SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.__)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
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State Street Research Capital Trust
State Street Research Equity Trust
State Street Research Financial Trust
State Street Research Growth Trust
State Street Research Income Trust
State Street Research Master Investment Trust
State Street Research Securities Trust
State Street Research Tax-Exempt Trust
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11. (Set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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[logo: State Street Research]
Dear Shareholder:
Enclosed are a proxy statement and an announcement of a special meeting of State
Street Research fund shareholders concerning a change in the Rule 12b-1 fees.
This proposal is very important. The funds' Trustees, who are appointed to
safeguard shareholder interests, have reviewed this proposal and recommend that
you approve it after you carefully study the enclosed material.
12b-1 fees cover service and distribution costs for your fund(s). The fees cover
the costs to maintain shareholder accounts, as well as selling and marketing
expenditures for the sale of fund shares. You do not pay 12b-1 fees as a direct
charge; rather the funds pay 12b-1 fees out of their assets as an indirect
charge to you.
Many of State Street Research's peer mutual fund companies have the flexibility
to ask their Trustees to increase 12b-1 fees up to a specified amount, when
necessary. The enclosed proposal would provide the Trustees of the State Street
Research funds with similar flexibility for the funds' Class A shares. Please
note, however, that if this proposal is approved, the actual amount of any
increase in the 12b-1 fee would only be decided after further review by the
Trustees.
I encourage you to carefully review the enclosed information that explains the
proposal in detail. As a shareholder, your vote is important, and we hope that
you will respond. By voting today, you can help the funds avoid the cost of
follow-up communications. And to make it easier for you to respond, we have
enhanced our services to now provide you with the option of voting your proxy
through the Internet, as well as by mail, touch tone phone or by speaking with a
customer service representative. In the meantime, if you have any questions
about this proposal, please call 1-800-562-0032.
As always, we very much appreciate your support as a shareholder of State Street
Research.
Sincerely,
/s/ Ralph F. Verni
Ralph F. Verni
Chairman of the Board,
President and Chief Executive Officer
<PAGE>
Questions & Answers
Q: What is a 12b-1 fee?
A: Mutual funds pay 12b-1 fees to cover service and distribution costs,
including the costs to sell and market mutual funds and to maintain
shareholder accounts.
Q: The proxy requests that the Trustees have the flexibility to increase
12b-1 fees in the future. What are the fees now and what is proposed?
A: The State Street Research funds may currently pay up to 0.25 of 1% (25
basis points) of the average daily net asset value represented by Class A
shares for 12b-1 expenses. This proposal would allow the funds the
flexibility to increase the 12b-1 fee by an additional amount of up to
0.15 of 1% (15 basis points). It is anticipated that any increase
authorized by the funds' Board of Trustees would initially be
substantially less than 15 basis points, but the proposal gives the
Trustees the flexibility to authorize this amount, if necessary, in the
future.
Q: Why might the Trustees consider increasing these fees?
A: When financial professionals sell mutual funds, they receive a one-time
commission, as well as annual fees on assets that remain in the fund on an
ongoing basis. 12b-1 fees cover these fees paid to broker-dealer firms. In
an increasingly competitive environment for the sale of fund shares, the
Trustees might decide to permit an increase in the 12b-1 fees, so that the
funds can meet the increasing costs of distribution.
Q: Why are the Trustees recommending a "yes" vote to add flexibility to
increase fees?
A: Your Trustees reviewed this proposal with your interests in mind. They
believe that the proposed fee increase will serve you well in the long
term. They recognize that all mutual funds are facing increased
competition for the sale of shares of mutual funds and that ongoing sales
of shares are important to a fund's success. Additional assets ultimately
benefit shareholders, as investment
<PAGE>
managers have greater access to investment opportunities and the ability
to trade securities more efficiently. Also, sales help to offset
redemptions that occur naturally over time.
Q: I am not an investor in Class A shares. I am in Class B or Class B(1). Why
am I being asked to vote on this proposal?
A: The proposed change in 12b-1 fees only applies to Class A shares. There is
no change being proposed in the level of 12b-1 fees to be paid by Class B
or Class B(1) shareholders. However, as a Class B or Class B(1)
shareholder, you are entitled to vote on the proposal because your shares
will convert to Class A shares after you hold them for 8 years.
Q: What am I supposed to do with this material?
A: You should read the material and then vote. There are four easy ways to
vote your proxy. The enclosed insert explains each of these methods.
Q: What if I have questions?
A: If you have questions about the proposal itself, call 1-800-562-0032.
If you have questions about voting, call 1-877-392-4944.
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held On February 25, 2000
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A Special Meeting of Class A, Class B and Class B(1) shareholders of
each of the Funds listed below (the "Meeting") will be held at the offices of
the Trusts listed below, One Financial Center, 31st Floor, Boston, Massachusetts
02111, at 4 P.M. on Friday, February 25, 2000 for the following purposes:
1. For Class A, Class B and Class B(1) shareholders, voting separately, of
each Fund: To amend the current plan of distribution adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940, as amended, to
increase the amount that may be expended for the distribution of Class
A shares.
Your Board of Trustees recommends that you vote FOR this proposal.
2. To consider and act upon any matter incidental to the foregoing and to
transact such other business as may properly come before the Meeting
and any adjournments thereof.
<TABLE>
<CAPTION>
The Trusts The Funds
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<S> <C>
State Street Research Capital Trust State Street Research Aurora Fund
State Street Research Emerging Growth Fund
State Street Research Equity Trust State Street Research Alpha Fund
State Street Research Argo Fund
State Street Research Global Resources Fund
State Street Research Athletes Fund
State Street Research Financial Trust State Street Research Government Income Fund
State Street Research Strategic Income Plus Fund
State Street Research IntelliQuant Portfolios:
Small-Cap Value
State Street Research International Equity Fund
State Street Research Growth Trust State Street Research Growth Fund
State Street Research Income Trust State Street Research High Income Fund
State Street Research Master State Street Research Investment Trust
Investment Trust
</TABLE>
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<TABLE>
<CAPTION>
The Trusts The Funds
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<S> <C>
State Street Research Securities Trust State Street Research Galileo Fund
State Street Research Legacy Fund
State Street Research Strategic Income Fund
State Street Research Tax-Exempt Trust State Street Research New York Tax-Free Fund
State Street Research Tax-Exempt Fund
</TABLE>
The matters referred to above may be acted upon at said Meeting and any
adjournments thereof.
The close of business on November 18, 1999 has been fixed as the record
date for the determination of shareholders entitled to notice of, and to vote
at, the Meeting and any adjournments thereof.
IT IS VERY IMPORTANT THAT YOUR VOTING INSTRUCTIONS BE RECEIVED NO LATER
THAN FEBRUARY 23, 2000. Instructions for shares held of record in the name of a
nominee, such as a broker-dealer or trustee of an employee benefit plan, may be
subject to earlier cut-off dates for receipt of such instructions established by
such intermediaries to facilitate a timely response.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE SIZE OF YOUR HOLDINGS IN A
FUND. WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE
AND SIGN THE ENCLOSED PROXY FORM AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE. CERTAIN SHAREHOLDERS MAY ALSO VOTE BY TELEPHONE OR OVER THE INTERNET;
PLEASE SEE PAGES 4 AND 5 FOR DETAILS. IF YOU DESIRE TO VOTE IN PERSON AT THE
MEETING, YOU MAY REVOKE YOUR PROXY.
By Order of the Trustees
FRANCIS J. McNAMARA, III
Secretary
November 23, 1999
Date of Notice
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PROXY STATEMENT
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This Proxy Statement is furnished to the Class A, Class B and Class
B(1) shareholders of each fund listed below (each, a "Fund" and collectively the
"Funds") in connection with the solicitation of proxies by and on behalf of the
Board of Trustees of each registered investment company set forth below (each, a
"Trust" and collectively, the "Trusts") to be used at a Special Meeting of Class
A, Class B and Class B(1) shareholders of each Fund (the "Meeting") to be held
concurrently at the Trusts' offices, One Financial Center, 31st Floor, Boston,
Massachusetts 02111, at 4 P.M. on February 25, 2000, and at any adjournments
thereof.
<TABLE>
<CAPTION>
The Trusts The Funds
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<S> <C>
State Street Research Capital Trust State Street Research Aurora Fund
("Capital Trust") ("Aurora Fund")
State Street Research Emerging Growth Fund
("Emerging Growth Fund")
State Street Research Equity Trust State Street Research Argo Fund
("Equity Trust") ("Argo Fund")
State Street Research Alpha Fund
("Alpha Fund")
State Street Research Global Resources Fund
("Global Resources Fund")
State Street Research Athletes Fund
("Athletes Fund")
State Street Research Financial Trust State Street Research Government Income Fund
("Financial Trust") ("Government Income Fund")
State Street Research Strategic Income Plus Fund
("Strategic Income Plus Fund")
State Street Research IntelliQuant Portfolios:
Small-Cap Value ("IntelliQuant Portfolios:
Small-Cap Value")
State Street Research International Equity Fund
("International Equity Fund")
</TABLE>
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<TABLE>
<CAPTION>
The Trusts The Funds
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<S> <C>
State Street Research Growth Trust State Street Research Growth Fund
("Growth Trust") ("Growth Fund")
State Street Research Income Trust State Street Research High Income Fund
("Income Trust") ("High Income Fund")
State Street Research Master Investment State Street Research Investment Trust
Trust ("Master Investment Trust") ("Investment Trust")
State Street Research Securities Trust State Street Research Galileo Fund
("Securities Trust") ("Galileo Fund")
State Street Research Legacy Fund
("Legacy Fund")
State Street Research Strategic Income Fund
("Strategic Income Fund")
State Street Research Tax-Exempt Trust State Street Research New York Tax-Free Fund
("Tax-Exempt Trust") ("New York Tax-Free Fund")
State Street Research Tax-Exempt Fund
("Tax-Exempt Fund")
</TABLE>
Class A, Class B and Class B(1) Shareholders of record of each Fund at
the close of business on November 18, 1999 (the "Record Date") are entitled to
notice of, and to vote at, the Meeting or any adjournments thereof. This Proxy
Statement, Proxy form and accompanying Notice of Special Meeting of Shareholders
were first sent or given to shareholders on or about December 1, 1999.
