SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
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STATE STREET RESEARCH MASTER INVESTMENT TRUST
(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] No fee required.
[ ] 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:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
<PAGE>
STATE STREET RESEARCH INVESTMENT TRUST
ONE FINANCIAL CENTER
BOSTON, MASSACHUSETTS 02111
Dear Shareholder:
I would like to tell you about a special meeting of State Street
Research Investment Trust shareholders, which is described in the enclosed
materials. A number of important proposals will be voted on, and I urge you to
vote your enclosed proxy.
One proposal would increase the fee paid to State Street Research for
managing the Trust's portfolio. After a thorough review of the Trust's expense
structure and the rationale for the increase, your Trustees have concluded the
increase is fair to both the manager and shareholders.
The increase is necessary for several reasons. The manager is facing
increased costs, stemming from the growing complexity of the research and
investment management process. Today, we use computer systems and analysis
techniques which did not exist a generation ago. In addition, the manager needs
to attract and retain top-level research and investment management talent in
order to remain competitive.
Even after the proposed management fee increase -- the first one in the
Trust's 73-year history -- the fee will still remain below average for the
Trust's peer group.
Your Trustees have studied this proposal in detail over the past year
with a very real concern for the shareholder's interest. They have examined a
number of alternatives and extensively analyzed the diverse issues and relevant
data. At the end of this difficult decision-making process, the Trustees
concluded that the proposed fee increase will serve the long-term interests of
shareholders, and therefore recommend it for approval.
<PAGE>
The proxy documents explain the entire proposal in detail, and I
encourage you to review them. As always, we are available to answer your
questions at 1-800-562-0032. By mailing in your vote today, you can help the
Trust avoid the cost of follow-up mailings.
We appreciate you as a shareholder of State Street Research Investment
Trust.
Sincerely,
Ralph F. Verni
Chairman of the Board,
President and Chief Executive Officer
<PAGE>
STATE STREET RESEARCH INVESTMENT TRUST
a series of
State Street Research Master Investment Trust
One Financial Center
Boston, Massachusetts 02111
---------------------------------
NOTICE OF SPECIAL MEETING
OF SHAREHOLDERS
To Be Held On ______________, 1997
---------------------------------
A Special Meeting of Shareholders (the "Meeting") of State Street
Research Investment Trust (the "Trust"), a series of State Street Research
Master Investment Trust, a Massachusetts business trust (the "Master Trust"),
will be held at the offices of the Master Trust, One Financial Center, 31st
Floor, Boston, Massachusetts 02111, at 4:00 P.M. on ___________________, 1997
for the following purposes:
1. To elect Trustees of the Master Trust.
2. To amend the Trust's investment advisory contract to increase the
management fee and to make related changes.
3. To amend the Trust's fundamental policy relating to securities lending.
4. To amend the Trust's fundamental policies regarding diversification of
investments.
5. To ratify the selection of Coopers & Lybrand L.L.P. as the Trust's
independent accountants.
6. To consider and act upon any matter incidental to the foregoing and to
transact such other business as may properly come before the Meeting
and any adjournments thereof.
The matters referred to above may be acted upon at said Meeting and any
adjournments thereof.
<PAGE>
The close of business on __________, 1997 has been fixed as the record
date for the determination of shareholders entitled to notice of, and to vote
at, the Meeting and any adjournments thereof.
IT IS VERY IMPORTANT THAT YOUR VOTING INSTRUCTIONS BE RECEIVED NO LATER
THAN _________, 1997. Instructions for shares held of record in the name of a
nominee, such as a broker-dealer or trustee of an employee benefit plan, may be
subject to earlier cut-off dates established by such intermediaries to
facilitate a timely response.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE SIZE OF YOUR HOLDINGS IN THE
MASTER TRUST. WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE
COMPLETE AND SIGN THE ENCLOSED PROXY FORM AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE. IF YOU DESIRE TO VOTE IN PERSON AT THE MEETING, YOU MAY REVOKE YOUR
PROXY.
By Order of the Trustees
FRANCIS J. McNAMARA, III
Secretary
___________________, 1997
Date of Notice
<PAGE>
QUESTIONS AND ANSWERS
Q: Why is this material being sent to shareholders and what are they supposed
to do with it?
A: This material is being sent to shareholders of the Trust to ask them to
vote on some important proposals, including some proposed changes which
would (a) increase the fee paid to State Street Research for managing the
Trust's portfolio and (b) give the Trust more flexibility in making
investments and the Trustees more flexibility to make decisions for the
shareholders. You should read the material, mark your vote on the enclosed
Proxy Form and send it back. Call 1-800-562-0032 for help with your
questions. No abrupt changes in current investment practices are planned.
The investment policy proposals provide flexibility that might be useful
in the future. By asking for your approval now, future delays and expenses
can be avoided. The Trustees recommend that you vote FOR all the proposals.
Q: What is Proposal 1 relating to the election of Trustees?
A: All of the Trustees, including those who have not been previously
elected by shareholders, plus two new nominees, are being presented
for election. Background information on all of the candidates is
included in the material.
Q: What is Proposal 2 relating to the increase in management fee?
A: An increase in the management fee would help the Investment Manager meet
the increased costs of the investment management process and attract and
retain top-level research and management talent.
<PAGE>
Q: What is Proposal 3 on securities lending?
A: Opportunities can arise for the Trust to lend some of the securities it
owns to other institutions in exchange for a fee. The borrower returns the
securities later, and gives the Trust collateral in the meantime. The
proposed change would make clear that securities lending is permitted.
Q: What is Proposal 4 on diversification of investments?
A: Under current policy, the Trust is limited as to how much it can invest
in one company. The change would give the Trust some leeway to invest
relatively more in individual companies.
Q: Under Proposal 5, why is the selection of the independent accountants
being ratified?
A: The Trust used to be organized as a corporation. When the selection of
the accountants was last ratified, the accountants served the
predecessor corporation. Now the selection of the accountants as
accountants to the successor Trust needs to be similarly ratified.
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Important additional information about the proposals is set forth in the
accompanying Proxy Statement. Please read it carefully.
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<PAGE>
STATE STREET RESEARCH INVESTMENT TRUST
a series of
State Street Research Master Investment Trust
One Financial Center
Boston, Massachusetts 02111
---------------------------------
PROXY STATEMENT
---------------------------------
All of the classes of shares (Class A, Class B, Class C and Class D) of the
Trust are entitled to vote on all of the proposals.
This Proxy Statement is furnished to the shareholders of State Street
Research Investment Trust, a series of State Street Research Master Investment
Trust, in connection with the solicitation of proxies by and on behalf of the
Master Trust's Board of Trustees to be used at a Special Meeting of Shareholders
(the "Meeting") of the Master Trust, to be held at the offices of the Master
Trust, One Financial Center, 31st Floor, Boston, Massachusetts 02111, at 4:00
P.M., on __________, 1997, and at any adjournments thereof. Any shareholder who
has given a Proxy has the right to revoke it at any time prior to its exercise
by attending the Meeting and voting his or her shares in person or by submitting
a written notice of revocation or a later-dated Proxy to the Master Trust at the
above address prior to the date of the Meeting.
Shareholders of record of the Master Trust at the close of business on
_________, 1997 are entitled to notice of, and to vote at, the Meeting or any
adjournments thereof. This Proxy Statement, Proxy and accompanying Notice of
Special Meeting of Shareholders were first sent
<PAGE>
or given to shareholders on or about _________, 1997. The Master Trust is
presently comprised of one portfolio series: State Street Research Investment
Trust.
The chart below reflects the total number of shares issued and outstanding
of the Trust as of the record date. Each share is entitled to one vote with a
proportionate vote for each fractional share.
Class A Class B Class C Class D Total
------- ------- ------- ------- -----
If the enclosed Proxy is properly executed and returned in time to be voted
at the Meeting, the shares represented thereby will be voted in accordance with
the instructions on the Proxy. The Proxy grants discretion to the persons named
therein, as proxies, to take such further action as they may determine
appropriate in connection with any other matter which may properly come before
the Meeting or any adjournments thereof. The Board of Trustees does not
currently know of any matter to be considered at the Meeting other than the
matters set forth in the Notice of Special Meeting of Shareholders.
Except as otherwise provided by the Investment Company Act of 1940, as
amended (the "1940 Act"), 30% of the shares entitled to vote constitutes a
quorum for the transaction of business at the Meeting. However, under the 1940
Act, 50% of the outstanding voting securities of the Trust must be present to
act on proposals 2, 3 and 4. In the event a quorum is not present at the
Meeting, or in the event a quorum is present at the Meeting but sufficient votes
to approve any of the proposals are not received, the persons named as proxies
may propose one or more adjournments of such Meeting without further notice to
permit further solicitation of Proxies, provided such persons determine that an
adjournment and
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<PAGE>
additional solicitation are reasonable and in the interest of shareholders,
after consideration of all relevant factors, including the nature of the
relevant proposals, the percentage of votes then cast, the percentage of
negative votes then cast, the nature of the proposed solicitation activities and
the nature of the reasons for such further solicitation. A shareholder vote may
be taken on one or more of the proposals in this Proxy Statement prior to such
adjournment if sufficient votes have been received and such vote is otherwise
appropriate. Any such adjournment will require the affirmative vote of a
majority of those shares present at the Meeting in person or by proxy.
