Filed Pursuant to Rule 485(a)
As filed with the Securities and Exchange Commission on March 15, 2000.
Registration No. 33-19229; 811-5430
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ( X )
-----
Pre-Effective Amendment No. _____ (_____)
Post-Effective Amendment No. 55 ( X )
----- -----
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 ( X )
-----
Amendment No. 57 ( X )
-----
(Check appropriate box or boxes)
SSgA FUNDS
(Exact Name of Registrant as Specified in Charter)
909 A Street
Tacoma, Washington 98402
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (253) 627-7001
<TABLE>
<CAPTION>
Name and Address of Copies to:
- ------------------- ---------
Agent for Service:
- -----------------
<S> <C>
Karl J. Ege Philip H. Newman, Esq.
Secretary and General Counsel Goodwin, Procter & Hoar
Frank Russell Investment Management Company Exchange Place
909 A Street Boston, Massachusetts 02109
Tacoma, Washington 98402
</TABLE>
Approximate Date of Proposed Public Offering: As soon as
practicable after the effective date of this Registration Statement.
It is proposed that this filing will become effective under Rule 485:
( ) immediately upon filing pursuant to paragraph (b)
( ) on (_____________) pursuant to paragraph (b)
( ) 60 days after filing pursuant to paragraph (a)
( ) on (date) pursuant to paragraph (a)(1)
(_X_) 75 days after filing pursuant to paragraph (a)(2)
( ) on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following:
( ) This post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
<PAGE>
SSgA FUNDS
Form N-1A Cross Reference Sheet
<TABLE>
<CAPTION>
PART A ITEM NUMBER AND CAPTION PROSPECTUS CAPTION
<S> <C> <C>
1. Front and Back Cover Pages Front and Back Cover Pages
2. Risk/Return Summary: Investments, Risks and Investment Objectives and Principal Investment
Performance Strategies; Additional Information about the
Fund's Objectives Investment Strategies
and Risks; Principal Risks; Risk and Return
3. Risk/Return Summary: Fee Table Risk and Return
4. Investment Objectives, Principal Strategies, Investment Objectives and Principal Investment Strategies;
and Related Risks Principal Risks;
(a) Investment Objective
(b) Investment Objectives and Principal Investment Strategies;
Portfolio Turnover; Additional Information about the Fund's Objectives,
Investment Strategies and Risks
(c) Principal Risks
5. Management's Discussion of Fund Performance Annual Reports to Shareholders
6. Management, Organization and Capital Structure Management of the Fund
(a)(1), (2) Investment Advisor
(a)(3) Not Applicable
(b) Not Applicable
7. Shareholder Information
(a) Pricing of Fund Shares
(b) Purchase of Fund Shares
(c) Redemption of Fund Shares
(d) Dividends and Distributions
(e) Taxes
(f) Not Applicable
8. Distribution Arrangements
(a) Fees and Expenses of the Fund
(b) Fees and Expenses of the Fund
(c) Not Applicable
9. Financial Highlights Information Financial Highlights
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PART B ITEM NUMBER AND CAPTION STATEMENT OF ADDITIONAL INFORMATION CAPTION
<S> <C> <C>
10. Cover Page and Table of Contents Cover Page and Table of Contents
11. Fund History Fund History
12. Description of the Fund and Its Investments Description of the Fund and its Investment Risks
and Risks
(a) Description of the Fund and its Investment Risks
(b) Investment Strategies; Investment Risks
(c) Investment Restrictions
(d) Temporary Defensive Position
(e) Portfolio Turnover
13. Management of the Fund
(a), (b), (c) Board of Trustees and Officers
(d) Compensation
(d) Not Applicable
14. Control Persons and Principal Holders of Controlling and Principal Shareholders
Securities
(a), (b), (c) Controlling and Principal Shareholders
15. Investment Advisory and Other Services Investment Advisory and Other Services
(a) Advisor
(b) Distributor
(c), (d) Distribution and Shareholder Servicing Arrangements
(e) Not Applicable
(f) Not Applicable
(g) Distribution Plan and Shareholder Servicing
Arrangements--Distribution Plan
(h) Administrator; Transfer Agent and Custodian;
Independent Public Accountants
16. Brokerage Allocation and Other Policies Brokerage Practices and Commissions
(a), (b), (c) Brokerage Practices and Commissions
(d) Not Applicable
(e) Brokerage Practices and Commissions
17 Capital Stock and Other Securities Capitalization and Voting
(a) Capitalization and Voting
(b) Not Applicable
<PAGE>
18. Purchase, Redemption and Pricing of Shares
(a) Pricing of Fund Shares
(b) Not Applicable
(c) Pricing of Fund Shares
(d) Not Applicable
19 Taxation of the Fund Taxes
20. Underwriters
(a) Distributor
(b), (c) Not Applicable
21. Calculation of Performance Data Calculation of Performance Data
22. Financial Statements Financial Statements
</TABLE>
Part C
Information required to be included in Part C is set forth under the
appropriate item, so numbered in Part C of this Registration Statement.
<PAGE>
Filed pursuant to Rule 485(a)
File Nos. 33-19229; 811-5430
SSgA FUNDS
One International Place
Boston, Massachusetts 02110
1-800-997-7327
www.ssgafunds.com
INTERMEDIATE MUNICIPAL BOND FUND
As with all mutual funds, the Securities and Exchange Commission has neither
determined that the information in this prospectus is accurate and complete, nor
approved or disapproved of these securities. Any representation to the contrary
is a criminal offense.
The Intermediate Municipal Bond Fund seeks to provide federally tax-exempt
current income by investing primarily in a diversified portfolio of municipal
debt securities with a dollar-weighted average maturity of between three and 10
years.
PROSPECTUS DATED _________________, 2000
SUBJECT TO COMPLETION MAY 29, 2000
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective This prospectus shall not constitute an offer to sell or the
solicitation of any offer to buy nor shall there by any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
-1-
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
INVESTMENT STRATEGIES AND PRINCIPAL RISKS........................................................3
INVESTMENT OBJECTIVE..........................................................................3
PRINCIPAL INVESTMENT STRATEGIES...............................................................3
PRINCIPAL RISKS OF INVESTING IN THE FUND......................................................3
RISK AND RETURN...............................................................................4
FEES AND EXPENSES OF THE FUND....................................................................5
MANAGEMENT OF THE FUND...........................................................................6
ADDITIONAL INFORMATION ABOUT THE FUND'S OBJECTIVES, INVESTMENT STRATEGIES AND RISKS..............6
SHAREHOLDER INFORMATION..........................................................................8
PURCHASE OF FUND SHARES.......................................................................8
REDEMPTION OF FUND SHARES....................................................................10
DISTRIBUTION SERVICES AND SHAREHOLDER SERVICING ARRANGEMENTS.................................12
PRICING OF FUND SHARES.......................................................................12
DIVIDENDS AND DISTRIBUTIONS..................................................................13
TAXES........................................................................................13
ADDITIONAL INFORMATION ABOUT THE FUND...........................................................16
</TABLE>
-2-
<PAGE>
INVESTMENT STRATEGIES AND PRINCIPAL RISKS
INVESTMENT OBJECTIVE
The fund's investment objective is to provide federally tax-exempt current
income by investing primarily in a diversified portfolio of municipal debt
securities with a dollar-weighted average maturity of between three and 10
years.
This objective may be changed by the fund's trustees without shareholder
approval.
PRINCIPAL INVESTMENT STRATEGIES
Under normal market conditions, the fund may invest at least 75% of its assets
US government securities as well as in municipal debt obligations in the top
three credit ratings categories (Aaa, Aa, and A for Moody's Investors Services,
Inc., or AAA, AA, and A for Standard and Poor's Corporation). No more than 20%
of the fund's assets may be invested in bonds rated Baa (by Moody's) or BBB (by
Standard and Poor's). The fund may invest the remaining 5% in lower rated or
unrated securities. Please see information about credit quality under
"Additional Information about the Fund's Objectives, Strategies and Risks."
Although the fund does not intend to invest in securities subject to the
Alternative Minimum Tax, it is allowed to do so without limitation.
The Advisor's investment process is a top-down, bottom up discipline. The
Advisor sets, and continually evaluates and adjusts, a duration target for the
fund based upon expectations about the direction of interest rates and other
economic factors. The Advisor then buys and sells securities to achieve the
greatest relative value within the fund's targeted duration (three to 10 years).
Please see "Additional Information about the Fund's Objectives, Investment
Strategies and Risks."
PRINCIPAL RISKS OF INVESTING IN THE FUND
Investment in the fund, like any investment, has risks. Fund shares will rise
and fall in value and there is a risk you could lose money by investing in the
fund. There can be no assurance that the fund will achieve its objective. An
investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
Because the fund may be 75% or more invested in US government securities as well
as municipal debt obligations, its returns may be less than a fund which can
invest without limitation in all types of securities.
Risks of Municipal Obligations. Municipal obligations are affected by economic,
business or political developments. These securities may be less subject to
provisions of litigation, bankruptcy and other laws affecting the rights and
remedies of creditors, or may become subject to future laws extending the time
for payment of principal and/or interest, or limiting the rights of
municipalities to levy taxes.
Interest Rate Risk. The chance that bond prices overall will decline over short
or even long periods due to rising interest rates. Interest rate risk is
generally moderate for intermediate-term bonds.
Income Risk. The chance that falling interest rates will cause the fund's income
to decline. Income risk is generally moderate for intermediate-term bonds.
Call Risk. The chance that during periods of falling interest rates, a bond
issuer will call--or repay--a high-yielding bond before the bond's maturity
date. Forced to reinvest the unanticipated proceeds at lower interest rates, the
fund would experience a decline in income and the potential for taxable capital
gains. Call risk is generally moderate for intermediate-term bonds.
Credit Risk. The chance that a bond issuer will fail to repay interest and
principal in a timely manner. Credit risk, which has the potential to hurt the
fund's performance, should be low for the fund due to its policy of purchasing
mostly high quality bonds.
Manager Risk. The chance that poor security selection will cause the fund to
underperform other funds with similar investment objectives.
Tax Risks of Municipal Securities. The yields and market values of Municipal
Securities may be more adversely impacted by changes in tax rates and policies
than taxable fixed-income securities. Because interest income from Municipal
Securities is normally not subject to regular federal income taxation, the
attractiveness of Municipal Securities in relation to other investment
alternatives is affected by changes in federal income tax rates applicable to,
or the continuing federal income tax-exempt status of, such interest income. Any
proposed or actual changes in such rates or exempt status, therefore, can
significantly affect the demand for and supply,
-3-
<PAGE>
liquidity and marketability of Municipal Securities, which could in turn affect
a fund's ability to acquire and dispose of Municipal Securities at desirable
yield and price levels.
RISK AND RETURN
The Intermediate Municipal Bond Fund has not been in existence for a full
calendar year. Therefore, performance information is not available. The
prospectus will be updated when information is available. This fund will begin
operating in June 2000.
-4-
<PAGE>
FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.
<TABLE>
<S> <C>
Shareholder Fees (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases None
Maximum Deferred Sales Charge (Load) None
Maximum Sales Charge (Load) Imposed on Reinvested
Dividends or Other Distributions None
Redemption Fee None
Exchange Fee None
Maximum Account Fee None
Annual Fund Operating Expenses
(expenses that are deducted from fund assets)
Management Fee(1) .30%
Distribution and Service (12b-1) Fees(2) .10
Total Other Expenses(1, 2) .53
----
Gross Expenses .93
Less Contractual Management Fee Reimbursement(1) (.28)
----
Total Annual Fund Operating Expenses after
Reimbursement(1, 2) .65%
====
</TABLE>
Example
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated, and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions, your costs would be:
<TABLE>
<CAPTION>
1 year 3 years
<S> <C>
$66 $208
=== ====
</TABLE>
Investors purchasing fund shares through a financial intermediary, such as a
bank or an investment advisor, may also be required to pay additional fees for
services provided by the intermediary. Such investors should contact the
intermediary for information concerning what additional fees, if any, will be
charged.
Long-term shareholders of the fund may pay more in Rule 12b-1 fees than the
economic equivalent of the maximum front-end sales charge permitted by the
National Association of Securities Dealers, Inc.
(1) The Advisor has contractually agreed to reimburse the fund for all expenses
in excess of .65% of average daily net assets on an annual basis until
December 31, 2002.
(2) The ratio includes .04% for 12b-1 Distribution and .06% for 12b-1
Shareholder Servicing Fees.
<PAGE>
MANAGEMENT OF THE FUND
Investment Advisor. State Street Bank and Trust Company (State Street or
Advisor), One International Place, Boston, Massachusetts 02110, serves as the
investment advisor for the fund and directs the investment of the fund in
accordance with the fund's investment objective, policies and restrictions.
State Street is one of the largest providers of securities processing and record
keeping services for US mutual funds and pension funds. State Street Global
Advisors ("SSgA") is the investment management business of State Street, a
200-year old pioneer and leader in the world of financial services. State Street
is a wholly-owned subsidiary of State Street Corporation, a publicly held bank
holding company. State Street, with over $667 billion under management as of
December 31, 1999, provides complete global investment management services from
offices in North America, South America, Europe, Asia, Australia and the Middle
East.
For these services, the fund pays State Street an annual management fee,
calculated daily and paid monthly, of 0.02% (after fee reimbursement) of the
average daily net asset value of the fund.
Ms. Deborah B. Vargo, Principal, is the lead portfolio manager primarily
responsible for investment decisions regarding the fund. Ms. Vargo has been with
the firm since 1984. She is responsible for trading and investment strategies
pertaining to the tax-exempt municipal bond market and has been dedicated to
this asset class for over 13 years. At SSgA, she has managed corporate cash,
tax-exempt common trust funds and a large public utility account. Ms. Vargo's
work with the utility relationship resulted in her garnering the Chairman's
Award for Excellence. She holds a BS in Finance from Boston University. There
are five other portfolio managers who assist in managing the fund.
ADDITIONAL INFORMATION ABOUT THE FUND'S
OBJECTIVES, INVESTMENT STRATEGIES AND RISKS
The fund's investment objective is non-fundamental. A non-fundamental investment
objective may be changed by the fund's trustees without shareholder approval.
The investment policies described below reflect the fund's current practices. In
addition to the principal risks explained above, other risks are explained in
some of the descriptions of the investment policies below.
The Advisor's investment process is a top-down, bottom up discipline, which is
also comprised of the following components: evaluation, construction and
implementation. Each component stage is designed to add value to the investment
process and result in favorable return over a benchmark index or peer group
competition. The Advisor sets, and continually evaluates and adjusts, a duration
target for the fund based upon expectations about the direction of interest
rates and other economic factors. The Advisor then buys and sells securities to
achieve the greatest relative value within the fund's targeted duration (three
to 10 years). In the construction phase, the Advisor builds the portfolio based
on the conclusions reached in the evaluation phase. The Advisor researches bond
issuers to find attractive credit characteristics. The Advisor then determines
the relative value in the market at any point in time. The Advisor purchases
only those securities which have been deemed creditworthy. In the implementation
phase, the Advisor conducts analyses of historical versus current sector spread
relationships to uncover trends and trading opportunities between sectors,
regions and individual issuers. This allows the Advisor to create an ideal mix
of sectors and securities for the fund.
The fund will invest at least 75% of its net assets in tax-exempt securities
under normal market conditions. The fund invests in municipal bonds that,
depending on their maturity and quality, provide varying amounts of tax-exempt
income. The fund is therefore subject to certain risks. The performance
objective of the Municipal Bond Fund is to generate competitive current income
and outperform its chosen benchmark or peer group representation before
expenses.
Information on Municipal Bond Funds. Municipal bond funds invest in
interest-bearing securities issued by states, territories and possessions of the
United States and District of Columbia and political subdivisions, agencies and
authorities to support their financial needs or to finance public projects. A
municipal bond, like a bond issued by a corporation or the US government,
obligates the issuer to pay the bondholder a fixed or variable amount of
interest periodically, and to repay the principal value of the bond on a
specific maturity date.
Unlike most other bonds, however, municipal bonds pay interest that is exempt
from federal income taxes and, in some cases, also from state and local taxes.
Municipal bonds, and municipal bond funds, can therefore be advantageous to
investors in higher tax brackets. However, because the interest is tax-exempt,
municipal bond yields typically are lower than yields on taxable bonds and bond
funds with comparable maturity ranges.
-6-
<PAGE>
Municipal Securities. The fund may purchase municipal securities issued by or on
behalf of public authorities to obtain funds to be used for various public
purposes, including general purpose financing for state and local governments,
refunding outstanding obligations, and financings for specific projects or
public facilities. General obligations are backed by the full faith and credit
of the issuer. These securities include tax anticipation notes, bond
anticipation notes and general obligation bonds. Revenue obligations are backed
by the revenues generated from a specific project or facility and include
industrial development bonds and private activity bonds. Private activity and
industrial development bonds are dependent on the ability of the facility's user
to meet its financial obligations and the value of any real or personal property
pledged as security for such payment. Private activity and industrial
development bonds, although issued by industrial development authorities, may be
backed only by the assets of the non-governmental users. Municipal notes are
short-term instruments which are issued and sold in anticipation of a bond sale,
collection of taxes or receipt of other revenues.
Some municipal securities are insured by private insurance companies, while
others may be supported by letters of credit furnished by domestic or foreign
banks. In determining the credit quality of insured or letter of credit backed
securities, the Advisor reviews the financial condition and creditworthiness of
such parties including insurance companies, banks and corporations.
Municipal obligations involve possible risks, including being affected by
economic, business and political developments and being subject to provisions of
litigation, bankruptcy and other laws affecting the rights and remedies of
creditors. Future laws may be effected extending the time for payment of
principal and/or interest, or limiting the rights of municipalities to levy
taxes. For instance, legislative proposals are introduced from time to time to
restrict or eliminate the federal income tax exemption for municipal obligations
interest. If such legislation is adopted, the Board of Trustees will re-evaluate
the fund's investment objective and may submit possible changes in the structure
of the fund to its shareholders.