Although each Fund is having a separate meeting, proxies
are being solicited through use of this combined Proxy Statement.
Information on the total number of shares of each class of the Funds
issued and outstanding as of the Record Date is set forth in Appendix A. Each
share is entitled to one vote with a proportionate vote for each fractional
share.
MANNER OF VOTING PROXIES
If the enclosed Proxy is properly executed and returned in time to be
voted at the Meeting (either by returning the paper proxy card or by submitting
a proxy electronically by telephone or over the Internet), the shares
represented thereby will be voted at the Meeting in accordance with the
shareholder's instructions. The Proxy grants discretion to the persons named
therein, as proxies, to take such further action as they may determine
appropriate in connection with any other matter which may properly come before
the Meeting or any adjournments thereof. The Board of Trustees for each Trust
does not currently know of any matter to be considered at the Meeting other than
the matters set forth in the Notice of Special Meeting of Shareholders.
2
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For purposes of considering Proposal 1, the amendment must be approved
by a vote of a majority of the outstanding voting securities of Class A, Class B
and Class B(1) of each Fund, voting as separate classes. Under the Investment
Company Act of 1940, as amended (the "1940 Act"), a vote of a majority of the
outstanding voting securities of each of Class A, Class B and Class B(1) of a
Fund means the vote of the lesser of: (a) 67% or more of each of Class A, Class
B and Class B(1) shares of the Fund present at the meeting, if the holders of
more than 50% of each of the Fund's Class A, Class B and Class B(1) shares are
present or represented by proxy, or (b) more than 50% of the outstanding shares
of each of Class A, Class B and Class B(1) of the Fund.
The persons named as proxies may propose one or more adjournments of
such Meeting for a given Fund without further notice to permit further
solicitation of Proxies, provided such persons determine that an adjournment and
additional solicitation are reasonable and in the interest of shareholders,
after consideration of all relevant factors, including the nature of the
relevant proposal, the percentage of votes then cast, the percentage of negative
votes then cast and the nature of the proposed solicitation activities. Any such
adjournment with respect to Proposal 1 will require the affirmative vote of a
majority of the aggregate number of shares of the relevant class of the Fund
present at the Meeting in person or by proxy.
For purposes of determining the presence of a quorum for transacting
business at the Meeting and for determining whether sufficient votes have been
received for approval of any proposal to be acted upon at the Meeting,
abstentions will be treated as present at the Meeting and entitled to vote on
the matter, but which have not been voted. For this reason, abstentions could
assist a Fund in obtaining a quorum but would have the same effect as a vote
against Proposal 1. Broker "non-votes" ordinarily will not be considered present
and entitled to vote on Proposal 1. The Fund reserves discretion to count broker
"non-votes" as present based on specific instructions from a broker or nominee.
Broker "non-votes" are proxies from brokers or nominees indicating that such
persons have not received instructions from the beneficial owner or other
persons entitled to vote shares on a particular matter with respect to which the
brokers or nominees do not have, or choose not to exercise, discretionary power.
A shareholder may vote:
o By telephone:
-Through fully automated touch-tone voting or
-Verbally, with a telephone representative;
o Over the Internet;
o By mail; or
o In person at the Meeting.
3
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By Telephone
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There are two convenient methods to vote by using the
telephone. (Please note, however, that these two telephone methods of
voting are not available to shareholders whose shares are held by a
broker or other intermediary on the shareholder's behalf.) If telephone
voting is available for a shareholder's account, toll-free telephone
numbers will be printed on the Proxy form. Prior to calling, the
shareholder should read the Proxy Statement and have his or her Proxy
form at hand.
First, a shareholder may use the automated touch-tone voting
method by calling the toll-free number for that method provided on the
Proxy form. At the prompt, the shareholder enters the control number
provided on the Proxy form, then follows the menu.
Second, a separate toll-free number is provided on the Proxy
form for shareholders who wish to speak to a telephone representative
directly and give verbal instructions. The telephone representative
will assist the shareholder with the voting process. The representative
will not be able to assist any shareholder with information that is not
contained in the Proxy Statement, and the representative will not make
recommendations on how to vote on any proposal. Telephone calls will be
recorded.
A written confirmation of the shareholder's telephone
instructions will be mailed within 72 hours. The shareholder should
immediately call 1-877-392-4944 toll-free between 9 A.M. and 6 P.M.
Monday through Friday Boston time if no confirmation is received or if
the shareholder's instructions have not been properly reflected.
Internet Voting
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To vote over the Internet, please log on to www.ssrfunds.com
and click on the proxy voting button. Prior to logging on, the
shareholder should read the Proxy Statement and have his or her Proxy
form at hand. Enter the control number provided on the Proxy form, and
follow the instructions on the screen. If a shareholder receives more
than one Proxy form, he or she may vote them during the same session.
Each card has a different control number.
A person submitting votes by telephone or over the Internet is deemed
to represent that he or she is authorized to vote on behalf of all owners of the
account, including spouses or other joint owners. By using the telephone or the
Internet to submit voting instructions, the shareholder is authorizing First
Data Investor Services Group, Inc. ("FDISG"), a proxy solicitation firm, and its
agents, to execute a proxy to vote the shareholder's shares at the Meeting as
the shareholder has indicated.
4
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Shareholders voting their Proxies by either telephone method or over
the Internet should not return their Proxy forms by mail.
By Mail
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To vote by mail, the shareholder should date and sign the
Proxy form included with this Proxy Statement and return the form in
the envelope provided.
Any shareholder who has given a Proxy, by telephone, over the Internet
or in written form, has the right to revoke it at any time prior to its exercise
by submitting a subsequent telephone or electronic vote, or a written notice of
revocation or a later-dated Proxy, or by attending the Meeting and voting his or
her shares in person.
The Trusts believe that the procedures for authorizing the execution of
a Proxy by telephone or over the Internet set forth above are reasonably
designed to ensure that the identity of the shareholder casting the vote is
accurately determined and that the voting instructions of the shareholder are
accurately recorded.
In some cases, proxy solicitation materials may be included in one
package for more than one account with the same tax I.D. number and address of
record.
FDISG and its agents will assist with the mailing and tabulation effort
and may also solicit Proxies by contacting shareholders by telephone. All the
costs of the solicitation will be borne by the Funds. A Fund's cost for FDISG to
assist with inquiries and make calls to solicit proxies is not expected to
exceed $25,000, depending on the size of a Fund and its shareholder response
rate. Each Fund also will reimburse brokerage firms and others for their
expenses in forwarding solicitation material to the beneficial owners of shares
of that Fund. Representatives of State Street Research Service Center and other
representatives of the Trusts may also solicit proxies.
Questions about the proposal itself should be directed to State Street
Research Service Center at 1-800-562-0032, One Financial Center, Boston,
Massachusetts 02111. Upon request, State Street Research Service Center also
will provide the annual report and most recent semiannual report succeeding the
annual report, if any, for the Fund without charge.
Information on the persons or entities who were the beneficial owners
of 5% or more of Class A, Class B(1) and Class B shares of each Fund as of
August 31, 1999 is set forth in Appendix B hereto.
State Street Research & Management Company (the "Investment Manager")
serves as investment manager of the Funds and State Street Research Investment
Services, Inc. (the "Distributor") serves as distributor of the Funds. The
Investment Manager and the Distributor are located at One Financial Center,
Boston, Massachusetts 02111 and are indirect, wholly-owned subsidiaries of
Metropolitan Life Insurance Company ("Metropolitan"). Metropolitan and its
affiliates have
5
<PAGE>
indicated that with respect to shares of a Fund for which they have voting
authority, they intend to vote for and against the proposal in the same relative
proportion as do the other shareholders of the Fund who cast votes at the
Meeting, except for certain shares held in private advisory accounts managed by
the Investment Manager (see Appendix B).
PROPOSAL 1
AMENDMENT OF CURRENT RULE 12B-1 DISTRIBUTION PLAN
WITH RESPECT TO CLASS A SHARES OF EACH FUND
This proposal would amend each Fund's plan of distribution pursuant to
Rule 12b-1 under the 1940 Act (each, a "Plan" and collectively, the "Plans").
The proposal, if adopted, would permit each Fund to pay fees under its Plan
which are higher than the amount currently permitted but no higher than 40 basis
points (0.40 of 1% or .0040) of the average daily net asset value of Class A
shares of that Fund. The Plans currently permit annual fees of up to 25 basis
points (0.25 of 1% or .0025) of the average daily net asset value represented by
Class A shares. It is currently anticipated by the Trustees and the Distributor
that the amount which each Fund's Board of Trustees will actually authorize for
payment by the Fund will be substantially less than the incremental 15 basis
points being proposed, but shareholders are being asked to provide the Trustees
with the flexibility to authorize such payment if it should appear to be
appropriate because of future circumstances. In addition, if the proposal is
adopted, each Plan would permit eligible expenses incurred in connection with
sales of Class A shares to be reimbursable in subsequent years. Generally, the
Plans currently do not authorize reimbursement for expenditures incurred in any
prior year, except for IntelliQuant Portfolios: Small-Cap Value. There is no
change being proposed in the level of Rule 12b-1 fees to be paid by Class B or
Class B(1) shareholders. However, Class B and Class B(1) shareholders are
entitled to vote as separate classes because their shares will convert to Class
A shares if they are held for certain periods of time.
