As filed with the Securities and Exchange Commission on July 29, 1996
Securities Act of 1933 Registration No. 2-97506
Investment Company Act of 1940 File No. 811-4295
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |_|
Pre-Effective Amendment No. |_|
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Post-Effective Amendment No. 11 |X|
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |_|
Amendment No. 15 |X|
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STATE STREET RESEARCH MONEY MARKET TRUST
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(Exact Name of Registrant as Specified in Charter)
One Financial Center, Boston, Massachusetts 02111
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (617) 357-1200
Francis J. McNamara, III
Executive Vice President, General Counsel and Secretary
State Street Research & Management Company
One Financial Center
Boston, Massachusetts 02111
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(Name and Address of Agent for Service)
Copies of Communications to:
Donald J. Evans, P.C.
Edward T. O'Dell, P.C.
Goodwin, Procter & Hoar
Exchange Place
Boston, Massachusetts 02109
It is proposed that this filing will become effective under Rule 485:
|_| Immediately upon filing pursuant to paragraph (b).
|X| On August 1, 1996 pursuant to paragraph (b).
|_| 60 days after filing pursuant to paragraph (a)(1).
|_| On ______________ pursuant to paragraph (a)(1).
|_| 75 days after filing pursuant to paragraph (c)(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.
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The Registrant hereby declares that, pursuant to Rule 24f-2 promulgated
under the Investment Company Act of 1940, as amended, it has registered an
indefinite number of shares of beneficial interest, par value $.001 per share,
in the State Street Research Money Market Fund series of the Registrant, which
shares are designated as Class B shares, Class C shares, Class D shares and
Class E shares.
A Rule 24f-2 Notice for the fiscal year ended March 31, 1996 was filed by
the Registrant on or about May 29, 1996 with respect to such shares.
================================================================================
<PAGE>
CROSS REFERENCE SHEET
Pursuant to Rule 481(a)
Part A
------
CAPTION OR
FORM N-1A ITEM NO. LOCATION IN PROSPECTUS
- ------------------ ----------------------
1. Cover Page ................ Same
2. Synopsis .................. Table of Expenses
3. Condensed Financial Infor-
mation .................... Financial Highlights; Yield Information;
Calculation of Performance Data
4. General Description of
Registrant ................ The Fund's Investments; Limiting
Investment Risk; The Fund and its
Shares; Other Investment Practices
5. Management of the Fund .... Management of the Fund; Purchase of
Shares
5A. Management's Discussion
of Fund Performance ....... Not Applicable
6. Capital Stock and Other
Securities ................ Shareholder Services; The Fund and its
Shares; Management of the Fund;
Dividends and Distributions; Taxes
7. Purchase of Securities
Being Offered ............. Purchase of Shares; Shareholder Services
8. Redemption or Repurchase .. Redemption of Shares; Shareholder
Services
9. Legal Proceedings ......... Not Applicable
(ii)
<PAGE>
Part B
CAPTION OR LOCATION
IN STATEMENT OF
FORM N-1A ITEM NO. ADDITIONAL INFORMATION
- ------------------ ----------------------
10. Cover Page................. Same
11. Table of Contents ......... Same
12. General Information and
History ................... Not Applicable
13. Investment Objectives and
Policies .................. Additional Investment Policies and
Restrictions; Money Market Instruments;
Debt Securities Ratings; Additional
Information Concerning Certain
Investment Techniques; Portfolio
Transactions
14. Management of the Regis-
trant ..................... 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 ................ Not Applicable (Description in Prospectus)
19. Purchase, Redemption and
Pricing of Securities
Being Offered ............. Purchase and Redemption of Shares; Net
Asset Value
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>
State Street Research
Money Market Fund
Prospectus
August 1, 1996
The investment objective of State Street Research Money Market Fund (the "Fund")
is to seek a high level of current income consistent with preservation of
capital and maintenance of liquidity by investing in securities issued or
guaranteed as to principal and interest by the U.S. Government or its agencies
or instrumentalities as well as high quality, short-term money market
instruments such as bank certificates of deposit, bankers' acceptances and such
short-term corporate debt securities as commercial paper and master demand
notes.
As of March 31, 1996, the Fund's investments consisted predominantly of
corporate debt securities. The Investment Manager presently anticipates that it
will continue to emphasize such securities in managing the Fund's portfolio.
State Street Research & Management Company serves as investment adviser for
the Fund (the "Investment Manager"). As of June 30, 1996, the Investment Manager
had assets of approximately $34.9 billion under management. State Street
Research Investment Services, Inc. serves as distributor (the "Distributor") for
the Fund.
Shareholders may have their shares redeemed directly by the Fund at the net
asset value next determined on the basis of amortized cost after the Application
and payment are received and accepted on behalf of the Fund, plus the applicable
contingent deferred sales charge, if any; redemptions processed through
securities dealers may be subject to processing charges. The Fund will invest in
U.S. dollar-denominated high quality securities having remaining maturities of
397 calendar days or less and will maintain a dollar-weighted average portfolio
maturity of 90 days or less. The Fund follows these policies in seeking to
maintain a constant net asset value of $1.00 per share. The Fund's net asset
value is determined on each business day as of 12 noon and as of the close of
trading on the New York Stock Exchange (the "NYSE").
This Prospectus sets forth concisely the information a prospective investor
ought to know about the Fund before investing. It should be retained for future
reference. A Statement of Additional Information about the Fund dated August 1,
1996 has been filed with the Securities and Exchange Commission and is
incorporated by reference in this Prospectus. It is available, at no charge,
upon request to the Fund at the address indicated on the back cover or by
calling 1-800-562-0032.
The Fund is a diversified series of State Street Research Money Market
Trust (the "Trust"), an open-end management investment company.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
Table of Contents Page
- ----------------------------------------------
Table of Expenses 2
Financial Highlights 4
Yield Information 5
The Fund's Investments 5
Limiting Investment Risk 6
Purchase of Shares 7
Redemption of Shares 13
Shareholder Services 15
The Fund and its Shares 19
Management of the Fund 20
Dividends and Distributions; Taxes 20
Other Investment Practices 21
Calculation of Performance Data 22
- ---------------------------------------------
<PAGE>
The Fund offers multiple classes of shares which may be purchased at the next
determined net asset value per share plus, in the case of Class B and Class D
shares only, a sales charge which is imposed on a deferred basis. Class B and
Class D shares are offered solely in connection with exchanges from Eligible
Funds. Only Class C and Class E shares are offered for direct purchase. See
"Purchase of Shares--Alternative Purchase Program" and "Shareholder
Services--Exchange Privilege."
Class B shares are subject to (i) a contingent deferred sales charge
(declining from 5% to 2%), which will be imposed on most redemptions made within
five years of purchase and (ii) annual distribution and service fees of 1% of
the average daily net asset value of such shares. Class B shares automatically
convert into Class E shares (which pay lower ongoing expenses) at the end of
eight years after purchase. No contingent deferred sales charge applies after
the fifth year following the purchase of Class B shares.
Class C shares are only offered to certain employee benefit plans and large
institutions. No sales charge is imposed at the time of purchase or redemption
of Class C shares. Class C shares do not pay any distribution or service fees.
Class D shares are subject to (i) a contingent deferred sales charge of 1% if
redeemed within one year following purchase and (ii) annual distribution and
service fees of 1% of the average daily net asset value of such shares.
Class E shares are not subject to any initial or contingent deferred sales
charges. Class E shares do not pay any distribution or service fees.
<TABLE>
<CAPTION>
Table of Expenses
Class B Class C Class D Class E
------- -------- -------- ---------
<S> <C> <C> <C> <C>
Shareholder Transaction Expenses (1)
Maximum Sales Charge Imposed on Purchases (as a percentage
of offering price) None None None None
Maximum Sales Charge Imposed on Reinvested Dividends (as a
percentage of offering price) None None None None
Maximum Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds, as applicable) 5% None 1% None
Redemption Fees (as a percentage of amount redeemed,
if applicable) None None None None
Exchange Fee None None None None
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fees 0.50% 0.50% 0.50% 0.50%
12b-1 Fees 1.00% None 1.00% None
Other Expenses 0.53% 0.53% 0.53% 0.53%
Less Voluntary Reduction (0.28%) (0.28%) (0.28%) (0.28%)
------ ------ ------ -------
Total Fund Operating Expenses (after voluntary reduction) 1.75% 0.75% 1.75% 0.75%
====== ====== ====== =======
</TABLE>
(1) The maximum 5% contingent deferred sales charge on Class B shares applies
to redemptions during the first year after purchase; the charge declines
thereafter and no contingent deferred sales charge is imposed after the
fifth year. Class D shares are subject to a 1% contingent deferred sales
charge on any portion of the purchase redeemed within one year of the
sale. Long-term investors in a class of shares with a distribution fee
may, over a period of years, pay more than the economic equivalent of a
maximum sales charge permissible under applicable rules. See "Purchase of
Shares."
2
<PAGE>
Example:
You would pay the following expenses on a $1,000 investment assuming (1) 5%
annual return and (2) redemption of the entire investment at the end of each
time period:
1 Year 3 Years 5 Years 10 Years
------- ------- ------- ---------
Class B shares (1) $68 $85 $115 $180
Class C shares $8 $24 $42 $93
Class D shares $28 $55 $95 $206
Class E shares $8 $24 $42 $93
You would pay the following expenses on the same investment, assuming no
redemption:
1 Year 3 Years 5 Years 10 Years
------- ------- ------- ---------
Class B shares (1) $18 $55 $95 $180
Class D shares $18 $55 $95 $206
(1) Ten-year figures assume conversion of Class B shares to Class E shares at
the end of eight years.
The example should not be considered as a representation of past or future
return or expenses. Actual return or expenses may be greater or less than shown.
The purpose of the table above is to assist the investor in understanding the
various costs and expenses that an investor will bear directly or indirectly.
The percentage expense levels shown in the table above are based on experience
with expenses during the fiscal year ended March 31, 1996; actual expense levels
for the current fiscal year and future years may vary from the amounts shown.
The table does not reflect charges for optional services elected by certain
shareholders, such as the $7.50 fee for remittance of redemption proceeds by
wire. For further information on sales charges, see "Purchase of
Shares--Alternative Purchase Program"; for further information on management
fees, see "Management of the Fund"; and for further information on 12b-1 fees,
see "Purchase of Shares--Distribution Plan."
The Fund has been advised that the Distributor and its affiliates may from
time to time and in varying amounts voluntarily assume some portion of fees or
expenses relating to the Fund. For the fiscal year ended March 31, 1996, Total
Fund Operating Expenses as a percentage of average net assets of Class B, Class
C, Class D and Class E shares of the Fund would have been 2.03%, 1.03%, 2.05%
and 1.03%, respectively, in the absence of the voluntary assumption of fees or
expenses by the Distributor and its affiliates, which amounted to 0.28%, 0.28%,
0.30% and 0.28% of average net assets of each of the Class B, Class C, Class D
and Class E shares of the Fund, respectively. The amount of fees or expenses
assumed during the fiscal year ended March 31, 1996 differed among classes
because of fluctuations during the year in relative levels of assets in each
class and in expenses before reimbursement. The Fund expects the subsidization
of fees or expenses to continue in the current year, although it cannot give
complete assurance that such assistance will be received.
3
<PAGE>
Financial Highlights
The data set forth below has been audited by Price Waterhouse LLP,
independent accountants, and their report thereon for the latest five years
is included in the Statement of Additional Information. For further
information about the performance of the Fund, see "Financial Statements" in
the Statement of Additional Information.
<TABLE>
<CAPTION>
Class E
----------------------------------------------------------------
Year ended March 31
----------------------------------------------------------------
1996 1995 1994*** 1993 1992 1991
- ---------------------------- ------- ------- ------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of year $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
Net investment income* .051 .042 .025 .028 .048 .072
Dividends from net
investment income (.051) (.042) (.025) (.028) (.048) (.072)
----- ----- ----- ----- ----- -------
Net asset value, end of year $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
===== ===== ===== ===== ===== =======
Total return 5.20%+ 4.31%+ 2.48%+ 2.88%+ 4.85%+ 7.47%+
Net assets at end of year
(000s) $197,109 $150,491 $138,129 $149,831 $168,088 $185,839
Ratio of operating expenses
to average net assets* 0.75% 0.75% 0.75% 0.75% 0.75% 0.75%
Ratio of net investment
income to average net
assets* 5.06% 4.26% 2.46% 2.84% 4.77% 7.21%
*Reflects voluntary
assumption of fees or
expenses per share in each
year $.003 $.006 $.003 $.001 $.001 $.002
</TABLE>
<TABLE>
<CAPTION>
August 25, 1986
(Commencement of
Operations) to
1990 1989 1988 March 31, 1987
- ---------------------------- ------------ ----------- ----------- ------------------
<S> <C> <C> <C> <C>
Net asset value, beginning
of year $1.000 $1.000 $1.000 $1.000
Net investment income* .083 .074 .062 .032
Dividends from net
investment income (.083) (.074) (.062) (.032)
----------- ---------- ---------- ----------
Net asset value, end of year $1.000 $1.000 $1.000 $1.000
=========== ========== ========== ==========
Total return 8.61%+ 7.68%+ 6.32%+ 3.25%+++
Net assets at end of year
(000s) $122,002 $63,711 $59,952 $19,725
Ratio of operating expenses
to average net assets* 0.75% 0.77% 0.80% 0.75%++
Ratio of net investment
income to average net
assets* 8.23% 7.44% 6.16% 5.33%++
*Reflects voluntary
assumption of fees or
expenses per share in each
year $.003 $.003 $.002 $.002
</TABLE>
<TABLE>
<CAPTION>
Class B Class C
----------------------------- -------------------------------
Year ended March 31 Year ended March 31
----------------------------- -------------------------------
1996 1995 1994** 1996 1995 1994**
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of year $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
Net investment income* .041 .032 .012 .051 .042 .021
Dividends from net
investment income (.041) (.032) (.012) (.051) (.042) (.021)
----- ----- ----- ----- ----- -------
Net asset value, end of year $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
===== ===== ===== ===== ===== =======
Total return 4.16%+ 3.27%+ 1.27%+++ 5.20%+ 4.31%+ 2.08%+++
Net assets at end of year
(000s) $11,884 $9,322 $3,028 $16,191 $7,886 $1,786
Ratio of operating expenses
to average net assets* 1.75% 1.75% 1.75%++ 0.75% 0.75% 0.75%++
Ratio of net investment
income to average net
assets* 4.06% 3.53% 1.54%++ 5.03% 4.66% 2.54%++
*Reflects voluntary
assumption of fees or
expenses per share in each
year $.003 $.004 $.007 $.003 $.003 $.006
</TABLE>
<TABLE>
<CAPTION>
Class D
-----------------------------------------------
Year ended March 31
-----------------------------------------------
1996 1995 1994**
<S> <C> <C> <C>
Net asset value, beginning
of year $1.000 $1.000 $1.000
Net investment income* .041 .032 .013
Dividends from net
investment income (.041) (.032) (.013)
--------- -------- ------
Net asset value, end of year $1.000 $1.000 $1.000
========= ======== ======
Total return 4.16%+ 3.28 %+ 1.30 %+++
Net assets at end of year
(000s) $1,964 $842 $174
Ratio of operating expenses
to average net assets* 1.75% 1.75 % 1.75 %++
Ratio of net investment
income to average net
assets* 4.08% 3.30 % 1.54 %++
*Reflects voluntary
assumption of fees or
expenses per share in each
year $.003 $.005 $.002
</TABLE>
**June 1, 1993 (commencement of share class designations) to March 31, 1994.
***Effective November 30, 1993, the Fund discontinued offering Class A shares
and any existing Class A shares were redesignated Class E shares. Net
investment income and dividends amounted to $.011 per share for Class A
shares during the period June 1, 1993 (commencement of share class
designations) to November 30, 1993.
++Annualized.
+Total return figures do not reflect any front-end or contingent deferred
sales charges. Total return would be lower if the Distributor and its
affiliates had not voluntarily assumed a portion of the Fund's expenses.
+++Represents aggregate return for the period without annualization and does
not reflect any front-end or contingent deferred sales charges. Total
return would be lower if the Distributor and its affiliates had not
voluntarily assumed a portion of the Fund's expenses
4
<PAGE>
Yield Information
For the seven-day period ended March 31, 1996, the simple annualized yield of
the Fund's Class B, Class C, Class D and Class E shares was 3.57%, 4.57%, 3.57%
and 4.57%, respectively; the compounded effective yield of the Fund's Class B,
Class C, Class D and Class E shares was 3.63%, 4.67%, 3.63% and 4.67%,
respectively; and the Fund had a weighted average maturity of investments of
39.6 days.
The Fund's Investments
The Fund's investment objective is to seek a high level of current income
consistent with preservation of capital and maintenance of liquidity by
investing in securities issued or guaranteed as to principal and interest by the
U.S. Government or its agencies or instrumentalities as well as high-quality,
short-term money market instruments such as bank certificates of deposit,
bankers' acceptances and such short-term corporate debt securities as commercial
paper and master demand notes. The Fund's investment objective is a fundamental
policy and may not be changed without the affirmative vote of the holders of a
majority of the Fund's outstanding voting securities.
The Fund invests only in U.S. dollar-denominated high quality securities as
described in this paragraph. At least 95% of the Fund's assets will consist of
government securities and "first tier" eligible securities as defined in Rule
2a-7 under the Investment Company Act of 1940, as amended (the "1940 Act"),
which have been (i) rated by at least two nationally recognized statistical
rating organizations (such as Standard & Poor's Corporation or Moody's Investors
Service, Inc.) in the highest rating category for short-term obligations (or so
rated by one such organization if it alone has rated the security), (ii) issued
by an issuer with comparable short-term obligations that are rated in the
highest rating category, or (iii) if unrated, determined to be comparable to
such securities. The balance of the Fund's assets will be invested in "second
tier" eligible securities as defined in Rule 2a-7. See the Statement of
Additional Information.
All securities in which the Fund invests have remaining maturities of 397
calendar days or less at the date of acquisition. The Fund also maintains a
dollar-weighted average portfolio maturity of 90 days or less. The Fund follows
these policies in seeking to maintain a constant net asset value of $1.00 per
share, although there is no assurance it can do so on a continuing basis.
Investors should recognize that in periods of declining interest rates the
inflow of net new money to the Fund from the continuous sale of its shares will
likely be invested in portfolio instruments producing lower yields than the
balance of the Fund's portfolio, thereby reducing the current yield of the Fund.
In periods of rising interest rates, the opposite can be true. Securities in
which the Fund invests may not produce as high a level of income as can be
obtained from securities with longer maturities or those having a lesser degree
of safety.
Corporate Obligations
The Fund may invest in U.S. dollar-denominated high quality corporate debt
securities such as commercial paper and bonds and long-term unsecured debentures
with remaining maturities of 397 calendar days or less. Such commercial paper
may be issued by domestic subsidiaries of foreign banks or bank holding
companies. The Investment Manager will monitor the value of the Fund's
investments in commercial paper, taking into account such factors as the
issuer's earning power, cash flow and other liquidity ratios. For further
information concerning debt securities ratings and permissible money market
investments of the Fund, see the Statement of Additional Information.
In making investments in qualifying foreign securities, up to 15% of the
Fund's total assets may be invested, subject to compliance with applicable
issuer diversification and quality limitations, in U.S. dollar-denominated
short-term Canadian Government and corporate money market instruments of the
type described above. See "Other Investment Practices--Foreign Banks and
Securities" herein.
Bank Obligations
Money market instruments of nongovernmental issuers may include but are not
limited to obligations of U.S. banks that are members of the Federal Deposit
5
<PAGE>
Insurance Corporation ("FDIC"), including their foreign branches (Eurodollars),
obligations of U.S. branches or agencies of foreign banks (Yankee dollars),
obligations of foreign branches of foreign banks and obligations of savings
banks or savings and loan associations that are members of the FDIC (including
certificates of deposit, U.S. dollar-denominated time deposits maturing in seven
days or less (provided that not more than 10% of the Fund's total assets will be
invested in time deposits with maturities of two to seven days) and bankers'
acceptances), provided that any such institution has, at the date of investment,
capital, surplus and undivided profits (as of the date of its most recently
published financial statements) in excess of $50,000,000.
U.S. Government and Related Obligations
Securities issued or guaranteed as to principal and interest by the U.S.
Government or its agencies or instrumentalities in which the Fund may invest
include (a) direct obligations of the U.S. Treasury, including bills, bonds and
notes; and (b) obligations issued or guaranteed as to principal and interest by
U.S. Government agencies or instrumentalities and supported by any of (i) the
full faith and credit of the U.S. Treasury (e.g., Government National Mortgage
Association participation certificates); (ii) the right of the issuer to borrow
a limited amount from the U.S. Treasury; (iii) the discretionary authority of
the U.S. Government to purchase certain obligations of the agency or
instrumentality (e.g., securities of the Federal National Mortgage Association);
or (iv) the credit of the agency or instrumentality (e.g., securities of a
Federal Home Loan Bank). The Fund may also invest in repurchase agreements with
respect to such instruments, subject to certain limitations, and purchase
securities on a "when issued" basis. See "Other Investment Practices."
Securities issued or guaranteed as to principal and interest by the U.S.
Government 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
currently 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. The interest and principal
payments on the U.S. Treasury securities underlying STRIPS are direct
obligations of the U.S. Government.
Limiting Investment Risk
In seeking to lessen investment risk, the Fund operates under certain investment
restrictions. Under these restrictions, the Fund may not invest in a security if
the transaction would result in (a) more than 5% of the Fund's total assets
being invested in any one issuer; (b) more than 5% of the Fund's total assets
being invested in securities of issuers (including predecessors) with less than
three years of continuous operations; or (c) more than 25% of the Fund's total
assets being invested in any one industry. None of the above restrictions
applies to investments in securities issued or guaranteed by the U.S. Government
or its agencies or instrumentalities, and the restriction in clause (c) does not
apply to investments in obligations of domestic banks. For this purpose, (i)
U.S. branches and agencies of foreign banks will be considered "domestic banks"
if it can be demonstrated that they are subject to the same regulation as U.S.
banks and (ii) foreign branches of U.S. banks will be considered "domestic
banks" if the U.S. parent is unconditionally liable in the event the foreign
branch fails to pay on the instrument for any reason.
The Fund may not invest more than 10% of its total assets in illiquid
securities, including securities restricted as to resale (limited to 5% of total
assets), repurchase agreements extending for more than seven days and other
securities which are not readily marketable. The Fund will not make loans except
that it may purchase debt obligations, including money market instruments,
directly from the issuer thereof or in the open market and may engage in
repurchase transactions collateralized by obligations of the U.S. Government and
its agencies and instrumentalities.
The restrictions set forth above may be changed only by a vote of the holders
of a majority of the
6
<PAGE>
Fund's outstanding voting securities. For further discussion of these and other
investment restrictions including nonfundamental restrictions which may be
changed without a shareholder vote, see the Statement of Additional Information.
Information on the Purchase of Shares, Redemption of Shares and Shareholder
Services is set forth on pages 7 to 19 below.
The Fund is available for investment by many kinds of investors including
participants investing through 401(k) or other retirement plan sponsors,
employees investing through savings plans sponsored by employers, Individual
Retirement Accounts ("IRAs"), trusts, corporations, individuals, etc. The
applicability of the general information and administrative procedures set
forth below accordingly will vary depending on the investor and the
recordkeeping system established for a shareholder's investment in the Fund.
Participants in 401(k) and other plans should first consult with the
appropriate person at their employer or refer to the plan materials before
following any of the procedures below. For more information or assistance,
anyone may call 1-800-562-0032.
Purchase of Shares
Methods of Purchase
Through Dealers
Shares of the Fund are continuously offered through securities dealers who have
entered into sales agreements with the Distributor at a price which is expected
to be maintained at $1.00 per share plus the applicable sales charge. Purchases
through dealers are confirmed at the offering price plus the applicable sales
charge next determined after the order is duly received by State Street Research
Shareholder Services ("Shareholder Services"), a division of State Street
Research Investment Services, Inc., from the dealer. ("Duly received" for
purposes herein means in accordance with the conditions of the applicable method
of purchase as described below.) The dealer is responsible for transmitting the
order promptly to Shareholder Services in order to permit the investor to obtain
the current price. See "Purchase of Shares--Net Asset Value" herein.
Purchases made by check are normally effective as of the business day after
the check is received by Shareholder Services and delivered by Shareholder
Services to the transfer agent and dividend paying agent, State Street Bank and
Trust Company (the "Transfer Agent"), and accrue dividends commencing the
business day after the effective date, subject to collection conditions. As more
fully described below, certain large purchases made with Federal Funds received
by 12 noon Boston time on any business day will normally be effective and accrue
dividends commencing that day. Other purchases made with Federal Funds received
after 12 noon and before 4 P.M. Boston time on any business day will normally be
effective that day and accrue dividends commencing the next business day.
By Mail
Initial investments in the Fund may be made by mailing or delivering to the
investor's securities dealer a completed Application (accompanying this
Prospectus), together with a check for the total purchase price payable to the
Fund. The dealer must forward the Application and check in accordance with the
instructions on the Application.
Additional shares may be purchased by mailing to Shareholder Services a check
payable to the Fund in the amount of the total purchase price together with any
one of the following: (i) an Application; (ii) the stub from a shareholder's
account statement; or (iii) a letter setting forth the name of the Fund, the
class of shares and the shareholder's account name and number. Shareholder
Services will deliver the purchase order to the Transfer Agent.
If a 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 cancelled.
By Wire
An investor may purchase shares by wiring Federal Funds of not less than $5,000
to State Street Bank
7
<PAGE>
and Trust Company, which also serves as the Trust's custodian (the "Custodian"),
as set forth below. Prior to making an investment by wire, an investor must
notify Shareholder Services at 1-800-521-6548 and obtain a control number and
instructions. Following such notification, Federal Funds should be wired through
the Federal Reserve System to:
ABA #011000028
State Street Bank and Trust Company
Boston, MA
BNF=State Street Research Money Market Fund and class of shares
(B, C, D or E)
AC=99029761
OBI=Shareholder Name
Shareholder Account Number
Control #K (assigned by State Street
Research Shareholder Services)
In order for an investment to be effective on the same day Federal Funds are
received and also accrue dividends for that day, (i) the investor must notify
Shareholder Services by telephone by 9:30 A.M. Boston time on that day of the
investor's intention to make such investment for a minimum amount of $25,000;
and (ii) the Federal Funds must be received by 12 noon Boston time that same
day. To facilitate the timely processing of such investments, an investor may
establish special bank accounts and make other direct arrangements with the
Custodian, subject to related charges by the Custodian payable directly by the
investor. Transactions processed through such accounts are only subject to the
minimum amounts noted under the subcaption "Minimum Investment" below and will
be treated as the equivalent of a Federal Funds wire for purposes of making
investments and remitting redemption proceeds hereunder. The use of such special
accounts may be terminated by the Fund, and special policies, procedures and
limitations applicable to such special accounts may be adopted without notice at
any time. Contact the Distributor for further information.
Wire investments not made as provided above will nonetheless be effective on
the same day if (i) the investor notifies Shareholder Services of his or her
intention to make such investment by 12 noon Boston time on the day of his or
her investment; and (ii) the wire is received by 4 P.M. Boston time that same
day. Dividends on such wire investments will commence on the business day after
the effective date of the purchase.
An investor making an initial investment by wire must promptly complete the
Application accompanying this Prospectus and deliver it to his or her securities
dealer, who should forward it as required. No redemptions will be effected until
the Application has been duly processed.
The Fund may in its discretion discontinue, suspend or change the practice of
accepting orders by any of the methods described above. Orders for the purchase
of shares are subject to acceptance by the Fund. The Fund reserves the right to
suspend the sale of shares or to reject any purchase order, including orders in
connection with exchanges, for any reason.
Minimum Investment
Class of Shares
-------------------------------
B C D E
----- -- ----- -------
Minimum Initial Investment
By Wire $5,000 (a) $5,000 $5,000
IRAs $2,000 (a) $2,000 $2,000
By Investamatic $1,000 (a) $1,000 $1,000
All other $2,500 (a) $2,500 $2,500
Minimum Subsequent Investment
By Wire $5,000 (a) $5,000 $5,000
IRAs $50 (a) $50 $50
By Investamatic $50 (a) $50 $50
All other $50 (a) $50 $50
(a) Special conditions apply; contact the Distributor.
The Fund reserves the right to vary the minimums for initial or subsequent
investments as in the case of, for example, exchanges and investments under
various retirement and employee benefit plans, sponsored arrangements involving
group solicitations of the members of an organization, or other investment plans
for reinvestment of dividends and distributions or for periodic investments
(e.g., Investamatic Check Program).
8
<PAGE>
Alternative Purchase Program
General
Alternative classes of shares permit investors to exchange their shares of an
Eligible Fund for shares of the corresponding class of the Fund. Only Class C
and Class E shares will be issued to investors purchasing shares of the Fund
other than by an exchange from an Eligible Fund. Class C and Class E shares
do not pay any distribution or service fees.
As described in greater detail below, securities dealers are paid differing
amounts of commission and other compensation depending on which class of shares
they sell.
The major differences among the various classes of shares are as follows:
<TABLE>
<CAPTION>
CLASS B CLASS C CLASS D CLASS E
---------------------------- -------- -------------------------- ----------
<S> <C> <C> <C> <C>
Sales Charges Contingent deferred sales None Contingent deferred None
charge of 5% to 2% applies sales charge of 1%
to any shares redeemed applies to any shares
within first five years redeemed within one year
following their purchase; following their purchase
no contingent deferred
sales charge after five
years
Distribution Fee 0.75% for first eight None 0.75% each year None
years; Class B shares
convert automatically to
Class E shares after eight
years
Service Fee 0.25% each year None 0.25% each year None
Initial 4% None 1% None
Commission
Received by
Selling
Securities
Dealer
</TABLE>
In deciding which class of shares to purchase, the investor should consider
the amount of the investment, the length of time the investment is expected to
be held, and the ongoing service fee and distribution fee, among other factors.
Class B shareholders pay no initial sales charge, but a contingent deferred
sales charge of up to 5% generally applies to shares redeemed within five years
of purchase. Class D shareholders also pay no initial sales charge, but a
contingent deferred sales charge of 1% generally applies to redemptions made
within one year of purchase. For Class B and Class D shareholders, therefore,
the entire purchase amount is immediately invested in the Fund.
Class B and Class D shares are assessed an annual service fee of 0.25% of
average daily net assets. Class B shares are assessed an annual distribution fee
of 0.75% of daily net assets for an eight-year period following the date of
purchase and are then automatically converted to Class E shares. Class D shares
are assessed an annual distribution fee of 0.75% of daily net assets for as long
as the shares are held. The prospective investor should consider these fees plus
the initial or contingent deferred sales charges in estimating the costs of
investing in the various classes of the Fund's shares.
9
<PAGE>
Only certain employee benefit plans and large institutions may make investments
in Class C shares.
Some of the service and distribution fees are allocated to dealers (see
"Distribution Plan" below). In addition, the Distributor will, at its expense,
provide additional cash and noncash incentives to securities dealers that sell
shares. Such incentives may be extended only to those dealers that have sold or
may sell significant amounts of shares and/or meet other conditions established
by the Distributor; for example, the Distributor may sponsor special promotions
to develop particular distribution channels or to reach certain investor groups.
The Distributor may also compensate brokers for maintaining investments over a
period of years. The incentives may include merchandise and trips to and
attendance at sales seminars at resorts.
Class B Shares--Contingent Deferred Sales Charges
Class B shares are offered solely in connection with exchanges from Eligible
Funds.
Contingent Deferred Sales Charges
The public offering price of Class B shares is the net asset value per share
next determined after the purchase order is duly received, as defined herein.
No sales charge is imposed at the time of purchase; thus the full amount of
the investor's purchase payment will be invested in the Fund. However, a
contingent deferred sales charge may be imposed upon redemptions of Class B
shares as described below.
The Distributor will pay securities dealers at the time of sale a 4%
commission for selling Class B shares. The proceeds of the contingent deferred
sales charge and the distribution fee are used to offset distribution expenses
and thereby permit the sale of Class B shares without an initial sales charge.
Class B shares that are redeemed within a five-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 amount of
any applicable contingent deferred sales charge will be calculated by
multiplying the net asset value of such shares at the time of redemption or at
the time of purchase, whichever is lower, by the applicable percentage shown in
the table below:
Contingent Deferred
Sales Charge
As A Percentage Of
Net Asset Value
Redemption During At Redemption
- ------------------------------------------ ---------------------
1st Year Since Purchase 5%
2nd Year Since Purchase 4
3rd Year Since Purchase 3
4th Year Since Purchase 3
5th Year Since Purchase 2
6th Year Since Purchase and Thereafter None
In determining the applicability and rate of any contingent deferred sales
charge, it will be assumed that a redemption of Class B 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 the shareholder for the longest period of
time. The holding period for purposes of applying a contingent deferred sales
charge on Class B shares of the Fund acquired through an exchange from another
Eligible Fund, as described below, will be measured from the date that such
shares were initially acquired in the other Eligible Fund, and Class B shares
being redeemed will be considered to represent, as applicable, capital
appreciation or dividend and capital gains distribution reinvestments in such
other Eligible Fund. ("Eligible Funds" include the Fund and other funds so
designated by the Distributor from time to time.) 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. The amount of any contingent deferred
sales charge will be paid to the Distributor.
Contingent Deferred Sales Charge Waivers
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
10
<PAGE>
specific age in an amount which represents the minimum distribution required at
such age under Section 401(a)(9) of the Internal Revenue Code for retirement
accounts or plans (e.g., age 70-1/2 for IRAs 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 IRA. (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 described above at any time; for example, the Fund may
limit the application of multiple waivers and establish other conditions for
employee benefit plans.
Conversion of Class B Shares to Class E Shares
A shareholder's Class B shares, including all shares received as dividends or
distributions with respect to such shares, will automatically convert to
Class E 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 E 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.
Class C Shares--Institutional; No Sales Charge
The purchase price of a Class C share of the Fund is the Fund's per share net
asset value next determined after the purchase order is duly received, as
defined herein. No sales charge is imposed at the time of purchase or
redemption. The Fund will receive the full amount of the investor's purchase
payment.
In general, Class C shares are only available for new investments by certain
large institutions, and employee benefit plans which acquire shares through
programs or products sponsored by Metropolitan Life Insurance Company
("Metropolitan") and/or its affiliates, for which Class C shares have been
designated. Information on the availability of Class C shares and further
conditions and limitations is available from the Distributor.
Class C shares may have also been issued directly or through exchanges to
those shareholders of the Fund or other Eligible Funds who previously held
shares not subject to any future sales charge or service fees or distribution
fees.
Class D Shares--Spread Sales Charges
Class D shares are offered solely in connection with exchanges from Eligible
Funds.
The purchase price of a Class D share of the Fund is the Fund's per share
net asset value next determined after the purchase order is duly received, as
defined herein. No sales charge is imposed at the time of purchase; thus the
full amount of the investor's purchase payment will be invested in the Fund.
Class D shares are subject to a 1% contingent deferred sales charge on any
portion of the purchase redeemed within one year of the sale. The contingent
deferred sales charge will be 1% of the lesser of the net asset value of the
shares at the time of purchase or at the time of redemption. The Distributor
pays securities dealers a 1% commission for selling Class D shares at the
time of purchase. The proceeds of the contingent deferred sales charge and
the distribution fee are used to offset distribution expenses and thereby
permit the sale of Class D shares without an initial sales charge.
Class D shares that are redeemed within one year after purchase will not
be subject to the 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. In addition,
the contingent deferred sales charge will be waived for certain other
redemptions as described under "Contingent Deferred Sales Charge Waivers"
above (as otherwise applicable to Class B shares). 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. The amount of any contingent deferred sales charge will be paid
to the Distributor.
Class E Shares--General; No Sales Charge
The purchase price of a Class E share of the Fund is the Fund's per share net
asset value next determined
11
<PAGE>
after the purchase order is duly received, as defined herein. No sales charge is
imposed at the time of purchase or redemption. The Fund will receive the full
amount of the investor's purchase payment.
Class E shares may have also been issued directly or through exchanges to
certain shareholders of the Fund or other Eligible Funds who previously held
shares which are not subject to any future sales charge or service fees or
distribution fees.
Net Asset Value
The Fund's per share net asset values are determined Monday through Friday as of
12 noon and as of the close of the NYSE exclusive of days on which the NYSE is
closed. The NYSE ordinarily closes at 4 P.M. New York City time. Net asset value
per share is calculated by adding the value of all instruments and other assets
of the Fund, deducting its actual and accrued liabilities, and dividing the
difference by the number of shares outstanding.
The Fund's portfolio instruments are valued on the basis of the amortized
cost valuation method. This involves valuing an instrument initially at its cost
and thereafter assuming a constant amortization of premium or accretion of
discount to maturity, regardless of the impact of fluctuating interest rates on
the market value of the instrument. For this purpose securities whose interest
rates are adjusted periodically to market rates will in general be deemed to
have maturities equal to the period remaining until the next interest rate
adjustment, subject to applicable limitations under Rule 2a-7 under the 1940
Act. It is the intention of the Fund to maintain a per share net asset value of
$1.00, although this cannot be assured. See "Net Asset Value" in the Statement
of Additional Information.
Distribution Plan
The Fund has adopted a Plan of Distribution Pursuant to Rule 12b-1 (the
"Distribution Plan") in accordance with the regulations under the 1940 Act.
Under the provisions of the Distribution Plan, the Fund makes payments to the
Distributor based on an annual percentage of the average daily value of the
net assets of each class of shares as follows:
Class Service Fee Distribution Fee
- -------- ------------ -------------------
B 0.25% 0.75%
C None None
D 0.25% 0.75%
E None None
Some or all of the service fees are used to pay or reimburse securities
dealers (including securities dealers that are affiliates of the Distributor) or
others for personal services and/or the maintenance or servicing 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 of shareholder accounts by such dealers. Dealers who have sold Class
B and Class D 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 securities 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 securities
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.
12
<PAGE>
A rule of the National Association of Securities Dealers, Inc. ("NASD") limits
the annual expenditures which 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 which 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 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 by the Trustees of the
Trust.
Redemption of Shares
Shareholders may redeem all or any portion of their accounts on any day the NYSE
is open for business. Redemptions will be effective at the net asset value per
share next determined (see "Purchase of Shares--Net Asset Value" herein) after
receipt of the redemption request, in accordance with the requirements described
below, by Shareholder Services and delivery of the request by Shareholder
Services to the Transfer Agent. To allow time for the clearance of checks used
for the purchase of any shares which are tendered for redemption shortly after
purchase, the remittance of the redemption proceeds for such shares could be
delayed for 15 days or more after the purchase. Shareholders who anticipate the
need for immediate access to their investments should, therefore, purchase
shares by wire. Except as noted, redemption proceeds from the Fund are normally
remitted within seven days after receipt of the redemption request by the Fund
and any necessary documents in good order.
