SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the [X]
Registrant
Filed by a [ ]
Party other than the
Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the
Commission Only (as
permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant
to Sec. 240.14a-11(c) or
Sec. 240.14a-12
(Name of Registrant as Specified In Its Charter)
Fidelity Commonwealth Trust
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below
per Exchange Act Rules
14a-6(i)(1) and 0-11.
(1) Title of each class of
securities to which
transaction applies:
(2) Aggregate number of
securities to which
transaction applies:
(3) Per unit price or other
underlying value of
transaction
computed pursuant to Exchange
Act Rule 0-11:
(4) Proposed maximum aggregate
value of transaction:
(5) Total Fee Paid:
[ ] Fee paid previously with
preliminary materials.
[ ] Check box if any part of the
fee is offset as provided by
Exchange Act Rule 0-11(a) (2)
and identify the filing for
which the offsetting fee was
paid previously. Identify the
previous filing by
registration statement
number, or the Form or
Schedule and the date of
its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or
Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
FIDELITY SMALL CAP STOCK FUND
FIDELITY MID-CAP STOCK FUND
FIDELITY LARGE CAP STOCK FUND
FIDELITY SMALL CAP SELECTOR
FIDELITY INTERMEDIATE BOND FUND
FUNDS OF
FIDELITY COMMONWEALTH TRUST
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-544-8888
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of the above funds:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
Meeting) of Fidelity Small Cap Stock Fund, Fidelity Mid-Cap Stock
Fund, Fidelity Large Cap Stock Fund, Fidelity Small Cap Selector, and
Fidelity Intermediate Bond Fund (the funds) will be held at the office
of Fidelity Commonwealth Trust (the trust), 82 Devonshire Street,
Boston, Massachusetts 02109 on September 15, 1999, at 9:00 a.m. The
purpose of the Meeting is to consider and act upon the following
proposals, and to transact such other business as may properly come
before the Meeting or any adjournments thereof.
1. To elect a Board of Trustees.
2. To ratify the selection of Deloitte & Touche LLP or
PricewaterhouseCoopers LLP as independent accountants of the funds.
3. To authorize the Trustees to adopt an amended and restated
Declaration of Trust.
4. To approve amended management contracts for Fidelity Large Cap
Stock Fund and Fidelity Small Cap Selector.
5. To approve an amended management contract for Fidelity
Intermediate Bond Fund.
6. To approve amended sub-advisory agreements with Fidelity
Management & Research (U.K.) Inc. for Fidelity Mid-Cap Stock Fund,
Fidelity Large Cap Stock Fund, Fidelity Small Cap Selector, and
Fidelity Intermediate Bond Fund.
7. To approve amended sub-advisory agreements with Fidelity
Management & Research (Far East) Inc. for Fidelity Mid-Cap Stock Fund,
Fidelity Large Cap Stock Fund, Fidelity Small Cap Selector, and
Fidelity Intermediate Bond Fund.
8. To approve a distribution and service plan pursuant to Rule 12b-1
for Fidelity Small Cap Selector.
9. To approve an agreement and plan providing for the reorganization
of Fidelity Small Cap Selector from a separate series of one
Massachusetts business trust to another.
10. To eliminate a fundamental investment policy of Fidelity
Intermediate Bond Fund.
ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS
11. To amend Fidelity Large Cap Stock Fund's, Fidelity Small Cap
Selector's, and Fidelity Intermediate Bond Fund's fundamental
investment limitation concerning diversification, to exclude
securities of other investment companies from the limitation.
12. To amend Fidelity Intermediate Bond Fund's fundamental
investment limitation concerning the underwriting of securities.
The Board of Trustees has fixed the close of business on July 19,
1999 as the record date for the determination of the shareholders of
each of the funds entitled to notice of, and to vote at, such Meeting
and any adjournments thereof.
By order of the Board of Trustees,
ERIC D. ROITER, Secretary
July 19, 1999
YOUR VOTE IS IMPORTANT -
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY
SHAREHOLDER WHO DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO
INDICATE VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND SIGN
IT, AND RETURN IT IN THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF
MAILED IN THE UNITED STATES. IN ORDER TO AVOID UNNECESSARY EXPENSE, WE
ASK YOUR COOPERATION IN MAILING YOUR PROXY CARD PROMPTLY, NO MATTER
HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.
INSTRUCTIONS FOR EXECUTING PROXY CARD
The following general rules for executing proxy cards may be of
assistance to you and help avoid the time and expense involved in
validating your vote if you fail to execute your proxy card properly.
1. INDIVIDUAL ACCOUNTS: Your name should be signed exactly as it
appears in the registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.
3. ALL OTHER ACCOUNTS should show the capacity of the individual
signing. This can be shown either in the form of the account
registration itself or by the individual executing the proxy card. For
example:
REGISTRATION VALID SIGNATURE
A. 1) ABC Corp. John Smith, Treasurer
2) ABC Corp. John Smith, Treasurer
c/o John Smith, Treasurer
B. 1) ABC Corp. Profit Sharing Plan Ann B. Collins, Trustee
2) ABC Trust Ann B. Collins, Trustee
3) Ann B. Collins, Trustee Ann B. Collins, Trustee
u/t/d 12/28/78
C. 1) Anthony B. Craft, Cust. Anthony B. Craft
f/b/o Anthony B. Craft, Jr.
UGMA
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS OF
FIDELITY COMMONWEALTH TRUST:
FIDELITY SMALL CAP STOCK FUND
FIDELITY MID-CAP STOCK FUND
FIDELITY LARGE CAP STOCK FUND
FIDELITY SMALL CAP SELECTOR
FIDELITY INTERMEDIATE BOND FUND
TO BE HELD ON SEPTEMBER 15, 1999
This Proxy Statement is furnished in connection with a solicitation
of proxies made by, and on behalf of, the Board of Trustees of
Fidelity Commonwealth Trust (the trust) to be used at the Special
Meeting of Shareholders of Fidelity Small Cap Stock Fund, Fidelity
Mid-Cap Stock Fund, Fidelity Large Cap Stock Fund, Fidelity Small Cap
Selector, and Fidelity Intermediate Bond Fund (the funds) and at any
adjournments thereof (the Meeting), to be held on September 15, 1999
at 9:00 a.m., at 82 Devonshire Street, Boston, Massachusetts 02109,
the principal executive office of the trust and Fidelity Management &
Research Company (FMR), the funds' investment adviser. Shareholders of
the trust's other fund (Spartan(registered trademark) Market Index
Fund) will also participate in the Meeting and have been mailed a
separate notice and proxy statement relating to proposals to be voted
upon by the trust and by the shareholders of that fund.
The purpose of the Meeting is set forth in the accompanying Notice.
The solicitation is being made primarily by the mailing of this Proxy
Statement and the accompanying proxy card on or about July 19, 1999.
Supplementary solicitations may be made by mail, telephone, telegraph,
facsimile, electronic means or by personal interview by
representatives of the trust. In addition, Management Information
Services Corp. (MIS) and D.F. King & Co., Inc. may be paid on a
per-call basis to solicit shareholders on behalf of the funds at an
anticipated cost of approximately $ 6,000 (Fidelity Small Cap
Stock Fund), $ 6,000 (Fidelity Mid-Cap Stock Fund),
$ 4,000 (Fidelity Large Cap Stock Fund), $ 4,000 (Fidelity
Small Cap Selector), and $ 10,000 (Fidelity Intermediate Bond
Fund). For Fidelity Small Cap Stock Fund, the expenses in connection
with preparing this Proxy Statement and its enclosures and of all
solicitations will be paid by the fund, provided the expenses do not
exceed the fund's existing expense cap listed on page 40 .
Expenses exceeding Fidelity Small Cap Stock Fund's expense cap will be
paid by FMR. For Fidelity Mid-Cap Stock Fund, Fidelity Large Cap Stock
Fund, Fidelity Small Cap Selector, and Fidelity Intermediate Bond
Fund, the expenses in connection with preparing this Proxy Statement
and its enclosures and of all solicitations will be borne by the
funds. The funds will reimburse brokerage firms and others for their
reasonable expenses in forwarding solicitation material to the
beneficial owners of shares. The principal business address of
Fidelity Distributors Corporation (FDC), the funds' principal
underwriter and distribution agent, is 82 Devonshire Street, Boston,
Massachusetts 02109. The principal business address of Fidelity
Management & Research (U.K.) Inc. (FMR U.K.) and Fidelity Management &
Research (Far East) Inc. (FMR Far East), subadvisers to the funds, is
82 Devonshire Street, Boston, Massachusetts 02109. The principal
business address of Fidelity Investments Money Management, Inc.
(FIMM), subadviser to Fidelity Intermediate Bond Fund, is 1 Spartan
Way, Merrimack, New Hampshire 03054.
If the enclosed proxy card is executed and returned, it may
nevertheless be revoked at any time prior to its use by written
notification received by the trust, by the execution of a later-dated
proxy card, by the trust's receipt of a subsequent valid telephonic
vote or by attending the Meeting and voting in person.