Consistent with a widespread practice in the mutual fund industry,
Class A shares of the Funds are sold subject to a one-time front-end sales
charge (up to 5.75% of the amount of the sale in the case of a sale of
less than $50,000), which is paid by the investor. The financial intermediary
responsible for the sale receives a commission and usually also receives an
annual service fee in an amount equal to a percentage of the customer's assets
remaining in the Fund on an ongoing basis. Currently, the Funds pay service fees
in the amount of 25 basis points of the average daily net asset value of Class A
shares. The Distributor has advised the Trustees that the amount of the current
payments with respect to Class A shares of the Fund are becoming uncompetitive.
The heightened competition for the sale of shares by mutual funds has resulted
in increased costs of distribution.
6
<PAGE>
Under the current versions of the Plans, the Funds are not
well-positioned to respond to these developments in the costs of selling shares
and servicing shareholders. The Distributor's expenditures incurred in
connection with the distribution and marketing of Class A shares and the
servicing of Class A shareholder accounts has exceeded the amounts paid to the
Distributor under the Plan with respect to the Class A shares. Any further
increases in the cost of distribution would continue to widen this shortfall.
Many comparable mutual funds currently have the flexibility in their Rule 12b-1
plans to meet these increasing costs. The Distributor and Trustees believe that
the Funds and their shareholders will be disadvantaged if the Trustees are not
afforded similar flexibility to respond to marketplace developments.
Accordingly, the Distributor has asked the Trustees to increase the
limit on the amount payable by each Fund under its Plan. The current 25 basis
point fee would be increased to an amount established by the Trustees for each
Fund, but in no event will the fee be greater than 40 basis points of the
average daily value of net assets attributable to Class A shares of the Fund.
The Trustees have approved the implementation of the increase only as necessary
to meet increased expenses.
The amount of fees and expenses each Fund actually has paid under the
current versions of its Plan during its most recent fiscal year, both in the
aggregate and as a percentage of the Fund's average daily net asset value, as
well as the amount of fees and expenses that the Fund would have paid if the
proposed amendment to the Plan had been in effect for the last fiscal year, are
shown below in Exhibit 1, attached to this Proxy Statement.
The Funds' 12b-1 fees will continue to comply with NASD limits which
are designed to ensure that Rule 12b-1 fees, in combination with front-end loads
and deferred loads, do not exceed the economic equivalent of the regulatory
limits on front-end fees standing alone.
(The discussion in the next paragraph is not relevant to IntelliQuant
Portfolios: Small-Cap Value shareholders.)
Each Plan currently permits the respective Fund to reimburse the
Distributor for, among other things, payments to broker-dealers and others who
sell Class A shares, as well as direct out-of-pocket expenditures incurred by
the Distributor. The amount of such reimbursement in any one year is limited to
the amount of fees generated by that Fund's Rule 12b-1 plan of distribution
during the year. If the fees in any one year are insufficient to meet the
reimbursable expenses incurred by the Distributor, the Distributor must pay
those expenses using its own resources. The Distributor believes that this type
of restriction is now uncommon. The Distributor believes that it is
fundamentally fair to allow it to recover its expenses in subsequent periods,
which would be permitted if the proposed amendment is adopted.
7
<PAGE>
Trustees Consideration and Recommendation. The Trustees of each Trust
have unanimously approved the proposed amendment to each Plan.
In connection with their review, the Trustees were advised by the
Distributor that retention and growth of the Funds' assets are crucial to the
Funds' long-term success and that the current pricing structure of the Class A
shares could leave the Funds at a competitive disadvantage if the Funds are
unable to respond to changing market conditions. The Trustees considered
numerous factors, including:
[] The increasingly difficult competitive environment for sales of mutual
fund shares;
[] The investment benefits to the Funds of positive cash flow and greater
assets, such as access to investment opportunities, and the ability to
trade portfolio securities more efficiently;
[] The need to pay financial advisers, broker-dealers and others for
distribution and service-related activities at competitive levels to
maintain the scope and quality of services expected by shareholders and
to ensure continued access to distribution channels;
[] The need for open-end mutual funds, such as the Funds, to generate at
least enough sales of fund shares to offset typical amounts of
redemptions, and thus allow the Investment Manager to manage Fund assets
without being forced to sell securities to honor redemptions;
[] The increase in 12b-1 expenses paid by each Fund in connection with
Class A shares; and
[] The current and pro forma expense ratios applicable to Class A shares as
compared with the expense ratios of comparable funds with which each
Fund competes.
The Trustees also recognized and considered that possible benefits may
be realized by the Distributor and the Investment Manager as a result of the
adoption of the amendments to the Plans. As noted above, one effect of the
proposed change would be to enable the Distributor to recover certain types of
expenses that it currently is funding from its own resources. Another effect
could be increases in the investment management fees payable to the Investment
Manager by the Funds (which are calculated as a percent of net assets) if Fund
assets grow as a result of the amendments to the Plans.
If approved, each Plan, as amended, will continue in effect for up to
one year from the date of approval, and then from year to year so long as it is
approved by a majority of the relevant Board, including a majority of the
Independent Trustees of that Board. Each Plan may be terminated at any time by
the Board, or the
8
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Class A shareholders, of such Fund and will terminate automatically if it is
assigned. No Plan may be amended to increase materially the amount of the fee
payable under the Plan unless the increase is approved by the Class A, Class B
and Class B(1) shareholders, voting separately, of the respective Fund.
The date each Plan was adopted and the date when it was last amended
are included in Exhibit 2, attached to this Proxy Statement.
If the proposal is not approved by the Class A shareholders of a Fund,
the Trustees will reevaluate the matter and consider alternatives. If the
proposal is approved by Class A shareholders but not by Class B or Class B(1)
shareholders, the Fund may elect to establish a new class which provides the
Class B or Class B(1) shareholders with substantially the same terms as the
current Class A.
The Trustees of each Trust recommend that you vote FOR Proposal 1.
OTHER MATTERS TO COME BEFORE THE MEETING
The Trustees of each Trust do not intend to present any other business
at the Meeting, nor are they aware that any shareholder intends to do so. If,
however, any other matters are properly brought before the Meeting, the persons
named in the accompanying Proxy will vote thereon in accordance with their
judgment.
NO ANNUAL MEETINGS OF SHAREHOLDERS
There will be no annual or further special meetings of shareholders of
any Trust unless required by applicable law or called by the Trustees of such
Trust in their discretion.
Shareholders wishing to submit proposals for inclusion in a proxy
statement for a subsequent shareholder meeting should send their written
proposals to the Secretary of the respective Trust, One Financial Center,
Boston, Massachusetts 02111. Shareholder proposals should be received in a
reasonable time before the solicitation is made.
WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING, PLEASE FILL IN, DATE
AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. NO
POSTAGE IS NECESSARY IF IT IS MAILED IN THE UNITED STATES. CERTAIN SHAREHOLDERS
MAY ALSO VOTE BY TELEPHONE OR OVER THE INTERNET; PLEASE SEE PAGES 4 AND 5
FOR DETAILS.
November 23, 1999
Date of Proxy Statement
9
<PAGE>
EXHIBIT 1
Actual and Pro Forma Fund Expenses
The tables below show the amount of service/distribution (12b-1) fees
each Fund actually has paid under the current version of its Plan during its
most recent fiscal year, both in the aggregate and as a percentage of the Fund's
average daily net asset value, as well as the amount of fees that the Fund would
have paid if the proposed amendment to the Plan had been in effect for the last
fiscal year. Class B(1) was introduced on January 1, 1999. Class B(1) expenses
are based on Class B expenses. All payments have been, or would be, made to the
Distributor.
It is currently anticipated by the Trustees and the Distributor that
the amount that each Fund's Board of Trustees will actually authorize for
payment by the Fund will be substantially less than the incremental 15 basis
points being proposed, but shareholders are being asked to provide the Trustees
with the flexibility to authorize such payment if it should appear to be
appropriate because of future circumstances.
The Examples below assume that you invested $10,000 over the years
indicated, reinvested all distributions, earned a hypothetical 5% annual return
and paid the maximum applicable sales charges. For Class B and Class B(1)
shares, the Examples also assume the automatic conversion to Class A shares
after eight years. Where two numbers are shown separated by a slash, the first
number assumes you sold all your shares at the end of the period, while the
second assumes that you continued to hold your shares of that Fund. Where there
is only one number, the expenses would be the same either way.
