SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
(Amendment No. )
Filed by Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
STATE STREET BOSTON CORPORATION
_________________________________________________
(Name of Registrant as Specified in its Charter)
___________________________________________
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:
_______________________________________________________
(2) Aggregate number of securities which transaction
applies:
_______________________________________________________
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth
the amount on which the filing fee is calculated and
state how it was determined):
_______________________________________________________
(4) Proposed maximum aggregate value of transaction:
_______________________________________________________
(5) Total fee paid:
_______________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1) Amount previously paid:
______________________________________________________
(2) Form, Schedule or Registration Statement No.:
______________________________________________________
(3) Filing Party:
______________________________________________________
(4) Date Filed:
______________________________________________________
Notes: The fee was wired to Mellon Bank account on 3/6/96.
<PAGE>
[M. CARTER'S STATE STREET LETTERHEAD]
March 12, 1996
DEAR STOCKHOLDER:
You are cordially invited to attend the 1996 Annual Meeting
of Stockholders of State Street Boston Corporation. The meeting
will be held in the Enterprise Room at 225 Franklin Street,
Boston, Massachusetts on Wednesday, April 17, 1996, at 10:00 a.m.
Your Board of Directors and management look forward to greeting
those stockholders able to attend.
The notice of meeting and proxy statement which follow
describe the business to be conducted at the meeting. You will
be asked to elect six directors. THE BOARD OF DIRECTORS
UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE DIRECTORS NOMINATED.
Your vote is very important. Whether or not you plan to
attend the meeting, please carefully review the enclosed proxy
statement. Then complete, sign, date and mail promptly the
accompanying proxy in the enclosed return envelope. To be sure
that your vote will be received in time, please return the proxy
at your earliest convenience.
We look forward to seeing you at the Annual Meeting so that
we can update you on our progress. Your continuing interest is
very much appreciated.
Sincerely,
Marshall N. Carter
<PAGE>
[STATE STREET LETTERHEAD]
NOTICE OF 1996 ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of
STATE STREET BOSTON CORPORATION:
The 1996 Annual Meeting of Stockholders of State Street
Boston Corporation will be held on Wednesday, April 17, 1996, at
10:00 a.m., Eastern Time, at 225 Franklin Street, Fifth Floor,
Boston, Massachusetts, for the following purposes:
1. To elect six directors, each for a three-year term;
and
2. To act upon such other business as may properly come
before the meeting.
Stockholders of record at the close of business on February
28, 1996 are entitled to notice of and to vote at the meeting and
any adjournments thereof.
PLEASE MARK, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE
ENVELOPE PROVIDED FOR YOUR USE. FURNISHING THIS PROXY WILL NOT
AFFECT YOUR RIGHT TO REVOKE THIS PROXY OR TO VOTE IN PERSON
SHOULD YOU ATTEND THE MEETING.
By Order of the Board of Directors,
John R. Towers
Secretary
March 12, 1996<PAGE>
STATE STREET BOSTON CORPORATION
225 Franklin Street, Boston, Massachusetts 02110
PROXY STATEMENT
This Proxy Statement, which is scheduled to be sent to
stockholders beginning on March 12, 1996, is furnished in
connection with the solicitation by the Board of Directors of
State Street Boston Corporation (the "Corporation") of proxies
for the 1996 Annual Meeting of Stockholders of the Corporation to
be held on April 17, 1996 and at any adjournments thereof. The
Board of Directors has fixed the close of business on February
28, 1996 as the record date for determining the stockholders
entitled to notice of and to vote at the meeting. On the record
date 81,310,387 shares of Common Stock of the Corporation were
outstanding and entitled to be voted at the meeting.
All shares represented by properly executed proxies, if such
proxies are received in time and not revoked, will be voted at
such meeting in accordance with any specifications thereon or, if
no specifications are made, proxies will be voted in accordance
with the recommendations of the Board of Directors. Each share
of Common Stock is entitled to one vote. Any proxy may be
revoked at any time before it is voted by notifying the Secretary
in writing, by executing a later dated proxy or by notifying the
Secretary at the meeting and voting in person.
The Corporation will bear the cost of soliciting proxies.
The solicitation of proxies will be made primarily by mail.
Proxies may also be solicited personally and by telephone by
regular employees of the Corporation and its principal
subsidiary, State Street Bank and Trust Company (the "Bank"),
without any additional remuneration and at minimal cost. The
Board of Directors intends to request banks, brokerage houses,
custodians, nominees and fiduciaries to forward soliciting
material to their principals and to obtain authorization for the
execution of proxies. In addition, the Corporation has retained
D.F. King and Co., Inc. to aid in the solicitation of proxies.
The cost of such services is $9,000, plus expenses.
ELECTION OF DIRECTORS
In accordance with Massachusetts law, the By-laws of the
Corporation provide for the classification of the Board into
three classes of directors as nearly equal in number as possible,
each class serving a three-year term, with one class of directors
to be elected at each annual meeting of stockholders for the term
specified and to continue in office until their successors are
elected and qualified. The exact number of directors is to be
determined by vote of the Board of Directors. Pursuant to the
By-laws, at a meeting on December 21, 1995, the Board of
Directors fixed the number of directors at 17, effective with the
1996 Annual Meeting. There are currently 17 directors of the
Corporation. Arthur L. Goldstein was elected a Class I director
on June 20, 1995. Lois D. Juliber, a Class II director, resigned
on November 1, 1995.
It is intended that shares represented by proxies solicited
by the Board of Directors will, unless contrary instructions are
given, be voted for the election of the six nominees listed below
as directors. Although the Board of Directors does not
contemplate that any nominee will be unavailable for election, in
the event that vacancies occur unexpectedly, such shares may be
voted for substitute nominees, if any, as may be designated by
the Board of Directors. Information relating to each nominee for
election as director and for each continuing director, including
his or her period of service as a director of the Corporation,
principal occupation and other biographical material is shown
below.
DIRECTORS TO BE ELECTED AT THE 1996 ANNUAL MEETING
Class III
TENLEY E. ALBRIGHT, M.D. Director since 1993
Physician and surgeon. Dr. Albright's concentration in
medicine and health sciences stems from her specialty of general
surgery. Following 23 years in the private practice of general
surgery, Dr. Albright, age 60, founded and became chairman of a
clinical research laboratory. She is Chairman of Western
Resources, Inc., a holding company of varied assets which plans
to develop a research and development park and a senior care
facility, since 1994. She is a member of the board of directors
of The West Company and the Whitehead Institute for Biomedical
Research, a member of the board of regents of the National
Library of Medicine and a member of the corporation of Woods Hole
Oceanographic Institution and New England Baptist Hospital. She
graduated from Harvard Medical School after attending Radcliffe
College and has received honorary degrees from Williams College,
Hobart and William Smith Colleges, Russell Sage College, New
England School of Law, Chatham College, State University of New
York at Cortland and Springfield College. Dr. Albright won the
Gold Medal in figure skating at the 1956 Olympics in Cortina,
Italy.
MARSHALL N. CARTER Director since 1991
Chairman and Chief Executive Officer of the Corporation.
Prior to joining State Street in 1991, Mr. Carter, age 55, was
with Chase Manhattan Bank for 15 years, the last three years as
head of global securities services. He served as a Marine Corps
officer in Vietnam for two years where he was awarded the Navy
Cross and Purple Heart and had international affairs service as a
White House Fellow. Mr. Carter is a member of the board of
directors of Euroclear in Brussels, the co-chairman of the U.S.
Working Group for the Group of Thirty and a director of the
Federal Reserve Bank of Boston. Mr. Carter holds a degree in
civil engineering from the U.S. Military Academy at West Point
and masters degrees from the Naval Postgraduate School and George
Washington University.
NADER F. DAREHSHORI Director since 1990
Chairman of the Board, President and Chief Executive Officer
of Houghton Mifflin Company, publisher. Mr. Darehshori, age 59,
served as college division vice president and manager of Houghton
Mifflin's midwestern sales region from 1984 until he was promoted
to vice president and director of the college division in 1986.
