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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-12
State Street Research Financial Trust
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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STATE STREET RESEARCH STRATEGIC INCOME PLUS FUND
A SERIES OF STATE STREET RESEARCH FINANCIAL TRUST
ONE FINANCIAL CENTER
BOSTON, MASSACHUSETTS 02111
Dear Shareholder:
Enclosed are a proxy statement and an announcement concerning a special
meeting of shareholders of the State Street Research Strategic Income Plus Fund
(the "Fund"). As discussed in the proxy statement, the Board of Trustees of the
Fund is proposing to liquidate the Fund in accordance with a Plan of Liquidation
attached to the proxy statement as Exhibit A. This proposal is very important.
The Fund's Trustees, who are appointed to safeguard shareholder interests, have
reviewed and approved the proposed liquidation of the Fund and have unanimously
determined that liquidation of the Fund is in the best interests of the Fund and
its shareholders. The Trustees recommend that you approve the Plan of
Liquidation after you carefully study the enclosed material.
Shareholders may wish to consider exchanging their shares of the Fund
for shares of another State Street Research fund prior to the date of
liquidation. Shareholders also may redeem their shares of the Fund prior to the
date of liquidation. Your exchange privileges and redemption rights are
described in detail in the Fund's current prospectus and Statement of Additional
Information. Please call 1-87-SSR-FUNDS (1-877-773-8637) for information and a
prospectus of any State Street Research fund which will include information such
as charges and expenses. Please read the prospectus carefully prior to investing
in any fund.
I encourage you to carefully review the information that explains the
proposal to liquidate the Fund in detail. As a shareholder, your vote is
important, and we hope that you will respond. By voting today, you can help the
Fund avoid the cost of follow-up communications. And to make it easier for you
to respond, we have enhanced our services to now provide you with the option of
voting your proxy over the Internet, as well as by mail, touch-tone phone or by
speaking with a customer service representative. In the meantime, if you have
any questions about the proposal, please call 1-87-SSR-FUNDS (1-877-773-8637).
As always, we very much appreciate your support as a shareholder.
Sincerely,
/s/ Richard S. Davis
Richard S. Davis
Chairman of the Board,
President and Chief Executive
Officer
State Street Research Financial Trust
<Page>
QUESTIONS & ANSWERS
Q: WHY AM I RECEIVING THIS PROXY STATEMENT?
A: The purpose of the Proxy Statement is to seek shareholder approval of a
Plan of Liquidation that provides for the liquidation of the Fund.
Q: WHY IS THE LIQUIDATION BEING PROPOSED?
A: The Board of Trustees has recommended that the Fund be liquidated. The
reasons for the recommendation include, among other reasons, the Fund's
small asset size, the Fund's low historical and anticipated sales
activity, and the fact that there can be no assurance that State Street
Research & Management Company, the Fund's investment manager, will be
able to continue to subsidize the Fund's expenses in the future. The
Board of Trustees believes that it would be in the best interests of
Fund shareholders to approve the liquidation of the Fund.
Q: HOW WILL APPROVAL OF THIS PROPOSAL AFFECT MY ACCOUNT?
A: If the Plan of Liquidation is approved by shareholders, the Fund's
assets will be sold for cash, its liabilities will be paid and the
remaining proceeds will be distributed to Fund shareholders.
Shareholders should carefully read and consider the discussion of the
proposal in the Proxy Statement.
Q. IF THE FUND LIQUIDATES, WHAT WILL BE THE FEDERAL INCOME TAX
CONSEQUENCES FOR ME?
A. On or before the date that the Fund is liquidated, the Fund will make
an initial distribution which will have the effect of distributing all
of the Fund's taxable income, if any, for the taxable year ended
October 31, 2001. On the date that the Fund is liquidated, the Fund
will make a final distribution, in cash, representing all of its
remaining net assets.
Generally, for individual shareholders, the initial distribution will
result in the receipt of taxable long-term capital gain and taxable
ordinary income, if any, for the year ended October 31, 2001. The final
liquidating distribution generally will result in a taxable capital
gain or loss to the extent that the amount of the distribution exceeds
or is less than the shareholder's basis in Fund shares.
For retirement plan participants and individual retirement account
holders, the distributions generally will not result in the recognition
of taxable income or gain, so long as the distribution proceeds are
received and held or reinvested by the trustee or custodian of the plan
or account.
Q: PRIOR TO THE LIQUIDATION, MAY I HAVE MY SHARES REDEEMED OR MAY I HAVE
MY SHARES EXCHANGED FOR SHARES OF ANOTHER STATE STREET RESEARCH FUND?
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A: Yes. You may redeem or exchange any of your Fund shares for shares of
another available State Street Research fund at any time prior to the
date of liquidation. The Fund's distributor has agreed to waive any
contingent deferred sales charge in connection with redemptions of
Class B, Class B(1) and Class C shares, and if applicable, Class A
shares, at any time through the liquidation date.
Q: WHAT AM I SUPPOSED TO DO WITH THIS MATERIAL?
A: You should read the material and then vote. There are four easy ways to
vote your proxy. The enclosed insert explains each of these methods.
Q: WILL MY VOTE MAKE A DIFFERENCE?
A: Yes. Your vote is needed to ensure that the proposal can be acted upon.
Your immediate response will save on the costs of any further
solicitations for a shareholder vote. We encourage you to participate
in the governance of your Fund.
Q: HOW DOES THE BOARD OF TRUSTEES RECOMMEND THAT I VOTE?