For purposes of determining the presence of a quorum for transacting
business at the Meeting and for determining whether sufficient votes have been
received for approval of any proposal to be acted upon at the Meeting,
abstentions and broker "non-votes" (that is, proxies from brokers or nominees
indicating that such persons have not received instructions from the beneficial
owner or other persons entitled to vote shares on a particular matter with
respect to which the brokers or nominees do not have, or choose not to exercise,
discretionary power), may in the discretion of the Master Trust be treated as
present at the Meeting and entitled to vote on the matter, but which have not
been voted. For this reason, abstentions and broker non-votes could assist the
Master Trust in obtaining a quorum; both have the practical effect of a "no"
vote for purposes of obtaining the requisite vote for approval of proposals 2
through 5 to be acted upon at the Meeting, but will have no effect on the
determination of plurality votes in connection with proposal 1 regarding the
election of Trustees.
In addition to solicitation of Proxies by mail, officers of the Master
Trust and officers and employees of State Street Research & Management Company
(the "Investment Manager"),
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<PAGE>
affiliates of the Investment Manager, or other representatives of the Master
Trust, including independent, proxy solicitation companies, may also solicit
Proxies by telephone or in person. A proxy solicitation firm may help with the
usual mailing and tabulation effort and may also assist in any special, personal
solicitation of Proxies. The costs of retaining a firm to perform the customary
as well as special solicitation services are estimated to be $50,000, which
would be borne by the Trust, in addition to out-of-pocket expenditures for
postage, printing and related items. The Master Trust will reimburse brokerage
firms and others for their expenses in forwarding solicitation material to the
beneficial owners of shares.
Upon request by a shareholder of the Trust to State Street Research
Shareholder Services, One Financial Center, Boston, Massachusetts 02111 at
1-800-562-0032, the annual report and most recent semiannual report succeeding
the annual report, if any, for the Trust will be furnished without charge to the
requesting shareholder.
The Trust's distributor (the "Distributor") is State Street Research
Investment Services, Inc., One Financial Center, Boston, Massachusetts 02111.
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<PAGE>
PROPOSAL 1
ELECTION OF TRUSTEES
The shareholders of the Trust are being asked to
elect the persons named below to serve as Trustees of the Master Trust.
All shares represented by valid proxies will be voted in favor of the election
of the persons named, unless authority to vote therefor is withheld. The
individuals named have agreed to serve as Trustees if elected. If for any reason
any one of them should not be available for election as contemplated, the
proxies hereby solicited may, unless otherwise limited, be voted to elect such
substitute individuals, if any, as may be designated by the Board of Trustees,
subject to the applicable provisions of the Investment Company Act of 1940 (the
"1940 Act"). This election will help assure continued compliance with 1940 Act
provisions regarding the election of Trustees. Background information on all of
the Trustees has been provided.
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<PAGE>
<TABLE>
<CAPTION>
Shares of Trust
Deemed Beneficially Owned on
, 1997
-----------------------------------
Number of Shares / Class / % of Class
-----------------------------------------
Year First
Became Trustee
Position with [or Director of
Name Master Trust Predecessor (1)] Class A Class C
---- ------------- ----------------- ------- -------
<S> <C> <C> <C> <C>
Steve A. Garban (2) None --
Malcolm T. Hopkins (2) None --
Edward M. Lamont Trustee 1987
Robert A. Lawrence Trustee 1986
Dean O. Morton Trustee 1986
Thomas L. Phillips Trustee 1973
Toby Rosenblatt Trustee 1990
Michael S. Scott Morton Trustee 1987
*Ralph F. Verni Trustee, 1992
Chairman
of the Board,
Chief Executive
Officer and
President
Jeptha H. Wade Trustee 1992
</TABLE>
Trustees and Officers as a Group
- ---------------------
* Individual who is deemed to be an "interested person" of the Trust under
the 1940 Act because of his affiliation with the Trust's investment
manager.
(1) In 1989, the Master Trust became the successor to State Street Investment
Corporation and all the then Directors of the Predecessor State Street
Investment Corporation became Trustees of the Master Trust.
(2) Mr. Garban and Mr. Hopkins are being nominated for the first time to serve
as Trustees of the Master Trust.
(3) Less than 1%.
6
<PAGE>
Steve A. Garban is retired and was formerly Senior Vice President, Finance
and Operations and Treasurer, The Pennsylvania State University. He is 59. Mr.
Garban's other principal business affiliations include Director of Metropolitan
Series Fund, Inc. Mr. Garban is also a Trustee or Director of eight other
investment companies for which the Investment Manager serves as investment
adviser.
Malcolm T. Hopkins is engaged primarily in private investments.
Previously, he was Vice Chairman of the Board and Chief Financial Officer, St.
Regis Corp. (forest and paper products). He is 69. Mr. Hopkins's other
principal business affiliations include Director of Metropolitan Series Fund,
Inc., The Columbia Gas System, Inc., MAPCO, Inc., EMCOR GROUP, INC., U.S. Home
Corporation, Phar-Mor, Inc. and Kinder Care Learning Centers, Inc. Mr. Hopkins
is also a Trustee or Director of eight other investment companies for which the
Investment Manager serves as investment adviser.
Edward M. Lamont is engaged principally in private investments and civic
affairs, and is an author of business history. Previously, he was with Morgan
Guaranty Trust Company of New York. He is 70. Mr. Lamont's other principal
business affiliations include Director of Sun Life Insurance and Annuity
Company of New York. Mr. Lamont is also a Trustee or Director of ten other
investment companies for which the Investment Manager serves as investment
adviser.
Robert A. Lawrence's principal occupation is Associate of Saltonstall &
Co., a private investment firm. During the past five years he has also served as
Partner of that firm. He is 70. Mr. Lawrence's other principal business
affiliations include Director of Metropolitan
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Series Fund, Inc., New York Times Company and Fifty Associates (a real estate
investment trust). Mr. Lawrence is also a Trustee or Director of ten other
investment companies for which the Investment Manager serves as investment
adviser.
Dean O. Morton is retired and was formerly Executive Vice President, Chief
Operating Officer and Director, Hewlett-Packard Company. He is 65. Mr. Morton's
other principal business affiliations include Director of Metropolitan Series
Fund, Inc., Alza Corp. (a therapeutic systems developer), Raychem Corp. (a
materials science company), The Clorox Company (a consumer products company),
Tencor Instruments (a scientific instruments company) and Centigram
Communications Corporation (a communication equipment company). Mr. Morton is
also a Trustee or Director of ten other investment companies for which the
Investment Manager serves as investment adviser.
Thomas L. Phillips is retired and was formerly Chairman of the Board and
Chief Executive Officer of Raytheon Company, of which he remains a Director. He
is 73. Mr. Phillips's other principal business affiliations include Director
of John Hancock Mutual Life Insurance Company, Knight-Ridder, Inc. and Digital
Equipment Corporation. Mr. Phillips is also a Trustee of nine other investment
companies for which the Investment Manager serves as investment adviser.
Toby Rosenblatt's principal occupations during the past five years have
been President of The Glen Ellen Company, a private investment company, and Vice
President of Founders Investments Ltd. He is 58. Mr. Rosenblatt's other
principal business affiliations include Director of Biosource Technologies,
Inc., Advanced Polymer Systems, Inc. and Pherin
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<PAGE>
Corporation (proprietary compounds for human health). Mr. Rosenblatt is also a
Trustee or Director of ten other investment companies for which the Investment
Manager serves as investment adviser.
Michael S. Scott Morton's principal occupation during the past five years
has been Jay W. Forrester Professor of Management at Sloan School of Management,
Massachusetts Institute of Technology. He is 59. Dr. Scott Morton's other
principal business affiliations include Director of Metropolitan Series Fund,
Inc. and Sequent Computer Systems, Inc. (a computer manufacturer). Dr. Scott
Morton is also a Trustee or Director of ten other investment companies for
which the Investment Manager serves as investment adviser.
Ralph F. Verni's principal occupation is Chairman of the Board, President,
Chief Executive Officer and Director of the Investment Manager. He is 54. During
the past five years he also served as President and Chief Executive Officer of
New England Investment Companies and as Chief Investment Officer and Director of
New England Mutual Life Insurance Company. Mr. Verni's other principal business
affiliations include Chairman of the Board and Director of State Street Research
Investment Services, Inc. and, until February 1996, prior positions as President
and Chief Executive Officer; Chairman of the Board, President, Chief Executive
Officer and Director of GFM International Investors Limited; Director of CML
Group, Inc. (consumer specialty company); member of the Advisory Board of
Commonwealth Capital Ventures, L.P.; Director of SSR Realty Advisors, Inc.; and
President, Chief Executive Officer and Director of SSRM Holdings, Inc. Mr. Verni
is also a Trustee or Director of ten other investment companies for which the
Investment Manager serves as investment adviser.