In 1987 he was elected senior vice president, college division.
He was promoted to executive vice president and then to vice
chairman in 1989. Mr. Darehshori has served as a director of
Houghton Mifflin Company since 1989 and is chairman of its
executive committee. He is a director of Commercial Union
Corporation, the U.S. Chamber of Commerce and the Massachusetts
Business Roundtable. He is a trustee of Wellesley College and
the WGBH Foundation. He is a member of the national executive
board of the National Conference of Christians and Jews and the
Dana-Farber National Advisory Council for the Women's Cancers
Program. Mr. Darehshori also serves on the boards of the Boston
Public Library Foundation and the Boston Symphony Orchestra.
CHARLES F. KAYE Director since 1979
President, Transportation Investments, Incorporated, a
lessor and asset manager of intermodal transportation equipment.
Mr. Kaye, age 68, is a graduate of St. Thomas University and
received a J.D. degree from Boston
-2-
<PAGE>
College Law School. He was senior partner of the firm of Kaye,
Sheldon and Barton and special counsel to the Massachusetts
Institute of Technology before joining XTRA Corporation in 1967
as a director and general counsel. Mr. Kaye became vice chairman
in 1970 and served as chairman, president and chief executive
officer of XTRA from 1973 to 1990. Mr. Kaye is a trustee of
Bentley College and Lawrence Academy, a member of the Visiting
Committee of the Massachusetts General Hospital, chairman of the
Alpha Omega Foundation and town moderator of Littleton,
Massachusetts. He has been the recipient of the Association of
American Railroads annual Intermodal Man of the Year Award and
the Air Force Association Distinguished Service Award.
JOHN M. KUCHARSKI Director since 1991
Chairman of the Board, President and Chief Executive Officer
of EG&G, Inc., which provides scientific and technological
products and services worldwide. Mr. Kucharski, age 60, joined
EG&G in 1972 and was elected president and director in 1986. He
is a director of Nashua Corporation, New England Electric System
and Eagle Industry Co. Ltd. He serves on the boards of trustees
of Marquette University and George Washington University. He is
also a member of the president's council and the advisory council
to the College of Engineering of Marquette University. Mr.
Kucharski holds a B.S degree from Marquette University, a J.D.
degree from George Washington University and is a member of the
District of Columbia Bar Association.
BERNARD W. REZNICEK Director since 1991
Dean, College of Business Administration, Creighton
University, since July 1994. From 1987 to 1990, Mr. Reznicek,
age 59, was president and chief operating officer of Boston
Edison Company. In 1990, he became chief executive officer, and
in 1992, he was elected chairman. Prior to joining Boston
Edison, he was president and chief executive officer of Omaha
Public Power District. Mr. Reznicek holds a B.S. degree from
Creighton University and an M.B.A from the University of
Nebraska. He serves on the boards of Boston Edison Company,
California Energy Company, Guarantee Mutual Life Company, Stone &
Webster Incorporated and the Omaha Chamber of Commerce and is a
member of the Bentley College Center for Business Ethics Board of
Advisors.
DIRECTORS SERVING UNTIL THE 1997 ANNUAL MEETING
Class I
I. MACALLISTER BOOTH Director since 1990
Retired Chairman, President and Chief Executive Officer of
Polaroid Corporation, a manufacturer of instant image recording
products. Mr. Booth, age 64, joined Polaroid in 1958 as a
supervisor in the Film Division. He is also a director of
Western Digital Corporation, Jobs for Massachusetts and The
Conference Board, chairman of Inroads National Board of
Directors, a member of the board of trustees of Eye Research
Institute and a corporator of Emerson Hospital of Concord,
Massachusetts. He received B.S. and M.B.A. degrees from Cornell
University.
JAMES I. CASH, JR. Director since 1991
James E. Robison Professor of Business Administration at the
Harvard University Graduate School of Business Administration.
Mr. Cash, age 48, has been a faculty member of the Harvard
Business School since 1976. He is a director of Cambridge
Technology Partners, Inc., Knight-Ridder, Inc. and Tandy
Corporation. He received a B.S. degree from Texas Christian
University and M.S. and Ph.D. degrees in computer science and
management information systems from Purdue University.
-3-<PAGE>
TRUMAN S. CASNER Director since 1990
Partner in the law firm of Ropes & Gray. Mr. Casner, age
62, received a B.A. degree from Princeton University in 1955 and
an LL.B from Harvard Law School in 1958. He served as law clerk
to Chief Justice Wilkins of the Massachusetts Supreme Judicial
Court and joined Ropes & Gray in 1959, becoming a partner in
1968. He is a trustee of the Museum of Science, Boston, chairman
of the corporation and past president of Belmont Hill School and
a member of the corporation of Woods Hole Oceanographic
Institution. He is a member of the American Law Institute and a
fellow of The American Bar Foundation.
ARTHUR L. GOLDSTEIN Director since 1995
Chairman and Chief Executive Officer of Ionics,
Incorporated, an international company involved in the
purification and treatment of water. Mr. Goldstein, age 61, is a
director of Cabot Corporation, Unitrode Corporation and J.F.
White Contracting Company. He is a member of the visiting
committees at Harvard Business School and Harvard School of
Public Health. He is a trustee of the California Institute of
Technology and the Massachusetts General Physician's
Organization, Inc., an overseer of the Boston Museum of Science
and is a director of Jobs for Massachusetts, Inc. and the
Massachusetts High Technology Council. Mr. Goldstein received a
B.S. degree in chemical engineering from Rensselaer Polytechnical
Institute, a masters degree from the University of Delaware and
an M.B.A from Harvard University.
DAVID B. PERINI Director since 1980
Chairman and President of Perini Corporation, a construction
and real estate development company. Mr. Perini, age 58, holds a
B.S. degree from the College of the Holy Cross and received a
J.D. degree from Boston College Law School in 1962. He joined
Perini Corporation in 1962. He serves on the board of overseers
of the Tufts University School of Medicine. He has received
awards from the National Conference of Christians and Jews, the
Italian American Charitable Society and received the 1994 Ralph
Lowell Distinguished Citizen Award. Mr. Perini is a trustee of
the College of the Holy Cross and St. John's Preparatory School.
DENNIS J. PICARD Director since 1991
Chairman and Chief Executive Officer of Raytheon Company, a
diversified, technology-based international company, since 1991.
Mr. Picard, age 63, joined Raytheon in 1955 and held engineering
and management assignments leading to his election as president
and director in 1989. He is a member of the National Academy of
Engineering and its Industry Advisory Board, a fellow of the
American Institute of Aeronautics and Astronautics and a fellow
of the Institute of Electrical and Electronic Engineers. Mr.
Picard is a trustee of Northeastern University and Bentley
College, a corporator of Emerson Hospital, a director of the
Discovery Museums, the John F. Kennedy Library Foundation, Jobs
for Massachusetts, a member of the National Business Roundtable,
The Business Council, the Defense Policy Advisory Committee on
Trade (DPACT), the President's Export Council, the advisory
committee of the American Red Cross, the Armed Services YMCA of
the United States and the Armed Forces Communications and
Electronics Association. He is a member of the Algonquin Club of
Boston and the Commercial Club of Boston. He is a graduate of
Northeastern University and holds honorary doctorates from
Northeastern University, Merrimack College and Bentley College.
-4-<PAGE>
DIRECTORS SERVING UNTIL THE 1998 ANNUAL MEETING
Class II
JOSEPH A. BAUTE Director since 1990
Consultant to Markem Corporation, which provides systems and
services to mark customer products, since June 1993. Mr. Baute,
age 68, was for many years the chairman and chief executive
officer of Markem Corporation. He joined Markem in 1954 and held
engineering, sales and marketing positions until 1968 when he
became vice president and chief operating officer for Markem-USA,
Markem U.K. and Markem Europa. He was elected president and
director of Markem Corporation in 1973, chief executive officer
in 1977 and chairman in 1979. He is a director of Nashua
Corporation, Houghton Mifflin Company, Dead River Company and
Infosoft International. He is past director and chairman of the
Federal Reserve Bank of Boston. Mr. Baute received B.A. and M.S.
degrees from Dartmouth College.