Taxable Investments. From time to time, on a temporary basis other than for
temporary defensive purposes (but not to exceed 20% of the value of the fund's
net assets) or for temporary defensive purposes, the fund may invest in taxable
short-term investments ("Taxable Investments") consisting of: notes of issuers
having, at the time of purchase, a quality rating within the two highest grades
of a Rating Agency (see "Ratings of Municipal Obligations," below); obligations
of the US Government, its agencies or instrumentalities; commercial paper rated
not lower than P-1 by Moody's, A-1 by S&P or F-1 by Fitch; certificates of
deposit of US domestic banks, including foreign branches of domestic banks, with
assets of $1 billion or more; time deposits; bankers' acceptances and other
short-term bank obligations; and repurchase agreements in respect of any of the
foregoing. Dividends paid by the fund that are attributable to income earned by
the fund from Taxable Investments will be taxable to investors. For more
information, please see the sections in this prospectus called "Dividends and
Distributions" and "Taxes." Under normal market conditions, the fund anticipates
that not more than 5% of the value of its total assets will be invested in any
one category of Taxable Investments.
Credit Quality. A bond's credit quality depends on the issuer's ability to pay
interest on the bond and, ultimately, to repay the debt. The lower the rating by
one of the independent bond-rating agencies (for example, Moody's or Standard &
Poor's), the greater the chance (in the rating agency's opinion) the bond issuer
will default, or fail to meets is payment obligations. All things being equal,
the lower a bond's credit rating, the higher its yield should be to compensate
investors for assuming additional risk. Bonds rated in one of the four ratings
categories are considered "investment grade." These types of bonds will comprise
up to 95% of the fund's portfolio under normal market conditions. The fund may
invest up to 5% of its assets in debt securities rated less than BBB- by S&P or
Baa by Moody's, or in unrated securities judged by the Advisor to be of
comparable quality. Lower rated debt securities generally offer a higher yield
than that available from higher grade issues. However, lower rated debt
securities involve higher risks than investment-grade bonds, in that they are
especially subject to adverse changes in general economic conditions and, in the
industries in which the issuers are engaged, to changes in the financial
condition of the issuers and to price fluctuation in response to changes in
interest rates. Debt rated BB, B, CCC, CC and C by S&P, and debt rated Ba, B,
Caa, Ca and C by Moody's, is regarded as predominantly speculative with respect
to the issuer's capacity to pay interest and repay principal in accordance with
the terms of the obligation. For S&P, BB indicates the lowest degree of
speculation and D the highest. For Moody's, Ba indicates the lowest degree of
speculation and C the highest. These lower rated debt securities may include
obligations that are in default or that face the risk of default with respect to
principal or interest. Such securities are sometimes referred to as "junk
bonds." The fund may invest in unrated securities if the underlying rating is
deemed appropriate and/or the issuer does not choose to apply for a rating. This
can occur in a pre-refunding situation or when an issuer has temporary,
short-term needs.
Ratings of Municipal Obligations. The fund will invest at least 75% of the value
of its net assets in municipal obligations which, in the case of bonds, are
rated no lower than A by Moody's Investors Service, Inc. ("Moody's"), Standard &
Poor's Ratings Group ("S&P") or Fitch IBCA, Inc. ("Fitch" and, together with
Moody's and S&P, the "Rating Agencies"). The fund may invest up to 20% of the
value of its net assets in municipal obligations which, in the case of bonds,
are rated Baa by Moody's or BBB by S&P. The fund may invest the remaining 5% of
the value of its net assets in Municipal Obligations which are rated lower than
the top four credit categories by the Rating Agencies and as low as the lowest
rating assigned by the Rating Agencies. The fund also may invest in securities
which, while not rated, are determined by the Advisor to be of comparable
quality to the rated securities in which the fund
-7-
<PAGE>
may invest; for purposes of the 75% requirement described in this paragraph,
such unrated securities will be considered to have the rating so determined.
Subsequent to its purchase by the fund, an issue of rated municipal obligations
may cease to be rated or its rating may be reduced below the minimum required
for purchase by the fund. Neither event will require the sale of such municipal
obligations by the fund, but the Advisor will consider such event in determining
whether the fund should continue to hold the municipal obligations. To the
extent that the ratings given by a Rating Agency for municipal obligations may
change as a result of changes in such organization or its rating system, the
fund will attempt to use comparable ratings as standards for its investments in
accordance with the investment policies contained in the this prospectus and the
fund's Statement of Additional Information. The ratings of the Rating Agencies
represent their opinions as to the quality of the Municipal Obligations which
they undertake to rate. It should be emphasized, however, that ratings are
relative and subjective and are not absolute standards of quality. Although
these ratings may be an initial criterion for selection of portfolio
investments, the Manager also will evaluate these securities and the
creditworthiness of the issuers of such securities.
US Government Securities. US Government securities include US Treasury bills,
notes and bonds and other obligations issued or guaranteed as to interest and
principal by the US Government, its agencies or instrumentalities. Obligations
issued or guaranteed as to interest and principal by the US Government, its
agencies or instrumentalities include securities that are supported by the full
faith and credit of the United States Treasury, securities that are supported by
the right of the issuer to borrow from the United States Treasury, discretionary
authority of the US Government agency or instrumentality, and securities
supported solely by the creditworthiness of the issuer.
Variable and Floating Rate Securities. The fund may purchase variable rate
securities which are instruments issued or guaranteed by entities such as
municipalities and other issuers of municipal securities. The fund may also
purchase floating rate securities. A floating rate security provides for the
automatic adjustment of its interest rate whenever a specified interest rate
changes. Generally, changes in interest rates will have a smaller effect on the
market value of variable and floating rate securities than on the market value
of comparable fixed income obligations. Thus, investing in variable and floating
rate securities generally allows less opportunity for capital appreciation and
depreciation than investing in comparable fixed income securities.
Variable and floating rate securities are subject to interest rate risk, the
risk that when interest rates increase, fixed-income securities held by a fund
will decline in value. Long-term fixed-income securities will normally have more
price volatility because of this risk than short-term securities. They are also
subject to credit/default risk, the risk that an issuer of fixed-income
securities held by a fund (which may have low credit ratings) may default on its
obligation to pay interest and repay principal.
The fund may purchase floating and variable rate demand notes and bonds, which
are tax exempt obligations ordinarily having stated maturities in excess of one
year, but which permit the holder to demand payment of principal at any time or
at specified intervals. Variable rate demand notes include master demand notes
which are obligations that permit the fund to invest fluctuating amounts, at
varying rates of interest, pursuant to direct arrangements between the Fund, as
lender, and the borrower. These obligations permit daily changes in the amount
borrowed. Because these obligations are direct lending arrangements between the
lender and borrower, it is not contemplated that such instruments generally will
be traded, and there generally is no established secondary market for these
obligations, although they are redeemable at face value, plus accrued interest.
Accordingly, where these obligations are not secured by letters of credit or
other credit support arrangements, the fund's right to redeem is dependent on
the ability of the borrower to pay principal and interest on demand. Each
obligation purchased by the fund will meet the quality criteria established for
the purchase of municipal obligations.
SHAREHOLDER INFORMATION
PURCHASE OF FUND SHARES
Distribution and Eligible Investors. Shares of the funds are offered without a
sales load by Russell Fund Distributors, Inc. (the Distributor), to
institutional and retail investors which invest for their own account or in a
fiduciary or agency capacity.
Minimum Initial and Subsequent Investments and Account Balance. The fund
requires a minimum initial investment of $1,000, with the exception of IRA
accounts, for which the minimum initial investment is $250. Subsequent
investments must be at least $100. An investment in the account (other than IRA
accounts) may be subject to redemption at the fund's discretion if the account
balance is less than $1,000 as a result of shareholder redemptions. The Transfer
Agent will give shareholders 60 days' notice that the account will be closed
unless an investment is made to increase the account balance to the $1,000
minimum. Failure to bring the account balance to $1,000 may result in the
Transfer Agent closing the account at the net asset value (NAV) next determined
on the day the
-8-
<PAGE>
account is closed and mailing the proceeds to the shareholder's address shown on
the Transfer Agent's records. The fund reserves the right to reject any purchase
order. If you are purchasing fund assets through a pension or other
participation plan, you should contact your plan administrator for further
information on purchases.
Purchase Dates and Times. Fund shares may be purchased on any business day. A
business day is one on which the New York Stock Exchange is open for regular
trading. All purchases must be made in US dollars. Purchase orders in good form
(described below) and payments for fund shares by check or by wire transfer must
be received by the Transfer Agent prior to the close of the regular trading
session of the New York Stock Exchange, which is ordinarily 4 p.m. Eastern time
(the "Pricing Time"), to be effective on the date received. If an order or
payment is received after the Pricing Time, the order will be effective on the
next business day. Orders placed through a servicing agent or broker-dealer that
has a selling or servicing agreement with the Distributor or the SSgA Funds must
be received by the servicing agent or broker-dealer prior to the Pricing Time.
Order and Payment Procedures. There are several ways to invest in the funds. The
funds require a purchase order in good form, which consists of a completed and
signed Application for each new account, unless the account is opened through a
third party which has a signed agreement with the Distributor or the SSgA Funds
and does not require a completed application to be submitted to the SSgA Funds.
For additional information, including the IRA package, additional Applications
or other forms, call the Customer Service Department at 1-800-647-7327, or
write: SSgA Funds, P.O. Box 8317, Boston, MA 02266-8317. You may also access
this information online at www.ssgafunds.com.
Mail. For new accounts, please mail the completed Application and check.
Additional investments should also be made by check. You must include the fund
name and account number on your check, or use the remittance form attached to
the confirmation statement (in the return envelope provided). All checks should
be made payable to the SSgA Funds or State Street Bank. If using a servicing
agent or broker-dealer, please verify with them before wiring and mailing your
check. All purchase requests should be mailed to one of the following addresses:
Regular Mail: Registered, Express or Certified Mail:
SSgA Funds SSgA Funds
P.O. Box 8317 2 Heritage Drive
Boston, MA 02266-8317 North Quincy, MA 02171
All purchases made by check should be in US dollars from a US bank. Third party
checks and checks drawn on credit card accounts will not be accepted.
Telephone Exchange Privilege. You may exchange a minimum of $100 of your shares
for shares of any other SSgA Fund, as long as the minimum investment requirement
is met. The fund offers this service without charge. To use this option, contact
the Customer Service Department at 1-800-647-7327. Shares are exchanged on the
basis of relative net asset value per share on the business day on which the
call is placed or upon written receipt of instructions in good form by the
Transfer Agent. Exchanges may be made over the phone if the registrations of the
two accounts are identical. If you purchased shares of the fund by check, the
shares must have been present in your account for 15 days before the exchange is
made. The exchange privilege will only be available in states which permit
exchanges and may be modified or terminated by the fund upon 60 days' written
notice to shareholders. For Federal income tax purposes, an exchange constitutes
a sale of shares, which may result in a capital gain or loss. Please contact
your tax advisor.
Management believes that market timing strategies may be disruptive to the fund.
For this reason, the Investment Company reserves the right to refuse or restrict
an exchange by any person if the Investment Company reasonably believes that an
exchange is part of a market timing strategy and that the fund may be adversely
affected by the exchange. Although the Investment Company will attempt to give
you prior notice whenever it is reasonably able to do so, it may impose these
restrictions at any time. Of course, your right to redeem shares would be
unaffected by these restrictions.
Each fund reserves the right to terminate or modify the exchange privilege in
the future.
Federal Funds Wire. You may make initial or subsequent investments by wiring
federal funds to State Street, as Transfer Agent, by:
1. Telephoning the Customer Service Department at 1-800-647-7327 between 8 a.m.
and 4 p.m. Eastern time, and stating: (a) your account registration number,
address and social security or tax identification number; (b) the name of
the fund in which the investment is to be made and the account number; and
(c) the exact amount being wired.
2. Instructing the wiring bank to wire federal funds to:
State Street Bank and Trust Company
-9-
<PAGE>
225 Franklin Street, Boston, MA 02110
ABA #0110-0002-8
DDA #9904-631-0
SSgA (Name of Fund) Fund(s)
Account Number and Registration
Dollar Amount Per Account (if one wire is to cover more than one purchase)
If all wires, checks and transfers are not identified properly as instructed
above, the Transfer Agent may delay, reject and/or incorrectly apply the
settlement of your purchase. Any wires received at State Street Bank without a
corresponding call into the Customer Service Department will be purchased as
indicated on the wire at the next determined net asset value and will earn the
dividend declared on the next business day.
Automatic Investment Plan. Once the initial investment has been made, you may
make subsequent investments of $100 or more monthly, quarterly or annually by
direct deposit through Automatic Clearing House (ACH) by debiting your bank
checking account. Please complete the appropriate section of the Application and
attach a voided personal check to correctly code your account with the bank
instructions. Once this option has been established, you may call the Customer
Service Department at 1-800-647-7327 prior to 3 p.m. Eastern time to make
additional automatic purchases, to change the amount of the existing automatic
purchase, or to stop it. Shares will be purchased at the offering price next
determined following receipt of the order by the Transfer Agent.
Systematic Exchange. The fund offers the option of having $100 or more exchanged
within the SSgA Funds for accounts with identical registrations. You can choose
the date, the frequency (monthly, quarterly or annually) and the amount.
Exchanges may be done among the SSgA Funds once the minimum initial investment
per fund has been satisfied.
Third Party Transactions. If you are purchasing fund shares through a program of
services offered by a financial intermediary, such as a bank, broker-dealer,
investment advisor or others, you may be required by the intermediary to pay
additional fees. You should contact the intermediary for information concerning
what additional fees, if any, may be charged.
In-Kind Exchange of Securities. The fund may, at its discretion, permit you to
purchase shares through the exchange of other securities you own. Any securities
exchanged must meet the following criteria:
1. The investment objective, policies and limitations must match that of the
fund;
2. They must have a readily ascertainable market value;
3. They must be liquid;
4. They must not be subject to restrictions on resale; and
5. The market value of any securities exchanged, plus any cash, must be at
least $25 million; the fund reserves the right to make exceptions to this
minimum at its discretion.
Shares purchased in exchange for securities generally may not be redeemed or
exchanged until the transfer has settled--within 3 business days following the
purchase exchange.
The basis of the exchange will depend upon the relative net asset value of the
shares purchased and securities exchanged. Securities accepted by the fund will
be valued in the same manner as the fund values its assets. Any interest earned
on the securities following their delivery to the Transfer Agent and prior to
the exchange will be considered in valuing the securities. All interest,
dividends subscription or other rights attached to the securities become the
property of the fund, along with the securities.
REDEMPTION OF FUND SHARES
Fund shares may be redeemed on any business day at the net asset value next
determined after the receipt of a redemption request in good order by following
one of the methods described below. Typically, payments will be made as soon as
possible (but will ordinarily not exceed seven days) and will be mailed to your
address of record. Upon request, redemption proceeds will be wire transferred to
your account at a domestic commercial bank that is a member of the Federal
Reserve System. If you purchased fund shares by check or an automatic investment
program (AIP) and you elect to redeem shares within 15 days of the purchase, you
may experience delays in receiving redemption proceeds. In this case, the fund
will generally postpone sending redemption proceeds until it can verify that the
check or AIP investment has been collected. There will be no such delay for
redemptions following investments paid by federal funds wire or by bank
cashier's check, certified check or treasurer's check.
Redemption requests must be received prior to 4 p.m. Eastern time in order to be
effective on the date received. Shareholder servicing agents with underlying
shareholders in omnibus accounts who receive redemption requests by 4 p.m.
Eastern time may transmit the
-10-
<PAGE>
request to the Transfer Agent by 9 a.m. Eastern time the next business day to
receive the net asset value and dividend as of the prior business day, pursuant
to a duly executed Shareholder Servicing Agreement with the SSgA Funds or the
Distributor.
Telephone Redemption. Shareholders may normally redeem fund shares by
telephoning the Customer Service Department at 1-800-647-7327 between 8 a.m. and
4 p.m. Eastern time. You must complete the appropriate section of the
application and attach a voided check to code your account correctly with the
bank information before utilizing this feature. The fund and the Transfer Agent
will employ reasonable procedures to confirm that instructions communicated by
telephone are properly authorized. Neither the fund, the Distributor nor the
Transfer Agent will not be responsible for any loss or expense for executing
instructions that are deemed to be authorized and genuine after following
reasonable procedures. These procedures include recording telephonic
instructions, mailing to the shareholder a written confirmation of the
transaction, performing a personal identity test with private information not
likely to be known by other individuals, and restricting mailing of redemptions
to your address of record, if the address has not been changed within 60 days of
the redemption request. To the extent the Transfer Agent fails to use reasonable
procedures as a basis for its belief, it and/or its service contractors may be
liable for telephone instructions that prove to be fraudulent or unauthorized.
The fund, the Distributor or the Transfer Agent will be responsible for the
authenticity of terminal access instructions only if it acts with willful
misfeasance, bad faith or gross negligence.
By Wire. Proceeds exceeding $1,000 may be sent via wire transfer to your bank as
previously indicated on your application or letter of instruction in good order.
The shares will be redeemed from the account on the day the redemption
instructions are received and the proceeds wire will be sent the following
business day. Although the fund does not charge a fee for this feature, your
bank may charge a fee for receiving the wire. Please check with your bank before
requesting this feature. If bank instructions are not indicated on the account,
a signature guaranteed letter of instruction is required to add the bank
information to send proceeds via wire.
Systematic Withdrawal Plan by Check. If your account balance is over $10,000,
you may request periodic cash withdrawals automatically be paid to you or any
person you designate. If the checks are returned to the fund as undeliverable or
remain uncashed for six months or more, the systematic withdrawal plan will be
cancelled and the amount will be reinvested in the relevant fund at the per
share net asset value determined as of the date of the cancellation of the
checks. No interest will accrue on the amounts represented by the uncashed
distributions or redemption checks.
Systematic Withdrawal Plan by ACH. You may make automatic withdrawals of $100 or
more by completing the appropriate sections of the Application and attaching a
voided check to code your account correctly with the bank information. You may
also choose to establish this option with pre-designated withdrawal dates and
amounts, if the account balance is over $10,000 or by calling the Customer
Service Department at 1-800-647-7327, prior to 3 p.m. Eastern time, requesting
the withdrawal. Withdrawals by telephone do not require a minimum account
balance provided the fund's minimum investment is maintained.
Please note that proceeds from ACH withdrawals will be transmitted to the
investor's bank two days after the withdrawal.
Check. Proceeds less than $50,000 may be mailed only to the address shown on the
Transfer Agent's registration record, provided that the address has not been
changed within 60 days of the redemption request. Shares will be redeemed using
that day's closing price. All proceeds by check will normally be sent the
following business day.
During periods of drastic economic or market changes, shareholders using this
method may encounter delays.
