As filed with the Securities and Exchange Commission on July 30, 1999
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. 15 [X]
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 19 [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:
Geoffrey R.T. Kenyon, Esq.
Goodwin, Procter & Hoar LLP
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, 1999 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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<PAGE>
[logo: State Street Research]
Money Market Fund
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This prospectus has information you should know before you invest. Please read
it carefully and keep it with your investment records.
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.
This prospectus will also be available in Spanish in September by calling the
State Street Research Service Center at
1-888-638-3193
A fund for short-term cash investments or current income.
Prospectus
August 1, 1999
<PAGE>
Contents
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1 The Fund
1 Goal and Strategies
3 Principal Risks
4 Volatility and Performance
6 Investor Expenses
8 Investment Management
9 Your Investment
9 Opening an Account
9 Choosing a Share Class
11 Sales Charges
13 Dealer Compensation
14 Buying and Selling Shares
18 Account Policies
20 Distributions and Taxes
21 Investor Services
22 Other Information
22 Other Securities and Risks
24 Financial Highlights
26 Board of Trustees
Back Cover For Additional Information
<PAGE>
The Fund 1
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[chesspiece graphic]
Goal and Strategies
Fundamental Goal The fund seeks a high level of current income consistent with
the preservation of capital and maintenance of liquidity by investing in
high-quality, short-term money market instruments or in U.S. government
securities. These may include such short-term corporate debt securities as
commercial paper and master demand notes; securities issued or guaranteed as to
principal and interest by the U.S. government, its agencies or
instrumentalities; and bank certificates of deposit and bankers' acceptances.
Principal Strategies The fund manages its portfolio subject to strict SEC
guidelines, which are designed so that the fund may maintain a stable $1.00
share price, although there is no guarantee that the fund will do so. All of the
fund's investments are short-term; the dollar-weighted average portfolio
maturity of the fund may not exceed 90 days.
The fund invests at least 95% of total assets in high-quality securities called
"first tier" securities. These include U.S. government securities and corporate
securities that at the time of purchase, are rated by such firms as Standard &
Poor's and Moody's in their highest short-term major rating categories, or are
unrated securities that
[start sidebar]
[magnifying glass graphic]
Who May Want To Invest
State Street Research Money Market Fund is designed for investors who seek one
or more of the following:
o a fund to complement a portfolio of more aggressive investments
o a fund for short-term investments
o a fund for emergency reserve money
The fund is not appropriate for investors who:
o require capital appreciation to meet their investment goals
o are seeking maximum income
[end sidebar]
<PAGE>
2 The Fund continued
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are considered equivalent by the investment manager. The fund invests more than
25% of its total assets in the financial services industry.
The fund may invest up to 5% of its portfolio in "second tier" securities, which
generally are corporate securities that, at the time of purchase, are rated by
such firms as Standard & Poor's and Moody's in their second highest short-term
major rating categories, or unrated securities that are considered equivalent by
the investment manager.
Investments typically include instruments such as commercial paper that are used
by corporations for short-term borrowings, as well as bank instruments such as
certificates of deposit. If it chooses, the fund may invest all of its assets in
any one type of first tier securities. Up to 50% of total assets may be invested
in restricted securities. Restricted securities generally are corporate
securities sold to institutional investors and subject to limited resale rights.
The fund may adjust the composition of its portfolio as market conditions and
economic outlooks change. For more information about the fund's investments and
practices, see page 22.
<PAGE>
3
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[traffic sign graphic]
Principal Risks
Because the fund invests in money market instruments and manages its portfolio
to maintain a stable share price, its major risks are those that could affect
the overall yield of the fund. Among these situations are those that would cause
short-term interest rates to decline, such as strong equity markets or a weak
economy. Such a decline would lower the fund's yield and the return on your
investment.
To the extent the fund invests in restricted securities, it could hamper the
fund's ability to raise cash to meet redemptions. This is because these
securities may be new and complex and trade only among institutions; the markets
for these securities are still developing and may not function as efficiently as
established markets.
The fund cannot be certain that it will achieve its goal. Furthermore, fund
shares are not bank deposits and are not guaranteed, endorsed or insured by any
financial institution, government entity or the FDIC. Although the fund seeks to
preserve the value of your investment at $1.00 per share, it is possible that
you could lose money by investing in the fund.
Information on other securities and risks appears on page 22.
A "snapshot" of the fund's investments may be found in the current annual or
semiannual report (see back cover).
[start sidebar]
[magnifying glass graphic]
The Uses of Money Market Funds
Money market funds can be a valuable tool in an investor's portfolio for a
variety of reasons. For example, money market funds are often used to meet
short-term cash investment needs. They also can serve as a place to hold cash
pending its use for a longer term investment. Finally, many investors use money
market funds to diversify a portfolio of more aggressive investments, especially
when they want to reduce their exposure to market volatility or when they expect
the market to decline.
[end sidebar]
<PAGE>
4 Volatility and Performance
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[start bar chart]
<TABLE>
<CAPTION>
Years ended December 31
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Year-by-Year
Total Return
(Class E) 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
8.89 7.77 5.58 3.15 2.50 3.60 5.33 4.81 5.03 5.03
</TABLE>
[arrow up] Best quarter: second quarter 1989, up 2.31%
[arrow down] Worst quarter: second quarter 1993, up 0.60%
Return from 1/1/99 - 6/30/99 (not annualized): up 1.67%
[end bar chart]
<TABLE>
<CAPTION>
As of December 31, 1998
-----------------------
Average Annual Total Return 1 Year 5 Years 10 Years
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Class B (%) (0.99) 3.37 4.57
Class B(1)(%)(a) (0.99) 3.37 4.57
Class C (%) 3.01 3.72 4.58
Class E (%) 5.03 4.76 5.15
Class S (%) 5.03 4.76 5.15
MetLife Securities Money Fund Class T(%)(b) 5.03 4.76 5.15
Three-month Treasury Bill Index (%) 4.88 5.02 5.32
Lipper Money Market Funds Index (%) 5.10 4.90 5.32
</TABLE>
To obtain
current yield
information
call 1-800-562-0032.
(a) Performance for Class B(1) reflects Class B performance through December
31, 1998. Class B(1) was introduced on January 1, 1999.
(b) Performance for MetLife Securities Money Fund Class T reflects Class E
performance through July 31, 1998. Metlife Securities Money Fund Class T
was introduced on August 1, 1998.
<PAGE>
5
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[start sidebar]
[magnifying glass graphic]
Understanding
Volatility and
Performance
The chart and table on the opposite page are designed to show two aspects of the
fund's track record:
o Year-by-Year Total Return shows how volatile the fund has been: how much the
difference has been, historically, between its best years and worst years. In
general, funds with higher average annual total returns will also have higher
volatility. The graph includes the effects of fund expenses, but not sales
charges. If sales charges had been included, returns would have been less
than shown.
o Average Annual Total Return is a measure of the fund's performance over
time. It is determined by taking the fund's performance over a given period
and expressing it as an average annual rate. Average annual total return
includes the effects of fund expenses and maximum sales charges for each
class, and assumes that you sold your shares at the end of the period.
Also included with the fund's average annual returns are two independent
measures of performance. The Three-month Treasury Bill Index is an unmanaged
index that measures the average yield of three-month Treasury bills. The Lipper
Money Market Funds Index shows you how well the fund has done compared to
competing funds. When making comparisons, keep in mind that the Three-month
Treasury Bill index does not include any management fees or other expenses.
The returns in both the chart and the table would have been lower if the
distributor had not voluntarily reduced the fund's expenses.
In both the chart and the table, the returns shown for the fund include
performance from before the creation of share classes in 1993. If the returns
for Class B(1), Class B and Class C from before 1993 had reflected their current
distribution/service (12b-1) fees (as described on page 6), these returns would
have been lower.
Keep in mind that past performance is no guarantee of future results.
[end sidebar]
<PAGE>
6 Investor Expenses
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<TABLE>
<CAPTION>
Class descriptions begin on page 9
Shareholder Fees Classes
(% of offering price) Class B Class B(1) Class C E, S & T
<S> <C> <C> <C> <C>
Maximum front-end sales charge (load) 0.00 0.00 0.00 0.00
Maximum deferred sales charge (load) 5.00 5.00 1.00 0.00
Annual Fund Operating Expenses Classes
(% of average net assets) Class B Class B(1) Class C E, S & T
Management fee 0.50 0.50 0.50 0.50
Distribution/service (12b-1) fees 1.00 1.00 1.00 0.00
Other expenses 0.27 0.27 0.27 0.27
Total annual fund operating expenses* 1.77 1.77 1.77 0.77
*Because some of the fund's expenses
have been subsidized, actual total
operating expenses for the prior year were: 1.66 1.66 1.66 0.66
</TABLE>
The fund expects the expense subsidy to continue through the current fiscal
year, although there is no guarantee that it will.
<TABLE>
<CAPTION>
Example Year Class B Class B(1) Class C Classes E, S & T
<S> <C> <C> <C> <C>
1 $680/$180 $680/$180 $280/$180 $79
3 $857/$557 $857/$557 $557 $246
5 $1,159/$959 $1,159/$959 $959 $428
10 $1,886 $1,886 $2,084 $954
</TABLE>
<PAGE>
7
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[start sidebar]
[magnifying glass graphic]
Understanding Investor Expenses
The information on the opposite page is designed to give you an idea of what you
should expect to pay in expenses as an investor in the fund:
o Shareholder Fees are costs that are charged to you directly. These fees are
not charged on reinvestments or exchanges.
o Annual Fund Operating Expenses are deducted from the fund's assets every
year, and are thus paid indirectly by all fund investors.
o The Example is designed to allow you to compare the costs of this fund with
those of other funds. It assumes that you invested $10,000 over the years
indicated, reinvested all distributions, earned a hypothetical 5% annual
return and paid the maximum applicable sales charges. For Class B(1) and
Class B shares, it also assumes the automatic conversion to Class E after
eight years.
Where two numbers are shown separated by a slash, the first one assumes you sold
all your shares at the end of the period, while the second assumes you stayed in
the fund. Where there is only one number, the costs would be the same either
way.
The figures in the Example assume full annual expenses, and would be lower if
they reflected the subsidy.
Investors should keep in mind that the example is for comparison purposes only.
The fund's actual performance and expenses may be higher or lower.
[end sidebar]
<PAGE>
8 The Fund continued
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["The Thinker" graphic]
Investment Management
The fund's investment manager is State Street Research & Management Company, One
Financial Center, Boston, Massachusetts 02111. The firm traces its heritage back
to 1924 and the founding of one of America's first mutual funds. Today the firm
has more than $54 billion in assets under management (as of June 30, 1999),
including more than $17 billion in mutual funds.
The investment manager is responsible for the fund's investment and business
activities, and receives the management fee annually as compensation (0.50% of
net assets). The investment manager is a subsidiary of Metropolitan Life
Insurance Company.
<PAGE>
Your Investment 9
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[key graphic]
Opening an Account
If you are opening an account through a financial professional, he or she can
assist you with all phases of your investment.
If you are investing through a large retirement plan or other special program,
follow the instructions in your program materials.
To open an account without the help of a financial professional, please use the
instructions on these pages.
[list graphic]
Choosing a Share Class
The fund generally offers five share classes, each with its own sales charge and
expense structure: Class B(1), Class C, Class E, Class S and MetLife Securities
Money Fund Class T. The fund also offers Class B shares, but only to current
Class B shareholders through reinvestment of dividends and distributions or
through exchanges from existing Class B accounts of the State Street Research
funds.
Class E is the share class that is generally available for initial investment.
It is also the share class that is used for exchanges with Class A shares of
other State Street Research funds. Class B(1) and Class C are available only by
exchange from the corresponding share class of other funds.
<PAGE>
10 Your Investment continued
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If you are investing through a special program, such as a large
employer-sponsored retirement plan or certain programs available through
brokers, you may be eligible to purchase Class S shares.
MetLife Securities Money Fund Class T is for accounts available through MetLife
and its affiliates.
Class B(1) - Back Load
o Available only to investors exchanging from Class B(1) shares of another
State Street Research fund
o No initial sales charge
o Deferred sales charge of 5% or less on shares you sell within six years
o Annual distribution/service (12b-1) fee of 1.00%
o Automatic conversion to Class E shares after eight years, reducing future
annual expenses
Class B - Back Load
o Available only to current Class B shareholders. See page 11 for details.
Class C - Level Load
o Available only to investors exchanging from Class C shares of another State
Street Research fund
o No initial sales charge
o Deferred sales charge of 1%, paid if you sell shares within one year of
purchase
o Lower deferred sales charge than Class B(1) shares
o Annual distribution/service (12b-1) fee of 1.00%
o No conversion to Class E shares after eight years, so annual expenses do not
decrease
Class E - No Load
o Available to all investors purchasing fund shares directly
o No sales charge of any kind
o No distribution/service (12b-1) fees; annual expenses are lower than other
share classes
Class S - Special Programs
o Available only through certain retirement accounts, advisory accounts of the
investment manager and other special programs, including broker programs
through financial professionals with recordkeeping and other services; these
programs usually involve special conditions and separate fees (consult your
financial professional or your program materials)
o No sales charges of any kind
o No distribution/service (12b-1) fees; annual expenses are lower than other
share classes
MetLife Securities Money Fund Class T
o For accounts available through MetLife and certain affiliates
o No sales charge of any kind
o No distribution/service (12b-1) fees; annual expenses are lower than other
share classes
<PAGE>
11
---
Sales Charges
Class B(1) - Back Load
<TABLE>
<CAPTION>
this % of net asset value
when you sell shares at the time of purchase
in this year after (or of sale, if lower) is
you bought them deducted from your proceeds
- --------------------------------------------------
<S> <C>
First year 5.00
Second year 4.00
Third year 3.00
Fourth year 3.00
Fifth year 2.00
Sixth year 1.00
Seventh or eighth year None
</TABLE>
With Class B(1) shares, you pay no sales charge when you invest, but you are
charged a "contingent deferred sales charge" (CDSC) when you sell shares you
have held for six years or less, as described in the table above. See "Other
CDSC Policies" on page 12.
Class B(1) shares automatically convert to Class E shares after eight years;
Class E shares have lower annual expenses.
Class B - Back Load
Class B shares are available only to current shareholders through reinvestment
of dividends and distributions or through exchanges from existing Class B
accounts of the State Street Research funds. Other investments made by current
Class B shareholders will be in Class B(1) shares.
With Class B shares, you are charged a "contingent deferred sales charge"(CDSC)
when you sell shares you have held for five years or less. The CDSC is a
percentage of net asset value at the time of purchase (or of sale, if lower) and
is deducted from your proceeds. When you sell shares in the first year after you
bought them, the CDSC is 5.00%; second year, 4.00%; third year, 3.00%; fourth
year, 3.00%; fifth year, 2.00%; sixth year or later, none. See "Other CDSC
Policies" on page 12.
Class B shares automatically convert to Class E shares after eight years.
Class C - Level Load
<TABLE>
<CAPTION>
this % of net asset
value at the time of
when you sell shares in purchase (or of sale, if
this year after you bought lower) is deducted from
them your proceeds
- -----------------------------------------------------
<S> <C>
First year 1.00
Second year or later None
</TABLE>
With Class C shares, you pay no sales charge when you invest, but you are
charged a "contingent deferred sales charge" (CDSC) when you sell shares you
have held for one year or less, as
<PAGE>
12 Your Investment continued
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[start sidebar]
[magnifying glass graphic]
Understanding Distribution/Service Fees
As noted in the descriptions, Class B, Class B(1) and Class C have an annual
distribution/service fee, also called a 12b-1 fee.
Under its current 12b-1 plans, the fund may pay certain distribution and service
fees for these classes out of fund assets. Because 12b-1 fees are an ongoing
expense, they will increase the cost of your investment and, over time, could
potentially cost you more than if you had paid other types of sales charges.
Some of the 12b-1 fee is used to compensate those financial professionals who
sell fund shares and provide ongoing service to shareholders. The table on page
13 shows how these professionals' compensation is calculated.
The fund may continue to pay 12b-1 fees even if the fund is subsequently closed
to new investors.
[end sidebar]
described in the table on page 11. See "Other CDSC Policies" below.
Class C shares currently have the same annual expenses as Class B(1) shares, but
never convert to Class E shares (with their lower annual expenses).
Class E - No Load;
Class S - Special Programs;
MetLife Securities Money Fund Class T These shares have no sales charges.
Other CDSC Policies
The CDSC will be based on the net asset value of the shares at the time of
purchase (or sale, if lower). Any shares acquired through reinvestment are not
subject to the CDSC. There is no CDSC on exchanges into other State Street
Research funds, and the date of your initial investment will continue to be used
as the basis for CDSC calculations when you exchange. To ensure that you pay the
lowest CDSC possible, the fund will always use the shares with the lowest CDSC
to fill your sell requests.
The CDSC is waived on shares sold for participant initiated distributions from
State Street Research prototype retirement plans. In other cases, the CDSC is
waived on shares sold for mandatory retirement distributions or because of
disability or death. Consult your financial professional or the State Street
Research Service Center for more information.
<PAGE>
13
---
[check graphic]
Dealer Compensation
Financial professionals who sell shares of State Street Research funds and
perform services for fund investors may receive sales commissions annual fees
and other compensation. These are paid by the fund's distributor, using money
from sales charges, distribution/service (12b-1) fees and its other resources.
Brokers and agents may charge a transaction fee on orders of fund shares placed
directly through them. The distributor may pay its affiliate MetLife Securities,
Inc. additional compensation of up to 0.25% of certain sales or assets.
Brokers for Portfolio Trades
When placing trades for the fund's portfolio, State Street Research chooses
brokers that provide the best execution (a term defined by service as well as
price), but may also consider the sale of shares of the State Street Research
Funds by the broker.
Dealer Commissions
<TABLE>
<CAPTION>
Initial commission (%) Annual fee (%)
- -------------------------------------------------------------------
<S> <C> <C>
Class B(1) - 0.25
Class B - 0.25
Class C - 1.00
Class E 0.00 0.00
Class S 0.00 0.00
Class T 0.00 0.00
</TABLE>
<PAGE>
14 Buying and Selling Shares
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[cash register graphic]
Policies for
Buying Shares
Once you have chosen a share class, the next step is to determine the amount you
want to invest.
Minimum Initial Investments:
o $1,000 for accounts that use the Investamatic program(a)
o $2,000 for Individual Retirement Accounts(a)
o $2,500 for all other accounts
Minimum Additional Investments:
o $50 for any account
Complete the enclosed application. You can avoid future inconvenience by signing
up now for any services you might later use.
Timing of Requests The processing of your order will depend upon the method of
payment you choose, as well as the time your order is received. If you are
paying for your shares with a check, an order received prior to 4:00 p.m.
eastern time will be processed as of 4:00 p.m. on the next business day and you
will begin earning dividends on the business day after that.
If you are paying for your shares with a wire transfer, an order and wire
payment received prior to 4:00 p.m. eastern time will generally be processed as
of 4:00 p.m. on the same day and you will begin earning dividends on the next
business day. Special procedures are available to enable you to begin earning
dividends immediately on wire transfers of $25,000 or more. To make a same-day
wire investment, please notify State Street Research by 9:30 a.m. of your
intention to wire funds, and make sure your wire arrives by 12:00 noon.
Wire Transactions Funds may be wired between 8:00 a.m. and 4:00 p.m. eastern
time. Your bank may charge a fee for wiring money.
(a) Except $500 for Individual Retirement Accounts during special promotional
periods.
<PAGE>
Instructions for Buying Shares 15
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
To Open an Account To Add to an Account
<S> <C> <C> <C>
[briefcase graphic] Through a Consult your financial professional Consult your financial
Professional or your program materials. professional or your
or Program program materials.
By Mail [mailbox graphic] Make your check payable to "State Fill out an investment
Street Research Funds." Forward the slip or indicate the fund
check and your application to State name and account number on
Street Research. your check. Make your
check payable to "State Street
Research Funds." Forward the
check and slip to State Street
Research.
[Capitol Building By Federal Call to obtain an account number Call State Street Research
graphic] Funds Wire and forward your application to to obtain a control
State Street Research. Wire funds number. Instruct your bank
using the instructions at right. to wire funds to:
o State Street Bank and
Trust Company, Boston,
MA
o ABA: 011000028o BNF:
fund name and share
class you want to buy
o AC: 99029761
o OBI: your name and
your account number
o Control: the number
given to you by State
Street Research
By Electronic [plug graphic] Verify that your bank is a member Call State Street Research
Funds Transfer of the ACH (Automated Clearing to verify that the
(ACH) House) system. Forward your necessary bank information
application to State Street is on file for your
Research. Please be sure to include account. If it is, you may
the appropriate bank information. request a transfer with
Call State Street Research to the same phone call. If
request a purchase. not, please ask State
Street Research to provide you
with an EZ Trader application.
[calendar graphic] By Investamatic Forward your application, with all Call State Street Research
appropriate sections completed, to to verify that
State Street Research, along with a Investamatic is in place
check for your initial investment on your account, or to
payable to "State Street Research request a form to add it.
Funds." Investments are automatic
once Investamatic is in
place.
By Exchange [exchange graphic] Call State Street Research or visit Call State Street Research
our Web site. or visit our Web site.
State Street Research Service Center PO Box 8408, Boston, MA 02266-8408
Call toll-free: 1-800-562-0032 (business days 8:00 a.m. - 6:00 p.m., eastern time)
Internet www.ssrfunds.com
</TABLE>
<PAGE>
16 Your Investment continued
- --------------------------------------------------------------------------------
[cash register graphic]
Policies for
Selling Shares
Circumstances that Require Written Requests Please submit instructions in
writing when any of the following apply:
o you are selling more than $100,000 worth of shares
o the name or address on the account has changed within the last 30 days
o you want the proceeds to go to a name or address not on the account
registration
o you are transferring shares to an account with a different registration or
share class
o you are selling shares held in a corporate or fiduciary account; for these
accounts, additional documents are required:
corporate accounts: certified copy of a corporate resolution
fiduciary accounts: copy of power of attorney or other governing document
To protect your account against fraud, all signatures on these documents must be
guaranteed. You may obtain a signature guarantee at most banks and securities
dealers. A notary public cannot provide a signature guarantee.
Incomplete Sell Requests State Street Research will attempt to notify you
promptly if any information necessary to process your request is missing.
Timing of Requests If you want proceeds from a redemption to be wired on the
same business day, you must submit your request before 9:30 a.m. eastern time.
If you follow this procedure you will not earn a dividend for the day of
redemption.
Other redemption requests received before 4:00 p.m. will be processed as of 4:00
p.m. Proceeds for these redemptions will not be available until the next
business day but you will earn a dividend for the day of redemption. Redemption
requests received after 4:00 p.m. will be treated as if they had been received
as of the opening of the next business day.
Wire Transactions Proceeds sent by federal funds wire must total at least
$1,000. A fee of $7.50 will be deducted from all proceeds sent by wire, and your
bank may charge an additional fee to receive wired funds.
Selling Recently Purchased Shares If you sell shares before the check or
electronic funds transfer (ACH) for those shares has been collected, you will
not receive the proceeds until your initial payment has cleared. This may take
up to 15 days after your purchase was recorded (in rare cases, longer). If you
open an account with shares purchased by wire, you cannot sell those shares
until your application has been processed.
<PAGE>
Instructions for Selling Shares 17
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
[briefcase graphic] Through a Consult your financial professional or your program materials.
Professional or
Program
By Mail [mailbox graphic] Send a letter of instruction, an endorsed stock power or share certificates (if you hold
certificate shares) to State Street Research. Specify the fund, the account number and the
dollar value or number of shares. Be sure to include all necessary signatures and any
additional documents, as well as signature guarantees if required (see facing page).
[Capitol Building By Federal Funds Check with State Street Research to make sure that a wire redemption privilege, including a
graphic] Wire bank designation, is in place on your account. Once this is established, you may place your
request to sell shares with State Street Research. Proceeds will be wired to your
pre-designated bank account. (See "Wire Transactions" on facing page.)
By Electronic Funds [plug graphic] Check with State Street Research to make sure that the EZ Trader feature, including a bank
Transfer (ACH) designation, is in place on your account. Once this is established, you may place your
request to sell shares with State Street Research. Proceeds will be sent to your
pre-designated bank account.
[phone graphic] By Telephone As long as the transaction does not require a written request (see facing page), you or your
financial professional can sell shares by calling State Street Research. A check will be
mailed to your address of record on the following business day.
By Exchange [exchange Read the prospectus for the fund into which you are exchanging. Call State Street Research
graphic] or visit our Web site.
[calendar graphic] By Systematic See plan information on page 21.
Withdrawal Plan
By Check [check graphic] The checkwriting privilege is available for Class E shares only. If you have requested this
privilege on your application, you may write checks for amounts of $500 or more.
State Street Research Service Center PO Box 8408, Boston, MA 02266-8408
Call toll-free: 1-800-562-0032 (business days 8:00 a.m. - 6:00 p.m., eastern time)
Internet www.ssrfunds.com
</TABLE>
<PAGE>
18 Your Investment continued
- --------------------------------------------------------------------------------
[policies graphic]
Account Policies
Telephone Requests When you open an account you automatically receive telephone
privileges, allowing you to place requests for your account by telephone. Your
financial professional can also use these privileges to request exchanges for
your account and, with your written permission, redemptions. For your
protection, all telephone calls are recorded.
As long as State Street Research takes certain measures to authenticate
telephone requests on your account, you may be held responsible for unauthorized
requests. Unauthorized telephone requests are rare, but if you want to protect
yourself completely, you can decline the telephone privilege on your
application. The fund may suspend or eliminate the telephone privilege at any
time.
Exchange Privileges There is no fee to exchange shares among State Street
Research funds. Your new fund shares will be the equivalent class of your
current shares. Any contingent deferred sales charges will continue to be
calculated from the date of your initial investment.
