 52,400 1,450,825
CHS Electronics Inc.* .............................. 81,250 1,391,406
Microchip Technology Inc.* ......................... 17,300 519,000
Sanmina Corp.* ..................................... 39,100 2,649,025
Texas Instruments Inc. ............................. 105,800 4,761,000
------------
10,771,256
------------
ELECTRONIC EQUIPMENT 7.9%
Advanced Fibre Communications, Inc.* ............... 119,800 3,489,175
Applied Materials Inc.* ............................ 70,400 2,120,800
ASM Lithography Holdings NV* ....................... 7,200 486,000
KLA-Tencor Corp.* .................................. 79,000 3,051,375
Tellabs Inc.* ...................................... 60,800 3,214,800
Teradyne Inc.* ..................................... 159,200 5,094,400
------------
17,456,550
------------
OFFICE EQUIPMENT 6.8%
Compaq Computer Corp. .............................. 54,300 3,064,556
Hewlett-Packard Co. ................................ 45,800 2,862,500
International Business Machines Corp. .............. 29,600 3,095,050
Iomega Corp.* ...................................... 237,000 2,947,688
Sun Microsystems Inc.* ............................. 77,400 3,086,325
------------
15,056,119
------------
Total Science & Technology ......................... 68,485,300
------------
UTILITY 4.1%
TELEPHONE 4.1%
Compania Anonima Nacional Telefonos de Venezuela ADR 139,700 5,815,013
WorldCom Inc.* ..................................... 111,300 3,366,825
------------
9,181,838
------------
Total Utility ...................................... 9,181,838
------------
Total Common Stocks (Cost $184,384,142) ............ 220,711,141
------------
- -------------------------------------------------------------------------------
Principal Maturity
Amount Date
- -------------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS 0.8%
American Express Credit Corp., 6.45% ..... $1,676,000 1/02/1998 1,676,000
------------
Total Short-Term Obligations (Cost $1,676,000) ................. 1,676,000
------------
Total Investments (Cost $186,060,142) - 100.1% .................. 222,387,141
Cash and Other Assets, Less Liabilities - (0.1)% ................ (224,416)
------------
Net Assets - 100.0% ............................................. $222,162,725
============
Federal Income Tax Information:
At December 31, 1997, the net unrealized appreciation of
investments based on cost for Federal income tax purposes
of $185,761,159 was as follows: Aggregate gross unrealized
appreciation for all investments in which there is an
excess of value over tax cost ................................ $ 44,459,292
Aggregate gross unrealized depreciation for all investments in
which there is an excess of tax cost over value ............... (7,833,310)
------------
$ 36,625,982
============
- ------------------------------------------------------------------------------
* Nonincome-producing securities.
ADR stands for American Depositary Receipt, representing ownership of foreign
securities.
The accompanying notes are an integral part of the financial statements.
<PAGE>
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- -------------------------------------------------------------------------------
December 31, 1997
ASSETS
Investments, at value (Cost $186,060,142) (Note 1) .............. $222,387,141
Cash ............................................................ 743
Dividends and interest receivable ............................... 85,009
Receivable for fund shares sold ................................. 4,592
Other assets .................................................... 16,588
------------
222,494,073
LIABILITIES
Accrued management fee (Note 2) ................................. 93,158
Payable for fund shares redeemed ................................ 68,894
Accrued transfer agent and shareholder services
(Note 2) ...................................................... 40,513
Accrued distribution and service fees (Note 4) .................. 38,684
Accrued trustees' fees (Note 2) ................................. 11,516
Other accrued expenses .......................................... 78,583
------------
331,348
------------
NET ASSETS ...................................................... $222,162,725
============
Net Assets consist of:
Unrealized appreciation of investments ........................ $ 36,326,999
Accumulated net realized loss ................................. (2,184,593)
Paid-in capital ............................................... 188,020,319
------------
$222,162,725
============
Net Asset Value and redemption price per share of Class A shares
($16,469,693 / 2,329,447 shares).............................. $7.07
=====
Maximum Offering Price per share of Class A shares ($7.07 / .955) $7.40
=====
Net Asset Value and offering price per share of Class B shares
($36,442,111 / 5,369,794 shares)* ............................. $6.79
=====
Net Asset Value and offering price per share of Class C shares
($4,561,904 / 672,596 shares)* ................................ $6.78
=====
Net Asset Value, offering price and redemption price per share
of Class S shares ($164,689,017 / 23,156,129 shares) .......... $7.11
=====
- ------------------------------------------------------------------------------
*Redemption price per share for Class B and Class C is equal to net asset value
less any applicable contingent deferred sales charge.
The accompanying notes are an integral part of the financial statements.
<PAGE>
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- -------------------------------------------------------------------------------
For the year ended December 31, 1997
INVESTMENT INCOME
Dividends, net of foreign taxes of $215 ...................... $ 1,252,233
Interest (Note 1) ............................................ 812,212
-----------
2,064,445
EXPENSES
Management fee (Note 2) ...................................... 1,125,505
Transfer agent and shareholder services (Note 2) ............. 183,133
Custodian fee ................................................ 141,457
Service fee-Class A (Note 4) ................................. 43,803
Distribution and service fees-Class B (Note 4) ............... 362,334
Distribution and service fees-Class C (Note 4) ............... 53,146
Trustees' fees (Note 2) ...................................... 36,732
Registration fees ............................................ 35,641
Reports to shareholders ...................................... 34,638
Audit fee .................................................... 33,276
Legal fee .................................................... 8,942
Miscellaneous ................................................ 14,130
-----------
2,072,737
-----------
Net investment loss .......................................... (8,292)
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments (Notes 1 and 3) ............. 18,610,792
Net unrealized appreciation of investments ................ 3,969,183
-----------
Net gain on investments ................................... 22,579,975
-----------
Net increase in net assets resulting from operations $22,571,683
===========
The accompanying notes are an integral part of the financial statements.
<PAGE>
- -------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31
----------------------------
1996 1997
- -------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment loss .......................... $ (421,667) $ (8,292)
Net realized gain on investments ............. 25,313,329 18,610,792
Net unrealized appreciation of
investments ................................ 1,008,895 3,969,183
------------ ------------
Net increase resulting from
operations.................................. 25,900,557 22,571,683
------------ ------------
Dividend from net investment income:
Class S .................................... (212,810) --
------------ ------------
Distributions from net realized gains:
Class A .................................... (1,432,492) (1,628,897)
Class B .................................... (3,063,722) (3,791,004)
Class C .................................... (542,316) (470,585)
Class S .................................... (17,829,679) (17,258,290)
------------ ------------
(22,868,209) (23,148,776)
------------ ------------
Net increase (decrease) from fund share
transactions (Note 5) ...................... 24,343,911 (6,291,623)
------------ ------------
Total increase (decrease) in
net assets.................................. 27,163,449 (6,868,716)
NET ASSETS
Beginning of year ............................ 201,867,992 229,031,441
------------ ------------
End of year .................................. $229,031,441 $222,162,725
============ ============
The accompanying notes are an integral part of the financial statements.
<PAGE>
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
December 31, 1997
NOTE 1
State Street Research Growth Fund (the "Fund"), is a series of State Street
Research Growth Trust (the "Trust"), which is a Massachusetts business trust
registered under the Investment Company Act of 1940, as amended, as an open-end
management investment company. The Fund is presently the only series of the
Trust.
The investment objective of the Fund is to provide long-term growth of capital.
In seeking to achieve its investment objective, the Fund invests primarily in
equity securities believed by the Investment Adviser to have better than average
growth potential over the years.
The Fund offers four classes of shares. Before November 1, 1997, Class C shares
were designated Class D and Class S shares were designated Class C. Class A
shares are subject to an initial sales charge of up to 4.50% and pay a service
fee equal to 0.25% of average daily net assets. Class B shares are subject to a
contingent deferred sales charge on certain redemptions made within five years
of purchase and pay annual distribution and service fees of 1.00%. Class B
shares automatically convert into Class A shares (which pay lower ongoing
expenses) at the end of eight years after the issuance of the Class B shares.
Class C shares are subject to a contingent deferred sales charge of 1.00% on any
shares redeemed within one year of their purchase. Class C shares also pay
annual distribution and service fees of 1.00%. Class S shares are only offered
to certain retirement accounts, advisory accounts of State Street Research &
Management Company (the "Adviser"), an indirect wholly owned subsidiary of
Metropolitan Life Insurance Company ("Metropolitan"), and special programs. No
sales charge is imposed at the time of purchase or redemption of Class S shares.
Class S shares do not pay any distribution or service fees. The Fund's expenses
are borne pro-rata by each class, except that each class bears expenses, and has
exclusive voting rights with respect to provisions of the Plan of Distribution,
related specifically to that class. The Trustees declare separate dividends on
each class of shares.
The following significant policies are consistently followed by the Fund in
preparing its financial statements, and such policies are in conformity with
generally accepted accounting principles for investment companies.
A. INVESTMENTS IN SECURITIES
Values for listed securities represent the last sale on national securities
exchanges quoted prior to the close of the New York Stock Exchange. Over-the-
counter securities quoted on the National Association of Securities Dealers
Automated Quotation ("NASDAQ") system are valued at the closing price supplied
through such system. In the absence of recorded sales and for those
over-the-counter securities not quoted on the NASDAQ system, valuations are at
the mean of the closing bid and asked quotations, except for securities that may
be restricted as to public resale, which are valued in accordance with methods
adopted by the Trustees. Security transactions are accounted for on the trade
date (date the order to buy or sell is executed), and dividends declared but not
received are accrued on the ex-dividend date. Interest income is determined on
the accrual basis. Realized gains and losses from security transactions are
reported on the basis of average cost of securities delivered.
B. FEDERAL INCOME TAXES
No provision for Federal income taxes is necessary since the Fund has elected to
qualify under Subchapter M of the Internal Revenue Code and maintains a policy
to distribute all of its taxable income, including net realized capital gains,
within the prescribed time periods. It is also the intention of the Fund to
distribute an amount sufficient to avoid imposition of any Federal Excise Tax
under Section 4982 of the Internal Revenue Code.
C. DIVIDENDS
Dividends from net investment income, if any, are declared and paid or
reinvested semiannually. Net realized capital gains are distributed annually,
unless additional distributions are required for compliance with applicable tax
regulations. For the year ended December 31, 1997, the Fund has designated its
distributions from net realized gains as $3,209,360 from 20% rate gains and
$10,230,173 from 28% rate gains.
Income dividends and capital gain distributions are determined in accordance
with Federal income tax regulations which may differ from generally accepted
accounting principles. The difference is primarily due to the disposition of
securities that have different bases for financial reporting and tax purposes.
D. ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
E. SECURITIES LENDING
The Fund may seek additional income by lending portfolio securities to qualified
institutions. The Fund will receive cash or securities as collateral in an
amount equal to at least 100% of the current market value of any loaned
securities plus accrued interest. If the borrower fails to return the securities
and the value of the collateral has declined during the term of the loan, the
Fund will bear the loss. At December 31, 1997, the value of the securities
loaned and the value of collateral were $9,541,913 and $9,751,601, respectively.
NOTE 2
The Trust and the Adviser have entered into a contract that provides for an
annual fee equal to 0.475% of the Fund's average daily net assets. In
consideration of these fees, the Adviser furnishes the Fund with management,
investment advisory, statistical and research facilities and services. The
Adviser also pays all salaries, rent and certain other expenses of management.
During the year ended December 31, 1997, the fees pursuant to such agreement
amounted to $1,125,505.
State Street Research Service Center, a division of State Street Research
Investment Services, Inc., the Trust's principal underwriter (the
"Distributor"), an indirect wholly owned subsidiary of Metropolitan, provides
certain shareholder services to the Fund such as responding to inquiries and
instructions from investors with respect to the purchase and redemption of
shares of the Fund. In addition, Metropolitan receives a fee for maintenance of
the accounts of certain shareholders who are participants in sponsored
arrangements, employee benefit plans and similar programs or plans, through or
under which shares of the Fund may be purchased. During the year ended December
31, 1997, the amount of such expenses was $44,831.
The fees of the Trustees not currently affiliated with the Adviser amounted to
$36,732 during the year ended December 31, 1997.
NOTE 3
For the year ended December 31, 1997, exclusive of short-term investments and
U.S. Government obligations, purchases and sales of securities aggregated
$585,325,335 and $611,475,453, respectively.
NOTE 4
The Fund has adopted a Plan of Distribution pursuant to Rule 12b-1 (the "Plan")
under the Investment Company Act of 1940, as amended. Under the Plan, the Fund
pays annual service fees to the Distributor at a rate of 0.25% of average daily
net assets for Class A, Class B and Class C shares. In addition, the Fund pays
annual distribution fees of 0.75% of average daily net assets for Class B and
Class C shares. The Distributor uses such payments for personal services and/or
the maintenance or servicing of shareholder accounts, to reimburse securities
dealers for distribution and marketing services, to furnish ongoing assistance
to investors and to defray a portion of its distribution and marketing expenses.
For the year ended December 31, 1997, fees pursuant to such plan amounted to
$43,803, $362,334 and $53,146 for Class A, Class B and Class C shares,
respectively.
The Fund has been informed that the Distributor and MetLife Securities, Inc., a
wholly owned subsidiary of Metropolitan, earned initial sales charges
aggregating $23,824 and $105,414, respectively, on sales of Class A shares of
the Fund during the year ended December 31, 1997, and that MetLife Securities,
Inc. earned commissions aggregating $285,667 on sales of Class B shares, and
that the Distributor collected contingent deferred sales charges of $66,560 and
$508 on redemptions of Class B and Class C shares, respectively, during the same
period.
NOTE 5
The Trustees have the authority to issue an unlimited number of shares of
beneficial interest, $.001 par value per share.
Share transactions were as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
-------------------------------------------------------
1996 1997
-------------------------- --------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold ................... 1,847,928 $ 14,383,066 1,800,180 $ 13,267,551
Issued upon reinvestment of
distributions from net
realized gains .............. 195,417 1,399,231 239,036 1,614,506
Shares redeemed ............... (263,591) (2,062,377) (1,828,511) (13,640,894)
---------- ------------ ---------- ------------
Net increase .................. 1,779,754 $ 13,719,920 210,705 $ 1,241,163
========== ============ ========== ============
<CAPTION>
CLASS B SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold ................... 2,947,485 $ 22,502,916 1,677,391 $ 12,208,831
Issued upon reinvestment of
distributions from net
realized gains .............. 369,233 2,566,243 502,614 3,255,965
Shares redeemed ............... (395,250) (2,996,738) (1,283,390) (9,489,085)
---------- ------------ ---------- ------------
Net increase .................. 2,921,468 $ 22,072,421 896,615 $ 5,975,711
========== ============ ========== ============
<CAPTION>
CLASS C (FORMERLY CLASS D) SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold ................... 462,926 $ 3,510,341 331,641 $ 2,437,190
Issued upon reinvestment of
distributions from net
realized gains .............. 71,693 498,203 69,801 451,609
Shares redeemed ............... (39,411) (298,667) (531,745) (3,958,490)
---------- ------------ ---------- ------------
Net increase (decrease) ....... 495,208 $ 3,709,877 (130,303) $ (1,069,691)
========== ============ ========== ============
<CAPTION>
CLASS S (FORMERLY CLASS C) SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold ................... 114,007 $ 899,665 58,742 $ 441,722
Issued upon reinvestment of:
Distributions from net
realized gains .............. 807,652 5,802,306 1,059,076 7,196,912
Dividend from net investment
income ........................ 4,457 36,774 -- --
Shares redeemed ............... (2,836,294) (21,897,052) (2,628,815) (20,077,440)
---------- ------------ ---------- ------------
Net decrease .................. (1,910,178) $(15,158,307) (1,510,997) $(12,438,806)
========== ============ ========== ============
</TABLE>
<PAGE>
STATE STREET RESEARCH GROWTH FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
For a share outstanding throughout each year:
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------------------
YEARS ENDED DECEMBER 31
---------------------------------------------------------------------------
1993(2) 1994 1995(1) 1996(1) 1997(1)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR ($) 9.63 8.50 7.09 7.02 7.17
----- ----- ----- ----- -----
Net investment income (loss) ($) 0.06 0.05 0.01 (0.03) (0.00)
Net realized and unrealized gain (loss) on
investments ($) 0.37 (0.38) 2.30 0.93 0.68
----- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS ($) 0.43 (0.33) 2.31 0.90 0.68
----- ----- ----- ----- -----
Dividends from net investment income ($) (0.08) (0.05) (0.02) -- --
Distributions from net realized gains ($) (1.48) (1.03) (2.36) (0.75) (0.78)
----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS ($) (1.56) (1.08) (2.38) (0.75) (0.78)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF YEAR ($) 8.50 7.09 7.02 7.17 7.07
===== ===== ===== ===== =====
Total return(4) (%) 4.52(5) (3.83) 32.57 12.65 10.14
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of year ($ thousands) 602 719 2,379 15,181 16,470
Ratio of operating expenses to average net
assets (%) 0.96(6) 0.90 0.89 0.90 0.93
Ratio of net investment income (loss) to
average net assets (%) 0.48(6) 0.54 0.12 (0.34) (0.05)
Portfolio turnover rate (%) 68.36 57.18 234.43 237.85 258.99
Average commission rate ($)(7) -- -- -- 0.0331 0.0383
<CAPTION>
CLASS B
---------------------------------------------------------------------------
YEARS ENDED DECEMBER 31
---------------------------------------------------------------------------
1993(3) 1994 1995(1) 1996(1) 1997(1)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR ($) 9.56 8.46 7.02 6.89 6.96
----- ----- ----- ----- -----
Net investment income (loss) ($) 0.03 (0.00) (0.06) (0.08) (0.06)
Net realized and unrealized gain (loss) on
investments ($) 0.42 (0.41) 2.29 0.90 0.67
----- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS ($) 0.45 (0.41) 2.23 0.82 0.61
----- ----- ----- ----- -----
Dividend from net investment income ($) (0.07) -- -- -- --
Distributions from net realized gains ($) (1.48) (1.03) (2.36) (0.75) (0.78)
----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS ($) (1.55) (1.03) (2.36) (0.75) (0.78)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF YEAR ($) 8.46 7.02 6.89 6.96 6.79
===== ===== ===== ===== =====
Total return(4) (%) 4.64(5) (4.80) 31.71 11.73 9.44
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of year ($ thousands) 986 1,544 10,684 31,119 36,442
Ratio of operating expenses to average net
assets (%) 1.71(6) 1.63 1.63 1.65 1.68
Ratio of net investment loss to
average net assets (%) (0.36)(6) (0.20) (0.69) (1.07) (0.82)
Portfolio turnover rate (%) 68.36 57.18 234.43 237.85 258.99
Average commission rate ($)(7) -- -- -- 0.0331 0.0383
- --------------------------------------------------------------------------------------------------------------------------------
(1) Per-share figures have been calculated using the average shares method.
(2) March 16, 1993 (commencement of share class designations) to December 31, 1993.
(3) March 18, 1993 (commencement of share class designations) to December 31, 1993.
(4) Does not reflect any front-end or contingent deferred sales charges.
(5) Not annualized.
(6) Annualized.
(7) Average commission rate per share paid by the Fund for security trades on which commissions are charged beginning with the
fiscal year ended December 31, 1996.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CLASS C (FORMERLY CLASS D)
------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31
------------------------------------------------------------------------------------
1993(3) 1994 1995(1) 1996(1) 1997(1)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR ($) 9.56 8.45 7.02 6.88 6.95
----- ----- ----- ----- -----
Net investment income (loss) ($) 0.03 (0.00) (0.06) (0.08) (0.06)
Net realized and unrealized gain (loss)
on investments ($) 0.41 (0.40) 2.28 0.90 0.67
----- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS ($) 0.44 (0.40) 2.22 0.82 0.61
----- ----- ----- ----- -----
Dividend from net investment income ($) (0.07) -- -- -- --
Distributions from net realized gains ($) (1.48) (1.03) (2.36) (0.75) (0.78)
----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS ($) (1.55) (1.03) (2.36) (0.75) (0.78)
----- ----- ----- ----- -----
ET ASSET VALUE, END OF YEAR ($) 8.45 7.02 6.88 6.95 6.78
===== ===== ===== ===== =====
Total return(4) (%) 4.59(5) (4.68) 31.57 11.89 9.30
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of year ($ thousands) 242 384 2,117 5,584 4,562
Ratio of operating expenses to average net
assets (%) 1.71(6) 1.63 1.63 1.65 1.68
Ratio of net investment loss to average net
assets (%) (0.34)(6) (0.20) (0.67) (1.07) (0.79)
Portfolio turnover rate (%) 68.36 57.18 234.43 237.85 258.99
Average commission rate ($)(7) -- -- -- 0.0331 0.0383
<CAPTION>
CLASS S (FORMERLY CLASS C)
--------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31
-------------------------------------------------------------------------------------
1993 1994 1995(1) 1996(1) 1997(1)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR ($) 9.26 8.51 7.08 7.02 7.18
----- ----- ----- ----- -----
Net investment income (loss) ($) 0.09 0.07 0.04 (0.00) 0.01
Net realized and unrealized gain (loss)
on investments ($) 0.74 (0.40) 2.29 0.92 0.70
----- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS ($) 0.83 (0.33) 2.33 0.92 0.71
----- ----- ----- ----- -----
Dividends from net investment income ($) (0.10) (0.07) (0.03) (0.01) --
Distributions from net realized gains ($) (1.48) (1.03) (2.36) (0.75) (0.78)
----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS ($) (1.58) (1.10) (2.39) (0.76) (0.78)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF YEAR ($) 8.51 7.08 7.02 7.18 7.11
===== ===== ===== ===== =====
Total return(4) (%) 8.94 (3.82) 33.02 12.74 10.54
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of year ($ thousands) 250,786 186,108 186,689 177,147 164,689
Ratio of operating expenses to average net
assets (%) 0.66 0.64 0.64 0.65 0.68
Ratio of net investment income (loss) to
average net assets (%) 0.92 0.78 0.43 (0.06) 0.19
Portfolio turnover rate (%) 68.36 57.18 234.43 237.85 258.99
Average commission rate ($)(7) -- -- -- 0.0331 0.0383
- ---------------------------------------------------------------------------------------------------------------------------------
(1) Per-share figures have been calculated using the average shares method.
(2) March 16, 1993 (commencement of share class designations) to December 31, 1993.
(3) March 18, 1993 (commencement of share class designations) to December 31, 1993.
(4) Does not reflect any front-end or contingent deferred sales charges.
(5) Not annualized.
(6) Annualized.
(7) Average commission rate per share paid by the Fund for security trades on which commissions are charged beginning with
the fiscal year ended December 31, 1996.
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
- -------------------------------------------------------------------------------
TO THE TRUSTEES OF STATE STREET RESEARCH GROWTH TRUST AND SHAREHOLDERS OF STATE
STREET RESEARCH GROWTH FUND:
We have audited the accompanying statement of assets and liabilities of State
Street Research Growth Fund, including the schedule of portfolio investments, as
of December 31, 1997, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended and the financial highlights for each of the periods indicated
therein. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1997 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of State
Street Research Growth Fund as of December 31, 1997, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the periods indicated therein, in conformity with generally accepted accounting
principles.
/s/ Coopers & Lybrand L.L.P
Coopers & Lybrand L.L.P.
Boston, Massachusetts
February 9, 1998
<PAGE>
STATE STREET RESEARCH GROWTH FUND
- -------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
- -------------------------------------------------------------------------------
For the year ended December 31, 1997, Class A shares of Growth Fund returned
+10.14% [without sales charge]. That was significantly less than the average
growth fund, which was up 25.30%, according to Lipper Analytical Services.
The Fund invests primarily in small- to medium-sized growth companies.
The Fund's heavy exposure to the sciences and technology sector which includes
industries like computer software and electronics, accounted for much of its
underperformance during the year. And because many of the technology sector
stocks in the Fund involved above-average risk, they suffered even more than the
industry average. However, management continued to hold on to most of its
technology sector position on the belief that many of the companies have rebound
potential. A gradual restructuring is underway, with the goal of managing the
overall volatility of the Fund.
December 31, 1997
All returns represent past performance, which is no guarantee of future results.
The investment return and principal value of an investment made in the Fund will
fluctuate and shares, when redeemed, may be worth more or less than their
original cost. All returns assume reinvestment of capital gain distributions and
income dividends. During the period prior to 1993 that shares of the Fund were
not offered to the general public, the Fund was not subject to the cash inflows
and higher redemptions and expenses that have occurred during the Fund's
current, continuous public offering. Performance for a class may include periods
prior to the adoption of class designations in 1993, which resulted in new or
increased 12b-1 fees of up to 1% per class thereafter and which will reduce
subsequent performance. "S" shares, offered without a sales charge, are
available through certain employee benefit plans and special programs. Before
November 1, 1997, Class C shares were designated Class D, and Class S shares
were designated Class C. Performance reflects maximum 4.5% "A" share front-end
sales charge or 5% "B" share or 1% "C" share contingent deferred sales charges
where applicable. The Standard & Poor's 500 Composite Index (S&P 500) includes
500 widely traded common stocks and is a commonly used measure of U.S. stock
market performance. The index is unmanaged and does not take sales charges into
consideration. Direct investment in the index is not possible; results are for
illustrative purposes only.
CHANGE IN VALUE OF $10,000
BASED ON THE S&P 500 COMPARED
TO CHANGE IN VALUE OF $10,000
INVESTED IN GROWTH FUND
CLASS A SHARES
- -----------------------------------------
Average Annual Total Return
- -----------------------------------------
1 Year 5 Years 10 Years
- -----------------------------------------
+5.18% +10.42% +12.17%
- -----------------------------------------
Investment Trust S&P 500
- -----------------------------------------
12/87 9,550 10,000
12/88 10,440 11,660
12/89 14,590 15,340
12/90 13,690 14,870
12/91 17,360 19,390
12/92 18,350 20,860
12/93 19,940 22,960
12/94 19,180 23,260
12/95 25,430 31,990
12/96 28,640 39,330
12/97 31,546 52,448
<PAGE>
CLASS B SHARES
- -----------------------------------------
Average Annual Total Return
- -----------------------------------------
1 Year 5 Years 10 Years
- -----------------------------------------
+4.56% +10.42% +12.27%
- -----------------------------------------
Investment Trust S&P 500
- -----------------------------------------
12/87 10,000 10,000
12/88 10,930 11,660
12/89 15,280 15,340
12/90 14,340 14,870
12/91 18,180 19,390
12/92 19,210 20,860
12/93 20,760 22,960
12/94 19,760 23,260
12/95 26,030 31,990
12/96 29,080 39,330
12/97 31,823 52,448
Class C Shares
- -----------------------------------------
Average Annual Total Return
- -----------------------------------------
1 Year 5 Years 10 Years
- -----------------------------------------
+8.32% +10.61% +12.27%
- -----------------------------------------
Investment Trust S&P 500
- -----------------------------------------
12/87 10,000 10,000
12/88 10,930 11,660
12/89 15,280 15,340
12/90 14,340 14,870
12/91 18,180 19,390
12/92 19,210 20,860
12/93 20,750 22,960
12/94 19,770 23,260
12/95 26,020 31,990
12/96 29,110 39,330
12/97 31,816 52,448
Class S Shares
- -----------------------------------------
Average Annual Total Return
- -----------------------------------------
1 Year 5 Years 10 Years
- -----------------------------------------
+10.54% +11.67% +12.81%
- -----------------------------------------
Investment Trust S&P 500
- -----------------------------------------
12/87 10,000 10,000
12/88 10,930 11,660
12/89 15,280 15,340
12/90 14,340 14,870
12/91 18,180 19,390
12/92 19,210 20,860
12/93 20,930 22,960
12/94 20,130 23,260
12/95 26,780 31,990
12/96 30,190 39,330
12/97 33,372 52,448
<PAGE>
STATE STREET RESEARCH GROWTH TRUST
PART C
OTHER INFORMATION
Item 24: Financial Statements and Exhibits
(a) Financial Statements
(1) Financial Statements included in PART A (Prospectus) of this
Registration Statement:
Financial Highlights for State Street
Research Growth Fund for the fiscal years
ended December 31, 1988 through December 31, 1997.
(2) Financial Statements included in PART B
(Statement of Additional Information) of this
Registration Statement:
For State Street Research Growth Fund for the fiscal year
ended December 31, 1997 (except as provided below):
Investment Portfolio
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
(fiscal years ended December 31, 1997
and December 31, 1996)
Notes to Financial Statements
(including financial highlights)
Report of Independent Accountants
Management's Discussion of Fund
Performance
(b) Exhibits:
(1) First Amended and Restated
Master Trust Agreement and Amendment No. 1 to
First Amended and Restated Master Trust
Agreement (ix)
(2)(a) By-Laws (i)**
(2)(b) Amendment to By-Laws effective
September 30, 1992 (iv)**
(4) deleted
C-1
<PAGE>
(5) First Amended and Restated Investment Advisory
Contract (x)
(6)(a) Distribution Agreement with State
Street Research Investment
Services, Inc. (vi)**
(6)(b) Form of Selected Dealer Agreement, as supplemented (x)
(6)(c) Form of Bank and Bank Affiliated
Broker-Dealer Agreement
(8)(a) Custodian Contract (iii)**
(8)(b) Amendment to Custodian Contract dated 11/2/95
(8)(c) Shareholders' Administrative
Services Agreement (iii)**
(8)(d) Letter Amendment to Shareholder's Svs Agmt dated
5/16/94
(8)(e) Letter Amendment to Shareholder's Svs Agmt dated
2/1/95
(8)(f) Letter Amendment to Shareholder's Svs Agmt dated
8/19/96
(10) Consent, and Opinion of counsel on legality of shares
being issued with respect to State Street Growth
Fund (iv)**
(11) Consent of Coopers & Lybrand L.L.P.
(14)(a) State Street Research IRA: Disclosure Statement,
Forms Booklet, Transfer of Assets/Direct Rollover
Form, Terms and Conditions, Traditional IRA or Roth
IRA Disclosure Statement
(14)(b) State Street Research 403(b): Brochure, Maximum
Salary Reduction Worksheet, Account Application,
Salary Reduction Agreement and Transfer of 403(b)
Assets Form (x)
(15) Plan of Distribution Pursuant to
Rule 12b-1 (vi)**
(16) Calculation of Performance Data
(vii)**
(17) First Amended and Restated Multiple Class Expense
Allocation Plan (x)
(18)(a) Powers of Attorney
C-2
<PAGE>
(18)(b) Certificate of Board Resolution Respecting Powers of
Attorney
(19) Application Forms (x)
(27) Financial Data Schedules
**Restated in electronic format in Post-Effective Amendment No. 6 filed
February 27, 1998
- -------------------------
Filed as part of the Registration Statement as noted below and incorporated
herein by reference:
Footnote
Reference Registration/Amendment Date Filed
i Amendment No. 11 to April 26, 1989
Registration Statement
ii Amendment No. 12 to April 27, 1990
Registration Statement
iii Amendment No. 14 to April 30, 1991
Registration Statement
iv Registration Statement November 25, 1992
under Securities Act of
1933
v Pre-Effective Amendment January 28, 1993
No. 1
vi Post-Effective Amendment March 19, 1993
No. 1
vii Post-Effective Amendment April 29, 1994
No. 2
viii Post-Effective Amendment April 28, 1995
No. 3
ix Post-Effective Amendment April 26, 1996
No. 4
x Post-Effective Amendment
No. 5 April 28, 1997
C-3
<PAGE>
Item 25. Persons Controlled by or under
Common Control with Registrant
Inapplicable
Item 26. Number of Holders of Securities
(1) (2)
Number of Record
Title of Class Holders (at 1/31/98)
Shares of
Beneficial Interest
Class A 1,801
Class B 2,729
Class C 157
Class S 751
Item 27. Indemnification
Under Article VI of the Registrant's First Amended and Restated Master Trust
Agreement as further amended (the "Master Trust Agreement") each of its Trustees
and officers or persons serving in such capacity with another entity at the
request of the Registrant ("Covered Person") shall be indemnified against all
liabilities, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and expenses, including
reasonable accountants' and counsel fees, 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 person may be or may have been
threatened, while in office or thereafter, by reason of being or having been
such a Trustee or officer, director or trustee, except with respect to any
matter as to which it has been determined that such Covered Person had acted
with willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of such Covered Person's office (such conduct
referred to hereafter as "Disabling Conduct"). A determination that the Covered
Person is entitled to indemnification may be made by (i) a final decision on the
merits by a court or other body before whom the proceeding was brought that the
person to be indemnified was not liable by reason of Disabling Conduct, (ii)
dismissal of a court action or an administrative proceeding against a Covered
Person for insufficiency of evidence of Disabling Conduct, or (iii) a reasonable
determination, based upon a review of the facts, that the indemnitee was not
liable by reason of Disabling Conduct by (a) a vote of a majority of a quorum of
Trustees who are neither "interested persons" of the Trust as defined in section
2(a)(19) of the 1940 Act nor parties to the
C-4
<PAGE>
proceeding, or (b) an independent legal counsel in a written opinion.
Under the Distribution Agreement between the Registrant and State Street
Research Investment Services, Inc., the Registrant's distributor, the Registrant
has agreed to indemnify and hold harmless State Street Research Investment
Services, Inc. and each person who has been, is, or may hereafter be an officer,
director, employee or agent of State Street Research Investment Services, Inc.
against any loss, damage or expense reasonably incurred by any of them in
connection with any claim or in connection with any action, suit or proceeding
to which any of them may be a party, which arises out of or is alleged to arise
out of or is based upon a violation of any of its convenants herein contained or
any untrue or alleged untrue statement of material fact, or the omission or
alleged omission to state a material fact necessary to make the statements made
not misleading, in a Registration Statement or Prospectus of the Registrant, or
any amendment or supplement thereto, unless such statement or omission was made
in reliance upon written information furnished by State Street Research
Investment Services, Inc.
Insofar as indemnification by the Registrant for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers, underwriters and
controlling persons of the Registrant, pursuant to Article VI of the
Registrant's Master Trust Agreement, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a trustee, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted against the
Registrant by such trustee, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question of whether such indemnification by it
is against public policy expressed in the Act and will be governed by the final
adjudication of such issue.
