<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 21, 1998
REGISTRATION NO. 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
---------------
AMERICAN BAR ASSOCIATION MEMBERS/
STATE STREET COLLECTIVE TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
---------------
MASSACHUSETTS 6722 04-6691601
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (IRS EMPLOYER
JURISDICTION OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
INCORPORATION OR
ORGANIZATION)
225 FRANKLIN STREET, BOSTON, MASSACHUSETTS 02110
(617) 985-3000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
MAUREEN SCANNELL BATEMAN, ESQ.
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
STATE STREET BANK AND TRUST COMPANY
225 FRANKLIN STREET
BOSTON, MASSACHUSETTS 02110
(617) 985-3000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
WITH A COPY TO:
JUDITH R. THOYER, ESQ.
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019-6064
(212) 373-3000
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
Pursuant to Rule 429 under the Securities Act, the prospectus contained in
this Registration Statement also relates to Registration Statement No. 333-
23633.
CALCULATION OF REGISTRATION FEE
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- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TITLE OF EACH CLASS OF SECURITIES PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED AGGREGATE OFFERING PRICE REGISTRATION FEE
- -------------------------------------------------------------------------------
<S> <C> <C>
Units of beneficial interest....... $2,000,000,000(1)(2) $556,000
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) The Collective Trust may offer and sell an unlimited number of units
representing interests in separate funds and portfolios of the Collective
Trust, each unit to be offered and sold at the per unit net asset value of
the corresponding fund or portfolio.
(2) Does not include $389,157,394 of units previously registered and remaining
unsold as of November 30, 1998. The units are being carried forward
pursuant to Rule 429 under the Securities Act.
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FUTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE +
+CHANGED. THE COLLECTIVE TRUST MAY NOT SELL THESE SECURITIES UNTIL THE +
+REGISTRATION STATEMENT RELATING TO THIS OFFERING AND FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN +
+OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE +
+SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
AMERICAN BAR ASSOCIATION MEMBERS RETIREMENT PROGRAM
UNITS OF BENEFICIAL INTEREST
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
The American Bar Association Members/State Street Collective Trust (the
"Collective Trust") is offering units ("Units") representing pro rata
beneficial interests in eight collective investment funds ("Funds") and three
portfolios of the Structured Portfolio Service established under the Collective
Trust. The Funds and the portfolios of the Structured Portfolio Service are
investment options under the American Bar Association Members Retirement
Program (the "Program"), a comprehensive retirement program sponsored by the
American Bar Retirement Association ("ABRA") in which employees who are members
or associates of the American Bar Association, most state and local bar
associations or certain organizations related to the practice of law are
eligible to participate.
State Street Bank and Trust Company ("State Street"),the trustee of the
Collective Trust, operates and administers the Funds and the portfolios of the
Structured Portfolio Service and provides administrative services to the
Program.
The following Funds are available through the Program:
STABLE ASSET RETURN FUNDSM invests primarily in high quality short-term
instruments and investment contracts issued by insurance companies, banks or
other financial institutions, with the objective of providing current income
consistent with preserving principal and maintaining liquidity.
INTERMEDIATE BOND FUND invests generally in debt securities of varying
maturities, with an average portfolio duration of 3 to 6 years, with the
objective of achieving a competitive total return from current income and
capital appreciation.
BALANCED FUND invests primarily in common stocks, other equity-type
securities, medium to long-term debt securities and money market instruments,
with the objective of achieving both long-term capital appreciation and current
income.
VALUE EQUITY FUNDSM invests primarily in common stocks of larger companies
believed to be attractively priced relative to their future earnings power,
with the objective of achieving long-term growth of capital and dividend
income.
GROWTH EQUITY FUND invests primarily in common stocks and other equity-type
securities issued by large, well-established companies, with the primary
objective of achieving long-term growth of capital and the secondary objective
of realizing income.
INDEX EQUITY FUND invests primarily in common stocks with the objective of
replicating the total return of the broad U. S. stock market represented by the
Russell 3000 Index.
AGGRESSIVE EQUITY FUND invests primarily in common stocks and other equity-
type securities issued by small to medium sized companies believed to have a
strong potential for appreciation, with the objective of maximizing long-term
growth of capital.
INTERNATIONAL EQUITY FUND invests primarily in common stocks of established
non-U.S. companies, with the objective of achieving long-term growth of
capital.
Assets contributed under the Program may also be invested in portfolios of
the STRUCTURED PORTFOLIO SERVICESM, an investment service that offers three
distinct approaches to diversifying investments in the Program by giving
Investors the opportunity to select conservative, moderate or aggressive
allocations of assets among the Funds described above.
In addition, assets contributed under the Program may be invested in any
publicly traded debt and equity securities and shares of numerous mutual funds
through Self-Managed Accounts. The Self-Managed Accounts are not registered
under the Securities Act of 1933, as amended and are described in this
prospectus for information purposes only.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
FUNDS AND THE PORTFOLIOS OF THE STRUCTURED PORTFOLIO SERVICE UNDER THE
COLLECTIVE TRUST ARE NOT REGISTERED AS INVESTMENT COMPANIES UNDER THE
INVESTMENT COMPANY ACT OF 1940 AND, THEREFORE, ARE NOT SUBJECT TO COMPLIANCE
WITH THE REQUIREMENTS OF SUCH ACT. UNITS ARE NOT "REDEEMABLE SECURITIES" WITHIN
THE MEANING OF THE INVESTMENT COMPANY ACT OF 1940. SEE "REGULATION OF
COLLECTIVE TRUST."
The date of this prospectus is , 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary......................................................... 3
Description of Investment Options.......................................... 16
Stable Asset Return Fund................................................... 17
Intermediate Bond Fund..................................................... 21
Balanced Fund.............................................................. 24
Value Equity Fund.......................................................... 26
Growth Equity Fund......................................................... 27
Index Equity Fund.......................................................... 29
Aggressive Equity Fund..................................................... 31
International Equity Fund.................................................. 33
Certain Information with Respect to the Funds.............................. 36
Derivative Instruments..................................................... 38
Investment Advisors........................................................ 42
Structured Portfolio Service............................................... 44
Self-Managed Accounts...................................................... 46
Equitable Real Estate Account.............................................. 46
Transfers between Investment Options and Withdrawals....................... 47
The Program................................................................ 48
Adoption of Program........................................................ 49
State Street .............................................................. 49
American Bar Retirement Association........................................ 53
Contributions and Investment Selection..................................... 53
Deductions and Fees........................................................ 56
ERISA and Fiduciary Obligations............................................ 59
Regulation of Collective Trust............................................. 62
Federal Income Tax Considerations.......................................... 64
Taxation of Collective Trust............................................... 67
Legal Matters.............................................................. 67
Experts.................................................................... 67
Available Information...................................................... 67
Index to Financial Statements.............................................. F-1
</TABLE>
References in this prospectus to "Business Day" mean any day that the New
York Stock Exchange is open for trading.
For additional information regarding all aspects of the Program and the
investment options offered thereunder, contact State Street by phone at (800)
826-8901 or by writing to American Bar Association Members Retirement Program,
P.O. Box 2236, Boston, Massachusetts 02209.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION AND
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY STATE
STREET.
UNITS OF BENEFICIAL INTEREST IN THE FUNDS AND THE PORTFOLIOS OF THE
STRUCTURED PORTFOLIO SERVICE ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, STATE STREET, AND UNITS OF BENEFICIAL INTEREST ARE NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY
OTHER AGENCY, AND INVOLVE RISKS INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
2
<PAGE>
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus.
Because it is a summary, it does not contain all of the information that you
should consider before investing. You should read the entire prospectus
carefully, including the "Risk Factors" information included in the description
of each of the Funds and the portfolios of the Structured Portfolio Service.
INVESTMENT OPTIONS
Assets contributed or held under the Program can be invested in the following
collective investment funds, portfolios of the Structured Portfolio Service or
a Self-Managed Account.
COLLECTIVE INVESTMENT FUNDS
State Street offers eight Funds under the Collective Trust. The Stable Asset
Return Fund invests primarily in high quality short-term instruments and
investment contracts. The Intermediate Bond Fund invests primarily in debt
securities of varying maturities. The Index Equity Fund invests primarily in
common stocks included in the Russell 3000 Index. The Value Equity Fund, Growth
Equity Fund, Aggressive Equity Fund and International Equity Fund invest
primarily in equity securities. The Balanced Fund invests in both equity and
debt securities.
State Street may make additional Funds available as investment options from
time to time, subject to the approval of ABRA, and State Street may terminate
or amend the terms of the investment options from time to time upon notice to,
and in consultation with, ABRA.
STRUCTURED PORTFOLIO SERVICE
State Street also makes available three portfolios in the Structured
Portfolio Service, an investment service that offers three distinct approaches
to diversifying investments in the Program by giving investors the opportunity
to select conservative, moderate or aggressive allocations of assets among the
above-described collective investment Funds.
SELF-MANAGED ACCOUNT
In addition, assets contributed or held under the Program can be invested in
a wide variety of publicly traded debt and equity securities and shares of
numerous mutual funds through a self-managed brokerage account (the "Self-
Managed Account"). Self-Managed Accounts are not registered under the
Securities Act and are described in this prospectus for information purposes
only. See "Self-Managed Accounts."
The Funds, the portfolios of the Structured Portfolio Service and the Self-
Managed Account are collectively referred to in this prospectus as "Investment
Options."
The following chart provides a summary of the features of the Investment
Options that are available under the Program.
3
<PAGE>
SUMMARY OF INVESTMENT OPTIONS*
<TABLE>
<CAPTION>
STABLE ASSET INTERMEDIATE BALANCED VALUE EQUITY GROWTH INDEX EQUITY AGGRESSIVE INTERNATIONAL
RETURN FUND** BOND FUND FUND FUND EQUITY FUND FUND*** EQUITY FUND EQUITY FUND
------------- ------------ ------------ -------------- ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment Current Total return Current Long-term Long-term Replication Long-term Long-term
Objective: income from current income and growth of growth of of the total growth of growth of
consistent income and long-term capital and capital and return of capital capital
with capital capital dividend some the Russell
preserving appreciation appreciation income dividend 3000 Index
principal income
and
maintaining
liquidity
Invests High quality Debt Common Common stocks, Common Most of the Common Common
Primarily short-term securities, stocks, primarily of stocks and common stocks of stocks and
In: instruments 2/3 actively other large equity-type stocks small to other equity
and managed and equity-type capitalization securities included in medium sized securities
investment 1/3 invested securities companies, of large, the Russell companies of
contracts of to replicate and debt believed to be well 3000 Index believed to established
insurance the Lehman securities undervalued established have strong non-U.S.
companies, Brothers companies appreciation companies
banks and Government/ potential
financial Corporate
institutions Bond Index
Risk to Low risk to Average Lower than a Average for an Average for Average for Higher than Higher than
Principal: principal credit risk fund equity fund an equity a average for average for
for a debt- investing fund diversified an equity an equity
oriented primarily in U.S. equity fund fund,
intermediate equities fund including
bond fund; risks due to
also risk of currency
loss related fluctuations
to movements
in interest
rates
Primary Interest Interest Interest Capital Capital Capital Capital Capital
Source income income and income, appreciation appreciation appreciation appreciation appreciation
of capital dividend and dividend and dividend and dividend
Potential appreciation income and income income income
Return: capital
appreciation
Estimated 1.12 years+ Generally 3 For debt N/A N/A N/A N/A N/A
Maturity to 6 years securities,
or duration generally
Duration: 5 to 6 years
duration
Volatility Subject to Below Generally Average for a Average for Comparable Above Above
of interest average less fund investing a fund to the average for average for
Return: rate volatility volatile in equities investing in Russell 3000 a fund a fund
fluctuation for a fund than a fund equities Index investing in investing in
investing in investing equities equities
debt exclusively
securities; in equities
volatility
subject to
fluctuations
in interest
rates
Transfer Daily Daily Daily Daily Daily Daily Daily Daily
Permitted:
</TABLE>
- -------
* In addition, certain Plans permit investors to establish a self-managed
brokerage account. See "Self-Managed Accounts."
** Invests through the State Street Bank and Trust Company ABA Members/Pooled
Stable Asset Fund Trust, a collective investment fund maintained by State
Street.
*** Invests through the State Street Bank and Trust Company Russell 3000 Non-
Lending Fund, a collective investment fund maintained by State Street.
+ Average weighted maturity as of September 30, 1998.
4
<PAGE>
SUMMARY OF INVESTMENT OPTIONS
<TABLE>
<CAPTION>
STRUCTURED PORTFOLIO SERVICE
----------------------------------------------------------------------------
CONSERVATIVE MODERATE AGGRESSIVE
------------------------- ------------------------ ------------------------
<S> <C> <C> <C>
Investment Objectives: Higher current investment High current investment Long-term growth of
income and some capital income and greater capital and lower
appreciation capital appreciation current investment
income
Allocates Assets Stable Asset Return Fund. Stable Asset Return Intermediate Bond Fund..
30% Fund............... 10% 15%
To: Intermediate Bond Intermediate Bond Fund.. Value Equity Fund... 15%
Fund.................35% 30%
Value Equity Fund..... 7% Value Equity Fund... 11% Growth Equity Fund.. 15%
Growth Equity Fund.... 7% Growth Equity Fund.. 11% Index Equity Fund... 30%
Index Equity Fund.... 14% Index Equity Fund... 23% Aggressive Equity Fund..
5%
International Equity International Equity International Equity
Fund................. 7% Fund............... 15% Fund............... 20%
Transfer Permitted: Daily Daily Daily
</TABLE>
5
<PAGE>
OTHER EXISTING INVESTMENTS
Certain assets contributed to the Program prior to January 1, 1992 are held
by The Equitable Life Assurance Society of The United States ("Equitable Life")
in the Equitable Real Estate Account, The Equitable Real Estate Account is a
separate account managed by ERE Yarmouth, Inc. under a contract with Equitable
Life that invests primarily in real estate. See "Equitable Real Estate
Account." Equitable Life will continue to hold and invest assets allocated to
the Equitable Real Estate Account until they are withdrawn from the Program or
transferred to another Investment Option available under the Program.
Restrictions may apply to withdrawals and transfers from the Equitable Real
Estate Account that may delay a withdrawal or transfer for a significant period
of time following a withdrawal or transfer request. No contributions or
transfers to the Equitable Real Estate Account are permitted. For more detailed
information relating to the Equitable Real Estate Accounts, see "Contributions
and Investment Selection--Additional Information." State Street has no control
over the management of assets held by Equitable Life and is not responsible for
the investment of such assets or the performance by Equitable Life or ERE
Yarmouth, Inc. of their obligations under the Program with respect to such
assets.
THE UNITS
Interests in the respective Funds and the portfolios of the Structured
Portfolio Service are represented by Units of beneficial interest. Each Unit
represents an equal pro rata interest in the net assets of a Fund or a
portfolio of the Structured Portfolio Service. Although the Funds and the
portfolios of the Structured Portfolio Service are similar in certain respects
to registered open-end management investment companies (commonly referred to as
"mutual funds"), the Funds and the portfolios of the Structured Portfolio
Service are not required to be (and are not) registered as investment companies
under the Investment Company Act of 1940 and, therefore, are not subject to
compliance with the requirements of such act. Units are not "redeemable
securities" as defined in the Investment Company Act. See "Description of
Investment Options" and "Regulation of Collective Trust." Units representing
interests in the Funds or in each of the three portfolios of the Structured
Portfolio Service are held by State Street, as trustee, for the benefit of the
person or entity vested with investment responsibility for the assets
contributed to the Program. Neither the Units nor the assets of the Funds or
the portfolios of the Structured Portfolio Service are subject to the claims of
State Street's creditors. The Units are not insured by the Federal Deposit
Insurance Corporation or any other governmental agency. State Street's
activities in connection with the operation of the Collective Trust are subject
to the requirements of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), a federal statute specifically designed to regulate the
activities of pension plan fiduciaries. See "Regulation of Collective Trust."
THE PROGRAM
The American Bar Association Members Retirement Program is a comprehensive
retirement program that provides eligible employers who adopt the Program with
tax-qualified employee retirement plans, a variety of investment options and
related recordkeeping and administrative services. The Program is sponsored by
the American Bar Retirement Association ("ABRA"), organized by the American Bar
Association to sponsor retirement programs for employers who are members or
associates of the American Bar Association, most state and local bar
associations or certain organizations related to the practice of law, as
described in the following paragraph.
ELIGIBLE EMPLOYERS AND PARTICIPANTS
Attorneys who are sole practitioners and partnerships and professional
corporations engaged in the practice of law can adopt the Program for their law
practices if they or one of their partners or shareholders is a member or
associate of the ABA or of a state or local bar association that is
6
<PAGE>
represented in the ABA's House of Delegates. Such a bar association or an
organization closely associated with the legal profession that has as an owner
or member of its governing board a member or associate of the ABA may also be
eligible to adopt the Program. The law practices, bar associations and other
organizations that are eligible to adopt the Program are referred to in this
prospectus as "Eligible Employers," and those that adopt the Program are
referred to as "Employers." The term "Participants" means employees (together
with their beneficiaries where applicable) of Employers who have adopted the
Program for their practices.
PLANS AVAILABLE UNDER THE PROGRAM
Eligible Employers who elect to participate in the Program may do so by
adopting a master plan under one or both of two ABA Members Plans sponsored by
ABRA. One of the ABA Members Plans is the American Bar Association Members
Retirement Plan, a defined contribution master plan, and the other is the
American Bar Association Members Defined Benefit Plan, a defined benefit master
plan. Eligible Employers that design and maintain their own individually
designed plans may also participate in certain aspects of the Program through
such plans.
THE ABA MEMBERS TRUSTS
Assets contributed under the Program are held by State Street as trustee of
the American Bar Association Members Retirement Trust in the case of assets
contributed under master plans and the American Bar Association Members Pooled
Trust for Retirement Plans in the case of assets contributed under individually
designed plans. Assets contributed under the Program are allocated among the
Investment Options available under the Program in accordance with the
instructions of the person or entity vested with responsibility for determining
such allocation pursuant to the terms of the particular plan.
THE TRUSTEE
State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110, (617) 985-3000, administers and offers the Investment
Options for the Program. On behalf of its clients, State Street and its
affiliates held over $4.3 trillion of assets in trust or under custody and had
over $422 billion of assets under management as of September 30, 1998. State
Street is also responsible for recordkeeping and administrative services
required by the Program, including maintenance of individual account records or
accrued benefit information for Participants whose Employers choose to have
State Street maintain such account records. State Street also provides account
and investment information to Employers and Participants, receives all plan
contributions, effects investment and transfer transactions and distributes all
benefits provided by the plans.
7
<PAGE>
SUMMARY OF FEES AND DEDUCTIONS
The table set forth below provides information regarding the various costs
and expenses of the Program with respect to an investment in each of the
Investment Options. Such estimated expenses are stated as a percentage of the
assets of each Investment Option. Certain non-recurring fees and plan
administrative fees, which will be assessed against Employers or Participant
account balances, are not reflected in the table and are described elsewhere in
this prospectus. For a discussion of the manner in which fees and deductions
are calculated and the amount of such fees and deductions to be received by
various parties in connection with the Program, see "Deductions and Fees."
<TABLE>
<CAPTION>
STABLE INTER- INTER-
ASSET MEDIATE VALUE GROWTH INDEX AGGRESSIVE NATIONAL
RETURN BOND BALANCED EQUITY EQUITY EQUITY EQUITY EQUITY
FUND FUND FUND FUND FUND FUND FUND FUND
------ ------- -------- ------ ------ ------ ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ESTIMATED EXPENSES:
Program Expense Fee(1).. .315% .315% .315% .315% .315% .315% .315% .315%
Trustee, Management and
Administrative Fees and
Investment Advisor
Fees(1)................ .092% .456% .322% .417% .321% .092% .540% .941%
Other Expenses(2)....... .061% .061% .061% .061% .061% .061% .061% .061%
---- ---- ---- ---- ---- ---- ---- -----
Total................... .468% .832% .698% .793% .697% .468% .916% 1.317%
</TABLE>
- --------
(1) The table is based on approximate assets of the Program on September 30,
1998, which total $2,815,000,000. The total includes $666,000,000 for the
Stable Asset Return Fund, $116,000,000 for the Intermediate Bond Fund,
$373,000,000 for the Balanced Fund, $125,000,000 for the Value Equity Fund,
$1,036,000,000 for the Growth Equity Fund, $176,000,000 for the Index Fund,
$259,000,000 for the Aggressive Equity Fund, $60,000,000 for the
International Equity Fund, and $4,000,000 for the Equitable Real Estate
Account. See Note 2 below. These fees vary based on the size of the Funds
or, as applicable, the portfolios of the Structured Portfolio Service.
(2) Includes the amortization of organizational expenses and fees and
deductions relating to recurring operational expenses, such as printing,
legal, registration, consulting and accounting expenses. The foregoing
chart does not include fees and expenses payable by the Employer and the
Participant. It also does not include fees charged for the Self-Managed
Account.
Assets invested through the Equitable Real Estate Account are subject to the
program expense fee. Transaction costs, such as brokerage fees, commissions and
other expenses attributable to a Participant's or Employer's Self-Managed
Account, are charged in accordance with the schedule provided to the Employer
and the Participant from time to time. See "Deductions and Fees."
8
<PAGE>
SELECTED FINANCIAL DATA
The selected financial data below provide information with respect to income,
expenses and capital changes for each Fund attributable to each Unit
outstanding for the periods indicated. The selected financial data for each of
the periods ended December 31 have been derived from financial statements
audited by PricewaterhouseCoopers LLP, independent accountants of the
Collective Trust. The selected financial data should be read in conjunction
with the financial statements of the Funds, which appear elsewhere in this
prospectus. The following selected financial data for the nine months ended
September 30, 1998 are unaudited. State Street, as trustee of the Collective
Trust, has prepared the unaudited selected financial data on the same basis as
the audited financial statements and believes that they include all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair presentation. Results for the nine months ended September 30, 1998 are not
indicative of results for a full year. Per-Unit calculations have been prepared
using the monthly average number of units outstanding during the period.
STABLE ASSET RETURN FUND:*
<TABLE>
<CAPTION>
FOR THE PERIOD FOR THE PERIOD
DECEMBER 5, YEAR ENDED JANUARY 1,
1991** TO DECEMBER 31, 1998 TO
DECEMBER 31, ---------------------------------------------------------- SEPTEMBER 30,
1991 1992 1993 1994 1995 1996 1997 1998
-------------- -------- -------- -------- -------- -------- -------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED FINANCIAL DATA
FOR EACH UNIT
OUTSTANDING FOR THE
PERIODS INDICATED:
Investment income....... $ .004 $ .042 $ .035 $ .043 $ .061 $ .058 $ .060 $ .044
Expenses................ (.000) (.008) (.008) (.007) (.007) (.007) (.007) (.004)
-------- -------- -------- -------- -------- -------- -------- --------
Net investment income... .004 .034 .027 .036 .054 .051 .053 .040
Reinvestment of net
investment income...... (.004) (.034) (.027) (.036) (.054) (.051) (.053) (.040)
-------- -------- -------- -------- -------- -------- -------- --------
Net asset value at
beginning and end of
period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ======== ======== ========
Ratio of expenses to
average net assets..... -- .79% .75% .73% .73% .68% .68% .63%***
Ratio of net investment
income to average net
assets................. -- 3.45% 2.77% 3.55% 5.32% 5.15% 5.38% 5.47%***
Net assets at end of
period (in thousands).. $560,334 $589,882 $509,905 $491,979 $630,208 $634,763 $634,565 $665,862
</TABLE>
INTERMEDIATE BOND FUND:
<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED JANUARY 1,
FOR THE PERIOD DECEMBER 31, 1998 TO
SEPTEMBER 5, 1995** ----------------- SEPTEMBER 30,
TO DECEMBER 31, 1995 1996 1997 1998
-------------------- ------- -------- --------------
<S> <C> <C> <C> <C>
SELECTED FINANCIAL DATA
FOR EACH UNIT
OUTSTANDING FOR THE
PERIODS INDICATED:
Investment income....... $ .34 $ .67 $ .97 $ .52
Expenses................ (.02) (.06) (.07) (.04)
------- ------- -------- --------
Net investment income... .32 .61 .90 .48
Net realized and
unrealized gain (loss)
on investments......... .26 (.30) .12 .59
------- ------- -------- --------
Net increase in unit
value.................. .58 .31 1.02 1.07
Net asset value at be-
ginning of period...... 10.00 10.58 10.89 11.91
------- ------- -------- --------
Net asset value at end
of period.............. $ 10.58 $ 10.89 $ 11.91 $ 12.98
======= ======= ======== ========
Ratio of expenses to av-
erage net assets....... .69%*** .58% .57% .52%***
Ratio of net investment
income to average net
assets................. 9.17%*** 5.82% 7.93% 5.61%***
Portfolio turnover****.. 2%+ 22% 14% 14%+
Total return............ 5.80%+ 2.93% 9.37% 8.98%+
Net assets at end of pe-
riod (in thousands).... $36,457 $49,612 $ 82,734 $116,263
</TABLE>
- -------
* As of September 5, 1995, the Blended Rate Fund was merged into the Enhanced
Short Term Investment Fund ("ESTIF") and ESTIF's name was changed to the
Stable Asset Return Fund. The financial statements of the Fund reflect a
combination of the assets and liabilities of ESTIF and the Blended Rate Fund
as of the effective date of the merger. As of such date, Units previously
outstanding of the Blended Rate Fund were deemed exchanged for Units of
ESTIF and all Units of ESTIF outstanding were deemed Units of the Stable
Asset Return Fund.
** Commencement of operations.
*** Ratios annualized.
**** Reflects purchases and sales of shares of the registered investment
companies in which the Fund invests rather than the turnover of the
underlying portfolios of such registered investment companies.
+ Not annualized.
9
<PAGE>
BALANCED FUND:*
<TABLE>
<CAPTION>
FOR THE PERIOD FOR THE PERIOD
JANUARY 2, YEAR ENDED JANUARY 1,
1992** TO DECEMBER 31, 1998 TO
DECEMBER 31, ------------------------------------------------ SEPTEMBER 30,
1992 1993 1994 1995 1996 1997 1998
-------------- -------- -------- -------- -------- -------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED FINANCIAL DATA
FOR EACH UNIT
OUTSTANDING FOR THE
PERIODS INDICATED:
Investment income....... $ .89 $ 1.00 $ 1.08 $ 1.19 $ 1.30 $ 1.42 $ 1.27
Expenses................ (.25) (.26) (.26) (.29) (.33) (.35) (.27)
-------- -------- -------- -------- -------- -------- --------
Net investment income... .64 .74 .82 .90 .97 1.07 1.00
Net realized and
unrealized gain (loss)
on investments......... (1.56) .82 (.82) 6.07 3.78 6.59 1.64
-------- -------- -------- -------- -------- -------- --------
Net increase (decrease)
in unit value.......... (.92) 1.56 -- 6.97 4.75 7.66 2.64
Net asset value at
beginning of period.... 24.40 23.48 25.04 25.04 32.01 36.76 44.42
-------- -------- -------- -------- -------- -------- --------
Net asset value at end
of period.............. $ 23.48 $ 25.04 $ 25.04 $ 32.01 $ 36.76 $ 44.42 $ 47.06
======== ======== ======== ======== ======== ======== ========
Ratio of expenses to av-
erage net assets....... 1.10%*** 1.07% 1.03% 1.00% .96% .84% .73%***
Ratio of net investment
income to average net
assets................. 2.82%*** 3.05% 3.32% 3.08% 2.85% 2.62% 2.71%***
Portfolio turnover...... 119%**** 153% 113% 155% 181% 122% 144%****
Total return............ (3.77)%**** 6.64% 0.00% 27.84% 14.84% 20.84% 5.94%****
Average commissions
rate+.................. -- -- -- -- $ 0.0550 $ 0.0510 $ 0.0484 ****
Net assets at end of
period................. $167,242 $193,362 $198,945 $264,526 $295,401 $358,503 $373,373
</TABLE>
- --------
VALUE EQUITY FUND:
<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED JANUARY 1,
FOR THE PERIOD DECEMBER 31, 1998 TO
SEPTEMBER 5, 1995** ----------------- SEPTEMBER 30,
TO DECEMBER 31, 1995 1996 1997 1998
-------------------- ------- -------- --------------
<S> <C> <C> <C> <C>
SELECTED FINANCIAL DATA
FOR EACH UNIT
OUTSTANDING FOR THE
PERIODS INDICATED:
Investment income....... $ .13 $ .40 $ .47 $ .35
Expenses................ (.04) (.14) (.17) (.13)
------- ------- -------- --------
Net investment income... .09 .26 .30 .22
Net realized and
unrealized gain (loss)
on investments......... .84 2.54 4.08 (.44)
------- ------- -------- --------
Net increase (decrease)
in unit value.......... .93 2.80 4.38 (.22)
Net asset value at
beginning of period.... 12.00 12.93 15.73 20.11
------- ------- -------- --------
Net asset value at end
of period.............. $ 12.93 $ 15.73 $ 20.11 $ 19.89
======= ======= ======== ========
Ratio of expenses to
average net assets..... 1.00%*** .99% .90% .81 %***
Ratio of net investment
income to average net
assets................. 2.12%*** 1.85% 1.61% 1.43 %***
Portfolio turnover...... 4%**** 17% 13% 21 %****
Total return............ 7.75%**** 21.66% 27.84% (1.09)%****
Average commissions
rate+.................. -- $0.0729 $ 0.0603 $ 0.0567 ****
Net assets at end of
period (in thousands).. $20,617 $48,131 $113,103 $124,650
</TABLE>
- --------
*The Balanced Fund changed advisors on June 30, 1997.
**Commencement of operations.
***Ratios annualized
****Not annualized.
+Average commissions rate paid is presented for fiscal periods beginning on or
after September 1, 1995.
10
<PAGE>
GROWTH EQUITY FUND:*
<TABLE>
<CAPTION>
FOR THE PERIOD FOR THE PERIOD
JANUARY 2, YEAR ENDED JANUARY 1,
1992** TO DECEMBER 31, 1998 TO
DECEMBER 31, ------------------------------------------------ SEPTEMBER 30,
1992 1993 1994 1995 1996 1997 1998
-------------- -------- -------- -------- -------- -------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED FINANCIAL DATA
FOR EACH UNIT
OUTSTANDING FOR THE
PERIODS INDICATED:
Investment income....... $ 3.20 $ 3.16 $ 3.48 $ 3.88 $ 5.07 $ 4.15 $ 3.22
Expenses................ (1.45) (1.52) (1.60) (1.88) (2.22) (2.60) (2.22)
-------- -------- -------- -------- -------- -------- ----------
Net investment income... 1.75 1.64 1.88 2.00 2.85 1.55 1.00
Net realized and
unrealized gain on
investments............ 3.00 12.99 .61 57.72 46.14 80.01 31.71
-------- -------- -------- -------- -------- -------- ----------
Net increase in unit
value.................. 4.75 14.63 2.49 59.72 48.99 81.56 32.71
Net asset value at
beginning of period.... 147.68 152.43 167.06 169.55 229.27 278.26 359.82
-------- -------- -------- -------- -------- -------- ----------
Net asset value at end
of
period................. $ 152.43 $ 167.06 $ 169.55 $ 229.27 $ 278.26 $ 359.82 $ 392.53
======== ======== ======== ======== ======== ======== ==========
Ratio of expenses to
average net assets..... 1.01%*** .96% .95% .92% .88% .80% .72%***
Ratio of net investment
income to average net
assets................. 1.22%*** 1.03% 1.12% .98% 1.13% .48% .32%***
Portfolio turnover...... 46%**** 82% 59% 60% 64% 88% 34%****
Total return............ 3.22%**** 9.60% 1.49% 35.23% 21.37% 29.31% 9.09%****
Average commissions
rate+.................. -- -- -- -- $ 0.0564 $ 0.0516 $ 0.0424 ****
Net assets at end of
period (in thousands).. $427,933 $471,398 $479,435 $637,834 $752,798 $967,854 $1.035,702
</TABLE>
- --------
INDEX EQUITY FUND:++
<TABLE>
<CAPTION>
FOR THE PERIOD FOR THE PERIOD
APRIL 30, YEAR ENDED JANUARY 1,
1994** TO DECEMBER 31, 1998 TO
DECEMBER 31, --------------------------- SEPTEMBER 30,
1994 1995 1996 1997 1998
-------------- ------- ------- -------- --------------
<S> <C> <C> <C> <C> <C>
SELECTED FINANCIAL DATA
FOR EACH UNIT
OUTSTANDING FOR THE
PERIODS INDICATED:
Investment income....... $ -- $ .02 $ .28 $ .08 $ .04
Expenses................ (.04) (.08) (.11) (.12) (.10)
------- ------- ------- -------- --------
Net investment income
(loss)................. (.04) (.06) .17 (.04) (.06)
Net realized and
unrealized gain invest-
ments.................. .39 3.68 2.72 5.23 .38
------- ------- ------- -------- --------
Net increase in unit
value.................. .35 3.62 2.89 5.19 .32
Net asset value at be-
ginning of period...... 10.00 10.35 13.97 16.86 22.05
------- ------- ------- -------- --------
Net asset value at end
of period.............. $ 10.35 $ 13.97 $ 16.86 $ 22.05 $ 22.37
======= ======= ======= ======== ========
Ratio of expenses to av-
erage net assets....... .94%*** .68 % .69% .62 % .57 %***
Ratio of net investment
income (loss) to aver-
age net assets......... .94%*** (.52)% 1.15% (.22)% (.33)%***
Portfolio turnover+++... 54%**** 132 % 17% 11 % 90 %****
Total return............ 3.50%**** 34.98 % 20.68% 30.78 % 1.45 %****
Net assets at end of pe-
riod (in thousands).... $11,662 $48,020 $82,881 $153,709 $196,338
</TABLE>
- --------
* The Growth Equity Fund changed advisors in June 1997.
** Commencement of operations.
*** Ratios annualized.
**** Not annualized.
+Average commissions rate paid is presented for fiscal periods beginning on or
after September 1, 1995.
++ Commencing September 5, 1995, the Index Equity Fund was invested to
replicate the Russell 3000 Index. Prior to that date, the Fund was invested
to replicate the Standard & Poor's 500 Composite Index.
+++ Reflects purchases and sales of units of the collective investment funds in
which the Fund invests rather than the turnover of the underlying
portfolios of such collective investment funds.
11
<PAGE>
AGGRESSIVE EQUITY FUND:
<TABLE>
<CAPTION>
FOR THE PERIOD FOR THE PERIOD
JANUARY 2, YEAR ENDED JANUARY 1,
1992* TO DECEMBER 31, 1998 TO
DECEMBER 31, --------------------------------------------------- SEPTEMBER 30,
1992 1993 1994 1995 1996 1997 1998
-------------- -------- -------- -------- -------- -------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED FINANCIAL DATA
FOR EACH UNIT
OUTSTANDING FOR THE
PERIODS INDICATED:
Investment income....... $ .30 $ .25 $ .28 $ .32 $ .36 $ .39 $ .25
Expenses................ (.26) (.28) (.28) (.32) (.39) (.45) (.35)
-------- -------- -------- -------- -------- -------- --------
Net investment income
(loss)................. .04 (.03) -- -- (.03) (.06) (.10)
Net realized and
unrealized gain (loss)
on investments......... 1.43 3.60 (1.00) 7.81 7.47 7.64 (6.27)
-------- -------- -------- -------- -------- -------- --------
Net increase (decrease)
in unit value.......... 1.47 3.57 (1.00) 7.81 7.44 7.58 (6.37)
Net asset value at
beginning of period.... 21.72 23.19 26.76 25.76 33.57 41.01 48.59
-------- -------- -------- -------- -------- -------- --------
Net asset value at end
of period.............. $ 23.19 $ 26.76 $ 25.76 $ 33.57 $ 41.01 $ 48.59 $ 42.22
======== ======== ======== ======== ======== ======== ========
Ratio of expenses to av-
erage net assets....... 1.25%** 1.15% 1.10% 1.10% 1.04% .98 % .93 %**
Ratio of net investment
income (loss) to
average net assets..... .17%** (.12)% .02 % .01% (.06)% (.11)% (.27)%**
Portfolio turnover...... 43%*** 42 % 48 % 63% 48 % 36 % 36 %***
Total return............ 6.77%*** 15.39 % (3.74)% 30.32% 22.16 % 18.48 % (13.11)%***
Average commissions
rate****............... -- -- -- -- $ 0.0502 $ 0.0487 $ 0.0504 ***
Net assets at end of
period (in thousands).. $116,426 $153,465 $163,678 $214,539 $275,915 $331,940 $258,579
</TABLE>
INTERNATIONAL EQUITY FUND:
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE PERIOD YEAR ENDED JANUARY 1,
SEPTEMBER 5, DECEMBER 31, 1998 TO
1995 * TO ---------------- SEPTEMBER 30,
DECEMBER 31, 1995 1996 1997 1998
----------------- ------- ------- --------------
<S> <C> <C> <C> <C>
SELECTED FINANCIAL DATA FOR
EACH UNIT OUTSTANDING
FOR THE PERIODS INDICATED:
Investment income.......... $ .49 $ .70 $ 1.12 $ .02
Expenses................... (.03) (.10) (.10) (.07)
------- ------- ------- -------
Net investment income
(loss) ................... .46 .60 1.02 (.05)
Net realized and unrealized
gain (loss) on
investments............... (.09) 1.83 (.61) (.34)
------- ------- ------- -------
Net increase (decrease) in
unit value................ .37 2.43 .41 (.39)
Net asset value at
beginning of period....... 15.00 15.37 17.80 18.21
------- ------- ------- -------
Net asset value at end of
period.................... $ 15.37 $ 17.80 $ 18.21 $ 17.82
======= ======= ======= =======
Ratio of expenses to
average net assets........ .57%** .59% .54% .49 %**
Ratio of net investment
income (loss) to average
net assets................ 9.2%** 3.58% 5.41% (.38)%**
Portfolio turnover+........ 4%*** 73% 101% 87 %***
Total return............... 2.47%*** 15.81% 2.30% (2.14)%***
Net assets at end of period
(in thousands)............ $10,849 $33,268 $58,997 $59,946
</TABLE>
- --------
* Commencement of operations.
** Ratios annualized.
*** Not annualized.
**** Average commissions rate paid is presented for fiscal periods beginning on
or after September 1, 1995.
+ Reflects purchases and sales of shares of the registered investment company
in which the Fund invests rather than turnover of the underlying portfolio
of the registered investment company.
12
<PAGE>
STRUCTURED PORTFOLIO SERVICE--CONSERVATIVE PORTFOLIO
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE PERIOD YEAR ENDED JANUARY 1,
SEPTEMBER 5, DECEMBER 31, 1998 TO
1995* TO ----------------- SEPTEMBER 30,
DECEMBER 31, 1995 1996 1997 1998
----------------- ------- ------- --------------
<S> <C> <C> <C> <C>
SELECTED FINANCIAL DATA
FOR EACH UNIT
OUTSTANDING FOR THE
PERIODS INDICATED
Investment income....... $ .001 $ -- $ -- $ --
Expenses................ (.003) (.01) (.01) (.01)
------ ------- ------- -------
Net investment loss..... (.002) (.01) (.01) (.01)
Net realized and
unrealized gain on
investments............ .472 1.00 1.52 .70
------ ------- ------- -------
Net increase in unit
value.................. .47 .99 1.51 .69
Net asset value at be-
ginning of period...... 10.00 10.47 11.46 12.97
------ ------- ------- -------
Net asset value at end
of period.............. $10.47 $ 11.46 $ 12.97 $ 13.66
====== ======= ======= =======
Ratio of expenses to av-
erage net assets....... .09 %** .10 % .09 % .08 %**
Ratio of net investment
loss to average net as-
sets................... (.06)%** (.10)% (.09)% (.08)%**
Portfolio turnover***... 3 %**** 34 % 33 % 42 %****
Total return............ 4.7 %**** 9.46 % 13.18 % 5.32 %****
Net assets at end of pe-
riod (in
thousands)............. $5,372 $11,201 $17,228 $21,504
</TABLE>
STRUCTURED PORTFOLIO SERVICE--MODERATE PORTFOLIO
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE PERIOD YEAR ENDED JANUARY 1,
SEPTEMBER 5, DECEMBER 31, 1998 TO
1995* TO ----------------- SEPTEMBER 30,
DECEMBER 31, 1995 1996 1997 1998
----------------- ------- ------- --------------
<S> <C> <C> <C> <C>
SELECTED FINANCIAL DATA
FOR EACH UNIT
OUTSTANDING FOR THE
PERIODS INDICATED
Investment income....... $ .001 $ -- $ -- $ --
Expenses................ (.003) (.01) (.01) (.01)
------- ------- ------- -------
Net investment (loss)... (.002) (.01) (.01) (.01)
Net realized and
unrealized gain on
investments............ .542 1.40 2.01 .62
------- ------- ------- -------
Net increase in unit
value.................. .54 1.39 2.00 .61
Net asset value at be-
ginning of period...... 10.00 10.54 11.93 13.93
------- ------- ------- -------
Net asset value at end
of period.............. $ 10.54 $ 11.93 $ 13.93 $ 14.54
======= ======= ======= =======
Ratio of expenses to av-
erage net assets....... .09 %** .10 % .09 % .08 %**
Ratio of net investment
loss to average net as-
sets................... (.06)%** (.10)% (.09)% (.08)%**
Portfolio turnover***... 4 %**** 27 % 18 % 23 %****
Total return............ 5.4 %**** 13.19 % 16.76 % 4.38 %****
Net assets at end of pe-
riod (in thousands).... $12,379 $32,617 $66,095 $71,623
</TABLE>
- --------
* Commencement of operations.
** Ratios annualized.
*** Reflects purchases and sales of units of the Funds in which the Portfolios
invest rather than the turnover of such underlying Funds.
**** Not annualized.
13
<PAGE>
STRUCTURED PORTFOLIO SERVICE--AGGRESSIVE PORTFOLIO
<TABLE>
<CAPTION>
FOR THE PERIOD FOR THE PERIOD
SEPTEMBER 5, YEAR ENDED JANUARY 1,
1995* TO DECEMBER 31, 1998 TO
DECEMBER 31, ----------------- SEPTEMBER 30,
1995 1996 1997 1998
-------------- ------- ------- --------------
<S> <C> <C> <C> <C>
SELECTED FINANCIAL DATA
FOR EACH UNIT
OUTSTANDING FOR THE
PERIODS INDICATED
Investment income....... $ .001 $ -- $ -- $ --
Expenses................ (.003) (.01) (.01) (.01)
------ ------- ------- -------
Net investment loss..... (.002) (.01) (.01) (.01)
Net realized and
unrealized gain on
investments............ .572 1.85 2.51 .32
------ ------- ------- -------
Net increase in unit
value.................. .57 1.84 2.50 .31
Net asset value at be-
ginning of period...... 10.00 10.57 12.41 14.91
------ ------- ------- -------
Net asset value at end
of period.............. $10.57 $ 12.41 $ 14.91 $ 15.22
====== ======= ======= =======
Ratio of expenses to av-
erage net assets....... .09 %** .10 % .09 % .07 %**
Ratio of net investment
loss to average net
assets................ (.06)%** (.10)% (.09)% (.07)%**
Portfolio turnover***... 3 %**** 28 % 18 % 17 %****
Total return............ 5.7 %**** 17.41 % 20.15 % 2.08 %****
Net assets at end of pe-
riod (in thousands).... $9,999 $25,558 $51,868 $56,486
</TABLE>
- --------
*Commencement of operations.
**Ratios annualized.
*** Reflects purchases and sales of units of the Funds in which the Portfolios
invest rather than turnover of such underlying Funds.
****Not annualized.
CONTRIBUTIONS TO THE INVESTMENT OPTIONS
Contributions may be allocated to the Funds or to any of the portfolios of
the Structured Portfolio Service on a daily basis and are credited on the day
of receipt if accompanied or preceded by proper allocation instructions. Such
contributions are used to purchase Units of the Funds and the portfolios of the
Structured Portfolio Service based on the relevant per Unit net asset value of
each Fund or the portfolios of the Structured Portfolio Service, as applicable.
Contributions may not be allocated directly to the Self-Managed Account, but
must first be allocated to one or more of the other available Investment
Options and then transferred to the Self-Managed Account.
TRANSFERS AMONG INVESTMENT OPTIONS
Transfers may be made among the Funds, the portfolios of the Structured
Portfolio Service and Self-Managed Accounts generally on a daily basis based on
the relevant per Unit net asset value of each Fund or each portfolio of the
Structured Portfolio Service, as applicable. No transfers may be made to the
Equitable Real Estate Account. There is no charge for transfers.
BENEFITS AND DISTRIBUTIONS
A Participant's eligibility for benefits depends on the terms of the
applicable plan through which they participate. For information regarding the
terms of an individually designed plan, a Participant should contact his or her
Employer.
14
<PAGE>
ADDITIONAL INFORMATION
Persons who are already Employers or who are vested with responsibility for
determining the allocation of assets under a particular plan may obtain
administrative and investment allocation and transfer forms or additional
information by calling State Street at (800) 348-2272 between 9:00 a.m. and
8:00 p.m. Eastern time or by writing to State Street Bank and Trust Company,
P.O. Box 9109, Boston, Massachusetts 02209-9109. Participants may also obtain
such forms from their Employers.
For information regarding enrollment in the Program, Eligible Employers may
call State Street at (800) 826-8901 between 9:00 a.m. and 5:00 p.m. Eastern
time or write to State Street Bank and Trust Company, P.O. Box 2236, Boston,
Massachusetts 02209-9109.
A recorded message providing current account information can be obtained by
calling State Street at (800) 348-2272.
15
<PAGE>
DESCRIPTION OF INVESTMENT OPTIONS
State Street offers eight collective investment Funds and three portfolios in
a Structured Portfolio Service under the Collective Trust. The Funds and the
portfolios of the Structured Portfolio Service are Investment Options under the
Program. Assets invested through the ABA Members Plans are held under the
American Bar Association Members Retirement Trust, and assets invested through
individually designed plans are held under the American Bar Association Members
Pooled Trust for Retirement Plans. State Street is the sole trustee of each of
these trusts.
The following are Investment Options under the Program. The Stable Asset
Return Fund invests primarily in high quality short-term instruments and
investment contracts. The Intermediate Bond Fund invests primarily in debt
securities of varying maturities, with approximately two-thirds of such
portfolio to be actively managed and one-third of such portfolio to be invested
to replicate the Lehman Brothers Government/Corporate Bond Index. The Index
Equity Fund invests primarily in common stocks included in the Russell 3000
Index. The Balanced Fund, Value Equity Fund, Growth Equity Fund, Aggressive
Equity Fund and International Equity Fund invest primarily in equity securities
or, in the case of the Balanced Fund, a combination of equity and debt
securities. Assets contributed or held under the Program may also be invested
in the portfolios of the Structured Portfolio Service, which offer three
approaches to diversifying investments in the Program by giving Investors the
opportunity to select conservative, moderate or aggressive allocations of
assets among the Program's Funds. In addition, assets contributed under the
Program may be invested in any publicly traded debt and equity securities and
shares of numerous mutual funds through a Self-Managed Account.
Interests in the respective Funds and the portfolios of the Structured
Portfolio Service are represented by Units, each of which represents an
undivided pro rata share of the net assets of underlying Funds. Although the
Funds and the portfolios of the Structured Portfolio Service are similar in
certain respects to registered open-end management investment companies
(commonly referred to as "mutual funds"), the Funds and the portfolios of the
Structured Portfolio Service are not registered as investment companies under
the Investment Company Act and, therefore, are not subject to the requirements
of such act. The Units representing interests in the Funds and the portfolios
of the Structured Portfolio Service are held by State Street, as trustee of the
American Bar Association Members Retirement Trust and the American Bar
Association Pooled Trust for Retirement Plans, for the benefit of investors of
the plans held in those trusts. Neither the Units nor the assets of the Funds
or a portfolio of the Structured Portfolio Service, as applicable, are subject
to the claims of State Street's creditors. The Units are not insured by the
Federal Deposit Insurance Corporation or any governmental agency. State
Street's activities as trustee of the Collective Trust are subject to the
requirements of ERISA. There are no voting rights connected with the ownership
of Units. See "Regulation of Collective Trust."
Units in the Funds and the portfolios of the Structured Portfolio Service are
not "redeemable securities" within the meaning of the Investment Company Act.
However, each Unit entitles an investor to exercise rights that are
substantially similar to the rights of holders of "redeemable securities"
issued by a mutual fund. Units in each Fund and in each portfolio of the
Structured Portfolio Service may be withdrawn on each Business Day (subject to
applicable restrictions under the terms of the Program) for cash equal to the
per Unit net asset value of the Fund or the portfolio in the Structured
Portfolio Service, respectively. In addition, transfers may be made among the
Funds and the portfolios in the Structured Portfolio Service based on the
relevant per Unit net asset values.
For purposes of the descriptions of the Funds herein, investments by a Fund
in collective investment funds maintained by State Street are deemed to be
investments in the underlying securities held by such collective investment
funds.
16
<PAGE>
STABLE ASSET RETURN FUND
INVESTMENT OBJECTIVE. The investment objective of the Stable Asset Return
Fund is to provide current income consistent with the preservation of
principal and liquidity. The Stable Asset Return Fund invests in investment
contracts and high quality short-term instruments through collective
investment funds maintained by State Street. THERE CAN BE NO ASSURANCE THAT
THE STABLE ASSET RETURN FUND WILL ACHIEVE ITS INVESTMENT OBJECTIVE.
STRATEGY. The Stable Asset Return Fund invests in obligations of the United
States government and its agencies and instrumentalities (referred to as "U.S.
Government Obligations") and notes, bonds and similar debt instruments of
corporations, commercial paper, certificates of deposit and time deposits,
bankers' acceptances, supranational and sovereign debt obligations (including
obligations of foreign government sub-divisions), asset-backed securities,
master notes, promissory notes, funding agreements, variable and indexed
interest notes and repurchase agreements (collectively, "Short-Term Investment
Products"). The Stable Asset Return Fund may invest in U.S. Government
Obligations and Short-Term Investment Products so long as the average weighted
duration of all such investments does not exceed 120 days. The average
weighted maturity of the U.S. Government Obligations, the Short-Term
Investment Products and the Investment Contracts shall not exceed 18 months.
The Fund also invests in investment contracts, including "Synthetic GICs"
issued by insurance companies, banks or other financial institutions.
"Synthetic GICs" are arrangements comprised of an investment in one or more
underlying securities and a contract issued by an insurance company, bank or
other financial institution that provides for the return of principal and an
agreed upon rate of interest for purposes of permitting the Fund to be benefit
responsive (that is, responsive to withdrawal, transfer and benefit payment
requests). The underlying securities of Synthetic GICs generally consist of
fixed income debt instruments. As of September 30, 1998, approximately 46% of
the Fund's assets were invested in Short-Term Investment Products and 54% of
the Fund's assets were invested in investment contracts. As of September 30,
1998, the average weighted maturity of the Stable Asset Return Fund was 1.12
years. The Fund's portfolio will be structured to provide cash flow to assist
liquidity management and to limit the volatility of movement in interest rates
received by the Fund while maintaining a rate of return that is sensitive to
current interest rates.
INVESTMENT GUIDELINES AND RESTRICTIONS AND CERTAIN RISK FACTORS. The Fund
may invest in a variety of U.S. Government Obligations, including bills and
notes issued by the U.S. Treasury and securities issued by agencies of the
U.S. Government, such as the Farmers Home Administration, the Export Import
Bank of the United States, the Small Business Administration, the Government
National Mortgage Association, the General Services Administration and the
Maritime Administration. Not all U.S. Government Obligations are backed by the
full faith and credit of the United States. For example, securities issued by
the Federal Farm Credit Bank or by the Federal National Mortgage Association
are supported by the agency's right to borrow money from the U.S. Treasury
under certain circumstances, and securities issued by the Federal Home Loan
Bank are supported only by the credit of the issuing agency. There is no
guarantee that the U.S. Government will support these types of securities,
and, therefore, they involve more risk than U.S. Government Obligations that
are supported by the full faith and credit of the United States.
The Stable Asset Return Fund may enter into repurchase agreements with a
variety of banks and broker-dealers. In a repurchase agreement transaction,
the Fund acquires securities (usually U.S. Government Obligations) for cash
and obtains a simultaneous commitment from the seller to repurchase the
securities at an agreed-upon price and date. The resale price is in excess of
the acquisition price and reflects an agreed-upon market rate of interest
unrelated to the coupon rate on the purchased security. The difference between
the sale and the repurchase price is, in effect, interest for the period of
the agreement. In such transactions, the securities purchased by the Stable
Asset Return Fund will have a total value at least equal to the amount of the
repurchase price and will be held by State Street until
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repurchased. State Street will continually monitor the value of the underlying
securities to verify that their value, including accrued interest, always
equals or exceeds the repurchase price.
The Stable Asset Return Fund may invest in U.S. dollar-denominated
instruments issued by foreign banks and foreign branches of U.S. banks, which
may involve special risks. Foreign banks may not be required to maintain the
same financial reserves or capital that are required of U.S. banks.
Restrictions on loans to single borrowers, prohibitions on certain self-
dealing transactions and other regulations designed to protect the safety and
solvency of U.S. banks may not be applicable to foreign banks. Furthermore,
investments in foreign banks may involve additional risks similar to those
associated with investments in foreign securities described in "International
Equity Fund--Certain Risk Factors." Foreign branches of U.S. banks are
generally subject to the U.S. banking laws, but obligations issued by such
branches, which are sometimes payable only by the branch, may be subject to
country risks relating to actions by foreign governments that may restrict or
even shut down the operations of some or all banks. The Stable Asset Return
Fund may also invest in U.S. dollar-denominated instruments issued by foreign
governments, their political subdivisions, governmental authorities, agencies
and instrumentalities and supranational organizations. A supranational
organization is an entity designated or supported by the national government
of one or more countries to promote economic reconstruction or development.
Examples of supranational organizations include, among others, the European
Investment Bank, the International Bank for Reconstruction and Development
(World Bank) and the Nordic Investment Bank. For risks associated with
investments in foreign securities, see "International Equity Fund--Certain
Risk Factors."
The Stable Asset Return Fund may commit to purchasing securities on a "when-
issued" basis, such that payment for and delivery of a security will occur
after the date that the Fund commits to purchase the security. The payment
obligation and the interest rate that will be received on the security are
each fixed at the time of the purchase commitment. Prior to payment and
delivery, however, the Stable Asset Return Fund will not receive interest on
the security, and will be subject to the risk of a loss if the value of the
when-issued security is less than the purchase price at the time of delivery.
The Stable Asset Return Fund, as well as any other State Street collective
fund through which the Fund invests, is permitted to invest in asset-backed
securities (other than CMOs or other mortgage-backed securities), subject to
the rating and quality requirements specified with respect to such Fund.
Asset-backed securities are issued by trusts and special purpose entities that
securitize various types of assets, such as automobile and credit card
receivables. Asset-backed securities may involve certain credit risks
resulting primarily from the fact that asset-backed securities are issued by
such trusts or special purpose entities with no other assets and do not
usually have the benefit of a complete security interest in such assets. For
example, credit card receivables generally are unsecured and the debtors are
entitled to the protection of a number of state and Federal consumer credit
laws, some of which may reduce the ability to obtain full payment. For
information regarding risk factors with respect to the use of derivative
instruments, see "Derivative Instruments."
Except with respect to U.S. Government Obligations, the Stable Asset Return
Fund may invest in a Short-Term Investment Product only if at the time of
purchase, the instrument is (i) rated in one of the two highest rating
categories applicable to corporate bonds by at least two nationally recognized
statistical rating organizations, at least one of which must be Standard &
Poor's Corporation ("S&P") or Moody's Investors Service, Inc. ("Moody's"),
(ii) rated in the highest rating category applicable to commercial paper by at
least two nationally recognized statistical rating organizations, at least one
of which must be S&P or Moody's, or (iii) if unrated, issued or guaranteed by
an issuer that has other comparable outstanding instruments that are so rated
or is itself rated in one of the two highest rating categories by at least two
nationally recognized statistical rating organizations, at least one of which
must be S&P or Moody's. For purposes of this restriction, an investment in a
repurchase agreement will be considered to be an investment in the securities
that are the subject of the repurchase agreement. Except with respect to
certain U.S. Government Obligations, each instrument purchased will be subject
to the risks of default by the issuer and the non-payment of interest or
principal that are usually associated with unsecured borrowings.
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The Stable Asset Return Fund may not invest in any investment contract
unless, at the time of purchase, the investment contract or the issuer thereof
is rated in one of the two highest rating categories by at least two
nationally recognized statistical rating organizations, at least one of which
must be S&P or Moody's. Although these rating standards must be satisfied at
the time an investment contract is issued, the financial condition of an
issuer may change prior to maturity. The Stable Asset Return Fund will
generally be unable to dispose of an investment contract prior to its maturity
in the event of the deterioration of the financial condition of the issuer.
Except for investment contracts, the Fund generally does not invest more
than 5% of its assets in securities of a single issuer, determined at the time
of purchase, other than U.S. Government Obligations. For purposes of this 5%
limitation, investments in collective investment funds maintained by State
Street are considered to be investments in the underlying securities held by
such collective investment funds, and investments in repurchase agreements are
considered to be investments in the securities that are the subject of such
repurchase agreements. Other than investment contracts, the Fund may not
invest more than 10% of its net assets in illiquid securities, including
repurchase agreements with maturities of greater than seven days or portfolio
securities that are not readily marketable or redeemable, determined at the
time of purchase. The proportion of the assets of the Fund invested in
investment contracts of any one insurance company, bank or financial
institution may generally not be greater than 15% of the aggregate value of
investment contracts included in the Fund's portfolio, and in no event greater
than 20%, in each case determined at the time of purchase. To the extent that
the assets of the Stable Asset Return Fund are committed to investment
contracts of a single issuer, the Fund will be subject to a greater risk that
a default by such issuer will have a material adverse effect on the Fund. The
Stable Asset Return Fund will not acquire warrants or make any other
investment that is inconsistent with the restrictions applicable to the other
Funds described under "Certain Information with Respect to the Funds--
Investment Prohibitions." Except as explicitly set forth above and in
"Derivative Instruments," there are no other investment restrictions
applicable to the Stable Asset Return Fund.
VALUATION OF UNITS. When an Investor allocates assets to the Stable Asset
Return Fund, the account of the investor is credited with that number of Units
with an aggregate price equal to the value of such assets allocated to the
Fund. Each Business Day the net income accrued by the Stable Asset Return Fund
is calculated and additional Units of the Fund with an aggregate value equal
to the accrued net income of the Fund are issued in proportion to the
investors' interests.
THE STABLE ASSET RETURN FUND SEEKS TO MAINTAIN A NET ASSET VALUE OF $1.00
PER UNIT, ALTHOUGH THERE CAN BE NO ASSURANCE THAT IT WILL BE ABLE TO DO
SO. Consistent with this objective, the Short-Term Investment Products of the
Stable Asset Return Fund are valued on the basis of a valuation method known
as "Amortized Cost Pricing." Amortized Cost Pricing involves valuing an
instrument initially at its cost and thereafter assuming a constant
amortization to maturity of any discount or premium, regardless of the impact
of fluctuating interest rates on the market value of the instrument. While
this method provides certainty in valuation, it may result in the
overvaluation or undervaluation of a particular instrument relative to the
market value of the instrument. The longer the maturity of an instrument, the
greater the exposure to such risk of overvaluation or undervaluation.
Investment contracts are valued at contract value (cost plus accrued
interest).
If an investor were to receive a distribution from, or transfer out of, the
Stable Asset Return Fund at a time when the Stable Asset Return Fund was
overvalued, the investor would be overpaid (based on market price) and the
value of the investments of remaining investors would be diluted. Conversely,
if an investor were to receive a distribution from, or transfer out of, the
Stable Asset Return Fund at a time when the Stable Asset Return Fund was
undervalued, the investor would be underpaid (based on market price) and the
value of the investments of remaining investors would be increased. If State
Street determines that the per Unit net asset value of the Stable Asset Return
Fund,
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to the extent such value is determined based on Amortized Cost Pricing method,
deviates from the net asset value determined by using available market
quotations or market equivalents (market value) to a large enough extent that
it may result in a material dilution or other unfair result to investors, State
Street may adjust the per Unit net asset value of the Fund or take other action
that it deems appropriate to eliminate or reduce to the extent reasonably
practicable such dilution or other unfair result. For this purpose, only the
Short-Term Investment Products are tested on a mark-to-market basis. Such
valuations for the investment contracts held in the Fund are not required by
generally accepted accounting principles because of the benefit responsive
structure of the investment contracts held in the Fund.
PERFORMANCE INFORMATION. The Stable Asset Return Fund may, from time to time,
report its performance in terms of its "yield" and "effective yield." The
Fund's yield is determined based upon historical earnings and is not intended
to indicate future performance. The "yield" of the Fund refers to the
annualized income generated by a daily investment in the Fund. The "effective
yield" is calculated similarly but, when annualized, the income earned by an
investment in the Fund is assumed to be reinvested. The "effective yield" will
be slightly higher than the "yield" because of the compounding effect of this
assumed reinvestment. A recorded message providing performance information for
the Stable Asset Return Fund is available at (800) 826-8905.
INVESTMENT ADVISOR. State Street is sole manager of the Stable Asset Return
Fund. State Street may in the future employ investment advisors, at its
discretion, to manage portions of the Fund, subject to consultation with ABRA.
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INTERMEDIATE BOND FUND
INVESTMENT OBJECTIVE. The investment objective of the Intermediate Bond Fund
is to achieve a total return from current income and capital appreciation by
investing primarily in a diversified portfolio of fixed-income securities. A
portion of the Intermediate Bond Fund (approximately two-thirds) will be
actively managed, investing in fixed-income securities with a portfolio
duration generally from 3 to 6 years. The other portion of the Intermediate
Bond Fund--the index portion--will be invested to replicate the Lehman Brothers
Government/Corporate Bond Index, which is composed of approximately 5,000
issues of fixed-income securities, including U.S. Government Obligations and
investment grade corporate bonds, each with an outstanding market value of at
least $25 million and remaining maturity of greater than one year. As of
September 30, 1998, U.S. Government Obligations and corporate debt securities
represented 70% and 30%, respectively, of the Lehman Brothers
Government/Corporate Bond Index. The actively managed portion seeks to achieve,
over an extended period of time, total returns comparable or superior to broad
measures of the domestic bond market. LEHMAN BROTHERS, INC. DOES NOT SPONSOR
THE INTERMEDIATE BOND FUND, NOR IS IT AFFILIATED IN ANY WAY WITH THE
INTERMEDIATE BOND FUND OR STATE STREET. THERE CAN BE NO ASSURANCE THAT THE
INTERMEDIATE BOND FUND WILL ACHIEVE ITS INVESTMENT OBJECTIVE.
STRATEGY. The actively managed portion of the Intermediate Bond Fund is
expected to invest its assets in fixed-income securities of varying maturities
with a portfolio duration generally from 3 to 6 years. The level of investments
in fixed income securities of this portion of the Intermediate Bond Fund will
vary, depending upon many factors, including economic conditions, interest
rates and other relevant considerations. In selecting securities, economic
forecasting, interest rate anticipation, credit and call risk analysis, foreign
currency exchange rate forecasting and other security selection techniques will
be taken into account.
Duration is a measure of the expected life of a fixed income security that
was developed as a more precise alternative to the concept of "term to
maturity." Duration incorporates a bond's yield, coupon interest payments,
final maturity and call features into one measure. Traditionally, a debt
security's "term to maturity" has been used as a proxy for the sensitivity of
the security's price to changes in interest rates (which is the "interest rate
risk" or "volatility" of the security). However, "term to maturity" measures
only the time until a debt security provides its final payment, taking no
account of the pattern of the security's payment prior to maturity. Duration is
a measure of the expected life of a fixed income security on a present value
basis. Duration takes the length of the time intervals between the present time
and the time that the interest and principal payments are scheduled or, in the
case of a callable bond, expected to be received, and weighs them by the
present values of the cash to be received at each future point in time. For any
fixed income security with interest payments occurring prior to the payment of
principal, duration is always less than maturity. In general, all other things
being equal, the lower the stated or coupon rate of interest of a fixed income
security, the longer the duration of the security; conversely, the higher the
stated or coupon rate of interest of a fixed income security, the shorter the
duration of the security.
The portion of the Fund's assets committed to investment in debt securities
with particular characteristics (such as maturity, type and coupon rate) will
vary based on the outlook for the U.S. and foreign economies, the financial
markets and other factors. The portfolio holdings will be concentrated in areas
of the bond market (based on quality, sector, coupon or maturity) that are
believed to be relatively undervalued.
The index portion of the Intermediate Bond Fund will attempt to hold a
representative sample of the securities in the Lehman Brothers
Government/Corporate Bond Index so that, in the aggregate, the investment
characteristics of this portion of the Intermediate Bond Fund's portfolio will
resemble those of the Lehman Brothers Government/Corporate Bond Index. However,
the index portion of
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the Intermediate Bond Fund is not expected to track the Lehman Brothers
Government/Corporate Bond Index with the same degree of accuracy that complete
replication of such index would provide. Over time, the portfolio composition
of the index portion of the Intermediate Bond Fund will be altered (or
"rebalanced") to reflect changes in the characteristics of the Lehman Brothers
Government/Corporate Bond Index.
INVESTMENT GUIDELINES AND RESTRICTIONS. The actively managed portion of the
Intermediate Bond Fund will invest primarily in the following types of
securities, which may be issued by domestic or foreign entities and
denominated in U.S. dollars or foreign currencies (subject to a 20% limit on
foreign securities, as described below): U.S. Government Obligations;
corporate debt securities; corporate commercial paper; mortgage-backed
securities; asset-backed securities; variable and floating rate debt
securities; bank certificates of deposit, fixed time deposits and bankers'
acceptances; repurchase agreements; obligations of foreign governments or
their subdivisions, agencies and instrumentalities, international agencies or
supranational entities; and foreign currency denominated securities. The
Intermediate Bond Fund may hold different percentages of the assets in these
various types of securities.
For the purpose of achieving income, the actively managed portion of the
Intermediate Bond Fund may enter into repurchase agreements, but may not
invest more than 15% of its total assets in repurchase agreements maturing in
more than seven days. See "Stable Asset Return Fund--Investment Guidelines and
Restrictions and Certain Risk Factors."
The index portion of the Intermediate Bond Fund will invest its assets so as
to replicate the Lehman Brothers Government/Corporate Bond Index. Under normal
market conditions, at least 90% of the value of the total assets of the index
portion will be invested in securities comprising the Lehman Brothers
Government/Corporate Bond Index. For temporary defensive purposes, the index
portion of the Intermediate Bond Fund may invest without limitation in U.S.
Government Obligations, commercial paper, and other short-term instruments of
the type purchased by the Stable Asset Return Fund, as described in "Stable
Asset Return Fund." The index portion of the Intermediate Bond Fund would
invoke this right only in extraordinary circumstances, such as war, the
closing of equity markets, an extreme financial calamity, or the threat of any
such event.
For information with respect to the use of derivative instruments, see
"Derivative Instruments." In addition, the Intermediate Bond Fund is subject
to the same investment restrictions that are applicable to the other Funds.
See "Certain Information with Respect to the Funds--Investment Prohibitions."
CERTAIN RISK FACTORS WITH RESPECT TO THE INTERMEDIATE BOND FUND. For
information regarding certain risk factors with respect to investing in
certain short-term instruments, see "Stable Asset Return Fund--Investment
Guidelines and Restrictions and Certain Risk Factors," and, for information
regarding risk factors with respect to the use of derivative instruments and
mortgage-backed securities, see "Derivative Instruments."
The Intermediate Bond Fund may purchase or sell securities on a when-issued
or delayed delivery basis. For information regarding certain risks involved in
these activities, see "Stable Asset Return Fund--Investment Guidelines and
Restrictions and Certain Risk Factors."
The actively managed portion of the Intermediate Bond Fund will limit its
foreign investments to securities of issuers based in developed countries
(including newly industrialized countries, such as Taiwan, South Korea and
Mexico). Investing in the securities of issuers in any foreign country
involves special risks and considerations not typically associated with
investing in U.S. companies. See "International Equity Fund--Certain Risk
Factors."
PORTFOLIO TURNOVER. As the level of portfolio turnover increases,
transaction expenses incurred by the Fund increase, which may adversely affect
the Fund's performance. Because the types and
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proportions of the Intermediate Bond Fund's assets may change frequently in
accordance with market conditions, an annual portfolio turnover rate cannot be
predicted.
Index funds, such as the index portion of the Intermediate Bond Fund, seek
to create a portfolio which substantially replicates the total sum of the
securities comprising the applicable index. Index funds are not managed
through traditional methods of fund management, which typically involve
frequent changes in a portfolio of securities on the basis of economic,
financial and market analyses. Therefore, brokerage costs, transfer taxes and
certain other transaction costs for index funds may be lower than those
incurred by non-index, traditionally managed funds.
Portfolio turnover was 14% for the nine months ended September 30, 1998, 14%
for the twelve months ended December 31, 1997, 22% for the twelve months ended
December 31, 1996 and 2% for the period from September 5, 1995 to December 31,
1995. Such turnover reflects purchases and sales of shares of the registered
investment companies in which the Fund invests rather than the turnover of the
underlying portfolios of such registered investment companies. See "--
Investment Advisors and Initial Investments in Registered Investment
Companies."
PERFORMANCE INFORMATION. The Fund's total return is based on the overall
dollar or percentage change in value of a hypothetical investment in the Fund
and assumes that all Fund's dividends and capital gain distributions are
reinvested. The "total return" sought by the Intermediate Bond Fund will
consist of interest and dividends from underlying securities, capital
appreciation reflected in unrealized increases in value of portfolio
securities or realized from the purchase and sale of securities and futures
and options. A recorded message providing current unit values and yield for
the Intermediate Bond Fund is available at (800) 348-2272. While the
Intermediate Bond Fund is invested in registered investment companies (as
described below) the yield for the Intermediate Bond Fund will be calculated
by taking the weighted average annualized yield of such registered investment
companies and adjusting for the Fund's expenses. It is expected that when the
Fund is no longer invested in registered investment companies, the Fund's
"yield" will be calculated by dividing its net investment income per Unit
earned during the specified period by its net asset value per Unit on the last
day of such period and annualizing the result.
INVESTMENT ADVISORS AND INITIAL INVESTMENTS IN REGISTERED INVESTMENT
COMPANIES. State Street expects to select Pacific Investment Management
Company ("PIMCO") to serve as Investment Advisor to provide investment advice
and arrange for the execution of purchases and sales of securities for the
actively managed portion of the Intermediate Bond Fund, subject to the
supervision and approval of State Street.
State Street, however, based upon the advice of PIMCO, has determined that
in order to provide for efficient investment of the Bond Fund's assets, until
a minimum level of assets (in this case approximately $75 million to $100
million) has been allocated to the actively managed portion of the
Intermediate Bond Fund, PIMCO's advice will be obtained by investing
approximately two-thirds of the assets allocated to the Intermediate Bond Fund
in the PIMCO Total Return Fund, an open-end management investment company
registered under the Investment Company Act and managed by PIMCO. As of
September 30, 1998, $78 million in assets were allocated to the actively
managed portion of the Bond Fund and such assets are currently invested in the
PIMCO Total Return Fund. The PIMCO Total Return Fund invests at least 65% of
its assets in a diversified portfolio of fixed-income securities of varying
maturities with a portfolio duration generally from 3 to 6 years. The PIMCO
Total Return Fund has substantially similar investment objectives to the
actively managed portion of the Intermediate Bond Fund and also invests in
convertible securities; inflation-indexed bonds issued by both governments and
corporations; structured notes, including hybrid or "indexed" securities,
catastrophe bonds, and loan participations; delayed funding loans and
revolving credit facilities; reverse repurchase agreements; and debt
securities issued by states or local governments and their agencies,
authorities and other instrumentalities. After the minimum level of assets
referred to above is attained by the actively managed portion of the
Intermediate Bond Fund, State Street expects that such portion will be managed
as a separate collective trust portfolio by State Street, with the advice of
PIMCO.
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With respect to the index portion of the Intermediate Bond Fund, State Street
expects to select Barclay's Global Investors to serve as Investment Advisor to
provide investment advice and arrange for the execution of purchases and sales
of securities for the index portion of the Intermediate Bond Fund, subject to
the supervision and approval of State Street.
State Street, however, upon the advice of Barclay's Global Investors, has
determined that in order for the index portion of the Intermediate Bond Fund to
meet its investment objective and to provide for efficient investment of the
index portion of the Intermediate Bond Fund's assets, until the assets in the
index portion of the Fund reach approximately $200 million, the advice of
Barclay's Global Investors will be obtained by investing approximately one-
third of the assets allocated to the Intermediate Bond Fund in the Masterworks
Bond Index Fund, an open-end management investment company registered under the
Investment Company Act. The Masterworks Bond Index Fund primarily invests in
the securities represented in the Lehman Brothers Government/Corporate Bond
Index. As of September 30, 1998, $38 million in assets were allocated to the
index portion of the Intermediate Bond Fund and such assets are currently
invested in the Masterworks Bond Index Fund. The Masterworks Bond Index Fund is
managed by Barclay's Global Investors. The Masterworks Bond Index Fund attempts
to achieve, in both rising and falling markets, a correlation of at least 95%
between the total return of its net assets before expenses and the total return
of the LB Bond Index. After the value of the assets in the index portion of the
Intermediate Bond Fund exceeds $200 million, State Street expects that such
portion will be managed as a separate collective trust portfolio by State
Street with the advice of Barclay's Global Investors.
State Street will monitor the performance of the PIMCO Total Return Fund and
the Masterworks Bond Index Fund, in light of the Intermediate Bond Fund's
investment objectives, to determine whether the continued investment by the
Intermediate Bond Fund in such registered investment companies is appropriate.
If State Street concludes that the investment objectives or performance of the
PIMCO Total Return Fund and the Masterworks Bond Index Fund are no longer
consistent with those of the actively managed portion and index portion of the
Intermediate Bond Fund, respectively, State Street may transfer a portion or
all of the assets of the Intermediate Bond Fund that are invested in such
registered investment companies to other registered investment companies or
collective investment funds managed by State Street, which, in light of the
investment objectives of the Bond Fund, State Street deems to be more
appropriate. When the assets in the actively managed and indexed portions of
the Intermediate Bond Fund reach the levels at which they will become managed
as separate trust portfolios, State Street and the Investment Advisors will
determine appropriate redemption procedures from the PIMCO Total Return Fund
and the Masterworks Bond Index Fund.
State Street has determined the percentage of the assets in the Intermediate
Bond Fund to be allocated to each portion of the Intermediate Bond Fund. Unless
altered by State Street, contributions to and withdrawals from the Intermediate
Bond Fund will be allocated two-thirds to the actively managed portion of the
Fund, for which State Street receives investment advice from PIMCO, and one-
third to the index portion of the Fund, for which State Street receives
investment advice from Barclay's Global Investors. Income and gains
attributable to the assets allocated to each portion will remain allocated to
such portion, thereby changing the percentage of total assets of the
Intermediate Bond Fund allocated to each portion. An Investment Advisor whose
portion experiences superior performance may thus provide investment advice
with respect to a larger percentage of the assets of the Intermediate Bond Fund
than originally allocated to such portion. For additional information with
respect to the Investment Advisors, see "Investment Advisors."
BALANCED FUND
INVESTMENT OBJECTIVE. The investment objective of the Balanced Fund is to
achieve both current income and long-term capital appreciation. The Balanced
Fund seeks to achieve, over an extended period of time, total returns
comparable to or superior to an appropriate combination of broad measures of
the domestic stock and bond markets. THERE CAN BE NO ASSURANCE THAT THE
BALANCED FUND WILL ACHIEVE ITS INVESTMENT OBJECTIVE.
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STRATEGY. The Balanced Fund invests in publicly traded common stocks, other
equity-type securities, long-term debt securities with varying maturities and
money market instruments. The Balanced Fund normally maintains at least 40%,
but not more than 70%, of its total assets in common stocks and other equity-
type instruments, including convertible securities, and at least 30%, but not
more than 60%, of its total assets in nonconvertible debt securities and money
market instruments. The Balanced Fund invests only in long-term debt securities
of varying maturities that are rated investment grade by a nationally
recognized statistical rating organization or, if unrated, determined by State
Street to be of comparable quality. The Balanced Fund varies the portion of its
assets invested in equity securities, debt securities and money market
instruments to achieve the Fund's investment objective based upon economic
conditions, the general level of common stock prices, interest rates and other
relevant considerations, including the risks associated with each investment
medium.
INVESTMENT GUIDELINES AND RESTRICTIONS. The Balanced Fund invests in equity
securities of the same types as those in which the Growth Equity Fund invests.
See "Growth Equity Fund." The Balanced Fund also invests in Short-Term
Investment Products of the same types as those in which the Stable Asset Return
Fund invests. See "Stable Asset Return Fund--Strategy." In addition, the
Balanced Fund may continue to hold current investments in the collateralized
mortgage obligations (known as "CMOs") that are included in its portfolio.
However, no such additional investments may be made. As to certain risks
associated with CMOs, see "Derivative Instruments."
To the extent that the assets of the Balanced Fund are invested in securities
of a single issuer, there is a greater risk that a deterioration in performance
or default by such issuer will have a material adverse effect on the Fund.
For temporary defensive purposes, the Balanced Fund may invest without
limitation in U.S. Government Obligations, commercial paper and other short-
term instruments of the types purchased by the Stable Asset Return Fund, as
described in "Stable Asset Return Fund." The Fund would invoke this right only
in extraordinary circumstances, such as war, the closing of bond or equity
markets, an extreme financial calamity or the threat of any such event.
Additional investment restrictions applicable to the Balanced Fund are
described in "Certain Information with Respect to the Funds--Investment
Prohibitions."
Effective June 30, 1997, State Street began to direct the allocation of the
Fund's assets between debt and equity securities consistent with the Fund's
strategy and began to obtain investment advice from separate advisors for each
of the debt and equity portions of the Fund. Before then, State Street
allocated a portion of the Fund's assets to each of its Investment Advisors,
who then advised State Street with respect to both debt and equity securities
and with respect to the allocation of the Fund's assets between debt and equity
securities. Effective June 30, 1997, State Street directed that approximately
40% of the Balanced Fund's assets be allocated to debt securities (with respect
to which State Street will receive advice from one Investment Advisor) and
approximately 60% be allocated to equity securities (with respect to which
State Street will receive advice from another Investment Advisor).
Contributions to and withdrawls from the Fund are 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 each 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
gains attributable to the assets allocated to each Investment Advisor will
remain allocated to such Investment Advisor unless reallocated by State Street.
CERTAIN RISK FACTORS. For information and risk factors associated with
investing in equity and debt securities, see "Index Equity Fund--Certain Risk
Factors," and in certain short-term instruments, see "Stable Asset Return
Fund--Investment Guidelines and Restrictions and Certain Risk Factors." For
information with respect to the use of derivative instruments and mortgage-
backed securities, see "Derivative Instruments." In addition, investments in
foreign securities involve special risks. For certain risk factors associated
with investing in foreign securities, see "International Equity Fund--Certain
Risk Factors."
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PORTFOLIO TURNOVER. As the level of portfolio turnover increases, transaction
expenses incurred by the Fund, such as brokerage commissions, increase, which
may adversely affect the Fund's performance. Because the types and proportions
of the Balanced Fund's assets may change frequently in accordance with market
conditions, an annual portfolio turnover rate cannot be predicted. The turnover
was 144% for the nine months ended September 30, 1998, 122%, for the twelve
months ended December 31, 1997, 181% for the twelve months ended December 31,
1996 and 155% for the twelve months ended December 31, 1995.
INVESTMENT ADVISORS. State Street has retained Capital Guardian Trust Company
and Miller, Anderson & 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 Trust Company will serve as
Investment Advisor with respect to investments in equity securities and Miller,
Anderson & Sherrerd will serve as Investment Advisor with respect to
investments in debt securities. For additional information regarding the
Investment Advisors, see "Investment Advisors."
VALUE EQUITY FUND
INVESTMENT OBJECTIVE. The Value Equity Fund's investment objective is to
invest in common stocks of larger companies believed to be attractively priced
relative to their future earnings power with the goal of achieving long-term
growth of capital and dividend income. The Value Equity Fund seeks to
outperform, over extended periods of time, broad measures of the domestic stock
market. The Value Equity Fund is broadly diversified and emphasizes sectors and
securities State Street and its Investment Advisor consider undervalued. THERE
CAN BE NO ASSURANCE THAT THE VALUE EQUITY FUND WILL ACHIEVE ITS INVESTMENT
OBJECTIVE.
STRATEGY. The Fund invests primarily in common stocks of companies that in
the opinion of State Street and its Investment Advisor are undervalued in the
market place. The Value Equity Fund seeks to achieve growth of capital through
investing primarily in common stocks of larger companies believed to be
attractively priced relative to their future earnings power. The Fund's
Investment Advisor seeks to limit the Fund's divergence from the market's
performance over full market cycles to moderate levels.
INVESTMENT GUIDELINES AND RESTRICTIONS. Although the assets of the Value
Equity Fund are generally invested in common stocks and other equity-type
securities, including convertible securities, the Value Equity Fund may invest
in non-equity securities, including investment grade bonds and debentures and
high quality short-term instruments of the same types as those in which the
Stable Asset Return Fund may invest, when State Street and the Investment
Advisor determine that such investments may contribute to the attainment of the
Fund's investment objective. The Value Equity Fund will not invest more than
35% of its assets in non-equity securities, except for temporary defensive
purposes. The Fund may invest in non-equity securities when, in light of
economic conditions and the general level of stock prices, dividend rates,
prices of fixed income securities and the level of interest rates, it appears
that the Value Equity Fund's investment objective will not be met by buying
equity securities. To the extent that the Value Equity Fund's assets are
invested in non-equity securities, the Fund's net asset value may be adversely
affected by a rise in interest rates.
The Value Equity Fund may invest in securities of U.S. companies or foreign
companies whose stocks are traded on the U.S. stock exchanges or on the over-
the-counter markets. For many foreign securities, there are dollar-denominated
American Depositary Receipts (known as "ADRs"), which are issued by domestic
banks and are traded on the U.S. stock exchanges or on over-the-counter markets
and represent interest in securities issued by foreign corporations. The Value
Equity Fund may invest in foreign securities directly and through ADRs. The
Fund may not make an investment if that investment would cause more than 15% of
the Fund's assets to be invested in foreign securities, including ADRs,
determined at the time of purchase.
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For temporary defensive purposes, the Value Equity Fund may invest without
limitation in U.S. Government Obligations, short-term commercial paper and
other high quality short-term instruments of the types purchased by the Stable
Asset Return Fund. See "Stable Asset Return Fund." The Fund would invoke this
right only in extraordinary circumstances, such as war, the closing of equity
markets, an extreme financial calamity, or the threat of any such event.
Additional investment restrictions applicable to the Value Equity Fund are
described in "Certain Information with Respect to the Funds--Investment
Prohibitions."
CERTAIN RISK FACTORS. For risk factors associated with investment in equity
securities, see "Index Equity Fund--Certain Risk Factors." For information
with respect to the use of derivative instruments, see "Derivative
Instruments." In addition, investments in foreign securities involve special
risks. For certain risk factors associated with investing in foreign
securities, see "International Equity Fund--Certain Risk Factors."
PORTFOLIO TURNOVER. As the level of portfolio turnover increases,
transaction expenses incurred by the Fund, such as brokerage commissions,
increase, which may adversely affect the Fund's performance. The Value Equity
Fund generally holds its investments for an extended period, and the average
annual rate of portfolio turnover is expected to be under 50%. However, it is
difficult to predict the rate of portfolio turnover in view of the potential
for unexpected market conditions. Therefore, in any single year, the portfolio
turnover rate may be either substantially less or substantially more than 50%.
Such turnover was 21% for the nine months ended September 30, 1998, 13% for
the twelve months ended December 31, 1997, 17% for the twelve months ended
December 31, 1996 and 4% for the period September 5, 1995 to December 31,
1995. The 1995 turnover rate reflects the buildup of the Fund's portfolio
during its first three months of operations.
INVESTMENT ADVISOR. State Street has retained Sanford C. Bernstein & Co.,
Inc. to serve as Investment Advisor to provide investment advice and arrange
for the execution of purchases and sales of securities for the Value Equity
Fund. For additional information regarding the Investment Advisor, see
"Investment Advisors."
GROWTH EQUITY FUND
INVESTMENT OBJECTIVE. The Growth Equity Fund has a primary investment
objective of achieving long-term growth of capital and a secondary investment
objective of realizing income. 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. A portion of the
Growth Equity Fund (approximately 25%) is invested to replicate the Russell
1000 Growth Index, which is composed of those Russell 1000 securities with a
greater than average growth orientation. The remainder of the Growth Equity
Fund is actively managed. The Growth Equity Fund seeks to achieve, over an
extended period of time, total returns comparable to or superior to those
attained by broad measures of the domestic stock market. RUSSELL DOES NOT
SPONSOR THE GROWTH EQUITY FUND, NOR IS IT AFFILIATED IN ANY WAY WITH THE
GROWTH EQUITY FUND OR STATE STREET. THERE CAN BE NO ASSURANCE THAT THE GROWTH
EQUITY FUND, WILL ACHIEVE ITS INVESTMENT OBJECTIVE.
STRATEGY. The Growth Equity Fund invests primarily in common stocks and
other equity-type securities issued by large, well-established companies. The
Growth Equity Fund may invest a portion of its assets in convertible
securities. Convertible securities, such as preferred stocks and convertible
debt instruments, contain both debt and equity features. Convertible
securities may provide some protection when stock prices generally decline,
but may experience less appreciation in value when stock prices generally
increase.
INVESTMENT GUIDELINES AND RESTRICTIONS. Although the assets of the Growth
Equity Fund will generally be invested in equity securities, the Growth Equity
Fund may invest in non-equity securities, including investment grade bonds and
debentures and high quality short-term instruments of the
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<PAGE>
same types as those in which the Stable Asset Return Fund may invest, when
State Street determines that such investments may contribute to the attainment
of the Fund's investment objective. The Growth Equity Fund will not invest more
than 35% of its assets in non-equity securities, except for temporary defensive
purposes. The Fund may invest in non-equity securities when, in light of
economic conditions and the general level of stock prices, dividend rates,
prices of fixed income securities and the level of interest rates, it appears
that the Growth Equity Fund's investment objective will not be met by buying
equity securities. To the extent that the Growth Equity Fund's assets are
invested in non-equity securities, the Fund's net asset value may be adversely
affected by a rise in interest rates.
For temporary defensive purposes, the Growth Equity Fund may invest without
limitation in U.S. Government Obligations, short-term commercial paper and
other high quality short-term instruments of the types purchased by the Stable
Asset Return Fund. See "Stable Asset Return Fund." The Fund would invoke this
right only in extraordinary circumstances, such as war, the closing of equity
markets, an extreme financial calamity, or the threat of any such event.
Although the Growth Equity Fund invests primarily in securities of U.S.
companies or foreign companies doing substantial business in the United States,
the Growth Equity Fund may invest a portion of its assets in the securities of
established foreign companies that do not do a substantial amount of business
in the United States. The Fund may invest in foreign securities directly and
through American Depositary Receipts (known as "ADRs") and may hold some
foreign securities outside of the United States. State Street has directed the
Investment Advisors to the Growth Equity Fund not to recommend an investment,
and State Street will not cause the Growth Equity Fund to make an investment if
that investment would cause more than 15% of the Fund's assets for which the
Investment Advisor's advice is obtained to be invested in foreign securities,
including ADRs, determined at the time of purchase.
Additional investment restrictions applicable to the Growth Equity Fund are
described in "Certain Information with Respect to the Funds--Investment
Prohibitions" and "Derivative Instruments."
Certain Risk Factors. See "Index Equity Fund--Certain Risk Factors" for risk
factors associated with investing in equity securities. In addition,
investments in foreign securities involve special risks. For certain risk
factors associated with investing in foreign securities, see "International
Equity Fund--Certain Risk Factors."
Portfolio Turnover. As the level of portfolio turnover increases, transaction
expenses incurred by the Fund, such as brokerage commissions, increase, which
may adversely affect the Fund's performance. The Growth Equity Fund generally
holds its investments for an extended period, and the average annual rate of
portfolio turnover is expected to be under 80%. However, it is difficult to
predict the rate of portfolio turnover in view of the potential for unexpected
market conditions. Therefore, in any single year, the portfolio turnover rate
may be either substantially less or substantially more than 80%. Such turnover
was 34% for the nine months ended September 30, 1998, 88% for the twelve months
ended December 31, 1997, 64% for the twelve months ended December 31, 1996 and
60% for the twelve months ended December 31, 1995.
Investment Advisors. State Street has retained Capital Guardian Trust
Company, Lincoln Capital Management Company, Dresdner RCM Global Investors LLC
and Bankers Trust Company 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. State Street will determine the percentage of the
assets in the Growth Equity Fund to be allocated to each Investment Advisor.
Unless altered by State Street, contributions to and withdrawals from the
Growth Equity Fund will be allocated to four 25% portions and State Street will
obtain advice for each portion from one of the Fund's Investment Advisors.
Bankers Trust Company will serve as advisor to the index portion of the Fund.
Income and gains attributable to the assets allocated to the portion for which
advice is obtained from each Investment Advisor remain allocated to such
portion, thereby changing the percentage of total assets of the Growth Equity
Fund for which advice is obtained from to each Investment Advisor. An
Investment Advisor whose portion experiences superior performance may thus
provide investment advice with respect to a larger portion of the Growth Equity
Fund than originally allocated to such portion. For additional information
regarding the Investment Advisors, see "Investment Advisors."