Accounts with Low Balances If the value of your account falls below $1,500,
State Street Research may mail you a notice asking you to bring the account back
up to $1,500 or close it out. If you do not take action within 60 days, State
Street Research may either sell your shares and mail the proceeds to you at the
address of record or, depending on the circumstances, may deduct an annual
maintenance fee (currently $18).
<PAGE>
19
---
The Fund's Business Hours The fund is open the same days as the New York Stock
Exchange (generally Monday through Friday). Fund representatives are available
from 8:00 a.m. to 6:00 p.m. eastern time on these days.
Calculating Share Price The fund calculates its net asset value every business
day at 12:00 noon and at the close of regular trading on the New York Stock
Exchange (usually 4:00 p.m. eastern time). NAV is calculated by dividing the
fund's net assets by the number of its shares outstanding.
In calculating its NAV, the fund uses the amortized cost valuation method to
determine the value of portfolio securities. However, when the investment
manager believes that the use of amortized cost valuation may dilute or result
in unfairness to shareholders, the fund may take such action as it deems
appropriate to eliminate or reduce the extent of any dilution or unfairness.
Reinstating Recently Sold Shares For 120 days after you sell shares, you have
the right to "reinstate" your investment by putting some or all of the proceeds
into any currently available State Street Research fund at net asset value. Any
CDSC you paid on the amount you are reinstating will be credited to your
account. You may only use this privilege once in any twelve-month period with
respect to your shares of a given fund.
Additional Policies Please note that the fund maintains additional policies and
reserves certain rights, including:
o The fund may vary its requirements for initial or additional investments,
exchanges, reinvestments, periodic investment plans, retirement and employee
benefit plans, sponsored arrangements and other similar programs
o All orders to purchase shares are subject to acceptance by the fund
o At any time, the fund may change or discontinue its sales charge waivers and
any of its order acceptance practices, and may suspend the sale of its shares
o The fund may delay sending you redemption proceeds for up to seven days, or
longer if permitted by the SEC
o To permit investors to obtain the current price, dealers are responsible for
transmitting all orders to the State Street Research Service Center promptly
<PAGE>
20 Your Investment continued
- --------------------------------------------------------------------------------
[Uncle Sam graphic]
Distributions and Taxes
Income and Capital Gains Distributions The fund distributes its net income to
shareholders; it declares dividends daily and pays them monthly. The fund does
not anticipate paying any capital gains distributions.
You may have your distributions reinvested in the fund, invested in a different
State Street Research fund, deposited in a bank account or mailed out by check.
If you do not give State Street Research other instructions, your distributions
will automatically be reinvested in the fund.
Tax Effects of Distributions and Transactions In general, any dividends you
receive from the fund are taxable as ordinary income.
Every year, the fund will send you information detailing the amount of ordinary
income (and capital gains, if any) distributed to you for the previous year.
The sale of shares in your account could produce a gain or loss. For tax
purposes, an exchange is the same as a sale.
Your investment in the fund could have additional tax consequences. Please
consult your tax professional for assistance.
Backup Withholding By law, the fund must withhold 31% of your distributions and
proceeds if you have not provided complete, correct taxpayer information.
<PAGE>
21
---
[handshake graphic]
Investor Services
Investamatic Program Use Investamatic to set up regular automatic investments
in the fund from your bank account. You determine the frequency and amount of
your investments.
Systematic Withdrawal Plan This plan is designed for retirees and other
investors who want regular withdrawals from a fund account. The plan is free and
allows you to withdraw up to 12% of your fund assets a year (minimum $50 per
withdrawal) without incurring any contingent deferred sales charges. Certain
terms and minimums apply.
EZ Trader This service allows you to purchase or sell fund shares over the
telephone through the ACH (Automated Clearing House) system.
Dividend Allocation Plan This plan automatically invests your distributions
from the fund into another fund of your choice, without any fees or sales
charges.
Automatic Bank Connection This plan lets you route any distributions or
Systematic Withdrawal Plan payments directly to your bank account.
Retirement Plans State Street Research also offers a full range of prototype
retirement plans for individuals, sole proprietors, partnerships, corporations
and employees.
Call 1-800-562-0032 for information on any of the services described above.
<PAGE>
22 Other Information
- --------------------------------------------------------------------------------
[stock certificates graphic]
Other Securities
and Risks
Each of the fund's portfolio securities and investment practices offers certain
opportunities and carries various risks. Major investments and risk factors are
outlined in the fund description starting on page 1. Below are brief
descriptions of other securities and practices, along with their associated
risks.
RESTRICTED AND ILLIQUID SECURITIES Any securities that are thinly traded or
whose resale is restricted can be difficult to sell at a desired time and price.
Some of these securities are new and complex, and trade only among institutions;
the markets for these securities are still developing, and may not function as
efficiently as established markets. Owning a large percentage of restricted and
illiquid securities could hamper the fund's ability to raise cash to meet
redemptions. Also, because there may not be an established market price for
these securities, the fund may have to estimate their value, which means that
their valuation -- and the valuation of the fund -- may have a subjective
element.
Securities Ratings When securities are rated by one or more independent rating
agencies, the fund uses these ratings to determine credit quality. In cases
where a security has received a rating from only one independent rating agency,
it may rely on that rating. If a security has received ratings from two or more
rating agencies and at least two of the ratings are equivalent, the fund may
rely on the two equivalent ratings even if the other ratings are lower. In cases
where a security's two highest ratings are in conflicting categories, the fund
must follow the lower rating. If a security is unrated, the fund may assign it
to a given category based on its own credit research.
<PAGE>
23
---
Foreign Investments Foreign bonds and instruments of foreign banks generally
have more risk than their domestic counterparts, in part because of higher
political and economic risks and lack of reliable information. The fund may
invest up to 15% of total assets in securities of Canadian issuers. The fund
also may invest up to 25% of total assets in obligations of foreign banks (other
than U.S. branches of foreign banks) and foreign branches of U.S. banks without
the guarantee of a U.S. bank. All foreign securities purchased by the fund are
denominated in U.S. dollars.
Repurchase Agreements The fund may buy securities with the understanding that
the seller will buy them back with interest at a later date. If the seller is
unable to honor its commitment to repurchase the securities, the fund could lose
money.
Derivatives Derivatives are financial instruments whose value derives from one
or more securities. Certain instruments that are first or second tier securities
also may be derivatives, such as short-term, high-quality asset-backed
securities. The fund uses derivatives to invest for potential income, and may
purchase them to the extent it can purchase any other type of first or second
tier security. The values of some derivatives are difficult to determine because
they are based on the values of other securities and the markets for some
derivatives may be limited. With some derivatives, such as certain option
contracts, there is also the risk that the counterparty may fail to honor its
contract terms, causing a loss for the fund.
Year 2000 The investment manager does not currently anticipate that computer
problems related to the year 2000 will have a material effect on the fund.
However, there can be no assurances in this area, including the possibility that
year 2000 computer problems could negatively affect communication systems,
investment markets or the economy in general.
<PAGE>
24 Financial Highlights
- --------------------------------------------------------------------------------
These highlights are intended to help you understand the fund's performance over
the past five years. The information in these tables has been audited by
PricewaterhouseCoopers LLP, the fund's independent accountants. Their report and
the fund's financial statements are included in the fund's annual report, which
is available upon request. Total return figures assume reinvestment of all
distributions.
<TABLE>
<CAPTION>
Class B(1) Class B Class C
----------------------------------------------------------------------------------------------------
Years ended March 31 Years ended March 31
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Data 1999(b) 1995 1996 1997 1998 1999 1995 1996 1997 1998 1999
Net asset value,
beginning of year ($) 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
Net investment
income ($)* 0.008 0.032 0.041 0.037 0.040 0.038 0.032 0.041 0.037 0.040 0.038
Dividends from net
investment income ($) (0.008) (0.032) (0.041) (0.037) (0.040) (0.038) (0.032) (0.041) (0.037) (0.040) (0.038)
Net asset value,
end of year ($) 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
Total return (%)(a) 0.84(c) 3.27 4.16 3.72 4.09 3.85 3.28 4.16 3.72 4.09 3.85
Net assets at
end of year
($ thousands) 732 9,322 11,884 15,982 14,567 30,288 842 1,964 959 2,314 2,286
Expense ratio (%)* 1.66(d) 1.75 1.75 1.75 1.65 1.66 1.75 1.75 1.75 1.65 1.66
Ratio of net
investment income
to average net
assets (%)* 3.40(d) 3.53 4.06 3.69 4.01 3.73 3.30 4.08 3.68 4.01 3.72
*Reflects voluntary
reduction of expenses
per share of these
amounts ($) 0.000 0.004 0.003 0.002 0.002 0.001 0.005 0.003 0.002 0.002 0.001
</TABLE>
<PAGE>
25
---
<TABLE>
<CAPTION>
MetLife
Securities
Money Fund
Class E Class S Class T
-------------------------------------------------------------------------------------------------------
Years ended March 31 Years ended March 31
Per Share Data 1995 1996 1997 1998 1999 1995 1996 1997 1998 1999 1999(e)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year ($) 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
Net investment
income ($)* 0.042 0.051 0.047 0.050 0.048 0.042 0.051 0.047 0.050 0.048 0.031
Dividends from net
investment income ($) (0.042) (0.051) (0.047) (0.050) (0.048) (0.042) (0.051) (0.047) (0.050) (0.048) (0.031)
Net asset value,
end of year ($) 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
Total return (%)(a) 4.31 5.20 4.78 5.12 4.88 4.31 5.20 4.78 5.12 4.88 3.15(c)
Ratios/Supplemental Data
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at
end of year
($ thousands) 150,491 197,109 192,360 221,475 331,094 7,886 16,191 14,710 13,500 26,842 491
Expense ratio (%)* 0.75 0.75 0.75 0.65 0.66 0.75 0.75 0.75 0.65 0.66 0.66(d)
Ratio of net
investment income
to average net assets (%)* 4.26 5.06 4.69 5.01 4.74 4.66 5.03 4.69 5.01 4.77 4.65(d)
*Reflects voluntary
reduction of expenses
per share of these
amounts ($) 0.006 0.003 0.002 0.002 0.001 0.003 0.003 0.002 0.002 0.001 0.001
</TABLE>
(a) 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 reduced the fund's expenses.
(b) January 1, 1999 (commencement of share class) to March 31, 1999.
(c) Not annualized.
(d) Annualized.
(e) August 1, 1998 (commencement of share class) to March 31, 1999.
<PAGE>
26 Board of Trustees
- --------------------------------------------------------------------------------
[Greek column graphic]
The Board of Trustees is responsible for the operation of the fund. They
establish the fund's major policies, review investments, and provide guidance to
the investment manager and others who provide services to the fund. The Trustees
have diverse backgrounds and substantial experience in business and other areas.
Ralph F. Verni
Chairman of the Board, President,
Chief Executive Officer and Director,
State Street Research & Management
Company
Bruce R. Bond
Chairman of the Board, Chief Executive
Officer and President, PictureTel
Corporation
Steve A. Garban
Former Senior Vice President for
Finance and Operations and Treasurer,
The Pennsylvania State University
Malcolm T. Hopkins
Former Vice Chairman of the Board and
Chief Financial Officer, St. Regis
Corp.
Dean O. Morton
Former Executive Vice President,
Chief Operating Officer and Director,
Hewlett-Packard Company
Susan M. Phillips
Dean, School of Business and Public
Management, George Washington
University, former Member of the Board
of Governors of the Federal Reserve
System and Chairman and Commissioner
of the Commodity Futures Trading
Commission
Toby Rosenblatt
President, Founders Investments Ltd.
President, The Glen Ellen Company
Michael S. Scott Morton
Jay W. Forrester Professor of
Management, Sloan School of
Management, Massachusetts Institute of
Technology
<PAGE>
Notes 27
- --------------------------------------------------------------------------------
<PAGE>
For Additional Information
- --------------------------------------------------------------------------------
If you have questions about the fund or would like to request a free copy of the
current annual/semiannual report or SAI, contact State Street Research or your
financial professional.
[logo: State Street Research]
Service Center
P.O. Box 8408, Boston, MA 02266
Telephone: 1-800-562-0032
Internet: www.ssrfunds.com
You can also obtain information about the fund, including the SAI and certain
other fund documents, on the Internet at www.sec.gov, in person at the SEC's
Public Reference Room in Washington, DC (telephone 1-800-SEC-0330) or by mail by
sending your request, along with a duplicating fee, to the SEC's Public
Reference Section, Washington, DC 20549-6009.
You can find additional information on the fund's structure and its performance
in the following documents:
Annual/Semiannual Reports While the prospectus describes the fund's potential
investments, these reports detail the fund's actual investments as of the report
date. The annual report also includes the report of the fund's independent
accountants.
Statement of Additional Information (SAI) A supplement to the prospectus, the
SAI contains further information about the fund and its investment limitations
and policies. A current SAI for this fund is on file with the Securities and
Exchange Commission and is incorporated by reference (is legally part of this
prospectus).
Ticker Symbols
Class B(1) (proposed) SSPXX
Class B (proposed) SSBXX
Class C (proposed) SSDXX
Class E SSRXX
Class S (proposed) SSSXX
Class T (proposed) SRMXX
prospectus
- --------------------------
MM-937F-0899
SEC File Number: 811-4295 Control Number: (exp 0800)SSR-LD
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
for
STATE STREET RESEARCH MONEY MARKET FUND
a Series of State Street Research Money Market Trust
August 1, 1999
This Statement of Additional Information is divided into Section One
and Section Two. Section One contains specific information about the Fund's
investment policies. Section Two contains more general information about the
Fund and additional information about certain securities and investment
practices.
The Statement of Additional Information is not a Prospectus. It should
be read in conjunction with the State Street Research Money Market Fund
Prospectus dated August 1, 1999. The Prospectus may be obtained without charge
from State Street Research Investment Services, Inc. (the "Distributor"), One
Financial Center, Boston, Massachusetts 02111-2690, or by calling
1-800-562-0032.
Financial statements for the Fund, as of and for the fiscal year ended
March 31, 1999 are included in the Fund's Annual Report to Shareholders for that
year. The annual report is incorporated by reference herein and is available
without charge, upon request by calling the State Street Research Service Center
at 1-800-562-0032.
CONTROL NUMBER: (exp0800)SSR-LD MM-938F-0899
<PAGE>
TABLE OF CONTENTS
-----------------
Section One
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE.........................................................I-1
ADDITIONAL INVESTMENT RESTRICTIONS AND POLICIES..............................I-1
MONEY MARKET INSTRUMENTS.....................................................I-4
THE FUND ....................................................................I-9
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES..........................I-9
TRUSTEE COMPENSATION........................................................I-11
ADVISORY FEE................................................................I-12
PORTFOLIO TURNOVER..........................................................I-12
BROKERAGE COMMISSIONS.......................................................I-12
SALES CHARGES ON SHARES OF THE FUND.........................................I-13
RULE 12b-1 FEES.............................................................I-13
PERFORMANCE.................................................................I-14
FINANCIAL STATEMENTS........................................................I-16
Appendices
TRUSTEES AND OFFICERS........................................................A-1
INDUSTRY CLASSIFICATIONS.....................................................B-1
</TABLE>
<PAGE>
Section Two
<TABLE>
<S> <C>
ADDITIONAL RISKS AND INFORMATION CONCERNING
CERTAIN INVESTMENT TECHNIQUES......................................II-1
THE TRUST AND ITS SHARES....................................................II-3
MANAGEMENT OF THE FUND AND INVESTMENT ADVISORY SERVICES.....................II-5
PURCHASE AND REDEMPTION OF SHARES...........................................II-6
SHAREHOLDER ACCOUNTS.......................................................II-10
NET ASSET VALUE............................................................II-14
PORTFOLIO TRANSACTIONS.....................................................II-16
CERTAIN TAX MATTERS........................................................II-19
DISTRIBUTION OF SHARES OF THE FUND.........................................II-21
CALCULATION OF PERFORMANCE DATA............................................II-23
CUSTODIAN..................................................................II-25
INDEPENDENT ACCOUNTANTS....................................................II-26
FINANCIAL STATEMENTS.......................................................II-26
</TABLE>
<PAGE>
SECTION ONE
INVESTMENT OBJECTIVE
As set forth under "The Fund--Goal and Strategies--Fundamental Goal" in
the Prospectus of State Street Research Money Market Fund (the "Fund"), the
Fund's investment goal, which is to seek a high level of current income
consistent with the 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, is fundamental and may not be changed by the Fund
except by the affirmative vote of a majority of the outstanding voting
securities of the Fund, as defined in the Investment Company Act of 1940, as
amended (the "1940 Act"). (Under the 1940 Act, a "vote of the majority of the
outstanding voting securities" means the vote, at the annual or a special
meeting of security holders duly called, (i) of 67% or more of the voting
securities present at the meeting if the holders of more than 50% of the
outstanding voting securities are present or represented by proxy or (ii) of
more than 50% of the outstanding voting securities, whichever is less.)
ADDITIONAL INVESTMENT RESTRICTIONS AND POLICIES
Fundamental and Nonfundamental Restrictions
The Fund has adopted certain investment restrictions, and those
investment restrictions are either fundamental or not fundamental. Fundamental
restrictions may not be changed by the Fund except by the affirmative vote of a
majority of the outstanding voting securities of the Fund. Restrictions that are
not fundamental may be changed by a vote of a majority of the Trustees of the
Trust.
The Fund's fundamental investment restrictions are set forth below.
Under these restrictions, it is the Fund's policy:
(1) not to purchase 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 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;
(2) not to issue senior securities;
(3) not to underwrite or participate in the marketing of securities of
other issuers;
I-1
<PAGE>
(4) not to purchase or sell real estate in fee simple;
(5) not to invest in commodities or commodity contracts;
(6) 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;
(7) not to conduct arbitrage transactions;
(8) 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);
(9) 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; and
(10) 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 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
I-2
<PAGE>
proceeds of the transaction is greater than the interest expense
of the reverse repurchase transaction.
The following investment restrictions may be changed by a vote of a
majority of the Trustees. Under these restrictions, it is the Fund's policy:
(1) 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);
(2) 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;
(3) 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;
and
(4) not to purchase a security issued by another investment company,
except to the extent permitted under the 1940 Act or except by
purchase in the open market involving only customary brokers'
commissions, or securities acquired as dividends or distributions
or in connection with a merger, consolidation or similar
transaction or other exchange.
Restricted Securities.
The Fund's policy is to not make an investment in restricted
securities, including Rule 144A and other restricted securities, if as a result
more than 50% of its total assets are invested in such securities, provided not
more than 10% of its total assets are invested in non-Rule 144A restricted
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. 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. The Trustees
will periodically monitor the liquidity determinations. 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.
I-3
<PAGE>
Industry Classifications.
In determining how much of the portfolio is invested in a given
industry, the Fund follows the industry classifications set forth in Appendix B.
MONEY MARKET INSTRUMENTS
The following describes further the money market instruments in which
the Fund may invest, as well as certain debt ratings used by the Fund, and is
provided as a supplement to the discussion appearing in the Fund's Prospectus.
Money Market Instruments
Short-Term Corporate and Other Securities
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. State Street Research & Management Company, the Fund's investment
manager (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
I-4
<PAGE>
within the A-1 or A-2 categories by Standard & Poor's Corporation ("S&P") or
within the Prime-1 or Prime-2 categories by Moody's Investors Service, Inc.
("Moody's"), or, if not rated, issued by companies having an outstanding debt
issue rated at least within the AA category by S&P or within the Aa category 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 397 calendar days
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 397 calendar days 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 determined to present minimal credit risks. In general, the
term "Eligible Security" is limited to any security that:
(i) (a) either (1) has received a short-term rating from a nationally
recognized statistical rating organization ("NRSRO") or has been
issued by an issuer that has received a short-term rating from an
NRSRO with respect to a class of debt obligations(or any debt
obligation within that class) that is comparable in priority and
security with the security or (2) is subject to a guarantee that
has received a short-term rating from an NRSRO, or a guarantee
issued by a guarantor that has received a short-term rating from
an NRSRO with respect to a class of debt obligations (or any debt
obligation within that class) that is comparable in priority and
security with the guarantee, (b) has a remaining maturity of 397
calendar days or less and (c) has received a rating from the
requisite number of NRSROs (i.e., two, if two organizations have
issued ratings and one if only one has issued a rating) in one of
the two highest short-term major rating categories; or
(ii) is unrated but is of comparable quality to a rated security as
described in (i), above, and which at the time of issuance (a) had
a remaining maturity of more than 397 calendar days and now has a
remaining maturity of 397 calendar days or less, and (b) has not
received a long-term rating from an NRSRO in any NRSRO major
rating category outside of the NRSRO's three highest major rating
categories, unless the security has receive a long-term rating
from the requisite number of NRSROs (i.e., two, if two
organizations have issued ratings and one if only one has issued a
rating) in one of the three highest long-term major rating
categories.
I-5
<PAGE>
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 generally 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.
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
I-6
<PAGE>
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. Treasury Obligations
U.S. Government securities consist of various types of marketable
securities issued by the U.S. Treasury, that is, 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.
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 component 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.
U.S. Government Agency and Similar Securities
U.S. Government agency securities consist of fixed income securities
issued or guaranteed by agencies and instrumentalities of the U.S. Government,
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).
The Fund may also invest in the obligations of mixed-ownership
Government corporations. Certain obligations of Resolution Funding Corporation,
a mixed-ownership Government corporation, are backed with respect to interest
payments by the U.S. Treasury, and with respect to principal payments by U.S.
Treasury obligations held in a segregated account with a Federal Reserve Bank.
Except for certain mortgage-related securities, the Fund will only invest in
obligations issued by mixed-ownership Government corporations where such
securities are guaranteed as to payment of principal or interest by the U.S.
Government or a U.S. Government agency or instrumentality, and any unguaranteed
principal or interest is otherwise supported by U.S. Government obligations held
in a segregated account.
I-7
<PAGE>
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 within the "A" category (highest quality) by S&P
is issued by entities which have liquidity ratios which are adequate to meet
cash requirements. Long-term senior debt is rated A or better, although in some
cases credits within the "BBB" category may be allowed. The issuer has access to
at least two additional channels of borrowing. Basic earnings and cash flow have
an upward trend with allowance made for unusual circumstances. Typically, the
issuer's industry is well established and the issuer has a strong position
within the industry. The reliability and quality of management are unquestioned.
The relative strength or weakness of the above factors determines whether the
issuer's commercial paper is rated A-1, A-2 or A-3. (Those A-1 issues determined
to possess overwhelming safety characteristics are denoted with a plus (+) sign:
A-1+.)
The rating Prime is the highest commercial paper rating category
assigned by Moody's. Among the factors considered by Moody's in assigning
ratings are the following: evaluation of the management of the issuer; economic
evaluation of the issuer's industry or industries and an appraisal of
speculative-type risks which may be inherent in certain areas; evaluation of the
issuer's products in relation to competition and customer acceptance; liquidity;
amount and quality of long-term debt; trend of earnings over a period of 10
years; financial management of obligations which may be present or may arise as
a result of public interest questions and preparations to meet such obligations.
These factors are all considered in determining whether the commercial paper is
rated Prime-1, Prime-2 or Prime-3.
Description of the Highest Corporate Bond and Debenture Ratings of S&P
AAA: An obligation rated within the AAA category has the highest rating
assigned by S&P. Capacity to meet the financial commitment on the obligation is
extremely strong.
AA: An obligation rated within the AA category differs from AAA issues
only in small degree. Capacity to meet the financial commitment on the
obligation is very strong.
I-8
<PAGE>
Description of the Highest Corporate Bond and Debenture Ratings of Moody's
Aaa: Bonds which are rated within the Aaa category are judged to be of
the best quality. 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 within the Aa category 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 greater
than in Aaa securities.
For more information on certain investment practices that the Fund may follow,
see "Additional Risks and Information Concerning Certain Investment Techniques"
in Section Two.
THE FUND
The Fund was organized in 1985 as a separate series of State Street
Research Money Market Trust, a Massachusetts business trust. A "series" is a
separate pool of assets of the Trust which is separately managed and may have a
different investment objective and different investment policies from the
objective and policies of another series. The Trust currently is comprised of
one series: State Street Research Money Market Fund.
The Fund is an "open-end" management investment company, and is a
"diversified company" as those terms are defined in the 1940 Act. The Fund also
intends to qualify as a "money market fund" within the meaning of Rule 2a-7
under the 1940 Act, which includes complying with the portfolio quality,
maturity and diversification requirements of that rule. Pursuant to Rule 2a-7,
compliance with the diversification requirements under the rule constitutes
meeting the definitional requirements of a diversified company under the 1940
Act. Generally, a fund that intends to meet its diversification requirements
under Rule 2a-7 may not invest more than 5% of its total assets in any one
issuer, although this limit may be greater if the securities are held for short
periods, are guaranteed or are subject to certain redemption or resale rights,
and there is no limit on investments in U.S. Government securities.
For more information on the Trust and its shares, see "The Trust and
Its Shares" in Section Two.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
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
I-9
<PAGE>
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.
As of May 31, 1999, the Trustees and principal officers of the Trust
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(1), Class B, Class C, Class S
or Class T shares.
Also, as of May 31, 1999, 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:
<TABLE>
<CAPTION>
Shareholder %
----------- ---
<S> <C> <C>
Class B(1) Metropolitan Life 34.7
Y.C. Cheng and 14.9
S.M. Cheung JT TEN
State Street Bank, Cust IRA 7.1
T.A. Jolly
S. Abdelsayed and 6.4
E.N. Abdelsayed JT TEN
State Street Bank Cust IRA 5.5
D. Qian Wu
A.G. Edwards C/F 5.5
B.A. Clark
Class C Metropolitan Life 19.0
State Street Bank Cust IRA 8.7
R.L. Seyferth
State Street Bank Cust IRA 7.5
H.R. Silverstein
M.H. Wisdom 10.6
Class E Metropolitan Life 18.4
Class S Metropolitan Life 56.4
State Street Bank Ttee 13.8
Billy Graham Evangelistic Assoc.
