As filed with the Securities and Exchange Commission on March 2, 1998
Securities Act of 1933 File No. 33-32729
Investment Company Act of 1940 File No. 811-84
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM N-1A
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. ____ [ ]
Post-Effective Amendment No. 11 [X]
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 25 [X]
--------------------
STATE STREET RESEARCH MASTER INVESTMENT TRUST
(Exact Name of Registrant as Specified in Charter)
One Financial Center, Boston, Massachusetts 02111
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number,
Including Area Code: (617) 357-1200
Francis J. McNamara, III
Executive Vice President, General Counsel & Secretary
State Street Research & Management Company
One Financial Center
Boston, Massachusetts 02111
(Name and Address of Agent for Service)
Copy to:
Thomas J. Kelly
Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
It is proposed that this filing will become effective under Rule 485:
[ ] Immediately upon filing pursuant to paragraph (b)
[ ] On ________________ pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[X] On May 1, 1998, pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] On ______________ pursuant to paragraph (a)(2)
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective
date for a previously filed post-effective amendment.
================================================================================
<PAGE>
CROSS REFERENCE SHEET
Pursuant to Rule 481(a)
Part A
FORM N-1A ITEM NO. CAPTION OR LOCATION
IN PROSPECTUS
1. Cover Page Same
2. Synopsis Investor Expenses
3. Condensed Financial Financial Highlights;
Information Performance and Volatility
4. General Description The Fund; Other Securities and
Risks; Your Account; Fund Details
5. Management of the Fund Details
Trust
5A. Management's [To be included in
Discussion of Fund Financial Statements]
Performance
6. Capital Stock and Your Account; Fund Details
Other Securities
7. Purchase of Your Account
Securities Being
Offered
8. Redemption or Your Account
Repurchase
9. Legal Proceedings Not Applicable
(i)
<PAGE>
Part B
FORM N-1A ITEM NO. CAPTION OR LOCATION IN
STATEMENT OF ADDITIONAL
INFORMATION
10. Cover Page Same
11. Table of Contents Same
12. General Information Not Applicable
and History
13. Investment Investment Objective;
Objectives Additional Investment
and Policies Policies and Restrictions;
Additional Information
Concerning Certain Investment
Techniques; Debt Instruments
and Permitted Cash Investments;
Portfolio Transactions
14. Management of the Trustees and Officers
Registrant
15. Control Persons and Trustees and Officers
Principal Holders of
Securities
16. Investment Investment Advisory Services;
Advisory and Custodian; Independent
Other Services Accountants; Distribution of
Shares of the Fund
17. Brokerage Allocation Portfolio Transactions
18. Capital Stock and The Trust, the Fund and
Other Securities Its Shares
19. Purchase, Redemption Purchase and Redemption
and Pricing of of Shares; Shareholder Accounts;
Securities Being Net Asset Value
Offered
20. Tax Status Certain Tax Matters
21. Underwriters Distribution of Shares
of the Fund
22. Calculation of Calculation of Performance
Performance Data Data
23. Financial Statements Financial Statements
(ii)
<PAGE>
[Front cover]
This prospectus has information you should know before you invest. Please read
it carefully and keep it with your investment records.
Although these securities have been registered with the Securities and Exchange
Commission, the commission has not judged them for investment merit and does not
guarantee the accuracy or adequacy of the information in this prospectus. Anyone
who informs you otherwise is committing a federal crime.
[State Street Research logo]
Investment Trust
- ----------------------------------------------
{Graphic of Boston's Custom House]
One of America's oldest mutual funds, investing for long-term growth of capital
and income.
Prospectus
May 1, 1998
<PAGE>
Who May Want to Invest
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State Street Research Investment Trust is designed for investors who seek one or
more of the following:
[bullet] a less aggressive long-term stock investment
[bullet] a fund that takes a growth and income approach to stock investing
[bullet] a fund with an exceptionally long track record
The fund is NOT appropriate for investors who:
[bullet] want to avoid moderate to high volatility or possible losses
[bullet] are making short-term investments
[bullet] are investing emergency reserve money
The fund's shares will rise and fall in
value. There is a risk that you could
lose money by investing in the fund.
The fund cannot be certain that it will
achieve its goal.
Fund shares are not bank deposits and
are not guaranteed, endorsed or insured
by any financial institution, government
entity or the FDIC.
<PAGE>
Contents 1
- --------------------------------------------------------------------------------
2 The Fund
The fund's goal and strategy,
main risks, expenses and performance,
plus financial highlights
12 Your Account
Managing your State Street Research
investments
12 Opening an Account
12 Choosing a Share Class
14 Sales Charges
16 Policies for Buying Shares
18 Policies for Selling Shares
20 Account Policies
21 Distributions and Taxes
23 Investor Services
24 Fund Details
The fund's business structure and
dealer compensation, plus
additional policies
26 Other Securities and Risks
Information on additional portfolio
securities and practices, and the
risks associated with them
Back Cover For Additional Information
<PAGE>
2 The Fund
- --------------------------------------------------------------------------------
[Graphic of Knight chess piece]
Goal and Strategy
FUNDAMENTAL GOAL The fund seeks to provide long-term growth of capital and,
secondarily, long-term growth of income.
STRATEGY Under normal market conditions, the fund invests at least 65% of net
assets in stocks and convertible securities that have long-term growth
potential.
In selecting stocks, the fund generally attempts to identify the industries that
over the long term will grow faster than the economy as a whole. It looks for
companies within those industries and others that appear most capable of
sustained growth. These companies usually are large, established entities whose
size, financial resources and market share may enable them to maintain
competitive advantages and leadership positions. The fund may also invest in
stocks that are selling below what the portfolio manager believes to be their
intrinsic values as well as cyclical stocks believed to be at attractive points
in their market cycles. In keeping with its secondary goal, the fund also
considers a company's potential for paying dividends.
The fund reserves the right to invest up to 35% of net assets in other
securities. These may include U.S. government securities, as well as corporate
bonds rated investment-grade at the time of purchase and their unrated
equivalents.
The fund may adjust the composition of its portfolio as market conditions and
economic outlooks change. For more information about the fund's investments and
practices, see page 26.
<PAGE>
3
[Graphic: Traffic sign, arrows pointing in different directions]
Portfolio Risks
Because the fund invests primarily in stocks, its major risks are those of stock
investing, including sudden, unpredictable drops in value and the potential for
periods of lackluster performance.
Larger, more established companies may be unable to respond quickly to new
competitive challenges, such as changes in technology and consumer tastes. Many
larger companies also cannot sustain the high growth rates of successful smaller
companies, especially during extended periods of economic expansion.
[sidebar text]
[Graphic: Magnifying glass showing enlarged words on paper]
Growth and
Income Investing
Compared to a pure growth strategy, a growth and income strategy is considered a
less aggressive approach to equity investing. This strategy weighs the potential
for capital growth against the opportunity to earn current income. In making
this trade-off, different growth and income funds assign different levels of
importance to these two goals. This fund, for example, attaches primary
importance to growth of capital and secondary importance to income.
Although the goals of investing for capital growth and current income are very
different, they can be complementary. Stocks, especially growth stocks,
historically have offered long-term investors greater overall returns than many
other types of securities, but have also shown greater volatility. With dividend
stocks, the dividend income tends to support the stock's value during economic
downturns, thus reducing short-term volatility. Even when market conditions make
capital growth appear unlikely, dividend stocks may remain attractive to
investors because of their current income.
While this fund does not emphasize income or bonds, other growth and income
funds may.
[end of sidebar text]
<PAGE>
4 The Fund continued
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Because of these and other risks, the fund may underperform certain other stock
funds (those emphasizing small company stocks, for example) during periods when
growth and income stocks are out of favor. The success of the fund's investment
strategy depends largely on the portfolio manager's skill in assessing the
potential of the stocks the fund buys.
Information on other securities and risks appears on page 26.
A "snapshot" of the fund's investments may be found in the current annual or
semiannual report (see back cover).
[Graphic: "The Thinker" statue]
Investment Management
The fund's investment manager is State Street Research & Management Company. The
firm traces its heritage back to 1924 and the founding of this fund, one of
America's first mutual funds. Today the firm has more than $_____ billion in
assets under management (as of __________), including more than $____ billion in
mutual funds.
John T. Wilson has had primary responsibility for the fund's day-to-day
portfolio management since July 1996. A vice president, he joined the firm in
1996 and has worked as an investment professional since 1990.
<PAGE>
Investor Expenses 5
- --------------------------------------------------------------------------------
Class descriptions begin on page 12
-----------------------------------
Shareholder fees are paid directly by investors.
Shareholder Fees
(% of offering price)(1) Class A Class B Class C(2) Class S(2)
- --------------------------------------------------------------------------------
Maximum front-end sales charge 4.50 0.00 0.00 0.00
Maximum deferred sales charge 0.00(3) 5.00 1.00 0.00
Annual fund expenses are deducted from fund assets.
Annual Fund Expenses
(% of average net assets) Class A Class B Class C Class S
- --------------------------------------------------------------------------------
Management fee(4) 0.49 0.49 0.49 0.49
Marketing/service
(12b-1) fees(5) 0.25 1.00 1.00 0.00
Other expenses 0.16 0.16 0.16 0.16
Total annual fund expenses 0.90 1.65 1.65 0.65
Example Here is what you would pay if you invested $1,000 over the years
indicated. The example is for comparison only and does not represent the fund's
actual expenses, either past or future(6).
Year Class A Class B(7) Class C(7) Class S
- --------------------------------------------------------------------------------
1 $54 $67/$17 $27/$17 $7
3 $72 $82/$52 $52/$52 $21
5 $93 $110/$90 $90/$90 $36
10 $151 $175/$175 $195/$195 $81
(1) Not charged on reinvestments or exchanges.
(2) Before November 1, 1997, Class C shares were designated Class D and Class S
shares were designated Class C.
(3) Except for investments of $1 million or more; see page 14.
(4) Estimate, based on the level of assets on December 31, 1997. Until August
18, 1998, the management fee is 0.41% of average net assets annually. After
that, the fee will vary with the fund's level of assets. See "Fund Details"
on page 24.
(5) For share classes that have marketing/service (12b-1) fees, long-term
shareholders may pay more than the equivalent of the regulatory maximum
sales charge.
(6) Example assumes dividend reinvestment, hypothetical 5% annual return and
maximum applicable sales charges.
(7) The first number assumes you sold all your shares at the end of the period,
the second assumes you stayed in the fund.
<PAGE>
6 Financial Highlights
- --------------------------------------------------------------------------------
The information in these tables has been audited by Coopers & Lybrand L.L.P.,
the fund's independent accountants. The top section of each table shows
information for a single share of the fund. Total return figures assume
reinvestment of all distributions.
<TABLE>
<CAPTION>
Years ended December 31
----------------------------------------------------------
Class A 1993(1) 1994 1995(2) 1996(2) 1997(2)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ($) 8.75 8.69 7.74 9.16 9.07
----- ----- ----- ----- -----
Net investment income ($) 0.10 0.11 0.14 0.12 0.10
Net realized and unrealized gain (loss)
on investments ($) 0.81 (0.44) 2.39 1.80 2.54
----- ----- ----- ----- -----
Total from investment operations ($) 0.91 (0.33) 2.53 1.92 2.64
----- ----- ----- ----- -----
Dividends from net investment income ($) (0.13) (0.12) (0.13) (0.13) (0.10)
Distributions from capital gains ($) (0.84) (0.50) (0.98) (1.87) (1.20)
Distributions in excess of capital gains ($) -- -- -- (0.01) --
----- ----- ----- ----- -----
Total distributions ($) (0.97) (0.62) (1.11) (2.01) (1.30)
----- ----- ----- ----- -----
Net asset value, end of year ($) 8.69 7.74 9.16 9.07 10.41
===== ===== ===== ===== =====
Total return (%)(3) 10.53(4) (3.84) 32.85 21.03 28.91
Ratios/Supplemental Data:
Net assets at end of year ($ thousands) 75,259 92,137 135,676 223,868 367,759
Expense ratio (%) 0.75(5) 0.89 0.78 0.75 0.76
Ratio of net investment income to
average net assets (%) 1.27(5) 1.26 1.54 1.17 0.90
Portfolio turnover rate (%) 43.57 33.08 39.21 73.51 75.21
Average commission rate ($)(6) n/a n/a n/a 0.0499 0.0515
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
7
Years ended December 31
----------------------------------------------------------
Class B 1993(1) 1994 1995(2) 1996(2) 1997(2)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ($) 9.15 8.66 7.72 9.13 9.03
----- ----- ----- ----- -----
Net investment income ($) 0.06 0.06 0.07 0.04 0.02
Net realized and unrealized gain (loss)
on investments ($) 0.39 (0.44) 2.38 1.80 2.51
----- ----- ----- ----- -----
Total from investment operations ($) 0.45 (0.38) 2.45 1.84 2.53
----- ----- ----- ----- -----
Dividends from net investment income ($) (0.10) (0.06) (0.06) (0.06) (0.02)
Distributions from capital gains ($) (0.84) (0.50) (0.98) (1.87) (1.20)
Distributions in excess of capital gains ($) -- -- -- (0.01) --
----- ----- ----- ----- -----
Total distributions ($) (0.94) (0.56) (1.04) (1.94) (1.22)
----- ----- ----- ----- -----
Net asset value, end of year ($) 8.66 7.72 9.13 9.03 10.34
===== ===== ===== ===== =====
Total return (%)(3) 4.95(4) (4.43) 31.86 20.15 27.80
Ratios/Supplemental Data:
Net assets at end of year ($ thousands) 73,110 113,301 183,446 315,766 558,568
Expense ratio (%) 1.51(5) 1.64 1.53 1.50 1.51
Ratio of net investment income to
average net assets (%) 0.48(5) 0.51 0.79 0.41 0.15
Portfolio turnover rate (%) 43.57 33.08 39.21 73.51 75.21
Average commission rate ($)(6) n/a n/a n/a 0.0499 0.0515
</TABLE>
(1) Commencement of share class designations (February 17, 1993 for Class A and
March 15, 1993 for Class B) to December 31, 1993.
(2) Per-share figures have been calculated using the average shares method.
(3) Does not reflect any front-end or contingent deferred sales charge.
(4) Not annualized.
(5) Annualized.
(6) Average commission rate per share paid by the fund for security trades on
which commissions are charged beginning with the fiscal year ended December
31, 1996.
<PAGE>
8 Financial Highlights continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Years ended December 31
----------------------------------------------------------
Class C (formerly Class D) 1993(1) 1994 1995(2) 1996(2) 1997(2)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ($) 9.15 8.68 7.74 9.15 9.05
----- ----- ----- ----- -----
Net investment income ($) 0.06 0.05 0.07 0.04 0.02
Net realized and unrealized gain (loss)
on investments ($) 0.40 (0.43) 2.38 1.79 2.53
----- ----- ----- ----- -----
Total from investment operations ($) 0.46 (0.38) 2.45 1.83 2.55
----- ----- ----- ----- -----
Dividends from net investment income ($) (0.09) (0.06) (0.06) (0.05) (0.02)
Distributions from capital gains ($) (0.84) (0.50) (0.98) (1.87) (1.20)
Distributions in excess of capital gains ($) -- -- -- (0.01) --
----- ----- ----- ----- -----
Total distributions ($) (0.93) (0.56) (1.04) (1.93) (1.22)
----- ----- ----- ----- -----
Net asset value, end of year ($) 8.68 7.74 9.15 9.05 10.38
===== ===== ===== ===== =====
Total return (%)(3) 5.10(4) (4.45) 31.75 20.09 27.93
Ratios/Supplemental Data:
Net assets at end of year ($ thousands) 9,729 11,707 16,841 25,658 36,290
Expense ratio (%) 1.51(5) 1.64 1.53 1.50 1.51
Ratio of net investment income
to average net assets (%) 0.51(5) 0.51 0.79 0.42 0.15
Portfolio turnover rate (%) 43.57 33.08 39.21 73.51 75.21
Average commission rate ($)(6) n/a n/a n/a 0.0499 0.0515
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
9
Years ended December 31
------------------------------------------------------
Class S (formerly Class C) 1988 1989 1990 1991 1992
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ($) 7.30 7.24 8.65 7.67 9.04
----- ----- ----- ----- -----
Net investment income ($) 0.21 0.26 0.22 0.19 0.16
Net realized and unrealized gain (loss)
on investments ($) 0.54 2.05 (0.31) 1.96 0.40
----- ----- ----- ----- -----
Total from investment operations ($) 0.75 2.31 (0.09) 2.15 0.56
----- ----- ----- ----- -----
Dividends from net investment income ($) (0.21) (0.26) (0.23) (0.20) (0.16)
Distributions from capital gains ($) (0.60) (0.64) (0.66) (0.58) (0.64)
Distributions in excess of capital gains ($) -- -- -- -- --
----- ----- ----- ----- -----
Total distributions ($) (0.81) (0.90) (0.89) (0.78) (0.80)
----- ----- ----- ----- -----
Net asset value, end of year ($) 7.24 8.65 7.67 9.04 8.80
===== ===== ===== ===== =====
Total return (%)(3) 10.24 32.14 (0.95) 28.08 6.28
Ratios/Supplemental Data:
Net assets at end of year ($ thousands) 486,385 575,114 519,475 657,762 726,671
Expense ratio (%) 0.51 0.47 0.50 0.50 0.51
Ratio of net investment income to
average net assets (%) 2.71 3.09 2.64 2.24 1.92
Portfolio turnover rate (%) 15.39 12.35 10.07 16.28 23.99
Average commission rate ($)(6) n/a n/a n/a n/a n/a
<CAPTION>
Years ended December 31
------------------------------------------------------
Class S (formerly Class C) 1993 1994 1995(2) 1996(2) 1997(2)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ($) 8.80 8.70 7.76 9.18 9.11
----- ----- ----- ----- -----
Net investment income ($) 0.15 0.13 0.16 0.14 0.12
Net realized and unrealized gain (loss)
on investments ($) 0.74 (0.43) 2.39 1.82 2.54
----- ----- ----- ----- -----
Total from investment operations ($) 0.89 (0.30) 2.55 1.96 2.66
----- ----- ----- ----- -----
Dividends from net investment income ($) (0.15) (0.14) (0.15) (0.15) (0.12)
Distributions from capital gains ($) (0.84) (0.50) (0.98) (1.87) (1.20)
Distributions in excess of capital gains ($) -- -- -- (0.01) --
----- ----- ----- ----- -----
Total distributions ($) (0.99) (0.64) (1.13) (2.03) (1.32)
----- ----- ----- ----- -----
Net asset value, end of year ($) 8.70 7.76 9.18 9.11 10.45
===== ===== ===== ===== =====
Total return (%)(3) 10.20 (3.47) 33.07 21.48 29.08
Ratios/Supplemental Data:
Net assets at end of year ($ thousands) 729,536 627,551 738,649 780,627 883,276
Expense ratio (%) 0.49 0.65 0.54 0.50 0.51
Ratio of net investment income to
average net assets (%) 1.63 1.54 1.81 1.44 1.17
Portfolio turnover rate (%) 43.57 33.08 39.21 73.51 75.21
Average commission rate ($)(6) n/a n/a n/a 0.0499 0.0515
</TABLE>
(1) Commencement of share class designations (March 15, 1993) to December 31,
1993.
(2) Per-share figures have been calculated using the average shares method.
(3) Does not reflect any front-end or contingent deferred sales charge.
(4) Not annualized.
(5) Annualized.
(6) Average commission rate per share paid by the fund for security trades on
which commissions are charged beginning with the fiscal year ended December
31, 1996.
<PAGE>
10 Performance and Volatility
- --------------------------------------------------------------------------------
As of December 31, 1997
-------------------------------------
Average Annual Total Return(1) 1 Year 5 Years 10 Years
- --------------------------------------------------------------------------------
Class A (%) 23.11 15.91 15.18
Class B (%) 22.80 15.96 15.31
Class C (%) 26.93 16.19 15.32
Class S (%) 29.08 17.29 15.86
S&P 500 Index (%) 33.35 20.25 18.02
Lipper Growth & Income
Funds Index (%) 26.96 18.06 16.03
- ------------------------------[Bar Chart]---------------------------------------
<TABLE>
<CAPTION>
Years ended December 31
----------------------------------------------------------------------------
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A
Year-by-Year
Total Return(1) 10.24 32.14 (0.95) 28.08 6.28 9.90 (3.84) 32.85 21.03 28.91
</TABLE>
- --------------------------------------------------------------------------------
(1) Fund returns include performance from before the creation of share classes
in 1993. Because Classes A, B and C involve higher marketing/service
(12b-1) fees (as described on page 5), performance since that time is
somewhat lower for these classes.
<PAGE>
11
[sidebar text]
[Graphic: Magnifying glass showing enlarged words on paper]
Understanding Performance
and Volatility
The information on the opposite page is designed to show two aspects of the
fund's track record:
[bullet] Average annual total return is a measure of the fund's performance over
time. It is determined by taking the fund's performance over a given
period and expressing it as an average annual rate. Average annual
total return includes the effects of fund expenses and maximum sales
charges for each class, and assumes that you sold your shares at the
end of the period.
[bullet] The graph of year-by-year returns shows how volatile the fund has been:
how much the difference has been, historically, between its best years
and worst years. In general, funds with higher average annual total
returns will also have higher volatility. The graph includes the
effects of fund expenses, but no sales charges.
Also included are two independent measures of performance. The S&P 500
(officially, the "Standard & Poor's 500 Composite Stock Price Index") is an
unmanaged index of 500 domestic stocks. The Lipper Growth & Income Funds Index
shows the performance of a category of mutual funds with similar goals. The
Lipper Index shows you how well the fund has done compared to competing funds.
While the fund does not seek to match the returns or the volatility of the S&P
500, this index is a good indicator of general stock market performance and can
be used as a rough guide when gauging the return of this and other investments.
When making comparisons, keep in mind that neither the S&P 500 nor the Lipper
Index includes the effects of sales charges. Also, even if your stock portfolio
were identical to the S&P 500, your returns would always be lower, because the
S&P 500 doesn't include brokerage and administrative expenses.
[end of sidebar text]
<PAGE>
12 Your Account
- --------------------------------------------------------------------------------
[Graphic: Key]
Opening an Account
If you are opening an account through a financial professional, he or she can
assist you with all phases of your investment.
If you are investing through a large retirement plan or other special program,
follow the instructions in your program materials.
To open an account without the help of a financial professional, please use the
instructions on these pages.
[Graphic: List of share types on paper,
pencil ready to mark choice of share]
Choosing a Share Class
The fund offers four share classes, each with its own sales charge and expense
structure.
If you are investing a substantial amount and plan to hold your shares for a
long period, Class A shares may make the most sense for you. If you are
investing a lesser amount, you
[sidebar text, bottom of page]
- --------------------------------------------------------------------------------
Class A -- Front Load
[bullet] Initial sales charge of 4.5% or less; schedule on page 14
[bullet] Lower sales charges for larger investments; see sidebar on facing page
and sales charge schedule
[bullet] Lower annual expenses than Class B or C shares due to lower
marketing/service (12b-1) fee of 0.25%
Class B -- Back Load
[bullet] No initial sales charge
[bullet] Deferred sales charge of 5% or less on shares you sell within five
years; schedule on page 14
[bullet] Annual marketing/service (12b-1) fee
[bullet] Automatic conversion to Class A shares after eight years, reducing
future annual expenses
Class C(1) -- Level Load
[bullet] No initial sales charge
[bullet] Deferred sales charge of 1%, paid if you
sell shares within one year of purchase
[bullet] Lower deferred sales charge than Class B shares
[bullet] Annual marketing/service (12b-1) fee
[bullet] No conversion to Class A shares after eight years, so annual expenses
do not decrease
(1) Before November 1, 1997, these were designated Class D.
- --------------------------------------------------------------------------------
[end of sidebar text, bottom of page]
<PAGE>
13
may want to consider Class B shares (if investing for at least five years) or
Class C shares (if investing for less than five years). If you are investing
through a special program, such as a large employer-sponsored retirement plan or
certain programs available through brokers, you may be eligible to purchase
Class S shares.
Because all future investments in your account will be made in the share class
you designate when opening the account, you should make your decision carefully.
Your financial professional can help you choose the share class that makes the
most sense for you.
[sidebar text]
- --------------------------------------------------------------------------------
[Graphic: Viewing paper through magnifying glass,
showing words enlarged on paper]
Class A Sales
Charge Reductions
and Waivers
[bullet] Substantial investments receive lower sales charge rates; see
information on the following page.
[bullet] The "right of accumulation" allows you to include your existing State
Street Research investments (except Money Market Fund Class E shares)
as part of your current investment for sales charge purposes.
[bullet] A "letter of intent" allows you to count all investments in this or
other State Street Research funds over the next 13 months as if you
were making them all at once, for purposes of calculating sales
charges.
To take advantage of right of accumulation or letter of intent waivers, consult
your financial professional or State Street Research.
- --------------------------------------------------------------------------------
[end of sidebar]
[sidebar text, bottom of page]
- --------------------------------------------------------------------------------
Class S(2) -- No Load
[bullet] No sales charges of any kind
[bullet] No marketing/service (12b-1) fees; annual expenses
are lower than other share classes
[bullet] Available through certain retirement accounts, advisory accounts of the
investment manager and special programs, including broker programs with
recordkeeping and other services; these programs usually involve
special conditions and separate fees (contact your financial
professional for information).
(2) Before November 1, 1997, these were designated Class C.
- --------------------------------------------------------------------------------
[end of sidebar text, bottom of page]
<PAGE>
14 Your Account continued
- --------------------------------------------------------------------------------
Sales Charges
Class A -- Front Load
when you invest this % is which equals
this amount deducted this % of
for sales your net
charges investment
- -------------------------------------------------------
Up to $99,999 4.50 4.71
$100,000 - $249,999 3.50 3.63
$250,000 - $499,999 2.50 2.56
$500,000 - $999,999 2.00 2.04
$1 million or more see next column
With Class A shares, you pay a sales charge only when you buy shares.
If you are investing $1 million or more (either as a lump sum or through any of
the methods described on the previous page), you can purchase Class A shares
without any sales charge. However, you may be charged a "contingent deferred
sales charge" (CDSC) if you sell any shares you have held for less than one
year. Policies regarding the calculation of the CDSC are the same as for
Class B.
Class A shares are also offered with low or no sales charges through various
wrap-fee programs and other sponsored arrangements (contact your financial
professional for information).
Class B -- Back Load
this % of net asset value
when you sell shares at the time of purchase (or
in this year after you of sale, if lower) is
bought them deducted from your proceeds
- ---------------------------------------------------------------
First year 5.00
Second year 4.00
Third year 3.00
Fourth year 3.00
Fifth year 2.00
Sixth year or later None
With Class B shares, you pay no sales charge when you invest, but you are
charged a "contingent deferred sales charge" (CDSC) when you sell shares you
have held for five years or less, as described in the table above. Any shares
acquired through reinvestment are not subject to the CDSC. There is no CDSC on
exchanges into other State Street Research funds, and the
<PAGE>
15
date of your initial investment will continue to be used as the basis for CDSC
calculations when you exchange. To ensure that you pay the lowest CDSC possible,
the fund will always use the shares with the lowest CDSC to fill your sell
requests.
The CDSC is waived on shares sold for mandatory retirement distributions or
because of disability or death. Consult your financial professional or the State
Street Research Service Center.
Class B shares automatically convert to Class A shares after eight years,
lowering your annual expenses from that time on.
Class C (Formerly Class D) -- Level Load
this % of net asset value
when you sell shares at the time of purchase (or
in this year after you of sale, if lower) is
bought them deducted from your proceeds
- -----------------------------------------------------------------
First year 1.00
Second year or later None
With Class C shares, you pay no sales charge when you invest, but you are
charged a "contingent deferred sales charge" (CDSC) when you sell shares you
have held for one year or less, as described in the table above. Policies
regarding the calculation of the CDSC are the same as for Class B.
Class C shares currently have the same annual expenses as Class B shares, but
never convert to Class A shares (with their lower annual expenses).
Class S (Formerly Class C) -- No Load
Class S shares have no sales charges or CDSC.
<PAGE>
16 Your Account continued
- --------------------------------------------------------------------------------
[Graphic: Old-fashioned hand-cranked cash register]
Policies for
Buying Shares
Once you have chosen a share class, the next step is to determine the amount you
want to invest.
Minimum Initial Investments:
[bullet] $1,000 for accounts that use the Investamatic program
[bullet] $2,000 for Individual Retirement Accounts
[bullet] $2,500 for all other accounts
Minimum Additional Investments:
[bullet] $50 for any account
Complete the enclosed application. You can avoid future inconvenience by signing
up now for any services you might later use.
Timing of Requests All requests received by State Street Research before 4:00
p.m. eastern time will be executed the same day, at that day's closing share
price. Orders received after 4:00 p.m. will be executed the following day, at
that day's closing share price.
Wire Transactions Funds may be wired between 8:00 a.m. and 4:00 p.m. eastern
time. To make a same-day wire investment, please notify State Street Research by
12:00 noon of your intention to wire funds, and make sure your wire arrives by
4:00 p.m. Your bank may charge a fee for wiring money.
<PAGE>
Buying Shares 17
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
To Open an Account To Add to an Account
<S> <C> <C>
Through a Financial Contact your financial Contact your financial
Professional professional. professional.
[Graphic: Briefcase]
By Mail Make your check payable to Fill out the investment stub
[Graphic: Mail Box] "State Street Research from an account statement, or
Funds." Forward the check indicate the fund name and
and your application to account number on your check.
State Street Research. Make your check payable to
"State Street Research Funds."
Forward the check and stub to
State Street Research.
By Federal Funds Wire Forward your application to Call State Street Research to
[Graphic: Capitol State Street Research, then obtain a control number.
Building] call to obtain an account Instruct your bank to wire funds
number. Wire funds using the to:
instructions at right.
[bullet] State Street Bank and
Trust Company,
Boston, MA
[bullet] ABA: 011000028
[bullet] BNF: fund name and
share class you want
to buy
[bullet] AC: 99029761
[bullet] OBI: your name and your
account number
[bullet] Control: the number
given to you by
State Street Research
By Electronic Funds Verify that your bank is a Call State Street Research to
Transfer (ACH) member of the ACH (Automated verify that the necessary bank
[Graphic: plug] Clearing House) system. information is on file for your
Forward your application to account. If it is, you may
State Street Research. request a transfer with the same
Please be sure to include phone call. If not, please ask
the appropriate bank State Street Research to provide
information. Call State you with an EZ Trader application.
Street Research to request a
purchase.
By Investamatic Forward your application, Call State Street Research to
[Graphic: calendar] with all appropriate verify that Investamatic is in
sections completed, to State place on your account, or to
Street Research, along with request a form to add it.
a check for your initial Investments are automatic once
investment payable to "State Investamatic is in place.
Street Research Funds."
By Exchange Call State Street Research Call State Street Research or
[Graphic: arrows or visit our Web site. visit our Web site.
pointing in 2
different directions]
</TABLE>
State Street Research Service Center PO Box 8408, Boston, MA 02266-8408
Internet www.ssrfunds.com
Call toll-free: 1-800-562-0032 (business days 8:00 a.m. - 6:00 p.m.,
eastern time)
<PAGE>
18 Your Account continued
- --------------------------------------------------------------------------------
[Graphic: Old-fashioned hand-crank adding machine]
Policies for
Selling Shares
Circumstances that Require Written Requests Please submit instructions in
writing when any of the following apply:
[bullet] you are selling more than $100,000 worth of shares
[bullet] the name or address on the account has changed within the last 30 days
[bullet] you want the proceeds to go to a name or address not on the account
registration
[bullet] you are transferring shares to an account with a different registration
or share class
[bullet] you are selling shares held in a corporate or fiduciary account; for
these accounts, additional documents are required:
corporate accounts: certified copy of a corporate resolution
fiduciary accounts: copy of power of attorney or other governing
document
To protect your account against fraud, all signatures on these documents must be
guaranteed. You may obtain a signature guarantee at most banks and securities
dealers. A notary public cannot provide a signature guarantee.
INCOMPLETE SELL REQUESTS State Street Research will attempt to notify you
promptly if any information necessary to process your request is missing.
TIMING OF REQUESTS All requests received in good order by State Street Research
before 4:00 p.m. eastern time will be executed the same day, at that day's
closing share price. Requests received after 4:00 p.m. will be executed the
following day, at that day's closing share price.
WIRE TRANSACTIONS Proceeds sent by federal funds wire must total at least
$5,000. A fee of $7.50 will be deducted from all proceeds sent by wire, and your
bank may charge an additional fee to receive wired funds.
SELLING RECENTLY PURCHASED SHARES If you sell shares before the check or
electronic funds transfer (ACH) for those shares has been collected, you will
not receive the proceeds until your initial payment has cleared. This may take
up to 15 days after your purchase was recorded (in rare cases, longer). If you
open an account with shares purchased by wire, you cannot sell those shares
until your application has been processed.
<PAGE>
Selling Shares 19
- --------------------------------------------------------------------------------
To Sell Some or All of Your Shares
Through a Financial Contact your financial professional.
Professional
[Graphic: Briefcase]
By Mail Send a letter of instruction, an endorsed stock
[Graphic: Mailbox] power or share certificates (if you hold
certificate shares) to State Street Research.
Specify the fund, the account number and the
dollar value or number of shares. Be sure to
include all necessary signatures and any
additional documents, as well as signature
guarantees if required (see facing page).
By Federal Check with State Street Research to make sure that
Funds Wire a wire redemption privilege, including a bank
[Graphic: Capitol designation, is in place on your account. Once
Building] this is established, you may place your request
to sell shares with State Street Research.
Proceeds will be wired to your pre-designated
bank account. (See "Wire Transactions" on facing
page.)
By Electronic Funds Check with State Street Research to make sure that
Transfer (ACH) the EZ Trader feature, including a bank
[Graphic: plug] designation, is in place on your account. Once
this is established, you may place your request to
sell shares with State Street Research. Proceeds
will be sent to your pre-designated bank account.
By Telephone As long as the transaction does not require a
[Graphic: telephone] written request (see facing page), you or your
financial professional can sell shares by calling
State Street Research. A check will be mailed to
you on the following business day.
By Exchange Read the prospectus for the fund into which you
[Graphic: arrows are exchanging. Call State Street Research or
pointing in 2 visit our Web site.
different directions]
By Systematic See plan information on page 23.
Withdrawal Plan
[Graphic: calendar]
State Street Research Service Center PO Box 8408, Boston, MA 02266-8408
Internet www.ssrfunds.com
Call toll-free: 1-800-562-0032 (business days 8:00 a.m. - 6:00 p.m.,
eastern time)
<PAGE>
20 Your Account continued
- --------------------------------------------------------------------------------
[Graphic: A stack of papers]
Account Policies
THE FUND'S BUSINESS HOURS The fund is open the same days as the New York Stock
Exchange (generally Monday through Friday). Fund representatives are available
from 8:00 a.m. to 6:00 p.m. eastern time on these days.
CALCULATING SHARE PRICE The fund calculates its net asset value per share (NAV)
every business day at the close of regular trading on the New York Stock
Exchange (usually at 4:00 p.m. eastern time). Each class's share price is
calculated by dividing its net assets by the number of its shares outstanding.
TELEPHONE REQUESTS When you open an account you automatically receive telephone
privileges, allowing you to place requests on your account by telephone. Your
financial professional can also use these privileges to request exchanges on
your account and, with your written permission, redemptions. For your
protection, all telephone calls are recorded.
As long as State Street Research takes certain measures to authenticate
telephone requests on your account, you may be held responsible for unauthorized
requests. Unauthorized telephone requests are rare, but if you want to protect
yourself completely, you can decline the telephone privilege on your
application. The fund may suspend or eliminate the telephone privilege at any
time.
EXCHANGE PRIVILEGES There is no fee to exchange shares among State Street
Research funds. Your new fund shares will be the equivalent class as your
current shares. Any contingent deferred sales charges will continue to be
calculated from the date of your initial investment.
Frequent exchanges can interfere with fund management and drive up costs for all
shareholders. Because of this, the fund currently limits each account, or group
of accounts under common ownership or control, to six exchanges per calendar
year. The fund may change or eliminate the exchange privilege at any time, may
limit or cancel any shareholder's exchange privilege and may refuse to
<PAGE>
21
accept any exchange request, particularly those associated with "market timing"
strategies.
For Merrill Lynch customers, exchange privileges extend to Summit Cash Reserves
Fund, which is related to the fund for purposes of investment and investor
services.
ACCOUNTS WITH LOW BALANCES If the value of your account falls below $1,500,
State Street Research may mail you a notice asking you to bring the account back
up to $1,500 or close it out. If you do not take action within 60 days, State
Street Research may either sell your shares and mail the proceeds to you at the
address of record or may deduct an annual maintenance fee (currently $18).
REINSTATING RECENTLY SOLD SHARES For 120 days after you sell shares, you have
the right to "reinstate" your investment by putting some or all of the proceeds
into any currently available State Street Research fund at net asset value. Any
CDSC you paid on the amount you are reinstating will be credited to your
account. You may only use this privilege once in any twelve-month period with
respect to your shares of a given fund.
[Graphic: "Uncle Sam")
Distributions and Taxes
INCOME AND CAPITAL GAINS DISTRIBUTIONS The fund typically distributes its net
income to shareholders four times a year. Net capital gains, if any, are
typically distributed around the end of the fund's fiscal year, which is
December 31.
You may have your distributions reinvested in the fund, invested in a different
State Street Research fund, deposited in a bank account, or mailed out by check.
If you do not give State Street Research other instructions, your distributions
will automatically be reinvested in the fund.
<PAGE>
22 Your Account continued
[sidebar text]
- --------------------------------------------------------------------------------
[Graphic: Magnifying glass showing enlarged words on paper]
Tax Considerations
Unless your investment is in a tax deferred account, you may want to avoid:
[bullet] investing a large amount in the fund close to the end of its fiscal
year (if the fund makes a capital gains distribution, you will receive
some of your investment back as a taxable distribution)
[bullet] selling shares at a loss for tax purposes and investing in a
substantially identical investment within 30 days before or after that
sale (such a transaction is usually considered a "wash sale," and you
will not be allowed to claim a tax loss)
- --------------------------------------------------------------------------------
[end of sidebar]
TAX EFFECTS OF DISTRIBUTIONS AND TRANSACTIONS In general, any dividends and
short-term capital gain distributions you receive from the fund are taxable as
ordinary income. Distributions of other capital gains are generally taxable as
capital gains. This is true no matter how long you have owned your shares and
whether you reinvest your distributions or take them in cash.
Every year, the fund will send you information detailing the amount of ordinary
income and capital gains distributed to you for the previous year.
The sale of shares in your account may produce a gain or loss, and is a taxable
event. For tax purposes, an exchange is the same as a sale.
Your investment in the fund could have additional tax consequences. Please
consult your tax professional for assistance.
BACKUP WITHHOLDING By law, the fund must withhold 31% of your distributions and
proceeds if you have not provided complete, correct taxpayer information.
<PAGE>
23
[Graphic: 2 hands, handshake greeting]
INVESTOR SERVICES
INVESTAMATIC PROGRAM
Use Investamatic to set up regular automatic investments in the fund from your
bank account. You determine the frequency and amount of your investments, and
you can skip an investment with three days notice. Not available with Class S
shares.
SYSTEMATIC WITHDRAWAL PLAN
This plan is designed for retirees and other investors who want regular
withdrawals from a fund account. The plan is free and allows you to withdraw up
to 8% of your fund assets a year without incurring any contingent deferred sales
charges. Certain terms and minimums apply.
DIVIDEND ALLOCATION PLAN This plan automatically invests your distributions
from the fund into another fund of your choice, without any fees or sales
charges.
AUTOMATIC BANK CONNECTION This plan lets you route any distributions or
Systematic Withdrawal Plan payments directly to your bank account.
State Street Research also offers a full range of prototype retirement plans for
individuals, sole proprietors, partnerships, corporations and employees. Call
1-800-562-0032 for information on retirement plans or any of the services
described above.
<PAGE>
24 Fund Details
- --------------------------------------------------------------------------------
[Graphic: Top of ionic column]
Business Structure
Originally formed in 1924 as State Street Investment Corporation, the fund was
reorganized in 1989 as a diversified series of State Street Research Master
Investment Trust, an open-end management investment company that is organized as
a Massachusetts business trust. The fund has been open to the public
periodically since its inception and has continuously offered its shares to the
public since May 1990.
A board of trustees representing shareholder interests oversees the trust's
operations, including the hiring of the investment manager and other service
providers. The fund does not hold regular shareholder meetings, but may call
meetings when matters arise that require shareholder approval. These may include
amendments to the investment management agreement, the election of trustees or
proposed changes in the fund's fundamental goal, which cannot be changed without
shareholder approval.
The investment manager is responsible for the fund's investment and business
activities, and receives the management fee as compensation. The management fee
is 0.41% of fund assets annually until August 18, 1998, and then 0.55% of the
first $500 million of fund assets, annually, 0.50% of the next $500 million, and
0.45% of any amount over $1 billion. The investment manager and the distributor
are subsidiaries of Metropolitan Life Insurance Company.
Brokers for Portfolio Trades
When placing trades for the fund's portfolio, State Street Research chooses
brokers that provide the best execution (a term defined by service as well as
price), but may also consider a broker's sales of fund shares.
Investment Manager
State Street Research & Management Company
One Financial Center, Boston, MA 02111
Distributor
State Street Research Investment Services, Inc.
One Financial Center, Boston, MA 02111
Service Center
State Street Research Service Center
P.O. Box 8408, Boston, MA 02266
Custodian
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110
<PAGE>
25
[Graphic: Check or money order]
Dealer Compensation
Dealers who sell shares of the fund and perform services for fund investors
receive sales commissions and annual fees. These are paid by the fund's
distributor, using money from sales charges, marketing/service (12b-1) fees and
its other resources.
Maximum Dealer Compensation Class A Class B Class C Class S
Initial commission (%) -- 4.00 1.00 0.00
Investments up to $100,000 (%) 4.00 -- -- --
$100,000 - $249,999 (%) 3.00 -- -- --
$250,000 - $499,999 (%) 2.00 -- -- --
$500,000 - $999,999 (%) 1.75 -- -- --
First $1-3 million (%) 1.00(1) -- -- --
Next $2 million (%) 0.50(1) -- -- --
Next $1 and above (%) 0.25(1) -- -- --
Annual fee (%) 0.25 0.25 0.90 0.00
ADDITIONAL POLICIES Please note that the fund maintains additional policies and
reserves certain rights, including:
[bullet] The fund may vary its initial or additional investments in the case of
exchanges, reinvestments, periodic investment plans, retirement and
employee benefit plans, sponsored arrangements and other similar
programs.
[bullet] All orders to purchase shares are subject to acceptance by the fund.
[bullet] At any time, the fund may change or discontinue its sales charge
waivers and any of its order acceptance practices, and may suspend the
sale of its shares.
[bullet] To permit investors to obtain the current price, dealers are
responsible for transmitting all orders to the State Street Research
Service Center promptly.
[bullet] Dealers may impose a transaction fee on the purchase or sale of shares
by shareholders.
[bullet] The distributor may pay its affiliate MetLife Securities, Inc.
additional compensation of up to 0.25% of certain sales or assets.
(1) If your broker declines this commission, the one-year CDSC on your
investment is waived.
<PAGE>
26 Other Securities and Risks
- --------------------------------------------------------------------------------
[Graphic: Stock certificates]
Other Securities
and Risks
Each of the fund's portfolio securities and investment practices offers certain
opportunities and carries various risks. Major investments and risk factors are
outlined in the fund description starting on page 2. Below are brief
descriptions of other securities and practices, along with their associated
risks. A table of limitations follows.
FOREIGN INVESTMENTS Foreign securities are generally more volatile than their
domestic counterparts, in part because of higher political and economic risks,
lack of reliable information, and fluctuations in currency exchange rates. These
risks are usually higher in less developed countries. The fund may use foreign
currencies and related instruments to hedge its foreign investments.
In addition, foreign securities may be more difficult to resell and the markets
for them less efficient than for comparable U.S. securities. Even where a
foreign security increases in price in its local currency, the appreciation may
be diluted by the negative effect of exchange rates when the security's value is
converted to U.S. dollars. Foreign withholding taxes also may apply and errors
and delays may occur in the settlement process for foreign securities.
DERIVATIVES Derivatives, a category that includes options and futures, are
financial instruments whose value derives from another security or an index. The
fund may use derivatives for hedging (attempting to offset a potential loss in
one position by establishing an interest in an opposite position). The fund may
also use derivatives for speculation (investing for potential income or capital
gain).
While hedging can guard against potential risks, it adds to the fund's expenses
and can eliminate some opportunities for gains. There is also a risk that a
derivative intended as a hedge may not perform as expected.
<PAGE>
27
The main risk with derivatives is that some types can amplify a gain or loss,
potentially earning or losing substantially more money than the actual cost of
the derivative.
With all derivatives, whether used for hedging or speculation, there is also the
risk that the counterparty may fail to honor its contract terms, causing a loss
for the fund.
SECURITIES LENDING The fund may seek additional income by lending portfolio
securities to qualified institutions. By reinvesting collateral it receives in
these transactions, the fund could magnify any gain or loss it realizes on the
underlying investment. If the borrower fails to return the securities and the
collateral is insufficient to cover the loss, the fund could lose money.
WHEN-ISSUED SECURITIES The Trust may invest in securities prior to the date of
their issue. These securities could fall in value by the time they are actually
issued, which may be anytime from a few days to over a year.
RESTRICTED AND ILLIQUID SECURITIES Any securities that are thinly traded or
whose resale is restricted can be difficult to sell at a desired time and price.
Some of these securities are new and complex, and trade only among institutions;
the markets for these securities are still developing, and may not function as
efficiently as established markets. Owning a large percentage of restricted and
illiquid securities could hamper the fund's ability to raise cash to meet
redemptions. Also, because there may not be an established market price for
these securities, the fund may have to estimate their value, which means that
their valuation (and, to a much smaller extent, the valuation of the fund) may
have a subjective element.
SHORT-TERM TRADING While the fund ordinarily does not trade securities for
short-term profits, it will sell any security at any time it believes best,
which may result in short-term profits. Short-term trading can increase the
fund's transaction costs and may increase your tax liability.
REPURCHASE AGREEMENTS The fund may buy securities with the understanding that
the seller will buy them back with interest at a later date. If the seller is
unable to honor its commitment to repurchase the securities, the fund could lose
money.
<PAGE>
28 Other Securities and Risks continued
- --------------------------------------------------------------------------------
BONDS The value of any bonds held by the fund is likely to decline when
interest rates rise; this risk is greater for bonds with longer maturities. A
less significant risk is that a bond issuer could default on principal or
interest payments, causing a loss for the fund.
DEFENSIVE INVESTING During unusual market conditions, the fund may place up to
100% of total assets in cash or quality short-term debt securities.
Investment Limitations
Limitation at the time of investment
-------------------------------------------
Practice % of total assets % of net assets
- --------------------------------------------------------------------------------
Investing in securities of any
given issuer (other than the
U.S. government and its
agencies)(1) 5(2) --
Investing in any given industry(1) 25 --
Investing in issuers with less
than 3 years of continuous
operations(1) 5
Lending securities 33-1/3 --
Lending money(1) Prohibited --
Repurchase agreements -- 30
Swap arrangements -- 5
Security
- --------------------------------------------------------------------------------
Commodity futures contracts
and options contracts
(for non-hedging purposes) -- 5(3)
Other options contracts
(for non-hedging purposes) -- 5(3)
Illiquid securities -- 15(5)
Restricted securities 10(5) --
Foreign securities 35(6) --
(1) Fundamental policy; may not be changed without shareholder approval.
(2) Applies only to 75% of fund's total assets. The fund also is prohibited
from investing in more than 10% of an issuer's voting securities.
(3) Initial margin deposits plus premiums may not exceed 5% of the market value
of the fund's net assets in non-hedging transactions. No limits apply when
used in hedging strategies.
(4) Includes repurchase agreements extending over more than seven days.
(5) Does not include Rule 144A securities.
(6) Applies to all direct and indirect interests in securities of non-U.S.
issuers.
<PAGE>
Notes 29
- --------------------------------------------------------------------------------
<PAGE>
[back cover]
For Additional Information
- --------------------------------------------------------------------------------
You can obtain a free copy of the current annual/semiannual report or SAI by
contacting:
[State Street Research logo]
Service Center
P.O. Box 8408, Boston, MA 02266
Telephone: 1-800-562-0032
Internet: www.ssrfunds.com
Or you can visit the SEC Web site at:
www.sec.gov
You can find additional information on the fund's structure and its performance
in the following documents:
Annual/Semiannual Reports While the prospectus describes the fund's potential
investments, these reports detail the fund's actual investments as of the report
date. Reports include a discussion by fund management of recent economic and
market trends and fund performance. The annual report also includes the report
of the fund's independent accountants.
Statement of Additional Information (SAI) A supplement to the prospectus, the
SAI contains further information about the fund and its investment limitations
and policies. It also includes the most recent annual report and the independent
accountants' report. A current SAI for this fund is on file with the Securities
and Exchange Commission and is incorporated by reference (is legally part of
this prospectus).
prospectus
--------------
Control Number: xxxx-xxxxxx(xxxx)SSR-LD EIN-xxxx-xxxxx
<PAGE>
STATE STREET RESEARCH INVESTMENT TRUST
a Series of
STATE STREET RESEARCH MASTER INVESTMENT TRUST
STATEMENT OF ADDITIONAL INFORMATION
May 1, 1998
TABLE OF CONTENTS
Page
INVESTMENT OBJECTIVE......................................................2
ADDITIONAL INVESTMENT POLICIES AND RESTRICTIONS...........................2
ADDITIONAL INFORMATION CONCERNING
CERTAIN INVESTMENT TECHNIQUES....................................4
DEBT INSTRUMENTS AND PERMITTED CASH INVESTMENTS..........................14
THE TRUST, THE FUND AND ITS SHARES.......................................19
TRUSTEES AND OFFICERS....................................................20
INVESTMENT ADVISORY SERVICES.............................................25
PURCHASE AND REDEMPTION OF SHARES........................................27
SHAREHOLDER ACCOUNTS.....................................................32
NET ASSET VALUE..........................................................36
PORTFOLIO TRANSACTIONS...................................................37
CERTAIN TAX MATTERS......................................................41
DISTRIBUTION OF SHARES OF THE FUND.......................................43
CALCULATION OF PERFORMANCE DATA..........................................48
CUSTODIAN................................................................51
INDEPENDENT ACCOUNTANTS..................................................52
FINANCIAL STATEMENTS.....................................................52
The following Statement of Additional Information is not a Prospectus.
It should be read in conjunction with the Prospectus of State Street Research
Investment Trust (the "Fund") dated May 1, 1998, which may be obtained without
charge from the offices of State Street Research Master Investment Trust (the
"Trust") or State Street Research Investment Services, Inc. (the "Distributor"),
One Financial Center, Boston, Massachusetts 02111-2690.
CONTROL NUMBER: 12850-970131(0298)SSR-LD CF-879D-0198
<PAGE>
INVESTMENT OBJECTIVE
As set forth under "The Fund--Goal and Strategy--Fundamental Goal" in
the Prospectus of State Street Research Investment Trust (the "Fund"), the
Fund's investment goal, which is to seek long-term growth of capital and,
secondarily, long-term growth of income, is fundamental and may not be changed
by the Fund except by the affirmative vote of a majority of the outstanding
voting securities of the Fund, as defined in the Investment Company Act of 1940,
as amended (the "1940 Act"). (Under the 1940 Act, a "vote of the majority of the
outstanding voting securities" means the vote, at the annual or a special
meeting of security holders duly called, (i) of 67% or more of the voting
securities present at the meeting if the holders of more than 50% of the
outstanding voting securities are present or represented by proxy or (ii) of
more than 50% of the outstanding voting securities, whichever is less.)
ADDITIONAL INVESTMENT POLICIES AND RESTRICTIONS
As set forth under "Investment Trust--Portfolio Risks" and "Other
Securities and Risks" in the Fund's Prospectus, the Fund has adopted certain
investment restrictions, and those investment restrictions are either
fundamental or not fundamental. Fundamental restrictions may not be changed by
the Fund except by the affirmative vote of a majority of the outstanding voting
securities of the Fund. Restrictions that are not fundamental may be changed by
a vote of a majority of the Trustees of the Trust.
The Fund's fundamental investment restrictions are set forth below.
Under these restrictions, it is the Fund's policy:
(1) 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 Fund's total assets, cause
more than 5% of the Fund'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 Fund;
(2) not to purchase securities of any issuer that has a record of
less than three years' continuous operation if such purchase
would cause more than 5% of the Fund's total assets (taken at
market value) to be invested in the securities of such
issuers, provided that any such three-year period may include
the operation of any predecessor company, partnership, or
individual enterprise if the issuer whose securities are to be
purchased came into existence as a result of a merger,
consolidation, reorganization, or the purchase of
substantially all the assets of such predecessor;
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<PAGE>
(3) not to make any investment that would cause more than 25% of
the Fund's total assets, taken at market value, to be invested
in any one industry;
(4) not to issue senior securities other than in connection with
the borrowing of money as permitted under sub-paragraph (9) of
this paragraph;
(5) not to underwrite or participate in the marketing of
securities of other issuers although the Fund may, acting
alone or in syndicates or groups, purchase or otherwise
acquire securities of other issuers for, investment, either
from issuers or from persons in a control relationship with
the issuers or from underwriters of such securities [as a
matter of interpretation, which is not part of the fundamental
policy, this restriction does not apply to the extent that, in
connection with the disposition of the Fund's securities, the
Fund may be deemed to be an underwriter under certain federal
securities laws];
(6) not to make any investment in real property, although the Fund
may purchase and sell other interests in real estate,
including securities which are secured by real estate, or
securities of companies which own or invest or deal in real
estate;
(7) not to invest in commodities or commodity contracts except for
futures and options on futures with respect to securities and
securities indices;
(8) not to lend money; however, the Fund 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);
(9) not to borrow money except on an unsecured basis and then only
up to an amount equal to 10% of its net assets (see
"Additional Information Concerning Certain Investment
Techniques--Other Techniques" herein);
(10) not to purchase securities for its portfolio on margin, except
that this shall not prevent such short term credits as are
necessary for the clearance of transactions, and except that
the Fund may use escrow or custodian receipts or letters,
margin or safekeeping accounts, or enter into similar industry
arrangements in connection with trading futures and options;
(11) not to make a short sale of any securities, or purchase or
write puts, calls, straddles or spreads except in connection
with options on securities and securities indices and options
on futures with respect to securities and securities indices;
(12) not to invest directly as a joint venturer or general partner
in oil, gas or other mineral exploration or development joint
ventures or general partnerships
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<PAGE>
(provided that the Fund may invest in securities issued by
companies which invest in or sponsor such programs and in
securities indexed to the price of oil, gas or other
minerals);
(13) not to purchase securities for its portfolio issued by another
investment company except by a purchase in the open market
involving no more than customary brokers' commissions or to
complete a merger, consolidation or other acquisition of
assets; and
(14) not to purchase or retain any securities of an issuer if, to
the knowledge of the Fund, those of its officers and Trustees
and those officers and Directors of its investment adviser who
individually own more than 1/2 of 1% of the securities of such
issuer, when combined, own more than 5% of such issuer taken
at market.
The following investment restrictions are not fundamental. Under these
restrictions, it is the Fund's policy:
(1) not to purchase any security or enter into a repurchase agreement
if as a result more than 15% of its net assets would be invested in securities
that are illiquid (including repurchase agreements not entitling the holder to
payment of principal and interest within seven days); and
(2) not to make investments for the purpose of exercising control or
management of other companies although the Fund may from time to time present
its views on various matters to the management of companies in which it holds an
investment.
ADDITIONAL INFORMATION CONCERNING
CERTAIN INVESTMENT TECHNIQUES
Derivatives
The Fund may buy and sell certain types of derivatives, such as
options, futures contracts, options on futures contracts, and swaps under
circumstances in which such instruments are expected by State Street Research &
Management Company (the "Investment Manager") to aid in achieving the Fund's
investment objective. The Fund may also purchase instruments with
characteristics of both futures and securities (e.g., debt instruments with
interest and principal payments determined by reference to the value of a
commodity or a currency at a future time) and which, therefore, possess the
risks of both futures and securities investments.
Derivatives, such as options, futures contracts, options on futures
contracts, and swaps enable the Fund to take both "short" positions (positions
which anticipate a decline in the market value of a particular asset or index)
and "long" positions (positions which anticipate an
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<PAGE>
increase in the market value of a particular asset or index). The Fund may also
use strategies which involve simultaneous short and long positions in response
to specific market conditions, such as where the Investment Manager anticipates
unusually high or low market volatility.
The Investment Manager may enter into derivative positions for the Fund
for either hedging or non-hedging purposes. The term hedging is applied to
defensive strategies designed to protect the Fund from an expected decline in
the market value of an asset or group of assets that the Fund owns (in the case
of a short hedge) or to protect the Fund from an expected rise in the market
value of an asset or group of assets which it intends to acquire in the future
(in the case of a long or "anticipatory" hedge). Non-hedging strategies include
strategies designed to produce incremental income (such as the option writing
strategy described below) or "speculative" strategies, which are undertaken to
profit from (i) an expected decline in the market value of an asset or group of
assets which the Fund does not own or (ii) expected increases in the market
value of an asset which it does not plan to acquire. Information about specific
types of instruments is provided below.
Futures Contracts. Futures contracts are publicly traded contracts to
buy or sell an underlying asset or group of assets, such as a currency or an
index of securities, at a future time at a specified price. A contract to buy
establishes a long position while a contract to sell establishes a short
position.
The purchase of a futures contract on an equity security or an index of
equity securities normally enables a buyer to participate in the market movement
of the underlying asset or index after paying a transaction charge and posting
margin in an amount equal to a small percentage of the value of the underlying
asset or index. The Fund will initially be required to deposit with the Trust's
custodian or the broker effecting the futures transaction an amount of "initial
margin" in cash or securities, as permitted under applicable regulatory
policies.
Initial margin in futures transactions is different from margin in
securities transactions in that the former does not involve the borrowing of
funds by the customer to finance the transaction. Rather, the initial margin is
like a performance bond or good faith deposit on the contract. Subsequent
payments (called "maintenance margin") to and from the broker will be made on a
daily basis as the price of the underlying asset fluctuates. This process is
known as "marking to market." For example, when the Fund has taken a long
position in a futures contract and the value of the underlying asset has risen,
that position will have increased in value and the Fund will receive from the
broker a maintenance margin payment equal to the increase in value of the
underlying asset. Conversely, when the Fund has taken a long position in a
futures contract and the value of the underlying instrument has declined, the
position would be less valuable, and the Fund would be required to make a
maintenance margin payment to the broker.
At any time prior to expiration of the futures contract, the Fund may
elect to close the position by taking an opposite position which will terminate
the Fund's position in the futures contract. A final determination of
maintenance margin is then made, additional cash is
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<PAGE>
required to be paid by or released to the Fund, and the Fund realizes a loss or
a gain. While futures contracts with respect to securities do provide for the
delivery and acceptance of such securities, such delivery and acceptance are
seldom made.
In transactions establishing a long position in a futures contract,
assets equal to the face value of the futures contract will be identified by the
Fund to the Trust's custodian for maintenance in a separate account to insure
that the use of such futures contracts is unleveraged. Similarly, assets having
a value equal to the aggregate face value of the futures contract will be
identified with respect to each short position. The Fund will utilize such
assets and methods of cover as appropriate under applicable exchange and
regulatory policies.
Options. The Fund may use options to implement its investment strategy.
There are two basic types of options: "puts" and "calls." Each type of option
can establish either a long or a short position, depending upon whether the Fund
is the purchaser or the writer of the option. A call option on a security, for
example, gives the purchaser of the option the right to buy, and the writer the
obligation to sell, the underlying asset at the exercise price during the option
period. Conversely, a put option on a security gives the purchaser the right to
sell, and the writer the obligation to buy, the underlying asset at the exercise
price during the option period.
Purchased options have defined risk, that is, the premium paid for the
option, no matter how adversely the price of the underlying asset moves, while
affording an opportunity for gain corresponding to the increase or decrease in
the value of the optioned asset. In general, a purchased put increases in value
as the value of the underlying security falls and a purchased call increases in
value as the value of the underlying security rises.
The principal reason to write options is to generate extra income (the
premium paid by the buyer). Written options have varying degrees of risk. An
uncovered written call option theoretically carries unlimited risk, as the
market price of the underlying asset could rise far above the exercise price
before its expiration. This risk is tempered when the call option is covered,
that is, when the option writer owns the underlying asset. In this case, the
writer runs the risk of the lost opportunity to participate in the appreciation
in value of the asset rather than the risk of an out-of-pocket loss. A written
put option has defined risk, that is, the difference between the agreed-upon
price that the Fund must pay to the buyer upon exercise of the put and the
value, which could be zero, of the asset at the time of exercise.
The obligation of the writer of an option continues until the writer
effects a closing purchase transaction or until the option expires. To secure
its obligation to deliver the underlying asset in the case of a call option, or
to pay for the underlying asset in the case of a put option, a covered writer is
required to deposit in escrow the underlying security or other assets in
accordance with the rules of the applicable clearing corporation and exchanges.
Among the options which the Fund may enter are options on securities
indices. In general, options on indices of securities are similar to options on
the securities themselves
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<PAGE>
except that delivery requirements are different. For example, a put option on an
index of securities does not give the holder the right to make actual delivery
of a basket of securities but instead gives the holder the right to receive an
amount of cash upon exercise of the option if the value of the underlying index
has fallen below the exercise price. The amount of cash received will be equal
to the difference between the closing price of the index and the exercise price
of the option expressed in dollars times a specified multiple. As with options
on equity securities, or futures contracts, a Fund may offset its position in
index options prior to expiration by entering into a closing transaction on an
exchange or it may let the option expire unexercised.
A securities index assigns relative values to the securities included
in the index and the index options are based on a broad market index. In
connection with the use of such options, the Fund may cover its position by
identifying assets having a value equal to the aggregate face value of the
option position taken.
Options on Futures Contracts. An option on a futures contract gives the
purchaser the right, in return for the premium paid, to assume a position in a
futures contract (a long position if the option is a call and a short position
if the option is a put) at a specified exercise price at any time during the
period of the option.
Limitations and Risks of Options and Futures Activity. The Fund may not
establish a position in a commodity futures contract or purchase or sell a
commodity option contract for other than bona fide hedging purposes if
immediately thereafter the sum of the amount of initial margin deposits and
premiums required to establish such positions for such nonhedging purposes would
exceed 5% of the market value of the Fund's net assets. The Fund applies a
similar policy to options that are not commodities.
As noted above, the Fund may engage in both hedging and nonhedging
strategies. Although effective hedging can generally capture the bulk of a
desired risk adjustment, no hedge is completely effective. The Fund's ability to
hedge effectively through transactions in futures and options depends on the
degree to which price movements in its holdings correlate with price movements
of the futures and options.
Nonhedging strategies typically involve special risks. The
profitability of the Fund's nonhedging strategies will depend on the ability of
the Investment Manager to analyze both the applicable derivatives market and the
market for the underlying asset or group of assets. Derivatives markets are
often more volatile than corresponding securities markets and a relatively small
change in the price of the underlying asset or group of assets can have a
magnified effect upon the price of a related derivative instrument.
Derivatives markets also are often less liquid than the market for the
underlying asset or group of assets. Some positions in futures and options may
be closed out only on an exchange which provides a secondary market therefor.
There can be no assurance that a liquid secondary market will exist for any
particular futures contract or option at any specific time.
7
<PAGE>
Thus, it may not be possible to close such an option or futures position prior
to maturity. The inability to close options and futures positions also could
have an adverse impact on the Fund's ability to effectively carry out their
derivative strategies and might, in some cases, require a Fund to deposit cash
to meet applicable margin requirements. The Fund will enter into an option or
futures position only if it appears to be a liquid investment.
Swaps. The Fund may enter into various forms of swap arrangements with
counterparties with respect to interest rates, currency rates or indices,
including purchase of caps, floors and collars as described below. In an
interest rate swap the Fund could agree for a specified period to pay a bank or
investment banker the floating rate of interest on a so-called notional
principal amount (i.e., an assumed figure selected by the parties for this
purpose) in exchange for agreement by the bank or investment banker to pay the
Fund a fixed rate of interest on the notional principal amount. In a currency
swap the Fund would agree with the other party to exchange cash flows based on
the relative differences in values of a notional amount of two (or more)
currencies; in an index swap, the Fund would agree to exchange cash flows on a
notional amount based on changes in the values of the selected indices. Purchase
of a cap entitles the purchaser to receive payments from the seller on a
notional amount to the extent that the selected index exceeds an agreed upon
interest rate or amount whereas purchase of a floor entitles the purchaser to
receive such payments to the extent the selected index falls below an agreed
upon interest rate or amount. A collar combines a cap and a floor.
The Fund may enter credit protection swap arrangements involving the
sale by the Fund of a put option on a debt security which is exercisable by the
buyer upon certain events, such as a default by the referenced creditor on the
underlying debt or a bankruptcy event of the creditor.
Most swaps entered into by the Fund will be on a net basis; for
example, in an interest rate swap, amounts generated by application of the fixed
rate and the floating rate to the notional principal amount would first offset
one another, with the Fund either receiving or paying the difference between
such amounts. In order to be in a position to meet any obligations resulting
from swaps, the Fund will set up a segregated custodial account to hold
appropriate liquid assets, including cash; for swaps entered into on a net
basis, assets will be segregated having a daily net asset value equal to any
excess of the Fund's accrued obligations over the accrued obligations of the
other party, while for swaps on other than a net basis assets will be segregated
having a value equal to the total amount of the Fund's obligations.
These arrangements will be made primarily for hedging purposes, to
preserve the return on an investment or on a portion of the Fund's portfolio.
However, the Fund may, as noted above, enter into such arrangements for income
purposes to the extent permitted by the Commodities Futures Trading Commission
for entities which are not commodity pool operators, such as the Fund. In
entering a swap arrangement, the Fund is dependent upon the creditworthiness and
good faith of the counterparty. The Fund attempts to reduce the risks of
nonperformance by the counterparty by dealing only with established, reputable
institutions. The swap market is still relatively new and emerging; positions in
swap arrangements may
8
<PAGE>
become illiquid to the extent that nonstandard arrangements with one
counterparty are not readily transferable to another counterparty or if a market
for the transfer of swap positions does not develop. The use of interest rate
swaps is a highly specialized activity which involves investment techniques and
risks different from those associated with ordinary portfolio securities
transactions. If the Investment Manager is incorrect in its forecasts of market
values, interest rates and other applicable factors, the investment performance
of the Fund would diminish compared with what it would have been if these
investment techniques were not used. Moreover, even if the Investment Manager is
correct in its forecasts, there is a risk that the swap position may correlate
imperfectly with the price of the asset or liability being hedged.
Currency Transactions
The Fund may engage in currency exchange transactions in order to
protect against the effect of uncertain future exchange rates on securities
denominated in foreign currencies. The Fund will conduct its currency exchange
transactions either on a spot (i.e., cash) basis at the rate prevailing in the
currency exchange market, or by entering into forward contracts to purchase or
sell currencies. The Fund's dealings in forward currency exchange contracts will
be limited to hedging involving either specific transactions or aggregate
portfolio positions. A forward currency contract involves an obligation to
purchase or sell a specific currency at a future date, which may be any fixed
number of days from the date of the contract agreed upon by the parties, at a
price set at the time of the contract. These contracts are not commodities and
are entered into in the interbank market conducted directly between currency
traders (usually large commercial banks) and their customers. In entering a
forward currency contract, the Fund is dependent upon the creditworthiness and
good faith of the counterparty. The Fund attempts to reduce the risks of
nonperformance by the counterparty by dealing only with established, reputable
institutions. Although spot and forward contracts will be used primarily to
protect the Fund from adverse currency movements, they also involve the risk
that anticipated currency movements will not be accurately predicted, which may
result in losses to the Fund. This method of protecting the value of the Fund's
portfolio securities against a decline in the value of a currency does not
eliminate fluctuations in the underlying prices of the securities. It simply
establishes a rate of exchange that can be achieved at some future point in
time. Although such contracts tend to minimize the risk of loss due to a decline
in the value of hedged currency, they tend to limit any potential gain that
might result should the value of such currency increase.
Repurchase Agreements
The Fund may enter into repurchase agreements. Repurchase agreements
occur when the Fund acquires a security and the seller, which may be either (i)
a primary dealer in U.S. Government securities or (ii) an FDIC-insured bank
having gross assets in excess of $500 million, simultaneously commits to
repurchase it at an agreed-upon price on an agreed-upon date within a specified
number of days (usually not more than seven) from the date of purchase. The
repurchase price reflects the purchase price plus an agreed-upon market rate of
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<PAGE>
interest which is unrelated to the coupon rate or maturity of the acquired
security. The Fund will only enter into repurchase agreements involving U.S.