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INDEX EQUITY FUND
INVESTMENT OBJECTIVE. The investment objective of the Index Equity Fund is to
replicate the total return of the Russell 3000 Index by investing in stocks
included in the Russell 3000 Index, with the overall objective of achieving
long-term growth of capital. The Index Equity Fund invests indirectly in these
stocks through collective investment funds maintained by State Street. The
Russell 3000 Index represents approximately 98% of the U.S. equity market based
on the market capitalization of the companies in the Russell 3000 Index. As of
September 30, 1998, the largest company had a market capitalization of
approximately $272 billion and the smallest company had a market capitalization
of approximately $12 million. The Russell 3000 Index is reconstituted annually
on June 30 based on index methodology and market capitalization rankings as of
the preceding May 31. THERE CAN BE NO ASSURANCE THAT THE INDEX FUND WILL
ACHIEVE ITS INVESTMENT OBJECTIVE OF REPLICATING THE TOTAL RETURN OF THE RUSSELL
3000 INDEX.
STRATEGY. To control costs, the Index Equity Fund does not attempt to own all
3,000 securities included in the Russell 3000 Index. Instead, the Fund attempts
to replicate the returns of the Russell 3000 Index by dividing it into two
categories: the S&P 500 Index, which is comprised of 500 stocks, and the
extended market portion of the U.S. equity market represented by the Russell
Special Small Company Index, which is comprised of approximately 2,500 stocks.
The securities in these two indicies represent the universe of securities
contained in the Russell 3000 Index. The Index Equity Fund invests in common
stocks included in the Russell 3000 Index by fully replicating the S&P 500
Index and the Russell Special Small Company Index with the possible exception
of the smallest companies in the Russell Special Small Company Index. Deviation
of the Fund's performance from the performance of the Russell 3000 Index (known
as "tracking error") may result because the S&P 500 Index is calculated using
capitalization weights that are different from those used to calculate the
Russell 3000 Index and includes some securities not included in the Russell
3000 Index. Tracking error may also result from purchases and redemptions of
Units of the Index Equity Fund, as well as from the expenses borne by the Index
Equity Fund. Such purchases and redemptions may necessitate the purchase and
sale of securities by the Index Equity Fund and the resulting transaction costs
may be substantial because of the number and the characteristics of the
securities held. Tracking error may also occur due to factors such as the size
of the portfolio and changes made in the Russell indices or the manner in which
the Russell indices are calculated.
INVESTMENT GUIDELINES AND RESTRICTIONS. The Index Equity Fund invests
predominantly in common stocks of U.S. companies. However, the Index Equity
Fund, may invest temporarily and without limitation for defensive purposes in
certain short term fixed-income securities. Such securities may be used to
invest uncommitted cash balances or to maintain liquidity to provide for
Investor redemptions. State Street will not cause the Index Equity Fund to make
an investment if that investment would cause the Fund to purchase warrants or
make any other investment that is inconsistent with the restrictions applicable
to the other Funds described under "Certain Information with Respect to the
Funds--Investment Prohibitions." The Fund concentrates in particular industries
to the extent the Russell 3000 Index concentrates in those industries. The
Index Equity Fund will not borrow money except as a temporary measure for
extraordinary or emergency purposes or to facilitate redemption (not for
leveraging or investment).
CERTAIN RISK FACTORS. By investing primarily in the U.S. equity market, the
Index Equity Fund is subject to a variety of market and financial risks that
may affect its return. The Unit price of the Index Equity Fund could be
volatile, and investors should be able to tolerate sudden, sometimes
substantial fluctuations in the value of their investment. No assurance can be
given that investors will be protected from the risks inherent in equity
investing. The Fund is intended to be a long-term investment vehicle and is not
designed to provide investors with the means to speculate on short-term U.S.
stock market movements.
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In addition, it should be noted that the stocks of small companies included
in the Russell indices have limited product lines, markets, or financial
resources, or may be dependent upon a small management group. Therefore, their
securities may be subject to more abrupt or erratic market movements than
larger, more established companies, both because their securities are
typically traded in lower volume and because the issuers are typically subject
to a greater degree of changes in their earnings and prospects.
For information with respect to the use of derivative instruments, see
"Derivative Instruments."
PORTFOLIO TURNOVER. Ordinarily, Index Equity Fund will sell securities only
to reflect certain changes in the Russell 3000 Index (including mergers or
changes in the composition of the Russell 3000 Index) or to accommodate cash
flows into and out of the Index Equity Fund. Accordingly, the turnover rate
for the Index Equity Fund is not expected to exceed 50% on an annual basis.
However, it is difficult to predict the rate of portfolio turnover in view of
the potential for unexpected market conditions. Therefore, in any single year,
the portfolio turnover rate may be either substantially less or substantially
more than 50%. The turnover of the Fund was 90% for the nine months ended
September 30, 1998, 11% for the twelve months ended December 31, 1997, 17% for
the twelve months ended December 31, 1996 and 132% for the twelve months ended
December 31, 1995. This turnover reflects purchases and sales of units of the
collective investment funds in which the Fund invests rather than the turnover
of the underlying portfolios of such collective investment funds. See "--
Investment Advisor." Higher than expected turnover in 1995 is partly
attributable to adjustments made to the Fund's composition when its investment
objective was changed from replicating the returns of the S&P 500 Index to
replicating the returns of the Russell 3000 Index. See "Intermediate Bond
Fund--Portfolio Turnover" for information applicable to portfolio turnover of
index funds.
INVESTMENT ADVISOR. State Street is sole manager and trustee of the Index
Equity Fund. However, in the future State Street may employ investment
advisors, at its discretion and subject to consultation with ABRA. The assets
of the Fund are currently invested in the State Street Bank and Trust Company
Russell 3000 Non-Lending Fund, a collective trust fund maintained by State
Street.
INFORMATION ABOUT THE RUSSELL INDICES. The criteria used by Frank Russell &
Company to determine the initial list of securities eligible for inclusion in
the Russell indices is total market capitalization adjusted for large private
holdings and cross-ownership. Companies are not selected for inclusion in the
Russell indices because they are expected to have superior stock price
performance relative to the U.S. stock market in general or other stocks in
particular. Frank Russell & Company makes no representation or warranty,
implied or express, to any member of the public regarding the advisability of
investing in the Russell 3000 Index or the ability of the Russell 3000 Index
to track general market performance of large and small capitalization stocks.
"STANDARD & POOR'S (R)," "S&P (R)," "S&P 500 (R)," "STANDARD & POOR'S 500"
AND "500" ARE TRADEMARKS OF MCGRAW-HILL, INC. AND HAVE BEEN LICENSED FOR USE
BY STATE STREET. THE INDEX FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED
BY STANDARD & POOR'S AND STANDARD & POOR'S MAKES NO REPRESENTATION REGARDING
THE ADVISABILITY OF INVESTING IN THE INDEX FUND.
"RUSSELL 3000 INDEX" AND "RUSSELL SPECIAL SMALL COMPANY INDEX" ARE
TRADEMARKS OF FRANK RUSSELL & COMPANY. THE RUSSELL 3000 INDEX IS NOT
SPONSORED, ENDORSED, SOLD OR PROMOTED BY FRANK RUSSELL & COMPANY, NOR DOES
FRANK RUSSELL & COMPANY GUARANTEE THE ACCURACY AND/OR COMPLETENESS OF THE
RUSSELL 3000 INDEX OR ANY DATA INCLUDED THEREIN. FRANK RUSSELL & COMPANY MAKES
NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE RESULTS TO BE OBTAINED BY THE FUND,
OWNERS OF THE FUND, ANY PERSON OR ANY ENTITY FROM THE USE OF THE RUSSELL 3000
INDEX OR ANY DATA INCLUDED THEREIN. FRANK RUSSELL & COMPANY MAKES NO EXPRESS
OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL SUCH WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE FOR USE WITH RESPECT TO
THE RUSSELL 3000 INDEX OR ANY DATA INCLUDED THEREIN.
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<PAGE>
AGGRESSIVE EQUITY FUND
INVESTMENT OBJECTIVE. The investment objective of the Aggressive Equity Fund
is to maximize long-term growth of capital. The Aggressive Equity Fund seeks to
achieve, over an extended period of time, total returns comparable to or
superior to those attained by broad measures of the domestic stock market.
THERE CAN BE NO ASSURANCE THAT THE AGGRESSIVE EQUITY FUND WILL ACHIEVE ITS
INVESTMENT OBJECTIVE.
STRATEGY. The Aggressive Equity Fund's investments may include securities of
relatively small to medium sized companies, new companies and companies that
may benefit from new technologies, new product or service developments or
management changes. The Fund may also invest in newly issued securities and
securities of seasoned, established companies that appear to have unusual value
or appreciation potential. Industry diversification is not an objective of the
Aggressive Equity Fund and the Fund, may, at times, be less diversified than
the other Funds.
INVESTMENT GUIDELINES AND RESTRICTIONS. The Aggressive Equity Fund invests
primarily in common stocks and other equity-type securities, including
convertible securities, that are believed to have strong potential for
appreciation.
Although the assets of the Aggressive Equity Fund will generally be invested
in equity securities, the Aggressive Equity Fund may also invest in non-equity
securities, including investment grade bonds and debentures and high quality
short-term instruments of the same types as those in which the Stable Asset
Return Fund may invest, when State Street determines that in light of economic
conditions and the general level of stock prices, dividend rates, prices of
fixed income securities and the level of interest rates, such investments may
contribute to the attainment of the Fund's investment objective. See "Stable
Asset Return Fund." The Aggressive Equity Fund will not invest more than 35% of
its assets in non-equity securities, except for temporary defensive purposes.
To the extent that the Aggressive Equity Fund's assets are invested in non-
equity securities, the Fund's net asset value may be adversely affected by a
rise in interest rates.
For temporary defensive purposes, the Aggressive Equity Fund may invest
without limitation in U.S. Government Obligations, short-term commercial paper
and other high quality instruments of the types purchased by the Stable Asset
Return Fund. See "Stable Asset Return Fund." The Fund would invoke this right
only in extraordinary circumstances, such as war, the closing of equity
markets, an extreme financial calamity, or the threat of any such event.
Although the Aggressive Equity Fund invests primarily in securities of U.S.
companies or foreign companies doing substantial business in the United States,
the Aggressive Equity Fund may invest a portion of its assets in the securities
of established foreign companies that do not do a substantial amount of
business in the United States. The Fund may invest in foreign securities
directly and through American Depositary Receipts (known as "ADRs") and may
hold some foreign securities outside of the United States. State Street has
directed the Investment Advisors to the Aggressive Equity Fund not to recommend
an investment, and State Street will not cause the Aggressive Equity Fund to
make an investment if that investment would cause more than 15% of the portion
of the Fund's assets for which such Investment Advisor's advice is obtained to
be invested in foreign securities, including ADRs, determined at the time of
purchase. Additional investment restrictions applicable to the Aggressive
Equity Fund are described in "Certain Information With Respect to the Funds--
Investment Prohibitions" and "Derivative Instruments."
CERTAIN RISK FACTORS. Generally, the Aggressive Equity Fund poses a greater
risk to principal than the other Funds. Investors should consider their
investments in the Aggressive Equity Fund as relatively long-term and involving
high risk to principal commensurate with potential for substantial gains. There
is no certainty regarding which companies and industries will in fact
experience capital
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growth, and such companies and industries may lose their potential for capital
growth at any time. To the extent that the assets of the Aggressive Equity Fund
are invested in the securities of a single issuer or a single industry, there
is a greater risk that a deterioration in the performance of such issuer or
industry will have a material adverse effect on the Fund. See "Index Equity
Fund--Certain Risk Factors" for a description of risk factors associated with
investing in equity securities generally. See "International Equity Fund--
Certain Risk Factors" for a description of the risks associated with
investments in foreign securities.
A significant portion of the Aggressive Equity Fund's investments may be in
securities of small to medium sized companies, which typically have greater
market and financial risk than larger, more diversified companies. These
companies are often dependent on one or two products in rapidly changing
industries and may be more vulnerable to competition from larger companies with
greater resources and to economic conditions that affect their market sector.
Therefore, consistent earnings for such companies may not be as likely as they
would be for more established companies. The smaller companies may not have
adequate resources to react optimally to change or to exploit opportunities.
Small and medium sized companies may also be more dependent on access to equity
markets to raise capital than are larger companies that have a greater ability
to support relatively larger debt burdens. The securities of such companies may
be held primarily by insiders or institutional investors, which may have an
impact on their marketability. These securities may be more volatile than the
overall market. Relatively new companies and companies which have recently made
an initial public offering may be perceived by the market as unproven. The
Aggressive Equity Fund's focus on appreciation potential will result in an
emphasis on securities of companies that may pay little or no dividends and
reinvest all or a significant portion of their earnings. The low expected
dividend level may also contribute to greater than average volatility.
PORTFOLIO TURNOVER. As the level of portfolio turnover increases, transaction
expenses incurred by the Fund, such as brokerage commissions, increase, which
may adversely affect the Fund's performance. Portfolio turnover of the
Aggressive Equity Fund may be high. Although it is not expected to exceed 150%
per year on average, it is difficult to predict the rate of portfolio turnover
in view of the potential for unexpected market conditions. Therefore, in any
single year, the portfolio turnover rate may be either substantially less or
substantially more than 150%. The possibility of high turnover reflects, in
part, the volatility of the securities in which the Fund invests and the
probability that the circumstances prompting investment in certain companies
may change more rapidly than in the case of larger, more diversified companies.
Portfolio turnover was 36% for the nine months ended September 30, 1998, 36%
for the twelve months ended December 31, 1997, 48% for the twelve months ended
December 31, 1996 and 63% for the twelve months ended December 31, 1995.
INVESTMENT ADVISORS. State Street has retained Capital Guardian Trust Company
and Sit Investment Associates, Inc. to serve as Investment Advisors to provide
investment advice and arrange for the execution of purchases and sales of
securities for the Aggressive Equity Fund. State Street will determine the
percentage of the assets in the Aggressive Equity Fund to be allocated to each
Investment Advisor. Unless altered by State Street, contributions to and
withdrawals from the Aggressive Equity Fund will be allocated to two 50%
portions. State Street will obtain advice for one portion from Capital Guardian
Trust Company and will obtain advice for the other portion from Sit Investment
Associates. Income and gains attributable to the assets allocated to each
portion remain allocated to that portion, thereby changing the percentage of
total assets of the Aggressive Equity Fund for which State Street obtains
investment advice from each Investment Advisor. An Investment Advisor whose
portion experiences superior performance may thus provide investment advice
with respect to a larger portion of the Aggressive Equity Fund than originally
allocated to such portion. For additional information regarding the Investment
Advisors, see "Investment Advisors."
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INTERNATIONAL EQUITY FUND
INVESTMENT OBJECTIVE. The International Equity Fund's investment objective
is to seek long-term growth of capital through investment primarily in common
stocks of established non-U.S. companies. Common stocks of foreign companies
offer a way to seek long-term growth of capital. Total return will consist of
capital appreciation or depreciation, capital gains, dividend income and
currency gains or losses. The International Equity Fund seeks to achieve, over
an extended period of time, total returns comparable to or superior to broad
measures of the international (non-U.S.) stock market. THERE CAN BE NO
ASSURANCE THAT THE INTERNATIONAL EQUITY FUND WILL ACHIEVE ITS INVESTMENT
OBJECTIVE.
Over the last 30 years, many foreign countries' economies have grown faster
than the United States' economy, and the average return from equity
investments in such countries has often exceeded the return on similar
investments in the U.S. Moreover, over the same period, there has frequently
been a wide and largely unrelated variation in performance among international
equity markets. Within the framework of diversification, the International
Equity Fund seeks to identify and invest in companies participating in the
faster growing foreign economies and markets. State Street believes that
because more than half of the world's stock market value is traded abroad,
investment in foreign securities offers significant potential for long-term
capital appreciation and an opportunity to achieve investment diversification.
Historically, returns on foreign investments have not moved together with U.S.
stocks over the long term. However, foreign stocks may not always move counter
to U.S. stocks in the short run.
STRATEGY. The International Equity Fund intends to diversify investments
broadly among developed and emerging countries and generally to have at least
three different countries represented in the portfolio. It may invest in
countries of the Far East and Europe, as well as in South Africa, Australia,
Canada, Latin America and other areas. Under unusual circumstances, however,
it may invest substantially all its assets in only one or two countries. Under
exceptional economic or market conditions abroad, the International Equity
Fund may temporarily invest all or a major portion of its assets in U.S.
Government Obligations or debt obligations of U.S. companies of the type
described under "Stable Asset Return Fund." The Fund would invoke this right
only in extraordinary circumstances, such as war, the closing of equity
markets, an extreme financial calamity, or the threat of any such event.
INVESTMENT GUIDELINES AND RESTRICTIONS. In seeking to accomplish its
objective, the International Equity Fund will invest primarily in common
stocks of established foreign companies that are believed to have the
potential for growth of capital and in a variety of other equity-related
securities, such as preferred stocks, warrants and convertible securities of
such foreign companies, as well as foreign corporate and governmental debt
securities (when considered consistent with its investment objective). The
International Equity Fund may invest in non-equity securities when, in light
of economic conditions and the general level of stock prices, dividend rates,
prices of fixed-income securities and the level of interest rates, it appears
that the International Equity Fund's investment objective will not be met by
buying equity securities. Under normal conditions the International Equity
Fund's investments in securities other than common stocks and other equity-
related securities are limited to no more than 35% of total assets. Within
this limitation, the Fund will also maintain a small cash reserve which will
be invested in Short-Term Investment Products. See "Stable Asset Return Fund."
The International Equity Fund will normally conduct its foreign currency
exchange transactions either on a cash basis at the spot rate prevailing in
the foreign currency exchange market or by entering into forward contracts to
purchase or sell foreign currencies. See "Derivative Instruments."
The International Equity Fund is subject to the same investment prohibitions
and restrictions as the other Funds. See "Certain Information With Respect to
the Funds--Investment Prohibitions."
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CERTAIN RISK FACTORS. Foreign stock prices are subject to many of the same
influences as U.S. stocks, such as general economic conditions, company and
industry earnings prospects, and investor psychology. See "Index Equity Fund--
Certain Risk Factors." International investing also involves additional risks,
such as currency risk, that can increase the potential for the losses in the
Fund. Normally, these risks are significantly greater for investments in
emerging markets.
Currency Fluctuations. Transactions in foreign securities are conducted in
local currencies, so dollars usually must be exchanged for another currency
each time a stock is bought or sold or a dividend is paid. Likewise, share
price quotations and total return information will reflect conversion into
dollars. Accordingly, fluctuations in foreign exchange rates can significantly
increase or decrease the dollar value of a foreign investment, boosting or
offsetting its local market return. For example, if a French stock rose 10% in
price during a year but the U.S. dollar gained 5% against the French franc
during that time, the U.S. investor's return would be reduced to approximately
5%. This is the result because the franc would "buy" fewer dollars at the end
of the year than at the beginning, or, conversely, a dollar would buy more
francs. The Fund's total return will be affected by currency fluctuations. The
exact amount of the impact depends on the currencies represented in the Fund's
portfolio and how each one appreciates or depreciates in relation to the U.S.
dollar. Exchange rate movements can be large, unpredictable and endure for
extended periods of time.
Costs. It is more expensive for U.S. investors to trade in foreign markets
than in the U.S. Investment pools offer a very efficient way for individuals to
invest abroad, but the overall expense ratios of international funds are
usually somewhat higher than those of typical domestic stock funds.
Political and Economic Factors. The economies, markets and political
structures of a number of the countries in which the Fund can invest do not
compare favorably with U.S. and other mature economies in terms of wealth and
stability. Therefore, investments in these countries may be riskier, and will
be subject to erratic and abrupt price movements. This is especially true for
emerging markets. Even investments in countries with highly developed economies
are subject to risk. For example, the Japanese stock market historically has
experienced wide swings in value. Moreover, while certain countries have made
progress in economic growth, liberalization, fiscal discipline and political
and social stability, there is no assurance these trends will continue. This
makes investment in such markets significantly riskier than investment in other
markets.
Some economies of the countries in which investments may be made are less
developed, overly reliant on particular industries and more vulnerable to the
ebb and flow of international trade, trade barriers and other protectionist or
retaliatory measures. Some countries, particularly in Latin America and other
emerging markets, have legacies of hyperinflation and the risk of future
hyperinflation and currency devaluations versus the dollar (which adversely
affect returns to U.S. investors) and may be overly dependent on foreign
capital (a risk that is exacerbated by large currency movements). Investments
in countries that have recently begun moving away from central planning and
state-owned industries toward free markets, such as the countries in Eastern
Europe, China and Africa, should be regarded as speculative.
Certain countries in which investments may be made will have histories of
instability and upheaval with respect to their internal politics that could
cause their governments to act in a detrimental or hostile manner toward
private enterprise or foreign investment. Actions such as capital controls,
nationalizing an industry or company, expropriating assets, or imposing
punative taxes could have a severe adverse effect on security prices and impair
the International Equity Fund's ability to repatriate capital or income.
Significant external risks, including war, currently affect some countries.
Governments in many emerging market countries participate to a significant
degree in the countries' economies and securities markets.
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Legal, Regulatory and Operational. Certain countries lack uniform accounting,
auditing and financial reporting standards, have less governmental supervision
of financial markets than in the U.S., do not honor legal rights enjoyed in the
U.S. and have settlement practices, such as delays, which may subject the
International Equity Fund to risks of loss not customary in U.S. markets. In
addition, securities markets in these countries have substantially lower
trading volumes than U.S. markets, resulting in less liquidity and more
volatility than experienced in the U.S.
Pricing. Portfolio securities may be listed on foreign exchanges that are
open on days (such as Saturdays or U.S. legal holidays) when the International
Equity Fund does not compute its prices. As a result, the Fund's net asset
value may be significantly affected by trading on days when investors cannot
make transactions in Units of the Fund.
Investing in International Stocks. Like U.S. stock investments, common stock
of foreign companies offer investors a way to build capital over time.
Nevertheless, the long-term rise of foreign stock prices as a group has been
punctuated by periodic declines. Share prices of all companies, even the best
managed and most profitable, whether U.S. or foreign, are subject to market
risk, which means they can fluctuate widely. In less well developed stock
markets, such as those found in Asian, Latin American, Eastern European and
African countries, volatility may be heightened by actions of a few major
investors. For example, substantial increases or decreases in cash flows of
mutual funds investing in these markets could significantly affect stock prices
and, therefore, fund share prices. For this reason, investors in foreign stocks
should have a long-term investment horizon and be willing to wait out declining
markets. The International Equity Fund should not be relied upon as a complete
investment program or used as a means to speculate on short-term swings in the
stock or foreign exchange markets.
The values of foreign fixed-income securities fluctuate in response to
changes in U.S. and foreign interest rates. Income received by the
International Equity Fund from sources within foreign countries may also be
reduced by withholding and other taxes imposed by such countries although tax
conventions between certain countries and the U.S. may reduce or eliminate such
taxes. Any such taxes paid by the International Equity Fund will reduce the net
income earned by it. State Street will consider available yields, net of any
required taxes, in selecting foreign dividend paying securities.
In addition, short-term movements in currency exchange rates could adversely
impact the availability of funds to pay for investors' redemptions of
investments in the International Equity Fund. For example, if the exchange rate
for a currency declines after a security has been sold to provide funds for a
redemption from the Fund but before such funds are translated into U.S.
dollars, it could be necessary to liquidate additional portfolio securities in
order to finance the redemption.
PORTFOLIO TURNOVER. As the level of portfolio turnover increases, transaction
expenses incurred by the International Equity Fund (such as brokerage
commissions) will increase, which may adversely affect the Fund's overall
performance. The International Equity Fund generally will hold its investments
for an extended period of time, and the average annual rate of portfolio
turnover is expected to be under 50%. It is difficult, however, to predict the
rate of portfolio turnover in view of the potential for unexpected market
conditions, and securities may be purchased and sold without regard to the
length of time held when circumstances warrant. Therefore, in any given year,
the portfolio turnover rate may be substantially less or substantially more,
than 50%. Portfolio turnover was 87% for the nine months ended September 30,
1998, 101% for the twelve months ended December 31, 1997, 73% for the twelve
months ended December 31, 1996 and 4% for the period from September 5, 1995 to
December 31, 1995. Such turnover reflects purchases and sales of shares of the
registered investment company in which the Fund invests rather than the
turnover of the underlying portfolio of such registered investment company. See
"--Investment Advisor and Initial Investment in Registered Investment
Companies."
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INVESTMENT ADVISOR AND INITIAL INVESTMENTS IN REGISTERED INVESTMENT
COMPANIES. State Street expects to select Rowe Price-Fleming International,
Inc. to be the Investment Advisor for the International Equity Fund to provide
investment advice and arrange for the execution of purchases and sales of
securities for the International Equity Fund, subject to the supervision and
approval of State Street to accept or reject any recommended investment.
State Street, however, based upon the advice of Rowe Price-Fleming
International has determined that in order for the International Equity Fund to
meet its investment objective and to provide for efficient investment of the
Fund's assets, until a sufficient level of assets in the Fund is attained, Rowe
Price-Fleming International's advice will be obtained by investing the funds
directed by Investors into the International Equity Fund in the T. Rowe Price
International Stock Fund, a registered investment company that is managed by
Rowe Price-Fleming International and that has substantially the same investment
objectives as the International Equity Fund. As of September 30, 1998, $60
million in assets were invested in the Fund and such assets are invested in the
T. Rowe International Stock Fund. After a sufficient asset level is attained,
which State Street currently expects to be approximately $75 million to $100
million, the International Equity Fund will be managed as a separate collective
trust portfolio by State Street with the advice of Rowe Price-Fleming
International.
State Street, however, will monitor the performance of the T. Rowe
International Stock Fund, in light of the International Equity Fund's
investment objectives, to determine whether the continued investment by the
International Equity Fund in such registered investment company is appropriate.
If State Street concludes that the investment objectives or performance of the
T. Rowe International Stock Fund are no longer consistent with those of the
International Equity Fund, State Street may transfer a portion or all of the
assets of the International Equity Fund to other registered investment
companies or collective investment funds maintained by State Street that, in
light of the investment objectives of the International Equity Fund, State
Street deems to be more appropriate.
It is anticipated that after a sufficient level of assets is reached, at
State Street's discretion, funds may be withdrawn from the T. Rowe
International Stock Fund in such a manner as to not require the liquidation of
portfolio securities by the T. Rowe International Stock Fund, although there
can be no assurance that this goal will be met. With the consent of Rowe Price-
Fleming International, all or part of the International Equity Fund's
withdrawals may consist of portfolio securities valued at their current market
value on the date of distribution, which would then become portfolio securities
in the International Equity Fund. If a liquidation of the portfolio securities
occurs, Rowe Price-Fleming International will recommend securities that it
believes reflect a representative sample of the T. Rowe International Stock
Fund's portfolio. State Street will have the authority to approve or disapprove
of Rowe Price-Fleming's International recommendations. For additional
information with respect to the Investment Advisor, see "Investment Advisors."
CERTAIN INFORMATION WITH RESPECT TO THE FUNDS
INVESTMENT PROHIBITIONS
None of the Funds will:
. trade in foreign currency, except transactions incidental to the
settlement of purchases or sales of securities for the Funds;
. make an investment in order to exercise control or management over a
company;
. make short sales, unless the Funds have, by reason of ownership of other
securities, the right to obtain securities of a kind and amount
equivalent to the securities sold, which right will continue so long as a
Fund is in a short position;
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. trade in commodities or commodity contracts, except options or futures
contracts (including options on futures contracts) with respect to
securities or securities indices for hedging purposes;
. write uncovered options;
. purchase real estate or mortgages, provided that the Funds may buy shares
of real estate investment trusts listed on U.S. stock exchanges or
reported on Nasdaq National Market if such purchases are consistent with
the investment objective and restrictions set forth in the fund
declaration for the Fund;
. except for the initial investments by the Intermediate Bond Fund and the
International Equity Fund (see "Intermediate Bond Fund--Investment
Advisors and Initial Investments in Registered Investment Companies" and
"International Equity Fund--Investment Advisor and Initial Investments in
Registered Investment Companies"), invest in the securities of registered
investment companies;
. invest in oil, gas or mineral leases;
. purchase any security on margin or borrow money, except for short-term
credit necessary for clearance of securities transactions or, in the case
of the Index Fund, for redemption purposes; or
. make loans, except by (i) the purchase of marketable bonds, debentures,
commercial paper and similar marketable evidences of indebtedness and
(ii) engaging in repurchase agreement transactions.
State Street has directed the Investment Advisors not to recommend an
investment, and State Street will not cause the Funds to make an investment,
if that investment would cause (1) more than 5% of the portion of such Fund's
net assets to be invested in warrants generally, or more than 2% of such net
assets to be invested in warrants not listed on a nationally recognized U.S.
securities exchange, or (2) more than 10% of the portion of such Fund's net
assets to be invested in illiquid securities, including repurchase agreements
with maturities in excess of seven days or portfolio securities that are not
readily marketable, in each case determined at the time of purchase. State
Street has also directed the Investment Advisors not to recommend an
investment, and State Street will not cause the Funds to make an investment,
in an industry if that investment would cause more than 25% of the portion of
such Fund's assets allocated to such Investment Advisor to be invested in that
industry, determined at the time of purchase. In addition, State Street has
directed the Investment Advisors not to recommend an investment, and State
Street will not cause the Funds to make an investment, in the securities of an
issuer if that investment would cause more than 5% of the portion of the
assets of such Fund allocated to the Investment Advisor to be invested in the
securities of that issuer, determined at the time of purchase. Except as
described under "Derivative Instruments," State Street has no present
intention of causing the Funds to invest in options and financial futures
contracts and other derivatives, and will not do so without prior notification
to investors in the Funds.
Although none of the foregoing restrictions apply to the registered
investment companies in which the Intermediate Bond Fund and the International
Equity Fund currently invest, each of these registered investment companies
has restrictions that are set forth in its respective prospectus and statement
of additional information.
The Funds that invest in fixed income securities may also purchase such
securities for future delivery on a "to be announced" or "TBA" basis where the
price and coupon are determined at the time of purchase but the collateral for
such securities is not determined until immediately before the securities are
delivered. Investing in TBA securities carries risks similar to investing in
"when-issued" securities, see "Stable Asset Return Fund--Investment Guidelines
and Restrictions and Certain Risk Factors."
VALUATION OF UNITS. An investor's interest in a Fund is represented by the
value of the Units credited to such investor's account for that Fund. The
number of Units purchased with a contribution or transfer or allocation of
assets to a Fund (except for the Stable Asset Return Fund, which is
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generally maintained at $1.00) is the quotient of (i) the amount allocated to
the Fund divided by (ii) the per Unit value of such Fund calculated as of the
end of the regular trading session of the New York Stock Exchange on the
Business Day the contribution is credited by State Street. Once a number of
Units has been credited to an investor's account, this number will not vary
because of any subsequent fluctuation in the Unit value. The value of each
Unit, however, will fluctuate with the investment experience of the particular
Fund, which reflects the investment income and realized and unrealized capital
gains and losses of that Fund.
Unit values for the Funds are determined as of the close of the regular
trading session of the New York Stock Exchange on each Business Day. The Unit
value for each Fund is the value of all assets of the Fund, less all
liabilities of such Fund, divided by the number of outstanding Units of such
Fund. The value of each Fund is determined by State Street based on the market
value of each Fund's portfolio of securities. The value of securities and other
assets that do not have readily available market prices is determined in good
faith by State Street. See "Stable Asset Return Fund--Valuation of Units" for
information as to the valuation of Units in such Fund.
TRANSFERS. Transfers to and from any of the Funds, as well as transfers to
and from the portfolios of the Structured Portfolio Service and the Self-
Managed Accounts, may be made on any Business Day. For additional information
relating to transfers and withdrawals from the Investment Options, see
"Transfers Between Investment Options and Withdrawals."
PERFORMANCE INFORMATION. Each Fund may, from time to time, report its
performance in terms of the Fund's total return. A Fund's total return is
determined based on historical results and is not intended to indicate future
performance. A Fund's total return is computed by determining the average
annual compounded rate of return for a specified period which, when applied to
a hypothetical $1,000 investment in the Fund at the beginning of the period,
would produce the redeemable value of that investment at the end of the period.
Each Fund may also report a total return computed in the same manner but
without annualizing the result. A recorded message providing current per Unit
values for the Funds is available at (800) 348-2272.
DERIVATIVE INSTRUMENTS
FUNDS MANAGED DIRECTLY BY STATE STREET. The Funds will not engage, when
managed as separate portfolios by State Street (with or without the assistance
of Investment Advisors), in investments in derivative securities, such as
futures, options, swaps, caps or floor contracts or foreign currency hedging
contracts, except as described in this paragraph. The Index Fund and the
indexed portion of the Growth Equity Fund may engage in limited transactions in
stock index futures and options for hedging purposes and as a substitute for
comparable market positions in the securities held by such Fund (with respect
to the portion of its portfolio that is held in cash items, for example pending
investment or to pay for redemption requests). The International Equity Fund
and, to a lesser extent, the Balanced Fund, the Value Equity Fund, the Growth
Equity Fund and the Aggressive Equity Fund may enter into foreign currency
hedging transactions in connection with their purchase or sale of foreign
securities as described in the next paragraph. Collaterized mortgage
obligations (known as "CMOs") and other mortgage-backed securities, as well as
asset-backed securities, could be considered derivative securities, which are
securities whose value is derived from other instruments or assets, because
their value is derived from the cash flows from their underlying assets, such
as the mortgages or accounts receivable. The Balanced Fund may continue to hold
current investments in the CMOs that are included in its portfolio. However, no
such additional investments may be made. The Stable Assets Return Fund invests
in certain asset-backed securities, but does not invest in CMOs or other
mortgage-backed securities. See "Stable Assets Return Fund--Investment
Guidelines and Restrictions and Certain Risk Factors."
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All such Funds that may invest in securities denominated in foreign
currencies may, when they enter into, and incidental to the settlement of, a
contract for the purchase or sale of a security denominated in a foreign
currency, enter into forward foreign currency exchange contracts to "lock in"
the U.S. dollar price of the security. A forward foreign currency exchange
contract involves an obligation to purchase or sell a specific currency at a
future date, which may be any fixed number of days from the date of the
contract agreed upon by the parties, at a price set at the time of the
contract. A Fund can use such contracts to reduce its exposure to changes in
the value of the currency it will deliver and increase its exposure to changes
in the value of the currency into which it will be exchanged. The effect on the
value of a Fund is similar to selling securities denominated in one currency
and purchasing securities denominated in another. Dollar-denominated American
Depositary Receipts (known as "ADRs"), which are issued by domestic banks and
are traded in the United States on exchanges or over-the-counter, are available
with respect to many foreign securities. ADRs do not lessen the foreign
exchange risk inherent in investment in the securities of foreign issuers;
however, by investing in ADRs rather than directly in the foreign issuers'
stock, a Fund can avoid currency risks during the settlement period for
purchases or sales without having to engage in separate foreign currency
hedging transactions.
FUNDS INVESTING IN REGISTERED INVESTMENT COMPANIES. While the assets of the
Intermediate Bond Fund are invested in the PIMCO Total Return Fund or the
Masterworks Bond Index Fund (or in such other registered investment companies
as State Street may select), investments by such registered investment
companies will be subject to the derivatives policies adopted by such
companies. Such policies are described in the prospectuses and statements of
additional information of such registered investment companies and are set
forth herein as interpreted by State Street. Such registered investment
companies may enter into interest rate, index and currency exchange rate swap
agreements for purposes of attempting to obtain a particular desired investment
objective at a lower cost than if the investment company had invested directly
in an instrument that yielded that desired return and may utilize any of the
strategies referred to below, and may use foreign currency exchange contracts
to lock in the exchange rate for a purchased security in the manner described
in the preceding paragraph. Separately, while the assets of the International
Equity Fund are invested in the T. Rowe International Stock Fund (or in such
other registered investment companies as State Street may select), all of these
registered investment companies may enter into contracts designed to increase
or decrease their exposure to a particular currency, in an amount approximating
the value of some or all of the portfolio securities denominated in such
currency, if their managers believe that such currency may suffer or enjoy a
substantial movement against another currency. These registered investment
companies may also invest in CMOs and other mortgage-related securities, as
well as asset-backed securities, which could be considered to be derivative
securities. The registered investment companies in which the Intermediate Bond
Fund may invest may effect short sales as part of their overall portfolio
management strategies or to offset potential declines in value of long
positions in similar securities as those sold short. To the extent that the
registered investment companies in which the Intermediate Bond Fund may invest
engage in uncovered short sales, they will maintain asset coverage in the form
of liquid assets in a segregated account. The T. Rowe International Stock Fund
may invest up to 10% of its total assets in "Hybrid Instruments." These
instruments (a type of potentially high-risk derivative) can combine the
characteristics of securities, futures, and options. For example, the principal
amount, redemption, or conversion terms of a security could be related to the
market price of some commodity, currency, or securities index. Such securities
may bear interest or pay dividends at below market (or even relatively nominal)
rates. Under certain conditions, the redemption value of such an investment
could be zero. Hybrid Instruments can have volatile prices and limited
liquidity, and their use by the T. Rowe International Stock Fund may not be
successful. In addition, investors should not view percentage investment
restrictions as an accurate gauge of the potential risk of such investments.
For example, in a given period, a 5% investment in Hybrid Investments could
have significantly more of an impact on the T. Rowe International Stock Fund's
share price than its weighting in the portfolio.
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All of the registered investment companies in which the Funds invest may
purchase and write call and put options on securities, securities indices and
on foreign currencies, and enter into futures contracts and use options on
futures contracts, and may sell previously purchased options and futures
contracts. These registered investment companies also may enter into swap
agreements with respect to foreign currencies, interest rates and securities
indices. These registered investment companies may use these techniques to
hedge against changes in interest rates, foreign currency exchange rates or
securities prices or as part of their overall investment strategies, and may
also purchase and sell options relating to foreign currencies for purposes of
increasing exposure to a foreign currency or to shift exposure to foreign
currency fluctuations from one country's currency to another's.
The purchase and writing of options involves certain risks. During the option
period, a writer of a covered call option gives up, in return for the premium
on the option, the opportunity to profit from a price increase in the
underlying security above the exercise price but retains, as long as its
obligations as a writer continues, the risk of loss should the price of the
underlying security decline. The writer of an option traded on an option
exchange in the United States has no control over the time when it may be
required to fulfill the writer's obligation. Once an option writer has received
an exercise notice, it cannot effect a closing purchase transaction in order to
terminate its obligation under the option and must deliver the underlying
securities at the exercise price. If a put or call option is not sold when it
has remaining value, and if the market price of the underlying security, in the
case of a put, remains equal to or greater than the exercise price or, in the
case of a call, remains less than or equal to the exercise price, the investor
will lose its entire investment in the option. Also, when a put or call option
on a particular security is purchased to hedge against price movements in a
related security, the price of the put or call option may move more or less
than the price of the related security. Furthermore, there can be no assurance
that a liquid market will exist when an investor seeks to close out an option
position. If trading restrictions or suspensions are imposed on the options
markets, an investor may be unable to close out a position.
Because swap agreements are two-party contracts and may have terms of greater
than seven days, such agreements may be considered to be illiquid. Moreover, an
investor bears the risk of loss of the amount expected to be received under a
swap agreement in the event of the default or bankruptcy of a swap agreement
counterparty. The swaps market is a relatively new market and is largely
unregulated, and it is possible that developments in the swaps market,
including potential government regulation, could adversely affect an investor's
ability to terminate existing swap agreements or to realize amounts to be
received under such agreements.
There are several risks associated with the use of futures and futures
options for hedging purposes. There can be no guarantee that there will be a
correlation between price movements in the hedging vehicle and in the portfolio
securities being hedged. An incorrect correlation could result in a loss on
both the hedged securities and the hedging vehicle so that the portfolio return
might have been greater had hedging not been attempted. There can be no
assurance that a liquid market will exist at a time when an investor seeks to
close out a futures contract or a futures option position. Most futures
exchanges and boards of trade limit the amount of fluctuation permitted in
futures contract prices during a single day; once the daily limit has been
reached on a particular contract, no trades may be made that day at a price
beyond that limit. In addition, certain of these instruments are relatively new
and without significant trading history. As a result, there is no assurance
that an active secondary market will develop or continue to exist. Lack of a
liquid market for any reason may prevent an investor from liquidating an
unfavorable position even though the investor would remain obligated to meet
margin requirements until the position is closed.
All of the registered investment companies in which the Funds invest may, if
their managers believe that the currency of a particular foreign country may
suffer or enjoy a substantial movement against another currency, enter into a
forward contract to sell or buy the former foreign currency (or
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another currency that acts as a proxy for that currency). There can be no
assurance, however, that this strategy will be successful as currency movement
can be difficult to predict. There are certain markets where it is not possible
to engage in effective foreign currency hedging. This may be true, for example,
for the currencies of various Latin American countries and other emerging
markets where the foreign exchange markets are not sufficiently developed to
permit hedging activity to take place.
Mortgage-related securities include securities that directly or indirectly
represent a participation in, or are secured by and payable from, mortgage
loans on real property, such as collateralized mortgage obligation residuals or
stripped mortgage-backed securities, and may be structured in classes with
rights to receive varying proportions of principal and interest. The yield to
maturity on an interest only class is extremely sensitive to the rate of
principal payments (including prepayments) on the related underlying mortgage
assets, and a rapid rate of principal payments may have a material adverse
effect on an investor's yield to maturity from these securities. Early
repayment of principal on some mortgage-related securities (arising from
prepayments of principal due to the sale of the underlying property,
refinancing or foreclosure, net of fees and costs which may be incurred) may
expose the Fund to a lower rate of return upon reinvestment of principal.
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INVESTMENT ADVISORS
State Street has retained the services of various Investment Advisors to
advise it with respect to its investment responsibility with respect to several
Funds. Each Investment Advisor recommends to State Street investments and
reinvestments of the assets allocated to it in accordance with the investment
policies of the respective Funds. State Street exercises discretion with
respect to the selection and retention of the Investment Advisors and may
remove upon consultation with ABRA an Investment Advisor at any time. State
Street may also change at any time the allocation of assets among Investment
Advisors to a single Fund, subject to consultation with ABRA.
The Investment Advisors are:
BANKERS TRUST COMPANY. Advisor to the index portion of the Growth Equity
Fund, Bankers Trust began business in 1903 as a trust company, became a
commercial bank in 1917 and is now one of the largest commercial banks in the
United States with over 15,000 employees in more than 50 countries. Its holding
company, Bankers Trust 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 U.S.
Investment Management Group ("USIM") is the firm's primary provider of asset
management services. Since the 1930's, USIM 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 September 30, 1998,
Bankers Trust managed approximately $338 billion in assets for institutional
and individual clients worldwide (of which approximately $268 billion was
managed by USIM).
BARCLAY'S GLOBAL INVESTORS. Anticipated future advisor to the index portion
of the Intermediate Bond Fund, Barclay's Global Investors is located at 45
Fremont Street, San Francisco, California 94105. As of December 31, 1995, Wells
Fargo Nikko Investment Advisors became a part of Barclay's Global Investors, an
indirect subsidiary of Barclays PLC, one of the United Kingdom's largest
companies and one of the world's foremost providers of financial services.
Barclay's Global Investors is responsible for managing or providing investment
advice for assets aggregating in excess of $504 billion.
CAPITAL GUARDIAN TRUST COMPANY. Advisor to the equity portion of the Balanced
Fund, and to the Growth Equity Fund and the Aggressive Equity Fund, Capital
Guardian Trust Company, a wholly-owned subsidiary of The Capital Group
Companies, Inc., is a California state chartered trust company incorporated in
1968. Its principal place of business is 333 South Hope Street, Los Angeles,
California 90071. Capital Guardian Trust Company provides investment
management, trust and other fiduciary services to corporate and public employee
benefit accounts, nonprofit organizations and a number of personal clients. As
of September 30, 1998, it had approximately $68 billion in assets under its
management.
DRESDNER RCM GLOBAL INVESTORS LLC. Advisor to the Growth Equity Fund,
Dresdner RCM Global Investors is the institutional investment management arm of
the Dresdner Bank Group outside of Germany. Dresdner RCM Global Investors
established a global identity based on the integration of RCM Capital
Management based in San Francisco, Thornton and Co. based in London and
Hong Kong, the asset management business of Kleinwort Benson Management based
in London and Tokyo, and BIP Gestion in Paris. The firm has its global
headquarters at Suite 2900, Four Embarcadero Center, San Francisco, CA 94111,
with investment management, client servicing, and operations in the world's
primary financial centers. As of September 30, 1998, Dresdner RCM Global
Investors had over $54 billion of assets under management and Dresdner RCM
Global Investors LLC, the U.S. operation of Dresdner RCM Global Investors, had
approximately $29 billion of assets under management.
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LINCOLN CAPITAL MANAGEMENT COMPANY. Advisor to the Growth Equity Fund,
Lincoln Capital Management is an Illinois sub-chapter S corporation. Its
principal place of business is 200 South Wacker Drive, Chicago, Illinois 60606.
As of September 30, 1998, the firm had approximately $56 billion of assets
under management.
MILLER, ANDERSON & SHERRERD. Advisor to the debt portion of the Balanced
Fund, Miller, Anderson & Sherrerd was established in 1969 and was acquired by
Morgan Stanley Group on January 3, 1996. Its principal place of business is One
Tower Bridge, West Conshohocken, Pennsylvania 19428. As of September 30, 1998,
Miller, Anderson & Sherrerd had approximately $66.1 billion of assets under
management, primarily for tax-exempt pension funds and profit-sharing plans,
Taft-Hartley plans, foundations and endowments.
PACIFIC INVESTMENT MANAGEMENT COMPANY. Anticipated future advisor to the
actively managed portion of the Intermediate Bond Fund, Pacific Investment
Management Company ("PIMCO") is an investment management company founded in
1971, and had approximately $148 billion in assets under management as of
September 30, 1998. PIMCO is a subsidiary of PIMCO Advisors L.P. ("PIMCO
Advisors"). The general partners of PIMCO Advisors are PIMCO Partners, G.P. and
PIMCO Advisors Holdings L.P. ("PAH"). PIMCO Partners, G.P. is a general
partnership between PIMCO Holding LLC, a Delaware limited liability company and
an indirect wholly-owned subsidiary of Pacific Life Insurance Company, and
PIMCO Partners LLC, a California limited liability company controlled by the
PIMCO Managing Directors. PIMCO Partners, G.P. is the sole general partner of
PAH. PIMCO's address is 840 Newport Center Drive, Suite 300, Newport Beach,
California 92660. PIMCO is registered as an investment adviser with the
Securities and Exchange Commission and as a commodity trading advisor with the
Commodity Futures Trading Commission.
ROWE PRICE-FLEMING INTERNATIONAL, INC. Anticipated future advisor to the
International Equity Fund, Rowe Price-Fleming International was incorporated in
Maryland in 1979 as a joint venture between T. Rowe Price Associates, Inc. ("T.
Rowe Price") and Robert Fleming Holdings Ltd. ("Flemings"). T. Rowe Price was
incorporated in Maryland in 1947 as a successor to the investment counselling
business founded by the late Thomas Rowe Price, Jr., in 1937. Flemings is a
diversified investment organization that participates in a global network of
regional investment offices in New York, London, Zurich, Geneva, Tokyo, Hong
Kong, Manila, Kuala Lumpur, Seoul, Taipei, Bombay, Jakarta, Singapore, Bangkok
and Johannesberg. Flemings was incorporated in 1974 in the United Kingdom as
successor to the business founded by Robert Fleming in 1873. As of September
30, 1998, Rowe Price-Fleming International managed approximately $28 billion of
assets. The common stock of Rowe Price-Fleming International is 50% owned by a
wholly-owned subsidiary of T. Rowe Price, 25% by a subsidiary of Flemings and
25% by a subsidiary of Jardine Fleming Group Limited ("Jardine Fleming"). Half
of Jardine Fleming is owned indirectly by Flemings and half is indirectly owned
by Jardine Matheson Holdings Limited. Rowe Price-Fleming International's U.S.
office is located at 100 E. Pratt Street, Baltimore, Maryland 21202.
SANFORD C. BERNSTEIN & CO., INC. Advisor to the Value Equity Fund, Sanford
Bernstein & Co. was founded in 1967. As of September 30, 1998, the firm had
approximately $74 billion in domestic, global and international equity,
balanced and fixed-income accounts for pension funds, endowments, trusts,
foundations, insurance companies, individuals and families. Independent and
staff owned, with 161 employees currently sharing in the profits, the firm has
a staff of 1,116, including 405 investment professionals.
SIT INVESTMENT ASSOCIATES, INC. Advisor to the Aggressive Equity Fund, Sit
Investment Associates is a Minnesota corporation formed in 1981. Its principal
place of business is 4600 Norwest Center, 90 South Seventh Street, Minneapolis,
Minnesota 55402. Sit Investment Associates provides
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investment advice, management and related services to mutual funds, tax exempt
investors, taxable investors and individual investors. As of September 30,
1998, Sit Investment Associates had approximately $5.7 billion of assets under
management. Eugene C. Sit is the controlling shareholder of Sit Investment
Associates.
Recommendations to buy and sell securities for the Funds are made by each
Investment Advisor in accordance with investment policies and restrictions of
the Funds and subject to the supervision of State Street. Investment
recommendations for the Funds are made independently from those of other
investment accounts managed by the Investment Advisors. Occasions may arise,
however, when the same investment recommendation is made for more than one
client's account. It is the practice of each Investment Advisor to allocate
such purchases or sales to be executed in connection with such recommendations
insofar as feasible among its several clients in a manner it deems equitable.
The principal factors which the Investment Advisors consider in making such
allocations are the relative investment objectives of the clients, the relative
size of the portfolio holdings of the same or comparable securities and the
then availability in the particular account of funds for investment. Portfolio
securities held by one client of an Investment Advisor may also be held by one
or more of its other clients. When two or more of its clients are engaged in
the simultaneous sale or purchase of securities, transactions are allocated as
to amount in accordance with formulae deemed to be equitable as to each client.
There may be circumstances when purchases or sales of portfolio securities for
one or more clients will have an adverse effect on other clients.
Transactions on stock exchanges on behalf of the Funds involve the payment of
negotiated brokerage commissions. There is generally no stated commission in
the case of securities traded in the over-the-counter markets, but the price of
those securities includes an undisclosed commission or mark-up. The cost of
securities purchased from underwriters includes an underwriting commission or
concession, and the prices at which securities are purchased from and sold to
dealers include a dealer's mark-up or mark-down.
In executing portfolio transactions, the Investment Advisors seek the most
favorable execution available. The agreements between State Street and the
Investment Advisors provide that, in assessing the best overall terms available
for any transaction, the Investment Advisor may consider factors it deems
relevant, including the brokerage and research services, as those terms are
defined in section 28(e) of the Securities Exchange Act of 1934, as amended,
provided to the Funds, viewed in terms of either that particular transaction or
the broker or dealer's overall responsibilities to the Fund.
State Street will periodically review the brokerage commissions paid by the
Funds to determine if the commissions paid over representative periods of time
were reasonable in relation to the benefits inuring to each Fund. It is
possible that certain of the services received from a broker or dealer in
connection with the execution of transactions will primarily benefit one or
more other accounts for which the Investment Advisor exercises discretion, or a
Fund other than that for which the transaction was executed. Conversely, any
given Fund may be the primary beneficiary of the service received as a result
of portfolio transactions effected for such other accounts or Funds. The fees
of the Investment Advisors are not reduced by reason of receipt of such
brokerage and research services.
STRUCTURED PORTFOLIO SERVICE
INVESTMENT OBJECTIVE. The Structured Portfolio Service provides investment
diversification by utilizing the Funds available to the Program. The
Conservative, Moderate and Aggressive portfolios offer three distinct
approaches to diversifying investments in the Program. Each portfolio has a
different investment strategy and represents different risk and reward
characteristics that reflect an
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investor's tolerance for investment risk. THERE CAN BE NO ASSURANCE THAT ANY OF
THE PORTFOLIOS OF THE STRUCTURED PORTFOLIO SERVICE WILL ACHIEVE ITS INVESTMENT
OBJECTIVE. The portfolios utilize seven of the Program's Funds: the Stable
Asset Return Fund, the Intermediate Bond Fund, the Value Equity Fund, the
Growth Equity Fund, the Index Fund, the Aggressive Equity Fund and the
International Equity Fund. For information regarding the investment objectives,
guidelines and restrictions of each of the above Funds, refer to the
description of such Funds in this prospectus.
STRATEGY. While there can be no guarantee, the overall volatility of the
three portfolios may be reduced by spreading investments over several types of
assets. However, the volatility of the Aggressive Portfolio may be greater than
that of the other two portfolios. As prices of stocks and bonds may respond
differently to changes in economic conditions and interest rate levels, a rise
in bond prices, for example, could help offset a fall in stock prices. Short-
term securities, which are
held in varying percentages by all the Funds, have a stabilizing influence in
comparison to stocks since their price fluctuations are expected to be small.
In addition, the income provided by bonds and money market securities is
expected to contribute positively to a portfolio's total return, cushioning the
impact of price declines or enhancing the effect of price increases.
The Conservative Portfolio emphasizes shorter-term and fixed-income
securities and is intended for investors with lower risk tolerance who seek
returns based primarily on higher current investment income. Funds in the
Conservative Portfolio are allocated as follows:
<TABLE>
<S> <C>
Stable Asset Return Fund............................................... 30%
Intermediate Bond Fund................................................. 35%
Value Equity Fund...................................................... 7%
Growth Equity Fund..................................................... 7%
Index Equity Fund...................................................... 14%
International Equity Fund.............................................. 7%
</TABLE>
The Moderate Portfolio takes a more balanced approach (in comparison to the
Conservative Portfolio) and is intended for investors who seek returns based
upon relatively stable investment income but who also desire an increased
potential for growth. Its investments are allocated as follows:
<TABLE>
<S> <C>
Stable Asset Return Fund............................................... 10%
Intermediate Bond Fund................................................. 30%
Value Equity Fund...................................................... 11%
Growth Equity Fund..................................................... 11%
Index Equity Fund...................................................... 23%
International Equity Fund.............................................. 15%
</TABLE>
The Aggressive Portfolio emphasizes stocks and is intended for investors who
have a higher degree of risk tolerance and seek capital appreciation. Its
investments are allocated as follows:
<TABLE>
<S> <C>
Intermediate Bond Fund................................................. 15%
Value Equity Fund...................................................... 15%
Growth Equity Fund..................................................... 15%
Index Equity Fund...................................................... 30%
Aggressive Equity Fund................................................. 5%
International Equity Fund.............................................. 20%
</TABLE>
Allocations of investor funds to the portfolios of the Structured Portfolio
Service are readjusted by State Street on the first Business Day of each month
to maintain the percentage allocations indicated above.
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CERTAIN RISK FACTORS. For information and risk factors associated with each
of the Funds utilized in the Structured Portfolio Service, refer to the
descriptions in this prospectus for each particular Fund.
VALUATION OF INVESTOR'S INTEREST. Units in the portfolios of the Structured
Portfolio Service are valued based upon the collective values of the Units of
the included Funds credited to an investor's account in the Structured
Portfolio Service.
LIQUIDITY AND TRANSFERS. Transfers to or from any of the three portfolios
may be made on any Business Day. See "Transfers Between Investment Options and
Withdrawals."
PERFORMANCE INFORMATION. The Structured Portfolio Service may, from time to
time, report the value of a Unit in each of the portfolios. Such value will be
determined based on historical results and will not be intended to indicate
future performance. A recorded message providing current values for Units in
each portfolio in the Structured Portfolio Service is available at (800) 348-
2272.
SELF-MANAGED ACCOUNTS
As an additional Investment Option under the Program, State Street makes
available a Self Managed Account. The Self Managed Account is available for
all plans unless the Employer elects not to make it available for their plan.
The Self-Managed Account is not available as an Investment Option for
individually designed plans for which State Street provides aggregate
recordkeeping services. State Street permits investors whose plan includes the
Self-Managed Account as an Investment Option to authorize a third party
"investment manager," as defined in Section 3(38) of ERISA, to trade such
investor's Self-Managed Account. Assets contributed to a Self Managed Account
may be invested in a wide variety of publicly traded debt and equity
securities and mutual funds through a self managed brokerage account. Certain
investments, such as options, futures, commodity contracts, foreign securities
(other than American Depositary Receipts), commercial paper, bank investments
and insurance investments, cannot be made in a Self-Managed Account. For more
information regarding the Self Managed Account, please call (800) 348- 2272.
Self-Managed Accounts are not included in the Collective Trust and are not
registered under the Securities Act. They are described in this prospectus for
information purposes only.
EQUITABLE REAL ESTATE ACCOUNT
Certain assets contributed to the Program prior to January 1, 1992 are held
by The Equitable Life Assurance Society of the United States ("Equitable
Life") in the Equitable Real Estate Account. Such assets will remain invested
in this account until they are transferred to another Investment Option
available under the Program. Restrictions apply to withdrawals and transfers
from the Equitable Real Estate Account that may delay a withdrawal or transfer
for a significant period of time following a withdrawal or transfer request.
No transfers or contributions to the Equitable Real Estate Account are
permitted.
State Street has no control over the management of assets held by Equitable
Life and is not responsible for the investment of such assets or the
performance by Equitable Life and ERE Yarmouth, Inc. of their obligations
under the Program with respect to such assets. State Street, however,
maintains the recordkeeping on the sale of such account and provides notice to
investors, when appropriate. Interests in the Equitable Real Estate Account
are not registered under the Securities Act and are described in this
prospectus for information purposes only. Information relating
46
<PAGE>
to assets held in the Equitable Real Estate Account may be obtained by writing
or calling State Street. See "Contributions and Investment Selection--
Additional Information."
TRANSFERS BETWEEN INVESTMENT OPTIONS AND WITHDRAWALS
Investors may direct State Street to transfer amounts between Investment
Options at any time, subject to the terms and restrictions applicable to each
Investment Option. A specified whole percentage, whole dollar amount or the
total investment in an Investment Option may be transferred. Transfers will be
made on the day State Street receives properly authorized instructions from the
investor, provided that such instructions are received not later than 4:00 p.m.
Eastern time on a Business Day. Transfer requests received after that hour will
be made on the next Business Day. Transfers involving Funds are effected based
upon the relative Unit values of the Funds, as determined at the close of the
regular trading session of the New York Stock Exchange on the effective date of
the transfer. There is no fee for transfers between Investment Options.
The Equitable Real Estate Account contains certain transfer restrictions that
may delay a withdrawal or transfer for a significant period of time following a
withdrawal or transfer request. No transfers to the Equitable Real Estate
Account are permitted. Additional information relating to the Equitable Real
Estate Account may be obtained by writing or calling State Street.
Investors may request telephone transfer service either via the Voice
Response Unit or through a customer service representative. Investors should
call (800) 348-2272 in order to make telephone transfers. ALL TELEPHONE
TRANSFER INSTRUCTIONS ARE RECORDED. BY AUTHORIZING TELEPHONE TRANSFERS, THE
INVESTOR CONSENTS TO SUCH RECORDING. State Street will accept telephone
transfer instructions from any person who provides the correct identifying
information. Consequently, this service may entail additional risks. State
Street reserves the right, subject to the approval of ABRA, to cancel telephone
transfer services at any time without advance notice to investors. Investors
may also complete a Request to Transfer Between Investment Options form, which
should be sent by the Employer to State Street Bank and Trust Company, P.O. Box
9109, Boston, Massachusetts 02209-9109.
State Street reserves the right to suspend withdrawals or transfers to or
from any Fund, portfolio of the Structured Portfolio Service or Self-Managed
Account at any time during which any market or stock exchange on which a
significant portion of the investments of a Fund, a portfolio of the Structured
Portfolio Service or a Self-Managed Account are quoted is closed (other than
for ordinary holidays) or during which dealings thereon are restricted or
suspended. In addition, State Street reserves the right to suspend withdrawals
or transfers to or from any Fund at any time during which (a) there exists any
state of affairs, which, in the reasonable opinion of State Street, constitutes
an emergency as a result of which disposition of the assets of a Fund would not
be reasonably practicable or would be seriously prejudicial to the holders of
Units of a Fund, (b) there has been a breakdown in the means of communication
normally employed in determining the price or value of any of the investments
of a Fund, or of current prices on any stock exchange on which a significant
portion of the investment of such a Fund are quoted, or when for any reason the
prices or values of any investments owned by such Fund cannot reasonably be
promptly and accurately ascertained, or (c) the transfer of funds involved in
the realization or acquisition of any investment cannot, in the reasonable
opinion of State Street, be effected at normal rates of exchange. In addition,
transfers and withdrawals from the Stable Asset Return Fund may be suspended or
limited temporarily in the event that the amount of liquid assets in the Stable
Asset Return Fund are insufficient to satisfy all withdrawal or transfer
requests.
With respect to the Stable Asset Return Fund, State Street will utilize a
tiered liquidity structure in the following sequence to satisfy withdrawal and
transfer requests: cash flows (contributions, transfers-in, maturities and
interests); and sales of Short-Term Investment Products. In the unlikely event
that the amount of liquid assets held by the Stable Asset Return Fund is
insufficient to satisfy all
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<PAGE>
withdrawal and transfer requests immediately, State Street may be forced to
limit or suspend withdrawals and transfers from the Stable Asset Return Fund.
In such cases, withdrawals by investors from the Program because of death,
disability, retirement or termination of employment will be given priority and
will be honored from available liquid assets, including the benefit responsive
features of the investment contracts, in the order in which withdrawal
instructions were received by State Street. Subject to any applicable legal
requirements, after all such withdrawals have been effected, transfers to
other allowable Investment Options will be honored from available liquid
assets in the order that transfer instructions were received by State Street.
The length of any suspension or limitation on withdrawals or transfers could
vary and would depend, on the one hand, on the aggregate amount of assets that
investors have requested to withdraw or transfer and, on the other hand, on
the rate at which assets become available for withdrawal or transfer through
the exercise of permitted withdrawal rights under the investment contracts and
through the maturity of investment contracts and the rate at which additional
moneys are contributed to the Stable Asset Return Fund by investors. See
"Stable Asset Return Fund."
THE PROGRAM
The Program is sponsored by ABRA, an Illinois not-for-profit corporation
organized by the American Bar Association (the "ABA") to sponsor retirement
programs for self-employed individuals and employers who are members or
associates of the ABA or certain affiliated organizations. The Program is a
comprehensive retirement program that provides employers who adopt the Program
with tax-qualified employee retirement plans, a variety of Investment Options
and related recordkeeping and administrative services.
ELIGIBILITY
Sole practitioners, partnerships and professional corporations engaged in
the practice of law may adopt the Program if they or at least one of their
partners or shareholders, as the case may be, is a member or associate of the
ABA or of a state or local bar association that is represented in the ABA's
House of Delegates. These bar associations may also adopt the Program for
their own employees subject to certain limitations imposed by the Internal
Revenue Code. An organization that is not engaged in the practice of law may
also be eligible to adopt the Program if it is closely associated with the
legal profession, receives the approval of ABRA, and has, as an owner or a
member of its governing board, a member or associate of the ABA. State
Street's retirement program specialists are available to help individuals and
organizations determine whether they are eligible to adopt the Program.
ABA MEMBERS TRUSTS
Assets contributed under master plans are held by State Street as trustee of
the American Bar Association Members Retirement Trust. Assets invested through
individually designed plans are held under the American Bar Association
Members Pooled Trust for Retirement Plans. Assets contributed to each of these
trusts are invested in the Investment Options available under the Program in
accordance with the instructions of the person or entity vested with
responsibility for determining the investment allocation of the assets of each
plan. In accordance with the Plans, assets of the trusts are held for the
benefit of the Participants. The Internal Revenue Service has determined each
of the American Bar Association Members Retirement Trust and the American Bar
Association Members Pooled Trust for Retirement Plans to be tax-exempt trusts
under section 501(a) of the Internal Revenue Code.
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ADOPTION OF PROGRAM
Eligible Employers who elect to participate in the Program may do so either
through their own individually designed plans or by adopting one or both of
two ABA Members Plans sponsored by ABRA. The ABA Members Plans are master
plans designed to qualify under section 401(a) of the Internal Revenue Code.
Under the American Bar Association Members Retirement Plan, an Eligible
Employer may adopt a profit sharing plan, a money purchase pension plan or a
target benefit plan. The Internal Revenue Service has determined that the
available forms of the ABA Members Plans are qualified under section 401(a) of
the Internal Revenue Code for use by employers for the benefit of their
employees.
To adopt either the American Bar Association Members Defined Benefit Plan or
the American Bar Association Members Retirement Plan, an Eligible Employer
must complete and execute a participation agreement. The participation
agreement contains the basic features that must be considered in designing an
appropriate master plan under the Program and effects the Eligible Employer's
adoption of the American Bar Association Members Retirement Trust to hold
assets of the master plan. State Street's retirement program specialists will
assist Eligible Employers in the preparation of a participation agreement.
However, State Street is not authorized to give tax or legal advice and
Eligible Employers should consult with their tax advisor prior to executing a
participation agreement. Depending on the form of participation agreement
adopted by an Eligible Employer and the other retirement plans, if any,
maintained by the Eligible Employer, it may be necessary to apply to the
Internal Revenue Service for a determination of the qualified status of the
master plan as adopted by the Eligible Employer.
An Eligible Employer that maintains an individually designed plan that is
qualified under section 401(a) of the Internal Revenue Code may also
participate in the Program and make use of the Investment Options available
under the Program by causing a participation agreement for the American Bar
Association Members Pooled Trust for Retirement Plans to be executed by the
trustee of the individually designed plan. Such trustee must demonstrate to
State Street that the participating trust is exempt from tax under section
501(a) of the Internal Revenue Code and that the related individually designed
plan is qualified under section 401(a) of the Internal Revenue Code. State
Street's retirement program specialists will assist in preparation of a
participation agreement. However, State Street is not authorized to give tax
or legal advice and Eligible Employers and the trustees of an individually
designed plan should consult with their tax advisor prior to executing a
participation agreement. Only plans qualified under Section 401(a) of the
Internal Revenue Code may participate in the Program. Eligible Employers
should note that, due to certain sections and regulations of the Internal
Revenue Code, limitations are placed on the amount of assets that may be
contributed to the plans, as well as on withdrawals from the plans.
For copies of the appropriate participation agreements and further
information concerning the steps to be taken to adopt the Program, call State
Street at (800) 826-8901 between 9:00 a.m. and 5:00 p.m. Eastern time or write
to State Street Bank and Trust Company, P.O. Box 2236, Boston, Massachusetts
02107-2236.
STATE STREET
State Street provides certain administrative and recordkeeping services
required by the Program. As trustee of the Collective Trust, State Street is
responsible for the operation and management of Funds under the Collective
Trust. State Street also acts as the sole trustee of each of the ABA Members
Trusts.
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State Street's principal offices are located at 225 Franklin Street, Boston,
Massachusetts 02110. State Street is a wholly-owned subsidiary of State Street
Corporation, a Massachusetts corporation and a holding company registered
under the Federal Bank Holding Company Act of 1956. State Street is a highly
capitalized Massachusetts trust company, and as of the period ending September
30, 1998, State Street and its affiliates had a total risk-based capital ratio
of 14.6%, which is far in excess of applicable regulatory requirements. As of
September 30, 1998, State Street together with its affiliates had over
$4.3 trillion of assets in trust or under custody and had over $422 billion of
assets under management. State Street together with its affiliates is the
largest mutual fund custodian in the world, the largest master trust custodian
bank and the largest custodian of international/global assets for U.S. pension
funds.
The following is a biographical summary of the experience of each of the
officers of the Collective Trust:
JAMES S. PHALEN. Mr. Phalen is the President and Chief Executive Officer
of the Collective Trust and Executive Vice President and Division Head of
Retirement Investment Services, a part of State Street Global Advisors, a
division of State Street. From June 1989 to August 1992, Mr. Phalen, age
48, served as the President of Boston Financial Data Services, a subsidiary
of State Street. Mr. Phalen also serves as a director of Wellspring
Resources LLP.
NANCY P. ANTIN. Ms. Antin is the Vice President and Chief Financial
Officer of the Collective Trust, a Vice President of State Street and the
Director of ABRA Program Services. From January 1994 to June 1995, Ms.
Antin, age 39, was Vice President of ABRA Marketing and Client Services.
From June 1991 to January 1994, Ms. Antin was the Assistant Vice President
of ABRA Client Services. Prior to coming to State Street, Ms. Antin was
employed by IBM in Marketing and Administrative Management.
SUSAN C. DANIELS. Ms. Daniels is the Treasurer and Chief Accounting
Officer of the Collective Trust and a Vice President of State Street for
ABRA Program Services, Retirement Investment Services, a part of State
Street Global Advisors, a division of State Street. Prior to joining State
Street, Ms. Daniels, age 40, was Vice President of Internal Control and
Compliance at First Data Investor Services Group. From April 1990 to
November 1993, Ms. Daniels was Director of Internal Audit at Boston
Financial Data Services, a subsidiary of State Street.
RESOLUTION 2000
State Street Bank and Trust Company, the trustee of the Collective Trust, is
responsible for the operation and management of the investment options of the
American Bar Association Members Retirement Program. As a subsidiary of State
Street Corporation, State Street Bank and Trust Company is subject to the
oversight of State Street Corporation and its comprehensive Resolution 2000
program. The Resolution 2000 program is described below.
PROGRAM SCOPE AND OVERSIGHT. The approaching Year 2000 presents companies in
all industries with a myriad of challenges to ensure compliance of its
computer systems and processes. These challenges stem from a once-common
programming standard using two-digit years for date fields contained in
computer programs and related data. Year-2000 computer system malfunctions
could disrupt the administration of the American Bar Association Members
Retirement Program. Commencing in 1996, State Street Corporation assessed the
impact of the upcoming Year 2000 on its operations and has developed a
comprehensive program, Resolution 2000, to address the related issues.
This program covers six major areas of Year 2000 compliance: Information
Technology ("IT") Infrastructure, Global Data Networks, Core Application
Software, Business Area Supported Applications, Facilities, and Third-Party
Suppliers. Information Technology Infrastructure, Global Data Networks and
Core Application Software make up what is commonly referred to as Information
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Technology Systems. More specifically, Information Technology Infrastructure is
the hardware and system software required to support the Core Application
software, which consists of State Street Corporation's Custody, Accounting,
Deposits, Loans, Cash Management and Investment Management systems. Global Data
Networks consist of the wide and local area networks and telephone/PBX systems.
Business Area Supported Applications are those desktop applications developed
and supported by non-IT areas, and includes office equipment such as fax
machines. Facilities is the embedded technology used throughout State Street
Corporation's offices, for example uninterrupted power supply, fire alarms,
security and heating and air-conditioning systems. Third-Party Suppliers refers
to all external parties that have the potential to impact State Street
Corporation's ability to deliver compliant products and services, such as
vendors, service providers, subcustodian banks, counterparties, business
partners, and customers.
State Street Corporation engaged a consulting firm at the onset of the
Resolution 2000 program to assist in the area of program management, and to
provide technical professional resources to the program as required. This firm
was selected for its recognized leadership in management of large-scale
information technology programs and for its established methodology. This
methodology forms the basis for State Street Corporation's activities with its
consultant in applying the Resolution 2000 program to the Core Application
Software area. Under this program, there is a phased approach followed with
each element of the program which includes: taking inventory of potentially
date sensitive items; assigning a business risk relating to each item;
assessing the compliance status of each item; taking corrective action to
renovate, replace, retire, upgrade or outsource to achieve compliance;
validating compliance through several levels of testing (regression, internal
and external Year-2000 testing); and developing and validating business
resumption contingency plans for each critical business function as required.
All major areas of the Resolution 2000 program are performing these activities.
A central program management office, global compliance teams, and a corporate
governance/oversight structure support the Resolution 2000 program. Program
updates, progress reports, and critical matters are regularly communicated to
senior management and the Board of Directors.
The Resolution 2000 program activities are incorporated into State Street
Corporation's corporate risk management functions. In addition, these
activities are subject to ongoing assurance reviews, which include internal
audits, regulatory examinations performed by the Federal Reserve, and
compliance procedures performed by external auditors in connection with third-
party reviews and financial statement audits.
STATE OF READINESS. At September 30, 1998, the taking of inventory, risk
assessments and compliance assessment work had been completed by State Street
Corporation and corrective actions and internal Year-2000 testing were well
underway. External testing with key industry organizations such as the Federal
Reserve, Depository Trust Corporation, and Society for Worldwide Interbank
Financial Telecommunications (SWIFT), had commenced with all tests to date
successfully completed. External testing with subcustodians began in the fourth
quarter of 1998 and customer testing will begin in the first quarter of 1999.
State Street Corporation currently anticipates that its Year-2000 compliance
inventory, assessment, correction and internal testing efforts which commenced
at the beginning of 1996 will be substantially completed by December 31, 1998
with all internal testing being completed by March 31, 1999. External testing
will be a key focus in the first half of 1999 and is expected to be complete in
the third quarter of 1999. State Street Corporation's Year-2000 contingency
planning program is underway, leveraging the strength of State Street
Corporation's business resumption contingency plans. Year-2000 contingency plan
development is expected to be complete by the second quarter of 1999.
Validation of these plans will be completed in the third quarter of 1999.
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Progress as of September 30, 1998 is as follows:
<TABLE>
<CAPTION>
REGRESSION INTERNAL
TESTING AND YEAR-
PRODUCTION 2000
CORRECTION IMPLEMENTATION TESTING
---------- -------------- --------
<S> <C> <C> <C>
IT Infrastructure............................ 95% 90% 90%
Global Data Networks......................... 95% 50% 95%
Core Application Software.................... 90% 80% 50%
Business Area Supported...................... 70% 30% 45%
Applications.................................
Facilities................................... 85% 85% 70%
</TABLE>
Progress at September 30, 1998 related to the Third-Party Suppliers, which
could impact State Street Corporation's ability to deliver compliant products
and services, is as follows:
Internal communications with vendors to obtain information on the
compliance status of the products and services provided to State Street
Corporation has been completed. Key vendors have been asked to present
updates to State Street Corporation on their compliance programs and
related progress. Eighty percent have been assessed and necessary action
plans are being developed for issues identified in these assessments of key
vendors. With respect to those products and services that are considered
high-risk, State Street Corporation has substantially completed development
of contingency remediation plans.
Year-2000 compliance has been incorporated into State Street
Corporation's existing due diligence procedures performed with business
partner and counterparty relationships. Year-2000 assessments of business
partners has been completed, and the current and future focus has turned to
implementation of remediations and contingency planning. Year-2000
counterparty assessments are substantially complete, in line with the
recommendations of the Federal Financial Institutions Examination Council
(FFIEC).
Year-2000 compliance has been incorporated into the existing due
diligence for its subcustodian bank network. In addition, questionnaires
have been sent to the subcustodians focusing on the adequacy of its
compliance program and implementation plans, including testing with State
Street Corporation. Subcustodian contingency planning efforts aimed at
identifying alternative subcustodian banks in each of State Street
Corporation's markets is near completion. Test planning activities are
currently underway, and live testing is expected to begin in the fourth
quarter of 1998.
Certain IT projects have been delayed due to resources committed to the
Resolution 2000 program. The impact of these delays is not expected to have a
material adverse impact on the American Bar Association Members Retirement
Program.
CONTINGENCY PLANS. State Street Corporation cannot control the success of
each third party's Year-2000 compliance program. In instances where the risk of
Year-2000 compliance failure is high and there is potential for not providing
or not receiving a compliant product, or if scheduled delivery is beyond an
acceptable date, State Street Corporation will adopt business contingency
plans. To mitigate the effects of its or significant customers' or
supplier/vendors' potential failure to remediate the Year-2000 issue in a
timely manner, State Street Corporation would take reasonable contingency
actions, which may include implementing alternatives, using manual workarounds
and event management. The ultimate goal in developing contingency plans is to
have an uninterrupted flow of information between State Street Corporation and
third-party providers in the Year 2000 and beyond. State Street Corporation
expects to have contingency plans in place by the second quarter of 1999. If it
becomes necessary for State Street Corporation to take these corrective
actions, it is uncertain, until the contingency plans are implemented, whether
this would result in significant delays in business operations or have a
material adverse effect on State Street Corporation.
52
<PAGE>
COSTS. Annual Resolution 2000 program costs are absorbed within normal
spending levels of State Street Corporation. State Street Corporation's
management currently estimates the aggregate cost of the Resolution 2000
Program to be less than 2% of its total operating expenses for the five-year
period 1996-2000. As of September 30, 1998, cumulative program expenditures
were $69 million of which $14 million was incurred during the third quarter of
1998. Such costs are expensed as incurred and include dedicated staff,
equipment, consultants, and other expenses. Costs related to the American Bar
Association Members Retirement Program are included in State Street
Corporation's estimate.
AMERICAN BAR RETIREMENT ASSOCIATION
As sponsor of the Program, ABRA is responsible for the design of the
Program, the maintenance of the American Bar Association Members Defined
Benefit Plan, the American Bar Association Members Retirement Plan, the
American Bar Association Members Retirement Trust and the American Bar
Association Members Pooled Trust for Retirement Plans, and the designation of
investment options to be made available under the Program. Pursuant to an
agreement between ABRA and State Street, as of January 1, 1999, ABRA has
engaged State Street to provide administrative and investment services and to
make the Investment Options available under the Program for a four-year term.
ABRA may terminate its agreement with State Street prior to the end of its
term upon six months written notice. State Street may terminate its agreement
with ABRA prior to the close of business on December 31, 2002 in certain
circumstances, including the offering to Employers by ABRA of any investment
product that is not offered pursuant to the terms of the agreement. State
Street may terminate its agreement with ABRA at the end of any quarter after
the close of business on or after December 31, 2002 upon 12 months written
notice. ABRA has also appointed State Street as trustee of each of the ABA
Members Trusts.
ABRA retains the right to make recommendations to State Street regarding the
addition or deletion of Funds as Investment Options. ABRA, with or without the
assistance of a consultant, will monitor the performance of State Street and
its Investment Advisors and may make recommendations to State Street regarding
the engagement and termination of Investment Advisors. State Street is
required to give full good faith consideration to all such recommendations
from ABRA, although State Street retains exclusive management and control over
Funds and Investment Advisors. ABRA has certain rights to direct State Street
to establish or terminate Investment Options that are not Funds. In specified
cases when State Street fails to satisfy minimum investment performance
standards, ABRA also has certain additional rights to discontinue a Fund as an
Investment Option or to direct the establishment of another Investment Option
that is not a Fund.
State Street and ABRA have reviewed and negotiated the terms and conditions
of the documents establishing the respective rights and obligations of the
parties, including fees payable to State Street in connection with the
Program. ABRA will monitor State Street's administration and marketing of the
Program and will approve the hiring by State Street of certain other major
service providers, such as actuaries.
CONTRIBUTIONS AND INVESTMENT SELECTION
CONTRIBUTIONS
The person or entity responsible for allocating the assets of the plan among
the Investment Options (the "Investor") may be either the Participant, the
Employer or the plan trustee depending on the terms of the plan. In the case
of the American Bar Association Members Retirement Plan, the Participant is
the Investor and, generally, in the case of the ABA Defined Benefit Plan, the
Employer is the Investor. However, with respect to certain prior plan accounts
under the American Bar Association Members Defined Benefit Plan, the
Participant is the Investor. In the case of an
53
<PAGE>
individually designed plan, the Participant, Employer or plan trustee may be
the Investor. Employee-Investors may not send contributions directly to State
Street, but should direct all contributions through their Employer. All
contributions should be remitted from the Employer's business account.
Contributions may be made by check or money order payable to "State Street
Bank and Trust Company, Trustee" and should be sent to State Street Bank and
Trust Company, P.O. Box 9109, Boston, Massachusetts 02209-9109. Contributions
sent by registered or certified mail and items sent by overnight delivery
services that do not deliver to post office boxes should be sent to State
Street Bank and Trust Company, ABRA Program Services, Batterymarch Park III,
Quincy, Massachusetts 02169. Employers who wish to transmit contributions to
State Street by wire transfer should provide wire notification and a
contribution remittance form to State Street at least two Business Days before
funds are wired.
All contributions must be received by State Street from the Employer within
the time specified by applicable law and must be accompanied by proper
instructions as to the allocation of such contributions to Participants'
individual accounts or the plan account.
Contributions are credited on the day of receipt if they are accompanied or
preceded by proper allocation instructions and are received by 4:00 p.m.
Eastern time on a Business Day. Contributions received after that time will be
credited on the following Business Day. Remittance of a contribution which
State Street believes to be incorrect or failure to provide instructions as to
the particular Investor account to which a contribution should be deposited
may result in a delay in crediting contributions.
Contributions allocated to Funds or to any of the portfolios of the
Structured Portfolio Service are used to purchase Units in those Funds or in
the portfolios of the Structured Portfolio Service at the per Unit values of
the Fund or the portfolios of the Structured Portfolio Service, calculated as
of the close of the regular trading session of the New York Stock Exchange on
the Business Day on which the contributions are credited. Contributions may
not be made directly to the Self-Managed Account.
ALLOCATION INSTRUCTIONS
Investors must provide instructions relating to how contributions are to be
invested either via the Voice Response Unit by calling (800) 348-2272 or by
completing the appropriate allocation instruction form. All allocation
instruction forms should be sent by the Employer to State Street Bank and
Trust Company, P.O. Box 9109, Boston, Massachusetts 02209-9109. If State
Street has received notice satisfactory to it that there is no Employer to
forward such instructions, State Street may accept such instructions directly
from non-Employer Investors. Investment instructions sent by registered or
certified mail and items sent by overnight delivery services that do not
deliver to post office boxes should be sent to State Street Bank and Trust
Company, ABRA Program Services, Batterymarch Park III, 3 Pine Hill Drive,
Quincy, Massachusetts 02169.
Investors may allocate contributions in whole percentages among any number
of Investment Options and may direct the allocation of employer contributions
in different percentages than employee contributions. Investment percentages
elected for employer contributions will apply to profit sharing, pension plan
and rollover contributions. If a Plan includes a 401(k) feature, the
investment percentages elected for employer contributions will also apply to
401(k) qualified non-elective contributions and all matching contributions.
Contributions may not be allocated directly to a Self-Managed Account, but
must first be allocated to one or more of the other available Investment
Options in the Collective Trust and then transferred to a Self-Managed
Account. See "Self-Managed Accounts." The allocation percentages elected for
employee contributions will automatically apply to both voluntary after-tax
contributions and 401(k) salary deferral contributions. Investors should make
sure that the percentages requested add up to 100% for each type of
contribution. To the extent that State Street does not receive what it
considers proper allocation instructions or if such instructions are unclear
or
54
<PAGE>
ambiguous, State Street will endeavor to obtain a clarification or correction
of the instructions. To the extent State Street has not received allocation
instructions for either employer or employee contributions, State Street will
allocate the assets to the Stable Asset Return Fund or to such other Fund as
may be designated by the Employer in the participation agreement or by notice.
If a transfer from an Investment Option is required for any reason and State
Street has not received allocation instructions, State Street will allocate
the assets to be transferred to the Stable Asset Return Fund or to such other
Fund as may be designated by the Employer in the participation agreement or by
notice.
To change allocation instructions, Investors should complete the change of
investment allocation form indicating new investment allocation instructions
in whole percentages, which should then be forwarded by the Employer to State
Street at the appropriate address set forth above or Investors may change such
allocations via the Voice Response Unit by calling (800) 348-2272.
Instructions become effective on the date of receipt, provided that State
Street receives them by 4:00 p.m. Eastern time on a Business Day. Investment
allocation instructions received after that time will become effective on the
following Business Day. Investment allocation instructions remain in effect
until State Street receives a subsequent request to change investment
allocations.
ADDITIONAL INFORMATION
Persons who are already Investors, Employers or Participants may obtain
administrative and investment forms or information relating to assets held in
the Equitable Real Estate Account or additional information by calling State
Street at (800) 348-2272 between 9:00 a.m. and 8:00 p.m Eastern time or by
writing to State Street Bank and Trust Company, P.O. Box 9109, Boston,
Massachusetts 02209-9109. Participants may also obtain such forms from their
Employers.
For information regarding enrollment in the Program, Eligible Employers may
call State Street at (800) 826-8901 between 9:00 a.m. and 5:00 p.m. Eastern
time or write to State Street Bank and Trust Company, P.O. Box 2236, Boston,
Massachusetts 02209-2236.
A recorded message providing current account information can be obtained by
calling State Street at (800) 348-2272.
55
<PAGE>
DEDUCTIONS AND FEES
PROGRAM EXPENSE FEE
A fee is paid to State Street and ABRA for their services in connection with
the Program. For all Investment Options other than the Self-Managed Account,
the fee is paid directly from the assets of the Funds or as a deduction from
amounts accruing on the Equitable Real Estate Account.
For the calendar year ending December 31, 1999, the program expense fee
payable to State Street is $7,450,000. This fee will accrue daily and be
payable monthly. After January 1, 2000, the program expense fee payable to
State Street will be based on the number of participants in the Program as
follows: The monthly fee will be one-twelfth of the sum of (i) $750,000 plus
(ii) $191 multiplied by the number of participants in the Program other than
active participants without account balances as of the last Business Day of the
immediately preceding month, plus (iii) $191 multiplied by the excess, if any,
of the number of active participants of the Program without account balances
over the number of such participants as of December 31, 1998. This fee will
accrue daily and be payable monthly.
Benefit payments under the Program generally are made by check. Within five
Business Days before the check is payable, funds for the payment of benefits
are transferred to a non-interest bearing account with State Street. There is
no separate fee charged for benefit payments; rather, State Street retains any
earnings attributable to outstanding benefit checks, which has been taken into
account in setting State Street's fees under the Program. The program expense
fee set forth above reflects a $300,000 reduction for earnings attributable to
outstanding benefit checks.
Effective January 1, 1999, the program expense fee payable to ABRA will be
based on the total assets in the Program (other than assets in Self-Managed
Accounts) at the following annual rates:
<TABLE>
<CAPTION>
VALUE OF RATE
PROGRAM ASSETS FOR ABRA
-------------- --------
<S> <C>
First $500 million............................................. .075%
Next $850 million.............................................. .065
Next $1.15 billion............................................. .035
Next $1.5 billion.............................................. .025
Over $4.0 billion.............................................. .015
</TABLE>
The fee will accrue daily and be payable to ABRA monthly based on the level
of assets in the Program as of the end of the last Business Day of the
preceeding month. The fee schedule set forth above may be increased only by
written notification of such increase to all Employers, and shall become
effective after a minimum of 60 days from such notice.
TRUSTEE, MANAGEMENT AND ADMINISTRATION FEES
A fee is paid to State Street for its management, administration and custody
of the assets in the Investment Options (other than Self-Managed Accounts and
Equitable Real Estate Accounts). This fee is accrued on a daily basis and paid
monthly from the assets of the Funds. Such trustee, management and
administrative fees attributable to the Funds held by the Structured Portfolio
Service are also accrued and paid from the Funds. Fees are payable at the
following annual rates:
<TABLE>
<CAPTION>
AGGREGATE VALUE OF ASSETS IN AGGRESSIVE EQUITY, BALANCED,
GROWTH EQUITY, INDEX EQUITY, INTERMEDIATE BOND, INTERNATIONAL
EQUITY, STABLE ASSET RETURN AND VALUE EQUITY FUNDS RATE
------------------------------------------------------------- ----
<S> <C>
First $1.0 billion................................................. .15 %
Next $1.8 billion.................................................. .058
Over $2.8 billion.................................................. .025
</TABLE>
SELF-MANAGED ACCOUNT FEES
Transaction fees for the purchase or sale of securities for the account of an
Eligible Investor are charged in accordance with the schedule of rates
communicated from time to time to Eligible Investors with Self-Managed
Accounts.
56
<PAGE>
INVESTMENT ADVISOR FEE
A fee is paid to each Investment Advisor based on the value of the assets
allocated to that Investment Advisor, as set forth below. These fees are
accrued on a daily basis and paid monthly from the assets of the Funds.
<TABLE>
<CAPTION>
VALUE OF ASSETS IN INTERMEDIATE
BOND FUND ALLOCATED TO PIMCO* RATE
------------------------------- -----
<S> <C>
First $25 million.................................................. .50 %
Next $25 million................................................... .375
Over $50 million................................................... .25
<CAPTION>
VALUE OF ASSETS IN INTERMEDIATE BOND FUND
ALLOCATED TO BARCLAY'S GLOBAL INVESTORS* RATE
----------------------------------------- -----
<S> <C>
First $.5 million.................................................. .60 %
Next $1.5 million.................................................. .40
Next $48 million................................................... .10
Next $25 million................................................... .06
Over $75 million................................................... .04
<CAPTION>
VALUE OF ASSETS IN
GROWTH EQUITY FUND ALLOCATED
TO LINCOLN CAPITAL MANAGEMENT RATE
----------------------------- -----
<S> <C>
First $20 million.................................................. .4675%
Next $130 million.................................................. .35
Next $350 million.................................................. .25
Next $500 million.................................................. .20
Over $1,000 million................................................ .15
</TABLE>
- --------
* During the time that the assets of the Intermediate Bond Fund and the
International Equity Fund are invested in shares of registered investment
companies, no separate investment advisory fees will be paid by the applicable
Funds. Such Funds, however, will indirectly bear their proportionate share of
the investment advisory fees and annual operating expenses payable by such
registered investment companies. See "Intermediate Bond Fund-- Investment
Advisors and Initial Investments in Registered Investment Companies," and
"International Equity Fund--Investment Advisor and Initial Investment in
Registered Investment Companies." In the most recent periods for which
information is available, the PIMCO Total Return Fund paid total asset
management and administration fees of .43%, the Masterworks Bond Index Fund
paid total asset management and administration fees of .23% and the T. Rowe
International Stock Fund paid total asset management and administration fees
of .85%. Such fees vary with the amount of assets held in such registered
investment companies and as a result of changes in the underlying fee
structure of such investment companies. However, program expense fees and
trustee, management and administrative fees are paid during the time that the
Funds are invested in such registered investment companies. Rowe Price-Fleming
International has separately agreed that in return for administrative services
provided by State Street with respect to the International Equity Fund, Rowe
Price-Fleming International shall pay State Street a .10% administrative fee
which is credited to the International Equity Fund.