CHARLES R. LAMANTIA Director since 1993
President and Chief Executive Officer of Arthur D. Little,
Inc., which provides management, technology and environmental
consulting services. Dr. LaMantia, age 56, was president and
chief operating officer of Arthur D. Little, Inc. from 1986 to
1988. Prior to rejoining Arthur D. Little in 1986, he was
president of Koch Process Systems, Inc. From 1977 to 1981, Dr.
LaMantia was vice president in charge of Arthur D. Little's
services to the chemical, metals and energy industries, having
assumed that position after 10 years on the firm's consulting
staff. He is a member of The Conference Board and the
Massachusetts Business Roundtable and an overseer of WGBH and the
Boston Museum of Science. Dr. LaMantia received B.A., B.S., M.S.
and Sc.D. degrees from Columbia University and attended the
Advanced Management Program at Harvard Business School.
ALFRED POE Director since 1994
President of Meal Enhancement Group and Corporate Vice
President of Campbell Soup Company, a food manufacturing company.
Mr. Poe, age 47, joined Campbell Soup Company in 1991. From 1982
to 1991, Mr. Poe was with Mars, Inc. and held various sales and
marketing assignments in the United States and the United
Kingdom. He is a member of the board of directors of LEAD
(Leadership, Education and Development) Program for minority
students. Mr. Poe holds a B.S. degree from Polytechnic Institute
of Brooklyn and an M.B.A. from the Harvard Graduate School of
Business.
<PAGE>
DAVID A. SPINA Director since 1989
President and Chief Operating Officer of the Corporation
since December 21, 1995. Mr. Spina, age 53, joined State Street
in 1969 as a credit analyst. He was elected Executive Vice
President in 1982 and Vice Chairman in 1992. Mr. Spina held the
positions of Chief Financial Officer and Treasurer from 1977 to
1992. Mr. Spina is head of the custody unit, which includes all
of State Street's custody, recordkeeping and related services for
institutional investors, including marketing, customer service,
operations and the Corporation's systems and technology groups.
He is chairman of Massachusetts Housing Investment Corporation, a
member of the board of directors of the Massachusetts Bankers
Association, a member of the executive committee of the
Massachusetts Taxpayers Foundation, Inc., a director of the
Metropolitan Boston Housing Partnership, Inc., chairman of the
board of trustees of the Dana Hall School, and a member of the
Boston Coordinating Committee and the Banker's Roundtable. Mr.
Spina holds a B.S. degree from the College of the Holy Cross and
an M.B.A. from Harvard University. He was an officer in the
United States Navy from 1964 to 1969, serving a combat tour of
duty in Vietnam.
-5-<PAGE>
ROBERT E. WEISSMAN Director since 1989
Chairman & Chief Executive Officer and Director of The Dun &
Bradstreet Corporation, provider of information services. Mr.
Weissman, age 55, joined Dun & Bradstreet in 1979. He became
Chairman on April 1, 1995 and Chief Executive Officer on January
1, 1994. He is a member of the Institute of Management
Accountants, the Society of Manufacturing Engineers, the
Institute of Electrical and Electronic Engineers, The Business
Roundtable, the Committee for Economic Development and The
U.S.-Japan Business Council and is a trustee of Babson College.
Mr. Weissman received a degree in Business Administration from
Babson College in 1964.
GENERAL INFORMATION
The Board of Directors has the overall responsibility for
the conduct of the business of the Corporation. Of the present
17 directors, 15 are outside directors and 2 are executive
officers of the Corporation. The Board of Directors held 6
meetings during 1995 and each of the directors attended 75% or
more of the total of all meetings of the Board and of the
committees of the Board on which each director served during the
year. Each member of the Board of the Corporation is also a
member of the Board of Directors of the Bank, except Mr. Poe, Mr.
Reznicek and Mr. Weissman. The Board of Directors of the Bank
held 12 meetings during 1995. Each member of the Executive
Committee and the Examining and Audit Committee of the
Corporation is also a member of the corresponding committee of
the Bank, and members customarily hold joint meetings of both
committees.
The Board of Directors has the following committees to
assist it in carrying out its responsibilities:
The EXECUTIVE COMMITTEE reviews and approves policies for
the extension of credit, investment of the Corporation's assets
and financial management; monitors activities under these
policies and reports to the Board, and acts on behalf of the
Board on recurring matters and between meetings under specific
delegations. Its members are Charles F. Kaye, Chair, Joseph A.
Baute, Marshall N. Carter, Truman S. Casner and David A. Spina.
During 1995, the Committee held 13 meetings.
The EXAMINING AND AUDIT COMMITTEE oversees the operation of
a comprehensive system of internal controls to ensure the
integrity of the Corporation's financial reports and compliance
with laws, regulations and corporate policies and monitors
communication with external auditors and bank regulatory
authorities. The Committee is composed of Joseph A. Baute,
Chair, Tenley E. Albright, James I. Cash, Jr. and John M.
Kucharski. During 1995, the Committee held 8 meetings.
The EXECUTIVE COMPENSATION COMMITTEE oversees the
compensation system for the Corporation's executive officers and
non-management directors. The Committee consists of Robert E.
Weissman, Chair, I. MacAllister Booth, Nader F. Darehshori,
Charles F. Kaye, Charles R. LaMantia and Bernard W. Reznicek.
During 1995, the Committee held 5 meetings.
The NOMINATING COMMITTEE, which held 2 meetings during 1995,
is composed of I. MacAllister Booth, Chair, Marshall N. Carter,
David B. Perini, Dennis J. Picard and Alfred Poe. The Committee
recommends nominees for directors of the Corporation and the
Bank. In carrying out its responsibility of finding the best
qualified directors, the Committee will consider proposals from a
number of sources, including recommendations for nominees
submitted upon timely written notice to the Secretary of the
Corporation by stockholders.
COMPENSATION OF DIRECTORS
Directors who are also officers of the Corporation receive
no compensation for serving as directors or as members of
committees. Directors who are not employees of the Corporation
or the Bank received an annual retainer of $22,000, payable in
shares of the Common Stock of the Corporation or in cash, plus a
fee of $1,250 for each meeting of the Board of Directors and each
committee meeting attended, as well as travel accident insurance
and reimbursement for travel expenses, for the period April 1995
through March 1996. In 1995, all outside directors received
their annual retainer in Common Stock.
Under a plan effective January 1, 1995, non-employee
directors with at least five years' service are eligible for a
retirement benefit equal to their annual retainer at retirement,
payable monthly for a period equal to the length of service of
the director on the Board up to a maximum of ten years. No
retirement benefits were paid in 1995.
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<PAGE>
BENEFICIAL OWNERSHIP OF SHARES
MANAGEMENT
The table below sets forth the number of shares of Common
Stock of the Corporation beneficially owned by each nominee for
Class III Director, the Class I and Class II Directors, the chief
executive officer and the four other most highly compensated
executive officers and by those persons and other executive
officers as a group as of the close of business on February 1,
1996. None of the nominees, directors or executive officers
owned beneficially as much as 1% of the outstanding shares of
Common Stock. The nominees, directors and executive officers in
the aggregate beneficially owned 1.2% of the Corporation's Common
Stock.
AMOUNT AND NATURE
OF BENEFICIAL
NAME OWNERSHIP
---------------------------------------------------------
Tenley E. Albright, M.D. 7,223(1)
A. Edward Allinson 90,000(2)
Joseph A. Baute 6,751(3)
I. MacAllister Booth 4,110
Dale L. Carleton 66,927(2)
Marshall N. Carter 118,800(2)
James I. Cash, Jr. 3,394
Truman S. Casner 5,716(4)
Nader F. Darehshori 4,716
Arthur L. Goldstein 504
Charles F. Kaye 29,944
John M. Kucharski 3,008
Charles R. LaMantia 2,274(5
Nicholas A. Lopardo 107,010(2)(6)
David B. Perini 16,528
Dennis J. Picard 4,056
Alfred Poe 1,144
Bernard W. Reznicek 4,358
David A. Spina 356,972(2)(7)
Robert E. Weissman 5,394
All of the above and other
executive officers as a group(25 persons 978,646(2)(5)(6)
___________________
(1) Includes 3,199 shares held in trust for a family member
pursuant to a trust of which Dr. Albright is a co-trustee and
1,100 shares owned by a family member with respect to which she
disclaims beneficial ownership.