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<PAGE>
Jeptha H. Wade is retired and was formerly Of Counsel for the law firm
Choate, Hall & Stewart. He was a partner of that firm from 1960 to 1987. He
is 72. Mr. Wade's other principal business affiliations include Director of
Cleveland-Cliffs, Inc. (a natural resource company). Mr. Wade is also a Trustee
of nine other investment companies for which the Investment Manager serves as
investment adviser.
A candidate elected as a Trustee will serve as such until any successor is
elected and qualified. A Trustee serves until he retires, resigns or is removed
as provided in the Declaration of Trust, as amended ("Master Trust Agreement")
of the Master Trust. The Master Trust is not required to hold regularly
scheduled annual meetings for the election of Trustees. (See "No Annual Meetings
of Shareholders" below.)
The following persons are principal officers, but not Trustees, of the
Master Trust:
Peter C. Bennett has served as Vice President of the Master Trust since
1993. He is 58. His principal occupation is Executive Vice President and
Director of the Investment Manager. During the past five years, he has also
served as Senior Vice President of the Investment Manager. Mr. Bennett's other
principal business affiliations include Director and Chairman of of the
Compensation Committee of Boston Private Bank & Trust Company; Executive Vice
President of GFM International Investors Limited; and Director of State Street
Research Investment Services, Inc.
Gerard P. Maus has served as Treasurer of the Master Trust since 1993. He
is 46. His principal occupation is Executive Vice President, Treasurer, Chief
Financial Officer and Director of the Investment Manager. During the past five
years he has also served as Executive
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<PAGE>
Vice President and Chief Financial Officer of New England Investment Companies
and as Senior Vice President and Vice President of New England Mutual Life
Insurance Company. Mr. Maus's other principal business affiliations include
Executive Vice President, Treasurer, Chief Financial Officer and Director of
State Street Research Investment Services, Inc.; Treasurer and Chief Financial
Officer of SSRM Holdings, Inc.; Executive Vice President, Chief Financial
Officer and Chief Administrative Officer of GFM International Investors Limited;
and Director of SSR Realty Advisors, Inc.
Francis J. McNamara, III has served as Secretary and General Counsel of the
Master Trust since 1995. He is 41. His principal occupation is Executive Vice
President, General Counsel and Secretary of the Investment Manager. During the
past five years he has also served as Senior Vice President of the Investment
Manager and as Senior Vice President and General Counsel of The Boston Company
Inc., Boston Safe Deposit and Trust Company and The Boston Company Advisors,
Inc. Mr. McNamara's other principal business affiliations include Senior Vice
President, General Counsel and Clerk of State Street Research Investment
Services, Inc.; Secretary and General Counsel of SSRM Holdings, Inc.; and
Executive Vice President, General Counsel and Director of GFM International
Investors Limited.
Dudley F. Wade has served as Vice President of the Master Trust since 1972.
He is 78. His principal occupation during the past five years has been Senior
Vice President of the Investment Manager.
James M. Weiss has served as Vice President of the Master Trust since 1996.
He is 50. His principal occupation is Senior Vice President of the Investment
Manager. During the past
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five years he has also served as President and Chief Investment Officer of IDS
Equity Advisors and as Senior Vice President of Stein, Roe & Farnham.
John T. Wilson has served as Vice President of the Master Trust since 1996.
He is 33. His principal occupation is Vice President of the Investment Manager.
During the past five years he has also served as an analyst and portfolio
manager at Phoenix Home Life Mutual Insurance Company and, from 1995 to 1996 as
a Vice President of Phoenix Investment Counsel, Inc.
These officers are deemed to be "interested persons" of the Trust under the
1940 Act inasmuch as they are affiliated with the Investment Manager as noted.
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<PAGE>
Board Meetings and Committees
During the fiscal year ended December 31, 1996, the Board of Trustees
held a total of four meetings.
The Audit Committee of the Board of Trustees held two meetings during the
fiscal year ended December 31, 1996. The present members of the Audit Committee
are Messrs. Morton, Scott Morton and Wade. The duties of this Committee include
meeting with representatives of the Master Trust's independent public
accountants both to review the range of the accountants' activities and to
discuss the Master Trust's system of internal controls. Thereafter, this
Committee reports to the Board on the Committee's findings and recommendations
concerning internal accounting matters as well as its recommendation for
retention or dismissal of the auditing firm.
The Nominating Committee of the Board of Trustees met twice in 1995 and
once thus far in 1997. The present members of the Nominating Committee are
Messrs. Morton, Phillips, Scott Morton and Wade. The duties of this Committee
include consideration of recommendations on nominations for Trustees, review of
the composition of the Board, and recommendations respecting attendance,
frequency of meetings and similar matters. The Nominating Committee will
consider nominees recommended by shareholders; shareholders may submit
recommendations to the attention of the Secretary, State Street Research Master
Trust, One Financial Center, 30th Floor, Boston, Massachusetts 02111.
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<PAGE>
Remuneration of Principal Officers and Trustees
The executive officers of the Master Trust and those of its Trustees who
are officers of the Investment Manager receive no direct remuneration from the
Master Trust. Such executive officers and Trustees receive remuneration from the
Investment Manager. Trustees who are not officers of the Investment Manager are
compensated for attendance at each meeting of the Board of Trustees and
committees of the Board and reimbursed for reasonable expenses incurred in
connection therewith, and are paid an annual retainer.
The Trustees have been compensated as follows:
Total Compensation
from Master Trust
Aggregate Compensation and Complex Paid
Name of Trustee from Master Trust (1) to Trustees (2)
--------------- ---------------------- ----------------
Edward M. Lamont $4,000 $ 59,375
Robert A. Lawrence $4,000 $ 92,125
Dean O. Morton $4,200 $ 96,125
Thomas L. Phillips $4,000 $ 59,375
Toby Rosenblatt $4,000 $ 59,375
Michael S. Scott Morton $4,400 $100,325
*Ralph F. Verni $ 0 $ 0
Jeptha H. Wade $4,200 $ 63,375
* Individual who is deemed to be an "interested person" of the Trust under
the 1940 Act because of his affiliation with the Trust's investment
manager.
(1) For the Trust's fiscal year ended December 31, 1996.
(2) Includes compensation on behalf of all series of 12 investment companies
for which the Investment Manager served directly or indirectly as
investment adviser, or for which State Street Research Investment Services,
Inc. served as distributor. "Total Compensation from Master Trust and
Complex Paid to Trustees" is for the 12 months ended December 31, 1996.
The Master Trust does not provide any pension or retirement benefits for
the Trustees.
Required Vote
A plurality of the votes properly cast in person or by proxy at the
Meeting, provided a quorum is represented, is required for the election of a
Trustee.
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<PAGE>
PROPOSAL 2
TO AMEND THE INVESTMENT ADVISORY CONTRACT TO
INCREASE THE MANAGEMENT FEE AND MAKE RELATED CHANGES
This proposal is to amend the Investment Advisory Contract ("Advisory
Contract") to increase the management fee which the Trust pays to the Investment
Manager and to make related changes in the Advisory Contract. Under the Advisory
Contract, the management fee is computed as a percentage of the average net
assets of the Trust on an annualized basis. The following chart shows the
current level of the management fee and the proposed level.
C u r r e n t P r o p o s e d
--------------------------------- --------------------------------------
First Succeeding
Year Years
---- -----
Assets Fee % Assets Fee % Fee %
------ ----- ------ ----- -----
Up to $200,000,000 0.50% Up to $500,000,000 0.41% 0.55%
Next $100,000,000 0.375% Next $500,000,000 0.41% 0.50%
Next $200,000,000 0.30% Over $1,000,000,000 0.41% 0.45%
Over $500,000,000 0.25%
Effective fee rate based Effective fee rate
upon 1996 average net based upon 1996
assets 0.31% average net assets 0.41% 0.51%
As reflected in the above chart, the proposed increase in the management fee
would be phased in over two years. In the first phase, a partial increased fee
would be applicable during the first year after shareholder approval; and in the
second phase, the final proposed fee would be applicable to succeeding years.
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<PAGE>
Rationale and Background for Proposal
In reviewing the proposed management fee increase, the Trustees
considered the Trust's anticipated short- and long-term needs for investment
personnel, the growth in technological and administrative requirements, and the
management fees of comparable funds, as well as other factors as described
below. The following conclusions were reached:
[bullet] In today's highly complex investment world, the Investment
Manager and the Trustees both believe an increased fee will help
the Investment Manager remain competitive in attracting and
retaining the investment personnel necessary to manage the
portfolio.
[bullet] The Trustees considered today's ever-expanding securities
markets, which operate continuously around the globe. Additional
resources will help the Investment Manager maintain
state-of-the-art computer systems, access information, and analyze
strategies using the most sophisticated means. Additional
resources are also needed to administer the Trust by virtue of its
size and the growing complexities of portfolio transactions
domestically and internationally.