Government securities. Repurchase agreements could involve certain risks in the
event of default or insolvency of the other party, including possible delays or
restrictions upon the Fund's ability to dispose of the underlying securities.
Repurchase agreements will be limited to 30% of the Fund's net assets, except
that repurchase agreements extending for more than seven days when combined with
any other illiquid securities held by the Fund will be limited to 15% of the
Fund's net assets.
Reverse Repurchase Agreements
The Fund may enter into reverse repurchase agreements. However, the
Fund may not engage in reverse repurchase agreements in excess of 5% of the
Fund's total assets. In a reverse repurchase agreement the Fund transfers
possession of a portfolio instrument to another person, such as a financial
institution, broker or dealer, in return for a percentage of the instrument's
market value in cash, and agrees that on a stipulated date in the future the
Fund will repurchase the portfolio instrument by remitting the original
consideration plus interest at an agreed-upon rate. The ability to use reverse
repurchase agreements may enable, but does not ensure the ability of, the Fund
to avoid selling portfolio instruments at a time when a sale may be deemed to be
disadvantageous.
When effecting reverse repurchase agreements, assets of the Fund in a
dollar amount sufficient to make payment of the obligations to be purchased are
segregated on the Fund's records at the trade date and maintained until the
transaction is settled.
When-Issued Securities
The Fund may purchase "when-issued" securities, which are traded on a
price or yield basis prior to actual issuance. Such purchases will be made only
to achieve the Fund's investment objective and not for leverage. The when-issued
trading period generally lasts from a few days to months, or over a year or
more; during this period dividends or interest on the securities are not
payable. A frequent form of when-issued trading occurs when corporate securities
to be created by a merger of companies are traded prior to the actual
consummation of the merger. Such transactions may involve a risk of loss if the
value of the securities falls below the price committed to prior to actual
issuance. The Trust's custodian will establish a segregated account when the
Fund purchases securities on a when-issued basis consisting of cash or liquid
securities equal to the amount of the when-issued commitments. Securities
transactions involving delayed deliveries or forward commitments are frequently
characterized as when-issued transactions and are similarly treated by the Fund.
Restricted Securities
It is the Fund's policy not to make an investment in restricted
securities, including restricted securities sold in accordance with Rule 144A
under the Securities Act of 1933 ("Rule 144A Securities") if, as a result, more
than 35% of the Fund's total assets are invested in
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restricted securities, provided not more than 10% of the Fund's total assets are
invested in restricted securities other than Rule 144A Securities.
Securities may be resold pursuant to Rule 144A under certain
circumstances only to qualified institutional buyers as defined in the rule, and
the markets and trading practices for such securities are relatively new and
still developing; depending on the development of such markets, Rule 144A
Securities may be deemed to be liquid as determined by or in accordance with
methods adopted by the Trustees. Under such methods the following factors are
considered, among others: the frequency of trades and quotes for the security,
the number of dealers and potential purchasers in the market, market making
activity, and the nature of the security and marketplace trades. Investments in
Rule 144A Securities could have the effect of increasing the level of the Fund's
illiquidity to the extent that qualified institutional buyers become, for a
time, uninterested in purchasing such securities. Also, the Fund may be
adversely impacted by the subjective valuation of such securities in the absence
of a market for them. Restricted securities that are not resalable under Rule
144A may be subject to risks of illiquidity and subjective valuations to a
greater degree than Rule 144A Securities.
Foreign Investments
The Fund reserves the right to invest without limitation in securities
of non-U.S. issuers directly, or indirectly in the form of American Depositary
Receipts ("ADRs") and European Depositary Receipts ("EDRs"). Under current
policy, however, the Fund limits such investments, including ADRs and EDRs, to a
maximum of 35% of its total assets.
ADRs are receipts, typically issued by a U.S. bank or trust company,
which evidence ownership of underlying securities issued by a foreign
corporation or other entity. EDRs are receipts issued in Europe which evidence a
similar ownership arrangement. Generally, ADRs in registered form are designed
for use in U.S. securities markets and EDRs are designed for use in European
securities markets. The underlying securities are not always denominated in the
same currency as the ADRs or EDRs. Although investment in the form of ADRs or
EDRs facilitates trading in foreign securities, it does not mitigate all the
risks associated with investing in foreign securities.
ADRs are available through facilities which may be either "sponsored"
or "unsponsored." In a sponsored arrangement, the foreign issuer establishes the
facility, pays some or all of the depository's fees, and usually agrees to
provide shareholder communications. In an unsponsored arrangement, the foreign
issuer is not involved, and the ADR holders pay the fees of the depository.
Sponsored ADRs are generally more advantageous to the ADR holders and the issuer
than are unsponsored ADRs. More and higher fees are generally charged in an
unsponsored program compared to a sponsored facility. Only sponsored ADRs may be
listed on the New York or American Stock Exchanges. Unsponsored ADRs may prove
to be more risky due to (a) the additional costs involved to the Fund; (b) the
relative illiquidity of the issue in U.S. markets; and (c) the possibility of
higher trading costs in the over-the-counter market as opposed to exchange based
tradings. The Fund
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<PAGE>
will take these and other risk considerations into account before making an
investment in an unsponsored ADR.
The risks associated with investments in foreign securities include
those resulting from fluctuations in currency exchange rates, revaluation of
currencies, future political and economic developments, including the risks of
nationalization or expropriation, the possible imposition of currency exchange
blockages, higher operating expenses, foreign withholding and other taxes which
may reduce investment return, reduced availability of public information
concerning issuers, the difficulties in obtaining and enforcing a judgment
against a foreign issuer and the fact that foreign issuers are not generally
subject to uniform accounting, auditing and financial reporting standards or to
other regulatory practices and requirements comparable to those applicable to
domestic issuers. Moreover, securities of many foreign issuers may be less
liquid and their prices more volatile than those of securities of comparable
domestic issuers.
These risks are usually higher in less-developed countries. Such
countries include countries that have an emerging stock market that trades a
small number of securities and/or countries with economies that are based on
only a few industries. The Fund may invest in the securities of issuers in
countries with less developed economies as deemed appropriate by the Investment
Manager. However, it is anticipated that a majority of the foreign investments
by the Fund will consist of securities of issuers in countries with developed
economies.
Securities Lending
The Fund may lend portfolio securities with a value of up to 33-1/3% of
its total assets. The Fund will receive cash or cash equivalents (e.g., U.S.
Government obligations) as collateral in an amount equal to at least 100% of the
current market value of any loaned securities plus accrued interest. Collateral
received by the Fund will generally be held in the form tendered, although cash
may be invested in unaffiliated mutual funds with quality short-term portfolios,
securities issued or guaranteed by the U.S. Government or its agencies or
instrumentalities or certain unaffiliated mutual funds, irrevocable stand-by
letters of credit issued by a bank, or repurchase agreements, or other similar
investments. 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
Fund's outstanding securities. Such loans may be terminated at any time.
The Fund will retain rights to dividends, interest or other
distributions, on the loaned securities. Voting rights pass with the lending,
although the Fund 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 are made only to
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borrowers which are deemed by the Investment Manager or its agents to be of good
financial standing.
Short-Term Trading
The Fund may engage in short-term trading of securities and reserves
full freedom with respect to portfolio turnover. In periods where there are
rapid changes in economic conditions and security price levels or when
reinvestment strategy changes significantly, portfolio turnover may be higher
than during times of economic and market price stability or when investment
strategy remains relatively constant. The Fund's portfolio turnover rate may
involve greater transaction costs, relative to other funds in general, and may
have tax and other consequences.
Temporary and Defensive Investments
The Fund may hold up to 100% of its assets in cash or short-term debt
securities for temporary defensive purposes. The Fund will adopt a temporary
defensive position when, in the opinion of the Investment Manager, such a
position is more likely to provide protection against adverse market conditions
than adherence to the Fund's other investment policies. The types of short-term
instruments in which the Fund may invest for such purposes include short-term
money market securities, such as repurchase agreements, and securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities,
certificates of deposit, time deposits and bankers' acceptances of certain
qualified financial institutions and corporate commercial paper, which at the
time of purchase are rated at least within the "A" major rating category by
Standard & Poor's Corporation ("S&P") or the "Prime" major rating category by
Moody's Investor's Service, Inc. ("Moody's"), or, if not rated, issued by
companies having an outstanding long-term unsecured debt issued rated at least
within the "A" category by S&P or Moody's.
Industry Classifications
In determining how much of the Fund's portfolio is invested in a given
industry, the following industry classifications are currently used. Securities
issued or guaranteed as to principal or interest by the U.S. Government or its
agencies or instrumentalities or mixed-ownership Government corporations or
sponsored enterprises (including repurchase agreements involving U.S. Government
securities to the extent excludable under relevant regulatory interpretations)
are excluded. Securities issued by foreign governments are also excluded.
Companies engaged in the business of financing may be classified according to
the industries of their parent or sponsor companies or industries that otherwise
most affect such financing companies. Issuers of asset-backed pools will be
classified as separate industries based on the nature of the underlying assets,
such as mortgages and credit card receivables. "Asset-backed-Mortgages" includes
private pools of nongovernment backed mortgages.
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Science &
Basic Industries Consumer Staple Technology
- ---------------- --------------- -----------
Chemical Business Service Aerospace
Diversified Container Computer Software
Electrical Equipment Drug & Service
Forest Products Food & Beverage Electronic
Machinery Hospital Supply Components
Metal & Mining Personal Care Electronic
Railroad Printing & Publishing Equipment
Truckers Tobacco Office Equipment
Utility Energy Consumer Cyclical
- ------- ------ -----------------
Electric Oil Refining & Marketing Airline
Gas Oil Production Automotive
Gas Transmission Oil Service Building
Telephone Hotel & Restaurant
Photography
Recreation
Other Finance Retail Trade
- ----- ------- Textile & Apparel
Trust Certificates-- Bank
Government Related Lending Financial Service
Asset-backed--Mortgages Insurance
Asset-backed--Credit Card
Receivables
Other Investment Limitations
Although the Fund is permitted to borrow up to 10% of its net assets,
the Fund has no present intention to engage in any borrowing except for
temporary purposes and has no intention to borrow for leverage purposes. For
purposes of this restriction, reverse repurchase agreements shall constitute
borrowings subject to the 10% limitation on all borrowing. The Fund will not
purchase any securities for its portfolio while outstanding borrowings exceed 5%
of the Fund's net assets; any borrowing in excess of 5% of its total assets
would be from banks.
DEBT INSTRUMENTS AND PERMITTED CASH INVESTMENTS
The Fund may invest in long-term and short-term debt securities.
Certain debt securities and money market instruments in which the Fund may
invest are described below.
Managing Volatility. In administering the Fund's portfolio, the
Investment Manager attempts to manage volatility in part by managing the
duration and weighted average maturity of the Fund's bond position.
Duration is an indicator of the expected volatility of a bond position
in response to changes in interest rates. In calculating duration, the Fund
measures the average time required to receive all cash flows associated with
those debt securities held in the Fund's portfolio -- representing payments of
principal and interest -- by considering the timing, frequency and amount of
payment expected from each portfolio security. The higher the duration, the
greater the gains and losses when interest rates change. Duration generally is a
more accurate measure of potential volatility with a portfolio composed of
high-quality debt securities, such as U.S. government securities, municipal
securities and high-grade U.S. corporate bonds, than with lower-grade
securities.
The Investment Manager may use several methods to manage the duration
of the Fund's bond position in order to increase or decrease its exposure to
changes in interest rates. First, the Investment Manager may adjust portfolio
duration by adjusting the mix of debt securities held by the Fund. For example,
if the Investment Manager intends to shorten duration, it may sell debt
instruments that individually have a long duration and purchase other debt
instruments that individually have a shorter duration. Among the factors that
will affect a debt security's duration are the length of time to maturity, the
timing of interest and principal payments, and whether the terms of the security
give the issuer of the security the right to call the security prior to
maturity. Second, the Investment Manager may adjust bond portfolio duration
using derivative transactions, especially with interest rate futures and options
contracts. For example, if the Investment Manager wants to lengthen the duration
of the Fund's bond position, it could purchase interest rate futures contracts
instead of buying longer-term bonds or selling shorter-term bonds. Similarly,
during periods of lower interest rate volatility, the Investment Manager may use
a technique to extend duration in the event rates rise by writing an out-of-the-
money put option and receiving premium income with the expectation that the
option could be exercised. In managing duration, the use of such derivatives may
be faster and more efficient than trading specific portfolio securities.
Weighted average maturity is another indicator of potential volatility
used by the Investment Manager with respect to the Fund's bond portfolio,
although for certain types of debt securities, such as high quality debt
securities, it is not as accurate as duration in quantifying potential
volatility. Weighted average maturity is the average of all maturities of the
individual debt securities held by the Fund, weighted by the market value of
each security. Generally, the longer the weighted average maturity, the more
bond prices will vary in response to changes in interest rates.
U.S. Government and Related Securities. U.S. Government securities are
securities which are issued or guaranteed as to principal or interest by the
U.S. Government, a U.S. Government agency or instrumentality, or certain
mixed-ownership Government corporations
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<PAGE>
as described herein. The U.S. Government securities in which the Fund invests
include, among others:
[bullet] direct obligations of the U.S. Treasury, i.e., U.S. Treasury bills,
notes, certificates and bonds;
[bullet] obligations of U.S. Government agencies or instrumentalities, such as
the Federal Home Loan Banks, the Federal Farm Credit Banks, the Federal
National Mortgage Association, the Government National Mortgage
Association and the Federal Home Loan Mortgage Corporation; and
[bullet] obligations of mixed-ownership Government corporations such as
Resolution Funding Corporation.
U.S. Government securities which the Fund may buy are backed in a
variety of ways by the U.S. Government, its agencies or instrumentalities. Some
of these obligations, such as Government National Mortgage Association
mortgage-backed securities, are backed by the full faith and credit of the U.S.
Treasury. Other obligations, such as those of the Federal National Mortgage
Association, are backed by the discretionary authority of the U.S. Government to
purchase certain obligations of agencies or instrumentalities, although the U.S.
Government has no legal obligation to do so. Obligations such as those of the
Federal Home Loan Banks, the Federal Farm Credit Banks, the Federal National
Mortgage Association and the Federal Home Loan Mortgage Corporation are backed
by the credit of the agency or instrumentality issuing the obligations. Certain
obligations of Resolution Funding Corporation, a mixed-ownership Government
corporation, are backed with respect to interest payments by the U.S. Treasury,
and with respect to principal payments by U.S. Treasury obligations held in a
segregated account with a Federal Reserve Bank. Except for certain
mortgage-related securities, the Fund will only invest in obligations issued by
mixed-ownership Government corporations where such securities are guaranteed as
to payment of principal or interest by the U.S. Government or a U.S. Government
agency or instrumentality, and any unguaranteed principal or interest is
otherwise supported by U.S. Government obligations held in a segregated account.
U.S. Government securities may be acquired by the Fund in the form of
separately traded principal and interest components of securities issued or
guaranteed by the U.S. Treasury. The principal and interest components of
selected securities are traded independently under the Separate Trading of
Registered Interest and Principal of Securities ("STRIPS") program. Under the
STRIPS program, the principal and interest components are individually numbered
and separately issued by the U.S. Treasury at the request of depository
financial institutions, which then trade the component parts independently.
Obligations of Resolution Funding Corporation are similarly divided into
principal and interest components and maintained as such on the book entry
records of the Federal Reserve Banks.
15
<PAGE>
In addition, the Fund may invest in custodial receipts that evidence
ownership of future interest payments, principal payments or both on certain
U.S. Treasury notes or bonds in connection with programs sponsored by banks and
brokerage firms. Such notes and bonds are held in custody by a bank on behalf of
the owners of the receipts. These custodial receipts are known by various names,
including "Treasury Receipts" ("TRs"), "Treasury Investment Growth Receipts"
("TIGRs") and "Certificates of Accrual on Treasury Securities" ("CATS"), and may
not be deemed U.S. Government securities.
The Fund may also invest from time to time in collective investment
vehicles, the assets of which consist principally of U.S. Government securities
or other assets substantially collateralized or supported by such securities,
such as Government trust certificates.
Bank Money Investments. Bank money investments include, but are not
limited to, certificates of deposit, bankers' acceptances and time deposits.
Certificates of deposit are generally short-term (i.e., less than one year),
interest-bearing negotiable certificates issued by commercial banks or savings
and loan associations against funds deposited in the issuing institution. A
banker's acceptance is a time draft drawn on a commercial bank by a borrower,
usually in connection with an international commercial transaction (to finance
the import, export, transfer or storage of goods). A banker's acceptance may be
obtained from a domestic or foreign bank, including a U.S. branch or agency of a
foreign bank. The borrower is liable for payment as well as the bank, which
unconditionally guarantees to pay the draft at its face amount on the maturity
date. Most acceptances have maturities of six months or less and are traded in
secondary markets prior to maturity. Time deposits are nonnegotiable deposits
for a fixed period of time at a stated interest rate. The Fund will not invest
in any such bank money investment unless the investment is issued by a U.S. bank
that is a member of the Federal Deposit Insurance Corporation ("FDIC"),
including any foreign branch thereof, a U.S. branch or agency of a foreign bank,
a foreign branch of a foreign bank, or a savings bank or savings and loan
association that is a member of the FDIC and which at the date of investment has
capital, surplus and undivided profits (as of the date of its most recently
published financial statements) in excess of $50 million. The Fund will not
invest in time deposits maturing in more than seven days and will not invest
more than 10% of its total assets in time deposits maturing in two to seven
days.
U.S. branches and agencies of foreign banks are offices of foreign
banks and are not separately incorporated entities. They are chartered and
regulated either federally or under state law. U.S. federal branches or agencies
of foreign banks are chartered and regulated by the Comptroller of the Currency,
while state branches and agencies are chartered and regulated by authorities of
the respective states or the District of Columbia. U.S. branches of foreign
banks may accept deposits and thus are eligible for FDIC insurance; however, not
all such branches elect FDIC insurance. Unlike U.S. branches of foreign banks,
U.S. agencies of foreign banks may not accept deposits and thus are not eligible
for FDIC insurance. Both branches and agencies can maintain credit balances,
which are funds received by the office incidental to or arising out of the
exercise of their banking powers and can exercise other commercial functions,
such as lending activities.
16
<PAGE>
Short-Term Corporate Debt Instruments. Short-term corporate debt
instruments include commercial paper to finance short-term credit needs (i.e.,
short-term, unsecured promissory notes) issued by corporations including but not
limited to (a) domestic or foreign bank holding companies or (b) their
subsidiaries or affiliates where the debt instrument is guaranteed by the bank
holding company or an affiliated bank or where the bank holding company or the
affiliated bank is unconditionally liable for the debt instrument. Commercial
paper is usually sold on a discounted basis and has a maturity at the time of
issuance not exceeding nine months.
Commercial Paper Ratings. Commercial paper investments at the time of
purchase will be rated within the "A" major rating category by S&P or within the
"Prime" major rating category by Moody's, or, if not rated, issued by companies
having an outstanding long-term unsecured debt issue rated at least within the
"A" category by S&P or by Moody's. The money market investments in corporate
bonds and debentures (which must have maturities at the date of settlement of
one year or less) must be rated at the time of purchase at least within the "A"
category by S&P or within the "Prime" category by Moody's.
Commercial paper rated within the "A" category (highest quality) by S&P
is issued by entities which have liquidity ratios which are adequate to meet
cash requirements. Long-term senior debt is rated within the "A" category or
better, although in some cases credits within the "BBB" category may be allowed.
The issuer has access to at least two additional channels of borrowing. Basic
earnings and cash flow have an upward trend with allowance made for unusual
circumstances. Typically, the issuer's industry is well established and the
issuer has a strong position within the industry. The reliability and quality of
management are unquestioned. The relative strength or weakness of the above
factors determines whether the issuer's commercial paper is rated A-1, A-2 or
A-3. (Those A-1 issues determined to possess overwhelming safety characteristics
are denoted with a plus (+) sign: A-1+.)
The rating Prime is the highest commercial paper rating category
assigned by Moody's. Among the factors considered by Moody's in assigning
ratings are the following: evaluation of the management of the issuer; economic
evaluation of the issuer's industry or industries and an appraisal of
speculative-type risks which may be inherent in certain areas; evaluation of the
issuer's products in relation to competition and customer acceptance; liquidity;
amount and quality of long-term debt; trend of earnings over a period of 10
years; financial management of obligations which may be present or may arise as
a result of public interest questions and preparations to meet such obligations.
These factors are all considered in determining whether the commercial paper is
rated Prime-1, Prime-2 or Prime-3.
In the event the lowering of ratings of debt instruments held by the
Fund by applicable rating agencies results in a material decline in the overall
quality of the Fund's portfolio, the Trustees of the Trust will review the
situation and take such action as they deem in the best interests of the Fund's
shareholders, including, if necessary, changing the composition of the
portfolio.
17
<PAGE>
Rating Categories of Debt Securities. Set forth below is a description
of S&P corporate bond and debenture rating categories for securities which are
deemed to be investment grade:
AAA: Debt rated AAA has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA: Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small degree.
A: Debt rated A has a strong capacity to pay interest and repay
principal, although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher rated
categories.
BBB: Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
Plus (+) or Minus (-): The ratings from AA to BBB may be modified by
the addition of a plus or minus sign to show relative standing within the major
rating categories.
S&P may attach the "r" symbol to derivative, hybrid, and certain other
obligations that S&P believes may experience high volatility or high variability
in expected returns due to noncredit risks created by the terms of the
obligation, such as securities whose principal or interest return is indexed to
equities, commodities, or currencies; certain swaps and options; and interest
only (IO) and principal only (PO) mortgage securities.
Set forth below is a description of Moody's corporate bond and
debenture ratings for securities which are deemed to be investment grade:
Aaa: Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt-edge." Interest payments are protected by a large or by an
exceptionally stable margin, and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally know as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger then in Aaa securities.
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<PAGE>
A: Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Baa: Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present, but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
1, 2, or 3: The ratings from Aa through Baa may be modified by the
addition of a numeral indicating a bond's rank within its major rating category.
THE TRUST, THE FUND AND ITS SHARES
State Street Research Master Investment Trust is currently comprised of
only one series: State Street Research Investment Trust. The Trustees of the
Trust have authority to issue an unlimited number of shares of beneficial
interest of separate series, $.001 par value per share. The Trustees also have
authority, without the necessity of a shareholder vote, to create any number of
new series or classes or to commence the public offering of shares of any
previously established series or classes. A "series" is a separate pool of
assets of the Trust which is separately managed and has a different investment
objective and different investment policies from those of another series.
The Trustees have authorized shares of the Fund to be issued in four
classes: Class A, Class B, Class C and Class S shares. Prior to November 1,
1997, the Fund's current Class C shares were designated as Class D shares and
the Fund's current Class S shares were designated as Class C shares.
Each share of each class of shares represents an identical legal
interest in the same portfolio of investments of the Fund, has the same rights
and is identical in all respects, except that Class A, Class B and Class C
shares bear the expenses of the deferred sales arrangement and any expenses
(including the higher service and distribution fees) resulting from such sales
arrangement, and certain other incremental expenses related to a class. Each
class will have exclusive voting rights with respect to provisions of the Rule
12b-1 distribution plan pursuant to which the service and distribution fees, if
any, are paid. Although the legal rights of holders of each class of shares are
identical, it is likely that the different expenses borne by each class will
result in different net asset values and dividends. The different classes of
shares of the Fund also have different exchange privileges. Except for those
differences between classes of shares described above, in the Fund's Prospectus
and otherwise this Statement of Additional Information, each share of the Fund
has equal dividend, redemption
19
<PAGE>
and liquidation rights with other shares of the Fund, and when issued, is fully
paid and nonassessable by the Fund.
The rights of holders of shares may be modified by the Trustees at any
time, so long as such modifications do not have a material, adverse effect on
the rights of any shareholder. On any matter submitted to the shareholders, the
holder of a Fund share is entitled to one vote per share (with proportionate
voting for fractional shares) regardless of the relative net asset value
thereof.
Under the Master Trust Agreement, no annual or regular meeting of
shareholders is required. Thus, there ordinarily will be no shareholder meetings
unless required by the 1940 Act. Except as otherwise provided under the 1940
Act, the Board of Trustees will be a self-perpetuating body until fewer than
two-thirds of the Trustees serving as such are Trustees who were elected by
shareholders of the Trust. In the event less than a majority of the Trustees
serving as such were elected by shareholders of the Trust, a meeting of
shareholders will be called to elect Trustees. Under the Master Trust Agreement,
any Trustee may be removed by vote of two-thirds of the outstanding Trust
shares; holders of 10% or more of the outstanding shares of the Trust can
require that the Trustees call a meeting of shareholders for purposes of voting
on the removal of one or more Trustees. In connection with such meetings called
by shareholders, shareholders will be assisted in shareholder communications to
the extent required by applicable law.
Under Massachusetts law, the shareholders of the Trust could, under
certain circumstances, be held personally liable for the obligations for the
Trust. However, the Master Trust Agreement of the Trust disclaims shareholder
liability for acts or obligations of the Trust and provides for indemnification
for all losses and expenses of any shareholder of the Fund held personally
liable for the obligations of the Trust. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which the Fund would be unable to meet its obligations. The
Investment Manager believes that, in view of the above, the risk of personal
liability to shareholders is remote.
TRUSTEES AND OFFICERS
The Trustees and principal officers of the Trust, their addresses, and
their principal occupations and positions with certain affiliates of the
Investment Manager are set forth below.
*+Peter C. Bennett, One Financial Center, Boston, MA 02111, serves as
Vice President of the Trust. He is 59. His principal occupation is currently,
and during the past five years has been, Executive Vice President of State
Street Research & Management Company. Mr. Bennett is also a Director of State
Street Research & Management Company. Mr. Bennett's other principal business
affiliations include Director, State Street Research
- -------------------
* or +, see footnotes on page 23.
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<PAGE>
Investment Services, Inc. and Executive Vice President, GFM International
Investors Limited, Inc.
+Steve A. Garban, The Pennsylvania State University, 210 Old Main,
University Park, PA 16802, serves as Trustee of the Trust. He is 60. He is
retired and was formerly Senior Vice President for Finance and Operations and
Treasurer of The Pennsylvania State University.
+Malcolm T. Hopkins, 14 Brookside Road, Biltmore Forest, Asheville, NC
28803, serves as Trustee of the Trust. He is 70. He is engaged principally in
private investments. Previously, he was Vice Chairman of the Board and Chief
Financial Officer of St. Regis Corp.
+Edward M. Lamont, Box 1234, Moores Hill Road, Syosset, NY 11791,
serves as Trustee of the Trust. He is 71. He is engaged principally in private
investments and civic affairs and is an author of business history. Previously,
he was with an affiliate of J.P. Morgan & Co. in New York.
+Robert A. Lawrence, 175 Federal Street, Boston, MA 02110, serves as
Trustee of the Trust. He is 71. He is retired and was formerly a Partner in
Saltonstall & Co., a private investment firm.
*+Gerard P. Maus, One Financial Center, Boston, MA 02111, serves as
Treasurer of the Trust. He is 47. His principal occupation is currently, and
during the past five years has been, Executive Vice President, Treasurer, Chief
Financial Officer and Director of State Street Research & Management 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. and Executive Vice President, Chief Financial
Officer, Administrative Officer and Director, GFM International Investors,
Inc.
*+Francis J. McNamara, III, One Financial Center, Boston, MA 02111,
serves as Secretary and General Counsel of the Trust. He is 42. His principal
occupation is Executive Vice President, General Counsel and Secretary of State
Street Research & Management Company. During the past five years he has also
served as Senior Vice President of State Street Research & Management Company
and as Senior Vice President, General Counsel and Assistant Secretary 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 Executive Vice President, Clerk and General Counsel of State Street
Research Investment Services, Inc. and Executive Vice President and General
Counsel, GFM International Investors, Inc.
- -------------------
* or +, see footnotes on page 23.
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<PAGE>
+Dean O. Morton, 3200 Hillview Avenue, Palo Alto, CA 94304, serves as
Trustee of the Trust. He is 66. He is retired, having served during the past
five years, until October 1992, as Executive Vice President, Chief Operating
Officer and Director of Hewlett-Packard Company.
+Toby Rosenblatt, 3409 Pacific Avenue, San Francisco, CA 94118, serves
as Trustee of the Trust. He is 59. His 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.
+Michael S. Scott Morton, Massachusetts Institute of Technology, 77
Massachusetts Avenue, Cambridge, MA 02139, serves as Trustee of the Trust. He is
60. His principal occupation during the past five years has been Jay W.
Forrester Professor of Management at Sloan School of Management, Massachusetts
Institute of Technology.
*+Ralph F. Verni, One Financial Center, Boston, MA 02111, serves as
Chairman of the Board, President, Chief Executive Officer and Trustee of the
Trust. He is 55. His principal occupation is currently, and during the past five
years has been, Chairman of the Board, President, Chief Executive Officer and
Director of State Street Research & Management 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 of that company) and Chairman
of the Board, President, and Chief Executive Officer and Director of GFM
International Investors, Inc.
*+Dudley F. Wade, One Financial Center, Boston, MA 02111, serves as
Vice President of the Trust. He is 79. His principal occupation during the past
five years has been Senior Vice President of State Street Research & Management
Company.
*+James M. Weiss, One Financial Center, Boston, MA 02111, serves as
Vice President of the Trust. He is 51. His principal occupation is Senior Vice
President of State Street Research & Management Company. During the past five
years he has also served as President and Chief Investment Officer of IDS
Advisory Group, Inc.
- -------------------
* or +, see footnotes on page 23.
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<PAGE>
*+John T. Wilson, One Financial Center, Boston, MA 02111, serves as
Vice President of the Trust. He is 34. His principal occupation is Vice
President of State Street Research & Management Company. 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 Trustees and/or officers are or may be deemed to be "interested
persons" of the Trust under the 1940 Act because of their affiliations with
the Fund's investment adviser.
+ Serves as a Trustee/Director and/or officer of one or more of the following
investment companies, each of which has an advisory relationship with the
Investment Manager or its parent, Metropolitan Life Insurance Company
("Metropolitan"): State Street Research Equity Trust, State Street Research
Financial Trust, State Street Research Income Trust, State Street Research
Money Market Trust, State Street Research Tax-Exempt Trust, State Street
Research Capital Trust, State Street Research Exchange Trust, State Street
Research Growth Trust, State Street Research Master Investment Trust, State
Street Research Securities Trust, State Street Research Portfolios, Inc.
and Metropolitan Series Fund, Inc.
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<PAGE>
As of January 31, 1998, the Trustees and principal officers of the
Trust owned as a group less than 1% of the outstanding Class A shares of the
Fund and approximately ____% of the outstanding Class S shares of the Fund. They
owned none of the Fund's outstanding Class B or Class C shares.
Record ownership of shares of the Fund as of January 31, 1998 was as
follows:
Class Holder % of Class
- ----- ------ ----------
B Merrill Lynch 8.2
C(a) Merrill Lynch 44.6
The full name and address of the above person or institution is:
Merrill Lynch, Pierce, Fenner & Smith Incorporated (b)
4800 Deerlake Drive East
Jacksonville, FL 32246
Ownership of 25% or more of a voting security is deemed "control," as
defined in the 1940 Act. So long as 25% of a class of shares is so owned, such
owners will be presumed to be in control of such class of shares for purposes of
voting on certain matters submitted to a vote of shareholders, such as any
Distribution Plan for a given class.
- -------------------
(a) Prior to November 1, 1997, the Fund's current Class C shares were
designated as Class D shares and the Fund's current Class S shares were
designated as Class C shares.
(b) The Fund believes that each named recordholder does not have beneficial
ownership of such shares.
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<PAGE>
The Trustees were compensated as follows:
Total
Compensation
Aggregate From Trust and
Name of Compensation Complex Paid
Trustee From Trust(a) to Trustees (b)
- ------- ------------- ---------------
Steven A. Garban $1,467 $
Malcolm T. Hopkins $1,467 $
Edward M. Lamont $4,000 $
Robert A. Lawrence $4,100 $
Dean O. Morton $4,300 $
Toby Rosenblatt $4,000 $
Michael S. Scott Morton $4,600 $
Ralph F. Verni $ 0 $
(a) For the Fund's fiscal year ended December 31, 1997. See "The Trust, the
Fund and its Shares" in this Statement of Additional Information for a
listing of series.
(b) Includes compensation received on behalf of all series of 12 investment
companies for which the Investment Manager or its parent, Metropolitan,
served as investment adviser. "Total Compensation from Trust and Complex
Paid to Trustees" for the 12 months ended December 31, 1997. The Trust does
not provide any pension or retirement benefits for the Trustees.
INVESTMENT ADVISORY SERVICES
State Street Research & Management Company, the Investment Manager, a
Delaware corporation, with offices at One Financial Center, Boston,
Massachusetts 02111-2690, acts as investment adviser to the Fund. The Investment
Manager was founded by Paul Cabot, Richard Saltonstall and Richard Paine to
serve as investment adviser to the Fund, one of the nation's first mutual funds,
which they had formed in 1924.
Their investment management philosophy emphasized comprehensive
fundamental research and analysis, including meetings with the management of
companies under consideration for investment. The Investment Manager's portfolio
management group has extensive investment industry experience managing equity
and debt securities. In managing debt securities, if any, for a portfolio, the
Investment Manager may consider yield curve positioning, sector rotation and
duration, among other factors.
The Advisory Agreement provides that the Investment Manager shall
furnish the Fund with an investment program, office facilities and such
investment advisory, research and administrative services as may be required
from time to time. The Investment Manager compensates all executive and clerical
personnel and Trustees of the Trust if such persons are
25
<PAGE>
employees of the Investment Manager or its affiliates. The Investment Manager is
an indirect wholly-owned subsidiary of Metropolitan.
The advisory fee payable monthly by the Fund to the Investment Manager
is computed as a percentage of the average of the value of the net assets of the
Fund as determined at the close of regular trading on the New York Stock
Exchange (the "NYSE") on each day the NYSE is open for trading, at the annual
rate of 0.41% of the net assets of the Fund until August 18, 1998 and then 0.55%
of the first $500 million of Fund net assets, annually, 0.50% of the next $500
million, and 0.45% of any amount over $1 billion.
The advisory fees paid by the Fund to the Investment Manager for the
last three fiscal years, prior to the assumption of fees or expenses, were as
follows: 1997, $5,717,422; 1996, $3,866,070; and 1995, $3,158,324.
The Advisory Agreement provides that 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 Investment Manager, 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
Investment Manager shall reimburse the Fund for such excess expenses by making a
payment to the Fund in the amount of such excess expenses within 30 days
following the close of such fiscal year.
The Advisory Agreement further provides that it shall remain in effect
from year to year only so long as (i) 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 1940 Act) of the Fund, and (ii) the terms of the Advisory
Agreement are approved at least annually by the vote of a majority of the
Trustees of the Trust, who are not parties to the Advisory Agreement or
"interested persons" of any such party (as such terms are used in Section 15(c)
of the 1940 Act), cast in person at a meeting called for the purpose of voting
on such approval.
The Advisory Agreement 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 1940 Act) of the Fund, or by the Investment Manager, in each
case upon sixty calendar days' prior written notice to the other party to the
Advisory Agreement.
Under a Shareholders' Administrative Services Agreement between the
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 Fund, and is entitled to
reimbursements of its costs for providing such services. Under certain
arrangements for Metropolitan to provide subadministration services,
Metropolitan may
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receive a fee for the maintenance of certain share ownership records for
participants in sponsored arrangements, such as employee benefit plans, through
or under which the Fund's shares may be purchased.
Under the Code of Ethics of the Investment Manager, personnel are only
permitted to engage in personal securities transactions in accordance with
certain conditions relating to such person's position, the identity of the
security, the timing of the transaction, and similar factors. Such personnel
must report their personal securities transactions quarterly and supply broker
confirmations of such transactions to the Investment Manager.
PURCHASE AND REDEMPTION OF SHARES
Shares of the Fund are distributed by State Street Research Investment
Services, Inc., the Distributor. The Fund offers four classes of shares which
may be purchased at the next determined net asset value per share plus, in the
case of all classes except Class S shares, a sales charge which, at the election
of the investor, may be imposed (i) at the time of purchase (the Class A shares)
or (ii) on a deferred basis (the Class B and Class C shares). General
information on how to buy shares of the Fund, as well as sales charges involved,
are set forth under "Your Account" in the Prospectus. The following supplements
that information.
Public Offering Price. The public offering price for each class of
shares is based on their net asset value determined as of the close of regular
trading on the NYSE on the day the purchase order is received by State Street
Research Service Center (the "Service Center"), provided that the order is
received prior to the close of regular trading on the NYSE on that day;
otherwise the net asset value used is that determined as of the close of the
NYSE on the next day it is open for unrestricted trading. When a purchase order
is placed through a dealer, that dealer is responsible for transmitting the
order promptly to the Service Center in order to permit the investor to obtain
the current price. Any loss suffered by an investor which results from a
dealer's failure to transmit an order promptly is a matter for settlement
between the investor and the dealer.
Class A Shares--Reduced Sales Charges. The reduced sales charges set
forth under "Your Account--Class A Sales Charge Reductions and Waivers" in the
Fund's Prospectus apply to purchases made at any one time by any "person," which
includes: (i) an individual, or an individual combining with his or her spouse
and their children and purchasing for his, her or their own account; (ii) a
"company" as defined in Section 2(a)(8) of the 1940 Act; (iii) a trustee or
other fiduciary purchasing for a single trust estate or single fiduciary account
(including a pension, profit sharing or other employee benefit trust created
pursuant to a plan qualified under Section 401 of the Internal Revenue Code);
(iv) a tax-exempt organization under Section 501(c)(3) or (13) of the Internal
Revenue Code; and (v) an employee benefit plan of a single employer or of
affiliated employers.
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Investors may purchase Class A shares of the Fund at reduced sales
charges by executing a Letter of Intent to purchase no less than an aggregate of
$100,000 of the Fund or any combination of Class A shares of "Eligible Funds"
(which include the Fund and other funds as designated by the Distributor from
time to time) within a 13-month period. The sales charge applicable to each
purchase made pursuant to a Letter of Intent will be that which would apply if
the total dollar amount set forth in the Letter of Intent were being bought in a
single transaction. Purchases made within a 90-day period prior to the execution
of a Letter of Intent may be included therein; in such case the date of the
earliest of such purchases marks the commencement of the 13-month period.
An investor may include toward completion of a Letter of Intent the
value (at the current public offering price) of all of his or her Class A shares
of the Fund and of any of the other Class A shares of Eligible Funds held of
record as of the date of his or her Letter of Intent, plus the value (at the
current offering price) as of such date of all of such shares held by any
"person" described herein as eligible to join with the investor in a single
purchase. Class B, Class C and Class S shares may also be included in the
combination under certain circumstances.
A Letter of Intent does not bind the investor to purchase the specified
amount. Shares equivalent to 5% of the specified amount will, however, be taken
from the initial purchase (or, if necessary, subsequent purchases) and held in
escrow in the investor's account as collateral against the higher sales charge
which would apply if the total purchase is not completed within the allotted
time. The escrowed shares will be released when the Letter of Intent is
completed or, if it is not completed, when the balance of the higher sales
charge is, upon notice, remitted by the investor. All dividends and capital
gains distributions with respect to the escrowed shares will be credited to the
investor's account.
Investors may purchase Class A shares of the Fund or a combination of
Eligible Funds at reduced sales charges pursuant to a Right of Accumulation. The
applicable sales charge under the right is determined on the amount arrived at
by combining the dollar amount of the purchase with the value (at the current
public offering price) of all Class A shares of the other Eligible Funds owned
as of the purchase date by the investor plus the value (at the current public
offering price) of all such shares owned as of such date by any "person"
described herein as eligible to join with the investor in a single purchase.
Class B, Class C and Class S shares may also be included in the combination
under certain circumstances. Investors must submit to the Distributor sufficient
information to show that they qualify for this Right of Accumulation.
Other Programs Related to Class A Shares. Class A shares of the Fund
may be sold or issued in an exchange at a reduced sales charge or without sales
charge pursuant to certain sponsored arrangements, which include programs under
which a company, employee benefit plan or other organization makes
recommendations to, or permits group solicitation of, its employees, members or
participants, except any organization created primarily for the purpose of
obtaining shares of the Fund at a reduced sales charge or without a sales
charge. Sales
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<PAGE>
without a sales charge, or with a reduced sales charge, may also be made through
brokers, registered investment advisers, financial planners, institutions, and
others, under managed fee-based programs (e.g., "wrap fee" or similar programs)
which meet certain requirements established from time to time by the
Distributor. Information on such arrangements and further conditions and
limitations is available from the Distributor.
In addition, no sales charge is imposed in connection with the sale of
Class A shares of the Fund to the following entities and person: (A) the
Investment Manager, Distributor or any affiliated entities, including any direct
or indirect parent companies and other subsidiaries of such parents
(collectively "Affiliated Companies"); (B) employees, officers, sales
representatives or current or retired directors or trustees of the Affiliated
Companies or any investment company managed by any of the Affiliated Companies,
any relatives of any such individuals whose relationship is directly verified by
such individuals to the Distributor, or any beneficial account for such
relatives or individuals; and (C) employees, officers, sales representatives or
directors of dealers and other entities with a selling agreement with the
Distributor to sell shares of any aforementioned investment company, any spouse
or child of such person, or any beneficial account for any of them. The purchase
must be made for investment and the shares purchased may not be resold except
through redemption. This purchase program is subject to such administrative
policies, regarding the qualification of purchasers and any other matters, as
may be adopted by the Distributor from time to time.
Conversion of Class B Shares to Class A Shares. A shareholder's Class B
shares of the Fund, including all shares received as dividends or distributions
with respect to such shares, will automatically convert to Class A shares of the
Fund at the end of eight years following the issuance of such Class B shares;
consequently, they will no longer be subject to the higher expenses borne by
Class B shares. The conversion rate will be determined on the basis of the
relative per share net asset values of the two classes and may result in a
shareholder receiving either a greater or fewer number of Class A shares than
the Class B shares so converted. As noted above, holding periods for Class B
shares received in exchange for Class B shares of other Eligible Funds will be
counted toward the eight-year period.
Contingent Deferred Sales Charges. The amount of any contingent
deferred sales charge paid on Class A shares (on sales of $1 million or more and
which do not involve an initial sales charge) or on Class B or Class C shares of
the Fund will be paid to the Distributor. The Distributor will pay dealers at
the time of sale a 4% commission for selling Class B shares and a 1% commission
for selling Class C shares. In certain cases, a dealer may elect to waive the 4%
commission on Class B shares and receive in lieu thereof a 1% annual fee with
respect to such outstanding shares until the shares convert to Class A shares.
The proceeds of the contingent deferred sales charges and the distribution fees
are used to offset distribution expenses and thereby permit the sale of Class B
and Class C shares without an initial sales charge.
In determining the applicability and rate of any contingent deferred
sales charge of Class B or Class C shares, it will be assumed that a redemption
of the shares is made first of
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<PAGE>
those shares having the greatest capital appreciation, next of shares
representing reinvestment of dividends and capital gains distributions and
finally of remaining shares held by shareholder for the longest period of time.
Class B shares that are redeemed within a five-year period after their purchase,
and Class C shares that are redeemed within a one-year period after their
purchase, will not be subject to a contingent deferred sales charge to the
extent that the value of such shares represents (1) capital appreciation of Fund
assets or (2) reinvestment of dividends or capital gains distributions. The
holding period for purposes of applying a contingent deferred sales charge for a
particular class of shares of the Fund acquired through an exchange from another
Eligible Fund will be measured from the date that such shares were initially
acquired in the other Eligible Fund, and shares of the same class being redeemed
will be considered to represent, as applicable, capital appreciation or dividend
and capital gains distribution reinvestments in such other Eligible Fund. These
determinations will result in any contingent deferred sales charge being imposed
at the lowest possible rate. For federal income tax purposes, the amount of the
contingent deferred sales charge will reduce the gain or increase the loss, as
the case may be, on the amount realized on redemption.
Contingent Deferred Sales Charge Waivers. With respect to Class A
shares (on sales of $1 million or more and which do not involve an initial sales
charge), and Class B and Class C shares of the Fund, the contingent deferred
sales charge does not apply to exchanges or to redemptions under a systematic
withdrawal plan which meets certain conditions. In addition, the contingent
deferred sales charge will be waived for: (i) redemptions made within one year
of the death or total disability, as defined by the Social Security
Administration, of all shareholders of an account; (ii) redemptions made after
attainment of a specific age in an amount which represents the minimum
distribution required at such age under Section 401(a)(9) of the Internal
Revenue Code of 1986, as amended, for retirement accounts or plans (e.g., age 70
1/2 for Individual Retirement Accounts and Section 403(b) plans), calculated
solely on the basis of assets invested in the Fund or other Eligible Funds; and
(iii) a redemption resulting from a tax-free return of an excess contribution to
an Individual Retirement Account. (The foregoing waivers do not apply to a
tax-free rollover or transfer of assets out of the Fund). The Fund may modify or
terminate the waivers at any time; for example, the Fund may limit the
application of multiple waivers and establish other conditions for employee
benefit plans.
Class S Shares. Class S shares are currently available to certain
employee benefit plans such as qualified retirement plans which meet criteria
relating to number of participants, service arrangements, or similar factors;
insurance companies; investment companies; advisory accounts of the Investment
Manager; endowment funds of nonprofit organizations with substantial minimum
assets (currently a minimum of $10 million); and other similar institutional
investors. Class S shares may be acquired through programs or products sponsored
by Metropolitan, its affiliates, or both for which Class S shares have been
designated. In addition, Class S shares are available through programs under
which, for example, investors pay an asset-based fee and/or a transaction fee to
intermediaries. Class S share availability is determined by the Distributor and
intermediaries based on the overall
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direct and indirect costs of a particular program, expected assets, account
sizes and similar considerations.
Reorganizations. In the event of mergers or reorganizations with other
public or private collective investment entities, including investment companies
as defined in the 1940 Act, the Fund may issue its shares at net asset value (or
more) to such entities or to their security holders.
Redemptions. The Fund reserves the right to pay redemptions in kind
with portfolio securities in lieu of cash. In accordance with its election
pursuant to Rule 18f-1 under the 1940 Act, the Fund may limit the amount of
redemption proceeds paid in cash. Although it has no present intention to do so,
the Fund may, under unusual circumstances, limit redemptions in cash with
respect to each shareholder during any ninety-day period to the lesser of (i)
$250,000 or (ii) 1% of the net asset value of the Fund at the beginning of such
period. In connection with any redemptions paid in kind with portfolio
securities, brokerage and other costs may be incurred by the redeeming
shareholder in the sale of the securities received.
Systematic Withdrawal Plan. A shareholder who owns noncertificated
Class A or Class S shares with a value of $5,000 or more, or Class B or Class C
shares with a value of $10,000 or more, may elect, by participating in the
Fund's Systematic Withdrawal Plan, to have periodic checks issued for specified
amounts. These amounts may not be less than certain minimums, depending on the
class of shares held. The Plan provides that all income dividends and capital
gains distributions of the Fund shall be credited to participating shareholders
in additional shares of the Fund. Thus, the withdrawal amounts paid can only be
realized by redeeming shares of the Fund under the Plan. To the extent such
amounts paid exceed dividends and distributions from the Fund, a shareholder's
investment will decrease and may eventually be exhausted.
In the case of shares otherwise subject to contingent deferred sales
charges, no such charges will be imposed on withdrawals of up to 8% annually of
either (a) the value, at the time the Systematic Withdrawal Plan is initiated,
of the shares then in the account or (b) the value, at the time of a withdrawal,
of the same number of shares as in the account when the Systematic Withdrawal
Plan was initiated, whichever is higher.
Expenses of the Systematic Withdrawal Plan are borne by the Fund. A
participating shareholder may withdraw from the Systematic Withdrawal Plan, and
the Fund may terminate the Systematic Withdrawal Plan at any time on written
notice. Purchase of additional shares while a shareholder is receiving payments
under a Systematic Withdrawal Plan is ordinarily disadvantageous because of
duplicative sales charges. For this reason, a shareholder may not participate in
the Investamatic Program (see "Your Account--Investor Services--Investamatic
Program" in the Fund's Prospectus) and the Systematic Withdrawal Plan at the
same time.
Request to Dealer to Repurchase. For the convenience of shareholders,
the Fund has authorized the Distributor as its agent to accept orders from
dealers by wire or telephone for
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the repurchase of shares by the Distributor from the dealer. The Fund may revoke
or suspend this authorization at any time. The repurchase price is the net asset
value for the applicable shares next determined following the time at which the
shares are offered for repurchase by the dealer to the Distributor. The dealer
is responsible for promptly transmitting a shareholder's order to the
Distributor.
Signature Guarantees. Signature guarantees are required for, among
other things: (1) written requests for redemptions for more than $100,000; (2)
written requests for redemptions for any amount if the proceeds are transmitted
to other than the current address of record (unchanged in the past 30 days); (3)
written requests for redemptions for any amount submitted by corporations and
certain fiduciaries and other intermediaries; and (4) requests to transfer the
registration of shares to another owner. Signatures must be guaranteed by a
bank, a member firm of a national stock exchange, or other eligible guarantor
institution. The Transfer Agent will not accept guarantees (or notarizations)
from notaries public. The above requirements may be waived in certain instances.
Dishonored Checks. If a purchaser's check is not honored for its full
amount, the purchaser could be subject to additional charges to cover collection
costs and any investment loss, and the purchase may be canceled.
Processing Charges. Purchases and redemptions processed through
securities dealers may be subject to processing charges imposed by the
securities dealer in addition to sales charges that may be imposed by the Fund
or the Distributor.
SHAREHOLDER ACCOUNTS
General information on shareholder accounts is included in the Fund's
Prospectus under "Your Account." The following supplements that information.
Maintenance Fees and Involuntary Redemption. Because of the relatively
high cost of maintaining small shareholder accounts, the Fund reserves the right
to redeem at its option any shareholder account which remains below $1,500 for a
period of 60 days after notice is mailed to the applicable shareholder, or to
impose a maintenance fee on such account after 60 days' notice. Such
involuntarily redemptions will be subject to applicable sales charges, if any.
The Fund may increase such minimum account value above such amount in the future
after notice to affected shareholders. Involuntarily redeemed shares will be
priced at the net asset value on the date fixed for redemption by the Fund, and
the proceeds of the redemption will be mailed to the affected shareholder at the
address of record. Currently, the maintenance fee is $18 annually, which is paid
to the Transfer Agent. The fee does not apply to certain retirement accounts or
if the shareholder has more than an aggregate $50,000 invested in the Fund and
other Eligible Funds combined. Imposition of a maintenance fee on a small
account could, over time, exhaust the assets of such account.
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To cover the cost of additional compliance administration, a $20 fee
will be charged against any shareholder account that has been determined to be
subject to escheat under applicable state laws.
The Fund may not suspend the right of redemption or postpone the date
of payment of redemption proceeds for more than seven days, except that (a) it
may elect to suspend the redemption of shares or postpone the date of payment of
redemption proceeds: (1) during any period that the NYSE is closed (other than
customary weekend and holiday closings) or trading on the NYSE is restricted;
(2) during any period in which an emergency exists as a result of which disposal
of portfolio securities is not reasonably practicable or it is not reasonably
practicable to fairly determine the Fund's net asset values; or (3) during such
other periods as the Securities and Exchange Commission (the "SEC") may by order
permit for the protection of investors; and (b) the payment of redemption
proceeds may be postponed as otherwise provided under "Purchase and Redemption
of Shares" in this Statement of Additional Information.
The Open Account System. Under the Open Account System full and
fractional shares of the Fund owned by shareholders are credited to their
accounts by the Transfer Agent, State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110. Certificates representing Class B
or Class C shares will not be issued, while certificates representing Class A or
Class S shares will only be issued if specifically requested in writing and, in
any case, will only be issued for full shares, with any fractional shares to be
carried on the shareholder's account. Shareholders will receive periodic
statements of transactions in their accounts.
The Fund's Open Account System provides the following options:
1. Additional purchases of shares of the Fund may be made through
dealers, by wire or by mailing a check payable to "State Street
Research Funds" under the terms set forth above under "Purchase
and Redemption of Shares" in this Statement of Additional
Information.
2. The following methods of receiving dividends from investment
income and distributions from capital gains generally are
available:
(a) All income dividends and capital gains distributions
reinvested in additional shares of the Fund.
(b) All income dividends and capital gains distributions in
cash.
(c) All income dividends and capital gains distributions
invested in any one available Eligible Fund designated by
the shareholder as described below. See "--Dividend
Allocation Plan" herein.
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Dividend and distribution selections should be made on the Application
accompanying the initial investment. If no selection is indicated on the
Application, that account will be automatically coded for reinvestment of all
dividends and distributions in additional shares of the same class of the Fund.
Selections may be changed at any time by telephone or written notice to the
Service Center. Dividends and distributions are reinvested at net asset value
without a sales charge.
Exchange Privileges. Shareholders of the Fund may exchange their shares
for available shares with corresponding characteristics of any of the other
Eligible Funds at any time on the basis of the relative net asset values of the
respective shares to be exchanged, subject to compliance with applicable
securities laws. Shareholders of any other Eligible Fund may similarly exchange
their shares for Fund shares with corresponding characteristics. Prior to making
an exchange, shareholders should obtain the Prospectus of the Eligible Fund into
which they are exchanging. Under the Direct Program, subject to certain
conditions, shareholders may make arrangements for regular exchanges from the
Fund into other Eligible Funds. To effect an exchange, Class A, Class B and
Class C shares may be redeemed without the payment of any contingent deferred
sales charge that might otherwise be due upon an ordinary redemption of such
shares. The State Street Research Money Market Fund issues Class E shares which
are sold without any sales charge. Exchanges of State Street Research Money
Market Fund Class E shares into Class A shares of the Fund or any other Eligible
Fund are subject to the initial sales charge or contingent deferred sales charge
applicable to an initial investment in such Class A shares, unless a prior Class
A sales charge has been paid directly or indirectly with respect to the shares
redeemed. For purposes of computing the contingent deferred sales charge that
may be payable upon disposition of any acquired Class A, Class B and Class C
shares, the holding period of the redeemed shares is "tacked" to the holding
period of any acquired shares. No exchange transaction fee is currently imposed
on any exchange.
Shares of the Fund may also be acquired or redeemed in exchange for
shares of the Summit Cash Reserves Fund ("Summit Cash Reserves") by customers of
Merrill Lynch, Pierce, Fenner & Smith Incorporated (subject to completion of
steps necessary to implement the program). The Fund and Summit Cash Reserves are
related mutual funds for purposes of investment and investor services. Upon the
acquisition of shares of Summit Cash Reserves by exchange for redeemed shares of
the Fund, (a) no sales charge is imposed by Summit Cash Reserves, (b) no
contingent deferred sales charge is imposed by the Fund on the Fund shares
redeemed, and (c) any applicable holding period of the Fund shares redeemed is
"tolled," that is, the holding period clock stops running pending further
transactions. Upon the acquisition of shares of the Fund by exchange for
redeemed shares of Summit Cash Reserves, (a) the acquisition of Class A shares
shall be subject to the initial sales charges or contingent deferred sales
charges applicable to an initial investment in such Class A shares, unless a
prior Class A sales charge has been paid indirectly, and (b) the acquisition of
Class B or Class C shares of the Fund shall restart any holding period
previously tolled, or shall be subject to the contingent deferred sales charge
applicable to an initial investment in such shares.
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The exchange privilege may be terminated or suspended or its terms
changed at any time, subject, if required under applicable regulations, to 60
days' prior notice. New accounts established for investments upon exchange from
an existing account in another fund will have the same telephone privileges with
respect to the Fund (see "Your Account--Account Policies--Telephone Requests" in
the Fund's Prospectus and "--Telephone Privileges," below) as the existing
account unless the Service Center is instructed otherwise. Related
administrative policies and procedures may also be adopted with regard to a
series of exchanges, street name accounts, sponsored arrangements and other
matters.
The exchange privilege is not designed for use in connection with
short-term trading or market timing strategies. To protect the interests of
shareholders, the Fund reserves the right to temporarily or permanently
terminate the exchange privilege for any person who makes more than six
exchanges out of or into the Fund per calendar year. Accounts under common
ownership or control, including accounts with the same taxpayer identification
number, may be aggregated for purposes of the six exchange limit.
Notwithstanding the six exchange limit, the Fund reserves the right to refuse
exchanges by any person or group if, in the Investment Manager's judgment, the
Fund would be unable to invest effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely affected.
Exchanges may be restricted or refused if the Fund receives or anticipates
simultaneous orders affecting significant portions of the Fund's assets. In
particular, a pattern of exchanges that coincides with a "market timing"
strategy may be disruptive to the Fund. The Fund may impose these restrictions
at any time. The exchange limit may be modified for accounts in certain
institutional retirement plans because of plan exchange limits, Department of
Labor regulations or administrative and other considerations. Subject to the
foregoing, if an exchange request in good order is received by the Service
Center and delivered by the Service Center to the Transfer Agent by 12 noon
Boston time on any business day, the exchange usually will occur that day. For
further information regarding the exchange privilege, shareholders should
contact the Service Center.
Reinvestment Privilege. A shareholder of the Fund who has redeemed
shares or had shares repurchased at his or her request may reinvest all or any
portion of the proceeds (plus that amount necessary to acquire a fractional
share to round off his or her reinvestment to full shares) in shares, of the
same class as the shares redeemed, of the Fund or any other Eligible Fund at net
asset value and without subjecting the reinvestment to an initial sales charge,
provided such reinvestment is made within 120 calendar days after a redemption
or repurchase. Upon such reinvestment, the shareholder will be credited with any
contingent deferred sales charge previously charged with respect to the amount
reinvested. The redemption of shares is, for federal income tax purposes, a sale
on which the shareholder may realize a gain or loss. If a redemption at a loss
is followed by a reinvestment within 30 days, the transaction may be a "wash
sale" resulting in a denial of the loss for federal income tax purposes.
Any reinvestment pursuant to the reinvestment privilege will be subject
to any applicable minimum account standards imposed by the fund into which the
reinvestment is made. Shares are sold to a reinvesting shareholder at the net
asset value thereof next
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determined following timely receipt by the Service Center of such shareholder's
written purchase request and delivery of the request by the Service Center to
the Transfer Agent. A shareholder may exercise this reinvestment privilege only
once per 12-month period with respect to his or her shares of the Fund.
Dividend Allocation Plan. The Dividend Allocation Plan allows
shareholders to elect to have all their dividends and any other distributions
from the Fund or any Eligible Fund automatically invested at net asset value in
one other such Eligible Fund designated by the shareholder, provided the account
into which the dividends and distributions are directed is initially funded with
the requisite minimum amount.
Telephone Privileges. A shareholder with telephone privileges that are
offered with his or her Account (see "Your Account--Account Policies--Telephone
Requests") is deemed to authorize the Service Center and the Transfer Agent to:
(1) act upon the telephone instructions of any person purporting to be the
shareholder or the shareholder's financial professional to redeem or exchange,
shares from any account; and (2) honor any written instructions for a change of
address regardless of whether such request is accompanied by a signature
guarantee. All telephone calls will be recorded. Neither the Fund, the other
Eligible Funds, the Transfer Agent, the Investment Manager nor the Distributor
will be liable for any loss, expense or cost arising out of any request,
including any fraudulent or unauthorized requests. Shareholders assume the risk
to the full extent of their accounts that telephone requests may be
unauthorized. Reasonable procedures will be followed to confirm that
instructions communicated by telephone are genuine. The shareholder will not be
liable for any losses arising from unauthorized or fraudulent instructions if
such procedures are not followed.
Alternative Means of Contacting the Fund. It is unlikely, during
periods of extraordinary market conditions, that a shareholder may have
difficulty in reaching the Service Center. In that event, however, the
shareholder should contact the Service Center at 1-800-562-0032, 1-617-357-7800
or otherwise at its main office at One Financial Center, Boston, Massachusetts
02111-2690.
NET ASSET VALUE
The net asset value of the shares of the Fund is determined once daily
as of the close of regular trading on the NYSE, ordinarily 4 P.M. New York City
time, Monday through Friday, on each day during which the NYSE is open for
unrestricted trading. The NYSE is currently closed on New Year's Day, Martin
Luther King, Jr. Day, Presidents Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day.
The net asset value per share of the Fund is computed by dividing the
sum of the value of the securities held by the Fund plus any cash or other
assets minus all liabilities by the total number of outstanding shares of the
Fund at such time. Any expenses, except for
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<PAGE>
extraordinary or nonrecurring expenses, borne by the Fund, including the
investment management fee payable to the Investment Manager, are accrued daily.
In determining the values of portfolio assets as provided below, the
Trustees utilize one or more pricing services in lieu of market quotations for
certain securities which are not readily available on a daily basis. Such
services utilize information with respect to market transactions, quotations
from dealers and various relationships among securities in determining value and
may provide prices determined as of times prior to the close of the NYSE.
In general, securities are valued as follows. Securities which are
listed or traded on the New York or American Stock Exchange are valued at the
price of the last quoted sale on the respective exchange for that day.
Securities which are listed or traded on a national securities exchange or
exchanges, but not on the New York or American Stock Exchange, are valued at the
price of the last quoted sale on the exchange for that day prior to the close of
the NYSE. Securities not listed on any national securities exchange which are
traded "over the counter" and for which quotations are available on the National
Association of Securities Dealers, Inc.'s (the "NASD") NASDAQ System are valued
at the closing price supplied through such system for that day at the close of
the NYSE. Other securities are, in general, valued at the mean of the bid and
asked quotations last quoted prior to the close of the NYSE if there are market
quotations readily available, or in the absence of such market quotations, then
at the fair value thereof as determined by or under authority of the Trustees of
the Trust with the use of such pricing services as may be deemed appropriate or
methodologies approved by the Trustees.
The Trustees have authorized the use of the amortized cost method to
value short-term debt instruments issued with a maturity of one year or less and
having a remaining maturity of 60 days or less when the value obtained is fair
value, provided that during any period in which more than 25% of the Fund's
total assets is invested in short-term debt securities the current market value
of such securities will be used in calculating net asset value per share in lieu
of the amortized cost method. Under the amortized cost method of valuation, the
security is initially valued at cost on the date of purchase (or in the case of
short-term debt instruments purchased with more than 60 days remaining to
maturity, the market value on the 61st day prior to maturity), and thereafter a
constant amortization to maturity of any discount or premium is assumed
regardless of the impact of fluctuating interest rates on the market value of
the security.
PORTFOLIO TRANSACTIONS
Portfolio Turnover
The Fund's portfolio turnover rate is determined by dividing the lesser
of securities purchases or sales for a year by the monthly average value of
securities held by the Fund (excluding, for purposes of this determination,
securities the maturities of which as of the time
37
<PAGE>
of their acquisition were one year or less). The Fund's portfolio turnover rates
for the fiscal years ended December 31, 1996 and 1997 were 73.51% and 75.21%,
respectively.
Brokerage Allocation
The Investment Manager's policy is to seek for its clients, including
the Fund, what in the Investment Manager's judgment will be the best overall
execution of purchase or sale orders and the most favorable net prices in
securities transactions consistent with its judgment as to the business
qualifications of the various broker or dealer firms with whom the Investment
Manager may do business, and the Investment Manager may not necessarily choose
the broker offering the lowest available commission rate. Decisions with respect
to the market where the transaction is to be completed, to the form of
transaction (whether principal or agency), and to the allocation of orders among
brokers or dealers are made in accordance with this policy. In selecting brokers
or dealers to effect portfolio transactions, consideration is given to their
proven integrity and financial responsibility, their demonstrated execution
experience and capabilities both generally and with respect to particular
markets or securities, the competitiveness of their commission rates in agency
transactions (and their net prices in principal transactions), their willingness
to commit capital, and their clearance and settlement capability. The Investment
Manager makes every effort to keep informed of commission rate structures and
prevalent bid/ask spread characteristics of the markets and securities in which
transactions for the Fund occur. Against this background, the Investment Manager
evaluates the reasonableness of a commission or a net price with respect to a
particular transaction by considering such factors as difficulty of execution or
security positioning by the executing firm. The Investment Manager may or may
not solicit competitive bids based on its judgment of the expected benefit or
harm to the execution process for that transaction.
When it appears that a number of firms could satisfy the required
standards 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. Negotiated commission rates
and prices, however, are based upon the Investment Manager's judgment of the
rate which reflects the execution requirements of the transaction without regard
to whether the broker provides services in addition to execution. Among such
other services are the supplying of supplemental investment research; general
economic, political and business information; analytical and statistical data;
relevant market information, quotation equipment and services; reports and
information about specific companies, industries and securities; purchase and
sale recommendations for stocks and bonds; portfolio strategy services;
historical statistical information; market data services providing information
on specific issues and prices; financial publications; proxy voting data and
analysis services; technical analysis of various aspects of the securities
markets, including technical charts; computer hardware used for brokerage and
research purposes; computer software and databases (including those used for
portfolio analysis and modeling in conjunction with certain trading systems and
including software providing investment personnel with efficient access to
current and historical data from a variety of internal and external sources) and
portfolio evaluation services and relative performance of accounts. Certain of
the 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.
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<PAGE>
In the case of the Fund and other registered investment companies
advised by the Investment Manager or its affiliates, the above services may
include data relating to performance, expenses and fees of those investment
companies and other investment companies; this information is used by the
Trustees or Directors of the investment companies to fulfill their
responsibility to oversee the quality of the Investment Manager's advisory
contracts between the investment companies and the Investment Manager. The
Investment Manager considers these investment company services only in
connection with the execution of transactions on behalf of its investment
company clients and not its other clients.
The Investment Manager regularly reviews and evaluates the services
furnished by broker-dealers. Among other measures, the Investment Manager's
investment management personnel seek to evaluate the quality of research and
other services received, and the results of this effort are made available to
the equity trading department, which sometimes uses this information as
consideration in the selection of brokers to execute portfolio transactions.
Some services furnished by broker-dealers may be used for research and
investment decision-making purposes, and also for marketing or administrative
purposes. Under these circumstances, the Investment Manager allocates the cost
of such services to determine the appropriate proportion of the cost which is
allocable to purposes other than research or investment decision-making and the
Investment Manager pays for that portion directly from its own funds. 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 will necessarily be used exclusively in connection with the accounts
which pay the commissions to the broker-dealer producing the services.
The Investment Manager has no fixed agreements or understandings with
any broker-dealer as to the amount of brokerage business which the firm may
expect to receive for 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
allocation of a specified amount of brokerage business. These understandings are
honored to the extent possible in accordance with the policies set forth above.
39
<PAGE>
It is not the Investment Manager's policy to intentionally pay a firm a
brokerage commission higher than that which another firm would charge for
handling the same transaction in recognition of services (other than execution
services) provided. However, the Investment Manager is aware that this is an
area where differences of opinion as to fact and circumstances may exist, and in
such circumstances, if any, the Investment Manager relies on the provisions of
Section 28(e) of the Securities Exchange Act of 1934, to the extent applicable.
Brokerage commissions paid by the Fund in secondary trading during the last
three fiscal years were as follows: 1997, $2,399,034, 1996, $2,015,000, and
1995, $815,000. The Investment Manager believes the amount of brokerage
commissions paid by the Fund during the fiscal year ended December 31, 1997 was
significantly higher than during the previous fiscal years because of increased
levels of assets and increased market volatility, and the Investment Manager's
efforts to invest cash inflows, to restructure the portfolio, and to take
advantage of opportunities to purchase certain securities at attractive prices
and to sell certain securities in order to realize gains.
During and at the end of its most recent fiscal year, the Fund did not
hold in its portfolio securities of any entity that might be deemed to be a
regular broker-dealer of the Fund as defined under the 1940 Act.
In the case of the purchase of fixed income securities in underwriting
transactions, the Investment Manager follows any instructions received from its
clients as to the allocation of new issue discounts, selling commissions and
designations to brokers or dealers which provide the client with research,
performance evaluation, master trustee and other services. In the absence of
instructions from the client, the Investment Manager may make such allocations
to broker-dealers which have provided the Investment Manager with research and
brokerage services.
When more than one client of the Investment Manager is seeking to buy
or sell the same security, the sale or purchase is carried out in a manner which
is considered fair and equitable to all accounts. In allocating investments
among various clients (including in what sequence orders for trades are placed),
the Investment Manager will use its best business judgment and will take into
account such factors as the investment objectives of the clients, the amount of
investment funds available to each, the amount already committed for each client
to a specific investment and the relative risks of the investments, all in order
to provide on balance a fair and equitable result to each client over time.