Methods of Redemption
Request By Mail
A shareholder may write to request redemption of shares, with proceeds to be
mailed to the shareholder or wired to a predesignated bank account (see
"Proceeds By Wire" below), by sending to State Street Research Shareholder
Services, P.O. Box 8408, Boston, Massachusetts 02266-8408: (1) a written request
for redemption signed by the registered owner(s) of the shares, exactly as the
account is registered; (2) an endorsed stock power in good order with respect to
the shares or, if issued, the share certificates for the shares endorsed for
transfer or accompanied by an endorsed stock power; (3) any required signature
guarantees (see "Redemption of Shares--Signature Guarantees" below); and (4) any
additional documents which may be required for redemption in the case of
corporations, trustees, etc., such as certified copies of corporate resolutions,
governing instruments, powers of attorney, and the like. The Transfer Agent will
not process requests for redemption until it has received all necessary
documents in good order. A shareholder will be notified promptly if a redemption
request cannot be accepted. Shareholders having any questions about the
requirements for redemption should call Shareholder Services toll-free at
1-800-562-0032.
Request By Telephone
Shareholders may request redemption by telephone with proceeds to be transmitted
by check or by wire (see "Proceeds By Wire" below). A shareholder can request a
redemption for $50,000 or less to be transmitted by check. Such check for the
proceeds will be made payable to the shareholder of record and will be mailed to
the address of record. There is no fee for this service. It is not available if
the address of record has been changed within 30 days of the redemption request.
The Fund may revoke or suspend the telephone redemption privilege at any time
and without notice. See "Shareholder Services--Telephone Services" for a
discussion of the conditions and risks associated with Telephone Privileges.
Request By Check (Class E Shares Only)
Shareholders of Class E shares of the Fund may redeem shares by checks drawn on
State Street Bank and Trust Company. Checks may be made payable to the order of
any person or organization designated by the shareholder and must be for amounts
of at least $500. Shareholders will continue to earn dividends on the shares to
be redeemed until the check clears. There is currently no charge associated with
redemption of shares by check. Checkbooks are supplied for a $2 fee. Checks will
be sent only to the registered owner at the address of record. A $10 fee will be
13
<PAGE>
charged against an account in the event a redemption check is presented for
payment and not honored pursuant to the terms and conditions established by
State Street Bank and Trust Company.
Shareholders can request the checkwriting privilege by completing the
signature card which is part of the Application. In order to arrange for
redemption-by-check after an account has been opened, a revised Application
with signature card and signatures guaranteed must be sent to Shareholder
Services. Cancelled checks will be returned to shareholders at the end of each
month.
The redemption-by-check service is subject to State Street Bank and Trust
Company's rules and regulations applicable to checking accounts (as amended from
time to time), and is governed by the Massachusetts Uniform Commercial Code. All
notices with respect to checks drawn on State Street Bank and Trust Company must
be given to State Street Bank and Trust Company. Stop payment instructions with
respect to checks must be given to State Street Bank and Trust Company by
calling 1-617-985-8543. Shareholders may not close out an account by check.
Proceeds By Wire
Upon a shareholder's written request or by telephone if the shareholder has
Telephone Privileges (see "Shareholder Services--Telephone Services" herein),
the Trust's custodian will wire redemption proceeds to the shareholder's
predesignated bank account. If a telephone redemption request for a minimum of
$25,000 is received by 9:30 A.M., redemption proceeds will normally be wired
that day. All other redemptions will normally be wired on the business day after
receipt of the redemption request. In any event, redemption proceeds will be
wired not later than seven days, in most cases, after receipt of the redemption
request and all necessary documents. To make the request, the shareholder should
call 1-800-521-6548. A $7.50 charge against the shareholder's account will be
imposed for each wire redemption. This charge is subject to change without
notice. The shareholder's bank may also impose a charge for receiving wires of
redemption proceeds. The minimum redemption by wire is $1,000.
The Fund has reserved the right to change, modify or terminate the services
described above at any time.
Additional Information
Because of the relatively high cost of maintaining small shareholder accounts,
the Fund reserves the right to involuntarily 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 involuntary 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.
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 may by order permit for
the protection of investors; and (b) the payment of redemption proceeds may be
postponed as otherwise provided under "Redemption of Shares" herein.
14
<PAGE>
Signature Guarantees
To protect shareholder accounts, the Transfer Agent, the Fund, the Investment
Manager and the Distributor from possible fraud, signature guarantees are
required for certain redemptions. Signature guarantees help the Transfer
Agent to determine that the person who has authorized a redemption from the
account is, in fact, the shareholder. Signature guarantees are required for,
among other things: (1) written requests for redemptions for more than
$50,000; (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; (4)
requests to transfer the registration of shares to another owner; and (5)
authorizations to establish the checkwriting privilege. 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. Please contact Shareholder Services at 1-800-562-0032
for specific requirements relating to your account.
Shareholder Services
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. Share
certificates will not be issued. 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 by wire or by
mailing a check payable to the Fund to Shareholder Services under the
terms set forth above under "Purchase of Shares."
2. The following methods of receiving dividends from investment income and
distributions from capital gains (if any) 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. 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 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
Shareholder Services. Dividends and distributions are reinvested at net asset
value without a sales charge.
Exchange Privilege
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 B and Class D 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. Exchanges of Class
E shares of the Fund into Class A shares of 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
15
<PAGE>
be payable upon disposition of any acquired Class A, Class B and Class D shares,
the holding period of the redeemed shares is "tacked" to the holding period of
the acquired shares. The period any Class E shares are held is not 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, the acquisition of Class B or Class D
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.
For the convenience of the shareholders who have Telephone Privileges, the
Fund permits exchanges by telephone request from either the shareholder or his
or her dealer. Shares may be exchanged by telephone provided that the
registration of the two accounts is the same. The toll-free number for exchanges
is 1-800-521-6548. See "Telephone Services" herein for a discussion of
conditions and risks associated with Telephone Privileges.
The exchange privilege may be exercised only in those states where shares of
the relevant other Eligible Fund may legally be sold. For tax purposes, each
exchange actually represents the sale of shares of one fund and the purchase of
shares of another. Accordingly, exchanges may produce a capital gain or loss for
tax purposes. 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 as
the existing account, unless Shareholder Services 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.
If an exchange request in good order is received by Shareholder Services and
delivered by Shareholder Services 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
Shareholder Services.
Reinvestment Privilege
A shareholder of the Fund who has redeemed shares or had shares repurchased at
his or her request may reinvest any portion or all 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.
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 Shareholder
Services of such shareholder's written purchase
16
<PAGE>
request and delivery of the request by Shareholder Services 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. No charge is
imposed by the Fund for such reinvestments; however, dealers may charge fees in
connection with the reinvestment privilege. The reinvestment privilege may be
exercised with respect to an Eligible Fund only in those states where shares of
the relevant other Eligible Fund may legally be sold.
Investment Plans
The Investamatic Check Program is available to Class E shareholders. Under this
Program, shareholders may make regular investments by authorizing withdrawals
from their bank accounts each month or quarter on the Application available from
Shareholder Services.
The Distributor also offers IRAs and retirement plans, including prototype
and other employee benefit plans for employees, sole proprietors, partnerships
and corporations. Details of these investment plans and their availability may
be obtained from securities dealers or from Shareholder Services.
Systematic Withdrawal Plan
A shareholder who owns Class C or Class E shares with a value of $5,000 or
more, or Class B or Class D 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 (if any) 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 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 Plan was initiated, whichever is higher.
Expenses of the Plan are borne by the Fund. A participating shareholder may
withdraw from the Plan, and the Fund may terminate the Plan at any time on
written notice. Purchase of additional shares while a shareholder is receiving
payments under a Plan is ordinarily disadvantageous because of duplicative sales
charges. For this reason, a shareholder may not simultaneously participate in
the Investamatic Check Program and the Systematic Withdrawal Plan in connection
with shares which are subject to an initial or contingent deferred sales charge.
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 investment is
made is initially funded with the requisite minimum amount. The number of shares
purchased will be determined as of the dividend payment date. The Dividend
Allocation Plan is subject to state securities law requirements, to suspension
at any time, and to such policies, limitations and restrictions, such as may be
applicable to street name or master accounts, that may be adopted from time to
time.
Automatic Bank Connection
A shareholder may elect, by participating in the Fund's Automatic Bank
Connection ("ABC"), to have dividends and other distributions, including
Systematic Withdrawal Plan payments, automatically deposited in the
shareholder's bank account by electronic funds transfer. Some contingent
deferred sales charges may apply. See "Systematic Withdrawal Plan" herein.
Reports
Reports for the Fund will be sent to shareholders of record at least
semiannually. These reports will include a list of the securities owned by the
Fund as well as the Fund's financial statements.
17
<PAGE>
Telephone Services
The following telephone privileges ("Telephone Privileges") can be used:
(1) the privilege allowing the shareholder to make telephone redemptions
for amounts up to $50,000 to be mailed to the shareholder's address of
record is available automatically;
(2) the privilege allowing the shareholder or his or her dealer to make
telephone exchanges is available automatically;
(3) the privilege allowing the shareholder to make telephone redemptions
for amounts over $1,000, to be remitted by wire to the shareholder's
predesignated bank account, is available by election on the
Application accompanying this Prospectus. A current shareholder who
did not previously request such telephone wire privilege on his or her
original Application may request the privilege by completing a
Telephone Redemption-by-Wire Form which may be obtained by calling
1-800-562-0032. The Telephone Redemption-by-Wire Form requires a
signature guarantee; and
(4) the privilege allowing the shareholder to make telephone purchases or
redemptions, transmitted via the Automated Clearing House system, into
or from the shareholder's predesignated bank account, is available
upon completion of the requisite initial documentation. For details
and forms, call 1-800-562-0032. The documentation requires a signature
guarantee.
A shareholder may decline the automatic Telephone Privileges set forth in (1)
and (2) above by so indicating on the Application accompanying this Prospectus.
A shareholder may discontinue any Telephone Privilege at any time by advising
Shareholder Services that the shareholder wishes to discontinue the use of such
privileges in the future.
Unless such Telephone Privileges are declined, a shareholder is deemed to
authorize Shareholder Services and the Transfer Agent to: (1) act upon the
telephone instructions of any person purporting to be the shareholder to redeem,
or purporting to be the shareholder or the shareholder's dealer to exchange,
shares from any account for which such services have been authorized; 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. None of the Fund, the other Eligible Funds, the Transfer Agent, the
Investment Manager or 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.
Shareholders may redeem or exchange shares by calling toll-free
1-800-521-6548. Although it is unlikely, during periods of extraordinary market
conditions, a shareholder may have difficulty in reaching Shareholder Services
at such telephone number. In that event, the shareholder should contact
Shareholder Services at 1-800-562-0032, 1-617-357-7805 or otherwise at its main
office at One Financial Center, Boston, Massachusetts 02111-2690.
Shareholder Account Inquiries:
Please call 1-800-562-0032
Call this number for assistance in answering general questions on your
account, including account balance, available shareholder services, statement
information and performance of the Fund. Account inquiries may also be made in
writing to State Street Research Shareholder Services, P.O. Box 8408, Boston,
Massachusetts 02266-8408. A fee of up to $10 will be charged against an account
for providing additional account transcripts or photocopies of paid redemption
checks or for researching records in response to special requests.
Shareholder Telephone Transactions:
Please call 1-800-521-6548
Call this number for assistance in purchasing shares by wire and for telephone
redemptions or telephone
18
<PAGE>
exchange transactions. Shareholder Services will require some form of personal
identification prior to acting upon instructions received by telephone. Written
confirmation of each transaction will be provided.
The Fund and its Shares
The Fund was organized in 1985 as a series of State Street Research Money Market
Trust, a Massachusetts business trust. The Trustees have authorized shares of
the Fund to be issued in four classes: Class B, Class C, Class D and Class E
shares. The Trust is registered with the Securities and Exchange Commission (the
"Commission") as an open-end management investment company. The fiscal year end
of the Fund is March 31.
Except for those differences between the classes of shares described below
and elsewhere in the Prospectus, 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. In the future, certain classes may be
redesignated, for administrative purposes only, to conform to standard class
designations and common usage of terms which may develop in the mutual fund
industry. For example, Class C shares may be redesignated as Class Y shares and
Class D shares may be redesignated as Class C shares. Any redesignations would
not affect any substantive rights respecting the 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 B and Class D 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
result in different net asset values and dividends. The different classes of
shares of the Fund also have different exchange privileges.
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 shares of the Fund 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 will ordinarily be no shareholder meetings
unless required by the 1940 Act. Except as otherwise provided under said 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 of 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.
As of June 30, 1996, Metropolitan was the record and/or beneficial owner,
directly or indirectly through its subsidiaries or affiliates, of
approximately 32.8%
19
<PAGE>
of the outstanding Class E shares of the Fund, and may be deemed to be in
control of such Class E shares of the Fund. 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, such as any
Distribution Plan for a given class.
Management of the Fund
Under the provisions of the Master Trust Agreement and the laws of
Massachusetts, responsibility for the management and supervision of the Fund
rests with the Trustees.
The Fund's investment manager is State Street Research & Management Company.
The Investment Manager is charged with the overall responsibility for managing
the investments and business affairs of the Fund, subject to the authority of
the Board of Trustees.
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 Investment Manager and the Distributor are indirect wholly owned
subsidiaries of Metropolitan and are located at One Financial Center, Boston,
Massachusetts 02111-2690.
The Investment Manager has entered into an Advisory Agreement with the Trust
pursuant to which investment research and management, administrative services,
office facilities and personnel are provided for the Fund in consideration of a
fee from the Fund.
Under its Advisory Agreement with the Trust, the Investment Manager receives
a monthly investment advisory fee equal to 0.50% (on an annual basis) of the
average daily value of the net assets of the Fund. The Fund bears all costs of
its operation other than those incurred by the Investment Manager under the
Advisory Agreement. In particular, the Fund pays, among other expenses,
investment advisory fees, certain distribution expenses under the Fund's
Distribution Plan and the compensation and expenses of the Trustees who are not
otherwise currently affiliated with the Investment Manager or any of its
affiliates. The Investment Manager will reduce its management fee payable by the
Fund up to the amount of any expenses (excluding permissible items, such as
brokerage commissions, Rule 12b-1 payments, interest, taxes and litigation
expenses) paid or incurred in any year in excess of the most restrictive expense
limitation imposed by any state in which the Fund sells shares, if any. The
Investment Manager compensates Trustees of the Trust if such persons are
employees or affiliates of the Investment Manager or its affiliates.
Subject to the policy of seeking best overall price and execution, sales of
shares of the Fund may be considered by the Investment Manager in the selection
of broker or dealer firms for the Fund's portfolio transactions.
The Investment Manager has a Code of Ethics governing personal securities
transactions of certain of its employees; see the Statement of Additional
Information.
Dividends and Distributions; Taxes
The Fund qualified and elected to be treated as a regulated investment company
under Subchapter M of the Internal Revenue Code for its most recent fiscal year
and intends to qualify as such in future fiscal years, although it cannot give
complete assurance that it will do so. As long as it so qualifies and satisfies
certain distribution requirements, it will not be subject to federal income tax
on its taxable income (including capital gains, if any) distributed to its
shareholders. Consequently, the Fund intends to distribute annually to its
shareholders substantially all of
20
<PAGE>
its net investment income and any capital gain net income (capital gains net
of capital losses).
The Fund declares dividends from its net investment income on each day on
which it is open for business and pays dividends monthly. Unless a shareholder
chooses a different available distribution method, dividends will be
automatically reinvested in additional shares of the Fund at net asset value. A
shareholder may change the method of receiving dividends at any time by
notifying Shareholder Services. The Fund will provide its shareholders of record
with annual information on a timely basis concerning the federal tax status of
dividends and distributions during the preceding calendar year.
Dividends paid by the Fund from taxable net investment income and
distributions of any net short-term capital gains, whether paid in cash or
reinvested in additional shares, will be taxable for federal income tax purposes
to shareholders as ordinary income. Distributions of net capital gains (the
excess of net long-term capital gains over net short-term capital losses), if
any, which are designated as capital gains distributions, whether paid in cash
or reinvested in additional shares, will be taxable for federal income tax
purposes to shareholders as long-term capital gains, regardless of how long
shareholders have held their shares.
Dividends and other distributions and proceeds of redemption of Fund shares
paid to individuals and other nonexempt payees will be subject to a 31% federal
backup withholding tax if the Transfer Agent is not provided with the
shareholder's correct taxpayer identification number and certification that the
shareholder is not subject to such backup withholding.
The foregoing discussion relates only to generally applicable federal income
tax provisions in effect as of the date of this Prospectus. Dividends from the
Fund that represent interest income from U.S. Government securities may not be
tax-exempt at some state and local levels. Therefore, prospective shareholders
are urged to consult their own tax advisers regarding tax matters, including
state and local tax consequences.
Other Investment Practices
Foreign Banks and Securities
The Fund may elect to concentrate its investments in obligations of domestic
banks, including certain U.S. branches and agencies of foreign banks and certain
foreign branches of U.S. banks as described under "Limiting Investment Risk."
The Fund expects that investments, if any, in such obligations will consist
principally of obligations which are issued by U.S. branches and agencies of
foreign banks for sale in the U.S., and the Investment Manager believes that the
risks described below are reduced in the case of such bank obligations. The Fund
also may invest up to 25% of its total assets in obligations of foreign banks
located abroad and obligations of foreign branches of domestic banks not having
a guarantee of the domestic bank.
The Fund may invest up to 15% of its total assets in money market instruments
of issuers organized and located in Canada payable in U.S. dollars as described
under "The Fund's Investments," subject to the issuer diversification and other
restrictions described under "Limiting Investment Risk." Securities of such
issuers guaranteed as to principal and interest by a U.S. parent and otherwise
meeting applicable quality standards will not be included for purposes of
calculating the 15% limitation.
Investing in foreign branches of U.S. banks, U.S. branches of foreign banks,
foreign branches of foreign banks and U.S. agencies of foreign banks may involve
risks. These risks may include future unfavorable political and economic
developments, possible withholding or confiscatory taxes, seizure of foreign
deposits, currency controls, interest limitations and other governmental
restrictions which might affect payment of principal or interest, and possible
difficulties pursuing or enforcing claims against banks located outside the U.S.
Additionally, foreign issuers are not generally subject to uniform accounting,
auditing and financial reporting standards or other regulatory requirements and
practices comparable to domestic issuers, and there may be less public
information available about foreign banks and their branches and agencies.
21
<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 (see
"The Fund's Investments--U.S. Government and Related Obligations" above).
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 extending for more than seven days when combined with any other
illiquid securities held by the Fund will be limited to 10% of the Fund's total
assets.
When-Issued Securities
The Fund may purchase "when-issued" debt 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 up to a month
or more; during this period interest will not accrue. A frequent form of
when-issued trading occurs in the U.S. Treasury market when dealers begin to
trade a new issue of bonds or notes shortly after a Treasury financing is
announced, but prior to the actual sale of the securities. 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 account for the Fund when it 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.
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 B,
Class C, Class D or Class E shares to that 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 the Consumer Price Index and/or to appropriate rankings or
averages such as those compiled by Lipper Analytical Services, Inc. for the
Money Market Instrument Fund category or to those compiled by Morningstar,
Inc., Money Magazine, Business Week, Forbes Magazine, The Wall Street
Journal, Fortune Magazine, Investor's Daily or Donoghue's Money Fund Report.
The current yield of the Fund quoted at any time represents the amount being
earned on a current basis, based on dividends declared daily from net investment
income, and is a function of the types of instruments in the Fund's portfolio,
their quality and length of maturity, and the Fund's operating expenses. The
length of maturity for the portfolio is the average dollar-weighted maturity of
the portfolio. This means that the portfolio has an average maturity of a stated
number of days for all of its issues. The calculation is weighted by the
relative value of each investment. Net investment income consists of interest
income accrued on the portfolio assets of the Fund, less all expenses and
liabilities of the Fund chargeable against such income including all recurring
charges. Recurring and nonrecurring charges for optional services which only
certain shareholders elect and which involve nominal fees, such as the $7.50 fee
for remittance of redemption proceeds by wire, are not taken into account. The
Fund's simple annualized yield is its net investment income expressed as a
percentage of assets on an annualized basis for a seven-day period. The Fund's
compounded effective yield is calculated similarly except, when annualized, the
income earned is assumed to be reinvested.
22
<PAGE>
The yield of the Fund is computed separately for each class of shares and
fluctuates daily as the income earned on the investments of the Fund
fluctuates. Accordingly, there is no assurance that the yield quoted on any
given occasion will remain in effect for any period of time. There is also no
guarantee that the net asset value or stated rate of return will remain
constant. A shareholder's investment in the Fund is not insured. Investors
comparing results of the Fund with investment results and yields from other
sources, such as banks or savings and loan associations, should understand
this distinction. In addition, shareholders and prospective investors should
note that yields of funds valuing their securities portfolio at market prices
will not be comparable to the yield of the Fund, which values its securities
portfolio at amortized cost. Any voluntary waiver of fees or assumption of
expenses by the Fund's affiliates will increase performance results.
In its supplemental sales literature, the Fund may provide total return
calculations. Total return is computed separately for each class of shares of
the Fund. The average annual total return ("standard total return") for
shares of the Fund is computed by determining the average annual compounded
rate of return for a designated period that, if applied to a hypothetical
$1,000 initial investment (less the maximum initial or contingent deferred
sales charge, if applicable), would produce the redeemable value of that
investment at the end of the period, assuming reinvestment of all dividends
and distributions and with recognition of all recurring charges. Standard
total return may be accompanied with nonstandard total return information
computed in the same manner, but for differing periods and with or without
annualizing the total return or taking sales charges, if any, into account.
Shares of the Fund had no class designations until June 1, 1993, when
designations were assigned based on the pricing and Rule 12b-1 fees
applicable to shares sold thereafter. Performance data for a specified class
includes periods prior to the adoption of class designations.
Performance data for periods prior to June 1, 1993 do not reflect
additional Rule 12b-1 Distribution Plan fees, if any, of up to 1% per year,
depending on the class of shares, which will adversely affect performance
results for periods after such date. 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.
23
<PAGE>
[COVER]
[logo] STATE STREET RESEARCH
State Street Research
Money Market Fund
August 1, 1996
P R O S P E C T U S
STATE STREET RESEARCH
MONEY MARKET FUND
One Financial Center
Boston, MA 02111
INVESTMENT ADVISER
State Street Research &
Management Company
One Financial Center
Boston, MA 02111
DISTRIBUTOR
State Street Research
Investment Services, Inc.
One Financial Center
Boston, MA 02111
SHAREHOLDER SERVICES
State Street Research
Shareholder Services
P.O. Box 8408
Boston, MA 02266
800-562-0032
CUSTODIAN
State Street Bank and
Trust Company
225 Franklin Street
Boston, MA 02110
LEGAL COUNSEL
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
MM-614D-896IBS CONTROL NUMBER: 3269-960729(0897)SSR-LD
<PAGE>
State Street Research Money Market Fund
a Series of
State Street Research Money Market Trust
STATEMENT OF ADDITIONAL INFORMATION
August 1, 1996
TABLE OF CONTENTS
Page
ADDITIONAL INVESTMENT POLICIES AND RESTRICTIONS............................2
MONEY MARKET INSTRUMENTS...................................................4
DEBT SECURITIES RATINGS....................................................8
ADDITIONAL INFORMATION CONCERNING
CERTAIN INVESTMENT TECHNIQUES.....................................9
TRUSTEES AND OFFICERS.....................................................11
INVESTMENT ADVISORY SERVICES..............................................17
PURCHASE AND REDEMPTION OF SHARES.........................................18
NET ASSET VALUE...........................................................20
PORTFOLIO TRANSACTIONS....................................................21
CERTAIN TAX MATTERS.......................................................24
DISTRIBUTION OF SHARES OF THE FUND........................................25
CALCULATION OF PERFORMANCE DATA...........................................28
CUSTODIAN.................................................................32
INDEPENDENT ACCOUNTANTS...................................................32
FINANCIAL STATEMENTS......................................................32
The following Statement of Additional Information is not a Prospectus.
It should be read in conjunction with the Prospectus of State Street Research
Money Market Fund (the "Fund") dated August 1, 1996, which may be obtained
without charge from the offices of State Street Research Money Market Trust (the
"Trust") or State Street Research Investment Services, Inc. (the "Distributor"),
One Financial Center, Boston, Massachusetts 02111-2690.
CONTROL NUMBER: 1285L-960731(0897)SSR-LD MM-879D-796
<PAGE>
ADDITIONAL INVESTMENT POLICIES AND RESTRICTIONS
As set forth under "The Fund's Investments" and "Limiting Investment
Risk" in the Fund's Prospectus, the Fund has adopted certain investment
restrictions.
All of the Fund's fundamental investment restrictions are set forth
below. These fundamental investment restrictions may not be changed except by
the affirmative vote of a majority of the Fund's outstanding voting securities
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.) Under these restrictions, it is the
Fund's policy:
(1) not to invest in a security if the transaction would result in
more than 5% of the Fund's total assets being invested in any
one issuer, except that this restriction does not apply to
investments in securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities;
(2) not to invest in a security if the transaction would result in
the Fund's owning more than 10% of any class of voting
securities of an issuer, except that this restriction does not
apply to investments in securities issued or guaranteed by the
U.S. Government or its agencies or instrumentalities;
(3) not to invest in a security if the transaction would result in
more than 5% of the Fund's total assets being invested in
securities of issuers (including predecessors) with less than
three years of continuous operations, except that this
restriction does not apply to investments in securities issued
or guaranteed by the U.S. Government or its agencies or
instrumentalities;
(4) not to issue senior securities;
(5) not to underwrite or participate in the marketing of
securities of other issuers;
(6) not to purchase or sell real estate in fee simple;
(7) not to invest in commodities or commodity contracts;
(8) not to make loans except that the Fund may purchase bonds,
debentures, notes and similar debt obligations, including
money market instruments, directly from the issuer thereof or
in the open market and may engage in repurchase
2
<PAGE>
transactions collateralized by obligations of the U.S. Government
and its agencies and instrumentalities;
(9) not to invest in excess of 10% of its total assets in illiquid
securities, including securities restricted as to resale
(limited to 5% of total assets), repurchase agreements
extending for more than seven days and other securities which
are not readily marketable;
(10) not to conduct arbitrage transactions;
(11) not to invest in interests in oil, gas or other mineral
exploration or development programs (provided that the Fund
may invest in securities which are based, directly or
indirectly, on the credit of companies which invest in or
sponsor such programs);
(12) not to make any investment which would cause more than 25% of
the value of the Fund's total assets to be invested in
securities of issuers principally engaged in any one industry
(for purposes of 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, and (c) securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities or obligations
of domestic banks (including certificates of deposit, bankers'
acceptances, time deposits or bank repurchase agreements)
shall be excluded provided that for this purpose, (i) U.S.
branches and agencies of foreign banks will be considered
"domestic banks" if it can be demonstrated that they are
subject to the same regulation as U.S. banks and (ii) foreign
branches of U.S. banks will be considered "domestic banks" if
the U.S. parent is unconditionally liable in the event the
foreign branch fails to pay on the instrument for any reason);
and
(13) not to borrow money (through reverse repurchase agreements or
otherwise) except for extraordinary and emergency purposes,
such as permitting redemption requests to be honored, and then
not in an amount in excess of 10% of the value of its total
assets, provided that additional investments will be suspended
during any period when borrowings exceed 5% of the Fund's
total assets and provided further that reverse repurchase
agreements shall not exceed 5% of the Fund's total assets.
Reverse repurchase agreements occur when the Fund sells money
market securities and agrees to repurchase such securities at
an agreed-upon price, date and interest payment. The Fund
would use the proceeds from the transaction to buy other money
market securities, which are
3
<PAGE>
either maturing or under the terms of a resale agreement, on
the same day as (or day prior to) the expiration of the
reverse repurchase agreement, and would employ a reverse
repurchase agreement when interest income from investing the
proceeds of the transaction is greater than the interest
expense of the reverse repurchase transaction.
The following investment restrictions may be changed by vote of a
majority of the Trustees. Under these restrictions, it is the Fund's policy:
(1) not to purchase securities on margin, make a short sale of any
securities or purchase or deal in puts, calls, straddles or
spreads with respect to any security;
(2) not to hypothecate, mortgage or pledge any of its assets
except as may be necessary in connection with permitted
borrowings and then not in excess of 15% of the Fund's total
assets, taken at cost;
(3) not to purchase a security issued by another investment
company if, immediately after such purchase, the Fund would
own, in the aggregate, (i) more than 3% of the total
outstanding voting stock of such other investment company;
(ii) securities issued by such other investment company having
an aggregate value in excess of 5% of the value of the Fund's
total assets; or (iii) securities issued by such other
investment company and all other investment companies (other
than treasury stock of the Fund) having an aggregate value in
excess of 10% of the value of the Fund's total assets;
provided, however, that the Fund may purchase investment
company securities without limit for the purpose of completing
a merger, consolidation or other acquisition of assets;
(4) not to purchase for or retain any security of an issuer if, to
the knowledge of the Trust, those of its officers and Trustees
and officers and directors of its investment advisers who
individually own more than 1/2 of 1% of the securities of such
issuer, when combined, own more than 5% of the securities of
such issuer taken at market; and
(5) not to invest in companies for the purpose of exercising control
over their management.
MONEY MARKET INSTRUMENTS
The following describes further the money market instruments in which
the Fund will invest and is provided as a supplement to the discussion appearing
in the Fund's Prospectus.
4
<PAGE>
Short-Term Corporate Debt Instruments. Short-term corporate debt
instruments include commercial paper (i.e., short-term, unsecured promissory
notes) issued by corporations (including bank holding companies) to finance
short-term credit needs. Commercial paper is usually sold on a discounted basis
and has a maturity at the time of issuance not exceeding nine months.
Short-term corporate debt instruments also include master demand notes.
Master demand notes are obligations of companies that permit an investor to
invest fluctuating amounts at varying rates of interest pursuant to arrangements
between the investor, as lender, and the companies, as borrowers. The Fund will
have the right, at any time, to increase the amount lent up to the full amount
provided by a note. Because the Fund may also decrease the amount lent at any
time, such instruments are highly liquid and in effect have a maturity of one
business day. The borrower will have the right, at any time, to prepay up to the
full amount of the amount borrowed without penalty. Because the notes are direct
lending obligations between the Fund and the borrowers, they are generally not
traded and there is no secondary market. Consequently, the Fund's ability to
receive repayment will depend upon the borrower's ability to pay principal and
interest on the Fund's demand. The Fund will invest only in notes that either
have the ratings described below for commercial paper or (because notes are not
typically rated by credit rating agencies) unrated notes that are issued by
companies having the ratings described below for issuers of commercial paper.
The Fund does not expect that the notes will be backed by bank letters of
credit. The Investment Manager will monitor the value of the Fund's investments
in commercial paper and master demand notes, taking into account such factors as
the issuer's earning power, cash flow and other liquidity ratios.
Commercial paper investments at the time of purchase will be rated in
one of the two highest rating categories by a nationally recognized statistical
rating organization, such as A-1 or A-2 by Standard & Poor's Corporation ("S&P")
or Prime-1 or Prime-2 by Moody's Investors Service, Inc. ("Moody's"), or, if not
rated, issued by companies having an outstanding debt issue rated at least AA by
S&P or Aa by Moody's or equivalent. See "Debt Securities Ratings" below for
further information.
Under certain limited circumstances, the Fund may invest in
nonconvertible corporate debt securities (e.g., bonds and debentures which may
be issued by U.S. or Canadian corporations) with no more than thirteen months
remaining either to the date of maturity or the date on which, under the
indenture governing the security, it may be sold back to the issuer thereof for
payment of principal and accrued interest. Corporate debt securities with a
remaining maturity of thirteen months or less are liquid (and tend to become
more liquid as their maturities lessen) and are traded as money market
securities. Such securities also tend to have considerably less market value
fluctuation than longer term issues.
Corporate debt and other securities in which the Fund invests must be
U.S. dollar-denominated Eligible Securities (as defined in Rule 2a-7 under the
1940 Act) that are
5
<PAGE>
determined to present minimal credit risks. In general, the term "Eligible
Securities" is limited to:
(i) securities with remaining maturities of 397 calendar days or less
that are rated (or have been issued by an issuer that is rated
with respect to a class of debt obligations, or any debt
obligation within that class, that are comparable in priority and
security with the relevant security) by the requisite number
(i.e., two, if two organizations have issued ratings and one if
only one has issued a rating) of nationally recognized
statistical rating organizations ("NRSROs") in one of the two
highest rating categories for short-term debt obligations (within
which there may be sub-categories or gradations indicating
relative standing), or
(ii) securities that at the time of issuance had remaining maturities
of more than 397 calendar days but that now have remaining
maturities of 397 calendar days or less and which were issued by
an issuer that has received from the requisite NRSROs a rating,
with respect to a class of short-term debt obligations (or any
debt obligation within that class) that is comparable in priority
and security with the relevant security, in one of the two
highest rating categories for short-term debt obligations (within
which there may be sub-categories or gradations indicating
relative standing), or
(iii) securities which are "unrated" (as defined in Rule 2a-7) but
determined to be of comparable quality to the foregoing by the
Fund's Board of Trustees or the investment manager under their
supervision (provided that a security that at the time of
issuance had a remaining maturity of more than 397 calendar days
but that has a remaining maturity of 397 calendar days or less
and that is an "unrated" security is not an "Eligible Security"
if the security has a long-term rating from any NRSRO that is not
within the NRSRO's three highest long-term categories (within
which there may be sub-categories or gradations indicating
relative standing)).
As indicated in the Fund's Prospectus, at least 95% of the Fund's total
assets will consist of government securities and "first tier" eligible
securities as defined in Rule 2a-7 under the 1940 Act, with the balance of the
Fund's assets invested in "second tier" eligible securities as defined in Rule
2a-7. For this purpose, "second tier" eligible securities are those which have
been (i) rated by at least two nationally recognized statistical rating
organizations in one of the two highest rating categories for short-term
obligations (or so rated by one such organization if it alone has rated the
security), (ii) issued by an issuer with comparable short-term obligations that
are rated in one of the two highest rating categories, or (iii) if unrated,
determined to be comparable to such securities. The Fund may not invest more
than the greater of 1% of its total assets or $1 million in "second tier"
eligible securities of any single issuer.
6
<PAGE>
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 arising out of the
exercise of their banking powers and can exercise other commercial functions,
such as lending activities.
U.S. Government Securities. U.S. Government securities consist of
various types of marketable securities issued by the U.S. Treasury, i.e., bills,
notes and bonds. Such securities are direct obligations of the U.S. Government
and differ mainly in the lengths of their maturities. Treasury bills, the most
frequently issued marketable government security, have a maturity of up to one
year and are issued on a discount basis. U.S. Government securities also include
securities issued under the U.S. Department of Treasury's STRIPS program, which
is described in the Fund's Prospectus.
Government Agency Securities. Government agency securities consist of
fixed income securities issued or guaranteed by agencies and instrumentalities
of the U.S. Government,
7
<PAGE>
including the various types of instruments currently outstanding or which may be
offered in the future. Agencies and instrumentalities include, among others, the
Federal Housing Administration, Government National Mortgage Association
("GNMA"), Federal National Mortgage Association, Export-Import Bank of the U.S.,
Federal Maritime Administration, General Services Administration and Tennessee
Valley Authority. Instrumentalities include, for example, the Central Bank for
Cooperatives, Federal Home Loan Banks, Federal Farm Credit Banks, Student Loan
Marketing Association, Federal Home Loan Mortgage Corporation, Federal
Intermediate Credit Banks, Federal Land Banks and the U.S. Postal Service. The
Fund will purchase such securities only so long as they are backed by any of (i)
the full faith and credit of the U.S. Treasury (e.g., U.S. Treasury bills, bonds
and notes and GNMA participation certificates), (ii) the right of the issuer to
borrow a limited amount from the U.S. Treasury (e.g., securities of the Farmers
Home Administration), (iii) the discretionary authority of the U.S. Government
to purchase certain obligations of the agency or instrumentality (e.g.,
securities of the Federal National Mortgage Association) or (iv) the credit of
the agency or instrumentality (e.g., securities of a Federal Home Loan Bank).
Custodial Receipts. The Fund may acquire, subject to the limitations
described herein, 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
treated as U.S.
Government securities.
DEBT SECURITIES RATINGS
Description of Commercial Paper Ratings
Commercial paper rated A (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 A or better, although in some cases BBB credits
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 assigned by
Moody's. Among the factors considered by Moody's in assigning ratings are the
following: evaluation of the
8
<PAGE>
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.
Description of the highest corporate bond and debenture ratings of S&P
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.
Description of the highest corporate bond and debenture ratings of Moody's
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 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 known as
high-grade bonds. They are rated 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 than in Aaa securities.
ADDITIONAL INFORMATION CONCERNING
CERTAIN INVESTMENT TECHNIQUES
Rule 144A Securities
The Fund may buy or sell restricted securities in accordance with Rule
144A under the Securities Act of 1933 ("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, such Rule 144A Securities may be deemed to
be liquid as determined by or in accordance with methods adopted by the
Trustees.
9
<PAGE>
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, marketmaking 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 possible
illiquidity and subjective valuation of such securities in the absence of a
market for them.
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 by foreign governments are excluded. Companies engaged in the business of
financing will be classified according to the industries of their parent
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, credit card receivables,
etc. "Asset-backed - Mortgages" includes private pools of nongovernment-backed
mortgages. See also the fundamental investment policy relating to industry
concentration under "Additional Investment Policies and Restrictions," herein.
<TABLE>
<S> <C> <C>
Aerospace Electronic Components Oil Service
Airline Electronic Equipment Paper Products
Asset-backed -- Mortgages Entertainment Personal Care
Asset-backed -- Credit Card Financial Service Photography
Receivables Food & Beverage Plastics
Automotive Forest Products Printing & Publishing
Automotive Parts Gaming & Lodging Railroad
Bank Gas Real Estate and Building
Building Gas Transmission Recreation
Business Service Grocery Retail Trade
Cable Healthcare & Hospital Savings & Loan
Capital Goods & Equipment Management Shipping & Transportation
Chemical Hospital Supply Technology & Communications
Computer Software & Service Hotel & Restaurant Telephone
Conglomerate Insurance Textile & Apparel
Consumer Goods & Services Machinery Tobacco
Container Media Truckers
Cosmetics Metal & Mining Trust Certificates--
Diversified Office Equipment Governmental Related
Drug Oil Production Lending
Electric Oil Refining & Marketing
Electric Equipment
</TABLE>
10
<PAGE>
TRUSTEES AND OFFICERS
The Trustees and principal officers of the Trust, their addresses, and
their principal occupations and positions with certain affiliates of State
Street Research & Management Company (the "Investment Manager") are set forth
below.
*+John H. Kallis, One Financial Center, Boston, MA 02111, serves as
Vice President of the Trust. He is 55. His principal occupation is Senior Vice
President of State Street Research & Management Company. During the past five
years he has also served as portfolio manager for State Street Research &
Management Company.
+Edward M. Lamont, Box 1234, Moores Hill Road, Syosset, NY 11791,
serves as Trustee of the Trust. He is 69. He is engaged principally in private
investments and civic affairs, and is an author of business history. Previously,
he was with Morgan Guaranty Trust Company of New York.