(2) Includes shares which may be acquired within 60 days
through the exercise of stock options as follows: Mr. Allinson,
80,000; Mr. Carleton, 42,772; Mr. Carter, 110,600; Mr. Lopardo,
101,422; Mr. Spina, 132,000, and the group, 572,042.
(3) Includes 200 shares owned by a member of Mr. Baute's
family with respect to which he disclaims beneficial ownership.
(4) Includes 2,000 shares with respect to which Mr. Casner
shares voting and investment power.
(5) Includes shares in which voting power is shared as
follows: Dr. LaMantia, 500, and the group, 1,930.
(6) Includes 5,488 shares owned by a member of Mr. Lopardo's
family with respect to which he disclaims beneficial ownership.
(7) Includes 20,000 shares owned by a member of Mr. Spina's
family with respect to which he disclaims beneficial ownership.
-8-<PAGE>
OTHER STOCK OWNERSHIP
The information below indicates the only person known to the
Corporation to be the beneficial owner of more than 5 percent of
the Corporation's Common Stock based on Schedule 13G filed by
Cooke & Bieler, Inc. with the Securities and Exchange Commission,
reflecting its shareholdings as of December 31, 1995.
Shares
Name and Address Beneficially Percent
of Beneficial Owner Owned of Class
- -----------------------------------------------------------------
Cooke & Bieler, Inc. 4,883,000(1) 5.9%
1700 Market Street
Philadelphia, PA 1910
_____________
1) Cooke & Bieler, Inc., an investment advisor, has sole
power to vote or direct the vote of 3,912,300 of such shares and
sole power to dispose or to direct the disposition of
4,775,500 of such shares.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934
requires the Corporation's executive officers and directors to
file initial reports of ownership and reports of changes in
ownership of the Common Stock of the Corporation with the
Securities and Exchange Commission ("SEC"). Executive officers
and directors are required by SEC regulations to furnish the
Corporation with copies of all Section 16(a) forms which they
file.
Based on a review of the copies of such forms furnished to
the Corporation and written representations from the
Corporation's executive officers and directors, the Corporation
believes that in 1995 all Section 16(a) filing requirements
applicable to its executive officers and directors were met.
CERTAIN TRANSACTIONS
During 1995 certain directors and executive officers of the
Corporation and the Bank, and various corporations and other
entities associated with such directors, were customers of the
Bank and its affiliates and had ordinary business transactions
with the Bank. The transactions include loans and commitments
made in the ordinary course of the Bank's business and on
substantially the same terms, including interest rate and
collateral, as those prevailing at the time for comparable
transactions with unrelated persons with no more than normal risk
of collection. The Bank and other subsidiaries of the Corporation
have used products or services of Dun & Bradstreet with which Mr.
Weissman, a director, is associated. Additional transactions of
this
nature may be expected to take place in the ordinary course of
business in the future. Ropes &
Gray, a law firm of which Mr. Casner is a partner, was retained
by the Corporation to handle certain legal matters during the
past year. It is anticipated that the firm will continue to
provide legal services in the current year.
No executive officer of the Corporation is allowed to borrow
from the Bank other than through the use of a reserve account
with limits of up to $20,000 as allowed by Massachusetts law and
at the same interest rate paid by the public.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Corporation's Executive Compensation
Committee are I. MacAllister Booth, Nader F. Darehshori, Charles
F. Kaye, Charles R. LaMantia, Bernard W. Reznicek and Robert E.
Weissman, Chair. No present or former officer of the Corporation
or the Bank served as a member of the Committee. Furthermore, no
executive officer of the Corporation served as a director of any
entity of which an executive officer served on the Corporation's
Board or the Committee.
-9-<PAGE>
EXECUTIVE COMPENSATION
Shown below is information concerning the annual and long
term compensation paid by the Corporation and its subsidiaries,
including the Bank, with respect to 1995, 1994 and 1993 to the
chief executive officer and the four other most highly
compensated executive officers of the Corporation (the "Named
Executive Officers").
<TABLE> SUMMARY COMPENSATION TABLE
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
------------------- -------------
AWARDS PAYOUTS
-------- -------
OTHER SECURITIES ALL
ANNUAL UNDERLYING OTHER
COMPEN- OPTIONS/ LTIP COMPEN-
NAME AND SALARY BONUS SATION SARS PAYOUTS SATION
PRINCIPAL POSITION YEAR ($) ($) ($) (#) ($)(1) ($)(2)
- ------------------ ---- ------- ------- ------ --------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Marshall N. Carter 1995 750,004 455,627 0 None 0 4,620
Chairman, President 1994 725,004 494,813 0 120,000 985,846 4,620
Chief Executive 1993 643,753 450,000 0 None 0 4,497
Officer
David A. Spina (3) 1995 550,003 267,301 0 25,000 0 4,620
Vice Chairman, 1994 537,503 244,563 0 80,000 684,687 4,620
Treasurer and Chief 1993 493,752 300,000 0 None 0 4,497
Nicholas A. Lopardo(4)1995 450,002 957,251 0 None 0 4,620
Executive Vice 1994 425,002 661,610 0 50,000 0 4,620
President 1993 347,919 470,000 0 None 0 4,497
A. Edward Allinson (5)1995 450,002 283,001 0 None 0 4,620
Executive Vice 1994 450,002 293,250 0 50,000 502,590 4,620
President 1993 450,002 280,000 0 None 0 4,497
Dale L. Carleton 1995 343,752 139,220 0 None 0 4,620
Executive Vice 1994 312,502 142,188 0 50,000 255,889 4,620
President 1993 265,500 160,000 0 None 0 4,497
- ------------------
</TABLE>
(1) Long term compensation payouts reflect performance shares earned in
accordance with the attainment of performance targets for the 3 year period,
1992-1994, and paid in cash equal to the fair market value of the
Corporation's Common Stock at the end of the performance period.
(2) Reflects the Corporation's contributions to the Salary Savings
Program in 1995.
(3) Mr. Spina was elected President and Chief Operating Officer on
December 21, 1995.
(4) Includes bonuses from the Corporation's Senior Executives Annual
Incentive Plan and from the State Street Global Advisors' Incentive Plan.
(5) Includes compensation received by Mr. Allinson of $100,000 in 1993,
$100,750 in 1994 and $100,750 in 1995 as Chairman of Boston Financial Data
Services, Inc. which is 50% owned by the Corporation.
-10-
<PAGE>
Shown below is information with respect to a grant of stock
options to the Named Executive Officer during 1995 pursuant to the
1994 Stock Option and Performance Unit Plan, which is reflected in the
Summary Compensation Table on page 10. No other Named Executive
Officer received grants, and no stock appreciation rights were granted
under the Plan in 1995.
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM (2)
(a) (b) (c) (d) (e) (f) (g)
PERCENT OF
NUMBER OF TOTAL
SECURITIES OPTIONS/
UNDERLYING SARS
OPTIONS/ GRANTED TO EXERCISE
SARS EMPLOYEES OR BASE EXPIRA-
GRANTED IN FISCAL PRICE TION
NAME (#)(1) YEAR ($/SH) DATE 5% ($) 10% ($)
- ---- ------- ------ ----- ---- ------ --------
<S> <C> <C> <C> <C> <C> <C>
David A. Spina(3) 25,000 6.62% 44.00 12/20/05 692,000 1,750,000
____________________
</TABLE>
(1) Options become exercisable in 20% installments over a five year
period commencing December 31, 1996.