Mail. In certain circumstances, a shareholder will need to make a request to
sell shares in writing (please use the addresses for purchases by mail listed
under "Purchase of Fund Shares"). The shareholder may need to include additional
items with the request, as shown in the table below. Shareholders may need to
include a signature guarantee, which protects them against fraudulent orders. A
signature guarantee will be required if:
1. Your address of record has changed within the past 60 days;
2. You are redeeming more than $50,000 worth of shares; or
3. You are requesting payment other than by a check mailed to the address of
record and payable to the registered owner(s).
Signature guarantees can usually be obtained from the following sources:
1. A broker or securities dealer, registered with a domestic stock exchange;
2. A federal savings, cooperative or other type of bank;
3. A savings and loan or other thrift institution;
4. A credit union; or
5. A securities exchange or clearing agency.
-11-
<PAGE>
Please check with the institution prior to signing to ensure that they are an
acceptable signature guarantor. A NOTARY PUBLIC CANNOT PROVIDE A SIGNATURE
GUARANTEE.
<TABLE>
<CAPTION>
Seller Requirements for Written Requests
<S> <C>
o Letter of instruction, signed by all persons
Owner of individual, joint, authorized to sign for the account stating general
sole proprietorship, titles/capacity, exactly as the account is
UGMA/UTMA (custodial registered; and
accounts for minors) or o Signature guarantee, if applicable (see above).
general partner accounts
------------------------------ -------------------------------------------------------
o Letter of instruction signed by authorized
Owners of corporate or person(s), stating capacity as indicated by the
association accounts corporate resolution;
o Corporate resolution, certified within the past
90 days; and
o Signature guarantee, if applicable (see above).
------------------------------ -------------------------------------------------------
o Letter of instruction, signed by all trustees;
Owners or trustees of trust o If the trustees are not named in the
accounts registration, please provide a copy of the trust
document certified within the past 60 days; and
o Signature guarantee, if applicable (see above).
------------------------------ -------------------------------------------------------
o Letter of instruction signed by surviving
Joint tenancy shareholders tenant(s);
whose co-tenants are deceased o Certified copy of the death certificate; and
o Signature guarantee, if applicable (see above).
</TABLE>
Please contact the Customer Service Department at 1-800-647-7327 for questions
and further instructions.
The fund may pay any portion of the redemption amount in excess of $25 million
by a distribution in kind of readily marketable securities from the portfolio of
the fund in lieu of cash. You will incur brokerage charges on the sale of these
portfolio securities. The fund reserves the right to suspend the right of
redemption or postpone the date of payment if emergency conditions, as specified
in the 1940 Act or as determined by the Securities and Exchange Commission,
should exist.
DISTRIBUTION SERVICES AND SHAREHOLDER SERVICING ARRANGEMENTS
The fund has adopted a distribution plan pursuant to Rule 12b-1 (the Plan) under
the Investment Company Act of 1940. The Plan allows the fund to pay distribution
and other fees for the sale and distribution of fund shares and for services
provided to shareholders. Because these fees are paid out of fund assets on an
ongoing basis, over time these fees will increase the cost of your investment
and may cost you more than paying other types of sales charges. Payments to the
Distributor, as well as payments from the fund to service organizations
providing shareholder services to the fund, are not permitted by the Plan to
exceed .25% of a fund's average net asset value per year. Any payments that are
required to be made to the Distributor or service organization that cannot be
made because of the .25% limitation may be carried forward and paid in
subsequent years so long as the Plan is in effect.
-12-
<PAGE>
Service organizations providing shareholder services to the fund will be
responsible for prompt transmission of purchase and redemption orders and may
charge fees for their services.
PRICING OF FUND SHARES
The fund determines the price per share once each business day at 4:00 p.m.
Eastern time, or the close of regular trading on the New York Stock Exchange, if
earlier. The price is computed by dividing the current value of the fund's
assets, less its liabilities, by the number of shares of the fund outstanding
and rounding to the nearest cent.
The fund values portfolio securities at market value. The fund values securities
for which market quotations are not readily available at fair value, as
determined in good faith pursuant to procedures established by the Board of
Trustees.
Debt obligation securities maturing within 60 days of the valuation date are
valued at amortized cost unless the Board determines that the amortized cost
method does not represent market value.
DIVIDENDS AND DISTRIBUTIONS
The Board of Trustees intends to declare and pay dividends on shares of the fund
quarterly from net investment income. Distributions will be made at least
annually from net short- and long-term capital gains, if any, generally in
mid-October. It is intended that an additional distribution may be declared and
paid in December if required for the fund to avoid the imposition of a 4%
federal excise tax on undistributed capital gains.
Dividends declared in October, November or December and payable to shareholders
of record in such months will be deemed for Federal income tax purposes to have
been paid by the fund and received by shareholders on December 31 of that year
if the dividend is paid prior to February 1 of the following year.
Income dividends and capital gains distributions will be paid in additional
shares at their net asset value on the record date unless you have elected to
receive them in cash. You may make this election by giving 30 days' written
notice to the Transfer Agent. If it is determined that the US Postal Service
cannot properly deliver fund mailings to you, or if a check remains uncashed for
at least six months, the cash election will be changed automatically. Future
dividends and other distributions will be reinvested in additional shares of the
relevant fund until you notify the SSgA Funds in writing of the correct address.
You must also request in writing that the election to receive dividends and
other distributions in cash be reinstated. In addition, following the six-month
period, any undeliverable or uncashed checks will be cancelled and the amounts
will be reinvested in the relevant fund at the per share net asset value
determined as of the date of cancellation of the checks. No interest will accrue
on the amounts represented by the uncashed distribution or redemption checks.
Any dividend or capital gain distribution paid by the fund shortly after a
purchase of shares will reduce the per share net asset value of the fund by the
amount of the dividend or distribution. In effect, the payment will represent a
return of capital to the shareholder. However, you will be subject to taxes with
respect to such dividend or distribution.
Distribution Option. You can choose from four different distribution options as
indicated on the account Application:
o Reinvestment Option--Dividends and capital gains distributions will be
automatically reinvested in additional shares of the fund. If you do not
indicate a choice on the Application, this option will be automatically
assigned.
o Income-Earned Option--Capital gain distributions will be automatically
reinvested, but a check or wire will be sent for each dividend distribution.
o Cash Option--A check, wire or direct deposit (ACH) will be sent for each
dividend and capital gain distribution.
o Direct Dividends Option--Dividends and capital gain distribution will be
automatically invested in another identically registered SSgA Fund.
Distributions will be sent to a pre-designated bank by the Automatic Clearing
House ("ACH") by the payable date, if the Cash Option is selected.
TAXES
The tax discussion in this prospectus is only a summary of certain federal
income tax issues generally affecting the fund and its shareholders.
Circumstances among investors may vary, so you are encouraged to discuss
investment in the fund with your tax advisor.
-13-
<PAGE>
Because the yields on municipal bond funds and other tax-exempt funds are
usually lower than those on taxable bond funds, you may not always benefit from
a tax-exempt investment. Some taxable investments may serve you better. To
determine which is more suitable, figure out the tax-exempt fund's taxable
equivalent yield. You do this by dividing the fund's tax-exempt yield by the
total of 100% minus your tax bracket. For example, if you are in the 28% federal
tax bracket, and you can earn a tax-exempt yield of 5%, the taxable equivalent
yield would be 6.94% (5.0% divided by 72% [100% minus 28%]). In this example,
you would choose the tax-exempt fund if its taxable equivalent yield of 6.94%
were greater than the yield of a similar, though taxable investment.
The fund intends to qualify as a regulated investment company (RIC) under
Subchapter M of the Internal Revenue Code of 1986, as amended (the Code). As a
RIC, the fund will not be subject to federal income taxes to the extent it
distributes its net investment income and net capital gain (long-term capital
gains in excess of short-term capital losses) to its shareholders. The Board
intends to distribute each year substantially all of the fund's net investment
income and net capital gain.
Distributions by the fund that are designated as "exempt-interest dividends"
generally may be excluded from the shareholder's gross income. Dividends from
taxable net investment income and distributions of net short-term capital gains
are taxable to shareholders as ordinary income under federal income tax laws
whether paid in cash or in additional shares. Distributions from net long-term
gains are taxable as long-term gains regardless of the length of time a
shareholder has held such shares and whether paid in cash or additional shares.
Certain tax-exempt bonds whose proceeds are used to fund private, for-profit
organizations are subject to the alternative minimum tax, a special tax system
that ensures that individuals pay at least some federal taxes. Although
alternative minimum tax bond income is exempt from regular federal income tax, a
very limited number of taxpayers who have many tax deductions may have to pay
alternative minimum tax on the income from bonds considered tax-preference
items. The fund may purchase certain private activity securities whose interest
is subject to the federal alternative minimum tax for individuals. If the fund
purchases such securities, investors who are subject to the alternative minimum
tax will be required to report a legally determined portion of the fund's
dividends as a tax preference item in determining their federal tax.
Dividends and distributions may also be subject to state or local taxes.
Depending on the state tax rules pertaining to a shareholder, a portion of the
dividends paid by the fund attributable to direct obligations of the US Treasury
and certain agencies may be exempt from state and local taxes.
You will be notified after each calendar year of the amount of income dividends
and net capital gains distributed. You will also be advised of the percentage,
if any, of the dividends by the fund that are exempt from federal income tax and
the portion, if any, of those dividends that is a tax preference item for
purposes of the alternative minimum tax. The fund is required to withhold a
legally determined portion of all taxable dividends, distributions and
redemption proceeds payable to any noncorporate shareholder that does not
provide the fund with the shareholder's correct taxpayer identification number
or certification that the shareholder is not subject to backup withholding.
-14-
<PAGE>
SSgA FUNDS
SSgA Money Market Fund
SSgA US Government Money Market Fund
SSgA Tax Free Money Market Fund
SSgA Yield Plus Fund
SSgA Intermediate Fund
SSgA Bond Market Fund
SSgA High Yield Bond Fund
SSgA Intermediate Municipal Bond Fund
SSgA Growth and Income Fund
SSgA S&P 500 Index Fund
SSgA Matrix Equity Fund
SSgA Small Cap Fund
(Closed to new investors as of August 31, 1998)
SSgA Special Equity Fund
SSgA Tuckerman Active REIT Fund
SSgA Aggressive Equity Fund
SSgA IAM SHARES Fund
SSgA Emerging Markets Fund
SSgA Active International Fund
SSgA International Growth Opportunities Fund
SSgA Life Solutions Growth Fund
SSgA Life Solutions Balanced Fund
SSgA Life Solutions Income and Growth Fund
-15-
<PAGE>
ADDITIONAL INFORMATION ABOUT THE FUND
A Statement of Additional Information includes additional information about the
fund. The Statement of Additional Information is incorporated into this
Prospectus by reference. The Statement of Additional Information is available,
without charge, upon request. To request a Statement of Additional Information,
, other information about the fund or to make any shareholder inquiry, please
contact the fund at:
Russell Fund Distributors, Inc.
One International Place
Boston, Massachusetts 02110
1-800-997-7327
You also can review and copy information about the fund, including the Statement
of Additional Information, at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. You can receive information on the operation
of the Public Reference Room by calling 1-800-SEC-0330. Copies also may be
obtained, upon payment of a duplicating fee, by writing the Securities and
Exchange Commission's Public Reference Section, Washington, D.C. 20549-6009. The
SEC also maintains a website (www.sec.gov) that contains the Statement of
Additional Information and other information about the fund. You may also access
the SSgA Funds' website at www.ssgafunds.com.
SSgA Funds' Investment Company Act File No. 811-5430
-16-
<PAGE>
Filed pursuant to Rule 485(a)
File Nos. 33-19229; 811-5430
SSgA FUNDS
One International Place
Boston, Massachusetts 02110
1-800-997-7327
www.ssgafunds.com
STATEMENT OF ADDITIONAL INFORMATION
INTERMEDIATE MUNICIPAL BOND FUND
________________, 2000
This Statement of Additional Information is not a prospectus. Instead, it
supplements or describes in greater detail the SSgA Funds and the series named
above as contained in the prospectus dated ______________, 2000. You may obtain
a copy of the prospectus by calling 1-800-647-7327.
-1-
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
FUND HISTORY...............................................................3
DESCRIPTION OF THE FUND AND ITS INVESTMENT RISKS...........................3
INVESTMENT RESTRICTIONS.................................................5
TEMPORARY DEFENSIVE POSITION............................................6
PORTFOLIO TURNOVER......................................................6
MANAGEMENT OF THE FUND.....................................................7
BOARD OF TRUSTEES AND OFFICERS..........................................7
COMPENSATION............................................................9
CONTROLLING AND PRINCIPAL SHAREHOLDERS.................................10
INVESTMENT ADVISORY AND OTHER SERVICES....................................11
ADVISOR................................................................11
ADMINISTRATOR..........................................................11
CUSTODIAN AND TRANSFER AGENT...........................................12
DISTRIBUTOR............................................................12
DISTRIBUTION PLAN AND SHAREHOLDER SERVICING ARRANGEMENTS...............12
INDEPENDENT ACCOUNTANTS................................................13
LEGAL COUNSEL..........................................................13
Brokerage Practices AND COMMISSIONS.......................................13
PRICING OF FUND SHARES....................................................14
TAXES.....................................................................15
CALCULATION OF PERFORMANCE DATA...........................................16
ADDITIONAL INFORMATION....................................................17
SHAREHOLDER MEETINGS...................................................17
CAPITALIZATION AND VOTING..............................................17
FEDERAL LAW AFFECTING STATE STREET.....................................17
FINANCIAL STATEMENTS......................................................18
APPENDIX-DESCRIPTION OF SECURITIES RATINGS................................19
</TABLE>
-2-
<PAGE>
FUND HISTORY
SSgA Funds (the Investment Company) was organized as a Massachusetts business
trust on October 3, 1987, and operates under a First Amended and Restated Master
Trust Agreement, dated October 13, 1993, as amended. The SSgA Funds was formerly
known as The Seven Seas Series Fund. The name change took effect on December 27,
1996.
DESCRIPTION OF THE FUND AND ITS INVESTMENT RISKS
The SSgA Funds is an open-end, management investment company which offers shares
of beneficial interest in separate portfolios, each of which is referred to as a
fund. Each SSgA Fund is diversified1, in that at least 75% of its total assets
are represented by a variety of instruments including cash, government
securities, securities of other investment companies, and other securities
within the limitations described in the investment restrictions.
Municipal Securities. Municipal securities purchased by the fund may bear fixed,
floating or variable rates of interest or may be zero coupon securities.
Municipal securities are generally of two types: general obligations and revenue
obligations. General obligations are backed by the full faith and credit of the
issuer. These securities include tax anticipation notes, bond anticipation
notes, general obligation bonds and commercial paper. Revenue obligations are
backed by the revenues generated from a specific project or facility and include
industrial development bonds and private activity bonds. Tax anticipation notes
are issued to finance working capital needs of municipalities and are generally
issued in anticipation of future tax revenues. Bond anticipation notes are
issued in expectation of the issuer obtaining longer-term financing.
Industrial Development and Private Activity Bonds. Industrial development bonds
are issued to finance a wide variety of capital projects including: electric,
gas, water and sewer systems; ports and airport facilities; colleges and
universities; and hospitals. The principal security for these bonds is generally
the net revenues derived from a particular facility, group of facilities, or in
some cases, the proceeds of a special excise tax or other specific revenue
sources. Although the principal security behind these bonds may vary, many
provide additional security in the form of a debt service reserve fund whose
money may be used to make principal and interest payments on the issuer's
obligations. Some authorities provide further security in the form of a state's
ability without obligation to make up deficiencies in the debt service reserve
fund.
Private activity bonds are considered municipal securities if the interest paid
thereon is exempt from federal income tax and are issued by or on behalf of
public authorities to raise money to finance various privately operated
facilities for business and manufacturing, housing, sports, and pollution
control. These bonds are also used to finance public facilities such as
airports, mass transit systems, ports and parking. The payment of the principal
and interest on such bonds is dependent solely on the ability of the facility's
user to meet its financial obligations and the value of any real or personal
property pledged as security for such payment. As noted in the fund's Prospectus
and discussed below under "Taxes," interest income on these bonds may be an item
of tax preference subject to federal alternative minimum tax for individuals and
corporations.
Municipal Leases. The fund may purchase participation interests in municipal
obligations, including municipal lease/purchase agreements. Municipal leases are
an undivided interest in a portion of an obligation in the form of a lease or
installment purchase issued by a state or local government to acquire equipment
or facilities. These instruments may have fixed, floating or variable rates of
interest, with remaining maturities of 13 months or less. Certain participation
interests may permit the Fund to demand payment on not more than seven days'
notice, for all or any part of the fund's interest, plus accrued interest.
Municipal leases frequently have special risks not normally associated with
general obligation or revenue bonds. Some leases or contracts include
"non-appropriation" clauses, which provide that the governmental issuer has no
obligation to make future payments under the lease or contract unless money is
appropriated for such purpose by the appropriate legislative body on a yearly or
other periodic basis. To reduce these risks, the fund will only purchase
municipal leases subject to a non-appropriation clause when the payment of
principal and accrued interest is backed by a letter of credit or guarantee of a
bank.
Whether a municipal lease agreement will be considered illiquid for the purpose
of the fund's restriction on investments in illiquid securities will be
determined by officers of the Investment Company in accordance with procedures
established by the Board of Trustees.
(1) With the exception of the SSgA Tuckerman Active REIT Fund, which is
non-diversified.
-3-
<PAGE>
Risks of Municipal Obligations. Municipal obligations are affected by economic,
business or political developments. These securities may be subject to
provisions of litigation, bankruptcy and other laws affecting the rights and
remedies of creditors, or may become subject to future laws extending the time
for payment of principal and/or interest, or limiting the rights of
municipalities to levy taxes. The fund may be more adversely impacted by changes
in tax rates and policies than other funds. Because interest income from
municipal securities is normally not subject to regular federal income taxation,
the attractiveness of municipal securities in relation to other investment
alternatives is affected by changes in federal income tax rates applicable to,
or the continuing federal income tax-exempt status of, such interest income. Any
proposed or actual changes in such rates or exempt status, therefore, can
significantly affect the demand for and supply, liquidity and marketability of
municipal securities. This could in turn affect a fund's ability to acquire and
dispose of municipal securities at desirable yield and price levels.
Concentration of a fund's investments in these municipal obligations will
subject the fund, to a greater extent than if such investment was not so
concentrated, to the risks of adverse economic, business or political
developments affecting the particular state, industry or other area of
concentration
Illiquid Securities. The fund will not invest more than 15% of its net assets
in illiquid securities or securities that are not readily marketable. These
securities include repurchase agreements and time deposits of more than seven
days' duration and participation interests (including municipal leases),
floating and variable rate demand obligations and tender option bonds as to
which the fund cannot exercise a demand feature in seven or fewer days or for
which there is no secondary market. The absence of a regular trading market for
illiquid securities imposes additional risk on investments in these securities.
