SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
- -------------------------------------------------------------------------------
STATE STREET RESEARCH MONEY MARKET TRUST
(Name of Registrant as Specified In Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
5) Total fee paid:
----------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
----------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------------------
3) Filing Party:
----------------------------------------------------------------------
4) Date Filed:
<PAGE>
STATE STREET RESEARCH MONEY MARKET FUND
a series of
State Street Research Money Market Trust
One Financial Center
Boston, Massachusetts 02111
NOTICE OF SPECIAL MEETING
OF SHAREHOLDERS
To Be Held On December 19, 1997
A Special Meeting of Shareholders (the "Meeting") of State Street
Research Money Market Fund (the "Fund"), a series of State Street Research Money
Market Trust, a Massachusetts business trust (the "Trust"), will be held at the
offices of the Trust, One Financial Center, 31st Floor, Boston, Massachusetts
02111, at 4:00 P.M. on December 19, 1997 for the following purposes:
1. To elect Trustees of the Trust.
2. To amend the Fund's fundamental policy on illiquid securities to
eliminate the limitation on restricted securities and to change the
classification of the policy from fundamental to nonfundamental.
3. To amend the Fund's fundamental policy regarding industry
concentration.
4. To amend the Fund's fundamental policies regarding diversification of
investments.
5. To amend the Fund's fundamental policy relating to securities lending.
6. To eliminate the Fund's fundamental policy regarding investments in
securities of companies with less than three (3) years' continuous operations.
7. To amend the Master Trust Agreement to permit the Trustees to
reorganize, merge or liquidate a fund without prior shareholder approval.
8. To amend the Master Trust Agreement to eliminate specified time
permitted between the record date and any shareholders' meeting.
9. To consider and act upon any matter incidental to the foregoing and to
transact such other business as may properly come before the Meeting and any
adjournments thereof.
The matters referred to above may be acted upon at said Meeting and any
adjournments thereof.
The close of business on October 22, 1997 has been fixed as the
record date for the determination of shareholders entitled to notice of, and to
vote at, the Meeting and any adjournments thereof.
<PAGE>
IT IS VERY IMPORTANT THAT YOUR VOTING INSTRUCTIONS BE RECEIVED NO LATER
THAN DECEMBER 17, 1997. Instructions for shares held of record in the
name of a nominee, such as a broker-dealer or trustee of an employee benefit
plan, may be subject to cut-off dates for receipt of such instructions
established by such intermediaries to facilitate a timely response.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE SIZE OF YOUR HOLDINGS IN THE
FUND. WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE
AND SIGN THE ENCLOSED PROXY FORM AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE. IF YOU DESIRE TO VOTE IN PERSON AT THE MEETING, YOU MAY REVOKE YOUR
PROXY.
By Order of the Trustees
FRANCIS J. McNAMARA, III
Secretary
October 23, 1997
Date of Notice
<PAGE>
QUESTIONS AND ANSWERS
Q: Why is this material being sent to shareholders?
A: Shareholders of the Fund are being asked to vote on several proposals,
including the election of Trustees and changes which would give the Fund
more flexibility in making investments and the Trustees more flexibility
to make decisions for shareholders. No abrupt changes in current
investment practices are planned. These investment policy proposals
provide the Fund with flexibility to respond quickly to changing market
conditions, avoiding future delays and expenses. The Trustees recommend
that you vote FOR all the proposals.
Q: What is a shareholder supposed to do with this material?
A: You should read the material and then vote. You may vote by telephone by
calling 1-800-766-5494 between 9:00 a.m. and 6:00 p.m. Eastern Standard
Time or by marking the enclosed Proxy Form and returning it.
Q: What if I have questions?
A: Call State Street Research Shareholder Services at 1-800-562-0032 for
help with your questions.
Q: What is Proposal 1 relating to the election of Trustees?
A: Those current Trustees who have not been previously elected by
shareholders, plus two new nominees, are being presented for election.
Background information on all of the Trustees is included in the material.
Q: Under Proposal 2, what is the change in investments in restricted
securities?
A: The proposal would eliminate the current limitation on investments in
restricted securities that was based on state law. A new federal law
passed in October, 1996 now makes state law limitations on investments in
restricted securities no longer applicable to the Fund. In addition, in
today's money market fund industry, the limitation inhibits the Fund's
investment flexibility.
Q: Under Proposal 2, what is a fundamental policy and why is the Fund
changing the part on illiquid securities to nonfundamental?
A: Fundamental policies are ones which can only be changed by shareholder
vote. The proposal is to change the policy to nonfundamental so that the
Fund can react quickly to investment ideas or regulatory changes in the
future and avoid coming back to the shareholders in the event of a
conflict with an old fundamental policy.
Q. Under Proposal 3, what is the change on industry concentration?
A: Under current policy, the Fund may not make an investment which would
cause it to have more than 25% of its assets invested in companies in any
one industry. The proposed change would recognize that the way an industry
is defined can vary over time and acknowledges that the Fund may want to
redefine industries as businesses evolve. In addition, under the proposed
policy, the Fund would concentrate its investments in the financial
services industry, which is a major investment area for money market
funds.
Q: What is Proposal 4 on diversification of investments?
<PAGE>
A: Under current policy, the Fund is limited as to how much it can invest in
one company. The change would give the Fund some leeway to invest
relatively more in individual companies.
Q: What is Proposal 5 on securities lending?
A: Opportunities can arise for the Fund to lend some of the securities it
owns to other institutions in exchange for a fee. The borrower returns the
securities later, and gives the Fund collateral in the meantime. The
proposed change would make clear that securities lending is permitted.
Q: Under Proposal 6, why does the Fund want to eliminate the fundamental
policy regarding investments in companies with less than 3 years'
continuous operations (commonly known as "unseasoned companies")?
A: A new federal law passed in October, 1996 now makes the limitation imposed
by some states on investments in unseasoned companies no longer applicable
to the Fund. In today's money market fund industry, the limitation could
keep the Fund from investing in important new investments like
asset-backed securities.
Q: What is Proposal 7 to permit the Trustees to reorganize, merge or
liquidate a fund without shareholder approval?
A: Circumstances can arise with the Fund where it makes sense to merge it
with a similar fund or liquidate it and send the proceeds to shareholders.
This can happen where a fund is small or performance is not competitive;
and the cost of a proxy solicitation to all shareholders to get their
approval would be disadvantageous. The possibility that this could happen
is unlikely with this Fund, but the standby authority for the Trustees to
take action would be in the best interest of shareholders in the long-run.
Q: What is Proposal 8 on eliminating the specified time between record date
and meeting date for shareholders meetings?
A: The record date is the cutoff date to determine which shareholders should
have a vote for any upcoming shareholder meeting. For example, you were a
shareholder as of the record date for this shareholders meeting, so you
received this proxy material. However, the maximum 60 days for the period
between the record date and the meeting date as currently specified is too
little time to move proxy materials through brokers and pension plan
recordkeepers, etc. and receive votes back in time for the meeting. The
change would allow a reasonable period between the two dates.
Important additional information about the proposals is set forth in the
accompanying Proxy Statement. Please read it carefully.
<PAGE>
STATE STREET RESEARCH MONEY MARKET FUND
a series of
State Street Research Money Market Trust
One Financial Center
Boston, Massachusetts 02111
PROXY STATEMENT
All of the classes of shares (Class B, Class C, Class D and Class E) of
the Fund are entitled to vote on all of the proposals and will vote together on
the proposals.
