METLIFE STATE STREET FINANCIAL TRUST, PRES14A, 1995-11-21

METLIFE STATE STREET FINANCIAL TRUST
PRES14A, 1995-11-21

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STATE STREET RESEARCH GOVERNMENT INCOME FUND
STATE STREET RESEARCH STRATEGIC PORTFOLIOS: CONSERVATIVE
STATE STREET RESEARCH STRATEGIC PORTFOLIOS: MODERATE
STATE STREET RESEARCH STRATEGIC PORTFOLIOS: AGGRESSIVE

series of
MetLife - State Street Financial Trust
One Financial Center
Boston, Massachusetts 02111

NOTICE OF SPECIAL MEETING
OF SHAREHOLDERS
To Be Held On ________________, 1996

A Special Meeting of Shareholders (the "Meeting") of State Street Research
Government Income Fund ("Government Income Fund"), State Street Research
Strategic Portfolios: Conservative ("Strategic Portfolios: Conservative"), State
Street Research Strategic Portfolios: Moderate ("Strategic Portfolios:
Moderate"), and State Street Research Strategic Portfolios: Aggressive
("Strategic Portfolios: Aggressive"), (collectively the "Funds"), series of
MetLife - State Street Financial Trust, a Massachusetts business trust (the
"Trust"), will be held at the offices of the Trust, One Financial Center, 31st
Floor, Boston, Massachusetts 02111, at 2:00 P.M. on _____________, 1996 for the
following purposes:

1. (For all Funds) To elect Trustees of the Trust.

2. To reclassify the following investment policies from fundamental to
nonfundamental policies:

a. (For Government Income Fund only) The policy regarding investments
in securities of companies with less than three (3) years'
continuous operation; and

b. (For Government Income Fund only) The policy regarding investments
in illiquid securities.

3. (For Government Income Fund only) To amend the Fund's fundamental
policy regarding investments in commodities and commodity contracts.

4. (For Government Income Fund only) To amend the Fund's fundamental
policy on lending to permit securities lending.

5. (For all Funds) To amend the Funds' fundamental policy regarding
diversification of investments.

6. (For all Funds) To amend the Master Trust Agreement to permit the
Trustees to reorganize, merge or liquidate a fund without prior
shareholder approval.

7. (For all Funds) To amend the Master Trust Agreement to eliminate
specified time permitted between the record date and any shareholders
meeting.

8. (For all Funds) To consider and act upon any matter incidental to the
foregoing and to transact such other business as may properly come
before the Meeting and any adjournments thereof.

The matters referred to above may be acted upon at said Meeting and any
adjournments thereof.

The close of business on _______________, 1995 has been fixed as the
record date for the determination of shareholders entitled to notice of, and to
vote at, the Meeting and any adjournments thereof.

IT IS VERY IMPORTANT THAT YOUR VOTING INSTRUCTIONS BE RECEIVED NO LATER
THAN _______________, 1996. Instructions for shares held of record in the name
of a nominee, such as a broker-dealer, may be subject to earlier cut-off dates
established by such intermediaries to facilitate a timely response.

YOUR VOTE IS IMPORTANT REGARDLESS OF THE SIZE OF YOUR HOLDINGS IN THE
TRUST. WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE
AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. IF YOU DESIRE
TO VOTE IN PERSON AT THE MEETING, YOU MAY REVOKE YOUR PROXY.

By Order of the Trustees
FRANCIS J. McNAMARA, III
Secretary

_______________, 1995
Date of Notice

2
<PAGE>

series of
MetLife - State Street Financial Trust
One Financial Center
Boston, Massachusetts 02111

PROXY STATEMENT

The following table identifies each proposal set forth in the Notice of
Special Meeting of Shareholders and the checkmark (u) indicates which Fund's
shareholders and classes are being solicited to approve which proposal.

Government Strategic Strategic Strategic
Income Portfolios: Portfolios: Portfolios:
Fund, Conservative, Moderate, Aggressive,
All Classes All Classes All Classes All Classes
----------- ----------- ----------- -----------

Proposal
--------

1. Trustees x x x x

2. Fundamental to non-
fundamental policies

a. Companies with less than
3 years' operations x

b. Illiquid securities x

3. Commodities x

4. Securities lending x

5. Diversification x x x x
of investments

6. Amendment of Master
Trust Agreement to
permit Trustees to
reorganize, merge or
liquidate a fund x x x x

7. Amendment of Master
Trust Agreement to
eliminate specified
time permitted between
record date and any
shareholders meeting x x x x

3
<PAGE>

This Proxy Statement is furnished to the shareholders of MetLife-State
Street Financial Trust, in connection with the solicitation of proxies by and on
behalf of the Trust's Board of Trustees to be used at a Special Meeting of
Shareholders (the "Meeting") of the Trust, to be held at the offices of the
Trust, One Financial Center, 31st Floor, Boston, Massachusetts 02111, at 2:00
P.M., on ________________, 1996, and at any adjournments thereof. Any
shareholder who has given a Proxy has the right to revoke it at any time prior
to its exercise by attending the Meeting and voting his or her shares in person
or by submitting a written notice of revocation or a later-dated Proxy to the
Trust at the above address prior to the date of the Meeting.

Shareholders of record of the Trust at the close of business on
________________, 1995 are entitled to notice of, and to vote at, the Meeting or
any adjournments thereof. This Proxy Statement, Proxy and accompanying Notice of
Special Meeting were first sent or given to shareholders on or about
________________, 1995. The Trust is presently comprised of four separate
portfolio series: State Street Research Government Income Fund, State Street
Research Strategic Portfolios: Conservative, State Street Research Strategic
Portfolios: Moderate and State Street Research Strategic Portfolios: Aggressive.

The chart below reflects the total number of shares issued and outstanding
for the Funds as of the record date. Each share is entitled to one vote with a
proportionate vote for each fractional share.

Fund Class A Class B Class C Class D Total
- ---- ------- ------- ------- ------- -----

Government
Income Fund ------- ------- ------- ------- -----

Strategic
Portfolios:
Conservative ------- ------- ------- ------- -----

Strategic
Portfolios:
Moderate ------- ------- ------- ------- -----

Strategic
Portfolios:
Aggressive ------- ------- ------- ------- -----

If the enclosed Proxy is properly executed and returned in time to be
voted at the Meeting, the shares represented thereby will be voted in accordance
with the instructions on the Proxy. The Proxy grants discretion to the persons
named therein, as

<PAGE>

proxies, to take such further action as they may determine appropriate in
connection with any other matter which may properly come before the Meeting or
any adjournments thereof. The Board of Trustees does not currently know of any
matter to be considered at the Meeting other than the matters set forth in the
Notice of Special Meeting of Shareholders.