Exhibit 1, page 1
<PAGE>
Aurora Fund
(for the fiscal year ended September 30, 1999)
Annual Fund Operating Expenses
(as a percentage of average net assets)
<TABLE>
<CAPTION>
Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1999 1999 1999
<S> <C> <C> <C> <C> <C> <C>
Management fee 0.85 0.85 0.85 (No change 0.85 (No change
Service/distribution (12b-1) fees 0.25 0.40 1.00 from 1.00 from
Other expenses 0.36 0.36 0.36 actual) 0.36 actual)
---- ---- ---- ----
Total annual fund operating expenses* 1.46 1.61 2.21 2.21
==== ==== ==== ====
*Because some of the
fund's expenses
have been reduced
through expense
offset arrangements,
actual total
operating expenses
for the prior year
would have been: 1.45 1.60 2.20 2.20
==== ==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
Example Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1999 1999 1999
<S> <C> <C> <C> <C> <C> <C> <C>
Year
1 $715 $ 729 $ 724/$224 (No change $ 724/$224 (No change
3 $1,010 $1,054 $ 991/$691 from $ 991/$691 from
5 $1,327 $1,401 $1,385/$1,185 actual) $1,385/$1,185 actual)
10 $2,221 $2,376 $ 2,355 $2,393 $ 2,355 $2,393
</TABLE>
Exhibit 1, page 2
<PAGE>
Emerging Growth Fund
(for the fiscal year ended September 30, 1999)
Annual Fund Operating Expenses
(as a percentage of average net assets)
<TABLE>
<CAPTION>
Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1999 1999 1999
<S> <C> <C> <C> <C> <C> <C>
Management fee 0.75 0.75 0.75 (No change 0.75 (No change
Service/distribution (12b-1) fees 0.25 0.40 1.00 from 1.00 from
Other expenses 0.87 0.87 0.87 actual) 0.87 actual)
---- ---- ---- ----
Total annual fund operating expenses 1.87 2.02 2.62 2.62
==== ==== ==== ====
*Because some of the fund's expenses have been
subsidized or reduced through expense offset
arrangements, actual total operating expenses
for the prior year were: 1.35 1.50 2.10 2.10
==== ==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
Example Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1999 1999 1999
<S> <C> <C> <C> <C> <C> <C> <C>
Year
1 $754 $768 $ 765/$265 (No change $ 765/$265 (No change
3 $1,129 $1,172 $ 1,114/$814 from $ 1,114/$814 from
5 $1,528 $1,600 $1,590/$1,390 actual) $1,590/$1,390 actual)
10 $2,639 $2,788 $ 2,772 $2,809 $ 2,772 $2,809
</TABLE>
Exhibit 1, page 3
<PAGE>
Alpha Fund
(for the fiscal year ended June 30, 1999)
Annual Fund Operating Expenses
(as a percentage of average net assets)
<TABLE>
<CAPTION>
Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1999 1999 1999
<S> <C> <C> <C> <C> <C> <C>
Management fee 0.65 0.65 0.65 (No change 0.65 (No change
Service/distribution (12b-1) fees 0.25 0.40 1.00 from 1.00 from
Other expenses 0.36 0.36 0.36 actual) 0.36 actual)
---- ---- ---- ----
Total annual fund operating expenses 1.26 1.41 2.01 2.01
==== ==== ==== ====
Because some of the fund's expenses have been
subsidized or reduced through expense
offset arrangements, actual total operating expenses
for the prior year would have been: 1.21 1.36 1.96 1.96
==== ==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
Example Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1999 1999 1999
<S> <C> <C> <C> <C> <C> <C> <C>
Year
1 $696 $710 $704/$204 (No change $704/$204 (No change
3 $952 $996 $930/$630 from $930/$630 from
5 $1,227 $1,302 $1,283/$1,083 actual) $1,283/$1,083 actual)
10 $2,010 $2,169 $2,144 $2,183 $2,144 $2,183
</TABLE>
Exhibit 1, page 4
<PAGE>
Argo Fund
(for the fiscal year ended June 30, 1999)
Annual Fund Operating Expenses
(as a percentage of average net assets)
<TABLE>
<CAPTION>
Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1999 1999 1999
<S> <C> <C> <C> <C> <C> <C>
Management fee 0.65 0.65 0.65 (No change 0.65 (No change
Service/distribution (12b-1) fees 0.25 0.40 1.00 from 1.00 from
Other expenses 0.41 0.41 0.41 actual) 0.41 actual)
---- ---- ---- ----
Total annual fund operating expenses 1.31 1.46 2.06 2.06
==== ==== ==== ====
Because some of the fund's expenses have been
subsidized or reduced through expense
offset arrangements, actual total operating expenses
for the prior year would have been: 1.25 1.40 2.00 2.00
==== ==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
Example Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1999 1999 1999
<S> <C> <C> <C> <C> <C> <C> <C>
Year
1 $701 $715 $709/$209 (No change $709/$209 (No change
3 $966 $1,010 $946/$646 from $946/$646 from
5 $1,252 $1,327 $1,308/$1,108 actual) $1,308/$1,108 actual)
10 $2,063 $2,221 $2,197 $2,236 $2,197 $2,236
</TABLE>
Exhibit 1, page 5
<PAGE>
Global Resources Fund
(for the fiscal year ended June 30, 1999)
Annual Fund Operating Expenses
(as a percentage of average net assets)
<TABLE>
<CAPTION>
Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1999 1999 1999
<S> <C> <C> <C> <C> <C> <C>
Management fee 0.75 0.75 0.75 (No change 0.75 (No change
Service/distribution (12b-1) fees 0.25 0.40 1.00 from 1.00 from
Other expenses 0.59 0.59 0.59 actual) 0.59 actual)
---- ---- ---- ----
Total annual fund operating expenses 1.59 1.74 2.34 2.34
==== ==== ==== ====
Because some of the fund's expenses have been
reduced through expense offset arrangements,
actual total operating expenses for the prior
year would have been: 1.57 1.72 2.32 2.32
==== ==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
Example Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1999 1999 1999
<S> <C> <C> <C> <C> <C> <C> <C>
Year
1 $727 $742 $737/$237 (No change $737/$237 (No change
3 $1,048 $1,091 $1,030/$730 from $1,030/$730 from
5 $1,391 $1,464 $1,450/$1,250 actual) $1,450/$1,250 actual)
10 $2,356 $2,509 $2,489 $2,527 $2,489 $2,527
</TABLE>
Exhibit 1, page 6
<PAGE>
Athletes Fund
(for the fiscal year ended June 30, 1999)
Annual Fund Operating Expenses
(as a percentage of average net assets)
<TABLE>
<CAPTION>
Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1999 1999 1999
<S> <C> <C> <C> <C> <C> <C>
Management fee 0.65 0.65 0.65 (No change 0.65 (No change
Service/distribution (12b-1) fees 0.25 0.40 1.00 from 1.00 from
Other expenses 1.94 1.94 1.94 actual) 1.94 actual)
---- ---- ---- ----
Total annual fund operating expenses 2.84 2.99 3.59 3.59
==== ==== ==== ====
Because some of the fund's expenses have been
subsidized or reduced through expense
offset arrangements, actual total operating expenses
for the prior year would have been: 1.25 1.40 2.00 2.00
==== ==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
Example Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Form Actual Pro Forma
1999 1999 1999
<S> <C> <C> <C> <C> <C> <C> <C>
Year
1 $846 $860 $862/$362 (No change $862/$362 (No change
3 $1,404 $1,446 $1,400/$1,100 from $1,400/$1,100 from
5 $1,988 $2,057 $2,059/$1,859 actual) $2,059/$1,859 actual)
10 $3,559 $3,693 $3,688 $3,721 $3,688 $3,721
</TABLE>
Exhibit 1, page 7
<PAGE>
Government Income Fund
(for the fiscal year ended October 31, 1999)
Annual Fund Operating Expenses (unaudited)
(as a percentage of average net assets)
<TABLE>
<CAPTION>
Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1999 1999 1999
<S> <C> <C> <C> <C> <C> <C>
Management fee 0.59 0.59 0.59 (No change 0.59 (No change
Service/distribution (12b-1) fees 0.25 0.40 1.00 from 1.00 from
Other expenses 0.21 0.21 0.21 actual) 0.21 actual)
---- ---- ---- ----
Total annual fund operating expenses* 1.05 1.20 1.80 1.80
==== ==== ==== ====
*Because some of the
fund's expenses
have been reduced
through expense
offset arrangements,
actual total
operating expenses
for the prior year
were: 1.04 1.19 1.79 1.79
==== ==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
Example Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1999 1999 1999
<S> <C> <C> <C> <C> <C> <C> <C>
Year
1 $552 $567 $683/$183 (No change $683/$183 (No change
3 $769 $814 $866/$566 from $866/$566 from
5 $1,003 $1,080 $1,175/$975 actual) $1,175/$975 actual)
10 $1,675 $1,839 $1,919 $1,958 $1,919 $1,958
</TABLE>
Exhibit 1, page 8
<PAGE>
Strategic Income Plus Fund
(for the fiscal year ended October 31, 1999)
Annual Fund Operating Expenses (unaudited)
(as a percentage of average net assets)
<TABLE>
<CAPTION>
Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1999 1999 1999
<S> <C> <C> <C> <C> <C> <C>
Management fee 0.60 0.60 0.60 (No change 0.60 (No change
Service/distribution (12b-1) fees 0.25 0.40 1.00 from 1.00 from
Other expenses 0.67 0.67 0.67 actual) 0.67 actual)
---- ---- ---- ----
Total annual fund operating expenses* 1.52 1.67 2.27 2.27
==== ==== ==== ====
*Because some of the fund's expenses have been
subsidized, actual total operating expenses
for the prior year were: 1.15 1.30 1.90 1.90
==== ==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
Example Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1999 1999 1999
Year