Illiquid securities may be difficult to value and may often be disposed of only
after considerable expense and delay.
Securities Lending. A fund may lend portfolio securities with a value of up to
33-1/3% of its total assets. For these purposes, total assets shall include the
value of all assets received as collateral for the loan. Such loans may be
terminated at any time, and a fund will receive cash or other obligations as
collateral. In a loan transaction, as compensation for lending its securities, a
fund will receive a portion of the dividends or interest accrued on the
securities held as collateral or, in the case of cash collateral, a portion of
the income from the investment of such cash. In addition, a fund will receive
the amount of all dividends, interest and other distributions on the loaned
securities. However, the borrower has the right to vote the loaned securities. A
fund will call loans to vote proxies if a material issue affecting the
investment is to be voted upon. Should the borrower of the securities fail
financially, a fund may experience delays in recovering the securities or
exercising its rights in the collateral. Loans are made only to borrowers that
are deemed by Advisor to be of good financial standing. In a loan transaction, a
fund will also bear the risk of any decline in value of securities acquired with
cash collateral. A fund will minimize this risk by limiting the investment of
cash collateral to high quality instruments of short maturity. This strategy is
not used to leverage any fund.
Interfund Lending. The SSgA Funds have sought and been granted permission from
the SEC to participate in a joint lending and borrowing facility (the "Credit
Facility"). Certain of the SSgA Funds, including the fund, may borrow money from
the SSgA Money Market Fund for temporary purposes. All such borrowing and
lending will be subject to a participating fund's fundamental investment
limitations. The SSgA Money Market Fund will lend through the program only when
the returns are higher than those available from an investment in repurchase
agreements or short term reserves. The SSgA Funds will borrow through the
program only when the costs are equal to or lower than the cost of bank loans.
Interfund loans and borrowings normally extend overnight, but can have a maximum
duration of seven days. Loans may be called on one business day's notice. A
participating fund may have to borrow from a bank at a higher interest rate if
an interfund loan is called or not renewed. Any delay in repayment to the SSgA
Money Market Fund could result in a lost investment opportunity or additional
borrowing costs.
Variable and Floating Rate Securities. The fund may purchase variable or
floating rate securities which are instruments issued or guaranteed by entities
such as municipalities and other issuers of municipal securities. A variable
rate security provides for the automatic establishment of a new interest rate on
set dates. A floating rate security provides for the automatic adjustment of its
interest rate whenever a specified interest rate changes. Generally, changes in
interest rates will have a smaller effect on the market value of variable and
floating rate securities than on the market value of comparable fixed income
obligations. Thus, investing in variable and floating rate securities generally
allows less opportunity for capital appreciation and depreciation than investing
in comparable fixed income securities.
Variable and floating rate securities are subject to interest rate risk, the
risk that, when interest rates increase, fixed-income securities held by a fund
will decline in value. Long-term fixed-income securities will normally have more
price volatility because of this risk than short-term securities.
They are also subject to credit/default risk, the risk that an issuer of
fixed-income securities held by a fund (which may have low credit ratings) may
default on its obligation to pay interest and repay principal.
Standby Commitments. The fund's investments may include standby commitments,
which are rights to resell municipal securities at specified periods prior to
their maturity dates to the seller or to some third party at an agreed upon
price or yield. Standby
-4-
<PAGE>
commitments may involve certain expenses and risks, including the inability of
the issuer of the commitment to pay for the securities at the time the
commitment is exercised, non-marketability of the commitment, and difference
between the duration of the commitment and the maturity of the underlying
security. The fund will limit standby commitment transactions to institutions
which the Advisor believes present minimal credit risk.
Pre-Refunded Municipal Securities. The interest and principal payments on
pre-refunded Municipal Securities are typically paid from the cash flow
generated from an escrow fund consisting of US Government Securities. These
payments have been "pre-refunded" using the escrow fund.
Insured Securities. Insured municipal securities are those for which scheduled
payments of interest and principal are guaranteed by a private
(non-governmental) insurance company. The insurance entitles a fund to receive
only the face or par value of the securities held by the fund. The insurance
does not guarantee the market value of the municipal securities or the net asset
value of a fund's shares.
Auction Rate Securities. Auction rate municipal securities permit the holder to
sell the securities in an auction at par value at specified intervals. The
dividend or interest is typically reset by "Dutch" auction in which bids are
made by broker-dealers and other institutions for a certain amount of securities
at a specified minimum yield. The rate set by the auction is the lowest interest
or dividend rate that covers all securities offered for sale. While this process
is designed to permit auction rate securities to be traded at par value, there
is the risk that an auction will fail due to insufficient demand for the
securities. A fund will take the time remaining until the next scheduled auction
date into account for purposes of determining the securities' duration.
US Government Obligations. The types of US Government obligations in which the
fund may at times invest include: (1) A variety of US Treasury obligations,
which differ only in their interest rates, maturities and times of issuance; and
(2) obligations issued or guaranteed by US Government agencies and
instrumentalities which are supported by any of the following: (a) the full
faith and credit of the US Treasury, (b) the right of the issuer to borrow an
amount limited to a specific line of credit from the US Treasury, (c)
discretionary authority of the US Government agency or instrumentality or (d)
the credit of the instrumentality (examples of agencies and instrumentalities
are: Federal Land Banks, Federal Housing Administration, Federal Farm Credit
Bank, Farmers Home Administration, Export--Import Bank of the United States,
Central Bank for Cooperatives, Federal Intermediate Credit Banks, Federal Home
Loan Banks, General Services Administration, Maritime Administration, Tennessee
Development Bank, Student Loan Marketing Association, International Bank for
Reconstruction and Development and Federal National Mortgage Association). No
assurance can be given that in the future the US Government will provide
financial support to such US Government agencies or instrumentalities described
in (2)(b), (2)(c) and (2)(d), other than as set forth above, since it is not
obligated to do so by law. The fund may purchase US Government obligations on a
forward commitment basis.
Purchase of Other Investment Company Funds. To the extent permitted under the
1940 Act and exemptive rules and orders thereunder, each fund may seek to
achieve its investment objective by investing solely in the shares of other
investment companies that have substantially similar investment objectives and
policies. These other investment companies may charge management fees which
shall be borne by the fund.
INVESTMENT RESTRICTIONS
The fund is subject to the following investment restrictions. Restrictions 1
through 11 are fundamental and restrictions 12 through 16 are nonfundamental.
The fund will not:
1. Invest 25% or more of the value of its total assets in securities of
municipalities primarily engaged in any one industry (other than the US
Government, its agencies and instrumentalities). Concentration may occur as
a result of changes in the market value of portfolio securities, but may not
result from investment.
2. Borrow money (including reverse repurchase agreements), as a temporary
measure for extraordinary or emergency purposes or to facilitate redemptions
(not for leveraging or investment), provided that borrowings do not exceed
an amount equal to 33-1/3% of the current value of the fund's assets taken
at market value, less liabilities other than borrowings. If at any time the
fund's borrowings exceed this limitation due to a decline in net assets,
such borrowings will within three days be reduced to the extent necessary to
comply with this limitation. The fund will not purchase investments once
borrowed funds (including reverse repurchase agreements) exceed 5% of its
total assets. Should the parties to these transactions fail financially, the
fund may experience delays or loss of rights in the collateral securing the
borrowers' obligations.
3. Pledge, mortgage or hypothecate its assets. However, the fund may pledge
securities having a market value at the time of the pledge not exceeding
33-1/3% of the value of the fund's total assets to secure borrowings
permitted by paragraph (2) above.
-5-
<PAGE>
4. With respect to 75% of its total assets, invest in securities of any one
issuer (other than securities issued by the US Government, its agencies, and
instrumentalities), if immediately after and as a result of such investment
the current market value of the fund's holdings in the securities of such
issuer exceeds 5% of the value of the fund's assets and to not more than 10%
of the outstanding voting securities of such issuer.
5. Make loans to any person or firm; provided, however, that the making of a
loan shall not include: (i) the acquisition for investment of bonds,
debentures, notes or other evidences of indebtedness of any corporation or
government which are publicly distributed or of a type customarily purchased
by institutional investors; or (ii) the entry into repurchase agreements.
The fund may lend its portfolio securities to broker-dealers or other
institutional investors if the aggregate value of all securities loaned does
not exceed 33-1/3% of the value of the fund's total assets. Portfolio
Securities may be loaned if collateral values are continuously maintained at
no less than 100% by "marking to market" daily.
6. Purchase or sell commodities or commodity futures contracts except that the
fund may enter into futures contracts and options thereon to the extent
provided in its Prospectus.
7. Purchase or sell real estate or real estate mortgage loans; provided,
however, that the fund may invest in securities secured by real estate or
interests therein or issued by companies which invest in real estate or
interests therein.
8. Engage in the business of underwriting securities issued by others, except
that the fund will not be deemed to be an underwriter or to be underwriting
on account of the purchase of securities subject to legal or contractual
restrictions on disposition.
9. Issue senior securities, except as permitted by its investment objective,
policies and restrictions, and except as permitted by the 1940 Act.
10. Purchase or sell puts, calls or invest in straddles, spreads or any
combination thereof, if as a result of such purchase the value of the fund's
aggregate investment in such securities would exceed 5% of the fund's total
assets.
11. Make short sales of securities or purchase any securities on margin, except
for such short-term credits as are necessary for the clearance of
transactions. The fund may make initial margin deposits and variation margin
payments in connection with transactions in futures contracts and related
options.
12. Purchase from or sell portfolio securities to its officers or directors or
other "interested persons" (as defined in the 1940 Act) of the fund,
including its investment advisor and affiliates, except as permitted by the
1940 Act and exemptive rules or orders thereunder.
13. Invest in securities issued by other investment companies except in
connection with a merger, consolidation, acquisition of assets, or other
reorganization approved by the fund's shareholders, and except to the extent
permitted by the 1940 Act.
14. Invest more than 15% of its net assets in the aggregate, on an ongoing
basis, in illiquid securities or securities that are not readily marketable,
including repurchase agreements and time deposits of more than seven days'
duration.
15. Make investments for the purpose of gaining control of an issuer's
management.
16. Invest in real estate limited partnerships that are not readily marketable.
TEMPORARY DEFENSIVE POSITION
For defensive purposes, the fund may invest temporarily in short term fixed
income securities. These include obligations issued or guaranteed as to
principal and interest by the US Government, its agencies or instrumentalities
and repurchase agreements collateralized by these obligations; commercial paper;
bank certificates of deposit; bankers' acceptances and time deposits. These
short term, fixed income securities may be used without limitation to invest
uncommitted cash balances or to maintain liquidity to meet shareholder
redemptions. When using this strategy, the weighted average maturity of
securities held by the fund will decline, which will possibly cause its yield to
decline as well. This strategy may be inconsistent with the fund's principal
investment strategy in an attempt to respond to adverse market, economic,
political or other conditions. Taking such a temporary defensive position may
result in the fund not achieving its investment objective.
PORTFOLIO TURNOVER
Generally, securities are purchased for the fund for investment income and/or
capital appreciation and not for short-term trading profits. The fund may
dispose of securities without regard to the time they have been held when such
action, for defensive or other purposes, appears advisable.
-6-
<PAGE>
The portfolio turnover rate for the fund is calculated by dividing the lesser of
purchases or sales of portfolio securities for the particular year, by the
monthly average value of the portfolio securities owned by the fund during the
year. For purposes of determining the rate, all short-term securities, including
options, futures, forward contracts and repurchase agreements, are excluded. A
high turnover rate (over 100%) will: (1): increase transactions expenses which
will adversely affect a fund's performance; and (2) result in increased
brokerage commissions and other transaction costs, and the possibility of
realized capital gains.
MANAGEMENT OF THE FUND
BOARD OF TRUSTEES AND OFFICERS
The Board of Trustees is responsible for overseeing generally the management,
activities and affairs of each fund and has approved contracts with various
financial organizations to provide, among other services, day-to-day management
required by the SSgA funds (see the section called "Investment Advisory and
Other Services."). Trustees hold office until they resign or are removed by, in
substance, a vote of two-thirds of Investment Company shares outstanding. The
officers, all of whom are employed by the Administrator or its affiliates, are
responsible for the day-to-day management and administration of the SSgA Funds'
operations.
The following lists the SSgA Funds' trustees and officers, their mailing
addresses and ages, their positions with the SSgA funds and their present and
principal occupations during the past five years.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
Name, Address and Age Position(s) with Principal Occupation(s) During Past 5 Years
SSgA funds
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Lynn L. Anderson Trustee (Interested o Vice Chairman, Frank Russell Company;
909 A Street Person of the SSgA o Chairman of the Board and Chief Executive Officer,
Tacoma, WA 98402 funds as defined in Frank Russell Investment Management Company and Russell
Age 60 the 1940 Act), Fund Distributors, Inc.;
Chairman of the o Chairman of the Board, Frank Russell Trust Company;
Board, President and o Trustee, President and Chief Executive Officer, Frank
Treasurer Russell Investment Company and Russell Insurance Funds;
and
o Director, Russell Insurance Agency, Inc., Frank Russell
Investments (Ireland) Limited, Frank Russell Investment
Company plc; Frank Russell Institutional Funds plc, Frank
Russell Qualifying Investor Fund, and Frank Russell Investments
(Cayman) Ltd.
-------------------------------------------------------------------------------------------------------------------------
William L. Marshall Trustee o Chief Executive Officer and President, Wm. L.
33 West Court Street Marshall Associates, Inc. (a registered investment
Doylestown, PA 18901 advisor and provider of financial and related consulting
Age 57 services);
o Certified Financial Planner and Member, Institute of
Certified Financial Planners;
o Member, Registry of Financial Planning Practitioners
and Advisory Committee, International Association for
Financial Planning Broker-Dealer Program;
o Registered Representative for Securities with FSC
Securities Corp., Marietta, Georgia.
--------------------------------------------------------------------------------------------------------------------------
Steven J. Mastrovich Trustee o President, Key Global Capital, Inc.;
176 Federal Street, 3rd Floor o From 1997 to 1998, Partner, Squire, Sanders & Dempsey
Boston, MA 02110 (law firm);
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
-7-
<PAGE>
<TABLE>
<S> <C>
Age 43 o From 1994 to 1997, Partner, Brown, Rudnick, Freed &
Gesmer (law firm); and
o From 1990 to 1994, Partner, Warner & Stackpole (law firm).
--------------------------------------------------------------------------------------------------------------------------
Patrick J. Riley Trustee o Partner, Riley, Burke & Donahue, L.L.P. (law firm).
One Corporate Place
55 Ferncroft Road
Danvers, MA 01923
Age 51
--------------------------------------------------------------------------------------------------------------------------
Richard D. Shirk Trustee o President and Chief Executive Officer, Blue
3350 Peachtree Road, N.E. Cross/Blue Shield of Georgia.
Atlanta, GA 30326
Age 54
--------------------------------------------------------------------------------------------------------------------------
Bruce D. Taber Trustee o Consultant, Computer Simulation, General Electric
26 Round Top Road Industrial Control Systems.
Boxford, MA 01921
Age 56
--------------------------------------------------------------------------------------------------------------------------
Henry W. Todd Trustee o President and Director, Zink & Triest Co., Inc.
111 Commerce Drive (dealer in vanilla flavor materials); and
Montgomeryville, PA 18936 o Director, Executive Vice President, A.M. Todd Group,
Age 52 Inc. and Flavorite Laboratories.
--------------------------------------------------------------------------------------------------------------------------
J. David Griswold Vice President and o Assistant Secretary and Associate General Counsel,
909 A Street Secretary Frank Russell Investment Management Company, Russell Fund
Tacoma, WA 98402 Distributors, Inc., Frank Russell Capital Inc., Frank
Age 42 Russell Company and Frank Russell Investments (Delaware),
Inc.;
o Director, Secretary and Associate General Counsel,
Frank Russell Securities, Inc.;
o Secretary, Frank Russell Canada Limited/Limitee.
--------------------------------------------------------------------------------------------------------------------------
Mark E. Swanson Assistant o Director - Funds Administration, Frank Russell
909 A Street Secretary, Assistant Investment Management Company and Frank Russell Trust
Tacoma, WA 98402 Treasurer and Company; and
Age 36 Principal Accounting o Treasurer and Chief Accounting Officer, Frank
Officer Russell Investment Company and Russell Insurance Funds.
--------------------------------------------------------------------------------------------------------------------------
Rick J. Chase Assistant Secretary o Manager, Fund Administration, Frank Russell
909 A Street Investment Management Company; and
Tacoma, WA 98402 o Assistant Treasurer, Frank Russell Investment Company
Age 34 and Russell Insurance Funds.
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
-8-
<PAGE>
<TABLE>
<S> <C> <C>
--------------------------------------------------------------------------------------------------------------------------
Deedra S. Walkey Assistant Secretary o Associate General Counsel and Assistant Secretary,
909 A Street Frank Russell Company, Frank Russell Investment
Tacoma, WA 98402 Management Company, Frank Russell Trust Company, Frank
Age 35 Russell Investment Company, Russell Insurance Funds, and
Russell Insurance Agency.
--------------------------------------------------------------------------------------------------------------------------
Carla L. Anderson Assistant Secretary o Senior Paralegal and Assistant Secretary, Frank
909 A Street Russell Company, Frank Russell Investment Management
Tacoma, WA 98402 Company, Frank Russell Securities, Inc., Russell Fund
Age 35 Distributors, Inc., Frank Russell Capital Inc., Frank
Russell International Services Company Inc., Russell Real
Estate Advisors Inc. and A Street Investment Associates,
Inc.
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
COMPENSATION
Trustees who are not officers or employees of Frank Russell Investment
Management Company, State Street Bank and Trust Company or their affiliates are
paid $63,000 each fiscal year and are reimbursed for travel and other expenses
they incur in attending Board meetings. As of the date of this SAI, the Trustees
were not paid pension or retirement benefits as part of Investment Company
expenses. However, the Trustees have approved a deferred compensation plan by
which they would be allowed to invest a portion of their annual trustee fee in
shares of the SSgA Funds. The Investment Company has obtained an exemptive order
from the SEC to enable it to offer this benefit. Participation by the Trustees
is optional. To date, none of the Trustees have used the deferred compensation
plan. The Investment Company's officers and employees are compensated by the
Administrator or its affiliates.