A: After careful consideration, the Board of Trustees unanimously
recommends that you vote "FOR" the Plan of Liquidation.
Q: WHAT IF I HAVE QUESTIONS?
A: If you have questions about the proposal, call 1-87-SSR-FUNDS
(1-877-773-8637). If you have questions about voting, call
1-866-720-8160.
IMPORTANT ADDITIONAL INFORMATION ABOUT THE PROPOSAL IS SET
FORTH IN THE ACCOMPANYING PROXY STATEMENT.
PLEASE READ IT CAREFULLY.
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STATE STREET RESEARCH STRATEGIC INCOME PLUS FUND
A SERIES OF
STATE STREET RESEARCH FINANCIAL TRUST
ONE FINANCIAL CENTER
BOSTON, MASSACHUSETTS 02111
----------------------------------------
NOTICE OF SPECIAL MEETING
OF SHAREHOLDERS
TO BE HELD ON DECEMBER 12, 2001
----------------------------------------
A Special Meeting of Shareholders ("Meeting") of State Street Research
Strategic Income Plus Fund (the "Fund"), a series of State Street Research
Financial Trust, a Massachusetts business trust (the "Trust"), will be held
at the offices of the Trust, One Financial Center, 31st Floor, Boston,
Massachusetts 02111, at 4 P.M. on December 12, 2001 for the following purposes:
1. To consider and act upon a proposal to approve and adopt a Plan of
Liquidation for the Fund.
2. To consider and act upon any matter incidental to the foregoing and to
transact such other business as may properly come before the Meeting and any
adjournments thereof.
The matters referred to above may be acted upon at said Meeting and any
adjournments thereof.
The close of business on September 18, 2001 has been fixed as the
record date for the determination of shareholders entitled to notice of, and
to vote at, the Meeting and any adjournments thereof.
TO ASSURE THAT YOUR VOTE WILL BE COUNTED, IT IS VERY IMPORTANT THAT
YOUR VOTING INSTRUCTIONS BE RECEIVED NO LATER THAN DECEMBER 10, 2001.
Instructions for shares held of record in the name of a nominee, such as a
broker-dealer or trustee of an employee benefit plan, may be subject to
earlier cut-off dates for receipt of such instructions established by such
intermediaries to facilitate a timely response.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE SIZE OF YOUR HOLDINGS IN THE
FUND. WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE
AND SIGN THE ENCLOSED PROXY FORM
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AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. CERTAIN SHAREHOLDERS MAY
ALSO VOTE BY TELEPHONE OR OVER THE INTERNET; PLEASE SEE PAGES 3 AND 4 FOR
DETAILS. IF YOU DESIRE TO VOTE IN PERSON AT THE MEETING, YOU MAY REVOKE YOUR
PROXY.
By Order of the Trustees
FRANCIS J. McNAMARA, III
Secretary
October 5, 2001
---------------------------
Date of Notice
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PROXY STATEMENT
This Proxy Statement is furnished to the shareholders of State
Street Research Strategic Income Plus Fund (the "Fund"), a series of State
Street Research Financial Trust (the "Trust"), in connection with the
solicitation of proxies by and on behalf of the Board of Trustees of the
Trust to be used at a Special Meeting of Shareholders of the Fund (the
"Meeting") to be held at the Trust's offices, One Financial Center, 31st
Floor, Boston, Massachusetts 02111, at 4 P.M., on December 12, 2001, and at
any adjournments thereof.
Any shareholder who has given a proxy has the right to revoke it at
any time prior to its exercise by attending the Meeting and voting his or her
shares in person or by submitting a subsequent telephone or electronic vote,
or a written notice of revocation or a later-dated proxy to the Trust at the
address of the Trust set forth on the cover page of this Proxy Statement
prior to the date of the Meeting. Shareholders of record of the Fund at the
close of business on September 18, 2001 (the "Record Date") are entitled to
notice of, and to vote at, the Meeting or any adjournments thereof. This
Proxy Statement and accompanying Proxy form and Notice of Special Meeting of
Shareholders were first sent or given to shareholders of the Fund on or about
October 10, 2001.
All shares of the Fund will vote together as a single class on the
proposal to liquidate the Fund. As of the Record Date, the Fund had a total
of 3,302,277 shares of common stock outstanding. Each share is entitled to
one vote with a proportionate vote for each fractional share. A majority of
the Fund's shares outstanding on the Record Date represented in person or by
proxy shall constitute a quorum and must be present for the transaction of
business at the Meeting.
MANNER OF VOTING PROXIES
If the proxy authorization ("Proxy") is properly given in time for a
vote at the Meeting (either by returning the paper Proxy form or by submitting a
Proxy electronically by telephone or over the Internet), the shares represented
thereby will be voted at the Meeting in accordance with the shareholder's
instructions. The Proxy grants discretion to the persons named therein, as
proxies, to take such further action as they may determine appropriate in
connection with any other matter which may properly come before the Meeting or
any adjournments thereof. The Board of Trustees of the Trust does not currently
know of any matter to be considered at the Meeting other than the matters set
forth in the Notice of Special Meeting of Shareholders.