This Proxy Statement is furnished to the shareholders of State Street
Research Money Market Fund, a series of State Street Research Money Market
Trust, in connection with the solicitation of proxies by and on behalf of the
Trust's Board of Trustees to be used at a Special Meeting of Shareholders (the
"Meeting") of the Trust, to be held at the offices of the Trust, One Financial
Center, 31st Floor, Boston, Massachusetts 02111, at 4:00 P.M., on December 19,
1997, and at any adjournments thereof.
Shareholders of record of the Trust at the close of business on October
22, 1997 are entitled to notice of, and to vote at, the Meeting or any
adjournments thereof. This Proxy Statement, Proxy form and accompanying Notice
of Special Meeting of Shareholders were first sent or given to shareholders on
or about October 30, 1997. The Trust is presently comprised of one portfolio
series: State Street Research Money Market Fund.
The chart below reflects the total number of shares issued and outstanding
of the Fund as of the record date. Each share is entitled to one vote with a
proportionate vote for each fractional share.
Class B Class C Class D Class E Total
- ---------- ---------- ------- ----------- -----------
14,044,074 13,168,578 543,563 213,122,856 240,879,071
- ---------- ---------- ------- ----------- -----------
If the enclosed Proxy is properly executed and returned in time to be
voted at the Meeting, the shares represented thereby will be voted in accordance
with the instructions on the Proxy. The Proxy grants discretion to the persons
named therein, as proxies, to take such further action as they may determine
appropriate in connection with any other matter which may properly come before
the Meeting or any adjournments thereof. The Board of Trustees does not
currently know of any matter to be considered at the Meeting other than the
matters set forth in the Notice of Special Meeting of Shareholders.
A majority of the shares entitled to vote constitutes a quorum for the
transaction of business at the Meeting. In the event a quorum is not present at
the Meeting, or in the event a quorum is present at the Meeting but
<PAGE>
sufficient votes to approve any of the proposals are not received, the persons
named as proxies may propose one or more adjournments of such Meeting without
further notice to permit further solicitation of Proxies, provided such persons
determine that an adjournment and additional solicitation are reasonable and in
the interest of shareholders, after consideration of all relevant factors,
including the nature of the relevant proposals, the percentage of votes then
cast, the percentage of negative votes then cast, the nature of the proposed
solicitation activities and the nature of the reasons for such further
solicitation. A shareholder vote may be taken on one or more of the proposals in
this Proxy Statement prior to such adjournment if sufficient votes have been
received and such vote is otherwise appropriate. Any such adjournment will
require the affirmative vote of a majority of those shares present at the
Meeting in person or by proxy.
For purposes of determining the presence of a quorum for transacting
business at the Meeting and for determining whether sufficient votes have been
received for approval of any proposal to be acted upon at the Meeting,
abstentions and broker "non-votes" (that is, proxies from brokers or nominees
indicating that such persons have not received instructions from the beneficial
owner or other persons entitled to vote shares on a particular matter with
respect to which the brokers or nominees do not have, or choose not to exercise,
discretionary power), may in the discretion of the Trust be treated as present
at the Meeting and entitled to vote on the matter, but which have not been
voted. For this reason, abstentions and broker non-votes could assist the Trust
in obtaining a quorum. When counted as present, abstentions and broker non-votes
have the practical effect of a "no" vote for purposes of obtaining the
requisite vote for approval of proposals 2 through 8 to be acted upon at the
Meeting, but will have no effect on the determination of plurality votes in
connection with proposal 1 regarding the election of Trustees. When abstentions
and broker non-votes are not counted as present, the percentage voting in favor
of a proposal will be arithmetically higher than if such abstentions and broker
non-votes were counted.
In addition to solicitation of Proxies by mail, officers of the Trust and
officers and employees of State Street Research & Management Company (the
"Investment Manager"), affiliates of the Investment Manager, or other
representatives of the Trust, may also solicit Proxies by telephone or in
person. The Trust also intends to use Proxy Advantage, a service provided by a
wholly-owned subsidiary of First Data Investment Services Group, Inc. ("FDISG"),
a proxy solicitation firm, to assist with the mailing and tabulation effort and
any special, personal solicitation of Proxies. The costs of retaining FDISG to
perform such services are estimated to be $25,000, which will be borne
by the Fund, in addition to out-of-pocket expenditures for postage, printing and
related items. The Fund will reimburse brokerage firms and others for their
expenses in forwarding solicitation material to the beneficial owners of shares
of the Fund.
Shareholders of the Fund may be asked by FDISG representatives to cast
their votes by authorizing the execution of a proxy by telephone. Shareholders
will either be contacted by a FDISG representative using information derived
from a shareholder list provided by the Fund or shareholders may be sent a
written communication or left a telephone message asking the shareholder to
telephone FDISG at a designated toll-free number. In all such cases, the
representative of FDISG will ask for the shareholder's full name and address,
the last four digits of the shareholder's social security number or employer
identification number, the person's title (in the case of a corporate
shareholder) and confirmation that the person is authorized to direct the voting
of the shares. The shareholder will be asked
2
<PAGE>
to confirm that the Proxy Statement and Proxy form have been received. If
answered in he affirmative, the FDISG representative will advise the shareholder
that the shareholder may authorize the execution of a proxy over the telephone
and ask the shareholder if the shareholder desires to authorize the execution of
a proxy at that time. Telephone conversations will be recorded. If the
shareholder chooses to proceed, the FDISG representative will then ask the
shareholder if the shareholder wishes to support all of the recommendations of
the Trustees as stated in the Proxy Statement. If the shareholder does not
choose to support the recommendations of the Trustees, the FDISG representative
will ask the shareholder if the shareholder would like to consider each proposal
individually. If answered in the affirmative, the FDISG representative will read
the proposals to the shareholder and ask for such shareholder's voting
instruction on each proposal.
Although the FDISG representative will assist with any questions, the
answers to which are contained in the Proxy Statement, the FDISG representative
will not make recommendations on how to vote on any proposal. Finally, the FDISG
representative will explain that FDISG will execute a written proxy as the
shareholder's agent in accordance with the shareholder's instructions and will
forward the proxy to the Fund. Within 72 hours after each telephone call, FDISG
will send to each shareholder who used the telephone proxy voting method a
written confirmation of the shareholder's instructions. The shareholder will be
asked to contact FDISG immediately if the shareholder's instructions have not
been properly recorded.
If a shareholder wishes to participate in the Meeting, but does not wish
to authorize the execution of a proxy by telephone, the shareholder may still
submit the Proxy form included with this Proxy Statement or attend the Meeting
in person. Any shareholder who has given a Proxy, by telephone or in written
form, has the right to revoke it at any time prior to its exercise by
submitting a subsequent telephone vote, or a written notice of revocation or a
later-dated Proxy to the Trust at the above address or by attending the Meeting
and voting his or her shares in person. The Trust believes that the procedures
for authorizing the execution of a proxy by telephone set forth above are
reasonably designed to ensure that the identity of the shareholder casting the
vote is accurately determined and that the voting instructions of the
shareholder are accurately recorded.
Upon request by a shareholder of the Fund to State Street Research
Shareholder Services, One Financial Center, Boston, Massachusetts 02111 at
1-800-562-0032, the annual report and most recent semiannual report succeeding
the annual report, if any, for the Fund will be furnished without charge to the
requesting shareholder.
