Table of Contents

---

---

---

---

(1)

The initial public offering price of separate PACES is $200 per separate PACES. The initial public offering price of separate COVERS is $39.60 per separate COVERS. The proceeds of separate COVERS will be used to purchase the pledged common stock.

---

---

---

Table of Contents

•

SPACES,

•

separate PACES,

•

separate COVERS,

•

shares of our common stock issuable upon settlement of the fixed-share purchase contracts and in respect of deferred contract payments, and

•

our notes issuable in respect of deferred contract payments.

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

(1)

Share data restated for 2-for-1 stock split in 2001.

(2)

In November 2001, the Financial Accounting Standards Board, or FASB, issued Emerging Issues Task Force (EITF) No. 01-14, “Income Statement Characterization of Reimbursements Received for Out-Of-Pocket Expenses Incurred.” This guidance, effective January 1, 2002, requires companies to recognize the reimbursement of client out-of-pocket expenses on a gross basis as revenue and operating expense. Prior to 2002, we netted these client reimbursements against the corresponding operating expenses. Client reimbursements for out-of-pocket expenses are reflected in fee revenue in the information set forth for the year ended December 31, 2002. The years ended December 31, 1998 through December 31, 2001 have been reclassified to reflect this presentation, which resulted in increases in fee revenue and operating expenses for such years. The reclassification had no impact on net income.

---

Table of Contents

(3)

Statement of Income data as presented above is prepared in accordance with accounting principles generally accepted in the United States (GAAP) and includes significant non-operating special items and reports goodwill amortization expense in accordance with the accounting practices applicable for those periods presented.

(1)

Operating Results exclude the results of certain significant transactions not representative of ongoing operations.

(2)

Operating Results include fully taxable equivalent adjustments that increase net interest revenue to reflect investment yield on tax-free investments on an equivalent basis with taxable investments.

(3)

Operating Results exclude goodwill amortization expense from operating expenses in 2001 and prior years, to be consistent with GAAP accounting required beginning in 2002.

(a)

Net income for the years ended December 31, 1997 through December 31, 2001 are reflected as audited. Net income for the year ended December 31, 2002 is unaudited.

---

Table of Contents

(1)

a PACES, which will have a stated amount of $200 and will consist of

(a)

a fixed-share purchase contract under which

•

you will agree to purchase from us, for $200, 5.0505 shares of our common stock on November 15, 2005, which we refer to as the “fixed-share stock purchase date” and

•

we will pay you quarterly contract payments at the rate of 0.75% of the stated amount of $200 per year as specified below,

(b)

an ownership interest in a zero-coupon U.S. treasury strip that will mature on the fixed-share stock purchase date with a principal amount of $1,000, which we refer to as the “pledged treasury strip” and

(c)

an ownership interest in a portfolio of zero-coupon U.S. treasury strips that will mature on a quarterly basis through the fixed-share stock purchase date, each with a principal amount of $1,000, which we refer to as the “treasury portfolio”; and

(2)

a variable-share repurchase contract under which

•

you will agree to deliver to us shares of our common stock on February 15, 2006, which we refer to as the “variable-share stock purchase date,” the number of which will be determined based on the average trading price of our common stock for a period preceding that date, calculated in the manner described below, and

•

we will pay you quarterly contract payments at the rate of 4.00% of the stated amount of $200 per year as specified below.

---

Table of Contents

(1)

quarterly contract payments on the fixed-share purchase contract at the annual rate of 0.75% of the stated amount of $200 per fixed-share purchase contract, including on the fixed-share stock purchase date; and

(2)

quarterly payments of $1.00 on the treasury portfolio payable by the United States Government (equivalent to 2.00% per annum of the stated amount of $200 per PACES).

---

Table of Contents

---

Table of Contents

•

if the applicable market value, determined as described below, of our common stock is equal to or greater than $48.71, the variable-share settlement rate will be 0.9444 shares of our common stock;

•

if the applicable market value of our common stock is less than $48.71 but greater than $39.60, the settlement rate will be a number of shares of our common stock equal to (i) $200 divided by $39.60 minus (ii) $200 divided by the applicable market value of our common stock; or

•

if the applicable market value of our common stock is less than or equal to $39.60, the settlement rate will be zero shares of our common stock.

---

Table of Contents

•

the related PACES ceases to exist, the pledged treasury strip pledged as collateral to secure your obligation under the fixed-share purchase contract will be transferred to you free and clear of our security interest, any remaining treasury strips in your treasury portfolio that are in integral multiples of $1,000 principal amount will be distributed to you and any remaining treasury strips in your treasury portfolio not in integral multiples of $1,000 principal amount will be retained by the purchase contract agent for your benefit and the proceeds of those strips will be distributed to you as they mature;

•

if you held PACES as a component of SPACES, since the PACES are no longer available to secure your obligation to deliver to us shares of our common stock under the related variable-share repurchase contract, you must replace that collateral by pledging one share of our common stock per variable-share repurchase contract; and

•

your right to receive future contract payments and any deferred contract payments under the fixed-share purchase contract will terminate.

•

if the variable-share repurchase contract is secured by pledged common stock, such shares will be applied to satisfy your delivery obligation and any excess shares will be released to you free and clear of our security interest, or

•

if the variable-share repurchase contract is secured by the related PACES, you must deliver to us such number of shares of our common stock as specified above and the PACES will then be released to you free and clear of our security interest.

---

Table of Contents

•

if you own a SPACES, you will be treated as separately owning the underlying fixed-share purchase contract, variable-share repurchase contract, ownership interest in the pledged treasury strip and ownership interest in the treasury portfolio;

•

if you own a separate PACES, you will be treated as separately owning the underlying fixed-share purchase contract, ownership interest in the pledged treasury strip and ownership interest in the treasury portfolio; and

•

if you own a separate COVERS, you will be treated as separately owning the underlying variable-share repurchase contract and the pledged common stock.

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

•

the failure to achieve the cost reductions and economies of scale that we expect to achieve in the integration of the Acquired Business and the loss of clients of the Acquired Business, including DeAM, may affect our ability to achieve the expected financial results from the acquisition of the Acquired Business;

•

the extent of increases or decreases in cross-border investments made by clients or future clients may affect our revenues;

•

changes in the savings rate of individuals that are invested in mutual funds and other collective funds or in defined contribution plans may affect our revenues;

•

fluctuations in worldwide securities market valuations may affect our revenues;

•

changes in markets served, including the growth rate of collective funds worldwide, the pace of debt issuance, outsourcing decisions, and mergers, acquisitions and consolidations among clients and competitors may affect our revenues;

•

global and regional economic factors and changes or potential changes in laws and regulations affecting our business, including volatile currencies, pace of inflation and changes in monetary policy, and social and political instability, could affect our results of operations;

•

legislation may cause changes in the competitive environment in which we operate, which could include, among other things, broadening the scope of activities engaged in by significant competitors, facilitating consolidation of competitors into stronger entities or attracting large and well-capitalized new competitors into our traditional businesses, which may affect our future results;

---

Table of Contents

•

changes in accounting principles generally accepted in the United States and applicable to us, while not having an economic impact on our business, could have a material impact on our reported results of operations and the attainment of the current measures of our financial goals;

•

any occurrence which may limit our access to the funds markets, such as a decline in the confidence of debt purchasers, depositors or counterparties in the funds markets in general or with us in particular, or a downgrade of our debt rating, may affect our future results;

•

failure to meet minimum capital requirements and the status of “well capitalized” under the regulatory framework applicable to us could adversely affect our business;

•

market interest rate levels, the shape of the yield curve and the direction of interest rate changes affect our net interest revenue and securities lending revenue;

•

the degree of volatility in foreign exchange rates can affect the amount of our foreign exchange trading revenue;

•

the pace of pension reform and resulting programs, including public and private pension schemes, may affect the pace of our revenue growth;

•

future prices that we are able to obtain for our products may increase or decrease from current levels depending upon demand for our products, our competitors’ activities and the introduction of new products into the marketplace;

•

the pace at which we attract new clients and at which existing and new clients use additional services and assign additional assets to us for management or custody will affect our future results;

•

changes in business mix, including the mix of U.S. and non-U.S. business, may affect our future results;

•

unforeseen events, including terrorist or military actions and resulting political and social turmoil, could cause damage to our physical facilities or cause delays or disruptions to our operational functions, including information processing and financial market settlement functions;

•

technological change and our ability to develop and market new and innovative services may be more difficult or expensive than anticipated;

•

our ability to effectively assimilate services, technologies, key personnel or businesses of acquired companies may affect our future results; and

•

changes may occur in securities markets which may affect our revenues.