A majority of the shares entitled to vote constitutes a quorum for the
transaction of business at the Meeting. In the event a quorum is not present at
the Meeting, or in the event a quorum is present at the Meeting but sufficient
votes to approve any of the proposals are not received, the persons named as
proxies may propose one or more adjournments of such Meeting without further
notice to permit further solicitation of Proxies provided such persons determine
that an adjournment and additional solicitation are reasonable and in the
interest of shareholders, after consideration of all relevant factors, including
the nature of the relevant proposals, the percentage of votes then cast, the
percentage of negative votes then cast, the nature of the proposed solicitation
activities and the nature of the reasons for such further solicitation. A
shareholder vote may be taken on one or more of the proposals in this Proxy
Statement prior to such adjournment if sufficient votes have been received and
such vote is otherwise appropriate. Any such adjournment will require the
affirmative vote of a majority of those shares present at the Meeting in person
or by proxy.

For purposes of determining the presence of a quorum for transacting
business at the Meeting and for determining whether sufficient votes have been
received for approval of any proposal to be acted upon at the Meeting,
abstentions and broker "non-votes" (that is, proxies from brokers or nominees
indicating that such persons have not received instructions from the beneficial
owner or other persons entitled to vote shares on a particular matter with
respect to which the brokers or nominees do not have, or choose not to exercise,
discretionary power) may be treated as shares that are present at the Meeting
and entitled to vote on the matter, but which have not been voted. For this
reason, abstentions and broker non-votes will assist the Trust in obtaining a
quorum; both have the practical effect of a "no" vote for purposes of obtaining
the requisite vote for approval of proposals 2 through 7 to be acted upon at the
Meeting, but will have no effect on approval of proposal 1 regarding the
election of Trustees.

In addition to solicitation of Proxies by mail, officers of the Trust and
officers and regular employees of State Street Research & Management Company
(the "Investment Manager"), affiliates of the Investment Manager, or other
representatives of the Trust may also solicit Proxies by telephone or telegraph
or in person. The Trust may also retain a proxy solicitation firm to assist in
any special, personal solicitation of Proxies. The costs of retaining a firm to
perform such special solicitation, which the Trust does not anticipate would
exceed $25,000 per

<PAGE>

Fund, would be borne by the relevant Fund, along with all other usual costs of
solicitation and expenses incurred in connection with preparing this Proxy
Statement and its enclosures. The Trust will reimburse brokerage firms and
others for their expenses in forwarding solicitation material to the beneficial
owners of shares.

Upon request by a shareholder of any Fund of the Trust to State Street
Research Shareholder Services, One Financial Center, Boston, MA 02111 at
1-800-562-0032, the annual report and most recent semiannual report succeeding
the annual report, if any, for the relevant Fund will be furnished without
charge to the requesting shareholder.

The Funds' distributor is State Street Research Investment Services, Inc.,
One Financial Center, Boston, MA 02111.

As of September 30, 1995, the following persons or entities were the
beneficial owners of the amounts of shares of the Funds as set forth beside
their names:

Amount and
Nature of % of
Name and Address Beneficial Outstanding
Name of Fund of Beneficial Owner Ownership Shares
- ------------ ------------------- --------- ------

Government Income Fund

Strategic Portfolios: Conservative

Strategic Portfolios: Moderate

Strategic Portfolios: Aggressive

<PAGE>

PROPOSAL 1
ELECTION OF TRUSTEES
(FOR ALL FUNDS)

The shareholders of the Trust are being asked to elect the nominees named
below to serve as Trustees of the Trust. All shares represented by valid proxies
will be voted in favor of the election of the nominees, unless authority to vote
therefor is withheld. The nominees have agreed to serve as Trustees if elected.
If for any reason the nominees should not be available for election as
contemplated, the proxies hereby solicited may, unless otherwise limited, be
voted to elect such substitute nominees, if any, as may be designated by the
Board of Trustees, subject to the applicable provisions of the Investment
Company Act of 1940 (the "1940 Act"). Information on the nominees and members of
the Board is set forth below:

<TABLE>
<CAPTION>
Shares of Funds
Deemed Beneficially Owned on
September 30, 1995
---------------------------------------------------
Year Number of Shares / Class / % of Class
First ---------------------------------------------------
Position Became Govt. Strat. Port.: Strat. Port.: Strat. Port.:
Trustees with Trust Trustee Income Conservative Moderate Aggressive
- -------- ---------- ------- ------ ------------ ------------- -------------
<S> <C> <C>
Edward M. Lamont Trustee 1987

Robert A. Lawrence Trustee 1987

Dean O. Morton Trustee 1987

Thomas L. Phillips Trustee 1992

Toby Rosenblatt Trustee 1993

Michael S. Scott Morton Trustee 1987

*Ralph F. Verni Trustee, 1992
Chairman
of the Board,
Chief Executive
Officer and
President

Jeptha H. Wade Trustee 1987
</TABLE>

Trustees and Officers
as a Group (13 persons)

* Individual who is deemed to be an "interested person" of the Trust under
the 1940 Act because of his affiliation with the Trust's investment
manager.
(1) Less than 1%.

7
<PAGE>

Edward M. Lamont is engaged principally in private investments and civic
affairs, and is an author of business history. Previously, he was with Morgan
Guaranty Trust Company of New York. He is _____. Mr. Lamont's other principal
business affiliations include Director of Sun Life Insurance and Annuity Company
of New York. Mr. Lamont is also a Trustee of 9 other investment companies for
which the Investment Manager serves as primary investment adviser.

Robert A. Lawrence's principal occupation is Partner, Saltonstall & Co., a
private investment firm. He is _____. Mr. Lawrence's other principal business
affiliations include Director of Metropolitan Series Fund, Inc., State Street
Research Portfolios, Inc., New York Times Company and Fifty Associates (a real
estate investment trust). Mr. Lawrence is also a Trustee of 9 other investment
companies for which the Investment Manager serves as primary investment adviser.