----------------------------------------------------------
Trustee Total Annual Compensation
from Investment Company per
Fiscal Year
----------------------------------------------------------
Lynn L. Anderson $0
----------------------------------------------------------
William L. Marshall $63,000
----------------------------------------------------------
Steven J. Mastrovich $63,000
----------------------------------------------------------
Patrick J. Riley $63,000
----------------------------------------------------------
Richard D. Shirk $63,000
----------------------------------------------------------
Bruce D. Taber $63,000
----------------------------------------------------------
Henry W. Todd $63,000
----------------------------------------------------------
-9-
<PAGE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
Name of SSgA Fund Amount of Total Annual Trustee
Compensation (Including Out of Pocket
Expenses) Attributable to Each Fund
For the Fiscal Year Ended August 31,
1999
---------------------------------------------------------------------------------
<S> <C>
Money Market $148,616
---------------------------------------------------------------------------------
US Government Money Market 26,152
---------------------------------------------------------------------------------
Matrix Equity 11,327
---------------------------------------------------------------------------------
S&P 500 Index 47,343
---------------------------------------------------------------------------------
Small Cap 8,227
---------------------------------------------------------------------------------
Yield Plus 14,754
---------------------------------------------------------------------------------
Bond Market 4,966
---------------------------------------------------------------------------------
Emerging Markets 6,022
---------------------------------------------------------------------------------
US Treasury Money Market 20,386
---------------------------------------------------------------------------------
Growth & Income 5,267
---------------------------------------------------------------------------------
Intermediate 2,187
---------------------------------------------------------------------------------
Prime Money Market 50,634
---------------------------------------------------------------------------------
Tax Free Money Market 6,081
---------------------------------------------------------------------------------
Active International 2,582
---------------------------------------------------------------------------------
International Growth Opportunities 1,494
---------------------------------------------------------------------------------
Tuckerman Active REIT 1,473
---------------------------------------------------------------------------------
High Yield Bond 1,191
---------------------------------------------------------------------------------
Special Equity 1,531
---------------------------------------------------------------------------------
Aggressive Equity(1) 839
---------------------------------------------------------------------------------
IAM SHARES(1) 430
---------------------------------------------------------------------------------
All Life Solutions Funds 0
---------------------------------------------------------------------------------
</TABLE>
CONTROLLING AND PRINCIPAL SHAREHOLDERS
State Street may from time to time have discretionary authority over accounts
which invest in Investment Company shares. These accounts include accounts
maintained for securities lending clients and accounts which permit the use of
Investment Company portfolios as short-term cash sweep investments. Shares
purchased for all discretionary accounts are held of record by State Street, who
retains voting control of such shares. As of ________________, 2000, State
Street held of record less than 25% of the issued and outstanding shares of
Investment Company in connection with its discretionary accounts. Consequently,
State Street is not deemed to be a controlling person of Investment Company for
purposes of the 1940 Act.
The Trustees and officers of Investment Company, as a group, own less than 1% of
Investment Company's voting securities.
Frank Russell Investment Management Company, Investment Company's Administrator
("Administrator"), will be the initial sole shareholder of the Fund until such
time as the Fund has public shareholders and therefore Administrator may be
deemed to be a controlling person for purposes of the 1940 Act.
- ----------------------
(1) The fund did not operate a full year during fiscal 1999.
-10-
<PAGE>
INVESTMENT ADVISORY AND OTHER SERVICES
ADVISOR
State Street Bank and Trust Company serves as the SSgA Funds' Investment Advisor
pursuant to an Advisory Agreement dated April 12, 1988. State Street is a wholly
owned subsidiary of State Street Corporation, a publicly held bank holding
company. State Street's address is 225 Franklin Street, Boston, MA 02110. State
Street also serves as the Investment Company's Custodian and Transfer Agent (see
below).
The Advisory Agreement will continue from year to year provided that a majority
of the Trustees who are not interested persons of the fund and either a majority
of all Trustees or a majority of the shareholders of the fund approve its
continuance. The Agreement may be terminated by the Advisor or a fund without
penalty upon sixty days' notice and will terminate automatically upon its
assignment.
Under the Advisory Agreement, the Advisor directs each fund's investments in
accordance with its investment objective, policies and limitations. For these
services, the fund pays an annual management fee to the Advisor at the rate
stated in the fund's prospectus. The management fee rate is a percentage of the
average daily net asset value of the fund, calculated daily and paid monthly.
State Street's Code of Ethics. Under State Street Global Advisors' Code of
Ethics, all employees who are deemed to be access persons (employees who have
interaction with funds or accounts managed by SSgA as part of their job
function) must pre-clear personal securities transactions. The Code of Ethics is
designed to ensure that employees conduct their personal securities transactions
in a manner that does not create an actual or potential conflict of interest to
SSgA's business or fiduciary responsibilities. In addition, the Code of Ethics
establishes standards prohibiting the trading in or recommending of securities
based on material, nonpublic information or the divulgence of such information
to others.
ADMINISTRATOR
Frank Russell Investment Management Company serves as the Investment Company's
Administrator, pursuant to an Administration Agreement dated April 12, 1988.
The Administrator is a wholly owned subsidiary of Frank Russell Company. Frank
Russell Company was founded in 1936 and has provided comprehensive asset
management consulting services since 1969 for institutional pools of investment
assets, principally those of large corporate employee benefit plans. Frank
Russell Company and its affiliates have offices in Tacoma, Winston-Salem, New
York City, Toronto, London, Tokyo, Sydney, Paris, Singapore and Auckland, and
have approximately 1,400 officers and employees. The Administrator's and Frank
Russell Company's mailing address is 909 A Street, Tacoma, WA 98402. Frank
Russell Company is an independently operated subsidiary of The Northwestern
Mutual Life Insurance Company.
Pursuant to the Administration Agreement with Investment Company, the
Administrator will: (1) supervise all aspects of the fund's operations; (2)
provide the fund with administrative and clerical services, including the
maintenance of certain of the fund's books and records; (3) arrange the periodic
updating of the fund's prospectuses and any supplements thereto; (4) provide
proxy materials and reports to fund shareholders and the Securities and Exchange
Commission; and (5) provide the fund with adequate office space and all
necessary office equipment and services, including telephone service, heat,
utilities, stationery supplies and similar items. For these services, the fund
and Investment Company's other domestic investment portfolios pay the
Administrator a combined fee that on an annual basis is equal to the following
percentages of their average aggregate daily net assets: $0 to and including
$500 million -- .06%; over $500 million to and including $1 billion -- .05%; and
over $1 billion -- .03%. The percentage of the fee paid by a particular fund is
equal to the percentage of average aggregate daily net assets that are
attributable to that fund. The Administrator will also receive reimbursement of
expenses it incurs in connection with establishing new investment portfolios.
The Administration Agreement will continue from year to year provided that a
majority of the Trustees and a majority of the Trustees who are not interested
persons of each fund and who have no direct or indirect financial interest in
the operation of the Distribution Plan described below or the Administration
Agreement approve its continuance. The Agreement may be terminated by the
Administrator or any fund without penalty upon sixty days' notice and will
terminate automatically upon its assignment.
The Administrator's Code of Ethics. Officers and employees of the Administrator
and Distributor are permitted to engage in personal securities transactions
subject to restrictions and procedures set forth in the Confidentiality Manual
and Code of Ethics adopted by the Investment Company, Administrator and
Distributor. Such restrictions and procedures include substantially all of the
recommendations of the Advisory Group of the Investment Company Institute and
comply with Securities and Exchange Commission rules and regulations.
-11-
<PAGE>
CUSTODIAN AND TRANSFER AGENT
State Street serves as the Custodian and Transfer Agent for the Investment
Company. State Street also provides the basic portfolio recordkeeping required
by the Investment Company for regulatory and financial reporting purposes. For
its services as Custodian, State Street is paid an annual fee in accordance with
the following: custody services--a fee payable monthly on a pro rata basis,
based on the following percentages of average daily net assets of each fund: $0
up to $1.5 billion--0.02%, over $1.5 billion--0.015% (for purposes of
calculating the break point, the assets of all domestic funds are aggregated);
securities transaction charges from $6.00 to $25.00 per transaction; Eurodollar
transaction fees ranging from $110.00 to $125.00 per transaction; monthly
pricing fees of $375.00 per investment portfolio and from $4.00 to $16.00 per
security, depending on the type of instrument and the pricing service used; and
yield calculation fees of $350.00 per non-money market portfolio per year. For
Transfer and Dividend Disbursing Agent services, State Street is paid the
following annual account services fees: $9.00 open account fee; $1.50 closed
account fee; fund minimum per portfolio for one to four portfolios--$36,000,
five to six portfolios--$24,000, and over six portfolios $18,000. Portfolio fees
are allocated to each fund based on the average net asset value of each fund and
are billable on a monthly basis at the rate of 1/12 of the annual fee. State
Street will apply a $5.00 fee to each telephone transaction (purchase or
redemption), which is applied against the monthly billing. State Street is
reimbursed by each fund for supplying certain out-of-pocket expenses including
postage, transfer fees, stamp duties, taxes, wire fees, telexes, and freight.
DISTRIBUTOR
Russell Fund Distributors, Inc. serves as the Distributor of fund shares
pursuant to a Distribution Agreement dated April 12, 1988 ("Distribution
Agreement"). The Distributor is a wholly owned subsidiary of the Administrator.
The Distributor's mailing address is One International Place, Boston, MA 02110.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICING ARRANGEMENTS
Distribution Plan. Under the 1940 Act, the Securities and Exchange Commission
has adopted Rule 12b-1, which regulates the circumstances under which a fund
may, directly or indirectly, bear distribution and shareholder servicing
expenses. Rule 12b-1 provides that a fund may pay for such expenses only
pursuant to a plan adopted in accordance with the Rule. Accordingly, each fund
has adopted an active distribution Plan providing for reimbursement for
distribution expenses up to the plan limit.
In connection with the Trustees' consideration of whether to adopt the
Distribution Plan, the Distributor, as the funds' principal underwriter,
represented to the Trustees that the Distributor believes that the Distribution
Plan should result in increased sales and asset retention for the funds by
enabling the funds to reach and retain more investors and servicing agents (such
as brokers, banks, financial planners, investment advisors and other financial
institutions), although it is impossible to know for certain in the absence of a
Distribution Plan or under an alternative distribution arrangement, the level of
sales and asset retention that a fund would have.
The Plan provides that a fund may spend annually, directly or indirectly, up to
0.25% of the value of its average net assets for distribution and shareholder
servicing services. The Plan does not provide for a fund to be charged for
interest, carrying or any other financing charges on any distribution expenses
carried forward to subsequent years. A quarterly report of the amounts expended
under the Plan, and the purposes for which such expenditures were incurred, must
be made to the Trustees for their review. The Plan may not be amended without
shareholder approval to increase materially the distribution or shareholder
servicing costs that the fund may pay. The Plan and material amendments to it
must be approved annually by all of the Trustees and by the Trustees who are
neither "interested persons" (as defined in the 1940 Act) of the fund nor have
any direct or indirect financial interest in the operation of the Plan or any
related agreements.
Distribution and Shareholder Servicing. Payments under the Plan will be made to
Distributor to finance activity which is intended to result in the sale and
retention of fund shares including: (1) payments made to certain broker-dealers,
investment advisors and other third-party intermediaries; (2) the costs of
prospectuses, reports to shareholders and sales literature; (3) advertising; and
(4) expenses incurred in connection with the promotion and sale of fund shares,
including Distributor's overhead expenses for rent, office supplies, equipment,
travel, communication, compensation and benefits of sales personnel.
Under the Plan, the fund and/or the Distributor may also enter into Service
Agreements with financial institutions, which may include the Advisor ("Service
Organizations"), to provide shareholder servicing with respect to shares of the
fund held by or for the customers of the Service Organizations. Under the
Service Agreements, the Service Organizations may provide various services for
such customers, including: answering inquiries regarding the fund; assisting
customers in changing dividend options, account designations and addresses;
performing subaccounting for such customers; establishing and maintaining
customer accounts and records; processing
-12-
<PAGE>
purchase and redemption transactions; providing periodic statements showing
customers' account balances and integrating such statements with those of other
transactions and balances in the customers' other accounts serviced by the
Service Organizations; arranging for bank wires transferring customers' funds;
and such other services as the customers may request in connection with the
fund, to the extent permitted by applicable statute, rule or regulation. Service
Organizations may receive from the fund and or the Distributor, for shareholder
servicing, monthly fees at a rate that shall not exceed .20% per annum of the
average daily net asset value of the fund's shares owned by or for shareholders
with whom the Service Organization has a servicing relationship. Banks and other
financial service firms may be subject to various state laws, and may be
required to register as dealers pursuant to state law.
The Investment Company has entered into Service Agreements with the Advisor and
the following entities related to the Advisor: State Street Brokerage Services,
Inc., Metropolitan Division of Commercial Banking, and Retirement Investment
Services, which includes State Street Solutions. The purpose of the Service
Agreements is to obtain shareholder services for fund shares owned by clients of
each of these entities. In return for these services, the Investment Company
pays each of the entities a fee. These agreements are reviewed annually by the
Board of Trustees.
Payments to Distributor, as well as payments to Service Organizations, are not
permitted by the Plan to exceed .25% per year of the average net asset value of
the fund's shares. Any payments that are required to be made by the Distribution
Agreement and any Service Agreement but could not be made because of the .25%
limitation may be carried forward and paid in subsequent years so long as the
Plan is in effect. The fund's liability for any such expenses carried forward
shall terminate at the end of two years following the year in which the
expenditure was incurred. Service Organizations will be responsible for prompt
transmission of purchase and redemption orders and may charge fees for their
services.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP serves as the Investment Company's independent
accountants. PricewaterhouseCoopers LLP is responsible for performing annual
audits of the financial statements and financial highlights in accordance with
generally accepted auditing standards, a review of federal tax returns, and,
pursuant to Rule 17f-2 of the 1940 Act, three security counts. The mailing
address of PricewaterhouseCoopers LLP is 160 Federal Street, Boston, MA 02110.
LEGAL COUNSEL
Goodwin, Procter & Hoar LLP, Exchange Place, Boston, MA 02109, provides legal
services to the SSgA Funds.
BROKERAGE PRACTICES AND COMMISSIONS
All portfolio transactions are placed on behalf of each fund by Advisor. Advisor
ordinarily pays commissions when it executes transactions on a securities
exchange. In contrast, there is generally no stated commission on the purchase
or sale of securities traded in the over-the-counter markets, including most
debt securities and money market instruments. Rather, the price of such
securities includes an undisclosed commission in the form of a mark-up or
mark-down. The cost of securities purchased from underwriters includes an
underwriting commission or concession.
Subject to the arrangements and provisions described below, the selection of a
broker or dealer to execute portfolio transactions is usually made by Advisor.
The Advisory Agreement provides, in substance and subject to specific directions
from officers of Investment Company, that in executing portfolio transactions
and selecting brokers or dealers, the principal objective is to seek the best
overall terms available to a fund. Ordinarily, securities will be purchased from
primary markets, and Advisor shall consider all factors it deems relevant in
assessing the best overall terms available for any transaction, including the
breadth of the market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer, and the
reasonableness of the commission, if any, for the specific transaction and other
transactions on a continuing basis.
The Advisory Agreement authorizes Advisor to select brokers or dealers to
execute a particular transaction, including principal transactions, and in
evaluating the best overall terms available, to consider the "brokerage and
research services" (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) provided to a fund and/or the Advisor (or its
affiliates). Advisor is authorized to cause each fund to pay a commission to a
broker or dealer who provides such brokerage and research services for executing
a portfolio transaction which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction. Each fund or
the Advisor, as appropriate, must determine in good faith that such commission
was
-13-
<PAGE>
reasonable in relation to the value of the brokerage and research services
provided--viewed in terms of that particular transaction or in terms of all the
accounts over which Advisor exercises investment discretion. Any commission, fee
or other remuneration paid to an affiliated broker-dealer is paid in compliance
with the fund's procedures adopted in accordance with Rule 17e-1 of the 1940
Act.
The Advisor arranges for the purchase and sale of fund securities and selects
brokers and dealers (including affiliates), which in its best judgment provide
prompt and reliable execution at favorable prices and reasonable commission
rates. The Advisor may select brokers and dealers which provide it with research
services and may cause a fund to pay such brokers and dealers commissions which
exceed those other brokers and dealers may have charged, if it views the
commissions as reasonable in relation to the value of the brokerage and/or
research services. In selecting a broker, including affiliates, for a
transaction, the primary consideration is prompt and effective execution of
orders at the most favorable prices. Subject to that primary consideration,
dealers may be selected for research, statistical or other services to enable
the fund to supplement its own research and analysis. Research services
generally include services which assist investment professionals in their
investment decision-making process, including information concerning securities
or indexes, performance, technical market action, pricing, risk measurement,
corporate responsibility and proxy issues, in addition to political and economic
developments.
With respect to brokerage commissions, if commissions are generated by a fund,
the Board reviews, at least annually, the commissions paid by a fund to evaluate
whether the commissions paid over representative periods of time were reasonable
in relation to commissions being charged by other brokers and the benefits to a
fund.
The Trustees periodically review Advisor's performance of its responsibilities
in connection with the placement of portfolio transactions on behalf of each
fund and review the prices paid by the fund over representative periods of time
to determine if such prices are reasonable in relation to the benefits provided
to the fund. Certain services received by Advisor attributable to a particular
fund transaction may benefit one or more other accounts for which Advisor
exercises investment discretion, or an investment portfolio other than that for
which the transaction was effected. Advisor's fees are not reduced by Advisor's
receipt of such brokerage and research services.
PRICING OF FUND SHARES
Shares of the funds are offered without a sales commission by Russell Fund
Distributors, Inc. (the Distributor), to institutional and retail investors
which invest for their own account or in a fiduciary or agency capacity. The
fund determines the price per share once each business day at 4:00 p.m. Eastern
time. A business day is one on which the New York Stock Exchange is open for
regular trading. Currently, the New York Stock Exchange is open for trading
every weekday except New Year's Day, Martin Luther King, Jr., Day, President's
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
and Christmas Day.
Trading may occur in debt securities at times when the New York Stock Exchange
is closed (including weekends and holidays or after 4:00 p.m. Eastern time on a
regular business day). The trading of portfolio securities at such times may
significantly increase or decrease the net asset value of fund shares when the
shareholder is not able to purchase or redeem fund shares. If such an event
occurs, these securities will be valued at their fair value following procedures
approved by the Trustees.