1994 Pension Plan
Chase Manhattan Ttee 10.9
Pension Plan in MetLife
Savings Plan Program
MetLife Defined Contribution 7.9
Group
MetLife Securities Metropolitan Life 98.1
Money Fund Class T
</TABLE>
The full name and address of each of the above persons or entities are
as follows:
Y.C. Cheng and S.M. Cheung JT TEN
T.A. Jolly
S. Abdelsayed and E.N. Abdelsayed JT TEN
D. Qian Wu
B.A. Clark
R.L. Seyferth
H.R. Silverstein
M.H. Wisdom
c/o State Street Research Service Center
One Financial Center
Boston, MA 02111
Billy Graham Evangelistic Assoc.
1994 Pension Plan
P.O. Box 9427 Alt 3
Boston, MA 02209-9427
Metropolitan Life Insurance Company
600 Parsippany Rd
Parsippany, NJ 07054-3715
MetLife Savings Plan Program
4 New York Plaza
New York, NY 10004
MetLife Defined Contribution Group
600 Parsippany Rd
Parsippany, NJ 07054-3715
I-10
<PAGE>
TRUSTEE COMPENSATION
The Trustees were compensated as follows:
<TABLE>
<CAPTION>
Total
Compensation
Total From All State Street
Compensation Research Funds and
Aggregate From All State Street Metropolitan Series
Name of Compensation Research Funds Paid Fund, Inc. Paid
Trustee From Fund(a) to Trustees(b) to Trustees(c)
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Bruce R. Bond* $ 0 $ 0 $ 0
Steve A. Garban $4,400 $ 81,300 $110,300
Malcolm T. Hopkins $4,400 $ 69,700 $ 97,200
Dean O. Morton $4,500 $ 84,700 $110,700
Susan M. Phillips $2,235 $ 12,145 $ 12,145
Toby Rosenblatt $3,900 $ 72,600 $ 72,600
Michael S. Scott Morton $4,700 $ 89,500 $115,500
Ralph F. Verni $ 0 $ 0 $ 0
</TABLE>
* Elected Trustee as of April 19, 1999 and, therefore, did not earn any fees
for the fiscal year ended March 31, 1999.
(a) For the Fund's fiscal year ended March 31, 1999. The Fund does not provide
any pension or retirement benefits for the Trustees.
(b) Includes compensation on behalf of all series of 11 investment companies
for which the Investment Manager serves as a sole investment adviser.
"Total Compensation from All State Street Research Funds Paid to Trustees"
is for the 12 months ended December 31, 1998.
(c) Includes compensation on behalf of all series of 11 investment companies
for which the Investment Manager serves as sole investment adviser and all
series of Metropolitan Series Fund, Inc. The primary adviser to
Metropolitan Series Fund, Inc. is Metropolitan Life Insurance Company,
which has retained State Street Research & Management Company as
sub-adviser to certain series of Metropolitan Series Fund, Inc. The figure
in this column includes compensation relating to series of Metropolitan
Series Fund, Inc. which are not advised by State Street Research &
Management Company. The figure is for the 12 months ended December 31,
1998.
For more information on the Trustees of the Trust, see Appendix A.
I-11
<PAGE>
ADVISORY FEE
The advisory fee payable monthly by the Fund to the Investment Manager
is computed as a percentage of the average of the value of the net assets of the
Fund as determined at the close of regular trading on the New York Stock
Exchange (the "NYSE") on each day the NYSE is open for trading, at the annual
rate of 0.50% 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, 1997, 1998 and 1999 the Fund's
investment advisory fee prior to the assumption of fees or expenses was
$1,152,723, $1,219,931, and $1,589,742, respectively. For the same periods, the
voluntary reduction of fees or assumption of expenses amounted to $377,715,
$494,474 and $364,563, respectively.
For more information on investment advisory services provided to the
Fund, see "Investment Advisory Services" in Section Two.
BROKERAGE COMMISSIONS
It is not the Investment Manager's policy to intentionally pay a firm a
brokerage commission higher than that which another firm would charge for
handling the same transaction in recognition of services (other than execution
services) provided. However, the Investment Manager is aware that this is an
area where differences of opinion as to fact and circumstances may exist, and in
such circumstances, if any, the Investment Manager relies on the provisions of
Section 28(e) of the Securities Exchange Act of 1934. During the fiscal years
ended March 31, 1997, 1998 and 1999, 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.
For more information on the Fund's brokerage practices, see "Portfolio
Transactions--Brokerage Allocation" in Section Two.
I-12
<PAGE>
SALES CHARGES ON SHARES OF THE FUND
For the periods shown below, the Distributor received contingent
deferred sales charges upon redemption of Class B(1), Class B and Class C shares
of the Fund and paid initial commissions to securities dealers for sales of
shares as follows:
<TABLE>
<CAPTION>
Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended
March 31, 1999 March 31, 1998 March 31, 1997
----------------- ----------------- -----------------
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 B(1)* $ 110 $ 1,490 -- -- -- --
Class B $246,572 $19,921 $185,067 $15,662 $200,580 $13,752
Class C $ 806 $ 0 $ 6,967 $ 814 $ 22,159 $ 3,502
</TABLE>
*Class B(1) introduced on January 1, 1999.
RULE 12b-1 FEES
During the fiscal year ended March 31, 1999, 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:
I-13
<PAGE>
<TABLE>
<CAPTION>
Class B(1) Class B Class C
---------- ------- -------
<S> <C> <C> <C>
Advertising 375 15,696 16,458
Printing and mailing of prospectuses to 170 2,331 3,389
other than current shareholders
Compensation to Dealers *
Receipt of CDSC's net of commissions 51 (647,783) (174,479)
Allocable to other Funds that 0 835,763 148,601
originated exchanges into the fund
Compensation to sales personnel 445 11,324 12,789
Interest 0 0 0
Carrying or other financing charges 0 0 0
Other expenses: marketing; general 397 15,197 15,076
--- ------ ------
Total fees received $1,438 $232,528 $21,834
====== ======== =======
</TABLE>
- --------------------
* Includes distribution fees and contingent deferred sales charges which were
received in respect of shares of other State Street Research Funds that
were exchanged into the Fund and which will be allocated to the originating
other State Street Research Funds that incurred the initial commission paid
to the selling broker.
The Distributor may have also used additional resources of its own for further
expenses on behalf of the Fund.
The Fund's distribution plans are described in "Distribution of Shares
of the Fund" in Section Two.
PERFORMANCE
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 B(1), Class C, Class E, Class S or Class T shares to the
performance of other mutual funds with similar investment objectives, to
certificates of deposit and/or to other financial alternatives. The Fund may
also compare its performance to appropriate indices, such as the Consumer Price
Index and/or to appropriate rankings and averages such as those compiled by
Lipper Analytical
I-14
<PAGE>
Services, Inc. for the Money Market Instrument Fund category or those complied
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 average annual total return ("standard total return") of the Class
B, Class B(1) Class C, Class E, Class S and Class T shares of the Fund will be
calculated as set forth below. Total return is computed separately for each
class of shares of the Fund. Performance data for a specified class includes
periods prior to the adoption of class designations on June 1, 1993, when
designations were assigned based on the pricing and Rule 12b-1 fees applicable
to shares sold thereafter. The application of the additional Rule 12b-1 fees, if
any, of up to 1% will, for periods after June 1, 1993, adversely affect Fund
performance results. Thus, performance data or rankings for a given class of
shares should be interpreted carefully by investors who hold or may invest in a
different class of shares. Performance for Class B(1) reflects Class B
performance through December 31, 1998. Class B(1) was introduced January 1,
1998. Performance for Class T reflects Class E performance through July 31,
1998. Class T was introduced on August 1, 1998.
All calculations of performance data in this section reflect the
voluntary measures, if any, by the Fund's affiliates to reduce fees or expenses
relating to the Fund; see "Accrued Expenses and Recurring Charges" later in this
section.
For more information on how the Fund calculates performance, see
"Calculation of Performance Data" in Section Two.
Standard Total Return
The average annual total return ("standard total return") of each class
of the Fund's shares was as follows:
<TABLE>
<CAPTION>
Ten Years Five Years One Year
Ended Ended Ended
March 31, 1999 March 31, 1999 March 31, 1999
-------------- -------------- --------------
<S> <C> <C> <C>
Class B(1) 4.44% 3.47% -1.15%
Class B 4.44% 3.47% -1.15%
Class C 4.44% 3.82% 2.85%
Class E 5.04% 4.86% 4.88%
Class S 5.04% 4.86% 4.88%
Class T 5.04% 4.86% 4.88%
</TABLE>
Nonstandard Total Return
The nonstandard total return of each class of shares of the Fund for
the six months ended March 31, 1999, without taking sales charges into account,
was as follows:
I-15
<PAGE>
<TABLE>
<S> <C>
Class B(1) 1.80%
Class B 1.80%
Class C 1.80%
Class E 2.30%
Class S 2.30%
Class T 2.30%
</TABLE>
- ------------------
FINANCIAL STATEMENTS
Each of the Investment Portfolio, Statement of Assets and Liabilities,
Statement of Operations and Statement of Changes in Net Assets, Financial
Highlights included in the Fund's Annual Report to shareholders as of and for
the fiscal year ended March 31, 1999, including any notes thereto, and the
Report of Independent Accountants is hereby incorporated by reference from the
Fund's Annual Report, filed with the Securities and Exchange Commission (EDGAR
accession number 0000950156-99-000410). Shareholder reports are available
without charge upon request. For more information, call the State Street
Research Service Center at (800) 562-0032.
I-16
<PAGE>
Appendix A
TRUSTEES AND OFFICERS
<TABLE>
<CAPTION>
Capital Equity Exchange Financial Growth Income
TRUSTEES AND Trust Trust Trust Trust Trust Trust
PRINCIPAL
OFFICERS
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Peter C. Bennett Vice Vice Vice Vice Vice Vice
President President President President President President
- ------------------------------------------------------------------------------------------------------
Bruce R. Bond Trustee Trustee Trustee Trustee Trustee Trustee
- ------------------------------------------------------------------------------------------------------
Jesus A. Cabrera Vice
President
- ------------------------------------------------------------------------------------------------------
Paul J. Clifford, Jr.
- ------------------------------------------------------------------------------------------------------
Thomas J. Dillman
- ------------------------------------------------------------------------------------------------------
Steve A. Garban Trustee Trustee Trustee Trustee Trustee Trustee
- ------------------------------------------------------------------------------------------------------
Bartlett R. Geer Vice Vice
President President
- ------------------------------------------------------------------------------------------------------
Lawrence J. Haverty, Jr. Vice
President
- ------------------------------------------------------------------------------------------------------
Malcolm T. Hopkins Trustee Trustee Trustee Trustee Trustee Trustee
- ------------------------------------------------------------------------------------------------------
F. Gardner Jackson, Jr. Vice
President
- ------------------------------------------------------------------------------------------------------
Richard J. Jodka Vice
President
- ------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
Master Money
Investment Market Portfolios, Securities Tax-Exempt
TRUSTEES AND Trust Trust Inc. Trust Trust
PRINCIPAL
OFFICERS
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Peter C. Bennett Vice President Vice President Vice President
- --------------------------------------------------------------------------------------------------------------------------
Bruce R. Bond Trustee Trustee Trustee Trustee
- --------------------------------------------------------------------------------------------------------------------------
Jesus A. Cabrera
- --------------------------------------------------------------------------------------------------------------------------
Paul J. Clifford, Jr. Vice President
- --------------------------------------------------------------------------------------------------------------------------
Thomas J. Dillman Vice President
- --------------------------------------------------------------------------------------------------------------------------
Steve A. Garban Trustee Trustee Director Trustee Trustee
- --------------------------------------------------------------------------------------------------------------------------
Bartlett R. Geer Vice President
- --------------------------------------------------------------------------------------------------------------------------
Lawrence J. Haverty, Jr.
- --------------------------------------------------------------------------------------------------------------------------
Malcolm T. Hopkins Trustee Trustee Director Trustee Trustee
- --------------------------------------------------------------------------------------------------------------------------
F. Gardner Jackson, Jr.
- --------------------------------------------------------------------------------------------------------------------------
Richard J. Jodka
- --------------------------------------------------------------------------------------------------------------------------
A-1
<PAGE>
<CAPTION>
Capital Equity Exchange Financial Growth Income
TRUSTEES AND Trust Trust Trust Trust Trust Trust
PRINCIPAL
OFFICERS
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
John H. Kallis Vice Vice
President President
- ------------------------------------------------------------------------------------------------------
Dyann H. Kiessling
- ------------------------------------------------------------------------------------------------------
Rudoph K. Kluiber Vice
President
- ------------------------------------------------------------------------------------------------------
Francis J. McNamara, III Secretary Secretary Secretary Secretary Secretary Secretary
- ------------------------------------------------------------------------------------------------------
Gerard P. Maus Treasurer Treasurer Treasurer Treasurer Treasurer Treasurer
- ------------------------------------------------------------------------------------------------------
Thomas P. Moore, Jr. Vice Vice
President President
- ------------------------------------------------------------------------------------------------------
Dean O. Morton Trustee Trustee Trustee Trustee Trustee Trustee
- ------------------------------------------------------------------------------------------------------
Christopher P. Nicholas
- ------------------------------------------------------------------------------------------------------
Brian P. O'Dell Vice
President
- ------------------------------------------------------------------------------------------------------
Kim M. Peters
- ------------------------------------------------------------------------------------------------------
Susan M. Phillips Trustee Trustee Trustee Trustee Trustee
- ------------------------------------------------------------------------------------------------------
E.K. Easton Ragsdale, Jr. Vice
President
- ------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
Master Money
Investment Market Portfolios, Securities Tax-Exempt
TRUSTEES AND Trust Trust Inc. Trust Trust
PRINCIPAL
OFFICERS
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
John H. Kallis Vice President Vice President Vice President
- --------------------------------------------------------------------------------------------------------------------------
Dyann H. Kiessling Vice President
- --------------------------------------------------------------------------------------------------------------------------
Rudoph K. Kluiber
- --------------------------------------------------------------------------------------------------------------------------
Francis J. McNamara, III Secretary Secretary Secretary Secretary Secretary
- --------------------------------------------------------------------------------------------------------------------------
Gerard P. Maus Treasurer Treasurer Treasurer Treasurer Treasurer
- --------------------------------------------------------------------------------------------------------------------------
Thomas P. Moore, Jr. Vice President
- --------------------------------------------------------------------------------------------------------------------------
Dean O. Morton Trustee Trustee Director Trustee Trustee
- --------------------------------------------------------------------------------------------------------------------------
Christopher P. Nicholas Assistant
Secretary
- --------------------------------------------------------------------------------------------------------------------------
Brian P. O'Dell
- --------------------------------------------------------------------------------------------------------------------------
Kim M. Peters Vice President
- --------------------------------------------------------------------------------------------------------------------------
Susan M. Phillips Trustee Trustee Trustee Trustee
- --------------------------------------------------------------------------------------------------------------------------
E.K. Easton Ragsdale, Jr.
- --------------------------------------------------------------------------------------------------------------------------
A-2
<PAGE>
<CAPTION>
Capital Equity Exchange Financial Growth Income
TRUSTEES AND Trust Trust Trust Trust Trust Trust
PRINCIPAL
OFFICERS
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Daniel J. Rice III Vice
President
- ------------------------------------------------------------------------------------------------------
Toby Rosenblatt Trustee Trustee Trustee Trustee Trustee Trustee
- ------------------------------------------------------------------------------------------------------
Michael S. Scott Morton Trustee Trustee Trustee Trustee Trustee Trustee
- ------------------------------------------------------------------------------------------------------
Thomas A. Shively Vice Vice
President President
- ------------------------------------------------------------------------------------------------------
Ralph F. Verni Trustee, Trustee, Trustee, Trustee, Trustee, Trustee,
Chairman Chairman Chairman Chairman of Chairman of Chairman of
of the of the of the the Board, the Board, the Board,
Board, Board, Board, President President President
President President President and Chief and Chief and Chief
and Chief and Chief and Chief Executive Executive Executive
Executive Executive Executive Officer Officer Officer
Officer Officer Officer
- ------------------------------------------------------------------------------------------------------
Dudley F. Wade Vice
President
- ------------------------------------------------------------------------------------------------------
James M. Weiss Vice Vice Vice Vice Vice Vice
President President President President President President
- ------------------------------------------------------------------------------------------------------
Elizabeth M. Westvold
- ------------------------------------------------------------------------------------------------------
John T. Wilson Vice
President
- ------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
Master Money
Investment Market Portfolios, Securities Tax-Exempt
TRUSTEES AND Trust Trust Inc. Trust Trust
PRINCIPAL
OFFICERS
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Daniel J. Rice III
- --------------------------------------------------------------------------------------------------------------------------
Toby Rosenblatt Trustee Trustee Director Trustee Trustee
- --------------------------------------------------------------------------------------------------------------------------
Michael S. Scott Morton Trustee Trustee Director Trustee Trustee
- --------------------------------------------------------------------------------------------------------------------------
Thomas A. Shively Vice President Vice President Vice President
- --------------------------------------------------------------------------------------------------------------------------
Ralph F. Verni Trustee, Trustee, Director, Trustee, Trustee,
Chairman of the Chairman of the Chairman of the Chairman of the Chairman of the
Board, President Board, President Board, President Board, President Board, President
and Chief and Chief and Chief and Chief and Chief
Executive Officer Executive Officer Executive Officer Executive Officer Executive Officer
- --------------------------------------------------------------------------------------------------------------------------
Dudley F. Wade Vice President
- --------------------------------------------------------------------------------------------------------------------------
James M. Weiss Vice President Vice President Vice President
- --------------------------------------------------------------------------------------------------------------------------
Elizabeth M. Westvold Vice President
- --------------------------------------------------------------------------------------------------------------------------
John T. Wilson Vice President
- --------------------------------------------------------------------------------------------------------------------------
A-3
<PAGE>
<CAPTION>
Capital Equity Exchange Financial Growth Income
TRUSTEES AND Trust Trust Trust Trust Trust Trust
PRINCIPAL
OFFICERS
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Kennard P. Woodworth, Jr. Vice Vice
President President
- ------------------------------------------------------------------------------------------------------
Peter A. Zuger Vice
President
- ------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
Master Money
Investment Market Portfolios, Securities Tax-Exempt
TRUSTEES AND Trust Trust Inc. Trust Trust
PRINCIPAL
OFFICERS
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Kennard P. Woodworth, Jr. Vice President
- --------------------------------------------------------------------------------------------------------------------------
Peter A. Zuger
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
A-4
<PAGE>
Additional information on the Trustees, Directors and principal
officers of the State Street Research Funds is provided below. (Unless otherwise
indicated, the address for each person is One Financial Center, Boston,
Massachusetts 02111.) All ages are as of December 31, 1998.
*+Peter C. Bennett: He is 60 and his principal occupation is currently,
and during the past five years has been, Executive Vice President of the
Investment Manager. Mr. Bennett is also a Director and Chief Investment
Officer-Equity of the Investment Manager. Mr. Bennett's other principal business
affiliations include Director, State Street Research Investment Services, Inc.
+Bruce R. Bond (100 Minuteman Road, Andover, MA 01810): He is 52 and
his principal occupation is Chairman of the Board, Chief Executive Officer and
President of PictureTel Corporation. During the past five years, Mr. Bond has
also served as Chief Executive Officer of ANS Communications (a communications
networking company) and as managing director of British Telecommunications PLC.
*Jesus A. Cabrera: He is 37 and his principal occupation is Senior Vice
President of the Investment Manager. During the past five years he has also
served as Vice President of the Investment Manager and as Vice President at
First Chicago Investment Management Company.
*Paul J. Clifford, Jr.: He is 36 and his principal occupation is
currently, and during the past five years has been, Vice President of the
Investment Manager.
*Thomas J. Dillman: He is 49 and his principal occupation is Senior
Vice President of the Investment Manager. During the past five years he has also
served as research director at Bank of New York.
+Steve A. Garban (The Pennsylvania State University, 210 Old Main,
University Park, PA 16802): He is 61 and he is retired and was formerly Senior
Vice President for Finance and Operations and Treasurer of The Pennsylvania
State University. Mr. Garban is also a Director of Metropolitan Series Fund,
Inc. (an investment company).
*+Bartlett R. Geer: He is 43 and his principal occupation is currently,
and during the past five years has been, Senior Vice President of the Investment
Manager.
*Lawrence J. Haverty, Jr.: He is 54 and his principal occupation is
currently, and during the past five years has been, Senior Vice President of the
Investment Manager.
A-5
<PAGE>
+Malcolm T. Hopkins (14 Brookside Road, Biltmore Forest, Asheville, NC
28803): He is 71 and he is engaged principally in private investments.
Previously, he was Vice Chairman of the Board and Chief Financial Officer of St.
Regis Corp. Mr. Hopkins is also a Director of Metropolitan Series Fund, Inc. (an
investment company).
*Richard J. Jodka: He is 55 and his principal occupation is Senior Vice
President of the Investment Manager. During the past five years he has also
served as a portfolio manager at Frontier Capital Management and Putnam
Investments.
*+John H. Kallis: He is 58 and his principal occupation is currently,
and during the past five years has been, Senior Vice President of the Investment
Manager.
*Dyann H. Kiessling: She is 35 and her principal occupation is Vice
President of the Investment Manager. During the past five years she has also
served as a fixed income trader for the Investment Manager.
*Rudolph K. Kluiber: He is 39 and his principal occupation currently is
Senior Vice President of the Investment Manager. During the past five years he
has also served as a Vice President of the Investment Manager.
*+Gerard P. Maus: He is 47 and his principal occupation is Executive
Vice President, Treasurer, Chief Financial Officer, Chief Administrative
Officer, and Director of the Investment Manager. Mr. Maus's other principal
business affiliations include Executive Vice President, Chief Financial Officer,
Chief Administrative Officer, Treasurer and Director of State Street Research
Investment Services, Inc.; Treasurer and Chief Financial Officer of SSRM
Holdings, Inc.; and Director of SSR Realty Advisors, Inc.
*+Francis J. McNamara, III: He is 43 and 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 Executive Vice President, General Counsel and Clerk of State Street
Research Investment Services, Inc.; and Secretary and General Counsel of SSRM
Holdings, Inc.
+Dean O. Morton (3200 Hillview Avenue, Palo Alto, CA 94304): He is 67
and he is retired and was formerly Executive Vice President, Chief Operating
Officer and Director of Hewlett-Packard Company. Mr. Morton is also a Director
of Metropolitan Series Fund, Inc. (an investment company).
A-6
<PAGE>
*Kim M. Peters: He is 46 and his principal occupation is Senior Vice
President of the Investment Manager. During the past five years he has also
served as Vice President of the Investment Manager.
+Susan M. Phillips (The George Washington University, 710 21st Street,
Suite 206, Washington, DC 20052): She is 56 and her principal occupation is
currently Dean of the School of Business and Public Management at George
Washington University and Professor of Finance. Previously, she was a member of
the Board of Governors of the Federal Reserve System and Chairman and
Commissioner of the Commodity Futures Trading Commission.
*E.K. Easton Ragsdale, Jr.: He is 47 and his principal occupation is
Senior Vice President of the Investment Manager. During the past five years he
has also served as Vice President of the Investment Manager and as Senior Vice
President and Chief Quantitative Analyst for Kidder Peabody & Co.
*Daniel J. Rice III: He is 46 and his principal occupation is currently
Senior Vice President of the Investment Manager. During the past five years he
has also served as Vice President of the Investment Manager.
+Toby Rosenblatt (3409 Pacific Avenue, San Francisco, CA 94118, serves
as Trustee of the Trust): He is 60 and his principal occupations during the past
five years have been President of Founders Investments Ltd. and President of The
Glen Ellen Company, a private investment company.
+Michael S. Scott Morton (Massachusetts Institute of Technology, 77
Massachusetts Avenue, Cambridge, MA 02139): He is 61 and 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.
Dr. Scott Morton is also a Director of Metropolitan Series Fund, Inc. (an
investment company).
*+Thomas A. Shively: He is 44 and his principal occupation is
currently, and during the past five years has been, Executive Vice President of
the Investment Manager. Mr. Shively is also a Director and Chief Investment
Officer-Fixed Income of the Investment Manager. Mr. Shively's other principal
business affiliations include Director of State Street Research Investment
Services, Inc.
*+Ralph F. Verni: He is 56 and his principal occupation is currently,
and during the past five years has been, Chairman of the Board, President, Chief
Executive Officer and Director of State Street Research & Management Company.
Mr. Verni's other principal business affiliations include Chairman of the Board
and Director of State Street Research Investment Services, Inc. (and until
February 1996, prior positions as President and Chief Executive Officer of that
company).
*Dudley F. Wade: He is 80 and his principal occupation is currently,
and during the past five years has been, Senior Vice President of the Investment
Manager.
A-7
<PAGE>
*+James M. Weiss: He is 52 and his principal occupation is Executive
Vice President of the Investment Manager. During the past five years he has also
served as Senior Vice President of the Investment Manager and as President and
Chief Investment Officer of IDS Equity Advisors.
*Elizabeth M. Westvold: She is 38 and her principal occupation is
Senior Vice President of the Investment Manager. During the past five years she
has also served as Vice President and as an analyst for the Investment Manager.
*+John T. Wilson: He is 35 and his principal occupation is Senior Vice
President of the Investment Manager. During the past five years he has also
served as a Vice President of the Investment Manager, as an analyst and
portfolio manager at Phoenix Home Life Mutual Insurance Company and as a Vice
President of Phoenix Investment Counsel Inc.
*+Kennard P. Woodworth, Jr.: He is 60 and his principal occupation is
currently, and during the past five years has been, Senior Vice President of the
Investment Manager.
- -----------------
* These Trustees and/or officer are deemed to be "interested persons" of the
Trust under the 1940 Act because of their affiliations with the Fund's
investment adviser.