[bullet] The Trustees considered the management fees paid by comparable
funds available to investors. The Trust's current fee rate is
substantially below average for comparable funds in the growth &
income category and the Trustees recommend that it be raised
closer to the average. The Trustees also believe the proposed fee
is reasonable in relation to the overall advisory fee structure
for other mutual funds in all categories managed by the Investment
Manager.
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<PAGE>
The Trustees reached these conclusions after discussing and
deliberating the issues in a number of meetings for more than a year. The
Trustees believe that they have carefully and thoroughly examined the questions
and alternatives. The Trustees met with the Investment Manager several times,
and the independent Trustees also met among themselves at various times during
their deliberations. The independent Trustees also obtained the advice of their
own legal counsel. Throughout the process, they asked the Investment Manager
in-depth questions about current operations and the profit margins and
profitability of managing the Trust and other funds in the State Street Research
family of funds. The Investment Manager provided insights on the competition it
faces in attracting top personnel. The Trustees reviewed the Investment
Manager's recent additions of portfolio managers, analysts and others involved
in research and quantitative analysis. The Investment Manager made presentations
on the investment strategies, techniques and theories it currently uses or is
exploring for use in managing the portfolio of the Trust. The Trustees
considered the Investment Manager's personnel plans and investment initiatives,
not only as they relate to domestic investments, but also as they relate to
international investing. The Investment Manager described its current
technological capabilities and the progress being made with the development of
its next generation of computer systems.
The Trustees spent substantial time reviewing the management fee levels
for other funds in the Trust's peer group. The Trustees reviewed the data on
other management fees based on a broad range of parameters, such as the relative
asset levels and age of similar funds, asset breakpoint levels for a declining
fee rate structure, "what-if" scenarios for
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changing asset levels, flat fees versus breakpoints and the effects of
inflation. The proposed fee will remain below average for the Trust's peer
group.
The Trustees reviewed the 73-year performance history of the Trust and
the fact that the Investment Manager and its founders have been the sole
investment adviser to the Trust during the entire time. The Trustees gave
substantial weight to that history and the historical importance of continuity
through the many market cycles since the Trust's inception in 1924.
Until 1990, when the Trust commenced a continuous public offering of
its shares to the general public, it was not subject to the effects of large
cash flows from the purchase and redemption of shares. The Investment Manager
and the Trustees believe that managing a portfolio with cash flows from a
greater number of shareholders requires more resources than prior to 1990.
The Investment Manager has agreed that if the proposed increase in the
management fee is approved, it will voluntarily assume the nondistribution
expenses of the Trust to the extent they exceed 0.75% of the Trust's net assets
on an annualized basis. The voluntary limit applies to all expenses, including
the new management fee, but does not apply to the expenses of the Trust under
its Rule 12b-1 plan. As more fully described below, the Rule 12b-1 fees are
essentially expenses that are paid by the Trust but are borne indirectly by the
shareholders who elect to buy a particular class of shares. In the event the
Investment Manager determines to terminate or modify its voluntary subsidy of
expenses, the Trustees would, in the course of their annual consideration of the
renewal of the Advisory Contract, take such action as they deem appropriate.
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<PAGE>
The new voluntary expense limit of 0.75% would not replace the express
expense limit of 1% that is in the Advisory Contract. However, the Investment
Manager and the Trustees are proposing that the language of this express 1%
limit be changed to accommodate the development of Rule 12b-1 fees and the sale
of multiple class shares which did not exist at the time the 1% limit was
initially included in the Advisory Contract. In 1993, the Trust made multiple
classes of shares (Classes A, B, C and D) available for the first time. Since
that time, investors have been able to select the class with the distribution
expense structure most appropriate for their particular circumstances, including
the desired combination of front-end sales loads, deferred loads and Rule 12b-1
fees, (ranging from 0.25% to 1%). The Rule 12b-1 fees received by the Trust's
distributor are used primarily to pay the brokers who sold the shares to the
shareholder and who service the account. Class C shares, which includes all
shares outstanding prior to the 1993 conversion to multiple classes, are not
subject to any Rule 12b-1 fees. While the Rule 12b-1 fees are only charged
against the relevant class of shares and therefore incurred only by the
shareholders who chose to invest in that class, all the Rule 12b-1 fees are
considered expenses of the Trust and are therefore subject to the current 1%
expense limit. Accordingly, the language in the Advisory Contract will be
revised to keep Rule 12b-1 fees outside of the group of expenses to which the 1%
limit applies. If the proposal is adopted, the Trust will have the benefit of
the voluntary 0.75% expense limit described above as well as the express 1.00%
expense limit, but neither limit would include Rule 12b-1 fees. Rule 12b-1 fees
are limited in cumulative amount over time by the National Association of
Securities Dealers' Rules of Fair Practice.
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The aggregate amount of the management fee during the Trust's most
recent fiscal year ended December 31, 1996 was $3.866 million. Had the proposed
management fee for the first year been in effect during 1996, the management fee
would have been $5.053 million; the difference between the actual fee and the
fee had the first year rate been in effect in 1996 represents 31% of the actual
fee for 1996. Had the proposed fee schedule for succeeding years been in effect
during 1996, the management fee would have been $6.296 million; the difference
between the actual fee and the fee had the schedule for succeeding years been in
effect in 1996 represents 63% of the actual fee for 1996.
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The charts below show the current expenses of the Trust and the pro
forma expenses of the Trust assuming approval of this proposal (based on results
for 1996 and on the level of assets at the end of that year). The management fee
is computed as a percentage of the average net assets of the Trust on an
annualized basis. Class C shares represent the largest outstanding class,
followed by Class B, A and D as indicated:
Class C Shares (approximately 57.8% of shares outstanding)
Annual Trust Operating Expenses
(as a percentage of average net assets)
---------------------------------------
Actual Pro Forma Pro Forma
1996 First Year Succeeding Years
------ ---------- ----------------
Management Fees...................... 0.31% 0.41% 0.51%
Other Expenses....................... 0.19% 0.19% 0.19%
----- ----- -----
Trust Operating Expenses
Before 12b-1 Fees............ 0.50% 0.60% 0.70%
----- ----- -----
12b-1 Fees........................... None None None
Total Trust Operating Expenses.. 0.50% 0.60% 0.70%
===== ===== =====
Example(3)
You would pay the following expenses on a $1,000 investment (which is not
subject to any initial or contingent sales charge) and assuming (1) 5%
annual return and (2) redemption of the entire investment at the end of
each time period:
1 Year.......................... $ 5 $ 6 $ 7
3 Years......................... $16 $19 $22
5 Years......................... $28 $33 $39
10 Years........................ $63 $75 $87
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Class B Shares (approximately 23.6% of shares outstanding)
Annual Trust Operating Expenses
(as a percentage of average net assets)
---------------------------------------
Actual Pro Forma Pro Forma
1996 First Year Succeeding Years
------ ---------- ----------------
Management Fees...................... 0.31% 0.41% 0.51%
Other Expenses....................... 0.19% 0.19% 0.19%
----- ----- -----
Trust Operating Expenses
Before 12b-1 Fees............ 0.50% 0.60% 0.70%
----- ----- -----
12b-1 Fees........................... 1.00% 1.00% 1.00%
----- ----- -----
Total Trust Operating Expenses.. 1.50% 1.60% 1.70%
===== ===== =====
Example(3)
You would pay the following expenses on a $1,000 investment including the
maximum applicable initial or contingent sales charge and assuming (1) 5%
annual return and (2) redemption of the entire investment at the end of
each time period:
1 Year.......................... $ 65 $ 66 $ 67
3 Years......................... $ 77 $ 80 $ 84
5 Years......................... $102 $107 $112
10 Years........................ $159 $170 $181
You would pay the following expenses on the same investment, assuming no
redemption:
1 Year.......................... $ 15 $ 16 $ 17
3 Years......................... $ 47 $ 50 $ 54
5 Years......................... $ 82 $ 87 $ 92
10 Years........................ $159 $170 $181
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Class A Shares (approximately 16.6% of shares outstanding)
Annual Trust Operating Expenses
(as a percentage of average net assets)
---------------------------------------
Actual Pro Forma Pro Forma
1996 First Year Succeeding Years
----- ---------- ----------------
Management Fees...................... 0.31% 0.41% 0.51%
Other Expenses....................... 0.19% 0.19% 0.19%
----- ----- -----
Trust Operating Expenses
Before 12b-1 Fees............ 0.50% 0.60% 0.70%
----- ----- -----
12b-1 Fees........................... 0.25% 0.25% 0.25%
----- ----- -----
Total Trust Operating Expenses.. 0.75% 0.85% 0.95%
===== ===== =====
Example(3)
You would pay the following expenses on a $1,000 investment including the
maximum applicable initial or contingent sales charge and assuming (1) 5%
annual return and (2) redemption of the entire investment at the end of
each time period:
1 Year.......................... $ 52 $ 53 $ 54
3 Years......................... $ 68 $ 71 $ 74
5 Years......................... $ 85 $ 90 $ 95
10 Years........................ $134 $145 $156
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Class D Shares (approximately 2% of shares outstanding)
Annual Trust Operating Expenses
(as a percentage of average net assets)
---------------------------------------
Actual Pro Forma Pro Forma
1996 First Year Succeeding Years
------ ---------- ----------------
Management Fees...................... 0.31% 0.41% 0.51%
Other Expenses....................... 0.19% 0.19% 0.19%
----- ----- -----
Trust Operating Expenses
Before 12b-1 Fees............ 0.50% 0.60% 0.70%
----- ----- ----
12b-1 Fees........................... 1.00% 1.00% 1.00%
----- ----- -----
Total Trust Operating Expenses.. 1.50% 1.60% 1.70%
===== ===== =====
Example(3)
You would pay the following expenses on a $1,000 investment including the
maximum applicable initial or contingent sales charge and assuming (1) 5%
annual return and (2) redemption of the entire investment at the end of
each time period:
1 Year.......................... $ 25 $ 26 $ 27
3 Years......................... $ 47 $ 50 $ 54
5 Years......................... $ 82 $ 87 $ 92
10 Years........................ $179 $190 $201
You would pay the following expenses on the same investment, assuming no
redemption:
1 Year.......................... $ 15 $ 16 $ 17
3 Years......................... $ 47 $ 50 $ 54
5 Years......................... $ 82 $ 87 $ 92
10 Years........................ $179 $190 $201
.........