57
<PAGE>
<TABLE>
<CAPTION>
VALUE OF ASSETS IN
BALANCED FUND ALLOCATED TO
MILLER, ANDERSON & SHERRERD RATE
--------------------------- ------
<S> <C>
First $25 million.................................................. .50 %
Next $50 million................................................... .25
Next $775 million.................................................. .15
Over $850 million.................................................. .125
<CAPTION>
VALUE OF ASSETS IN
VALUE EQUITY FUND
ALLOCATED TO SANFORD BERNSTEIN & CO. RATE
------------------------------------ ------
<S> <C>
First $10 million.................................................. .50 %
Next $10 million................................................... .40
Next $30 million................................................... .35
Next $50 million................................................... .30
Next $50 million................................................... .25
Next $50 million................................................... .225
Next $50 million................................................... .20
Next $50 million................................................... .175
Over $300 million.................................................. .15
<CAPTION>
VALUE OF ASSETS IN
GROWTH EQUITY FUND
ALLOCATED TO BANKERS TRUST COMPANY RATE
---------------------------------- ------
<S> <C>
First $100 million................................................. .075 %
Next $100 million.................................................. .0375
Over $200 million.................................................. .010
<CAPTION>
VALUE OF ASSETS IN
GROWTH EQUITY FUND
ALLOCATED TO DRESDNER RCM GLOBAL INVESTORS RATE
------------------------------------------ ------
<S> <C>
First $10 million.................................................. .70 %
Next $10 million................................................... .60
Next $20 million................................................... .50
Next $20 million................................................... .35
Next $40 million................................................... .30
Over $100 million.................................................. .25
<CAPTION>
VALUE OF ASSETS IN BALANCED FUND,
GROWTH EQUITY FUND AND
AGGRESSIVE EQUITY FUND
ALLOCATED TO CAPITAL GUARDIAN TRUST COMPANY* RATE
-------------------------------------------- ------
<S> <C>
First $20 million.................................................. .50 %
Next $30 million................................................... .35
Over $50 million................................................... .225
<CAPTION>
VALUE OF ASSETS IN
AGGRESSIVE EQUITY FUND
ALLOCATED TO SIT INVESTMENT ASSOCIATES RATE
-------------------------------------- ------
<S> <C>
First $10 million.................................................. 1.00 %
Next $10 million................................................... .70
Over $20 million................................................... .60
<CAPTION>
VALUE OF ASSETS IN
INTERNATIONAL EQUITY FUND
ALLOCATED TO ROWE PRICE-FLEMING INTERNATIONAL** RATE
----------------------------------------------- ------
<S> <C>
First $20 million.................................................. .75 %
Next $30 million................................................... .60
Over $50 million................................................... .50
</TABLE>
--------
* Investment Advisor fees payable to Capital Guardian Trust Company are
subject to a fee reduction equal to 5% of the aggregate Investment Advisor
fee payable to Capital Guardian Trust Company.
** See footnote on page 57.
58
<PAGE>
ORGANIZATIONAL EXPENSES
Expenses incurred in connection with the organization of the Stable Asset
Return Fund, the Intermediate Bond Fund, the Value Equity Fund, the Index
Fund, the International Equity Fund and the Structured Portfolio Service,
including state and federal securities law registration fees, legal and
accounting fees and expenses and printing costs, totaled approximately
$1,765,970. These expenses were allocated to the Funds based on net asset
value, were capitalized by each Fund and were amortized over the period
beginning September 1995 and ending September 1998.
FEE RECIPIENTS
The following information with respect to fees is based on the approximate
assets of the Program on September 30, 1998, which total $2,815,000,000. The
total includes $666,000,000 for the Stable Asset Return Fund, $116,000,000 for
the Intermediate Bond Fund, $373,000,000 for the Balanced Fund, $125,000,000
for the Value Equity Fund, $1,036,000,000 for the Growth Equity Fund,
$176,000,000 for the Index Fund, $259,000,000 for the Aggressive Equity Fund,
$60,000,000 for the International Equity Fund, and $4,000,000 for the
Equitable Real Estate Account. These fees vary based on the size of the Funds.
State Street in its capacity as administrator of the Program and manager of
the Funds would receive fees of $10,000,000 on an annual basis (exclusive of
certain non-recurring fees and the Structured Portfolio Service fee). ABRA
would receive fees of $1,400,000 on an annual basis in its capacity as sponsor
of the Program. Assuming the allocation of the assets of the Funds among the
Investment Advisors is as set forth above, the following advisory fees would
have been payable: Capital Guardian Trust Company -- $1,328,000 (after an
applicable fee discount of $70,000); Bankers Trust Company -- $117,000;
Lincoln Capital Management-- $821,000, Miller, Anderson & Sherrerd --
$388,000; Dresner RCM Global Investors -- $860,000; Sit Investment Associates
- -- $890,000; and Sanford Bernstein & Co.-- $408,000. In addition, based on
published fee schedules, the following anticipated Investment Advisors would
have received the following fees from registered investment companies into
which certain funds were invested: PIMCO-- $335,000; Rowe Price-Fleming
International -- $510,000 (before credit of a $60,000 administrative fee paid
to the International Fund by Rowe Price-Fleming International); and Barclay's
Global Investors-- $87,000.
ERISA AND FIDUCIARY OBLIGATIONS
Each Employer's plan and trust, as well as the American Bar Association
Members Retirement Trust, the American Bar Association Members Pooled Trust
for Retirement Plans and the Collective Trust, are subject to the requirements
of ERISA, and the underlying assets are considered ERISA plan assets. The
obligations imposed by ERISA apply to those persons who have discretionary
authority or control regarding the management or administration of ERISA plan
assets. Accordingly, each Employer, each trustee of an individually designed
plan, State Street, as trustee of the ABA Members Trusts and the Collective
Trust, ABRA and each Investment Advisor will be considered ERISA fiduciaries
to the extent that they exercise any discretionary authority or control over
plan assets.
Fiduciaries must manage ERISA plan assets consistent with the fiduciary
requirements set forth in Part 4 of Title I of ERISA, including the
requirement that (a) the investments satisfy the diversification standard for
a plan set forth in section 404(a) of ERISA, (b) the investments be prudent
and be in the best interests of a plan and its members and beneficiaries, (c)
the investment be permissible under the terms of the underlying plan and trust
documents, and (d) the plan not engage in a transaction described in section
406 of ERISA (commonly referred to as a "prohibited transaction"), unless an
exemption applies. Therefore, each Employer must determine that the Investment
Options meet the applicable fiduciary requirements of ERISA.
In determining whether an investment is prudent for purposes of ERISA, the
appropriate fiduciary for each plan who makes investment decisions should
consider all facts and circumstances,
59
<PAGE>
including, without limitation, whether the investment provides sufficient
liquidity in light of the foreseeable needs of the plan, and whether the
investment is reasonably designed, as part of the plan assets with respect to
which the fiduciary has investment duties, to further the purposes of the plan,
taking into consideration the risk of loss and the opportunity for gain or
other return associated with the investment. The assets of the Collective Trust
and the Funds will be invested in accordance with the investment policies and
objectives expressed herein and each Self-Managed Account will be invested in
accordance with the investment directions of the respective Participant,
Employer or plan trustee. None of State Street, ABRA and the Investment
Advisors has any responsibility for developing any overall investment strategy
of any plan. In addition, under ERISA, no plan fiduciary is liable for any loss
which results from the individual investment election of a Participant or
beneficiary to the extent that a plan and a particular transaction complies
with section 404(c) of ERISA and the Department of Labor regulations
thereunder.
As a fiduciary, State Street must manage the assets of the Collective Trust
consistent with the applicable fiduciary requirements of ERISA, including the
prudent man requirement, the exclusive benefit requirement and the prohibited
transaction rules. With respect to the prohibited transaction rules, State
Street intends to rely on several prohibited transaction class exemptions. In
addition, it is contemplated that State Street and the Investment Advisors will
each meet the requirements of a "qualified professional asset manager" as
defined in Prohibited Transaction Class Exemption 84-14, issued by the
Department of Labor.
BONDING. As a fiduciary, each Employer must secure adequate bonding as
required by section 412 of ERISA for every fiduciary of the plan and for every
person (other than for State Street personnel) who handles funds or property of
the plan (a "Plan official"). The bond must protect the plan against loss due
to acts of fraud or dishonesty by plan officials. The amount of the bond is
determined at the beginning of each plan year, and must be at least 10% of the
amount of the funds handled. The amount must, however, be at least $1,000, and
generally is not required to be more than $500,000.
ERISA SECTION 404(C)
IN GENERAL. The American Bar Association Members Retirement Plan is intended
to be a plan described in section 404(c) of ERISA and the Department of Labor
regulations thereunder. Each adopting Employer intends, by adopting the
American Bar Association Members Retirement Plan, to have section 404(c) of
ERISA apply to the plan as so adopted. Under section 404(c) of ERISA, a
Participant (or beneficiary) who exercises control over assets in his or her
plan account generally is not deemed to be a plan fiduciary, and persons who
are otherwise plan fiduciaries, including the adopting Employer, ABRA and State
Street may be relieved of ERISA fiduciary liability for any loss which are the
direct and necessary result of investment instructions given by the Participant
(or beneficiary). However, such relief may not be available for investments
made pursuant to the default provisions applicable to cases where a Participant
(or beneficiary) has not made an investment election.
The Department of Labor regulations under section 404(c) of ERISA describe
the standards for determining whether a plan, and a particular transaction, is
afforded this relief. The regulations define an "ERISA Section 404(c) plan" as
an individual account plan, such as the American Bar Association Members
Retirement Plan, that (i) provides participants (or beneficiaries) an
opportunity to exercise control over assets in their individual plan accounts,
and (ii) provides participants (or beneficiaries) an opportunity to choose,
from a broad range of investment alternatives, the manner in which some or all
of the assets in their accounts are invested. Set forth below is a summary of
the manner in which the American Bar Association Members Retirement Plan
satisfies the requirement of the regulations.
OPPORTUNITY TO EXERCISE CONTROL. The American Bar Association Members
Retirement Plan provides Participants (or beneficiaries) an opportunity to give
investment instructions to a fiduciary
60
<PAGE>
designated by the Employer, which is State Street unless the Employer
designates another fiduciary for this purpose. Participants (or beneficiaries)
also are provided (or have the opportunity to obtain) certain information
intended to enable them to make informed decisions as to available investment
alternatives. This information includes: (i) identification and description of
the investment options available under the plan, including a general
description of the investment objectives and risk and return characteristics of
each option; (ii) identification of any investment managers designated by the
Employer; (iii) a description of plan procedures under which Participants may
give investment instructions, including limitations on frequency or number of
directions; (iv) identification of certain transaction fees and expenses which
are charged to a Participant's account; (v) copies of prospectuses with respect
to any mutual fund where a Participant's account has no previous investment in
such option; and (vi) copies of certain materials (such as voting forms and
proxy information) necessary for a Participant to exercise pass-through voting,
tender and similar rights.
Upon request, certain additional information must be provided to Participants
by the Plan fiduciary designated by the Employer (or person or persons
designated by the Plan fiduciary to act on its behalf), and the Employer must
identify the name, address and phone number of such person or persons. For an
Employer which has not designated a fiduciary other than State Street for this
purpose, requests should be made to State Street Bank and Trust Company, ABRA
Program Services, P.O. Box 9109, Boston, MA 02209-9109 or by calling the ABRA
Customer Service Line at State Street at (800) 348-2272. This information
includes: (i) a description of the annual operating expenses of each Investment
Option, such as investment management fees, administrative fees and transaction
costs, which may reduce a Participant's account, and the aggregate amount of
such expenses expressed as a percentage of net assets of the Investment Option;
(ii) copies of prospectuses, financial statements and reports and other
materials relating to Investment Options; (iii) a list of the underlying assets
of an Investment Option that holds "plan assets" (within the meaning of
Department of Labor Regulation Section 2510.3-101), and the value of each such
asset (or the proportion of the investment alternative which it comprises), and
with respect to certain fixed rate investment contracts, the name of the issuer
of the contract and the contract term and rate of return; (iv) information
concerning the value of shares or units in available Investment Options,
including their past and current investment performance; and (v) information
concerning the value of shares or units in investment options held in a
Participant's account.
The Department of Labor regulations permit fiduciaries to decline to
implement a Participant's investment instructions under certain circumstances,
for example, if the result would be a transaction prohibited under ERISA or the
Internal Revenue Code, or would generate taxable income to the plan. State
Street, as plan trustee, may, therefore, decline to follow the investment
instructions of a Participant under certain circumstances. It is generally not
anticipated, however, that the exercise of investment elections allowed under
the American Bar Association Members Retirement Plan, including Self-Managed
Accounts, would result in such circumstances.
RANGE OF INVESTMENT ALTERNATIVES. The Department of Labor regulations require
a plan to offer at least three "core" investment alternatives which (i) are
diversified as to type of investment; (ii) have materially different risk and
return characteristics; (iii) in the aggregate enable a Participant to achieve
an investment portfolio with appropriate aggregate risk and return
characteristics; and (iv) tend to minimize through diversification the overall
risk to Participants' portfolios. The Stable Asset Return Fund, the
Intermediate Bond Fund, the Balanced Fund, the Value Equity Fund, the Growth
Equity Fund, the Index Fund, the Aggressive Equity Fund and the International
Equity Fund are intended to constitute "core" investment options. See "Stable
Asset Return Fund," "Intermediate Bond Fund," "Balanced Fund," "Value Equity
Fund," "Growth Equity Fund," "Index Equity Fund," "Aggressive Equity Fund" and
"International Equity Fund." If the Employer has so provided, a plan may also
offer the Self-Managed Account as an additional "non-core" investment option.
The relief from fiduciary liability provided by section 404(c) of ERISA is
applicable to all investment elections under a plan, including any elections to
invest in any of the "non-core" investments described above.
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The Department of Labor regulations require a plan to allow Participants to
transfer among the "core" investment options at least once during any three-
month period. The American Bar Association Members Retirement Plan generally
permits Participants to make investment elections and make transfers among
investment options on a daily basis.
REGULATION OF COLLECTIVE TRUST
Although Funds and the Structured Portfolio Service are similar in certain
respects to registered open-end management investment companies (commonly
referred to as "mutual funds"), Funds and the portfolios of the Structured
Portfolio Service under the Collective Trust are exempt from registration
under the Investment Company Act because they are "collective trust funds"
maintained by a bank consisting solely of assets of the plans. For this
reason, the Funds and the portfolios of the Structured Portfolio Service are
not subject to compliance with the requirements of the Investment Company Act
that apply to mutual funds.
A typical mutual fund is operated by a board of trustees through contractual
arrangements with one or more investment advisers, administrators, custodians
and similar service providers. Under the Investment Company Act, a mutual fund
is required to provide shareholders with voting rights with respect to a
variety of matters, including the election of the mutual fund's trustees, the
approval of the fund's contracts with its investment advisers and the approval
of changes to the mutual fund's fundamental investment policies.
Unlike the typical mutual fund, the Collective Trust is operated by a single
corporate trustee (State Street), which is responsible for all aspects of each
Fund and the portfolios of the Structured Portfolio Service, including
portfolio management, administration and custody. Under the Collective Trust,
Investors have no voting rights with respect to the selection of State Street,
as trustee, the selection of the Fund's Investment Advisors or changes to any
investment policy of a Fund and the portfolios of the Structured Portfolio
Service. State Street may make additional Funds available as Investment
Options from time to time subject to the approval of ABRA, and State Street
may terminate or amend the terms of the Funds from time to time upon notice
to, and in consultation with, ABRA. On behalf of the Investors, however, ABRA
will exercise independent oversight of State Street with respect to certain
aspects of the Program. In particular, none of the fees charged by State
Street or the Investment Advisors may be changed without the prior approval of
ABRA. For additional information concerning the role of ABRA under the
Program, see "American Bar Retirement Association."
Under the Investment Company Act, the investment advisor to a mutual fund
and its affiliates are prohibited from engaging in principal transactions with
the mutual fund. Although these provisions of the Investment Company Act do
not apply to the Funds and the portfolios of the Structured Portfolio Service,
similar prohibitions on self-dealing are applicable to State Street and each
Investment Advisor under ERISA.
A mutual fund is required to issue "redeemable securities" within the
meaning of the Investment Company Act. To satisfy this requirement, a mutual
fund may not invest more than 10% of its assets in illiquid securities and may
not suspend or postpone the redemption of shares for more than seven days,
except under certain extraordinary circumstances. Similar provisions have been
adopted with respect to each of the Funds, except the Stable Asset Return
Fund, which may invest more than 10% of its assets in illiquid securities and
may temporarily suspend or postpone withdrawals or transfers if there are
insufficient liquid assets to satisfy withdrawal or transfer requests. For
additional information concerning the risks associated with an investment in
the Stable Asset Return Fund, see "Stable Asset Return Fund."
The Stable Asset Return Fund relies on Amortized Cost Pricing as the method
for valuing portfolio securities of the Fund. Unlike a mutual fund, however,
the Stable Asset Return Fund and
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<PAGE>
the portfolios of the Structured Portfolio Service are not subject to Rule 2a-7
under the Investment Company Act, which requires a mutual fund, as a condition
to the use of Amortized Cost Pricing, to satisfy certain quality
diversification and maturity standards with respect to its portfolio. For a
more complete description of the risks associated with the use of Amortized
Cost Pricing, see "Stable Asset Return Fund--Valuation of Units."
Finally, because the Funds and the portfolios of the Structured Portfolio
Service are not registered under the Investment Company Act, the Funds and the
portfolios of the Structured Portfolio Service are not subject to the periodic
reporting requirements of the Investment Company Act and the operations of the
Funds and the portfolios of the Structured Portfolio Service are not subject to
inspection by the Securities and Exchange Commission. State Street, however, is
subject to supervision and examination by the Board of Governors of the Federal
Reserve System, the Federal Deposit Insurance Corporation and the Massachusetts
Commissioner of Banks. Furthermore, State Street is required to comply with the
provisions of ERISA, to the extent applicable, in connection with the
administration of the Program.
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<PAGE>
FEDERAL INCOME TAX CONSIDERATIONS
The provisions of the Internal Revenue Code relating to contributions and
distributions under qualified retirement plans are outlined briefly below. For
purposes of this outline it is assumed that Participants are not participants
in any other qualified retirement plan. Provisions of the Internal Revenue Code
that govern participation, vesting, funding or prohibited transactions are
generally not discussed herein. There is also no discussion herein of the
reporting and disclosure or fiduciary requirements of ERISA. See "ERISA and
Fiduciary Obligations." In addition, there is no discussion of the impact, if
any, of state laws that may apply. For information on these matters, Employers,
plan trustees and Participants should consult their tax advisors.
An Eligible Employer's adoption of the American Bar Association Members
Pooled Trust for Retirement Plans does not require Internal Revenue Service
("IRS") approval, assuming that the applicable individually designed plan has
been approved by the IRS. If an Eligible Employer adopts an ABA Members Plan,
the Eligible Employer will not need IRS approval unless the Eligible Employer
adopts certain provisions or maintains another plan. State Street will inform
Eligible Employers whether they need to submit their plan to the IRS for
approval. If such a submission is required, Eligible Employers will have to pay
the IRS a user fee, which is currently $125. This fee is subject to change at
the discretion of the IRS.
CONTRIBUTIONS
Employer contributions to a Plan are deductible in the fiscal year for which
they are made if the limitations of section 404 of the Internal Revenue Code
are met. As a general rule, Employer contributions must be made for any fiscal
year by the due date (including extensions) for filing the Employer's federal
income tax return for that fiscal year. However, Participants' salary deferral
contributions under a 401(k) plan and Participants' voluntary after-tax
contributions must be contributed by the Employer as soon as practicable after
the payroll period for which the deferral or contribution is made and within
the time specified by applicable law.
An Employer that has adopted the American Bar Association Members Retirement
Plan as a profit sharing plan makes contributions in discretionary amounts to
be determined annually. An individually designed profit sharing plan may
provide for contributions that are either discretionary or fixed by a formula
contained in the plan. The aggregate Employer contribution to the plan,
including Participants' salary deferrals under a 401(k) arrangement, is limited
to 15% of all Participants' taxable compensation for the plan year (or the
amount of contributions called for if a SIMPLE 401(k) plan).
An Employer that has adopted the American Bar Association Members Retirement
Plan as a defined contribution pension plan must contribute a percentage of
each Participant's compensation as specified by the Employer in the
participation agreement. An Employer that has adopted the American Bar
Association Retirement Plan as a target benefit pension plan must contribute an
amount actuarially determined necessary to fund the benefit targeted at normal
retirement age. In either a defined contribution pension plan or a target
benefit plan, the Employer deductible contribution is limited by the formula
specified in the participation agreement.
Contributions on behalf of each Participant in one or more plans established
under the American Bar Association Members Retirement Plan are limited to the
lesser of $30,000 (for 1998 and 1999) and 25% of taxable compensation
(excluding, in the case of self-employed persons, all deductible plan
contributions, other than 401(k) salary deferral contributions, and one-half of
self-employment (SECA) taxes paid). The Participant's after-tax employee
contributions, and salary deferrals under a 401(k) plan and forfeitures are
taken into account for purposes of applying this limitation. Employer
contributions under the American Bar Association Members Retirement Plan or an
individually designed defined contribution plan that are in excess of the
foregoing limits are not deductible.
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<PAGE>
A Participant's deferrals under a 401(k) plan may not exceed $7,000 as
adjusted for inflation ($10,000 for 1998 and 1999) when combined with his
elective contributions to simplified pensions (SEPs) tax deferred (section
403(b)) annuities, SIMPLE 401(k) plans, SIMPLE retirement accounts and
contributions deductible by the employee under a trust described under section
501(c)(18) of the Internal Revenue Code.
Under the American Bar Association Members Defined Benefit Plan or any
individually designed defined benefit pension plan, the Plan's actuary
determines the amount of the annual contribution. If the Employer adopts both
the American Bar Association Members Defined Benefit Plan and the American Bar
Association Members Retirement Plan (or any other combination of defined
benefit and defined contribution plans), its deductible contribution is limited
to 25% of all Participants' taxable compensation or the amount necessary to
meet the minimum funding standard under the defined benefit plan, whichever is
greater.
If the Employer contributes more to the plan than is deductible under the
above rules, the Employer may be liable for a 10% penalty tax on that non-
deductible amount and may risk disqualifying the plan.
Salary deferrals to a 401(k) plan are subject to applicable FICA (social
security) and FUTA (unemployment) taxes.
DISTRIBUTIONS
Income or gains on contributions are generally not subject to federal income
tax until benefits are distributed to the Participant or the Participant's
beneficiary. Generally, distributions in excess of an employee's after-tax
contributions are taxed as ordinary income to the recipient.
LUMP SUM PAYMENT. If a Participant's benefits are paid as a lump sum
distribution after the Participant participates in a plan for at least five
taxable years, the recipient may be able to use five-year income averaging.
Under this method, the lump sum distribution is taxed in the year of receipt as
though it were the recipient's only income and were received over a five-year
period. To qualify for five-year income averaging, the distribution must
consist of the Participant's entire interest in the plan and must be made in
one taxable year of the recipient after attainment of age 59 1/2. Five-year
income averaging is available only for one lump sum distribution, and only
after age 59 1/2. Through 1991, a recipient may elect capital gain treatment
with respect to a percentage of the portion of the Participant's lump sum
distribution attributable to pre-1974 contributions. Note: Effective for tax
years beginning after December 31, 1999, five-year income averaging is
repealed.
If a Participant was born before 1936, the Participant may elect to have
special rules apply to one lump sum distribution provided it is made after
attainment of age 59 1/2 or on account of death, disability (if the Participant
is self-employed), or separation from service if the Participant is an
employee. Under these special rules, a Participant may elect either ten-year
income averaging using 1986 rates or five-year income averaging using then
current rates. Furthermore, a Participant may elect separately to pay tax on
the portion of the Participant's distribution attributable to pre-1974
contributions at a flat 20% rate.
Any part of the taxable portion of a Participant's account balance or benefit
may qualify for a tax-deferred rollover into an Individual Retirement Account
(an "IRA") or another employer's qualified plan that accepts rollovers if the
rollover is completed within 60 days, unless the distribution is one of a
series of substantially equal payments (such as annuity payments or
installments) made (1) over the life (or life expectancy) of the Participant or
the joint lives (or joint life expectancies) of the Participant and his
beneficiary, or (2) over a specified period of 10 years or more. In addition,
installment payments from a plan required to be made because a Participant has
attained age 70 1/2, but prior to the year a participant retires, are eligible
for rollover. Amounts that are rolled over into an IRA cannot
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<PAGE>
generally be withdrawn without penalty before the Participant reaches age 59
1/2 and any such withdrawals will be taxable as ordinary income and will be
ineligible for the preferential five-year averaging for lump-sum distributions.
A rollover can be made "directly" from the plans to an IRA or to another
employer's qualified plan that accepts rollovers. The amount of any eligible
rollover distribution that is not transferred in a "direct" rollover is subject
to mandatory 20% withholding. Additionally, any amount that is not rolled over
is includible in the Participant's gross income and may be subject to the 10%
additional income tax on premature distributions described below.
ANNUITY PAYMENTS AND MONTHLY INSTALLMENTS. Each annuity or installment
payment a Participant receives is treated as ordinary income except where the
Participant has a "cost basis" in the benefit. A Participant's cost basis is
equal to the amount of the Participant's voluntary after-tax contributions,
plus any Employer contributions the Participant was required to include in
gross income in prior years. A portion of each payment a Participant receives
will, subject to certain special rules and limitations, be excluded from gross
income to reflect the recovery of the Participant's cost basis.
IN-SERVICE WITHDRAWALS OF AFTER-TAX CONTRIBUTIONS. The portion of each in-
service withdrawal of voluntary after-tax employee contributions that is
attributable to earnings will be included in a Participant's gross income.
Amounts contributed before January 1, 1987 to employer plans that on May 5,
1986 permitted active employees to withdraw their after-tax contributions are
taxable upon withdrawal only to the extent that they exceed the amount of the
Participant's cost basis. Amounts included in gross income under this rule may
also be subject to the additional 10% income tax on premature distributions
described below.
PREMATURE DISTRIBUTIONS. A Participant may be liable for an additional 10%
income tax on all taxable amounts distributed before age 59 1/2 unless the
distribution falls within a specified exception or is rolled over into an IRA
or other qualified plan.
The exceptions to the penalty tax include (a) distributions made on account
of the Participant's death or disability, (b) distributions in the form of a
life annuity or installments over the Participant's life expectancy (or the
joint life expectancy of the Participant and the Participant's beneficiary),
(c) distributions due to separation from active service after age 55, (d)
distributions used to pay deductible medical expenses, (e) distributions to an
alternative payee pursuant to a qualified domestic relations order, (f)
distributions to unemployed individuals for health insurance premiums,
(g) distributions for qualified higher education expenses, and (h)
distributions for certain first time home purchases.
FEDERAL INCOME TAX WITHHOLDING
Under the ABA Members Plans, federal income tax will be withheld from all
taxable payments unless, where permitted, the recipient elects otherwise. The
rate of withholding will depend on the type and, in certain cases, the amount
of the distribution. A person receiving periodic monthly payments of less than
$1,200 in 1998 and 1999 will generally be exempt from withholding, although he
may elect to have tax withheld. A person receiving monthly payments of $1,200
or more will generally be subject to withholding as if the benefit payments
were wages, unless he elects not to have tax withheld. Where a person whose
monthly payments are $1,200 or more makes no withholding election whatsoever,
tax will be withheld as if the person were married and claiming three
withholding allowances. A special withholding table may be used to determine
the withholding liability of a periodic payment. Although the amount of any
periodic payment that will be withheld is determined as if the periodic payment
were a payment of wages to the Participant for a payroll period, the amount to
be withheld is calculated separately from any amounts that are actually paid to
the Participant as wages for the same period. Non-periodic distributions from a
plan will generally be subject to mandatory withholding at the rate of 20%,
unless the distribution is transferred directly to another
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<PAGE>
employer's qualified plan or to an IRA. A Participant will receive additional
information and appropriate forms for withholding when he requests the
necessary forms for a distribution or withdrawal.
Under an individually designed plan that uses the American Bar Association
Members Pooled Trust for Retirement Plans for investment only, State Street
will pay the full amount of the distribution to the plan's trustee. The plan's
trustee is responsible for withholding federal income tax upon distribution to
the Participant.
TAXATION OF COLLECTIVE TRUST
The Collective Trust is a tax-exempt group trust established pursuant to
Revenue Ruling 81-100, 1981-1 C.B. 326. State Street has received from the IRS,
on behalf of the Collective Trust, a favorable determination letter with
respect to the tax-exempt status of the Collective Trust.
As a tax-exempt group trust, the Collective Trust is not subject to federal
income tax unless the Collective Trust generates unrelated business taxable
income as defined in the Internal Revenue Code ("UBTI"). It is the policy of
State Street not to invest any portion of the assets of the Collective Trust in
a manner that will generate UBTI. However, if State Street determines that a
proposed investment cannot be structured to avoid UBTI and that the projected
after-tax return on that investment is sufficient to justify the making of such
investment, then State Street may elect to make that investment. In the
unlikely event that any UBTI is incurred by the Collective Trust, it is
anticipated that any tax thereon would be reported and paid by the Collective
Trust as an expense of the Collective Trust.
LEGAL MATTERS
The validity of the issuance of the Units offered hereby has been passed upon
for the Collective Trust by Paul, Weiss, Rifkind, Wharton & Garrison, New York,
New York. Paul Weiss, Rifkind, Wharton & Garrison will rely, as to matters of
Massachusetts law, upon the opinion of Goodwin, Procter & Hoar LLP, Boston,
Massachusetts.
EXPERTS
The financial statements of each of the Funds, appearing in this Prospectus
except as they relate to the unaudited nine-month period ended September 30,
1998 have been so included in reliance on the report of PricewaterhouseCoopers
LLP, independent accountants, given on the authority of said firm as experts in
accounting and auditing.
AVAILABLE INFORMATION
The Collective Trust is subject to the informational requirements of the
Securities Exchange Act and in accordance therewith, it files reports and other
information with the Securities and Exchange Commission in Washington, D.C.
The Collective Trust has filed Registration Statements on Form S-1, including
amendments thereto, relating to the Units offered hereby with the Commission.
This prospectus does not contain all the information set forth in the
Registration Statements to which they relate and the exhibits and schedules
thereto. Statements contained in this prospectus as to the contents of any
contract or any other document referred to are not necessarily complete, and in
each instance reference is made to the copy of such contract or other document
filed or incorporated by reference as an exhibit to the Registration
Statements, each such statement being qualified in all respects by such
reference. For
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<PAGE>
further information with respect to the Collective Trust and State Street and
the Units offered by this prospectus, reference is hereby made to the
Registration Statements, exhibits and schedules.
The Collective Trust's reports and other information filed in accordance with
the Securities Exchange Act and the Registrations Statements and exhibits and
schedules thereto may be inspected, without charge, and copied at at the SEC's
public reference room at 450 Fifth Street, N.W., Washington, DC 20549. Please
call the SEC at 1-800-SEC-0330 for further information on the operation of the
public reference room. The SEC also maintains a site on the World Wide Web that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the SEC (including the
Collective Trust). The site's address is http://www.sec.gov.
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<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE(S)
-------
<S> <C>
Report of Independent Accountants....................................... F-4
Audited Financial Statements for the Year Ended December 31, 1997:
AGGRESSIVE EQUITY FUND
Statement of Assets and Liabilities................................... F-5
Statement of Operations............................................... F-6
Statement of Changes in Net Assets.................................... F-7
Selected Per-Unit Data and Ratios..................................... F-8
Schedule of Investments............................................... F-9
BALANCED FUND
Statement of Assets and Liabilities................................... F-18
Statement of Operations............................................... F-19
Statement of Changes in Net Assets.................................... F-20
Selected Per-Unit Data and Ratios..................................... F-21
Schedule of Investments............................................... F-22
GROWTH EQUITY FUND
Statement of Assets and Liabilities................................... F-33
Statement of Operations............................................... F-34
Statement of Changes in Net Assets.................................... F-35
Selected Per-Unit Data and Ratios..................................... F-36
Schedule of Investments............................................... F-37
INDEX EQUITY FUND
Statement of Assets and Liabilities................................... F-56
Statement of Operations............................................... F-57
Statement of Changes in Net Assets.................................... F-58
Selected Per-Unit Data and Ratios..................................... F-59
INTERMEDIATE BOND FUND
Statement of Assets and Liabilities................................... F-60
Statement of Operations............................................... F-61
Statement of Changes in Net Assets.................................... F-62
Selected Per-Unit Data and Ratios..................................... F-63
INTERNATIONAL EQUITY FUND
Statement of Assets and Liabilities................................... F-64
Statement of Operations............................................... F-65
Statement of Changes in Net Assets.................................... F-66
Selected Per-Unit Data and Ratios..................................... F-67
STABLE ASSET RETURN FUND
Statement of Assets and Liabilities................................... F-68
Statement of Operations............................................... F-69
Statement of Changes in Net Assets.................................... F-70
Selected Per-Unit Data and Ratios..................................... F-71
Schedule of Investments............................................... F-72
</TABLE>
F-1
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE(S)
-------
<S> <C>
VALUE EQUITY FUND
Statement of Assets and Liabilities................................. F-74
Statement of Operations............................................. F-75
Statement of Changes in Net Assets.................................. F-76
Selected Per-Unit Data and Ratios................................... F-77
Schedule of Investments............................................. F-78
STRUCTURED PORTFOLIO SERVICE
(CONSERVATIVE, MODERATE, AGGRESSIVE)
Statement of Assets and Liabilities................................. F-87
Statement of Operations............................................. F-88
Statement of Changes in Net Assets.................................. F-89
Selected Per-Unit Data and Ratios................................... F-91
Notes to Financial Statements....................................... F-94
Unaudited Financial Statements for the Nine Months Ended September 30,
1998:
AGGRESSIVE EQUITY FUND
Statement of Assets and Liabilities................................. F-101
Statement of Operations............................................. F-102
Statement of Changes in Net Assets.................................. F-103
Per-Unit Data and Ratios............................................ F-104
Schedule of Investments............................................. F-105
BALANCED FUND
Statement of Assets and Liabilities................................. F-113
Statement of Operations............................................. F-114
Statement of Changes in Net Assets.................................. F-115
Per-Unit Data and Ratios............................................ F-116
Schedule of Investments............................................. F-117
GROWTH EQUITY FUND
Statement of Assets and Liabilities................................. F-128
Statement of Operations............................................. F-129
Statement of Changes in Net Assets.................................. F-130
Per-Unit Data and Ratios............................................ F-131
Schedule of Investments............................................. F-132
INDEX EQUITY FUND
Statement of Assets and Liabilities................................. F-149
Statement of Operations............................................. F-150
Statement of Changes in Net Assets.................................. F-151
Per-Unit Data and Ratios............................................ F-152
INTERMEDIATE BOND FUND
Statement of Assets and Liabilities................................. F-153
Statement of Operations............................................. F-154
Statement of Changes in Net Assets.................................. F-155
Per-Unit Data and Ratios............................................ F-156
INTERNATIONAL EQUITY FUND
Statement of Assets and Liabilities................................. F-157
Statement of Operations............................................. F-158
Statement of Changes in Net Assets.................................. F-159
Per-Unit Data and Ratios............................................ F-160
</TABLE>
F-2
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE(S)
-------
<S> <C>
STABLE ASSET RETURN FUND
Statement of Assets and Liabilities................................... F-161
Statement of Operations............................................... F-162
Statement of Changes in Net Assets.................................... F-163
Per-Unit Data and Ratios.............................................. F-164
VALUE EQUITY FUND
Statement of Assets and Liabilities................................... F-165
Statement of Operations............................................... F-166
Statement of Changes in Net Assets.................................... F-167
Per-Unit Data and Ratios.............................................. F-168
Schedule of Investments............................................... F-169
STRUCTURED PORTFOLIO SERVICE
(CONSERVATIVE, MODERATE, AGGRESSIVE)
Statement of Assets and Liabilities................................... F-176
Statement of Operations............................................... F-177
Statement of Changes in Net Assets.................................... F-178
Per-Unit Data and Ratios.............................................. F-179
</TABLE>
F-3
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustee and Unitholders of the
American Bar Association Members/
State Street Collective Trust
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of
operations and of changes in net assets and the selected per-unit data and
ratios present fairly, in all material respects, the financial position of the
Aggressive Equity Fund, Balanced Fund, Growth Equity Fund, Stable Asset Return
Fund, Index Equity Fund, Intermediate Bond Fund, International Equity Fund,
Value Equity Fund, Conservative Structured Portfolio Service, Moderate
Structured Portfolio Service and Aggressive Structured Portfolio Service
constituting the American Bar Association Members/State Street Collective Trust
(hereafter referred to as the "Trust") at December 31, 1997, and the results of
each of their operations, the changes in each of their net assets and the
selected per-unit data and ratios for the periods indicated, in conformity with
generally accepted accounting principles. These financial statements and
selected per-unit data and ratios (hereafter referred to as "financial
statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation of
securities at December 31, 1997 by correspondence with the custodian and
brokers and the application of alternative procedures where confirmations from
brokers were not received, provide a reasonable basis for the opinion expressed
above.
Price Waterhouse LLP
Boston, Massachusetts
March 13, 1998
F-4
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
AGGRESSIVE EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost $252,133,577)......................... $331,261,601
Cash.............................................................. 1,245
Receivable for investments sold................................... 2,111,984
Receivable for fund units sold.................................... 783,589
Dividends and interest receivable................................. 240,858
Unamortized organizational costs.................................. 53,124
------------
Total Assets.................................................... 334,452,401
------------
LIABILITIES
Payable for investments purchased................................. 2,035,414
Investment advisory fee payable................................... 337,637
State Street Bank and Trust Company--program fee payable.......... 92,394
Trustee, management and administration fees payable............... 28,047
American Bar Retirement Association--program fee payable.......... 14,017
Other accruals.................................................... 5,304
------------
Total Liabilities............................................... 2,512,813
------------
NET ASSETS (equivalent to $48.59 per unit based on 6,831,480 units
outstanding)..................................................... $331,939,588
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
AGGRESSIVE EQUITY FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends (net of foreign tax expense of $83).................... $ 1,577,956
Interest......................................................... 1,118,012
-----------
Total investment income........................................ 2,695,968
-----------
EXPENSES
Investment advisory fee.......................................... 1,362,018
State Street Bank and Trust Company--program fee................. 1,077,330
Trustee, management and administration fees...................... 225,470
American Bar Retirement Association--program fee................. 157,383
Amortization of organization costs............................... 77,792
Reports to unitholders........................................... 48,900
Legal and audit fees............................................. 41,455
Registration fee................................................. 46,361
Other expenses................................................... 12,768
-----------
Total expenses................................................. 3,049,477
-----------
Net investment loss................................................ (353,509)
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain................................................ 39,709,808
Change in net unrealized appreciation............................ 12,757,570
-----------
Net realized and unrealized gain on investments................ 52,467,378
-----------
Net increase in net assets resulting from operations............... $52,113,869
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
AGGRESSIVE EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE
YEAR ENDED
DECEMBER 31,
--------------------------
1996 1997
------------ ------------
<S> <C> <C>
FROM OPERATIONS
Net investment loss.............................. $ (160,464) $ (353,509)
Net realized gain on investments................. 24,233,418 39,709,808
Net change in unrealized appreciation on invest-
ments........................................... 24,880,200 12,757,570
------------ ------------
Net increase in net assets resulting from opera-
tions........................................... 48,953,154 52,113,869
------------ ------------
FROM UNITHOLDER TRANSACTIONS
Proceeds from units issued....................... 35,023,922 41,120,394
Cost of units redeemed........................... (22,600,318) (37,210,143)
------------ ------------
Net increase in net assets resulting from
unitholder transactions......................... 12,423,604 3,910,251
------------ ------------
Net increase in net assets..................... 61,376,758 56,024,120
NET ASSETS
Beginning of year................................ 214,538,710 275,915,468
------------ ------------
End of year...................................... $275,915,468 $331,939,588
============ ============
NUMBER OF UNITS
Outstanding--beginning of year................... 6,390,559 6,727,703
Sold........................................... 937,668 920,581
Redeemed....................................... (600,524) (816,804)
------------ ------------
Outstanding--end of year......................... 6,727,703 6,831,480
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-7
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
AGGRESSIVE EQUITY FUND
SELECTED PER-UNIT DATA AND RATIOS
(For a unit outstanding throughout the year)*
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 2, 1992
(COMMENCEMENT FOR THE YEAR ENDED
OF OPERATIONS) TO DECEMBER 31,
DECEMBER 31, ---------------------------------------------------
1992 1993 1994 1995 1996 1997
----------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Investment income....... $ .30 $ .25 $ .28 $ .32 $ .36 $ .39
Expenses................ (.26) (.28) (.28) (.32) (.39) (.45)
-------- -------- -------- -------- -------- --------
Net investment loss..... .04 (.03) -- -- (.03) (.06)
Net realized and
unrealized gain (loss)
on investments......... 1.43 3.60 (1.00) 7.81 7.47 7.64
-------- -------- -------- -------- -------- --------
Net increase (decrease)
in unit value.......... 1.47 3.57 (1.00) 7.81 7.44 7.58
Net asset value at be-
ginning of year........ 21.72 23.19 26.76 25.76 33.57 41.01
-------- -------- -------- -------- -------- --------
Net asset value at end
of year................ $ 23.19 $ 26.76 $ 25.76 $ 33.57 $ 41.01 $ 48.59
======== ======== ======== ======== ======== ========
Ratio of expenses to
average net assets..... 1.25%**** 1.15 % 1.10 % 1.10% 1.04 % .98 %
Ratio of net investment
income (loss) to
average net assets..... .17%**** (.12)% .02 % .01% (.06)% (.11)%
Portfolio turnover...... 43%*** 42 % 48 % 63% 48 % 36 %
Total return............ 6.77%*** 15.39 % (3.74)% 30.32% 22.16 % 18.48 %
Average commissions
rate**................. -- -- -- -- $ 0.0502 $ 0.0487
Net assets at end of
year
(in thousands)......... $116,426 $153,465 $163,678 $214,539 $275,915 $331,940
</TABLE>
- --------
* Calculations prepared using the monthly average number of units
outstanding during the year.
** Average commissions rate paid is presented for fiscal periods beginning on
or after September 1, 1995.
*** Not annualized.
**** Ratios annualized.
The accompanying notes are an integral part of these financial statements.
F-8
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
AGGRESSIVE EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
COMMON STOCKS (92.3%)
BASIC INDUSTRIES (2.3%)
CHEMICALS
OM Group Inc. .......................................... 42,000 $ 1,538,250
R.P.M. Inc. Ohio........................................ 93,593 1,427,293
------------
2,965,543
------------
PAPER
Caraustar Industries Inc. .............................. 45,000 1,541,250
Pentair Inc. ........................................... 52,800 1,897,500
------------
3,438,750
------------
PLASTICS
Advanced Energy Industries Inc.*........................ 79,500 1,187,531
------------
TOTAL BASIC INDUSTRIES.................................. 7,591,824
------------
CAPITAL GOODS (6.1%)
BUILDING CONSTRUCTION
McDermott J. Ray S A*................................... 57,500 2,472,500
------------
ELECTRICAL EQUIPMENT
ASM Lithography Holding N V*............................ 46,000 3,105,000
Watsco Inc. ............................................ 40,000 987,500
------------
4,092,500
------------
INDUSTRIAL MACHINERY
Alyn Corp.*............................................. 45,000 472,500
Crane Company........................................... 77,000 3,339,875
Integrated Process Equipment Corp.*..................... 45,000 708,750
Kennametal Inc. ........................................ 52,000 2,694,250
NN Ball & Roller Inc. .................................. 112,700 1,000,213
U.S. Filter Corp.*...................................... 71,000 2,125,563
------------
10,341,151
------------
MISCELLANEOUS
Silicon Vy Group Inc. .................................. 75,000 1,696,875
------------
POLLUTION CONTROL
Waste Mgmt Int'l. PLC ADR* **........................... 264,000 1,650,000
------------
TOTAL CAPITAL GOODS..................................... 20,253,026
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-9
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
AGGRESSIVE EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
CONSUMER BASICS (8.2%)
DRUGS AND HEALTHCARE
Biogen Inc.*............................................ 85,500 $ 3,110,063
Cardiac Pathways Corp.*................................. 8,000 56,000
Depuy Inc. ............................................. 70,000 2,012,500
Dura Pharmaceuticals Inc.*.............................. 71,300 3,270,888
Elan PLC ADR* **........................................ 82,000 4,197,375
Gilead Sciences Inc.*................................... 56,500 2,161,125
Healthsouth Corp.*...................................... 64,000 1,776,000
Immune Response Corp.Del*............................... 137,700 1,531,913
Millennium Pharmaceuticals*............................. 26,600 505,400
Oxford Health Plans Inc.*............................... 34,500 536,906
Phycor Inc.*............................................ 25,500 688,500
Physio Control Int'l. Corp.*............................ 54,700 868,363
Vertex Pharmaceuticals Inc.*............................ 43,500 1,435,500
------------
22,150,533
------------
FOOD AND BEVERAGE
Ben & Jerry's Homemade Inc.*............................ 50,000 775,000
Delmonte Company*....................................... 121,600 1,778,400
Thorn Apple Vy Inc. .................................... 60,000 870,000
------------
3,423,400
------------
HOUSEHOLD PRODUCTS
USA Detergents Inc.*.................................... 58,000 471,250
------------
TOBACCO
Swisher Int'l. Group Inc.*.............................. 45,300 770,100
------------
MISCELLANEOUS
Urocor Inc.*............................................ 79,000 488,813
------------
TOTAL CONSUMER BASICS................................... 27,304,096
------------
CONSUMER DURABLE GOODS (3.1%)
AUTO PARTS
Standard Products Company............................... 34,400 881,500
Walbro Corp. ........................................... 42,000 564,375
------------
1,445,875
------------
AUTOMOBILES
Circuit City Stores Inc. ............................... 55,300 497,700
Harley Davidson Inc. ................................... 121,000 3,312,375
United Auto Group Inc.*................................. 18,000 326,250
------------
4,136,325
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-10
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
AGGRESSIVE EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
HOUSEHOLD APPLIANCES AND FURNISHINGS
Harman Int'l. Industries Inc. New....................... 20,000 $ 848,750
Libbey Inc. ............................................ 56,000 2,121,000
Williams Sonoma Inc.*................................... 9,000 376,875
------------
3,346,625
------------
TIRES AND RUBBER
Bandag Inc. ............................................ 28,000 1,496,250
------------
TOTAL CONSUMER DURABLE GOODS............................ 10,425,075
------------
CONSUMER NON-DURABLE GOODS (4.0%)
APPAREL AND TEXTILES
Jones Apparel Group Inc.*............................... 23,200 997,600
------------
COSMETICS AND TOILETRIES
Lauder Estee Companies Inc. ............................ 36,000 1,851,750
Paragon Trade Brands Inc.*.............................. 76,900 990,088
------------
2,841,838
------------
RETAIL TRADE
Cole Nat'l Corp.*....................................... 8,000 239,500
Gymboree Corp.*......................................... 40,000 1,095,000
Kohls Corp.*............................................ 54,000 3,678,750
Micro Whse Inc.*........................................ 36,000 501,750
Proffitts Inc.*......................................... 60,000 1,706,250
Staples Inc.*........................................... 84,000 2,331,000
------------
9,552,250
------------
TOTAL CONSUMER NON-DURABLE GOODS........................ 13,391,688
------------
CONSUMER SERVICES (2.2%)
HOTELS AND RESTAURANTS
Buffets Inc.*........................................... 93,000 871,875
Rio Hotel & Casino Inc.*................................ 77,000 1,617,000
Ruby Tuesday Inc. ...................................... 28,200 726,150
Sizzler Int'l. Inc. .................................... 69,500 186,781
------------
3,401,806
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-11
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
AGGRESSIVE EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
LEISURE TIME
Acclaim Entertainment Inc.*............................. 119,500 $ 433,188
Ascent Entertainment Group Inc.*........................ 97,637 1,012,984
Imax Corp. ADR* **...................................... 40,000 880,000
Westwood One Inc.*...................................... 40,000 1,485,000
------------
3,811,172
------------
TOTAL CONSUMER SERVICES................................. 7,212,978
------------
ENERGY (4.5%)
DOMESTIC OIL
NGC Corp. .............................................. 81,000 1,417,500
Noble Affiliates Inc. .................................. 54,500 1,921,125
------------
3,338,625
------------
GAS EXPLORATION
Energen Corp. .......................................... 37,300 1,482,675
Forcenergy Inc. ........................................ 50,500 1,322,469
Vintage Pete Inc. ...................................... 73,000 1,387,000
------------
4,192,144
------------
INTERNATIONAL OIL
Ranger Oil Ltd. ADR* **................................. 150,000 1,031,250
------------
PETROLEUM SERVICES
Camco Int'l. Inc. ...................................... 52,900 3,369,069
Transocean Offshore Inc. ............................... 61,100 2,944,256
------------
6,313,325
------------
TOTAL ENERGY............................................ 14,875,344
------------
FINANCE (17.0%)
BANKS
Bank Utd Corp. ......................................... 44,300 2,167,931
CCB Fin'l. Corp. ....................................... 13,800 1,483,500
Coast Svgs Fin'l. Inc.*................................. 30,000 2,056,875
Commerce Bancshares Inc. ............................... 18,742 1,269,771
First Amern Corp. Tenn ................................. 36,000 1,791,000
Hamilton Bancorp Inc. Fla*.............................. 46,000 1,339,750
Hibernia Corp. ......................................... 50,000 940,625
PFF Bancorp Inc.*....................................... 70,000 1,391,250
Republic NY Corp. ...................................... 15,500 1,769,906
------------
14,210,608
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-12
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
AGGRESSIVE EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
FINANCIAL SERVICES
Americredit Corp.*...................................... 46,700 $ 1,293,006
Green Tree Fin'l. Corp. ................................ 39,200 1,026,550
Medallion Fin'l. Corp. ................................. 78,000 1,716,000
Reliastar Fin'l. Corp. ................................. 45,500 1,874,031
------------
5,909,587
------------
INSURANCE
ACE Ltd. ADR* **........................................ 36,000 3,474,000
Everest Reinsurance Hldgs............................... 29,000 1,196,250
FPA Medical Management Inc.*............................ 81,500 1,517,938
Harleysville Group Inc. ................................ 60,000 1,440,000
Mercury Gen Corp. New................................... 130,000 7,182,500
Magic Investment Corp. Wis ............................. 56,000 3,724,000
Mutual Risk Management Ltd. ADR* **..................... 77,000 2,305,188
Nymagic Inc. ........................................... 25,000 689,063
------------
21,528,939
------------
INVESTMENT COMPANIES
CMAC Invest Corp. ...................................... 33,800 2,040,675
Ocwen Asset Invt Corp. ................................. 45,000 922,500
Price T Rowe & Associates Inc. ......................... 72,700 4,571,013
------------
7,534,188
------------
SAVINGS AND LOAN
TCF Financial Corp. .................................... 213,000 7,228,688
------------
TOTAL FINANCE........................................... 56,412,010
------------
GENERAL BUSINESS (13.6%)
BROADCASTING
Cablevision Systems Corp.*.............................. 32,000 3,064,000
Chris Craft Industries Inc.*............................ 29,690 1,553,158
Global Star Telecom*.................................... 120,588 5,923,886
HBO & Co. .............................................. 112,200 5,385,600
Spelling Entertainment Group Inc. ...................... 167,100 1,169,700
------------
17,096,344
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-13
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
AGGRESSIVE EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
BUSINESS SERVICES
Accustaff Inc.*......................................... 117,000 $ 2,691,000
Ba Merchants Services Inc.*............................. 88,500 1,570,875
Corestaff Inc.*......................................... 63,500 1,682,750
Data Processing Corp.*.................................. 60,000 1,530,000
Fiserv Inc.*............................................ 73,600 3,615,600
Jacobs Engr Group Inc.*................................. 300 7,613
Legato Systems Inc.*.................................... 38,300 1,685,200
National Data Corp. .................................... 42,500 1,535,313
Paychex Inc. ........................................... 90,050 4,558,781
Stewart Enterprises Inc. ............................... 87,000 4,056,375
Sylvan Learning Systems Inc.*........................... 29,400 1,146,600
------------
24,080,107
------------
NEWSPAPERS
Media Gen. Inc ......................................... 13,700 572,831
------------
PUBLISHING
Pulitzer Publishing Company............................. 17,000 1,067,813
Topps Inc. ............................................. 162,200 359,881
------------
1,427,694
------------
TELECOMMUNICATIONS SERVICES
Comsat Corp. ........................................... 77,000 1,867,250
------------
TOTAL GENERAL BUSINESS.................................. 45,044,226
------------
MISCELLANEOUS (11.3%)
CONGLOMERATES
U.S. Industries Inc. New................................ 54,450 1,640,306
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-14
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
AGGRESSIVE EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
MISCELLANEOUS
Castle Dental Centers Inc.*............................. 50,000 $ 387,500
Chancellor Media Corp.*................................. 17,600 1,313,400
Consolidated Cap Corp.*................................. 78,000 1,584,375
Corn Products Int'l. Inc.*.............................. 1,100 32,794
Cymer Inc. ............................................. 33,400 501,000
Dollar Thrifty Automotive Grp*.......................... 45,000 922,500
Esg Re Ltd.*............................................ 14,600 343,100
Firearms Training Sys Inc.*............................. 51,300 266,119
Hagler Bailly Inc. ..................................... 90,000 2,025,000
Icg Communications Inc.*................................ 50,000 1,362,500
Indus Int'l. Inc.*...................................... 55,200 400,200
Intelligroup Inc.*...................................... 146,700 2,805,638
Kulicke & Soffa Industries Inc.*........................ 85,000 1,583,125
Metro Information Svcs Inc.*............................ 50,000 1,387,500
Mondavi Robert Corp.*................................... 16,500 804,375
Moneygram Pmt Sys Inc.*................................. 151,000 1,623,250
Newpark Res Inc.*....................................... 7,500 131,250
Nine Westgroup Inc. .................................... 63,100 1,636,656
Promus Hotel Corp. New*................................. 92,500 3,885,000
Speedfam Int'l. Inc.*................................... 43,700 1,158,050
Staff Leasing Inc.*..................................... 28,000 528,500
Superior Telecom Inc. .................................. 6,600 228,113
TMP Worldwide Inc.*..................................... 75,000 1,725,000
Tag Heuer Int'l S A ADR* **............................. 31,000 255,750
Tefron Ltd.*............................................ 80,500 1,851,500
Total Ctl Prods Inc.*................................... 143,200 1,754,200
United Meridian Corp.*.................................. 44,500 1,251,563
Viatel Inc.*............................................ 185,000 925,000
White Cap Industries Corp.*............................. 72,600 1,352,175
------------
34,025,133
------------
REAL ESTATE
Irvine Apartment Communities Inc. ...................... 37,800 1,202,513
------------
ROYALTY TRUSTS
San Juan Basin Rty Trust................................ 80,000 740,000
------------
TOTAL MISCELLANEOUS..................................... 37,607,952
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-15
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
AGGRESSIVE EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
SHELTER (1.0%)
CONSTRUCTION MATERIALS
Granite Const. Inc. .................................... 60,000 $ 1,380,000
Martin Marietta Materials Inc. ......................... 56,000 2,047,500
------------
3,427,500
------------
TOTAL SHELTER........................................... 3,427,500
------------
TECHNOLOGY (15.8%)
AEROSPACE
Computer Sciences Corp.*................................ 23,000 1,920,500
------------
COMPUTERS AND BUSINESS EQUIPMENT
Be Semiconductor Industries*............................ 28,000 269,500
Ceridian Corp.*......................................... 46,900 2,148,606
Novellus Sys. Inc.*..................................... 94,000 3,037,375
Pairgain Technologies Inc.*............................. 69,000 1,336,875
Peoplesoft Inc.*........................................ 139,000 5,421,000
Pixar*.................................................. 48,800 1,055,300
Stormedia Inc.*......................................... 57,000 124,688
Xilinx Inc.*............................................ 70,000 2,454,375
------------
15,847,719
------------
ELECTRONICS
ADC Telecommunications Inc.*............................ 108,000 4,509,000
Analog Devices Inc.*.................................... 130,000 3,599,375
Aspen Technology Inc.*.................................. 44,500 1,524,125
Credence Systems Corp.*................................. 76,000 2,251,500
Digital Microwave Corp.*................................ 80,000 1,160,000
Electroglas Inc.*....................................... 72,000 1,111,500
Eletronics For Imaging Inc.*............................ 73,500 1,221,938
Electric Sys Inc.*...................................... 62,000 2,883,000
Lam Resh Corp.*......................................... 45,000 1,316,250
LoJack Corp.*........................................... 110,000 1,622,500
Picturetel Corp.*....................................... 63,000 409,500
Teleflex Inc. .......................................... 30,400 1,147,600
------------
22,756,288
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-16
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
AGGRESSIVE EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
SOFTWARE
Baan Company NVF ADR* **............................... 37,000 $ 1,221,000
Check Point Software Tech Ltd. ADR* **................. 41,500 1,691,125
Dendrite Int'l. Inc.*.................................. 111,800 2,166,125
Microchip Technology Inc. ............................. 50,500 1,515,000
Midway Games Inc.*..................................... 64,000 1,164,000
Parametric Technology Corp.*........................... 89,000 4,216,375
------------
11,973,625
------------
TOTAL TECHNOLOGY....................................... 52,498,132
------------
TRANSPORTATION (2.7%)
AIR TRAVEL
America West Hldg Corp.*............................... 54,800 1,020,650
Continental Airls Inc.*................................ 18,000 866,250
------------
1,886,900
------------
RAILROADS
Railtex Inc. .......................................... 28,000 400,750
------------
TRUCKING AND FREIGHT FORWARDING
Air Express Int'l. Corp. .............................. 26,900 820,439
Caliber Sys Inc. ...................................... 33,500 1,631,031
Landstar Sys Inc.*..................................... 65,800 1,735,475
MS Carriers Inc.*...................................... 25,700 639,288
Polaris Industries Inc. ............................... 59,000 1,803,188
------------
6,629,421
------------
TOTAL TRANSPORTATION................................... 8,917,071
------------
UTILITIES (0.5%)
GAS & PIPELINE UTILITIES
Eastern Enterprises.................................... 33,900 1,525,500
------------
TOTAL UTILITIES........................................ 1,525,500
------------
TOTAL COMMON STOCK (Cost $227,358,398)................. 306,486,422
------------
<CAPTION>
UNITS
----------
<S> <C> <C>
SHORT TERM INVESTMENTS (COST $24,775,179) (7.5%)
State Street Bank Yield Enhanced Short Term Investment
Fund.................................................. 24,775,179 24,775,179
------------
TOTAL INVESTMENTS (COST $252,133,577) (99.8%).......... 331,261,601
Other Assets less Liabilities (0.2%)................... 677,987
------------
NET ASSETS (100.0%).................................... $331,939,588
============
</TABLE>
- --------
* Non-income producing security.
** An American Depositary Receipt (ADR) is a certificate issued by a U.S. bank
representing the right to receive securities of the foreign issuer
described.
The accompanying notes are an integral part of these financial statements.
F-17
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
BALANCED FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost $345,397,782)......................... $361,378,330
Cash.............................................................. 19,812
Receivable for investments sold................................... 821,470
Dividends and interest receivable................................. 2,018,121
Unamortized organizational costs.................................. 53,224
------------
Total Assets.................................................... 364,290,957
------------
LIABILITIES
Payable for investments purchased................................. 3,919,164
Payable for fund units redeemed................................... 1,399,029
Investment advisory fee payable................................... 315,689
State Street Bank and Trust Company--program fee payable.......... 101,834
Trustee, management and administration fees payable............... 21,645
American Bar Retirement Association--program fee payable.......... 15,051
Other accruals.................................................... 14,221
Other liabilities................................................. 1,557
------------
Total Liabilities............................................... 5,788,190
------------
NET ASSETS (equivalent to $44.42 per unit based on 8,070,199 units
outstanding)..................................................... $358,502,767
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-18
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
BALANCED FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends (net of foreign tax expense of $24,365)............... $ 2,841,395
Interest........................................................ 8,672,999
------------
Total investment income....................................... 11,514,394
------------
EXPENSES
Investment advisory fee......................................... 995,814
State Street Bank and Trust Company--program fee................ 1,154,131
Trustee, management and administration fees..................... 241,510
American Bar Retirement Association--program fee................ 168,606
Amortization of organization costs.............................. 83,899
Reports to unitholders.......................................... 52,342
Legal and audit fees............................................ 44,373
Registration fee................................................ 49,624
Other expenses.................................................. 17,290
------------
Total expenses................................................ 2,807,589
------------
Net investment income............................................. 8,706,805
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain............................................... 80,198,178
Change in net unrealized appreciation........................... (26,498,974)
------------
Net realized and unrealized gain on investments............... 53,699,204
------------
Net increase in net assets resulting from operations.............. $ 62,406,009
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-19
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
BALANCED FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE
YEAR ENDED
DECEMBER 31,
--------------------------
1996 1997
------------ ------------
<S> <C> <C>
FROM OPERATIONS
Net investment income............................ $ 7,987,421 $ 8,706,805
Net realized gain on investments................. 26,015,161 80,198,178
Net change in unrealized appreciation on invest-
ments........................................... 5,122,866 (26,498,974)
------------ ------------
Net increase in net assets resulting from opera-
tions........................................... 39,125,448 62,406,009
------------ ------------
FROM UNITHOLDER TRANSACTIONS
Proceeds from units issued....................... 19,822,374 73,912,974
Cost of units redeemed........................... (28,072,708) (73,217,548)
------------ ------------
Net increase (decrease) in net assets resulting
from unitholder transactions.................... (8,250,334) 695,426
------------ ------------
Net increase in net assets..................... 30,875,114 63,101,435
NET ASSETS
Beginning of year................................ 264,526,218 295,401,332
------------ ------------
End of year...................................... $295,401,332 $358,502,767
============ ============
NUMBER OF UNITS
Outstanding--beginning of year................... 8,264,600 8,036,685
Sold........................................... 584,936 1,578,134
Redeemed....................................... (812,851) (1,544,620)
------------ ------------
Outstanding--end of year......................... 8,036,685 8,070,199
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-20
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
BALANCED FUND
SELECTED PER-UNIT DATA AND RATIOS
(For a unit outstanding throughout the year)*
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 2, 1992
(COMMENCEMENT FOR THE YEAR ENDED
OF OPERATIONS) TO DECEMBER 31,
DECEMBER 31, ------------------------------------------------
1992 1993 1994 1995 1996 1997
----------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Investment income....... $ .89 $ 1.00 $ 1.08 $ 1.19 $ 1.30 $ 1.42
Expenses................ (.25) (.26) (.26) (.29) (.33) (.35)
-------- -------- -------- -------- -------- --------
Net investment income... .64 .74 .82 .90 .97 1.07
Net realized and
unrealized gain (loss)
on investments......... (1.56) .82 (.82) 6.07 3.78 6.59
-------- -------- -------- -------- -------- --------
Net increase in unit
value.................. (.92) 1.56 -- 6.97 4.75 7.66
Net asset value at
beginning of year...... 24.40 23.48 25.04 25.04 32.01 36.76
-------- -------- -------- -------- -------- --------
Net asset value at end
of year................ $ 23.48 $ 25.04 $ 25.04 $ 32.01 $ 36.76 $ 44.42
======== ======== ======== ======== ======== ========
Ratio of expenses to
average net assets..... 1.10%**** 1.07% 1.03% 1.00% .96% .84%
Ratio of net investment
income to average net
assets................. 2.82%**** 3.05% 3.32% 3.08% 2.85% 2.62%
Portfolio turnover...... 119%*** 153% 113% 155% 181% 122%
Total return............ (3.77)%*** 6.64% 0.00% 27.84% 14.84% 20.84%
Average commissions
rate**................. -- -- -- -- $ 0.0550 $ 0.0510
Net assets at end of
year (in thousands).... $167,242 $193,362 $198,945 $264,526 $295,401 $358,503
</TABLE>
- --------
* Calculations prepared using the monthly average number of units
outstanding during the year.
** Average commissions rate paid is presented for fiscal periods beginning on
or after September 1, 1995.
*** Not annualized.
**** Ratios annualized.
The accompanying notes are an integral part of these financial statements.
F-21
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
BALANCED FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
COMMON STOCKS (62.9%)
BASIC INDUSTRIES (5.7%)
ALUMINUM
Aluminum Company America............................... 34,000 $ 2,392,750
------------
BUILDING MATERIALS
Applied Materials Inc.*................................ 194,900 5,871,363
------------
CHEMICALS
Air Products & Chemicals Inc. ......................... 35,200 2,895,200
Georgia Gulf Corp. .................................... 5,600 171,500
Praxair Inc. .......................................... 53,000 2,385,000
Zeneca Group PLC ADR**................................. 49,000 5,292,000
------------
10,743,700
------------
PLASTICS
Illinois Tool Wks Inc. ................................ 26,000 1,563,250
------------
TOTAL BASIC INDUSTRIES................................. 20,571,063
------------
CAPITAL GOODS (3.7%)
CONSTRUCTION AND MINING EQUIPMENT
Dover Corp. ........................................... 74,200 2,680,475
------------
ELECTRICAL EQUIPMENT
ASM Lithography Hldg N V ADR* **....................... 26,400 1,782,000
General Electric Company............................... 25,300 1,856,388
Johnson Ctls Inc. ..................................... 48,000 2,292,000
Philips Electrs N V ADR**.............................. 7,000 423,500
------------
6,353,888
------------
POLLUTION CONTROL
Browning Ferris Inds Inc. ............................. 59,600 2,205,200
Republic Industries Inc.*.............................. 82,800 1,930,275
------------
4,135,475
------------
TOTAL CAPITAL GOODS.................................... 13,169,838
------------
CONSUMER BASICS (9.8%)
DRUGS AND HEALTHCARE
Abbott Labs............................................ 31,600 2,071,775
Astra Ab ADR**......................................... 175,000 3,007,813
Guidant Corp. ......................................... 81,100 5,048,475
Merck & Company Inc. .................................. 27,000 2,868,750
Pacificare Health Systems*............................. 40,830 2,125,333
Pfizer Inc. ........................................... 87,000 6,486,938
United Healthcare Corp. ............................... 58,400 2,901,750
------------
24,510,834
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-22
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
BALANCED FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
FOOD AND BEVERAGE
Conagra Inc. .......................................... 85,200 $ 2,795,625
Kellogg Company........................................ 39,600 1,965,150
Nestle S A............................................. 30,000 2,238,750
Pepsico Inc. .......................................... 55,800 2,033,213
------------
9,032,738
------------
TOBACCO
Philip Morris Companies Inc. .......................... 35,900 1,626,719
------------
TOTAL CONSUMER BASICS.................................. 35,170,291
------------
CONSUMER DURABLE GOODS (1.8%)
AUTO PARTS
Eaton Corp. ........................................... 3,600 321,300
------------
AUTOMOBILES
Ford Motor Company Del................................. 100,000 4,868,750
Volvo Aktiebolaget ADR* **............................. 40,500 1,093,500
------------
5,962,250
------------
TOTAL CONSUMER DURABLE GOODS........................... 6,283,550
------------
CONSUMER NON-DURABLE GOODS (4.4%)
APPAREL AND TEXTILES
Gucci Group N V ADR**.................................. 10,400 435,500
Nike Inc. ............................................. 49,500 1,942,875
V F Corp. ............................................. 38,400 1,764,000
------------
4,142,375
------------
LIQUOR
Anheuser Busch Companies Inc. ......................... 40,000 1,760,000
------------
RETAIL TRADE
Lowes Companies Inc. .................................. 65,000 3,099,688
Wal Mart Stores Inc. .................................. 35,500 1,400,031
Woolworth Corp. ....................................... 133,000 2,709,875
------------
7,209,594
------------
TOYS, AMUSEMENTS, AND SPORTING GOODS
Hasbro Inc. ........................................... 84,800 2,671,200
------------
TOTAL CONSUMER NON-DURABLE GOODS....................... 15,783,169
------------
CONSUMER SERVICES (0.4)%
LEISURE TIME
Disney Walt Company.................................... 15,000 1,485,938
------------
TOTAL CONSUMER SERVICES................................ 1,485,938
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-23
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
BALANCED FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
ENERGY (4.6%)
DOMESTIC OIL
Atlantic Richfield Company............................. 19,400 $ 1,554,425
Noble Affiliates Inc. ................................. 20,500 722,625
------------
2,277,050
------------
GAS EXPLORATION
Oryx Energy Company.................................... 22,600 576,300
------------
INTERNATIONAL OIL
British Petroleum PLC ADR**............................ 15,000 1,195,313
Chevron Corp. ......................................... 24,200 1,863,400
Mobil Corp. ........................................... 11,900 859,031
Shell Trans & Trading PLC ADR**........................ 81,100 3,548,125
------------
7,465,869
------------
PETROLEUM SERVICES
Total S A ADR**........................................ 77,500 4,301,250
Western Atlas Inc.*.................................... 26,200 1,938,800
------------
6,240,050
------------
TOTAL ENERGY........................................... 16,559,269
------------
FINANCE (11.2%)
BANKS
Bankamerica Corp. ..................................... 62,400 4,555,200
Chase Manhattan Corp. (New)............................ 47,000 5,146,500
Citicorp............................................... 19,900 2,516,106
Mercantile Bancorporation Inc. ........................ 21,200 1,303,800
Wells Fargo & Company.................................. 12,800 4,344,800
------------
17,866,406
------------
FINANCIAL SERVICES
Capital One Financial Corp. ........................... 56,900 3,083,269
------------
INSURANCE
Cincinnati Financial Corp. ............................ 27,500 3,870,625
Exel Ltd. ADR**........................................ 99,200 6,286,800
General Re Corp. ...................................... 13,300 2,819,600
------------
12,977,025
------------
SAVINGS AND LOAN
Ahmanson H F and Company............................... 44,800 2,998,800
Golden West Financial Corp. ........................... 33,000 3,227,813
------------
6,226,613
------------
TOTAL FINANCE.......................................... 40,153,313
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-24
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
BALANCED FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
GENERAL BUSINESS (6.1%)
BROADCASTING
TCI Satellite Entmt Inc.*.............................. 6,200 $ 42,625
U S West Inc.*......................................... 60,900 1,758,488
Viacom Inc.*........................................... 37,500 1,535,344
------------
3,336,457
------------
BUSINESS SERVICES
Donnelley RR & Sons Company............................ 45,000 1,676,250
Interpublic Group Companies Inc. ...................... 31,800 1,584,038
Nokia Corp. ADR**...................................... 20,000 1,400,000
------------
4,660,288
------------
NEWSPAPERS
News Corp. Ltd. ADR**.................................. 63,900 1,373,851
------------
OFFICE FURNISHINGS AND SUPPLIES
Avery Dennison Corp. .................................. 53,700 2,403,075
------------
PUBLISHING
Jostens Inc. .......................................... 91,600 2,112,525
Time Warner Inc. ...................................... 84,000 5,208,000
------------
7,320,525
------------
TELECOMMUNICATION SERVICES
Tele Communications Inc. New*.......................... 89,750 2,893,690
------------
TOTAL GENERAL BUSINESS................................. 21,987,886
------------
MISCELLANEOUS (4.1%)
CONGLOMERATES
Textron Inc. .......................................... 36,900 2,306,250
------------
MISCELLANEOUS
Dillards Inc. ......................................... 38,000 1,339,500
Fort James Corp. ...................................... 49,100 1,878,075
Pioneer Nat Res Company ADR**.......................... 87,000 2,517,563
KLA Tencor Corp.*...................................... 90,700 3,503,288
Slm Hldg Corp. ........................................ 21,800 3,032,925
------------
12,271,351
------------
TOTAL MISCELLANEOUS.................................... 14,577,601
------------
TECHNOLOGY (6.9%)
AEROSPACE
Boeing Company......................................... 69,900 3,420,731
United Technologies Corp. ............................. 28,500 2,075,156
------------
5,495,887
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-25
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
BALANCED FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
COMPUTERS AND BUSINESS EQUIPMENT
Ascend Communications Inc.*............................ 70,000 $ 1,715,000
Cisco Sys Inc.*........................................ 28,200 1,572,150
Xerox Corp. ........................................... 33,000 2,435,813
------------
5,722,963
------------
ELECTRONICS
Electronic Data Sys Corp. New.......................... 44,500 1,955,219
Ericsson L M Tel Company ADR**......................... 102,600 3,828,263
Intel Corp. ........................................... 41,200 2,894,300
Micron Technology Inc. ................................ 63,000 1,638,000
Silicon Graphics Inc.*................................. 59,700 742,519
Teradyne Inc.*......................................... 80,300 2,569,600
------------
13,627,901
------------
TOTAL TECHNOLOGY....................................... 24,846,751
------------
TRANSPORTATION (0.5%)
RAIL TRANSPORTATION
Wisconsincent Transn Corp.*............................ 75,000 1,753,125
------------
TOTAL TRANSPORTATION................................... 1,753,125
------------
UTILITIES (3.7%)
ELECTRIC UTILITIES
Northeast Utilities.................................... 109,100 1,288,744
------------
GAS AND PIPELINE UTILITIES
Mcn Energy Group Inc. ................................. 55,100 2,224,663
Williams Companies Inc. ............................... 101,200 2,871,550
------------
5,096,213
------------
TELEPHONE
Airtouch Communications Inc.*.......................... 39,300 1,633,406
AT&T Corp. ............................................ 34,500 2,113,125
MCI Communications Corp. .............................. 48,200 2,063,563
Worldcom Inc. Ga....................................... 37,500 1,134,364
------------
6,944,458
------------
TOTAL UTILITIES........................................ 13,329,415
------------
TOTAL COMMON STOCKS (Cost $212,170,717)................ 225,671,209
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-26
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
BALANCED FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL VALUE
----------- ------------
<S> <C> <C>
FIXED INCOME (34.1%)
CORPORATE BONDS (9.0%)
ASSET BACKED
Arcadia Automobile Receivables........................ $ 600,000 $ 601,808
Banc One Auto Grantor Tr 6.29% 07/20/04............... 825,000 825,592
Chevy Chase Auto Receivables 6.25% 07/20/04........... 775,000 775,556
Cps Auto Grantor Tr 6.65% 10/15/02.................... 180,796 182,057
Daimler Benz Auto Grantor Tr 7.58% 03/20/05........... 510,237 510,554
First Merchants Auto Tr 6.70% 11/15/02****............ 214,064 216,095
First Secauto Grantor Tr 6.10% 04/15/03............... 881,290 880,836
Ford Credit Auto Owner Tr 6.05% 04/15/01.............. 1,025,000 1,024,135
Honda Auto Receivables Grantor 5.85% 02/15/03......... 893,159 891,756
Honda Auto Receivables Tr 5.95% 05/15/03.............. 969,359 967,498
Long Beach Addep Auto Grn Tr Tr 6.69% 09/25/04****.... 418,099 419,053
Nal Auto Tr 7.30% 12/15/00****........................ 98,473 96,930
Nal Auto Tr 8.00% 12/16/02****........................ 121,774 121,636
National Car Rental Financial Corp. 7.35% 10/20/03.... 250,000 258,583
Nissan Auto Recievables Grantor 6.15% 02/17/03****.... 930,293 931,744
Npf Xi Inc. 8.19% 07/01/01............................ 100,000 101,350
Rental Car Fin Grp 6.45% 04/25/03..................... 725,000 725,851
Team Fleet Fing Corp. 7.35% 05/15/03.................. 325,000 335,215
Team Fleet Fing Corp. 6.65% 12/15/02****.............. 250,000 251,266
Wfs Financial Owner Tr 6.25% 03/20/02................. 650,000 650,058
World Financial Propertys Tower B 6.91% 09/01/13...... 1,257,113 1,287,409
World Omni Automobile Lease 6.07% 11/25/03............ 675,000 674,531
------------
12,729,513
------------
ELECTRIC UTILITIES
Edison Mission Energy Funding Corp. 7.33%
09/15/08****......................................... 200,000 208,876
Israel Elec Corp. Ltd 7.25% 12/15/06****.............. 160,000 163,216
Israel Electric 7.75% 12/17/07........................ 350,000 355,313
Samsung Electrs Ltd 7.45% 10/01/02****................ 115,000 88,675
------------
816,080
------------
FINANCE AND BANKING
Bankamerica Institutional Capital A 8.07%
12/31/26****......................................... 725,000 775,373
Beneficial Corp. Mtn Bk Entry 6.47% 11/17/08.......... 405,000 401,817
Beverly Finance 8.36% 07/15/04........................ 250,000 269,883
BT Institutional Capital Tr A 8.09% 12/01/26****...... 650,000 682,676
Corestates Capital 8.00% 12/15/26****................. 725,000 765,216
Creekwood Cap Corp. 8.47% 03/16/15****................ 240,988 270,829
Equitable Life Assur Soc USA 6.95% 12/01/05****....... 250,000 255,398
Excel Paralubes Funding Corp. 7.43% 11/01/15****...... 250,000 266,160
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-27
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
BALANCED FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL VALUE
----------- ------------
<S> <C> <C>
Farmers Insurance Exch 8.63% 05/01/24****............. $ 625,000 $ 723,094
First Chicago Nbd Institutional Capital 7.95%
12/01/26****......................................... 625,000 654,081
First Un Inst Capital I 8.04% 12/01/26................ 650,000 685,087
Great Wesn Financial Tr Ii 8.21% 02/01/27............. 140,000 148,487
John Hancock Mut Life Insurance Company 7.38%
02/14/24............................................. 250,000 262,298
Hutchison Whampoa Fin C I Ltd 7.45% 08/01/17 ADR**.... 320,000 309,568
Korea Devbk 7.38% 09/17/04............................ 665,000 532,140
Metropolitan Life Insurance Company 7.45%
11/01/23****......................................... 500,000 512,550
Nationwide Mutual Life 7.50% 02/15/24................. 500,000 504,175
NB Capital Triv 8.25% 04/15/27****.................... 485,000 529,261
New York Life Insurance Cor 7.50% 12/15/23............ 250,000 253,845
Petrozuata Fin Inc. 8.22% 04/01/17.................... 600,000 638,232
PNC Institutional Cap Tr A 7.95% 12/15/26............. 350,000 370,594
Rhone Poulenc A3 8.62% 01/05/21....................... 350,000 393,078
Scotia Pacific Hldg Corp. 7.95% 07/20/15.............. 207,770 216,961
Town & Ctry Funding Corp. 5.85% 08/15/98.............. 450,000 448,389
Washington Mut Capital I 8.38% 06/01/27............... 240,000 264,571
Wells Fargo Capital A 8.13% 12/01/26****.............. 495,000 532,457
Wells Fargo Capital I 7.96% 12/15/26.................. 225,000 236,567
Zurich Capital Trust 8.38% 06/01/37****............... 415,000 452,234
------------
12,355,021
------------
INDUSTRIALS
AST Resh Inc. 7.45% 10/01/02****...................... 475,000 366,268
Jet Equip Tr 10.00% 06/15/12****...................... 350,000 447,867
Oil Pur Company 7.10% 04/30/02****.................... 400,000 400,356
Paiton Energy 9.34% 02/15/14****...................... 225,000 193,106
Philip Morris Companies Inc. 6.38% 02/01/06........... 250,000 245,538
------------
1,653,135
------------
MISCELLANEOUS
Alcoa Aluminio S A 7.50% 12/16/08..................... 643,318 648,606
Anthem Insurance Companies Inc. Disc Coml 9.00%
04/15/27****......................................... 475,000 522,719
Florida Residential Property & Casualty 7.38%
07/01/03****......................................... 525,000 545,281
Florida Residential Property & Casualty 7.45%
07/01/04****......................................... 100,000 104,543
Florida Windstorm Underwriting 5.50% 03/31/23****..... 200,000 201,584
News Amerhldgs Inc. 7.75% 01/20/24.................... 100,000 104,058
News Amerhldgs Inc. 7.75% 02/01/24.................... 170,000 177,827
Petroliam Nasional Berhad 7.13% 10/18/06 ADR** ****... 575,000 545,543
Prime Property Funding Ii Inc. 7.00% 08/15/04****..... 495,000 506,519
Railcar Leasing Llc 7.13% 01/15/13****................ 375,000 394,886
------------
3,751,566
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-28
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
BALANCED FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL VALUE
----------- ------------
<S> <C> <C>
OTHER
Fifty Seventh Str Tr Assocs LLC 7.13% 06/01/17****..... $ 247,988 $ 254,726
Oxymar 7.50% 02/15/16.................................. 175,000 177,564
------------
432,290
------------
OTHER UTILITIES
Mobile Energy Services Company LLC 8.67% 01/01/17...... 208,582 234,042
Ras Laffan Liquefied Nat Gas 8.29% 03/15/14****........ 425,000 396,903
------------
630,945
------------
TOTAL CORPORATE BONDS.................................. 32,368,550
------------
FOREIGN BONDS (0.2%)
CORPORATE
Hyundai Semicon 8.63% 05/15/07 ADR**................... 370,000 271,813
------------
GOVERNMENT
Columbia Rep 8.70% 02/15/16 ADR**...................... 440,000 428,208
------------
TOTAL FOREIGN BONDS.................................... 700,021
------------
MORTGAGE RELATED (6.6%)
FEDERAL AGENCIES
FHLMC PC Gtd. 549859 11.00% 09/01/20................... 118,884 134,412
FHLMC PC Gtd. 554922 10.50% 12/01/20................... 300,352 334,805
FHLMC PC Gtd. 555283 10.00% 09/01/17................... 384,241 420,379
FHLMC PC Gtd. 555293 10.00% 11/01/20................... 340,589 372,359
FHLMC PC Gtd. D06744 10.50% 08/01/19................... 103,262 113,012
FHLMC PC Gtd. D06959 10.50% 04/01/16................... 117,257 129,174
FHLMC PC Gtd. G00035 10.50% 02/01/21................... 146,503 161,824
------------
1,665,965
------------
GOVERNMENT SPONSORED
FNMA Pool 303157 10.00% 05/01/22....................... 197,057 215,844
FNMA Pool 303554 11.50% 09/01/25....................... 142,214 161,767
------------
377,611
------------
OTHER COLLATERALIZED MORTGAGE OBLIGATIONS
AFC Mortgage Ln Tr 8.07% 09/25/27...................... 299,999 310,499
Alps 94 1Pass Thru Tr 7.80% 09/15/04................... 225,000 230,226
Alps 94/1Pass Thru Tr 9.35% 09/15/04................... 248,732 254,503
DLJ Mortgage Acceptance Corp. 7.58% 03/13/28****....... 250,000 266,446
DLJ Mortgage Acceptance Corp. 7.40% 06/01/03........... 417,060 433,328
DLJ Mortgage Acceptance Corp. 7.20% 07/14/03........... 265,331 273,937
Mid St Tr II 9.62% 04/01/03............................ 500,000 540,567
------------
2,309,506
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-29
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
BALANCED FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL VALUE
----------- ------------
<S> <C> <C>
OTHER MARKETABLE
Airplanes Pass Through Tr 6.60% 03/15/19*****......... $ 129,816 $ 129,813
FHLMC Pc Gtd 9.50% 04/15/20........................... 110,488 123,228
FHLMC Pc Gtd 10.00% 05/15/20.......................... 325,000 356,688
FHLMC Pc Gtd 10.00% 06/15/20.......................... 205,000 228,063
FNMA Remic 8.50% 09/25/20............................. 276,799 292,540
Prime Property Fd 6.63% 07/23/03****.................. 172,643 173,737
Rural Hsg Tr 1987 1 3.33% 04/01/26.................... 266,249 254,623
Wfs Financial Owner Tr 6.10% 03/20/02................. 640,000 638,459
------------
2,197,151
------------
U.S. GUARANTEED
GNMA II Arm TBA 6.00% 12/20/99***..................... 1,300,000 1,313,611
GNMA II Pool 080114 6.00% 09/20/27.................... 2,458,468 2,479,417
GNMA Pool 008611 7.00% 03/20/25....................... 591,483 608,393
GNMA Pool 008621 7.00% 04/20/25....................... 356,322 367,011
GNMA Pool 008631 7.38% 05/20/25....................... 1,187,647 1,223,086
GNMA Pool 008634 7.38% 05/20/25....................... 290,222 297,105
GNMA Pool 008664 7.00% 07/20/25....................... 2,878,074 2,942,276
GNMA Pool 033635 11.00% 12/15/09...................... 2,344 2,630
GNMA Pool 034701 11.00% 01/15/10...................... 16,185 18,157
GNMA Pool 038109 11.00% 02/15/10...................... 956 1,072
GNMA Pool 040492 11.00% 07/15/10...................... 15,796 17,721
GNMA Pool 041749 11.00% 07/15/10...................... 34,169 38,482
GNMA Pool 041987 11.00% 08/15/10...................... 4,464 5,028
GNMA Pool 042354 11.00% 08/15/10...................... 14,194 15,985
GNMA Pool 058816 11.00% 01/15/13...................... 1,723 1,951
GNMA Pool 134123 11.00% 09/15/15...................... 17,254 19,686
GNMA Pool 139478 10.50% 09/15/15...................... 35,732 40,039
GNMA Pool 141387 11.00% 10/15/15...................... 10,846 12,374
GNMA Pool 174472 10.00% 11/15/16...................... 145,321 161,119
GNMA Pool 180521 10.00% 12/15/16...................... 112,996 124,522
GNMA Pool 223520 10.00% 03/15/18...................... 126,313 140,467
GNMA Pool 231157 10.00% 06/15/18...................... 122,348 136,059
GNMA Pool 232061 10.50% 09/15/17...................... 154,273 173,382
GNMA Pool 269159 10.00% 06/15/19...................... 28,971 32,237
GNMA Pool 274800 10.50% 05/15/19...................... 1,732 1,951
GNMA Pool 277908 10.00% 10/15/19...................... 29,151 32,473
GNMA Pool 285191 10.50% 03/15/20...................... 32,986 37,072
GNMA Pool 287170 10.50% 08/15/20...................... 134,385 151,534
GNMA Pool 780056 11.00% 09/15/17...................... 332,553 377,751
GNMA Pool 780103 11.00% 02/15/25...................... 355,328 405,411
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-30
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
BALANCED FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL VALUE
----------- ------------
<S> <C> <C>
GNMA Pool 780488 10.00% 10/15/21..................... $ 136,375 $ 151,918
GNMA Pool 780496 10.50% 12/15/17..................... 352,422 395,523
GNMA Pool 780554 10.00% 05/15/19..................... 3,012,840 3,352,448
GNMA Pool 780595 11.00% 08/15/17..................... 1,119,806 1,285,157
GNMA Pool II 6.00% 11/15/27.......................... 617,376 623,938
------------
16,986,986
------------
TOTAL MORTGAGE RELATED............................... 23,537,219
------------
U.S. TREASURY (18.2%)
DIRECT
United States Treasury Bonds 8.75% 08/15/20.......... 8,480,000 11,311,557
United States Treasury Notes 3.38% 01/15/07.......... 4,245,193 4,133,757
United States Treasury Notes 7.50% 02/15/05.......... 19,720,000 21,673,463
United States Treasury Notes 7.13% 02/29/00.......... 2,600,000 2,675,166
United States Treasury Notes 6.25% 05/31/99.......... 3,025,000 3,049,109
United States Treasury Notes 6.75% 06/30/99.......... 4,750,000 4,823,483
United States Treasury Notes 3.63% 07/15/02.......... 1,406,685 1,399,667
United States Treasury Notes 7.13% 09/30/99*******... 12,100,000 12,387,375
United States Tres Bd Strp Prn (PO) 0.00%
02/15/19******...................................... 13,100,000 3,674,943
------------
65,128,520
------------
TOTAL U.S. TREASURY.................................. 65,128,520
------------
YANKEE BOND (0.1%)
INDUSTRIALS
News Amerhldgs Inc. 8.880% 04/26/23.................. 330,000 386,091
------------
TOTAL FIXED INCOME (Cost $119,587,059)............... 122,120,401
------------
<CAPTION>
SHARES
-----------
<S> <C> <C>
PREFERRED STOCK (0.4%)
Entertainment Property Inc. Pfd.****................. 200 189,042
Home Ownership Pfd.****.............................. 1,250 1,215,581
Tier One Propertys Inc. Pfd.****..................... 125 121,398
------------
TOTAL PREFERRED STOCKS (Cost $1,579,307)............. 1,526,021
------------
<CAPTION>
UNITS
-----------
<S> <C> <C>
SHORT TERM INVESTMENTS (COST $12,060,699) (3.4%)
State Street Bank Yield Enhanced Short Term Invest-
ment Fund........................................... 12,060,699 12,060,699
------------
TOTAL INVESTMENTS (COST $345,397,782) (100.8%)....... 361,378,330
Liabilities less Other Assets (-0.8%)................ (2,875,563)
------------
NET ASSETS (100.0%).................................. $358,502,767
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-31
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
BALANCED FUND
DECEMBER 31, 1997
- --------
* Non-income producing security.
** An American Depositary Receipt (ADR) is a certificate issued by a
U.S. bank representing the right to receive securities of the foreign
issuer described.
*** To be announced (TBA) securities are purchased (sold) on a forward
commitment basis with an approximate principal amount and no definite
maturity date. The actual principal amount and maturity date will be
determined upon settlement.
**** Security is restricted in accordance with Rule 144A under the
Securities Act of 1933, which allows for the resale of such
securities only to certain qualified buyers. The total cost and
market value of Rule 144A securities owned at December 31, 1997 were
$15,502,425 and $15,763,325, respectively.