+ Serves as a Trustee/Director and/or officer of one or more of the following
investment companies, each of which has an advisory relationship with the
Investment Manager or its parent, Metropolitan Life Insurance Company
("Metropolitan"): State Street Research Equity Trust, State Street Research
Financial Trust, State Street Research Income Trust, State Street Research
Money Market Trust, State Street Research Tax-Exempt Trust, State Street
Research Capital Trust, State Street Research Exchange Trust, State Street
Research Growth Trust, State Street Research Master Investment Trust, State
Street Research Securities Trust, State Street Research Portfolios, Inc.
and Metropolitan Series Fund, Inc.
A-8
<PAGE>
APPENDIX B
INDUSTRY CLASSIFICATIONS
In determining how much of the 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 may be classified according to the industries of their parent or
sponsor companies, or industries that otherwise most affect such financing
companies. The Fund will invest more than 25% of its total assets in the
financial services industries. Issuers of asset-backed pools will be classified
as separate industries based on the nature of the underlying assets, such as
mortgages and credit card receivables. "Asset-backed--Mortgages" includes
private pools of nongovernment-backed mortgages. The industry concentration
limitations do not apply to bank money instruments, e.g. interest bearing
negotiable certificates, issued by the foreign branch of a domestic bank, if the
domestic parent would be unconditionally liable in the event that the foreign
branch failed to pay on its instruments for any reason.
Autos & Transportation
- ----------------------
Air Transport
Auto Parts
Automobiles
Miscellaneous Transportation
Railroad Equipment
Railroads
Recreational Vehicles &
Boats
Tires & Rubber
Truckers
Consumer Discretionary
- ----------------------
Advertising Agencies
Casino/Gambling, Hotel/Motel
Commercial Services
Communications, Media &
Entertainment
Consumer Electronics
Consumer Products
Consumer Services
Household Furnishings
Leisure Time
Photography
Printing & Publishing
Restaurants
Retail
Shoes
Textile Apparel Manufacturers
Toys
Consumer Staples
- ----------------
Beverages
Drug & Grocery Store Chains
Foods
Household Products
Tobacco
Financial Services
- ------------------
Banks & Savings and Loans
Financial Data Processing
Services & Systems
Insurance
Miscellaneous Financial
Real Estate Investment Trusts
Rental & Leasing Services:
Commercial
Securities Brokerage & Services
Health Care
- -----------
Drugs & Biotechnology
Health Care Facilities
Health Care Services
Hospital Supply
Service Miscellaneous
Integrated Oils
- ---------------
Oil: Integrated Domestic
Oil: Integrated International
Materials & Processing
- ----------------------
Agriculture
Building & Construction
Chemicals
Containers & Packaging
Diversified Manufacturing
Engineering & Contracting Services
Fertilizers
Forest Products
Gold & Precious Metals
Miscellaneous Materials &
Processing
Non-Ferrous Metals
Office Supplies
Paper and Forest Products
Real Estate & Construction
B-1
<PAGE>
Steel
Textile Products
Other
- -----
Trust Certificates --
Government Related
Lending
Asset-backed-Mortgages
Asset-backed-Credit Card
Receivables
Miscellaneous
Multi-Sector Companies
Other Energy
- ------------
Gas Pipelines
Miscellaneous Energy
Offshore Drilling
Oil and Gas Producers
Oil Well Equipment & Services
Producer Durables
- -----------------
Aerospace
Electrical Equipment &
Components
Electronics: Industrial
Homebuilding
Industrial Products
Machine Tools
Machinery
Miscellaneous Equipment
Miscellaneous Producer
Durables
Office Furniture & Business
Equipment
Pollution Control and
Environmental Services
Production Technology
Equipment
Telecommunications Equipment
Technology
- ----------
Communications Technology
Computer Software
Computer Technology
Electronics
Electronics: Semi-
Conductors/Components
Miscellaneous Technology
Utilities
- ---------
Miscellaneous Utilities
Utilities: Cable TV & Radio
Utilities: Electrical
Utilities: Gas distribution
Utilities:Telecommunications
Utilities: Water
B-2
<PAGE>
SECTION TWO
ADDITIONAL RISKS AND INFORMATION CONCERNING
CERTAIN INVESTMENT TECHNIQUES
The following describes further certain investment practices that the
Fund may follow and is provided as a supplement to the discussion appearing in
the Fund's Prospectus and in Section One of this SAI.
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 "Money Market
Instruments," in Section One. The Fund expects that investment, 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 a U.S. 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 in the Prospectus, subject to the issuer diversification and other
restrictions described in the Prospectus and Statement of Additional
Information. 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 that 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 U.S. issuers, and there may be less public information
available about foreign banks and their branches and agencies.
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
II-1
<PAGE>
million, simultaneously commits to repurchase it at an agreed-upon price on an
agreed-upon date within a specified number of days (usually not more than seven)
from the date of purchase. The repurchase price reflects the purchase price plus
an agreed-upon market rate of interest which is unrelated to the coupon rate or
maturity of the acquired security. The Fund will only enter into repurchase
agreements involving U.S. Government securities. Repurchase agreements could
involve certain risks in the event of default or insolvency of the other party,
including possible delays or restrictions upon the Fund's ability to dispose of
the underlying securities. Repurchase agreements will be limited to 30% of the
Fund's net assets, except that repurchase agreements extending for more than
seven days when combined with any other illiquid securities held by the Fund
will be limited to 10% of the Fund's net assets.
Securities Lending
The Fund may lend portfolio securities with a value of up to 33 1/3% of
its total assets. The Fund will receive cash or cash equivalents (e.g., U.S.
Government obligations) as collateral in an amount equal to at least 100% of the
current market value of any loaned securities plus accrued interest. Collateral
received by the Fund will generally be held in the form tendered, although cash
may be invested in unaffiliated mutual funds with quality short-term portfolios,
securities issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, repurchase agreements or other similar investments. The
investing of cash collateral received from loaning portfolio securities involves
leverage which magnifies the potential for gain or loss on monies invested and,
therefore, results in an increase in the volatility of the Fund's outstanding
securities. Such loans may be terminated at any time.
The Fund may receive a lending fee and will retain rights to dividends,
interest or other distributions, on the loaned securities. Voting rights pass
with the lending, although the Fund may call loans to vote proxies if desired.
Should the borrower of the securities fail financially, there is a risk of delay
in recovery of the securities or loss of rights in the collateral. Loans are
made only to borrowers which are deemed by the Investment Manager or its agents
to be of good financial standing.
When-Issued Securities
The Fund may purchase "when-issued" securities, which are traded on a
price or yield basis prior to actual issuance. Such purchases will be made only
to achieve the Fund's investment objective and not for leverage. The when-issued
trading period generally lasts from a few days to months, or over a year or
more; during this period dividends or interest on the securities are not
payable. A frequent form of when-issued trading occurs when corporate securities
to be created by a merger of companies are traded prior to the actual
consummation of the merger. Such transactions may involve a risk of loss if the
value of the securities falls below the price committed to prior to actual
issuance. The Trust's custodian will establish a segregated account when the
Fund purchases securities on a when-issued basis consisting of
II-2
<PAGE>
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.
Computer-Related Risks
Many mutual funds and other companies that issue securities, as well as
government entities upon whom those mutual funds and companies depend, may be
adversely affected by computer systems (whether their own systems or systems of
their service providers) that do not properly process dates beginning with
January 1, 2000 and information related to those dates. The Investment Manager
currently is in the process of reviewing its internal computer systems as they
relate to the Fund, as well as the computer systems of those service providers
upon which the Fund relies, in order to obtain reasonable assurances that the
Fund will not experience a material adverse impact related to the problem. The
Fund does not currently anticipate that the problem will have a material adverse
impact on its portfolio investments, taken as a whole. There can be no
assurances in that area, however, including the possibility that the problem
could negatively affect the investment markets or the economy generally.
Other Investment Companies
The Fund may invest in securities of other investment companies,
including affiliated investment companies, such as open- or closed-end
management investment companies, hub and spoke (master/feeder) funds, pooled
accounts or other similar, collective investment vehicles. As a shareholder of
an investment company, the Fund may indirectly bear service and other fees in
addition to the fees the Fund pays its service providers. Similarly, other
investment companies may invest in the Fund. Other investment companies that
invest in the Fund may hold significant portions of the Fund and materially
affect the sale and redemption of Fund shares and the Fund's portfolio
transactions.
THE TRUST AND ITS SHARES
The Trustees of the Trust have authority to issue an unlimited number
of shares of beneficial interest of each separate series, $.001 par value per
share. The Trustees also have authority, without the necessity of a shareholder
vote, to create any number of new series or classes or to commence the public
offering of shares of any previously established series or classes. The Trustees
have authorized shares of the Fund to be issued in six classes: Class B(1)
(introduced January 1, 1999), Class B, Class C, Class E, Class S and Class T.
II-3
<PAGE>
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(1), Class B and Class C
shares bear the expenses of the deferred sales arrangement and any expenses
(including the higher service and distribution fees) resulting from such sales
arrangement, and certain other incremental expenses related to a class. Each
class will have exclusive voting rights with respect to provisions of the Rule
12b-1 distribution plan pursuant to which the service and distribution fees, if
any, are paid. Although the legal rights of holders of each class of shares are
identical, it is likely that the different expenses borne by each class will
result in different net asset values and dividends. The different classes of
shares of the Fund also have different exchange privileges. Except for those
differences between classes of shares described above, in the Fund's Prospectus
and otherwise in this Statement of Additional Information, each share of the
Fund has equal dividend, redemption and liquidation rights with other shares of
the Fund, and when issued, is fully paid and nonassessable by the Fund.
Shareholder rights granted under the Master Trust Agreement may be
modified by the Trustees provided, however, that the Master Trust Agreement may
not be amended if such amendment (a) repeals the limitations on personal
liability of any shareholder, or repeals the prohibition of assessment upon
shareholders, without the express consent of each shareholder involved or (b)
adversely modifies any shareholder right without the consent of the holders of a
majority of the outstanding shares entitled to vote. On any matter submitted to
the shareholders, the holder of a Fund share is entitled to one vote per share
(with proportionate voting for fractional shares) regardless of the relative net
asset value thereof. Except as provided by law, the Trustees may otherwise
modify the rights of shareholders at any time.
Under the Master Trust Agreement, no annual or regular meeting of
shareholders is required. Thus, there ordinarily will be no shareholder meetings
unless required by the 1940 Act. Except as otherwise provided under the 1940
Act, the Board of Trustees will be a self-perpetuating body until fewer than
two-thirds of the Trustees serving as such are Trustees who were elected by
shareholders of the Trust. In the event less than a majority of the Trustees
serving as such were elected by shareholders of the Trust, a meeting of
shareholders will be called to elect Trustees. Under the Master Trust Agreement,
any Trustee may be removed by vote of two-thirds of the outstanding Trust
shares; holders of 10% or more of the outstanding shares of the Trust can
require that the Trustees call a meeting of shareholders for purposes of voting
on the removal of one or more Trustees. In connection with such meetings called
by shareholders, shareholders will be assisted in shareholder communications to
the extent required by applicable law.
Under Massachusetts law, the shareholders of the Trust could, under
certain circumstances, be held personally liable for the obligations for the
Trust. However, the Master Trust Agreement of the Trust disclaims shareholder
liability for acts or obligations of the Trust and provides for indemnification
for all losses and expenses of any shareholder of the Fund held personally
liable for the obligations of the Trust. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which the Fund would be unable to meet its obligations. The
Investment Manager believes that, in view of the above, the risk of personal
liability to shareholders is remote.
II-4
<PAGE>
MANAGEMENT OF THE FUND AND INVESTMENT ADVISORY SERVICES
Under the provisions of the Trust's Master Trust Agreement and the laws
of Massachusetts, responsibility for the management and supervision of the Fund
rests with the Trustees.
State Street Research & Management Company, the Investment Manager, a
Delaware corporation, with offices at One Financial Center, Boston,
Massachusetts 02111-2690, acts as investment adviser to the Fund. The Investment
Manager was founded by Paul Cabot, Richard Saltonstall and Richard Paine to
serve as investment adviser to one of the nation's first mutual funds, presently
known as State Street Research Investment Trust, which they had formed in 1924.
Their investment management philosophy emphasized comprehensive fundamental
research and analysis, including meetings with the management of companies under
consideration for investment. The Investment Manager's portfolio management
group has extensive investment industry experience managing equity and debt
securities.
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 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 Agreement provides that it shall continue in effect with
respect to the Fund for a period of two years after its initial effectiveness
and will continue from year to year thereafter 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.
II-5
<PAGE>
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, employee benefit plans, and
similar programs or plans through or under which the Fund's shares may be
purchased.
Under the Code of Ethics of the Investment Manager, personnel are only
permitted to engage in personal securities transactions in accordance with
certain conditions relating to such person's position, the identity of the
security, the timing of the transaction, and similar factors. Such personnel
must report their personal securities transactions quarterly and supply broker
confirmations of such transactions to the Investment Manager.
PURCHASE AND REDEMPTION OF SHARES
Shares of the Fund are distributed by State Street Research Investment
Services, Inc., the Distributor. The Fund offers 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 E, Class S and Class T shares, a sales
charge, which is imposed on a deferred basis (the Class B(1), Class B and Class
C shares). General information on how to buy shares of the Fund, as well as
sales charges involved, are set forth under "Your Investment" in the Prospectus.
The following supplements that information.
Purchase Orders. When a purchase order is placed through a dealer, that
dealer is responsible for transmitting the order promptly to the State Street
Research Service Center (the "Service Center") in order to permit the investor
to obtain the current price. Any loss suffered by an investor which results from
a dealer's failure to transmit an order promptly is a matter for settlement
between the investor and the dealer.
Class B(1), Class B and Class C Shares. Class B(1), Class B and Class C
shares are offered solely in connection with exchanges from "Eligible Funds"
(which include the Fund and other funds as designated by the Distributor from
time to time).
Conversion of Class B(1) and Class B Shares to Class E Shares. A
shareholder's Class B(1) and Class B shares of the Fund, 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 shares; consequently, they will no longer be
subject to the higher expenses borne by Class B(1) and Class B shares. The
II-6
<PAGE>
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 shares so converted. As
noted above, holding periods for Class B(1) shares received in exchange for
Class B(1) shares of other Eligible Funds and for Class B shares received in
exchange for Class B shares of other Eligible Funds, will be counted toward the
eight-year period.
Contingent Deferred Sales Charges. The amount of any contingent
deferred sales charge paid on Class B(1), Class B or Class C shares of the Fund
will be paid to the Distributor. The Distributor will pay dealers at the time of
sale a 4% commission for selling Class B(1) and Class B shares and a 1%
commission for selling Class C shares. In certain cases, a dealer may elect to
waive the 4% commission on Class B(1) shares and receive in lieu thereof an
annual fee, usually 1% with respect to such outstanding shares. The proceeds of
the contingent deferred sales charges and the distribution fees are used to
offset distribution expenses and thereby permit the sale of Class B(1), Class B
and Class C shares without an initial sales charge.
In determining the applicability and rate of any contingent deferred
sales charge of Class B(1), Class B or Class C shares, it will be assumed that a
redemption of the shares is made first of those shares having the greatest
capital appreciation, next of shares representing reinvestment of dividends and
capital gains distributions and finally of remaining shares held by the
shareholder for the longest period of time. Class B(1) shares that are redeemed
within a six-year period after their purchase, Class B shares that are redeemed
within a five-year period after their purchase, and Class C shares that are
redeemed within a one-year period after their purchase, will not be subject to a
contingent deferred sales charge to the extent that the value of such shares
represents (1) capital appreciation of Fund assets or (2) reinvestment of
dividends or capital gains distributions. The holding period for purposes of
applying a contingent deferred sales charge for a particular class of shares of
the Fund acquired through an exchange from another Eligible Fund will be
measured from the date that such shares were initially acquired in the other
Eligible Fund, and shares of the same class being redeemed will be considered to
represent, as applicable, capital appreciation or dividend and capital gains
distribution reinvestments in such other Eligible Fund. These determinations
will result in any contingent deferred sales charge being imposed at the lowest
possible rate. For federal income tax purposes, the amount of the contingent
deferred sales charge will reduce the gain or increase the loss, as the case may
be, on the amount realized on redemption.
Contingent Deferred Sales Charge Waivers. With respect to Class B(1),
Class B and Class C shares of the Fund, the contingent deferred sales charge
does not apply to exchanges or to redemptions under a systematic withdrawal plan
which meets certain conditions. The contingent deferred sales charge will be
waived for participant initiated distributions from State Street Research
prototype employee retirement plans. In addition, the contingent deferred sales
charge will be waived for: (i) redemptions made within one year of the death or
total
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<PAGE>
disability, as defined by the Social Security Administration, of all
shareholders of an account; (ii) redemptions made after attainment of a specific
age in an amount which represents the minimum distribution required at such age
under Section 401(a)(9) of the Internal Revenue Code of 1986, as amended, for
retirement accounts or plans (e.g., age 70-1/2 for Individual Retirement
Accounts and Section 403(b) plans), calculated solely on the basis of assets
invested in the Fund or other Eligible Funds; and (iii) a redemption resulting
from a tax-free return of an excess contribution to an Individual Retirement
Account. (The foregoing waivers do not apply to a tax-free rollover or transfer
of assets out of the Fund). The Fund may modify or terminate the waivers at any
time; for example, the Fund may limit the application of multiple waivers and
establish other conditions for employee benefit plans. Certain employee benefit
plans sponsored by a financial professional may be subject to other conditions
for waivers under which the plans may initially invest in Class B(1) or Class B
shares and then Class A shares of certain funds upon meeting specific criteria.
Class E Shares. Class E shares may be issued directly or through
exchanges to certain shareholders of the Fund or other Eligible Funds who
previously held shares that are not subject to any future sales charge or
service fees or distribution fees.
Class S Shares. Class S shares are currently available to certain
employee benefit plans such as qualified retirement plans which meet criteria
relating to number of participants, service arrangements, or similar factors;
insurance companies; investment companies; advisory accounts of the Investment
Manager; endowment funds of nonprofit organizations with substantial minimum
assets (currently a minimum of $10 million); and other similar institutional
investors. Class S shares may be acquired through programs or products sponsored
by Metropolitan, its affiliates, or both for which Class S shares have been
designated. In addition, Class S shares are available through programs under
which, for example, investors pay an asset-based fee and/or a transaction fee to
intermediaries. Class S share availability is determined by the Distributor and
intermediaries based on the overall direct and indirect costs of a particular
program, expected assets, account sizes and similar considerations.
Class T Shares. MetLife Securities Money Fund Class T shares are for
accounts available through Metropolitan and its affiliates.
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.
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
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<PAGE>
has no present intention to do so, the Fund may, under unusual circumstances,
limit redemptions in cash with respect to each shareholder during any ninety-day
period to the lesser of (i) $250,000 or (ii) 1% of the net asset value of the
Fund at the beginning of such period. In connection with any redemptions paid in
kind with portfolio securities, brokerage and other costs may be incurred by the
redeeming shareholder in the sale of the securities received.
Systematic Withdrawal Plan. A shareholder who owns noncertificated
Class E or Class S shares with a value of $5,000 or more, or Class B(1), Class B
or Class C shares with a value of $10,000 or more, may elect, by participating
in the Fund's Systematic Withdrawal Plan, to have periodic checks issued for
specified amounts. These amounts may not be less than certain minimums,
depending on the class of shares held. The Plan provides that all income
dividends and capital gains distributions of the Fund shall be credited to
participating shareholders in additional shares of the Fund. Thus, the
withdrawal amounts paid can only be realized by redeeming shares of the Fund
under the Plan. To the extent such amounts paid exceed dividends and
distributions from the Fund, a shareholder's investment will decrease and may
eventually be exhausted.
In the case of shares otherwise subject to contingent deferred sales
charges, no such charges will be imposed on withdrawals of up to 12% annually
(minimum $50 per withdrawal) of either (a) the value, at the time the Systematic
Withdrawal Plan is initiated, of the shares then in the account or (b) the
value, at the time of a withdrawal, of the same number of shares as in the
account when the Systematic Withdrawal Plan was initiated, whichever is higher.
Expenses of the Systematic Withdrawal Plan are borne by the Fund. A
participating shareholder may withdraw from the Systematic Withdrawal Plan, and
the Fund may terminate the Systematic Withdrawal Plan at any time on written
notice. Purchase of additional shares while a shareholder is receiving payments
under a Systematic Withdrawal Plan is ordinarily disadvantageous because of
duplicative sales charges. For this reason, a shareholder may not participate in
the Investamatic Program (see "Your Investment--Investor Services--Investamatic
Program" in the Fund's Prospectus) and the Systematic Withdrawal Plan at the
same time.
Request to Dealer to Repurchase. For the convenience of shareholders,
the Fund has authorized the Distributor as its agent to accept orders from
dealers by wire or telephone for the repurchase of shares by the Distributor
from the dealer. The Fund may revoke or suspend this authorization at any time.
The repurchase price is the net asset value for the applicable shares next
determined following the time at which the shares are offered for repurchase by
the dealer to the Distributor. The dealer is responsible for promptly
transmitting a shareholder's order to the Distributor.
Signature Guarantees. Signature guarantees are required for, among
other things: (1) written requests for redemptions for more than $100,000; (2)
written requests for redemptions
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<PAGE>
for any amount if the proceeds are transmitted to other than the current address
of record (unchanged in the past 30 days); (3) written requests for redemptions
for any amount submitted by corporations and certain fiduciaries and other
intermediaries; and (4) requests to transfer the registration of shares to
another owner; and (5) if checkwriting is available for the account,
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.
Dishonored Checks. If a purchaser's check is not honored for its full
amount, the purchaser could be subject to additional charges to cover collection
costs and any investment loss, and the purchase may be canceled.
Processing Charges. Purchases and redemptions processed through
securities dealers may be subject to processing charges imposed by the
securities dealer in addition to sales charges that may be imposed by the Fund
or the Distributor.
SHAREHOLDER ACCOUNTS
General information on shareholder accounts is included in the Fund's
Prospectus under "Your Investment." The following supplements that information.
Maintenance Fees and Involuntary Redemption. Because of the relatively
high cost of maintaining small shareholder accounts, the Fund reserves the right
to redeem at its option any shareholder account which remains below $1,500 for a
period of 60 days after notice is mailed to the applicable shareholder, or to
impose a maintenance fee on such account after 60-days' notice. Such
involuntarily redemptions will be subject to applicable sales charges, if any.
The Fund may increase such minimum account value above such amount in the future
after notice to affected shareholders. Involuntarily redeemed shares will be
priced at the net asset value on the date fixed for redemption by the Fund, and
the proceeds of the redemption will be mailed to the affected shareholder at the
address of record. Currently, the maintenance fee is $18 annually, which is paid
to the Transfer Agent. The fee does not apply to certain retirement accounts or
if the shareholder has more than an aggregate $50,000 invested in the Fund and
other Eligible Funds combined. Imposition of a maintenance fee on a small
account could, over time, exhaust the assets of such account.
To cover the cost of additional compliance administration, a $20 fee
will be charged against any shareholder account that has been determined to be
subject to escheat under applicable state laws.
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
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<PAGE>
redemption of shares or postpone the date of payment of redemption proceeds: (1)
during any period that the NYSE is closed (other than customary weekend and
holiday closings) or trading on the NYSE is restricted; (2) during any period in
which an emergency exists as a result of which disposal of portfolio securities
is not reasonably practicable or it is not reasonably practicable to fairly
determine the Fund's net asset values; or (3) during such other periods as the
Securities and Exchange Commission (the "SEC") may by order permit for the
protection of investors; and (b) the payment of redemption proceeds may be
postponed as otherwise provided under "Purchase and Redemption of Shares" in
this Statement of Additional Information.
The Open Account System. Under the Open Account System full and
fractional shares of the Fund owned by shareholders are credited to their
accounts by the Transfer Agent, State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110. 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 through
dealers, by wire or by mailing a check payable to "State Street
Research Funds" under the terms set forth above under "Purchase and
Redemption of Shares" in this Statement of Additional Information.
2. The following methods of receiving dividends from investment income
and distributions from capital gains generally are available:
(a) All income dividends and capital gains distributions reinvested
in additional shares of the Fund.
(b) All income dividends and capital gains distributions in cash.
(c) All income dividends and capital gains distributions invested in
any one available Eligible Fund designated by the shareholder as
described below. See "--Dividend Allocation Plan" herein.
Dividend and distribution selections should be made on the Application
accompanying the initial investment. If no selection is indicated on the
Application, that account will be automatically coded for reinvestment of all
dividends and distributions in additional shares of the same class of the Fund.
Selections may be changed at any time by telephone or written notice to the
Service Center. Dividends and distributions are reinvested at net asset value
without a sales charge.
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<PAGE>
Requests by Check. 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
currently is 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 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 the Service Center.
Canceled 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.
Exchange Privileges. Shareholders of the Fund may exchange their
shares for available shares with corresponding characteristics of any of the
other Eligible Funds at any time on the basis of the relative net asset values
of the respective shares to be exchanged, subject to compliance with applicable
securities laws. Shareholders of any other Eligible Fund may similarly exchange
their shares for Fund shares with corresponding characteristics. Prior to making
an exchange, shareholders should obtain the Prospectus of the Eligible Fund into
which they are exchanging. Under the Direct Program, subject to certain
conditions, shareholders may make arrangements for regular exchanges from the
Fund into other Eligible Funds. To effect an exchange, Class B(1), Class B and
Class C shares may be redeemed without the payment of any contingent deferred
sales charge that might otherwise be due upon an ordinary redemption of such
shares. 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 be payable upon disposition of any acquired Class A, Class B(1),
Class B and Class C shares, the holding period of the redeemed shares is
"tacked" to the holding period of any 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. Class T shares
may not be
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<PAGE>
exchanged into shares of any other Eligible Fund, and no shares of any other
Eligible Fund may be exchanged into Class T shares.