All proxy cards solicited by the Board of Trustees that are properly
executed and received by the Secretary prior to the Meeting, and are
not revoked, will be voted at the Meeting. Shares represented by such
proxies will be voted in accordance with the instructions thereon. If
no specification is made on a proxy card, it will be voted FOR the
matters specified on the proxy card. Only proxies that are voted will
be counted towards establishing a quorum. Broker non-votes are not
considered voted for this purpose. Shareholders should note that while
votes to ABSTAIN will count toward establishing a quorum, passage of
any proposal being considered at the Meeting will occur only if a
sufficient number of votes are cast FOR the proposal. Accordingly,
votes to ABSTAIN and votes AGAINST will have the same effect in
determining whether the proposal is approved.
The funds may also arrange to have votes recorded by telephone. For
Fidelity Small Cap Stock Fund, the expenses in connection with
telephone voting will be paid by the fund, provided the expenses do
not exceed the fund's existing expense cap listed on page 41 .
Expenses exceeding Fidelity Small Cap Stock Fund's expense cap will be
paid by FMR. For Fidelity Mid-Cap Stock Fund, Fidelity Large Cap Stock
Fund, Fidelity Small Cap Selector, and Fidelity Intermediate Bond
Fund, the expenses in connection with telephone voting will be borne
by the funds. If the funds record votes by telephone, they will use
procedures designed to authenticate shareholders' identities, to allow
shareholders to authorize the voting of their shares in accordance
with their instructions, and to confirm that their instructions have
been properly recorded. Proxies voted by telephone may be revoked at
any time before they are voted in the same manner that proxies voted
by mail may be revoked. D.F. King & Co., Inc. may be paid on a
per-call basis for vote-by-phone solicitations on behalf of the funds
at an anticipated cost of approximately $ 8,000 (Fidelity Small
Cap Stock Fund), $ 8,000 (Fidelity Mid-Cap Stock Fund),
$ 6,000 (Fidelity Large Cap Stock Fund), $ 6,000 (Fidelity
Small Cap Selector), and $ 12,000 (Fidelity Intermediate Bond
Fund).
If a quorum is not present at the Meeting, or if a quorum is present
at the Meeting but sufficient votes to approve one or more of the
proposed items are not received, or if other matters arise requiring
shareholder attention, the persons named as proxy agents may propose
one or more adjournments of the Meeting to permit further solicitation
of proxies. Any such adjournment will require the affirmative vote of
a majority of those shares present at the Meeting or represented by
proxy. When voting on a proposed adjournment, the persons named as
proxy agents will vote FOR the proposed adjournment all shares that
they are entitled to vote with respect to each item, unless directed
to vote AGAINST the item, in which case such shares will be voted
AGAINST the proposed adjournment with respect to that item. A
shareholder vote may be taken on one or more of the items in this
Proxy Statement prior to such adjournment if sufficient votes have
been received and it is otherwise appropriate.
Shares of each fund of the trust issued and outstanding as of May
31 , 1999 are indicated in the following table:
Fidelity Small Cap Stock Fund 46,536,944
Fidelity Mid-Cap Stock Fund* 88,896,271
Fidelity Large Cap Stock Fund 35,206,389
Fidelity Small Cap Selector 41,854,634
Fidelity Intermediate Bond Fund 346,177,789
Spartan Market Index Fund 94,675,737
To the knowledge of the trust, substantial (5% or more) record or
beneficial ownership of each fund on May 31 , 1999 was as
follows:
Fidelity Small Cap Selector: General Motors Corp., New York, NY
(9.41%);
Ford Motor Company, Dearborn, MI (5.83%).
Fidelity Mid-Cap Stock Fund: Charitable Gift Fund, Boston, MA
(5.22%).*
* On May 31, 1999, Fidelity Mid-Cap Stock Fund was a series of
Fidelity Devonshire Trust.
FMR has advised the trust that for Proposals 1, 2, 3, 6 and 7
contained in this Proxy Statement, it will vote its shares at the
Meeting FOR each Proposal. To the knowledge of the trust, no other
shareholder owned of record or beneficially more than 5% of the
outstanding shares of each fund on that date.
Shareholders of record at the close of business on July 19, 1999 will
be entitled to vote at the Meeting. Each such shareholder will be
entitled to one vote for each dollar of net asset value held on that
date.
FOR A FREE COPY OF EACH FUND'S ANNUAL REPORT FOR THE FISCAL YEAR
ENDED APRIL 30, 1999, CALL 1-800-544-8888 OR WRITE TO FIDELITY
DISTRIBUTORS CORPORATION AT 82 DEVONSHIRE STREET, BOSTON,
MASSACHUSETTS 02109.
VOTE REQUIRED: A PLURALITY OF ALL VOTES CAST AT THE MEETING IS
SUFFICIENT TO APPROVE PROPOSAL 1 AND A MAJORITY OF ALL VOTES OF THE
APPROPRIATE FUND CAST AT THE MEETING IS SUFFICIENT TO APPROVE PROPOSAL
2. APPROVAL OF PROPOSAL 3 REQUIRES THE AFFIRMATIVE VOTE OF A "MAJORITY
OF THE OUTSTANDING VOTING SECURITIES" OF THE ENTIRE TRUST. APPROVAL OF
EACH OF PROPOSALS 4 THROUGH 12 REQUIRES THE AFFIRMATIVE VOTE OF A
"MAJORITY OF THE OUTSTANDING VOTING SECURITIES" OF THE APPROPRIATE
FUND. UNDER THE INVESTMENT COMPANY ACT OF 1940 (THE 1940 ACT), THE
VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES" MEANS THE
AFFIRMATIVE VOTE OF THE LESSER OF (A) 67% OR MORE OF THE VOTING
SECURITIES PRESENT AT THE MEETING OR REPRESENTED BY PROXY IF THE
HOLDERS OF MORE THAN 50% OF THE OUTSTANDING VOTING SECURITIES ARE
PRESENT OR REPRESENTED BY PROXY OR (B) MORE THAN 50% OF THE
OUTSTANDING VOTING SECURITIES. BROKER NON-VOTES ARE NOT CONSIDERED
"PRESENT" FOR THIS PURPOSE.
The following table summarizes the proposals applicable to each fund.
<TABLE>
<CAPTION>
Proposal # Proposal Description Applicable Fund(s)
<S> <C> <C>
1. To elect as Trustees the All
twelve nominees presented in
proposal 1.
2. To ratify the selection of All
Deloitte & Touche LLP or
PricewaterhouseCoopers LLP
as independent accountants
of the funds.
3. To authorize the Trustees to All
adopt an amended and
restated Declaration of Trust.
4. To approve an amended Fidelity Large Cap Stock Fund
management contract for the Fidelity Small Cap Selector
fund that would reduce the
management fee payable to
FMR by the fund as FMR's
assets under management
increase and would modify
the performance adjustment
calculation to calculate the
fund's investment
performance and that of its
comparative index to the
nearest 0.01%.
5. To approve an amended Fidelity Intermediate Bond Fund
management contract for the
fund that would reduce the
management fee payable to
FMR by the fund as FMR's
assets under management
increase.
6. To approve an amended Fidelity Mid-Cap Stock Fund
sub-advisory agreement with Fidelity Large Cap Stock Fund
FMR U.K. to allow FMR, FMR Fidelity Small Cap Selector
U.K., and the trust, on Fidelity Intermediate Bond Fund
behalf of the fund, to
modify the agreement subject
to the requirements of the
1940 Act.
7. To approve an amended Fidelity Mid-Cap Stock Fund
sub-advisory agreement with Fidelity Large Cap Stock Fund
FMR Far East to allow FMR, Fidelity Small Cap Selector
FMR Far East, and the trust, Fidelity Intermediate Bond Fund
on behalf of the fund, to
modify the agreement subject
to the requirements of the
1940 Act.
8. To approve a distribution and Fidelity Small Cap Selector
service plan pursuant to
Rule 12b-1 for the fund that
describes all material
aspects of the proposed
financing for the
distribution of shares of
the fund.
9. To approve an agreement and Fidelity Small Cap Selector
plan providing for the
reorganization of the fund
from a separate series of
one Massachusetts business
trust to a separate series
of another Massachusetts
business trust.
10. To eliminate a fundamental Fidelity Intermediate Bond Fund
investment policy of the fund.
ADOPTION OF STANDARDIZED
INVESTMENT LIMITATIONS
11. DIVERSIFICATION: To amend the Fidelity Large Cap Stock Fund
fundamental diversification Fidelity Small Cap Selector
limitation to exclude Fidelity Intermediate Bond Fund
"securities of other
investment companies" from
issuer diversification limits.
12. UNDERWRITING: To clarify and Fidelity Intermediate Bond Fund
standardize the language of
the fundamental investment
limitation concerning the
underwriting of securities.
</TABLE>
1. TO ELECT A BOARD OF TRUSTEES.
The purpose of this proposal is to elect a Board of Trustees of the
Trust. Pursuant to the provisions of the Declaration of Trust of
Fidelity Commonwealth Trust, the Trustees have determined that the
number of Trustees shall be fixed at twelve. It is intended that the
enclosed proxy card will be voted for the election as Trustees of the
twelve nominees listed below, unless such authority has been withheld
in the proxy card.