(2) Gains are reported net of the option exercise price, but before taxes
associated with exercise. These amounts represent certain assumed rates of
appreciation only, as set by the SEC. The actual value, if any, that the
Named Executive Officer may realize from these options will depend solely on
the gain in stock price over the exercise price when the options are
exercised.
(3) Represents options granted to Mr. Spina in lieu of a salary increase
upon his promotion to President and Chief Operating Officer.
<PAGE>
Shown below is information with respect to the exercise of stock
options to purchase the Corporation's Common Stock by the Named
Executive Officers during 1995 and the fiscal year-end value of
unexercised options held by the Named Executive Officers granted in
prior years under the 1984 Stock Option Plan which expired in 1989,
the 1985 Stock Option and Performance Share Plan which expired in
1992, the 1989 Stock Option Plan, the 1990 Stock Option and
Performance Share Plan and the 1994 Stock Option and Performance Unit
Plan.
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
<CAPTION>
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
DECEMBER 31, 1995(#) DECEMBER 31, 1995
($)(1)
SHARES -------------------- -----------------
ACQUIRED VALUE
NAME ON EXER- REALIZED EXER- UNEXER- EXER- UNEXER-
CISE (#) ($)(2) CISABLE CISABLE CISABLE CISABLE
- ---- -------- -------- ------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Marshall N. Carter None 0 113,600 118,400 1,949,713 1,946,600
David A. Spina None 0 132,000 89,000 3,113,500 1,053,000
Nicholas A. Lopardo 13,580 312,797 101,422 40,000 2,988,438 642,500
A. Edward Allinson 26,000 596,641 80,000 40,000 2,033,125 642,500
Dale L. Carleton None 0 42,772 40,000 1,086,495 642,500
</TABLE>
(1) Represents the difference between the exercise price of the stock
options and the fair market value of the stock on December 31, 1995
($45.00).
(2) Represents the difference between the exercise price of the stock
options and the fair market value of the stock at the time of the exercise.
-11-
<PAGE>
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
The Executive Compensation Committee of the Board of Directors
furnishes the following report on Executive Compensation.
POLICY
State Street combines information technology with banking, trust,
investment management and securities processing capabilities to
support the investment strategies of our customers worldwide. The
Corporation's goal is to be the leading global servicer of financial
assets. The Corporation's executive compensation program is designed
to attract and retain superior executives, to focus these individuals
on achieving the Corporation's objectives and to reward executives for
meeting specific short- and long-term performance targets. The
compensation program places emphasis on challenging performance goals,
business growth and sustainable real growth in earnings per share.
Thirteen executives participated in the executive compensation program
in 1995. The chairman and chief executive officer, the vice chairman,
and executive vice presidents are considered executives for this
purpose.
The Executive Compensation Committee is comprised entirely of
independent, non-employee directors. The Committee develops and
reviews and, with respect to officer-directors, recommends to the
Board of Directors for approval, strategic compensation plans for
executives of the Corporation. The plans are designed to align
executive compensation with the Corporation's business strategy and to
attract and retain high caliber executives. The program provides
significant compensation opportunities which are directly related to
the achievement of challenging long-term goals and growth in the
Corporation's stock price. By including stock-based compensation
plans within the compensation strategy, State Street links closely the
goals of stockholders and executives.
The principles of this compensation strategy are applied
throughout the Corporation. Since executives of the Corporation have
the greatest opportunity to influence long-term performance, a greater
proportion of their compensation is linked to the achievement of long-
term financial goals and to stock price. Other individuals who manage
business units or have corporate functional or staff responsibilities
have a significant opportunity to influence the Corporation's results,
and a sizable portion of their total compensation is related to the
achievement of financial goals of both the unit and the Corporation.
In addition to executives, many senior officers who make significant
contributions to the Corporation participate in the Corporation's
stock option plan. State Street also offers specific bonus
opportunities to individuals who have specialized sales, trading or
investment responsibilities. Outstanding performance by these
specialists is rewarded with bonuses linked directly to the attainment
of challenging and measurable business goals.
The Committee met five times in 1995 and reported its activities
to the Board of Directors. In conjunction with its annual
comprehensive review of the executive compensation program, the
Committee engaged its own independent compensation consultant. The
consultant worked for the Committee in reviewing the executive
compensation program, reviewing a peer group of public companies with
which to compare the Corporation's executive compensation, financial
performance and total return to stockholders and considering
modifications to existing plans. The Committee, with assistance from
the independent consultant, validated a group of companies as a
reference group against which to compare compensation practices and
competitive levels of compensation. This group includes large U.S.
bank holding companies, selected other technology-based companies
engaged in servicing businesses and believed to be competing with the
Corporation for the same caliber of executive talent, and New England
bank holding companies.
-12-
<PAGE>
The Committee believes that the Corporation's most direct
competitors for executives are not necessarily the same companies that
would be included in a peer group established to compare stockholder
returns. Therefore, the reference companies used for comparative
compensation purposes contain some overlap with, but are not identical
to, the companies in the S&P Financial Index used for performance
comparison under "Stockholder Return Performance Presentation."
As a result of its reviews, the Committee determined that the
fundamental elements of the compensation plan, salary, bonus, stock
options and performance units are well balanced in a program that
supports the Corporation's business strategy, provides competitive
compensation and creates value for stockholders.
The elements of the Corporation's executive compensation consist
of base salary, annual bonus, performance units and stock options.
These are complementary components where salary and bonus reflect one
year results, performance units reflect two year results and stock
options reflect long-term stock price appreciation. The Executive
Compensation Committee's policies with respect to each of these
elements, including the bases for the compensation awarded in 1995 to
the Corporation's Chief Executive Officer, Mr. Carter, are discussed
below.
BASE SALARIES
Base salaries for executives are determined by evaluating the
responsibilities of the position, the strategic value of the position
to State Street, and the experience of the individual. No specific
formula is used to set base salaries. The Committee determined that
it is appropriate for executive salary levels to be near the median of
the reference group.
Annual salary adjustments are determined by evaluating the
performance of the Corporation and of each executive and by taking
into account each executive's responsibilities. The Committee also
considers the range of salary increases which are awarded to all
employees in the Corporation. In reviewing individual performance,
the Committee considers the views of Mr. Carter with respect to other
executives. Significant salary increases were granted to Mr. Carter
and other executives in 1994. After this increase, Mr. Carter's
salary was below the median when compared to salaries paid to chairman
of the board and chief executive officer positions in the reference
group. At the time these increases were approved, the Committee
expressed its intent that the increases would cover a two year period,
1994 and 1995. It did reserve the right to review this decision in
1995. With respect to the base salary granted to Mr. Carter for 1995,
the Committee reviewed a comparison of base salaries of chief
executive officers of other companies, using the group of reference
companies, the range of increases granted to individuals at all levels
in the Corporation, the increase which had been granted to Mr. Carter
in 1994, and the assessment by the Committee and the Board of Mr.
Carter's individual performance in 1994. After considering these
facts, the Committee and the Board of Directors confirmed the decision
to maintain Mr. Carter's salary at $750,000 for 1995.
ANNUAL BONUSES
The Corporation's executives are eligible for annual cash bonuses
under the provisions of the Senior Executives Annual Incentive Plan.
At its meeting in December 1994, the Committee established performance
targets and maximum bonus awards under the Senior Executives Annual
Incentive Plan. The 1995 performance targets were based on return on
-13-
<PAGE>
equity and earnings per share. Each goal was weighted 50%.
Performance targets for 1995 were established at a minimum target of
12% return on equity and a maximum target of 18% return on equity.
The earnings per share targets were established at a minimum target of
$2.02 and a maximum target of $3.13. The Plan provided that no bonus
would be paid for performance below the minimum targets, performance
at or above the maximum targets would result in 100% of the bonus
being paid, and performance between the minimum and maximum targets
would result in a prorated bonus being paid, subject in each case to
reduction by the Executive Compensation Committee.