***** Variable rate security. The rate shown reflects rate currently in
effect.
****** Stripped asset backed securities represent the splitting of cash
flows arising from U.S treasury securities into several classes which
vary by the proportion of the payments on the certificate
representing interest only (IO equals Int.), or principal only (PO
equals PRN).
******* Portion of the security is segregated as collateral for TBA
purchases.
The accompanying notes are an integral part of these financial statements.
F-32
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
GROWTH EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost $784,740,022)......................... $970,886,148
Cash.............................................................. 61,632
Receivable for investments sold................................... 3,292,653
Receivable for fund units sold.................................... 336,426
Dividends and interest receivable................................. 1,032,505
Unamortized organizational costs.................................. 142,764
Other receivables................................................. 19,377
------------
Total Assets.................................................... 975,771,505
------------
LIABILITIES
Payable for investments purchased................................. 7,139,606
Investment advisory fee payable................................... 364,099
State Street Bank and Trust Company--program fee payable.......... 272,444
Trustee, management and administration fees payable............... 57,459
American Bar Retirement Association--program fee payable.......... 41,506
Other accruals.................................................... 42,406
------------
Total Liabilities............................................... 7,917,520
------------
NET ASSETS (equivalent to $359.82 per unit based on 2,689,796
units outstanding)............................................... $967,853,985
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-33
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
GROWTH EQUITY FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends (net of foreign tax expense of $148,162).............. $ 9,698,288
Interest........................................................ 1,590,872
------------
Total investment income....................................... 11,289,160
------------
EXPENSES
Investment advisory fee......................................... 2,288,957
State Street Bank and Trust Company--program fee................ 3,056,748
Trustee, management and administration fees..................... 639,718
American Bar Retirement Association--program fee................ 446,549
Reports to unitholders.......................................... 138,707
Amortization of organization costs.............................. 218,466
Legal and audit fees............................................ 117,590
Registration fee................................................ 131,502
Other expenses.................................................. 35,895
------------
Total expenses................................................ 7,074,132
------------
Net investment income............................................. 4,215,028
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain............................................... 219,100,674
Change in net unrealized appreciation........................... (1,756,692)
------------
Net realized and unrealized gain on investments............... 217,343,982
------------
Net increase in net assets resulting from operations............ $221,559,010
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-34
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
GROWTH EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE
YEAR ENDED
DECEMBER 31,
---------------------------
1996 1997
------------ -------------
<S> <C> <C>
FROM OPERATIONS
Net investment income........................... $ 7,885,241 $ 4,215,028
Net realized gain on investments................ 77,526,269 219,100,674
Net change in unrealized appreciation on invest-
ments.......................................... 50,117,149 (1,756,692)
------------ -------------
Net increase in net assets resulting from op-
erations..................................... 135,528,659 221,559,010
------------ -------------
FROM UNITHOLDER TRANSACTIONS
Proceeds from units issued...................... 36,326,804 283,226,911
Cost of units redeemed.......................... (56,891,452) (289,729,985)
------------ -------------
Net decrease in net assets resulting from
unitholder transactions...................... (20,564,648) (6,503,074)
------------ -------------
Net increase in net assets.................... 114,964,011 215,055,936
NET ASSETS
Beginning of year............................... 637,834,038 752,798,049
------------ -------------
End of year..................................... $752,798,049 $ 967,853,985
============ =============
NUMBER OF UNITS
Outstanding--beginning of year.................. 2,781,980 2,705,373
Sold.......................................... 146,346 865,694
Redeemed...................................... (222,953) (881,271)
------------ -------------
Outstanding--end of year........................ 2,705,373 2,689,796
============ =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-35
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
GROWTH EQUITY FUND
SELECTED PER-UNIT DATA AND RATIOS
(For a unit outstanding throughout the year)*
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 2, 1992
(COMMENCEMENT FOR THE YEAR ENDED
OF OPERATIONS) TO DECEMBER 31,
DECEMBER 31, ------------------------------------------------
1992 1993 1994 1995 1996 1997
----------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Investment income....... $ 3.20 $ 3.16 $ 3.48 $ 3.88 $ 5.07 $ 4.15
Expenses................ (1.45) (1.52) (1.60) (1.88) (2.22) (2.60)
-------- -------- -------- -------- -------- --------
Net investment income... 1.75 1.64 1.88 2.00 2.85 1.55
Net realized and
unrealized gain on
investments............ 3.00 12.99 .61 57.72 46.14 80.01
-------- -------- -------- -------- -------- --------
Net increase............ 4.75 14.63 2.49 59.72 48.99 81.56
Net asset value at be-
ginning of year........ 147.68 152.43 167.06 169.55 229.27 278.26
-------- -------- -------- -------- -------- --------
Net asset value at end
of year................ $ 152.43 $ 167.06 $ 169.55 $ 229.27 $ 278.26 $ 359.82
======== ======== ======== ======== ======== ========
Ratio of expenses to av-
erage net assets....... 1.01%**** .96% .95% .92% .88% .80%
Ratio of net investment
income to average net
assets................. 1.22%**** 1.03% 1.12% .98% 1.13% .48%
Portfolio turnover...... 46%*** 82% 59% 60% 64% 88%
Total return............ 3.22%*** 9.60% 1.49% 35.23% 21.37% 29.31%
Average commissions
rate**................. -- -- -- -- $ 0.0564 $ 0.0516
Net assets at end of
year (in thousands).... $427,933 $471,398 $479,435 $637,834 $752,798 $967,854
</TABLE>
- --------
*Calculations prepared using the monthly average number of units outstanding
during the year.
** Average commissions rate paid is presented for fiscal periods beginning on
or after September 1, 1995.
***Not annualized.
****Ratios annualized.
The accompanying notes are an integral part of these financial statements.
F-36
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
COMMON STOCK (97.6%)
BASIC INDUSTRIES (4.9%)
ALUMINUM
Aluminum Company Amer.................................. 36,600 $ 2,575,725
------------
CHEMICALS
Air Products & Chemicals Inc. ......................... 40,200 3,306,450
Betzdearborn Inc. ..................................... 1,000 61,063
Crompton & Knowles Corp. .............................. 5,200 137,800
Cytec Inds Inc.*....................................... 2,200 103,263
Du Pont EI De Nemours & Company........................ 39,400 2,366,463
Georgia Gulf Corp. .................................... 6,200 189,875
Goodrich B F Company................................... 1,600 66,300
Grace W R & Company Del................................ 82,400 6,628,051
Hercules Inc. ......................................... 5,800 290,363
Monsanto Company....................................... 244,300 10,260,600
Morton Int'l Inc. Industries New....................... 1,700 58,438
PPG Inds Inc. ......................................... 1,200 68,550
Praxair Inc. .......................................... 69,200 3,114,000
Sigma Aldrich.......................................... 2,500 99,375
Valspar Corp. ......................................... 1,200 38,250
Witco Corp. ........................................... 500 20,406
Zeneca Group PLC ADR**................................. 51,500 5,562,000
------------
32,371,247
------------
CONTAINERS AND GLASS
Bemis Inc. ............................................ 1,800 79,313
Crown Cork & Seal Inc. ................................ 2,300 115,288
Owens Illinois Inc.*................................... 5,800 220,038
Corning Inc. .......................................... 13,700 508,613
------------
923,252
------------
GOLD
Battle Mountain Gold Company........................... 2,300 13,513
Newmont Mining Corp. .................................. 9,900 290,813
------------
304,326
------------
MINING
Freeport Mcmoran Copper & Gold......................... 11,600 182,700
------------
NON-FERROUS METALS
Engelhard Corp. ....................................... 4,300 74,713
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-37
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
PAPER
Kimberly Clark Corp. .................................. 85,700 $ 4,226,082
Minnesota Mining & Manufacturing Company............... 11,600 951,925
------------
5,178,007
------------
PLASTICS
Illinois Tool Wks Inc. ................................ 71,900 4,322,988
Sealed Air Corp. ...................................... 2,300 142,025
------------
4,465,013
------------
STEEL
Allegheny Teldyne Inc. ................................ 7,900 204,413
Nucor Corp. ........................................... 4,400 212,575
Precisioncast Parts Corp. ............................. 900 54,281
------------
471,269
------------
TOTAL BASIC INDUSTRIES................................. 46,546,252
------------
CAPITAL GOODS (6.1%)
BUILDING CONSTRUCTION
Fluor Corp. ........................................... 2,500 93,438
------------
BUILDING SUPPLIES
Applied Materials Inc.*................................ 225,300 6,787,163
------------
CONSTRUCTION AND MINING EQUIPMENT
Dover Corp. ........................................... 85,800 3,099,525
Harnischfeger Industries Inc. ......................... 1,000 35,313
------------
3,134,838
------------
ELECTRICAL EQUIPMENT
American Power Conversion Corp.*....................... 5,300 125,213
Arrow Electronics Inc.*................................ 600 19,463
ASM Lithography Hldg N V ADR* **....................... 29,600 1,998,000
Atmel Corp.*........................................... 5,300 98,381
AVX Corp. New.......................................... 900 16,594
Dentsply Int'l Inc. New................................ 3,600 109,800
Emerson Electric Company............................... 7,400 417,638
General Electric Company............................... 467,500 34,302,813
Johnson Ctls Inc. ..................................... 53,000 2,530,750
Millipore Corp. ....................................... 1,800 61,088
Philips Electrs N V ADR**.............................. 4,500 272,250
Raychem Corp. ......................................... 5,800 249,763
Ucar Int'l Inc.*....................................... 2,300 91,856
------------
40,293,609
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-38
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
INDUSTRIAL MACHINERY
AES Corp. ............................................. 57,500 $ 2,680,938
American Standard Companies Inc. Del*.................. 5,000 191,563
Crane Company.......................................... 4,500 195,188
Pall Corp. ............................................ 8,600 177,913
Presstek Inc.*......................................... 1,000 25,750
Thermo Electron Corp.*................................. 8,100 360,450
U.S. Filter Corp.*..................................... 3,900 116,756
------------
3,748,558
------------
MISCELLANEOUS
Varian Assoc Inc. ..................................... 1,300 65,731
------------
POLLUTION CONTROL
Browning Ferris Industries Inc. ....................... 68,700 2,541,900
Republic Industries Inc.*.............................. 106,200 2,475,788
USA Waste Services Inc.*............................... 9,120 357,960
------------
5,375,648
------------
TOTAL CAPITAL GOODS.................................... 59,498,985
------------
CONSUMER BASICS (34.2%)
DRUGS AND HEALTHCARE
Abbott Labs............................................ 77,100 5,054,869
Alza Corp.*............................................ 74,300 2,363,669
American Home Products Corp. .......................... 62,800 4,804,200
Amgen Inc. ............................................ 41,700 2,257,013
Astra AB ADR**......................................... 195,666 3,363,009
Baxter Int'l Inc. ..................................... 15,300 771,694
Becton Dickinson & Company............................. 7,200 360,000
Bergen Brunswig Corp. ................................. 33,400 1,406,975
Biogen Inc.*........................................... 4,300 156,413
Biomet Inc. ........................................... 7,000 179,375
Boston Scientific Corp.*............................... 7,200 330,300
Bristol Myers Squibb Company........................... 123,400 11,676,725
Cardinal Health Inc. .................................. 53,050 3,985,381
Centocor Inc.*......................................... 74,700 2,483,775
Chiron Corp.*.......................................... 11,000 187,000
Columbia/HCA Healthcare Corp........................... 18,000 533,250
Dura Pharmaceuticals Inc.*............................. 2,800 128,450
Forest Labs Inc. ...................................... 1,800 88,763
General Nutrition Companies Inc.*...................... 5,600 190,400
Genesis Health Ventures Inc.*.......................... 1,600 42,200
Genzyme Corp.*......................................... 3,300 91,575
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-39
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
Guidant Corp. ......................................... 195,500 $ 12,169,875
Health Care & Retirement Corp.*........................ 1,600 64,400
Health Management Assoc.*.............................. 7,350 185,588
Healthcare Compare Corp.*.............................. 23,400 1,196,325
Healthsouth Corp.*..................................... 20,800 577,200
Immunex Corp. New*..................................... 1,500 81,000
Johnson & Johnson...................................... 117,100 7,713,963
Lilly Eli & Company.................................... 368,800 25,677,700
Lincare Holdings Inc.*................................. 2,300 131,100
McKesson Corp. New..................................... 1,200 129,825
Medtronic Inc. ........................................ 128,400 6,716,925
Merck & Company Inc. .................................. 166,000 17,637,500
Mylan Labs Inc. ....................................... 5,200 108,875
Omnicare Inc. ......................................... 3,800 117,800
Oxford Health Plans Inc.*.............................. 4,400 68,475
Pacificare Health Systems*............................. 38,300 2,001,713
Pfizer Inc. ........................................... 472,800 35,253,151
Phycor Inc.*........................................... 48,800 1,317,600
Quorum Health Group Inc.*.............................. 5,550 144,994
Sangstat Med Corp.*.................................... 46,800 1,895,400
Scherer Rp Corp. Del*.................................. 1,000 61,000
Schering Plough Corp. ................................. 42,100 2,615,463
Smithkline Beecham PLC................................. 264,500 13,605,219
Sofamor/Danek Group Inc.*.............................. 45,900 2,986,369
St Jude Med Inc. ...................................... 4,300 131,150
Stryker Corp. ......................................... 3,600 134,100
Sybron Int'l Corp. Wisconsin*.......................... 2,000 93,875
Tenet Healthcare Corp.*................................ 70,900 2,348,563
United Healthcare Corp. ............................... 95,400 4,740,188
United States Surgical Corp. .......................... 1,800 52,763
Vencor Inc.*........................................... 4,200 102,638
Warner Lambert Company................................. 64,800 8,035,200
Watson Pharmaceuticals Inc.*........................... 5,200 168,675
Wellpoint Health Networks Inc.*........................ 1,100 46,475
------------
188,766,123
------------
FOOD AND BEVERAGE
Campbell Soup Company.................................. 59,100 3,435,188
Coca Cola Company...................................... 371,100 24,724,538
Coca Cola Enterprises Inc. ............................ 122,900 4,370,632
Conagra Inc. .......................................... 121,500 3,986,719
Cpc Int'l Inc. ........................................ 6,900 743,475
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-40
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
General Mls Inc. ...................................... 7,200 $ 515,700
Heinz HJ Company....................................... 8,200 416,663
Hershey Foods Corp. ................................... 3,100 192,006
Interstate Bakeries Corp. ............................. 1,600 59,800
Kellogg Company........................................ 53,400 2,649,975
McCormick & Company Inc. .............................. 1,900 53,200
Nabisco Holdings Corp. ................................ 29,200 1,414,375
Nestle S A ADR**....................................... 26,000 1,940,250
Outback Steakhouse Inc.*............................... 3,400 97,750
Pepsico Inc. .......................................... 375,600 13,685,925
Pioneer Hi Bred Int'l Inc. ............................ 4,540 486,915
Quaker Oats Company.................................... 2,200 116,050
Ralston Purina Company................................. 5,300 492,569
Sara Lee Corp. ........................................ 16,000 901,000
Sysco Corp. ........................................... 9,100 414,619
Tyson Foods Inc. (Del)................................. 2,500 51,250
Whitman Corp. ......................................... 3,600 93,825
Wrigley Wm Jr Company.................................. 6,400 509,200
------------
61,351,624
------------
HOUSEHOLD PRODUCTS
Clorox Company......................................... 4,600 363,688
Colgate Palmolive Company.............................. 136,100 10,003,350
Dial Corp. New......................................... 4,700 97,819
Gillette Company....................................... 148,800 14,945,101
Hillenbrand Inds Inc. ................................. 2,100 107,494
Procter & Gamble Company............................... 296,600 23,672,388
Rubbermaid Inc. ....................................... 8,700 217,500
Tupperware Corp. ...................................... 3,000 83,625
Unilever N V ADR**..................................... 82,000 5,119,875
------------
54,610,840
------------
RETAIL GROCERY
Albertsons Inc. ....................................... 6,300 298,463
Kroger Company*........................................ 11,700 432,169
Safeway Inc.*.......................................... 49,400 3,124,550
Starbucks Corp.*....................................... 5,200 199,550
------------
4,054,732
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-41
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
TOBACCO
Philip Morris Companies Inc. .......................... 487,700 $ 22,098,907
UST Inc. .............................................. 11,000 406,313
------------
22,505,220
------------
TOTAL CONSUMER BASICS.................................. 331,288,539
------------
CONSUMER DURABLE GOODS (0.8%)
AUTO PARTS
Autoliv................................................ 1,500 49,125
Borg Warner Automotive Inc. ........................... 400 20,800
Danaher Corp. ......................................... 1,400 88,375
Eaton Corp. ........................................... 4,000 357,000
------------
515,300
------------
AUTOMOBILES
Federal Signal Corp. .................................. 1,400 30,275
Ford Mtr Company Del................................... 95,000 4,625,313
Harley Davidson Inc. .................................. 7,800 213,525
Lear Corp.*............................................ 2,000 95,000
Volvo Aktiebolaget ADR**............................... 52,000 1,404,000
------------
6,368,113
------------
HOUSEHOLD APPLIANCES
Leggett & Platt Inc. .................................. 4,500 188,438
Newell Company......................................... 10,300 437,750
Sunbeam Corp. Del New.................................. 4,000 168,500
Westpoint Stevens Inc.*................................ 1,700 80,325
------------
875,013
------------
TOTAL CONSUMER DURABLE GOODS........................... 7,758,426
------------
CONSUMER NON-DURABLE GOODS (5.8%)
APPAREL AND TEXTILES
Cintas Corp. .......................................... 2,600 101,400
Fruit Of The Loom Inc.*................................ 1,600 41,000
Gucci Group N V ADR**.................................. 11,400 477,375
Jones Apparel Group Inc.*.............................. 2,600 111,800
Liz Claiborne Inc. .................................... 61,500 2,571,469
Nike Inc. ............................................. 61,500 2,413,875
Reebok Int'l Ltd. ..................................... 1,300 37,456
Unifi Inc. ............................................ 2,300 93,581
V F Corp. ............................................. 42,400 1,947,750
Warnaco Group Inc. .................................... 2,300 72,163
Wolverine Worldwide Inc. .............................. 2,900 65,613
------------
7,933,482
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-42
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
COSMETICS
Avon Prods Inc. ....................................... 68,000 $ 4,173,500
International Flavours................................. 3,000 154,500
Lauder Estee Companies Inc. ........................... 2,700 138,881
Revlon Inc.*........................................... 37,700 1,331,282
------------
5,798,163
------------
LIQUOR
Anheuser Busch Companies Inc. ......................... 55,100 2,424,400
------------
PHOTOGRAPHY
Eastman Kodak Company.................................. 3,400 206,763
------------
RETAIL TRADE
Autozone Inc.*......................................... 9,900 287,100
Barnes & Noble Inc.*................................... 1,500 50,063
Bed Bath & Beyond Inc.*................................ 40,300 1,551,550
Borders Group Inc.*.................................... 3,600 112,725
Circuit City Stores Inc. .............................. 5,100 181,369
Compusa Inc.*.......................................... 4,900 151,900
Consolidated Stores Corp.*............................. 60,750 2,669,204
Costco Companies Inc. ................................. 10,800 481,950
CVS Corp. ............................................. 18,100 1,159,531
Dayton Hudson Corp. ................................... 3,300 222,750
Dollar General Corp. .................................. 5,750 208,438
Dollar Tree Stores Inc.*............................... 2,100 86,888
Family Dollar Stores Inc. ............................. 35,100 1,028,869
Federated Dept Stores Inc. Del*........................ 3,500 150,719
Gap Inc. .............................................. 19,350 685,716
Home Depot Inc. ....................................... 84,750 4,989,656
Kohls Corp.*........................................... 3,400 231,625
Lowes Companies Inc. .................................. 119,300 5,689,119
May Dept Stores Company................................ 48,500 2,555,344
Nordstrom Inc. ........................................ 900 54,338
Office Depot Inc.*..................................... 4,600 110,113
Pep Boys Manny Moe & Jack.............................. 3,000 71,625
Petsmart Inc.*......................................... 7,400 53,650
Rite Aid Corp. ........................................ 4,300 252,356
Ross Stores Inc. ...................................... 3,400 123,675
Sears Roebuck & Company................................ 51,200 2,316,800
Staples Inc.*.......................................... 10,600 294,150
Tiffany & Company New.................................. 1,300 46,881
TJX Companies Inc. New................................. 11,800 405,625
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-43
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
Wal Mart Stores Inc. .................................. 104,300 $ 4,113,331
Walgreen Company....................................... 27,800 872,225
Woolworth Corp. ....................................... 141,900 2,891,213
------------
34,100,498
------------
TOYS, AMUSEMENTS, & SPORTING GOODS
Callaway Golf Company.................................. 4,300 122,819
Hasbro Inc. ........................................... 96,300 3,033,450
Mattel Inc. ........................................... 77,200 2,875,700
------------
6,031,969
------------
TOTAL CONSUMER NON-DURABLE GOODS....................... 56,495,275
------------
CONSUMER SERVICES (2.3%)
AIR TRAVEL
Comair Hldgs Inc. ..................................... 5,650 136,306
------------
HOTELS & RESTAURANTS
Boston Chicken Inc.*................................... 1,400 9,013
Cracker Barrel Old Ctry Store.......................... 4,000 133,500
Hilton Hotels Corp. ................................... 6,800 202,300
Host Marriott Corp.*................................... 250,000 4,906,250
ITT Corp. New*......................................... 6,700 555,263
La Quinta Inns Inc. ................................... 2,400 46,350
Marriot Int'l Inc. .................................... 6,600 457,050
McDonalds Corp. ....................................... 36,100 1,723,775
Mirage Resorts Inc.*................................... 11,100 252,525
Wendys Int'l Inc. ..................................... 4,600 110,688
------------
8,396,714
------------
LEISURE TIME
Brunswick Corp. ....................................... 1,000 30,313
Carnival Corp. ADR**................................... 43,000 2,381,125
Circus Circus Enterprises Inc.*........................ 3,500 71,750
Disney Walt Company.................................... 108,879 10,785,826
International Game Technology.......................... 4,800 121,200
Regal Cinemas Inc.*.................................... 2,400 66,900
------------
13,457,114
------------
TOTAL CONSUMER SERVICES................................ 21,990,134
------------
ENERGY (3.6%)
DOMESTIC OIL
Atlantic Richfield Company............................. 21,600 1,730,700
Noble Affiliates Inc. ................................. 24,500 863,625
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-44
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
Pennzoil Company....................................... 1,200 $ 80,175
Pogo Producing Company................................. 1,400 41,300
Unocal Corp. .......................................... 3,200 124,200
------------
2,840,000
------------
GAS EXPLORATION
Anadarko Pete Corp. ................................... 3,200 194,200
Apache Corp. .......................................... 1,600 56,100
BJ Services Company*................................... 27,000 1,942,313
Burlington Res Inc. ................................... 2,987 133,855
Enron Corp. ........................................... 5,800 241,063
Oryx Energy Company.................................... 22,500 573,750
Union Pacific Resources Group Inc. .................... 11,600 281,300
Union Texpete Holdings Inc. ........................... 3,100 64,519
Weatherford Enterra Inc.*.............................. 900 39,375
------------
3,526,475
------------
INTERNATIONAL OIL
British Petroleum PLC ADR**............................ 43,000 3,426,563
Chevron Corp. ......................................... 26,800 2,063,600
Mobil Corp. ........................................... 38,100 2,750,344
Shell Trans & Trading PLC ADR**........................ 87,100 3,810,625
------------
12,051,132
------------
PETROLEUM SERVICES
Baker Hughes Inc. ..................................... 8,200 357,725
Camco Int'l Inc. ...................................... 26,500 1,687,719
Diamond Offshore Drilling Inc. ........................ 4,400 211,750
Dresser Inds Inc. ..................................... 5,300 222,269
Ensco Int'l Inc. ...................................... 7,800 261,300
Global Marine Inc.*.................................... 7,800 191,100
Halliburton Company.................................... 14,400 747,900
Lyondell Petrochemical Company......................... 1,300 34,450
Nabors Industries Inc.*................................ 6,800 213,775
Noble Drilling Corp.*.................................. 7,500 229,688
Reading & Bates Corp.*................................. 5,000 209,375
Renaissance Energy Ltd.*............................... 40,700 840,174
Rowan Companies Inc.*.................................. 4,500 137,250
Schlumberger Ltd. ADR**................................ 32,000 2,576,000
Smith Int'l Inc.*...................................... 2,700 165,713
Talisman Energy Inc.*.................................. 60,500 1,852,192
Tosco Corp. ........................................... 7,400 279,813
Total S A ADR**........................................ 62,000 3,441,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-45
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
Transocean Offshore Inc. .............................. 4,000 $ 192,750
Western Atlas Inc.*.................................... 30,200 2,234,800
------------
16,086,743
------------
TOTAL ENERGY........................................... 34,504,350
------------
FINANCE (10.1%)
BANKS
Bank New York Inc. .................................... 22,000 1,271,875
Bankamerica Corp. ..................................... 69,600 5,080,800
Chase Manhattan Corp. (New)............................ 94,600 10,358,700
Citicorp............................................... 16,100 2,035,644
Cooper Cameron Corp.*.................................. 2,500 152,500
Fifth Third Bancorp.................................... 7,500 613,125
MBNA Corp. ............................................ 25,400 693,738
Mercantile Bancorporation Inc. ........................ 29,400 1,808,100
Northern Trust Corp. .................................. 1,800 125,550
Norwest Corp. ......................................... 91,100 3,518,738
Star Banccorp.......................................... 3,200 183,600
Synovus Finl Corp. .................................... 7,700 252,175
US Bancorp Del......................................... 12,400 1,388,026
Wells Fargo & Company.................................. 13,700 4,650,294
Zions Bancorp.......................................... 2,900 131,588
------------
32,264,453
------------
FINANCIAL SERVICES
American Express Company............................... 21,100 1,883,175
Amresco Inc. .......................................... 72,000 2,178,000
Associates First Cap Corp. ............................ 3,800 270,275
Capital One Financial Corp. ........................... 62,600 3,392,138
Concord EFS Inc.*...................................... 4,000 99,500
Corporate Express Inc.*................................ 6,200 79,825
Countrywide Credit Inds Inc. .......................... 1,300 55,738
Federal Home Loan Mortgage Corp. ...................... 164,000 6,877,751
Federal National Mortgage Association.................. 55,500 3,166,969
Green Tree Financial Corp. ............................ 8,900 233,069
Household Int'l Inc. .................................. 58,200 7,424,138
Money Store Inc. ...................................... 2,700 56,700
Morgan Stanley Dean Witter............................. 900 53,213
Travelers Group Inc. .................................. 12,450 670,744
------------
26,441,235
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-46
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
INSURANCE
Aetna Inc. ............................................ 2,600 $ 183,463
Aflac Inc. ............................................ 5,500 281,188
American Bankers Insurance Group Inc. ................. 1,000 45,938
American Int'l Group Inc. ............................. 96,800 10,527,000
Cincinnati Financial Corp. ............................ 30,529 4,296,957
Conseco Inc. .......................................... 4,000 181,750
Equifax Inc. .......................................... 9,300 329,569
Erie Indty Company..................................... 3,300 97,350
Everest Reinsurance Holdings........................... 1,600 66,000
Exel Ltd. ADR**........................................ 110,800 7,021,950
Foundation Health Sys Inc. ............................ 6,500 145,438
General Re Corp. ...................................... 14,700 3,116,400
Marsh & McLennan Companies Inc. ....................... 3,400 253,513
Medpartners Inc.*...................................... 8,900 199,138
Magic Invtcorp Wis..................................... 7,200 478,800
PMI Group Inc. ........................................ 800 57,850
Progressive Corp. Ohio................................. 2,200 263,725
Provident Companies Inc. .............................. 1,200 46,350
Sunamerica Inc. ....................................... 11,400 487,350
Unum Corp. ............................................ 3,100 168,563
------------
28,248,292
------------
INVESTMENT COMPANIES
Franklin Res Inc. ..................................... 5,100 443,381
Lehman Brothers Hldgs Inc. ............................ 900 45,900
Price T Rowe & Assoc Inc. ............................. 3,200 201,200
Schwab Charles Corp. .................................. 9,900 415,181
United Asset Management Corp. ......................... 2,700 65,981
------------
1,171,643
------------
SAVINGS AND LOAN
Ahmanson H F and Company............................... 50,200 3,360,263
Golden West Financial Corp. Del........................ 37,000 3,619,063
Washington Mutual Inc. ................................ 37,700 2,405,731
------------
9,385,057
------------
TOTAL FINANCE.......................................... 97,510,680
------------
GENERAL BUSINESS (7.0%)
BROADCASTING
Belo A H Corp. ........................................ 1,900 106,638
CBS Corp. ............................................. 47,000 1,383,563
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-47
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
Clear Channel Communications........................... 3,300 $ 262,144
Comcast Corp. ......................................... 20,000 631,250
HBO & Company.......................................... 39,400 1,891,200
HSN Inc.*.............................................. 1,700 87,550
Primedia Inc.*......................................... 5,600 70,700
TCI Satellite Entmt Inc.*.............................. 6,800 46,750
Tele Communications Inc. New*.......................... 97,589 3,173,606
US West Inc.*.......................................... 65,400 1,888,425
Viacom Inc. ........................................... 50,000 2,051,063
------------
11,592,889
------------
BUSINESS SERVICES
Accustaff Inc.*........................................ 5,400 124,200
America Online Inc. Del*............................... 40,600 3,621,013
Apollo Group Inc.*..................................... 2,000 94,500
Automaticdata Processing Inc. ......................... 121,200 7,438,651
Block H&R Inc. ........................................ 3,500 156,844
Cognizant Corp. ....................................... 10,500 467,906
Corrections Corp. America.............................. 4,700 174,194
De Luxe Corp. ......................................... 3,300 113,850
Donnelley RR & Sons Company***......................... 900 33,525
Ecolab Inc. ........................................... 2,500 138,594
First Data Corp. ...................................... 105,200 3,077,100
Fiserv Inc.*........................................... 3,200 157,200
Gartner Group Inc. New*................................ 43,100 1,605,475
Gtech Hldgs Corp.*..................................... 1,800 57,488
Humana Inc. ........................................... 7,100 147,325
Information Res Inc.*.................................. 72,000 963,000
Interpublic Group Companies Inc. ...................... 42,150 2,099,597
Manpower Inc. Wis...................................... 5,300 186,825
Nokia Corp. ADR**...................................... 67,000 4,690,000
Omnicom Group.......................................... 8,400 355,950
Paychex Inc. .......................................... 37,000 1,873,126
Quintilestransnational Corp.*.......................... 51,000 1,950,750
Robert Half Int'l Inc.*................................ 4,650 186,000
Service Corp. Int'l.................................... 15,500 572,531
Stewart Enterprises Inc. .............................. 1,100 51,288
Sun Guard Data Systems*................................ 5,600 173,600
------------
30,510,532
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-48
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
NEWSPAPERS
Gannett Inc. ....................................... 14,600 $ 902,463
Knight Ridder Inc. ................................. 1,100 57,200
New York Times Company.............................. 2,000 132,250
News Corp Ltd. ADR**................................ 71,100 1,528,651
Times Mirror Company New............................ 5,100 313,650
Tribune Company New................................. 5,600 348,600
------------
3,282,814
------------
OFFICE FURNISHINGS AND SUPPLIES
Avery Dennison Corp. ............................... 64,500 2,886,375
Hon Industries Inc. ................................ 1,200 70,800
Ikon Office Solutions Inc. ......................... 4,800 135,000
Lucent Technologies Inc. ........................... 77,100 6,158,363
Miller Herman Inc. ................................. 2,700 147,319
Office Max Inc.*.................................... 5,000 71,250
Reynolds & Reynolds Company......................... 5,600 103,250
Viking Office Prods Inc.*........................... 5,700 124,331
------------
9,696,688
------------
PUBLISHING
Hollinger International Inc. ....................... 300 4,200
Jostens Inc. ....................................... 92,158 2,125,394
McGraw Hill Companies Inc. ......................... 1,900 140,600
Meredith Corp. ..................................... 1,500 53,531
Readers Digest Association Inc. .................... 2,500 59,063
Time Warner Inc. ................................... 99,400 6,162,800
------------
8,545,588
------------
TELECOMMUNICATION SERVICES
Nextel Communications Inc.*......................... 100,000 2,600,000
Sterling Communications Inc.*....................... 38,300 1,472,157
Valassis Communications Inc. ....................... 800 29,600
------------
4,101,757
------------
TOTAL GENERAL BUSINESS.............................. 67,730,268
------------
MISCELLANEOUS (3.5%)
CONGLOMERATES
Harcourt Gen Inc. .................................. 1,900 104,025
Textron Inc. ....................................... 41,100 2,568,750
US Inds Inc. New.................................... 3,900 117,488
------------
2,790,263
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-49
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
MISCELLANEOUS
Blyth Inds Inc.*.................................... 1,800 $ 53,888
Cendant Corp. ...................................... 42,222 1,451,371
Chancellor Media Corp.*............................. 800 59,700
Choicepoint Inc.*................................... 930 44,408
Commscope Inc.*..................................... 1 13
Crescendo Pharmaceuticals Corp.*.................... 260 3,006
Dillards Inc. ...................................... 40,000 1,410,000
Evi Inc.*........................................... 1,000 51,750
Fort James Corp. ................................... 59,812 2,287,809
General Semiconductor Inc.*......................... 900 10,406
Golden Stbancorp Inc.*.............................. 76,000 2,840,500
Keane Inc.*......................................... 3,200 130,000
KLA Tencor Corp.*................................... 101,400 3,916,576
Meyer Fred Inc. Del New*............................ 1,800 65,475
Nextlevel Systems Inc.*............................. 3,900 69,713
Nine Westgroup Inc.*................................ 2,200 57,063
Pioneer Nat Res Company ADR**....................... 90,700 2,624,631
Promus Hotel Corp. New*............................. 43,927 1,844,934
Saks Holdings Inc.*................................. 3,900 80,681
Security Dynamics Tech Inc.*........................ 2,100 75,075
SLM Holding Corp. .................................. 27,200 3,784,201
Solutia Inc. ....................................... 47,460 1,266,589
Steris Corp.*....................................... 2,400 115,800
Tele Communications Inc. New*....................... 17,826 504,699
Teletech Hldgs Inc.*................................ 1,600 18,200
Tricon Global Restaurants Inc.*..................... 18,530 538,528
Tyco Int'l Ltd New.................................. 172,000 7,750,750
Unova Inc.*......................................... 1,700 27,944
------------
31,083,710
------------
REAL ESTATE
Catellus Dev Corp.*................................. 2,900 58,000
Vornado Realty Tr................................... 3,800 178,363
------------
236,363
------------
TOTAL MISCELLANEOUS................................. 34,110,336
------------
SHELTER (0.1%)
CONSTRUCTION MATERIALS
Armstrongworld Inds Inc. ........................... 600 44,850
Fastenal Company.................................... 2,100 80,325
Masco Corp. ........................................ 7,500 381,563
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-50
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
Sherwin Williams Company............................ 1,000 $ 27,750
USG Corp. .......................................... 1,000 49,000
------------
583,488
------------
HOMEBUILDERS
Rouse Company....................................... 3,900 127,725
------------
TOTAL SHELTER....................................... 711,213
------------
TECHNOLOGY (15.6%)
AEROSPACE
Allied Signal Inc. ................................. 27,800 1,082,463
Boeing Company...................................... 154,500 7,560,844
Computer Sciences Corp.*............................ 20,700 1,728,450
Gulfstream Aerospace Corp. New*..................... 4,000 117,000
Lockheed Martin Corp. .............................. 100 9,850
United Technologies Corp. .......................... 42,600 3,101,813
------------
13,600,420
------------
COMPUTERS AND BUSINESS EQUIPMENT
3Com Corp.*......................................... 52,100 1,820,244
Ascend Communications Inc.*......................... 89,630 2,195,935
Bay Networks Inc.*.................................. 11,100 283,744
Cabletronsystems Inc.*.............................. 6,600 99,000
Ceridian Corp.*..................................... 4,100 187,831
Cisco Sysinc*....................................... 278,300 15,515,226
Compaq Computer Corp. .............................. 75,700 4,272,319
Dell Computer Corp.*................................ 75,100 6,308,400
Diebold Inc. ....................................... 4,600 232,875
EMC Corp. Mass*..................................... 80,400 2,205,975
Fore Systems*....................................... 4,400 67,100
Gateway 2000 Inc.*.................................. 4,400 143,550
Hewlett Packard Company............................. 86,100 5,381,250
Ingram Micro Inc.*.................................. 2,000 58,250
International Business Machs........................ 18,000 1,882,125
Iomega Corp.*....................................... 12,600 156,713
Komag Inc.*......................................... 2,200 32,725
Micron Electronics Inc.*............................ 1,100 10,038
Netscape Communications Corp.*...................... 2,741 66,812
Networks Associates Inc.*........................... 3,000 158,625
Novellus Systems Inc.*.............................. 1,600 51,700
Pairgain Technologies Inc.*......................... 4,300 83,313
Peoplesoft Inc.*.................................... 78,800 3,073,200
Pitney Bowes Inc. .................................. 6,600 593,588
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-51
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
Qualcomm Inc.*...................................... 3,800 $ 191,900
Quantum Corp.*...................................... 6,000 120,375
Seagate Technology*................................. 14,400 277,200
Sun Microsystems Inc.*.............................. 51,500 2,053,563
Sundstrand Corp. ................................... 49,900 2,513,713
Symbol Technologies Inc. ........................... 1,200 45,300
Tandy Corp. ........................................ 2,100 80,981
Tech Datacorp*...................................... 1,900 73,863
Unisys Corp. ....................................... 3,500 48,563
Western Digital Corp.*.............................. 5,100 81,919
Xerox Corp. ........................................ 48,500 3,579,907
------------
53,947,822
------------
ELECTRONICS
Adaptec Inc.*....................................... 7,000 259,875
ADC Telecommunications Inc.*........................ 8,100 338,175
Advanced Fibre Communications*...................... 3,800 110,675
Advanced Micro Devices Inc.*........................ 3,900 69,956
Altera Corp.*....................................... 56,300 1,864,938
Amp Inc. ........................................... 4,000 168,000
Analog Devices Inc.*................................ 10,200 282,413
Andrew Corp.*....................................... 5,900 141,600
Avnet Inc. ......................................... 100 6,600
Cambridge Technology Partners M*.................... 2,600 108,225
Ciena Corp.*........................................ 5,700 348,413
Cypress Semiconductor Corp.*........................ 3,100 26,350
Dallas Semiconductor Corp. ......................... 1,700 69,275
DSC Communications Corp.*........................... 42,100 1,010,400
Electronic Data Systems Corp. New................... 75,600 3,321,675
Eletronics For Imaging Inc.*........................ 3,400 56,525
Ericsson LM Telephone Company ADR**................. 147,400 5,499,863
Honeywell Inc. ..................................... 29,100 1,993,350
Intel Corp. ........................................ 304,000 21,356,000
Lam Resh Corp.*..................................... 2,200 64,350
Lattice Semiconductor Corp.*........................ 1,600 75,800
Lexmark Int'l Group Inc.*........................... 4,900 186,200
Linear Technology Corp. ............................ 4,800 276,600
LSI Logiccorp*...................................... 7,700 152,075
Maxim Integrated Prods Inc.*........................ 7,600 262,200
Micron Technology Inc. ............................. 79,500 2,067,000
Molex Inc. ......................................... 39,000 1,126,313
Motorola Inc. ...................................... 32,400 1,848,825
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-52
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
National Semiconductor Corp.*....................... 1,500 $ 38,906
Newbridge Networks Corp. ADR* **.................... 84,300 2,939,879
Perkin Elmer Corp. ................................. 3,000 213,188
SCI Systems Inc.*................................... 2,900 126,331
Scientific Atlanta Inc. ............................ 4,300 72,025
Silicon Graphics Inc.*.............................. 52,500 652,969
Tellabs Inc.*....................................... 9,900 523,463
Teradyne Inc.*...................................... 94,300 3,017,600
Texas Instruments Inc. ............................. 22,400 1,008,000
Vitesse Semiconductor Corp.*........................ 2,500 94,375
Xilinx Inc.*........................................ 31,800 1,114,988
------------
52,893,395
------------
SOFTWARE
Adobe Sysinc........................................ 4,100 169,125
Autodesk Inc. ...................................... 3,000 111,000
BMC Software Inc.*.................................. 16,200 1,063,125
Cadence Design Systems Inc.*........................ 12,800 313,600
Computer Associates Int'l Inc. ..................... 79,700 4,214,138
Compuware Corp.*.................................... 9,000 288,000
Electronic Arts*.................................... 56,700 2,143,969
Informix Corp.*..................................... 6,000 28,500
Intuit*............................................. 2,800 115,500
Microchip Technology Inc.*.......................... 2,700 81,000
Microsoft Corp.*.................................... 154,500 19,969,125
Novell Inc.*........................................ 5,700 42,750
Oracle Corp.*....................................... 43,450 969,478
Parametric Technology Corp. ........................ 7,800 369,525
Shared Medical System............................... 1,900 125,400
Solectron Corp.*.................................... 6,400 266,000
Sybase Inc.*........................................ 3,100 41,269
Synopsys Inc.*...................................... 2,700 96,525
Transaction Systems Architects Inc.*................ 2,000 76,000
------------
30,484,029
------------
TOTAL TECHNOLOGY.................................... 150,925,666
------------
TRANSPORTATION (0.2%)
RAILROADS
Kansas City Southern Inds Inc. ..................... 3,300 104,775
Wisconsin Cent Transn Corp.*........................ 78,600 1,837,275
------------
1,942,050
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-53
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
TRUCKING AND FREIGHT FORWARDING
Federal Express Corp.*................................. 1,100 $ 67,169
Pittston Brinks Group.................................. 1,200 48,300
Tidewater Inc. ........................................ 3,200 176,400
------------
291,869
------------
TOTAL TRANSPORTATION................................... 2,233,919
------------
UTILITIES (3.4%)
ELECTRIC UTILITIES
Calenergy Inc.*........................................ 2,900 83,375
Northeast Utilities.................................... 103,400 1,221,413
------------
1,304,788
------------
GAS & PIPELINE UTILITIES
Falcon Drilling*....................................... 4,200 147,263
MCN Energy Group Inc. ................................. 61,400 2,479,025
Sonat Inc. ............................................ 3,000 137,250
Transtexas Gas Corp.*.................................. 800 11,850
Williams Companies Inc. ............................... 112,800 3,200,700
------------
5,976,088
------------
TELEPHONE
360 Communications Company*............................ 8,600 173,614
Airtouch Communications Inc.*.......................... 74,300 3,088,094
Ameritech Corp. ....................................... 2,500 201,250
AT&T Corp. ............................................ 38,391 2,351,449
Century Tel Enterprises Inc. .......................... 1,700 84,681
Cincinnati Bell Inc. .................................. 6,900 213,900
GTE Corp. ............................................. 9,800 512,050
LCI International Inc.*................................ 5,600 172,200
MCI Communications Corp. .............................. 53,800 2,303,313
SBC Communications Inc. ............................... 50,400 3,691,800
Teleport Communications Group*......................... 45,900 2,518,763
Worldcom Inc. Ga....................................... 347,080 10,499,170
------------
25,810,284
------------
TOTAL UTILTITIES....................................... 33,091,160
------------
TOTAL COMMON STOCKS (Cost $758,249,077)................ 944,395,203
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-54
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
UNITS VALUE
---------- ------------
<S> <C> <C>
SHORT TERM INVESTMENTS (COST $26,490,945) (2.7%)
State Street Bank Yield Enhanced Short Term Investment
Fund................................................. 26,490,945 $ 26,490,945
------------
TOTAL INVESTMENTS (COST $784,740,022) (100.3%)........ 970,886,148
Liabilities less Other Assets (-0.3%)................. (3,032,163)
------------
NET ASSETS (100.0%)................................... $967,853,985
============
</TABLE>
- --------
* Non-income producing security.
** An American Depositary Receipt (ADR) is a certificate issued by a U.S.
bank representing the right to receive securities of the foreign issuer
described.
The accompanying notes are an integral part of these financial statements.
F-55
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
INDEX EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS
Investments:
State Street Global Advisors Flagship S&P 500 Index Fund, at
value (cost $84,979,125 and units 739,614)...................... $117,787,995
State Street Global Advisors Russell Special Small Company Common
Trust Fund, at value (cost $28,748,466 and units 1,977,773)..... 35,957,902
Receivable for fund units sold.................................... 198,695
Unamortized organizational costs.................................. 21,923
------------
Total Assets.................................................... 153,966,515
------------
LIABILITIES
Payable for fund units redeemed................................... 186,329
State Street Bank and Trust Company--program fee payable.......... 43,092
Trustee, management and administration fees payable............... 19,704
American Bar Retirement Association--program fee payable.......... 6,261
Other accruals.................................................... 1,986
------------
Total Liabilities............................................... 257,372
------------
NET ASSETS (equivalent to $22.05 per unit based on 6,971,219 units
outstanding)..................................................... $153,709,143
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-56
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
INDEX EQUITY FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividend income.................................................. $ 507,403
-----------
Total investment income........................................ 507,403
-----------
EXPENSES
State Street Bank and Trust Company--program fee................. 433,768
Trustee, management and administration fees...................... 198,186
American Bar Retirement Association--program fee................. 63,363
Amortization of organization costs............................... 28,260
Legal and audit fees............................................. 16,728
Report to unitholders............................................ 19,732
Registration fee................................................. 18,707
Other expenses................................................... 3,511
-----------
Total expenses................................................. 782,255
-----------
Net investment loss................................................ (274,852)
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain................................................ 6,358,747
Change in net unrealized appreciation on investments............. 26,647,934
-----------
Net realized and unrealized gain on investments................ 33,006,681
-----------
Net increase in net assets resulting from operations............... $32,731,829
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-57
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
INDEX EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE
YEAR ENDED
DECEMBER 31,
-------------------------
1996 1997
----------- ------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss)...................... $ 757,732 $ (274,852)
Net realized gain on investments.................. 5,721,776 6,358,747
Net change in unrealized appreciation on invest-
ments............................................ 6,212,264 26,647,934
----------- ------------
Net increase in net assets resulting from opera-
tions............................................ 12,691,772 32,731,829
----------- ------------
FROM UNITHOLDER TRANSACTIONS
Proceeds from units sold.......................... 31,403,731 53,390,069
Cost of units redeemed............................ (9,234,771) (15,293,758)
----------- ------------
Net increase in net assets resulting from
unitholder transactions.......................... 22,168,960 38,096,311
----------- ------------
Net increase in net assets...................... 34,860,732 70,828,140
NET ASSETS
Beginning of year................................. 48,020,271 82,881,003
----------- ------------
End of year....................................... $82,881,003 $153,709,143
=========== ============
NUMBER OF UNITS
Outstanding--beginning of year.................... 3,437,843 4,914,409
Sold............................................ 2,077,161 2,867,768
Redeemed........................................ (600,595) (810,958)
----------- ------------
Outstanding--end of year.......................... 4,914,409 6,971,219
=========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-58
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
INDEX EQUITY FUND
SELECTED PER-UNIT DATA AND RATIOS
(For a unit outstanding throughout the period)*
<TABLE>
<CAPTION>
FOR THE PERIOD
APRIL 30, 1994 FOR THE YEAR ENDED
(COMMENCEMENT) DECEMBER 31,
OF OPERATIONS) TO ---------------------------
DECEMBER 31, 1994 1995 1996 1997
----------------- ------- ------- --------
<S> <C> <C> <C> <C>
Investment income.............. $ -- $ .02 $ .28 $ .08
Expenses....................... (.04) (.08) (.11) (.12)
------- ------- ------- --------
Net investment income (loss)... (.04) (.06) .17 (.04)
Net realized and unrealized
gain on investments........... .39 3.68 2.72 5.23
------- ------- ------- --------
Net increase in unit value..... .35 3.62 2.89 5.19
Net asset value at beginning of
period........................ 10.00 10.35 13.97 16.86
------- ------- ------- --------
Net asset value at end of peri-
od............................ $ 10.35 $ 13.97 $ 16.86 $ 22.05
======= ======= ======= ========
Ratio of expenses to average
net assets.................... .94%** .68 % .69% .62 %
Ratio of net investment income
(loss) to average net assets.. .94%** (.52)% 1.15% (.22)%
Portfolio turnover ***......... 54%**** 132 % 17% 11 %
Total return................... 3.50%**** 34.98 % 20.68% 30.78 %
Net assets at end of period (in
thousands).................... $11,662 $48,020 $82,881 $153,709
</TABLE>
- --------
* Calculations prepared using the monthly average number of units
outstanding during the period.
** Ratios annualized.
*** Reflects purchases and sales of units of the collective investment funds
in which the Fund invests rather than the turnover of the underlying
portfolios of such collective investments funds.
**** Not annualized.
The accompanying notes are an integral part of these financial statements.
F-59
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
INTERMEDIATE BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS
Investments:
PIMCO Total Return Fund, at value
(cost $55,142,561 and shares 5,244,525).......................... $55,591,967
MasterWorks Bond Index Fund, at value
(cost $26,736,280 and shares 2,789,373).......................... 27,168,493
Receivable for fund units sold..................................... 125,519
Unamortized organizational costs................................... 10,300
-----------
Total Assets................................................... 82,896,279
-----------
LIABILITIES
Payable for investments purchased.................................. 127,325
State Street Bank and Trust Company--program fee payable........... 22,979
Trustee, management and administration fees payable................ 6,844
American Bar Retirement Association--program fee payable........... 3,347
Other accruals..................................................... 1,301
-----------
Total Liabilities.............................................. 161,796
-----------
NET ASSETS (equivalent to $11.91 per unit
based on 6,945,554 units outstanding)............................. $82,734,483
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-60
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
INTERMEDIATE BOND FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends......................................................... $5,665,296
----------
Total investment income......................................... 5,665,296
----------
EXPENSES
State Street Bank and Trust Company--program fee.................. 230,899
Trustee, management and administration fees....................... 66,716
American Bar Retirement Association--program fee.................. 33,730
Amortization of organization costs................................ 15,525
Reports to unitholders............................................ 10,490
Legal and audit fees.............................................. 8,893
Registration fee.................................................. 9,945
Other expenses.................................................... 3,350
----------
Total expenses.................................................. 379,548
----------
Net investment income............................................... 5,285,748
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain................................................. 10,090
Change in net unrealized appreciation............................. 1,061,117
----------
Net realized and unrealized loss on investments................. 1,071,207
----------
Net increase in net assets resulting from operations................ $6,356,955
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-61
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
INTERMEDIATE BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE
YEAR ENDED
DECEMBER 31,
------------------------
1996 1997
----------- -----------
<S> <C> <C>
FROM OPERATIONS
Net investment income.............................. $ 2,589,601 $ 5,285,748
Net realized gain (loss) on investments............ (177,766) 10,090
Net change in unrealized appreciation
(depreciation) on investments..................... (1,011,400) 1,061,117
----------- -----------
Net increase in net assets resulting from opera-
tions............................................. 1,400,435 6,356,955
----------- -----------
FROM UNITHOLDER TRANSACTIONS
Proceeds from units issued......................... 21,795,326 34,646,710
Cost of units redeemed............................. (10,040,616) (7,880,999)
----------- -----------
Net increase in net assets resulting from
unitholder transactions........................... 11,754,710 26,765,711
----------- -----------
Net increase in net assets....................... 13,155,145 33,122,666
NET ASSETS
Beginning of year.................................. 36,456,672 49,611,817
----------- -----------
End of year........................................ $49,611,817 $82,734,483
=========== ===========
NUMBER OF UNITS
Outstanding--beginning of year..................... 3,447,358 4,556,518
Sold............................................. 2,076,702 3,093,999
Redeemed......................................... (967,542) (704,963)
----------- -----------
Outstanding--end of year........................... 4,556,518 6,945,554
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-62
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
INTERMEDIATE BOND FUND
SELECTED PER-UNIT DATA AND RATIOS
(For a unit outstanding throughout the period)*
<TABLE>
<CAPTION>
FOR THE PERIOD
SEPTEMBER 5,
1995 FOR THE
(COMMENCEMENT YEAR ENDED
OF OPERATIONS) TO DECEMBER 31,
DECEMBER 31, ----------------
1995 1996 1997
----------------- ------- -------
<S> <C> <C> <C>
Investment income.......................... $ .34 $ .67 $ .97
Expenses................................... (.02) (.06) (.07)
------- ------- -------
Net investment income...................... .32 .61 .90
Net realized and unrealized gain (loss) on
investments............................... .26 (.30) .12
------- ------- -------
Net increase in unit value................. .58 .31 1.02
Net asset value at beginning of period..... 10.00 10.58 10.89
------- ------- -------
Net asset value at end of period........... $ 10.58 $ 10.89 $ 11.91
======= ======= =======
Ratio of expenses to average net assets.... .69%** .58% .57%
Ratio of net investment income to average
net assets................................ 9.17%** 5.82% 7.93%
Portfolio turnover***...................... 2%**** 22% 14%
Total return............................... 5.80%**** 2.93% 9.37%
Net assets at end of period (in thousands). $36,457 $49,612 $82,734
</TABLE>
- --------
* Calculations prepared using the monthly average number of units outstanding
during the period.
** Ratios annualized.
*** Reflects purchases and sales of shares of the registered investment
companies in which the Fund invests rather than the turnover of the
underlying portfolios of such registered investment companies.
**** Not annualized.
The accompanying notes are an integral part of these financial statements.
F-63
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
INTERNATIONAL EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS
T. Rowe Price International Stock Fund, at value (cost $63,984,771
and shares 4,396,738)............................................. $59,004,235
Receivable for fund units sold..................................... 196,627
Unamortized organizational costs................................... 15,736
-----------
Total Assets..................................................... 59,216,598
-----------
LIABILITIES
Payable for investments purchased.................................. 154,832
Payable for fund units repurchased................................. 41,795
State Street Bank and Trust Company--program fee payable........... 16,645
Trustee, management and administration fees payable................ 3,543
American Bar Retirement Association--program fee payable........... 2,596
Other accruals..................................................... 240
-----------
Total Liabilities................................................ 219,651
-----------
NET ASSETS (equivalent to $18.21 per unit based on 3,239,192 units
outstanding)...................................................... $58,996,947
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-64
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
INTERNATIONAL EQUITY FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends........................................................ $ 3,113,573
Other income..................................................... 37,721
-----------
Total investment income........................................ 3,151,294
-----------
EXPENSES
State Street Bank and Trust Company--program fee................. 182,992
Trustee, management and administration fees...................... 38,315
American Bar Retirement Association--program fee................. 26,731
Amortization of organization costs............................... 11,523
Reports to unitholders........................................... 8,320
Legal and audit fees............................................. 7,053
Registration fee................................................. 7,887
Other expenses................................................... 3,602
-----------
Total expenses................................................. 286,423
-----------
Net investment income.............................................. 2,864,871
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain................................................ 4,264,284
Change in net unrealized depreciation............................ (6,012,507)
-----------
Net realized and unrealized loss on investments................ (1,748,223)
-----------
Net increase in net assets resulting from operations............... $ 1,116,648
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-65
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
INTERNATIONAL EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE
YEAR ENDED
DECEMBER 31,
--------------------------
1996 1997
------------ ------------
<S> <C> <C>
FROM OPERATIONS
Net investment income................ $ 830,951 $ 2,864,871
Net realized gain on investments..... 1,492,478 4,264,284
Net change in unrealized appreciation
(depreciation) on investments....... 1,022,272 (6,012,507)
------------ ------------
Net increase in net assets resulting
from operations..................... 3,345,701 1,116,648
------------ ------------
FROM UNITHOLDER TRANSACTIONS
Proceeds from sales of units......... 35,096,067 84,016,272
Cost of units redeemed............... (16,022,030) (59,404,273)
------------ ------------
Net increase in net assets resulting
from unitholder transactions........ 19,074,037 24,611,999
------------ ------------
Net increase in net assets......... 22,419,738 25,728,647
NET ASSETS
Beginning of year.................... 10,848,562 33,268,300
------------ ------------
End of year.......................... $ 33,268,300 $ 58,996,947
============ ============
NUMBER OF UNITS
Outstanding--beginning of year....... 705,954 1,868,547
Sold............................... 2,107,610 4,541,730
Redeemed........................... (945,017) (3,171,085)
------------ ------------
Outstanding--end of year............. 1,868,547 3,239,192
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-66
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
INTERNATIONAL EQUITY FUND
SELECTED PER-UNIT DATA AND RATIOS
(For a unit outstanding throughout the period)*
<TABLE>
<CAPTION>
FOR THE PERIOD
SEPTEMBER 5, FOR THE
(COMMENCEMENT YEAR ENDED
OF OPERATIONS) TO DECEMBER 31,
DECEMBER 31, ----------------
1995 1996 1997
----------------- ------- -------
<S> <C> <C> <C>
Investment income.......................... $ .49 $ .70 $ 1.12
Expenses................................... (.03) (.10) (.10)
------- ------- -------
Net investment income...................... .46 .60 1.02
Net realized and unrealized gain (loss) on
investments............................... (.09) 1.83 (.61)
------- ------- -------
Net increase............................... .37 2.43 .41
Net asset value at beginning of period..... 15.00 15.37 17.80
------- ------- -------
Net asset value at end of period........... $ 15.37 $ 17.80 $ 18.21
======= ======= =======
Ratio of expenses to average net assets.... .57%** .59% .54%
Ratio of net investment income to average
net assets................................ 9.2%** 3.58% 5.41%
Portfolio turnover ***..................... 4%**** 73% 101%
Total return............................... 2.47%**** 15.81% 2.30%
Net assets at end of period (in thousands). $10,849 $33,268 $58,997
</TABLE>
- --------
* Calculations prepared using the monthly average number of units
outstanding during the period.
** Ratios annualized.
*** Reflects purchases and sales of shares of the registered investment
company in which the Fund invests rather than the turnover of the
underlying portfolios of the registered investment company.
**** Not annualized.
The accompanying notes are an integral part of these financial statements.
F-67
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
STABLE ASSET RETURN FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS
Investments:
State Street Bank ABA Members/Pooled Stable Asset Fund Trust, at
value
(cost $633,755,115)............................................. $633,755,115
Receivable for fund units sold.................................... 1,065,874
Unamortized organizational costs.................................. 94,179
------------
Total Assets.................................................... 634,915,168
------------
LIABILITIES
State Street Bank and Trust Company--program fee payable.......... 181,550
Trustee, management and administration fees payable............... 107,185
American Bar Retirement Association--program fee payable.......... 27,786
Other accruals.................................................... 33,826
------------
Total Liabilities............................................... 350,347
------------
NET ASSETS (equivalent to $1.00 per unit based on 634,564,821
units outstanding)............................................... $634,564,821
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-68
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
STABLE ASSET RETURN FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
INTEREST INCOME.................................................... $38,695,839
-----------
EXPENSES
State Street Bank and Trust Company--program fee................. 2,220,371
Trustee, management and administration fees...................... 1,277,664
American Bar Retirement Association--program fee................. 324,391
Amortization of organization costs............................... 166,591
Legal and audit fees............................................. 85,210
Reports to unitholders........................................... 100,513
Registration fee................................................. 95,302
Other expenses................................................... 43,593
-----------
Total expenses................................................. 4,313,635
-----------
Net investment income and net increase in net assets resulting from
operations........................................................ $34,382,204
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-69
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
STABLE ASSET RETURN FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31,
--------------------------
1996 1997
------------ ------------
<S> <C> <C>
FROM OPERATIONS
Net investment income and net increase in net
assets resulting from operations................ $ 31,794,217 $ 34,382,204
------------ ------------
Reinvestment of net investment income............ (31,794,217) (34,382,204)
------------ ------------
FROM UNITHOLDER TRANSACTIONS (at $1.00 per unit):
Proceeds from units issued....................... 102,727,142 165,192,903
Units issued in connection with reinvestment of
net investment income........................... 31,794,217 34,382,204
Cost of units redeemed........................... (129,966,222) (199,773,055)
------------ ------------
Net increase (decrease) in net assets resulting
from unitholder transactions.................... 4,555,137 (197,948)
------------ ------------
Net increase (decrease) in net assets.......... 4,555,137 (197,948)
NET ASSETS
Beginning of year................................ 630,207,632 634,762,769
------------ ------------
End of year...................................... $634,762,769 $634,564,821
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-70
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
STABLE ASSET RETURN FUND
SELECTED PER-UNIT DATA AND RATIOS
(For a unit outstanding throughout the year)*
<TABLE>
<CAPTION>
FOR THE PERIOD
DECEMBER 5, 1991
(COMMENCEMENT FOR THE YEAR ENDED
OF OPERATIONS TO DECEMBER 31,
DECEMBER 31, ----------------------------------------------------------
1991) 1992 1993 1994 1995 1996 1997
---------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income....... $ .004 $ .042 $ .035 $ .043 $ .061 $ .058 $ .060
Expenses................ (.000) (.008) (.008) (.007) (.007) (.007) (.007)
-------- -------- -------- -------- -------- -------- --------
Net investment income... .004 .034 .027 .036 .054 .051 .053
Reinvestment of net
investment income...... (.004) (.034) (.027) (.036) (.054) (.051) (.053)
-------- -------- -------- -------- -------- -------- --------
Net asset value at
beginning and end
of year................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ======== ========
Ratio of expenses to
average net assets..... -- 79% .75% .73% .73% .68% .68%
Ratio of net investment
income to average net
assets................. -- 3.45% 2.77% 3.55% 5.32% 5.15% 5.38%
Net assets at end of
year (in thousands).... $560,334 $589,882 $509,905 $491,979 $630,208 $634,763 $634,565
</TABLE>
- --------
* Calculations prepared using the monthly average number of units outstanding
during the year.
The accompanying notes are an integral part of these financial statements.
F-71
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
STABLE ASSET RETURN FUND
DECEMBER 31, 1997
UNITS OF COLLECTIVE INVESTMENT FUNDS
<TABLE>
<S> <C>
State Street Bank ABA Members/Pooled Stable Asset Fund Trust
("SAFT")
(Units 633,755,115) (a).......................................... $633,755,115
------------
TOTAL INVESTMENTS (Cost $633,755,115) (99.8%)..................... 633,755,115
OTHER ASSETS LESS LIABILITIES (.2%)............................... 809,706
------------
NET ASSETS (100.0%)............................................... $634,564,821
============
</TABLE>
- --------
(a) SAFT holds the following investments:
<TABLE>
<CAPTION>
EFFECTIVE ANNUAL INVESTMENTS AT
PERCENTAGE RATE CONTRACT VALUE
1997 (NOTE 2)
---------------- --------------
<S> <C> <C>
INVESTMENT CONTRACTS (52.03%)
AEGON USA, INC.
6 Investment Contracts
(Maturities ranging from April 30, 1998 to
March 31, 2002)........................... 6.07-7.03% $ 29,004,692
Allstate Life Insurance Company
3 Investment Contracts
(Maturities ranging from July 1, 1998 to
July 31, 1999)............................ 6.52-7.53 14,093,554
Continental Assurance Company
6 Investment Contracts
(Maturities ranging from July 31, 1998 to
December 31, 2002)........................ 6.00-7.32 38,055,739
Hartford Life Insurance Company
1 Investment Contract
(Matures December 31, 1998)............... 4.70 1,950,213
John Hancock Mutual Life Insurance Company
6 Investment Contracts
(Maturities ranging from January 31, 1998
to November 30, 2002)..................... 5.06-7.75 29,295,482
Life of Virginia
5 Investment Contracts, Indexed
(Maturities ranging from May 31, 1999 to
August 30, 2002 and upon funds request)... 5.35-7.10 27,738,346
Metropolitan Life Insurance Company
3 Investment Contracts
(Maturities ranging from February 28, 1998
to February 28, 2001)..................... 6.08-6.37 22,762,244
New York Life Asset Management
6 Investment Contracts
(Maturities ranging from January 15, 1998
to September 30, 2002).................... 5.51-6.93 37,087,009
Pacific Mutual Life Insurance Company
3 Investment Contracts, Indexed
(Maturities ranging from February 13, 1998
to January 31, 2002)...................... 5.74-6.91 23,561,548
Principal Mutual Life Insurance Company
6 Investment Contracts
(Maturities ranging from August 31, 1999
to August 30, 2002)....................... 5.70-7.23 32,130,076
Provident Life and Accident Assurance
Company
1 Investment Contract
(Matures March 31, 1998).................. 6.28-7.31 8,279,151
Prudential Asset Management
3 Investment Contracts
(Maturities ranging from January 31, 1998
to January 31, 2000)...................... 5.19-7.35 17,103,580
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-72
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
STABLE ASSET RETURN FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
EFFECTIVE ANNUAL INVESTMENTS AT
PERCENTAGE RATE CONTRACT VALUE
1997 (NOTE 2)
---------------- ---------------
<S> <C> <C>
INVESTMENT CONTRACTS (CONTINUED)
Sun Life of Canada
2 Investment Contracts
(Maturities ranging from December 31,
1999 to April 30, 2001).................. 6.82-6.87% $ 18,957,835
Transamerica Asset Management
4 Investment Contracts
(Maturities ranging from August 31, 1998
to September 30, 2002)................... 6.25-7.24 24,464,406
Travelers Insurance Company
1 Investment Contract
(Maturities ranging from June 30, 1999 to
June 30, 2003)........................... 6.30 10,016,752
------------
Total Investment Contracts (Cost
$334,500,627)............................ 334,500,627
------------
SYNTHETIC INVESTMENT CONTRACTS* (4.21%)
CDC Investment Management Group
2 Investment Contracts
(Maturities ranging from February 15,
1998 to November 15, 2002)............... 6.42-7.70 10,547,700
Underlying Securities:
Bank of New York Cash Reserve market
value $393,884 units 393,884
FHLMC REMIC, 6.75%, 5/25/13, Principal
$900,000 market value $902,727
FHLMC REMIC, 6.75%, 10/15/13, Principal
$4,494,408 market value $4,499,172
FNMA Pool, 6.739%, 6/1/27, Principal
$4,478,153 market value $4,569,821
Total market value $10,365,604, wrapper
$182,096
J. P. Morgan
1 Investment Contract
(Maturities ranging from January 15, 1998
to January 15, 1999)..................... 5.28 5,347,206
Underlying Security:
U.S. Treasury Note, 6.375%, 1/15/99,
principal $4,207,000
Total market value $4,239,226, wrapper
$1,107,980
Morgan Guaranty Trust Company
1 Investment Contract
(Maturities ranging from December 15,
1999 to May 15, 2001).................... 7.06 11,143,982
Underlying Security:
Advanta Credit Card Master Trust, 5.839%,
11/15/03, principal $10,000,000
Total market value $10,007,100, wrapper
$1,136,882
------------
Total Synthetic Investment Contracts (Cost
$27,038,888)............................. 27,038,888
------------
<CAPTION>
COST AMORTIZED VALUE
---------------- ---------------
<S> <C> <C>
SHORT TERM INVESTMENTS (43.76%)
State Street Bank
Yield Enhanced Short Term Investment
Fund--281,353,273 units.................. $281,353,273 281,353,273
------------
TOTAL INVESTMENTS (100.00%) (COST
$642,892,788)............................ $642,892,788**
============
</TABLE>
- --------
* Synthetic investment contracts represent individual assets placed in a
trust with ownership by the fund and a third party issues a wrapper
contract that provides that holders can, and must, execute transactions at
contract value. Individual assets of the synthetic contracts are valued at
representative quoted market prices. The wrapper is valued as the
difference between the fair value of the assets and contract value of the
investment contract.
** Stable Asset Return Fund holds 98.58% of State Street Bank ABA
Members/Pooled Stable Asset Fund Trust.
The accompanying notes are an integral part of these financial statements.
F-73
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
VALUE EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost $89,585,970).......................... $113,835,299
Cash.............................................................. 2,334
Receivable for fund units sold.................................... 254,467
Dividends and interest receivable................................. 370,675
Unamortized organizational costs.................................. 15,871
------------
Total Assets.................................................... 114,478,646
------------
LIABILITIES
Payable for investments purchased................................. 1,264,697
Investment advisory fee payable................................... 61,415
State Street Bank and Trust Company--program fee payable.......... 31,560
Trustee, management and administration fees payable............... 6,755
American Bar Retirement Association--program fee payable.......... 4,596
Other accruals.................................................... 6,979
------------
Total Liabilities............................................... 1,376,002
------------
NET ASSETS (equivalent to $20.11 per unit based on 5,624,404 units
outstanding)..................................................... $113,102,644
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-74
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
VALUE EQUITY FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends (net of foreign tax expense of $2,349)................. $ 1,642,376
Interest......................................................... 538,418
-----------
Total investment income........................................ 2,180,794
-----------
EXPENSES
Investment advisory fee.......................................... 304,776
State Street Bank and Trust Company--program fee................. 300,148
Trustee, management and administration fees...................... 62,881
American Bar Retirement Association--program fee................. 43,842
Amortization of organization costs............................... 18,570
Reports to unitholders........................................... 13,676
Legal and audit fees............................................. 11,594
Registration fee................................................. 12,966
Other expenses................................................... 11,204
-----------
Total expenses................................................. 779,657
-----------
Net investment income.............................................. 1,401,137
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain................................................ 1,090,426
Change in net unrealized appreciation............................ 17,294,659
-----------
Net realized and unrealized gain on investments................ 18,385,085
-----------
Net increase in net assets resulting from operations............... $19,786,222
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-75
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
VALUE EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE
YEAR ENDED
DECEMBER 31,
-------------------------
1996 1997
----------- ------------
<S> <C> <C>
OPERATIONS
Net investment income............................. $ 651,044 $ 1,401,137
Net realized gain on investments.................. 535,992 1,090,426
Net change in unrealized appreciation on invest-
ments............................................ 5,938,274 17,294,659
----------- ------------
Net increase in net assets resulting from opera-
tions............................................ 7,125,310 19,786,222
----------- ------------
UNITHOLDER TRANSACTIONS
Proceeds from sales of units...................... 28,084,938 53,837,540
Cost of units redeemed............................ (7,695,572) (8,652,312)
----------- ------------
Net increase in net assets resulting from
unitholder transactions.......................... 20,389,366 45,185,228
----------- ------------
Net increase in net assets...................... 27,514,676 64,971,450
NET ASSETS
Beginning of year................................. 20,616,518 48,131,194
----------- ------------
End of year....................................... $48,131,194 $113,102,644
=========== ============
NUMBER OF UNITS
Outstanding--beginning of year.................... 1,594,367 3,060,634
Sold............................................ 2,004,767 3,030,540
Redeemed........................................ (538,500) (466,770)
----------- ------------
Outstanding--end of year.......................... 3,060,634 5,624,404
=========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-76
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
VALUE EQUITY FUND
SELECTED PER-UNIT DATA AND RATIOS
(For a unit outstanding throughout the period)**
<TABLE>
<CAPTION>
FOR THE PERIOD
SEPTEMBER 5,
1995 FOR THE
(COMMENCEMENT YEAR ENDED
OF OPERATIONS) TO DECEMBER 31,
DECEMBER 31, -----------------
1995 1996 1997
----------------- ------- --------
<S> <C> <C> <C>
Investment income......................... $ .13 $ .40 $ .47
Expenses.................................. (.04) (.14) (.17)
------- ------- --------
Net investment income..................... .09 .26 .30
Net realized and unrealized gain on in-
vestments................................ .84 2.54 4.08
------- ------- --------
Net increase in unit value................ .93 2.80 4.38
Net asset value at beginning of period.... 12.00 12.93 15.73
------- ------- --------
Net asset value at end of period.......... $ 12.93 $ 15.73 $ 20.11
======= ======= ========
Ratio of expenses to average net assets... 1.00%* .99% .90%
Ratio of net investment income to average
net assets............................... 2.12%* 1.85% 1.61%
Portfolio turnover........................ 4%*** 17% 13%
Total return.............................. 7.75%*** 21.66% 27.84%
Average commissions rate**** -- $0.0729 $ 0.0603
Net assets at end of period (in thou-
sands)................................... $20,617 $48,131 $113,103
</TABLE>
- --------
* Ratios annualized.
** Calculations prepared using the monthly average number of units
outstanding during the period.
*** Not annualized.
****Average commissions rate paid is presented for fiscal periods beginning on
or after September 1, 1995.
The accompanying notes are an integral part of these financial statements.
F-77
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
VALUE EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
COMMON STOCKS (92.7%)
BASIC INDUSTRIES (7.1%)
ALUMINUM
Alcan Alum Ltd. ADR**.................................. 19,000 $ 524,875
Alumax Inc. ADR* **.................................... 1,800 61,200
Aluminum Co. Amer...................................... 4,300 302,613
------------
888,688
------------
CHEMICALS
Cabot Corp. ........................................... 11,100 306,638
Dow Chem Co. .......................................... 7,400 751,100
Du Pont EI De Nemours & Co............................. 2,200 132,138
Eastman Chem Co. ...................................... 8,600 512,238
Fmc Corp. ............................................. 2,900 195,206
Great Lakes Chemical Corp. ............................ 8,400 376,950
Hercules Inc. ......................................... 6,100 305,381
NalCo. Chem Co. ....................................... 2,300 90,994
Sigma Aldrich.......................................... 6,800 270,300
Union Carbide Corp. ................................... 8,200 352,088
------------
3,293,033
------------
GLASS AND CONTAINERS
Ball Corp. ............................................ 11,200 395,500
------------
PAPER
Champion Int'l Corp. .................................. 10,200 462,188
International Paper Co. ............................... 13,600 586,500
Mead Corp. ............................................ 11,600 324,800
Minnesota Mining & Manufacturing Co. .................. 2,400 196,950
Potlatch Corp. ........................................ 10,200 438,600
Union Camp Corp. ...................................... 9,200 493,925
Westvaco Corp. ........................................ 17,000 534,438
Willamette Industries Inc. ............................ 16,100 518,219
------------
3,555,620
------------
TOTAL BASIC INDUSTRIES................................. 8,132,841
------------
CAPITAL GOODS (5.1%)
CONSTRUCTION
Building Materials
Applied Materials Inc.*................................ 18,800 566,350
------------
ELECTRICAL EQUIPMENT
Arrow Electrs Inc.*.................................... 13,400 434,663
General Elec Co........................................ 34,700 2,546,113
------------
2,980,776
------------
</TABLE>
F-78
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
VALUE EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
INDUSTRIAL MACHINERY
Briggs & Stratton Corp. ............................... 9,100 $ 441,919
Cummins Engine Inc. ................................... 9,500 561,094
Ingersollrand Co....................................... 9,900 400,950
------------
1,403,963
------------
POLLUTION CONTROL
Browning Ferris Industries Inc......................... 18,100 669,700
Waste Management Inc. New.............................. 6,100 167,750
------------
837,450
------------
TOTAL CAPITAL GOODS.................................... 5,788,539
------------
CONSUMER BASICS (14.8%)
DRUGS AND HEALTHCARE
Abbott Labs............................................ 9,200 603,174
Allergan Inc. ......................................... 13,300 446,381
American Home Products Corp............................ 600 45,900
Bard C R Inc. ......................................... 12,200 382,013
Bausch & Lomb Inc. .................................... 12,800 507,200
Bristol Myers Squibb Co. .............................. 10,600 1,003,025
Columbia HCA Healthcare Corp .......................... 19,450 576,206
Johnson & Johnson...................................... 28,100 1,851,088
Lilly Eli & Co. ....................................... 800 55,700
Merck & Co. Inc. ...................................... 8,500 903,125
Pacificare Health System*.............................. 4,800 251,400
Pfizer Inc. ........................................... 6,200 462,288
Pharmacia & Upjohn Inc. ............................... 18,800 688,550
Smithkline Beecham PLC ADR**........................... 11,400 586,388
United Healthcare Corp. ............................... 6,000 298,125
------------
8,660,563
------------
FOOD AND BEVERAGE
Archer Daniels Midland Co. ............................ 34,805 754,833
Coca Cola Co. ......................................... 22,100 1,472,413
Heinz H J Co. ......................................... 5,800 294,713
Pepsico Inc. .......................................... 15,400 561,138
Supervalu Inc. ........................................ 6,000 251,250
Whitman Corp. ......................................... 23,900 622,894
------------
3,957,241
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-79
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
VALUE EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
HOUSEHOLD PRODUCTS
Dial Corp. New......................................... 3,600 $ 74,925
Procter & Gamble Co. .................................. 6,000 478,875
------------
553,800
------------
RETAIL GROCERY
Albertsons Inc. ....................................... 14,700 696,413
------------
TOBACCO
Philip Morris Companies Inc. .......................... 48,900 2,215,781
RJR Nabisco Hldgs Corp. ............................... 16,000 600,000
------------
2,815,781
------------
TOTAL CONSUMER BASICS.................................. 16,683,798
------------
CONSUMER DURABLE GOODS (5.1%)
AUTO PARTS
Dana Corp. ............................................ 13,800 655,500
Genuine Parts Co. ..................................... 18,700 634,631
------------
1,290,131
------------
AUTOMOBILES
Chrysler Corp. ........................................ 14,500 510,219
Ford Mtr Co. Del ...................................... 28,100 1,368,119
General Mtrs Corp. .................................... 1,200 72,750
------------
1,951,088
------------
HOUSEHOLD APPLIANCES
Maytag Corp. .......................................... 11,900 444,019
Whirlpool Corp. ....................................... 8,800 484,000
------------
928,019
------------
MOBILE HOMES
Fleetwood Enterprises Inc. ............................ 6,100 258,869
------------
TIRES AND RUBBER
Cooper Tire & Rubber Co. .............................. 26,000 633,750
Goodyear Tire and Rubber .............................. 10,500 668,063
------------
1,301,813
------------
TOTAL CONSUMER DURABLE GOODS........................... 5,729,920
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-80
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
VALUE EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
CONSUMER NON-DURABLE GOODS (7.5%)
APPAREL AND TEXTILES
Reebok Int'l Ltd. ..................................... 6,800 $ 195,925
Russell Corp. ......................................... 12,800 340,000
Springs Industries Inc. ............................... 2,600 135,200
V F Corp. ............................................. 14,000 643,125
------------
1,314,250
------------
LIQUOR
Anheuser Busch Companies Inc. ......................... 18,800 827,200
------------
RETAIL TRADE
Dayton Hudson Corp. ................................... 10,100 681,750
Federated Dept. Stores Inc. Del........................ 16,600 710,097
Limited Inc. .......................................... 14,560 371,280
May Dept Stores Co. ................................... 13,900 732,356
Penney J C Inc. ....................................... 11,700 705,656
Sears Roebuck & Co. ................................... 15,300 692,325
TJX Companies Inc. New................................. 20,400 701,250
Toys R Us Inc.*........................................ 15,600 490,425
Wal Mart Stores Inc. .................................. 25,200 993,825
------------
6,078,964
------------
TOYS, AMUSEMENTS, & SPORTING GOODS
Mattel Inc. ........................................... 6,800 253,300
------------
TOTAL CONSUMER NON-DURABLE GOODS....................... 8,473,714
------------
CONSUMER SERVICES (1.3%)
AIR TRAVEL
AMR Corp. Del*......................................... 5,800 745,300
------------
HOTELS & RESTAURANTS
McDonalds Corp. ....................................... 1,200 57,300
------------
LEISURE TIME
Disney Walt Co. ....................................... 500 49,531
Harrahs Entertainment Inc. ............................ 32,000 604,000
------------
653,531
------------
TOTAL CONSUMER SERVICES................................ 1,456,131
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-81
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
VALUE EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
ENERGY (8.1%)
DOMESTIC OIL
Ashland Inc. .......................................... 8,000 $ 429,500
Atlantic Richfield Co. ................................ 5,200 416,650
Phillips Pete Co. ..................................... 13,800 671,025
Sun Inc. .............................................. 12,100 508,956
Unocal Corp............................................ 12,200 473,513
------------
2,499,644
------------
GAS EXPLORATION
Occidental Pete Corp. ................................. 25,900 759,218
------------
INTERNATIONAL OIL
Amoco Corp. ........................................... 12,400 1,055,550
Chevron Corp. ......................................... 10,000 770,000
Exxon Corp. ........................................... 21,000 1,284,938
Mobil Corp. ........................................... 18,100 1,306,593
Royal Dutch Petroleum Co. ADR** ....................... 19,600 1,062,075
Texaco Inc. ........................................... 7,400 402,375
------------
5,881,531
------------
TOTAL ENERGY........................................... 9,140,393
------------
FINANCE (16.0%)
BANKING
Bankamerica Corp. ..................................... 9,400 686,200
Chase Manhattan Corp. (New)............................ 10,800 1,182,600
Citicorp............................................... 2,500 316,094
First Chicago Nbd Corp. ............................... 2,600 217,100
First Union Corp. ..................................... 6,400 328,000
Fleet Financial Group Inc. ............................ 12,200 914,238
Keycorp New............................................ 5,000 354,063
Morgan J P & Co. Inc. ................................. 3,100 349,913
Nationsbank Corp....................................... 7,600 462,175
Republic NY Corp. ..................................... 2,900 331,144
------------
5,141,527
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-82
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
VALUE EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
FINANCIAL SERVICES
Countrywide Cr Industries Inc. ........................ 16,100 $ 690,288
Federal Home Loan Mortgage Corp. ...................... 25,200 1,056,825
Federal Nat'l Mortgage Assn ........................... 27,600 1,574,925
Merrill Lynch & Co. Inc. .............................. 12,000 875,250
Morgan Stanley Dean Witter............................. 16,215 958,712
------------
5,156,000
------------
INSURANCE
Aetna Inc. ............................................ 6,700 472,769
Ambac Financial Group Inc. ............................ 1,600 73,600
American General Corp. ................................ 18,852 1,019,186
American Int'l Group Inc. ............................. 1,950 212,063
Chubb Corp. ........................................... 10,100 763,813
Cigna Corp. ........................................... 4,300 744,169
Foundation Health Sys Inc. ............................ 20,250 453,091
Lincoln Nat'l Corp. ................................... 8,500 664,063
Loews Corp. ........................................... 3,100 328,988
Mbia Inc. ............................................. 7,000 467,688
Ohio Cas Corp. ........................................ 5,600 249,900
Old Rep Int'l Corp. ................................... 15,400 572,688
Safe Co. Corp. ........................................ 12,100 589,875
St Paul Companies Inc. ................................ 4,500 369,281
Torchmark Inc. ........................................ 12,800 538,400
------------
7,519,574
------------
SAVINGS AND LOAN
Golden West Financial Corp. Del........................ 3,200 313,000
------------
TOTAL FINANCE.......................................... 18,130,101
------------
GENERAL BUSINESS (0.9%)
BUSINESS SERVICES
De Luxe Corp. ......................................... 9,900 341,550
Humana Inc.*........................................... 15,800 327,850
------------
669,400
------------
NEWSPAPERS
Gannett Inc. .......................................... 3,200 197,800
------------
PUBLISHING
American Greetings Corp. .............................. 4,600 179,975
------------
TOTAL GENERAL BUSINESS................................. 1,047,175
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-83
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
VALUE EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
MISCELLANEOUS (3.6%)
CONGLOMERATES
Canadian Pacific Ltd. New ADR**........................ 17,900 $ 487,775
ITT Industries Inc. ................................... 15,400 483,175
Raytheon Co. .......................................... 11,676 589,548
Textron Inc. .......................................... 1,800 112,500
------------
1,672,998
------------
MISCELLANEOUS
Allegheny Energy Inc. ................................. 17,500 568,750
Consolidated Edison Inc. .............................. 19,300 791,300
Dillards Inc. ......................................... 17,300 609,825
Hartford Financial Svcs Grp............................ 4,100 383,606
Tricon Global Restaurants Inc.*........................ 1,540 44,756
------------
2,398,237
------------
TOTAL MISCELLANEOUS.................................... 4,071,235
------------
SHELTER (1.2%)
CONSTRUCTION MATERIALS
Armstrongworld Industries Inc. ........................ 4,800 358,800
Masco Corp. ........................................... 5,000 254,375
Owens Corning ADR**.................................... 5,300 180,863
------------
794,038
------------
HOMEBUILDERS
Centex Corp. .......................................... 4,800 302,100
Pulte Corp. ........................................... 6,200 259,238
------------
561,338
------------
TOTAL SHELTER.......................................... 1,355,376
------------
TECHNOLOGY (9.1%)
AEROSPACE
Boeing Co. ............................................ 200 9,788
Lockheed Martin Corp. ................................. 6,300 620,550
Northrop Grumman Corp. ................................ 5,000 575,000
Rockwell Int'l Corp. New............................... 2,400 125,400
------------
1,330,738
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-84
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
VALUE EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
COMPUTERS AND BUSINESS EQUIPMENT
Compaq Computer Corp. ................................. 19,750 $ 1,114,641
E M C Corp. Mass....................................... 10,200 279,863
Hewlett Packard Co. ................................... 20,000 1,250,000
International Business Machs........................... 19,300 2,018,376
Quantum Corp.*......................................... 18,200 365,138
Sun Microsystems Inc.*................................. 12,500 498,438
------------
5,526,456
------------
ELECTRONICS
Advanced Micro Devices Inc.*........................... 32,700 586,556
Intel Corp. ........................................... 13,600 955,400
Motorola Inc. ......................................... 3,200 182,600
National Semiconductor Corp.*.......................... 15,800 409,813
------------
2,134,369
------------
SOFTWARE
Microsoft Corp.*....................................... 10,200 1,318,350
------------
TOTAL TECHNOLOGY....................................... 10,309,913
------------
TRANSPORTATION (2.6%)
RAILROADS
Burlington Northern Santa Fe........................... 6,900 641,269
CSX Corp. ............................................. 12,600 680,400
Union Pacific Corp. ................................... 11,000 686,813
------------
2,008,482
------------
TRUCKING AND FREIGHT FORWARDING
Federal Express Corp.*................................. 6,000 366,375
Ryder Systems Inc. .................................... 16,300 533,825
------------
900,200
------------
TOTAL TRANSPORTATION................................... 2,908,682
------------
UTILITIES (10.3%)
ELECTRIC UTILITIES
American Electric Power Inc. .......................... 14,500 748,563
DQE Inc. .............................................. 16,400 576,050
GPU Inc................................................ 8,200 345,425
IES Industries Inc. ................................... 11,800 434,388
Pg&E Corp. ............................................ 26,200 797,463
Puget Sound Energy Inc. ............................... 10,200 307,913
Wisconsin Energy Corp. ................................ 19,000 546,250
------------
3,756,052
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-85
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
VALUE EQUITY FUND
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
GAS & PIPELINE UTILITIES
Transcanada Pipelines Ltd. ADR**...................... 11,400 $ 255,075
------------
TELEPHONE
Alltel Corp. ......................................... 8,800 361,350
Ameritech Corp. ...................................... 7,000 563,500
AT&T Corp. ........................................... 9,700 594,125
Bell Atlantic Corp. .................................. 9,792 891,072
Bellsouth Corp. ...................................... 25,500 1,435,969
GTE Corp. ............................................ 6,200 323,950
MCI Communications Corp. ............................. 11,200 479,500
SBC Communications Inc. .............................. 22,200 1,626,150
Sprint Corp. ......................................... 6,200 363,475
US West Inc. ......................................... 21,500 970,188
------------
7,609,279
------------
TOTAL UTILITIES....................................... 11,620,406
------------
TOTAL COMMON STOCKS (Cost $80,801,319)................ 104,848,224
------------
<CAPTION>
UNITS
----------
<S> <C> <C>
SHORT TERM INVESTMENTS (COST $3,283,148) (2.9%)
State Street Bank Yield Enhanced Short Term Investment
Fund................................................. 3,283,148 3,283,148
------------
FIXED INCOME (COST $5,501,503) (5.0%) PRINCIPAL
----------
United States Treasury Notes 07/15/06 7.00%........... $3,557,000 3,839,319
United States Treasury Notes 08/15/05 6.50%........... 1,787,000 1,864,608
------------
5,703,927
------------
TOTAL INVESTMENTS (COST $89,585,970) (100.6%)......... 113,835,299
Liabilities less Other Assets (-0.6%)................. (732,655)
------------
NET ASSETS (100.0%)................................... $113,102,644
============
</TABLE>
- --------
* Non-income producing security.
** An American Depositary Receipt (ADR) is a certificate issued by a U.S. bank
representing the right to receive securities of the foreign issuer
described.
The accompanying notes are an integral part of these financial statements.