All nominees named below are currently Trustees of Fidelity
Commonwealth Trust and have served in that capacity continuously since
originally elected or appointed. Robert M. Gates, William O. McCoy,
and Robert C. Pozen were selected by the trust's Nominating and
Administration Committee (see page 16) and were appointed to
the Board in March 1997, January 1997, and August 1997, respectively.
None of the nominees are related to one another. Those nominees
indicated by an asterisk (*) are "interested persons" of the trust by
virtue of, among other things, their affiliation with either the
trust, the funds' investment adviser (FMR, or the Adviser), or the
funds' distribution agent, FDC. The business address of each nominee
who is an "interested person" is 82 Devonshire Street, Boston,
Massachusetts 02109, and the business address of all other nominees is
Fidelity Investments, P.O. Box 9235, Boston, Massachusetts 02205-9235.
Except for Robert M. Gates, William O. McCoy, and Robert C. Pozen,
each of the nominees is currently a Trustee of 57 registered
investment companies advised by FMR. Mr. Gates , Mr. McCoy ,
and Mr. Pozen are currently Trustees of 55 registered investment
companies advised by FMR.
In the election of Trustees, those twelve nominees receiving the
highest number of votes cast at the Meeting, providing a quorum is
present, shall be elected.
<TABLE>
<CAPTION>
Nominee (Age) Principal Occupation** Year of Election or Appointment
<S> <C> <C>
Ralph F. Cox President of RABAR 1991
(67) Enterprises (management
consulting-engineering
industry, 1994). Prior to
February 1994, he was
President of Greenhill
Petroleum Corporation
(petroleum exploration and
production). Until March
1990, Mr. Cox was President
and Chief Operating Officer
of Union Pacific Resources
Company (exploration and
production). He is a
Director of USA Waste
Services, Inc.
(non-hazardous waste, 1993),
CH2M Hill Companies
(engineering), Rio Grande,
Inc. (oil and gas
production), and Daniel
Industries (petroleum
measurement equipment
manufacturer). In addition,
he is a member of advisory
boards of Texas A&M
University and the
University of Texas at Austin.
Phyllis Burke Davis Prior to her retirement in 1992
(67) September 1991, Mrs. Davis
was the Senior Vice
President of Corporate
Affairs of Avon Products,
Inc. She is currently a
Director of BellSouth
Corporation
(telecommunications), Eaton
Corporation (manufacturing,
1991), and the TJX
Companies, Inc. (retail
stores), and previously
served as a Director of
Hallmark Cards, Inc.
(1985-1991) and Nabisco
Brands, Inc. In addition,
she is a member of the
President's Advisory Council
of The University of Vermont
School of Business
Administration.
Robert M. Gates Consultant, author, and 1997
(55) lecturer (1993). Mr. Gates
was Director of the Central
Intelligence Agency (CIA)
from 1991-1993. From 1989 to
1991, Mr. Gates served as
Assistant to the President
of the United States and
Deputy National Security
Advisor. Mr. Gates is a
Director of LucasVarity PLC
(automotive components and
diesel engines), Charles
Stark Draper Laboratory
(non-profit), NACCO
Industries, Inc. (mining and
manufacturing), and TRW Inc.
(original equipment and
replacement products). Mr.
Gates also is a Trustee of
the Forum for International
Policy and of the Endowment
Association of the College
of William and Mary. In
addition, he is a member of
the National Executive Board
of the Boy Scouts of America.
*Edward C. Johnson 3d President, is Chairman, Chief 1974
(69) 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.
E. Bradley Jones Prior to his retirement in 1990
(71) 1984, Mr. Jones was Chairman
and Chief Executive Officer
of LTV Steel Company. He is
a Director of TRW Inc.
(original equipment and
replacement products),
Consolidated Rail
Corporation, Birmingham
Steel Corporation, and RPM,
Inc. (manufacturer of
chemical products), and he
previously served as a
Director of NACCO
Industries, Inc. (mining and
manufacturing, 1985-1995),
Hyster-Yale Materials
Handling, Inc. (1985-1995),
and Cleveland-Cliffs Inc
(mining), and as a Trustee
of First Union Real Estate
Investments. In addition, he
serves as a Trustee of the
Cleveland Clinic Foundation,
where he has also been a
member of the Executive
Committee as well as
Chairman of the Board and
President, a Trustee and
member of the Executive
Committee of University
School (Cleveland), and a
Trustee of Cleveland Clinic
Florida.
Donald J. Kirk Executive-in-Residence (1995) 1987
(66) at Columbia University
Graduate School of Business
and a financial consultant.
From 1987 to January 1995,
Mr. Kirk was a Professor at
Columbia University Graduate
School of Business. Prior to
1987, he was Chairman of the
Financial Accounting
Standards Board. Mr. Kirk
previously served as a
Director of General Re
Corporation (reinsurance,
1987-1998) and Valuation
Research Corp. (appraisals
and valuations, 1993-1995).
He serves as Chairman of the
Board of Directors of
National Arts Stabilization
Inc., Chairman of the Board
of Trustees of the Greenwich
Hospital Association,
Director of the Yale-New
Haven Health Services Corp.
(1998), a Member of the
Public Oversight Board of
the American Institute of
Certified Public
Accountants' SEC Practice
Section (1995), and as a
Public Governor of the
National Association of
Securities Dealers, Inc.
(1996).
*Peter S. Lynch Vice Chairman and Director of 1990
(56) FMR. Prior to May 31, 1990,
he was a Director of FMR and
Executive Vice President of
FMR (a position he held
until March 31, 1991); Vice
President of Fidelity
Magellan Fund and FMR Growth
Group Leader; and Managing
Director of FMR Corp. Mr.
Lynch was also Vice
President of Fidelity
Investments Corporate
Services (1991-1992). In
addition, he serves as a
Trustee of Boston College,
Massachusetts Eye & Ear
Infirmary, Historic
Deerfield (1989) and Society
for the Preservation of New
England Antiquities, and as
an Overseer of the Museum of
Fine Arts of Boston.
William O. McCoy Vice President of Finance for 1997
(65) the University of North
Carolina (16-school system,
1995). Prior to his
retirement in December 1994,
Mr. McCoy was Vice Chairman
of the Board of BellSouth
Corporation
(telecommunications, 1984)
and President of BellSouth
Enterprises (1986). He is
currently a Director of
Liberty Corporation (holding
company, 1984), Weeks
Corporation of Atlanta (real
estate, 1994), Carolina
Power and Light Company
(electric utility, 1996) and
the Kenan Transport Co.
(1996). Previously, he was a
Director of First American
Corporation (bank holding
company, 1979-1996). In
addition, Mr. McCoy serves
as a member of the Board of
Visitors for the University
of North Carolina at Chapel
Hill (1994) and for the
Kenan-Flager Business School
(University of North
Carolina at Chapel Hill,
1988).
Gerald C. McDonough Chairman of G.M. Management 1989
(71) Group (strategic advisory
services). Mr. McDonough is
a Director of York
International Corp. (air
conditioning and
refrigeration), Commercial
Intertech Corp. (hydraulic
systems, building systems,
and metal products, 1992),
CUNO, Inc. (liquid and gas
filtration products, 1996),
and Associated Estates
Realty Corporation (a real
estate investment trust,
1993). Mr. McDonough served
as a Director of
ACME-Cleveland Corp. (metal
working, telecommunications,
and electronic products)
from 1987-1996 and
Brush-Wellman Inc. (metal
refining) from 1983-1997.
Marvin L. Mann Chairman of the Board of 1993
(66) Lexmark International, Inc.
(office machines, 1991).
Prior to 1991, he held the
positions of Vice President
of International Business
Machines Corporation ("IBM")
and President and General
Manager of various IBM
divisions and subsidiaries.
Mr. Mann is a Director of
M.A. Hanna Company
(chemicals, 1993) and
Imation Corp. (imaging and
information storage, 1997).
*Robert C. Pozen Senior Vice President, is 1997
(53) also President and a
Director of FMR (1997); and
President and a Director of
Fidelity Investments Money
Management, Inc. (1998),
Fidelity Management &
Research (U.K.) Inc. (1997),
and Fidelity Management &
Research (Far East) Inc.
(1997). Previously, Mr.
Pozen served as General
Counsel, Managing Director,
and Senior Vice President of
FMR Corp.
Thomas R. Williams President of The Wales Group, 1989
(71) Inc. (management and
financial advisory
services). Prior to retiring
in 1987, Mr. Williams served
as Chairman of the Board of
First Wachovia Corporation
(bank holding company), and
Chairman and Chief Executive
Officer of The First
National Bank of Atlanta and
First Atlanta Corporation
(bank holding company). He
is currently a Director of
ConAgra, Inc. (agricultural
products), Georgia Power
Company (electric utility),
National Life Insurance
Company of Vermont, American
Software, Inc., and
AppleSouth, Inc.
(restaurants, 1992).
</TABLE>
** Except as otherwise indicated, each individual has held the office
shown or other offices in the same company for the last five years.