Although sharing in large transactions may sometimes affect price or volume of
shares acquired or sold, overall it is believed there may be an advantage in
execution. The Investment Manager may follow the practice of grouping orders of
various clients for execution to get the benefit of lower prices or commission
rates. In certain cases where the aggregate order may be executed in a series of
transactions at various prices, the transactions are allocated as to amount and
price in a manner considered equitable to each so that each receives, to the
extent practicable, the average price of such transactions. Exceptions may be
made based on such factors as the size of the account and the size of the trade.
For example, the Investment Manager may not aggregate trades where it believes
that it is in the best interests of clients not to do so, including situations
40
<PAGE>
where aggregation might result in a large number of small transactions with
consequent increased custodial and other transactional costs which may
disproportionately impact smaller accounts. Such disaggregation, depending on
the circumstances, may or may not result in such accounts receiving more or less
favorable execution relative to other clients.
CERTAIN TAX MATTERS
Federal Income Taxation of Fund--In General
The Fund intends to qualify and elect to be treated each taxable year
as a "regulated investment company" under Subchapter M of the Internal Revenue
Code of 1986, as amended (the "Code"), although it cannot give complete
assurance that it will do so. Accordingly, the Fund must, among other things,
(a) derive at least 90% of its gross income in each taxable year from dividends,
interest, payments with respect to securities loans, gains from the sale or
other disposition of stock, securities or foreign currencies, or other income
(including, but not limited to, gains from options, futures or forward
contracts) derived with respect to its business of investing in such stock,
securities or currencies (the "90% test"); (b) satisfy certain diversification
requirements; and (c) in order to be entitled to utilize the dividends paid
deduction, distribute annually at least 90% of its investment company taxable
income (determined without regard to the deduction for dividends paid).
If the Fund should fail to qualify as a regulated investment company in
any year, it would lose the beneficial tax treatment accorded regulated
investment companies under Subchapter M of the Code and all of its taxable
income would be subject to tax at regular corporate rates without any deduction
for distributions to shareholders, and such distributions will be taxable to
shareholders as ordinary income to the extent of the Fund's current or
accumulated earnings and profits. Also, the shareholders, if they received a
distribution in excess of current or accumulated earnings and profits, would
receive a return of capital that would reduce the basis of their shares of the
Fund to the extent thereof. Any distribution in excess of a shareholder's basis
in the shareholder's shares would be taxable as gain realized from the sale of
such shares.
The Fund will be liable for a nondeductible 4% excise tax on amounts
not distributed (or deemed distributed) on a timely basis in accordance with a
calendar year distribution requirement. To avoid the tax, during each calendar
year the Fund must distribute (or be deemed to have distributed) an amount equal
to at least 98% of the sum of its ordinary income (not taking into account any
capital gains or losses) for the calendar year, and its capital gain net income
for the 12-month period ending on October 31, in addition to any undistributed
portion of the respective balances from the prior year. For that purpose, any
income or gain retained by the Fund that is subject to corporate tax will be
considered to have been distributed by year-end. The Fund intends to make
sufficient distributions to avoid this 4% excise tax.
41
<PAGE>
Federal Income Taxation of the Fund's Investments
Original Issue Discount. For federal income tax purposes, debt
securities purchased by the Fund may be treated as having original issue
discount. Original issue discount represents interest for federal income tax
purposes and can generally be defined as the excess of the stated redemption
price at maturity of a debt obligation over the issue price. Original issue
discount is treated for federal income tax purposes as income earned by the
Fund, whether or not any income is actually received, and therefore is subject
to the distribution requirements of the Code. Generally, the amount of original
issue discount is determined on the basis of a constant yield to maturity which
takes into account the compounding of accrued interest. Under section 1286 of
the Code, an investment in a stripped bond or stripped coupon may result in
original issue discount.
Debt securities may be purchased by the Fund at a discount that exceeds
the original issue discount plus previously accrued original issue discount
remaining on the securities, if any, at the time the Fund purchases the
securities. This additional discount represents market discount for federal
income tax purposes. In the case of any debt security issued after July 18,
1984, having a fixed maturity date of more than one year from the date of issue
and having market discount, the gain realized on disposition will be treated as
interest to the extent it does not exceed the accrued market discount on the
security (unless the Fund elects to include such accrued market discount in
income in the tax year to which it is attributable). Generally, market discount
is accrued on a daily basis. The Fund may be required to capitalize, rather than
deduct currently, part or all of any direct interest expense incurred or
continued to purchase or carry any debt security having market discount, unless
the Fund makes the election to include market discount currently. Because the
Fund must include original issue discount in income, it will be more difficult
for the Fund to make the distributions required for the Fund to maintain its
status as a regulated investment company under Subchapter M of the Code or to
avoid the 4% excise tax described above.
Options and Futures Transactions. Certain of the Fund's investments may
be subject to provisions of the Code that (i) require inclusion of unrealized
gains or losses in the Fund's income for purposes of the 90% test, the excise
tax and the distribution requirements applicable to regulated investment
companies; (ii) defer recognition of realized losses; and (iii) characterize
both realized and unrealized gain or loss as short-term, medium-term or
long-term gain or loss. Such provisions generally apply to, among other
investments, options on debt securities, indices on securities and futures
contracts.
Federal Income Taxation of Shareholders
Dividends paid by the Fund may be eligible for the 70%
dividends-received deduction for corporations. The percentage of the Fund's
dividends eligible for such tax treatment may be less than 100% to the extent
that less than 100% of the Fund's gross income may be from qualifying dividends
of domestic corporations. Any dividend declared in October, November or December
and made payable to shareholders of record in any such month is treated as
42
<PAGE>
received by such shareholder on December 31, provided that the Fund pays the
dividend during January of the following calendar year.
Distributions by the Fund can result in a reduction in the fair market
value of the Fund's shares. Should a distribution reduce the fair market value
below a shareholder's cost basis, such distribution nevertheless may be taxable
to the shareholder as ordinary income or capital gain, even though, from an
investment standpoint, it may constitute a partial return of capital. In
particular, investors should be careful to consider the tax implications of
buying shares just prior to a taxable distribution. The price of shares
purchased at that time includes the amount of any forthcoming distribution.
Those investors purchasing shares just prior to a taxable distribution will then
receive a return of investment upon distribution which will nevertheless be
taxable to them.
DISTRIBUTION OF SHARES OF THE FUND
The Trust has entered into a Distribution Agreement with State Street
Research Investment Services, Inc., as Distributor, whereby the Distributor acts
as agent to sell and distribute shares of the Fund. Shares of the Fund are sold
through dealers who have entered into sales agreements with the Distributor. The
Distributor distributes shares of the Fund on a continuous basis at an offering
price which is based on the net asset value per share of the Fund plus (subject
to certain exceptions) a sales charge which, at the election of the investor,
may be imposed (i) at the time of purchase (the Class A shares) or (ii) on a
deferred basis (Class B and Class C shares). The Distributor may reallow all or
portions of such sales charges as concessions to dealers.
Total sales charges on Class A shares paid to the Distributor for the
last three fiscal years were as follows: 1997, $3,063,618; 1996, $2,411,055; and
1995, $1,155,661.
For the same periods, the Distributor retained the following amounts
after reallowance of concessions to dealers: 1997, $382,856; 1996, $292,754; and
1995, $140,645.
The differences in the price at which the Fund's Class A shares are
offered due to scheduled variations in sales charges, as described in the Fund's
Prospectus, result from cost savings inherent in economies of scale. Management
believes that the cost of sales efforts of the Distributor and broker-dealers
tends to decrease as the size of purchases increases, or does not involve any
incremental sales expenses as in the case of, for example, exchanges,
reinvestments or dividend investments at net asset value. Similarly, no
significant sales effort is necessary for sales of shares at net asset value to
certain Directors, Trustees, officers, employees, their relatives and other
persons directly or indirectly related to the Fund or associated entities. Where
shares of the Fund are offered at a reduced sales charge or without a sales
charge pursuant to sponsored arrangements, managed fee-based programs and
so-called "mutual fund supermarkets," among other programs, the amount of the
sales charge reduction will similarly reflect the anticipated reduction in sales
expenses associated with such
43
<PAGE>
arrangements. The reductions in sales expenses, and therefore the reduction in
sales charges, will vary depending on factors such as the size and other
characteristics of the organization or program, and the nature of its membership
or the participants. The Fund reserves the right to make variations in, or
eliminate, sales charges at any time or to revise the terms of or to suspend or
discontinue sales pursuant to sponsored arrangements or similar programs at any
time.
On any sale of Class A shares to a single investor in the amount of
$1,000,000 or more, the Distributor will pay the authorized securities dealer
making such sale a commission based on the aggregate of such sales. Such
commission also is payable to authorized securities dealers upon sales of Class
A shares made pursuant to a Letter of Intent to purchase shares having a net
asset value of $1,000,000 or more. Shares sold with such commissions payable are
subject to a one-year contingent deferred sales charge of 1.00% on any portion
of such shares redeemed within one year following their sale. After a particular
purchase of Class A shares is made under the Letter of Intent, the commission
will be paid only in respect of that particular purchase of shares. If the
Letter of Intent is not completed, the commission paid will be deducted from any
discounts or commissions otherwise payable to such dealer in respect of shares
actually sold. If an investor is eligible to purchase shares at net asset value
on account of the Right of Accumulation, the commission will be paid only in
respect of the incremental purchase at net asset value.
For the periods shown below, the Distributor received contingent
deferred sales charges upon redemption of Class A, Class B and Class C shares of
the Fund and paid initial commissions to securities dealers for sales of such
Class A, Class B and Class C shares as follows:
<TABLE>
<CAPTION>
Fiscal Year Fiscal Year Fiscal Year
December 31, 1997 December 31, 1996 December 31, 1995
----------------------------- ----------------------------- -----------------------------
Contingent Commissions Contingent Commissions Contingent Commissions
Deferred Paid to Deferred Paid to Deferred Paid to
Sales Charges Dealers Sales Charges Dealers Sales Charges Dealers
------------- ------- ------------- ------- ------------- -------
<S> <C> <C> <C> <C> <C> <C>
Class A $ 0 $2,688,190 $ 0 $2,118,301 $ 0 $1,015,016
Class B $612,487 $6,342,919 $329,954 $4,092,738 $688,624 $1,815,979
Class C* $ 3,122 $ 72,365 $ 6,250 $ 77,583 $ 5,125 $ 40,514
</TABLE>
- --------------------
* Prior to November 1, 1997, Class C shares were designated Class D.
The Fund has adopted a "Plan of Distribution Pursuant to Rule 12b-1"
(the "Distribution Plan") under which the Fund may engage, directly or
indirectly, in financing any activities primarily intended to result in the sale
of Class A, Class B and Class C shares, including, but not limited to, (1) the
payment of commissions and/or reimbursement to underwriters, securities dealers
and others engaged in the sale of shares, including payments to
44
<PAGE>
the Distributor to be used to pay commissions and/or reimbursement to securities
dealers (which securities dealers may be affiliates of the Distributor) engaged
in the distribution and marketing of shares and furnishing ongoing assistance to
investors, (2) reimbursement of direct out-of-pocket expenditures incurred by
the Distributor in connection with the distribution and marketing of shares and
the servicing of investor accounts including expenses relating to the
formulation and implementation of marketing strategies and promotional
activities such as direct mail promotions and television, radio, newspaper,
magazine and other mass media advertising, the preparation, printing and
distribution of Prospectuses of the Fund and reports for recipients other than
existing shareholders of the Fund, and obtaining such information, analyses and
reports with respect to marketing and promotional activities and investor
accounts as the Fund may, from time to time, deem advisable, and (3)
reimbursement of expenses incurred by the Distributor in connection with the
servicing of shareholder accounts including payments to securities dealers and
others in consideration of the provision of personal service to investors and/or
the maintenance or servicing of shareholder accounts and expenses associated
with the provision of personal service by the Distributor directly to investors.
In addition, the Distribution Plan is deemed to authorize the Distributor and
the Investment Manager to make payments out of general profits, revenues or
other sources to underwriters, securities dealers and others in connection with
sales of shares, to the extent, if any, that such payments may be deemed to be
within the scope of Rule 12b-1 under the 1940 Act.
Some or all of the service fees are used to pay or reimburse dealers
(including dealers that are affiliates of the Distributor) or others for
personal services and/or the maintenance of shareholder accounts. A portion of
any initial commission paid to dealers for the sale of shares of the Fund
represents payment for personal services and/or the maintenance or servicing of
shareholder accounts by such dealers. Dealers who have sold Class A shares are
eligible for further reimbursement commencing as of the time of such sale.
Dealers who have sold Class B and Class C shares are eligible for further
reimbursement after the first year during which such shares have been held of
record by such dealer as nominee for its clients (or by such clients directly).
Any service fees received by the Distributor and not allocated to dealers may be
applied by the Distributor in reduction of expenses incurred by it directly for
personal services and the maintenance or servicing of shareholder accounts.
The distribution fees are used primarily to offset initial and ongoing
commissions paid to dealers for selling such shares. Any distribution fees
received by the Distributor and not allocated to dealers may be applied by the
Distributor in connection with sales or marketing efforts, including special
promotional fees and cash and noncash incentives based upon sales by dealers.
The Distributor provides distribution services on behalf of other funds
having distribution plans and receives similar payments from, and incurs similar
expenses on behalf of, such other funds. When expenses of the Distributor cannot
be identified as relating to a specific fund, the Distributor allocates expenses
among the funds in a manner deemed fair and equitable to each fund.
45
<PAGE>
Commissions and other cash and noncash incentives and payments to
dealers, to the extent payable out of the general profits, revenues or other
sources of the Distributor (including the advisory fees paid by the Fund), have
also been authorized pursuant to the Distribution Plan.
The expenditures to be made pursuant to the Distribution Plan may not
exceed (i) with respect to Class A shares, an annual rate of 0.25% of the
average daily value of net assets represented by such Class A shares, and (ii)
with respect to Class B and Class C shares, an annual rate of 0.75% of the
average daily value of the net assets represented by such Class B or Class C
shares (as the case may be) to finance sales or promotion expenses and an annual
rate of 0.25% of the average daily value of the net assets represented by such
Class B or Class C shares (as the case may be) to make payments for personal
services and/or the maintenance or servicing of shareholder accounts. The
distribution and servicing expenses of a particular class will be borne solely
by that class. In addition, a rule of the NASD limits annual expenditures that
the Fund may incur under the Distribution Plan to 1%, of which 0.75% may be used
to pay distribution expenses and 0.25% may be used to pay shareholder service
fees. The NASD rule also limits the aggregate amount that the Fund may pay for
such distribution costs to 6.25% of gross share sales of a class since the
inception of any asset-based sales charge plus interest at the prime rate plus
1% on unpaid amounts thereof (less any contingent deferred sales charges). Such
limitation does not apply to shareholder service fees. Payments to the
Distributor or to dealers funded under the Distribution Plan may be discontinued
at any time.
The Distributor may pay certain dealers and other intermediaries
additional compensation for sales and administrative services. The Distributor
may provide cash and noncash incentives to intermediaries who, for example, sell
significant amounts of shares or develop particular distribution channels. The
Distributor may compensate dealers with clients who maintain their investments
in the Fund over a period of years. The incentives can include merchandise and
trips to, and attendance at, sales seminars at resorts. The Distributor may pay
for administrative services, such as technological and computer systems support
for the maintenance of pension plan participant records, for subaccounting, and
for distribution through mutual fund supermarkets or similar arrangements.
During the fiscal year ended December 31, 1997, the Fund paid the
Distributor fees under the Distribution Plan and the Distributor used all of
such payments for expenses incurred on behalf of the Fund as follows:
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<PAGE>
Class A Class B Class C*
------- ------- --------
Advertising $ 259 $ 232,156 $ 20,443
Printing and mailing of prospectuses
to other than current shareholders 78 70,012 6,165
Compensation to dealers 755,120 3,467,968 231,017
Compensation to sales
personnel 505 448,213 42,567
Interest 0 0 0
Carrying or other
financing charges 0 0 0
Other expenses: marketing; general 262 234,147 20,741
-------- ----------- -------
Total fees received $756,224 $4,460,868 $320,933
======== ========== ========
Difference $ 8,372**
==========
- -----------------
* Prior to November 1, 1997, the Fund's current Class C shares were
designated as Class D shares.
** Net fees result from the timing of expenditures and are used against future
expenses.
The Distributor may have also used additional resources of its own for
further expenses on behalf of the Fund.
No interested Trustee of the Trust has any direct or indirect financial
interest in the operation of the Distribution Plan or any related agreements
thereunder. The Distributor's interest in the Distribution Plan is described
above.
To the extent that the Glass-Steagall Act may be interpreted as
prohibiting banks and other depository institutions from being paid for
performing services under the Distribution Plan, the Fund will make alternative
arrangements for such services for shareholders who acquired shares through such
institutions.
47
<PAGE>
CALCULATION OF PERFORMANCE DATA
From time to time, in advertisements or in communications to
shareholders or prospective investors, the Fund may compare the performance of
its Class A, Class B, Class C or Class S shares to the performance of other
mutual funds with similar investment objectives, to certificates of deposit
and/or to other financial alternatives. The Fund may also compare its
performance to appropriate indices, such as Standard & Poor's 500 Index,
Consumer Price Index and Dow Jones Industrial Average and/or to appropriate
rankings and averages such as those compiled by Lipper Analytical Services,
Inc., Morningstar, Inc., Money Magazine, Business Week, Forbes Magazine, The
Wall Street Journal and Investor's Daily. For example, the performance of the
Fund might be compared to the Lipper Capital Appreciation Funds Index.
The average annual total return ("standard total return") of the Class
A, Class B, Class C and Class S shares of the Fund will be calculated as set
forth below. Total return is computed separately for each class of shares of the
Fund. Performance data for a specified class includes periods prior to the
adoption of class designations on February 17, 1993, when designations were
assigned based on the pricing and Rule 12b-1 fees applicable to shares sold
thereafter. The application of the additional Rule 12b-1 fees, if any, of up to
1% will, for periods after February 17, 1993, adversely affect Fund performance
results. Thus, performance data or rankings for a given class of shares should
be interpreted carefully by investors who hold or may invest in a different
class of shares.
The performance data below reflect Rule 12b-1 fees and, where
applicable, sales charges as follows:
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<PAGE>
Rule 12b-1 Fees Sales Charges
----------------------------------------- ---------------------------
Class Amount Period
- ----- ------ ------
A 0.25% February 17, 1993 to present; Maximum 4.5% sales charge
Fee will reduce performance reflected
for periods after February 17,
1993
B 1.00% March 15, 1993 to present; fee 1- and 5-year periods
will reduce performance for reflect a 5% and a 2%
periods after March 15, 1993 contingent deferred sales
charge, respectively
C* 1.00% March 15, 1993 to present; fee 1-year period reflects a 1%
will reduce performance for contingent deferred sales
periods after March 15, 1993 charge
S* 0.00% Since commencement of None
operations to present
- --------------------
* Prior to November 1, 1997, the Fund's current Class C shares were
designated as Class D shares and the Fund's current Class S shares were
designated as Class C shares.
All calculations of performance data in this section reflect the
voluntary measures, if any, by the Fund's affiliates to reduce fees or expenses
relating to the Fund; see "--Accrued Expenses and Recurring Charges" later in
this section.
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<PAGE>
Total Return
The Fund's standard average annual total returns ("standard total
return") of each class of shares were as follows:
Five Years One Year
Ten Years Ended Ended Ended
December 31, 1997 December 31, 1997 December 31, 1997
----------------- ----------------- -----------------
Class A 15.18% 15.91% 23.11%
Class B 15.31% 15.96% 22.80%
Class C* 15.32% 16.19% 26.93%
Class S* 15.86% 17.29% 29.08%
- ----------------
* Prior to November 1, 1997, the Fund's current Class C shares were
designated as Class D shares and the Fund's current Class S shares were
designated as Class C shares.
Standard total return is computed separately for each class of shares
by determining the average annual compounded rates of return over the designated
periods that, if applied to the initial amount invested, would produce the
ending redeemable value in accordance with the following formula:
n
P(1+T) = ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the designated
period assuming a hypothetical $1,000 payment made at
the beginning of the designated period
The calculation is based on the further assumptions that the highest
applicable initial or contingent deferred sales charge is deducted, and that all
dividends and distributions by the Fund are reinvested at net asset value on the
reinvestment dates during the periods. All accrued expenses and recurring
charges are also taken into account as described later herein.
Accrued Expenses and Recurring Charges
Accrued expenses include all recurring charges that are charged to all
shareholder accounts in proportion to the length of the base period. The
standard total return results take
50
<PAGE>
sales charges, if applicable, into account, although the results do not take
into account recurring and nonrecurring charges for optional services which only
certain shareholders elect and which involve nominal fees, such as the $7.50 fee
for wire orders.
Accrued expenses do not include the subsidization, if any, by
affiliates of fees or expenses during the subject period. In the absence of such
subsidization, the performance of the Fund would have been lower.
Nonstandardized Total Return
The Fund may provide the above described standard total return results
for Class A, Class B, Class C and Class S shares for periods which end no
earlier than the most recent calendar quarter end and which begin twelve months
before, five years before and ten years before. In addition, the Fund may
provide nonstandardized total return results for differing periods, such as for
the period since the Fund commenced operations in 1924, and/or without taking
sales charges into account. Such nonstandardized total return is computed as
otherwise described under "--Total Return" except the result may or may not be
annualized, and as noted any applicable sales charge may not be taken into
account and therefore not deducted from the hypothetical initial payment of
$1,000. For example, the Fund's nonstandardized total returns for the six months
ended December 31, 1997, without taking sales charges into account, were as
follows:
Class A 8.14%
Class B 7.70%
Class C* 7.75%
Class S* 8.23%
- -----------------
* Prior to November 1, 1997, Class C shares were designated as Class D,
and Class S shares were designated as Class C.
CUSTODIAN
State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110, is the Trust's custodian. As custodian, State Street Bank
and Trust Company is responsible for, among other things, safeguarding and
controlling the Fund's cash and securities, handling the receipt and delivery of
securities and collecting interest and dividends on the Fund's investments.
State Street Bank and Trust Company is not an affiliate of the Investment
Manager or its affiliates.
51
<PAGE>
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P., One Post Office Square, Boston, Massachusetts
02109, serves as the Trust's independent accountants, providing professional
services including (1) audits of the Fund's annual financial statements, (2)
assistance and consultation in connection with SEC filings and (3) review of the
annual income tax returns filed on behalf of the Fund.
FINANCIAL STATEMENTS
In addition to the reports provided to holders of record on a
semiannual basis, other supplementary financial reports may be made available
from time to time through electronic or other media. Shareholders with
substantial holdings in one or more State Street Research Funds may also receive
reports and other information which reflect or analyze their positions in a
consolidated manner. For more information, call State Street Research Service
Center.
The following financial statements are for the Fund's fiscal year ended
December 31, 1997.
DOCSC\600835.3
52
<PAGE>
STATE STREET RESEARCH INVESTMENT TRUST
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
- --------------------------------------------------------------------------------
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Value
Shares (Note 1)
- --------------------------------------------------------------------------------------------
COMMON STOCKS 94.9%
BASIC INDUSTRIES 14.6%
CHEMICAL 5.0%
<S> <C> <C>
E.I. Du Pont De Nemours & Co. ............................. 749,800 $ 45,034,862
Monsanto Co. .............................................. 175,400 7,366,800
Rohm & Haas Co. ........................................... 425,200 40,712,900
-------------
93,114,562
-------------
ELECTRICAL EQUIPMENT 3.2%
General Electric Co. ...................................... 798,700 58,604,613
-------------
FOREST PRODUCT 2.5%
Fort James Corp. .......................................... 482,800 18,467,100
IKON Office Solutions Inc. ................................ 306,300 8,614,688
Weyerhaeuser Co. .......................................... 382,200 18,751,687
-------------
45,833,475
-------------
MACHINERY 3.0%
Tyco International Ltd. ................................... 1,227,600 55,318,725
-------------
METAL & MINING 0.9%
British Steel PLC ADR ..................................... 695,600 14,911,925
Ispat International NV Cl. A* ............................. 98,400 2,127,900
-------------
17,039,825
-------------
Total Basic Industries .................................... 269,911,200
-------------
CONSUMER CYCLICAL 18.4%
AUTOMOTIVE 1.9%
General Motors Corp. ...................................... 294,300 17,841,937
Renault SA* ............................................... 622,100 17,507,305
-------------
35,349,242
-------------
RECREATION 6.0%
CBS Corp. ................................................. 574,200 16,903,013
Time Warner Inc. .......................................... 585,200 36,282,400
US West Inc.* ............................................. 1,024,800 29,591,100
Viacom Inc. Cl. B* ........................................ 213,500 8,846,906
Walt Disney Co. ........................................... 185,532 18,379,264
-------------
110,002,683
-------------
RETAIL TRADE 10.5%
Cendant Corp.* ............................................ 318,891 10,961,891
CVS Corp. ................................................. 421,200 26,983,125
Dayton Hudson Corp. ....................................... 392,900 26,520,750
Home Depot Inc. ........................................... 337,600 19,876,200
Kroger Co.* ............................................... 876,000 32,357,250
Rite Aid Corp. ............................................ 487,600 28,616,025
Safeway Inc.* ............................................. 381,300 24,117,225
Toys "R" Us Inc.* ......................................... 784,600 24,665,862
-------------
194,098,328
-------------
Total Consumer Cyclical ................................... 339,450,253
-------------
CONSUMER STAPLE 19.6%
BUSINESS SERVICE 2.4%
Browning-Ferris Industries Inc. ........................... 362,200 13,401,400
HBO & Co. ................................................. 204,200 9,801,600
Interpublic Group of Companies, Inc. ...................... 428,850 21,362,091
-------------
44,565,091
-------------
DRUG 7.6%
American Home Products Corp. .............................. 201,000 15,376,500
Bristol-Myers Squibb Co. .................................. 368,800 34,897,700
Eli Lilly & Co. ........................................... 83,712 5,828,448
Novartis AG ADR ........................................... 255,797 20,782,227
Pfizer Inc. ............................................... 280,700 20,929,694
Schering-Plough Corp. ..................................... 280,800 17,444,700
Warner-Lambert Co. ........................................ 208,700 25,878,800
-------------
141,138,069
-------------
FOOD & BEVERAGE 3.3%
Coca-Cola Co. ............................................. 187,000 12,458,875
General Mills Inc. ........................................ 276,100 19,775,662
H.J. Heinz Co. ............................................ 555,600 28,231,425
-------------
60,465,962
-------------
HOSPITAL SUPPLY 2.0%
Boston Scientific Corp.* .................................. 167,500 7,684,063
Guidant Corp. ............................................. 124,000 7,719,000
Johnson & Johnson ......................................... 318,300 20,968,012
-------------
36,371,075
-------------
PERSONAL CARE 2.2%
Gillette Co. .............................................. 214,100 21,503,669
Procter & Gamble Co. ...................................... 242,800 19,378,475
-------------
40,882,144
-------------
TOBACCO 2.1%
Philip Morris Companies, Inc. ............................. 841,900 38,148,594
-------------
Total Consumer Staple ..................................... 361,570,935
-------------
ENERGY 8.2%
OIL 7.6%
ENI SPA ADR ............................................... 170,800 9,746,275
Exxon Corp. ............................................... 264,700 16,196,331
Oryx Energy Co.* .......................................... 605,200 15,432,600
Seagull Energy Corp.* ..................................... 809,800 16,702,125
Shell Transport & Trading PLC ............................. 724,200 31,683,750
Total SA Cl. B ADR ........................................ 557,608 30,947,244
Unocal Corp. .............................................. 479,200 18,598,950
-------------
139,307,275
-------------
OIL SERVICE 0.6%
Schlumberger Ltd. ......................................... 144,724 11,650,282
-------------
Total Energy .............................................. 150,957,557
-------------
FINANCE 16.2%
BANK 9.3%
Banc One Corp. ............................................ 647,600 35,172,775
BankAmerica Corp. ......................................... 576,000 42,048,000
Chase Manhattan Corp. ..................................... 158,300 17,333,850
H.F. Ahmanson & Co. ....................................... 501,700 33,582,544
NationsBank Corp. ......................................... 483,700 29,415,006
Washington Mutual Inc. .................................... 206,000 13,145,375
-------------
170,697,550
-------------
INSURANCE 6.9%
Ace Ltd. .................................................. 376,200 36,303,300
American General Corp. .................................... 423,642 22,903,146
General Re Corp. .......................................... 112,200 23,786,400
Saint Paul Companies, Inc. ................................ 194,100 15,928,331
Travelers Group Inc. ...................................... 544,200 29,318,775
-------------
128,239,952
-------------
Total Finance ............................................. 298,937,502
-------------
SCIENCE & TECHNOLOGY 12.0%
AEROSPACE 2.4%
Boeing Co. ................................................ 531,200 $ 25,995,600
Raytheon Co. Cl. A ........................................ 18,768 925,473
Raytheon Co. Cl. B ........................................ 350,800 17,715,400
-------------
44,636,473
-------------
COMPUTER SOFTWARE & SERVICE 2.0%
Cisco Systems Inc.* ....................................... 294,000 16,390,500
Microsoft Corp.* .......................................... 160,600 20,757,550
-------------
37,148,050
-------------
ELECTRONIC COMPONENTS 1.4%
Analog Devices Inc.* ...................................... 203,300 5,628,869
Intel Corp. ............................................... 167,200 11,745,800
Texas Instruments Inc. .................................... 168,000 7,560,000
-------------
24,934,669
-------------
ELECTRONIC EQUIPMENT 2.0%
L.M. Ericsson Telephone Co. ADR Cl. B ..................... 276,640 10,322,130
Lucent Technologies Inc. .................................. 225,700 18,027,788
Teradyne Inc.* ............................................ 284,100 9,091,200
-------------
37,441,118
-------------
OFFICE EQUIPMENT 4.2%
Compaq Computer Corp. ..................................... 319,800 18,048,713
Hewlett-Packard Co. ....................................... 264,000 16,500,000
International Business Machines Corp. ..................... 216,900 22,679,606
Xerox Corp. ............................................... 269,000 19,855,562
-------------
77,083,881
-------------
Total Science & Technology ................................ 221,244,191
-------------
UTILITY 5.9%
ELECTRIC 2.4%
FPL Group Inc. ............................................ 321,100 19,005,106
Texas Utilities Co. ....................................... 631,200 26,234,250
-------------
45,239,356
-------------
TELEPHONE 3.5%
Bell Atlantic Corp. ....................................... 386,500 35,171,500
WorldCom Inc.* ............................................ 945,000 28,586,250
-------------
63,757,750
-------------
Total Utility ............................................. 108,997,106
-------------
Total Common Stocks (Cost $1,194,510,262) ................. 1,751,068,744
-------------
SHORT-TERM INVESTMENTS 4.0%
Navigator Securities Lending Prime Portfolio .............. 74,267,129 74,267,129
-------------
Total Short-Term Investments (Cost $74,267,129) ........... 74,267,129
-------------
</TABLE>
53
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
PRINCIPAL MATURITY VALUE
AMOUNT DATE (NOTE 1)
- ------------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER 6.2%
<S> <C> <C> <C>
American Express Credit Corp., 5.83% ............ $ 11,279,000 1/06/1998 $ 11,279,000
American Express Credit Corp., 5.75% ............ 315,000 1/13/1998 315,000
Beneficial Corp., 5.86% ......................... 6,344,000 1/06/1998 6,344,000
Chevron USA Inc., 5.58% ......................... 24,000,000 1/14/1998 24,000,000
Commercial Credit Co., 5.95% .................... 5,773,000 1/09/1998 5,773,000
Deere & Co., 5.75% .............................. 9,685,000 1/13/1998 9,685,000
General Electric Capital Corp., 6.08% ........... 9,794,000 1/05/1998 9,794,000
Household Finance Corp., 6.10% .................. 31,742,000 1/09/1998 31,742,000
John Deere Capital Corp., 5.83% ................. 15,148,000 1/06/1998 15,148,000
----------------
Total Commercial Paper (Cost $114,080,000) ............................................ 114,080,000
----------------
Total Investments (Cost $1,382,857,391) - 105.1% ...................................... 1,939,415,873
Cash and Other Assets, Less Liabilities - (5.1%) ...................................... (93,523,239)
----------------
Net Assets - 100.0% ................................................................... $ 1,845,892,634
================
Federal Income Tax Information:
At December 31, 1997, the net unrealized appreciation of investments based on
cost for Federal income tax purposes of $1,381,382,083 was as follows: Aggregate
gross unrealized appreciation for all investments in which there is an excess
of value over tax cost ................................................................ $ 578,494,539
Aggregate gross unrealized depreciation for all investments in which there is an excess
of tax cost over value ................................................................ (20,460,749)
----------------
$ 558,033,790
================
- ------------------------------------------------------------------------------------------------------------------
* Non-income-producing securities.
ADR stands for American Depositary Receipt, representing ownership of foreign
securities.
</TABLE>
The accompanying notes are an integral part of the financial statements.
54
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
December 31, 1997
ASSETS
Investments, at value (Cost $1,382,857,391)
(Note 1) ............................................. $ 1,939,415,873
Cash .................................................. 159
Receivable for securities sold ........................ 6,386,223
Dividends and interest receivable ..................... 2,615,960
Receivable for fund shares sold ....................... 1,889,330
Other assets .......................................... 18,145
---------------
1,950,325,690
LIABILITIES
Payable for collateral received on securities loaned 74,267,129
Payable for securities purchased ...................... 20,184,613
Payable for fund shares redeemed ...................... 6,789,588
Accrued management fee (Note 2) ....................... 1,918,339
Accrued distribution and service fees (Note 4) ........ 585,075
Accrued transfer agent and shareholder services
(Note 2) ............................................ 449,888
Accrued trustees' fees (Note 2) ....................... 9,464
Other accrued expenses ................................ 228,960
---------------
104,433,056
---------------
Net Assets ............................................ $ 1,845,892,634
===============
Net Assets consist of:
Unrealized appreciation of investments .............. $ 556,558,482
Accumulated net realized gain ....................... 39,632,205
Paid-in capital ..................................... 1,249,701,947
---------------
$ 1,845,892,634
===============
Net Asset Value and redemption price per share
of Class A shares ($367,759,039/35,337,294 shares) ... $10.41
======
Maximum Offering Price per share of Class
shares ($10.41/.955) ................................. $10.90
======
Net Asset Value and offering price per share of
Class B shares ($558,567,869/54,006,968 shares)* .... $10.34
======
Net Asset Value and offering price per share
of Class C shares ($36,289,866/3,497,034 shares)* ... $10.38
======
Net Asset Value, offering price and redemption
price per share of Class S shares
($883,275,860/84,512,635 shares) ..................... $10.45
======
- -----------------------------------------------------------------------
*Redemption price per share for Class B and Class C is equal to net asset
value less any applicable contingent deferred sales charge.
The accompanying notes are an integral part of the financial statements.
55
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the year ended December 31, 1997
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
Dividends, net of foreign taxes of $429,595 ............................. $ 24,269,765
Interest (Note 1) ....................................................... 3,263,149
------------
27,532,914
EXPENSES
Management fee (Note 2) ................................................. 5,717,422
Transfer agent and shareholder services (Note 2) ........................ 1,961,540
Service fee - Class A (Note 4) .......................................... 756,224
Distribution and service fees - Class B (Note 4) ........................ 4,460,868
Distribution and service fees - Class C (Note 4) ........................ 320,933
Custodian fee ........................................................... 300,298
Reports to shareholders ................................................. 150,033
Registration fees ....................................................... 131,030
Trustees' fees (Note 2) ................................................. 30,714
Audit fee ............................................................... 27,223
Legal fees .............................................................. 10,551
Miscellaneous ........................................................... 54,103
------------
13,920,939
------------
Net investment income ................................................... 13,611,975
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments (Notes 1 and 3) ........................ 233,740,026
Net unrealized appreciation of investments .............................. 153,903,428
------------
Net gain on investments ................................................. 387,643,454
------------
Net increase in net assets resulting from operations .................... $401,255,429
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
56
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31
------------------------------
1996 1997
- -----------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income .................. $ 14,467,750 $ 13,611,975
Net realized gain on investments ....... 240,753,684 233,740,026
Net unrealized appreciation
(depreciation) of investments ........ (18,848,278) 153,903,428
-------------- --------------
Net increase resulting from
operations ........................... 236,373,156 401,255,429
-------------- --------------
Dividends from net investment income:
Class A .............................. (2,367,239) (2,789,737)
Class B .............................. (1,492,489) (870,683)
Class C .............................. (139,420) (52,743)
Class S .............................. (11,670,468) (9,898,812)
-------------- --------------
(15,669,616) (13,611,975)
-------------- --------------
Distributions from net realized gains:
Class A .............................. (38,241,853) (37,498,390)
Class B .............................. (54,345,452) (56,883,383)
Class C .............................. (4,419,675) (3,712,939)
Class S .............................. (144,043,972) (96,107,440)
-------------- --------------
(241,050,952) (194,202,152)
-------------- --------------
Distribution in excess of net realized
gains:
Class A .............................. (151,663) --
Class B .............................. (215,528) --
Class C .............................. (17,528) --
Class S .............................. (571,263) --
-------------- --------------
(955,982) --
-------------- --------------
Net increase from fund share
transactions (Note 5) ................ 292,610,905 306,531,257
-------------- --------------
Total increase in net assets............ 271,307,511 499,972,559
Net Assets
Beginning of year ...................... 1,074,612,564 1,345,920,075
-------------- --------------
End of year ............................ $1,345,920,075 $1,845,892,634
============== ==============
The accompanying notes are an integral part of the financial statements.
57
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
December 31, 1997
NOTE 1
State Street Research Investment Trust (the "Trust"), is a series of State
Street Research Master Investment Trust (the "Master Trust"), which is a
Massachusetts business trust registered under the Investment Company Act of
1940, as amended, as an open-end management investment company. The Trust is
presently the only series of the Master Trust.
The investment objective of the Trust is to provide long-term growth of capital
and, secondarily, long-term growth of income. In seeking to achieve its
investment objective, the Trust invests primarily in common stocks, or
securities convertible into common stocks, that have long-term growth potential.
The Trust offers four classes of shares. Before November 1, 1997, Class C shares
were designated Class D and Class S shares were designated Class C. Class A
shares are subject to an initial sales charge of up to 4.50% and pay a service
fee equal to 0.25% of average daily net assets. Class B shares are subject to a
contingent deferred sales charge on certain redemptions made within five years
of purchase and pay annual distribution and service fees of 1.00%. Class B
shares automatically convert into Class A shares (which pay lower ongoing
expenses) at the end of eight years after the issuance of the Class B shares.
Class C shares are subject to a contingent deferred sales charge of 1.00% on any
shares redeemed within one year of their purchase. Class C shares also pay
annual distribution and service fees of 1.00%. Class S shares are only offered
to certain retirement accounts, advisory accounts of State Street Research &
Management Company (the "Adviser"), an indirect wholly owned subsidiary of
Metropolitan Life Insurance Company ("Metropolitan"), and special programs. No
sales charge is imposed at the time of purchase or redemption of Class S shares.
Class S shares do not pay any distribution or service fees. The Trust's expenses
are borne pro-rata by each class, except that each class bears expenses, and has
exclusive voting rights with respect to provisions of the Plan of Distribution,
related specifically to that class. The Trustees declare separate dividends on
each class of shares.
The following significant accounting policies are consistently followed by the
Trust in preparing its financial statements, and such policies are in conformity
with generally accepted accounting principles for investment companies.
A. INVESTMENTS IN SECURITIES
Values for listed securities represent the last sale on national securities
exchanges quoted prior to the close of the New York Stock Exchange. Over-the-
counter securities quoted on the National Association of Securities Dealers
Automated Quotation ("NASDAQ") system are valued at closing price supplied
through such system. In the absence of recorded sales and for those
over-the-counter securities not quoted on the NASDAQ system, valuations are at
the mean of the closing bid and asked quotations, except for securities that may
be restricted as to public resale, which are valued in accordance with methods
adopted by the Trustees. Security transactions are accounted for on the trade
date (date the order to buy or sell is executed), and dividends declared but not
received are accrued on the ex-dividend date. Interest income is determined on
the accrual basis. Realized gains and losses from security transactions are
reported on the basis of identified cost of securities delivered.
B. FEDERAL INCOME TAXES
No provision for Federal income taxes is necessary since the Trust has elected
to qualify under Subchapter M of the Internal Revenue Code and maintains a
policy to distribute all of its taxable income, including net realized capital
gains, within the prescribed time periods. It is also the intention of the Trust
to distribute an amount sufficient to avoid imposition of any Federal Excise Tax
under Section 4982 of the Internal Revenue Code.
C. DIVIDENDS
Dividends from net investment income are declared and paid or reinvested
quarterly. Net realized capital gains are distributed annually, unless
additional distributions are required for compliance with applicable tax
regulations. For the year ended December 31, 1997, the Trust has designated its
distributions from net realized gains as $87,537,185 from 20% rate gains and
$50,664,876 from 28% rate gains.
Income dividends and capital gain distributions are determined in accordance
with Federal income tax regulations which may differ from generally accepted
accounting principles. The difference is due to the disposition of securities
that have different bases for financial reporting and tax purposes.
D. ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
E. SECURITIES LENDING
The Trust may seek additional income by lending portfolio securities to
qualified institutions. The Trust will receive cash or securities as collateral
in an amount equal to at least 100% of the current market value of any loaned
securities plus accrued interest. If the borrower fails to return the securities
and the value of the collateral has declined during the term of the loan, the
Trust will bear the loss. At December 31, 1997, the value of the securities
loaned and the value of collateral were $71,241,423 and $74,267,129,
respectively. During the year ended December 31, 1997, income from securities
lending amounted to $3,440 and is included in interest income.
NOTE 2
Prior to August 18, 1997, the Adviser received an annual fee equal to 0.50% of
the average net assets up to and including $200,000,000, 0.375% of the average
net assets in excess of $200,000,000 up to and including $300,000,000, 0.30% of
the average net assets in excess of $300,000,000 up to and including
$500,000,000, and 0.25% of the average net assets in excess of $500,000,000.
Effective August 18, 1997 and continuing for a period of one year, the
management fee is equal to 0.41% of average daily net assets on an annualized
basis. Beginning on August 18, 1998 and continuing thereafter, the management
fee will be equal to 0.55% annually on average net assets up to $500,000,000,
0.50% annually of the next $500,000,000 in average net assets, and 0.45%
annually of average net assets in excess of $1,000,000,000. In consideration of
these fees, the Adviser furnishes the Trust with management, investment
advisory, statistical and research facilities and services. The Adviser also
pays all salaries, rent and certain other expenses of management. During the
year ended December 31, 1997, the fees pursuant to such agreement amounted to
$5,717,422.
State Street Research Service Center, a division of State Street Research
Investment Services, Inc., the Trust's principal underwriter (the
"Distributor"), an indirect wholly owned subsidiary of Metropolitan, provides
certain shareholder services to the Trust such as responding to inquiries and
instructions from investors with respect to the purchase and redemption of
shares of the Trust. In addition, Metropolitan receives a fee for maintenance of
the accounts of certain shareholders who are participants in sponsored
arrangements, employee benefit plans and similar programs or plans, through or
under which shares of the Trust may be purchased. During the year ended December
31, 1997, the amount of such shareholder servicing and account maintenance
expenses was $502,952.
The fees of the Trustees not currently affiliated with the Adviser amounted to
$30,714 during the year ended December 31, 1997.
NOTE 3
For the year ended December 31, 1997, exclusive of short-term investments and
U.S. Government obligations, purchases and sales of securities aggregated
$1,225,130,872 and $1,190,967,338, respectively.
NOTE 4
The Trust has adopted a Plan of Distribution Pursuant to Rule 12b-1 (the "Plan")
under the Investment Company Act of 1940, as amended. Under the Plan, the Trust
pays annual service fees to the Distributor at a rate of 0.25% of average daily
net assets for Class A, Class B and Class C shares. In addition, the Trust pays
annual distribution fees of 0.75% of average daily net assets for Class B and
Class C shares. The Distributor uses such payments for personal service and/or
the maintenance or servicing of shareholder accounts, to reimburse securities
dealers for distribution and marketing services, to furnish ongoing assistance
to investors and to defray a portion of its distribution and marketing expenses.
For the year ended December 31, 1997, fees pursuant to such plan amounted to
$756,224, $4,460,868 and $320,933 for Class A, Class B and Class C shares,
respectively.
The Trust has been informed that the Distributor and MetLife Securities, Inc., a
wholly owned subsidiary of Metropolitan, earned initial sales charges
aggregating $382,856 and $2,313,586, respectively, on sales of Class A shares of
the Trust during the year ended December 31, 1997, and that MetLife Securities,
Inc. earned commissions aggregating $4,914,177 on sales of Class B shares, and
that the Distributor collected contingent deferred sales charges of $612,487 and
$3,122 on redemptions of Class B and Class C shares, respectively, during the
same period.
NOTE 5
The Trustees have the authority to issue an unlimited number of shares of
beneficial interest, $.001 par value per share.
Share transactions were as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
----------------------------------------------------------------------
1996 1997
---------------------------------- ----------------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold ................... 8,496,436 $ 85,083,629 11,892,218 $125,284,553
Issued upon reinvestment of:
Distributions from net
realized gains ............ 4,105,073 37,233,009 3,437,670 36,542,436
Dividends from net investment
income .................... 238,083 2,245,230 269,405 2,789,580
Shares redeemed ............... (2,981,620) (29,917,407) (4,933,408) (51,867,529)
---------- ------------- ---------- ------------
Net increase .................. 9,857,972 $ 94,644,461 10,665,885 $112,749,040
========== ============= ========== ============
CLASS B SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------
Shares sold ................... 11,730,491 $ 117,507,067 19,674,761 $206,270,802
Issued upon reinvestment of:
Distributions from net
realized gains ............ 5,847,959 52,807,070 5,211,853 54,985,047
Dividends from net investment
income .................... 153,378 1,415,675 79,052 792,716
Shares redeemed ............... (2,861,202) (28,467,433) (5,930,757) (62,779,979)
---------- ------------- ---------- ------------
Net increase .................. 14,870,626 $143,262,379 19,034,909 $199,268,586
========== ============ ========== ============
CLASS C (FORMERLY CLASS D) SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------
Shares sold ................... 910,947 $ 9,099,923 1,100,245 $ 11,484,215
Issued upon reinvestment of:
Distributions from net
realized gains ............ 466,008 4,217,370 334,491 3,539,567
Dividends from net investment
income .................... 13,599 126,917 3,760 37,536
Shares redeemed ............... (397,252) (3,972,443) (775,363) (8,173,619)
---------- ------------ ---------- ------------
Net increase .................. 993,302 $ 9,471,767 663,133 $ 6,887,699
========== ============ ========== ============
CLASS S (FORMERLY CLASS C) SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------
Shares sold ................... 1,551,667 $ 15,248,056 1,718,321 $ 18,233,635
Issued upon reinvestment of:
Distributions from net
realized gains ............ 8,570,372 78,065,167 5,286,697 56,461,922
Dividends from net investment
income .................... 468,693 4,537,303 361,083 3,744,987
Shares redeemed ............... (5,305,991) (52,618,228) (8,574,756) (90,814,612)
---------- ------------ ---------- ------------
Net increase (decrease) ....... 5,284,741 $ 45,232,298 (1,208,655) $(12,374,068)
========== ============ ========== ============
</TABLE>
58
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
For a share outstanding throughout each year:
<TABLE>
<CAPTION>
Class A
-------------------------------------------------------------------------------------
Years ended December 31
------------------------------------------------------------------------------------
1993(2) 1994 1995(1) 1996(1) 1997(1)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR ($) 8.75 8.69 7.74 9.16 9.07
----- ----- ----- ----- -----
Net investment income ($) 0.10 0.11 0.14 0.12 0.10
Net realized and unrealized gain (loss) on
investments ($) 0.81 (0.44) 2.39 1.80 2.54
----- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS ($) 0.91 (0.33) 2.53 1.92 2.64
----- ----- ----- ----- -----
Dividends from net investment income ($) (0.13) (0.12) (0.13) (0.13) (0.10)
Distributions from net realized gains ($) (0.84) (0.50) (0.98) (1.87) (1.20)
Distribution in excess of net realized
gains ($) -- -- -- (0.01) --
----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS ($) (0.97) (0.62) (1.11) (2.01) (1.30)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF YEAR ($) 8.69 7.74 9.16 9.07 10.41
===== ===== ===== ===== =====
Total return(4) (%) 10.53(5) (3.84) 32.85 21.03 28.91
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of year ($ thousands) 75,259 92,137 135,676 223,868 367,759
Ratio of operating expenses to average net
assets (%) 0.75(6) 0.89 0.78 0.75 0.76
Ratio of net investment income to average
net assets (%) 1.27(6) 1.26 1.54 1.17 0.90
Portfolio turnover rate (%) 43.57 33.08 39.21 73.51 75.21
Average commission rate(7) ($) -- -- -- 0.0499 0.0515
<CAPTION>
Class B
-------------------------------------------------------------------------------------
Years ended December 31
------------------------------------------------------------------------------------
1993(3) 1994 1995(1) 1996(1) 1997(1)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR ($) 9.15 8.66 7.72 9.13 9.03
----- ----- ----- ----- -----
Net investment income ($) 0.06 0.06 0.07 0.04 0.02
Net realized and unrealized gain (loss) on
investments ($) 0.39 (0.44) 2.38 1.80 2.51
----- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS ($) 0.45 (0.38) 2.45 1.84 2.53
----- ----- ----- ----- -----
Dividends from net investment income ($) (0.10) (0.06) (0.06) (0.06) (0.02)
Distributions from net realized gains ($) (0.84) (0.50) (0.98) (1.87) (1.20)
Distribution in excess of net realized
gains ($) -- -- -- (0.01) --
----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS ($) (0.94) (0.56) (1.04) (1.94) (1.22)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF YEAR ($) 8.66 7.72 9.13 9.03 10.34
===== ===== ===== ===== =====
Total return(4) (%) 4.95(5) (4.43) 31.86 20.15 27.80
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of year ($ thousands) 73,110 113,301 183,446 315,766 558,568
Ratio of operating expenses to average net
assets (%) 1.51(6) 1.64 1.53 1.50 1.51
Ratio of net investment income to average
net assets (%) 0.48(6) 0.51 0.79 0.41 0.15
Portfolio turnover rate (%) 43.57 33.08 39.21 73.51 75.21
Average commission rate(7) ($) -- -- -- 0.0499 0.0515
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)Per-share figures have been calculated using the average shares method.
(2)February 17, 1993 (commencement of share class designations) to December 31,
1993.
(3)March 15, 1993 (commencement of share class designations) to December
31, 1993.
(4)Does not reflect any front-end or contingent deferred sales charges.
(5)Not annualized.
(6)Annualized.
(7)Average commission rate per share paid by the Trust for security trades on
which commissions are charged beginning with the fiscal year ended December
31, 1996.
59
<PAGE>
<TABLE>
<CAPTION>
Class C (Formerly Class D)
--------------------------------------------------------------------------------------
Years ended December 31
-------------------------------------------------------------------------------------
1993(3) 1994 1995(1) 1996(1) 1997(1)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR ($) 9.15 8.68 7.74 9.15 9.05
----- ----- ----- ----- -----
Net investment income ($) 0.06 0.05 0.07 0.04 0.02
Net realized and unrealized gain (loss)
on investments ($) 0.40 (0.43) 2.38 1.79 2.53
----- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS ($) 0.46 (0.38) 2.45 1.83 2.55
----- ----- ----- ----- -----
Dividends from net investment income ($) (0.09) (0.06) (0.06) (0.05) (0.02)
Distributions from net realized gains ($) (0.84) (0.50) (0.98) (1.87) (1.20)
Distribution in excess of net realized
gains ($) -- -- -- (0.01) --
----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS ($) (0.93) (0.56) (1.04) (1.93) (1.22)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF YEAR ($) 8.68 7.74 9.15 9.05 10.38
===== ===== ===== ===== =====
Total return(4) (%) 5.10(5) (4.45) 31.75 20.09 27.93
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of year ($ thousands) 9,729 11,707 16,841 25,658 36,290
Ratio of operating expenses to average net
assets (%) 1.51(6) 1.64 1.53 1.50 1.51
Ratio of net investment income to average
net assets (%) 0.51(6) 0.51 0.79 0.42 0.15
Portfolio turnover rate (%) 43.57 33.08 39.21 73.51 75.21
Average commission rate(7) ($) -- -- -- 0.0499 0.0515
<CAPTION>
Class S (Formerly Class C)
--------------------------------------------------------------------------------------
Years ended December 31
-------------------------------------------------------------------------------------
1993 1994 1995(1) 1996(1) 1997(1)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR ($) 8.80 8.70 7.76 9.18 9.11
----- ----- ----- ----- -----
Net investment income ($) 0.15 0.13 0.16 0.14 0.12
Net realized and unrealized gain (loss)
on investments ($) 0.74 (0.43) 2.39 1.82 2.54
----- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS ($) 0.89 (0.30) 2.55 1.96 2.66
----- ----- ----- ----- -----
Dividends from net investment income ($) (0.15) (0.14) (0.15) (0.15) (0.12)
Distributions from net realized gains ($) (0.84) (0.50) (0.98) (1.87) (1.20)
Distribution in excess of net realized
gains ($) -- -- -- (0.01) --
----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS ($) (0.99) (0.64) (1.13) (2.03) (1.32)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF YEAR ($) 8.70 7.76 9.18 9.11 10.45
===== ===== ===== ===== =====
Total return(4) (%) 10.20 (3.47) 33.07 21.48 29.08
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of year ($ thousands) 729,536 627,551 738,649 780,627 883,276
Ratio of operating expenses to average net
assets (%) 0.49 0.65 0.54 0.50 0.51
Ratio of net investment income to average
net assets (%) 1.63 1.54 1.81 1.44 1.17
Portfolio turnover rate (%) 43.57 33.08 39.21 73.51 75.21
Average commission rate(7) ($) -- -- -- 0.0499 0.0515
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)Per-share figures have been calculated using the average shares method.
(2)February 17, 1993 (commencement of share class designations) to December 31,
1993.
(3)March 15, 1993 (commencement of share class designations) to December
31, 1993.
(4)Does not reflect any front-end or contingent deferred sales charges.
(5)Not annualized.
(6)Annualized.
(7)Average commission rate per share paid by the Trust for security trades on
which commissions are charged beginning with the fiscal year ended December
31, 1996.
60
<PAGE>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
TO THE TRUSTEES OF STATE STREET RESEARCH MASTER INVESTMENT TRUST AND
SHAREHOLDERS OF STATE STREET RESEARCH INVESTMENT TRUST:
We have audited the accompanying statement of assets and liabilities of State
Street Research Investment Trust, including the schedule of portfolio
investments, as of December 31, 1997, and the related statement of operations
for the year then ended, the statement of changes in net assets for each of the
two years in the period then ended and the financial highlights for each of the
periods indicated therein. These financial statements and financial highlights
are the responsibility of the Trust's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1997 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of State
Street Research Investment Trust as of December 31, 1997, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the periods indicated therein, in conformity with generally accepted accounting
principles.
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
February 9, 1998
61
<PAGE>
- --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
- --------------------------------------------------------------------------------
Investment Trust provided shareholders with strong performance during the year.
For the 12 months ended December 31, 1997, Class A shares returned +28.91%
[without sales charge]. The Trust outperformed the average growth and income
fund, which was up 27.14%, according to Lipper Analytical Services. It lagged
the S&P 500, which gained 33.35% for the same period.
The core of the Trust's portfolio consists primarily of large companies with
global market leadership as well as income-producing securities that offer a
potential cushion against stock market volatility.
The Trust's investments in high quality global market leaders accounted for much
of its strong performance during the year. A reduction in the Trust's technology
holdings was well-timed. Profits were taken and the proceeds reinvested in
retail drug and food companies, selected for their relatively stable prospects
for revenues and earnings.
Stock selection in the energy sector and an underweighting in utilities stocks
resulted in a weak fourth quarter for the Trust. Looking ahead, the manager
continues to focus on companies with strong market presence and relatively
stable sales and earnings growth potential.
December 31, 1997
All returns represent past performance, which is no guarantee of future results.
The investment return and principal value of an investment made in the Trust
will fluctuate, and shares, when redeemed, may be worth more or less than their
original cost. All returns assume reinvestment of capital gain distributions and
income dividends. Performance for a class may include periods prior to the
adoption of class designations in 1993, which resulted in new or increased 12b-1
fees of up to 1% per class thereafter and which will reduce subsequent
performance. During the period prior to 1990 that shares of the Trust were not
offered to the general public, the Trust was not subject to the cash inflows and
higher redemptions and expenses that have occurred during the Trust's current
continuous public offering. "S" shares, offered without a sales charge, are
available through certain employee benefit plans and special programs. Before
November 1, 1997, Class C shares were designated Class D, and Class S shares
were designated Class C. Performance reflects maximum 4.5% "A" share front-end
sales charge or 5% "B" share or 1% "C" share contingent deferred sales charges
where applicable. The Standard & Poor's 500 Composite Index (S&P 500) includes
500 widely traded common stocks and is a commonly used measure of U.S. stock
market performance.
CHANGE IN VALUE OF $10,000
BASED ON THE S&P 500 COMPARED
TO CHANGE IN VALUE OF $10,000
INVESTED IN INVESTMENT TRUST
CLASS A SHARES
Average Annual Total Return
1 year 5 years 10 years
+23.11% +15.91% +15.18%
Investment Trust S&P 500
12/87 9,550 10,000
12/88 10,530 11,660
12/89 13,910 15,340
12/90 13,780 14,870
12/91 17,650 19,390
12/92 18,760 20,860
12/93 20,620 22,990
12/94 19,820 23,260
12/95 26,340 31,990
12/96 31,870 39,330
12/97 41,086 52,448
CLASS B SHARES
Average Annual Total Return
1 year 5 years 10 years
+22.80% +15.96% +15.31%
Investment Trust S&P 500
12/87 10,000 10,000
12/88 11,020 11,660
12/89 14,580 15,340
12/90 14,430 14,870
12/91 18,480 19,390
12/92 19,640 20,860
12/93 21,480 22,960
12/94 20,530 23,260
12/95 27,070 31,990
12/96 32,520 39,330
12/97 41,566 52,448
CLASS C SHARES
Average Annual Total Return
1 year 5 years 10 years
+26.93% +16.19% +15.32%
Investment Trust S&P 500
12/87 10,000 10,000
12/88 11,020 11,660
12/89 14,570 15,340
12/90 14,420 14,870
12/91 18,480 19,390
12/92 19,640 20,860
12/93 21,490 22,960
12/94 20,530 23,260
12/95 27,070 31,990
12/96 32,520 39,330
12/97 41,570 52,448
CLASS S SHARES
Average Annual Total Return
1 year 5 years 10 years
+29.08% +17.29% +15.86%
Investment Trust S&P 500
12/87 10,000 10,000
12/88 11,030 11,660
12/89 14,580 15,340
12/90 14,430 14,870
12/91 18,480 19,390
12/92 19,640 20,860
12/93 21,650 22,960
12/94 20,890 23,260
12/95 27,800 31,990
12/96 33,780 39,330
12/97 43,597 52,448
62
<PAGE>
STATE STREET RESEARCH INVESTMENT TRUST
- --------------------------------------------------------------------------------
REPORT ON SPECIAL MEETING OF SHAREHOLDERS
- --------------------------------------------------------------------------------
A Special Meeting of Shareholders of the State Street Investment Trust
("Trust"), a series of State Street Research Master Investment Trust ("Master
Trust"), was convened on august 8, 1997. The results of the Meeting are set
forth below.
VOTES (MILLIONS OF SHARES)
--------------------------
FOR WITHHELD
--- --------
1. The following persons were elected as Trustees:
Steve A. Garban 87.8 5.0
Malcolm T. Hopkins 87.8 5.0
Edward M. Lamont 88.5 4.3
Robert A. Lawrence 88.6 4.3
Dean O. Morton 88.6 4.2
Thomas L. Phillips 88.6 4.2
Toby Rosenblatt 88.7 4.2
Michael S. Scott Morton 88.6 4.2
Ralph F. Verni 88.5 4.3
Jeptha H. Wade 88.6 4.3
VOTES (MILLIONS OF SHARES)
---------------------------
FOR AGAINST ABSTAIN
PROPOSAL --- ------- -------
2. The Trust's investment advisory contract was
amended to increase the management fee and to
make related changes ............................ 61.1 22.1 7.0
3. The Trust's fundamental policy on lending was
amended to clarify the permissibility of
securities lending .............................. 70.0 12.1 8.1
4. The Trust's fundamental policies regarding
diversification of investments were amended ..... 73.1 8.6 8.6
5. The selection of Coopers & Lybrand L.L.P. as
the Master Trust's independent accountants was
ratified ........................................ 85.6 1.3 6.0
63
<PAGE>
STATE STREET MASTER INVESTMENT TRUST
PART C
OTHER INFORMATION
Item 24: Financial Statements and Exhibits
(a) Financial Statements
(1) Financial Statements included in PART A (Prospectus) of this
Registration Statement:
Financial Highlights for State Street Research Investment Trust
for the fiscal years ended December 31, 1988 through December
31, 1997.
(2) Financial Statements included in PART B (Statement of
Additional Information) of this Registration Statement for
State Street Research Investment Trust for the fiscal year
ended December 31, 1997 (except as provided below):
Investment Portfolio
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets (fiscal years ended December
31, 1997 and December 31, 1996)
Notes to Financial Statements
Report of Independent Accountants
Management's Discussion of Fund Performance
Report on Special Meeting of Shareholders
(b) Exhibits:
(1) First Amended and Restated Master Trust Agreement and
Amendment No. 1 to First Amended and Restated Master Trust
Agreement (x)
(2)(a) By-Laws (i)*
(2)(b) Amendment to By-Laws effective September 30, 1992 (v)*
(4) Deleted
(5)(b) Form of First Amended and Restated Investment Advisory
Contract (xii)
C-1
<PAGE>
(6)(a) Distribution Agreement with State Street Research
Investment Services, Inc. (formerly MetLife - State Street
Investment Services, Inc.) (iii)*
(6)(b) Form of Selected Dealer Agreement and Form of Supplement
No. 1 to Selected Dealer Agreement (xi)
(6)(c) Form of Bank and Bank Affiliated Broker-Dealer Agreement
(ix)*
(6)(d) Amendment to Distribution Agreement
(8)(a) Custodian Contract (iii)*
(8)(b) Amendment to Custodian Contract
(9) Agreement and Plan of Reorganization and Liquidation (iii)*
(10) Opinion and Consent of Counsel (v)*
(11) Consent of Independent Accountants
(14)(a) State Street Research IRA: IRA Application; Terms and
Conditions; Transfer of Assets Request Form
(14)(b) State Street Research 403(b) Plan Materials (xi)
(14)(c) State Street Research SIMPLE IRA: Application, Terms and
Conditions, and Disclosure Statement
(15) Plan of Distribution Pursuant to Rule 12b-1 (vii)*
(16) Calculation of Performance Data (ii)*
(17) First Amended and Restated Multiple Class Expense
Allocation Plan (xi)
(18)(a) Powers of Attorney
(18)(b) Certificate of Board Resolution Respecting Powers of
Attorney
C-2
<PAGE>
(19)(a) Form of New Account Application
(19)(b) Form of Additional Services Application
(19)(c) Form of MetLife Securities, Inc. Application
(27) Financial Data Schedules
- -----------------------
* Restated in electronic format in Post-Effective Amendment No. 11 filed on
March 2, 1998.
Filed as part of the Registration Statement as noted below and incorporated
herein by reference:
Footnote
Reference Registration/Amendment Date Filed
i Amendment No. 12 to April 28, 1989
Registration Statement
under Investment Company
Act of 1940
ii Registration Statement December 22, 1989
under Securities Act of
1933
iii Post-Effective Amendment April 30, 1991
No. 1
iv Post-Effective Amendment April 27, 1992
No. 2
v Post-Effective Amendment November 25, 1992
No. 3
vi Post-Effective Amendment January 22, 1993
No. 4
vii Post-Effective Amendment March 18, 1993
No. 5
viii Post-Effective Amendment April 29, 1994
No. 6
ix Post-Effective Amendment April 28, 1995
No. 7
x Post-Effective Amendment April 26, 1996
No. 8
xi Post-Effective Amendment March 25, 1997
No. 9
xii Post-Effective Amendment June 19, 1997
No. 10
C-3
<PAGE>
Item 25. Persons Controlled by or under Common Control
with Registrant
Inapplicable
Item 26. Number of Holders of Securities
(1) (2)
Number of Record
Title of Class Holders (at 1/31/98)
-------------- --------------------
Shares of Beneficial
Interest
Class A 27,800
Class B 34,091
Class C 1,139
Class S 17,674
Item 27. Indemnification
Under Article VI of the Registrant's First Amended and Restated Master Trust
Agreement, as further amended ("Master Trust Agreement") each of its Trustees
and officers or persons serving in such capacity with another entity at the
request of the Registrant ("Covered Person") shall be indemnified against all
liabilities, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and expenses, including
reasonable accountants' and counsel fees, incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such person may be or may have been
threatened, while in office or thereafter, by reason of being or having been
such a Trustee or officer, director or trustee, except with respect to any
matter as to which it has been determined that such Covered Person had acted
with willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of such Covered Person's office (such conduct
referred to hereafter as "Disabling Conduct"). A determination that the Covered
Person is entitled to indemnification may be made by (i) a final decision on the
merits by a court or other body before whom the proceeding was brought that the
person to be indemnified was not liable by reason of Disabling Conduct, (ii)
dismissal of a court action or an administrative proceeding against a Covered
Person for insufficiency of evidence of Disabling Conduct, or (iii) a reasonable
C-4
<PAGE>
determination, based upon a review of the facts, that the indemnitee was not
liable by reason of Disabling Conduct by (a) a vote of a majority of a quorum of
Trustees who are neither "interested persons" of the Trust as defined in section
2(a)(19) of the 1940 Act nor parties to the proceeding, or (b) an independent
legal counsel in a written opinion.
Under the Distribution Agreement between the Registrant and State Street
Research Investment Services, Inc., the Registrant's distributor, the Registrant
has agreed to indemnify and hold harmless State Street Research Investment
Services, Inc. and each person who has been, is, or may hereafter be an officer,
director, employee or agent of State Street Research Investment Services, Inc.
against any loss, damage or expense reasonably incurred by any of them in
connection with any claim or in connection with any action, suit or proceeding
to which any of them may be a party, which arises out of or is alleged to arise
out of or is based upon a violation of any of its convenants herein contained or
any untrue or alleged untrue statement of material fact, or the omission or
alleged omission to state a material fact necessary to make the statements made
not misleading, in a Registration Statement or Prospectus of the Registrant, or
any amendment or supplement thereto, unless such statement or omission was made
in reliance upon written information furnished by State Street Research
Investment Services, Inc.
Insofar as indemnification by the Registrant for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers, underwriters and
controlling persons of the Registrant, pursuant to Article VI of the
Registrant's Master Trust Agreement, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a trustee, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted against the
Registrant by such trustee, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question of whether such indemnification by it
is against public policy expressed in the Act and will be governed by the final
adjudication of such issue.
C-5
<PAGE>
Item 28. Business and Other Connections of Investment Adviser
Describe any other business, profession, vocation or employment of a
substantial nature in which each investment adviser of the Registrant, and each
director, officer or partner of any such investment adviser, is or has been, at
any time during the past two fiscal years, engaged for his own account or in the
capacity of director, officer, employee, partner or trustee.
