-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AVE8ARkqLjhcPqwmZIpD0pj6vZ1fQwoi+CrHeEmiRVGvVeVkSuJEcT7p9c8IKN+1 ekzXfhrVn4eWxNsD6Y3zZw== 0000912057-01-525543.txt : 20010730 0000912057-01-525543.hdr.sgml : 20010730 ACCESSION NUMBER: 0000912057-01-525543 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20010727 EFFECTIVENESS DATE: 20010727 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STATE STREET RESEARCH MONEY MARKET TRUST CENTRAL INDEX KEY: 0000768530 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: SEC FILE NUMBER: 002-97506 FILM NUMBER: 1690754 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: SEC FILE NUMBER: 811-04295 FILM NUMBER: 1690755 BUSINESS ADDRESS: STREET 1: ONE FINANCIAL CTR RM 3800 CITY: BOSTON STATE: MA ZIP: 02111 BUSINESS PHONE: 6173577800 MAIL ADDRESS: STREET 1: STATE STREET RESEARCH MONEY MARKET TRUST STREET 2: ONE FINANCIAL CTR RM 3800 CITY: BOSTON STATE: MA ZIP: 02111 FORMER COMPANY: FORMER CONFORMED NAME: METLIFE STATE STREET MONEY MARKET TRUST DATE OF NAME CHANGE: 19920703 485BPOS 1 a2053898z485bpos.txt 485BPOS OMB Number 3235-0307 Expires 04/30/03 Estimated average burden hours per response 248.25 As filed with the Securities and Exchange Commission on July 27, 2001 Securities Act of 1933 Registration No. 2-97506 Investment Company Act of 1940 File No. 811-4295 ================================================================================ 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. 17 [X] ---- and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ] Amendment No. 21 [X] ---- -------------------- STATE STREET RESEARCH MONEY MARKET 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 and Secretary State Street Research & Management Company One Financial Center Boston, Massachusetts 02111 ------------------------------------------------- (Name and Address of Agent for Service) Copies of Communications to: Geoffrey R.T. Kenyon, Esq. Goodwin Procter LLP Exchange Place Boston, Massachusetts 02109 It is proposed that this filing will become effective under Rule 485: [ ] Immediately upon filing pursuant to paragraph (b). [X] On August 1, 2001 pursuant to paragraph (b). [ ] 60 days after filing pursuant to paragraph (a)(1). [ ] On ______________ pursuant to paragraph (a)(1). [ ] 75 days after filing pursuant to paragraph (c)(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. -------------------- [LOGO] STATE STREET RESEARCH MONEY MARKET FUND A FUND FOR SHORT-TERM CASH INVESTMENTS OR CURRENT INCOME. PROSPECTUS August 1, 2001 THIS PROSPECTUS HAS INFORMATION YOU SHOULD KNOW BEFORE YOU INVEST. PLEASE READ IT CAREFULLY AND KEEP IT WITH YOUR INVESTMENT RECORDS. AS WITH ALL MUTUAL FUNDS, THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS PROSPECTUS WILL ALSO BE AVAILABLE IN SPANISH IN SEPTEMBER BY CALLING THE STATE STREET RESEARCH SERVICE CENTER AT 1-888-638-3193. CONTENTS - -------------------------------------------------------------------------------- 1 THE FUND ----------------------- 1 Goal and Strategies 3 Principal Risks 4 Volatility and Performance 6 Investor Expenses 8 Investment Management 9 YOUR INVESTMENT ----------------------- 9 Opening an Account 9 Choosing a Share Class 11 Sales Charges 13 Dealer Compensation 14 Buying and Selling Shares 18 Account Policies 20 Distributions and Taxes 21 Investor Services 22 OTHER INFORMATION ----------------------- 22 Other Securities and Risks 24 Financial Highlights 26 Board of Trustees BACK COVER For Additional Information THE FUND 1 - -------------------------------------------------------------------------------- [CHESS PIECE] GOAL AND STRATEGIES FUNDAMENTAL GOAL The fund seeks a high level of current income consistent with the preservation of capital and maintenance of liquidity by investing in high-quality, short-term money market instruments or in U.S. government securities.These may include such short-term corporate debt securities as commercial paper and master demand notes; securities issued or guaranteed as to principal and interest by the U.S. government, its agencies or instrumentalities; and bank certificates of deposit and bankers' acceptances. PRINCIPAL STRATEGIES The fund manages its portfolio subject to strict SEC guidelines, which are designed so that the fund may maintain a stable $1.00 share price, although there is no guarantee that the fund will do so. All of the fund's investments are short-term; the dollar-weighted average portfolio maturity of the fund may not exceed 90 days. The fund invests at least 95% of total assets in high-quality securities called "first tier" securities.These include U.S. government securities and corporate securities that at the time of purchase, are rated by such firms as Standard & Poor's and Moody's in their highest short-term major rating categories, or are unrated securities that [SIDEBAR] [MAGNIFYING GLASS] WHO MAY WANT TO INVEST State Street Research Money Market Fund is designed for investors who seek one or more of the following: o a fund to complement a portfolio of more aggressive investments o a fund for short-term investments ' o a fund for emergency reserve money The fund is NOT appropriate for investors who: o require capital appreciation to meet their investment goals o are seeking maximum income [END SIDEBAR] 2 THE FUND continued - -------------------------------------------------------------------------------- are considered equivalent by the investment manager.The fund invests more than 25% of its total assets in the financial services industry. The fund may invest up to 5% of its portfolio in "second tier" securities, which generally are corporate securities that, at the time of purchase, are rated by such firms as Standard & Poor's and Moody's in their second highest short-term major rating categories, or unrated securities that are considered equivalent by the investment manager. Investments typically include instruments such as asset-backed and corporate commercial paper that are used for short-term borrowings, as well as bank instruments such as certificates of deposit. If it chooses, the fund may invest all of its assets in any one type of first tier securities. The fund may invest in restricted securities.These securities generally are sold to institutional investors and are subject to limitations on how they can be resold. 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 22. 3 ------ [STOP SIGN] PRINCIPAL RISKS Because the fund invests in money market instruments and manages its portfolio to maintain a stable share price, its major risks are those that could affect the overall yield of the fund.Among these situations are those that would cause short-term interest rates to decline, such as strong equity markets or a weak economy. Such a decline would lower the fund's yield and the return on your investment. To the extent the fund invests in restricted securities, it could hamper the fund's ability to raise cash to meet redemptions.This is because these securities may be 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. The fund cannot be certain that it will achieve its goal. Furthermore, fund shares are not bank deposits and are not guaranteed, endorsed or insured by any financial institution, government entity or the FDIC. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible that you could lose money by investing in the fund. INFORMATION ON OTHER SECURITIES AND RISKS APPEARS ON PAGE 22. A "SNAPSHOT" OF THE FUND'S INVESTMENTS MAY BE FOUND IN THE CURRENT ANNUAL OR SEMIANNUAL REPORT (SEE BACK COVER). [SIDEBAR] [MAGNIFYING GLASS] THE USES OF MONEY MARKET FUNDS Money market funds can be a valuable tool in an investor's portfolio for a variety of reasons. For example, money market funds are often used to meet short-term cash investment needs. They also can serve as a place to hold cash pending its use for a longer term investment. Finally, many investors use money market funds to diversify a portfolio of more aggressive investments, especially when they want to reduce their exposure to market volatility or when they expect the market to decline. [END SIDEBAR] 4 VOLATILITY AND PERFORMANCE - -------------------------------------------------------------------------------- [Below is a tabular representation of bar chart in the printed material.]
Years ended December 31 -------------------------------------------------------------------------------------- YEAR-BY-YEAR TOTAL RETURN (Class E) 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 ================================================================================================================================ 5.58% 3.15% 2.50% 3.60% 5.33% 4.81% 5.03% 5.03% 4.67% 5.91%
RETURN FROM 1/1/01 - 6/30/01 (not annualized): up 2.30% BEST QUARTER: first quarter 1991, up 1.61% WORST QUARTER: second quarter 1993, up 0.60%
As of December 31, 2000 --------------------------------- AVERAGE ANNUAL TOTAL RETURN (AT MAXIMUM APPLICABLE SALES CHARGE) 1 YEAR 5 YEARS 10 YEARS ================================================================================================================ TO OBTAIN CURRENT YIELD INFORMATION Class B (%) (0.14) 3.71 3.77 CALL 1-87-SSR-FUNDS. Class B(1) (%)(a) (0.15) 3.71 3.77 Class C (%) 3.86 4.05 3.78 Class E (%) 5.91 5.09 4.56 Class S (%) 5.91 5.09 4.56 Three-month Treasury Bill Index (%) 5.99 5.18 4.78 Lipper Money Market Funds Index (%) 5.94 5.18 4.71
[FOOTNOTE] (a) PERFORMANCE FOR CLASS B(1) REFLECTS CLASS B PERFORMANCE THROUGH DECEMBER 31, 1998. CLASS B(1) WAS INTRODUCED ON JANUARY 1, 1999. [END FOOTNOTE] 5 ------ [SIDEBAR] [MAGNIFYING GLASS] UNDERSTANDING VOLATILITY AND PERFORMANCE The bar chart and table on the opposite page are designed to show two aspects of the fund's track record: o YEAR-BY-YEAR TOTAL RETURN 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 bar chart includes the effects of fund expenses, but not sales charges. If sales charges had been included, returns would have been less than shown. o 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. Also included are two independent measures of performance. The Three-month Treasury Bill Index is an unmanaged index that measures the average yield of three-month Treasury bills. The Lipper Money Market Funds Index shows you how well the fund has done compared to competing funds. When making comparisons, keep in mind that the Three-month Treasury Bill index does not include any management fees or other expenses. The returns in both the bar chart and the table would have been lower if the distributor had not voluntarily reduced the fund's expenses. In both the bar chart and the table, the returns shown for the fund include performance from before the creation of share classes in 1993. If the returns for Class B(1), Class B and Class C from before 1993 had reflected their current service/distribution (12b-1) fees (as described on page 6), these returns would have been lower. Keep in mind that past performance is no guarantee of future results. [END SIDEBAR] 6 INVESTOR EXPENSES - --------------------------------------------------------------------------------
Class descriptions begin on page 9 ------------------------------------------------ SHAREHOLDER FEES (% of offering price) CLASS B CLASS B(1) CLASS C CLASSES E & S - ------------------------------------------------------------------------------------------------------------------------------------ Maximum front-end sales charge (load) 0.00 0.00 0.00 0.00 Maximum deferred sales charge (load) 5.00 5.00 1.00 0.00 ANNUAL FUND OPERATING EXPENSES (% of average net assets) CLASS B CLASS B(1) CLASS C CLASSES E & S - ------------------------------------------------------------------------------------------------------------------------------------ Management fee 0.50 0.50 0.50 0.50 Service/distribution (12b-1) fees 1.00 1.00 1.00 0.00 Other expenses 0.21 0.21 0.21 0.21 ---- ---- ---- ---- TOTAL ANNUAL FUND OPERATING EXPENSES* 1.71 1.71 1.71 0.71 ==== ==== ==== ==== [FOOTNOTE] *BECAUSE SOME OF THE FUND'S EXPENSES HAVE BEEN SUBSIDIZED OR REDUCED THROUGH EXPENSE OFFSET ARRANGEMENTS, ACTUAL TOTAL OPERATING EXPENSES FOR THE PRIOR YEAR WERE: 1.70 1.70 1.70 0.70 THE FUND EXPECTS THE EXPENSE SUBSIDY TO CONTINUE THROUGH THE CURRENT FISCAL YEAR, ALTHOUGH THERE IS NO GUARANTEE THAT IT WILL. [END FOOTNOTE] EXAMPLE YEAR CLASS B CLASS B(1) CLASS C CLASSES E & S - ------------------------------------------------------------------------------------------------------------------------------------ 1 $674/$174 $674/$174 $274/$174 $73 3 $839/$539 $839/$539 $539 $227 5 $1,128/$928 $1,128/$928 $928 $395 10 $1,754 $1,754 $2,019 $883
7 ------ [SIDEBAR] [MAGNIFYING GLASS] UNDERSTANDING INVESTOR EXPENSES The information on the opposite page is designed to give you an idea of what you should expect to pay in expenses as an investor in the fund. The information is based on the fund's most recent fiscal year, and current results may be different. o SHAREHOLDER FEES are costs that are charged to you directly. These fees are not charged on reinvestments or exchanges. o ANNUAL FUND OPERATING EXPENSES are deducted from the fund's assets every year, and are thus paid indirectly by all fund investors. o The EXAMPLE is designed to allow you to compare the costs of this fund with those of other funds. It assumes that you invested $10,000 over the years indicated, reinvested all distributions, earned a hypothetical 5% annual return and paid the maximum applicable sales charges. For Class B(1) and Class B shares, it also assumes the automatic conversion to Class E shares after eight years. When two numbers are shown separated by a slash, the first one assumes you sold all your shares at the end of the period, while the second assumes you stayed in the fund. When there is only one number, the costs would be the same either way. The figures in the example assume full annual expenses, and would be lower if they reflected the various expense reductions that may have been taken. Investors should keep in mind that the example is for comparison purposes only. The fund's actual performance and expenses may be higher or lower. [END SIDEBAR] 8 THE FUND continued - -------------------------------------------------------------------------------- [THINKER] INVESTMENT MANAGEMENT The fund's investment manager is State Street Research & Management Company, One Financial Center, Boston, Massachusetts 02111. The firm traces its heritage back to 1924 and the founding of one of America's first mutual funds. Today the firm has approximately $49 billion in assets under management (as of June 30, 2001), including $18 billion in mutual funds. The investment manager is responsible for the fund's investment and business activities, and receives the management fee annually as compensation (0.50% of average net assets annually). The investment manager is a subsidiary of MetLife, Inc. YOUR INVESTMENT 9 ------ [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. [CHECKLIST] CHOOSING A SHARE CLASS The fund generally offers four share classes, each with its own sales charge and expense structure: Class B(1), Class C, Class E and Class S. The fund also offers Class B shares, but only to current Class B shareholders through reinvestment of dividends and distributions or through exchanges from existing Class B accounts of the State Street Research funds. Class E is the share class that is generally available for initial investment. It is also the share class that is used for exchanges with Class A shares of other State Street Research funds. Class B(1) and Class C are available only by exchange from the corresponding share class of other funds. 10 YOUR INVESTMENT continued - -------------------------------------------------------------------------------- If you are investing through a special program, such as a large employer-sponsored retirement plan or certain programs available through financial professionals, you may be eligible to purchase Class S shares. CLASS B(1) -- BACK LOAD o Available only to investors exchanging from Class B(1) shares of another State Street Research fund o No initial sales charge o Deferred sales charge of 5% or less on shares you sell within six years o Annual service/distribution (12b-1) fee of 1.00% o Automatic conversion to Class E shares after eight years, reducing future annual expenses CLASS B -- BACK LOAD o Available only to current Class B shareholders. See page 11 for details. CLASS C -- LEVEL LOAD o Available only to investors exchanging from Class C shares of another State Street Research fund o No initial sales charge o Deferred sales charge of 1%, paid if you sell shares within one year of purchase o Lower deferred sales charge than Class B(1) shares o Annual service/distribution (12b-1) fee of 1.00% o No conversion to Class E shares after eight years, so annual expenses do not decrease CLASS E -- NO LOAD o Available to all investors purchasing fund shares directly o No sales charge of any kind o No service/distribution (12b-1) fees; annual expenses are lower than other share classes' CLASS S -- SPECIAL PROGRAMS o Available only through certain retirement accounts, advisory accounts of the investment manager and other special programs, including programs through financial professionals with recordkeeping and other services; these programs usually involve special conditions and separate fees (consult your financial professional or your program materials) o No sales charges of any kind o No service/distribution (12b-1) fees; annual expenses are lower than other share classes 11 ------ SALES CHARGES CLASS B(1) -- 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 DEDUCT- BOUGHT THEM ED 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 1.00 Seventh or eighth year None
With Class B(1) 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 six years or less, as described in the table above. See "Other CDSC Policies" on page 12. Class B(1) shares automatically convert to Class E shares after eight years; Class E shares have lower annual expenses. CLASS B -- BACK LOAD Class B shares are available only to current shareholders through reinvestment of dividends and distributions or through exchanges from existing Class B accounts of the State Street Research funds. Other investments made by current Class B shareholders will be in Class B(1) shares. With Class B shares, you are charged a "contingent deferred sales charge" (CDSC) when you sell shares you have held for five years or less. The CDSC is a percentage of net asset value at the time of purchase (or of sale, if lower) and is deducted from your proceeds. When you sell shares in the first year after you bought them, the CDSC is 5.00%; second year, 4.00%; third year, 3.00%; fourth year, 3.00%; fifth year, 2.00%; sixth year or later, none. See "Other CDSC Policies" on page 12. Class B shares automatically convert to Class E shares after eight years. CLASS C -- 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 DEDUCT- BOUGHT THEM ED 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 12 YOUR INVESTMENT continued - -------------------------------------------------------------------------------- described in the table on page 11. See "Other CDSC Policies" below. Class C shares currently have the same annual expenses as Class B(1) shares, but never convert to Class E shares. CLASS E -- NO LOAD; CLASS S -- SPECIAL PROGRAMS These shares have no sales charges. OTHER CDSC POLICIES The CDSC will be based on the net asset value of the shares at the time of purchase (or of sale, if lower). 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 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 participant-initiated distributions from State Street Research prototype retirement plans. In other cases, the CDSC is waived on shares sold for mandatory retirement distributions or for distributions because of disability or death. Consult your financial professional or the State Street Research Service Center for more information. [SIDEBAR] [MAGNIFYING GLASS] UNDERSTANDING SERVICE/DISTRIBUTION FEES As noted in the descriptions on pages 11 and 12, Class B, Class B(1) and Class C have an annual service/distribution fee, also called a 12b-1 fee. The fund may pay certain service and distribution fees for a class, as allowed under the 12b-1 plan for the class. Because 12b-1 fees are an ongoing expense, they will increase the cost of your investment and, over time, could potentially cost you more than if you had paid other types of sales charges. Some of the 12b-1 fees are used to compensate those financial professionals who sell fund shares and provide ongoing service to shareholders. The table on the next page shows how these professionals' commissions are calculated. The fund may continue to pay 12b-1 fees even if the fund is subsequently closed to new investors. [END SIDEBAR] 13 ------ [CHECK] DEALER COMPENSATION Financial professionals who sell shares of State Street Research funds and perform services for fund investors may receive sales commissions, annual fees and other compensation. These are paid by the fund's distributor, using money from sales charges, service/distribution (12b-1) fees and its other resources. Brokers and agents may charge a transaction fee on orders of fund shares placed directly through them. The distributor may pay its affiliate MetLife Securities, Inc. additional compensation of up to 0.25% of certain sales or assets. 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 the sale of shares of the State Street Research Funds by the broker. DEALER COMMISSIONS
INITIAL COMMISSION (%) ANNUAL FEE (%) - ---------------------------------------------------------- Class B(1) -- 0.25 Class B -- 0.25 Class C -- 1.00 Class E 0.00 0.00 Class S 0.00 0.00
14 BUYING AND SELLING SHARES - -------------------------------------------------------------------------------- [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: o $1,000 for accounts that use the Investamatic program(a) o $2,000 for Individual Retirement Accounts(a) o $2,500 for all other accounts MINIMUM ADDITIONAL INVESTMENTS: o $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 The processing of your order will depend upon the method of payment you choose, as well as the time your order is received. If you are paying for your shares with a check, an order received prior to 4:00 p.m. eastern time will be processed as of 4:00 p.m. on the next business day and you will begin earning dividends on the business day after that. If you are paying for your shares with a wire transfer, an order and wire payment received prior to 4:00 p.m. eastern time will generally be processed as of 4:00 p.m. on the same day and you will begin earning dividends on the next business day. Special procedures are available to enable you to begin earning dividends immediately on wire transfers of $25,000 or more. To make a same-day wire investment, please notify State Street Research by 9:30 a.m. of your intention to wire funds, and make sure your wire arrives by 2:30 p.m. Other special procedures are available for very large institutional accounts, as set forth in the fund's Statement of Additional Information (see back cover). WIRE TRANSACTIONS Funds may be wired between 8:00 a.m. and 4:00 p.m. eastern time. Your bank may charge a fee for wiring money. [FOOTNOTE] (a) EXCEPT $500 FOR INDIVIDUAL RETIREMENT ACCOUNTS DURING SPECIAL PROMOTIONAL PERIODS. [END FOOTNOTE] INSTRUCTIONS FOR BUYING SHARES 15 - --------------------------------------------------------------------------------
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT [BRIEFCASE] THROUGH A Consult your financial Consult your financial PROFESSIONAL professional or your program professional or your program OR PROGRAM materials. materials. BY MAIL [MAILBOX] Make your check payable to Fill out an investment slip "State Street Research Funds." from an account statement or Forward the check and your indicate the fund name and application to State Street account number on your check. Research. Make your check payable to "State Street Research Funds." Forward the check and slip to State Street Research. [CAPITAL BUILDING] BY FEDERAL Call to obtain an account Call State Street Research to FUNDS WIRE number and forward your obtain a control number. application to State Street Instruct your bank to wire Research. Wire funds using the funds to: instructions at right. o State Street Bank and Trust Company, Boston, MA o ABA: 011000028 o BNF: fund name and share class you want to buy o AC: 99029761 o OBI: your name AND your account number o Control: the number given to you by State Street Research BY ELECTRONIC [PLUG] Verify that your bank is a Call State Street Research to FUNDS TRANSFER member of the ACH (Automated verify that the necessary bank (ACH) Clearing House) system. information is on file for Forward your application to your account. If it is, you State Street Research. Please may request a transfer by be sure to include the telephone or Internet. If not, appropriate bank information. please ask State Street Call State Street Research to Research to provide you with request a purchase. an EZ Trader application. [CALENDAR] BY INVESTAMATIC Forward your application, with Call State Street Research to all appropriate sections verify that Investamatic is in completed, to State Street place on your account, or to Research, along with a check request a form to add it. for your initial investment Investments are automatic once payable to "State Street Investamatic is in place. Research Funds." BY EXCHANGE [ARROWS GOING IN Read the prospectus for the Read the prospectus for the OPPOSITE DIRECTIONS] fund into which you are fund into which you are exchanging. Call State Street exchanging. Call State Street Research or visit our web Research or visit our web site. site.
STATE STREET RESEARCH SERVICE CENTER PO Box 8408, Boston, MA 02266-8408 INTERNET www.ssrfunds.com CALL TOLL-FREE: 1-87-SSR-FUNDS (1-877-773-8637) (business days 8:00 a.m. - 6:00 p.m., eastern time) 16 YOUR INVESTMENT continued - -------------------------------------------------------------------------------- [CASH REGISTER] POLICIES FOR SELLING SHARES CIRCUMSTANCES THAT REQUIRE WRITTEN REQUESTS Please submit instructions in writing when any of the following apply: o you are selling more than $100,000 worth of shares o the name or address on the account has changed within the last 30 days o you want the proceeds to go to a name or address not on the account registration o you are transferring shares to an account with a different registration or share class o 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 If you want proceeds from a redemption to be wired on the same business day, you must submit your request before 9:30 a.m. eastern time. If you follow this procedure you will not earn a dividend for the day of redemption. Other special procedures are available for very large institutional accounts, as set forth in the fund's Statement of Additional Information (see back cover). Other redemption requests received before 4:00 p.m. will be processed as of 4:00 p.m. Proceeds for these redemptions will not be available until the next business day but you will earn a dividend for the day of redemption. Redemption requests received after 4:00 p.m. will be treated as if they had been received as of the opening of the next business day. WIRE TRANSACTIONS Proceeds sent by federal funds wire must total at least $1,000. 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. INSTRUCTIONS FOR SELLING SHARES 17 - -------------------------------------------------------------------------------- TO SELL SOME OR ALL OF YOUR SHARES
TO SELL SOME OR ALL OF YOUR SHARES [BRIEFCASE] THROUGH A Consult your financial professional or your PROFESSIONAL program materials. OR PROGRAM BY MAIL [MAILBOX] Send a letter of instruction, an endorsed stock 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). [CAPITAL BUILDING] BY FEDERAL Check with State Street Research to make sure FUNDS WIRE that a wire redemption privilege, including a bank 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 wired to your pre-designated bank account. (See "Wire Transactions" on facing page.) BY ELECTRONIC [PLUG] Check with State Street Research to make sure FUNDS TRANSFER that the EZ Trader feature, including a bank (ACH) designation, is in place on your account. Once this is established, you may place your request to sell shares with State Street Research by telephone or Internet. Proceeds will be sent to your pre-designated bank account. [COMPUTER] BY INTERNET Visit our web site. Certain limitations may apply. BY TELEPHONE [TELEPHONE] As long as the transaction does not require a written request (see facing page), you or your financial professional can sell shares by calling State Street Research. A check will be mailed to your address of record on the following business day. [ARROWS GOING IN BY EXCHANGE Read the prospectus for the fund into which OPPOSITE DIRECTIONS] you are exchanging. Call State Street Research or visit our web site. BY SYSTEMATIC [CALENDAR] See plan information on page 21. WITHDRAWAL PLAN [CHECK] BY CHECK The checkwriting privilege is available for Class E and Class S shares only. If you have requested this privilege on your application, you may write checks for amounts of $500 or more.