As of May 31 , 1999, the nominees, Trustees and officers of the
Trust and the funds owned, in the aggregate, less than 1% of the
funds' outstanding shares.
If elected, the Trustees will hold office without limit in time
except that (a) any Trustee may resign; (b) any Trustee may be removed
by written instrument, signed by at least two-thirds of the number of
Trustees prior to such removal; (c) any Trustee who requests to be
retired or who has become incapacitated by illness or injury may be
retired by written instrument signed by a majority of the other
Trustees; and (d) a Trustee may be removed at any Special Meeting of
shareholders by a two-thirds vote of the outstanding voting securities
of the trust. In case a vacancy shall for any reason exist, the
remaining Trustees will fill such vacancy by appointing another
Trustee, so long as, immediately after such appointment, at least
two-thirds of the Trustees have been elected by shareholders. If, at
any time, less than a majority of the Trustees holding office has been
elected by the shareholders, the Trustees then in office will promptly
call a shareholders' meeting for the purpose of electing a Board of
Trustees. Otherwise, there will normally be no meeting of shareholders
for the purpose of electing Trustees.
The trust's Board, which is currently composed of three interested
and nine non-interested Trustees, met eleven times during the twelve
months ended April 30, 1999. It is expected that the Trustees will
meet at least ten times a year at regularly scheduled meetings.
The trust's Audit Committee is composed entirely of Trustees who are
not interested persons of the trust, FMR or its affiliates and
normally meets four times a year, or as required, prior to meetings of
the Board of Trustees. Currently, Messrs. Kirk (Chairman), Gates and
McCoy, and Mrs. Davis are members of the Committee. The committee
oversees and monitors the trust's internal control structure, its
auditing function and its financial reporting process, including the
resolution of material reporting issues. The committee recommends to
the Board of Trustees the appointment of auditors for the trust. It
reviews audit plans, fees and other material arrangements in respect
of the engagement of auditors, including non-audit services to be
performed. It reviews the qualifications of key personnel involved in
the foregoing activities. The committee plays an oversight role in
respect of the trust's investment compliance procedures and the code
of ethics. During the twelve months ended April 30, 1999, the
committee held 6 meetings.
The trust's Nominating and Administration Committee is currently
composed of Messrs. McDonough (Chairman), Jones, Mann and Williams.
The committee members confer periodically and hold meetings as
required. The committee makes nominations for independent trustees,
and for membership on committees. The committee periodically reviews
procedures and policies of the Board of Trustees and committees. It
acts as the administrative committee under the Retirement Plan for
non-interested trustees who retired prior to December 30, 1996. It
monitors the performance of legal counsel employed by the trust and
the independent trustees. The committee in the first instance monitors
compliance with, and acts as the administrator of the provisions of
the code of ethics applicable to the independent trustees. During the
twelve months ended April 30, 1999, the committee held 1 meeting. The
Nominating and Administration Committee will consider nominees
recommended by shareholders. Recommendations should be submitted to
the committee in care of the Secretary of the Trust. The trust does
not have a compensation committee; such matters are considered by the
Nominating and Administration Committee.
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 April 30, 1999,
or calendar year ended December 31, 1998, as applicable.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
COMPENSATION TABLE
AGGREGATE
COMPENSATION
FROM A Edward C. Johnson 3d** J. Gary Burkhead** Ralph F. Cox Phyllis Burke Davis Robert M. Gates
FUND
Fidelity Small Cap
Stock FundB $ 0 $ 0 $ 191 $ 188 $ 192
Fidelity Mid-Cap
Stock FundB $ 0 $ 0 $ 573 $ 562 $ 574
Fidelity Large Cap
Stock FundB $ 0 $ 0 $ 81 $ 80 $ 81
Fidelity Small Cap
SelectorB $ 0 $ 0 $ 245 $ 241 $ 246
Fidelity Intermediate
Bond $ 0 $ 0 $ 1,114 $ 1,091 $ 1,113
FundB,C,D
TOTAL COMPENSATION
FROM THE $ 0 $ 0 $ 223,500 $ 220,500 $ 223,500
FUND COMPLEX*,A
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
AGGREGATE COMPENSATION FROM A E. Bradley Jones Donald J. Kirk
FUND
Fidelity Small Cap Stock FundB $ 190 $ 193
Fidelity Mid-Cap Stock FundB $ 569 $ 578
Fidelity Large Cap Stock FundB $ 81 $ 82
Fidelity Small Cap SelectorB $ 244 $ 248
Fidelity Intermediate Bond $ 1,105 $ 1,122
FundB,C,D
TOTAL COMPENSATION FROM THE $222,000 $226,500
FUND COMPLEX*,A
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
AGGREGATE COMPENSATION
FROM A Peter S. Lynch** William O. McCoy Gerald C. McDonough Marvin L. Mann Robert C. Pozen**
FUND
Fidelity Small Cap
Stock FundB $ 0 $ 192 $ 235 $ 192 $ 0
Fidelity Mid-Cap
Stock FundB $ 0 $ 574 $ 702 $ 574 $ 0
Fidelity Large Cap
Stock FundB $ 0 $ 81 $ 100 $ 81 $ 0
Fidelity Small Cap
SelectorB $ 0 $ 246 $ 301 $ 246 $ 0
Fidelity Intermediate
Bond $ 0 $ 1,113 $ 1,361 $ 1,113 $ 0
FundB,C,D
TOTAL COMPENSATION
FROM THE $ 0 $ 223,500 $ 273,500 $ 220,500 $ 0
FUND COMPLEX*,A
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
AGGREGATE COMPENSATION FROM A Thomas R. Williams
FUND
Fidelity Small Cap Stock FundB $ 192
Fidelity Mid-Cap Stock FundB $ 574
Fidelity Large Cap Stock FundB $ 81
Fidelity Small Cap SelectorB $ 246
Fidelity Intermediate Bond $ 1,113
FundB,C,D
TOTAL COMPENSATION FROM THE $ 223,500
FUND COMPLEX*,A
</TABLE>
* Information is for the calendar year ended December 31, 1998 for 237
funds in the complex.
** Interested Trustees of the funds and Mr. Burkhead are compensated
by FMR.
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; William O. McCoy, $55,039; Marvin L.
Mann, $55,039; and Thomas R. Williams, $63,433.
B Compensation figures include cash, and may include amounts required
to be deferred and amounts deferred at the election of Trustees.
C The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $500; Phyllis Burke Davis, $500; Robert M. Gates, $500; E.
Bradley Jones, $500; Donald J. Kirk, $500; William O. McCoy, $500;
Gerald C. McDonough, $584; Marvin L. Mann, $500; and Thomas R.
Williams, $500.
D For the fiscal year ended April 30, 1999, certain of the
non-interested Trustees' aggregate compensation from the fund includes
accrued voluntary deferred compensation as follows: Ralph F. Cox,
$423; William O. McCoy, $423; Marvin L. Mann, $290; Thomas R.
Williams, $423.
Under a deferred compensation plan adopted in September 1995 and
amended in November 1996 (the Plan), non-interested Trustees must
defer receipt of a portion of, and may elect to defer receipt of an
additional portion of, their annual fees. Amounts deferred under the
Plan are subject to vesting and are treated as though equivalent
dollar amounts had been invested in shares of a cross-section of
Fidelity funds including funds in each major investment discipline and
representing a majority of Fidelity's assets under management (the
Reference Funds). The amounts ultimately received by the Trustees
under the Plan will be directly linked to the investment performance
of the Reference Funds. Deferral of fees in accordance with the Plan
will have a negligible effect on a fund's assets, liabilities, and net
income per share, and will not obligate a fund to retain the services
of any Trustee or to pay any particular level of compensation to the
Trustee. A fund may invest in the Reference Funds under the Plan
without shareholder approval.
2. TO RATIFY THE SELECTION OF DELOITTE & TOUCHE LLP OR
PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT ACCOUNTANTS OF THE FUNDS.
By a vote of the non-interested Trustees, the firms of Deloitte &
Touche LLP (Fidelity Small Cap Stock Fund, Fidelity Large Cap Stock
Fund, Fidelity Small Cap Selector, and Fidelity Intermediate Bond
Fund) and PricewaterhouseCoopers LLP (Fidelity Mid-Cap Stock Fund)
have been selected as independent accountants for the funds to sign or
certify any financial statements of the funds required by any law or
regulation to be certified by an independent accountant and filed with
the Securities and Exchange Commission (SEC) or any state. Pursuant to
the 1940 Act, such selection requires the ratification of
shareholders. In addition, as required by the 1940 Act, the vote of
the Trustees is subject to the right of each fund, by vote of a
majority of its outstanding voting securities at any meeting called
for the purpose of voting on such action, to terminate such employment
without penalty. Each of Deloitte & Touche LLP and
PricewaterhouseCoopers LLP has advised the funds that, to the best of
its knowledge and belief, as of the record date, no professional of
either Deloitte & Touche LLP or PricewaterhouseCoopers LLP had any
direct or material indirect ownership interest in the respective funds
inconsistent with independence standards pertaining to
accountants.
