Supplement No. 2 dated November 22, 1999
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to Prospectus dated February 1, 1999
for State Street Research Capital Fund
A series of State Street Research Capital Trust
Subject to shareholder approval as described below, the following policy
changes are expected to be made:
Investment Objective Changes
The fund's investment objective will be changed to provide flexibility in
managing the fund in light of changes in the mutual fund industry. The fund
has proposed a change in its investment objective. If the proposal is
approved, the fund intends to seek long-term growth of capital by focusing
on mid-capitalization growth stocks. The fund's new objective will read:
"seeks to provide long-term growth of capital."
[State Street Logo]
Control Number: (exp1299)SSR-LD CF-368G-1199
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Investment Policy Changes
The fundamental policy regarding diversification of investments will be amended
to provide greater investment flexibility. The policy will be amended so that
the provisions that limit the fund's investments in any one issuer to 5% of the
fund's total assets and prevent the fund from investing in more than 10% of the
voting securities of any one issuer, will apply to only 75% of the fund's total
assets. Also, the limit would not apply to the purchase of shares of other
investment companies or U.S. Government securities as defined under the
Investment Company Act of 1940.
The fundamental policy regarding concentration of investments in any one
industry will be revised to allow for changes in the definition of an industry,
as economic and business developments occur as set forth in a fund's Prospectus
and Statement of Additional Information, as amended from time to time.
The fundamental policy regarding the Fund's policy on investments in securities
in which fund management or the investment adviser has an interest is being
eliminated. This change would allow the fund more flexibility to invest in
individual companies.
The policy regarding participation in underwritings will be amended to provide
greater investment flexibility (the fund may participate as a selling
shareholder in an issuer's public offering).
Rule 12b-1 Plan for Class A Shares
The fund's Rule 12b-1 plan of distribution would be amended to allow the fund to
increase its Rule 12b-1 fees. These fees are used to pay for service,
distribution and marketing expenses related to sales of Class A shares of the
fund. The current 25 basis point fee would be increased to 40 basis points
(0.40% or .0040) of the net assets attributable to Class A shares. The fund's
distributor anticipates that the fund's Trustees will authorize an initial
increase of substantially less than 15 basis points. However, shareholders are
being asked to provide the Trustees with the flexibility to adjust the payments
in the future within the authorized range.
For Further Information
The above changes will be effective upon, and subject to, shareholder approval
at a meeting scheduled for February 2000, or any continued session thereof. For
more detailed information about the changes, obtain a copy of the related Proxy
Statement by calling the State Street Research Service Center at 1-800-562-0032
after December 6, 1999.
Investment Management
Under the above caption on page 8 of the Prospectus, the third paragraph is
revised in its entirety to read as follows:
Catherine Dudley has been responsible for the fund's day-to-day portfolio
management since October 1999. A senior vice president, she joined the firm in
1998. During the past five years she has also served as a senior portfolio
manager at Chancellor Capital Management and as a portfolio manager at Phoenix
Investment Council.