C-5
<PAGE>
Item 28. Business and Other Connections of Investment Adviser
Describe any other business, profession, vocation or employment of a
substantial nature in which each investment adviser of the Registrant, and each
director, officer or partner of any such investment adviser, is or has been, at
any time during the past two fiscal years, engaged for his own account or in the
capacity of director, officer, employee, partner or trustee.
<TABLE>
<CAPTION>
Principal business
Name Connection Organization address of organization
- ---- ---------- ------------ -----------------------
<S> <C> <C> <C>
State Street Investment Adviser Various investment Boston, MA
Research & advisory clients
Management
Company
Arpiarian, Tanya None
Vice President
Bangs, Linda L. None
Vice President
Bennett, Peter C. Executive Vice GFM International Investors, Inc. London, England
Director and President
Executive Vice Vice President State Street Research Capital Trust Boston, MA
President Vice President State Street Research Exchange Trust Boston, MA
Vice President State Street Research Financial Trust Boston, MA
Vice President State Street Research Growth Trust Boston, MA
Vice President State Street Research Master Investment Trust Boston, MA
Vice President State Street Research Equity Trust
Vice President State Street Research Income Trust Boston, MA
Vice President State Street Research Portfolios, Inc. Boston, MA
Vice President State Street Research Securities Trust Boston, MA
Director State Street Research Investment Services, Inc. Boston, MA
Director Boston Private Bank & Trust Co. Boston, MA
President and Director Christian Camps & Conferences, Inc. Boston, MA
Chairman and Trustee Gordon College Wenham, MA
Bochman, Kathleen None
Vice President
Borzilleri, John Vice President Montgomery Securities San Francisco, CA
Vice President (until 6/97)
Bray, Michael J. Employee Merrill Lynch & Co. Boston, MA
Vice President (until 7/96)
Brown, Susan H. None
Vice President
Buffum, Andrea Project Manager BankBoston Boston, MA
Vice President (until 12/96)
Burbank, John F. None
Senior Vice President
(Vice President until
7/96)
Cabrera, Jesus A. Vice President First Chicago Investment Management Co. Chicago, IL
Vice President (until 5/96)
Vice President State Street Research Capital Trust Boston, MA
Canavan, Joseph W. Vice President GFM International Investors Limited London, England
Vice President Assistant Treasurer State Street Research Equity Trust Boston, MA
Assistant Treasurer State Street Research Financial Trust Boston, MA
Assistant Treasurer State Street Research Income Trust Boston, MA
Assistant Treasurer State Street Research Money Market Trust Boston, MA
Assistant Treasurer State Street Research Tax-Exempt Trust Boston, MA
Assistant Treasurer State Street Research Capital Trust Boston, MA
Assistant Treasurer State Street Research Exchange Trust Boston, MA
Assistant Treasurer State Street Research Growth Trust Boston, MA
Assistant Treasurer State Street Research Master Investment Trust Boston, MA
Assistant Treasurer State Street Research Securities Trust Boston, MA
Assistant Treasurer State Street Research Portfolios, Inc. Boston, MA
C-6
<PAGE>
Principal business
Name Connection Organization address of organization
- ---- ---------- ------------ -----------------------
Carstens, Linda C. None
Vice President
Clifford, Jr., Paul J. Vice President State Street Research Tax-Exempt Trust Boston, MA
Vice President
Coleman, Thomas J. Account Manager MetLife Investment New York, NY
Vice President (until 9/96) Management
D'Vari, Ronald None
Vice President
Depp, Maureen G. Vice President Wellington Management Company Boston, MA
Vice President (until 9/97)
DeVeuve, Donald None
Vice President
DiFazio, Susan M.W. Senior Vice President State Street Research Investment Boston, MA
Vice President Services, Inc.
Dillman, Thomas J Vice President State Street Research Securities Trust Boston, MA
Senior Vice President
Drake, Susan W.
Vice President
Dudley, Catherine Senior Portfolio Manager Chancellor Capital Management Boston, MA
Senior Vice President
Duggan, Peter J. None
Senior Vice
President
Even, Karen None
Vice President
Federoff, Alex G. None
Vice President
Fee, Richard E. CIGNA Retirement and Hartford, CT
Vice President Investment Services
Feliciano, Rosalina None
Vice President
Gardner, Michael D. Partner Prism Group Seattle, WA
Senior Vice President
Geer, Bartlett R. Vice President State Street Research Equity Trust Boston, MA
Senior Vice President Vice President State Street Research Income Trust Boston, MA
Vice President State Street Research Securities Trust Boston, MA
Giroux, June M. None
Vice President
Govoni, Electra None
Vice President
C-7
<PAGE>
Principal business
Name Connection Organization address of organization
- ---- ---------- ------------ -----------------------
Granger, Allison None
Vice President
Hamilton, Jr., William A. Treasurer and Director Ellis Memorial and Eldredge House Boston, MA
Senior Vice President Treasurer and Director Nautical and Aviation Publishing Company, Inc. Baltimore, MD
Treasurer and Director North Conway Institute Boston, MA
Hanson, Phyllis None
Vice President
Haverty, Jr., Lawrence J. Vice President State Street Research Capital Trust Boston, MA
Senior Vice President
Heineke, George R. None
Vice President
Jackson, Jr., Trustee Certain trusts of related and
F. Gardner non-related individuals
Senior Vice President Trustee and Chairman Vincent Memorial Hospital Boston, MA
of the Board
Jamieson, Frederick H. Vice President and Asst. Treasurer State Street Research Investment Services, Inc. Boston, MA
Senior Vice President Vice President and Asst. Treasurer SSRM Holdings, Inc. Boston, MA
Vice President and Controller MetLife Securities, Inc. New York, NY
Senior Vice President GFM International Investors, Inc. London, England
Jodka, Richard Portfolio Manager Frontier Capital Management Boston, MA
Senior Vice President (until 1/98)
Vice President State Street Research Capital Trust Boston, MA
Kallis, John H. Vice President State Street Research Financial Trust Boston, MA
Senior Vice President Vice President State Street Research Income Trust Boston, MA
Vice President State Street Research Money Market Trust Boston, MA
Vice President State Street Research Portfolios, Inc. Boston, MA
Vice President State Street Research Tax-Exempt Trust Boston, MA
Vice President State Street Research Securities Trust Boston, MA
Trustee 705 Realty Trust Washington, D.C.
Director and President K&G Enterprises Washington, D.C.
Kasper, M. Katherine None
Vice President
C-8
<PAGE>
Principal business
Name Connection Organization address of organization
- ---- ---------- ------------ -----------------------
Kluiber, Rudolph K. Vice President State Street Research Capital Trust Boston, MA
Vice President
Langholm, Knut Director State Street Research SICAV Luxembourg
Vice President
Leary, Eileen M. None
Vice President
Maisonneuve, Virginie Portfolio Manager Batterymarch Financial Management Boston, MA
Vice President (until 6/97)
Vice President GFM International Investors, Inc. London, England
McNamara, III, Francis J. Director and Executive GFM International Investors, Inc. London, England
Executive Vice Vice President State Street Research Investment Boston, MA
President, Executive Vice President, Services, Inc.
Secretary and Clerk and General Counsel
General Counsel Secretary and General Counsel State Street Research Master Investment Trust Boston, MA
(Senior Vice President, Secretary and General Counsel State Street Research Capital Trust Boston, MA
Secretary and General Secretary and General Counsel State Street Research Exchange Trust Boston, MA
Counsel until 7/96) Secretary and General Counsel State Street Research Growth Trust Boston, MA
Secretary and General Counsel State Street Research Securities Trust Boston, MA
Secretary and General Counsel State Street Research Equity Trust Boston, MA
Secretary and General Counsel State Street Research Financial Trust Boston, MA
Secretary and General Counsel State Street Research Income Trust Boston, MA
Secretary and General Counsel State Street Research Money Market Trust Boston, MA
Secretary and General Counsel State Street Research Portfolios, Inc. Boston, MA
Secretary and General Counsel State Street Research Tax-Exempt Trust Boston, MA
Secretary and General Counsel SSRM Holdings, Inc. Boston, MA
C-9
<PAGE>
Principal business
Name Connection Organization address of organization
- ---- ---------- ------------ -----------------------
Maus, Gerard P. Executive Vice President GFM International Investors, Inc. London, England
Director, Executive and Director
Vice President, Treasurer State Street Research Equity Trust Boston, MA
Treasurer, Chief Treasurer State Street Research Financial Trust Boston, MA
Financial Officer and Treasurer State Street Research Income Trust Boston, MA
Chief Administrative Treasurer State Street Research Money Market Trust Boston, MA
Officer Treasurer State Street Research Tax-Exempt Trust Boston, MA
Treasurer State Street Research Capital Trust Boston, MA
Treasurer State Street Research Exchange Trust Boston, MA
Treasurer State Street Research Growth Trust Boston, MA
Treasurer State Street Research Master Investment Trust Boston, MA
Treasurer State Street Research Portfolios, Inc. Boston, MA
Treasurer State Street Research Securities Trust Boston, MA
Director, Executive Vice President, State Street Research Investment Services, Inc. Boston, MA
Treasurer and Chief
Financial Officer
Director Metric Holdings, Inc. San Francisco, CA
Director Certain wholly-owned subsidiaries
of Metric Holdings, Inc.
Treasurer and Chief Financial SSRM Holdings, Inc. Boston, MA
Officer
Treasurer (until 1/97) MetLife Securities, Inc. New York, NY
Director State Street Research SICAV Luxembourg
Milder, Judith J. None
Senior Vice President
Miles, Deborah C. Vice President Scudder, Stevens & Clark Boston, MA
Vice President (until 9/97) L.L. Bean, Inc. Freeport, ME
Employee
Miller, Joan D. Senior Vice President State Street Research Investment Services, Inc. Boston, MA
Senior Vice President
(Vice President
until 7/96)
Moore, Jr., Thomas P. Vice President State Street Research Capital Trust Boston, MA
Senior Vice (until 11/96)
President Vice President State Street Research Exchange Trust Boston, MA
(until 2/97)
Vice President State Street Research Growth Trust Boston, MA
(until 2/97)
Vice President State Street Research Master Investment Trust Boston, MA
(until 2/97)
Vice President State Street Research Equity Trust Boston, MA
Vice President State Street Research Energy, Inc. Boston, MA
Director Hibernia Savings Bank Quincy, MA
Governor on the Association for Investment Management
Board of Governors and Research Charlottesville, VA
Morey, Andrew
Vice President None
Mulligan, JoAnne C. Vice President State Street Research Money Market Trust Boston, MA
Senior Vice President
(Vice President
until 7/96)
Orr, Stephen C. Member Technology Analysts of Boston Boston, MA
Vice President Member Electro-Science Analysts (of NYC) New York, NY
C-10
<PAGE>
Principal business
Name Connection Organization address of organization
- ---- ---------- ------------ -----------------------
Paddon, Steven W. Employee Metropolitan Life Insurance Company New York, NY
Vice President (until 10/96)
Pannell, James C. None
Senior Vice President
(Vice President
until 4/97)
Peters, Kim M. Vice President State Street Research Securities Trust Boston, MA
Senior Vice President
Poritzky, Dean E. Portfolio Manager Fidelity Investments Boston, MA
Vice President (until 4/97)
Pyle, David J. Analyst Oak Value Capital Management Durham, NC
Vice President (until 4/97)
Ragsdale, E.K. Easton Senior Vice President GFM International Investors, Inc. London, England
Senior Vice President
(Vice President
until 7/96)
Rawlins, Jeffrey A. None
Senior Vice President
(Vice President
until 7/96)
Rice III, Daniel Joseph Vice President State Street Research Equity Trust Boston, MA
Senior Vice President
Richards, Scott None
Vice President
Romich, Douglas A. Vice President GFM International Investors, Inc. London, England
Vice President Assistant Treasurer State Street Research Equity Trust Boston, MA
Assistant Treasurer State Street Research Financial Trust Boston, MA
Assistant Treasurer State Street Research Income Trust Boston, MA
Assistant Treasurer State Street Research Money Market Trust Boston, MA
Assistant Treasurer State Street Research Tax-Exempt Trust Boston, MA
Assistant Treasurer State Street Research Capital Trust Boston, MA
Assistant Treasurer State Street Research Exchange Trust
Assistant Treasurer State Street Research Growth Trust Boston, MA
Assistant Treasurer State Street Research Master Investment Trust Boston, MA
Assistant Treasurer State Street Research Securities Trust Boston, MA
Assistant Treasurer State Street Research Portfolios, Inc. Boston, MA
Ryan, Michael J. Vice President Delaware Management Philadelphia, PA
Senior Vice President (until 2/98)
Sanderson, Derek Senior Vice President Freedom Capital Management Boston, MA
Senior Vice President (10/97)
Saperstone, Paul None
Vice President
C-11
<PAGE>
Principal business
Name Connection Organization address of organization
- ---- ---------- ------------ -----------------------
Schrage, Michael None
Vice President
Schultz, David C. Director and Treasurer Mafraq Hospital Association Mafraq, Jordan
Executive Vice Member Association of Investment
President Management Sales Executives Atlanta, GA
Member, Investment Committee Lexington Christian Academy Lexington, MA
Shaver, Jr. C. Troy President, Chief Executive Officer State Street Research Investment Boston, MA
Executive Vice and Executive Vice President Services, Inc.
President
Shean, William G. None
Vice President
Shively, Thomas A. Vice President State Street Research Financial Trust Boston, MA
Director and Vice President State Street Research Money Market Trust Boston, MA
Executive Vice Vice President State Street Research Tax-Exempt Trust
President Director State Street Research Investment Services, Inc. Boston, MA
Vice President State Street Research Securities Trust Boston, MA
Shoemaker, Richard D. Senior Vice President GFM International Investors, Inc. London, England
Senior Vice President
Stambaugh, Kenneth None
Vice President
(Assistant Vice
President until 9/97)
Strelow, Dan R. None
Senior Vice President
C-12
<PAGE>
Principal business
Name Connection Organization address of organization
- ---- ---------- ------------ -----------------------
Swanson, Amy McDermott None
Senior Vice President
Trebino, Anne M. Vice President SSRM Holdings, Inc. Boston, MA
Senior Vice President
Verni, Ralph F. Chairman, President, GFM International Investors, Inc. London, England
Chairman, President, CEO and Director
Chief Executive Chairman, President, Chief State Street Research Capital Trust Boston, MA
Officer and Executive Officer and Trustee
Director Chairman, President, Chief State Street Research Exchange Trust Boston, MA
Executive Officer and Trustee
Chairman, President, Chief State Street Research Growth Trust Boston, MA
Executive Officer and Trustee
Chairman, President, Chief State Street Research Master Investment Trust Boston, MA
Executive Officer and Trustee
Chairman, President, Chief State Street Research Securities Trust Boston, MA
Executive Officer and Trustee
Chairman, President, Chief State Street Research Equity Trust Boston, MA
Executive Officer and Trustee
Chairman, President, Chief State Street Research Financial Trust Boston, MA
Executive Officer and Trustee
Chairman, President, Chief State Street Research Income Trust Boston, MA
Executive Officer and Trustee
Chairman, President, Chief State Street Research Money Market Trust Boston, MA
Executive Officer and Trustee
Chairman, President, Chief State Street Research Portfolios, Inc. Boston, MA
Executive Officer and Director
Chairman, President, Chief State Street Research Tax-Exempt Trust Boston, MA
Executive Officer and Trustee
Chairman and Director State Street Research Investment Services, Inc. Boston, MA
(President and Chief Executive
Officer until 2/96)
Chairman and Director Metric Holdings, Inc. San Francisco, CA
Director and Officer Certain wholly-owned subsidiaries
of Metric Holdings, Inc.
Chairman of the Board and Director MetLife Securities, Inc. New York, NY
(until 1/97)
President, Chief Executive SSRM Holdings, Inc. Boston, MA
Officer and Director
Director CML Group, Inc. Boston, MA
Director Colgate University Hamilton, NY
Director State Street Research SICAV Luxembourg
C-13
<PAGE>
Principal business
Name Connection Organization address of organization
- ---- ---------- ------------ -----------------------
Wade, Dudley Vice President State Street Research Growth Trust Boston, MA
Freeman Vice President State Street Research Master Investment Trust Boston, MA
Senior Vice
President
Wallace, Julie K. None
Vice President
Weiss, James M. Vice President State Street Research Equity Trust Boston, MA
Senior Vice President Vice President State Street Research Exchange Trust Boston, MA
Vice President State Street Research Growth Trust Boston, MA
Vice President State Street Research Master Investment Trust Boston, MA
Vice President State Street Research Capital Trust Boston, MA
Vice President State Street Research Securities Trust Boston, MA
Westvold, Vice President State Street Research Securities Trust Boston, MA
Elizabeth McCombs
Senior Vice President
(Vice President
until 7/96)
Wilkins, Kevin Vice President State Street Research Investment Boston, MA
Vice President Services, Inc.
Vice President Fidelity Investments Boston, MA
(until 7/97)
Various positions Fidelity Investments Boston, MA
(until 10/96)
Wilson, John T. Vice President State Street Research Equity Trust Boston, MA
Vice President Vice President State Street Research Master Investment Trust Boston, MA
Vice President Phoenix Investment Counsel, Inc. Hartford, CT
(until 6/96)
Wing, Darman A. Senior Vice President and State Street Research Investment Boston, MA
Vice President, Asst. Clerk Services, Inc.
Assistant Secretary Assistant Secretary and State Street Research Capital Trust Boston, MA
and Assistant Assistant General Counsel
General Counsel Assistant Secretary and State Street Research Exchange Trust Boston, MA
Assistant General Counsel
Assistant Secretary and State Street Research Growth Trust Boston, MA
Assistant General Counsel
Assistant Secretary and State Street Research Master Investment Trust Boston, MA
Assistant General Counsel
Assistant Secretary and State Street Research Securities Trust Boston, MA
Assistant General Counsel
Assistant Secretary and State Street Research Equity Trust Boston, MA
Assistant General Counsel
Assistant Secretary and State Street Research Financial Trust Boston, MA
Assistant General Counsel
Assistant Secretary and State Street Research Income Trust Boston, MA
Assistant General Counsel
Assistant Secretary and State Street Research Money Market Trust Boston, MA
Assistant General Counsel
Assistant Secretary and State Street Research Tax-Exempt Trust Boston, MA
Assistant General Counsel
Assistant Secretary and SSRM Holdings, Inc. Boston, MA
Assistant General Counsel
Woodbury, Robert S.
Vice President
Woodworth, Jr., Kennard Vice President State Street Research Exchange Trust Boston, MA
Senior Vice Vice President State Street Research Growth Trust Boston, MA
President Vice President State Street Research Securities Trust Boston, MA
C-14
<PAGE>
Principal business
Name Connection Organization address of organization
- ---- ---------- ------------ -----------------------
Wu, Norman N. Partner Atlantic-Acton Realty Framingham, MA
Senior Vice President Director Bond Analysts Society of Boston Boston, MA
</TABLE>
C-15
<PAGE>
Item 29. Principal Underwriters
(a) State Street Research Investment Services, Inc. serves as principal
underwriter for State Street Research Equity Trust, State Street Research
Financial Trust, State Street Research Income Trust, State Street Research
Money Market Trust, State Street Research Tax-Exempt Trust, State Street
Research Capital Trust, State Street Research Growth Trust, State Street
Research Master Investment Trust, State Street Research Securities Trust and
State Street Research Portfolios, Inc.
(b) Directors and Officers of State Street Research Investment Services,
Inc. are as follows:
(1) (2) (3)
Positions
Name and Principal and Offices Positions and Offices
Business Address with Underwriter with Registrant
------------------ ---------------- ---------------------
Ralph F. Verni Chairman of the Board, Chairman of the Board,
One Financial Center and Director President, Chief Executive
Boston, MA 02111 Officer and Trustee
Peter C. Bennett Director None
One Financial Center
Boston, MA 02111
Gerard P. Maus Executive Vice Treasurer
One Financial Center President, Treasurer,
Boston, MA 02111 Chief Financial Officer
and Director
Thomas A. Shively Director Vice President
One Financial Center
Boston, MA 02111
C. Troy Shaver, Jr. President and None
One Financial Center Chief Executive
Boston, MA 02111 Officer
Francis J. McNamara, III Executive Vice Secretary
One Financial Center President, General
Boston, MA 02111 Counsel and Clerk
Peter Borghi Senior Vice President None
One Financial Center
Boston, MA 02111
C-16
<PAGE>
(1) (2) (3)
Positions
Name and Principal and Offices Positions and Offices
Business Address with Underwriter with Registrant
------------------ ---------------- ---------------------
Paul V. Daly Senior Vice President None
One Financial Center
Boston, MA 02111
Susan M.W. DiFazio Senior Vice President None
One Financial Center
Boston, MA 02111
Joan D. Miller Senior Vice President None
One Financial Center
Boston, MA 02111
Darman A. Wing Senior Vice President, Assistant Secretary
One Financial Center Assistant General Counsel
Boston, MA 02111 and Assistant Clerk
Donald Doherty Vice President None
One Financial Center
Boston, MA 02111
Robert M. Gunville Vice President None
One Financial Center
Boston, MA 02111
Frederick H. Jamieson Vice President and None
One Financial Center Assistant Treasurer
Boston, MA 02111
Susan V. Martin Vice President None
One Financial Center
Boston, MA 02111
Deborah C. Miles Vice President None
One Financial Center
Boston, MA 02111
Amy L. Simmons Vice President Assistant Secretary
One Financial Center
Boston, MA 02111
Kevin Wilkins Vice President None
One Financial Center
Boston, MA 02111
C-17
<PAGE>
Item 30. Location of Accounts and Records
Gerard P. Maus
State Street Research & Management Company
One Financial Center
Boston, MA 02111
Item 31. Management Services
(a) Inapplicable.
Item 32. Undertakings
(a) Inapplicable.
(b) Inapplicable.
(c) Deleted.
(d) The Registrant undertakes to hold a special meeting of shareholders of
the Trust for the purpose of voting upon the question of removal of any trustee
or trustees when requested in writing to do so by the recordholders of not less
than 10 per centum of the outstanding shares of the Trust and, in connection
with such meeting, to comply with the provisions of Section 16(c) of the
Investment Company Act of 1940 relating to shareholder communications.
(e) The Registrant has elected to include the information required by Item
5A of Form N-1A in its annual report to shareholders. The Registrant undertakes
to furnish each person to whom a prospectus is delivered with a copy of the
applicable fund's latest annual report to shareholders upon request and without
charge.
C-18
<PAGE>
NOTICE
A copy of the First Amended and Restated Master Trust Agreement, as
further amended (the "Master Trust Agreement") of the Registrant is on file with
the Secretary of State of the Commonwealth of Massachusetts and notice is hereby
given that the obligations of the Registrant hereunder, and the authorization,
execution and delivery of this amendment to the Registrant's Registration
Statement, shall not be binding upon any of the Trustees, shareholders,
nominees, officers, agents or employees of the Registrant as individuals or
personally, but shall bind only the property of the Funds comprising the series
of the Registrant, as provided in the Master Trust Agreement. Each Fund of the
Registrant shall be solely and exclusively responsible for all of its direct or
indirect debts, liabilities, and obligations, and no other Fund shall be
responsible for the same.
C-19
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 6 to its Registration Statement on Form N-1A to be
signed on its behalf by the undersigned, thereto duly authorized, in the City of
Boston and the Commonwealth of Massachusetts on the 27th day of February, 1998.
STATE STREET RESEARCH GROWTH TRUST
By: *
_____________________________
Ralph F. Verni
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed on the
above date by the following persons in the capacities indicated.
Signature Capacity
--------- --------
*
______________________________ Trustee, Chairman of
Ralph F. Verni the Board, President
and Chief Executive Officer
(principal executive
officer)
*
______________________________ Treasurer (principal
Gerard P. Maus financial and accounting
officer)
*
______________________________ Trustee
Steve A. Garban
*
______________________________ Trustee
Malcolm T. Hopkins
*
______________________________ Trustee
Edward M. Lamont
*
______________________________ Trustee
Robert A. Lawrence
C-20
<PAGE>
*
______________________________ Trustee
Dean O. Morton
*
______________________________ Trustee
Thomas L. Phillips
*
______________________________ Trustee
Toby Rosenblatt
*
______________________________ Trustee
Michael S. Scott Morton
*
______________________________ Trustee
Jeptha H. Wade
*By: /s/ Francis J. McNamara, III
______________________________________________
Francis J. McNamara, III, Attorney-in-Fact
under Powers of Attorney dated February 27, 1998
filed herewith.
C-21
<PAGE>
1933 Act Registration No. 33-55024
1940 Act File No. 811-985
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM N-1A
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. __ [ ]
Post-Effective Amendment No. 6 [X]
and/or
REGISTRATION STATEMENT
UNDER THE
INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 23 [X]
-------------------
STATE STREET RESEARCH GROWTH TRUST
(Exact Name of Registrant as Specified in
Master Trust Agreement)
---------------------
EXHIBITS
<PAGE>
INDEX TO EXHIBITS
(2)(a) By-laws**
(2)(b) Amendment to By-laws eff. Sept. 30, 1992**
(6)(a) Distribution Agreement**
(6)(c) Form of Bank and Bank Affiliated Broker-Dealer Agreement
(8)(a) Custodian Contract**
(8)(b) Amendment to Cust. Contract dated 11/2/95**
(8)(c) Shareholders' Administrative Svs. Agreement**
(8)(d) Letter Amendment to Shareholder's Svs. Agreement dated
5/16/94**
(8)(e) Letter Amendment to Shareholder's Svs. Agreement dated
2/1/95**
(8)(f) Letter Agreement to Shareholder's Svs. Agreement dated
8/19/96**
(10) Consent and Opinion of Counsel on legality of Shares being
issued with respect to State Street Research Growth Fund**
(11) Consent of Coopers and Lybrand
(14)(a) State Street Research IRA
(15) Plan of Distribution**
(16) Calculation of Performance Data**
(18)(a) Powers of Attorney
(18)(b) Certificate of Board Resolution Respecting Powers of Attorney
(27) Financial Data Schedules
**Restated in electronic format
Exhibit (2)(a)
BY-LAWS
OF
STATE STREET GROWTH TRUST
ARTICLE I
Agreement and Declaration
of Trust; Principal Office
1.1 Agreement and Declaration of Trust. These By-Laws shall be subject
to the Agreement and Declaration of Trust (also referred to as the Master Trust
Agreement), as from time to time in effect (the "Declaration of Trust"), of
State Street Growth Trust, the Massachusetts business trust established by the
Declaration of Trust (the "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 of Trustees, the President or the Treasurer or by two
or more Trustees, sufficient notice thereof being given to each Trustee by the
Secretary or an Assistant Secretary 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 at least forty-eight hours or by telegram at
least twenty-four hours before the meeting addressed to the Trustee at his usual
or last known business or residence address or to give notice to him 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 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
the commencement thereof the lack of notice to him. 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 one-half 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.
2.5 Participation by Telephone. One or more of the Trustees or of any
committee of the Trustees may participate in a meeting thereof by means of a
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time. 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 Secretary and such other officers, including a
Chairman of the Board of Trustees, one or more Vice Presidents, one or more
Assistant Treasurers and one or more Assistant Secretaries, 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. The Chairman of the Board of Trustees shall be a Trustee and may, but
need not be, a shareholder of the Trust; and any other officer may, but need not
be, a Trustee or shareholder of the Trust. Any two or more offices may be held
by the same person.
3.2 Election. The President, the Treasurer and the Secretary shall be
elected annually by the Trustees at a meeting held within the first four months
of the Trust's fiscal year. The meeting at which the officers are elected shall
be known as the annual meeting of Trustees. Other officers, if any, may be
elected or appointed by the Trustees at said meeting or at any other time.
Vacancies in any office may be filled at any time.
3.3 Tenure. The President, the Treasurer and the Secretary shall hold
office until the next annual meeting of the Trustees and until their respective
successors are chosen and qualified, or in each case until he sooner dies,
resigns, is removed or becomes disqualified. Each other officer shall hold
office and each agent shall retain authority at the pleasure of the Trustees.
3.4 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 as if the Trust were organized as a Massachusetts
business
--2--
<PAGE>
corporation and such other duties and powers as the Trustees may from time to
time designate.
3.5 Chairman of the Board of Trustees. The Chairman of the Board of
Trustees, if any, shall preside at all meetings of the shareholders and of the
Trustees unless otherwise provided by the Trustees, and shall perform such other
duties and shall have such other powers as the Trustees may determine from time
to time.
3.6 President. The President shall be the chief executive officer of
the Trust. In the absence of the Chairman of the Board of Trustees, the
President shall preside at meetings of the shareholders and of the Trustees
unless otherwise provided by the Trustees.
3.7 Vice President. The Vice President, or if there be more than one
Vice President, the Vice Presidents in the order determined by the Trustees (or
if there be no such determination, then in the order of their election), shall
in the absence of the President or in the event of his inability or refusal to
act, perform the duties of the President, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the President. The Vice
Presidents shall perform such other duties and have such other powers as the
Board of Trustees may from time to time prescribe.
3.8 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, 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.
3.9 Assistant Treasurer. The Assistant Treasurer, or if there shall be
more than one, the Assistant Treasurers in the order determined by the Trustees
(or if there be no such determination, then in the order of their election),
shall, in the absence of the Treasurer or in the event of his inability or
refusal to act, perform the duties and exercise the powers of the Treasurer and
shall perform such other duties and have such other powers as the Board of
Trustees may from time to time prescribe.
3.10 Secretary. The Secretary 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 Secretary from any meeting of the shareholders or Trustees, an Assistant
Secretary, or if there be none or if he is absent, a temporary secretary chosen
at such meeting, shall record the proceedings thereof in the aforesaid books.
--3--
<PAGE>
3.11 Assistant Secretary. The Assistant Secretary, or if there be more
than one, the Assistant Secretaries in the order determined by the Trustees (or
if there be no determination, then in the order of their election), shall, in
the absence of the Secretary or in the event of his inability or refusal to act,
perform the duties and exercise the powers of the Secretary and shall perform
such other duties and have such other powers as the Board of Trustees may from
time to time prescribe.
3.12 Resignations and Removals. Any Trustee or officer may resign at
any time by written instrument signed by him and delivered to the Chairman of
the Board of Trustees, the President or the Secretary 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 elected by
them with or without cause. Except to the extent expressly provided in a written
agreement with the Trust, no Trustee or officer resigning and no officer removed
shall have any right to any compensation for any period following his
resignation or removal, or any right to damages on account of such removal.
ARTICLE 4
Committees
4.1 General. The Trustees, by vote of a majority of the Trustees then
in office, may elect from their number an Executive Committee or other
committees and may delegate thereto some or all of their powers except those
which by law, by the Declaration of Trust, or by these By-Laws may not be
delegated. Except as the Trustees may otherwise determine, any such committee
may make rules for the conduct of its business, but unless otherwise provided by
the Trustees or in such rules, its business shall be conducted so far as
possible in the same manner as is provided by these By-Laws for the Trustees
themselves. All members of such committees shall hold such offices at the
pleasure of the Trustees. The Trustees may abolish any such committee at any
time. Any committee to which the Trustees delegate any of their powers or duties
shall keep records of its meetings and shall report its action to the Trustees.
The Trustees shall have power to rescind any action of any committee, but no
such rescission shall have retroactive effect.
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 and committees shall
--4--
<PAGE>
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. The fiscal year of the Trust shall be fixed by resolution
of the Trustees.
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. All deeds, leases, contracts, notes and other obligations
made by the Trustees may be signed by the President, any Vice President, the
Treasurer or Assistant Treasurer, Secretary or Assistant Secretary, or any agent
of the Trust, and need not bear the seal of the Trust.
ARTICLE 9
Issuance of Share Certificates
9.1 Share Certificates. In lieu of issuing certificates for shares, the
Trustees or the transfer agent may either issue receipts therefor or may keep
accounts upon the books of the Trust for the record holders of such shares, who
shall in either case be deemed, for all purposes hereunder, to be the holders of
certificates for such shares as if they had accepted such certificates and shall
be held to have expressly assented and agreed to the terms hereof.
The Trustees may at any time authorize the issuance of share
certificates either in limited cases or to all shareholders. In that event, a
shareholder may receive a certificate stating the number of shares owned by him,
in such form as shall be prescribed from time to time by the Trustees. Such
certificate
--5--
<PAGE>
shall be signed by the President or a Vice President and by the Treasurer or
Assistant Treasurer. Such signatures may be facsimiles if the certificate is
signed by a transfer agent, or by a registrar, other than a Trustee, officer or
employee of the Trust. In case any officer who has signed or whose facsimile
signature has been placed on such certificate shall cease to be such officer
before such certificate is issued, it may be issued by the Trust with the same
effect as if he were such officer at the time of its issue.
9.2 Loss of Certificates. In case of the alleged loss or destruction or
the mutilation of a share certificate, a duplicate certificate may be issued in
place thereof, upon such terms as the Trustees shall prescribe.
9.3 Issuance of New Certificate to Pledgee. The Trustees may, in their
discretion, institute a policy of enabling a pledgee of shares transferred as
collateral security to obtain a new certificate if the instrument of transfer
substantially describes the debt or duty that is intended to be secured thereby.
Such new certificate shall express on its face that it is held as collateral
security, and the name of the pledgor shall be stated thereon, who alone shall
be liable as a shareholder, and entitled to vote thereon.
9.4 Discontinuance of Issuance of Certificates. The Trustees may at any
time discontinue the issuance of share certificates and may, by written notice
to each shareholder, require the surrender of share certificates to the Trust
for cancellation. Such surrender and cancellation shall not affect the ownership
of shares in the Trust.
ARTICLE 10
Transactions By Certain Persons
10.1 Long and Short Positions. No Trustee or officer of the Trust and
neither the investment adviser nor any distributor (should a distributor be
appointed pursuant to the Master Trust Agreement) for the Trust nor any officer
or Director of the investment adviser or such distributor shall take a long or
short position in the securities issued by the Trust, except that this provision
shall not prevent:
(a) Such distributor from purchasing from the Trust shares if such
purchases are limited (except for reasonable allowances for clerical errors,
delays and errors of transmission and cancellation of orders) to purchases for
the purpose of filling purchase orders received by such distributor, and
provided that orders to purchase from the Trust are entered with the Trust upon
receipt by such distributor of such purchase orders.