Approval of the proposal (the "Proposal") to liquidate the Fund in
accordance with a Plan of Liquidation substantially in the form set forth as
Exhibit A to this Proxy Statement (the "Plan of Liquidation") requires the
affirmative vote of a majority of the outstanding voting securities of the
Fund as defined in the Investment Company Act of 1940, as amended (the "1940
Act"). Shares of each class of the Fund will vote together as a single class
on the Proposal. Under the 1940 Act, the vote of a majority of the
outstanding voting securities of the Fund means the affirmative vote of the
lesser of: (a) 67% or more of the shares of the Fund present at the meeting,
in person or by proxy, if the holders of more than 50% of the outstanding
shares of the
<Page>
Fund are present or represented by proxy, or (b) more than 50% of the
outstanding shares of the Fund.
The persons named as proxies may propose one or more adjournments of
the Meeting without further notice to permit further solicitation of Proxies,
provided such persons determine that an adjournment and additional solicitation
are reasonable and in the interest of shareholders, after consideration of all
relevant factors, including the nature of the Proposal, the percentage of votes
then cast, the percentage of negative votes then cast, the nature of the
proposed solicitation activities and the nature of the reasons for such further
solicitation. The persons named as proxies will vote those Proxies that are
present in favor of such an adjournment. Any such adjournment will require the
affirmative vote of a majority of the Fund shares present at the Meeting in
person or by proxy.
For purposes of determining the presence of a quorum for transacting
business at the Meeting and for determining whether sufficient votes have been
received for approval of the Proposal to be acted upon at the Meeting,
abstentions and broker non-votes will be treated as present at the Meeting and
entitled to vote on the matter, but which have not been voted. For this reason,
abstentions and broker non-votes will assist the Fund in obtaining a quorum but
will have the same effect as a vote against the Proposal. Broker non-votes are
proxies from brokers or nominees indicating that such persons have not received
instructions from the beneficial owner or other persons entitled to vote shares
on a particular matter with respect to which the brokers or nominees do not
have, or choose not to exercise, discretionary power.
A shareholder may vote:
- By telephone:
-- Through fully automated touch-tone voting or
-- Verbally, with a telephone representative;
- Over the Internet;
- By mail; or
- In person at the Meeting.
BY TELEPHONE
There are two convenient methods to vote by using the telephone.
(Please note, however, that these two telephone methods of voting are not
available to shareholders whose shares are held by a broker or other
intermediary on the shareholder's behalf.) If telephone voting is available for
a shareholder's account, toll-free telephone numbers will be printed on the
Proxy form. Prior to calling, the shareholder should read the Proxy Statement
and have his or her Proxy form at hand.
First, a shareholder may use the automated touch-tone voting method by
calling the toll-free number for that method provided on the Proxy form. At the
prompt, the shareholder should enter the control number provided on the Proxy
form, then follow the menu.
2
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Second, a separate toll-free number is provided on the Proxy form for
shareholders who wish to speak to a telephone representative directly and give
verbal instructions. The telephone representative will assist the shareholder
with the voting process. The representative will not be able to assist a
shareholder with information that is not contained in the Proxy Statement, and
the representative will not make recommendations on how to vote on the Proposal.
Telephone calls will be recorded.
A written confirmation of the shareholder's telephone instructions will
be mailed within 72 hours. The shareholder should immediately call
1-866-720-8160 toll-free between 9 A.M. and 6 P.M. Monday through Friday eastern
time if no confirmation is received or if the shareholder's instructions have
not been properly reflected.
INTERNET VOTING
To vote over the Internet, the shareholder should log onto
www.ssrfunds.com and click on the proxy voting button. Prior to logging on,
the shareholder should read the Proxy Statement and have his or her Proxy
form at hand. The shareholder should enter the control number provided on the
Proxy form and follow the instructions on the screen. If a shareholder
receives more than one Proxy form, he or she may vote them during the same
session. Each Proxy form has a different control number.
BY MAIL
To vote by mail, the shareholder should date and sign the Proxy form
included with this Proxy Statement, indicating his or her vote on the proposal,
and return the form in the envelope provided.
ADDITIONAL INFORMATION
SHAREHOLDERS VOTING THEIR PROXIES BY EITHER TELEPHONE METHOD OR OVER
THE INTERNET SHOULD NOT RETURN THEIR PROXY FORMS BY MAIL.
A person submitting votes by telephone or over the Internet is deemed
to represent that he or she is authorized to vote on behalf of all owners of the
account, including spouses or other joint owners. By using the telephone or the
Internet to submit voting instructions, the shareholder is authorizing PFPC
Global Fund Services ("PFPC"), a proxy solicitation firm, and its agents, to
execute a proxy to vote the shares of the account at the Meeting as the
shareholder has indicated.
Any shareholder who has given a Proxy, by telephone, over the Internet
or in written form, has the right to revoke it at any time prior to its exercise
by submitting a subsequent telephone or electronic vote, or a written notice of
revocation or a later-dated Proxy, or by attending the Meeting and voting his or
her shares in person.
The Trust believes that the procedures for authorizing the execution of
a Proxy by telephone or over the Internet set forth above are reasonably
designed to ensure that the identity of the shareholder casting the vote is
accurately determined and that the voting instructions of the shareholder are
accurately recorded.
3
<Page>
In some cases, proxy solicitation materials may be included in one
package for more than one account with the same tax I.D. number and address of
record.
PFPC and its agents will assist with the mailing and tabulation effort
and may also solicit Proxies by contacting shareholders by telephone. All the
costs of the solicitation will be borne by the Fund. The Fund's cost for PFPC's
services is not expected to exceed $15,000. The Fund also will reimburse
brokerage firms and others for their expenses in forwarding solicitation
material to the beneficial owners of shares of the Fund. Representatives of
State Street Research Service Center and other representatives of the Trust may
also solicit Proxies.