+Robert A. Lawrence, Saltonstall & Co., 50 Congress Street, Boston, MA
02109, serves as Trustee of the Trust. He is 69. His principal occupation during
the past five years has been Partner, Saltonstall & Co., a private investment
firm.
*+Gerard P. Maus, One Financial Center, Boston, MA 02111, serves as
Treasurer of the Trust. He is 45. His principal occupation is Executive Vice
President, Treasurer, Chief Financial Officer and Director of State Street
Research & Management Company. During the past five years he has also served as
Executive Vice President and Chief Financial Officer of New England Investment
Companies and Senior Vice President and Vice President of New England Mutual
Life Insurance 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.
*+Francis J. McNamara, III, One Financial Center, Boston, MA 02111,
serves as Secretary and General Counsel of the Trust. He is 40. His principal
occupation is Executive Vice President, General Counsel and Secretary of State
Street Research & Management 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, General Counsel and Clerk of State Street
Research Investment Services, Inc.
- --------------------------------
* or + See footnotes on page 13.
11
<PAGE>
+Dean O. Morton, 3200 Hillview Avenue, Palo Alto, CA 94304, serves as
Trustee of the Trust. He is 64. He is retired, having served during the past
five years, until October 1992, as Executive Vice President, Chief Operating
Officer and Director, Hewlett-Packard Company.
*JoAnne C. Mulligan, One Financial Center, Boston, MA 02111, serves as
Vice President of the Trust. She is 39. Her principal occupation is Senior Vice
President of State Street Research & Management Company. During the past five
years she has also served as Vice President and as portfolio manager and a
fixed-income trader for State Street Research & Management Company.
+Thomas L. Phillips, 141 Spring Street, Lexington, MA 02173 serves as
Trustee of the Trust. He is 72. He is retired and was formerly Chairman of the
Board and Chief Executive Officer of Raytheon Company, of which he remains a
Director.
+Toby Rosenblatt, 3409 Pacific Avenue, San Francisco, CA 94118, serves
as Trustee of the Trust. He is 58. His principal occupation during the past five
years has 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
58. 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.
*+Thomas A. Shively, One Financial Center, Boston, MA 02111, serves as
Vice President of the Trust. He is 42. His principal occupation is Executive
Vice President and Director of State Street Research & Management Company.
During the past five years he has also served as Senior Vice President of State
Street Research & Management Company. Mr. Shively's other principal business
affiliation is Director of State Street Research Investment Services, Inc.
- ---------------------------------
* or + See footnotes on page 13.
12
<PAGE>
*+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 53. His principal occupation is Chairman of the Board, President,
Chief Executive Officer and Director of State Street Research & Management
Company. During the past five years he also served as President and Chief
Executive Officer of New England Investment Companies and Chief Investment
Officer and Director of New England Mutual Life Insurance Company. Mr. Verni's
other principal business affiliations include Chairman of the Board and Director
of State Street Research Investment Services, Inc.
+Jeptha H. Wade, 251 Old Billerica Road, Bedford, MA 01730, serves as
Trustee of the Trust. He is 71. He is retired and was formerly Of Counsel for
the law firm Choate, Hall & Stewart. He was a partner of that firm from 1960 to
1987.
- ------------------------------
* 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 and/or officer of one or more of the following
investment companies, each of which has an advisory or distribution
relationship with the Investment Manager or its affiliates: 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.
13
<PAGE>
As of June 30, 1996, the following persons or entities were the record
and/or beneficial owners of the approximate amounts of each class of shares of
the Fund as set forth beside their names:
Shareholder %
----------- --
Class C Amalgamated Bank, Custodian 10.0
Chase Manhattan Bank, Trustee 37.7
State Street Bank and Trust Company, Trustee 36.1
Class D PaineWebber 74.1
W.D. Griffing 5.1
Class E Metropolitan Life Insurance Company 32.8
The full name and address of each of the above persons or entities are
as follows:
Amalgamated Bank (a)
P.O. Box 370 Cooper Station
New York, New York 10003
Metropolitan Life Insurance Company (c)
One Madison Avenue
New York, New York 10010
State Street Bank and Trust Company (a)
225 Franklin Street
Boston, Massachusetts 02110
Chase Manhattan Bank (a)(b)
770 Broadway
New York, New York 10003
PaineWebber (a)
P.O. Box 3321
Weehawken, New Jersey 07087
W.D. Griffing
c/o State Street Research Shareholder Services
One Financial Center
Boston, Massachusetts 02111
14
<PAGE>
- --------------------
(a) The Fund believes that such entity does not have beneficial ownership
of such shares.
(b) Chase Manhattan Bank holds such shares as trustee under certain
employee benefit plans serviced by Metropolitan Life Insurance Company.
(c) Metropolitan Life Insurance Company ("Metropolitan"), a New York
corporation, was the record and/or beneficial owner, directly or
indirectly through its subsidiaries or affiliates, of such shares.
As of June 30, 1996, the Trustees and principal officers of the Fund as
a group owned less than 1% of the Fund's outstanding Class E shares, and owned
no shares of the Fund's outstanding Class B, Class C or Class D shares.
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.
The Trustees were compensated as follows:
- ----------------------------------------------------------------------------
Total
Compensation
Aggregate From Trust and
Name of Compensation Complex Paid
Trustee From Trust(a) to Trustees(b)
- ----------------------------------------------------------------------------
Edward M. Lamont $4,300 $63,510
Robert A. Lawrence $4,300 $91,685
Dean O. Morton $4,700 $103,085
Thomas L. Phillips $4,000 $67,185
Toby Rosenblatt $4,300 $63,510
Michael S. Scott Morton $4,900 $109,035
Ralph F. Verni $0 $0
Jeptha H. Wade $4,400 $76,285
(a) For the Fund's fiscal year ended March 31, 1996.
(b) Includes compensation from 30 series, including series of Metropolitan
Series Fund, Inc., for which the Investment Manager serves as
sub-investment adviser, State Street Research Portfolios, Inc., for
which State Street Research Investment Services, Inc.
15
<PAGE>
serves as distributor, and all investment companies for which the
Investment Manager serves as primary investment adviser. "Total
Compensation from Trust and Complex" is for the 12 months ended
December 31, 1995. The Trust does not provide any pension or retirement
benefits for the Trustees.
16
<PAGE>
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 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 employees of the Investment Manager or its affiliates.
The Investment Manager is an indirect, wholly owned subsidiary of 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 Fund's net assets
as determined at the close of the New York Stock Exchange (the "NYSE") on each
day the NYSE is open for trading, at the annual rate of 0.50% of the net assets
of the Fund. The Distributor and its affiliates have from time to time and in
varying amounts voluntarily assumed some portion of fees or expenses relating to
the Fund. For the fiscal years ended March 31, 1994, 1995 and 1996, the
investment advisory fees for the Fund were $702,726, $843,948 and $1,063,955,
respectively. For the same periods, the voluntary reduction of fees or
assumption of expenses amounted to $482,571, $922,515 and $600,157,
respectively.
Further, to the extent required under applicable state regulatory
requirements, the Investment Manager will reduce its management fee up to the
amount of any expenses (excluding permissible items, such as brokerage
commissions, if any, Rule 12b-1 payments, interest, taxes and litigation
expenses) paid or incurred by the Fund in any fiscal year which exceed specified
percentages of the average daily net assets of the Fund for such fiscal year.
The most restrictive of such percentage limitations is currently 2.5% of the
first $30 million of average net assets, 2.0% of the next $70 million of average
net assets and 1.5% of the remaining average net assets. These commitments may
be amended or rescinded in response to changes in the requirements of the
various states by the Trustees without shareholder approval.
The Advisory Agreement provides that it shall continue in effect from
year to year with respect to the Fund 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 Agreement or "interested persons" of any party thereto, cast in
person at a meeting called for the purpose of voting on such approval. The
Advisory Agreement 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.
17
<PAGE>
Under a Funds Administration Agreement between the Investment Manager
and the Distributor, the Distributor provides assistance to the Investment
Manager in performing certain fund administration services for the Trust, such
as assistance in determining the daily net asset value of shares of series of
the Trust and in preparing various reports required by regulations.
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 Fund shares may be purchased.
Under the Code of Ethics of the Investment Manager, its employees in
Boston, where investment management operations are conducted, are only permitted
to engage in personal securities transactions in accordance with certain
conditions relating to an employee's position, the identity of the security, the
timing of the transaction, and similar factors. Such employees 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 the Distributor. The Fund offers
multiple classes of shares which may be purchased at the next determined net
asset value per share plus, in the case of all classes except Class C and Class
E shares, a sales charge which is imposed on a deferred basis (the Class B and
Class D shares). General information on how to buy shares of the Fund, as well
as sales charges involved, are set forth under "Purchase of Shares" in the
Prospectus. The following supplements that information.
Class C Shares - Class C shares are currently available to certain
employee benefit plans such as qualified retirement plans which meet criteria
relating to number of participants (currently a minimum of 100 eligible
employees), service arrangements, or similar factors; insurance companies;
investment companies; endowment funds of nonprofit organizations with
substantial minimum assets (currently a minimum of $10,000,000); and other
similar institutional investors.
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, as amended, the Fund may issue its shares at net
asset value (or more) to such entities or to their security holders.
18
<PAGE>
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.
19
<PAGE>
NET ASSET VALUE
Securities held by the Fund are valued on the basis of amortized cost,
which involves a constant amortization of premium or accretion of discount to
maturity regardless of the impact of fluctuating interest rates on the market
value of the security. While this method provides certainty in valuation, it may
result in periods in which the value as determined by amortized cost is higher
or lower than the price the Fund would receive if it sold the security. On each
day that the NYSE is open for unrestricted trading, the net asset value of the
shares of the Fund is determined as of 12 noon and as of the close of the NYSE,
which is ordinarily 4 P.M. New York City time. The NYSE is currently closed on
New Year's Day, Presidents Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day.
The Fund anticipates that under ordinary and usual circumstances it
will be able to maintain a constant net asset value of $1.00 per share and the
Fund will use its best efforts to do so. However, such maintenance at $1.00
might not be possible if (1) there are changes in short-term interest rates or
other factors such as unfavorable changes in the credit of issuers affecting the
values of the securities held by the Fund and the Fund is compelled to sell such
securities at a time when the prices which it is able to realize vary
significantly from the values determined on the amortized cost basis or (2) the
Fund should have negative net income. It is expected that the Fund will have
positive net income at the time of each determination thereof. If for any reason
the net income of the Fund is negative, the Fund will first offset the negative
amount with respect to each shareholder account against the dividends which
accrued during the month with respect to each such account. If and to the extent
that such negative amount exceeds such accrued dividends at the end of the month
(or at any earlier time when redemption by the shareholder would reduce the net
asset value of the shares of the Fund in his account to less than the excess of
such negative account over accrued dividends), the Fund will reduce the number
of its outstanding shares by treating the shareholder as having contributed to
the capital of the Fund that number of shares of the Fund in the account of such
shareholder which represents the amount of such excess. Each shareholder will be
deemed to have agreed to such contributions in these circumstances by his
investment in the Fund.
The utilization of the amortized cost method of valuation requires
compliance with the requirements of Rule 2a-7 under the 1940 Act. Such
compliance requires, among other things, the following:
(1) The Trustees must adopt procedures whereby the extent of
deviation, if any, of the current net asset value per share
calculated using available market quotations (or an
appropriate substitute which reflects current market
conditions) from the Fund's net asset value per share under
the amortized cost valuation method will be determined at such
intervals as the Trustees deem appropriate and reasonable in
light of current market conditions, and the Trustees must
review periodically
20
<PAGE>
the amount of the deviation as well as the methods used to
calculate the deviation;
(2) In the event such deviation from the Fund's net asset value
under the amortized cost valuation method exceeds 1/2 of 1%,
the Trustees must promptly consider what action should be
initiated by them, and when the Trustees believe the extent of
any deviation from the Fund's net asset value per share under
the amortized cost valuation method may result in material
dilution or any other unfair results to investors or existing
shareholders, they must take such action as they deem
appropriate to eliminate or reduce to the extent reasonably
practicable such dilution or unfair results (shareholders will
be notified in the event any such corrective action is taken
by the Trustees);
(3) The Fund may not purchase any instrument with a remaining
maturity greater than thirteen months or maintain a
dollar-weighted average portfolio maturity which exceeds 90
days;
(4) The Fund must limit its portfolio investments, including
repurchase agreements, to those United States
dollar-denominated instruments which the Trustees determine
present minimal credit risks and which are eligible securities
as defined in Rule 2a-7; and
(5) The Fund must record, maintain and preserve certain records
and observe certain reporting obligations in accordance with
Rule 2a-7.
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). Because the Fund only invests in securities with remaining
maturities of 397 calendar days or less, virtually all of which are excludable
in determining the rate of portfolio turnover, the portfolio turnover rate for
the Fund's two most recent fiscal year ends has been zero.
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
21
<PAGE>
judgement 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 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; and portfolio evaluation services and relative
performance of accounts.
Certain 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. The Investment Manager has an investment of less than ten
percent of the outstanding equity of one such third party which provides
portfolio analysis and modeling and other research and investment
decision-making services integrated into a
22
<PAGE>
trading system developed and licensed by the third party to others. The
Investment Manager could be said to benefit indirectly if in the future it
allocates brokerage to a broker-dealer who in turn pays this third party for
services to be provided to the Investment Manager.
The Investment Manager regularly reviews and evaluates the services
furnished by broker-dealers. Some services 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 is
therefore paid directly by the Investment Manager. 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 that 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, relies on the provisions of Section 28(e) of the
Securities Exchange Act of 1934, to the extent applicable. During the fiscal
years ended March 31, 1994, 1995 and 1996, the Fund paid no brokerage
commissions in secondary trading. During and at the end of its most recent
fiscal year, the Fund held in its portfolio no 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 concessions 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.
23
<PAGE>
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 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
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) derive less than 30% of its gross
income in each taxable year from the sale or other disposition of any of the
following held for less than three months (the "30% test"): (i) stocks or
securities, (ii) options, futures, or forward contracts (other than options,
futures or forward contracts on foreign currencies), or (iii) foreign currencies
(or options, futures, or forward contracts on foreign currencies) but only if
such currencies (or options, futures or forward contracts) are not directly
related to the Fund's principal business of investing in stocks or securities
(or options and futures with respect to stocks or securities); (c) satisfy
certain diversification requirements; and (d) in order to be entitled to utilize
the dividends paid deduction, distribute
24
<PAGE>
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
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.
The Fund will be liable for a nondeductible 4% excise tax on amounts
not 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 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. The Fund intends to make sufficient distributions to avoid this 4%
excise tax.
Dividends paid by the Fund will be taxable for federal income tax
purposes, whether received in cash or reinvested in additional shares, as
ordinary income. Dividends paid by the Fund are not expected to be eligible for
the dividends received deduction available to corporations.
DISTRIBUTION OF SHARES OF THE FUND
State Street Research Money Market Trust is currently comprised of one
series: State Street Research Money Market Fund. The Trustees have authorized
the Fund to issue four classes of shares: Class B, Class C, Class D and Class E
shares. 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. 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 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 class.
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
25
<PAGE>
Fund plus a sales charge which is imposed on a deferred basis (the Class B and
Class D shares). The Distributor may allow all or portions of such sales charges
as concessions to dealers. For the period June 1, 1993 (commencement of share
class designations) to November 30, 1993 (redesignation of Class A shares to
Class E shares), total sales charges on Class A shares paid to the Distributor
amounted to $13,553, of which $3,436 was retained by the Distributor after
reallowance of concessions to dealers. For the fiscal years ended March 31, 1995
and 1996, no underwriting commissions or sales charges were paid in connection
with the distribution of Class E shares of the Fund.
For the periods shown below, the Distributor received contingent
deferred sales charges upon redemption of Class B and Class D shares of the Fund
and paid initial commissions to securities dealers for sales of such shares as
follows:
<TABLE>
<CAPTION>
June 1, 1993
(commencement of
share class
Fiscal Year Ended Fiscal Year Ended designations) to
March 31, 1996 March 31, 1995 March 31, 1994
----------------- ----------------- ------------------
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 $ 0 $ 0 $ 0 $ 0 $ 10,117*
Class B $ 226,763 $ 13,749 $ 174,696 $ 7,654 $ 1,229 $ 5,828
Class D $ 0 $ 198 $ 1,884 $ 123 $ 141 $ 2,524
- ------------------
</TABLE>
* For the period June 1, 1993 through November 30, 1993 (redesignation of
Class A shares to Class E shares).
For information on the amount of distribution fees paid by the Fund to
the Distributor, see below.
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 B and Class D 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
26
<PAGE>
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 services 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.
The expenditures to be made pursuant to the Distribution Plan may not
exceed with respect to Class B and Class D shares, an annual rate of 0.75% 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 0.25% 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
services and/or the maintenance or servicing of shareholder accounts. Proceeds
from the service fee will be used by the Distributor to compensate securities
dealers and others selling shares of the Fund for rendering service to
shareholders on an ongoing basis. Such amounts are based on the net asset value
of shares of the Fund held by such dealers as nominee for their customers or
which are owned directly by such customers for so long as such shares are
outstanding and the Distribution Plan remains in effect with respect to the
Fund. 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 servicing of investor accounts. The distribution and servicing expenses
of a particular class will be borne solely by that class.
During the fiscal year ended March 31, 1996, 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:
27
<PAGE>
Class B Class D
------- -------
Advertising $ 10,627 $ 894
Printing and mailing of prospectuses to
other than current shareholders 3,720 312
Compensation to dealers 37,156 750
Compensation to sales personnel 38,973 3,277
Interest 0 0
Carrying or other financing charges 0 0
Other expenses: marketing; general 21,462 1,805
----------- -----------
Total fees $ 111,938 $ 7,038
=========== ===========
The Distributor may have also used additional resources of its own for further
expenses on behalf of the Fund.
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 attempt to make
alternative arrangements for such services for shareholders who acquired shares
through such institutions.
CALCULATION OF PERFORMANCE DATA
The average annual total return and yield of the Class B, Class C,
Class D and Class E shares of the Fund will be calculated as set forth below.
Total return and yield are 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. Shares of the Fund had no class designations
until June 1, 1993, when designations were assigned based on the pricing and
Rule 12b-1 fees applicable to shares sold thereafter.
The performance data reflects Rule 12b-1 fees and sales charges, where
applicable, as set forth below:
28
<PAGE>
<TABLE>
<CAPTION>
Rule 12b-1 Fees Sales Charges
--------------- -------------
Current
Class Amount Period
- ----- ------- ------
<S> <C> <C> <C>
B 1.00% 0% until June 1, 1993; 1- and 5-year periods reflect a
1.00% June 1, 1993 to 5% and a 2% contingent
present; fee will reduce deferred sales charge,
performance for periods respectively
after June 1, 1993
C 0.00% Since commencement of None
operations to present
D 1.00% 0% until June 1, 1993; 1-year period reflects a 1%
1.00% June 1, 1993 to contingent deferred sales charge
present; fee will reduce
performance for periods
after June 1, 1993
E 0.00% Since commencement of None
operations to present
</TABLE>
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" later in this section.
The net income of the Fund, as defined below, is determined as of the
normal close of trading on the NYSE (currently 4 P.M. New York City time) on
each business day on which the NYSE is open and all the net income of the Fund
so determined is declared as a dividend to its shareholders as of that time. For
this purpose the net income of the Fund shall consist of all interest income
accrued on the portfolio assets of the Fund from the time of the immediately
preceding determination of net income, less all expenses and liabilities of the
Fund chargeable against such income. Interest income includes discounts or
premiums accrued (including both original issue and market discount) on discount
paper or otherwise pursuant to the amortized cost method of valuation, accrued
ratably to the date of maturity. Expenses, including the compensation payable to
the Investment Manager, are accrued each day.
Accrued Expenses
Accrued expenses include all recurring expenses that are charged to all
shareholder accounts in proportion to the length of the base period. Accrued
expenses 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
29
<PAGE>
relating to the Fund during the subject period. In the absence of such
subsidization, the performance of the Fund would have been lower.
Yield
The Fund's yield is its investment income, less expenses, expressed as
a percentage of assets on an annualized basis for a seven-day period. The yield
is expressed as a simple annualized yield and as a compounded effective yield.
The simple annualized yield for each of the Fund's Class B, Class C,
Class D and Class E shares is computed by determining the net change (exclusive
of realized gains and losses from the sale of securities and unrealized
appreciation and depreciation) in the value of a hypothetical pre-existing
account having a balance of one share at the beginning of the seven-day period,
dividing the net change in account value by the value of the account at the
beginning of the period, and annualizing the resulting quotient (base period
return) on a 365- day basis. The net change in account value reflects the value
of additional shares purchased with dividends from the original shares in the
account during the seven-day period, and expenses accrued during the period. The
compounded effective yield for each of the Fund's Class B, Class C, Class D and
Class E shares is computed by compounding the unannualized base period return,
by adding one to the base period return, raising the sum to a power equal to 365
divided by seven and subtracting one from the result.
The simple annualized and compounded effective yields as quoted in
advertisements will not be based on information as of a date more than 14 days
prior to the date of publication. Actual yield will vary depending on market
conditions, and principal is not insured. Actual yield also depends on the
qualities, maturities and types of instruments held by the Fund as well as its
operating expenses.
Any net realized capital gains of the Fund in excess of any available
loss carryforward will be distributed to shareholders of the Fund from time to
time as is deemed appropriate in maintaining the Fund's net asset value at one
dollar per share.
Total Return
The average annual total return of each class of shares of the Fund was
as follows:
30
<PAGE>
Commencement of Five Years One Year
Operations (August 25, 1986) Ended Ended
through March 31, 1996 March 31, 1996 March 31, 1996
--------------------------- -------------- --------------
Class B 5.20% 3.01% -0.84%
Class C 5.51% 3.94% 5.20%
Class D 5.21% 3.37% 3.16%
Class E 5.51% 3.94% 5.20%
Standard total return is computed 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 maximum
initial or contingent deferred sales charge applicable to the investment 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 above.
Nonstandardized Total Return
The Fund may provide the above described standard total return results
for Class B, Class C, Class D and Class E shares for periods which end no
earlier than the most recent calendar quarter end and which begin twelve months
before, five years before and at the time of commencement of the Fund's
operations. In addition, the Fund may provide nonstandardized total return
results for differing periods, such as for the most recent six months, and/or
without taking sales charges, if any, 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
31
<PAGE>
Fund's nonstandardized total returns for the six months ended March 31, 1996,
without taking sales charges into account, were as follows:
Class B 1.97%
Class C 2.49%
Class D 1.97%
Class E 2.49%
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.
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP, 160 Federal Street, Boston, Massachusetts 02110,
serves as the Trust's independent accountants, providing professional services
including (1) an audit of the Fund's annual financial statements, (2) assistance
and consultation in connection with Securities and Exchange Commission 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 and holders of record may request a copy of a current
supplementary report, if any, by calling State Street Research Shareholder
Services.
The following financial statements are for the Fund's fiscal year ended
March 31, 1996.
293969.c3
32
<PAGE>
State Street Research Money Market Fund
Investment Portfolio
March 31, 1996
<TABLE>
<CAPTION>
Principal Maturity Value
Amount Date (Note 1)
- ------------------------------- --------- -------- -------------
<S> <C> <C> <C>
COMMERCIAL PAPER 97.5%
Bank Holding Company 10.9%
Canadian Imperial Holdings
Inc., 5.09% $ 5,000,000 5/31/1996 $ 4,957,583
Canadian Imperial Holdings
Inc., 5.20% 5,000,000 6/11/1996 4,948,722
J.P. Morgan & Co., 5.08% 6,000,000 6/03/1996 5,946,660
J.P. Morgan & Co., 5.07% 5,000,000 6/05/1996 4,954,229
Toronto Dominion Holdings
(U.S.A.), 5.06% 4,000,000 6/07/1996 3,962,331
-----------
24,769,525
-----------
Canadian 13.8%
Canadian Wheat Board, 5.10% 4,000,000 5/01/1996 3,983,000
Canadian Wheat Board, 5.07% 6,000,000 6/03/1996 5,946,765
Ontario Hydro, 5.36% 5,000,000 4/02/1996 4,999,256
Ontario Hydro, 5.34% 5,000,000 4/02/1996 4,999,258
Province of Quebec, 5.27% 11,500,000 6/19/1996 11,367,006
-----------
31,295,285
-----------
Captive Automobile Finance 8.6%
Ford Motor Credit Co., 5.35% 2,749,000 4/04/1996 2,747,774
Ford Motor Credit Co., 5.24% 5,400,000 5/10/1996 5,369,346
General Motors Acceptance
Corp., 5.31% 7,000,000 4/22/1996 6,978,318
General Motors Acceptance
Corp., 5.12% 2,000,000 4/30/1996 1,991,751
General Motors Acceptance
Corp., 5.33% 2,500,000 6/17/1996 2,471,499
-----------
19,558,688
-----------
Captive Finance 7.3%
Pitney Bowes Credit Corp.,
5.12% 5,595,000 5/01/1996 5,571,128
Sears Roebuck Acceptance Corp.,
5.12% 1,000,000 4/30/1996 995,876
Sears Roebuck Acceptance Corp.,
5.10% 10,000,000 5/03/1996 9,954,667
-----------
16,521,671
-----------
Communications 6.4%
Bell Atlantic Network Funding,
5.34% 6,000,000 4/12/1996 5,990,210
BellSouth Telecommunications,
Inc., 5.23% 2,735,000 5/24/1996 2,713,941
Southwestern Bell Telephone
Co., 5.25% 6,000,000 6/27/1996 5,923,875
-----------
14,628,026
-----------
Consumer Finance 8.1%
American Express Credit Corp.,
5.35% $ 7,500,000 4/05/1996 $ 7,495,542
Beneficial Corp., 5.46% 5,000,000 4/01/1996 5,000,000
John Deere Capital Corp. 5.25% 6,000,000 6/28/1996 5,923,000
-----------
18,418,542
-----------
Diversified Finance 15.0%
CIT Group Holdings, Inc.,
5.14% 2,500,000 4/22/1996 2,492,504
CIT Group Holdings, Inc.,
5.18% 4,200,000 6/14/1996 4,155,279
General Electric Capital Corp.,
5.24% 4,000,000 4/25/1996 3,986,187
General Electric Capital Corp.,
5.09% 6,000,000 5/01/1996 5,974,550
J.C. Penney Funding Corp.,
5.13% 6,040,000 4/24/1996 6,020,204
Transamerica Finance Group,
Inc., 5.25% 4,500,000 4/17/1996 4,489,500
Transamerica Finance Group,
Inc., 5.15% 2,000,000 4/18/1996 1,995,136
Transamerica Finance Group,
Inc., 5.03% 5,000,000 5/08/1996 4,974,151
-----------
34,087,511
-----------
Electric 6.0%
Pacific Gas and Electric, 5.20% 2,608,000 4/02/1996 2,607,623
Southern California Edison Co.,
5.26% 4,000,000 4/26/1996 3,985,390
Southern California Edison Co.,
5.08% 7,000,000 5/07/1996 6,964,440
-----------
13,557,453
-----------
Food & Beverage Products 3.9%
Coca-Cola Co., 5.12% 6,000,000 4/25/1996 5,979,520
Philip Morris Companies, Inc.,
5.35% 3,000,000 4/08/1996 2,996,879
-----------
8,976,399
-----------
Grains 4.8%
Cargill, Inc., 5.32% 7,000,000 4/09/1996 6,991,725
Cargill, Inc., 5.02% 4,000,000 5/20/1996 3,972,669
-----------
10,964,394
-----------
Office Equipment 2.4%
Hewlett-Packard Co., 5.23% 5,500,000 4/26/1996 5,480,024
-----------
The accompanying notes are an integral part of the financial statements.
<PAGE>
State Street Research Money Market Fund
Investment Portfolio (cont'd)
Plastic Materials 2.0%
E.I. du Pont de Nemours and
Co., 5.23% $4,500,000 5/24/1996 $ 4,465,352
-----------
Printing & Publishing 3.3%
McGraw-Hill, Inc., 5.23% 7,500,000 6/25/1996 7,407,385
-----------
Soap, Detergent 5.0%
Procter & Gamble, 5.03% 8,000,000 5/17/1996 7,948,582
Procter & Gamble, 5.20% 3,500,000 6/17/1996 3,461,072
-----------
11,409,654
-----------
Total Commercial Paper (Cost $221,539,909) 221,539,909
-----------
U.S. GOVERNMENT 2.2%
U.S. Agency Mortgage 2.2%
Federal Home Loan Mortgage
Corp., 5.30% 5,025,000 4/01/1996 5,025,000
-----------
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Total U.S. Government (Cost $5,025,000) 5,025,000
-----------
Total Investments (Cost $226,564,909)--99.7% 226,564,909
Cash and Other Assets, Less Liabilities--0.3% 582,224
-----------
Net Assets--100.0% $227,147,133
===========
</TABLE>
Statement of Assets and Liabilities
March 31, 1996
<TABLE>
<S> <C>
Assets
Investments, at value (Cost $226,564,909) (Note 1) $226,564,909
Cash 5,169
Receivable for fund shares sold 2,626,183
Receivable from Distributor (Note 3) 41,252
Other assets 7,664
-----------
229,245,177
Liabilities
Payable for fund shares redeemed 1,447,656
Dividends payable 244,948
Accrued transfer agent and shareholder services (Note 2) 210,881
Accrued management fee (Note 2) 97,617
Accrued distribution and service fees (Note 5) 11,015
Accrued trustees' fees (Note 2) 10,595
Other accrued expenses 75,332
-----------
2,098,044
-----------
Net Assets $227,147,133
===========
Net Assets consist of:
Shares of beneficial interest $227,147,133
===========
Net Asset Value and offering price per share of
Class B shares ($11,883,647 / 11,883,647 shares of
beneficial interest)* $1.00
===========
Net Asset Value, offering price and redemption price per
share of Class C shares ($16,191,218 / 16,191,218
shares of beneficial interest) $1.00
===========
Net Asset Value and offering price per share of
Class D shares ($1,963,536 / 1,963,536 shares of
beneficial interest)* $1.00
===========
Net Asset Value, offering price and redemption price per
share of Class E shares ($197,108,732 / 197,108,732
shares of beneficial interest) $1.00
===========
</TABLE>
* Redemption price per share for Class B and Class D 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>
State Street Research Money Market Fund
Statement of Operations
For the year ended March 31, 1996
<TABLE>
<S> <C>
Investment Income
Interest $12,348,893
Expenses
Management fee (Note 2) 1,063,955
Transfer agent and shareholder services (Note 2) 820,302
Registration fees 107,702
Custodian fee 105,470
Reports to shareholders 31,654
Trustees' fees (Note 2) 31,434
Distribution and service fees--Class B (Note 5) 111,938
Distribution and service fees--Class D (Note 5) 7,038
Audit fee 23,332
Legal fees 384
Miscellaneous 11,867
----------
2,315,076
Expenses borne by the Distributor (Note 3) (600,157)
----------
1,714,919
----------
Net investment income and net increase in net
assets resulting from operations $10,633,974
==========
</TABLE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year ended March 31
----------------------------
1996 1995
- ---------------------------- ----------- -------------
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations:
Net investment income and
net increase resulting
from operations $ 10,633,974 $ 7,152,656
--------- -----------
Dividends from net investment
income:
Class B (454,124) (217,870)
Class C (716,481) (256,892)
Class D (28,738) (42,149)
Class E (9,434,631) (6,635,745)
--------- -----------
(10,633,974) (7,152,656)
--------- -----------
Net increase from fund share
transactions (Note 6) 58,605,553 25,424,190
--------- -----------
Total increase in net assets 58,605,553 25,424,190
Net Assets
Beginning of year 168,541,580 143,117,390
--------- -----------
End of year $227,147,133 $168,541,580
========= ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
State Street Research Money Market Fund
Notes to Financial Statements
March 31, 1996
Note 1
State Street Research Money Market Fund, formerly MetLife-State Street
Research Money Market Fund (the "Fund") is a series of State Street Research
Money Market Trust, formerly MetLife-State Street Money Market Trust (the
"Trust"), which was organized as a Massachusetts business trust in April,
1985 and is registered under the Investment Company Act of 1940, as amended,
as an open-end management investment company. The Fund commenced operations
in August, 1986. The Fund is presently the only active series of the Trust,
although the Trustees have the authority to create an unlimited number of
series.
The investment objective of the Fund is to seek a high level of current
income consistent with preservation of capital and maintenance of liquidity.
The Fund seeks to achieve its investment objective by investing in securities
issued or guaranteed as to principal and interest by the U.S. Government or
its agencies or instrumentalities as well as high quality, short-term money
market instruments such as bank certificates of deposit, bankers' acceptances
and such short-term corporate debt securities as commercial paper and master
demand notes.
The Fund offers four classes of shares. 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 E shares (which pay lower
ongoing expenses) at the end of eight years after the issuance of the Class B
shares. Class C shares are only offered to certain employee benefit plans and
large institutions. No sales charge is imposed at the time of purchase or
redemption of Class C shares. Class C shares do not pay any distribution or
service fees. Class D shares are subject to a contingent deferred sales
charge of 1.00% on any shares redeemed within one year of their purchase.
Class D shares also pay annual distribution and service fees of 1.00%. Class
E shares are offered to any individual. Class E shares are not subject to any
initial or contingent deferred sales charges and 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 accounting 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. Investment Valuation
The Fund values securities at amortized cost, pursuant to which the Fund must
adhere to certain conditions. The amortized cost method involves valuing a
portfolio security initially at its cost and thereafter assuming a constant
amortization to maturity of any discount or premium regardless of the effect
of fluctuating interest rates on the market value of the investments.
B. Security Transactions
Security transactions are accounted for on the trade date (date the order to
buy or sell is executed). Realized gains or losses, if any, are reported on
the basis of identified cost of securities delivered.
C. Net Investment Income
Net investment income is determined daily and consists of interest accrued
and discount earned, less amortization of premium and the estimated daily
expenses of the Fund. Interest income is accrued daily as earned.
D. Dividends
Dividends from net investment income are declared daily and paid or
reinvested monthly. Net realized capital gains, if any, are distributed
annually, unless additional distributions are required for compliance with
applicable tax regulations.
E. Federal Income Taxes
No provision for Federal income taxes is necessary because the Fund has
elected to qualify under Subchapter M of the Internal Revenue Code and its
policy is to distribute all of its taxable income, including net realized
capital gains, within the prescribed time periods.
F. 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.
Note 2
The Trust and State Street Research & Management Company (the "Adviser"), an
indirect wholly owned subsidiary of Metropolitan Life Insurance Company
("Metropolitan"), have entered into an agreement under which the Adviser
earns monthly fees at an annual rate of 0.50% 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 March 31, 1996, the fees pursuant to
such agreement amounted to $1,063,955.
State Street Research Shareholder Services, 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. During the year ended March 31, 1996, the amount of such
expenses was $168,089.
The fees of the Trustees not currently affiliated with the Adviser amounted
to $31,434 during the year ended March 31, 1996.
<PAGE>
State Street Research Money Market Fund
Note 3
The Distributor and its affiliates may from time to time and in varying
amounts voluntarily assume some portion of fees or expenses relating to the
Fund. During the year ended March 31, 1996, the amount of such expenses
assumed by the Distributor and its affiliates was $600,157.
Note 4
For the year ended March 31, 1996, purchases and sales, including maturities,
of securities aggregated $2,610,708,140 and $2,565,728,446, respectively.
Note 5
The Trust has adopted a Plan of Distribution Pursuant to Rule 12b-1 (the
"Plan") under the Investment Company Act of 1940. Under the Plan, the Fund
pays annual distribution and service fees to the Distributor at a rate of
0.75% and 0.25%, respectively, of average daily net assets for Class B and
Class D shares. The Distributor uses such payments for personal services
and/or the maintenance 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 March 31, 1996, fees pursuant to such
plan amounted to $111,938 and $7,038 for Class B and Class D shares,
respectively.
The Fund has been informed that MetLife Securities, Inc., a wholly-owned
subsidiary of Metropolitan, earned commissions aggregating $13,749 on sales
of the Fund's Class B shares and that the Distributor collected contingent
deferred sales charges of $226,763 on redemptions of Class B shares during
the year ended March 31, 1996.
Note 6
The Trustees have the authority to issue an unlimited number of shares of
beneficial interest, $.001 par value per share.
At March 31, 1996, Metropolitan owned 507,232 Class D shares and Metropolitan
and certain of its affiliates held of record 54,004,214 Class E shares of the
Fund. The Adviser owned 21,481 Class E shares and the Distributor owned
19,500,000 Class E shares of the Fund.
<TABLE>
<CAPTION>
Year ended March 31
--------------------------------------------------------------
1996 1995
---------------------------- ------------------------------
Class B Shares Amount Shares Amount
- ------------------------------------- ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C>
Shares sold 25,459,225 $ 25,459,225 23,182,577 $ 23,182,577
Issued upon reinvestment of dividends 310,628 310,628 187,109 187,109
Shares repurchased (23,208,467) (23,208,467) (17,075,600) (17,075,600)
---------- ---------- ---------- ------------
Net increase 2,561,386 $ 2,561,386 6,294,086 $ 6,294,086
========== ========== ========== ============
Class C Shares Amount Shares Amount
- ------------------------------------- ---------- ---------- ---------- ------------
Shares sold 32,210,132 $ 32,210,132 29,413,278 $ 29,413,278
Issued upon reinvestment of dividends 663,095 663,095 136,567 136,567
Shares repurchased (24,568,290) (24,568,290) (23,449,528) (23,449,528)
---------- ---------- ---------- ------------
Net increase 8,304,937 $ 8,304,937 6,100,317 $ 6,100,317
========== ========== ========== ============
Class D Shares Amount Shares Amount
- ------------------------------------- ---------- ---------- ---------- ------------
Shares sold 7,691,536 $ 7,691,536 4,119,869 $ 4,119,869
Issued upon reinvestment of dividends 17,289 17,289 35,281 35,281
Shares repurchased (6,587,059) (6,587,059) (3,487,480) (3,487,480)
---------- ---------- ---------- ------------
Net increase 1,121,766 $ 1,121,766 667,670 $ 667,670
========== ========== ========== ============
Class E Shares Amount Shares Amount
- ------------------------------------- ---------- ---------- ---------- ------------
Shares sold 880,060,476 $ 880,060,476 895,389,466 $ 895,389,466
Issued upon reinvestment of dividends 6,168,315 6,168,315 4,099,011 4,099,011
Shares repurchased (839,611,327) (839,611,327) (887,126,360) (887,126,360)
---------- ---------- ---------- ------------
Net increase 46,617,464 $ 46,617,464 12,362,117 $ 12,362,117
========== ========== ========== ============
</TABLE>
<PAGE>
State Street Research Money Market Fund
Financial Highlights
For a share outstanding throughout each year:
<TABLE>
<CAPTION>
Class B Class C Class D
---------------------- -------------------- --------------------
Year ended March 31 Year ended March 31 Year ended March 31
---------------------- -------------------- --------------------
1996 1995 1994** 1996 1995 1994** 1996 1995 1994**
- ----------------------------------- ----- ---- ---- ---- ---- ----- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
Net investment income* .041 .032 .012 .051 .042 .021 .041 .032 .013
Dividends from net investment
income (.041) (.032) (.012) (.051) (.042) (.021) (.041) (.032) (.013)
------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of year $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
====== ====== ====== ====== ====== ====== ====== ====== ======
Total return 4.16%+ 3.27%+ 1.27%+++ 5.20%+ 4.31%+ 2.08%+++ 4.16%+ 3.28%+ 1.30 %+++
Net assets at end of year (000s) $11,884 $9,322 $3,028 $16,19 $7,886 $1,786 $1,964 $842 $174
Ratio of operating expenses to
average net assets* 1.75% 1.75% 1.75%++ 0.75% 0.75% 0.75%++ 1.75% 1.75% 1.75%++
Ratio of net investment income to
average net assets* 4.06% 3.53% 1.54%++ 5.03% 4.66% 2.54%++ 4.08% 3.30% 1.54%++
*Reflects voluntary assumption of
fees or expenses per share in
each year (Note 3). $ .003 $ .004 $ .007 $ .003 $ .003 $ .006 $ .003 $ .005 $ .002
</TABLE>
<TABLE>
<CAPTION>
Class E
-------------------------------------------------------
Year ended March 31
-------------------------------------------------------
1996 1995 1994*** 1993 1992
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $1.000 $1.000 $1.000 $1.000 $1.000
Net investment income* .051 .042 .025 .028 .048
Dividends from net investment income (.051) (.042) (.025) (.028) (.048)
------- ----- ----- ----- -------
Net asset value, end of year $1.000 $1.000 $1.000 $1.000 $1.000
======= ===== ===== ===== =======
Total return 5.20%+ 4.31%+ 2.48%+ 2.88%+ 4.85%+
Net assets at end of year (000s) $197,109 $150,491 $138,129 $149,831 $168,088
Ratio of operating expenses to average net assets* 0.75% 0.75% 0.75% 0.75% 0.75%
Ratio of net investment income to average net
assets* 5.06% 4.26% 2.46% 2.84% 4.77%
*Reflects voluntary assumption of fees or expenses
per share in each year (Note 3). $.003 $.006 $.003 $.001 $.001
</TABLE>
** June 1, 1993 (commencement of share class designations) to March 31, 1994.
++ Annualized.