Dean O. Morton is retired and was formerly Executive Vice President, Chief
Operating Officer and Director, Hewlett-Packard Company. He is _____. Mr.
Morton's other principal business affiliations include Director of Metropolitan
Series Fund, Inc., State Street Research Portfolios, Inc., Alza Corp. (a
therapeutic systems developer), Raychem Corp. (a materials science company), The
Clorox Company (a consumer products company), Tencor Instruments (a scientific
instruments company) and Centigram Communications Corporation (a communication
equipment company). Mr. Morton is also a Trustee of 9 other investment companies
for which the Investment Manager serves as primary investment adviser.

Thomas L. Phillips is retired and was formerly Chairman of the Board and
Chief Executive Officer of Raytheon Company, of which he remains a Director. He
is _____. Mr. Phillips's other principal business affiliations include Director
of John Hancock Mutual Life Insurance Company, Knight-Ridder, Inc. and Digital
Equipment Corporation. Mr. Phillips is also a Trustee of 9 other investment
companies for which the Investment Manager serves as primary investment adviser.

Toby Rosenblatt's principal occupations during the past five years have
been President of The Glen Ellen Company, a private investment company, and Vice
President of Founders Investments Ltd. He is _____. Mr. Rosenblatt's other
principal business affiliations include Director of Biosource Technologies,
Inc., Advanced Polymer Systems, Inc. and Pherin Corporation (proprietary
compounds for human health). Mr. Rosenblatt is also a Trustee of 9 other
investment companies for which the Investment Manager serves as primary
investment adviser.

Michael S. Scott Morton's principal occupation during the past five years
has been Jay W. Forrester Professor of Management at Sloan School of Management,
Massachusetts Institute of Technology. He is _____. Dr. Scott Morton's other
principal

<PAGE>

business affiliations include Director of Metropolitan Series Fund, Inc., State
Street Research Portfolios, Inc. and Sequent Computer Systems, Inc. (a computer
manufacturer). Dr. Scott Morton is also a Trustee of 9 other investment
companies for which the Investment Manager serves as primary investment adviser.

Ralph F. Verni's principal occupation is Chairman of the Board, President,
Chief Executive Officer and Director of the Investment Manager. During the past
five years he also served as President and Chief Executive Officer of New
England Investment Companies and as Chief Investment Officer and Director of New
England Mutual Life Insurance Company. He is _____. Mr. Verni's other principal
business affiliations include Chairman of the Board, President, Chief Executive
Officer and Director of State Street Research Investment Services, Inc.;
Director of CML Group, Inc. (consumer specialty company); Chairman and Director
of Metric Holdings, Inc. and Metric Realty Corp.; Chairman of the Board of
MetLife Securities, Inc.; President, Chief Executive Officer and Director of
SSRM Holdings, Inc.; and President and Director of State Street Research Energy,
Inc. Mr. Verni is also a Trustee of 9 other investment companies for which the
Investment Manager serves as primary investment adviser.

Jeptha H. Wade is retired and was formerly Of Counsel for the law firm
Choate, Hall & Stewart. He was a partner of that firm from 1960 to 1987. He is
_____. Mr. Wade's other principal business affiliations include Director of
Cleveland-Cliffs, Inc. (a natural resource company). Mr. Wade is also a Trustee
of 9 other investment companies for which the Investment Manager serves as
primary investment adviser.

A nominee elected as a Trustee will serve as such until any successor is
elected and qualified. A Trustee serves until he retires, resigns or is removed
as provided in the Declaration of Trust, as amended ("Master Trust Agreement")
of the Trust. The Trust is not required to hold regularly scheduled annual
meetings for the election of Trustees. (See "No Annual Meetings of Shareholders"
below.)

The following persons are principal officers, but not Trustees, of the
Trust:

John H. Kallis has served as Vice President of the Trust since 1987. He is
_____. His principal occupation is Senior Vice President of the Investment
Manager. During the past five years he has also served as a portfolio manager
for the Investment Manager.

Francis J. McNamara, III has served as Secretary and General Counsel of
the Trust since May, 1995. He is _____. His principal occupation is Senior Vice
President, Secretary and General Counsel of the Investment Manager. During the
past five years he has also served as Senior Vice President and General Counsel
of

<PAGE>

The Boston Company Inc., Boston Safe Deposit and Trust Company and The Boston
Company Advisors, Inc. Mr. McNamara's other principal business affiliations
include Senior Vice President, Clerk and General Counsel of State Street
Research Investment Services, Inc.; Secretary and General Counsel of SSRM
Holdings, Inc.; and Director, Clerk and General Counsel of State Street Research
Energy, Inc.

Gerard P. Maus has served as Treasurer of the Trust since 1993. He is
_____. His principal occupation is Executive Vice President, Treasurer and
Director of the Investment Manager. During the past five years he has also
served as Executive Vice President and Chief Financial Officer of New England
Investment Companies and as Senior Vice President and Vice President of New
England Mutual Life Insurance Company. Mr. Maus's other principal business
affiliations include Executive Vice President, Treasurer, Chief Financial
Officer and Director of State Street Research Investment Services, Inc.;
Treasurer and Director of State Street Research Energy, Inc.; Treasurer and
Chief Financial Officer of SSRM Holdings, Inc.; and Director of Metric Holdings,
Inc.

Thomas A. Shively has served as Vice President of the Trust since 1993. He
is _____. His principal occupation is Executive Vice President and Director of
the Investment Manager. During the past five years he has also served as Senior
Vice President of the Investment Manager. Mr. Shively's other principal business
affiliations include Director of State Street Research Investment Services, Inc.

Michael R. Yogg has served as Vice President of the Trust since 1994. He
is _____. 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.

These officers are deemed to be "interested persons" of the Trust under
the 1940 Act inasmuch as they are affiliated with the Investment Manager as
noted.

Board Meetings and Committees

During the fiscal year ended October 31, 1995, the Board of Trustees held
a total of five meetings.

The Audit Committee of the Board of Trustees held one meeting during the
fiscal year ended October 31, 1995. The present members of the Audit Committee
are Messrs. Morton, Scott Morton and Wade. The duties of this Committee include
meeting with representatives of the Trust's independent public accountants both
to review the range of the accountants' activities and to discuss the Trust's
system of internal controls. Thereafter, this Committee reports to the Board on
the

10
<PAGE>

Committee's findings and recommendations concerning internal accounting
matters as well as its recommendation for retention or dismissal of the auditing
firm.