The Plan approved by the Committee further provided that if
maximum annual targets are achieved, the award to the chief executive
officer would be a maximum of 75% of 1995 salary paid, the award to
the vice chairman would be a maximum of 60% of salary paid, and the
award to other participants would be a maximum of 50% of 1995 salary
paid.
At its meeting in February 1996, the Committee reviewed
information supplied by the Corporation's independent auditors and
certified that the Corporation achieved a 16.7% return on equity and
earned $2.95 per share in 1995. This equates to 78% of the maximum
potential bonus award for the return on equity target and 84% of the
maximum potential bonus award for the earnings per share target. The
Committee approved a bonus for Mr. Carter equal to 61% of his 1995
salary paid. Bonuses to the other participants in the plan who
received bonuses averaged 42% of the total 1995 salaries paid to those
receiving bonuses.
The Committee believes that growth in earnings per share
representing an 18% return on equity is an appropriate target for
maximum bonus attainment. It would place State Street's performance
among the top performers of comparable companies, would provide a very
competitive return for stockholders and leave management with the
flexibility to make long-term expenditures and investments that will
foster continued growth in the business. The most recent survey
reviewed by the Committee reflected year-end 1994 performance of the
15 reference companies, of which 10 are bank holding companies. For
the five year period 1990-1994, the average return on equity for these
companies was 16.0% and the median was 16.1%. The average return on
equity for the bank holding companies in the reference group was 12.6%
and the median was 12.3%. Among bank holding companies in the
reference group, 20% achieved a five year average return on equity of
greater than 18% and 50% generated a five year average return on
equity of less than 12%. The five year average return on equity for
State Street, as restated for the January 31, 1995 acquisition of
Investors Fiduciary Trust Company, was 17.5%.
At its meetings in December 1995, the Committee adopted and
established 1996 performance targets for the Senior Executives Annual
Incentive Plan. This Plan was approved by stockholders at the 1995
annual meeting and provides that corporate achievement of two targets
will determine whether, and the extent to which, a participant earns a
bonus award. The targets are based on return on equity and earnings
per share. Each target is specified as a range. No bonus will be
paid for performance below minimum targets. Performance at or above
the maximum targets will result in 100% of the bonus being paid and
performance between the specified targets will result in a prorated
bonus being paid, subject in each case to reduction by the Executive
Compensation Committee.
If maximum targets are achieved, the maximum award to the chief
executive officer will be 75% of the current year's salary paid, the
maximum award to the president and chief operating officer will be 60%
of current year's salary paid and the maximum award to all other
participants will be 50% of current year's salary paid. The maximum
bonus payable to any single participant is limited to $1.5 million.
All awards will be made in cash after certification by the
Executive Compensation Committee that the established performance
goals have been met.
-14-
<PAGE>
PERFORMANCE UNITS
Performance units represent a contingent right to a cash payment,
based on the price of the Corporation's stock, in the event the
Corporation meets specified performance goals over a specified time
period following the grant. Performance units have been granted to
the Corporation's executives once every two years or at the time an
officer joined the executive group. The size of the grants is
determined based on a target level of long-term incentive opportunity
near the median for companies in the reference group.
Under the 1994 Stock Option and Performance Unit Plan, which was
approved by stockholders at the 1994 annual meeting, performance units
will be granted every two years and will have a measurement period of
two years. The performance measures used for determining the number
of shares earned include one or more of an earnings per share target,
a return on equity target, and a total return to stockholders target.
In December 1993, executives were granted performance units by
the Board of Directors having a nominal value at the time of grant
equal to between 46% and 166% of annual salary and bonus. This is
equivalent to 23% to 84% on an annual basis. The size of the grants
was determined based upon data supplied by the independent
compensation consultant and represents long-term incentive opportunity
which is near the median for companies in the reference group. The
December 1993 grant included 30,000 performance units granted to Mr.
Carter. These grants have a two-year performance period for the years
1995 and 1996.
At its meeting in December 1994, the Committee established
performance targets for the 1995-1996 performance period for these
performance units. Forty percent of the performance units granted are
tied to a return on equity target, 40% of the performance units
granted are tied to an earnings per share target and 20% of the
performance units granted are tied to a total return to stockholders
target. Minimum and maximum targets have been established for return
on equity and earnings per share. For the return on equity target,
performance for each of the two years 1995 and 1996 will be averaged
to determine achievement of the target. A minimum and maximum
earnings per share target for the two years 1995 and 1996 combined has
been established. In each case no units will be earned for
performance below the minimum target. Performance at or above the
maximum target will result in 100% of the units being earned, and
performance between the minimum and maximum targets will result in a
prorated percentage of units being earned. For the total return to
stockholders target, the Committee has determined levels of
performance at which 0%, 50% and 100% of the units will be earned.
Performance achieved in each year of the two-year period will be
averaged to determine the number of performance units earned.
Therefore, if in 1995 the Corporation achieves the 50% level of
performance and in 1996 it achieves the 100% level of performance, 75%
of the performance units which are tied to this measure will be
earned.
At the end of the two year performance period, December 31, 1996,
a cash payment will be calculated based on the number of performance
units earned times the market value of the Corporation's common stock
at the end of the performance period. For this purpose, market value
is defined as the value of a share of common stock equal to the
average daily high and low prices on the last ten days of the
performance period. In this way, the potential value of the
performance units relates directly to both corporate financial
performance in determining how many units are earned and stock price
appreciation in determining the cash value of the shares earned.
STOCK OPTIONS
Stock options are granted to executives every two years or at the
time an officer joined the executive group. Stock options were
granted to the executive group in December 1994 and are scheduled to
be granted again in
-15-
<PAGE>
December 1996. The size of the 1994 grants was determined based upon
a target level of long-term incentive opportunity which is near the
median for companies in the reference group. In targeting long-term
incentive opportunity, the Committee relied upon data supplied by the
independent compensation consultant, which took into account the
performance units which had been granted in 1993. Mr. Carter was
granted options to purchase 120,000 shares and Mr. Spina was granted
options to purchase 80,000 shares. In December of 1995, the Board of
Directors elected Mr. Spina President and Chief Operating Officer of
the Corporation. In conjunction with this promotion, the Board
granted Mr. Spina options to purchase 25,000 additional shares.
The exercise price of options is equal to the market price of the
shares at the time of the grant and the options become exercisable in
equal installments over a five-year period.
Since the stock options are granted at market price, the value of
the stock options is wholly dependent upon an increase in the
Corporation's stock price. It is the policy of the Committee not to
reset option exercise prices once they have been established. Because
the Committee views stock option grants as a part of the executive's
total compensation package for the period covered by the grant, the
amount of stock options outstanding at the time of a new grant or
granted in prior years does not serve to increase or decrease the size
of the new grant.
TAX LAW
Section 162(m) of the Internal Revenue Code limits the
Corporation's federal income tax deduction to $1,000,000 per year for
compensation to any of its five highest paid executive officers.
Performance-based compensation is not, however, generally subject to
the deduction limit, provided certain requirements of Section 162(m)
are satisfied. The Committee reviewed all elements of the program
against the standards for qualifying for the tax deduction, and awards
under the 1994 Stock Option and Performance Unit Plan and the Senior
Executives Annual Incentive Plan which have been designed to qualify
for the performance-based deduction. A portion of Mr. Lopardo's bonus
under the State Street Global Advisors' Incentive Plan did not qualify
for the federal income tax deduction by reason of Section 162(m).
CONCLUSION
Through the programs described above, the Corporation's executive
compensation is linked directly to the Corporation's performance,
growth in stockholder value and each executive's contribution to those
results. As the Corporation's business changes, particularly in light
of its efforts to expand globally, and with the increasingly
competitive and complex business and regulatory environment, the
continuing assessment of the compensation structure and goals is
required to assure that compensation incentives remain consistent with
stockholder interest and closely tied to continuing growth in
stockholder value.