With the exceptions noted below, the fund values portfolio securities at market
value. This generally means that equity securities and fixed income securities
listed and traded principally on any national securities exchange are valued on
the basis of the last sale price or, lacking any sales, at the closing bid
price, on the primary exchange on which the security is traded. United States
equity and fixed-income securities traded principally over-the-counter and
options are valued on the basis of the last reported bid price. Futures
contracts are valued on the basis of the last reported sales price.
Because many fixed income securities do not trade each day, last sale or bid
prices are frequently not available. Therefore, fixed income securities may be
valued using prices provided by a pricing service when such prices are believed
to reflect the market value of such securities.
The fund values securities maturing within 60 days of the valuation date at
amortized cost unless the Board determines that the amortized cost method does
not represent fair value. This method involves valuing an instrument at its cost
and thereafter assuming a constant amortization to maturity of any discount or
premium, even though the portfolio security may increase or decrease in market
value generally in response to changes in interest rates. While this method
provides certainty in valuation, it may result in periods during which value, as
determined by amortized cost, is higher or lower than the price a fund would
receive if it sold the instrument.
-14-
<PAGE>
For example, in periods of declining interest rates, the daily yield on fund
shares computed by dividing the annualized daily income on the fund's portfolio
by the net asset value based upon the amortized cost valuation technique may
tend to be higher than a similar computation made by using a method of valuation
based upon market prices and estimates. In periods of rising interest rates, the
daily yield on fund shares computed the same way may tend to be lower than a
similar computation made by using a method of calculation based upon market
prices and estimates.
The Investment Company filed an exemption from Section 18(f) of the 1940 Act on
Form N-18-F on December 29, 1987, which may enable it to redeem securities in
kind. Therefore, a fund may pay any portion of the redemption amount (in excess
of $25 million) by a distribution in kind of readily marketable securities from
its portfolio instead of cash.
TAXES
Each fund intends to qualify for treatment as a regulated investment company
("RIC") under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"). As a RIC, each fund will not be liable for federal income taxes on
taxable net investment income and net capital gain (long-term capital gains in
excess of short-term capital losses) that it distributes to its shareholders,
provided that the fund distributes annually to its shareholders at least 90% of
its net investment income and net short-term capital gain for the taxable year
("Distribution Requirement"). For a fund to qualify as a RIC it must abide by
all of the following requirements: (1) at least 90% of the fund's gross income
each taxable year must be derived from dividends, interest, payments with
respect to securities loans, gains from the sale or other disposition of stock
or securities or foreign currencies, or other income (including gains from
options, futures or forward contracts) derived with respect to its business of
investing in such stock, securities or currencies ("Income Requirement"); (2) at
the close of each quarter of the fund's taxable year, at least 50% of the value
of its total assets must be represented by cash and cash items, US Government
securities, securities of other RICs, and other securities, with such other
securities limited, in respect of any one issuer, to an amount that does not
exceed 5% of the total assets of the fund or that does not represent more than
10% of the outstanding voting securities of any one issuer; and (3) at the close
of each quarter of the fund's taxable year, not more than 25% of the value of
its assets may be invested in securities (other than US Government securities or
the securities of other RICs) of any one issuer.
Each fund will be subject to a nondeductible 4% excise tax to the extent it
fails to distribute by the end of any calendar year an amount at least equal to
the sum of: (1) 98% of its ordinary income for that year; (2) 98% of its capital
gain net income for the one-year period ending on October 31 of that year; and
(3) certain undistributed amounts from the preceding calendar year. For this and
other purposes, dividends declared in October, November or December of any
calendar year and made payable to shareholders of record in such month will be
deemed to have been received on December 31 of such year if the dividends are
paid by the fund subsequent to December 31 but prior to February 1 of the
following year.
If a shareholder receives a distribution taxable as a long-term gain with
respect to shares of a fund and redeems or exchanges the shares, and has held
the shares for six months or less, then any loss on the redemption or exchange
will be treated as a long-term loss to the extent of the respective capital gain
distribution.
Tax Exempt Income. Dividends paid by the fund will qualify as "exempt-interest
dividends," and thus will be excludable from gross income by its shareholders,
if the fund satisfies the requirement that, at the close of each quarter of its
taxable year, at least 50% of the value of its total assets consists of
securities the interest on which is excludable from gross income under section
103(a) of the Code; the fund intends to satisfy this requirement. The aggregate
dividends excludable from the shareholders' treatment of dividends from the fund
under local and state income tax laws may differ from the treatment thereof
under the Code.
If shares of the fund are sold at a loss after being held for six months or
less, the loss will be disallowed to the extent of any exempt-interest dividends
received on those shares.
Tax-exempt interest attributable to certain private activity bonds ("PABs")
(including, in the case of a RIC receiving interest on such bonds, a
proportionate part of the exempt-interest dividends paid by that RIC) is an item
of tax preference for purposes of the alternative minimum tax. Exempt-interest
dividends received by a corporate shareholder also may be indirectly subject to
that tax without regard to whether the fund's tax-exempt interest was
attributable to those bonds.
The fund may purchase bonds at market discount (i.e., bonds with a purchase
price less then original issue price or adjusted issue price). If such bonds are
subsequently sold at a gain, then a portion of that gain equal to the amount of
market discount, which should have been accrued through the sale date, a portion
of which may be taxable to shareholders as ordinary income. The Budget
Reconciliation Act of 1993 contains a provision which repeals a 1984 rule
pertaining to the treatment of profits of discount bonds.
-15-
<PAGE>
Gains attributed to a market discount will be taxed as ordinary income and gains
from accretion will be taxed as a capital gain. The difference lies in the
determination of which portion of the gain is accretion and which is market
discount.
Entities or persons who are "substantial users" (or persons related to
substantial users) of facilities financed by PABs or industrial development
bonds ("IDBs") should consult their tax advisors before purchasing shares of the
fund because, for users of certain of these facilities, the interest on those
bonds is not exempt from federal income tax. For these purposes, the term
"substantial user" is defined generally to include a non-exempt person who
regularly uses in trade or business a part of a facility financed from the
proceeds of PABs or IDBs.
Up to 85% of social security and railroad retirement benefits may be included in
taxable income for recipients whose adjusted gross income (including income from
tax-exempt sources such as the fund) plus 50% of their benefits exceeds certain
base amounts. Exempt-interest dividends paid by the fund still are tax-exempt to
the extent described in the fund's prospectus; they are only included in the
calculation of whether a recipient's income exceeds the established amounts.
If the fund invests in any instrument that generates taxable income, under the
circumstances described in the prospectus, distributions of the interest earned
thereon will be taxable to the fund's shareholders as ordinary income to the
extent of the fund's earnings and profits. Moreover, if the fund realizes
capital gain as a result of market transactions, any distribution of that gain
will be taxable to its shareholders. There also may be collateral federal income
tax consequences regarding the receipt of exempt-interest dividends by
shareholders such as S corporations, financial institutions and property and
casualty insurance companies. A shareholder falling into any such category
should consult its tax advisor concerning its investment in shares of the fund.
State and Local Taxes. Depending upon the extent of each fund's activities in
states and localities in which its offices are maintained, its agents or
independent contractors are located or it is otherwise deemed to be conducting
business, the fund may be subject to the tax laws of such states or localities.
The foregoing discussion is only a summary of certain federal income tax issues
generally affecting the fund and its shareholders. Circumstances among investors
may vary and each investor is encouraged to discuss investment in the fund with
the investor's tax advisor.
Issues Related to Hedging and Option Investments. A fund's ability to make
certain investments may be limited by provisions of the Code that require
inclusion of certain unrealized gains or losses in the fund's income for
purposes of the Income Requirement and the Distribution Requirement, and by
provisions of the Code that characterize certain income or loss as ordinary
income or loss rather than capital gain or loss. Such recognition,
characterization and timing rules will affect investments in certain futures
contracts, options, foreign currency contracts and debt securities denominated
in foreign currencies.
The foregoing discussion is only a summary of certain federal income tax issues
generally affecting the fund and its shareholders. Circumstances among investors
may vary and each investor is encouraged to discuss investment in the fund with
the investor's tax advisor.
CALCULATION OF PERFORMANCE DATA
The fund computes average annual total return by using a standardized method of
calculation required by the Securities and Exchange Commission. Average annual
total return is computed by finding the average annual compounded rates of
return on a hypothetical initial investment of $1,000 over the one-year,
five-year and ten-year periods (or life of the funds as appropriate), that would
equate the initial amount invested to the ending redeemable value, according to
the following formula:
P(1+T)n = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a $1,000 payment
made at the beginning of the 1-year, 5-year
and 10-year periods at the end of the year
or period
The calculation assumes that all dividends and distributions of the fund are
reinvested at the price stated in the Prospectus on the dividend dates during
the period, and includes all recurring and nonrecurring fees that are charged to
all shareholder accounts.
Total returns and other performance figures are based on historical earnings and
are not indicative of future performance.
-16-
<PAGE>
Yields are computed by using standardized methods of calculation required by the
Securities and Exchange Commission. Yields are calculated by dividing the net
investment income per share earned during a 30-day (or one-month) period by the
maximum offering price per share on the last day of the period, according to the
following formula:
YIELD = 2[(a-b+1)6-1]
---
Cd
where: A = dividends and interests earned during the period
B = expenses accrued for the period (net of reimbursements);
C = average daily number of shares outstanding during the
period that were entitled to receive dividends; and
D = the maximum offering price per share on the last day of
the period.
The yield quoted is not indicative of future results. Yields will depend on the
type, quality, maturity and interest rate of instruments held by the Fund. Total
return and other performance figures are based on historical earnings and are
not indicative of future performance.
ADDITIONAL INFORMATION
SHAREHOLDER MEETINGS
Investment Company will not have an annual meeting of shareholders. Special
meetings may be convened: (1) by the Board of Trustees; (2) upon written request
to the Board by the holders of at least 10% of the outstanding shares; or (3)
upon the Board's failure to honor the shareholders' request described above, by
holders of at least 10% of the outstanding shares giving notice of the special
meeting to the shareholders.
CAPITALIZATION AND VOTING
Each fund share has one vote. There are no cumulative voting rights. There is no
annual meeting of shareholders, but special meetings may be held. On any matter
that affects only a particular investment fund, only shareholders of that fund
may vote unless otherwise required by the 1940 Act or the Master Trust
Agreement. The Trustees hold office for the life of the Trust. A Trustee may
resign or retire, and may be removed at any time by a vote of two-thirds of
Investment Company shares or by a vote of a majority of the Trustees. The
Trustees shall promptly call and give notice of a meeting of shareholders for
the purpose of voting upon removal of any Trustee when requested to do so in
writing by holders of not less than 10% of the shares then outstanding. A
vacancy on the Board of Trustees may be filled by the vote of a majority of the
remaining Trustees, provided that immediately thereafter at least two-thirds of
the Trustees have been elected by shareholders.
The fund share represents an equal proportionate interest in the fund, has a par
value of $.001 per share and is entitled to such relative rights and preferences
and dividends and distributions earned on the assets belonging to the fund as
may be declared by the Board of Trustees. Fund shares are fully paid and
nonassessable by Investment Company and have no preemptive rights.
The Investment Company does not issue share certificates for the fund. Transfer
Agent sends monthly statements to shareholders of the fund concurrent with any
transaction activity, confirming all investments in or redemptions from their
accounts. Each statement also sets forth the balance of shares held in the
account.
FEDERAL LAW AFFECTING STATE STREET
Federal laws may prohibit state chartered banks such as State Street from
engaging in the business of certain kinds of underwriting and other activities
and may impact the services provided by State Street. SSgA Funds shares are not
endorsed or guaranteed by State Street or its affiliates, are not deposits or
obligations of State Street or its affiliates, and are not insured by the
Federal Deposit Insurance Corporation or any other governmental agency.
-17-
<PAGE>
Changes in federal or state statutes and regulations relating to the permissible
activities of banks and their affiliates, as well as judicial or administrative
decisions or interpretations of such or future statutes and regulations, could
prevent the Advisor from continuing to perform all or a part of the above
services for its customers and/or the fund. If the Advisor were prohibited from
serving the fund in any of its present capacities, the Board of Trustees would
seek an alternative provider(s) of such services. In such event, changes in the
operation of the fund may occur. It is not expected by the Advisor that existing
shareholders would suffer any adverse financial consequences (if another advisor
with equivalent abilities is found) as a result of any of these occurrences.
FINANCIAL STATEMENTS
Audited financial statements will be available within 60 days following the
end of the fund's then current fiscal year. When available, copies of the
financial statements can be obtained without charge by calling Distributor at
(800) 647-7327.
-18-
<PAGE>
APPENDIX-DESCRIPTION OF SECURITIES RATINGS
Ratings of Debt Instruments and Municipal Securities
Moody's Investors Service, Inc. ("Moody's") -- Long Term Debt Ratings.
Aaa -- Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risk appear somewhat larger than the Aaa securities.
A -- Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper-medium-grade obligations. Factors giving security
to principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa -- Bonds which are rated Baa are considered as medium-grade obligations
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa through B. The modifier 1 indicates that the obligation
ranks in the higher end of its generic rating category; the modifier 2 indicates
a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of
that generic rating category.
Standard & Poor's Corporation ("S&P"). The ratings are based, in varying
degrees, on the following considerations: (1) The likelihood of default --
capacity and willingness of the obligator as to the timely payment of interest
and repayment of principal in accordance with the terms of the obligation; (2)
The nature of and provisions of the obligation; and (3) The protection afforded
by, and relative position of, the obligation in the event of bankruptcy,
reorganization, or other arrangement under the laws of bankruptcy and other laws
affecting creditors' rights.
AAA -- Debt rated AAA has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.
AA -- Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small degree.
A -- Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB -- Debt rated BBB is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
Plus (+) or minus (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
Ratings of Short-Term Municipal Loans
Moody's:
MIG-1/VMIG-1 -- Securities rated MIG-1/VMIG-1 are of the best quality, enjoying
strong protection from established cash flows of funds for their servicing or
from established and broad-based access to the market for refinancing, or both.
MIG-2/VMIG-2 -- Loans bearing the MIG-2/VMIG-2 designation are of high quality,
with margins of protection ample although not so large as in the MIG-1/VMIG-1
group.
S&P:
-19-
<PAGE>
SP-1 -- Short-term municipal securities bearing the SP-1 designation have very
strong or strong capacity to pay principal and interest. Those issues rated SP-1
which are determined to possess overwhelming safety characteristics will be
given a plus (+) designation.
SP-2 -- Issues rated SP-2 have satisfactory capacity to pay principal and
interest.
Ratings of Commercial Paper
Moody's. Moody's short-term debt ratings are opinions of the ability of issuers
to repay punctually senior debt obligations. These obligations have an original
maturity not exceeding one year, unless explicitly noted. Moody's employs the
following three designations, all judged to be investment grade, to indicate the
relative repayment ability of rated issuers:
Issuers rated Prime-1 (or supporting institutions) have a superior ability for
repayment of senior short-term debt obligations. Prime-1 repayment ability will
often be evidenced by many of the following characteristics:
Leading market positions in well-established industries.
High rates of return on funds employed.
Conservative capitalization structure with moderate reliance on debt and ample
asset protection.
Broad margins in earnings coverage of fixed financial charges and high internal
cash generation.
Well-established access to a range of financial markets and assured sources of
alternate liquidity.
Issuers rated Prime-2 (or supporting institutions) have a strong ability for
repayment of senior short-term debt obligations. This will normally be evidenced
by many of the characteristics cited above but to a lesser degree. Earnings
trends and coverage ratios, while sound, may be more subject to variation.
Capitalization characteristics, while still appropriate, may be more affected by
external conditions. Ample alternative liquidity is maintained.
Issuers rated Prime-3 (or supporting institutions) have an acceptable ability
for repayment of senior short-term obligations. The effect of industry
characteristics and market compositions may be more pronounced. Variability in
earnings and profitability may result in changes in the level of debt protection
measurements and may require relatively high financial leverage. Adequate
alternate liquidity is maintained.
Issuers rated Not Prime do not fall within any of the Prime rating categories.
S&P. An S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt considered shot-term in the relevant market. Ratings are
graded into several categories, ranging from A-1 for the highest quality
obligations to D for the lowest. These categories are as follows:
A-1 -- This highest category indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus sign (+) designation.
A-2 -- Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated A-1.
Fitch's Investors Service, Inc. ("Fitch"). Commercial paper rated by Fitch
reflects Fitch's current appraisal of the degree of assurance of timely payment
of such debt. An appraisal results in the rating of an issuer's paper as F-1,
F-2, F-3, or F-4.
F-1 -- This designation indicates that the commercial paper is regarded as
having the strongest degree of assurance for timely payment.
F-2 -- Commercial paper issues assigned this rating reflect an assurance of
timely payment only slightly less in degree than those issues rated F-1.
The following is a description of the securities ratings of Duff & Phelps Credit
Rating Co. ("D&P"), Fitch Investors Service, Inc. ("Fitch"), Standard & Poor's
Corporation ("S&P"), Moody's Investors Service, Inc. ("Moody's"), IBCA Limited
and IBCA Inc. ("IBCA") and Thomson BankWatch ("Thomson").
Long-Term Corporation and Tax-Exempt Debt Ratings
The two highest ratings of D&P for tax-exempt and corporate fixed-income
securities are AAA and AA. Securities rated AAA are of the highest credit
quality. The risk factors are considered to be negligible, being only slightly
more than for risk-free US Treasury debt. Securities rated AA are of high credit
quality. Protection factors are strong. Risk is modest but may vary slightly
from time to time because of economic conditions. The AA rating may be modified
by an addition of a plus (+) or minus (-) sign to show relative standing within
the major rating category.
-20-
<PAGE>
The two highest ratings of Fitch for tax-exempt and corporate bonds are AAA and
AA. AAA bonds are considered to be investment grade and of the highest credit
quality. The obligor is judged to have an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by reasonably
foreseeable events. AA bonds are considered to be investment grade and of very
high credit quality. The obligor's ability to pay interest and repay principal
is very strong, although not quite as strong as bonds rated AAA. Because bonds
rated in the AAA and AA categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these issuers is generally
rated F-1+. Plus (+) and minus (-) signs are used with the AA rating symbol to
indicate relative standing within the rating category.