Footnotes for the above charts:
1 Ten-year figures assume conversion of Class B shares to Class A shares at
the end of eight years. The maximum 5% contingent deferred sales charge on
Class B shares applies to redemptions during the first year after
purchase; the charge declines thereafter and no contingent deferred sales
charge is imposed after the fifth year.
2 Class D shares are subject to a 1% contingent deferred sales charge on any
portion of the purchase redeemed within one year of the sale.
3 The examples should not be considered a representation of past or future
return or expenses. Actual return or expenses may be greater or less than
shown.
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Additional Information on the Investment Manager
Comparative information on the Trust and other mutual funds
with similar investment objectives managed by the Investment Manager is set
forth below:
Net Assets
as of Annualized Compensation Rate
Fund December 31, 1996 as % of Net Assets
---- ----------------- ------------------
State Street Research $1,345.9 million 0.50% on first $200 million of assets
Investment Trust 0.375% on next $100 million of assets
0.30% on next $200 million of assets
0.25% on excess over $500 million
of assets
State Street Research $136.4 million 0.65% of assets
Equity Investment
Fund(1)
State Street Research $276.7 million 0.50% of assets
Exchange Fund(2)
State Street Research $1,597.8 million 0.50% on first $5 million of assets
Growth Portfolio(3) 0.375% on next $5 million of assets
(a series of 0.25% on next $190 million of assets
Metropolitan Series 0.20% on excess over $200 million
Fund, Inc.) of assets
- -------------------
1 Historically, State Street Research Investment Services, Inc., the
Distributor, has assumed a portion of the Fund's expenses because of the Fund's
small size; there is no assurance that the subsidy will continue in the future.
2 This Fund is not currently offered to the general public.
3 The Investment Manager serves as a sub-adviser to this fund. A shareholder
proposal to increase the advisory and sub-advisory fees is pending. The proposed
sub-advisory fee schedule is 0.40% on the first $500 million of assets; 0.35% on
the next $500 million of assets; and 0.30% on the excess over $1,000 million of
assets.
The Investment Manager executes portfolio transactions for the Trust
through a number of broker-dealers. When it appears that a number of firms could
satisfy the required standards as to price and brokerage services in respect of
a particular transaction, consideration may also be given to services other than
execution services which certain of such firms have provided in the past or may
provide in the future. Other services include supplemental investment research,
general economic, political and business information, analytical and statistical
data,
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<PAGE>
computer software and databases, including those used for portfolio analysis and
modeling, and portfolio evaluation services and data regarding the relative
performance of accounts.
Certain nonexecution services provided by broker-dealers may in turn be
obtained by the broker-dealers from third parties who are paid for such services
by the broker-dealers. The Investment Manager has an investment of less than ten
percent of the outstanding equity of one such third party which is engaged in
the development and licensing of trading systems which include portfolio
analysis and modeling and other research and investment decision-making
capabilities. The Investment Manager may allocate brokerage to broker-dealers
who in turn pay this third party for the portion of the third party's trading
system provided to the Investment Manager which is estimated by the Investment
Manager to provide appropriate assistance in the investment decision-making
process. Because of its minority interest in the third party, the Investment
Manager could be said to benefit indirectly from such brokerage allocation.
The Investment Manager regularly reviews and evaluates the services
furnished by broker-dealers. Some research and execution services may benefit
the Investment Manager's clients as a whole, while others may benefit a specific
segment of clients. Not all such services may necessarily be used exclusively
for research and execution services in connection with the accounts which pay
the commissions to the broker-dealer producing the services. Where appropriate,
a portion of the costs of services may be allocated for payment by the
Investment Manager rather than through commissions.
The Investment Manager has no fixed agreements or understandings with
any broker-dealer as to the amount of brokerage business which that firm may
expect to receive for
26
<PAGE>
services supplied to the Investment Manager or otherwise. There may be, however,
understandings with certain firms that in order for such firms to be able to
continuously supply certain services, they need to receive an allocation of a
specified amount of brokerage business. These understandings are honored to the
extent possible in accordance with the policies set forth above.
Under a Plan of Distribution Pursuant to Rule 12b-1, the Trust pays
service and distribution fees to the Distributor which are used for distribution
purposes including payments to pay or reimburse securities dealers and others
for personal services and/or the maintenance on servicing of shareholder
accounts. The amount of fees under such plan was $3,104,683 for the fiscal year
ended December 31, 1996, and all such fees were used for distribution expenses,
primarily for payments to dealers, including MetLife Securities, Inc., an
affiliate of the Investment Manager.
Under a Shareholders' Administrative Services Agreement between the
Master Trust and the Distributor, the Distributor provides shareholders'
administrative services, such as responding to inquiries and instructions from
investors respecting the purchase and redemption of shares of the Trust. The
amount of fees paid by the Trust under such arrangement was $300,333 for the
fiscal year ended December 31, 1996. Under certain arrangements for Metropolitan
to provide subadministration services, Metropolitan may receive a fee for the
maintenance of certain share ownership records for participants in sponsored
arrangements, employee benefit plans, and similar programs or plans, through or
under which the Trust's shares may be purchased. The amount of fees paid by the
Trust under such arrangement was $81,398 for the fiscal year ended December 31,
1996. The arrangements described in this
27
<PAGE>
paragraph will continue whether or not the proposed advisory fee increase is
approved by shareholders.
----------------------------------------------
The current Investment Advisory Contract, dated May 1, 1989, was last
submitted to a vote of shareholders of the Trust on January 18, 1983 in
connection with the acquisition by the Metropolitan Life Insurance Company of
the business and assets of the predecessor of the Investment Manager.
The Board of Trustees unanimously recommends that shareholders vote FOR
approval of this proposal.
The current Investment Advisory Agreement would be amended and
restated to reflect the above changes, as set forth in Exhibit A to this Proxy
Statement.
PROPOSAL 3
TO AMEND THE
TRUST'S FUNDAMENTAL POLICY ON LENDING TO
PERMIT SECURITIES LENDING
It is the Trust's current policy:
"not to make loans to individuals, but it is also the Trust's policy to
purchase, when deemed advisable, portions of issues of bonds, debentures or
other securities issued by persons other than the Trust, which purchases
may or may not be made upon the original issue of the securities."
28
<PAGE>
Securities lending, when practiced as described below, could be an
attractive investment alternative for the Trust from time to time. The Trust
believes that the current policy permits securities lending. However, to clarify
this policy and resolve any ambiguity as to whether, under the above language,
securities lending is permitted, the Trustees propose that the policy be revised
to read as follows. It will be the policy of the Trust:
"not to lend money; however, the Trust may lend portfolio securities and
purchase bonds, debentures, notes, bills and any other debt-related
instruments or interests (and enter into repurchase agreements with respect
thereto)."
In a securities lending arrangement the Trust would lend securities to an
institution which wants to borrow the securities to, for example, have
securities in readily deliverable form to settle a sale where the borrower's own
securities are for some reason unavailable; the borrower may also want to cover
a short sale. As compensation for lending securities, the Trust would retain all
(or a portion) of interest received on the investment of cash collateral
received or receive a fee from the borrower.