--6--
<PAGE>
(b) Such distributor from maintaining a market for shares of the Trust
as agent for the Trust.
(c) The purchase at any time from the Trust or from such distributor of
shares issued by the Trust by any officer, Director or Trustee of the Trust, of
its investment adviser or of such distributor at the price available to the
public at the moment of such purchase, or, to the extent that such person is a
shareholder, at the price available to shareholders of the Trust generally at
the moment of such purchase.
10.2 Dealings with Affiliates. No officer, Trustee or agent of the
Trust shall deal for or on behalf of the Trust with himself as principal or
agent, or with any partnership, association or corporation in which he has a
material financial interest, provided that the foregoing provision shall not
prevent:
(a) Officers and Trustees of the Trust from buying, holding or selling
shares in the Trust or from being officers or Directors of or financially
interested in the investment adviser or distributor, if any, of the Trust;
(b) Purchases of investments for the portfolio of the Trust or sales of
investments owned by the Trust through a securities dealer who is, or one or
more of whose partners, stockholders, officers or Directors is, an officer or
Trustee of the Trust, if such transactions are handled in the capacity of broker
only and commissions charged to the Trust do not exceed customary brokerage
charges for such services;
(c) Employment of legal counsel, registrar, transfer agent, dividend
disbursing agent or custodian who is, or has a partner, stockholder, officer or
director who is, an officer or Trustee of the Trust, if only customary fees are
charged for services to the Trust;
(d) Sharing statistical, research and management expenses, including
office hire and services, with any other company in which an officer or Trustee
of the Trust is an officer or director or financially interested;
(e) Transactions for which an exemption has been obtained pursuant to
Section 17(a) of the Investment Company Act of 1940.
10.3 Notice of Ownership. The Secretary of the Trust shall request each
officer and Director or Trustee of the Trust and of its investment adviser to
notify the Trust at least quarter annually of the indentity of all issuers whose
securities are held by the Trust of which such officer, Director or Trustee owns
as much as one-half of one per cent (.5%) of the outstanding shares or
securities, or both (taken at market value).
--7--
<PAGE>
10.4 Loans. The Trust shall make no loans to any officer, Trustee or
employee of the Trust or to the investment adviser or distributor, if any, of
the Trust or to their respective officers, directors or employees.
ARTICLE 11
Amendments to the By-Laws
11.1 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 one or more writings signed by such a majority.
The foregoing By-Laws were adopted on February 7, 1989.
/s/ Constantine Hutchins, Jr.
--------------------------------
Constantine Hutchins, Jr.
Clerk
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Exhibit (2)(b)
State Street Growth Trust
Amendment No. 1 to the By-Laws
The first sentence of Section 3.6 of Article III of the By-Laws of the
State Street Growth Trust is hereby amended to read as follows:
"Unless otherwise determined by the Trustees, the President shall be
the Chief Executive Officer of the Trust."
Effective as of: /s/ Constantine Hutchins, Jr.
September 30, 1992 -----------------------------
Constantine Hutchins, Jr.
Secretary
Exhibit (6)(a)
DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT effective as of February 17, 1993 , by and
between State Street Research Investment Services, Inc., a corporation organized
under the laws of the Commonwealth of Massachusetts having its place of business
in Boston, Massachusetts (the "Distributor"), and State Street Growth Trust, a
Massachusetts business trust having its principal place of business in Boston,
Massachusetts (the "Trust"), which Trust offers and proposes to offer shares of
beneficial interest in different series representing interests in separate
portfolios of assets (each series being referred to herein as a "Fund" and such
series being referred to herein collectively as the "Funds").
WITNESSETH:
In consideration of the agreements herein contained and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties, it is agreed:
1. Appointment of Distributor.
(a) Appointment. The Trust hereby appoints the Distributor as its agent
to sell and distribute shares of State Street Research Growth Fund (the "Initial
Fund") and the Distributor hereby accepts such appointment and agrees during the
term of this Agreement to provide the services and to assume the obligations
herein set forth. In the event that the Trust establishes one or more series of
shares other than the Initial Fund with respect to which it desires to retain
the Distributor to serve as distributor and principal underwriter hereunder, it
shall so notify the Distributor in writing. If the Distributor is willing to
render such services, it shall so notify the Trust in writing, whereupon such
series of shares shall become a Fund hereunder. In such event a writing signed
by both the Trust and the Distributor shall be annexed hereto as a part hereof
indicating that such additional series of shares has become a Fund hereunder.
(b) Sales of Shares. Shares of each Fund shall be sold at the offering
price thereof as from time to time determined in the manner herein provided. The
Trust agrees that it will not, without the Distributor's consent, sell or agree
to sell any shares of a Fund otherwise than through the Distributor, except that
the Trust may (a) sell shares for not less than the net asset value thereof as
an investment to such persons or classes of persons as may be indicated in the
Prospectus of the Trust as amended and in effect from time to time; (b) issue or
sell shares for not less than the net asset value thereof directly to holders of
shares of any Fund upon such terms and for such consideration, if any, as it may
determine, whether in connection with the distribution of subscription or
purchase
<PAGE>
rights, the payment or reinvestment of distributions or dividends, the exercise
of any applicable reinvestment privilege, or otherwise; (c) issue or sell shares
for not less than the net asset value thereof of any Fund to the shareholders of
any other Fund or investment company in connection with the exercise of exchange
privileges offered by the Trust; and (d) issue shares for not less than the net
asset value thereof in connection with a merger, consolidation or acquisition of
assets on such basis as may be authorized or permitted under the Investment
Company Act of 1940, as amended (the "1940 Act").
2. Basis of Sale of Shares: Selected Dealers. The Distributor does not
agree to sell any specific number of shares. Shares will be sold by the
Distributor as agent for the Funds and the Trust only against orders therefor.
The Distributor will not purchase shares except as agent for the Trust.
Notwithstanding anything herein to the contrary, the Trust may terminate,
suspend or withdraw the offering of shares whenever, in its sole discretion, it
deems such action desirable. In connection with its performance of services
hereunder, the Distributor may engage other persons to act as selected dealers.
3. Compensation.
(a) Offering Price/Sales Charge. The offering price for shares of any
Fund of the Trust shall be the "net asset value per share" for that Fund
determined in accordance with the Master Trust Agreement of the Trust, as
amended (the "Master Trust Agreement"), plus a sales charge, if any, payable to
the Distributor as set forth in the Trust's Prospectus as from time to time
amended and in effect. The Distributor may reallow such portions of such sales
charges as dealer concessions to dealers through whom sales are made as the
Distributor may determine consistent with the terms of the Trust's Prospectus as
from time to time amended and in effect; provided, however, that the sales
charge to each purchaser of shares shall not exceed that set forth for such
category of purchaser in the Trust's Prospectus as from time to time amended and
in effect. The Distributor may also pay from its own funds a commission, if any,
with respect to sales to the extent consistent with and as contemplated by the
Trust's Prospectus as from time to time amended and in effect. The net asset
value per share for each Fund shall be determined at such time and on such days
as are established by the Board of Trustees of the Trust from time to time.
(b) 12b-1 Expenses. In the event that the Trust adopts a distribution
plan pursuant to Rule 12b-1 under the 1940 Act (the "12b-1 Plan"), the
Distributor agrees to fulfill any obligations it may have under the 12b-1 Plan.
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<PAGE>
4. Manner of Offering. The Distributor will comply with the securities laws
of any jurisdiction in which it sells, directly or indirectly, any shares of the
Trust. The Distributor also agrees to furnish to the Trust sufficient copies of
any sales literature it intends to use in connection with any sales of shares in
adequate time for the Trust to review such sales literature. The Distributor
agrees that it will be responsible for filing and clearing all such sales
literature with the proper authorities before the same is put in use to the
extent required by applicable law, and not to use the same until so filed and
cleared.
The Distributor and the Trust each shall have the right to accept or reject
orders for the purchase of shares of the Trust. Any consideration which the
Distributor may receive in connection with a rejected purchase order will be
returned promptly to the prospective purchaser. The Distributor agrees promptly
to issue confirmations of all accepted purchase orders and to transmit a copy of
such confirmations to the Trust, or, if so directed, to any duly appointed
transfer or shareholder servicing agent of the Trust. If the originating dealer,
if any, shall fail to make timely settlement of its purchase order in accordance
with the rules of the National Association of Securities Dealers, Inc. or other
applicable requirements, the Distributor shall have the right to cancel such
purchase order and to hold the originating dealer responsible. The Distributor
agrees promptly to reimburse the Trust for any amount by which the Trust's
losses attributable to any such cancellations or to accepted purchase orders
exceed gains realized by the Trust for either of such reasons in respect of
other purchase orders. The Trust shall register or cause to be registered all
shares sold by the Distributor pursuant to the provisions hereof in such name or
names and amounts as the Distributor may request from time to time.
The Distributor agrees that if any person tenders to the Trust for
redemption any shares purchased from the Trust within seven days of the
redemption request, the Distributor will promptly pay to the Trust the full
sales commission paid, if any, with respect to the shares so tendered for
redemption (in the case of sales by selected dealers, if any, such payment shall
be made promptly after the Distributor's receipt of the same from the selected
dealer responsible for the sale).
The Distributor hereby agrees to act as agent for the Trust in connection
with any share repurchase arrangements from time to time offered by the Trust in
accordance with the terms of the Trust's Prospectus as from time to time
amended.
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<PAGE>
5. Securities Law. The Trust has delivered to the Distributor a copy of its
current Prospectus. The Trust agrees that it will use its best efforts to
continue the effectiveness of its Registration Statement under the Securities
Act of 1933, as amended (the "Securities Act"), and the 1940 Act. The Trust
further agrees to prepare and file any amendments to such Registration Statement
and any supplemental data as may be necessary in order to comply with the
Securities Act and the 1940 Act. The Trust is presently registered under the
1940 Act as an investment company, and it will use its best efforts to maintain
such registration and to comply with the requirements of said Act.
At the Distributor's request, the Trust will take such steps as may be
necessary and feasible to qualify shares of the Funds for sale in states,
territories or dependencies of the United States of America, in the District of
Columbia and in foreign countries, in accordance with the laws thereof, and to
renew and extend any such qualification; provided, however, that the Trust shall
not be required to qualify shares or to maintain the qualification of shares in
any state, territory, dependency, district or country where it shall deem such
qualification disadvantageous to the Trust.
The Distributor agrees that it will (i) not use, distribute or disseminate
or authorize the use, distribution or dissemination by others in connection with
the sale of shares of the Funds, any statement, other than those contained in
the Trust's current Prospectus, except such supplemental literature or
advertising as shall be approved by the Trust, (ii) conform to the requirements
of all state and federal laws and the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. relating to the sale of shares of the
Trust (including, without limitation, the maintenance of effective broker-dealer
registrations as required), and (iii) observe and be bound by all the provisions
of the Master Trust Agreement (and of any fundamental policies adopted by the
Trust pursuant to the 1940 Act, notice of which shall have been given to the
Distributor) which at the time in any way require, limit, restrict or prohibit
or otherwise regulate any action on the part of the Distributor.
The Distributor further agrees that:
(a) the Distributor shall furnish to the Trust any information with
respect to the Distributor within the purview of any reports or registrations
required to be filed with any governmental authority; and
(b) the Distributor will not make any representations inconsistent
with the Registration Statement of the Trust filed under the Securities Act,
as from time to time amended and in effect.
-4-
<PAGE>
6. Allocation of Expenses.
(a) The Funds, either directly or through their investment adviser or
investment advisers, will be responsible for, and shall pay their allocable
portions of the expenses of:
(i) providing all necessary services, including fees and
disbursements of counsel, related to the preparation, setting in type, printing
and filing of any registration statement and/or prospectus required under the
Securities Act or the 1940 Act or under state securities laws covering their
shares, and all amendments and supplements thereto, the mailing of any such
prospectus to existing shareholders, and preparing, setting in type, printing
and mailing of periodic reports to existing shareholders;
(ii) the cost of all registration or qualification fees relating to
the Funds' shares, including the fees or expenses of qualifying the Trust as a
broker or dealer under laws of any state, if any;
(iii) the cost of preparing temporary and permanent share
certificates for shares, if any; and
(iv) any and all federal and state issue and/or transfer taxes
payable upon the issue by or (in the case of treasury shares) transfer from a
Fund of the shares distributed hereunder.
(b) The Distributor agrees that, after the Trust's Prospectus and
periodic reports have been set in type, it will bear the expense of printing and
distributing any copies thereof which are to be used in connection with the
offering of shares to prospective investors. The Distributor further agrees that
it will bear the expenses of preparing, printing and distributing any other
literature used by the Distributor or furnished by it for use in connection with
the offering of the shares for sale to the public, and any expenses of
advertising in connection with such offering. The Distributor will also pay fees
and expenses related to its registrations as a broker dealer and fees for
services rendered by the Trust's transfer agent on behalf of the Distributor.
(c) The Funds will be responsible for, and shall pay the expenses of,
maintaining shareholder accounts and furnishing or causing to be furnished to
each shareholder a statement of his account.
7. Distributor Is Independent Contractor. The Distributor shall be an
independent contractor. The Distributor is responsible for its own conduct, for
the employment, control and conduct of its agents and employees and for injury
to such agents or employees or to others through its agents or employees. The
Distributor assumes full responsibility for its agents and
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<PAGE>
employees under applicable laws and agrees to pay all employer taxes relating
thereto.
8. Term and Termination; Amendment.
(a) Term and Termination. This Agreement shall become effective as of
the effective date noted above with respect to each Initial Fund; and, with
respect to any additional Fund, (i) on the date of receipt by the Trust of
notice from the Distributor in accordance with Section l(a) hereof that the
Distributor is willing to serve as Distributor with respect to such Fund, or
(ii) such other date with respect to an additional Fund as the Trust and the
Distributor mutually agree. Unless terminated as herein provided, this Agreement
shall remain in full force and effect with respect to each Initial Fund until
the date which is two years after the effective date of this Agreement with
respect to such Initial Fund, and, with respect to each additional Fund, for two
years from the date on which such Fund becomes a Fund hereunder. Subsequent to
such initial periods of effectiveness this Agreement shall continue in full
force and effect, subject to the last sentence of this Section 8(a), for
successive one-year periods with respect to each Fund so long as such
continuance with respect to such Fund is approved at least annually (a) by
either the Trustees of the Trust or by vote of a majority of the outstanding
voting securities (as defined in the 1940 Act) of such Fund, and (b) in either
event, by the vote of a majority of the Trustees of the Trust who are not
parties to this Agreement or "interested persons" (as defined in the 1940 Act)
of any such party of the Trust and who have no direct or indirect interest in
the operation of any 12b-1 Plan or this Agreement, cast in person at a meeting
called for the purpose of voting on such approval. This Agreement may be
terminated with respect to the Trust or any Fund at any time, without payment of
any penalty, by a vote of (a) a majority of the Trustees who are not "interested
persons" of the Trust (as defined in the 1940 Act) and who have no direct or
indirect financial interest in the operation of any 12b-1 Plan or this Agreement
or (b) a majority of the outstanding voting securities of the Trust or that
Fund, or by the Distributor, as the case may be, in each case on sixty (60)
days' prior written notice of the other party.
(b) Amendment. Any amendment to this Agreement shall become effective
with respect to a Fund upon approval in writing of the Distributor and the Trust
(subject in the latter case to approval by a majority of the Trustees and a
majority of the Trustees who are not "interested persons" of the Trust (as
defined in the 1940 Act) and who have no direct or indirect financial interest
in the operation of any 12b-1 Plan); provided, however, that amendments relating
to any 12b-1 Plan shall not require the consent of the Distributor.
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<PAGE>
(c) Approval, Amendment or Termination by Individual Fund. Any
approval, amendment or termination of this Agreement with respect to any Fund
shall be effective to continue, amend or terminate this Agreement with respect
to such Fund notwithstanding (i) that such action has not been approved with
respect to any other Fund affected thereby, and (ii) that such action has not
been approved by the shareholders of such Fund, unless such action shall be
required by any applicable law or otherwise.
9. Assignment. The Distributor may not make any assignment, as defined
under the 1940 Act, of this Agreement and this Agreement shall automatically
terminate in the event of an attempted assignment by the Distributor; provided,
however, that the Distributor may employ or enter into agreements with such
other person, persons, corporation or corporations, as it shall determine in
order to assist it in carrying out this Agreement, including, without
limitation, selected dealers as contemplated by Section 2.
10. Indemnification by Distributor. The Distributor agrees to indemnify and
hold harmless the Trust or any other person who has been, is, or may hereafter
be an officer, Trustee, employee or agent of the Trust against any loss, damage
or expense reasonably incurred by any of them in connection with any claim or in
connection with any action, suit or proceeding to which any of them may be a
party, which arises out of or is alleged to arise out of or is based upon any
violation of any of its representations or covenants herein contained or any
untrue statement or alleged untrue statement of a material fact, or the omission
or alleged omission to state a material fact necessary to make the statements
made not misleading, on the part of the Distributor or any agent or employee of
the Distributor or any other person for whose acts the Distributor is
responsible or is alleged to be responsible (such as any selected dealer or
person through whom sales are made pursuant to an agreement with the
Distributor), whether made orally or in writing, unless such statement or
omission was made in or in reliance upon written information furnished by the
Trust. The term "expenses" for purposes of this and the next paragraph includes
reasonable attorneys' fees and amounts paid in satisfaction of judgments or in
settlements which are made with the Distributor's consent. The foregoing rights
of indemnification shall be in addition to any other rights to which any of the
foregoing indemnified parties may be entitled as a matter of law.
11. Indemnification by Trust. The Trust agrees to indemnify and hold
harmless the Distributor and each person who has been, is, or may hereafter be
an officer, director, employee or agent of the Distributor against any loss,
damage or expense reasonably incurred by any of them in connection with any
claim or in connection with any action, suit or proceeding to which any of them
may be party, which arises out of or is alleged to arise out of or is based upon
a violation of any of its covenants
-7-
<PAGE>
herein contained or any untrue or alleged untrue statement of material fact, or
the omission or alleged omission to state a material fact necessary to make the
statements made not misleading, in a Registration Statement or Prospectus of the
Trust, or any amendment or supplement thereto, unless such statement or omission
was made in reliance upon written information furnished by the Distributor. The
foregoing rights of indemnification shall be in addition to any other rights to
which any of the foregoing indemnified parties may be entitled as a matter of
law. Nothing contained herein shall relieve the Distributor of any liability to
the Trust or its 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 reckless disregard of its obligations and duties
hereunder.
12. Non-Exclusive Agreement. The services of the Distributor to the Trust
hereunder shall not be deemed to be exclusive, and the Distributor shall be free
to (a) render similar services to, and act as underwriter or distributor in
connection with the distribution of shares of, other investment companies, and
(b) engage in any other businesses and activities from time to time.
13. Governinq Law: Counterparts. This Agreement shall be construed in
accordance with the laws of the Commonwealth of Massachusetts. This Agreement
may be executed in any number of counterparts, each of which shall be deemed to
be an original, but such counterparts shall, together, constitute only one
instrument.
14. Prior Agreements Superseded; Construction. This Agreement supersedes
any prior agreement relating to the subject matter hereof between the parties
hereto. Where the context of this Agreement so permits, each of the masculine,
feminine and neuter genders shall be deemed to denote the other two genders, the
singular to denote the plural and the plural to denote the singular. Without
limiting the generality of the foregoing, all references to the Trust's
Prospectus shall include all Prospectuses thereunder.
15. Notices. Notices under this Agreement shall be in writing and shall be
addressed, and delivered or mailed postage prepaid, to the other party at such
address as such other party may designate from time to time for the receipt of
such notices. Until further notice to the other party, the address of each party
to this Agreement for this purpose shall be One Financial Center, Boston,
Massachusetts 02111.
16. Limitation of Liability. The term "State Street Growth Trust" means and
refers to the Trustees from time to time serving under the Master Trust
Agreement of the Trust dated February 5, 1993 as the same may subsequently have
been, or subsequently may be, amended. It is expressly agreed that the
obligations of the
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<PAGE>
Trust hereunder shall not be binding upon any of the Trustees, shareholders,
nominees, officers, agents or employees of the Trust as individuals or
personally, but shall bind only the trust property of the Trust, as provided in
the Master Trust Agreement of the 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 nor such
execution and delivery shall be deemed to have been made individually or to
impose any personal liability, but shall bind only the trust property of the
Trust as provided in its Master Trust Agreement. The Master Trust Agreement of
the Trust further provides, and it is expressly agreed, that each Fund of the
Trust shall be solely and exclusively responsible for the payment of its debts,
liabilities and obligations and that no other Fund shall be responsible or
liable for the same.
IN WITNESS WHEREOF, this Agreement has been executed for the
Distributor and the Trust by their duly authorized officers, as of the date
first set forth above.
State Street Research
Investment Services, Inc.
By: /s/ Donald E. Webber
--------------------------
State Street Growth Trust
By: /s/ Gerard P. Maus
--------------------------
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Exhibit (6)(c)
BANK AND BANK AFFILIATED BROKER-DEALER AGREEMENT
(FULLY DISCLOSED BASIS)
Dated as of: _____________
To: _________________________________________________________
(Exact legal name of bank or bank affiliate)
_________________________________________________________
(Address)
_________________________________________________________
_________________________________________________________
(Attn)
We have been appointed to serve as an agent and a principal underwriter
as defined in the Investment Company Act of 1940 (the "1940 Act") for the
purpose of selling and distributing shares (the "Shares") of each of the
portfolio series, as specified from time to time, of certain investment
companies, including, but not limited to, the MetLife-State Street trusts, the
State Street trusts and MetLife Portfolios, Inc. Hereinafter the specified
portfolio series shall be denoted individually as "Fund" and collectively as
"Funds," and the investment companies shall be denoted individually as
"Investment Company" and collectively as "Investment Companies" solely for
purposes of this agreement. We are hereby inviting you, subject to the terms and
conditions set forth below, to make available to your customers Shares of the
Funds.
1. Acceptance of Orders.
(a) The customers in question are for all purposes your
customers and not our customers. We shall execute transactions for each of your
customers only upon your
<PAGE>
authorization, it being understood in all cases that (i) you are acting as the
agent for the customer; (ii) the transactions are subject to the federal and
state securities laws without recourse against you by the customer; (iii) as
between you and the customer, the customer will have beneficial ownership of the
securities; (iv) each transaction is initiated solely upon the order of the
customer; (v) each transaction is for the account of the customer and not for
your account; and (vi) you shall not have any authority in any transactions to
act as our agent or agent of the Funds.
(b) Orders received from you will be accepted by us and the
Investment Companies only at the public offering price applicable to each order.
The public offering price shall be the net asset value per Share plus any sales
charge payable upon the purchase of Shares of such Fund or class thereof as
specified in the then current prospectus applicable to such Shares, as amended
and in effect from time to time (the "Prospectus"). The public offering price
may reflect scheduled variations in, or the elimination of the sales charge on
sales of the Shares either generally to the public or in connection with special
purchase plans, as described in the Prospectus and related Statement of
Additional Information. You agree that you will apply any scheduled variation
in, or elimination of, the sales charge uniformly to all offerees in the class
specified in the Prospectus. Upon acceptance of an order we shall confirm the
order directly to the customer on a fully disclosed basis in writing and a copy
of each confirmation shall be sent simultaneously to you. The procedures
relating to the handling of orders shall be subject to instructions which we
shall provide from time to time to you. We and the Investment Companies reserve
the right to reject any purchase request in our sole discretion.
2. Agency Commission. Any compensation received by you with respect to
the sale of shares of a Fund shall be deemed to be charged by you to your
customer as an agency commission. The schedule of sales charges, commissions and
dealer concessions described in the applicable Prospectus and related Statement
of Additional Information shall apply and the amount of the agency commission
shall equal the applicable amount payable as compensation to a dealer in
connection with the sale of shares of a Fund. You agree that you will not
combine customer orders to reach breakpoints in commissions for any purpose
unless authorized by the Prospectus or in writing. You agree that you will apply
any scheduled variation, or elimination of, the sales charge uniformly to all
offerees in the class specified in the
2
<PAGE>
Prospectus. All compensation amounts are subject to change without notice by us.
3. Rule 12b-1 Plans.
(a) As consideration for your providing services in our
promotion of the sale of Shares of certain Funds or classes thereof which have a
sales charge and which have adopted Distribution Plans pursuant to Rule 12b-1
under the 1940 Act, and for providing personal services to, and/or the
maintenance of the accounts of, your customers who invest in and own such Shares
of such Funds or classes thereof, we shall pay you such fee as is described in
the applicable Prospectus and otherwise established by us from time to time, on
Shares which are owned of record by your firm as nominee for your customers or
which are owned by those customers of your firm whose records, as maintained by
such Fund or its agent, designate your firm as the customer's dealer of record.
The fees payable hereunder shall be computed and accrued daily and for each
month shall be based on the average daily net asset value of the relevant Shares
which remain outstanding during such month. No such fee will be paid to you with
respect to Shares redeemed or repurchased by such Fund within seven business
days after the date of our confirmation of such purchase. No such fee will be
paid to you with respect to any of your customers if the amount of such fee
based upon the value of such customer's Shares will be less than $1.00.
(b) The provisions of this Paragraph 3 may be terminated with
respect to any Fund or class thereof in accordance with the provisions of Rule
12b-1 under the 1940 Act or the rules of the National Association of Securities
Dealers, Inc. (the "NASD") and thereafter no such fee will be paid to you.
(c) Consistent with NASD policies as amended or interpreted
from time to time (i) you waive payment of amounts due from us which are funded
by fees we receive under such Distribution Plans until we are in receipt of the
fees on the relevant shares of a Fund, and (ii) our liability for amounts
payable to you is limited solely to the proceeds of the fees receivable to us on
the relevant shares.
4. Redemption and Repurchase of Shares. If any Shares with a sales
charge are sold through you hereunder and are redeemed by such Fund or
repurchased by us as agent for such Fund within seven business days after
confirmation of the original purchase, it is agreed that you shall forfeit your
right to the entire agency commission and any other related
3
<PAGE>
commission received by you on such Shares. We will notify you of any such
repurchase or redemption within ten business days from the date thereof and you
shall forthwith refund to us the entire agency commission and other commission,
if any, received by you on such sale. We agree, in the event of any such
repurchase or redemption, to refund to such Fund our share of the sales charge
retained by us, if any, and upon receipt from you of the refund of the agency
commission allowed to you, to pay such refund forthwith to such Fund.
If you purchase Shares from any customer in connection with repurchase
arrangements offered by an Investment Company, you agree to pay such customer
not less than the applicable repurchase price as established by the Prospectus.
If you act as agent for your customer in selling Shares to a Fund, you agree not
to charge your customer more than a fair commission for handling the
transaction. Any order placed by you for the repurchase of Shares of a Fund is
subject to the timely receipt by the Fund's transfer agent of all required
documents in good order. If such documents are not received within a reasonable
time after the order is placed, the order is subject to cancellation, in which
case you agree to be responsible for any loss resulting to the Fund or to us
from such cancellation.
5. Payment for Shares.
(a) Payment for Shares sold through you shall be made on or
before the settlement date specified in the applicable confirmation, at the
office of our clearing agent, and by check payable to the order of such Fund or,
if applicable, by Federal Funds wire for credit to such Fund in accordance with
the procedures and conditions described in the Prospectus. Each Fund reserves
the right to delay issuance or transfer of Shares until such check has cleared.
If such payment is not received by us, we reserve the right, without notice,
forthwith to cancel the sale. Unless other instructions are received by us on or
before the settlement date, orders accepted by us may be placed in an Open
Account in your name. If such payment or instructions are not timely received by
us, we may hold you responsible for any expense or loss, including loss of
profit, suffered by us or by such Fund resulting from your failure to make
payment as aforesaid.
(b) You will also act as agent in all purchases by a
shareholder for whom, on the records of the Fund or its Shareholders' Servicing
and Transfer Agent as defined in the Prospectus, you are the designated dealer
of record of Shares where payments are sent directly by such shareholders to the
4
<PAGE>
Agent, and you authorize and appoint the Agent to execute and confirm such
purchases to such shareholder on your behalf.
6. Manner of Offering.
(a) No person is authorized to make any representations
concerning Shares except those contained in the then current applicable
Prospectuses and in sales literature and other materials issued by us
supplemental to such Prospectuses. Shares of Funds shall only be offered by
means of the then current applicable Prospectus and you shall be obligated to
deliver such Prospectus to your customers in accordance with all applicable
federal and state securities laws. All offerings of Shares by you shall be
subject to the conditions set forth in the applicable Prospectus (including the
condition relating to minimum purchases) and to the terms and conditions herein
set forth. We will furnish additional copies of the Prospectuses and such sales
literature and other material issued by us in reasonable quantities upon
request. You will provide all customers with the applicable Prospectus prior to
or at the time such customer purchases Shares and will forward promptly to us
any customer request for a copy of the applicable Statement of Additional
Information. Sales and exchanges of Shares may only be made in those states and
jurisdictions where the Shares are registered or qualified for sale to the
public. We agree to advise you currently of the identity of those states and
jurisdictions in which the Shares are registered or qualified for sale, and you
agree to indemnify us and/or the Funds for any claim, liability, expense or loss
in any way arising out of a sale of Shares in any state or jurisdiction in which
such Shares are not so registered or qualified.
(b) You agree to conform to any compliance or offering
standards that we may establish from time to time, including without limitation
standards as to when classes of Shares may appropriately be sold to particular
investors.
(c) We recognize that you may be subject to the provisions of
the Glass-Steagall Act and other laws governing, among other things, the conduct
of activities by federal or state chartered or supervised banks and affiliated
organizations. BECAUSE ONLY YOU WILL HAVE A DIRECT RELATIONSHIP WITH YOUR
CUSTOMER, YOU COVENANT AND AGREE TO COMPLY WITH ALL LAWS AND REGULATIONS
INCLUDING THOSE OF THE REGULATORY AUTHORITIES DIRECTLY APPLICABLE TO YOU AND ANY
OTHER FEDERAL OR STATE REGULATORY BODY HAVING JURISDICTION OVER YOU OR YOUR
CUSTOMERS TO THE EXTENT APPLICABLE TO SECURITIES PURCHASES HEREUNDER FOR THE
ACCOUNT OF YOUR CUSTOMER.
5
<PAGE>
(d) We and the Investment Companies shall have the right to
accept or reject orders for the purchase of Shares of any Fund or class thereof.
It is understood that for the purposes hereof no Share shall be considered to
have been sold by you and no compensation will be payable to you with respect to
any order for Shares which is rejected by us or an Investment Company. Any
consideration which you may receive in connection with a rejected purchase order
is to be returned promptly by you. Confirmations of all accepted purchase orders
will be transmitted by the applicable Investment Company or us to investors, or,
if so directed, to any duly appointed transfer or shareholder servicing agent of
the Fund or class of Shares thereof.
7. Your Status.
Nothing herein shall make you a partner with us or render our
relationship an association. You are responsible for your own conduct, for the
employment, control and conduct of your employees and agents and for injury to
such employees or agents or to others through such employees or agents. You
assume full responsibility for your employees and agents under applicable laws
and agree to pay all employer taxes relating thereto.
8. No Liability.
As distributor of the Shares, we shall have full authority to take such
action as we may deem advisable in respect of all matters pertaining to the
distribution of such Shares. We shall not be under any liability to you, except
for lack of good faith and for obligations expressly assumed by us in this
Agreement; provided, however, that nothing in this sentence shall be deemed to
relieve any of us from any liability imposed by the Securities Act of 1933, as
amended.
9. Term of Contract; Amendments; Termination.
This Agreement shall become effective on the date hereof. We and each
Fund reserve the right, in our discretion upon notice to you, to amend, modify
or terminate this Agreement at any time, to change the sales charges,
commissions, concessions and other fees described in the applicable Prospectus
or to suspend sales or withdraw the offering of Shares of a Fund or class of
Shares thereof entirely. You agree that any order to purchase Shares placed by
you after notice of any amendment to this Agreement has
6
<PAGE>
been sent to you shall constitute your agreement to such amendment.
10. Miscellaneous.
This Agreement supersedes any and all prior agreements between us.
References to a Selected Dealer Agreement, dealer agreement or sales agreement
contained in a Prospectus, new account Application, Statement of Additional
Information or related documents with respect to Shares shall be deemed to
include this Agreement and references to dealer(s) or securities dealer(s) shall
be deemed to include you. All communications to us should be sent to the above
address. Any notice to you shall be duly given if mailed or telefacsmiled to you
at the address specified by you above. This Agreement shall be effective when
accepted by you below and shall be construed under the laws of the Commonwealth
of Massachusetts.
11. Bank or Bank Affiliate.
Check applicable box:
[ ] (a) You represent and warrant that you are a member of the NASD or
in the alternative, that you are a foreign dealer not eligible for membership in
the NASD. You and we agree to abide by the Rules and Regulations of the NASD
including Rule 26 of its Rules of Fair Practice, and all applicable federal,
state, and foreign laws, rules and regulations.
[ ] (b) [Note: This box relates to "banks." Before checking this box,
please be aware that certain financial institutions such as savings and loan
associations and credit unions are not deemed to be a "bank" under the Exchange
Act of 1934, as amended (the "Exchange Act") and may need to register as a
broker/dealer with the Securities and Exchange Commission.] You represent and
warrant to us that (i) you are a "bank" as such term is defined in Section
3(a)(6) of the Exchange Act; (ii) you are a duly organized and validly existing
"bank" in good standing under the laws of the jurisdiction in which you are
organized; (iii) all authorization (if any) required for your lawful execution
of this Agreement and your performance hereunder have been obtained; and (iv)
this Agreement will constitute a valid and binding agreement, enforceable
against you in accordance with its terms. You agree to give written notice to us
promptly in the event that you cease to be a "bank" as such term is defined in
Section 3(a)(6) of the Exchange Act. Upon such
7
<PAGE>
written notice, this Agreement shall automatically terminate. You also agree to
abide by all of the Rules of Fair Practice of the NASD applicable to the sale of
investment company shares to your customers.