The two highest ratings of S&P for tax-exempt and corporate bonds are AAA and
AA. Bonds rated AAA bear the highest rating assigned by S&P to a debt obligation
and the AAA rating indicates in its opinion an extremely strong capacity to pay
interest and repay principal. Bonds rated AA by S&P are judged by it to have a
very strong capacity to pay interest and repay principal, and they differ from
AAA issues only in small degree. The AA rating may be modified by an addition of
a plus (+) or minus (-) sign to show relative standing within the major rating
category. The foregoing ratings are sometimes followed by a "p" indicating that
the rating is provisional. A provisional rating assumes the successful
completion of the project being financed by the debt being rated and indicates
that payment of debt service requirements is largely or entirely dependent upon
the successful and timely completion of the project. This rating, however, while
addressing credit quality subsequent to completion of the project, makes no
comment on the likelihood of, or the risk of default upon failure of, such
completion.
The two highest ratings of Moody's for tax-exempt and corporate bonds are Aaa
and Aa. Tax-exempt and corporate bonds rated Aaa are judged to be of the "best
quality." The rating of Aa is assigned to bonds which are of "high quality by
all standards." Aa bonds are rated lower than Aaa bonds because margins of
protection may not be as large or fluctuations of protective elements may be of
greater amplitude or there may be other elements which make the long-term risks
appear somewhat larger. Moody's may modify a rating of Aa by adding numerical
modifiers of 1, 2 or 3 to show relative standing within the Aa category. The
foregoing ratings for tax-exempt bonds are sometimes presented in parentheses
preceded with a "con" indicating the bonds are rated conditionally. Such
parenthetical rating denotes the probable credit stature upon completion of
construction or elimination of the basis of the condition. In addition, Moody's
has advised that the short-term credit risk of a long-term instrument sometimes
carries a MIG rating or one of the commercial paper ratings described below.
The two highest ratings of IBCA for corporate bonds are AAA and AA. Obligations
rated AAA by IBCA have the lowest expectation of investment risk. Capacity for
timely repayment of principal and interest is substantial, such that adverse
changes in business, economic or financial conditions are unlikely to increase
investment risk significantly. Obligations for which there is a very low
expectation of investment risk are rated AA. IBCA may append a rating of plus
(+) or minus (-) to a rating to denote relative status within a major rating
category. IBCA does not rate tax-exempt bonds.
The two highest ratings of Thomson for corporate bonds are AAA and AA. Bonds
rated AAA are of the highest credit quality. The ability of the obligor to repay
principal and interest on a timely basis is considered to be very high. Bonds
rated AA indicate a superior ability on the part of the obligor to repay
principal and interest on a timely basis with limited incremental risk versus
issues rated in the highest category. These ratings may be modified by the
addition of a plus (+) or minus (-) sign to show relative standing within the
rating categories. Thomson does not rate tax-exempt bonds.
Short-Term Corporate and Tax-Exempt Debt Ratings
The highest rating of D&P for commercial paper is Duff 1. D&P employs three
designations, Duff 1 plus, Duff 1 and Duff 1 minus, within the highest rating
category. Duff 1 plus indicates highest certainty of timely payment. Short-term
liquidity, including internal operating factors and/or ready access to
alternative sources of funds, is judged to be outstanding, and safety is just
below risk-free US Treasury short-term obligations. Duff 1 indicates very high
certainty of timely payment. Liquidity factors are excellent and supported by
strong fundamental protection factors. Risk factors are considered to be minor.
Duff 1 minus indicates high certainty of timely payment. Liquidity factors are
strong and supported by good fundamental protection factors. Risk factors are
very small. Duff 2 indicates good certainty of timely payment. Liquidity factors
and company fundamentals are sound. Although ongoing funding needs may enlarge
total financing requirements, access to capital markets is good. Risk factors
are small.
Fitch's short-term ratings apply to tax-exempt and corporate debt obligations
that are payable on demand or have original maturities of up to three years. The
highest rating of Fitch for short-term securities encompasses both the F-1+ and
F-1 ratings. F-1+ securities possess exceptionally strong credit quality. Issues
assigned this rating are regarded as having the strongest degree of assurance
for timely payment. F-1 securities possess very strong credit quality. Issues
assigned this rating reflect an assurance of timely payment only slightly less
in degree than issues rated F-1+. F-2 securities possess good credit quality and
have a satisfactory degree of assurance for timely payment, but the margin of
safety is not as great as the F-1+ and F-1 categories.
S&P's commercial paper ratings are current assessments of the likelihood of
timely payment of debt having an original maturity of no more than 365 days. The
A-1 designation indicates that the degree of safety regarding timely payment is
strong. Those issues
-21-
<PAGE>
determined to possess extremely strong safety characteristics will be denoted
with a plus (+) designation. The A-2 designation indicates that capacity for
timely payment on these issues is satisfactory. However, the relative degree of
safety is not as high as for issues designated A-1.
Moody's short-term debt ratings are opinions of the ability of issuers to repay
punctually promissory obligations not having an original maturity in excess of
nine months. Issuers rated Prime-1 (or related supporting institutions) in the
opinion of Moody's have a superior capacity for repayment of short-term
promissory obligations. Issuers rated Prime-2 (or related supporting
institutions) have a strong capacity for repayment of short-term promissory
obligations. This capacity will normally be evidenced by many of the
characteristics of Prime-1 rated issues, but to a lesser degree. Ample alternate
liquidity is maintained.
IBCA assesses the investment quality of unsecured debt with an original maturity
of less than one year which is issued by bank holding companies and their
principal banking subsidiaries. The designation A1 by IBCA indicates that the
obligation is supported by a very strong capacity for timely repayment. Those
obligations rated A1+ are supported by the highest capacity for timely
repayment. The designation A-2 by IBCA indicates that the obligation is
supported by a satisfactory capacity for timely payment, although such capacity
may be susceptible to adverse changes in business, economic or financial
conditions.
Thomson's short-term paper ratings assess the likelihood of an untimely payment
of principal or interest of debt having a maturity of one year or less which is
issued by banks and financial institutions. The designation TBW-1 represents the
highest short-term rating category and indicates a very high degree of
likelihood that principal and interest will be paid on a timely basis. The
designation TBW-2 represents the second highest short-term rating category and
indicates that while the degree of safety regarding timely payment of principal
and interest is strong, the relative degree of safety is not as high as for
issues rated TBW-1.
Tax-Exempt Note Ratings
A S&P rating of SP-1 indicates very strong or strong capacity to pay principal
and interest. Those issues determined to possess overwhelming safety
characteristics are given a plus (+) designation. Notes rated SP-2 are issued by
issuers that exhibit satisfactory capacity to pay principal and interest.
Moody's ratings for state and municipal notes and other short-term obligations
are designated Moody's Investment Grade ("MIG"). MIG-1/VMIG-1 denotes best
quality. There is present strong protection from established cash flows,
superior liquidity support or demonstrated broad-based access to the market for
refinancing. MIG-2/VMIG-2 denotes high quality, with margins of protection ample
although not as large as in the MIG-1/VMIG-1 group.
Fitch uses its short-term ratings described above under "Short-Term Corporate
and Tax-Exempt Debt Ratings" for tax-exempt notes.
D&P uses the fixed-income ratings described above under "Long-Term Corporate and
Tax-Exempt Debt Ratings" for tax-exempt notes and other short-term obligations.
-22-
<PAGE>
PART C: OTHER INFORMATION
Item 23. Exhibits
--------
<TABLE>
<CAPTION>
INCORPORATED BY REFERENCE
NAME OF EXHIBIT OR EXHIBIT NUMBER
<S> <C> <C>
1. First Amended and Restated
Master Trust Agreement Post-Effective Amendment #35 (12/29/95)
(a) Amendment No. 1 Post-Effective Amendment #35 (12/29/95)
(b) Amendment No. 2 Post-Effective Amendment #35 (12/29/95)
(c) Amendment No. 3 Post-Effective Amendment #35 (12/29/95)
(d) Amendment No. 4 Post-Effective Amendment #35 (12/29/95)
(e) Amendment No. 5 Post-Effective Amendment #35 (12/29/95)
(f) Amendment No. 6 Post-Effective Amendment #35 (12/29/95)
(g) Amendment No. 7 Post-Effective Amendment #35 (12/29/95)
(h) Amendment No. 8 Post-Effective Amendment #35 (12/29/95)
(i) Amendment No. 9 Post-Effective Amendment #40 (4/10/97)
(j) Amendment No. 10 Post-Effective Amendment #43 (2/4/98)
(k) Amendment No. 11 Post-Effective Amendment #47 (9/1/98)
(l) Amendment No. 12 Post-Effective Amendment #50 (3/15/99)
(m) Amendment No. 13 To be filed by Amendment
2. Bylaws Post-Effective Amendment #42 (12/24/97)
3. Instruments Defining Rights of Security Holders None
4. Deferred Compensation Plan Post-Effective Amendment #50 (3/15/99)
5(a) Investment Advisory Agreement Post-Effective Amendment #35 (12/29/95)
(b) Letter agreement incorporating the Yield Plus and Bond Post-Effective Amendment #35 (12/29/95)
Market Funds within the Investment Advisory Agreement
(c) Letter agreement incorporating the US Treasury Money Post-Effective Amendment #35 (12/29/95)
Market and US Treasury Obligations Funds within the
Investment Advisory Agreement
(d) Letter agreement incorporating the Growth and Income and Post-Effective Amendment #35 (12/29/95)
Intermediate Funds within the Investment Advisory Agreement
(e) Letter agreement incorporating the Emerging markets Fund Post-Effective Amendment #35 (12/29/95)
and the Prime Money Market Fund within the Investment
Advisory Agreement
(f) Letter agreement incorporating the Tax Free Money Market Post-Effective Amendment #35 (12/29/95)
Fund within the Investment Advisory Agreement
(g) Letter agreement incorporating the Small Cap, Active Post-Effective Amendment #35 (12/29/95)
International and Real Estate Equity Funds within the
Investment Advisory Agreement
(h) Letter agreement incorporating the Life Solutions Post-Effective Amendment #41 (6/2/97)
Growth, Balanced and Income and Growth Funds within the
Investment Advisory Agreement
(i) Letter agreement incorporating the SSgA Special, Post-Effective Amendment #45 (4/28/98)
International Growth Opportunities and High Yield Bond
Funds within the Investment Advisory Agreement
(j) Letter agreement incorporating the SSgA Aggressive Post-Effective Amendment #47 (9/1/98)
Equity Fund within the Investment Advisory Agreement
(k) Letter agreement incorporating the SSgA IAM SHARES Fund Post-Effective Amendment #51 (5/28/99)
within the Investment Advisory Agreement
(l) Letter agreement incorporating the SSgA Intermediate To be filed by Amendment
Municipal Bond Fund within the Investment Advisory Agreement
6. Distribution Agreements
(a) Distribution Agreement (Class A Shares) Post-Effective Amendment #35 (12/29/95)
(a)(i) Letter agreement incorporating the Yield Plus and Bond Post-Effective Amendment #35 (12/29/95)
Market Funds within the Distribution Agreement
(a)(ii) Letter agreement incorporating the US Treasury Money Post-Effective Amendment #35 (12/29/95)
Market and US Treasury Obligations Funds within the
Distribution Agreement
<PAGE>
(a)(iii) Letter agreement incorporating the Growth and Income and Post-Effective Amendment #35 (12/29/95)
Intermediate Funds within the Distribution Agreement
(a)(iv) Letter agreement incorporating the Emerging Markets and Post-Effective Amendment #35 (12/29/95)
Prime Money Market Funds within the Distribution
Agreement
(a)(v) Letter agreement incorporating the Class A shares of the Post-Effective Amendment #35 (12/29/95)
Tax Free Money Market Fund within the Distribution Agreement
(a)(vi) Letter agreement incorporating the Small Cap, Active Post-Effective Amendment #35 (12/29/95)
International and Real Estate Equity Funds within the
Distribution Agreement
(a)(vii) Letter agreement incorporating the Life Solutions Post-Effective Amendment #41 (6/2/97)
Growth, Balanced and Income and Growth Funds within the
Distribution Agreement
(a)(viii) Letter agreement incorporating the Special Small Cap, Post-Effective Amendment #45 (4/28/98)
International Growth Opportunities and High Yield Bond
Funds within the Distribution Agreement
(a)(ix) Letter agreement incorporating the SSgA Aggressive Post-Effective Amendment #47 (9/1/98)
Equity Fund within the Distribution Agreement
(a)(x) Letter agreement incorporating the SSgA IAM SHARES Fund Post-Effective Amendment #51 (5/28/99)
within the Distribution Agreement
(a)(xi) Letter agreement incorporating the SSgA Intermediate To be filed by Amendment
Municipal Bond Fund within the Distribution Agreement
(b) Distribution Agreement (regarding Class B Shares of the Post-Effective Amendment #42 (12/24/97)
Money Market and US Government Money Market Funds)
(b)(i) Letter agreement incorporating the Class B Shares of the To be filed by amendment
Tax Free Money Market Fund within the Distribution Agreement
(c) Distribution Agreement (regarding Class C Shares of the Post-Effective Amendment #42 (12/24/97)
Money Market and US Government Money Market Funds)
(c)(i) Letter Agreement incorporating the Class C Shares of the To be filed by amendment
Tax Free Money Market Fund within the Distribution Agreement
7. Bonus, profit sharing, or pension plans None
8.(a) Custodian Contract Post-Effective Amendment #35 (12/29/95)
(b) Letter agreement incorporating the Yield Plus and Bond Post-Effective Amendment #35 (12/29/95)
Market Fund into the Custodian Contract
(c) Letter agreement incorporating the US Treasury Money Post-Effective Amendment #35 (12/29/95)
Market and US Treasury Obligations Funds into the Custodian
Contract
(d) Letter agreement incorporating the Growth and Income and Post-Effective Amendment #35 (12/29/95)
Intermediate Funds into the Custodian Contract
(e) Letter agreement incorporating the Emerging Markets and Post-Effective Amendment #35 (12/29/95)
Prime Money Market Funds into the Custodian Contract
(f) Fee Schedule, dated February 17, 1994, to Custodian Post-Effective Amendment #35 (12/29/95)
Contract
(g) Letter agreement incorporating the Tax Free Money Market Post-Effective Amendment #35 (12/29/95)
Fund into the Custodian Contract
(h) Letter agreement incorporating the Small Cap, Active Post-Effective Amendment #35 (12/29/95)
International and Real Estate Equity Funds into the
Custodian Contract
(i) Letter agreement incorporating the Life Solutions Post-Effective Amendment #41 (6/2/97)
Growth, Balanced and Income and Growth Funds into the
Custodian Contract
(j) Letter agreement incorporating the Special, Post-Effective Amendment #45 (4/28/98)
International Growth Opportunities and High Yield Bond
Funds into the Custodian Contract
<PAGE>
(k) Letter agreement incorporating the Aggressive Equity Post-Effective Amendment #47 (9/1/98)
Fund into the Custodian Contract
(l) Letter agreement incorporating the IAM SHARES Fund into Post-Effective Amendment #51 (5/28/99)
the Custodian Contract
(m) Letter agreement incorporating the Intermediate Municipal To be filed by Amendment
Bond Fund into the Custodian Contract
9(a)(i) Transfer Agency and Service Agreement Post-Effective Amendment #35 (12/29/95)
(a)(ii) Letter agreement incorporating the Yield Plus and Bond Post-Effective Amendment #35 (12/29/95)
Market Funds within the Transfer Agency and Service
Agreement
(a)(iii) Letter agreement incorporating the US Treasury Money Post-Effective Amendment #35 (12/29/95)
Market and US Treasury Obligations Funds within the
Transfer Agency and Service Agreement
(a)(iv) Letter agreement incorporating the Growth and Income and Post-Effective Amendment #35 (12/29/95)
Intermediate Funds within the Transfer Agency and Service
Agreement
(a)(v) Letter agreement incorporating the Emerging markets and Post-Effective Amendment #35 (12/29/95)
Prime Money Market Funds within the Transfer Agency and
Service Agreement
(a)(vi) Letter agreement incorporating the Tax Free Money Market Post-Effective Amendment #35 (12/29/95)
Fund within the Transfer Agency and Service Agreement
(a)(vii) Letter agreement incorporating the Small Cap, Active Post-Effective Amendment #35 (12/29/95)
International and Real Estate Equity Funds within the
Transfer Agency and Service Agreement
(a)(viii) Letter agreement incorporating the Life Solutions Post-Effective Amendment #41 (6/2/97)
Growth, Balanced and Income and Growth Funds within the
Transfer Agency and Service Agreement
(a)(ix) Letter agreement incorporating the Special, Post-Effective Amendment #45 (4/28/98)
International Growth Opportunities and High Yield Bond
Funds within the Transfer Agency and Service Agreement
(a)(x) Letter agreement incorporating the Aggressive Equity Post-Effective Amendment #47 (9/1/98)
Fund within the Transfer Agency and Service Agreement
(a)(xi) Letter agreement incorporating the IAM SHARES Fund Post-Effective Amendment #51 (5/28/99)
within the Transfer Agency and Service Agreement
(a)(xii) Letter agreement incorporating the Intermediate Municipal To be filed by Amendment
Bond Fund within the Transfer Agency and Service Agreement
(b)(i) Administration Agreement Post-Effective Amendment #35 (12/29/95)
(b)(ii) Letter agreement incorporating the Yield Plus and Bond Post-Effective Amendment #35 (12/29/95)
Market Funds within the Administration Agreement
(b)(iii) Letter agreement incorporating the US Treasury Money Post-Effective Amendment #35 (12/29/95)
Market and US Treasury Obligations Funds within the
Administration Agreement
(b)(iv) Letter agreement incorporating the Growth and Income and Post-Effective Amendment #35 (12/29/95)
Intermediate Funds within the Administration Agreement
(b)(v) Letter agreement incorporating the Emerging Markets and Post-Effective Amendment #35 (12/29/95)
Prime Money Market Funds within the Administration
Agreement
(b)(vi) Letter agreement incorporating the Tax Free Money Market Post-Effective Amendment #35 (12/29/95)
Fund within the Administration Agreement
(b)(vii) Letter agreement incorporating the Small Cap, Active Post-Effective Amendment #35 (12/29/95)
International and Real Estate Equity Funds within the
Administration Agreement
(b)(viii) Letter agreement incorporating the Life Solutions Post-Effective Amendment #35 (12/29/95)
Growth, Balanced and Income and Growth Funds within the
Administration Agreement