STATE STREET RESEARCH SERVICE CENTER PO Box 8408, Boston, MA 02266-8408 INTERNET www.ssrfunds.com CALL TOLL-FREE: 1-87-SSR-FUNDS (1-877-773-8637) (business days 8:00 a.m. - 6:00 p.m., eastern time) 18 YOUR INVESTMENT continued - -------------------------------------------------------------------------------- [POLICIES] ACCOUNT POLICIES TELEPHONE AND INTERNET REQUESTS When you open an account you automatically receive telephone privileges,allowing you to place requests for your account by tele-phone.Your financial professional can also use these privileges to request exchanges or redemptions on your account.For your protection,all telephone calls are recorded. You may also use our web site for submitting certain requests over the Internet. As long as State Street Research takes certain measures to authenticate requests over the telephone or Internet for 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. Similarly,you may choose not to use the Internet for your account.The fund may suspend or eliminate the telephone or Internet privileges 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 of your current shares.Any contingent deferred sales charges will continue to be calculated from the date of your initial investment. 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 19 ------ record or, depending on the circumstances, may deduct an annual maintenance fee (currently $18). 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 every business day at 2:30 p.m.eastern time and the close of regular trading on the New York Stock Exchange (but not later than 4:00 p.m.eastern time).NAV is calculated by dividing the fund's net assets by the number of its shares outstanding. In calculating its NAV, the fund uses the amortized cost valuation method to determine the value of portfolio securities. However,when the investment manager believes that the use of amortized cost valuation may dilute the value of the shareholders' shares or result in unfairness to shareholders,the fund may take such action as it deems appropriate to eliminate or reduce the extent of any dilution or unfairness. 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. ADDITIONAL POLICIES Please note that the fund maintains additional policies and reserves certain rights, including: o Requirements for initial or additional investments, reinvestments, periodic investment plans, retirement and employee benefit plans, sponsored arrangements and other similar programs may be changed from time to time without further notice or supplement to this prospectus o All orders to purchase shares are subject to acceptance by the fund o 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 o The fund may delay sending you redemption proceeds for up to seven days, or longer if permitted by the SEC o The fund reserves the right to redeem in kind o To permit investors to obtain the current price, dealers are responsible for transmitting all orders to the State Street Research Service Center promptly 20 YOUR INVESTMENT continued - -------------------------------------------------------------------------------- ["UNCLE SAM"] DISTRIBUTIONS AND TAXES INCOME AND CAPITAL GAINS DISTRIBUTIONS The fund distributes its net income to shareholders; it declares dividends daily and pays them monthly.The fund does not anticipate paying any capital gains distributions. 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. TAX EFFECTS OF DISTRIBUTIONS AND TRANSACTIONS In general, any dividends you receive from the fund are taxable as ordinary income. Every year, the fund will send you information detailing the amount of ordinary income (and capital gains, if any) distributed to you for the previous year. The sale of shares in your account may produce a gain or loss. 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. 21 ------ [HANDS] 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. 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 12% of your fund assets a year (minimum $50 per withdrawal) without incurring any contingent deferred sales charges. Certain terms and minimums apply. EZ TRADER This service allows you to purchase or sell fund shares over the telephone or over the Internet through the ACH (Automated Clearing House) system. 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. RETIREMENT PLANS State Street Research also offers a full range of prototype retirement plans for individuals, sole proprietors, partnerships, corporations and employees. CALL 1-87-SSR-FUNDS (1-877-773-8637) FOR INFORMATION ON ANY OF THE SERVICES DESCRIBED ABOVE. 22 OTHER INFORMATION - -------------------------------------------------------------------------------- [POLICIES] 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 1. Below are brief descriptions of other securities and practices, along with their associated risks. RESTRICTED OR 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 or illiquid securities could hamper the fund's ability to raise cash to meet redemp-tions.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. SECURITIES RATINGS When securities are rated by one or more independent rating agencies, the fund uses these ratings to determine credit quality.In cases where a security has received a rating from only one independent rating agency,it may rely on that rating. If a security has received ratings from two or more rating agencies and at least two of the ratings are equivalent, the fund may rely on the two equivalent ratings even if the other ratings are lower. In cases where a security's two highest ratings are in conflicting cate-gories,the fund must follow the lower rating.If a security is unrated,the fund may assign it to a given category based on its own credit research. 23 ------ FOREIGN INVESTMENTS The fund may invest in securities issued by foreign companies or banks or their U.S. affiliates. All such securities purchased by the fund are denominated in U.S. dollars. Securities issued by foreign entities generally have more risk than their domestic counterparts, in part because of higher political and economic risks and lack of reliable information.The fund may invest up to 15% of total assets in securities of Canadian issuers.The fund also may invest up to 25% of total assets in obligations of foreign banks. 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. DERIVATIVES Derivatives, a category that includes options and futures, are financial instruments whose value derives from one or more securities. Certain instruments that are first or second tier securities also may be derivatives, such as short-term, high-quality asset-backed securities.The fund uses derivatives to invest for potential income, and may purchase them to the extent it can purchase any other type of first or second tier security.The values of some derivatives are difficult to determine because they are based on the values of other securities and the markets for some derivatives may be limited. With some derivatives, such as certain option contracts, there is also the risk that the counterparty may fail to honor its contract terms, causing a loss for the fund. 24 FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- [HEADNOTE] THESE HIGHLIGHTS ARE INTENDED TO HELP YOU UNDERSTAND THE FUND'S PERFORMANCE OVER THE PAST FIVE YEARS. THE INFORMATION IN THESE TABLES HAS BEEN AUDITED BY PRICEWATERHOUSECOOPERS LLP, THE FUND'S INDEPENDENT ACCOUNTANTS. THEIR REPORT AND THE FUND'S FINANCIAL STATEMENTS ARE INCLUDED IN THE FUND'S ANNUAL REPORT, WHICH IS AVAILABLE UPON REQUEST. TOTAL RETURN FIGURES ASSUME REINVESTMENT OF ALL DISTRIBUTIONS. [END HEADNOTE]
CLASS B(1) CLASS B =============================================================================== Years ended March 31 Years ended March 31 PER SHARE DATA 1999(b) 2000 2001 1997 1998 1999 2000 2001 ======================================================================================================================== NET ASSET VALUE, BEGINNING OF YEAR ($) 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 ------ ------ ------ ------ ------ ------ ------ ------ Net investment income ($)* 0.008 0.038 0.047 0.037 0.040 0.038 0.038 0.047 Dividends from net investment income ($) (0.008) (0.038) (0.047) (0.037) (0.040) (0.038) (0.038) (0.047) ------ ------ ------ ------ ------ ------ ------ ------ NET ASSET VALUE, END OF YEAR ($) 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 ====== ====== ====== ====== ====== ====== ====== ====== Total return (%)(a) 0.84(c) 3.88 4.81 3.72 4.09 3.85 3.88 4.81 Ratios/Supplemental Data ======================================================================================================================== Net assets at end of year 732 2,620 10,212 15,982 14,567 30,288 29,486 28,407 ($ thousands) Expense ratio (%)* 1.66(d) 1.66 1.70 1.75 1.65 1.66 1.66 1.70 Expense ratio after expense reductions (%)* 1.65(d) 1.65 1.69 1.75 1.65 1.65 1.65 1.69 Ratio of net investment income to average net assets (%)* 3.40(d) 3.97 4.69 3.69 4.01 3.73 3.84 4.69 *REFLECTS VOLUNTARY REDUCTION OF EXPENSES PER SHARE OF THESE AMOUNTS ($) 0.000 0.002 0.004 0.002 0.002 0.001 0.002 0.004 CLASS C =========================================== Years ended March 31 PER SHARE DATA 1997 1998 1999 2000 2001 ==================================================================================== NET ASSET VALUE, BEGINNING OF YEAR ($) 1.00 1.00 1.00 1.00 1.00 ------ ------ ------ ------ ------ Net investment income ($)* 0.037 0.040 0.038 0.038 0.047 Dividends from net investment income ($) (0.037) (0.040) (0.038) (0.038) (0.047) ------ ------ ------ ------ ------ NET ASSET VALUE, END OF YEAR ($) 1.00 1.00 1.00 1.00 1.00 ====== ====== ====== ====== ====== Total return (%)(a) 3.72 4.09 3.85 3.88 4.81 Ratios/Supplemental Data ==================================================================================== Net assets at end of year 959 2,314 2,286 1,607 4,541 ($ thousands) Expense ratio (%)* 1.75 1.65 1.66 1.66 1.70 Expense ratio after expense reductions (%)* 1.75 1.65 1.65 1.65 1.69 Ratio of net investment income to average net assets (%)* 3.68 4.01 3.72 3.83 4.68 *REFLECTS VOLUNTARY REDUCTION OF EXPENSES PER SHARE OF THESE AMOUNTS ($) 0.002 0.002 0.001 0.002 0.004
25 ------
CLASS E ================================================ Years ended March 31 PER SHARE DATA 1997 1998 1999 2000 2001 ============================================================================================= NET ASSET VALUE, BEGINNING OF YEAR ($) 1.00 1.00 1.00 1.00 1.00 ------ ------ ------ ------ ------ Net investment income ($)* 0.047 0.050 0.048 0.048 0.057 Dividends from net investment income ($) (0.047) (0.050) (0.048) (0.048) (0.057) ------ ------ ------ ------ ------ NET ASSET VALUE, END OF YEAR ($) 1.00 1.00 1.00 1.00 1.00 ====== ====== ====== ====== ====== Total return (%)(a) 4.78 5.12 4.88 4.92 5.86 RATIOS/SUPPLEMENTAL DATA ============================================================================================= Net assets at end of year ($ thousands) 192,360 221,475 331,094 319,740 380,904 Expense ratio (%)* 0.75 0.65 0.66 0.66 0.70 Expense ratio after expense reductions (%)* 0.75 0.65 0.65 0.65 0.69 Ratio of net investment income to average net assets (%)* 4.69 5.01 4.74 4.79 5.70 *REFLECTS VOLUNTARY REDUCTION OF EXPENSES PER SHARE OF THESE AMOUNTS ($) 0.002 0.002 0.001 0.003 0.004 CLASS S ================================================ Years ended March 31 PER SHARE DATA 1997 1998 1999 2000 2001 ============================================================================================= NET ASSET VALUE, BEGINNING OF YEAR ($) 1.00 1.00 1.00 1.00 1.00 ------ ------ ------ ------ ------ Net investment income ($)* 0.047 0.050 0.048 0.048 0.057 Dividends from net investment income ($) (0.047) (0.050) (0.048) (0.048) (0.057) ------ ------ ------ ------ ------ NET ASSET VALUE, END OF YEAR ($) 1.00 1.00 1.00 1.00 1.00 ====== ====== ====== ====== ====== Total return (%)(a) 4.78 5.12 4.88 4.92 5.86 RATIOS/SUPPLEMENTAL DATA ============================================================================================= Net assets at end of year ($ thousands) 14,710 13,500 26,842 19,629 30,004 Expense ratio (%)* 0.75 0.65 0.66 0.66 0.70 Expense ratio after expense reductions (%)* 0.75 0.65 0.65 0.65 0.69 Ratio of net investment income to average net assets (%)* 4.69 5.01 4.77 4.77 5.69 *REFLECTS VOLUNTARY REDUCTION OF EXPENSES PER SHARE OF THESE AMOUNTS ($) 0.002 0.002 0.001 0.002 0.004
[FOOTNOTES] (a) DOES NOT REFLECT ANY FRONT-END OR CONTINGENT DEFERRED SALES CHARGES. TOTAL RETURN WOULD BE LOWER IF THE DISTRIBUTOR AND ITS AFFILIATES HAD NOT VOLUNTARILY REDUCED A PORTION OF THE FUND'S EXPENSES. (b) JANUARY 1, 1999 (COMMENCEMENT OF SHARE CLASS) TO MARCH 31, 1999. (c) NOT ANNUALIZED. (d) ANNUALIZED. [END FOOTNOTES] 26 BOARD OF TRUSTEES - -------------------------------------------------------------------------------- [COLUMNS] The Board of Trustees is responsible for overseeing the operation of the fund. It establishes the fund's major policies, reviews investments, and provides guidance to the investment manager and others who provide services to the fund.The Trustees have diverse backgrounds and substantial experience in business and other areas. RICHARD S. DAVIS CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER, State Street Research & Management Company BRUCE R. BOND FORMER CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE OFFICER AND PRESIDENT, PictureTel Corporation STEVE A. GARBAN FORMER SENIOR VICE PRESIDENT FOR FINANCE AND OPERATIONS AND TREASURER, The Pennsylvania State University DEAN O. MORTON FORMER EXECUTIVE VICE PRESIDENT, CHIEF OPERATING OFFICER AND DIRECTOR, Hewlett-Packard Company SUSAN M. PHILLIPS DEAN, School of Business and Public Management, George Washington University, FORMER MEMBER of the Board of Governors of the Federal Reserve System and CHAIRMAN AND COMMISSIONER OF THE Commodity Futures Trading Commission TOBY ROSENBLATT PRESIDENT, Founders Investments Ltd. MICHAEL S. SCOTT MORTON JAY W. FORRESTER PROFESSOR OF MANAGEMENT, Sloan School of Management, Massachusetts Institute of Technology NOTES 27 - -------------------------------------------------------------------------------- 28 NOTES - -------------------------------------------------------------------------------- NOTES 29 - -------------------------------------------------------------------------------- FOR ADDITIONAL INFORMATION - -------------------------------------------------------------------------------- IF YOU HAVE QUESTIONS ABOUT THE FUND OR WOULD LIKE TO REQUEST A FREE COPY OF THE CURRENT ANNUAL/SEMIANNUAL REPORT OR SAI, CONTACT STATE STREET RESEARCH OR YOUR FINANCIAL PROFESSIONAL. [LOGO] STATE STREET RESEARCH Service Center P.O. Box 8408, Boston, MA 02266-8408 Telephone: 1-87-SSR-FUNDS (1-877-773-8637) Internet: www.ssrfunds.com YOU CAN ALSO OBTAIN INFORMATION ABOUT THE FUND, INCLUDING THE SAI AND CERTAIN OTHER FUND DOCUMENTS, ON THE SEC'S EDGAR DATABASE ON THE INTERNET AT WWW.SEC.GOV, BY ELECTRONIC REQUEST AT PUBLICINFO@SEC.GOV, IN PERSON AT THE SEC'S PUBLIC REFERENCE ROOM IN WASHINGTON, DC (TELEPHONE 1-202-942-8090) OR BY MAIL BY SENDING YOUR REQUEST, ALONG WITH A DUPLICATING FEE, TO THE SEC'S PUBLIC REFERENCE SECTION, WASHINGTON, DC 20549-0102. 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.The annual report also includes the report of the fund's independent accountants on the fund's financial statements. STATEMENT OF ADDITIONAL INFORMATION (SAI) A supplement to the prospectus, the SAI contains further information about the fund and its investment limitations and policies. 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).
TICKER SYMBOLS ================================================================================ Class B(1)(proposed) SSPXX Class B SSBXX Class C (proposed) SSDXX Class E SSRXX Class S (proposed) SSSXX
PROSPECTUS - -------------------------------------------------------------------------------- SEC File Number: 811-4295 MM-2150-0701 Control Number: (exp 0802)SSR-LD STATEMENT OF ADDITIONAL INFORMATION FOR STATE STREET RESEARCH MONEY MARKET FUND A SERIES OF STATE STREET RESEARCH MONEY MARKET TRUST AUGUST 1, 2001 This Statement of Additional Information is divided into two sections: Section I contains specific information about the Fund's investment policies. Section II contains more general information about the Fund and additional information about certain securities and investment practices. The Statement of Additional Information is not a Prospectus. It should be read in conjunction with the prospectus dated August 1, 2001. The Prospectus may be obtained without charge from State Street Research Investment Services, Inc., One Financial Center, Boston, Massachusetts 02111-2690, or by calling 1-87-SSR-FUNDS (1-877-773-8637). Financial statements for the Fund, as of and for the fiscal year ended March 31, 2001 are included in the Fund's Annual Report to Shareholders for that year. The annual report is incorporated by reference herein and is available without charge, upon request by calling the State Street Research Service Center at 1-87-SSR-FUNDS (1-877-773-8637). CONTROL NUMBER: (exp0801)SSR-LD MM-2151-0801 TABLE OF CONTENTS PAGE DEFINITIONS (ii) SECTION I I, 1-1 STATE STREET RESEARCH MONEY MARKET FUND I, 1-1 A. The Fund I, 1-1 B. Investment Objective I, 1-1 C. Fundamental and Nonfundamental Restrictions I, 1-1 D. Restricted or Illiquid Securities I, 1-3 E. Industry Classifications I, 1-4 F. Money Market Instruments I, 1-6 G. Control Persons and Principal Holders of Securities I, 1-11 H. Trustee Compensation I, 1-14 I. Investment Advisory Fee I, 1-14 J. Distributor's Payment of Fund Expenses I, 1-15 K. Brokerage Commissions I, 1-15 L. Sales Charges on Shares of the Fund I, 1-16 M. Rule 12b-1 Fees I, 1-16 N. Performance I, 1-17 i DEFINITIONS Each of the following terms used in this Statement of Additional Information has the meaning set forth below. "1940 ACT" means the Investment Company Act of 1940, as amended. "DISTRIBUTOR" means State Street Research Investment Services, Inc., One Financial Center, Boston, Massachusetts 02111-2690 "INVESTMENT MANAGER" means State Street Research & Management Company, One Financial Center, Boston, Massachusetts 02111-2690. "METLIFE" means Metropolitan Life Insurance Company. "NYSE" means the New York Stock Exchange, Inc. "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. ii SECTION I 1. STATE STREET RESEARCH MONEY MARKET FUND A. THE FUND The Fund was organized in 1985 as a separate series of State Street Research Money Market Trust, a Massachusetts business trust. The Trust is an "open-end" management investment company, as defined in the 1940 Act. A "series" is a separate pool of assets of the Trust which is separately managed and may have a different investment objective and different investment policies from those of another series. The Trust currently is comprised of one series: State Street Research Money Market Fund. The Fund is an "open-end" management investment company, and is a "diversified company" as those terms are defined in the 1940 Act. The Fund also intends to qualify as a "money market fund" within the meaning of Rule 2a-7 under the 1940 Act, which includes complying with the portfolio quality, maturity and diversification requirements of that rule. Pursuant to Rule 2a-7, compliance with the diversification requirements under the rule constitutes meeting the definitional requirements of a diversified company under the 1940 Act. Generally, a fund that intends to meet its diversification requirements under Rule 2a-7 may not invest more than 5% of its total assets in any one issuer, although this limit may be greater if the securities are held for short periods, are guaranteed or are subject to certain redemption or resale rights, and there is no limit on investments in U.S. Government securities. B. INVESTMENT OBJECTIVE The investment objective of State Street Research Money Market Fund 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. C. FUNDAMENTAL AND NONFUNDAMENTAL RESTRICTIONS 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. FUNDAMENTAL INVESTMENT RESTRICTIONS It is the Fund's policy: I, 1-1 (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) 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 issue senior securities; (3) not to underwrite or participate in the marketing of securities of other issuers; (4) not to purchase or sell real estate in fee simple; (5) not to invest in commodities or commodity contracts; (6) not to lend money directly to natural persons; however, the Fund may lend portfolio securities and purchase bonds, debentures, notes, bills and any other debt-related instruments or interests directly from the issuer thereof or in the open market and may enter into repurchase transactions collateralized by obligations of the U.S. Government and its agencies and instrumentalities or other high quality securities; (7) not to conduct arbitrage transactions; (8) not to invest in interests in oil, gas or other mineral exploration or development programs (provided that the Fund may invest in securities which are based, directly or indirectly, on the credit of companies which invest in or sponsor such programs); (9) not to make any investment which would cause more than 25% of the value of the Fund's total assets to be invested in the securities of issuers principally engaged in any one industry, as based on industry classifications as may be described in the Fund's Prospectus or Statement of Additional Information, as amended from time to time, except that the Fund will invest more than 25% of its total assets in the financial services industry and except that this limitation does not apply to securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities or obligations of banks as described in the Fund's Prospectus or Statement of Additional Information, as amended from time to time; and (10) not to borrow money (through reverse repurchase agreements or otherwise) except for extraordinary and emergency purposes, such as permitting redemption requests to be honored, and then not in an amount in excess of 10% of the value of its total assets, provided that additional investments will be suspended during any period when borrowings exceed 5% of the Fund's total I, 1-2 assets and provided further that reverse repurchase agreements shall not exceed 5% of the Fund's total assets. Reverse repurchase agreements occur when the Fund sells money market securities and agrees to repurchase such securities at an agreed-upon price, date and interest payment. The Fund would use the proceeds from the transaction to buy other money market securities, which are either maturing or under the terms of a resale agreement, on the same day as (or day prior to) the expiration of the reverse repurchase agreement, and would employ a reverse repurchase agreement when interest income from investing the proceeds of the transaction is greater than the interest expense of the reverse repurchase transaction. NONFUNDAMENTAL INVESTMENT 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 10% 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); (2) not to purchase securities on margin, make a short sale of any securities or purchase or deal in puts, calls, straddles or spreads with respect to any security; (3) not to hypothecate, mortgage or pledge any of its assets except as may be necessary in connection with permitted borrowings and then not in excess of 15% of the Fund's total assets, taken at cost; and (4) not to purchase a security issued by another investment company, except to the extent permitted under the 1940 Act, or any exemptive order from the Securities and Exchange Commission, or except by purchases in the open market involving only customary brokers' commissions, or securities acquired as dividends or distributions or in connection with a merger, consolidation or similar transaction or other exchange. D. RESTRICTED OR ILLIQUID SECURITIES Many of the securities that comprise the markets for short-term money market investments are not registered with the SEC and are therefore restricted as to how they can be resold. However, a number of institutions such as the Fund trade in the restricted securities in these markets. The Fund may invest without limit in restricted securities. While some of these securities may be illiquid when issued or could become illiquid, the Fund limits its holdings of illiquid securities to 10% of its net assets. I, 1-3 The restricted securities in which the Fund invests include various kinds of money market investments, such as commercial paper issued by corporations and financial institutions, as well as commercial paper backed by pools of assets, such as credit card receivables. Some of these restricted securities may be deemed to be liquid because, among other things, they can be resold among qualified institutional buyers under a special SEC rule, Rule 144A. However, the Rule 144A market is still developing and there is no assurance that securities that may be resold under Rule 144A will maintain their liquidity. E. 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 by foreign governments are 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. The Fund will invest more than 25% of its total assets in the financial services industries. 