QUESTIONS ABOUT THE PROPOSAL SHOULD BE DIRECTED TO STATE STREET
RESEARCH SERVICE CENTER AT 1-87-SSR-FUNDS (1-877-773-8637), ONE FINANCIAL
CENTER, BOSTON, MASSACHUSETTS 02111. UPON REQUEST, STATE STREET RESEARCH SERVICE
CENTER ALSO WILL PROVIDE THE MOST RECENT ANNUAL REPORT AND ANY SEMIANNUAL REPORT
ISSUED AFTER THE ANNUAL REPORT FOR THE FUND WITHOUT CHARGE.
SHARES OUTSTANDING AND BENEFICIAL OWNERSHIP
As of the Record Date, as shown on the books of the Fund, there were
issued and outstanding the following number of shares of beneficial interest of
each class of the Fund:
<Table>
<Caption>
CLASS A CLASS B(1) CLASS B CLASS C CLASS S TOTAL
------- ---------- ------- ------- ------- -----
116,072 124,628 63,977 51,773 2,945,827 3,302,277
</Table>
Listed below are the persons and entities who were the record or
beneficial owners of 5% or more of the shares of the Fund as of August 31,
2001. Such owners may disclaim beneficial ownership of all or part of the
shares listed for them.
4
<Page>
<Table>
<Caption>
AMOUNT AND NATURE
NAME AND ADDRESS OF OWNERSHIP
OF RECORD OR BENEFICIAL OWNER (NUMBER OF SHARES) % OF FUND
----------------------------- ------------------ ---------
Metropolitan Life 2,522,673 76.4
Insurance Company
One Madison Avenue
New York, NY 10003
</Table>
As of August 31, 2001, the Trustees and principal officers of the
Trust, as a group, owned none of the Fund's outstanding shares.
State Street Research & Management Company (the "Investment Manager")
serves as investment manager of the Fund and State Street Research Investment
Services, Inc. (the "Distributor") serves as distributor of the Fund. The
Investment Manager and the Distributor are located at One Financial Center,
Boston, Massachusetts 02111 and are indirect, wholly-owned subsidiaries of
MetLife, Inc. ("MetLife"). MetLife and its affiliated entities have indicated
that with respect to shares of the Fund for which they have voting authority,
they intend to vote for and against the Proposal in the same relative proportion
as do the other shareholders of the Fund who cast votes by proxy or otherwise at
the Meeting.
PROPOSAL
LIQUIDATION OF THE FUND
PROPOSED LIQUIDATION
The Board of Trustees of the Trust has approved the liquidation of the
Fund. The liquidation will be implemented in accordance with the Plan of
Liquidation substantially in the form set forth as Exhibit A to this Proxy
Statement. The Plan of Liquidation will become effective upon the adoption and
approval of the Plan of Liquidation by shareholders of the Fund
5
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(such date of adoption and approval, the "Effective Date"). As soon as
practicable after the Effective Date, the Fund will cease to invest its assets
in accordance with its investment objective and will sell all of its portfolio
securities and other assets in order to convert the Fund's assets to cash. The
Fund will also pay, or set aside in cash equivalents, the amount of all known or
reasonably ascertainable liabilities of the Fund incurred or expected to be
incurred prior to the liquidation of the Fund. On or before the date that the
Fund is liquidated (the "Liquidation Date"), the Fund will make a distribution
which, together with all previous dividends, will have the effect of
distributing all of the Fund's taxable income for the taxable year ended October
31, 2001. Thereafter, the Fund will determine the net asset value of each class
of the Fund's shares (the aggregate value of the assets of the Fund allocable to
the class less the sum of the aggregate amount of liabilities allocable to the
class) and make a final liquidating distribution in cash to the shareholders of
record of such class on the Liquidation Date in proportion to the number of
shares of such class held by the shareholders. The proposed transaction
described above is referred to in this Proxy Statement as the "Liquidation."
The Distributor has agreed to waive any contingent deferred sales
charge ("CDSC") normally imposed upon Class B(1), Class B and Class C
shareholders, and in certain instances, upon Class A shareholders, for
shareholders receiving distributions in connection with the redemption of their
shares of the Fund on the Liquidation Date and on redemptions prior to the
Liquidation.
Prior to the Liquidation Date, shareholders may redeem their shares of
the Fund or may exchange their shares of the Fund for shares of other State
Street Research funds as described in the current prospectus and Statement of
Additional Information of the Fund. Shareholders will not have any dissenter's
rights or right of appraisal in connection with the Liquidation.
The Plan of Liquidation may be terminated by the Board of Trustees or
officers at any time prior to the consummation of the Liquidation, without
liability on the part of the Fund or its Trustees, officers or shareholders, if
circumstances should develop that, in the opinion of the Board of Trustees, make
proceeding with the Liquidation inadvisable. The Plan of Liquidation may also be
amended, waived or supplemented by the Board of Trustees or officers of the
Trust.
The expenses incurred in connection with entering into and carrying out
the provisions of the Plan of Liquidation, whether or not the Liquidation is
consummated, will be paid by the Fund.