If the proposed revised policy is adopted by the shareholders, the Trust
would be able to lend portfolio securities up to a maximum in value of 33-1/3%
of its total assets. Whenever any such loan is made, the Trust will receive
collateral in the form of cash or cash equivalents (e.g., U.S. Government
obligations) equal to at least 100% of the current market value of the loaned
securities plus accrued interest. Collateral received by the Trust will
generally be held in the form tendered, although cash may be invested in
short-term securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities, irrevocable stand-by
29
<PAGE>
letters of credit issued by a bank, or any combination thereof. The investing of
cash collateral received from loaning portfolio securities involves leverage
which magnifies the potential for gain or loss on monies invested and,
therefore, results in an increase in the volatility of the Trust's outstanding
securities. Such loans may be terminated at any time. The Trust will retain most
rights of ownership of the loaned securities including rights to dividends,
interest or other distributions on the loaned securities. Voting rights pass
with the lending, although the Trust may call loans to vote proxies if desired.
Should the borrower of the securities fail financially, there is a risk of delay
in recovery of the securities or loss of rights in the collateral. Loans would
be made only to borrowers which are deemed by the Investment Manager to be of
good financial standing. The Trust has no intention of making loans of portfolio
securities to individuals.
The Trustees believe that the proposed revised policy is in the best
interests of the Trust. The Trustees, including the Trustees who are not
interested persons, recommend a vote FOR approval of this proposal. If the
proposal is not approved by the shareholders, the Trust's present investment
policy will remain in effect.
PROPOSAL 4
TO AMEND THE TRUST'S FUNDAMENTAL POLICIES
REGARDING DIVERSIFICATION OF INVESTMENTS
*The fundamental policy of the Trust regarding diversification of
investments currently reads as follows:
It is the policy of the Trust:
30
<PAGE>
"(1) not to purchase for its portfolio a security of any one issuer (other
than the United States or its instrumentalities) if such purchase at
the time would cause more than 5% of the total assets of the Trust
(taken at market value) to be invested in the securities of such
issuer; and
(2) not to purchase for its portfolio a security of any one issuer if
such purchase at the time thereof would cause more than 10% of any
class of securities of such issuer to be held by the Trust."
In order to provide greater flexibility in managing the investments of the
Trust, as more fully described below, the proposal is to change the above
policies to read for the Trust as follows:
It would be the policy of the Trust:
"not to purchase a security of any one issuer (other than securities issued
or guaranteed as to principal or interest by the U.S. Government or its
agencies or instrumentalities or mixed-ownership Government corporations)
if such purchase would, with respect to 75% of the Trust's total assets,
cause more than 5% of the Trust's total assets to be invested in the
securities of such issuer or cause more than 10% of the voting securities
of such issuer to be held by the Trust."
Under the current policies, the Trust may not invest more than 5% of its
total assets in any one issuer ("5% issuer test"). In addition, the Trust may
not invest in an issuer if the investment would result in the Trust owning more
than 10% of any class of securities of an issuer ("10% securities test"). U.S.
Government securities are not counted. The significant difference between the
current policies and proposed policy is that under the proposed policy,
31
<PAGE>
the 5% issuer test and the 10% securities test would only apply to 75% of the
Trust's assets, thereby giving the Trust the investment flexibility to exceed
the 5% issuer test and the 10% securities test as to the remaining 25% of the
Trust's assets.
The added flexibility to make an investment resulting in more than 5% of
the Trust's assets being invested in one issuer would enable the Trust to take
advantage of potential investment opportunities where, for example, the
particular issuer appears to be very attractive because of its investment
potential, its high credit worthiness, or any other compelling financial
reasons. In addition, where a relatively low supply of other comparable issuers
exists, the Trust could be interested in investing more in the limited number of
issuers available. In short, circumstances can arise where the best interests of
shareholders can be served by exceeding the 5% issuer test. Similarly, as the
Trust increases in size, its portfolio purchases get larger and could from time
to time comprise more than 10% of the voting securities of a small issuer.
Accordingly, the proposed change would give the Trust flexibility in its
investments as it grows.
The Trust has no present plan to change its investment approach if the
proposal is adopted. Adoption of the proposal would simply provide helpful
flexibility for possible use under the right circumstances in the future.
The Trust intends to implement and monitor the operation of the new policy
subject to market, regulatory or other developments.
The Trustees, including the Trustees who are not interested persons,
recommend a vote FOR approval of this proposal. If the proposal is not approved
by the shareholders of the Trust, the Trust's present investment policies will
remain in effect.
32
<PAGE>
PROPOSAL 5
TO RATIFY THE SELECTION OF COOPERS & LYBRAND L.L.P.
AS THE MASTER TRUST'S INDEPENDENT ACCOUNTANTS
The Board of Trustees has selected the firm of Coopers & Lybrand L.L.P.
as independent accountants for the Master Trust for its fiscal year ending
December 31, 1997. Shareholders are being asked to ratify the selection of
Coopers & Lybrand L.L.P. to perform audit services for the Master Trust.
Coopers & Lybrand L.L.P. has acted as independent accountants for the
Master Trust since its inception in 1989 and had served the predecessor of the
Master Trust since its inception. The selection of Coopers & Lybrand L.L.P. was
last ratified in 1989 by the shareholders, as holders of shares of the
corporation which preceded the Trust. With the reorganization into trust form,
the selection is now being ratified by the shareholders, as holders of shares of
the successor trust. The services provided by Coopers & Lybrand L.L.P. consist
of (1) examination of the Master Trust's annual financial statements, (2)
assistance and consultation in connection with filings with the Securities and
Exchange Commission and (3) review of tax matters on behalf of the Master Trust.
Coopers & Lybrand L.L.P. also serves as the independent accountants for
State Street Research Exchange Trust, State Street Research Growth Trust, State
Street Research Capital Trust and State Street Research Securities Trust, each
of which is a registered open-end management investment company for which State
Street Research & Management Company serves as investment manager.
33
<PAGE>
Although a representative of Coopers & Lybrand L.L.P. can attend and
make a statement at the meeting if the firm wishes, no representative is
expected to be at the meeting; however, the accountants will be available by
telephone should the need for consultation arise.
The Trustees, including those Trustees who are not interested persons
of the Master Trust, recommend a vote FOR ratification of the selection of
Coopers & Lybrand L.L.P. as independent accountants for the Master Trust.
VOTES REQUIRED FOR APPROVAL OF PROPOSALS 2 THROUGH 5
Approval of each of proposals 2 through 4 requires the affirmative vote of
a majority of the outstanding voting securities of the Trust as defined in the
1940 Act. Under the 1940 Act, the vote of a majority of the outstanding voting
shares means the vote of the lesser of (a) 67% or more of the voting shares
present at the meeting if the holders of more than 50% of the outstanding voting
shares are present or represented by proxy or (b) more than 50% of the
outstanding voting shares.
Approval of proposal 5 requires the affirmative vote of a majority of the
shares voted at the meeting, provided a quorum is present; that is, more than
50% of the shares voted if the holders of more than 30% of the shares entitled
to vote are present or represented by proxy.
34
<PAGE>
OTHER MATTERS TO COME BEFORE THE MEETING
The Trustees do not intend to present any other business at the Meeting,
nor are they aware that any shareholder intends to do so. If however, any other
matters are properly brought before the Meeting, the persons named in the
accompanying proxy will vote thereon in accordance with their judgment.
NO ANNUAL MEETINGS OF SHAREHOLDERS
There will be no annual or further special meetings of shareholders of the
Trust unless required by applicable law or called by the Trustees in their
discretion. In accordance with the 1940 Act, or under the Trust's Master Trust
Agreement, as amended, any Trustee may be removed (i) by a written instrument,
signed by at least two-thirds of the number of Trustees in office immediately
prior to such removal, specifying the date upon which such removal shall become
effective; or (ii) by a vote of shareholders holding not less than two-thirds of
the shares of the Trust then outstanding, cast in person or by proxy at a
meeting called for the purpose. Shareholders holding 10% or more of the shares
of the Trust then outstanding can require that the Trustees call a meeting of
shareholders for the purpose of voting on the removal of one or more Trustees.
In addition, if ten or more shareholders who have been such for at least six
months and who hold in the aggregate shares with a net asset value of at least
$25,000 or at least 1% of the outstanding Trust shares, inform the Trustees that
they wish to communicate with other shareholders, the Trustees will either give
such shareholders access to the shareholder list or inform them of the cost
involved if the Trust forwards material to shareholders on their behalf. If the
Trustees object to mailing such materials, they must inform
35
<PAGE>
the Securities and Exchange Commission and thereafter comply with the
requirements of the 1940 Act.
Shareholders wishing to submit proposals for inclusion in a proxy statement
for a subsequent shareholder meeting should send their written proposals to the
Secretary of the Master Trust, One Financial Center, Boston, Massachusetts
02111. Shareholder proposals should be received in a reasonable time before the
solicitation is made.
WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING, PLEASE FILL IN, DATE AND SIGN
THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. NO POSTAGE
IS NECESSARY IF IT IS MAILED IN THE UNITED STATES.
- ------------------------, 1997
Date of Proxy Statement
36
<PAGE>
EXHIBIT A
FIRST AMENDED AND RESTATED
INVESTMENT ADVISORY CONTRACT
Contract entered into this ______ day of __________, between State
Street Research Master Investment Trust, a Massachusetts business trust, having
its principal place of business in Boston, Massachusetts (the "Trust"), and
State Street Research & Management Company, a Delaware corporation, having its
principal place of business in Boston, Massachusetts (the "Adviser").