The Nominating Committee of the Board of Trustees held one meeting during
the fiscal year ended October 31, 1995. The present members of the Nominating
Committee are Messrs. Morton, Phillips, Scott Morton and Wade. The duties of
this Committee include consideration of recommendations on nominations for
Trustees, review of the composition of the Board, and recommendations respecting
attendance, frequency of meetings and similar matters. The Nominating Committee
will consider nominees recommended by shareholders; shareholders may submit
recommendations to the attention of the Secretary, MetLife - State Street
Financial Trust, One Financial Center, 30th Floor, Boston, Massachusetts 02111.

Remuneration of Principal Officers and Trustees

The executive officers of the Trust and those of its Trustees who are
officers of the Investment Manager receive no direct remuneration from the
Trust. Such executive officers and Trustees receive remuneration from the
Investment Manager. Trustees who are not officers of the Investment Manager are
compensated for attendance at each meeting of the Board of Trustees and
committees of the Board and reimbursed for reasonable expenses incurred in
connection therewith, and are paid an annual retainer.

<TABLE>
<CAPTION>
Aggregate Compensation From Total
---------------------------------------------- Compensation
Name Government Strategic Strategic Strategic from Funds
of Trustee Income Portfolios: Portfolios: Portfolios: and Fund
or Nominee Fund Conservative Moderate Aggressive Complex (1)
- ---------- ---- ------------ -------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Edward M. Lamont $ $ $ $ $
Robert A. Lawrence
Dean O. Morton
Thomas L. Phillips
Toby Rosenblatt
Michael S. Scott Morton
*Ralph F. Verni
Jeptha H. Wade
</TABLE>

* Individual who is deemed to be an "interested person" of the Trust under
the 1940 Act because of his affiliation with the Funds' investment
manager.

(1) Includes compensation from Metropolitan Series Fund, Inc., for which the
Investment Manager serves as sub-investment adviser, State Street Research
Portfolios, Inc., for which State Street Research Investment Services,
Inc. serves as distributor, and all investment companies for which the
Investment Manager serves as primary investment adviser, comprising a
total of 29 series. The compensation is for the 12 months ended 10-31-95.
The Funds do not provide any pension or retirement benefits for the
Trustees.

11
<PAGE>

Required Vote

A plurality of the votes properly cast in person or by proxy at the
Meeting, provided a quorum is represented, is required for the election of a
Trustee.

PROPOSAL 2
(FOR GOVERNMENT INCOME FUND ONLY) TO RECLASSIFY
THE INVESTMENT POLICIES OF THE FUND SET FORTH BELOW
FROM FUNDAMENTAL POLICIES TO NONFUNDAMENTAL POLICIES

The Government Income Fund is currently subject to the investment policies
set forth below which, among others, the Fund originally designated as
"fundamental" policies, i.e. policies only changeable by shareholder vote. The
Trustees of the Trust after careful consideration and analysis have concluded
that it is not in the best interest of the Fund to continue this designation for
these investment policies. A fundamental policy which may only be altered by
shareholder vote by its nature inhibits the ability of a fund's management to
respond quickly to changing market conditions or revised regulations or policies
affecting the industry. The Trustees recognize that certain policies, such as
whether the Fund is to be a diversified fund or non-diversified fund, should be
changeable only by the investors themselves. On the other hand, the Trustees
believe that other policies do not fit within this category in today's rapidly
changing investment environment. The Trustees believe that the following
investment policies for the reasons given are the latter and recommend that the
shareholders approve the elimination of the fundamental characteristics of such
policies.

a. (FOR GOVERNMENT INCOME FUND ONLY) Policy regarding investments in
securities of companies with less than three (3) years' continuous
operation.

It is the Fund's current fundamental policy, with certain exceptions, not
to invest in securities of companies which, including predecessors, have a
record of less than three (3) years' continuous operation if so doing would
cause more than five percent (5%) of the Fund's total assets to be invested in
the securities of such company. Specifically, the current policy of the
Government Income Fund states that the Fund may not invest:

"in a security if the transaction would result in more than 5% of the
Fund's total assets being invested in securities of issuers (including
predecessors) with less than three years of continuous operations except
in the case of debt securities rated BBB or higher by Standard & Poor's
Corporation ("S&P") or Baa or higher by Moody's Investors Service, Inc.
("Moody's"), and except that this restriction does not apply to
investments in

12
<PAGE>

securities issued or guaranteed by the U.S. Government or its agencies or
instrumentalities."

At the time the current policy of the Fund was adopted, companies with
less than 3 years' operations were not as prevalent as they are today, and the
investment attractiveness of such issues has changed dramatically in light of
the importance of new entrepreneurial companies in today's economy, the role of
emerging growth companies both domestically and internationally, and the
sophistication of such issuers. Many of the growth industries, such as science
and technology, natural resources and consumer staples, are characterized by a
large proportion of newer companies. In addition, a number of new financing
arrangements involve newly formed entities which may not have the requisite
years of operations, but which are based on sound premises, such as a new
holding company holding interests in newly consolidated operations of
established companies, or pass-through entities such as trusts which hold pools
of income producing assets such as mortgages or consumer account receivables.
While 65% of the Fund's assets are normally invested in U.S. Government
securities, the proposed change in policy could provide flexibility in managing
the rest of the portfolio.

If the proposal to change this policy from fundamental to nonfundamental
is approved, the Trustees intend to adopt the following nonfundamental policy on
this matter which would, to a limited extent, broaden the ability of the Fund to
invest in securities of companies with less than 3 years of continuous
operation:

"The Fund may not invest more than 5% of its total assets in securities of
private companies including predecessors with less than three years'
continuous operations except (a) securities guaranteed or backed by an
affiliate of the issuer with three years of continuous operations, (b)
securities issued or guaranteed as to principal or interest by the U.S.
Government, or its agencies or instrumentalities, or a mixed-ownership
Government corporation, (c) securities of issuers with debt securities
rated at least "BBB" by Standard & Poor's Corporation or "Baa" by Moody's
Investor's Service, Inc. (or their equivalent by any other nationally
recognized statistical rating organization) or securities of issuers
considered by the Investment Manager to be equivalent, (d) securities
issued by a holding company with at least 50% of its assets invested in
companies with three years of continuous operations including
predecessors, and (e) securities which generate income which is exempt
from local, state or federal taxes; provided that the Fund may invest up
to 15% in such issuers so long as such investments plus investments in
restricted securities (other than those which are

<PAGE>

eligible for resale under Rule 144A, Regulation S or other exemptive
provisions) do not exceed 15% of the Fund's total assets."

