SUPPLEMENT TO THE SPARTAN (registered trademark)
MUNICIPAL FUNDS
FEBRUARY 27, 1999 PROSPECTUS
SHAREHOLDER MEETING. On or about January 19, 2000, a meeting of the
shareholders of Spartan Intermediate Municipal Income Fund will be
held to approve various proposals. Shareholders of record on November
22, 1999 are entitled to vote at the meeting.
SHAREHOLDER MEETING. On or about December 15, 1999, a meeting of the
shareholders of Spartan Municipal Income Fund will be held to approve
various proposals. Shareholders of record on October 18, 1999 are
entitled to vote at the meeting.
For more detailed information concerning the proposals under
consideration, please contact Fidelity at 1-800-544- 6666 to
request a free copy of either proxy statement.
The following information replaces the fourth bullet under the
heading "Principal Investment Strategies" in the "Investment Summary"
section for Spartan Municipal Income Fund on page 4.
(small solid bullet) Managing the fund to have similar overall
interest rate risk to the Lehman Brothers 3 Plus Year Municipal Bond
Index.
The following information replaces the fourth paragraph under the
heading "Principal Investment Strategies" in the "Investment Details"
section for Spartan Municipal Income Fund on page 9.
FMR uses the Lehman Brothers 3 Plus Year Municipal Bond Index as a
guide in structuring the fund and selecting its investments. FMR
man ages the fund to have similar overall interest rate risk to the
index. As of October 31, 1999, the dollar-weighted average maturity of
the fund and the index was approximately 12.8 and 14.6 years,
respectively.
SUPPLEMENT TO THE
SPARTAN(registered trademark) INTERMEDIATE MUNICIPAL INCOME FUND
A FUND OF FIDELITY SCHOOL STREET TRUST
SPARTAN MUNICIPAL INCOME FUND
A FUND OF FIDELITY COURT STREET TRUST
FEBRUARY 27, 1999
STATEMENT OF ADDITIONAL INFORMATION
THE FOLLOWING NON-FUNDAMENTAL LIMITATION REPLACES NON-FUNDAMENTAL
INVESTMENT LIMITATION (III) FOUND IN THE "INVESTMENT LIMITATIONS OF
SPARTAN INTERMEDIATE MUNICIPAL INCOME" SECTION ON PAGE 2.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)).
THE FOLLOWING NON-FUNDAMENTAL LIMITATION REPLACES NON-FUNDAMENTAL
INVESTMENT LIMITATION (III) FOUND IN THE "INVESTMENT LIMITATIONS OF
SPARTAN MUNICIPAL INCOME" SECTION ON PAGE 4.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)).
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"INVESTMENT POLICIES AND LIMITATIONS" SECTION ON PAGE 10.
SOURCES OF LIQUIDITY OR CREDIT SUPPORT. Issuers may employ various
forms of credit and liquidity enhancements, including letters of
credit, guarantees, puts, and demand features, and insurance provided
by domestic or foreign entities such as banks and other financial
institutions. FMR may rely on its evaluation of the credit of the
liquidity or credit enhancement provider in determining whether to
purchase a security supported by such enhancement. In evaluating the
credit of a foreign bank or other foreign entities, FMR will consider
whether adequate public information about the entity is available and
whether the entity may be subject to unfavorable political or economic
developments, currency controls, or other government restrictions that
might affect its ability to honor its commitment. Changes in the
credit quality of the entity providing the enhancement could affect
the value of the security or a fund's share price.
THE FOLLOWING INFORMATION REPLACES THE FO URTH PARAGRAPH FOLLOWING
THE HEADING "PERFORMANCE COMPARISONS" IN THE "PERFORMANCE" SECTION ON
PAGE 15.
Each fund may compare its performance to the Lehman Brothers Municipal
Bond Index, a market value-weighted index for investment-grade
municipal bonds with maturities of one year or more . S partan
Intermediate Municipal Income may also compare its performance to that
of the Lehman Brothers 1-17 Year Municipal Bond Index, a market
value-weighted index for investment-grade municipal bonds with
maturities between one an d 17 year s. Spartan Municipal
Income may also compare its performance to that of the Lehman Brothers
Municipal Bond Index, a market value-weighted index for
investment-grade municipal bonds with maturities of one year or more.
Spartan Municipal Income may also compare its performance to that of
the Lehman Brothers 3 Plus Year Municipal Bond Index, a market
value-weighted index for investment-grade municipal bonds with
maturities of three years or more. Issues included in each index have
been issued after December 31, 1990, have an outstanding par value of
at least $3 million, and have been issued as part of an offering of at
least $50 million. Subsequent to December 31, 1995, zero coupon
bonds and issues subject to the alternative minimum tax are included
in each index. Beg inning January 1, 2000, issues included in each
index will have an outstanding par value of at least $5 million.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"TRUSTEES AND OFFICERS" SECTION BEGINNING ON PAGE 17.