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. The industry concentration limitations do not apply to bank money instruments, e.g., interest bearing negotiable certificates issued by the foreign branch of a domestic bank, if the domestic parent would be unconditionally liable in the event that the foreign branch failed to pay on its instruments for any reason. I, 1-4 AUTOS & TRANSPORTATION - ---------------------- Air Transport Auto Parts Automobiles Miscellaneous Transportation Railroad Equipment Railroads Recreational Vehicles & Boats Tires & Rubber Truckers CONSUMER DISCRETIONARY - ---------------------- Advertising Agencies Casino/Gambling, Hotel/Motel Commercial Services Communications, Media & Entertainment Consumer Electronics Consumer Products Consumer Services Household Furnishings Leisure Time Photography Printing & Publishing Restaurants Retail Shoes Textile & Apparel Manufacturers Toys CONSUMER STAPLES - ---------------- Beverages Drug & Grocery Store Chains Foods Household Products Tobacco FINANCIAL SERVICES - ------------------ Banks & Savings and Loans Financial Data Processing Services & Systems Insurance Miscellaneous Financial Real Estate Investment Trusts Rental & Leasing Services: Commercial Securities Brokerage & Services HEALTH CARE - ----------- Drugs & Biotechnology Health Care Facilities Health Care Services Hospital Supply Service Miscellaneous INTEGRATED OILS - --------------- Oil: Integrated Domestic Oil: Integrated International MATERIALS & PROCESSING - ---------------------- Agriculture Building & Construction Chemicals Containers & Packaging Diversified Manufacturing Engineering & Contracting Services Fertilizers Forest Products Gold & Precious Metals Miscellaneous Materials & Processing Non-Ferrous Metals Office Supplies Paper and Forest Products Real Estate & Construction Steel Textile Products OTHER - ----- Trust Certificates-- Government Related Lending Asset-backed--Mortgages Asset-backed--Credit Card Receivables Miscellaneous Multi-Sector Companies OTHER ENERGY - ------------ Gas Pipelines Miscellaneous Energy Offshore Drilling Oil and Gas Producers Oil Well Equipment & Services PRODUCER DURABLES - ----------------- Aerospace Electrical Equipment & Components Electronics: Industrial Homebuilding Industrial Products Machine Tools Machinery Miscellaneous Equipment Miscellaneous Producer Durables Office Furniture & Business Equipment Pollution Control and Environmental Services Production Technology Equipment Telecommunications Equipment TECHNOLOGY - ---------- Communications Technology Computer Software Computer Technology Electronics Electronics: Semi- Conductors/Components Miscellaneous Technology UTILITIES - --------- Miscellaneous Utilities Utilities: Cable TV & Radio Utilities: Electrical Utilities: Gas Distribution Utilities: Telecommunications Utilities: Water I, 1-5 F. MONEY MARKET INSTRUMENTS The following describes further the money market instruments in which the Fund may invest, as well as certain debt ratings used by the Fund, and is provided as a supplement to the discussion appearing in the Fund's Prospectus. SHORT-TERM CORPORATE AND OTHER SECURITIES Short-term corporate debt instruments include commercial paper (i.e., short-term, unsecured promissory notes) issued by corporations (including bank holding companies) to finance short-term credit needs. Commercial paper is usually sold on a discounted basis and has a maturity at the time of issuance not exceeding nine months. Short-term corporate debt instruments also include master demand notes. Master demand notes are obligations of companies that permit an investor to invest fluctuating amounts at varying rates of interest pursuant to arrangements between the investor, as lender, and the companies, as borrowers. The Fund will have the right, at any time, to increase the amount lent up to the full amount provided by a note. Because the Fund may also decrease the amount lent at any time, such instruments are highly liquid and in effect have a maturity of one business day. The borrower will have the right, at any time, to prepay up to the full amount of the amount borrowed without penalty. Because the notes are direct lending obligations between the Fund and the borrowers, they are generally not traded and there is no secondary market. Consequently, the Fund's ability to receive repayment will depend upon the borrower's ability to pay principal and interest on the Fund's demand. The Fund will invest only in notes that either have the ratings described below for commercial paper or (because notes are not typically rated by credit rating agencies) unrated notes that are issued by companies having the ratings described below for issuers of commercial paper. The Fund does not expect that the notes will be backed by bank letters of credit. State Street Research & Management Company, the Fund's investment manager (the "Investment Manager") will monitor the value of the Fund's investments in commercial paper and master demand notes, taking into account such factors as the issuer's earning power, cash flow and other liquidity ratios. Commercial paper investments at the time of purchase will be rated in one of the two highest rating categories by a nationally recognized statistical rating organization, such as within the A-1 or A-2 categories by Standard & Poor's Corporation ("S&P") or within the Prime-1 or Prime-2 categories by Moody's Investors Service, Inc. ("Moody's"), or, if not rated, issued by companies having an outstanding debt issue rated at least within the AA category by S&P or within the Aa category by Moody's or equivalent. See "Debt Securities Ratings" below for further information. Under certain limited circumstances, the Fund may invest in nonconvertible corporate debt securities (e.g., bonds and debentures which may be issued by U.S. or Canadian corporations) with no more than 397 calendar days remaining either to the date of maturity or the date on which, under the indenture governing the security, it may be sold back to the I, 1-6 issuer thereof for payment of principal and accrued interest. Corporate debt securities with a remaining maturity of 397 calendar days or less are liquid (and tend to become more liquid as their maturities lessen) and are traded as money market securities. Such securities also tend to have considerably less market value fluctuation than longer term issues. Corporate debt and other securities in which the Fund invests must be U.S. dollar-denominated Eligible Securities (as defined in Rule 2a-7 under the 1940 Act) that are determined to present minimal credit risks. In general, the term "Eligible Security" is limited to any security that: (i) (a) either (1) has received a short-term rating from a nationally recognized statistical rating organization ("NRSRO") or has been issued by an issuer that has received a short-term rating from an NRSRO with respect to a class of debt obligations(or any debt obligation within that class) that is comparable in priority and security with the security or (2) is subject to a guarantee that has received a short-term rating from an NRSRO, or a guarantee issued by a guarantor that has received a short-term rating from an NRSRO with respect to a class of debt obligations (or any debt obligation within that class) that is comparable in priority and security with the guarantee, (b) has a remaining maturity of 397 calendar days or less and (c) has received a rating from the requisite number of NRSROs (i.e., two, if two organizations have issued ratings and one if only one has issued a rating) in one of the two highest short-term major rating categories; or (ii) is unrated but is of comparable quality to a rated security as described in (i), above, and which at the time of issuance (a) had a remaining maturity of more than 397 calendar days and now has a remaining maturity of 397 calendar days or less, and (b) has not received a long-term rating from an NRSRO in any NRSRO major rating category outside of the NRSRO's three highest major rating categories, unless the security has received a long-term rating from the requisite number of NRSROs (i.e., two, if two organizations have issued ratings and one if only one has issued a rating) in one of the three highest long-term major rating categories. As indicated in the Fund's Prospectus, at least 95% of the Fund's total assets will consist of government securities and "first tier" eligible securities as defined in Rule 2a-7 under the 1940 Act. The Fund may invest up to 25% of its assets in "first tier" eligible securities of a single issuer for a period of up to three business days. The Fund may invest up to 5% of its portfolio in "second tier" eligible securities as defined in Rule 2a-7. For this purpose, "second tier" eligible securities generally are those which have been (i) rated by at least two nationally recognized statistical rating organizations in one of the two highest rating categories for short-term obligations (or so rated by one such organization if it alone has rated the security), (ii) issued by an issuer with comparable short-term obligations that are rated in one of the two highest rating categories, or (iii) if unrated, determined to be comparable to such securities. The Fund may not invest more than the greater of 1% of its total assets or $1 I, 1-7 million in "second tier" eligible securities of any single issuer. 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. U.S. TREASURY OBLIGATIONS U.S. Government securities consist of various types of marketable securities issued by the U.S. Treasury, that is, bills, notes and bonds. Such securities are direct obligations of the U.S. Government and differ mainly in the lengths of their maturities. Treasury bills, the most frequently issued marketable government security, have a maturity of up to one year and are issued on a discount basis. I, 1-8 Securities issued or guaranteed as to principal and interest by the U.S. Government 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 currently 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 nistitutions, which then trade the component parts independently. The interest and principal payments on the U.S. Treasury securities underlying STRIPS are direct obligations of the U.S. Government. U.S. GOVERNMENT AGENCY AND SIMILAR SECURITIES U.S. Government agency securities consist of fixed income securities issued or guaranteed by agencies and instrumentalities of the U.S. Government, including the various types of instruments currently outstanding or which may be offered in the future. Agencies and instrumentalities include, among others, the Federal Housing Administration, Government National Mortgage Association ("GNMA"), Federal National Mortgage Association, Export-Import Bank of the U.S., Federal Maritime Administration, General Services Administration and Tennessee Valley Authority. Instrumentalities include, for example, the Central Bank for Cooperatives, Federal Home Loan Banks, Federal Farm Credit Banks, Student Loan Marketing Association, Federal Home Loan Mortgage Corporation, Federal Intermediate Credit Banks, Federal Land Banks and the U.S. Postal Service. The Fund will purchase such securities only so long as they are backed by any of (i) the full faith and credit of the U.S. Treasury (e.g., U.S. Treasury bills, bonds and notes and GNMA participation certificates), (ii) the right of the issuer to borrow a limited amount from the U.S. Treasury (e.g., securities of the Farmers Home Administration), (iii) the discretionary authority of the U.S. Government to purchase certain obligations of the agency or instrumentality (e.g., securities of the Federal National Mortgage Association) or (iv) the credit of the agency or instrumentality (e.g., securities of a Federal Home Loan Bank). The Fund may also invest in the obligations of mixed-ownership Government corporations. 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. CUSTODIAL RECEIPTS The Fund may acquire, subject to the limitations described herein, custodial receipts that evidence ownership of future interest payments, principal payments or both on certain I, 1-9 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 treated as U.S. Government securities. DEBT SECURITIES RATINGS DESCRIPTION OF COMMERCIAL PAPER RATINGS 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 A 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. DESCRIPTION OF THE HIGHEST CORPORATE BOND AND DEBENTURE RATINGS OF S&P AAA: An obligation rated within the AAA category has the highest rating assigned by S&P. Capacity to meet the financial commitment on the obligation is extremely strong. AA: An obligation rated within the AA category differs from AAA issues only in small degree. Capacity to meet the financial commitment on the obligation is very strong. DESCRIPTION OF THE HIGHEST CORPORATE BOND AND DEBENTURE RATINGS OF MOODY'S Aaa: Bonds which are rated within the Aaa category are judged to be of the best quality. Interest payments are protected by a large or 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 I, 1-10 issues. Aa: Bonds which are rated within the Aa category are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known 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 greater than in Aaa securities. For more information on certain investment practices that the Fund may follow, see "Additional Risks and Information Concerning Investment Techniques" in Section Two. G. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES TRUSTEES AND OFFICERS As of June 30, 2001, the Trustees and principal officers of the Trust as a group owned approximatley 1.8% of the Fund's outstanding Class S shares, and owned none of the Fund's outstanding Class B(1), Class B, Class C or Class E shares. OTHER PERSONS The following persons or entities were the record and/or beneficial owners of the approximate percentages of the Fund's outstanding shares. All information is as of June 30, 2001. CLASS HOLDER % OF CLASS - ----- ------ ---------- C State Street Bank 9.0 Cust. for Rollover IRA R.L. Seyferth Prudential Securities, Inc. FBO 6.3 American National Bank & Trust Company As Trustee for Emerald Investments LP Prudential Securities, Inc. FBO 24.4 American National Bank & Trust Company As Trustee for Lincoln Group LP PaineWebber for the Benefit of 7.4 M. Froman, Trustee I, 1-11 C Prudential Securities, Inc. 6.4 FBO Lincoln Group Limited S State Street Bank TTEE 17.8 Billy Graham Evangelistic Assoc. 1994 Pension Plan Chase Manhattan Bank NA 19.3 Pension Plans in MetLife Savings MetLife Defined Contribution Group 37.9 SSRM Holdings, Inc. 8.6 The full name and address of each of the above persons or entities are as follows: State Street Bank & Trust Company Custodian for the Rollover IRA of R.L. Seyferth P.O. Box 2286 Rockwall, TX 75087 Prudential Securities, Inc. For the benefit of American National Bank & Trust Company For Emerald Investments LP 500 Skokie Boulevard, Ste. 310 Northbrook, IL 60062 Prudential Securities, Inc. For the benefit of American National Bank & Trust Company Trustee for Lincoln Group LP 500 Skokie Boulevard, Ste. 310 Northbrook, IL 60062 PaineWebber for the benefit of M. Froman, Trustee 6619 S. Dixie Highway, Ste. 192 Miami, FL 33143 Prudential Securities, Inc. For the benefit of Lincoln Group Limited I, 1-12 Hokin General Partner 40 Skokie Boulevard, Ste. 105 Northbrook, IL 60062 State Street Bank & Trust Company Trustee for the Billy Graham Evangelist Assoc. 1994 Pension Plan P.O. Box 351 Boston, MA 02101 Chase Manhattan Bank, NA(a) Trustee for Pension Plans in MetLife Savings Four New York Plaza New York, NY 10004 MetLife Defined Contribution Group (b) Two Montgomery Street Jersey City, NJ 07302 SSRM Holdings, Inc. One Financial Center Boston, MA 02111 (a) Chase Manhattan Bank, N.A. holds such shares as trustee under certain employment benefit plans serviced by Metropolitan Life Insurance Company. (b) The Fund believes that each named recordholder does not have beneficial ownership of such shares. The beneficial owner of 25% or more of a voting security is presumed to have "control" for purposes of the 1940 Act, absent a determination to the contrary by the Securities and Exchange Commission. A person who controls a particular fund or a class of shares of a fund could have effective control over the outcome of matters submitted to a vote of shareholders of that fund or class. For example, a person with such ownership could significantly affect the approval of a Rule 12b-1 plan proposal for a particular class. I, 1-13 H. TRUSTEE COMPENSATION The Trustees of State Street Research Money Market Trust were compensated as follows:
TOTAL COMPENSATION AGGREGATE TOTAL FROM ALL STATE STREET COMPENSATION COMPENSATION RESEARCH FUNDS AND FROM STATE STREET FROM ALL STATE STREET METROPOLITAN SERIES NAME OF RESEARCH MONEY RESEARCH FUNDS PAID FUND, INC. PAID TRUSTEE MARKET FUND(a) TO TRUSTEES(b) TO TRUSTEES(c) - ------- -------------- -------------- -------------- Bruce R. Bond $ 3,048 $ 72,000 $ 72,000 Richard S. Davis $ 0 $ 0 $ 0 Steve A. Garban $ 3,276 $ 77,400 $ 118,300 Dean O. Morton $ 3,461 $ 81,800 $ 118,800 Susan M. Phillips $ 3,048 $ 72,000 $ 72,000 Toby Rosenblatt $ 3,048 $ 72,000 $ 72,000 Michael S. Scott Morton $ 3,487 $ 82,400 $ 118,800
(a) For the Fund's fiscal year ended March 31, 2001. The Fund does not provide any pension or retirement benefits for the Trustees. (b) Includes compensation on behalf of all series of 10 investment companies for which the Investment Manager serves as sole investment adviser. The figure in this column is for the 12 months ended December 31, 2000. (c) Includes compensation on behalf of all series of 10 investment companies for which the Investment Manager serves as sole investment adviser and all series of Metropolitan Series Fund, Inc. The primary adviser to Metropolitan Series Fund, Inc. is MetLife Advisers, LLC, which has retained State Street Research & Management Company and other unrelated managers as sub-advisers to the series of Metropolitan Series Fund, Inc. The figures indicated in this column include compensation relating to all series of Metropolitan Series Fund, Inc. including those sub-advised by State Street Research & Management Company and those sub-advised by unrelated managers. "Total Compensation From All State Street Research Funds and Metropolitan Series Fund, Inc. Paid to Trustees" is for the 12 months ended December 31, 2000. For more information on the Trustees and officers of State Street Research Money Market Trust, see Section II, B of this Statement of Additional Information. I. INVESTMENT ADVISORY FEE 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. I, 1-14 The annual advisory fee rate: 0.50%. The advisory fees for investment management, and the payments for other assistance and services, paid by the Fund to the Investment Manager for the last three fiscal years were as follows:
PAYMENTS FOR ADVISORY OTHER ASSISTANCE FEES AND SERVICES -------- ---------------- Fiscal year ended March 31, 2001 $ 2,470,521 $ 74,040 Fiscal year ended March 31, 2000 $ 2,235,923 $ 0 Fiscal year ended March 31, 1999 $ 1,589,742 $ 0
For more information on the investment advisory arrangements, see Section II, C of this Statement of Additional Information. J. DISTRIBUTOR'S PAYMENT OF FUND EXPENSES The Distributor and its affiliates have from time to time and in varying amounts voluntarily assumed some portion of fees and expenses relating to the Fund. Fees waived and/or expenses assumed for the last three fiscal years were as follows: FEES WAIVED AND/OR EXPENSES ASSUMED --------------- Fiscal year ended March 31, 2001 $ 1,666,753 Fiscal year ended March 31, 2000 $ 1,134,257 Fiscal year ended March 31, 1999 $ 364,563 K. BROKERAGE COMMISSIONS During the fiscal years ended March 31, 1999, 2000 and 2001, the Fund paid no brokerage commissions in secondary trading. During and at the end of its most recent fiscal year, the Fund held in its portfolio no securities of any entity that might be deemed to be a regular broker-dealer of the Fund as defined under the 1940 Act. For more information on portfolio transactions, see Section II, G of this Statement of Additional Information. I, 1-15 L. SALES CHARGES ON SHARES OF THE FUND For the past three fiscal years, the Distributor received contingent deferred sales charges upon redemption of Class B(1), Class B and Class C shares of the Fund and paid initial commissions to securities dealers for sales of shares as follows:
FISCAL YEAR ENDED FISCAL YEAR ENDED FISCAL YEAR ENDED MARCH 31, 2001 MARCH 31, 2000 MARCH 31, 1999 -------------- -------------- -------------- CONTINGENT COMMISSIONS CONTINGENT COMMISSIONS CONTINGENT COMMISSIONS DEFERRED PAID TO DEFERRED PAID TO DEFERRED PAID TO SALES CHARGES DEALERS SALES CHARGES DEALERS SALES CHARGES DEALERS ------------- ------- ------------- ------- ------------- ------- Class B(1)* $ 48,894 $ 25,893 $ 17,886 $ 40,922 $ 110 $ 1,490 Class B $ 124,631 $ 1,513 $ 336,266 $ 8,618 $ 246,572 $ 19,921 Class C $ 1,838 $ 1,437 $ 10,023 $ 591 $ 806 $ 0
*Class B(1) introduced January 1, 1999 For more information about sales charges, see Section II, I of this Statement of Additional Information. M. RULE 12B-1 FEES The Fund has adopted plans of distribution pursuant to Rule 12b-1 under the 1940 Act ("Distribution Plan(s)"). Under the Distribution Plans, the Fund may engage, directly or indirectly, in financing any activities primarily intended to result in the sale of shares of the Fund. Under the Distribution Plans, the Fund provides the Distributor with a service fee at an annual rate of 0.25% on the average daily net assets of Class B(1), Class B and Class C shares. The Fund also provides a distribution fee at an annual rate of 0.75% on the average daily net assets of Class B(1), Class B and Class C shares. The service and distribution fees are used to cover personal services and/or the maintenance of shareholder accounts provided by the Distributor, brokers, dealers, financial professionals or others, and sales, promotional and marketing activities relating to the respective classes. Under the Distribution Plan covering Class B and Class C shares, the Fund's payments are intended to reimburse the Distributor for expenditures incurred under the plan, and any unused payments are returnable to the Fund. Under the Distribution Plan covering Class B(1) shares, the Fund's payments compensate the Distributor for services and expenditures incurred under the plan, and none of the payments are returnable to the Fund. The Distributor may have also used additional resources of its own for further expenses on behalf of the Fund. During the fiscal year ended March 31, 2001, the Fund paid the Distributor fees under I, 1-16 the Distribution Plan and the Distributor used all of such payments for expenses incurred on behalf of the Fund as follows:
CLASS B(1) CLASS B CLASS C ---------- ------- ------- Advertising $ 0 $ 0 $ 0 Printing and mailing of prospectuses to 0 0 0 other than current shareholders Compensation to dealers 26,444 159,992 7,208 Compensation to sales personnel 11,698 0 11,552 Interest 0 0 0 Carrying or other financing charges 0 0 0 Other expenses: marketing; general 4,858 224 4,709 Fees to offset carryforwards* 0 78,651 0 --------- ------ -------- Total Fees $ 43,000 $ 238,867 $ 23,469 ========= ========== ========= Unreimbursed expenses carried forward: Amount $ 46,430 $ 0 $ 458,089 % of net assets at year end 0.45% 0% 10.09%
- ---------------------------------------- * Net fees result from the timing of expenditures and are used against expense carryforwards The Distributor may have also used additional resources of its own for further expenses on behalf of the Fund. For more information about Rule 12b-1 fees, see Section II, I of this Statement of Additional Information. N. PERFORMANCE All calculations of performance data in this section reflect voluntary measures, if any, by the Investment Manager or its affiliates to reduce fees or expenses relating to the Fund. Performance data for a specified class includes periods prior to the adoption of class I, 1-17 designations in 1993. At that time, new share class designations were assigned based on the pricing applicable to shares sold thereafter, and higher Rule 12b-1 fees were imposed. The application of the additional Rule 12b-1 fees, if any, of up to 1% will, for periods after June 1, 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. Performance for Class B(1) shares reflects Class B performance through December 31, 1998. Class B(1) shares were introduced on January 1, 1999. STANDARD TOTAL RETURN The average annual total return ("standard total return") of each class of shares of the Fund was as follows:
TEN YEARS FIVE YEARS ONE YEAR ENDED ENDED ENDED MARCH 31, 2001 MARCH 31, 2001 MARCH 31, 2001 -------------- -------------- -------------- Class B(1) 3.71% 3.73% -0.19% Class B 3.71% 3.73% -0.19% Class C 3.72% 4.07% 3.81% Class E 4.52% 5.11% 5.86% Class S 4.52% 5.11% 5.86%
NONSTANDARD TOTAL RETURN The nonstandard total return of each class of shares of the Fund for the six months ended March 31, 2001, without taking sales charges into account, was as follows: Class B(1) 2.31% Class B 2.31% Class C 2.31% Class E 2.82% Class S 2.82% For more information about performance, see Section II, K of this Statement of Additional Information. I, 1-18 STATEMENT OF ADDITIONAL INFORMATION SECTION II TABLE OF CONTENTS PAGE A. Additional Information Concerning Investment Restrictions, Certain Risks and Investment Techniques II-1 B. The Trust, the Trustees and Officers, and Fund Shares II-4 C. Investment Advisory Services II-12 D. Purchase and Redemption of Fund Shares II-13 E. Shareholder Accounts II-17 F. Net Asset Value II-21 G. Portfolio Transactions II-22 H. Certain Tax Matters II-26 I. Distribution of Fund Shares II-27 J. Calculation of Performance Data II-29 K. Custodian II-32 L. Independent Accountants II-32 M. Financial Statements II-32 This Section II contains general information applicable to the fund identified on the cover page of this Statement of Additional Information. A. ADDITIONAL INFORMATION CONCERNING INVESTMENT RESTRICTIONS, CERTAIN RISKS AND INVESTMENT TECHNIQUES The Fund follows certain fundamental and nonfundamental investment restrictions. The fundamental and nonfundamental investment restrictions for the Fund identified on the cover page of this Statement of Additional Information are included in Section I of this Statement of Additional Information. FOREIGN BANKS AND SECURITIES The Fund may elect to concentrate its investments in obligations of domestic banks, including certain U.S. branches and agencies of foreign banks and certain foreign branches of U.S. banks as described under "Money Market Instruments," in Section I. The Fund expects that investment, if any, in such obligations will consist principally of obligations which are issued by U.S. branches and agencies of foreign banks for sale in the U.S., and the Investment Manager believes that the risks described below are reduced in the case of such bank obligations. The Fund also may invest up to 25% of its total assets in obligations of foreign banks located abroad and obligations of foreign branches of domestic banks not having a guarantee of a U.S. bank. This 25% limit does not apply to investments in U.S. branches of foreign banks, which may be considered domestic banks if it can be demonstrated that they are subject to the same regulation as United States banks. II-1 The Fund may invest up to 15% of its total assets in money market instruments of issuers organized and located in Canada payable in U.S. dollars as described in the Prospectus, subject to the issuer diversification and other restrictions described in the Prospectus and Statement of Additional Information. Securities of such issuers guaranteed as to principal and interest by a U.S. parent and otherwise meeting applicable quality standards will not be included for purposes of calculating the 15% limitation. Investing in foreign branches of U.S. banks, U.S. branches of foreign banks, foreign branches of foreign banks and U.S. agencies of foreign banks may involve risks. These risks may include future unfavorable political and economic developments, possible withholding or confiscatory taxes, seizure of foreign deposits, currency controls, interest limitations and other governmental restrictions that might affect payment of principal or interest, and possible difficulties pursuing or enforcing claims against banks located outside the U.S. Additionally, foreign issuers are not generally subject to uniform accounting, auditing and financial reporting standards or other regulatory requirements and practices comparable to U.S. issuers, and there may be less public information available about foreign banks and their branches and agencies. 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 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 10% of the Fund's net assets. SECURITIES LENDING The Fund may receive a lending fee and 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, 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 II-2 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 borrowers which are deemed by the Investment Manager or its agents to be of good financial standing. 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 custodian holding fund assets 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 OR ILLIQUID SECURITIES The Fund may invest in illiquid securities. Securities are illiquid if they cannot be resold in the ordinary course of business within 7 business days at approximately the value at which they are carried on the Fund's books. Securities which have been registered with the SEC have historically been more liquid than unregistered securities, also known as restricted securities. Restricted securities may be liquid if there is a market for them. In recent years, restricted securities have become more liquid among institutions such as the Fund. Some restricted securities may be resold in accordance with Rule 144A under the Securities Act of 1933. 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. Restricted securities including those resellable under Rule 144A 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, marketmaking activity, and the nature of the security and marketplace trades. The Trustees periodically monitor the liquidity determinations. Investments in restricted securities including those resellable under Rule 144A 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 possible illiquidity and subjective valuation of such securities in the II-3 absence of a market for them. OTHER INVESTMENT COMPANIES The Fund may invest in securities of other investment companies, including affiliated investment companies, such as open- or closed-end management investment companies, hub and spoke (master/feeder) funds, pooled accounts or other similar, collective investment vehicles. As a shareholder of an investment company, the Fund may indirectly bear service and other fees in addition to the fees the Fund pays its service providers. Similarly, other investment companies may invest in the Fund. Other investment companies that invest in the Fund may hold significant portions of the Fund and materially affect the sale and redemption of Fund shares and the Fund's portfolio transactions. B. THE TRUST, THE TRUSTEES AND OFFICERS, AND FUND SHARES The Trustees of the Trust have authority to issue an unlimited number of shares of beneficial interest of each 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. The Trustees have authorized shares of the Fund to be issued in five classes: Class B(1) (introduced January 1, 1999), Class B, Class C, Class E and Class S. 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 B(1), 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 in this Statement of Additional Information, each share of the Fund has equal dividend, redemption and liquidation rights with other shares of the Fund, and when issued, is fully paid and nonassessable by the Fund. Shareholder rights granted under the Master Trust Agreement may be modified, suspended or repealed, in whole or part, by the Trustees, except as provided by law or under the terms of the Master Trust Agreement. The Master Trust Agreement may not be amended by the Trustees if the amendment would (a) repeal the limitation on personal liability of any shareholder or Trustee, or repeal the prohibition of assessment upon shareholders, without the express consent of each shareholder or Trustee involved or (b) adversely modify any shareholder right without the consent of the holders of a majority of the outstanding shares entitled to vote. 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 II-4 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. The Trustees and Officers of each Trust are identified below, together with biographical information. II-5