The exchange privilege may be terminated or suspended or its terms
changed at any time, subject, if required under applicable regulations, to 60
days' prior notice. New accounts established for investments upon exchange from
an existing account in another fund will have the same telephone privileges with
respect to the Fund (see "Your Investment--Account Policies--Telephone Requests"
in the Fund's Prospectus and "--Telephone Privileges," below) as the existing
account unless the Service Center is instructed otherwise. Related
administrative policies and procedures may also be adopted with regard to a
series of exchanges, street name accounts, sponsored arrangements and other
matters.
Reinvestment Privilege. A shareholder of the Fund who has redeemed
shares or had shares repurchased at his or her request may reinvest all or any
portion of the proceeds (plus that amount necessary to acquire a fractional
share to round off his or her reinvestment to full shares) in shares, of the
same class as the shares redeemed, of the Fund or any other Eligible Fund at net
asset value and without subjecting the reinvestment to an initial sales charge,
provided such reinvestment is made within 120 calendar days after a redemption
or repurchase. Upon such reinvestment, the shareholder will be credited with any
contingent deferred sales charge previously charged with respect to the amount
reinvested. The redemption of shares is, for federal income tax purposes, a sale
on which the shareholder may realize a gain or loss. If a redemption at a loss
is followed by a reinvestment within 30 days, the transaction may be a "wash
sale" resulting in a denial of the loss for federal income tax purposes.
Any reinvestment pursuant to the reinvestment privilege will be subject
to any applicable minimum account standards imposed by the fund into which the
reinvestment is made. Shares are sold to a reinvesting shareholder at the net
asset value thereof next determined following timely receipt by the Service
Center of such shareholder's written purchase request and delivery of the
request by the Service Center to the Transfer Agent. A shareholder may exercise
this reinvestment privilege only once per 12-month period with respect to his or
her shares of the Fund.
Dividend Allocation Plan. The Dividend Allocation Plan allows
shareholders to elect to have all their dividends and any other distributions
from the Fund or any Eligible Fund automatically invested at net asset value in
one other such Eligible Fund designated by the shareholder, provided the account
into which the dividends and distributions are directed is initially funded with
the requisite minimum amount.
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<PAGE>
Telephone Privileges. The following telephone privileges are available:
o Telephone Exchange Privilege for Shareholder and Shareholder's
Financial Professional
o Shareholders automatically receive this privilege unless
declined.
o This privilege allows the shareholder or the shareholder's
financial professional to request exchanges into other State
Street Research funds.
o Telephone Redemption Privilege for Shareholder
o Shareholders automatically receive this privilege unless
declined.
o This privilege allows the shareholder to phone requests to sell
shares, with the proceeds sent to the address of record.
o Telephone Redemption Privilege for Shareholder's Financial
Professional
(This privilege is not automatic; a shareholder must specifically
elect it)
o This privilege allows the shareholder's financial professional to
phone requests to sell shares, with the proceeds to be sent to
the address of record on the account.
A shareholder with the above telephone privileges is deemed to
authorize the Service Center and the Transfer Agent to: (1) act upon the
telephone instructions of any person purporting to be any of the shareholders of
an account or a shareholder's financial professional to redeem or exchange,
shares from any account; and (2) honor any written instructions for a change of
address regardless of whether such request is accompanied by a signature
guarantee. All telephone calls will be recorded. Neither the Fund, the other
Eligible Funds, the Transfer Agent, the Investment Manager nor the Distributor
will be liable for any loss, expense or cost arising out of any request,
including any fraudulent or unauthorized requests. Shareholders assume the risk
to the full extent of their accounts that telephone requests may be
unauthorized. Reasonable procedures will be followed to confirm that
instructions communicated by telephone are genuine. The shareholder will not be
liable for any losses arising from unauthorized or fraudulent instructions if
such procedures are not followed.
Alternative Means of Contacting the Fund. It is unlikely, during
periods of extraordinary market conditions, that a shareholder may have
difficulty in reaching the Service Center. In that event, however, the
shareholder should contact the Service Center at 1-800-562-0032, 1-617-357-7800
or otherwise at its main office at One Financial Center, Boston, Massachusetts
02111-2690.
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<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 the close of regular trading
on the NYSE, which is ordinarily 4 P.M. New York City time. The NYSE is
currently closed on New Year's Day, Martin Luther King, Jr., Day, Presidents
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day
and Christmas Day.
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 the
amount of the deviation as well as the methods used to calculate
the deviation;
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<PAGE>
(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 397 calendar days 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 judgment as to the business
qualifications of the various broker or dealer firms with whom the Investment
Manager may do business, and the Investment Manager may not necessarily choose
the broker offering the lowest available commission rate. Decisions with respect
to the market where the transaction is to be completed, to the form of
transaction (whether principal or agency), and to the allocation of orders among
brokers or dealers are made in accordance with
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<PAGE>
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 by the Investment Manager 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 in
conjunction with certain trading systems and including software providing
investment personnel with efficient access to current and historical data from a
variety of internal and external sources); portfolio evaluation services and
relative performance of accounts. Certain of the nonexecution services provided
by broker-dealers may in turn be obtained by the broker-dealers from third
parties who are paid for such services by the broker-dealers.
In the case of the Fund and other registered investment companies
advised by the Investment Manager or its affiliates, the above services may
include data relating to performance, expenses and fees of those investment
companies and other investment companies; this information is used by the
Trustees or Directors of the investment companies to fulfill their
responsibility to oversee the quality of the Investment Manager's advisory
contracts between the investment companies and the Investment Manager. The
Investment Manager considers these investment company services only in
connection with the execution of transactions on behalf of its investment
company clients and not its other clients.
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The Investment Manager regularly reviews and evaluates the services
furnished by broker-dealers. The Investment Manager's investment management
personnel seek to evaluate the quality of research and other services provided
by broker-dealer firms, and the results of those efforts are made available to
the equity trading department, which sometimes uses this information as a
consideration to the extent described above in the selection of brokers to
execute portfolio transactions.
Some services furnished by broker-dealers may be used for research and
investment decision-making purposes, and also for marketing or administrative
purposes. Under these circumstances, the Investment Manager allocates the cost
of such services to determine the proportion that is allocable to research or
investment decision-making and the proportion that is allocable to other
purposes. The Investment Manager pays directly from its own funds for that
portion that is allocable to uses other than research or investment making
decision. Some research and execution services may benefit the Investment
Manager's clients as a whole, while others may benefit a specific segment of
clients. Not all such services will necessarily be used exclusively in
connection with the accounts which pay the commissions to the broker-dealer
producing the services.
The Investment Manager has no fixed agreements or understandings with
any broker-dealer as to the amount of brokerage business which the firm may
expect to receive for services supplied to the Investment Manager or otherwise.
There may be, however, understandings with certain firms that in order for such
firms to be able to continuously supply certain services, they need to receive
an allocation of a specified amount of brokerage business. These understandings
are honored to the extent possible in accordance with the policies set forth
above.
In the case of the purchase of fixed income securities in underwriting
transactions, the Investment Manager follows any instructions received from its
clients as to the allocation of new issue discounts, selling commissions and
designations to brokers or dealers which provide the client with research,
performance evaluation, master trustee and other services. In the absence of
instructions from the client, the Investment Manager may make such allocations
to broker-dealers which have provided the Investment Manager with research and
brokerage services.
In some instances, certain clients of the Investment Manager request
that it place all or part of the orders for their account with certain brokers
or dealers, which in some cases provide services to those clients. The
Investment Manager generally agrees to honor those requests to the extent
practicable. Clients may condition their requests by requiring the Investment
Manager only to effect transactions with the specified broker-dealers if the
broker-dealers are competitive as to price and execution. In other cases, the
Investment Manager may be unable to negotiate commissions or obtain volume
discounts or best execution. In addition, a disparity may exist among the
commissions charged to clients who
II-18
<PAGE>
request the Investment Manager to use particular brokers or dealers, and also
between those clients and those who do not make such requests. A client who
requests the use of a particular broker-dealer should understand that it may
lose the possible advantage which non-requesting clients derive from
understandings with certain firms that in order for such firms to be able to
continuously supply certain services, they need to receive an allocation of a
specified amount of brokerage business. These understandings are honored to the
extent possible in accordance with the policies set forth above.
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 size of the order, 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.
Subject to the policy of seeking best overall price and execution,
sales of shares of the Fund and other State Street Research Funds may be
considered by the Investment Manager in the selection of broker or dealer firms
for the Fund's portfolio transactions.
CERTAIN TAX MATTERS
Taxation of the Fund--In General
The Fund intends to qualify and elects 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 qualify to 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
II-19
<PAGE>
respect to its business of investing in such stock, securities or currencies
(the "90% test"); and (b) satisfy certain diversification requirements on a
quarterly basis.
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 (or deemed distributed) on a timely basis in accordance with a
calendar year distribution requirement. To avoid the tax, during each calendar
year the Fund must distribute, or be deemed to have distributed, an amount equal
to the sum of (1) at least 98% of its ordinary income (not taking into account
any capital gains or losses) for the calendar year, (2) at least 98% of its
capital gains in excess of its capital losses (adjusted for certain
extraordinary losses) for the 12-month period ending on October 31 of the
calendar year and (3) all ordinary income and capital gains for previous years
that were not distributed during such years. For this purpose, any income or
gain retained by the Fund that is subject to corporate tax will be considered to
have been distributed by year-end. The Fund intends to make sufficient
distributions to avoid this 4% excise tax.
Taxation of the Fund's Shareholders
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, 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 capital gains, regardless of how long shareholders have held
their shares.
The foregoing discussion of United States federal income tax law
relates solely to the application of that law to United States persons, that is,
United States citizens and residents and United States corporations,
partnerships, trusts and estates. Each shareholder who is not a United States
person should consider the United States and foreign tax consequences of
ownership of shares of the Fund, including the possibility that such a
shareholder may be subject to United States withholding tax at a rate of up to
30% (or at a lower rate under an applicable treaty) on distributions from the
Fund.
II-20
<PAGE>
Shareholders should consult their tax advisers about the application of
the provisions of tax law described in this Statement of Additional Information
in light of their particular tax situations.
DISTRIBUTION OF SHARES OF THE FUND
The Trust has entered into a Distribution Agreement with State Street
Research Investment Services, Inc., as Distributor, whereby the Distributor acts
as agent to sell and distribute shares of the Fund. Shares of the Fund are sold
through dealers who have entered into sales agreements with the Distributor. The
Distributor distributes shares of the Fund on a continuous basis at an offering
price which is based on the net asset value per share of the Fund plus a sales
charge which is imposed on a deferred basis (the Class B(1), Class B and Class C
shares). The Distributor may allow all or portions of such sales charges as
concessions to dealers.
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 "General 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 C shares, including, but not limited to, (1) the payment of
commissions and/or reimbursement to underwriters, securities dealers and others
engaged in the sale of shares, including payments to the Distributor to be used
to pay commissions and/or reimbursement to securities dealers (which securities
dealers may be affiliates of the Distributor) engaged in the distribution and
marketing of shares and furnishing ongoing assistance to investors, (2)
reimbursement of direct out-of-pocket expenditures incurred by the Distributor
in connection with the distribution and marketing of shares and the servicing of
investor accounts, 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. In addition, the General 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 General Distribution Plan
may not exceed with respect to Class B and Class C shares, an annual rate of
0.75% of the average daily value of the net assets represented by such Class B
or Class C shares (as the case may be) to finance sales or promotion expenses
and an annual rate of 0.25% of the average daily value of the net
II-21
<PAGE>
assets represented by such Class B or Class C shares (as the case may be) to
make payments for personal services and/or the maintenance or servicing of
shareholder accounts.
The Fund also has adopted a Rule 12b-1 Plan for Class B(1) shares (the
"Share Distribution Plan") under which the Fund shall pay the Distributor (a) a
service fee at the end of each month at the annual rate of 0.25% of average
daily net assets attributable to the Class B(1) shares to compensate the
Distributor and any securities firms or other third parties who render personal
services to and/or maintain shareholder accounts for the shareholders of the
respective class and (b) a distribution fee at the end of each month at the
annual rate of 0.75% of average daily net assets attributable to the Class B(1)
shares to compensate the Distributor for services provided and expenses incurred
by it in connection with sales, promotional and marketing activities relating to
the respective class. To the extent that any payments made by the Fund to the
Distributor or the Investment Manager, including payment of investment
management fees, should be deemed to be an indirect financing of any activity
primarily resulting in the sale of shares of the Fund within the scope of Rule
12b-1 under the 1940 Act, then such payments shall be deemed to be authorized by
the Share Distribution Plan.
A rule of the National Association of Securities Dealers, Inc. ("NASD")
limits annual expenditures that the Fund may incur to 0.75% for distribution
expenses and 0.25% for service fees. The NASD rule also limits the aggregate
amount that the Fund may pay for such distribution costs to 6.25% of gross share
sales of a class since the inception of any asset-based sales charge plus
interest at the prime rate plus 1% 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 either the General Distribution
Plan or the Share Distribution Plan may be discontinued at any time.
Some or all of the service fees are used to pay or reimburse dealers
(including dealers that are affiliates of the Distributor) or others for
personal services and/or the maintenance of shareholder accounts. A portion of
any initial commission paid to dealers for the sale of shares of the Fund
represents payment for personal services and/or the maintenance or servicing of
shareholder accounts by such dealers. Dealers who have sold Class B(1), Class B
and Class C shares are eligible for further reimbursement after the first year
during which such shares have been held of record by such dealer as nominee for
its clients (or by such clients directly).
The distribution fees are used primarily to offset initial and ongoing
commissions paid to dealers for selling such shares and for other sales and
marketing expenditures.
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.
II-22
<PAGE>
The payment of service and distribution fees may continue even if the
Fund ceases, temporarily or permanently, to sell one or more classes of shares
to new accounts. During the period the Fund is closed to new accounts, the
distribution fee will not be used for promotion expenses. The service and
distribution fees are used during a closed period to cover services provided to
current shareholders and to cover the compensation of financial professionals in
connection with the prior sale of Fund shares, among other non-promotional
distribution expenditures.
The Distributor may pay certain dealers and other intermediaries
additional compensation for sales and administrative services. The Distributor
may provide cash and noncash incentives to intermediaries who, for example, sell
significant amounts of shares or develop particular distribution channels. The
Distributor may compensate dealers with clients who maintain their investments
in the Fund over a period of years. The incentives can include merchandise and
trips to, and attendance at, sales seminars at resorts. The Distributor may pay
for administrative services, such as technological and computer systems support
for the maintenance of pension plan participant records, for subaccounting, and
for distribution through mutual fund supermarkets or similar arrangements.
No interested Trustee of the Trust has any direct or indirect financial
interest in the operation of the Distribution Plan or any related agreements
thereunder. The Distributor's interest in the Distribution Plan is described
above.
To the extent that the Glass-Steagall Act may be interpreted as
prohibiting banks and other depository institutions from being paid for
performing services under the Distribution Plan, the Fund will make alternative
arrangements for such services for shareholders who acquired shares through such
institutions.
CALCULATION OF PERFORMANCE DATA
Standard total return is computed separately for each class of shares
by determining the average annual compounded rates of return over the designated
periods that, if applied to the initial amount invested, would produce the
ending redeemable value in accordance with the following formula:
II-23
<PAGE>
n
P(1+T) = ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value
at the end of the
designated period assuming
a hypothetical $1,000
payment made at the
beginning of the designated
period
The calculation is based on the further assumptions that the highest
applicable initial or contingent deferred sales charge is deducted, and that all
dividends and distributions by the Fund are reinvested at net asset value on the
reinvestment dates during the periods. All accrued expenses and recurring
charges are also taken into account as described later herein.
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(1), Class B,
Class C, Class E, Class S and Class T 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(1), Class B, Class C, Class E, Class S and Class T 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
II-24
<PAGE>
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 carry forward 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.
Accrued Expenses and Recurring Charges
Accrued expenses include all recurring charges that are charged to all
shareholder accounts in proportion to the length of the base period. The
standard total return results take sales charges, if applicable, into account
although the results do not take into account recurring and nonrecurring charges
for optional services which only certain shareholders elect and which involve
nominal fees, such as the $7.50 fee for wire orders.
Accrued expenses do not include the subsidization, if any, by
affiliates of fees or expenses during the subject period. In the absence of such
subsidization, the performance of the Fund would have been lower.
Nonstandardized Total Return
The Fund may provide the above described standard total return results
for Class B(1), Class B, Class C, Class E, Class S and Class T shares for
periods which end no earlier than the most recent calendar quarter end and which
begin one, five and ten years before. 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 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, if any, may not be taken into account and therefore not
deducted from the hypothetical initial payment of $1,000.
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.
II-25
<PAGE>
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 160 Federal Street, Boston, Massachusetts
02110, serves as the Trust's independent accountants, providing professional
services including (1) audits of the Fund's annual financial statements, (2)
assistance and consultation in connection with SEC filings and (3) review of the
annual income tax returns filed on behalf of the Fund.
FINANCIAL STATEMENTS
In addition to the reports provided to holders of record on a
semiannual basis, other supplementary financial reports may be made available
from time to time through electronic or other media. Shareholders with
substantial holdings in one or more State Street Research Funds may also receive
reports and other information which reflect or analyze their positions in a
consolidated manner. For more information, call the State Street Research
Service Center.
II-26
<PAGE>
STATE STREET RESEARCH MONEY MARKET TRUST
PART C
OTHER INFORMATION
Item 23. 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 (13)
(1)(c) Amendment No. 4 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) Deleted
(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) First Amended and Restated Distribution Agreement with State
Street Research Investment Services, Inc.(14)
(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 (13)
(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)***
(8)(a)(ii)Amendment to the Custodian Contract with State Street Bank
and Trust Company(14)
(8)(b) Data Access Services Addendum to Custodian Contract
(9) Not applicable (9)
(10) Opinion and consent of Goodwin, Procter & Hoar (2)***
(11) Consent of PricewaterhouseCoopers LLP
(12) Not applicable
(13)(a) Purchase Agreement and Investment Letter (2)***
(13)(b) Purchase Agreement and Investment Letter (2)***
(14)(a) Deleted
(14)(b) Deleted
(14)(c) Deleted
(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)***
(15)(c) Rule 12b-1 Plan for Class B(1) Shares
(16)(a) Deleted
(16)(b) Deleted
(17)(a) First Amended and Restated Multiple Class Expense
Allocation Plan (13)
(17)(b) Addendum to First Amended and Restated Multiple Class Expense
Allocation Plan
C-2
<PAGE>
(18)(a) Powers of Attorney (12)
(18)(b) Power of Attorney for Susan M. Phillips
(18)(c) Power of Attorney for Bruce R. Bond
(19) Certificate of Board Resolution Respecting Powers of
Attorney
(20) Application Forms(14)
- ----------
* 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.
*** Restated in electronic format in Post-Effective Amendment No. 12 filed on
July 31, 1997
Filed as part of the Registration Statement as noted below and incorporated
herein by reference:
<TABLE>
<CAPTION>
Footnote Securities Act of 1933
Reference Registration/Amendment Date Filed
- --------- ---------------------- ----------
<S> <C> <C>
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
13 Post-Effective Amendment No. 11 July 29, 1996
14 Post-Effective Amendment No. 12 July 31, 1997
</TABLE>
C-3
<PAGE>
Item 24. Persons Controlled by or Under Common Control with the Fund
ORGANIZATIONAL STRUCTURE OF METROPOLITAN AND SUBSIDIARIES
AS OF DECEMBER 31, 1998
The following is a list of subsidiaries of Metropolitan Life Insurance Company
("Metropolitan") as of December 31, 1998. 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 (Rhode Island)
a. Metropolitan Group Property and Casualty Insurance Company
(Rhode Island)
i. Metropolitan Reinsurance Company (U.K.) Limited (Great
Britain)
b. Metropolitan Casualty Insurance Company (Rhode Island)
c. Metropolitan General Insurance Company (Rhode Island)
d. Metropolitan Direct Property and Casualty Insurance Company
(Georgia)
e. Metropolitan P&C Insurance Services, Inc. (California)
f. Metropolitan Lloyds, Inc. (Texas)
g. Met P&C Managing General Agency, 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)
f. MetLife General Insurance Agency of Massachusetts, Inc.
(Massachusetts)
C-4
<PAGE>
4. Metropolitan Asset Management Corporation (Delaware)
(a.) MetLife Capital, Limited Partnership (Delaware).
Partnership interests in MetLife Capital, Limited
Partnership are held by Metropolitan (90%) and
Metropolitan Asset Management Corporation (10%).
(i.) MetLife Capital Credit L.P. (Delaware).
Partnership interests in MetLife Capital Credit
L.P. are held by Metropolitan (90%) and
Metropolitan Asset Management Corporation (10%).
(1) MetLife Capital CFLI Holdings, LLC (DE)
(a.) MetLife Capital CFLI Leasing, LLC
(DE)
b. 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.
c. MetLife Investments Limited (United Kingdom). 23rd Street
Investments, Inc. holds one share of MetLife Investments
Limited.
d. MetLife Investments Asia Limited (Hong Kong). One share of
MetLife Investments Asia Limited is held by W&C Services, Inc.,
a nominee of Metropolitan Asset Management Corporation.
5. SSRM Holdings, Inc. (Delaware)
a. GFM Investments Limited (Delaware)
b. 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 Investment Services, Inc.
(Massachusetts)
C-5
<PAGE>
c. SSR Realty Advisors, Inc. (Delaware)
i. Metric Management Inc. (Delaware)
ii. Metric Property Management, Inc. (Delaware)
(1) Metric Realty (Delaware). SSR Realty Advisors, Inc.
and Metric Property Management, Inc. each hold 50% of
the common stock of Metric Realty.
(a) 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.
(2) Metric Colorado, Inc. (Colorado). Metric Property
Management, Inc. holds 80% of the common stock of
Metric Colorado, Inc.
iii. Metric Capital Corporation (California)
iv. Metric Assignor, Inc. (California)
v. SSR AV, Inc. (Delaware)
6. MetLife Holdings, Inc. (Delaware)
a. MetLife Funding, Inc. (Delaware)
b. MetLife Credit Corp. (Delaware)
7. Metropolitan Tower Realty Company, Inc. (Delaware)
8. Met Life Real Estate Advisors, Inc. (California)
9. Security First Group, Inc. (DE)
a. Security First Life Insurance Company (DE)
b. Security First Insurance Agency, Inc. (MA)
c. Security First Insurance Agency, Inc. (NV)
d. Security First Group of Ohio, Inc. (OH)
e. Security First Financial, Inc. (DE)
f. Security First Investment Management Corporation (DE)
g. Security First Management Corporation (DE)
h. Security First Real Estate, Inc. (DE)
i. Security First Financial Agency, Inc. (TX)
10. Natiloportem Holdings, Inc. (Delaware)
B. Metropolitan Tower Life Insurance Company (Delaware)
C. MetLife Security Insurance Company of Louisiana (Louisiana)
C-6
<PAGE>
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. Services La Metropolitaine Quebec, Inc. (Quebec, Canada)
H. 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)
I. MetLife Saengmyoung Insurance Company Ltd. (Korea).
J. Metropolitan Life Seguros de Vida S.A. (Argentina)
K. Metropolitan Life Seguros de Retiro S.A. (Argentina).
L. Met Life Holdings Luxembourg (Luxembourg)
M. Metropolitan Life Holdings, Netherlands BV (Netherlands)
N. MetLife International Holdings, Inc. (Delaware)
O. Metropolitan Life Insurance Company of Hong Kong Limited (Hong Kong)
P. Metropolitan Marine Way Investments Limited (Canada)
Q. P.T. MetLife Sejahtera (Indonesia) Shares of P.T. MetLife Sejahtera are
held by Metropolitan (80%) and by an entity (20%) unaffiliated with
Metropolitan.
R. Seguros Genesis S.A. (Mexico) Metropolitan holds 85.49%, Metropolitan Tower
Corp. holds 7.31% and Metropolitan Asset Management Corporation holds 7.20%
of the common stock of Seguros Genesis S.A.
S. Metropolitan Life Seguros de Vida S.A. (Uruguay). One share of Metropolitan
Life Seguros de Vida S.A. is held by Alejandro Miller Artola, a nominee of
Metropolitan Life Insurance Company.
T. Metropolitan Life Seguros E Previdencia Privada S.A. (Brazil)
C-7
<PAGE>
U. Hyatt Legal Plans, Inc. (Delaware)
1. Hyatt Legal Plans of Florida, Inc. (Fl)
V. One Madison Merchandising L.L.C. (Connecticut) Ownership of membership
interests in One Madison Merchandising L.L.C. is as follows: Metropolitan
owns 99% and Metropolitan Tower Corp. owns 1%.
W. Metropolitan Realty Management, Inc. (Delaware)
1. Edison Supply and Distribution, Inc. (Delaware)
2. Cross & Brown Company (New York)
a. CBNJ, Inc. (New Jersey)
X. MetPark Funding, Inc. (Delaware)
Y. 2154 Trading Corporation (New York)
Z. Transmountain Land & Livestock Company (Montana)
AA. Farmers National Company (Nebraska)
1. Farmers National Commodities, Inc. (Nebraska)
2. Farmers National Marketing Group, LLC (Iowa) Ownership of membership
interests in Farmers National Marketing Group, LLC is as follows:
Farmers National Company (50%) and an entity unaffiliated with
Metropolitan (50%).
A.B. MetLife Trust Company, National Association. (United States)
A.C. Benefit Services Corporation (Georgia)
A.D. G.A. Holding Corporation (MA)
A.E. TNE-Y, Inc. (DE)
A.F. CRH., Inc. (MA)
A.G. NELRECO Troy, Inc. (MA)
A.H. TNE Funding Corporation (DE)
A.I. L/C Development Corporation (CA)
A.J. Boylston Capital Advisors, Inc. (MA)
1. New England Portfolio Advisors, Inc. (MA)
A.K. CRB Co., Inc. (MA) AEW Real Estate Advisors, Inc. holds 49,000 preferred
non-voting shares of CRB Co., Inc. AEW Advisors, Inc. holds 1,000
preferred non-voting shares of CRB Co., Inc.