F-86
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
STRUCTURED PORTFOLIO SERVICE
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<CAPTION>
CONSERVATIVE MODERATE AGGRESSIVE
------------ ----------- -----------
<S> <C> <C> <C>
ASSETS
State Street Bank collective investment
funds, at value:
Stable Asset Return Fund (cost of
$5,168,729, and $6,609,972 and units of
5,168,729 and 6,609,972, respectively). $ 5,168,729 $ 6,609,972 $ --
Intermediate Bond Fund (cost of
$5,515,882, $18,227,384, and $7,172,820
and units of 506,391, 1,665,235 and
653,397, respectively)................. 6,030,185 19,829,915 7,780,771
Value Equity Fund (cost of $992,533,
$5,878,407 and $6,273,776 and units of
59,974, 361,574 and 386,924,
respectively).......................... 1,206,036 7,270,969 7,780,771
Growth Equity Fund (cost of $987,044,
$5,866,241 and $6,228,203 and units of
3,351, 20,207 and 21,623,
respectively).......................... 1,206,036 7,270,969 7,780,771
Index Equity Fund (cost of $1,948,831,
$12,085,873 and $12,277,413 and units
of 109,395, 689,498 and 705,762,
respectively).......................... 2,412,073 15,202,935 15,561,540
International Equity Fund (cost of
$1,179,127, $9,648,167 and $10,148,505
and units of 66,216, 544,374 and
569,597, respectively)................. 1,206,036 9,914,957 10,374,360
Aggressive Equity Fund (cost of
$2,254,805 and units of 53,375)........ -- -- 2,593,590
Receivable for investments sold........... -- 135,133 136,429
Receivable for fund units sold............ 108,272 248,960 102,122
----------- ----------- -----------
Total Assets.......................... 17,337,367 66,483,810 52,110,354
----------- ----------- -----------
LIABILITIES
Payable for investments purchased......... 35,747 384,093 238,551
Payable for fund units redeemed........... 72,525 -- --
Accrued expenses.......................... 1,277 4,836 3,794
----------- ----------- -----------
Total Liabilities..................... 109,549 388,929 242,345
----------- ----------- -----------
NET ASSETS (equivalent to $12.97, $13.93
and $14.91 per unit based on 1,328,560,
4,744,620 and 3,478,382 units
outstanding, respectively)............... $17,227,818 $66,094,881 $51,868,009
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-87
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
STRUCTURED PORTFOLIO SERVICE
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
CONSERVATIVE MODERATE AGGRESSIVE
------------ ---------- ----------
<S> <C> <C> <C>
Investment income.......................... $ -- $ -- $ --
Service fees............................... 13,726 50,019 40,062
---------- ---------- ----------
Net investment loss........................ (13,726) (50,019) (40,062)
---------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS
Net realized gain on investments......... 1,207,158 3,024,522 2,739,133
Change in net unrealized appreciation.... 616,834 4,925,526 4,820,721
---------- ---------- ----------
Net realized and unrealized gain on
investments........................... 1,823,992 7,950,048 7,559,854
---------- ---------- ----------
Net increase in net assets resulting from
operations................................ $1,810,266 $7,900,029 $7,519,792
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-88
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
STRUCTURED PORTFOLIO SERVICE
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
CONSERVATIVE MODERATE AGGRESSIVE
------------ ----------- -----------
<S> <C> <C> <C>
FROM OPERATIONS
Net investment loss................... $ (8,859) $ (24,228) $ (17,939)
Net realized gain on investments...... 361,277 839,719 770,720
Net change in unrealized appreciation
on investments....................... 517,590 2,209,625 2,216,922
----------- ----------- -----------
Net increase in net assets resulting
from operations...................... 870,008 3,025,116 2,969,703
----------- ----------- -----------
FROM UNITHOLDER TRANSACTIONS
Proceeds from sales of units.......... 7,290,330 21,783,374 16,350,276
Cost of units redeemed................ (2,331,440) (4,570,137) (3,761,578)
----------- ----------- -----------
Net increase in net assets resulting
from unitholder transactions......... 4,958,890 17,213,237 12,588,698
----------- ----------- -----------
Net increase in net assets.......... 5,828,898 20,238,353 15,558,401
NET ASSETS
Beginning of year..................... 5,372,079 12,378,987 9,999,460
----------- ----------- -----------
End of year........................... $11,200,977 $32,617,340 $25,557,861
=========== =========== ===========
NUMBER OF UNITS
Outstanding--beginning of year........ 513,200 1,173,968 946,103
Sold................................ 679,535 1,965,891 1,429,208
Redeemed............................ (215,533) (406,631) (315,215)
----------- ----------- -----------
Outstanding--end of year.............. 977,202 2,733,228 2,060,096
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-89
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
STRUCTURED PORTFOLIO SERVICE
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
CONSERVATIVE MODERATE AGGRESSIVE
------------ ----------- -----------
<S> <C> <C> <C>
FROM OPERATIONS
Net investment loss................... $ (13,726) $ (50,019) $ (40,062)
Net realized gain on investments...... 1,207,158 3,024,522 2,739,133
Net change in unrealized appreciation
on investments....................... 616,834 4,925,526 4,820,721
----------- ----------- -----------
Net increase in net assets resulting
from operations...................... 1,810,266 7,900,029 7,519,792
----------- ----------- -----------
FROM UNITHOLDER TRANSACTIONS
Proceeds from sales of units.......... 8,482,695 31,899,113 25,053,575
Cost of units redeemed................ (4,266,120) (6,321,601) (6,263,219)
----------- ----------- -----------
Net increase in net assets resulting
from unitholder transactions......... 4,216,575 25,577,512 18,790,356
----------- ----------- -----------
Net increase in net assets............ 6,026,841 33,477,541 26,310,148
NET ASSETS
Beginning of year..................... 11,200,977 32,617,340 25,557,861
----------- ----------- -----------
End of year........................... $17,227,818 $66,094,881 $51,868,009
=========== =========== ===========
NUMBER OF UNITS
Outstanding--beginning of year........ 977,202 2,733,228 2,060,096
Sold................................ 699,243 2,500,711 1,866,881
Redeemed............................ (347,885) (489,319) (448,595)
----------- ----------- -----------
Outstanding--end of year.............. 1,328,560 4,744,620 3,478,382
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-90
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
STRUCTURED PORTFOLIO SERVICE
SELECTED PER-UNIT DATA AND RATIOS
(For a unit outstanding throughout the period)*
<TABLE>
<CAPTION>
FOR THE PERIOD
SEPTEMBER 5, 1995
(COMMENCEMENT OF
OPERATIONS) TO
DECEMBER 31, 1995
----------------------------------
CONSERVATIVE MODERATE AGGRESSIVE
------------ -------- ----------
<S> <C> <C> <C>
Investment income............................ $ .001 $ .001 $ .001
Expenses..................................... (.003) (.003) (.003)
------ ------- ------
Net investment loss.......................... (.002) (.002) (.002)
Net realized and unrealized gain on invest-
ments....................................... .472 .542 .572
------ ------- ------
Net increase................................. .47 .54 .57
Net asset value at beginning of period....... 10.00 10.00 10.00
------ ------- ------
Net asset value at end of period............. $10.47 $ 10.54 $10.57
====== ======= ======
Ratio of expenses to average net assets**.... .09 % .09 % .09 %
Ratio of net investment loss to average net
assets**.................................... (.06)% (.06)% (.06)%
Portfolio turnover*** ****................... 3 % 4 % 3 %
Total return****............................. 4.70 % 5.40 % 5.70 %
Net assets at end of period (in thousands)... $5,372 $12,379 $9,999
</TABLE>
- --------
* Calculations prepared using the monthly average number of units
outstanding during the period.
** Ratios annualized.
*** Reflects purchases and sales of units of the funds in which the Portfolios
invest rather than turnover of such underlying funds.
**** Not annualized.
The accompanying notes are an integral part of these financial statements.
F-91
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
STRUCTURED PORTFOLIO SERVICE
SELECTED PER-UNIT DATA AND RATIOS
FOR THE YEAR ENDED DECEMBER 31, 1996
(For a unit outstanding throughout the year)*
<TABLE>
<CAPTION>
CONSERVATIVE MODERATE AGGRESSIVE
------------ -------- ----------
<S> <C> <C> <C>
Investment income............................ $ -- $ -- $ --
Expenses..................................... (.01) (.01) (.01)
------- ------- -------
Net investment loss.......................... (.01) (.01) (.01)
Net realized and unrealized gain on
investments................................. 1.00 1.40 1.85
------- ------- -------
Net increase................................. .99 1.39 1.84
Net asset value at beginning of year......... 10.47 10.54 10.57
------- ------- -------
Net asset value at end of year............... $ 11.46 $ 11.93 $ 12.41
======= ======= =======
Ratio of expenses to average net assets...... .10 % .10 % .10 %
Ratio of net investment loss to average net
assets...................................... (.10)% (.10)% (.10)%
Portfolio turnover**......................... 34 % 27 % 28 %
Total return................................. 9.46 % 13.19 % 17.41 %
Net assets at end of year (in thousands)..... $11,201 $32,617 $25,558
</TABLE>
- --------
* Calculations prepared using the monthly average number of units outstanding
during the year.
** Reflects purchases and sales of units of the funds in which the Portfolios
invest rather than turnover of such underlying funds.
The accompanying notes are an integral part of these financial statements.
F-92
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
STRUCTURED PORTFOLIO SERVICE
SELECTED PER-UNIT DATA AND RATIOS
FOR THE YEAR ENDED DECEMBER 31, 1997
(For a unit outstanding throughout the year)*
<TABLE>
<CAPTION>
CONSERVATIVE MODERATE AGGRESSIVE
------------ -------- ----------
<S> <C> <C> <C>
Investment income............................ $ -- $ -- $ --
Expenses..................................... (.01) (.01) (.01)
------- ------- -------
Net investment loss.......................... (.01) (.01) (.01)
Net realized and unrealized gain on
investments................................. 1.52 2.01 2.51
------- ------- -------
Net increase................................. 1.51 2.00 2.50
Net asset value at beginning of year......... 11.46 11.93 12.41
------- ------- -------
Net asset value at end of year............... $ 12.97 $ 13.93 $ 14.91
======= ======= =======
Ratio of expenses to average net assets...... .09% .09% .09%
Ratio of net investment loss to average net
assets...................................... (.09%) (.09%) (.09%)
Portfolio turnover**......................... 33% 18% 18%
Total return................................. 13.18% 16.76% 20.15%
Net assets at end of year (in thousands)..... $17,228 $66,095 $51,868
</TABLE>
- --------
* Calculations prepared using the monthly average number of units outstanding
during the year.
** Reflects purchases and sales of units of the funds in which the Portfolios
invest rather than turnover of such underlying funds.
The accompanying notes are an integral part of these financial statements.
F-93
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE TRUST
American Bar Association Members/State Street Collective Trust (the "Trust")
was organized on August 8, 1991 under a Declaration of Trust, as amended and
restated on December 5, 1991 and as amended thereafter. The Trust is maintained
exclusively for the collective investment monies administered on behalf of
participants in the American Bar Association Members Retirement Program. Eight
separate collective investment Funds (the "Funds") and the Structured Portfolio
Service (the "Portfolios") are established under the Trust. The Structured
Portfolio Service offers three approaches to diversifying investments by
selecting various allocations among the Funds. The Funds and Portfolios are
investment options under the American Bar Association Members Retirement
Program (the "Program") which is sponsored by the American Bar Retirement
Association ("ABRA"). The objectives of the Funds and Portfolios are as
follows:
Aggressive Equity Fund--long term growth of capital through investment in
common stocks of small to medium sized companies believed to have strong
appreciation potential.
Balanced Fund--current income and long-term capital appreciation through
investment in common stocks, other equity-type securities and debt
securities.
Growth Equity Fund--long term growth of capital and some dividend income
through investment in common stocks and equity-type securities of large,
well established companies.
Stable Asset Return Fund ("SARF")--current income consistent with
preserving principal and maintaining liquidity through investment in high
quality money market instruments and investment contracts of insurance
companies, banks and financial institutions. Currently invests in the State
Street Bank ABA Members/Pooled Stable Asset Fund Trust ("SAFT"), a separate
State Street Bank and Trust Company ("State Street Bank" or the "Trustee")
collective investment fund. SAFT invests in investment contracts of
insurance companies, banks and financial institutions and in the State
Street Bank Yield Enhanced Short Term Investment Fund, a separate State
Street Bank collective investment fund.
Index Equity Fund--replication of the total return of the Russell 3,000
Index. Currently invests in the State Street Global Advisors Flagship S&P
500 Index Fund (the "500 Index Fund") and State Street Global Advisors
Russell Special Small Company Common Trust Fund (the "Russell Fund"),
separate State Street Bank collective investment funds. The 500 Index Fund
invests in equity securities which comprise the Standard & Poor's 500 Index
and the Russell Fund invests in securities contained in the Russell Special
Company Index.
Intermediate Bond Fund--total return from current income and capital
appreciation through investment in debt securities. Currently invests in
the PIMCO Total Return Fund (the "Total Return Fund") and MasterWorks Bond
Index Fund (the "Bond Index Fund"), registered investment companies. The
Total Return Fund invests primarily in intermediate-term investment grade
bonds. The Bond Index Fund invests in high grade bonds denominated in U.S.
dollars.
International Equity Fund--long term growth of capital through investment
in common stocks and other equity securities of established non-U.S.
companies. Currently invests in the T. Rowe Price International Stock Fund,
a registered investment company, which invests worldwide primarily in well-
established, non-U.S. companies.
Value Equity Fund--long term growth of capital and dividend income
through investment in common stocks, primarily of large capitalization
companies believed to be undervalued.
F-94
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
Structured Portfolio Service
Conservative--high current investment income and some capital
appreciation.
Moderate--higher current investment income and greater capital
appreciation.
Aggressive--long term growth of capital and lower current investment
income.
Each Structured Portfolio Service achieves its objective through a pre-
determined investment allocation in the Funds. See Statement of Assets and
Liabilities for Fund allocation at December 31, 1997.
The Trust may offer and sell an unlimited number of units representing
interests in separate Funds and Portfolios of the Trust, each unit to be
offered and sold at the per unit net asset value of the corresponding Fund or
Portfolio.
State Street Bank serves as trustee of the Trust and has assumed
responsibility for administering and providing investment options for the
Program. State Street Bank is a trust company established under the laws of The
Commonwealth of Massachusetts and is a wholly-owned subsidiary of State Street
Corporation, a Massachusetts corporation and a holding company registered under
the Federal Bank Holding Company Act of 1956, as amended.
State Street Bank is responsible for certain recordkeeping and administrative
services required by the Program. In addition, State Street Bank provides
account and investment information to employers and participants, receives all
plan contributions, effects investment and transfer transactions and
distributes all benefits provided by the plans to the participants or, in the
case of some individually designed plans, to the trustees of such plans.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
policies are in accordance with generally accepted accounting principles and
provisions of the Trust agreement:
A. Security Valuation
Stable Asset Return Fund: It is the Trust's policy to attempt to maintain
a constant price of $1.00 per unit for SARF. SARF invests in a State Street
Bank collective investment fund (SAFT) whose investments include insurance
company, bank and financial institution investment contracts and short-term
investments. Consistent with this objective, the short-term portfolio
instruments of the collective investment fund are valued on the basis of
amortized cost which approximates fair value. Amortized cost involves
valuing an instrument initially at its cost and thereafter assuming a
constant amortization to maturity of any discount or premium, regardless of
the impact of fluctuating interest rates on the market value of the
instrument. The insurance company, bank and financial institution
investment contracts are maintained at contract value (cost plus accrued
interest) which approximates fair value. The values of investments in
collective investment funds are based on the net asset value of the
respective collective investment fund.
Other Funds: Stocks listed on national securities exchanges and certain
over-the-counter issues traded on the National Association of Securities
Dealers, Inc. automated quotation
F-95
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(NASDAQ) national market system are valued at the last sale price, or, if
no sale, at the latest available bid price. Other unlisted stocks reported
on the NASDAQ system are valued at quoted bid prices.
Foreign securities not traded directly or in American Depository Receipt
(ADR) form in the United States are valued in the local currency at the
last sale price on the respective exchange. Foreign currency is converted
into its U.S. dollar equivalent at current exchange rates.
United States Treasury securities and other obligations issued or
guaranteed by the United States Government, its agencies or
instrumentalities are valued at representative quoted prices.
Long-term publicly traded corporate bonds are valued at prices obtained
from a bond pricing service of a major dealer in bonds when such prices are
available. If not valued by a pricing service, such securities are valued
at prices obtained from independent brokers. Convertible bonds and unlisted
convertible preferred stocks are valued at bid prices obtained from one or
more major dealers in such securities; where there is a discrepancy between
dealers, values may be adjusted based on recent discount spreads to the
underlying common stock.
Investments with prices that cannot be readily obtained, if any, are
carried at fair value as determined in good faith under consistently
applied procedures established by and under the supervision of the Trustee.
The values of investments in collective investment funds and registered
investment companies are based on the net asset value of the respective
collective investment fund or registered investment company.
B. Security Transactions and Related Investment Income
Security transactions are accounted for on the trade date (date the order
to buy or sell is executed). Interest income is recorded on the accrual
basis. Dividend income is recorded on the ex-dividend date. Interest income
is increased by accretion of discount and reduced by amortization of
premium. Realized gains and losses are reported on the basis of identified
cost of securities delivered.
A Fund's portfolio of investments may include securities purchased on a
when issued basis, which may be settled in the month after the issue date.
Interest income is not accrued until the settlement date.
C. Income Taxes
State Street Bank, on behalf of the Trust, has received a favorable
determination letter dated March 9, 1992, from the Internal Revenue Service
which concluded that the Trust is a trust arrangement described in Rev.
Rul. 81-100, 1981, C.B. 326 and exempt from federal income tax pursuant to
Section 501(a) of the Internal Revenue Code. Accordingly, no provision for
Federal income taxes is required.
D. Distributions to Participants
Stable Asset Return Fund: As of the close of business on each daily
valuation date, all net investment income is allocated among the
unitholders in proportion to the number of units held by each unitholder in
the fund and is reinvested on behalf of each such unitholder in new units.
All Other Funds: Pursuant to the Declaration of Trust, the funds are not
required to distribute their net investment income or gains from the sale
of portfolio investments.
F-96
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
E. Sales and Redemptions of Units of Participation
The units offered represent interests in the Funds and Portfolios
established under the Trust. The Trust may offer and sell an unlimited
number of registered units, each unit to be offered and sold at the
respective Fund's and Portfolio's net asset value.
F. Use of Estimates
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from those estimates.
3. INVESTMENT ADVISORY, INVESTMENT MANAGEMENT AND RELATED PARTY TRANSACTIONS
State Street Bank has retained the services of Capital Guardian Trust
Company, a wholly-owned subsidiary of The Capital Group Companies, Inc.,
Columbus Circle Investors, a division of PIMCO Advisors, L.P., Dresdner RCM
Global Investors LLC (formerly RCM Capital Management), the institutional
investment management arm of Dresdner Bank Group, Sit Investment Associates,
Inc., Miller, Anderson & Sherrerd, LLP, a wholly owned subsidiary of Morgan
Stanley Asset Management Holdings, Inc., Lincoln Capital Management Company,
Sanford C. Bernstein & Co., Inc., and Bankers Trust Company to advise it with
respect to its investment responsibility and has allocated the assets of
certain of the Funds among the investment advisors. Each investment advisor
recommends to State Street Bank investments and reinvestments of the assets
allocated to it in accordance with the investment policies of the respective
Fund as described above. State Street Bank exercises discretion with respect to
the selection and retention of the investment advisors and may remove, upon
consultation with ABRA, an investment advisor at any time.
A fee is paid to each investment advisor for certain of the funds based on
the value of the assets allocated to that investment advisor and the respective
breakpoints agreed to in the contract. These fees are accrued on a daily basis
and paid monthly from the assets. Fee rate ranges based on the respective
breakpoints are as follows:
<TABLE>
<CAPTION>
INVESTMENT ADVISOR FEE RATE RANGE
------------------ ---------------------
<S> <C> <C>
Capital Guardian Trust Company (Growth Equity,
Aggressive Equity and Balanced--effective June 30,
1997)............................................... .225% to .50%*
Columbus Circle Investors (Growth Equity--prior to
June 16, 1997)...................................... .30% to .50%
Dresdner RCM Global Investors LLC (Growth Equity).... .25% to .70%
Sit Investment Associates (Aggressive Equity)........ .60% to 1.00%
Miller, Anderson & Sherrerd, LLP (Balanced--prior to
June 30, 1997)...................................... .20% to .60%
Miller, Anderson & Sherrerd, LLP (Balanced--effective
June 30, 1997)...................................... .125% to .50%
Lincoln Capital Management Company (Balanced--prior
to June 30, 1997 and Growth Equity--effective June
30, 1997)........................................... .15% to .4675%
Sanford C. Bernstein & Co., Inc. (Value Equity)...... .15% to .50%
Bankers Trust Company (Growth Equity--effective June
16, 1997)........................................... .010% to .075%**
</TABLE>
- --------
* Subject to a 5% fee reduction based on aggregate fees.
**Minimum fee of $75,000.
F-97
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
Effective June 30, 1997 the investment allocations by advisor for the
Balanced Fund and Growth Equity Fund were restructured. As a result,
$169,000,000 equities of the Growth Equity Fund managed by Capital Guardian
Trust Company were exchanged at value for $84,000,000 and $85,000,000 equities
of the Balanced Fund managed by Miller Anderson & Sherrerd, LLP and Lincoln
Capital Management Company, respectively.
Price-Fleming, manager of the T. Rowe Price International Stock Fund, pays a
.10% fee based on investment value for administrative services which is
credited to the International Equity Fund. The International Equity Fund
received $37,721 relating to this fee for the year ended December 31, 1997.
A program fee ("Program Fee") is paid to State Street Bank and ABRA based on
the value of Program assets. This fee is accrued on a daily basis and paid
monthly from the assets of the Funds based on the following annual rates:
<TABLE>
<CAPTION>
RATE FOR RATE FOR
STATE STREET BANK ABRA
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
VALUE OF PROGRAM ASSETS 1997 1997
----------------------- ----------------- ------------
<S> <C> <C>
First $500 million......................... .564% .075%
Next $850 million.......................... .40% .065%
Next $1.15 billion......................... .25% .035%
Next $1.5 billion.......................... .175% .025%
Over $4.0 billion.......................... .15% .015%
</TABLE>
Program fees are allocated to each Fund based on net asset value. State
Street Bank and ABRA received Program fees of $8,656,387 and $1,264,595 for the
year ended December 31, 1997, respectively.
A fee is paid to State Street Bank for its trustee, management and
administration of the assets in the Funds. This fee is accrued on a daily basis
and paid monthly from the assets of the Funds at the following annual rates:
<TABLE>
<CAPTION>
VALUE OF ASSETS IN BALANCED, VALUE EQUITY,
GROWTH EQUITY, AGGRESSIVE EQUITY AND
INTERNATIONAL EQUITY FUNDS RATE
------------------------------------------ ----
<S> <C>
First $500 million.................................................. .10%
Next $500 million................................................... .075%
Over $1 billion..................................................... .05%
<CAPTION>
VALUE OF ASSETS IN INDEX EQUITY FUND RATE
------------------------------------ ----
<S> <C>
First $50 million................................................... .20%
Over $50 million.................................................... .13%
<CAPTION>
VALUE OF ASSETS IN STABLE ASSET RETURN FUND* RATE
-------------------------------------------- ----
<S> <C>
First $750 million.................................................. .20%
Next $250 million................................................... .10%
Over $1.0 billion................................................... .075%
<CAPTION>
VALUE OF ASSETS IN INTERMEDIATE BOND FUND RATE
----------------------------------------- ----
<S> <C>
First $500 million.................................................. .10%
Next $500 million................................................... .075%
Over $1.0 billion................................................... .05%
</TABLE>
F-98
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
- --------
* For the purpose of determining the management fees charged to assets
invested in the Stable Asset Return Fund and administrative fees charged to
assets invested in Insurance Investment Contracts (an investment option of
the Program not included in the Trust), the amount of the assets held in
these two investment options is aggregated.
State Street Bank received trustee, management and administration fees which
aggregated $2,750,460 for the year ended December 31, 1997. These fees are
allocated to each Fund based on net asset value.
Assets allocated to the Portfolios are not subject to any fees except an
annual service fee of .10% for the first $100 million and .05% over $100
million. State Street Bank received Portfolio service fees of $103,807 for the
year ended December 31, 1997.
4. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities
excluding U.S. Government and short-term investments were as follows:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1997
-------------------------
PURCHASES SALES
------------ ------------
<S> <C> <C>
Aggressive Equity Fund.......................... $140,277,473 $150,484,869
Growth Equity Fund.............................. 969,322,383 988,733,301
Balanced Fund................................... 384,830,700 371,973,516
Stable Asset Return Fund........................ 194,592,514 196,243,981
Index Equity Fund............................... 58,281,518 19,901,040
Value Equity Fund............................... 53,164,546 9,911,761
International Equity Fund....................... 84,464,937 57,676,494
Intermediate Bond Fund.......................... 41,795,362 9,281,155
Conservative Structured Portfolio Service....... 10,045,209 5,836,697
Moderate Structured Portfolio Service........... 38,223,214 12,646,303
Aggressive Structured Portfolio Service......... 29,335,539 10,465,964
</TABLE>
The aggregate cost of purchases and proceeds from sales of U.S. Government
securities were as follows:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1997
-------------------------
PURCHASES SALES
------------ ------------
<S> <C> <C>
Balanced Fund.................................... $273,356,285 $278,450,278
Value Equity Fund................................ 3,186,143 --
Growth Equity Fund............................... 9,034,914 3,665,583
</TABLE>
5. ORGANIZATIONAL EXPENSES
Expenses incurred in connection with the addition of new Funds and Portfolios
and the reorganization of the Program in 1995 included state and federal
securities registration fees, legal and accounting fees and expenses and
printing costs. These expenses were allocated to the Funds based on net asset
value, capitalized by each Fund and amortized over a period of 36 months on a
straight line basis. Organizational costs are reallocated on a quarterly basis
between Funds based on net asset value. There were no organizational expenses
allocated to the Portfolios.
F-99
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
If a Fund should terminate prior to the full amortization of its
organizational expenses, the amount per unit that will be realized by investors
upon the liquidation of the Fund may be less than the per unit net asset value
of the Fund at the time of liquidation. The unamortized portion of the
organizational expenses will be charged as an expense of the Fund in the event
of termination.
6. GEOGRAPHIC AND INDUSTRY CONCENTRATION
American Depositary Receipts ("ADRs") represent ownership of foreign
securities on deposit with a domestic custodian bank. Certain Funds maintain
investments in ADRs which involve special risks. These securities may be
subject to foreign government taxes that reduce their attractiveness. Other
risks of investing in such securities include political or economic instability
in the country involved, the difficulty of predicting international trade
patterns and the possibility of the imposition of exchange controls. Foreign
issuers generally are not subject to uniform accounting, auditing and financial
reporting standards comparable to those applicable to domestic issuers. There
is generally less regulation of stock exchanges, brokers, banks and companies
abroad than in the United States. With respect to certain foreign countries,
there is a possibility of expropriation or diplomatic developments which could
adversely affect investment in these countries. ADRs do not lessen the risk of
investing in foreign issuers; however, by investing in ADRs rather than
directly in foreign issuers' stock, the Funds will avoid currency risks during
the settlement period for purchases or sales. In addition, the domestic market
for ADRs may be more liquid than the foreign market for the underlying
securities.
A significant portion of the Aggressive Equity Fund's investments are in
securities of small to medium-sized companies, which typically have greater
market and financial risk than larger, more diversified companies. These
companies are often dependent on one or two products in rapidly changing
industries and may be more vulnerable to competition from larger companies with
greater resources and to economic conditions that affect their market sector.
SARF invests in a collective investment fund that maintains investments in
contracts issued by insurance companies. The issuing institution's ability to
meet its contractual obligations under the respective contracts may be affected
by future economic and regulatory developments in the insurance industry.
- --------------------------------------------------------------------------------
Event (Unaudited) Subsequent to the Date of the Independent Auditor's Report.
On November 9, 1998, State Street Bank and ABRA amended and restated the
agreement under which State Street Bank provides administrative and investment
services to the Program resulting in the following changes in fees:
State Street Bank Program expense fee:
The Program fee for the year ending December 31, 1999 will be a fixed fee of
$7,450,000. Effective January 1, 2000, the fee will be calculated monthly as
one-twelfth of the sum of (a) $750,000 plus (b) $191 multiplied by the number
of participants in the Program, as further defined in the agreement.
State Street Bank trustee, management and administrative fees:
Effective January 1, 1999, the fee payable to State Street Bank for its
management, administration and custody services for each of the Funds will be
as follows:
<TABLE>
<CAPTION>
VALUE OF ASSETS IN
FUNDS RATE
------------------ -------
<S> <C>
First $1.0 billion .15%
Next $1.8 billion .058%
Over $2.8 billion .025%
</TABLE>
The Structured Portfolio Service will no longer be charged a separate annual
fee.
F-100
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
AGGRESSIVE EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost $256,262,150)......................... $259,382,791
Cash.............................................................. 1,159
Receivable for investments sold................................... 1,371,006
Dividends and interest receivable................................. 153,986
------------
Total Assets.................................................... 260,908,942
------------
LIABILITIES
Payable for investments purchased................................. 1,420,828
Payable for fund units redeemed................................... 205,935
Investment advisory fee payable................................... 575,544
Sate Street Bank and Trust Company--program fee payable........... 70,233
Trustee, management, and administration fees payable.............. 23,612
American Bar Retirement Association--program fee payable.......... 10,771
Other accruals.................................................... 22,644
------------
Total Liabilities............................................... 2,329,567
------------
NET ASSETS (equivalent to $42.22 per unit based on 6,124,523 units
outstanding)..................................................... $258,579,375
============
</TABLE>
F-101
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
AGGRESSIVE EQUITY FUND
STATEMENT OF OPERATIONS
FOR THE PERIOD JANUARY 1, 1998 TO SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends....................................................... $ 1,119,442
Interest........................................................ 514,655
------------
Total investment income....................................... 1,634,097
------------
EXPENSES
Investment advisory fee......................................... 1,071,545
State Street Bank and Trust Company--program fee................ 790,432
American Bar Retirement Association--program fee................ 115,262
Trustee, management and administration fees..................... 168,862
Other expenses and taxes........................................ 91,738
Amortization of organization expenses........................... 53,124
------------
Total expenses................................................ 2,290,963
------------
Net investment loss............................................... (656,866)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain............................................... 39,509,676
Change in net unrealized appreciation........................... (76,007,383)
------------
Net realized and unrealized loss on investments............... (36,497,707)
------------
Net decrease in net assets resulting from operations.............. $(37,154,573)
============
</TABLE>
F-102
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
AGGRESSIVE EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
UNAUDITED
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 1, 1998
TO SEPTEMBER 30, 1998
---------------------
<S> <C>
FROM OPERATIONS
Net investment loss.................................... $ (656,866)
Net realized gain on investments....................... 39,509,676
Net change in unrealized appreciation on investments... (76,007,383)
------------
Net decrease in net assets resulting from operations... (37,154,573)
------------
FROM UNITHOLDER TRANSACTIONS
Proceeds from units issued............................. 18,480,340
Cost of units redeemed................................. (54,685,980)
------------
Net decrease in net assets resulting from unitholder
transactions.......................................... (36,205,640)
------------
Net decrease in net assets........................... (73,360,213)
NET ASSETS
Beginning of period.................................... 331,939,588
------------
End of period.......................................... $258,579,375
============
NUMBER OF UNITS
Outstanding--beginning of period....................... 6,831,480
Sold................................................. 361,827
Redeemed............................................. (1,068,784)
------------
Outstanding--end of period............................. 6,124,523
============
</TABLE>
F-103
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
AGGRESSIVE EQUITY FUND
SELECTED PER-UNIT DATA AND RATIOS
UNAUDITED
<TABLE>
<S> <C>
For a unit outstanding throughout the period:*
<CAPTION>
FOR THE PERIOD
JANUARY 1, 1998
TO SEPTEMBER 30, 1998
---------------------
<S> <C>
Investment income........................................... $ 0.25
Expenses.................................................... (0.35)
--------
Net investment loss......................................... (0.10)
Net realized and unrealized loss on investments............. (6.27)
--------
Net decrease in unit value.................................. (6.37)
Net asset value at beginning of period...................... 48.59
--------
Net asset value at end of period............................ $ 42.22
========
Ratio of expenses to average net assets**................... 0.93 %
Ratio of net investment loss to average net assets**........ (0.27)%
Portfolio turnover***....................................... 36.04 %
Total return***............................................. (13.11)%
Average commissions rate***................................. $ 0.0504
Net assets at end of period (in thousands).................... $258,579
</TABLE>
- --------
*Calculations prepared using the monthly average number of units outstanding
during the period.
**Annualized
***Not annualized
F-104
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
AGGRESSIVE EQUITY FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------- ----------
<S> <C> <C>
COMMON STOCK (87.6%)
BASIC INDUSTRIES (3.5%)
CHEMICALS (2.4%)
H.B. Fuller Co. ............................................ 30,000 $1,136,250
OM Group Inc. .............................................. 42,000 1,183,875
RPM Inc. ................................................... 93,593 1,351,249
Sterling Commerce Inc.*..................................... 70,500 2,441,062
----------
6,112,436
----------
PAPER (0.9%)
Caraustar Industries Inc. .................................. 45,000 1,023,750
Pentair Inc. ............................................... 40,000 1,290,000
----------
2,313,750
----------
PLASTICS (0.2%)
Advanced Energy Industries Inc.*............................ 83,000 606,938
----------
9,033,124
----------
CAPITAL GOODS (4.5%)
AGRICULTURAL MACHINERY (0.4%)
Delta & Pine Land Co. ...................................... 25,500 1,122,000
----------
BUILDING CONSTRUCTION (0.2%)
Building One Services Corporation*.......................... 41,500 513,562
----------
ELECTRICAL EQUIPMENT (0.5%)
Kulicke & Soffa Industries*................................. 85,000 1,158,125
----------
INDUSTRIAL MACHINERY (3.0%)
AAR Corp. .................................................. 33,000 647,625
Alyn Corporation*........................................... 107,000 508,250
Crane Co. .................................................. 92,250 2,167,875
Integrated Process Equipment Corp.*......................... 45,000 337,500
Kennametal Inc. ............................................ 66,000 1,777,875
NN Ball & Roller Inc. ...................................... 112,700 901,600
US Filter Corp.*............................................ 80,500 1,288,000
----------
7,628,725
----------
POLLUTION CONTROL (0.3%)
Waste Management International PLC ADR* ** ................. 64,000 736,000
----------
MISCELLANEOUS (0.2%)
Silicon Valley Group Inc. .................................. 75,000 600,000
----------
11,758,412
----------
</TABLE>
F-105
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
AGGRESSIVE EQUITY FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------- ----------
<S> <C> <C>
CONSUMER BASICS (10.9%)
DRUGS & HEALTH CARE (9.4%)
Apria Healthcare Group Inc.*................................ 83,800 $ 366,625
Becton Dickinson & Co. ..................................... 37,500 1,542,187
Biogen Inc.*................................................ 87,000 5,725,687
Cardiac Pathways Corporation*............................... 8,000 40,000
Cardinal Health Inc. ....................................... 12,500 1,290,625
Corporate Therapeutics Inc.*................................ 60,000 465,000
Elan PLC ADR* ** ........................................... 88,000 6,341,500
Gilead Sciences Inc.*....................................... 66,500 1,438,063
Healthsouth Rehabilitation*................................. 127,500 1,346,719
Immune Response Corp.*...................................... 137,700 1,583,550
KOS Pharmaceuticals Inc*.................................... 167,000 991,563
Millennium Pharmaceuticals*................................. 26,600 462,175
Physio Control International Corp. ......................... 20,700 569,250
Stryker Corp. .............................................. 64,000 2,176,000
----------
24,338,944
----------
FOOD & BEVERAGES (1.3%)
Ben & Jerry's Homemade Inc.*................................ 50,000 743,750
Ionics Inc.*................................................ 33,000 874,500
Fresh Del Monte Produce..................................... 100,000 1,700,000
----------
3,318,250
----------
HOUSEHOLD PRODUCTS (0.2%)
USA Detergents Inc.*........................................ 58,000 464,000
----------
28,121,194
----------
CONSUMER DURABLE GOODS (3.3%)
AUTOMOBILES (1.2%)
Harley Davidson Inc. ....................................... 107,500 3,157,812
----------
AUTO PARTS (0.7%)
Borg Warner Automotive Inc. ................................ 24,000 889,500
Standard Products Co. ...................................... 34,400 602,000
Walbro Corp. ............................................... 42,000 338,625
----------
1,830,125
----------
HOUSEHOLD APPLIANCES & HOME FURNISHINGS (0.9%)
Harman International Industries Inc. ....................... 20,000 733,750
Libbey Inc. ................................................ 56,000 1,652,000
----------
2,385,750
----------
TIRES & RUBBER (0.5%)
Bandag Inc. ................................................ 39,000 1,238,250
----------
8,611,937
----------
</TABLE>
F-106
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
AGGRESSIVE EQUITY FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------- ----------
<S> <C> <C>
CONSUMER NON-DURABLES (5.8%)
APPAREL & TEXTILES (0.3%)
Novel Denim Holdings Limited................................ 58,000 $ 681,500
----------
COSMETICS & TOILETRIES (0.5%)
Estee Lauder Cos., Inc. .................................... 20,000 1,025,000
Paragon Trade Brands Inc.*.................................. 76,900 249,925
----------
1,274,925
----------
LIQUOR (0.1%)
Robert Mondavi Corp. ....................................... 16,500 368,156
----------
RETAIL TRADE (4.9%)
Dollar General Corp. ....................................... 53,750 1,431,094
Kohls Corp.*................................................ 83,000 3,237,000
Micro Warehouse Inc.*....................................... 36,000 542,250
Nine West Group Inc. ....................................... 38,100 364,331
Pier 1 Imports Inc. ........................................ 98,700 740,250
Saks Incorporated*.......................................... 104,500 2,344,719
Staples Inc.*............................................... 139,000 4,083,125
----------
12,742,764
----------
15,067,350
----------
CONSUMER SERVICES (2.4%)
AIR TRAVEL (0.4%)
America West Holding Corp.*................................. 54,800 685,000
Continental Airlines Inc.*.................................. 13,000 490,750
----------
1,175,750
----------
HOTELS & RESTAURANTS (0.6%)
Rio Hotel & Casino Inc.*.................................... 42,300 584,269
Ruby Tuesday Inc. .......................................... 56,400 853,050
Sizzler International Inc. ................................. 69,500 125,969
----------
1,563,288
----------
LEISURE TIME (1.3%)
Ascent Entertainment Group Inc.*............................ 97,637 781,096
CNET Inc. .................................................. 17,000 777,750
Imax Corp ADR**............................................. 55,000 1,100,000
Westwood One Inc.*.......................................... 40,000 715,000
----------
3,373,846
----------
6,112,884
----------
ENERGY (2.8%)
DOMESTIC OIL (0.3%)
Pogo Producing Co. ......................................... 45,000 672,188
----------
INTERNATIONAL OIL (0.6%)
Ranger Oil Ltd ADR* **...................................... 250,000 1,640,625
----------
</TABLE>
F-107
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
AGGRESSIVE EQUITY FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------- ----------
<S> <C> <C>
GAS EXPLORATION (0.8%)
Energen Corp. .............................................. 65,000 $1,235,000
Vintage Petroleum Inc. ..................................... 73,000 839,500
----------
2,074,500
----------
PETROLEUM SERVICES (1.1%)
Transocean Offshore Inc. ................................... 81,100 2,813,156
----------
7,200,469
----------
FINANCE (11.6%)
BANKS (3.1%)
Bank United Corporation..................................... 44,300 1,586,493
CCB Financial Corp. ........................................ 13,800 1,390,350
Community Sngs Bankshares Incorporated...................... 40,000 870,000
First America Bank Corp. ................................... 58,000 2,225,750
Hibernia Corp............................................... 41,300 596,269
Pacific Bank National Association........................... 7,300 317,550
PFF Bancorp Inc. ........................................... 70,000 1,067,500
----------
8,053,912
----------
FINANCIAL SERVICES (1.9%)
Americredit Corp.*.......................................... 46,700 1,138,312
First Alliance Company*..................................... 90,000 568,125
Medallion Financial Corporation............................. 78,000 1,228,500
Reliastar Financial Corp. .................................. 49,500 1,930,500
----------
4,865,437
----------
INSURANCE (4.4%)
ACE Ltd ADR**............................................... 123,000 3,690,000
Harleysville Group Inc. .................................... 60,000 1,237,500
Mercury General Corp. ...................................... 113,500 4,256,250
Mutual Risk Management Ltd ADR**............................ 46,500 1,644,937
NYMAGIC Inc. ............................................... 25,000 634,375
----------
11,463,062
----------
INVESTMENT COMPANIES (0.9%)
Ocwen Asset Investment Corp. ............................... 17,000 132,813
T. Rowe Price Associates Inc. .............................. 71,400 2,097,375
----------
2,230,188
----------
SAVINGS AND LOAN (1.3%)
Fidelity Bankshares Incorporated............................ 28,000 658,000
TCF Financial Corp. ........................................ 142,500 2,832,188
----------
3,490,188
----------
30,102,787
----------
</TABLE>
F-108
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
AGGRESSIVE EQUITY FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------- ----------
<S> <C> <C>
GENERAL BUSINESS (14.9%)
BROADCASTING (2.0%)
Cablevision Systems Corp. .................................. 41,600 $1,796,600
Jacor Communications Inc.*.................................. 24,000 1,215,000
Macromedia Inc.*............................................ 64,200 1,043,250
Spelling Entertainment Group Inc.*.......................... 144,800 1,022,650
----------
5,077,500
----------
BUSINESS SERVICES (11.0)%
BA Merchants Services Inc.*................................. 88,500 1,205,812
Caribiner International Inc.*............................... 45,000 382,500
CKS Group Inc. ............................................. 105,700 1,869,569
Data Processing Corp.*...................................... 39,100 1,143,675
Fiserv Inc.*................................................ 78,900 3,634,331
IMS Health Incorporated..................................... 30,000 1,858,125
Intelligroup Incorporated*.................................. 81,000 1,377,000
Legato Systems Inc.*........................................ 94,600 4,860,075
Modis Professional Services Incorporated*................... 77,000 1,121,313
National Data Corp.......................................... 66,500 2,053,187
Newpark Resources Inc.*..................................... 108,500 745,938
Paychex Inc................................................. 71,825 3,703,477
Quintiles Transnational Corp.*.............................. 12,500 546,875
Stewart Enterprises Inc..................................... 151,000 2,529,250
Sylvan Learning Systems Inc.*............................... 61,350 1,434,056
----------
28,465,183
----------
COMMUNICATION SERVICES (1.1%)
Adelphia Communications Corp.*.............................. 18,000 704,250
Comsat Corp................................................. 28,000 987,000
Nextel Communications Inc.*................................. 64,500 1,302,094
----------
2,993,344
----------
NEWSPAPERS (0.4%)
Media General Inc........................................... 28,700 1,112,125
----------
PUBLISHING (0.4%)
Applied Graphics Technologies*.............................. 43,000 537,500
Topps Co., Inc.............................................. 162,200 456,187
----------
993,687
----------
38,641,839
----------
</TABLE>
F-109
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
AGGRESSIVE EQUITY FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
MISCELLANEOUS (11.0%)
CONGLOMERATES (0.3%)
US Industries Inc.......................................... 45,350 $ 683,084
-----------
MISCELLANEOUS (10.3%)
Capstar Broadcasting Corporation*.......................... 56,600 873,763
Castle Dental Ctrs Incorporated*........................... 50,000 259,375
CDnow Incorporated......................................... 9,700 87,300
Chancellor Media Corporation*.............................. 104,700 3,494,362
Citadel Communications Corporation*........................ 22,100 451,669
Corn Products International Incorporated................... 71,400 1,802,850
Dollar Thrifty Automotive Grp*............................. 45,000 523,125
Dynegy Incorporated........................................ 101,000 1,357,187
Esg Re Ltd ADR**........................................... 14,600 220,825
Firearms Training Systems Inc.*............................ 51,300 35,269
Hagler Bailly Incorporated................................. 90,000 1,755,000
Harbor Florida Bancshares Incorporated..................... 95,000 979,688
ICG Communications Inc.*................................... 130,000 2,193,750
Indus International Inc.................................... 55,200 269,100
Metamor Worldwide Incorporated*............................ 77,500 2,131,250
Metro Information Services Inc.*........................... 40,000 1,275,000
Tag Heuer Intl. Sa ADR* **................................. 31,000 182,125
Tefron Limited*............................................ 80,500 633,938
Tier Technologies Incorporated*............................ 51,300 846,450
TMP Worldwide Inc.*........................................ 55,000 1,804,687
Total Control Prods Incorporated*.......................... 143,200 912,900
Transportation Components Incorporated*.................... 98,000 655,375
Viatel Incorporated*....................................... 148,000 1,572,500
Wesley Jessen Visioncare Inc.*............................. 30,000 637,500
Young & Rubicam Incorporated*.............................. 43,400 1,231,475
Ziff Davis Incorporated*................................... 80,000 580,000
-----------
26,766,463
-----------
REAL ESTATE (0.4%)
Irvine Apartment Communities Inc........................... 37,800 1,015,875
-----------
28,465,422
-----------
SHELTER (0.8%)
CONSTRUCTION MATERIALS (0.8%)
Martin Marietta Materials Inc.............................. 31,000 1,338,813
White Cap Industries....................................... 77,400 793,350
-----------
2,132,163
-----------
</TABLE>
F-110
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
AGGRESSIVE EQUITY FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
TECHNOLOGY (19.4%)
COMPUTERS & BUSINESS EQUIPMENT (2.5%)
BE Semiconductor Industries ADR* **........................ 28,000 $ 133,000
Ceridian Corp.*............................................ 66,900 3,838,387
Pixar*..................................................... 48,800 1,909,300
Saville System PLC ADR**................................... 41,500 601,750
Stormedia Inc.*............................................ 57,000 33,844
-----------
6,516,281
-----------
ELECTRONICS (7.8%)
ADC Telecommunications Inc.*............................... 89,000 1,880,125
Advanced Fibre Communications*............................. 50,000 343,750
American Superconductor Corp.*............................. 100,000 700,000
Analog Devices Inc.*....................................... 75,000 1,204,687
Aspect Telecommunications Corp.*........................... 58,000 1,392,000
Aspen Technology Inc.*..................................... 91,500 2,447,625
Boston Scientific Corp.*................................... 44,000 2,260,500
Credence Systems Corp.*.................................... 76,000 1,021,250
Cymer Inc.................................................. 88,100 803,913
Digital Microwave Corp.*................................... 80,000 245,000
Electroglas Inc.*.......................................... 69,800 606,388
Etec Systems Inc.*......................................... 72,000 1,876,500
Lam Research Corp.*........................................ 45,000 450,000
LoJack Corp.*.............................................. 110,000 1,182,500
Novellus Systems Inc.*..................................... 52,000 1,365,000
Sensormatic Electronics Corp............................... 70,000 411,250
Smartalk Teleservices Inc.*................................ 70,000 520,625
Xilinx Inc.*............................................... 37,500 1,312,500
-----------
20,023,613
-----------
SOFTWARE (9.1%)
BMC Software Inc........................................... 76,500 4,594,781
Cadence Design Systems Inc.*............................... 84,500 2,160,031
Check Point Software Tech Ltd ADR* **...................... 25,000 496,875
Dendrite International Inc.*............................... 185,100 4,419,262
HBO & Co................................................... 185,900 5,367,862
Midway Games Inc.*......................................... 82,000 958,375
Parametric Technology Corp.*............................... 55,000 553,438
PeopleSoft Inc.*........................................... 125,900 4,107,488
Platinum Software Corp.*................................... 60,000 615,000
Sapient Corp.*............................................. 9,000 279,000
-----------
23,552,112
-----------
50,092,006
-----------
</TABLE>
F-111
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
AGGRESSIVE EQUITY FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
TRANSPORTATION (2.2%)
RAILROADS & EQUIPMENT (0.3%)
Railtex Inc........................................... 62,000 $ 728,500
------------
TRUCKING & FREIGHT FORWARDING (1.9%)
Landstar Systems Inc.*................................ 64,100 1,806,819
M.S. Carriers Inc..................................... 25,700 510,787
Polaris Industries Inc................................ 42,000 1,302,000
US Freightways Corp................................... 73,000 1,450,875
------------
5,070,481
------------
5,798,981
------------
UTILITIES (0.8%)
GAS & PIPELINE UTILITIES (0.2%)
Eastern Enterprises................................... 16,000 674,000
------------
TELEPHONE (0.6%)
Cincinnati Bell Inc................................... 56,500 1,469,000
------------
2,143,000
------------
TOTAL COMMON STOCK (cost $240,045,039)................ 243,281,568
------------
CONVERTIBLE BONDS (.02%)
SOFTWARE (.02%)
Tecnomatix Technologies Ltd* 5.25% 2004 (cost
$703,207)............................................ 740,000 407,000
------------
<CAPTION>
PRINCIPAL
AMOUNT
----------
<S> <C> <C>
RIGHTS (0.1%)
GENERAL BUSINESS (0.1%)
BUSINESS SERVICES (0.1%)
Coast Federal Litigation Trust* (cost $0)............. 30,000 264,375
------------
SHARES BENEFICIAL INTR (0.2%)
MISCELLANEOUS (0.2%)
ROYALTY TRUST (0.2%)
San Juan Basin Royalty Trust (cost $639,056).......... 80,000 555,000
------------
TOTAL INVESTMENT SECURITIES (cost $241,387,302)....... 244,507,943
------------
<CAPTION>
UNITS
----------
<S> <C> <C>
SHORT TERM INVESTMENTS (COST $14,874,848) (5.7%)
State Street Bank Yield Enhanced Short Term Investment
Fund................................................. 14,874,848 14,874,848
------------
TOTAL INVESTMENTS (COST $256,262,150) (100.3%)........ 259,382,791
Liabilities less Other Assets (-0.3%)................. (803,416)
------------
NET ASSETS (100.0%)................................... $258,579,375
============
</TABLE>
- --------
*Non-income producing security.
**An American Depositary Receipt (ADR) is a certificate issued by a U.S. bank
representing the right to receive securities of the foreign issuer described.
F-112
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
BALANCED FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost $435,583,844)......................... $443,512,340
Receivable for investments sold................................... 46,266,475
Dividends and interest receivable................................. 1,787,151
------------
Total Assets.................................................... 491,565,966
------------
LIABILITIES
Payable for investments purchased................................. 117,292,211
Payable for fund units redeemed................................... 35,148
Investment advisory fee payable................................... 293,117
State Street Bank and Trust Company--program fee payable.......... 100,324
Trustee, management, and administration fees payable.............. 21,667
American Bar Retirement Association--program fee payable.......... 14,822
Other accruals.................................................... 435,741
------------
Liabilities..................................................... 118,193,030
------------
NET ASSETS (equivalent to $47.06 per unit based on 7,933,710 units
outstanding)..................................................... $373,372,936
============
</TABLE>
F-113
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
BALANCED FUND
STATEMENT OF OPERATIONS
FOR THE PERIOD JANUARY 1, 1998 TO SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME:
Dividends........................................................ $ 2,366,637
Interest......................................................... 7,682,872
-----------
Total investment income........................................ 10,049,509
-----------
EXPENSES
Investment advisory fee.......................................... 676,083
State Street Bank and Trust Company--program fee................. 937,531
American Bar Retirement Association--program fee................. 136,713
Trustee, management and administration fees...................... 200,331
Other expenses and taxes......................................... 135,559
Amortization of organization expenses............................ 53,224
-----------
Total expenses................................................. 2,139,441
-----------
Net investment income.............................................. 7,910,068
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain................................................ 21,570,347
Change in net unrealized appreciation............................ (8,052,052)
-----------
Net realized and unrealized gain on investments................ 13,518,295
-----------
Net increase in net assets resulting from operations............... $21,428,363
===========
</TABLE>
F-114
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
BALANCED FUND
STATEMENT OF CHANGES IN NET ASSETS
UNAUDITED
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 1, 1998
TO SEPTEMBER 30, 1998
---------------------
<S> <C>
FROM OPERATIONS
Net investment income.................................. $ 7,910,068
Net realized gain on investments....................... 21,570,347
Net change in unrealized appreciation on investments... (8,052,052)
------------
Net increase in net assets resulting from operations... 21,428,363
------------
FROM UNITHOLDER TRANSACTIONS
Proceeds from units issued............................. 26,380,090
Cost of units redeemed................................. (32,938,284)
------------
Net decrease in net assets resulting from unitholder
transactions.......................................... (6,558,194)
------------
Net increase in net assets........................... 14,870,169
NET ASSETS
Beginning of period.................................... 358,502,767
------------
End of period.......................................... $373,372,936
============
NUMBER OF UNITS
Outstanding--beginning of period....................... 8,070,199
Sold................................................. 544,015
Redeemed............................................. (680,504)
------------
Outstanding--end of period............................. 7,933,710
============
</TABLE>
F-115
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
BALANCED FUND
SELECTED PER-UNIT DATA AND RATIOS
UNAUDITED
<TABLE>
<S> <C>
For a unit outstanding throughout the period:*
<CAPTION>
FOR THE PERIOD
JANUARY 1, 1998
TO SEPTEMBER 30, 1998
---------------------
<S> <C>
Investment income......................................... $ 1.27
Expenses.................................................. (0.27)
--------
Net investment income..................................... 1.00
Net realized and unrealized gain on investments........... 1.64
--------
Net increase in unit value................................ 2.64
Net asset value at beginning of period.................... 44.42
--------
Net asset value at end of period.......................... $ 47.06
========
Ratio of expenses to average net assets**................. 0.73%
Ratio of net investment income to average net assets**.... 2.71%
Portfolio turnover***..................................... 144.31%
Total return***........................................... 5.94%
Average commissions rate***............................... $ 0.0484
Net assets at end of period (in thousands)................ $373,373
</TABLE>
- --------
*Calculations prepared using the monthly average number of units outstanding
during the period.
**Annualized
***Not annualized
F-116
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
BALANCED FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
COMMON STOCK (52.6%)
BASIC INDUSTRIES (3.2%)
ALUMINIUM (0.5%)
Aluminium Co. of America................................... 27,000 $ 1,917,000
-----------
CHEMICALS (1.8%)
Air Products & Chemicals Inc. ............................. 58,400 1,737,400
Praxair Inc. .............................................. 53,000 1,732,437
Zeneca Group Plc ADR**..................................... 74,000 2,590,000
-----------
6,059,837
-----------
PAPER (0.4%)
Fort James Corp. .......................................... 49,100 1,611,094
-----------
PLASTICS (0.6%)
Illinois Tool Works Inc. .................................. 43,000 2,343,500
-----------
11,931,431
-----------
CAPITAL GOODS (4.3%)
CONSTRUCTION & MINING EQUIPMENT (0.7%)
Dover Corp. ............................................... 79,200 2,445,300
-----------
ELECTRICAL EQUIPMENT (1.9%)
ASM Lithography Hldg N V ADR* **........................... 52,800 828,300
Exel Limited Hamilton...................................... 92,200 5,808,600
Phillips Electrs N V ADR**................................. 7,000 373,625
-----------
7,010,525
-----------
INDUSTRIAL MACHINERY (0.8%)
AES Corp. ................................................. 82,700 3,065,069
-----------
POLLUTION CONTROL (0.9%)
Browning Ferris Industries Inc. ........................... 25,400 768,350
Republic Industries Inc.*.................................. 144,200 2,099,912
Waste Management Incorporated Delaware..................... 11,500 552,719
-----------
3,420,981
-----------
15,941,875
-----------
CONSUMER BASICS (9.0%)
DRUGS & HEALTH CARE (5.7%)
Astra AB ADR**............................................. 83,000 1,426,562
Guidant Corp. ............................................. 48,500 3,601,125
Merck & Co., Inc. ......................................... 27,000 3,498,188
Pacificare Health Systems*................................. 6,183 435,902
Pacificare Health Systems*................................. 27,647 2,059,701
Pftzer Inc. ............................................... 77,000 8,157,187
United Healthcare Corp. ................................... 58,400 2,044,000
-----------
21,222,665
-----------
</TABLE>
F-117
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
BALANCED FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUES
------- -----------
<S> <C> <C>
FOOD & BEVERAGES (3.2%)
General Mills Inc. ........................................ 25,000 $ 1,750,000
Nabisco Holdings Corp. .................................... 45,000 1,617,187
Nestle S A ADR**........................................... 25,000 2,486,785
PepsiCo Inc. .............................................. 62,800 1,848,675
Tyson Foods Inc. .......................................... 110,000 2,186,250
-----------
9,888,897
-----------
TOBACCO (0.7%)
Philip Morris Cos., Inc.................................... 15,000 690,938
RJR Nabisco Holdings Corp.................................. 75,000 1,889,072
-----------
2,580,010
-----------
33,691,572
-----------
CONSUMER DURABLE GOODS (0.5%)
AUTO PARTS (0.0%)
Eaton Corp................................................. 3,600 225,675
-----------
TIRES & RUBBER (0.5%)
Cooper Tire & Rubber Co.................................... 99,000 1,782,000
-----------
2,007,675
-----------
CONSUMER NON-DURABLES (3.8%)
APPAREL & TEXTILES (1.1%)
Gucci Group N V ADR**...................................... 16,400 592,450
Nike Inc................................................... 54,500 2,006,281
VF Corp.................................................... 36,400 1,351,350
-----------
3,950,081
-----------
LIQUOR (0.6%)
Anheuser Busch Cos., Inc................................... 40,000 2,160,000
-----------
RETAIL TRADE (1.5%)
Lowes Cos., Inc............................................ 82,000 2,608,625
Venator Group Incorporated................................. 137,000 1,190,188
Wal Mart Stores Inc........................................ 35,500 1,939,187
-----------
5,738,000
-----------
TOYS & AMUSEMENTS (0.6%)
Hasbro Inc................................................. 77,800 2,295,100
-----------
14,143,181
-----------
CONSUMER SERVICES (0.9%)
AIR TRAVEL (0.4%)
UAL Corp.*................................................. 23,000 1,490,687
-----------
HOTELS & RESTAURANTS (0.2%)
Hilton Hotels Corp......................................... 37,400 638,138
-----------
LEISURE TIME (0.3%)
Walt Disney Co............................................. 45,000 1,139,063
-----------
3,267,888
-----------
</TABLE>
F-118
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
BALANCED FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------ -----------
<S> <C> <C>
ENERGY (4.1%)
DOMESTIC OIL (0.7%)
Atlantic Richfield Co....................................... 19,400 $ 1,376,187
Noble Affiliates Inc........................................ 35,100 1,118,813
-----------
2,495,000
-----------
GAS EXPLORATION (0.3%)
Oryx Energy Co.............................................. 80,000 1,035,000
-----------
INTERNATIONAL OIL (2.0%)
British Petroleum Co., PLC ADR**............................ 20,000 1,745,000
Chevron Corp................................................ 18,200 1,529,937
Exxon Corp.................................................. 26,000 1,824,875
Shell Transport & Trading Plc ADR**......................... 69,200 2,521,475
-----------
7,621,287
-----------
PETROLEUM SERVICES (1.1%)
Baker Hughes Inc............................................ 70,740 1,481,119
Total S A ADR**............................................. 40,700 2,556,469
-----------
4,037,588
-----------
15,188,875
-----------
FINANCE (5.8%)
BANKS (3.6%)
BankAmerica Corp. .......................................... 39,800 2,392,975
Bankamerica Corporation New................................. 4,300 230,353
Chase Manhattan Corp. ...................................... 23,000 994,750
Citicorp.................................................... 43,900 4,079,956
Mercantile BanCorporation Inc. ............................. 27,000 1,306,125
Wells Fargo & Co. .......................................... 12,200 4,331,000
-----------
13,335,159
-----------
FINANCIAL SERVICES (0.3%)
Associates First Capital Corp. ............................. 17,587 1,147,552
-----------
INSURANCE (1.3%)
Cincinnati Financial Corp. ................................. 50,100 1,540,575
General Reinsurance Corp. .................................. 15,600 3,166,800
-----------
4,707,375
-----------
SAVINGS AND LOAN (0.6%)
H.F. Ahmanson & Co. ........................................ 44,300 2,458,650
-----------
21,648,736
-----------
GENERAL BUSINESS (7.4%)
BROADCASTING (2.1%)
Mediaone Group Incorporated*................................ 60,900 2,706,244
Tele-Communications Inc.*................................... 27,993 1,095,226
Viacom Inc.*................................................ 34,100 1,977,800
Viacom Inc. Class A*........................................ 33,000 1,897,500
-----------
7,676,770
-----------
</TABLE>
F-119
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
BALANCED FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------- ----------
<S> <C> <C>
BUSINESS SERVICES (1.2%)
Interpublic Group of Cos., Inc. ............................ 28,300 $1,526,431
Nokia Corp ADR**............................................ 36,000 2,823,750
R.R. Donnelley & Sons Co. .................................. 7,000 246,313
----------
4,596,494
----------
COMMUNICATION SERVICES (1.9%)
Ascend Communications Inc.*................................. 44,000 2,002,000
MCI Worldcom Incorporated*.................................. 44,736 2,186,472
Tele Communications Inc.*................................... 82,825 3,038,642
----------
7,227,114
----------
OFFICE FURNISHINGS & SUPPLIES (0.4%)
Avery Dennison Corp. ....................................... 33,700 1,472,269
----------
NEWSPAPERS (0.1%)
News Corp. Ltd ADR**........................................ 21,300 476,588
----------
PUBLISHING (1.7%)
Jostens Inc. ............................................... 91,600 1,900,700
Time Warner Inc. ........................................... 50,000 4,378,125
----------
6,278,825
----------
27,728,060
----------
MISCELLANEOUS (3.1%)
CONGLOMERATES (0.6%)
Textron Inc. ............................................... 36,900 2,237,063
----------
MISCELLANEOUS (2.5%)
Keyspan Energy.............................................. 38,900 1,115,944
Lucasvarity Plc ADR**....................................... 76,400 2,387,500
SLM Holding Corp. .......................................... 179,800 5,832,262
----------
9,335,706
----------
11,572,769
----------
TECHNOLOGY (6.4%)
AEROSPACE (0.9%)
Boeing Co. ................................................. 35,900 1,231,819
United Technologies Corp. .................................. 28,500 2,178,469
----------
3,410,288
----------
COMPUTERS & BUSINESS EQUIPMENT (1.7%)
Cisco Systems Inc.*......................................... 37,800 2,336,512
Gateway 2000 Inc.*.......................................... 48,600 2,533,275
Xerox Corp.................................................. 16,000 1,356,000
----------
6,225,787
----------
</TABLE>
F-120
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
BALANCED FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
ELECTRONICS (3.8%)
Applied Materials Inc.*.................................... 196,600 $ 4,964,150
Boston Scientific Corp.*................................... 44,000 2,260,500
Ericsson L M Telefon Co ADR**.............................. 53,200 977,550
Intel Corp................................................. 24,000 2,058,000
KLA Instruments Corp.*..................................... 77,700 1,932,787
Loral Space & Communications Ltd.*......................... 54,800 808,300
Teradyne Inc.*............................................. 73,300 1,337,725
-----------
14,339,012
-----------
23,975,087
-----------
TRANSPORTATION (0.1%)
RAILROADS & EQUIPMENT (0.1%)
Wisconsin Central Transportation Corp.*.................... 33,100 463,400
-----------
UTILITIES (4.0%)
ELECTRIC UTILITIES (0.4%)
Northeast Utilities........................................ 81,700 1,368,475
-----------
GAS & PIPELINE UTILITIES (1.3%)
KN Energy Inc.............................................. 40,000 2,050,000
Williams Cos, Inc.......................................... 101,200 2,909,500
-----------
4,959,500
-----------
TELEPHONE (2.3%)
Airtouch Communications*................................... 39,300 2,240,100
Ameritech Corp............................................. 36,000 1,705,500
AT&T Corp.................................................. 19,352 1,130,883
Sprint Corp................................................ 49,000 3,528,000
-----------
8,604,483
-----------
14,932,458
-----------
TOTAL COMMON STOCK (cost $191,086,895) 196,493,007
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
--------- ---------
<S> <C> <C>
FIXED INCOME (49.9%)
CORPORATE BONDS (13.3%)
ASSET BACKED (4.4%)
Arcadia Automobile Receive Trust 6.38% 2003................. 600,000 610,078
Arcadia Automobile Recreation Trust 5.90% 2002.............. 675,000 680,214
Chevy Chase Auto Receivables 6.25% 2004..................... 578,115 584,129
Citibank Credit Card Master Trust I***** 5.60% 1998......... 1,150,000 1,148,195
Cps Auto Grantor Trust 6.65% 2002........................... 130,039 131,394
Daimler Benz Auto Grantor Trust 6.05% 2005.................. 341,463 342,849
First Security Auto Grantor Trust 6.10% 2003................ 565,291 569,557
First Merchants Auto Trust**** 6.85% 2002................... 144,086 145,039
First USA Credit Card Master Trust***** 5.67% 1998.......... 825,000 824,828
Ford Credit Auto Owner Trust 6.05% 2001..................... 1,025,000 1,028,844
</TABLE>
F-121
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
BALANCED FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
PRINCIPAL VALUE
--------- -----------
<S> <C> <C>
GMAC Grantor Trust 6.50% 2002............................ 846,368 $ 852,978
Honda Auto Receivables Grantor 5.85% 2003................ 577,001 580,065
Honda Auto Receivables Trust 5.95% 2003.................. 648,092 653,154
Long Beach Acceptance Auto Grantor**** 6.85% 2003........ 239,235 240,380
Long Beach Addep Auto Grntr Trust **** 6.69% 2004........ 292,576 294,081
Mmca Auto Owner Trust 6.08% 2001......................... 800,000 805,000
National Car Rental Financial Corporation **** 7.35%
2003.................................................... 250,000 263,918
Nissan Auto Receivables Grantor Trust 6.15% 2003......... 596,043 600,698
Npf Xi Incorporated **** 6.82% 2001...................... 100,000 101,965
Rental Car Finance Group 6.45% 2005...................... 725,000 747,107
Rural Housing Trust 1987 13.33% 2028..................... 163,794 159,787
Team Fleet Financing Corporation **** 6.65% 2002......... 250,000 255,433
Team Fleet Financing Corporation 7.35% 2003.............. 325,000 340,276
Team Fleet Financing Corporation **** 6.13% 2004......... 350,000 358,217
Wfs Financial Owner Trust 5.90% 2002..................... 700,000 704,183
Wfs Financial Owner Trust 6.10% 2002..................... 640,000 643,722
Wfs Financial Owner Trust 6.25% 2002..................... 650,000 655,133
World Financial Pptys Tower B 6.91% 2013................. 1,247,609 1,324,415
World Omni Automobile Lease 6.08% 2003................... 675,000 680,906
-----------
16,326,545
-----------
ELECTRIC UTILITIES (0.2%)
Edison Mission Energy Funding Corporation **** 7.33%
2008.................................................... 200,000 224,498
Empresa Nacional De Electric 7.33% 2037.................. 95,000 80,851
Israel Electric **** 7.75% 2007.......................... 350,000 343,291
Israel Electric Corporation Limited **** 7.25% 2006...... 160,000 163,355
Samsung Electrs Limited **** 7.45% 2006.................. 115,000 84,302
-----------
896,297
-----------
FINANCE & BANKING (3.0%)
Bankamerica Institutional Capital A **** 8.07% 2026...... 725,000 849,323
Beneficial Corporation Medium Term Note Bank Entry 6.47%
2008.................................................... 405,000 435,638
Beverly Finance 8.36% 2004............................... 250,000 284,615
Bt Institutional Capital Trust A **** 8.09% 2026......... 820,000 916,252
Creekwood Capital Corporation **** 8.47% 2015............ 238,146 276,381
Equitable Cos Incorporated 6.50% 2008.................... 440,000 463,478
Equitable Life Assurance Society (US) **** 6.95% 2005.... 250,000 269,438
Excel Paralubes Funding Corporation **** 7.43% 2015...... 250,000 286,793
Farmers Exchange Capital **** 7.05% 2028................. 220,000 222,235
Farmers Insurance Exch 8.63% 2024........................ 625,000 751,850
First Chicago NBD Institutional Capital **** 7.95% 2026.. 625,000 671,763
First Union Institute Capital I 8.04% 2026............... 650,000 705,568
Great Wesn Financial Trust II 8.21% 2027................. 140,000 152,032
Household Finance Corporation 6.38% 2010................. 415,000 429,073
Hutchison Whampos Fin C I Ltd **** 7.45% 2017............ 440,000 320,509
Metropolitan Life Insurance Company **** 7.45% 2023...... 500,000 526,975
Nationwide Mutual Life **** 7.50% 2024................... 750,000 789,652
New York Life Insurance Cor **** 7.50% 2023.............. 250,000 266,740
Petrozuata Fin Inc **** 8.22% 2017....................... 780,000 702,000
PNC Institutional Capital Trust A **** 7.95% 2026........ 350,000 389,788
</TABLE>
F-122
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
BALANCED FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
PRINCIPAL VALUE
--------- ----------
<S> <C> <C>
Prudential Insurance Company America **** 8.30% 2025...... 700,000 $ 831,719
Rhone Poulenc A3 8.62% 2021............................... 350,000 384,794
Washington Mutual Capital I 8.38% 2027.................... 240,000 265,550
----------
11,192,166
----------
INDUSTRIALS (2.0%)
Ast Research Incorporated**** 7.45% 2002.................. 475,000 355,801
Chrysler Corporation 7.45% 2027........................... 240,000 272,067
Ford Motor Company Delaware 6.50% 2018.................... 665,000 672,421
Ford Motor Company Delaware 6.63% 2028.................... 145,000 147,017
General Mtrs Corporation 6.75% 2028....................... 985,000 1,005,774
Jet Equipment Test**** 10.00% 2012........................ 350,000 476,224
Lafarge Corporation 6.38% 2005............................ 650,000 665,152
News America Holdings Incorporated 8.88% 2023 ............ 460,000 551,178
Oil Enterprises Limited**** 6.24% 2008.................... 667,598 676,452
Oil Purchase Company**** 7.10% 2002....................... 367,306 359,696
Paiton Energy**** 9.34% 2014.............................. 225,000 51,750
Philip Morris Cos Incorporated 6.38% 2006................. 250,000 257,465
Philip Morris Cos Incorporated 7.00% 2005................. 205,000 219,186
United Technologies Corporation 6.70% 2028................ 815,000 873,639
USA Waste Services Incorporated 7.00% 2028................ 820,000 836,613
----------
7,420,435
----------
MISCELLANEOUS (1.7%)
Alcoa Aluminio S A 7.50% 2008............................. 636,269 566,693
Anthem Insurance Cos Incorporated Discount Commercial****
9.00% 2027............................................... 370,000 431,579
Associates Corporation North America 6.00% 2005........... 1,080,000 1,113,609
Continental Airls Pass Through 6.65% 2017................. 745,000 791,056
Eop Operating Limited Partnership**** 6.76% 2007.......... 450,000 449,748
Florida Residential Property & Casualty**** 7.38% 2003.... 525,000 564,875
Florida Residential Property & Casualty**** 7.45% 2004.... 100,000 108,458
Florida Windstorm Underwriting**** 6.70% 2023............. 200,000 210,389
News America Holdings Incorporated 7.75% 2024............. 100,000 107,340
News America Holdings Incorporated 7.75% 2024............. 170,000 181,443
Petroliam Nasional Berhad**** 7.13% 2006.................. 575,000 355,039
Prime Property Funding Incorporated**** 7.00% 2004........ 495,000 513,195
Scotia Pacific Company**** 7.71% 2014..................... 830,000 836,632
----------
6,230,056
----------
OTHER (0.8%)
Becton Dickinson & Company 6.70% 2028..................... 670,000 708,584
Cox Communications Incorporated New 6.80% 2028............ 280,000 292,155
Equifex Incorporated 6.30% 2005........................... 580,000 604,122
Neiman Marcus Group Incorporated 6.65% 2008............... 595,000 617,242
Oxymar**** 7.50% 2016..................................... 175,000 187,283
Time Warner Incorporated 6.95% 2028....................... 85,000 88,343
Time Warner Incorporated 7.57% 2024....................... 375,000 416,052
----------
2,913,781
----------
</TABLE>
F-123
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
BALANCED FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
PRINCIPAL VALUE
--------- ----------
<S> <C> <C>
OTHER UTILITIES (0.3%)
Ras Laffan Liquefied Natural Gas**** 8.29% 2014............ 800,000 $ 666,819
Williams Cos Incorporated 6.20% 2002....................... 485,000 494,292
----------
1,161,111
----------
TELEPHONE (0.9%)
Comeast Cable Communications 8.38% 2007 ................... 390,000 458,262
GTE Corporation 6.94% 2028................................. 965,000 1,028,043
MCI Communications Corporation 6.50% 2010 ................. 305,000 317,243
MCI Communications Corporation 6.95% 2005 ................. 475,000 512,971
TCI Communications Incorporated 7.88% 2026 ................ 585,000 689,826
Worldcom Incorporated Georgia 6.95% 2028................... 350,000 368,746
----------
3,375,091
----------
TRANSPORTATION (0.3%)
Atlas Air Incorporated 7.38% 2018.......................... 525,000 575,698
Burlington Northern Santa Fe Cor 6.70% 2028................ 515,000 525,774
----------
1,101,472
----------
OTHER (0.1%)
Fifty Seventh Street Assocs LLC**** 7.13% 2017............. 246,712 258,073
----------
TOTAL CORPORATE BONDS 50,875,027
----------
FOREIGN (0.5%)
CORPORATE (0.4%)
Empresa Nacional De 7.75% 2008............................. 660,000 583,867
Express Pipeline Limited**** 6.47% 2013.................... 725,000 715,759
Hyundai Semiconductor Amer Inc**** 8.63% 2007.............. 370,000 259,798
----------
1,559,424
----------
GOVERNMENT (0.1%)
Columbia Rep 8.70% 2016.................................... 440,000 344,920
----------
TOTAL FOREIGN BONDS 1,904,344
----------
MORTAGE RELATED 3.5%
FEDERAL AGENCIES (11.4%)
Federal Hm Loan Pc 549869 11.00% 2020...................... 93,441 105,822
Federal Hm Loan Pc 554522 10.50% 2020...................... 247,804 276,710
Federal Hm Loan Pc 558283 10.00% 2017...................... 292,161 318,077
Federal Hm Loan Pc 555293 10.00% 2020...................... 271,473 295,352
Federal Hm Loan Pc D06744 10.50% 2019...................... 83,574 90,880
Federal Hm Loan Pc D06659 10.50% 2016...................... 113,718 124,506
Federal Hm Loan Pc G00035 10.50% 2021...................... 124,100 136,247
Federal Home Loan Mortage Pc Guaranteed 9.50% 2020......... 110,488 123,608
Federal Home Loan Mortage Pc Guaranteed 10.00% 2020........ 271,138 297,998
</TABLE>
F-124
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
BALANCED FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
PRINCIPAL VALUE
----------- -----------
<S> <C> <C>
Federal Home Loan Mortage Pc Guaranteed 10.00% 2020..... 178,797 $ 198,128
Federal National Mortage Association Remic 8.50% 2020... 198,922 214,772
FHLMC Gold Tba 30*** 6.00% 2099......................... 11,500,000 11,500,000
FHLMC Gold Tba 30*** 7.50% 2099......................... 6,025,000 6,208,263
FHLMC Gold Tba Nov 30*** 6.00% 2099..................... 11,900,000 11,899,381
FHLMC Gold Tba Nov 30 Mississippi*** 6.50% 2099......... 7,075,000 7,197,709
FHLMC Gold Tba Oct 30*** 6.00% 2099..................... 4,350,000 4,349,774
-----------
43,337,227
-----------
GOVERNMENT SPONSORED (8.2%)
FNMA Pool 303157 10.00% 05/01/22........................ 149,304 162,570
FNMA Pool 313544 10.00% 05/01/22........................ 1,209,761 1,320,684
FNMA Pool 426874 10.00% 11/01/25........................ 1,280,536 1,397,948
FNMA Pool 323073 10.50% 02/01/28........................ 469,346 522,664
FNMA Pool 303645 11.00% 09/01/19........................ 658,021 735,299
FNMA Pool 303554 11.50% 09/01/25........................ 107,513 121,472
FNMA TBA Nov 30 *** 6.00% 2099.......................... 8,200,000 8,161,132
FNMA TBA Nov 30 *** 6.50% 2099.......................... 13,400,000 13,618,447
FNMA TBA Oct 30 *** 6.00% 2099.......................... 4,625,000 4,603,077
-----------
30,643,293
-----------
COLLATERALIZED MORTGAGE OBLIGATIONS (0.3%)
DLJ Mortgage Acceptance Corporation 7.20% 2003.......... 258,107 263,490
DLJ Mortgage Acceptance Corporation 7.40% 2003.......... 409,795 428,332
Mid Str Trust 9.63% 2003................................ 475,000 516,049
-----------
1,207,871
-----------
OTHER MARKETABLE (0.2%)
Federal Express Corporation Pass Through 6.85% 2019..... 485,000 520,787
Federal Express Corporation Pass Through 7.02% 2016..... 180,000 191,191
Prime Property Fund **** 6.63% 2003..................... 172,643 175,600
-----------
887,578
-----------
GNMA I (3.5%)
GNMA Pool 218130 9.50% 09/15/17......................... 1,145,813 1,254,491
GNMA Pool 780783 9.50% 12/15/17......................... 850,405 931,411
GNMA Pool 780203 9.50% 12/15/17......................... 775,279 837,294
GNMA Pool 780311 9.50% 12/15/21......................... 592,462 639,853
GNMA Pool 174472 10.00% 11/15/16........................ 116,927 126,989
GNMA Pool 180521 10.00% 12/15/16........................ 64,832 70,110
GNMA Pool 223520 10.00% 03/15/18........................ 102,984 112,032
GNMA Pool 231157 10.00% 06/15/18........................ 120,090 130,639
GNMA Pool 780554 10.00% 05/15/19........................ 2,298,916 2,502,577
GNMA Pool 269159 10.00% 06/15/19........................ 24,569 26,761
GNMA Pool 277908 10.00% 10/15/19........................ 20,346 22,162
GNMA Pool 780804 10.00% 12/15/20........................ 1,218,495 1,325,539
GNMA Pool 780488 10.00% 10/15/21........................ 100,727 109,716
GNMA Pool 780818 10.00% 06/15/28........................ 1,129,003 1,228,186
GNMA Pool 780835 10.00% 07/15/22........................ 688,588 759,529
GNMA Pool 780081 10.00% 02/15/25........................ 701,327 762,938
GNMA Pool 139478 10.50% 09/15/15........................ 13,269 14,546
</TABLE>
F-125
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
BALANCED FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
---------- -----------
<S> <C> <C>
GNMA Pool 232061 10.50% 09/15/17........................ 152,469 $ 167,449
GNMA Pool 780496 10.50% 12/15/17........................ 262,480 288,269
GNMA Pool 274800 10.50% 05/15/19........................ 1,338 1,472
GNMA Pool 285191 10.50% 03/15/20........................ 24,941 27,369
GNMA Pool 287170 10.50% 08/15/20........................ 74,796 82,304
GNMA Pool 033635 11.00% 12/15/09........................ 2,002 2,207
GNMA Pool 034701 11.00% 01/15/10........................ 12,849 14,208
GNMA Pool 038109 11.00% 02/15/10........................ 639 705
GNMA Pool 040492 11.00% 07/15/10........................ 12,504 13,827
GNMA Pool 041749 11.00% 07/15/10........................ 33,179 36,687
GNMA Pool 041987 11.00% 08/15/10........................ 3,240 3,582
GNMA Pool 042354 11.00% 08/15/10........................ 12,115 13,396
GNMA Pool 058816 11.00% 01/15/13........................ 1,686 1,878
GNMA Pool 134123 11.00% 09/15/15........................ 13,831 15,455
GNMA Pool 141387 11.00% 10/15/15........................ 10,696 11,951
GNMA Pool 780595 11.00% 08/15/17........................ 866,059 964,764
GNMA Pool 780056 11.00% 09/15/17........................ 250,113 279,076
GNMA Pool 780103 11.00% 02/15/25........................ 268,430 299,941
-----------
13,079,313
-----------
GNMA II (1.6%)
GNMA II Pool 008611 6.88% 03/20/25...................... 821,244 837,283
GNMA II Pool 008663 7.00% 07/20/25...................... 816,484 831,540
GNMA II Pool 008664 7.00% 03/20/25...................... 2,005,162 2,043,079
GNMA II Pool 008722 6.88% 10/20/25...................... 614,388 625,042
GNMA II Pool 008621 7.38% 04/20/25...................... 636,408 649,735
GNMA II Pool 008631 7.38% 05/20/25...................... 762,482 778,448
GNMA II Pool 008634 7.38% 05/20/25...................... 208,210 212,732
-----------
5,977,859
-----------
TOTAL MORTGAGE RELATED 95,133,141
-----------
US TREASURY (10.3%)
DIRECT (10.3%)
United States Treasury Notes ***** 3.63% 2002........... 2,037,280 2,045,551
United States Treasury Notes ***** 3.63% 2008........... 2,928,449 2,937,586
United States Treasury Bonds 8.75% 2020................. 1,915,000 2,796,207
United States Treasury Notes ***** 3.38% 2007........... 8,803,850 8,671,792
United States Treasury Notes ****** 6.38% 2001.......... 11,000,000 11,513,920
United States Treasury Notes ****** 7.50% 2005.......... 8,825,000 10,322,514
-----------
TOTAL U.S. TREASURY 38,287,570
-----------
TOTAL FIXED INCOME (cost $183,660,067) 186,200,082
-----------
</TABLE>
F-126
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
BALANCED FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
PREFERRED STOCK (0.4%)
Entertainment Property Incorporated ****.............. 200 $ 187,057
Home OwnershipSeries****.............................. 1,250 1,252,814
Tier One Pptys Incorporated ****...................... 125 121,805
------------
TOTAL PREFERRED STOCK (cost $1,579,307)............... 1,561,676
------------
TOTAL CORPORATE BONDS................................. 35,213,758
------------
TOTAL INVESTMENT SECURITIES (cost $378,326,268)....... 384,254,765
------------
<CAPTION>
UNITS
----------
<S> <C> <C>
SHORT TERM INVESTMENTS (COST $59,257,575) (15.9%)
State Street Bank Yield Enhanced Short Term Investment
Fund******........................................... 59,257,575 59,257,575
------------
TOTAL SHORT TERM INVESTMENTS ........................ 59,257,575
------------
TOTAL INVESTMENTS (COST $435,593,344) (118.80%)....... 443,512,340
Liabilities less Other Assets (-18.8%)................ (70,139,404)
------------
NET ASSETS (100.00%).................................. $373,372,936
============
</TABLE>
- --------
* Non-income producing a security.
** An American Depositary Receipt (ADR) is a certificate issued by a U.S.
bank representing the right to receive securities of the foreign issuer
described.
*** To be announced (TBA) securities are purchased (sold) on a forward
commitment basis with an approximate principal amount and no definite
maturity date. The actual principal amount and maturity date will be
determined upon settlement.
**** Security is restricted in accordance with Rule 144A under the Securities
Act of 1933, which allows for the resale of such securities only to
certain qualified buyers. The total cost and market value of Rule 144A
securities owned at September 30, 1998 were 19,123,892 and 19,008,893,
respectively.
*****Variable rate security. The rate shown reflects rate currently in effect.
******Portion of security is segregated as collateral for TBA purchases.
F-127
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
GROWTH EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost $850,263,255)....................... $1,038,704,191
Cash............................................................ 1,270
Receivable for investments sold................................. 5,272,147
Dividends and interest receivable............................... 1,233,191
--------------
Total Assets................................................ 1,045,210,799
--------------
LIABILITIES
Payable for investments purchased............................... 7,885,547
Payable for fund units redeemed................................. 735,791
Investment advisory fee payable................................. 430,647
State Street Bank and Trust Company--program fee payable........ 277,786
Trustee, management, and administration fees payable............ 59,532
American Bar Retirement Association--program fee payable........ 42,252
Other accruals.................................................. 76,873
--------------
Total Liabilities........................................... 9,508,428
--------------
NET ASSETS (equivalent to $392.53 per unit based on 2,638,562
units outstanding)............................................. $1,035,702,371
==============
</TABLE>
F-128
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
GROWTH EQUITY FUND
STATEMENT OF OPERATIONS
FOR THE PERIOD JANUARY 1, 1998 TO SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends........................................................ $ 7,628,565
Interest......................................................... 865,686
-----------
Total investment income........................................ 8,494,251
-----------
EXPENSES
Investment advisory fee.......................................... 1,856,137
State Street Bank and Trust Company--program fee................. 2,625,843
American Bar Retirement Association--program fee................. 382,901
Trustee, management and administration fees...................... 561,147
Other expenses and taxes......................................... 280,221
Amortization of organization expenses............................ 142,764
-----------
Total expenses................................................. 5,849,013
-----------
Net investment income.............................................. 2,645,238
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain................................................ 82,896,246
Change in net unrealized appreciation............................ 2,294,810
-----------
Net realized and unrealized gain on investments................ 85,191,056
-----------
Net increase in net assets resulting from operations............... $87,836,294
===========
</TABLE>
F-129
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
GROWTH EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
UNAUDITED
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 1, 1998
TO SEPTEMBER 30, 1998
---------------------
<S> <C>
FROM OPERATIONS
Net investment income.................................. $ 2,645,238
Net realized gain on investments....................... 82,896,246
Net change in unrealized appreciation on investments... 2,294,810
--------------
Net increase in net assets resulting from operations... 87,836,294
--------------
FROM UNITHOLDER TRANSACTIONS
Proceeds from units issued............................. 50,401,325
Cost of units redeemed................................. (70,389,233)
--------------
Net decrease in net assets resulting from unitholder
transactions.......................................... (19,987,908)
--------------
Net increase in net assets........................... 67,848,386
NET ASSETS
Beginning of period.................................... 967,853,985
--------------
End of period.......................................... $1,035,702,371
==============
NUMBER OF UNITS
Outstanding--beginning of period....................... 2,689,796
Sold................................................. 123,082
Redeemed............................................. (174,316)
--------------
Outstanding--end of period............................. 2,638,562
==============
</TABLE>
F-130
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
GROWTH EQUITY FUND
SELECTED PER-UNIT DATA AND RATIOS
UNAUDITED
For a unit outstanding throughout the period:*
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 1, 1998
TO SEPTEMBER 30, 1998
---------------------
<S> <C>
Investment income......................................... $ 3.22
Expenses.................................................. (2.22)
----------
Net investment income..................................... 1.00
Net realized and unrealized gain on investments........... 31.71
----------
Net increase in unit value................................ 32.71
Net asset value at beginning of period.................... 359.82
----------
Net asset value at end of period.......................... $ 392.53
==========
Ratio of expenses to average net assets**................. 0.72%
Ratio of net investment income to average net assets**.... 0.32%
Portfolio turnover***..................................... 33.79%
Total return***........................................... 9.09%
Average commissions rate***............................... $ 0.0424
Net assets at end of period (in thousands)................ $1,035,072
</TABLE>
- --------
*Calculations prepared using the monthly average number of units outstanding
during the period.