STATE STREET CAPITAL EQUITY EXCHANGE FINANCIAL GROWTH RESEARCH: TRUST TRUST TRUST TRUST TRUST ----- ----- ----- ----- ----- TRUSTEES AND PRINCIPAL OFFICERS Bruce R. Bond Trustee Trustee Trustee Trustee Trustee John R. Borzilleri Vice President John F. Burbank Vice President Paul J. Clifford, Jr. Richard S. Davis Chairman of the Chairman of Chairman of Chairman of Chairman Board, the Board, the Board, the Board, of the President and President and President and President and Board, Chief Executive Chief Chief Chief President Officer Executive Executive Executive and Chief Officer Officer Officer Executive Officer Maureen G. Depp Catherine Dudley Vice President Bruce A. Ebel Vice President Steve A. Garban Trustee Trustee Trustee Trustee Trustee Lawrence J. Haverty, Vice President Jr. John H. Kallis Vice President Dyann H. Kiessling
MASTER MONEY STATE STREET INCOME INVESTMENT MARKET SECURITIES TAX-EXEMPT RESEARCH: TRUST TRUST TRUST TRUST TRUST ----- ----- ----- ----- ----- TRUSTEES AND PRINCIPAL OFFICERS Bruce R. Bond Trustee Trustee Trustee Trustee Trustee John R. Borzilleri John F. Burbank Paul J. Clifford, Jr. Vice President Richard S. Davis Chairman Chairman Chairman of Chairman of the Chairman of the of the of the the Board, Board, Board, President and Board, Board, President and President and Chief Executive President President Chief Chief Executive Officer and Chief and Chief Executive Officer Executive Executive Officer Officer Officer Maureen G. Depp Vice President Catherine Dudley Bruce A. Ebel Steve A. Garban Trustee Trustee Trustee Trustee Trustee Lawrence J. Haverty, Jr. John H. Kallis Vice Vice President Vice President Vice President President Dyann H. Kiessling Vice President
II-6
STATE STREET CAPITAL EQUITY EXCHANGE FINANCIAL GROWTH RESEARCH: TRUST TRUST TRUST TRUST TRUST ----- ----- ----- ----- ----- TRUSTEES AND PRINCIPAL OFFICERS Kevin J. Lema Mark A. Marinella Vice President Francis J. McNamara, Secretary Secretary Secretary Secretary Secretary III Thomas P. Moore, Jr. Vice President Vice President Vice President Dean O. Morton Trustee Trustee Trustee Trustee Trustee Susan M. Phillips Trustee Trustee Trustee Trustee Trustee E.K. Easton Vice President Ragsdale, Jr. Daniel J. Rice III Vice President Douglas A. Romich Treasurer Treasurer Treasurer Treasurer Treasurer Toby Rosenblatt Trustee Trustee Trustee Trustee Trustee Michael S. Scott Trustee Trustee Trustee Trustee Trustee Morton Tucker Walsh Vice President James M. Weiss Vice President Vice President Vice President Vice President Vice President Elizabeth M. Westvold
MASTER MONEY STATE STREET INCOME INVESTMENT MARKET SECURITIES TAX-EXEMPT RESEARCH: TRUST TRUST TRUST TRUST TRUST ----- ----- ----- ----- ----- TRUSTEES AND PRINCIPAL OFFICERS Kevin J. Lema Vice President Mark A. Marinella Vice Vice President Vice President Vice President President Francis J. McNamara, Secretary Secretary Secretary Secretary Secretary III Thomas P. Moore, Jr. Dean O. Morton Trustee Trustee Trustee Trustee Trustee Susan M. Phillips Trustee Trustee Trustee Trustee Trustee E.K. Easton Ragsdale, Jr. Daniel J. Rice III Douglas A. Romich Treasurer Treasurer Treasurer Treasurer Treasurer Toby Rosenblatt Trustee Trustee Trustee Trustee Trustee Michael S. Scott Trustee Trustee Trustee Trustee Trustee Morton Tucker Walsh James M. Weiss Vice Vice Vice President President President Elizabeth M. Westvold Vice President
II-7
STATE STREET CAPITAL EQUITY EXCHANGE FINANCIAL GROWTH RESEARCH: TRUST TRUST TRUST TRUST TRUST ----- ----- ----- ----- ----- TRUSTEES AND PRINCIPAL OFFICERS John T. Wilson Kennard Woodworth, Vice President Vice President Vice Jr. President Peter A. Zuger Vice President
MASTER MONEY STATE STREET INCOME INVESTMENT MARKET SECURITIES TAX-EXEMPT RESEARCH: TRUST TRUST TRUST TRUST TRUST ----- ----- ----- ----- ----- TRUSTEES AND PRINCIPAL OFFICERS John T. Wilson Vice President Kennard Woodworth, Vice President Jr. Peter A. Zuger Vice President
II-8 Additional information on the Trustees, Directors and principal officers of the State Street Research Funds is provided below. The address for each person is One Financial Center, Boston, Massachusetts 02111. Bruce R. Bond: He is 55. During the past five years, Mr. Bond has also served as Chairman of the Board, Chief Executive Officer and President of PictureTel Corporation, Chief Executive Officer of ANS Communications (a communications networking company) and as managing director of British Telecommunications PLC. *John R. Borzilleri, MD: He is 42 and his principal occupation is Senior Vice President of the Investment Manager. During the past five years he has also served as a Vice President of the Investment Manager, as a Vice President of Montgomery Securities and as an equity analyst at Dean Witter. *John F. Burbank: He is 64 and his principal occupation is currently, and during the past five years has been, Senior Vice President of the Investment Manger. *Paul J. Clifford, Jr.: He is 39 and his principal occupation is Senior Vice President of the Investment Manager. During the past five years he has also served as Vice President of the Investment Manager. *Richard S. Davis. He is 55 and his principal occupation is Chairman of the Board, President and Chief Executive Officer of the Investment Manager. During the past five years he has also served as Senior Vice President, Fixed Income Investments for Metropolitan Life Insurance Company and as Managing Director for J.P. Morgan Investment Management. Mr. Davis's other principal business affiliations include Chairman of the Board, President and Chief Executive Officer of State Street Research Investment Services, Inc. and President and Chief Executive Officer of SSRM Holdings, Inc. *Maureen Depp: She is 47 and her principal occupation is Senior Vice President of the Investment Manager. During the past five years she has also served as a Vice President of the Investment Manager and as an analyst at Wellington Management. *Catherine Dudley: She is 41 and her principal occupation is senior Vice President of the Investment Manager. During the past five years she has also served as a senior portfolio manager at Chancellor Capital Management. *Bruce A. Ebel: He is 45 and his principal occupation is Senior Vice President of the Investment Manager. During the past five years he has also served as a Vice President and portfolio manager at Loomis, Sayles & Company, L.P. +Steve A. Garban: He is 63 and he is retired and was formerly Senior Vice President for Finance and Operations and Treasurer of The Pennsylvania State University. Mr. Garban is also a Director of Metropolitan Series Fund, Inc. (an investment company). II-9 *Lawrence J. Haverty, Jr.: He is 57 and his principal occupation is currently, and during the past five years has been, Senior Vice President of the Investment Manager. *John H. Kallis: He is 60 and his principal occupation is currently, and during the past five years has been, Senior Vice President of the Investment Manager. *Dyann H. Kiessling: She is 38 and her principal occupation is Vice President of the Investment Manager. During the past five years she has also served as a fixed income trader for the Investment Manager. *Kevin J. Lema. He is 33 and his principal occupation is currently, and during the past five years has been, Trader for the Investment Manager. *Mark A. Marinella: He is 43 and his principal occupation is Executive Vice President of the Investment Manager. During the past five years, he has also served as Senior Vice President of the Investment Manager and as a Principal and Senior Portfolio Manager at STW Fixed Income Management Ltd. *Francis J. McNamara, III: He is 45 and his principal occupation is Executive Vice President, General Counsel and Secretary of the Investment Manager. During the past five years he has also served as Senior Vice President of the Investment Manager. Mr. McNamara's other principal business affiliations include Executive Vice President, General Counsel and Clerk of State Street Research Investment Services, Inc.; and Secretary and General Counsel of SSRM Holdings, Inc. *Thomas P. Moore, Jr.: He is 62 and his principal occupation is currently, and during the past five years has been, Senior Vice President of the Investment Manager. +Dean O. Morton: He is 69 and he is retired and was formerly Executive Vice President, Chief Operating Officer and Director of Hewlett-Packard Company. Mr. Morton is also a Director of Metropolitan Series Fund, Inc. (an investment company). Susan M. Phillips: She is 56 and her principal occupation is currently Dean of the School of Business and Public Management at George Washington University and Professor of Finance. Previously, she was a member of the Board of Governors of the Federal Reserve System and Chairman and Commissioner of the Commodity Futures Trading Commission. *E.K. Easton Ragsdale, Jr.: He is 49 and his principal occupation is Senior Vice President of the Investment Manager. During the past five years he has also served as Vice President of the Investment Manager. *Daniel J. Rice III: He is 49 and his principal occupation is currently, and during the past five years has been, Senior Vice President of the Investment Manager. II-10 *Douglas A. Romich: He is 44 and his principal occupation is Senior Vice President and Assistant Treasurer of the Investment Manager. During the past five years, he has also served as Vice President of the Investment Manager. Mr. Romich's other principal business affiliations include Senior Vice President and Assistant Treasurer of State Street Research Investment Services, Inc. and Vice President and Assistant Treasurer of SSRM Holdings, Inc. +Toby Rosenblatt: He is 62 and his principal occupation is President of Founders Investments, Ltd. During the past five years, he has also served as President of The Glen Ellen Company, a private investment company. Mr. Rosenblatt is also a Director of Metropolitan Series Fund, Inc. (an investment company). +Michael S. Scott Morton: He is 63 and 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. Dr. Scott Morton is also a Director of Metropolitan Series Fund, Inc. (an investment company). *Tucker Walsh: He is 31 and his principal occupation is Vice President of the Investment Manager. During the past five years he has also served as an analyst for the Investment Manager and for Chilton Investment Partners and Cowen Asset Management. *James M. Weiss: He is 54 and his principal occupation is Executive Vice President and Director of the Investment Manager. During the past five years he has also served as Senior Vice President of the Investment Manager. *Elizabeth M. Westvold: She is 41 and her principal occupation is Senior Vice President of the Investment Manager. During the past five years she has also served as Vice President of the Investment Manager. *John T. Wilson: He is 37 and his principal occupation is Senior Vice President of the Investment Manager. During the past five years he has also served as a Vice President of the Investment Manager, as an analyst and portfolio manager at Phoenix Home Life Mutual Insurance Company and as a Vice President of Phoenix Investment Counsel Inc. *Kennard Woodworth, Jr.: He is 62 and his principal occupation is currently, and during the past five years has been, Senior Vice President of the Investment Manager. *Peter A. Zuger: He is 53. His principal occupation is Senior Vice President of the Investment Manager. During the past five years he has also served as Vice President of American Century Investment Management Company. - ------------------ * These Trustees and/or Officers are 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 Director of Metropolitan Series Fund, Inc., which has an advisory relationship with the Investment Manager or its parent, MetLife. II-11 C. INVESTMENT ADVISORY SERVICES Under the provisions of the Trust's Master Trust Agreement and the laws of Massachusetts, responsibility for the management and supervision of the Fund rests with the Trustees. 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 one of the nation's first mutual funds, presently known as State Street Research Investment Trust, 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. The Investment Manager has overall responsibility for managing the investments of the Fund, subject to the authority of the Board of Trustees. The Advisory Agreement provides that the Investment Manager shall furnish the Fund with an investment program and investment administrative services, as may be required from time to time. Under the Advisory Agreement, the Investment Manager also provides other assistance and services in connection with a number of business matters for the Fund, for example the registration of the Fund's shares, subject to reimbursement of related costs. The Investment Manager compensates all personnel and Trustees of the Trust if such persons are employees of the Investment Manager or its affiliates. The Investment Manager is an indirect, wholly owned subsidiary of MetLife. The Advisory Agreement provides that it shall continue in effect with respect to the Fund for a period of two years after its initial effectiveness and will continue from year to year thereafter as long as it is approved at least annually both (i) by a vote of a majority of the outstanding voting securities of the Fund (as defined in the 1940 Act) or by the Trustees of the Trust, and (ii) in either event by a vote of a majority of the Trustees who are not parties to the Advisory Agreement or "interested persons" of any party thereto, cast in person at a meeting called for the purpose of voting on such approval. The Advisory Agreement may be terminated on 60 days' written notice by either party and will terminate automatically in the event of its assignment, as defined under the 1940 Act and regulations thereunder. Such regulations provide that a transaction which does not result in a change of actual control or management of an adviser is not deemed an assignment. Information about rates at which fees are calculated under the Advisory Agreement with respect to the Funds identified on the cover page of the Statement of Additional Information, as well as the fees paid to the Investment Manager in previous years, if applicable, is included in Section I of this Statement of Additional Information. The Fund, the Investment Manager, and the Distributor have adopted a Code of Ethics II-12 pursuant to the requirement of the 1940 Act. Under the Code of Ethics, 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. Transactions in securities that may be held by the Fund are permitted, subject to compliance with applicable provisions of the Code. Personal securities transactions must be reported quarterly and broker confirmations of such transactions must be provided for review. D. PURCHASE AND REDEMPTION OF FUND SHARES Shares of the Fund are distributed by State Street Research Investment Services, Inc., the Distributor. The Fund offers multiple 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 E and Class S shares, a sales charge, which is imposed on a deferred basis (the Class B(1), Class B and Class C shares). Class B shares are available only to current Class B shareholders through reinvestment of dividends and capital gains distributions or through exchanges from existing Class B accounts of the State Street Research Funds. General information on how to buy shares of the Fund, as well as sales charges involved, are set forth under "Your Investment" in the Prospectus. The following supplements that information. PURCHASE ORDERS. When a purchase order is placed through a dealer, that dealer is responsible for transmitting the order promptly to the State Street Research Service Center (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 B(1), CLASS B AND CLASS C SHARES. Class B(1), Class B and Class C shares are offered solely in connection with exchanges from "Eligible Funds" (which include the Fund and other funds as designated by the Distributor from time to time). CONVERSION OF CLASS B(1) AND CLASS B SHARES TO CLASS E SHARES. A shareholder's Class B(1) and Class B shares of the Fund, including all shares received as dividends or distributions with respect to such shares, will automatically convert to Class E shares of the Fund at the end of eight years following the issuance of such shares; consequently, they will no longer be subject to the higher expenses borne by Class B(1) and 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 E shares than the shares so converted. As noted above, holding periods for Class B(1) shares received in exchange for Class B(1) shares of other Eligible Funds and 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 B(1), 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(1) 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(1) and Class B shares and receive in lieu thereof an annual fee, usually II-13 1% with respect to such outstanding 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(1), 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(1), Class B or Class C shares, it will be assumed that a redemption of the shares is made first of 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 the shareholder for the longest period of time. Class B(1) shares that are redeemed within a six-year period after their purchase, 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 B(1), 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. The contingent deferred sales charge will be waived for participant-initiated distributions from State Street Research prototype employee retirement plans. 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. Certain employee benefit plans sponsored by a financial professional may be subject to other conditions for waivers under which the plans may initially invest in Class B(1) or Class B shares and then Class A shares of certain funds upon meeting specific criteria. No contingent deferred sales charges apply to shares held by MetLife, the Investment Manager or the Distributor. CLASS E SHARES. Class E shares may be issued directly or through exchanges to certain II-14 shareholders of the Fund or other Eligible Funds who previously held shares that are not subject to any future sales charge or service fees or distribution fees. 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 MetLife, its affiliates, or both for which Class S shares have been designated. 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 direct and indirect costs of a particular program, expected assets, account sizes and similar considerations. Class S shares are made available to (a) current and former employees, officers and directors of the Investment Manager and Distributor; (b) current and former directors or trustees of the investment companies for which the Investment Manager serves as the primary investment adviser; and (c) relatives of any such individuals, provided that the relationship is directly verified by such individuals to the Distributor, and any beneficial account for such relatives or individuals. Class E shares acquired by such individuals and relatives may, in the discretion of the Distributor, be converted into Class S shares. 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. 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, as amended, the Fund may issue its shares at net asset value (or more) to such entities or to their security holders. IN-KIND PURCHASE OPTION. In the discretion of the Investment Manager, shares of the Fund may be offered for purchase partly or entirely in exchange for securities. This option is available only in very limited circumstances. The Investment Manager will not approve the acceptance of any securities in exchange for Fund shares unless it believes the securities are appropriate investments for the Fund. 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. II-15 SYSTEMATIC WITHDRAWAL PLAN. A shareholder who owns noncertificated Class E or Class S shares with a value of $5,000 or more, or Class B(1), 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 12% annually (minimum $50 per withdrawal) 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 Investment--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 broker-dealers by wire or telephone for the repurchase of shares by the Distributor from the broker-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 broker-dealer is responsible for promptly transmitting a shareholder's order to the Distributor. Under certain pre-established operational arrangements, the price may be determined as of the time the order is received by the broker-dealer or its designee. 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; (4) requests to transfer the registration of shares to another owner; and (5) if checkwriting is available for the account, authorizations to establish the checkwriting privilege. 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 II-16 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. SPECIAL PROCEDURES FOR INSTITUTIONAL ACCOUNTS. To facilitate the timely processing of investments, institutions may establish special bank accounts and other direct arrangements with the Fund's custodian bank, subject to related charges by the custodian bank payable directly by the institution. Institutional accounts with $50,000,000 or more in shares of the Fund, that submit purchase orders and funds which are received in good order by not later than 2:30 p.m., may earn a dividend for that day on the shares purchased. Institutional accounts with $50,000,000 or more in shares of the Fund, that submit redemption requests which are received in good order by not later than 2:30 p.m., may arrange for the proceeds of the redemption to be wired out on the same day. E. SHAREHOLDER ACCOUNTS General information on shareholder accounts is included in the Fund's Prospectus under "Your Investment." 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. 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. II-17 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. Share certificates will not be issued. 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. 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. II-18 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 B(1), 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. Exchanges of Class E shares of the Fund into Class A shares of 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(1), Class B and Class C shares, the holding period of the redeemed shares is "tacked" to the holding period of any acquired shares. The period any Class E shares are held is not tacked to the holding period of any acquired shares. No exchange transaction fee is currently imposed on any exchange. 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 and Internet privileges with respect to the Fund (see "Your Investment-- Account Policies--Telephone and Internet Requests" in the Fund's Prospectus and "--Telephone and Internet 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. 