A.L. New England Life Mortgage Funding Corporation (MA)
A.M. Mercadian Capital L.P. (DE). Metropolitan holds a 95% limited partner
interest and an unaffiliated third party holds 5% of Mercadian Capital
L.P.
A.N. Mercadian Funding L.P. (DE). Metropolitan holds a 95% limited partner
interest and an unaffiliated third party holds 5% of Mercadian
Funding L.P.
A.O. Tower Resources Group, Inc. (DE)
C-8
<PAGE>
A.P. MetLife New England Holdings, Inc. (DE)
1. Fulcrum Financial Advisors, Inc. (MA)
2. New England Life Insurance Company (MA)
a. New England Life Holdings, Inc. (DE)
i. New England Securities Corporation (MA)
(1) Hereford Insurance Agency, Inc. (MA)
(2) Hereford Insurance Agency of Alabama, Inc. (AL)
(3) Hereford Insurance Agency of Minnesota, Inc. (MN)
(4) Hereford Insurance Agency of Ohio, Inc. (OH)
(5) Hereford Insurance Agency of New Mexico, Inc. (NM)
ii. TNE Advisers, Inc. (MA)
iii. TNE Information Services, Inc. (MA)
(1) First Connect Insurance Network, Inc. (DE)
(2) Interative Financial Solutions, Inc. (MA)
iv. N.L. Holding Corp. (Del)(NY)
(1) Nathan & Lewis Securities, Inc. (NY)
(2) Nathan & Lewis Associates, Inc. (NY)
(a) Nathan and Lewis Insurance Agency of Massachusetts,
Inc. (MA)
(b) Nathan and Lewis Associates of Texas, Inc. (TX)
(3) Nathan & Lewis Associates--Arizona, Inc. (AZ)
(4) Nathan & Lewis of Nevada, Inc. (NV)
(5) Nathan and Lewis Associates Ohio, Incorporated (OH)
b. Exeter Reassurance Company, Ltd. (MA)
c. Omega Reinsurance Corporation (AZ)
d. New England Pension and Annuity Company (DE)
e. Newbury Insurance Company, Limited (Bermuda)
3. Nvest Corporation (MA)
a. Nvest, L.P. (DE) Nvest Corporation holds a 1.69% general partnership
interest and MetLife New England Holdings, Inc. 3.19% general
partnership interest in Nvest, L.P.
b. Nvest Companies, L.P. (DE) Nvest Corporation holds a 0.0002% general
partnerhship interest in Nvest Companies, L.P. Nvest, L.P. holds a
14.64% general partnership interest in Nvest Companies, L.P.
Metropolitan holds a 46.23% limited partnership interest in Nvest
Companies, L.P.
i. Nvest Holdings, Inc. (DE)
(1) Back Bay Advisors, Inc. (MA)
(a) Back Bay Advisors, L.P. (DE)
Back Bay Advisors, Inc.
holds a 1% general partner
interest and NEIC
Holdings, Inc. holds a 99%
limited partner interest
in Back Bay Advisors, L.P.
(2) R & T Asset Management, Inc. (MA)
(a) Reich & Tang Distributors, Inc. (DE)
(b) R & T Asset Management L.P.
R & T Asset Management, Inc.
holds a 0.5% general partner interest and
NEIC Holdings, Inc. hold a 99.5% limited
partner interest in &
Asset Management, L.P.
(c) Reich & Tang Services, Inc. (DE)
C-9
<PAGE>
(3) Loomis, Sayles & Company, Inc. (MA)
(a) Loomis Sayles & Company, L.P. (DE)
Loomis Sayles & Company, Inc.
holds a 1% general partner interest and
R & T Asset Management, Inc. holds a 99%
limited partner interest in Loomis Sayles &
Company, L.P.
(4) Westpeak Investment Advisors, Inc. (MA)
(a) Westpeak Investment Advisors, L.P. (DE)
Westpeak Investment Advisors, Inc.
holds a 1% general partner interest and
Reich & Tang holds a 99% limited
partner interest in Westpeak Investment
Advisors, L.P.
(i) Westpeak Investment Advisors Australia
Limited Pty.
(5) Vaughan, Nelson Scarborough & McCullough (DE)
(a) Vaughan, Nelson Scarborough & McCullough, L.P. (DE)
VNSM, Inc. holds a 1% general partner interest and
Reich & Tang Asset Management, Inc. holds a 99%
limited partner interest in Vaughan, Nelson
Scarborough & McCullough, L.P.
(i) VNSM Trust Company
(6) MC Management, Inc. (MA)
(a) MC Management, L.P. (DE)
MC Management, Inc. holds a 1% general partner
interest and R & T Asset Management, Inc.
holds a 99% limited partner interest in MC
Management, L.P.
(7) Harris Associates, Inc. (DE)
(a) Harris Associates Securities L.P. (DE)
Harris Associates, Inc. holds a 1% general partner
interest and Harris Associates L.P. holds a
99% limited partner interest in Harris Associates
Securities, L.P.
(b) Harris Associates L.P. (DE)
Harris Associates, Inc. holds a 0.33% general
partner interest and NEIC Operating Partnership,
L.P. holds a 99.67% limited partner interest in
Harris Associates L.P.
(i) Harris Partners, Inc. (DE)
(ii) Harris Partners L.L.C. (DE)
Harris Partners, Inc. holds a 1%
membership interest and
Harris Associates L.P. holds a 99%
membership interest in Harris Partners L.L.C.
(1) Aurora Limited Partnership (DE)
Harris Partners L.L.C. holds a 1% general
partner interest
C-10
<PAGE>
(2) Perseus Partners L.P. (DE) Harris Partners
L.L.C. holds a 1% general partner interest
(3) Pleiades Partners L.P. (DE) Harris
Partners L.L.C. holds a 1% general partner
interest
(4) Stellar Partners L.P. (DE)
Harris Partners L.L.C. holds a 1% general
partner interest
(5) SPA Partners L.P. (DE) Harris Partners
L.L.C. holds a 1% general partner interest
(8) Graystone Partners, Inc. (MA)
(a) Graystone Partners, L.P. (DE)
Graystone Partners, Inc. holds a 1%
general partner interest and New England
NEIC Operating Partnership, L.P.
holds a 99% limited partner interest in
Graystone Partners, L.P.
(9) NEF Corporation (MA)
(a) New England Funds, L.P. (DE) NEF Corporation holds a
1% general partner interest and NEIC Operating
Partnership, L.P. holds a 99% limited
partner interest in New England Funds, L.P.
(b) New England Funds Management, L.P. (DE) NEF
Corporation holds a 1% general partner interest and
NEIC Operating Partnership, L.P. holds a 99%
limited partner interest in New England Funds
Management, L.P.
(10) New England Funds Service Corporation
(11) AEW Capital Management, Inc. (DE)
(a) AEW Securities, L.P. (DE) AEW Capital Management, Inc. holds
a 1% general partnership and AEW Capital Management, L.P.
holds a 99% limited partnership interest in AEW Securities,
L.P.
ii. Nvest Associates, Inc.
iii. Snyder Capital Management, Inc.
(1) Snyder Capital Management, L.P. NEIC Operating
Partnership holds a 99.5% limited partnership
interest and Snyder Capital Management Inc. holds a
0.5% general partnership interest.
iv. Jurika & Voyles, Inc.
(1) Jurika & Voyles, L.P NEIC Operating Partnership,
L.P. holds a 99% limited partnership interest and
Jurika & Voyles, Inc. holds a 1% general partnership
interest.
v. Capital Growth Management, L.P. (DE)
NEIC Operating Partnership, L.P. holds a 50% limited partner
interest in Capital Growth Management, L.P.
vi. Nvest Partnerships, LLC ( )
C-11
<PAGE>
vii. AEW Capital Management L.P. (DE)
New England Investment Companies, L.P. holds a 99% limited partner
interest and AEW Capital Management, Inc. holds a 1% general
partner interest in AEW Capital Management, L.P.
(1) AEW II Corporation ( )
(2) AEW Partners III, Inc. ( )
(3) AEW TSF, Inc. ( )
(4) AEW Exchange Management, LLC
(5) AEWPN, LLC ( )
(6) AEW Investment Group, Inc. (MA)
(a) Copley Public Partnership Holding, L.P. (MA)
AEW Investment Group, Inc. holds a 25% general partnership
interest and AEW Capital Management, L.P. holds a 75%
limited partnership interest in Copley Public Partnership
Holding, L.P.
(b) AEW Management and Advisors L.P. (MA)
AEW Investment Group, Inc. holds a 25% general partnership
interest and AEW Capital Management, L.P. holds a 75% limited
partnership interest in AEW Management and Advisors L.P.
ii. AEW Real Estate Advisors, Inc. (MA)
1. AEW Advisors, Inc. (MA)
2. Copley Properties Company, Inc. (MA)
3. Copley Properties Company II, Inc. (MA)
4. Copley Properties Company III, Inc. (MA)
5. Fourth Copley Corp. (MA)
6. Fifth Copley Corp. (MA)
7. Sixth Copley Corp. (MA)
8. Seventh Copley Corp. (MA).
9. Eighth Copley Corp. (MA).
10. First Income Corp. (MA).
11. Second Income Corp. (MA).
12. Third Income Corp. (MA).
13. Fourth Income Corp. (MA).
14. Third Singleton Corp. (MA).
15. Fourth Singleton Corp. (MA)
16. Fifth Singleton Corp. (MA)
17. Sixth Singleton Corp. (MA).
18. BCOP Associates L.P. (MA)
AEW Real Estate Advisors, Inc. holds a 1% general
partner interest in BCOP Associates L.P.
ii. CREA Western Investors I, Inc. (MA)
1. CREA Western Investors I, L.P. (DE)
CREA Western Investors I, Inc. holds a 24.28% general
partnership interest and Copley Public Partnership Holding,
L.P. holds a 57.62% limited partnership interest in CREA
Western Investors I, L.P.
iii. CREA Investors Santa Fe Springs, Inc. (MA)
(7) Copley Public Partnership Holding, L.P. (DE)
AEW Capital Management, L.P. holds a 75% limited partner interest and
AEW Investment Group, Inc. holds a 25% general partner interest and
CREA Western Investors I, L.P holds a 57.62% Limited Partnership
interest.
C-12
<PAGE>
(8) AEW Real Estate Advisors, Limited Partnership (MA)
AEW Real Estate Advisors, Inc. holds a 25% general partnership interest
and AEW Capital Management, L.P. holds a 75% limited partnership
interest in AEW Real Estate Advisors, Limited Partnership.
(9) AEW Hotel Investment Corporation (MA)
(a.) AEW Hotel Investment, Limited Partnership (MA)
AEW Hotel Investment Corporation holds a 1% general
partnership interest and AEW Capital Management, L.P. holds a
99% limited partnership interest in AEW Hotel Investment,
Limited Partnership.
(10) Aldrich Eastman Global Investment Strategies, LLC (DE)
AEW Capital Management, L.P. holds a 25% membership interest and an
unaffiliated third party holds a 75% membership interest in Aldrich
Eastman Global Investment Strategies, LLC.
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 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.
5) Metropolitan owns, via its subsidiary, AFORE Genesis Metropolitan S.A. de
C.V., approximately 61.7% of SIEFORE Genesis S.A. de C.V., a mutual fund.
6) 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.
7) 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 ("MET
P&C"), serves as the attorney-in-fact and manages the association.
8) Metropolitan directly owns 100% of the non-voting preferred stock of Nathan
and Lewis Associates Ohio, Incorporated, an insurance agency. 100% of the voting
common stock of this company is held by an individual who has agreed to vote
such shares at the direction of N.L. Holding Corp. (DEL), an indirect wholly
owned subsidiary of Metropolitan.
C-13
<PAGE>
9) 100% of the capital stock of Hereford Insurance Agency of Oklahoma, Inc.
(OK) is owned by an officer. New England Life Insurance Company controls the
issuance of additional stock and has certain rights to purchase such officer's
shares.
10) 100% of the capital stock of Fairfield Insurance Agency of Texas, Inc. (TX)
is owned by an officer. New England Life Insurance Company controls the
issuance of additional stock and has certain rights to purchase such officer's
shares.
11) 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 in each MILP. The MILPs have various's ownership
interests in certain companies. The various MILPs own, directly or indirectly,
100% of the voting stock of the following company: Coating Technologies
International, Inc.
NOTE: THE METROPOLITAN LIFE ORGANIZATIONAL CHART DOES NOT INCLUDE REAL ESTATE
JOINT VENTURES AND PARTNERSHIPS OF WHICH METROPOLITAN LIFE AND/OR ITS
SUBSIDIARIES IS AN INVESTMENT PARTNER. IN ADDITION, CERTAIN INACTIVE
SUBSIDIARIES HAVE ALSO BEEN OMITTED.
C-14
<PAGE>
Item 25. 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 whcih 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 of 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, 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
Services, Inc. and each person who has been, is, or may hereafter be an office,
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 statments 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 an action, suit or proceeding) is asserted against the
Registration 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-15
<PAGE>
Item 26. 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 Research & Investment Adviser Various investment advisory Boston, MA
Management Company clients
Arpiarian, Tanya None
Vice President
Bangs, Linda L. None
Vice President
Barnwell, Amy F.
Vice President
Beaudry, Matthew F. Senior Vice President State Street Research Investment Services, Inc. Boston, MA
Senior 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 Financial Trust Boston, MA
President 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
Director State Street Research Investment Services, Inc. Boston, MA
Director and Chairman Boston Private Bank & Trust Co. Boston, MA
of Exec. Comm.
Vice President State Street Research Income Trust Boston, MA
Vice President State Street Research Securities Trust Boston, MA
President and Director Christian Camps & Conferences, Inc. Boston, MA
Chairman and Trustee Gordon College Wenham, MA
Bochman, Kathleen None
Vice President
Borzilleri, John None
Senior Vice President
(Vice President
until 4/98)
Bray, Michael J. None
Senior Vice President
(Vice President
until 4/98)
Brezinski, Karen None
Vice President
Brown, Susan H. None
Vice President
Buffum, Andrea L. None
Vice President
Burbank, John F. None
Senior Vice President
Cabrera, Jesus A. Vice President State Street Research Capital Trust Boston, MA
Senior Vice President
(Vice President
until 4/98)
</TABLE>
C-16
<PAGE>
<TABLE>
<CAPTION>
Principal business
Name Connection Organization address of organization
- ----- ---------- ------------ -----------------------
<S> <C> <C> <C>
Calame, Mara D. Vice President and State Street Research Energy, Inc. Boston, MA
Vice President and Assistant Counsel
Assistant Secretary
Canavan, Joseph W. Assistant Treasurer State Street Research Equity Trust Boston, MA
Senior Vice President Assistant Treasurer State Street Research Financial Trust Boston, MA
(Vice President Assistant Treasurer State Street Research Income Trust Boston, MA
until 4/98) Assistant Treasurer State Street Research Money Market Trust Boston, MA
Assistant Treasurer State Street Research Tax-Exempt Trust Boston, MA
Assistant Treasurer State Street Research Capital Trust Boston, MA
Assistant Treasurer State Street Research Exchange Trust Boston, MA
Assistant Treasurer State Street Research Growth Trust Boston, MA
Assistant Treasurer State Street Research Master Investment Trust Boston, MA
Assistant Treasurer State Street Research Securities Trust Boston, MA
Assistant Treasurer State Street Research Portfolios, Inc. Boston, MA
Carstens, Linda C. Vice President State Street Research Investment Boston, MA
Vice President Services, Inc.
Clifford, Jr., Paul J. Vice President State Street Research Tax-Exempt Trust Boston, MA
Senior Vice President
Coleman, Thomas J. None
Vice President
Cullen, Terrence J. Vice President Keystone-Evergreen Boston, MA
Vice President and Counsel
and Assistant (until 2/98)
Secretary Vice President and State Street Research Investment Services, Inc. Boston, MA
Assistant Counsel
D'Vari, Ronald None
Senior Vice President
Depp, Maureen G. Vice President Wellington Management Company Boston, MA
Vice President (until 9/97)
DeVeuve, Donald None
Vice President
DiFazio, Susan M.W. Senior Vice President State Street Research Investment Services, Inc. Boston, MA
Vice President
Dillman, Thomas J. Vice President State Street Research Securities Trust Boston, MA
Senior Vice President
Drake, Susan W. None
Vice President
Dudley, Catherine Senior Portfolio Manager Chancellor Capital Management Boston, MA
Senior Vice President (until 2/98)
Duggan, Peter J. None
Senior Vice President
Ebel, Bruce A. Vice President Loomis, Sayles & Company, L.P. Chicago, IL
Senior Vice President (since 3/99)
Egel, David J. Vice President Sun Life of Canada Boston, MA
Vice President (since 4/98)
Vice President State Street Research Investment Services, Inc. Boston, MA
Even, Karen K. None
Vice President
Fazo, Steven A. None
Vice President
Federoff, Alex G. None
Vice President
Fee, Richard E. Vice President State Street Research Investment Services, Inc. Boston, MA
Vice President
Feliciano, Rosalina None
Vice President
Ficco, Bonnie A. None
Vice President
Fochtman, Jr., Leo None
Vice President
</TABLE>
C-17
<PAGE>
<TABLE>
<CAPTION>
Principal business
Name Connection Organization address of organization
- ----- ---------- ------------ -----------------------
<S> <C> <C> <C>
Gardner, Michael D. None
Senior Vice President
Geer, Bartlett R. Vice President State Street Research Equity Trust Boston, MA
Senior Vice President Vice President State Street Research Income Trust Boston, MA
Vice President State Street Research Securities Trust Boston, MA
Giroux, June M. None
Vice President
Goodman, Stephanie B. Vice President State Street Research Investment Services, Inc. Boston, MA
Vice President
Govoni, Electra None
Vice President
Grace, Evan None
Vice President
Granger, Allison None
Vice President
Haggerty, Bryan D. 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
Hasson, Ira P. Vice President State Street Research Investment Services, Inc. Boston, MA
Vice President
Haverty, Jr., Lawrence J. Vice President State Street Research Capital Trust Boston, MA
Senior Vice President
Heineke, George R. None
Vice President
Hickman, Joanne Managing Director Zurich Investment Management Chicago, IL
Senior Vice President (until 1/98)
Senior Vice President State Street Research Investment Services, Inc. Boston, MA
Huang, Jesse C. None
Vice President
Jackson, Jr., Vice President State Street Research Equity Trust Boston, MA
F. Gardner Trustee Certain trusts of related and
Senior Vice President non-related individuals
Trustee and Chairman of the Vincent Memorial Hospital Boston, MA
Board
Jamieson, Frederick H. Vice President and
Senior Vice President Asst. Treasurer State Street Research Investment Services, Inc. Boston, MA
Vice President and Asst.
Treasurer SSRM Holdings, Inc. Boston, MA
Jodka, Richard Portfolio Manager Frontier Capital Management Boston, MA
Senior Vice President (until 1/98)
Vice President State Street Research Capital Trust Boston, MA
Joseph, Robert I. None
Vice President
</TABLE>
C-18
<PAGE>
<TABLE>
<CAPTION>
Principal business
Name Connection Organization address of organization
- ----- ---------- ------------ -----------------------
<S> <C> <C> <C>
Kallis, John H. Vice President State Street Research Financial Trust Boston, MA
Senior Vice President Vice President State Street Research Income Trust Boston, MA
Vice President State Street Research Money Market Trust Boston, MA
Vice President State Street Research Tax-Exempt Trust Boston, MA
Vice President State Street Research Securities Trust Boston, MA
Trustee 705 Realty Trust Washington, D.C.
Kasper, M. Katherine Vice President State Street Research Investment Services, Inc. Boston, MA
Vice President
Kern, Stephen None
Vice President
Kiessling, Dyann H. Vice President State Street Research Money Market Trust Boston, MA
Vice President
Kluiber, Rudolph K. Vice President State Street Research Capital Trust Boston, MA
Senior Vice President
(Vice President
until 4/98)
Kuhn, Stephen P. None
Vice President
Langholm, Knut Director State Street Research Luxembourg
Senior Vice President
Leary, Eileen M. None
Vice President
Lomasney, Mary T. None
Vice President
Marinella, Mark A. Portfolio Manager STW Fixed Income Management, Ltd. Boston, MA
Senior Vice President (Until 8/98)
Markel, Gregory S. None
Vice President
Maurer, Jacqueline J. None
Vice President
</TABLE>
C-19
<PAGE>
<TABLE>
<CAPTION>
Principal business
Name Connection Organization address of organization
- ----- ---------- ------------ -----------------------
<S> <C> <C> <C>
McKown, Elizabeth Vice President State Street Research Investment Services, Inc. Boston, MA
Vice President
McNamara, III, Francis J. Executive Vice President, State Street Research Investment Services, Inc. Boston, MA
Executive Vice Clerk and General Counsel
President, Secretary Secretary and General Counsel State Street Research Master Investment Trust Boston, MA
and General Counsel Secretary and General Counsel State Street Research Capital Trust Boston, MA
Secretary and General Counsel State Street Research Exchange Trust Boston, MA
Secretary and General Counsel State Street Research Growth Trust Boston, MA
Secretary and General Counsel State Street Research Securities Trust Boston, MA
Secretary and General Counsel State Street Research Equity Trust Boston, MA
Secretary and General Counsel State Street Research Financial Trust Boston, MA
Secretary and General Counsel State Street Research Income Trust Boston, MA
Secretary and General Counsel State Street Research Money Market Trust Boston, MA
Secretary and General Counsel State Street Research Tax-Exempt Trust Boston, MA
Secretary and General Counsel SSRM Holdings, Inc. Boston, MA
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
Treasurer, Chief Treasurer State Street Research Money Market Trust Boston, MA
Financial Officer and Treasurer State Street Research Tax-Exempt Trust Boston, MA
Chief Administrative Treasurer State Street Research Capital Trust Boston, MA
Officer 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 State Street Research Investment Services, Inc. Boston, MA
President, Treasurer and
Chief Financial Officer
Director Metric Holdings, Inc. San Francisco, CA
Director Certain wholly-owned subsidiaries
of Metric Holdings, Inc.
Treasurer and Chief SSRM Holdings, Inc. Boston, MA
Financial Officer
Director State Street Research Luxembourg
Milder, Judith J. None
Senior Vice President
Miller, Joan D. Senior Vice President State Street Research Investment Services, Inc. Boston, MA
Senior Vice President
</TABLE>
C-20
<PAGE>
<TABLE>
<CAPTION>
Principal business
Name Connection Organization address of organization
- ----- ---------- ------------ -----------------------
<S> <C> <C> <C>
Moore, Jr., Thomas P. Vice President State Street Research Equity Trust Boston, MA
Senior Vice Director Hibernia Savings Bank Quincy, MA
President Governor on the Board Association for Investment Management Charlottesville, VA
of Governors and Research
Morey, Andrew None
Vice President
Mulligan, JoAnne C. None
Senior Vice President
Orr, Stephen C. Member Technology Analysts of Boston Boston, MA
Vice President Member Electro-Science Analysts (of NYC) New York, NY
Paddon, Steven W. None
Vice President
Pannell, James C. None
Executive Vice President
Peters, Kim M. Vice President State Street Research Securities Trust Boston, MA
Senior Vice President
Pierce, James D. None
Vice President
Poritzky, Dean E. None
Vice President
Pyle, David J. None
Vice President
Ragsdale, E.K. Easton Vice President State Street Research Financial Trust Boston, MA
Senior Vice President
Ransom, Clifford Director of NatWest Markets
Vice President Special Situations
Rawlins, Jeffrey A. None
Senior Vice President
Rice III, Daniel Joseph Vice President State Street Research Equity Trust Boston, MA
Senior Vice President
</TABLE>
C-21
<PAGE>
<TABLE>
<CAPTION>
Principal business
Name Connection Organization address of organization
- ----- ---------- ------------ -----------------------
<S> <C> <C> <C>
Romich, Douglas A. Assistant Treasurer State Street Research Equity Trust Boston, MA
Senior Vice President Assistant Treasurer State Street Research Financial Trust Boston, MA
(Vice President Assistant Treasurer State Street Research Income Trust Boston, MA
until 4/98) Assistant Treasurer State Street Research Money Market Trust Boston, MA
Assistant Treasurer State Street Research Tax-Exempt Trust Boston, MA
Assistant Treasurer State Street Research Capital Trust Boston, MA
Assistant Treasurer State Street Research Exchange Trust Boston, MA
Assistant Treasurer State Street Research Growth Trust Boston, MA
Assistant Treasurer State Street Research Master Investment Trust Boston, MA
Assistant Treasurer State Street Research Securities Trust Boston, MA
Ryan, Michael J. Vice President Delaware Management Philadelphia, PA
Senior Vice President (until 1/98)
Sanderson, Derek Senior Vice President Freedom Capital Management Boston, MA
Senior Vice President (until 10/97)
Saperstone, Paul None
Vice President
Schrage, Michael None
Vice President
Shaver, Jr. C. Troy President, Chief State Street Research Investment Services, Inc. Boston, MA
Executive Vice Executive Officer and
President Executive Vice President
Shean, William G. None
Vice President
Shively, Thomas A. Vice President State Street Research Financial Trust Boston, MA
Director and Vice President State Street Research Money Market Trust Boston, MA
Executive Vice Vice President State Street Research Tax-Exempt Trust Boston, MA
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
Simi, Susan None
Vice President
Stambaugh, Kenneth None
Vice President
(Assistant Vice
President until 9/97)
Strelow, Dan R. None
Senior Vice President
</TABLE>
C-22
<PAGE>
<TABLE>
<CAPTION>
Principal business
Name Connection Organization address of organization
- ----- ---------- ------------ -----------------------
<S> <C> <C> <C>
Stolberg, Thomas None
Vice President
Swanson, Amy McDermott None
Senior Vice President
Tice, Robyn S. None
Vice President
Trebino, Anne M. Vice President SSRM Holdings, Inc. Boston, MA
Senior Vice President
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 Director
Chairman, President, Chief State Street Research Tax-Exempt Trust Boston, MA
Executive Officer and Trustee
Chairman and Director State Street Research Investment Services, Inc. Boston, MA
(President and Chief Executive
Officer until 2/96)
Chairman and Director Metric Holdings, Inc. San Francisco, CA
Director and Officer Certain wholly-owned subsidiaries
of Metric Holdings, Inc.