---

Table of Contents

---

Table of Contents

---

Table of Contents

•

the actual consolidated capitalization of State Street and our subsidiaries; and

•

the actual consolidated capitalization of State Street and our subsidiaries as adjusted to give effect to this offering of SPACES (assuming no exercise of the underwriters’ over-allotment option), as if such transaction had occurred on December 31, 2002; and

•

the actual consolidated capitalization of State Street and our subsidiaries as adjusted to give effect to (1) this offering of SPACES (assuming no exercise of the underwriters’ over-allotment option), (2) the anticipated issuance of $300,000,000 aggregate liquidation amount of capital securities in the concurrent capital securities offering (assuming no exercise of the underwriters’ over-allotment option) and (3) the anticipated issuance of 6,220,000 shares of common stock in the concurrent common stock offering (assuming no exercise of the underwriters’ over-allotment option), as if such transactions had occurred on December 31, 2002.

(1)

The decrease in surplus represents the present value of the estimated contract fees payable in respect of SPACES, at an assumed discount rate of 3.5%, and the issuance costs less uninvested proceeds from this offering of SPACES.

(2)

The increase in surplus represents the allocation of the remaining net proceeds of our concurrent common stock offering, after the allocation to common stock at par value.

---

Table of Contents

(1)

Operating Results exclude the results of certain significant transactions not representative of ongoing operations.

(2)

Operating Results include fully taxable equivalent adjustments that increase net interest revenue to reflect investment yield on tax-free investments on an equivalent basis with taxable investments.

(3)

Operating Results exclude goodwill amortization expense from operating expenses in 2001 and prior years, to be consistent with GAAP accounting required beginning in 2002.

---

Table of Contents

---

(a)

Share data restated for 2-for-1 stock split in 2001.

(1)

Operating Results include a fully taxable-equivalent adjustment. This is a method of presentation in which interest income on tax-exempt securities is adjusted to present the earnings performance on a basis equivalent to interest earned on fully-taxable securities with a corresponding charge to income tax expense. The adjustment is computed using a federal income tax rate of 35%, adjusted for applicable state income taxes, net of the related federal tax benefit.

(2)

Operating Results exclude the gain on the sale of the commercial banking business and a one-time charge on sales of securities related to the repositioning of the investment portfolio. This gain was $282 million after deductions for exit and other associated costs of $68 million. The one-time charge for the portfolio repositioning was $57 million. The after-tax gain of these combined items was $130 million after tax or $.40 in diluted earnings per share. These transactions were recorded in October and December 1999.

(3)

Operating Results exclude the write-off of our total investment in Bridge Information Systems, Inc. of $50 million. The after-tax loss was $33 million, or $.10 in diluted earnings per share. This write-off was recorded in March 2001.

(4)

Operating Results exclude the gain on the sale of our corporate trust business. This gain was $495 million after deductions for exit and other associated costs of $155 million. The after-tax gain was $296 million, or $.90 in diluted earnings per share. This gain was recorded in December 2002.

(5)

Operating Results for each of the five years ended December 31, 2001 exclude goodwill amortization expense, as follows: 2001—expense of $38 million, equal to $26 million, or $.08 per diluted share after tax; 2000—expense of $17 million, equal to $11 million, or $.04 per diluted share after tax; 1999—expense of $15 million, equal to $10 million, or $.03 per diluted share after tax; 1998—expense of $12 million, equal to $8 million, or $.03 per diluted share after tax; and 1997—expense of $8 million, equal to $6 million, or $.02 per diluted share after tax.

---

Table of Contents

(1)

a PACES, which will have a stated amount of $200 and will consist of and represent

(a)

a fixed-share purchase contract pursuant to which

•

you will agree to purchase, and we will agree to sell, for $200, 5.0505 shares of our common stock on November 15, 2005, which we refer to as the fixed-share stock purchase date, and

•

we will pay you quarterly contract payments at the annual rate of 0.75% of the $200 stated amount, subject to our right to defer such payments as specified below,

(b)

an ownership interest in a zero-coupon U.S. treasury strip that will mature on the fixed-share stock purchase date with a principal amount of $1,000, which we refer to as the pledged treasury strip, and

(c)

an ownership interest in a portfolio of zero-coupon U.S. treasury strips that will mature on a quarterly basis through the fixed-share stock purchase date, each with a principal amount of $1,000, which we refer to as the treasury portfolio; and

(2)

a variable-share repurchase contract pursuant to which

•

you will agree to deliver to us shares of our common stock on February 15, 2006, which we refer to as the variable-share stock purchase date, the number of which will be determined by the variable-share settlement rate described below based on the average trading price of our common stock for a period preceding the variable-share stock purchase date, and

•

we will pay you quarterly contract payments at the annual rate of 4.00% of the $200 stated amount, subject to our right to defer such payments as specified below.

---

Table of Contents

•

irrevocably agreed to be bound by the terms of the purchase contract agreement, the pledge agreement and the applicable contract or contracts for so long as you remain a beneficial owner of any of such securities; and

•

appointed the purchase contract agent under the purchase contract agreement as your agent and attorney-in-fact to enter into and perform the applicable contract or contracts and pledge agreement on your behalf and in your name.

•

a purchase contract agreement with Bank One Trust Company, N.A., as purchase contract agent, governing the appointment of the purchase contract agent as the agent and attorney-in-fact for the holders of the securities, the transfer, exchange or replacement of certificates representing the securities and certain other matters relating to the securities; and

•

a pledge agreement with Bank One Trust Company, N.A., as collateral agent, custodial agent and securities intermediary, creating a pledge and security interest for our benefit to secure the obligations of holders of securities.

---

Table of Contents

•

quarterly contract payments on the fixed-share purchase contract payable by us at the annual rate of 0.75% of the stated amount of $200, including on the fixed-share stock purchase date, and

•

quarterly payments of $1.00 on the treasury portfolio payable by the United States Government (equivalent to an annual rate of 2.00% of the stated amount of $200 per PACES).

---

Table of Contents

•

every obligation of such person for money borrowed;

•

every obligation of such person evidenced by bonds, debentures, notes or other similar instruments, including obligations incurred in connection with the acquisition of property, assets or businesses;

•

every reimbursement obligation of such person with respect to letters of credit, bankers’ acceptances or similar facilities issued for the account of such person;

•

every obligation of such person issued or assumed as the deferred purchase price of property or services other than trade accounts payable or accrued liabilities arising in the ordinary course of business;

•

every capital lease obligation of such person;

•

every obligation of such person for claims in respect of derivative products such as interest and foreign exchange rate contracts, commodity forward contracts and similar arrangements; and

•

every obligation of the type referred to above of another person and all dividends of another person the payment of which, in either case, such person has guaranteed or is responsible or liable for, directly or indirectly, as obligor or otherwise.

•

any debt of ours which when incurred and without respect to any election under Section 1111(b) of the United States Bankruptcy Code, as amended, was without recourse to us;

•

any debt of ours to any of our subsidiaries, other than subsidiaries that are banks or bank holding companies as defined in the Bank Holding Company Act of 1956, as amended;

•

any debt to any of our employees;

---

Table of Contents

•

any debt which by its terms is subordinated to trade accounts payable or accrued liabilities arising in the ordinary course of business to the extent that payments made to the holders of such debt by the holders of the securities as a result of the subordination provisions of the contracts would be greater than such payments otherwise would have been as a result of any obligation of such holders of such debt to pay amounts over to the obligees on such trade accounts payable or accrued liabilities arising in the ordinary course of business as a result of subordination provisions to which such debt is subject;

•

any debt securities issued pursuant to our junior subordinated indenture described in the accompanying prospectus.