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 determined following II-19 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 AND INTERNET PRIVILEGES. The following privileges are available: - TELEPHONE EXCHANGE AND REDEMPTION PRIVILEGE - Shareholders automatically receive this privilege unless declined. - This privilege allows a shareholder or any person claiming to act as the shareholder's representative to request exchanges into other State Street Research funds or make redemptions. - INTERNET PRIVILEGE FOR SHAREHOLDER - Shareholders may access the Fund's web site to enter transactions and for other purposes, subject to acceptance of the important conditions set forth on the web site. A shareholder with the above privileges is deemed to authorize the Fund's agents to: (1) act upon the telephone instructions of any person purporting to be any of the shareholders of an account or a shareholder's financial professional; (2) act upon the Internet instructions of any person purporting to be any of the shareholders of an account; and (3) honor any telephone or Internet instructions for a change of address. All telephone calls will be recorded. Neither the Fund, any other State Street Research Fund, the Investment Manager, the Distributor, nor any of their agents 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 or Internet requests may be unauthorized. Reasonable procedures will be followed to confirm that instructions communicated by telephone or Internet 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. II-20 F. NET ASSET VALUE Securities held by the Fund are valued on the basis of amortized cost, which involves a constant amortization of premium or accretion of discount to maturity regardless of the impact of fluctuating interest rates on the market value of the security. While this method provides certainty in valuation, it may result in periods in which the value as determined by amortized cost is higher or lower than the price the Fund would receive if it sold the security. On each day that the NYSE is open for unrestricted trading, the net asset value of the shares of the Fund is determined as of 2:30 p.m. and the close of regular trading on the NYSE, which is ordinarily 4 P.M. New York City time. 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 Fund anticipates that under ordinary and usual circumstances it will be able to maintain a constant net asset value of $1.00 per share and the Fund will use its best efforts to do so. However, such maintenance at $1.00 might not be possible if (1) there are changes in short-term interest rates or other factors such as unfavorable changes in the credit of issuers affecting the values of the securities held by the Fund and the Fund is compelled to sell such securities at a time when the prices which it is able to realize vary significantly from the values determined on the amortized cost basis or (2) the Fund should have negative net income. It is expected that the Fund will have positive net income at the time of each determination thereof. If for any reason the net income of the Fund is negative, the Fund will first offset the negative amount with respect to each shareholder account against the dividends which accrued during the month with respect to each such account. If and to the extent that such negative amount exceeds such accrued dividends at the end of the month (or at any earlier time when redemption by the shareholder would reduce the net asset value of the shares of the Fund in his account to less than the excess of such negative account over accrued dividends), the Fund will reduce the number of its outstanding shares by treating the shareholder as having contributed to the capital of the Fund that number of shares of the Fund in the account of such shareholder which represents the amount of such excess. Each shareholder will be deemed to have agreed to such contributions in these circumstances by his investment in the Fund. The utilization of the amortized cost method of valuation requires compliance with the requirements of Rule 2a-7 under the 1940 Act. Such compliance requires, among other things, the following: (1) The Trustees must adopt procedures whereby the extent of deviation, if any, of the current net asset value per share calculated using available market quotations (or an appropriate substitute which reflects current market conditions) from the Fund's net asset value per share under the amortized cost valuation method will be determined at such intervals as the Trustees deem appropriate and reasonable in light of current market conditions, and the Trustees must review periodically the amount of the deviation as well as the methods used to calculate the deviation; (2) In the event such deviation from the Fund's net asset value under the amortized II-21 cost valuation method exceeds 1/2 of 1%, the Trustees must promptly consider what action should be initiated by them, and when the Trustees believe the extent of any deviation from the Fund's net asset value per share under the amortized cost valuation method may result in material dilution or any other unfair results to investors or existing shareholders, they must take such action as they deem appropriate to eliminate or reduce to the extent reasonably practicable such dilution or unfair results (shareholders will be notified in the event any such corrective action is taken by the Trustees); (3) The Fund may not purchase any instrument with a remaining maturity greater than 397 calendar days or maintain a dollar-weighted average portfolio maturity which exceeds 90 days; (4) The Fund must limit its portfolio investments, including repurchase agreements, to those United States dollar-denominated instruments which the Trustees determine present minimal credit risks and which are "eligible securities" as defined in Rule 2a-7; and (5) The Fund must record, maintain and preserve certain records and observe certain reporting obligations in accordance with Rule 2a-7. G. 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 of their acquisition were one year or less). Because the Fund only invests in securities with remaining maturities of 397 calendar days or less, virtually all of which are excludable in determining the rate of portfolio turnover, the portfolio turnover rate for the Fund's two most recent fiscal year ends has been zero. II-22 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. 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 seeks 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 by the Investment Manager 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 contained in certain trading systems and used for portfolio analysis and modeling and also including software providing investment personnel with efficient access to current and historical data from a variety of internal and external sources); portfolio evaluation services and data relating to the relative performance of accounts. 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 II-23 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 services and to review the fees and other provisions contained in the 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. The Investment Manager's investment management personnel conduct internal surveys and use other methods to evaluate the quality of the research and other services provided by various broker-dealer firms, and the results of these efforts are made available to the equity trading department, which uses this information as a consideration to the extent described above in the selection of brokers to execute portfolio transactions. 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. 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 the services to determine the proportion which is allocable to research or investment decision-making and the proportion allocable to other purposes. The Investment Manager pays directly from its own funds for the portion allocable to uses other than research or investment decision-making. 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 providing the services. The Investment Manager has no fixed agreements or understandings with any broker-dealer as to the amount of brokerage business which that firm may expect to receive for services supplied to the Investment Manager or otherwise. There may be, however, understandings with certain firms that in order for such firms to be able to continuously supply certain services, they need to receive an allocation of a specified amount of brokerage business. These understandings are honored to the extent possible in accordance with the policies set forth above. 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. 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 II-24 issue discounts, selling concessions 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. In some instances, certain clients of the Investment Manager request it to place all or part of the orders for their account with certain brokers or dealers, which in some cases provide services to those clients. The Investment Manager generally agrees to honor these requests to the extent practicable. Clients may request that the Investment Manager only effect transactions with the specified broker-dealers if the broker-dealers are competitive as to price and execution. Where the request is not so conditioned, the Investment Manager may be unable to negotiate commissions or obtain volume discounts or best execution. In cases where the Investment Manager is requested to use a particular broker-dealer, different commissions may be charged to clients making the requests. A client who requests the use of a particular broker-dealer should understand that it may lose the possible advantage which non-requesting clients derive from aggregation of orders for several clients as a single transaction for the purchase or sale of a particular security. Among other reasons why best execution may not be achieved with directed brokerage is that, in an effort to achieve orderly execution of transactions, execution of orders that have designated particular brokers may, at the discretion of the trading desk, be delayed until execution of other non-designated orders has been completed. When the Investment Manager is seeking to buy or sell the same security on behalf of more than one client, 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 size of the order, the relative sizes of the accounts, 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. In addition, when the Investment Manager is seeking to buy or sell the same security on behalf of more than one client at approximately the same time, 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. Although sharing large transactions may sometimes affect price or volume of shares acquired or sold, the Investment Manager believes that grouping orders generally provides an advantage in execution. Where an aggregate order is executed in a series of transactions at various prices on a given day, each participating account's proportionate share of such order will reflect the average price paid or received with respect to the total order. The Investment Manager may decide not to group orders, however, 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 where aggregation might result in a large number of small transactions with consequent increased custodial and other transactional costs which may disproportionately impact smaller II-25 accounts. Such disaggregation, depending on the circumstances, may or may not result in such accounts receiving more or less favorable overall execution (including transactions costs) relative to other clients. The Investment Manager has developed certain internal policies governing its short sale trading activities, including prior notification in certain circumstances to portfolio managers of accounts holding long positions in the same security. Generally, however, sales of long positions will take precedence over short sales, regardless of the order in which the trade orders are received. Subject to the policy of seeking best overall price and execution as stated above, sales of shares of investment companies under the Investment Manager's management may be considered by the Investment Manager in the selection of broker or dealer firms to execute portfolio transactions for investment companies under its management. H. CERTAIN TAX MATTERS TAXATION OF THE FUND--IN GENERAL The Fund intends to qualify and has elected 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 qualify to 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"); and (b) satisfy certain diversification requirements on a quarterly basis. 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. 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 the sum of (1) at least 98% of its ordinary income (not taking into account any capital gains or losses) for the calendar year, (2) at least 98% of its capital gains in excess of its capital losses (adjusted for certain extraordinary losses) for the 12-month period ending on October 31 of the calendar year and (3) all ordinary income and capital II-26 gains for previous years that were not distributed during such years. For this 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. TAXATION OF THE FUND'S SHAREHOLDERS Dividends paid by the Fund from taxable net investment income and distributions of any net short-term capital gains, whether paid in cash or reinvested in additional shares, will be taxable for federal income tax purposes to shareholders as ordinary income. Distributions of net capital gains, if any, which are designated as capital gains distributions, whether paid in cash or reinvested in additional shares, will be taxable for federal income tax purposes to shareholders as capital gains, regardless of how long shareholders have held their shares. The foregoing discussion of United States federal income tax law relates solely to the application of that law to United States persons, that is, United States citizens and residents and United States corporations, partnerships, trusts and estates. Each shareholder who is not a United States person should consider the United States and foreign tax consequences of ownership of shares of the Fund, including the possibility that such a shareholder may be subject to United States withholding tax at a rate of up to 30% (or at a lower rate under an applicable treaty) on distributions from the Fund. Shareholders should consult their tax advisers about the application of the provisions of tax law described in this Statement of Additional Information in light of their particular tax situations. I. DISTRIBUTION OF FUND SHARES 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 a sales charge which is imposed on a deferred basis (the Class B(1), Class B and Class C shares). The Distributor may allow all or portions of such sales charges as concessions to dealers. II-27 PLAN(S) OF DISTRIBUTION PURSUANT TO RULE 12B-1 The Fund may have one or more Distribution Plans under Rule 12b-1, as set forth in Section I of this Statement of Additional Information for the Fund. Under the Fund's Distribution Plans, the Fund may engage, directly or indirectly, in financing any activities primarily intended to result in the sale of shares, including, but not limited to, (1) the payment of commissions to underwriters, securities dealers and others engaged in the sale of shares, including payments to the Distributor to be used to pay commissions to securities dealers (which securities dealers may be affiliates of the Distributor), (2) expenditures incurred by the Distributor in connection with the distribution and marketing of shares and the servicing of investor accounts, and (3) expenses incurred by the Distributor in connection with the servicing of shareholder accounts including payments to securities dealers and others for the provision of personal service to investors and/or the maintenance or servicing of shareholder accounts. In addition, the Distribution Plans authorize the Distributor and the Investment Manager to make payments out of management fees, 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 an indirect financing of any activity primarily resulting in the sale of shares of the Fund within the scope of Rule 12b-1 under the 1940 Act. Payments by the Fund under the Distribution Plan may be discontinued at any time. The Distributor may also voluntarily waive receipt of payments from the Fund from time to time. A rule of the National Association of Securities Dealers, Inc. ("NASD") limits annual expenditures that the Fund may incur to 0.75% for distribution expenses and 0.25% for 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 the service fees. 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. The distribution fees are used primarily to offset initial and ongoing commissions paid to dealers for selling such shares and for other sales and marketing expenditures. Dealers who have sold Class A shares are eligible for ongoing payments commencing as of the time of such sale. Dealers who have sold Class B(1), Class B and Class C shares are eligible for ongoing payments 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). 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. II-28 The payment of service and distribution fees may continue even if the Fund ceases, temporarily or permanently, to sell one or more classes of shares to new accounts. During the period the Fund is closed to new accounts, the distribution fee will not be used for promotion expenses. The service and distribution fees are used during a closed period to cover services provided to current shareholders and to cover the compensation of financial professionals in connection with the prior sale of Fund shares, among other non-promotional distribution expenditures. The Distributor may pay certain dealers and other intermediaries additional compensation for sales and administrative services. The Distributor may provide cash and non-cash 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. No interested Trustee of the Trust has any direct or indirect financial interest in the operation of the Distribution Plans. The Distributor's interest in the Distribution Plans is described above. J. 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 B, Class B(1), Class C, Class E 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 the Consumer Price Index and/or to appropriate rankings and averages such as those compiled by Lipper Analytical Services, Inc. for the Money Market Instrument Fund category or those complied by Morningstar, Inc., Money Magazine, Business Week, Forbes Magazine, The Wall Street Journal, Fortune Magazine, Investor's Daily or Donoghue's Money Fund Report. TOTAL RETURN The average annual total return ("standard total return") of the Class B, Class B(1) Class C, Class E 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. 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: II-29 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. YIELD The Fund's yield is its investment income, less expenses, expressed as a percentage of assets on an annualized basis for a seven-day period. The yield is expressed as a simple annualized yield and as a compounded effective yield. The simple annualized yield for each of the Fund's Class B(1), Class B, Class C, Class E and Class S shares is computed by determining the net change (exclusive of realized gains and losses from the sale of securities and unrealized appreciation and depreciation) in the value of a hypothetical pre-existing account having a balance of one share at the beginning of the seven-day period, dividing the net change in account value by the value of the account at the beginning of the period, and annualizing the resulting quotient (base period return) on a 365-day basis. The net change in account value reflects the value of additional shares purchased with dividends from the original shares in the account during the seven-day period, and expenses accrued during the period. The compounded effective yield for each of the Fund's Class B(1), Class B, Class C, Class E, and Class S shares is computed by compounding the unannualized base period return, by adding one to the base period return, raising the sum to a power equal to 365 divided by seven and subtracting one from the result. The simple annualized and compounded effective yields as quoted in advertisements will not be based on information as of a date more than 14 days prior to the date of publication. Actual yield will vary depending on market conditions, and principal is not insured. Actual yield also depends on the qualities, maturities and types of instruments held by the Fund as well as its operating expenses. Any net realized capital gains of the Fund in excess of any available loss carry forward will be distributed to shareholders of the Fund from time to time as is deemed appropriate in II-30 maintaining the Fund's net asset value at one dollar per share. 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 and yield results take 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. Subsidization can include the Investment Manager's waiver of a portion of its advisory fee, the Distributor's waiver of a portion of its Rule 12b-1 fee, or the assumption of a portion of the Fund's expenses by either of them or their affiliates. 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 B(1), Class B, Class C, Class E and Class S shares for periods which end no earlier than the most recent calendar quarter end and which begin one, five and ten years before. In addition, the Fund may provide nonstandardized total return results for differing periods, such as for the most recent six months, 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, if any, may not be taken into account and therefore not deducted from the hypothetical initial payment of $1,000. II-31 K. 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. L. INDEPENDENT ACCOUNTANTS PricewaterhouseCoopers LLP, 160 Federal Street, Boston, Massachusetts 02110, 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. M. 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 the State Street Research Service Center. II-32 STATE STREET RESEARCH MONEY MARKET TRUST PART C OTHER INFORMATION Item 23. Exhibits (1)(a) Second Amended and Restated Master Trust Agreement, Amendment No. 1 and Amendment No. 2 (7) (1)(b) Amendment No. 3 to Second Amended and Restated Master Trust Agreement (8) (1)(c) Amendment No. 4 to Second Amended and Restated Master Trust Agreement (10) (1)(d) Amendment No. 5 to Second Amended and Restated Master Trust Agreement (11) (2)(a) Amended and Restated By-Laws of the Registrant (1)*** (2)(b) Amendment No. 1 to Amended and Restated By-Laws effective September 30, 1992 (4)*** (2)(c) Amendment No. 2 to Amended and Restated By-Laws effective August 2, 2000 (3) Not applicable (4) Deleted (5)(a) Advisory Agreement with MetLife - State Street Investment Services, Inc. (2)*,*** C-1 (5)(c) Transfer and Assumption of Responsibilities and Rights relating to the Advisory Agreement between State Street Financial Services, Inc. and State Street Research & Management Company (4)*,*** (6)(a) First Amended and Restated Distribution Agreement with State Street Research Investment Services, Inc. (9) (6)(b) Form of Selected Dealer Agreement (7) (6)(c) Form of Bank and Bank-Affiliated Broker-Dealer Agreement (7) (6)(d) Form of Supplement No. 1 to Selected Dealer Agreement (8) (7) Not applicable (8)(a) Custodian Contract with State Street Bank and Trust Company (2)*** (8)(a)(i)Amendment to the Custodian Contract with State Street Bank and Trust Company (3)*** (8)(a)(ii)Amendment to the Custodian Contract with State Street Bank and Trust Company (9) (8)(b) Data Access Services Addendum to Custodian Contract (10) (8)(c) Amendment dated November 17, 2000 to Custodian Contract (9) Not applicable (4) (10) Opinion and consent of Goodwin, Procter & Hoar (2)*** (11) Consent of PricewaterhouseCoopers LLP (12) Not applicable (13)(a) Purchase Agreement and Investment Letter (2)*** (13)(b) Purchase Agreement and Investment Letter (2)*** (14)(a) Deleted (14)(b) Deleted (14)(c) Deleted (15)(a) Plan of Distribution Pursuant to Rule 12b-1 (5)*** (15)(b) Amendment No. 1 to Plan of Distribution Pursuant to Rule 12b-1 (6)*** (15)(c) Rule 12b-1 Plan for Class B(1) Shares (10) (16)(a) Deleted (16)(b) Deleted (17)(a) First Amended and Restated Multiple Class Expense Allocation Plan (8) (17)(b) Addendum to First Amended and Restated Multiple Class Expense Allocation Plan (10) (17)(c) State Street Research & Management Company Code of Ethics (11) C-2 (18)(a) Powers of Attorney (7) (18)(b) Power of Attorney for Susan M. Phillips (10) (18)(c) Power of Attorney for Bruce R. Bond (10) (18)(d) Power of Attorney for Richard S. Davis (18)(e) Power of Attorney for Douglas A. Romich (19) Certificate of Board Resolution Respecting Powers of Attorney (10) (20)(a) Application Forms (9) (20)(b) Form of New Account Application - ---------- * MetLife - State Street Investment Services, Inc. changed its name to State Street Financial Services, Inc. effective as of June 18, 1992, and subsequently changed its name to State Street Research Investment Services, Inc. effective October 28, 1992. Documents in this listing of Exhibits which were effective prior to the most recent name change accordingly refer to MetLife - State Street Investment Services, Inc. or State Street Financial Services, Inc. ** The MetLife - State Street Money Market Fund changed its name to MetLife - State Street Research Money Market Fund effective as of August 1, 1994, and to State Street Research Money Market Fund effective August 1, 1995. Documents in this listing of Financial Statements and Exhibits which were effective prior to the most recent name change accordingly refer to a former name of the Series. *** Restated in electronic format in Post-Effective Amendment No. 12 filed on July 31, 1997 Filed as part of the Registration Statement as noted below and incorporated herein by reference:
Footnote Securities Act of 1933 Reference Registration/Amendment Date Filed - --------- ---------------------- ---------- 1 Pre-Effective Amendment No. 3 March 25, 1986 2 Pre-Effective Amendment No. 4 July 18, 1986 3 Post-Effective Amendment No. 3 July 17, 1989 4 Post-Effective Amendment No. 7 April 1, 1993 5 Post-Effective Amendment No. 8 June 1, 1993 6 Post-Effective Amendment No. 9 July 15, 1994 7 Post-Effective Amendment No. 10 July 28, 1995 8 Post-Effective Amendment No. 11 July 29, 1996 9 Post-Effective Amendment No. 12 July 31, 1997 10 Post-Effective Amendment No. 15 July 30, 1999 11 Post-Effective Amendment No. 16 July 28, 2000
C-3 Item 24. Not applicable C-4 Item 25. Indemnification Under Article VI of the Registrant's Second 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 whcih 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 of 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 which the proceeding was brought that the person to be indemnified was not liable by reason of Disabling Conduct, or (iii) a reasonable 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 Registrant 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 office, 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 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 statments 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 an action, suit or proceeding) is asserted against the Registration 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 as expressed in the Act and will be governed by the final adjudication of such issue. C-5 Item 26. 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.