REASONS FOR THE LIQUIDATION
The Fund commenced operations in 1994. The Fund uses an asset
allocation strategy, investing under normal conditions approximately 70% of
net assets in government and corporate bonds and mortgage-related and other
debt securities, and 30% in stocks. In considering the proposed Liquidation,
the Board of Trustees took into account the fact that the size of the Fund
has remained small since the commencement of operations and that the
Distributor does not anticipate that sales of the Fund will increase in the
foreseeable future. As of August 31, 2001, the Fund's net assets were $34.4
million. In addition, the Board noted that the Distributor has been
voluntarily subsidizing the Fund's operations since the commencement of
operations and that there were no assurances as to whether such subsidies
would be able to be continued in
6
<Page>
the future. Without continued subsidization, the Fund's expense ratio would
increase, which would have an adverse effect on the Fund's performance. After
considering these and other factors, the Trustees, including all of the
independent Trustees, unanimously approved the liquidation of the Fund.
FEDERAL INCOME TAX CONSEQUENCES
The following is a general summary of the federal income tax
consequences of the Liquidation to individual U.S. citizens and certain
retirement plan participants and individual retirement account holders that hold
Fund shares. This summary is based on the tax laws and regulations in effect on
the date of this proxy statement, all of which are subject to change by
legislative or administrative action, possibly with retroactive effect. Also,
this summary does not address state or local tax consequences. THIS SUMMARY IS
NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING, AND EACH SHAREHOLDER IS URGED TO
CONSULT HIS OR HER OWN TAX ADVISER REGARDING THE TAX CONSEQUENCES TO THE
SHAREHOLDER, IN HIS OR HER INDIVIDUAL CIRCUMSTANCES, OF THE FUND'S LIQUIDATION
AND THE RECEIPT OF FUND DISTRIBUTIONS.
The Fund intends to retain its qualification as a regulated investment
company under the Internal Revenue Code of 1986, as amended (the "Code"), during
the liquidation period. In order to so qualify, the Fund will, on or before the
Liquidation Date, make an initial distribution of an amount which, together with
all previous dividends, has the effect of distributing all of the Fund's taxable
income, if any, for the Fund's taxable year ended October 31, 2001. For
individual shareholders, this distribution generally will result in taxable
long-term capital gain and taxable ordinary income, if any, for the taxable year
ended October 31, 2001.
On the Liquidation Date, the Fund will make a final distribution, in
cash, representing all of its remaining net assets. Shareholders will be treated
as having sold their shares for the amount of this liquidating distribution. An
individual shareholder will recognize gain or loss on that sale measured by the
difference between the shareholder's tax basis for the shares and the amount of
the distribution. If the shares were held as capital assets, the gain or loss
will be characterized as capital gain or loss.
Qualified retirement plans and individual retirement accounts
(collectively, "Retirement Accounts") are generally exempt from federal income
tax. Distributions by the Fund to a Retirement Account will generally not be
taxable for federal income tax purposes, so long as the distribution proceeds
are received and held or reinvested by the trustee or custodian of the
Retirement Account. However, if proceeds are disbursed from the Retirement
Account to the beneficial owner, such proceeds will be taxable to such
beneficial owner in accordance with the rules applicable to distributions
from a Retirement Account (generally at ordinary income tax rates), and an
additional 10% federal income tax penalty also may apply on the taxable
amount of the distribution. A beneficial owner of a Retirement Account
receiving such a distribution may be able to avoid the foregoing tax and
penalty by a rollover of the proceeds to a new Retirement Account in
accordance with applicable law.
Shareholders should be aware that if a shareholder has failed to
furnish a correct taxpayer identification number, has failed to fully report
dividend or interest income, or has failed to certify that the shareholder has
provided a correct taxpayer identification number, the shareholder may be
subject to 30.5% backup withholding by the Fund.
7
<Page>
RECOMMENDATION OF THE TRUSTEES
The Trustees, including the Trustees who are not interested persons of
the Trust, recommend that you vote FOR the Proposal. If the Proposal is not
approved by the shareholders of the Fund, the Fund will continue to operate as a
portfolio series of the Trust in accordance with its stated investment
objectives and policies. The Trustees would then consider what, if any,
alternatives are in the best interests of Fund shareholders.
8
<Page>
OTHER MATTERS TO COME BEFORE THE MEETING
The Trustees of the Trust do not intend to present any other business
at the Meeting, nor are they aware that any shareholder intends to do so. If,
however, any other matters are properly brought before the Meeting, the persons
named in the accompanying Proxy will vote thereon in accordance with their
judgment.
NO ANNUAL MEETINGS OF SHAREHOLDERS
There will be no annual or further special meetings of shareholders of
the Trust unless required by applicable law or called by the Trustees of the
Trust in their discretion.
Shareholders wishing to submit proposals for inclusion in a proxy
statement for a subsequent shareholder meeting should send their written
proposals to the Secretary, State Street Research Financial Trust, One Financial
Center, Boston, Massachusetts 02111. Shareholder proposals should be received in
a reasonable time before the solicitation is made.
WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING, PLEASE FILL IN, DATE
AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. NO
POSTAGE IS NECESSARY IF IT IS MAILED IN THE UNITED STATES. CERTAIN SHAREHOLDERS
MAY ALSO VOTE BY TELEPHONE OR OVER THE INTERNET; PLEASE SEE PAGES 3 AND 4 FOR
DETAILS.
October 5, 2001
------------------
Date of Proxy Statement
9
<Page>
EXHIBIT A
PLAN OF LIQUIDATION
This PLAN OF LIQUIDATION ("Plan") dated as of , 2001, is made by State
Street Research Financial Trust, a Massachusetts business trust (the "Trust"),
on behalf of State Street Research Strategic Income Plus Fund, a series of the
Trust (the "Fund").