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 721 $ 735 $ 730/$230 (No change $ 730/$230 (No change
3 $1,028 $1,071 $ 1,009/$709 from $ 1,009/$709 from
5 $1,356 $1,430 $1,415/$1,215 actual) $1,415/$1,215 actual)
10 $2,283 $2,438 $ 2,417 $2,455 $ 2,417 $2,455
</TABLE>
Exhibit 1, page 9
<PAGE>
IntelliQuant Portfolios: Small-Cap Value
(for the fiscal year ended February 28, 1999)
Annual Fund Operating Expenses
(as a percentage of average net assets)
<TABLE>
<CAPTION>
Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1999 1999 1999
<S> <C> <C> <C> <C> <C> <C>
Management fee 0.80 0.80 0.80 (No change 0.80 (No change
Service/distribution (12b-1) fees 0.25 0.40 1.00 from 1.00 from
Other expenses 0.63 0.63 0.63 actual) 0.63 actual)
---- ---- ---- ----
Total annual fund operating expenses 1.68 1.83 2.43 2.43
==== ==== ==== ====
Because some of the fund's expenses have been
subsidized, actual total operating expenses
for the prior year were: 1.40 1.55 2.15 2.15
==== ==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
Example Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1999 1999 1999
Year
<S> <C> <C> <C> <C> <C> <C> <C>
1 $736 $750 $746/$246 (No change $746/$246 (No change
3 $1,074 $1,117 $1,058/$758 from $1,058/$758 from
actual) actual)
</TABLE>
Exhibit 1, page 10
<PAGE>
International Equity Fund
(for the fiscal year ended October 31, 1999)
Annual Fund Operating Expenses (unaudited)
(as a percentage of average net assets)
<TABLE>
<CAPTION>
Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1999 1999 1999
<S> <C> <C> <C> <C> <C> <C>
Management fee 0.95 0.95 0.95 (No change 0.95 (No change
Service/distribution (12b-1) fees 0.25 0.40 1.00 from 1.00 from
Other expenses 1.14 1.14 1.14 actual) 1.14 actual)
---- ---- ---- ----
Total annual fund operating expenses* 2.34 2.49 3.09 3.09
==== ==== ==== ====
* Because some of the fund's expenses have been
subsidized or reduced through expense offset
arrangements, actual total operating expenses
for the prior year were: 1.90 2.05 2.65 2.65
==== ==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
Example Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1999 1999 1999
Year
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 798 $ 813 $ 812/$312 (No change $ 812/$312 (No change
3 $1,263 $1,306 $ 1,254/$954 from $ 1,254/$954 from
5 $1,753 $1,824 $1,820/$1,620 actual) $1,820/$1,620 actual)
10 $3,097 $3,238 $ 3,228 $3,263 $ 3,228 $3,263
</TABLE>
Exhibit 1, page 11
<PAGE>
Growth Fund
(for the fiscal year ended December 31, 1998)
Annual Fund Operating Expenses
(as a percentage of average net assets)
<TABLE>
<CAPTION>
Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1998 1998 1998
<S> <C> <C> <C> <C> <C> <C>
Management fee 0.475 0.475 0.475 (No change 0.475 (No change
Service/distribution (12b-1) fees 0.250 0.400 1.000 from 1.000 from
Other expenses 0.245 0.245 0.245 actual) 0.245 actual)
----- ----- ----- -----
Total annual fund operating expenses 0.970 1.120 1.720 1.720
===== ===== ===== =====
</TABLE>
<TABLE>
<CAPTION>
Example Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1998 1998 1998
Year
<S> <C> <C> <C> <C> <C> <C> <C>
1 $668 $683 $675/$175 (No change $675/$175 (No change
3 $866 $911 $842/$542 from $842/$542 from
5 $1,080 $1,156 $1,133/$933 actual) $1,133/$933 actual)
10 $1,696 $1,860 $1,831 $1,871 $1,831 $1,871
</TABLE>
Exhibit 1, page 12
<PAGE>
High Income Fund
(for the fiscal year ended March 31, 1999)
Annual Fund Operating Expenses
(as a percentage of average net assets)
<TABLE>
<CAPTION>
Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1999 1999 1999
<S> <C> <C> <C> <C> <C> <C>
Management fee 0.57 0.57 0.57 (No change 0.57 (No change
Service/distribution (12b-1) fees 0.25 0.40 1.00 from 1.00 from
Other expenses 0.20 0.20 0.20 actual) 0.20 actual)
---- ---- ---- ----
Total annual fund operating expenses 1.02 1.17 1.77 1.77
==== ==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
Example Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1999 1999 1999
Year
<S> <C> <C> <C> <C> <C> <C> <C>
1 $549 $564 $680/$180 (No change $680/$180 (No change
3 $760 $805 $857/$557 from $857/$557 from
5 $988 $1,065 $1,159/$959 actual) $1,159/$959 actual)
10 $1,642 $1,806 $1,886 $1,926 $1,886 $1,926
</TABLE>
Exhibit 1, page 13
<PAGE>
Investment Trust
(for the fiscal year ended December 31, 1998)
Annual Fund Operating Expenses
(as a percentage of average net assets)
<TABLE>
<CAPTION>
Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1998 1998 1998
<S> <C> <C> <C> <C> <C> <C>
Management fee 0.48 0.48 0.48 (No change 0.48 (No change
Service/distribution (12b-1) fees 0.25 0.40 1.00 from 1.00 from
Other expenses 0.16 0.16 0.16 actual) 0.16 actual)
---- ---- ---- ----
Total annual fund operating expenses 0.89 1.04 1.64 1.64
==== ==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
Example Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1998 1998 1998
Year
<S> <C> <C> <C> <C> <C> <C> <C>
1 $661 $675 $667/$167 (No change $667/$167 (No change
3 $843 $887 $817/$517 from $817/$517 from
5 $1,040 $1,116 $1,092/$892 actual) $1,092/$892 actual)
10 $1,608 $1,773 $1,743 $1,784 $1,743 $1,784
</TABLE>
Exhibit 1, page 14
<PAGE>
Galileo Fund
(for the fiscal year ended April 30, 1999)
Annual Fund Operating Expenses
(as a percentage of average net assets)
<TABLE>
<CAPTION>
Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1999 1999 1999
<S> <C> <C> <C> <C> <C> <C>
Management fee 0.65 0.65 0.65 (No change 0.65 (No change
Service/distribution (12b-1) fees 0.25 0.40 1.00 from 1.00 from
Other expenses 1.12 1.12 1.12 actual) 1.12 actual)
---- ---- ---- ----
Total annual fund operating expenses 2.02 2.17 2.77 2.77
==== ==== ==== ====
Because some of the fund's expenses have been
subsidized or reduced through expense
offset arrangements, actual total operating expenses
for the prior year would have been: 1.25 1.40 2.00 2.00
==== ==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
Example Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1999 1999 1999
Year
<S> <C> <C> <C> <C> <C> <C> <C>
1 $768 $782 $780/$280 (No change $780/$280 (No change
3 $1,172 $1,215 $1,159/$859 from $1,159/$859 from
5 $1,600 $1,672 $1,664/$1,464 actual) $1,664/$1,464 actual)
10 $2,788 $2,934 $2,920 $2,956 $2,920 $2,956
</TABLE>
Exhibit 1, page 15
<PAGE>
Legacy Fund
(for the fiscal year ended April 30, 1999)
Annual Fund Operating Expenses
(as a percentage of average net assets)
<TABLE>
<CAPTION>
Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1999 1999 1999
<S> <C> <C> <C> <C> <C> <C>
Management fee 0.65 0.65 0.65 (No change 0.65 (No change
Service/distribution (12b-1) fees 0.25 0.40 1.00 from 1.00 from
Other expenses 0.33 0.33 0.33 actual) 0.33 actual)
---- ---- ---- ----
Total annual fund operating expenses 1.23 1.38 1.98 1.98
==== ==== ==== ====
Because some of the fund's expenses have been
reduced through expense offset arrangements,
actual total operating expenses for the prior
year would have been: 1.22 1.37 1.97 1.97
==== ==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
Example Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1999 1999 1999
Year
<S> <C> <C> <C> <C> <C> <C> <C>
1 $693 $707 $701/$201 (No change $701/$201 (No change
3 $943 $987 $921/$621 from $921/$621 from
5 $1,212 $1,287 $1,268/$1,068 actual) $1,268/$1,068 actual)
10 $1,978 $2,137 $2,113 $2,152 $2,113 $2,152
</TABLE>
Exhibit 1, page 16
<PAGE>
Strategic Income Fund
(for the fiscal year ended April 30, 1999)
Annual Fund Operating Expenses
(as a percentage of average net assets)
<TABLE>
<CAPTION>
Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1999 1999 1999
<S> <C> <C> <C> <C> <C> <C>
Management fee 0.75 0.75 0.75 (No change 0.75 (No change
Service/distribution (12b-1) fees 0.25 0.40 1.00 from 1.00 from
Other expenses 0.45 0.45 0.45 actual) 0.45 actual)
---- ---- ---- ----
Total annual fund operating expenses 1.45 1.60 2.20 2.20
==== ==== ==== ====
Because some of the fund's expenses have been
reduced through expense offset arrangements,
actual total operating expenses for the prior
year would have been: 1.44 1.59 2.19 2.19
==== ==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
Example Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1999 1999 1999
Year
<S> <C> <C> <C> <C> <C> <C> <C>
1 $591 $605 $723/$223 (No change $723/$223 (No change
3 $888 $932 $988/$688 from $988/$688 from
5 $1,207 $1,282 $1,380/$1,180 actual) $1,380/$1,180 actual)
10 $2,107 $2,265 $2,344 $2,382 $2,344 $2,382
</TABLE>
Exhibit 1, page 17
<PAGE>
New York Tax-Free Fund
(for the fiscal year ended December 31, 1998)
Annual Fund Operating Expenses
(as a percentage of average net assets)
<TABLE>
<CAPTION>
Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1998 1998 1998
<S> <C> <C> <C> <C> <C> <C>