Principal business Name Connection Organization address of organization - ---- ---------- ------------ ----------------------- State Street Research & Investment Adviser Various investment advisory Boston, MA Management Company clients Abbott, Christopher C. Senior Managing Director Pioneer Investment Mgmt. Boston, MA Executive Vice President (until 10/99) Executive Vice President State Street Research Investment Services, Inc. Bangs, Linda L. None Vice President Barghaan, Dennis C. Senior Vice President State Street Research Investment Services, Inc. Boston, MA Senior Vice President Barnwell, Amy F. Senior Vice President State Street Research Investment Services, Inc. Boston, MA Senior Vice President (Vice President until 10/00) Beatty, T. Kevin Vice President Fleet Investment Advisors Boston, MA Vice President (until 9/99) Bigley, Gary M. None Vice President Borghi, Peter Senior Vice President State Street Research Investment Services, Inc. Boston MA Vice President Borzilleri, John Vice President State Street Research Financial Trust Boston, MA Senior Vice President Boss, Marilyn O. Vice President State Street Research Investment Services, Inc. Boston, MA Vice President Bray, Michael J. None Senior Vice President Brezinski, Karen None Vice President Brown, Susan H. None Vice President Bruno, Thomas Vice President State Street Research Investment Services, Inc. Boston, MA Vice President Assistant Vice President Phoenix Investment Partners Hartford, CT (until 5/00)
C-6
Principal business Name Connection Organization address of organization - ---- ---------- ------------ ----------------------- Buffum, Andrea L. None Vice President Burbank, John F. Vice President State Street Research Capital Trust Boston, MA Senior Vice President Calame, Mara D. Vice President, Assistant State Street Research Investment Services, Inc. Boston, MA Vice President, Clerk and Counsel Assistant Secretary, Assistant Secretary State Street Research Institutional Funds Boston, MA and Counsel Callahan, Michael None Vice President Carley, Linda C. Vice President State Street Research Investment Services, Inc. Boston, MA Vice President Assistant Secretary State Street Research Institutional Funds Boston, MA Carstens, Linda C. Vice President State Street Research Investment Services, Inc. Boston, MA Vice President Clifford, Jr., Paul J. Vice President State Street Research Tax-Exempt Trust Boston, MA Senior Vice President Coleman, Thomas J. None Senior Vice President (Vice President until 10/00) Cullen, Terrence J. Vice President, Assistant State Street Research Investment Services, Inc. Boston, MA Vice President, Assistant Clerk and Counsel Secretary and Counsel Davis, Richard S. Chairman, President and Chief State Street Research Equity Trust Boston, MA Director, Chairman of Executive Officer the Board, President Chairman, President and Chief State Street Research Income Trust Boston, MA and Chief Executive Executive Officer Officer Chairman, President and Chief State Street Research Tax-Exempt Trust Boston, MA Executive Officer Chairman, President and Chief State Street Research Capital Trust Boston, MA Executive Officer Chairman, President and Chief State Street Research Exchange Trust Boston, MA Executive Officer Chairman, President and Chief State Street Research Growth Trust Boston, MA Executive Officer Chairman, President and Chief State Street Research Master Investment Trust Boston, MA Executive Officer Chairman, President and Chief State Street Research Institutional Funds Boston, MA Executive Officer Chairman, President and Chief State Street Research Securities Trust Boston, MA Executive Officer Chairman, President and Chief State Street Research Money Market Trust Boston, MA Executive Officer Chairman, President and Chief State Street Research Financial Trust Boston, MA Executive Officer Chairman, President and Chief State Street Research Investment Services, Inc. Boston, MA Executive Officer President and Chief Executive SSRM Holdings, Inc. Boston, MA Officer Senior Vice President Metropolitan Life Insurance Company New York, NY (until 10/00)
C-7
Principal business Name Connection Organization address of organization - ---- ---------- ------------ ----------------------- Davis, Robert D. Vice President Wellington Management Company Boston, MA Vice President (until 3/01) D'Vari, Ronald None Senior Vice President de Luna, John Principal (until 3/01) State Street Global Advisors Boston, MA Senior Vice President Senior Vice President State Street Research Investment Services, Inc. Boston, MA Depp, Maureen G. Vice President State Street Research Securities Trust Boston, MA Senior Vice President (Vice President until 4/01) DeVeuve, Donald None Vice President DiVasta, Vincent Vice President State Street Research Investment Services, Inc. Boston, MA Vice President Dudley, Catherine Vice President State Street Research Capital Trust Boston, MA Senior Vice President Vice President State Street Research Institutional Funds Boston, MA Duggan, Peter J. None Senior Vice President Ebel, Bruce A. Vice President State Street Research Institutional Funds Boston, MA Senior Vice President Vice President State Street Research Financial Trust Boston, MA Even, Karen L. Vice President State Street Research Investment Services, Inc. Boston, MA Vice President Fechter, Michael Vice President State Street Research Investment Services, Inc. Boston, MA Vice President Vice President Standish, Ayer & Wood (until 4/01) Federoff, Alex G. Senior Vice President State Street Research Investment Services, Inc. Boston, MA Senior Vice President (Vice President until 4/00) Feliciano, Rosalina None Vice President Feeney, Kimberley Vice President State Street Research Investment Services, Inc. Boston, MA Vice President Ficco, Bonnie A. Vice President State Street Research Investment Services, Inc. Boston, MA Vice President Fleno, Phyllis A. None Vice President Fochtman, Jr., Leo None Vice President Forcione, Anthony F. None Vice President Frey, Kenneth Analyst The Boston Company Boston, MA Vice President (until 10/99) Frank, Christopher Vice President State Street Research Investment Services, Inc. Boston, MA Vice President Vice President State Street Global Advisors Boston, MA Gallivan Jr., Edward T. Vice President State Street Research Investment Services, Inc. Boston, MA 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 Institutional Funds Boston, MA
C-8
Principal business Name Connection Organization address of organization - ---- ---------- ------------ ----------------------- Goodman, Stephanie B. Vice President State Street Research Investment Services, Inc. Boston, MA Vice President Govoni, Electra None Vice President Grace, Evan S. None Vice President Granger, Allison Vice President State Street Research Investment Services, Inc. Boston, MA Vice President Gray, Nancy Spalding Vice President Scudder-Kemper Investments Boston, MA Vice President (until 8/00) Hadelman, Peter J. Vice President Pioneer Investment Management Boston, MA Vice President (until 5/00) Vice President State Street Research Investment Services, Inc. Boston, MA Haggerty, Bryan D. None Vice President Hagstrom, Thomas W. 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 Harrington, Heidi Vice President State Street Research Investment Services, Inc. Boston, MA Vice President Vice President Fleet Investment Management (until 5/00) Hasson, Ira P. Vice President State Street Research Investment Services, Inc. Boston, MA Vice President Haverty, Jr., Lawrence J. Vice President State Street Research Capital Trust Boston, MA Senior Vice President Heineke, George R. None Vice President Hickman, Joanne Senior Vice President State Street Research Investment Services, Inc. Boston, MA Senior Vice President Holland, Thomas Senior Vice President State Street Research Investment Services, Inc. Boston, MA Senior Vice President (Vice President until 4/01) Holmes, Robert J. Director Key Account Mktg. American Skandia Marketing, Inc. Shelton, CT Vice President (until 10/00) Vice President Evergreen Investment Services Boston, MA (until 3/00) Vice President State Street Research Investment Services, Inc. Boston, MA
C-9
Principal business Name Connection Organization address of organization - ---- ---------- ------------ ------------------------ Joseph, Robert I. None Vice President 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 Institutional Funds Boston, MA Vice President State Street Research Money Market Trust 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. Kasper, M. Katherine Vice President State Street Research Investment Services, Inc. Boston, MA Vice President Kayajanian, Jeffrey D. Vice President State Street Research Investment Services, Inc. Boston, MA Vice President Regional Vice President ReliaStar Retirement Plans Minneapolis, MN (until 7/00) Keelan, David E. Vice President Kiessling, Dyann H. Vice President State Street Research Money Market Trust Boston, MA Vice President Krauss, Clifford Managing Director Trust Company of the West Los Angeles, CA Senior Vice President (until 8/00) Lafferty, David F. Vice President State Street Research Investment Services, Inc. Boston, MA Vice President Senior Investment Strategist Metropolitan Life Insurance Company New York, NY (until 4/01) Langholm, Knut Director SSR Pegasus Funds Luxembourg Senior Vice President Leary, Eileen M. None Vice President Ledbury, Richard D. Vice President State Street Research Investment Services, Inc. Boston, MA Vice President Leese, Reginald Portfolio Manager Citizens Bank Boston, MA Vice President (until 6/00) Loew, Christopher R. Assistant Vice President Putnam Investments Boston, MA Vice President (until 2/01) Boston, MA Vice President State Street Research Investment Services, Inc. Loizeaux, Stephen Vice President State Street Research Investment Services, Inc. Boston, MA Vice President Lomasney, Mary T. Vice President State Street Research Investment Services, Inc. Boston, MA Vice President Lombardo, John S. Executive Vice President State Street Research Investment Services, Inc. Boston, MA Executive Vice President Chief Financial Officer and Chief Financial Officer Lord, Peter D. Vice President New England Financial Boston, MA Vice President Vice President State Street Research Investment Services, Inc. Boston, MA Lubas, Amy C. Director SG Cowen Securities Corporation Boston, MA Vice President (until 4/00) Marchand, Joanna M. None Vice President (Assistant Vice President until 4/01) Marinella, Mark A. Vice President State Street Research Institutional Funds Boston, MA Executive Vice President Vice President State Street Research Financial Trust Boston, MA Co-Chief Investment Officer--Fixed Income (Senior Vice President Vice President State Street Research Income Trust Boston, MA until 3/01) Vice President State Street Research Money Market Trust Boston, MA Vice President State Street Research Securities Trust Boston, MA Vice President State Street Research Tax-Exempt Trust Boston, MA
C-10
Principal business Name Connection Organization address of organization - ---- ---------- ------------ ----------------------- Markel, Gregory S. None Vice President Marsh, Eleanor H. Portfolio Manager Evergreen Investment Management Company Boston, MA Vice President (Until 3/00) McGrath, Ann E. None Vice President McKown, Elizabeth G. Senior Vice President State Street Research Investment Services, Inc. Boston, MA Senior Vice President (Vice President until 10/00) McNamara, III, Francis J. Executive Vice President, State Street Research Investment Services, Inc. Boston, MA Executive Vice Clerk and General Counsel President, Secretary Secretary and General Counsel State Street Research Master Investment Trust Boston, MA and General Counsel Secretary and General Counsel State Street Research Capital Trust Boston, MA Secretary and General Counsel State Street Research Exchange Trust Boston, MA 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 Tax-Exempt Trust Boston, MA Secretary and General Counsel SSRM Holdings, Inc. Boston, MA Secretary and General Counsel State Street Research Institutional Funds Boston, MA Director SSR Pegasus Funds Luxembourg Moore, James Director 1838 Investment Advisors, Inc. Boston, MA Vice President (until 4/00)
C-11
Principal business Name Connection Organization address of organization - ---- ---------- ------------ ----------------------- Moore, Jr., Thomas P. Vice President State Street Research Financial Trust Boston, MA Senior Vice Vice President State Street Research Equity Trust Boston, MA President Director Hibernia Savings Bank Quincy, MA Governor on the Board Association for Investment Management Charlottesville, VA of Governors and Research Morey, Andrew F. None Vice President Mulligan, JoAnne C. None Senior Vice President Pannell, James C. Vice President State Street Research Institutional Funds Boston, MA Executive Vice President Passalacqua, Barbara None Vice President (Assistant Vice President until 4/01) Pierce, James D. Vice President State Street Research Investment Services, Inc. Boston, MA Vice President Poritzky, Dean E. None Senior Vice President (Vice President until 4/00) Ragsdale, Jr., E.K. Easton Vice President State Street Research Financial Trust Boston, MA Senior Vice President Ransom, Clifford F. None Vice President Rawlins, Jeffrey A. Vice President State Street Research Institutional Funds Boston, MA Senior Vice President Refojo, Michael F. Senior Vice President Scudder Kemper Investments Boston, MA Senior Vice President (until 12/00) Reilly, David C. None Senior Vice President Rice III, Daniel J. Vice President State Street Research Equity Trust Boston, MA Senior Vice President Rolnick, Michael A. None Vice President
C-12
Principal business Name Connection Organization address of organization - ---- ---------- ------------ ----------------------- Romich, Douglas A. Treasurer State Street Research Equity Trust Boston, MA Senior Vice President Treasurer State Street Research Financial Trust Boston, MA and Assistant Treasurer State Street Research Income Trust Boston, MA Treasurer Treasurer State Street Research Money Market Trust Boston, MA 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 Acting Treasurer State Street Research Institutional Funds Boston, MA Treasurer State Street Research Master Investment Trust Boston, MA Treasurer State Street Research Securities Trust Boston, MA Vice President and SSRM Holdings, Inc. Boston, MA Assistant Treasurer Senior Vice President and State Street Research Investment Services, Inc. Boston, MA Assistant Treasurer Ryan, Michael J. None Senior Vice President Schrage, Michael M. None Senior Vice President (Vice President until 4/00) Shean, William G. None Senior Vice President (Vice President until 4/00) Sheldon, Michael A. None Vice President Shoemaker, Richard D. Senior Vice President State Street Research Investment Services, Inc. Boston, MA Senior Vice President Silverstein, Jill None Vice President Simi, Susan None Vice President
C-13
Principal business Name Connection Organization address of organization - ---- ---------- ------------ ----------------------- Simmons, Amy L. Vice President State Street Research Investment Services, Inc. Boston, MA Vice President Assistant Secretary State Street Research Capital Trust Boston, MA Assistant Secretary State Street Research Exchange Trust Boston, MA Assistant Secretary State Street Research Growth Trust Boston, MA Assistant Secretary State Street Research Master Investment Trust Boston, MA Assistant Secretary State Street Research Securities Trust Boston, MA Assistant Secretary State Street Research Equity Trust Boston, MA Assistant Secretary State Street Research Financial Trust Boston, MA Assistant Secretary State Street Research Income Trust Boston, MA Assistant Secretary State Street Research Money Market Trust Boston, MA Assistant Secretary State Street Research Tax-Exempt Trust Boston, MA Smith, James Director of Customer Service Brown and Company Securities Corporation Boston, MA Vice President (until 11/17/00) Vice President State Street Research Investment Services, Inc. Boston, MA Somers, Todd Vice President State Street Research Investment Services, Inc. Boston, MA Vice President St. John, Scott Vice President Eaton Vance Management Boston, MA Vice President (until 2/01) Stambaugh, Kenneth D. None Vice President Stolberg, Thomas B. None Vice President Strelow, Daniel R. None Executive Vice President Co-Chief Investment Officer--Fixed Income (Senior Vice President until 3/01) Swanson, Amy McDermott Vice President State Street Research Institutional Funds Boston, MA Senior Vice President Synnestvedt, Jared A. Vice President State Street Research Investment Services, Inc. Boston, MA Vice President Director of Sales MetLife Investment Partners Boston, MA (until 4/01) Asst. Vice President Putnam Investments Boston, MA (until 7/00) Thorndike, Benjamin W. Managing Director Scudder-Kemper Investments Boston, MA Senior Vice President (until 7/00) Senior Vice President State Street Research Investment Services, Inc. Boston, MA Tice, Robyn S. None Senior Vice President (Vice President until 10/00) Trebino, Anne M. Vice President SSRM Holdings, Inc. Boston, MA Senior Vice President Truesdale, Anne Tucher Senior Analyst J.P. Morgan & Co. New York, NY Vice President (until 6/00) Wagenseller, Jon P. Senior Vice President State Street Research Investment Services, Inc. Boston, MA Senior Vice President Director--New Prod. Dev. MetLife Investments Convent Station, NJ (until 4/01) Wallace, Julie K. None Vice President Walsh III, Denis J. None Vice President Walsh, Tucker Vice President State Street Research Capital Trust Boston, MA Vice President Wardwell, Samuel Vice President Wellington Management Company Boston, MA Senior Vice President (until 8/00)
C-14
Principal business Name Connection Organization address of organization - ---- ---------- ------------ ----------------------- Weiss, James M. Vice President State Street Research Exchange Trust Boston, MA Director and Executive Vice President State Street Research Financial Trust Boston, MA Vice President Vice President State Street Research Growth Trust Boston, MA Vice President State Street Research Institutional Funds Boston, MA Vice President State Street Research Securities Trust Boston, MA Vice President State Street Research Capital Trust Boston, MA Vice President State Street Research Equity Trust Boston, MA Vice President State Street Research Income Trust Boston, MA Vice President State Street Research Master Investment Trust Boston, MA Director State Street Research Investment Services, Inc. Boston, MA Welch, Timothy M. None Vice President Westvold, Vice President State Street Research Institutional Funds Boston, MA Elizabeth McCombs Vice President State Street Research Securities Trust Boston, MA Senior Vice President Wilkins, Kevin N. Executive Vice President State Street Research Investment Services, Inc. Boston, MA Executive Vice President (Senior Vice President (Senior Vice President until 4/00) until 4/00) Wilson, John T. Vice President State Street Research Master Investment Trust Boston, MA Senior Vice President Vice President State Street Research Institutional Funds Boston, MA Winandy, Angela Vice President State Street Research Investment Services, Inc. Boston, MA Vice President Wing, Darman A. Senior Vice President, State Street Research Investment Services, Inc. Boston, MA Senior Vice President, Assistant Clerk & Assistant Assistant Secretary General Counsel and Assistant Assistant Secretary and State Street Research Capital Trust Boston, MA General Counsel Assistant General Counsel Assistant Secretary and State Street Research Exchange Trust Boston, MA Assistant General Counsel Assistant Secretary and State Street Research Growth Trust Boston, MA Assistant General Counsel Assistant Secretary and State Street Research Master Investment Trust Boston, MA Assistant General Counsel Assistant Secretary and State Street Research Securities Trust Boston, MA Assistant General Counsel Assistant Secretary and State Street Research Equity Trust Boston, MA Assistant General Counsel Assistant Secretary and State Street Research Financial Trust Boston, MA Assistant General Counsel Assistant Secretary and State Street Research Income Trust Boston, MA Assistant General Counsel Assistant Secretary and State Street Research Money Market Trust Boston, MA Assistant General Counsel Assistant Secretary and State Street Research Tax-Exempt Trust Boston, MA Assistant General Counsel Assistant Secretary and SSRM Holdings, Inc. Boston, MA Assistant General Counsel
C-15
Principal business Name Connection Organization address of organization - ---- ---------- ------------ ----------------------- Woodbury, Robert S. Senior Vice President State Street Research Investment Services, Inc. Boston, MA Senior Vice President (Vice President until 4/01) Woodworth, Jr., Kennard Vice President State Street Research Exchange Trust Boston, MA Senior Vice Vice President State Street Research Financial Trust Boston, MA President Vice President State Street Research Growth Trust Boston, MA Vice President State Street Research Institutional Funds Boston, MA Vice President State Street Research Securities Trust Boston, MA Xie, Erin Vice President State Street Research Investment Services Inc. Boston, MA Vice President Yalamanchili, Kishore K. None Vice President Yu, Mandy Vice President State Street Research Investment Services, Inc. Boston, MA Vice President Zuger, Peter A. Vice President State Street Research Equity Trust Boston, MA Senior Vice President Zhu, Kevin None Vice President
C-16 Item 27. Principal Underwriters (a) State Street Research Investment Services, Inc. serves 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 Capital Trust, State Street Research Growth Trust, State Street Research Master Investment Trust, State Street Research Securities Trust and State Street Research Institutional Funds. (b) Directors and Officers of State Street Research Investment Services, Inc. are as follows:
(1) (2) (3) Positions Name and Principal and Offices Positions and Offices Business Address with Underwriter with Registrant ------------------ ---------------- --------------------- Richard S. Davis Chairman of the Board, Chairman of the Board, One Financial Center President and Chief President and Chief Boston, MA 02111 Executive Officer Executive Officer James M. Weiss Director None One Financial Center Boston, MA 02111 Francis J. McNamara, III Executive Vice Secretary One Financial Center President, General Boston, MA 02111 Counsel and Clerk Kevin N. Wilkins Executive Vice None One Financial Center President Boston, MA 02111 Dennis C. Barghaan Senior Vice President None One Financial Center Boston, MA 02111 Amy F. Barnwell Senior Vice President None One Financial Center Boston, MA 02111 Peter Borghi Senior Vice President None One Financial Center Boston, MA 02111 John de Luna Senior Vice President None One Financial Center Boston, MA 02111
C-17
(1) (2) (3) Positions Name and Principal and Offices Positions and Offices Business Address with Underwriter with Registrant ------------------ ---------------- --------------------- Joanne Hickman Senior Vice President None One Financial Center Boston, MA 02111 Thomas Holland Senior Vice President None One Financial Center Boston, MA 02111 Elizabeth G. McKown Senior Vice President None One Financial Center Boston, MA 02111 Douglas A. Romich Senior Vice President Treasurer One Financial Center and Assistant Treasurer Boston, MA 02111 Darman A. Wing Senior Vice President, Assistant Secretary One Financial Center Assistant General Counsel Boston, MA 02111 and Assistant Clerk Thomas Bruno Vice President None One Financial Center Boston, MA 02111 Mara D. Calame Vice President, None One Financial Center Assistant Clerk and Boston, MA 02111 Counsel Linda Cook Carley Vice President None One Financial Center Boston, MA 02111 Linda C. Carstens Vice President None One Financial Center Boston, MA 02111 Terrence J. Cullen Vice President, None One Financial Center Assistant Clerk Boston, MA 02111 and Counsel Kimberley Feeney Vice President None One Financial Center Boston, MA 02111 Christopher Frank Vice President None One Financial Center Boston, MA 02111 Edward T. Gallivan, Jr. Vice President Assistant Treasurer One Financial Center Boston, MA 02111 Stephanie B. Goodman Vice President None One Financial Center Boston, MA 02111 Nancy Spalding Gray Vice President None One Financial Center Boston, MA 02111 Ira P. Hasson Vice President None One Financial Center Boston, MA 02111 Robert J. Holmes Vice President None One Financial Center Boston, MA 02111 M. Katherine Kasper Vice President None One Financial Center Boston, MA 02111 Jeffrey D. Kayajanian Vice President None One Financial Center Boston, MA 02111 Richard C. Ledbury Vice President None One Financial Center Boston, MA 02111 Christopher R. Loew Vice President None One Financial Center Boston, MA 02111 Peter D. Lord Vice President None One Financial Center Boston, MA 02111 Stephen W. Paddon Vice President None One Financial Center Boston, MA 02111 Amy L. Simmons Vice President Assistant Secretary One Financial Center Boston, MA 02111 James Smith Vice President None One Financial Center Boston, MA 02111 Angela L. Winandy Vice President None One Financial Center Boston, MA 02111 Robert S. Woodbury Vice President None One Financial Center Boston, MA 02111
C-18 Item 28. Location of Accounts and Records Douglas A. Romich State Street Research & Management Company One Financial Center Boston, MA 02111 Item 29. Management Services Under a Shareholders' Administrative Services Agreement between the Registrant 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 series of the Registrant and received the amounts set forth below:
Year-end Year-end Year-end Fund 3/31/99 3/31/00 3/31/01 - ---- ------- ------- ------- Money Market $235,705 $542,363 $622,256
Item 30. Undertakings (a) Deleted. (b) The Registrant undertakes to hold a special meeting of shareholders of the Trust for the purpose of voting upon the question of removal of any trustee or trustees when requested in writing to do so by the record holders of not less than 10 per centum of the outstanding shares of the Trust 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. C-19 Notice A copy of the Second Amended and Restated Master Trust Agreement, as further amended ("Master Trust Agreement") 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, assistant officers, agents or employees of the Registrant as individuals or personally, but shall bind only the property of the Funds of the Registrant, as provided in the Master Trust Agreement. 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-20 SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all the requirements for effectiveness of this Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Post-Effective Amendment No. 17 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 27th day of July, 2001. STATE STREET RESEARCH MONEY MARKET TRUST By * ----------------------------- Richard S. Davis 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 - --------- -------- * Chairman of the Board, Chief Executive - ------------------------------------ Officer and President (principal Richard S. Davis executive officer) * Treasurer (principal financial and - ------------------------------------ accounting officer) Douglas A. Romich * Trustee - ------------------------------------ Bruce R. Bond * Trustee - ------------------------------------ Steve A. Garban * Trustee - ------------------------------------ Dean O. Morton * Trustee - ------------------------------------ Susan M. Phillips * Trustee - ------------------------------------ Toby Rosenblatt * Trustee - ------------------------------------ Michael S. Scott Morton