<TABLE>
<CAPTION>
Principal business
Name Connection Organization address of organization
- ---- ---------- ------------ -----------------------
<S> <C> <C> <C>
State Street Investment Adviser Various investment Boston, MA
Research & advisory clients
Management
Company
Arpiarian, Tanya None
Vice President
Bangs, Linda L. None
Vice President
Bennett, Peter C. Executive Vice GFM International Investors,
Director and President Inc. London, England
Executive Vice Vice President State Street Research Capital Trust Boston, MA
President Vice President State Street Research Exchange Trust Boston, MA
Vice President State Street Research Financial Trust Boston, MA
Vice President State Street Research Growth Trust Boston, MA
Vice President State Street Research Master Investment Trust Boston, MA
Vice President State Street Research Equity Trust
Vice President State Street Research Income Trust Boston, MA
Vice President State Street Research Portfolios, Inc. Boston, MA
Vice President State Street Research Securities Trust Boston, MA
Director State Street Research Investment Services, Inc Boston, MA
Director Boston Private Bank & Trust Co. Boston, MA
President and Director Christian Camps & Conferences, Inc. Boston, MA
Chairman and Trustee Gordon College Wenham, MA
Bochman, Kathleen None
Vice President
Borzilleri, John Vice President Montgomery Securities San Francisco, CA
Vice President (until 6/97)
Bray, Michael J. Employee Merrill Lynch & Co. Boston, MA
Vice President (until 7/96)
Brown, Susan H. None
Vice President
Buffum, Andrea Project Manager BankBoston Boston, MA
Vice President (until 12/96)
Burbank, John F. None
Senior Vice President
(Vice President until
7/96)
Cabrera, Jesus A. Vice President First Chicago Investment Management Co. Chicago, IL
Vice President (until 5/96)
Vice President State Street Research Capital Trust Boston, MA
Canavan, Joseph W. Vice President GFM International Investors Limited London, England
Vice President Assistant Treasurer State Street Research Equity Trust Boston, MA
Assistant Treasurer State Street Research Financial Trust Boston, MA
Assistant Treasurer State Street Research Income Trust Boston, MA
Assistant Treasurer State Street Research Money Market Trust Boston, MA
Assistant Treasurer State Street Research Tax-Exempt Trust Boston, MA
Assistant Treasurer State Street Research Capital Trust Boston, MA
Assistant Treasurer State Street Research Exchange Trust Boston, MA
Assistant Treasurer State Street Research Growth Trust Boston, MA
Assistant Treasurer State Street Research Master Investment Trust Boston, MA
Assistant Treasurer State Street Research Securities Trust Boston, MA
Assistant Treasurer State Street Research Portfolios, Inc. Boston, MA
C-6
<PAGE>
Principal business
Name Connection Organization address of organization
- ---- ---------- ------------ -----------------------
Carstens, Linda C. None
Vice President
Clifford, Jr., Paul J. Vice President State Street Research Tax-Exempt Trust Boston, MA
Vice President
Coleman, Thomas J. Account Manager MetLife Investment New York, NY
Vice President (until 9/96) Management
D'Vari, Ronald None
Vice President
Depp, Maureen G. Vice President Wellington Management Company Boston, MA
Vice President (until 9/97)
DeVeuve, Donald None
Vice President
DiFazio, Susan M.W. Senior Vice President State Street Research Investment Services, Inc. Boston, MA
Vice President
Dillman, Thomas J Vice President State Street Research Securities Trust Boston, MA
Senior Vice President
Drake, Susan W. State Street Research Tax-Exempt Trust Boston, MA
Vice President
Dudley, Catherine Senior Portfolio Manager Chancellor Capital Management Boston, MA
Senior Vice President
Duggan, Peter J. None
Senior Vice
President
Even, Karen None
Vice President
Federoff, Alex G. None
Vice President
Fee, Richard E. CIGNA Retirement and Hartford, CT
Vice President Investment Services
Feliciano, Rosalina None
Vice President
Gardner, Michael D. Partner Prism Group Seattle, WA
Senior Vice President
Geer, Bartlett R. Vice President State Street Research Equity Trust Boston, MA
Senior Vice President Vice President State Street Research Income Trust Boston, MA
Vice President State Street Research Securities Trust Boston, MA
Giroux, June M. None
Vice President
Govoni, Electra None
Vice President
C-7
<PAGE>
Principal business
Name Connection Organization address of organization
- ---- ---------- ------------ -----------------------
Granger, Allison None
Vice President
Hamilton, Jr., William A. Treasurer and Director Ellis Memorial and Eldredge House Boston, MA
Senior Vice President Treasurer and Director Nautical and Aviation Publishing Company, Inc. Baltimore, MD
Treasurer and Director North Conway Institute Boston, MA
Hanson, Phyllis None
Vice President
Haverty, Jr., Lawrence J. Vice President State Street Research Capital Trust Boston, MA
Senior Vice President
Heineke, George R. None
Vice President
Jackson, Jr., Trustee Certain trusts of related and
F. Gardner non-related individuals
Senior Vice President Trustee and Chairman Vincent Memorial Hospital Boston, MA
of the Board
Jamieson, Frederick H. Vice President and Asst. Treasurer State Street Research Investment Services, Inc. Boston, MA
Senior Vice President Vice President and Asst. Treasurer SSRM Holdings, Inc. Boston, MA
Vice President and Controller MetLife Securities, Inc. New York, NY
Senior Vice President GFM International Investors Limited London, England
Jodka, Richard Portfolio Manager (until 1/98) Frontier Capital Management Boston, MA
Senior Vice President Vice President State Street Research Capital Trust Boston, MA
Kallis, John H. Vice President State Street Research Financial Trust Boston, MA
Senior Vice President Vice President State Street Research Income Trust Boston, MA
Vice President State Street Research Money Market Trust Boston, MA
Vice President State Street Research Portfolios, Inc. Boston, MA
Vice President State Street Research Tax-Exempt Trust Boston, MA
Vice President State Street Research Securities Trust Boston, MA
Trustee 705 Realty Trust Washington, D.C.
Director and President K&G Enterprises Washington, D.C.
Kasper, M. Katherine None
Vice President
C-8
<PAGE>
Principal business
Name Connection Organization address of organization
- ---- ---------- ------------ -----------------------
Kluiber, Rudolph K. Vice President State Street Research Capital Trust Boston, MA
Vice President
Langholm, Knut Director State Street Research SICAV Luxembourg
Vice President
Leary, Eileen M. None
Vice President
Maisonneuve, Virginie Portfolio Manager Batterymarch Financial Management Boston, MA
Vice President (until 6/97)
Vice President GFM International Investors, Ltd. London, England
McNamara, III, Francis J. Director and Executive GFM International Investors, Inc.
Executive Vice Vice President London, England
President, Executive Vice President, State Street Research Investment Services, Inc. Boston, MA
Secretary and Clerk and General Counsel
General Counsel Secretary and General Counsel State Street Research Master Investment Trust Boston, MA
(Senior Vice President, Secretary and General Counsel State Street Research Capital Trust Boston, MA
Secretary and General Secretary and General Counsel State Street Research Exchange Trust Boston, MA
Counsel until 7/96) Secretary and General Counsel State Street Research Growth Trust Boston, MA
Secretary and General Counsel State Street Research Securities Trust Boston, MA
Secretary and General Counsel State Street Research Equity Trust Boston, MA
Secretary and General Counsel State Street Research Financial Trust Boston, MA
Secretary and General Counsel State Street Research Income Trust Boston, MA
Secretary and General Counsel State Street Research Money Market Trust Boston, MA
Secretary and General Counsel State Street Research Portfolios, Inc. Boston, MA
Secretary and General Counsel State Street Research Tax-Exempt Trust Boston, MA
Secretary and General Counsel SSRM Holdings, Inc. Boston, MA
C-9
<PAGE>
Principal business
Name Connection Organization address of organization
- ---- ---------- ------------ -----------------------
Maus, Gerard P. Executive Vice President GFM International Investors, Inc.
Director, Executive and Director London, England
Vice President, Treasurer State Street Research Equity Trust Boston, MA
Treasurer, Chief Treasurer State Street Research Financial Trust Boston, MA
Financial Officer and Treasurer State Street Research Income Trust Boston, MA
Chief Administrative Treasurer State Street Research Money Market Trust Boston, MA
Officer Treasurer State Street Research Tax-Exempt Trust Boston, MA
Treasurer State Street Research Capital Trust Boston, MA
Treasurer State Street Research Exchange Trust Boston, MA
Treasurer State Street Research Growth Trust Boston, MA
Treasurer State Street Research Master Investment Trust Boston, MA
Treasurer State Street Research Portfolios, Inc. Boston, MA
Treasurer State Street Research Securities Trust Boston, MA
Director, Executive Vice President, State Street Research Investment Services, Inc. Boston, MA
Treasurer and Chief
Financial Officer
Director Metric Holdings, Inc. San Francisco, CA
Director Certain wholly-owned subsidiaries
of Metric Holdings, Inc.
Treasurer and Chief Financial SSRM Holdings, Inc. Boston, MA
Officer
Treasurer (until 1/97) MetLife Securities, Inc. New York, NY
Director State Street Research SICAV Luxembourg
Milder, Judith J. None
Senior Vice President
Miles, Deborah C. Vice President Scudder, Stevens & Clark Boston, MA
Vice President (until 9/97) L.L. Bean, Inc. Freeport, ME
Employee
Miller, Joan D. Senior Vice President State Street Research Investment Services, Inc. Boston, MA
Senior Vice President
(Vice President
until 7/96)
Moore, Jr., Thomas P. Vice President State Street Research Capital Trust Boston, MA
Senior Vice (until 11/96)
President Vice President State Street Research Exchange Trust Boston, MA
(until 2/97)
Vice President State Street Research Growth Trust Boston, MA
(until 2/97)
Vice President State Street Research Master Investment Trust Boston, MA
(until 2/97)
Vice President State Street Research Equity Trust Boston, MA
Vice President State Street Research Energy, Inc. Boston, MA
Director Hibernia Savings Bank Quincy, MA
Governor on the Association for Investment Management
Board of Governors and Research Charlottesville, VA
Morey, Andrew
Vice President None
Mulligan, JoAnne C. Vice President State Street Research Money Market Trust Boston, MA
Senior Vice President
(Vice President
until 7/96)
Orr, Stephen C. Member Technology Analysts of Boston Boston, MA
Vice President Member Electro-Science Analysts (of NYC) New York, NY
C-10
<PAGE>
Principal business
Name Connection Organization address of organization
- ---- ---------- ------------ -----------------------
Paddon, Steven W. Employee Metropolitan Life Insurance Company New York, NY
Vice President (until 10/96)
Pannell, James C. None
Senior Vice President
(Vice President
until 4/97)
Peters, Kim M. Vice President State Street Research Securities Trust Boston, MA
Senior Vice President
Poritzky, Dean E. Portfolio Manager Fidelity Investments Boston, MA
Vice President (until 4/97)
Pyle, David J. Analyst Oak Value Capital Management Durham, NC
Vice President (until 4/97)
Ragsdale, E.K. Easton Senior Vice President GFM International Investors, Inc. London, England
Senior Vice President
(Vice President
until 7/96)
Rawlins, Jeffrey A. None
Senior Vice President
(Vice President
until 7/96)
Rice III, Daniel Joseph Vice President State Street Research Equity Trust Boston, MA
Senior Vice President
Richards, Scott None
Vice President
Romich, Douglas A. Vice President GFM International Investors, Inc. London, England
Vice President Assistant Treasurer State Street Research Equity Trust Boston, MA
Assistant Treasurer State Street Research Financial Trust Boston, MA
Assistant Treasurer State Street Research Income Trust Boston, MA
Assistant Treasurer State Street Research Money Market Trust Boston, MA
Assistant Treasurer State Street Research Tax-Exempt Trust Boston, MA
Assistant Treasurer State Street Research Capital Trust Boston, MA
Assistant Treasurer State Street Research Exchange Trust
Assistant Treasurer State Street Research Growth Trust Boston, MA
Assistant Treasurer State Street Research Master Investment Trust Boston, MA
Assistant Treasurer State Street Research Securities Trust Boston, MA
Assistant Treasurer State Street Research Portfolios, Inc. Boston, MA
Ryan, Michael J. Vice President (until 2/98) Delaware Management Philadelphia, PA
Senior Vice President
Sanderson, Derek Senior Vice President Freedom Capital Management Boston, MA
Senior Vice President (until 10/97)
Saperstone, Paul None
Vice President
C-11
<PAGE>
Principal business
Name Connection Organization address of organization
- ---- ---------- ------------ -----------------------
Schrage, Michael None
Vice President
Schultz, David C. Director and Treasurer Mafraq Hospital Association Mafraq, Jordan
Executive Vice Member Association of Investment
President Management Sales Executives Atlanta, GA
Member, Investment Committee Lexington Christian Academy Lexington, MA
Shaver, Jr. C. Troy President, Chief Executive Officer State Street Research Investment Services, Inc. Boston, MA
Executive Vice and Executive Vice President
President
Shean, William G. None
Vice President
Shively, Thomas A. Vice President State Street Research Financial Trust Boston, MA
Director and Vice President State Street Research Money Market Trust Boston, MA
Executive Vice Vice President State Street Research Tax-Exempt Trust
President Director State Street Research Investment Services, Inc Boston, MA
Vice President State Street Research Securities Trust Boston, MA
Shoemaker, Richard D. Senior Vice President GFM International Investors Limited London, England
Senior Vice President
Stambaugh, Kenneth None
Vice President
(Assistant Vice
President until 9/97)
Strelow, Dan R. None
Senior Vice President
C-12
<PAGE>
Principal business
Name Connection Organization address of organization
- ---- ---------- ------------ -----------------------
Swanson, Amy McDermott None
Senior Vice President
Trebino, Anne M. Vice President SSRM Holdings, Inc. Boston, MA
Senior Vice President
Verni, Ralph F. Chairman, President, GFM International Investors, Inc.
Chairman, President, CEO and Director London, England
Chief Executive Chairman, President, Chief State Street Research Capital Trust Boston, MA
Officer and Executive Officer and Trustee
Director Chairman, President, Chief State Street Research Exchange Trust Boston, MA
Executive Officer and Trustee
Chairman, President, Chief State Street Research Growth Trust Boston, MA
Executive Officer and Trustee
Chairman, President, Chief State Street Research Master Investment Trust Boston, MA
Executive Officer and Trustee
Chairman, President, Chief State Street Research Securities Trust Boston, MA
Executive Officer and Trustee
Chairman, President, Chief State Street Research Equity Trust Boston, MA
Executive Officer and Trustee
Chairman, President, Chief State Street Research Financial Trust Boston, MA
Executive Officer and Trustee
Chairman, President, Chief State Street Research Income Trust Boston, MA
Executive Officer and Trustee
Chairman, President, Chief State Street Research Money Market Trust Boston, MA
Executive Officer and Trustee
Chairman, President, Chief State Street Research Portfolios, Inc. Boston, MA
Executive Officer and Director
Chairman, President, Chief State Street Research Tax-Exempt Trust Boston, MA
Executive Officer and Trustee
Chairman and Director State Street Research Investment Services, Inc. Boston, MA
(President and Chief Executive
Officer until 2/96)
Chairman and Director Metric Holdings, Inc. San Francisco, CA
Director and Officer Certain wholly-owned subsidiaries
of Metric Holdings, Inc.
Chairman of the Board and Director MetLife Securities, Inc. New York, NY
(until 1/97)
President, Chief Executive SSRM Holdings, Inc. Boston, MA
Officer and Director
Director CML Group, Inc. Boston, MA
Director Colgate University Hamilton, NY
Director State Street Research SICAV Luxembourg
C-13
<PAGE>
Principal business
Name Connection Organization address of organization
- ---- ---------- ------------ -----------------------
Wade, Dudley Vice President State Street Research Growth Trust Boston, MA
Freeman Vice President State Street Research Master Investment Trust Boston, MA
Senior Vice
President
Wallace, Julie K. None
Vice President
Weiss, James M. Vice President State Street Research Equity Trust Boston, MA
Senior Vice President Vice President State Street Research Exchange Trust Boston, MA
Vice President State Street Research Growth Trust Boston, MA
Vice President State Street Research Master Investment Trust Boston, MA
Vice President State Street Research Capital Trust Boston, MA
Vice President State Street Research Securities Trust Boston, MA
Westvold, Vice President State Street Research Securities Trust Boston, MA
Elizabeth McCombs
Senior Vice President
(Vice President
until 7/96)
Wilkins, Kevin Vice President State Street Research Investment Services, Inc. Boston, MA
Vice President Vice President Fidelity Investments Boston, MA
(until 7/97)
Various positions Fidelity Investments Boston, MA
(until 10/96)
Wilson, John T. Vice President State Street Research Equity Trust Boston, MA
Vice President Vice President State Street Research Master Investment Trust Boston, MA
Vice President Phoenix Investment Counsel, Inc. Hartford, CT
(until 6/96)
Wing, Darman A. Senior Vice President, Assistant State Street Research Investment Services, Inc. Boston, MA
Vice President, General Counsel and Asst. Clerk
Assistant Secretary Assistant Secretary and Assistant State Street Research Capital Trust Boston, MA
and Assistant General Counsel
General Counsel Assistant Secretary and Assistant State Street Research Exchange Trust Boston, MA
General Counsel
Assistant Secretary and Assistant State Street Research Growth Trust Boston, MA
General Counsel
Assistant Secretary and Assistant State Street Research Master Investment Trust Boston, MA
General Counsel
Assistant Secretary and Assistant State Street Research Securities Trust Boston, MA
General Counsel
Assistant Secretary and Assistant State Street Research Equity Trust Boston, MA
General Counsel
Assistant Secretary and Assistant State Street Research Financial Trust Boston, MA
General Counsel
Assistant Secretary and Assistant State Street Research Income Trust Boston, MA
General Counsel
Assistant Secretary and Assistant State Street Research Money Market Trust Boston, MA
General Counsel
Assistant Secretary and Assistant State Street Research Tax-Exempt Trust Boston, MA
General Counsel
Assistant Secretary and Assistant SSRM Holdings, Inc. Boston, MA
General Counsel
Woodbury, Robert S. None
Vice President
Woodworth, Jr., Kennard Vice President State Street Research Exchange Trust Boston, MA
Senior Vice Vice President State Street Research Growth Trust Boston, MA
President Vice President State Street Research Securities Trust Boston, MA
C-14
<PAGE>
Principal business
Name Connection Organization address of organization
- ---- ---------- ------------ -----------------------
Wu, Norman N. Partner Atlantic-Acton Realty Framingham, MA
Senior Vice President Director Bond Analysts Society of Boston Boston, MA
</TABLE>
C-15
<PAGE>
Item 29. Principal Underwriters
(a) State Street Research Investment Services, Inc. serves as a
principal underwriter for Registrant, and also acts as principal
underwriter for State Street Research Equity Trust, State Street
Research Financial Trust, State Street Research Income Trust,
State Street Research Money Market Trust, State Street Research
Tax-Exempt Trust, State Street Research Growth Trust, State
Street Research Capital Trust, State Street Research Securities
Trust and State Street Research Portfolios, Inc.
(b) Directors and Officers of State Street Research Investment
Services, Inc. are as follows:
(1) (2) (3)
Positions Positions
Name and Principal and Offices and Offices
Business Address with Underwriter with Registrant
- ---------------- ---------------- ---------------
Ralph F. Verni Chairman of Chairman of
One Financial Center the Board the Board,
Boston, MA 02111 and Director President,
Chief Executive
Officer and
Trustee
Peter C. Bennett Director Vice President
One Financial Center
Boston, MA 02111
Gerard P. Maus Executive Vice Treasurer
One Financial Center President,
Boston, MA 02111 Treasurer,
Chief Financial
Officer and Director
Thomas A. Shively Director None
One Financial Center
Boston, MA 02111
C. Troy Shaver, Jr. President, None
One Financial Center Chief Executive
Boston, MA 02111 Officer and Executive
Vice President
Francis J. McNamara, III Executive Vice Secretary
One Financial Center President, General
Boston, MA 02111 Counsel and Clerk
C-16
<PAGE>
(1) (2) (3)
Positions Positions
Name and Principal and Offices and Offices
Business Address with Underwriter with Registrant
- ---------------- ---------------- ---------------
Peter Borghi Senior Vice None
One Financial Center President
Boston, MA 02111
Paul V. Daly Senior Vice None
One Financial Center President
Boston, MA 02111
Susan M.W. DiFazio Senior Vice None
One Financial Center President
Boston, MA 02111
Joan D. Miller Senior Vice None
One Financial Center President
Boston, MA 02111
Darman A. Wing Senior Vice President, Assistant
One Financial Center Assistant General Secretary
Boston, MA 02111 Counsel and Assistant
Clerk
Robert M. Gunville Vice President None
One Financial Center
Boston, MA 02111
Frederick H. Jamieson Vice President None
One Financial Center and Assistant
Boston, MA 02111 Treasurer
Susan V. Martin Vice President None
One Financial Center
Boston, MA 02111
Deborah C. Miles Vice President None
One Financial Center
Boston, MA 02111
Amy L. Simmons Vice President Assistant
One Financial Center Secretary
Boston, MA 02111
Kevin Wilkins Vice President None
One Financial Center
Boston, MA 02111
C-17
<PAGE>
Item 30. Location of Accounts and Records
Gerard P. Maus
State Street Research & Management Company
One Financial Center
Boston, MA 02111
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) Registrant hereby undertakes to call a meeting of shareholders for
the purpose of voting upon the question of removal of a Trustee or Trustees when
requested to do so by the holders of at least 10% of the Registrant's
outstanding shares and, in connection with such meeting, to comply with the
provisions of Section 16(c) of the Investment Company Act of 1940 relating to
shareholder communications.
(b) The Registrant has elected to include the information required by
Item 5A of Form N-1A in its annual report to shareholders. The Registrant
undertakes to furnish each person to whom a prospectus is delivered with a copy
of the applicable fund's latest annual report to shareholders upon request and
without charge.
C-18
<PAGE>
NOTICE
A copy of the Declaration of Trust of the Registrant is on file with the
Secretary of State of The Commonwealth of Massachusetts and notice is hereby
given that the obligations of the Registrant hereunder, and the authorization,
execution and delivery of this amendment to the Registrant's Registration
Statement, shall not be binding upon any of the Trustees, shareholders,
nominees, officers, agents or employees of the Registrant as individuals or
personally, but shall bind only the property of the Funds comprising the series
of the Registrant, as provided in the Declaration of Trust. Each Fund of the
Registrant shall be solely and exclusively responsible for all of its direct or
indirect debts, liabilities, and obligations, and no other Fund shall be
responsible for the same.
C-19
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 11 to its Registration Statement on Form N-1A to be
signed on its behalf by the undersigned, thereto duly authorized, in the City of
Boston and The Commonwealth of Massachusetts on the 2nd day of March, 1998.
STATE STREET RESEARCH
MASTER INVESTMENT TRUST
By: *
---------------------------------------
Ralph F. Verni
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed on the
above date by the following persons in the capacities indicated.
Signature Capacity
* Trustee, Chairman of
______________________________ the Board and Chief
Ralph F. Verni Executive Officer
(principal executive
officer)
* Treasurer (principal
______________________________ financial and
Gerard P. Maus accounting officer)
* Trustee
______________________________
Steve A. Garban
* Trustee
______________________________
Malcolm T. Hopkins
* Trustee
______________________________
Edward M. Lamont
* Trustee
______________________________
Robert A. Lawrence
* Trustee
______________________________
Dean O. Morton
<PAGE>
* Trustee
______________________________
Thomas L. Phillips
* Trustee
______________________________
Toby Rosenblatt
* Trustee
______________________________
Michael S. Scott Morton
* Trustee
______________________________
Jeptha H. Wade
*By: /s/ Francis J. McNamara, III
--------------------------------------------------
Francis J. McNamara, III,
Attorney-in-Fact under Powers of
Attorney filed herein.
<PAGE>
1933 Act Registration No. 33-32729
1940 Act File No. 811-84
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM N-1A
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. __ [ ]
Post-Effective Amendment No. 11 [X]
and/or
REGISTRATION STATEMENT
UNDER THE
INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 25 [X]
-------------------
STATE STREET RESEARCH MASTER INVESTMENT TRUST
(Exact Name of Registrant as Specified in
Master Trust Agreement)
---------------------
EXHIBITS
<PAGE>
INDEX TO EXHIBITS
(2)(a) By-Laws *
(2)(b) Amendment to By-Laws effective September 30, 1992 *
(6)(a) Distribution Agreement with State Street Research Investment *
Services, Inc. (formerly, MetLife - State Street Investment
Services, Inc.)
(6)(c) Form of Bank and Bank-Affiliated Broker-Dealer Agreement *
(6)(d) Amendment to Distribution Agreement
(8)(a) Custodian Contract *
(8)(b) Amendment to Custodian Contract
(9) Agreement and Plan of Reorganization and Liquidation *
(10) Opinion and Consent of Counsel *
(11) Consent of Independent Accountants
(14)(a) State Street Research IRA: IRA Application; Terms and
Conditions; Transfer of Assets Request Form
(14)(c) State Street Research SIMPLE IRA: Application, Terms and
Conditions, and Disclosure Statement
(15) Plan of Distribution Pursuant to Rule 12(b)-1 *
(16) Calculation of Performance Data *
(18)(a) Powers of Attorney
(18)(b) Certificate of Board Resolution Respecting Powers of Attorney
(19)(a) Form of New Account Application
(19)(b) Form of Additional Services Application
(19)(c) Form of MetLife Securities, Inc. Application
(27) Financial Data Schedules
- ----------
* Restated in electronic format.
Exhibit (2)(a)
BY-LAWS
OF
STATE STREET INVESTMENT TRUST
ARTICLE I
Agreement and Declaration
of Trust; Principal Office
1.1 Agreement and Declaration of Trust. These By-Laws shall be subject to
the Agreement and Declaration of Trust (also referred to as the Master Trust
Agreement), as from time to time in effect (the "Declaration of Trust"), of
State Street Investment Trust, the Massachusetts business trust established by
the Declaration of Trust (the "Trust").
1.2 Principal Office of the Trust. The principal office of the Trust shall
be located in Boston, Massachusetts.
ARTICLE 2
Meetings of Trustees
2.1 Regular Meetings. Regular meetings of the Trustees may be held without
call or notice at such places and at such times as the Trustees may from time to
time determine, provided that notice of the first regular meeting following any
such determination shall be given to absent Trustees.
2.2 Special Meetings. Special meetings of the Trustees may be held at any
time and at any place designated in the call of the meeting when called by the
Chairman of the Board of Trustees, the President or the Treasurer or by two or
more Trustees, sufficient notice thereof being given to each Trustee by the
Secretary or an Assistant Secretary or by the officer or the Trustees calling
the meeting.
2.3 Notice. It shall be sufficient notice to a Trustee of a special meeting
to send notice by mail at least forty-eight hours or by telegram at least
twenty-four hours before the meeting addressed to the Trustee at his usual or
last known business or residence address or to give notice to him in person or
by telephone at least twenty-four hours before the meeting. Notice of a meeting
need not be given to any Trustee if a written waiver of notice, executed by him
before or after the meeting, is filed with the records of the meeting, or to any
Trustee who attends the meeting without protesting prior thereto or at the
commencement thereof the lack of notice to him. Neither notice of a meeting nor
a waiver of notice need specify the purpose of the meeting.
<PAGE>
2.4 Quorum. At any meeting of the Trustees one-half of the Trustees then in
office shall constitute a quorum. Any meeting may be adjourned from time to time
by a majority of the votes cast upon the question, whether or not a quorum is
present, and the meeting may be held as adjourned without further notice.
2.5 Participation by Telephone. One or more of the Trustees or of any
committee of the Trustees may participate in a meeting thereof by means of a
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at a meeting.
ARTICLE 3
Officers
3.1 Enumeration; Qualification. The officers of the Trust shall be a
President, a Treasurer, a Secretary and such other officers, including a
Chairman of the Board of Trustees, one or more Vice Presidents, one or more
Assistant Treasurers and one or more Assistant Secretaries, if any, as the
Trustees from time to time may in their discretion elect. The Trust may also
have such agents as the Trustees from time to time may in their discretion
appoint. The Chairman of the Board of Trustees shall be a Trustee and may, but
need not be, a shareholder of the Trust; and any other officer may, but need not
be, a Trustee or shareholder of the Trust. Any two or more offices may be held
by the same person.
3.2 Election. The President, the Treasurer and the Secretary shall be
elected annually by the Trustees at a meeting held within the first four months
of the Trust's fiscal year. The meeting at which the officers are elected shall
be known as the annual meeting of Trustees. Other officers, if any, may be
elected or appointed by the Trustees at said meeting or at any other time.
Vacancies in any office may be filled at any time.
3.3 Tenure. The President, the Treasurer and the Secretary shall hold
office until the next annual meeting of the Trustees and until their respective
successors are chosen and qualified, or in each case until he sooner dies,
resigns, is removed or becomes disqualified. Each other officer shall hold
office and each agent shall retain authority at the pleasure of the Trustees.
3.4 Powers. Subject to the other provisions of these By-Laws, each officer
shall have, in addition to the duties and powers herein and in the Declaration
of Trust set forth, such duties and powers as are commonly incident to the
office occupied by him as if the Trust were organized as a Massachusetts
business
-2-
<PAGE>
corporation and such other duties and powers as the Trustees may from time to
time designate.
3.5 Chairman of the Board of Trustees. The Chairman of the Board of
Trustees, if any, shall preside at all meetings of the shareholders and of the
Trustees unless otherwise provided by the Trustees, and shall perform such other
duties and shall have such other powers as the Trustees may determine from time
to time.
3.6 President. The President shall be the chief executive officer of the
Trust. In the absence of the Chairman of the Board of Trustees, the President
shall preside at meetings of the shareholders and of the Trustees unless
otherwise provided by the Trustees.
3.7 Vice President. The Vice President, or if there be more than one Vice
President, the Vice Presidents in the order determined by the Trustees (or if
there be no such determination, then in the order of their election), shall in
the absence of the President or in the event of his inability or refusal to act,
perform the duties of the President, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the President. The Vice
Presidents shall perform such other duties and have such other powers as the
Board of Trustees may from time to time prescribe.
3.8 Treasurer. The Treasurer shall be the chief financial and accounting
officer of the Trust, and shall, subject to the provisions of the Declaration of
Trust and to any arrangement made by the Trustees with a custodian, investment
adviser or manager, or transfer, shareholder servicing or similar agent, be in
charge of the valuable papers, books of account and accounting records of the
Trust, and shall have such other duties and powers as may be designated from
time to time by the Trustees or by the President.
3.9 Assistant Treasurer. The Assistant Treasurer, or if there shall be more
than one, the Assistant Treasurers in the order determined by the Trustees (or
if there be no such determination, then in the order of their election), shall,
in the absence of the Treasurer or in the event of his inability or refusal to
act, perform the duties and exercise the powers of the Treasurer and shall
perform such other duties and have such other powers as the Board of Trustees
may from time to time prescribe.
3.10 Secretary. The Secretary shall record all proceedings of the
shareholders and the Trustees in books to be kept therefor, which books or a
copy thereof shall be kept at the principal office of the Trust. In the absence
of the Secretary from any meeting of the shareholders or Trustees, an Assistant
Secretary, or if there be none or if he is absent, a temporary secretary chosen
at such meeting, shall record the proceedings thereof in the aforesaid books.
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3.11 Assistant Secretary. The Assistant Secretary, or if there be more than
one, the Assistant Secretaries in the order determined by the Trustees (or if
there be no determination, then in the order of their election), shall, in the
absence of the Secretary or in the event of his inability or refusal to act,
perform the duties and exercise the powers of the Secretary and shall perform
such other duties and have such other powers as the Board of Trustees may from
time to time prescribe.
3.12 Resignations and Removals. Any Trustee or officer may resign at any
time by written instrument signed by him and delivered to the Chairman of the
Board of Trustees, the President or the Secretary or to a meeting of the
Trustees. Such resignation shall be effective upon receipt unless specified to
be effective at some other time. The Trustees may remove any officer elected by
them with or without cause. Except to the extent expressly provided in a written
agreement with the Trust, no Trustee or officer resigning and no officer removed
shall have any right to any compensation for any period following his
resignation or removal, or any right to damages on account of such removal.
ARTICLE 4
Committees
4.1 General. The Trustees, by vote of a majority of the Trustees then in
office, may elect from their number an Executive Committee or other committees
and may delegate thereto some or all of their powers except those which by law,
by the Declaration of Trust, or by these By-Laws may not be delegated. Except as
the Trustees may otherwise determine, any such committee may make rules for the
conduct of its business, but unless otherwise provided by the Trustees or in
such rules, its business shall be conducted so far as possible in the same
manner as is provided by these By-Laws for the Trustees themselves. All members
of such committees shall hold such offices at the pleasure of the Trustees. The
Trustees may abolish any such committee at any time. Any committee to which the
Trustees delegate any of their powers or duties shall keep records of its
meetings and shall report its action to the Trustees. The Trustees shall have
power to rescind any action of any committee, but no such rescission shall have
retroactive effect.
ARTICLE 5
Reports
5.1 General. The Trustees and officers shall render reports at the time and
in the manner required by the Declaration of Trust or any applicable law.
Officers and committees shall
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render such additional reports as they may deem desirable or as may from time to
time be required by the Trustees.
ARTICLE 6
Fiscal Year
6.1 General. The fiscal year of the Trust shall be fixed by resolution of
the Trustees.
ARTICLE 7
Seal
7.1 General. The seal of the Trust shall consist of a flat-faced die with
the word "Massachusetts", together with the name of the Trust and the year of
its organization cut or engraved thereon, but, unless otherwise required by the
Trustees, the seal shall not be necessary to be placed on, and its absence shall
not impair the validity of, any document, instrument or other paper executed and
delivered by or on behalf of the Trust.
ARTICLE 8
Execution of Papers
8.1 General. All deeds, leases, contracts, notes and other obligations made
by the Trustees may be signed by the President, any Vice President, the
Treasurer or Assistant Treasurer, Secretary or Assistant Secretary, or any agent
of the Trust, and need not bear the seal of the Trust.
ARTICLE 9
Issuance of Share Certificates
9.1 Share Certificates. In lieu of issuing certificates for shares, the
Trustees or the transfer agent may either issue receipts therefor or may keep
accounts upon the books of the Trust for the record holders of such shares, who
shall in either case be deemed, for all purposes hereunder, to be the holders of
certificates for such shares as if they had accepted such certificates and shall
be held to have expressly assented and agreed to the terms hereof.
The Trustees may at any time authorize the issuance of share certificates
either in limited cases or to all shareholders. In that event, a shareholder may
receive a certificate stating the number of shares owned by him, in such form as
shall be prescribed from time to time by the Trustees. Such certificate
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shall be signed by the President or a Vice President and by the Treasurer or
Assistant Treasurer. Such signatures may be facsimiles if the certificate is
signed by a transfer agent, or by a registrar, other than a Trustee, officer or
employee of the Trust. In case any officer who has signed or whose facsimile
signature has been placed on such certificate shall cease to be such officer
before such certificate is issued, it may be issued by the Trust with the same
effect as if he were such officer at the time of its issue.
9.2 Loss of Certificates. In case of the alleged loss or destruction or the
mutilation of a share certificate, a duplicate certificate may be issued in
place thereof, upon such terms as the Trustees shall prescribe.
9.3 Issuance of New Certificate to Pledgee. The Trustees may, in their
discretion, institute a policy of enabling a pledgee of shares transferred as
collateral security to obtain a new certificate if the instrument of transfer
substantially describes the debt or duty that is intended to be secured thereby.
Such new certificate shall express on its face that it is held as collateral
security, and the name of the pledgor shall be stated thereon, who alone shall
be liable as a shareholder, and entitled to vote thereon.
9.4 Discontinuance of Issuance of Certificates. The Trustees may at any
time discontinue the issuance of share certificates and may, by written notice
to each shareholder, require the surrender of share certificates to the Trust
for cancellation. Such surrender and cancellation shall not affect the ownership
of shares in the Trust.
ARTICLE 10
Transactions By Certain Persons
10.1 Long and Short Positions. No Trustee or officer of the Trust and
neither the investment adviser nor any distributor (should a distributor be
appointed pursuant to the Master Trust Agreement) for the Trust nor any officer
or Director of the investment adviser or such distributor shall take a long or
short position in the securities issued by the Trust, except that this provision
shall not prevent:
(a) Such distributor from purchasing from the Trust shares if such
purchases are limited (except for reasonable allowances for clerical errors,
delays and errors of transmission and cancellation of orders) to purchases for
the purpose of filling purchase orders received by such distributor, and
provided that orders to purchase from the Trust are entered with the Trust upon
receipt by such distributor of such purchase orders.
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(b) Such distributor from maintaining a market for shares of the Trust as
agent for the Trust.
(c) The purchase at any time from the Trust or from such distributor of
shares issued by the Trust by any officer, Director or Trustee of the Trust, of
its investment adviser or of such distributor at the price available to the
public at the moment of such purchase, or, to the extent that such person is a
shareholder, at the price available to shareholders of the Trust generally at
the moment of such purchase.
10.2 Dealings with Affiliates. No officer, Trustee or agent of the Trust
shall deal for or on behalf of the Trust with himself as principal or agent, or
with any partnership, association or corporation in which he has a material
financial interest, provided that the foregoing provision shall not prevent:
(a) Officers and Trustees of the Trust from buying, holding or selling
shares in the Trust or from being officers or Directors of or financially
interested in the investment adviser or distributor, if any, of the Trust;
(b) Purchases of investments for the portfolio of the Trust or sales of
investments owned by the Trust through a securities dealer who is, or one or
more of whose partners, stockholders, officers or Directors is, an officer or
Trustee of the Trust, if such transactions are handled in the capacity of broker
only and commissions charged to the Trust do not exceed customary brokerage
charges for such services;
(c) Employment of legal counsel, registrar, transfer agent, dividend
disbursing agent or custodian who is, or has a partner, stockholder, officer or
director who is, an officer or Trustee of the Trust, if only customary fees are
charged for services to the Trust;
(d) Sharing statistical, research and management expenses, including office
hire and services, with any other company in which an officer or Trustee of the
Trust is an officer or director or financially interested;
(e) Transactions for which an exemption has been obtained pursuant to
Section 17(a) of the Investment Company Act of 1940.
10.3 Notice of Ownership. The Secretary of the Trust shall request each
officer and Director or Trustee of the Trust and of its investment adviser to
notify the Trust at least quarter annually of the indentity of all issuers whose
securities are held by the Trust of which such officer, Director or Trustee owns
as much as one-half of one per cent (.5%) of the outstanding shares or
securities, or both (taken at market value).
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10.4 Loans. The Trust shall make no loans to any officer, Trustee or
employee of the Trust or to the investment adviser or distributor, if any, of
the Trust or to their respective officers, directors or employees.
ARTICLE 11
Amendments to the By-Laws
11.1 General. These By-Laws may be amended or repealed, in whole or in
part, by a majority of the Trustees then in office at any meeting of the
Trustees, or by one or more writings signed by such a majority.
ARTICLE 12
Redemption and Repurchase of Shares
12.1 Fees. The redemption and repurchase of shares of the Trust may be
subject to a redemption fee or repurchase fee, not exceeding one per cent (1%)
of the net asset value of the shares redeemed or repurchased, as may be fixed
from time to time by the Trustees.
The foregoing By-Laws were adopted on February 7, 1989.
/s/ Constantine Hutchins, Jr.
-----------------------------
Constantine Hutchins, Jr.
Clerk
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Exhibit (2)(b)
State Street Master Investment Trust
Amendment No. 1 to the By-Laws
The first sentence of Section 3.6 of Article III of the By-Laws of the
Master Investment Trust is hereby amended to read as follows:
"Unless otherwise determined by the Trustees, the President shall be the
Chief Executive Officer of the Trust."
Effective as of:
September 30, 1992 /s/ Constantine Hutchins, Jr.
-----------------------------
Constantine Hutchins, Jr.
Secretary
Exhibit (6)(a)
DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT made as of this 1st day of May 1990, by and between
MetLife - State Street Investment Services, Inc., a corporation organized under
the laws of the Commonwealth of Massachusetts having its place of business in
Boston, Massachusetts (the "Distributor"), and State Street Master Investment
Trust, a Massachusetts business trust having its principal place of business in
Boston, Massachusetts (the "Master Trust"), which Master Trust proposes to offer
shares of beneficial interest in different series representing interests in
separate portfolios of assets (each series being referred to herein as a "Fund"
and such series being referred to herein collectively as the "Funds").
WITNESSETH:
In consideration of the agreements herein contained and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties, it is agreed:
1. Appointment of Distributor.
(a) Appointment. The Master Trust hereby appoints the Distributor as
its exclusive agent to sell and distribute shares of the Fund in existence as of
the date hereof (the "Initial Fund") and the Distributor hereby accepts such
appointment and agrees during the term of this Agreement to provide the services
and to assume the obligations herein set forth. In the event that the Master
Trust establishes one or more series of shares other than the Initial Fund with
respect to which it desires to retain the Distributor to serve as distributor
and principal underwriter hereunder, it shall so notify the Distributor in
writing. If the Distributor is willing to render such services, it shall so
notify the Master Trust in writing, whereupon such series of shares shall become
a Fund hereunder. In such event a writing signed by both the Master Trust and
the Distributor shall be annexed hereto as a part hereof indicating that such
additional series of shares has become a Fund hereunder.
(b) Sales of Shares. Shares of each Fund shall be sold at the offering
price thereof as from time to time determined in the manner herein provided. The
Master Trust agrees that it will not, without the Distributor's consent, sell or
agree to sell any shares of a Fund otherwise than through the Distributor,
except that the Master Trust may (a) sell shares for not less than the net asset
value thereof as an investment to such persons or classes of persons as may be
indicated in the Prospectus of the Master Trust as amended and in effect from
time to time; (b) issue or sell shares for not less than the net asset value
thereof directly to holders of shares of any Fund upon such terms
<PAGE>
and for such consideration, if any, as it may determine, whether in connection
with the distribution of subscription or purchase rights, the payment or
reinvestment of distributions or dividends, the exercise of any applicable
reinvestment privilege, or otherwise; (c) issue or sell shares for not less than
the net asset value thereof of any Fund to the shareholders of any other Fund or
investment company in connection with the exercise of exchange privileges
offered by the Master Trust; and (d) issue shares for not less than the net
asset value thereof in connection with a merger, consolidation or acquisition of
assets on such basis as may be authorized or permitted under the Investment
Company Act of 1940, as amended (the "1940 Act").
2. Basis of Sale of Shares; Selected Dealers. The Distributor does not
agree to sell any specific number of shares. Shares will be sold by the
Distributor as agent for Funds and the Master Trust only against orders
therefor. The Distributor will not purchase shares except as agent for the
Master Trust. Notwithstanding anything herein to the contrary, the Master Trust
may terminate, suspend or withdraw the offering of shares whenever, in its sole
discretion, it deems such action desirable. In connection with its performance
of services hereunder, the Distributor may engage other persons to act as
selected dealers.
3. Compensation.
(a) Offering Price/Sales Charge. The offering price for shares of any
Fund of the Master Trust shall be the "net asset value per share" for that Fund
determined in accordance with the Master Trust Agreement of the Master Trust, as
amended (the "Master Trust Agreement"), plus a sales charge payable to the
Distributor as set forth in the Master Trust's Prospectus as from time to time
amended and in effect. The Distributor may reallow such portions of such sales
charges as dealer concessions to dealers through whom sales are made as the
Distributor may determine consistent with the terms of the Master Trust's
Prospectus as from time to time amended and in effect; provided, however, that
the sales charge to each purchaser of shares shall not exceed that set forth for
such category of purchaser in the Master Trust's Prospectus as from time to time
amended and in effect. The Distributor may also pay from its own funds a monthly
commission, if any, with respect to sales to the extent consistent with and as
contemplated by the Master Trust's Prospectus as from time to time amended and
in effect. The net asset value per share for each Fund shall be determined at
such time and on such days as are established by the Board of Trustees of the
Master Trust from time to time.
(b) 12b-1 Expenses. In the event that the Master Trust adopts a
distribution plan pursuant to Rule 12b-1 under the 1940 Act (the "12b-1 Plan"),
the Distributor agrees to fulfill any obligations it may have under the 12b-1
Plan.
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4. Manner of Offering. The Distributor will comply with the securities laws
of any jurisdiction in which it sells, directly or indirectly, any shares of the
Master Trust. The Distributor also agrees to furnish to the Master Trust
sufficient copies of any sales literature it intends to use in connection with
any sales of shares in adequate time for the Master Trust to review such sales
literature. The Distributor agrees that it will be responsible for filing and
clearing all such sales literature with the proper authorities before the same
is put in use to the extent required by applicable law, and not to use the same
until so filed and cleared.
The Distributor and the Master Trust each shall have the right to accept or
reject orders for the purchase of shares of the Master Trust. Any consideration
which the Distributor may receive in connection with a rejected purchase order
will be returned promptly to the prospective purchaser. The Distributor agrees
promptly to issue confirmations of all accepted purchase orders and to transmit
a copy of such confirmations to the Master Trust, or, if so directed, to any
duly appointed transfer or shareholder servicing agent of the Master Trust. If
the originating dealer shall fail to make timely settlement of its purchase
order in accordance with the rules of the National Association of Securities
Dealers, Inc. or other applicable requirements, the Distributor shall have the
right to cancel such purchase order and to hold the originating dealer
responsible. The Distributor agrees promptly to reimburse the Master Trust for
any amount by which the Master Trust's losses attributable to any such
cancellations or to accepted purchase orders exceed gains realized by the Master
Trust for either of such reasons in respect of other purchase orders. The Master
Trust shall register or cause to be registered all shares sold by the
Distributor pursuant to the provisions hereof in such name or names and amounts
as the Distributor may request from time to time.
The Distributor agrees that if any person tenders to the Master Trust
for redemption any shares purchased from the Master Trust within seven days of
the redemption request, the Distributor will promptly pay to the Master Trust
the full sales commission paid with respect to the shares so tendered for
redemption (in the case of sales by selected dealers, such payment shall be made
promptly after the Distributor's receipt of the same from the selected dealer
responsible for the sale), and no 12b-1 or other payments shall be payable with
respect thereto.
The Distributor hereby agrees to act as agent for the Master Trust in
connection with any share repurchase arrangements from time to time offered by
the Master Trust in accordance with the terms of the Master Trust's Prospectus
as from time to time amended.
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5. Securities Law. The Master Trust has delivered to the Distributor a copy
of its current Prospectus. The Master Trust agrees that it will use its best
efforts to continue the effectiveness of its Registration Statement under the
Securities Act of 1933, as amended (the "Securities Act"), and the 1940 Act. The
Master Trust further agrees to prepare and file any amendments to such
Registration Statement and any supplemental data as may be necessary in order to
comply with the Securities Act and the 1940 Act. The Master Trust is presently
registered under the 1940 Act as an investment company, and it will use its best
efforts to maintain such registration and to comply with the requirements of
said Act.
At the Distributor's request, the Master Trust will take such steps as may
be necessary and feasible to qualify shares of the Funds for sale in states,
territories or dependencies of the United States of America, in the District of
Columbia and in foreign countries, in accordance with the laws thereof, and to
renew and extend any such qualification; provided, however, that the Master
Trust shall not be required to qualify shares or to maintain the qualification
of shares in any state, territory, dependency, district or country where it
shall deem such qualification disadvantageous to the Master Trust.
The Distributor agrees that it will (i) not use, distribute or disseminate
or authorize the use, distribution or dissemination by others in connection with
the sale of shares of the Funds, any statement, other than those contained in
the Master Trust's current Prospectus, except such supplemental literature or
advertising as shall be approved by the Master Trust, (ii) conform to the
requirements of all state and federal laws and the Rules of Fair Practice of the
National Association of Securities Dealers, Inc. relating to the sale of shares
of the Master Trust (including, without limitation, the maintenance of effective
broker-dealer registrations as required), and (iii) observe and be bound by all
the provisions of the Master Trust Agreement (and of any fundamental policies
adopted by the Master Trust pursuant to the 1940 Act, notice of which shall have
been given to the Distributor) which at the time in any way require, limit,
restrict or prohibit or otherwise regulate any action on the part of the
Distributor.
The Distributor further agrees that:
(a) the Distributor shall furnish to the Master Trust any information
with respect to the Distributor within the purview of any reports or
registrations required to be filed with any governmental authority; and
(b) the Distributor will not make any representations inconsistent
with the Registration Statement of the Master Trust filed under the Securities
Act, as from time to time amended and in effect.
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6. Allocation of Expenses.
(a) The Funds, either directly or through their investment adviser or
investment advisers, will be responsible for, and shall pay their allocable
portions of the expenses of:
(i) providing all necessary services, including fees and
disbursements of counsel, related to the preparation, setting in type, printing
and filing of any registration statement and/or prospectus required under the
Securities Act or the 1940 Act or under state securities laws covering their
shares, and all amendments and supplements thereto, the mailing of any such
prospectus to existing shareholders, and preparing, setting in type, printing
and mailing of periodic reports to existing shareholders;
(ii) the cost of all registration or qualification fees relating
to the Funds' shares, including the fees or expenses of qualifying the Master
Trust as a broker or dealer under laws of any state, if any;
(iii) the cost of preparing temporary and permanent share
certificates for shares, if any; and
(iv) any and all federal and state issue and/or transfer taxes
payable upon the issue by or (in the case of treasury shares) transfer from a
Fund of the shares distributed hereunder.
(b) The Distributor agrees that, after the Master Trust's Prospectus
and periodic reports have been set in type, it will bear the expense of printing
and distributing any copies thereof which are to be used in connection with the
offering of shares to prospective investors. The Distributor further agrees that
it will bear the expenses of preparing, printing and distributing any other
literature used by the Distributor or furnished by it for use in connection with
the offering of the shares for sale to the public, and any expenses of
advertising in connection with such offering. The Distributor will also pay fees
and expenses related to its registrations as a broker-dealer and fees for
services rendered by the Master Trust's transfer agent on behalf of the
Distributor.
(c) The Funds will be responsible for, and shall pay the expenses of,
maintaining shareholder accounts and furnishing or causing to be furnished to
each shareholder a statement of his account.
7. Distributor Is Independent Contractor. The Distributor shall be an
independent contractor. The Distributor is responsible for its own conduct, for
the employment, control and conduct of its agents and employees and for injury
to such agents or employees or to others through its agents or employees. The
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Distributor assumes full responsibility for its agents and employees under
applicable laws and agrees to pay all employer taxes relating thereto.
8. Term and Termination; Amendment.
(a) Term and Termination. This Agreement shall become effective with
respect to each Initial Fund as of the later of (i) the date on which a
Registration Statement with respect to its shares becomes effective under the
Securities Act, (ii) the date on which such Initial Fund commences offering its
shares to the public; and, with respect to any additional Fund, (i) on the date
of receipt by the Master Trust of notice from the Distributor in accordance with
Section l(a) hereof that the Distributor is willing to serve as Distributor with
respect to such Fund, or (ii) such other date with respect to an additional Fund
as the Master Trust and the Distributor mutually agree. Unless terminated as
herein provided, this Agreement shall remain in full force and effect with
respect to each Initial Fund until the date which is two years after the
effective date of this Agreement with respect to such Initial Fund, and, with
respect to each additional Fund, for two years from the date on which such Fund
becomes a Fund hereunder. Subsequent to such initial periods of effectiveness
this Agreement shall continue in full force and effect, subject to the last
sentence of this Section 8(a), for successive one-year periods with respect to
each Fund so long as such continuance with respect to such Fund is approved at
least annually (a) by either the Trustees of the Master Trust or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act) of
such Fund, and (b) in either event, by the vote of a majority of the Trustees of
the Master Trust who are not parties to this Agreement or "interested persons"
(as defined in the 1940 Act) of any such party or the Master Trust and who have
no direct or indirect interest in the operation of any 12b-1 Plan or this
Agreement, cast in person at a meeting called for the purpose of voting on such
approval. This Agreement may be terminated with respect to the Master Trust or
any Fund at any time, without payment of any penalty, by a vote of (a) a
majority of the Trustees who are not "interested persons" of the Master Trust
(as defined in the 1940 Act) and who have no direct or indirect financial
interest in the operation of any 12b-1 Plan or this Agreement or (b) a majority
of the outstanding voting securities of the Master Trust or that Fund, or by the
Distributor, as the case may be, in each case on sixty (60) days' prior written
notice of the other party.
(b) Amendment. Any amendment to this Agreement shall become effective
with respect to a Fund upon approval in writing of the Distributor and the
Master Trust (subject in the latter case to approval by a majority of the
Trustees and a majority of the Trustees who are not "interested persons" of the
Master Trust (as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of any 12b-1 Plan; provided, however, that
amendments relating to any 12b-1 Plan shall not
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require the consent of the Distributor.
(c) Approval, Amendment or Termination by Individual Fund. Any
approval, amendment or termination of this Agreement with respect to any Fund
shall be effective to continue, amend or terminate this Agreement with respect
to such Fund notwithstanding (i) that such action has not been approved with
respect to any other Fund affected thereby, and (ii) that such action has not
been approved by the shareholders of such Fund, unless such action shall be
required by any applicable law or otherwise.
9. Assignment. This Distribution Agreement may not be assigned by the
Distributor and shall automatically terminate in the event of an attempted
assignment by the Distributor; provided, however, that the Distributor may
employ or enter into agreements with such other person, persons, corporation or
corporations, as it shall determine in order to assist it in carrying out this
Agreement, including, without limitation, selected dealers as contemplated by
Section 2.
10. Indemnification by Distributor. The Distributor agrees to indemnify and
hold harmless the Master Trust or any other person who has been, is, or may
hereafter be an officer, Trustee, employee or agent of the Master Trust against
any loss, damage or expense reasonably incurred by any of them in connection
with any claim or in connection with any action, suit or proceeding to which any
of them may be a party, which arises out of or is alleged to arise out of or is
based upon any violation of any of its representations or covenants herein
contained or any untrue statement or alleged untrue statement of a material
fact, or the omission or alleged omission to state a material fact necessary to
make the statements made not misleading, on the part of the Distributor or any
agent or employee of the Distributor or any other person for whose acts the
Distributor is responsible or is alleged to be responsible (such as any selected
dealer or person through whom sales are made pursuant to an agreement with the
Distributor), whether made orally or in writing, unless such statement or
omission was made in or in reliance upon written information furnished by the
Master Trust. The term "expenses" for purposes of this and the next paragraph
includes reasonable attorneys' fees and amounts paid in satisfaction of
judgments or in settlements which are made with the Distributor's consent. The
foregoing rights of indemnification shall be in addition to any other rights to
which any of the foregoing indemnified parties may be entitled as a matter of
law.
11. Indemnification by Master Trust. The Master Trust agrees to indemnify
and hold harmless the Distributor and each person who has been, is, or may
hereafter be an officer, director, employee or agent of the Distributor against
any loss, damage or expense reasonably incurred by any of them in connection
with any claim or in connection with any action, suit or proceeding to which any
of them may be party, which arises out
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of or is alleged to arise out of or is based upon a violation of any of its
covenants herein contained or any untrue or alleged untrue statement of material
fact, or the omission or alleged omission to state a material fact necessary to
make the statements made not misleading, in a Registration Statement or
Prospectus of the Master Trust, or any amendment or supplement thereto, unless
such statement or omission was made in reliance upon written information
furnished by the Distributor. The foregoing rights of indemnification shall be
in addition to any other rights to which any of the foregoing indemnified
parties may be entitled as a matter of law. Nothing contained herein shall
relieve the Distributor of any liability to the Master Trust or its shareholders
to which the Distributor would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
reckless disregard of its obligations and duties hereunder.
12. Non-Exclusive Agreement. The services of the Distributor to the Master
Trust hereunder shall not be deemed to be exclusive, and the Distributor shall
be free to (a) render similar services to, and act as underwriter or distributor
in connection with the distribution of shares of, other investment companies,
and (b) engage in any other businesses and activities from time to time.
13. Governing Law; Counterparts. This Agreement shall be construed in
accordance with the laws of the Commonwealth of Massachusetts. This Agreement
may be executed in any number of counterparts, each of which shall be deemed to
be an original, but such counterparts shall, together, constitute only one
instrument.
14. Prior Agreements Superseded; Construction. This Agreement supersedes
any prior agreement relating to the subject matter hereof between the parties
hereto. Where the context of this Agreement so permits, each of the masculine,
feminine and neuter genders shall be deemed to denote the other two genders, the
singular to denote the plural and the plural to denote the singular. Without
limiting the generality of the foregoing, all references to the Master Trust's
Prospectus shall include all Prospectuses thereunder.
15. Notices. Notices under this Agreement 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 Agreement for this purpose shall be One Financial Center, Boston,
Massachusetts 02111.
16. Limitation of Liability. The term "State Street Master Investment
Trust" means and refers to the Trustees from time to time serving under the
Master Trust Agreement of the Master Trust dated February 7, 1989 as the same
may subsequently have been, or
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subsequently may be, amended. It is expressly agreed that the obligations of the
Master Trust hereunder shall not be binding upon any of the Trustees,
shareholders, nominees, officers, agents or employees of the Master Trust as
individuals or personally, but shall bind only the trust property of the Master
Trust, as provided in the Master Trust Agreement of the Master Trust. The
execution and delivery of this Agreement have been authorized by the Trustees of
the Master Trust and signed by an officer of the Master Trust, acting as such,
and neither such authorization nor such execution and delivery shall be deemed
to have been made individually or to impose any personal liability, but shall
bind only the trust property of the Master Trust as provided in its Master Trust
Agreement. The Master Trust Agreement of the Master Trust further provides, and
it is expressly agreed, that each Fund of the Master Trust shall be solely and
exclusively responsible for the payment of its debts, liabilities and
obligations and that no other Fund shall be responsible or liable for the same.
IN WITNESS WHEREOF, this Agreement has been executed for the Distributor
and the Master Trust by their duly authorized officers, as of the date first set
forth above.
METLIFE - STATE STREET
INVESTMENT SERVICES, INC.
By: /s/ David P. McLean
-------------------
David P. McLean
STATE STREET MASTER
INVESTMENT TRUST
By: /s/ Constantine Hutchins, Jr.
-----------------------------
Constantine Hutchins, Jr.
-9-
Exhibit (6)(c)
BANK AND BANK AFFILIATED BROKER-DEALER AGREEMENT
(FULLY DISCLOSED BASIS)
Dated as of:
------------------------
To:
----------------------------------------------
(Exact legal name of bank or bank affiliate)
----------------------------------------------
(Address)
----------------------------------------------
----------------------------------------------
(Attn)
We have been appointed to serve as an agent and a principal underwriter
as defined in the Investment Company Act of 1940 (the "1940 Act") for the
purpose of selling and distributing shares (the "Shares") of each of the
portfolio series, as specified from time to time, of certain investment
companies, including, but not limited to, the MetLife-State Street trusts, the
State Street trusts and MetLife Portfolios, Inc. Hereinafter the specified
portfolio series shall be denoted individually as "Fund" and collectively as
"Funds," and the investment companies shall be denoted individually as
"Investment Company" and collectively as "Investment Companies" solely for
purposes of this agreement. We are hereby inviting you, subject to the terms and
conditions set forth below, to make available to your customers Shares of the
Funds.
1. Acceptance of Orders.
(a) The customers in question are for all purposes your customers
and not our customers. We shall execute transactions for each of your customers
only upon your
<PAGE>
authorization, it being understood in all cases that (i) you are acting as the
agent for the customer; (ii) the transactions are subject to the federal and
state securities laws without recourse against you by the customer; (iii) as
between you and the customer, the customer will have beneficial ownership of the
securities; (iv) each transaction is initiated solely upon the order of the
customer; (v) each transaction is for the account of the customer and not for
your account; and (vi) you shall not have any authority in any transactions to
act as our agent or agent of the Funds.
(b) Orders received from you will be accepted by us and the
Investment Companies only at the public offering price applicable to each order.
The public offering price shall be the net asset value per Share plus any sales
charge payable upon the purchase of Shares of such Fund or class thereof as
specified in the then current prospectus applicable to such Shares, as amended
and in effect from time to time (the "Prospectus"). The public offering price
may reflect scheduled variations in, or the elimination of the sales charge on
sales of the Shares either generally to the public or in connection with special
purchase plans, as described in the Prospectus and related Statement of
Additional Information. You agree that you will apply any scheduled variation
in, or elimination of, the sales charge uniformly to all offerees in the class
specified in the Prospectus. Upon acceptance of an order we shall confirm the
order directly to the customer on a fully disclosed basis in writing and a copy
of each confirmation shall be sent simultaneously to you. The procedures
relating to the handling of orders shall be subject to instructions which we
shall provide from time to time to you. We and the Investment Companies reserve
the right to reject any purchase request in our sole discretion.
2. Agency Commission. Any compensation received by you with respect to
the sale of shares of a Fund shall be deemed to be charged by you to your
customer as an agency commission. The schedule of sales charges, commissions and
dealer concessions described in the applicable Prospectus and related Statement
of Additional Information shall apply and the amount of the agency commission
shall equal the applicable amount payable as compensation to a dealer in
connection with the sale of shares of a Fund. You agree that you will not
combine customer orders to reach breakpoints in commissions for any purpose
unless authorized by the Prospectus or in writing. You agree that you will apply
any scheduled variation, or elimination of, the sales charge uniformly to all
offerees in the class specified in the
2
<PAGE>
Prospectus. All compensation amounts are subject to change without notice by us.
3. Rule 12b-1 Plans.
(a) As consideration for your providing services in our promotion
of the sale of Shares of certain Funds or classes thereof which have a sales
charge and which have adopted Distribution Plans pursuant to Rule 12b-1 under
the 1940 Act, and for providing personal services to, and/or the maintenance of
the accounts of, your customers who invest in and own such Shares of such Funds
or classes thereof, we shall pay you such fee as is described in the applicable
Prospectus and otherwise established by us from time to time, on Shares which
are owned of record by your firm as nominee for your customers or which are
owned by those customers of your firm whose records, as maintained by such Fund
or its agent, designate your firm as the customer's dealer of record. The fees
payable hereunder shall be computed and accrued daily and for each month shall
be based on the average daily net asset value of the relevant Shares which
remain outstanding during such month. No such fee will be paid to you with
respect to Shares redeemed or repurchased by such Fund within seven business
days after the date of our confirmation of such purchase. No such fee will be
paid to you with respect to any of your customers if the amount of such fee
based upon the value of such customer's Shares will be less than $1.00.
(b) The provisions of this Paragraph 3 may be terminated with
respect to any Fund or class thereof in accordance with the provisions of Rule
12b-1 under the 1940 Act or the rules of the National Association of Securities
Dealers, Inc. (the "NASD") and thereafter no such fee will be paid to you.
(c) Consistent with NASD policies as amended or interpreted from
time to time (i) you waive payment of amounts due from us which are funded by
fees we receive under such Distribution Plans until we are in receipt of the
fees on the relevant shares of a Fund, and (ii) our liability for amounts
payable to you is limited solely to the proceeds of the fees receivable to us on
the relevant shares.
4. Redemption and Repurchase of Shares. If any Shares with a sales
charge are sold through you hereunder and are redeemed by such Fund or
repurchased by us as agent for such Fund within seven business days after
confirmation of the original purchase, it is agreed that you shall forfeit your
right to the entire agency commission and any other related
3
<PAGE>
commission received by you on such Shares. We will notify you of any such
repurchase or redemption within ten business days from the date thereof and you
shall forthwith refund to us the entire agency commission and other commission,
if any, received by you on such sale. We agree, in the event of any such
repurchase or redemption, to refund to such Fund our share of the sales charge
retained by us, if any, and upon receipt from you of the refund of the agency
commission allowed to you, to pay such refund forthwith to such Fund.
If you purchase Shares from any customer in connection with repurchase
arrangements offered by an Investment Company, you agree to pay such customer
not less than the applicable repurchase price as established by the Prospectus.
If you act as agent for your customer in selling Shares to a Fund, you agree not
to charge your customer more than a fair commission for handling the
transaction. Any order placed by you for the repurchase of Shares of a Fund is
subject to the timely receipt by the Fund's transfer agent of all required
documents in good order. If such documents are not received within a reasonable
time after the order is placed, the order is subject to cancellation, in which
case you agree to be responsible for any loss resulting to the Fund or to us
from such cancellation.
5. Payment for Shares.
(a) Payment for Shares sold through you shall be made on or
before the settlement date specified in the applicable confirmation, at the
office of our clearing agent, and by check payable to the order of such Fund or,
if applicable, by Federal Funds wire for credit to such Fund in accordance with
the procedures and conditions described in the Prospectus. Each Fund reserves
the right to delay issuance or transfer of Shares until such check has cleared.
If such payment is not received by us, we reserve the right, without notice,
forthwith to cancel the sale. Unless other instructions are received by us on or
before the settlement date, orders accepted by us may be placed in an Open
Account in your name. If such payment or instructions are not timely received by
us, we may hold you responsible for any expense or loss, including loss of
profit, suffered by us or by such Fund resulting from your failure to make
payment as aforesaid.
(b) You will also act as agent in all purchases by a shareholder
for whom, on the records of the Fund or its Shareholders' Servicing and Transfer
Agent as defined in the Prospectus, you are the designated dealer of record of
Shares where payments are sent directly by such shareholders to the
4
<PAGE>
Agent, and you authorize and appoint the Agent to execute and confirm such
purchases to such shareholder on your behalf.
6. Manner of Offering.
(a) No person is authorized to make any representations
concerning Shares except those contained in the then current applicable
Prospectuses and in sales literature and other materials issued by us
supplemental to such Prospectuses. Shares of Funds shall only be offered by
means of the then current applicable Prospectus and you shall be obligated to
deliver such Prospectus to your customers in accordance with all applicable
federal and state securities laws. All offerings of Shares by you shall be
subject to the conditions set forth in the applicable Prospectus (including the
condition relating to minimum purchases) and to the terms and conditions herein
set forth. We will furnish additional copies of the Prospectuses and such sales
literature and other material issued by us in reasonable quantities upon
request. You will provide all customers with the applicable Prospectus prior to
or at the time such customer purchases Shares and will forward promptly to us
any customer request for a copy of the applicable Statement of Additional
Information. Sales and exchanges of Shares may only be made in those states and
jurisdictions where the Shares are registered or qualified for sale to the
public. We agree to advise you currently of the identity of those states and
jurisdictions in which the Shares are registered or qualified for sale, and you
agree to indemnify us and/or the Funds for any claim, liability, expense or loss
in any way arising out of a sale of Shares in any state or jurisdiction in which
such Shares are not so registered or qualified.
(b) You agree to conform to any compliance or offering standards
that we may establish from time to time, including without limitation standards
as to when classes of Shares may appropriately be sold to particular investors.
(c) We recognize that you may be subject to the provisions of the
Glass-Steagall Act and other laws governing, among other things, the conduct of
activities by federal or state chartered or supervised banks and affiliated
organizations. BECAUSE ONLY YOU WILL HAVE A DIRECT RELATIONSHIP WITH YOUR
CUSTOMER, YOU COVENANT AND AGREE TO COMPLY WITH ALL LAWS AND REGULATIONS
INCLUDING THOSE OF THE REGULATORY AUTHORITIES DIRECTLY APPLICABLE TO YOU AND ANY
OTHER FEDERAL OR STATE REGULATORY BODY HAVING JURISDICTION OVER YOU OR YOUR
CUSTOMERS TO THE EXTENT APPLICABLE TO SECURITIES PURCHASES HEREUNDER FOR THE
ACCOUNT OF YOUR CUSTOMER.
5
<PAGE>
(d) We and the Investment Companies shall have the right to
accept or reject orders for the purchase of Shares of any Fund or class thereof.
It is understood that for the purposes hereof no Share shall be considered to
have been sold by you and no compensation will be payable to you with respect to
any order for Shares which is rejected by us or an Investment Company. Any
consideration which you may receive in connection with a rejected purchase order
is to be returned promptly by you. Confirmations of all accepted purchase orders
will be transmitted by the applicable Investment Company or us to investors, or,
if so directed, to any duly appointed transfer or shareholder servicing agent of
the Fund or class of Shares thereof.
7. Your Status.
Nothing herein shall make you a partner with us or render our
relationship an association. You are responsible for your own conduct, for the
employment, control and conduct of your employees and agents and for injury to
such employees or agents or to others through such employees or agents. You
assume full responsibility for your employees and agents under applicable laws
and agree to pay all employer taxes relating thereto.
8. No Liability.
As distributor of the Shares, we shall have full authority to take such
action as we may deem advisable in respect of all matters pertaining to the
distribution of such Shares. We shall not be under any liability to you, except
for lack of good faith and for obligations expressly assumed by us in this
Agreement; provided, however, that nothing in this sentence shall be deemed to
relieve any of us from any liability imposed by the Securities Act of 1933, as
amended.
9. Term of Contract; Amendments; Termination.
This Agreement shall become effective on the date hereof. We and each
Fund reserve the right, in our discretion upon notice to you, to amend, modify
or terminate this Agreement at any time, to change the sales charges,
commissions, concessions and other fees described in the applicable Prospectus
or to suspend sales or withdraw the offering of Shares of a Fund or class of
Shares thereof entirely. You agree that any order to purchase Shares placed by
you after notice of any amendment to this Agreement has
6
<PAGE>
been sent to you shall constitute your agreement to such amendment.
10. Miscellaneous.
This Agreement supersedes any and all prior agreements between us.