+ Total return figures do not reflect any front-end or contingent deferred
sales charges. Total return would be lower if the Distributor and its
affiliates had not voluntarily assumed a portion of the Fund's expenses.
+++Represents aggregate return for the period without annualization and does
not reflect any front-end or contingent deferred sales charges. Total
return would be lower if the Distributor and its affiliates had not
voluntarily assumed a portion of the Fund's expenses.
***Effective November 30, 1993, the Fund discontinued offering Class A shares
and any existing Class A shares were redesignated Class E shares. Net
investment income and dividends amounted to $.011 per share for Class A
shares during the period June 1, 1993 (commencement of share class
designations) to November 30, 1993.
<PAGE>
Report of Independent Accountants
To the Trustees of State Street Research Money Market Trust and
the Shareholders of State Street Research Money Market Fund
In our opinion, the accompanying statement of assets and liabilities,
including the investment portfolio, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in
all material respects, the financial position of State Street Research Money
Market Fund (formerly MetLife-State Street Research Money Market Fund) (a
series of State Street Research Money Market Trust, hereafter referred to as
the "Trust") at March 31, 1996, and the results of its operations, the
changes in its net assets and the financial highlights for the periods
indicated, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at March 31, 1996 by correspondence with the
custodian, provide a reasonable basis for the opinion expressed above.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Boston, Massachusetts
May 10, 1996
<PAGE>
STATE STREET RESEARCH MONEY MARKET 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 Money
Market Fund for the period August 25, 1986 (commencement of
operations) through March 31, 1996.
(2) Financial Statements included in PART B (Statement of Additional
Information) of this Registration Statement:
Financial Statements for State Street Research Money
Market Fund for the fiscal year ended March 31, 1996 (except as
provided below):
Investment Portfolio
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
(Fiscal years ended March 31,
1996 and March 31, 1995)
Notes to Financial Statements
(including financial
highlights)
Report of Independent Accountants
(b) Exhibits
(1)(a) Second Amended and Restated Master Trust Agreement, Amendment
No. 1 and Amendment No. 2(12)
(1)(b) Amendment No. 3 to Second Amended and Restated Master
Trust Agreement
(2)(a) Amended and Restated By-Laws of the Registrant (1)
(2)(b) Amendment No. 1 to Amended and Restated By-Laws effective
September 30, 1992 (9)
(3) Not applicable
(4) Specimen Share Certificate (2)
(5)(a) Advisory Agreement with MetLife - State Street Investment
Services, Inc. (2)*
C-1
<PAGE>
(5)(c) Transfer and Assumption of Responsibilities and Rights relating
to the Advisory Agreement between State Street Financial
Services, Inc. and State Street Research & Management Company
(9)*
(6)(a) Distribution Agreement with MetLife - State Street Investment
Services, Inc. (2)*
(6)(b) Form of Selected Dealer Agreement (12)
(6)(c) Form of Bank and Bank-Affiliated Broker-Dealer Agreement (12)
(6)(d) Form of Supplement No. 1 to Selected Dealer Agreement
(7) Not applicable
(8)(a) Custodian Contract with State Street Bank and Trust Company (2)
(8)(a)(i)Amendment to the Custodian Contract with State Street Bank
and Trust Company (5)
(9) Not applicable (9)
(10) Opinion and consent of Goodwin, Procter & Hoar (2)
(11) Consent of Price Waterhouse
(12) Not applicable
(13)(a) Purchase Agreement and Investment Letter (2)
(13)(b) Purchase Agreement and Investment Letter (2)
(14)(a) State Street Research IRA: Disclosure Statement; Forms
Booklet; Transfer of Assets/Direct Rollover Form
(14)(b) State Street Research 403(b): Brochure, Maximum Salary
Reduction Worksheet, Account Application, Salary Reduction
Agreement and Transfer of 403(b) Assets Form
(15)(a) Plan of Distribution Pursuant to Rule 12b-1 (10)
(15)(b) Amendment No. 1 to Plan of Distribution Pursuant to
Rule 12b-1 (11)
(16)(a) Calculation of Performance Data (5)
(16)(b) Calculation of Total Return (11)
(17) First Amended and Restated Multiple Class Expense
Allocation Plan
C-2
<PAGE>
(18) Powers of Attorney (12)
(19) Certificate of Board Resolution Respecting Powers of
Attorney (12)
(20) Application Forms
(27) Financial Data Schedules
- ----------
* MetLife - State Street Investment Services, Inc. changed its name to State
Street Financial Services, Inc. effective as of June 18, 1992, and
subsequently changed its name to State Street Research Investment Services,
Inc. effective October 28, 1992. Documents in this listing of Exhibits
which were effective prior to the most recent name change accordingly refer
to MetLife - State Street Investment Services, Inc. or State Street
Financial Services, Inc.
** The MetLife - State Street Money Market Fund changed its name to MetLife -
State Street Research Money Market Fund effective as of August 1, 1994, and
to State Street Research Money Market Fund effective August 1, 1995.
Documents in this listing of Financial Statements and Exhibits which were
effective prior to the most recent name change accordingly refer to a
former name of the Series.
Filed as part of the Registration Statement as noted below and incorporated
herein by reference:
Footnote Securities Act of 1933
Reference Registration/Amendment Date Filed
- --------- ---------------------- ----------
1 Pre-Effective Amendment No. 3 March 25, 1986
2 Pre-Effective Amendment No. 4 July 18, 1986
3 Post-Effective Amendment No. 1 April 30, 1987
4 Post-Effective Amendment No. 2 July 21, 1988
5 Post-Effective Amendment No. 3 July 17, 1989
6 Post-Effective Amendment No. 4 June 1, 1990
7 Post-Effective Amendment No. 5 May 30, 1991
8 Post-Effective Amendment No. 6 August 1, 1992
9 Post-Effective Amendment No. 7 April 1, 1993
10 Post-Effective Amendment No. 8 June 1, 1993
11 Post-Effective Amendment No. 9 July 15, 1994
12 Post-Effective Amendment No. 10 July 28, 1995
C-3
<PAGE>
Item 25. Persons Controlled by or Under Common Control with Registrant
ORGANIZATIONAL STRUCTURE OF METROPOLITAN AND SUBSIDIARIES
AS OF DECEMBER 31, 1995
The following is a list of subsidiaries of Metropolitan Life Insurance Company
("Metropolitan") as of December 31, 1995. Those entities which are listed at the
left margin (labelled with capital letters) are direct subsidiaries of
Metropolitan. Unless otherwise indicated, each entity which is indented under
another entity is a subsidiary of such indented entity and, therefore, an
indirect subsidiary of Metropolitan. Certain inactive subsidiaries have been
omitted from the Metropolitan organizational listing. The voting securities
(excluding directors' qualifying shares, if any) of the subsidiaries listed are
100% owned by their respective parent corporations, unless otherwise indicated.
The jurisdiction of domicile of each subsidiary listed is set forth in the
parenthetical following such subsidiary.
A. Metropolitan Tower Corp. (Delaware)
1. Metropolitan Property and Casualty Insurance Company (Delaware)
a. Metropolitan Group Property and Casualty Insurance Company
(Delaware)
i. Metropolitan Reinsurance Company (U.K.) Limited (Great
Britain)
b. Metropolitan Casualty Insurance Company (Delaware)
c. Metropolitan General Insurance Company (Delaware)
d. First General Insurance Company (Georgia)
e. Metropolitan P&C Insurance Services, Inc. (California)
f. Metropolitan Lloyds, Inc. (Texas)
2. Metropolitan Insurance and Annuity Company (Delaware)
a. MetLife Europe I, Inc. (Delaware)
b. MetLife Europe II, Inc. (Delaware)
c. MetLife Europe III, Inc. (Delaware)
d. MetLife Europe IV, Inc. (Delaware)
e. MetLife Europe V, Inc. (Delaware)
3. MetLife General Insurance Agency, Inc. (Delaware)
a. MetLife General Insurance Agency of Alabama, Inc. (Alabama)
b. MetLife General Insurance Agency of Kentucky, Inc. (Kentucky)
c. MetLife General Insurance Agency of Mississippi, Inc.
(Mississippi)
d. MetLife General Insurance Agency of Texas, Inc. (Texas)
e. MetLife General Insurance Agency of North Carolina, Inc. (North
Carolina)
C-4
<PAGE>
4. Metropolitan Asset Management Corporation (Delaware)
a. MetLife Capital Holdings, Inc. (Delaware)
i. MetLife Capital Corporation (Delaware)
(1) Searles Cogeneration, Inc. (Delaware)
(2) MLYC Cogen, Inc. (Delaware)
(3) MCC Yerkes Inc. (Washington)
(4) MetLife Capital, Limited Partnership (Delaware).
Partnership interests in MetLife Capital, Limited
Partnership are held by Metropolitan (90%) and MetLife
Capital Corporation (10%).
(5) CLJ Finco, Inc. (Delaware)
(a) MetLife Capital Credit L.P. (Delaware).
Partnership interests in MetLife Capital Credit
L.P. are held by Metropolitan (90%) and
CLJ Finco, Inc. (10%).
(6) MetLife Capital Portfolio Investments, Inc. (Nevada)
(a) MetLife Capital Funding Corp. (Delaware)
ii. MetLife Capital Financial Corporation (Delaware)
C-5
<PAGE>
iii. MetLife Financial Acceptance Corporation (Delaware).
MetLife Capital Holdings, Inc. holds 100% of the voting
preferred stock of MetLife Financial Acceptance Corporation.
Metropolitan Property and Casualty Insurance Company holds
100% of the common stock of MetLife Financial Acceptance
Corporation.
b. MetLife Investment Management Corporation (Delaware)
i. MetLife Investments Limited (United Kingdom). 23rd Street
Investments, Inc. holds one share of MetLife Investments
Limited.
c. MetLife Realty Group, Inc. (Delaware)
d. GFM International Investors Limited (United Kingdom). The common
stock of GFM International Investors Limited ("GFM") is held by
Metropolitan (99.5%) and by an employee of GFM (.5%). GFM is a
sub-investment manager for the International Stock Portfolio of
Metropolitan Series Fund, Inc.
i. GFM Investments Limited (United Kingdom)
5. SSRM Holdings, Inc. (Delaware)
a. State Street Research & Management Company (Delaware). Is a sub-
investment manager for the Growth, Income, Diversified and
Aggressive Growth Portfolios of Metropolitan Series Fund, Inc.
i. State Street Research Energy, Inc. (Massachusetts)
ii. State Street Research Investment Services, Inc.
(Massachusetts)
b. Metric Holdings, Inc. (Delaware)
i. Metric Management Inc. (Delaware)
ii. Metric Realty Corp. (Delaware)
iii. Metric Realty (Illinois). Metric Realty Corp. and Metric
Holdings, Inc. each holds 50% of the common stock of Metric
Realty.
(1) Metric Capital Corporation (California)
(2) Metric Assignor, Inc. (California)
(3) Metric Institutional Realty Advisors, Inc. (California)
(4) Metric Institutional Realty Advisors, L.P.
(California).
Metric Realty holds a 99% limited partnership interest
and Metric Institutional Realty Advisors, Inc. holds a
1%
C-6
<PAGE>
interest as general partner in Metric Institutional
Realty Advisors, L.P.
(5) Metric Realty Services, Inc. (Delaware) Metric Holdings
Inc. and Metric Realty Corp. each holds 50% of the
common stock of Metric Realty Services, Inc.
(6) Metric Institutional Apartment Fund II, L.P.
(California). Metric Realty holds a 1% interest as
general partner and Metropolitan holds an approximately
14.6% limited partnership interest in Metric
Institutional Apartment Fund II, L.P.
6. MetLife Holdings, Inc. (Delaware)
a. MetLife Funding, Inc. (Delaware)
b. MetLife Credit Corp. (Delaware)
7. Metropolitan Tower Realty Company, Inc. (Delaware)
8. MetLife Real Estate Advisors, Inc. (California)
9. MetLife HealthCare Holdings, Inc.
B. Metropolitan Tower Life Insurance Company (Delaware)
C. MetLife Security Insurance Company of Louisiana (Louisiana)
D. MetLife Texas Holdings, Inc. (Delaware)
1. Texas Life Insurance Company (Texas)
a. Texas Life Agency Services, Inc. (Texas)
b. Texas Life Agency Services of Kansas, Inc. (Kansas)
E. MetLife Securities, Inc. (Delaware)
F. 23rd Street Investments, Inc. (Delaware)
G. Metropolitan Life Holdings Limited (Ontario, Canada)
1. Metropolitan Life Financial Services Limited (Ontario, Canada)
2. Metropolitan Life Financial Management Limited (Ontario, Canada)
a. Metropolitan Life Insurance Company of Canada (Canada)
b. Metropolitan Life Operations Limited (Canada)
C-7
<PAGE>
3. Morguard Investments Limited (Ontario, Canada)
Shares of Morguard Investments Limited ("Morguard") are held by
Metropolitan Life Holdings Limited (82%) and by employees of Morguard
(18%).
4. Services La Metropolitaine Quebec, Inc. (Quebec, Canada)
5. 167080 Canada, Inc. (Canada)
a. 446068 B.C. Ltd. (British Columbia, Canada)
H. MetLife (UK) Limited (Great Britain)
1. Albany Life Assurance Company Limited (Great Britain)
a. Albany Pension Managers and Trustees Limited (Great Britain)
2. Albany Home Loans Limited (Great Britain)
3. ACFC Corporate Finance Limited (Great Britain)
4. Metropolitan Unit Trust Managers Limited (Great Britain)
5. Albany International Assurance Limited (Isle of Man)
6. MetLife Group Services Limited (Great Britain)
I. Santander Met, S.A. (Spain). Shares of Santander Met, S.A. are held by
Metropolitan (50%) and by an entity (50%) unaffiliated with Metropolitan.
1. Seguros Genesis, S.A. (Spain)
2. Genesis Seguros Generales, Sociedad Anomina de Seguros y Reaseguros
(Spain)
J. Kolon-Met Life Insurance Company (Korea). Shares of Kolon-MetLife Insurance
Company are held by Metropolitan (51%) and by an entity (49%) unaffiliated
with Metropolitan.
C-8
<PAGE>
K. Metropolitan Life Genesis Seguros de Vida S.A. (Argentina)
L. Genesis Seguros de Retiro S.A. (Argentina). Shares of Genesis Seguros de
Retiro S.A. are held by Metropolitan (39%) and by an entity (61%)
unaffiliated with Metropolitan.
M. 2945835 Canada Inc. (Canada)
N. Metropolitan Marine Way Investments Limited (British Columbia, Canada)
O. Met Life Holdings Luxembourg (Luxembourg)
P. Metropolitan Life Holdings, Netherlands BV (Netherlands)
Q. MetLife International Holdings, Inc. (Delaware)
R. Metropolitan Life Insurance Company of Hong Kong Limited (Hong Kong)
C-9
<PAGE>
S. Metropolitan Realty Management, Inc. (Delaware)
1. Edison Supply and Distribution, Inc. (Delaware)
2. Cross & Brown Company (New York)
a. Cross & Brown Residentials, Inc. (New York)
b. Cross & Brown Company of Florida, Inc. (Florida)
c. Cross & Brown Associates of New York, Inc. (New York)
d. Cross & Brown Associates of New Jersey, Inc. (New Jersey)
e. Subrown Corp. (New York)
f. Cross & Brown Construction Corp. (New York)
g. CBNJ, Inc. (New Jersey)
h. Cross & Brown of Connecticut, Inc. (Connecticut)
T. MetPark Funding, Inc. (Delaware)
U. 2154 Trading Corporation (New York)
V. Transmountain Land & Livestock Company (Montana)
W. Met West Agribusiness, Inc. (Delaware)
Y. Farmers National Company (Nebraska)
1. Farmers National Commodities, Inc. (Nebraska)
C-10
<PAGE>
Z. Nebraska Farms, Inc. (Nebraska)
AA. MetFarm and Ranch Properties, Inc. (Delaware)
AB. City Trust Services, National Association (United States)
In addition to the entities listed above, Metropolitan (or where indicated an
affiliate) also owns an interest in the following entities, among others:
1) CP&S Communications, Inc., a New York corporation, holds federal radio
communications licenses for equipment used in Metropolitan owned facilities and
airplanes. It is not engaged in any business.
2) Quadreal Corp., a New York corporation, is the fee holder of a parcel of real
property subject to a 999 year prepaid lease. It is wholly-owned by
Metropolitan, having been acquired by a wholly-owned subsidiary of Metropolitan
in 1973 for $10 in connection with a real estate investment and transferred to
Metropolitan in 1988.
3) Met Life International Real Estate Equity Shares, Inc., a Delaware
corporation, is a real estate investment trust. Metropolitan owns approximately
18.4% of the outstanding common stock of this company and has the right to
designate 2 of the 5 members of its Board of Directors.
4) Metropolitan Structures is a general partnership in which Metropolitan owns
a 50% interest. Metropolitan Structures owns 100% of the common stock of
Cicero/Cermak Corporation, an Illinois corporation, which owns and manages a
shopping center in Illinois. Metropolitan Structures, Inc., an Illinois
corporation, is a property manager. Metropolitan Structures, Inc. is wholly
owned by Metropolitan Structures. Metropolitan Structures, Inc. is the sole
general partner of MS Management Services, L.P., an Illinois limited partnership
in which Metropolitan has a 49.5% interest as a limited partner.
5) Metropolitan Structures West, Inc. (doing business as MS Management
Services), a California corporation, is a property manager in California.
Metropolitan owns 50% of the capital stock of Metropolitan Structures West, Inc.
6) Seguros Genesis, S.A. (Mexico), is a Mexican insurer in which Metropolitan
and two of its subsidiaries collectively own a 24.5% interest and have the right
to designate 2 of the 9 members of the Board of Directors.
7) Interbroker, Correduria de Reaseguros, S.A., is a Spanish insurance brokerage
company in which Santander Met, S.A., a subsidiary of Metropolitan in which
Metropolitan owns a 50% interest, owns a 50% interest and has the right to
designate 2 of the 4 members of the Board of Directors.
8) Metropolitan owns varying interests in certain mutual funds distributed by
its affiliates. These ownership interests are generally expected to decrease as
shares of the funds are purchased by unaffiliated investors.
9) Metropolitan Lloyds Insurance Company of Texas, an affiliated association,
provides homeowner and related insurance for the Texas market. It is an
association of individuals designated as underwriters. Metropolitan Lloyds,
Inc., a subsidiary of Metropolitan Property and Casualty Insurance Company,
serves as the attorney-in-fact and manages the association.
10) Mezzanine Investment Limited Partnerships ("MILPs"), Delaware limited
partnerships, are investment vehicles through which investments in certain
entities are held. A wholly-owned subsidiary of Metropolitan serves as the
general partner of the limited partnerships and Metropolitan directly owns a 99%
limited partnership interest therein. The MILPs have various ownership interests
in certain companies. The various MILPs own, directly or indirectly, more than
50% of the common stock of the following companies: Coating Technologies
International, Inc., Dan River, Inc.; Igloo Holdings, Inc. and its subsidiary,
Igloo Products Corporation; Blodgett Holdings, Inc., and its subsidiaries, GS
Blodgett Corporation, GS Blodgett International Ltd., GS Blodgett Inc., Pitco
Frialator, Inc., Frialator International Limited, Magikitch'n, Inc., and
Cloverleaf Properties, Inc.; and Briggs Holdings, Inc., and its subsidiary,
Briggs Plumbing Products, Inc.
C-11
<PAGE>
Item 26. Number of Holders of Securities
As of June 30, 1996, the number of record holders of the Registrant's Funds
were as follows:
(2)
(1) Number of
Title of Class Record Holders
-------------- --------------
Shares of Beneficial Interest
State Street Research Money Market Fund
Class B 483
Class C 114
Class D 37
Class E 13,439
Item 27. Indemnification
Under Article VI of the Registrant's Second Amended and Restated Master Trust
Agreement, as further amended ("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 which 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 Registrant as defined in
section 2(a)(19) of the 1940 Act nor parties to the 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
C-12
<PAGE>
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 covenants 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 as expressed in the Act and will be governed by the
final adjudication of such issue.
C-13
<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
Barton, Michael E. None
Vice President
Bennett, Peter C. Vice President State Street Research Capital Trust Boston, MA
Director and Vice President State Street Research Exchange Trust Boston, MA
Executive Vice Vice President State Street Research Growth Trust Boston, MA
President Vice President State Street Research Master Investment Trust Boston, MA
Vice President State Street Research Equity Trust
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
Brown, Susan H. None
Vice President
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)
Canavan, Joseph W. Assistant Treasurer State Street Research Equity Trust Boston, MA
Vice President 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 Controller State Street Research Portfolios, Inc. New York, NY
C-14
<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 Director Avalon, Inc. Boston, MA
D'Vari, Ronald None
Vice President
DeVeuve, Donald None
Vice President
DiFazio, Susan M.W. Senior Vice President State Street Research Investment Services, Inc. Boston, MA
Vice President
Dillman, Thomas J Director of Research Bank of New York New York, NY
Senior Vice President (until 6/95)
Drake, Susan W. Vice President State Street Research Tax-Exempt Trust Boston, MA
Vice President (until 2/96)
Duggan, Peter J. Vice President New England Mutual Life Insurance Company Boston, MA
Senior Vice (until 8/94)
President
Evans, Gordon Senior Vice President State Street Research Investment Services, Inc. Boston, MA
Vice President (Vice President until 3/96)
Federoff, Alex G. None
Vice President
Feliciano, Rosalina None
Vice President
Gardner, Michael D. Partner Prism Group Seattle, WA
Senior Vice President
(Vice President until
6/95)
Geer, Bartlett R. Vice President State Street Research Equity Trust Boston, MA
Senior Vice President Vice President State Street Research Income Trust Boston, MA
Govoni, Electra None
Vice President
C-15
<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. None
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 Vincent Memorial Hospital Boston, MA
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 Vice President and Controller MetLife Securities, Inc. New York, NY
until 6/95) Assistant Treasurer State Street Research Energy, Inc. 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 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-16
<PAGE>
Principal business
Name Connection Organization address of organization
- ---- ---------- ------------ -----------------------
Kluiber, Rudolph K. Vice President State Street Research Capital Trust Boston, MA
Vice President
Kobrick, Frederick R. Vice President State Street Research Equity Trust Boston, MA
Senior Vice Vice President State Street Research Capital Trust Boston, MA
Vice President State Street Research Growth Trust Boston, MA
Member Harvard Business School Association Cambridge, MA
Member National Alumni Council, Boston University Boston, MA
Koski, Karen None
Vice President
Langholm, Knut None
Vice President
Leary, Eileen M. None
Vice President
Lintz, Carol None
Vice President
McNamara, III, Francis J. Senior Vice President, Clerk State Street Research Investment Services, Inc. Boston, MA
Executive Vice and General Counsel
President, Secretary and General Counsel State Street Research Master Investment Trust Boston, MA
Secretary and Secretary and General Counsel State Street Research Capital Trust Boston, MA
General Counsel Secretary and General Counsel State Street Research Exchange Trust Boston, MA
(Senior Vice President Secretary and General Counsel State Street Research Growth Trust Boston, MA
until 7/96) 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 Tax-Exempt Trust Boston, MA
Secretary and General Counsel SSRM Holdings, Inc. Boston, MA
Clerk and Director State Street Research Energy, Inc. Boston, MA
Senior Vice President, General The Boston Company, Inc. Boston, MA
Counsel and Assistant Secretary
(until 5/95)
Senior Vice President, General Boston Safe Deposit and Trust Company Boston, MA
Counsel and Assistant Secretary
(until 5/95)
Senior Vice President, General The Boston Company Advisors, Inc. Boston, MA
Counsel and Assistant Secretary
(until 5/95)
C-17
<PAGE>
Principal business
Name Connection Organization address of organization
- ---- ---------- ------------ -----------------------
Maus, Gerard P. Treasurer State Street Research Equity Trust Boston, MA
Director, Executive Treasurer State Street Research Financial Trust Boston, MA
Vice President Treasurer State Street Research Income Trust Boston, MA
and Treasurer Treasurer State Street Research Money Market Trust Boston, MA
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 Securities Trust Boston, MA
Director, Executive Vice President, State Street Research Investment Services, Inc. Boston, MA
Treasurer and Chief Financial Officer
Director and Treasurer State Street Research Energy, Inc. Boston, MA
Director Metric Holdings, Inc. San Francisco, CA
Director Certain wholly-owned subsidiaries
of Metric Holdings, Inc.
Director GFM International Investors, Ltd. London, England
(until 11/94)
Treasurer and Chief Financial SSRM Holdings, Inc. Boston, MA
Officer
Treasurer MetLife Securities, Inc. New York, NY
Milder, Judith J. None
Senior Vice President
(Vice President
until 6/95)
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. Director Hibernia Savings Bank Quincy, MA
Senior 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 Growth Trust Boston, MA
Vice President State Street Research Master Investment Trust Boston, MA
Vice President State Street Research Equity Trust Boston, MA
Vice President State Street Research Energy, Inc. Boston, MA
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-18
<PAGE>
Principal business
Name Connection Organization address of organization
- ---- ---------- ------------ -----------------------
Pannell, James C. None
Vice President
Peters, Kim M. Vice President State Street Research Securities Trust Boston, MA
Senior Vice President
(Vice President
until 7/94)
Ragsdale, E.K. Easton Senior Vice President Kidder, Peabody, & Co. Incorporated New York, NY
Senior Vice President (until 12/94)
(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. Assistant Treasurer State Street Research Equity Trust Boston, MA
Vice President 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 Controller State Street Research Portfolios, Inc. New York, NY
Saperstone, Paul None
Vice President
C-19
<PAGE>
Principal business
Name Connection Organization address of organization
- ---- ---------- ------------ -----------------------
Schrage, Michael None
Vice President
Schultz, David C. Director (non-voting) Capital Trust, S.A. Luxembourg
Executive Vice Director Alex Brown Capital, Ltd. Hamilton, Bermuda
President
(Senior Vice President Director and Treasurer Mafraq Hospital Association Mafraq, Jordan
until 12/94, Vice Member Association of Investment
President until Management Sales Executives Atlanta, GA
4/94) Member, Investment Committee Lexington Christian Academy Lexington, MA
Shaver, Jr. C. Troy President and Chief Executive State Street Research Investment Services, Inc. Boston, MA
Executive Vice Officer
President President and Chief Executive John Hancock Funds, Inc. Boston, MA
Officer (until 1/96)
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. None
Senior Vice President
(Vice President
until 8/93)
Strelow, Dan R. None
Senior Vice President
Stuka, Paul U.S. Portfolio Consultant Teton Partners Boston, MA
Senior Vice President (until 4/95)
C-20
<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
(Vice President
until 6/95)
Verni, Ralph F. Chairman, President, Chief State Street Research Capital Trust Boston, MA
Chairman, President, Executive Officer and Trustee
Chief Executive Chairman, President, Chief State Street Research Exchange Trust Boston, MA
Officer and Executive Officer and Trustee
Director 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 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)
President and Director State Street Research Energy, Inc. Boston, MA
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
Chairman and Director (until 11/94) GFM International Investors, Ltd. London, England
President, Chief Executive SSRM Holdings, Inc. Boston, MA
Officer and Director
Director CML Group, Inc. Boston, MA
C-21
<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
Ward, Geoffrey None
Senior Vice President
Weiss, James M. Chief Investment Officer IDS Equity Advisory Group, Inc. Minneapolis, MN
Senior Vice President (until 12/95)
Westvold, None
Elizabeth McCombs
Senior Vice President
(Vice President
until 7/96)
Wilson, John T. Vice President Phoenix Investment Counsel, Inc. Hartford, CT
Vice President (until 6/96)
Wing, Darman A. Senior Vice President and State Street Research Investment Services, Inc. Boston, MA
Vice President, Asst. Clerk (Vice President
Assistant Secretary until 6/95)
and Assistant Assistant Secretary State Street Research Capital Trust Boston, MA
General Counsel Assistant Secretary State Street Research Exchange Trust Boston, MA
Assistant Secretary State Street Research Growth Trust Boston, MA
Assistant Secretary State Street Research Master Investment Trust Boston, MA
Assistant Secretary State Street Research Securities Trust Boston, MA
Assistant Secretary State Street Research Equity Trust Boston, MA
Assistant Secretary State Street Research Financial Trust Boston, MA
Assistant Secretary State Street Research Income Trust Boston, MA
Assistant Secretary State Street Research Money Market Trust Boston, MA
Assistant Secretary State Street Research Tax-Exempt Trust Boston, MA
Assistant Secretary SSRM Holdings, Inc. Boston, MA
Woodbury, Robert S. Employee Metropolitan Life Insurance Company New York, NY
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 (until 2/96)
C-22
<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
(Vice President
until 8/93)
Yogg, Michael Richard Vice President State Street Research Financial Trust Boston, MA
Senior Vice Vice President State Street Research Income Trust Boston, MA
President
</TABLE>
C-23
<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
George B. Trotta Executive Vice President None
One Madison Avenue
New York, NY 10010
Dennis C. Barghaan Senior Vice President None
One Financial Center
Boston, MA 02111
Peter Borghi Senior Vice President None
One Financial Center
Boston, MA 02111
C-24
<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
Gordon Evans Senior Vice None
One Financial Center President
Boston, MA 02111
Robert Haeusler Senior Vice President None
One Financial Center
Boston, MA 02111
Gregory R. McMahan Senior Vice President None
One Financial Center
Boston, MA 02111
Francis J. McNamara, III Senior Vice President, Secretary
One Financial Center General Counsel
Boston, MA 02111 and Clerk
Joan D. Miller Senior Vice President None
One Financial Center
Boston, MA 02111
Richard P. Samartin 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
Robert M. Gunville Vice President None
One Financial Center
Boston, MA 02111
Linda A. Grasso Vice President None
One Financial Center
Boston, MA 02111
Frederick H. Jamieson Vice President and None
One Financial Center Assistant Treasurer
Boston, MA 02111
Amy L. Simmons Vice President Assistant Secretary
One Financial Center
Boston, MA 02111
C-25
<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
Inapplicable.
Item 32. Undertakings
(a) Deleted.
(b) 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 record holders 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.
C-26
<PAGE>
Notice
A copy of the Second Amended and Restated Master Trust Agreement, as further
amended ("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 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-27
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Post-Effective Amendment No. 11 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 29th day of July, 1996.
STATE STREET RESEARCH MONEY
MARKET TRUST
By *
-----------------------------
Ralph F. Verni
Chief Executive Officer and President
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 and Chief Executive
- ------------------------------------ Officer (principal executive officer)
Ralph F. Verni
* Treasurer (principal financial and
- ------------------------------------ accounting officer)
Gerard P. Maus
* Trustee
- ------------------------------------
Edward M. Lamont
* Trustee
- ------------------------------------
Robert A. Lawrence
<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 July 28, 1995,
incorporated by reference
from Post-Effective
Amendment No. 10,
filed July 28, 1995.
91755.C2
<PAGE>
1933 Act Registration No. 2-97506
1940 Act File No. 811-4295
================================================================================
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. 11 [X]
and/or
REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 15 [X]
--------------------
STATE STREET RESEARCH MONEY MARKET TRUST
(Exact Name of Registrant as Specified in Declaration of Trust)
--------------------
EXHIBITS
================================================================================
<PAGE>
INDEX TO EXHIBITS
(1)(b) Amendment No. 3 to Second
Amended and Restated Master Trust
Agreement
(6)(d) Form of Supplement No. 1
to Selected Dealer Agreement
(11) Consent of Price Waterhouse
(14)(a) State Street Research IRA: Disclosure
Statement; Forms Booklet; Transfer of
Assets/Direct Rollover Form
(14)(b) State Street Research 403(b): Brochure,
Maximum Salary Reduction Worksheet,
Account Application, Salary Reduction
Agreement and Transfer of 403(b)
Assets Form
(17) First Amended and Restated
Multiple Class Expense Allocation
Plan
(20) Application Forms
(27) Financial Data Schedules
Exhibit (1)(b)
METLIFE - STATE STREET MONEY MARKET TRUST
Amendment No. 3 to Second Amended and
Restated Master Trust Agreement
INSTRUMENT OF AMENDMENT
Pursuant to Article I, Section 1.1, Article IV, Sections 4.1 and 4.2
and Article VII, Section 7.3 of the Second Amended and Restated Master Trust
Agreement of the MetLife - State Street Money Market Trust (the "Trust") dated
June 1, 1993 ("Master Trust Agreement"), as heretofore amended, the Master Trust
Agreement is hereby amended to change the name of the Trust to State Street
Research Money Market Trust and to change the name of the series of shares under
such Trust, currently a Sub-Trust designated as MetLife - State Street Research
Money Market Fund, to State Street Research Money Market Fund.
This Amendment shall be effective as of August 1, 1995.
IN WITNESS WHEREOF, the undersigned officer of the Trust hereby adopts
the foregoing on behalf of the Trust pursuant to authorization by the Trustees
of the Trust.
/s/ Francis J. McNamara, III
------------------------------
Francis J. McNamara, III
Secretary
Exhibit (6)(d)
SUPPLEMENT NO. 1 TO
SELECTED DEALER AGREEMENT
Boston, Massachusetts
Effective Date: ---------------
Dealer Name: _____________________________________
Address: _____________________________________
-------------------------------------
Attn: _____________________________________
Ladies and Gentlemen:
This Agreement amends and supplements the Selected Dealer Agreement
between you and us, as in effect from time to time (the "Selected Dealer
Agreement"). All of the terms and provisions of the Selected Dealer Agreement
remain in full force and effect, and this Agreement and the Selected Dealer
Agreement shall be construed and interpreted as one Agreement, provided that in
the event of any inconsistency between this Agreement and the Selected Dealer
Agreement, the terms and provisions of this Agreement shall control. Capitalized
terms used in this Agreement and not defined herein are used as defined in the
Selected Dealer Agreement.
We understand that you wish to use Shares of the Funds in managed
fee-based programs in which you participate (the "Fee-Based Program"), and that
you wish to afford investors participating in such programs the opportunity to
qualify for the ability to purchase shares of the Funds at net asset value. We
are willing to allow you to purchase Shares of the Funds for sale to investors
participating in the Fee-Based Program on such basis, subject to the terms and
conditions of this Agreement and the Selected Dealer Agreement.
<PAGE>
1. Sale of Shares through Fee-Based Program
You may, in connection with the Fee-Based Program, sell shares of any
Funds made available by us, from time to time, at net asset value to investors
participating in a bona fide Fee-Based Program. You will receive no discount,
commission or other concession with respect to any such sale, but will be
entitled to receive any service fees otherwise payable with respect thereto to
the extent provided from time to time in the applicable Funds' Prospectuses and
in the Dealer Agreement. We will, after consulting with you, determine, from
time to time, which Funds we will make available to you for use in the Fee-Based
Program. You agree that Shares will not be made available through the Fee-Based
Program for the sole purpose of enabling evasion of sales charges.
2. Eligibility of Fee-Based Program
We reserve the right to establish basic eligibility requirements from time
to time for the sale of Fund shares under your programs, relating to the minimum
aggregate amount of your clients' assets invested in the Funds, management fees
you charge on such assets, regulatory requirements, and/or similar matters. You
shall send to us upon request from time to time the then-current standard fee
schedule for the applicable Fee-Based Program and a copy of the applicable
Schedule H to the Form ADV containing the required disclosures relating to the
Fee-Based Program, or any successor required disclosures. Any brochures, written
materials or advertising relating to the Fee-Based Program may refer to the
Funds as available at net asset value if the fees and expenses of the Fee-Based
Program are given at least equal prominence. In connection with explaining the
fees and expenses of the Fee-Based Program, your representatives may describe to
customers the option of purchasing Fund shares through such Program at net asset
value.
3. Undertakings
You will (i) provide us with continuous reasonable access to your offices,
representatives and mutual fund and Fee-Based Program sales support personnel,
(ii) include descriptions of all Funds offered through the Fee-Based Program in
internal sales materials and electronic information displays used in conjunction
with the Fee-Based Program, (iii) use reasonable efforts to motivate your
representatives to recommend suitable Funds for clients of the Fee-Based
Program, and (iv) include the Funds on any approved, preferred or other similar
list of mutual fund products offered through the Fee-Based Program.
4. Customer Accounts
You may maintain with the Funds' shareholder servicing agent either (i)
one or more omnibus accounts solely for the participants in the applicable
Fee-Based Program or (ii) separate accounts for each participant in the
applicable Fee-Based Program. If one or more omnibus accounts are maintained,
you shall, among other things, be responsible for forwarding proxies, annual and
semi-annual reports and other materials to each beneficial owner in a timely
manner.
<PAGE>
5. Applicable Law
This Agreement shall be governed by and construed and interpreted in
accordance with the internal laws of The Commonwealth of Massachusetts.