Management fee 0.55 0.55 0.55 (No change 0.55 (No change
Service/distribution (12b-1) fees 0.25 0.40 1.00 from 1.00 from
Other expenses 0.45 0.45 0.45 actual) 0.45 actual)
---- ---- ---- ----
Total annual fund operating expenses 1.25 1.40 2.00 2.00
==== ==== ==== ====
Because some of the fund's expenses have been
subsidized, actual total operating expenses
for the prior year were: 1.12 1.27 1.87 1.87
==== ==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
Example Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1998 1998 1998
Year
<S> <C> <C> <C> <C> <C> <C> <C>
1 $572 $586 $703/$203 (No change $703/$203 (No change
3 $829 $873 $927/$627 from $927/$627 from
5 $1,105 $1,181 $1,278/$1,078 actual) $1,278/$1,078 actual)
10 $1,893 $2,054 $2,134 $2,173 $2,134 $2,173
</TABLE>
Exhibit 1, page 18
<PAGE>
Tax-Exempt Fund
(for the fiscal year ended December 31, 1998)
Annual Fund Operating Expenses
(as a percentage of average net assets)
<TABLE>
<CAPTION>
Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1998 1998 1998
<S> <C> <C> <C> <C> <C> <C>
Management fee 0.55 0.55 0.55 (No change 0.55 (No change
Service/distribution (12b-1) fees 0.25 0.40 1.00 from 1.00 from
Other expenses 0.23 0.23 0.23 actual) 0.23 actual)
---- ---- ---- ----
Total annual fund operating expenses 1.03 1.18 1.78 1.78
==== ==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
Example Class A Class B(1) Class B
---------------------- --------------------- ---------------------
Actual Pro Forma Actual Pro Forma Actual Pro Forma
1998 1998 1998
Year
<S> <C> <C> <C> <C> <C> <C> <C>
1 $550 $565 $681/$181 (No change $681/$181 (No change
3 $763 $808 $860/$560 from $860/$560 from
5 $993 $1,070 $1,164/$964 actual) $1,164/$964 actual)
10 $1,653 $1,817 $1,897 $1,937 $1,897 $1,937
</TABLE>
Exhibit 1, page 19
<PAGE>
Aggregate Rule 12b-1 Fees on Class A Shares
-------------------------------------------
<TABLE>
<CAPTION>
Paid During Pro Forma
Last Fiscal Year Fees
---------------- ----
<S> <C> <C>
Aurora Fund $333,271 $533,234
Emerging Growth Fund $81,642 $130,627
Alpha Fund $284,079 $454,526
Argo Fund $180,912 $289,459
Global Resources Fund $148,925 $238,280
Athletes Fund $3,871 $6,194
Government Income Fund $1,263,984* $2,022,374*
Strategic Income Plus Fund $109* $174*
IntelliQuant Portfolios:
Small-Cap Value $305 $488
International Equity Fund $45,173* $72,277*
Growth Fund $44,531 $71,250
High Income Fund $1,686,952 $2,699,123
Investment Trust $1,158,478 $1,853,565
Galileo Fund $31,405 $50,248
Legacy Fund $72,682 $116,291
Strategic Income Fund $104,839 $167,742
New York Tax-Free Fund $52,247 $83,595
Tax-Exempt Fund $515,943 $825,509
</TABLE>
- --------------
* Unaudited.
Exhibit 1, page 20
<PAGE>
EXHIBIT 2
Dates 12b-1 Plans Relating to Class A Shares Adopted/Last Amended
<TABLE>
<CAPTION>
Trust/Fund Rule 12b-1 Plan Adopted Rule 12b-1 Plan Last Amended
- ---------- ----------------------- ----------------------------
<S> <C> <C>
Capital
Aurora Fund February 1, 1995
Emerging Growth Fund June 28, 1993
Equity
Alpha Fund August 11, 1986 March 10, 1995
Argo Fund August 11, 1986 March 10, 1995
Global Resources Fund January 25, 1990 March 10, 1995
Athletes Fund March 25, 1998
Financial
Government Income Fund February 12, 1987 June 1, 1993
Strategic Income Plus Fund May 16, 1994
IntelliQuant Portfolios: November 27, 1998
Small-Cap Value
International Equity Fund October 1, 1999
Growth
Growth Fund February 17, 1993
Income
High Income Fund August 11, 1986 June 1, 1993
Master Investment
Investment Trust February 17, 1993
Securities
Galileo Fund March 9, 1998
Legacy Fund December 15, 1997
Strategic Income Fund August 19, 1996
Tax-Exempt
New York Tax-Free July 1, 1989 June 5, 1993
Tax-Exempt August 11, 1986 June 5, 1993
</TABLE>
Exhibit 2, page 1
<PAGE>
APPENDIX A
As of November 18, 1999, the Record Date, the total number of Class A,
Class B and Class B(1) shares of the Funds that were issued and outstanding was
as follows:
<TABLE>
<CAPTION>
Trust/Fund Class A Class B Class B(1)
- ---------- ------- ------- ----------
<S> <C> <C> <C>
Capital Trust
Aurora Fund 7,881,384 10,517,741 1,285,724
Emerging Growth Fund 2,747,531 4,158,554 390,361
Equity Trust
Alpha Fund 6,687,300 8,019,446 682,864
Argo Fund 4,251,403 3,313,741 421,018
Global Resources Fund 4,211,280 4,478,126 524,454
Athletes Fund 259,570 88,505 78,293
Financial Trust
Government Income Fund 39,266,364 8,637,279 2,042,839
Strategic Income Plus Fund 49,421 49,422 49,422
IntelliQuant Portfolios:
Small-Cap Value 57,235 53,038 53,038
International Equity Fund 1,781,627 1,607,127 206,823
Growth Trust
Growth Fund 2,635,699 4,984,447 800,701
Income Trust
High Income Fund 107,695,065 52,729,272 6,443,069
Master Investment Trust
Investment Trust 55,532,554 75,628,541 19,430,367
Securities Trust
Galileo Fund 1,913,031 1,597,156 334,459
Legacy Fund 7,244,977 6,755,421 6,348,549
Strategic Income Fund
Tax-Exempt Trust
New York Tax-Free Fund 2,641,666 1,950,734 441,265
Tax-Exempt Fund 22,716,832 6,439,021 942,210
</TABLE>
Appendix A, page 1
<PAGE>
APPENDIX B
Listed below are the persons and entities who were the record or
beneficial owners of 5% or more of Class A, Class B or Class B(1) shares of each
Fund, where applicable, as of August 31, 1999. Such owners may disclaim
beneficial ownership of all or part of the shares listed for them.
<TABLE>
<CAPTION>
Amount and Nature of
Name of Name and Address of Beneficial Ownership
Trust/Fund Beneficial Owner (number of shares) % of Class
- ---------- ------------------ -------------------- ----------
<S> <C> <C> <C>
Capital
Aurora Fund
Class A Merrill Lynch (1) 1,328,039 17.1
Class B Merrill Lynch (1) 4,311,721 39.3
Class B(1) Merrill Lynch (1) 237,248 24.4
Emerging Growth Fund
Class B Merrill Lynch (1) 694,614 16.1
Class B(1) Metropolitan Life (2) 48,924 15.5
Merrill Lynch (1) 15,882 5.0
Equity
Alpha Fund
Class B Merrill Lynch (1) 1,555,216 18.0
Class B(1) Merrill Lynch (1) 59,924 10.0
Global Resources Fund
Class A Merrill Lynch (1) 710,179 13.3
Schwab Capital Trust (3) 393,613 7.4
Class B Merrill Lynch (1) 1,066,419 22.6
Class B(1) Merrill Lynch (1) 63,243 13.2
Athletes Fund
Class A F.G. Jackson, Jr. (4) 86,601 34.2
Metropolitan Life (2) 71,429 28.2
C. Smith & G. Jackson, Trustees (5) 37,974 15.0
Turtle & Co. (6) 19,778 7.8
Class B Metropolitan Life (2) 71,429 80.5
Merrill Lynch (1) 7,375 8.3
J.R. Locke (7) 4,789 5.4
Class B(1) Metropolitan Life (2) 59,952 81.3
Merrill Lynch (1) 5,276 7.2
CIBC World Markets Corp. (8) 4,496 6.1
</TABLE>
Appendix B, page 1
<PAGE>
<TABLE>
<CAPTION>
Amount and Nature of
Name of Name and Address of Beneficial Ownership
Trust/Fund Beneficial Owner (number of shares) % of Class
- ---------- ------------------- -------------------- ----------
<S> <C> <C> <C>
Financial
Government Income Fund
Class A Merrill Lynch (1) 14,285,997 35.8
Class B Merrill Lynch (1) 1,738,942 19.3
Class B(1) Merrill Lynch (1) 199,676 11.9
IntelliQuant Portfolios:
Small-Cap Value
Class A Metropolitan Life (2) 53,022 92.9
R.F. Verni 3,346 5.9
Class B Metropolitan Life (2) 53,022 100.0
Class B(1) Metropolitan Life (2) 53,022 100.0
International Equity Fund
Class A Supplemental Income Plan (9) 133,889 8.9
Class B Merrill Lynch (1) 194,143 12.0
Class B(1) Metropolitan Life (2) 47,037 29.2
Growth
Growth Fund
Class B Merrill Lynch (1) 1,224,446 24.5
Class B(1) Metropolitan Life (2) 59,032 9.7
Income
High Income Fund
Class B Merrill Lynch (1) 9,995,475 18.0
Class B(1) Merrill Lynch (1) 901,094 17.0
Master Investment
Investment Trust
Class B Merrill Lynch (1) 7,655,987 10.0
Class B(1) Merrill Lynch (1) 1,533,275 9.8
Securities
Galileo Fund
Class B Merrill Lynch (1) 94,974 5.8
Class B(1) Metropolitan Life (2) 47,172 17.4
Legacy Fund
Class A Merrill Lynch (1) 647,331 10.7
Class B Merrill Lynch (1) 1,584,022 24.1
Class B(1) Merrill Lynch (1) 1,060,435 22.6
</TABLE>
Appendix B, page 2
<PAGE>
<TABLE>
<CAPTION>
Amount and Nature of
Name of Name and Address of Beneficial Ownership
Trust/Fund Beneficial Owner (number of shares) % of Class
- ---------- ------------------- -------------------- ----------
<S> <C> <C> <C>
Strategic Income Fund
Class A Metropolitan Life (2) 1,157,666 23.4
Class B Merrill Lynch (1) 1,603,344 26.4
Class B(1) Merrill Lynch (1) 140,219 15.2
Metropolitan Life (2) 72,359 7.9
Tax-Exempt
New York Tax-Free Fund
Class B Merrill Lynch (1) 130,493 6.4
Class B(1) Metropolitan Life (2) 58,907 15.2
E.M. Burke (10) 48,306 12.4
H.E. Wilton (11) 31,025 8.0
Tax-Exempt Fund
Class B Merrill Lynch (1) 403,490 6.0
Class B(1) Metropolitan Life (2) 58,578 7.5
</TABLE>
(1) Merrill Lynch, Pierce, Fenner & Smith Incorporated, For the Sole Benefit of
its Customers, 4800 Deerlake Drive East, Jacksonville, FL 32246.