W I T N E S S E T H:
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Trustees of the Trust, including a majority of the
Trustees who are not "interested persons" of the Trust within the meaning of the
1940 Act, have determined that the liquidation of the Fund is in the best
interests of the shareholders of the Fund; and
WHEREAS, this Plan is intended to be and is adopted as a plan of
complete liquidation, pursuant to which all of the assets of the Fund shall be
liquidated, all upon the terms and conditions hereinafter set forth in this
Plan.
NOW, THEREFORE, the Trust hereby declares as follows:
1. EFFECTIVE DATE OF THE PLAN. The Plan shall be and become
effective only upon the adoption and approval of the Plan, at a meeting of the
shareholders of the Fund called for the purpose of voting on the Plan, by the
affirmative vote of a majority of the outstanding voting securities of the Fund
as defined in the 1940 Act, which means the affirmative vote of the lesser of
(a) 67% or more of the shares of the Fund present at the meeting, in person or
by proxy, if the holders of more than 50% of the outstanding shares of the Fund
are present or represented by proxy or (b) more than 50% of the outstanding
shares of the Fund. The date of such adoption of the Plan by the shareholders of
the Fund is referred to as the "Effective Date."
2. LIQUIDATION OF ASSETS. As soon as practicable after the
Effective Date, all of the portfolio securities and other assets, if any, of the
Fund shall be sold for cash or cash equivalents.
3. PAYMENT OF LIABILITIES. As soon as practicable after the
Effective Date, the Fund shall deliver and pay, or set aside in cash
equivalents, the amount of all known or reasonably ascertainable liabilities of
the Fund incurred or expected to be incurred on or prior to the Liquidation Date
(as defined below).
4. EXPENSES. The expenses incurred in connection with the
transactions contemplated by this Plan, whether or not the transactions
contemplated hereby are consummated, will be borne by the Fund.
5. LIQUIDATION. The officers of the Fund shall establish a date
(the "Liquidation Date") for the liquidation of the Fund following the
consummation of the sale of the Fund's
A-1
<Page>
portfolio securities and other assets as provided in Section 2 and the payment
of liabilities as provided in Section 3. On or before the Liquidation Date, the
Fund will make a distribution which, together with all previous dividends, will
have the effect of distributing all of the Fund's taxable income for the taxable
year ended October 31, 2001. The officers of the Fund shall then determine the
net asset value of each class of the Fund's shares as of the close of regular
trading on the New York Stock Exchange on the Liquidation Date (the net asset
value of each class of shares of the Fund as so determined, the "Liquidation
Value"). The shareholders of record of the Fund as of the close of business on
the Liquidation Date shall be certified by the Trust's transfer agent. The Fund
will make a final liquidating distribution in cash in an amount equal to the
Liquidation Value of each class to the shareholders of record on the Liquidation
Date in redemption of the shares of the Fund in proportion to the number of
shares of such class held by such shareholders and recorded on the books of the
Trust.
6. LIQUIDATING ACCOUNT. In the event the Fund is unable to
distribute all its assets pursuant to the Plan because of its inability to
locate shareholders to whom a liquidating distribution will be sent, the Fund
may create, at the expense of such shareholders, a liquidating account with a
financial institution and deposit therein any remaining assets of the Fund for
the benefit of the shareholders that cannot be located.
7. DISSENTER'S RIGHTS. No shareholder shall have any dissenter's
right or right of appraisal in connection with the liquidation of the Fund.
8. FILINGS. As soon as practicable after the distribution of all
of the Fund's assets in complete liquidation of the Fund, the officers or
assistant officers of the Trust shall close the books of the Fund and prepare
and file any and all required income tax returns and other documents and
instruments, and file, or cause to be filed, with the Secretary of the
Commonwealth of Massachusetts and any other appropriate governmental
authorities, any and all documents and instruments necessary to effect the
abolishment of the Fund.
9. TERMINATION. This Plan and the transactions contemplated
hereby may be terminated and abandoned by the Board of Trustees of the Trust or
by the officers of the Trust at any time prior to the Liquidation Date, without
liability for damages on the part of the Fund or its Trustees, officers or
shareholders, if circumstances should develop that, in the opinion of the Board
of Trustees, in its sole discretion, make proceeding with this Plan inadvisable.
10. AMENDMENTS. This Plan may be amended, waived or supplemented
by the Trustees or authorized officers of the Trust acting on behalf of the
Fund.
11. GOVERNING LAW. This Plan shall be governed and construed in
accordance with the laws of The Commonwealth of Massachusetts, except as to
matters of conflicts of laws.
12. FURTHER ASSURANCES. The Trust shall take such further action
as may be necessary or desirable and proper to consummate the transactions
contemplated hereby,
IN WITNESS WHEREOF, the Trust, on behalf of the Fund, has caused this
Plan to be executed as of the date first set forth above by its duly authorized
representatives.
A-2
<Page>
STATE STREET RESEARCH
FINANCIAL TRUST, on behalf
of State Street Research
Strategic Income Plus Fund
By:
-----------------------
A-3
<Page>
[FRONT OF PROXY CARD]
VOTE BY TELEPHONE, ON THE INTERNET OR BY MAIL
Vote this proxy card TODAY! Your prompt response will save your Fund
the expense of additional mailings.