6. Disclaimer and Indemnity
We are not endorsing, recommending and are not otherwise involved in
providing any investment product of yours, including but not limited to any
Fee-Based Program. We are merely affording you the opportunity to use shares of
the Funds as an investment medium for the applicable Fee-Based Program. You
acknowledge and agree that you are solely responsible for any such Fee-Based
Program and you agree to indemnify, defend and hold harmless us, the Funds and
our and their affiliates, directors, trustees, officers, employees and agents
from and against any claims, losses, damages or costs (including attorneys'
fees) arising from or related to such Fee-Based Program, including without
limitation any brochures, written materials or advertising in any form that
refers to the Funds or the Fee-Based Program.
7. Miscellaneous
This Agreement is not exclusive and shall terminate automatically upon
termination of the Selected Dealer Agreement. We reserve the right, in our
discretion upon notice to you, to amend, modify or terminate this Agreement at
any time. You agree that any order to purchase Shares placed by you after notice
of any amendment to this Agreement has been sent to you shall constitute your
agreement to such amendment.
STATE STREET RESEARCH
INVESTMENT SERVICES, INC.
By: _______________________________
Name:
Title:
Accepted:
----------------------------------
Name of Dealer
By: __________________________________
Name:
Title:
Exhibit (11)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment to the registration statement
(No. 2-97506) on Form N-1A (the "Registration Statement") of our report dated
May 10, 1996, relating to the financial statements and financial highlights of
State Street Research Money Market Fund (a series of State Street Research Money
Market Trust), which appears in such Statement of Additional Information and to
the incorporation by reference of our report into the Prospectus which
constitutes part of this Registration Statement. We also consent to the
reference to us under the heading "Independent Accountants" in such Statement of
Additional Information and to the reference to us under the heading "Financial
Highlights" in such Prospectus.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Boston, Massachusetts
July 25, 1996
w:\edgar\MMcnsent
Exhibit (14)(a)
[Logo] STATE STREET RESEARCH
[LOGO]
STATE STREET RESEARCH
IRA
YOUR GUIDE TO PLANNING FOR
A COMFORTABLE RETIREMENT
o o o o o o o o o o o o o o
o Regular/accumulation IRA
o Rollover IRA
o Transfer of assets IRA
o Lump-Sum distribution IRA
o IRA distributions and withdrawals
<PAGE>
GONE
FISHIN'
[Graphic -- Fish]
CONTENTS PAGE
Introduction.................................1
What is an IRA...............................3
IRA at a glance..............................4
Choosing your IRA
o regular/accumulation IRA ...............5
o rollover/transfer of assets...............7
o lump-sum distribution.....................9
State Street Research
IRA services
o Distributions/withdrawals ...........12-13
IRA basics
Answers to common
questions................................15
Why invest with
State Street Research.......................18
Your investment
options.............................Back Cover
A RELAXED
RETIREMENT
REQUIRES
CAREFUL
PLANNING
o o o o o o o o o o o o o o o o o o o o o
Many of us look forward to retirement as
a time when we can do the things we've
wanted to do for years. But in order for
your "golden years" to shine, you need
to start planning today.
The Financial Challenges
of Retirement
When planning for something as important
as your retirement, it's crucial that
you know the facts:
o Many people are retiring earlier and
living longer; retirement assets may
have to last 20, even 30, years. Yet
half of all retirees during the late
1980s entered their retirement years
with less than $10,000 in savings.(1)
Outliving retirement income is a
serious concern.
(1) Source: Rep. William J. Hughes,
statement before the Subcommittee on
Retirement Income and Security, House
Select Committee on Aging, U.S. House
of Representatives, July 10, 1991.
1
<PAGE>
How Long Will Your
Money Last...
$100,000 earning hypothetical rates of
return with monthly withdrawals of $800
(compounded monthly)
Years of withdrawals before principal is exhausted
[The table below was represented as a bar graph in the printed material.]
4% 13.5 yrs.
6% 16.2 yrs.
8% 22.1 yrs.
Rate of return before inflation
These figures are for illustration only
and are not a projection of investment
performance. There is no guarantee that
any available fund managed by State
Street Research or its affiliates will
achieve any particular rate of return.
Results do not take into account the
effect of taxes or inflation on income.
o Estimates indicate that most retirees
need 70% to 80% of their
pre-retirement income to maintain
their standard of living. In most
cases, Social Security and pension(s)
provide only a portion of the income
needed. A third or more may have to
come from personal savings and
investments.
o Retirees should not count on Social
Security as a sole means of
retirement income. Consider that the
average Social Security payment is
$7,836 per year (that's only $653 per
month),(2) fine as a supplement, but
not as a primary source of income.
(2) Source: Social Security
Administration
Where Will The Money
Come From
THE PERCEPTION
Where will many pre-retirees think
the money will come from
[The table below was represented as pie graph in the printed material.]
Savings* 18%
Pensions** 43%
Social Security 25%
Earnings 4%
Other/Unsure 10%
Source: Merrill Lynch
* Includes IRA, payroll reduction plan,
401(k), life insurance, annuities,
investments, other savings on hand
and savings to be added.
** Includes employer's pension plan,
profit sharing plan, government
pension, Keogh/SEP.
THE REALITY
Actual sources of
Retirement Income
[The table below was represented as a pie graph in the printed material.]
Pensions 20%
Earned Income 27%
Investment/Savings 33%
Social Security 18%
Other Benefits 2%
Source: Social Security Administration.
For retirees with at least $28,714 in
annual income in 1990.
o Most Americans change jobs numerous
times over their careers; frequent
job changes can mean reduced income
from company pension plans. Similar
to Social Security, pension plans
should be viewed as a supplementary
source of retirement income.
o Taxes and inflation. They don't go
away, even for retirees. In fact, the
portion of Social Security benefits
that may be subject to tax has
increased from 50% to 85%! And when
you consider that an annual inflation
rate of 4% cuts purchasing power in
half in just 15 years, the
combination of taxes and inflation
can make a serious dent in any
retirement nest egg.
Remember When...
A dollar was worth a dollar.
Thanks to inflation, your 1974 dollar is
worth only 29 cents in today's economy.
[The table below was represented as a line graph in the printed material.]
1974 $1.00
1994 $0.29
Source: Consumer Price Index
You Need A
Substantial Nest Egg
To comfortably meet retirement and
health care costs, you'll probably need
more income than Social Security and
your pension plan alone will provide.
Unfortunately, taxable savings plans may
not be adequate either. Both the money
you set aside and the interest it earns
are taxed at current rates, and that tax
bite can make a real difference over the
long term. Fortunately, there is an easy
way to help insure a more comfortable
retirement. It's called an IRA.
2
<PAGE>
[Graphic -- What is an IRA?]
An Individual Retirement Account,
commonly referred to as an "IRA," is a
savings or investment plan that lets you
set aside money specifically for your
retirement. An IRA offers three
important advantages:
o Tax-deferred earnings--you pay no
taxes on your investment earnings
until you begin taking distributions
from your account. Generally,
withdrawals begin after retirement,
when you may be in a lower tax
bracket--ultimately, your tax bill
might be smaller.
[BAR CHART]
Build For Tomorrow
Tax-deferred growth can help make a
comfortable retirement a reality.
Tax deferred $202,144
28% $140,539
31% $135,297
36% $127,048
39.6% $121,511
Tax-deferred annual investments of
$2,000 over 30 years, earning a 7%
hypothetical rate of return versus the
same investments taxed at the 28%, 31%,
36%, and 39.6 federal tax rates.
For illustration only. Not intended to
imply or guarantee a rate of return on
any investment.
o Power of tax-deferred
compounding--compounding is the money
you earn on your IRA contributions
(dividends, interest, appreciation
and capital gains). Because earnings
are tax-deferred, your retirement
nest egg has the potential to build
even more quickly than a taxable
investment earning the same rate of
return. This can make a significant
difference, particularly over the
long-term.
o Potential tax deduction--you may be
eligible to deduct some or all of
your IRA contributions on your
current federal income tax return.
But even if your contributions aren't
deductible, you still benefit from
tax-deferred growth--a key component
to a sound retirement plan.
In addition to these incentives, a State
Street Research IRA offers you other
advantages, including--a wide choice of
mutual funds and services, and all the
information you need in an easy-to-use,
easy-to-read format. With help from this
guide and the accompanying forms
booklet, you can choose any type of IRA
transaction you need. Open an IRA, take
distributions from your IRA, or just
call to find out more.
Mutual Funds Can Help
The American public has become more
focused than ever on the importance of
investing for retirement. And mutual
funds have taken center stage. Currently
33% (approximately $284 billion) of all
IRA assets are invested in mutual funds.
Why? Because mutual funds offer a
variety of features that appeal to
investors accumulating assets for the
future, including--
o professional management
o diversification
o flexibility
o convenience
o affordability
Source: Investment Company Institute,
1994 Mutual Fund Fact Book
CONSIDER
the potential benefits
if your earnings
could grow tax-deferred...
3
<PAGE>
Mutual Funds and
IRA Investing --
A Natural Fit
An increasing number of investors are
choosing mutual funds to help meet their
future retirement needs.
Number of Mutual Fund
IRA Accounts
1993
29,300,000
1981
500,000
Source: Investment Company Institute,
1994 Mutual Fund Fact Book
We want to
MAKE IT EASY
to plan for retirement...
All the forms you need
are in the forms booklet
that accompanies
this brochure.
And, remember
to consult your
investment representative
and tax adviser.
STATE STREET RESEARCH
IRA
AT A GLANCE
State Street Research offers an IRA to meet your needs.
Included in this brochure:
Regular/Accumulation IRA--see page 5
Open a State Street Research IRA and build your
retirement assets over time through periodic
contributions.
Rollover & Transfer of Assets IRA--see page 7
Rollovers and Transfers are great for
consolidating your finances. They potentially
reduce your IRA fees and simplify your
record-keeping, while continuing to let your
assets build for tomorrow.
Lump-Sum Distribution IRA--see page 9
Retiring or leaving your job? If so, you may be
expecting a lump-sum distribution. Let us show you
what your options are. Making the wrong decision
could cost you thousands. Help avoid tax penalties
with a State Street Research IRA.
Distributions and withdrawals--see page 12
If you're approaching 70 1/2, it's almost time to
begin taking mandatory IRA withdrawals. The IRS
has rules about how much you must withdraw based
on your age, life expectancy and account balance.
State Street Research can help with the
calculations for your review.
4
<PAGE>
YOUR IRA OPTIONS
REGULAR
IRA
IS THIS THE
IRA FOR YOU?
o o o o o o o o o o o o o o o o o o o o
Consider a Regular/Accumulation IRA if
you are:
o Interested in a tax-advantaged way to
save for retirement.
o Concerned about future retirement and
health care expenses and the real
danger of outliving your retirement
assets.
o Employed, but do not have the benefit
of an employer-sponsored retirement
plan.
o Employed and covered by a retirement
plan at work, but want additional
tax-deferred growth potential.
[Graphic]
CONTRIBUTIONS
TO AN IRA
With a regular IRA, you can contribute
up to $2,000 per year or 100% of earned
income, whichever is less.
THE BENEFITS
Without the added boost of personal
retirement savings, many retirees must
make marked cuts in their standard of
living. Establishing an IRA today is a
great way to help build for the future.
You'll benefit from:
o Tax deferral--
Pay no taxes on your investment
earnings until you begin taking
distributions from your account. Once
you reach retirement age, you may be
in a lower tax bracket--which may
mean you pay less in taxes!
o Tax-deferred compounding--
Compounding is the money you earn on
your IRA contributions plus
accumulated investment earnings
(interest, dividends and capital
gains). Because your earnings grow
tax-deferred, your assets have the
potential to accumulate even more
quickly.
o Current tax deduction--
You may be eligible to take a full or
partial tax deduction for
contributions to an IRA.*
* See your tax adviser for details.
[Graphic]
CAN'T DEDUCT
YOUR IRA
CONTRIBUTION?
Don't worry, over time, it's the tax
deferral, not the tax deduction, that
can make the real difference. And, it's
available to all IRA investors.
[PIE CHART]
Benefits of Tax Deduction
Contribute a total of $60,000
to an IRA...
...and your
tax deductions
total $21,600
$60,000
For illustration only. Assumes
individual in 36% federal tax bracket
contributes $2,000 annually over 30
years.
5
<PAGE>
THE FORMS
YOU NEED
1. IRA Terms & Conditions
2. IRA Application
3. Fund Prospectus(es)
Benefits of Tax Deferral
You gain a significant edge when
your investment is tax-deferred
[The table below was represented as a graphic in the printed material.]
$2,000/yr. tax-deferred $202,144
$2,000/yr. taxable 36% bracket $127,048
$75,096 tax advantage
For illustration only. Not intended to imply or guarantee a rate of return on
any investment. Assumes individual in 36% federal tax bracket; annual
contributions of $2,000 for 30 years; and a hypothetical 7% rate of return.
How To Open
Your IRA
o o o o o o o o o o o o o o o o o o o o
A o Sit down with your investment
representative to map out a solid
plan for preparing for retirement.
Choose the State Street Research
funds that best suit your goals and
risk tolerance.
o Read the prospectus for each fund
you're considering before you
invest.
B o Familiarize yourself with the IRA
Terms & Conditions.
o Complete the IRA Application--be
sure to specify which mutual funds
you would like to invest in (Section
3).
o Attach a check made payable to State
Street Bank & Trust Co.*
C o Keep a copy of your signed documents
for your files.
o Mail your completed application in
the envelope provided.
o You will receive written
confirmation that your account has
been established.
* Note: you may contribute up to
$2,000 annually to your IRA. Once
you invest the minimum initial
investment of $2,000 to open your
IRA, you may choose either a
lump-sum investment or periodic
contributions in following years. If
you'd like your IRA contributions
made automatically from your
checking account--each month or
every quarter--fill out the
Investamatic section of the IRA
Application. If you use
Investamatic, you may invest as
little as $50 once the $2,000
minimum investment requirement is
met.
That's all there is to it!
If you have any questions, call toll-free:
1-800-562-0032.
6
<PAGE>
YOUR IRA OPTIONS
ROLLOVER
IRA
IS THIS THE
IRA FOR YOU?
o o o o o o o o o o o o o o o o o o o o
Consider a rollover or a transfer of
assets if you:
o Have IRA(s) at other financial
institution(s) and want to transfer
your assets to consolidate your
accounts for easier record keeping
and potentially lower fees.
o Already have an IRA, but are
dissatisfied with your current level
of service or want a wider array of
investment options.
"TRANSFER"
"ROLLOVER"
What's The Difference?
While the terms are often used
interchangeably, there are important
differences between a "transfer" and a
"rollover:"
o Transfer--moves your IRA assets
directly from one custodian to
another. One of the key differences
between a transfer and a rollover is
with a transfer you never take
receipt of your assets. There is no
limit to the number of IRA transfers
you can make in a given year.
o Rollover--moves your retirement
assets from one place to another.
Unlike a transfer, which occurs
between two custodians, with no
direct involvement by you, choosing
a rollover means you receive an
actual distribution from the first
IRA and it is your responsibility to
reinvest it in another IRA within 60
days. Aside from certain exceptions,
if you are under age 59 1/2 and do
not complete the rollover within 60
days, you will pay ordinary income
tax on your withdrawal, plus a
possible 10% tax penalty. While you
can make an unlimited number of
transfers, you are entitled to only
one IRA rollover between IRAs in a
12-month period. For more
information on direct rollovers,
please see the Lump Sum Distribution
IRA on pages 9-11. Also, remember
that whether a transfer or rollover
of assets, sales charges may apply
to investments in a mutual fund.
THE BENEFITS
o Easier record keeping
o Help avoid tax penalties
o Continue to build for retirement
o Potentially lower fees
Sales charges may apply; please consult
the Fund prospectus(es) for more
details.
CASE STUDY
o o o o o o o o o o o o o o o o o o o o
Transferring
Assets For Easier
Record Keeping
Over the years, Fred Viola and his wife
Florence had established IRAs with a
number of financial institutions. It was
becoming a record-keeping nightmare,
particularly at tax time. The Violas,
long-time investors with State Street
Research, called their investment
representative to see whether their IRAs
could be consolidated into one IRA.
Their representative assured them that
this could be easily accomplished. The
transaction was simply called a
"transfer of assets." After the transfer
was complete, the Violas were pleased to
finally have their IRA assets "under one
roof" and found that State Street
Research's consolidated IRA statement
made tax time much easier.
Note: consolidation of rollover IRAs
(which contain assets from 403(b)
contracts or qualified plans other than
IRAs), with an existing IRA may have
adverse tax consequences such as
limiting future rollovers into qualified
plans other than IRAs.
7
<PAGE>
THE FORMS
YOU NEED
1. IRA Terms & Conditions
2. IRA Application
3. Transfer of Assets/
Direct Rollover Form
4. Fund Prospectus(es)
o o o o o o o o o o o o o o o o o o o o
STATE STREET RESEARCH IRA
How To
Rollover
Or Transfer
Assets To
An IRA
o o o o o o o o o o o o o o o o o o o o
A o Sit down with your investment
representative; he or she will help
you select the funds for your IRA
that are best suited to your
retirement goals.
o Read the prospectus for each fund
you're considering before you
invest.
B o Familiarize yourself with the IRA
Terms & Conditions.
o Complete the IRA Application--be
sure to specify which mutual funds
you would like to invest in (Section
3).
For Rollovers Only:
o Attach a check made payable to State
Street Bank & Trust Co., or, if the
check representing your assets was
made payable to you, please endorse
it to State Street Bank & Trust Co.
For Transfers of Assets &
Direct Rollovers Only:
C o Complete the Transfer of
Assets/Direct Rollover Form. This
will authorize your present IRA
trustee (or the plan administrator
of your employer's plan) to
transfer/rollover your assets
directly to State Street Research.
D o Keep a copy of your signed documents
for your files
o Mail your completed application and
the transfer of assets/direct
rollover form in the envelope
provided.
o You will receive written
confirmation that the transfer, or
rollover, has occurred and your IRA
has been established.
That's all there is to it!
If you have any questions, call toll-free:
1-800-562-0032.
8
<PAGE>
YOUR IRA OPTIONS
LUMP-SUM
IRA
IS THIS THE
IRA FOR YOU?
o o o o o o o o o o o o o o o o o o o o
Consider a Lump-Sum Distribution IRA if
you are leaving your job for any reason:
o You have reached retirement age, or
you've decided to retire early.
o You have accepted a new job with
another employer.
o Your industry is consolidating and
layoffs are inevitable.
o Your company has recently been
acquired or taken over.
o You're starting your own business.
Avoid the 20% withholding and keep your
retirement money working by rolling your
eligible rollover distribution directly
into an IRA from State Street Research.
What's A Lump-Sum
Distribution?
To qualify as a lump-sum, the
distribution from your company's
retirement plan must:
o Represent your entire vested account
balance
o Be paid as a result of separation
from service; attainment of
age 59 1/2; disability; or death
o Be paid in one or more payments
within one calendar year
Facing Major Decisions
If your employer has a retirement plan
that you've participated in, when you
leave your job, you may receive a
lump-sum distribution from that plan.
You need to decide--in advance--how to
deal with those assets or you may face
some serious tax consequences:
o how much will you owe in taxes?
o do you qualify for income averaging?
o is your best option a direct
rollover into an IRA?
o what are the tax consequences if you
keep the money?
YOUR OPTIONS
Take a cash distribution and pay
your tax bill now
If you don't roll your money into an
IRA (or other tax-qualified
retirement plan) within 60 days, or
don't qualify for income averaging,
you may face a hefty tax bill that
could include penalties if you are
under age 59 1/2.
Use income averaging to minimize the
taxes you pay now(4)
If you keep your distribution,
current taxes are due on your entire
distribution. It's possible to reduce
your taxes by using 5- or 10-year
income averaging, if you qualify:
5-year averaging--you must be at
least 59 1/2 when you receive your
lump-sum distribution and have been
an active participant in your former
employer's retirement plan for at
least five years.
10-year averaging--you can use this
method if you were 50 or older on
January 1, 1986 (this rule applies
to 5-year averaging as well).
(4) Income averaging can only be used
once.
Choose a direct rollover to defer
taxes
A direct rollover into an IRA or
your new employer's qualified
retirement plan will defer taxes on
all or part of your distribution. By
continuing to benefit from
tax-deferred growth, a direct
rollover IRA may provide the
opportunity to substantially
increase your retirement assets over
time.(5)
(5) If you receive a check and the
rollover is not done directly
(institution-to-institution), you
will be subject to 20% income tax
withholding (mandatory under IRA
rules). This applies even if you
comply with the 60-day rollover
deadline.
Another option is to begin periodic
withdrawals of substantially equal
amounts for at least 10 years. You
pay tax as you receive distributions
but avoid the 20% withholding tax
and the 10% penalty tax if rolled
over within 60 days.
9
<PAGE>
How To Choose
Your Best Distribution
Option
State Street Research offers a free
personalized program called Lump Sum to
help you get the most from your
retirement plan distributions. Lump Sum
will show you--in real dollar
terms--what each distribution option
means, given your age, tax bracket and
income needs.(6) In an
individually-prepared analysis, Lump Sum
shows:
1 How your distribution can grow in a
tax-deferred IRA.
2 How 5- or 10-year income averaging
can lower your tax bill (if you are
eligible).
3 Expected income and taxes for each
of your distribution options.
4 Hypothetical performance
illustration on selected mutual
funds that correspond with the
investment objective that you
indicate on the Lump Sum Profile
form.
(6) Lump Sum Illustrations are based on
past performance only and are not
meant to imply or guarantee future
performance of any funds managed by
State Street Research or its
affiliates.
o o o o o o o o o o o o o o o o o o o o
STATE STREET RESEARCH IRA
NEW TAX LAW
$
COULD COST YOU $$$
20% Withholding Law--
Effective January 1, 1993
The 20% withholding rule applies to all
eligible rollover distributions and not
just the taxable portion of a lump sum
distribution.
If you accept a check--made payable to
you--your employer must withhold 20% of
the total for taxes. This rule applies
even if you have every intention of
rolling the money over within 60 days.
Exempt From 20%
Withholding Rule
In general, eligible rollover
distributions are all distributions from
a qualified retirement plan except the
following:
o Distributions from IRAs
o Substantially equal periodic payments
(made not less frequently than
annually) with a term of 10 years or
more.
o Substantially equal payments (made not
less frequently than annually) made
for your lifetime or over a period not
exceeding your life expectancy; or for
the joint lives of you and your
beneficiary or over a period not
exceeding your joint life
expectancies.
o Minimum required distributions
o Distributions of previously taxed
amounts.
CASE STUDY
o o o o o o o o o o o o o o o o o o o o
20% Law In Action
George Mills, age 50, has accepted a new
job and is eligible for a $100,000
lump-sum distribution from his former
employer's retirement plan. Thinking he
has 60 days to decide to roll all, or a
portion, into an IRA, George accepts the
distribution check. Later, when George
looks at the check, he sees that it is
for $80,000 not $100,000. He immediately
calls the benefits department at his
former employer. They explain that the
lump-sum distribution was in IRS-terms
an "eligible rollover distribution,"
hence, it is subject to the new 20%
withholding. Now what?
o George decides to roll the $80,000
into an IRA.
o The $20,000 withheld is treated as a
premature distribution and will be
included in his annual income for tax
purposes.
o George is in the 36% tax
bracket--income tax due on the $20,000
is $7,200.
o The remainder of the $20,000 withheld
will be refunded after he files his
tax return.
o And it gets worse. George is under
59 1/2, so he has to pay an additional
penalty tax of 10%. Already his tax
bill is up to $9,200--and that doesn't
include state or local taxes!
If George wants to roll over the entire
$100,000, is it still possible? Yes. But
he must come up with the additional
$20,000 from his other assets. And, the
rollover must be completed within 60
days from the date he received the
$80,000. This will not get back the
$20,000 withheld for tax purposes (he'll
have to wait for his IRS refund), but it
will avoid a 10% premature withdrawal
penalty and the $7,200 income tax.
TURN PAGE FOR MORE INFO ON LUMP-SUM IRA
10
<PAGE>
THE FORMS
YOU NEED
1. IRA Terms & Conditions
2. IRA Application
3. Lump Sum Profile
4. Transfer of Assets/Direct
Rollover Form
5. Fund Prospectus(es)
How To Open An
IRA With Your
Lump-Sum
Distribution
o o o o o o o o o o o o o o o o o o o o
A o Complete the Lump Sum Profile form
and mail, or fax, it to State Street
Research.
o With your investment representative,
review the Lump Sum Illustration
provided by State Street Research
and select the distribution option
that best suits your needs.
B o If an investment is appropriate,
your representative will help you
select the funds for your IRA that
will best meet your retirement
goals.
o Read the prospectus for each fund
you're considering before you
invest.
C o Familiarize yourself with the IRA
Terms & Conditions.
o Complete the IRA Application--be
sure to specify which mutual funds
you would like to invest in (Section
3).
For an institution-to-institution
rollover:
D o Complete the Transfer of
Assets/Direct Rollover Form.
This will authorize your retirement
plan trustee to transfer/rollover
your assets directly to State Street
Research.
E o Keep a copy of your signed documents
for your files.
o Mail your completed application and
the transfer of assets/direct
rollover form in the envelope
provided.
o You will receive written
confirmation that the transfer, or
direct rollover has occurred and
your IRA has been established.
That's all there is to it!
If you have any questions, call toll-free:
1-800-562-0032.
11
<PAGE>
DISTRIBUTION SERVICES AVAILABLE TO IRA OWNERS
MINIMUM DISTRIBUTION
IRA
Investing for retirement is serious
business, and State Street Research
recognizes that it takes more than
attractive investments to power a
successful IRA. It takes dedicated
service, low cost, and features that
help make investing easier.
MINIMUM
DISTRIBUTION SERVICE
Consider a minimum distribution from
your IRA if you are:
o approaching age 70 1/2.
o Between age 59 1/2 and 70 1/2 and
ready to supplement your retirement
income with distributions from your
IRA.(7)
(7) Minimum withdrawals are not
mandatory until April 1 following
the year you reach age 70 1/2. Also
sales charges may apply to
withdrawals made prior to age
70 1/2. See Fund prospectus for
details.
Withdrawals Are
Mandatory At
Age 70 1/2
You may make withdrawals from an IRA
from age 59 1/2 on. However, if you are
approaching 70 1/2, the IRS requires
that you begin taking a minimum
distribution from your IRA each year. If
you don't make the required withdrawals,
you will be subject to a 50% penalty tax
on the amount that should have been
withdrawn. Therefore, once you reach
70 1/2, it is important that you begin
taking your minimum distributions by
April 1 of the following year.
DID YOU TURN
70 1/2 THIS YEAR?
If so, you MUST begin IRA withdrawals by
April 1 of next year
How Much Do You Need
To Withdraw?
When you're ready to take distributions,
you have two choices for determining the
amount to withdraw to meet the minimum
requirement (based on age, account
balance and life expectancy):
o We will do the calculations for your
State Street Research IRA--for your
review--based on information you
provide. Distributions will be paid
on a periodic basis, and your
minimum distribution amount will be
recalculated automatically each
year.
o You may make your own
calculations--take your IRA
withdrawal in an annual lump-sum or
choose periodic payments.(8)
(8) If you choose to make your own
calculations, you must take all your
IRAs into consideration (State
Street Research and others) in
computing the aggregate amount
required to satisfy the minimum
distribution requirements. However,
the IRS allows you to take the
amount from any one or more of your
IRAs, as you choose. As your account
size changes, the required minimum
distribution will vary each year;
therefore, it is your responsibility
to be sure that the withdrawal
amount you specify does not fall
below the minimum amount required.
If you change beneficiaries, see
your tax adviser. This may affect
your calculations.
o o o o o o o o o o o o o o o o o o o o
STATE STREET RESEARCH IRA
TURN PAGE FOR MORE INFO ON MINIMUM DISTRIBUTION
12
<PAGE>
Cash Or Reinvest--
It's Up To You
Take your IRA distribution(s) in cash or
choose automatic reinvestment:
o Cash--We'll send you one check,
representing your annual minimum
withdrawal amount, or a series of
smaller periodic payments. Or choose
the Automatic Bank Connection (ABC)
option, and your distributions will
automatically be deposited in your
bank checking or NOW account. ABC is
easy and gives you ready access to
your distributions.
o Automatic Reinvestment--Just tell us
which available funds managed by
State Street Research (or its
affiliates) you'd like to invest in,
and we'll automatically reinvest
your minimum distributions for you.9
While no longer tax-sheltered, your
money has the potential to continue
to grow to provide future income for
you or your heirs.
9 See Fund prospectus for minimum
required investments. Also, in
general, contributions--whether in
cash or reinvested--are taxable. If
you have made non-deductible
contributions to your IRA, a portion
of each distribution will not be
taxable.
A WORD ABOUT
PRE-59 1/2
DISTRIBUTIONS
There are several circumstances in which
you might choose to make withdrawals
from your IRA prior to reaching age
59 1/2. Call us if you'd like more
information. Make sure you consult with
your tax adviser first so that you fully
understand the potential tax
consequences. A 10% penalty may apply to
these withdrawals.
THE FORMS
YOU NEED
1. IRA
Distribution
Form
How To Choose
The Minimum Distribution Option
o o o o o o o o o o o o o o o o o o o o
A o Complete the IRA Distribution
Form--be sure to indicate which
distribution option you'd like
(Section 4).
B o Keep a copy of your signed documents
for your files.
o Mail the completed form in the
envelope provided.
That's all there is to it! Your
distributions will begin within one month.
If you have any questions, call toll-free:
1-800-562-0032.
13
<PAGE>
MORE FEATURES
IRA
ONE FEE
$10
ANNUALLY
Choose as many available mutual funds
for your IRA account as you want--you
pay only one fee (Does not include sales
charge).(10)
o Easy-To-Use Brochure/Forms--
We explain your IRA options and give
you step-by-step instructions on how
to open the IRA that's right for you.
Forms are easy to fill
out--everything you need is at your
fingertips.
o Consolidated Statement--
All your State Street Research IRA
information on one statement. You'll
see at a glance what portion of your
investments are tax-qualified and--if
you have non-IRA mutual fund
accounts--what are not. This can be a
big timesaver at tax time. For your
convenience, statements are generated
quarterly.
(10) Applies to annual trustee fee, does
not include applicable sales
charges. See Fund prospectus for
more information.
o Free Hypothetical Illustrations
(based on past performance)--
Tailored to your needs--this
powerful tool shows any number of
investment scenarios all in real
dollar terms. This service can be
invaluable for retirement planning.
See your investment representative
for details.(11)
o DIRECT--
An innovative risk reduction
strategy for lump-sum investments.
Commit a minimum of $10,000 to any
available State Street Research
mutual fund. Smaller sums(12) are then
systematically invested (monthly or
quarterly) into a maximum of four
other funds that you choose. It's a
great solution if you have a
substantial sum of money to invest
but are concerned about committing
it all at once.
o Automatic Reinvestment of Required
Distributions--
If it's time to take required
distributions from your State Street
Research IRA--but you don't
currently need the money--this
option will help your assets
continue to work for you. Although
no longer tax-advantaged, your IRA
distributions will automatically be
reinvested in the fund(s) you
choose. You will generally pay taxes
on the amounts reinvested, and the
earnings on the distributions will
no longer be tax-sheltered.
(11) Illustrations are based on past
performance only and are not
intended to imply or guarantee the
future performance of any available
fund managed by State Street
Research or its affiliates.
(12) See prospectus for minimum required
investments.
o Investamatic--
Invest in your State Street Research
IRA, on a monthly or quarterly
basis, through the Investamatic
check program. You can have as
little as $50 automatically
withdrawn from your checking account
and invested in your IRA. It's a
great way to build for your future
with no inconvenience.(12)
o Automatic Bank Connection (ABC)--
If you're taking distributions from
your IRA, choose this feature and
insure that all investment income is
deposited directly into your bank
checking account. No phone calls or
unnecessary paperwork, it all
happens automatically and gives you
immediate access to your money.
o Overview--
Receive a copy of our shareholder
newsletter four times a year. Each
issue is full of information about
the economy, tips to make investing
easier, what State Street Research
portfolio managers are saying about
the markets, and more!
14
<PAGE>
IRA BASICS
Q/A
ANSWERS TO
FREQUENTLY
ASKED
QUESTIONS
o o o o o o o o o o o o o o o o o o o o
CONTRIBUTIONS
TO YOUR IRA
Q. Who can open an IRA?
A. Anyone with earned income who is
under age 70 1/2.
Q. How much can I contribute to an IRA
each year?
A. Except for rollover contributions,
you can contribute a maximum of $2,000
or 100% of your earned income, whichever
is less.
Q. We're a dual-income household. Can we
each contribute $2,000?
A. Yes. If your spouse is a wage-earner,
he or she can open a separate IRA--the
maximum contribution rules apply
separately to each of you--$2,000 each
for a combined annual total of $4,000 or
100% of compensation, whichever is less.
Q. May I have more than one IRA?
A. Absolutely. Just be sure that total
annual contributions to your IRAs do not
exceed 100% of compensation, up to a
maximum of $2,000. Many investors have
found that by consolidating multiple
IRAs into one IRA, annual account
maintenance fees are reduced and record
keeping is made easier. One note
though--sales charges may apply. Please
consult a Fund prospectus for details.
Q. How do I determine whether my IRA
contribution is deductible on my federal
tax return?
A. Deductibility of IRA contributions
depends on your income and whether you
participate in an employer-sponsored
retirement plan. Generally, you can
fully deduct up to $2,000 if:
o you or your spouse is not covered by
an employer-sponsored retirement
plan;
o you or your spouse participate in an
employer-sponsored retirement plan,
but your adjusted gross income does
not exceed $40,000 ($25,000 if you
are single).
For married couples filing jointly with
earnings of $40,000 to $50,000 (and
single filers who earn $25,000 to
$35,000), contributions may be partially
deductible--the rules can be complex.
Please see your tax adviser for details.
Q. Why contribute to an IRA if I can't
deduct my contribution?
A. You're helping prepare for a
comfortable retirement. And regardless
of whether you are able to deduct your
contribution, contributing to an IRA
gives you the benefit of tax deferral on
your earnings. Earnings are tax-free
until they are distributed to you. When
you're ready to retire, this
tax-deferred compounding may make a
sizable difference in your retirement
savings.
Q. Do I have to contribute to an IRA
every year?
A. You are not required to contribute to
your IRA each year, but it may be wise
to do so. IRA contributions--up to the
maximum annual limit--are completely at
your discretion. Contribute as much or
as little as you choose. However, you
may not make up "missed" contributions
in later years.
Q. Is there a cut-off date for my annual
IRA contribution?
A. You can contribute to your IRA
(deductible and non-deductible
contributions) up to the due date for
filing your federal tax return for the
prior year--generally April 15th.
Q. Do I have to stop contributing to my
IRA once I reach a certain age?
A. Yes. You can make IRA contributions
as long as you are a wage-earner up to,
but not including, the year you reach
age 70 1/2.
15
<PAGE>
DISTRIBUTIONS
FROM YOUR IRA
Q. When will I start to make
withdrawals?
A. You may elect to make withdrawals
from your IRA in the year in which you
reach age 59 1/2. Withdrawals before you
reach age 59 1/2 may be considered
premature and may be subject to a
penalty tax of 10%. However, you must
begin making withdrawals from your IRA
by April 1 of the year following the
year in which you reach 70 1/2.
Q. What if I decide to make withdrawals
before I turn 59 1/2?
A. If you decide to withdraw money from
your IRA before age 59 1/2, you may
incur a 10% tax penalty--on top of your
regular income tax. This penalty is
imposed to encourage people to invest in
an IRA as a future retirement account,
not a short-term savings vehicle.
However, exceptions exist, including
those based on hardships such as death
or disability. (Sales charges may apply
in some circumstances.)
Q. Will I have to pay tax on my IRA
withdrawals?
A. Unfortunately, the answer is yes. IRA
withdrawals are generally taxable as
ordinary income in the year you receive
them. But--and this is part of the
attraction of IRAs--when you reach
retirement, your income may be lower
than it is now, putting you in a lower
tax bracket. So by deferring your tax
bill until retirement, you may pay less
in taxes.
Q. What about tax on withdrawals of
non-deductible contributions?
A. Don't worry, you don't have to pay
taxes twice! If you've made
contributions that you did not deduct on
your tax return, they are returned to
you tax-free because you paid tax on
them in the year they were contributed.
However, for maximum flexibility under
the income tax rules, you may want to
consider keeping rollover IRAs separate
from others.
Q. I'd like to wait as long as possible
before I take withdrawals from my IRA.
What's the latest date I can start?
A. The law requires that you begin
withdrawals no later than April 1
following the year you reach age 70 1/2.
If you have reached this age and choose
to take your withdrawals in installments
(versus a lump-sum payment) you must
satisfy certain minimum distribution
requirements. These calculations are
based on your life expectancy (and those
of your beneficiaries, if any). As part
of our IRA service, we'll provide you
with your minimum distribution
calculation(s) on your State Street
Research IRA, for your review. If you
begin withdrawals after age 70 1/2 and
do not take your minimum required
distribution, you may be assessed a
penalty tax equal to 50% of the
difference between the amount you
received and the amount you should have
received. See your tax adviser for
details.
Q. Will IRA withdrawals affect my Social
Security benefits?
A. No. Your IRA withdrawals are in
addition to other retirement income such
as Social Security and any other
retirement or pension plan benefits you
may receive.
o o o o o o o o o o o o o o o o o o o o
STATE STREET RESEARCH IRA
TURN PAGE FOR MORE Qs & As
16
<PAGE>
Q. Will I have access to my IRA money if
I become disabled?
A. Absolutely. If you become
disabled--as defined in Section 72(m) of
the Internal Revenue Code--you may begin
to receive penalty-free distributions
from your IRA regardless of your age.
Q. What happens to my IRA if I die?
A. Your assets will be distributed to
your designated beneficiary(ies). If you
die after some of your IRA assets have
been distributed to you, your designated
beneficiary may continue to receive
payments under the method you elected
prior to your death. Distributions to
your beneficiary must be made at least
as rapidly as they were made to you.
However, if you die before any IRA
distributions have begun, the rules
change slightly:
o In general, your IRA assets must be
distributed to your estate or
beneficiary within five years after
your death.
o If you have designated a beneficiary
and he or she is someone other than
your spouse, your beneficiary may
begin distributions no later than
one year after the date of your
death, and such distributions must
be made over your beneficiary's life
or over a period not exceeding your
beneficiary's life expectancy.
o If your designated beneficiary is
your spouse, he or she may defer any
distributions until December 31st of
the year in which you would have
reached age 70 1/2. Distributions
must then be made over your spouse's
life or over a period not exceeding
his or her life expectancy. Or, your
spouse may roll your IRA assets over
into his or her own IRA; the assets
would then be subject to the same
distribution rules as any IRA.
INVESTING
YOUR IRA
Q. Are there any rules about how IRA
contributions can be invested?
A. You have a number of investment
options to choose from,
including--individual stocks and bonds,
mutual funds, certain types of
annuities, endowment policies and
savings accounts. These options vary in
risk and potential rate of return, so be
sure to consult your investment adviser.