For each fund's fiscal years ended April 30, 1997 (except Fidelity
Small Cap Stock Fund, which commenced operations on March 12, 1998)
and April 30, 1998, the firm of Coopers & Lybrand L.L.P. acted as the
fund's independent accountants. Effective July 1, 1998, Coopers &
Lybrand L.L.P. and Price Waterhouse LLP combined their businesses and
practices and began doing business as PricewaterhouseCoopers LLP.
Effective February 18, 1999, the non-interested Trustees selected
the firm of Deloitte & Touche LLP as the independent accountants for
Fidelity Small Cap Stock Fund, Fidelity Large Cap Stock Fund, Fidelity
Small Cap Selector, and Fidelity Intermediate Bond Fund beginning with
each fund's fiscal year ended April 30, 1999, upon the recommendation
of the funds' Audit Committee. For Fidelity Mid-Cap Stock Fund's
fiscal year ended April 30, 1999, the firm of PricewaterhouseCoopers
LLP acted as the fund's independent accountants.
The independent accountants' audit reports for the fiscal years ended
April 30, 1997, 1998 and 1999 did not contain an adverse opinion or
disclaimer of opinion, nor were such reports qualified or modified as
to uncertainty, audit scope, or accounting principles. Further, there
were no disagreements between the funds and the independent
accountants on accounting principles or practices, financial statement
disclosures, or audit scope or procedures, which if not resolved to
the satisfaction of the independent accountants would have caused them
to make reference to the subject matter of the disagreements in
connection with their reports on the financial statements for such
years.
The independent accountants examine annual financial statements for
the funds and provide other audit and tax-related services. In
recommending the selection of the funds' accountants, the Audit
Committee reviewed the nature and scope of the services to be provided
(including non-audit services) and whether the performance of such
services would affect the accountants' independence. Representatives
of Deloitte & Touche LLP and PricewaterhouseCoopers LLP are not
expected to be present at the Meeting, but have been given the
opportunity to make a statement if they so desire and will be
available should any matter arise requiring their presence.
3. TO AUTHORIZE THE TRUSTEES TO ADOPT AN AMENDED AND RESTATED
DECLARATION OF TRUST.
The Board of Trustees has approved and recommends that the
shareholders of the trust authorize them to adopt and execute an
Amended and Restated Declaration of Trust for the trust and the funds
of the trust in the form attached to this Proxy Statement as Exhibit 1
(New Declaration of Trust). The attached New Declaration of Trust has
been marked to show changes from the trust's existing Declaration of
Trust (Current Declaration of Trust). The New Declaration of Trust is
a more modern form of trust instrument for a Massachusetts business
trust, and, going forward, will be used as the standard Declaration of
Trust for all new Fidelity Massachusetts business trusts.
The New Declaration of Trust gives the Trustees more flexibility and,
subject to applicable requirements of the 1940 Act and Massachusetts
law, broader authority to act. This increased flexibility may allow
the Trustees to react more quickly to changes in competitive and
regulatory conditions and, as a consequence, may allow the funds to
operate in a more efficient and economical manner. ADOPTION OF THE NEW
DECLARATION OF TRUST WILL NOT ALTER IN ANY WAY THE TRUSTEES' EXISTING
FIDUCIARY OBLIGATIONS TO ACT WITH DUE CARE AND IN THE SHAREHOLDERS'
INTERESTS. BEFORE UTILIZING ANY NEW FLEXIBILITY THAT THE NEW
DECLARATION OF TRUST MAY AFFORD, THE TRUSTEES MUST FIRST CONSIDER THE
SHAREHOLDERS' INTERESTS AND THEN ACT IN ACCORDANCE WITH SUCH
INTERESTS.
Adoption of the New Declaration of Trust will NOT result in any
changes in the funds' Trustees or officers or in the investment
policies and shareholder services described in the funds' current
prospectuses.
Generally, a majority of the Trustees may amend the Current
Declaration of Trust when authorized by a "majority of the outstanding
voting securities" (as defined in the 1940 Act) of the trust. On
October 16, 1997, the Trustees approved the form of the New
Declaration of Trust. On December 18, 1997, the Board approved several
additional changes to the form of the New Declaration of Trust, which
changes have been incorporated into the form attached to this Proxy
Statement. On May 20, 1999, the Board authorized the submission of the
New Declaration of Trust to the trust's shareholders for their
authorization at this Meeting.
The New Declaration of Trust amends the Current Declaration of Trust
in a number of significant ways. The following discussion summarizes
some of the more significant amendments to the Current Declaration of
Trust effected by the New Declaration of Trust.
IN ADDITION TO THE CHANGES DESCRIBED BELOW, THERE ARE OTHER
SUBSTANTIVE AND STYLISTIC DIFFERENCES BETWEEN THE NEW DECLARATION OF
TRUST AND THE CURRENT DECLARATION OF TRUST. THE FOLLOWING SUMMARY IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE NEW DECLARATION OF TRUST
ITSELF, WHICH IS ATTACHED AS EXHIBIT 1 TO THIS PROXY STATEMENT.
SIGNIFICANT CHANGES EFFECTED BY THE NEW DECLARATION OF TRUST.
REORGANIZATION OR TERMINATION OF THE TRUST OR ITS SERIES. Unlike the
Current Declaration of Trust, the New Declaration of Trust generally
permits the Trustees, subject to applicable Federal and state law, to
reorganize or terminate the trust or any of its series. The Current
Declaration of Trust requires shareholder approval in order to
reorganize or terminate the trust or any of its series.
Under certain circumstances, it may not be in the shareholders'
interest to require a shareholder meeting to permit the trust or a
fund to reorganize into another entity. For example, in order to
reduce the cost and scope of state regulatory constraints or to take
advantage of a more favorable tax treatment offered by another state,
the Trustees may determine that it would be in the shareholders'
interests to reorganize a fund to domicile it in another state or to
change its legal form. Under the Current Declaration of Trust, the
Trustees cannot effectuate such a potentially beneficial
reorganization without first conducting a shareholder meeting and
incurring the attendant costs and delays. In contrast, the New
Declaration of Trust gives the Trustees the flexibility to reorganize
the trust or any of its series and achieve potential shareholder
benefits without incurring the delay and potential costs of a proxy
solicitation. Such flexibility should help to assure that the trust
and its funds operate under the most appropriate form of organization.
Similarly, under certain circumstances, it may not be in the
shareholders' interest to require a shareholder meeting to permit the
Trustees to terminate a fund. For example, a fund may have
insufficient assets to invest effectively or excessively high expense
levels due to operational needs. Under such circumstances, absent
viable alternatives, the Trustees may determine that terminating the
fund is in the shareholders' interest and the only appropriate course
of action. The process of obtaining shareholder approval of the fund's
termination may, however, make it more difficult to complete the
fund's liquidation and termination and, in general, will increase the
costs associated with the termination. In such a case, it may be in
the shareholders' interest to permit fund termination without
incurring the costs and delays of a shareholder meeting.
As discussed above, before allowing a trust or fund reorganization or
termination to proceed without shareholder approval, the Trustees have
a fiduciary responsibility to first determine that the proposed
transaction is in the shareholders' interest. Any exercise of the
Trustees' increased authority under the New Declaration of Trust is
also subject to any applicable requirements of the 1940 Act and
Massachusetts law. Of course, in all cases, the New Declaration of
Trust would require that shareholders receive written notification of
any proposed transaction.
The New Declaration of Trust does NOT give the Trustees the authority
to merge a fund with another operating mutual fund or sell all of a
fund's assets to another operating mutual fund without first seeking
shareholder approval. Under the New Declaration of Trust, shareholder
approval is still required for these transactions.
FUTURE AMENDMENTS OF THE DECLARATION OF TRUST. The New Declaration of
Trust permits the Trustees, with certain exceptions, to amend the
Declaration of Trust without shareholder approval. Under the New
Declaration of Trust, shareholders generally have the right to vote on
any amendment affecting their right to vote, on any amendment altering
the maximum number of permitted Trustees, on any amendment affecting
the New Declaration of Trust's amendment provisions, on any amendment
required by law or the trust's registration statement, and on any
matter submitted to shareholders by the Trustees. The Current
Declaration of Trust, on the other hand, generally gives shareholders
the exclusive power to amend the Declaration of Trust. By allowing
amendment of the Declaration of Trust without shareholder approval,
the New Declaration of Trust gives the Trustees the necessary
authority to react quickly to future contingencies. As mentioned
above, such increased authority remains subordinate to the Trustees'
continuing fiduciary obligations to act with due care and in the
shareholders' interest.
OTHER CHANGES EFFECTED BY THE NEW DECLARATION OF TRUST.
In addition to the significant changes above, the New Declaration of
Trust modifies the Current Declaration of Trust in a number of
important ways, including the following:
1. The New Declaration of Trust modifies the Current Declaration of
Trust to allow FMR and the trust, on behalf of each fund, to amend the
fund's respective Management Contract subject to the provisions of
Section 15 of the 1940 Act, as modified or interpreted by the SEC. In
contrast, the Current Declaration of Trust explicitly requires the
vote of a majority of the outstanding voting securities of a fund to
authorize all such amendments. A corresponding change is also proposed
for certain of the funds' Management Contracts. For more information
on this topic generally, see "Modification of Management Contract
Amendment Provisions" on pages 29 and 32.