Option 1: Automated Touch Tone Voting: Call toll-free 1-888-221-0697
Option 2: Telephone Rep. Assisted Voting: Call toll-free 1-866-720-8160
Option 3: Over the Internet at www.ssrfunds.com
Option 4: Return this proxy card using the enclosed envelope
Special Meeting of Shareholders-- December 12, 2001
*** CONTROL NUMBER: ***
--------
[arrow] Please fold and detach card at perforation before mailing [arrow]
STATE STREET RESEARCH STRATEGIC INCOME PLUS FUND
a series of State Street Research Financial Trust
The undersigned hereby appoints Richard S. Davis, Francis J.
McNamara, III, Darman A. Wing and Amy L. Simmons, and each of them, as
proxies with full power of substitution to act for and vote on behalf of the
undersigned all shares of the above fund (the "Fund"), which the undersigned
would be entitled to vote if personally present at the Special Meeting of the
Shareholders to be held at the principal offices of the Fund, One Financial
Center, 31st Floor, Boston, Massachusetts 02111, at 4:00 P.M. on December 12,
2001, or at any adjournments thereof, on the item described on the other side
of this form, as set forth in the Notice of Special Meeting of Shareholders
and the accompanying Proxy Statement dated October 5, 2001, receipt of which
is acknowledged by the undersigned. PLEASE INDICATE ANY CHANGE OF ADDRESS
BELOW. This proxy may be revoked at any time prior to the exercise of the
powers conferred thereby. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
TRUSTEES.
IF NOT VOTING BY PHONE OR THE INTERNET, IT IS IMPORTANT THAT
THIS PROXY BE SIGNED AND RETURNED IN THE ENCLOSED ENVELOPE.
DATE:___________________________
NOTE: Please date and sign exactly as name or names appear hereon and return in
the enclosed envelope, which requires no postage. When signing as attorney,
executor, trustee, guardian or officer of a corporation, please give title as
such.
------------------------------------------------------------
------------------------------------------------------------
Signature(s) if held jointly (Title(s), if required)
CONTINUED ON REVERSE SIDE
<Page>
------------------------------------------------------------------------------
PLEASE FOLD AND DETACH CARD AT PERFORATION BEFORE MAILING
------------------------------------------------------------------------------
If a choice is specified for the proposal, this proxy will be voted as
indicated. IF NO CHOICE IS SPECIFIED FOR THE PROPOSAL, THIS PROXY WILL BE VOTED
FOR THE PROPOSAL. In their discretion the proxies are authorized to vote upon
such other business as may come before the Meeting. The Board of Trustees
recommends a vote FOR the proposal.
1. To approve and adopt a Plan of Liquidation for the Fund.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
PLEASE SIGN ON REVERSE SIDE
<Page>
REQUEST TO RECONSIDER
PRIOR [ABSTENTION] ["AGAINST" VOTE]
(date)
To Shareholders of the State Street Research Strategic Income Plus Fund:
Recently we solicited your proxy vote on an important proposal. Because you
returned a proxy form which indicated that you [abstained from voting on] [voted
"Against"] the proposal that is still open, we are contacting you again to ask
that you reconsider your [abstention] [vote "Against"] and vote "For" the
proposal. The Fund is very close to the requisite vote to approve the proposal
and your vote may make a difference. The meeting has been adjourned to allow
more time to obtain votes.
The open proposal is proposal 1. Proposal 1 relates to a Plan of Liquidation
that provides for the liquidation of the Fund. The proposal is described in more
detail in the Proxy Statement. Please call 1-87-SSR-FUNDS (1-877-773-8637) if
you need another copy of the Proxy Statement.
Please indicate your vote, sign, date and return promptly the enclosed
Supplemental Proxy form in the special accompanying envelope. Returning your
Supplemental Proxy form in the accompanying envelope will expedite processing
and does not require any postage from you. (If your return envelope is for
Federal Express, call for free pick-up at 1-800-238-5355.)
You may receive a telephone call urging you to return your Supplemental Proxy
form. If you have any questions, please contact the State Street Research
Service Center toll-free nationwide at 1-87-SSR-FUNDS (1-877-773-8637) between 8
a.m. and 6 p.m. eastern time.
Thank you.
State Street Research
Service Center
<Page>
SUPPLEMENTAL PROXY FORM
Special Meeting of Shareholders--____________ __, 2001
The undersigned hereby submits this Supplemental Proxy to make the below
indicated changes to the [vote(s)] [abstention(s)] previously submitted by the
undersigned in connection with a Special Meeting of Shareholders as described in
a related Proxy Statement dated [ DATE ], 2001.
THIS SUPPLEMENTAL PROXY WILL SUPERSEDE ANY PRIOR PROXY FORM OR TELEPHONE OR
INTERNET VOTE SUBMITTED.
If a choice is specified for the proposal, this proxy will be voted as
indicated. IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED FOR THE PROPOSAL.
In their discretion the proxies are authorized to vote upon such other business
as may properly come before the Meeting. The Board of Trustees recommends a vote
FOR the proposal.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES.
IF NOT VOTING BY PHONE OR THE INTERNET, IT IS IMPORTANT THAT THIS
PROXY BE SIGNED AND RETURNED IN THE ENCLOSED ENVELOPE.
DATE: ___________________________________
NOTE: Please date and sign exactly as name or names appear hereon and return in
the enclosed envelope, which requires no postage. When signing as attorney,
executor, trustee, guardian or officer of a corporation, please give title as
such.