The following provision, as marked, applies to this Agreement.
[ ] This document constitutes an amendment to and restatement of the
Agreement currently in effect between you and us.
[ ] Please confirm your agreement hereto by signing and returning the
enclosed counterpart of this Agreement at once to: State Street Research
Investment Services, Inc., One Financial Center, Boston, Massachusetts 02111,
Attention: President. Upon receipt thereof, this Agreement and such signed
duplicate copy will evidence the agreement between us.
State Street Research
Investment Services, Inc.
(Distributor)
By: _____________________________
We have checked box 11(a) or 11(b) above and accept this Agreement:
*________________________________________________________________________*
(Exact legal name of bank or bank affiliate)
By: ___________________________________________________
8
Exhibit (8)(a)
CUSTODIAN CONTRACT
Between
STATE STREET GROWTH TRUST
and
STATE STREET BANK AND TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
Page
----
1. Employment of Custodian and Property to be Held By
It ........................................................... 1
2. Duties of the Custodian with Respect to Property of the
Fund Held by the Custodian in the United States .............. 3
2.1 Holding Securities .................................... 3
2.2 Delivery of Securities ................................ 3
2.3 Registration of Securities ............................ 8
2.4 Bank Accounts ......................................... 9
2.5 Availability of Federal Funds ......................... 10
2.6 Collection of Income .................................. 10
2.7 Payment of Fund Monies ................................ 11
2.8 Liability for Payment in Advance of Receipt of
Securities Purchased .................................. 14
2.9 Appointment of Agents ................................. 15
2.10 Deposit of Fund Assets in Securities System ........... 15
2.10A Fund Assets Held in the Custodian's Direct Paper
System ................................................ 18
2.11 Segregated Account .................................... 20
2.12 Ownership Certificates for Tax Purposes ............... 21
2.13 Proxies ............................................... 22
2.14 Communications Relating to Portfolio Securities ....... 22
3. Duties of the Custodian with Respect to Property of
the Fund Held Outside of the United States ................... 23
3.1 Appointment of Foreign Sub-Custodians ................. 23
3.2 Assets to be Held ..................................... 23
3.3 Foreign Securities Depositories ....................... 24
3.4 Segregation of Securities ............................. 24
3.5 Agreements with Foreign Banking Institutions .......... 25
3.6 Access of Independent Accountants of the Fund ......... 25
3.7 Reports by Custodian .................................. 26
3.8 Transactions in Foreign Custody Account ............... 26
3.9 Liability of Foreign Sub-Custodians ................... 27
3.10 Liability of Custodian ................................ 28
3.11 Reimbursement for Advances ............................ 29
3.12 Monitoring Responsibilities ........................... 29
3.13 Branches of U.S. Banks ................................ 30
4. Payments for Sales or Repurchase or Redemptions
of Shares of the Fund ........................................ 31
5. Proper Instructions .......................................... 32
6. Actions Permitted Without Express Authority .................. 32
7. Evidence of Authority ........................................ 33
8. Duties of Custodian With Respect to the Books of Account
and Calculation of Net Asset Value and Net Income ............ 34
<PAGE>
9. Records ...................................................... 34
10. Opinion of Fund's Independent Accountants .................... 35
11. Reports to Fund by Independent Public Accountants ............ 35
12. Compensation of Custodian .................................... 36
13. Responsibility of Custodian .................................. 36
14. Effective Period, Termination and Amendment .................. 38
15. Successor Custodian .......................................... 40
16. Interpretive and Additional Provisions ....................... 41
17. Additional Funds ............................................. 42
18. Massachusetts Law to Apply ................................... 42
19. Prior Contracts .............................................. 42
20. Disclaimer ................................................... 42
<PAGE>
CUSTODIAN CONTRACT
This Contract between State Street Growth Trust, a business trust
organized and existing under the laws of Massachusetts, having its principal
place of business at One Financial Center, Boston, Massachusetts, 02111
hereinafter called the "Fund", 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 Fund 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 Fund intends to initially offer shares in one series, the
State Street Growth Fund (such series together with all other series
subsequently established by the Fund and made subject to this Contract in
accordance with paragraph 17, being herein referred to as the "Portfolio(s)");
NOW THEREFOR, 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 Fund hereby employs the Custodian as the custodian of the assets of
the Portfolios of the Fund, including securities which the Fund, on behalf of
the applicable Portfolio desires to be held in places within the United States
("domestic
<PAGE>
securities") and securities it desires to be held outside the United States
("foreign securities") pursuant to the provisions of the Declaration of Trust.
The Fund on behalf of the Portfolio(s) agrees to deliver to the Custodian all
securities and cash of the Portfolios, and all payments of income, payments of
principal or capital distributions received by it with respect to all securities
owned by the Portfolio(s) from time to time, and the cash consideration received
by it for such new or treasury shares of beneficial interest of the Fund
representing interests in the Portfolios, ( Shares") as may be issued or sold
from time to time. The Custodian shall not be responsible for any property of a
Portfolio held or received by the Portfolio and not delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Article
5), the Custodian shall on behalf of the applicable Portfolio(s) from time to
time employ one or more sub-custodians, located in the United States but only in
accordance with an applicable vote by the Board of Trustees of the Fund on
behalf of the applicable Portfolio(s), and provided that the Custodian shall
have no more or less responsibility or liability to the Fund on account of any
actions or omissions of any sub-custodian so employed than any such
sub-custodian has to the Custodian. The Custodian may employ as sub-custodian
for the Fund's foreign securities on behalf of the applicable Portfolio(s) the
foreign banking institutions and foreign securities depositories designated in
Schedule A hereto but only in accordance with the provisions of Article 3.
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<PAGE>
2. Duties of the Custodian with Respect to Property of the Fund Held By the
Custodian in the United States
2.1 Holding Securities. The Custodian shall hold and physically segregate for
the account of each Portfolio all non-cash property, to be held by it in
the United States including all domestic securities owned by such
Portfolio, other than (a) securities which are maintained pursuant to
Section 2.10 in a clearing agency which acts as a securities depository
or in a book-entry system authorized by the U.S. Department of the
Treasury, collectively referred to herein as "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 of the Custodian
pursuant to Section 2.10A.
2.2 Delivery of Securities. The Custodian shall release and deliver domestic
securities owned by a Portfolio 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 Fund on behalf of the applicable Portfolio,
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 Portfolio and
receipt of payment therefor;
-3-
<PAGE>
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the
Portfolio;
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 Portfolio;
5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable; provided
that, in any such case, the cash or other consideration is to be
delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the name
of the Portfolio or into the name of any nominee or nominees of
the Custodian or into the name or nominee name of any agent
appointed pursuant to Section 2.9 or into the name or nominee
name of any sub-custodian appointed pursuant to Article 1; or for
exchange for a different number of bonds, certificates or other
evidence representing the same aggregate face amount or number of
units; provided that, in any such case, the new securities are to
be delivered to the Custodian;
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<PAGE>
7) Upon the sale of such securities for the account of the
Portfolio, 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 1oss 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
-5-
<PAGE>
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 Portfolio, but only against receipt of adequate collateral as
agreed upon from time to time by the Custodian and the Fund on
behalf of the Portfolio, 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 Portfolio prior to
the receipt of such collateral;
11) For delivery as security in connection with any borrowings by the
Fund on behalf of the Portfolio requiring a pledge of assets by
the Fund on behalf of the Portfolio, but only against receipt of
amounts borrowed;
12) For delivery in accordance with the provisions of any agreement
among the Fund on behalf of the Portfolio, the Custodian and a
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<PAGE>
broker-dealer registered under the Securities Exchange Act of
1934 (the Exchange Act") and a member of The National Association
of Securities Dealers, Inc. ("NASD"), relating to compliance with
the rules of The Options Clearing Corporation and of any
registered national securities exchange, or of any similar
organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Portfolio of
the Fund;
13) For delivery in accordance with the provisions of any agreement
among the Fund on behalf of the Portfolio, 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 and/or any Contract Market,
or any similar organization or organizations, regarding account
deposits in connection with transactions by the Portfolio of the
Fund;
14) Upon receipt of instructions from the transfer agent ("Transfer
Agent) for the Fund, for delivery to such Transfer Agent or to
the holders of shares in connection with distributions in kind,
as may be described
-7-
<PAGE>
from time to time in the currently effective prospectus and
statement of additional information of the Fund, related to the
Portfolio ("Prospectus"), in satisfaction of requests by holders
of Shares for repurchase or redemption; and
15) For any other proper corporate purpose, but only upon receipt of,
in addition to Proper Instructions from the Fund on behalf of the
applicable Portfolio, a certified copy of a resolution of the
Board of Trustees or of the Executive Committee signed by an
officer of the Fund and certified by the Secretary or an
Assistant Secretary, specifying the securities of the Portfolio
to be delivered, setting forth the purpose for which such
delivery is to be made, declaring such purpose to be a proper
corporate purpose, and naming the person or persons to whom
delivery of such securities shall be made.
2.3 Registration of Securities. Domestic securities held by the Custodian
(other than bearer securities) shall be registered in the name of the
Portfolio or in the name of any nominee of the Fund on behalf of the
Portfolio or of any nominee of the Custodian which nominee shall be
assigned exclusively to the Portfolio, unless the Fund has authorized in
writing the appointment of a nominee to
-8-
<PAGE>
be used in common with other registered investment companies having the
same investment adviser as the Portfolio, 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 Portfolio under the
terms of this Contract shall be in "street name" or other good delivery
form. If, however, the Fund directs the Custodian to maintain securities
in "street name", the Custodian shall utilize its best efforts only to
timely collect income due the Fund on such securities and to notify the
Fund 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 United States in the name of each Portfolio of
the Fund, 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 Portfolio, other than cash maintained by the
Portfolio in a bank account established and used in accordance with Rule
17f-3 under the Investment Company Act of 1940. Funds held by the
Custodian for a Portfolio may be deposited by it to its credit as
Custodian in the Banking Department
-9-
<PAGE>
of the Custodian or in such other banks or trust companies as it may in
its discretion deem necessary or desirable; provided, however, that every
such bank or trust company shall be qualified to act as a custodian under
the Investment Company Act of 1940 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 Portfolio be approved by vote
of a majority of the Board of Trustees of the Fund. 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 Availability of Federal Funds. Upon mutual agreement between the Fund on
behalf of each applicable Portfolio and the Custodian, the Custodian
shall, upon the receipt of Proper Instructions from the Fund on behalf of
a Portfolio, make federal funds available to such Portfolio as of
specified times agreed upon from time to time by the Fund and the
Custodian in the amount of checks received in payment for Shares of such
Portfolio which are deposited into the Portfolio's account.
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 domestic securities held hereunder to which
each Portfolio shall be entitled either by law or pursuant to custom in
the securities business, and shall
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<PAGE>
collect on a timely basis all income and other payments with respect to
bearer domestic 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 Portfolio'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 Portfolio
on securities loaned pursuant to the provisions of Section 2.2 (10) shall
be the responsibility of the Fund. The Custodian will have no duty or
responsibility in connection therewith, other than to provide the Fund
with such information or data as may be necessary to assist the Fund in
arranging for the timely delivery to the Custodian of the income to which
the Portfolio is properly entitled.
2.7 Payment of Fund Monies. Upon receipt of Proper Instructions from the Fund
on behalf of the applicable Portfolio, which may be continuing
instructions when deemed appropriate by the parties, the Custodian shall
pay out monies of a Portfolio 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
Portfolio but only (a) against the delivery
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<PAGE>
of such securities or evidence of title to such options, futures
contracts or options on futures contracts to the Custodian (or
any bank, banking firm or trust company doing business in the
United States or abroad which is qualified under the Investment
Company Act of 1940, 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 Portfolio 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 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 aet forth in Section 2.10A; (d) in the case of
repurchase agreements entered into between the Fund on behalf of
the Portfolio 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
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<PAGE>
(ii) against delivery of the receipt evidencing purchase by the
Portfolio of securities owned by the Custodian along with written
evidence of the agreement by the Custodian to repurchase such
securities from the Portfolio or (e) for transfer to a time
deposit account of the Fund 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 Fund as defined in Article 5;
2) In connection with conversion, exchange or surrender of
securities owned by the Portfolio as set forth in Section 2.2
hereof;
3) For the redemption or repurchase of Shares issued by the
Portfolio as set forth in Article 4 hereof;
4) For the payment of any expense or liability incurred by the
Portfolio, including but not limited to the following payments
for the account of the Portfolio: interest, taxes, management,
accounting, transfer agent and legal fees, and operating expenses
of the Fund whether or not such expenses are to be in whole or
part capitalized or treated as deferred expenses:
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<PAGE>
5) For the payment of any dividends on Shares of the Portfolio
declared pursuant to the governing documents of the Fund;
6) For payment of the amount of dividends received in respect of
securities sold short;
7) For any other proper purpose, but only upon receipt of, in
addition to Proper Instructions from the Fund on behalf of the
Portfolio, a certified copy of a resolution of the Board of
Trustees or of the Executive Committee of the Fund signed by an
officer of the Fund and certified by its Secretary or an
Assistant Secretary, 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 purpose, and naming the
person or persons to whom such payment is to be made.
2.8 Liability for Payment in Advance of Receipt of Securities Purchased.
Except as specifically stated otherwise in this Contract, in any and
every case where payment for purchase of domestic securities for the
account of a Portfolio is made by the Custodian in advance of receipt of
the securities purchased in the absence of specific written instructions
from the Fund on behalf of such Portfolio to so pay in advance, the
Custodian shall be absolutely liable to the Fund for such securities to
the
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<PAGE>
same extent as if the securities had been received by the Custodian.
2.9 Appointment of Agents. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the Investment Company Act of
1940, as amended, 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 Fund Assets in Securities Systems. The Custodian may deposit
and/or maintain securities owned by a Portfolio in a clearing agency
registered with the Securities and Exchange Commission under Section 17A
of the Securities Exchange Act of 1934, 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, collectively referred to
herein as "Securities System" in accordance with applicable Federal
Reserve Board and Securities and Exchange Commission rules and
regulations, if any, and subject to the following provisions:
1) The Custodian may keep securities of the Portfolio in a
Securities System provided that such securities are represented
in an account ("Account") of the Custodian in the
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<PAGE>
Securities System which 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
Portfolio which are maintained in a Securities System shall
identify by book-entry those securities belonging to the
Portfolio;
3) The Custodian shall pay for securities purchased for the account
of the Portfolio upon (i) receipt of advice from the Securities
System that such securities have been transferred to the 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
Portfolio. The Custodian shall transfer securities sold for the
account of the Portfolio upon (i) receipt of advice from the
Securities System that payment for such securities has been
transferred to the 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 Portfolio. Copies of all advices from the
Securities System of transfers of securities for the
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<PAGE>
account of the Portfolio shall identify the Portfolio, be
maintained for the Portfolio by the Custodian and be provided to
the Fund at its request. Upon request, the Custodian shall
furnish the Fund on behalf of the Portfolio confirmation of each
transfer to or from the account of the Portfolio in the form of a
written advice or notice and shall furnish to the Fund on behalf
of the Portfolio copies of daily transaction sheets reflecting
each day's transactions in the Securities System for the account
of the Portfolio.
4) The Custodian shall provide the Fund for the Portfolio with any
report obtained by the Custodian on the Securities System's
accounting system, internal accounting control and procedures for
safeguarding securities deposited in the Securities System;
5) The Custodian shall have received from the Fund on behalf of the
Portfolio 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 Fund for the benefit of the
Portfolio for any 1oss or damage to the
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<PAGE>
Portfolio resulting from use of the 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 Securities System; at the
election of the Fund, it shall be entitled to be subrogated to
the rights of the Custodian with respect to any claim against the
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 Portfolio has not been made whole for any such
loss or damage.
2.10A Fund Assets Held in the Custodian's Direct Paper System. The Custodian
may deposit and/or maintain securities owned by a Portfolio 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
Fund on behalf of the Portfolio;
2) The Custodian may keep securities of the Portfolio in the Direct
Paper System only if such securities are represented in an
account
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("Account") of the Custodian in the Direct Paper System which
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
Portfolio which are maintained in the Direct Paper System shall
identify by book-entry those securities belonging to the
Portfolio;
4) The Custodian shall pay for securities purchased for the account
of the Portfolio 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 Portfolio. The Custodian shall transfer
securities sold for the account of the Portfolio 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 Portfolio;
5) The Custodian shall furnish the Fund on behalf of the Portfolio
confirmation of each transfer to or from the account of the
Portfolio, in the form of a written advice or notice, of Direct
Paper on the next business day following such transfer and shall
furnish
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to the Fund on behalf of the Portfolio copies of daily
transaction sheets reflecting each day's transaction in the
Securities System for the account of the Portfolio;
6) The Custodian shall provide the Fund on behalf of the Portfolio
with any report on its system of internal accounting control as
the Fund may reasonably request from time to time.
2.11 Segregated Account. The Custodian shall upon receipt of Proper
Instructions from the Fund on behalf of each applicable Portfolio
establish and maintain a segregated account or accounts for and on behalf
of each such Portfolio, 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 Fund on behalf of the Portfolio,
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 Commodity Futures Trading Commission or any registered
contract market), or of any similar organization or organizations,
regarding escrow or other arrangements in connection with
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transactions by the Portfolio, (ii) for purposes of segregating cash or
government securities in connection with options purchased, sold or
written by the Portfolio or commodity futures contracts or options
thereon purchased or sold by the Portfolio, (iii) for the purposes of
compliance by the Portfolio with the procedures required by Investment
Company Act Release No. 10666, or any subsequent release or releases of
the Securities and Exchange Commission relating to the maintenance of
segregated accounts by registered investment companies and (iv) for other
proper corporate purposes, but only, in the case of clause (iv), upon
receipt of, in addition to Proper Instructions from the Fund on behalf of
the applicable Portfolio, a certified copy of a resolution of the Board
of Trustees or of the Executive Committee signed by an officer of the
Fund and certified by the Secretary or an Assistant Secretary, setting
forth the purpose or purposes of such segregated account and declaring
such purposes to be proper corporate purposes.
2.12 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 domestic securities of each Portfolio held by it and in
connection with transfers of securities.
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2.13 Proxies. The Custodian shall, with respect to the domestic 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 Portfolio or a nominee of the Portfolio, all proxies, without
indication of the manner in which such proxies are to be voted, and shall
promptly deliver to the Portfolio such proxies, all prosy soliciting
materials and all notices relating to such securities.
2.14 Communications Relating to Portfolio Securities. Subject to the
provisions of Section 2.3, the Custodian shall transmit promptly to the
Fund for each Portfolio all written information (including, without
limitation, pendency of calls and maturities of domestic securities and
expirations of rights in connection therewith and notices of exercise of
call and put options written by the Fund on behalf of the Portfolio and
the maturity of futures contracts purchased or sold by the Portfolio)
received by the Custodian from issuers of the securities being held for
the Portfolio. With respect to tender or exchange offers, the Custodian
shall transmit promptly to the Portfolio 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 Portfolio desires to take action with respect to
any tender offer, exchange offer or any other similar transaction, the
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Portfolio shall notify the Custodian at least three business days prior
to the date on which the Custodian is to take such action.
3. Duties of the Custodian with Respect to Property of the Fund Held Outside
of the United States
3.1 Appointment of Foreign Sub-Custodians
The Fund hereby authorizes and instructs the Custodian to employ as
sub-custodians for the Portfolio's securities and other assets maintained
outside the United States the foreign banking institutions and foreign
securities depositories designated on Schedule A hereto ("foreign
sub-Custodians"). Upon receipt of "Proper Instructions", as defined in
Section 5 of this Contract, together with a certified resolution of the
Fund's Board of Trustees, the Custodian and the Fund may agree to amend
Schedule A hereto from time to time to designate additional foreign
banking institutions and foreign securities depositories to act as
sub-custodian. Upon receipt of Proper Instructions, the Fund may instruct
the Custodian to cease the employment of any one or more such
sub-custodians for maintaining custody of the Portfolio's assets.
3.2 Assets to be Held. The Custodian shall limit the securities and other
assets maintained in the custody of the foreign sub-custodians to: (a)
"foreign securities", as defined in paragraph (c)(l) of Rule 17f-5 under
the Investment Company Act of 1940, and (b) cash and cash
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equivalents in such amount a as the Custodian or the Fund may determine
to be reasonably necessary to effect the Portfolio's foreign securities
transactions.
3.3 Foreign Securities Depositories. Except as may otherwise be agreed upon
in writing by the Custodian and the Fund, assets of the Portfolios shall
be maintained in foreign securities depositories only through
arrangements implemented by the foreign banking institutions serving as
sub-custodians pursuant to the terms hereof. Where possible, such
arrangements shall include entry into agreements containing the
provisions set forth in Section 3.5 hereof.
3.4 Segregation of Securities. The Custodian shall identify on its books as
belonging to each applicable Portfolio of the Fund, the foreign
securities of such Portfolios held by each foreign sub-Custodian. Each
agreement pursuant to which the Custodian employs a foreign banking
institution shall require that such institution establish a custody
account for the Custodian on behalf of the Fund for each applicable
Portfolio of the Fund and physically segregate in each account,
securities and other assets of the Portfolios, and, in the event that
such institution deposits the securities of one or more of the Portfolios
in a foreign securities depository, that it shall identify on its books
as belonging to the Custodian, as agent for each applicable Portfolio,
the securities so deposited.
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3.5 Agreements with Foreign Banking Institutions. Each agreement with a
foreign banking institution shall be substantially in the form set forth
in Exhibit 1 hereto and shall provide that: (a) the assets of each
Portfolio will not be subject to any right, charge, security interest,
lien or claim of any kind in favor of the foreign banking institution or
its creditors or agent, except a claim of payment for their safe custody
or administration; (b) beneficial ownership for the assets of each
Portfolio will be freely transferable without the payment of money or
value other than for custody or administration; (c) adequate records will
be maintained identifying the assets as belonging to each applicable
Portfolio; (d) officers of or auditors employed by, or other
representatives of the Custodian, including to the extent permitted under
applicable law the independent public accountants for the Fund, will be
given access to the books and records of the foreign banking institution
relating to its actions under its agreement with the Custodian; and (e)
assets of the Portfolios held by the foreign sub-custodian will be
subject only to the instructions of the Custodian or its agents.
3.6 Access of Independent Accountants of the Fund. Upon request of the Fund,
the Custodian will use its best efforts to arrange for the independent
accountants of the Fund to be afforded access to the books and records of
any foreign banking institution employed as a foreign
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sub-Custodian insofar as such books and records relate to the performance
of such foreign banking institution under its agreement with the
Custodian.
3.7 Reports by Custodian. The Custodian will supply to the Fund from time to
time, as mutually agreed upon, statements in respect of the securities
and other assets of the Portfolio(a) held by foreign sub-custodians,
including but not limited to an identification of entities having
possession of the Portfolio(s) securities and other assets and advices or
notifications of any transfers of securities to or from each custodial
account maintained by a foreign banking institution for the Custodian on
behalf of each applicable Portfolio indicating, as to securities acquired
for a Portfolio, the identity of the entity having physical possession of
such securities.
3.8 Transactions in Foreign Custody Account
(a) Except as otherwise provided in paragraph (b) of this Section 3.8,
the provision of Sections 2.2 and 2.7 of this Contract shall apply,
mutatis mutandis to the foreign securities of the Fund held outside the
United States by foreign sub-custodians.
(b) Notwithstanding any provision of this Contract to the contrary,
settlement and payment for securities received for the account of each
applicable Portfolio and delivery of securities maintained for the
account of each applicable Portfolio may be effected in accordance with
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the customary established securities trading or securities processing
practices and procedures in the jurisdiction or market in which the
transaction occurs, including, without limitation, delivering securities
to the purchaser thereof or to a dealer therefor (or an agent for such
purchaser or dealer) against a receipt with the expectation of receiving
later payment for such securities from such purchaser or dealer.
(c) Securities maintained in the custody of a foreign sub-custodian may
be maintained in the name of such entity's nominee to the same extent as
set forth in Section 2.3 of this Contract, and the Fund agrees to hold
any such nominee harmless from any liability as a holder of record of
such securities.
3.9 Liability of Foreign Sub-Custodians. Each agreement pursuant to which the
Custodian employs a foreign banking institution as a foreign
sub-custodian shall require the institution to exercise reasonable care
in the performance of its duties and to indemnify, and hold harmless, the
Custodian and each Fund from and against any loss, damage, cost, expense,
liability or claim arising out of or in connection with the institution's
performance of such obligations. At the election of the Fund, it shall be
entitled to be subrogated to the rights of the Custodian with respect to
any claims against a foreign banking institution as a consequence of any
such loss, damage, cost, expense, liability or claim if and to
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the extent that the Fund has not been made whole for any such loss,
damage, cost, expense, liability or claim.
3.10 Liability of Custodian. The Custodian shall be liable for the acts or
omissions of a foreign banking institution to the same extent as set
forth with respect to sub-custodians generally in this Contract and,
regardless of whether assets are maintained in the custody of a foreign
banking institution, a foreign securities depository or a branch of a
U.S. bank as contemplated by paragraph 3.13 hereof, the Custodian shall
not be liable for any loss, damage, cost, expense, liability or claim
resulting from nationalization, expropriation, currency restrictions, or
acts of war or terrorism or any loss where the sub-custodian has
otherwise exercised reasonable care. Notwithstanding the foregoing
provisions of this paragraph 3.10, in delegating custody duties to State
Street London Ltd., the Custodian shall not be relieved of any
responsibility to the Fund for any loss due to such delegation, except
such loss as may result from (a) political risk (including, but not
limited to, exchange control restrictions, confiscation, expropriation,
nationalization, insurrection, civil strife or armed hostilities) or (b)
other losses (excluding a bankruptcy or insolvency of State Street London
Ltd. not caused by political risk) due to Acts of God, nuclear incident
or other losses under circumstances where the Custodian and State Street
London Ltd. have exercised reasonable care.
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3.11 Reimbursement for Advances. If the Fund requires the Custodian to advance
cash or securities for any purpose for the benefit of a Portfolio
including the purchase or sale of foreign exchange or of contracts for
foreign exchange, 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 Portfolio shall be security
therefor and should the Fund fail to repay the Custodian promptly, the
Custodian shall be entitled to utilize available cash and to dispose of
such Portfolios assets to the extent necessary to obtain reimbursement.
3.12 Monitoring Responsibilities. The Custodian shall furnish annually to the
Fund, during the month of June, information concerning the foreign
sub-custodians employed by the Custodian. Such information shall be
similar in kind and scope to that furnished to the Fund in connection
with the initial approval of this Contract. In addition, the Custodian
will promptly inform the Fund in the event that the Custodian learns of a
material adverse change in the financial condition of a foreign
sub-custodian or any material loss of the assets of the Fund or in the
case of any foreign sub-custodian
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not the subject of an exemptive order from the Securities and Exchange
Commission is notified by such foreign sub-custodian that there appears
to be a substantial likelihood that its shareholders' equity will decline
below $200 million (U.S. dollars or the equivalent thereof) or that its
shareholders' equity has declined below $200 million (in each case
computed in accordance with generally accepted U.S. accounting
principles).
3.13 Branches of U.S. Banks
(a) Except as otherwise set forth in this Contract, the provisions hereof
shall not apply where the custody of the Portfolios assets are maintained
in a foreign branch of a banking institution which is a "bank" as defined
by Section 2(a)(5) of the Investment Company Act of 1940 meeting the
qualification set forth in Section 26(a) of said Act. The appointment of
any such branch as a sub-custodian shall be governed by paragraph 1 of
this Contract.
(b) Cash held for each Portfolio of the Fund in the United Kingdom shall
be maintained in an interest bearing account established for the Fund
with the Custodian's London branch, which account shall be subject to the
direction of the Custodian, State Street London Ltd. or both.
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4. Payments for Sales or Repurchases or Redemptions of Shares of the Fund
The Custodian shall receive from the distributor for the Shares or from
the Transfer Agent of the Fund and deposit into the account of the appropriate
Portfolio such payments as are received for Shares of that Portfolio issued or
sold from time to time by the Fund. The Custodian will provide timely
notification to the Fund on behalf of each such Portfolio and the Transfer Agent
of any receipt by it of payments for Shares of such Portfolio.
From such funds 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 Fund pursuant thereto, the Custodian shall, upon receipt of
proper instructions from the Transfer Agent, make funds available for payment to
holders of Shares who have delivered to the Transfer Agent a request in good
order for redemption or repurchase of their Shares. In connection with the
redemption or repurchase of Shares of a Portfolio, 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 Fund, the Custodian shall honor
checks drawn on the Custodian by a holder of Shares, which checks have been
furnished by the Transfer Agent to the holder of Shares, when presented to the
Custodian in accordance with such procedures and controls as are mutually agreed
upon from time to time between the Fund and the Custodian.
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5. Proper Instructions
Proper Instructions as used throughout this Contract means a writing
signed or initialled 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 Fund shall cause all oral instructions to be
confirmed in writing. Upon receipt of a certificate of the Secretary or an
Assistant Secretary as to the authorization by the Board of Trustees of the Fund
accompanied by a detailed description of procedures approved by the Board of
Trustees, Proper Instructions may include communications effected directly
between electro-mechanical or electronic devices provided that the Board of
Trustees and the Custodian are satisfied that such procedures afford adequate
safeguards for the Portfolios' assets. 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 2.11.
6. Actions Permitted without Express Authority
The Custodian may in its discretion, without express authority from the
Fund on behalf of each applicable Portfolio:
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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 Fund on behalf of the Portfolio;
2) surrender securities in temporary form for securities in
definitive form;
3) endorse for collection, in the name of the Portfolio, 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 Portfolio
except as otherwise directed by the Board of Trustees of the
Fund.
7. 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 Fund. The
Custodian may receive and accept a certified copy of a vote of the Board of
Trustees of the Fund 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.
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8. Duties of Custodian with Respect to the Books of Account and Calculation of
Net Asset Value and Net Income
The Custodian shall cooperate with and supply necessary information to
the entity or entities appointed by the Board of Trustees of the Fund to keep
the books of account of each Portfolio and/or compute the net asset value per
share of the outstanding shares of each Portfolio or, if directed in writing to
do so by the Fund on behalf of the Portfolio, shall itself keep such books of
account and/or compute such net asset value per share. If so directed, the
Custodian shall also calculate daily the net income of the Portfolio as
described in the Fund's currently effective prospectus related to such
Portfolio and shall advise the Fund and the Transfer Agent daily of the total
amounts of such net income and, if instructed in writing by an officer of the
Fund 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 Portfolio shall be made at the time
or times described from time to time in the Fund's currently effective
prospectus related to such Portfolio.
9. Records
The Custodian shall with respect to each Portfolio create and maintain
all records relating to its activities and obligations under this Contract in
such manner as will meet the obligations of the Fund under the Investment
Company Act of 1940, with particular attention to Section 31 thereof and Rules
31a-1 and 31a-2 thereunder. All such records shall be the property of
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the Fund 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 Fund and employees and agents of the Securities and Exchange
Commission. The Custodian shall, at the Fund's request, supply the Fund with a
tabulation of securities owned by each Portfolio and held by the Custodian and
shall, when requested to do so by the Fund and for such compensation as shall be
agreed upon between the Fund and the Custodian, include certificate numbers in
such tabulations.
10. Opinion of Fund's Independent Accountant
The Custodian shall take all reasonable action, as the Fund on behalf of
each applicable Portfolio may from time to time request, to obtain from year to
year favorable opinions from the Fund's independent accountants with respect to
its activities hereunder in connection with the preparation of the Fund's Form
N-1A, and Form N-SAR or other annual reports to the Securities and Exchange
Commission and with respect to any other requirements of such Commission.
11. Reports to Fund by Independent Public Accountants
The Custodian shall provide the Fund, on behalf of each of the Portfolios
at such times as the Fund 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 Securities
System, relating to the services provided by the Custodian under this Contract;
such reports, shall be of
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sufficient scope and in sufficient detail, as may reasonably be required by
the Fund to provide reasonable aasurance that any material inadequacies
would be disclosed by such examination, and, if there are no such
inadequacies, the reports shall so state.
12. Compensation of Custodian
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between the
Fund on behalf of each applicable Portfolio and the Custodian.
13. 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
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 Fund 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 Fund) on all matters, and shall be without liability for any action
reasonably
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taken or omitted pursuant to such advice. Notwithstanding the foregoing, the
responsibility of the Custodian with respect to redemptions effected by check
shall be in accordance with a separate Agreement entered into between the
Custodian and the Fund.
The Custodian shall be liable for the acts or omissions of a foreign
banking institution appointed pursuant to the provisions of Article 3 to the
same extent as set forth in Article 1 hereof with respect to sub-custodians
located in the United States (except as specifically provided in Article 3.10)
and, regardless of whether assets are maintained in the custody of a foreign
banking institution, a foreign securities depository or a branch of a U.S. bank
as contemplated by paragraph 3.11 hereof, the Custodian shall not be liable for
any loss, damage, cost, expense, liability or claim resulting from, or caused
by, the direction of or authorization by the Fund to maintain custody or any
securities or cash of the Fund in a foreign country including, but not limited
to, losses resulting from nationalization, expropriation, currency restrictions,
or acts of war or terrorism.
If the Fund on behalf of a Portfolio 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 Fund or the Portfolio being liable for the payment
of money or incurring liability of some other form, the Fund on behalf of the
Portfolio, as a prerequisite to requiring
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the Custodian to take such action, shall provide indemnity to the Custodian in
an amount and form satisfactory to it.
If the Fund requires the Custodian to advance cash or securities for any
purpose for the benefit of a Portfolio including the purchase or sale of foreign
exchange or of contracts for foreign exchange 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 Portfolio shall be security therefor and
should the Fund fail to repay the Custodian promptly, the Custodian shall be
entitled to utilize available cash and to dispose of such Portfolio's assets to
the extent necessary to obtain reimbursement.