*By: /s/ Francis J. McNamara, III ------------------------------ Francis J. McNamara, III, Attorney-in-Fact under Powers of Attorney incorporated by reference from Post-Effective Amendment No. 10 filed July 28, 1995, Post-Effective Amendment No. 15 filed July 30, 1999, Post-Effective Amendment No. 16 filed July 28, 2000, and under Powers of Attorney filed herein. 91755.C2 \ 1933 Act Registration No. 2-97506 1940 Act File No. 811-4295 ================================================================================ 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. 17 [X] and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ] Amendment No. 21 [X] -------------------- STATE STREET RESEARCH MONEY MARKET TRUST (Exact Name of Registrant as Specified in Declaration of Trust) -------------------- EXHIBITS ================================================================================ INDEX TO EXHIBITS (2)(c) Amendment No. 2 to Amended and Restated By-Laws effective August 2, 2000 (8)(c) Amendment dated November 17, 2000 to Custodian Contract (11) Consent of PricewaterhouseCoopers LLP (18)(d) Power of Attorney for Richard S. Davis (18)(e) Power of Attorney for Douglas A. Romich (20)(b) Form of New Account Application EX-2.(C) 2 a2053898zex-2_c.txt EXHIBIT (2)(C) Exhibit (2)(c) STATE STREET RESEARCH MONEY MARKET TRUST Amendment No. 2 to the By-Laws Section 3.2 of Article 3 of the By-Laws of State Street Research Money Market Trust (the "Trust") is hereby amended in its entirety to read as follows: "3.2 ELECTION. The President, the Treasurer and the Secretary shall be elected and other officers, if any, may be elected or appointed, by the Trustees at any time. Vacancies in any office may be filled at any time." Section 3.3 of Article 3 of the By-Laws of the Trust is hereby amended in its entirety to read as follows: "3.3 TENURE. The President, the Treasurer, the Secretary and any other officers shall hold office until their respective successors are chosen and qualified, or in each case until he sooner dies, resigns, is removed or becomes disqualified. Each officer shall hold office and each agent shall retain authority at the pleasure of the Trustees." Section 6.1 of Article 6 of the By-Laws of the Trust is hereby amended in its entirety to read as follows: "6.1 GENERAL. The fiscal year of the Trust or any Sub-Trust shall be fixed by resolution of the Trustees. The Trust and any Sub-Trusts may have different fiscal years." This amendment is adopted pursuant to authorization by Trustees on August 2, 2000. By:/s/ Darman A. Wing ---------------------------------------- Darman A. Wing Assistant Secretary EX-8.(C) 3 a2053898zex-8_c.txt EXHIBIT (8)(C) Exhibit (8)(c) AMENDMENT TO CUSTODIAN CONTRACT This Amendment to the Custodian Contract is made as of 11-17-00 by and between the registered investment companies listed in Appendix A (each referred to herein as the "Fund") and State Street Bank and Trust Company (the "Custodian"). Capitalized terms used in this Amendment without definition shall have the respective meanings given to such terms in the Custodian Contract referred to below. WHEREAS, the Fund and the Custodian entered into a Custodian Contract as listed in Appendix A and amended and in effect from time to time, (the "Contract"); 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 the Fund has made the series set forth on Appendix A to the Contract subject to the Contract (each such series, together with all other series subsequently established by the Fund and made subject to the Contract in accordance with the terms thereof, shall be referred to as a "Portfolio", and, collectively, the "Portfolios"); WHEREAS, the Fund and the Custodian desire to amend certain provisions of the Contract to reflect revisions to Rule 17f-5 ("Rule 17f-5") and the adoption of Rule 17f-7 ("Rule 17f-7") promulgated under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, the Fund and the Custodian desire to amend and restate certain other provisions of the Contract relating to the custody of assets of each of the Portfolios held outside of the United States. NOW THEREFORE, in consideration of the foregoing and the mutual covenants and agreements hereinafter contained, the parties hereby agree to amend the Contract, pursuant to the terms thereof, as follows: I. Article 3 of the Contract is hereby deleted, and Articles 4 through 20 of the Contract are hereby renumbered, as of the effective date of this Amendment, as Articles 5 through 21, respectively. II. New Articles 3 and 4 of the Contract are hereby added, as of the effective date of this Amendment, as set forth below. 3. PROVISIONS RELATING TO RULES 17f-5 AND 17f-7 3.1. DEFINITIONS. Capitalized terms in this Amendment shall have the following meanings: "Country Risk" means all factors reasonably related to the systemic risk of holding Foreign Assets in a particular country including, but not limited to, such country's political environment, economic and financial infrastructure (including any Eligible Securities Depository operating in the country), prevailing or developing custody and settlement practices, and laws and regulations applicable to the safekeeping and recovery of Foreign Assets held in custody in that country. "Eligible Foreign Custodian" has the meaning set forth in section (a)(1) of Rule 17f-5, including a majority-owned or indirect subsidiary of a U.S. Bank (as defined in Rule 17f-5), a bank holding company meeting the requirements of an Eligible Foreign Custodian (as set forth in Rule 17f-5 or by other appropriate action of the U.S. Securities and Exchange Commission (the "SEC")), or a foreign branch of a Bank (as defined in Section 2(a)(5) of the 1940 Act) meeting the requirements of a custodian under Section 17(f) of the 1940 Act; the term does not include any Eligible Securities Depository. "Eligible Securities Depository" has the meaning set forth in section (b)(1) of Rule 17f-7. "Foreign Assets" means any of the Portfolios' investments (including foreign currencies) for which the primary market is outside the United States and such cash and cash equivalents as are reasonably necessary to effect the Portfolios' transactions in such investments. "Foreign Custody Manager" has the meaning set forth in section (a)(3) of Rule 17f-5. 3.2. THE CUSTODIAN AS FOREIGN CUSTODY MANAGER. 3.2.1 DELEGATION TO THE CUSTODIAN AS FOREIGN CUSTODY MANAGER. The Fund represents and warrants that, by resolution adopted by its Board of Trustees (the "Board"), the Board has delegated to the Custodian, subject to Section (b) of Rule 17f-5, the responsibilities set forth in this Section 3.2 with respect to Foreign Assets of the Portfolios held outside the United States, and the Custodian hereby accepts such delegation as Foreign Custody Manager with respect to the Portfolios. 3.2.2 COUNTRIES COVERED. The Foreign Custody Manager shall be responsible for performing the delegated responsibilities defined below only with respect to the countries listed on Schedule A to this Contract, which list of countries may be amended from time to time by the Fund with the agreement of the Foreign Custody Manager. The Foreign Custody Manager shall list on Schedule A the Eligible Foreign Custodians selected by the Foreign Custody Manager to maintain the Foreign Assets, which list of Eligible Foreign Custodians may be amended from time to time in the sole discretion of the Foreign Custody Manager. The Foreign Custody Manager will provide amended versions of Schedule A in accordance with Section 3.2.5 hereof. Upon the receipt by the Foreign Custody Manager of Proper Instructions to open an account or to place or maintain Foreign Assets in a country listed on Schedule A, and the fulfillment by the Fund, on behalf of the Portfolios, of the applicable account opening requirements for such country, the Foreign Custody Manager shall be deemed to have 2 been delegated by the Board on behalf of the Portfolios responsibility as Foreign Custody Manager with respect to that country and to have accepted such delegation. Execution of this Amendment by the Fund shall be deemed (i) to be a Proper Instruction to open an account, or to place or maintain Foreign Assets, in each country listed on Schedule A in which the Custodian has previously placed or currently maintains Foreign Assets pursuant to the terms of the Contract (the parties agreeing that the countries in which the Custodian has previously maintained or currently maintains Foreign Assets are listed on Schedule B) and (ii) to be a delegation by the Board on behalf of the Portfolios to the Custodian of responsibility as Foreign Custodial Manager with respect to the countries listed on Schedule B and the acceptance by the Custodian of such delegation. Following the receipt of Proper Instructions directing the Foreign Custody Manager to close the account of a Portfolio with the Eligible Foreign Custodian selected by the Foreign Custody Manager in a designated country, the delegation by the Board on behalf of the Portfolios to the Custodian as Foreign Custody Manager for that country shall be deemed to have been withdrawn and the Custodian shall immediately cease to be the Foreign Custody Manager of the Portfolios with respect to that country. The Foreign Custody Manager may withdraw its acceptance of delegated responsibilities with respect to a designated country upon written notice to the Fund, such withdrawal to take effect thirty days (or such longer period to which the parties agree in writing) after receipt of any such notice by the Fund. The Custodian shall have no further responsibility in its capacity as Foreign Custody Manager to the Fund with respect to the country as to which the Custodian's acceptance of delegation is withdrawn. 3.2.3 SCOPE OF DELEGATED RESPONSIBILITIES: (a) SELECTION OF ELIGIBLE FOREIGN CUSTODIANS. Subject to the provisions of this Section 3.2, the Foreign Custody Manager may place and maintain the Foreign Assets in the care of the Eligible Foreign Custodian selected by the Foreign Custody Manager in each country listed on Schedule A, as amended from time to time. In performing its delegated responsibilities as Foreign Custody Manager to place or maintain Foreign Assets with an Eligible Foreign Custodian, the Foreign Custody Manager shall determine that the Foreign Assets will be subject to reasonable care, based on the standards applicable to custodians in the relevant market in which the Foreign Assets will be held by that Eligible Foreign Custodian, after considering all factors relevant to the safekeeping of such assets, including, without limitation the factors specified in Rule 17f-5(c)(1). (b) CONTRACTS WITH ELIGIBLE FOREIGN CUSTODIANS. The Foreign Custody Manager shall determine that the contract governing the foreign custody arrangements with each Eligible Foreign Custodian selected by the Foreign Custody Manager will satisfy the requirements of Rule 17f-5(c)(2). (c) MONITORING. In each case in which the Foreign Custody Manager maintains Foreign Assets with an Eligible Foreign Custodian selected by the Foreign Custody Manager, the Foreign Custody Manager shall establish a system to monitor in 3 accordance with Rule 17f-5(c)(3), (i) the appropriateness of maintaining the Foreign Assets with such Eligible Foreign Custodian and (ii) the contract governing the custody arrangements established by the Foreign Custody Manager with the Eligible Foreign Custodian. In the event the Foreign Custody Manager determines that the custody arrangements with an Eligible Foreign Custodian it has selected are no longer appropriate, the Foreign Custody Manager shall notify the Board in accordance with Section 3.2.5 hereunder. 3.2.4 GUIDELINES FOR THE EXERCISE OF DELEGATED AUTHORITY. For purposes of this Section 3.2, the Foreign Custody Manager shall not be responsible for such Country Risk as is incurred by placing and maintaining the Foreign Assets in each country for which the Custodian is serving as Foreign Custody Manager of the Portfolios. 3.2.5 REPORTING REQUIREMENTS. The Foreign Custody Manager shall report the withdrawal of the Foreign Assets from an Eligible Foreign Custodian or the placement of such Foreign Assets with an Eligible Foreign Custodian not previously reported to the Board by providing to the Board an amended Schedule A at the end of the calendar quarter in which an amendment to such Schedule has occurred. The Foreign Custody Manager shall make written reports notifying the Board of any other material change in the foreign custody arrangements of the Portfolios described in this Section 3.2 after the occurrence of the material change. 3.2.6 STANDARD OF CARE AS FOREIGN CUSTODY MANAGER OF A PORTFOLIO. In performing the responsibilities delegated to it, the Foreign Custody Manager agrees to exercise reasonable care, prudence and diligence such as a person having responsibility for the safekeeping of assets of management investment companies registered under the 1940 Act would exercise. 3.2.7 REPRESENTATIONS WITH RESPECT TO RULE 17F-5. The Foreign Custody Manager represents to the Fund that (i) it is a U.S. Bank as defined in section (a)(7) of Rule 17f-5, (ii) each institution listed on Schedule A is an Eligible Foreign Custodian and (iii) each institution listed on Schedule B is an Eligible Securities Depository. The Fund represents to the Custodian that the Board has determined that it is reasonable for the Board to rely on the Custodian to perform the responsibilities delegated pursuant to this Contract to the Custodian as the Foreign Custody Manager of the Portfolios. 3.2.8 EFFECTIVE DATE AND TERMINATION OF THE CUSTODIAN AS FOREIGN CUSTODY MANAGER. The Board's delegation to the Custodian as Foreign Custody Manager of the Portfolios shall be effective as of the date hereof and shall remain in effect until terminated at any time, without penalty, by written notice from the terminating party to the non-terminating party. Termination will become effective thirty (30) days after receipt by the non-terminating party of such notice. The provisions of Section 3.2.2 hereof shall govern the delegation to and termination of the Custodian as Foreign Custody Manager of the Portfolios with respect to designated countries. 4 3.3 ELIGIBLE SECURITIES DEPOSITORIES. 3.3.1 ANALYSIS AND MONITORING. The Custodian shall (a) provide the Fund (or its duly-authorized investment manager or investment adviser) with an analysis of the custody risks associated with maintaining assets with the Eligible Securities Depositories set forth on Schedule B hereto in accordance with section (a)(1)(i)(A) of Rule 17f-7, and (b) monitor such risks on a continuing basis, and promptly notify the Fund (or its duly-authorized investment manager or investment adviser) of any material change in such risks, in accordance with section (a)(1)(i)(B) of Rule 17f-7. 3.3.2 STANDARD OF CARE. The Custodian agrees to exercise reasonable care, prudence and diligence in performing the duties set forth in Section 3.3.1. 4. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE PORTFOLIOS HELD OUTSIDE THE UNITED STATES. 4.1 DEFINITIONS. Capitalized terms in this Article 4 shall have the following meanings: "Foreign Securities System" means an Eligible Securities Depository listed on Schedule B hereto. "Foreign Sub-Custodian" means a foreign banking institution serving as an Eligible Foreign Custodian. 4.2. HOLDING SECURITIES. The Custodian shall identify on its books as belonging to the Portfolios the foreign securities held by each Foreign Sub-Custodian or Foreign Securities System. The Custodian may hold foreign securities for all of its customers, including the Portfolios, with any Foreign Sub-Custodian in an 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 foreign securities of the Portfolios which are maintained in such account shall identify those securities as belonging to the Portfolios and (ii), to the extent permitted and customary in the market in which the account is maintained, the Custodian shall require that securities so held by the Foreign Sub-Custodian be held separately from any assets of such Foreign Sub-Custodian or of other customers of such Foreign Sub-Custodian. 4.3. FOREIGN SECURITIES SYSTEMS. Foreign securities shall be maintained in a Foreign Securities System in a designated country through arrangements implemented by the Custodian or a Foreign Sub-Custodian, as applicable, in such country. 4.4. TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT. 4.4.1. DELIVERY OF FOREIGN ASSETS. The Custodian or a Foreign Sub-Custodian shall release and deliver foreign securities of the Portfolios held by the Custodian or such 5 Foreign Sub-Custodian, or in a Foreign Securities System account, only upon receipt of Proper Instructions, which may be continuing instructions when deemed appropriate by the parties, and only in the following cases: (i) upon the sale of such foreign securities for the Portfolio in accordance with commercially reasonable market practice in the country where such foreign securities are held or traded, including, without limitation: (A) delivery against expectation of receiving later payment; or (B) in the case of a sale effected through a Foreign Securities System, in accordance with the rules governing the operation of the Foreign Securities System; (ii) in connection with any repurchase agreement related to foreign securities; (iii) to the depository agent in connection with tender or other similar offers for foreign securities of the Portfolios; (iv) to the issuer thereof or its agent when such foreign securities are called, redeemed, retired or otherwise become payable; (v) to the issuer thereof, or its agent, for transfer into the name of the Custodian (or the name of the respective Foreign Sub-Custodian or of any nominee of the Custodian or such Foreign Sub-Custodian) or for exchange for a different number of bonds, certificates or other evidence representing the same aggregate face amount or number of units; (vi) to brokers, clearing banks or other clearing agents for examination or trade execution in accordance with market custom; provided that in any such case the Foreign Sub-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 Foreign Sub-Custodian's own negligence or willful misconduct; (vii) 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; (viii) in the case of warrants, rights or similar foreign securities, the surrender thereof in the exercise of such warrants, rights or similar securities or the surrender of interim receipts or temporary securities for definitive securities; (ix) for delivery as security in connection with any borrowing by the Portfolios requiring a pledge of assets by the Portfolios; (x) in connection with trading in options and futures contracts, including 6 delivery as original margin and variation margin; (xi) in connection with the lending of foreign securities; and (xii) for any other purpose, but only upon receipt of Proper Instructions specifying the foreign securities to be delivered and naming the person or persons to whom delivery of such securities shall be made. 4.4.2. PAYMENT OF PORTFOLIO MONIES. Upon receipt of Proper Instructions, which may be continuing instructions when deemed appropriate by the parties, the Custodian shall pay out, or direct the respective Foreign Sub-Custodian or the respective Foreign Securities System to pay out, monies of a Portfolio in the following cases only: (i) upon the purchase of foreign securities for the Portfolio, unless otherwise directed by Proper Instructions, by (A) delivering money to the seller thereof or to a dealer therefor (or an agent for such seller or dealer) against expectation of receiving later delivery of such foreign securities; or (B) in the case of a purchase effected through a Foreign Securities System, in accordance with the rules governing the operation of such Foreign Securities System; (ii) in connection with the conversion, exchange or surrender of foreign securities of the Portfolio; (iii) for the payment of any expense or liability of the Portfolio, including but not limited to the following payments: interest, taxes, investment advisory fees, transfer agency fees, fees under this Contract, legal fees, accounting fees, and other operating expenses; (iv) for the purchase or sale of foreign exchange or foreign exchange contracts for the Portfolio, including transactions executed with or through the Custodian or its Foreign Sub-Custodians; (v) in connection with trading in options and futures contracts, including delivery as original margin and variation margin; (vi) for payment of part or all of the dividends received in respect of securities sold short; (vii) in connection with the borrowing or lending of foreign securities; and (viii) for any other purpose, but only upon receipt of Proper Instructions specifying the amount of such payment and naming the person or persons to whom such payment is to be made. 4.4.3. MARKET CONDITIONS. Notwithstanding any provision of this Contract to 7 the contrary, settlement and payment for Foreign Assets received for the account of the Portfolios and delivery of Foreign Assets maintained for the account of the Portfolios may be effected in accordance with the customary established securities trading or processing practices and procedures in the country or market in which the transaction occurs, including, without limitation, delivering Foreign Assets to the purchaser thereof or to a dealer therefor (or an agent for such purchaser or dealer) with the expectation of receiving later payment for such Foreign Assets from such purchaser or dealer. The Custodian shall provide to the Fund (or its duly authorized adviser, where applicable) the information with respect to custody and settlement practices in countries in which the Custodian employs a Foreign Sub-Custodian described on Schedule C hereto at the time or times set forth on such Schedule. The Custodian may revise Schedule C from time to time, provided that no such revision shall result in the Fund (or such adviser) being provided with substantively less information than had been previously provided hereunder. 4.5. REGISTRATION OF FOREIGN SECURITIES. The foreign securities maintained in the custody of a Foreign Sub-Custodian (other than bearer securities) shall be registered in the name of the applicable Portfolio or in the name of the Custodian or in the name of any Foreign Sub-Custodian or in the name of any nominee of the foregoing, and the Fund on behalf of such Portfolio agrees to hold any such nominee harmless from any liability as a holder of record of such foreign securities, unless the liability results from the negligence of the nominee. The Custodian or a Foreign Sub-Custodian shall not be obligated to accept securities on behalf of a Portfolio under the terms of this Contract unless the form of such securities and the manner in which they are delivered are in accordance with reasonable market practice. 4.6 BANK ACCOUNTS. The Custodian shall identify on its books as belonging to the Portfolio cash (including cash denominated in foreign currencies) deposited with the Custodian. Where the Custodian is unable to maintain, or market practice does not facilitate the maintenance of, cash on the books of the Custodian, a bank account or bank accounts shall be opened and maintained outside the United States on behalf of a Portfolio with a Foreign Sub-Custodian. All accounts referred to in this Section shall be subject only to draft or order by the Custodian (or, if applicable, such Foreign Sub-Custodian) acting pursuant to the terms of this Agreement to hold cash received by or from or for the account of the Portfolio. Cash maintained on the books of the Custodian (including its branches, subsidiaries and affiliates), regardless of currency denomination, is maintained in bank accounts established under, and subject to the laws of, The Commonwealth of Massachusetts. 4.7. COLLECTION OF INCOME. The Custodian shall use reasonable commercial efforts to collect all income and other payments with respect to the Foreign Assets held hereunder to which the Portfolios shall be entitled and shall credit such income, as collected, to the applicable Portfolio. In the event that extraordinary measures are required to collect such income, the Fund and the Custodian shall consult as to such measures and as to the compensation and expenses of the Custodian relating to such measures. 8 4.8 SHAREHOLDER RIGHTS. With respect to the foreign securities held pursuant to this Article 4, the Custodian will use reasonable commercial efforts to facilitate the exercise of voting and other shareholder rights, subject always to the laws, regulations and practical constraints that may exist in the country where such securities are issued. The Fund acknowledges that local conditions, including lack of regulation, onerous procedural obligations, lack of notice and other factors may have the effect of severely limiting the ability of the Fund to exercise shareholder rights. 4.9. COMMUNICATIONS RELATING TO FOREIGN SECURITIES. The Custodian shall transmit promptly to the Fund written information with respect to materials received by the Custodian via the Foreign Sub-Custodians from issuers of the foreign securities being held for the account of the Portfolios (including, without limitation, pendency of calls and maturities of foreign securities and expirations of rights in connection therewith). With respect to tender or exchange offers, the Custodian shall transmit promptly to the Fund written information with respect to materials so received by the Custodian from issuers of the foreign securities whose tender or exchange is sought or from the party (or its agents) making the tender or exchange offer. The Custodian shall not be liable for any untimely exercise of any tender, exchange or other right or power in connection with foreign securities or other property of the Portfolios at any time held by it unless (i) the Custodian or the respective Foreign Sub-Custodian is in actual possession of such foreign securities or property and (ii) the Custodian receives Proper Instructions with regard to the exercise of any such right or power, and both (i) and (ii) occur at least three business days prior to the date on which the Custodian is to take action to exercise such right or power. 4.10. LIABILITY OF FOREIGN SUB-CUSTODIANS. Each agreement pursuant to which the Custodian employs a Foreign Sub-Custodian shall, to the extent possible, require the Foreign Sub-Custodian to exercise reasonable care in the performance of its duties, and to indemnify, and hold harmless, the Custodian from and against any loss, damage, cost, expense, liability or claim arising out of or in connection with the Foreign Sub-Custodian's performance of such obligations. At the Fund's election, the Portfolios shall be entitled to be subrogated to the rights of the Custodian with respect to any claims against a Foreign Sub-Custodian as a consequence of any such loss, damage, cost, expense, liability or claim if and to the extent that the Portfolios have not been made whole for any such loss, damage, cost, expense, liability or claim. 4.11. TAX LAW. The Custodian shall have no responsibility or liability for any obligations now or hereafter imposed on the Fund, the Portfolios or the Custodian as custodian of the Portfolios by the tax law of the United States or of any state or political subdivision thereof. It shall be the responsibility of the Fund to notify the Custodian of the obligations imposed on the Fund with respect to the Portfolios or the Custodian as custodian of the Portfolios by the tax law of countries other than those mentioned in the above sentence, including responsibility for withholding and other taxes, assessments or other governmental charges, certifications and governmental reporting (except as to taxes attributable to the domicile of the Custodian and in such case the Custodian shall notify the Fund). The sole responsibility of the Custodian with regard to such tax law shall be to use reasonable efforts to assist the Fund with respect to any claim for exemption or 9 refund under the tax law of countries for which the Fund has provided such information. 4.12. LIABILITY OF CUSTODIAN. Except as may arise from the Custodian's own negligence or willful misconduct or the negligence or willful misconduct of a Sub-Custodian, the Custodian shall be without liability to the Fund for any loss, liability, claim or expense resulting from or caused by anything which is part of Country Risk. The Custodian shall be liable for the acts or omissions of a Foreign Sub-Custodian to the same extent as set forth with respect to sub-custodians generally in the Contract and, regardless of whether assets are maintained in the custody of a Foreign Sub-Custodian or a Foreign Securities System, 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 other loss where the Sub-Custodian has otherwise acted with reasonable care. III. Except as specifically superseded or modified herein, the terms and provisions of the Contract shall continue to apply with full force and effect. In the event of any conflict between the terms of the Contract prior to this Amendment and this Amendment, the terms of this Amendment shall prevail. If the Custodian is delegated the responsibilities of Foreign Custody Manager pursuant to the terms of Article 3 hereof, in the event of any conflict between the provisions of Articles 3 and 4 hereof, the provisions of Article 3 shall prevail. IV. The use of this single document to memorialize the separate arrangements under the Custodian Contract and this Amendment for each of the Funds and Portfolios is understood to be for clerical convenience only and shall not constitute any basis for joining any Funds or Portfolios in any respect. 10 IN WITNESS WHEREOF, each of the parties has caused this Amendment to be executed in its name and behalf by its duly authorized representative as of the date first above written. WITNESSED BY: STATE STREET BANK and TRUST COMPANY /s/ Raelene S. LaPlante By: /s/ Ronald E. Logue - ----------------------- ------------------- Raelene S. LaPlante Name: Ronald E. Logue V.P. and Associate Counsel Title: Vice Chairman and Chief Operating Officer WITNESSED BY: ON BEHALF OF EACH FUND LISTED ON APPENDIX A (severally and not jointly) /s/ Darman A. Wing By: /s/ Douglas A. Romich - ------------------ ----------------------------- *[name] Darman A. Wing Name: Douglas A. Romich ----------------------------- [title] Assistant Secretary Title: Assistant Treasurer ----------------------------- of each Fund 11