WITNESSETH:
That in consideration of the mutual covenants herein contained and the
performance herein required, the Trust and the Adviser hereby mutually agree as
follows:
1. Appointment of Adviser. The Trust hereby appoints and employs the
Adviser to act as investment adviser for the State Street Research Investment
Trust ("Fund") series of the Trust for the term, with the duties, and subject to
the conditions as provided in this Contract, and the Adviser hereby accepts such
appointment and employment.
2. Duties of Adviser. The Adviser shall furnish to the Trust such
management, investment advisory, statistical and research facilities and
services as may be required from time to time by the Trust in operating the
Fund.
3. Allocation of Expenses.
(a) The Adviser, at its own expense, shall furnish to the Trust
suitable office space and facilities, including all necessary equipment and
clerical personnel for managing the affairs and investments of the Fund, in the
offices maintained by the Adviser in Boston, Massachusetts or in such other
place as may be agreed on from time to time. The Adviser shall also pay the
reasonable salaries and fees of the officers of the Trust and all salaries,
expenses and costs connected with investment research and statistical work and
the operation of the business of the Adviser.
(b) The Fund shall pay all other expenses of the operation of the
Fund, including, without implied limitation, governmental fees, Trustees' fees,
interest charges, taxes, membership dues in the Investment Company Institute,
fees of independent auditors, of legal counsel and of any transfer agent,
registrar and dividend disbursing agent of the Trust, expenses of preparing,
printing and mailing share certificates, shareholders' reports, notices, proxy
statements and reports to governmental officers and commissions, brokerage
expenses, insurance premiums, fees and expenses of the custodian for all
services to the Fund, including safekeeping of funds and securities, keeping of
books and accounts and calculation of the net
A-1
<PAGE>
asset value of shares of the Fund, expenses of shareholders meetings, and
expenses relating to the issuance, registration and qualification of shares of
the Fund.
The following paragraphs 4(a) and 4(b) would be deleted:
4. Compensation of the Adviser.
(a) As full compensation for the services to be rendered and
expenses to be borne by the Adviser as provided in paragraphs 2 and 3(a) hereof,
the Fund shall pay, subject to the limitation in subparagraph (b) of this
paragraph 4, to the Adviser quarterly, beginning with the effective date hereof,
an amount equal to 1/8 of 1% of the average of the values of the net assets of
the Fund to and including $200,000,000, an amount equal to 3/32 of 1% of the
average of the values of the net assets of the Fund in excess of $200,000,000 to
and including $300,000,000, an amount equal to 3/40 of 1% of the average of the
values of the net assets of the Fund in excess of $300,000,000 to and including
$500,000,000, and an amount equal to 1/16 of 1% of the average of the values of
the net assets of the Fund in excess of $500,000,000 for each fiscal quarterly
period determined at the close of business on each business day during such
fiscal quarter on which the net asset value per share of the Fund is determined
pursuant to the provisions of the Master Trust Agreement of the Trust. Such
payment for a fiscal quarterly period shall be made by the Fund to the Adviser
within ten days following the close of such period. The Adviser shall be
entitled to receive as compensation for the fiscal quarter in which falls the
effective date of this Contract a payment calculated as above provided on a pro
rata basis for the portion of the fiscal quarterly period which shall have
elapsed from and after such effective date. If the term of this Contract shall
terminate other than on the last day of a fiscal quarter, then the Adviser shall
be entitled to receive as compensation a payment calculated as above provided on
a pro rata basis for the portion of the fiscal quarterly period which shall have
elapsed up to and including such termination date.
(b) In the event that the total expenses incurred by the Fund in
any fiscal year, excluding interest, taxes, brokerage commissions and
extraordinary litigation costs, but including payments to the Adviser, shall
exceed 1% of the average value of the net assets (computed without deducting
amounts borrowed for investment purposes) of the Fund during said fiscal year,
based upon computations of such value made as of the close of business on each
business day during such fiscal year, then the Adviser shall reimburse the Fund
for such excess expenses by making a payment to the Fund in the amount of such
excess expenses within thirty days following the close of such fiscal year.
The following subparagraphs 4(a) and 4(b) would be added:
4. Compensation of the Adviser.
(a) For the services to be provided by the Adviser as set forth
herein, the Fund shall pay to the Adviser a monthly fee as soon as practical
after the last day of each calendar month, which fee shall be paid
A-2
<PAGE>
(1) for the one year period after approval by shareholders
of the Fund, at a rate equal to 0.41% on an annual basis of the average daily
net asset value of the Fund for such month, and
(2) thereafter, at a rate equal to, on an annual basis
0.55% of first $500,000,000 of average daily net
assets, 0.50% of the next $500,000,000 of average
daily net assets, and 0.45% on all average daily net
assets in excess of $1,000,000,000 of the Fund for
such month,
In the case of termination of this Agreement with respect to the Fund during any
calendar month, the fee for that month shall be reduced proportionately based
upon the number of calendar days during which this Agreement is in effect with
respect to the Fund, and the fee shall be computed based upon the average daily
net asset value of the Fund during such period.
(b) In the event that the total expenses incurred by the Fund in
any fiscal year, excluding interest, taxes, brokerage commissions, extraordinary
litigation costs, and expenses pursuant to the Fund's Plan of Distribution
Pursuant to Rule 12b-1, but including payments to the Adviser, shall exceed 1%
of the average value of the net assets (computed without deducting amounts
borrowed for investment purposes) of the Fund during said fiscal year, based
upon computations of such value made as of the close of business on each
business day during such fiscal year, then the Adviser shall reimburse the Fund
for such excess expenses by making payment to the Fund in the amount of such
excess expenses within thirty days following the close of such fiscal year.
------------------
5. Redemption and Repurchase Fee. In consideration for handling the
details connected with any redemption of shares of the Fund by a shareholder or
with any repurchase of such shares from a shareholder by the Fund, the Adviser
will be allowed such portion of the fee, if any, charged the shareholder for
said redemption or repurchase pursuant to the provisions of the Master Trust
Agreement or By-Laws of the Trust, as amended, as may be agreed on from time to
time.
A-3
<PAGE>
6. Covenants of the Adviser.
(a) The Adviser covenants that it and its officers and directors
shall comply with the provisions of Article X of the By-Laws of the Trust during
the term of this Contract, to the extent that such provisions are applicable to
them.
(b) The Adviser covenants that during the term of this Contract
each of its officers and directors, and each of its employees who is an officer
or trustee of the Trust, shall keep the Secretary of the Trust advised on a
monthly basis of the names of those issuers (the securities of which are owned
by the Fund) in which such officer, director or employee owns more then one half
of one percent (1/2 of 1%) of the outstanding shares or securities, or both
(taken at market value), of such issuer.
7. Effective Date, Duration and Termination of This Contract.
(a) This Contract shall become effective at the commencement of
business on ________________________, and shall remain in effect (unless
terminated as hereinafter provided) until ______________________, and from year
to year thereafter; provided that this Contract shall continue in effect after
___________________, only so long as
(1) such continuance is specifically approved at least
annually by either (A) the Board of Trustees of the Trust,
or (B) "vote of a majority of the outstanding voting
securities" (as defined in Section 2(a)(42) of the
Investment Company Act of 1940) of the Fund, and
(2) the terms of this Contract are approved at least annually
by the vote of a majority of the Trustees of the Trust,
who are not parties to the Contract or "interested
persons" of any such party (as such terms are used in
Section 15(c) of the Investment Company Act of 1940), cast
in person at a meeting called for the purpose of voting on
such approval.
(b) This Contract may be terminated at any time without the payment
of any penalty by vote of the Board of Trustees of the Trust or by "vote of a
majority of the outstanding voting securities" (as defined in Section 2(a)(42)
of the Investment Company Act of 1940) of the Fund, or by the Adviser, in each
case upon sixty calendar days' prior written notice to the other party to the
Contract.
(c) This Contract shall terminate automatically in the event of its
"assignment" (as defined in Section 2(a)(4) of the Investment Company Act of
1940).
8. Amendments. This Contract may be amended at any time or from time
to time by an instrument in writing signed by a duly authorized officer of the
Trust and by the Adviser, but no amendment to this Contract shall be effective
until
A-4
<PAGE>
(1) such amendment is approved by the affirmative "vote of a
majority of the outstanding voting securities" (as defined
in Section 2(a)(42) of the Investment Company Act of 1940)
of the Fund and
(2) the terms of such amendments are approved by the vote of a
majority of the Trustees of the Trust, who are not parties
to the Contract or "interested persons" of any such party
(as such terms are used in Section 15(c) of the Investment
Company Act of 1940), cast in person at a meeting called
for the purpose of voting on such approval.