14. 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) days after the date of such delivery or mailing; provided,
however that the Custodian shall not with respect to a Portfolio act under
Section 2.10 hereof in the absence of receipt of an initial certificate of the
Secretary or
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an Assistant Secretary that the Board of Trustees of the Fund has approved the
initial use of a particular Securities System by such Portfolio and the receipt
of an annual certificate of the Secretary or an Assistant Secretary that the
Board of Trustees has reviewed the use by such Portfolio of such Securities
System, as required in each case by Rule 17f-4 under the Investment Company Act
of 1940, as amended and that the Custodian shall not with respect to a Portfolio
act under Section 2.10A hereof in the absence of receipt of an initial
certificate of the Secretary or an Assistant Secretary that the Board of
Trustees has approved the initial use of the Direct Paper System by such
Portfolio and the receipt of an annual certificate of the Secretary or an
Assistant Secretary that the Board of Trustees has reviewed the use by such
Portfolio of the Direct Paper System; provided further, however, that the Fund
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 Fund on behalf of one or more of the Portfolios may
at any time by action of its Board of Trustees (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 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.
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Upon termination of the Contract, the Fund on behalf of each applicable
Portfolio 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
costs, expenses and disbursements.
15. Successor Custodian
If a successor custodian for the Fund, of one or more of the Portfolios
shall be appointed by the Board of Trustees of the Fund, 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 Portfolio then held by it hereunder and shall transfer to an account
of the successor custodian all of the securities of each such Portfolio held in
a Securities System.
If no such successor custodian shall be appointed, the Custodian shall,
in like manner, upon receipt of a certified copy of a vote of the Board of
Trustees of the Fund, deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Trustees 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 Investment Company Act of 1940,
doing business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided
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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 Portfolio and all instruments held by the Custodian relative
thereto and all other property held by it under this Contract on behalf of each
applicable Portfolio and to transfer to an account of such successor custodian
all of the securities of each such Portfolio 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 Fund to procure the certified copy of the vote referred to or of
the Board of Trustees to appoint a successor Custodian, the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
16. Interpretive and Additional Provisions
In connection with the operation of this Contract, the Custodian and the
Fund on behalf of each of the Portfolios, 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
-41-
<PAGE>
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
Fund. No interpretive or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Contract.
17. Additional Funds
In the event that the Fund establishes one or more series of Shares in
addition to State Street Growth 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 Portfolio hereunder.
18. 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.
19. Prior Contracts
This Contract supersedes and terminates, as of the date hereof, all prior
contracts between the Fund on behalf of each of the Portfolios and the Custodian
relating to the custody of the Fund's assets.
20. Disclaimer
It is expressly agreed that the obligations of the Fund hereunder, and
the authorization, execution and delivery of this
-42-
<PAGE>
document, shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents or employees of the Fund as individuals or personally, but
shall bind only the property of the Portfolio, as provided in the Master Trust
Agreement of the Fund. The Master Trust Agreement of the Fund provides, and it
is expressly agreed, that the Portfolio of the Fund shall be solely and
exclusively responsible for the payment of any direct or indirect debts,
liabilities and obligations relating to the Portfolio, and that no other
portfolio shall be responsible for the same.
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 5th day of March, 1990.
ATTEST STATE STREET GROWTH TRUST
/s/ Darman A. Wing By /s/ Charles A. Austin, III
--------------------------- ---------------------------
ATTEST STATE STREET BANK AND TRUST COMPANY
/s/ Richard Vandale By /s/ unknown
--------------------------- ---------------------------
Assistant Secretary Vice President
-43-
<PAGE>
Schedule A
The following foreign banking institutions and foreign securities
depositories have been approved by the Board of Trustees of State Street Growth
Trust for use as sub-custodians for the Fund's securities and other assets:
(Insert banks and securities depositories)
Certified:
__________________________
Fund's Authorized Officer
Date: ____________________
-44-
Exhibit (8)(b)
AMENDMENT TO CUSTODIAN CONTRACT
Agreement made by and between State Street Bank and Trust Company (the
"Custodian") and State Street Growth Trust (the "Fund").
WHEREAS, the Custodian and the Fund are parties to a custodian contract
dated March 5, 1990 (the "Custodian Contract") governing the terms and
conditions under which the Custodian maintains custody of the securities and
other assets of the Fund; and
WHEREAS, the Custodian and the Fund desire to amend the terms and
conditions under which the Custodian maintains the Fund's securities and other
non-cash property in the custody of certain foreign sub-custodians in conformity
with the requirements of Rule 17f-5 under the Investment Company Act of 1940, as
amended;
NOW THEREFORE, in consideration of the premises and covenants contained
herein, the Custodian and the Fund hereby amend the Custodian Contract by the
addition of the following terms and provisions;
1. Notwithstanding any provisions to the contrary set forth in the
Custodian Contract, the Custodian may hold securities and other non-cash
property for all of its customers, including the Fund, with a foreign
sub-custodian in a single account that is identified as belonging to the
Custodian for the benefit of its customers, provided however, that (i) the
records of the Custodian with respect to securities and other non-cash property
of the Fund which are maintained in such account shall identify by book-entry
those securities and other non-cash property belonging to the Fund and (ii) the
Custodian shall require that securities and other non-cash property so held by
the foreign sub-custodian be held separately from any assets of the foreign
sub-custodian or of others.
2. Except as specifically superseded or modified herein, the terms and
provisions of the Custodian Contract shall continue to apply with full force and
effect.
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed as a sealed instrument in its name and behalf by its duly authorized
representative this 2nd day of November, 1995.
STATE STREET GROWTH TRUST
(Currently State Street Research Growth Trust)
By: /s/ Gerard P. Maus
-----------------------------------
Title: Treasurer
STATE STREET BANK AND TRUST COMPANY
By: /s/ Timothy Pandoro
-----------------------------------
Title: Vice President
Exhibit (8)(c)
FIRST AMENDED AND RESTATED
SHAREHOLDERS' ADMINISTRATIVE SERVICES AGREEMENT
Agreement made as of November 3, 1993, by and among the undersigned
investment companies, severally and not jointly, (referred to herein as
"Investment Company" or "Investment Companies"), each being a business trust,
and State Street Research Investment Services, Inc. ("SSRISI"), a Massachusetts
corporation.
WHEREAS, each Investment Company is a registered investment company
with one or more separate series or funds thereunder ("Fund" or "Funds") as
listed in Appendix A, and each Investment Company desires that SSRISI perform
certain services for such Investment Company; and
WHEREAS, SSRISI is willing to perform such services for each Investment
Company, upon the terms and subject to the conditions set forth herein;
In consideration of the mutual promises and covenants set forth, the
parties agree as follows:
1. Shareholders' Administrative Services. SSRISI shall provide shareholders'
administrative services for each Investment Company, as distinguished from the
transfer agent and dividend disbursing agent services otherwise provided by each
Investment Company's transfer agent, currently State Street Bank and Trust
Company ("Transfer Agent"). Shareholders' administrative services shall include,
but not be limited to, responding to telephone, written or other inquiries or
instructions from shareholders, dealers and prospective investors concerning
<PAGE>
account balances, available shareholder services, account statements,
transaction confirmations, procedures for purchasing and redeeming shares and
similar matters and services; accepting and monitoring receipts of wire order
trades (including trades processed via the National Securities Clearing
Corporation Fund/Serv system); receiving telephone transaction instructions and
inputting such instructions into the Transfer Agent's computer system; operating
the State Street Research Service Center and providing the services for which
the center is responsible as described in the Prospectus, if any, of each Fund
as amended from time to time; and performing such other functions as the
Investment Company and SSRISI shall determine hereafter ("Shareholders'
Administrative Services").
2. Reimbursement. The Investment Company shall reimburse SSRISI for its costs in
providing such Shareholders Administrative Services. Such costs may include, but
not be limited to, compensation of personnel, leasehold expenses, computer and
related equipment expenses, telephone charges, telephone equipment expenses,
expenses for furniture and fixtures, supplies, postage and out-of-pocket
expenses. Further, any other expenses incurred by SSRISI at the request or with
the consent of the Investment Company, will be reimbursed by the Investment
Company.
3. Term. This Agreement may be terminated at any time on not less than sixty
(60) days written notice given by any Investment Company to SSRISI, or six (6)
months written notice by SSRISI to any Investment Company.
2
<PAGE>
4. Duty of Care and Indemnification. SSRISI will at all times use reasonable
care and act in good faith in performing Shareholders' Administrative Services
hereunder. SSRISI will not be liable or responsible for delays or errors owing
to circumstances beyond its control, including, without limitation, acts of
civil or military authority, national or state emergencies, labor difficulties,
fire, mechanical breakdown, flood or catastrophe, acts of God, insurrection,
war, riots or failure of transportation, communication or power supply.
SSRISI may rely on certifications and instructions of an officer of an
Investment Company as to proceedings or facts in connection with any action
taken by the shareholders or the Trustees of an Investment Company. SSRISI may
apply to counsel for an Investment Company, at the Investment Company's expense,
for advice whenever it deems expedient. With respect to any action taken on the
basis of such certifications or instructions or in accordance with the advice of
counsel for an Investment Company, the Investment Company will indemnify and
hold harmless SSRISI from any and all losses, claims, damages, liabilities and
expenses (including reasonable counsel fees and expenses).
The relevant Fund of an Investment Company will indemnify SSRISI
against and hold SSRISI harmless from any and all losses, claims, damages,
liabilities and expenses (including reasonable counsel fees and expenses) in
respect of any claim, demand, action or suit not resulting from SSRISI's bad
faith or negligence and arising out of, or in connection with, its
3
<PAGE>
performance of Shareholders' Administrative Services on behalf of a Fund under
this Agreement.
SSRISI shall also be indemnified and held harmless by the relevant Fund
against any loss, claim, damage, liability and expense (including reasonable
counsel fees and expenses) by reason of any act done by it in good faith and in
reliance upon any instrument believed by it (a) to be genuine and (b) to be
signed, countersigned or executed by any person or persons authorized to sign,
countersign, or execute such instrument.
5. Limitation of Liability. A copy of the Master Trust Agreement of each
Investment Company is on file with the Secretary of State of the Commonwealth of
Massachusetts, and notice is hereby given that this instrument is executed on
behalf of the Trustees of each Investment Company as the Trustees and not
individually and that the obligations under this Agreement are not binding upon
any of the Trustees, officers, employees, agents or shareholders of an
Investment Company individually, but binding only upon the assets and property
of the relevant Fund. Each Fund shall be solely and exclusively responsible for
the payment of its debts, liabilities and obligations, and no other Fund shall
be responsible for the same.
6. Sub-administration Agreements. Officers of SSRISI and any Investment Company
may enter sub-administration agreements with other parties, including
affiliates, for the provision of sub-administration services for certain
shareholder accounts, provided that the fee payable by an Investment Company for
such sub-administration services shall not exceed the cost that would
4
<PAGE>
otherwise be incurred hereunder and under the Transfer Agency and Service
Agreement between each Investment Company and the Transfer Agent if such
services were provided directly by the Transfer Agent and SSRISI for such
accounts. Such officers may also enter sub-administration agreements where the
requisite sub-administration services are not otherwise available from SSRISI
or Transfer Agent.
7. Each Investment Company a Separate Party to Agreement. Each undersigned
Investment Company is a separate party under this Agreement.
Each Investment Company that is a party hereto shall be regarded for
all purposes as a separate party apart from any of the other Investment
Companies which are parties. Each Investment Company shall be responsible only
for its own actions and no property of a Fund shall be commingled with the
property of any other Fund. No Fund shall participate in, or effect any
transaction in connection with, any joint enterprise or other joint arrangement
or profit-sharing plan.
The use of this single document to memorialize the separate Agreement
of each of the undersigned Investment Companies is understood to be for clerical
convenience only and shall not constitute any basis for joining the Investment
Companies in any respect.
In the event that an Investment Company establishes one or more new
series or funds, in addition to the Funds listed in Appendix A, which the
Investment Company desires to have included in this Agreement, the Investment
Company shall provide written
5
<PAGE>
notice to the parties hereto and if such parties provide written consent to
include such new Fund, such new Fund shall become a party hereunder. Similarly,
a new investment company may be included hereunder by written notice to the
parties hereto and the consent of all such parties.
Liability for reimbursement of costs, out-of-pocket expenses and other
obligations herein which relate to a particular Fund shall not be the
responsibility of any other Fund.
This Agreement may not be assigned, as defined under the Investment
Company Act of 1940, by any party without the express written consent of the
other parties.
6
<PAGE>
This Agreement shall be construed in accordance with and governed by
the laws of the Commonwealth of Massachusetts.
STATE STREET CAPITAL TRUST
STATE STREET EXCHANGE TRUST
STATE STREET GROWTH TRUST
STATE STREET MASTER INVESTMENT TRUST
METLIFE - STATE STREET EQUITY TRUST
METLIFE - STATE STREET FINANCIAL TRUST
METLIFE - STATE STREET INCOME TRUST
METLIFE - STATE STREET MONEY MARKET TRUST
METLIFE - STATE STREET TAX-EXEMPT TRUST
By: /s/ Gerard P. Maus
-------------------------------
Treasurer of each above
Investment Company
STATE STREET RESEARCH INVESTMENT
SERVICES, INC.
By: /s/ Darman A. Wing
-------------------------------
7
<PAGE>
APPENDIX A
MetLife - State Street Equity Trust
MetLife - State Street Capital Appreciation Fund
MetLife - State Street Equity Investment Fund
MetLife - State Street Equity Income Fund
MetLife - State Street Research Global Energy Fund
MetLife - State Street Financial Trust
MetLife - State Street Research Balanced Fund
State Street Research Government Income Fund
MetLife - State Street Income Trust
MetLife - State Street High Income Fund
MetLife - State Street Government Securities Fund
MetLife - State Street Managed Assets
MetLife - State Street Money Market Trust
MetLife - State Street Money Market Fund
MetLife - State Street Tax-Exempt Trust
MetLife - State Street Tax-Exempt Fund
State Street Research California Tax Free Fund
State Street Research
Florida Tax-Free Fund
State Street Research Massachusetts Tax-Free Fund
State Street Research New York Tax-Free Fund
State Street Research
Pennsylvania Tax-Free Fund
State Street Research Texas Tax-Free Fund
State Street Research Virginia Tax-Free Fund
State Street Capital Trust
State Street Research Capital Fund
State Street Research Small Capitalization Growth Fund
State Street Exchange Trust
State Street Exchange Fund.
State Street Growth Trust
State Street Research Growth Fund
State Street Master Investment Trust
State Street Investment Trust
8
Exhibit (8)(d)
METLIFE - STATE STREET FINANCIAL TRUST
One Financial Center
Boston, Massachusetts 02111
May 16, 1994
State Street Research
Investment Services, Inc.
One Financial Center
Boston, Massachusetts 02111
Gentlemen:
This letter is to confirm to you that MetLife - State Street Financial
Trust (the "Trust), has created two (2) new series of shares to be known as
State Street Research Strategic Portfolios: Conservative and State Street
Research Strategic Portfolios: Aggressive; and that MetLife - State Street
Research Balanced Fund changed its name to State Street Research Strategic
Portfolios: Moderate (the "Funds"), and that pursuant to the First Amended and
Restated Shareholders' Administrative Services Agreement between the Trust and
you dated as of November 3, 1993 (the "Agreement"), you will provide
shareholders' administrative services for the Funds. Pursuant to this Letter
Agreement, Appendix A to the Agreement is hereby revised in its entirety to
reflect the addition of the Funds and reads as attached.
Please indicate your acceptance of this responsibility in accordance
with the terms of the Agreement by signing this letter as indicated below.
The term "MetLife - State Street Financial Trust" means and refers to
the Trustees from time to time serving under the First Amended and Restated
Master Trust Agreement dated June 1, 1993 ("Master Trust Agreement") as the same
may subsequently thereto have been, or subsequently hereto may be, amended. It
is expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the Trustees, shareholders, nominees, officers, agents or
employees of the Trust as individuals or personally, but shall bind only the
trust property of the Trust, as provided in the Master Trust Agreement of the
Trust. The execution and delivery of this Agreement have been authorized by the
<PAGE>
Trustees of the Trust and signed by a duly authorized officer of the Trust,
acting as such, and neither such authorization nor such execution and delivery
shall be deemed to have been made individually or to impose any personal
liability, but shall bind only the trust property of the Trust as provided in
its Master Trust Agreement. The Master Trust Agreement of the Trust provides,
and it is expressly agreed, that each Fund of the Trust shall be solely and
exclusively responsible for the payment of its debts, liabilities and
obligations, and that no other fund shall be responsible for the same.
METLIFE - STATE STREET
FINANCIAL TRUST
By: /s/ Ralph F. Verni
-------------------------
Ralph F. Verni
ACCEPTED AND AGREED TO:
STATE STREET RESEARCH
INVESTMENT SERVICES, INC.
By /s/ Gerard P. Maus
-------------------------
Gerard P. Maus
<PAGE>
APPENDIX A
MetLife - State Street Equity Trust
MetLife - State Street Capital Appreciation Fund
MetLife - State Street Equity Investment Fund
MetLife - State Street Equity Income Fund
MetLife - State Street Research Global Energy Fund
MetLife - State Street Financial Trust
State Street Research Government Income Fund
State Street Research Strategic Portfolios: Aggressive
State Street Research Strategic Portfolios: Conservative
State Street Research Strategic Portfolios: Moderate
MetLife - State Street Income Trust
MetLife - State Street High Income Fund
MetLife - State Street Government Securities Fund
MetLife - State Street Managed Assets
MetLife - State Street Money Market Trust
MetLife - State Street Money Market Fund
MetLife - State Street Tax-Exempt Trust
MetLife - State Street Tax-Exempt Fund
State Street Research California Tax-Free Fund
State Street Research Florida Tax-Free Fund
State Street Research Massachusetts Tax-Free Fund
State Street Research New York Tax-Free Fund
State Street Research Pennsylvania Tax-Free Fund
State Street Research Texas Tax-Free Fund
State Street Research Virginia Tax-Free Fund
State Street Capital Trust
State Street Research Capital Fund
State Street Research Small Capitalization Growth Fund
State Street Exchange Trust
State Street Exchange Fund
State Street Growth Trust
State Street Research Growth Fund
State Street Master Investment Trust
State Street Investment Trust
State Street Research Securities Trust
State Street Research Intermediate Bond Fund
Exhibit (8)(e)
STATE STREET RESEARCH CAPITAL TRUST
One Financial Center
Boston, Massachusetts 02111-2690
February 1, 1995
State Street Research
Investment Services, Inc.
One Financial Center
Boston, Massachusetts 02111-2690
Gentlemen:
This letter is to confirm to you that State Street Research Capital
Trust (the "Trust") has created a new series of shares to be known as State
Street Research Small Capitalization Value Fund (the "Fund"), and that pursuant
to the First Amended and Restated Shareholders' Administrative Services
Agreement between the Trust and you dated as of November 3, 1993 (the
"Agreement"), you will provide shareholders' administrative services for the
Fund. Pursuant to this Letter Agreement, Appendix A to the Agreement is hereby
revised in its entirety to reflect the addition of the Fund and reads as
attached.
Please indicate your acceptance of this responsibility in accordance
with the terms of the Agreement by signing this letter as indicated below.
The term "State Street Research Capital Trust" means and refers to the
Trustees from time to time serving under the First Amended and Restated Master
Trust Agreement dated February 5, 1993 ("Master Trust Agreement") as the same
may subsequently thereto have been, or subsequently hereto may be, amended. It
is expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the Trustees, shareholders, nominees, officers, agents or
employees of the Trust as individuals or personally, but shall bind only the
trust property of the Trust, as provided in the Master Trust Agreement of the
Trust. The execution and delivery of this Agreement have been authorized by the
Trustees of the Trust and signed by a duly authorized officer of the Trust,
acting as such, and neither such authorization nor such execution and delivery
shall be deemed to have been made individually or to impose any personal
liability, but shall bind only the trust property of the Trust as provided
<PAGE>
in its Master Trust Agreement. The Master Trust Agreement of the Trust provides,
and it is expressly agreed, that each Fund of the Trust shall be solely and
exclusively responsible for the payment of its debts, liabilities and
obligations, and that no other fund shall be responsible for the same.
STATE STREET RESEARCH CAPITAL TRUST
By: /s/ Ralph F. Verni
--------------------------
Ralph F. Verni
ACCEPTED AND AGREED TO:
STATE STREET RESEARCH
INVESTMENT SERVICES, INC.
/s/ Gerard P. Maus
--------------------------
Gerard P. Maus
<PAGE>
APPENDIX A
MetLife - State Street Equity Trust
MetLife - State Street Capital Appreciation Fund
MetLife - State Street Equity Investment Fund
MetLife - State Street Equity Income Fund
MetLife - State Street Research Global Energy Fund
MetLife - State Street Financial Trust
State Street Research Government Income Fund
State Street Research Strategic Portfolios: Aggressive
State Street Research Strategic Portfolios: Conservative
State Street Research Strategic Portfolios: Moderate
MetLife - State Street Income Trust
MetLife - State Street High Income Fund
MetLife - State Street Government Securities Fund
MetLife - State Street Managed Assets
MetLife - State Street Money Market Trust
MetLife - State Street Money Market Fund
MetLife - State Street Tax-Exempt Trust
MetLife - State Street Tax-Exempt Fund
State Street Research California Tax-Free Fund
State Street Research Florida Tax-Free Fund
State Street Research Massachusetts Tax-Free Fund
State Street Research New York Tax-Free Fund
State Street Research Pennsylvania Tax-Free Fund
State Street Research Texas Tax-Free Fund
State Street Research Virginia Tax-Free Fund
State Street Research Capital Trust
State Street Research Capital Fund
State Street Research Small Capitalization Growth Fund
State Street Research Small Capitalization Value Fund
State Street Exchange Trust
State Street Exchange Fund
State Street Growth Trust
State Street Research Growth Fund
State Street Master Investment Trust
State Street Investment Trust
State Street Research Securities Trust
State Street Research Intermediate Bond Fund
Exhibit (8)(f)
STATE STREET RESEARCH SECURITIES TRUST
One Financial Center
Boston, Massachusetts 02111-2690
August 19, 1996
State Street Research
Investment Services, Inc.
One Financial Center
Boston, Massachusetts 02111-2690
Gentlemen:
This letter is to confirm to you that State Street Research Securities
Trust (the "Trust") has created a new series of shares to be known as State
Street Research Strategic Income Fund (the "Fund"), and that pursuant to the
First Amended and Restated Shareholders' Administrative Services Agreement
between the Trust and you dated as of November 3, 1993 (the "Agreement"), you
will provide shareholders' administrative services for the Fund. Pursuant to
this Letter Agreement, Appendix A to the Agreement is hereby revised in its
entirety to reflect the addition of the Fund and reads as attached.
Please indicate your acceptance of this responsibility in accordance
with the terms of the Agreement by signing this letter as indicated below.
The term "State Street Research Securities Trust" means and refers to
the Trustees from time to time serving under the Master Trust Agreement dated
January 25, 1994 ("Master Trust Agreement") as the same may subsequently thereto
have been, or subsequently hereto may be, amended. It is expressly agreed that
the obligations of the Trust hereunder shall not be binding upon any of the
Trustees, shareholders, nominees, officers, agents or employees of the Trust as
individuals or personally, but shall bind only the trust property of the Trust,
as provided in the Master Trust Agreement of the Trust. The execution and
delivery of this Agreement have been authorized by the Trustees of the Trust and
signed by a duly authorized officer of the Trust, acting as such, and neither
such authorization nor such execution and delivery shall be deemed to have been
made individually or to impose any personal liability, but shall bind only the
trust property of the Trust as provided
<PAGE>
in its Master Trust Agreement. The Master Trust Agreement of the Trust provides,
and it is expressly agreed, that each Fund of the Trust shall be solely and
exclusively responsible for the payment of its debts, liabilities and
obligations, and that no other fund shall be responsible for the same.
STATE STREET RESEARCH
SECURITIES TRUST
By: /s/ Ralph F. Verni
---------------------------
Ralph F. Verni
President
ACCEPTED AND AGREED TO:
STATE STREET RESEARCH
INVESTMENT SERVICES, INC.
/s/ C. Troy Shaver, Jr.
---------------------------
C. Troy Shaver, Jr.
President
<PAGE>
APPENDIX A
State Street Research Equity Trust
State Street Research Capital Appreciation Fund
State Street Research Equity Investment Fund
State Street Research Equity Income Fund
State Street Research Global Resources Fund
State Street Research Financial Trust
State Street Research Government Income Fund
State Street Research Strategic Portfolios: Aggressive
State Street Research Strategic Portfolios: Conservative
State Street Research Strategic Portfolios: Moderate
State Street Research Income Trust
State Street Research High Income Fund
State Street Research Government Securities Fund
State Street Research Managed Assets
State Street Research Money Market Trust
State Street Research Money Market Fund
State Street Research Tax-Exempt Trust
State Street Research Tax-Exempt Fund
State Street Research California Tax-Free Fund
State Street Research Florida Tax-Free Fund
State Street Research Massachusetts Tax-Free Fund
State Street Research New York Tax-Free Fund
State Street Research Pennsylvania Tax-Free Fund
State Street Research Texas Tax-Free Fund
State Street Research Virginia Tax-Free Fund
State Street Research Capital Trust
State Street Research Capital Fund
State Street Research Small Capitalization Growth Fund
State Street Research Small Capitalization Value Fund
State Street Research Exchange Trust
State Street Research Exchange Fund
State Street Research Growth Trust
State Street Research Growth Fund
State Street Research Master Investment Trust
State Street Research Investment Trust
State Street Research Securities Trust
State Street Research Intermediate Bond Fund
State Street Research Strategic Income Fund
Exhibit (10)
[Letterhead of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, Massachusetts 02111
Telephone: 617/542-6000
Telex: 94-0198
Fax 617/542-2241
Direct Dial Number
(617) 348-1669]
November 24, 1992
State Street Growth Trust
One Financial Center
Boston, Massachusetts 02111
Dear Sir:
We are furnishing this opinion and consent to the use of our name with
a view to your filing the same or duplicates thereof with the Securities and
Exchange Commission, Washington, D.C., as Exhibit 10 to your registration
statement on Form N-1A, which consists of a filing under the Securities Act of
1933, as amended, and Amendment No. 16 to your Registration Statement under the
Investment Company Act of 1940, as amended, (No. 811-985) filed by you with said
Commission and with which this opinion or duplicates thereof are to be filed.
Said Registration Statement relates in part to the proposed public offering of
an indefinite number of shares of beneficial interest in State Street Growth
Fund ("Shares"), a series of State Street Growth Trust.
We have examined all such records, papers and documents as we believe
necessary in order to enable us to render the opinion set forth below.
On the basis of the foregoing we are of the opinion that:
1. State Street Growth Trust (the "Trust") was duly formed and is a
lawfully existing Massachusetts Business Trust under the laws of the
Commonwealth of Massachusetts.
2. The Trust has authorized an unlimited number of shares of beneficial
interest.
3. The Shares have been duly authorized and, when the Shares are issued
and delivered in the manner, and the Trust has received therefor the
consideration, described in said Registration Statement and in the related
Prospectus upon or after the effective date thereof, the Shares so issued and
delivered will be legally and validly issued, fully paid and nonassessable.
Very truly yours,
/s/ Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
MlNTZ, LEVIN, COHN, FERRIS,
GLOVSKY AND POPEO, P.C.
Exhibit (11)
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of
State Street Research Growth Trust
We consent to the inclusion in Post-Effective Amendment No. 6 to the
Registration Statement of the State Street Research Growth Trust on Form N-1A
(Securities Act of 1933 File No. 33-55024) of our report dated February 9, 1998
on our audit of the financial statements and financial highlights of State
Street Research Growth Fund for the year ended December 31, 1997. We also
consent to the reference to our Firm under the captions "Financial Highlights"
and "Independent Accountants" in the Registration Statement.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
February 26, 1998
Exhibit (14)(a)
- --------------------------------------------------------------------------------
State Street Research Funds
- --------------------------------------------------------------------------------
IRA Application
Please use a pen and print in CAPITAL LETTERS.
1 What Type of IRA?
- --------------------------------------------------------------------------------
(Check only one box to specify the type of IRA you are establishing. If
appropriate, please also indicate the type of transaction you are making.)
[ ] TRADITIONAL IRA (Check one box)
o Annual Contributions of up to $2,000 (or total compensation, if less).
Indicate year and amount:
Contribution for [ ] current tax year [ ] prior tax year Amount: $[ ]
o Rollover of a withdrawal from another IRA within the past 60 days.
o Direct transfer* from another IRA. (Use a Traditional IRA for a rollover
or direct transfer if the other IRA contains only annual contributions,
not rollover or direct rollover amounts from an employer plan or 403(b)).
[ ] ROLLOVER IRA (Contributions should come from one of the following)
o Rollover of an eligible rollover distribution from an employer-sponsored
retirement plan. A check should be attached to this application.
o Direct rollover from an employer-sponsored retirement plan. A Transfer of
Assets Request Form should be returned with this application.
o Direct transfer or rollover from an existing IRA containing money
previously from an employer-sponsored retirement plan. A Transfer of
Assets Request Form should be returned with this application.
[ ] ROTH IRA (Check one box)
[ ] Annual Contributions of up to $2,000 (or total compensation, if less).
Contribution for 1998 in the amount of $ [ ]
[ ] Conversion of a State Street Research Traditional IRA to a State Street
Research Roth IRA:
State Street Research IRA Account No: [ ]
Amount converted: [ ] Full Balance [ ] Part ($____________________
OR _____________%)
[ ] Transfer* or Rollover of Traditional IRA with another trustee/custodian
to a State Street Research Roth IRA.
Under IRS rules, you must establish separate Roth IRAs for annual
contributions and for conversion/rollover/transfer of amounts from a
Traditional IRA in any particular calendar year. The taxable amount
converted from a Traditional IRA is considered taxable income to you in the
year of the conversion. For conversions completed during 1998, the
additional taxable income is spread over the four-year period beginning in
1998 and ending in 2001.
2 Your Name and Address
- --------------------------------------------------------------------------------
(Use separate application for Traditional IRA or Roth IRA for spouse)
[ ][ ][ ][ ][ ][ ][ ][ ] [ ] [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ]
First name Middle Last name
[ ][ ][ ][ ][ ] [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ]
Street number Street name
[ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ] [ ][ ] [ ][ ][ ][ ][ ]
City State Zip
[ ][ ][ ]-[ ][ ][ ]-[ ][ ][ ][ ] [ ][ ][ ]-[ ][ ][ ]-[ ][ ][ ][ ]
Daytime phone number Evening phone number
[ ][ ][ ][ ]-[ ][ ]-[ ][ ][ ][ ] [ ]-[ ][ ]-[ ][ ][ ][ ]
Social Security number Date of birth (month/day/year)
<PAGE>
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State Street Research Funds
- --------------------------------------------------------------------------------
3 Which Funds Have You Selected?
- --------------------------------------------------------------------------------
o Choose one share class for each fund. Generally, the minimum investment is
$2,000 per account.
<TABLE>
<CAPTION>
Name Amount You Are Investing Share Class
A B C
<S> <C> <C> <C> <C> <C>
[ ] Aurora* $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % [ ] [ ] [ ]
[ ] Capital $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % [ ] [ ] [ ]
[ ] Emerging Growth $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % [ ] [ ] [ ]
[ ] Equity Income** $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % [ ] [ ] [ ]
[ ] Equity Investment $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % [ ] [ ] [ ]
[ ] Global Resources $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % [ ] [ ] [ ]
[ ] Government Income $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % [ ] [ ] [ ]
[ ] Growth $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % [ ] [ ] [ ]
[ ] High Income $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % [ ] [ ] [ ]
[ ] International Equity $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % [ ] [ ] [ ]
[ ] Investment Trust $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % [ ] [ ] [ ]
[ ] Legacy $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % [ ] [ ] [ ]
[ ] Managed Assets $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % [ ] [ ] [ ]
[ ] Money Market $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % Class E only
[ ] Strategic Income $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % [ ] [ ] [ ]
[ ] Other ______________ $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % [ ] [ ] [ ]
name of fund
</TABLE>
*Check with your financial adviser to find out about the current availability
of this Fund. **Pending name change to State Street Research Alpha Fund.
If a check is enclosed, make it payable to "State Street Bank and Trust Company,
Trustee." (Please add $10 for the first year's trustee fee otherwise, the fee
will be deducted from your account at year end.)
4 Options for Reducing Sales Charges
- --------------------------------------------------------------------------------
[ ] I wish to apply for reduced Class A sales charges through:
[ ] Right of Accumulation
When calculating my sales charges for this investment, please include the assets
in the following accounts owned by me, my family members or other eligible
persons:
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Account number
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Account number
[ ] Letter of Intent
I plan to invest, without obligation, a total of at least the following amount
in eligible mutual funds over the next 13 months:
[ ] $100,000 [ ] $250,000 [ ] $500,000 [ ] $1 million
[ ] Please include investments made within the past 90 days in these accounts
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Account number
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Account number
<PAGE>
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State Street Research Funds
- --------------------------------------------------------------------------------
5 Telephone Exchange Privilege
- --------------------------------------------------------------------------------
o Note: You automatically receive this privilege unless you decline it.
o See terms and conditions for telephone exchange requests in current
prospectus(es).
o Telephone Exchange Privilege Allows you or your dealer to request
exchanges into other State Street Research funds (and assumes you have read
the relevant prospectuses).
I DO NOT want this privilege on my account [ ]
Initial here
6 Transfers From Your Bank
- --------------------------------------------------------------------------------
* Convenient services to help you buy fund shares.
* Be sure to attach a deposit slip or voided, unsigned check.
[ ] I would like to request one or more of the following services:
[ ] Investamatic
Allows you to make periodic investments into the State Street Research
fund of your choice. I authorize automatic withdrawals from the bank
account specified on this page. I request these withdrawals to occur
[ ] every month, on the [ ] 5th of the month.
[ ] every quarter, [ ] 20th of the month.
[ ] 5th and 20th of the month.