References to a Selected Dealer Agreement, dealer agreement or sales agreement
contained in a Prospectus, new account Application, Statement of Additional
Information or related documents with respect to Shares shall be deemed to
include this Agreement and references to dealer(s) or securities dealer(s) shall
be deemed to include you. All communications to us should be sent to the above
address. Any notice to you shall be duly given if mailed or telefacsmiled to you
at the address specified by you above. This Agreement shall be effective when
accepted by you below and shall be construed under the laws of the Commonwealth
of Massachusetts.
11. Bank or Bank Affiliate.
Check applicable box:
[ ] (a) You represent and warrant that you are a member of the NASD or
in the alternative, that you are a foreign dealer not eligible for membership in
the NASD. You and we agree to abide by the Rules and Regulations of the NASD
including Rule 26 of its Rules of Fair Practice, and all applicable federal,
state, and foreign laws, rules and regulations.
[ ] (b) [Note: This box relates to "banks." Before checking this box,
please be aware that certain financial institutions such as savings and loan
associations and credit unions are not deemed to be a "bank" under the Exchange
Act of 1934, as amended (the "Exchange Act") and may need to register as a
broker/dealer with the Securities and Exchange Commission.] You represent and
warrant to us that (i) you are a "bank" as such term is defined in Section
3(a)(6) of the Exchange Act; (ii) you are a duly organized and validly existing
"bank" in good standing under the laws of the jurisdiction in which you are
organized; (iii) all authorization (if any) required for your lawful execution
of this Agreement and your performance hereunder have been obtained; and (iv)
this Agreement will constitute a valid and binding agreement, enforceable
against you in accordance with its terms. You agree to give written notice to us
promptly in the event that you cease to be a "bank" as such term is defined in
Section 3(a)(6) of the Exchange Act. Upon such
7
<PAGE>
written notice, this Agreement shall automatically terminate. You also agree to
abide by all of the Rules of Fair Practice of the NASD applicable to the sale of
investment company shares to your customers.
The following provision, as marked, applies to this Agreement.
[ ] This document constitutes an amendment to and restatement of the
Agreement currently in effect between you and us.
[ ] Please confirm your agreement hereto by signing and returning the
enclosed counterpart of this Agreement at once to: State Street Research
Investment Services, Inc., One Financial Center, Boston, Massachusetts 02111,
Attention: President. Upon receipt thereof, this Agreement and such signed
duplicate copy will evidence the agreement between us.
State Street Research
Investment Services, Inc.
(Distributor)
By:
----------------------------
We have checked box 11(a) or 11(b) above and accept this Agreement:
* *
- ------------------------------------------------------------------
(Exact legal name of bank or bank affiliate)
By:
- --------------------------------------------
Contract/bank2
(new)
8
Exhibit (6)(d)
AMENDMENT
TO
DISTRIBUTION AGREEMENT
Amendment dated as of May 1, 1992 to a certain DISTRIBUTION AGREEMENT dated
as of May 1, 1990, by and between MetLife - State Street Investment Services,
Inc., a corporation organized under the laws of the Commonwealth of
Massachusetts having its place of business in Boston, Massachusetts (the
"Distributor"), and State Street Master Investment Trust, a Massachusetts
business trust having its principal place of business in Boston, Massachusetts
(the "Master Trust").
Distributor and Master Trust hereby agree to amend the Distribution
Agreement by revising the first sentence of Section l(a) thereof to delete the
word "exclusive" and to read in its entirety as follows:
"The Master Trust hereby appoints the Distributor as its agent to
sell and distribute shares of the Fund in existence as of the date hereof
(the "Initial Fund") and the Distributor hereby accepts such appointment
and agrees during the term of this Agreement to provide the services and
to assume the obligations herein set forth."
Distributor and Master Trust hereby agree that the Distribution Agreement
shall be interpreted and applied to allow for multiple agents to sell and
distribute shares of the Fund and that Distributor shall not have any claim to
an exclusive agency arrangement with the Master Trust.
The term "State Street Master Investment Trust" means and refers to the
Trustees from time to time serving under the Master Trust Agreement of the
Master Trust dated February 7, 1989 as the same may subsequently have been, or
subsequently may be, amended. It is expressly agreed that the obligations of the
Master Trust hereunder shall not be binding upon any of the Trustees,
shareholders, nominees, officers, agents or employees of the Master Trust as
individuals or personally, but shall bind only the trust property of the Master
Trust, as provided in the Master Trust Agreement of the Master Trust. The
execution and delivery of this Amendment have been authorized by the Trustees of
the Master Trust and signed by an officer of the Master Trust, acting as such,
and neither such authorization nor such execution and delivery shall be deemed
to have been made individually or to impose any personal liability, but shall
bind only the trust property of the Master Trust as provided in its Master Trust
Agreement. The Master Trust Agreement of the Master Trust further provides, and
it is expressly agreed, that each Fund of the Master Trust shall be solely and
exclusively responsible for the payment of its debts, liabilities and
obligations and that no other Fund shall be responsible for liable for the same.
<PAGE>
IN WITNESS WHEREOF, this Amendment has been executed for the Distributor
and the Master Trust by their duly authorized officers.
METLIFE - STATE STREET INVESTMENT
SERVICES, INC.
By: /s/ Darman A. Wing
-------------------
STATE STREET MASTER INVESTMENT
TRUST
By: /s/ William P. Rich
-------------------
Exhibit (8)(a)
CUSTODIAN CONTRACT
Between
STATE STREET INVESTMENT TRUST
and
STATE STREET BANK AND TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
Page
1. Employment of Custodian and Property to be Held By It ........... 1
2. Duties of the Custodian with Respect to Property of the Fund
Held by the Custodian in the United States ...................... 3
2.1 Holding Securities ........................................ 3
2.2 Delivery of Securities .................................... 3
2.3 Registration of Securities ................................ 8
2.4 Bank Accounts ............................................. 9
2.5 Availability of Federal Funds ............................. 10
2.6 Collection of Income ...................................... 10
2.7 Payment of Fund Monies .................................... 11
2.8 Liability for Payment in Advance of Receipt of
Securities Purchased ..................................... 14
2.9 Appointment of Agents ..................................... 14
2.10 Deposit of Fund Assets in Securities System ............... 15
2.10A Fund Assets Held in the Custodian's Direct Paper System ... 18
2.11 Segregated Account ........................................ 20
2.12 Ownership Certificates for Tax Purposes ................... 21
2.13 Proxies ................................................... 21
2.14 Communications Relating to Portfolio Securities ........... 22
3. Duties of the Custodian with Respect to Property of the Fund Held
Outside of the United States .................................... 22
3.1 Appointment of Foreign Sub-Custodians ..................... 22
3.2 Assets to be Held ......................................... 23
3.3 Foreign Securities Depositories ........................... 23
3.4 Segregation of Securities ................................. 24
3.5 Agreements with Foreign Banking Institutions .............. 24
3.6 Access of Independent Accountants of the Fund ............. 25
3.7 Reports by Custodian ...................................... 25
3.8 Transactions in Foreign Custody Account ................... 26
3.9 Liability of Foreign Sub-Custodians ....................... 27
3.10 Liability of Custodian .................................... 27
3.11 Reimbursement for Advances ................................ 28
3.12 Monitoring Responsibilities ............................... 29
3.13 Branches of U.S. Banks .................................... 30
4. Payments for Sales or Repurchase or Redemptions of Shares of
the Fund ........................................................ 30
5. Proper Instructions .............................................. 31
6. Actions Permitted Without Express Authority ...................... 32
7. Evidence of Authority ............................................ 33
8. Duties of Custodian With Respect to the Books of Account and
Calculation of Net Asset Value and Net Income .................... 33
<PAGE>
9. Records........................................................... 34
10. Opinion of Fund's Independent Accountants ........................ 34
11. Reports to Fund by Independent Public Accountants ................ 35
12. Compensation of Custodian ........................................ 35
13. Responsibility of Custodian ...................................... 35
14. Effective Period, Termination and Amendment ...................... 38
15. Successor Custodian .............................................. 39
16. Interpretive and Additional Provisions ........................... 41
17. Additional Funds ................................................. 41
18. Massachusetts Law to Apply ....................................... 42
19. Prior Contracts .................................................. 42
20. Disclaimer ....................................................... 42
<PAGE>
CUSTODIAN CONTRACT
This Contract between State Street Investment Trust, a business trust
organized and existing under the laws of Massachusetts, having its principal
place of business at One Financial Center, Boston, Massachusetts 02111
hereinafter called the "Fund", and State Street Bank and Trust Company, a
Massachusetts trust company, having its principal place of business at 225
Franklin Street, Boston, Massachusetts, 02110, hereinafter called the
"Custodian",
WITNESSETH:
WHEREAS, the Fund is authorized to issue shares in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets; and
WHEREAS, the Fund intends to initially offer shares in one series, the
State Street Investment Fund (such series together with all other series
subsequently established by the Fund and made subject to this Contract in
accordance with paragraph 17, being herein referred to as the "Portfolio(s)");
NOW THEREFOR, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
The Fund hereby employs the Custodian as the custodian of the assets of the
Portfolios of the Fund, including securities which the Fund, on behalf of the
applicable Portfolio desires to be held in places within the United States
("domestic
<PAGE>
securities") and securities it desires to be held outside the United States
("foreign securities") pursuant to the provisions of the Declaration of Trust.
The Fund on behalf of the Portfolio(s) agrees to deliver to the Custodian all
securities and cash of the Portfolios, and all payments of income, payments of
principal or capitsl distributions received by it with respect to all securities
owned by the Portfolio(s) from time to time, and the cash consideration received
by it for such new or treasury shares of beneficial interest of the Fund
representing interests in the Portfolios, ("Shares") as may be issued or sold
from time to time. The Custodian shall not be responsible for any property of a
Portfolio held or received by the Portfolio and not delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Article 5),
the Custodian shall on behalf of the applicable Portfolio(s) from time to time
employ one or more sub-custodians, located in the United States but only in
accordance with an applicable vote by the Board of Trustees of the Fund on
behalf of the applicable Portfolio(s), and provided that the Custodian shall
have no more or less responsibility or liability to the Fund on account of any
actions or omissions of any sub-custodian so employed than any such
sub-custodian has to the Custodian. The Custodian may employ as sub-custodian
for the Fund's foreign securities on behalf of the applicable Portfolio(s) the
foreign banking institutions and foreign securities depositories designated in
Schedule A hereto but only in accordance with the provisions of Article 3.
-2-
<PAGE>
2. Duties of the Custodian with Respect to Property of the Fund Held BY the
Custodian in the United States
2.1 Holding Securities. The Custodian shall hold and physically segregate
for the account of each Portfolio all non-cash property, to be held
by it in the United States including all domestic securities owned by
such Portfolio, other than (a) securities which are maintained
pursuant to Section 2.10 in a clearing agency which acts as a
securities depository or in a book-entry system authorized by the
U.S. Department of the Treasury, collectively referred to herein as
"Securities System" and (b) commercial paper of an issuer for which
State Street Bank and Trust Company acts as issuing and paying agent
("Direct Paper") which is deposited and/or maintained in the Direct
Paper System of the Custodian pursuant to Section 2.10A.
2.2 Delivery of Securities. The Custodian shall release and deliver
domestic securities owned by a Portfolio held by the Custodian or in
a Securities System account of the Custodian or in the Custodian's
Direct Paper book entry system account ("Direct Paper System
Account") only upon receipt of Proper Instructions from the Fund on
behalf of the applicable Portfolio, which may be continuing
instructions when deemed appropriate by the parties, and only in the
following cases:
l) Upon sale of such securities for the account of the
Portfolio and receipt of payment therefor;
-3-
<PAGE>
2) Upon the receipt of payment in connection with any
repurchase agreement related to such securities entered into
by the Portfolio;
3) In the case of a sale effected through a Securities System,
in accordance with the provisions of Section 2.10 hereof;
4) To the depository agent in connection with tender or other
similar offers for securities of the Portfolio;
5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable;
provided that, in any such case, the cash or other
consideration is to be delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the
name of the Portfolio or into the name of any nominee or
nominees of the Custodian or into the name or nominee name
of any agent appointed pursuant to Section 2.9 or into the
name or nominee name of any sub-custodian appointed pursuant
to Article 1; or for exchange for a different number of
bonds, certificates or other evidence representing the same
aggregate face amount or number of units; provided that, in
any such case, the new securities are to be delivered to the
Custodian;
-4-
<PAGE>
7) Upon the sale of such securities for the account of the
Portfolio, to the broker or its clearing agent, against a
receipt, for examination in accordance with "street
delivery" custom; provided that in any such case, the
Custodian shall have no responsibility or liability for any
loss arising from the delivery of such securities prior to
receiving payment for such securities except as may arise
from the Custodian's own negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion
contained in such securities, or pursuant to any deposit
agreement; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the
Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights
or similar securities or the surrender of interim receipts
or temporary securities for
-5-
<PAGE>
definitive securities; provided that, in any such case, the
new securities and cash, if any, are to be delivered to the
Custodian;
10) For delivery in connection with any loans of securities made
by the Portfolio, but only against receipt of adequate
collateral as agreed upon from time to time by the Custodian
and the Fund on behalf of the Portfolio, which may be in the
form of cash or obligations issued by the United States
government, its agencies or instrumentalities, except that
in connection with any loans for which collateral is to be
credited to the Custodian's account in the book-entry system
authorized by the U.S. Department of the Treasury, the
Custodian will not be held liable or responsible for the
delivery of securities owned by the Portfolio prior to the
receipt of such collateral;
11) For delivery as security in connection with any borrowings
by the Fund on behalf of the Portfolio requiring a pledge of
assets by the Fund on behalf of the Portfolio, but only
against receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian and a
-6-
<PAGE>
broker-dealer registered under the Securities Exchange Act
of 1934 (the "Exchange Act") and a member of The National
Association of Securities Dealers, Inc. ("NASD"), relating
to compliance with the rules of The Options Clearing
Corporation and of any registered national securities
exchange, or of any similar organization or organizations,
regarding escrow or other arrangements in connection with
transactions by the Portfolio of the Fund;
13) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian, and a Futures Commission Merchant registered
under the Commodity Exchange Act, relating to compliance
with the rules of the Commodity Futures Trading Commission
and/or any Contract Market, or any similar organization or
organizations, regarding account deposits in connection with
transactions by the Portfolio of the Fund;
14) Upon receipt of instructions from the transfer agent
("Transfer Agent") for the Fund, for delivery to such
Transfer Agent or to the holders of shares in connection
with distributions in kind, as may be described
-7-
<PAGE>
from time to time in the currently effective prospectus and
statement of additional information of the Fund, related to
the Portfolio ("Prospectus"), in satisfaction of requests by
holders of Shares for repurchase or redemption; and
15) For any other proper corporate purpose, but only upon
receipt of, in addition to Proper Instructions from the Fund
on behalf of the applicable Portfolio, a certified copy of a
resolution of the Board of Trustees or of the Executive
Committee signed by an officer of the Fund and certified by
the Secretary or an Assistant Secretary, specifying the
securities of the Portfolio to be delivered, setting forth
the purpose for which such delivery is to be made, declaring
such purpose to be a proper corporate purpose, and naming
the person or persons to whom delivery of such securities
shall be made.
2.3 Registration of Securities. Domestic securities held by the Custodian
(other than bearer securities) shall be registered in the name of the
Portfolio or in the name of any nominee of the Fund on behalf of the
Portfolio or of any nominee of the Custodian which nominee shall be
assigned exclusively to the Portfolio, unless the Fund has authorized
in writing the appointment of a nominee to
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be used in common with other registered investment companies
having the same investment adviser as the Portfolio, or in the name
or nominee name of any agent appointed pursuant to Section 2.9 or
in the name or nominee name of any sub-custodian appointed pursuant
to Article 1. All securities accepted by the Custodian on behalf of
the Portfolio under the terms of this Contract shall be in "street
name" or other good delivery form.
2.4 Bank Accounts. The Custodian shall open and maintain a separate bank
account or accounts in the United States in the name of each
Portfolio of the Fund, subject only to draft or order by the
Custodian acting pursuant to the terms of this Contract, and shall
hold in such account or accounts, subject to the provisions hereof,
all cash received by it from or for the account of the Portfolio,
other than cash maintained by the Portfolio in a bank account
established and used in accordance with Rule 17f-3 under the
Investment Company Act of 1940. Funds held by the Custodian for a
Portfolio may be deposited by it to its credit as Custodian in the
Banking Department of the Custodian or in such other banks or trust
companies as it may in its discretion deem necessary or desirable;
provided, however, that every such bank or trust company shall be
qualified to act as a custodian under the Investment Company Act of
1940 and that each such bank or trust company and the funds to be
deposited with each such bank or trust company shall on behalf of
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<PAGE>
each applicable Portfolio be approved by vote of a majority of the
Board of Trustees of the Fund. Such funds shall be deposited by the
Custodian in its capacity as Custodian and shall be withdrawable by
the Custodian only in that capacity.
2.5 Availability of Federal Funds. Upon mutual agreement between the Fund
on behalf of each applicable Portfolio and the Custodian, the
Custodian shall, upon the receipt of Proper Instructions from the
Fund on behalf of a Portfolio, make federal funds available to such
Portfolio as of specified times agreed upon from time to time by the
Fund and the Custodian in the amount of checks received in payment
for Shares of such Portfolio which are deposited into the Portfolio's
account.
2.6 Collection of Income. The Custodian shall collect on a timely basis
all income and other payments with respect to registered domestic
securities held hereunder to which each Portfolio shall be entitled
either by law or pursuant to custom in the securities business, and
shall collect on a timely basis all income and other payments with
respect to bearer domestic securities if, on the date of payment by
the issuer, such securities are held by the Custodian or its agent
thereof and shall credit such income, as collected, to such
Portfolio's custodian account. Without limiting the generality of the
foregoing, the Custodian shall detach and present for payment all
coupons and other income items requiring
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presentation as and when they become due and shall collect interest
when due on securities held hereunder. Income due each Portfolio on
securities loaned pursuant to the provisions of Section 2.2 (10)
shall be the responsibility of the Fund. The Custodian will have no
duty or responsibility in connection therewith, other than to
provide the Fund with such information or data as may be necessary
to assist the Fund in arranging for the timely delivery to the
Custodian of the income to which the Portfolio is properly entitled.
2.7 Payment of Fund Monies. Upon receipt of Proper Instructions from the
Fund on behalf of the applicable Portfolio, which may be continuing
instructions when deemed appropriate by the parties, the Custodian
shall pay out monies of a Portfolio in the following cases only:
1) Upon the purchase of domestic securities, options, futures
contracts or options on futures contracts for the account of
the Portfolio but only (a) against the delivery of such
securities or evidence of title to such options, futures
contracts or options on futures contracts to the Custodian
(or any bank, banking firm or trust company doing business
in the United States or abroad which is qualified under the
Investment Company Act of 1940, as amended, to act as a
custodian and has been designated by the Custodian as
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its agent for this purpose) registered in the name of the
Portfolio or in the name of a nominee of the Custodian
referred to in Section 2.3 hereof or in proper form for
transfer; (b) in the case of a purchase effected through a
Securities System, in accordance with the conditions set
forth in Section 2.10 hereof; (c) in the case of a purchase
involving the Direct Paper System, in accordance with the
conditions set forth in Section 2.10A; (d) in the case of
repurchase agreements entered into between the Fund on
behalf of the Portfolio and the Custodian, or another bank,
or a broker-dealer which is a member of NASD, (i) against
delivery of the securities either in certificate form or
through an entry crediting the Custodian's account at the
Federal Reserve Bank with such securities or (ii) against
delivery of the receipt evidencing purchase by the Portfolio
of securities owned by the Custodian along with written
evidence of the agreement by the Custodian to repurchase
such securities from the Portfolio or (e) for transfer to a
time deposit account of the Fund in any bank, whether
domestic or foreign; such transfer
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<PAGE>
may be effected prior to receipt of a confirmation from a
broker and/or the applicable bank pursuant to Proper
Instructions from the Fund as defined in Article 5;
2) In connection with conversion, exchange or surrender of
securities owned by the Portfolio as set forth in Section
2.2 hereof;
3) For the redemption or repurchase of Shares issued by the
Portfolio as set forth in Article 4 hereof;
4) For the payment of any expense or liability incurred by the
Portfolio, including but not limited to the following
payments for the account of the Portfolio: interest, taxes,
management, accounting, transfer agent and legal fees, and
operating expenses of the Fund whether or not such expenses
are to be in whole or part capitalized or treated as
deferred expenses;
5) For the payment of any dividends on Shares of the Portfolio
declared pursuant to the governing documents of the Fund;
6) For payment of the amount of dividends received in respect
of securities sold short;
7) For any other proper purpose, but only upon receipt of, in
addition to Proper
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<PAGE>
Instructions from the Fund on behalf of the Portfolio, a
certified copy of a resolution of the Board of Trustees or
of the Executive Committee of the Fund signed by an officer
of the Fund and certified by its Secretary or an Assistant
Secretary, specifying the amount of such payment, setting
forth the purpose for which such payment is to be made,
declaring such purpose to be a proper purpose, and naming
the person or persons to whom such payment is to be made.
2.8 Liability for Payment in Advance of Receipt of Securities Purchased.
Except as specifically stated otherwise in this Contract, in any and
every case where payment for purchase of domestic securities for the
account of a Portfolio is made by the Custodian in advance of receipt
of the securities purchased in the absence of specific written
instructions from the Fund on behalf of such Portfolio to so pay in
advance, the Custodian shall be absolutely liable to the Fund for
such securities to the same extent as if the securities had been
received by the Custodian.
2.9 Appointment of Agents. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or
trust company which is itself qualified under the Investment Company
Act of 1940, as amended, to act as a Custodian, as its agent to carry
out
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<PAGE>
such of the provisions of this Article 2 as the Custodian may from
time to time direct; provided, however, that the appointment of any
agent shall not relieve the Custodian of its responsibilities or
liabilities hereunder.
2.10 Deposit of Fund Assets in Securities Systems. The Custodian may
deposit and/or maintain securities owned by a Portfolio in a clearing
agency registered with the Securities and Exchange Commission under
Section 17A of the Securities Exchange Act of 1934, which acts as a
securities depository, or in the book-entry system authorized by the
U.S. Department of the Treasury and certain federal agencies,
collectively referred to herein as "Securities System" in accordance
with applicable Federal Reserve Board and Securities and Exchange
Commission rules and regulations, if any, and subject to the
following provisions:
1) The Custodian may keep securities of the Portfolio in a
Securities System provided that such securities are
represented in an account ("Account") of the Custodian in
the Securities System which shall not include any assets of
the Custodian other than assets held as a fiduciary,
custodian or otherwise for customers;
2) The records of the Custodian with respect to securities of
the Portfolio which are maintained in a Securities System
shall
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<PAGE>
identify by book-entry those securities belonging to the
Portfolio;
3) The Custodian shall pay for securities purchased for the
account of the Portfolio upon (i) receipt of advice from the
Securities System that such securities have been transferred
to the Account, and (ii) the making of an entry on the
records of the Custodian to reflect such payment and
transfer for the account of the Portfolio. The Custodian
shall transfer securities sold for the account of the
Portfolio upon (i) receipt of advice from the Securities
System that payment for such securities has been transferred
to the Account, and (ii) the making of an entry on the
records of the Custodian to reflect such transfer and
payment for the account of the Portfolio. Copies of all
advices from the Securities System of transfers of
securities for the account of the Portfolio shall identify
the Portfolio, be maintained for the Portfolio by the
Custodian and be provided to the Fund at its request. Upon
request, the Custodian shall furnish the Fund on behalf of
the Portfolio confirmation of each transfer to or from the
account of the Portfolio in the form
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of a written advice or notice and shall furnish to the Fund
on behalf of the Portfolio copies of daily transaction
sheets reflecting each day's transactions in the Securities
System for the account of the Portfolio.
4) The Custodian shall provide the Fund for the Portfolio with
any report obtained by the Custodian on the Securities
System's accounting system, internal accounting control and
procedures for safeguarding securities deposited in the
Securities System;
5) The Custodian shall have received from the Fund on behalf of
the Portfolio the initial or annual certificate, as the case
may be, required by Article 14 hereof;
6) Anything to the contrary in this Contract notwithstanding,
the Custodian shall be liable to the Fund for the benefit of
the Portfolio for any loss or damage to the Portfolio
resulting from use of the Securities System by reason of any
negligence, misfeasance or misconduct of the Custodian or
any of its agents or of any of its or their employees or
from failure of the Custodian or any such agent to enforce
effectively such rights as it may have
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<PAGE>
against the Securities System; at the election of the Fund,
it shall be entitled to be subrogated to the rights of the
Custodian with respect to any claim against the Securities
System or any other person which the Custodian may have as a
consequence of any such loss or damage if and to the extent
that the Portfolio has not been made whole for any such lose
or damage.
2.10A Fund Assets Held in the Custodian's Direct Paper System. The
Custodian may deposit and/or maintain securities owned by a Portfolio
in the Direct Paper System of the Custodian subject to the following
provisions:
1) No transaction relating to securities in the Direct Paper
System will be effected in the absence of Proper
Instructions from the Fund on behalf of the Portfolio;
2) The Custodian may keep securities of the Portfolio in the
Direct Paper System only if such securities are repreaented
in an account ("Account") of the Custodian in the Direct
Paper System which shall not include any assets of the
Custodian other than assets held as a fiduciary, custodian
or otherwise for customers;
3) The records of the Custodian with respect to securities of
the Portfolio which are
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<PAGE>
maintained in the Direct Paper System shall identify by
book-entry those securities belonging to the Portfolio;
4) The Custodian shall pay for securities purchased for the
account of the Portfolio upon the making of an entry on the
records of the Custodian to reflect such payment and
transfer of securities to the account of the Portfolio. The
Custodian shall transfer securities sold for the account of
the Portfolio upon the making of an entry on the records of
the Custodian to reflect such transfer and receipt of
payment for the account of the Portfolio;
5) The Custodian shall furnish the Fund on behalf of the
Portfolio confirmation of each transfer to or from the
account of the Portfolio, in the form of a written advice or
notice, of Direct Paper on the next business day following
such transfer and shall furnish to the Fund on behalf of the
Portfolio copies of daily transaction sheets reflecting each
day's transaction in the Securities System for the account
of the Portfolio;
6) The Custodian shall provide the Fund on behalf of the
Portfolio with any report on its system of internal
accounting control as
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the Fund may reasonably request from time to time.
2.11 Segregated Account. The Custodian shall upon receipt of Proper
Instructions from the Fund on behalf of each applicable Portfolio
establish and maintain a segregated account or accounts for and on
behalf of each such Portfolio, into which account or accounts may be
transferred cash and/or securities, including securities maintained
in an account by the Custodian pursuant to Section 2.10 hereof, (i)
in accordance with the provisions of any agreement among the Fund on
behalf of the Portfolio, the Custodian and a broker-dealer registered
under the Exchange Act and a member of the NASD (or any futures
commission merchant registered under the Commodity Exchange Act),
relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities exchange (or
the Commodity Futures Trading Commission or any registered contract
market), or of any similar organization or organizations, regarding
escrow or other arrangements in connection with transactions by the
Portfolio, (ii) for purposes of segregating cash or government
securities in connection with options purchased, sold or written by
the Portfolio or commodity futures contracts or options thereon
purchased or sold by the Portfolio, (iii) for the purposes of
compliance by the Portfolio with the procedures required by
Investment Company Act Release No.
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<PAGE>
10666, or any subsequent release or releases of the Securities and
Exchange Commission relating to the maintenance of segregated
accounts by registered investment companies and (iv) for other
proper corporate purposes, but only, in the case of clause (iv),
upon receipt of, in addition to Proper Instructions from the Fund
on behalf of the applicable Portfolio, a certified copy of a
resolution of the Board of Trustees or of the Executive Committee
signed by an officer of the Fund and certified by the Secretary or
an Assistant Secretary, setting forth the purpose or purposes of
such segregated account and declaring such purposes to be proper
corporate purposes.
2.12 Ownership Certificates for Tax Purposes. The Custodian shall execute
ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other
payments with respect to domestic securities of each Portfolio held
by it and in connection with transfers of securities.
2.13 Proxies. The Custodian shall, with respect to the domestic securities
held hereunder, cause to be promptly executed by the registered
holder of such securities, if the securities are registered otherwise
than in the name of the Portfolio or a nominee of the Portfolio, all
proxies, without indication of the manner in which such proxies are
to be voted, and shall promptly deliver to the Portfolio such
proxies, all proxy soliciting materials and all notices relating to
such securities.
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2.14 Communications Relating to Portfolio Securities. The Custodian shall
transmit promptly to the Fund for each Portfolio all written
information (including, without limitation, pendency of calls and
maturities of domestic securities and expirations of rights in
connection therewith and notices of exercise of call and put options
written by the Fund on behalf of the Portfolio and the maturity of
futures contracts purchased or sold by the Portfolio) received by the
Custodian from issuers of the securities being held for the
Portfolio. With respect to tender or exchange offers, the Custodian
shall transmit promptly to the Portfolio all written information
received by the Custodian from issuers of the securities whose tender
or exchange is sought and from the party (or his agents) making the
tender or exchange offer. If the Portfolio desires to take action
with respect to any tender offer, exchange offer or any other similar
transaction, the Portfolio shall notify the Custodian at least three
business days prior to the date on which the Custodian is to take
such action.
3. Duties of the Custodian with Respect to Property of the Fund Held Outside
of the United States
3.1 Appointment of Foreign Sub-Custodians.
The Fund hereby authorizes and instructs the Custodian to employ as
sub-custodians for the Portfolio's securities and other assets
maintained outside the United States the foreign banking
institutions and foreign securities
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depositories designated on Schedule A hereto ("foreign sub-
custodians"). Upon receipt of "Proper Instructions", as defined
in Section 5 of this Contract, together with a certified resolution
of the Fund's Board of Trustees, the Custodian and the Fund may
agree to amend Schedule A hereto from time to time to designate
additional foreign banking institutions and foreign securities
depositories to act as sub-custodian. Upon receipt of Proper
Instructions, the Fund may instruct the Custodian to cease the
employment of any one or more such sub-custodians for maintaining
custody of the Portfolio's assets.
3.2 Assets to be Held. The Custodian shall limit the securities and other
assets maintained in the custody of the foreign sub-custodians to:
(a) "foreign securities", as defined in paragraph (c)(1) of Rule
17f-5 under the Investment Company Act of 1940, and (b) cash and cash
equivalents in such amounts as the Custodian or the Fund may
determine to be reasonably necessary to effect the Portfolio's
foreign securities transactions.
3.3 Foreign Securities Depositories. Except as may otherwise be agreed
upon in writing by the Custodian and the Fund, assets of the
Portfolios shall be maintained in foreign securities depositories
only through arrangements implemented by the foreign banking
institutions serving as sub-custodians pursuant to the terms hereof.
Where possible, such arrangements shall include entry into
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agreements containing the provisions set forth in Section 3.5 hereof.
3.4 Segregation of Securities
The Custodian shall identify on its books as belonging to each
applicable Portfolio of the Fund, the foreign securities of such
Portfolios held by each foreign sub-custodian. Each agreement
pursuant to which the Custodian employs a foreign banking
institution shall require that such institution establish a custody
account for the Custodian on behalf of the Fund for each applicable
Portfolio of the Fund and physically segregate in each account,
securities and other assets of the Portfolios, and, in the event
that such institution deposits the securities of one or more of the
Portfolios in a foreign securities depository, that it shall
identify on its books as belonging to the Custodian, as agent for
each applicable Portfolio, the securities so deposited.
3.5 Agreements with Foreign Banking Institutions. Each agreement with a
foreign banking institution shall be substantially in the form set
forth in Exhibit 1 hereto and shall provide that: (a) the assets of
each Portfolio will not be subject to any right, charge, security
interest, lien or claim of any kind in favor of the foreign banking
institution or its creditors or agent, except a claim of payment for
their safe custody or administration; (b) beneficial ownership for
the assets
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of each Portfolio will be freely transferable without the payment of
money or value other than for custody or administration; (c)
adequate records will be maintained identifying the assets as
belonging to each applicable Portfolio; (d) officers of or auditors
employed by, or other representatives of the Custodian, including to
the extent permitted under applicable law the independent public
accountants for the Fund, will be given access to the books and
records of the foreign banking institution relating to its actions
under its agreement with the Custodian; and (e) assets of the
Portfolios held by the foreign sub-custodian will be subject only to
the instructions of the Custodian or its agents.
3.6 Access of Independent Accountants of the Fund. Upon request of the
Fund, the Custodian will use its best efforts to arrange for the
independent accountants of the Fund to be afforded access to the
books and records of any foreign banking institution employed as a
foreign sub-custodian insofar as such books and records relate to the
performance of such foreign banking institution under its agreement
with the Custodian.
3.7 Reports by Custodian. The Custodian will supply to the Fund from time
to time, as mutually agreed upon, statements in respect of the
securities and other assets of the Portfolio(s) held by foreign
sub-custodians, including but not limited to an identification of
entities having possession of the Portfolio(s) securities
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and other assets and advices or notifications of any transfers of
securities to or from each custodial account maintained by a foreign
banking institution for the Custodian on behalf of each applicable
Portfolio indicating, as to securities acquired for a Portfolio, the
identity of the entity having physical possession of such
securities.
3.8 Transactions in Foreign Custody Account.
(a) Except as otherwise provided in paragraph (b) of this Section
3.8, the provision of Sections 2.2 and 2.7 of this Contract shall
apply, mutatis mutandis to the foreign securities of the Fund held
outside the United States by foreign sub-custodians.
(b) Notwithstanding any provision of this Contract to the contrary,
settlement and payment for securities received for the account of
each applicable Portfolio and delivery of securities maintained for
the account of each applicable Portfolio may be effected in
accordance with the customary established securities trading or
securities processing practices and procedures in the jurisdiction or
market in which the transaction occurs, including, without
limitation, delivering securities to the purchaser thereof or to a
dealer therefor (or an agent for such purchaser or dealer) against a
receipt with the expectation of receiving later payment for such
securities from such purchaser or dealer.
(c) Securities maintained in the custody of a foreign
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sub-custodian may be maintained in the name of such entity's nominee
to the same extent as set forth in Section 2.3 of this Contract, and
the Fund agrees to hold any such nominee harmless from any liability
as a holder of record of such securities.
3.9 Liability of Foreign Sub-Custodians. Each agreement pursuant to which
the Custodian employs a foreign banking institution as a foreign
sub-custodian shall require the institution to exercise reasonable
care in the performance of its duties and to indemnify, and hold
harmless, the Custodian and each Fund from and against any loss,
damage, cost, expense, liability or claim arising out of or in
connection with the institution's performance of such obligations. At
the election of the Fund, it shall be entitled to be subrogated to
the rights of the Custodian with respect to any claims against a
foreign banking institution as a consequence of any such loss,
damage, cost, expense, liability or claim if and to the extent that
the Fund has not been made whole for any such loss, damage, cost,
expense, liability or claim.
3.10 Liability of Custodian. The Custodian shall be liable for the acts or
omissions of a foreign banking institution to the same extent as set
forth with respect to sub-custodians generally in this Contract and,
regardless of whether assets are maintained in the custody of a
foreign banking institution, a foreign securities depository or a
branch of a U.S. bank as
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contemplated by paragraph 3.13 hereof, the Custodian shall not be
liable for any loss, damage, cost, expense, liability or claim
resulting from nationalization, expropriation, currency restrictions,
or acts of war or terrorism or any loss where the sub-custodian has
otherwise exercised reasonable care. Notwithstanding the foregoing
provisions of this paragraph 3.10, in delegating custody duties to
State Street London Ltd., the Custodian shall not be relieved of any
responsibility to the Fund for any loss due to such delegation,
except such loss as may result from (a) political risk (including,
but not limited to, exchange control restrictions, confiscation,
expropriation, nationalization, insurrection, civil strife or armed
hostilities) or (b) other losses (excluding a bankruptcy or
insolvency of State Street London Ltd. not causes by political risk)
due to Acts of God, nuclear incident or other losses under
circumstances where the Custodian and State Street London Ltd. have
exercised reasonable care.
3.11 Reimbursement for Advances. If the Fund requires the Custodian to
advance cash or securities for any purpose for the benefit of a
Portfolio including the purchase or sale of foreign exchange or of
contracts for foreign exchange, or in the event that the Custodian or
its nominee shall incur or be assessed any taxes, charges, expenses,
assessments, claims or liabilities in connection with the performance
of this Contract, except
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such as may arise from its or its nominee's own negligent action,
negligent failure to act or willful misconduct, any property at any
time held for the account of the applicable Portfolio shall be
security therefor and should the Fund fail to repay the Custodian
promptly, the Custodian shall be entitled to utilize available cash
and to dispose of such Portfolios assets to the extent necessary to
obtain reimbursement.
3.12 Monitoring Responsibilities. The Custodian shall furnish annually to
the Fund, during the month of June, information concerning the
foreign sub-custodians employed by the Custodian. Such information
shall be similar in kind and scope to that furnished to the Fund in
connection with the initial approval of this Contract. In addition,
the Custodian will promptly inform the Fund in the event that the
Custodian learns of a material adverse change in the financial
condition of a foreign sub-custodian or any material loss of the
assets of the Fund or in the case of any foreign sub-custodian not
the subject of an exemptive order from the Securities and Exchange
Commission is notified by such foreign sub-custodian that there
appears to be a substantial likelihood that its shareholders' equity
will decline below $200 million (U.S. dollars or the equivalent
thereof) or that its shareholders' equity has declined below $200
million (in each case computed in accordance with generally accepted
U.S. accounting principles).
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3.13 Branches of U.S. Banks.
(a) Except as otherwise set forth in this Contract, the provisions
hereof shall not apply where the custody of the Portfolios assets are
maintained in a foreign branch of a banking institution which is a
"bank" as defined by Section 2(a)(5) of the Investment Company Act of
1940 meeting the qualification set forth in Section 26(a) of said
Act. The appointment of any such branch as a sub-custodian shall be
governed by paragraph 1 of this Contract.
(b) Cash held for each Portfolio of the Fund in the United Kingdom
shall be maintained in an interest bearing account established for
the Fund with the Custodian's London branch, which account shall be
subject to the direction of the Custodian, State Street London Ltd.
or both.
4. Payments for Sales or Repurchases or Redemptions of Shares of the Fund.
The Custodian shall receive from the distributor for the Shares or from the
Transfer Agent of the Fund and deposit into the account of the appropriate
Portfolio such payments as are received for Shares of that Portfolio issued or
sold from time to time by the Fund. The Custodian will provide timely
notification to the Fund on behalf of each such Portfolio and the Transfer Agent
of any receipt by it of payments for Shares of such Portfolio.
From such funds as may be available for the purpose but subject to
the limitations of the Declaration of Trust and any
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applicable votes of the Board of Trustees of the Fund pursuant thereto, the
Custodian shall, upon receipt of instructions from the Transfer Agent, make
funds available for payment to holders of Shares who have delivered to the
Transfer Agent a request for redemption or repurchase of their Shares. In
connection with the redemption or repurchase of Shares of a Portfolio, the
Custodian is authorized upon receipt of instructions from the Transfer Agent to
wire funds to or through a commercial bank designated by the redeeming
shareholders. In connection with the redemption or repurchase of Shares of the
Fund, the Custodian shall honor checks drawn on the Custodian by a holder of
Shares, which checks have been furnished by the Fund to the holder of Shares,
when presented to the Custodian in accordance with such procedures and controls
as are mutually agrees upon from time to time between the Fund and the
Custodian.
5. Proper Instructions. Proper Instructions as used throughout this
Contract means a writing signed or initialled by one or more person or persons
as the Board of Trustees shall have from time to time authorized. Each such
writing shall set forth the specific transaction or type of transaction
involved, including a specific statement of the purpose for which such action is
requested. Oral instructions will be considered Proper Instructions if the
Custodian reasonably believes them to have been given by a person authorized to
give such instructions with respect to the transaction involved. The Fund shall
cause all oral instructions to be confirmed in writing. Upon receipt of a
certificate of the Secretary or an Assistant Secretary as to the
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authorization by the Board of Trustees of the Fund accompanied by a detailed
description of procedures approved by the Board of Trustees, Proper Instructions
may include communications effected directly between electro-mechanical or
electronic devices provided that the Board of Trustees and the Custodian are
satisfied that such procedures afford adequate safeguards for the Portfolios'
assets. For purposes of this Section, Proper Instructions shall include
instructions received by the Custodian pursuant to any three - party agreement
which requires a segregated asset account in accordance with Section 2.11.
6. Actions Permitted without Express Authority. The Custodian may in
its discretion, without express authority from the Fund on behalf of each
applicable Portfolio:
1) make payments to itself or others for minor expenses of handing
securities or other similar items relating to its duties under this Contract,
provided that all such payments shall be accounted for to the Fund on behalf of
the Portfolio;
2) surrender securities in temporary form for securities in
definitive form;
3) endorse for collection, in the name of the Portfolio; checks,
drafts and other negotiable instruments; and
4) in general, attend to all non-discretionary details in connection
with the sale, exchange, substitution, purchase, transfer and other dealings
with the securities and property of the Portfolio except as otherwise directed
by the Board of Trustees of the Fund.
-32-
<PAGE>
7. Evidence of Authority. The Custodian shall be protected in acting upon any
instructions, notice, request, consent, certificate or other instrument or
paper believed by it to be genuine and to have been properly executed by or
on behalf of the Fund. The Custodian may receive ant accept a certified copy of
a vote of the Board of Trustees of the Fund as conclusive evidence (a) of the
authority of any person to act in accordance with such vote or (b) of any
determination or of any action by the Board of Trustees pursuant to the
Declaration of Trust as described in such vote, and such vote may be considered
as in full force and effect until receipt by the Custodian of written notice to
the contrary.
8. Duties of Custodian with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income.
The Custodian shall cooperate with and supply necessary information to the
entity or entities appointed by the Board of Trustees of the Fund to keep the
books of account of each Portfolio and/or compute the net asset value per share
of the outstanding shares of each Portfolio or, if directed in writing to do so
by the Fund on behalf of the Portfolio, shall itself keep such books of account
and/or compute such net asset value per share. If so directed, the Custodian
shall also calculate daily the net income of the Portfolio as described in the
Fund's currently effective prospectus related to such Portfolio and shall advise
the Fund and the Transfer Agent daily of the total amounts of such net income
and, if instructed in writing by an officer of the Fund to do so, shall advise
the Transfer Agent
-33-
<PAGE>
periodically of the division of such net income among its various components.
The calculations of the net asset value per share and the daily income of each
Portfolio shall be made at the time or times described from time to time in the
Fund's currently effective prospectus related to such Portfolio.
9. Records
The Custodian shall with respect to each Portfolio create and maintain
all records relating to its activities and obligations under this Contract in
such manner as will meet the obligations of the Fund under the Investment
Company Act of 1940, with particular attention to Section 31 thereof and
Rules 31a-1 and 31a-2 thereunder, applicable federal and state tax laws and
any other law or administrative rules or procedures which may be applicable to
the Fund. All such records shall be the property of the Fund and shall at all
times during the regular business hours of the Custodian be open for inspection
by duly authorized officers, employees or agents of the Fund and employees and
agents of the Securities and Exchange Commission. The Custodian shall, at the
Fund's request, supply the Fund with a tabulation of securities owned by each
Portfolio and held by the Custodian and shall, when requested to do so by the
Fund and for such compensation as shall be agreed upon between the Fund and the
Custodian, include certificate numbers in such tabulations.
10. Opinion of Fund's Independent Accountant
The Custodian shall take all reasonable action, as the Fund on behalf of
each applicable Portfolio may from time to time request, to obtain from year
to year favorable opinions from the
-34-
<PAGE>
Fund's independent accountants with respect to its activities hereunder in
connection with the preparation of the Fund's Form N-1A, and Form N-SAR or other
annual reports to the Securities and Exchange Commission and with respect to any
other requirements of such Commission.
11. Reports to Fund by Independent Public Accountants
The Custodian shall provide the Fund, on behalf of each of the Portfolios
at such times as the Fund may reasonably require, with reports by independent
public accountants on the accounting system, internal accounting control and
procedures for safeguarding securities, futures contracts and options on
futures contracts, including securities deposited and/or maintained in a
Securities System, relating to the services provided by the Custodian under
this Contract; such reports, shall be of sufficient scope and in sufficient
detail, as may reasonably be required by the Fund to provide reasonable
assurance that any material inadequacies would be disclosed by such examination,
and, if there are no such inadequacies, the reports shall so state.
12. Compensation of Custodian
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between the
Fund on behalf of each applicable Portfolio and the Custodian.
13. Responsibility of Custodian
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for
-35-
<PAGE>
the title, validity or genuineness of any property or evidence of title thereto
received by it or delivered by it pursuant to this Contract and shall be held
harmless in acting upon any notice, request, consent, certificate or other
instrument reasonably believed by it to be genuine and to be signed by the
proper party or parties, including any futures commission merchant acting
pursuant to the terms of a three - party futures or options agreement. The
Custodian shall be held to the exercise of reasonable care in carrying out the
provisions of this Contract, but shall be kept indemnified by and shall be
without liability to the Fund for any action taken or omitted by it in good
faith without negligence. It shall be entitled to rely on and may act upon
advice of counsel (who may be counsel for the Fund) on all matters, and shall be
without liability for any action reasonably taken or omitted pursuant to such
advice. Notwithstanding the foregoing, the responsibility of the Custodian with
respect to redemptions effected by check shall be in accordance with a separate
Agreement entered into between the Custodian and the Fund.
The Custodian shall be liable for the acts or omissions of a foreign
banking institution appointed pursuant to the provisions of Article 3 to the
same extent as set forth in Article l hereof with respect to sub-custodians
located in the United States (except as specifically provided in Article 3.10)
and, regardless of whether assets are maintained in the custody of a foreign
banking institution, a foreign securities depository or a branch of a U.S. bank
as contemplated by paragraph 3.11
-36-
<PAGE>
hereof, the Custodian shall not be liable for any loss, damage, cost, expense,
liability or claim resulting from, or caused by, the direction of or
authorization by the Fund to maintain custody or any securities or cash of the
Fund in a foreign country including, but not limited to, losses resulting from
nationalization, expropriation, currency restrictions, or acts of war or
terrorism.
If the Fund on behalf of a Portfolio requires the Custodian to take
any action with respect to securities, which action involves the payment of
money or which action may, in the opinion of the Custodian, result in the
Custodian or its nominee assigned to the Fund or the Portfolio being liable for
the payment of money or incurring liability of some other form, the Fund on
behalf of the Portfolio, as a prerequisite to requiring the Custodian to take
such action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
If the Fund requires the Custodian to advance cash or securities for
any purpose for the benefit of a Portfolio including the purchase or sale of
foreign exchange or of contracts for foreign exchange or in the event that the
Custodian or its nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the performance
of this Contract, except such as may arise from its or its nominee's own
negligent action, negligent failure to act or willful misconduct, any property
at any time held for the account of the applicable Portfolio shall be security
therefor and should the Fund fail to repay the Custodian promptly, the
-37-
<PAGE>
Custodian shall be entitled to utilize available cash and to dispose of such
Portfolio's assets to the extent necessary to obtain reimbursement.
14. Effective Period, Termination and Amendment
This Contract shall become effective as of its execution, shall continue in
full force and effect until terminated as hereinafter provided, may be amended
at any time by mutual agreement of the parties hereto and may be terminated by
either party by an instrument in writing delivered or mailed, postage prepaid to
the other party, such termination to take effect not sooner than thirty (30)
days after the date of such delivery or mailing; provided, however that the
Custodian shall not with respect to a Portfolio act under Section 2.10 hereof in
the absence of receipt of an initial certificate of the Secretary or an
Assistant Secretary that the Board of Trustees of the Fund has approved the
initial use of a particular Securities System by such Portfolio and the receipt
of an annual certificate of the Secretary or an Assistant Secretary that the
Board of Trustees has reviewed the use by such Portfolio of such Securities
System, as required in each case by Rule 17f-4 under the Investment Company Act
of 1940, as amended and that the Custodian shall not with respect to a Portfolio
act under Section 2.10A hereof in the absence of receipt of an initial
certificate of the Secretary or an Assistant Secretary that the Board of
Trustees has approved the initial use of the Direct Paper System by such
Portfolio and the receipt of an annual certificate of the Secretary or an
Assistant Secretary that the Board of Trustees has reviewed the
-38-
<PAGE>
use by such Portfolio of the Direct Paper System; provided further, however,
that the Fund shall not amend or terminate this Contract in contravention of any
applicable federal or state regulations, or any provision of the Declaration of
Trust, and further provided, that the Fund on behalf of one or more of the
Portfolios may at any time by action of its Board of Trustees (i) substitute
another bank or trust company for the Custodian by giving notice as described
above to the Custodian, or (ii) immediately terminate this Contract in the event
of the appointment of a conservator or receiver for the Custodian by the
Comptroller of the Currency or upon the happening of a like event at the
direction of an appropriate regulatory agency or court of competent
jurisdiction.
Upon termination of the Contract, the Fund on behalf of each
applicable Portfolio shall pay to the Custodian such compensation as may be due
as of the date of such termination and shall likewise reimburse the Custodian
for its costs, expenses and disbursements.
15. Successor Custodian
If a successor Custodian for the Fund, of one or more of the Portfolios
shall be appointed by the Board of Trustees of the Fund, the Custodian shall,
upon termination, deliver to such successor custodian at the office of the
Custodian, duly endorsed and in the form for transfer, all securities of each
applicable Portfolio then held by it hereunder and shall transfer to an account
of the successor custodian all of the securities of each such Portfolio held
in a Securities System.
-39-
<PAGE>
If no such successor custodian shall be appointed, the Custodian
shall, in like manner, upon receipt of a certified copy of a vote of the Board
of Trustees of the Fund, deliver at the office of the Custodian and transfer
such securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Trustees shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or trust
company, which is a "bank" as defined in the Investment Company Act of 1940,
doing business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $25,000,000, all securities, funds and other
properties held by the Custodian on behalf of each applicable Portfolio and all
instruments held by the Custodian relative thereto and all other property held
by it under this Contract on behalf of each applicable Portfolio and to transfer
to an account of such successor custodian all of the securities of each such
Portfolio held in any Securities System. Thereafter, such bank or trust company
shall be the successor of the Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or of
the Board of
-40-
<PAGE>
Trustees to appoint a successor custodian, the Custodian shall be entitled to
fair compensation for its services during such period as the Custodian retains
possession of such securities, funds and other properties and the provisions of
this Contract relating to the duties and obligations of the Custodian shall
remain in full force and effect.
16. Interpretive and Additional Provisions
In connection with the operation of this Contract, the Custodian and the
Fund on behalf of each of the Portfolios, may from time to time agree on such
provisions interpretive of or in addition to the provisions of this Contract as
may in their joint opinion be consistent with the general tenor of this
Contract. Any such interpretive or additional provisions shall be in a writing
signed by both parties and shall be annexed hereto, provided that no such
interpretive or additional provisions shall contravene any applicable federal or
state regulations or any provision of the Declaration of Trust of the Fund. No
interpretive or additional provisions made as provided in the preceding sentence
shall be deemed to be an amendment of this Contract.
17. Additional Funds
In the event that the Fund establishes one or more series of Shares in
addition to State Street Investment Fund with respect to which it desires to
have the Custodian render services as custodian under the terms hereof, it shall
so notify the Custodian in writing, and if the Custodian agrees in writing to
provide such services, such series of Shares shall become a Portfolio hereunder.
-41-
<PAGE>
18. Massachusetts Law to Apply
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.
19. Prior Contracts
This Contract supersedes and terminates, as of the date hereof, all prior
contracts between the Fund on behalf of each of the Portfolios and the Custodian
relating to the custody of the Fund's assets.
20. Disclaimer
It is expressly agreed that the obligations of the Fund hereunder, and the
authorization, execution and delivery of this document, shall not be binding
upon any of the Trustees, shareholders, nominees, officers, agents or employees
of the Fund as individuals or personally, but shall bind only the property of
the Portfolio, as provided in the Master Trust Agreement of the Fund. The Master
Trust Agreement of the Fund provides, and it is expressly agreed, that the
Portfolio of the Fund shall be solely and exclusively responsible for the
payment of any direct or indirect debts, liabilities and obligations relating to
the Portfolio, and that no other portfolio shall be responsible for the same.
-42-
<PAGE>
EXHIBIT 1
CUSTODIAN AGREEMENT
TO:
Gentlemen:
The undersigned ("State Street") hereby requests that you (the "Bank")
establish a custody account and a cash account for each State Street client
whose account is identified to this Agreement. Each such custody or cash account
as applicable will be referred to herein as the "Account" and will be subject to
the following terms and conditions:
1. The Bank shall hold as agent for State Street and shall physically
segregate in the Account such cash, bullion, coin, stocks, shares, bonds,
debentures, notes and other securities and other property which is delivered to
the Bank for that State Street Account (the "Property").
2. (a) Wlthout the prior approval of State Street it will not deposit
securities in any securities depository or utilize a clearing agency,
incorporated or organized under the laws of a country other than the United
States, unless such depository or clearing house operates the central system for
handling of securities or equivalent book-entries in that country or operates a
transnatlonal system for the central handling of securities or equivalent
book-entries.
(b) When Securities held for an Account are deposited in a securities
depository or clearing agency by the Bank, the Bank shall identify on its books
as belonging to State Street as agent for such Account, the Securities so
deposited.
The Bank represents that either:
3. (a) It currently has stockholders' equity in excess of $200 million (US
dollars or the equivalent of US dollars computed in accordance with generally
accepted US accounting principles) and will promptly inform State Street in the
event that there appears to be a substantial likelihood that its stockholders'
equity will decline below $200 million, or in any event, at such time as its
stockholders' equity in fact declines below $200 million; or
(b) It is the subject of an exemptive order issued by the United States
Securities and Exchange Commission, which such order permits State Street to
employ the Bank as a subcustodian, notwithstanding the fact that the Bank's
stockholders' equity is currently below $200 million or may in the future
decline below $200 million due to currency fluctuation.
4. Upon the written instructions of State Street as permitted by Section 8,
the Bank is authorized to pay out cash from the Account and to sell, assign,
transfer, deliver or exchange, or to purchase for the Account,
<PAGE>
any and all stocks, shares, bonds, debentures, notes and other securities
("Securities"), bullion, coin and other property, but only as provided in such
written instructions. The Bank shall not be held liable for any act or omission
to act on instructions given or purported to be given should there be any error
in such instructions.
5. Unless the Bank receives written instructions of State Street to the
contrary, the Bank is authorized:
a. To promptly receive and collect all income and principal with respect to
the Property and to credit cash receipts to the Account;
b. To promptly exchange Securities where the exchange is purely ministerial
(including, without limitation, the exchange of temporary Securities for
those in definitive form and the exchange of warrants, or other
documents of entitlement to Securities, for the Securities themselves);
c. To promptly surrender Securities at maturity or when called for
redemption upon receiving payment therefor;
d. Whenever notification of a rights entitlement or a fractional interest
resulting from a rights issue, stock dividend or stock split is received
for the Account and such rights entitlement or fractional interest bears
an expiration date, the Bank will endeavor to obtain State Street's
instructions, but should these not be received in time for the Bank to
take timely action, the Bank is authorized to sell such rights
entitlement or fractional interest and to credit the Account;
e. To hold registered in the name of the nominee of the Bank or its agents
such Securities as are ordinarily held in registered form;
f. To execute in State Street's name for the Account, whenever the Bank
deems it appropriate, such ownership and other certificates as may be
required to obtain the payment of income from the Property; and
g. To pay or cause to be paid from the Account any and all taxes and levies
in the nature of taxes imposed on such assets by any governmental
authority, and shall use reasonable efforts to promptly reclaim any
foreign withholding tax relating to the Account.
6. If the Bank shall receive any proxies, notices, reports, or other
communications relative to any of the Securities of the Account in connection
with tender offers; reorganizations, mergers, consolidations, or similar events
which may have an impact upon the issuer thereof, the Bank shall promptly
transmit any such communication to State Street by means as will permit State
Street to take timely action with respect thereto.
7. The Bank is authorized in its discretion to appoint brokers and agents
in connection with the Bank's handling of transactions relating to the Property
provided that any such appointment shall not relieve the Bank of any of its
responsibilities or liabilities hereunder.
<PAGE>
8. Written instructions shall include (i) instructions in writing signed by
such persons as are designated in writing by State Street (ii) telex or tested
telex instructions of State Street, (iii) other forms of instruction in computer
readable form as shall be customarily utilized for the transmission of like
information and (iv) such other forms of communication as from time to time
shall be agreed upon by State Street and the Bank.
9. The Bank shall supply periodic reports with respect to the safekeeping
of assets held by it under this Agreement. The content of such reports shall
include but not be limited to any transfer to or from any Account held by the
Bank hereunder and such other information as State Street may reasonably
request.
10. In addition to its obligations under Section 2 hereof, the Bank shall
maintain such other records as may be necessary to identify the assets hereunder
as belonging to each State Street client identified to this Agreement from time
to time.
11. The Bank agrees that its books and records relating to its actions
under this Agreement shall be opened to the physical, on-premises inspection and
audit at reasonable times by officers of, auditors employed by or other
representatives of State Street (including to the extent permitted under
law the independent public accountants for any entity whose Property is being
held hereunder) and shall be retained for such period as shall be agreed by
State Street and the Bank.
12. The Bank shall be entitled to reasonable compensation for its services
and expenses as custodian under this Agreement, as agreed upon from time to time
by the Bank and State Street.
13. The Bank shall exercise reasonable care in the performance of its
duties as are set forth or contemplated herein or contained in instructions
given to the Bank which are not contrary to this Agreement, and shall maintain
adequate insurance and agrees to indemnify and hold State Street and each
Account from and against any loss, damage, cost, expense, liability or claim
arising out of or in connection with the Bank's performance of its obligations
hereunder.
14. The Bank agrees that (i) the Property is not subject to any right,
charge, security interest, lien or claim of any kind in favor of the Bank or any
of its agents or its creditors except a claim of payment for their safe custody
and administration and (ii) the beneficial ownership of the Property shall be
freely transferable without the payment of money or other value other than for
safe custody or administration.
15. This Agreement may be terminated by the Bank or State Street by at
least 60 days' written notice to the other, sent by registered mail or express
courier. The Bank, upon the date this Agreement terminates pursuant to notice
which has been given in a timely fashion, shall deliver the Property in
accordance with written instructions of State Street specifying the name(s) of
the person(s) to whom the Property shall be delivered.
<PAGE>
16. The Bank and State Street shall each use its best efforts to maintain
the confidentiality of the Property in each Account, subject, however, to the
provisions of any laws requiring the disclosure of the Property.
17. The Bank agrees to follow such Operating Requirements as State Street
may require from time to time. A copy of the current State Street Operating
Requirements is attached as an exhibit to this Agreement.
18. Unless otherwise specified in this Agreement, all notices with respect
to matters contemplated by this Agreement shall be deemed duly given when
received in writing or by tested telex by the Bank or State Street at their
respective addresses set forth below, or at such other address as specified in
each case in a notice similarly given:
To State Street: Global Custody Services Division
STATE STREET BANK AND TRUST COMPANY
P.O. Box 470
Boston, Massachusetts 02102
To the Bank:
19. This Agreement shall be governed by and construed in accordance with
the laws of ________________________________________.
Please acknowledge your agreement to the foregoing by executing a copy of
this letter.
Very truly yours,
STATE STREET BANK AND TRUST COMPANY
By ____________________________
Agreed to by:
By _______________________________
Date _____________________________
scust/
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the 1st day of May, 1989.
ATTEST STATE STREET INVESTMENT TRUST
/s/ Constantine Hutchins, Jr. By: /s/ Frank L. Tarantino
- ------------------------------- ----------------------
ATTEST STATE STREET BANK AND TRUST COMPANY
/s/ Joseph P. Vinich By: /s/ W.J. Hayes
- -------------------- --------------
Assistant Secretary Vice President
-43-
Exhibit (8)(b)
AMENDMENT TO CUSTODIAN CONTRACT
Agreement made by and between State Street Bank and Trust Company (the
"Custodian") and State Street Investment Trust (the "Fund").
WHEREAS, the Custodian and the Fund are parties to a custodian contract
dated May 1, 1989 (the "Custodian Contract") governing the terms and conditions
under which the Custodian maintains custody of the securities and other assets
of the Fund; and
WHEREAS, the Custodian and the Fund desire to amend the terms and
conditions under which the Custodian maintains the Fund's securities and other
non-cash property in the custody of certain foreign sub-custodians in conformity
with the requirements of Rule 17f-5 under the Investment Company Act of 1940, as
amended;
NOW THEREFORE, in consideration of the premises and covenants contained
herein, the Custodian and the Fund hereby amend the Custodian Contract by the
addition of the following terms and provisions;
1. Notwithstanding any provisions to the contrary set forth in the
Custodian Contract, the Custodian may hold securities and other non-cash
property for all of its customers, including the Fund, with a foreign
sub-custodian in a single account that is identified as belonging to the
Custodian for the benefit of its customers, provided however, that (i) the
records of the Custodian with respect to securities and other non-cash property
of the Fund which are maintained in such account shall identify by book-entry
those securities and other non-cash property belonging to the Fund and (ii) the
Custodian shall require that securities and other non-cash property so held by
the foreign sub-custodian be held separately from any assets of the foreign
sub-custodian or of others.
2. Except as specifically superseded or modified herein, the terms and
provisions of the Custodian Contract shall continue to apply with full force and
effect.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed as a sealed instrument in its name and behalf by its duly authorized
representative this 2nd day of November, 1995.
STATE STREET INVESTMENT TRUST
(Currently State Street Research
Master Investment Trust)
By: /s/ Gerard P. Maus
------------------
Title: Treasurer
--------------
STATE STREET BANK AND TRUST COMPANY
By: /s/ Timothy Panaro
------------------
Title: Vice President
---------------
Exhibit (9)
AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION
AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION dated as of February
7, 1989 (the "Agreement") between STATE STREET INVESTMENT CORPORATION, a
Massachusetts corporation (the "Corporation"), and STATE STREET INVESTMENT
TRUST, a Massachusetts business trust (the "Trust"), both with principal offices
at One Financial Center, Boston, Massachusetts.
WHEREAS the Corporation is a diversified, open-end management investment
company registered under the Investment Company Act of 1940, as amended;
WHEREAS the Corporation has authorized capital stock consisting of
40,000,000 shares of common stock, $2.50 par value; and
WHEREAS the Trust was organized pursuant to an Agreement and Declaration of
Trust (the "Master Trust Agreement") dated February 7, 1989 and is presently
authorized to issue an unlimited number of shares of beneficial interest, $.001
par value.
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto agree as follows:
1. Plan of Reorganization. The Corporation shall, prior to the Effective
Time of the Reorganization, transfer all of its business and assets, and assign
all its liabilities, to the Trust, and the Trust, through a Sub-Trust, shall
acquire all such business and assets, and shall assume all such liabilities of
the Corporation then existing, whether absolute, accrued, contingent or
otherwise, including without limitation all liabilities of the Corporation to
stockholders who elect to dissent from the transaction contemplated hereby and
perfect their appraisal rights under Massachusetts law and all fees and expenses
in connection with the transaction contemplated hereby in exchange for delivery
to the Corporation by the Trust of a number of shares of the Trust (both full
and fractional) equivalent to the number of shares of the Corporation
outstanding immediately prior to the Effective Time of the Reorganization. All
debts, liabilities, obligations and duties of the Corporation, to the extent
that they exist at or after the Effective Time of the Reorganization, shall
after the Effective Time of the Reorganization attach to the Sub-Trust and may
be enforced against the Sub-Trust to the same extent as if the same had been
incurred by the Sub-Trust.
2. Liquidation and Dissolution of the Corporation. At the Effective Time of
the Reorganization, the Corporation will liquidate and the shares of the Trust
(both full and fractional) received by the Corporation will be distributed to
the
<PAGE>
stockholders of the Corporation (other than those stockholders who have objected
to the Reorganization so as to be eligible to perfect statutory appraisal
rights) in exchange for their shares of the Corporation, each stockholder to
receive a number of shares of the Trust equal to the number of shares of the
Corporation held by him, provided that a stockholder who has objected to the
Reorganization so as to be eligible to perfect statutory appraisal rights shall
have no rights with respect to Trust shares until such time as he has waived or
otherwise relinquished such statutory appraisal rights. Such liquidation and
distribution will be accompanied by the establishment of an open account on the
share records of the Trust in the name of each stockholder of the Corporation
and representing the respective pro rata number of shares of the Trust due such
stockholder. Certificates for shares of the Corporation issued prior to the
Reorganization shall represent outstanding shares of the Trust after the
Effective Time of the Reorganization. As soon as practicable after the
Effective Time of the Reorganization, the Corporation shall file Articles of
Dissolution for recording with the Secretary of State of the Commonwealth of
Massachusetts, and shall take, in accordance with the Massachusetts Business
Corporation Law, all other steps as shall be necessary and proper to effect a
complete dissolution of the Corporation.
3. Issued Share. Prior to the Effective Time of the Reorganization and
after the Corporation has taken the actions authorized by stockholders of the
Corporation pursuant to Section 4(c) hereof, the single share of the Trust
heretofore held by the Corporation shall be redeemed and canceled by the Trust.
4. Conditions Precedent. The obligations of the Corporation and the Trust
to effectuate the Plan of Reorganization and Liquidation hereunder shall be
subject to the satisfaction of each of the following conditions:
(a) Each party shall have received an opinion of Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo, P.C. that the Trust is duly formed and validly
existing under the laws of the Commonwealth of Massachusetts and that the shares
of the Trust to be issued pursuant to the terms of this Agreement have been duly
authorized, and, when issued and delivered as provided in this Agreement, will
have been validly issued, fully paid and nonassessable.
(b) Each party shall receive an opinion of Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo, P.C. to the effect that the reorganization
contemplated by this Agreement qualifies as a "reorganization" under Section
368(a)(1) of the Internal Revenue Code of 1954, as amended (the "Code").
(c) A vote approving this Agreement and the Reorganization
contemplated hereby shall have been adopted by at least two thirds of the
outstanding shares of common stock of the
-2-
<PAGE>
Corporation entitled to vote at an annual or special meeting, such a vote by the
stockholders of the Corporation at such meeting to be deemed to authorize the
Corporation to vote, and the Corporation shall have voted, as the sole
stockholder of the Trust to:
(1) elect Trustees of the Trust;
(2) approve the selection of Coopers & Lybrand as independent
accountants of the Trust;
(3) adopt all other existing contractual agreements of the
Corporation for the Trust.
(d) The Board of Trustees of the Trust shall have taken the following
actions at a meeting duly called for such purposes:
(1) selection of Coopers & Lybrand as independent accountants of the
Trust;
(2) authorization of the issuance by the Trust, prior to the
Effective Time of the Reorganization, of one share of the Trust to the
Corporation in consideration of the payment of $1.00 for the purpose of enabling
the Corporation to vote on the matters referred to in paragraph (c) in this
Section 4;
(3) submission of the matters referred to in paragraph (c) of this
Section 4 to the Corporation as the sole stockholder of the Trust; and
(4) authorization of the issuance by the Trust of shares of the Trust
at the Effective Time of the Reorganization in exchange for the assets of the
Corporation pursuant to the terms and provisions of this Agreement.
At any time prior to the Effective Time of the Reorganization, any of the
foregoing conditions may be waived by the Board of Directors of the Corporation
if, in the judgment of such Board, such waiver shall not have a material adverse
effect on the benefits intended under this Agreement to the stockholders of the
Corporation.
5. Effective Time of the Reorganization. The exchange of the Corporation's
business and assets for shares of the Trust shall be effective as of the opening
of business on May 1, 1989, or at such other time and date as fixed by the
mutual consent of the parties (the "Effective Time of the Reorganization").
6. Amendment. This Agreement may be amended at any time by action of the
Board of Directors of the Corporation or the Trustees of the Trust,
notwithstanding approval thereof by the stockholders of the Corporation,
provided that no amendment shall have a material adverse effect on the interests
of the stockholders of the Corporation.
-3-
<PAGE>
7. Termination. This Agreement and the transactions contemplated hereby may
be terminated and abandoned by resolution of the Board of Directors of the
Corporation at any time prior to the Effective Time of the Reorganization, if
circumstances should develop that, in the opinion of the Board, make proceeding
with the Agreement inadvisable.
8. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the Commonwealth of Massachusetts.
9. Further Assurances. The Corporation and the Trust shall take such
further action as may be necessary or desirable and proper to consummate the
transaction contemplated hereby.