The Fund's distributor (the "Distributor") is State Street Research
Investment Services, Inc., One Financial Center, Boston, Massachusetts 02111.
As of August 31, 1997, the following persons or entities were the
beneficial owners of 5% or more of shares of the Fund as set forth beside their
names:
Name and % of
Address of Amount of Outstanding
Owner Ownership Shares
- ---------------------- --------- -----------
Metropolitan Life 15,648,207 6.6%
Insurance Company(a)
One Madison Avenue
New York, NY 10010
(a) Metropolitan Life Insurance Company ("Metropolitan"), a New York
corporation, was the record owner, directly or indirectly through its
subsidiaries or affiliates, of such shares and may be deemed to be the
beneficial owner of such shares.
The Investment Manager and the Distributor are indirect, wholly-owned
subsidiaries of Metropolitan. Metropolitan and its affiliates have indicated
that with respect to their shares of the Fund they intend to vote for and
against the proposals in the same relative proportion as do the other
shareholders of the Fund who cast votes at the meeting.
3
<PAGE>
PROPOSAL 1
ELECTION OF TRUSTEES
The shareholders of the Fund are being asked to elect the persons named
below to serve as Trustees of the Trust. All shares represented by valid proxies
will be voted in favor of the election of the nominees, unless authority to vote
therefor is withheld. The nominees named have agreed to serve as Trustees if
elected. If for any reason any of the nominees should not be available for
election as contemplated, the proxies hereby solicited may, unless otherwise
limited, be voted to elect such substitute nominees, if any, as may be
designated by the Board of Trustees, subject to the applicable provisions of the
Investment Company Act of 1940, as amended (the "1940 Act"). Some of the
nominees currently serve as Trustees and are being presented for shareholder
election for the first time. The other current Trustees were previously elected
by the shareholders of the Trust and are not being voted upon at this Meeting.
This election will help assure continued compliance with 1940 Act provisions
regarding the election of Trustees. Background information on all of the
Trustees has been provided.
<TABLE>
<CAPTION>
Shares of Fund
Deemed
Beneficially
Owned on
September 26, 1997
Number of Shares /
Nominee Standing Position Year First % of Class
for Election by with Became ------------------
Shareholders Trust Trustee Class E
- ------------ ----- ------- -------
<S> <C> <C> <C>
Steve A. Garban None (1)
Malcolm T. Hopkins None (1)
Thomas L. Phillips Trustee 1992
Toby Rosenblatt Trustee 1993
*Ralph F. Verni Trustee, 1992
Chairman
of the Board,
Chief Executive
Officer and
President
Previously Elected by
Shareholders and Not
Standing for Election
- ---------------------
Edward M. Lamont Trustee 1987
Robert A. Lawrence Trustee 1986
Dean O. Morton Trustee 1986 30,319 / less than 1%
Michael S. Scott Morton Trustee 1987
Jeptha H. Wade Trustee 1986
Trustees and Principal Officers as a Group 79,169 / less than 1%
</TABLE>
4
<PAGE>
* Individual who is deemed to be an "interested person" of the Trust under
the 1940 Act because of his affiliation with the Fund's investment
manager.
(1) Mr. Garban and Mr. Hopkins are being nominated for the first time to serve
as Trustees of the Trust.
Information on all the nominees and current Trustees, in alphabetical
order, is set forth below.
Steve A. Garban is retired and was formerly Senior Vice President, Finance
and Operations and Treasurer, The Pennsylvania State University. He is 60. Mr.
Garban's other principal business affiliations include Director of Metropolitan
Series Fund, Inc. Mr. Garban is also a Trustee or Director of ten other
investment companies for which the Investment Manager serves as investment
adviser.
Malcolm T. Hopkins is engaged primarily in private investments.
Previously, he was Vice Chairman of the Board and Chief Financial Officer, St.
Regis Corp. (forest and paper products). He is 69. Mr. Hopkins's other
principal business affiliations include Director of Metropolitan Series Fund,
Inc., The Columbia Gas System, Inc., MAPCO, Inc., EMCOR GROUP, INC., U.S. Home
Corporation and Phar-Mor, Inc. Mr. Hopkins is also a Trustee or Director of ten
other investment companies for which the Investment Manager serves as investment
adviser.
Edward M. Lamont 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. Mr. Lamont has served as a Trustee of the
Trust since 1987. He is 70. Mr. Lamont's other principal business affiliations
include Director of Sun Life Insurance and Annuity Company of New York. Mr.
Lamont is also a Trustee or Director of ten other investment companies for which
the Investment Manager serves as investment adviser.
Robert A. Lawrence's principal occupation is Associate of Saltonstall &
Co., a private investment firm. During the past five years he has also served as
Partner of that firm. Mr. Lawrence has served as a Trustee of the Trust since
1986. He is 71. Mr. Lawrence's other principal business affiliations include
Director of Metropolitan Series Fund, Inc., New York Times Company and Fifty
Associates (a real estate investment trust). Mr. Lawrence is also a Trustee or
Director of ten other investment companies for which the Investment Manager
serves as investment adviser.
Dean O. Morton is retired and was formerly Executive Vice President, Chief
Operating Officer and Director, Hewlett-Packard Company. Mr. Morton has served
as a Trustee of the Trust since 1986. He is 65. Mr. Morton's other principal
business affiliations include Director of Metropolitan Series Fund, Inc., Alza
Corp. (a therapeutic systems developer), Raychem Corp. (a materials science
company), The Clorox Company (a consumer products company), Tencor Instruments
(a scientific instruments company) and Centigram Communications Corporation (a
communication equipment company). Mr. Morton is also a Trustee or Director of
ten other investment companies for which the Investment Manager serves as
investment adviser.
5
<PAGE>
Thomas L. Phillips is retired and was formerly Chairman of the Board and
Chief Executive Officer of Raytheon Company, of which he remains a Director. Mr.
Phillips has served as a Trustee of the Trust since 1992. He is 73. Mr.
Phillips's other principal business affiliations include Director of John
Hancock Mutual Life Insurance Company, Knight-Ridder, Inc. and Digital Equipment
Corporation. Mr. Phillips is also a Trustee of nine other investment companies
for which the Investment Manager serves as investment adviser.
Toby Rosenblatt's principal occupations during the past five years have
been President of The Glen Ellen Company, a private investment company, and Vice
President of Founders Investments Ltd. Mr. Rosenblatt has served as a Trustee of
the Trust since 1993. He is 59. Mr. Rosenblatt's other principal business
affiliations include Director of Biosource Technologies, Inc., Advanced Polymer
Systems, Inc. and Pherin Corporation (proprietary compounds for human health).
Mr. Rosenblatt is also a Trustee or Director of ten other investment companies
for which the Investment Manager serves as investment adviser.
Michael S. Scott Morton's principal occupation during the past five years
has been Jay W. Forrester Professor of Management at Sloan School of Management,
Massachusetts Institute of Technology. Dr. Scott Morton has served as a Trustee
of the Trust since 1987. He is 60. Dr. Scott Morton's other principal business
affiliations include Director of Metropolitan Series Fund, Inc. and Sequent
Computer Systems, Inc. (a computer manufacturer). Dr. Scott Morton is also a
Trustee or Director of ten other investment companies for which the Investment
Manager serves as investment adviser.