$ [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ]
Investment amount ($50 minimum)
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Fund name
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Account number (if existing account)
$ [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ]
Investment amount ($50 minimum)
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Fund name
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Account number (if existing account)
[ ] EZ Trader
Allows you to move money at any time from your bank account to your fund
account by calling State Street Research. NOTE: Your bank must be a
member of the Automated Clearing House (ACH) system.
[ ] Bank Account Information. Please establish the service(s) between my fund
account and my:
[ ] Checking account (voided, unsigned check attached)
[ ] Now / money market / savings account (deposit slip attached)
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Bank name
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Bank address
[ ] [ ] [ ] [ ] [ ]
City
[ ] [ ] [ ] [ ] [ ] [ ] [ ]
State Zip
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Bank routing number
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Bank account number
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
First name of bank account holder, exactly as on bank statements
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Last name of bank account holder, exactly as on bank statements
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
First name of second bank account holder, if any
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Last name of second bank account holder, if any
[ ]
Signature of one bank account holder, exactly as on bank statements
[ ]
Signature of second bank account holder, if any
<PAGE>
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State Street Research Funds
- --------------------------------------------------------------------------------
7 Who is Your Beneficiary?
- --------------------------------------------------------------------------------
(Only one primary beneficiary required per account. You may designate a
secondary beneficiary if desired. If you wish to designate two or more
primary and/or secondary beneficiaries, use a separate sheet and specify the
desired percentage to each.)
Primary beneficiary
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
First name Middle Last name
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Street number Street name
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
City State Zip
[ ] [ ] [ ]- [ ] [ ]- [ ] [ ] [ ] [ ] [ ] [ ]- [ ] [ ]- [ ] [ ] [ ] [ ]
Social Security number Date of birth (month/day/year)
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Relationship
Secondary beneficiary
(If the person(s) named as primary beneficiary fails to survive you.)
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
First name Middle Last name
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Street number Street name
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
City State Zip
[ ] [ ] [ ] [ ]- [ ] [ ]- [ ] [ ] [ ] [ ] [ ] [ ]-[ ] [ ]-[ ] [ ] [ ] [ ]
Social Security number Date of birth (month/day/year)
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Relationship
8 Acceptance by the Trustee:
- --------------------------------------------------------------------------------
This Individual Retirement Account shall be deemed to have been accepted by the
Trustee, State Street Bank and Trust Company, after all necessary forms,
properly completed, are received by State Street Research Service Center, and
delivered by the Service Center to the agent for the Trustee.
<PAGE>
- --------------------------------------------------------------------------------
State Street Research Funds
- --------------------------------------------------------------------------------
9 We Need Your Signature
- --------------------------------------------------------------------------------
By checking the "Traditional IRA" box or the "Rollover IRA" box, I designate the
account as an Individual Retirement Account under Internal Revenue Code Section
408(a). By checking the "Roth IRA" box, I designate the account as a Roth
Individual Retirement Account under Internal Revenue Code Section 408A. I
appoint State Street Bank and Trust Company as Trustee of my account, direct
that contributions to my Traditional IRA, Rollover IRA or Roth IRA be invested
as specified by this application, and designate the individual(s) named above,
or in any signed attachment, as my beneficiary(ies). I have received a current
prospectus for each of the Fund(s) indicated above and the Terms and Conditions
of the State Street Research Combined IRA (which are incorporated herein by
reference) and have read the State Street Research Disclosure Statement for
either Traditional IRAs and Rollover IRAs, or Roth IRAs, as applicable.
If I have indicated a Rollover IRA or a Traditional IRA with a contribution
consisting of a rollover or a direct transfer from another IRA, I certify
that the contribution does not include any employee contributions to any
qualified plan (other than accumulated deductible employee contributions) or
403(b) arrangement; that any assets transferred in kind are the same assets
received by me in the distribution being rolled over; if the distribution is
from another Traditional IRA, that I have not made another Traditional IRA
rollover within the one-year period immediately preceding this rollover; that
such distribution was received within 60 days of making the rollover to this
account; and that no portion of the amount rolled over is required under the
minimum distribution rules.
If I have elected a Conversion or Rollover Roth IRA, I acknowledge that the
amount converted will be treated as taxable income (except for prior
nondeductible contributions) for federal income tax purposes.
Under penalties of perjury, I further certify that (1) the number shown on
this form is my correct taxpayer identification number (or I am waiting for a
number to be issued to me), and (2) I am not subject to backup withholding
because (a) I am exempt from backup withholding, or (b) I have not been
notified by the Internal Revenue Service that I am subject to backup
withholding as a result of a failure to report all interest or dividends, or
(c) the IRS has notified me that I am no longer subject to backup withholding.
I confirm that all the information, instructions and agreements set forth
hereon shall apply to the account, and if applicable, shall also apply to any
other Fund account with shares acquired upon exchange of shares of any Fund
held in my IRA.
[ ] [ ] [ ]-[ ] [ ]-[ ] [ ] [ ] [ ]
Your signature Date (month/day/year)
Applications with checks in excess of $10,000 that are not sent through a
financial intermediary will need a signature guarantee. Please contact our
Service Center at 1-800-562-0032 for more information.
<PAGE>
- --------------------------------------------------------------------------------
State Street Research Funds
- --------------------------------------------------------------------------------
10 Dealer Information
- --------------------------------------------------------------------------------
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Dealer first name Middle Last name
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Street number Street name of home office
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
City State Zip
[ ] [ ] [ ]-[ ] [ ] [ ]- [ ] [ ] [ ] [ ]
Telephone number
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Street number Street name of branch office servicing account
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
City State Zip
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Telephone number
[ ]
Signature of authorized officer of dealer
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Registered representative's name Registered representative's telephone number
By signing above, the dealer:
o agrees to the terms of the current prospectus(es), Application and current
dealer agreement, which is included by reference.
o represents that it has given the owner(s) the relevant prospectus(es).
o represents that it has completed this Application according to instructions
from the owner(s).
o will indemnify the Fund(s), its adviser, distributor or other agents from any
losses resulting from these instructions.
o guarantees the owner's legal capacity and all signatures of this Application
and on related investment checks and instructions.
State Street Bank and Trust Company, Trustee: You are hereby authorized and
appointed on behalf of the above-signed dealer to execute the purchase
transactions in accordance with the terms and conditions of this Application,
and to confirm each purchase.
[State Street logo] STATE STREET RESEARCH
P.O. Box 8408
Boston, MA 02266-8408
1-800-562-0032
CONTROL NUMBER: 4513-971219(1298)SSR-LD IR-862E-12970
<PAGE>
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State Street Research Funds
Individual Retirement Account
- --------------------------------------------------------------------------------
Please use a pen and print in CAPITAL LETTERS.
Transfer of Assets Request Form
Please send this form to: State Street Research Service Center, P.O. Box
8408, Boston, MA 02266-8408. Do not rollover or transfer any amounts required
to be paid to you under the minimum distribution rules that apply to a
Traditional IRA Account after you reach age 70-1/2.
1 Your Name and Address
- --------------------------------------------------------------------------------
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
First name Middle Last name
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Street number Street name
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
City State Zip
[ ] [ ] [ ]-[ ] [ ] [ ]-[ ] [ ] [ ] [ ] [ ] [ ] [ ]-[ ] [ ] [ ]-[ ] [ ] [ ] [ ]
Daytime phone number Evening phone number
[ ] [ ] [ ]- [ ] [ ]-[ ] [ ] [ ] [ ] [ ] [ ]-[ ] [ ]-[ ] [ ] [ ] [ ]
Social Security number Date of birth (month/day/year)
If you already have a State Street Research IRA to which amounts will be
transferred, please put the account number in the space below.
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Fund number (leave any unused spaces blank)
If you do not have a State Street Research IRA, please complete the State Street
Research IRA Application and submit it with this document.
2 Which Funds Have You Selected?
- --------------------------------------------------------------------------------
Note: If you are submitting a State Street Research IRA Application with this
Transfer of Assets Request Form, you may indicate your investment selections on
the Application and leave the following fund selections blank on this form.
<TABLE>
<CAPTION>
Share Class*
A B C
<S> <C> <C> <C>
[row of open boxes] [ ] [ ] [ ]
Fund name
[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] OR [ ]%
Amount ($2,000 minimum in dollar amount or percentage)
[row of open boxes] [ ] [ ] [ ]
Fund name
[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] OR [ ]%
Amount ($2,000 minimum in dollar amount or percentage)
[row of open boxes] [ ] [ ] [ ]
Fund name
[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] OR [ ]%
Amount ($2,000 minimum in dollar amount or percentage)
TOTAL 100%
----------
</TABLE>
*Investments in Money Market Fund will purchase Class E shares.
**Class C shares not available through MetLife Securities, Inc.
3 Type of IRA Receiving Transfer or Direct Rollover (Check One Box)
- --------------------------------------------------------------------------------
[ ] Traditional IRA Transfers to a Traditional IRA should be made only from
another Traditional IRA, simplified employee pension (SEP) plan account, or a
SIMPLE IRA at least 2 years after your first contribution. Note: You cannot
transfer from a Roth IRA to a Traditional IRA.
[ ] Rollover IRA Transfers to a Rollover IRA include transfers of eligible
rollover distributions from a qualified employer plan or 403(b) arrangement
(also called direct rollovers), or from another IRA that holds only amounts
originating with such a direct rollover.
[ ] Roth IRA Transfer must be from a Traditional IRA or a Roth IRA only.
(Transfers from a Traditional IRA are subject to tax as income.) Under IRS
rules, you must establish a separate Roth IRA for amounts transferred from a
Traditional IRA in any particular calendar year. Note: You cannot directly
rollover any amount from an employer-sponsored plan to a Roth IRA.
<PAGE>
- --------------------------------------------------------------------------------
State Street Research Funds
- --------------------------------------------------------------------------------
4 Information about Current Account and Transfer Authorization
- --------------------------------------------------------------------------------
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Name of current Trustee/Custodian
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Current account number
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Street number Street name
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
City State Zip
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]-[ ] [ ] [ ]-[ ] [ ] [ ] [ ]
Name of contact person Telephone number of contact person
Include a copy of your most recent statement.
By signing below, I authorize and direct my current trustee/custodian to
transfer my account assets to State Street Research as follows:
Please redeem [ ] ALL or [ ] PART ($[ ] OR [ ]%) of my present account and
transfer the redemption proceeds to State Street Research [ ] Immediately
[ ] at maturity.
[ ] [ ] [ ]-[ ] [ ]-[ ] [ ] [ ] [ ]
Your signature Date (month/day/year)
[ ] [ ] [ ]-[ ] [ ]-[ ] [ ] [ ] [ ]
Employer's signature (if required) Date (month/day/year)
5 Signature Guarantee
- --------------------------------------------------------------------------------
(Ask your current custodian/trustee if it requires your signature to be
guaranteed.)
[ ]
Name of Firm
[ ] [ ] [ ]-[ ] [ ]-[ ] [ ] [ ] [ ]
Signature of Authorized Officer Date (month/day/year)
Please do not fill out the lower portion of this form.
- --------------------------------------------------------------------------------
For current trustee/custodian use: Instructions for delivery to State Street
Research IRA.
Please liquidate and transfer on a fiduciary-to-fiduciary basis all or part of
the designated account as instructed above and make check payable to: State
Street Bank and Trust Company, Trustee. Please include account number and FBO on
the check. Mail to: State Street Research Service Center, P.O. Box 8408, Boston,
MA 02266-8408. Please remember to include a copy of this form, along with a
check, for proper credit to the taxpayer's account. State Street Research
Service Center will deliver the items to the agent for State Street Bank and
Trust Company, which serves as Trustee.
For successor trustee/custodian use: Successor Trustee's acceptance of
Individual Retirement Account assets.
State Street Bank and Trust Company will accept the transfer described above
once this form has been completed and signed by you.
- --------------------------------------------------------------------------------
Authorized signature of acceptance by Agent for State Street Bank and Trust
Company, Trustee.
[State Street logo] State Street Research
P.O. Box 8408
Boston, MA 02266-8408
1-800-562-0032
CONTROL NUMBER: 4512-971219(1298)SSR-LD IR-864E-1297
<PAGE>
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State Street Research
- --------------------------------------------------------------------------------
Terms & Conditions
- --------------------------------------------------------------------------------
The Terms and Conditions for Traditional IRAs apply to Traditional IRAs
operating under section 408(a) of the Internal Revenue Code only. Articles I
through VII of these Terms and Conditions for Traditional IRAs are in the form
promulgated by the Internal Revenue Service in Form 5305 for use in establishing
an individual retirement Trust Account. Please see additional Terms and
Conditions for All IRAs below for additional provisions applicable to your
Traditional IRA.
ARTICLE I.
The Trustee may accept additional cash contributions on behalf of the
Grantor for a tax year of the Grantor. The total cash contributions are limited
to $2,000 for the tax year unless the contribution is a rollover contribution
described in section 402(c) (but only after December 31, 1992), 403(a)(4),
403(b)(8), 408(d)(3), or an employer contribution to a simplified employee
pension plan as described in section 408(k). Rollover contributions before
January 1, 1993, include rollovers described in section 402(a)(5), 402(a)(6),
402(a)(7), 403(a)(4), 403(b)(8), 408(d)(3), or an employer contribution to a
simplified employee pension plan as described in section 408(k).
ARTICLE II.
The Grantor's interest in the balance in the Trust Account is
nonforfeitable.
ARTICLE III.
1. No part of the custodial funds may be invested in life insurance
contracts, nor may the assets of the Trust Account be commingled with other
property except in a common trust fund or common investment fund (within the
meaning of section 408(a)(5)).
2. No part of the custodial funds may be invested in collectibles (within
the meaning of section 408(m)) except as otherwise permitted by section
408(m)(3) which provides an exception for certain gold and silver coins and
coins issued under the laws of any state.
ARTICLE IV.
1. Notwithstanding any provision of this agreement to the contrary, the
distribution of the Grantor's interest in the Trust Account shall be made in
accordance with the following requirements and shall otherwise comply with
section 408(a)(6) and Proposed Regulations section 1.408-8, including the
incidental death benefit provisions of Proposed Regulations section
1.401(a)(9)-2, the provisions of which are herein incorporated by reference.
2. Unless otherwise elected by the time distributions are required to begin
to the Grantor under paragraph 3, or to the surviving spouse under paragraph 4,
other than in the case of life annuity, life expectancies shall be recalculated
annually. Such election shall be irrevocable as to the Grantor and the surviving
spouse and shall apply to all subsequent years. The life expectancy of a
nonspouse beneficiary may not be recalculated.
3. The Grantor's entire interest in the Trust Account must be, or begin to
be, distributed by the Grantor's required beginning date (April 1 following the
calendar year end in which the Grantor reaches age 70-1/2). By that date, the
Grantor may elect, in a manner acceptable to the Trustee, to have the balance in
the custodial account distributed in:
(a) A single sum payment
(b) An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the life of the Grantor.
(c) An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the joint and last survivor lives of the
Grantor and his or her designated beneficiary.
(d) Equal or substantially equal annual payments over a specified period
that may not be longer than the Grantor's life expectancy.
(e) Equal or substantially equal annual payments over a specified period
that may not be longer than the joint life and last survivor expectancy of
the Grantor and his or her designated beneficiary.
4. If the Grantor dies before his or her entire interest is distributed to
him or her, the entire remaining interest will be distributed as follows:
(a) If the Grantor dies on or after distribution of his or her interest has
begun, distribution must continue to be made in accordance with paragraph
3.
(b) If the Grantor dies before distribution of his or her interest has
begun, the entire remaining interest will, at the election of the Grantor
or, if the Grantor has not so elected, at the election of the beneficiary
or beneficiaries, either
(i) Be distributed by the December 31 of the year containing the fifth
anniversary of the Grantor's death, or
(ii) Be distributed in equal or substantially equal payments over the
life or life expectancy of the designated beneficiary or beneficiaries
starting by December 31 of the year following the year of the
Grantor's death. If, however, the beneficiary is the Grantor's
surviving spouse, then this distribution is not required to begin
before December 31 of the year in which the Grantor would have turned
age 70-1/2.
(c) Except where distribution in the form of an annuity meeting the
requirements of section 408(b)(3) and its related regulations has
irrevocably commenced, distributions are treated as having begun on the
Grantor's required beginning date, even though payments may actually have
been made before that date.
(d) If the Grantor dies before his or her entire interest has been
distributed and if the beneficiary is other than the surviving spouse, no
additional cash contributions or rollover contributions may he accepted in
the Account.
5. In the case of distribution over life expectancy in equal or
substantially equal annual payments, to determine the minimum annual payment for
each year, divide the Grantor's entire interest in the Trust Account as of the
close of business on December 31 of the preceding year by the life expectancy of
the Grantor (or the joint life and last survivor expectancy of the Grantor and
the Grantor's designated beneficiary, or the life expectancy of the designated
beneficiary, whichever applies). In the case of distributions under paragraph 3,
determine the initial life expectancy (or joint life and last survivor
expectancy) using the attained ages of the Grantor and designated beneficiary as
of their birthdays in the year the Grantor reaches age 70-1/2. In the case of a
distribution in accordance with paragraph 4(b)(ii), determine life expectancy
using the attained age of the
<PAGE>
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State Street Research
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
designated beneficiary as of the beneficiary's birthday in the year
distributions are required to commence.
6. The owner of two or more individual retirement accounts may use the
"alternative method" described in Notice 88-38, 1988-1 C. B. 524, to satisfy the
minimum distribution requirements described above. This method permits an
individual to satisfy these requirements by taking from one individual
retirement account the amount required to satisfy the requirement for another.
ARTICLE V.
1. The Grantor agrees to provide the Trustee with information necessary for
the Trustee to prepare any reports required under section 408(i) and Regulations
sections 1.408-5 and 1.408-6.
2. The Trustee agrees to submit reports to the Internal Revenue Service and
the Grantor as prescribed by the Internal Revenue Service.
ARTICLE VI.
Notwithstanding any other articles which may be added or incorporated, the
provisions of Articles I through III and this sentence will be controlling. Any
additional articles that are not consistent with section 408(a) and related
regulations will be invalid.
ARTICLE VII.
This agreement will be amended from time to time to comply with the
provisions of the Code and related regulations. Other amendments may be made
with the consent of the persons whose signatures appear on the Application.
STATE STREET RESEARCH COMBINED IRA
TERMS & CONDITIONS FOR ROTH IRAs
The Terms and Conditions for Roth IRAs apply to Roth IRAs operating under
section 408A of the Internal Revenue Code only. Articles I through VII of these
Terms and Conditions for Roth IRAs are in the form promulgated by the Internal
Revenue Service in Form 5305-R for use in establishing a Roth Individual
Retirement Trust Account. Please see additional Terms and Conditions for All
IRAs for additional provisions applicable to your Roth IRA.
Article I
1. If this Roth IRA is not designated as a Roth Conversion IRA, then,
except in the case of a rollover contribution described in section 408A(e), the
trustee will accept only cash contributions and only up to a maximum amount of
$2,000 for any tax year of the grantor.
2. If this Roth IRA is designated as a Roth Conversion IRA, no
contributions other than IRA Conversion Contributions made during the same tax
year will be accepted.
Article IA
The $2,000 limit described in Article I is gradually reduced to $0 between
certain levels of adjusted gross income (AGI). For a single grantor, the $2,000
annual contribution is phased out between AGI of $95,000 and $110,000; for a
married grantor who files jointly, between AGI of $150,000 and $160,000; and for
a married grantor who files separately, between $0 and $15,000. In case of a
conversion, the trustee will not accept IRA Conversion Contributions in a tax
year if the grantor's AGI for that tax year exceeds $100,000 or if the grantor
is married and files a separate return. Adjusted gross income is defined in
section 408A(c)(3) and does not include IRA Conversion Contributions.
Article II
The grantor's interest in the balance in the trust account is
nonforfeitable.
Article III
1. No part of the trust funds may be invested in life insurance contracts,
nor may the assets of the trust account be commingled with other property except
in a common trust fund (within the meaning of section 408(a)(5)).
2. No part of the trust funds may be invested in collectibles (within the
meaning of section 408(m)) except as otherwise permitted by section 408(m)(3),
which provides an exception for certain gold, silver, and platinum coins, coins
issued under the laws of any state, and certain bullion.
Article IV
1. If the grantor dies before his or her entire interest is distributed to
him or her and the grantor's surviving spouse is not the sole beneficiary, the
entire remaining interest will, at the election of the grantor or, if the
grantor has not so elected, at the election of the beneficiary or beneficiaries,
either:
(a) Be distributed by December 31 of the year containing the fifth
anniversary of the grantor's death, or
(b) Be distributed over the life expectancy of the designated beneficiary
starting no later than December 31 of the year following the year of the
grantor's death.
If distributions do not begin by the date described in (b), distribution
method (a) will apply.
2. In the case of distribution method 1(b) above, to determine the minimum
annual payment for each year, divide the grantor's entire interest in the trust
as of the close of business on December 31 of the preceding year by the life
expectancy of the designated beneficiary using the attained age of the
designated beneficiary as of the beneficiary's birthday in the year
distributions are required to commence and subtract 1 for each subsequent year.
3. If the grantor's spouse is the sole beneficiary on the grantor's date of
death, such spouse will then be treated as the grantor.
Article V
1. The grantor agrees to provide the trustee with information necessary for
the trustee to prepare any reports required under sections 408(i) and
408A(d)(3)(E), and Regulations section 1.408-5 and 1.408-6, and under guidance
published by the Internal Revenue Service.
2. The trustee agrees to submit reports to the Internal Revenue Service and
the grantor as prescribed by the Internal Revenue Service.
Article VI
Notwithstanding any other articles which may be added or incorporated, the
provisions of Articles I through IV and this sentence will be controlling. Any
additional articles that are not consistent with section 408A, the related
regulations, and other published guidance will be invalid.
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Terms & Conditions continued
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Article VII
This agreement will be amended from time to time to comply with the
provisions of the Code, related regulations, and other published guidance. Other
amendments may be made with the consent of the persons whose signatures appear
below.
STATE STREET RESEARCH COMBINED IRA
ADDITIONAL TERMS AND CONDITIONS FOR ALL IRAs
ARTICLE VIII.
1. The amount of each contribution credited to the Grantor's individual
retirement Trust Account shall (except to the extent applied to pay fees or
other charges under section 7 below) be applied to purchase full and fractional
shares of beneficial interest of one or more classes in one or more mutual funds
(hereinafter collectively the "Funds" or individually a "Fund"), as designated
from time to time by State Street Research Investment Services, Inc. ("SSRIS")
as available for investment under this agreement (provided always that such
shares may legally be offered for sale in the state of the Grantor's residence),
in accordance with instructions of the Grantor given under Section 3 below. The
Trustee (or any party appointed to act as agent for the Trustee under section 16
of this Article VIII--the "Agent"; whenever an Agent is acting for the Trustee,
references to the Trustee will be deemed to include the Agent) may retain the
Grantor's initial deposit for a period of up to ten days after receipt thereof
without liability for any loss of interest, earnings or appreciation, and may
invest such initial deposit at the end of such period if the Grantor has not
revoked his account. The Grantor may revoke the Account by written notice to the
Trustee or its Agent received by the Trustee or its Agent within seven calendar
days after the Grantor establishes the account. Upon revocation, the amount of
the Grantor's initial deposit will be returned to him, without interest.
As used in this Article VIII, "Account" or "Trust Account" means the
individual retirement account established using The Terms and Conditions For
Traditional IRAs And The Additional Terms and Conditions for All IRAs for a
Traditional IRA* , or, for a Roth IRA** , The Terms and Conditions for Roth IRAs
and the Terms and Conditions for All IRAs, along with, in either case, the State
Street Research and Management Company Combined Individual Retirement Account
Application signed by the Grantor and specifying whether the Account is a
Traditional IRA or a Roth IRA. See Section 25 below.
2. All dividends and capital gain distributions received on the shares of a
particular class of any Fund held in the Grantor's Account shall be retained in
the Account and (unless received in additional shares of such class) shall be
reinvested in full and fractional shares of such class of such Fund.
3. For each contribution, the Grantor shall designate the portion that will
be invested in each Fund. A contribution may be invested entirely in one Fund,
or may be invested in two or more Funds. However, investment designations will
be subject to any minimum initial or additional investment rules applicable to a
Fund. In addition, the Grantor shall designate which class of shares of each
such Fund the Grantor's contribution shall be invested in. The Grantor shall
make such designation on the State Street Research Combined Individual
Retirement Account Application or other written notice acceptable to the
Trustee.***
4. Subject to the minimum initial or additional investment, minimum balance
and other exchange rules applicable to a Fund, the Grantor may at any time
direct the Trustee to exchange all or a specified portion of the shares of a
Fund in the Grantor's Account for shares and fractional shares of one or more
other Funds.
The Trustee and the Trustee will process such directions as soon as
practicable after receipt thereof.
If any investment designation or direction relating to investments under
these Terms and Conditions is, in the opinion of the Trustee (or SSRIS or the
Agent), ambiguous or incomplete, the Trustee may refrain from carrying out such
designation or other investment direction until the designation or other
investment direction has been clarified or completed to the Trustee's
satisfaction, and neither the Trustee, SSRIS, the Agent nor any Fund (nor any of
their affiliates) will have any liability for loss of interest, earnings or
investment gains or appreciation during such period.
5. The Grantor, by written notice to the Trustee, may designate one or more
beneficiaries to receive the balance (if any) remaining in the Grantor's account
after his death and the time and manner of payment of such balance (subject to
the applicable requirements of the preceding Articles of these Terms and
Conditions). A designation may be on a form provided by the Trustee or on a
written instrument acceptable to the Trustee executed by the Grantor and filed
with the Trustee. The Grantor may revoke or change such designation in like
manner, at any time and from time to time. No designation will be effective
until received by the Trustee. Any designation filed with the Trustee (whether
or not such designation fully disposes of the Grantor's account) will revoke all
other designations previously filed with the Trustee. If no such designation is
in effect upon the Grantor's death, or if such a designation is in effect but
does not fully dispose of the Grantor's account, the balance in the account
shall be paid in a single sum, as soon as is practicable, to the Grantor's
estate.
Subject to the applicable requirements of the preceding Articles of these
Terms and Conditions, the Grantor may designate a form of payment to the
beneficiary by filing an instrument so specifying with the Trustee. In the
absence of such written instructions from the Grantor, the Trustee will pay the
beneficiary in such form as the beneficiary selects.
Except as provided in the first sentence of the preceding paragraph,
following the Grantor's death, each beneficiary (or the representative of the
Grantor's estate) will exercise the powers and responsibilities of the Grantor
hereunder with respect to the portion of the Grantor's account passing to such
beneficiary (or estate).
6. The Trustee shall forward to the Grantor any notices, prospectuses,
reports to shareholders, financial statements, proxies and proxy soliciting
materials, relating to the Fund shares in the Grantor's account. The Trustee
shall vote any such shares
* under Code Section 408(a)
** under Code Section 408A
*** If the Grantor's instructions with respect to the investment of any
contribution are not received, or are received but are in the opinion of
the Trustee incomplete, ambiguous or otherwise not in good order, the
contribution may be returned to the Grantor, or may be held uninvested or
invested in a money market fund (if available), pending completion,
clarification or correction of such instructions by the Grantor, in all
cases without liability for a loss of interest, earnings or investment
gains or appreciation during such time.
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held in the account in accordance with the timely written instructions of the
Grantor if received. If no timely written instructions are received from the
Grantor, the Trustee may vote such shares in such manner as it deems appropriate
(including "present" or in accordance with the recommendations of SSRIS).
7. The Trustee's fee for performing its duties hereunder shall be such
reasonable amounts as shall be agreed to from time to time by the Trustee and
SSRIS. Such fee, any taxes of any kind and any liabilities with respect to the
Account, and any and all expenses reasonably incurred by the Trustee shall, if
not paid by the Grantor, be paid from the Grantor's Account.
8. The Trustee shall make distributions from the Account at such times and
in such manner as the Grantor directs in writing, subject (except where
otherwise specifically provided in this Article VIII) to the applicable
requirements of the preceding Articles of these Terms and Conditions.
The recalculation of life expectancy of the Grantor and/or the Grantor's
spouse in connection with distributions from the Account before the Grantor's
death will be made only at the written election of the Grantor. The
recalculation of life expectancy of the surviving spouse in connection with
distributions from the Account after the Grantor's death will be made only at
the election of the surviving spouse. By establishing the Account, the Grantor
(for himself and his surviving spouse, if any) determines not to recalculate
life expectancies unless the Grantor (or surviving spouse) specifically elects
the recalculation of life expectancies approach in accordance with the following
sentence. Any such election may be made in such form as the Grantor (or the
surviving spouse) provides for (including instructions to such effect to the
Trustee or the calculation of minimum distribution amounts in accordance with a
method that provides for recalculation of life expectancy and instructions to
the Trustee to make distributions in accordance with such method).
9. It shall be the sole responsibility of the Grantor to determine the time
and amount of contributions to the Account and the time, amount and manner of
payment of withdrawals from the Account (and to instruct the Trustee or the
Agent accordingly), and the federal and state tax treatment of any contributions
to or withdrawals from the Account (including the determination of the portion
of any withdrawal that is taxable or not taxable and the applicability of any
penalties). SSRIS, the Agent, the Trustee and the Funds shall be fully protected
in following the direction of the Grantor with respect to the time, amount and
manner of payment of such withdrawals, or in not acting in the absence of such
direction. If the Grantor (or beneficiary) does not direct the Trustee to make
withdrawals from the Account by the time that such withdrawals are required to
commence in accordance with the preceding Articles of these Terms and
Conditions, the Trustee (and SSRIS and the Agent) will assume that the Grantor
(or beneficiary) is meeting any applicable minimum distribution requirements
from another individual retirement arrangement maintained by the Grantor (or
beneficiary) and will be fully protected in so doing. SSRIS, the Agent, the
Trustee and the Funds shall not be liable for any taxes, penalties, liabilities
or other costs to the Grantor or any other person resulting from contributions
to or withdrawals from the Grantor's Account.
10. SSRIS, the Agent, the Trustee and the Funds shall not be responsible
for any loss or diminution in the value of the Grantor's account arising out of
the Grantor's establishment of a State Street Research Regular Individual
Retirement Account or Roth Individual Retirement Account or arising out of any
investment instruction, direction or order of the Grantor, whether relating to
the portion of contributions contributed to either the Regular Individual
Retirement Account or the Roth Individual Retirement Account, or invested in one
or more of the Funds, the selection of a particular class of shares of a
particular Fund, or the exchange of shares of one Fund for shares of one or more
other Funds. SSRIS, the Agent, the Trustee and the Funds shall not render any
advice concerning the type (Regular or Roth) of Individual Retirement Account
that should be used, nor shall either of them offer any investment advise to the
Grantor (or beneficiary) and will have no duty of inquiry concerning the
Grantor's (or beneficiary's) investment directions (subject to the right of the
Trustee, SSRIS or the Agent to obtain clarification or completion of any
investment directions under section 3 or section 4 above). The Grantor (or
beneficiary) will have exclusive investment control over the Account.
11. (a) Whenever the Grantor (or beneficiary) is responsible for any
direction, notice, representation or instruction under these Terms and
Conditions, SSRIS, the Agent, the Trustee and the Funds shall be entitled to
assume the propriety and truth of any statement made by the Grantor (or
beneficiary), and shall be under no duty of further inquiry with respect
thereto, and shall have no liability with respect to any action taken in
reliance upon such statement. However, the Trustee (or Agent or SSRIS) shall be
entitled to receive such information or documentation (including signature
guarantees, waivers or indemnifications) as it may reasonably request before
carrying out any direction, notice or instruction from the Grantor (or
beneficiary).
(b) Grantor agrees to provide information to the Trustee at such times and
in such manner as may be necessary to enable the Trustee to administer the
Account hereunder, or to prepare any reports required by or under Section 408(i)
or Section 408A(d)(3)(E) of the Code and the regulations thereunder or
otherwise.
(c) The Trustee (or Agent or SSRIS) shall submit such reports to the
Internal Revenue Service and the Grantor in such manner and at such time and
containing such information as may be required by the Internal Revenue Service.
(d) The Grantor, Trustee (or Agent or SSRIS) shall furnish to each other
such information relevant to the Account as may be required under the Code and
any regulations issued or forms adopted by the Treasury Department thereunder or
as may otherwise be necessary for the administration of the Account.
(e) The Grantor shall file any reports to the Internal Revenue Service
which are required of him by law (including Form 5329), and neither the Trustee
nor the Agent or SSRIS shall have any duty to advise Grantor concerning, or
monitor Grantor's compliance with, such requirement.
(f) Except to the extent provided by applicable law, the Account will not
be subject to assignment, transfer, pledge or hypothecation, nor shall it be
liable for the debts of the Grantor (or beneficiary) or subject to seizure,
attachment, execution or other legal process. However, the Trustee (or Agent or
SSRIS) may carry out the requirements of any apparently valid order of a
governmental authority (including a court) relating to the Grantor's Account and
will have no liability for so doing.
4
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Terms & Conditions continued
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12. These Terms and Conditions shall terminate and have no further force
and effect (except as to Section 23, which shall survive the termination of the
Account and this document) upon the complete payment of the Account to the
Grantor or his beneficiaries or to a successor individual retirement account,
annuity or bond, to a qualified plan, or to an annuity or custodial account
under Section 403(b) of the Internal Revenue Code. The Trustee shall have the
right to terminate this Account upon 30 days notice to the Grantor, or to his
beneficiaries if he is then dead. In such event, upon expiration of such 30 day
period, the Trustee shall transfer the amount in the Account into such successor
individual retirement accounts, annuities or bonds, qualified plan, or annuity
or custodial account as the Grantor (or his beneficiaries) shall designate, or,
in the absence of such designation, to the Grantor, or if he is then dead, to
the beneficiaries or the Grantor's estate as their interests shall appear.