He or she can help you select the asset
mix that's right for you. The law
prohibits IRAs from investing in life
insurance.
Q. I keep reading about IRAs and mutual
fund investing--what is a mutual fund?
A. A mutual fund is a company that pools
the money of many shareholders,
investing it in a variety of securities
chosen by a full-time, professional
money manager, for the purpose of
meeting a stated financial objective.
The flexibility and diversification of
mutual funds have wide appeal--currently
over $284 billion (approximately 33%) of
all IRA assets are invested in mutual
funds.
Source: Investment Company Institute,
1994 Mutual Fund Fact Book
Q. If I own mutual funds in my IRA, what
happens to any dividends and capital
gains?
A. Dividends and capital gain
distributions are automatically
reinvested in additional shares. These
additional shares do not affect the
amount you may contribute. It is
important to understand that the value
of a fund's portfolio will fluctuate
with changes in market conditions;
therefore, the amount available when you
are ready to take your distributions
cannot be projected or guaranteed.
Q. What about fees? Is it expensive to
open an IRA with State Street Research?
A. State Street Research offers some of
the most competitive pricing for IRAs
that you'll find anywhere. You'll pay a
$10 annual account administration
(trustee) fee. This $10 (per IRA) fee
allows you to choose any number of our
available mutual funds. You pay per IRA,
not per fund! Remember though, sales
charges may also apply to the mutual
funds that you invest in for your IRA.
JUST THE
ABCs
OF IRAs
These are the IRA basics. You may have
further questions which your investment
representative and/or tax adviser can
answer.
17
<PAGE>
WHY INVEST WITH
STATE STREET RESEARCH
PROVEN
MANAGEMENT
SINCE 1924
o o o o o o o o o o o o o o o o o o o o
State Street Research & Management
Company has a history that dates to
1924, when Paul Cabot and his
Boston-based colleagues opened America's
second mutual fund. Over the years,
State Street Research has built a
reputation for top-notch research and
prudent investment management. Today,
the Company is well-respected in many of
the nation's most powerful board rooms
and is best known as the institutional
asset manager for some of the most
successful and renowned companies in the
United States. The knowledge, resources
and experience of over seven decades are
available to individual investors
through the State Street Research IRA.
Investment
Flexibility
Choose the mutual fund, or combination
of funds, which best suits your
investment objectives. If your financial
goals change, you can easily exchange
shares of one available mutual fund
managed by State Street Research or its
affiliates for shares of another with no
fee. Exchanges may be subject to
applicable sales charges, and the
privilege may be changed or discontinued
at any time.
A Wealth of Experience
An investment as important as your
retirement plan--and that's what an IRA
is--shouldn't be entrusted to anyone but
experts. To manage its assets, State
Street Research employs some of the best
in the business. The Company currently
has 22 portfolio managers on staff--they
average 20 years of investment
experience--and 25 analysts--with an
average 15 years of experience.
o o o o o o o o o o o o o o o o o o o o
STATE STREET RESEARCH IRA
18
<PAGE>
[Graphic]
OPTIONS
YOUR
INVESTMENT
OPTIONS
o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o
Whichever IRA you choose, State Street
Research offers a family of mutual funds
from which to choose. Each fund is
managed to achieve a specific objective
such as growth, income, or growth and
income combined.
Consult your investment representative
for the fund(s) best suited to your
goals and risk tolerance.
- --------------------------------------------------------------------------------
Please note that neither State Street Research, Metropolitan Life Insurance
Company nor any of their agents give legal or tax advice. The brief discussion
of taxes in this brochure is neither complete nor necessarily up-to-date--it is
intended strictly as a guide. The laws and regulations are complex and subject
to change.
For complete details, consult your attorney or tax adviser.
- --------------------------------------------------------------------------------
[Logo] STATE STREET RESEARCH
A MetLife Company
When used as sales material, this brochure must be preceded or accompanied by a
current, relevant fund prospectus which provides more complete information
including investment policies, sales charges and expenses. Please read the
prospectus(es) carefully before you invest.
(C)1995 State Street Research Investment Services, Inc., Boston, MA 02111
CONTROL NUMBER: 2074-950302(0496)SSR-LD
IR-081E-395
<PAGE>
[LOGO] STATE STREET RESEARCH
[LOGO]
STATE STREET RESEARCH
IRA
Forms Booklet
o o o o o o o o o o o o o o o o o o o
This IRA Forms Booklet includes:
o Terms and Conditions
o Application
o Lump Sum Profile
o Distribution Form
o Pre-59 1/2 Distribution
Information Request Form
<PAGE>
Just about everything you will need to open an IRA at
State Street Research is included in this Forms Booklet.
- --------------------------------------------------------------------------------
Terms and Conditions
- --------------------------------------------------------------------------------
This legal document explains the provisions of your Individual Retirement
Account.
- --------------------------------------------------------------------------------
IRA Application
- --------------------------------------------------------------------------------
This application allows you or your investment representative to open all types
of IRAs, including:
o Regular/accumulation IRAs (you can make contributions to it each year).
o Rollover IRAs (you can move money from another qualified retirement
plan--such as a former employer's 401(k) plan--into an IRA at State Street
Research.) You will also need to complete the Transfer of Assets/Direct
Rollover Form.
o Transfer of assets IRAs (you can transfer money from an IRA somewhere else
to an IRA at State Street Research.) You will also need to complete the
Transfer of Assets/Direct Rollover Form.
- --------------------------------------------------------------------------------
Lump Sum Profile
- --------------------------------------------------------------------------------
You or your investment representative may fill out this form to request a
personalized, hypothetical illustration based on a lump-sum distribution from a
qualified retirement plan.
- --------------------------------------------------------------------------------
Distribution Form
- --------------------------------------------------------------------------------
When it's time to withdraw money from your IRA, this is the form to use. Among
other things, the form allows you to withdraw all of your money, set up a
Systematic Withdrawal Plan, or begin "required minimum distributions."
Before you begin withdrawals from your IRA, please consult your tax adviser
to determine whether any tax penalties apply to you. Also, don't forget that a
contingent deferred sales charge may apply to distributions. If you plan to
direct your distributions to an address besides your address of record--a bank
account or a State Street Research mutual fund, for instance--you will need a
signature guarantee.
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Pre-59 1/2 Distribution Information Request Form
- --------------------------------------------------------------------------------
In certain cases, it may be possible to receive distributions from your IRA
before you reach age 59 1/2--without paying a tax penalty. This form lets you
request additional information. Before you begin withdrawals from your IRA,
please consult your tax adviser to determine whether any tax penalties apply to
you.
- --------------------------------------------------------------------------------
Transfer of Assets/Direct Rollover Form
- --------------------------------------------------------------------------------
(not included in the Forms Booklet)
Fill out this form to move money to State Street Research from an IRA at another
company (transfer of assets), or from your employee retirement plan (direct
rollover). Send us a completed Transfer of Assets/Direct Rollover Form and a
completed IRA Application, and we'll do the rest.
If you have any questions, please contact your investment representative,
or call us at 1-800-562-0032.
<PAGE>
- --------------------------------------------------------------------------------
[LOGO] State Street Research IRA
Terms & Conditions
- --------------------------------------------------------------------------------
These Terms and Conditions are in the form promulgated by the Internal Revenue
Service in Form 5305 for use in establishing an individual retirement trust
account.
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 custodial 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 custodial 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 custodial 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 custodial 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 custodial 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 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 Vl.
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 Vll.
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 below.
<PAGE>
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 VlIl--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.
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
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 Grantor shall give such directions by written, telephonic or other
notice acceptable to 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 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 written 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 distributions from the account (and to instruct the Trustee or the
Agent accordingly), and the federal and state tax treatment of any contributions
to or distributions from the account. 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 distributions, or in
not acting in the absence of such direction. If the Grantor (or beneficiary)
does not direct the Trustee to make distributions from the account by the time
that such distributions 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 the 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 distributions from the
<PAGE>
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 Individual Retirement Account
or arising out of any investment instructions of the Grantor, whether relating
to the portion of contributions 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 investment advice 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 4 above). The Grantor (or beneficiary) will have exclusive
investment control over the account.
11. 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).
Grantor agrees to provide information to the Trustee at such times as may be
necessary to enable the Trustee to administer the account hereunder.
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.
12. These Terms and Conditions shall terminate upon the complete distribution 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 60 days notice to the
Grantor, or to his beneficiaries if he is then dead. In such event, upon
expiration of such 60 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 60 days notice in writing to SSRIS
and may be removed by SSRIS at any time upon 60 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 of the Internal Revenue
Code.
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 of the Internal Revenue Code.
15. If, within 60 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
Individual Retirement Account established hereby, and the term "Grantor" refers
to the person for whose benefit such Account was established.
23. Articles I through VII of these Terms and Conditions are in the form
promulgated by the Internal Revenue Service. It is anticipated that if and when
the Internal Revenue Service promulgates changes to Form 5305, SSRIS will adopt
such changes as an amendment to these Terms and Conditions. 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.
24. 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 Individual Retirement Account Disclosure Statement.
(References are to the Internal Revenue Code.)
[LOGO] STATE STREET RESEARCH
<PAGE>
- --------------------------------------------------------------------------------
[LOGO] State Street Research IRA
IRA Application
- --------------------------------------------------------------------------------
Upon completion, send application and check (if you are making a
contribution at this time) made payable to "State Street Bank and Trust Company,
Trustee" to the address listed on the back.
1 What Type of IRA?
/ / Regular/Accumulation
(if you plan to make additional investments
into the account)
/ / Rollover IRA
/ / Direct rollover (sent trustee to trustee, from
a qualified retirement plan elsewhere to a
State Street Research IRA)
/ / Rollover (proceeds from my former qualified
retirement plan were paid to me, and my
check is enclosed) Please note: Rollover must be
transferred within 60 days of the date proceeds
were paid to you.
Do not rollover or transfer any amounts required
to be paid to you under the minimum distribution
rules that apply after you reach age 70 1/2, or any
other amounts which are not eligible rollover
distributions or would not be otherwise includable
in your gross income.
/ / Transfer of Assets
(from an IRA at another company to a State Street
Research IRA)
/ / SEP IRA / / SAR-SEP IRA
- --------------------------------------------------------------------------------
Name of employer Employer telephone
- --------------------------------------------------------------------------------
Address of employer
2 What is your name and address?
(Please print.)
- --------------------------------------------------------------------------------
Your name
- --------------------------------------------------------------------------------
Street address
- --------------------------------------------------------------------------------
City State ZIP
- --------------------------------------------------------------------------------
Daytime telephone number Evening telephone number
/ /
- --------------------------------------------------------------------------------
Social security number/taxpayer identification number Date of birth
3 Which funds have you selected?
- --------------------------------------------------------------------------------
Fund name
$ / / A / / B / / D*
- --------------------------------------------------------------------------------
Amount ($2,000 minimum) Share class**
- --------------------------------------------------------------------------------
Fund name
$ / / A / / B / / D*
- --------------------------------------------------------------------------------
Amount ($2,000 minimum) Share class**
- --------------------------------------------------------------------------------
Fund name
$ / / A / / B / / D*
- --------------------------------------------------------------------------------
Amount ($2,000 minimum) Share class**
$
- ---------------------
Total amount invested
* "D" shares not available through MSI.
**Investments in Money Market Fund will purchase
class E shares.
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.
<PAGE>
4 Who is your beneficiary?
Primary beneficiary
(only one required per account. If you have more than
two, include them on a separate sheet. If two or more
are named, they will receive equal amounts unless you
specify otherwise; also if one of the named primary
beneficiaries predeceases you, that person's share will
be distributed pro-rata to the other primary beneficiaries
who survive you, unless you specify otherwise.)
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
City State ZIP
/ /
- --------------------------------------------------------------------------------
Social security number/taxpayer identification number Date of birth
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
City State ZIP
/ /
- --------------------------------------------------------------------------------
Social security number/taxpayer identification number Date of birth
Secondary beneficiary
(if the person(s) named as primary beneficiary fails to
survive you.)
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
City State ZIP
/ /
- --------------------------------------------------------------------------------
Social security number/taxpayer identification number Date of birth
5 We need your signature
I hereby establish a State Street Research IRA, appoint State Street Bank and
Trust Company as Trustee, direct that contributions to my 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 the Fund(s) indicated above and the Terms and Conditions of the
State Street Research IRA (which are incorporated herein by reference) and have
read its Disclosure Statement.
Under penalties of perjury, I 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. (You must cross out item (2) above if you
have been notified by the IRS that you are currently subject to backup
withholding because of under-reporting interest or dividends on your tax
return.)
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 share of the Fund.
- --------------------------------------------------------------------------------
Signature Date
<PAGE>
6 Dealer information
(for Dealer use only)
- --------------------------------------------------------------------------------
Dealer name
- --------------------------------------------------------------------------------
Street address of home office
- --------------------------------------------------------------------------------
City State ZIP
- --------------------------------------------------------------------------------
Authorized signature of dealer
- --------------------------------------------------------------------------------
Agency/branch office number
- --------------------------------------------------------------------------------
Street address of agency/branch office servicing account
- --------------------------------------------------------------------------------
City State ZIP
- --------------------------------------------------------------------------------
Registered representative's name and number
If this application is for an account introduced through the above-named Dealer,
the Dealer further agrees to all applicable provisions in this application and
in the Prospectus. The Dealer warrants that this application is completed in
accordance with the shareholder's instructions and agrees to indemnify the
Transfer Agent, the Fund, any other eligible Funds, State Street Research
Shareholder Services, the Investment Manager or the Distributor for any loss or
liability from acting or relying upon such instructions and information. The
terms and conditions of the currently effective Selected Dealer Agreement or
sales agreement are included by reference in this section. The dealer represents
that it may lawfully sell shares of the designated Fund(s) in the state
designated as the Applicant's address of record, and that it has a currently
effective selected dealer agreement with a Distributor authorizing the Dealer to
sell shares of the Fund and the Eligible Funds.
- --------------------------------------------------------------------------------
Optional Shareholder Services
- --------------------------------------------------------------------------------
A Telephone Exchange Privilege
To exchange Fund shares over the telephone--available only for shares held on
deposit with Agent.
Telephone Exchange By Shareholder OR DEALER
State Street Research Shareholder Services may effect exchanges for my account
according to telephone instructions FROM ME OR MY DEALER as set forth in the
Prospectus, and may register the shares of the fund to be acquired exactly the
same as my existing account. Authorizing an exchange constitutes an
acknowledgment that I have received the current prospectus of the Fund to be
acquired.
I will not hold the Transfer Agent, the Fund, any other Eligible Funds, State
Street Research Shareholder Services, the Investment Manager or the Distributor
liable for any loss, injury, damage or expense as a result of acting upon any
telephone instructions or responsible for the authenticity of any telephone
instructions. I understand that all telephone calls are tape recorded. My
liability shall be subject to the use of reasonable procedures to confirm that
instructions communicated by telephone are genuine.
The account will automatically have this privilege unless you expressly decline
it by providing your initials below.
I do not want the Telephone Exchange Privilege.
(initial here.)
-----------------
B Do You Qualify For Reduced Sales Charges?
(Applies to Class A shares only)
/ / Right of Accumulation:
I apply for Right of Accumulation reduced sales charges for Class A share
purchases because the combined holdings for me and my family members in the
Eligible Funds (listed below) totals $100,000 or more. I understand the Transfer
Agent must confirm the holdings listed below.
Name on account Account number
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
/ / Letter of Intent:
I intend to invest / / $100,000, / / $250,000, / / $500,000, or
/ / $1,000,000 in any combination of the Eligible Funds
over a 13-month period beginning _________________ 19__
(purchase date not more than 90 days prior to this letter). If
the amount indicated is not invested within 13 months,
reduced sales charges do not apply.
<PAGE>
C Investamatic Check Program
To arrange automatic additional investments from a bank account into Fund
accounts. Accounts must first meet minimum initial investment requirements.
(Total annual contribution should not exceed $2,000 for an individual IRA.)
- --------------------------------------------------------------------------------
Fund name Account number
$ / / A / / B / / D
- --------------------------------------------------------------------------------
Amount (See prospectus for minimum) Share class*
- --------------------------------------------------------------------------------
Fund name Account number
$ / / A / / B / / D
- --------------------------------------------------------------------------------
Amount (See prospectus for minimum) Share class*
* Investments in Money Market Fund will purchase
Class E shares.
- --------------------------------------------------------------------------------
Account registration (exactly as it appears on Fund records)
Frequency of investment
/ / Monthly / / Quarterly
Investment date (if you don't choose a date, the 5th will be
chosen automatically)
/ / 5th business day / / 20th business day
I hereby request and authorize the bank named in this section ("the Bank") to
pay and charge checks drawn on, or debits against, my account initiated by and
payable to the transfer agent designated by the Distributor. I agree that the
Bank's rights in respect to each such check or debit shall be the same as if it
were a check drawn on or debit against my account authorized personally by me.
This authority is to remain in effect until revoked by me, and until the Bank
actually receives such notice, I agree that the Bank shall be fully protected in
honoring any such check or debit authorization. I further agree that if any
check or debit authorization be dishonored, whether with or without cause and
whether intentionally or inadvertently, the Bank shall be under no liability
whatsoever, unless the nonpayment is because of insufficient funds. I understand
that this Program may be revoked by the Agent or the Distributor without prior
notice if any check is not paid upon presentation, and that this Program may be
discontinued by the Distributor, the Agent or me upon thirty (30) business days'
notice prior to the due date of any deposit.
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.
Acceptance by the Trustee:
This plan 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 Shareholder Services, and delivered by
Shareholder Services to the agent for the Trustee.
Type of bank account:
/ / Checking / / NOW or Money Market / / Savings
- --------------------------------------------------------------------------------
Account title (print exactly as it appears on bank records)
- --------------------------------------------------------------------------------
Bank routing number Bank account number
- --------------------------------------------------------------------------------
Bank name
- --------------------------------------------------------------------------------
Bank street address
- --------------------------------------------------------------------------------
City State ZIP
1944
4-122/100
________________ 19____
______________________________________________________________/ $
______________________________________________________________ DOLLARS
Staple a blank check marked "VOID" here
_________________________________________________________________________
1505
================================================================================
Once completed, send application and check (if you are making a contribution at
this time) made payable to "State Street Bank and Trust Company, Trustee" to:
State Street Research Shareholder Services
P.O. Box 8408
Boston, MA 02266-8408
================================================================================
[LOGO] STATE STREET RESEARCH
<PAGE>
- --------------------------------------------------------------------------------
[LOGO] State Street Research IRA
Lump Sum Profile
- --------------------------------------------------------------------------------
Registered Representative Information
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Firm name
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
City State ZIP
- --------------------------------------------------------------------------------
Telephone Fax
================================================================================
Registered representative, return form to:
State Street Research Investment Services
Attn: Marketing Analysis Department
One Financial Center, 3rd Floor
Boston, MA 02111
Or fax to: 1-617-261-0288
================================================================================
Client Information
- --------------------------------------------------------------------------------
Name
/ /
- --------------------------------------------------------------------------------
Date of lump-sum distribution Age Date of birth
- --------------------------------------------------------------------------------
Spouse's age Age to start income payments (maximum age 70 1/2)
Exempt from early distribution penalty? / / yes / / no
$
- --------------------------------------------------------------------------------
Year you entered plan Total taxable distribution
$
- --------------------------------------------------------------------------------
Number of exemptions Other taxable income in year of distribution
(income after deductions and exemptions)
$
- --------------------------------------------------------------------------------
Other taxable income during payout period
(income after deductions and exemptions)
Tax filing status / / single / / joint / / head of household
%
- --------------------------------------------------------------------------------
Inflation rate (for 15% penalty tax exclusion)
(3% assumed unless otherwise indicated)
%
- --------------------------------------------------------------------------------
Federal income tax bracket (if none elected, 28% assumed)
%
- --------------------------------------------------------------------------------
Your state income tax rate
- --------------------------------------------------------------------------------
Rate of return to assume (5% unless otherwise indicated)
Investment Information
What is your investment objective? (check all that apply)
/ / Aggressive growth
/ / Growth
/ / Growth and income
/ / Current income
[LOGO] STATE STREET RESEARCH
<PAGE>
- --------------------------------------------------------------------------------
[[LOGO] State Street Research IRA
IRA Distribution Form
- --------------------------------------------------------------------------------
1 IRA owner information
(Please print or type.)
- --------------------------------------------------------------------------------
Today's date
- --------------------------------------------------------------------------------
IRA account number
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Daytime phone number
- --------------------------------------------------------------------------------
Address (P.O. Boxes may not be used)
- --------------------------------------------------------------------------------
City State ZIP
/ /
- --------------------------------------------------------------------------------
Social security number/taxpayer identification number Date of birth
2 Oldest primary designated beneficiary
(If you wish to add beneficiaries, please attach a separate list.)
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Relationship
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
City State ZIP
/ /
- --------------------------------------------------------------------------------
Social security number/taxpayer identification number Date of birth
3 Account balance on December 31:
If you transferred or rolled over your IRA from another
retirement plan this year, please provide its account
balance as of December 31 of the prior year.
$______________
4 Type of Distribution
(Choose one. For Class "B" or "D" shares, a contingent
deferred sales charge may apply.)
/ / A. Regular distribution
I am age 59 1/2 or older and wish to withdraw $_____________
(To establish a Systematic Withdrawal Plan, fill out
section 5.)
/ / B. Disability
I wish to withdraw $_____________
I have attached a copy of Schedule R from my tax return
or a confirmation letter from my physician.
(To establish a Systematic Withdrawal Plan, fill out section 5.)
/ / C. Death of IRA shareholder
Withdrawal amount: $______________
The beneficiary should complete this form and enclose a
certified copy of the shareholder's death certificate.
(To establish a Systematic Withdrawal Plan, fill out section 5.)
/ / D. Withdrawal of excess contribution
Year excess contribution was made: 19_____.
Withdrawal amount: $______________
/ / E. Pre-59 1/2 distribution
I wish to withdraw $
I understand that a 10% tax penalty may apply on the
amount of the withdrawal includable in income.
/ / F. Pre-59 1/2 distribution with substantially equal
periodic payments
(If you have any questions, contact your investment
representative or tax adviser, or call State Street Research
at 1-800-562-0032. State Street Research does not guarantee
or give any assurance that the pre-59 1/2 distribution with
"substanially equal periodic payments" will qualify for an
exception to the 10% penalty tax.)
/ / I have made the calculations to determine substantially
equal periodic payments from my IRA account. I understand
that if I modify the withdrawal plan before the end of
5 years, or before I reach age 59 1/2, whichever occurs later,
the IRS may impose a retroactive 10% penalty on
payments includable in income with interest.
Payment amount $__________________
Payment frequency:
/ / Monthly / / Quarterly / / Semiannually / / Annually
/ / Make the calculations for me based on:
/ / My individual life expectancy.
/ / Joint life expectancy with my designated beneficiary.
Payment frequency:
/ / Monthly / / Quarterly / / Semiannually / / Annually
/ / G. Post-70 1/2 - Required minimum distribution
(choose one.)
/ / I wish to receive my entire IRA account balance.
/ / I am already taking the required minimum distribution
from another IRA. Please take no action.
/ / I have calculated the amount of my required distribution.
Payment amount $__________________
Payment frequency:
/ / Monthly / / Quarterly / / Semiannually / / Annually
/ / Make the calculations for me based on:
/ / My individual life expectancy.
/ / Joint life expectancy with my designated beneficiary.
/ / A fixed number of years:_____________ years
Payment frequency:
/ / Monthly / / Quarterly / / Semiannually / / Annually
Payments to begin:____________________(month/year)
Note: to begin payments in the month indicated,
State Street Research must receive this form at least
three weeks prior to the first payment.
/ / H. Income distributions
Choose only one. (Not available if you are under age 59 1/2.
If you choose this option, you may not choose a Systematic
Withdrawal Plan. Please note: this may not be enough to satisfy
minimum distribution rules if you are over age 70 1/2.)
/ / Dividends in cash
/ / Dividends and capital gain distributions in cash
<PAGE>
5 Systematic Withdrawal Plan
Please base my systematic withdrawal payments on
the following (choose only one). For Class "B" or "D"
shares, a contingent deferred sales charge may apply.
/ / My individual life expectancy.
Do you wish us to recalculate this each year? / / Yes / / No
/ / Joint life expectancy with my designated beneficiary.
Do you wish us to recalculate this each year? / / Yes / / No
/ / A fixed number of years:_________________years
Do you wish us to recalculate this each year? / / Yes / / No
/ / A fixed dollar amount: $____________________
/ / A fixed number of shares:___________________
/ / A fixed percentage:_________________________%
Payment frequency:
/ / Monthly / / Quarterly / / Semiannually / / Annually
Payments to begin:___________________________(month/year)
Note: to begin payments in the month indicated, State Street
Research must receive this form at least three weeks prior to
the first payment.
6 Distribute To:
/ / Mail to IRA owner, at address of record
/ / Deposit to the following (non-retirement) State Street
Research mutual fund account
- --------------------------------------------------------------------------------
Fund name:
- --------------------------------------------------------------------------------
Account number:
/ / Open a new (non-retirement) account in the following
mutual fund from State Street Research:
- --------------------------------------------------------------------------------
Fund
/ / A / / B / / D
- --------------------------------------------------------------------------------
Share class*
/ / Other payee:
- --------------------------------------------------------------------------------
Name of bank (Automatic Bank Connection) or payee
- --------------------------------------------------------------------------------
Bank account number (if applicable)
- --------------------------------------------------------------------------------
Street address
- --------------------------------------------------------------------------------
City State ZIP
Attach a blank check marked "Void" if distribution
is to be made to your bank.
* Investments in Money Market Fund will purchase
Class E shares.
7 Substitute Form W-4P
Withholding Election:
(This section must be completed.)
Instructions: Check the first box if you do not want federal
tax withheld from each IRA distribution. If you elect no withholding,
your election will remain in effect until revoked; you
may change your election by writing to State Street Research
Shareholder Services. Check the second box to have withholding
apply. Even if you elect not to have federal tax withheld,
you are liable for payment of federal tax on the taxable portion
of your IRA distribution. You may also be subject to tax penalties
under the estimated tax payment rules if your payments
of estimated tax and withholding are not adequate. Some
states may also require us to withhold state income tax from
these withdrawals.
We encourage you to consult with your tax adviser regarding
your IRA distributions.
/ / I elect not to have tax withheld from each distribution.
/ / I elect to have 10% tax withheld from each distribution.
Also, please withhold an additional________________% or $____________
from each distribution.
- --------------------------------------------------------------------------------
Signature of IRA owner Date
8 Authorizations and signatures:
I authorize the Transfer Agent to act upon my
instructions for both the options I have checked
on this form and the withholding elections I
have indicated:
- --------------------------------------------------------------------------------
Signature of IRA owner
- --------------------------------------------------------------------------------
Printed name of IRA owner
Signature Guarantee
- --------------------------------------------------------------------------------
Name of bank or eligible guarantor
- --------------------------------------------------------------------------------
Authorized signature of bank or eligible guarantor
- --------------------------------------------------------------------------------
Title
A signature guarantee is required if you are directing a
distribution to an address other than your address of record or
to a payee other than yourself. Signatures may be guaranteed
by a bank, a member of a domestic stock exchange, or other
eligible guarantor. Notarizations are not acceptable.
================================================================================
Return this signed and dated form to:
State Street Research Shareholder Services
P.O. Box 8408
Boston, MA 02266-8408
================================================================================
[LOGO] STATE STREET RESEARCH
<PAGE>
- --------------------------------------------------------------------------------
[LOGO] State Street Research IRA
Pre-59 1/2 Distribution Information Request Form
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Client's Name
/ / / /
- --------------------------------------------------------------------------------
Date Date of Birth
$
- --------------------------------------------------------------------------------
Current Account Balance(1)
Payout Mode (Circle) A S Q M
/ /
- --------------------------------------------------------------------------------
Beneficiary's Date of Birth (Optional)(2)
================================================================================
Registered representative, return form to:
State Street Research Investment Services
Attn: Marketing Analysis Department
One Financial Center, 3rd Floor
Boston, MA 02111
Or fax to: 1-617-261-0288
================================================================================
- --------------------------------------------------------------------------------
Representative's Name
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
( )
- --------------------------------------------------------------------------------
Telephone Number
( )
- --------------------------------------------------------------------------------
Fax Number
Unless otherwise indicated, response will be to the
fax number above.
Comments:
(1) Account balance at end of prior month or current balance
for this month. Factors are valid for current balances and
current month only. However, factors can be used for
planning purposes for withdrawals in the future. When actual
withdrawals are to commence, the client's age, account
balance and actual month will be used for factor calculations.
(2) While the age of the beneficiary can be used for factor
calculations, usually a single life quotation will maximize
the payouts.
[LOGO] STATE STREET RESEARCH P59TT (2/95)
<PAGE>
[LOGO] STATE STREET RESEARCH
(C)1995 State Street Research Investment Services, Inc. Boston, MA 02111
CONTROL NUMBER: 2251-950331(0496)SSR-LD IR-082E-395
<PAGE>
- --------------------------------------------------------------------------------
[LOGO] State Street Research IRA
Transfer of Assets/Direct Rollover Form
- --------------------------------------------------------------------------------
Once completed, send the top two copies of this form and a State Street Research
IRA Application to: State Street Research Shareholder Services, 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 after you reach age
70 1/2.
1 Your name and address
(Please print.)
- --------------------------------------------------------------------------------
Your name
- --------------------------------------------------------------------------------
Street address
- --------------------------------------------------------------------------------
City State ZIP
- --------------------------------------------------------------------------------
Home telephone number Business telephone number
/ /
- --------------------------------------------------------------------------------
Social security number/taxpayer identification number Date of birth
2 Your fund selections at
State Street Research
Fund Name Account number Share class* Amount
(if applicable)
/ / A / / B / / D
- --------------------------------------------------------------------------------
/ / A / / B / / D
- --------------------------------------------------------------------------------
/ / A / / B / / D
- --------------------------------------------------------------------------------
*Money Market Fund investments will purchase Class E shares.
3 Direct Rollover of Eligible Rollover
Distributions (complete if applicable)
(Sent trustee-to-trustee, from a retirement plan
elsewhere to an IRA at State Street Research)
Type of current plan:
/ / 403(b) / / 401(k) / / Pension plan / / Other
- --------------------------------------------------------------------------------
Account number
- --------------------------------------------------------------------------------
Name and address of current trustee/custodian
4 Transfer of Assets (complete if applicable)
(From an IRA at another company to an
IRA at State Street Research)
- --------------------------------------------------------------------------------
Name and address of current trustee/custodian
- --------------------------------------------------------------------------------
Fund name IRA account number
- --------------------------------------------------------------------------------
Fund name IRA account number
5 Authorization
(To authorize your current Trustee/custodian to
transfer/rollover your qualified plan or IRA assets to
State Street Research)
Please redeem / / all or / / part ($__________ ) of my present
account and transfer the redemption proceeds to my State
Street Research IRA account / / immediately / / at maturity.
- --------------------------------------------------------------------------------
Your signature Date
- --------------------------------------------------------------------------------
Employer's signature (if required) Date
6 Signature guarantee
(Ask your current custodian/trustee if it requires
your signature to be guaranteed.)
Signature guaranteed by:
- --------------------------------------------------------------------------------
Name of bank/eligible guarantor
- --------------------------------------------------------------------------------
Authorized signature of bank or eligible guarantor
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 Shareholder Services, 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 accounts. State Street Research Shareholder Services
will deliver the items to the agent for State Street Bank and Trust Company,
who 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.
CONTROL NUMBER: 2237-950331(0496)SSR-LD IR 139E-395
[LOGO] STATE STREET RESEARCH
Exhibit (14)(b)
[FRONT COVER]
[State Street Research Logo]
403(b)
Retirement--The Key Is Planning Now
As a working person, you have a decision to make--how to protect your current
earnings and provide for a comfortable retirement.
Social Security may not be adequate. Currently, average monthly benefits
are around $675.* And, as the retired population grows in proportion to
the number of workers paying into the fund, Social Security may become
less reliable. In fact, in many places, employees of state or local
governments do not participate in Social Security.
Taxable savings plans may not be adequate either. Both the money you set
aside and the interest it earns are taxed at current rates--just when
you're at peak income levels.
*Source: Social Security Administration.
A Good Way To Plan For Retirement
A State Street Research 403(b) Account is a good way for employees of
private tax-exempt organizations such as hospitals or colleges, and
employees of public schools or colleges, to build financial resources
for retirement. If you are such an employee, you should consider a
403(b) account.
The 403(b) Advantage--Lower Income Taxes
Contributions to your State Street Research 403(b) Account are not
subject to current federal income tax, within the limits allowed by the tax
laws. This reduces your current federal income tax liability and increases your
spendable income, compared to a taxable savings program. Many states
exclude 403(b) contributions from state income taxes as well.
This chart shows the benefits of saving with a 403(b) account. In each
instance, the employee plans to save 10% of income, or $5,000. This
example shows only federal income tax savings. You may also save on
state income taxes.
Saving Outside 403(b) Saving With 403(b)
Salary $50,000 Salary $50,000
Income Taxes 9,353 403(b) Savings 5,000
- ---------------------------- -------------------------------
After-Tax Income 40,647 Taxable income 45,000
Savings 5,000 Income Taxes 7,953
- ---------------------------- -------------------------------
Spendable Income $35,647 Spendable Income $37,047
With 403(b), you have $1,400 more in spendable income!
The 403(b) Advantage--Tax-Free Accumulation
The interest and other investment earnings accumulating in your 403(b)
account compound tax deferred until you begin making withdrawals from your
account. This can mean greater overall returns than with taxable
investments.
<PAGE>
------------------------ LINE CHART ------------------------------
Taxable vs. Tax-free Accumulation
The chart at right
illustrates what
happens when monthly investments of $125
grow at 7% and 5%
tax free for 10 years,
versus the same
taxable investments
growing at 7% and 5%
for 10 years in the 28%
tax bracket. All
distributions are
reinvested. Sales
charges, if any are
not reflected.
($ in Thousands)
$21,501 Tax deferred 7%
$19,413 Taxable 7%
$19,375 Tax deferred 5%
$18,018 Taxable 5%
The chart illustrates general advantages of tax-deferral. Returns are
hypothetical and are for illustrative purposes only; they are not
intended to imply or guarantee a rate of return on any mutual fund or
other investment.
----------------------------------------------------------------
State Street Research Mutual Funds
Your 403(b) contributions will be invested in the State Street Research
fund(s) of your choice. State Street Research offers a variety of mutual
funds, each managed to meet a specific investment objective, such as
growth or income.
Corporate Heritage
State Street Research has a history dating to 1924, with the founding of
the nation's second oldest mutual fund. Today the Company manages over
$27 billion in assets.
How To Get Started
The following questions and answers will give you important information
about your State Street Research 403(b) Account. Simply follow the
instructions on the back cover to set up your account.
Questions And Answers About Your
403(b) Account
Eligibility
Who can have a 403(b) account?
Only employees of an organization described in Section 501(c)(3) of the
Internal Revenue Code may have a 403(b) account. These include non-
profit charitable, educational, scientific or religious organizations,
such as hospitals or colleges. Also, an employee of a state or local
government who is employed by a school (for example, a local school
system or state college or university) can have a 403(b) account. Check
with your employer to determine whether you qualify for a 403(b)
account.
<PAGE>
What happens if I change employers?
If your new employer is a qualified employer, you may continue to
contribute to your 403(b) account after changing jobs. If your new
employer is not a qualified organization, you may no longer make
contributions to your 403(b) account, but your account will continue to
accumulate tax free until you begin making withdrawals. Contact
State Street Research Shareholder Services for additional information:
1-800-562-0032.
Contributions
How do I make contributions to my 403(b) account?
Usually, you would enter into a salary reduction agreement with your
employer that specifies the amount you want to contribute. Your
compensation will be reduced by this amount and the money will be
contributed by your employer to your 403(b) account. In some cases, your
employer may make contributions to your 403(b) account as a retirement
benefit for you.
Your employer may already have a salary reduction agreement for you to
use. If not, a form of salary reduction agreement is included in your
State Street Research 403(b) Package. Read the form for an explanation
of IRS restrictions on changing the amount of your salary reduction.
Maximum Contribution
How much can be contributed each year to my 403(b) account?
Determining your maximum 403(b) contribution is complex because several
different tax law limits apply depending on your individual situation.
For most employees, the maximum salary reduction contribution for a
calendar year will be the smaller of 20% of your compensation or $9,500.
In the future, the $9,500 limit may be indexed for inflation each year.
Employees of certain kinds of qualified employers (for example, public
schools and private tax-exempt schools, colleges, hospitals and home-
health agencies) can elect different limits in some situations. Also,
long-service employees (15 or more years of service) of such employers
may have increased limits.
Your employer's benefits or personnel department, or the business
office, may be available to calculate your maximum contribution. If not,
you may use the worksheet enclosed in your State Street Research 403(b)
Package. You may wish to consult an accountant or tax adviser to confirm
your maximum contribution.
What happens if I exceed the maximum for a year?
If you exceed the $9,500 limit for a year, you should request State
Street Research to return the excess contribution to you with earnings.
You should make your request no later than March 1 of the following
year.
<PAGE>
If your contributions for a year exceed any of the other limits, you
must include the excess in your income for federal income tax purposes.
In addition, you may have to pay a penalty tax equal to 6% of the
"excess contribution." The penalty tax also applies to excess
contribution amounts left over from prior years.
You can avoid paying the penalty tax if you withdraw the amount of the
excess from your account before the end of the year in which the excess
contribution was made.
Even if you have to pay the penalty tax in one year, you can avoid paying it in
later years by contributing less than your maximum for the later year; the
excess is reduced by the difference between the maximum and the actual
contribution.
Investments
What are my investment choices?
Contributions to your 403(b) account may be invested in one or more of
the eligible mutual funds distributed by State Street Research.
Also, you can exchange amounts from one fund to another. (You can even
choose telephone exchange privileges when completing your State Street
Research 403(b) Account Application.) There may be minimum investment
amounts for certain funds, or there may be sales charges. Such minimums
or charges are described in the prospectus(es).
Before investing, be sure to read the current prospectus(es) for the
funds in which you are interested so that you can be familiar with the
investment objectives and policies, and the sales charges or other
charges applicable to a Fund.
May I transfer my existing 403(b) to State Street Research?
Yes. Complete the Transfer of 403(b) Assets Form found in your State
Street Research 403(b) Package. Be sure to note the requirements for a
tax-free transfer described in the Form. Consult your personnel or
benefits department or your tax adviser for additional information.
What about an IRA?
You can have an IRA even though you are contributing to a 403(b)
account. Depending on your income level, contributions to an IRA may or
may not be deductible on your federal income tax return. For more
information about our IRAs, call State Street Research Shareholder
Services: 1-800-562-0032.
<PAGE>
Withdrawals From Your Account
When will I begin to receive retirement benefits from my account?