Ralph F. Verni's principal occupation is Chairman of the Board, President,
Chief Executive Officer and Director of the Investment Manager. Mr. Verni has
served as a Trustee of the Trust since 1992. He is 54. During the past five
years he also served as President and Chief Executive Officer of New England
Investment Companies and as 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. and, until February 1996, prior positions as President and Chief
Executive Officer; Chairman of the Board, President, Chief Executive Officer and
Director of GFM International Investors Limited; Director of CML Group, Inc.
(consumer specialty company); member of the Advisory Board of Commonwealth
Capital Ventures, L.P.; Director of SSR Realty Advisors, Inc.; and President,
Chief Executive Officer and Director of SSRM Holdings, Inc. Mr. Verni is also a
Trustee or Director of ten other investment companies for which the Investment
Manager serves as investment adviser.
Jeptha H. Wade 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. Mr.
Wade has served as a Trustee of the Trust since 1986. He is 72. Mr. Wade's
other principal business affiliations include Director of Cleveland-Cliffs, Inc.
(a natural resource company). Mr. Wade is also a Trustee of nine other
investment companies for which the Investment Manager serves as investment
adviser.
A candidate elected as a Trustee will serve as such until any successor
is elected and qualified. A Trustee serves until he retires, resigns or is
removed as provided in the Second Amended and Restated Master Trust Agreement,
6
<PAGE>
as amended (the "Master Trust Agreement"). The Trust is not required to hold
regularly scheduled annual meetings for the election of Trustees. (See "No
Annual Meetings of Shareholders" below.)
The following persons are principal officers, but not Trustees, of the
Trust:
Dyann H. Cowling has served as Vice President of the Trust since August,
1997. She is 34. Her principal occupation is portfolio manager and fixed income
trader for the Investment Manager. Her principal occupation during the past five
years has been fixed income trader for the Investment Manager.
John H. Kallis has served as Vice President of the Trust since 1994. He is
56. His principal occupation is Senior Vice President of the Investment
Manager. During the past five years he has also served as a portfolio manager
for the Investment Manager.
Gerard P. Maus has served as Treasurer of the Trust since 1993. He is 46.
His principal occupation is Executive Vice President, Treasurer, Chief Financial
Officer and Director of the Investment Manager. During the past five years he
has also served as Executive Vice President and Chief Financial Officer of New
England Investment Companies and as 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.;
Treasurer and Chief Financial Officer of SSRM Holdings, Inc.; Executive Vice
President, Chief Financial Officer and Chief Administrative Officer of GFM
International Investors Limited; and Director of SSR Realty Advisors, Inc.
Francis J. McNamara, III has served as Secretary and General Counsel of
the Trust since 1995. He is 42. His principal occupation is Executive Vice
President, General Counsel and Secretary of the Investment Manager. During the
past five years he has also served as Senior Vice President of the Investment
Manager and as Senior Vice President and General Counsel 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.; Secretary and General Counsel of SSRM Holdings, Inc.; and
Executive Vice President, General Counsel and Director of GFM International
Investors Limited.
JoAnne C. Mulligan has served as Vice President of the Trust since 1994.
She is 40. Her principal occupation is Senior Vice President of the Investment
Manager. During the past five years, she has also served as Vice President of
the Investment Manager.
Thomas A. Shively has served as Vice President of the Trust since 1991. He
is 43. His principal occupation is Executive Vice President and Director of the
Investment Manager. During the past five years he has also served as Senior Vice
President of the Investment Manager. Mr. Shively's other principal business
affiliations include Director of State Street Research Investment Services, Inc.
7
<PAGE>
These officers are deemed to be "interested persons" of the Fund under the
1940 Act inasmuch as they are affiliated with the Investment Manager as noted.
Board Meetings and Committees
During the fiscal year ended March 31, 1997, the Board of Trustees held a
total of four meetings.
The Audit Committee of the Board of Trustees held two meetings during the
fiscal year ended March 31, 1997. The present members of the Audit Committee are
Messrs. Morton, Scott Morton and Wade. The duties of this Committee include
meeting with representatives of the Trust's independent public accountants both
to review the range of the accountants' activities and to discuss the Trust's
system of internal controls. Thereafter, this Committee reports to the Board on
the Committee's findings and recommendations concerning internal accounting
matters as well as its recommendation for retention or dismissal of the auditing
firm.
The Nominating Committee of the Board of Trustees met twice in 1995 and
once thus far in 1997. The present members of the Nominating Committee are
Messrs. Morton, Phillips, Scott Morton and Wade. The duties of this Committee
include consideration of recommendations on nominations for Trustees, review of
the composition of the Board, and recommendations respecting attendance,
frequency of meetings and similar matters. The Nominating Committee will
consider nominees recommended by shareholders; shareholders may submit
recommendations to the attention of the Secretary, State Street Research Money
Market Trust, One Financial Center, 30th Floor, Boston, Massachusetts 02111.
Remuneration of Principal Officers and Trustees
The executive officers of the Trust and those of its Trustees who are
officers of the Investment Manager receive no direct remuneration from the
Trust. Such executive officers and Trustees receive remuneration from the
Investment Manager. Trustees who are not officers of the Investment Manager are
compensated for attendance at each meeting of the Board of Trustees and
committees of the Board and reimbursed for reasonable expenses incurred in
connection therewith, and are paid an annual retainer.
8
<PAGE>
The current Trustees have been compensated as follows:
<TABLE>
<CAPTION>
Total
Compensation
from Trust
and Complex
Aggregate Compensation Paid to
Name of Current Trustee from Trust (1) Trustees (2)
- ----------------------- ---------------------- ------------
<S> <C> <C>
Edward M. Lamont $4,000 $ 59,375
Robert A. Lawrence $4,000 $ 92,125
Dean O. Morton $4,300 $ 96,125
Thomas L. Phillips $4,100 $ 59,375
Toby Rosenblatt $4,000 $ 59,375
Michael S. Scott Morton $4,500 $100,325
*Ralph F. Verni $ 0 $ 0
Jeptha H. Wade $4,300 $ 63,375
</TABLE>
* Individual who is deemed to be an "interested person" of the Trust under
the 1940 Act because of his affiliation with the Fund's investment
manager.
(1) For the Fund's fiscal year ended March 31, 1997.
(2) Includes compensation on behalf of all series of 12 investment companies
for which the Investment Manager served directly or indirectly as
investment adviser, or for which State Street Research Investment
Services, Inc. served as distributor. "Total Compensation from Trust and
Complex Paid to Trustees" is for the 12 months ended December 31, 1996.
The Trust does not provide any pension or retirement benefits for the
Trustees.
Required Vote
A plurality of the votes properly cast in person or by proxy at the
Meeting, provided a quorum is represented, is required for the election of a
Trustee.
PROPOSAL 2
TO AMEND THE FUND'S FUNDAMENTAL POLICY ON
ILLIQUID SECURITIES TO ELIMINATE THE LIMITATION ON
RESTRICTED SECURITIES AND TO CHANGE THE CLASSIFICATION
OF THE POLICY FROM FUNDAMENTAL TO NONFUNDAMENTAL
The Fund is currently subject to the investment policy set forth below
which, among others, the Fund originally designated as a "fundamental" policy,
i.e. a policy only changeable by shareholder vote. The Trustees of the Trust
after careful consideration and analysis have concluded that it is not in the
best interest of the Fund to continue this designation for this investment
policy. A fundamental policy which may only be altered by shareholder vote by
its nature inhibits the ability of a fund's management to respond quickly to
changing market conditions or revised regulations or policies affecting the
9
<PAGE>
industry. The Trustees recognize that certain policies should be changeable only
by the investors themselves. On the other hand, the Trustees believe that other
policies do not fit within this category in today's rapidly changing investment
environment. The Trustees believe that the investment policy regarding
investments in illiquid securities should be characterized as nonfundamental for
the reasons given below and recommend that the shareholders approve the
elimination of the fundamental characteristics of such policy.