**Annualized
***Not annualized
F-131
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
COMMON STOCK (97.3%)
BASIC INDUSTRIES (3.6%)
ALUMINUM (0.2%)
Aluminum Co. of America.................................... 36,600 $ 2,598,600
-----------
CHEMICALS (2.9%)
Air Products & Chemicals Inc............................... 78,600 2,338,350
B.F. Goodrich Co........................................... 1,500 49,031
Crompton & Knowles Corp.................................... 4,200 61,162
Cytec Industries Inc.*..................................... 2,200 39,325
E.I. Du Pont de Nemours & Co............................... 59,400 3,333,825
Hercules Inc............................................... 2,300 69,144
Monsanto Co................................................ 323,700 18,248,587
Praxair Inc................................................ 60,900 1,990,669
Valspar Corp............................................... 2,100 62,869
Waters Corp.*.............................................. 2,200 147,400
Witco Corp................................................. 500 10,500
Zeneca Group Plc ADR**..................................... 93,500 3,272,500
-----------
29,623,362
-----------
CONTAINERS & GLASS (0.1%)
Bemis Co., Inc............................................. 700 24,544
Crown Cork & Seal Co., Inc................................. 300 8,025
Owens Illinois Inc.*....................................... 1,800 45,000
-----------
77,569
-----------
GOLD (0.1%)
Freeport-McMoran Copper & Gold Inc......................... 10,300 122,312
Global Industries Ltd.*.................................... 4,700 54,344
------- -----------
176,656
------- -----------
PAPER (0.4%)
Fort James Corp............................................ 74,012 2,428,519
Kimberly-Clark Corp........................................ 27,400 1,109,700
Minnesota Mining & Manufacturing Co........................ 11,300 832,669
-----------
4,370,888
-----------
STEEL (0.1%)
Nucor Corp................................................. 400 16,250
-----------
36,863,325
-----------
</TABLE>
F-132
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
CAPITAL GOODS (6.4%)
AGRICULTURAL MACHINERY (0.0%)
Delta & Pine Land Co....................................... 2,600 $ 114,400
-----------
CONSTRUCTION & MINING EQUIPMENT (0.3%)
Dover Corp................................................. 99,700 3,078,238
-----------
ELECTRICAL EQUIPMENT (6.1%)
American Power Conversion Corp.*........................... 4,500 169,594
Arrow Electronics Inc.*.................................... 400 5,250
ASM Lithography Hldg N V ADR**............................. 59,200 928,700
Atmel Corp.*............................................... 2,400 21,750
AVX Corp................................................... 300 4,463
Dentaply International Inc................................. 2,400 53,700
Emerson Electric Co........................................ 2,300 143,175
Exel Limited Hamilton...................................... 110,800 6,980,400
General Electric Co........................................ 502,100 39,948,331
Millipore Corp............................................. 2,800 53,375
Philips Electrs N V ADR**.................................. 4,500 240,187
Raychem Corp............................................... 3,500 85,312
Sanmina Corp.*............................................. 1,900 53,437
UCAR International Inc.*................................... 2,500 45,000
-----------
48,732,674
-----------
INDUSTRIAL MACHINERY (0.5%)
AES Corp................................................... 112,600 4,173,237
American Standard Cos., Inc.*.............................. 4,000 105,500
Crane Co................................................... 1,650 38,775
Illinois Tool Works Inc.................................... 88,400 4,817,800
Pall Corp.................................................. 1,000 22,188
Thermo Electron Corp.*..................................... 4,100 61,756
US Filter Corp.*........................................... 3,900 62,400
-----------
9,281,656
-----------
MISCELLANEOUS (0.0%)
Varian Associates Inc...................................... 1,300 45,825
-----------
POLLUTION CONTROL (0.5%)
Allied Waste Industries Inc.*.............................. 5,200 121,550
Browning Ferris Industries Inc. ........................... 32,100 971,025
Republic Industries Inc.*.................................. 182,900 2,663,481
Waste Management Incorporated Delaware..................... 35,452 1,703,912
-----------
5,459,968
-----------
66,712,761
-----------
</TABLE>
F-133
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SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
CONSUMER BASICS (31.6%)
DRUGS & HEALTH CARE (20.5%)
Abbott Laboratories........................................ 78,900 $ 3,427,219
Alza Corp.*................................................ 157,300 6,822,887
American Home Products Corp................................ 162,400 8,505,700
Amgen Inc.*................................................ 166,000 12,543,375
Arterial Vascular Engineering Inc.*........................ 1,800 66,600
Astra AB ADR**............................................. 102,666 1,764,572
Bausch & Lomb Inc. ........................................ 30,000 1,181,250
Baxter International Inc................................... 13,400 797,300
Becton Dickinson & Co...................................... 13,900 571,637
Bergen Brunswig Corp. ..................................... 1,400 70,788
Biogen Inc.*............................................... 3,800 250,087
Biomet Inc. ............................................... 5,800 201,187
Bristol-Myers Squibb Co.................................... 118,600 12,319,575
Cardinal Health Inc. ...................................... 54,080 5,583,760
Centocor Inc.*............................................. 3,200 126,800
Chiron Corp.*.............................................. 6,600 131,175
Eli Lilly & Co............................................. 272,000 21,301,000
Forest Laboratories Inc.*.................................. 4,000 137,500
Genzyme Corp.*............................................. 2,100 75,863
Guidant Corp............................................... 58,600 4,351,050
Health Management Associates Inc.*......................... 12,175 222,194
Healthsouth Rehabilitation*................................ 18,700 197,519
Immunex Corp.*............................................. 1,300 71,988
Johnson & Johnson.......................................... 193,700 15,157,025
Lincars Holdings Inc.*..................................... 3,100 120,125
McKesson Corp.............................................. 4,000 366,500
Medtronic Inc.............................................. 119,800 6,933,425
Merck & Co., Inc........................................... 167,600 21,714,675
Mylan Laboratories Inc. ................................... 6,800 200,600
Omnicare Inc............................................... 4,000 141,000
Pacificare Health Systems*................................. 2,000 141,000
Pacificare Health Systems*................................. 34,400 2,562,800
Pfizer Inc................................................. 393,300 41,665,219
Pharmacia & Upjohn Inc..................................... 31,500 1,580,906
Quorum Health Group Inc.*.................................. 4,850 78,813
Rexall Sundown Inc.*....................................... 2,700 41,681
Safeskin Corp.*............................................ 2,800 88,375
Sangstat Medical Corp...................................... 50,000 1,062,500
Schering-Plough Corp. ..................................... 89,400 9,258,487
Smithkline Beecham PLC ADR**............................... 51,000 2,792,250
Sofamor/Danek Group Inc.*.................................. 46,000 4,094,000
</TABLE>
F-134
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SCHEDULE OF INVESTMENTS
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SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
St. Jude Medical Inc. ..................................... 2,602 $ 60,171
Steris Corp.*.............................................. 4,800 135,600
Stryker Corp............................................... 3,900 132,600
Sybron International Corp. ................................ 5,500 105,188
Tenet Healthcare Corp...................................... 8,300 238,625
Total Renal Care Holdings Inc. ............................ 3,200 76,800
Trigon Healthcare Inc. .................................... 1,100 34,100
United Healthcare Corp. ................................... 91,300 3,195,500
Universal Health Services Inc. ............................ 1,500 62,625
US Surgical Corp. ......................................... 300 12,506
Warner Lambert Co.......................................... 251,700 19,003,350
Watson Pharmaceuticals Inc................................. 4,600 233,450
Wellpoint Health Networks Inc. ............................ 1,300 72,881
-----------
212,083,803
-----------
FOOD & BEVERAGES (5.2%)
Bestfoods.................................................. 11,700 566,719
Campbell Soup Co. ......................................... 39,900 2,002,481
Coca Cola Co............................................... 348,200 20,065,025
Coca Cola Enterprises Inc.................................. 151,800 3,832,950
ConAgra Inc................................................ 18,000 484,875
Dekalb Genetics Corp. ..................................... 1,700 156,327
Dole Food Inc. ............................................ 700 25,288
Flowers Industries Inc. ................................... 5,600 122,150
General Mills Inc.......................................... 29,600 2,072,000
H.J. Heinz Co. ............................................ 8,600 439,675
Hershey Foods Corp. ....................................... 3,600 246,375
Interstate Bakeries Corp. ................................. 1,100 34,100
Kellogg Co. ............................................... 6,400 210,800
McCormick & Co., Inc. ..................................... 1,900 55,219
Nabisco Holdings Corp...................................... 55,000 1,976,562
Nestle S A ADR**........................................... 20,000 1,989,436
Outback Steakhouse Inc.*................................... 3,400 89,675
PepsiCo Inc................................................ 308,500 9,081,469
Pioneer Hi-Bred International Inc.......................... 13,620 357,525
Quaker Oats Co............................................. 5,400 318,600
Ralston Purina Co.......................................... 13,200 386,100
Sara Lee Corp.............................................. 25,700 1,387,800
Suiza Foods Corp.*......................................... 2,200 68,750
Sysco Corp................................................. 19,000 447,687
Tyson Foods Inc............................................ 223,600 4,444,050
Unilever NV ADR**.......................................... 48,000 2,940,000
United States Foodservice.................................. 700 29,137
Whitman Corp............................................... 1,600 25,500
William Wrigley Jr. Co..................................... 4,100 311,344
-----------
54,167,619
-----------
</TABLE>
F-135
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SCHEDULE OF INVESTMENTS
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SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------- ------------
<S> <C> <C>
HOUSEHOLD PRODUCTS (3.4%)
Black & Decker Corp....................................... 700 $ 29,138
Clorox Co................................................. 3,900 321,750
Colgate Palmolive Co...................................... 100,100 6,856,850
Corning Inc............................................... 13,100 385,631
Dial Corp................................................. 4,900 101,062
Gillette Co............................................... 208,500 7,975,125
Hillenbrand Industries Inc................................ 2,200 107,800
Procter & Gamble Co....................................... 258,900 18,365,719
Rubbermaid Inc............................................ 31,300 749,244
Stanley Works............................................. 1,700 50,575
Tupperware Corp........................................... 2,300 27,025
------------
34,969,919
------------
RETAIL GROCERY (0.3%)
Albertson's Inc. ......................................... 1,800 97,425
General Nutrition Cos., Inc.*............................. 4,700 50,819
Kroger Co.*............................................... 10,400 520,000
Safeway Inc.*............................................. 46,800 2,170,350
Starbucks Corp.*.......................................... 4,900 177,319
Whole Foods Market Inc.*.................................. 1,900 80,037
------------
3,095,950
------------
TOBACCO (2.2%)
Philip Morris Cos., Inc................................... 426,800 19,659,475
RJR Nabisco Holdings Corp................................. 134,500 3,387,719
UST Inc. ................................................. 4,500 133,031
------------
23,180,225
------------
327,497,516
------------
CONSUMER DURABLE GOODS (0.4%)
AUTOMOBILES (0.0%)
Harley Davidson Inc....................................... 8,500 249,688
Lear Corp.*............................................... 1,200 52,500
------------
302,188
------------
AUTO PARTS (0.1%)
Danaher Corp.............................................. 3,700 111,000
Eaton Corp................................................ 4,000 250,750
Federal Home Loan Mortgage Corp........................... 2,600 121,550
------------
483,300
------------
</TABLE>
F-136
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SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------- ----------
<S> <C> <C>
HOUSEHOLD APPLIANCES & HOME FURNISHINGS (0.1%)
Best Buy Co., Inc.*......................................... 2,700 $ 112,050
Ethan Allen Interiors Inc. ................................. 1,900 68,875
Furniture Brands International Inc.*........................ 3,500 68,250
Leggett & Platt Inc. ....................................... 7,200 149,400
Maytag Corp. ............................................... 3,100 148,025
Newell Co. ................................................. 7,000 322,437
Sunbeam Inc. ............................................... 2,700 18,900
Westpoint Stevens Inc.*..................................... 2,400 73,200
----------
961,137
----------
TIRES & RUBBER (0.2%)
Cooper Tire & Rubber Co. ................................... 122,000 2,196,000
----------
3,942,625
----------
CONSUMER NON-DURABLES (7.5%)
APPAREL & TEXTILES (0.8%)
Cintas Corp. ............................................... 3,200 160,400
Fruit of the Loom Inc.*..................................... 3,300 49,706
Gucci Group N V ADR**....................................... 19,300 697,213
Intimate Brands Inc. ....................................... 1,300 24,619
Jones Apparel Group Inc.*................................... 5,000 114,687
Jostens Inc. ............................................... 92,158 1,912,278
Liz Claiborne Inc. ......................................... 37,500 982,031
Nike Inc. .................................................. 64,200 2,363,362
Unifi Inc. ................................................. 3,000 46,313
VF Corp. ................................................... 42,400 1,574,100
Warnaco Group Inc. ......................................... 1,700 39,313
----------
7,964,022
----------
COSMETICS & TOILETRIES (0.5%)
Avon Products Inc. ......................................... 119,400 3,350,663
Estee Lauder Cos., Inc. .................................... 2,500 128,125
International Flavors & Fragrances.......................... 1,600 52,800
Revlon Inc.*................................................ 37,700 1,199,331
----------
4,730,919
----------
LIQUOR (0.2%)
Anheuser Busch Cos., Inc. .................................. 48,400 2,613,600
----------
PHOTOGRAPHY (0.0%)
Eastman Kodak Co. .......................................... 900 69,581
----------
</TABLE>
F-137
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SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
RETAIL TRADE (5.6%)
Abercrombie & Fitch Co. ................................... 43,400 $ 1,909,600
Amazon.Com Inc.*........................................... 1,700 189,763
Autozone Inc.*............................................. 7,700 189,613
Barnes & Noble Inc.*....................................... 2,200 59,400
Bed Bath & Beyond Inc.*.................................... 5,400 126,225
Borders Group Inc.*........................................ 3,600 80,100
Circuit City Stores Inc. .................................. 25,200 839,475
CompUSA Inc.*.............................................. 12,700 219,869
Consolidated Stores Corp.*................................. 5,650 110,881
Costco Cos., Inc. ......................................... 68,700 3,254,662
CVS Corp. ................................................. 124,700 5,463,419
Dayton Hudson Corp. ....................................... 74,700 2,670,525
Dollar General Corp. ...................................... 8,953 238,360
Dollar Tree Stores Inc.*................................... 3,150 98,634
Family Dollar Stores Inc. ................................. 7,800 122,850
Gap Inc. .................................................. 16,450 867,737
Home Depot Inc. ........................................... 195,800 7,734,100
Kohls Corp.*............................................... 7,400 288,600
Limited Inc................................................ 4,000 87,750
Lowes Cos., Inc............................................ 224,100 7,129,181
May Department Stores Co. ................................. 34,800 1,792,200
Nordstrom Inc.............................................. 51,200 1,267,200
Office Depot Inc.*......................................... 70,900 1,590,819
Pep Boys-Manny, Moe & Jack................................. 88,600 1,185,025
Pier 1 Imports Inc......................................... 7,500 56,250
Rite Aid Corp. ............................................ 48,500 1,721,750
Ross Stores Inc............................................ 3,400 97,325
Saks Incorporated*......................................... 4,568 102,495
Sears Roebuck & Co......................................... 34,200 1,511,212
Staples Inc.*.............................................. 14,300 420,063
Tiffany & Co. ............................................. 1,300 40,788
TJX Cos., Inc.............................................. 17,500 311,719
Venator Group Incorporated................................. 118,800 1,032,075
Wal Mart Stores Inc. ...................................... 258,400 14,115,100
Walgreen Co. .............................................. 27,400 1,207,312
-----------
58,132,077
-----------
TOYS & AMUSEMENTS (0.4%)
Hasbro Inc. ............................................... 94,700 2,793,650
Mattel Inc. ............................................... 35,000 980,000
-----------
3,773,650
-----------
77,283,849
-----------
</TABLE>
F-138
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
CONSUMER SERVICES (1.9%)
AIR TRAVEL (0.3%)
Comair Holdings Inc. ...................................... 4,050 $ 116,438
Sealed Air Corporation New*................................ 35,558 1,133,411
UAL Corp.*................................................. 29,000 1,879,562
USAir Group Inc............................................ 600 30,375
-----------
3,159,786
-----------
HOTELS & RESTAURANTS (0.7%)
CKE Restaurants Inc. ...................................... 2,200 65,450
Cracker Barrel Old Country Stores.......................... 2,300 52,325
Hilton Hotels Corp......................................... 49,000 836,063
Host Marriott Corp......................................... 112,300 1,424,806
Marriott International Incorporated New.................... 13,400 319,925
McDonald's Corp. .......................................... 82,500 4,924,219
Promus Hotel Corporation New*.............................. 4,127 113,750
Sodexho Marriott Services Incorporated*.................... 1,425 42,750
Tricon Global Restaurants Inc.*............................ 1,880 73,320
Wendy's International Inc.................................. 700 15,531
-----------
7,868,139
-----------
LEISURE TIME (0.9%)
Callaway Golf Co. ......................................... 1,400 15,138
Carnival Cruise Lines Inc. ................................ 88,100 2,802,681
Circus Circus Enterprises Inc.*............................ 500 4,719
-----------
2,822,538
-----------
International Game Technology.............................. 5,900 109,519
Mirage Resorts Inc.*....................................... 4,300 72,025
Walt Disney Co............................................. 232,337 5,881,030
-----------
6,062,574
-----------
19,913,037
-----------
ENERGY (2.2%)
DOMESTIC OIL (0.3%)
Atlantic Richfield Co. .................................... 21,600 1,532,250
Noble Affiliates Inc. ..................................... 40,200 1,281,375
Pennzoil Co. .............................................. 1,100 38,569
-----------
2,852,194
-----------
GAS EXPLORATION (0.1%)
Anadarko Petroleum Corp. .................................. 6,000 235,875
BJ Services Co............................................. 2,000 32,500
Enron Corp. ............................................... 1,000 52,812
Oryx Energy Co. ........................................... 85,600 1,107,450
-----------
1,428,637
-----------
</TABLE>
F-139
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AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------ -----------
<S> <C> <C>
INTERNATIONAL OIL (0.9%)
British Petroleum Co., PLC ADR**............................ 24,000 $ 2,094,000
Chevron Corp. .............................................. 23,500 1,975,469
Exxon Corp. ................................................ 31,000 2,175,812
Shell Transport & Trading Plc ADR**......................... 88,000 3,206,500
-----------
9,451,781
-----------
PETROLEUM SERVICES (0.9%)
Baker Hughes Inc............................................ 84,100 1,760,844
Diamond Offshore Drilling Inc. ............................. 3,900 101,400
Ensco International Inc..................................... 6,100 65,956
Global Marine Inc.*......................................... 7,800 86,287
Halliburton Co. ............................................ 23,200 662,650
Nabors Industries Inc. ..................................... 5,400 82,013
Noble Drilling Corp.*....................................... 5,800 85,550
Rowan Cos., Inc.*........................................... 3,400 38,038
Schlumberger Ltd. ADR**..................................... 44,250 2,226,328
Smith International Inc. ................................... 2,700 74,081
Total S A ADR**............................................. 58,000 3,517,500
Transocean Offshore Inc. ................................... 3,500 121,406
-----------
8,822,053
-----------
22,554,665
-----------
FINANCE (7.6%)
BANKS (3.1%)
Bank of New York Co., Inc................................... 59,600 1,631,550
Bank One Corporation........................................ 31,600 1,346,950
BankAmerica Corp............................................ 69,600 4,184,700
Chase Manhattan Corp. ...................................... 94,200 4,074,150
Citicorp.................................................... 52,800 4,907,100
Fifth Third Bancorp. ....................................... 10,600 609,500
First Union Corp. .......................................... 24,600 1,259,213
MBNA Corp. ................................................. 24,000 687,000
Mellon Bank Corp. .......................................... 3,300 181,706
Mercantile BanCorporation Inc. ............................. 40,000 1,935,000
National Commerce Bancorp................................... 2,600 42,900
North Fork BanCorporation Inc. ............................. 3,700 74,000
Northern Trust Corp. ....................................... 3,800 259,350
Norwest Corp.*.............................................. 97,200 3,480,975
Oewen Financial Corp. ...................................... 1,400 12,250
Providian Financial Corp. .................................. 4,400 373,175
Star Banc Corp. ............................................ 5,100 337,238
Synovus Financial Corp. .................................... 8,000 158,000
Wells Fargo & Co............................................ 17,700 6,283,500
Zions Bancorp............................................... 4,900 199,981
-----------
32,038,238
-----------
</TABLE>
F-140
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
FINANCIAL SERVICES (2.0%)
American Express Co. ...................................... 21,300 $ 1,653,412
Amresco Inc................................................ 99,500 746,250
Associates First Capital Corp.............................. 41,698 2,720,794
Capital One Financial Corp. ............................... 3,700 382,950
Citigroup Inc. ............................................ 17,750 665,625
Concord EFS Inc.*.......................................... 6,200 160,038
Countrywide Credit Industries Inc. ........................ 600 24,975
Federal Home Loan Mortgage Corp. .......................... 154,900 7,657,869
Federal National Mortgage Association...................... 30,000 1,927,500
Household International Inc. .............................. 133,000 4,987,500
-----------
20,926,913
-----------
INSURANCE (1.9%)
Aetna Inc. ................................................ 800 55,600
Aflac Inc. ................................................ 2,900 82,831
American Bankers Insurance Group Inc. ..................... 1,000 42,500
American International Group Inc. ......................... 142,049 10,937,804
Cincinnati Financial Corp. ................................ 88,887 2,733,275
Conseco Inc. .............................................. 6,657 203,455
Equifax Inc. .............................................. 8,400 299,775
Everest Reinsurance Holdings............................... 400 14,925
Foundation Health Systems Inc.*............................ 3,100 29,062
General Reinsurance Corp. ................................. 19,200 3,897,600
Medpartners Inc.*.......................................... 9,900 32,175
MGIC Investment Corp. ..................................... 6,800 250,750
Progressive Corp. ......................................... 2,200 248,050
Provident Cos., Inc. ...................................... 600 20,250
Sunamerica Inc. ........................................... 6,700 408,700
UNUM Corp. ................................................ 1,700 84,469
-----------
19,341,221
-----------
INVESTMENT COMPANIES (0.1%)
Charles Schwab Corp. ...................................... 11,400 448,875
Franklin Resources Inc. ................................... 9,200 276,000
T. Rowe Price Associates Inc. ............................. 6,600 193,875
-----------
918,750
-----------
SAVINGS AND LOAN (0.5%)
H.F. Ahmanson & Co. ....................................... 61,200 3,396,600
Sovereign Bancorp Inc. .................................... 2,500 33,281
Washington Mutual Inc. .................................... 60,050 2,026,688
-----------
5,456,569
-----------
78,681,691
-----------
</TABLE>
F-141
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
GENERAL BUSINESS (7.6%)
BROADCASTING (1.0%)
A.H. Belo Corp. ........................................... 800 $ 16,000
Cablevision Systems Corp.*................................. 600 25,912
CBS Corp. ................................................. 19,100 463,175
Clear Channel Communications*.............................. 9,700 460,750
Comcast Corp. ............................................. 14,300 671,206
Hettel Broadcasting Corp.*................................. 2,800 105,700
Jacor Communications Inc.*................................. 1,200 60,750
Mediaone Group Incorporated*............................... 74,100 3,292,819
Sinclair Broadcast Group Inc.*............................. 1,400 22,750
Tele-Communications Inc.*.................................. 31,174 1,219,683
Viacom Inc.*............................................... 32,800 1,902,400
Viacom Inc. Class A*....................................... 37,000 2,127,500
-----------
10,368,645
-----------
BUSINESS SERVICES (4.1%)
America Online Inc.*....................................... 99,900 11,113,875
Apollo Group Inc.*......................................... 3,000 83,625
At Home Corp............................................... 2,800 134,050
Automatic Data Processing Inc.............................. 94,100 7,033,975
Corrections Corp.*......................................... 5,000 67,813
Ecolab Inc................................................. 5,100 145,031
First Data Corp............................................ 61,500 1,445,250
Fiserv Inc.*............................................... 4,400 202,675
Gartner Group Inc.*........................................ 2,800 58,450
H&R Block Inc.............................................. 5,200 215,150
Humana Inc................................................. 5,300 86,788
Ims Health Incorporated.................................... 5,900 365,431
Interpublic Group of Cos., Inc............................. 34,250 1,847,359
Lamar Advertising Co....................................... 2,200 61,600
Manpower Inc............................................... 4,600 94,012
Modis Professional Services Incorporated*.................. 5,800 84,463
Nokia Corp. ADR**.......................................... 152,000 11,922,500
Omnicom Group Inc.......................................... 9,300 418,500
Outdoor Systems Inc.*...................................... 3,500 68,250
Paychex Inc................................................ 57,850 2,982,891
Quintiles Transnational Corp.*............................. 51,000 2,231,250
Robert Half International Inc.*............................ 5,750 248,328
Sabre Group Holdings Inc.*................................. 1,700 51,000
Service Corp. International................................ 12,100 385,687
Snyder Communications Inc.*................................ 3,000 100,500
Stewart Enterprises Inc.................................... 2,900 48,575
Sungard Data Systems Inc.*................................. 5,600 176,400
Viad Corp.................................................. 3,700 99,206
Yahoo Inc.*................................................ 3,900 505,050
-----------
42,277,684
-----------
</TABLE>
F-142
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
COMMUNICATION SERVICES (1.1%)
Ascend Communications Inc.*................................ 65,430 $ 2,977,065
Broadcom Corporation*...................................... 500 35,500
Cox Communications Inc.*................................... 2,100 114,712
Level 3 Communications Incorporated*....................... 2,200 70,263
Nextel Communications Inc.*................................ 123,000 2,483,062
Northern Telecom Ltd. ADR**................................ 19,300 617,600
Paging Network Inc.*....................................... 8,000 48,250
Tele Communications Inc.*.................................. 140,400 5,150,925
Univision Communications Inc.*............................. 2,200 65,450
-----------
11,562,827
-----------
NEWSPAPERS (0.1%)
Dow Jones & Co., Inc....................................... 200 9,300
Gannett Co., Inc........................................... 6,400 342,800
New York Times Co.......................................... 800 22,000
News Corp. Ltd. ADR**...................................... 23,700 530,287
Tribune Co................................................. 3,400 171,063
-----------
1,075,450
-----------
<CAPTION>
OFFICE FURNISHINGS & SUPPLIES (0.3%)
<S> <C> <C>
Avery Dennison Corp........................................ 64,000 2,796,000
Herman Miller Inc.......................................... 6,200 122,450
Hon Industries Inc......................................... 2,700 63,788
Ikon Office Solutions Inc.................................. 2,200 15,813
Office Max Inc............................................. 3,600 35,325
Reynolds & Reynolds Co..................................... 4,600 81,937
-----------
3,115,313
-----------
PUBLISHING (1.0%)
Dun & Bradstreet Corporation Delaware...................... 2,600 70,200
McGraw-Hill Inc............................................ 900 71,325
Meredith Corp.............................................. 2,200 70,400
Reader's Digest Association Inc............................ 1,400 26,775
Time Warner Inc............................................ 108,400 9,491,775
Time Mirror Co............................................. 3,900 207,188
-----------
9,937,663
-----------
78,337,582
-----------
MISCELLANEOUS (4.1%)
CONGLOMERATES (1.7%)
Cendant Corporation*....................................... 46,821 544,294
Grace W R & Company Delaware New........................... 65,500 814,656
Harcourt General Inc....................................... 1,000 48,375
Textron Inc................................................ 49,100 2,976,688
Tyco International Ltd..................................... 234,200 12,939,550
-----------
17,323,563
-----------
</TABLE>
F-143
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
MISCELLANEOUS (2.4%)
Beckman Coulter Incorporated 800 $ 41,300
Bjs. Wholesale Club Incorporated........................... 1,200 44,100
Blyth Industries Inc....................................... 1,800 49,388
Boston Properties Inc...................................... 2,200 62,700
Capstar Broadcasting Corporation*.......................... 2,000 30,875
Chancellor Media Corporation*.............................. 6,800 226,950
Commscope Incorporated*.................................... 1 12
Edwards J D & Company*..................................... 1,800 86,400
FDX Corporation*........................................... 500 22,563
First Health Group Corporation*............................ 46,800 1,134,900
Galileo International Inc.................................. 3,200 120,800
General Instrument Corporation Delaware*................... 3,500 75,687
General Mtrs Corporation................................... 82,000 3,018,625
Global Telesystems Group Incorporated*..................... 3,400 114,750
Hartford Life Inc.......................................... 1,100 46,475
HCR Manor Care Incorporated*............................... 3,100 90,869
Hearst Argyle Television Incorporated...................... 2,500 83,437
Keyspan Energy............................................. 48,900 1,402,819
Leap Wireless International Incorporated*.................. 675 3,164
LHS Group Inc.*............................................ 1,100 53,419
Lucasvarity Pic ADR**...................................... 120,300 3,759,375
Meritor Automotive Incorporated............................ 2,600 39,163
Meyer Fred Incorporated Delaware New*...................... 29,200 1,135,150
National Oilwell Inc.*..................................... 1,200 14,850
Nationwide Financial Services Inc.......................... 300 13,631
Nextlink Communications Incorporated*...................... 3,700 86,487
Ocean Energy Incorporated*................................. 3,500 45,938
Panamsat Corporation New*.................................. 2,200 90,337
Polo Ralph Lauren Corporation*............................. 2,300 45,856
Primedia Incorporated*..................................... 5,100 55,462
Qwest Communications International Inc.*................... 2,530 79,221
R & B Falcon Corporation*.................................. 7,900 94,800
Reltec Corporation*........................................ 3,600 53,100
Service Master Company..................................... 16,000 350,000
SLM Holding Corp........................................... 224,900 7,295,194
Solutia Incorporated....................................... 41,700 940,856
Starwood Financial Trust Maryland.......................... 2,800 156,800
Tele Communications Inc.*.................................. 11,000 197,312
United States Office Prods Company*........................ 600 4,875
US Bancorp................................................. 105,400 3,748,287
Weatherford International Incorporated New*................ 3,955 85,527
Young & Rubicam Incorporated*.............................. 1,600 45,400
-----------
25,046,854
-----------
42,370,417
-----------
</TABLE>
F-144
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
SHELTER (0.1%)
CONSTRUCTION MATERIALS (0.1%)
Fastenal Co................................................ 2,100 $ 52,500
Masco Corp................................................. 11,600 285,650
Southdown Inc.............................................. 1,000 45,000
USG Corp................................................... 1,100 47,575
-----------
430,725
-----------
HOMEBUILDERS (0.0%)
Catellus Development Corp.*................................ 3,500 45,500
Rouse Co................................................... 700 18,856
-----------
64,356
-----------
495,081
-----------
TECHNOLOGY (20.1%)
AEROSPACE (0.8%)
Allied Signal Inc.......................................... 36,000 1,273,500
Boeing Co.................................................. 89,050 3,055,528
Computer Sciences Corp..................................... 8,700 474,150
Gulfstream Aerospace Corp.*................................ 4,900 197,225
Orbital Sciences Corp.*.................................... 2,100 58,931
Sundstrand Corp............................................ 3,700 171,588
United Technologies Corp................................... 40,100 3,065,144
-----------
8,296,066
-----------
COMPUTERS & BUSINESS EQUIPMENT (7.6%)
3COM Corp.*................................................ 72,700 2,185,544
Cabletron Systems Inc.*.................................... 2,400 27,000
Ceridian Corp.*............................................ 3,600 206,550
Cisco Systems Inc.*........................................ 402,450 24,876,441
Citrix Systems Inc.*....................................... 2,400 170,400
Compaq Computer Corp....................................... 350,000 11,068,750
Dell Computer Corp.*....................................... 278,800 18,331,100
Diebold Inc................................................ 2,200 48,400
EMC Corp.*................................................. 108,000 6,176,250
Fore Systems*.............................................. 4,400 73,150
Gateway 2000 Inc.*......................................... 64,700 3,372,487
Hewlett Packard Co......................................... 28,200 1,492,837
IBM Corp................................................... 17,400 2,227,200
Ingram Micro Inc.*......................................... 2,500 133,906
Netscape Communications Corp............................... 3,241 70,897
Pitney Bowes Inc........................................... 13,800 725,362
Pixar*..................................................... 1,000 39,125
Quantum Corp.*............................................. 5,000 79,375
Seagate Technology*........................................ 5,000 125,313
Sterling Commerce Inc.*.................................... 5,200 180,050
Storage Technology Corp.*.................................. 4,800 122,100
Sun Microsystems Inc.*..................................... 20,800 1,036,100
Symbol Technologies Inc.................................... 2,800 143,675
Tandy Corp................................................. 5,200 278,200
Tech Data Corp............................................. 1,800 90,113
Western Digital Corp.*..................................... 3,500 37,625
Xerox Corp................................................. 65,300 5,534,175
-----------
78,852,125
-----------
</TABLE>
F-145
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
ELECTRONICS (6.9%)
Adaptec Inc.*.............................................. 2,900 $ 27,550
ADC Telecommunications Inc.*............................... 7,400 156,325
Advanced Fibre Communications*............................. 3,300 22,688
Advanced Micro Devices Inc.*............................... 1,100 20,419
Altera Corp.*.............................................. 4,900 172,112
Analog Devices Inc.*....................................... 8,000 128,500
Andrew Corp.*.............................................. 4,500 59,625
Applied Materials Inc.*.................................... 226,300 5,714,075
Avnet Inc.................................................. 100 3,681
Boston Scientific Corp.*................................... 85,700 4,402,837
Cambridge Technology Partners Inc.*........................ 2,600 58,013
Ciena Corp.*............................................... 5,600 80,150
Comverse Technology Inc.*.................................. 2,000 81,750
Electronic Data Systems Corp............................... 2,500 82,969
Ericsson L.M Telefon Co ADR**.............................. 70,200 1,289,925
Honeywell Inc.............................................. 2,000 128,125
Intel Corp................................................. 353,100 30,278,325
KLA Instruments Corp.*..................................... 99,400 2,472,575
Lexmark International Group Inc.*.......................... 3,800 263,387
Linear Technology Corp..................................... 4,200 210,000
Loral Space & Communications Ltd.*......................... 82,100 1,210,975
LSI Logic Corp............................................. 3,100 39,138
Lucent Technologies Inc.................................... 237,200 16,381,625
Maxim Integrated Products Inc.*............................ 6,600 183,975
Micron Technology Inc...................................... 2,400 73,050
Molex Inc.................................................. 1,000 29,000
Motorola Inc............................................... 56,100 2,394,769
National Semiconductor Corp.*.............................. 1,600 15,500
Perkin-Elmer Corp.......................................... 2,900 199,194
Qualcomm Inc.*............................................. 2,700 129,431
SCI Systems Inc.*.......................................... 2,700 72,731
Scientific Atlanta Inc..................................... 2,900 61,263
Tellabs Inc.*.............................................. 9,000 358,312
Teradyne Inc.*............................................. 92,000 1,679,000
Texas Instruments Inc...................................... 55,100 2,906,525
Uniphase Corp.*............................................ 2,200 90,200
Vitesse Semiconductor Corp.*............................... 3,300 77,962
Xilinx Inc.*............................................... 3,700 129,500
-----------
71,685,181
-----------
SOFTWARE (4.8%)
Adobe Systems Inc.......................................... 1,400 48,563
Autodesk Inc. ............................................. 2,500 65,625
BMC Software Inc.*......................................... 50,000 3,003,125
Cadence Design Systems Inc.*............................... 11,800 301,638
Ciber Inc.*................................................ 2,500 50,469
Computer Associates International Inc. .................... 67,600 2,501,200
Compuware Corp.*........................................... 8,900 523,987
Electronic Arts*........................................... 3,300 144,788
HBO & Co................................................... 76,500 2,208,937
I2 Technologies Inc.*...................................... 100 1,419
Intuit*.................................................... 2,100 97,781
</TABLE>
F-146
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------- ------------
<S> <C> <C>
Keane Inc.*............................................... 3,600 $ 126,450
Learning Co. Inc.* ....................................... 2,400 47,550
Microsoft Corp.*.......................................... 326,200 35,902,387
Networks Assocs Inc.*..................................... 5,850 207,675
Novell Inc.*.............................................. 3,200 39,200
Oracle Corp.*............................................. 41,450 1,207,231
Parametric Technology Corp.*.............................. 14,900 149,931
PeopleSoft Inc.*.......................................... 52,100 1,699,762
PLATINUM Technology Inc.*................................. 4,200 75,600
Shared Medical Systems Corp. ............................. 1,900 101,056
Siebel Systems Inc. ...................................... 3,700 106,144
Solectron Corp.*.......................................... 5,900 283,200
Sterling Software Inc.*................................... 700 19,294
Synopsys Inc.*............................................ 3,400 113,263
Veritas Software Co.*..................................... 3,100 171,275
------------
49,197,550
------------
208,030,922
------------
TRANSPORTATION (0.1%)
RAILROADS & EQUIPMENT (0.1%)
Kansas City Southern Industries Inc....................... 6,500 227,500
Wisconsin Central Transportation Corp.*................... 33,100 463,400
------------
690,900
------------
TRUCKING & FREIGHT FORWARDING (0.0%)
Hertz Corporation......................................... 900 37,238
Pittston Brink's Group.................................... 1,200 42,000
Tidewater Inc............................................. 2,500 51,875
------------
131,113
------------
822,013
------------
UTILITIES (4.2%)
ELECTRIC UTILITIES (0.2%)
Calenergy Inc.*........................................... 200 5,300
Northeast Utilities....................................... 114,300 1,914,525
------------
1,919,825
------------
GAS & PIPELINE UTILITIES (0.6%)
Cooper Cameron Corp.*..................................... 2,500 70,313
Sonat Inc................................................. 400 11,950
KN Energy Inc............................................. 48,000 2,460,000
Williams Cos., Inc........................................ 114,400 3,289,000
------------
5,831,263
------------
TELEPHONE (3.4%)
Airtouch Communications*.................................. 111,800 6,372,600
Alltel Corp............................................... 3,900 184,763
AT&T Corp................................................. 33,491 1,957,130
Bell Atlantic Corp........................................ 4,400 213,125
Cincinnati Bell Inc. ..................................... 7,600 197,600
Frontier Corp............................................. 7,500 205,312
GTE Corp.................................................. 9,100 500,500
Intermedia Commerce of Florida ........................... 2,700 66,319
</TABLE>
F-147
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
GROWTH EQUITY FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
---------- ---------------
<S> <C> <C>
MCI Worldcom Incorporated.......................... 370,121 18,089,664
SBC Communications Inc............................. 67,400 2,995,087
Sprint Corp........................................ 70,900 5,104,800
Telephone & Data Systems Inc....................... 1,500 52,313
---------------
35,939,213
---------------
43,690,301
---------------
TOTAL COMMON STOCK (cost $781,793,553)............. 1,007,195,785
---------------
PREFERRED STOCK (0.1%)
CONSUMER SERVICES (0.1%)
AIR TRAVEL (0.1%)
Sealed Air Corporation New Preferred Convertible
Series A 2.00
(cost $1,830,562).................................. 36,765 1,328,136
---------------
REAL ESTATE INVESTMENT TRUST (0.0%)
MISCELLANEOUS (0.0%)
REAL ESTATE (0.0%)
Meditrust (cost $202,928).......................... 7,327 125,017
---------------
TOTAL INVESTMENT SECURITIES (cost $820,208,001).... 1,008,648,938
---------------
<CAPTION>
UNITS
----------
<S> <C> <C>
SHORT TERM INVESTMENTS (COST $30,055,253) (2.9%)
State Street Bank Yield Enhanced Short Term
Investment Fund................................... 30,055,253 30,055,253
---------------
TOTAL ............................................. 30,055,253
---------------
TOTAL INVESTMENTS (COST $850,263,255) (100.3%) .... 1,038,704,191
Liabilities less Other Assets (-0.3%).............. (3,001,820)
---------------
NET ASSETS (100.00%) $ 1,035,702,371
===============
</TABLE>
- --------
*Non-income producing security.
** An American Depositary Receipt (ADR) is a certificate issued by a U.S. bank
representing the right to receive securities of the foreign issuer
described.
F-148
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
INDEX EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<S> <C>
ASSETS
Investments:
State Street Global Advisors Flagship S&P 500 Index Fund, at
value (cost $152,709,363 and units 838,052).................... $141,429,658
State Street Global Advisors Russell Special Small Company
Common Trust at value (cost $34,916,007 and units 2,246,193)... 36,010,965
Cash.............................................................. 361,980
------------
Total Assets.................................................... 177,802,603
------------
LIABILITIES
Payable for investments purchased................................. 361,980
Payable for fund units redeemed................................... 1,017,676
State Street Bank and Trust Company--program fee payable.......... 47,572
Trustee, management and administration fees payable............... 21,760
American Bar Retirement Association--program fee payable.......... 6,910
Other accruals.................................................... 8,219
------------
Total Liabilities............................................... 1,464,117
------------
NET ASSETS (equivalent to $22.37 per unit based on 7,882,973 units
outstanding)..................................................... $176,338,486
============
</TABLE>
F-149
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
INDEX EQUITY FUND
STATEMENT OF OPERATIONS
FOR THE PERIOD JANUARY 1, 1998 TO SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends....................................................... $ 334,419
------------
Total investment income....................................... 334,419
------------
EXPENSES
State Street Bank and Trust Company--program fee................ 440,275
American Bar Retirement Association--program fee................ 64,201
Trustee, management and administration fees..................... 204,367
Other expenses and taxes........................................ 48,997
Amortization of organization expenses........................... 21,923
------------
Total expenses................................................ 779,763
------------
Net investment loss............................................... (445,344)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain............................................... 51,584,124
Change in net unrealized appreciation........................... (50,203,051)
------------
Net realized and unrealized gain on investments............... 1,381,073
------------
Net increase in net assets resulting from operations.............. $ 935,729
============
</TABLE>
F-150
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
INDEX EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
UNAUDITED
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 1, 1998
TO SEPTEMBER 30, 1998
---------------------
<S> <C>
FROM OPERATIONS
Net investment loss.................................... $ (445,344)
Net realized gain on investments....................... 51,584,124
Net change in unrealized appreciation on investments... (50,203,051)
------------
Net increase in net assets resulting from operations... 935,729
------------
FROM UNITHOLDER TRANSACTIONS
Proceeds from units issued............................. 33,738,085
Cost of units redeemed................................. (12,044,471)
------------
Net increase in net assets resulting from unitholder
transactions.......................................... 21,693,614
------------
Net increase in net assets........................... 22,629,343
NET ASSETS
Beginning of period.................................... 153,709,143
------------
End of period.......................................... $176,338,486
============
NUMBER OF UNITS
Outstanding--beginning of period....................... 6,971,219
Sold................................................. 1,426,513
Redeemed............................................. (514,759)
------------
Outstanding--end of period............................. 7,882,973
============
</TABLE>
F-151
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
INDEX EQUITY FUND
SELECTED PER-UNIT DATA AND RATIOS
UNAUDITED
<TABLE>
<S> <C>
For a unit outstanding throughout the period:*
<CAPTION>
FOR THE PERIOD
JANUARY 1, 1998
TO SEPTEMBER 30, 1998
---------------------
<S> <C>
Investment income......................................... $ 0.04
Expenses.................................................. (0.10)
--------
Net investment loss....................................... (0.06)
Net realized and unrealized gain on investments........... 0.38
--------
Net increase in unit value................................ 0.32
Net asset value at beginning of period.................... 22.05
--------
Net asset value at end of period.......................... $22.37
========
Ratio of expenses to average net assets**................. 0.57 %
Ratio of net investment loss to average net assets**...... (0.33)%
Portfolio turnover*** ****................................ 89.52 %
Total return****.......................................... 1.45 %
Net assets at end of period (in thousands)................ $176,338
</TABLE>
- --------
*Calculations prepared using the monthly average number of units outstanding
during the period.
**Annualized
*** Reflects purchases and sales of shares of the collective investment funds
in which the fund invests, rather than turnover of the underlying
portfolio of such collective investment funds.
****Not annualized
F-152
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
INTERMEDIATE BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<S> <C>
ASSETS
Investments:
PIMCO Total Return Fund, at value
(cost $74,491,646 and shares 7,035,221)........................ $ 78,020,605
Masterworks Bond Index Fund, at value
(cost $36,431,995 and shares 3,772,817)........................ 38,294,094
Receivable for fund units sold.................................... 375,745
Dividends and interest receivable................................. 579,677
------------
Total Assets.................................................... 117,270,121
------------
LIABILITIES
Payable for investments purchased................................. 955,313
State Street Bank and Trust Company--program fee payable.......... 30,972
Trustee, management and administration fees payable............... 9,433
American Bar Retirement Association--program fee payable.......... 4,513
Other accruals.................................................... 7,318
------------
Total Liabilities............................................... 1,007,549
------------
NET ASSETS (equivalent to $12.98 per unit based on 8,959,398 units
outstanding)..................................................... $116,262,572
============
</TABLE>
F-153
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
INTERMEDIATE BOND FUND
STATEMENT OF OPERATIONS
FOR THE PERIOD JANUARY 1, 1998 TO SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends.......................................................... $4,688,938
Interest........................................................... 92
----------
Total investment income.......................................... 4,689,030
----------
EXPENSES
State Street Bank and Trust Company--program fee................... 245,299
American Bar Retirement Association--program fee................... 35,770
Trustee, management and administration fees........................ 76,303
Other expenses and taxes........................................... 29,627
Amortization of organization expenses.............................. 10,300
----------
Total expenses................................................... 397,299
----------
Net investment income................................................ 4,291,731
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain.................................................. 303,072
Change in net unrealized appreciation.............................. 4,509,439
----------
Net realized and unrealized gain on investments.................. 4,812,511
----------
Net increase in net assets resulting from operations................. $9,104,242
==========
</TABLE>
F-154
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
INTERMEDIATE BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
UNAUDITED
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 1, 1998
TO SEPTEMBER 30, 1998
---------------------
<S> <C>
FROM OPERATIONS
Net investment income.................................. $ 4,291,731
Net realized gain on investments....................... 303,072
Net change in unrealized appreciation on investments... 4,509,439
------------
Net increase in net assets resulting from operations... 9,104,242
------------
FROM UNITHOLDER TRANSACTIONS
Proceeds from units issued............................. 34,251,315
Cost of units redeemed................................. (9,827,468)
------------
Net increase in net assets resulting from unitholder
transactions.......................................... 24,423,847
------------
Net increase in net assets........................... 33,528,089
NET ASSETS
Beginning of period.................................... 82,734,483
------------
End of period.......................................... $116,262,572
============
NUMBER OF UNITS
Outstanding--beginning of period....................... 6,945,554
Sold................................................. 2,807,265
Redeemed............................................. (793,421)
------------
Outstanding--end of period............................. 8,959,398
============
</TABLE>
F-155
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
INTERMEDIATE BOND FUND
SELECTED PER-UNIT DATA AND RATIOS
UNAUDITED
<TABLE>
<S> <C>
For a unit outstanding throughout the period:*
<CAPTION>
FOR THE PERIOD
JANUARY 1, 1998
TO SEPTEMBER 30, 1998
---------------------
<S> <C>
Investment income......................................... $ 0.52
Expenses.................................................. (0.04)
--------
Net investment income..................................... 0.48
Net realized and unrealized gain on investments........... 0.59
--------
Net increase in unit value................................ 1.07
Net asset value at beginning of period.................... 11.91
--------
Net asset value at end of period.......................... $12.98
========
Ratio of expenses to average net assets**................. 0.52%
Ratio of net investment income to average net assets**.... 5.61%
Portfolio turnover*** **** ............................... 14.07%
Total return****.......................................... 8.98%
Net assets at end of period (in thousands)................ $116,263
</TABLE>
- --------
*Calculations prepared using the monthly average number of units outstanding
during the period.
**Annualized
*** Reflects purchases and sales of shares of the registered investment
companies in which the fund invests, rather than turnover of the
underlying portfolio of such registered investment companies.
****Not annualized
F-156
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
INTERNATIONAL EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<S> <C>
ASSETS
Investments:
T. Rowe Price International Stock Fund, at value
(cost $66,314,202 and shares 4,551,169)......................... $59,938,891
Receivable for fund units sold..................................... 1,431,951
Other Assets....................................................... 33,482
-----------
Total Assets..................................................... 61,404,324
-----------
LIABILITIES
Payable for investments purchased.................................. 1,431,950
State Street Bank and Trust Company--program fee payable........... 16,362
Trustee, management and administration fees payable................ 3,539
American Bar Retirement Association--program fee payable........... 2,552
Other accruals..................................................... 4,410
-----------
Total Liabilities................................................ 1,458,813
-----------
NET ASSETS (equivalent to $17.82 per unit based on 3,363,250 units
outstanding)...................................................... $59,945,511
===========
</TABLE>
F-157
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
INTERNATIONAL EQUITY FUND
STATEMENT OF OPERATIONS
FOR THE PERIOD JANUARY 1, 1998 TO SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 1, 1998
TO SEPTEMBER 30, 1998
---------------------
<S> <C>
INVESTMENT INCOME
Other income........................................... $ 53,837
-----------
Total investment income.............................. 53,837
-----------
EXPENSES
State Street Bank and Trust Company--program fee....... 156,106
American Bar Retirement Association--program fee....... 22,763
Trustee, management and administration fees............ 33,360
Other expenses and taxes............................... 19,277
Amortization of organization expenses.................. 5,961
-----------
Total expenses....................................... 237,467
-----------
Net investment loss...................................... (183,630)
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain...................................... 140,408
Change in net unrealized appreciation.................. (1,394,774)
-----------
Net realized and unrealized loss on investments...... (1,254,366)
-----------
Net decrease in net assets resulting from operations..... $(1,437,996)
===========
</TABLE>
F-158
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
INTERNATIONAL EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
UNAUDITED
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 1, 1998
TO SEPTEMBER 30, 1998
---------------------
<S> <C>
FROM OPERATIONS
Net investment loss.................................... $ (183,630)
Net realized gain on investments....................... 140,408
Net change in unrealized appreciation on investments... (1,394,774)
------------
Net decrease in net assets resulting from operations... (1,437,996)
------------
FROM UNITHOLDER TRANSACTIONS
Proceeds from units issued............................. 58,018,895
Cost of units redeemed................................. (55,632,336)
------------
Net increase in net assets resulting from unitholder
transactions.......................................... 2,386,559
------------
Net increase in net assets........................... 948,563
NET ASSETS
Beginning of period.................................... 58,996,947
------------
End of period.......................................... $ 59,945,510
============
NUMBER OF UNITS
Outstanding--beginning of period....................... 3,239,192
Sold................................................. 2,908,930
Redeemed............................................. (2,784,872)
------------
Outstanding--end of period............................. 3,363,250
============
</TABLE>
F-159
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
INTERNATIONAL EQUITY FUND
SELECTED PER-UNIT DATA AND RATIOS
UNAUDITED
<TABLE>
<S> <C>
For a unit outstanding throughout the period:*
<CAPTION>
FOR THE PERIOD
JANUARY 1, 1998
TO SEPTEMBER 30, 1998
---------------------
<S> <C>
Investment income......................................... $ 0.02
Expenses.................................................. (0.07)
-------
Net investment loss....................................... (0.05)
Net realized and unrealized loss on investments........... (0.34)
-------
Net decrease in unit value................................ (0.39)
Net asset value at beginning of period.................... 18.21
-------
Net asset value at end of period.......................... $ 17.82
=======
Ratio of expenses to average net assets**................. 0.49 %
Ratio of net investment loss to average net assets**...... (0.38)%
Portfolio turnover*** ****................................ 87.03 %
Total return****.......................................... (2.14)%
Net assets at end of period (in thousands)................ $59,946
</TABLE>
- --------
* Calculations prepared using the monthly average number of units outstanding
during the period.
** Annualized
*** Reflects purchases and sales of shares of the registered investment
company in which the fund invests, rather than turnover of the underlying
portfolio of such registered investment company.
**** Not annualized
F-160
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
STABLE ASSET RETURN FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<S> <C>
ASSETS
Investments:
State Street Bank ABA Members/Pooled Stable Asset Fund Trust at
value
(cost $622,229,249).............................................. $662,229,249
Interest receivable............................................... 3,320,668
Receivable for fund units sold.................................... 696,728
Other assets...................................................... 90
------------
Total Assets.................................................... 666,246,735
------------
LIABILITIES
State Street Bank and Trust Company--program fee payable.......... 191,983
Trustee, management, and administration fees payable.............. 115,932
American Bar Retirement Association--program fee payable.......... 29,310
Other accruals.................................................... 47,995
------------
Total Liabilities............................................... 385,220
------------
NET ASSETS (equivalent to $1.00 per unit based on 665,861,515
units outstanding)............................................... $665,861,515
============
</TABLE>
F-161
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
STABLE ASSET RETURN FUND
STATEMENT OF OPERATIONS
FOR THE PERIOD JANUARY 1, 1998 TO SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<S> <C>
INTEREST INCOME.................................................... $29,026,358
-----------
EXPENSES
State Street Bank and Trust Company--program fee................. 1,544,800
American Bar Retirement Association--program fee................. 225,273
Trustee, management and administration fees...................... 959,797
Other expenses and taxes......................................... 154,405
Amortization of organization expenses............................ 94,180
-----------
Total expenses................................................. 2,978,455
-----------
Net investment income and net increase in net assets resulting
from operations............................................... $26,047,903
===========
</TABLE>
F-162
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
STABLE ASSET RETURN FUND
STATEMENT OF CHANGES IN NET ASSETS
UNAUDITED
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 1, 1998
TO SEPTEMBER 30, 1998
---------------------
<S> <C>
FROM OPERATIONS
Net investment income and net increase in net assets
resulting from operations............................. $ 26,047,903
-------------
Reinvestment of net investment income.................. (26,047,903)
-------------
FROM UNITHOLDER TRANSACTIONS
Proceeds from units issued............................. 126,320,346
Units issued in connection with reinvestment of net
investment income..................................... 26,047,903
Cost of units redeemed................................. (121,071,555)
-------------
Net increase in net assets resulting from unitholder
transactions.......................................... 31,296,693
-------------
Net increase in net assets........................... 31,296,693
-------------
NET ASSETS
Beginning of period.................................... 634,564,821
-------------
End of period.......................................... $ 665,861,515
=============
</TABLE>
F-163
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
STABLE ASSET RETURN FUND
SELECTED PER-UNIT DATA AND RATIOS
UNAUDITED
<TABLE>
<S> <C>
For a unit outstanding throughout the period:*
<CAPTION>
FOR THE PERIOD
JANUARY 1, 1998
TO SEPTEMBER 30, 1998
---------------------
<S> <C>
Investment income......................................... $ 0.044
Expenses.................................................. (0.004)
-------
Net investment income..................................... 0.040
Reinvestment of net investment income..................... (0.040)
-------
Net increase in unit value................................ 0.00
Net asset value at beginning of period.................... 1.00
-------
Net asset value at end of period.......................... $ 1.00
=======
Ratio of expenses to average net assets**................. 0.63%
Ratio of net investment income to average net assets**.... 5.47%
Net assets at end of period (in thousands)................ 665,862
</TABLE>
- --------
* Calculations prepared using the monthly average number of units outstanding
during the period.
** Annualized
F-164
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
VALUE EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SEPTEMBER 30, 1998
------------------
<S> <C>
ASSETS
Investments, at value (cost $111,808,877)................... $125,146,820
Cash........................................................ 2,845
Receivable for fund units sold.............................. 70,977
Dividends and interest receivable........................... 233,897
------------
Total Assets.............................................. 125,454,539
------------
LIABILITIES
Payable for investments purchased........................... 407,044
Payable for fund units redeemed............................. 273,588
Investment advisory fee payable............................. 69,261
State Street Bank and Trust Company--program fee payable.... 33,337
Trustee, management, and administration fees payable........ 7,245
American Bar Retirement Association--program fee payable.... 4,852
Other accruals.............................................. 9,527
------------
Total Liabilities......................................... 804,854
------------
NET ASSETS (equivalent to $19.89 per unit based on 6,267,013
units outstanding)......................................... $124,649,685
============
</TABLE>
F-165
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
VALUE EQUITY FUND
STATEMENT OF OPERATIONS
FOR THE PERIOD JANUARY 1, 1998 TO SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends...................................................... $ 1,718,148
Interest....................................................... 494,058
------------
Total investment income...................................... 2,212,206
------------
EXPENSES
Investment advisory fee........................................ 318,304
State Street Bank and Trust Company--program fee............... 317,728
American Bar Retirement Association--program fee............... 46,331
Trustee, management and administration fees.................... 67,902
Other expenses and taxes....................................... 33,922
Amortization of organization expenses.......................... 15,871
------------
Total expenses............................................... 800,058
------------
Net investment income............................................ 1,412,148
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain.............................................. 7,067,094
Change in net unrealized appreciation.......................... (10,911,386)
------------
Net realized and unrealized loss on investments.............. (3,844,292)
------------
Net decrease in net assets resulting from operations............. $ (2,432,144)
============
</TABLE>
F-166
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
VALUE EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
UNAUDITED
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 1, 1998
TO SEPTEMBER 30, 1998
---------------------
<S> <C>
FROM OPERATIONS
Net investment income.................................. $ 1,412,148
Net realized gain on investments....................... 7,067,094
Net change in unrealized appreciation on investments... (10,911,386)
------------
Net decrease in net assets resulting from operations... (2,432,144)
------------
FROM UNITHOLDER TRANSACTIONS
Proceeds from units issued............................. 25,478,182
Cost of units redeemed................................. (11,498,997)
------------
Net increase in net assets resulting from unitholder
transactions.......................................... 13,979,185
------------
Net increase in net assets........................... 11,547,041
NET ASSETS
Beginning of period.................................... 113,102,644
------------
End of period.......................................... $124,649,685
============
NUMBER OF UNITS
Outstanding--beginning of period....................... 5,624,404
Sold................................................. 1,186,412
Redeemed............................................. (543,803)
------------
Outstanding--end of period............................. 6,267,013
============
</TABLE>
F-167
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
VALUE EQUITY FUND
SELECTED PER-UNIT DATA AND RATIOS
UNAUDITED
<TABLE>
<S> <C>
For a unit outstanding throughout the period:*
<CAPTION>
FOR THE PERIOD
JANUARY 1, 1998
TO SEPTEMBER 30, 1998
---------------------
<S> <C>
Investment income......................................... $ 0.35
Expenses.................................................. (0.13)
--------
Net investment income..................................... 0.22
Net realized and unrealized loss on investments........... (0.44)
--------
Net decrease in unit value................................ (0.22)
Net asset value at beginning of period.................... 20.11
--------
Net asset value at end of period.......................... $ 19.89
========
Ratio of expenses to average net assets**................. 0.81 %
Ratio of net investment income to average net assets**.... 1.43 %
Portfolio turnover***..................................... 21.06 %
Total return***........................................... (1.09)%
Average commissions rate***............................... $ 0.0567
Net assets at end of period (in thousands)................ $124,650
</TABLE>
- --------
* Calculations prepared using the monthly average number of units outstanding
during the period.
** Annualized
*** Not annualized
F-168
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
VALUE EQUITY FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------ -----------
<S> <C> <C>
COMMON STOCK (97.1%)
BASIC INDUSTRIES (10.2%)
ALUMINUM (0.8%)
Alcan Aluminum Ltd. ADR**................................... 25,700 $ 602,344
Aluminum Co. of America..................................... 4,846 344,066
-----------
946,410
-----------
CHEMICALS (4.4%)
B.F. Goodrich Co. .......................................... 22,500 735,469
Cabot Corp. ................................................ 11,100 276,806
Dow Chemical Co. ........................................... 9,700 828,744
E.I. Du Pont de Nemours & Co. .............................. 2,200 123,475
Eastman Chemical Co. ....................................... 11,400 574,988
FMC Corp.*.................................................. 2,900 149,531
Great Lakes Chemical Corp. ................................. 8,400 326,550
Hercules Inc. .............................................. 15,200 456,950
Millenium Chemicals Inc. ADR **............................. 20,600 383,675
Nalco Chemical Co. ......................................... 16,600 489,700
Sigma Aldrich Corp. ........................................ 25,700 742,087
Union Carbide Corp. ........................................ 8,200 353,625
-----------
5,441,600
-----------
CONTAINERS & GLASS (0.4%)
Temple Inland Inc. ......................................... 11,500 550,563
-----------
PAPER (4.7%)
Boise Cascade Corp. ........................................ 20,000 506,250
Champion International Corp. ............................... 19,400 607,462
Consolidated Papers Inc. ................................... 21,400 537,675
International Paper Co. .................................... 17,600 820,600
Kimberly-Clark Corp. ....................................... 17,700 716,850
Mead Corp. ................................................. 19,600 576,975
Minnesota Mining & Manufacturing Co. ....................... 2,400 176,850
Potlatch Corp. ............................................. 10,200 347,438
Union Camp Corp. ........................................... 9,200 362,250
Westvaco Corp. ............................................. 17,000 408,000
Willamette Industries Inc. ................................. 26,600 763,087
-----------
5,823,437
-----------
12,762,010
-----------
CAPITAL GOODS (4.2%)
CONSTRUCTION & MINING EQUIPMENT (0.3%)
Foster Wheeler Corp. ....................................... 13,900 191,125
Harnischfeger Industries Inc. .............................. 17,800 200,250
-----------
391,375
-----------
ELECTRICAL EQUIPMENT (2.4%)
Arrow Electronics Inc. ..................................... 13,400 175,875
General Electric Co. ....................................... 34,700 2,760,819
-----------
2,936,694
-----------
</TABLE>
F-169
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
VALUE EQUITY FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------ -----------
<S> <C> <C>
INDUSTRIAL MACHINERY (0.9%)
Briggs & Stratton Corp. .................................... 9,100 $ 374,238
Cummins Engine Co., Inc. ................................... 14,100 419,475
Ingersoll Rand Co. ......................................... 9,900 375,581
-----------
1,169,294
-----------
POLLUTION CONTROL (0.6%)
Browning Ferris Industries Inc. ............................ 23,000 695,750
-----------
5,193,113
-----------
CONSUMER BASICS (16.1%)
DRUGS & HEALTH CARE (10.1%)
Abbott Laboratories......................................... 18,400 799,250
American Home Products Corp. ............................... 8,700 455,662
Bausch & Lomb Inc. ......................................... 6,500 255,938
Bristol-Myers Squibb Co. ................................... 10,600 1,101,075
C.R. Bard Inc............................................... 12,200 449,875
Columbia/HCA Healthcare Corp................................ 19,450 390,216
Eli Lilly & Co.............................................. 800 62,650
Johnson & Johnson........................................... 32,000 2,504,000
Mallinckrodt Inc............................................ 23,000 467,187
Merck & Co., Inc............................................ 10,000 1,295,625
Pacificare Health Systems*.................................. 4,800 357,600
Pfizer Inc.................................................. 15,700 1,663,219
Pharmacia & Upjohn Inc...................................... 18,800 943,525
Schering-Plough Corp........................................ 5,000 517,812
SmithKline Beecham PLC ADR** ............................... 11,400 624,150
Tenet Healthcare Corp.*..................................... 25,400 730,250
-----------
12,618,034
-----------
FOOD & BEVERAGES (2.5%)
Archer Daniels Midland Co................................... 46,345 776,283
Coca Cola Co................................................ 22,100 1,273,512
H.J. Heinz Co............................................... 5,800 296,525
PepsiCo Inc................................................. 15,400 453,338
Supervalu Inc............................................... 12,000 279,750
-----------
3,079,408
-----------
HOUSEHOLD PRODUCTS (0.3%)
Procter & Gamble Co......................................... 6,000 425,625
-----------
RETAIL GROCERY (0.8%)
Albertson's Inc............................................. 14,700 795,638
Great Atlantic & Pacific Tea Co., Inc....................... 10,300 249,775
-----------
1,045,413
-----------
TOBACCO (2.4%)
Philip Morris Cos., Inc..................................... 52,500 2,418,281
RJR Nabisco Holdings Corp................................... 20,300 511,306
-----------
2,929,587
-----------
20,098,067
-----------
</TABLE>
F-170
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
VALUE EQUITY FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------ ----------
<S> <C> <C>
CONSUMER DURABLE GOODS (4.1%)
AUTOMOBILES (1.6%)
Ford Motor Co................................................ 31,400 $1,473,838
PACCAR Inc................................................... 12,700 523,081
----------
1,996,919
----------
AUTO PARTS (0.9%)
Dana Corp.................................................... 13,800 514,912
Genuine Parts Co............................................. 18,700 562,169
----------
1,077,081
----------
HOUSEHOLD APPLIANCES & HOME FURNISHINGS (0.3%)
Whirlpool Corp............................................... 8,800 413,600
----------
MOBILE HOMES (0.1%)
Fleetwood Enterprises Inc.................................... 6,100 184,144
----------
TIRES & RUBBER (1.2%)
Cooper Tire & Rubber Co...................................... 26,000 468,000
Goodyear Tire & Rubber Co.................................... 19,100 981,262
----------
1,449,262
----------
5,121,006
----------
CONSUMER NON-DURABLES (7.8%)
APPAREL & TEXTILES (1.1%)
Reebok International Ltd..................................... 19,800 268,538
Russell Corp................................................. 12,800 336,000
Springs Industries Inc....................................... 2,600 90,350
VF Corp...................................................... 17,900 664,537
----------
1,359,425
----------
LIQUOR (1.0%)
Anheuser Busch Cos., Inc..................................... 22,200 1,198,800
----------
RETAIL TRADE (5.6%)
Abercrombie & Fitch Co.*..................................... 3 132
Dayton Hudson Corp........................................... 20,200 722,150
Dillards Inc................................................. 17,300 489,806
Federated Department Stores Inc.*............................ 16,600 603,825
Home Depot Inc............................................... 7,500 296,250
J.C. Penney Co., Inc......................................... 16,500 741,469
Limited Inc.................................................. 14,560 319,410
May Department Stores Co..................................... 13,900 715,850
Sears Roebuck & Co........................................... 19,800 874,912
TJX Cos., Inc................................................ 23,600 420,375
Toys R Us Inc.*.............................................. 25,300 409,544
Wal Mart Stores Inc.......................................... 25,200 1,376,550
----------
6,970,273
----------
TOYS & AMUSEMENTS (0.1%)
Mattel Inc................................................... 6,800 190,400
----------
9,718,898
----------
</TABLE>
F-171
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
VALUE EQUITY FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------ ----------
<S> <C> <C>
CONSUMER SERVICES (0.9%)
AIR TRAVEL (0.5%)
AMR Corp.*................................................... 11,600 $ 643,075
----------
LEISURE TIME (0.4%)
Harrahs Entertainment Inc.*.................................. 32,000 426,000
Walt Disney Co............................................... 1,500 37,969
----------
463,969
----------
1,107,044
----------
ENERGY (5.8%)
DOMESTIC OIL (1.1%)
Ashland Inc.................................................. 8,000 370,000
Phillips Petroleum Co........................................ 13,800 622,725
Sun Co., Inc.*............................................... 12,100 387,200
----------
1,379,925
----------
GAS EXPLORATION (0.0%)
Union Pacific Resources Group Inc............................ 1 12
----------
INTERNATIONAL OIL (4.4%)
Amoco Corp................................................... 24,800 1,336,100
Chevron Corp................................................. 3,000 252,188
Exxon Corp................................................... 21,000 1,473,937
Mobil Corp................................................... 18,100 1,374,469
Royal Dutch Petroleum Co. ADR**.............................. 19,600 933,450
----------
5,370,144
----------
PETROLEUM SERVICES (0.4%)
Lyondell Petrochemical Co.................................... 23,300 518,425
----------
7,268,506
----------
FINANCE (15.8%)
BANKS (4.7%)
Bank One Corporation......................................... 22,800 971,850
BankAmerica Corp............................................. 9,400 565,175
Bankamerica Corporation New.................................. 7,600 406,600
Chase Manhattan Corp......................................... 24,000 1,038,000
Citicorp..................................................... 2,500 232,344
First Chicago Corp........................................... 2,600 178,100
First Union Corp............................................. 6,400 327,600
Fleet Financial Group Inc.................................... 12,200 895,937
J.P. Morgan & Co., Inc....................................... 8,200 693,925
Keycorp...................................................... 10,000 288,750
Republic New York Corp....................................... 5,800 229,100
----------
5,827,381
----------
</TABLE>
F-172
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
VALUE EQUITY FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------ -----------
<S> <C> <C>
FINANCIAL SERVICES (3.9%)
Countrywide Credit Industries Inc........................... 16,100 $ 670,163
Federal Home Loan Mortgage Corp............................. 25,200 1,245,825
Federal National Mortgage Association....................... 27,600 1,773,300
Merrill Lynch & Co., Inc.................................... 9,600 454,800
Morgan Stanley Dean Witter.................................. 16,215 698,258
-----------
4,842,346
-----------
INSURANCE (6.7%)
Aetna Inc................................................... 9,600 667,200
Allstate Corp............................................... 28,600 1,192,262
Ambac Inc................................................... 1,600 76,800
American General Corp....................................... 18,852 1,204,171
American International Group Inc............................ 2,925 225,225
Chubb Corp.................................................. 10,100 636,300
CIGNA Corp.................................................. 12,900 853,012
Foundation Health Systems Inc.*............................. 20,250 189,844
Lincoln National Corp....................................... 8,500 699,125
Loews Corp.................................................. 3,100 261,563
MBIA Inc.................................................... 12,600 676,463
SAFECO Corp................................................. 14,600 608,638
St. Paul Cos. Inc........................................... 19,600 637,000
Torchmark Corp.............................................. 12,800 460,000
-----------
8,387,603
-----------
SAVINGS AND LOAN (0.5%)
Golden West Financial Corp.................................. 8,000 654,500
-----------
19,711,830
-----------
GENERAL BUSINESS (0.2%)
BUSINESS SERVICES (0.2%)
DeLuxe Corp................................................. 9,900 281,531
-----------
MISCELLANEOUS (2.7%)
CONGLOMERATES (1.4%)
Canadian Pacific Limited New ADR**.......................... 17,900 370,306
ITT Industries Inc.......................................... 15,400 521,675
Raytheon Company Class B.................................... 14,800 798,275
Textron Inc................................................. 1,800 109,125
-----------
1,799,381
-----------
MISCELLANEOUS (1.3%)
Allegheny Energy Inc........................................ 17,500 552,344
Fdx Corporation*............................................ 15,000 676,875
Hartford Financial Services Group........................... 8,200 388,987
-----------
1,618,206
-----------
3,417,587
-----------
</TABLE>
F-173
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
VALUE EQUITY FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------ -----------
<S> <C> <C>
SHELTER (1.8%)
CONSTRUCTION MATERIALS (0.3%)
Masco Corp.................................................. 10,000 $ 246,250
Owens Corning Fiberglas Corp................................ 5,300 172,581
-----------
418,831
-----------
FOREST PRODUCTS (1.2%)
Georgia Pacific Corp........................................ 15,500 707,188
Weyerhaeuser Co............................................. 18,900 797,344
-----------
1,504,532
-----------
HOMEBUILDERS (0.3%)
Centex Corp................................................. 9,600 331,200
-----------
2,254,563
-----------
TECHNOLOGY (13.6%)
AEROSPACE (2.1%)
Boeing Co................................................... 26,300 902,419
Litton Industries Inc.*..................................... 11,600 696,000
Lockheed Martin Corp........................................ 6,300 635,119
Northrop Grumman Corp....................................... 5,000 365,000
Rockwell International Corp................................. 2,400 86,700
-----------
2,685,238
-----------
COMPUTERS & BUSINESS EQUIPMENT (5.9%)
Cisco Systems Inc.*......................................... 13,500 834,469
Hewlett Packard Co.......................................... 23,700 1,254,619
IBM Corp.................................................... 21,600 2,764,800
Quantum Corp.*.............................................. 33,100 525,462
Sun Microsystems Inc.*...................................... 21,600 1,075,950
Tech Data Corp.*............................................ 17,800 891,112
-----------
7,346,412
-----------
ELECTRONICS (3.2%)
AMP Inc..................................................... 16,300 582,725
Intel Corp.................................................. 13,600 1,166,200
Lucent Technologies Inc..................................... 10,008 691,178
National Semiconductor Corp.*............................... 56,300 545,406
Raytheon Company Class A.................................... 76 3,938
Teradyne Inc.*.............................................. 14,500 264,625
Thomas & Betts Corp......................................... 18,100 688,931
-----------
3,943,003
-----------
SOFTWARE (2.4%)
Microsoft Corp.*............................................ 27,400 3,015,712
-----------
16,990,365
-----------
</TABLE>
F-174
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
SCHEDULE OF INVESTMENTS
VALUE EQUITY FUND
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
SHARES VALUE
------ ------------
<S> <C> <C>
TRANSPORTATION (2.6%)
RAILROADS & EQUIPMENT (2.3%)
Burlington Northern Santa Fe Inc........................... 26,700 $ 854,400
CSX Corp................................................... 19,700 828,631
Norfolk Southern Corp...................................... 18,100 526,031
Union Pacific Corp......................................... 14,200 605,275
------------
2,814,337
------------
TRUCKING & FREIGHT FORWARDING (0.3%)
Ryder Systems Inc.......................................... 16,300 405,463
------------
3,219,800
------------
UTILITIES (11.1%)
ELECTRIC UTILITIES (3.5%)
American Electric Power Co., Inc........................... 14,500 707,781
GPU Inc.................................................... 21,300 905,250
PG&E Corp.................................................. 26,200 836,763
Puget Sound Power & Light Co............................... 10,200 283,050
Unicom Inc................................................. 24,300 908,212
Wisconsin Energy Corp...................................... 24,000 757,500
------------
4,398,556
------------
TELEPHONE (7.6%)
Alltel Corp................................................ 20,300 961,713
Ameritech Corp............................................. 7,100 336,363
AT&T Corp.................................................. 37,200 2,173,875
Bell Atlantic Corp......................................... 19,584 948,600
Bellsouth Corp............................................. 5,500 413,875
GTE Corp................................................... 27,300 1,501,500
SBC Communications Inc..................................... 44,400 1,973,025
United States West Incorporated New........................ 21,500 1,127,406
------------
9,436,357
------------
13,834,913
------------
TOTAL COMMON STOCK (cost $107,641,290)..................... 120,979,233
------------
</TABLE>
<TABLE>
<CAPTION>
UNITS
---------
SHORT TERM INVESTMENTS (COST $4,167,587) (3.3%)
<S> <C> <C>
State Street Bank Yield Enhanced Short Term Investment
Fund................................................. 4,167,587 4,167,587
------------
TOTAL INVESTMENTS (COST $111,808,877) (100.4%)........ 125,146,820
Liabilities less Other Assets (-0.4%)................. (497,135)
------------
NET ASSETS (100.0%)................................... 124,649,685
============
</TABLE>
- --------
*Non-income producing security.
**An American Depositary Receipt (ADR) is a certificate issued by a U.S. bank
representing the right to receive securities of the foreign issuer described.
F-175
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
STRUCTURED PORTFOLIO SERVICE
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
CONSERVATIVE MODERATE AGGRESSIVE
------------ ----------- -----------
<S> <C> <C> <C>
ASSETS
State Street Bank collective investment
funds, at value: Stable Asset Return
Fund (cost of $6,451,672 and $7,162,889
and units of 6,451,672 and 7,162,889
respectively)........................... $ 6,451,673 $ 7,162,889 $ --
Intermediate Bond Fund (cost of
$6,835,570, $18,920,073, and $7,497,533
and units of 580,047, 1,655,973, and
652,998 respectively)................... 7,526,952 21,488,669 8,473,606
Value Equity Fund (cost of $1,497,637,
$7,094,933, and $7,492,921 and units of
75,687, 396,142, and 426,028
respectively)........................... 1,505,390 7,879,178 8,473,606
Growth Equity Fund (cost $1,412,634,
$6,622,147, and $6,904,967 and units of
3,835, 20,072, and 21,586 respectively). 1,505,390 7,879,178 8,473,605
Index Equity Fund (cost of $2,932,845,
$14,481,468, and $14,499,997 and units
of 134,593, 736,477, and 757,602
respectively)........................... 3,010,780 16,474,645 16,947,211
International Equity Fund (cost of
$1,612,287, $11,101,121, and $11,687,958
and units of 84,460, 602,812, and
633,883 respectively)................... 1,505,390 10,744,334 11,298,141
Aggressive Equity fund (cost of
$3,000,423 and units of 66,900
respectively)........................... -- -- 2,824,535
Receivable for investments sold........... 217,496 951,805 811,538
Receivable for fund units sold............ 7,865 84,035 45,253
----------- ----------- -----------
Total assets............................ 21,730,936 72,664,733 57,347,495
----------- ----------- -----------
LIABILITIES
Payable for investments purchased......... 225,361 1,035,840 856,791
Accrued expenses.......................... 1,445 4,894 3,884
----------- ----------- -----------
Total liabilities....................... 226,806 1,040,734 860,675
----------- ----------- -----------
NET ASSETS (equivalent to $13.66, $14.54,
and $15.22 per unit based on 1,574,106,
4,925,564, and 3,710,743 units
outstanding respectively)................ $21,504,130 $71,623,999 $56,486,820
=========== =========== ===========
</TABLE>
F-176
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
STRUCTURED PORTFOLIO SERVICE
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
CONSERVATIVE MODERATE AGGRESSIVE
------------ ----------- -----------
<S> <C> <C> <C>
Investment Income....................... $ -- $ -- $ --
Service fees............................ 12,771 45,049 36,576
---------- ----------- -----------
Net investment loss..................... (12,771) (45,049) (36,576)
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain on investments sold. 1,693,931 4,288,195 2,924,850
Change in net unrealized appreciation. (644,704) (1,422,931) (2,109,377)
---------- ----------- -----------
Net realized and unrealized gain on
investments........................ 1,049,227 2,865,264 815,473
Net increase in net assets resulting
from operations........................ $1,036,456 $ 2,820,215 $ 778,897
========== =========== ===========
</TABLE>
F-177
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
STRUCTURED PORTFOLIO SERVICE
STATEMENT OF CHANGES IN NET ASSETS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
CONSERVATIVE MODERATE AGGRESSIVE
------------ ----------- -----------
<S> <C> <C> <C>
FROM OPERATIONS
Net investment loss................... $ (12,771) $ (45,049) $ (36,576)
Net realized gain on investments...... 1,693,931 4,288,195 2,924,850
Net change in unrealized appreciation
on investments....................... (644,704) (1,422,931) (2,109,377)
----------- ----------- -----------
Net increase in net assets resulting
from
operations........................... 1,036,456 2,820,215 778,897
----------- ----------- -----------
FROM UNITHOLDER TRANSACTIONS
Proceeds from units issued............ 10,053,162 11,695,641 9,337,993
Cost of units redeemed................ (6,813,306) (8,986,738) (5,498,079)
----------- ----------- -----------
Net increase in net assets resulting
from unitholder transactions......... 3,239,856 2,708,903 3,839,914
----------- ----------- -----------
Net increase in net assets.......... 4,276,312 5,529,118 4,618,811
NET ASSETS
Beginning of period................... 17,227,818 66,094,881 51,868,009
----------- ----------- -----------
End of period......................... $21,504,130 $71,623,999 $56,486,820
=========== =========== ===========
NUMBER OF UNITS
Outstanding--beginning of period...... 1,328,560 4,744,620 3,478,382
Sold................................ 741,410 786,999 576,045
Redeemed............................ (495,864) (606,055) (343,684)
----------- ----------- -----------
Outstanding--end of period............ 1,574,106 4,925,564 3,710,743
=========== =========== ===========
</TABLE>
F-178
<PAGE>
AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET COLLECTIVE TRUST
STRUCTURED PORTFOLIO SERVICE
PER-UNIT DATA AND RATIOS
FOR THE PERIOD ENDED SEPTEMBER 30, 1998
UNAUDITED
<TABLE>
<S> <C> <C> <C>
For a unit outstanding throughout the
period:*
<CAPTION>
CONSERVATIVE MODERATE AGGRESSIVE
------------ -------- ----------
<S> <C> <C> <C>
Investment income............................ $ 0.00 $ 0.00 $ 0.00
Expenses..................................... (0.01) (0.01) (0.01)
------ ------ ------
Net investment loss.......................... (0.01) (0.01) (0.01)
Net realized and unrealized gain on
investments................................. 0.70 0.62 0.32
------ ------ ------
Net increase in unit value................... 0.69 0.61 0.31
Net asset value at beginning of period....... 12.97 13.93 14.91
------ ------ ------
Net asset value at end of period............. $13.66 $14.54 $15.22
====== ====== ======
Ratio of expenses to average net assets**.... 0.08 % 0.08 % 0.07 %
Ratio of net investment income to average net
assets**.................................... (0.08)% (0.08)% (0.07)%
Portfolio turnover*** ****................... 42.23 % 22.95 % 17.38 %
Total return****............................. 5.32 % 4.38 % 2.08 %
Net assets at end of period (in thousands)... 21,504 71,624 56,487
</TABLE>
- --------
* Calculations prepared using the monthly average number of units
outstanding during the year.
** Ratios annualized.
*** Reflects purchases and sales of units of the funds in which the portfolio
invests rather than the turnover of such underlying funds.
**** Not annualized
F-179
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the
securities being registered are set forth in the following table (all amounts
except the registration fee are estimated):
<TABLE>
<S> <C>
Registration fee................................................. $ 556,000
Accountant's fees and expenses................................... 20,000
Legal fees and expenses.......................................... 75,000
Printing and mailing expenses.................................... 379,000
Blue Sky fees and expenses....................................... 20,000
Miscellaneous.................................................... 50,000
----------
Total.......................................................... $1,100,000
==========
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
State Street's By-Laws provide that State Street shall indemnify each person
who is or was a director, officer, employee or other agent of State Street
against all liabilities, costs and expenses, including but not limited to
amounts paid in satisfaction of judgments, in settlement or as fines and
penalties, and counsel fees and disbursements reasonably incurred by such
persons in connection with the defense or disposition of or otherwise in
connection with or resulting from any action, suit or other proceeding, whether
civil, criminal, administrative or investigative, before any court or
administrative or legislative or investigative body, in which such person may
be or may have been involved as a party or otherwise or with which such person
may be or may have been threatened, while in office or thereafter, by reason of
being or having been such a director, officer, employee, agent or trustee, or
by reason of any action taken or not taken in any such capacity, except with
respect to any matter as to which such person shall have been finally
adjudicated by a court of competent jurisdiction not to have acted in good
faith in the reasonable belief that such action was in the best interests of
State Street.
State Street Corporation, the parent company of State Street, carries
director and officer liability insurance that protects directors and officers
from losses arising out of actual or alleged negligence or imprudent acts or
omissions while they are directing or managing the affairs of State Street
Corporation.
State Street Corporation also carries bankers professional liability
insurance which protects State Street and State Street Corporation against
losses resulting from actual or alleged wrongful acts committed in connection
with rendering a professional service.
Each of the Investment Advisor Agreements between State Street and the
Investment Advisors provides that to the extent permitted by applicable law,
the Investment Advisor agrees to indemnify and hold harmless State Street for
any losses, damages or expenses resulting from (1) any recommendation of the
Investment Advisor or based on information provided by the Investment Advisor,
(2) the Investment Advisor's failure to provide correct and timely information
or to make recommendations on a timely basis as provided in the applicable
Agreement and (3) any disclosure relating to the Investment Advisor or the
services provided by the Investment Advisor with respect to a Fund which the
Investment Advisor has prepared, approved in writing or has not disapproved
within five (5) business days following transmission to a person designated by
the Investment Advisor to review such disclosure; provided, however, that the
Investment Advisor shall not be required to indemnify and hold harmless State
Street to the extent that such losses, damages or expenses result from an act
or omission of the Investment Advisor with respect to which the Investment
Advisor not only has used such care, skill, prudence and diligence as a
reasonably prudent person acting in like
II-1
<PAGE>
capacity and familiar with such matters would use in the conduct of an
enterprise of like character and with like aims, but also has otherwise acted
in accordance with the Investment Advisor Agreement.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
Since December 1995, the Collective Trust has issued an aggregate of
approximately $1,085,743,827 of unregistered Units. Such Units were offered and
sold in reliance upon the exemption from registration under Rule 180
promulgated under the Securities Act relating to exemption from registration of
interests and participations issued in connection with certain H.R. 10 plans.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF DOCUMENT
----------- -----------------------
<C> <S>
3.1 American Bar Association Members/State Street Collective
Trust, Declaration of Trust by State Street Bank and Trust
Company, amended and restated December 5, 1991, with
Exhibits 1-5 attached thereto, included as Exhibit 3.1 to
Registrant's Form S-1 Registration Statement No. 33-50080
and incorporated herein by reference thereto.
3.2 American Bar Association Members/State Street Collective
Trust, Amendment to Declaration of Trust by State Street
Bank and Trust Company dated July 31, 1995, with Exhibits 1-
9 attached thereto, included as Exhibit 3.2 to Registrants
Form S-1 Registration Statement No. 33-92120 and
incorporated herein by reference thereto.
3.3 American Bar Association Members/State Street Collective
Trust, Amended and Restated Fund Declarations dated as of
April 12, 1996 for each of the Aggressive Equity Fund, the
Balanced Fund, the Growth Equity Fund, the Index Equity
Fund, the Intermediate Bond Fund, the International Equity
Fund and the Value Equity Fund, included as Exhibit 3.3 to
Registrants Form S-1 Registration Statement No. 33-92120 and
incorporated herein by reference thereto.
3.4 American Bar Association Members/State Street Collective
Trust, Second Amended and Restated Fund Declaration, dated
as of April 11, 1997, for the Stable Asset Return Fund.
4.1 American Bar Association Members/State Street Collective
Trust, Fund Declaration for each Fund and the Structured
Portfolio Service, included in Exhibits No. 3.1, 3.2, 3.3 or
3.4.
5.1** Opinion of Paul, Weiss, Rifkind, Wharton & Garrison
regarding the legality of the Units registered.
5.2** Opinion of Goodwin, Procter & Hoar LLP regarding matters of
Massachusetts law.
10.1 Trust Agreement of the American Bar Association Members
Retirement Trust, amended and restated as of January 1,
1992, by and between the American Bar Retirement Association
and State Street Bank and Trust Company, included as Exhibit
10.1 to Registrant's Form 10-K for the year ended December
31, 1991 and incorporated herein by reference thereto.
10.2 Trust Agreement of the American Bar Association Members
Pooled Trust for Retirement Plans, amended and restated as
of January 1, 1992, by and between the American Bar
Retirement Association and State Street Bank and Trust
Company, included as Exhibit 10.2 to Registrant's Form 10-K
for the year ended December 31, 1991 and incorporated herein
by reference thereto.
10.3 Amendment to the American Bar Association Members Retirement
Trust dated July 31, 1995 by and between the American Bar
Retirement Association and State Street Bank and Trust
Company, included as Exhibit 10.3 to Registrants Form S-1
Registration Statement No. 33-92120 and incorporated herein
by reference thereto.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF DOCUMENT
----------- -----------------------
<C> <S>
10.4 Amendment to the American Bar Association Members Pooled
Trust for Retirement Plans dated July 31, 1995 by and
between the American Bar Retirement Association and State
Street Bank and Trust Company, included as Exhibit 10.4 to
Registrants Form S-1 Registration Statement No. 33-92120 and
incorporated herein by reference thereto.
10.5 American Bar Association Members Retirement Plan--Basic Plan
Document No. 01, as approved by the Internal Revenue Service
on December 16, 1996 .
10.6 American Bar Association Members Defined Benefit Pension
Plan--Basic Plan Document No. 02 and related participation
agreements, included as Exhibit 10.4 to Pre-Effective
Amendment No. 1 to Registrant's Registration Statement on
Form S-1 No. 33-42274 and incorporated herein by reference
thereto.
10.7* Administrative and Investment Services Agreement effective
January 1, 1999, between State Street Bank and Trust Company
and the American Bar Retirement Association.
10.8 Investment Advisor Agreement effective as of January 1, 1992
by and between State Street Bank and Trust Company and
Capital Guardian Trust Company relating to the Growth Equity
Fund, included as Exhibit 10.6 to Registrant's Annual Report
on Form 10-K for the year ended December 31, 1991 and
incorporated herein by reference thereto.
10.9 Investment Advisor Agreement effective as of January 1, 1992
by and between State Street Bank and Trust Company and RCM
Capital Management relating to the Growth Equity Fund,
included as Exhibit 10.8 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1991 and
incorporated herein by reference thereto.
10.10 Investment Advisor Agreement effective as of January 1, 1992
by and between State Street Bank and Trust Company and
Capital Guardian Trust Company relating to the Aggressive
Equity Fund, included as Exhibit 10.9 to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1991 and
incorporated herein by reference thereto.
10.11 Investment Advisor Agreement effective as of January 1, 1992
by and between State Street Bank and Trust Company and Sit
Investment Associates, Inc. relating to the Aggressive
Equity Fund, included as Exhibit 10.10 to Registrant's
Annual Report on Form 10-K for the year ended December 31,
1991 and incorporated herein by reference thereto.
10.12 Investment Advisor Agreement effective as of October 1, 1992
by and between State Street Bank and Trust Company and
Miller, Anderson & Sherrerd relating to the Balanced Fund,
included as Exhibit 10.13 to Registrant's Form S-1
Registration Statement No. 33-50080 and incorporated herein
by reference thereto.
10.13 Investment Advisor Agreement effective as of November 1,
1992 by and between State Street Bank and Trust Company and
Lincoln Capital Management Company relating to the Balanced
Fund, included as Exhibit 10.14 to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1992 and
incorporated herein by reference thereto.
10.14 Investment Advisor Agreement effective as of June 30, 1997
by and between State Street Bank and Trust Company and
Capital Guardian Trust Company relating to the Balanced
Fund, included as Exhibit 10.1 to Registrant's Quarterly
Report on Form
10-Q for the quarter ended June 30, 1997 and incorporated
herein by reference thereto.
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF DOCUMENT
----------- -----------------------
<C> <S> <C>
10.15 Investment Advisor Agreement dated July 31, 1995 by and
between State Street Bank and Trust Company and Sanford
Bernstein & Co. Inc. relating to the Value Equity Fund,
included as Exhibit 10.17 to Registrants Form S-1
Registration Statement No. 33-92120 and incorporated herein
by reference thereto.
10.16 Plan of Merger effective as of September 5, 1995 merging
Blended Rate Fund with and into Enhanced Short Term
Investment Fund, included as Exhibit 10.18 to Registrants
Form S-1 Registration Statement No. 33-92120 and
incorporated herein by reference thereto.
10.17 Investment Advisor Agreement effective as of June 13, 1997
by and between State Street Bank and Trust Company and
Bankers Trust Company relating to the Growth Equity Fund,
included as Exhibit 10.2 to the Registrant's Quarterly
report on Form 10-Q for the quarter ended June 30, 1997 and
incorporated herein by reference thereto.
23.1** Consent of Paul, Weiss, Rifkind, Wharton & Garrison,
included in the opinion filed as Exhibit 5.1.
23.2** Consent of Goodwin, Procter & Hoar LLP, included in the
opinion filed as Exhibit 5.2.
23.3* Consent of Price Waterhouse.
24.1* Power of Attorney.
27.1* Financial Data Schedule--Aggressive Equity Fund
27.2* Financial Data Schedule--Balanced Fund
27.3* Financial Data Schedule--Growth Equity Fund
27.4* Financial Data Schedule--Index Equity Fund
27.5* Financial Data Schedule--Intermediate Bond Fund
27.6* Financial Data Schedule--International Fund
27.7* Financial Data Schedule--Stable Asset Return Fund
27.8* Financial Data Schedule--Value Equity Fund
27.9* Financial Data Schedule--Structured Portfolio
Service Conservative Portfolio
27.10* Financial Data Schedule--Structured Portfolio
Service Moderate Portfolio
27.11* Financial Data Schedule--Structured Portfolio
Service Aggressive Portfolio
</TABLE>
- --------
*Filed herewith.
**To be filed by amendment.
(b) Financial Statement Schedules and Related Reports
A Schedule of Investments for each of the Aggressive Equity Fund, the
Balanced Fund, the Growth Equity Fund and the Value Equity Fund is filed as
part of this Registration Statement. See "Index to Financial Statements."
All other schedules and reports are omitted because they are not applicable
or not required, or because the information required therein is included in the
financial statements or the notes thereto.
II-4
<PAGE>
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, 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 director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
The Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospecctus filed by the Company pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be a part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-5
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF BOSTON, COMMONWEALTH OF
MASSACHUSETTS, ON DECEMBER 21, 1998.
AMERICAN BAR ASSOCIATION MEMBERS/
STATE STREET COLLECTIVE TRUST
/s/ James S. Phalen
By: __________________________________
Name: James S. Phalen
Title: President and Chief
Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES INDICATED.