The above proposed nonfundamental policy would allow more investments in
companies with less than 3 years of operations.

The Fund intends to implement and monitor the operation of the new policy
and to change it, as appropriate, subject to market, regulatory or other
developments. Assuming the proposal is approved, such change could then be
accomplished without the delay and expense of soliciting shareholder approval.

The Trustees, including the Trustees who are not interested persons,
recommend a vote FOR approval of Proposal 2a. If the proposal is not approved by
the shareholders, each Fund's present investment policy will remain in effect.

b. (FOR GOVERNMENT INCOME FUND ONLY) Policy regarding investments in illiquid
securities.

It is the current fundamental policy for the Government Income Fund:

"not to invest more than 10% of its assets in illiquid securities,
including securities restricted as to resale (limited to 5% of total
assets), repurchase agreements extending for more than seven days and
other securities which are not readily marketable."

Open-end investment companies such as the Fund must stand ready to redeem
their shares on a continuous basis. Thus they are limited in the amount of
illiquid securities they may hold because illiquid securities may not be easily
sold to raise cash necessary to meet redemptions under certain circumstances and
because illiquid securities can present valuation problems. Illiquid securities
have generally included those set forth in the Fund's current fundamental
policy, i.e. securities restricted as to resale, repurchase agreements extending
for more than seven days, and other securities not readily marketable. However,
the securities markets are evolving, certain securities are being
recharacterized and new instruments continue to be developed.

For example, a few years ago the Securities and Exchange Commission
adopted a rule, Rule 144A under the Securities Act of 1933, which has resulted
in a new form of restricted security which can be traded among qualified
institutional buyers. The Fund is a qualified institutional buyer and the new
rule is an important development for the Fund. However, a change in the Fund's
current fundamental policies is needed to enhance the Fund's use of Rule 144A
securities. The Trustees believe that additional flexibility is needed in
dealing with so-called

<PAGE>

illiquid and restricted securities and that the policy with respect thereto
should consequently be nonfundamental.

In 1992, the Securities and Exchange Commission raised the percentage of a
fund's total assets that may be held in illiquid securities from 10% to 15%.
Illiquid securities are generally regarded as securities which may not be sold
or disposed of within seven days in the ordinary course of business at
approximately the price at which the Fund has valued them. The Trustees have
concluded that the 15% limitation is appropriate for the Fund. In addition,
certain state regulators have likewise liberalized their policies on illiquid or
restricted securities. Had the Fund's policies in this area been nonfundamental,
corresponding revisions in the Fund's policies to reflect the Securities and
Exchange Commission and state changes could have been made by the Trustees alone
without delays and costs associated with solicitation of shareholder votes.

If the proposal to change the character of this policy from fundamental to
nonfundamental is approved by the shareholders, the Trustees intend to adopt
nonfundamental policies that read as follows:

"(1) not to purchase any security or enter into a repurchase agreement if as a
result more than 15% of its net assets would be invested in securities
that are illiquid (including repurchase agreements not entitling the
holder to payment of principal and interest within seven days); and

(2) not to invest more than 15% of its net assets in restricted securities of
all types (including not more than 5% of its net assets in restricted
securities which are not eligible for resale pursuant to Rule 144A,
Regulation S or other exemptive provisions under the Securities Act of
1933)."

Although many illiquid securities may also be restricted, and vice-versa,
compliance with each of these policies will be computed independently. The
percentage limitations would apply as of the time of investment.

The Trustees, including the Trustees who are not interested persons,
recommend a vote FOR approval of Proposal 2b. If the proposal is not approved by
the shareholders, each Fund's present investment policy will remain in effect.

<PAGE>

PROPOSAL 3
(FOR GOVERNMENT INCOME FUND ONLY) TO AMEND THE FUND'S
FUNDAMENTAL POLICY REGARDING INVESTMENTS
IN COMMODITIES AND COMMODITY CONTRACTS

The fundamental policy regarding investments in commodities and commodity
contracts currently reads as follows for the Government Income Fund. It is the
Fund's policy:

"not to purchase or sell commodities; the Fund may purchase put options on
financial futures contracts; (the Fund may also enter into futures
contracts in order to exercise put options on financial futures contracts
in its portfolio; in addition, the Fund reserves the right to hedge the
portfolio by entering into financial futures contracts and to sell calls
on financial futures contracts)."

In order to clarify this policy as well as provide greater flexibility as
regards investment in commodities and commodity contracts, the Trustees propose
that the shareholders adopt the following revised fundamental policy, to wit,
that it is the Fund's policy:

"not to invest in physical commodities or physical commodity contracts or
options in excess of 10% of the Fund's total assets, except that
investments in essentially financial items or arrangements such as, but
not limited to, swap arrangements, hybrids, currencies, currency and other
forward contracts, futures contracts and options on futures contracts on
securities, securities indices, interest rates and currencies shall not be
deemed investments in commodities or commodities contracts."

The proposed policy would enable investments in physical commodities,
although it is not the present intention of the Fund to invest in any physical
commodities or commodity contracts. However, during inflationary periods,
investments in precious metals may be appropriate. In addition, the proposed
policy would clarify that certain arrangements and newer hybrid instruments
which involve futures are permissible. The Trustees and the Investment Manager
are familiar with the risks inherent in certain of the investments covered by
the proposed policy and, if the proposed policy is adopted by the shareholders,
they intend to act accordingly in the implementation thereof. No imminent change
in current practices is anticipated.

The Trustees, including the Trustees who are not interested persons,
recommend a vote FOR approval of Proposal 3. If the proposal is not approved by
the shareholders, the Fund's present investment policy will remain in effect.

<PAGE>

PROPOSAL 4
(FOR GOVERNMENT INCOME FUND ONLY) TO AMEND THE
FUND'S FUNDAMENTAL POLICY ON LENDING TO
PERMIT SECURITIES LENDING

It is the current policy for the Government Income Fund:

"not to lend any assets; (this shall not prevent the purchase or holding
of U.S. Government securities, repurchase agreements covering U.S.
Government securities or bonds, debentures, notes or similar obligations
to the extent permitted by the Fund's investment objective and policies)."