10. Limitation of Liability. The term "State Street Investment Trust" means
and refers to the Trustees from time to time serving under the Master Trust
Agreement of the Trust dated February 7, 1989, as the same may be subsequently
thereto, or subsequently hereto, amended. It is expressly agreed that the
obligations of the Trust hereunder shall not be binding upon any of the
Trustees, shareholders, nominees, officers, agents or employees of the Trust,
personally, but bind only the assets and property of the Sub-Trust, as provided
in the Master Trust Agreement of the Trust.
STATE STREET INVESTMENT CORPORATION
By: /s/ Herbert P. Hess
-------------------------------
Herbert P. Hess, Vice President
STATE STREET INVESTMENT TRUST
By: /s/ Charles L. Smith, Jr.
------------------------------
Charles L. Smith, Jr., Trustee
Exhibit (10)
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, Massachusetts 02111
701 Pennsylvania Avenue, N.W. Telephone: 617/542-6000
Washington, D.C. 20004 Telex: 94-0198
Telephone: 202/434-7300 Fax: 617/542-2241
Fax: 202/434-7400
Direct Dial Number
(617) 348-1669
November 24, 1992
State Street Master Investment Trust
One Financial Center
Boston, Massachusetts 02111
Dear Sir:
We are furnishing this opinion and consent to the use of our name with a
view to your filing the same or duplicates thereof with the Securities and
Exchange Commission, Washington, D.C., as Exhibit 10 to Post-Effective Amendment
No. 3 to your Registration Statement on Form N-1A, which consists of
Post-Effective Amendment No. 3 to your Registration Statement under the
Securities Act of 1933, as amended, (No. 33-32729) and Amendment No. 17 to your
Registration Statement under the Investment Company Act of 1940, as amended,
(No. 811-84) filed by you with said Commission and with which this opinion or
duplicates thereof are to be filed. Such Registration Statement relates in part
to the public offering of an indefinite number of shares of beneficial interest
in State Street Investment Trust ("Shares"), a series of State Street Master
Investment Trust
We have examined all such records, papers and documents as we believe
necessary in order to enable us to render the opinion set forth below.
On the basis of the foregoing we are of the opinion that:
1. State Street Master Investment Trust (the "Trust") was duly formed and
is a lawfully existing Massachusetts Business Trust under the laws of the
Commonwealth of Massachusetts.
2. The Trust has authorized an unlimited number of shares of beneficial
interest.
3. The Shares have been duly authorized and, when the Shares are issued and
delivered in the manner, and the Trust has received therefor the consideration,
described in said Registration Statement and in the related Prospectus, the
Shares so issued and delivered will be legally and validly issued, fully paid
and nonassessable.
Very truly yours,
/s/ Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
---------------------------
MINTZ, LEVIN, COHN, FERRIS,
GLOVSKY AND POPEO, P.C.
EXHIBIT (11)
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of
State Street Research Master Investment Trust:
We consent to the inclusion in Post-Effective Amendment
No. 11 to the Registration Statement of the State Street Research Master
Investment Trust on Form N-1A (Securities Act of 1933 File No. 33-32729) of our
report dated February 9, 1998, on our audit of the financial statements and the
financial highlights of State Street Research Investment Trust for the fiscal
year ended December 31, 1997. We also consent to the reference to our Firm under
the captions "Financial Highlights" and "Independent Accountants" in the
Registration Statement.
/s/COOPERS & LYBRAND L.L.P.
---------------------------
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
March 2, 1998
Exhibit (14)(a)
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State Street Research Funds
- --------------------------------------------------------------------------------
IRA Application
Please use a pen and print in CAPITAL LETTERS.
1 What Type of IRA?
- --------------------------------------------------------------------------------
(Check only one box to specify the type of IRA you are establishing. If
appropriate, please also indicate the type of transaction you are making.)
[ ] TRADITIONAL IRA (Check one box)
o Annual Contributions of up to $2,000 (or total compensation, if less).
Indicate year and amount:
Contribution for [ ] current tax year [ ] prior tax year Amount: $[ ]
o Rollover of a withdrawal from another IRA within the past 60 days.
o Direct transfer* from another IRA. (Use a Traditional IRA for a rollover
or direct transfer if the other IRA contains only annual contributions,
not rollover or direct rollover amounts from an employer plan or 403(b)).
[ ] ROLLOVER IRA (Contributions should come from one of the following)
o Rollover of an eligible rollover distribution from an employer-sponsored
retirement plan. A check should be attached to this application.
o Direct rollover from an employer-sponsored retirement plan. A Transfer of
Assets Request Form should be returned with this application.
o Direct transfer or rollover from an existing IRA containing money
previously from an employer-sponsored retirement plan. A Transfer of
Assets Request Form should be returned with this application.
[ ] ROTH IRA (Check one box)
[ ] Annual Contributions of up to $2,000 (or total compensation, if less).
Contribution for 1998 in the amount of $ [ ]
[ ] Conversion of a State Street Research Traditional IRA to a State Street
Research Roth IRA:
State Street Research IRA Account No: [ ]
Amount converted: [ ] Full Balance [ ] Part ($____________________
OR _____________%)
[ ] Transfer* or Rollover of Traditional IRA with another trustee/custodian
to a State Street Research Roth IRA.
Under IRS rules, you must establish separate Roth IRAs for annual
contributions and for conversion/rollover/transfer of amounts from a
Traditional IRA in any particular calendar year. The taxable amount
converted from a Traditional IRA is considered taxable income to you in the
year of the conversion. For conversions completed during 1998, the
additional taxable income is spread over the four-year period beginning in
1998 and ending in 2001.
2 Your Name and Address
- --------------------------------------------------------------------------------
(Use separate application for Traditional IRA or Roth IRA for spouse)
[ ][ ][ ][ ][ ][ ][ ][ ] [ ] [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ]
First name Middle Last name
[ ][ ][ ][ ][ ] [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ]
Street number Street name
[ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ] [ ][ ] [ ][ ][ ][ ][ ]
City State Zip
[ ][ ][ ]-[ ][ ][ ]-[ ][ ][ ][ ] [ ][ ][ ]-[ ][ ][ ]-[ ][ ][ ][ ]
Daytime phone number Evening phone number
[ ][ ][ ][ ]-[ ][ ]-[ ][ ][ ][ ] [ ]-[ ][ ]-[ ][ ][ ][ ]
Social Security number Date of birth (month/day/year)
<PAGE>
- --------------------------------------------------------------------------------
State Street Research Funds
- --------------------------------------------------------------------------------
3 Which Funds Have You Selected?
- --------------------------------------------------------------------------------
o Choose one share class for each fund. Generally, the minimum investment is
$2,000 per account.
<TABLE>
<CAPTION>
Name Amount You Are Investing Share Class
A B C
<S> <C> <C> <C> <C> <C>
[ ] Aurora* $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % [ ] [ ] [ ]
[ ] Capital $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % [ ] [ ] [ ]
[ ] Emerging Growth $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % [ ] [ ] [ ]
[ ] Equity Income** $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % [ ] [ ] [ ]
[ ] Equity Investment $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % [ ] [ ] [ ]
[ ] Global Resources $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % [ ] [ ] [ ]
[ ] Government Income $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % [ ] [ ] [ ]
[ ] Growth $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % [ ] [ ] [ ]
[ ] High Income $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % [ ] [ ] [ ]
[ ] International Equity $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % [ ] [ ] [ ]
[ ] Investment Trust $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % [ ] [ ] [ ]
[ ] Legacy $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % [ ] [ ] [ ]
[ ] Managed Assets $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % [ ] [ ] [ ]
[ ] Money Market $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % Class E only
[ ] Strategic Income $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % [ ] [ ] [ ]
[ ] Other ______________ $[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] or [ ] % [ ] [ ] [ ]
name of fund
</TABLE>
*Check with your financial adviser to find out about the current availability
of this Fund. **Pending name change to State Street Research Alpha Fund.
If a check is enclosed, make it payable to "State Street Bank and Trust Company,
Trustee." (Please add $10 for the first year's trustee fee otherwise, the fee
will be deducted from your account at year end.)
4 Options for Reducing Sales Charges
- --------------------------------------------------------------------------------
[ ] I wish to apply for reduced Class A sales charges through:
[ ] Right of Accumulation
When calculating my sales charges for this investment, please include the assets
in the following accounts owned by me, my family members or other eligible
persons:
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Account number
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Account number
[ ] Letter of Intent
I plan to invest, without obligation, a total of at least the following amount
in eligible mutual funds over the next 13 months:
[ ] $100,000 [ ] $250,000 [ ] $500,000 [ ] $1 million
[ ] Please include investments made within the past 90 days in these accounts
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Account number
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Account number
<PAGE>
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State Street Research Funds
- --------------------------------------------------------------------------------
5 Telephone Exchange Privilege
- --------------------------------------------------------------------------------
o Note: You automatically receive this privilege unless you decline it.
o See terms and conditions for telephone exchange requests in current
prospectus(es).
o Telephone Exchange Privilege Allows you or your dealer to request
exchanges into other State Street Research funds (and assumes you have read
the relevant prospectuses).
I DO NOT want this privilege on my account [ ]
Initial here
6 Transfers From Your Bank
- --------------------------------------------------------------------------------
* Convenient services to help you buy fund shares.
* Be sure to attach a deposit slip or voided, unsigned check.
[ ] I would like to request one or more of the following services:
[ ] Investamatic
Allows you to make periodic investments into the State Street Research
fund of your choice. I authorize automatic withdrawals from the bank
account specified on this page. I request these withdrawals to occur
[ ] every month, on the [ ] 5th of the month.
[ ] every quarter, [ ] 20th of the month.
[ ] 5th and 20th of the month.
$ [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ]
Investment amount ($50 minimum)
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Fund name
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Account number (if existing account)
$ [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ]
Investment amount ($50 minimum)
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Fund name
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Account number (if existing account)
[ ] EZ Trader
Allows you to move money at any time from your bank account to your fund
account by calling State Street Research. NOTE: Your bank must be a
member of the Automated Clearing House (ACH) system.
[ ] Bank Account Information. Please establish the service(s) between my fund
account and my:
[ ] Checking account (voided, unsigned check attached)
[ ] Now / money market / savings account (deposit slip attached)
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Bank name
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Bank address
[ ] [ ] [ ] [ ] [ ]
City
[ ] [ ] [ ] [ ] [ ] [ ] [ ]
State Zip
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Bank routing number
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Bank account number
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
First name of bank account holder, exactly as on bank statements
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Last name of bank account holder, exactly as on bank statements
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
First name of second bank account holder, if any
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Last name of second bank account holder, if any
[ ]
Signature of one bank account holder, exactly as on bank statements
[ ]
Signature of second bank account holder, if any
<PAGE>
- --------------------------------------------------------------------------------
State Street Research Funds
- --------------------------------------------------------------------------------
7 Who is Your Beneficiary?
- --------------------------------------------------------------------------------
(Only one primary beneficiary required per account. You may designate a
secondary beneficiary if desired. If you wish to designate two or more
primary and/or secondary beneficiaries, use a separate sheet and specify the
desired percentage to each.)
Primary beneficiary
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
First name Middle Last name
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Street number Street name
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
City State Zip
[ ] [ ] [ ]- [ ] [ ]- [ ] [ ] [ ] [ ] [ ] [ ]- [ ] [ ]- [ ] [ ] [ ] [ ]
Social Security number Date of birth (month/day/year)
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Relationship
Secondary beneficiary
(If the person(s) named as primary beneficiary fails to survive you.)
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
First name Middle Last name
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Street number Street name
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
City State Zip
[ ] [ ] [ ] [ ]- [ ] [ ]- [ ] [ ] [ ] [ ] [ ] [ ]-[ ] [ ]-[ ] [ ] [ ] [ ]
Social Security number Date of birth (month/day/year)
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Relationship
8 Acceptance by the Trustee:
- --------------------------------------------------------------------------------
This Individual Retirement Account shall be deemed to have been accepted by the
Trustee, State Street Bank and Trust Company, after all necessary forms,
properly completed, are received by State Street Research Service Center, and
delivered by the Service Center to the agent for the Trustee.
<PAGE>
- --------------------------------------------------------------------------------
State Street Research Funds
- --------------------------------------------------------------------------------
9 We Need Your Signature
- --------------------------------------------------------------------------------
By checking the "Traditional IRA" box or the "Rollover IRA" box, I designate the
account as an Individual Retirement Account under Internal Revenue Code Section
408(a). By checking the "Roth IRA" box, I designate the account as a Roth
Individual Retirement Account under Internal Revenue Code Section 408A. I
appoint State Street Bank and Trust Company as Trustee of my account, direct
that contributions to my Traditional IRA, Rollover IRA or Roth IRA be invested
as specified by this application, and designate the individual(s) named above,
or in any signed attachment, as my beneficiary(ies). I have received a current
prospectus for each of the Fund(s) indicated above and the Terms and Conditions
of the State Street Research Combined IRA (which are incorporated herein by
reference) and have read the State Street Research Disclosure Statement for
either Traditional IRAs and Rollover IRAs, or Roth IRAs, as applicable.
If I have indicated a Rollover IRA or a Traditional IRA with a contribution
consisting of a rollover or a direct transfer from another IRA, I certify
that the contribution does not include any employee contributions to any
qualified plan (other than accumulated deductible employee contributions) or
403(b) arrangement; that any assets transferred in kind are the same assets
received by me in the distribution being rolled over; if the distribution is
from another Traditional IRA, that I have not made another Traditional IRA
rollover within the one-year period immediately preceding this rollover; that
such distribution was received within 60 days of making the rollover to this
account; and that no portion of the amount rolled over is required under the
minimum distribution rules.
If I have elected a Conversion or Rollover Roth IRA, I acknowledge that the
amount converted will be treated as taxable income (except for prior
nondeductible contributions) for federal income tax purposes.
Under penalties of perjury, I further certify that (1) the number shown on
this form is my correct taxpayer identification number (or I am waiting for a
number to be issued to me), and (2) I am not subject to backup withholding
because (a) I am exempt from backup withholding, or (b) I have not been
notified by the Internal Revenue Service that I am subject to backup
withholding as a result of a failure to report all interest or dividends, or
(c) the IRS has notified me that I am no longer subject to backup withholding.
I confirm that all the information, instructions and agreements set forth
hereon shall apply to the account, and if applicable, shall also apply to any
other Fund account with shares acquired upon exchange of shares of any Fund
held in my IRA.
[ ] [ ] [ ]-[ ] [ ]-[ ] [ ] [ ] [ ]
Your signature Date (month/day/year)
Applications with checks in excess of $10,000 that are not sent through a
financial intermediary will need a signature guarantee. Please contact our
Service Center at 1-800-562-0032 for more information.
<PAGE>
- --------------------------------------------------------------------------------
State Street Research Funds
- --------------------------------------------------------------------------------
10 Dealer Information
- --------------------------------------------------------------------------------
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Dealer first name Middle Last name
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Street number Street name of home office
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
City State Zip
[ ] [ ] [ ]-[ ] [ ] [ ]- [ ] [ ] [ ] [ ]
Telephone number
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Street number Street name of branch office servicing account
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
City State Zip
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Telephone number
[ ]
Signature of authorized officer of dealer
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Registered representative's name Registered representative's telephone number
By signing above, the dealer:
o agrees to the terms of the current prospectus(es), Application and current
dealer agreement, which is included by reference.
o represents that it has given the owner(s) the relevant prospectus(es).
o represents that it has completed this Application according to instructions
from the owner(s).
o will indemnify the Fund(s), its adviser, distributor or other agents from any
losses resulting from these instructions.
o guarantees the owner's legal capacity and all signatures of this Application
and on related investment checks and instructions.
State Street Bank and Trust Company, Trustee: You are hereby authorized and
appointed on behalf of the above-signed dealer to execute the purchase
transactions in accordance with the terms and conditions of this Application,
and to confirm each purchase.
[State Street logo] STATE STREET RESEARCH
P.O. Box 8408
Boston, MA 02266-8408
1-800-562-0032
CONTROL NUMBER: 4513-971219(1298)SSR-LD IR-862E-12970
<PAGE>
- --------------------------------------------------------------------------------
State Street Research Funds
Individual Retirement Account
- --------------------------------------------------------------------------------
Please use a pen and print in CAPITAL LETTERS.
Transfer of Assets Request Form
Please send this form to: State Street Research Service Center, P.O. Box
8408, Boston, MA 02266-8408. Do not rollover or transfer any amounts required
to be paid to you under the minimum distribution rules that apply to a
Traditional IRA Account after you reach age 70-1/2.
1 Your Name and Address
- --------------------------------------------------------------------------------
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
First name Middle Last name
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Street number Street name
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
City State Zip
[ ] [ ] [ ]-[ ] [ ] [ ]-[ ] [ ] [ ] [ ] [ ] [ ] [ ]-[ ] [ ] [ ]-[ ] [ ] [ ] [ ]
Daytime phone number Evening phone number
[ ] [ ] [ ]- [ ] [ ]-[ ] [ ] [ ] [ ] [ ] [ ]-[ ] [ ]-[ ] [ ] [ ] [ ]
Social Security number Date of birth (month/day/year)
If you already have a State Street Research IRA to which amounts will be
transferred, please put the account number in the space below.
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Fund number (leave any unused spaces blank)
If you do not have a State Street Research IRA, please complete the State Street
Research IRA Application and submit it with this document.
2 Which Funds Have You Selected?
- --------------------------------------------------------------------------------
Note: If you are submitting a State Street Research IRA Application with this
Transfer of Assets Request Form, you may indicate your investment selections on
the Application and leave the following fund selections blank on this form.
<TABLE>
<CAPTION>
Share Class*
A B C
<S> <C> <C> <C>
[row of open boxes] [ ] [ ] [ ]
Fund name
[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] OR [ ]%
Amount ($2,000 minimum in dollar amount or percentage)
[row of open boxes] [ ] [ ] [ ]
Fund name
[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] OR [ ]%
Amount ($2,000 minimum in dollar amount or percentage)
[row of open boxes] [ ] [ ] [ ]
Fund name
[ ] , [ ] [ ] [ ] , [ ] [ ] [ ] . [ ] [ ] OR [ ]%
Amount ($2,000 minimum in dollar amount or percentage)
TOTAL 100%
----------
</TABLE>
*Investments in Money Market Fund will purchase Class E shares.
**Class C shares not available through MetLife Securities, Inc.
3 Type of IRA Receiving Transfer or Direct Rollover (Check One Box)
- --------------------------------------------------------------------------------
[ ] Traditional IRA Transfers to a Traditional IRA should be made only from
another Traditional IRA, simplified employee pension (SEP) plan account, or a
SIMPLE IRA at least 2 years after your first contribution. Note: You cannot
transfer from a Roth IRA to a Traditional IRA.
[ ] Rollover IRA Transfers to a Rollover IRA include transfers of eligible
rollover distributions from a qualified employer plan or 403(b) arrangement
(also called direct rollovers), or from another IRA that holds only amounts
originating with such a direct rollover.
[ ] Roth IRA Transfer must be from a Traditional IRA or a Roth IRA only.
(Transfers from a Traditional IRA are subject to tax as income.) Under IRS
rules, you must establish a separate Roth IRA for amounts transferred from a
Traditional IRA in any particular calendar year. Note: You cannot directly
rollover any amount from an employer-sponsored plan to a Roth IRA.
<PAGE>
- --------------------------------------------------------------------------------
State Street Research Funds
- --------------------------------------------------------------------------------
4 Information about Current Account and Transfer Authorization
- --------------------------------------------------------------------------------
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Name of current Trustee/Custodian
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Current account number
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Street number Street name
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
City State Zip
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]-[ ] [ ] [ ]-[ ] [ ] [ ] [ ]
Name of contact person Telephone number of contact person
Include a copy of your most recent statement.
By signing below, I authorize and direct my current trustee/custodian to
transfer my account assets to State Street Research as follows:
Please redeem [ ] ALL or [ ] PART ($[ ] OR [ ]%) of my present account and
transfer the redemption proceeds to State Street Research [ ] Immediately
[ ] at maturity.
[ ] [ ] [ ]-[ ] [ ]-[ ] [ ] [ ] [ ]
Your signature Date (month/day/year)
[ ] [ ] [ ]-[ ] [ ]-[ ] [ ] [ ] [ ]
Employer's signature (if required) Date (month/day/year)
5 Signature Guarantee
- --------------------------------------------------------------------------------
(Ask your current custodian/trustee if it requires your signature to be
guaranteed.)
[ ]
Name of Firm
[ ] [ ] [ ]-[ ] [ ]-[ ] [ ] [ ] [ ]
Signature of Authorized Officer Date (month/day/year)
Please do not fill out the lower portion of this form.
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For current trustee/custodian use: Instructions for delivery to State Street
Research IRA.
Please liquidate and transfer on a fiduciary-to-fiduciary basis all or part of
the designated account as instructed above and make check payable to: State
Street Bank and Trust Company, Trustee. Please include account number and FBO on
the check. Mail to: State Street Research Service Center, P.O. Box 8408, Boston,
MA 02266-8408. Please remember to include a copy of this form, along with a
check, for proper credit to the taxpayer's account. State Street Research
Service Center will deliver the items to the agent for State Street Bank and
Trust Company, which serves as Trustee.
For successor trustee/custodian use: Successor Trustee's acceptance of
Individual Retirement Account assets.
State Street Bank and Trust Company will accept the transfer described above
once this form has been completed and signed by you.
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Authorized signature of acceptance by Agent for State Street Bank and Trust
Company, Trustee.
[State Street logo] State Street Research
P.O. Box 8408
Boston, MA 02266-8408
1-800-562-0032
CONTROL NUMBER: 4512-971219(1298)SSR-LD IR-864E-1297
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State Street Research
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Terms & Conditions
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The Terms and Conditions for Traditional IRAs apply to Traditional IRAs
operating under section 408(a) of the Internal Revenue Code only. Articles I
through VII of these Terms and Conditions for Traditional IRAs are in the form
promulgated by the Internal Revenue Service in Form 5305 for use in establishing
an individual retirement Trust Account. Please see additional Terms and
Conditions for All IRAs below for additional provisions applicable to your
Traditional IRA.
ARTICLE I.
The Trustee may accept additional cash contributions on behalf of the
Grantor for a tax year of the Grantor. The total cash contributions are limited
to $2,000 for the tax year unless the contribution is a rollover contribution
described in section 402(c) (but only after December 31, 1992), 403(a)(4),
403(b)(8), 408(d)(3), or an employer contribution to a simplified employee
pension plan as described in section 408(k). Rollover contributions before
January 1, 1993, include rollovers described in section 402(a)(5), 402(a)(6),
402(a)(7), 403(a)(4), 403(b)(8), 408(d)(3), or an employer contribution to a
simplified employee pension plan as described in section 408(k).
ARTICLE II.
The Grantor's interest in the balance in the Trust Account is
nonforfeitable.
ARTICLE III.
1. No part of the custodial funds may be invested in life insurance
contracts, nor may the assets of the Trust Account be commingled with other
property except in a common trust fund or common investment fund (within the
meaning of section 408(a)(5)).
2. No part of the custodial funds may be invested in collectibles (within
the meaning of section 408(m)) except as otherwise permitted by section
408(m)(3) which provides an exception for certain gold and silver coins and
coins issued under the laws of any state.
ARTICLE IV.
1. Notwithstanding any provision of this agreement to the contrary, the
distribution of the Grantor's interest in the Trust Account shall be made in
accordance with the following requirements and shall otherwise comply with
section 408(a)(6) and Proposed Regulations section 1.408-8, including the
incidental death benefit provisions of Proposed Regulations section
1.401(a)(9)-2, the provisions of which are herein incorporated by reference.
2. Unless otherwise elected by the time distributions are required to begin
to the Grantor under paragraph 3, or to the surviving spouse under paragraph 4,
other than in the case of life annuity, life expectancies shall be recalculated
annually. Such election shall be irrevocable as to the Grantor and the surviving
spouse and shall apply to all subsequent years. The life expectancy of a
nonspouse beneficiary may not be recalculated.
3. The Grantor's entire interest in the Trust Account must be, or begin to
be, distributed by the Grantor's required beginning date (April 1 following the
calendar year end in which the Grantor reaches age 70-1/2). By that date, the
Grantor may elect, in a manner acceptable to the Trustee, to have the balance in
the custodial account distributed in:
(a) A single sum payment
(b) An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the life of the Grantor.
(c) An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the joint and last survivor lives of the
Grantor and his or her designated beneficiary.
(d) Equal or substantially equal annual payments over a specified period
that may not be longer than the Grantor's life expectancy.
(e) Equal or substantially equal annual payments over a specified period
that may not be longer than the joint life and last survivor expectancy of
the Grantor and his or her designated beneficiary.
4. If the Grantor dies before his or her entire interest is distributed to
him or her, the entire remaining interest will be distributed as follows:
(a) If the Grantor dies on or after distribution of his or her interest has
begun, distribution must continue to be made in accordance with paragraph
3.
(b) If the Grantor dies before distribution of his or her interest has
begun, the entire remaining interest will, at the election of the Grantor
or, if the Grantor has not so elected, at the election of the beneficiary
or beneficiaries, either
(i) Be distributed by the December 31 of the year containing the fifth
anniversary of the Grantor's death, or
(ii) Be distributed in equal or substantially equal payments over the
life or life expectancy of the designated beneficiary or beneficiaries
starting by December 31 of the year following the year of the
Grantor's death. If, however, the beneficiary is the Grantor's
surviving spouse, then this distribution is not required to begin
before December 31 of the year in which the Grantor would have turned
age 70-1/2.
(c) Except where distribution in the form of an annuity meeting the
requirements of section 408(b)(3) and its related regulations has
irrevocably commenced, distributions are treated as having begun on the
Grantor's required beginning date, even though payments may actually have
been made before that date.
(d) If the Grantor dies before his or her entire interest has been
distributed and if the beneficiary is other than the surviving spouse, no
additional cash contributions or rollover contributions may he accepted in
the Account.
5. In the case of distribution over life expectancy in equal or
substantially equal annual payments, to determine the minimum annual payment for
each year, divide the Grantor's entire interest in the Trust Account as of the
close of business on December 31 of the preceding year by the life expectancy of
the Grantor (or the joint life and last survivor expectancy of the Grantor and
the Grantor's designated beneficiary, or the life expectancy of the designated
beneficiary, whichever applies). In the case of distributions under paragraph 3,
determine the initial life expectancy (or joint life and last survivor
expectancy) using the attained ages of the Grantor and designated beneficiary as
of their birthdays in the year the Grantor reaches age 70-1/2. In the case of a
distribution in accordance with paragraph 4(b)(ii), determine life expectancy
using the attained age of the
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State Street Research
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designated beneficiary as of the beneficiary's birthday in the year
distributions are required to commence.
6. The owner of two or more individual retirement accounts may use the
"alternative method" described in Notice 88-38, 1988-1 C. B. 524, to satisfy the
minimum distribution requirements described above. This method permits an
individual to satisfy these requirements by taking from one individual
retirement account the amount required to satisfy the requirement for another.
ARTICLE V.
1. The Grantor agrees to provide the Trustee with information necessary for
the Trustee to prepare any reports required under section 408(i) and Regulations
sections 1.408-5 and 1.408-6.
2. The Trustee agrees to submit reports to the Internal Revenue Service and
the Grantor as prescribed by the Internal Revenue Service.
ARTICLE VI.
Notwithstanding any other articles which may be added or incorporated, the
provisions of Articles I through III and this sentence will be controlling. Any
additional articles that are not consistent with section 408(a) and related
regulations will be invalid.
ARTICLE VII.
This agreement will be amended from time to time to comply with the
provisions of the Code and related regulations. Other amendments may be made
with the consent of the persons whose signatures appear on the Application.
STATE STREET RESEARCH COMBINED IRA
TERMS & CONDITIONS FOR ROTH IRAs
The Terms and Conditions for Roth IRAs apply to Roth IRAs operating under
section 408A of the Internal Revenue Code only. Articles I through VII of these
Terms and Conditions for Roth IRAs are in the form promulgated by the Internal
Revenue Service in Form 5305-R for use in establishing a Roth Individual
Retirement Trust Account. Please see additional Terms and Conditions for All
IRAs for additional provisions applicable to your Roth IRA.
Article I
1. If this Roth IRA is not designated as a Roth Conversion IRA, then,
except in the case of a rollover contribution described in section 408A(e), the
trustee will accept only cash contributions and only up to a maximum amount of
$2,000 for any tax year of the grantor.
2. If this Roth IRA is designated as a Roth Conversion IRA, no
contributions other than IRA Conversion Contributions made during the same tax
year will be accepted.
Article IA
The $2,000 limit described in Article I is gradually reduced to $0 between
certain levels of adjusted gross income (AGI). For a single grantor, the $2,000
annual contribution is phased out between AGI of $95,000 and $110,000; for a
married grantor who files jointly, between AGI of $150,000 and $160,000; and for
a married grantor who files separately, between $0 and $15,000. In case of a
conversion, the trustee will not accept IRA Conversion Contributions in a tax
year if the grantor's AGI for that tax year exceeds $100,000 or if the grantor
is married and files a separate return. Adjusted gross income is defined in
section 408A(c)(3) and does not include IRA Conversion Contributions.
Article II
The grantor's interest in the balance in the trust account is
nonforfeitable.
Article III
1. No part of the trust funds may be invested in life insurance contracts,
nor may the assets of the trust account be commingled with other property except
in a common trust fund (within the meaning of section 408(a)(5)).
2. No part of the trust funds may be invested in collectibles (within the
meaning of section 408(m)) except as otherwise permitted by section 408(m)(3),
which provides an exception for certain gold, silver, and platinum coins, coins
issued under the laws of any state, and certain bullion.
Article IV
1. If the grantor dies before his or her entire interest is distributed to
him or her and the grantor's surviving spouse is not the sole beneficiary, the
entire remaining interest will, at the election of the grantor or, if the
grantor has not so elected, at the election of the beneficiary or beneficiaries,
either:
(a) Be distributed by December 31 of the year containing the fifth
anniversary of the grantor's death, or
(b) Be distributed over the life expectancy of the designated beneficiary
starting no later than December 31 of the year following the year of the
grantor's death.
If distributions do not begin by the date described in (b), distribution
method (a) will apply.
2. In the case of distribution method 1(b) above, to determine the minimum
annual payment for each year, divide the grantor's entire interest in the trust
as of the close of business on December 31 of the preceding year by the life
expectancy of the designated beneficiary using the attained age of the
designated beneficiary as of the beneficiary's birthday in the year
distributions are required to commence and subtract 1 for each subsequent year.
3. If the grantor's spouse is the sole beneficiary on the grantor's date of
death, such spouse will then be treated as the grantor.
Article V
1. The grantor agrees to provide the trustee with information necessary for
the trustee to prepare any reports required under sections 408(i) and
408A(d)(3)(E), and Regulations section 1.408-5 and 1.408-6, and under guidance
published by the Internal Revenue Service.
2. The trustee agrees to submit reports to the Internal Revenue Service and
the grantor as prescribed by the Internal Revenue Service.
Article VI
Notwithstanding any other articles which may be added or incorporated, the
provisions of Articles I through IV and this sentence will be controlling. Any
additional articles that are not consistent with section 408A, the related
regulations, and other published guidance will be invalid.
2
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Terms & Conditions continued
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Article VII
This agreement will be amended from time to time to comply with the
provisions of the Code, related regulations, and other published guidance. Other
amendments may be made with the consent of the persons whose signatures appear
below.
STATE STREET RESEARCH COMBINED IRA
ADDITIONAL TERMS AND CONDITIONS FOR ALL IRAs
ARTICLE VIII.
1. The amount of each contribution credited to the Grantor's individual
retirement Trust Account shall (except to the extent applied to pay fees or
other charges under section 7 below) be applied to purchase full and fractional
shares of beneficial interest of one or more classes in one or more mutual funds
(hereinafter collectively the "Funds" or individually a "Fund"), as designated
from time to time by State Street Research Investment Services, Inc. ("SSRIS")
as available for investment under this agreement (provided always that such
shares may legally be offered for sale in the state of the Grantor's residence),
in accordance with instructions of the Grantor given under Section 3 below. The
Trustee (or any party appointed to act as agent for the Trustee under section 16
of this Article VIII--the "Agent"; whenever an Agent is acting for the Trustee,
references to the Trustee will be deemed to include the Agent) may retain the
Grantor's initial deposit for a period of up to ten days after receipt thereof
without liability for any loss of interest, earnings or appreciation, and may
invest such initial deposit at the end of such period if the Grantor has not
revoked his account. The Grantor may revoke the Account by written notice to the
Trustee or its Agent received by the Trustee or its Agent within seven calendar
days after the Grantor establishes the account. Upon revocation, the amount of
the Grantor's initial deposit will be returned to him, without interest.
As used in this Article VIII, "Account" or "Trust Account" means the
individual retirement account established using The Terms and Conditions For
Traditional IRAs And The Additional Terms and Conditions for All IRAs for a
Traditional IRA* , or, for a Roth IRA** , The Terms and Conditions for Roth IRAs
and the Terms and Conditions for All IRAs, along with, in either case, the State
Street Research and Management Company Combined Individual Retirement Account
Application signed by the Grantor and specifying whether the Account is a
Traditional IRA or a Roth IRA. See Section 25 below.
2. All dividends and capital gain distributions received on the shares of a
particular class of any Fund held in the Grantor's Account shall be retained in
the Account and (unless received in additional shares of such class) shall be
reinvested in full and fractional shares of such class of such Fund.
3. For each contribution, the Grantor shall designate the portion that will
be invested in each Fund. A contribution may be invested entirely in one Fund,
or may be invested in two or more Funds. However, investment designations will
be subject to any minimum initial or additional investment rules applicable to a
Fund. In addition, the Grantor shall designate which class of shares of each
such Fund the Grantor's contribution shall be invested in. The Grantor shall
make such designation on the State Street Research Combined Individual
Retirement Account Application or other written notice acceptable to the
Trustee.***
4. Subject to the minimum initial or additional investment, minimum balance
and other exchange rules applicable to a Fund, the Grantor may at any time
direct the Trustee to exchange all or a specified portion of the shares of a
Fund in the Grantor's Account for shares and fractional shares of one or more
other Funds.
The Trustee and the Trustee will process such directions as soon as
practicable after receipt thereof.
If any investment designation or direction relating to investments under
these Terms and Conditions is, in the opinion of the Trustee (or SSRIS or the
Agent), ambiguous or incomplete, the Trustee may refrain from carrying out such
designation or other investment direction until the designation or other
investment direction has been clarified or completed to the Trustee's
satisfaction, and neither the Trustee, SSRIS, the Agent nor any Fund (nor any of
their affiliates) will have any liability for loss of interest, earnings or
investment gains or appreciation during such period.
5. The Grantor, by written notice to the Trustee, may designate one or more
beneficiaries to receive the balance (if any) remaining in the Grantor's account
after his death and the time and manner of payment of such balance (subject to
the applicable requirements of the preceding Articles of these Terms and
Conditions). A designation may be on a form provided by the Trustee or on a
written instrument acceptable to the Trustee executed by the Grantor and filed
with the Trustee. The Grantor may revoke or change such designation in like
manner, at any time and from time to time. No designation will be effective
until received by the Trustee. Any designation filed with the Trustee (whether
or not such designation fully disposes of the Grantor's account) will revoke all
other designations previously filed with the Trustee. If no such designation is
in effect upon the Grantor's death, or if such a designation is in effect but
does not fully dispose of the Grantor's account, the balance in the account
shall be paid in a single sum, as soon as is practicable, to the Grantor's
estate.
Subject to the applicable requirements of the preceding Articles of these
Terms and Conditions, the Grantor may designate a form of payment to the
beneficiary by filing an instrument so specifying with the Trustee. In the
absence of such written instructions from the Grantor, the Trustee will pay the
beneficiary in such form as the beneficiary selects.
Except as provided in the first sentence of the preceding paragraph,
following the Grantor's death, each beneficiary (or the representative of the
Grantor's estate) will exercise the powers and responsibilities of the Grantor
hereunder with respect to the portion of the Grantor's account passing to such
beneficiary (or estate).
6. The Trustee shall forward to the Grantor any notices, prospectuses,
reports to shareholders, financial statements, proxies and proxy soliciting
materials, relating to the Fund shares in the Grantor's account. The Trustee
shall vote any such shares
* under Code Section 408(a)
** under Code Section 408A
*** If the Grantor's instructions with respect to the investment of any
contribution are not received, or are received but are in the opinion of
the Trustee incomplete, ambiguous or otherwise not in good order, the
contribution may be returned to the Grantor, or may be held uninvested or
invested in a money market fund (if available), pending completion,
clarification or correction of such instructions by the Grantor, in all
cases without liability for a loss of interest, earnings or investment
gains or appreciation during such time.
3
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State Street Research
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held in the account in accordance with the timely written instructions of the
Grantor if received. If no timely written instructions are received from the
Grantor, the Trustee may vote such shares in such manner as it deems appropriate
(including "present" or in accordance with the recommendations of SSRIS).
7. The Trustee's fee for performing its duties hereunder shall be such
reasonable amounts as shall be agreed to from time to time by the Trustee and
SSRIS. Such fee, any taxes of any kind and any liabilities with respect to the
Account, and any and all expenses reasonably incurred by the Trustee shall, if
not paid by the Grantor, be paid from the Grantor's Account.
8. The Trustee shall make distributions from the Account at such times and
in such manner as the Grantor directs in writing, subject (except where
otherwise specifically provided in this Article VIII) to the applicable
requirements of the preceding Articles of these Terms and Conditions.
The recalculation of life expectancy of the Grantor and/or the Grantor's
spouse in connection with distributions from the Account before the Grantor's
death will be made only at the written election of the Grantor. The
recalculation of life expectancy of the surviving spouse in connection with
distributions from the Account after the Grantor's death will be made only at
the election of the surviving spouse. By establishing the Account, the Grantor
(for himself and his surviving spouse, if any) determines not to recalculate
life expectancies unless the Grantor (or surviving spouse) specifically elects
the recalculation of life expectancies approach in accordance with the following
sentence. Any such election may be made in such form as the Grantor (or the
surviving spouse) provides for (including instructions to such effect to the
Trustee or the calculation of minimum distribution amounts in accordance with a
method that provides for recalculation of life expectancy and instructions to
the Trustee to make distributions in accordance with such method).
9. It shall be the sole responsibility of the Grantor to determine the time
and amount of contributions to the Account and the time, amount and manner of
payment of withdrawals from the Account (and to instruct the Trustee or the
Agent accordingly), and the federal and state tax treatment of any contributions
to or withdrawals from the Account (including the determination of the portion
of any withdrawal that is taxable or not taxable and the applicability of any
penalties). SSRIS, the Agent, the Trustee and the Funds shall be fully protected
in following the direction of the Grantor with respect to the time, amount and
manner of payment of such withdrawals, or in not acting in the absence of such
direction. If the Grantor (or beneficiary) does not direct the Trustee to make
withdrawals from the Account by the time that such withdrawals are required to
commence in accordance with the preceding Articles of these Terms and
Conditions, the Trustee (and SSRIS and the Agent) will assume that the Grantor
(or beneficiary) is meeting any applicable minimum distribution requirements
from another individual retirement arrangement maintained by the Grantor (or
beneficiary) and will be fully protected in so doing. SSRIS, the Agent, the
Trustee and the Funds shall not be liable for any taxes, penalties, liabilities
or other costs to the Grantor or any other person resulting from contributions
to or withdrawals from the Grantor's Account.
10. SSRIS, the Agent, the Trustee and the Funds shall not be responsible
for any loss or diminution in the value of the Grantor's account arising out of
the Grantor's establishment of a State Street Research Regular Individual
Retirement Account or Roth Individual Retirement Account or arising out of any
investment instruction, direction or order of the Grantor, whether relating to
the portion of contributions contributed to either the Regular Individual
Retirement Account or the Roth Individual Retirement Account, or invested in one
or more of the Funds, the selection of a particular class of shares of a
particular Fund, or the exchange of shares of one Fund for shares of one or more
other Funds. SSRIS, the Agent, the Trustee and the Funds shall not render any
advice concerning the type (Regular or Roth) of Individual Retirement Account
that should be used, nor shall either of them offer any investment advise to the
Grantor (or beneficiary) and will have no duty of inquiry concerning the
Grantor's (or beneficiary's) investment directions (subject to the right of the
Trustee, SSRIS or the Agent to obtain clarification or completion of any
investment directions under section 3 or section 4 above). The Grantor (or
beneficiary) will have exclusive investment control over the Account.
11. (a) Whenever the Grantor (or beneficiary) is responsible for any
direction, notice, representation or instruction under these Terms and
Conditions, SSRIS, the Agent, the Trustee and the Funds shall be entitled to
assume the propriety and truth of any statement made by the Grantor (or
beneficiary), and shall be under no duty of further inquiry with respect
thereto, and shall have no liability with respect to any action taken in
reliance upon such statement. However, the Trustee (or Agent or SSRIS) shall be
entitled to receive such information or documentation (including signature
guarantees, waivers or indemnifications) as it may reasonably request before
carrying out any direction, notice or instruction from the Grantor (or
beneficiary).
(b) Grantor agrees to provide information to the Trustee at such times and
in such manner as may be necessary to enable the Trustee to administer the
Account hereunder, or to prepare any reports required by or under Section 408(i)
or Section 408A(d)(3)(E) of the Code and the regulations thereunder or
otherwise.
(c) The Trustee (or Agent or SSRIS) shall submit such reports to the
Internal Revenue Service and the Grantor in such manner and at such time and
containing such information as may be required by the Internal Revenue Service.
(d) The Grantor, Trustee (or Agent or SSRIS) shall furnish to each other
such information relevant to the Account as may be required under the Code and
any regulations issued or forms adopted by the Treasury Department thereunder or
as may otherwise be necessary for the administration of the Account.
(e) The Grantor shall file any reports to the Internal Revenue Service
which are required of him by law (including Form 5329), and neither the Trustee
nor the Agent or SSRIS shall have any duty to advise Grantor concerning, or
monitor Grantor's compliance with, such requirement.
(f) Except to the extent provided by applicable law, the Account will not
be subject to assignment, transfer, pledge or hypothecation, nor shall it be
liable for the debts of the Grantor (or beneficiary) or subject to seizure,
attachment, execution or other legal process. However, the Trustee (or Agent or
SSRIS) may carry out the requirements of any apparently valid order of a
governmental authority (including a court) relating to the Grantor's Account and
will have no liability for so doing.
4
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Terms & Conditions continued
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12. These Terms and Conditions shall terminate and have no further force
and effect (except as to Section 23, which shall survive the termination of the
Account and this document) upon the complete payment of the Account to the
Grantor or his beneficiaries or to a successor individual retirement account,
annuity or bond, to a qualified plan, or to an annuity or custodial account
under Section 403(b) of the Internal Revenue Code. The Trustee shall have the
right to terminate this Account upon 30 days notice to the Grantor, or to his
beneficiaries if he is then dead. In such event, upon expiration of such 30 day
period, the Trustee shall transfer the amount in the Account into such successor
individual retirement accounts, annuities or bonds, qualified plan, or annuity
or custodial account as the Grantor (or his beneficiaries) shall designate, or,
in the absence of such designation, to the Grantor, or if he is then dead, to
the beneficiaries or the Grantor's estate as their interests shall appear.
13. The Trustee may resign at any time upon 30 days notice in writing to
SSRIS and may be removed by SSRIS at any time upon 30 days notice in writing to
the Trustee. Upon such resignation or removal, SSRIS shall appoint a successor
trustee which satisfies the requirements of Section 408 or Section 408A, as the
case may be, of the Internal Revenue Code. In connection with the Trustee's
resignation or removal, SSRIS shall notify the Grantor (or Beneficiary) of the
identity of the successor custodian or trustee appointed, and the Grantor (or
Beneficiary) is specifically deemed to have consented to such appointment if the
Grantor (or Beneficiary) has not, by the end of 30 days following such
notification from SSRIS, transferred the Account to a different trustee or
custodian selected by the Grantor (or Beneficiary).
14. Upon receipt by the Trustee of written notice of appointment of a
successor trustee or custodian and of written acceptance of such appointment by
the successor, the Trustee shall transfer to such successor the assets of the
Account and copies of all records pertaining thereto. The Trustee may reserve
such sum of money as it deems advisable for payment of its fees, taxes, costs,
expenses or liabilities with respect to the account, with the balance (if any)
of such reserve remaining after the payment of such items to be paid over to the
successor. The successor shall hold the assets paid over to it under terms that
satisfy the requirements of Section 408 or section 408A, as the case may be, of
the Internal Revenue Code.
15. If, within 30 days after the Trustee's resignation or removal, SSRIS
has not appointed a successor trustee which has accepted such appointment, the
Trustee shall appoint such a successor unless it elects to terminate the
Agreement under Section 12 of this Article VIII.
16. The Trustee may employ or designate one or more parties to serve as
agents or contractors to perform any or all of its duties hereunder.
17. Any notice sent to the Grantor or to his beneficiaries or estate, if he
is then dead, shall be effective if sent by first class mail to him or them at
his or their last addresses of record as provided to the Trustee.
18. Any distributions from the Account may be mailed, first-class postage
prepaid to the last known address of the person who is to receive such
distribution, as shown on the Trustee's records, and such distribution shall, to
the extent of the amount thereof, completely discharge the Trustee's liability
for such payment.
19. Any purchase or redemption of shares of any class of a Fund for or from
the Grantor's Account will be effected at the public offering price or net asset
value of such Fund (as described in the then effective prospectus for such Fund)
next established after the Fund's transfer agent receives the contribution or
other directions.
Any purchase, exchange, transfer or redemption of shares of any class of a
Fund for or from the Grantor's Account will be subject to any sales charge,
distribution fee or redemption charge, or other fee or charge applicable to
shares of such class, as described in the then effective prospectus for such
Fund. In addition, shares of any class of a Fund will be subject to any service
fee, charge or other annual maintenance or servicing fees or charges applicable
to shares of such class as described in the then effective prospectus for such
Fund.
20. SSRIS may amend these Terms and Conditions from time to time, and shall
give written notice of any material amendment to the Grantor within a reasonable
time after the amendment is adopted or becomes effective, whichever is later.
The Grantor hereby expressly delegates authority to SSRIS to amend these Terms
and Conditions and consents to any such amendments.
21. These Terms and Conditions shall be construed, administered and
enforced according to the laws of Massachusetts. The Grantor agrees that any
legal proceedings relating to the Grantor's account must be brought in a court
(including a federal district court) located in Massachusetts.
22. The term "Trustee" refers to the person serving as the Trustee of the
Traditional IRA or Roth IRA established hereby, and the term "Grantor" refers to
the person for whose benefit such Account was established.
The term "Beneficiary" means the person or persons designated as such by
the "designating person" (as defined below) on a form for use in connection with
the Trust Account acceptable to the Trustee or another writing, signed by the
designating person, and filed with the Trustee. The form may name individuals,
trusts, estates, or other entities as either primary or contingent
beneficiaries. However, if the designation does not effectively dispose of the
entire Trust Account as of the time distribution is to commence, the term
"Beneficiary" shall then mean the designating person's estate with respect to
the assets of the Trust Account not disposed of by the designation form. The
form last accepted by the Trustee before such distribution is to commence,
provided it was received by the Trustee (or deposited in the U.S. Mail or with a
reputable delivery service) during the designating person's lifetime, shall be
controlling and, whether or not fully dispositive of the Trust Account,
thereupon shall revoke all such forms previously filed by that person. The term
"designating person" means Grantor during his/her lifetime; after Grantor's
death, it also means Grantor's spouse if the spouse begins to receive a portion
of the Trust Account (pursuant to such a designation by Grantor) under a form of
distribution permitted by Article IV. A designation by Grantor's spouse shall
relate solely to the balance remaining in the spouse's portion of the Trust
Account after the death of the spouse.
When and after distributions from the Trust Account to Grantor's
Beneficiary commence, all rights and obligations assigned to Grantor hereunder
shall inure to, and be enjoyed and exercised by, Beneficiary instead of Grantor.
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23. Grantor shall always fully indemnify Trustee (and/or Agent or SSRIS)
and the Fund(s) and save them harmless from any and all liability whatsoever
which may arise either (i) in connection with this Agreement and the matters
which it contemplates, except that which arises directly out of Trustee's
(and/or Agent's or SSRIS's) negligence or willful misconduct, or (ii) with
respect to making or failing to process any withdrawal, other than for failure
to process a withdrawal in accordance with an order therefor which is in full
compliance with the provisions of this Agreement. The Trustee (its Agent or
SSRIS) shall not be obligated or expected to commence or defend any legal action
or proceeding in connection with this Agreement or such matters unless agreed
upon by that party and Grantor, and unless fully indemnified for so doing to
that party's satisfaction.
24. References herein to the "Internal Revenue Code" or "Code" and sections
thereof shall mean the same as amended from time to time, including successors
to such sections.
25. If in the Application, Grantor designates that the Trust Account is a
Traditional IRA, this Agreement is intended to qualify under Code Section 408(a)
as an individual retirement account and to entitle Grantor to the retirement
savings deduction under Code Section 219 if available. If in the Adoption
Agreement, Grantor designates that the Trust Account is a Roth IRA, this
Agreement is intended to qualify under Code Section 408A as a Roth individual
retirement account and to entitle Grantor to the tax-free withdrawal of amounts
from the Trust Account to the extent permitted in such Code Section. If any
provision hereof is subject to more than one interpretation or any term used
herein is subject to more than one construction, such ambiguity shall be
resolved in favor of that interpretation or construction which is consistent
with the intent expressed in whichever of the two preceding sentences is
applicable.
However, the Trustee shall not be responsible for whether or not such
intentions are achieved through use of this Agreement, and Grantor/Grantee is
referred to Grantor's/Grantee's attorney for any such assurances.
26. Grantor should seek advice from his/her attorney regarding the legal
consequences (including but not limited to federal and state tax matters) of
entering into this Agreement, contributing to the Trust Account, and directing
Trustee to process withdrawals from the Account. Grantor acknowledges that
Trustee and Service Company (and any company affiliated therewith) are
prohibited by law from rendering such advice.
27. The legal documents governing the Trust Account are as follows:
(a) If in the Application, Grantor designated the Trust Account as a
Traditional IRA under Code Section 408(a), the provisions of the Terms and
Conditions for Traditional IRAs and the Terms and Conditions for All IRAs of
this Agreement and the provisions of the Application are the legal terms
governing the Grantor's Trust Account;
(b) If in the Application Grantor designated the Trust Account as a Roth
IRA under Code Section 408A, the provisions of the Terms and Conditions for Roth
IRAs and the Terms and Conditions for All IRAs of this Agreement and the
provisions of the Application are the legal terms governing the Grantor's Trust
Account.
28. Articles I through VII of the Terms and Conditions for Traditional IRAs
are in the form promulgated by the Internal Revenue Service as Form 5305.
Articles I through VII of the Terms and Conditions for Roth IRAs are in the form
promulgated by the Internal Revenue Service as Form 5305-R. It is anticipated
that, if and when the Internal Revenue Service promulgates changes to Form 5305
or 5305-R, as the case may be, SSRIS will adopt such changes as an amendment to
the Terms and Conditions for Traditional IRAs or the Terms and Conditions for
Roth IRAs, as applicable.
If, due to changes in the applicable tax laws, or rulings of the Internal
Revenue Service, it is established that the use of the Adoption Agreement or
this Agreement do not establish a Traditional IRA or Roth IRA (as the case may
be), the Trustee will furnish the Grantor with replacement documents and Grantor
will, if necessary, sign such replacement documents. Grantor acknowledges and
agrees to such procedures and to cooperate with the Trustee to preserve the
intended tax treatment of the Account.
Pending the adoption of any amendment necessary or desirable to conform
these Terms and Conditions to the requirements of any amendment to the Internal
Revenue Code or regulations or rulings thereunder, the Trustee (and SSRIS and
the Agent) may operate the Grantor's Account in accordance with such
requirements to the extent deemed necessary to preserve the tax benefits of the
Account.
If the Account is a Traditional IRA under Code Section 408(a), the Grantor
may convert the Account into a Roth IRA under Code Section 408A governed by the
Terms and Conditions for Roth IRAs and the Terms and Conditions for all IRAs, by
completing a new Application designating that the Account is converted into a
Roth IRA. To the extent permitted under procedures of the Trustee, such
conversion may be effected through use of a reply card or by telephonic,
computer link or other electronic means (which procedures are intended to meet
any applicable requirements under Code Section 408A), and Grantor will be deemed
to have executed a new Application designating the Account as a Roth IRA. The
Grantor will be required to establish a separate conversion Roth IRA Account
distinct from any annual contributions account, and no contributions other than
Roth IRA conversion contributions made during the same tax year will be accepted
in each such conversion account.
29. The Grantor acknowledges that he or she has received and read the
current prospectus for each Fund in which his or her Account is invested and the
State Street Research Combined Individual Retirement Account Disclosure
Statement.
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Traditional IRA or Roth IRA Disclosure Statement
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The following information should be reviewed in conjunction with the State
Street Research Combined IRA Terms and Conditions (the "Terms and Conditions"),
Combined IRA Application (the "Application") and the current prospectus for each
Fund in which your account is invested. This Disclosure Statement is divided
into three parts: the Disclosure Statement for Your Traditional IRA, the
Disclosure Statement for Your Roth IRA, and the Disclosure Statement for All
IRAs. Here's a brief summary of each type of IRA and of the information found in
each of these sections:
Disclosure Statement for Your Traditional IRA.
Traditional IRAs have been around since 1975--everyone's familiar with
them. With a Traditional IRA, you typically make tax deductible contributions to
the IRA, or you contribute with a rollover from another IRA or an employer's
qualified retirement plan. The earnings and interest in your account build tax
free. Any amounts not taxed when contributed are taxed, along with any earnings,
when they are withdrawn from the Traditional IRA. The Disclosure Statement for
Your Traditional IRA section provides you with the basic rules and features of
your State Street Research Traditional IRA. (Note: For our purposes in this
booklet all IRAs, except for Roth IRAs (see below) are considered to be
Traditional IRAs.)
Disclosure Statement for Your Roth IRA.
Roth IRAs were recently created by Congress and are available after January
1, 1998. These IRAs are almost the opposite to Traditional IRAs: With a Roth
IRA, your contributions are not tax deductible, but withdrawals meeting certain
requirements are tax-free. Just like a Traditional IRA, earnings and interest
build tax-free. The Disclosure Statement for Your Roth IRA provides you with the
basic rules and features of your Roth IRA.
Disclosure Statement for All IRAs.
The final section, entitled Disclosure Statement for All IRAs, provides you
with tax and other general information applicable to any State Street Research
IRA, whether it is a Traditional IRA or a Roth IRA. So, regardless of which IRA
you choose to use--and you can choose to use both, if you want--you should be
sure to read the information found in the Disclosure Statement for All IRAs.
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Note: The provisions of the Terms and Conditions, the Application and
prospectus govern in any instance where the Disclosure Statement is incomplete
or appears to conflict. This Disclosure Statement reflects the provisions of the
Internal Revenue Code in effect when the Disclosure Statement was prepared. This
Disclosure Statement provides a nontechnical summary of the law. Please consult
with your tax advisor for more complete information (including any changes to
the tax law rules) and refer to IRS Publication 590.
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Disclosure Statement for Traditional IRAs
GENERAL REQUIREMENTS OF A TRADITIONAL IRA
A Traditional IRA is a trust or custodial account established for the
exclusive benefit of you and your beneficiaries in which earnings accumulate tax
free. In addition, you may be able to deduct all or some of the amount you
contribute to your Traditional IRA on your federal income tax return. (Note:
State tax treatment of contributions to a Traditional IRA may vary. Consult a
qualified advisor.) In addition to the requirements found in the Disclosure
Statement for All IRAs, current law requires that your Traditional IRA agreement
be in writing and meet the following requirements:
1. Your contributions must be in cash, and, for any taxable year, cannot
exceed the lesser of 100% of your compensation or $2,000, unless the
contribution is a rollover or an employer contribution to a simplified employee
pension plan ("SEP") or a contribution made to a SIMPLE IRA subject to the
limitations under Section 408(p) of the Internal Revenue Code. (See Regular
Contributions below for more limitations applicable to contribution amounts.)
2. You are required to take minimum distributions from your Traditional IRA
at certain times in accordance with Proposed Regulations Section 1.408-8, as
follows:
A. During Your Life
You are required to begin making withdrawals from your Traditional IRA for
the year in which you reach age 70-1/2 and each year thereafter. Generally, you
must withdraw an amount at least equal to the minimum distribution by December
31 of each year. However, you may delay your first required withdrawal until the
April 1 following the year in which you reach age 70-1/2 (the "required
beginning date"). (This means that, if you wait to make your withdrawal for the
year in which you attain age 70-1/2 until April 1 of the following year, your
total withdrawal in that following year must equal the minimum withdrawal for
two years--one representing the minimum withdrawal for the previous year in
which you reached age 70-1/2 and a second withdrawal by December 31 representing
the minimum withdrawal for that year.)
The minimum withdrawal for any taxable year is equal to the amount obtained
by dividing the account balance at the end of the prior year (less any required
withdrawals taken between January 1 and April 1 of the year following the year
you attain age 70-1/2) by the joint life expectancy of you and your designated
beneficiary. If you have not designated a beneficiary for your Traditional IRA
by your required beginning date, your single life expectancy will be used. Your
single or joint life expectancy is determined by using the IRS unisex life
expectancy tables. You can find these tables in Treasury Regulations Section
1.72-9. See Article IV in your Terms and Conditions for Traditional IRAs for a
more detailed explanation of how to calculate the minimum distribution.
If you name someone other than your spouse as your beneficiary, and your
beneficiary is more than ten years younger than you, your required minimum
withdrawal must satisfy the minimum distribution incidental benefit rule (MDIB).
The MDIB rule generally requires that your required minimum withdrawals be
calculated under the normal rules, but as if your beneficiary were exactly ten
years younger than you.
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The minimum withdrawal required must be calculated separately for each
Traditional IRA you own, but the amounts so determined may be totaled and taken
from any one of your Traditional IRAs.
B. After Your Death
If you die on or after your required beginning date, withdrawals must be
made by your beneficiary or beneficiaries at least as rapidly as under the
method being used to determine minimum withdrawals as of the date of your death.
If your beneficiary is your surviving spouse, your spouse can elect to treat
your Traditional IRA as his or her own Traditional IRA.
If you die before your required beginning date, the entire amount remaining
in your account must, in general, be withdrawn by December 31 of the year
containing the fifth anniversary of your death. If your designated beneficiary
is a natural person, he or she may instead choose to receive the remaining
balance in your account over his or her lifetime or over a period not exceeding
his or her life expectancy. Such payments must begin no later than the end of
the year following the year of your death. If your designated beneficiary is
your spouse, withdrawals need not commence until December 31 of the year you
would have attained age 70-1/2, if later than the December 31st of the year
following the year of your death. See Article IV in the Terms and Conditions for
Traditional IRAs, for a more detailed explanation of how to calculate the
minimum withdrawals.
ELIGIBILITY
You may make annual contributions to a Traditional IRA if you receive
compensation from employment, earnings from self-employment, or alimony, and you
have not reached age 70-1/2 by the end of the tax year for which the
contribution is being made. In addition, if you are married and file a joint tax
return, you may make contributions to a Traditional IRA for your spouse, whether
or not your spouse receives compensation (your spouse must open his or her own
Traditional IRA, even though you make contributions to it from your compensation
or earned income). You may make a rollover contribution to a Traditional IRA if
you have received an eligible rollover distribution from a qualified retirement
plan or a tax sheltered annuity or an eligible distribution from another
Traditional IRA and elect rollover treatment within 60 days. You may also make a
trustee-to-trustee transfer from another Traditional IRA. Finally, your employer
may contribute to your Traditional IRA, and if your employer sponsors a
simplified employee pension (SEP), your employer can make contributions to your
SEP/IRA on your behalf.
ANNUAL CONTRIBUTIONS
You may contribute each year up to $2,000 or 100% of compensation or earned
income, whichever is less, to your Traditional IRA. Such contributions are
called "Annual Contributions." If your spouse also establishes a spousal
Traditional IRA for himself or herself, you may contribute up to $4,000 or 100%
of joint compensation or earned income, whichever is less, which may be divided
between the two Traditional IRAs as you choose, as long as no more than $2,000
is contributed to either Traditional IRA. If the combined annual income for you
and your spouse is less than $4,000, the spouse with the greater annual income
may contribute up to his/her compensation amount, or $2,000 whichever, is less.
The lower compensated spouse may contribute up to his/her compensation amount,
plus the difference between the first spouse's compensation and contribution, if
any. If your employer makes contributions to your Traditional IRA, the
contribution is treated as compensation paid to you, whether or not the
contribution is deductible, unless the contribution is made under a SEP.
You may make annual contributions to your Traditional IRA and/or your
spouse's Traditional IRA (or establish a new Traditional IRA) anytime during a
year, up to and including the due date of the filing of your tax return for that
year (excluding extensions). No contributions may be made to a Traditional IRA
for the calendar year in which you attain age 70-1/2 or later years. No regular
contributions may be made to your spouse's Traditional IRA for the calendar year
your spouse attains age 70-1/2 or later years.
If you (or your spouse) establish a new Roth IRA and make contributions to
both your Traditional IRA and a Roth IRA, the combined limit on contributions to
both Regular and Roth IRAs for a single calendar year for any individual (either
you or your spouse) may not exceed $2,000.
Annual IRA contributions are fully deductible unless you are an active
participant in an employer-sponsored retirement plan. If you are an active
participant in an employer-sponsored retirement plan, the amount deductible
(whether fully, partially or not at all) will depend on your adjusted gross
income ("AGI") for the tax year for which the contribution was made (see below).
Similarly, annual contributions to a Traditional IRA for your spouse are fully
deductible unless he or she is an active participant in an employer-sponsored
retirement plan. If your spouse is an active participant, the contribution to
the spouse's Traditional IRA will be either fully, partially, or not deductible,
depending on your combined AGI. Your AGI is determined on your tax return
(disregarding any deductible contributions to a Traditional IRA). Generally, an
individual is considered to be an active participant if he or she is covered by
one or more of the following plans:
o a qualified pension, profit sharing, 401(k) (including a SIMPLE 401(k))
or stock bonus plan maintained by an employer;
o a qualified annuity plan of an employer;
o a simplified employee pension plan (SEP);
o a retirement plan established by the Federal government, a State, or a
political subdivision (except certain plans under IRC Section 457);
o a tax-sheltered annuity for employees of certain tax-exempt organizations
or public schools;
o a qualified plan for self-employed individuals (sometimes called an H.R.
10 or Keogh Plan); and.
o a SIMPLE IRA under section 408(p).
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Note: If you and your spouse are high income married taxpayers, and either of
you is an active participant in an employer's retirement plan and the other
spouse is not, any contribution to the non-active participant spouse's
Traditional IRA will be only partially deductible if your AGI (on a joint tax
return) is between $150,000 and $160,000. (Deductibility disappears for AGI over
$160,000.)
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As you can see in the table below, if you (or your spouse) are an active
participant in an employer-sponsored plan during the year, the annual
contribution to your Traditional IRA (or your spouse's Traditional IRA) may be
fully, partially or not deductible depending on both your filing status and your
AGI:
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Traditional IRA or Roth IRA Disclosure Statement continued
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<TABLE>
<CAPTION>
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ACTIVE PARTICIPANTS Deductibility Chart for 1998
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Single Married, Filing Jointly Deductibility of Annual
IRA Contribution
---------------------------------------------------------------------------
<S> <C> <C> <C>
$30,000 or less $50,000 or less Fully Deductible
Adjusted ---------------------------------------------------------------------------
Gross Income $30,000 - $40,000 $50,000 - $60,000 Partially Deductible
(AGI) Level ---------------------------------------------------------------------------
more than $40,000 more than $60,000 Not Deductible
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</TABLE>
Starting in 1999, the AGI levels will be adjusted annually so that
deductibility will be determined as follows:
<TABLE>
<CAPTION>
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Fully Deductible Partially Not Deductible
(any AGI amount Deductible (AGI amounts over)
up to) (AGI amounts
between)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Single $31,000 $31,000 - $41,000 $41,000
1999 Married* $51,000 $51,000 - $61,000 $61,000
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Single $32,000 $32,000 - $42,000 $42,000
2000 Married $52,000 $52,000 - $62,000 $62,000
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Single $33,000 $33,000 - $43,000 $43,000
2001 Married $53,000 $53,000 - $63,000 $63,000
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Single $34,000 $34,000 - $44,000 $44,000
2002 Married $54,000 $54,000 - $64,000 $64,000
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Single $40,000 $40,000 - $50,000 $50,000
2003 Married $60,000 $60,000 - $70,000 $70,000
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Single $45,000 $45,000 - $55,000 $55,000
2004 Married $65,000 $65,000 - $75,000 $75,000
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Single $50,000 $50,000 - $60,000 $60,000
2005 Married $70,000 $70,000 - $80,000 $80,000
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Single $50,000 $50,000 - $60,000 $60,000
2006 Married $75,000 $75,000 - $85,000 $85,000
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2007 Single $50,000 $50,000 - $60,000 $60,000
and later Married $80,000 $80,000 - $100,000 $100,000
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</TABLE>
* Note: AGI shown is for Married Filing Jointly. If you are married filing
separately, your contribution deductibility is phased out for AGI from
$0-$10,000, and disappears with AGI above $10,000.
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If your AGI falls in the Partially Deductible range, you will have to
calculate the portion of your annual contribution that is deductible. To do so,
you must first multiply your annual contribution limit ($2,000) by a fraction,
the numerator of which is the amount by which your AGI exceeds the lower limit
of the Partially Deductible range. (For example, in 1998 the lower limit would
be $30,000 for a single tax payer, or $50,000 for a married taxpayer filing
jointly. For the year 2000, the lower limit for a single taxpayer will be
$32,000, and the lower limit for married filing jointly is $52,000.) The
denominator of the fraction is $10,000. (Note: starting in 2007 the denominator
for married joint filers is $20,000.) Subtract this amount from your annual
contribution limit ($2,000) and then round up to the nearest $10. Your
deductible amount is the greater of the amount calculated or $200. The amount of
your annual contribution, up to the deductible limit, will be deductible on your
tax return; any contribution above the deductible limit (up to the annual
contribution limit) is permitted but would not be deductible.
To the extent that the deductibility of Traditional IRA contributions is
reduced or eliminated, then nondeductible contributions may be made to your
Traditional IRA. Earnings on all Traditional IRA contributions, whether or not
the contributions are deductible, are tax-deferred until they are received. You
must designate the amount of your nondeductible Traditional IRA contributions
when filing your tax return for the year. If you overstate the amount of your
nondeductible contribution, you must pay a $100 penalty, unless reasonable cause
for the overstatement can be shown. If you fail to report nondeductible IRA
contributions you will be subject to a $50 penalty, unless your failure is due
to reasonable cause.
ROLLOVER CONTRIBUTIONS
Your Traditional IRA may be rolled over to another Traditional IRA of
yours, or may receive rollover contributions, provided all the applicable
rollover rules are followed. An effective rollover allows you to postpone paying
taxes on the amount distributed from an employer plan, tax-sheltered annuity or
other Traditional IRA until it is withdrawn from the recipient IRA. (Note: You
may also convert a Traditional IRA to a Roth IRA, or roll over from a
Traditional IRA to a Roth IRA. Amounts converted or rolled over to a Roth IRA
may be taxed as income. See the Disclosure Statement for Roth IRAs.) If the
rollover is completed properly, you do not report the distribution as income nor
do you take a deduction for the rollover contribution. The rollover rules are
generally summarized below. If you have any questions regarding these rules,
please contact your tax advisor.
1. Rollovers from other Traditional IRA
You may make a rollover contribution of amounts held in another Traditional
IRA. There are no limits on the amount of the rollover contribution made from
one Traditional IRA to another Traditional IRA. A proper Traditional IRA to
Traditional IRA rollover is completed if all or part of the distribution is
rolled over within 60 days after the distribution is received. No more than one
withdrawal from a Traditional IRA may be rolled over into another IRA in any
12-month period.
2. Rollover from a Qualified Plan (or Tax-Sheltered Annuity) to a Traditional
IRA
You may roll over, directly or indirectly, any eligible rollover
distribution. An eligible rollover distribution is defined as any distribution
from a qualified plan (other than a distribution to a nonspouse beneficiary)
unless it is a part of certain series of substantially equal periodic payments
to be received over your life or over a period of ten or more years, after-tax
dollars or a required minimum distribution. To qualify as a rollover, your
eligible rollover distribution must be rolled over to your Rollover IRA within
60 days of receipt.