9. Miscellaneous Provisions.
(a) For all purposes of this Contract the Adviser shall be deemed
to be an independent contractor and not an agent of the Trust, and shall have no
authority to act for or represent the Trust in any way.
(b) The duties of the Adviser under this Contract shall not prevent
the Adviser from rendering similar services to other persons, firms, trusts,
corporations or other entities.
(c) The Adviser shall not be subject to liability for any act or
omission in the course of, or connected with, its performance of this Contract,
except in the case of willful misfeasance, bad faith or gross negligence on the
part of the Adviser, or the reckless disregard by the Adviser of its obligations
and duties under this Contract.
(d) Notices under this Contract shall be in writing and shall be
addressed, and delivered or mailed postage prepaid, to the other party at such
address as such other party may designate from time to time for the receipt of
such notices. Until further notice to the other party, the address of each party
to this Contract for this purpose shall be One Financial Center, Boston,
Massachusetts 02111.
(e) It is expressly agreed that the obligations of the Trust
hereunder, and the authorization, execution and delivery to this document, shall
not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust as individuals or personally, but shall bind
only the property of the Fund, as provided in the Master Trust Agreement of the
Trust. The Master Trust Agreement of the Trust provides, and it is expressly
agreed, that the Fund of the Trust shall be solely and exclusively responsible
for the payment of any direct or indirect debts, liabilities and obligations
relating to the Fund, and that no other fund shall be responsible for the same.
A-5
<PAGE>
IN WITNESS WHEREOF, STATE STREET INVESTMENT TRUST has caused this
instrument to be signed in duplicate on its behalf by its President, thereunto
duly authorized, and STATE STREET RESEARCH & MANAGEMENT COMPANY has caused this
instrument to be signed in duplicate on its behalf by its President, thereunto
duly authorized, all as of the day and year first above written.
STATE STREET RESEARCH
MASTER INVESTMENT TRUST
By: __________________
STATE STREET RESEARCH &
MANAGEMENT COMPANY
By: __________________
A-6
<PAGE>
STATE STREET RESEARCH INVESTMENT TRUST
a series of
State Street Research Master Investment Trust
PROXY
Special Meeting of Shareholders -- ____________, 1997
The undersigned hereby appoints Ralph F. Verni, Francis J. McNamara, III and
Darman A. Wing, and each of them, as proxies with full power of substitution to
act for and vote on behalf of the undersigned all shares of State Street
Research Investment Trust, a portfolio series of State Street Research Master
Investment Trust, which the undersigned would be entitled to vote if personally
present at the Special Meeting of Shareholders to be held at the principal
offices of the Trust, One Financial Center, 31st Floor, Boston, Massachusetts
02111, at 4 p.m. on ____________, 1997, or at any adjournments thereof, on the
following items as set forth in the Notice of Special Meeting of Shareholders
and the accompanying Proxy Statement.
If a choice is specified for a proposal, this proxy will be voted as indicated.
IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED FOR THE PROPOSAL. IF NO
CHOICES ARE SPECIFIED FOR ANY PROPOSALS, THIS PROXY WILL BE VOTED FOR ALL
PROPOSALS. In their discretion the proxies are authorized to vote upon such
other business as may properly come before the Meeting. The Board of Trustees
recommends a vote FOR all proposals.
The undersigned acknowledges receipt of the Notice of Special Meeting of
Shareholders and the accompanying Proxy Statement dated _________________, 1997.
PLEASE INDICATE ANY CHANGE OF ADDRESS BELOW. This proxy may be revoked at any
time prior to the exercise of the powers conferred thereby.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE SIDE
<PAGE>
<TABLE>
<CAPTION>
1. Election of Trustees / / / /
FOR WITHHOLD
<S> <C> <C> <C>
Nominees: Steve A. Garban, Malcolm T. Hopkins, Edward M. Lamont, all nominees listed authority to vote
Robert A. Lawrence, Dean O. Morton, Thomas L. Phillips, (except as noted for all nominees
Toby Rosenblatt, Michael S. Scott Morton, Ralph F. Verni, in space provided) listed
Jeptha H. Wade
</TABLE>
To withhold authority to vote for any individual nominee, write that nominee's
name in the following space.
- -------------------------------------------------------------
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C>
2. To amend the Trust's investment advisory contract to increase the management fee / / / / / /
and to make related changes.
3. To amend the Trust's fundamental policy on lending to permit securities lending. / / / / / /
4. To amend the Trust's fundamental policies regarding diversification of investments. / / / / / /
5. To ratify the selection of Coopers & Lybrand L.L.P. as the Trust's independent / / / / / /
accountants.
</TABLE>
IT IS IMPORTANT THAT THIS PROXY BE
SIGNED AND RETURNED IN THE ENCLOSED
ENVELOPE.
NOTE: Please date and sign exactly as name or
names appear hereon and return in the Signature: __________________
enclosed envelope, which requires no Date: ______________________
postage. When signing as attorney, Signature: __________________
executor, trustee, guardian or officer of Date: ______________________
a corporation, please give title as such.
<PAGE>
REQUEST TO RECONSIDER
PRIOR [ABSTENTION] ["AGAINST" VOTE]
(date)
To Shareholders of the
State Street Research Investment Trust
Recently we solicited your proxy vote on a number of important proposals.
Because you returned a proxy form which indicated that you [abstained from
voting on] [voted "against"] one or more proposals that are still open, we are
contacting you again to ask that you reconsider your [abstention] [vote
"against"] and vote in favor of the proposals. The Trust is very close to the
requisite vote to approve the proposals and your vote may make a difference. The
meeting has been adjourned to allow more time to obtain votes.
The open proposals are proposal(s) [proposal number(s)]. The proposal(s) would
help the Trust achieve its investment objective. If the proposals are approved,
the Investment Manager would have resources with which to manage the Trust and
have more investment flexibility in the future to adapt to changing market
environments, and to invest in a broader range of investment vehicles, all in
the best interests of shareholders. The proposals are described in more detail
in the Proxy Statement. Please call 1-800-562-0032 if you need another copy of
the Proxy Statement.
Please indicate your vote, sign and return promptly the enclosed Supplemental
Proxy form in the special accompanying envelope which will expedite processing
and does not require any postage from you. (If your return envelope is for
Federal Express, call for free pick-up at 1-800-238-5355.)
You may receive a telephone call urging you to return your Supplemental Proxy
form. If you have any questions, please contact State Street Research
Shareholder Services toll-free nationwide at 1-800-562-0032 between 8 a.m. and 6
p.m.
Eastern Standard Time.
Thank you.
State Street Research
Shareholder Services
Note:
In come cases, persons with the same tax identification number and mailing
address may have received proxy solicitation materials for different
accounts in one package.
<PAGE>
STATE STREET RESEARCH INVESTMENT TRUST
a series of
State Street Research Master Investment Trust
SUPPLEMENTAL PROXY FORM
Special Meeting of Shareholders -- ____________, 1997
The undersigned hereby submits this Supplemental Proxy to make the below
indicated changes to the [vote(s)] [abstention(s)] previously submitted by the
undersigned in connection with a Special Meeting of Shareholders as described in
a related Proxy Statement dated ___________________, 1997.
THIS SUPPLEMENTAL PROXY WILL SUPERCEDE ANY PRIOR PROXY FORM SUBMITTED.
If a choice is specified for a proposal, this proxy will be voted as indicated.
IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED FOR THE PROPOSAL. IF NO
CHOICES ARE SPECIFIED FOR ANY PROPOSALS, THIS PROXY WILL BE VOTED FOR ALL
PROPOSALS. The Board of Trustees recommends a vote FOR all proposals.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES.
PLEASE DETACH AND RETURN BOTTOM PORTION IN THE ENCLOSED ENVELOPE
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. Election of Trustees / / / /
FOR WITHHOLD
Nominees: Steve A. Garban, Malcolm T. Hopkins, Edward M. Lamont, all nominees listed authority to vote
Robert A. Lawrence, Dean O. Morton, Thomas L. Phillips, (except as noted for all nominees
Toby Rosenblatt, Michael S. Scott Morton, Ralph F. Verni, in space provided) listed
Jeptha H. Wade
</TABLE>
To withhold authority to vote for any individual nominee, write that nominee's
name in the following space.
- ------------------------------------------------
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C>
2. To amend the Trust's investment advisory contract to increase the management fee / / / / / /
and to make related changes.
3. To amend the Trust's fundamental policy on lending to permit securities lending. / / / / / /
4. To amend the Trust's fundamental policies regarding diversification of investments. / / / / / /
5. To ratify the selection of Coopers & Lybrand L.L.P. as the Trust's independent / / / / / /
accountants.
</TABLE>
IT IS IMPORTANT THAT THIS PROXY BE
SIGNED AND RETURNED IN THE ENCLOSED
ENVELOPE.
NOTE: Please date and sign exactly as name or
names appear hereon and return in the Signature: __________________
enclosed envelope, which requires no Date: ______________________
postage. When signing as attorney, Signature: __________________
executor, trustee, guardian or officer of Date: ______________________
a corporation, please give title as such.