Submitted by,
I. MacAllister Booth
Nader F. Darehshori
Charles F. Kaye
Charles R. LaMantia
Bernard W. Reznicek
Robert E. Weissman, Chair
-16-
<PAGE>
STOCKHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the cumulative total
stockholder return on the Corporation's Common Stock to the cumulative
total return of the S&P 500 Index and the S&P Financial Index for the
period of five fiscal years commencing December 31, 1990 and ended
December 31, 1995, assuming $100 invested in the Corporation's Common
Stock and in each index and assuming reinvestment of dividends. The
S&P Financial Index is a publicly available measure of 65 of the
Standard & Poor's 500 companies, representing 33 banking companies, 17
insurance companies and 15 financial services companies.
[PERFORMANCE GRAPH]
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
State Street Boston
Corporation
Total Return 100 187 258 224 174 278
S&P 500 Index
Total Return 100 130 140 155 157 215
S&P Financial Index
Total Return 100 151 186 207 199 307
-17-<PAGE>
RETIREMENT BENEFITS
As of January 1, 1990, the benefit formula under the
Corporation's defined benefit plan (the "Retirement Plan") was changed
to a cash balance formula. An account balance was established for
each participant equal to the then present value of the participant's
benefit earned to date. Each year this account balance is increased
by interest at a specified rate and a contribution credit equal to a
percentage of the participant's base salary for the calendar year
exclusive of overtime, bonuses or other extraordinary benefits or
allowances. The percents of base salary are 4.0% for the first year
of participation increasing to 11.25% for the thirtieth year, and zero
thereafter. Employees who were participants on December 31, 1989 will
receive the greater of their account balance or the benefit derived
from the "grandfathered" formula if the participant retires from the
plan. The grandfathered formula, based on 30 years of service, is
equal to a benefit of 50% of final average pay minus 50% of the
estimated Social Security benefit. For periods of service of less
than 30 years, the benefit is reduced pro rata.
Employees are enrolled in the Retirement Plan following the
completion of one year of service and attainment of the age of 21.
The normal retirement age is 65, although earlier retirement options
are available. The Retirement Plan has a five-year vesting provision,
and participants who are vested will receive their account balance or
annuity equivalent if they leave the employ of the Corporation or the
Bank before retirement.
Under federal law, an employee's benefits under a qualified
retirement plan are limited to certain maximum amounts. On October 1,
1987, the Corporation adopted a supplemental retirement plan, as
amended (the "1987 Supplemental Plan") to supplement the benefits
under the Retirement Plan by payment of additional retirement benefits
out of general funds of the Corporation. Each of the Named Executive
Officers is included in the 1987 Supplemental Plan. The 1987
Supplemental Plan provides for the funding through a trust of
retirement benefits following a change of control. The trust is
currently unfunded.
Effective as of January 1, 1995 the Corporation adopted a
supplemental defined benefit pension plan (the "1995 Supplemental
Plan") to provide certain key employees with competitive retirement
benefits and encourage the continued employment of such employees with
the Corporation. The 1995 Supplemental Plan provides for the payment
of additional annual benefits upon retirement at age 65 (or a
proportionately reduced amount in the event of retirement on or after
the age of 55 but prior to the age of 65), calculated as a straight
life annuity, equal to 50% of such participant's final average
earnings (highest average of any 5 consecutive years' earnings, as
defined therein, during the last 10 years of employment) less annual
benefits paid to such participant from the Retirement Plan, the 1987
Supplemental Plan and other retirement income payable to such
participant under other plans of the Corporation or other of the
participant's employers. Such benefits are subject to forfeiture in
the event that the participant's employment with the Corporation
terminates for any reason prior to reaching age 55 or completing 10
full years of employment with the Corporation. In addition, such
benefits shall terminate if the participant engages in certain
competitive activities within two years of termination.
Under an agreement dated March 5, 1992, Mr. Carter will receive
an additional pension contribution as a percent of base compensation
calculated as if a contribution had been made to the Retirement Plan
of 7.50% in the first year and 3.75% in each of the next 15 years. In
addition, the Carter Letter Agreement (as defined below) provides,
among other things, that the forfeiture and termination provisions
relating to the 1995 Supplemental Plan will be deemed inapplicable in
the event that (i) Mr. Carter's employment is terminated for reasons
other than voluntary resignation, death or malfeasance before July 23,
2001 and (ii) he is not eligible for the severance benefits set forth
in the change of control arrangements described below. See -
"Termination of Employment and Change of Control Arrangements".
-18-<PAGE>
Final average earnings include annual base salary plus any
annual cash incentive compensation awards only. As of December
31, 1995, the credited years of service for each of the Named
Executive Officers were as follows: Mr. Carter, 3; Mr. Spina,
22; Mr. Lopardo, 7; Mr. Allinson, 11, and Mr. Carleton, 16.
Current compensation covered by the Retirement Plan as of
December 31, 1995 for each of the Named Executive Officers was as
follows: Mr. Carter, $1,244,800; Mr. Spina, $794,600; Mr.
Lopardo, $1,111,610; Mr. Allinson, $642,500, and Mr. Carleton,
$467,200.
The estimated annual aggregate benefits (which are not
subject to a deduction for Social Security), assuming a single
life annuity, payable upon normal retirement under the final
average pay formula to the Named Executive Officers assuming each
continues to be employed by the Corporation until age 65 at his
annual base salary and cash incentive compensation at December
31, 1995 are as follows: Mr. Carter, $622,400; Mr. Spina,
$397,300; Mr. Lopardo, $555,805; Mr. Allinson, $321,250, and
Mr. Carleton, $233,600.
TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS
On October 19, 1995, the Corporation entered into new
employment agreements with Messrs. Carter, Spina, Lopardo,
Allinson and Carleton which become operative following a change
of control of the Corporation, as defined in the employment
agreements. The employment agreements continue in effect while
the executive officers are employed by the Corporation until
December 31, 1997 with provision for automatic renewal commencing
December 31, 1996 and remain in effect for a period of two years
after a change of control. If the employment of the executive
officers are terminated following a change of control, or if Mr.
Carter's or Mr. Spina's employment is terminated voluntarily
within thirty days of the six month period following a change of
control, or within thirty days of the twelve month period
following a change of control for the other Named Executive
Officers they would become entitled to various benefits under the
employment agreements, including payment of three times the
executive officers' base salary and bonus, unless the executive
officers' employment were terminated by the Corporation for cause
or by the executive officers without good reason as defined in
the agreement. If the executive officers had been terminated on
December 31, 1995, they would have been entitled to receive the
following amounts as severance pay: Mr. Carter, $3,616,881; Mr.
Spina, $2,451,903; Mr. Lopardo, $4,221,753; Mr. Allinson,
$2,199,003, and Mr. Carleton, $1,467,660. The Corporation will
make additional payments in an amount such that after the payment
of income and excise taxes, the executive officer will be in the
same after tax position as if no excise tax under Section 4999 of
the Internal Revenue Code had been imposed. A change of control
is defined to include the acquisition of 25% or more of the
Corporation's then outstanding stock or other change of control
as determined by regulatory authorities, a significant change in
the composition of the Board of Directors, merger or
consolidation by the Corporation without certain approvals of the
Board of Directors, and the sale of a majority of the
Corporation's assets.
In addition, on October 19, 1995, the Corporation entered
into a letter agreement with Mr. Carter (the "Carter Letter
Agreement") that provides for severance pay equal to two years'
salary and bonus if (i) his employment is terminated for reasons
other than voluntary resignation, death or malfeasance before
July 23, 2001, and (ii) he is not eligible for the severance
benefits set forth in the change in control arrangements
described above. In such circumstances, for purposes of
determining the amount payable to Mr. Carter pursuant to the 1995
Supplemental Plan (i) the forfeiture and termination provisions
described above will be deemed inapplicable, and (ii) the
benefits otherwise payable thereunder will be reduced by
multiplying such amounts by a fraction, the numerator of which is
the number of whole calendar months Mr. Carter was employed by
the Corporation and the denominator of which is 120. Such
payments shall terminate in the event that Mr. Carter becomes
employed by one of the top five master trust or custody banks or
one of the top five mutual fund
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custodians within two years of termination (the "Non-Competition
Clause"). The Carter Letter Agreement also provides that in the
event of a change in control of the Corporation and termination
of Mr. Carter's employment under circumstances which entitle him
to receive a severance payment pursuant to the change in control
arrangements described above the 1995 Supplemental Plan will be
modified in the manner set forth above (except that the Non-
Competition Clause will be inapplicable) and Mr. Carter will be
provided with a benefit equivalent in value to that which he
would receive had his employment with the Corporation continued
an additional three years.