•

any subsidiary that is not a bank or bank holding company as defined in the Bank Holding Company Act of 1956, as amended; or

•

any of our employees,

•

except in the ordinary course of business, we will not incur debt for borrowed money from any subsidiary that is not a bank or bank holding company as defined in the Bank Holding Company Act of 1956, as amended, unless, under the terms of such debt, we defer payments of principal, interest and premium, if any, in respect of such debt to the same extent that we defer contract payments on the securities; and

•

except in the ordinary course of business, we will not incur debt for borrowed money from any of our employees, unless, under the terms of such debt, we defer payments of principal, interest and premium, if any, in respect of such debt to the same extent that we defer contract payments on the securities.

---

Table of Contents

•

repurchases, redemptions or other acquisitions of shares of our capital stock in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of any one or more employees, officers, directors or consultants, in connection with a dividend

---

Table of Contents

reinvestment or stockholder stock purchase plan or in connection with the issuance of our capital stock, or securities convertible into or exercisable for such capital stock, as consideration in an acquisition transaction entered into prior to the deferral of contract payments;

•

as a result of an exchange or conversion of any class or series of our capital stock for any capital stock of our subsidiaries or for any class or series of our capital stock, or of any class or series of our indebtedness for any class or series of our capital stock;

•

the purchase of fractional interests in shares of our capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged;

•

any declaration of a dividend in connection with any rights plan, or the issuance of rights, stock or other property under any rights plan, or the redemption or repurchase of rights pursuant thereto; or

•

any dividend in the form of stock, warrants, options or other rights where the dividend stock or stock issuable upon exercise of such warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks equally with or junior to such stock.

•

If the “applicable market value” of our common stock, which is the average of the closing price per share of our common stock on each of the 20 consecutive trading days ending on the third trading day immediately preceding the variable-share stock purchase date, is equal to or greater than the threshold appreciation price of $48.71, which is 23.0% above $39.60, the settlement rate will be 0.9444 shares of our common stock per variable-share repurchase contract. If the market price for our common stock increases to an amount that is greater than $48.71 on the variable-share stock purchase date, the aggregate market value of the shares of common stock issued upon settlement of the fixed-share purchase contract less the shares delivered to us upon settlement of the related variable-share repurchase contract, assuming that this market value is the same as the applicable market value of our common stock, will be greater than $200, and if the market price equals $48.71, the aggregate market value of those shares, assuming that this market value is the same as the applicable market value of our common stock, will equal $200.

---

Table of Contents

•

If the applicable market value of our common stock is less than $48.71 but greater than $39.60, the settlement rate will be equal to (i) $200 divided by $39.60 minus (ii) $200 divided by the applicable market value of our common stock. If the market price for our common stock increases but that market price is less than $48.71 on the variable-share stock purchase date, the aggregate market value of the shares of common stock issued upon settlement of the fixed-share purchase contract less the shares delivered to us upon settlement of the related variable-share repurchase contract, assuming that this market value is the same as the applicable market value of our common stock, will equal $200.

•

If the applicable market value of our common stock is less than or equal to $39.60, the settlement rate will be zero shares of our common stock per variable-share repurchase contract. If the market price for our common stock decreases to an amount that is less than $39.60 on the variable-share stock purchase date, the aggregate market value of the shares of common stock issued upon settlement of the fixed-share purchase contract, assuming that this market value is the same as the applicable market value of our common stock, will be less than $200, and if the market price equals $39.60, the aggregate market value of those shares, assuming that this market value is the same as the applicable market value of our common stock, will equal $200.

---

Table of Contents

•

our stock price, calculated as the average closing price per share of our common stock during the 20 consecutive trading day period commencing the third trading day following the date of our notice to the purchase contract agent;

•

our dividend yield, calculated as (1) our last reported regular quarterly dividend multiplied by four, divided by (2) the average closing price per share of our common stock during the 20 consecutive trading day period commencing the third trading day following the date of our notice to the purchase contract agent;

•

the remaining maturity of the variable-share repurchase contract as of the last trading day in the 20 consecutive trading day period used to determine our stock price;

•

the “risk-free rate,” defined as the yield to maturity on the treasury security maturing on February 15, 2006 (CUSIP No. 912827W81), as of the last trading day in the 20 consecutive trading day period used to determine our stock price; and

•

the annual volatility of our stock, calculated as the annualized unbiased standard deviation of the logarithmic daily returns on our common stock over the 260 consecutive trading day period ending on the trading day immediately preceding the date of our initial notice to the purchase contract agent.

•

in the case of fixed-share purchase contracts, you have settled the fixed-share purchase contract prior to the fixed-share stock purchase date through the delivery of cash to the purchase contract agent in the manner described in “—Early Settlement of the Fixed-Share Purchase Contracts” below;

•

in the case of variable-share repurchase contracts, you have settled the variable-share repurchase contract prior to the variable-share stock purchase date in the manner described in “—Early Settlement of the Variable-Share Repurchase Contracts” below;

•

we are involved in a merger, acquisition or consolidation prior to the fixed-share stock purchase date or the variable-share stock purchase date, as applicable, in which at least 30% of the consideration for our common stock consists of cash or cash equivalents and you have settled the contracts through a merger early settlement as described in “—Early Settlement Upon Cash Merger” below; or

•

an event described under “—Termination of Contracts” below has occurred.

---

Table of Contents

•

In the case of the fixed-share purchase contracts, the principal payments on the pledged treasury strips, which are also due on the fixed-share stock purchase date, automatically will be applied to satisfy in full your obligation to purchase our common stock under the fixed-share purchase contracts. If you hold PACES as a component of SPACES, upon such satisfaction, a portion of the shares of our common stock which you are then entitled to receive automatically will be pledged to the collateral agent for our benefit to secure your continuing obligation under the related variable-share repurchase contracts. The number of shares pledged will equal one share per variable-share repurchase contract. The shares of our common stock not pledged will be delivered to you or your designee upon presentation and surrender of the certificate evidencing the SPACES, if the SPACES are held in certificated form, and payment by you of any transfer or similar taxes payable in connection with the issuance of our common stock to any person other than you. If the SPACES were held in certificated form, and the circumstances so require, you or your designee will receive a new certificate or certificates evidencing the remaining separate COVERS.

•

In the case of the variable-share repurchase contracts, the pledged common stock automatically will be applied to satisfy in full your obligation to deliver to us shares of our common stock under the variable-share repurchase contracts. Any remaining shares will then be transferred to you or your designee upon presentation and surrender of the certificate or certificates evidencing the separate COVERS, if the separate COVERS are held in certificated form, and payment by you of any transfer or similar taxes payable in connection with the transfer of our common stock to any person other than you.

---

Table of Contents

•

for each fixed-share purchase contract being settled, the holder will be entitled to receive a number of shares of our common stock equal to the fixed-share early settlement rate as described below, subject to adjustment under the circumstances described under “—Anti-dilution Adjustments” below;

•

if the PACES were held as components of SPACES, from the shares of our common stock that the holder is entitled to receive as described above, one share per variable-share repurchase contract automatically will be pledged to the collateral agent for our benefit to secure the holder’s continuing obligations under the related variable-share repurchase contracts, subject to adjustment under the circumstances described under “—Anti-dilution Adjustments” below;

•

the holder’s right to receive future contract payments and any deferred contract payments on the fixed-share purchase contracts being settled will terminate; and

•

the collateral agent will release from our security interest the pledged treasury strips pledged as collateral for the fixed-share purchase contracts being settled and will deliver those pledged treasury strips to the purchase contract agent. The purchase contract agent will in turn deliver the pledged treasury strips to the holder. The purchase contract agent will distribute to you any remaining treasury strips in the related treasury portfolio that are in integral multiples of $1,000 principal amount, but will retain the remainder of such treasury strips and distribute to you the proceeds of such strips as they mature. If you elect to early settle the fixed-share purchase contracts in other than integral multiples of 1,000 related PACES, the purchase contract agent will be required to retain all or a portion of the remaining treasury strips in the related treasury portfolio and distribute the proceeds to you as such strips mature.