Chairman of the Board MetLife Securities, Inc. New York, NY
and Director (until 1/97)
President, Chief Executive SSRM Holdings, Inc. Boston, MA
Officer and Director
Director Colgate University Hamilton, NY
Director State Street Research Luxembourg
Chairman and Director SSR Realty Advisors, Inc. San Francisco, CA
</TABLE>
C-23
<PAGE>
<TABLE>
<CAPTION>
Principal business
Name Connection Organization address of organization
- ----- ---------- ------------ -----------------------
<S> <C> <C> <C>
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
Walsh, Denis J. None
Vice President
Walsh, Tucker None
Vice President
Watts, Evan D., Jr. Vice President State Street Research Investment Services, Inc. Boston, MA
Vice President
Weiss, James M. Vice President State Street Research Exchange Trust Boston, MA
Executive Vice President Vice President State Street Research Financial Trust Boston, MA
(Senior Vice President) Vice President State Street Research Growth Trust Boston, MA
until 6/98) Vice President State Street Research Securities Trust Boston, MA
Vice President State Street Research Capital Trust Boston, MA
Vice President State Street Research Equity Trust Boston, MA
Vice President State Street Research Income Trust Boston, MA
Vice President State Street Research Master Investment Trust Boston, MA
Welch, Timothy M. None
Vice President
Westvold, Vice President State Street Research Securities Trust Boston, MA
Elizabeth McCombs
Senior Vice President
Wilkins, Kevin Senior Vice President State Street Research Investment Boston, MA
Senior Vice President (Vice President until 9/98) Services, Inc.
(Vice President
until 9/98)
Wilson, John T. Vice President State Street Research Equity Trust Boston, MA
Senior Vice President Vice President State Street Research Master Investment Trust Boston, MA
(Vice President
until 4/98)
</TABLE>
C-24
<PAGE>
<TABLE>
<CAPTION>
Principal business
Name Connection Organization address of organization
- ----- ---------- ------------ -----------------------
<S> <C> <C> <C>
Wing, Darman A. Senior Vice President and State Street Research Investment Services, Inc. Boston, MA
Senior Vice President, Asst. Clerk
Assistant Secretary Assistant Secretary and State Street Research Capital Trust Boston, MA
and Assistant Assistant General Counsel
General Counsel Assistant Secretary and State Street Research Exchange Trust Boston, MA
(Vice President Assistant General Counsel
until 4/98) Assistant Secretary and State Street Research Growth Trust Boston, MA
Assistant General Counsel
Assistant Secretary and State Street Research Master Investment Trust Boston, MA
Assistant General Counsel
Assistant Secretary and State Street Research Securities Trust Boston, MA
Assistant General Counsel
Assistant Secretary and State Street Research Equity Trust Boston, MA
Assistant General Counsel
Assistant Secretary and State Street Research Financial Trust Boston, MA
Assistant General Counsel
Assistant Secretary and State Street Research Income Trust Boston, MA
Assistant General Counsel
Assistant Secretary and State Street Research Money Market Trust Boston, MA
Assistant General Counsel
Assistant Secretary and State Street Research Tax-Exempt Trust Boston, MA
Assistant General Counsel
Assistant Secretary and SSRM Holdings, Inc. Boston, MA
Assistant General Counsel
Woodbury, Robert S. None
Vice President
Woodworth, Jr., Kennard Vice President State Street Research Exchange Trust Boston, MA
Senior Vice Vice President State Street Research Growth Trust Boston, MA
President Vice President State Street Research Securities Trust Boston, MA
Wu, Norman N. Partner Atlantic-Acton Realty Framingham, MA
Senior Vice President Director Bond Analysts Society of Boston Boston, MA
Zuger, Peter A. Vice President State Street Research Equity Trust Boston, MA
Senior Vice Portfolio Manager American Century
President (until 9/98) Investment Management
</TABLE>
C-25
<PAGE>
Item 27. 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 Master Investment Trust, State Street
Research Growth Trust, State Street Research Securities Trust, State Street
Research Portfolios, Inc. and State Street Research Institutional Funds.
(b) Directors and Officers of State Street Research Investment Services,
Inc. are as follows:
<TABLE>
<CAPTION>
(1) (2) (3)
Positions
Name and Principal and Offices Positions and Offices
Business Address with Underwriter with Fund
- ------------------ ---------------- ---------------------
<S> <C> <C>
Ralph F. Verni Chairman of the Chairman of the
One Financial Center Board Board, President,
Boston, MA 02111 and Director Chief Executive Officer and
Trustee
Peter C. Bennett Director Vice President
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, Chief None
One Financial Center Executive Officer and
Boston, MA 02111 Executive Vice President
Francis J. McNamara, III Executive Vice Secretary
One Financial Center President, General Counsel
Boston, MA 02111 and Clerk
Matthew F. Beaudry Senior Vice President None
One Financial Center
Boston, MA 02111
Peter Borghi Senior Vice President None
One Financial Center
Boston, MA 02111
</TABLE>
C-26
<PAGE>
<TABLE>
<CAPTION>
(1) (2) (3)
Positions
Name and Principal and Offices Positions and Offices
Business Address with Underwriter with Fund
- ------------------ ---------------- ---------------------
<S> <C> <C>
Paul V. Daly Senior Vice None
One Financial Center President
Boston, MA 02111
Susan M.W. DiFazio Senior Vice None
One Financial Center President
Boston, MA 02111
Joanne Hickman Senior Vice President None
One Financial Center
Boston, MA 02111
Russell A. LaBrasca Senior Vice President None
One Financial Center
Boston, MA 02111
Joan D. Miller Senior None
One Financial Center Vice President
Boston, MA 02111
Kevin Wilkins Senior Vice President None
One Financial Center
Boston, MA 02111
Darman A. Wing Senior Vice Assistant Secretary
One Financial Center President, Assistant General
Boston, MA 02111 Counsel and Assistant Clerk
Amy F. Barnwell Vice President None
One Financial Center
Boston, MA 02111
Linda C. Carstens Vice President None
One Financial Center
Boston, MA 02111
Terrence J. Cullen Vice President None
One Financial Center and Counsel
Boston, MA 02111
David J. Egel Vice President None
One Financial Center
Boston, MA 02111
Richard Fee Vice President None
One Financial Center
Boston, MA 02111
</TABLE>
C-27
<PAGE>
<TABLE>
<CAPTION>
(1) (2) (3)
Positions
Name and Principal and Offices Positions and Offices
Business Address with Underwriter with Fund
- ------------------ ---------------- ---------------------
<S> <C> <C>
Stephanie B. Goodman Vice President None
One Financial Center
Boston, MA 02111
Ira P. Hasson Vice President None
One Financial Center
Boston, MA 02111
Frederick H. Jamieson Vice President None
One Financial Center and Assistant
Boston, MA 02111 Treasurer
M. Katherine Kasper Vice President None
One Financial Center
Boston, MA 02111
Elizabeth G. McKown Vice President None
One Financial Center
Boston, MA 02111
Amy L. Simmons Vice President Assistant Secretary
One Financial Center
Boston, MA 02111
</TABLE>
C-28
<PAGE>
Item 27. 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 Master Investment Trust, State Street
Research Growth Trust, State Street Research Securities Trust, State Street
Research Portfolios, Inc. and State Street Research Institutional Funds.
(b) Directors and Officers of State Street Research Investment Services,
Inc. are as follows:
<TABLE>
<CAPTION>
(1) (2) (3)
Positions
Name and Principal and Offices Positions and Offices
Business Address with Underwriter with Fund
- ------------------ ---------------- ---------------------
<S> <C> <C>
Ralph F. Verni Chairman of the Chairman of the
One Financial Center Board Board, President,
Boston, MA 02111 and Director Chief Executive Officer and
Trustee
Peter C. Bennett Director Vice President
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, Chief None
One Financial Center Executive Officer and
Boston, MA 02111 Executive Vice President
Francis J. McNamara, III Executive Vice Secretary
One Financial Center President, General Counsel
Boston, MA 02111 and Clerk
Matthew F. Beaudry Senior Vice President None
One Financial Center
Boston, MA 02111
Peter Borghi Senior Vice President None
One Financial Center
Boston, MA 02111
</TABLE>
C-29
<PAGE>
<TABLE>
<CAPTION>
(1) (2) (3)
Positions
Name and Principal and Offices Positions and Offices
Business Address with Underwriter with Fund
- ------------------ ---------------- ---------------------
<S> <C> <C>
Paul V. Daly Senior Vice None
One Financial Center President
Boston, MA 02111
Susan M.W. DiFazio Senior Vice None
One Financial Center President
Boston, MA 02111
Joanne Hickman Senior Vice President None
One Financial Center
Boston, MA 02111
Russell A. LaBrasca Senior Vice President None
One Financial Center
Boston, MA 02111
Joan D. Miller Senior None
One Financial Center Vice President
Boston, MA 02111
Kevin Wilkins Senior Vice President None
One Financial Center
Boston, MA 02111
Darman A. Wing Senior Vice Assistant Secretary
One Financial Center President, Assistant General
Boston, MA 02111 Counsel and Assistant Clerk
Amy F. Barnwell Vice President None
One Financial Center
Boston, MA 02111
Linda C. Carstens Vice President None
One Financial Center
Boston, MA 02111
Terrence J. Cullen Vice President None
One Financial Center and Counsel
Boston, MA 02111
David J. Egel Vice President None
One Financial Center
Boston, MA 02111
Richard Fee Vice President None
One Financial Center
Boston, MA 02111
</TABLE>
C-30
<PAGE>
<TABLE>
<CAPTION>
(1) (2) (3)
Positions
Name and Principal and Offices Positions and Offices
Business Address with Underwriter with Fund
- ------------------ ---------------- ---------------------
<S> <C> <C>
Stephanie B. Goodman Vice President None
One Financial Center
Boston, MA 02111
Ira P. Hasson Vice President None
One Financial Center
Boston, MA 02111
Frederick H. Jamieson Vice President None
One Financial Center and Assistant
Boston, MA 02111 Treasurer
M. Katherine Kasper Vice President None
One Financial Center
Boston, MA 02111
Elizabeth G. McKown Vice President None
One Financial Center
Boston, MA 02111
Amy L. Simmons Vice President Assistant Secretary
One Financial Center
Boston, MA 02111
</TABLE>
C-31
<PAGE>
Item 28. Location of Accounts and Records
Gerard P. Maus
State Street Research & Management Company
One Financial Center
Boston, MA 02111
Item 29. Management Services
Under a Shareholders' Administrative Services Agreement between the
Registrant 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 series of the
Registrant and received the amounts set forth below:
<TABLE>
<CAPTION>
Year-end Year-end Year-end
Fund 3/31/97 3/31/98 3/31/99
- ---- ------- ------- -------
<S> <C> <C> <C>
Money Market $118,671 $87,520 Estimated
$235,638
</TABLE>
Item 30. 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-32
<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-33
<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 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. 15 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 30th day of July, 1999.
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:
<TABLE>
<CAPTION>
Signature Capacity
- --------- --------
<S> <C>
* Trustee and Chief Executive
- ------------------------------------ Officer (principal executive officer)
Ralph F. Verni
* Treasurer (principal financial and
- ------------------------------------ accounting officer)
Gerard P. Maus
* Trustee
- ------------------------------------
Bruce R. Bond
* Trustee
- ------------------------------------
Steve A. Garban
* Trustee
- ------------------------------------
Malcolm T. Hokpkins
<PAGE>
* Trustee
- ------------------------------------
Dean O. Morton
* Trustee
- ------------------------------------
Susan M. Phillips
* Trustee
- ------------------------------------
Toby Rosenblatt
* Trustee
- ------------------------------------
Michael S. Scott Morton
</TABLE>
*By: /s/ Francis J. McNamara, III
------------------------------
Francis J. McNamara, III,
Attorney-in-Fact under Powers of
Attorney filed July 3, 1997
and under Powers of Attorney
filed herein.
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. 15 [X]
and/or
REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 19 [X]
--------------------
STATE STREET RESEARCH MONEY MARKET TRUST
(Exact Name of Registrant as Specified in Declaration of Trust)
--------------------
EXHIBITS
================================================================================
<PAGE>
INDEX TO EXHIBITS
(1)(c) Amendment No. 4 to Second Amended and Restated Master Trust
Agreement
(8)(b) Data Access Services Addendum to Custodian Contract
(11) Consent of PricewaterhouseCoopers LLP
15(c) Rule 12b-1 Plan for Class B(1) Shares
(17)(b) Addendum to First Amended and Restated Multiple Class Expense
Allocation Plan
(18)(b) Power of Attorney for Susan M. Phillips
(18)(c) Power of Attorney for Bruce R. Bond
(19) Certificate of Board Resolution Respecting Powers of Attorney
STATE STREET RESEARCH MONEY MARKET TRUST
Amendment No. 4 to
Second Amended and Restated
Master Trust Agreement
INSTRUMENT OF AMENDMENT
Pursuant to Article VII, Section 7.3 of the Second Amended and Restated
Master Trust Agreement of the State Street Research Money Market Trust (the
"Trust") dated June 1, 1993 (the "Master Trust Agreement"), as heretofore
amended, the following is added immediately prior to the last sentence of
Article V, Section 5.1:
"Execution of a proxy by a person or organization, which has
been authorized to do so by a Shareholder pursuant to telephonic
or electronically transmitted instructions, shall constitute
execution of such proxy by or on behalf of such Shareholder."
This Amendment shall be effective as of October 22, 1997.
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
-------------------------
Francis J. McNamara, III
Secretary
DATA ACCESS SERVICES ADDENDUM TO CUSTODIAN AGREEMENT
----------------------------------------------------
AGREEMENT between each fund listed on Appendix A, (individually a "Fund"
and collectively, the "Funds") as amended from time to time, and State Street
Bank and Trust Company ("State Street").
PREAMBLE
WHEREAS, State Street has been appointed as custodian of certain assets
of each Fund pursuant to a certain Custodian Agreement (the "Custodian
Agreement") for each of the respective Funds;
WHEREAS, State Street has developed and utilizes proprietary accounting
and other systems, including State Street's proprietary Multicurrency HORIZON(R)
Accounting System, in its role as custodian of each Fund, and maintains certain
Fund-related data ("Fund Data") in databases under the control and ownership of
State Street (the "Data Access Services"); and
WHEREAS, State Street makes available to each Fund certain Data Access
Services solely for the benefit of the Fund, and intends to provide additional
services, consistent with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and for other good and valuable consideration, the parties
agree as follows:
1. SYSTEM AND DATA ACCESS SERVICES
a. System. Subject to the terms and conditions of this Agreement, State
Street hereby agrees to provide each Fund with access to State Street's
Multicurrency HORIZON(R) Accounting System and the other information systems
(collectively, the "System") as described in Attachment A, on a remote basis for
the purpose of obtaining reports, solely on computer hardware, system software
and telecommunication links, as listed in Attachment B (the "Designated
Configuration") of the Fund, or certain third parties approved by State Street
that serve as investment advisors or investment managers (the "Investment
Advisor") or independent auditors (the "Independent Auditors") of a Fund and
solely with respect to the Fund or on any designated substitute or back-up
equipment configuration with State Street's written consent, such consent not to
be unreasonably withheld.
b. Data Access Services. State Street agrees to make available to each
Fund the Data Access Services subject to the terms and conditions of this
Agreement and data access operating standards and procedures as may be issued by
State Street from time to time. The ability of each Fund to originate electronic
instructions to State Street on behalf of each Fund in order to (i) effect the
transfer or movement of cash or securities held under custody by State Street or
(ii) transmit accounting or other information (such transactions are referred to
herein as "Client
<PAGE>
Originated Electronic Financial Instructions"), and (iii) access data for the
purpose of reporting and analysis, shall be deemed to be Data Access Services
for purposes of this Agreement.
c. Additional Services. State Street may from time to time agree to make
available to a Fund additional Systems that are not described in the attachments
to this Agreement. In the absence of any other written agreement concerning such
additional systems, the term "System" shall include, and this Agreement shall
govern, a Fund's access to and use of any additional System made available by
State Street and/or accessed by the Fund.
2. NO USE OF THIRD PARTY SOFTWARE
State Street and each Fund acknowledge that in connection with the Data
Access Services provided under this Agreement, each Fund will have access,
through the Data Access Services, to Fund Data and to functions of State
Street's proprietary systems; provided, however that in no event will the Fund
have direct access to any third party systems-level software that retrieves data
for, stores data from, or otherwise supports the System.
3 . LIMITATION ON SCOPE OF USE
a. Designated Equipment: Designated Location. The System and the
Data Access Services shall be used and accessed solely on and through
the Designated Configuration at the offices of a Fund or the Investment
Advisor or Independent Auditor located in Boston, Massachusetts
("Designated Location").
b. Designated Configuration: Trained Personnel. State Street shall be
responsible for supplying, installing and maintaining the Designated
Configuration at the Designated Location. State Street and each Fund agree that
each will engage or retain the services of trained personnel to enable both
State Street and the Fund to perform their respective obligations under this
Agreement. State Street agrees to use commercially reasonable efforts to
maintain the System so that it remains serviceable, provided, however, that
State Street does not guarantee or assure uninterrupted remote access use of the
System.
c. Scope of Use. Each Fund will use the System and the Data Access
Services only for the processing of securities transactions, the keeping of
books of account for the Fund and accessing data for purposes of reporting and
analysis. Each Fund shall not, and shall cause its employees and agents not to
(i) permit any third party to use the System or the Data Access Services, (ii)
sell, rent, license or otherwise use the System or the Data Access Services in
the operation of a service bureau or for any purpose other than as expressly
authorized under this Agreement, (iii) use the System or the Data Access
Services for any fund, trust or other investment vehicle without the prior
written consent of State Street, (iv) allow access to the System or the Data
Access Services through terminals or any other computer or telecommunications
facilities located outside the Designated Locations, (v) allow or cause any
information (other than portfolio holdings, valuations of portfolio holdings,
and other information reasonably necessary for the management or distribution of
the assets of the Fund) transmitted from State Street's databases, including
data from third party sources, available through use of the
2
<PAGE>
System or the Data Access Services to be redistributed or retransmitted to
another computer, terminal or other device for other than use for or on behalf
of the Fund or (vi) modify the System in any way, including without limitation,
developing any software for or attaching any devices or computer programs to any
equipment, system, software or database which forms a part of or is resident on
the Designated Configuration.
d. Other Locations. Except in the event of an emergency or of a planned
System shutdown, each Fund's access to services performed by the System or to
Data Access Services at the Designated Location may be transferred to a
different location only upon the prior written consent of State Street. In the
event of an emergency or System shutdown, each Fund may use any back-up site
included in the Designated Configuration or any other back-up site agreed to by
State Street, which agreement will not be unreasonably withheld. Each Fund may
secure from State Street the right to access the System or the Data Access
Services through computer and telecommunications facilities or devices complying
with the Designated Configuration at additional locations only upon the prior
written consent of State Street and on terms to be mutually agreed upon by the
parties.
e. Title. Title and all ownership and proprietary rights to the System,
including any enhancements or modifications thereto, whether or not made by
State Street, are and shall remain with State Street.
f. No Modification. Without the prior written consent of State Street, a
Fund shall not modify, enhance or otherwise create derivative works based upon
the System, nor shall the Fund reverse engineer, decompile or otherwise attempt
to secure the source code for all or any part of the System.
g. Security Procedures. Each Fund shall comply with data access operating
standards and procedures and with user identification or other password control
requirements and other security procedures as may be issued from time to time by
State Street for use of the System on a remote basis and to access the Data
Access Services. Each Fund shall have access only to the Fund Data and
authorized transactions agreed upon from time to time by State Street and, upon
notice from State Street, the Fund shall discontinue remote use of the System
and access to Data Access Services for any security reasons cited by State
Street; provided, that, in such event, State Street shall, for a period not less
than 180 days (or such other shorter period specified by the Fund) after such
discontinuance, assume responsibility to provide accounting services under the
terms of the Custodian Agreement.
h. Inspections. State Street shall have the right to inspect the use of
the System and the Data Access Services by the Fund and the Investment Advisor
to ensure compliance with this Agreement. The on-site inspections shall be upon
prior written notice to Fund and the Investment Advisor and at reasonably
convenient times and frequencies so as not to result in an unreasonable
disruption of the Fund's or the Investment Advisor's business.
3
<PAGE>
4. PROPRIETARY INFORMATION
a. Proprietary Information. Each Fund acknowledges and State Street
represents that the System and the databases, computer programs, screen formats,
report formats, interactive design techniques, documentation and other
information made available to the Fund by State Street as part of the Data
Access Services and through the use of the System constitute copyrighted, trade
secret, or other proprietary information of substantial value to State Street.
Any and all such information provided by State Street to each Fund shall be
deemed proprietary and confidential information of State Street (hereinafter
"Proprietary Information"). Each Fund agrees that it will hold such Proprietary
Information in confidence and secure and protect it in a manner consistent with
its own procedures for the protection of its own confidential information and to
take appropriate action by instruction or agreement with its employees who are
permitted access to the Proprietary Information to satisfy its obligations
hereunder. Each Fund further acknowledges that State Street shall not be
required to provide the Investment Advisor or the Investment Auditor with access
to the System unless it has first received from the Investment Advisor of the
Investment Auditor an undertaking with respect to State Street's Proprietary
Information in the form of Attachment C and/or Attachment C-1 to this Agreement.
Each Fund shall use all commercially reasonable efforts to assist State Street
in identifying and preventing any unauthorized use, copying or disclosure of the
Proprietary Information or any portions thereof or any of the logic, formats or
designs contained therein.
b. Cooperation. Without limitation of the foregoing, each Fund shall
advise State Street immediately in the event the Fund learns or has reason to
believe that any person to whom the Fund has given access to the Proprietary
Information, or any portion thereof, has violated or intends to violate the
terms of this Agreement, and each Fund will, at its expense, co-operate with
State Street in seeking injunctive or other equitable relief in the name of the
Fund or State Street against any such person.
c. Injunctive Relief. Each Fund acknowledges that the disclosure of any
Proprietary Information, or of any information which at law or equity ought to
remain confidential, will immediately give rise to continuing irreparable injury
to State Street inadequately, compensable in damages at law. In addition, State
Street shall be entitled to obtain immediate injunctive relief against the
breach or threatened breach of any of the foregoing undertakings, in addition to
any other legal remedies which may be available.
d. Survival. The provisions of this Section 4 shall survive the
termination of this Agreement.
5. LIMITATION ON LIABILITY
a. Limitation on Amount and Time for Bringing Action. Each Fund agrees
any liability of State Street to the Fund or any third party arising out of
State Street's provision of Data Access Services or the System under this
Agreement shall be limited to the amount paid by the Fund for the preceding 24
months for such services. In no event shall State Street be liable to the Fund
or any other party for any special, indirect, punitive or consequential damages
even if
4
<PAGE>
advised of the possibility of such damages. No action, regardless of form,
arising out of this Agreement may be brought by the Fund more than two years
after the Fund has knowledge that the cause of action has arisen.
b. NO OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, ARE MADE BY STATE STREET. IN NO EVENT WILL STATE STREET BE
LIABLE TO THE FUND OR ANY OTHER PARTY FOR ANY CONSEQUENTIAL OR INCIDENTAL
DAMAGES WHICH MAY ARISE FROM THE FUND'S ACCESS TO THE SYSTEM OR USE OF
INFORMATION OBTAINED THEREBY.
c. Third-Party Data. Organizations from which State Street may obtain
certain data included in the System or the Data Access Services are solely
responsible for the contents of such data, and State Street shall have no
liability for claims arising out of the contents of such third-party data,
including, but not limited to, the accuracy thereof.
d. Regulatory Requirements. As between State Street and each Fund, the
Fund shall be solely responsible for the accuracy of any accounting statements
or reports produced using the Data Access Services and the System and the
conformity thereof with any requirements of law.
e. Force Majeure. Neither State Street or a Fund shall be liable for any
costs or damages due to delay or nonperformance under this Agreement arising out
of any cause or event beyond such party's control, including without limitation,
cessation of services hereunder or any damages resulting therefrom to the other
party, or the Fund as a result of work stoppage, power or other mechanical
failure, computer virus, natural disaster, governmental action, or communication
disruption.
6. INDEMNIFICATION
Each Fund agrees to indemnify and hold State Street harmless from any
loss, damage or expense including reasonable attorney's fees, (a "loss")
suffered by State Street arising from (i) the negligence or willful misconduct
in the use by the Fund of the Data Access Services or the System, including any
loss incurred by State Street resulting from a security breach at the Designated
Location or committed by the Fund's employees or agents or the Investment
Advisor or the Independent Auditor of the Fund and (ii) any loss resulting from
incorrect Client Originated Electronic Financial Instructions. State Street
shall be entitled to rely on the validity and authenticity of Client Originated
Electronic Financial Instructions without undertaking any further inquiry as
long as such instruction is undertaken in conformity with security procedures
established by State Street from time to time.
7. FEES
Fees and charges for the use of the System and the Data Access Services
and related payment terms shall be as set forth in the Custody Fee Schedule in
effect from time to time
5
<PAGE>
between the parties (the "Fee Schedule"). Any tariffs, duties or taxes imposed
or levied by any government or governmental agency by reason of the transactions
contemplated by this Agreement, including, without limitation, federal, state
and local taxes, use, value added and personal property taxes (other than
income, franchise or similar taxes which may be imposed or assessed against
State Street) shall be borne by each Fund. Any claimed exemption from such
tariffs, duties or taxes shall be supported by proper documentary evidence
delivered to State Street.
