Rule 424(b)(3)
Registration Nos. 333-23633
33-92120
AMERICAN BAR ASSOCIATION
MEMBERS RETIREMENT PROGRAM
UNITS OF BENEFICIAL INTEREST
IN THE AMERICAN BAR ASSOCIATION
MEMBERS/STATE STREET COLLECTIVE TRUST
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SUPPLEMENT DATED JUNE 2, 1997
TO PROSPECTUS DATED APRIL 16, 1997
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INTRODUCTION
This supplement to the Prospectus dated April 16, 1997 (the
"Prospectus") for units of beneficial interest in the American Bar Association
Members/State Street Collective Trust (the "Collective Trust") describes changes
that have been made by State Street with respect to the Balanced Fund and the
Growth Equity Fund. Generally, terms not defined in this supplement that are
defined in the Prospectus have the same meanings given to them in the
Prospectus. This supplement should be read in conjunction with the Prospectus,
which accompanies this supplement or which has previously been sent to
Participants. Upon written or oral request, State Street will provide a copy of
the Prospectus without charge to each person to whom this supplement has been
delivered. Requests for a Prospectus should be directed to State Street Bank and
Trust Company, Attention ABRA Customer Service, Post Office Box 9109, Boston,
Massachusetts 02209-9109; telephone number (800) 348-2272.
As described in the Prospectus under the caption "Investment
Advisors" on page 39, State Street has retained the services of various
Investment Advisors to advise it with respect to certain of the Funds available
as investment options under the Program. State Street exercises discretion with
respect to the selection and retention of Investment Advisors and may, upon
consultation with ABRA, remove an Investment Advisor at any time. State Street
may, upon consultation with ABRA, also change the allocation of assets among
Investment Advisors to a particular Fund. State Street has determined to make
certain changes with respect to the Balanced Fund and the Growth Equity Fund.
These changes are described below.
CHANGES TO THE BALANCED FUND
INVESTMENT ADVISORS. Currently, Miller, Anderson & Sherrerd and
Lincoln Capital Management Company serve as Investment Advisors for the Balanced
Fund and each Investment Advisor provides investment advice for both debt and
equity securities. Effective June 30, 1997, Lincoln Capital Management Company
no longer will serve as Investment Advisor for the Balanced Fund. As of that
date, State Street will engage Capital Guardian Trust Company ("Capital
Guardian") and will continue to retain Miller, Anderson
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& Sherrerd, to serve as Investment Advisors to provide investment advice and
arrange for the execution of purchases and sales of securities for the Balanced
Fund. Capital Guardian will serve as Investment Advisor with respect to
investments by the Fund in equity securities and Miller, Anderson & Sherrerd
will serve as Investment Advisor with respect to investments in debt securities.
ASSET ALLOCATION. Effective June 30, 1997, State Street will direct
the allocation of the Fund's assets between debt and equity securities
consistent with the Fund's strategy. This is different from State Street's
current practice, which is to allocate a portion of the assets to each of the
Investment Advisors, who then advise on both debt and equity securities.
Effective June 30, 1997, State Street has directed that approximately 40% of the
Balanced Fund's assets will be allocated to debt securities and approximately
60% will be allocated to equity securities. Contributions to and withdrawals
from the Fund will be allocated so that the percentage of debt and equity
securities will be as close to approximately 40% and 60%, respectively, as may
be practical, taking into account the level of contributions and withdrawals and
the Fund's percentage of debt and equity securities at the time of the
contribution or withdrawal. State Street may change the allocation within the
Fund, as well as the allocation of the contributions to and withdrawals from the
Fund from time to time. Income and realized gains attributable to the assets
allocated to each Investment Advisor will remain allocated to such Investment
Advisor until reallocated by State Street. For additional information regarding
the Investment Advisors, see the information in the Prospectus on pages 39 to 42
under the caption "Investment Advisors."
CHANGES TO THE GROWTH EQUITY FUND
INVESTMENT ADVISORS. Currently, Capital Guardian, RCM Capital
Management and Columbus Circle Investors are advisors for the Growth Equity
Fund. Effective June 16, 1997, Columbus Circle Investors will no longer serve as
an Investment Advisor. As of that date, State Street will engage Bankers Trust
Company ("Bankers Trust") and, effective June, 30, 1997, State Street will
engage Lincoln Capital Management Company ("Lincoln Capital") and continue to
retain Capital Guardian and RCM Capital Management ("RCM Capital"), to serve as
Investment Advisors to provide investment advice and arrange for the execution
of purchases and sales of securities for the Growth Equity Fund. Unless changed
by State Street in the future, State Street has determined that effective as of
June 30, 1997, the assets and contributions to and withdrawals from the Growth
Equity Fund will be allocated 25% to each of Bankers Trust, Lincoln Capital,
Capital Guardian and RCM Capital. Income and realized gains attributable to the
assets allocated to each Investment Advisor will remain allocated to such
Investment Advisor, thereby changing the percentage of total assets of the
Growth Equity Fund allocated to each Investment Advisor. An Investment Advisor
with superior performance as compared to the other Investment Advisors for the
Growth Equity Fund will thus provide investment advice with respect to a larger
portion of the Fund than originally allocated to such Investment Advisor.