APPENDIX A - ------------------------------------------------------------------------------------------------------------------------------------ REGISTERED INVESTMENT COMPANY CURRENT SERIES OF THE REGISTERED (REFERRED TO IN THIS AMENDMENT TO THE INVESTMENT COMPANY (REFERRED TO IN THIS CUSTODIAN CONTRACT DATED CUSTODIAN CONTRACT AS "FUND") AMENDMENT TO THE CUSTODIAN CONTACT AS "PORTFOLIO") - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ 6-30-86 State Street Research Equity Trust State Street Research Argo Fund - ------------------------------------------------------------------------------------------------------------------------------------ State Street Research Alpha Fund - ------------------------------------------------------------------------------------------------------------------------------------ State Street Research Global Resources Fund - ------------------------------------------------------------------------------------------------------------------------------------ State Street Research Athletes Fund - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ 2-12-87 State Street Research Financial Trust State Street Research Government Income Fund - ------------------------------------------------------------------------------------------------------------------------------------ State Street Research Strategic Income Plus Fund - ------------------------------------------------------------------------------------------------------------------------------------ State Street Research Strategic Portfolios: Aggressive - ------------------------------------------------------------------------------------------------------------------------------------ State Street Research IntelliQuant Portfolios: Small-Cap Value - ------------------------------------------------------------------------------------------------------------------------------------ State Street Research International Equity Fund - ------------------------------------------------------------------------------------------------------------------------------------ State Street Research Health Sciences Fund - ------------------------------------------------------------------------------------------------------------------------------------ State Street Research Concentrated Growth Fund - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ 6-30-86 State Street Research Income Trust State Street Research High Income Fund - ------------------------------------------------------------------------------------------------------------------------------------ State Street Research Strategic Growth & Income Fund - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ 6-30-86 State Street Research Money Market Trust State Street Research Money Market Fund - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ 1-27-89 State Street Research Capital Trust State Street Research Mid-Cap Growth Fund - ------------------------------------------------------------------------------------------------------------------------------------ State Street Research Emerging Growth Fund - ------------------------------------------------------------------------------------------------------------------------------------ State Street Research Aurora Fund - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ 3-5-90 State Street Research Exchange Trust State Street Research Exchange Fund - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ 3-5-90 State Street Research Growth Trust State Street Research Growth Fund - ------------------------------------------------------------------------------------------------------------------------------------ State Street Research Concentrated International Fund - ------------------------------------------------------------------------------------------------------------------------------------ State Street Research Technology Fund - ------------------------------------------------------------------------------------------------------------------------------------ State Street Research Asset Fund - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ State Street Research Master Investment 5-1-89 Trust State Street Research Investment Trust - ------------------------------------------------------------------------------------------------------------------------------------ State Street Research Equity Index Fund - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ 5-16-94 State Street Research Securities Trust State Street Research Strategic Income Fund - ------------------------------------------------------------------------------------------------------------------------------------ State Street Research Legacy Fund - ------------------------------------------------------------------------------------------------------------------------------------ State Street Research Galileo Fund - ------------------------------------------------------------------------------------------------------------------------------------ State Street Research Concentrated Large-Cap Value Fund - ------------------------------------------------------------------------------------------------------------------------------------ State Street Research Tax-Managed Small-Cap Fund - ------------------------------------------------------------------------------------------------------------------------------------
2 STATE STREET SCHEDULE A GLOBAL CUSTODY NETWORK SUBCUSTODIANS COUNTRY SUBCUSTODIAN Argentina Citibank, N.A. Australia Westpac Banking Corporation Austria Erste Bank der Osterreichischen Sparkassen AG Bahrain HSBC Bank Middle East (as delegate of The Hongkong and Shanghai Banking Corporation Limited) Bangladesh Standard Chartered Bank Belgium Fortis Bank nv-sa Bermuda The Bank of Bermuda Limited Bolivia Citibank, N. A. Botswana Barclays Bank of Botswana Limited Brazil Citibank, N.A. Bulgaria ING Bank N.V. Canada State Street Trust Company Canada Chile Citibank, N.A. People's Republic The Hongkong and Shanghai of China Banking Corporation Limited, Shanghai and Shenzhen branches Colombia Cititrust Colombia S.A. Sociedad Fiduciaria 1 STATE STREET SCHEDULE A GLOBAL CUSTODY NETWORK SUBCUSTODIANS COUNTRY SUBCUSTODIAN Costa Rica Banco BCT S.A. Croatia Privredna Banka Zagreb d.d Cyprus The Cyprus Popular Bank Ltd. Czech Republic Ceskoslovenska Obchodni Banka, A.S. Denmark Den Danske Bank Ecuador Citibank, N.A. Egypt Egyptian British Bank S.A.E. (as delegate of The Hongkong and Shanghai Banking Corporation Limited) Estonia Hansabank Finland Merita Bank Plc. France BNP Paribas, S.A. Germany Dresdner Bank AG Ghana Barclays Bank of Ghana Limited Greece National Bank of Greece S.A. Hong Kong Standard Chartered Bank Hungary Citibank Rt. Iceland Icebank Ltd. 1 STATE STREET SCHEDULE A GLOBAL CUSTODY NETWORK SUBCUSTODIANS COUNTRY SUBCUSTODIAN India Deutsche Bank AG The Hongkong and Shanghai Banking Corporation Limited Indonesia Standard Chartered Bank Ireland Bank of Ireland Israel Bank Hapoalim B.M. Italy BNP Paribas, Italian Branch Ivory Coast Societe Generale de Banques en Cote d'Ivoire Jamaica Scotiabank Jamaica Trust and Merchant Bank Ltd. Japan The Fuji Bank, Limited The Sumitomo Bank, Limited Jordan HSBC Bank Middle East (as delegate of The Hongkong and Shanghai Banking Corporation Limited) Kenya Barclays Bank of Kenya Limited Republic of Korea The Hongkong and Shanghai Banking Corporation Limited Latvia A/s Hansabanka 1 STATE STREET SCHEDULE A GLOBAL CUSTODY NETWORK SUBCUSTODIANS COUNTRY SUBCUSTODIAN Lebanon HSBC Bank Middle East (as delegate of The Hongkong and Shanghai Banking Corporation Limited) Lithuania Vilniaus Bankas AB Malaysia Standard Chartered Bank Malaysia Berhad Mauritius The Hongkong and Shanghai Banking Corporation Limited Mexico Citibank Mexico, S.A. Morocco Banque Commerciale du Maroc Namibia Standard Bank Namibia Limited - - Netherlands Fortis Bank (Nederland) N.V. New Zealand ANZ Banking Group (New Zealand) Limited Norway Christiania Bank og Kreditkasse ASA Oman HSBC Bank Middle East (as delegate of The Hongkong and Shanghai Banking Corporation Limited) Pakistan Deutsche Bank AG Palestine HSBC Bank Middle East (as delegate of The Hongkong and Shanghai Banking Corporation Limited) 1 STATE STREET SCHEDULE A GLOBAL CUSTODY NETWORK SUBCUSTODIANS COUNTRY SUBCUSTODIAN Panama BankBoston, N.A. Peru Citibank, N.A. Philippines Standard Chartered Bank Poland Citibank (Poland) S.A. Portugal Banco Comercial Portugues Qatar HSBC Bank Middle East (as delegate of The Hongkong and Shanghai Banking Corporation Limited) Romania ING Bank N.V. Russia Credit Suisse First Boston AO - Moscow (as delegate of Credit Suisse First Boston - Zurich) Singapore The Development Bank of Singapore Limited Slovak Republic Ceskoslovenska Obchodni Banka, A.S. Slovenia Bank Austria Creditanstalt d.d. - Ljubljana South Africa Standard Bank of South Africa Limited Spain Banco Santander Central Hispano S.A. Sri Lanka The Hongkong and Shanghai Banking Corporation Limited Swaziland Standard Bank Swaziland Limited 1 STATE STREET SCHEDULE A GLOBAL CUSTODY NETWORK SUBCUSTODIANS COUNTRY SUBCUSTODIAN Sweden Skandinaviska Enskilda Banken Switzerland UBS AG Taiwan - R.O.C. Central Trust of China Thailand Standard Chartered Bank Trinidad & Tobago Republic Bank Limited Tunisia Banque Internationale Arabe de Tunisie Turkey Citibank, N.A. Ukraine ING Bank Ukraine United Kingdom State Street Bank and Trust Company, London Branch Uruguay BankBoston, N.A. Venezuela Citibank, N.A. Vietnam The Hongkong and Shanghai Banking Corporation Limited Zambia Barclays Bank of Zambia Limited Zimbabwe Barclays Bank of Zimbabwe Limited 2 STATE STREET SCHEDULE B GLOBAL CUSTODY NETWORK DEPOSITORIES OPERATING IN NETWORK MARKETS COUNTRY DEPOSITORIES Argentina Caja de Valores S.A. Australia Austraclear Limited Reserve Bank Information and Transfer System Austria Oesterreichische Kontrollbank AG (Wertpapiersammelbank Division) Belgium Caisse Interprofessionnelle de Depots et de Virements de Titres, S.A. Banque Nationale de Belgique Brazil Companhia Brasileira de Liquidacao e Custodia Bulgaria Central Depository AD Bulgarian National Bank Canada Canadian Depository for Securities Limited Chile Deposito Central de Valores S.A. People's Republic Shanghai Securities Central Clearing & of China Registration Corporation Shenzhen Securities Central Clearing Co., Ltd. Colombia Deposito Centralizado de Valores Costa Rica Central de Valores S.A. 1 STATE STREET SCHEDULE B GLOBAL CUSTODY NETWORK DEPOSITORIES OPERATING IN NETWORK MARKETS COUNTRY DEPOSITORIES Croatia Ministry of Finance National Bank of Croatia Sredisnja Depozitarna Agencija d.d. Czech Republic Stredisko cennych papiru Czech National Bank Denmark Vaerdipapircentralen (Danish Securities Center) Egypt Misr for Clearing, Settlement, and Depository Estonia Eesti Vaartpaberite Keskdepositoorium Finland Finnish Central Securities Depository France Societe Interprofessionnelle pour la Compensation des Valeurs Mobilieres Germany Clearstream Banking AG, Frankfurt Greece Bank of Greece, System for Monitoring Transactions in Securities in Book-Entry Form Central Securities Depository (Apothetirion Titlon AE) Hong Kong Central Clearing and Settlement System Central Moneymarkets Unit Hungary Kozponti Elszamolohaz es Ertektar 1 STATE STREET SCHEDULE B GLOBAL CUSTODY NETWORK DEPOSITORIES OPERATING IN NETWORK MARKETS COUNTRY DEPOSITORIES (Budapest) Rt. (KELER) India National Securities Depository Limited Central Depository Services India Limited Reserve Bank of India Indonesia Bank Indonesia PT Kustodian Sentral Efek Indonesia Ireland Central Bank of Ireland Securities Settlement Office Israel Tel Aviv Stock Exchange Clearing House Ltd. (TASE Clearinghouse) Italy Monte Titoli S.p.A. Banca d'Italia Ivory Coast Depositaire Central - Banque de Reglement Jamaica Jamaica Central Securities Depository Japan Japan Securities Depository Center (JASDEC) Bank of Japan Net System Kenya Central Bank of Kenya Republic of Korea Korea Securities Depository Latvia Latvian Central Depository 1 STATE STREET SCHEDULE B GLOBAL CUSTODY NETWORK DEPOSITORIES OPERATING IN NETWORK MARKETS COUNTRY DEPOSITORIES Lebanon Custodian and Clearing Center of Financial Instruments for Lebanon and the Middle East (Midclear) S.A.L. Banque du Liban Lithuania Central Securities Depository of Lithuania Malaysia Malaysian Central Depository Sdn. Bhd. Bank Negara Malaysia, Scripless Securities Trading and Safekeeping System Mauritius Central Depository and Settlement Co. Ltd. Bank of Mauritius Mexico S.D. INDEVAL (Instituto para el Deposito de Valores) Morocco Maroclear Netherlands Nederlands Centraal Instituut voor Giraal Effectenverkeer B.V. (NECIGEF) New Zealand New Zealand Central Securities Depository Limited Norway Verdipapirsentralen (Norwegian Central Securities Depository) Oman Muscat Depository & Securities Registration Company, SAOC 1 STATE STREET SCHEDULE B GLOBAL CUSTODY NETWORK DEPOSITORIES OPERATING IN NETWORK MARKETS COUNTRY DEPOSITORIES Pakistan Central Depository Company of Pakistan Limited State Bank of Pakistan Palestine Clearing Depository and Settlement, a department of the Palestine Stock Exchange Peru Caja de Valores y Liquidaciones, Institucion de Compensacion y Liquidacion de Valores S.A Philippines Philippine Central Depository, Inc. Registry of Scripless Securities (ROSS) of the Bureau of Treasury Poland National Depository of Securities (Krajowy Depozyt Papierow Wartosciowych SA) Central Treasury Bills Registrar Portugal Central de Valores Mobiliarios Qatar Central Clearing and Registration (CCR), a department of the Doha Securities Market Romania National Securities Clearing, Settlement and Depository Company Bucharest Stock Exchange Registry Division National Bank of Romania Singapore Central Depository (Pte) Limited Monetary Authority of Singapore Slovak Republic Stredisko cennych papierov National Bank of Slovakia 1 STATE STREET SCHEDULE B GLOBAL CUSTODY NETWORK DEPOSITORIES OPERATING IN NETWORK MARKETS COUNTRY DEPOSITORIES Slovenia Klirinsko Depotna Druzba d.d. South Africa Central Depository Limited Share Transactions Totally Electronic (STRATE) Ltd. Spain Servicio de Compensacion y Liquidacion de Valores, S.A. Banco de Espana, Central de Anotaciones en Cuenta Sri Lanka Central Depository System (Pvt) Limited Sweden Vardepapperscentralen VPC AB (Swedish Central Securities Depository) Switzerland SegaIntersettle AG (SIS) Taiwan - R.O.C. Taiwan Securities Central Depository Co., Ltd. Thailand Thailand Securities Depository Company Limited Tunisia Societe Tunisienne Interprofessionelle pour la Compensation et de Depots des Valeurs Mobilieres Turkey Takas ve Saklama Bankasi A.S. (TAKASBANK) 1 STATE STREET SCHEDULE B GLOBAL CUSTODY NETWORK DEPOSITORIES OPERATING IN NETWORK MARKETS COUNTRY DEPOSITORIES Central Bank of Turkey Ukraine National Bank of Ukraine United Kingdom Central Gilts Office and Central Moneymarkets Office Venezuela Banco Central de Venezuela Zambia LuSE Central Shares Depository Limited Bank of Zambia TRANSNATIONAL Euroclear Clearstream Banking AG 1 SCHEDULE C MARKET INFORMATION PUBLICATION/TYPE OF INFORMATION BRIEF DESCRIPTION (FREQUENCY) THE GUIDE TO CUSTODY IN WORLD MARKETS An overview of safekeeping and (annually) settlement practices and procedures in each market in which State Street Bank and Trust Company offers custodial services. GLOBAL CUSTODY NETWORK REVIEW Information relating to the (annually) operating history and structure of depositories and subcustodians located in the markets in which State Street Bank and Trust Company offers custodial services, including transnational depositories. GLOBAL LEGAL SURVEY With respect to each market in which (annually) State Street Bank and Trust Company offers custodial services, opinions relating to whether local law restricts (i) access of a fund's independent public accountants to books and records of a Foreign Sub-Custodian or Foreign Securities System, (ii) the Fund's ability to recover in the event of bankruptcy or insolvency of a Foreign Sub-Custodian or Foreign Securities System, (iii) the Fund's ability to recover in the event of a loss by a Foreign Sub-Custodian or Foreign Securities System, and (iv) the ability of a foreign investor to convert cash and cash equivalents to U.S. dollars. SUBCUSTODIAN AGREEMENTS Copies of the subcustodian contracts (annually) State Street Bank and Trust Company has entered into with each subcustodian in the markets in which State Street Bank and Trust Company offers subcustody services to its US mutual fund clients. Network Bulletins (weekly): Developments of interest to investors in the markets in which State Street Bank and Trust Company offers custodial services. Foreign Custody Advisories (as necessary): With respect to markets in which State Street Bank and Trust Company offers custodial services which exhibit special custody risks, developments which may impact State Street's ability to deliver expected levels of service. 2 EX-11 4 a2053898zex-11.txt EXHIBIT (11) Exhibit (11) CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in this Registration Statement on Form N-1A of our report dated May 15, 2001, relating to the financial statements and financial highlights which appear in the March 31, 2001 Annual Report to Shareholders of State Street Research Money Market Fund (a series of State Street Research Money Market Trust), which is also incorporated by reference into the Registration Statement. We also consent to the references to us under the headings "Financial Highlights" and "Independent Accountants" in such Registration Statement. /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Boston, Massachusetts July 26, 2001 EX-18.(D) 5 a2053898zex-18_d.txt EXHIBIT (18)(D) Exhibit (18)(d) POWER OF ATTORNEY The undersigned, as Chairman of the Board of Trustees, Trustee and principal executive officer of State Street Research Money Market Trust ("Trust"), a Massachusetts business trust, hereby constitutes and appoints Francis J. McNamara, III and Darman A. Wing as the true and lawful attorneys of the undersigned, with full power to each of them alone to sign for the undersigned, in the name and in the capacity of the undersigned indicated below, any Registration Statements and any and all amendments thereto of the Trust filed with the Securities and Exchange Commission and generally to do all such things in the name and in the indicated capacity of the undersigned as are required to enable the 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 the signature of the undersigned as it has been and may be signed by said attorneys to said Registration Statements, and any and all amendments thereto. IN WITNESS WHEREOF, executed the 27th day of July, 2001. SIGNATURE CAPACITY /s/ Richard S. Davis Chairman of the Board of Trustees, Trustee - ------------------------ Richard S. Davis and principal executive officer EX-18.(E) 6 a2053898zex-18_e.txt EXHIBIT (18)(E) Exhibit (18)(e) POWER OF ATTORNEY The undersigned, as principal financial and accounting officer of State Street Research Money Market ("Trust"), a Massachusetts business trust, hereby constitutes and appoints Francis J. McNamara, III and Darman A. Wing as the true and lawful attorneys of the undersigned, with full power to each of them alone to sign for the undersigned, in the name and in the capacity of the undersigned indicated below, any Registration Statements and any and all amendments thereto of the Trust filed with the Securities and Exchange Commission and generally to do all such things in the name and in the indicated capacity of the undersigned as are required to enable the 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 the signature of the undersigned as it has been and may be signed by said attorneys to said Registration Statements, and any and all amendments thereto. IN WITNESS WHEREOF, executed the 27th day of July, 2001. SIGNATURE CAPACITY /s/ Douglas A. Romich Principal financial and accounting officer Douglas A. Romich EX-20.(A) 7 a2053898zex-20_a.txt EXHIBIT (20)(A) Exhibit (20)(b) SSR-2184 page 1 STATE STREET RESEARCH FUNDS - ------------------------------------------------------------------------------------------------------------------------------------ Mail this application, along with any other required documents to: NEW ACCOUNT APPLICATION STATE STREET RESEARCH FUNDS, P.O. Box 8408, Boston, MA 02266-8408. Registered representatives, mail this application to your home office - Use the Additional Services Application to take advantage for approval. QUESTIONS? CALL TOLL-FREE 1-877-773-8637. of a range of services, including checkwriting and the Systematic Withdrawal Plan. Check here if you are including the Additional Services Application with your New Account Application. 1 YOUR ACCOUNT - ------------------------------------------------------------------------------------------------------------------------------------ - - FILL IN ONE ACCOUNT TYPE ONLY. PLEASE PRINT IN CAPITAL LETTERS. - Individual Retirement Accounts require a different application. To obtain an IRA application, call us TOLL-FREE 1-87-SSR-FUNDS (1-877-773-8637) - - INDIVIDUAL OR JOINT ACCOUNT Owner's first name Middle Last name Owner's Social Security number Owner's date of birth [month / day / year] Joint owner's first name Middle Last name 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: Tenants in common Tenants by entirety Community property - - GIFT / TRANSFER TO A MINOR (UGMA/UTMA) (*ONLY 1 CUSTODIAN PER UGMA/UTMA) Custodian's first name Middle Last name As custodian for: Minor's first name Middle Last name Under the [minor's state of residence] Uniform Gift / Transfer to Minors Act Minor's Social Security number Minor's date of birth [month / day / year] - - TRUST ACCOUNT (*PLEASE ATTACH FIRST AND LAST PAGE OF TRUST AGREEMENT) Trustee's First name Middle Last name Co-trustee (if applicable): first name Middle Last name 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 or Social Security number I/We have included a corporate resolution, as is required to open this account. Type of entity: Corporation Partnership Estate Unincorporated association Guardian For all other types of accounts, please call www.statestreetresearch.com
2 YOUR ADDRESS SSR-2184 page 2 - ------------------------------------------------------------------------------------------------------------------------------------ Street number / P.O. Box Street Name City State Zip Code Daytime phone number Evening phone number ELECTRONIC DELIVERY OF FUND DOCUMENTS: To receive fund documents via electronic delivery including quarterly statements, financial reports and prospectuses, check here: Enter your email address: _______________________ *ELECTRONIC DELIVERY IS NOT AVAILABLE FOR SIMPLE IRAS AND CORPORATE RETIREMENT PLANS Check One: U.S. Citizen Non-U.S. Citizen - please include IRS form W-8 Check One: U.S. resident Resident of: Country: 3 Your Investment - ------------------------------------------------------------------------------------------------------------------------------------ - CHOOSE ONE SHARE CLASS AND ONE DISTRIBUTION OPTION FOR EACH FUND. - The minimum investment is $2,500 per account ($1,000 using Investamatic). Please refer to prospectus for details. FUND NAME AMOUNT YOU ARE INVESTING SHARE CLASS ALL DISTRIBUTIONS* - ------------------------------------------------------------------------------------------------------------------------------------ STATE STREET RESEARCH: A B(1) C Reinvested Direct By Deposit** Check*** Alpha $ , , . Argo $ , , . Aurora $ , , . Concentrated Growth $ , , . Concentrated International $ , , . Emerging Growth $ , , . Galileo $ , , . Global Resources $ , , . Government Income $ , , . Growth $ , , . Health Sciences $ , , . High Income $ , , . International Equity $ , , . Investment Trust $ , , . Legacy $ , , . Mid-Cap Growth $ , , . Money Market $ , , . Class E only New York Tax-Free $ , , . Strategic Growth & Income $ , , . Strategic Income $ , , . Strategic Income Plus $ , , . Tax-Exempt $ , , . Other: $ , , . Other: *IF NOTHING IS CHECKED, WE WILL REINVEST ALL DIVIDENDS. **PLEASE COMPLETE THE BANK ACCOUNT INFORMATION SECTION IN SECTION 6. ***Check will be mailed to the address of record. THIS INVESTMENT IS BEING MADE: by mail - make check payable to STATE STREET RESEARCH FUNDS by Federal Funds Wire; the control number is: 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: LETTER OF INTENT RIGHT OF ACCUMULATION I plan to invest, without obligation, a total of at least the following amount in eligible mutual funds When calculating my sales charges for this investment, please include over the next 13 months: the assets owned by me, my family members or other eligible persons. $100,000 $250,000 Check here if you have existing accounts. $500,000 $1 Million Please include investments made within the past 90 days in these accounts. Check here if you have existing accounts.
5. TELEPHONE EXCHANGES AND REDEMPTIONS SSR-2184 page 3 - ------------------------------------------------------------------------------------------------------------------------------------ - - TELEPHONE EXCHANGE AND REDEMPTION PRIVILEGE Unless I have checked the box below, the State Street Research Funds and their agents are authorized to act upon instructions received by telephone from me or any other person claiming to be me or my registered representative who can provide State Street Research with my account registration and address as it appears on State Street Research Funds' record. The State Street Research Funds and their agents will not be liable for unauthorized transactions if they employ reasonable procedures to confirm that instructions received by telephone are genuine. I agree to indemnify and hold harmless the State Street Research Funds and their agents that may be involved in transactions authorized by telephone against any claim or loss in connection with any telephone transaction effected on my account. I do NOT wish to authorize the automatic telephone exchange and redemption privilege. Accept only written instructions signed by me and all registered owners. 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 SERVICES (PLEASE PROVIDE YOUR BANK ACCOUNT INFORMATION BELOW): INVESTAMATIC Makes periodic investments in the State Street Research fund(s) of your choice. I authorize automatic withdrawals from the bank account specified at the bottom of the page. I request these withdrawals to occur Starting month: every month, on the ________ of the month. every 3 months, on the ________ of the month. Fund name $ , . Account number (if existing account) Investment amount ($50 per account minimum) Fund name $ , . Account number (if existing account) Investment amount ($50 per account minimum) 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. Bank registration must be identified to SSR account. If not, please complete section 8. 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: Checking account (voided, unsigned check attached) NOW / money market / savings account (deposit slip attached) Bank name Street number of bank Street name City State Zip code Bank routing number or ABA number Bank account number Bank account holder's first name Middle Last name (list exactly as on bank statements) Second bank account holder (if applicable): First name Middle Last name Signature of first bank account holder, exactly as on bank statements Signature of second bank account holder (if applicable) ---------------------------------------------------------------------------------- TAPE YOUR VOIDED CHECK OR DEPOSIT SLIP HERE BANK AND CREDIT UNION ROUTING INFORMATION. For deposits or withdrawals to your checking account, please tape a voided check so we may get bank or credit union account information. For deposits or withdrawals to a savings account, please tape a preprinted deposit slip. (Do not staple the slips.) ----------------------------------------------------------------------------------
7 Your Signature SSR-2184 page 4 - ------------------------------------------------------------------------------------------------------------------------------------ - 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 certification. I ACKNOWLEDGE THAT I: I CERTIFY, UNDER PENALTIES OF PERJURY, THAT: - - have received the current prospectus(es) for all funds in - the number shown on this form is my correct taxpayer which I am investing. identification number (or I am waiting for a number to be issued to me), and - - accept the terms of investment described in the prospectus(es) and this application. - I am not subject to backup withholding because (a) I am exempt from backup withholding, or (b) I have not been - - understand that these same terms will also apply to all notified by the Internal Revenue Service that I am subject shares obtained by exchange. to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that - - accept responsibility for unauthorized telephone I am no longer subject to backup withholding. instructions unless the fund's agents are negligent or unless I declined the privileges in Section 5. Your signature, exactly as your name appears in Section 1 Date [month / day / year] Signature of joint owner (if applicable), exactly as name appears in Section 1 Date [month / day / year] 8 SIGNATURE GUARANTEE - ONLY REQUIRED FOR EZ TRADER OR IF CHANGING OWNERSHIP - ------------------------------------------------------------------------------------------------------------------------------------ - If you are investing directly, have Part I completed; if not, have your dealer fill out Part II. - - I - For Direct Investments Name of bank or other guarantor Street number Street name City State Zip code 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] II - For Investments Through a Dealer Dealer name Street number of home office Street name City State Zip code Street number of branch office Street name City State Zip code Branch office number Branch office phone number THE DEALER: - - agrees to the terms of the current prospectus(es), - will indemnify the fund, its adviser, distributor or other application and current dealer agreement, which is included agents from any losses resulting from these instructions. by reference. - guarantees the owner's legal capacity and all signatures on - - represents that it has given the owner(s) the relevant this application and on related investment checks and prospectus(es). instructions, including the Additional Services Application. - - represents that it has completed this application according to instructions from the owner(s). Registered Representative's first name Middle Last name Registered Representative number Signature of authorized officer of dealer Date [month / day / year] Mail this application, along with any other required documents to: State Street Research Funds, P.O. Box 8408, Boston, MA 02266-8408. Registered representatives, mail this application to your home office for approval. Questions? TOLL-FREE 1-87-SSR-FUNDS (1-877-773-8637) www.statestreetresearch.com [LOGO] STATE STREET RESEARCH - -C-2000 State Street Research Investment Services, Inc., One Financial Center, Boston, MA 02111-2690 CONTROLNUMBER:(exp1001) SSR-LD SSR-2184-1000
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