13. The Trustee may resign at any time upon 30 days notice in writing to
SSRIS and may be removed by SSRIS at any time upon 30 days notice in writing to
the Trustee. Upon such resignation or removal, SSRIS shall appoint a successor
trustee which satisfies the requirements of Section 408 or Section 408A, as the
case may be, of the Internal Revenue Code. In connection with the Trustee's
resignation or removal, SSRIS shall notify the Grantor (or Beneficiary) of the
identity of the successor custodian or trustee appointed, and the Grantor (or
Beneficiary) is specifically deemed to have consented to such appointment if the
Grantor (or Beneficiary) has not, by the end of 30 days following such
notification from SSRIS, transferred the Account to a different trustee or
custodian selected by the Grantor (or Beneficiary).
14. Upon receipt by the Trustee of written notice of appointment of a
successor trustee or custodian and of written acceptance of such appointment by
the successor, the Trustee shall transfer to such successor the assets of the
Account and copies of all records pertaining thereto. The Trustee may reserve
such sum of money as it deems advisable for payment of its fees, taxes, costs,
expenses or liabilities with respect to the account, with the balance (if any)
of such reserve remaining after the payment of such items to be paid over to the
successor. The successor shall hold the assets paid over to it under terms that
satisfy the requirements of Section 408 or section 408A, as the case may be, of
the Internal Revenue Code.
15. If, within 30 days after the Trustee's resignation or removal, SSRIS
has not appointed a successor trustee which has accepted such appointment, the
Trustee shall appoint such a successor unless it elects to terminate the
Agreement under Section 12 of this Article VIII.
16. The Trustee may employ or designate one or more parties to serve as
agents or contractors to perform any or all of its duties hereunder.
17. Any notice sent to the Grantor or to his beneficiaries or estate, if he
is then dead, shall be effective if sent by first class mail to him or them at
his or their last addresses of record as provided to the Trustee.
18. Any distributions from the Account may be mailed, first-class postage
prepaid to the last known address of the person who is to receive such
distribution, as shown on the Trustee's records, and such distribution shall, to
the extent of the amount thereof, completely discharge the Trustee's liability
for such payment.
19. Any purchase or redemption of shares of any class of a Fund for or from
the Grantor's Account will be effected at the public offering price or net asset
value of such Fund (as described in the then effective prospectus for such Fund)
next established after the Fund's transfer agent receives the contribution or
other directions.
Any purchase, exchange, transfer or redemption of shares of any class of a
Fund for or from the Grantor's Account will be subject to any sales charge,
distribution fee or redemption charge, or other fee or charge applicable to
shares of such class, as described in the then effective prospectus for such
Fund. In addition, shares of any class of a Fund will be subject to any service
fee, charge or other annual maintenance or servicing fees or charges applicable
to shares of such class as described in the then effective prospectus for such
Fund.
20. SSRIS may amend these Terms and Conditions from time to time, and shall
give written notice of any material amendment to the Grantor within a reasonable
time after the amendment is adopted or becomes effective, whichever is later.
The Grantor hereby expressly delegates authority to SSRIS to amend these Terms
and Conditions and consents to any such amendments.
21. These Terms and Conditions shall be construed, administered and
enforced according to the laws of Massachusetts. The Grantor agrees that any
legal proceedings relating to the Grantor's account must be brought in a court
(including a federal district court) located in Massachusetts.
22. The term "Trustee" refers to the person serving as the Trustee of the
Traditional IRA or Roth IRA established hereby, and the term "Grantor" refers to
the person for whose benefit such Account was established.
The term "Beneficiary" means the person or persons designated as such by
the "designating person" (as defined below) on a form for use in connection with
the Trust Account acceptable to the Trustee or another writing, signed by the
designating person, and filed with the Trustee. The form may name individuals,
trusts, estates, or other entities as either primary or contingent
beneficiaries. However, if the designation does not effectively dispose of the
entire Trust Account as of the time distribution is to commence, the term
"Beneficiary" shall then mean the designating person's estate with respect to
the assets of the Trust Account not disposed of by the designation form. The
form last accepted by the Trustee before such distribution is to commence,
provided it was received by the Trustee (or deposited in the U.S. Mail or with a
reputable delivery service) during the designating person's lifetime, shall be
controlling and, whether or not fully dispositive of the Trust Account,
thereupon shall revoke all such forms previously filed by that person. The term
"designating person" means Grantor during his/her lifetime; after Grantor's
death, it also means Grantor's spouse if the spouse begins to receive a portion
of the Trust Account (pursuant to such a designation by Grantor) under a form of
distribution permitted by Article IV. A designation by Grantor's spouse shall
relate solely to the balance remaining in the spouse's portion of the Trust
Account after the death of the spouse.
When and after distributions from the Trust Account to Grantor's
Beneficiary commence, all rights and obligations assigned to Grantor hereunder
shall inure to, and be enjoyed and exercised by, Beneficiary instead of Grantor.
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23. Grantor shall always fully indemnify Trustee (and/or Agent or SSRIS)
and the Fund(s) and save them harmless from any and all liability whatsoever
which may arise either (i) in connection with this Agreement and the matters
which it contemplates, except that which arises directly out of Trustee's
(and/or Agent's or SSRIS's) negligence or willful misconduct, or (ii) with
respect to making or failing to process any withdrawal, other than for failure
to process a withdrawal in accordance with an order therefor which is in full
compliance with the provisions of this Agreement. The Trustee (its Agent or
SSRIS) shall not be obligated or expected to commence or defend any legal action
or proceeding in connection with this Agreement or such matters unless agreed
upon by that party and Grantor, and unless fully indemnified for so doing to
that party's satisfaction.
24. References herein to the "Internal Revenue Code" or "Code" and sections
thereof shall mean the same as amended from time to time, including successors
to such sections.
25. If in the Application, Grantor designates that the Trust Account is a
Traditional IRA, this Agreement is intended to qualify under Code Section 408(a)
as an individual retirement account and to entitle Grantor to the retirement
savings deduction under Code Section 219 if available. If in the Adoption
Agreement, Grantor designates that the Trust Account is a Roth IRA, this
Agreement is intended to qualify under Code Section 408A as a Roth individual
retirement account and to entitle Grantor to the tax-free withdrawal of amounts
from the Trust Account to the extent permitted in such Code Section. If any
provision hereof is subject to more than one interpretation or any term used
herein is subject to more than one construction, such ambiguity shall be
resolved in favor of that interpretation or construction which is consistent
with the intent expressed in whichever of the two preceding sentences is
applicable.
However, the Trustee shall not be responsible for whether or not such
intentions are achieved through use of this Agreement, and Grantor/Grantee is
referred to Grantor's/Grantee's attorney for any such assurances.
26. Grantor should seek advice from his/her attorney regarding the legal
consequences (including but not limited to federal and state tax matters) of
entering into this Agreement, contributing to the Trust Account, and directing
Trustee to process withdrawals from the Account. Grantor acknowledges that
Trustee and Service Company (and any company affiliated therewith) are
prohibited by law from rendering such advice.
27. The legal documents governing the Trust Account are as follows:
(a) If in the Application, Grantor designated the Trust Account as a
Traditional IRA under Code Section 408(a), the provisions of the Terms and
Conditions for Traditional IRAs and the Terms and Conditions for All IRAs of
this Agreement and the provisions of the Application are the legal terms
governing the Grantor's Trust Account;
(b) If in the Application Grantor designated the Trust Account as a Roth
IRA under Code Section 408A, the provisions of the Terms and Conditions for Roth
IRAs and the Terms and Conditions for All IRAs of this Agreement and the
provisions of the Application are the legal terms governing the Grantor's Trust
Account.
28. Articles I through VII of the Terms and Conditions for Traditional IRAs
are in the form promulgated by the Internal Revenue Service as Form 5305.
Articles I through VII of the Terms and Conditions for Roth IRAs are in the form
promulgated by the Internal Revenue Service as Form 5305-R. It is anticipated
that, if and when the Internal Revenue Service promulgates changes to Form 5305
or 5305-R, as the case may be, SSRIS will adopt such changes as an amendment to
the Terms and Conditions for Traditional IRAs or the Terms and Conditions for
Roth IRAs, as applicable.
If, due to changes in the applicable tax laws, or rulings of the Internal
Revenue Service, it is established that the use of the Adoption Agreement or
this Agreement do not establish a Traditional IRA or Roth IRA (as the case may
be), the Trustee will furnish the Grantor with replacement documents and Grantor
will, if necessary, sign such replacement documents. Grantor acknowledges and
agrees to such procedures and to cooperate with the Trustee to preserve the
intended tax treatment of the Account.
Pending the adoption of any amendment necessary or desirable to conform
these Terms and Conditions to the requirements of any amendment to the Internal
Revenue Code or regulations or rulings thereunder, the Trustee (and SSRIS and
the Agent) may operate the Grantor's Account in accordance with such
requirements to the extent deemed necessary to preserve the tax benefits of the
Account.
If the Account is a Traditional IRA under Code Section 408(a), the Grantor
may convert the Account into a Roth IRA under Code Section 408A governed by the
Terms and Conditions for Roth IRAs and the Terms and Conditions for all IRAs, by
completing a new Application designating that the Account is converted into a
Roth IRA. To the extent permitted under procedures of the Trustee, such
conversion may be effected through use of a reply card or by telephonic,
computer link or other electronic means (which procedures are intended to meet
any applicable requirements under Code Section 408A), and Grantor will be deemed
to have executed a new Application designating the Account as a Roth IRA. The
Grantor will be required to establish a separate conversion Roth IRA Account
distinct from any annual contributions account, and no contributions other than
Roth IRA conversion contributions made during the same tax year will be accepted
in each such conversion account.
29. The Grantor acknowledges that he or she has received and read the
current prospectus for each Fund in which his or her Account is invested and the
State Street Research Combined Individual Retirement Account Disclosure
Statement.
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Traditional IRA or Roth IRA Disclosure Statement
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The following information should be reviewed in conjunction with the State
Street Research Combined IRA Terms and Conditions (the "Terms and Conditions"),
Combined IRA Application (the "Application") and the current prospectus for each
Fund in which your account is invested. This Disclosure Statement is divided
into three parts: the Disclosure Statement for Your Traditional IRA, the
Disclosure Statement for Your Roth IRA, and the Disclosure Statement for All
IRAs. Here's a brief summary of each type of IRA and of the information found in
each of these sections:
Disclosure Statement for Your Traditional IRA.
Traditional IRAs have been around since 1975--everyone's familiar with
them. With a Traditional IRA, you typically make tax deductible contributions to
the IRA, or you contribute with a rollover from another IRA or an employer's
qualified retirement plan. The earnings and interest in your account build tax
free. Any amounts not taxed when contributed are taxed, along with any earnings,
when they are withdrawn from the Traditional IRA. The Disclosure Statement for
Your Traditional IRA section provides you with the basic rules and features of
your State Street Research Traditional IRA. (Note: For our purposes in this
booklet all IRAs, except for Roth IRAs (see below) are considered to be
Traditional IRAs.)
Disclosure Statement for Your Roth IRA.
Roth IRAs were recently created by Congress and are available after January
1, 1998. These IRAs are almost the opposite to Traditional IRAs: With a Roth
IRA, your contributions are not tax deductible, but withdrawals meeting certain
requirements are tax-free. Just like a Traditional IRA, earnings and interest
build tax-free. The Disclosure Statement for Your Roth IRA provides you with the
basic rules and features of your Roth IRA.
Disclosure Statement for All IRAs.
The final section, entitled Disclosure Statement for All IRAs, provides you
with tax and other general information applicable to any State Street Research
IRA, whether it is a Traditional IRA or a Roth IRA. So, regardless of which IRA
you choose to use--and you can choose to use both, if you want--you should be
sure to read the information found in the Disclosure Statement for All IRAs.
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Note: The provisions of the Terms and Conditions, the Application and
prospectus govern in any instance where the Disclosure Statement is incomplete
or appears to conflict. This Disclosure Statement reflects the provisions of the
Internal Revenue Code in effect when the Disclosure Statement was prepared. This
Disclosure Statement provides a nontechnical summary of the law. Please consult
with your tax advisor for more complete information (including any changes to
the tax law rules) and refer to IRS Publication 590.
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Disclosure Statement for Traditional IRAs
GENERAL REQUIREMENTS OF A TRADITIONAL IRA
A Traditional IRA is a trust or custodial account established for the
exclusive benefit of you and your beneficiaries in which earnings accumulate tax
free. In addition, you may be able to deduct all or some of the amount you
contribute to your Traditional IRA on your federal income tax return. (Note:
State tax treatment of contributions to a Traditional IRA may vary. Consult a
qualified advisor.) In addition to the requirements found in the Disclosure
Statement for All IRAs, current law requires that your Traditional IRA agreement
be in writing and meet the following requirements:
1. Your contributions must be in cash, and, for any taxable year, cannot
exceed the lesser of 100% of your compensation or $2,000, unless the
contribution is a rollover or an employer contribution to a simplified employee
pension plan ("SEP") or a contribution made to a SIMPLE IRA subject to the
limitations under Section 408(p) of the Internal Revenue Code. (See Regular
Contributions below for more limitations applicable to contribution amounts.)
2. You are required to take minimum distributions from your Traditional IRA
at certain times in accordance with Proposed Regulations Section 1.408-8, as
follows:
A. During Your Life
You are required to begin making withdrawals from your Traditional IRA for
the year in which you reach age 70-1/2 and each year thereafter. Generally, you
must withdraw an amount at least equal to the minimum distribution by December
31 of each year. However, you may delay your first required withdrawal until the
April 1 following the year in which you reach age 70-1/2 (the "required
beginning date"). (This means that, if you wait to make your withdrawal for the
year in which you attain age 70-1/2 until April 1 of the following year, your
total withdrawal in that following year must equal the minimum withdrawal for
two years--one representing the minimum withdrawal for the previous year in
which you reached age 70-1/2 and a second withdrawal by December 31 representing
the minimum withdrawal for that year.)
The minimum withdrawal for any taxable year is equal to the amount obtained
by dividing the account balance at the end of the prior year (less any required
withdrawals taken between January 1 and April 1 of the year following the year
you attain age 70-1/2) by the joint life expectancy of you and your designated
beneficiary. If you have not designated a beneficiary for your Traditional IRA
by your required beginning date, your single life expectancy will be used. Your
single or joint life expectancy is determined by using the IRS unisex life
expectancy tables. You can find these tables in Treasury Regulations Section
1.72-9. See Article IV in your Terms and Conditions for Traditional IRAs for a
more detailed explanation of how to calculate the minimum distribution.
If you name someone other than your spouse as your beneficiary, and your
beneficiary is more than ten years younger than you, your required minimum
withdrawal must satisfy the minimum distribution incidental benefit rule (MDIB).
The MDIB rule generally requires that your required minimum withdrawals be
calculated under the normal rules, but as if your beneficiary were exactly ten
years younger than you.
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The minimum withdrawal required must be calculated separately for each
Traditional IRA you own, but the amounts so determined may be totaled and taken
from any one of your Traditional IRAs.
B. After Your Death
If you die on or after your required beginning date, withdrawals must be
made by your beneficiary or beneficiaries at least as rapidly as under the
method being used to determine minimum withdrawals as of the date of your death.
If your beneficiary is your surviving spouse, your spouse can elect to treat
your Traditional IRA as his or her own Traditional IRA.
If you die before your required beginning date, the entire amount remaining
in your account must, in general, be withdrawn by December 31 of the year
containing the fifth anniversary of your death. If your designated beneficiary
is a natural person, he or she may instead choose to receive the remaining
balance in your account over his or her lifetime or over a period not exceeding
his or her life expectancy. Such payments must begin no later than the end of
the year following the year of your death. If your designated beneficiary is
your spouse, withdrawals need not commence until December 31 of the year you
would have attained age 70-1/2, if later than the December 31st of the year
following the year of your death. See Article IV in the Terms and Conditions for
Traditional IRAs, for a more detailed explanation of how to calculate the
minimum withdrawals.
ELIGIBILITY
You may make annual contributions to a Traditional IRA if you receive
compensation from employment, earnings from self-employment, or alimony, and you
have not reached age 70-1/2 by the end of the tax year for which the
contribution is being made. In addition, if you are married and file a joint tax
return, you may make contributions to a Traditional IRA for your spouse, whether
or not your spouse receives compensation (your spouse must open his or her own
Traditional IRA, even though you make contributions to it from your compensation
or earned income). You may make a rollover contribution to a Traditional IRA if
you have received an eligible rollover distribution from a qualified retirement
plan or a tax sheltered annuity or an eligible distribution from another
Traditional IRA and elect rollover treatment within 60 days. You may also make a
trustee-to-trustee transfer from another Traditional IRA. Finally, your employer
may contribute to your Traditional IRA, and if your employer sponsors a
simplified employee pension (SEP), your employer can make contributions to your
SEP/IRA on your behalf.
ANNUAL CONTRIBUTIONS
You may contribute each year up to $2,000 or 100% of compensation or earned
income, whichever is less, to your Traditional IRA. Such contributions are
called "Annual Contributions." If your spouse also establishes a spousal
Traditional IRA for himself or herself, you may contribute up to $4,000 or 100%
of joint compensation or earned income, whichever is less, which may be divided
between the two Traditional IRAs as you choose, as long as no more than $2,000
is contributed to either Traditional IRA. If the combined annual income for you
and your spouse is less than $4,000, the spouse with the greater annual income
may contribute up to his/her compensation amount, or $2,000 whichever, is less.
The lower compensated spouse may contribute up to his/her compensation amount,
plus the difference between the first spouse's compensation and contribution, if
any. If your employer makes contributions to your Traditional IRA, the
contribution is treated as compensation paid to you, whether or not the
contribution is deductible, unless the contribution is made under a SEP.
You may make annual contributions to your Traditional IRA and/or your
spouse's Traditional IRA (or establish a new Traditional IRA) anytime during a
year, up to and including the due date of the filing of your tax return for that
year (excluding extensions). No contributions may be made to a Traditional IRA
for the calendar year in which you attain age 70-1/2 or later years. No regular
contributions may be made to your spouse's Traditional IRA for the calendar year
your spouse attains age 70-1/2 or later years.
If you (or your spouse) establish a new Roth IRA and make contributions to
both your Traditional IRA and a Roth IRA, the combined limit on contributions to
both Regular and Roth IRAs for a single calendar year for any individual (either
you or your spouse) may not exceed $2,000.
Annual IRA contributions are fully deductible unless you are an active
participant in an employer-sponsored retirement plan. If you are an active
participant in an employer-sponsored retirement plan, the amount deductible
(whether fully, partially or not at all) will depend on your adjusted gross
income ("AGI") for the tax year for which the contribution was made (see below).
Similarly, annual contributions to a Traditional IRA for your spouse are fully
deductible unless he or she is an active participant in an employer-sponsored
retirement plan. If your spouse is an active participant, the contribution to
the spouse's Traditional IRA will be either fully, partially, or not deductible,
depending on your combined AGI. Your AGI is determined on your tax return
(disregarding any deductible contributions to a Traditional IRA). Generally, an
individual is considered to be an active participant if he or she is covered by
one or more of the following plans:
o a qualified pension, profit sharing, 401(k) (including a SIMPLE 401(k))
or stock bonus plan maintained by an employer;
o a qualified annuity plan of an employer;
o a simplified employee pension plan (SEP);
o a retirement plan established by the Federal government, a State, or a
political subdivision (except certain plans under IRC Section 457);
o a tax-sheltered annuity for employees of certain tax-exempt organizations
or public schools;
o a qualified plan for self-employed individuals (sometimes called an H.R.
10 or Keogh Plan); and.
o a SIMPLE IRA under section 408(p).
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Note: If you and your spouse are high income married taxpayers, and either of
you is an active participant in an employer's retirement plan and the other
spouse is not, any contribution to the non-active participant spouse's
Traditional IRA will be only partially deductible if your AGI (on a joint tax
return) is between $150,000 and $160,000. (Deductibility disappears for AGI over
$160,000.)
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As you can see in the table below, if you (or your spouse) are an active
participant in an employer-sponsored plan during the year, the annual
contribution to your Traditional IRA (or your spouse's Traditional IRA) may be
fully, partially or not deductible depending on both your filing status and your
AGI:
8
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Traditional IRA or Roth IRA Disclosure Statement continued
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<TABLE>
<CAPTION>
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ACTIVE PARTICIPANTS Deductibility Chart for 1998
- -------------------------------------------------------------------------------------------
Single Married, Filing Jointly Deductibility of Annual
IRA Contribution
---------------------------------------------------------------------------
<S> <C> <C> <C>
$30,000 or less $50,000 or less Fully Deductible
Adjusted ---------------------------------------------------------------------------
Gross Income $30,000 - $40,000 $50,000 - $60,000 Partially Deductible
(AGI) Level ---------------------------------------------------------------------------
more than $40,000 more than $60,000 Not Deductible
- -------------------------------------------------------------------------------------------
</TABLE>
Starting in 1999, the AGI levels will be adjusted annually so that
deductibility will be determined as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Fully Deductible Partially Not Deductible
(any AGI amount Deductible (AGI amounts over)
up to) (AGI amounts
between)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Single $31,000 $31,000 - $41,000 $41,000
1999 Married* $51,000 $51,000 - $61,000 $61,000
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Single $32,000 $32,000 - $42,000 $42,000
2000 Married $52,000 $52,000 - $62,000 $62,000
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Single $33,000 $33,000 - $43,000 $43,000
2001 Married $53,000 $53,000 - $63,000 $63,000
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Single $34,000 $34,000 - $44,000 $44,000
2002 Married $54,000 $54,000 - $64,000 $64,000
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Single $40,000 $40,000 - $50,000 $50,000
2003 Married $60,000 $60,000 - $70,000 $70,000
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Single $45,000 $45,000 - $55,000 $55,000
2004 Married $65,000 $65,000 - $75,000 $75,000
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Single $50,000 $50,000 - $60,000 $60,000
2005 Married $70,000 $70,000 - $80,000 $80,000
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Single $50,000 $50,000 - $60,000 $60,000
2006 Married $75,000 $75,000 - $85,000 $85,000
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2007 Single $50,000 $50,000 - $60,000 $60,000
and later Married $80,000 $80,000 - $100,000 $100,000
- --------------------------------------------------------------------------------------------------------------
</TABLE>
* Note: AGI shown is for Married Filing Jointly. If you are married filing
separately, your contribution deductibility is phased out for AGI from
$0-$10,000, and disappears with AGI above $10,000.
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If your AGI falls in the Partially Deductible range, you will have to
calculate the portion of your annual contribution that is deductible. To do so,
you must first multiply your annual contribution limit ($2,000) by a fraction,
the numerator of which is the amount by which your AGI exceeds the lower limit
of the Partially Deductible range. (For example, in 1998 the lower limit would
be $30,000 for a single tax payer, or $50,000 for a married taxpayer filing
jointly. For the year 2000, the lower limit for a single taxpayer will be
$32,000, and the lower limit for married filing jointly is $52,000.) The
denominator of the fraction is $10,000. (Note: starting in 2007 the denominator
for married joint filers is $20,000.) Subtract this amount from your annual
contribution limit ($2,000) and then round up to the nearest $10. Your
deductible amount is the greater of the amount calculated or $200. The amount of
your annual contribution, up to the deductible limit, will be deductible on your
tax return; any contribution above the deductible limit (up to the annual
contribution limit) is permitted but would not be deductible.
To the extent that the deductibility of Traditional IRA contributions is
reduced or eliminated, then nondeductible contributions may be made to your
Traditional IRA. Earnings on all Traditional IRA contributions, whether or not
the contributions are deductible, are tax-deferred until they are received. You
must designate the amount of your nondeductible Traditional IRA contributions
when filing your tax return for the year. If you overstate the amount of your
nondeductible contribution, you must pay a $100 penalty, unless reasonable cause
for the overstatement can be shown. If you fail to report nondeductible IRA
contributions you will be subject to a $50 penalty, unless your failure is due
to reasonable cause.
ROLLOVER CONTRIBUTIONS
Your Traditional IRA may be rolled over to another Traditional IRA of
yours, or may receive rollover contributions, provided all the applicable
rollover rules are followed. An effective rollover allows you to postpone paying
taxes on the amount distributed from an employer plan, tax-sheltered annuity or
other Traditional IRA until it is withdrawn from the recipient IRA. (Note: You
may also convert a Traditional IRA to a Roth IRA, or roll over from a
Traditional IRA to a Roth IRA. Amounts converted or rolled over to a Roth IRA
may be taxed as income. See the Disclosure Statement for Roth IRAs.) If the
rollover is completed properly, you do not report the distribution as income nor
do you take a deduction for the rollover contribution. The rollover rules are
generally summarized below. If you have any questions regarding these rules,
please contact your tax advisor.
1. Rollovers from other Traditional IRA
You may make a rollover contribution of amounts held in another Traditional
IRA. There are no limits on the amount of the rollover contribution made from
one Traditional IRA to another Traditional IRA. A proper Traditional IRA to
Traditional IRA rollover is completed if all or part of the distribution is
rolled over within 60 days after the distribution is received. No more than one
withdrawal from a Traditional IRA may be rolled over into another IRA in any
12-month period.
2. Rollover from a Qualified Plan (or Tax-Sheltered Annuity) to a Traditional
IRA
You may roll over, directly or indirectly, any eligible rollover
distribution. An eligible rollover distribution is defined as any distribution
from a qualified plan (other than a distribution to a nonspouse beneficiary)
unless it is a part of certain series of substantially equal periodic payments
to be received over your life or over a period of ten or more years, after-tax
dollars or a required minimum distribution. To qualify as a rollover, your
eligible rollover distribution must be rolled over to your Rollover IRA within
60 days of receipt.
Traditional Rollover
You may elect to receive your rollover distribution prior to placing it in
a Traditional IRA, thereby completing a traditional rollover. Your plan
administrator will generally be required to withhold 20% of your distribution as
prepayment of income taxes. When completing the traditional rollover, you may
make up the amount withheld, out of pocket, and roll over the full amount
treated as distributed from the qualified plan (including the tax withholding
amount). Alternatively, you may report the withheld amount as income and pay the
applicable tax and, if you have not yet attained age 59-1/2, the 10% early
distribution penalty will apply (unless an exception to that penalty is
applicable).
Direct Rollover
Your employer generally must give you the option to directly rollover your
qualified plan distribution over to a Traditional IRA. If you elect the direct
rollover, your eligible rollover distribution will be paid directly to the
Traditional IRA that you designate. The 20% withholding requirements do not
apply to direct rollovers.
If you place your rollover contribution in a separate Traditional IRA
(sometimes called a "conduit IRA") which holds only those dollars, you preserve
the right to roll that money subsequently into another employer qualified plan.
3. Rollover/Conversion to a Roth IRA
Starting in 1998, you may convert an existing Traditional IRA into a Roth
IRA, or rollover from a Traditional IRA to a Roth IRA, if your AGI on your
income tax returns is $100,000 or less. (This limit applies to both married and
single taxpayers, and the limit is not indexed for cost of living increases.) A
married taxpayer is eligible to convert or rollover a Traditional IRA to a Roth
IRA only if a joint tax return is filed; married taxpayers who file separately
are not eligible to convert or rollover from a Traditional IRA to a Roth IRA.
(For more information on converting or rolling over into a Roth IRA, see the
Disclosure Statement for Roth IRAs below.)
SEP PLANS
Under a Simplified Employee Pension (SEP) Plan that meets the requirements
of Internal Revenue Code Section 408(k), your employer may make contributions to
your Traditional IRA. Your employer is required to provide you with information
describing the terms of their SEP Plan. An employer is not permitted to
establish a Salary Reduction SEP ("SARSEP") after December 31, 1996. However,
you may make contributions after December 31, 1996 to a SARSEP already in
existence on January 1, 1997 in accordance with your plan provisions whether or
not you are a new employee.
SAVINGS INCENTIVE MATCH PLANS FOR EMPLOYEES
("SIMPLE IRA")
If you are participating in a SIMPLE IRA plan, you may make contributions
under a qualified salary reduction arrangement on
10
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Traditional IRA or Roth IRA Disclosure Statement continued
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a pre-tax basis of up to $6,000 (indexed for inflation) subject to the
limitation under section 408(p) of the Code. Your employer must generally match
your contributions dollar-for-dollar up to 3% of your compensation. Under
certain circumstances, your employer can elect to make a non-matching
contribution equal to 2% of compensation for all eligible employees, or to make
a dollar-for-dollar matching contribution of at least 1% of your compensation.
To be eligible to establish a SIMPLE plan, your employer must have no more
than 100 employees and the SIMPLE plan must be the exclusive tax-qualified plan
of the employer (except that an eligible employer with union employees may have
one plan covering the union employees under the collective bargaining agreement
and still have a SIMPLE plan covering the non-union eligible employees).
State Street Research offers a separate package of materials (including a
special SIMPLE IRA Application) to establish a SIMPLE IRA. The materials in this
kit are not suitable for setting up an IRA that is part of a SIMPLE IRA plan.
Please call us for additional information about SIMPLE IRAs if you are
interested.
TAXATION OF WITHDRAWALS
The taxation of Traditional IRA withdrawals will depend on whether or not
you have made nondeductible contributions to your Traditional IRA. If you have
made only deductible contributions to your Traditional IRA, any withdrawal will
be included as taxable income in the year in which it is received.
If you have made nondeductible contributions, the following formula must be
used to determine the amount of any withdrawal from your Traditional IRA
excluded from income:
Nondeductible Contributions in IRA divided by Aggregate IRA Balance
multiplied by Amount Withdrawn equals Amount Excluded From Income.
Nondeductible Contributions include all nondeductible contributions made by
you to the Traditional IRA through the end of the year the distribution is being
made (which were not previously withdrawn and excluded from your income). IRA
balances includes the total balance of all of your Traditional IRAs as of the
end of the year the withdrawal is being made.
FEDERAL TAX PENALTIES
1. Early Withdrawal Penalty
If you make a withdrawal from your Traditional IRA prior to attaining age
59-1/2, an additional tax of 10% will be imposed on the taxable amount
withdrawn, unless the withdrawal was made on account of your death, disability,
a qualifying rollover, or a direct transfer to another Traditional IRA, the
timely withdrawal of an excess contribution, certain withdrawals to the extent
of deductible medical expenses, to pay for medical insurance premiums while you
are receiving unemployment compensation, to pay for certain higher education
expenses for you, your child or grandchild, or to pay for eligible first-time
homebuyer expenses (limited to a $10,000 lifetime maximum per individual). The
additional 10% tax may also not apply if the withdrawal is one of a series of
substantially equal periodic payments, at least annually, based on your life
expectancy or the joint life expectancy of you and your beneficiary. This
additional tax will only apply to the portion of the withdrawal included in your
income. The exceptions to the 10% premature withdrawal penalty tax have a number
of special rules and definitions; consult your tax advisor or the IRS for
further details.
In the case of a SIMPLE IRA, the additional tax on certain distributions
made prior to age 59-1/2 will be 25% of a withdrawal made during the first two
years of your participation.
2. Excess Contribution Penalty
A 6% excise tax will be imposed on any excess contributions made to your
Traditional IRA. This tax will apply each year in which the contribution remains
in your IRA. An excess contribution is any amount which exceeds your individual
contribution limit, excluding rollover and direct transfer amounts.
3. Penalty for Not Making Minimum Withdrawals
If you do not receive your required minimum withdrawal for the year you
attain age 70-1/2 and by the end of each subsequent year, you will be subject to
a 50% excise tax on the amount of the required minimum withdrawal which should
have been taken but was not. If the withdrawal you actually receive falls short
of the required minimum withdrawal, the 50% excise tax will be imposed on the
amount by which the withdrawal falls short.
- --------------------------------------------------------------------------------
Note: Please see the Disclosure Statement for All IRAs below for additional
information applicable to your State Street Research Traditional IRA.
- --------------------------------------------------------------------------------
GENERAL INFORMATION REGARDING ROTH IRAs
A Roth IRA is a trust or custodial account established for the exclusive
benefit of you and your beneficiaries in which your earnings accumulate tax free
and, if certain conditions are satisfied, from which withdrawals may be made tax
free. Unlike a Traditional IRA, however, you are not able to deduct the amount
you contribute to your Roth IRA on your federal income tax return. (Note: State
tax treatment of your Roth IRA accruals and withdrawals may differ from federal
treatment. You should consult your tax advisor for information regarding tax
laws applicable in your state.)
In addition to the requirements found in the Disclosure Statement for All
IRAs, current law requires that your Roth IRA agreement be in writing and be
designated as a Roth IRA. Under IRS rules, separate Roth IRA accounts must be
established for conversions, and only amounts converted in the same tax year
will be accepted in any one Roth IRA conversion account. All annual contribution
Roth IRA accounts must be maintained separately from any conversion accounts. In
addition, your contributions must be in cash, and, for any taxable year, cannot
exceed the lesser of 100% of your compensation or $2,000, unless the
contribution is a rollover or conversion from a Traditional IRA or another Roth
IRA. (See Annual Contributions below for more information about contributions to
your Roth IRA.)
Unlike a Traditional IRA, you are not required to begin to take minimum
withdrawals from your Roth IRA when you reach age 70-1/2, nor are you prohibited
from making contributions to your Roth IRA when you turn 70-1/2.
During your lifetime, you may make withdrawals at whatever times and in
whatever amounts you want. If you die before your entire account has been
withdrawn by you, the entire remaining account must be withdrawn, in accordance
with your (or if you have not done so, your beneficiary's) instructions either
by the December 31 of the year containing the fifth
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anniversary of your death, or in substantially equal payments over the life or
life expectancy of your designated beneficiary, starting no later than the end
of the year following the year of your death. If your designated beneficiary is
your spouse, distributions need not commence until December 31 of the year you
would have attained 70-1/2, if later than the December 31st of the year
following the year of your death.
See Article IV of the Terms and Conditions for Roth IRAs for a more
detailed explanation concerning distributions.
ELIGIBILITY
You are eligible to make annual contributions to a Roth IRA if you receive
compensation from employment, earnings from self-employment, or alimony. In
addition, if you are married and file a joint tax return, you may make
contributions to a Roth IRA for your spouse, whether or not your spouse receives
compensation.
Roth IRAs permit contributions by individuals who are age 70-1/2 or older.