2. The New Declaration of Trust clarifies that the Trustees may
impose other fees (for example, purchase fees) in addition to sales
charges upon investment in a fund and clarifies that deferred sales
charges and other fees (for example, redemption fees) may be imposed
upon redemption of a fund's shares.
3. The New Declaration of Trust confirms and clarifies various
existing Trustee powers. For example, the New Declaration of Trust
clarifies that the Trustees, in addition to banks and trust companies,
may employ as fund custodians companies that are members of a national
securities exchange or other entities permitted under the 1940 Act;
delegate authority to investment advisers and other agents; adopt and
offer dividend reinvestment and related plans; operate and carry on
the business of an investment company; and interpret the investment
policies, practices, and limitations of any fund.
4. The New Declaration of Trust clarifies that no shareholder of a
trust series shall have a claim on the assets of another series and
further clarifies that, by virtue of investing in a fund, a
shareholder is deemed to have assented to and agreed to be bound by
the terms of the New Declaration of Trust.
5. The New Declaration of Trust deletes various technical and/or
antiquated requirements from the Current Declaration of Trust,
including existing requirements that a Trustee vacancy be deemed to
occur when a Trustee is absent from his or her state of residence,
that Trustee vacancies must be filled within six calendar months, and
that portfolio securities be held pursuant to safeguards prescribed by
usual Massachusetts practice.
6. As a general matter, the New Declaration of Trust modifies the
Current Declaration of Trust to incorporate appropriate references to
classes of shares.
7. Lastly, the New Declaration of Trust generally expands various
1940 Act defined terms to encompass SEC modifications and
interpretations. Specific references to discrete sections of the 1940
Act that are contained in the New Declaration of Trust have likewise
been expanded to include SEC modifications and interpretations.
CONCLUSION. The Board of Trustees has concluded that the proposed
adoption of the New Declaration of Trust is in the best interests of
the trust's shareholders. Accordingly, the Trustees unanimously
recommend that the shareholders vote FOR the proposal to authorize
them to adopt and execute the New Declaration of Trust. If the
proposal is not approved, the Current Declaration of Trust will remain
unchanged and in effect.
4. TO APPROVE AMENDED MANAGEMENT CONTRACTS FOR FIDELITY LARGE CAP
STOCK FUND AND FIDELITY SMALL CAP SELECTOR.
The Board of Trustees, including the Trustees who are not "interested
persons" of the Trust or of FMR (the Independent Trustees), has
approved, and recommends that shareholders of each fund approve, a
proposal to adopt an amended management contract with FMR (the Amended
Contract). Each fund's Amended Contract modifies several aspects of
the management fee that FMR receives from the fund for managing its
investments and business affairs. In addition, each fund's Amended
Contract allows FMR and the Trust, on behalf of the fund, to modify
the Management Contract subject to the requirements of the 1940 Act.
Each fund's existing Management Contract currently requires the vote
of a majority of the fund's outstanding voting securities to authorize
all amendments. See "Modification of Management Contract Amendment
Provisions" on page 29 for more details. (For information on FMR, see
the section entitled "Activities and Management of FMR," on page .)
CURRENT MANAGEMENT FEE. Each fund's management fee is calculated and
paid monthly, and is normally expressed as an annual percentage of the
fund's average net assets. Each fund's fee has two components: a Basic
Fee and a Performance Adjustment. The Basic Fee is an annual
percentage of a fund's average net assets for the current month. The
Basic Fee rate is the sum of a Group Fee rate, which declines as FMR's
fund assets under management increase, and a fixed individual fund fee
rate of 0.30% for Fidelity Large Cap Stock Fund and 0.35% for Fidelity
Small Cap Selector. The Basic Fee rate for Fidelity Large Cap Stock
Fund's fiscal year ended April 30, 1999 (not including the fee
amendments discussed below) was 0.5923%. The Basic Fee rate for
Fidelity Small Cap Selector's fiscal year ended April 30, 1999 (not
including the fee amendments discussed below) was 0.6434%.
Each fund's Performance Adjustment is a positive or negative dollar
amount based on the fund's performance and assets for the most recent
36 months. If Fidelity Large Cap Stock Fund outperforms the Standard &
Poor's 500(registered trademark) Index (its Index) over 36 months, FMR
receives a positive Performance Adjustment, and if the fund
underperforms its Index, its management fee is reduced by a negative
Performance Adjustment. Likewise, if Fidelity Small Cap Selector
outperforms the Russell 2000(registered trademark) Index (its Index)
over 36 months, FMR receives a positive Performance Adjustment, and if
the fund underperforms its Index, its management fee is reduced by a
negative Performance Adjustment. Each fund's Performance Adjustment is
an annual percentage of the fund's average net assets over the
36-month performance period. Each fund's Performance Adjustment rate
is 0.02% for each percentage point of outperformance or
underperformance, subject to a maximum of 0.20% if the fund
outperforms or underperforms its Index by more than ten percentage
points. The performance of each fund and the performance of its Index
are rounded to the nearest whole percentage point for purposes of the
calculation.
PROPOSED MANAGEMENT FEE AMENDMENTS. Each fund's Amended Contract
would (1) reduce the Group Fee rate further if FMR's assets under
management remain over $426 billion, (2) modify the Performance
Adjustment calculation to round the performance of the fund and its
Index to the nearest 0.01%, rather than the nearest 1.00%, and (3)
allow FMR and the Trust, on behalf of the fund, to modify the
Management Contract subject to the requirements of the 1940 Act. Each
fund's existing Management Contract currently requires the vote of a
majority of the fund's outstanding voting securities to authorize all
amendments. See "Modification of Management Contract Amendment
Provisions" on page 30 for more details.
IMPACT OF GROUP FEE RATE REDUCTION. At FMR's current level of assets
under management (approximately $748 billion as of April 1999), the
changes to the Group Fee rate reduce the management fee. FMR has
voluntarily implemented the Group Fee reductions pending shareholder
approval, and each fund has paid lower management fees as a result.
For Fidelity Large Cap Stock Fund's fiscal year ended April 30, 1999,
the management fee using the proposed Group Fee reductions (including
the Performance Adjustment) was 0.5353% of the fund's average net
assets. The Group Fee reductions lowered Fidelity Large Cap Stock
Fund's management fee rate by 0.0058% compared to the rate FMR was
entitled to receive under the Present Contract, 0.5411%. For Fidelity
Small Cap Selector's fiscal year ended April 30, 1999, the management
fee using the proposed Group Fee reductions (including the Performance
Adjustment) was 0.5286% of the fund's average net assets. The Group
Fee reductions lowered Fidelity Small Cap Selector's management fee
rate by 0.0053% compared to the rate FMR was entitled to receive under
the Present Contract, 0.5339%.
IMPACT OF PERFORMANCE ADJUSTMENT CHANGES. The more precise rounding
method for the Performance Adjustment would have increased Fidelity
Large Cap Stock Fund's management fee rate for the fiscal year ended
April 30, 1999 by 0.0004% of the fund's average net assets for the
year. The more precise rounding method for the Performance Adjustment
would have decreased Fidelity Small Cap Selector's management fee rate
for the fiscal year ended April 30, 1999 by 0.0013% of the fund's
average net assets for the year.
COMBINED EFFECT OF FEE CHANGES. In the fiscal year ended April 30,
1999, the Group Fee reductions and the changes to the Performance
Adjustment would have resulted in a 0.0054% reduction in Fidelity
Large Cap Stock Fund's total management fee. In the fiscal year ended
April 30, 1999, the Group Fee reductions and the changes to the
Performance Adjustment would have resulted in a 0.0066% reduction in
Fidelity Small Cap Selector's total management fee. The future impact
will depend on many different factors, and may represent an increase
or decrease from the management fee under each fund's Present
Contract. The Group Fee rate reductions will either reduce the
management fee or leave it unchanged, depending on the level of FMR's
assets under management. Calculating performance to the nearest 0.01%
may increase or decrease the Performance Adjustment, depending on
whether performance would have been rounded up or down.
Copies of the forms of Amended Contracts, marked to indicate the
proposed amendments, are supplied as Exhibit 2 on page (for Fidelity
Large Cap Stock Fund) and Exhibit 3 on page (for Fidelity Small Cap
Selector). Except for the modifications discussed above, each fund's
Amended Contract is substantially identical to the fund's Present
Contract with FMR. (For a detailed discussion of each fund's Present
Contract, refer to the section entitled "Present Management
Contracts," on page .) If approved by a fund's shareholders, the
fund's Amended Contract will take effect on the first day of the first
month following approval and will remain in effect through July 31,
2000, and thereafter, but only as long as its continuance is approved
at least annually by (i) the vote, cast in person at a meeting called
for the purpose, of a majority of the Independent Trustees and (ii)
the vote of either a majority of the Trustees or a majority of the
outstanding shares of the fund. If a fund's Amended Contract is not
approved, the fund's Present Contract will continue in effect through
July 31, 2000, and thereafter only as long as its continuance is
approved at least annually as described above.