Traditional Rollover
You may elect to receive your rollover distribution prior to placing it in
a Traditional IRA, thereby completing a traditional rollover. Your plan
administrator will generally be required to withhold 20% of your distribution as
prepayment of income taxes. When completing the traditional rollover, you may
make up the amount withheld, out of pocket, and roll over the full amount
treated as distributed from the qualified plan (including the tax withholding
amount). Alternatively, you may report the withheld amount as income and pay the
applicable tax and, if you have not yet attained age 59-1/2, the 10% early
distribution penalty will apply (unless an exception to that penalty is
applicable).
Direct Rollover
Your employer generally must give you the option to directly rollover your
qualified plan distribution over to a Traditional IRA. If you elect the direct
rollover, your eligible rollover distribution will be paid directly to the
Traditional IRA that you designate. The 20% withholding requirements do not
apply to direct rollovers.
If you place your rollover contribution in a separate Traditional IRA
(sometimes called a "conduit IRA") which holds only those dollars, you preserve
the right to roll that money subsequently into another employer qualified plan.
3. Rollover/Conversion to a Roth IRA
Starting in 1998, you may convert an existing Traditional IRA into a Roth
IRA, or rollover from a Traditional IRA to a Roth IRA, if your AGI on your
income tax returns is $100,000 or less. (This limit applies to both married and
single taxpayers, and the limit is not indexed for cost of living increases.) A
married taxpayer is eligible to convert or rollover a Traditional IRA to a Roth
IRA only if a joint tax return is filed; married taxpayers who file separately
are not eligible to convert or rollover from a Traditional IRA to a Roth IRA.
(For more information on converting or rolling over into a Roth IRA, see the
Disclosure Statement for Roth IRAs below.)
SEP PLANS
Under a Simplified Employee Pension (SEP) Plan that meets the requirements
of Internal Revenue Code Section 408(k), your employer may make contributions to
your Traditional IRA. Your employer is required to provide you with information
describing the terms of their SEP Plan. An employer is not permitted to
establish a Salary Reduction SEP ("SARSEP") after December 31, 1996. However,
you may make contributions after December 31, 1996 to a SARSEP already in
existence on January 1, 1997 in accordance with your plan provisions whether or
not you are a new employee.
SAVINGS INCENTIVE MATCH PLANS FOR EMPLOYEES
("SIMPLE IRA")
If you are participating in a SIMPLE IRA plan, you may make contributions
under a qualified salary reduction arrangement on
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Traditional IRA or Roth IRA Disclosure Statement continued
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a pre-tax basis of up to $6,000 (indexed for inflation) subject to the
limitation under section 408(p) of the Code. Your employer must generally match
your contributions dollar-for-dollar up to 3% of your compensation. Under
certain circumstances, your employer can elect to make a non-matching
contribution equal to 2% of compensation for all eligible employees, or to make
a dollar-for-dollar matching contribution of at least 1% of your compensation.
To be eligible to establish a SIMPLE plan, your employer must have no more
than 100 employees and the SIMPLE plan must be the exclusive tax-qualified plan
of the employer (except that an eligible employer with union employees may have
one plan covering the union employees under the collective bargaining agreement
and still have a SIMPLE plan covering the non-union eligible employees).
State Street Research offers a separate package of materials (including a
special SIMPLE IRA Application) to establish a SIMPLE IRA. The materials in this
kit are not suitable for setting up an IRA that is part of a SIMPLE IRA plan.
Please call us for additional information about SIMPLE IRAs if you are
interested.
TAXATION OF WITHDRAWALS
The taxation of Traditional IRA withdrawals will depend on whether or not
you have made nondeductible contributions to your Traditional IRA. If you have
made only deductible contributions to your Traditional IRA, any withdrawal will
be included as taxable income in the year in which it is received.
If you have made nondeductible contributions, the following formula must be
used to determine the amount of any withdrawal from your Traditional IRA
excluded from income:
Nondeductible Contributions in IRA divided by Aggregate IRA Balance
multiplied by Amount Withdrawn equals Amount Excluded From Income.
Nondeductible Contributions include all nondeductible contributions made by
you to the Traditional IRA through the end of the year the distribution is being
made (which were not previously withdrawn and excluded from your income). IRA
balances includes the total balance of all of your Traditional IRAs as of the
end of the year the withdrawal is being made.
FEDERAL TAX PENALTIES
1. Early Withdrawal Penalty
If you make a withdrawal from your Traditional IRA prior to attaining age
59-1/2, an additional tax of 10% will be imposed on the taxable amount
withdrawn, unless the withdrawal was made on account of your death, disability,
a qualifying rollover, or a direct transfer to another Traditional IRA, the
timely withdrawal of an excess contribution, certain withdrawals to the extent
of deductible medical expenses, to pay for medical insurance premiums while you
are receiving unemployment compensation, to pay for certain higher education
expenses for you, your child or grandchild, or to pay for eligible first-time
homebuyer expenses (limited to a $10,000 lifetime maximum per individual). The
additional 10% tax may also not apply if the withdrawal is one of a series of
substantially equal periodic payments, at least annually, based on your life
expectancy or the joint life expectancy of you and your beneficiary. This
additional tax will only apply to the portion of the withdrawal included in your
income. The exceptions to the 10% premature withdrawal penalty tax have a number
of special rules and definitions; consult your tax advisor or the IRS for
further details.
In the case of a SIMPLE IRA, the additional tax on certain distributions
made prior to age 59-1/2 will be 25% of a withdrawal made during the first two
years of your participation.
2. Excess Contribution Penalty
A 6% excise tax will be imposed on any excess contributions made to your
Traditional IRA. This tax will apply each year in which the contribution remains
in your IRA. An excess contribution is any amount which exceeds your individual
contribution limit, excluding rollover and direct transfer amounts.
3. Penalty for Not Making Minimum Withdrawals
If you do not receive your required minimum withdrawal for the year you
attain age 70-1/2 and by the end of each subsequent year, you will be subject to
a 50% excise tax on the amount of the required minimum withdrawal which should
have been taken but was not. If the withdrawal you actually receive falls short
of the required minimum withdrawal, the 50% excise tax will be imposed on the
amount by which the withdrawal falls short.
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Note: Please see the Disclosure Statement for All IRAs below for additional
information applicable to your State Street Research Traditional IRA.
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GENERAL INFORMATION REGARDING ROTH IRAs
A Roth IRA is a trust or custodial account established for the exclusive
benefit of you and your beneficiaries in which your earnings accumulate tax free
and, if certain conditions are satisfied, from which withdrawals may be made tax
free. Unlike a Traditional IRA, however, you are not able to deduct the amount
you contribute to your Roth IRA on your federal income tax return. (Note: State
tax treatment of your Roth IRA accruals and withdrawals may differ from federal
treatment. You should consult your tax advisor for information regarding tax
laws applicable in your state.)
In addition to the requirements found in the Disclosure Statement for All
IRAs, current law requires that your Roth IRA agreement be in writing and be
designated as a Roth IRA. Under IRS rules, separate Roth IRA accounts must be
established for conversions, and only amounts converted in the same tax year
will be accepted in any one Roth IRA conversion account. All annual contribution
Roth IRA accounts must be maintained separately from any conversion accounts. In
addition, your contributions must be in cash, and, for any taxable year, cannot
exceed the lesser of 100% of your compensation or $2,000, unless the
contribution is a rollover or conversion from a Traditional IRA or another Roth
IRA. (See Annual Contributions below for more information about contributions to
your Roth IRA.)
Unlike a Traditional IRA, you are not required to begin to take minimum
withdrawals from your Roth IRA when you reach age 70-1/2, nor are you prohibited
from making contributions to your Roth IRA when you turn 70-1/2.
During your lifetime, you may make withdrawals at whatever times and in
whatever amounts you want. If you die before your entire account has been
withdrawn by you, the entire remaining account must be withdrawn, in accordance
with your (or if you have not done so, your beneficiary's) instructions either
by the December 31 of the year containing the fifth
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anniversary of your death, or in substantially equal payments over the life or
life expectancy of your designated beneficiary, starting no later than the end
of the year following the year of your death. If your designated beneficiary is
your spouse, distributions need not commence until December 31 of the year you
would have attained 70-1/2, if later than the December 31st of the year
following the year of your death.
See Article IV of the Terms and Conditions for Roth IRAs for a more
detailed explanation concerning distributions.
ELIGIBILITY
You are eligible to make annual contributions to a Roth IRA if you receive
compensation from employment, earnings from self-employment, or alimony. In
addition, if you are married and file a joint tax return, you may make
contributions to a Roth IRA for your spouse, whether or not your spouse receives
compensation.
Roth IRAs permit contributions by individuals who are age 70-1/2 or older.
Distributions from an employer-sponsored plan or any 403(b) arrangement may
not be rolled over into a Roth IRA. However, you may convert (or make rollover
contribution from) an existing Traditional IRA if you (and your spouse, if any)
have an adjusted gross income ("AGI") of $100,000 or less. (The conversion
option is open only to single taxpayers or married taxpayers who file a joint
tax return; married taxpayers who file separately are not eligible to convert.)
ANNUAL CONTRIBUTION LIMITS
Subject to the limitations on contributions discussed below, you may
contribute each year up to $2,000 or 100% of compensation or earned income,
whichever is less, to your Roth IRA. If you also contribute to a spousal Roth
IRA established by your spouse, you may contribute up to $4,000 or 100% of joint
compensation or earned income, whichever is less, which may be divided between
the two Roth IRAs as you choose, as long as no more than $2,000 is contributed
to either Roth IRA. If the combined annual compensation for you and your spouse
for a year is less than $4,000, the spouse with the greater annual income may
contribute up to his/her compensation amount, or $2,000 which ever is less. The
other spouse may contribute up to his/her compensation limit, plus the
difference between the other spouse's compensation and contribution, if any.
You may make annual contributions to your Roth IRA (or establish a new Roth
IRA) and/or spousal Roth IRA anytime during a year, up to and including the due
date of the filing of your tax return for that year (excluding extensions).
However, because Roth IRAs are not available until January 1, 1998, you may not
make a contribution to a Roth IRA on or before April 15, 1998 and treat it as a
contribution for 1997.
Contribution Limits
The amount you or your spouse may contribute to a Roth IRA depends on your
tax filing status and your (and your spouse's) AGI. AGI is determined on your
Form 1040. However, for purposes of determining Roth IRA contribution limits, do
not include in your AGI any amount converted or rolled over from a Traditional
IRA to a Roth IRA. Contribution limits to Roth IRAs are as follows based on AGI
level:
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*Note: Figures are for Married filing jointly only. If you are married
filing separately, your ability to contribute to a Roth IRA phases out for AGI
between $0 and $15,000, and is lost entirely with AGI above $15,000.
- --------------------------------------------------------------------------------
If your AGI falls in the Partial Contribution range, you will have to
calculate the amount you may contribute to a Roth IRA. To do so, multiply the
annual contribution limit ($2,000 or your compensation if less) by a fraction.
The numerator is the amount by which your AGI exceeds the lower limit of the
Partial Contribution range ($95,000 if single, or $150,000 if married filing
jointly) and the denominator is $15,000 (single taxpayers) or $10,000 (married
filing jointly). Subtract this from your normal limit and then round up to the
nearest $10. The contribution limit is the greater of the amount calculated or
$200.
<TABLE>
<CAPTION>
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ROTH IRA CONTRIBUTION LIMITS
- -------------------------------------------------------------------------------------
Full Contribution Partial Contribution No Contribution
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Single Up to $95,000 $95,000 - $110,000 Over $110,000
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Married filing Up to $150,000 $150,000 - $160,000 Over $160,000
jointly*
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</TABLE>
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Traditional IRA or Roth IRA Disclosure Statement continued
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CONVERSIONS OR ROLLOVER CONTRIBUTIONS
Starting in 1998, you may convert or rollover an existing Traditional IRA
into a Roth IRA if your AGI is $100,000 or less. This upper limit on AGI applies
to both single taxpayers and married taxpayers filing jointly. Married filing
separately may not convert or rollover a Traditional IRA to a Roth IRA. The
taxable amount of money you convert or rollover from a Traditional IRA to a Roth
IRA will be considered as taxable income in the year in which the rollover or
conversion occurs. If you convert or rollover during 1998, the taxable income is
spread out over the four year period beginning in 1998 and ending in 2001.
You may make a rollover contribution of amounts held in another Roth IRA.
There are no limits on the amount of the rollover contribution made from Roth
IRA to another Roth IRA. A rollover from one Roth IRA to another is properly
completed if all or part of the distribution is rolled over within 60 days after
the withdrawal from the first Roth IRA is received. No more than one withdrawal
from a Roth IRA may be rolled over into another Roth IRA in any 12-month period.
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*Note: Caution should be exercised when considering whether to convert an
existing Regular IRA into a Roth IRA early in the year if it appears that AGI
may exceed $100,000. Although a bill pending in congress would permit transfers
back to a Regular IRA if a taxpayer's AGI exceeds $100,000, under the current
law, if a conversion has already occurred during the year and the taxpayer ends
up with AGI in excess of $100,000, there may be adverse tax results. Consult
your tax advisor or the IRS for the latest developments.
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WITHDRAWALS FROM YOUR ROTH IRA
You may withdraw from your Roth IRA accounts at any time you wish. The
principal amount you contributed may be withdrawn tax-free. All withdrawals are
treated as a return of your own contributions until the amount withdrawn equals
the amount you previously contributed. After that, withdrawals are treated as
earnings or growth. Amounts representing earnings and growth will not be taxable
if they meet both of the following requirements: First, the withdrawal must be
made from a Roth IRA account that has been in existence for five or more years.
Second, you must either be 59-1/2, or the withdrawal must be made by your
beneficiary if you die, or by you if you are disabled (within the meaning of
section 72(m)(7) of the Code), or by you if you are using the funds for
qualified first-time homebuyer expenses (within the meaning of section
72(t)(2)(F) of the Code)(there is a $10,000 lifetime maximum on amounts
considered first-time homebuyer expenses for any individual).
For annual contributions, the five year period begins with the year when
you first establish your Roth IRA. For conversions or rollovers, the five year
period begins with the year in which the conversion or rollover was made from
the Traditional IRA to the Roth IRA. (Note: a bill pending in Congress might
effect this rule--consult your tax advisor or the IRS for the latest
developments.)
FEDERAL TAX PENALTIES
A. Early Withdrawal Penalty
Of course, you may withdraw the principal (non-deductible) amount you
previously contributed to your Roth IRA tax and penalty free at any time.
However, a withdrawal of amounts representing earnings or growth may not only be
taxable as income (if the requirements for a tax-free withdrawal are not met),
but also be subject to a 10% withdrawal penalty if you withdraw before attaining
age 59-1/2, unless an exception applies. There are exceptions for withdrawals on
account of your death or disability, to the extent of deductible medical
expenses for the year, to pay for medical insurance premiums while you are
receiving unemployment compensation, to pay for certain higher education
expenses for you, your child or grandchild, or to pay for eligible first-time
homebuyer expenses (limited to a $10,000 lifetime maximum). The additional 10%
tax may also not apply if the distribution is made in a series of substantially
equal periodic payments, at least annually, based on your life expectancy or the
joint life expectancy of you and your designated beneficiary. Again, this
penalty tax will only apply to the portion of the distribution included in your
income.
For purposes of determining the your taxable income or 10% penalty, all of
your Roth IRA accounts are considered to be one single account, and any
distribution is considered to come first from principal--to which no tax or
penalty applies--and then from the taxable amounts. For example, if you have
three different Roth IRA's, each of which has account balances equal to $10,000,
your total account balance for all Roth IRAs is $30,000. In the first Roth IRA,
$7,000 is attributable to principal and $3,000 to earnings. In the second,
$6,000 is principal and $4,000 is earnings. In the last, $7,500 is attributable
to principal and $2,500 to earnings. If $8,000 is withdrawn from the first IRA
and the withdrawal is not generally excepted from tax and penalty, as discussed
above, there would be no tax or penalty imposed because the amount withdrawn
($8,000) is less than the total amount of principal ($20,500) contributed to all
three Roth IRAs.]
For purposes of determining your taxable income or 10% penalty, each of your
Roth IRA conversions must be made to a separate Roth IRA account. No converted
amounts may be deposited in a Roth IRA annual contributions account.
B. Excess Contribution Penalty
Excess contributions can be corrected without paying a 6% penalty by
withdrawing the excess on any earnings before the due date (including
extensions) for filing your federal income tax return for the year for which you
made the excess contribution. The earnings must be included in your income for
the tax year for which the contribution was made and may be subject to a 10%
premature withdrawal tax if you have reached age 59-1/2 (unless an exception to
the 10% penalty tax applies).
Excess contributions that are not withdrawn by the tax return due date
(including any extensions) for the year for which the contribution was made will
be subject to 6% excise tax. An additional 6% excise tax is assessed for each
subsequent year in which the excess remains in your account.
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In subsequent years, the excess contribution can be reduced by making a
withdrawal equal to the excess. Earnings need not be withdrawn. To the extent
that no earnings are withdrawn, the withdrawal will not be subject to income tax
or penalties. Excess contributions can also be corrected in a subsequent year to
the extent that you contribute less than your Roth IRA contribution limit for
the subsequent year. As the prior excess contribution is reduced or eliminated,
the 6% excise tax will become correspondingly reduced or eliminated for
subsequent tax years.
Note: This discussion of the Roth IRA tax rules in this Disclosure Statement is
based on the best available information. However, the IRS has not issued
regulations or rulings concerning the operation and tax treatment of Roth IRAs.
Also, if enacted, a bill pending in congress will change some of the rules
outlined above. Consult your tax advisor for the latest developments or for
advice about how maintaining a Roth IRA will affect your personal tax or
financial situation.
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Note: Please see the Disclosure Statement for All IRAs below for additional
information applicable to your State Street Research Roth IRA.
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DISCLOSURE STATEMENT FOR ALL IRAs
GENERAL REQUIREMENTS FOR ALL IRAS
In addition to the information contained in the Disclosure Statement for
Traditional IRAs and the Disclosure Statement for Roth IRAs, the following are
some of the general requirements applicable to all IRAs:
1. The custodian or trustee must be a bank, savings and loan association
credit union or other institution or person approved by the Internal Revenue
Service to administer your Traditional IRA or Roth IRA in accordance with
current tax laws.
2. None of your Traditional IRA or Roth IRA assets may be commingled with
the assets of other people except in a common trust fund or common investment
fund.
3. No portion of your Traditional IRA or Roth IRA may be invested in life
insurance contracts or in collectibles (within the meaning of Internal Revenue
Code Section 408(m)). A collectible is defined as a work of art, rug or antique,
metal or gem, stamp or coin, alcoholic beverage, or any other tangible personal
property specified by the Internal Revenue Service. Specially minted U.S. gold
and silver bullion and certain state-issued coins are permissible IRA
investments.
RIGHT TO REVOKE
You have the right to revoke your Traditional IRA or Roth IRA within seven
(7) days of your signing the Application. You may revoke your Traditional IRA or
Roth IRA by mail or by delivery of written notice to:
State Street Research
P.O. Box 8408
Boston, MA 02266
Your notice will be considered mailed on the date of postmark, or the date
of certification or registration if it is sent by certified or registered mail.
If you revoke your Traditional IRA or Roth IRA, you are entitled to a full
return of the contribution without any adjustment for sales charges,
administrative expenses or market fluctuations. If you have any questions
concerning your right of revocation, please call 800-562-0032 (or 800-638-8378)
during regular business hours.
FEDERAL TAX WITHHOLDING
Traditional IRA
Federal income tax will be withheld on amounts withdrawn by you from your
Traditional IRA unless you elect not to have withholding. Generally, tax will be
withheld at a 10% rate.
Roth IRA
Federal income tax will be withheld on the amount of any taxable withdrawal
from a Roth IRA unless you elect not to have withholding. Generally, the tax
will be withheld at a 10% rate.
SPECIAL TAX TREATMENT
Capital gains treatment and the favorable five- or ten-year forward
averaging tax authorized by IRC Section 402 do not apply to Traditional IRA or
Roth IRA distributions.
Excess Distribution Penalty
Prior to 1997, a 15% excise tax was assessed against annual distributions
from tax-favored retirement plans, including IRAs, which exceeded specific
amounts (initially $150,000 per year). There was also a 15% estate tax penalty
for excess amounts in IRAs and other tax-favored arrangements after your death.
These 15% penalty taxes have now been repealed.
Prohibited Transactions
If you or your beneficiary engage in a prohibited transaction, as described
in IRC Section 4975, your Traditional IRA or Roth IRA will lose its tax-exempt
status and the taxable portion of your account must be included in your gross
income for that taxable year (unless the requirements for a tax-free withdrawal
from your Roth IRA are met). If you pledge any portion of either your
Traditional IRA or Roth IRA as collateral for a loan, the amount so pledged will
be treated as a distribution to you and the taxable portion will be included in
your gross income for that year. If you are under age 59-1/2 at the time these
transactions occur, you may be subject to the 10% penalty tax on premature
distributions.
Reporting for Tax Purposes
You must report deductible contributions to your Traditional IRA and
withdrawals on tax Form 1040 or 1040A for the taxable year in which the
contributions or distributions were made. Nondeductible contributions to
Traditional IRAs must be reported with your tax returns using Form 8606.
Additional reporting is required in the event that special taxes or penalties
described herein are due. You must file Form 5329 with the IRS for each taxable
year in which the contribution limits are exceeded, a premature distribution
takes place, or less than the required minimum distribution amount is
distributed from your Traditional IRA. It is possible that the IRS will issue
new tax reporting requirements for Roth IRAs.
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Traditional IRA or Roth IRA Disclosure Statement continued
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IRS APPROVAL AND INFORMATION
The Terms and Conditions for Traditional IRAs and the Terms and Condition
for Roth IRAs used to establish your Traditional IRA or Roth IRA, as the case
may be, have been approved by the Internal Revenue Service. The Internal Revenue
Service approval is a determination only to their form. It is not an endorsement
of the plan in operation or of the investments offered. Based on current tax
laws and IRS rulings, we believe that the use of a the materials in this kit
(particularly the Terms and Conditions for Regular IRAs or the Terms and
Conditions for Roth IRAs) and the Combined IRA Application, containing
information for both Regular and Roth IRAs will be acceptable to the IRS.
However, if the IRS makes a ruling, or Congress enacts legislation, requiring
the use of different documentation, we will forward to you new documentation for
your Regular IRA or a Roth IRA Package to read and, if necessary, to sign. By
adopting a State Street Research Regular IRA or a Roth IRA using the materials
contained herein, you acknowledge this possibility and agree to this procedure
if necessary. In all cases, to the extent permitted, State Street Research will
treat your IRA as being opened on the date your account was opened using current
documents.
This Disclosure Statement provides only a summary of the laws governing
Traditional IRAs and Roth IRAs. You should consult your personal tax advisor or
IRS Publication 590, Individual Retirement Arrangements, for more detailed
information. This publication is available from your local IRS office or by
calling 1-800-TAX-FORMS.
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[State Street logo] STATE STREET RESEARCH
One Financial Center
Boston, MA 02111-2690
Control Number: 4487-971219(1298)SSR-LD IR-863E-1297
EXHIBIT (14)(c)
[logo] STATE STREET RESEARCH IRA
SIMPLE IRA Application
Upon completion, send this application to the address listed on the back.
(1) What type of SIMPLE IRA are you opening?
[ ] Check if this IRA will receive contributions under your employer's SIMPLE
IRA plan, and complete the following employer information:
- -------------------------------------------------(---)-------------------------
Name of employer Telephone
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Address
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[ ] Check if this IRA will receive a transfer or a rollover from another
SIMPLE IRA to which contributions were made by your current or former
employer under a SIMPLE IRA plan, and complete the following:
- Amount to be transferred: $___________________________
- Date of first contribution to your other SIMPLE IRA under
the employer's SIMPLE IRA plan:__________________________________.
Your employer must complete the following to verify the date.
Verification: On behalf of the employer maintaining the SIMPLE IRA plan, I
verify that the date stated above (the date of the first contribution to the
Depositor's prior SIMPLE IRA under the employer's SIMPLE IRA plan) is correct.
I acknowledge that verifying an incorrect date may result in additional
income taxes or penalties.
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Name of Employer: _____________________________________________________________
By: ___________________________________________________________________________
Authorized Officer
Note: For a transfer directly from the current SIMPLE IRA custodian or
trustee, complete the Transfer of Assets/Rollover Form. For a rollover (which
is a distribution from the current SIMPLE IRA custodian or trustee to you,
followed by a contribution on that amount by you to this SIMPLE IRA),
complete the Transfer of Assets/Rollover Form and attach the check for the
amount rolled over, payable to "State Street Bank and Trust Company,
Trustee." Consult your tax advisor on IRS requirements for a valid rollover.
(2) What is your name and address?
(Please print.)
/ /
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Your name Date of birth
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Street address
- -------------------------------------------------------------------------------
City State ZIP
- -------------------------------------------------------------------------------
Daytime telephone number Evening telephone number
- -------------------------------------------------------------------------------
Social security number/taxpayer identification number
(3) What fund(s) have you selected?
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Fund name
[ ] A [ ] B [ ] D
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Percentage Share class**
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Fund name
[ ] A [ ] B [ ] D
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Percentage Share class**
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Fund name
[ ] A [ ] B [ ] D
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Percentage Share class**
[ ] $ _______________________
Total proceeds enclosed
**Investments in Money Market Fund will purchase class E shares.
If a check is enclosed, make it payable to "State Street Bank and Trust Company,
Trustee." Please add $10 for the first year's fiduciary fee; otherwise, the fee
will be deducted from your account at year end.
<PAGE>
(4) Who is your beneficiary?
Primary beneficiary
(Only one required per account. If you have more than
two, include them on a separate sheet. If two or more
are named, they will receive equal amounts unless you
specify otherwise; also if one of the named primary
beneficiaries predeceases you, that person's share will
be distributed pro-rata to the other primary beneficiaries
who survive you, unless you specify otherwise.)
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Name
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Address
- -------------------------------------------------------------------------------
City State ZIP
/ /
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Social security number/taxpayer identification number Date of birth
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Name
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Address
- -------------------------------------------------------------------------------
City State ZIP
/ /
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Social security number/taxpayer identification number Date of birth
Second beneficiary
(If the person(s) named as primary beneficiary fails to
survive you.)
- -------------------------------------------------------------------------------
Name
- -------------------------------------------------------------------------------
Address
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City State ZIP
/ /
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Social security number/taxpayer identification number Date of birth
(5) We need your signature.
I hereby establish a State Street Research SIMPLE IRA, appoint
State Street Bank and Trust Company as Trustee, direct that contributions to
my SIMPLE IRA be invested as specified by this application, and designate the
individual(s) named above, or in any signed attachment, as my
beneficiary(ies). I have received a current prospectus for the Fund(s)
indicated above and the Terms and Conditions of the State Street Research
SIMPLE IRA (which are incorporated herein by reference) and have read its
Disclosure Statement.
Under penalties of perjury, I certify that: (1) the number shown on this form
is my correct taxpayer identification number (or I am waiting for a number to
be issued to me), and (2) I am not subject to backup withholding because (a)
I am exempt from backup withholding, or (b) I have not been notified by the
Internal Revenue Service that I am subject to backup withholding as a result
of a failure to report all interest or dividends, or (c) the IRS has notified
me that I am no longer subject to backup withholding. (You must cross out
item (2) above if you have been notified by the IRS that you are currently
subject to backup withholding because of under-reporting interest or
dividends on your tax return.)
I confirm that all the information, instructions and agreements set forth
hereon shall apply to the account, and if applicable, shall also apply to any
other fund account with shares acquired upon exchange of share of the Fund.
[graphic of pencil] -----------------------------------------------------------
Signature Date
Signature Guarantee
(fill out if your Dealer does not complete section)
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Name of bank or eligible guarantor
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Authorized signature of bank or eligible guarantor
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Street address
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City State ZIP
<PAGE>
(6) Dealer information
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Dealer name
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Street address of home office
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City State ZIP
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Authorized signature of dealer
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Agency/branch office number
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Street address of agency/branch office servicing account
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City State ZIP
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Registered representative's name and number
If this application is for an account introduced through the above-named
Dealer, the Dealer further agrees to all applicable provisions in this
application and in the Prospectus. The Dealer warrants that this application
is completed in accordance with the shareholder's instructions and agrees to
indemnify the Transfer Agent, the Fund, any other eligible Funds, State
Street Research Shareholder Services, the Investment Manager or the
Distributor for any loss or liability from acting or relying upon such
instructions and information. The terms and conditions of the currently
effective Selected Dealer Agreement or sales agreement are included by
reference in this section. The dealer represents that it may lawfully sell
shares of the designated Fund(s) in the state designated as the Applicant's
address of record, and that it has a currently effective selected dealer
agreement with a Distributor authorizing the Dealer to sell shares of the
Fund and the Eligible Funds.
Telephone Exchange Privilege
Telephone Exchange By Shareholder OR DEALER
State Street Research Shareholder Services may effect exchanges for my account
according to telephone instructions FROM ME OR MY DEALER as set forth in the
Prospectus, and may register the shares of the fund to be acquired exactly the
same as my existing account. Authorizing an exchange constitutes an
acknowledgement that I have received the current prospectus of the Fund to be
acquired.
I will not hold the Transfer Agent, the Fund, any other Eligible Funds, State
Street Research Shareholder Services, the Investment Manager or the Distributor
liable for any loss, injury, damage or expense as a result of acting upon any
telephone instructions or responsible for the authenticity of any telephone
instructions. I understand that all telephone calls are tape recorded. My
liability shall be subject to the use of reasonable procedures to confirm that
instructions communicated by telephone are genuine.
The account will automatically have this privilege unless you expressly decline
it by providing your initials below.
I do not want the Telephone Exchange Privilege.
[graphic of pencil] (initial here.)__________________
State Street Bank and Trust Company, Trustee:
You are hereby authorized and appointed on behalf of the above-signed dealer to
execute the purchase transactions in accordance with the terms and conditions of
this Application, and to confirm each purchase.
Acceptance by the Trustee:
This plan shall be deemed to have been accepted by the Trustee, State Street
Bank and Trust Company, after all necessary forms, properly completed, are
received by State Street Research Shareholder Services, and delivered by
Shareholder Services to the agent for the Trustee.
Once completed, send application and check (if you are making a contribution at
this time) made payable to "State Street Bank and Trust Company, Trustee" to:
State Street Research Shareholder Services
P.O. Box 8408
Boston, MA 02266-8408
<PAGE>
Control Number: 3720-970130(0298)SSR-LD IR-567E-0197
<PAGE>
[logo] STATE STREET RESEARCH IRA
SIMPLE IRA Terms & Conditions
These Terms and Conditions are in the form promulgated by the Internal Revenue
Service in Form 5305-S for use in establishing a simple individual retirement
trust account.
ARTICLE I.
The Trustee will accept cash contributions made on behalf of the Participant by
the Participant's employer under the terms of a SIMPLE plan described in section
408(p). In addition, the Trustee will accept transfers or rollovers from other
SIMPLE IRAs of the Participant. No other contributions will be accepted by the
Trustee.
ARTICLE II.
The Participant's interest in the balance in the custodial account is
nonforfeitable.
ARTICLE III.
1. No part of the custodial funds may be invested in life insurance contracts,
nor may the assets of the custodial account be commingled with other property
except in a common trust fund or common investment fund (within the meaning of
section 408(a)(5)).
2. No part of the custodial funds may be invested in collectibles (within the
meaning of section 408(m)) except as otherwise permitted by section 408(m)(3)
which provides an exception for certain gold and silver coins and coins issued
under the laws of any state.
ARTICLE IV.
1. Notwithstanding any provision of this agreement to the contrary, the
distribution of the Participant's interest in the custodial account shall be
made in accordance with the following requirements and shall otherwise comply
with section 408(a)(6) and Proposed Regulations section 1.408-8, including the
incidental death benefit provisions of Proposed Regulations section
1.401(a)(9)-2, the provisions of which are herein incorporated by reference.
2. Unless otherwise elected by the time distributions are required to begin to
the Participant under paragraph 3, or to the surviving spouse under paragraph 4,
other than in the case of life annuity, life expectancies shall be recalculated
annually. Such election shall be irrevocable as to the Participant and the
surviving spouse and shall apply to all subsequent years. The life expectancy of
a nonspouse beneficiary may not be recalculated.
3. The Participant's entire interest in the custodial account must be, or begin
to be, distributed by the Participant's required beginning date (April 1
following the calendar year end in which the Participant reaches age 70-1/2).
By that date, the Participant may elect, in a manner acceptable to the Trustee,
to have the balance in the custodial account distributed in:
(a) A single sum payment
(b) An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the life of the Participant.
(c) An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the joint and last survivor lives of the
Participant and his or her designated beneficiary.
(d) Equal or substantially equal annual payments over a specified period
that may not be longer than the Participant's life expectancy.
(e) Equal or substantially equal annual payments over a specified period
that may not be longer than the joint life and last survivor expectancy of
the Participant and his or her designated beneficiary.
4. If the Participant dies before his or her entire interest is distributed to
him or her, the entire remaining interest will be distributed as follows:
(a) If the Participant dies on or after distribution of his or her interest
has begun, distribution must continue to be made in accordance with
paragraph 3.
(b) If the Participant dies before distribution of his or her interest has
begun, the entire remaining interest will, at the election of the
Participant or, if the Participant has not so elected, at the election of
the beneficiary or beneficiaries, either
(i) Be distributed by the December 31 of the year containing the fifth
anniversary of the Participant's death, or
(ii) Be distributed in equal or substantially equal payments over the
life or life expectancy of the designated beneficiary or beneficiaries
starting by December 31 of the year following the year of the
Participant's death. If, however, the beneficiary is the Participant's
surviving spouse, then this distribution is not required to begin
before December 31 of the year in which the Participant would have
turned age 70-1/2.
(c) Except where distribution in the form of an annuity meeting the
requirements of section 408(b)(3) and its related regulations has
irrevocably commenced, distributions are treated as having begun on the
Participant's required beginning date, even though payments may actually
have been made before that date.
(d) If the Participant dies before his or her entire interest has been
distributed and if the beneficiary is other than the surviving spouse, no
additional cash contributions or rollover contributions may be accepted in
the account.
5. In the case of distribution over life expectancy in equal or substantially
equal annual payments, to determine the minimum annual payment for each year,
divide the Participant's entire interest in the custodial account as of the
close of business on December 31 of the preceding year by the life expectancy of
the Participant (or the joint life and last survivor expectancy of the
Participant and the Participant's designed beneficiary, or the life expectancy
of the designated beneficiary, whichever applies). In the case of distributions
under paragraph 3, determine the initial life expectancy (or joint life and last
survivor expectancy) using the attained ages of the Participant and designated
beneficiary as of their birthdays in the year the Participant reaches age
70-1/2. In the case of a distribution in accordance with paragraph 4(b)(ii),
determine life expectancy using the attained age of the designated beneficiary
as of the beneficiary's birthday in the year distributions are required to
commence.
6. The owner of two or more individual retirement accounts may use the
"alternative method" described in Notice 88-38, 1988-1 C. B. 524, to satisfy the
minimum distribution requirements described above. This method permits an
individual to satisfy these requirements by taking from one individual
retirement account the amount required to satisfy the requirement for another.
ARTICLE V.
1. The Participant agrees to provide the Trustee with information necessary for
the Trustee to prepare any reports required under section 408(i) and Regulations
sections 1.408-5 and 1.408-6.
2. The Trustee agrees to submit reports to the Internal Revenue Service and the
Participant as prescribed by the Internal Revenue Service.
3. The Trustee also agrees to provide the Participant's employer the summary
description described in section 408(1)(2) unless this SIMPLE IRA is a transfer
SIMPLE IRA.
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ARTICLE VI.
Notwithstanding any other articles which may be added or incorporated, the
provisions of Articles I through III and this sentence will be controlling. Any
additional articles that are not consistent with section 408(a) and 408(p) and
related regulations will be invalid.
ARTICLE VII.
This agreement will be amended from time to time to comply with the provisions
of the Code and related regulations. Other amendments may be made with the
consent of the persons whose signatures appear below. article VIII.
1. The amount of each contribution credited to the Participant's individual
retirement trust account shall (except to the extent applied to pay fees or
other charges under section 7 below) be applied to purchase full and fractional
shares of beneficial interest of one or more classes in one or more mutual funds
(hereinafter collectively the "Funds" or individually a "Fund"), as designated
from time to time by State Street Research Investment Services, Inc. ("SSRIS")
as available for investment under this agreement (provided always that such
shares may legally be offered for sale in the state of the Participant's
residence), in accordance with instructions of the Participant given under
Section 3 below. The Trustee (or any party appointed to act as agent for the
Trustee under section 16 of this Article VIII-the "Agent"; whenever an Agent is
acting for the Trustee, references to the Trustee will be deemed to include the
Agent) may retain the Participant's initial deposit for a period of up to ten
days after receipt thereof without liability for any loss of interest, earnings
or appreciation, and may invest such initial deposit at the end of such period
if the Participant has not revoked his account. If and to the extent permitted
by IRS regulations or rulings pertaining to SIMPLE IRA accounts under Code
Section 408(p), the Participant may revoke the account by following such
procedures as may be specified in applicable regulations or rulings (if any),
with such time limits as are provided in such regulations or rulings. Upon
revocation, the amount of the Participant's initial deposit will be returned to
him as provided in such regulations or rulings.
2. All dividends and capital gain distributions received on the shares of a
particular class of any Fund held in the Participant's account shall be retained
in the account and (unless received in additional shares of such class) shall be
reinvested in full and fractional shares of such class of such Fund.
3. For each contribution, the Participant shall designate the portion that will
be invested in each Fund. A contribution may be invested entirely in one Fund,
or may be invested in two or more Funds. However, investment designations will
be subject to any minimum initial or additional investment rules applicable to a
Fund. In addition, the Participant shall designate which class of shares of each
such Fund the Participant's contribution shall be invested in.
The Participant shall make such designation on the State Street Research
Simple Individual Retirement Account Application or other written notice
acceptable to the Trustee.
4. Subject to the minimum initial or additional investment, minimum balance
and other exchange rules applicable to a Fund, the Participant may at any time
direct the Trustee to exchange all or a specified portion of the shares of a
Fund in the Participant's account for shares and fractional shares of one or
more other Funds.
The Participant shall give such directions by written, telephonic,
electronic or other notice acceptable to the Trustee and the Trustee will
process such directions as soon as practicable after receipt thereof.
If any investment designation or direction relating to investments under
these Terms and Conditions is, in the opinion of the Trustee (or SSRIS or the
Agent), ambiguous or incomplete, the Trustee may refrain from carrying out such
designation or other investment direction until the designation or other
investment direction has been clarified or completed to the Trustee's
satisfaction, and neither the Trustee, SSRIS, the Agent nor any Fund (nor any of
their affiliates) will have any liability for loss of interest, earnings or
investment gains or appreciation during such period.
5. The Participant by written notice to the Trustee, may designate one or more
beneficiaries to receive the balance (if any) remaining in the Participant's
account after his death and the time and manner of payment of such balance
(subject to the applicable requirements of the preceding Articles of these Terms
and Conditions). A designation may be on a form provided by the Trustee or on a
written instrument acceptable to the Trustee executed by the Participant and
filed with the Trustee. The Participant may revoke or change such designation in
like manner, at any time and from time to time. No designation will be effective
until received by the Trustee. Any designation filed with the Trustee (whether
or not such designation fully disposes of the Participant's account) will revoke
all other designations previously filed with the Trustee. If no such designation
is in effect upon the Participant's death, or if such designation is in effect
but does not fully dispose of the Participant's account, the balance in the
account shall be paid in a single sum, as soon as is practicable, to the
Participant's estate.
Subject to the applicable requirements of the preceding Articles of these
Terms and Conditions, the Participant may designate a form of payment to the
beneficiary by filing an instrument so specifying with the Trustee. In the
absence of such written instructions from the Participant, the Trustee will pay
the beneficiary in such form as the beneficiary selects.
Except as provided in the first sentence of the preceding paragraph,
following the Participant's death, each beneficiary (or the representative of
the Participant's estate) will exercise the powers and responsibilities of the
Participant hereunder with respect to the portion of the Participant's account
passing to such beneficiary (or estate).
6. The Trustee shall forward to the Participant any notices, prospectuses,
reports to shareholders, financial statements, proxies and proxy soliciting
materials, relating to the Fund shares in the Participant's account. The Trustee
shall vote any such shares held in the account in accordance with the timely
written instructions of the Participant if received. If no timely written
instructions are received from the Participant, the Trustee may vote such shares
in such manner as it deems appropriate (including "present" or in accordance
with the recommendations of SSRIS).
7. The Trustee's fee for performing its duties hereunder shall be such
reasonable amounts as shall be agreed to from time to time by the Trustee and
SSRIS. Such fee, any taxes of any kind and any liabilities with respect to the
account, and any and all expenses reasonably incurred by the Trustee shall, if
not paid by the Participant, be paid from the Participant's account.
8. The Trustee shall make distributions from the account at such times and in
such manner as the Participant directs in writing, subject (except where
otherwise specifically provided in this Article VIII) to the applicable
requirements of the preceding Articles of these Terms and Conditions.
The recalculation of life expectancy of the Participant and/or the
Participant's spouse in connection with distributions from the account before
the Participant's death will be made only at the written election of the
Participant. The recalculation of life expectancy of the surviving spouse in
connection with distributions from the account after the Participant's death
will be made only at the written election of the surviving spouse. By
establishing the account, the Participant (for himself and his surviving spouse,
if any) determines not to recalculate life expectancies unless the Participant
(or surviving spouse) specifically elects the recalculation of life expectancies
approach in accordance with the following sentence. Any such election may be
made in such form as the Participant (or surviving spouse) provides for
(including instructions to such effect to the Trustee or the calculation of
minimum distribution amounts in accordance with a method that provides for
recalculation of life expectancy and instructions to the Trustee to make
distributions in accordance with such method).
9. It shall be the sole responsibility of the Participant (or the Participant's
employer) to determine the time and amount of salary
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reduction or other contributions to the account and the time, amount and manner
of payment of distributions from the account (and to instruct the Trustee or the
Agent accordingly), and the federal and state tax treatment of any contributions
to or distributions from the account. SSRIS, the Agent, the Trustee and the
Funds shall be fully protected in following the direction of the Participant
with respect to the time, amount and manner of payment of such distributions, or
in not acting in the absence of such direction. If the Participant (or
beneficiary) does not direct the Trustee to make distributions from the account
by the time that such distributions are required to commence in accordance with
the preceding Articles of these Terms and Conditions, the Trustee (and SSRIS and
the Agent) will assume that the Participant (or beneficiary) is meeting the
minimum distribution requirements from another individual retirement arrangement
maintained by the Participant (or beneficiary) and will be fully protected in so
doing. SSRIS, the Agent, the Trustee and the Funds shall not be liable for any
taxes, penalties, liabilities or other costs to the Participant or any other
person resulting from contributions to or distributions from the Participant's
account.
10. SSRIS, the Agent, the Trustee and the Funds shall not be responsible for any
loss or diminution in the value of the Participant's account arising out of the
Participant's establishment of a State Street Research SIMPLE Individual
Retirement Account or arising out of any investment instructions of the
Participant, whether relating to the portion of contributions invested in one or
more of the Funds, the selection of a particular class of shares of a particular
Fund, or the exchange of shares of one Fund for shares of one or more other
Funds. SSRIS, the Agent, the Trustee and the Funds shall not render any
investment advice to the Participant (or beneficiary) and will have no duty of
inquiry concerning the Participant's (or beneficiary's) investment directions
(subject to the right of the Trustee, SSRIS or the Agent to obtain clarification
or completion of any investment directions under section 4 above). The
Participant (or beneficiary) will have exclusive investment control over the
account.
11. Whenever the Participant (or beneficiary) is responsible for any direction,
notice, representation or instruction under these Terms and Conditions, SSRIS,
the Agent, the Trustee and the Funds shall be entitled to assume the propriety
and truth of any statement made by the Participant (or beneficiary), and shall
be under no duty of further inquiry with respect thereto, and shall have no
liability with respect to any action taken in reliance upon such statement.
However, the Trustee (or Agent or SSRIS) shall be entitled to receive such
information or documentation (including signature guarantees, waivers or
indemnifications) as it may reasonably request before carrying out any
direction, notice or instruction from the Participant (or beneficiary).
Participant agrees to provide information to the Trustee at such times as
may be necessary to enable the Trustee to administer the account hereunder.
Except to the extent provided by applicable law, the account will not be
subject to assignment, transfer, pledge or hypothecation, nor shall it be
liable for the debts of the Participant (or beneficiary) or subject to
seizure, attachment, execution or other legal process. However, the Trustee
(or Agent or SSRIS) may carry out the requirements of any apparently valid
order of a governmental authority (including a court) relating to the
Participant's account and will have no liability for so doing.
12. These Term and Conditions shall terminate upon the complete distribution of
the account to the Participant or his beneficiaries or to a successor individual
retirement account. The Trustee shall have the right to terminate this account
upon 60 days notice to the Participant, or to his beneficiaries if he is then
dead. In such event, upon expiration of such 60 day period, the Trustee shall
transfer the amount in the account into such successor individual retirement
accounts as the Participant (or his beneficiaries) shall designate, or, in the
absence of such designation, to the Participant, or if he is then dead, to the
beneficiaries or the Participant's estate as their interests shall appear.
13. The Trustee may resign at any time upon 60 days' notice in writing to SSRIS
and may be removed by SSRIS at any time upon 60 days' notice in writing to the
Trustee. Upon such resignation or removal, SSRIS shall appoint a successor
trustee which satisfies the requirements of Section 408 of the Internal Revenue
code.
14. Upon receipt by the Trustee of written notice of appointment of a successor
trustee or custodian and of written acceptance of such appointment by the
successor, the Trustee shall transfer to such successor the assets of the
account and copies of all records pertaining thereto. The Trustee may reserve
such sum of money as it deems advisable for payment of its fees, taxes, costs,
expenses or liabilities with respect to the account, with the balance (if any)
of such reserve remaining after the payment of such items to be paid over to the
successor. The successor shall hold the assets paid over to it under terms that
satisfy the requirements of Section 408 of the Internal Revenue Code.
15. If, within 60 days after the Trustee's resignation or removal, SSRIS has not
appointed a successor trustee which has accepted such appointment, the Trustee
shall appoint such a successor unless it elects to terminate the Agreement under
section 12 of this Article VIII.
16. The Trustee may employ or designate one or more parties to serve as agents
or contractors to perform any or all of its duties hereunder.
17. Any notice sent to the Participant or to his beneficiaries or estate, if he
is then dead, shall be effective if sent by first class mail to him or them at
his or their last addresses of record as provided to the Trustee.
18. Any distributions from the account may be mailed, first-class postage
prepaid to the last known address of the person who is to receive such
distribution, as shown on the Trustee's records, and such distribution shall, to
the extent of the amount thereof, completely discharge the Trustee's liability
of such payment.
19. Any purchase or redemption of shares of any class of a Fund for or from the
Participant's account will be affected at the public offering price or net asset
value of such Fund (as described in the then effective prospectus for such Fund)
next established after the Fund's transfer agent receives the contribution or
other directions.
Any purchase, exchange, transfer or redemption of shares of any class of
a Fund for or from the Participant's account will be subject to any sales
charge, distribution fee or redemption charge, or other fee or charge
applicable to shares of such class, as described in the then effective
prospectus for such Fund. In addition, shares of any class of a Fund will be
subject to any service fee, charge or other annual maintenance or servicing
fees or charges applicable to shares of such class as described in the then
effective prospectus for such Fund (unless the imposition of such fee or
charge is prohibited under applicable regulations or rulings).
20. SSRIS may amend these Terms and Conditions from time to time, and shall give
written notice of any material amendment to the Participant within a reasonable
time after the amendment is adopted or becomes effective, whichever is later.
The Participant hereby expressly delegates authority to SSRIS to amend these
Terms and Conditions and consents to any such amendments.
21. The Terms and Conditions shall be construed, administered and enforced
according to the laws of Massachusetts. The Participant agrees that any legal
proceedings relating to the Participant's account must be brought in a court
(including a federal district court) located in Massachusetts.
22. The term "Trustee" refers to the person serving as the Trustee of the SIMPLE
Individual Retirement Account established hereby, and the term "Participant"
refers to the person for whose benefit such Account was established.
23. Articles I through VII of these Terms and Conditions are in the form
promulgated by the Internal Revenue Service. It is anticipated that if and when
the Internal Revenue Service promulgates changes to Form 5305-S, SSRIS will
adopt such changes as an amendment to these Terms and Conditions. Pending the
adoption of any amendment necessary or desirable to conform these Terms and
Conditions to the requirements of any amendments to the Internal
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<PAGE>
Revenue Code or regulations or rulings thereunder, the Trustee (and SSRIS and
the Agent) may operate the Participant's account in accordance with such
requirements to the extent deemed necessary to preserve the tax benefits of the
account.
24. The Participant acknowledges that he or she has received and read the
current prospectus for each Fund in which his or her account is invested and the
State Street Research SIMPLE Individual Retirement Account Disclosure Statement.
(References are to the Internal Revenue Code.)
(a) SSRIS, the Agent, the Trustee and the Funds will have no responsibility
for compliance with the requirements of Code Section 408(p) and any other
applicable requirements (including, if applicable, whether any transferee
individual retirement account or annuity which the participant designates
to receive a transfer from his account hereunder meets the requirements to
be a SIMPLE IRA or whether any penalty taxes may be payable in connection
therewith), which matters shall be the sole responsibility of the
Depositor.
(b) This Agreement is intended to establish a valid SIMPLE Individual
Retirement Account operating in conjunction with a SIMPLE IRA plan operated
by the Participant's employer, and to meet all applicable requirements of
Code Section 408(p) (and other applicable legal requirements for SIMPLE
IRAs). This Agreement will be interpreted and the custodial account
hereunder administered in a manner that carries out such intent. In
addition, if future regulations or rulings provide guidance concerning the
requirements for a valid SIMPLE IRA, this Agreement will be interpreted and
the custodial account hereunder will be administered in a manner that
complies with such regulations or rulings pending the adoption of any
required amendment to this Agreement.
Control Number: 3735-970215(0398)SSR-LD IR-593E-0297
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[logo] STATE STREET RESEARCH IRA
SIMPLE IRA Disclosure Statement
The following information is provided to you in accordance with the requirements
of the Internal Revenue Code (the "Code") and Treasury regulations and should be
reviewed in conjunction with the State Street Research SIMPLE IRA Terms and
Conditions (the "Terms and Conditions"), SIMPLE IRA Application (the
"Application") and the current prospectus for each fund in which your account is
invested. The provisions of the Terms and Conditions, Application and prospectus
govern in any instance where the Disclosure Statement is incomplete or appears
to conflict. This Disclosure Statement reflects the provisions of the Internal
Revenue Code in effect on January 1, 1997. This Disclosure Statement provides a
nontechnical summary of the law. Please consult with your tax advisor for more
complete information and refer to IRS Publication 590.
The information in this Disclosure Statement relates to SIMPLE Individual
Retirement Accounts. SIMPLE IRAs operate as part of an employer SIMPLE IRA plan
maintained by your employer. Other IRAs, which are not part of an employer
SIMPLE IRA plan, are available and may be established using a different
Application. This Disclosure Statement does not describe such regular IRAs. For
more information on regular IRAs, contact State Street Research at the address
below to request forms and descriptive information.
Right to Revoke
To the extent provided by IRS rules for SIMPLE IRAs, you have the right to
revoke your IRA after signing the Application if you act within the time limits
provided under the IRS rules. You may revoke your IRA by mail or by delivery of
written notice to:
State Street Research
P.O. Box 8408
Boston, MA02266
Your notice will be considered mailed on the date of postmark, or the date
of certification or registration if it is sent by certified or registered mail.
If you revoke your IRA, you are entitled to a return of the amount
contributed. If you have any questions concerning your right of revocation,
please call 800-562-0032 during regular business hours.
Statutory Requirements of an IRA
An IRA is a trust or custodial account established for the exclusive benefit of
you and your beneficiaries. Current law requires that your SIMPLE IRA agreement
be in writing and meet the following requirements:
1. Contributions to your SIMPLE IRA must be in cash, and, for any taxable year,
cannot exceed the limits described below, unless the contribution is a rollover
or transfer to the account.
2. The custodian or trustee must be a bank, savings and loan association, credit
union or other institution or person approved by the Internal Revenue Service to
administer your IRA in accordance with current tax laws.
3. None of your IRA assets may be commingled with the assets of other people
except in a common trust fund or common investment fund.
4. No portion of your IRA may be invested in life insurance contracts or in
collectibles (within the meaning of Internal Revenue Code Section 408[m]). A
collectible is defined as a work of art, rug or antique, metal or gem, stamp or
coin, alcoholic beverage, or any other tangible personal property specified by
the Internal Revenue Service. Specially minted U.S. gold and silver bullions and
certain state issued coins are permissible IRA investments.
5. You are required to take minimum distributions from your IRA at certain times
in accordance with Proposed Regulations Section 1.408-8.
A. During Your Life
You are required to begin making withdrawals from your SIMPLE IRA for the
year in which you reach age 70-1/2 and each year thereafter. Generally, you must
withdraw an amount at least equal to the minimum distribution by December 31 of
each year. However, you may delay your first required withdrawal until the April
1 following the year in which you reached age 70-1/2. (This means that if you
wait to make your withdrawal for the 70-1/2 year until April 1 of the following
year, your total withdrawal in that year must equal the minimum distributions
for two years - one representing the minimum distribution for your 70-1/2 year
and a second withdrawal by December 31 representing the minimum distribution for
that year.)
The minimum distribution for any taxable year is equal to the amount
obtained by dividing the account balance at the end of the prior year (less any
required distributions taken between January 1 and April 1 of the year following
the year you attain age 70-1/2) by the joint life expectancy of you and your
designated beneficiary. If you have not designated a beneficiary for your IRA by
your required beginning date, your single life expectancy will be used. Your
single or joint life expectancy is determined by using the IRS unisex life
expectancy tables. You can find these tables in
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Treasury Regulations Section 1.72-9. See Article IV in your Terms and Conditions
for a more detailed explanation of how to calculate the minimum distribution.
If you name someone other than your spouse as your beneficiary, and your
beneficiary is more than ten years younger than you, your required minimum
distribution must satisfy the minimum incidental benefit rule (MDIB) described
in IRS regulations. The MDIB rule generally requires that your required minimum
distributions be calculated as if your beneficiary were exactly ten years
younger than you.
The minimum distribution required must be calculated separately for each
IRA you own, but the amounts so determined may be totalled and taken from any
one of your IRAs (SIMPLE IRAs and regular IRAs).
B. After Your Death
If you die on or after your required beginning date, distributions must be made
to your beneficiary or beneficiaries as least as rapidly as under the method
being used to determine minimum distributions as of the date of your death. If
your beneficiary is your spouse, your beneficiary can elect to treat your
SIMPLE IRA as his or her own IRA.
If you die before your required beginning date, the entire amount remaining
in your account must, in general, be distributed by December 31 of the year
containing the fifth anniversary of your death. If your beneficiary is a natural
person, he or she may instead choose to receive the remaining balance in your
account over his or her lifetime or over a period not exceeding his or her life
expectancy. Such payments must begin no later than the end of the year following
the year of your death. If your designated beneficiary is your spouse,
distribution need not commence until December 31 of the year you would have
attained 70-1/2, if later than the December 31st of the year following the year
of your death. See Article IV in the Terms and Conditions for a more detailed
explanation of how to calculate the minimum distributions.
Employer Information Requirements
The rules for SIMPLE IRA plans require your employer to give you a "Summary
Description" of the features of the employer's SIMPLE IRA plan. This requirement
to provide a Summary Description may be satisfied by your employer's giving you
a copy of IRS Form 5304-SIMPLE or Form 5305-SIMPLE, as filled out by the
employer to establish its SIMPLE IRA plan. As completed by the employer, this
form will include information such as eligibility requirements applicable to the
employer's SIMPLE IRA plan. Alternatively, your employer may satisfy the Summary
Description requirement by giving the same information in a different format.
In addition, your employer must give you a notice stating how much the
employer will contribute for a year to the SIMPLE IRA plan accounts of
participating employees.
Eligibility
A. Employer Eligibility
Only small employers (those with 100 or fewer employees in the previous
calendar year who received $5,000 or more in compensation from the
employer) may maintain SIMPLE IRA plans. There are other rules as well.
Your employer will determine if it is eligible to have a SIMPLE IRA plan.
B. Employee Eligibility
All employees must participate in the employer's SIMPLE IRA plan unless
specifically excluded. The employer may decide to exclude any of the
following:
-employees who did not receive $5,000 or more in compensation from the
employer in at least two prior calendar years (not necessarily
consecutive);
-employees who are not reasonably expected to receive $5,000 or more in
compensation from the employer for the current calendar year;
-employees in a collective bargaining unit, provided that there was good
faith bargaining over the issue of retirement benefits;
-employees who are non-resident aliens and receive no U.S. source income
from the employer.
The summary description of the employer's SIMPLE IRA plan should indicate
whether any of these groups of employees will be excluded from the
employer's SIMPLE IRA plan.
Contributions
Only two kinds of contributions are permitted: (i) employee contributions
elected by the employee in a salary reduction agreement with the employer and
(ii) employer contributions, which may be either matching or nonmatching
contributions.
Employee Contribution Limits
An eligible employee may elect to have a percentage of compensation contributed
by the employer to the employee's SIMPLE IRA. The maximum contribution amount is
$6,000 for a calendar year. The $6,000 limit is indexed for future
cost-of-living increases.
You elect the desired percentage of compensation to contribute by entering
into a salary reduction agreement with your employer. Your employer will have a
form for you to use. Salary reductions may be made only from compensation you
earn after signing the salary reduction agreement.
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Your employer must transfer your salary reduction contributions to your SIMPLE
IRA as soon as the employer can reasonably do so. However, this may not be later
than the 30th day of the month following the month when you would have received
the compensation except for the salary reduction.
Employer Contribution Requirements
For each calendar year that it maintains a SIMPLE IRA plan, your employer must
make contributions on behalf of participants. The employer may elect either
matching or nonmatching contributions for a particular calendar year.
If the employer elects matching contributions, you must elect salary
reduction contributions from your own compensation in order to receive a
matching contribution to your account by your employer. Your employer will match
your contributions, dollar for dollar, up to a cap of from 1% to 3% of your
compensation for the calendar year. Your employer decides the cap (subject to
certain IRS requirements--these requirements restrict how frequently an employer
may choose a matching contributions cap of less than 3%).
If your employer decides to make nonmatching contributions, it must
contribute 2% of your compensation for the calendar year (provided that you
receive $5,000 or more in compensation from the employer for the calendar year).
For this purpose only, compensation is subject to an IRS limit. The limit for
1997 is $160,000 (this amount is indexed for future cost-of-living changes).
Each calendar year, your employer must give you a notice specifying whether
it will make nonmatching or matching contributions (and specifying the matching
cap) for that calendar year. Employer nonmatching or matching contributions must
be transferred to the SIMPLE IRA accounts of eligible employees no later than
the due date (including any extension) for the employer to file its federal
income tax return for the year.
Rollovers and Transfers
Amounts in your SIMPLE IRA may be rolled over or transferred to another IRA of
yours, or your SIMPLE IRA may receive rollover or transfer contributions from
another SIMPLE IRA, provided all the applicable rollover rules are followed. A
"transfer" is a payment from one IRA trustee or custodian directly to another
IRA trustee or custodian, without passing through the hands of the participant.
A "rollover" is a distribution to the participant from one IRA trustee or
custodian, followed by the participant's depositing the amount received (all or
part of it) with another trustee or custodian within the time allowed by law.
The rollover rules are generally summarized below. If you have any questions
regarding these rules, please contact your tax advisor.
1. Rollovers from or to other IRA
You may make a transfer or rollover contribution to your State Street
Research SIMPLE IRA of amounts held in another SIMPLE IRA. Transfers or
rollovers to this SIMPLE IRA may come only from another SIMPLE IRA, not from a
regular IRA. There are no limits on the amount of the transfer or rollover
contributions made from one SIMPLE IRA to another SIMPLE IRA. A proper IRA to
IRA rollover is completed if all or part of the distribution is rolled over
within 60 days after the distribution is received. No more than one distribution
per year from an IRA may be rolled over into another IRA. The
one-rollover-per-year rule does not apply to transfers from one IRA trustee or
custodian directly to another; these may be made more often than once per year.
You may also transfer amounts held in this State Street Research SIMPLE IRA
account to another IRA with a different trustee or custodian, or you may make a
withdrawal from this IRA and within 60 days make a rollover of the amount
withdrawn to another IRA. However, during the first two years after your
participation in your employer's SIMPLE IRA plan begins, you may transfer or
roll over only to another SIMPLE IRA (not a regular IRA).
2. Transfers to Change Investments
The rules governing transfers to change investments depend on whether your
employer has established its SIMPLE IRA plan with a "designated financial
institution" or not. Normally, SIMPLE IRA plans established by employers through
State Street Research will not have a designated financial institution. However,
if your employer has established its SIMPLE IRA plan with another sponsor, the
designated financial institution rules may apply. The summary description (or
other information) about your employer's SIMPLE IRA plan should indicate whether
the plan uses a designated financial institution or not.
Under the designated financial institution rules, all employee and employer
contributions are initially paid to that institution. However, you may elect to
have contributions to your SIMPLE IRA account with the designated financial
institution transferred to another SIMPLE IRA you have established, for example
with State Street Research, where the contributions will be invested in
accordance with your directions. If you make this election during the 60-day
period when you elect your salary reduction contributions to the plan for a
calendar year, then contributions for that calendar year are required to be
transferred without a transfer fee or other cost or penalty. While held by the
designated financial institution pending transfer to your other SIMPLE IRA,
contributions, the contributions for you may be invested in a specified
investment, such as a money market fund or a deposit account, and you will have
no choice of investments. Other transfer may be made to another SIMPLE IRA or
3
<PAGE>
regular IRA, but they will be subject to normal custodian or trustee fees and
any redemption or other charges imposed by the investment fund in which
contributions are invested. More information on this subject should appear in
the summary description of your employer's SIMPLE IRA plan.
Your employer may decide to operate its SIMPLE IRA plan without a
designated financial institution. Normally, SIMPLE IRA plans established through
State Street Research will not have a designated financial institution. Each
eligible employee is required to establish a SIMPLE IRA with a financial
institution of his or her choice. Contributions on your behalf will be sent to
your SIMPLE IRA account, wherever you have set it up, and invested according to
your instructions.
Taxation of Withdrawals
Withdrawals by you (or your beneficiary) from your SIMPLE IRA will be includable
as income in the taxable year in which received.
Federal Tax Penalties
A. Early Withdrawal Penalty
If you make a withdrawal from your SIMPLE IRA prior to attaining age 59 1\2, an
additional penalty tax will be imposed on the amount of the distribution, unless
an exception to the penalty is available. The penalty tax will be 25% of the
amount withdrawn for withdrawals you make during the first two years after the
date of the first contribution to your SIMPLE IRA account. For withdrawals after
the first two years, the penalty is 10% of the amount withdrawn. Certain
exceptions to the imposition of this penalty are available. The penalty will not
be imposed if the distribution was made on account of death, disability, or was
a qualifying rollover or a direct transfer. The additional penalty tax may not
apply if the distribution is made in a series of substantially equal periodic
payments, at least annually, based on your life expectancy or the joint life
expectancy of you and your beneficiary. Finally, an exception to the penalty tax
is available if the withdrawal does not exceed either (i) the amount of your
deductible medical expenses for the year of the withdrawal (consult your tax
advisor on the deductibility or medical expenses; generally, medical expenses
paid during a year are deductible to the extent they exceed 7 1\2% of your
adjusted gross income for the year), or (ii) the amount you paid for health
insurance covering yourself, your spouse or dependents (this health insurance
exception applies only if you are unemployed and receive federal or state
unemployment benefit payments for at least 12 weeks, and is available for
withdrawals during the year in which you receive such unemployment compensation
benefits or in the following year, but not to withdrawals made after you have
been reemployed for 60 days).
B. Excess Accumulation Penalty
If you do not receive your required minimum distribution for the year you attain
age 70-1\2 and by the end of each subsequent year, you will be subject to a 50%
excise tax on the amount of the required minimum distribution which should have
been taken but was not. If the distribution you actually receive falls short of
the required minimum distribution, the 50% excise tax will be imposed on the
amount by which the distribution falls short. The IRS has authority to waive or
reduce the 50% penalty tax upon proof that the failure to receive the required
minimum distribution was due to reasonable cause and that reasonable steps are
being taken to remedy the failure.
C. Excess Distribution Penalty
There is a 15% excise tax assessed against annual distributions from tax-favored
retirement plans, including IRAs (regular and SIMPLE IRAs), which exceed
$160,000 (for 1997; this amount is indexed for future cost-of-living increases).
To determine whether you have distributions in excess of the limit, you must
aggregate the amounts of all distributions received by you during the calendar
year, including IRAs. If you had account balances or accrued benefits equal to
at least $562,500 as of August 1, 1986, you may have a portion of the excess
distributions exempted from the 15% additional tax if you made a timely
grandfather election on your tax return. If the penalty tax on both excess
distributions and premature distributions apply to the same distribution, the
penalty tax on excess distributions is reduced by the penalty tax on the
premature distributions. Under a recent amendment to the tax law, the 15% excise
tax for annual distributions above $160,000 will not apply to withdrawals during
calendar years 1997, 1998 and 1999. A related 15% excise tax on your estate for
certain excess accumulations remaining in all of your tax-favored retirement
plans at your death continues to apply during these three years. Please consult
your tax advisor for more complete information on penalty taxes, including
advice on whether you should consider making withdrawals from your SIMPLE IRA
during the three-year period when the 15% excess distribution penalty does not
apply.
D. Excess Retirement Accumulation Penalty
Your estate will have to pay additional federal estate tax if you die with an
excess retirement accumulation. The increased estate tax will be equal to 15% of
the excess retirement accumulation. An excess retirement accumulation exists if,
at the time of your death, the value of all your interests in tax-favored
retirement plans, including IRAs, exceeds the present value of an annuity with
annual payments of $160,000 (for 1997; this amount is indexed for future
cost-of-living increases) payable over your life expectancy immediately before
your death.
4
Exhibit (15)
STATE STREET MASTER INVESTMENT TRUST
PLAN OF DISTRIBUTION
PURSUANT TO RULE 12b-1
WHEREAS, STATE STREET MASTER INVESTMENT TRUST, an unincorporated
association of the type commonly known as a business trust organized under the
laws of the Commonwealth of Massachusetts (the "Trust"), engages in business as
an open-end management investment company and is registered as such under the
Investment Company Act of 1940, as amended (the "Act");
WHEREAS, the Trust is authorized (i) to issue shares of beneficial interest
(the "Shares") in separate series, with the Shares of each such series
representing the interests in a separate portfolio of securities and other
assets, and (ii) to divide the Shares within each such series into two or more
classes;
WHEREAS, the Trust has established a portfolio series, the State Street
Investment Trust (the "Initial Series" - such series, together with all other
series subsequently established by the Trust, being referred to herein
individually as a "Series" and collectively as the "Series");
WHEREAS, the Trust may be deemed a distributor of the Shares within the
meaning of Rule 12b-1 under the Act, and desires to adopt a Plan of Distribution
and has adopted a related Distribution Agreement with State Street Research
Investment Services, Inc., the Trust's principal underwriter (the "Distributor")
pursuant to such Rule (respectively, the "Plan" and the "Agreement");
WHEREAS, the Board of Trustees as a whole, and the Trustees who are not
interested persons of the Trust (as defined in the Act) and who have no direct
or indirect financial interest in the operation of this Plan or the Agreement
and any agreements relating to it (the "Qualified Trustees"), having determined,
in the exercise of their reasonable business judgment and in light of their
fiduciary duties under state law and under Section 36(a) and (b) of the Act,
that there is a reasonable likelihood that this Plan and the Agreement will
benefit the Initial Series and its shareholders, have accordingly approved this
Plan and the Agreement by votes cast in person at a meeting called for the
purpose of voting on this Plan and the Agreement and any agreements related
thereto; and
WHEREAS, this Plan will be approved by a majority of the outstanding voting
securities (as defined in the Act) of each applicable class of the Initial
Series.