Securities lending, when practiced as described below, could be an
attractive investment alternative for the Fund from time to time. The Trustees
propose that the policy be revised to read as follows. It will be the policy of
the Fund:

"not to lend money; however, the Fund may lend portfolio securities and
purchase bonds, debentures, notes and similar obligations (and enter into
repurchase agreements with respect thereto)."

If the proposed revised policy is adopted by the shareholders, the Fund
would be able to lend portfolio securities up to a maximum in value of 33-1/3%
of its total assets. Whenever any such loan is made, the Fund will receive
collateral in the form of cash or cash equivalents (e.g. U.S. Government
obligations) equal to at least 100% of the current market value of the loaned
securities plus accrued interest. Collateral received by the Fund will generally
be held in the form tendered, although cash may be invested in securities issued
or guaranteed by the U.S. Government or its agencies or instrumentalities,
irrevocable stand-by letters of credit issued by a bank, or any combination
thereof. The investing of cash collateral received from loaning portfolio
securities involves leverage which magnifies the potential for gain or loss on
monies invested and, therefore, results in an increase in the volatility of the
Fund's outstanding securities. Such loans may be terminated at any time. The
Fund will retain most rights of ownership of the loaned securities including
rights to dividends, interest or other distributions on the loaned securities.
Voting rights pass with the lending, although the Fund may call loans to vote
proxies if desired. Should the borrower of the securities fail financially,
there is a risk of delay in recovery of the securities or loss of rights in the
collateral. Loans would be made only to borrowers which are deemed by the
Investment Manager to be of good financial standing.

The Trustees believe that the proposed revised policy is in the best
interests of the Fund. The Trustees, including the Trustees who are not
interested persons, recommend a vote FOR

17
<PAGE>

approval of proposal 4. If the proposal is not approved by the shareholders, the
Fund's present investment policy will remain in effect.

PROPOSAL 5
(FOR ALL FUNDS) TO AMEND THE FUNDS' FUNDAMENTAL POLICIES
REGARDING DIVERSIFICATION OF INVESTMENTS

The fundamental policies of the Funds regarding diversification of
investments currently read as follows:

It is the policy of the Government Income Fund:

"(1) not to invest in a security if the transaction would result in more
than 5% of the Fund's total assets being invested in any one issuer,
except that this restriction does not apply to investments in
securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities; and

(2) not to invest in a security if the transaction would result in the
Fund's owning more than 10% of the outstanding voting securities of
an issuer, except that this restriction does not apply to investments
in securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities."

It is the policy of Strategic Portfolios: Aggressive, Strategic Portfolios:
Moderate and Strategic Portfolios: Conservative:

"(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 or mixed-
ownership Government corporations) if such purchase would, with
respect to 75% of the Fund's total assets, cause more than 5% of the
Fund's total assets to be invested in the securities of such issuer;
and

(2) not to purchase a security of any one issuer if such purchase would
cause more than 10% of the voting securities of such issuer to be
held by the Fund."

In order to provide greater flexibility in managing the investments of the
Funds, as more fully described below, the proposal is to change the above
policies to read for all the Funds as follows:

It would be the policy of each Fund:

"not to purchase a security of any one issuer (other than securities
issued or guaranteed as to principal or interest by the U.S. Government or
its agencies or instrumentalities or mixed-ownership Government
corporations) if such purchase would, with respect to 75% of the Fund's
total assets, cause more than 5% of the Fund's total assets to be invested
in the securities of such issuer or cause more than 10% of the voting
securities of such issuer to be held by the Fund."

Under the current policies, the Government Income Fund may not invest more
than 5% of its total assets in any one issuer ("5% issuer test") and may not
invest in an issuer if the investment would result in the Fund owning more than
10% of the outstanding voting securities of an issuer ("10% voting securities
test"); U.S. Government securities are not counted. The significant difference
between the current policies and proposed policy is that the 5% issuer test and
the 10% voting securities test would only apply to 75% of the Fund's assets,
thereby giving the Fund the investment flexibility to exceed the 5% issuer test
and 10% voting securities test issuer as to the remaining 25% of the Fund's
assets.

For example, while the Government Income Fund invests primarily U.S.
Government securities, it also currently invests in certificates representing
interests in trusts which hold obligations supported indirectly by the U.S.
Government. Technically because these trusts are private issuers, usually
large financial institutions, the Fund's holdings of the trust certificates are
subject to the 5% issuer test noted above. These trusts may make separate
offerings over time representing different baskets of U.S. Government supported
obligations. Thus, over time the Fund could be interested in investing more than
5% of its assets in certificates from the same trust. Adoption of the proposed
policy would allow the fund to invest more than 5% in such certificates. Such
investments in excess of the 5% issuer test would be limited in the aggregate to
25% of the Fund's assets; stated another way, the current 5% issuer test would
continue to apply, but to only 75% of the Fund's total assets.

The Government Income Fund has no present plans to change its investment
approach if the proposal is adopted. Adoption of the proposal would simply
provide helpful flexibility for possible use under the right circumstances in
the future.

The Government Income Fund, Strategic Portfolios: Aggressive, Strategic
Portfolios: Moderate and Strategic Portfolios: Conservative all have a current
policy which provides that a Fund may not make an investment which would result
in the Fund owning more than 10% of the voting securities of an issuer, except
that this 10% voting securities test does not apply to U.S. government
securities. The proposed change in policy would make the 10% voting securities
test only applicable to 75% of a Fund's assets, thus in effect giving a Fund
greater flexibility as to the other 25% of its assets.

As a Fund increases in size, its portfolio purchases get larger and could
from time to time comprise more than 10% of the voting securities of a small
issuer. Accordingly, the proposed change would give a Fund flexibility in its
investments as it grows. However, no Fund has any present plan to change its
investment approach if the proposal is adopted. Adoption of the proposal would
simply provide helpful flexibility for possible use under the right
circumstances in the future.

Implementation of the changes if adopted would be subject to such further
regulatory requirements as may be applicable.

The Trustees, including the Trustees who are not interested persons,
recommend a vote FOR approval of Proposal 5. If the proposal is not approved
by the shareholders of a given Fund, that Fund's present investment policies
will remain in effect.