MODIFICATION TO GROUP FEE RATE. The Group Fee rate varies based on
the aggregate net assets of all registered investment companies having
management contracts with FMR (group assets). As group assets
increase, the Group Fee rate declines. Each fund's Amended Contract
would not change the Group Fee rate if group assets are $426 billion
or less. Above $426 billion in group assets, each fund's Group Fee
rate declines under both the Present and the Amended Contracts, but
under the Amended Contract, it declines faster.
Each fund's Group Fee rate is calculated according to a graduated
schedule providing for different rates for different levels of group
assets. The rate at which the Group Fee rate declines is determined by
fee "breakpoints" that provide for lower fee rates when group assets
increase. Each fund's Amended Contract would add four new, lower
breakpoints applicable when group assets are above $426 billion, as
illustrated in the following table. (For an explanation of how the
Group Fee rate is used to calculate the management fee see the section
entitled "Present Management Contracts" on page .)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
GROUP FEE RATE BREAKPOINTS
Average Group Assets ($ Present Contract Average Group Assets ($ Amended Contract
billions) billions)
Over 390 .2700% 390 - 426 .2700%
426 - 462 .2650%
462 - 498 .2600%
498 - 534 .2550%
Over 534 .2500%
</TABLE>
The resulting Group Fee rates at various levels of group assets are
indicated below. (For an explanation of how the breakpoints are
combined to arrive at the Group Fee rate, see "Present Management
Contracts" on page .)
EFFECTIVE GROUP FEE RATES
Group Net Assets ($ billions) Present Contract Amended Contract
150 .3371% .3371%
200 .3284% .3284%
250 .3219% .3219%
300 .3163% .3163%
350 .3113% .3113%
400 .3067% .3067%
450 .3026% .3024%
500 .2994% .2982%
550 .2967% .2942%
FMR voluntarily adopted various additional Group Fee breakpoints for
group assets over $390 billion in 1996. Although the new fee
breakpoints have not been added to a fund's management contract
pending shareholder approval, FMR has voluntarily based its management
fee on the Group Fee schedule contained in the Amended Contract since
January 1, 1996. Group assets for April 1999 were approximately $748
billion.
MODIFICATIONS TO PERFORMANCE ADJUSTMENT - ROUNDING METHOD. Each
fund's annual Performance Adjustment rate equals 0.02% for each
percentage point by which the fund outperforms or underperforms its
Index over a 36-month performance period. Under each fund's Present
Contract, the investment performance of both the fund and its Index
are rounded to the nearest full percentage point (for example,
15.5123% is rounded to 16%). Rounding to full percentage points
results in the Performance Adjustment rate being applied in 0.02%
increments. In comparison, under each fund's Amended Contract, the
investment performance of both the fund and its Index are rounded to
the nearest 0.01% (using the prior example, 15.5123% is rounded to
15.51%) prior to calculating the difference in investment performance.
The more precise rounding method results in a more accurate measure of
the difference in investment performance and allows for the
Performance Adjustment to be applied in 0.0002% increments. This
reduces the chance of minor changes in performance resulting in
significant changes to the Performance Adjustment, and ultimately each
fund's management fee.
During the fiscal year ended April 30, 1999, using the more precise
rounding methodology, the aggregate impact was a 0.0004% increase in
Fidelity Large Cap Stock Fund's management fee. During the fiscal year
ended April 30, 1999, using the more precise rounding methodology, the
aggregate impact was a 0.0013% decrease in Fidelity Small Cap
Selector's management fee.
COMPARISON OF MANAGEMENT FEES. The following tables compare each
fund's management fee as calculated under the terms of the Present
Contract (not including FMR's voluntary implementation of the Group
Fee reductions) for the fiscal year ended April 30, 1999, to the
management fee each fund would have incurred if the Amended Contract
had been in effect. Each fund's management fees are expressed in
dollars and as percentages of the fund's average net assets for the
year.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FIDELITY LARGE CAP STOCK FUND
Present Contract Amended Contract Difference
$ % $ % $ %
Basic Fee 1,695,037 .5923 1,678,443 .5865 (16,594) (.0058)
Performance Adjustment (146,444) (.0512) (145,349) (.0508) 1,095 .0004
Total Management Fee 1,548,593 .5411 1,533,094 .5357 (15,499) (.0054)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FIDELITY SMALL CAP SELECTOR
Present Contract Amended Contract Difference
$ % $ % $ %
Basic Fee 4,528,526 .6434 4,491,378 .6381 (37,148) (.0053)
Performance Adjustment (770,621) (.1095) (779,916) (.1108) (9,295) (.0013)
Total Management Fee 3,757,905 .5339 3,711,462 .5273 (46,443) (.0066)
</TABLE>
The following tables provide data concerning each fund's management
fees and expenses as a percentage of its average net assets for the
fiscal year ended April 30, 1999 under the Present Contract (not
including FMR's voluntary implementation of the Group Fee reductions)
and if the Amended Contract had been in effect during the same period.
The following figures for each fund are based on historical expenses
adjusted to reflect current fees of the fund and are calculated as a
percentage of the fund's average net assets.
COMPARATIVE FEE TABLES
Annual Fund Operating Expenses (as a percentage of average net assets)
FIDELITY LARGE CAP STOCK FUND
Present Contract Amended Contract
Management Fee .5411% .5357%
12b-1 Fee none none
Other Expenses .3900% .3900%
Total Fund Operating Expenses .9311% .9257%
FIDELITY SMALL CAP SELECTOR
Present Contract Amended Contract
Management Fee .5339% .5273%
12b-1 Fee none none
Other Expenses .3564% .3564%
Total Fund Operating Expenses .8903% .8837%
A portion of the brokerage commissions that each fund pays is used to
reduce that fund's expenses. Each fund has entered into arrangements
with its custodian and transfer agent whereby credits realized as a
result of uninvested cash balances are used to reduce custodian and
transfer agent expenses. Including these reductions, the total
operating expenses presented in the table would have been 0.9061%
under the Present Contract and 0.9007% under the Amended Contract for
Fidelity Large Cap Stock Fund, and 0.8536% under the Present Contract
and 0.8470% under the Amended Contract for Fidelity Small Cap
Selector.
EXAMPLE: The following illustrates the expenses on a $10,000
investment under the fees and expenses stated above, assuming (1) 5%
annual return and (2) redemption at the end of each time period:
FIDELITY LARGE CAP STOCK FUND
1 Year 3 Years 5 Years 10 Years
Present Contract $ 95 $ 296 $ 515 $ 1,143
Amended Contract $ 94 $ 295 $ 512 $ 1,138
FIDELITY SMALL CAP SELECTOR
1 Year 3 Years 5 Years 10 Years
Present Contract $ 91 $ 284 $ 493 $ 1,096
Amended Contract $ 90 $ 282 $ 490 $ 1,089
The purpose of this example and the tables is to assist investors in
understanding the various costs and expenses of investing in shares of
the funds. The example above should not be considered a representation
of past or future expenses of the funds. Actual expenses may vary from
year to year and may be higher or lower than those shown above.
MODIFICATION OF MANAGEMENT CONTRACT AMENDMENT PROVISIONS. Each fund's
Amended Contract allows FMR and the Trust, on behalf of the fund, to
amend the Management Contract subject to the provisions of Section 15
of the 1940 Act, as modified or interpreted by the Securities and
Exchange Commission. In contrast, each fund's Present Contract
explicitly requires the vote of a majority of the outstanding voting
securities of the fund to authorize all amendments. Generally, the
proposed modification to each fund's Present Contract's amendment
provisions will allow FMR and the Trust, on behalf of the fund, to
amend the Management Contract without shareholder vote IF THE 1940 ACT
PERMITS THEM TO DO SO. For example, under current interpretations of
Section 15 of the 1940 Act, the Amended Contract would give FMR and
the Trust the ability to amend the Management Contract to immediately
reflect a management fee decrease without the delay of having to first
conduct a proxy solicitation. In short, the proposed modification
gives FMR and the Trust added flexibility to amend the Management
Contract subject to 1940 Act constraints. Of course, any future
amendments to each fund's Management Contract would require the
approval of the fund's Board of Trustees.
MATTERS CONSIDERED BY THE BOARD
The mutual funds for which the members of the Board of Trustees serve
as Trustees are referred to herein as the "Fidelity funds." The Board
of Trustees meets eleven times a year. The Board of Trustees,
including the Independent Trustees, believe that matters bearing on
the appropriateness of each fund's management fees are considered at
most, if not all, of their meetings. While the full Board of Trustees
or the Independent Trustees, as appropriate, act on all major matters,
a significant portion of the activities of the Board of Trustees
(including certain of those described herein) is conducted through
committees. The Independent Trustees meet frequently in executive
session and are advised by independent legal counsel selected by the
Independent Trustees.