SIGNATURE TITLE DATE
/s/ James S. Phalen President and Chief December 21,
- ------------------------------------ Executive Officer 1998
JAMES S. PHALEN of the American
Bar Association
Members/State
Street Collective
Trust (Principal
Executive Officer)
/s/ Nancy P. Antin Vice President and December 21,
- ------------------------------------ Chief Financial 1998
NANCY P. ANTIN Officer of the
American Bar
Association
Members/State
Street Collective
Trust (Principal
Financial Officer)
/s/ Susan C. Daniels Treasurer and Chief December 21,
- ------------------------------------ Accounting Officer 1998
SUSAN C. DANIELS of the American
Bar Association
Members/State
Street Collective
Trust (Principal
Accounting
Officer)
II-6
<PAGE>
<TABLE>
<S> <C> <C>
SIGNATURE TITLE DATE
Director of State
- ------------------------------------- Street Bank and
TENLEY E. ALBRIGHT Trust Company
* Director of State December 21,
- ------------------------------------- Street Bank and 1998
I. MACALLISTER BOOTH Trust Company
* Director of State December 21,
- ------------------------------------- Street Bank and 1998
MARSHALL N. CARTER Trust Company
* Director of State December 21,
- ------------------------------------- Street Bank and 1998
JAMES I. CASH, JR. Trust Company
* Director of State December 21,
- ------------------------------------- Street Bank and 1998
TRUMAN S. CASNER Trust Company
* Director of State December 21,
- ------------------------------------- Street Bank and 1998
NADER F. DAREHSHORI Trust Company
* Director of State December 21,
- ------------------------------------- Street Bank and 1998
ARTHUR L. GOLDSTEIN Trust Company
* Director of State December 21,
- ------------------------------------- Street Bank and 1998
DAVID P. GRUBER Trust Company
</TABLE>
II-7
<PAGE>
<TABLE>
<S> <C> <C>
SIGNATURE TITLE DATE
* Director of State December 21,
- ------------------------------------- Street Bank and 1998
CHARLES F. KAYE Trust Company
* Director of State December 21,
- ------------------------------------- Street Bank and 1998
JOHN M. KUCHARSKI Trust Company
* Director of State December 21,
- ------------------------------------- Street Bank and 1998
CHARLES R. LAMANTIA Trust Company
* Director of State December 21,
- ------------------------------------- Street Bank and 1998
DAVID B. PERINI Trust Company
* Director of State December 21,
- ------------------------------------- Street Bank and 1998
DENNIS J. PICARD Trust Company
* Director of State December 21,
- ------------------------------------- Street Bank and 1998
DAVID A. SPINA Trust Company
* Director of State December 21,
- ------------------------------------- Street Bank and 1998
DIANA CHAPMAN WALSH Trust Company
/s/ Nicholas A. Lopardo
*By _________________________________
NAME: NICHOLAS A. LOPARDO
ATTORNEY-IN-FACT
/s/ Maureen Scannell Bateman
*By _________________________________
NAME: MAUREEN SCANNELL BATEMAN
ATTORNEY-IN-FACT
</TABLE>
II-8
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF DOCUMENT
----------- -----------------------
<C> <S>
3.1 American Bar Association Members/State Street Collective
Trust, Declaration of Trust by State Street Bank and Trust
Company, amended and restated December 5, 1991, with
Exhibits 1-5 attached thereto, included as Exhibit 3.1 to
Registrant's Form S-1 Registration Statement No. 33-50080
and incorporated herein by reference thereto.
3.2 American Bar Association Members/State Street Collective
Trust, Amendment to Declaration of Trust by State Street
Bank and Trust Company dated July 31, 1995, with Exhibits 1-
9 attached thereto, included as Exhibit 3.2 to Registrants
Form S-1 Registration Statement No. 33-92120 and
incorporated herein by reference thereto.
3.3 American Bar Association Members/State Street Collective
Trust, Amended and Restated Fund Declarations dated as of
April 12, 1996 for each of the Aggressive Equity Fund, the
Balanced Fund, the Growth Equity Fund, the Index Equity
Fund, the Intermediate Bond Fund, the International Equity
Fund and the Value Equity Fund, included as Exhibit 3.3 to
Registrants Form S-1 Registration Statement No. 33-92120 and
incorporated herein by reference thereto.
3.4 American Bar Association Members/State Street Collective
Trust, Amended and Restated Fund Declaration, dated as of
April 11, 1997 for the Stable Asset Return Fund.
4.1 American Bar Association Members/State Street Collective
Trust, Fund Declaration for each Fund and the Structured
Portfolio Service, included in Exhibits No. 3.1, 3.2, 3.3 or
3.4.
5.1** Opinion of Paul, Weiss, Rifkind, Wharton & Garrison
regarding the legality of the Units registered.
5.2** Opinion of Goodwin, Procter & Hoar LLP regarding matters of
Massachusetts law.
10.1 Trust Agreement of the American Bar Association Members
Retirement Trust, amended and restated as of January 1,
1992, by and between the American Bar Retirement Association
and State Street Bank and Trust Company, included as Exhibit
10.1 to Registrant's Form 10-K for the year ended December
31, 1991 and incorporated herein by reference thereto.
10.2 Trust Agreement of the American Bar Association Members
Pooled Trust for Retirement Plans, amended and restated as
of January 1, 1992, by and between the American Bar
Retirement Association and State Street Bank and Trust
Company, included as Exhibit 10.2 to Registrant's Form 10-K
for the year ended December 31, 1991 and incorporated herein
by reference thereto.
10.3 Amendment to the American Bar Association Members Retirement
Trust dated July 31, 1995 by and between the American Bar
Retirement Association and State Street Bank and Trust
Company, included as Exhibit 10.3 to Registrants Form S-1
Registration Statement No. 33-92120 and incorporated herein
by reference thereto.
10.4 Amendment to the American Bar Association Members Pooled
Trust for Retirement Plans dated July 31, 1995 by and
between the American Bar Retirement Association and State
Street Bank and Trust Company, included as Exhibit 10.4 to
Registrants Form S-1 Registration Statement No. 33-92120 and
incorporated herein by reference thereto.
10.5 American Bar Association Members Retirement Plan--Basic Plan
Document No. 01, as approved by the Internal Revenue Service
on December 16, 1996.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF DOCUMENT
----------- -----------------------
<C> <S>
10.6 American Bar Association Members Defined Benefit Pension
Plan--Basic Plan Document No. 02 and related participation
agreements, included as Exhibit 10.4 to Pre-Effective
Amendment No. 1 to Registrant's Registration Statement on
Form S-1 No. 33-42274 and incorporated herein by reference
thereto.
10.7* Administrative and Investment Services Agreement effective
January 1, 1999, between State Street Bank and Trust Company
and the American Bar Retirement Association.
10.8 Investment Advisor Agreement effective as of January 1, 1992
by and between State Street Bank and Trust Company and
Capital Guardian Trust Company relating to the Growth Equity
Fund, included as Exhibit 10.6 to Registrant's Annual Report
on Form 10-K for the year ended December 31, 1991 and
incorporated herein by reference thereto.
10.9 Investment Advisor Agreement effective as of January 1, 1992
by and between State Street Bank and Trust Company and RCM
Capital Management relating to the Growth Equity Fund,
included as Exhibit 10.8 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1991 and
incorporated herein by reference thereto.
10.10 Investment Advisor Agreement effective as of January 1, 1992
by and between State Street Bank and Trust Company and
Capital Guardian Trust Company relating to the Aggressive
Equity Fund, included as Exhibit 10.9 to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1991 and
incorporated herein by reference thereto.
10.11 Investment Advisor Agreement effective as of January 1, 1992
by and between State Street Bank and Trust Company and Sit
Investment Associates, Inc. relating to the Aggressive
Equity Fund, included as Exhibit 10.10 to Registrant's
Annual Report on Form 10-K for the year ended December 31,
1991 and incorporated herein by reference thereto.
10.12 Investment Advisor Agreement effective as of October 1, 1992
by and between State Street Bank and Trust Company and
Miller, Anderson & Sherrerd relating to the Balanced Fund,
included as Exhibit 10.13 to Registrant's Form S-1
Registration Statement No. 33-50080 and incorporated herein
by reference thereto.
10.13 Investment Advisor Agreement effective as of November 1,
1992 by and between State Street Bank and Trust Company and
Lincoln Capital Management Company relating to the Balanced
Fund, included as Exhibit 10.14 to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1992 and
incorporated herein by reference thereto.
10.14 Investment Advisor Agreement effective as of June 30, 1997
by and between State Street Bank and Trust Company and
Capital Guardian Trust Company relating to the Balanced
Fund, included as Exhibit 10.1 to Registrant's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1997 and
incorporated herein by reference thereto.
10.15 Investment Advisor Agreement dated July 31, 1995 by and
between State Street Bank and Trust Company and Sanford
Bernstein & Co. Inc. relating to the Value Equity Fund,
included as Exhibit 10.17 to Registrants Form S-1
Registration Statement No. 33-92120 and incorporated herein
by reference thereto.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF DOCUMENT
----------- -----------------------
<C> <S> <C>
10.16 Plan of Merger effective as of September 5, 1995 merging
Blended Rate Fund with and into Enhanced Short Term
Investment Fund, included as Exhibit 10.18 to Registrants
Form S-1 Registration Statement No. 33-92120 and
incorporated herein by reference thereto.
10.17 Investor Advisor Agreement effective as of June 13, 1997 by
and between State Street Bank and Trust Company and Bankers
Trust Company relating to the Growth Equity Fund, included
as Exhibit 10.2 to the Registrant's Quarterly Report on Form
10-Q for the quarter ended June 30, 1997 and incorporated
herein by reference thereto.
23.1** Consent of Paul, Weiss, Rifkind, Wharton & Garrison,
included in the opinion filed as Exhibit 5.1.
23.2** Consent of Goodwin, Procter & Hoar LLP, included in the
opinion filed as Exhibit 5.2.
23.3* Consent of Price Waterhouse.
24.1* Power of Attorney.
27.1* Financial Data Schedule--Aggressive Equity Fund
27.2* Financial Data Schedule--Balanced Fund
27.3* Financial Data Schedule--Growth Equity Fund
27.4* Financial Data Schedule--Index Equity Fund
27.5* Financial Data Schedule--Intermediate Bond Fund
27.6* Financial Data Schedule--International Fund
27.7* Financial Data Schedule--Stable Asset Return Fund
27.8* Financial Data Schedule--Value Equity Fund
27.9* Financial Data Schedule--Structured Portfolio
Service Conservative Portfolio
27.10* Financial Data Schedule--Structured Portfolio
Service Moderate Portfolio
27.11* Financial Data Schedule--Structured Portfolio
Service Aggressive Portfolio
</TABLE>
- --------
*Filed herewith.
**To be filed by amendment.
<PAGE>
EXHIBIT 10.7
ADMINISTRATIVE AND INVESTMENT SERVICES AGREEMENT
between
State Street Bank and Trust Company
and the
American Bar Retirement Association
(As Amended and Restated)
November 9, 1998
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I. DEFINITIONS.................................................. 2
- ---------- -----------
1.01 "ABA"........................................................ 2
---
1.02 "ABA Members Collective Trust"............................... 2
----------------------------
1.03 "ABA Members Pension Plan"................................... 2
------------------------
1.04 "ABA Members Plans".......................................... 2
-----------------
1.05 "ABA Members Retirement Plan"................................ 2
---------------------------
1.06 "ABRA"....................................................... 2
----
1.07 "ABRA Program Services Unit"................................. 2
--------------------------
1.08 "Affiliate".................................................. 2
---------
1.09 "Aggregate Recordkeeping Plan"............................... 2
----------------------------
1.10 "Annual Marketing Plan"...................................... 2
---------------------
1.11 "Board"...................................................... 2
-----
1.12 "Business Day"............................................... 3
------------
1.13 "Cause"...................................................... 3
-----
1.14 "Closed Option".............................................. 3
-------------
1.15 "Code"....................................................... 3
----
1.16 "Communications Consultant".................................. 3
-------------------------
1.17 "Date of Termination"........................................ 3
-------------------
1.18 "Effective Date"............................................. 3
--------------
1.19 "Employer"................................................... 3
--------
1.20 "Employer Plan".............................................. 3
-------------
1.21 "Equitable".................................................. 3
---------
1.22 "ERISA"...................................................... 3
-----
1.23 "Extension Period"........................................... 3
----------------
1.24 "Fund"....................................................... 4
----
1.25 "Fund Declaration"........................................... 4
----------------
1.26 "Indemnified Person"......................................... 4
------------------
1.27 "Individual Recordkeeping Plan".............................. 4
-----------------------------
1.28 "Individually Designed Plan"................................. 4
--------------------------
1.29 "Investment Advisor"......................................... 4
------------------
1.30 "Investment Advisor Agreement"............................... 4
----------------------------
1.31 "Investment Advisor Recommendation".......................... 4
---------------------------------
1.32 "Investment Advisor Removal Recommendation".................. 4
-----------------------------------------
1.33 "Investment Manager"......................................... 4
------------------
1.34 "Investment Manager Agreement"............................... 4
----------------------------
1.35 "Investment Option".......................................... 5
-----------------
1.36 "Investment Option Termination Notice"....................... 5
------------------------------------
1.37 "Investor"................................................... 5
--------
1.38 "Major Vendor"............................................... 5
------------
1.39 "Master Trust"............................................... 5
------------
-i-
<PAGE>
1.40 "New Investment Option"...................................... 5
---------------------
1.41 "New Investment Option Notice"............................... 5
----------------------------
1.42 "Non-Collective Trust Investment Option" or
-------------------------------------- --
"NCT Investment Option"...................................... 5
---------------------
1.43 "Notice of Termination"...................................... 5
---------------------
1.44 "Participant"................................................ 6
-----------
1.45 "Plan"....................................................... 6
----
1.46 "Pooled Trust"............................................... 6
------------
1.47 "Principal Protected Product"................................ 6
---------------------------
1.48 "Principal Protected Product Standards"...................... 6
-------------------------------------
1.49 "Prior Plan Account"......................................... 6
------------------
1.50 "Program".................................................... 6
-------
1.51 "Program Data and Records"................................... 7
------------------------
1.52 "Prospectus"................................................. 7
----------
1.53 "Qualified Bar Association".................................. 7
-------------------------
1.54 "Qualified Employer"......................................... 7
------------------
1.55 "Real Estate Option"......................................... 7
------------------
1.56 "Renewal Date"............................................... 7
------------
1.57 "Self-Managed Option"........................................ 7
-------------------
1.58 "Service Standards".......................................... 7
-----------------
1.59 "State Street"............................................... 8
------------
1.60 "State Street Software"...................................... 8
---------------------
1.61 "Transfer Completion Date"................................... 8
------------------------
1.62 "Trustee".................................................... 8
-------
1.63 "Trust"...................................................... 8
-----
ARTICLE II. THE ABA MEMBERS COLLECTIVE TRUST AND INVESTMENT OPTIONS
- ----------- -------------------------------------------------------
UNDER THE ABA MEMBERS COLLECTIVE TRUST..................... 8
--------------------------------------
2.01 Establishment and Maintenance................................ 8
-----------------------------
2.02 Investment Advisors.......................................... 8
-------------------
2.03 Monitoring of Investment Advisors............................ 9
---------------------------------
2.04 Investment Advisor Recommendation............................ 9
---------------------------------
2.05 Investment Advisor Removal Recommendation by ABRA............ 9
-------------------------------------------------
2.06 Investment Advisor Removal by State Street................... 10
------------------------------------------
2.07 Amendments to or Mergers Under ABA Members Collective Trust.. 10
-----------------------------------------------------------
2.08 Consideration of State Street Regarding Funds................ 11
---------------------------------------------
ARTICLE III. THE TRUSTS AND NCT INVESTMENT OPTIONS UNDER THE TRUSTS..... 11
- ------------ ------------------------------------------------------
3.01 Trustee of Trusts............................................ 11
-----------------
3.02 NCT Investment Options....................................... 11
----------------------
3.03 Investment Managers.......................................... 12
-------------------
3.04 Required Investment Manager Termination...................... 12
---------------------------------------
3.05 Optional Investment Manager Termination...................... 13
---------------------------------------
3.06 Requirements................................................. 13
------------
3.07 Temporary Closure of an NCT Investment Option................ 14
---------------------------------------------
3.08 Establishment of NCT Investment Options...................... 14
---------------------------------------
-ii-
<PAGE>
ARTICLE IV. ALL INVESTMENT OPTIONS..................................... 14
- ----------- -----------------------
4.01 New Investment Options....................................... 14
----------------------
4.02 Exclusive Management of Principal Protected Products......... 15
----------------------------------------------------
4.03 Consultant................................................... 17
----------
4.04 Compliance with Laws......................................... 17
--------------------
4.05 Termination of Investment Options............................ 17
---------------------------------
4.06 General Considerations of State Street....................... 19
--------------------------------------
ARTICLE V. MAINTENANCE OF TRUSTS AND PLANS............................. 19
- ---------- -------------------------------
5.01 Necessary Amendments to Trusts and ABA Members Plans
----------------------------------------------------
and Trusts................................................... 19
----------
5.02 Other Amendments to the Trusts and ABA Members Plans......... 19
----------------------------------------------------
5.03 Notice to Employers of Amendments............................ 20
---------------------------------
5.04 Forms........................................................ 20
-----
5.05 Assistance to Employers...................................... 21
-----------------------
5.06 Plan Interpretation.......................................... 21
-------------------
ARTICLE VI. SERVICES WITH RESPECT TO INVESTMENT OPTIONS................. 21
- ---------- -------------------------------------------
6.01 Investment Records........................................... 21
------------------
6.02 Contributions................................................ 21
-------------
6.03 Transfers.................................................... 21
---------
6.04 Telephone Service............................................ 22
-----------------
6.05 Internet Services............................................ 22
-----------------
6.06 Assistance with Respect to Investment Options................ 22
---------------------------------------------
6.07 Recorded Information Concerning Investment Options........... 22
--------------------------------------------------
6.08 Communication with Investors................................. 23
----------------------------
ARTICLE VII. SERVICES WITH RESPECT TO TRUSTS AND PLANS.................. 23
- ----------- -----------------------------------------
7.01 Plan Records................................................. 23
------------
7.02 Additional Records for Individual Recordkeeping Plans........ 23
-----------------------------------------------------
7.03 Additional Records For Plans Under ABA Members Pension Plan.. 23
-----------------------------------------------------------
7.04 Distributions and Withdrawals................................ 24
-----------------------------
7.05 Tax Penalties on Distributions............................... 24
------------------------------
7.06 State Street as Payor........................................ 25
---------------------
7.07 Account Statements........................................... 25
------------------
7.08 Forms 5500, Annual Reports and Other Information............. 25
------------------------------------------------
7.09 Section 415 Monitoring....................................... 26
----------------------
7.10 Section 401(k) and 401(m) Testing............................ 26
---------------------------------
7.11 Written Communications to Employers and Investors............ 26
-------------------------------------------------
7.12 Inquiries and Complaints..................................... 27
------------------------
7.13 Notices and Elections by Participants........................ 27
-------------------------------------
7.14 Address for Communications to Participants................... 27
------------------------------------------
7.15 Year 2000 Compliance......................................... 27
--------------------
7.16 Plan Administrator........................................... 28
------------------
-iii-
<PAGE>
ARTICLE VIII. MARKETING SERVICES TO BE PROVIDED BY STATE STREET......... 29
- ------------- -------------------------------------------------
8.01 Marketing Requirements....................................... 29
----------------------
8.02 Marketing Reports............................................ 29
-----------------
8.03 State Bar and Local Endorsement Program...................... 29
---------------------------------------
ARTICLE IX. MARKETING SUPPORT TO BE PROVIDED BY ABRA.................. 30
- ----------- ----------------------------------------
9.01 Endorsement.................................................. 30
-----------
9.02 Bar Association Meetings..................................... 30
------------------------
9.03 Workshops and Seminars....................................... 30
-----------------------
9.04 Introductions................................................ 30
-------------
9.05 Inclusion in ABA Mailings.................................... 30
-------------------------
9.06 Access to ABA Research....................................... 30
-----------------------
9.07 ABA Membership Lists......................................... 30
--------------------
9.08 ABA Disclaimer............................................... 31
--------------
9.09 Payment of ABRA's Expenses................................... 31
--------------------------
ARTICLE X. REPORTS TO ABRA.............................................. 31
- --------- ---------------
10.01 Investment Option Reports.................................... 31
-------------------------
10.02 Fee Reports.................................................. 31
-----------
10.03 Trust Participation Reports.................................. 31
---------------------------
10.04 Transfer Reports............................................. 31
----------------
10.05 Service Reports.............................................. 31
---------------
10.06 Expense Reports.............................................. 32
---------------
10.07 Annual Reports............................................... 32
--------------
10.08 Timing of Reports............................................ 32
-----------------
ARTICLE XI. REVIEW OF COMMUNICATIONS MATERIAL
- ---------- ---------------------------------
AND COMMUNICATIONS BY ABRA.................................. 32
--------------------------
11.01 Communications Consultant.................................... 32
-------------------------
11.02 ABRA's Review of State Street Communication Material......... 32
----------------------------------------------------
11.03 Communications by ABRA....................................... 33
----------------------
ARTICLE XII. ADDITIONAL AGREEMENTS AND COVENANTS OF STATE STREET........ 33
- ------------ ---------------------------------------------------
12.01 ABRA Program Services Unit................................... 33
--------------------------
12.02 Financial Condition and Organization......................... 33
------------------------------------
12.03 Insurance Certification...................................... 34
-----------------------
12.04 Approval of Major Vendors.................................... 34
-------------------------
12.05 Indemnification of ABRA by Major Vendors..................... 34
----------------------------------------
12.06 Non-Competition.............................................. 34
---------------
12.07 Confidentiality.............................................. 35
---------------
12.08 Copyright of Trusts and ABA Members Plans.................... 35
-----------------------------------------
12.09 Maintenance and Disposition of Program Data and Records...... 36
-------------------------------------------------------
-iv-
<PAGE>
12.10 Rights to Software Following Termination..................... 36
----------------------------------------
12.11 Investment Advisor Agreements................................ 38
-----------------------------
12.12 No Directed Brokerage........................................ 38
---------------------
12.13 Notice of Change in Status or Regulatory Action.............. 39
-----------------------------------------------
12.14 Performance by Affiliates.................................... 39
-------------------------
ARTICLE XIII. FEES AND EXPENSES......................................... 39
- ------------ -----------------
13.01 State Street's Fees.......................................... 39
-------------------
13.02 ABRA's Fees.................................................. 40
-----------
13.03 Additional Services.......................................... 40
-------------------
13.04 Expenses..................................................... 40
--------
ARTICLE XIV. LIMITATION OF LIABILITY AND INDEMNIFICATION................ 42
- ----------- -------------------------------------------
14.01 Limitation of Liability for Instructions from Participants,
----------------------------------------------------------
Employers or Investors....................................... 42
----------------------
14.02 Limitation of Liability For Instructions From ABRA........... 42
--------------------------------------------------
14.03 Limitation of Liability for Acts of Third Parties............ 42
-------------------------------------------------
14.04 Indemnification.............................................. 42
---------------
14.05 Counsel for Indemnified Persons.............................. 43
-------------------------------
14.06 Contribution................................................. 43
------------
14.07 Enforcement of Rights........................................ 43
---------------------
14.08 Supplemental Indemnification................................. 43
----------------------------
14.09 Interests of ABA Members Collective Trust, Trusts and ABA
---------------------------------------------------------
Members Plans................................................ 44
-------------
14.10 Payment of Expenses.......................................... 44
-------------------
ARTICLE XV. TERMINATION OF AGREEMENT.................................... 45
- ---------- ------------------------
15.01 Termination by State Street.................................. 45
---------------------------
15.02 Termination For Cause........................................ 45
---------------------
15.03 Termination by ABRA.......................................... 45
-------------------
15.04 Consent to Termination....................................... 45
----------------------
15.05 Notice of Termination........................................ 46
---------------------
15.06 Extension Period............................................. 46
----------------
15.07 Conversion................................................... 46
----------
15.08 Transfer to Successor Recordkeeper and Trustee............... 46
----------------------------------------------
15.09 Transfer of Program Assets................................... 47
--------------------------
-v-
<PAGE>
ARTICLE XVI. MISCELLANEOUS.............................................. 47
- ----------- -------------
16.01 Service Standards............................................ 47
-----------------
16.02 Plan Disqualification........................................ 47
---------------------
16.03 Agents of ABRA............................................... 47
--------------
16.04 Good Faith................................................... 47
----------
16.05 Compliance with Laws......................................... 48
--------------------
16.06 Audits....................................................... 48
------
16.07 Amendment.................................................... 48
---------
16.08 Assignment................................................... 48
----------
16.09 Choice of Law................................................ 49
-------------
16.10 Arbitration of Disputes...................................... 49
-----------------------
16.11 Notice....................................................... 50
------
16.12 Severability of Provisions................................... 50
--------------------------
16.13 Waiver....................................................... 50
------
16.14 Captions..................................................... 51
--------
16.15 Action by ABRA............................................... 51
--------------
16.16 Construction of Terms........................................ 51
---------------------
16.17 Execution in Counterparts.................................... 51
-------------------------
16.18 Entire Agreement............................................. 51
----------------
16.19 Authority.................................................... 51
---------
-vi-
<PAGE>
THIS ADMINISTRATIVE AND INVESTMENT SERVICES AGREEMENT (the "Agreement") is
effective as of the first day of January, 1999, between STATE STREET BANK AND
TRUST COMPANY ("State Street") and the AMERICAN BAR RETIREMENT ASSOCIATION
("ABRA") as an amendment and restatement of the Administrative and Investment
Services Agreement (the "Original Agreement") dated January 1, 1992 between
State Street and ABRA.
W I T N E S S E T H :
WHEREAS, ABRA sponsors the American Bar Association Members Retirement
Program (the "Program") under which it has established the American Bar
Association Members Defined Benefit Pension Plan (the "ABA Members Pension
Plan"), the American Bar Association Members Retirement Plan (the "ABA Members
Retirement Plan"), the American Bar Association Members Retirement Trust (the
"Master Trust") and the American Bar Association Members Pooled Trust for
Retirement Plans (the "Pooled Trust"); and
WHEREAS, the Program has been marketed and administered pursuant to an
Administrative Services Agreement dated January 1, 1992 between ABRA and State
Street; and
WHEREAS, pursuant to the Original Agreement, effective as of January
1, 1992, ABRA amended the ABA Members Pension Plan and the ABA Members
Retirement Plan and amended and restated the Master Trust and the Pooled Trust
to reflect, among other changes, the appointment of State Street as sole
trustee; and
WHEREAS, pursuant to the Original Agreement State Street has
established the American Bar Association Members/State Street Collective Trust
("ABA Members Collective Trust"), consisting of certain Investment Options; and
WHEREAS, pursuant to Section 15.01 of the Original Agreement, ABRA and
State Street each have the right to terminate the Original Agreement as of the
first day of any calendar quarter after December 31, 1998 by notice to the other
party at least one year before the Date of Termination (as defined therein); and
WHEREAS, ABRA and State Street desire to renew their relationship
pursuant to this Agreement as an amendment and restatement of the Original
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and undertakings, and subject to the terms and
conditions, hereinafter set forth, the parties hereto agree as follows:
<PAGE>
ARTICLE I. DEFINITIONS
--------- -----------
1.01 "ABA" means the American Bar Association and any successor.
---
1.02 "ABA Members Collective Trust" means the American Bar Association
----------------------------
Members/State Street Collective Trust, a group trust established pursuant to a
Declaration of Trust dated as of August 8, 1991, as amended and restated October
17, 1991 and November 18, 1991, as further amended and in effect from time to
time, and maintained by State Street for the purpose of providing certain
Investment Options to Investors under the Program.
1.03 "ABA Members Pension Plan" means the American Bar Association
------------------------
Members Defined Benefit Pension Plan, as amended and in effect from time to
time.
1.04 "ABA Members Plans" means the ABA Members Pension Plan and the
-----------------
ABA Members Retirement Plan, collectively.
1.05 "ABA Members Retirement Plan" means the American Bar Association
---------------------------
Members Retirement Plan, as amended and in effect from time to time.
1.06 "ABRA" means the American Bar Retirement Association, an
----
Illinois not-for-profit corporation, and any successor through which qualified
retirement plans are offered to Qualified Employers.
1.07 "ABRA Program Services Unit" means the program services unit of
--------------------------
State Street described in Section 12.01.
1.08 "Affiliate" means any person or entity, including any general
---------
partnership, limited partnership, corporation, joint venture, business trust,
limited liability partnership, limited liability company or similar
organization, that, directly or indirectly, controls, is controlled by, or is
under common control with State Street.
1.09 "Aggregate Recordkeeping Plan" means (a) any Employer Plan
----------------------------
established pursuant to the ABA Members Pension Plan except as to any Prior Plan
Accounts under such Employer Plan or (b) any Individually Designed Plan with
respect to which the Trustee has not agreed to maintain separate accounts for
the Participants.
1.10 "Annual Marketing Plan" means the marketing plan submitted by
---------------------
State Street to ABRA pursuant to Section 8.01, as such plan is amended and in
effect from time to time.
1.11 "Board" means the Board of Directors of ABRA, or the comparable
-----
governing body of any successor thereto.
-2-
<PAGE>
1.12 "Business Day" means any day on which the New York Stock
------------
Exchange is open for trading. Any other reference in this Agreement to a "day,"
"week," "quarter," or "year" shall mean, respectively, a calendar day, a
calendar week, a calendar quarter or a calendar year.
1.13 "Cause" means behavior by either party to this Agreement that is
-----
described in Section 15.03 which gives the other party certain rights with
respect to this Agreement.
1.14 "Closed Option" means any investment to which Investors are no
-------------
longer permitted to make contributions or transfers (by agreement between ABRA
and State Street), but which continues to constitute an investment under the
Program, including, as of the Renewal Date, the Real Estate Option.
1.15 "Code" means the Internal Revenue Code of 1986, as amended and
----
in effect from time to time.
1.16 "Communications Consultant" means a person or organization
-------------------------
engaged by State Street pursuant to Section 11.01 to provide communications
services and advice regarding the Program services, reports and communications
under this Agreement, including Sections 5.04, 6.07, 6.08,7.04 and 7.11.
1.17 "Date of Termination" means the date specified in the Notice of
-------------------
Termination delivered pursuant to Section 15.01 as the date as on which this
Agreement shall terminate.
1.18 "Effective Date" means January 1, 1992.
--------------
1.19 "Employer" means (a) any Qualified Employer that maintains a
--------
Plan and (b) any successor to any such Qualified Employer that agrees, or is
required by operation of law, to continue the Plan.
1.20 "Employer Plan" means any employee benefit plan established and
-------------
maintained by a Qualified Employer pursuant to either of the ABA Members Plans.
1.21 "Equitable" means The Equitable Life Assurance Society of The
---------
United States, which is, as of the date of the execution of this Agreement, a
New York life insurance company, and any successor thereto.
1.22 "ERISA" means the Employee Retirement Income Security Act of
-----
1974, as amended and in effect from time to time.
1.23 "Extension Period" means the period immediately following the
----------------
Date of Termination during which State Street, at the written request of ABRA,
is obligated to perform its obligations and is entitled to exercise its rights
under this Agreement pursuant to Sections 15.05 and 15.06.
-3-
<PAGE>
1.24 "Fund" means any Investment Option that is a collective
----
investment fund established from time to time under the ABA Members Collective
Trust.
1.25 "Fund Declaration" means any separate declaration executed by
----------------
the Trustee, pursuant to Section 3.01 of the ABA Members Collective Trust, for
the purpose of establishing a Fund thereunder.
1.26 "Indemnified Person" means any person or entity entitled to
------------------
indemnification pursuant to Sections 12.05 and 14.04.
1.27 "Individual Recordkeeping Plan" means (a) any Employer Plan
-----------------------------
established pursuant to the ABA Members Retirement Plan, (b) any Employer Plan
established pursuant to the ABA Members Pension Plan but only with respect to
Prior Plan Accounts and (c) any Individually Designed Plan with respect to which
the Trustee has agreed to maintain separate accounts for Participants.
1.28 "Individually Designed Plan" means any employee benefit plan
--------------------------
(other than an Employer Plan) that is established and maintained by a Qualified
Employer, and with respect to which the Pooled Trust has been adopted.
1.29 "Investment Advisor" means any person or entity (other than
------------------
State Street) engaged by State Street pursuant to Section 2.02 to make
recommendations regarding the acquisition or disposition of assets held in a
Fund.
1.30 "Investment Advisor Agreement" means any agreement entered into
----------------------------
pursuant to Section 2.02 between State Street, as trustee of the ABA Members
Collective Trust, and an Investment Advisor.
1.31 "Investment Advisor Recommendation" means any written notice
---------------------------------
delivered by ABRA pursuant to Section 2.04 recommending a new Investment
Advisor, or a reallocation of assets among existing Investment Advisors, with
respect to a Fund.
1.32 "Investment Advisor Removal Recommendation" means any written
-----------------------------------------
notice delivered by ABRA pursuant to Section 2.05 recommending the removal of an
Investment Advisor.
1.33 "Investment Manager" means any person or entity (which may be
------------------
State Street) engaged to manage the assets of an NCT Investment Option or a
Closed Option pursuant to Section 3.03 and the applicable provisions of the
Trusts.
1.34 "Investment Manager Agreement" means any agreement entered into
----------------------------
pursuant to Section 3.03 with an Investment Manager.
-4-
<PAGE>
1.35 "Investment Option" means any investment offered to, or obtained
-----------------
for, Investors under the Program, including, without limitation, the Self-
Managed Option and any other NCT Investment Option established from time to time
pursuant to Section 3.02(b), but excluding the Closed Options.
1.36 "Investment Option Termination Notice" means a written notice
------------------------------------
delivered by ABRA or State Street pursuant to Section 4.05 recommending that (a)
an Investment Option or Closed Option cease to be available under the Program or
(b) an Investment Option become a Closed Option.
1.37 "Investor" means (a) the Participant, in the case of a Plan for
--------
which the Participant is authorized to direct the investment in, and allocation
among, Investment Options of the amounts attributable to such Participant's
accounts in the Plan (or applicable portion thereof) and (b) in the case of a
Plan (or portion thereof) not described in subsection (a) of this Section, the
person or entity having investment discretion with respect to the investment in,
and allocation among, Investment Options of the assets of such Plan (or
applicable portion thereof).
1.38 "Major Vendor" means any person or entity providing material
------------
services to the Program that State Street has engaged for the benefit of the
Program to provide customer services, marketing services, Plan or Participant
recordkeeping services, communications services, auditing or accounting
services, legal services or actuarial services.
1.39 "Master Trust" means the trust maintained under the ABA Members
------------
Plans, known as of the Renewal Date as the American Bar Association Members
Retirement Trust, as amended and in effect from time to time.
1.40 "New Investment Option" means any Investment Option that is not
---------------------
available under the Program as of the Renewal Date.
1.41 "New Investment Option Notice" means a written notice delivered
----------------------------
by ABRA or State Street pursuant to (i) Section 4.01 proposing that a New
Investment Option be provided as (a) an additional Fund established under the
ABA Members Collective Trust or (b) an additional NCT Investment Option
available under the Trusts or (ii) Section 4.05(c) proposing that a Fund become
an NCT Investment Option.
1.42 "Non-Collective Trust Investment Option" or "NCT Investment
-------------------------------------- --------------
Option" means any Investment Option that is not a Fund and is made available
- ------
under the Program pursuant to Section 3.02.
1.43 "Notice of Termination" means a written notice delivered by
---------------------
State Street or by ABRA pursuant to Section 15.01 declaring an intent to
terminate this Agreement.
1.44 "Participant" means any person for whom benefits under a Plan
-----------
are provided under the Trusts including, where the context so requires, (a) a
beneficiary designated under the
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<PAGE>
terms of a Plan to receive a benefit after the death of a Participant and (b) a
person designated by an Employer in writing to the Trustee as having been
determined by the Employer to be an alternate payee entitled to benefits under
the Trust in accordance with a qualified domestic relations order as defined in
Section 414(p) of the Code.
1.45 "Plan" means an Employer Plan, an Individually Designed Plan, or
----
both, as the case may be.
1.46 "Pooled Trust" means the trust maintained under the Program to
------------
hold assets of Individually Designed Plans, known as of the Renewal Date as the
American Bar Association Members Pooled Trust for Retirement Plans, as amended
and in effect from time to time.
1.47 "Principal Protected Product" means any Investment Option now or
---------------------------
hereafter available under the Program (including, as of the Renewal Date, the
Stable Asset Return Fund) that:
(a) is designated as a Principal Protected Product by agreement
between State Street and ABRA; or
(b) (i) is valued based on book value accounting principles,
(ii) provides a guarantee of principal (including, at any time where such
guaranteed principal is or may be withdrawn, a guarantee of remaining
principal), (iii) provides a reasonable expectation to an Investor that
principal will not be impaired or (iv) consists of a pool of assets representing
underlying investments with a weighted average maturity of one year or less.
1.48 "Principal Protected Product Standards" means the investment-
-------------------------------------
performance and credit-quality benchmarks established by ABRA and State Street
with respect to each Principal Protected Product offered or made available under
the Program, as set forth in Appendix B, as amended from time to time, pursuant
----------
to Section 4.02.
1.49 "Prior Plan Account" means any account established and
------------------
maintained for amounts attributable to employer contributions under another
qualified plan and transferred to the Trustee of the Master Trust in accordance
with applicable provisions of an Employer Plan under the ABA Members Pension
Plan.
1.50 "Program" means the program sponsored by ABRA for Qualified
-------
Employers that provides for administrative, recordkeeping, custodial and
investment services and includes the ABA Members Plans, the Trusts, the
Investment Options and the Closed Options, known as of the Renewal Date as the
American Bar Association Members Retirement Program, as amended from time to
time.
1.51 "Program Data and Records" means (a) all Participant, Plan,
------------------------
Employer, Investor and Trust records acquired by, provided to, created by or
maintained by State Street pursuant to this Agreement, (b) all data collected or
compiled by State Street under the Annual
-6-
<PAGE>
Marketing Plan, (c) all information made available to State Street pursuant to
Article IX, (d) all reports compiled by State Street pursuant to, or otherwise
in the course of performing its obligations under, this Agreement, (e) all
reports or other information made available to State Street by any party engaged
to provide services to the Program (including the consultant engaged pursuant to
Section 4.03) and (f) all data, records and other information derived from any
of the foregoing.
1.52 "Prospectus" means the prospectus included within the most
----------
recent registration statement, as amended from time to time, filed by State
Street with the Securities and Exchange Commission with respect to the ABA
Members Collective Trust.
1.53 "Qualified Bar Association" means an organization that is
-------------------------
represented in the House of Delegates of the ABA.
1.54 "Qualified Employer" means (a) any sole practitioner,
------------------
partnership, corporation, limited liability partnership, limited liability
company or association engaged in the practice of law, provided that the sole
practitioner or at least one partner of the partnership, one shareholder of the
corporation or one member of the limited liability partnership or company is a
member or associate of the ABA or of a Qualified Bar Association, (b) the ABA,
(c) any Qualified Bar Association, and (d) any organization that does not engage
in the practice of law but is closely associated with the legal profession,
which receives the approval of ABRA, and which has as an owner or a member of
its governing board a member or associate of the ABA.
1.55 "Real Estate Option" means the Investment Option held under the
------------------
Equitable Separate Account Number 30 previously made available under the Program
by Equitable under Group Annuity Contract No. AC2550 issued by the Equitable
Life Assurance Society of the United States.
1.56 "Renewal Date" means January 1, 1999.
------------
1.57 "Self-Managed Option" means the Investment Option available
-------------------
under the Trusts and maintained in accordance with Section 3.02(a), pursuant to
which an Investor may designate the investment of assets of a Plan or of a
Participant's account, as the case may be, in securities selected by such
Investor.
1.58 "Service Standards" means those identified minimum performance
-----------------
standards established by agreement between State Street and ABRA and set forth
in Appendix A, as amended from time to time pursuant to Section 16.01.
----------
1.59 "State Street" means State Street Bank and Trust Company, a
------------
trust company organized and existing under the laws of The Commonwealth of
Massachusetts, and any entity that succeeds to State Street's obligations under
this Agreement by operation of law or to which such obligations are otherwise
assigned with the consent of ABRA.
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<PAGE>
1.60 "State Street Software" means any and all (i) software systems
---------------------
and enhancements thereto developed and maintained by State Street in connection
with or for use of the Program, and (ii) modifications or enhancements developed
by State Street to software obtained from outside vendors for use in connection
with the Program.
1.61 "Transfer Completion Date" means the date as of which ABRA or a
------------------------
third party designated by it assumes responsibility for State Street's
obligations under this Agreement, which shall be the later of the Date of
Termination or the end of the Extension Period.
1.62 "Trustee" means the trustee of the Master Trust and the Pooled
-------
Trust from time to time.
1.63 "Trust" means the Master Trust, the Pooled Trust, and "Trusts"
----- ------
means both the Master Trust and the Pooled Trust.
ARTICLE II. THE ABA MEMBERS COLLECTIVE TRUST AND INVESTMENT OPTIONS UNDER THE
---------- -----------------------------------------------------------------
ABA MEMBERS COLLECTIVE TRUST
-----------------------------
2.01 Establishment and Maintenance. State Street has established and
-----------------------------
shall maintain in accordance with this Agreement the ABA Members Collective
Trust with exclusive management and control over the assets thereof. The ABA
Members Collective Trust shall include as of the Renewal Date, the Stable Asset
Return Fund, the Index Equity Fund, the Balanced Fund, the Growth Fund, the
Value Fund, the Aggressive Equity Fund, the International Equity Fund and the
Structured Portfolio Service, and shall include such other Funds as may be
established from time to time pursuant to this Article II and Article IV.
2.02 Investment Advisors. State Street may engage one or more
-------------------
Investment Advisors for each of the Funds only in accordance with the following
procedures and subject to the provisions of Section 4.02:
(a) Each Investment Advisor, if any, shall be identified in the
appropriate Fund Declaration or attachment thereto;
(b) State Street shall enter into an Investment Advisor
Agreement with each Investment Advisor, which Investment Advisor Agreement shall
include, among other things (i) representations that the Investment Advisor is
registered or exempt under, or excluded from, the Investment Advisers Act of
1940, as amended, and is in the business of acting as a fiduciary with respect
to assets of various retirement plans and trusts (ii) an acknowledgment in
writing that the Investment Advisor is a fiduciary as defined in ERISA with
respect to the applicable assets of the Plans and the Trusts, and each such
agreement may include supplemental guidelines governing the Investment Advisor's
activities;
(c) If more than one Investment Advisor is engaged to advise
State Street with respect to a single Fund, each applicable Investment Advisor
Agreement shall
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<PAGE>
designate the portion of the assets of, contributions and transfers to,
and withdrawals and transfers from, such Fund to be allocated to each such
Investment Advisor; and
(d) An Investment Advisor shall not be permitted to take any
action with respect to any Fund that, in the reasonable opinion of State Street,
would cause the Fund to cease to qualify as a fund maintained by a bank within
the meaning of (i) Section 3(c)(11) of the Investment Company Act of 1940, as
amended, and any successor provision thereto, and (ii) Section 3(a)(2) of the
Securities Act of 1933, as amended, and any successor provision thereto.
2.03 Monitoring of Investment Advisors. As sponsor of the Program
---------------------------------
and on behalf of Participants, Employers and Investors, ABRA shall be entitled
to monitor the performance of each Investment Advisor and the relationship
between State Street and each Investment Advisor.
2.04 Investment Advisor Recommendation. As sponsor of the Program
---------------------------------
and on behalf of Participants, Employers and Investors, ABRA may, at any time
and from time to time, deliver to State Street an Investment Advisor
Recommendation recommending that (a) the assets in a Fund be reallocated among
existing Investment Advisors or (b) subject to Section 4.02, an additional
Investment Advisor or Advisors be appointed with respect to a Fund (in which
case, such Investment Advisor Recommendation shall also indicate the suggested
allocation of assets among the Investment Advisors to such Fund). State Street
shall give full consideration to each Investment Advisor Recommendation from
ABRA and shall respond to ABRA, no later than thirty (30) days after the date of
State Street's receipt of such Investment Advisor Recommendation, as to whether,
in what manner, and on what time frame such appointment or reallocation will be
effected and the reasons for such response.
2.05 Investment Advisor Removal Recommendation by ABRA. As sponsor
-------------------------------------------------
of the Program and on behalf of Participants, Employers and Investors, ABRA may,
at any time and from time to time, deliver to State Street an Investment Advisor
Removal Recommendation with respect to an Investment Advisor. State Street shall
give full consideration to each Investment Advisor Removal Recommendation from
ABRA and shall respond to ABRA, no later than thirty (30) days after the date of
State Street's receipt of such Investment Advisor Removal Recommendation,
indicating whether, in what manner and during what time frame such action will
be taken with respect to such Investment Advisor and the reasons therefor. If
ABRA indicates in such Investment Advisor Removal Recommendation that ABRA
believes such Investment Advisor has engaged in willful misconduct, gross
negligence or a continuing pattern of negligence, then State Street's response
pursuant to the preceding sentence shall be given to ABRA within five (5)
Business Days.
2.06 Investment Advisor Removal by State Street. Subject to
------------------------------------------
applicable laws and regulations, to its reasonable administrative capabilities
and other responsibilities under the Program and to the provisions of the
respective Investment Advisor Agreement, in the absence of an Investment Advisor
Removal Recommendation from ABRA, State Street may remove any
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<PAGE>
Investment Advisor thirty (30) days after written notice is received by ABRA
explaining the reasons for the removal; provided, however, that
(a) State Street may remove an Investment Advisor with concurrent
notice to ABRA if State Street reasonably determines that such urgent action is
necessary;
(b) State Street may not remove an Investment Advisor without engaging
a new Investment Advisor or allocating such assets to an existing Investment
Advisor; and
(c) Upon receipt of notice pursuant to this Section, ABRA may make
suggestions or comments regarding State Street's action or proposed action, and
State Street will give full consideration thereto.
2.07 Amendments to or Mergers Under ABA Members Collective Trust.
-----------------------------------------------------------
(a) State Street shall make all amendments to the ABA Members
Collective Trust and agreements thereunder that are necessary to (i) comply with
State Street's reasonable administrative requirements, (ii) permit Funds to be
offered, made available, maintained, merged, divided or terminated, (iii) comply
with changes in the ABA Members Plans, the Trusts and applicable laws and
regulations, and (iv) enable State Street to manage and control the ABA Members
Collective Trust and the Funds established thereunder in accordance with the
terms of this Agreement and the ABA Members Collective Trust. In making any
amendment to the ABA Members Collective Trust, State Street shall exercise its
reasonable judgment as to the content and timing of such amendment.
(b) State Street shall furnish to ABRA thirty (30) days prior to
adoption of any amendment made pursuant to Section 7.01 of the ABA Members
Collective Trust or any amendment to a Fund Declaration made pursuant to Section
3.03(a) of the ABA Members Collective Trust, (i) written notice of the reasons
for any such amendment and (ii) copies of any such amendment; provided, however,
that State Street may make any such amendment, with concurrent notice to ABRA if
State Street reasonably determines that such urgent amendment is necessary or
appropriate. ABRA may make comments and suggestions in connection with any such
amendment, and State Street shall give full consideration thereto. State Street
shall, to the extent necessary, submit such amendments to the Internal Revenue
Service and other governmental agencies for approval and shall provide ABRA with
copies of the submissions at least thirty (30) days prior to submission and
copies of such approvals and other responses promptly after receipt thereof.
ABRA shall offer timely assistance to State Street in making such submissions
and obtaining such approvals and may make comments or suggestions regarding such
submissions, and State Street shall give full consideration thereto.
(c) In the event that State Street exercises its authority to
terminate a Fund, to divide a Fund into multiple Funds or to merge two Funds
pursuant to Sections 7.02 and 7.03, respectively, of the ABA Members Collective
Trust, State Street shall notify ABRA thereof
-10-
<PAGE>
pursuant to the notice procedures in Section 2.07(b) for amendments; provided,
however, that sixty (60) days notice shall be substituted for thirty (30) days
notice; and provided, further, that New Investment Options may be made
available, and Investment Options may be terminated, only in accordance with
Article IV. Nothing in this Section shall prevent ABRA from proposing, in
accordance with Section 3.02 and Article IV, that a Fund in the process of
termination or merger become an NCT Investment Option.
2.08 Consideration of State Street Regarding Funds. In considering
---------------------------------------------
an Investment Advisor Recommendation under Section 2.04, an Investment Advisor
Removal Recommendation under Section 2.05 or suggestions or comments under
Section 2.07, or in considering or taking any other action contemplated by
Article II or otherwise with respect to an Investment Advisor, State Street, in
the exercise of its discretion with respect to such action, shall consult with
ABRA as sponsor of the Program and on behalf of Participants, Employers and
Investors, and shall give full consideration to any recommendation delivered
pursuant to Article II, as well as to opinions, information, questions and
concerns presented by ABRA. State Street may also give consideration to, among
other factors, (a) the requirements of the ABA Members Collective Trust, (b)
legal and regulatory matters, (c) State Street's other responsibilities under
the Program in its capacity as trustee of the ABA Members Collective Trust and
as Trustee and (d) State Street's reasonable administrative capabilities.
ARTICLE III. THE TRUSTS AND NCT INVESTMENT OPTIONS UNDER THE TRUSTS
------------ ------------------------------------------------------
3.01 Trustee of Trusts. ABRA shall retain State Street, and State
-----------------
Street shall serve, as sole Trustee until the Transfer Completion Date.
3.02 NCT Investment Options. NCT Investment Options shall be
----------------------
established or made available as follows:
(a) State Street shall maintain the Self-Managed Option under the
applicable provisions of the Trusts, which shall constitute an Investment Option
under the Program. As soon as practicable after the Renewal Date, the Self-
Managed Option shall be made available to any Investor, except that, with
respect to any Plan maintained under the ABA Members Retirement Plan, each
adopting Employer may elect not to have the Self-Managed Option available with
respect to its Plan . The terms and conditions of the Self-Managed Option,
including without limitation the classes of assets that an Investor may select
under the Self Managed Option and an appropriate fee schedule, shall be
determined by agreement between State Street and ABRA. The Self-Managed Option
shall meet the reasonable objectives established by ABRA, and State Street shall
use all reasonable efforts that are consistent with (i) the provisions of
Section 3.08, (ii) the requirements of the Trusts and legal and regulatory
considerations, (iii) State Street's responsibilities under the Program in its
capacity as Trustee, and (iv) the reasonable costs and expenses of administering
the Self-Managed Option; and
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<PAGE>
(b) Subject to the provisions of Section 3.08 and in accordance with
Article IV, State Street shall permit the establishment of NCT Investment
Options not described in Section 3.02(a) and ABRA shall be responsible for
designating or approving the terms and conditions of each such NCT Investment
Option (including the appointment of an Investment Manager pursuant to Section
3.03), provided that:
(i) a fee schedule and a method of payment for the costs and expenses
necessary to establish and maintain such NCT Investment Option has
been or will be established in accordance with Section 13.04;
(ii) ABRA shall not amend, or authorize the amendment of, the
designated terms and conditions of an NCT Investment Option without
reasonable prior written notice to State Street; and
(iii) the requirements set forth in Section 3.06 are met with respect
to such NCT Investment Option.
3.03 Investment Managers. Subject to Sections 3.02 and 4.02, ABRA
-------------------
shall (a) appoint one or more Investment Managers for each NCT Investment Option
(other than the Self-Managed Option) and each Closed Option that would be an NCT
Investment Option if it were not closed, in either case the assets of which are
"plan assets" subject to Part 4 of Title I of ERISA, and (b) enter into an
Investment Manager Agreement with each such Investment Manager, which State
Street shall acknowledge. ABRA shall be the sole appointing fiduciary of any
Investment Manager appointed pursuant to Article III, and State Street shall
have no responsibility or liability for the acts or omissions of such Investment
Manager other than as provided in Section 11.03 of the Master Trust and Section
11.03 of the Pooled Trust. ABRA may (with State Street's consent) appoint State
Street as an Investment Manager, in which case State Street shall enter into an
Investment Manager Agreement with ABRA pursuant to this Section, and the terms
of such Investment Manager Agreement regarding State Street's liabilities shall
supersede the provisions of this Section 3.03.
3.04 Required Investment Manager Termination. Pursuant to the
---------------------------------------
reasonable written request of either ABRA or State Street, as the case may be,
and in accordance with the applicable Investment Manager Agreement, ABRA shall
terminate an Investment Manager if such Investment Manager (a) fails to satisfy
the requirements of Section 3.06, (b) in the reasonable judgment of State
Street, as part of a continuing pattern of negligence, directs or fails to
direct State Street to act, or to refrain from acting, under the Trusts, and
State Street knows that by such action or failure to act it would be
participating in a breach of fiduciary duty by the Investment Manager or (c) in
the reasonable judgment of ABRA or State Street, breaches its fiduciary duty or
the applicable Investment Manager Agreement in a manner that is (i) willful,
(ii) knowing, or (iii) grossly negligent. Any Investment Manager Agreement
entered into pursuant to Section 3.03 shall include a provision to permit
immediate termination pursuant to this Section 3.04.
-12-
<PAGE>
3.05 Optional Investment Manager Termination. ABRA, at any time and
---------------------------------------
from time to time, may terminate any Investment Manager appointed pursuant to
Section 3.03, subject to (a) the terms of the respective Investment Manager
Agreement, (b) the reasonable administrative requirements of State Street and
(c) the terms of the Trusts. Unless the NCT Investment Option or Closed Option
to which the Investment Manager provides services is in the process of
termination in accordance with Section 4.05, such termination shall not be
effective until such time as a successor Investment Manager has been appointed
in accordance with Section 3.03.
3.06 Requirements. State Street shall not establish, or permit the
------------
establishment of, any NCT Investment Option unless such NCT Investment Option is
registered under, or qualifies for an exemption in accordance with, applicable
securities laws (including state securities laws) or unless such NCT Investment
Option is otherwise not subject to such laws, as determined in the reasonable
judgment of State Street, based on written advice of outside counsel reasonably
acceptable to ABRA. Each NCT Investment Option, and each Closed Option that
would be an NCT Investment Option if it were not closed (as of the Renewal Date,
the Real Estate Option), shall be maintained in accordance with all applicable
employee benefits, securities, banking and insurance laws and regulations by the
Investment Manager, the issuer of such NCT Investment Option or Closed Option,
or other appropriate party responsible for, or involved in, the offering or
maintaining of such NCT Investment Option or Closed Option. Each Investment
Manager appointed pursuant to Section 3.03 shall (a) be qualified at all times
under the terms of the Trusts to serve as an Investment Manager, (b) be deemed
an investment manager under Section 3(38) of ERISA, (c) be a "qualified
professional asset manager" as described in Prohibited Transaction Class
Exemption 84-14 issued by the United States Department of Labor, (d) acknowledge
in writing that it is a fiduciary with respect to the Plans and Trusts within
the meaning of Section 3(21)(A) of ERISA, (e) agree to conform and have the
capability to conform to State Street's reasonable administrative standards
regarding the operation of the Trusts, reporting, withdrawals, payment of
benefits and other similar matters and (f) agree to indemnify ABRA and State
Street (to the reasonable satisfaction of each party) for losses, damages and
expenses (including attorneys' fees) incurred in connection with a claim or
proceeding resulting from or arising out of the Investment Manager's (i)
negligence, (ii) reckless or intentional act or omission, (iii) violation of
applicable law, (iv) violation of fiduciary duty (including fiduciary duty under
ERISA) and (v) violation of the Investment Manager Agreement.
3.07 Temporary Closure of an NCT Investment Option. At any time that
---------------------------------------------
an NCT Investment Option is not offered or maintained in accordance with the
requirements set forth in Section 3.06 (as determined in the reasonable judgment
of State Street), State Street shall have the right (a) to temporarily prevent
such NCT Investment Option from receiving or accepting contributions or
transfers and (b) to otherwise treat such NCT Investment Option as a Closed
Option under this Agreement, pending (y) termination of the NCT Investment
Option in accordance with Section 4.05 or (z) agreement with ABRA regarding
other action to be taken with respect to such NCT Investment Option.
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<PAGE>
3.08 Establishment of NCT Investment Options. NCT Investment Options
---------------------------------------
shall be established pursuant to Section 3.02 and in accordance with Article IV,
provided that the requirements of Section 3.06 are satisfied, unless State
Street demonstrates to the reasonable satisfaction of ABRA that the
establishment and administration of an NCT Investment Option are beyond its
reasonable administrative capabilities.
ARTICLE IV. ALL INVESTMENT OPTIONS.
---------- ----------------------
4.01 New Investment Options. ABRA, as sponsor of the Program and on
----------------------
behalf of Participants, Employees and Investors, and State Street shall each
have the right, at any time and from time to time, to deliver to the other a New
Investment Option Notice.
(a) With respect to a New Investment Option Notice delivered by
ABRA, State Street shall respond to ABRA as follows:
(i) If the proposed New Investment Option is to be established
as a Fund, State Street's response to ABRA shall indicate
whether, upon consideration pursuant to Section 2.08, State
Street will establish the New Investment Option proposed in such
New Investment Option Notice as a Fund, and
(A) if State Street determines to establish such
New Investment Option as a Fund, its response to ABRA
shall include a proposed fee schedule for the Fund and
state the date by which such option is to be
established; or
(B) if State Street determines not to establish
such New Investment Option as a Fund, its response to
ABRA shall include the reasons for such determination,
and State Street shall treat such New Investment Option
as an NCT Investment Option in accordance with Section
4.01(a)(ii).
(ii) If a New Investment Option is to be an NCT Investment
Option, State Street shall establish such proposed New
Investment Option as an NCT Option, subject to Section 3.08 and
the provisions referenced therein, according to the following
procedures:
(A) if State Street determines to establish such
New Investment Option as an NCT Investment Option, its
notification to ABRA shall include a proposed fee
schedule and a date by which such New Investment Option
shall be established; or
-14-
<PAGE>
(B) if State Street determines not to establish
such New Investment Option as an NCT Investment Option,
its notification to ABRA shall include the reasons why
such New Investment Option cannot be established in
accordance with Section 3.08 and the provisions
referenced therein.
(iii) State Street's response to an ABRA New Investment Option
Notice under this Section 4.01(a) shall be delivered to ABRA
within 30 days after receipt thereof, except that the response
required under Section 4.2(a)(ii) by reason of State Street's
determination not to establish a New Investment Option as a Fund
(as described in Section 4.2(a)(i)(B)), shall be delivered no
later than forty-five days after State Street's initial receipt
of such New Investment Option Notice from ABRA.
(b) With respect to a New Investment Option Notice delivered
by State Street (which shall include a proposed fee schedule), no later than
thirty (30) days after the date of ABRA's receipt of such New Investment Option
Notice, ABRA shall either accept or reject the proposal.
4.02 Exclusive Management of Principal Protected Products. With
----------------------------------------------------
respect to any Principal Protected Product, including any New Investment Option
that is a Principal Protected Product:
(a) Except as provided below, ABRA shall not (i) request that
State Street engage an Investment Advisor, (ii) engage any Investment Manager
(other than State Street) or (iii) accept proposals or bids from any party
(other than State Street).
(b) If a New Investment Option Notice is delivered pursuant to
Section 4.01 with respect to a Principal Protected Product and is accepted by
the party to whom it is delivered, then prior to the establishment of such New
Investment Option, State Street and ABRA shall agree on appropriate Principal
Protected Product Standards for such New Investment Option, which standards
shall then be included in Appendix B. If ABRA and State Street are unable to
----------
agree on Principal Protected Product Standards with respect to such New
Investment Option, ABRA shall direct the consultant engaged pursuant to Section
4.03 to designate appropriate Principal Protected Product Standards by reference
to comparable investment products. If State Street does not accept such
Principal Protected Product Standards, then State Street and ABRA shall submit
to arbitration in accordance with Section 16.10 for the purpose of establishing
Principal Protected Product Standards for such New Investment Option. State
Street may, in its discretion, accept or reject any Principal Protected Product
Standards determined in accordance with Section 16.10. If State Street rejects
such Principal Protected Product Standards for a New Investment Option, State
Street shall be deemed to have waived its rights under Section 4.02(a) to the
exclusive management of that Principal Protected Product and ABRA may, with
respect to that Principal Protected Product, (i) generally solicit and accept
bids
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<PAGE>
and proposals from, and negotiate with, other parties, (ii) request that State
Street engage an Investment Advisor for a Fund and (iii) negotiate with and
engage an Investment Manager for an NCT Investment Option; provided, however,
that if a Principal Protected Product is established with an Investment Advisor
or Investment Manager that is not State Street, such Investment Advisor or
Investment Manager shall agree to meet the same Principal Protected Product
Standards that were rejected by State Street for the period of time specified
therein.
(c) If State Street fails both (i) to meet any one of the
Principal Protected Product Standards for the specified time period, as set
forth in Appendix B, as amended from time, to time, and (ii) to meet such
----------
Principal Protected Product Standards for both of the next two (2) consecutive
calendar quarters following the end of such specified time period, then State
Street shall be deemed to have waived its rights under Section 4.02(a) to the
exclusive management of that Principal Protected Product and ABRA may deliver an
Investment Advisor Recommendation pursuant to Section 2.04 (if such Principal
Protected Product is a Fund) or appoint a new Investment Manager pursuant to
Section 3.03 (if such Principal Protected Product is an NCT Investment Option)
with respect to that Principal Protected Product; provided that such Investment
Advisor or Investment Manager shall agree to meet the Principal Protected
Product Standards set forth in Appendix B, as amended from time to time, for
----------
such Principal Protected Product.
(d) If (i) ABRA makes one or more reductions that are material
in the aggregate (including adjustments regarding performance, credit quality or
measurement period) with respect to any Principal Protected Product Standard
(which changed Principal Protected Product Standard shall be included in
Appendix B) for a Principal Protected Product with an Investment Advisor or
- ----------
Investment Manager that is not State Street, or (ii) an Investment Advisor or
Investment Manager that is not State Street fails both to meet the Principal
Protected Product Standards for a Principal Protected Product set forth in
Appendix B, as amended from time to time, (including any time period specified
- ----------
therein) and to meet such Principal Protected Product Standards for a period
negotiated with such Investment Advisor or Investment Manager (not in excess of
two (2) consecutive quarters following the end of the time period specified in
Appendix B), then ABRA shall provide prompt notice to State Street. Within
- ----------
thirty (30) days of State Street's receipt of such notice, State Street shall
have the right, as applicable, (1) to accept such changed or new Principal
Protected Product Standards with respect to such Principal Protected Product or
(2) to commence negotiations with ABRA to establish new Principal Protected
Product Standards for that Principal Protected Product in accordance with the
procedures set forth in Section 4.02(b) and may, in either case, if it accepts
such Principal Protected Product Standards, (A) remove such Investment Advisor
(without regard to Sections 2.05 and 2.06) or (B) remove, or require ABRA to
remove, such Investment Manager pursuant to Section 3.04, as applicable.
(e) Each of State Street and ABRA shall have the right to
require the other to commence negotiations to establish a new Principal
Protected Product Standard for any Principal Protected Product (treated in the
same manner as a new Investment Option Notice in accordance with the procedures
set forth in Section 4.02(b)) to reflect changes in the financial
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<PAGE>
marketplace with respect to comparable investment products, provided that each
party may exercise such right with respect to each Principal Protected Product
only one time during each successive eighteen month period.
4.03 Consultant. ABRA may from time to time hire a consultant to
----------
assist ABRA in (a) making recommendations to State Street regarding the
appointment of Investment Advisors, (b) monitoring the performance of Investment
Advisors, (c) recommending and engaging Investment Managers, (d) monitoring the
performance of Investment Managers, (e) monitoring the performance of State
Street and (f) monitoring the relationship between State Street and the
Investment Advisors and Investment Managers. ABRA shall direct such consultant
to meet with, make presentations to, provide information to and otherwise be
available to State Street pursuant to State Street's reasonable request.
Nothing in this Section shall prevent ABRA or State Street from hiring for its
own exclusive benefit and at its own expense one or more additional consultants
to perform the services enumerated in this Section.
4.04 Compliance with Laws. State Street shall be responsible for
--------------------
determining that, and shall take any and all action as shall be necessary so
that, the offering, providing and maintaining of all Investment Options and
Closed Options at all times prior to the Transfer Completion Date shall comply
with all applicable employee benefit, securities, banking and insurance laws and
regulations. Any person or entity that provides investment advisory, investment
management or other services under the Trusts or the ABA Members Collective
Trust shall be required (a) to conform to State Street's reasonable
administrative standards regarding frequency of valuation, transfer of funds,
withdrawals, payment of benefits and other similar matters and (b) to comply
with all applicable employee benefit, securities, banking and insurance laws and
regulations.
4.05 Termination of Investment Options. ABRA, as sponsor of the
---------------------------------
Program and on behalf of Participants, Employers and Investors, and State Street
shall each have the right, at any time and from time to time, to deliver to the
other an Investment Option Termination Notice with respect to any Investment
Option or Closed Option. An Investment Option Termination Notice shall specify
an effective date for the proposed action and may request that an Investment
Option be terminated, an Investment Option be designated a Closed Option or a
Closed Option be terminated; provided, however, that
(a) With respect to an Investment Option Termination Notice
delivered by ABRA to State Street regarding a Closed Option (that was a Fund
when it was closed), State Street shall respond to ABRA no later than thirty
(30) days after State Street's receipt of such Investment Option Termination
Notice to indicate (i) whether, (ii) in what manner and (iii) on what time frame
such Investment Option or Closed Option will be terminated or closed, in the
reasonable discretion of State Street, in accordance with the ABA Members
Collective Trust.
(b) With respect to an Investment Option Termination Notice
delivered by ABRA to State Street regarding an NCT Investment Option (or a
Closed Option
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<PAGE>
that was an NCT Investment Option when it was closed), State Street shall
respond to ABRA no later than thirty (30) days after State Street's receipt of
such Investment Option Termination Notice to indicate (i) in what manner and
(ii) on what time frame such Investment Option or Closed Option will be
terminated or closed, in accordance with the Trusts.
(c) With respect to an Investment Option Termination Notice
delivered by State Street to ABRA (which shall include a proposed manner and
time frame for termination or closure) regarding a Fund (or Closed Option that
was a Fund when it was closed), no later than thirty (30) days after ABRA's
receipt of such Investment Option Termination Notice, ABRA shall accept the
proposal or deliver a New Investment Option Notice proposing that the Fund
become an NCT Investment Option; provided, however, that State Street retains
reasonable discretion to terminate or close the Investment Option or Closed
Option without the consent of ABRA, subject to the considerations set forth in
Section 2.08, upon sixty (60) days' prior written notice to ABRA, or if State
Street reasonably believes that urgency is necessary, upon concurrent notice to
ABRA.
(d) With respect to an Investment Option Termination Notice
delivered by State Street to ABRA (which shall include a proposed manner and
time frame for termination or closure and the reasons (including as provided in
Sections 3.06 and 3.08) for such proposal) regarding an NCT Investment Option
(or a Closed Option that was an NCT Investment Option when it was closed), no
later than sixty (60) days after ABRA's receipt of such Investment Option
Termination Notice, ABRA shall either accept or reject the proposal; provided,
however, that if State Street reasonably determines that urgency is necessary
and so notifies ABRA, ABRA shall respond to State Street within five (5)
Business Days of ABRA's receipt of such notice. If ABRA rejects such proposal,
the NCT Investment Option shall remain an Investment Option or a Closed Option
as long as it is offered and maintained in accordance with the requirements set
forth in Sections 3.06 and 3.08 (as determined in the reasonable judgment of
State Street), unless ABRA and State Street otherwise agree in accordance with
the procedures set forth in Articles III and IV.
4.06 General Considerations of State Street. In conducting its role
--------------------------------------
under Article IV with respect to (a) a Fund, (b) a New Investment Option
proposed to be a Fund, or (c) a Closed Option that had been a Fund when it was
closed, State Street shall act in accordance with Section 2.08. In conducting
its role under Article IV with respect to (w) an NCT Investment Option, (x) a
New Investment Option proposed to be an NCT Investment Option, (y) a Fund
proposed to be changed to an NCT Investment Option, or (z) a Closed Option that
had been an NCT Investment Option when it was closed, State Street shall act in
accordance with Section 3.08.
ARTICLE V. MAINTENANCE OF TRUSTS AND PLANS
--------- -------------------------------
5.01 Necessary Amendments to Trusts and ABA Members Plans and Trusts.
---------------------------------------------------------------
ABRA, as sponsor of the ABA Members Plans, shall make all amendments to the ABA
Members Plans and any form of participation agreement or other agreements
thereunder and to
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<PAGE>
the Trusts that are necessary to comply with State Street's reasonable
administrative requirements, to permit Investment Options and Closed Options to
be offered, made available, maintained or terminated under the Program, or to
comply with applicable laws, regulations, revenue rulings, revenue procedures,
advisory opinions or other governmental pronouncements. All such amendments
shall be made in accordance with the following procedures:
(a) If ABRA has prepared a necessary amendment to the ABA
Members Plans or any form of participation agreement or other agreement
thereunder or to the Trusts, it shall provide such amendment to State Street for
review; and State Street shall be entitled to make comments and suggestions with
respect thereto (to which ABRA shall give full consideration), and shall conduct
its reviews under this Section in accordance with a reasonable schedule
specified by ABRA or, if none is specified, within a reasonable period of time.
(b) ABRA shall, to the extent necessary, submit such necessary
amendments to the Internal Revenue Service for approval. ABRA shall provide
copies of such submissions to State Street for review prior to submission and
State Street shall (i) be entitled to make comments and suggestions (to which
ABRA shall give full consideration), (ii) conduct such reviews in accordance
with a reasonable schedule specified by ABRA or, if none is specified, within a
reasonable period of time, and (iii) offer timely assistance to ABRA in making
such submissions and obtaining approvals thereof.
(c) Outside legal expenses incurred by either ABRA or State
Street pursuant to this Section shall be paid by such party incurring such
expense, but may be reimbursed by the Trusts or the ABA Members Collective Trust
to the extent permitted by Section 13.04.
5.02 Other Amendments to the Trusts and ABA Members Plans. From time
----------------------------------------------------
to time, ABRA and State Street may each notify the other of proposed amendments
or changes to the Trusts, the ABA Members Plans and any form of participation
agreement or other agreement thereunder that such party believes are appropriate
or desirable in connection with the Program, but not required under Section
5.01, in accordance with the following procedures:
(a) ABRA, as sponsor of the ABA Members Plans, shall be
responsible for making any amendment to the ABA Members Plans and any form of
participation agreement or other agreement thereunder and to the Trusts;
provided that State Street, together with ABRA, may make amendments to the
Trusts.
(b) Each party shall cooperate with the other to make such
amendments as both parties agree are reasonable and practicable, subject to the
terms of this Agreement.
(c) Each party shall be entitled to make comments and
suggestions on such amendments, to which the other party shall give full
consideration .
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<PAGE>
(d) ABRA shall, to the extent necessary, submit such
amendments to the Internal Revenue Service and other governmental agencies for
approval and shall provide State Street with copies of the submissions prior to
submission for review.
(e) State Street shall offer timely assistance to ABRA in
making such submissions and obtaining such approvals as may be necessary or
advisable, including by conducting its reviews under this Section in accordance
with a reasonable schedule specified by ABRA or, if none is specified, within a
reasonable period of time.
(f) Outside legal expenses incurred by either ABRA or State
Street pursuant to this Section shall be paid by such party incurring such
expense and shall not be an expense chargeable against the Trusts or the ABA
Members Collective Trust.
5.03 Notice to Employers of Amendments. State Street shall promptly
---------------------------------
notify each affected Employer of (a) any amendments to the Trusts, the ABA
Members Plans and any form of participation agreement or other agreement
thereunder, including amendments required to comply with applicable laws or
regulations, and (b) any actions the Employer must take to conform to such
amendments.
5.04 Forms. Subject to Section 11.01, State Street shall design,
-----
maintain and provide to Employers, Investors and Participants, as the case may
be, such forms as are necessary under the ABA Members Plans and the Trusts in
order to make contributions, to request distributions and withdrawals, to
designate beneficiaries and to make elections in accordance with the applicable
provisions of the Code and ERISA regarding survivor benefits, and such other
forms as are or may become necessary for the administration of the Plans and
Trusts. Any changes to existing forms and any new forms shall be furnished to
ABRA as provided in Section 11.02.
5.05 Assistance to Employers. State Street shall provide technical,
-----------------------
operational and other appropriate assistance to each Employer that adopts one or
both of the ABA Members Plans as to (a) the design, operation and interpretation
of the Employer Plan, (b) the procedures to be used in making elections under
the Employer Plan, (c) the annual reports required to be filed with the Internal
Revenue Service and other federal agencies, (d) the application for Internal
Revenue Service approval of the Employer Plan and (e) the distribution options
available from time to time under the ABA Members Plans. In order to provide
assistance to the Employers, State Street shall maintain one or more toll-free
telephone numbers and employ an adequate number of customer service
representatives, each as are required to respond to Employers' inquiries on a
timely and responsive basis, in accordance with the applicable Service
Standards.
5.06 Plan Interpretation. ABRA, as sponsor of the Program, may
-------------------
provide any legal or other technical assistance as it may, from time to time,
determine is necessary or appropriate to assist with the proper interpretation
and operation of the Employer Plans with respect to issues brought to ABRA's
attention by State Street or otherwise. Outside legal and
-20-
<PAGE>
other expenses incurred by ABRA pursuant to this Section shall be paid by ABRA,
but may be reimbursed by the Trusts or the ABA Members Collective Trust to the
extent permitted by Section 13.04.
ARTICLE VI. SERVICES WITH RESPECT TO INVESTMENT OPTIONS
- ---------- -------------------------------------------
6.01 Investment Records. State Street shall maintain records of each
------------------
Plan's interest in each Investment Option and Closed Option and shall maintain
such records on an individual basis with respect to each Participant's interest
in each Investment Option and Closed Option for each Individual Recordkeeping
Plan.
6.02 Contributions. State Street shall allocate all contributions
-------------
among the Investment Options in accordance with the applicable terms of the
Plans and the Trusts and the most recent written or recorded telephonic
instructions of the appropriate Investor. In the event that State Street has
received a contribution from an Employer that State Street believes to be
incorrect or investment instructions from an Investor that are invalid on their
face, it shall use its best efforts to contact the Employer or the Investor, as
the case may be, to clarify or correct such contribution amount or instructions.
State Street shall establish standard procedures (with reasonable notice to ABRA
and, if necessary or appropriate, to the Investors) regarding the action to be
taken by State Street in the interim, in accordance with the applicable Service
Standards.
6.03 Transfers. State Street shall transfer amounts among Investment
---------
Options or to one or more Investment Options from a Closed Option in accordance
with the applicable terms of the Plans and Trusts and the written, recorded
telephonic or electronic instructions (subject to Section 6.05) of the
appropriate Investor. To the extent that State Street has received no
instructions or such instructions are invalid on their face, State Street shall
use its best efforts to contact the Investor or the applicable Employer, as the
case may be, in order to obtain, clarify or correct such investment
instructions. If State Street receives invalid instructions, the affected assets
will not be transferred until valid instructions are received; provided, that if
State Street receives invalid instructions or no instructions where instructions
are required because assets must be transferred, the transfer will be promptly
made to the Stable Asset Return Fund or to such other Fund as is designated by
the Employer in the participation agreement, subject to applicable laws and
regulations. State Street shall send a written confirmation of each transfer to
the Investor with the authority to direct such transfer, in accordance with the
applicable Service Standards.
6.04 Telephone Service. State Street shall make available to
-----------------
Investors a telephone service using customer service representatives and a voice
response system through which an Investor may authorize and direct State Street
(i) to change the manner in which future contributions will be allocated among
the Investment Options and (ii) to make transfers between Investment Options or
to an Investment Option from a Closed Option. The use of such telephone service
shall be subject to applicable laws and regulations and to such reasonable
requirements and procedures as State Street may establish from time to time, a
copy of which
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<PAGE>
State Street shall provide to ABRA; provided, however, that all authorizations
and directions made through such telephone service using customer service
representatives shall be recorded. State Street shall carry out the transactions
authorized by telephone in accordance with Section 6.03
6.05 Internet Services. State Street shall make available to
-----------------
Investors an internet accessible service at a date to be agreed upon by State
Street and ABRA during 1999 with features and functions suitable for the
Program, including the ability of Investors to (i) obtain account balance
information, (ii) change the manner in which future contributions will be
allocated among the Investment Options and (iii) to make transfers between
Investment Options or to an Investment Option from a Closed Option.
6.06 Assistance with Respect to Investment Options. State Street
---------------------------------------------
shall provide assistance to each Investor in connection with the procedures
applicable to making investment elections and allocations among Investment
Options in accordance with the applicable Service Standards; provided, however,
that State Street shall not recommend any Investment Option or attempt in any
way to influence an Investor's selection of any Investment Option. State Street
shall maintain one or more toll-free telephone numbers and internet access
pursuant to Section 6.05 and employ an adequate number of customer service
representatives, each as reasonably required to respond to Investors' inquiries
on a timely and responsive basis.
6.07 Recorded Information Concerning Investment Options. State
--------------------------------------------------
Street shall, to the extent permitted by applicable laws and regulations,
subject to Section 11.01, and in accordance with the applicable Service
Standards, maintain one or more toll-free numbers from which Investors may
obtain current information regarding interest rates available for unit values of
Funds (as determined under the ABA Members Collective Trust) and other
appropriate performance information relating to the Funds and, to the extent
such information has been provided to State Street, the NCT Investment Options
and the Closed Options. State Street shall use its best efforts to obtain on a
timely basis such information regarding the NCT Investment Options and Closed
Options of which State Street is not the Investment Manager.
6.08 Communication with Investors. State Street shall, subject to
----------------------------
Section 11.01, provide to each Investor all information and forms necessary to
effect an allocation of contributions among the Investment Options and transfers
between the Investment Options or from a Closed Option to an Investment Option,
(a) at the time of such Investor's initial investment, (b) upon request by the
Investor, (c) upon any termination of, or material change in the Program with
respect to, an Investment Option, Closed Option, Investment Advisor or
Investment Manager, (d) upon the establishment of a New Investment Option and
(e) at such other times as State Street may, upon consultation with ABRA,
determine to be appropriate, consistent with applicable Service Standards.
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<PAGE>
ARTICLE VII. SERVICES WITH RESPECT TO TRUSTS AND PLANS
- ----------- -----------------------------------------
7.01 Plan Records. State Street shall maintain records for all
------------
Plans. To the extent that Equitable or any other financial institution or third
party (other than an Employer, Participant or Investor) provides information to
State Street, State Street may rely on the information so furnished. To the
extent an Employer, Participant or Investor provides information to State
Street, State Street may rely on the information so furnished, unless on its
face, such information appears to be incorrect or invalid.
7.02 Additional Records for Individual Recordkeeping Plans. For
-----------------------------------------------------
Individual Recordkeeping Plans, State Street shall maintain records, including
but not limited to account balance, vested percentage, retirement date and
designated beneficiaries of each Participant, as provided under the applicable
Plan and Trust. The records of each account shall reflect separately amounts
attributable to Employer contributions, Participant after-tax contributions,
Employer matching contributions, pre-tax contributions under a cash or deferred
arrangement established pursuant to Section 401(k) of the Code, and amounts
transferred or rolled over from the plan of the Participant's previous employer
either directly or indirectly through an individual retirement account or
individual retirement annuity established pursuant to Section 408 of the Code.
To the extent that Equitable or any other financial institution or third party
(other than an Employer, Participant or Investor) provides information to State
Street, State Street may rely on the information so furnished. To the extent an
Employer, Participant or Investor provides information to State Street, State
Street may rely on the information so furnished, unless on its face such
information appears to be incorrect or invalid.
7.03 Additional Records For Plans Under ABA Members Pension Plan.
-----------------------------------------------------------
For Plans that have adopted the ABA Members Pension Plan, State Street shall (a)
maintain records of the accrued benefit, vested percentage, retirement date and
designated beneficiaries of each Participant under the ABA Members Pension Plan,
as provided in the ABA Members Pension Plan and the Master Trust, and (b)
provide, directly or through an independent actuarial firm, all actuarial
services required under the ABA Members Pension Plan. If State Street retains
an independent actuarial firm, (x) such services shall be performed under the
supervision of State Street and State Street shall remain responsible for such
performance, (y) any contract between State Street and an independent actuarial
firm shall provide that upon termination of such contract, all records (in their
then current format and structure) that were created or maintained in connection
with the ABA Members Plans shall be transferred to State Street or its
designated agent or, if on or after the Date of Termination, to ABRA or its
designated agent, and (z) State Street shall use all reasonable efforts either
to include a provision in any contract to the effect that, or otherwise to cause
the result that, such transfer be made without additional cost to the Program or
State Street or ABRA (including their designated agents). To the extent that
Equitable or any other financial institution or third party (other than an
Employer, Participant or Investor) provides information to State Street or such
independent actuarial firm, State Street and such independent actuarial firm may
rely on the information so furnished. To the extent an Employer, Participant or
Investor provides information to State Street, State Street may rely on the
information so furnished, unless on its face such information appears to be
incorrect or invalid.
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<PAGE>
7.04 Distributions and Withdrawals. Subject to applicable laws and
-----------------------------
regulations and upon the direction of the Employer or Participant, as the case
may be, State Street shall in accordance with the terms, as applicable, of the
ABA Members Plans, Individually Designed Plans that are Individual Recordkeeping
Plans and the Trusts, distribute the account balance or accrued benefit of each
Participant. State Street shall make available to each Participant such
arrangements as are necessary for the payment of benefits in accordance with
applicable law and with the terms, as applicable, of the ABA Members Plans,
Individually Designed Plans that are Individual Recordkeeping Plans, and the
Trusts. In the case of an Individually Designed Plan that is an Aggregate
Recordkeeping Plan, State Street shall make all payments to the trustee of such
Plan. In accordance with the applicable Service Standards, State Street shall,
subject to Section 11.01, provide each Investor under an Individual
Recordkeeping Plan with a written confirmation of each distribution and any
withdrawal from the assets for which such Investor is responsible.
7.05 Tax Penalties on Distributions. Subject to applicable laws and
------------------------------
regulations, State Street shall inform each Participant at the time of
distribution (or prior to the time of distribution if required by laws or
regulations) of any tax penalties that may apply to such distribution and of any
applicable requirement that distributions commence no later than the dates
specified in the Code. All forms provided by State Street pursuant to Section
5.04 that are necessary to effect such distributions shall include notice that
tax penalties may apply. State Street shall make distributions no later than
the time, and in an amount no less than, required by Section 401(a)(9) of the
Code and any successor provision thereto. To the extent that Equitable or any
other financial institution or third party (other than a Participant, Employer
or Investor) provides information to State Street, State Street may rely upon
the information furnished to perform its obligations under this Section. To the
extent that a Participant, Employer or Investor provides information to State
Street, State Street may rely upon the information furnished to perform its
obligations under this Section, unless on its face such information appears to
be incorrect or invalid.
7.06 State Street as Payor. (a) Federal Tax Requirements. State
--------------------- ------------------------
Street shall be the "payor" (within the meaning of such term as used in Section
3405 of the Code) of benefits under the Employer Plans and under any other
Individual Recordkeeping Plan except as otherwise provided in this Section. As
payor, State Street shall perform any required withholding of income tax from
distributions and withdrawals. Prior to the distribution of each Participant's
benefits and in accordance with the applicable Service Standards, State Street
shall provide appropriate notice of withholding and any applicable withholding
election forms to such Participant. State Street shall provide to the
Participant copies of any notice required by Section 402(f) of the Code in
connection with the payment of all amounts as to which it is the payor.
Notwithstanding the foregoing, State Street shall not be the payor of benefits
under a Plan to the extent that such benefits are paid by the issuer of an
annuity contract that is purchased by the Trustee in accordance with a
Participant's election pursuant to the applicable Plan. In such event, the
issuer of such annuity contract shall be the payor (within the meaning of the
Code).
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<PAGE>
(b) Distribution Procedures. Immediately prior to the time when a
-----------------------
distribution is to be made pursuant to Section 7.04, State Street shall transfer
the amount thereof to a demand deposit account maintained by State Street for
this purpose. Upon such transfer, the appropriate Trust shall be relieved of,
and State Street shall assume, the liability to pay such distribution. Any
earnings attributable to Trust assets transferred to such account shall accrue
to the benefit of State Street, and in consideration thereof, the fees payable
to State Street pursuant to Section 13.01 shall be reduced by $300,000 per year.
7.07 Account Statements. In accordance with and not in addition to
------------------
the provisions of the Trusts and in accordance with the applicable Service
Standards, State Street shall provide (a) each Participant under an Individual
Recordkeeping Plan with statements of such Participant's account and (b) the
trustee of each Aggregate Recordkeeping Plan with statements of such Plan's
account.
7.08 Forms 5500, Annual Reports and Other Information. State Street
------------------------------------------------
shall provide the following to each Employer, as appropriate, each in accordance
with the applicable Service Standards, provided that, to the extent that
Equitable or any other financial institution or third party (other than an
Employer, Participant or Investor) provides information to State Street, State
Street may rely on the most recent information so furnished. To the extent that
an Employer, Participant or Investor provides information to State Street, State
Street may rely on the most recent information so furnished, unless on its face
such information appears to be incorrect or invalid:
(a) a Form 5500, completed to the extent possible with
information available to State Street, for each Employer Plan and for each
Individual Recordkeeping Plan that is required to file a Form 5500;
(b) all of the information available to State Street necessary
to complete a Form 5500 for each Aggregate Recordkeeping Plan that is required
to file a Form 5500;
(c) all schedules required to be filed with a Plan's annual
report, to the extent the schedule or required information is available to
State Street;
(d) a summary plan description for each Employer Plan;
(e) a form of summary annual report; and
(f) instructions and financial information that is available
to State Street to aid each such Employer in filing its Internal Revenue Service
applications and other forms needed by such Employer to assist it in complying
with laws and regulations applicable to the Trusts and the ABA Members Plans.
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<PAGE>
7.09 Section 415 Monitoring. In accordance with the applicable
----------------------
Service Standards, State Street shall (a) monitor each Employer Plan's
compliance with Section 415 of the Code based on the employee compensation and
other relevant data supplied to State Street by the Employer, and (b) provide
each Employer that maintains an Individually Designed Plan with the data
available to State Street for purposes of the Employer's monitoring of its
Plan's compliance with Section 415 of the Code. State Street shall timely
request compensation information and other relevant data from those Employers
who have not otherwise provided such information to State Street, and State
Street shall not be required to monitor compliance with Section 415 of the Code
for any Employers who fail to provide such information after such request.
7.10 Section 401(k) and 401(m) Testing. In accordance with the
---------------------------------
applicable Service Standards, State Street shall perform the average deferral
percentage testing required by Section 401(k) of the Code and the average
contribution percentage testing required by Section 401(m) of the Code for each
Individual Recordkeeping Plan that contains a cash or deferred arrangement based
on the employee compensation and other relevant data supplied to it by the
Employer. State Street shall timely request compensation information and other
relevant data from Employers who have not otherwise provided such information
and data, and State Street shall not be required to perform such average
deferral percentage and average contribution percentage testing for any
Employers who fail to provide such information and data after such request.
7.11 Written Communications to Employers and Investors. State Street
-------------------------------------------------
shall, subject to Section 11.01, send written communications to each Employer
and Investor no less frequently than quarterly, including but not limited to
communications containing information (to the extent permitted by applicable
laws and regulations) regarding (a) interest rates and investment performance of
the Investment Options and Closed Options offered or made available by State
Street and, (b) to the extent appropriate, changes in the Program, the ABA
Members Plans or the Trusts. State Street may use such communications to
provide any or all of the statements, forms, procedures and information that may
be required or appropriate to be provided to each Employer and Investor except
communications or information required by Sections 6.07, 7.07, 7.08, 7.09 and
7.10 and the confirmations provided under Sections 6.03 and 7.04.
Notwithstanding the foregoing, such excepted communications or information may
be included in the same package for mailing as any other communication provided
that such inclusion does not result in a delay in sending such excepted
communications or information to the Employers or Investors, as the case may be.
Delivery of such statements, forms, procedures and information shall be made as
required by applicable laws and regulations. ABRA shall be entitled to review
and comment on such communications, statements, forms, procedures and
information to the extent provided in Section 11.02.
7.12 Inquiries and Complaints. In accordance with the applicable
------------------------
Service Standards, State Street shall respond to inquiries and complaints from
Participants, Employers and Investors. State Street shall furnish to ABRA copies
of all written complaints it receives and written descriptions or copies of
State Street's responses thereto. Such copies shall be provided
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<PAGE>
as soon as practicable after receipt or response, as the case may be, but no
later than at the next following meeting of the Board.
7.13 Notices and Elections by Participants. No notice or election
-------------------------------------
that a Participant is required to provide to State Street under this Agreement
(excluding any telephonic authorization or direction provided by the Participant
in the capacity of an Investor in accordance with requirements and procedures
established pursuant to Section 6.04, any authorization or direction under
Section 6.05 or as otherwise provided in the applicable Employer Plan) shall be
effective unless submitted to State Street by the Participant's Employer. State
Street may accept such notices and elections directly from the Participant in
those cases where it is impractical or impossible for the Employer to submit
such notices and elections and State Street receives notice of such
impracticality or impossibility from the Participant or the Employer that is
reasonably satisfactory to State Street. Except for telephonic authorizations
or directions described in Section 6.04 or any authorization or direction under
Section 6.05, no notice or election shall be effective until State Street
receives a properly completed form at the address provided to the Employers.
7.14 Address for Communications to Participants. State Street shall
------------------------------------------
mail any communication that it is required to provide to a Participant to such
Participant at the address of such Participant's Employer. After the
Participant or Employer notifies State Street that the Participant is no longer
employed by the Employer and provides State Street with a new address, State
Street shall mail all communications to such new address.
7.15 Year 2000 Compliance. (a) Year 2000 Plan. State Street
-------------------- --------------
represents that:
1. It has developed a detailed, comprehensive and adequate plan
(such plan, as in effect on the date hereof, is herein referred to as the "year
2000 plan," a copy of which will be made available on the premises of State
Street, from time to time, at ABRA's reasonable request to ABRA and its
consultant, to achieve "year 2000 compliance" (as defined below) for all
programs, software and systems used in connection with the Program;
2. It has committed sufficient financial and personnel resources to
complete the year 2000 plan as of the dates set forth herein;
3. State Street knows of no fact, circumstances or reason why the
year 2000 plan will not be successfully implemented in accordance with its terms
and this Agreement.
For purposes of this Section 7.15, "year 2000 compliance" means the capability
to perform all date dependent and date related functions and to record, store,
process and present date information and date dependent information without
error or interruption and with the same degree of timeliness, efficiency and
accuracy as on the date hereof, so that ABRA, the Employers, the Investors and
the Participants can use such information on or after January 1, 2000 in the
same manner as of the date hereof.