PROPOSAL 6
(FOR ALL FUNDS) TO AMEND THE MASTER TRUST AGREEMENT TO
PERMIT THE TRUSTEES TO REORGANIZE, MERGE OR
LIQUIDATE A FUND WITHOUT PRIOR SHAREHOLDER APPROVAL

The Trust is organized as a Massachusetts business trust. One of the
advantages of operating a mutual fund as a business trust, rather than as a
corporation, is the substantial operational flexibility available to the
trustees. The trustees of a business trust are permitted to take a variety of
actions, without prior shareholder approval, that are not permitted to directors
of a corporation. As a result, the trustees of a business trust are able to
react quickly on behalf of shareholders to changes in competitive and regulatory
conditions, without incurring the costs of a shareholder meeting.

The particular actions that may be taken by the Trustees of the Trust
without a shareholder meeting are determined by the terms of the Trust's First
Amended and Restated Master Trust Agreement, as amended (the "Master Trust
Agreement"), subject to compliance with applicable laws, such as the 1940 Act.
Currently, the Master Trust Agreement provides that shareholder approval is
required to reorganize, merge or liquidate a Fund except in certain very limited
circumstances. Shareholder approval for these actions is not required, however,
by the 1940 Act or by the laws of Massachusetts applicable to business trusts.

The Board of Trustees believes that, in most circumstances, it is not in
the best interests of shareholders to require a meeting of shareholders or
reorganize, merge or liquidate a Fund. For example, a Fund may have insufficient
assets to invest effectively or high expense levels because of operational
needs. In such a case, the Trustees may determine that it would be in the best
interests of shareholders of the Fund to merge the Fund with another mutual fund
that has similar investment objectives or policies, which could have the effect
of reducing the per share expenses of each Fund. The process of obtaining
shareholder approval for such a transaction, however, may make it difficult to
complete the transaction and, in general, will substantially increase the costs
of the transaction for shareholders. The Trustees believe that it would be in
the best interests of shareholders to permit consummation of such a transaction
without incurring the expenses associated with holding a meeting of
shareholders. Of course, in all cases shareholders would receive notice prior to
completion of the transaction.

Approval of proposal 6 requires the affirmative vote of a majority of the
shares of the Trust present and voting at the Meeting. If proposal 6 is
approved, the last sentence of Article

<PAGE>

IV, Section 4.2(d) of the Master Trust Agreement would be amended as follows
(material to be added is underlined, material to be deleted is in brackets):

"The liquidation of any particular Sub-Trust or class thereof may be
authorized by vote of a majority of the Trustees then in office without
-------
the approval of shareholders of such Sub-Trust [subject to the approval of
----------------------------------------------
a majority of the outstanding voting Shares of that Sub-Trust or class, as
defined in the 1940 Act]."

In addition, Article VII, Section 7.2 of the Master Trust Agreement would
be deleted and replaced in its entirety with the following:

"Section 7.2 Reorganization. The Trust, or any one or more Sub-Trusts,
--------------
may, either as the successor, survivor, or non-survivor, (1) consolidate
or merge with one or more other trusts, sub-trusts, partnerships,
associations or corporations organized under the laws of the Commonwealth
of Massachusetts or any other state of the United States, to form a
consolidated or merged trust, sub-trust, partnership, limited liability
company, association or corporation under the laws of which any one of the
constituent entities is organized, with the Trust to be the survivor or
non-survivor of such consolidation or merger or (2) transfer a substantial
portion of its assets to one or more other trusts, sub-trusts,
partnerships, limited liability companies, associations or corporations
organized under the laws of the Commonwealth of Massachusetts or any other
state of the United States, or have one or more such trusts, sub-trusts,
partnerships, limited liability companies, associations or corporation
transfer a substantial portion of its assets to it, any such
consolidation, merger or transfer to be upon such terms and conditions as
are specified in an agreement and plan of reorganization authorized and
approved by the Trustees and entered into by the Trust, or one or more
Sub-Trusts, as the case may be, in connection therewith. Any such
consolidation, merger or transfer may be authorized by vote of a majority
of the Trustees then in office without the approval of shareholders of any
Sub-Trust."

The Board of Trustees unanimously recommends that shareholders vote FOR
approval of proposal 6.

19
<PAGE>

PROPOSAL 7
(FOR ALL FUNDS) TO AMEND THE MASTER TRUST AGREEMENT
TO ELIMINATE SPECIFIED TIME PERMITTED BETWEEN
THE RECORD DATE AND ANY SHAREHOLDERS MEETING

The Master Trust Agreement currently provides that the Trustees may fix a
date not more than 60 days prior to the date of any meeting of shareholders as
the date of record for the determination of shareholders entitled to vote at
such meeting. As a result, proxy statements, which are required to be delivered
to record date shareholders, may not be mailed to shareholders more than 60 days
prior to a meeting. The Board of Trustees believes that it would be in the best
interest of the Funds to be able to distribute proxy statements and begin to
solicit votes more than 60 days prior to a shareholders meeting.

Increasingly, shares of mutual funds are held of record by brokerage
firms, financial institutions or retirement plan trustees, ("financial
intermediaries") with the financial intermediary identifying in its own records
the beneficial owner of the shares. Proxy solicitations are distributed first to
the financial intermediary which in turn forwards proxy materials to the
beneficial owners of shares. The process of distributing proxy materials has
become increasingly time consuming and the period of time available to
beneficial owners to return proxies has correspondingly decreased. Although the
funds have been able to achieve quorums, the need has grown in the industry to
use interim reminder mailings and special solicitation efforts, such as
telephone calls to large record holders, in order to obtain requisite quorums.

The Trustees believe that adopting an earlier record date and commencing a
shareholder solicitation further in advance of a meeting would in many cases
avoid this result by providing shareholders with additional time in which to
consider shareholder proposals. The proposed amendment would grant the Trustees
discretion to fix a record date as of a reasonable date prior to any meeting of
shareholders, compared with the current provision in the Master Trust Agreement
which does not allow for a record date to be fixed more than 60 days prior to a
meeting.