---

Table of Contents

---

Table of Contents

---

Table of Contents

(1)

the payment of a dividend or other distribution on our common stock in common stock;

(2)

the issuance to all holders of our common stock of rights or warrants, other than pursuant to any dividend reinvestment, share purchase or similar plans, entitling them to subscribe for or purchase our common stock at less than the current market price (as defined below);

(3)

subdivisions, splits and combinations of our common stock;

(4)

distributions to all holders of our common stock of evidences of our indebtedness, shares of capital stock, securities, cash or other assets (excluding any dividend or distribution covered by clause (1) or (2) above and any dividend or distribution paid exclusively in cash or in connection with a “spin-off” as described below);

(5)

distributions (other than regular quarterly cash dividends) consisting exclusively of cash to all holders of our common stock in an aggregate amount that, when combined with (a) other all-cash distributions (other than regular quarterly cash dividends) made within the preceding 12 months and (b) the cash and the fair market value, as of the date of expiration of the tender or exchange offer referred to below, of the consideration payable in respect of any tender or exchange offer (other than consideration payable in respect of any odd-lot tender offer) by us or a subsidiary of ours for our common stock concluded within the preceding 12 months, exceeds 15% of our aggregate market capitalization (such aggregate market capitalization being the product of the current market price of our common stock multiplied by the number of shares of common stock then outstanding) on the date fixed for the determination of stockholders entitled to receive such distribution; and

(6)

the successful completion of a tender or exchange offer made by us or any subsidiary of ours for our common stock that involves an aggregate consideration that, when combined with (a) any cash and the fair market value of other consideration payable in respect of any other tender or exchange offer (other than consideration payable in respect of any odd-lot tender offer) by us or a subsidiary of ours for our common stock concluded within the preceding 12 months and (b) the aggregate amount of any all-cash distributions (other than regular quarterly cash dividends) to all holders of our common stock made within the preceding 12 months, exceeds 15% of our aggregate market capitalization on the date of expiration of such tender or exchange offer.

---

Table of Contents

•

the fixed-share settlement rate or the variable-share settlement rate, as applicable, by

•

a fraction, the numerator of which is the current market price of our common stock plus the fair market value, determined as described below, of those shares of capital stock or similar equity interests so distributed applicable to one share of common stock and the denominator of which is the current market price of our common stock.

•

the tenth trading day following the effective date of the spin-off and

•

the date of the securities being offered in the initial public offering of the spin-off, if that initial public offering is effected simultaneously with the spin-off.

---

Table of Contents

---

Table of Contents

•

to substitute a specified number of shares of our common stock for the related pledged PACES (whether or not in connection with the settlement of the fixed-share purchase contract);

•

to substitute a specified number of PACES for the related pledged common stock; or

•

upon the termination or early settlement of the variable-share repurchase contract.

---

Table of Contents

---

Table of Contents

•

to evidence the succession of another person to our obligations;

•

to add to the covenants for the benefit of holders or to surrender any of our rights or powers under those agreements so long as such covenants or such surrender do not adversely affect the validity, perfection or priority of the security interests granted or created under the pledge agreement;

•

to evidence and provide for the acceptance of appointment of a successor purchase contract agent or a successor collateral agent, custodial agent or securities intermediary; or

•

to cure any ambiguity, to correct or supplement any provisions that may be inconsistent, or to make any other provisions with respect to such matters or questions, provided that such action shall not adversely affect the interest of the holders.

•

change any payment date;

•

change the amount or type of collateral required to be pledged to secure obligations under the SPACES, separate PACES or the separate COVERS, impair the right of the holder of any SPACES, separate PACES or separate COVERS to receive distributions on the collateral

---

Table of Contents

underlying the SPACES, separate PACES or the separate COVERS or otherwise materially adversely affect the holder’s rights in or to the collateral;

•

reduce any contract payment or change the place or currency of that payment or increase any amounts payable by holders in respect of the SPACES or separate PACES or decrease any other amounts receivable by holders in respect of the SPACES, separate PACES or the separate COVERS;

•

impair the right to institute suit for the enforcement of any contract or the right to receive any contract payments;

•

reduce the number of shares of common stock purchasable or increase the number of shares deliverable under any contract, increase the price to purchase shares of common stock on settlement of any contract, change the applicable stock purchase date or otherwise materially adversely affect the holder’s rights under any contract; or

•

reduce the above stated percentage of outstanding contracts the consent of whose holders is required for the modification or amendment of the provisions of the purchase contract agreement, the pledge agreement or the contracts.

•

we are the continuing entity or the successor entity is organized under the laws of the United States of America or any state or the District of Columbia;

•

the successor entity expressly assumes our obligations under the purchase contract agreement, the pledge agreement and the contracts; and

•

we or the successor entity is not, immediately after such merger, consolidation, sale, assignment, transfer, lease or conveyance, in default in the performance of any of our or its obligations under the purchase contract agreement, the pledge agreement or the contracts.

---

Table of Contents

---

Table of Contents

---

Table of Contents

•

this offering;

•

the retention of the collateral agent;

•

the enforcement by the purchase contract agent of the rights of the holders of the securities; and

•

with certain exceptions, stock transfer and similar taxes attributable to the initial issuance and delivery of our common stock upon settlement of the fixed-share purchase contracts.

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

•

if you own a SPACES, you will be treated as separately owning the underlying fixed-share purchase contract, variable-share repurchase contract, fractional ownership interest in the pledged treasury strip and fractional ownership interest in the treasury portfolio;

•

if you own a separate PACES, you will be treated as separately owning the underlying fixed-share purchase contract, fractional ownership interest in the pledged treasury strip and fractional ownership interest in the treasury portfolio; and

•

if you own a separate COVERS, you will be treated as separately owning the underlying variable-share repurchase contract and the pledged common stock.

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

•

sell capital securities representing undivided beneficial interests in the trust to the public;

•

sell common securities representing undivided beneficial interests in the trust to State Street Corporation;

•

use the proceeds from these sales to buy an equal principal amount of junior subordinated debentures of State Street Corporation; and

•

distribute the cash payments it receives on the junior subordinated debentures it owns to the holders of the capital and common securities.

---

---

Table of Contents

•

this prospectus, which provides general information, some of which may not apply to your securities; and

•

the accompanying prospectus supplement, which describes the terms of the securities.

•

the prospectus supplement; and

•

this prospectus.

---

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

•

future revenue may increase or decrease depending upon the extent of increases or decreases in cross-border investments made by clients or future clients;

•

changes in the savings rate of individuals that are invested in mutual funds and other collective funds or in defined contribution plans may affect our revenues;

•

fluctuations in worldwide securities market valuations may affect our revenues;

•

changes in markets served, including the growth rate of collective funds worldwide, the pace of debt issuance, outsourcing decisions, and mergers, acquisitions and consolidations among clients and competitors may affect our revenues;

•

global and regional economic factors and changes or potential changes in laws and regulations affecting our business, including volatile currencies, pace of inflation and changes in monetary policy, and social and political instability, could affect results of operations;

•

legislation may cause changes in the competitive environment in which we operate, which could include, among other things, broadening the scope of activities engaged in by significant competitors, facilitating consolidation of competitors into stronger entities or attracting large and well-capitalized new competitors into our traditional businesses, which may affect future results;

•

changes in accounting principles generally accepted in the United States and applicable to us, while not having an economic impact on our business, could have a material impact on our reported results of operations and the attainment of the current measures of our financial goals;

•

any occurrence which may limit our access to the funds markets, such as a decline in the confidence of debt purchasers, depositors or counterparties in the funds markets in general or with us in particular, or a downgrade of our debt rating, may affect our future results;

•

failure to meet minimum capital requirements and the status of “well capitalized” under the regulatory framework applicable to us could adversely affect our business;

•

market interest rate levels, the shape of the yield curve and the direction of interest rate changes affect net interest revenue and securities lending revenue;

---

Table of Contents

•

the degree of volatility in foreign exchange rates can affect the amount of foreign exchange trading revenue;

•

the pace of pension reform and resulting programs, including public and private pension schemes, may affect the pace of revenue growth;

•

future prices that we are able to obtain for our products may increase or decrease from current levels depending upon demand for our products, our competitors’ activities and the introduction of new products into the marketplace;

•

the pace at which we attract new clients and at which existing and new clients use additional services and assign additional assets to us for management or custody will affect future results;

•

changes in business mix, including the mix of U.S. and non-U.S. business, may affect future results;

•

unforeseen events, including terrorist or military actions and resulting political and social turmoil, could cause damage to our physical facilities or cause delays or disruptions to operational functions, including information processing and financial market settlement functions;

•

technological change and our ability to develop and market new and innovative services may be more difficult or expensive than anticipated;

•

our ability to effectively assimilate services, technologies, key personnel or businesses of acquired companies may affect future results; and

•

changes may occur in securities markets which may affect revenue.