You choose when to make withdrawals from your 403(b) account. However,
withdrawals may not begin until you have retired or terminated
employment with your employer; reached age 59-1/2 (even though you are
still employed by your employer); or died. Earlier withdrawals are
permitted only if you become disabled or suffer a financial hardship
(as defined by IRS regulations). Consult your tax adviser, as tax
penalties may result. You may be requested to verify disability with a
doctor's certificate or a Social Security disability benefits award.
You may be asked to verify financial hardship by a certificate from an
independent person appointed by your employer, and financial hardship
withdrawals are limited to the amount of your salary reduction
contributions (no earnings or investment gains). You must begin making
withdrawals by April 1 of the year following the year when you reach
age 70-1/2. This is required even if you are still working.
Use the Withdrawal Form to notify State Street Research when you wish to
begin making withdrawals from your account.
How will the benefits be paid to me?
Benefits will be paid to you either in a lump-sum payment or in periodic
(monthly, quarterly, or annual) installments. Installment payments may
not extend beyond your life expectancy or the joint life expectancy of
you and your designated beneficiary.
Also, there are minimums on the amount of installments you must receive
after age 70-1/2. There are substantial penalty taxes (up to 50%) if you
do not make the minimum required withdrawals.
What happens to my account if I die?
Your account balance goes to the beneficiary(ies) you designate on the
403(b) application or on another written document you send to State
Street Research Shareholder Services. You can change your
beneficiary(ies) in writing. Naming a beneficiary(ies) can have estate
and tax-planning implications; consult a qualified professional.
Withdrawals by a beneficiary(ies) are also subject to rules relating to
when withdrawals must begin and minimums for installment withdrawals.
Taxes
How will I be taxed on withdrawals from my 403(b)?
Generally, amounts withdrawn from your account are taxed as ordinary
income in the year when received. In addition, with limited exceptions,
such as disability, amounts withdrawn before age 59-1/2 are subject to
an additional 10% penalty tax.
Special five-year averaging, applicable to lump-sum distributions from
certain retirement plans, does not apply to 403(b).
<PAGE>
Certain very large withdrawals (generally over $150,000 in a year--
counting all 403(b) and IRA withdrawals and distributions to you from
qualified retirement plans) may be subject to a 15% penalty tax.
There may be income tax withholding on the amounts you withdraw. If you
withdraw an amount from your State Street Research 403(b) Account that
is eligible for rollover (see next question), mandatory 20% federal
income tax withholding will apply unless the withdrawn amount is rolled
directly to another 403(b) arrangement or to an IRA. If the amount you
withdraw is not eligible for rollover to another 403(b) arrangement or
IRA, 10% withholding of federal income tax will apply unless you elect
no withholding on your Withdrawal Form.
Can I postpone federal income tax on a withdrawal from my 403(b)
account?
In certain situations, you can defer income taxes on withdrawals from
your 403(b) account if all or part of the withdrawal is rolled over to
another 403(b) account or into an IRA either directly by State Street
Research (direct rollover) or by you (regular rollover) within 60 days.
All withdrawals are eligible for rollover (either a direct rollover or a
regular rollover) except minimum required withdrawals after age 70-1/2
and withdrawals over a period of at least 10 years or over the life
expectancy of you (or you and your designated beneficiary).
Caution: Rollovers must meet technical IRS requirements that cannot be
described in detail here. Consult your employer or tax adviser for
assistance in carrying out a rollover.
If a withdrawal is eligible for rollover and if you do not elect a
direct rollover, the Custodian must withhold 20% of your withdrawal for
federal income taxes. The rollover and withholding rules also apply to
your surviving spouse if he or she receives a distribution from your
account upon your death.
Be certain to carefully read the notice on tax treatment and withholding
on withdrawals that accompanies the Withdrawal Form for more
information.
What about other taxes?
Contributions under a salary reduction agreement will be subject to
Social Security withholding if you are covered by Social Security.
State tax treatment varies from state to state. You should consult your
tax adviser with any questions on how a 403(b) account would affect your
state taxes.
IMPORTANT. The preceding questions and answers are general and are
provided for informative purposes only. Always consult your tax adviser
for advice on how the tax laws apply to you and how a State Street
Research 403(b) account will affect your tax situation. More information
is available in IRS Publication 571, Tax-Sheltered Annuity Plans for
Employees of Public Schools and Certain Tax-Exempt Organizations; this
publication is available from the IRS.
<PAGE>
How To Start Your State Street Research 403(b) Account
1. Carefully read the material describing the State Street Research
403(b) Account and the prospectus(es) for the fund(s) in which you plan
to invest. You may want to review the material with your accountant,
lawyer or other tax adviser because the rules under Section 403(b) are
complex and subject to change.
2. If contributions to your 403(b) Account will be made under a salary
reduction agreement, you should fill out, and you and your employer
should sign, a salary reduction agreement. If your employer does not
have a form of salary reduction agreement for use with employees, you
may use the sample Salary Reduction Agreement found in the State Street
Research 403(b) package.
3. Complete and sign the State Street Research 403(b) Account
Application. Be sure to complete the beneficiary section of the
Application.
4. If you are transferring your current 403(b) assets to State Street
Research, complete and sign the Transfer of Assets Form.
5. Mail the completed and signed Application (and the Transfer of Assets
Form, if used) to:
State Street Research Shareholder Services
P.O. Box 8408
Boston, MA 02266-8408
Enclose a check in the amount of $10.00 payable to State Street Bank and
Trust Company, Custodian, to cover the first year's annual maintenance
fee for the account; otherwise the fee will be charged to your account.
There is a $10.00 annual maintenance fee for each calendar year (the fee
is not prorated for less than a full calendar year). We will forward the
necessary materials to the Custodian.
This brochure must be preceded or accompanied by the relevant fund
prospectus(es), which includes investment policies, sales charges and
expenses. Please read the prospectus(es) carefully before investing.
[State Street Research logo]
(C)1995 State Street Research Investment Services, Inc. Boston, MA 02111
Control Number: 2717-951025(1196)SSR-LD RP-923C-1095
<PAGE>
[BACK COVER]
(C)1995 State Street Research Investment Services, Inc., Boston, MA 02111
CONTROL NUMBER: 2713-951025(1196)SSR-LD RP-921C-1095
[FRONT COVER]
[State Street Research logo]
403(b)
Maximum Salary
Reduction Worksheet
Maximum Salary Reduction Worksheet
This worksheet will help you compute the maximum amount by which you can reduce
your salary without exceeding any of the limits. Before doing the calculations,
you may wish to check with your Employer's benefits or personnel department or
business office. Often these departments will calculate an employee's 403(b)
maximum.
If you use the worksheet to do your own calculation, read the
information following the worksheet first. After completing the
worksheet, you should consult your accountant, lawyer or other
professional tax adviser to verify your calculation or answer your
questions. The tax laws change often and individual situations can vary.
Also, certain exceptions and rules that apply only in relatively rare
situations are not covered by the worksheet. This worksheet and the
questions and answers following it are not intended to be tax advice,
and you are responsible for meeting the tax law limits
on contributions to your 403(b) account.
To help you, the example demonstrates a typical salary reduction situation and
the worksheet provides spaces for your own computations. This worksheet and the
questions and answers are designed to help you determine your maximum salary
reduction. If your employer will make contributions on your behalf as an
addition to your salary, or if you will contribute by foregoing an increase in
compensation, there are different formulas to determine your maximum. If this
situation applies to you, your Employer should be able to help you calculate the
limits that apply to you.
In the example, a college teacher will earn $40,000 in 1995. She will
have worked for the college 15 years at the end of 1995. The college has
previously contributed $20,000 on her behalf to its 403(b) retirement
plan ($18,000 of which was contributed in the most recent 10 years). The
college will contribute 10% of her salary ($4,000) to its retirement
plan for 1995. In addition, the employee reduced her salary in prior
years by a total of $10,000 for contribution to her 403(b) account. How
much can this employee reduce her salary for 1995?
Step 1 - Determine the Exclusion Allowance
(example) (your computation)
(a) Enter your expected
salary for the current
year before reduction
for contributions to
your 403(b) account. $40,000 ___________________
(b) Enter your number
of years of service
(including whole
and fractional years)
as of the end of the
current year. 15 ____________________
(c) Multiply (a) by (b)
by .20. $120,000 ____________________
(d) Enter the amount of
your salary reduction
contributions and
employer contributions
for you to a 403(b)
retirement plan or to a
qualified retirement plan
in prior years. $ 30,000 _____________________
<PAGE>
(e) Enter amount of
contributions by
your employer
for you to a 403(b)
retirement plan for
the current year. $ 4,000 ______________________
(f) Subtract (d) and (e)
from (c). $ 86,000 ______________________
(g) Multiply your years
of service in (b) by .20
and add 1. 4 ______________________
(h) Divide (f) by (g) to
determine your
exclusion allowance
for the year. $ 21,500 ______________________
Step 2 - Determine the Section 415 General Limitation
(a) Multiply your expected
salary (before reduction
for contributions to your
403(b) account) for the
current year by .20. $ 8,000 ______________________
(b) Multiply amount of
your employer's
expected contributions
for you for the current
year to a 403(b) retire-
ment plan by .80. $ 3,200 ______________________
(c) Subtract (b) from
(a)to determine your
Section 415 general
limitation (but not
in excess of $30,000). $ 4,800 ______________________
Step 3 - Determine the Section 415 Alternatives
Alternative A
Available if employee
terminates service;
same as exclusion
allowance but based
on last ten years of
service with employer,
up to a maximum
of $30,000. $ 16,000 ______________________
Alternative B
(a) Enter the exclusion
allowance determined
in Step 1. $ 21,500 ______________________
(b) Add $3,200 to the Section
415 general limitation
determined in Step 2. $ 8,000 ______________________
(c) Enter $15,000. $ 15,000 $ 15,000
<PAGE>
(d) Your alternative B
limitation is the
smallest of (a),
(b) or (c). $ 8,000 ______________________
Alternative C
Enter the Section 415
general limitation
determined in Step 2. $ 4,800 ______________________
Step 4 - Apply the $9,500 Limit
(a) Enter $9,500. $ 9,500 $9,500
(b) If eligible (see Question 14
below), use the smallest
of the following:
(i) $ 3,000 $ 3,000 $3,000
(ii) $15,000 reduced
by increases to the
$9,500 limit you
used in prior years. $ 15,000 ______________________
(iii) $5,000 multiplied
times years of service,
reduced by all prior
salary reduction
contributions to a
403(b) account or
annuity or to a
401(k) plan. $ 65,000 $_____________________
(c) Add the amount
determined in (b)
to $9,500; this is
your limit for the
year under this step. $ 12,500 $_____________________
Step 5 - Determine the maximum salary reduction
(a) Enter your exclusion
allowance from step 1. $ 21,500 ______________________
(b) Enter your Section 415
general limitation
from step 2. $ 4,800 ______________________
(c) Enter the lesser
of (a) or (b). $ 4,800 ______________________
(d) Enter Alternative A
if applicable. $ 16,000* ______________________
(e) Enter Alternative B. $ 8,000 ______________________
(f) Enter Alternative C. $ 4,800 ______________________
(g) Enter the largest
of items (c), (d),
(e) or (f). $ 8,000* ______________________
<PAGE>
(h) Enter the $9,500
limit (Step 5(c)). $ 12,500 $_____________________
(i) Enter the smaller
of (g) or (h).
This is your maxi-
mum salary reduc-
tion for this year. $ 8,000 ______________________
*Alternative A is not available to the employee in the example because
she is not terminating employment.
For this employee, the Alternative B limit of $8,000 is the largest for
this year. Keep in mind that the alternative election, which appears
most advantageous in this year may not necessarily be the best for you
over the long run. See Questions 9 and 12.
Step 6 - Salary Reduction Agreement
Enter a salary reduction agreement with your Employer, which reduces
your compensation each pay period so that the correct amount is
contributed to your State Street Research 403(b) Account.
QUESTIONS AND ANSWERS ON
CALCULATING YOUR MAXIMUM
Maximum Contribution
1. What is the maximum annual contribution to my 403(b) account?
The maximum contribution you can exclude from your taxable income
(sometimes called your "maximum exclusion allowance"
or "MEA") is the smaller of your "403(b) exclusion allowance" (Questions
2-5) or your "415 limit" (Questions 6-12). Finally, your salary
reduction contributions for a year cannot exceed $9,500; this is
increased for certain employees (Questions 13 and 14).
Exclusion Allowance
2. How do I compute my "exclusion allowance"?
Use the following steps to compute your 403(b) exclusion allowance:
(a) Take 20 percent of your expected salary for the current
year (before reduction for your 403(b) contributions, but
after reduction for salary reduction contributions under a
cafeteria or flexible benefits plan or 401(k) plan if your
employer maintains such a plan).
(b) Multiply (a) by your number of years of service with your
current employer as of the end of the current year.
(c) Subtract the following total from (b):
(bullet) your total 403(b) salary reduction contributions
in previous years (which you excluded from your
income),
(bullet) your employer's contributions in previous years on
your behalf to a 403(b) retirement plan or to a
qualified retirement plan,
<PAGE>
(bullet) your employer's expected contributions to a 403(b)
retirement plan for you for the current year (see
Questions 15 and 16).
(d) Divide (c) by the sum of one plus 20 percent of your years
of service as of the end of the current year.
The resulting figure is the amount of your exclusion allowance for the
current year.
3. What if I do not know how much my employer has contributed in
previous years on my behalf to a retirement plan?
If you cannot learn this from the benefits or personnel office of your
employer, IRS regulations provide a method for determining the amount of
your employer's prior contributions. Consult your employer or tax
adviser for further information.
Years of Service
4. How do I determine my years of service?
Count one year of service for each full year you were a full-time
employee. Count a fraction of a year of service for years in which you
were a part-time employee or did not work a full year. Add your full and
fractional years of service together to determine your total years of
service. Only service with your current employer can be counted.
Part-time Fraction. For part-time work, the fraction is your work
schedule divided by the normal work schedule for a full-time employee
holding the same position. For example, if for a year you taught one
course for six hours per week, and a full-time teacher normally teaches
18 hours per week, your fraction would be one-third of a year.
Partial Year Fraction. If you were a full-time employee for part of the year,
the fraction is the number of weeks or months you worked divided by the number
of weeks or months in your employer's annual work period. For example, if you
taught full-time for four and one-half months and your employer's annual work
period is an academic year of nine months, your fraction would be one-half of a
year.
Part-time, Partial Year Fraction. If you were a part-time employee for
part of a year, calculate one fraction as though you were a part-time
employee for a full year and one fraction as though you were
a full-time employee for a part of a year. Then multiply the two
fractions together to obtain your fractional year of service. For
example, if you taught a course for six hours per week for one semester
at a school where full-time teachers taught 18 hours per week for two
semesters, your fractional year of service would be one-sixth (part-time
fraction of one-third times full-time for part-of-a-year fraction of
one-half).
5. What if I have less than one year of service?
Under the law, you may compute your exclusion allowance based on one
year of service even if you have worked for your employer for less than
a year or if your fractional years of service total less than a year.
<PAGE>
415 Limits
6. What are the 415 limits?
The 415 limits are from Section 415 of the Internal Revenue Code. The
415 limits apply even though your 403(b) exclusion allowance for the
year is greater. Section 415 has a general limit and certain
alternatives that may permit a larger maximum.
7. How do I compute the 415 general limit?
Your 415 general limit is the smaller of:
(a) 20 percent of your compensation for the year (before
reduction for contributions to your 403(b) account, but
after reduction for salary reduction contributions under
any cafeteria or flexible benefits plan or 401(k) plan your
employer maintains); this amount must be reduced by 80% of
your employer's contribution for the year to the 403(b)
retirement plan; or
(b) $30,000. (This $30,000 figure will eventually be indexed
for cost-of-living changes. However, the indexing will not
begin for some years depending on future inflation.)
415 Alternatives
8. What are the 415 alternatives?
In the past, many employees eligible for 403(b) did not enter into
salary reduction agreements because they expected to make large "catch-
up" contributions later. The 415 general limit might prevent those
employees from saving enough for their retirement years. To remedy this
situation, 415 provides certain alternatives.
These alternatives are available only to employees of an educational
organization, a hospital, a home health service agency, a health and
welfare service agency, or a church or association of churches. If you
do not work for such an employer, you can skip Questions 9 through 12.
9. How many alternatives are there?
Section 415 provides three alternatives:
Alternative A may be used only once, in the year you leave the
service of your employer. Under this alternative, the 415
percentage limitation (see Answer 7(a)) is disregarded and you
may calculate your 403(b) exclusion allowance using your years
of service with your employer up to a maximum of ten years. The
$30,000 limit still applies, however, even if your exclusion
allowance is higher.
In other words, under this alternative, you are limited to your
403(b) exclusion allowance based on a maximum of ten years of
service, or $30,000, whichever is less.
Alternative B is the smallest of:
(a) the amount of your 403(b) exclusion allowance;
(b) 20 percent of your compensation (before reduction for
contributions to your 403(b) account) plus $3,200;
(c) $15,000
<PAGE>
Alternative C is to disregard the 403(b) exclusion allowance
altogether. Under this alternative, contributions are subject
only to the 415 general limit described in Answer 7.
Finally, there is a separate alternative available only to an employee
of a church or association of churches: to replace the 415 general limit
with the limit of $10,000 per year (up to a cumulative total
of $40,000).
10. Are there any special rules for electing one of the alternatives?
Yes. You may elect only one of the three alternatives. If you elect one
of the alternatives, you may not elect either of the other
alternatives in any future year.
Alternative A (for the year of separation) may be elected only once. If
you elect this alternative in any year, you may not elect an
alternative at any time in the future.
If you elect an alternative, your election is irrevocable for that year.
However, you may elect either alternative B or C in one year,
choose not to use it in the following year, and then elect the same
alternative again in the third year.
11. How do l elect an alternative?
You elect an alternative simply by computing your income tax
liability in a manner consistent with the alternative.
12. Which alternative is best for me?
This depends upon your current compensation, expected future
compensation, years of service, expected future years of service,
expected ability to make future salary reduction contributions, and so
forth. An alternative which appears advantageous this year may restrict
contributions to your 403(b) account in later years. Only you can decide
which alternative is most advantageous to you.
The $9,500 Cap
13. Where did the $9,500 limit come from?
In the Tax Reform Act of 1986, Congress decided to limit salary
reduction contributions by employees. For 403(b), Congress chose a
$9,500 cap. This $9,500 cap applies as a maximum salary reduction
contribution even though your 403(b) exclusion allowance or 415 limit is
higher. This cap applies only to your salary reduction contributions,
not to employer contributions to a 403(b) retirement plan for you.
The $9,500 cap is indexed for future cost-of-living increases.
However, the cap will not increase for some years; exactly when depends
on future inflation rates.
14. Who qualifies for an increased $9,500 cap?
Congress realized that the $9,500 cap would affect employees who
expected to make "catch-up" contributions. Therefore, an increased cap
is available to some employees.
There are two requirements for an increased cap. First, your employer
must be one of the types listed in Answer 8. Second, you must have 15 or
more years of service with the employer. If you qualify, your $9,500 cap
is increased by the smallest of the following:
(a) $3,000;
<PAGE>
(b) $15,000 (reduced by all amounts by which your $9,500 cap
was increased in prior years under this special rule); or
(c) $5,000 multiplied by your number of years of service, minus
all previous salary reduction contributions under 403(b)
(or under any 401(k) plan in which you participated).
Additional Rules for an Employee with Another Retirement Program
15. If for the current year my employer or any other employer contributes to
another 403(b) account or annuity for me, must such contributions be added to my
salary reduction contributions when determining my maximum contribution?
Yes. To determine your 403(b) exclusion allowance, your 415 limit or one
of the alternatives (but not the $9,500 cap--only your salary reduction
contributions count against the $9,500 cap), your employer's current
contributions to a 403(b) plan or arrangement for you must be included.
(See the Worksheet for an example of this situation). If your employer
has a retirement plan, you should find out whether it is a 403(b) plan.
16. If for the current year my employer makes contributions for me to a
retirement plan that is "qualified" under section 401(a) of the Code,
must such contributions be counted when determining my maximum
contribution?
If this situation applies to you, you should consult your tax adviser.
The following is only a general summary of the rules governing
aggregation of contributions to your 403(b) account with contributions
to a qualified plan.
Contributions for you to a qualified plan during the current year by an
employer are not counted in determining your 403(b) exclusion allowance
this year.
However, for your 415 limit, the answer depends on whether you have
elected one of the 415 alternatives and on whether you
"control" your employer.
If you have not elected an alternative, or if you have elected
alternative A or B, you need not combine contributions to your 403(b)
account with contributions on your behalf to a qualified plan of the
same or any other employer unless you control the employer by owning a
50% or greater interest.
If you have elected alternative C (to disregard the exclusion allowance
entirely), you must count contributions to your 403(b) account with
contributions for you to a qualified retirement plan maintained by any employer
regardless of whether you "control" the employer.
<PAGE>
State Street Research 403(b)
Account Application
How to open your
State Street
Research 403(b)
Account
1. To open a State Street Research 403(b) Account, please complete
this side of the Application.
2. Your investment dealer must complete the dealer information
section of the Application.
What type of State
Street Research
403(b) are you
opening?
[ ] Regular 403(b) [ ] Transfer of Assets [ ] Regular Rollover
or Direct Rollover
Employee
information
Complete the following
information about
yourself. Your account
will be registered in
your name.
Name ___________________________________ Birth date______________________
Street___________________________________________________________________
City_____________________________________State___________ZIP_____________
Social Security #________________________________________________________
Daytime telephone #______________________________________________________
Employer
information
Complete the following
information about your
Employer.
Name_____________________________________________________________________
Street___________________________________________________________________
City_____________________________________State___________ZIP_____________
Name of contact person___________________Daytime telephone #_____________
Which Fund(s)
have you selected
for your 403(b)?
See the State Street
Research 403(b)
brochure and relevant
prospectus(es) for
Fund details.
Name of Fund Class of Shares Percentage
A B D
[ ] [ ] [ ] _______ %
- ---------------------------------------
[ ] [ ] [ ] _______ %
- ---------------------------------------
[ ] [ ] [ ] _______ %
- ---------------------------------------
[ ] [ ] [ ] _______ %
- ---------------------------------------
[ ] [ ] [ ] _______ %
- ---------------------------------------
Total 100%
<PAGE>
Who is the
beneficiary of
your State Street
Research 403(b) Account?
1. Name__________________________________Birth date______________________
Relationship to you___________________________________________________
Street________________________________________________________________
City__________________________________State___________ZIP_____________
Social Security #_____________________________________________________
Percentage to this beneficiary ____%
2. Name__________________________________Birth date______________________
Relationship to you___________________________________________________
Street________________________________________________________________
City__________________________________State___________ZIP_____________
Social Security #_____________________________________________________
Percentage to this beneficiary ____%
Important
Naming a beneficiary(ies) can have estate and tax-planning implications.
Also, if you are married and live in a community property state (AZ, CA,
ID, LA, NM, NV, TX, or WA), you may need your spouse's consent to
designate someone else as beneficiary for more than half of your
Account. Consult your attorney, or other qualified professional, for
additional advice.
Keep a copy of this account application with your other important papers
(such as your will).
Telephone Exchange
The Telephone Exchange Privilege is available only for shares held on
deposit with the Transfer Agent. None of the Transfer Agent, any of the
Funds, State Street Research Shareholder Services, the Investment
Manager or the Distributor will be liable for any loss, injury, damage
or expense as a result of acting upon, and will not be responsible for
the authenticity of, any telephone instructions. I understand that all
telephone calls are tape recorded. My liability shall be subject to the
use of reasonable procedures to confirm that instructions communicated
by telephone are genuine.
<PAGE>
Telephone Exchange
by Shareholder
or Dealer
The Transfer Agent may effect exchanges for my account according
to telephone instructions from me or my Dealer as set forth in the
prospectus, and may register the shares of the Fund to be acquired
exactly the same as my existing account. Authorizing an exchange
constitutes an acknowledgment that the shareholder has received
the current prospectus of the Fund to be acquired. The account will
automatically have this privilege unless it is expressly declined by
providing your initials in the space below.
I DO NOT WANT THE TELEPHONE EXCHANGE PRIVILEGE.
___(Initial here.)
Sign here to
establish the
403(b) Account
I hereby establish a State Street Research 403(b) Account, the terms of
which are contained in this Application and the State Street Research
403(b) Agreement (which I have received and which is incorporated herein
by reference) and appoint State Street Bank and Trust Company as
Custodian. I direct that contributions to my 403(b) Account be invested
as specified above in this Application (until changed by me
in accordance with the Agreement), designate the individual(s) named
above as my beneficiary(ies) (unless I have filed a separate written
designation with the Custodian or its agent), acknowledge that I have
received a current prospectus(es) of the Fund(s) indicated above, and
acknowledge that there is a $10 annual maintenance fee (in addition
to any fees and charges described in the prospectus(es)).
Under penalties of perjury, I certify that (1) the number shown on this
Application 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.
Certification Instructions--You must cross out item (2) above if you have
been notified by the IRS that you are currently subject to backup
withholding because of underreporting interest or dividends on your
tax return.
Employee signature_____________________________Date___________________
<PAGE>
Dealer information
and signature
guarantee
Please have your
investment dealer
fill out this section.
Dealer firm__________________________________________________________
Home office address_________________City__________State______ZIP_____
Branch office address_______________City__________State______ZIP_____
Telephone #______________Branch #_____________Rep. #_________________
Authorized dealer signature__________________________________________
Investment Dealer's last name________________________________________
If this Application is for an account introduced through the
above-named Dealer, the Dealer further agrees to all applicable
provisions in this Application and in the prospectus(es) of the
Fund(s) selected by the Employee, represents that it has provided a
current prospectus(es) to the Employee and that the Application is
properly executed by a person authorized by the Dealer to guarantee
signatures. The Dealer warrants that this Application is completed in
accordance with the Employee's instructions and agrees to indemnify
the Funds(s), the Distributor, the Investment Manager, State Street
Research Shareholder Services and the Transfer Agent for any loss or
liability from acting or relying upon such instructions and
information. The terms and conditions of the Distributor's currently
effective Selected Dealer Agreement or sales agreement are included by
reference in this section. The Dealer represents that it has a
currently effective Selected Dealer Agreement or sales agreement with
the Distributor authorizing the Dealer to sell shares of the Fund(s),
and that it may lawfully sell shares of the designated Fund(s) in the
state designated as the Employee's address of record.
State Street Bank
and Trust Company,
Custodian
You are hereby authorized and appointed on behalf of the above-signed
dealer to execute purchase transactions in accordance with the terms and
conditions of this Application, and to confirm each purchase.
Acceptance by
the Custodian
This Account will be deemed to have been accepted by the Custodian,
State Street Bank and Trust Company, after all necessary forms, properly
completed, are received by State Street Research Shareholder
Services and delivered by Shareholder Services to the Transfer Agent.
Send completed application to:
State Street Research Shareholder Services
P.O. Box 8408
Boston, MA 02266-8408
Control Number: 2709-951025(1196)SSR-LD RP-918C-1095
<PAGE>
State Street Research 403(b)
Salary Reduction Agreement
Parties
Complete the information
about the Employee and
the Employer.
Employee name______________________________________
Social Security #__________________________________
Employer name______________________________________
Check one box.
[ ] Original Agreement [ ] Modification
Agreements
Fill in the dollar amount
or percentage that you
want to contribute in
section 2.
The Employee and the Employer agree as follows:
1. The Employee has signed the State Street Research 403(b) Account
Application establishing the Account for the benefit of the
Employee. The Employee and the Employer are entering into this
salary reduction agreement ("this Agreement") to provide for
contributions to the Account.
2. The Employee requests, and the Employer agrees, to reduce the
compensation of the Employee by $______ or by ______% per pay
period, starting with the first pay period that begins after the
Employee and the Employer have signed this Agreement.
3. As soon as possible after each pay day, the Employer will transmit
the amount by which the Employee's compensation is reduced for that
pay period to the agent for the Custodian of the Employee's
Account, to be credited to the Employee's Account in accordance
with the State Street Research 403(b) Account Agreement. For
federal income tax purposes, such amounts are considered Employer
contributions to the Employee's Account.
Where to send
contributions.
Checks should be made payable to "State Street Bank and Trust Company,
Custodian, FBO __________________________ [insert name of Employee]
403(b) Account." Mail checks to State Street Research, P.O. Box
8408, Boston, MA 02266-8408.
OVER >
<PAGE>
4. This Agreement will be effective only with respect to compensation
not yet earned by the Employee, and not with respect to
compensation already earned by the Employee on the date this
Agreement is signed.
This Agreement is binding and irrevocable with respect to
compensation earned by the Employee while this Agreement is in
effect. The Employer or the Employee may terminate this Agreement
at any time with respect to compensation not yet earned by the
Employee at the date of termination, by giving written notice to
the other party. After termination, the Employee may reinstate this
Agreement (with the same or a different salary reduction amount);
however, the Employee may not reinstate this Agreement during the
same calendar year that the Employee (or Employer) terminated this
Agreement.
The Employee may modify the amount of salary reduction elected in
Paragraph 2 above at any time by giving the Employer signed
instructions specifying the new salary reduction amount. However,
the Employee may not modify this Agreement during the same calendar
year that the Employee originally signed this Agreement or in any
calendar year when the Employee has already modified this Agreement
once during such year.
5. Unless the Employer agrees to calculate the Employee's maximum
403(b) contribution, the Employer has no responsibility for
determining that the amount by which the Employee's compensation is
reduced, as set forth in Paragraph 2 above, does not exceed the
limitations applicable to the Employee under the Internal Revenue
Code. The Employee agrees to indemnify the Employer, State Street
Research Investment Services, Inc., and its affiliates for any and
all charges, expenses, taxes, interest or penalties imposed on the
Employer as a result of any reduction in compensation in excess of
such limitations.
Signatures
In witness whereof, the parties hereto have signed this Agreement
on______________________________, 19_______.
Employee Employer
(Signature)______________ (Name of employer)___________________________
By:_________________________________________
Signature and title of authorized official)
CONTROL NUMBER: 2711-951025(1196)SSR-LD RP-920C-1095
<PAGE>
State Street Research 403(b)
Transfer of 403(b) Assets Form
How to transfer
your existing
403(b) Account
to State Street
Research
(bullet) If you don't have a State Street Research 403(b) Account
yet, complete this transfer form and a State Street Research
403(b) Account Application.
(bullet) If you already have a State Street Research 403(b) Account,
just complete this transfer form.
(bullet) When completed, send this transfer form (and if necessary,
your 403(b) Account Application) to: State Street Research
Shareholder Services, P.O. Box 8408, Boston, MA 02266-8408.
Information
about you
Name______________________________Social Security #__________________
Telephone (day)___________________Telephone (night)__________________
Account number (If you already have a State Street Research 403(b)
Account)_____________________________________________________________
Where is your
403(b) Account
now?
Name of current Custodian/Insurer____________________________________
Address______________________________________________________________
City_____________________________State__________________ZIP__________
Account number_____________________Name of mutual fund or fund family
(if applicable)______________________________________________________
Please tell us
which Fund(s)
you have selected
for your 403(b)
investment
[ ] This is a new State Street Research 403(b) Account. My
investment choices are on my 403(b) Account Application.
[ ] I already have a State Street Research 403(b) Account. Please
invest the amount transferred as follows:
Fund name___________________________Account number____________ _____%
Fund name___________________________Account number____________ _____%
I acknowledge that I have received a current prospectus(es) of the
Fund(s) selected.
OVER >
<PAGE>
Please authorize
transfer of your
current 403(b)
Account to State
Street Research
To my current Custodian/Insurer: Please redeem
[ ] ALL or [ ] PART ($_________) of my current 403(b) and transfer
the proceeds in cash to my State Street Research 403(b) Account.
(For partial transfers, indicate which investments are to be liquidated.)
Your signature______________________________Date____________
Note: Under current IRS rulings, a transfer from another 403(b) account
to a State Street Research 403(b) Account will be a tax-free transaction
as long as the withdrawal restrictions under your existing 403(b) are
not more severe than those under the State Street Research 403(b)
account (see Section 5.2 of the State Street Research 403(b) Agreement).
By signing this form, you are certifying that this transfer will be a
tax-free transaction under the preceding sentence.
Signature
Guarantee
A signature guarantee may be required. Call your current Custodian/
Insurer for requirements.
Signature guaranteed by (name of bank or dealer firm)__________________
Signature and title of officer_________________________________________
PLEASE DO NOT FILL OUT THE FOLLOWING PORTION OF THIS FORM
Directions
to Current
Custodian/Insurer
Please liquidate and transfer on a fiduciary-to-fiduciary basis all or
part of the designated account as instructed above. Make check payable
to State Street Bank and Trust Company, Custodian.
Include the following account number and FBO on the check.
Account number________________________Name____________________________
Mail to: State Street Research Shareholder Services,
P.O. Box 8408, Boston, MA 02266-8408
Include a copy of this Transfer of 403(b) Assets Form with the check for
proper credit to the customer's account. State Street Research
Shareholder Services will deliver the items to Boston Financial Data
Services, Inc., which serves as Agent for the Custodian.
Successor
Custodian
State Street Bank and Trust Company will accept the transfer described
above once this form has been completed by you and the transfer has been
completed by your current 403(b) Custodian/Insurer.
______________________________________________________________________
Authorized signature of acceptance Date
by State Street Research Shareholder
Services on behalf of State Street Bank and Trust Company, Custodian
CONTROL NUMBER: 2707-951025(1196)SSR-LD RP-919C-1095
Exhibit (17)
First Amended and Restated
Multiple Class Expense Allocation Plan
WHEREAS, State Street Research Money Market 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 (i) is authorized to issue shares of beneficial
interest ("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) is or may be authorized to divide the Shares within each such
series into two or more classes;
WHEREAS, the Trust has established one or more portfolio series as of
the date hereof (such portfolios being referred to collectively herein as the
"Initial Series", such series, together with all other series subsequently
established by the Trust and made subject to this Plan, being referred to herein
individually as a "Series" and collectively as the "Series"), and such Series,
and Series of affiliated investment companies, have or may establish classes
thereof designated as "Class A," "Class B," "Class C," "Class D" and "Class E"
shares;
WHEREAS, prior to the adoption of Rule 18f-3 by the Securities and
Exchange Commission the Trust received an Order from the Securities and Exchange
Commission under Section 6(c) of the Act for an exemption from Sections
2(a)(32), 2(a)(35), 18(f), 18(g), 18(i), 22(c) and 22(d) of the Act and Rule
22c-1 thereunder to permit the Trust to issue multiple classes of shares
representing interests in the same portfolio of securities, assess a contingent
deferred sales charge ("CDSC") on certain redemptions of shares, and waive the
CDSC in certain cases; and
WHEREAS, the Trustees have determined to operate under Rule 18f-3 and
pursuant to such Rule the Board of Trustees as a whole, and the Trustees who are
not interested persons of the Trust (as defined in the Act) (the "Qualified
Trustees"), having determined in the exercise of their reasonable business
judgment this Plan is in the best interest of each class of the Initial Series
individually and the Initial Series as a whole, have accordingly approved this
Plan.
NOW, THEREFORE, Trust hereby adopts this Plan in accordance with Rule
18f-3 under the Act, on the following terms and conditions:
1. Class Differences. Each class of Shares of each Initial Series shall
represent interests in the same portfolio of investments of Initial Series and
shall be identical in all respects, and except as otherwise set forth in this
Plan, shall differ solely with respect to: (i) arrangements for shareholder
services or the distribution of Shares, or both, as provided for in Sections 2
and 3 of this Plan; (ii) the exclusive right of a Class to vote on certain
matters relating to the Plan of Distribution Pursuant to Rule 12b-1 adopted by
the Trust with respect to such Class; (iii) such differences relating to
purchase minimums, sales charges and eligible investors as may be set forth in
the Prospectuses and Statement of Additional Information of the Initial Series,
as the same may be amended or supplemented from time to time (the "Prospectuses"
and "SAI"); (iv) the different exchange privileges of the classes of Shares; (v)
the fact that only certain classes will have a conversion feature; and (iv) the
designation of each Class of shares.
2. Differences in Distribution and Shareholder Services. Each Class of
Shares of the Initial Series shall have a different arrangement for shareholder
services or the distribution of Shares, or both, as follows:
Class A Shares shall be sold subject to a front-end sales charge
as set forth in the Prospectuses and SAI with respect to the applicable Initial
Series. Class A, Class B and Class D Shares shall be sold subject to a
contingent deferred sales charge as set forth in the Prospectuses and SAI with
respect to the applicable Initial Series. Class A, B and D Shares shall be
subject to a service fee of up to 0.25% of the nets assets of the Initial Series
allocable to such Class of Shares. Class B and D Shares shall also be subject to
an annual distribution fee of up to 0.75% of the nets assets of the Initial
Series allocable to such Class of Shares. Such service and distribution fees may
be used to finance activities in accordance with Rule 12b-1 under the Act and
the Plan of Distribution pursuant to Rule 12b-1 adopted by the Trust.
3. Allocation of Expenses. Expenses of the Series shall be
allocated as follows:
(a) Class Expenses. Expenses relating to different arrangements
for shareholder services or the distribution of Shares, or both, shall be
allocated to and paid by that class. A class may pay a different share of other
expenses, not including advisory or custodial fees or other expenses related to
the management of a Series' assets, if such expenses are actually incurred in a
different amount by that class, or if the class receives services of a different
kind or to a different degree than other classes.
(b) Other Allocations. All expenses of the Series not allocated
to a particular class pursuant to Sections 2 and 3(a) of this Plan shall be
allocated to each class on the basis of the net asset value of that class in
relation to the net asset value of the Series or on the basis of the Dividend
Assets of that class in relation to the aggregate Dividend Assets of the Series
for periodic income distribution funds and daily income distributions funds,
respectively. "Dividend Assets" are defined as the net asset value of those
shares eligible to receive a dividend on the current day as set forth in the
Fund's prospectus. Notwithstanding the foregoing, the underwriter, adviser, or
other provider of services to a Series may waive or reimburse the expenses of a
specific class or classes to the extent permitted under Rule 18f-3 under the
Act; provided, however, that the Board shall monitor the use of such waivers or
reimbursements intended to differ by class.
4. Term and Termination.
(a) Initial Series. This Plan shall become effective with respect
to the multiple classes, if any, of the Initial Series as of May 5, 1995, and
shall continue in effect with respect to each Class of Shares of the Initial
Series (subject to Section 4(c) hereof) until terminated in accordance with the
provisions of Section 4(c) hereof.
(b) Additional Series or Classes. This Plan shall become
effective with respect to any class of the Initial Series other than Class A,
Class B, Class C, Class D, and Class E, and with respect to each additional
Series or class thereof established by the Trust after the date hereof and made
subject to this Plan, upon commencement of operations thereof or as otherwise
determined, and shall continue in effect with respect to each such additional
Series or class (subject to Section 4(c) hereof) until terminated in accordance
with the provisions of Section 4(c) hereof. An addendum hereto setting forth
such specific and different terms of such additional series of classes shall be
attached to this Plan.