Approval of proposal 7 requires the affirmative vote of a majority of the
shares of the Trust present and voting at the Meeting. If proposal 7 is
approved, Article V, Section 5.3 of the Master Trust Agreement would be deleted
and replaced in its entirety with the following:

"Section 5.3 Record Dates. For the purpose of determining the Shareholders
------------
who are entitled to vote or act at any meeting or any adjournment thereof,
or who are entitled to participate in any dividend or distribution, or for
the purpose of any other action, the Trustees may from time to time close
the transfer books for such period, not exceeding 30 days (except at
20
<PAGE>

or in connection with the termination of the Trust), as the Trustees may
determine; or without closing the transfer books the Trustees may fix a
reasonable date and time prior to the date of any meeting of Shareholders
or other action as the date and time of record for the determination of
Shareholders entitled to vote at such meeting or any adjournment thereof
or to be treated as a Shareholder of record for purposes of such other
action, even though he has since that date and time disposed of his
Shares, and no Shareholder becoming such after that date and time shall be
so entitled to vote at such meeting or any adjournment thereof or to be
treated as a Shareholder of record for purposes of such other action.

The Board of Trustees unanimously recommends that shareholders vote FOR
approval of proposal 7.

VOTES REQUIRED FOR APPROVAL OF PROPOSALS 2 THROUGH 7

Approval of each of proposals 2 (including proposals 2a and 2b) through
Proposal 5 requires the affirmative vote of a majority of the outstanding voting
securities of the relevant Fund as defined in the 1940 Act. Under the 1940 Act,
the vote of a majority of the outstanding voting shares means the vote of the
lesser of (a) 67% or more of the voting shares present at the meeting if the
holders of more than 50% of the outstanding voting shares are present or
represented by proxy or (b) more than 50% of the outstanding voting shares.

Approval of proposals 6 and 7 requires the affirmative vote of a majority
of the shares voted at the meeting, provided a quorum is present.

OTHER MATTERS TO COME BEFORE THE MEETING

The Trustees do not intend to present any other business at the Meeting,
nor are they aware that any shareholder intends to do so. If however, any other
matters are properly brought before the Meeting, the persons named in the
accompanying proxy will vote thereon in accordance with their judgment.

NO ANNUAL MEETINGS OF SHAREHOLDERS

There will be no annual or further special meetings of shareholders of the
Trust unless required by applicable law or called by the Trustees in their
discretion. In accordance with the 1940 Act, or under the Trust's Master Trust
Agreement, as amended, any Trustee may be removed (i) by a written instrument,
signed by at least two-thirds of the number of Trustees in office immediately
prior to such removal, specifying the date upon which such removal shall become
effective; or (ii) by a vote of shareholders holding not less than two-thirds of
the shares of

<PAGE>

the Trust then outstanding, cast in person or by proxy at a meeting called for
the purpose. Shareholders holding 10% or more of the shares of the Trust then
outstanding can require that the Trustees call a meeting of shareholders for the
purpose of voting on the removal of one or more Trustees. In addition, if ten or
more shareholders who have been such for at least six months and who hold in the
aggregate shares with a net asset value of at least $25,000 or at least 1% of
the outstanding Trust shares, inform the Trustees that they wish to communicate
with other shareholders, the Trustees will either give such shareholders access
to the shareholder list or inform them of the cost involved if the Trust
forwards material to shareholders on their behalf. If the Trustees object to
mailing such materials, they must inform the Securities and Exchange Commission
and thereafter comply with the requirements of the 1940 Act.

Shareholders wishing to submit proposals for inclusion in a proxy
statement for a subsequent shareholder meeting should send their written
proposals to the Secretary of the Trust, One Financial Center, Boston,
Massachusetts 02111. Shareholder proposals should be received in a reasonable
time before the solicitation is made.

WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING, PLEASE FILL IN, DATE AND
SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. NO
POSTAGE IS NECESSARY IF IT IS MAILED IN THE UNITED STATES.

__________________, 1995
Date of Proxy Statement

22
<PAGE>

[STATE STREET RESEARCH GOVERNMENT INCOME FUND
STATE STREET RESEARCH STRATEGIC PORTFOLIOS: CONSERVATIVE
STATE STREET RESEARCH STRATEGIC PORTFOLIOS: MODERATE
STATE STREET RESEARCH STRATEGIC PORTFOLIOS: AGGRESSIVE]

a series of

MetLife - State Street Financial Trust

PROXY

Special Meeting of Shareholders - ___________________, 1996

The undersigned hereby appoints Ralph F. Verni, Francis J. McNamara, III
and Darman A. Wing, and each of them, as proxies with full power of substitution
to act for and vote on behalf of the undersigned all shares of [State Street
Research Government Income Fund, State Street Research Strategic Portfolios:
Conservative, State Street Research Strategic Portfolios: Moderate and State
Street Research Strategic Portfolios: Aggressive], a portfolio series of MetLife
- - State Street Financial Trust, which the undersigned would be entitled to vote
if personally present at the Special Meeting of Shareholders to be held at the
principal offices of the Trust, One Financial Center, 31st Floor, Boston,
Massachusetts 02111, at 2 p.m. on ______________________, 1996, or at any
adjournments thereof, on the following items as set forth in the Notice of
Special Meeting of Shareholders and the accompanying Proxy Statement.

If a choice is specified for a proposal, this proxy will be voted as
indicated. IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED FOR THE PROPOSAL.
IF NO CHOICES ARE SPECIFIED FOR ANY PROPOSALS, THIS PROXY WILL BE VOTED FOR ALL
PROPOSALS. In their discretion the proxies are authorized to vote upon such
other business as may properly come before the Meeting. The Board of Trustees
recommends a vote FOR all proposals.

The undersigned acknowledges receipt of the Notice of Special Meeting and
the accompanying Proxy Statement dated _________________, 1995. PLEASE INDICATE
ANY CHANGE OF ADDRESS ON THE REVERSE SIDE. This proxy may be revoked at any time
prior to the exercise of the powers conferred thereby.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES.

CONTINUED AND TO BE SIGNED ON REVERSE SIDE

- -------------------------------------------------------------------------------
SEE REVERSE SIDE
- -------------------------------------------------------------------------------

<PAGE>

1. Election of Trustees. ( ) FOR all nominees listed
below (except as noted in space
provided)

( ) WITHHOLD authority to
vote for all nominees
listed

To withhold authority to vote for any individual nominee, write that nominee's
name in the following space _____________________

- ----------------------------------------------------------------.

Nominees: Edward M. Lamont, Robert A. Lawrence,
Dean O. Morton, Thomas L. Phillips,
Toby Rosenblatt, Michael S. Scott Morton,
Ralph F. Verni, Jeptha H. Wade

2. To reclassify the following investment policies from fundamental policies
to nonfundamental policies:

a. (For Government Income Fund only) Policy regarding investments in
securities of companies with less than three (3) years' continuous
operation; and