---

Table of Contents

---

Table of Contents

•

the title and series designation;

•

the aggregate principal amount and the limit, if any, on the aggregate principal amount or initial public offering price of the debt securities which may be issued under the applicable indenture;

•

any fixed or variable interest rate or rates per annum;

•

the date from which any interest shall accrue;

•

any interest payment dates;

•

whether the debt securities are senior or subordinated;

•

the stated maturity date;

•

whether the debt securities are to be issued in global form;

•

any sinking fund requirements;

•

any provisions for redemption, the redemption price and any remarketing arrangements;

•

the minimum denominations;

•

whether the debt securities are denominated or payable in United States dollars or a foreign currency or units of two or more foreign currencies;

•

the place or places where payments or deliveries on the debt securities shall be made and the debt securities may be presented for registration of transfer or exchange;

•

whether any of the debt securities will be subject to defeasance in advance of the date for redemption or the stated maturity date;

•

if other than the principal amount, the portion of the principal amount of the debt securities payable upon acceleration of the maturity of the debt securities;

•

any index used to determine the amount of payment of principal of, and any premium and interest on, the debt securities;

•

the person to whom any interest on the debt securities of the series shall be payable if other than the registered holder thereof;

•

the manner in which the amount that shall be deemed to be the principal amount of the debt securities on or prior to the maturity date shall be determined;

•

any additional or different events of default that apply to any debt securities of the series and any change in the right of the trustee or the required holders of those debt securities to declare the principal thereof due and payable;

•

the terms, if any, pursuant to which debt securities may be converted into or exchanged for shares of our capital stock or other of our securities;

•

any additional or different covenants that apply to any debt securities of the series; and

•

any other terms of the debt securities that are not inconsistent with the provisions of the applicable indenture.

---

Table of Contents

•

to add to our covenants for the benefit of the holders of all or any series of debt securities or to surrender any right or power conferred upon us in the indentures; and

•

to add any additional events of default, in the case of the senior indenture, and events of default or defaults, in the case of the subordinated indenture.

---

Table of Contents

•

default in the payment of any principal or premium when due;

•

default in the payment of any interest when due, which continues for 30 days;

•

default in the deposit of any sinking fund payment when due;

•

default in the performance of any other obligation contained in the senior indenture for the benefit of debt securities of that series, which continues for 60 days after written notice;

•

acceleration of other indebtedness of at least $20,000,000 of us or of State Street Bank, which is not annulled within 30 days after written notice;

•

specified events in bankruptcy, insolvency or reorganization; and

•

any other default or event of default provided with respect to debt securities of that series.

---

Table of Contents

•

in the payment of any amounts due and payable or deliverable under the debt securities of that series; or

•

in an obligation contained in, or a provision of, an indenture which cannot be modified under the terms of that indenture without the consent of each holder of each series of debt securities affected.

•

that holder previously gives to the trustee written notice of a continuing event of default with respect to debt securities of that series;

•

the holders of not less than 25% in aggregate principal amount or issue price of the outstanding debt securities of that series also shall have offered the trustee reasonable indemnity and made written request to the trustee to institute such proceeding as trustee;

•

the trustee shall not have received from the holders of a majority in principal amount or issue price of the outstanding debt securities of that series a direction inconsistent with such request; and

•

the trustee shall have failed to institute such proceeding within 60 days.

•

change the stated maturity date of the principal or any installment of principal or interest on, any debt security;

•

reduce the principal amount or the rate of interest on, or any premium payable upon the redemption of, any debt security;

•

reduce the amount of principal of an original issue discount security payable upon acceleration of its maturity;

•

change the place or currency of payment of principal of, or any premium or interest on, any debt security;

---

Table of Contents

•

impair the right to institute suit for the enforcement of any payment or delivery on or with respect to any debt security;

•

in the case of the subordinated indenture, modify the subordination provisions in a manner adverse to the holders of the subordinated debt securities;

•

reduce the percentage in principal amount of debt securities of any series, the consent of whose holders is required to modify or amend the indenture or to waive compliance with certain provisions of the indenture; or

•

reduce the percentage in principal amount of debt securities of any series, the consent of whose holders is required to waive any past default.

•

evidencing the succession of another person to State Street;

•

adding to the covenants of State Street for the benefit of the holders of all or any series of debt securities;

•

adding any additional events of default for the benefit of the holders of all or any series of debt securities;

•

adding to, changing or eliminating any of the provisions of the indentures, provided that any such addition, change or elimination shall not apply to any outstanding debt securities nor modify the rights of any holder of any such outstanding debt securities, or shall become effective only when there is no debt security outstanding of any series created prior to the execution of the supplemental indenture that is entitled to the benefit of such provision;

•

curing ambiguities, defects or inconsistencies without materially and adversely affecting the holders of the debt securities; and

•

evidencing and providing for the acceptance of appointment under the indentures by a successor trustee with respect to the debt securities of one or more series and adding to or changing any of the provisions of the indentures as shall be necessary to provide for or facilitate the administration of the trusts under the indentures by more than one trustee.

•

the resulting corporation, if other than us, is a corporation organized and existing under the laws of the United States of America or any U.S. state and assumes all of our obligations on the debt securities under the indentures;

•

we are not, or any successor corporation, as the case may be, is not, immediately after any consolidation or merger, in default under the indentures; and

•

certain other conditions are met.

---

Table of Contents

•

if such disposition or issuance is for fair market value as determined by our Board of Directors; and

•

if after giving effect to such disposition or issuance and any potential dilution, we and our wholly-owned subsidiaries will own directly not less than 80% of the voting stock of such principal constituent bank or any subsidiary which owns a principal constituent bank.

•

we shall have deposited irrevocably with the trustee as trust funds in trust, in each case, in an amount, in U.S. dollars or U.S. government obligations, which through the payment of interest, principal or premium, if any, in respect thereof in accordance with their terms, will provide an amount sufficient to pay the entire amount of the debt securities;

•

an opinion of independent counsel shall have been delivered to the trustee to the effect that the holders of the debt securities of such series will have no federal income tax consequences as a result of such deposit and termination;

---

Table of Contents

•

no event of default under the senior indenture or default under the subordinated indenture may exist or be caused by the defeasance; and

•

the defeasance shall not cause an event of default under any of our other agreements or instruments.

•

there is a default in any payment or delivery with respect to any senior indebtedness; or

•

there is an event of default with respect to any senior indebtedness which permits the holders of such senior indebtedness to accelerate the maturity of the senior indebtedness.

•

all of our “indebtedness” as defined below, except (A) subordinated debt securities issued under the subordinated indenture, (B) such indebtedness that is expressly stated to be junior in right of payment to the subordinated debt securities and (C) indebtedness that is expressly stated to rank equal with the subordinated debt securities; and

---

Table of Contents

•

any deferrals, renewals or extensions of any senior indebtedness.

•

for borrowed money; or

•

incurred in connection with the acquisition by us of assets other than in the ordinary course of business.