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Bankers Trust began business in 1903 as a trust company and became a
commercial bank in 1917, and it is now one of the largest commercial banks in
the United States and is on the forefront of global finance, with over 15,000
employees in more than 50 countries. Its holding company, Bankers Trust New York
Corporation, is headquartered in One Bankers Trust Plaza, New York, NY 10006.
The bank's client base includes major corporations, financial institutions,
governments and high net worth individuals. The Global Investment Management
Group ("GIM") is the firm's primary provider of asset management services. Since
the 1930's, GIM and its global affiliates, including Bankers Trust Australia
Limited and Japan Bankers Trust, have built one of the world's largest asset
management firms. As of March 31, 1997, Bankers Trust managed over $230 billion
in assets for institutional and individual clients worldwide (of which
approximately $200 billion was managed by GIM). For information as to Lincoln
Capital, Capital Guardian and RCM Capital, see the information in the Prospectus
on pages 39 to 42 under the caption "Investment Advisors."
INVESTMENT OBJECTIVE AND STRATEGY. As described in the Prospectus on
page 26 under the captions "Investment Objective" and "Strategy," the Growth
Equity Fund seeks to achieve growth of capital through increases in the value of
the securities it holds and to realize income principally from dividends on such
securities. The Growth Equity Fund invests primarily in common stocks and
equity-type securities issued by large, well-established companies. In keeping
with this objective and strategy, the portion of the Growth Equity Fund for
which investment advice is obtained from Bankers Trust will be invested to
replicate the Russell 1000 Growth Index, which is composed of 1,000 securities
with a greater than average growth orientation. Securities in this index tend to
exhibit higher price-to-book and price-to-earnings ratios, lower dividend yields
and higher forecasted growth than a universe of value securities. THERE CAN BE
NO ASSURANCE THAT THE INDEX PORTION OF THE GROWTH EQUITY FUND WILL ACHIEVE ITS
INVESTMENT OBJECTIVE OF REPLICATING THE TOTAL RETURN OF THE RUSSELL 1000 GROWTH
INDEX.
INVESTMENT ADVISOR FEES
As described in the Prospectus on pages 59 to 61 under the caption
"Investment Advisor Fee," a fee is paid to each Investment Advisor based on the
assets allocated to that Investment Advisor. These fees are accrued on a daily
basis and paid monthly from the assets of the Funds. Upon completion of the
changes in Investment Advisors described above, the Investment Advisor Fees
payable to the Investment Advisors referred to in this supplement will be as
follows:
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VALUE OF ASSETS IN
BALANCED FUND, GROWTH EQUITY FUND,
AGGRESSIVE EQUITY FUND, ALLOCATED
TO CAPITAL GUARDIAN RATE
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First $20 million...................... .50%
Next $30 million....................... .35
Next $50 million....................... .225
VALUE OF ASSETS IN
BALANCED FUND ALLOCATED TO
MILLER, ANDERSON & SHERRERD RATE
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First $25 million...................... .50%
Next $50 million....................... .25
Next $775 million...................... .15
Over $850 million...................... .125
VALUE OF ASSETS IN
GROWTH EQUITY FUND
ALLOCATED TO LINCOLN CAPITAL RATE
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First $20 million...................... .4675%
Next $130 million...................... .35
Next $350 million...................... .25
Next $500 million...................... .20%
Over $1,000 million.................... .15%
VALUE OF ASSETS IN
GROWTH EQUITY FUND
ALLOCATED TO RCM CAPITAL RATE
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First $10 million...................... .70%
Next $10 million....................... .60
Next $20 million....................... .50
Next $20 million....................... .35
Next $40 million....................... .30
Over $100 million...................... .25
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VALUE OF ASSETS IN
GROWTH EQUITY FUND
ALLOCATED TO BANKERS TRUST RATE
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First $100 million..................... .075%
Next $100 million...................... .0375
Over $200 million...................... .010
The minimum annual fee for Bankers Trust is $75,000. The minimum fee will be
paid if the portion of the Growth Equity Fund allocated to Bankers Trust is less
than $100,000,000. The initial allocation will be in excess of that amount.
The Program Expense Fee and the Trustee, Management and
Administrative Fees with respect to each of the Funds will not change as a
result of the changes described above.
June 2, 1997