(c) Termination. This Plan may be terminated at any time with
respect to the Trust or any Series or class thereof, as the case may be, by vote
of a majority of both the Trustees of the Trust and the Qualified Trustees. The
Plan may remain in effect with respect to a Series or class thereof even if it
has been terminated in accordance with this Section 4(e) with respect to such
Series or class or one or more other Series of the Trust.
5. Amendments. Any material amendment to this Plan shall require
the affirmative vote of a majority of both the Trustees of the Trust and the
Qualified Trustees.
Dated: May 8, 1996
m:\18f-3\Money.doc
Exhibit (20)
[State Street logo]
MUTUAL FUND ACCOUNT APPLICATION
Mail this application to State Street Research Shareholder Services, P.O. Box
8408, Boston, MA 02266-8408
_____________________________________________________________________________
1 Type of Account (PLEASE PRINT FULL NAME(S) CONSISTENT WITH YOUR SIGNATURE(S)
IN SECTION 5.)
[ ] Individual--complete (a) only [ ] Joint Tenant--complete (a & b)
[ ] Gift to a Minor--complete (c) only
[ ] Trust(1)--complete (d) only [ ] Corporation(1)--complete (e) only
[ ] Partnership/Other Entity--complete (e) only
Note: If the investment is to be used for an Individual Retirement Account
(IRA), a separate IRA application must be used. (1)Call 1-800-562-0032 for
additional forms.
Individual or Joint Tenant
a ______________________________________________________________-______-_______
Name of Investor Social Security Number
b _____________________________________________________________________________
Name(s) of Joint Tenant(s)
Gift to a Minor
as custodian for under the
c _____________________________________________________________________________
Name of Custodian (one only) Name of Minor (one only)
"Uniform Gifts to Minors Act"
________________________________________________________-____________-________
Minor's State of Residence Minor's Social Security Number
Trust Account
d _____________________________________________________________________________
Trustee(s) Name(s)
________________________________________________________-_____________________
Name and Date of Trust Agreement Tax Identification Number
Corporation, Partnership or Other Entity (Please include corporate
resolution.)
e _____________________________________________________________________________
Name of Corporation or Other Entity
________________________________________________________-_____________________
Type of Business (specify corporation, Tax Identification Number
partnership, estate, guardian, etc.)
_____________________________________________________________________________
2 Your Mailing Address (PLEASE PRINT.)
_____________________________________________________(___________)___________
Street Address Home Telephone Number
_____________________________________________________(___________)___________
City State ZIP Business Telephone Number
Residency [ ] U.S. (State _________________) [ ] Other ____________________
Specify Country
_____________________________________________________________________________
3 Fund Selection(s) and Distribution Option(s) (Choose only one distribution
option per Fund; see Fund prospectus for minimum initial investment
requirements.)
[ ] By Mail--Make check payable to "State Street Research" [ ] By Dealer
[ ] By Federal Funds Wire (Control #_________________)
<TABLE>
<CAPTION>
Class Wire Order
Fund Name Designation(2) Amount Distribution Option by Dealer
- ----------------------------------------------------------------------------------------------------------------------------
Dividends & Dividends in Dividends & Dividend
Capital Gains Cash; Capital Capital Gains Allocation Confirmation
A B D Reinvested Gains Reinvested(3) in Cash Plan (DAP)(4) Number
<S> <C> <C> <C> <C> <C> <C> <C>
_____________ [ ] [ ] [ ] $_____ [ ] [ ] [ ] [ ] ____________
_____________ [ ] [ ] [ ] $_____ [ ] [ ] [ ] [ ] ____________
_____________ [ ] [ ] [ ] $_____ [ ] [ ] [ ] [ ] ____________
_____________ [ ] [ ] [ ] $_____ [ ] [ ] [ ] [ ] ____________
</TABLE>
(2)All Money Market Fund investments will purchase Class E shares. Be sure to
designate share class for Money Market Fund DAP allocations.
(3)Does not apply to Money Market Fund.
(4)Dividend Allocation Plan: The Transfer Agent is authorized to invest all
dividends and distributions from_____________________________________________
Fund Name
in the following Eligible Fund:______________________________________________
Fund Name (Fund must Account Number
meet minimum investment (if existing
requirements) account)
Authorization of Dividend Allocation Plan constitutes an acknowledgment that
the shareholder has received the current prospectus of the Fund to be
acquired. Except for Money Market Fund Class E, DAP must be allocated to same
class designation.
<PAGE>
4 Reduced Sales Charges (Applies to Class A shares only)
[ ] Right of Accumulation (ROA): I apply for Right of Accumulation reduced
sales charges subject to the Transfer Agent's confirmation of the following
holdings of certain designated persons, e.g. family members, in the Eligible
Funds:
_____________________________________________________________________________
Name on Account Account Number
_____________________________________________________________________________
Name on Account Account Number
[ ] Letter of Intent (LOI): Although I am not obligated to purchase and the
Funds are not obligated to sell, I intend to invest over a 13-month period
beginning _______________, 19__ (purchase date not more than 90 days prior to
this letter) at least an aggregate of [ ] $100,000 [ ] $250,000 [ ] $500,000
[ ] $1,000,000 of Eligible Funds.
_____________________________________________________________________________
5 Your Signature (All registered shareholders must sign.)
I have received the current prospectus of the Fund and 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 the Fund.
Under penalties of perjury, I 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.
Certification instructions: You must cross out item (2) above if you have been
notified by the IRS that you are currently subject to backup withholding
because of underreporting interest or dividends on your tax return.
The Internal Revenue Service does not require your consent to any provision of
this document other than the certification required to avoid backup
withholding.
[Pencil graphic]
_____________________________________________________________________________
Signature of Shareholder (exactly as your name appears in Section 1) Date
[Pencil graphic]
_____________________________________________________________________________
Signature of Joint Tenant (if any) Date
6 Signature Guarantee and Dealer Information (Complete section (a) or (b) as
applicable.)
The undersigned guarantees the signature and legal capacity of the
shareholder.
a. Signature Guarantee (fill out if your Dealer does not complete section
below)
________________________________________ __________________________________
Name of Bank or Eligible Guarantor Street Address
________________________________________ __________________________________
Authorized Signature of Bank City State ZIP
or Eligible Guarantor
b. Dealer Information and Signature Guarantee (for Dealer use only)
________________________________________ __________________________________
Dealer Name Branch Office Number
________________________________________ __________________________________
Street Address of Home Office Address of Branch Office
Servicing Account
________________________________________ __________________________________
City State ZIP City State ZIP
________________________________________ __________________________________
Authorized Signature of Dealer Registered Representative's Name
and Number
If this application is for an account introduced through the above-named
Dealer, the Dealer agrees to all applicable provisions in this application and
in the Prospectus, and represents that it has provided a current Prospectus to
the Applicant and that the application is properly executed by a person
authorized by the Dealer to guarantee signatures. The Dealer warrants that
this application is completed in accordance with the shareholder's
instructions and agrees to indemnify the Fund, any other Eligible Funds, the
Distributor, the Investment Manager, State Street Research Shareholder
Services and the Transfer Agent for any loss or liability from acting or
relying upon such instructions and information. The terms and conditions of
the Distributor's currently effective Selected Dealer Agreement or sales
agreement are included by reference in this section. The Dealer represents
that it has a currently effective Selected Dealer Agreement or sales agreement
with the Distributor authorizing the Dealer to sell shares of the Fund and the
Eligible Funds, and that it may lawfully sell shares of the designated Fund(s)
in the state designated as the Applicant's address of record.
<PAGE>
Application for Optional Shareholder Services
Your Bank Account (You must complete this section if you request Section A, B,
D or E.)
Type of Bank Account: [ ] Checking [ ] NOW or Money Market
_____________________________________________________________________________
Account Title (print exactly as it Bank Routing Number
appears on bank records)
_____________________________________________________________________________
Bank Account Number Bank Name
_____________________________________________________________________________
Bank Address City State ZIP
_____________________________________________________________________________
Depositor's Signature(s) (exactly Date
as it appears on bank records)
_____________________________________________________________________________
Depositor's Address City State ZIP
YOU MUST ATTACH A BLANK CHECK MARKED "VOID."
_____________________________________________________________________________
A Telephone Redemption and Exchange Privileges (Service available only for
shares held on deposit with Transfer Agent) None of the Transfer Agent, the
Fund, any other Eligible Funds, State Street Research Shareholder Services,
the Investment Manager or the Distributor will be liable for any loss, injury,
damage or expense as a result of acting upon, and will not be responsible for
the authenticity of, any telephone instructions. I understand that all
telephone calls are tape recorded. My liability shall be subject to the use of
reasonable procedures to confirm that instructions communicated by telephone
are genuine.
Telephone Exchange By Shareholder OR DEALER
The Transfer Agent may effect exchanges for my account according to telephone
instructions FROM ME OR MY DEALER as set forth in the Prospectus, and may
register the shares of the fund to be acquired exactly the same as my existing
account. Authorizing an exchange constitutes an acknowledgment that the
shareholder has received the current prospectus of the fund to be acquired.
The account will automatically have this privilege unless it is expressly
declined by providing your initials in the space below.
I DO NOT WANT THE TELEPHONE EXCHANGE PRIVILEGE. ____ (Initial here.)
Telephone Redemption By Shareholder Only
1. Proceeds to Shareholder's Address of Record. The Transfer Agent may effect
redemptions of shares from my account according to telephone instructions from
me, as set forth in the Prospectus, and send the proceeds to my address of
record. The account will automatically have this privilege unless it is
expressly declined by providing your initials in the space below.
I DO NOT WANT THE TELEPHONE REDEMPTION PRIVILEGE (to address of record). ____
(Initial here.)
2. Proceeds to Bank Designated by Shareholder. The Telephone Redemption
Privilege (to bank designated by shareholder) is not provided automatically;
please check the box below if you want this Privilege for the account. ATTACH
A BLANK CHECK MARKED "VOID" AND FILL OUT "YOUR BANK ACCOUNT" SECTION.
The Transfer Agent may effect redemptions of shares from my account according
to telephone instructions from me, as set forth in the Prospectus, and send
the proceeds to the bank named in "Your Bank Account." [ ] (Check here.)
_____________________________________________________________________________
B Investamatic Check Program (YOU MUST ATTACH A BLANK CHECK MARKED "VOID.")
I hereby request and authorize the bank named in "Your Bank Account" section
to pay and charge checks drawn on, or debits against, my account initiated by
and payable to the order of the mutual fund transfer agent designated by the
Distributor. I agree that the named Bank's rights in respect to each such
check or debit shall be the same as if it were a check drawn on or debit
against my account authorized personally by me. This authority is to remain in
effect until revoked by me in writing, and until the named Bank actually
receives such notice, I agree that the named Bank shall be fully protected in
honoring any such check or debit authorization. I further agree that if any
check or debit authorization be dishonored, whether with or without cause and
whether intentionally or inadvertently, the named Bank shall be under no
liability whatsoever, unless the nonpayment is because of insufficient funds.
I understand that this Program may be revoked by the Transfer Agent or the
Distributor without prior notice if any check is not paid upon presentation,
and that this Program may be discontinued by the Distributor, the Transfer
Agent or me upon thirty (30) business days' notice prior to the due date of
any deposit.
$
_____________________________________________________________________________
Fund Name Class Designation Amount ($50 minimum) Account Number
$
_____________________________________________________________________________
Fund Name Class Designation Amount ($50 minimum) Account Number
______________________________________
Total Amount of Investment: $_________ Account Registration (exactly as it
appears on Fund records)
[ ] Monthly Investment Date: [ ] 5th or [ ] 20th If you do not choose a date,
[ ] Quarterly Investment Date: [ ] 5th or [ ] 20th the 5th will be chosen
automatically.
_____________________________________________________________________________
C Checkwriting Privilege
(Available for Class A shares and Money Market Fund Class E shares only)
[ ] I request the checkwriting feature and have completed the signature card
to the right.
_____________________________________________________________________________
Account Number (if existing account)
_____________________________________________________________________________
Account Number (if existing account)
Signature Card Complete and sign this card and return it with your application
and investment. Do not detach.
Check applicable Fund(s) TO: State Street Bank and Trust Company ("Bank")
[ ] Government Income
[ ] NY Tax-Free _______________________________________________
[ ] Money Market, Class E Name (please print)
[ ] High Income _______________________________________________
[ ] Tax-Exempt Name (please print)
_______________________________________________
Address City State ZIP
_______________________________________________
Signature (exactly as it appears in the
Application, including any capacity)
_______________________________________________
Signature (exactly as it appears in the
Application, including any capacity)
Indicate the number of signatures required_____
_________-_____________________________________
Tax Identification Number
Corporate and other accounts must include appropriate resolution forms. In
signing this signature card, the signator(s) signifies his/her or their
agreement to be subject to the rules and regulations of State Street Bank and
Trust Company pertaining thereto, as amended from time to time, and subject to
the conditions printed on the reverse side.
<PAGE>
_____________________________________________________________________________
D Automatic Bank Connection (ABC) Not available for retirement plan accounts.
YOU MUST ATTACH A BLANK CHECK MARKED "VOID."
[ ] I authorize the Transfer Agent to liquidate $____________ (minimum-$50)
from my fund account beginning the month of ____________ to provide
[ ] monthly, [ ] quarterly, [ ] semiannual or [ ] annual payments. I would
like the following payment to be deposited directly into the bank account
named in "Your Bank Account" section. (Choose only one.)
[ ] Income dividends only
[ ] Income dividends and capital gains
[ ] Systematic Withdrawal Plan payments (see below)
Specify Fund(s):
_____________________________________________________________________________
Fund Name Class Designation
_____________________________________________________________________________
Fund Name Class Designation
I hereby authorize the Fund and the Transfer Agent to effect the deposit of
the above indicated items by initiating credit entries to my account at the
bank named in "Your Bank Account" section. The named Bank shall not be
responsible for the correctness of the items, and the Transfer Agent is
authorized to correct and adjust any incorrect items to my bank account. This
authorization may be terminated at any time by written notification to the
Fund, the Transfer Agent and the Bank.
_____________________________________________________________________________
E Systematic Withdrawal Plan (SWP) Not available for retirement plan accounts.
See the prospectus for minimum account size and maximum withdrawal amounts.
YOU MUST ATTACH A BLANK CHECK MARKED "VOID."
[ ] I authorize the Transfer Agent to liquidate shares in and withdraw cash
(minimum-$50) from my fund account beginning the month of __________ to
provide [ ] monthly, [ ] quarterly, [ ] semiannual or [ ] annual Systematic
Withdrawal Plan (SWP) payments in the amount of $_________ to [ ] me, [ ] the
bank named in "Your Bank Account" section, or [ ] the following payee. (Note:
If you authorize a SWP, you may not receive dividend or capital gain
distributions in cash.)
_____________________________________________________________________________
Name of Payee
_____________________________________________________________________________
Street Address City State ZIP
Specify Fund(s):
_____________________________________________________________________________
Fund Name Class Designation
_____________________________________________________________________________
Fund Name Class Designation
The payment of monies is authorized by the signature(s) on the reverse side.
If the shareholder's account with the Fund is joint, all checks drawn upon
this account must include the signatures of all persons named in the account,
unless the persons signing this card have indicated on the reverse side of
this card that the Bank is authorized to accept any one signature. Each person
guarantees the genuineness of the other's signature. Checks may not be for
less than $500 or such other minimum or maximum amounts as may from time to
time be established by the Fund.
The Bank is hereby appointed agent by the person(s) signing this card (the
"Depositor(s)") and, as agent, is authorized and directed to present checks
drawn on this checking account to the Fund or its redemption agent as requests
to redeem shares of the Fund registered in the name of the Depositor(s) in the
amounts of such checks and to deposit the proceeds of such redemptions in this
checking account. The Bank shall be liable only for its own negligence.
Depositor(s) hereby authorize(s) the Fund or its redemption agent to honor
redemption requests presented in the above manner by the Bank. The Fund and
its redemption agent will not be liable for any loss, expense or cost arising
out of check redemptions. If shares of the Fund are purchased by check,
redemption proceeds will ordinarily be withheld until the Fund is reasonably
assured that payment has been collected on the check. The Bank has the right
not to honor checks in amounts exceeding the value of the depositor(s)
shareholder account at the time the check is presented for payment.
The Bank reserves the right to change, modify or terminate this checking
account at any time upon notification mailed to the address of record of the
Depositor(s).
CONTROL NUMBER: 3153-960524(0897)SSR-LD
SSR-414D-596
<PAGE>
[State Street Logo] [MetLife logo]
MUTUAL FUND ACCOUNT APPLICATION
Mail this application to MetLife Securities, Inc., P.O. Box 30421, Tampa, FL
33630
[ ] New Application [ ] Change--Account #
_____________________________________________________________________________
1 Type of Account (PLEASE PRINT FULL NAME(S) CONSISTENT WITH YOUR SIGNATURE(S)
IN SECTION 6.)
[ ] Individual--complete (a) only [ ] Joint Tenant--complete (a & b) only
[ ] Gift to a Minor--complete (c) only
[ ] Trust(1)--complete (d) only [ ] Corporation(1)--complete (e) only
[ ] Partnership/Other Entity--complete (e) only
Note: If the investment is to be used for an Individual Retirement Account
(IRA), a separate IRA application must be used.
(1)Call 1-800-638-8378 for additional forms.
Do you have any other mutual fund accounts with State Street Research?
[ ] Yes [ ] No
Individual or Joint Tenant
a ____________________________________________________________-________-_______
Name of Investor Social Security Number
b _____________________________________________________________________________
Name(s) of Joint Tenant(s)
Gift to a Minor
as custodian for under the
c _____________________________________________________________________________
Name of Custodian (one only) Name of Minor (one only)
"Uniform Gifts to Minors Act"
____________________________________________________________-________-_______
Minor's State of Residence Minor's Social Security Number
Trust Account
d _____________________________________________________________________________
Trustee(s) Name(s)
_________________________________________________________-___________________
Name and Date of Trust Agreement Tax Identification Number
Corporation, Partnership or Other Entity (Please include corporate resolution.)
e _____________________________________________________________________________
Name of Corporation or Other Entity
_________________________________________________________-___________________
Type of Business (specify corporation, Tax Identification Number
partnership, estate, guardian, etc.)
_____________________________________________________________________________
2 Your Mailing Address (PLEASE PRINT.)
_____________________________________________________(___________)___________
Street Address Home Telephone Number
_____________________________________________________(___________)___________
City State ZIP Business Telephone Number
Residency [ ] U.S. (State _________________) [ ] Other(2)__________________
Specify Country
(2)Call 1-800-638-8378 for additional forms.
_____________________________________________________________________________
3 Fund Selection(s) and Distribution Option(s) (Choose only one distribution
option per Fund; see Fund prospectus for minimum initial investment
requirements.)
[ ] By Mail--Make check payable to "State Street Research"
[ ] By Federal Funds Wire
<TABLE>
<CAPTION>
Class
Fund Name Designation(3) Amount Distribution Option
- -----------------------------------------------------------------------------------------------------------------------
Dividends & Dividends in Dividends & Dividend
Capital Gains Cash; Capital Capital Gains Allocation
A B(4) Reinvested Gains Reinvested(5) in Cash Plan (DAP)(6)
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------- [ ] [ ] $----- [ ] [ ] [ ] [ ]
- ----------------------- [ ] [ ] $----- [ ] [ ] [ ] [ ]
- ----------------------- [ ] [ ] $----- [ ] [ ] [ ] [ ]
- ----------------------- [ ] [ ] $----- [ ] [ ] [ ] [ ]
</TABLE>
(3)All Money Market Fund investments will purchase Class E shares. Be sure to
designate Class A or B shares for Money Market Fund DAP allocations.
(4)For purchase of Class B shares of more than $250,000, I hereby acknowledge
that I am aware of the reduced front-end sales charges available to me for the
purchase of Class A shares, and have chosen to purchase Class B shares. I am
aware that Class B shares have higher asset-based charges than Class A shares
for the first eight years.
(5)Does not apply to Money Market Fund.
(6)Dividend Allocation Plan: The Transfer Agent is authorized to invest all
dividends and distributions from_______________________________________________
Fund Name
in the following Eligible Fund:________________________________________________
Fund Name (Fund must Account Number
meet minimum investment (if existing
requirements) account)
Authorization of Dividend Allocation Plan constitutes an acknowledgment that the
shareholder has received the current prospectus of the Fund to be acquired.
Except for Money Market Fund Class E, DAP must be allocated to same class
designation.
<PAGE>
_____________________________________________________________________________
4 Reduced Sales Charges (Applies to Class A shares only)
[ ] Right of Accumulation (ROA): I apply for Right of Accumulation reduced
sales charges subject to the Transfer Agent's confirmation of the following
holdings of certain designated persons, e.g. family members, in the Eligible
Funds:
_____________________________________________________________________________
Name of Account Account Number
_____________________________________________________________________________
Name of Account Account Number
[ ] Letter of Intent (LOI): Although I am not obligated to purchase and the
Funds are not obligated to sell, I intend to invest over a 13-month period
beginning ___________________, 19__ (purchase date not more than 90 days prior
to this letter) at least an aggregate of [ ] $100,000 [ ] $250,000 [ ]
$500,000 [ ] $1,000,000 of Eligible Funds.
_____________________________________________________________________________
5 Optional Shareholder Services
Your Bank Account (You must complete this section if you request Section A, B,
C or D below.)
Type of Bank Account: [ ] Checking [ ] NOW or Money Market
_____________________________________________________________________________
Account Title (print exactly as it Bank Routing Number
appears on bank records)
_____________________________________________________________________________
Bank Account Number Bank Name
_____________________________________________________________________________
Bank Address City State ZIP
_____________________________________________________________________________
Depositor's Signature(s) (exactly as it appears on Date
bank records)
_____________________________________________________________________________
Depositor's Address City State ZIP
YOU MUST ATTACH A BLANK CHECK MARKED "VOID."
_____________________________________________________________________________
A Telephone Redemption and Exchange Privileges (Service available only for
shares held on deposit with Transfer Agent)
None of the Transfer Agent, the Fund, any other Eligible Funds, State Street
Research Shareholder Services, the Investment Manager or the Distributor will
be liable for any loss, injury, damage or expense as a result of acting upon,
and will not be responsible for the authenticity of, any telephone
instructions. I understand that all telephone calls are tape recorded. My
liability shall be subject to the use of reasonable procedures to confirm that
instructions communicated by telephone are genuine.
Telephone Exchange By Shareholder OR DEALER
The Transfer Agent may effect exchanges for my account according to telephone
instructions FROM ME OR MY DEALER as set forth in the Prospectus, and may
register the shares of the fund to be acquired exactly the same as my existing
account. Authorizing an exchange constitutes an acknowledgment that the
shareholder has received the current prospectus of the fund to be acquired.
The account will automatically have this privilege unless it is expressly
declined by providing your initials in the space below.
I DO NOT WANT THE TELEPHONE EXCHANGE PRIVILEGE. ____ (Initial here.)
Telephone Redemption By Shareholder Only
1. Proceeds to Shareholder's Address of Record. The Transfer Agent may effect
redemptions of shares from my account according to telephone instructions from
me, as set forth in the Prospectus, and send the proceeds to my address of
record. The account will automatically have this privilege unless it is
expressly declined by providing your initials in the space below.
I DO NOT WANT THE TELEPHONE REDEMPTION PRIVILEGE (to address of record).
____ (Initial here.)
2. Proceeds to Bank Designated by Shareholder. The Telephone Redemption
Privilege (to bank designated by shareholder) is not provided automatically;
please check the box below if you want this Privilege for the account. ATTACH
A BLANK CHECK MARKED "VOID" AND FILL OUT "YOUR BANK ACCOUNT" SECTION.
The Transfer Agent may effect redemptions of shares from my account according
to telephone instructions from me, as set forth in the Prospectus, and send
the proceeds to the bank named in "Your Bank Account." [ ] (Check here.)
<PAGE>
_____________________________________________________________________________
B Investamatic Check Program (YOU MUST ATTACH A BLANK CHECK MARKED "VOID.")
I hereby request and authorize the bank named in "Your Bank Account" section
to pay and charge checks drawn on, or debits against, my account initiated by
and payable to the order of the mutual fund transfer agent designated by the
Distributor. I agree that the named Bank's rights in respect to each such
check or debit shall be the same as if it were a check drawn on or debit
against my account authorized personally by me. This authority is to remain in
effect until revoked by me in writing, and until the named Bank actually
receives such notice, I agree that the named Bank shall be fully protected in
honoring any such check or debit authorization. I further agree that if any
check or debit authorization be dishonored, whether with or without cause and
whether intentionally or inadvertently, the named Bank shall be under no
liability whatsoever, unless the nonpayment is because of insufficient funds.
I understand that this Program may be revoked by the Transfer Agent or the
Distributor without prior notice if any check is not paid upon presentation,
and that this Program may be discontinued by the Distributor, the Transfer
Agent or me upon thirty (30) business days' notice prior to the due date of
any deposit.
$
_____________________________________________________________________________
Fund Name Class Designation Amount ($50 minimum) Account Number
$
_____________________________________________________________________________
Fund Name Class Designation Amount ($50 minimum) Account Number
________________________________________
Total Amount of Investment: $_________ Account Registration (exactly as it
appears on Fund records)
[ ] Monthly Investment Date: [ ] 5th or [ ] 20th If you do not choose a date,
[ ] Quarterly Investment Date: [ ] 5th or [ ] 20th the 5th will be chosen
automatically.
_____________________________________________________________________________
C Automatic Bank Connection (ABC) Not available for retirement plan accounts.
YOU MUST ATTACH A BLANK CHECK MARKED "VOID."
[ ] I authorize the Transfer Agent to liquidate $_______________ (minimum-$50)
from my fund account beginning the month of _________________ to provide [ ]
monthly, [ ] quarterly, [ ] semiannual or [ ] annual payments. I would like
the following payment to be deposited directly into the bank account named in
"Your Bank Account" section. (Choose only one.)
[ ] Income dividends only [ ] Income dividends and capital gains
[ ] Systematic Withdrawal Plan payments (see below)
_____________________________________________________________________________
Fund Name Class Designation
_____________________________________________________________________________
Fund Name Class Designation
I hereby authorize the Fund and the Transfer Agent to effect the deposit of
the above indicated items by initiating credit entries to my account at the
bank named in "Your Bank Account" section. The named Bank shall not be
responsible for the correctness of the items, and the Transfer Agent is
authorized to correct and adjust any incorrect items to my bank account. This
authorization may be terminated at any time by written notification to the
Fund, the Transfer Agent and the Bank.
_____________________________________________________________________________
D Systematic Withdrawal Plan (SWP) Not available for retirement plan accounts.
See the prospectus for minimum account size and maximum withdrawal amounts.
YOU MUST ATTACH A BLANK CHECK MARKED "VOID."
[ ] I authorize the Transfer Agent to liquidate shares in and withdraw cash
(minimum-$50) from my fund account beginning the month of _______________ to
provide [ ] monthly, [ ] quarterly, [ ] semiannual or [ ] annual Systematic
Withdrawal Plan (SWP) payments in the amount of $______________________ to [ ]
me, [ ] the bank named in "Your Bank Account" section, or [ ] the following
payee. (Note: If you authorize a SWP, you may not receive dividend or capital
gain distributions in cash.)
_____________________________________________________________________________
Name of Payee
_____________________________________________________________________________
Street Address City State ZIP
_____________________________________________________________________________
Fund Name Class Designation
_____________________________________________________________________________
Fund Name Class Designation
_____________________________________________________________________________
E Checkwriting Privilege
(Available for Class A shares and Money Market Fund Class E shares only)
[ ] I request the checkwriting feature and have completed the signature card
below.
_____________________________________________________________________________
Account Number (if existing account)
_____________________________________________________________________________
Account Number (if existing account)
Signature Card Complete and sign this card and return it with your application
and investment. Do not detach.
Check applicable Fund(s) TO: State Street Bank and Trust Company ("Bank")
[ ] Money Market, Class E _______________________________________________
[ ] High Income Name (please print)
[ ] Tax-Exempt _______________________________________________
[ ] Government Income Name (please print)
[ ] NY Tax-Free
_______________________________________________
Address City State ZIP
_______________________________________________
Signature (exactly as it appears in the
Application, including any capacity)
_______________________________________________
Signature (exactly as it appears in the
Application, including any capacity)
Indicate the number of signatures required_____
____-__________________________________________
Tax Identification Number
Corporate and other accounts must include appropriate resolution forms. In
signing this signature card, the signator(s) signifies his/her or their
agreement to be subject to the rules and regulations of State Street Bank and
Trust Company pertaining thereto, as amended from time to time, and subject to
the conditions printed on the reverse side.
<PAGE>
MetLife Securities, Inc. Customer Profile
1
_____________________________________________________________________________
Client's Name (or minor if U.G.M.A.) Age Social Security Number
_____________________________________________________________________________
Joint Tenant Name (if any, or custodian Age Social Security Number
if U.G.M.A.)
____________________________________________________ ______________________
Occupation State of Residence
Name/Address of Employer_____________________________________________________
_____________________________________________________
Is client an associated person of a broker/dealer? [ ] Yes [ ] No
If yes, furnish name and address_______________________________________________
2 Client's Estimated Annual Income (Not including income from this investment)
(N/A for UGMA, Trust, Partnership or Corp.) [ ] $0-9,999 [ ] $20-39,999
[ ] $60-79,999 [ ] $100,000-199,999 [ ] $10-19,999 [ ] $40-59,999
[ ] $80-99,999 [ ] $200,000+
3 Savings and Investments (Exclusive of personal residence, home furnishings,
personal automobiles, and the amount of this investment) (N/A for UGMA, Trust,
Partnership or Corp.) [ ] $0-9,999 [ ] $20-39,999 [ ] $60-79,999
[ ] $100,000-199,999 [ ] $400,000+ [ ] $10-19,999 [ ] $40-59,999
[ ] $80-99,999 [ ] $200,000-399,999
4 Net Worth (Assets minus liabilities exclusive of assets and liabilities
relating to personal residence, home furnishings and automobiles) (N/A for
UGMA, Trust, Partnership or Corp.) [ ] $0-9,999 [ ] $20-39,999 [ ] $60-79,999
[ ] $100,000-199,999 [ ] $400,000+ [ ] $10-19,999 [ ] $40-59,999
[ ] $80-99,999 [ ] $200,000-399,999
5 Main Investment Objective (select one)
[ ] Aggressive Growth [ ] Growth & Income [ ] Tax Advantages
[ ] Growth [ ] Current Income
Secondary Investment Objective (optional)
[ ] Aggressive Growth [ ] Growth & Income [ ] Tax Advantages
[ ] Growth [ ] Current Income
6 Source of Funds for This Investment
[ ] CD (Certificate of Deposit) [ ] Savings
[ ] Money Market Fund [ ] Surrender Life/Annuity Contract
[ ] Rollover/Transfer of Pension Assets [ ] Another MetLife Policy, Account
or Contract
[ ] Discretionary Income [ ] Loan [ ] Other_______
7 This account was: [ ] Solicited [ ] Unsolicited
8 Tax Status of These Funds: [ ] Qualified [ ] Non-Qualified
9 Prior Investment Experience: Stocks ____ yrs. Bonds ____ yrs.
Mutual Funds ____ yrs. Margin ____ yrs.
Limited Partnerships ____ yrs. Options ____ yrs.
Other ___________ None ____
Investor Receipt and Arbitration Agreement
1. Arbitration
(i) Arbitration is final and binding on the parties.
(ii) The parties are waiving their right to seek remedies in court, including
the right to jury trial.
(iii) Pre-arbitration discovery is generally more limited than and different
from court proceedings.
(iv) The arbitrators' award is not required to include factual findings or
legal reasoning and any party's right to appeal or to seek modification of
rulings by the arbitrators is strictly limited.
(v) The panel of arbitrators will typically include a minority of arbitrators
who were or are affiliated with the securities industry.
(vi) No person shall bring a putative or certified class action to
arbitration, nor seek to enforce any pre-dispute arbitration agreement against
any person who has initiated in court a putative class action; or who is a
member of a putative class who has not opted out of the class with respect to
any claims encompassed by the putative class action until: (i) the class
certification is denied; or (ii) the class is decertified; or (iii) the
customer is excluded from the class by the court. Such forbearance to enforce
an agreement to arbitrate shall not constitute a waiver of any rights under
this agreement except to the extent stated herein.
2. MetLife Securities, Inc. (hereinafter "MSI") and the purchaser of the
shares, who is the signatory below (hereinafter the "Customer"), agree that
any controversy between MSI, its employees, directors, agents, officers or
affiliates and the Customer arising out of or relating to any transactions
between such parties shall be determined by arbitration. Any arbitration
pursuant to this agreement shall be conducted before, and under the rules of,
the National Association of Securities Dealers, Inc. Judgment upon the award
of the arbitrators may be entered in any federal or state court having
jurisdiction.
3. This agreement and any arbitration hereunder shall be governed and
construed in accordance with the laws of the State of New York, United States
of America, including New York procedural and substantive arbitration laws and
rules, without giving effect to conflicts of law principles.
The predispute arbitration agreement located immediately above is accepted and
agreed to. I have also received the current prospectus of the fund and have
given a check in the amount of $_______________ on this, the ___________ day
of ____________________ 19__
_____________________________________ _____________________________________
Customer Signature (exactly as Registered Representative's Signature
your name appears in Section 1)
/s/ Ralph F. Verni
_____________________________________ _____________________________________
Customer Signature MetLife Securities, Inc.; by:
Ralph F. Verni, Chairman of the Board
_____________________________________ _____________________________________
Capacity
<PAGE>
_____________________________________________________________________________
6 Your Signature (All registered shareholders must sign.)
The undersigned confirms 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 the Fund.
Under penalties of perjury, I 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.
Certification instructions: You must cross out item (2) above if you have been
notified by the IRS that you are currently subject to backup withholding
because of underreporting interest or dividends on your tax return.
1. Arbitration
(i) Arbitration is final and binding on the parties.
(ii) The parties are waiving their right to seek remedies in court, including
the right to jury trial.
(iii) Pre-arbitration discovery is generally more limited than and different
from court proceedings.
(iv) The arbitrators' award is not required to include factual findings or
legal reasoning and any party's right to appeal or to seek modification of
rulings by the arbitrators is strictly limited.
(v) The panel of arbitrators will typically include a minority of arbitrators
who were or are affiliated with the securities industry.
(vi) No person shall bring a putative or certified class action to
arbitration, nor seek to enforce any pre-dispute arbitration agreement against
any person who has initiated in court a putative class action; or who is a
member of a putative class who has not opted out of the class with respect to
any claims encompassed by the putative class action until (i) the class
certification is denied; or (ii) the class is decertified; or (iii) the
customer is excluded from the class by the court. Such forbearance to enforce
an agreement to arbitrate shall not constitute a waiver of any rights under
this agreement except to the extent stated herein.
2. MetLife Securities, Inc. (hereinafter "MSI") and the purchaser of the
shares, who is the signatory below (hereinafter the "Customer"), agree that
any controversy between MSI, its employees, directors, agents, officers or
affiliates and the Customer arising out of or relating to any transactions
between such parties shall be determined by arbitration. Any arbitration
pursuant to this agreement shall be conducted before, and under the rules of,
the National Association of Securities Dealers, Inc. Judgment upon the award
of the arbitrators may be entered in any federal or state court having
jurisdiction.
3. This agreement and any arbitration hereunder shall be governed and
construed in accordance with the laws of the State of New York, United States
of America, including New York procedural and substantive arbitration laws and
rules, without giving effect to conflicts of law principles.
The predispute arbitration agreement located immediately above is accepted and
agreed to. I have also received the current prospectus of the fund and have
given a check in the amount of $_________ on this, the ________ day of
____________ 19__
The Internal Revenue Service does not require your consent to any provision of
this document other than the certification required to avoid backup
withholding.
_____________________________________ _____________________________________
Customer Signature (exactly as Registered Representative's Signature
your name appears in Section 1)
/s/ Ralph F. Verni
_____________________________________ _____________________________________
Customer Signature MetLife Securities, Inc.; by:
Ralph F. Verni, Chairman of the Board
_____________________________________ _____________________________________
Capacity
_____________________________________________________________________________
7 Dealer Information and Signature Guarantee (For Dealer use only)
The Dealer agrees to all applicable provisions in this application and in the
Prospectus, guarantees the signature and legal capacity of the shareholder,
and represents that it has provided a current Prospectus to the Applicant and
that the application is properly executed by a person authorized by the Dealer
to guarantee signatures. The Dealer warrants that this application is
completed in accordance with the shareholder's instructions and information
and agrees to indemnify the Fund, any other Eligible Funds, the Investment
Manager, the Distributor, State Street Research Shareholder Services and the
Transfer Agent for any loss or liability from acting or relying upon such
instructions and information.
Signature(s) Guaranteed By
MetLife Securities, Inc.
------------------------------------- -------------------------------------
Dealer Name Branch Office Number
P.O. Box 30421
------------------------------------- -------------------------------------
Address of Home Office Address of Branch Office Servicing
Account
Tampa, FL 33630
------------------------------------- -------------------------------------
City State ZIP City State ZIP
------------------------------------- -------------------------------------
Authorized Signature of Registered Representative's
Dealer - Tampa, FL Name and Number
-------------------------------------
Signature Guarantee
The payment of monies is authorized by the signature(s) on the reverse side.
If the shareholder's account with the Fund is joint, all checks drawn upon
this account must include the signatures of all persons named in the account,
unless the persons signing this card have indicated on the reverse side of
this card that the Bank is authorized to accept any one signature. Each person
guarantees the genuineness of the other's signature. Checks may not be for
less than $500 or such other minimum or maximum amounts as may from time to
time be established by the Fund.
The Bank is hereby appointed agent by the person(s) signing this card (the
"Depositor(s)") and, as agent, is authorized and directed to present checks
drawn on this checking account to the Fund or its redemption agent as requests
to redeem shares of the Fund registered in the name of the Depositor(s) in the
amounts of such checks and to deposit the proceeds of such redemptions in this
checking account. The Bank shall be liable only for its own negligence.
Depositor(s) hereby authorize(s) the Fund or its redemption agent to honor
redemption requests presented in the above manner by the Bank. The Fund and
its redemption agent will not be liable for any loss, expense or cost arising
out of check redemptions. If shares of the Fund are purchased by check,
redemption proceeds will ordinarily be withheld until the Fund is reasonably
assured that payment has been collected on the check. The Bank has the right
not to honor checks in amounts exceeding the value of the depositor(s)
shareholder account at the time the check is presented for payment.
The Bank reserves the right to change, modify or terminate this checking
account at any time upon notification mailed to the address of record of the
Depositor(s).
The terms and conditions of the Distributor's currently effective Selected
Dealer Agreement are included by reference in this section. The Dealer
represents that it has a currently effective Selected Dealer Agreement with
the Distributor authorizing the Dealer to sell shares of the Fund and the
Eligible Funds, and that it may lawfully sell shares of the designated Fund(s)
in the state designated as the Applicant's address of record.
-------------------------------------
DO NOT COMPLETE
MSI - Tampa
Dealer #_________ ST ____________
Rep #____________________________
Rep Name_________________________
-------------------------------------
CONTROL NUMBER: 3152-960524(0697)SSR-LD
ML-703D-596
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