<PAGE>
NOW, THEREFORE, the Trust hereby adopts this Plan in accordance with Rule
12b-1 under the Act, on the following terms and conditions:
SECTION 1. DISTRIBUTION ACTIVITIES
Subject to the supervision of the Board of Trustees, the Trust may engage,
directly or indirectly, in financing any activities primarily intended to result
in the sale of Shares, including, but not limited to, the following: (1) payment
of commissions and/or reimbursement to underwriters, securities dealers and
others engaged in the sale of Shares, including payments to the Distributor to
be used to pay commissions and/or reimbursement to securities dealers and others
(including affiliates of the Distributor) engaged in the distribution and
marketing of Shares or furnishing assistance to investors on an ongoing basis,
(2) reimbursement of direct out-of-pocket expenditures incurred by the
Distributor in connection with the distribution and marketing of Shares,
including expenses relating to the formulation and implementation of marketing
strategies and promotional activities such as direct mail promotions and
television, radio, newspaper, magazine and other mass media advertising, the
preparation, printing and distribution of sales literature, the preparation,
printing and distribution of Prospectuses of the Trust and reports for
recipients other than existing shareholders of the Trust, and obtaining such
information, analyses and reports with respect to marketing and promotional
activities and investor accounts as the Trust may, from time to time, deem
advisable, and (3) reimbursement of expenses incurred by the Distributor in
connection with the servicing of shareholder accounts, including payments to
securities dealers and others in consideration of the provision of personal
service to investors and/or the maintenance of shareholder accounts and expenses
associated with the provision of personal service by the Distributor directly to
investors. In addition, the Plan shall be deemed to authorize the Distributor
and State Street Research & Management Company (the "Adviser") to make payments
out of general profits, revenues and other sources to underwriters, securities
dealers and others in connection with sales as described in the Prospectus of
the Trust as from time to time amended and in effect (for purposes hereof,
references to the Prospectus of the Trust shall be deemed to include all
Prospectuses of the Trust), to the extent, if any, that such payments may be
deemed to be within the scope of Rule 12b-1 under the Act.
The Trust and the Series are authorized to engage in the activities listed
above, and in other activities primarily intended to result in the sale of
Shares, either directly or
2
<PAGE>
through other persons with which the Trust has entered into agreements pursuant
to the Plan.
SECTION 2. MAXIMUM EXPENDITURES
The expenditures to be made by the Initial Series pursuant to this Plan and
the basis upon which payment of such expenditures will be made shall be
determined by the Initial Series, but in no event may such expenditures exceed
the following: (i) with respect to Class A Shares of the Initial Fund, an annual
rate of .25% of the average daily value of net assets represented by such Class
A shares, (ii) with respect to Class B Shares and Class D Shares of the Initial
Fund, an annual rate of .75% of the average daily value of the net assets
represented by such Class B or Class D shares (as the case may be) to finance
sales or promotion expenses and an annual rate of .25% of the average daily
value of the net assets represented by such Class B or Class D shares (as the
case may be) to make payments for personal service and/or the maintenance of
shareholder accounts, and (iii) with respect to any Series subsequently
established by the Trust, the annual rate as agreed upon and specified in an
addendum hereto; plus such amounts as the Distributor and Adviser may expend
from general revenues, profits and other sources from time to time in accordance
with the last sentence of the first paragraph of Section 1 and the second
paragraph of Section 3. The expenditures to be made pursuant to this Plan shall
commence with respect to each class of Shares of a Series as of the date on
which this Plan becomes effective with respect to each such class.
SECTION 3. PAYMENTS
Pursuant to this Plan, the Trust shall make periodic payments to the
Distributor at the annual rate provided for in Section 2 with respect to each
Series, or class of Shares thereof. The Distributor shall in turn remit to and
allocate among selected dealers (including those that are affiliates of the
Distributor) who have entered into selected dealer agreements with the
Distributor, in consideration of and as reimbursement for expenses incurred in
the provision of distribution and marketing services and furnishing assistance
to investors on an ongoing basis, such amounts as are required pursuant to such
selected dealer agreements and as indicated in the Prospectus of the Trust. Any
amounts received by the Distributor and not so allocated may be applied by the
Distributor as reimbursement for expenses incurred in connection with the
distribution and marketing of Shares of each class and the servicing of investor
accounts as
3
<PAGE>
contemplated by Section 1(2) hereof. The distribution and servicing expenses of
a particular class will be borne solely by that class and no Series will use
fees charged to one class within a Series to support the marketing or servicing
relating to any other class of Shares within that Series or any other Series.
Any amounts received by the Distributor hereunder and not applied as provided
herein shall be returned to the applicable class or Series of the Trust.
The Distributor and the Adviser may also make payments to authorized
securities dealers as specified in the Prospectus of the Trust as from time to
time amended and in effect, from its general profits, revenues and other
sources. Amounts received by the Distributor from any Fund in respect of any
class of Shares shall not be used to pay any commission expenses related to the
sale of any other class of Shares of such Series.
Notwithstanding anything to the contrary herein, the aggregate of all
payments to the Distributor to finance sales or promotion expenses with respect
to the Class B or the Class D shares pursuant to this Section 3 together with
any contingent deferred sales charges received by the Distributor in connection
with the redemption of shares of the respective class shall not exceed the
amount expended by the Distributor to finance sales or promotion expenses of
such class.
SECTION 4. TERM AND TERMINATION
(a) Initial Series. This Plan shall become effective with respect to
each class of the Initial Series as of the later of (i) the date on which a
Registration Statement with respect to such class of Shares becomes effective
under the Securities Act of 1933, as amended, or (ii) the date on which such
class of the Initial Series commences offering its Shares to the public and
shall continue in effect with respect to each Initial Series (subject to Section
4(c) hereof) until one year from the date of such effectiveness, unless the
continuation of this Plan shall have been approved with respect to the Initial
Series in accordance with the provisions of Section 4(c) hereof.
(b) Additional Series. This Plan shall become effective with respect
to each additional Series other than the Initial Series established by the Trust
upon commencement of the initial public offering thereof (provided that the Plan
has previously been approved for continuation by votes of a majority of both (i)
the Board of Trustees of the Trust and (ii) the Qualified Trustees, cast in
person at a meeting held before the initial public offering of such additional
Series and called for the purpose of voting on such approval), and shall
continue in effect with respect to each such additional
4
<PAGE>
Series (subject to Section 4(c) hereof) for one year thereafter, unless the
continuation of this Plan shall have been approved with respect to such
additional Series in accordance with the provisions of Section 4(c) hereof. The
Distributor and the Trust on behalf of each such additional Series shall each
sign an addendum hereto agreeing to be bound hereby and setting forth such
specific and different terms as the parties may agree upon, including, without
implied limitation, the amount and purpose of payments to be made hereunder.
(c) Continuation. This Plan and the Agreement shall continue in
effect with respect to each Series subsequent to the initial term specified in
Section 4(a) and (b) for so long as such continuance is specifically approved at
least annually by votes of a majority of both (i) the Board of Trustees of the
Trust and (ii) the Qualified Trustees, cast in person at a meeting called for
the purpose of voting on this Plan, subject to any shareholder approval
requirements existing under applicable law.
(d) Termination. (i) This Plan may be terminated at any time with
respect to the Trust or any Series, as the case may be, by vote of a majority of
the Qualified Trustees, or by vote of a majority of the outstanding voting
securities of the Trust or that Series, as the case may be. The Plan may remain
in effect with respect to a Series even if it has been terminated in accordance
with this Section 4(e) with respect to one or more other Series of the Trust.
(ii) The Agreement may be terminated at any time, without
penalty, with respect to the Trust or any Series, as the case may
be, by vote of a majority of the Qualified Trustees or by vote of a
majority of the outstanding voting securities of the Trust or that
Series, as the case may be, on sixty days' written notice to the
Distributor. In addition, the Agreement provides for automatic
termination in the event of its assignment.
SECTION 5. AMENDMENTS
This Plan may not be amended to increase materially the amount of
distribution expenditures provided for in Section 2 hereof unless such amendment
is approved by a vote of a majority of the outstanding voting securities of each
Series or class thereof with respect to which a material increase in the amount
of distribution expenditures is proposed, and no material amendment to the Plan
shall be made unless approved in the manner provided for annual renewal in
Section 4(c) hereof. Otherwise, this Plan may be amended with respect to the
Trust
5
<PAGE>
or a Series or class thereof by vote of a majority of the Qualified Trustees or
the outstanding voting securities of the Trust or that Series, as the case may
be.
SECTION 6. INDEPENDENT TRUSTEES
While this Plan is in effect with respect to any Series, the selection and
nomination of Trustees who are not interested persons (as defined in the Act) of
the Trust shall be committed to the discretion of the Trustees who are not
interested persons.
SECTION 7. QUARTERLY REPORTS
The Treasurer of the Trust and the Treasurer of the Distributor shall
provide to the Trustees of the Trust and the Trustees shall review, at least
quarterly, a written report of the amounts expended for distribution pursuant to
this Plan and the purposes for which such expenditures were made.
SECTION 8. RECORDKEEPING
The Trust shall preserve copies of this Plan, the Agreement and any related
agreements and all reports made pursuant to Section 7 hereof, for a period of
not less than six years from the date of this Plan and the Agreement, the
agreements or such reports, as the case may be, the first two years in an easily
accessible place.
SECTION 9. LIMITATION OF LIABILITY
The term "State Street Master Investment Trust" means and refers to the
Trustees from time to time serving under the Master Trust Agreement of the Trust
dated February 5, 1993 as the same may subsequently thereto have been, or
subsequently hereto be, amended. It is expressly agreed that the obligations of
the Trust hereunder shall not be binding upon any of the Trustees, shareholders,
nominees, officers, agents or employees of the Trust, personally, but bind only
the trust property of the Trust, as provided in the Master Trust Agreement of
the Trust. The execution and delivery of this Plan and the Plan have been
authorized by the Trustees and shareholder of the Trust and signed by an
authorized officer of the Trust, acting as such, and neither such authorization
by such Trustees and shareholder nor such execution and delivery by such officer
shall be deemed to have been made by any of them individually or to impose any
6
<PAGE>
liability on any of them personally, but shall bind only the trust property of
the Trust as provided in its Master Trust Agreement. The Master Trust Agreement
of the Trust further provides, and it is expressly agreed, that each Series of
the Trust shall be solely and exclusively responsible for the payment of its
debts, liabilities and obligations and that no other Series shall be responsible
or liable for the same.
IN WITNESS WHEREOF, the Trust and the Distributor have executed this
Plan of Distribution on the day and year set forth below in Boston,
Massachusetts.
ATTEST: STATE STREET MASTER INVESTMENT TRUST
/s/ Constantine Hutchins, Jr. By: /s/ Gerard P. Maus
- ----------------------------- ------------------
Constantine Hutchins, Jr. Gerard P. Maus
STATE STREET RESEARCH
ATTEST: INVESTMENT SERVICES, INC.
/s/ Constantine Hutchins, Jr. By: /s/ Donald E. Webber
- ----------------------------- --------------------
Constantine Hutchins, Jr. Donald E. Webber
Date: February 17, 1993
-----------
Exhibit (16)
STATE STREET INVESTMENT TRUST
Standard Total Return Computations- One Year
Original Amt. Invested $1,000.00
Commission at 4.5% $45.00
Net Amount to Fund $955.00
Purchase price $72.97
Shares acquired 13.088
<TABLE>
<CAPTION>
Beginning Monthly Reinvest Shares New Month-end Monthly Aggregate
Month Shares Income Dividend Price Purchased Shares NAV ERV Performance Performance
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
01/31/88 13.088 0.0000 0.00 $75.28 0.000 13.088 $75.28 $985.23 -1.48 -1.48
02/29/88 13.088 0.0000 0.00 $78.47 0.000 13.088 $78.47 $1,026.98 4.24 2.70
03/31/88 13.088 0.4000 5.24 $74.30 0.070 13.158 $74.30 $977.64 -4.80 -2.24
04/30/88 13.158 0.0000 0.00 $74.62 0.000 13.158 $74.62 $981.85 0.43 -1.81
05/31/88 13.158 0.0000 0.00 $75.54 0.000 13.158 $75.54 $993.96 1.23 -0.60
06/30/88 13.158 0.4000 5.26 $78.65 0.067 13.225 $78.65 $1,040.14 4.65 4.01
07/31/88 13.225 0.0000 0.00 $78.16 0.000 13.225 $78.16 $1,033.66 -0.62 3.37
08/31/88 13.225 0.0000 0.00 $75.99 0.000 13.225 $75.99 $1,004.96 -2.78 0.50
09/30/88 13.225 0.4000 5.29 $78.39 0.067 13.292 $78.39 $1,041.99 3.68 4.20
10/31/88 13.292 0.0000 0.00 $79.79 0.000 13.292 $79.79 $1,060.60 1.79 6.06
11/30/88 13.292 0.0000 0.00 $77.92 0.000 13.292 $77.92 $1,035.75 -2.34 3.57
12/30/88 13.292 6.8500 91.05 $72.35 1.259 14.551 $72.35 $1,052.76 1.64 5.28
</TABLE>
For the year ending December 31, 1988:
P(1 + T)(n) = ERV
1000(1 + T)(12/12) = 1,052.76
T = 5.28%
<PAGE>
STATE STREET INVESTMENT TRUST
Nonstandardized Total Return Computation: One Year
Original Amt. Invested $1,000.00
Commission at 0.0% $0.00
Net Amount to Fund $1,000.00
Purchase price $72.97
Shares acquired 13.704
<TABLE>
<CAPTION>
Beginning Monthly Reinvest Shares New Month-end Monthly Aggregate
Month Shares Income Dividend Price Purchased Shares NAV ERV Performance Performance
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
01/31/88 13.704 0.0000 0.00 $75.28 0.000 13.704 $75.28 $1,031.66 3.17 3.17
02/29/88 13.704 0.0000 0.00 $78.47 0.000 13.704 $78.47 $1,075.37 4.24 7.54
03/31/88 13.704 0.4000 5.48 $74.30 0.074 13.778 $74.30 $1,023.71 -4.80 2.37
04/30/88 13.778 0.0000 0.00 $74.62 0.000 13.778 $74.62 $1,028.12 0.43 2.81
05/31/88 13.778 0.0000 0.00 $75.54 0.000 13.778 $75.54 $1,040.79 1.23 4.08
06/30/88 13.778 0.4000 5.51 $78.65 0.070 13.848 $78.65 $1,089.15 4.65 8.92
07/31/88 13.848 0.0000 0.00 $78.16 0.000 13.848 $78.16 $1,082.37 -0.62 8.24
08/31/88 13.848 0.0000 0.00 $75.99 0.000 13.848 $75.99 $1,052.32 -2.78 5.23
09/30/88 13.848 0.4000 5.54 $78.39 0.071 13.919 $78.39 $1,091.09 3.68 9.11
10/31/88 13.919 0.0000 0.00 $79.79 0.000 13.919 $79.79 $1,110.58 1.79 11.06
11/30/88 13.919 0.0000 0.00 $77.92 0.000 13.919 $77.92 $1,084.55 -2.34 8.46
12/30/88 13.919 6.8500 95.34 $72.35 1.318 15.237 $72.35 $1,102.37 1.64 10.24
</TABLE>
No annualization is made. Computation for the twelve months ended December 31,
1988.
<PAGE>
Calculation of Yield
State Street Investment Trust
The annualized yield based on the month of October 1989 was
calculated according to the following formula:
a - b 6
YIELD = 2[( ----- +1) -1]
cd
Where:
a = dividends and interest earned during the period
b = expenses accrued for the period
c = the average daily number of shares outstanding
during the period that were entitled to receive dividends
d = the maximum offering price per share on the last day of
the month
Therefore:
1,498,024 - 227,103 6
YIELD = 2[(---------------------- +1) -1]
6,513,709 x 94.80
= 2.48%
See "Calculation of Performance Data" in the Statement of Additional
Information for a description of how interest earned ("a" above) is calculated.
Average daily number of shares outstanding ("c" above) is calculated
by summing the shares entitled to receive dividends on each day of the month and
dividing the total by the number of days in the month.
<PAGE>
Calculation of Distribution Rate
State Street Investment Trust
The distribution rate is calculated by annualizing the latest
per-share distribution from ordinary income and dividing the result by the
maximum offering price per share as of the end of the period to which the
distribution relates.
The computation for the quarter ended September 30, 1989 is as
follows:
.40(a) x 4 = 1.60/95.94(b) = 1.67%
(a) quarterly distribution rate for the quarter ended September 30, 1989
(b) net asset value at September 30, 1989 ($91.62) multiplied by maximum
sales charge (100/95.5) = $95.94
EXHIBIT (18)(a)
POWER OF ATTORNEY
We, the undersigned State Street Research Master Investment
Trust ("Master Trust"), a Massachusetts business trust, its trustees,
its principal executive officer and its principal financial and
accounting officer, hereby severally constitute and appoint Francis J.
McNamara, III and Darman A. Wing, as our true and lawful attorneys,
with full power to each of them alone to sign for us, in our names and
in the capacities indicated below, any Registration Statements and any
and all amendments thereto of the Master Trust filed with the
Securities and Exchange Commission and generally to do all such things
in our names and in the indicated capacities as are required to enable
the Master Trust to comply with provisions of the Securities Act of
1933, as amended, and/or the Investment Company Act of 1940, as
amended, and all requirements and regulations of the Securities and
Exchange Commission, hereby ratifying and confirming our signatures as
they have been and may be signed by our said attorneys to said
Registration Statements, and any and all amendments thereto.
IN WITNESS WHEREOF, we have hereunto set our hands, on this
2nd day of March, 1998.
SIGNATURES
STATE STREET RESEARCH MASTER INVESTMENT TRUST
By: /s/ Ralph F. Verni
-----------------------------
Ralph F. Verni, Chief Executive
Officer and President
/s/ Ralph F. Verni /s/ Dean O. Morton
------------------------------ --------------------------------
Ralph F. Verni, Trustee and Dean O. Morton, Trustee
principal executive officer
/s/ Gerard P. Maus /s/ Thomas L. Phillips
------------------------------ --------------------------------
Gerard P. Maus, Thomas L. Phillips, Trustee
Principal financial
and accounting officer
/s/ Steve A. Garban /s/ Toby Rosenblatt
------------------------------ --------------------------------
Steve A. Garban, Trustee Toby Rosenblatt, Trustee
/s/ Malcolm T. Hopkins /s/ Michael S. Scott Morton
------------------------------ --------------------------------
Malcolm T. Hopkins, Trustee Michael S. Scott Morton, Trustee
/s/ Edward M. Lamont /s/ Jeptha H. Wade
------------------------------ --------------------------------
Edward M. Lamont, Trustee Jeptha H. Wade, Trustee
/s/ Robert A. Lawrence
------------------------------
Robert A. Lawrence, Trustee
EXHIBIT (18)(b)
STATE STREET RESEARCH MASTER INVESTMENT TRUST
Certificate of Resolution
I, the undersigned Amy L. Simmons, hereby certify that I am Assistant
Secretary of State Street Research Master Investment Trust (the "Master Trust"),
a Massachusetts business trust duly authorized and validly existing under
Massachusetts law, and that the following is a true, correct and complete
statement of a vote duly adopted by the Trustees of said Master Trust on May 5,
1995:
"VOTED: That Francis J. McNamara, III and Darman A. Wing be, and each
----- hereby is, authorized and empowered, for and on behalf of the
Master Trust, its principal financial and accounting officer,
and in their name, to execute, and file a Power of Attorney
relating to, the Master Trust's Registration Statements under
the Investment Company Act of 1940 and/or the Securities Act of
1933, and amendments thereto, the execution and delivery of
such Power of Attorney, Registration Statements and amendments
thereto, to constitute conclusive proof of such authorization."
I further certify that said vote has not been amended or revoked and the
same is now in full force and effect.
IN WITNESS WHEREOF, I have hereunto set my hand this 2nd day of March,
1998.
/s/ Amy L. Simmons
------------------
Amy L. Simmons
Assistant Secretary
EXHIBIT 19(a)
STATE STREET RESEARCH FUNDS NEW ACCOUNT APPLICATION
* Use a pen.
* Please print in CAPITAL LETTERS.
Use the Additional Services
Application to take advantage of a
range of services, including
checkwriting and Systematic
Withdrawal Plan.
1 Your Account
- --------------------------------------------------------------------------------
(graphic of a telephone)
* Fill in one type only.
Individual Retirement Accounts require a different application. To obtain an
IRA application, call 1-800-562-0032. (graphic of a telephone)
Individual / Joint Account
_____________________________________________________________
- -------------------------------------------------------------
Name [first, middle initial, last]
[ ][ ][ ]-[ ][ ]-[ ][ ][ ][ ]
Social Security number
[ ][ ]/[ ][ ]/[ ][ ]
Date of birth [month / day / year]
- -------------------------------------------------------------
Name of joint owner, if any [first, middle initial, last]
[ ][ ][ ]-[ ][ ]-[ ][ ][ ][ ]
Joint owner's Social Security number
[ ][ ]/[ ][ ]/[ ][ ]
Joint owner's date of birth [month / day / year]
Joint owners will be joint tenants with rights of survivorship unless you
check a different option:
O Tenants in common O Tenants by entirety O Community property
Gift / Transfer to a Minor [UGMA/UTMA]
_____________________________________________________________
- -------------------------------------------------------------
Name of one custodian [first, middle initial, last]
- -------------------------------------------------------------
As custodian for [name of minor; first, middle initial, last]
Under the [ ][ ] Uniform Gifts / Transfers to Minors Act
[minor's state of residence]
[ ][ ][ ]-[ ][ ]-[ ][ ][ ][ ]
Minor's Social Security number
[ ][ ]/[ ][ ]/[ ][ ]
Minor's date of birth [month / day / year]
Trust Account
________________________________________________________________
- -------------------------------------------------------------
Name of trustee [first, middle initial, last]
- -------------------------------------------------------------
Name of co-trustee, if any [first, middle initial, last]
- -------------------------------------------------------------
As trustees of [name of trust]
- -------------------------------------------------------------
For the benefit of [trust beneficiary]
[ ][ ]-[ ][ ][ ][ ][ ][ ][ ]
Trust's federal tax identification number
[ ][ ]/[ ][ ]/[ ][ ]
Date of trust agreement [month / day / year]
Business / Other Account
______________________________________________________________
- -------------------------------------------------------------
Name of entity
[ ][ ][ ][ ][ ][ ][ ][ ][ ]
Federal tax identification number or Social Security number
O I / We have included a corporate resolution, as is required to open this
account.
Type of entity: O Corporation
O Partnership
O Estate
O Unincorporated association
O Guardian
For all other types of accounts, please call 1-800-562-0032 for a different
application.
2 Your Address
- --------------------------------------------------------------------------------
- ---------------------------------------------------------------
Street address / P.O. Box
- ---------------------------------------------------------------
City
[ ][ ] [ ][ ][ ][ ][ ]-[ ][ ][ ][ ]
State Zip
[ ][ ][ ]-[ ][ ][ ]-[ ][ ][ ][ ]
Daytime phone number
[ ][ ][ ]-[ ][ ][ ]-[ ][ ][ ][ ]
Evening phone number
Check one:
[ ] U.S. citizen [ ] Non-U.S. citizen
[ ] U.S. resident [ ] Resident of:
[ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ]
<PAGE>
3 Your Investment
- --------------------------------------------------------------------------------
* Choose one share class and distribution option for each fund.
* Generally, the minimum investment is $2,500 per account ($1,000 using
Investamatic). Some funds have higher minimums. Please refer to
prospectus.
<TABLE>
<CAPTION>
Fund Name Amount You are Investing Share Class All Distributions
- -----------------------------------------------------------------------------------------------------------------------------------
A B C Reinvested In Cash
<S> <C> <C> <C> <C> <C> <C>
O Aurora $ [ ],[ ][ ][ ],[ ][ ][ ].[ ][ ] O O O O O
O Capital $ [ ],[ ][ ][ ],[ ][ ][ ].[ ][ ] O O O O O
O Emerging Growth $ [ ],[ ][ ][ ],[ ][ ][ ].[ ][ ] O O O O O
O Equity Income $ [ ],[ ][ ][ ],[ ][ ][ ].[ ][ ] O O O O O
O Equity Investment $ [ ],[ ][ ][ ],[ ][ ][ ].[ ][ ] O O O O O
O Global Resources $ [ ],[ ][ ][ ],[ ][ ][ ].[ ][ ] O O O O O
O Government Income $ [ ],[ ][ ][ ],[ ][ ][ ].[ ][ ] O O O O O
O Growth $ [ ],[ ][ ][ ],[ ][ ][ ].[ ][ ] O O O O O
O High Income $ [ ],[ ][ ][ ],[ ][ ][ ].[ ][ ] O O O O O
O International Equity $ [ ],[ ][ ][ ],[ ][ ][ ].[ ][ ] O O O O O
O Investment Trust $ [ ],[ ][ ][ ],[ ][ ][ ].[ ][ ] O O O O O
O Managed Assets $ [ ],[ ][ ][ ],[ ][ ][ ].[ ][ ] O O O O O
O Money Market $ [ ],[ ][ ][ ],[ ][ ][ ].[ ][ ] Class E only O O
O New York Tax-Free $ [ ],[ ][ ][ ],[ ][ ][ ].[ ][ ] O O O O O
O Strategic Income $ [ ],[ ][ ][ ],[ ][ ][ ].[ ][ ] O O O O O
O Tax-Exempt $ [ ],[ ][ ][ ],[ ][ ][ ].[ ][ ] O O O O O
O Other: $ [ ],[ ][ ][ ],[ ][ ][ ].[ ][ ] O O O O O
</TABLE>
This investment is being made:
O by mail - make check payable to State Street Research Funds
O by Federal Funds Wire; the control number is:
[ ][ ][ ][ ][ ][ ][ ][ ][ ][ ]
O through a dealer; the wire order confirmation number is:
[ ][ ][ ][ ][ ][ ][ ][ ][ ][ ]
4 Options for Reducing Sales Charges
- --------------------------------------------------------------------------------
I wish to apply for reduced Class A sales charges through:
O Right of Accumulation
________________________________________________
When calculating my sales charges for this investment, please include the
assets in the following accounts owned by me, my family members or other
designated persons:
[ ][ ][ ][ ][ ][ ][ ][ ][ ][ ] [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ]
Account number Account number
[ ][ ][ ][ ][ ][ ][ ][ ][ ][ ] [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ]
Account number Account number
[ ][ ][ ][ ][ ][ ][ ][ ][ ][ ] [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ]
Account number Account number
[ ][ ][ ][ ][ ][ ][ ][ ][ ][ ] [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ]
Account number Account number
O Letter of Intent
________________________________________________
I plan to invest, without obligation, a total of at least the following
amount in eligible funds over the next 13 months:
O $100,000 O $250,000 O $500,000 O $1 Million
O Please include investments made within the past 90 days in these accounts:
[ ][ ][ ][ ][ ][ ][ ][ ][ ][ ] [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ]
Account number Account number
[ ][ ][ ][ ][ ][ ][ ][ ][ ][ ] [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ]
Account number Account number
[ ][ ][ ][ ][ ][ ][ ][ ][ ][ ] [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ]
Account number Account number
[ ][ ][ ][ ][ ][ ][ ][ ][ ][ ] [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ]
Account number Account number
<PAGE>
5 Telephone Exchanges / Redemptions
- --------------------------------------------------------------------------------
* NOTE: You automatically receive these privileges unless you
decline them.
* See terms and conditions for telephone requests in current prospectus(es).
* Not available for certificate shares.
Telephone Exchange Privilege
____________________________________________________
Allows you or your dealer to request exchanges into other State Street
Research funds (and assumes you have read the relevant prospectuses).
O I DO NOT want this privilege on my account.
Initial here
Telephone Redemption Privilege
_____________________________________________________
Allows you (but not your dealer) to phone requests to sell shares, with the
proceeds sent to the address of record.
O I DO NOT want this privilege on my account.
Initial here
6 Transfers To / From Your Bank
- --------------------------------------------------------------------------------
* Convenient services to help you buy or sell fund shares.
* Be sure to attach a deposit slip or voided, unsigned check
depending on the service(s) you are requesting.
I would like to request one or more of the following service(s):
O Investamatic
________________________________________________________
Makes periodic investments in the State Street Research fund of your
choice. I authorize automatic withdrawals from the bank account
specified at the bottom of the page. I request these withdrawals to
occur: O 5th or O 20th or O 5th and 20th of a month. O every month on
the __________________ O every quarter,
$[ ][ ][ ],[ ][ ][ ].[ ][ ]
Investment amount ($50 minimum) Fund
[ ][ ][ ][ ][ ][ ][ ][ ][ ][ ]
Account number (if existing account)
$[ ][ ][ ],[ ][ ][ ].[ ][ ]
Investment amount ($50 minimum) Fund
[ ][ ][ ][ ][ ][ ][ ][ ][ ][ ]
Account number (if existing account)
O EZ Trader
_________________________________________________________
Allows you to move money between your fund account and bank account by
calling State Street Research. NOTE: Your bank must be a member of the
Automated Clearing House (ACH) system.
O Wire Redemption Capability
__________________________________________________________
Lets you designate a bank account to receive proceeds by wire when you
sell State Street Research shares.
Bank Account Information
- ------------------------------------------------------------------------------
Please establish the service(s) between my fund account and my:
O Checking account [voided, unsigned check attached]
O NOW / money market / savings account [deposit slip attached]
- ---------------------------------------------------
Bank name
- ---------------------------------------------------
Bank address
- ---------------------------------------------------
City
[ ][ ] [ ][ ][ ][ ][ ]-[ ][ ][ ][ ]
State Zip
[ ][ ][ ][ ][ ][ ][ ][ ][ ]
Bank routing number
[ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ]
Bank account number
- ---------------------------------------------------------------
Name of one bank account holder, exactly as on bank statements
- ---------------------------------------------------------------
Name of second bank account holder, if any
- ---------------------------------------------------------------
Signature of one bank account holder, exactly as on bank statements
- ---------------------------------------------------------------
Signature of of second bank account holder, if any
7 Your Signature
- --------------------------------------------------------------------------------
[graphic of a pen]
* All owners listed in Section 1 need to sign this application.
* Please note that the certification below and the provision of your
federal tax identification number are the only portions of this
application for which the IRS requires your consent.
I acknowledge that I:
* have received current prospectus(es) for all funds in which I am
investing.
* accept the terms of investment described in the prospectus(es) and
this application.
* understand that these same terms will also apply to all shares obtained
by exchange.
* accept responsibility for unauthorized telephone instructions unless the
fund's agents are negligent or unless I declined the privileges in Section
5.
I certify, under penalties of perjury, that:
* (1) the number shown on this form is my correct taxpayer identification
number (or I am waiting for a number to be issued to me), and (2) I am not
subject to backup withholding because (a) I am exempt from backup
withholding, or (b) I have not been notified by the Internal Revenue Service
that I am subject to backup withholding as a result of a failure to report
all interest or dividends, or (c) the IRS has notified me that I am no
longer subject to backup withholding.
- ---------------------------------------------------------------
Your signature exactly as your name appears in Section 1
- ---------------------------------------------------------------
Signature of joint owner (if any) exactly as name appears in Section 1
Date: [ ][ ]/[ ][ ]/[ ][ ]
[month / day / year]
Date: [ ][ ]/[ ][ ]/[ ][ ]
[month / day / year]
<PAGE>
8 Signature Guarantee
- --------------------------------------------------------------------------------
* If you are investing directly, have Part I completed; if not,
have your dealer fill out Part II.
A - For Direct Investments
_________________________________________________
- -----------------------------------------------------
Name of bank or other guarantor
- -----------------------------------------------------
Street address
- -----------------------------------------------------
City
[ ][ ] [ ][ ][ ][ ][ ]-[ ][ ][ ][ ]
State Zip
* The bank or guarantor guarantees the owner's legal capacity and all
signatures on this application and on related investment checks and
instructions, including the Additional Services Application.
- --------------------------------------------------------------
Signature of bank's or guarantor's authorized representative
Date: [ ][ ]/[ ][ ]/[ ][ ]
[month / day / year]
B - For Investments Through a Dealer
_______________________________________________________
- -----------------------------------------------------
Dealer name
- -----------------------------------------------------
Home office address
- -----------------------------------------------------
City
[ ][ ] [ ][ ][ ][ ][ ]-[ ][ ][ ][ ]
State Zip
- -----------------------------------------------------
Branch office address
- -----------------------------------------------------
City
[ ][ ] [ ][ ][ ][ ][ ]-[ ][ ][ ][ ]
State Zip
[ ][ ][ ]-[ ][ ][ ]-[ ][ ][ ][ ]
Branch office telephone number
The dealer:
* agrees to the terms of the current prospectus(es), application and
current dealer agreement, which is included by reference.
* represents that it has given the owner(s) all relevant prospectus(es).
* represents that it has completed this application according to instructions
from the owner(s).
* will indemnify the fund, its advisor, distributor or other agents from
any losses resulting from these instructions.
* guarantees the owner's legal capacity and all signatures on this
application and on related investment checks and instructions including the
Additional Services Application.
[ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ]
Registered Representative
[ ][ ][ ][ ][ ][ ][ ][ ]
Registered Representative number
- -----------------------------------------------------
Signature of authorized officer of dealer
[FRONT SIDE OF CARD] Exhibit 19(b)
STATE STREET RESEARCH FUNDS
- --------------------------------------------------------------------------------
Additional Services Application
[bullet] Use a pen. Please print in CAPITAL LETTERS.
[bullet] Use this application to add any of the features below to a new or
existing State Street Research account.
[bullet] When providing bank information, be sure to attach a deposit slip or
voided, unsigned check
[bullet] Be sure to sign this application.
[bullet] If you are submitting this application with a New Account Application,
you don't need to duplicate any bank information or signature
guarantees that are included with that application.
A Name
- --------------------------------------------------------------------------------
|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Name (as it appears on the account)
|_|_|_|_|_|_|_|_|_| |_|_|_|-|_|_|_|-|_|_|_|_|
Federal tax identification or Daytime phone number
Social Security number
B Regular Transfers and Redemptions
- --------------------------------------------------------------------------------
[bullet] Not available on retirement plan accounts.
[bullet] Choose one option only. To add different options to different accounts,
please fill out a separate application.
[bullet] Be sure to attach a deposit slip or voided, unsigned check depending
on the service you are requesting.
[] I request the following automatic redemptions or transfers:
[] Please deposit my income dividends directly into my bank account.
[] Please deposit my income dividends and capital gains distribtions directly
into my bank account.
[] Systematic Withdrawal Plan: Please redeem $|_|_|,|_|_|_|.00 ($50 minimum)
from my fund account: [ ] every month [ ] every 3 months
[ ] every 6 months [ ] every 12 months
I would like these redemptions to begin in month number |_|_|.
I would like the money [ ] deposited directly into my bank account
[ ] sent to me by check
[ ] sent by check to the following payee:
|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Payee's name
|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Payee's street address/P.O. Box
|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| |_|_| |_|_|_|_|_|-|_|_|_|_|
City State Zip
[] Please make these redemptions or transfers from my accounts in each of the
following State Street Research funds:
|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| |_|_|_|_|_|_|_|_|_|_|_|_|_|
Fund name Account number
(if existing account)
|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| |_|_|_|_|_|_|_|_|_|_|_|_|_|
Fund name Account number
(if existing account)
[] Please direct any bank deposits to my:
[ ] Checking account (voided, unsigned check attached)
[ ] NOW / money market / savings account (deposit slip attached)
|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Bank name
|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Bank address
|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| |_|_| |_|_|_|_|_|-|_|_|_|_|
City State Zip
|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| |_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Bank routing number Bank account number
|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| ____________________________________
Name of one bank account holder, Signature
exactly as on bank statements
|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| ____________________________________
Name of second bank account holder, Signature
if any
C Checkwriting
- --------------------------------------------------------------------------------
[bullet] Available on some funds' Class A shares and on Money Market Fund
Class E shares.
[bullet] For corporate and other accounts, include the appropriate resolution
forms.
[bullet] Please do not detach the perforated card.
[] I request State Street Bank and Trust Company to provide me with
checkwriting on these funds:
|_|_|_|_|_|_|_|_|_|_|
Account number (if existing account)
|_|_|_|_|_|_|_|_|_|_|
Account number (if existing account)
[ ] Government Income
[ ] High Income
[ ] Money Market
[ ] New York Tax-Free
[ ] Strategic Income
[ ] Tax-Exempt
|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Your name
|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Address
|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
City
|_|_| |_|_|_|_|_|_|_|_|_|_|
State Zip
|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Federal tax identification or Social Security number
_______________________________________________________
Your signature exactly as your name appears on your new
account application or your fund statements
(including any capacity)
|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Name of joint owner, if any
_______________________________________________________
Signature of joint owner exactly as name appears on
fund statements (including any capacity)
Number of signatures you with to be required on a check:
See reverse side of card for additional terms and conditions.
[REVERSE SIDE OF CARD]
D Dividend Allocation Plan (DAP)
- --------------------------------------------------------------------------------
[] Please collect my dividends and distributions from this fund/account...
|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Fund name
|_|_|_|_|_|_|_|_|_|_|_|_|
Account number (if existing account)
[]...and invest them in this fund/account (new accounts must meet initial
investment minimums):
|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Fund name
|_|_|_|_|_|_|_|_|_|_|_|_|
Account number (if existing account)
E Signature Guarantee
- --------------------------------------------------------------------------------
[bullet] If you are investing directly, have Part I completed; if not, have your
dealer fill out Part II.
[bullet] If you are submitting this application with a New Account Application,
you don't need to duplicate the signature guarantee if it is included
with that application.
[] I - For Direct Investments
|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Name of bank or other guarantor
|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Street address
|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| |_|_| |_|_|_|_|_|-|_|_|_|_|
City State Zip
The bank or guarantor guarantees the owner's legal capacity and all signatures
on this application and on related investment checks and instructions.
_______________________________________ |_|_| / |_|_| / |_|_|
Signature of bank's or guarantor's Date [month/day/year/
authorized representative
[] II - For Investments Through a Dealer
|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Dealer Name
|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Home office address
|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| |_|_| |_|_|_|_|_|-|_|_|_|_|
City State Zip
|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| |_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Branch office address City
|_|_| |_|_|_|_|_|-|_|_|_|_| |_|_|_|-|_|_|_|-|_|_|_|_|
State Zip Branch office telephone number
The dealer:
[bullet] Agrees to the terms of the current prospectus(es) and current dealer
agreement, which is included by reference.
[bullet] represents that it has given the owner(s) the relevant prospectus(es).
[bullet] represents that it has completed this application according to
instructions from the owner(s).
[bullet] will indemnify the fund, its adviser, distributor or other agents from
any losses resulting from these instructions.
[bullet] guarantees the owner's legal capacity and all signatures on this
application and on related investment checks and instructions.
|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| |_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Registered Representative Registered Representative number
_________________________________________ |_|_| / |_|_| / |_|_|
Signature of authorized officer or dealer Date [month/day/year/
F Your Signature
- --------------------------------------------------------------------------------
[bullet] All owners whose names are on the account [graphic of a pen]
need to sign this application.
I acknowledge that I:
[bullet] am authorizing the additional services described above.
[bullet] have received current prospectus(es) for all funds in which I am
investing.
[bullet] have the right to cancel any service at any time by writing to
State Street Research.
___________________________________________
Your signature exactly as your name appears
on your New Account Application or your
fund statements
___________________________________________
Signature of joint owner (if any) exactly
as anem appears on fund application or
statements
|_|_| / |_|_| / |_|_|
Date [month/day/year/
By signing this form, I agree to all of the provisions and applicable rules
under the Massachusetts Uniform Commercial Code and to any conditions on
redeeming shares from the State Street Research funds.
I also agree that:
[bullet] this form applies to any other identically registered State Street
Research fund account with the checkwriting privilege I establish
later.
[bullet] if I am subject to IRS backup withholding, I may write checks only on
money fund accounts;
[bullet] State Street Bank and Trust Company and the fund reserve the right to
terminate my checkwriting privelege.
I represent that the signatures are authentic, and, for organizations, I have
submitted a certified resolution authorizing the individuals with legal capacity
to sign and act on behlaf of the organization.
I understand that I am authorizing the bank to instruct State Street Research
to sell sufficient shares in my mutual fund account to honor the check.
[Logo: State Street Research] State Street Research
Mail this application, along with any other required documents to:
State Street Research Funds
P.O. Box 8408, Boston, MA 02266-8408.
Questions? Call 1-800-562-0032.
SSR-759E-1097
State Street Reserach is not affiliated with State Street Bank and Trust
Company.
Exhibit 19(c)
[STATE STREET RESEARCH LOGO] [METLIFE SECURITIES LOGO]
MUTUAL FUND ACCOUNT APPLICATION
Mail this application to MetLife Securities, Inc., P.O. Box 30421, Tampa, FL
33630
[ ] New Application [ ] Change-Account #____________________________
Type of Account (PLEASE PRINT FULL NAME(S) CONSISTENT WITH YOUR SIGNATURE(S) IN
SECTION 6.)
<TABLE>
<S> <C> <C>
[ ] Individual-complete (a) only [ ] Joint Tenant-complete (a & b) only [ ] Gift to a Minor-complete (c) only
[ ] Trust(1)-complete (d) only [ ] Corporation(1)-complete (e) only [ ] Partnership/Other Entity-complete (e) only
</TABLE>
Note: If the investment is to be used for an Individual Retirement Account
(IRA), a separate IRA application must be used.
(1)Call 1-800-638-8378 for additional forms.
Do you have any other mutual fund accounts with State Street Research?
[ ] Yes [ ] No
Individual or Joint Tenant
a _____________________________________________________________-______-_________
Name of Investor Social Security Number
b ______________________________________________________________________________
Name(s) of Joint Tenant(s)
Gift to a Minor
c _____________________________________ as custodian for _____________ under the
Name of Custodian (one only) Name of Minor (one only)
___________________________ "Uniform Gifts to Minors Act" _____-______-_________
Minor's State of Residence Minor's Social Security Number
Trust Account
d ______________________________________________________________________________
Trustee(s) Name(s)
_______________________________________________________________-______-_________
Name and Date of Trust Agreement Tax Identification
Number
Corporation, Partnership or Other Entity (Please include corporate resolution.)
e ______________________________________________________________________________
Name of Corporation or Other Entity
________________________________________________________________________________
Type of Business (specify corporation, Tax Identification Number
partnership, estate, guardian, etc.)
2 Your Mailing Address (PLEASE PRINT.)
( )
________________________________________________________________________________
Street Address Home Telephone Number
( )
________________________________________________________________________________
City State ZIP Business Telephone
Number
Residency [ ] U.S. (State _______________) [ ] Other(2) __________________
Specify Country
(2)Call 1-800-638-8378 for additional forms.
3 Fund Selection(s) and Distribution Option(s) (Choose only one distribution
option per Fund; see Fund prospectus for minimum initial investment
requirements.)
[ ] By Mail-Make check payable to "State Street Research"
[ ] By Federal Funds Wire
<TABLE>
<CAPTION>
Fund Name Class Designation(3) Amount Distribution Option
- ---------------------------------------------------------------------------------------------------------------------
Dividends & Dividends in Dividends & Dividend
Capital Gains Cash; Capital Capital Gains Allocation
A B(4) Reinvested Gains Reinvested(5) in Cash Plan (DAP)(6)
<S> <C> <C> <C> <C> <C> <C>
_________________ [ ] [ ] $_____ [ ] [ ] [ ] [ ]
_________________ [ ] [ ] $_____ [ ] [ ] [ ] [ ]
_________________ [ ] [ ] $_____ [ ] [ ] [ ] [ ]
_________________ [ ] [ ] $_____ [ ] [ ] [ ] [ ]
</TABLE>
(3)All Money Market Fund investments will purchase Class E shares. Be sure to
designate Class A or B shares for Money Market Fund DAP allocations.
(4)For purchase of Class B shares of more than $250,000, I hereby acknowledge
that I am aware of the reduced front-end sales charges available to me for the
purchase of Class A shares, and have chosen to purchase Class B shares. I am
aware that Class B shares have higher asset-based charges than Class A shares
for the first eight years.
(5)Does not apply to Money Market Fund.
(6)Dividend Allocation Plan: The Transfer Agent is authorized to invest all
dividends and distributions from________________________________________________
Fund Name
in the following Eligible Fund:_________________________________________________
Fund Name (Fund must meet Account
minimum investment requirements) Number (if
existing
account)
Authorization of Dividend Allocation Plan constitutes an acknowledgment that the
shareholder has received the current prospectus of the Fund to be acquired.
Except for Money Market Fund Class E, DAP must be allocated to same class
designation.
<PAGE>
4 Reduced Sales Charges (Applies to Class A shares only)
[ ] Right of Accumulation (ROA): I apply for Right of Accumulation reduced sales
charges subject to the Transfer Agent's confirmation of the following holdings
of certain designated persons, e.g. family members, in the Eligible Funds:
________________________________________________________________________________
Name on Account Account Number
________________________________________________________________________________
Name on Account Account Number
[ ] Letter of Intent (LOI): Although I am not obligated to purchase and the
Funds are not obligated to sell, I intend to invest over a 13-month period
beginning _______________, 19__ (purchase date not more than 90 days prior to
this letter) at least an aggregate of
[ ] $100,000 [ ] $250,000 [ ] $500,000 [ ] $1,000,000 of Eligible Funds.
5 Optional Shareholder Services
Your Bank Account (You must complete this section if you request Section A, B, C
or D below.)
Type of Bank Account: [ ] Checking [ ] NOW or Money Market
________________________________________________________________________________
Account Title (print exactly as it Bank Routing Number
appears on bank records)
________________________________________________________________________________
Bank Account Number Bank Name
________________________________________________________________________________
Bank Address City State ZIP
________________________________________________________________________________
Depositor's Signature(s) (exactly as it Date
appears on bank records)
________________________________________________________________________________
Depositor's Address City State ZIP
YOU MUST ATTACH A BLANK CHECK MARKED "VOID."
A Telephone Redemption and Exchange Privileges (Service available only for
shares held on deposit with Transfer Agent)
None of the Transfer Agent, the Fund, any other Eligible Funds, State Street
Research Shareholder Services, the Investment Manager or the Distributor will be
liable for any loss, injury, damage or expense as a result of acting upon, and
will not be responsible for the authenticity of, any telephone instructions. I
understand that all telephone calls are tape recorded. My liability shall be
subject to the use of reasonable procedures to confirm that instructions
communicated by telephone are genuine.
Telephone Exchange By Shareholder OR DEALER
The Transfer Agent may effect exchanges for my account according to telephone
instructions FROM ME OR MY DEALER as set forth in the Prospectus, and may
register the shares of the fund to be acquired exactly the same as my existing
account. Authorizing an exchange constitutes an acknowledgment that the
shareholder has received the current prospectus of the fund to be acquired. The
account will automatically have this privilege unless it is expressly declined
by providing your initials in the space below.
I DO NOT WANT THE TELEPHONE EXCHANGE PRIVILEGE. _____ (Initial here.)
Telephone Redemption By Shareholder Only
1. Proceeds to Shareholder's Address of Record. The Transfer Agent may effect
redemptions of shares from my account according to telephone instructions from
me, as set forth in the Prospectus, and send the proceeds to my address of
record. The account will automatically have this privilege unless it is
expressly declined by providing your initials in the space below.
I DO NOT WANT THE TELEPHONE REDEMPTION PRIVILEGE (to address of record).
_____ (Initial here.)
2. Proceeds to Bank Designated by Shareholder. The Telephone Redemption
Privilege (to bank designated by shareholder) is not provided automatically;
please check the box below if you want this Privilege for the account. ATTACH A
BLANK CHECK MARKED "VOID" AND FILL OUT "YOUR BANK ACCOUNT" SECTION.
The Transfer Agent may effect redemptions of shares from my account according to
telephone instructions from me, as set forth in the Prospectus, and send the
proceeds to the bank named in "Your Bank Account." [ ] (Check here.)
<PAGE>
B Investamatic Check Program (YOU MUST ATTACH A BLANK CHECK MARKED "VOID.")
I hereby request and authorize the bank named in "Your Bank Account" section to
pay and charge checks drawn on, or debits against, my account initiated by and
payable to the order of the mutual fund transfer agent designated by the
Distributor. I agree that the named Bank's rights in respect to each such check
or debit shall be the same as if it were a check drawn on or debit against my
account authorized personally by me. This authority is to remain in effect until
revoked by me in writing, and until the named Bank actually receives such
notice, I agree that the named Bank shall be fully protected in honoring any
such check or debit authorization. I further agree that if any check or debit
authorization be dishonored, whether with or without cause and whether
intentionally or inadvertently, the named Bank shall be under no liability
whatsoever, unless the nonpayment is because of insufficient funds. I understand
that this Program may be revoked by the Transfer Agent or the Distributor
without prior notice if any check is not paid upon presentation, and that this
Program may be discontinued by the Distributor, the Transfer Agent or me upon
thirty (30) business days' notice prior to the due date of any deposit.
$
________________________________________________________________________________
Fund Name Class Designation Amount ($50 minimum) Account Number
$
________________________________________________________________________________
Fund Name Class Designation Amount ($50 minimum) Account Number
_____________________________________
Total Amount of Investment: $______ Account Registration (exactly as it
appears on Fund records)
[ ] Monthly Investment Date: [ ] 5th or [ ] 20th If you do not choose a date,
[ ] Quarterly Investment Date: [ ] 5th or [ ] 20th the 5th will be chosen
automatically.
C Automatic Bank Connection (ABC) Not available for retirement plan accounts.
YOU MUST ATTACH A BLANK CHECK MARKED "VOID."
[ ] I authorize the Transfer Agent to liquidate $______________ (minimum-$50)
from my fund account beginning the month of to provide [ ] monthly,
[ ] quarterly, [ ] semiannual or [ ] annual payments. I would like the following
payment to be deposited directly into the bank account named in "Your Bank
Account" section. (Choose only one.)
[ ] Income dividends only [ ] Income dividends and capital gains
[ ] Systematic Withdrawal Plan payments (see below)
________________________________________________________________________________
Fund Name Class Designation
________________________________________________________________________________
Fund Name Class Designation
I hereby authorize the Fund and the Transfer Agent to effect the deposit of the
above indicated items by initiating credit entries to my account at the bank
named in "Your Bank Account" section. The named Bank shall not be responsible
for the correctness of the items, and the Transfer Agent is authorized to
correct and adjust any incorrect items to my bank account. This authorization
may be terminated at any time by written notification to the Fund, the Transfer
Agent and the Bank.
D Systematic Withdrawal Plan (SWP) Not available for retirement plan accounts.
See the prospectus for minimum account size and maximum withdrawal amounts.
YOU MUST ATTACH A BLANK CHECK MARKED "VOID."
[ ] I authorize the Transfer Agent to liquidate shares in and withdraw cash
(minimum-$50) from my fund account beginning the month of ____________________
to provide [ ] monthly, [ ] quarterly, [ ] semiannual or [ ] annual Systematic
Withdrawal Plan (SWP) payments in the amount of $_________________ to [ ] me
[ ] the bank named in "Your Bank Account" section, or [ ] the following payee.
(Note: If you authorize a SWP, you may not receive dividend or capital gain
distributions in cash.)
________________________________________________________________________________
Name of Payee
________________________________________________________________________________
Street Address City State ZIP
________________________________________________________________________________
Fund Name Class Designation
________________________________________________________________________________
Fund Name Class Designation
E Checkwriting Privilege
(Available for Class A shares and Money Market
Fund Class E shares only)
[ ] I request the checkwriting feature and have
completed the signature card below.
_______________________________________________
Account Number (if existing account)
_______________________________________________
Account Number (if existing account)
Signature Card Complete and sign this card and return it with your application
and investment. Do not detach.
Check applicable Fund(s) TO: State Street Bank and Trust Company ("Bank")
[ ] Money Market, Class E ________________________________________________
[ ] High Income Name (please print)
[ ] Tax-Exempt ________________________________________________
[ ] Government Income Name (please print)
[ ] NY Tax-Free ________________________________________________
[ ] Strategic Income Address City State ZIP
________________________________________________
Signature (exactly as it appears in the
Application, including any capacity)
________________________________________________
Signature (exactly as it appears in the
Application, including any capacity)
________________________________________________
Indicate the number of signatures required
______-_________________________________________
Tax Identification Number
Corporate and other accounts must include appropriate resolution forms. In
signing this signature card, the signator(s) signifies his/her or their
agreement to be subject to the rules and regulations of State Street Bank and
Trust Company pertaining thereto, as amended from time to time, and subject to
the conditions printed on the reverse side.
<PAGE>
MetLife Securities, Inc. Customer Profile
1
________________________________________________________________________________
Client's Name (or minor if U.G.M.A.) Age Social Security Number
________________________________________________________________________________
Joint Tenant Name (if any, or Age Social Security Number
custodian if U.G.M.A.)
Occupation ______________________ State of Residence ______________________
Name/Address of Employer _______________________________________________________
Is client an associated person of a broker/dealer? [ ] Yes [ ] No
If yes, furnish name and address _______________________________________________
2 Client's Estimated Annual Income (Not including income from this investment)
(N/A for UGMA, Trust, Partnership or Corp.)
[ ] $0-9,999 [ ] $20-39,999 [ ] $60-79,999 [ ] $100,000-199,999
[ ] $10-19,999 [ ] $40-59,999 [ ] $80-99,999 [ ] $200,000+
3 Savings and Investments (Exclusive of personal residence, home furnishings,
personal automobiles, and the amount of this investment) (N/A for UGMA, Trust,
Partnership or Corp.)
[ ] $0-9,999 [ ] $20-39,999 [ ] $60-79,999 [ ] $100,000-199,999 [ ] $400,000+
[ ] $10-19,999 [ ] $40-59,999 [ ] $80-99,999 [ ] $200,000-399,999
4 Net Worth (Assets minus liabilities exclusive of assets and liabilities
relating to personal residence, home furnishings and automobiles) (N/A for
UGMA, Trust, Partnership or Corp.)
[ ] $0-9,999 [ ] $20-39,999 [ ] $60-79,999 [ ] $100,000-199,999 [ ] $400,000+
[ ] $10-19,999 [ ] $40-59,999 [ ] $80-99,999 [ ] $200,000-399,999
<TABLE>
<CAPTION>
5 Main Investment Objective (select one) Secondary Investment Objective (optional)
<S> <C> <C> <C> <C> <C>
[ ] Aggressive Growth [ ] Growth & Income [ ] Tax Advantages [ ] Aggressive Growth [ ] Growth & Income [ ] Tax Advantages
[ ] Growth [ ] Current Income [ ] Growth [ ] Current Income
</TABLE>
<TABLE>
<CAPTION>
6 Source of Funds for This Investment
<S> <C> <C>
[ ] CD (Certificate of Deposit) [ ] Savings [ ] Money Market Fund
[ ] Surrender Life/Annuity Contract [ ] Rollover/Transfer of Pension Assets [ ] Another MetLife Policy, Account or Contract
[ ] Discretionary Income [ ] Loan [ ] Other ___________________________________
</TABLE>
7 This account was: [ ] Solicited [ ] Unsolicited
8 Tax Status of These Funds: [ ] Qualified [ ] Non-Qualified
9 Prior Investment Experience: Stocks ___ yrs. Bonds ___ yrs.
(complete all that apply) Mutual Funds ___ yrs. Margin ___ yrs.
Limited Partnerships ___ yrs. Options ___ yrs.
Other __________________ None ___
Investor Receipt and Arbitration Agreement
1. Arbitration
(i) Arbitration is final and binding on the parties.
(ii) The parties are waiving their right to seek remedies in court, including
the right to jury trial.
(iii) Pre-arbitration discovery is generally more limited than and different
from court proceedings.
(iv) The arbitrators' award is not required to include factual findings or
legal reasoning and any party's right to appeal or to seek modification of
rulings by the arbitrators is strictly limited.
(v) The panel of arbitrators will typically include a minority of arbitrators
who were or are affiliated with the securities industry.
(vi) No person shall bring a putative or certified class action to
arbitration, nor seek to enforce any pre-dispute arbitration agreement
against any person who has initiated in court a putative class action; or who
is a member of a putative class who has not opted out of the class with
respect to any claims encompassed by the putative class action until: (i) the
class certification is denied; or (ii) the class is decertified; or (iii) the
customer is excluded from the class by the court. Such forbearance to enforce
an agreement to arbitrate shall not constitute a waiver of any rights under
this agreement except to the extent stated herein.
2. MetLife Securities, Inc. (hereinafter "MSI") and the purchaser of the
shares, who is the signatory below (hereinafter the "Customer"), agree that
any controversy between MSI, its employees, directors, agents, officers or
affiliates and the Customer arising out of or relating to any transactions
between such parties shall be determined by arbitration. Any arbitration
pursuant to this agreement shall be conducted before, and under the rules of,
the National Association of Securities Dealers, Inc. Judgment upon the award
of the arbitrators may be entered in any federal or state court having
jurisdiction.
3. This agreement and any arbitration hereunder shall be governed and
construed in accordance with the laws of the State of New York, United States
of America, including New York procedural and substantive arbitration laws
and rules, without giving effect to conflicts of law principles.
The predispute arbitration agreement located immediately above is accepted and
agreed to. I have also received the current prospectus of the fund and have
given a check in the amount of $___________________ on this, the ____________
day of ________________ 19__
_______________________________________ ________________________________________
Customer Signature (exactly as your Registered Representative's Signature
name appears in Section 1)
/s/ Elaine S. Stevenson
_______________________________________ ________________________________________
Customer Signature MetLife Securities, Inc.; by:
Elaine S. Stevenson, President
_______________________________________ ________________________________________
Capacity
<PAGE>
6 Your Signature (All registered shareholders must sign.)
The undersigned confirms that all the information, instructions and agreements
set forth hereon shall apply to the account, and if applicable, shall also apply
to any other fund account with shares acquired upon exchange of shares of the
Fund.
Under penalties of perjury, I certify that (1) the number shown on this form is
my correct taxpayer identification number (or I am waiting for a number to be
issued to me), and (2) I am not subject to backup withholding because (a) I am
exempt from backup withholding, or (b) I have not been notified by the Internal
Revenue Service that I am subject to backup withholding as a result of a failure
to report all interest or dividends, or (c) the IRS has notified me that I am no
longer subject to backup withholding.
Certification instructions: You must cross out item (2) above if you have been
notified by the IRS that you are currently subject to backup withholding because
of underreporting interest or dividends on your tax return.
1. Arbitration
(i) Arbitration is final and binding on the parties.
(ii) The parties are waiving their right to seek remedies in court, including
the right to jury trial.
(iii) Pre-arbitration discovery is generally more limited than and different
from court proceedings.
(iv) The arbitrators' award is not required to include factual findings or
legal reasoning and any party's right to appeal or to seek modification of
rulings by the arbitrators is strictly limited.
(v) The panel of arbitrators will typically include a minority of arbitrators
who were or are affiliated with the securities industry.
(vi) No person shall bring a putative or certified class action to
arbitration, nor seek to enforce any pre-dispute arbitration agreement
against any person who has initiated in court a putative class action; or who
is a member of a putative class who has not opted out of the class with
respect to any claims encompassed by the putative class action until (i) the
class certification is denied; or (ii) the class is decertified; or (iii) the
customer is excluded from the class by the court. Such forbearance to enforce
an agreement to arbitrate shall not constitute a waiver of any rights under
this agreement except to the extent stated herein.
2. MetLife Securities, Inc. (hereinafter "MSI") and the purchaser of the shares,
who is the signatory below (hereinafter the "Customer"), agree that any
controversy between MSI, its employees, directors, agents, officers or
affiliates and the Customer arising out of or relating to any transactions
between such parties shall be determined by arbitration. Any arbitration
pursuant to this agreement shall be conducted before, and under the rules of,
the National Association of Securities Dealers, Inc. Judgment upon the award of
the arbitrators may be entered in any federal or state court having
jurisdiction.
3. This agreement and any arbitration hereunder shall be governed and construed
in accordance with the laws of the State of New York, United States of America,
including New York procedural and substantive arbitration laws and rules,
without giving effect to conflicts of law principles.
The predispute arbitration agreement located immediately above is accepted and
agreed to. I have also received the current prospectus of the fund and have
given a check in the amount of $_________________ on this, the ______________
day of ___________________________ 19__
The Internal Revenue Service does not require your consent to any provision of
this document other than the certification required to avoid backup withholding.
_______________________________________ ________________________________________
Customer Signature (exactly as your Registered Representative's Signature
name appears in Section 1)
/s/ Elaine S. Stevenson
_______________________________________ ________________________________________
Customer Signature MetLife Securities, Inc.;
by: Elaine S. Stevenson, President
_______________________________________
Capacity
7 Dealer Information and Signature Guarantee (For Dealer use only)
The Dealer agrees to all applicable provisions in this application and in the
Prospectus, guarantees the signature and legal capacity of the shareholder, and
represents that it has provided a current Prospectus to the Applicant and that
the application is properly executed by a person authorized by the Dealer to
guarantee signatures. The Dealer warrants that this application is completed in
accordance with the shareholder's instructions and information and agrees to
indemnify the Fund, any other Eligible Funds, the Investment Manager, the
Distributor, State Street Research Shareholder Services and the Transfer Agent
for any loss or liability from acting or relying upon such instructions and
information. Signature(s) Guaranteed By
MetLife Securities, Inc.
_______________________________________ ________________________________________
Dealer Name Branch Office Number
P.O. Box 30421
_______________________________________ ________________________________________
Address of Home Office Address of Branch Office
Servicing Account
Tampa, FL 33630
_______________________________________ ________________________________________
City State ZIP City State ZIP
_______________________________________ ________________________________________
Authorized Signature of Dealer Registered Representative's
- Tampa, FL Name and Number
_______________________________________
Signature Guarantee
The payment of monies is authorized by the signature(s) on the reverse side.
If the shareholder's account with the Fund is joint, all checks drawn upon this
account must include the signatures of all persons named in the account, unless
the persons signing this card have indicated on the reverse side of this card
that the Bank is authorized to accept any one signature. Each person guarantees
the genuineness of the other's signature. Checks may not be for less than $500
or such other minimum or maximum amounts as may from time to time be established
by the Fund.
The Bank is hereby appointed agent by the person(s) signing this card (the
"Depositor(s)") and, as agent, is authorized and directed to present checks
drawn on this checking account to the Fund or its redemption agent as requests
to redeem shares of the Fund registered in the name of the Depositor(s) in the
amounts of such checks and to deposit the proceeds of such redemptions in this
checking account. The Bank shall be liable only for its own negligence.
Depositor(s) hereby authorize(s) the Fund or its redemption agent to honor
redemption requests presented in the above manner by the Bank. The Fund and its
redemption agent will not be liable for any loss, expense or cost arising out of
check redemptions. If shares of the Fund are purchased by check, redemption
proceeds will ordinarily be withheld until the Fund is reasonably assured that
payment has been collected on the check. The Bank has the right not to honor
checks in amounts exceeding the value of the depositor(s) shareholder account at
the time the check is presented for payment.
The Bank reserves the right to change, modify or terminate this checking account
at any time upon notification mailed to the address of record of the
Depositor(s).
The terms and conditions of the Distributor's currently effective Selected
Dealer Agreement are included by reference in this section. The Dealer
represents that it has a currently effective Selected Dealer Agreement with the
Distributor authorizing the Dealer to sell shares of the Fund and the Eligible
Funds, and that it may lawfully sell shares of the designated Fund(s) in the
state designated as the Applicant's address of record.
- -------------------------------
DO NOT COMPLETE
MSI - Tampa
Dealer #__________ ST _____
Rep #______________________
Rep Name __________________
- -------------------------------
CONTROL NUMBER: 3672-970214(0398)SSR-LD
ML-598E-297
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000093755
<NAME> STATE STREET RESEARCH MASTER INVESTMENT TRUST
<SERIES>
<NUMBER> 011
<NAME> STATE STREET RESEARCH INVESTMENT TRUST CLASS A
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 1,382,857,391
<INVESTMENTS-AT-VALUE> 1,939,415,873
<RECEIVABLES> 10,891,513
<ASSETS-OTHER> 18,304
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,950,325,690
<PAYABLE-FOR-SECURITIES> 94,451,742
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 9,981,314
<TOTAL-LIABILITIES> 104,433,056
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,249,701,947
<SHARES-COMMON-STOCK> 35,337,294
<SHARES-COMMON-PRIOR> 24,671,409
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 39,632,205
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 556,558,482
<NET-ASSETS> 1,845,892,634
<DIVIDEND-INCOME> 24,269,765
<INTEREST-INCOME> 3,263,149
<OTHER-INCOME> 0
<EXPENSES-NET> 13,920,939
<NET-INVESTMENT-INCOME> 13,611,975
<REALIZED-GAINS-CURRENT> 233,740,026
<APPREC-INCREASE-CURRENT> 153,903,428
<NET-CHANGE-FROM-OPS> 401,255,429
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2,789,737)
<DISTRIBUTIONS-OF-GAINS> (37,498,390)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 11,892,218
<NUMBER-OF-SHARES-REDEEMED> (4,933,408)
<SHARES-REINVESTED> 3,707,075
<NET-CHANGE-IN-ASSETS> 499,972,559
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5,717,422
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 13,920,939
<AVERAGE-NET-ASSETS> 1,651,200,338
<PER-SHARE-NAV-BEGIN> 9.07
<PER-SHARE-NII> 0.10
<PER-SHARE-GAIN-APPREC> 2.54
<PER-SHARE-DIVIDEND> (0.10)
<PER-SHARE-DISTRIBUTIONS> (1.20)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.41
<EXPENSE-RATIO> 0.76
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000034918
<NAME> STATE STREET RESEARCH MASTER INVESTMENT TRUST
<SERIES>
<NUMBER> 012
<NAME> STATE STREET RESEARCH INVESTMENT TRUST CLASS B
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 1,382,857,391
<INVESTMENTS-AT-VALUE> 1,939,415,873
<RECEIVABLES> 10,891,513
<ASSETS-OTHER> 18,304
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,950,325,690
<PAYABLE-FOR-SECURITIES> 94,451,742
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 9,981,314
<TOTAL-LIABILITIES> 104,433,056
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,249,701,947
<SHARES-COMMON-STOCK> 54,006,968
<SHARES-COMMON-PRIOR> 34,972,059
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 39,632,205
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 556,558,482
<NET-ASSETS> 1,845,892,634
<DIVIDEND-INCOME> 24,269,765
<INTEREST-INCOME> 3,263,149
<OTHER-INCOME> 0
<EXPENSES-NET> 13,920,939
<NET-INVESTMENT-INCOME> 13,611,975
<REALIZED-GAINS-CURRENT> 233,740,026
<APPREC-INCREASE-CURRENT> 153,903,428
<NET-CHANGE-FROM-OPS> 401,255,429
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (870,683)
<DISTRIBUTIONS-OF-GAINS> (56,883,383)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 19,674,761
<NUMBER-OF-SHARES-REDEEMED> (5,930,757)
<SHARES-REINVESTED> 5,290,905
<NET-CHANGE-IN-ASSETS> 499,972,559
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5,717,422
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 13,920,939
<AVERAGE-NET-ASSETS> 1,651,200,338
<PER-SHARE-NAV-BEGIN> 9.03
<PER-SHARE-NII> 0.02
<PER-SHARE-GAIN-APPREC> 2.51
<PER-SHARE-DIVIDEND> (0.02)
<PER-SHARE-DISTRIBUTIONS> (1.20)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.34
<EXPENSE-RATIO> 1.51
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000034918
<NAME> STATE STREET RESEARCH MASTER INVESTMENT TRUST
<SERIES>
<NUMBER> 014
<NAME> STATE STREET RESEARCH INVESTMNET TRUST CLASS C
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 1,382,857,391
<INVESTMENTS-AT-VALUE> 1,939,415,873
<RECEIVABLES> 10,891,513
<ASSETS-OTHER> 18,304
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,950,325,690
<PAYABLE-FOR-SECURITIES> 94,451,742
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 9,981,314
<TOTAL-LIABILITIES> 104,433,056
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,249,701,947
<SHARES-COMMON-STOCK> 3,497,034
<SHARES-COMMON-PRIOR> 2,833,901
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 39,632,205
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 556,558,482
<NET-ASSETS> 1,845,892,634
<DIVIDEND-INCOME> 24,269,765
<INTEREST-INCOME> 3,263,149
<OTHER-INCOME> 0
<EXPENSES-NET> 13,920,939
<NET-INVESTMENT-INCOME> 13,611,975
<REALIZED-GAINS-CURRENT> 233,740,026
<APPREC-INCREASE-CURRENT> 153,903,428
<NET-CHANGE-FROM-OPS> 401,255,429
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (52,743)
<DISTRIBUTIONS-OF-GAINS> (3,712,939)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,100,245
<NUMBER-OF-SHARES-REDEEMED> (775,363)
<SHARES-REINVESTED> 338,251
<NET-CHANGE-IN-ASSETS> 499,972,559
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5,717,422
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 13,920,939
<AVERAGE-NET-ASSETS> 1,651,200,338
<PER-SHARE-NAV-BEGIN> 9.05
<PER-SHARE-NII> 0.02
<PER-SHARE-GAIN-APPREC> 2.53
<PER-SHARE-DIVIDEND> (0.02)
<PER-SHARE-DISTRIBUTIONS> (1.20)
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