State Street Responds to Grievance Filed by Former Contract Employee.

Business/Technology Editors

BOSTON--(BUSINESS WIRE)--Aug. 17, 2000

State Street Corporation (NYSE: STT) issued the following response to a grievance filed yesterday in U.S. District Court in Massachusetts by a former contract employee, David Smith, who worked at the company for approximately six months in 1997.

"State Street believes the charges outlined in Mr. Smith's most recent filing against the company have no merit, and we intend to oppose them vigorously. His current action includes allegations brought before the Massachusetts Commission Against Discrimination (MCAD), which were dismissed in State Street's favor and affirmed on appeal in September 1999. We believe Mr. Smith's current filing is simply an attempt to keep the same rejected issues alive -- despite the MCAD's rulings. We remain committed to maintaining the highest standard of integrity in our dealings with our employees, customers and all of our other constituencies."

With $6.1 trillion in assets under custody and $729 billion under management, State Street Corporation is one of the world's leading specialists in serving institutional investors. Offices are located in the United States, Canada, Chile, Cayman Islands, Netherlands Antilles, Ireland, United Kingdom, Netherlands, France, Belgium, Luxembourg, Switzerland, Germany, Czech Republic, United Arab Emirates, Russia, Peoples Republic of China, Taiwan, South Korea, Japan, Singapore, Australia, and New Zealand. State Street Corporation's common stock is traded on the New York Stock Exchange under the symbol STT. For more information, visit State Street's web site at www.statestreet.com.