It is the current fundamental policy of the Fund:
"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."
The proposal is to change the character of this policy from fundamental
to nonfundamental and to amend the policy to read as follows:
"not to purchase any security or enter into a repurchase agreement if as
a result more than 10% of its net assets would be invested in securities
that are illiquid (including repurchase agreements not entitling the
holder to payment of principal and interest within seven days."
The Trustees have concluded that it is in the best interest of the Fund
to change the character of the policy on illiquid securities from fundamental to
nonfundamental. Illiquid securities are generally regarded as securities which
may not be sold or disposed of within seven days in the ordinary course of
business at approximately the price at which a fund has valued them. Open-end
investment companies such as the Fund must stand ready to redeem their shares on
a continuous basis. Thus, they are limited in the amount of illiquid securities
they may hold because illiquid securities may not be easily sold to raise cash
necessary to meet redemptions under certain circumstances and because illiquid
securities can present valuation problems. As a money market fund, the Fund may
not invest more than 10% of its net assets in illiquid securities under current
SEC policy. The Trustees believe that the change to a nonfundamental policy will
provide the Fund with additional flexibility to address market, regulatory or
other developments regarding illiquid securities as they occur in the future.
The Fund intends to implement and monitor the operation of the new policy
and to change it, as appropriate, subject to market, regulatory or other
developments. Assuming the proposal is approved, such change could then be
accomplished without the delay and expense of soliciting shareholder approval.
For example, if the current policy had been nonfundamental, the Fund could have
avoided the cost and burden of a shareholder solicitation to eliminate the
limitation on restricted securities that was based on state "blue sky" law
provisions that have been preempted by recent federal legislation as described
below. In the event regulatory policies requiring limits on investments in
illiquid securities also change in the future, the Fund could revise the
nonfundamental policy as appropriate without shareholder approval.
The effect of the proposal would also be to eliminate the current 5%
limitation on the Fund's investment in restricted securities. Restricted
securities are securities that cannot be offered to the public for sale without
registration under the Securities Act of 1933, as amended (the "1933
10
<PAGE>
Act"). Certain state "blue sky" laws contain limitations on investments by
mutual funds in restricted securities. However, as a result of the recent
enactment of the National Securities Markets Improvement Act of 1996 ("NSMIA"),
state law restrictions on permissible investments no longer apply to the Fund.
Although the Securities and Exchange Commission (the "SEC") takes the position
that restricted securities should generally be presumed to be illiquid, the SEC
does not impose a specific percentage limitation on a fund's investment in
restricted securities. The SEC has permitted an open-end investment company's
board of trustees to determine that certain types of restricted securities are
liquid. In 1990, the SEC adopted Rule 144A under the 1933 Act, which has
resulted in a form of restricted security which can be traded among qualified
institutional buyers without registration under the 1933 Act ("Rule 144A
securities"). In the release adopting Rule 144A, the SEC stated that the board
of trustees of a fund has the authority to make the determination that a Rule
144A security is liquid, despite its restricted nature. More recently, the SEC
staff has taken the position that the board of trustees of a fund may determine
that certain commercial paper issued in reliance on Section 4(2) of the 1933 Act
("Section 4(2) paper") is liquid. Section 4(2) paper is commercial paper issued
in reliance on Section 4(2) of the 1933 Act, which exempts from registration
"transactions not involving a public offering."
The Trustees of the Trust have concluded that it is in the best interest
of the Fund to eliminate the limitation on restricted securities. The Trustees
believe that eliminating the restricted securities provision from the current
policy will provide the Fund with increased flexibility to invest in restricted
securities such as Rule 144A securities and Section 4(2) paper. Although the
Fund has the authority to invest in restricted securities without limitation
under the proposed nonfundamental policy, the Fund does not intend to make an
investment in restricted securities, including Rule 144A securities and Section
4(2) paper, if as a result more than 50% of its total assets are invested in
such securities.
Rule 144A securities may be deemed to be liquid as determined by or in
accordance with methods adopted by the Trustees. Under such methods, the
following factors will be considered, among others: the frequency of trades and
quotes for the security, the number of dealers and potential purchasers in the
market, dealer undertakings to make a market in the security, and the nature of
the security and marketplace trades. Under current SEC staff policy, in order
for the Trustees to make a determination that a particular issue of Section 4(2)
paper is liquid, the following conditions must be satisfied: (i) the Section
4(2) paper is not traded "flat" (i.e. without accrued interest) or in default as
to principal or interest; (ii) the Section 4(2) paper is rated in one of the two
highest rating categories by at least two nationally recognized statistical
rating organizations ("NRSROs"), or if only one NRSRO rates the security, by
that NRSRO (or if the security is unrated, the Trustees must determine that the
security is of equivalent quality) and (iii) the Trustees must consider the
trading market for the specific security, taking into account all relevant
factors.
The Trustees, including the Trustees who are not interested persons,
recommend a vote FOR approval of this proposal. If the proposal is adopted by
the shareholders of the Fund, it will take effect as soon as practicable. If the
proposal is not approved by the shareholders, the Fund's present investment
policy will remain in effect.
11
<PAGE>
PROPOSAL 3
TO AMEND THE FUND'S FUNDAMENTAL POLICY
REGARDING INDUSTRY CONCENTRATION
The fundamental policy of the Fund regarding industry concentration
currently reads as follows:
"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)."
For the reasons set forth below, the Trustees propose to amend the policy
for the Fund to read as follows. The policy of the Fund would be:
"not to make any investment which would cause more than 25% of the
value of the Fund's total assets to be invested in the securities of
issuers principally engaged in any one industry, as based on industry
classifications as may be described in the Fund's Prospectus or
Statement of Additional Information, as amended from time to time,
except that the Fund will invest more than 25% of its total assets in
the financial services industry and except that this limitation does
not apply to securities issued or guaranteed by the U.S. Government or
its agencies or instrumentalities or obligations of banks as described
in the Fund's Prospectus or Statement of Additional Information, as
amended from time to time."
Because the current policy contains specific examples of how a few
industries would be defined, it could be misconstrued as inferring that no other
kinds of distinctions would be made for other industries. The Fund in fact has
always reserved the right to define industries as appropriate over time on the
basis of evolutionary changes in businesses. For example, the burgeoning growth
of asset-backed securities has resulted in new industry classifications for
these securities based on the nature of the underlying assets, such as equipment
and automobile financing obligations, automobile leases, and credit card
receivables. Finance companies may be classified according to the industries of
their parent companies or industries that otherwise most affect such financing
companies. The change in the policy
12
<PAGE>
would make clear that the Fund will define and redefine industries over time
as business directions dictate.
The proposal would also revise the fundamental policy to provide that
more than 25% of the Fund's assets will be invested in the financial services
industry. With the increased significance of companies in the financial services
industry that issue quality short-term debt, and the central role of such debt
in the money market industry and for money market mutual funds, the Trustees
believe that the Fund should be able to invest more than 25% of its total assets
in the financial services industry. Companies in the financial services industry
provide financial services to consumers and industry. Examples of companies in
the financial services industry include captive finance companies of industrial
companies, commercial and consumer finance companies, commercial banks,
brokerage companies, insurance companies, real estate and leasing companies, and
companies that span across these segments. Financial services companies may be
subject to extensive governmental regulation which could limit both the amounts
and types of loans and other financial commitments they can make, and the
interest rates and fees they can charge. Profitability is largely dependent on
the availability and cost of capital funds, and can fluctuate significantly when
interest rates change. Credit losses resulting from financial difficulties of
borrowers can negatively impact the sector.