•

our obligations under direct credit substitutes;

•

our obligations, or any obligation directly or indirectly guaranteed by us, for purchased money or funds;

•

any of our deferred obligations, or any such obligations directly or indirectly guaranteed by us, incurred in connection with the acquisition by us of assets; and

•

all of our obligations to make payment pursuant to the terms of financial instruments, such as: (A) securities contracts and foreign currency exchange contracts; (B) derivative instruments, such as swap agreements, including interest rate and foreign exchange rate swap agreements, cap agreements, floor agreements, collar agreements, interest rate agreements, foreign exchange rate agreements, options, commodity futures contracts, commodity option contracts; and (C) similar financial instruments, other than obligations on account of senior indebtedness and obligations on account of indebtedness for money borrowed ranking equal with or subordinate to the subordinated debt securities, including our existing subordinated indebtedness.

---

Table of Contents

•

issuing the capital securities and common securities representing undivided beneficial interests in the assets of the trust;

•

investing the gross proceeds of the capital securities and the common securities (together, the trust securities) in junior subordinated debentures; and

•

engaging in only those activities necessary or incidental thereto.

---

Table of Contents

•

the title of the junior subordinated debentures;

•

any limit upon the aggregate principal amount of junior subordinated debentures;

•

the date or dates on which the principal of the junior subordinated debentures is payable or the method of determination thereof;

•

any fixed or variable interest rate or rates per annum;

•

any interest payment dates;

•

any provisions relating to the deferral of payment of any interest;

•

the place where the principal of and premium, if any, and interest on the junior subordinated debentures will be payable and where the junior subordinated debentures may be presented for registration of transfer or exchange;

---

Table of Contents

•

any provisions for redemption, the redemption price and any remarketing arrangements;

•

the minimum denominations;

•

whether the debt securities are denominated or payable in United States dollars or a foreign currency or units of two or more foreign currencies;

•

if other than the principal amount, the portion of the principal amount of the debt securities payable upon acceleration of the maturity of the debt securities;

•

any index used to determine the amount of payment of principal of, and any premium and interest on, the debt securities;

•

any additional or different events of default that apply to any debt securities of the series and any change in the right of the trustee or the required holders of those debt securities to declare the principal thereof due and payable;

•

any additional or different covenants that apply to any debt securities of the series;

•

any additions or changes to the junior subordinated indenture with respect to such junior subordinated debentures necessary to permit the issuance of the junior subordinated debentures in bearer form, registrable or not registrable as to principal, and with or without interest coupons;

•

the terms and conditions relating to the issuance of a temporary global security representing all of the junior subordinated debentures and the exchange of such temporary global security for definitive junior subordinated debentures;

•

whether the junior subordinated debentures will be issued in whole or in part in the form of one or more global securities and the depositary for any such global securities;

•

the appointment of any paying agent or agents;

•

the terms and conditions of any obligation or right of State Street or a holder to convert or exchange the junior subordinated debentures into capital securities; and

•

any other terms of the debt securities that are not inconsistent with the provisions of the applicable indenture.

---

Table of Contents

•

issue, register the transfer of, or exchange, junior subordinated debentures of any series during a period beginning at the opening of business 15 days before the day of selection for redemption and ending at the close of business on the day of mailing of notice of redemption; or

•

transfer or exchange any junior subordinated debentures so selected for redemption, except, in the case of any junior subordinated debentures being redeemed in part, any portion thereof not to be redeemed.

---

Table of Contents

---

Table of Contents

•

there shall have occurred and be continuing an event of default with respect to the junior subordinated debentures of which we have actual knowledge and which we have not taken reasonable steps to cure;

•

we shall be in default relating to our payment of any obligations under the guarantee; or

•

we shall have given notice of our election to defer payments of interest on the junior subordinated debentures by extending the interest payment period and such period, or any extension of such period, shall be continuing;

•

we shall not declare or pay any dividends or distributions on, or redeem, purchase acquire or make a liquidation payment with respect to, any shares of our capital stock, other than:

(1)

repurchases, redemptions or other acquisitions of shares of our capital stock in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of any one or more employees, officers, directors or consultants, in connection with a dividend reinvestment or stockholder stock purchase plan or in connection with the issuance of our capital stock, or securities convertible into or exercisable for such capital

---

Table of Contents

stock, as consideration in an acquisition transaction entered into prior to the applicable extension period;

(2)

as a result of an exchange or conversion of any class or series of our capital stock for any capital stock of our subsidiaries or for any class or series of our capital stock, or of any class or series of our indebtedness for any class or series of our capital stock;

(3)

the purchase of fractional interests in shares of our capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged;

(4)

any declaration of a dividend in connection with any rights plan, or the issuance of rights, stock or other property under any rights plan, or the redemption or repurchase of rights pursuant thereto; or

(5)

any dividend in the form of stock, warrants, options or other rights where the dividend stock or stock issuable upon exercise of such warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks equally with or junior to such stock; and

•

we shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by us that rank equally in all respects with or junior to the junior subordinated debentures of such series.

•

the successor entity is a corporation, partnership or trust organized in the United States and expressly assumes our obligations under the junior subordinated indenture;

•

after giving effect thereto, no event of default and no event which, after notice or lapse of time, or both, would become an event of default, shall have occurred and be continuing under the junior subordinated indenture;

•

such transaction is permitted under the related trust agreement and guarantee; and

•

certain other conditions as prescribed by the junior subordinated indenture are met.

•

default in the payment of the principal of, or premium, if any, on, any junior subordinated debentures at maturity;

•

default for 30 days in the payment of any installment of interest on any junior subordinated debentures;

•

default for 90 days after written notice in the performance of any other covenant in respect of the junior subordinated debentures; and

•

specified events of bankruptcy, insolvency or reorganization of State Street.

---

Table of Contents

---

Table of Contents

•

evidencing the succession of another person to State Street;

•

conveying, transferring, assigning, mortgaging or pledging any property to or with the debenture trustee or surrendering any right or power conferred upon us in the junior subordinated indenture;

•

adding to the covenants of State Street for the benefit of other holders of all or any series of securities;

•

adding any additional events of default for the benefit of other holders of all or any series of securities;

•

changing or eliminating any of the provisions of the junior subordinated indenture, provided that any such change or elimination shall not apply to any outstanding securities, or shall become effective only when there is no security outstanding of any series created prior to the execution of the supplemental indenture that is entitled to the benefit of such provision;

•

curing ambiguities, defects or inconsistencies without materially and adversely affecting the holders of the junior subordinated debentures or the related capital securities;

•

evidencing and providing for the acceptance of appointment under the junior subordinated indenture by a successor trustee with respect to the securities of one or more series and adding to or changing any of the provisions of the indenture as shall be necessary to provide for or facilitate the administration of the trusts under the indenture by more than one trustee; and

•

qualifying the junior subordinated indenture under the Trust Indenture Act.

•

modify the payment terms of the junior subordinated debentures; or

•

reduce the percentage of holders of junior subordinated debentures necessary to modify or amend the indenture or waive compliance by us with any covenant or past default.

---

Table of Contents

(1)

all junior subordinated debentures not previously delivered to the debenture trustee for cancellation have become due and payable, will become due and payable at their stated maturity within one year, or are to be called for redemption within one year under arrangements satisfactory to the trustee for the giving of notice of redemption by the trustee in our name and at our expense;

(2)

we deposit with the debenture trustee, in trust, funds sufficient to pay all the principal of, and interest and premium, if any, on the junior subordinated debentures when such payments are due;

(3)

we have paid all other sums payable under the indenture by us; and

(4)

we have delivered to the debenture trustee an officers’ certificate and an opinion of counsel each stating that all conditions precedent in the indenture relating to the satisfaction and discharge of the indenture have been complied with,

---

Table of Contents

•

every obligation of such person for money borrowed;

•

every obligation of such person evidenced by bonds, debentures, notes or other similar instruments, including obligations incurred in connection with the acquisition of property, assets or businesses;

•

every reimbursement obligation of such person with respect to letters of credit, bankers’ acceptances or similar facilities issued for the account of such person;

•

every obligation of such person issued or assumed as the deferred purchase price of property or services other than trade accounts payable or accrued liabilities arising in the ordinary course of business;

•

every capital lease obligation of such person;

•

every obligation of such person for claims in respect of derivative products such as interest and foreign exchange rate contracts, commodity forward contracts and similar arrangements; and

•

every obligation of the type referred to above of another person and all dividends of another person the payment of which, in either case, such person has guaranteed or is responsible or liable for, directly or indirectly, as obligor or otherwise.