---------------------------------------------------
---------------------------------------------------
Signature(s) if held jointly (Title(s), if required)
CONTINUED ON REVERSE SIDE
<Page>
1. To approve and adopt a Plan of Liquidation for the Fund.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
PLEASE SIGN ON REVERSE SIDE
<Page>
----------------------------------------------------------------------------
[Custom House tower graphic]
State Street Research Online Proxy Vote Center
----------------------------------------------------------------------------
If you have specific questions on voting or voting procedures, please call
1-866-720-8160 between the hours of 9:00 a.m. and 6:00 p.m. eastern time, Monday
through Friday. For questions on a specific proxy proposal, please call a
Service Center representative at 1-87-SSR-FUNDS (1-877-773-8637) between the
hours of 8:00 a.m. and 6:00 p.m. eastern time, Monday through Friday.
Please Enter Control Number from Your Proxy Card: _ _ _ _ _ _ _ _ _ _ _ _ _ _
Check here / / to vote in favor of all proposals as the Board recommends,
then click the VOTE button below.
-OR-
To vote on each proposal separately, click the VOTE button only.
[VOTE BUTTON]
[GRAPHIC IMAGE OF GENERIC PROXY CARD]
proxyweb.com is a service of MIS, an ADP
Company
Full service proxy specialists
This site is best viewed using Netscape or
Internet Explorer versions 3.0 or higher and
using a display resolution of 800 X 600.
[LOGO: State Street Research]
<Page>
Internet Proxy Voting Service
Proxy Voting Form
State Street Research Strategic Income Plus Fund
If a choice is specified for the proposal, this proxy will be voted as
indicated. IF NO CHOICE IS SPECIFIED FOR THE PROPOSAL, THIS PROXY WILL BE
VOTED FOR THE PROPOSAL. In their discretion the proxies are authorized to
vote upon such other business as may come before the Meeting. The Board of
Trustees recommends a vote FOR the proposal.
-----------------------------------------------------------------------------
Proposal 1. To approve and adopt a Plan of Liquidation for the Fund.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
=============================================================================
Please refer to the Proxy Statement for a complete discussion
of the proposal.
IF THIS PROXY IS SUBMITTED AND NO CHOICE IS SPECIFIED, THIS PROXY WILL
BE VOTED FOR THE PROPOSAL.
=============================================================================
To receive email confirmation, enter your email address here: _____________
Press this button to /SUBMIT/ your Proxy Vote.
If you have specific questions on voting or voting procedures, please call
1-866-720-8160 between the hours of 9:00 a.m. and 6:00 p.m. eastern time,
Monday through Friday. For questions on a specific proxy proposal, please
call a Service Center representative at 1-87-SSR-FUNDS (1-877-773-8637)
between the hours of 8:00 a.m. and 6:00 p.m. eastern time, Monday through
Friday.
Please review your selections carefully before voting.
If you vote more than once on the same Proxy, only your last (most recent)
vote will be considered valid.
<Page>
PROPOSED TELEPHONE SCRIPT
STATE STREET RESEARCH STRATEGIC INCOME PLUS FUND
Special Meeting of Shareholders
_____________, 2001
THIS IS [NAME OF CALLER] _____________________________, CALLING ON BEHALF OF
YOUR STATE STREET RESEARCH STRATEGIC INCOME PLUS FUND.
MR./MRS. __________________________ AS OF YET WE HAVE NOT RECEIVED YOUR VOTED
PROXY. SINCE A NEW PROXY FORM HAS JUST BEEN MAILED TO YOU, WE ARE HOPING THAT
YOU WOULD TAKE THIS OPPORTUNITY TO VOTE YOUR PROXY OVER THE PHONE.
[IF THE SHAREHOLDER WISHES TO VOTE]
GREAT, MR./MRS. __________________.
PROPOSAL NUMBER ONE IS STILL OPEN FOR A VOTE. PROPOSAL NUMBER ONE RELATES TO
LIQUIDATION OF THE FUND AS DESCRIBED IN THE PROXY STATEMENT. WOULD YOU LIKE TO
VOTE TO APPROVE THE PLAN OF LIQUIDATION FOR THE FUND, AS DESCRIBED IN THE PROXY
STATEMENT?
[IF THE SHAREHOLDER DECLINES TO VOTE]THANK-YOU FOR YOUR TIME AND HAVE A GOOD
DAY.
<Page>
[BUCKSLIP]
[STATE STREET RESEARCH LOGO]
Four easy ways to vote your proxy.
Choose the method that's most convenient for you
and vote your proxy today!
1. Vote by Automated Touch-Tone Telephone. If a telephone number appears on
the upper left corner of your proxy card, you may vote by telephone.
Call Toll-Free: 1-888-221-0697
Enter the control number that appears on the front of your proxy card and follow
the voice prompts to record your vote. Telephone voting is available 24 hours a
day, 7 days a week. If you have received more than one proxy card, each card has
a different control number and must be voted separately. You can vote all of
your cards on the same phone call.
2. Vote by Speaking with a Telephone Representative. If a telephone number
appears on the upper left corner of your proxy card, you may vote by telephone.
A telephone representative will assist you with the voting process. They are
available between 9 a.m. and 6 p.m. Monday through Friday eastern time.
Call Toll-Free: 1-866-720-8160
3. Vote over the Internet. If a control number appears on the front of your
proxy card, you may vote over the Internet. Log on to:
www.ssrfunds.com
and click on the proxy voting button. Enter the control number that appears on
the front of your proxy card and follow the instructions on the screen. You can
vote all cards in the same session.
4. Vote by mail. Sign your proxy card(s) and return them in the enclosed
postage-paid envelope. Note: Your proxy is not valid unless it is signed.
Note: If you vote by telephone or Internet, please do not return your proxy
card(s).