The Trustees, including the Trustees who are not interested persons,
recommend a vote FOR approval of this proposal. If the proposal is not approved
by the shareholders of the Fund, the text of the Fund's present investment
policies will remain in effect.
PROPOSAL 4
TO AMEND THE FUND'S FUNDAMENTAL POLICIES
REGARDING DIVERSIFICATION OF INVESTMENTS
The fundamental policies of the Fund regarding diversification of
investments currently read as follows:
"(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; and
(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."
In order to provide greater flexibility in managing the investments of
the Fund, as more fully described below, the proposal is to change the above
policies to read as follows:
13
<PAGE>
It would be the policy of the Fund:
"not to purchase a security of any one issuer (other than securities
issued or guaranteed as to principal or interest by the U.S. Government
or its agencies or instrumentalities) if such purchase would, with
respect to 75% of the Fund's total assets, cause more than 5% of the
Fund's total assets to be invested in the securities of such issuer or
cause more than 10% of the voting securities of such issuer to be held
by the Fund."
Under the current policies, the Fund may not invest more than 5% of its
total assets in any one issuer ("5% issuer test"). In addition, the Fund may not
invest in an issuer if the investment would result in the Fund owning more than
10% of any class of voting securities of an issuer ("10% securities test"). U.S.
Government securities are not counted. The significant difference between the
current policies and proposed policy is that under the proposed policy, the 5%
issuer test and the 10% securities test would only apply to 75% of the Fund's
assets, thereby giving the Fund the investment flexibility to exceed the 5%
issuer test and the 10% securities test as to the remaining 25% of the Fund's
assets.
Under current regulations applicable to taxable money market funds, the
Fund is not permitted to invest more than 5% of its total assets in any one
issuer, although the Fund is able to invest up to 25% of its assets in the
"first tier" securities of a single issuer for up to three business days.
Adoption of the proposal would allow the Fund to take advantage of this
exception to the 5% diversification requirement, which would help the Fund
manage large inflows and outflows of cash. The proposal would also provide added
flexibility to make investments that would result in the Fund owning more than
10% of a class of voting securities of an issuer. This added flexibility could
be useful under the right circumstances in the future should market, regulatory
or other development warrant. It would enable the Fund to take advantage of
potential investment opportunities where, for example, the particular issuer
appears to be very attractive because of its investment potential, its high
creditworthiness, or any other compelling financial reasons.
The Fund intends to implement and monitor the operation of the new policy
subject to market, regulatory or other developments.
The Trustees, including the Trustees who are not interested persons,
recommend a vote FOR approval of this proposal. If the proposal is not approved
by the shareholders of the Fund, the Fund's present investment policies will
remain in effect.
PROPOSAL 5
TO AMEND THE FUND'S FUNDAMENTAL POLICY ON LENDING
TO PERMIT SECURITIES LENDING
It is the Fund's current fundamental policy:
14
<PAGE>
"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 agreements collateralized by obligations of the U.S.
Government and its agencies and instrumentalities."
Securities lending, when practiced as described below, could be an
attractive investment alternative for the Fund from time to time. The Fund
believes that the current policy permits securities lending. However, to clarify
this policy and resolve any ambiguity as to whether, under the above language,
securities lending is permitted, the Trustees propose that the policy be revised
to read as follows. It will be the policy of the Fund:
"not to lend money directly to natural persons; however, the Fund may
lend portfolio securities and purchase bonds, debentures, notes, bills
and any other debt-related instruments or interests directly from the
issuer thereof or in the open market and may enter into repurchase
transactions collateralized by obligations of the U.S. Government and
its agencies and instrumentalities or other high quality securities."
In a securities lending arrangement, the Fund would lend securities to an
institution which wants to borrow the securities to, for example, have
securities in readily deliverable form to settle a sale where the borrower's own
securities are for some reason unavailable or to cover a short sale. As
compensation for lending securities, the Fund would retain all (or a portion) of
interest received on the investment of cash collateral received or receive a fee
from the borrower.
If the proposed revised policy is adopted by the shareholders, the Fund
would be able to lend portfolio securities up to a maximum in value of 33-1/3%
of its total assets. While any such loan is outstanding, it will be continuously
secured by collateral in the form of cash or cash equivalents (e.g., U.S.
Government obligations) equal at all times to at least 100% of the current
market value of the loaned securities plus accrued interest. Collateral received
by the Fund will generally be invested in quality short-term unaffiliated mutual
funds, securities issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, irrevocable stand-by letters of credit issued by a bank or
repurchase agreements, among similar investments. The investing of cash
collateral received from loaning portfolio securities involves leverage which
magnifies the potential for gain or loss on monies invested and, therefore,
results in an increase in the volatility of the Fund's outstanding securities.
Such loans may be terminated at any time. The transactions are generally
structured so that the Fund will retain rights to dividends, interest or other
distributions on the loaned securities. Voting rights pass with the lending,
although the Fund may call loans to vote proxies if desired. Should the borrower
of the securities fail financially, there is a risk of delay in recovery of the
securities or loss of rights in the collateral. Loans would be made only to
borrowers which are deemed by the Investment Manager to be of good financial
standing. The Fund has no intention of making loans of portfolio securities to
individuals.
The Trustees believe that the proposed revised policy is in the best
interests of the Fund. The Trustees, including the Trustees who are not
interested persons, recommend a vote FOR approval of this proposal. If the
15
<PAGE>
proposal is not approved by the shareholders, the Fund's present investment
policy will remain in effect.
PROPOSAL 6
TO ELIMINATE THE FUND'S
FUNDAMENTAL INVESTMENT POLICY REGARDING
INVESTMENTS IN SECURITIES OF COMPANIES WITH
LESS THAN THREE (3) YEARS' CONTINUOUS OPERATION
It is the Fund's current fundamental policy, with certain exceptions, not
to invest in securities of companies which, including predecessors, have a
record of less than three (3) years' continuous operation (typically referred to
as "unseasoned issuers") if so doing would cause more than five percent (5%) of
the Fund's total assets to be invested in the securities of such companies.
Specifically, the current policy of the Fund is:
"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' 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."
The current policy is based on restrictions on investments in unseasoned
issuers contained in certain state "blue sky" laws. The 1940 Act does not
contain any equivalent restrictions. As a result of the recent enactment of
NSMIA, state law restrictions on permissible investments no longer apply to the
Fund. The Trustees of the Trust have therefore concluded that it is in the best
interest of the Fund to eliminate the policy on unseasoned issuers. In addition,
the Trustees believe that elimination of the policy will increase the
flexibility of the Investment Manager by permitting investments by the Fund in
unseasoned issuers that otherwise meet the investment objective and policies of
the Fund. Securities of unseasoned issuers may be subject to greater risk than
securities of more established companies because these issuers have only a brief
operating history and may have more limited markets and financial resources.
However, the Trustees believe that the increasing prevalence of unseasoned
issuers, such as issuers of asset-backed securities, the investment
opportunities offered by such issuers, and the fact that any such investments
will be made in accordance with the investment objective and policies of the
Fund, warrants the elimination of the current policy. Examples of available,
high quality asset-backed securities include securities issued by trusts which
hold commercial and consumer loans, and equipment leases.