(2) Metropolitan Life Insurance Company, One Madison Avenue, New York, NY
10003.
(3) Schwab Capital Trust, Schwab OneSource Portfolios Small Co., 101 Montgomery
Street, San Francisco, CA 94104.
(4) F.G. Jackson, Jr., c/o State Street Research Service Center, One Financial
Center, Boston, MA 02111.
(5) C. Smith and G. Jackson, Trustees, Clark Point Trust, FBO J.J. Jackson, c/o
State Street Research Service Center, One Financial Center, Boston, MA
02111.
(6) Turtle & Co., c/o State Street Research Service Center, One Financial
Center, Boston, MA 02111. Turtle & Co. is a nominee name for shares held in
private advisory accounts managed by the Investment Manager. The Investment
Manager has indicated that it plans to vote the Turtle & Co. shares in
favor of Proposal 1.
(7) J.R. Locke, c/o State Street Research Service Center, One Financial Center,
Boston, MA 02111.
(8) CIBC World Markets Corp., P.O. Box 3484, Church Street Station, New York,
NY 10008.
(9) Supplemental Income Plan, 1400 Fashion Island Blvd., San Mateo, CA 94404.
(10) E.M. Burke, c/o State Street Research Service Center, One Financial Center,
Boston, MA 02111.
(11) H.E. Wilton, c/o State Street Research Service Center, One Financial
Center, Boston, MA 02111.
Appendix B, page 3
<PAGE>
Listed below are the amounts of Fund shares owned by the Trustees, and
by the Trustees and principal officers, as a group, as of August 31, 1999.
<TABLE>
<CAPTION>
Amount and Nature of
Name of Name of Beneficial Ownership
Trust/Fund Beneficial Owner (Class A Shares) % (Class A Shares)
- ---------- ----------------- -------------------- ------------------
<S> <C> <C> <C>
Capital
Aurora Fund Steve A. Garban 1,595 Less than 1%
Malcolm T. Hopkins 1,751 Less than 1%
Dean O. Morton (1) 73,755 Less than 1%
Susan M. Phillips 1,351 Less than 1%
Toby Rosenblatt (1) 3,804 Less than 1%
Ralph F. Verni (1) 30,767 Less than 1%
Trustees and Principal
Officers as a Group 118,230 1.5%
Emerging Growth Fund Steve A. Garban 860 Less than 1%
Malcolm T. Hopkins 3,032 Less than 1%
Ralph F. Verni (1) 48,484 Less than 1%
Trustees and Principal
Officers as a Group 52,376 1.9%
Equity
Alpha Fund Dean O. Morton (1) 7,143 Less than 1%
Michael S. Scott Morton (1) 47,465 Less than 1%
Ralph F. Verni (1) 36,800 Less than 1%
Trustees and Principal
Officers as a Group 92,239 1.3%
Argo Fund Trustees and Principal
Officers as a Group 18,618 Less than 1%
Global Resources Fund Malcolm T. Hopkins 1,584 Less than 1%
Michael S. Scott Morton (1) 62 Less than 1%
Trustees and Principal
Officers as a Group 26,309 Less than 1%
Athletes Fund Trustees and Principal
Officers as a Group 253,285 49.2%
</TABLE>
Appendix B, page 4
<PAGE>
<TABLE>
<CAPTION>
Amount and Nature of
Name of Name of Beneficial Ownership
Trust/Fund Beneficial Owner (Class A Shares) % (Class A Shares)
- ---------- ----------------- -------------------- ------------------
<S> <C> <C> <C>
Financial
Government Income Fund Michael S. Scott Morton (1) 35,224 Less than 1%
Trustees and Principal
Officers as a Group 35,224 Less than 1%
IntelliQuant Portfolios:
Small-Cap Value Ralph F. Verni (1) 3,346 5.9%
Trustees and Principal
Officers as a Group 3,346 5.9%
International Equity Fund Steve A. Garban 1,833 Less than 1%
Ralph F. Verni (1) 20,820 1.4%
Trustees and Principal
Officers as a Group 22,653 1.5%
Growth
Growth Fund Dean O. Morton (1) 29,931 1.2%
Michael S. Scott Morton (1) 118 Less than 1%
Trustees and Principal
Officers as a Group 30,049 1.2%
Income
High Income Fund Ralph F. Verni (1) 83,197 Less than 1%
Trustees and Principal
Officers as a Group 97,363 Less than 1%
Master Investment
Investment Trust Steve A. Garban 3,277 Less than 1%
Susan M. Phillips 3,734 Less than 1%
Michael S. Scott Morton (1) 21,549 Less than 1%
Ralph F. Verni (1) 15,942 Less than 1%
Trustees and Principal
Officers as a Group 70,268 Less than 1%
</TABLE>
Appendix B, page 5
<PAGE>
<TABLE>
<CAPTION>
Amount and Nature of
Name of Name of Beneficial Ownership
Trust/Fund Beneficial Owner (Class A Shares) % (Class A Shares)
- ---------- ----------------- -------------------- ------------------
<S> <C> <C> <C>
Securities
Galileo Fund Dean O. Morton (1) 23,591 1.2%
Trustees and Principal
Officers as a Group 28,974 1.5%
Legacy Fund Dean O. Morton (1) 56,732 Less than 1%
Trustees and Principal
Officers as a Group 87,327 1.4%
Strategic Income Fund Ralph F. Verni (1) 27,453 Less than 1%
Trustees and Principal
Officers as a Group 28,989 Less than 1%
Tax-Exempt
Tax-Exempt Fund Susan M. Phillips 6,008 Less than 1%
Ralph F. Verni (1) 3,160 Less than 1%
Trustees and Principal
Officers as a Group 17,444 Less than 1%
</TABLE>
- --------------
(1) May include shares held by family members as to which the individual may
disclaim beneficial ownership.
Appendix B, page 6
<PAGE>
[FRONT OF PROXY CARD]
Vote this proxy card TODAY! Your prompt response will save your Fund
the expense of additional mailings.
VOTE BY TELEPHONE, ON THE INTERNET, OR BY MAIL
Option 1: Automated Touch Tone Voting: Call toll-free 1-888-221-0697
Option 2: Telephone Rep. Assisted Voting: Call toll-free 1-877-392-4944
Option 3: On the Internet at www.ssrfunds.com
Option 4: Return this proxy card using the enclosed envelope
Special Meeting of Shareholders--February 25, 2000
*** CONTROL NUMBER: ***
---> Please detach at perforation before mailing <---
STATE STREET RESEARCH ________________________ FUND
a series of State Street Research ___________ Trust
The undersigned hereby appoints Ralph F. Verni, Francis J. McNamara,
III and Darman A. Wing, and each of them, as proxies with full power of
substitution to act for and vote on behalf of the undersigned all shares of the
above fund, which the undersigned would be entitled to vote if personally
present at the Special Meeting of Shareholders to be held at the principal
offices of the fund, One Financial Center, 31st Floor, Boston, Massachusetts
02111, at 4 P.M. on February 25, 2000, or at any adjournments thereof, on the
item described on the other side of this form, as set forth in the Notice of
Special Meeting of Shareholders and the accompanying Proxy Statement dated
November 23, 1999, receipt of which is acknowledged by the undersigned. PLEASE
INDICATE ANY CHANGE OF ADDRESS BELOW. This proxy may be revoked at any time
prior to the exercise of the powers conferred thereby. THIS PROXY IS SOLICITED
ON BEHALF OF THE BOARD OF TRUSTEES.
IF NOT VOTING BY PHONE OR THE INTERNET, IT IS IMPORTANT THAT THIS
PROXY BE SIGNED AND RETURNED IN THE ENCLOSED ENVELOPE.
DATE: _________________________
NOTE: Please date and sign exactly as name or names appear hereon and return in
the enclosed envelope, which requires no postage. When signing as attorney,
executor, trustee, guardian or officer of a corporation, please give title as
such.