---

Table of Contents

•

any debt of State Street which when incurred and without respect to any election under Section 1111(b) of the United States Bankruptcy Code, as amended, was without recourse to State Street;

•

any debt of State Street to any of its subsidiaries;

•

any debt to any of our employees;

•

any debt which by its terms is subordinated to trade accounts payable or accrued liabilities arising in the ordinary course of business to the extent that payments made to the holders of such debt by the holders of the junior subordinated debentures as a result of the subordination provisions of the junior subordinated indenture would be greater than such payments otherwise would have been as a result of any obligation of such holders of such debt to pay amounts over to the obligees on such trade accounts payable or accrued liabilities arising in the ordinary course of business as a result of subordination provisions to which such debt is subject; and

•

any other debt securities issued pursuant to the junior subordinated indenture.

---

Table of Contents

(1)

to directly or indirectly maintain 100% ownership of the common securities of the trust unless a permitted successor succeeds to ownership of the common securities;

(2)

not to voluntarily terminate, wind up or liquidate any trust, except, if so specified in the applicable prospectus supplement and upon prior approval of the Federal Reserve (if required):

•

in connection with a distribution of corresponding junior subordinated debentures to the holders of the capital securities in exchange therefor upon liquidation of the trust, or

•

in connection with certain mergers, consolidations or amalgamations permitted by the related trust agreement, in either such case, if so specified in the applicable prospectus supplement upon prior approval of the Federal Reserve if then so required under applicable capital guidelines or policies; and

(3)

to use our reasonable efforts, consistent with the terms and provisions of the related trust agreement, to cause such trust to remain classified as a grantor trust and not as an association taxable as a corporation for United States federal income tax purposes.

---

Table of Contents

•

will be cumulative;

•

will accumulate from the date of original issuance; and

•

will be payable on such dates as specified in the applicable prospectus supplement.

---

Table of Contents

•

make any payment of principal of or interest or premium, if any, on or repay, repurchase or redeem any debt securities that rank equally in all respects with or junior in interest to the junior subordinated debentures of such series; or

•

declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any shares of our capital stock, other than:

•

repurchases, redemptions or other acquisitions of shares of our capital stock in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of any one or more employees, officers, directors or consultants, in connection with a dividend reinvestment or stockholder stock purchase plan or in connection with the issuance of our capital stock, or securities convertible into or exercisable for such capital stock, as consideration in an acquisition transaction entered into prior to the applicable extension period,

•

as a result of an exchange or conversion of any class or series of our capital stock or any capital stock of our subsidiaries, for any class or series of our capital stock, or of any class or series of our indebtedness for any class or series of our capital stock,

•

the purchase of fractional interests in shares of our capital stock pursuant to the conversion or exchange provisions of such capital stock or the securities being converted or exchanged,

•

any declaration of a dividend in connection with any rights plan, or the issuance of rights, stock or other property under any rights plan, or the redemption or repurchase of rights pursuant thereto, or

•

any dividend in the form of stock, warrants, options or other rights where the dividend stock or the stock issuable upon exercise of such warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks equally with or junior to such stock.

---

Table of Contents

•

on or after such date as may be specified in the applicable prospectus supplement, in whole at any time or in part from time to time; or

•

at any time, in whole, but not in part, upon the occurrence of a tax event, investment company event or capital treatment event, in any case subject to receipt of prior approval by the Federal Reserve (if required). Please see “Description of Junior Subordinated Debentures—Redemption.”

•

with respect to a redemption of any series of trust securities, trust securities of such series having a liquidation amount (as defined below) equal to that portion of the principal amount of corresponding junior subordinated debentures to be contemporaneously redeemed in accordance with the junior subordinated indenture, the proceeds of which will be used to pay the redemption price of such trust securities; and

•

with respect to a distribution of corresponding junior subordinated debentures to holders of any series of trust securities in exchange therefor in connection with a dissolution or liquidation of the related trust, corresponding junior subordinated debentures having a principal amount equal to the liquidation amount of the trust securities of the holder to whom such corresponding junior subordinated debentures would be distributed.

---

Table of Contents

•

such series of capital securities will no longer be deemed to be outstanding;

•

the depositary or its nominee, as the record holder of such series of capital securities, will receive a registered global certificate or certificates representing the corresponding junior subordinated debentures to be delivered upon such distribution; and

•

any certificates representing such series of capital securities not held by The Depository Trust Company (DTC) or its nominee will be deemed to represent the corresponding junior subordinated debentures having a principal amount equal to the stated liquidation amount of such series of capital securities, and bearing accrued and unpaid interest in an amount equal to the accrued and unpaid distributions on such series of capital securities until such certificates are presented to the administrative trustees or their agent for transfer or reissuance.

---

Table of Contents

•

all rights of the holders of such capital securities will cease, except the right of the holders of such capital securities to receive the redemption price and any distribution payable in respect of such capital securities on or prior to the redemption date, but without interest; and

•

such capital securities will cease to be outstanding.

---

Table of Contents

•

certain events of bankruptcy, dissolution or liquidation of State Street;

•

the distribution of a like amount of the corresponding junior subordinated debentures to the holders of its trust securities, if we, as depositor, have given written direction to the property trustee to dissolve such trust, subject to our having received prior approval of the Federal Reserve, if required;

•

redemption of all of the trust’s capital securities as described under “Redemption or Exchange—Mandatory Redemption;” and

•

the entry of an order for the dissolution of the trust by a court of competent jurisdiction.

---

Table of Contents

•

the occurrence of a debenture event of default with respect to the corresponding junior subordinated debentures held by such trust (please see “Description of the Junior Subordinated Debentures—Events of Default, Waiver and Notice”); or

•

the default by the property trustee in the payment of any distribution on any trust security of such trust when such becomes due and payable, and continuation of such default for a period of 30 days; or

•

the default by the property trustee in the payment of any redemption price of any trust security of such trust when such becomes due and payable; or

•

the default in the performance, or breach, in any material respect, of any covenant or warranty of the trustees in such trust agreement, other than a covenant or warranty of default in the performance of which or the breach of which is dealt with above, and continuation of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the defaulting trustee or trustees by the holders of at least 25% in aggregate liquidation amount of the outstanding capital securities of the applicable trust, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” under such trust agreement; or

•

the occurrence of certain events of bankruptcy or insolvency with respect to the property trustee and our failure to appoint a successor property trustee within 90 days.

---

Table of Contents

•

such successor entity either:

(1)

expressly assumes all of the obligations of such trust with respect to the capital securities, or

(2)

substitutes for the capital securities other securities having substantially the same terms as the capital securities, the successor securities, so long as the successor securities rank the same as the capital securities in priority with respect to distributions and payments upon liquidation, redemption and otherwise;

•

we expressly appoint a trustee of such successor entity possessing the same powers and duties as the property trustee as the holder of the corresponding junior subordinated debentures;

•

the successor securities are listed, or any successor securities will be listed upon notification of issuance, on any national securities exchange or other organization on which the capital securities are then listed, if any;

•

such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not cause the capital securities to be downgraded by any nationally recognized statistical rating organization;

•

such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the holders of the capital securities (including any successor securities) in any material respect;

---

Table of Contents

•

such successor entity has a purpose substantially identical to that of the trust;

•

prior to such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, we have received an opinion from independent counsel to the trust experienced in such matters to the effect that:

(1)

such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the holders of the capital securities (including any successor securities) in any material respect, and

(2)

following such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, neither the trust nor such successor entity will be required to register as an investment company under the Investment Company Act of 1940, as amended; and

•

we or any permitted successor or assignee owns all of the common securities of such successor entity and guarantees the obligations of such successor entity under the successor securities at least to the extent provided by the guarantee.

•

to cure any ambiguity, correct or supplement any provisions in such trust agreement that may be inconsistent with any other provision, or to make any other provisions with respect to matters or questions arising under such trust agreement, which may not be inconsistent with the other provisions of such trust agreement; or

•

to modify, eliminate or add to any provisions of such trust agreement to such extent as shall be necessary to ensure that the trust will be classified for United States federal income tax purposes as a grantor trust at all times that any trust securities are outstanding or to ensure that the trust will not be required to register as an “investment company” under the Investment Company Act.