The Trustees, including the Trustees who are not interested persons,
recommend a vote FOR approval of this proposal. If the proposal is adopted by
the shareholders of the Fund, it will take effect immediately. If the proposal
is not approved by the shareholders, the Fund's present investment policy will
remain in effect.
16
<PAGE>
PROPOSAL 7
TO AMEND THE MASTER TRUST AGREEMENT TO
PERMIT THE TRUSTEES TO REORGANIZE, MERGE OR
LIQUIDATE A FUND WITHOUT PRIOR SHAREHOLDER APPROVAL
The Trust is organized as a Massachusetts business trust. One of the
advantages of operating a mutual fund as a business trust, rather than as a
corporation, is the substantial operational flexibility available to the
trustees. The trustees of a business trust are permitted to take a variety of
actions, without prior shareholder approval, that are beyond common practice for
directors of a typical corporation. As a result, the trustees of a business
trust are able to react quickly on behalf of shareholders to changes in
competitive and regulatory conditions, without incurring the costs of a
shareholder meeting.
The particular actions that may be taken by the Trustees of the Trust
without a shareholder meeting are determined by the terms of the Master Trust
Agreement. Currently, the Master Trust Agreement provides that shareholder
approval is required to reorganize, merge or liquidate the Fund except in
certain very limited circumstances. Shareholder approval for these actions is
not required, however, by the 1940 Act or by the laws of Massachusetts
applicable to business trusts.
The Board of Trustees believes that, in most circumstances, it is not in
the best interests of shareholders to require a meeting of shareholders to
reorganize, merge or liquidate the Fund. For example, the Fund may have
insufficient assets to invest effectively or high expense levels because of
operational needs. In such a case, the Trustees may determine that it would be
in the best interests of shareholders of the Fund to merge the Fund with another
mutual fund that has similar investment objectives or policies, which could have
the effect of reducing the per share expenses of each fund or otherwise benefit
shareholders. The process of obtaining shareholder approval for such a
transaction, however, may make it difficult to complete the transaction and, in
general, will substantially increase the costs of the transaction for
shareholders. The Trustees believe that it would be in the best interests of
shareholders to permit consummation of such a transaction without incurring the
expenses associated with holding a meeting of shareholders.
The Trustees would exercise the authority in a reasonable manner. Any
action by the Trustees would be subject to compliance with any laws that may be
applicable. While, as noted, the 1940 Act does not require shareholder approval
for these actions, the Fund would comply with any other indirect requirements of
the 1940 Act that would become applicable. If circumstances warranted, the
Trustees could determine to elicit viewpoints from shareholders prior to any
action or conduct a formal proxy solicitation even though not required. In all
cases, shareholders would receive notice prior to completion of any transaction.
The Trustees do not have any present plans to use the new authority.
Approval of this proposal requires the affirmative vote of a majority of
the shares of the Trust entitled to vote on the proposal. If this proposal is
17
<PAGE>
approved, the last sentence of Article IV, Section 4.2(d) of the Master Trust
Agreement would be amended as follows (material to be added is underlined,
material to be deleted is in brackets):
"The liquidation of any particular Sub-Trust or class thereof may be
authorized at any time by vote of a majority of the Trustees then in office
without the approval of shareholders of such Sub-Trust [subject to the approval
- -----------------------------------------------------
of a majority of the outstanding voting Shares of that Sub-Trust or class, as
defined in the 1940 Act]."
In addition, Article VII, Section 7.2 of the Master Trust Agreement would
be deleted and replaced in its entirety with the following:
"Section 7.2 Reorganization. The Trust, or any one or more Sub-Trusts,
may, either as the successor, survivor, or non-survivor, (1) consolidate or
merge with one or more other trusts, sub-trusts, partnerships, associations or
corporations organized under the laws of the Commonwealth of Massachusetts or
any other state of the United States, to form a consolidated or merged trust,
sub-trust, partnership, limited liability company, association or corporation
under the laws of which any one of the constituent entities is organized, with
the Trust or Sub-Trust to be the survivor or non-survivor of such consolidation
or merger or (2) transfer a substantial portion of its assets to one or more
other trusts, sub-trusts, partnerships, limited liability companies,
associations or corporations organized under the laws of the Commonwealth of
Massachusetts or any other state of the United States, or have one or more such
trusts, sub-trusts, partnerships, limited liability companies, associations or
corporations transfer a substantial portion of its assets to it, any such
consolidation, merger or transfer to be upon such terms and conditions as are
specified in an agreement and plan of reorganization authorized and approved by
the Trustees and entered into by the Trust, or one or more Sub-Trusts, as the
case may be, in connection therewith. Any such consolidation, merger or transfer
may be authorized by vote of a majority of the Trustees then in office without
the approval of shareholders of any Sub-Trust."
The Board of Trustees unanimously recommends that shareholders vote FOR
approval of this proposal.
PROPOSAL 8
TO AMEND THE MASTER TRUST AGREEMENT TO
ELIMINATE SPECIFIED TIME PERMITTED BETWEEN THE
RECORD DATE AND ANY SHAREHOLDERS MEETING
The Master Trust Agreement currently provides that the Trustees may fix a
date not more than 60 days prior to the date of any meeting of shareholders as
the date of record for the determination of shareholders entitled to vote at
such meeting. As a result, proxy statements, which are required to be delivered
to record date shareholders, may not be mailed to shareholders more than 60 days
prior to a meeting. The Board of Trustees believes that it would be in the best
interest of the Fund to be able to distribute proxy statements and begin to
solicit votes more than 60 days prior to a shareholders meeting.
Increasingly, shares of mutual funds are held of record by brokerage
18
<PAGE>
firms, financial institutions or retirement plan trustees ("financial
intermediaries"), with the financial intermediary identifying in its own records
the beneficial owner of the shares. Proxy solicitations are distributed first to
the financial intermediary which in turn may forward proxy materials to the
beneficial owners of shares. The process of distributing proxy materials has
become increasingly time consuming and the period of time available to
beneficial owners to return proxies has correspondingly decreased. Although the
funds have been able to achieve quorums, the need has grown in the industry to
use interim reminder mailings and special solicitation efforts, such as
telephone calls to large record holders, in order to obtain requisite quorums.
The Trustees believe that adopting an earlier record date and commencing
a shareholder solicitation further in advance of a meeting would in many cases
help avoid this result by providing shareholders with additional time in which
to consider shareholder proposals. The proposed amendment would grant the
Trustees discretion to fix a record date as of a reasonable date prior to any
meeting of shareholders, compared with the current provision in the Master Trust
Agreement which does not allow for a record date to be fixed more than 60 days
prior to a meeting.
Approval of proposal 8 requires the affirmative vote of a majority of the
shares of the Trust entitled to vote on the proposal. If proposal 8 is approved,
Article V, Section 5.3 of the Master Trust Agreement would be deleted and
replaced in its entirety with the following:
"Section 5.3 Record Dates. For the purpose of determining the
Shareholders who are entitled to vote or act at any meeting or any
adjournment thereof, or who are entitled to participate in any dividend
or distribution, or for the purpose of any other action, the Trustees may
from time to time close the transfer books for such period, not exceeding
30 days (except at or in connection with the termination of the Trust),
as the Trustees may determine; or without closing the transfer books the
Trustees may fix a reasonable date and time prior to the date of any
meeting of Shareholders or other action as the date and time of record
for the determination of Shareholders entitled to vote at such meeting or
any adjournment thereof or to be treated as a Shareholder of record for
purposes of such other action, even though he has since that date and
time disposed of his Shares, and no Shareholder becoming such after that
date and time shall be so entitled to vote at such meeting or any
adjournment thereof or to be treated as a Shareholder of record for
purposes of such other action."