- ----------------------------------------------------------- ------------------
- ----------------------------------------------------------- ------------------
Signature(s) if held jointly (Title(s), if required)
CONTINUED ON REVERSE SIDE
<PAGE>
[REVERSE SIDE OF PROXY CARD]
- --------------------------------------------------------------------------------
PLEASE DETACH AND RETURN BOTTOM PORTION IN THE ENCLOSED ENVELOPE
- --------------------------------------------------------------------------------
Please vote by filling in the box below.
If a choice is specified for Proposal 1, this proxy will be voted as indicated.
IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED FOR THE PROPOSAL. In their
discretion the proxies are authorized to vote upon such other business as may
properly come before the Meeting. The Board of Trustees recommends a vote FOR
Proposal 1.
1. For Class A, Class B and Class B(1) shareholders, voting separately: To
amend the current plan of distribution adopted pursuant to Rule 12b-1 under
the Investment Company Act of 1940, as amended, to increase the amount that
may be expended for the distribution of Class A shares.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
I PLAN TO ATTEND THE MEETING: YES [ ] NO [ ]
PLEASE SIGN ON REVERSE SIDE
<PAGE>
REQUEST TO RECONSIDER
PRIOR [ABSTENTION] ["AGAINST" VOTE]
(date)
To Shareholders of State Street Research ___________ Fund
Recently we solicited your proxy vote on an important proposal. Because you
returned a proxy form which indicated that you [abstained from voting on] [voted
"Against"] the proposal that is still open, we are contacting you again to ask
that you reconsider your [abstention] [vote "Against"] and vote in favor of the
proposal. The Fund is very close to the requisite vote to approve the proposal
and your vote may make a difference. The meeting has been adjourned to allow
more time to obtain votes.
The proposal, if adopted, would allow the Fund to increase its Rule 12b-1 fee to
pay for distribution and marketing expenses related to sales of Class A shares.
The proposal would provide the resources necessary to meet the growing costs of
distribution in an increasingly competitive environment. The proposal would also
provide the Trustees with greater flexibility to adjust the Fund's Rule 12b-1
fees to accommodate future competitive conditions. The proposal is described in
more detail in the Proxy Statement. Please call 1-800-562-0032 if you need
another copy of the Proxy Statement.
Please indicate your vote, sign and return promptly the enclosed Supplemental
Proxy form in the special accompanying envelope. Returning your Supplemental
Proxy form in the accompanying envelope will expedite processing and will not
require any postage from you. (If your return envelope is for Federal Express,
call for free pick-up at 1-800-463-3339.)
You may receive a telephone call urging you to return your Supplemental Proxy
form. If you have any question, please contact State Street Research Service
Center toll-free nationwide at 1-800-562-0032 between 8 a.m. and 6 p.m. Boston
Time.
Thank you.
State Street Research
Service Center
<PAGE>
SUPPLEMENTAL PROXY FORM
Special Meeting of Shareholders--February 25, 2000
The undersigned hereby submits this Supplemental Proxy to make the below
indicated changes to the [vote] [abstention] previously submitted by the
undersigned in connection with a Special Meeting of Shareholders as described in
a related Proxy Statement dated November 23, 1999.
THIS SUPPLEMENTAL PROXY WILL SUPERSEDE ANY PRIOR PROXY FORM SUBMITTED.
If a choice is specified for a proposal, this proxy will be voted as indicated.
IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED FOR THE PROPOSAL. In their
discretion the proxies are authorized to vote upon such other business as may
properly come before the Meeting. The Board of Trustees recommends a vote FOR
the proposal.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES.
IF NOT VOTING BY PHONE OR THE INTERNET, IT IS IMPORTANT
THAT THIS PROXY BE SIGNED AND RETURNED
IN THE ENCLOSED ENVELOPE.
DATE:
----------------------------------------------
NOTE: Please date and sign exactly as name or names appear
hereon and return in the enclosed envelope, which requires
no postage. When signing as attorney, executor, trustee,
guardian or officer of a corporation, please give title as
such.
-----------------------------------------------------
-----------------------------------------------------
(Signature(s) if held jointly (Title(s), if required)
CONTINUED ON REVERSE SIDE
<PAGE>
1. For Class A, Class B and Class B(1) shareholders, voting separately: To
amend the current plan of distribution adopted pursuant to Rule 12b-1 under
the Investment Company Act of 1940, as amended, to increase this amount
that may be expended for the distribution of Class A shares.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
I PLAN TO ATTEND THE MEETING: YES [ ] NO [ ]
PLEASE SIGN ON REVERSE SIDE
<PAGE>
- --------------------------------------------------------------------------------
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State Street Research Online Proxy Vote Center
- --------------------------------------------------------------------------------
Please Enter Control Number from Your Proxy Card: _ _ _ _ _ _ _ _ _ _ _ _ _ _
Check here / / to vote in favor of all proposals as the Board
recommends, then click the VOTE button below.
-OR-
To vote on each proposal separately, click the VOTE button only.
[VOTE BUTTON]
If you have specific questions on voting or voting procedures, please
call 1-877-392-4944 between the hours of 9:00am and 6:00pm eastern time, Monday
through Friday. For questions on a specific proxy proposal, please call a
Service Center representative at 1-800-562-0032 between the hours of 8:00am and
6:00pm eastern time, Monday through Friday.
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<PAGE>
[LOGO: State Street Research]
Internet Proxy Voting Service
Proxy Voting Form
State Street Research [name of Trust]:
State Street Research [name of fund]
THE BOARD OF TRUSTEES RECOMMENDS A VOTE "FOR" PROPOSAL 1
- --------------------------------------------------------------------------------
PROPOSAL 1. For Class A, Class B and Class B(1) shareholders, voting
separately:
To amend the current plan of distribution adopted pursuant to
Rule 12b-1 under the Investment Company Act of 1940, as
amended, to increase the amount that may be expended for the
distribution of Class A shares.
/ / FOR / / AGAINST / / ABSTAIN
Please refer to the proxy statement for a complete
discussion of the proposal.
If this proxy is submitted and no choice is specified, this proxy will
be voted FOR the proposal.
- --------------------------------------------------------------------------------
To receive email confirmation, enter your email address here: _____________
Press this button to /SUBMIT/ your Proxy Vote.
Please review your selections carefully before voting.
If you vote more than once on the same Proxy, only your
last (most recent) vote will be considered valid.
<PAGE>
PROPOSED TELEPHONE SCRIPT
STATE STREET RESEARCH _____________________ FUND
Special Meeting of Shareholders
February 25, 2000
THIS IS [NAME OF CALLER] _____________________________ CALLING ON BEHALF OF YOUR
STATE STREET RESEARCH ______________________ FUND.
MR./MRS. __________________________ AS OF YET WE HAVE NOT RECEIVED YOUR VOTED
PROXY. SINCE A NEW PROXY HAS JUST BEEN MAILED TO YOU, WE ARE HOPING THAT YOU
WOULD TAKE THIS OPPORTUNITY TO VOTE YOUR PROXY OVER THE PHONE.
[IF THE SHAREHOLDER WISHES TO VOTE]
GREAT, MR./MRS. __________________. PROPOSAL NUMBER ONE IS STILL OPEN FOR A
VOTE. PROPOSAL NUMBER ONE RELATES TO AMENDING THE RULE 12b-1 PLAN TO INCREASE
THE AMOUNT THAT MAY BE EXPENDED FOR THE DISTRIBUTION OF CLASS A SHARES AS
DESCRIBED IN THE PROXY STATEMENT. WOULD YOU LIKE TO VOTE TO APPROVE THE
AMENDMENT OF THE RULE 12b-1 PLAN, AS DESCRIBED IN THE PROXY STATEMENT?
THANK YOU FOR VOTING YOUR PROXY. THERE IS NO NEED TO RETURN YOUR PROXY CARD
UNLESS YOU WISH TO CHANGE YOUR VOTE. WOULD YOU LIKE US TO SEND YOU A WRITTEN
CONFIRMATION OF YOUR VOTE?
[IF THE SHAREHOLDER DECLINES TO VOTE]
THANK YOU FOR YOUR TIME AND HAVE A GOOD DAY.
<PAGE>
[BUCKSLIP]
Four easy ways to vote your proxy.
Choose the method that's most convenient for you
and vote your proxy today!
1. Vote by Automated Touch Tone Telephone. If a telephone number appears on the
upper left corner of your proxy card, you may vote by telephone.
Call Toll-Free: 1-888-221-0697
Enter the control number that appears on the front of your proxy card and follow
the voice prompts to record your vote. Telephone voting is available 24 hours a
day, 7 days a week. If you have received more than one proxy card, each card has
a different control number and must be voted separately. You can vote all of
your cards on the same phone call.
2. Vote by Speaking with a Telephone Representative. If a telephone number
appears on the upper left corner of your proxy card, you may vote by telephone.
A telephone representative will assist you with the voting process. They are
available between 9 a.m. and 6 p.m. Monday through Friday eastern time.
Call Toll-Free: 1-877-392-4944
3. Vote on the Internet. If a control number appears on the front of your proxy
card, you may vote on the Internet. Log on to
www.ssrfunds.com
and click on the proxy voting button. Enter the control number that appears on
the front of your proxy card and follow the instructions on the screen. You can
vote all cards in the same session.
4. Vote by mail. Sign your proxy card(s) and return them in the enclosed
postage-paid envelope. Note: Your proxy is not valid unless it is signed.
Note: If you vote by telephone or over the Internet, please do not return your
proxy card(s).