*EDWARD C. JOHNSON 3d (68), Trustee and President, is Chairman, Chief
Executive Officer and a Director of FMR Corp.; a Director and Chairman
of the Board and of the Executive Committee of FMR; Chairman and a
Director of Fidelity Investments Money Management, Inc. (1998),
Fidelity Management & Research (U.K.) Inc., and Fidelity Management &
Research (Far East) Inc.; and a Director of FDC. Abigail Johnson,
Member of the Advisory Board of Fidelity School Street Trust and
Fidelity Court Street Trust, is Mr. Johnson's daughter.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"TRUSTEES AND OFFICERS" SECTION BEGINNING ON PAGE 17.
ABIGAIL P. JOHNSON (37), Member of the Advisory Board of Fidelity
School Street Trust and Fidelity Court Street Trust (1999), is Vice
President of certain Equity Funds (1997), and is a Director of FMR
Corp. (1994). Before assuming her current responsibilities, Ms.
Johnson managed a number of Fidelity funds. Edward C. Johnson 3d,
Trustee and President of the Funds, is Ms. Johnson's father.
NED C. LAUTENBACH (55), Member of the Advisory Board (1999), has been
a partner of Clayton, Dubilier & Rice, Inc. (private equity investment
firm) since September 1998. Mr. Lautenbach was Senior Vice President
of IBM Corporation from 1992 until his retirement in July 1998. From
1993 to 1995 he was Chairman of IBM World Trade Corporation. He also
was a member of IBM's Corporate Executive Committee from 1994 to July
1998. He is a Director of PPG Industries Inc. (glass, coating and
chemical manufacturer), Dynatech Corporation (global communications
equipment), Eaton Corporation (global manufacturer of highly
engineered products) and ChoicePoint Inc. (data identification,
retrieval, storage, and analysis).
THE FOLLOWING INFORMATION FOUND IN THE "TRUSTEES AND OFFICERS" SECTION
BEGINNING ON PAGE 17 HAS BEEN REMOVED.
LEONARD M. RUSH (52), Assistant Treasurer (1994), is an employee of
FMR (1994). Prior to becoming Assistant Treasurer of the Fidelity
funds, Mr. Rush was Chief Compliance Officer of FMR Corp. (1993-1994)
and Chief Financial Officer of Fidelity Brokerage Services, Inc.
(1990-1993).
THE FOLLOWING INFORMATION REPLACES THE COMPENSATION TABLE FOUND IN THE
"TRUSTEES AND OFFICERS" SECTION BEGINNING ON PAGE 17.
The following table sets forth information describing the compensation
of each Trustee and Member of the Advisory Board of each fund for his
or her services for the fiscal year ended in 1998 or calendar year
ended December 31, 1998, as applicable.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMPENSATION TABLE
Trustees and Members of the Aggregate Compensation from Aggregate Compensation from Total Compensation from the
Advisory Board Spartan Intermediate Spartan Municipal IncomeB Fund Complex*,A
Municipal IncomeB
Edward C. Johnson 3d** $ 0 $ 0 $ 0
Abigail P. Johnson** $ 0 $ 0 $ 0
J. Gary Burkhead** $ 0 $ 0 $ 0
Ralph F. Cox $ 393 $ 1,128 $ 223,500
Phyllis Burke Davis $ 388 $ 1,117 $ 220,500
Robert M. Gates $ 393 $ 1,134 $ 223,500
E. Bradley Jones $ 390 $ 1,122 $ 222,000
Donald J. Kirk $ 398 $ 1,154 $ 226,500
Ned C. Lautenbach*** $ 0 $ 0 $ 0
Peter S. Lynch** $ 0 $ 0 $ 0
William O. McCoy $ 393 $ 1,134 $ 223,500
Gerald C. McDonough $ 480 $ 1,389 $ 273,500
Marvin L. Mann $ 388 $ 1,122 $ 220,500
Robert C. Pozen** $ 0 $ 0 $ 0
Thomas R. Williams $ 393 $ 1,134 $ 223,500
</TABLE>
* Information is for the calendar year ended December 31, 1998 for 237
funds in the complex.
** Interested Trustees of the funds, Ms. Johnson and Mr. Burkhead are
compensated by FMR.
*** Effective October 14, 1999, Mr. Lautenbach serves as a Member of
the Advisory Board.
A Compensation figures include cash, amounts required to be deferred,
and may include amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1998, the Trustees accrued required
deferred compensation from the funds as follows: Ralph F. Cox,
$75,000; Phyllis Burke Davis, $75,000; Robert M. Gates, $75,000; E.