The Board of Trustees unanimously recommends that shareholders vote FOR
approval of this proposal.
VOTES REQUIRED FOR APPROVAL OF PROPOSALS 2 THROUGH 8
Approval of each of proposals 2 through 6 requires the affirmative vote
of a majority of the outstanding voting securities of the Fund as defined in the
1940 Act. Under the 1940 Act, the vote of a majority of the outstanding voting
shares means the vote of the lesser of (a) 67% or more of the voting shares
present at the meeting if the holders of more than 50% of the outstanding voting
shares are present or represented by proxy or (b) more than
19
<PAGE>
50% of the outstanding voting shares.
Approval of proposals 7 and 8 requires the affirmative vote of a majority
of the shares entitled to vote on the proposals; that is, more than 50% of the
outstanding shares (whether or not present or represented by proxy).
OTHER MATTERS TO COME BEFORE THE MEETING
The Trustees do not intend to present any other business at the Meeting,
nor are they aware that any shareholder intends to do so. If however, any other
matters are properly brought before the Meeting, the persons named in the
accompanying proxy will vote thereon in accordance with their judgment.
NO ANNUAL MEETINGS OF SHAREHOLDERS
There will be no annual or further special meetings of shareholders of
the Trust unless required by applicable law or called by the Trustees in their
discretion. In accordance with the 1940 Act, or under the Master Trust
Agreement, as amended, any Trustee may be removed (i) by a written instrument,
signed by at least two-thirds of the number of Trustees in office immediately
prior to such removal, specifying the date upon which such removal shall become
effective; or (ii) by a vote of shareholders holding not less than two-thirds of
the shares of the Trust then outstanding, cast in person or by proxy at a
meeting called for the purpose. Shareholders holding 10% or more of the shares
of the Trust then outstanding can require that the Trustees call a meeting of
shareholders for the purpose of voting on the removal of one or more Trustees.
In addition, if ten or more shareholders who have been such for at least six
months and who hold in the aggregate shares with a net asset value of at least
$25,000 or at least 1% of the outstanding Trust shares, inform the Trustees that
they wish to communicate with other shareholders, the Trustees will either give
such shareholders access to the shareholder list or inform them of the cost
involved if the Trust forwards material to shareholders on their behalf. If the
Trustees object to mailing such materials, they must inform the Securities and
Exchange Commission and thereafter comply with the requirements of the 1940 Act.
Shareholders wishing to submit proposals for inclusion in a proxy
statement for a subsequent shareholder meeting should send their written
proposals to the Secretary of the Trust, One Financial Center, Boston,
Massachusetts 02111. Shareholder proposals should be received in a reasonable
time before the solicitation is made.
WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING, PLEASE FILL IN, DATE AND
SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. NO
POSTAGE IS NECESSARY IF IT IS MAILED IN THE UNITED STATES.
October 23, 1997
Date of Proxy Statement
20
<PAGE>
STATE STREET RESEARCH MONEY MARKET FUND
a series of
State Street Research Money Market Trust
PROXY
Special Meeting of Shareholders - December 19, 1997
The undersigned hereby appoints Ralph F. Verni, Francis J. McNamara, III
and Darman A. Wing, and each of them, as proxies with full power of substitution
to act for and vote on behalf of the undersigned all shares of State Street
Research Money Market Fund, a portfolio series of State Street Research Money
Market Trust, which the undersigned would be entitled to vote if personally
present at the Special Meeting of Shareholders to be held at the principal
offices of the Trust, One Financial Center, 31st Floor, Boston, Massachusetts
02111, at 4 p.m. on Friday, December 19, 1997, or at any adjournments
thereof, on the following items as set forth in the Notice of Special Meeting of
Shareholders and the accompanying Proxy Statement.
If a choice is specified for a proposal, this proxy will be voted as
indicated. IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED FOR THE PROPOSAL.
IF NO CHOICES ARE SPECIFIED FOR ANY PROPOSALS, THIS PROXY WILL BE VOTED FOR ALL
PROPOSALS. In their discretion the proxies are authorized to vote upon such
other business as may properly come before the Meeting. The Board of Trustees
recommends a vote FOR all proposals.
The undersigned acknowledges receipt of the Notice of Special Meeting and
the accompanying Proxy Statement dated October 23, 1997. PLEASE INDICATE
ANY CHANGE OF ADDRESS ON THE REVERSE SIDE. This proxy may be revoked at any time
prior to the exercise of the powers conferred thereby.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
- --------------------------------------------------------------------------------
SEE REVERSE SIDE
- --------------------------------------------------------------------------------
<PAGE>
-----
1. Election of Trustees. ( ) FOR all nominees listed
----- below (except as noted in space
provided)
----- WITHHOLD authority to
( ) vote for all nominees
----- listed
To withhold authority to vote for any individual nominee, write that nominee's
name in the following space _____________________
_____________________________________________________________________________.
Nominees: Steve A. Garban, Malcolm T. Hopkins,
Thomas L. Phillips, Toby Rosenblatt,
Ralph F. Verni
2. To amend the Fund's fundamental policy on illiquid securities to
eliminate the limitation on restricted securities and to change the
classification of the policy from fundamental to nonfundamental.
----- ----- -----
( ) For ( ) Against ( ) Abstain
----- ----- -----
3. To amend the Fund's fundamental policy regarding industry concentration.
----- ----- -----
( ) For ( ) Against ( ) Abstain
----- ----- -----
4. To amend the Fund's fundamental policies regarding diversification of
investments.
----- ----- -----
( ) For ( ) Against ( ) Abstain
----- ----- -----
5. To amend the Fund's fundamental policy on lending to permit securities
lending.
----- ----- -----
( ) For ( ) Against ( ) Abstain
----- ----- -----
6. To eliminate the Fund's fundamental policy regarding investments in
securities of companies with less than three (3) years' continuous
operations.
----- ----- -----
( ) For ( ) Against ( ) Abstain
----- ----- -----
<PAGE>
7. To amend the Master Trust Agreement to permit the Trustees to reorganize,
merge or liquidate a fund without prior shareholder approval.
----- ----- -----
( ) For ( ) Against ( ) Abstain
----- ----- -----
8. To amend the Master Trust Agreement to eliminate specified time permitted
between the record date and any shareholders meeting.
----- ----- -----
( ) For ( ) Against ( ) Abstain
----- ----- -----
I plan to attend
the meeting: Yes No
-------- -------
( ) ( )
-------- -------
IT IS IMPORTANT THAT THIS PROXY BE
SIGNED AND RETURNED IN THE ENCLOSED
ENVELOPE.
<TABLE>
<CAPTION>
<S> <C> <C>
NOTE: Please date and sign exactly as name or
names appear hereon and return in the Signature: _________________________ Date: _____________
enclosed envelope which requires no Signature: _________________________ Date:______________
postage. When signing as attorney, executor,
trustee, guardian or officer of a corporation,
please give title as such.
</TABLE>
w:\prosp\ftprxcrd,doc