RELATIONSHIP WITH INDEPENDENT AUDITORS
The Board of Directors, upon the recommendation of the
Examining and Audit Committee, has selected Ernst & Young LLP as
independent auditors for the Corporation for the year ending
December 31, 1996. It is expected that representatives of Ernst
& Young LLP will be present at the Annual Meeting to respond to
appropriate questions and will have the opportunity to make a
statement if they so desire.
VOTE REQUIRED
Consistent with state law and under the Corporation's By-
laws, a majority of the shares entitled to be cast on a
particular matter, present in person or represented by proxy,
constitutes a quorum as to such matter. Votes cast by proxy or
in person at the 1996 Annual Meeting will be counted by persons
appointed by the Corporation to act as tellers for the meeting.
The six nominees for election as directors at the 1996
Annual Meeting who receive a plurality of the votes properly cast
for the election of directors shall be elected directors.
The tellers will count shares represented by proxies that
withhold authority to vote for a nominee for election as a
director or that reflect abstentions and "broker non-votes"
(i.e., shares represented at the meeting held by brokers or
nominees as to which (i) instructions have not been received from
the beneficial owners or persons entitled to vote and (ii) the
broker or nominee does not have the discretionary voting power on
a particular matter) only as shares that are present and entitled
to vote on the matter for purposes of determining the presence of
a quorum. Neither abstentions nor broker non-votes have any
effect in the election of directors.
PROPOSALS AND NOMINATIONS BY STOCKHOLDERS
Stockholders who wish to present proposals at the 1997
Annual Meeting of Stockholders for inclusion in the Corporation's
proxy material for that meeting must submit such proposals to the
Secretary of the Corporation on or before November 12, 1996 for
inclusion in the proxy materials circulated by the Board of
Directors relating to the 1997 Annual Meeting.
Pursuant to the By-laws of the Corporation, proposals of
business and nominations for directors other than those to be
included in the Corporation's proxy statement and form of proxy
may be made by stockholders of record entitled to vote at the
meeting if notice is timely given and if the notice contains the
information required by the By-laws. Except as noted below, to
be timely a notice with respect to the 1997 Annual Meeting must
be delivered to the Secretary of the Corporation no earlier than
January 17, 1997 and no later than February 16, 1997 unless the
date of the 1997 Annual Meeting is advanced by more than thirty
(30) days or delayed by more
-20-<PAGE>
than sixty (60) days from the anniversary date of the 1996 Annual
Meeting in which event the By-laws provide different notice
requirements. In the event the Board of Directors nominates a
New Nominee (as defined) a stockholder's notice shall be
considered timely if delivered not later than the 10th day
following the date on which public announcement (as defined) is
first made of the election or nomination of such New Nominee.
Any proposal of business or nomination should be mailed to:
Secretary, State Street Boston Corporation, 225 Franklin Street,
Boston, Massachusetts 02110.
OTHER MATTERS
The Board of Directors does not know of any other matters
which may be presented for action at the meeting. Should any
other business come before the meeting, the persons named on the
enclosed proxy will, as stated therein, have discretionary
authority to vote the shares represented by such proxies in
accordance with their best judgment.
The Board of Directors would like to have you attend the
meeting in person. Please, however, mark, date, sign and return
the enclosed proxy as promptly as possible in any event. If you
attend the meeting, you may nonetheless vote in person by ballot
if you desire.
March 12, 1996
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[STATE STREET LOGO]
State Street Boston Corporation
225 Franklin Street
Boston, Massachusetts 02101
-new page-
<PAGE>
PROXY PROXY
STATE STREET BOSTON CORPORATION
ANNUAL MEETING OF STOCKHOLDERS - APRIL 17, 1996
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of State Street Boston Corporation
(the "Corporation") hereby appoints Susanne G. Clark, Evalyn
Lipton Fishbein and Claire A. Fusco (each with power to act
without the others and with power of substitution) proxies to
represent the undersigned at the Annual Meeting of Stockholders
of the Corporation to be held on April 17, 1996 and at any
adjournments thereof, with all the power the undersigned would
possess if personally present, and to vote, as designated, all
shares of Common Stock of the Corporation which the undersigned
may be entitled to vote at said Meeting, hereby revoking any
proxy heretofore given.
TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS'
RECOMMENDATIONS JUST SIGN AND DATE THE OTHER SIDE; NO BOXES
NEED TO BE CHECKED.
PLEASE VOTE, DATE, AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN
ENCLOSED ENVELOPE
Please sign this proxy exactly as your name appears on the books
of the Corporation. Joint owners should each sign personally.
Trustees and other fiduciaries should indicate the capacity in
which they sign, and where more than one name appears, a majority
must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
________________________________ ________________________________
________________________________ ________________________________
________________________________ ________________________________
________________________________ ________________________________
1. Election of Six Directors:
[ X ] PLEASE MARK VOTES AS IN FOR ALL
THIS EXAMPLE FOR WITHHOLD EXCEPT
[ ] [ ] [ ]
Each of these matters is
fully described in the
Notice of and Proxy T. ALBRIGHT, M. CARTER, N. DAREHSHORI
Statement for the Meeting C. KAYE, J. KUCHARSKI, B. REZNICEK
receipt of which is hereby
acknowledged. THE BOARD If you do not wish your shares
OF DIRECTORS RECOMMENDS THAT voted "FOR" one or more
YOU GRANT AUTHORITY FOR THE nominees, mark the "FOR
ELECTION OF DIRECTORS. ALL EXCEPT" box and strike
THE SHARES REPRESENTED BY a line through the nominee(s)
THIS PROXY WILL BE VOTED IN name. Your shares will be
ACCORDANCE WITH THE voted for the remaining
SPECIFICATIONS MADE. IF NO nominee(s).
SPECIFICATION IS MADE, THE
PROXY WILL BE VOTED IN
ACCORDANCE WITH THE BOARD OF
DIRECTORS' RECOMMENDATIONS.
2. In their discretion, the
Proxies are authorized to
vote upon such other business
as may properly come before
the meeting or any
adjournments thereof.
RECORD DATE SHARES:
REGISTRATION
Please be sure to sign and date
this Proxy.
Mark box at right if
___________________ Date _____________ comments or address
Stockholder sign here change have been [ ]
noted on the reverse
side of this card.
___________________ Date _____________
Co-owner sign here
- -----------------------------------------------------------------
DETACH CARD
STATE STREET BOSTON CORPORATION
DEAR STOCKHOLDER:
You are cordially invited to attend the 1996 Annual Meeting of
Stockholders of State Street Boston Corporation. The meeting
will be held in the Enterprise Room at 225 Franklin Street,
Boston, Massachusetts on Wednesday, April 17, 1996, at 10:00 a.m.
Your Board of Directors and management look forward to greeting
those stockholders able to attend.
The notice of meeting and proxy statement which follow describe
the business to be conducted at the meeting. You will be asked
to elect six directors. THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS THAT YOU VOTE FOR THE DIRECTORS NOMINATED.
Your vote is very important. Whether or not you plan to attend
the meeting, please carefully review the enclosed proxy
statement. Then complete, sign, date and mail promptly the
accompanying proxy in the enclosed return envelope. To be sure
that your vote will be received in time, please return the proxy
at your earliest convenience.
We look forward to seeing you at the Annual Meeting so that we
can update you on our progress. Your continuing interest is very
much appreciated.
Sincerely,
Marshall N. Carter
Chairman and Chief Executive Officer