(b)(ix) Amendment No. 4 to the Administration Agreement between Post-Effective Amendment #41 (6/2/97)
Frank Russell Investment Management Company and SSgA
Funds
<PAGE>
(b)(x) Letter agreement incorporating the Special, Post-Effective Amendment #45 (4/28/98)
International Growth Opportunities and High Yield Bond
Funds within the Administration Agreement
(b)(xi) Letter agreement incorporating the Aggressive Equity Post-Effective Amendment #47 (9/1/98)
Fund within the Administration Agreement
(b)(xii) Letter agreement incorporating the IAM SHARES Fund Post-Effective Amendment #51 (5/28/99)
within the Administration Agreement
(b)(xiii) Letter agreement incorporating the Intermediate Municipal To be filed by Amendment
Bond Fund within the Administration Agreement
10. Opinion of Counsel
(a) Relating to The Seven Seas Series Money Market Fund Post-Effective Amendment #42 (12/24/97)
(b) Relating to The Seven Seas Series US Government Money Post-Effective Amendment #42 (12/24/97)
Market Fund
(c) Relating to The Seven Seas Series S&P 500 Index, S&P Post-Effective Amendment #42 (12/24/97)
Midcap Index, Matrix Equity, International European
Index, International Pacific Index and Short Term
Government Securities Funds
(d) Relating to The Seven Seas Series Yield Plus and Bond Post-Effective Amendment #42 (12/24/97)
Market Funds
(e) Relating to The Seven Seas Series US Treasury Money Post-Effective Amendment #42 (12/24/97)
Market and Treasury Obligations Funds
(f) Relating to The Seven Seas Series Growth and Income and Post-Effective Amendment #42 (12/24/97)
Intermediate Funds
(g) Relating to The Seven Seas Series Emerging Markets and Post-Effective Amendment #42 (12/24/97)
Prime Money Market Funds
(h) Relating to Class A, Class B and Class C Shares of The Post-Effective Amendment #42 (12/24/97)
Seven Seas Series Money Market and US Government Money
Market Funds
(i) Relating to Class A, Class B and Class C Shares of The Post-Effective Amendment #42 (12/24/97)
Seven Seas Series Tax Free Money Market Funds
(j) Relating to The Seven Seas Series Real Estate Equity Fund Post-Effective Amendment #42 (12/24/97)
(k) Relating to the SSgA Life Solutions Growth, Balanced and Post-Effective Amendment #41 (6/2/97)
Income and Growth Funds
(l) Relating to the Special, International Growth Post-Effective Amendment #45 (4/28/98)
Opportunities and High Yield Bond Funds
(m) Relating to the Aggressive Equity Fund Post-Effective Amendment #47 (9/1/98)
(n) Relating to the IAM SHARES Fund Post-Effective Amendment #51 (5/28/99)
(o) Relating to the Intermediate Municipal Bond Fund To be filed by Amendment
11. Other Opinions: Consent of Independent Accountants Post-Effective Amendment #54 (12/17/99)
12. Financial Statements Omitted from Item 23 None
13. Letter of Investment Intent
(a) The Seven Seas Series Money Market Fund Post-Effective Amendment #42 (12/24/97)
(b) The Seven Seas Series US Government Money Market Fund Post-Effective Amendment #42 (12/24/97)
(c) The Seven Seas Series Government Securities, Index, Post-Effective Amendment #42 (12/24/97)
Midcap Index, Matrix, European Index and Pacific Index
Funds
(d) The Seven Seas Series Yield Plus and Bond Market Funds Post-Effective Amendment #42 (12/24/97)
(e) The Seven Seas Series US Treasury Money Market and Post-Effective Amendment #42 (12/24/97)
Treasury Obligations Funds
(f) The Seven Seas Series Growth and Income and Intermediate Post-Effective Amendment #42 (12/24/97)
Funds
(g) The Seven Seas Series Emerging Markets and Prime Money Post-Effective Amendment #42 (12/24/97)
Market Funds
(h) Class B and C Shares of The Seven Seas Series Money Post-Effective Amendment #42 (12/24/97)
Market and US Government Money Market Funds
(i) The Seven Seas Series Tax Free Money Market Fund (Class Post-Effective Amendment #42 (12/24/97)
A, B and C Shares)
<PAGE>
(j) The Seven Seas Series Active International Fund Post-Effective Amendment #42 (12/24/97)
(k) SSgA Life Solutions Growth, Balanced and Income and Post-Effective Amendment #41 (6/2/97)
Growth Funds
(l) SSgA Special, International Growth Opportunities and Post-Effective Amendment #45 (4/28/98)
High Yield Bond Funds
(m) SSgA Aggressive Equity Fund Post-Effective Amendment #47 (9/1/98)
(n) SSgA IAM SHARES Fund Post-Effective Amendment #51 (5/28/99)
(o) SSgA Intermediate Municipal Bond Fund To be filed by Amendment
14. Prototype Retirement Plan None
15. Distribution Plans pursuant to Rule 12b-1
(a) Plan of Distribution for the government Securities, Post-Effective Amendment #35 (12/29/95)
Index, Midcap Index, Matrix, European Index and Pacific
Index Funds as approved by the Board of Trustees
(a)(i) Addendum to the Plan of Distribution incorporating the Post-Effective Amendment #35 (12/29/95)
Yield Plus and Bond Market Funds into the Plan
(a)(ii) Addendum to the Plan of Distribution incorporating the Post-Effective Amendment #35 (12/29/95)
Money Market and US Government Money Market Funds into
the Plan (Class A Shares)
(a)(iii) Addendum to the Plan of Distribution incorporating the Post-Effective Amendment #35 (12/29/95)
US Treasury Money Market and US Treasury Obligations
Funds into the Plan
(a)(iv) Addendum to the Plan of Distribution incorporating the Post-Effective Amendment #35 (12/29/95)
Growth and Income and Intermediate Funds into the Plan
(a)(v) Addendum to the Plan of Distribution incorporating the Post-Effective Amendment #35 (12/29/95)
Emerging Markets and Prime Money Market Funds into the
Plan
(a)(vi) Addendum to the Plan of Distribution incorporating the Post-Effective Amendment #35 (12/29/95)
Class A Shares of the Tax Free Money Market Fund into
the Plan
(a)(vii) Addendum to the Plan of Distribution incorporating the Post-Effective Amendment #35 (12/29/95)
Small Cap, Active International and Real Estate Equity
Funds into the Plan
(a)(viii) Addendum to the Plan of Distribution incorporating the Post-Effective Amendment #41 (6/2/97)
Life Solutions Growth, Balanced and Income and Growth
Funds into the Plan
(a)(ix) Addendum to the Plan of Distribution incorporating the Post-Effective Amendment #45 (4/28/98)
Special, International Growth Opportunities and High
Yield Bond Funds into the Plan
(a)(x) Addendum to Plan of Distribution incorporating the Post-Effective Amendment #47 (9/1/98)
Aggressive Equity Fund in the Plan
(a)(xi) Addendum to Plan of Distribution incorporating the IAM Post-Effective Amendment #51 (5/28/99)
SHARES Fund into the Plan
(a)(xii) Addendum to Plan of Distribution incorporating the To be filed by Amendment
Intermediate Municipal Bond Fund into the Plan
(b) Plan of Distribution for the Money Market and US Post-Effective Amendment #42 (12/24/97)
Government Money Market Funds (Class B Shares) as
approved by the Board of Trustees
(b)(i) Addendum to the Plan of Distribution incorporating the To be filed by amendment
Class B Shares of the Tax Free Money Market Fund
(c) Plan of Distribution for the Money Market and US Post-Effective Amendment #42 (12/24/97)
Government Money Market Funds (Class C Shares) as
approved by the Board of Trustees
(c)(i) Addendum to the Plan of Distribution incorporating the To be filed by amendment
Class C Shares of the Tax Free Money Market Fund
(d) Shareholder Servicing Agreement, by and between SSgA Post-Effective Amendment #42 (12/24/97)
Funds and State Street Bank and Trust Company
(d)(i) Shareholder Servicing Agreement, by and between SSgA Post-Effective Amendment #39 (12/27/96)
Funds and State Street Brokerage Services, Inc.
(d)(ii) Shareholder Servicing Agreement, by and between SSgA Post-Effective Amendment #39 (12/27/96)
Funds and State Street Bank and Trust Company,
Metropolitan Division of Commercial Banking Services
<PAGE>
(d)(iii) Shareholder Servicing Agreement, by and between SSgA Post-Effective Amendment #42 (12/24/97)
Funds and State Street Bank and Trust Company Retirement
Investment Services Division
(d)(iv) Shareholder Servicing Agreement, by and between SSgA Post-Effective Amendment #42 (12/24/97)
Funds and State Street Solutions
(d)(v) Shareholder Servicing Agreement, by and between SSgA Post-Effective Amendment #50 (3/15/99)
Funds and Global Cash Management Division of State
Street Bank and Trust Company
(e) Form of Agreement Pursuant to Rule 12b-1 Plan (relating To be filed by amendment
to Class B Shares) as approved by the Board of Trustees
(f) Form of Agreement Pursuant to Rule 12b-1 Plan (relating To be filed by amendment
to Class C Shares) as approved by the Board of Trustees
16. Computation of Fund Performance Quotation Post-Effective Amendment No. 51 (5/28/99)
17. Financial Data Schedule Post-Effective Amendment No. 51 (5/28/99)
</TABLE>
Item 24. Persons Controlled by or Under Common Control with Registrant
-------------------------------------------------------------
None
Item 25. Indemnification
---------------
Indemnification is provided to officers and Trustees of the Registrant
pursuant to Section 6.4 of Article VI of Registrant's First Amended and Restated
Master Trust Agreement, which reads as follows:
"Section 6.4 Indemnification of Trustees, Officers, etc. The Trust shall
indemnify (from the assets of the Sub-Trust or Sub-Trusts in question) each of
its Trustees and officers (including persons who serve at the Trust's request as
directors, officers or trustees of another organization in which the Trust has
any interest as a shareholder, creditor or otherwise [hereinafter referred to as
"Covered Person"]) against all liabilities, including but not limited to amounts
paid in satisfaction of judgments, in compromise or as fines and penalties, and
expenses, including reasonable accountants' and counsel fees, incurred by any
Covered Person in connection with the defense or disposition of any action, suit
or other proceeding, whether civil or criminal, before any court or
administrative or legislative body, in which such Covered Person may be or may
have been involved as a party or otherwise with which such person may be or may
have been threatened, while in office or thereafter, or 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 whom the proceeding
was brought that the person to be indemnified was not liable by reason of
Disabling Conduct, (ii) dismissal of a court action or an administrative
proceeding against a Covered Person for insufficiency of evidence of Disabling
Conduct, or (iii) a reasonable determination, based upon a review of the facts,
that the indemnitee was not liable by reason of Disabling Conduct by (a) a vote
of a majority of a quorum of Trustees who are neither "interested persons" of
the Trust 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. Expenses,
including accountants' and counsel fees so incurred by any such Covered Person
(but excluding amounts paid in satisfaction of judgments, in compromise or as
fines or penalties), may be paid from time to time by the Sub-Trust in question
in advance of the final disposition of any such action, suit or proceeding,
provided that the Covered Person shall have undertaken to repay the amounts so
paid to the Sub-Trust in question if it is ultimately determined that
indemnification of such expenses is not authorized under this Article VI and (i)
the Covered Person shall have provided security for such undertaking, (ii) the
Trust shall be insured against losses arising by reason of any lawful advances,
or (iii) a majority of a quorum of the disinterested Trustees who are not a
party to the proceeding, or an independent legal counsel in a written opinion,
shall have determined, based on a review of readily available facts (as opposed
to a full trial-type inquiry), that there is reason to believe that the Covered
Person ultimately will be found entitled to indemnification."
<PAGE>
The Investment Advisory Agreement provides that in the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties under the Investment Advisory Agreement or on the part of
the Adviser, or for a loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services, the Adviser shall not be
subject to liability to the Registrant or to any shareholder of the Registrant
for any error of judgment, mistake of law or any other act or omission in the
course of, or connected with, rendering services under the Investment Advisory
Agreement or for any losses that may be sustained in the purchase, holding or
sale of any security.
The Distribution Agreements relating to Class A, Class B and Class C
Shares provide that in the absence of willful misfeasance, bad faith, gross
negligence, or reckless disregard of obligations or duties under the
Distribution Agreement, the Distributor, its officers, directors and any
controlling person (within the meaning of Section 15 of the 1933 Act)
("Distributor") shall be indemnified by the Registrant from and against any and
all claims, demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities and any counsel
fees incurred in connection therewith) which Distributor may incur under the
1933 Act or under common law or otherwise arising out of or based upon any
alleged untrue statement of a material fact contained in the Registration
Statement, Prospectus or Statement of Additional Information or arising out of
or based upon any alleged omission to state a material fact required to be
stated in said documents or necessary to make the statements not misleading.
Registrant provides the following undertaking:
"Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to Trustees, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a Trustee, officer, or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted 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 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."
Item 26. Business and Other Connections of Investment Adviser.
-----------------------------------------------------
The Investment Management Division of State Street Bank and Trust
Company ("State Street") serves as adviser to the Registrant. State Street, a
Massachusetts bank, currently manages large institutional accounts and
collective investment funds. The business, profession, vocation or employment of
a substantial nature which each director or officer of the 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,
is as follows:
<TABLE>
<CAPTION>
NAME CAPACITY WITH ADVISOR BUSINESS NAME AND ADDRESS*
<S> <C> <C>
Tenley E. Albright, MD Director Chairman, Western Resources, Inc.
Two Commonwealth Avenue
Boston, MA 02116-3134
I. MacAlister Booth Director Retired Chairman, President and CEO,
Polaroid Corporation
P.O. Box 428 - 68 Barnes Hill Road
Concord, MA 01742
Marshall N. Carter Chairman and CEO State Street Bank and Trust Company
225 Franklin Street - P.O. Box 351
Boston, MA 02110
James I. Cash, Jr. Director The James E. Robison Professor of
Business Administration, Harvard
Business School (on sabbatical)
c/o Stanford Graduate School of
Business
518 Memorial Way
Stanford University
Stanford, CA 94305-5015
Truman S. Casner Director Partner, Ropes & Gray
One International Place - 37th Floor
Boston, MA 02110
<PAGE>
Nader F. Darehshori Director Chairman, President and CEO, Houghton
Mifflin Company
222 Berkeley - 5th Floor
Boston, MA 02116-3764
Arthur L. Goldstein Director Chairman and CEO, Ionics, Inc.
65 Grove Street
P.O. Box 9131
Watertown, MA 02272-9131
David P. Gruber Director President and CEO, Wyman-Gordon Company
244 Worchester Street
N. Grafton, MA 01536-8001
John M. Kucharski Director Chairman and CEO, EG&G, Inc.
45 William Street
Wellesley, MA 02181
Charles R. LaMantia Director President and CEO, Arthur D. Little,
Inc.
25 Acorn Park
Cambridge, MA 02140
David B. Perini Director Chairman and President, Perini
Corporation
73 Mt. Wayte Avenue
Framingham, MA 01701
Dennis J. Picard Director Chairman and CEO, Raytheon Company
141 Spring Street
Lexington, MA 02173
Alfred Poe Director CEO, MenuDirect Corp.
865 Centennial Avenue
Piscataway, NJ 08854
Bernard W. Reznicek Director President, Premier Group;
National Director, Utility Markets of
Central States Indemnity Company of Omaha
1212 N. 96th Street
Omaha, NE 68114-2274
David A. Spina President and Chief Operating State Street Corporation
Officer 225 Franklin Street - P.O. Box 351
Boston, MA 02110
Diana Chapman Walsh Director President, Wellesley College
106 Central Street
Wellesley, MA 02181
<PAGE>
Robert E. Weissman Director Chairman and CEO, Cognizant Corporation
200 Nyala Farms Road
Westport, CT 06880
</TABLE>
Item 27. Principal Underwriters
----------------------
(a) Russell Fund Distributors, Inc., also acts as principal underwriter
for Frank Russell Investment Company.
(b) The directors and officers of Russell Fund Distributors, Inc., their
principal business address, and positions and offices with the Registrant and
Russell Fund Distributors, Inc. are set forth below:
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITION AND OFFICES POSITION WITH
BUSINESS ADDRESS* WITH UNDERWRITER REGISTRANT
<S> <C> <C>
Lynn L. Anderson Director and CEO Trustee, Chairman of the Board,
and President
Carla L. Anderson Assistant Secretary Assistant Secretary
Karl J. Ege Secretary and General Counsel None
J. David Griswold Associate General Counsel Vice President and Secretary
and Assistant Secretary
Linda L. Gutmann Treasurer and Controller None
John C. James Assistant Secretary None
Randall P. Lert Director None
Gregory J. Lyons Assistant Secretary None
B. James Rohrbacher Director, Compliance & Internal Chief Compliance Officer
Audit, Chief Compliance Officer
Eric A. Russell Director and President None
</TABLE>
*Address of all individuals: 909 A Street, Tacoma, Washington 98402
Item 28. Location of Accounts and Records
--------------------------------
The Registrant's Administrator, Frank Russell Investment Management
Company, 909 A Street, Tacoma, Washington 98402, will maintain the physical
possession of the books and records required by subsection (b)(4) of Rule 31a-1
under the Investment Company Act of 1940. All other accounts, books and
documents required by Rule 31a-1 are maintained in the physical possession of
Registrant's investment adviser, transfer agent, and custodian, State Street
Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts, 02110 and
1776 Heritage Drive, North Quincy, Massachusetts 02171.
<PAGE>
Item 29. Management Services
-------------------
Not applicable.
Item 30. Undertakings
------------
Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, The Registrant, the SSgA Funds, has duly caused this
Post-Effective Amendment No. 55 to its Registration Statement has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Boston, and Commonwealth of
Massachusetts, on the 15th day of March, 2000.
By: /s/ Lynn L. Anderson
-----------------------------------
Lynn L. Anderson, President,
Treasurer and Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities as
indicated on March 15, 2000.
Signature Title
--------- -----
/s/ Lynn L. Anderson Trustee, President, Treasurer and
----------------------------- Chairman of the Board
Lynn L. Anderson
/s/ Steven J. Mastrovich Trustee
-----------------------------
Steven J. Mastrovich
/s/ William L. Marshall Trustee
-----------------------------
William L. Marshall
/s/ Patrick J. Riley Trustee
-----------------------------
Patrick J. Riley
/s/ Richard D. Shirk Trustee
-----------------------------
Richard D. Shirk
/s/ Bruce D. Taber Trustee
-----------------------------
Bruce D. Taber
/s/ Henry W. Todd Trustee
-----------------------------
Henry W. Todd