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(b) Implementation. State Street shall use reasonable and
--------------
comprehensive efforts as are required by its fiduciary duties under ERISA and
are consistent with industry standards to successfully carry out the tasks
described in State Street's year 2000 plan in connection with the Program in
accordance with the time schedule set forth in such plan and this Agreement and
shall make available the financial and personnel resources necessary to do so.
Notwithstanding the foregoing, if State Street shall have an agreement entered
into after March 31, 1998 with any other customer providing for a higher
standard of performance with respect to year 2000 compliance than that set forth
above, such higher standard shall automatically be applicable under this
Agreement.
(c) Reports. At each meeting of the Board occurring between
-------
the date of this Agreement and March 31, 2000, State Street shall deliver a
written report confirming the representations contained in paragraphs (a) and
(b) above as of the date of such meeting. Such report shall include sufficient
details so that an independent person familiar with such matters could form a
reasonable judgment regarding the adequacy of the year 2000 plan and State
Street's timely completion thereof.
(d) Consultants. State Street agrees to reimburse ABRA for any
-----------
expenses paid to a consultant to review year 2000 compliance up to but not
exceeding $100,000.
(e) No Effect on Duties. Nothing in this Section 7.15 shall be
-------------------
interpreted as affecting State Street's obligations under other Sections of this
Agreement.
7.16 Plan Administrator. State Street shall not be the plan
------------------
administrator (as defined in Section 3(16) of ERISA) with respect to any Plan.
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ARTICLE VII. MARKETING SERVICES TO BE PROVIDED BY STATE STREET
- ----------- -------------------------------------------------
8.01 Marketing Requirements. Establishment of Annual Marketing Plan
---------------------- --------------------------------------
and Goals. State Street shall market the Program to Qualified Employers through
- ---------
the ABRA Program Services Unit, and shall incur direct costs in so doing of not
less than $1,050,000 during each year during the term of this Agreement. No
later than the Board meeting during the third calendar quarter of 1998 and of
each year thereafter until the Transfer Completion Date, State Street shall
deliver to ABRA a proposed Annual Marketing Plan for the next succeeding
calendar year. The proposed Annual Marketing Plan shall be presented in
sufficient detail to enable ABRA to evaluate the level and type of effort to be
expended. Each proposed Annual Marketing Plan shall contain goals for the
number of additional new Plans, net additional Participants and new assets for
the year derived from contributions and conversions less assets associated with
Plans that cease participation in the Program (excluding assets withdrawn from
the Program due to distributions to individual Participants on account of
termination of employment, hardship withdrawal or similar events) to be added to
the Program, provided that such goals shall include an increase of 11,500 net
additional Participants by December 31, 2002 over the number of Participants as
of December 31, 1998. Each proposed Annual Marketing Plan shall contain a
description of the information (including demographic and other data as may be
reasonably requested by ABRA) relied upon and the methodology used by State
Street to develop such plan and goals. ABRA shall review each such proposed
Annual Marketing Plan, and shall be entitled to make recommendations to State
Street regarding such Plan and the various goals set forth therein. ABRA and
State Street shall consult with each other in good faith for the purpose of
agreeing to such Annual Marketing Plan and the goals set forth therein, prior to
the meeting of the Board during the fourth calendar quarter during the year
preceding the year covered by such Annual Marketing Plan. State Street shall
carry out the Annual Marketing Plan as so agreed upon and shall use its best
efforts to achieve the annual goals established thereby.
8.02 Marketing Reports. At each meeting of the Board during 1999 and
-----------------
each calendar year thereafter beginning prior to the Transfer Completion Date,
State Street shall provide to ABRA a written report showing the progress of the
Annual Marketing Plan up to the last day of the preceding calendar quarter. No
later than the meeting of the Board that occurs during the first calendar
quarter of 2000 and each calendar year thereafter prior to the Transfer
Completion Date, State Street shall provide to ABRA a report showing the actual
result of the marketing activities for the preceding calendar year as compared
to the marketing goals for such year as expressed in the Annual Marketing Plan.
8.03 State Bar and Local Endorsement Program. State Street will
---------------------------------------
continue to seek state and local bar endorsements that will provide value to the
Program in light of time and costs associated with obtaining such endorsements
and shall maintain and renew existing endorsements at the time they may
contractually be renewed when the marketing advantages of such relationships
provide a value to the Program in light of the time and costs associated with
maintaining such endorsements.
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ARTICLE IX. MARKETING SUPPORT TO BE PROVIDED BY ABRA
- ----------- ----------------------------------------
9.01 Endorsement. ABRA shall provide the Program with its
-----------
endorsement at all times during the term of this Agreement.
9.02 Bar Association Meetings. At the request of State Street, ABRA
------------------------
shall, to the extent practicable, use reasonable efforts to arrange for State
Street to appear at such meetings and conventions held by the ABA, its sections
and affiliates as are provided for in the Annual Marketing Plan.
9.03 Workshops and Seminars. At the request of State Street, ABRA
----------------------
shall, subject to applicable laws and regulations, assist State Street in
arranging for State Street to publicize such workshops and seminars as may be
provided for in the Annual Marketing Plan. ABRA shall, subject to applicable
laws and regulations, to the extent practicable, provide volunteer speakers for
such workshops and seminars or assist State Street in finding suitable speakers.
ABRA shall be under no obligation to incur any expense in connection with such
workshops and seminars.
9.04 Introductions. At the request of State Street, ABRA shall
-------------
use reasonable efforts to introduce State Street representatives to (a) officers
and staff members of state and local bar associations and (b) appropriate ABA
officers and staff members.
9.05 Inclusion in ABA Mailings. At the request of State Street, ABRA
-------------------------
shall use reasonable efforts to arrange for ABA membership materials to include
such information about the Program as State Street determines to be appropriate
in accordance with the Annual Marketing Plan. At the request of State Street,
ABRA may request, on behalf of State Street, that the ABA include in mailings to
its members and non-members promotional material prepared by State Street
relating to the Program. State Street may select, subject to the consent of
ABRA and the ABA, the mailings in which such material are to be included.
9.06 Access to ABA Research. At the request of State Street, ABRA
----------------------
shall use reasonable efforts to obtain from the ABA and provide to State Street
any market research conducted by or on behalf of the ABA that the ABA will make
available to ABRA at the lowest price available to ABRA and that would assist
State Street in marketing the Program.
9.07 ABA Membership Lists. At the request of State Street, based on
--------------------
State Street's reasonable specifications, ABRA shall use reasonable efforts to
obtain from the ABA and provide to State Street, at the lowest price available
to ABRA, lists of ABA members to be used by State Street solely for purposes of
marketing the Program.
9.08 ABA Disclaimer. State Street acknowledges that ABRA has no
--------------
control, directly or indirectly, over the ABA and cannot cause the ABA to carry
out any of the activities described in Sections 9.04 through 9.07.
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9.09 Payment of ABRA's Expenses. State Street and ABRA shall pay
--------------------------
from their own funds all expenses incurred by ABRA or State Street, as the case
may be, pursuant to this Article IX.
ARTICLE X. REPORTS TO ABRA
- --------- ---------------
10.01 Investment Option Reports. State Street shall provide ABRA
-------------------------
with quarterly reports (including year-to-date information) setting forth (a)
the aggregate account balances in each Investment Option and Closed Option at
the beginning of the calendar quarter, (b) a summary of the aggregate
transactions affecting those account balances during the calendar quarter,
including the aggregate amount contributed and transferred to, and withdrawn and
transferred from, each Investment Option and Closed Option and (c) the aggregate
account balance in each Investment Option and Closed Option at the end of the
calendar quarter. State Street shall provide such other aggregate reports with
respect to the Investment Options as are reasonably requested by ABRA.
10.02 Fee Reports. State Street shall provide ABRA with quarterly
-----------
reports (including year-to-date information) setting forth the fees paid by
Participants, Employers and Investors (including trusts) under the Program
pursuant to Article XIII.
10.03 Trust Participation Reports. State Street shall provide ABRA
---------------------------
with quarterly reports (including year-to-date information) setting forth (a)
the number of Participants, Employers and Plans participating in, and the assets
held thereby, each Trust at the beginning of the calendar year, (b) the number
of Participants, Employers and Plans (and total assets attributable thereto)
that commenced or ceased to participate in each Trust during the period covered
by the report as a result of enrollments, withdrawals, death or retirement, (c)
the number of Participants, Employers and Plans participating in such Trust (and
total assets attributable thereto) at the end of the period covered by the
report, and (d) such other reports with respect to Trust participation as are
reasonably requested by ABRA. State Street will not be required to provide
Participant information with respect to Aggregate Recordkeeping Plans.
10.04 Transfer Reports. State Street shall provide ABRA with
----------------
quarterly reports (including year-to-date information) setting forth the level
of transfer activity pursuant to Section 6.03.
10.05 Service Reports. Quarterly, State Street shall provide ABRA
---------------
with reports setting forth (a) the frequency and nature of technical,
operational and other appropriate assistance provided pursuant to Section 5.05,
(b) the frequency and nature of investment election assistance provided pursuant
to Section 6.06, and (c) such other information as is reasonably necessary for
ABRA to determine the nature and extent of State Street's compliance with the
applicable Service Standards.
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10.06 Expense Reports. Quarterly, State Street shall provide ABRA
---------------
with a report setting forth the amount and a description of the various
categories of expenses assessed or charged pursuant to Section 13.04.
10.07 Annual Reports. State Street shall provide or make available
--------------
to ABRA such annual reports as are required by Section 6.02 of the ABA Members
Collective Trust, Sections 6.06 and 6.07 of the Master Trust and Sections 6.06
and 6.07 of the Pooled Trust.
10.08 Timing of Reports. Unless otherwise provided in this Article,
-----------------
all reports pursuant to this Article shall be delivered within such time frame
as is set forth in the applicable Service Standards.
ARTICLE XI. REVIEW OF COMMUNICATIONS MATERIAL AND COMMUNICATIONS BY ABRA
- ---------- ------------------------------------------------------------
11.01 Communications Consultant. State Street shall engage a
-------------------------
Communications Consultant who shall prepare, in consultation with State Street,
an annual communications plan which shall include recommendations regarding
forms, performance information, technical bulletins, newsletters and other
similar communication materials for participants and employers. A copy of the
annual communications plan shall be delivered to State Street, with a copy to
ABRA, during the first quarter of each calendar year during the term of this
Agreement or at such other time or times as shall be agreed upon by the parties.
State Street shall consult with ABRA regarding the recommendations contained in
the annual communications plan and State Street shall give full consideration
thereto.
11.02 ABRA's Review of State Street Communication Material. Certain
----------------------------------------------------
communications in connection with the Program, as determined by agreement
between State Street and ABRA from time to time will be furnished, on a timely
basis, by State Street to ABRA for prompt review. Such communications shall
include the Prospectus and, unless otherwise agreed, (a) all items described in
Section 11.01, (b) promotional materials, (c) proposed scripts for any outbound
telemarketing campaign, (d) outlines of programs, workshops or seminars and (e)
the format for any publications. Such review shall be conducted in accordance
with a reasonable schedule specified by State Street or, if none is specified,
within a reasonable period of time. State Street shall, subject to Section
11.01, make all final decisions regarding the form and content of
communications, subject to approval by any applicable regulatory authorities and
giving full consideration to any comments or suggestions made by ABRA in
connection with its review (except that any reference to ABRA or the ABA that is
objectionable to ABRA shall be revised to ABRA's satisfaction or shall not be
included). Within a reasonable period after such communications have been
provided to ABRA, State Street may use, distribute or otherwise make available
such communications at such time as it deems necessary or appropriate, provided
that final copies of such communications shall be provided to ABRA.
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11.03 Communications by ABRA. Subject to applicable laws and
----------------------
regulations, ABRA, as sponsor of the Program and not as an agent of State
Street, shall have the right to communicate with Participants and Employers from
time to time in connection with the Program. State Street shall make available
to ABRA, without cost, for such purpose any mailing list used by State Street
for general communication with Participants and Employers. From time to time
and as is reasonable, State Street shall, at ABRA's request, assist ABRA in
effecting communications pursuant to this Section and not otherwise in conflict
with State Street's responsibilities, duties and obligations under this
Agreement, provided that State Street shall receive reasonable compensation
and/or reimbursement for such services.
ARTICLE XII. ADDITIONAL AGREEMENTS AND COVENANTS OF STATE STREET
- ----------- ---------------------------------------------------
12.01 ABRA Program Services Unit. (a) State Street has established
--------------------------
and shall, as long as it is obligated to provide services hereunder, maintain
the ABRA Program Services Unit. The ABRA Program Services Unit shall be a
separate client services unit within State Street exclusively dedicated to and
having capabilities sufficient to provide the functions necessary (i) for the
effective and efficient operation of the Program, (ii) to meet the requirements
set forth in the Service Standards, the Annual Marketing Plan and the annual
communications plan described in Section 11.01 and (iii) to otherwise meet State
Street's obligations under this Agreement. As of the Renewal Date, State Street
shall provide ABRA with an annual staffing plan for the ABRA Program Services
Unit. Such plan will be updated and provided to ABRA at least annually at the
first Board meeting following the completion of State Street's internal annual
budget review/approval cycle, but no later than the meeting that occurs in the
third calendar quarter of each year.
The ABRA annual staffing plan shall include the following:
A. An organizational chart for the ABRA Program Services Unit,
displaying the reporting for each job.
B. State Street shall provide to ABRA an annual human resources
report that will include the number of current staff, job descriptions,
training programs, turnover rates, recruiting activities and similar information
related to personnel matters for the ABRA Program Services Unit.
(b) The expenses incurred by State Street for the ABRA Program
Services Unit shall not be charged to the Trusts or the ABA Members Collective
Trust.
12.02 Financial Condition and Organization. As promptly as
------------------------------------
practicable after such information either becomes legally available for
dissemination or is released to the public, State Street shall notify ABRA of
any change or pending change to the ownership, legal structure or organization
of State Street or any Affiliate or division thereof that provides any services
to or in connection with the Program.
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12.03 Insurance Certification. State Street shall provide to ABRA
-----------------------
within thirty (30) days of the Renewal Date a certificate of coverage with
respect to all insurance policies (including fiduciary and errors and omissions)
of State Street that could reasonably cover or relate to the Trusts, the ABA
Members Collective Trust or the Program, and will notify ABRA of any changes in
such coverage within thirty (30) days after the earlier of when the change is
made or when it becomes effective. From time to time ABRA may reasonably
request that State Street provide a copy of the applicable insurance policy.
State Street, its officers, directors and employees are exempt from the fidelity
bond requirements of Section 412 of ERISA, and nothing in this Agreement shall
be construed to require State Street to maintain such a fidelity bond for
itself, its officers, directors or employees.
12.04 Approval of Major Vendors. Within a reasonable period of time,
-------------------------
not less than fifteen (15) Business Days, prior to the hiring of a Major Vendor,
State Street shall submit to ABRA for ABRA's approval a summary of the proposed
terms for the hiring of such Major Vendor; provided, however, that if ABRA does
not approve such Major Vendor or the proposed terms of the arrangement, State
Street may engage such Major Vendor to provide services for the benefit of any
other client of State Street regardless of whether such Major Vendor will
continue to be available to provide services to the Program on the proposed
terms. The terms of State Street's contracts with Major Vendors shall be
consistent with State Street's responsibilities, duties and obligations under,
and not in conflict with the terms and conditions of, this Agreement, the Trusts
and the ABA Members Collective Trust, including, without limitation, Section
12.07. State Street shall provide to ABRA copies of such contracts when
executed. Notwithstanding the foregoing, ABRA's approval under this Section
shall not be required for the renewal or reengagement of a Major Vendor
previously approved by ABRA, provided that the terms of such renewal or
reengagement (other than fees) are not materially different than those
previously approved by ABRA.
12.05 Indemnification of ABRA by Major Vendors. State Street shall
----------------------------------------
use its best efforts to obtain from Major Vendors engaged primarily for the
benefit of the Program indemnification of the Indemnified Persons (as defined in
Section 14.04) for any act or omission of such Major Vendors, with provisions
similar to the provisions of Article XIV.
12.06 Non-Competition. During the term of this Agreement or any
---------------
successor agreement hereto and for two years following the Transfer Completion
Date, State Street shall not either directly or indirectly, alone or with
others, knowingly interfere with ABRA's relationships with Qualified Employers
including, but not limited to, contacting past, present or prospective Employers
for the purpose of offering them competing or alternative investment
opportunities as part of a marketing effort focused primarily on a sector of or
the entire legal community. ABRA hereby acknowledges that State Street is
currently and may in the future be engaged in marketing activities involving
competing or alternative investment opportunities for qualified retirement plans
of the type maintained under the Program that may reach sectors of the legal
community in a coincidental manner and that such activities are not prohibited
by this Section. This Section shall survive termination of this Agreement.
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12.07 Confidentiality. Except as provided below, State Street shall
---------------
hold in strict confidence all Program Data and Records and shall use such
Program Data and Records only to perform its obligations under this Agreement
and to fulfill its obligations in connection with the Program. State Street
acknowledges that State Street has no right or title in or to (including without
limitation copyright rights in) the Program Data and Records and collections or
compilations of such Program Data and Records. To the extent State Street would
have any right or title in or to the Program Data and Records and collections or
compilations of such Program Data and Records, it hereby assigns to ABRA all of
such rights (including without limitation copyright rights). State Street may
disclose Program Data and Records as necessary for State Street to perform its
obligations under this Agreement, but wherever possible, State Street shall
disclose Program Data and Records only to ABRA, individuals within the State
Street organization and third parties engaged by State Street who have a need to
know such information in order for State Street to perform its obligations under
this Agreement and to fulfill its obligations in connection with the Program;
provided, however, that State Street shall use its best efforts to cause third
parties who have access to Program Data and Records to enter into a
confidentiality agreement with respect to such Program Data and Records. State
Street acknowledges that the foregoing obligations include the obligation of
State Street not to reveal (a) any such Program Data and Records regarding
individual Participants, Employers or Investors or (b) any Program Data or
Records that could be used directly or indirectly to identify an individual
Participant, Employer or Investor except when the Participant, Employer or
Investor so requests. The foregoing obligations shall not apply to any of the
following: (w) information rightfully known to State Street, without continuing
restrictions on disclosure, prior to being supplied to State Street as part of
the Program Data and Records, (x) information that is or becomes generally known
to the public or in the trade other than through a failure on the part of State
Street to observe its obligations hereunder, (y) information that is
independently developed or rightfully obtained without continuing restrictions
on disclosures from third parties by State street otherwise than under the
Program or (z) information that State Street must disclose to comply with
federal or state statutory or regulatory requirements or pursuant to a judicial
or administrative order; provided that State Street shall consult with ABRA
prior to making any such disclosure to the extent possible and shall provide
ABRA reasonable notice to enable ABRA to resist any disclosure pursuant to
12.07(z). This Section shall survive termination of this Agreement. If
requested by ABRA, State Street shall include a copyright notice or other
proprietary rights legend on all human and machine readable copies of the
Program Data and Records, including any electronic data files containing the
Program Data and Records and the media for such data files. The form and
content of any such notice or legend shall be determined by ABRA.
12.08 Copyright of Trusts and ABA Members Plans. State Street shall
-----------------------------------------
not interfere with or otherwise impede ABRA's efforts to protect the Trusts and
the ABA Members Plans by copyright and State Street shall not infringe on any
such copyrights. State Street shall have the right and license to reproduce and
distribute the Trusts and ABA Members Plans to the extent necessary or
appropriate in connection with the performance of its duties under this
Agreement. If requested by ABRA, State Street shall include a copyright notice
or other proprietary rights legend on all human and machine readable copies of
the Trust and ABA
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Member Plans, including any electronic data files containing the Trust and ABA
Members Plans and the media for such data files. The form and content of any
such notice or legend shall be determined by ABRA.
12.09 Maintenance and Disposition of Program Data and Records. For
-------------------------------------------------------
one year following the Transfer Completion Date, State Street shall maintain one
copy of all Program Data and Records that are maintained electronically on
magnetic tape for the last accounting period for which State Street was
responsible under this Agreement and that are Participant, Plan, Employer or
Investor records. At the end of such one year period, to the extent permitted
by applicable law and the customary practices of State Street with respect to
such matters, State Street shall destroy all copies of Program Data and Records
in its possession and control, unless ABRA and State Street shall otherwise
agree in writing. This Section shall survive termination of the Agreement.
Prior to any such destruction, State Street shall provide to ABRA a copy of any
such Program Data and Records to be destroyed by State Street. The copy shall
be in electronic or such other form as may be reasonably requested by ABRA;
provided, however, that ABRA shall pay the reasonable expenses associated with
- -------- -------
making such copy if the format requested is not the standard format in which
State Street maintains such Program Data and Records. Upon request by ABRA,
State Street shall provide a description or samples of such standard format.
12.10 Rights to Software Following Termination. Following any
----------------------------------------
termination of this Agreement, State Street shall provide ABRA with access to
computer software used in connection with the Program as follows:
(a) Subject to Section 12.10(e), State Street shall actively
cooperate with and assist ABRA in obtaining licenses for software systems used
in connection with the Program from outside vendors from whom State Street has
licensed such software (including but not limited to Dyatron Omni Plan DPR and
National FSI Plus System Software); provided, however, that any costs in
connection with such action incurred by State Street shall be reimbursed by ABRA
or any successor trustee or successor recordkeeper for the Program.
(b) In accordance with this Section, State Street shall
grant to ABRA, without charge, a perpetual, non-exclusive, non-transferable
license to use State Street Software solely in connection with the
administration of the Program. Such State Street Software shall be provided in
object code form only. Upon ABRA's written request in accordance with Section
15.05, State Street and ABRA shall negotiate the terms of such license generally
on the terms set forth in this Section:
(i) such license may not be assigned to any third
party, but may be sublicensed by ABRA to a third party
exclusively for use in connection with the administration of
the Program, provided that such third party shall enter into
a written agreement (which is reasonably satisfactory to
State Street) for the benefit of State Street, pursuant to
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which such party agrees to the terms and conditions
substantially as set forth in this Section in connection
with its use of the State Street Software;
(ii) any State Street Software licensed pursuant to
this Section shall be licensed on an "AS IS" basis;
(iii) State Street shall make no warranties, express
or implied, including warranties of merchantability and
fitness for a particular purpose with respect to such State
Street Software;
(iv) State Street shall not be liable for any damages,
including incidental or consequential damages, arising out
of the use and performance of such State Street Software
other than those portions of such damages resulting from
State Street's intentional wrongdoing, and except to the
extent provided in clause (v) hereof;
(v) State Street shall make no representations and
shall provide no indemnification regarding infringement of
patents, copyrights, trademarks, trade secrets or other
proprietary rights except that State Street shall indemnify
ABRA against any liability to third parties resulting from
any infringement of such rights of which State Street has
actual knowledge; provided that State Street shall receive
both prompt notice of any claim of such infringement and the
opportunity to assume and continue the defense of any such
claim at its own expense, and shall not be liable under any
settlement agreement entered into without its prior written
consent and provided, further, that ABRA acknowledges that
the provisions of Article XIV do not apply with respect to
any indemnification pursuant to this Section;
(vi) ABRA shall acknowledge that, except for the
license pursuant to this Section, ABRA has no right or title
in or to any proprietary rights (including without
limitation copyright rights) in such State Street Software
or any of its component parts and ABRA shall further
acknowledge that all State Street Software is proprietary to
State Street; and
(vii) ABRA shall agree not to sell, transfer,
disclose, display or otherwise make available such State
Street Software or any copies (other than a reasonable
number of copies for back-up and archival purposes only) or
portions thereof to any person without the prior written
consent of State Street and not to use such State Street
Software, or permit its use by any person, for any purpose
other than in connection with the administration of the
Program. State Street and ABRA may negotiate a
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reasonable fee payable to State Street and may agree that
State Street will provide to ABRA in connection with such
State Street Software maintenance, additional support, and
any subsequent enhancements that State Street develops and
makes generally available to its clients for whom such State
Street Software is used.
(c) In connection with any State Street Software licensed
pursuant to Section 12.10(b), State Street shall agree to provide to ABRA copies
of all operator and user manuals and training materials then in existence for
use in conjunction with such State Street Software. ABRA shall agree not to
sell, transfer, disclose, display or otherwise make available such operator and
user manuals and training materials to any person except in connection with a
sublicense granted pursuant to Section 12.10(b)(i).
(d) ABRA acknowledges that it has no rights to State Street's
systems that are not developed, acquired, used or enhanced in connection with
the Program, including, but not limited to, the asset custody reporting and
accounting systems and securities clearance systems and any enhancements to such
systems (without regard to whether such enhancements were developed for the
purposes of the Program), whether developed by State Street or licensed or
acquired from third parties and whether existing at the time of execution of
this Agreement or at any time thereafter.
(e) Following any termination of this Agreement, State Street
shall grant to ABRA, subject to payment of the royalty fee described below, a
perpetual, non-exclusive, non-transferrable license to use such modification and
enhancements to the State Street Software created by State Street after the
Renewal Date and the terms of such license shall include the terms and
conditions of subsection 12.10(b)(i)-(vii); provided that such license will
contain a reasonable royalty fee payable to State Street, which shall be reduced
in proportion to the percentage of total development costs for such State Street
Software that have been amortized by State Street during the term of this
Agreement.
12.11 Investment Advisor Agreements. State Street shall provide ABRA
-----------------------------
with copies of all (a) Investment Advisor Agreements, (b) notices required under
the Investment Advisor Agreements, and (c) reports required under the Investment
Advisor Agreements.
12.12 No Directed Brokerage. In selecting brokers or dealers for the
---------------------
execution of transactions effected directly for the Funds, State Street shall
not consider the availability and value of research that may be provided to
State Street by such broker or dealer. The ability to direct brokerage when
research may be provided to any Investment Advisor or State Street shall be
negotiated by State Street and ABRA with respect to any New Investment Option
offered or managed by State Street.
12.13 Notice of Change in Status or Regulatory Action. Subject to
-----------------------------------------------
applicable laws and regulations, State Street shall promptly notify ABRA of (a)
any change in its status as a bank, (b) any notice by any governmental agency of
the intent to place material limitation on the
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activities of State Street that relate to or affect the Program, or (c) the
receipt of formal notice of the commencement of any proceedings by any
governmental agency to take any action that would change State Street's status
or the status of the Program under the Investment Company Act of 1940, as
amended. State Street shall notify ABRA of such information as soon as such
information is available for public disclosure.
12.14 Performance by Affiliates. The parties acknowledge that State
-------------------------
Street may cause one or more of its Affiliates, including State Street Global
Advisors to perform services in satisfaction of State Street's obligations under
this Agreement. State Street hereby guarantees the performance of such
Affiliates and shall be liable therefor to the same extent as if State Street
had directly performed such obligations. State Street further agrees, and it
shall take any and all action as shall be necessary to require, that any
obligation imposed on it hereunder shall also be assumed by any Affiliate it
designates to perform any activity hereunder, and to the extent of such
designation, ABRA shall have the same rights with respect to such Affiliate as
ABRA has with respect to State Street. In furtherance thereof, but not as a
limitation, State Street agrees each such Affiliate shall be subject to, and
that it shall take any and all action as shall be necessary to cause each such
Affiliate to be subject to all the provisions of this Article XII and Sections
14.04, 14.05, 14.06, 14.07, 14.10, 16.06, 16.08 and 16.09, as if such Affiliate
were a party to this Agreement.
ARTICLE XII. FEES AND EXPENSES
- ----------- -----------------
13.01 State Street's Fees. State Street shall be compensated under
-------------------
the Program by payment of the program expense fee and the trust, management and
administration fee in accordance with the terms contained in Appendix C hereto,
----------
which fees as of the Renewal Date shall relate only to the Investment Options
and Closed Options, services and obligations of State Street under this
Agreement as of the Renewal Date. The program expense fee shall be in
consideration of State Street's recordkeeping, administration, enrollment,
marketing, client retention and similar services required hereunder. The trust
management and administration fee shall be in consideration of State Street's
fiduciary (including investment management), trustee, custodial and similar
services rendered hereunder. Appendix C shall set forth all of the fees payable
----------
to State Street in connection with the Program as of the Renewal Date and no
provision of the ABA Members Collective Trust or the Trusts shall entitle State
Street to additional compensation. Nothing in this Section shall preclude the
payment of expenses of the Program or Plans to the extent permitted by Section
13.04.
13.02 ABRA's Fees. ABRA shall be compensated under the Program in
-----------
accordance with the terms contained in Appendix D hereto, which fees as of the
----------
Renewal Date shall relate only to the Investment Options and Closed Options,
services and obligations of ABRA under the Employer Plans and under this
Agreement as of the Renewal Date. The fee schedule set forth in Appendix D may
----------
be increased only by written notification of such increase to all Employers, and
shall not be effective less than 60 days after such notification.
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13.03 Additional Services. State Street's obligations to perform
-------------------
services not required or agreed to under this Agreement shall be conditioned on
ABRA's agreement to allow State Street to charge a reasonable fee for such
services. If the cost to State Street to provide additional services is minimal
both individually and in the aggregate (from the Renewal Date through the date
such services are contemplated) then State Street shall be deemed to have waived
its right to an additional reasonable fee pursuant to this Section. If ABRA and
State Street are unable to reach agreement under this Section within ninety (90)
days of commencing negotiations, they shall submit the fee for such services to
arbitration in accordance with Section 16.10 and State Street shall provide such
services, pending the results of arbitration, for the last fee it proposed for
such services prior to submitting to arbitration, subject to retroactive
adjustments based upon the fee as determined by arbitration.
13.04 Expenses. (a) General. Expenses of operation of the Program,
-------- -------
the Plans, the Trusts and the ABA Members Collective Trust, as are permitted by
applicable laws and regulations and this Agreement, shall be charged to and paid
from the assets of the Trusts or the ABA Members Collective Trust (and charged
to each Investment Option, Closed Option, Participant or Plan account, as
applicable), for which such expenses are incurred. Except as otherwise provided
in this Agreement, such expenses shall include but are not limited to (i)
brokers' fees and commissions, (ii) transfer and other taxes, (iii) custodians'
fees (including without limitation custodians' fees paid to State Street and its
Affiliates, to the extent permitted by applicable law, including without
limitation, the prohibitions of Part 4 of Title I of ERISA), (iv) Securities and
Exchange Commission fees, (v) state securities registration fees, (vi) Internal
Revenue Service user fees, (vii) fees and expenses paid pursuant to any
Investment Advisor Agreement or any Investment Manager Agreement, (viii) fees
paid to a consultant engaged pursuant to the first sentence of Section 4.03,
(ix) other reasonable independent legal, independent auditing, printing and
mailing expenses incurred in the preparation of Securities and Exchange
Commission and state securities filings, no-action letters or reports , (x)
printing and mailing costs incurred in connection with providing the Prospectus
and related materials to Investors and prospective Investors who have
communicated indications of interest in the Program, and (xi) expenses as
permitted under Section 14.10. To the extent that State Street pays any expenses
with respect to a particular Investment Option, Closed Option, Participant
account or Plan account which are properly chargeable pursuant to this Section
to a Trust or the ABA Members Collective Trust, as the case may be, it shall be
entitled to reimbursement therefrom.
(b) Budgets. Not later than the meeting of the Board held in
-------
the fourth quarter of the preceding year, State Street shall present ABRA a
detailed budget of each of the categories of expenses, including without
limitation, the categories listed in subsection (a) above, to be charged to the
ABA Members Collective Trust or the Trusts for the next calendar year. At each
meeting of the Board during such calendar year, State Street shall deliver a
status report listing the categories of expense and expenses incurred to date as
compared to such budget. ABRA may make comments and recommendations with respect
to such budgets and status reports, and State Street shall give full
consideration thereto. Any item of expense properly chargeable to the Trusts or
the ABA Members Collective Trust under Section 13.04 may be so charged even if
State Street fails to include an item of expense in such Budget or if such
expense items exceed such budget; provided that, such expenses are approved by
ABRA in accordance with Section 13.04(d) below.
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(c) Amortization Schedules. If State Street shall determine
----------------------
that any expenses otherwise chargeable to the ABA Members Collective Trust or
the Trusts are to be amortized over a period of months or years, State Street
shall prior to the commencement of such amortization provide to ABRA a detailed
schedule of such expenses, the period of amortization and the reasons therefor.
ABRA may make comments and suggestions with respect to the need for and the
structure of any such amortization schedule, and State Street shall give full
consideration thereto. If an unknown item of expense or an adjustment of any
expense is uncovered after such amortization schedule has been approved by ABRA,
then State Street shall provide ABRA with a detailed schedule of such expenses
and adjustments and the period of amortization and the reasons therefor.
(d) Approval of Certain Expenses. State Street shall not
----------------------------
charge any item of expense in excess of $10,000 against the Trusts or the ABA
Members Collective Trust not described in clauses (i) through (vii) of Section
13.04 (a) above (or seek reimbursement thereof) without providing to ABRA
written notice thereof setting forth a description of such expense and the
reason State Street believes such expense should be paid by the Trusts or the
ABA Members Collective Trust, as the case may be, unless such expense is
included in and not in excess of the appropriate amount budgeted pursuant to
Section 13.04 (b) above. If ABRA and State Street shall be unable to agree
regarding the propriety or amount of any such expense to be charged to the ABA
Members Collective Trust or the Trusts, as the case may be, ABRA and State
Street shall submit the issue to arbitration in accordance with Section 16.10.
(e) Certain Expenses not Chargeable. For purposes of this
-------------------------------
Section 13.04, expenses of operation of the Program, the Plans, the Trusts and
the ABA Members Collective Trust shall not include (a) marketing expenditures
incurred pursuant to Article VIII, (b) the fees charged and expenses incurred by
any Communications Consultant or (c) salaries, fringe benefits, taxes and
overhead attributable to the ABRA Program Services Unit or other personnel or
operations of State Street or its Affiliates, or travel expenses of any such
personnel.
ARTICLE XIV. LIMITATION OF LIABILITY AND INDEMNIFICATION
- ----------- -------------------------------------------
14.01 Limitation of Liability for Instructions from Participants,
-----------------------------------------------------------
Employers or Investors. Except as otherwise provided by laws or regulations,
- ----------------------
neither ABRA nor State Street (in each of its various capacities under the
Program) shall be liable for any act or omission made in accordance with its
obligations under this Agreement, the ABA Members Collective Trust, the ABA
Members Plans or the Trusts to the extent that such act or omission was made in
good faith, without negligence, and in accordance with an instruction or
information provided by a Participant, Employer or Investor, where the party in
question had no reason to believe that such instruction or such information was
unauthorized or incorrect.
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14.02 Limitation of Liability For Instructions From ABRA. Except as
--------------------------------------------------
otherwise provided by laws or regulations, State Street (in each of its various
capacities under the Program) shall not be liable to ABRA (or other Indemnified
Persons) for any act or omission made in good faith, without negligence, and in
accordance with the express advance written approval or instructions of ABRA
under this Agreement (including any approval or instructions with respect to an
Investment Manager that has not been recommended by, and is not, State Street).
14.03 Limitation of Liability for Acts of Third Parties. Except as
-------------------------------------------------
otherwise provided by laws or regulations, neither ABRA nor State Street (in
each of its various capacities under the Program) shall be liable for any act or
omission of any person or entity (other than an affiliate of ABRA, in the case
of ABRA, or an Affiliate, in the case of State Street), that acts or has acted
as a fiduciary or service provider to a Plan, a Trust or the ABA Members
Collective Trust pursuant to delegation of fiduciary responsibility under such
Plan or trust, this Agreement or the Investment Manager Agreements. State
Street shall not be liable for any act or omission of Equitable.
14.04 Indemnification. State Street agrees to defend, indemnify and
---------------
hold harmless ABRA, its then-present and former officers, directors, advisory
directors, employees, the ABA, and its then present and former officers, and the
Board of Governors (the "Indemnified Persons") against any and all expenses
(including attorneys' fees, subject to Section 14.05), judgments, fines,
penalties (including any civil penalties assessed under Section 502(1) of ERISA)
and amounts paid in settlement, actually and reasonably incurred in connection
with any threatened, pending or current action, suit, proceeding or claim,
whether civil, criminal, administrative or otherwise, and the amount of any
adverse judgment entered against any of them and reasonable expenses attendant
thereto by reason of any of State Street's acts or omissions in connection with
the Program, subject to the limitations of Sections 14.01, 14.02 and 14.03. For
the above defense, indemnity and hold harmless provision to apply (a) the
Indemnified Persons shall inform State Street promptly of any claims threatened
or made against any Indemnified Person, (b) the Indemnified Persons shall
cooperate fully with State Street in responding to such threatened or actual
claims, and (c) any settlement agreement shall require the written approval of
State Street, which consent shall not be unreasonably withheld or delayed. This
Section shall survive termination of this Agreement.
14.05 Counsel for Indemnified Persons. State Street agrees to
-------------------------------
cooperate fully with the Indemnified Persons in responding to any threatened or
actual claims. Each Indemnified Person shall have the right to employ counsel
in its, his or her sole discretion. However, none of State Street, the Trusts
nor the ABA Members Collective Trust shall be liable (a) for any legal or other
expenses incurred in connection with any such threatened, pending or current
actions, suit, proceeding or claim (whether civil, criminal, administrative or
otherwise), or defense to any of the foregoing, that were not specifically
authorized by State Street or (b) for reasonable attorneys' fees for the
Indemnified Persons unless State Street shall have received a written opinion
reasonably acceptable in form and substance to State Street of counsel
reasonably acceptable to State Street (and which counsel shall not represent or
otherwise be affiliated with any of the Indemnified Persons) that there exists a
material conflict of interest
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either (y) between such (i) Indemnified Persons and (ii) State Street or (z)
among such Indemnified Persons, each in the conduct of the response to a
threatened claim or in the conduct of the defense of an actual claim in which
event State Street shall be liable for the reasonable legal expenses of each
counsel whose appointment is necessary to resolve such conflict; provided,
however, that if any threatened, pending or current actions, suit, proceeding or
claim, or defense to any of the foregoing, is civil in nature, State Street, the
Trusts and the ABA Members Trusts, collectively, shall not be responsible for
the reasonable attorneys' fees with respect to more than one (1) counsel for all
Indemnified Persons, collectively.
14.06 Contribution. In order to provide for just and equitable
------------
contribution in circumstances in which the terms of Section 14.04 are
applicable, but the indemnification provided for therein is held for any reason
to be unavailable or unenforceable, the Indemnified Persons shall contribute to
the aggregate expenses (including attorneys' fees, subject to Section 14.05),
judgments, fines, penalties (including any civil penalties assessed under
Section 502(l) of ERISA) and amounts paid in settlement, actually and reasonably
incurred in connection with any threatened, pending or current action, suit,
proceeding or claim, whether civil, criminal, administrative or otherwise, which
such Indemnified Persons and State Street may be subject to or liable for in the
following proportions: the Indemnified Persons collectively shall contribute
one-one thousandth of one percent (0.001%) of such losses, claims, damages,
expenses and liabilities, and State Street shall contribute the balance thereof.
State Street shall have no other right of contribution from any of the
Indemnified Persons.
14.07 Enforcement of Rights. If an Indemnified Person is reasonably
---------------------
required to bring any action to enforce rights or collect monies due under this
Article and is successful in such action, State Street shall reimburse such
Indemnified Person or its subrogee for reasonable fees (including attorneys'
fees in accordance with Section 14.05) and expenses incurred in bringing and
pursuing such action.
14.08 Supplemental Indemnification. Indemnification pursuant to this
----------------------------
Article is intended to be supplemental to any other rights to indemnification
available to the Indemnified Persons. Nothing herein shall be deemed to
diminish or otherwise restrict the Indemnified Persons' rights to
indemnification under applicable laws.
14.09 Interests of ABA Members Collective Trust, Trusts and ABA
---------------------------------------------------------
Members Plans. In accordance with the ABA Members Collective Trust and the
- -------------
Trusts, State Street shall, whenever in its judgment any interest of the Program
so requires, acting on behalf of the ABA Members Collective Trust or the Trusts,
(a) settle, compromise, abandon or submit to arbitration any claim or demand, or
(b) commence or defend any suit or legal proceeding. State Street shall
represent the ABA Members Collective Trust and the Trusts in any arbitration,
suit or legal proceeding in any court or before any other body or tribunal.
ABRA, as sponsor of the ABA Members Plans, shall represent the ABA Members Plans
in any arbitration, suit or legal proceeding in any court or before any other
body or tribunal; provided, however, that if State Street, the Trusts or the ABA
Members Collective Trust is also involved in such arbitration, suit, or legal
proceeding, State Street shall control the arbitration, suit or legal proceeding
on behalf of
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the Program (except to the extent provided in 14.04 and 14.05), including but
not limited to selecting counsel, determining the appropriate litigation
strategy, and determining (to the extent possible) the forum for such
arbitration, suit or proceeding, provided that State Street shall from time to
time (not less than quarterly) inform ABRA of the progress of such litigation
and ABRA shall have the right to make suggestions and comments regarding State
Street's control of such litigation.
14.10 Payment of Expenses. Expenses (including attorneys' fees)
-------------------
specifically authorized by State Street pursuant to Section 14.05 and actually
and reasonably incurred by the Indemnified Persons in defending against or
responding to such threatened or actual claims shall be paid by State Street as
they are incurred. State Street may charge such expenses and any expenses
pursuant to Section 14.09, each to the extent appropriate, as expenses of the
Trusts and the ABA Members Collective Trust (to the extent provided in Section
13.04); provided however, that State Street may do so only (a) if the gravamen
of the action, suit, proceeding or claim is principally the result of State
Street, the Program, the Trusts, the Plans or the Collective Trust being a
stakeholder or (b) in any other case in which a gravamen of the complaint is not
an alleged breach of this Agreement or duty by State Street; provided, further,
that to the extent appropriate, such expenses shall be charged to the particular
Plan or affected Participant's account involved in the action, suit, proceeding
or claim. Notwithstanding the foregoing, expenses resulting from any
threatened, pending or current action, suit, proceeding or claim, or defense to
any of the foregoing, relating principally to an act or omission of Equitable,
to the extent that they are not covered by and paid under the Administrative
Services Agreement between Equitable and ABRA dated October 4, 1985, shall be
charged as expenses of the Trusts and the ABA Collective Trust.
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ARTICLE XV. TERMINATION OF AGREEMENT
- ---------- ------------------------
15.01 Termination by State Street. State Street may not terminate
---------------------------
this Agreement prior to the close of business on December 31, 2002, except that
State Street may terminate this Agreement for Cause at any time, upon six (6)
months prior delivery of a Notice of Termination, which Notice may be delivered
only at or after the end of any correction or cure period provided in Section
15.02. State Street may terminate this Agreement effective at the end of any
quarter after the close of business on or after December 31, 2002 by delivering
Notice of Termination to ABRA at least twelve (12) months prior to the Date of
Termination specified therein.
15.02 Termination For Cause. The following behavior shall constitute
---------------------
Cause under this Agreement:
(a) the offering directly or indirectly to Qualified
Employers by ABRA of any investment product that is not offered pursuant to the
terms of this Agreement and is marketed for use in qualified retirement plans;
or
(b) the offering directly or indirectly to Qualified
Employers by the ABA or its agents (other than any plan offered to employees of
the ABA) of any investment product that is not offered pursuant to the terms of
this Agreement and is marketed principally for use in qualified retirement
plans, if within sixty (60) days of the date on which ABRA becomes aware of such
offering or a proposal to commence such offering, the ABA or its agents or
affiliates have not ceased such offering or ABRA has not reached an agreement
with State Street as to the conduct of the offering; provided that if ABRA or
State Street becomes aware of such an offering or proposal, it shall give prompt
written notice to the other and ABRA shall be deemed aware of such offering on
the date on which it gives or receives such notice, as applicable; or
(c) the removal of State Street as Trustee or other material
change in the rights, responsibilities or obligations of State Street as
Trustee, except if such removal or change is the result of ABRA's exercise of
its rights in accordance with Section 4.02; or
(d) any material violation of this Agreement or the Trusts
that ABRA fails, within thirty (30) days of receipt of written notice thereof
from State Street to correct, or as to which ABRA fails to reach a written
agreement with State Street, as to an appropriate time frame for correction or
other resolution and which is not corrected or otherwise resolved within such
appropriate time frame.
15.03 Termination by ABRA. ABRA may terminate this Agreement at any
-------------------
time by delivery to State Street of a Notice of Termination at least six (6)
months prior to the Date of Termination specified therein.
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15.04 Consent to Termination. All Participants, Investors and
----------------------
Employers shall be deemed to have consented to such termination and shall have
no right to withhold such consent.
15.05 Notice of Termination. If ABRA terminates this Agreement, its
---------------------
Notice of Termination shall specify (a) whether an Extension Period is required,
(b) the length of any such Extension Period and (c) whether ABRA is requesting
to commence negotiations for a license to State Street Software pursuant to
Section 12.10(b). If State Street terminates this Agreement, ABRA may require
an Extension Period by furnishing State Street, within forty-five (45) days
following ABRA's receipt of State Street's Notice of Termination, with a written
notice specifying the length of any such Extension Period. ABRA may request to
commence negotiations for a license to State Street Software pursuant to Section
12.10(b) by furnishing State Street with written notice of such request either
within thirty (30) days following ABRA's receipt of State Street's Notice of
Termination or as part of ABRA's Notice of Termination, as applicable. After
any such Notice of Termination is given, regardless of whether an Extension
Period is required, State Street shall continue to provide all services
(including marketing services as described in the then-current Annual Marketing
Plan) under this Agreement through the Transfer Completion Date.
15.06 Extension Period. Any Extension Period shall be a sufficient
----------------
period of time after the Date of Termination to permit an orderly transfer of
its responsibilities to a successor recordkeeper and successor Trustee, which
Extension Period shall not exceed one (1) year from the Date of Termination,
unless ABRA and State Street otherwise agree in writing. If an Extension Period
is required pursuant to Section 15.05, the Transfer Completion Date shall be the
end of such Extension Period. State Street shall continue to serve as Trustee
during the Extension Period, and all fees and expenses shall continue to be paid
as in effect immediately prior to the Extension Period.
15.07 Conversion. No later than the Transfer Completion Date, State
----------
Street shall provide ABRA with Program Data and Records pursuant to Section
15.08. ABRA may require that, from the date Notice of Termination is given
until the Transfer Completion Date, State Street cooperate with a successor
recordkeeper and assist in such recordkeeper's development and implementation of
a conversion program by furnishing such assistance as is reasonably necessary
for the development and implementation of a conversion program, provided that
State Street shall receive reasonable compensation for such services. In any
event, State Street shall not be responsible or liable for the development or
implementation of a conversion program or the results of any attempt to develop
or implement a conversion program, whether or not successful.
15.08 Transfer to Successor Recordkeeper and Trustee. After the date
----------------------------------------------
Notice of Termination is given and as promptly as practicable after State Street
receives a written request from ABRA and no later than the Transfer Completion
Date, State Street shall provide to a successor recordkeeper and successor
Trustee, (a) two (2) copies of all Program Data and
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Records maintained electronically on magnetic tape and established and
maintained pursuant to this Agreement in their then-current form and (b) the
then-current Program Data and Records. Such Program Data and Records shall be
timely and accurate and shall be provided in the format and layout used by State
Street, with complete and accurate descriptions and explanations of the fields,
formats and layouts of the computerized Program Data and Records.
15.09 Transfer of Program Assets. State Street shall arrange for the
--------------------------
transfer, no later than the Transfer Completion Date, of the assets of the
Trusts and, to the extent applicable, the ABA Members Collective Trust in
accordance with the terms of the Trusts, the ABA Members Collective Trust and
the ABA Members Plans to any person permissible under applicable laws and
regulations and designated in writing by ABRA.
ARTICLE XVI. MISCELLANEOUS
----------- -------------
16.01 Service Standards. State Street shall perform each and every of
-----------------
its duties and responsibilities hereunder in accordance with the highest
standard of care applicable to persons performing services of the type required
hereunder and shall always apply the best practices reasonably available to it
when carrying out such duties and responsibilities. State Street and ABRA shall
identify certain of the services to be performed by State Street pursuant to
this Agreement, the performance of which shall be governed by the Service
Standards set forth on Appendix A and incorporated as part of this Agreement as
----------
the Service Standards. From time to time, State Street and ABRA may agree in
writing to amend the Service Standards. If State Street shall in any agreement
with another client of comparable size (as measured by assets or number of
participants) agree to comply with a higher standard of performance than that
required by Appendix A, State Street shall promptly notify ABRA of such event
and Appendix A shall be deemed to have been automatically amended to include
such higher standard of performance.
16.02 Plan Disqualification. If it is determined that a Plan does not
---------------------
meet the requirements for qualification under the Code, State Street may
withdraw from the Funds any or all amounts attributable to that Plan and pay
such amounts as required by the Plans and Trusts and in accordance with
applicable law.
16.03 Agents of ABRA. With respect to any provision of this
--------------
Agreement, but subject to applicable laws and regulations, the Board may
designate in writing to State Street one or more authorized representatives to
act on behalf of ABRA, in which case State Street shall be entitled to
communicate with such representatives, until such time as ABRA provides written
notice to the contrary, and actions by such representatives shall be binding on
all parties.
16.04 Good Faith. Both ABRA and State Street shall have an obligation
----------
to consent, respond, agree, provide notice, give and consider comments or
recommendations, negotiate, approve, cooperate and otherwise act in good faith
and on a reasonably timely basis with respect to each provision of this
Agreement, the ABA Members Collective Trust and the
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Trusts. Even if not expressly stated herein, no consent, approval or endorsement
of ABRA or State Street under this Agreement shall be unreasonably withheld or
delayed.
16.05 Compliance with Laws. State Street shall comply, shall cause
--------------------
the ABA Members Collective Trust and the Trusts to comply and shall cooperate in
assisting ABRA and any other person or entity providing such services in
complying, with all applicable employee benefit, securities, banking and
insurance laws and regulations. ABRA shall comply, shall cause the ABA Members
Plans and the Trusts to comply and shall cooperate in assisting State Street and
any other person or entity providing such services in complying, with all
applicable employee benefit, securities, banking and insurance laws and
regulations, including without limitation by providing any information
reasonably available to ABRA that is reasonably requested by State Street and by
assisting State Street in obtaining such other information as may be reasonably
requested by State Street, each in connection with action taken by State Street
under this Agreement or to obtain any opinion letter, ruling, no-action letter
or interpretive request filed with or requested from the Internal Revenue
Service, the Department of Labor, the Securities and Exchange Commission or any
similar state securities regulatory authority.
16.06 Audits. As sponsor of the ABA Members Plans and on behalf of
------
Participants, Employers and Investors, ABRA may, for the purpose of providing
assurance that State Street is fulfilling its obligations under this Agreement,
the ABA Members Collective Trust and the Trusts, at any time and from time to
time, audit (either by itself or through auditors it may appoint), the
facilities, operations and Plan records of State Street that relate to State
Street's fulfillment of its duties, responsibilities and obligations under this
Agreement, the ABA Members Collective Trust and the Trusts. State Street shall
cooperate with ABRA or auditors appointed by ABRA for such purpose. The cost of
such audit shall be paid from ABRA's own funds unless such audit discloses an
error in Program accounting or records that requires an adjustment to
Participants' accounts, a change in State Street's internal accounting
procedures or discloses State Street's failure to comply with Service Standards,
in which case State Street shall pay such cost. Nothing in this Section shall
give ABRA the right to a financial audit of State Street.
16.07 Amendment. This Agreement and Section 6.08 of the ABA Members
---------
Collective Trust may be amended only by a written instrument executed by ABRA
and State Street. All Participants, Employers and Investors shall be deemed to
have consented to any such amendment and shall have no right to withhold such
consent.
16.08 Assignment. Neither ABRA nor State Street may assign its rights
----------
or obligations under this Agreement, any Investment Advisor Agreement or any
Investment Manager Agreement without the other's prior written consent. For
purposes of this Section, a merger, reorganization or transfer of substantially
all of the assets of ABRA to a successor organization shall not constitute an
"assignment" of this Agreement, but (i) a merger, consolidation or
reorganization of State Street or the transfer of substantially all its assets
to a successor organization, shall constitute an "assignment" of this Agreement,
unless State Street is the survivor in any such transaction and after such
transaction, State Street is controlled by State
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Street Corporation, (ii) a merger, consolidation or reorganization of State
Street Corporation or the transfer of substantially all its assets to a
successor organization shall constitute an "assignment" of this Agreement unless
State Street Corporation is the survivor in any such transaction and it is not
controlled by another organization and (iii) any spin-off, split-up or other
corporate separation pursuant to which State Street is no longer controlled by
State Street Corporation shall constitute an "assignment" of this Agreement.
16.09 Choice of Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of Illinois applicable to agreements to
be performed in that state; provided however, that (a) the ABA Members
Collective Trust and the Trusts shall be governed by and construed in accordance
with the applicable laws of The Commonwealth of Massachusetts, (b) the ABA
Members Plans shall be governed by and construed in accordance with the
applicable laws of the State of Illinois and (c) in the event of a conflict of
laws in any dispute between (i) this Agreement and (ii) any of the ABA Members
Collective Trust, the Trusts or the ABA Members Plans, the laws of The
Commonwealth of Massachusetts shall govern (without regard to choice of law
principles thereunder).
16.10 Arbitration of Disputes. Any dispute or controversy between ABRA
-----------------------
and State Street arising under, out of, or in connection with or in relation to
this Agreement (whether or not arising under provisions specifically referring
to this Section), the ABA Members Collective Trust, the Trusts or the ABA
Members Plans, and any amendments thereof, other than any such dispute or
controversy arising in connection with any third party claim, or the breach
thereof, shall be determined and settled by arbitration to be held in a location
agreeable to State Street and ABRA (or, if no location is agreed upon, in
Chicago, Illinois) in accordance with the rules then in effect for commercial
disputes according to the commercial rules of the American Arbitration
Association; provided, however, that in the discretion of the arbitrator,
hearings may be held at such locations as are convenient for the witnesses. In
connection with any such arbitration, if State Street and ABRA are unable to
agree on a single arbitrator, then State Street and ABRA shall each appoint one
arbitrator and the two arbitrators so appointed shall appoint a third
arbitrator. If either State Street or ABRA fails to appoint an arbitrator, or
if the two arbitrators fail to appoint a third arbitrator, then the American
Arbitration Association (or a similar organization agreeable to ABRA and State
Street) shall appoint such arbitrator or arbitrators. Any award rendered by
such arbitration or arbitrators may include an assessment of expenses (including
attorneys' fees and arbitration fees) and shall be conclusive and binding on
each and all of the parties, and judgment may be entered thereon by a court of
competent jurisdiction. Nothing herein shall preclude either party from
obtaining injunctive relief in appropriate circumstances, provided that after
any grant of such relief, the dispute shall be resolved in accordance with the
procedures set forth in this Section.
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<PAGE>
16.11 Notice. All notices, requests or other communications to be
------
given by ABRA or State Street to the other under this Agreement shall be
considered properly given if (a) delivered in person, (b) delivered by overnight
courier (with signed acknowledgment or receipt) or (c) sent by telecopier,
confirmed by telephone by the sender, each at the following address:
State Street Bank and Trust Company
Batterymarch Park III
Three Pine Hill Drive
Quincy, Massachusetts 02169
Attention: ABRA Department Head
Telecopier: (617) 376-4640
American Bar Retirement Association
541 North Fairbanks Court
Chicago, Illinois 60611-3314
Attention: Executive Director
Telecopier: (312) 988-5032
or mailed by first-class United States mail, postage prepaid, registered or
certified with return receipt requested to ABRA at the above address or to State
Street at the following address:
State Street Bank and Trust Company
Post Office Box 9109
Boston, Massachusetts 02109
Attention: ABRA Department Head
All notices, requests or communications shall be deemed given (y) upon the
expiration of five (5) Business Days after deposit if mailed or (z) upon receipt
by the addressee if given in person, by courier or by telecopier. If any
communication is tendered to a party and the delivery thereof is refused by such
party, such communication shall be effective upon the tender. Either State
Street or ABRA may change the address to which notices are to be delivered by
written notice to the other party as provided in this Section. All notices,
accountings, reports and other communications by State Street to Participants,
Employers and Investors shall be delivered in accordance with and otherwise
governed by the applicable provisions of the Trusts and the ABA Members
Collective Trust.
16.12 Severability of Provisions. If any provision of this Agreement
--------------------------
is found to be unenforceable, the other provisions shall remain in effect.
16.13 Waiver. Any agreement by ABRA or State Street to an extension
------
or waiver of any provision of this Agreement shall be valid only if set forth in
an instrument in writing signed by such party, but such waiver or failure to
insist on strict compliance with such
-50-
<PAGE>
provision shall not operate as a waiver or estoppel with respect to any
subsequent or other failure.
16.14 Captions. The captions or headings in this Agreement are for
--------
convenience only and in no way define, limit or describe the scope or intent of
any provisions or sections of this Agreement.
16.15 Action by ABRA. Any action required or permitted to be taken
--------------
hereunder by ABRA may be taken by resolution of the Board, by resolution of any
duly authorized committee of, or appointed by the Board or by any officer or
agent duly authorized to take such action by the Board or such a committee.
16.16 Construction of Terms. The singular may include the plural and
---------------------
vice versa, unless the context clearly indicates to the contrary. Unless
otherwise stated, all references to Sections and Articles are to Sections and
Articles of this Agreement.
16.17 Execution in Counterparts. This Agreement may be executed in
-------------------------
counterparts, and all the counterparts together shall be considered an original.
16.18 Entire Agreement. This Agreement (including the Appendices
----------------
hereto and the Annual Marketing Plan), together with the Trusts and the ABA
Members Collective Trust and, to the extent applicable, the ABA Members Plans,
contains the entire agreement between the parties, and supersedes all prior
agreements, arrangements and understandings between State Street and ABRA,
relating to the subject matter contained herein.
16.19 Authority. The parties to this Agreement represent,
---------
respectively, that they have duly authorized the execution, delivery and
performance of this Agreement and that neither such execution and delivery nor
the performance of their obligations hereunder conflict with or violate any
provision of law, rule or regulation, or any instrument to which either is a
party or to which any of their respective properties are subject and that this
Agreement is a valid and binding obligation.
-51-
<PAGE>
IN WITNESS WHEREOF, this Agreement has been signed on behalf of each
of the parties hereto on this _______________ day of November, 1998 with an
effective date as of January 1, 1999 (except to the extent the parties are
obligated hereunder to take any action prior to such date).
STATE STREET BANK AND TRUST COMPANY
By:
-------------------------------------
Title:
----------------------------------
THE AMERICAN BAR RETIREMENT ASSOCIATION
By:
-------------------------------------
President
-52-
<PAGE>
APPENDIX A
----------
SERVICE STANDARDS
-----------------
The standards of accuracy that govern all of the services performed by State
Street under this Agreement are as follows:
TIME-BASED
ACTIVITY/FUNCTION STANDARDS
- --------------------------------------------------------------------------------
FINANCIAL
TRANSACTIONS - All financial transactions wherever
- ------------ occurring in the Program shall be
processed at the times required by this
Agreement and without error caused by
State Street for no less than 99% of
all financial transactions processed.
"Financial transactions" means
transactions resulting in contributions
to the Program, participant loans (and
repayments thereof), change of
investment allocations, and transfers
of assets among Investment Options.
ADMINISTRATIVE
INFORMATION - Indicative and related data (such as
- ----------- names, dates and addresses) shall be
maintained without error caused by
State Street for no less than 99% of
all Participant records unless such
information has not been provided to
State Street.
TIME
REQUIREMENTS - All transactions shall be processed in
- ------------ accordance with the Service
Standards for timeliness and
responsiveness provided
below.
-53-
<PAGE>
APPENDIX A
----------
TIME-BASED
ACTIVITY/FUNCTION STANDARDS
- --------------------------------------------------------------------------------
TRANSACTION PROCESSING - All transaction requests including for
- ---------------------- example, posting of contributions,
allocation of contributions, and
transfers among Investment Options will
be date/time stamped at time of
receipt.
- Transaction requests that are received in
writing or by telephone (under the Program's
telephone transfer feature) or by internet
(under the internet service to be established
for the Program) by 4:00 p.m. Eastern Time on
a Business Day will be processed utilizing
unit values and related information determined
at the close of business that day, provided
that properly completed forms required for
such transactions, if any, are received before
4:00 p.m. Eastern Time. Transaction requests
received after 4:00 p.m. Eastern Time will be
processed in the same manner on the next
Business Day.
TRANSACTION CONFIRMATION NOTICE - Upon completion of the financial
- ------------------------------- transaction processing, a confirmation
notice will be mailed to affected
Participant/Employer within 3
Business Days following execution.
- In the event of a major market event (e.g.
market crash of 1987) confirmation notices
will be sent 10 Business Days following
execution until trading volumes return to
average level for the 90 day period prior to
the event.
-54-
<PAGE>
APPENDIX A
----------
TIME-BASED
ACTIVITY/FUNCTION STANDARDS
- --------------------------------------------------------------------------------
PARTICIPANT STATEMENTS - Cumulative reporting of all account
- ---------------------- activities for the quarter will be
mailed to affected Participants/Employers
within 15 Business Days following the end
of each calendar quarter. However, when
settlement Friday is within 3 Business
Days of a calendar quarter month end,
Participant Statements will be mailed to
affected Participants/Employers within 20
Business Days following the end of such
quarter.
DISBURSEMENTS - Properly completed and documented
- ------------- requests for all types of Participant
benefit payments, received before 4:00
p.m. Eastern Time on a Business Day
including the following:
o Death.
o Disability.
o Retirement.
o Termination of Employment.
o Installments.
o In-service distributions under Article
XI of the ABA Members Retirement Plan.
o Plan termination.
will be processed and checks mailed within
three Business Days after receipt.
-55-
<PAGE>
APPENDIX A
----------
ACTIVITY/FUNCTION TIME-BASED
STANDARDS
- --------------------------------------------------------------------------------
- In the case of Qualified Domestic
Relations Orders ("QDRO's") this standard
will apply only after the QDRO has been
established on the recordkeeping system.
- The above guidelines do not apply to
transactions in connection with
Individually Designed Plans, initial
annuity payments, Real Estate Fund and
the Self-Managed Account.
SUMMARY PLAN DESCRIPTIONS - A Summary Plan Description will be
- ------------------------- provided to each Employer to be
distributed to eligible Employees (i)
within 90 days after the Employer
adopts a Plan, and (ii) thereafter,
within the time required by law. A
Summary of Material Modifications
will be provided to each Employer
within the time required by law.
ANNUAL PLAN SUMMARY - Sent to Employers and Participants
- ------------------- within 90 days following end of
Plan Year.
FORMS 5500 - Census Data Request to gather
- ---------- information necessary for the
automated preparation of the 5500
Form Series sent to Employers no
later than the first day of the
fourth month following end of Plan
Year.
- State Street will make at least one
follow-up request for census data from
Employers not responding within 30 days.
-56-
<PAGE>
APPENDIX A
----------
ACTIVITY/FUNCTION TIME-BASED
STANDARDS
- --------------------------------------------------------------------------------
- State Street's response will be based up
on census data returned to State Street
by the Employer within 30 days. If census
data is not returned, State Street's
response will be based on the census data
contained in the Census Data Request.
- Production and distribution of Form 5500
in appropriate format and with applicable
schedules with completed form (based on
information that is maintained by State
Street) returned to the Employer by the
1st day of the 6th month following end of
Plan Year.
DISCRIMINATION TESTING
- ----------------------
(401(k) & 401(m)) - ADP/ACP testing will be performed
- ----------------- semi-annually, and the year-end
testing will be completed and
provided to the Employer no later
than 2 1/2 months following the plan
year end subject to the Employer's
submission of complete and accurate
data 20 Business Days prior to such
date. Any such testing otherwise
requested by an Employer will be
completed and results returned to
Employer ten (10) Business Days after
receipt of completed request form.
Each Employer will be limited to a
total of 3 tests per year including
semi-annual tests.
-57-
<PAGE>
APPENDIX A
----------
ACTIVITY/FUNCTION TIME-BASED
STANDARDS
- --------------------------------------------------------------------------------
DISCRIMINATION TESTING
- ----------------------
SECTION 415 - State Street will monitor compliance
- ------------ with IRC 415 during each plan's
limitation year and will take such
steps as allowed for under the plan
document to ensure compliance with
IRC 415 within the time frame allowed
for under the Plan and the
regulations issued under IRC 415.
- For Employers which maintain plans
in addition to plans sponsored under the
ABRA Program, State Street will provide
such information as may be reasonably
requested by such Employer to maintain
compliance with IRC 415.
COMMUNICATIONS
- --------------
- - Correspondence - All correspondence date/time
stamped upon receipt
o from Participants/Employers - Acknowledged or answered within 3
Business Days of receipt: if only
acknowledged, then answered within
10 Business Days of receipt.
o from non-Participants
Program inquiries - Acknowledged or answered same
day received if before 4:00 p.m.
Eastern Time, otherwise next
Business Day.
o Other - Acknowledged or answered within 3
Business Days of receipt.
- - Telephone
o Participants/Employers - Inquiries answered on telephone if
possible; requests for information
handled same day if received before
4:00 p.m. Eastern Time; otherwise
next Business Day.
-58-
<PAGE>
APPENDIX A
----------
ACTIVITY/FUNCTION TIME-BASED
STANDARDS
- --------------------------------------------------------------------------------
o Non-Participants - Inquiries answered on telephone if
possible; requests for information
handled same day if received before
4:00 p.m. Eastern Time otherwise, next
Business Day.
During normal business period telephone calls to staffed lines answered within
five rings either personally or by automated hold/queue system (with appropriate
hold background). Call abandon rate will be under 3% of calls placed.
STANDARDS COMPLIANCE PROCEDURE:
- ------------------------------
In the event that a standard established for a function, activity or service is
not met for a calendar quarter, ABRA shall be promptly notified. ABRA may
request the activation of an internal State Street quality standards task force
if compliance is not restored by the end of the second consecutive quarter.
The task force, if activated, will review all work procedures and processes in
the functional area which is below standard, and develop a comprehensive
analysis of the deficiencies causing the failure to meet standards, along with
suggested corrective actions. The task force review and report will be
completed no later than 90 days after ABRA requests activation.
ABRA reserves the right at the end of the quarter following the task force
review to convene its own task force for the purpose of reviewing the below-
standards service or activity process or to otherwise conduct an independent
audit as provided in Section 16.06. Activating its own task force will not
prevent ABRA from pursuing other remedies.
Compliance with all the standards indicated is to be measured and reported upon
to ABRA at each regular meeting of the Board in a separate Standards Compliance
Report.
Where actual data are available for the full universe of activity, the actual
data will be measured. Otherwise, each quarter State Street shall evaluate a
random 2% sample of each transaction type to determine whether performance has
satisfied such standards and present the results to ABRA at least quarterly.
Samples of actual output from the respective activity/functions reviewed for
compliance with the respective timeliness standards shall also be examined for
financial and administrative accuracy.
-59-
<PAGE>
APPENDIX A
----------
ACTIVITY/FUNCTION TIME-BASED
STANDARDS
- --------------------------------------------------------------------------------
State Street will not be deemed to have committed an error hereunder to the
extent that it acts in reliance on information furnished by, or at proper
direction of, ABRA, or an Employer,
Participant or Investor, as applicable. Nor will State Street be deemed to have
committed an error hereunder to the extent that it relies on information
furnished by Equitable, any financial institution or third party.
Additionally, at least annually State Street shall engage a professional
consulting firm experienced in conducting surveys with respect to financial
products to conduct a comprehensive, professional client service survey. The
content of such survey shall be subject to review by ABRA. The results of the
survey, among other considerations, will be evaluated by ABRA and State Street
in the fourth quarter of each year. Such survey information will not be
considered in measuring performance against the above-stated standards except
the Participation Satisfaction Standard.
In the event of any major employee benefit or tax reform legislation (similar in
scope and impact to the Tax Reform Act of 1986) during the term of this
Agreement, these standards will be reevaluated).
-60-
<PAGE>
APPENDIX B
----------
STATE STREET GLOBAL ADVISORS INVESTMENT OPTION STANDARDS
STANDARD
- --------------------------------------------------------------------------------
STABLE ASSET RETURN FUND The primary investment objective of
- ------------------------ the portfolio is to meet or exceed
net of investment management fees and
over reasonable measurement periods,
the rate of return of the EK&A STIF
Funds Index plus 0.50 percentage points
(50 basis points).
INDEX EQUITY FUND The primary investment objective of
- ----------------- the portfolio is to track over
reasonable measurement periods, the
rate of return of the Russell 3000
Stock Index.
-61-
<PAGE>
APPENDIX C
----------
FEES PAID TO STATE STREET
I. PROGRAM EXPENSE:
---------------
(a) For the first year of the contract (January 1, 1999 through December 31,
1999), the program expense fee shall be $7,750,000.
(b) The program expense fee for each calendar month during calendar year 2000
and each calendar year thereafter during the term of this Agreement shall be
one-twelfth (1/12) of the sum of (i) $1,050,000, plus (ii) the number of
Participants of Individual Recordkeeping Plans (in categories described below,
but not including active participants without account balances) as of the last
Business Day of the immediately preceding calendar month multiplied by $191,
plus (iii) the excess, if any, of the number of active Participants of
Individual Recordkeeping Plans without account balances as of the end of the
last Business Day of the immediately preceding calendar month over the number of
such Participants as of December 31, 1998, multiplied by $191.
Participants: Active, with balance
Active, without balance
Ineligible, with balance
Suspended, with balance
Receiving installment payments
Terminated, deferring payout
Terminated, being paid out (with balance)
(c) As of the first day of each calendar month, State Street shall convert the
amount of the Program Expense Fee payable for such month into a daily asset
charge. Such daily charge shall be accrued each day as a charge against all
Program assets other than those held under Self-Managed Option accounts. Such
accrued daily charges shall be paid to State Street at the end of each month.
Notwithstanding the foregoing, if as of the end of any calendar year during the
term of this Agreement, the aggregate assets held under Self-Managed Option
accounts, expressed as a percentage of total Program assets (including those
held under Self-Managed Option accounts) shall increase by four percentage
points or more over such percentage determined as of the end of the preceding
year or exceed 20% of such aggregate Program assets, and the Program expense
charge (expressed as a percentage of assets) shall have increased during such
period, State Street and ABRA shall negotiate in good faith to determine whether
such increase in the assets held by the Self-Managed Option accounts should
affect the appropriateness of the allocation of the Program Expense Fee for the
succeeding years of this Agreement.
-62-
<PAGE>
APPENDIX C
----------
FEES PAID TO STATE STREET
II. TRUST, MANAGEMENT AND ADMINISTRATION:
------------------------------------
The trust, management and administration fee shall be calculated according to
the following schedule as applied to the aggregate value of assets held in
Stable Asset Return, Growth Equity, Aggressive Equity, Balanced, Value Equity,
International Equity, Index Equity and Intermediate Bond Funds.
First $1.0 billion .15%
Next $1.8 billion .058%
Over $2.8 billion .025%
Such fee shall accrue daily and paid to State Street at the end of each month.
-63-
<PAGE>
APPENDIX D
----------
FEES PAID TO ABRA
ABRA's fee shall be calculated according to the following schedule based on
the aggregate value of assets held in the Program as of the end of the last
Business Day of the preceding month.
First $500 Million .075%
Next $850 Million .065%
Next $1.15 Billion .035%
Next $1.5 Billion .025%
Over $4.0 Billion .015%
Fees will be charged pro rata against all Program assets other than those held
--------
under Self-Managed Option accounts and paid to ABRA within 10 Business Days
following the end of each month.
-64-
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-1 of our report dated March 13, 1998, relating
to the financial statements and selected per-unit data and ratios of the
Aggressive Equity Fund, Balanced Fund, Growth Equity Fund, Stable Asset Return
Fund, Index Equity Fund, Intermediate Bond Fund, International Equity Fund,
Value Equity Fund, Conservative Structured Portfolio Service, Moderate
Structured Portfolio Service and Aggressive Structured Portfolio Service, each
a fund or portfolio of the American Bar Association Members/State Street
Collective Trust, which appear in such Prospectus. We also consent to the
references to us under the headings "Selected Financial Data" and "Experts" in
such Prospectus.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
December 21, 1998
<PAGE>
EXHIBIT 24.1
KNOW ALL PERSONS BY THESE PRESENTS THAT we, the undersigned Directors of
State Street Bank and Trust Company, hereby appoint Marshall N. Carter, David
A. Spina, Nicholas A. Lopardo and Maureen Scannell Bateman, and each of them as
attorneys and agents for the undersigned with full power to them, and any two
of them acting together, for and in the name, place and stead of the
undersigned, until revoked in writing, to sign and file with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Securities Act"), the Registration Statement on Form S-1 (the
"Registration Statement") of the American Bar Association Members/State Street
Collective Trust (the "Collective Trust"), and any and all amendments
(including post-effective amendments), applications, instruments and other
documents to filed with the Commission pertaining to the Registration
Statement, and generally with full power and authority to do and perform any
and all such acts and things whatsoever requisite or desirable in the names and
in the capacities of the undersigned to enable State Street Bank and Trust
Company and the Collective Trust to comply with the provisions of the
Securities Act. This Power of Attorney may be executed in any number of
counterparts, all of which together shall constitute one and the same document.
Witness our hands on the dates set forth below:
<TABLE>
<S> <C>
SIGNATURE TITLE
DATE
Director of State
- ------------------------------------- Street Bank and
TENLEY E. ALBRIGHT Trust Company
/s/ I. MacAllister Booth Director of State December 21,
- ------------------------------------- Street Bank and 1998
I. MACALLISTER BOOTH Trust Company
/s/ Marshall N. Carter Director of State December 21,
- ------------------------------------- Street Bank and 1998
MARSHALL N. CARTER Trust Company
/s/ James I. Cash, Jr. Director of State December 21,
- ------------------------------------- Street Bank and 1998
JAMES I. CASH, JR. Trust Company
/s/ Truman S. Casner Director of State December 21,
- ------------------------------------- Street Bank and 1998
TRUMAN S. CASNER Trust Company
</TABLE>
<PAGE>
/s/ Nader F. Darehshori Director of State December 21,
- ------------------------------------- Street Bank and 1998
NADER F. DAREHSHORI Trust Company
/s/ Arthur L. Goldstein Director of State December 21,
- ------------------------------------- Street Bank and 1998
ARTHUR L. GOLDSTEIN Trust Company
/s/ David P. Gruber Director of State December 21,
- ------------------------------------- Street Bank and 1998
DAVID P. GRUBER Trust Company
/s/ Charles F. Kaye Director of State December 21,
- ------------------------------------- Street Bank and 1998
CHARLES F. KAYE Trust Company
/s/ John M. Kucharski Director of State December 21,
- ------------------------------------- Street Bank and 1998
JOHN M. KUCHARSKI Trust Company
/s/ Charles R. LaMantia Director of State December 21,
- ------------------------------------- Street Bank and 1998
CHARLES R. LAMANTIA Trust Company
/s/ David B. Perini Director of State December 21,
- ------------------------------------- Street Bank and 1998
DAVID B. PERINI Trust Company
/s/ Dennis J. Picard Director of State December 21,
- ------------------------------------- Street Bank and 1998
DENNIS J. PICARD Trust Company
/s/ David A. Spina Director of State December 21,
- ------------------------------------- Street Bank and 1998
DAVID A. SPINA Trust Company
/s/ Diana Chapman Walsh Director of State December 21,
- ------------------------------------- Street Bank and 1998
DIANA CHAPMAN WALSH Trust Company
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Statement of Assets and Liabilities, the Statement of Operations, the Statement
of Changes in Net Assets and the Per Unit Data and Ratios contained in the
financial statements of the fund to which this schedule relates and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000878375
<NAME> ABA MEMBERS/STATE STREET COLLECTIVE TRUST
<SERIES>
<NUMBER> 0
<NAME> AGGRESSIVE EQUITY FUND
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 256,262,150
<INVESTMENTS-AT-VALUE> 259,382,791
<RECEIVABLES> 1,371,006
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 260,908,942
<PAYABLE-FOR-SECURITIES> 1,420,828
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 2,329,567
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 258,579,375
<DIVIDEND-INCOME> 1,119,442
<INTEREST-INCOME> 514,655
<OTHER-INCOME> 0
<EXPENSES-NET> 2,290,963
<NET-INVESTMENT-INCOME> (656,866)
<REALIZED-GAINS-CURRENT> 39,509,676
<APPREC-INCREASE-CURRENT> (76,007,383)
<NET-CHANGE-FROM-OPS> (37,154,573)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 361,827
<NUMBER-OF-SHARES-REDEEMED> (1,068,784)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (73,360,213)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 328,777,661
<PER-SHARE-NAV-BEGIN> 48.59
<PER-SHARE-NII> (0.10)
<PER-SHARE-GAIN-APPREC> (6.27)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 42.22
<EXPENSE-RATIO> 0.93
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Statement of Assets and Liabilities, the Statement of Operations, the Statement
of Changes in Net Assets and the Per Unit Data and Ratios contained in the
financial statements of the fund to which this schedule relates and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000878375
<NAME> ABA MEMBERS/STATE STREET COLLECTIVE TRUST
<SERIES>
<NUMBER> 0
<NAME> BALANCED FUND
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 435,583,844
<INVESTMENTS-AT-VALUE> 443,512,340
<RECEIVABLES> 46,266,475
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 1,787,151
<TOTAL-ASSETS> 491,565,966
<PAYABLE-FOR-SECURITIES> 117,292,211
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 411,849
<TOTAL-LIABILITIES> 118,193,030
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 373,372,936
<DIVIDEND-INCOME> 2,366,637
<INTEREST-INCOME> 7,682,872
<OTHER-INCOME> 0
<EXPENSES-NET> 2,139,441
<NET-INVESTMENT-INCOME> 7,910,068
<REALIZED-GAINS-CURRENT> 21,570,347
<APPREC-INCREASE-CURRENT> (8,052,052)
<NET-CHANGE-FROM-OPS> 21,428,363
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 544,015
<NUMBER-OF-SHARES-REDEEMED> (680,504)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 14,870,169
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 389,808,177
<PER-SHARE-NAV-BEGIN> 44.42
<PER-SHARE-NII> 1.00
<PER-SHARE-GAIN-APPREC> 1.64
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 47.06
<EXPENSE-RATIO> 0.73
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Statement of Assets and Liabilities, the Statement of Operations, the Statement
of Changes in Net Assets and the Per Unit Data and Ratios contained in the
financial statements of the fund to which this schedule relates and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000878375
<NAME> ABA MEMBERS/STATE STREET COLLECTIVE TRUST
<SERIES>
<NUMBER> 0
<NAME> GROWTH EQUITY FUND
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 850,263,255
<INVESTMENTS-AT-VALUE> 1,038,704,191
<RECEIVABLES> 5,272,147
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,045,210,799
<PAYABLE-FOR-SECURITIES> 7,885,547
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 15,231
<TOTAL-LIABILITIES> 9,508,428
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,035,702,371
<DIVIDEND-INCOME> 7,628,565
<INTEREST-INCOME> 865,686
<OTHER-INCOME> 0
<EXPENSES-NET> 5,849,013
<NET-INVESTMENT-INCOME> 2,645,238
<REALIZED-GAINS-CURRENT> 82,896,246
<APPREC-INCREASE-CURRENT> 2,294,810
<NET-CHANGE-FROM-OPS> 87,836,294
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 123,082
<NUMBER-OF-SHARES-REDEEMED> (174,316)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 67,848,386
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 1,091,993,981
<PER-SHARE-NAV-BEGIN> 359.82
<PER-SHARE-NII> 1.00
<PER-SHARE-GAIN-APPREC> 31.71
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 392.53
<EXPENSE-RATIO> 0.71
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Statement of Assets and Liabilities, the Statement of Operations, the Statement
of Changes in Net Assets and the Per Unit Data and Ratios contained in the
financial statements of the fund to which this schedule relates and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000878375
<NAME> ABA MEMBERS/STATE STREET COLLECTIVE TRUST
<SERIES>
<NUMBER> 0
<NAME> INDEX EQUITY FUND
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 187,625,369
<INVESTMENTS-AT-VALUE> 177,440,623
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 177,802,603
<PAYABLE-FOR-SECURITIES> 361,980
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 1,464,117
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 176,338,486
<DIVIDEND-INCOME> 334,419
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 779,763
<NET-INVESTMENT-INCOME> (445,344)
<REALIZED-GAINS-CURRENT> 51,584,124
<APPREC-INCREASE-CURRENT> (50,203,051)
<NET-CHANGE-FROM-OPS> 935,729
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,426,513
<NUMBER-OF-SHARES-REDEEMED> (514,759)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 22,629,343
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 183,125,871
<PER-SHARE-NAV-BEGIN> 22.05
<PER-SHARE-NII> (0.06)
<PER-SHARE-GAIN-APPREC> 0.38
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 22.37
<EXPENSE-RATIO> 0.57
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Statement of Assets and Liabilities, the Statement of Operations, the Statement
of Changes in Net Assets and the Per Unit Data and Ratios contained in the
financial statements of the fund to which this schedule relates and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000878375
<NAME> ABA MEMBERS/STATE STREET COLLECTIVE TRUST
<SERIES>
<NUMBER> 0
<NAME> INTERMEDIATE BOND FUND
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 110,923,641
<INVESTMENTS-AT-VALUE> 116,314,699
<RECEIVABLES> 375,745
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 117,270,121
<PAYABLE-FOR-SECURITIES> 955,313
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 1,007,549
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 116,262,572
<DIVIDEND-INCOME> 4,688,938
<INTEREST-INCOME> 92
<OTHER-INCOME> 0
<EXPENSES-NET> 397,299
<NET-INVESTMENT-INCOME> 4,291,731
<REALIZED-GAINS-CURRENT> 303,072
<APPREC-INCREASE-CURRENT> 4,509,439
<NET-CHANGE-FROM-OPS> 9,104,242
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,807,265
<NUMBER-OF-SHARES-REDEEMED> (793,421)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 33,528,089
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 101,951,501
<PER-SHARE-NAV-BEGIN> 11.91
<PER-SHARE-NII> 0.48
<PER-SHARE-GAIN-APPREC> 0.59
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.98
<EXPENSE-RATIO> 0.52
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Statement of Assets and Liabilities, the Statement of Operations, the Statement
of Changes in Net Assets and the Per Unit Data and Ratios contained in the
financial statements of the fund to which this schedule relates and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000878375
<NAME> ABA MEMBERS/STATE STREET COLLECTIVE TRUST
<SERIES>
<NUMBER> 0
<NAME> INTERNATIONAL EQUITY FUND
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 66,314,202
<INVESTMENTS-AT-VALUE> 59,938,891
<RECEIVABLES> 1,431,951
<ASSETS-OTHER> 33,482
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 61,404,324
<PAYABLE-FOR-SECURITIES> 1,431,950
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 1,458,813
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 59,945,511
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 53,837
<OTHER-INCOME> 0
<EXPENSES-NET> 237,467
<NET-INVESTMENT-INCOME> (183,630)
<REALIZED-GAINS-CURRENT> 140,408
<APPREC-INCREASE-CURRENT> (1,394,774)
<NET-CHANGE-FROM-OPS> (1,437,996)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,908,930
<NUMBER-OF-SHARES-REDEEMED> (2,784,872)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 948,563
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 64,915,431
<PER-SHARE-NAV-BEGIN> 18.21
<PER-SHARE-NII> (0.05)
<PER-SHARE-GAIN-APPREC> (0.34)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 17.82
<EXPENSE-RATIO> 0.49
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Statement of Assets and Liabilities, the Statement of Operations, the Statement
of Changes in Net Assets and the Per Unit Data and Ratios contained in the
financial statements of the fund to which this schedule relates and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000878375
<NAME> ABA MEMBERS/STATE STREET COLLECTIVE TRUST
<SERIES>
<NUMBER> 0
<NAME> STABLE ASSET RETURN FUND
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 662,229,249
<INVESTMENTS-AT-VALUE> 662,229,249
<RECEIVABLES> 4,017,396
<ASSETS-OTHER> 90
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 4,017,486
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 385,220
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> $665,861,515
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> $29,026,358
<OTHER-INCOME> 0
<EXPENSES-NET> 2,978,455
<NET-INVESTMENT-INCOME> $26,047,903
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> $26,047,903
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (26,047,903)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 126,320,346
<NUMBER-OF-SHARES-REDEEMED> (121,071,555)
<SHARES-REINVESTED> 26,047,903
<NET-CHANGE-IN-ASSETS> 31,296,693
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 636,757,315
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.04
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.04)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.63
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Statement of Assets and Liabilities, the Statement of Operations, the Statement
of Changes in Net Assets and the Per Unit Data and Ratios contained in the
financial statements of the fund to which this schedule relates and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000878375
<NAME> ABA MEMBERS/STATE STREET COLLECTIVE TRUST
<SERIES>
<NUMBER> 0
<NAME> VALUE EQUITY FUND
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 111,808,877
<INVESTMENTS-AT-VALUE> 125,146,820
<RECEIVABLES> 70,977
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 125,454,539
<PAYABLE-FOR-SECURITIES> 407,044
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 804,854
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 124,649,685
<DIVIDEND-INCOME> 1,718,148
<INTEREST-INCOME> 494,058
<OTHER-INCOME> 0
<EXPENSES-NET> 800,058
<NET-INVESTMENT-INCOME> 1,412,148
<REALIZED-GAINS-CURRENT> 7,067,094
<APPREC-INCREASE-CURRENT> (10,911,386)
<NET-CHANGE-FROM-OPS> (2,432,144)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,186,412
<NUMBER-OF-SHARES-REDEEMED> (543,803)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 11,547,041
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 132,155,636
<PER-SHARE-NAV-BEGIN> 20.11
<PER-SHARE-NII> 0.22
<PER-SHARE-GAIN-APPREC> (0.44)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 19.89
<EXPENSE-RATIO> 0.81
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Statement of Assets and Liabilities, the Statement of Operations, the Statement
of Changes in Net Assets and the Per Unit Data and Ratios contained in the
financial statements of the fund to which this schedule relates and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000878375
<NAME> ABA MEMBERS/STATE STREET COLLECTIVE TRUST
<SERIES>
<NUMBER> 0
<NAME> STRUCTURED PORTFOLIO SERVICE - AGGRESSIVE FUND
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 51,083,799
<INVESTMENTS-AT-VALUE> 56,490,704
<RECEIVABLES> 856,791
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 57,347,495
<PAYABLE-FOR-SECURITIES> 856,791
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 860,675
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 56,486,820
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 36,576
<NET-INVESTMENT-INCOME> (36,576)
<REALIZED-GAINS-CURRENT> 2,924,850
<APPREC-INCREASE-CURRENT> (2,109,377)
<NET-CHANGE-FROM-OPS> 778,897
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 576,045
<NUMBER-OF-SHARES-REDEEMED> (343,684)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 4,618,811
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 59,034,672
<PER-SHARE-NAV-BEGIN> 14.91
<PER-SHARE-NII> (0.01)
<PER-SHARE-GAIN-APPREC> 0.32
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.22
<EXPENSE-RATIO> 0.07
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENT OF ASSETS AND LIABILITIES, THE STATEMENT OF OPERATIONS, THE STATEMENT
OF CHANGES IN NET ASSETS AND THE PER UNIT DATA AND RATIOS CONTAINED IN THE
FINANCIAL STATEMENTS OF THE FUND TO WHICH THIS SCHEDULE RELATES AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000878375
<NAME> ABA MEMBERS/STATE STREET COLLECTIVE TRUST
<SERIES>
<NUMBER> 0
<NAME> STRUCTURED PORTFOLIO SERVICE-MODERATE FUND
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 84,985,548
<INVESTMENTS-AT-VALUE> 71,828,893
<RECEIVABLES> 1,035,840
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 72,684,733
<PAYABLE-FOR-SECURITIES> 1,035,840
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 1,040,734
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 71,623,999
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 45,049
<NET-INVESTMENT-INCOME> (45,049)
<REALIZED-GAINS-CURRENT> 4,288,185
<APPREC-INCREASE-CURRENT> (1,422,931)
<NET-CHANGE-FROM-OPS> 2,820,215
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 786,999
<NUMBER-OF-SHARES-REDEEMED> (808,055)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 5,529,118
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 72,689,507
<PER-SHARE-NAV-BEGIN> 13.83
<PER-SHARE-NII> (0.01)
<PER-SHARE-GAIN-APPREC> 0.62
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.54
<EXPENSE-RATIO> 0.08
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENT OF ASSETS AND LIABILITIES, THE STATEMENT OF OPERATIONS, THE STATEMENT
OF CHANGES IN NET ASSETS AND THE PER UNIT DATA AND RATIOS CONTAINED IN THE
FINANCIAL STATEMENTS OF THE FUND TO WHICH THIS SCHEDULE RELATES AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000878375
<NAME> ABA MEMBERS/STATE STREET COLLECTIVE TRUST
<SERIES>
<NUMBER> 0
<NAME> STRUCTURED PORTFOLIO SERVICE-CONSERVATIVE FUND
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 20,475,501
<INVESTMENTS-AT-VALUE> 21,505,575
<RECEIVABLES> 225,361
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 21,730,938
<PAYABLE-FOR-SECURITIES> 225,381
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 226,606
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 21,504,130
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 12,771
<NET-INVESTMENT-INCOME> (12,771)
<REALIZED-GAINS-CURRENT> 1,893,931
<APPREC-INCREASE-CURRENT> (644,704)
<NET-CHANGE-FROM-OPS> 1,038,456
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 741,410
<NUMBER-OF-SHARES-REDEEMED> (495,864)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 4,276,312
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 20,623,453
<PER-SHARE-NAV-BEGIN> 12.97
<PER-SHARE-NII> (0.01)
<PER-SHARE-GAIN-APPREC> 0.70
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.66
<EXPENSE-RATIO> 0.08
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