Distributions from an employer-sponsored plan or any 403(b) arrangement may
not be rolled over into a Roth IRA. However, you may convert (or make rollover
contribution from) an existing Traditional IRA if you (and your spouse, if any)
have an adjusted gross income ("AGI") of $100,000 or less. (The conversion
option is open only to single taxpayers or married taxpayers who file a joint
tax return; married taxpayers who file separately are not eligible to convert.)
ANNUAL CONTRIBUTION LIMITS
Subject to the limitations on contributions discussed below, you may
contribute each year up to $2,000 or 100% of compensation or earned income,
whichever is less, to your Roth IRA. If you also contribute to a spousal Roth
IRA established by your spouse, you may contribute up to $4,000 or 100% of joint
compensation or earned income, whichever is less, which may be divided between
the two Roth IRAs as you choose, as long as no more than $2,000 is contributed
to either Roth IRA. If the combined annual compensation for you and your spouse
for a year is less than $4,000, the spouse with the greater annual income may
contribute up to his/her compensation amount, or $2,000 which ever is less. The
other spouse may contribute up to his/her compensation limit, plus the
difference between the other spouse's compensation and contribution, if any.
You may make annual contributions to your Roth IRA (or establish a new Roth
IRA) and/or spousal Roth IRA anytime during a year, up to and including the due
date of the filing of your tax return for that year (excluding extensions).
However, because Roth IRAs are not available until January 1, 1998, you may not
make a contribution to a Roth IRA on or before April 15, 1998 and treat it as a
contribution for 1997.
Contribution Limits
The amount you or your spouse may contribute to a Roth IRA depends on your
tax filing status and your (and your spouse's) AGI. AGI is determined on your
Form 1040. However, for purposes of determining Roth IRA contribution limits, do
not include in your AGI any amount converted or rolled over from a Traditional
IRA to a Roth IRA. Contribution limits to Roth IRAs are as follows based on AGI
level:
- --------------------------------------------------------------------------------
*Note: Figures are for Married filing jointly only. If you are married
filing separately, your ability to contribute to a Roth IRA phases out for AGI
between $0 and $15,000, and is lost entirely with AGI above $15,000.
- --------------------------------------------------------------------------------
If your AGI falls in the Partial Contribution range, you will have to
calculate the amount you may contribute to a Roth IRA. To do so, multiply the
annual contribution limit ($2,000 or your compensation if less) by a fraction.
The numerator is the amount by which your AGI exceeds the lower limit of the
Partial Contribution range ($95,000 if single, or $150,000 if married filing
jointly) and the denominator is $15,000 (single taxpayers) or $10,000 (married
filing jointly). Subtract this from your normal limit and then round up to the
nearest $10. The contribution limit is the greater of the amount calculated or
$200.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
ROTH IRA CONTRIBUTION LIMITS
- -------------------------------------------------------------------------------------
Full Contribution Partial Contribution No Contribution
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Single Up to $95,000 $95,000 - $110,000 Over $110,000
- -------------------------------------------------------------------------------------
Married filing Up to $150,000 $150,000 - $160,000 Over $160,000
jointly*
- -------------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
Traditional IRA or Roth IRA Disclosure Statement continued
- --------------------------------------------------------------------------------
CONVERSIONS OR ROLLOVER CONTRIBUTIONS
Starting in 1998, you may convert or rollover an existing Traditional IRA
into a Roth IRA if your AGI is $100,000 or less. This upper limit on AGI applies
to both single taxpayers and married taxpayers filing jointly. Married filing
separately may not convert or rollover a Traditional IRA to a Roth IRA. The
taxable amount of money you convert or rollover from a Traditional IRA to a Roth
IRA will be considered as taxable income in the year in which the rollover or
conversion occurs. If you convert or rollover during 1998, the taxable income is
spread out over the four year period beginning in 1998 and ending in 2001.
You may make a rollover contribution of amounts held in another Roth IRA.
There are no limits on the amount of the rollover contribution made from Roth
IRA to another Roth IRA. A rollover from one Roth IRA to another is properly
completed if all or part of the distribution is rolled over within 60 days after
the withdrawal from the first Roth IRA is received. No more than one withdrawal
from a Roth IRA may be rolled over into another Roth IRA in any 12-month period.
- --------------------------------------------------------------------------------
*Note: Caution should be exercised when considering whether to convert an
existing Regular IRA into a Roth IRA early in the year if it appears that AGI
may exceed $100,000. Although a bill pending in congress would permit transfers
back to a Regular IRA if a taxpayer's AGI exceeds $100,000, under the current
law, if a conversion has already occurred during the year and the taxpayer ends
up with AGI in excess of $100,000, there may be adverse tax results. Consult
your tax advisor or the IRS for the latest developments.
- --------------------------------------------------------------------------------
WITHDRAWALS FROM YOUR ROTH IRA
You may withdraw from your Roth IRA accounts at any time you wish. The
principal amount you contributed may be withdrawn tax-free. All withdrawals are
treated as a return of your own contributions until the amount withdrawn equals
the amount you previously contributed. After that, withdrawals are treated as
earnings or growth. Amounts representing earnings and growth will not be taxable
if they meet both of the following requirements: First, the withdrawal must be
made from a Roth IRA account that has been in existence for five or more years.
Second, you must either be 59-1/2, or the withdrawal must be made by your
beneficiary if you die, or by you if you are disabled (within the meaning of
section 72(m)(7) of the Code), or by you if you are using the funds for
qualified first-time homebuyer expenses (within the meaning of section
72(t)(2)(F) of the Code)(there is a $10,000 lifetime maximum on amounts
considered first-time homebuyer expenses for any individual).
For annual contributions, the five year period begins with the year when
you first establish your Roth IRA. For conversions or rollovers, the five year
period begins with the year in which the conversion or rollover was made from
the Traditional IRA to the Roth IRA. (Note: a bill pending in Congress might
effect this rule--consult your tax advisor or the IRS for the latest
developments.)
FEDERAL TAX PENALTIES
A. Early Withdrawal Penalty
Of course, you may withdraw the principal (non-deductible) amount you
previously contributed to your Roth IRA tax and penalty free at any time.
However, a withdrawal of amounts representing earnings or growth may not only be
taxable as income (if the requirements for a tax-free withdrawal are not met),
but also be subject to a 10% withdrawal penalty if you withdraw before attaining
age 59-1/2, unless an exception applies. There are exceptions for withdrawals on
account of your death or disability, to the extent of deductible medical
expenses for the year, to pay for medical insurance premiums while you are
receiving unemployment compensation, to pay for certain higher education
expenses for you, your child or grandchild, or to pay for eligible first-time
homebuyer expenses (limited to a $10,000 lifetime maximum). The additional 10%
tax may also not apply if the distribution is made in a series of substantially
equal periodic payments, at least annually, based on your life expectancy or the
joint life expectancy of you and your designated beneficiary. Again, this
penalty tax will only apply to the portion of the distribution included in your
income.
For purposes of determining the your taxable income or 10% penalty, all of
your Roth IRA accounts are considered to be one single account, and any
distribution is considered to come first from principal--to which no tax or
penalty applies--and then from the taxable amounts. For example, if you have
three different Roth IRA's, each of which has account balances equal to $10,000,
your total account balance for all Roth IRAs is $30,000. In the first Roth IRA,
$7,000 is attributable to principal and $3,000 to earnings. In the second,
$6,000 is principal and $4,000 is earnings. In the last, $7,500 is attributable
to principal and $2,500 to earnings. If $8,000 is withdrawn from the first IRA
and the withdrawal is not generally excepted from tax and penalty, as discussed
above, there would be no tax or penalty imposed because the amount withdrawn
($8,000) is less than the total amount of principal ($20,500) contributed to all
three Roth IRAs.]
For purposes of determining your taxable income or 10% penalty, each of your
Roth IRA conversions must be made to a separate Roth IRA account. No converted
amounts may be deposited in a Roth IRA annual contributions account.
B. Excess Contribution Penalty
Excess contributions can be corrected without paying a 6% penalty by
withdrawing the excess on any earnings before the due date (including
extensions) for filing your federal income tax return for the year for which you
made the excess contribution. The earnings must be included in your income for
the tax year for which the contribution was made and may be subject to a 10%
premature withdrawal tax if you have reached age 59-1/2 (unless an exception to
the 10% penalty tax applies).
Excess contributions that are not withdrawn by the tax return due date
(including any extensions) for the year for which the contribution was made will
be subject to 6% excise tax. An additional 6% excise tax is assessed for each
subsequent year in which the excess remains in your account.
13
<PAGE>
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State Street Research
- --------------------------------------------------------------------------------
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In subsequent years, the excess contribution can be reduced by making a
withdrawal equal to the excess. Earnings need not be withdrawn. To the extent
that no earnings are withdrawn, the withdrawal will not be subject to income tax
or penalties. Excess contributions can also be corrected in a subsequent year to
the extent that you contribute less than your Roth IRA contribution limit for
the subsequent year. As the prior excess contribution is reduced or eliminated,
the 6% excise tax will become correspondingly reduced or eliminated for
subsequent tax years.
Note: This discussion of the Roth IRA tax rules in this Disclosure Statement is
based on the best available information. However, the IRS has not issued
regulations or rulings concerning the operation and tax treatment of Roth IRAs.
Also, if enacted, a bill pending in congress will change some of the rules
outlined above. Consult your tax advisor for the latest developments or for
advice about how maintaining a Roth IRA will affect your personal tax or
financial situation.
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Note: Please see the Disclosure Statement for All IRAs below for additional
information applicable to your State Street Research Roth IRA.
- --------------------------------------------------------------------------------
DISCLOSURE STATEMENT FOR ALL IRAs
GENERAL REQUIREMENTS FOR ALL IRAS
In addition to the information contained in the Disclosure Statement for
Traditional IRAs and the Disclosure Statement for Roth IRAs, the following are
some of the general requirements applicable to all IRAs:
1. The custodian or trustee must be a bank, savings and loan association
credit union or other institution or person approved by the Internal Revenue
Service to administer your Traditional IRA or Roth IRA in accordance with
current tax laws.
2. None of your Traditional IRA or Roth IRA assets may be commingled with
the assets of other people except in a common trust fund or common investment
fund.
3. No portion of your Traditional IRA or Roth IRA may be invested in life
insurance contracts or in collectibles (within the meaning of Internal Revenue
Code Section 408(m)). A collectible is defined as a work of art, rug or antique,
metal or gem, stamp or coin, alcoholic beverage, or any other tangible personal
property specified by the Internal Revenue Service. Specially minted U.S. gold
and silver bullion and certain state-issued coins are permissible IRA
investments.
RIGHT TO REVOKE
You have the right to revoke your Traditional IRA or Roth IRA within seven
(7) days of your signing the Application. You may revoke your Traditional IRA or
Roth IRA by mail or by delivery of written notice to:
State Street Research
P.O. Box 8408
Boston, MA 02266
Your notice will be considered mailed on the date of postmark, or the date
of certification or registration if it is sent by certified or registered mail.
If you revoke your Traditional IRA or Roth IRA, you are entitled to a full
return of the contribution without any adjustment for sales charges,
administrative expenses or market fluctuations. If you have any questions
concerning your right of revocation, please call 800-562-0032 (or 800-638-8378)
during regular business hours.
FEDERAL TAX WITHHOLDING
Traditional IRA
Federal income tax will be withheld on amounts withdrawn by you from your
Traditional IRA unless you elect not to have withholding. Generally, tax will be
withheld at a 10% rate.
Roth IRA
Federal income tax will be withheld on the amount of any taxable withdrawal
from a Roth IRA unless you elect not to have withholding. Generally, the tax
will be withheld at a 10% rate.
SPECIAL TAX TREATMENT
Capital gains treatment and the favorable five- or ten-year forward
averaging tax authorized by IRC Section 402 do not apply to Traditional IRA or
Roth IRA distributions.
Excess Distribution Penalty
Prior to 1997, a 15% excise tax was assessed against annual distributions
from tax-favored retirement plans, including IRAs, which exceeded specific
amounts (initially $150,000 per year). There was also a 15% estate tax penalty
for excess amounts in IRAs and other tax-favored arrangements after your death.
These 15% penalty taxes have now been repealed.
Prohibited Transactions
If you or your beneficiary engage in a prohibited transaction, as described
in IRC Section 4975, your Traditional IRA or Roth IRA will lose its tax-exempt
status and the taxable portion of your account must be included in your gross
income for that taxable year (unless the requirements for a tax-free withdrawal
from your Roth IRA are met). If you pledge any portion of either your
Traditional IRA or Roth IRA as collateral for a loan, the amount so pledged will
be treated as a distribution to you and the taxable portion will be included in
your gross income for that year. If you are under age 59-1/2 at the time these
transactions occur, you may be subject to the 10% penalty tax on premature
distributions.
Reporting for Tax Purposes
You must report deductible contributions to your Traditional IRA and
withdrawals on tax Form 1040 or 1040A for the taxable year in which the
contributions or distributions were made. Nondeductible contributions to
Traditional IRAs must be reported with your tax returns using Form 8606.
Additional reporting is required in the event that special taxes or penalties
described herein are due. You must file Form 5329 with the IRS for each taxable
year in which the contribution limits are exceeded, a premature distribution
takes place, or less than the required minimum distribution amount is
distributed from your Traditional IRA. It is possible that the IRS will issue
new tax reporting requirements for Roth IRAs.
14
<PAGE>
Traditional IRA or Roth IRA Disclosure Statement continued
- --------------------------------------------------------------------------------
IRS APPROVAL AND INFORMATION
The Terms and Conditions for Traditional IRAs and the Terms and Condition
for Roth IRAs used to establish your Traditional IRA or Roth IRA, as the case
may be, have been approved by the Internal Revenue Service. The Internal Revenue
Service approval is a determination only to their form. It is not an endorsement
of the plan in operation or of the investments offered. Based on current tax
laws and IRS rulings, we believe that the use of a the materials in this kit
(particularly the Terms and Conditions for Regular IRAs or the Terms and
Conditions for Roth IRAs) and the Combined IRA Application, containing
information for both Regular and Roth IRAs will be acceptable to the IRS.
However, if the IRS makes a ruling, or Congress enacts legislation, requiring
the use of different documentation, we will forward to you new documentation for
your Regular IRA or a Roth IRA Package to read and, if necessary, to sign. By
adopting a State Street Research Regular IRA or a Roth IRA using the materials
contained herein, you acknowledge this possibility and agree to this procedure
if necessary. In all cases, to the extent permitted, State Street Research will
treat your IRA as being opened on the date your account was opened using current
documents.
This Disclosure Statement provides only a summary of the laws governing
Traditional IRAs and Roth IRAs. You should consult your personal tax advisor or
IRS Publication 590, Individual Retirement Arrangements, for more detailed
information. This publication is available from your local IRS office or by
calling 1-800-TAX-FORMS.
15
<PAGE>
[State Street logo] STATE STREET RESEARCH
One Financial Center
Boston, MA 02111-2690
Control Number: 4487-971219(1298)SSR-LD IR-863E-1297
Exhibit (15)
STATE STREET GROWTH TRUST
PLAN OF DISTRIBUTION
PURSUANT TO RULE 12-b-1
WHEREAS, STATE STREET GROWTH TRUST, an unincorporated association of the
type commonly known as a business trust organized under the laws of the
Commonwealth of Massachusetts (the "Trust"), engages in business as an open-end
management investment company and is registered as such under the Investment
Company Act of 1940, as amended (the "Act");
WHEREAS, the Trust is authorized (i) to issue shares of beneficial
interest (the "Shares") in separate series, with the Shares of each such series
representing the interests in a separate portfolio of securities and other
assets, and (ii) to divide the Shares within each such series into two or more
classes;
WHEREAS, the Trust has established a portfolio series, the State Street
Research Growth Fund (the "Initial Series" - such series, together with all
other series subsequently established by the Trust, being referred to herein
individually as a "Series" and collectively as the "Series");
WHEREAS, the Trust may be deemed a distributor of the Shares within the
meaning of Rule 12b-1 under the Act, and desires to adopt a Plan of Distribution
and has adopted a related Distribution Agreement with State Street Research
Investment Services, Inc., the Trust's principal underwriter (the "Distributor")
pursuant to such Rule (respectively, the "Plan" and the "Agreement");
WHEREAS, the Board of Trustees as a whole, and the Trustees who are not
interested persons of the Trust (as defined in the Act) and who have no direct
or indirect financial interest in the operation of this Plan or the Agreement
and any agreements relating to it (the "Qualified Trustees"), having determined,
in the exercise of their reasonable business judgement and in light of their
fiduciary duties under state law and under Section 36(a) and (b) of the Act, and
there is a reasonable likelihood that this Plan and the Agreement will benefit
the Initial Series and its shareholders, have accordingly approved this Plan and
the Agreement by votes cast in person at a meeting called for the purpose of
voting on this Plan and the Agreement and any agreements related thereto; and
<PAGE>
WHEREAS, this Plan will be approved by a majority of the outstanding
voting securities (as defined in the Act) of each class of the Initial Series.
NOW, THEREFORE, the Trust hereby adopts this Plan in accordance with
Rule 12b-1 under the Act, on the following terms and conditions:
SECTION 1. DISTRIBUTION ACTIVITIES
Subject to the supervision of the Board of Trustees, the Trust may
engage, directly or indirectly, in financing any activities primarily intended
to result in the sale of Shares, including, but not limited to, the following:
(1) payment of commissions and/or reimbursement to underwriters, securities
dealers and others engaged in the sale of Shares, including payments to the
Distributor to be used to pay commissions and/or reimbursement to securities
dealers and others (including affiliates of the Distributor) engaged in the
distribution and marketing of Shares or furnishing assistance to investors on an
ongoing basis, (2) reimbursement of direct out-of-pocket expenditures incurred
by the Distributor in connection with the distribution and marketing of Shares,
including expenses relating to the formulation and implementation of marketing
strategies and promotional activities such as direct mail promotions and
television, radio, newspaper, magazine and other mass media advertising, the
preparation, printing and distribution of sales literature, the preparation,
printing and distribution of Prospectuses of the Trust and reports for
recipients other than existing shareholders of the Trust, and obtaining such
information, analyses and reports with respect to marketing and promotional
activities and investor accounts as the Trust may, from time to time, deem
advisable, and (3) reimbursement of expenses incurred by the Distributor in
connection with the servicing of shareholder accounts, including payments to
securities dealers and others in consideration of the provision of personal
service to investors and/or the maintenance of shareholder accounts and expenses
associated with the provision of personal service by the Distributor directly to
investors. In addition, the Plan shall be deemed to authorize the Distributor
and State Street Research & Management Company (the "Adviser") to make payments
out of general profits, revenues and other sources to underwriters, securities
dealers and others in connection with sales as described in the Prospectus of
the Trust as from time to time amended and in effect (for purposes hereof,
references to the Prospectus of the Trust shall be deemed to include all
2
<PAGE>
Prospectuses of the Trust), to the extent, if any, that such payments may be
deemed to be within the scope of Rule 12b-1 under the Act.
The Trust and the Series are authorized to engage in the activities
listed above, and in other activities primarily intended to result in the sale
of Shares, either directly or through other persons with which the Trust has
entered into agreements pursuant to the Plan.
SECTION 2. MAXIMUM EXPENDITURES
The expenditures to be made by the Initial Series pursuant to this Plan
and the basis upon which payment of such expenditures will be made shall be
determined by the Initial Series, but in no event may such expenditures exceed
the following: (i) with respect to Class A Shares of the Initial Fund, an annual
rate of .25% of the average daily value of net assets represented by such Class
A shares, (ii) with respect to Class B Shares and Class D Shares of the Initial
Fund, an annual rate of .75% of the average daily value of the net assets
represented by such Class B or Class D shares (as the case may be) to finance
sales or promotion expenses and an annual rate of .25% of the average daily
value of the net assets represented by such Class B or Class D shares (as the
case may be) to make payments for personal service and/or the maintenance of
shareholder accounts, and (iii) with respect to any Series subsequently
established by the Trust, the annual rate as agreed upon and specified in an
addendum hereto; plus such amounts as the Distributor and Adviser may expend
from general revenues, profits and other sources from time to time in accordance
with the last sentence of Section 1 and the second paragraph of Section 3. The
expenditures to be made pursuant to this Plan shall commence with respect to
each class of Shares of a Series as of the date on which this Plan becomes
effective with respect to each such class.
SECTION 3. PAYMENTS
Pursuant to this Plan, the Trust shall make periodic payments to the
Distributor at the annual rate provided for in Section 2 with respect to each
Series, or class of Shares thereof. The Distributor shall in turn remit to and
allocate among selected dealers (including those that are affiliates of the
Distributor) who have entered into selected dealer agreements with the
Distributor, in consideration of and as reimbursement for expenses incurred in
the provision of distribution and marketing services and furnishing assistance
to investors on an ongoing basis, such amounts as are required pursuant to such
selected dealer agreements and as indicated in
3
<PAGE>
the Prospectus of the Trust. Any amounts received by the Distributor and not so
allocated may be applied by the Distributor as reimbursement for expenses
incurred in connection with the distribution and marketing of Shares of each
class and the servicing of investor accounts as contemplated by Section 1(2)
hereof. The distribution and servicing expenses of a particular class will be
borne solely by that class and no Series will use fees charged to one class
within a Series to support the marketing or servicing relating to any other
class of Shares within that Series or any other Series. Any amounts received by
the Distributor hereunder and not applied as provided herein shall be returned
to the applicable class or Series of the Trust.
The Distributor and the Adviser may also make payments to authorized
securities dealers as specified in the Prospectus of the Trust as from time to
time amended and in effect, from its general profits, revenues and other
sources. Amounts received by the Distributor from any Fund in respect of any
class of Shares shall not be used to pay any commission expenses related to the
sale of any other class of Shares of such Series.
Notwithstanding anything to the contrary herein, the aggregate of all
payments to the Distributor to finance sales or promotion expenses with respect
to the Class B or the Class D shares pursuant to this Section 3 together with
any contingent deferred sales charges received by the Distributor in connection
with the redemption of shares of the respective class shall not exceed the
amount expended by the Distributor to finance sales or promotion expenses of
such class.
SECTION 4. TERM AND TERMINATION
(a) Initial Series. This Plan shall become effective with respect to
each class of the Initial Series as of the later of (i) the date on which a
Registration Statement with respect to such class of Shares becomes effective
under the Securities Act of 1933, as amended, or (ii) the date on which such
class of the Initial Series commences offering its Shares to the public and
shall continue in effect with respect to each Initial Series (subject to Section
4(c) hereof) until one year from the date of such effectiveness, unless the
continuation of this Plan shall have been approved with respect to the Initial
Series in accordance with the provisions of Section 4(c) hereof.
(b) Additional Series. This Plan shall become effective with
respect to each additional Series other than the Initial Series established by
the Trust upon commencement of the initial public offering thereof (provided
that the Plan has previously been approved for continuation by votes of a
majority of both (i) the Board of Trustees of the Trust and
4
<PAGE>
(ii) the Qualified Trustees, cast in person at a meeting held before the initial
public offering of such additional Series and called for the purpose of voting
on such approval), and shall continue in effect with respect to each such
additional Series (subject to Section 4(c) hereof) for one year thereafter,
unless the continuation of this Plan shall have been approved with respect to
such additional Series in accordance with the provisions of Section 4(c) hereof.
The Distributor and the Trust on behalf of each such additional Series shall
each sign an addendum hereto agreeing to be bound hereby and setting forth such
specific and different terms as the parties may agree upon, including, without
implied limitation, the amount and purpose of payments to be made hereunder.
(c) Continuation. This Plan and the Agreement shall continue in
effect with respect to each Series subsequent to the initial term specified in
Section 4(a) and (b) for so long as such continuance is specifically approved at
least annually by votes of a majority of both (i) the Board of Trustees of the
Trust and (ii) the Qualified Trustees, cast in person at a meeting called for
the purpose of voting on this Plan, subject to any shareholder approval
requirements existing under applicable law.
(d) Termination. (i) This Plan may be terminated at any time with
respect to the Trust or any Series, as the case may be, by vote of a majority of
the Qualified Trustees, or by vote of a majority of the outstanding voting
securities of the Trust or that Series, as the case may be. The Plan may remain
in effect with respect to a Series even if it has been terminated in accordance
with this Section 4(e) with respect to one or more other Series of the Trust.
(ii) The Agreement may be terminated at any time, without
penalty, with respect to the Trust or any Series, as the case may be, by
vote of a majority of the Qualified Trustees or by vote of a majority of
the outstanding voting securities of the Trust or that Series, as the
case may be, on sixty days' written notice to the Distributor. In
addition, the Agreement provides for automatic termination in the event
of its assignment.
SECTION 5. AMENDMENTS
This Plan may not be amended to increase materially the amount of
distribution expenditures provided for in Section 2 hereof unless such amendment
is approved by a vote of a majority of the outstanding voting securities of each
Series or class thereof with respect to which a material increase in the amount
of distribution expenditures is proposed, and no
5
<PAGE>
material amendment to the Plan shall be made unless approved in the manner
provided for annual renewal in Section 4(c) hereof. Otherwise, this Plan may be
amended with respect to the Trust or a Series or class thereof by vote of a
majority of the Qualified Trustees or the outstanding voting securities of the
Trust or that Series, as the case may be.
SECTION 6. INDEPENDENT TRUSTEES
While this Plan is in effect with respect to any Series, the selection
and nomination of Trustees who are not interested persons (as defined in the
Act) of the Trust shall be committed to the discretion of the Trustees who are
not interested persons.
SECTION 7. QUARTERLY REPORTS
The Treasurer of the Trust and the Treasurer of the Distributor shall
provide to the Trustees of the Trust and the Trustees shall review, at least
quarterly, a written report of the amounts expended for distribution pursuant to
this Plan and the purposes for which such expenditures were made.
SECTION 8. RECORDKEEPING
The Trust shall preserve copies of this Plan, the Agreement and any
related agreements and all reports made pursuant to Section 7 hereof, for a
period of not less than six years from the date of this Plan and the Agreement,
the agreements or such reports, as the case may be, the first two years in an
easily accessible place.
SECTION 9. LIMITATION OF LIABILITY
The term "State Street Growth Trust" means and refers to the Trustees
from time to time serving under the Master Trust Agreement of the Trust dated
February 5, 1993 as the same may subsequently thereto have been, or subsequently
hereto be, amended. It is expressly agreed that the obligations of the Trust
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents or employees of the Trust, personally, but bind only the trust
property of the Trust, as provided in the Master Trust Agreement of the Trust.
The execution and delivery of this Plan and the Plan have been authorized by the
Trustees and shareholder of the Trust and signed by an authorized officer of the
Trust, acting as such, and neither such authorization by such Trustees and
shareholder
6
<PAGE>
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
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 Master Trust
Agreement. The Master Trust Agreement of the Trust further provides, and it is
expressly agreed, that each Series of the Trust shall be solely and exclusively
responsible for the payment of its debts, liabilities and obligations and that
no other Series shall be responsible or liable for the same.
IN WITNESS WHEREOF, the Trust and the Distributor have executed this
Plan of Distribution on the day and year set forth below in Boston,
Massachusetts.
ATTEST: STATE STREET GROWTH TRUST
/s/ Constantine Hutchins, Jr. /s/ Gerard P. Maus
---------------------------- ----------------------------
STATE STREET RESEARCH
ATTEST: INVESTMENT SERVICES, INC.
/s/ Constantine Hutchins, Jr. /s/ Donald E. Webber
---------------------------- ----------------------------
Date: February 17, 1993
Exhibit (16)
State Street Research Growth Fund - Class C
Standard Total Return Computations - One Year
Original Amt. Invested $1,000.00
Commission at 0.0% $0.00
Net Amount to Fund $1,000.OO
Purchase price $9.26
Shares acquired 107.982
<TABLE>
<CAPTION>
Beginning Dividend Monthly Reinvest Shares New Month-end Monthly Aggregate
Month Shares Rate Income Price Purchased Shares NAV ERV Performance Performance
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1/31/93 107.982 0.0000 0.00 $9.36 0.000 107.982 $9.36 $1,010.90 1.09 1.09
2/28/93 107.982 0.0000 0.00 $9.34 0.000 107.982 $9.34 $1,008.55 -0.23 0.86
3/31/93 107.982 0.0000 0.00 $9.57 0.000 107.982 $9.57 $1,033.39 2.46 3.34
4/30/93 107.982 0.0000 0.00 $9.16 0.000 107.982 $9.16 $989.12 -4.28 -1.09
5/31/93 107.982 0.0000 0.00 $9.53 0.000 107.982 $9.53 $1,029.07 4.04 2.91
6/30/93 107.982 0.0500 5.40 $9.39 0.575 108.557 $9.39 $1,019.35 -0.94 1.94
7/31/93 108.557 0.0000 0.00 $9.33 0.000 108.557 $9.33 $1,012.84 -0.64 1.28
8/31/93 108.557 0.0000 0.00 $9.83 0.000 108.557 $9.83 $1,067.12 5.36 6.71
9/30/93 108.557 0.0000 0.00 $10.05 0.000 108.557 $l0.05 $l,091.00 2.24 9.10
10/31/93 108.557 0.0000 0.00 $10.02 0.000 108.557 $10.02 $1,087.74 -0.30 8.77
11/30/93 108.557 0.0000 0.00 $9.82 0.000 108.557 $9.82 $1,066.03 -2.00 6.60
12/31/93 108.557 1.5250 165.55 $8.51 19.454 128.011 $8.51 $1,089.37 2.19 8.94
</TABLE>
(1) Calculate average annual return of the Fund for the period January 1, 1993
through December 31, 1993:
365/365
1,000 (1 + T) = 1089.37
T = 8.94%
<PAGE>
State Street Research Growth Fund - Class C
Nonstandardized Total Return Computation
Original Amt. Invested S1,000.00
Commission at 0.0% $0.00
Net Amount to Fund $1,000.00
Purchase price $9.39
Shares acquired 106.496
<TABLE>
<CAPTION>
Beginning Dividend Monthly Reinvest Shares New Month-end Monthly ITD
Month Shares Rate Income Price Purchased Shares NAV ERV Performance Performance
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/93 106.496 0.0000 0.00 $9.33 0.000 106.496 $9.33 $993.61 -0.64 -0.64
8/31/93 106.496 0.0000 0.00 $9.83 0.000 106.496 $9.83 $1,046.86 5.36 4.69
9/30/93 106.496 0.0000 0.00 $10.05 0.000 106.496 $10.05 $1,070.29 2.24 7.03
10/31/93 106.496 0.0000 0.00 $10.02 0.000 106.496 $10.02 $1,067.09 -0.30 6.71
11/30/93 106.496 0.0000 0.00 $9.82 0.000 106.496 9.820 $1,045.79 -2.00 4.58
12/31/93 106.496 1.5250 162.41 $8.51 19.084 125.581 8.510 $1,068.69 2.19 6.87
No annualization is made. Computation for the six months ended December 31, 1993.
</TABLE>
Exhibit (18)(a)
POWER OF ATTORNEY
We, the undersigned State Street Research Growth Trust ("Trust") a
Massachusetts business trust, its trustees, its principal executive officer and
its principal financial and accounting officer, hereby severally constitute and
appoint Francis J. McNamara, III and Darman A. Wing, as our true and lawful
attorneys, with full power to each of them alone to sign for us, in our names
and in the capacities indicated below, any Registration Statements and any and
all amendments thereto of the Trust filed with the Securities and Exchange
Commission and generally to do all such things in our names and in the indicated
capacities as are required to enable the Trust to comply with provisions of the
Securities Act of 1933, as amended, and/or the Investment Company Act of 1940,
as amended, and all requirements and regulations of the Securities and Exchange
Commission, hereby ratifying and confirming our signatures as they have been and
may be signed by our said attorneys to said Registration Statements, and any and
all amendments thereto.
IN WITNESS WHEREOF, we have hereunto set our hands, on this 27th day of
February, 1998.
SIGNATURES
STATE STREET RESEARCH GROWTH TRUST
By: /s/ Ralph F. Verni
---------------------------------
Ralph F. Verni, Chief Executive
Officer and President
/s/ Ralph F. Verni /s/ Dean O. Morton
- --------------------------------- ---------------------------------
Ralph F. Verni, Trustee and Dean O. Morton, Trustee
principal executive officer
/s/ Gerard P. Maus /s/ Thomas L. Phillips
- --------------------------------- ---------------------------------
Gerard P. Maus, Principal financial Thomas L. Phillips, Trustee
and accounting officer
/s/ Steve A. Garban /s/ Toby Rosenblatt
- --------------------------------- ---------------------------------
Steve A. Garban, Trustee Toby Rosenblatt, Trustee
/s/ Malcolm T. Hopkins /s/ Michael S. Scott Morton
- --------------------------------- ---------------------------------
Malcolm T. Hopkins, Trustee Michael S. Scott Morton, Trustee
/s/ Edward M. Lamont /s/ Jeptha H. Wade
- --------------------------------- ---------------------------------
Edward M. Lamont, Trustee Jeptha H. Wade, Trustee
/s/ Robert A. Lawrence
- ---------------------------------
Robert A. Lawrence, Trustee
Exhibit (18)(b)
STATE STREET RESEARCH GROWTH TRUST
Certificate of Resolution
I, the undersigned Amy L. Simmons, hereby certify that I am Assistant
Secretary of State Street Research Growth Trust (the "Trust"), a Massachusetts
business trust duly authorized and validly existing under Massachusetts law, and
that the following is a true, correct and complete statement of a vote duly
adopted by the Trustees of said Trust on May 5, 1995:
"VOTED: That Francis J. McNamara III and Darman
A. Wing be, and each hereby is, authorized
and empowered, for and on behalf of the
Trust, its principal financial and accounting
officer, and in their name, to execute, and file
a Power of Attorney relating to, the Trust's
Registration Statements under the
Investment Company Act of 1940 and/or the
Securities Act of 1933, and amendments
thereto, the execution and delivery of such
Power of Attorney, Registration Statements
and amendments thereto, to constitute
conclusive proof of such authorization."
I further certify that said vote has not been amended or revoked and
the same is now in full force and effect.
IN WITNESS WHEREOF, I have hereunto set my hand this 27th day of
February, 1998.
/s/ Amy L. Simmons
-----------------------------
Assistant Secretary
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