Bradley Jones, $75,000; Donald J. Kirk, $75,000; William O. McCoy,
$75,000; Gerald C. McDonough, $87,500; Marvin L. Mann, $75,000; and
Thomas R. Williams, $75,000. Certain of the non-interested Trustees
elected voluntarily to defer a portion of their compensation as
follows: Ralph F. Cox, $55,039; Marvin L. Mann, $55,039; Thomas R.
Williams, $63,433; and William O. McCoy, $55,039.
B Compensation figures include cash.
THE FOLLOWING INFORMATION REPLACES THE "GROUP FEE RATE" AND "EFFECTIVE
ANNUAL FEE RATE" SCHEDULES FOR THE FUNDS FOUND ON PAGE 22.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Assets Annualized Rate Group Net Assets Effective Annual Fee Rate
0 - $3 billion .3700% $ 1 billion .3700%
3 - 6 .3400 50 .2188
6 - 9 .3100 100 .1869
9 - 12 .2800 150 .1736
12 - 15 .2500 200 .1652
15 - 18 .2200 250 .1587
18 - 21 .2000 300 .1536
21 - 24 .1900 350 .1494
24 - 30 .1800 400 .1459
30 - 36 .1750 450 .1427
36 - 42 .1700 500 .1399
42 - 48 .1650 550 .1372
48 - 66 .1600 600 .1349
66 - 84 .1550 650 .1328
84 - 120 .1500 700 .1309
120 - 156 .1450 750 .1291
156 - 192 .1400 800 .1275
192 - 228 .1350 850 .1260
228 - 264 .1300 900 .1246
264 - 300 .1275 950 .1233
300 - 336 .1250 1,000 .1220
336 - 372 .1225 1,050 .1209
372 - 408 .1200 1,100 .1197
408 - 444 .1175 1,150 .1187
444 - 480 .1150 1,200 .1177
480 - 516 .1125 1,250 .1167
516 - 587 .1100 1,300 .1158
587 - 646 .1080 1,350 .1149
646 - 711 .1060 1,400 .1141
711 - 782 .1040
782 - 860 .1020
860 - 946 .1000
946 - 1,041 .0980
1,041 - 1,145 .0960
1,145 - 1,260 .0940
over - 1,260 .0920
</TABLE>
THE FOLLOWING INFORMATION REPLACES THE FIRST PARAGRAPH IN THE
"TRANSFER AND SERVICE AGENT AGREEMENTS" SECTION ON PAGE 24.
Each fund has entered into a transfer agent agreement with Citibank,
N.A., which is located at 111 Wall Street, New York, New York. Under
the terms of the agreements, Citibank, N.A. provides transfer agency,
dividend disbursing, and shareholder services for each fund. Citibank,
N.A. in turn has entered into sub-transfer agent agreements with FSC,
an affiliate of FMR. Under the terms of the sub-agreements, FSC
performs all processing activities associated with providing these
services for each fund and receives all related transfer agency fees
paid to Citibank, N.A.
THE FOLLOWING INFORMATION REPLACES THE FOURTH PARAGRAPH IN THE
"TRANSFER AND SERVICE AGENT AGREEMENTS" SECTION ON PAGE 24.
In addition, Citibank, N.A. receives the pro rata portion of the
transfer agency fees applicable to shareholder accounts in a qualified
state tuition program (QSTP), as defined under the Small Business Job
Protection Act of 1996, managed by FMR or an affiliate and each
Fidelity Freedom Fund, a fund of funds managed by an FMR affiliate,
according to the percentage of the QSTP's or Freedom Fund's assets
that is invested in a fund.
THE FOLLOWING INFORMATION REPLACES THE SIXTH PARAGRAPH IN THE
"TRANSFER AND SERVICE AGENT AGREEMENTS" SECTION ON PAGE 25.
Each fund has also entered into a service agent agreement with
Citibank, N.A. Under the terms of the agreements, Citibank, N.A.
provides pricing and bookkeeping services for each fund. Citibank,
N.A. in turn has entered into sub-service agent agreements with FSC.
Under the terms of the sub-agreements, FSC performs all processing
activities associated with providing these services, including
calculating the NAV and dividends for each fund and maintaining each
fund's portfolio and general accounting records, and receives all
related pricing and bookkeeping fees paid to Citibank, N.A.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"DESCRIPTION OF THE TRUSTS" SECTION ON PAGE 26.
CUSTODIAN. Citibank, N.A., 111 Wall Street, New York, New York, is
custodian of the assets of the funds. The custodian is responsible for
the safekeeping of a fund's assets and the appointment of any
subcustodian banks and clearing agencies.