8. TRAINING, IMPLEMENTATION AND CONVERSION
a. Training. State Street agrees to provide training, at a designated
State Street training facility or at the Designated Location, to the Fund's
personnel in connection with the use of the System on the Designated
Configuration. Each Fund agrees that it will set aside, during regular business
hours or at other times agreed upon by both parties, sufficient time to enable
all operators of the System and the Data Access Services, designated by the
Fund, to receive the training offered by State Street pursuant to this
Agreement.
b. Installation and Conversion. State Street shall be responsible for the
technical installation and conversion ("Installation and Conversion") of the
Designated Configuration. Each Fund shall have the following responsibilities in
connection with Installation and Conversion of the System:
(i) The Fund shall be solely responsible for the timely acquisition and
maintenance of the hardware and software that attach to the
Designated Configuration in order to use the Data Access Services
at the Designated Location.
(ii) State Street and the Fund each agree that they will assign
qualified personnel to actively participate during the Installation
and Conversion phase of the System implementation to enable both
parties to perform their respective obligations under this
Agreement.
9. SUPPORT
During the term of this Agreement, State Street agrees to provide the
support services set out in Attachment D to this Agreement.
6
<PAGE>
10. TERM OF AGREEMENT
a. Term of Agreement. This Agreement shall become effective on the date
of its execution by State Street and shall remain in full force and effect until
terminated as herein provided.
b. Termination of Agreement. Any party may terminate this Agreement (i)
for any reason by giving the other parties at least one-hundred and eighty days'
prior written notice in the case of notice of termination by State Street to the
Fund or thirty days' notice in the case of notice from the Fund to State Street
of termination; or (ii) immediately for failure of the other party to comply
with any material term and condition of the Agreement by giving the other party
written notice of termination. In the event the Fund shall cease doing business,
shall become subject to proceedings under the bankruptcy laws (other than a
petition for reorganization or similar proceeding) or shall be adjudicated
bankrupt, this Agreement and the rights granted hereunder shall, at the option
of State Street, immediately terminate with notice to the Fund. Termination of
this Agreement with respect to any given Fund shall in no way affect the
continued validity of this Agreement with respect to any other Fund. This
Agreement shall in any event terminate as to any Fund within 90 days after the
termination of the Custodian Agreement applicable to such Fund.
c. Termination of the Right to Use. Upon termination of this Agreement
for any reason, any right to use the System and access to the Data Access
Services shall terminate and the Fund shall immediately cease use of the System
and the Data Access Services. Immediately upon termination of this Agreement for
any reason, the Fund shall return to State Street all copies of documentation
and other Proprietary Information in its possession; provided, however, that in
the event that either State Street or the Fund terminates this Agreement or the
Custodian Agreement for any reason other than the Fund's breach, State Street
shall provide the Data Access Services for a period of time and at a price to be
agreed upon by State Street and the Fund.
11. MISCELLANEOUS
a. Assignment; Successors. This Agreement and the rights and obligations
of each Fund and State Street hereunder shall not be assigned by any party
without the prior written consent of the other parties, except that State Street
may assign this Agreement to a successor of all or a substantial portion of its
business, or to a party controlling, controlled by, or under common control with
State Street.
b. Survival. All provisions regarding indemnification, warranty,
liability and limits thereon, and confidentiality and/or protection of
proprietary rights and trade secrets shall survive the termination of this
Agreement.
c. Entire Agreement. This Agreement and the attachments hereto constitute
the entire understanding of the parties hereto with respect to the Data Access
Services and the use of the System and supersedes any and all prior or
contemporaneous representations or agreements, whether oral or written, between
the parties as such may relate to the Data Access Services or the System, and
cannot be modified or altered except in a writing duly executed by the parties.
This
7
<PAGE>
Agreement is not intended to supersede or modify the duties and liabilities of
the parties hereto under the Custodian Agreement or any other agreement between
the parties hereto except to the extent that any such agreement specifically
refers to the Data Access Services or the System. No single waiver or any right
hereunder shall be deemed to be a continuing waiver.
d. Severability. If any provision or provisions of this Agreement shall
be held to be invalid, unlawful, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired.
e. Governing Law. This Agreement shall be interpreted and construed in
accordance with the internal laws of The Commonwealth of Massachusetts without
regard to the conflict of laws provisions thereof.
8
<PAGE>
IN WITNESS WHEREOF, each of the undersigned Funds severally has
caused this Agreement to be duly executed in its name and through its duly
authorized officer as of the date hereof.
STATE STREET BANK AND TRUST
COMPANY
By: /s/ Ronald E. Logue
------------------------------------
Title: Executive Vice President
------------------------------------
Date:
------------------------------------
EACH FUND LISTED ON APPENDIX A
By: /s/ Joseph W. Canavan
-----------------------------------
Title: Senior Vice President
-----------------------------------
Date: June 5, 1998
-----------------------------------
<PAGE>
APPENDIX A
Funds (each a series of investment company named in bold)
- -----
State Street Research Capital Trust
State Street Research Capital Fund
State Street Research Emerging Growth Fund
(formerly: State Street Research Small Capitalization Growth
Fund)
State Street Research Aurora Fund
(formerly: State Street Research Small Capitalization Value Fund)
State Street Research Equity Trust
State Street Research Equity Investment Fund
State Street Research Alpha Fund
(formerly: State Street Research Equity Income Fund)
State Street Research Global Resources Fund
State Street Research Athletes Fund
State Street Research Exchange Trust
State Street Research Exchange Fund
State Street Research Financial Trust
State Street Research Government Income Fund
State Street Research Strategic Portfolios: Aggressive
State Street Research Strategic Portfolios: Conservative
State Street Research Strategic Portfolios: Moderate
State Street Research Growth Trust
State Street Research Growth Fund
State Street Research Income Trust
State Street Research High Income Fund
State Street Research Managed Assets
State Street Research Master Investment Trust
State Street Research Investment Trust
State Street Research Money Market Trust
State Street Research Money Market Fund
State Street Research Tax-Exempt Trust
State Street Research Tax-Exempt Fund
State Street Research New York Tax-Free Fund
State Street Research Securities Trust
State Street Research Intermediate Bond Fund
State Street Research Strategic Income Fund
State Street Research Legacy Fund
State Street Research Galileo Fund
State Street Research Portfolios, Inc.
State Street Research International Equity Fund
Ap. A-1
<PAGE>
Status of Funds Covered By This Agreement
- -----------------------------------------
(a) Each Fund shall be regarded for all purposes as separate from any of the
other Funds. Each Fund shall be responsible for only its own transactions.
No Fund shall participate in, or effect any transaction in connection with,
any joint enterprise or other joint arrangement or profit-sharing plan.
(b) The use of this single document to memorialize the separate arrangements
under the Agreement for each of the Funds is understood to be for clerical
convenience only and shall not constitute any basis for joining the Funds
in any respect.
(c) Each trust listed above is a Massachusetts business trust. The Master Trust
Agreement of each Massachusetts business trust of which a Fund is a series,
as the same may be amended from time to time, is on file with the Secretary
of State for the Commonwealth of Massachusetts. It is expressly agreed that
the execution and delivery of this Agreement and the obligations of each
trust hereunder shall not be binding upon any of the trustees,
shareholders, nominees, officers, agents or employees of the relevant
trust as individuals, or personally, but shall bind only the trust property
of the trust. The Master Trust Agreement of each trust provides, and it is
expressly agreed, that each Fund of the trust shall be solely and
exclusively responsible for the payment of its debts, liabilities and
obligations, and that no other Funds shall be responsible for same.
Ap. A-2
<PAGE>
ATTACHMENT A
Multicurrency HORIZON(R) Accounting System
System Product Description
I. The Multicurrency HORIZON(R) Accounting System is designed to provide lot
level portfolio and general ledger accounting for SEC and ERISA type
requirements and includes the following services: 1) recording of general ledger
entries; 2) calculation of daily income and expense; 3) reconciliation of daily
activity with the trial balance, and 4) appropriate automated feeding mechanisms
to (i) domestic and international settlement systems, (ii) daily, weekly and
monthly evaluation services, (iii) portfolio performance and analytic services,
(iv) Fund's internal computing systems and (v) various State Street provided
information services products.
II. GlobalQuest(R) GlobalQuest(R) is designed to provide Fund access to the
following information maintained on The Multicurrency HORIZON(R)
Accounting System: 1) cash transactions and balances; 2) purchases and
sales; 3) income receivables; 4) tax refund receivables; 5) daily
priced positions; 6) open trades; 7) settlement status; 8) foreign
exchange transactions; 9) trade history; and 10) daily, weekly and
monthly evaluation services.
III. HORIZON(R) Gateway. HORIZON(R) Gateway provides customers with the ability
to (i) generate reports using information maintained on the Multicurrency
HORIZON(R) Accounting System which may be viewed or printed at the customer's
location; (ii) extract and download data from the Multicurrency HORIZON(R)
Accounting System; and (iii) access previous day and historical data. The
following information which may be accessed for these purposes: 1) holdings; 2)
holdings pricing; 3) transactions, 4) open trades; 5) income; 6) general ledger
and 7) cash.
IV. SaFiRe(SM). SaFiRe(SM) is designed to provide the customer with the ability
to prepare its own financial reports by permitting the customer to access
customer information maintained on the Multicurrency HORIZON(R) Accounting
System, to organize such information in a flexible reporting format and to have
such reports printed on the customer's desktop or by its printing provider.
V. State Street Interchange. State Street Interchange is an open information
delivery architecture wherein proprietary communication products, data formats
and workstation tools are replaced by industry standards and is designed to
enable the connection of State Street's network to customer networks, thereby
facilitating the sharing of information.
<PAGE>
ATTACHMENT B
Designated Configuration
[Designated Configuration Graphic]
<PAGE>
ATTACHMENT C
Undertaking
The undersigned understands that in the course of its employment as
Investment Advisor to each fund listed on Appendix A (individually a, "Fund",
collectively, the "Funds") it will have access to State Street Bank and Trust
Company's ("State Street") Multicurrency HORIZON Accounting System and other
information systems (collectively, the "System").
The undersigned acknowledges that the System and the databases, computer
programs, screen formats, report formats, interactive design techniques,
documentation, and other information made available to the Undersigned by State
Street as part of the Data Access Services provided to the Fund and through the
use of the System constitute copyrighted, trade secret, or other proprietary
information of substantial value to State Street. Any and all such information
provided by State Street to the Undersigned shall be deemed proprietary and
confidential information of State Street (hereinafter "Proprietary
Information"). The Undersigned agrees that it will hold such Proprietary
Information in confidence and secure and protect it in a manner consistent with
its own procedures for the protection of its own confidential information and to
take appropriate action by instruction or agreement with its employees who are
permitted access to the Proprietary Information to satisfy its obligations
hereunder.
The Undersigned will not attempt to intercept data, gain access to data
in transmission, or attempt entry into any system or files for which it is not
authorized. It will not intentionally adversely affect the integrity of the
System through the introduction of unauthorized code or data, or through
unauthorized deletion.
Upon notice by State Street for any reason, any right to use the System
and access to the Data Access Services shall terminate and the Undersigned shall
immediately cease use of the System and the Data Access Services. Immediately
upon notice by State Street for any reason, the Undersigned shall return to
State Street all copies of documentation and other Proprietary Information in
its possession.
STATE STREET RESEARCH &
MANAGEMENT COMPANY
By: /s/ Darman A. Wing
---------------------------------------
Title: Senior Vice President
---------------------------------------
Date: June 4, 1998
---------------------------------------
<PAGE>
ATTACHMENT D
Support
During the term of this Agreement, State Street agrees to provide the
following on-going support services:
a. Telephone Support. The Fund Designated Persons may contact State
Street's HORIZON(R) Help Desk and Fund Assistance Center between the hours of 8
a.m. and 6 p.m. (Eastern time) on all business days for the purpose of obtaining
answers to questions about the use of the System, or to report apparent problems
with the System. From time to time, the Fund shall provide to State Street a
list of persons, not to exceed five in number, who shall be permitted to contact
State Street for assistance (such persons being referred to as "the Fund
Designated Persons").
b. Technical Support. State Street will provide technical support to
assist the Fund in using the System and the Data Access Services. The total
amount of technical support provided by State Street shall not exceed 10
resource days per year. State Street shall provide such additional technical
support as is expressly set forth in the fee schedule in effect from time to
time between the parties (the "Fee Schedule"). Technical support, including
during installation and testing, is subject to the fees and other terms set
forth in the Fee Schedule.
c. Maintenance Support. State Street shall use commercially reasonable
efforts to correct system functions that do not work according to the System
Product Description as set forth on Attachment A in priority order in the next
scheduled delivery release or otherwise as soon as is practicable.
d. System Enhancements. State Street will provide to the Fund any
enhancements to the System developed by State Street and made a part of the
System; provided that, sixty (60) days prior to installing any such enhancement,
State Street shall notify the Fund and shall offer the Fund reasonable training
on the enhancement. Charges for system enhancements shall be as provided in the
Fee Schedule. State Street retains the right to charge for related systems or
products that may be developed and separately made available for use other than
through the System.
e. Custom Modifications. In the event the Fund desires custom
modifications in connection with its use of the System, the Fund shall make a
written request to State Street providing specifications for the desired
modification. Any custom modifications may be undertaken by State Street in its
sole discretion in accordance with the Fee Schedule.
f. Limitation on Support. State Street shall have no obligation to
support the Fund's use of the System: (1) for use on any computer equipment or
telecommunication facilities which does not conform to the Designated
Configuration or (ii) in the event the Fund has modified the System in breach of
this Agreement.
STATE STREET RESEARCH MONEY MARKET TRUST
RULE 12b-1 PLAN FOR DISTRIBUTION OF SHARES
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 is authorized to (a) issue shares of beneficial
interest in separate series, with the shares of each such series representing
the interests in a separate portfolio of securities and other assets, and (b)
divide the shares within each such series into two or more classes;
WHEREAS, one such class has been designated as Class B(1) (the shares
of such class being hereinafter referred to as "Shares");
WHEREAS, the Trust has established the State Street Research Money
Market Fund (each such portfolio, together with all other series made subject to
this Rule 12b-1 Plan (this "Plan"), being referred to herein individually as a
"Series" and collectively as the "Series");
WHEREAS, the Trust may be deemed a distributor of the Shares within the
meaning of Rule 12b-1 under the Act, and desires to adopt this Plan, and has
adopted a related Distribution Agreement (the "Agreement") with State Street
Research Investment Services, Inc., the Trust's principal underwriter (the
"Distributor") pursuant to such Rule; and
WHEREAS, the Board of Trustees as a whole, and the Trustees who are not
interested persons (as defined in the Act) of the Trust and who have no direct
or indirect financial interest in the operation of this Plan or the Agreement
and any agreements relating to it (the "Qualified Trustees"), having determined,
in the exercise of their reasonable business judgment and in light of their
fiduciary duties under state law and under Section 36(a) and (b) of the Act,
that there is a reasonable likelihood that this Plan and the Agreement will
benefit each Series and its shareholders, have accordingly approved this Plan
and the Agreement by votes cast in person at a meeting called for the purpose of
voting on this Plan and the Agreement and any agreements related thereto.
NOW, THEREFORE, the Trust hereby adopts this Plan in accordance with
Rule 12b-1 under the Act, on the following terms and conditions:
<PAGE>
SECTION 1. PAYMENTS TO THE DISTRIBUTOR
(a) Service Fees. The Trust shall pay the Distributor a service fee at
the end of each month at the annual rate of 0.25% of average daily net assets
attributable to the Shares of each Series to compensate the Distributor and any
securities firms or other third parties who render personal services to and/or
maintain shareholder accounts for the holders of Shares of such Series.
(b) Distribution Fees. The Trust shall pay the Distributor a
distribution fee under the Plan at the end of each month at the annual rate of
0.75% of average daily net assets attributable to the Shares of each Series to
compensate the Distributor for services provided and expenses incurred by it in
connection with sales, promotional and marketing activities relating to the
Shares of such Series.
Payment of the distribution fee described in this Paragraph 1(b) shall
be subject to any limitation set forth in any applicable regulation of the
National Association of Securities Dealers, Inc.
SECTION 2. PAYMENTS FROM OTHER SOURCES
To the extent that any payments made by the Trust to the Distributor or
State Street Research & Management Company (the "Adviser"), including payment of
investment management fees, should be deemed to be an indirect financing of any
activity primarily resulting in the sale of Shares within the scope of Rule
12b-1 under the Act, then such payments shall be deemed to be authorized by this
Plan.
SECTION 3. TERM AND TERMINATION
(a) Effectiveness. This Plan shall become effective with respect to
each Series as of the later of (i) the date on which a Registration Statement
with respect to Shares of such Series becomes effective under the Securities Act
of 1933, as amended, or (ii) the date on which such Series commences offering
its Shares to the public. This Plan shall continue in effect with respect to
each Series until one (1) year from the date of such effectiveness, unless the
continuation of this Plan shall have been approved with respect to the Series in
accordance with the provisions of Section 3(b) hereof.
(b) Continuation. This Plan and the Agreement shall continue in effect
with respect to each Series thereof subsequent to the initial term specified in
Section 3(a) for so long as such continuance is specifically approved at least
annually by votes of a majority of both (i) the Board of Trustees of the Trust
and (ii) the Qualified Trustees, cast in person at a meeting called for the
purpose of voting on this Plan, subject to any shareholder approval requirements
existing under applicable law.
2
<PAGE>
(c) Termination.
(i) This Plan may be terminated at any time with respect to
the Trust or any Series thereof, as the case may be, by vote of a
majority of the Qualified Trustees, or by vote of a majority of the
outstanding voting securities of the Trust or that Series, as the case
may be. This Plan may remain in effect with respect to a Series thereof
even if it has been terminated in accordance with this Section 3(c)
with respect to such Series or one or more other Series of the Trust.
(ii) The Agreement may be terminated at any time, without
penalty, with respect to the Trust or any Series, as the case may be,
by vote of a majority of the Qualified Trustees or by vote of a
majority of the outstanding voting securities of the Trust or that
Series, as the case may be, on sixty (60) days' written notice to the
Distributor. In addition, the Agreement provides for automatic
termination in the event of its assignment.
SECTION 4. AMENDMENTS
This Plan may be amended with respect to the Trust or a Series thereof
in the manner provided for annual renewal in Section 3(b) hereof; provided,
however, that this Plan may not be amended to increase materially the amount of
distribution expenditures provided for in Section 1 hereof unless such amendment
is approved by a vote of a majority of the outstanding voting securities of each
Series thereof with respect to which a material increase in the amount of
distribution expenditures is proposed.
SECTION 5. INDEPENDENT TRUSTEES
While this Plan is in effect with respect to any Series, the selection
and nomination of Trustees who are not interested persons (as defined in the
Act) of the Trust shall be committed to the discretion of the Trustees who are
not interested persons.
SECTION 6. QUARTERLY REPORTS
The Treasurer of the Trust and the Treasurer of the Distributor shall
provide to the Trustees of the Trust and the Trustees shall review, at least
quarterly, a written report of the amounts expended for distribution pursuant to
this Plan and the purposes for which such expenditures were made.
3
<PAGE>
SECTION 7. RECORD KEEPING
The Trust shall preserve copies of this Plan, the Agreement and any
related agreements and all reports made pursuant to Section 6 hereof, for a
period of not less than six (6) years from the date of this Plan, and the
Agreement, the agreements or such reports, as the case may be, for the first two
(2) years in an easily accessible place.
SECTION 8. LIMITATION OF LIABILITY
The term "State Street Research Money Market Trust" means and refers to
the Trustees of the Trust from time to time serving under the Second Amended and
Restated Master Trust Agreement dated June 1, 1993 (the "Master Trust
Agreement") as the same may subsequently thereto have been, or subsequently
hereto be, amended. It is expressly agreed that the obligations of the Trust
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents or employees of the Trust, personally, but bind only the trust
property of the Trust, as provided in the Master Trust Agreement. This Plan and
its execution and delivery have been authorized by the Trustees of the Trust and
signed by an authorized officer of the Trust, acting as such, and neither such
authorization by such Trustees nor such execution and delivery by such officer
shall be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the trust property of
the Trust as provided in the Master Trust Agreement. The Master Trust Agreement
further provides, and it is expressly agreed, that each Series shall be solely
and exclusively responsible for the payment of its debts, liabilities and
obligations and that no other Series shall be responsible or liable for the
same.
4
<PAGE>
IN WITNESS WHEREOF, the Trust and the Distributor have executed this
Rule 12b-1 Plan on the day and year set forth below in Boston, Massachusetts.
<TABLE>
<S> <C>
ATTEST: STATE STREET RESEARCH
MONEY MARKET TRUST
/s/ Darman A. Wing By: /s/ Gerard P. Maus
- -------------------------------- ---------------------------------
Gerard P. Maus
Treasurer
ATTEST: STATE STREET RESEARCH
INVESTMENT SERVICES, INC.
/s/ Darman A. Wing By: /s/ C. Troy Shaver, Jr.
- -------------------------------- ---------------------------------
C. Troy Shaver, Jr.
President
</TABLE>
Date: January 1, 1999
STATE STREET RESEARCH MONEY MARKET TRUST
Addendum
to
First Amended and Restated Multiple Class Expense Allocation Plan
January 1, 1999
WHEREAS, State Street Research Money Market Trust (the "Trust") has
adopted the First Amended and Restated Multiple Class Expense Allocation Plan
dated May 8, 1996 (the "Plan") in accordance with Rule 18f-3 under the
Investment Company Act of 1940, as amended, pursuant to which the Trust, for
each of its portfolio series (each a "Series") and separate classes thereof, may
issue multiple classes of shares representing interests in the same portfolio of
securities, assess a contingent deferred sales charge (the "CDSC") on certain
redemptions of shares and waive the CDSC in certain cases;
WHEREAS, the Trust currently has established one or more Series, and
each such series has established four classes of shares: Class A, Class B, Class
C (formerly Class D) and Class S (formerly Class C), all of which are subject to
the Plan;
WHEREAS, the Trust has established an additional class of shares, Class
B(1), for each Series, and such shares are to be made subject to the Plan;
NOW, THEREFORE, the Trust hereby adopts this Addendum pursuant to the
current terms of the Plan:
1. Class B(1) shares of each Series are made subject to the Plan pursuant to
Section 4(b) of the Plan.
2. All class differences, differences in distribution and shareholder services
and the allocation of expenses between Class B(1) shares and the other
authorized classes of shares of each Series shall be as described in the current
prospectus for such class and such Series or as otherwise described in the Plan.
POWER OF ATTORNEY
The undersigned, a Trustee of State Street Research Money Market Trust
("Trust"), a Massachusetts business trust, hereby constitutes and appoints
Francis J. McNamara, III and Darman A. Wing as the true and lawful attorneys of
the undersigned, with full power to each of them alone to sign for the
undersigned, in the name and in the capacity of the undersigned indicated below,
any Registration Statements and any and all amendments thereto of the Trust
filed with the Securities and Exchange Commission and generally to do all such
things in the name and in the indicated capacity of the undersigned as are
required to enable the Trust to comply with provisions of the Securities Act of
1933, as amended, and/or the Investment Company Act of 1940, as amended, and all
requirements and regulations of the Securities and Exchange Commission, hereby
ratifying and confirming the signature of the undersigned as it has been and may
be signed by said attorneys to said Registration Statements, and any and all
amendments thereto.
IN WITNESS WHEREOF, executed the 30th day of July, 1999.
<TABLE>
<CAPTION>
Signature Capacity
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<S> <C>
/s/ Susan M. Phillips Trustee
Susan M. Phillips
</TABLE>
POWER OF ATTORNEY
The undersigned, a Trustee of State Street Research Money Market Trust
("Trust"), a Massachusetts business trust, hereby constitutes and appoints
Francis J. McNamara, III and Darman A. Wing as the true and lawful attorneys of
the undersigned, with full power to each of them alone to sign for the
undersigned, in the name and in the capacity of the undersigned indicated below,
any Registration Statements and any and all amendments thereto of the Trust
filed with the Securities and Exchange Commission and generally to do all such
things in the name and in the indicated capacity of the undersigned as are
required to enable the Trust to comply with provisions of the Securities Act of
1933, as amended, and/or the Investment Company Act of 1940, as amended, and all
requirements and regulations of the Securities and Exchange Commission, hereby
ratifying and confirming the signature of the undersigned as it has been and may
be signed by said attorneys to said Registration Statements, and any and all
amendments thereto.
IN WITNESS WHEREOF, executed the 30th day of July, 1999.
<TABLE>
<CAPTION>
Signature Capacity
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<S> <C>
/s/ Bruce R. Bond Trustee
Bruce R. Bond
</TABLE>
Certificate of Resolution
I, the undersigned Darman A. Wing, hereby certify that I am Assistant
Secretary of State Street Research Money Market Trust (the "Trust"), a
Massachusetts business trust duly authorized and validly existing under
Massachusetts law, and that the following is a true, correct and complete
statement of a vote duly adopted by the Trustees of said Trust on May 5, 1995:
"VOTED: That Francis J. McNamara, III and Darman A. Wing be, and each
hereby is, authorized and empowered, for and on behalf of the
Trust, its principal financial and accounting officer, and in
their name, to execute, and file a Power of A ttorney relating
to, the Trust's Registration Statements under the Investment
Company Act of 1940 and/or the Securities Act of 1933, and
amendments thereto, the execution and delivery of such Power of
Attorney, Registration Statements and amendments thereto, to
constitute conclusive proof of such authorization."
I further certify that said vote has not been amended or revoked and
that the same is now in full force and effect.
IN WITNESS WHEREOF, I have hereunto set my hand on this 30th day of
July, 1999.
/s/ Darman A. Wing
-----------------------
Assistant Secretary