•

the consent of holders representing not less than a majority (based upon liquidation amounts) of the outstanding trust securities; and

•

receipt by the trustees of an opinion of counsel to the effect that such amendment or the exercise of any power granted to the trustees in accordance with such amendment will not

---

Table of Contents

affect the trust’s status as a grantor trust for United States federal income tax purposes or the trust’s exemption from status as an “investment company” under the Investment Company Act.

•

change the amount or timing of any distribution required to be made in respect of the trust securities as of a specified dates; or

•

restrict the right of a holder of trust securities to institute suit for the enforcement of any such payment on or after such date.

•

direct the time, method and place of conducting any proceeding for any remedy available to the debenture trustee, or executing any trust or power conferred on the property trustee with respect to such corresponding junior subordinated debentures;

•

waive any past default that is waivable under the junior subordinated indenture;

•

exercise any right to rescind or annul a declaration that the principal of all the corresponding junior subordinated debentures is due and payable; or

•

consent to any amendment, modification or termination of the junior subordinated indenture or such corresponding junior subordinated debentures, where such consent shall be required.

---

Table of Contents

•

all debts and other obligations of each trust (other than with respect to the capital securities);

•

all costs and expenses of each trust (including costs and expenses relating to the organization of each trust, the fees and expenses of the trustees and the cost and expenses relating to the operation of each trust); and

•

any and all taxes and costs and expenses with respect thereto (other than United States withholding taxes) to which each trust might become subject.

---

Table of Contents

---

Table of Contents

•

any accrued and unpaid distributions that are required to be paid on the capital securities, to the extent the trust has funds available for distributions;

•

the redemption price, plus all accrued and unpaid distributions, to the extent the trust has funds available for redemptions, relating to any capital securities called for redemption by the trust; and

•

upon a voluntary or involuntary dissolution, winding-up or termination of the trust, other than in connection with the distribution of junior subordinated debentures to the holders of capital securities or the redemption of all of the capital securities, the lesser of:

(1)

the aggregate of the liquidation amount and all accrued and unpaid distributions on the capital securities to the date of payment; and

(2)

the amount of assets of the trust remaining for distribution to holders of the capital securities in liquidation of the trust.

•

subordinate and junior in right of payment to all our other liabilities in the same manner as the junior subordinated debentures; and

---

Table of Contents

•

equally with all other capital security guarantees that we issue.

---

Table of Contents

•

the aggregate principal amount of junior subordinated debentures will be equal to the sum of the aggregate stated liquidation amount of the trust securities;

•

the interest rate and the interest and other payment dates on the junior subordinated debentures will match the distribution rate and distribution and other payment dates for the trust securities;

•

under the junior subordinated indenture, we will pay, and the trusts will not be obligated to pay, directly or indirectly, all costs, expenses, debts and obligations of the trusts, other than those relating to the trust securities; and

•

the trust agreements further provide that the trustees may not cause or permit the trusts to engage in any activity that is not consistent with the purposes of the trusts.

---

Table of Contents

---

Table of Contents

•

the designation and stated value per share of the preferred stock and the number of shares offered;

•

the amount of liquidation preference per share;

•

the price at which the preferred stock will be issued;

•

the dividend rate, or method of calculation, the dates on which dividends will be payable, whether dividends will be cumulative or noncumulative and, if cumulative, the dates from which dividends will commence to accumulate;

•

any redemption or sinking fund provisions;

•

any conversion provisions;

•

whether we have elected to offer depositary shares as described under “Description of Depositary Shares;” and

---

Table of Contents

•

any other rights, preferences, privileges, limitations and restrictions on the preferred stock.

•

senior to all classes of common stock and all equity securities issued by us the terms of which specifically provide that the equity securities will rank junior to the preferred stock (the junior securities);

•

equally with all equity securities issued by us the terms of which specifically provide that the equity securities will rank equally with the preferred stock (the parity securities); and

•

junior to all equity securities issued by us the terms of which specifically provide that the equity securities will rank senior to the preferred stock.

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

•

debt securities,

•

debt obligations of third parties, including U.S. treasury securities, or

•

capital securities issued by trusts, all of whose common securities are owned by us or by one of our subsidiaries,

•

the specific designation and aggregate number of, and the price at which we will issue, the warrants;

•

the currency or currency units in which the offering price, if any, and the exercise price are payable;

•

the date on which the right to exercise the warrants will begin and the date on which that right will expire or, if you may not continuously exercise the warrants throughout that period, the specific date or dates on which you may exercise the warrants;

---

Table of Contents

•

whether the warrants will be issued in fully registered form or bearer form, in definitive or global form or in any combination of these forms, although, in any case, the form of a warrant included in a unit will correspond to the form of the unit and of any security included in that unit;

•

any applicable material United States federal income tax consequences;

•

the identity of the warrant agent for the warrants and of any other depositaries, execution or paying agents, transfer agents, registrars or other agents;

•

the proposed listing, if any, of the warrants or any securities purchasable upon exercise of the warrants on any securities exchange;

•

the designation and terms of the preferred stock or common stock purchasable upon exercise of the warrants;

•

the designation, aggregate principal amount, currency and terms of the debt securities that may be purchased upon exercise of the warrants;

•

if applicable, the designation and terms of the debt securities, preferred stock, depositary shares or common stock with which the warrants are issued and the number of warrants issued with each security;

•

if applicable, the date from and after which the warrants and the related debt securities, preferred stock, depositary shares or common stock will be separately transferable;

•

the number of shares of preferred stock, the number of depositary shares or the number of shares of common stock purchasable upon exercise of a warrant and the price at which those shares may be purchased;

•

if applicable, the minimum or maximum amount of the warrants that may be exercised at any one time;

•

information with respect to book-entry procedures, if any;

•

the antidilution provisions of the warrants, if any;

•

any redemption or call provisions;

•

whether the warrants are to be sold separately or with other securities as parts of units; and

•

any additional terms of the warrants, including terms, procedures and limitations relating to the exchange and exercise of the warrants.

•

by the depository for such global security to a nominee of such depository, or

•

by a nominee of such depository to such depository or another nominee of such depository, or

•

by such depository or any such nominee to a successor of such depository or a nominee of such successor, or

---

Table of Contents

•

in the manner provided below under “—Book-Entry Issuance.”

---

Table of Contents

(a)

such depository has notified us that it is unwilling or unable to continue as depository for such global debt security or has ceased to be a clearing agency registered under the Exchange Act;

(b)

there shall have occurred and be continuing an event of default or a default, as the case may be, with respect to such global debt security; or

(c)

there shall exist such circumstances, if any, in addition to or in lieu of the foregoing as have been specified for this purpose as contemplated by the indentures.

---

Table of Contents

---

Table of Contents

---

Table of Contents

•

to the public through a group of underwriters managed or co-managed by, one or more underwriters, which may be affiliates;

•

through one or more agents, which may be affiliates; or

•

directly to purchasers.

•

at a fixed price, or prices, which may be changed from time to time;

•

at market prices prevailing at the time of sale;

•

at prices related to such prevailing market prices;

•

or at negotiated prices.

•

the name of the agent or the name or names of any underwriters;

•

the public offering or purchase price;

•

any discounts and commissions to be allowed or paid to the agent or underwriters;

•

all other items constituting underwriting compensation;

•

any discounts and commissions to be allowed or paid to dealers; and

•

any exchanges on which the securities will be listed.

---

Table of Contents

•

the purchase by an institution of the securities covered under that contract shall not at the time of delivery be prohibited under the laws of the jurisdiction to which that institution is subject; and

•

if the securities are also being sold to underwriters acting as principals for their own account, the underwriters shall have purchased such securities not sold for delayed delivery. The underwriters and other persons acting as our agents will not have any responsibility in respect of the validity or performance of delayed delivery contracts.

---

Table of Contents

---

Table of Contents

---

---

---

---

---

---

---