The proposal to present the Amended Contracts to shareholders was
approved by the Board of Trustees of each fund, including all of the
Independent Trustees, on May 20, 1999. The Board of Trustees
considered and approved the modifications to the Group Fee Rate
schedule during the two - month period from November to December
1995, and the modifications to the Performance Adjustment calculation
during the two-month period from June to July 1995. The Board
of Trustees received materials relating to the Amended Contracts in
advance of the meeting at which the Amended Contracts were considered,
and had the opportunity to ask questions and request further
information in connection with such consideration.
INFORMATION RECEIVED BY THE INDEPENDENT TRUSTEES. In connection with
their monthly meetings, the Trustees received materials specifically
relating to the Amended Contracts. These materials included: (i)
information on the investment performance of each fund, a peer group
of funds and an appropriate index or combination of indices, (ii)
sales and redemption data in respect of each fund, and (iii) the
economic outlook and the general investment outlook in the markets in
which each fund invests. The Board of Trustees and the Independent
Trustees also consider periodically other material facts such as (1)
FMR's results and financial condition, (2) arrangements in respect of
the distribution of each fund's shares, (3) the procedures employed to
determine the value of each fund's assets, (4) the allocation of each
fund's brokerage, if any, including allocations to brokers affiliated
with FMR and the use of "soft" commission dollars to pay fund expenses
and to pay for research and other similar services, (5) FMR's
management of the relationships with each fund's custodian and
subcustodians, (6) the resources devoted to and the record of
compliance with each fund's investment policies and restrictions and
with policies on personal securities transactions, and (7) the nature,
cost, and character of non-investment management services provided by
FMR and its affiliates.
In response to questions raised by the Independent Trustees,
additional information was furnished by FMR including, among other
items, information on and analysis of (a) the overall organization of
FMR, (b) the impact of performance adjustments to management fees, (c)
the choice of performance indices and benchmarks, (d) the composition
of peer groups of funds, (e) transfer agency and bookkeeping fees paid
to affiliates of FMR, (f) investment performance, (g) investment
management staffing, (h) the potential for achieving further economies
of scale, (i) operating expenses paid to third parties, and (j) the
information furnished to investors, including each fund's
shareholders.
In considering the Amended Contracts, the Board of Trustees and the
Independent Trustees did not identify any single factor as
all-important or controlling, and the following summary does not
detail all of the matters considered. Matters considered by the Board
of Trustees and the Independent Trustees in connection with their
approval of the Amended Contracts include the following:
BENEFITS TO SHAREHOLDERS. The Board of Trustees and the Independent
Trustees considered the benefit to shareholders of investing in a fund
that is part of a large family of funds offering a variety of
investment disciplines and providing for a large variety of fund and
shareholder services. With regard to the proposed modification to each
fund's Present Contract's amendment provisions, the Board of Trustees
and the Independent Trustees considered the benefit to shareholders of
FMR's and the trust's increased flexibility (within 1940 Act
constraints) to amend the Management Contract without the delays and
potential costs of a proxy solicitation.
INVESTMENT COMPLIANCE AND PERFORMANCE. The Board of Trustees and the
Independent Trustees considered whether each fund has operated within
its investment objective and its record of compliance with its
investment restrictions. They also reviewed monthly each fund's
investment performance as well as the performance of a peer group of
mutual funds, and the performance of an appropriate index or
combination of indices.
FMR'S PERSONNEL AND METHODS. The Board of Trustees and the
Independent Trustees review at least annually the background of each
fund's portfolio manager, and each fund's investment objective and
discipline. The Independent Trustees have also had discussions with
senior management of FMR responsible for investment operations, and
the senior management of Fidelity's equity group. Among other things,
they considered the size, education and experience of FMR's investment
staff, its use of technology, and FMR's approach to recruiting,
training and retaining portfolio managers and other research, advisory
and management personnel.
NATURE AND QUALITY OF OTHER SERVICES. The Board of Trustees and the
Independent Trustees considered the nature, quality, cost and extent
of administrative and shareholder services performed by FMR and
affiliated companies, under both the Present Contracts and the Amended
Contracts and under separate agreements covering transfer agency
functions and pricing, bookkeeping and securities lending services, if
any. The Board of Trustees and the Independent Trustees have also
considered the nature and extent of FMR's supervision of third party
service providers, principally custodians and subcustodians.
EXPENSES. The Board of Trustees and the Independent Trustees
considered each fund's expense ratio and the expense ratios of a peer
group of funds. They also considered the amount and nature of fees
paid by shareholders.
PROFITABILITY. The Board of Trustees and the Independent Trustees
considered the level of FMR's profits in respect of the management of
the Fidelity funds, including each fund. This consideration included
an extensive review of FMR's methodology in allocating its costs to
the management of each fund. The Board of Trustees and the Independent
Trustees have concluded that the cost allocation methodology employed
by FMR has a reasonable basis and is appropriate in light of all of
the circumstances. They considered the profits realized by FMR in
connection with the operation of each fund and whether the amount of
profit is a fair entrepreneurial profit for the management of each
fund. They also considered the profits realized from non-fund
businesses which may benefit from or be related to each fund's
business. The Board of Trustees and the Independent Trustees also
considered FMR's profit margins in comparison with available industry
data, both accounting for and ignoring marketing expenses.
ECONOMIES OF SCALE. The Board of Trustees and the Independent
Trustees considered whether there have been economies of scale in
respect of the management of the Fidelity funds, whether the Fidelity
funds (including the fund) have appropriately benefited from any
economies of scale, and whether there is potential for realization of
any further economies of scale. The Board of Trustees and the
Independent Trustees have concluded that FMR's mutual fund business
presents some limited opportunities to realize economies of scale and
that these economies are being shared between fund shareholders and
FMR in an appropriate manner. The Independent Trustees have also
concluded that the existing group fee structure should be continued
but determined that it would be appropriate to change the group fee
structure as proposed herein.
OTHER BENEFITS TO FMR. The Board of Trustees and the Independent
Trustees also considered the character and amount of fees paid by each
fund and each fund's shareholders for services provided by FMR and its
affiliates, including fees for services like transfer agency, fund
accounting and direct shareholder services. They also considered the
allocation of fund brokerage to brokers affiliated with FMR and the
receipt of sales loads and payments under Rule 12b-1 plans in respect
of certain of the Fidelity funds. The Board of Trustees and the
Independent Trustees also considered the revenues and profitability of
FMR businesses other than its mutual fund business, including FMR's
retail brokerage, correspondent brokerage, capital markets, trust,
investment advisory, pension record keeping, insurance, publishing,
real estate, international research and investment funds, and others.
The Board of Trustees and the Independent Trustees considered the
intangible benefits that accrue to FMR and its affiliates by virtue of
their relationship with each fund.
CONCLUSION. In considering the Amended Contracts, the Board of
Trustees and the Independent Trustees did not identify any single
factor as all-important or controlling, and the foregoing summary does
not detail all of the matters considered. Based on their evaluation of
all material factors and assisted by the advice of independent
counsel, the Trustees concluded (i) that the existing management fee
structure is fair and reasonable and (ii) that the proposed
modifications to the management fee rates, that is the reduction of
the Group Fee Rate schedule and the modifications to the performance
adjustment calculation, and the proposed modification to the Present
Contract's amendment provisions, are in the best interest of each
fund's shareholders . The Board of Trustees, including the
Independent Trustees, voted to approve the submission of each fund's
Amended Contract to shareholders of the fund and recommends that
shareholders of each fund vote FOR its Amended Contract.
5. TO APPROVE AN AMENDED MANAGEMENT CONTRACT FOR FIDELITY INTERMEDIATE
BOND FUND.
The Board of Trustees, including the Trustees who are not "interested
persons" of the Trust or of FMR (the Independent Trustees), has
approved, and recommends that shareholders of the fund approve, a
proposal to adopt an amended management contract with FMR (the Amended
Contract). The Amended Contract modifies the management fee that FMR
receives from the fund to provide for lower fees when FMR's assets
under management exceed certain levels. In addition, the Amended
Contract allows FMR and the Trust, on behalf of the fund, to modify
the Management Contract subject to the requirements of the 1940 Act.
The existing Management Contract (Present Contract) currently requires
the vote of a majority of the fund's outstanding voting securities to
authorize all amendments. See "Modification of Management Contract
Amendment Provisions" on page 36 for more details. THE AMENDED
CONTRACT WILL RESULT IN A MANAGEMENT FEE THAT IS THE SAME AS, OR LOWER
THAN, THE FEE PAYABLE UNDER THE PRESENT CONTRACT. (For information on
FMR, see the section entitled "Activities and Management of FMR" on
page .)
PROPOSED AMENDMENTS TO THE PRESENT MANAGEMENT CONTRACT. A copy of the
form of Amended Contract, marked to indicate the proposed amendments,
is supplied as Exhibit 4 on page . Except for the modifications
discussed above, it is substantially identical to the Present
Contract. (For a detailed discussion of the fund's Present Contract,
refer to the section entitled "Present Management Contracts" beginning
on page .) If approved by shareholders, the Amended Contract will take
effect on October 1, 1999 (or, if later, the first day of the first
month following approval) and will remain in effect through June 30,
2000 and thereafter, but only as long as its continuance is approved
at least annually by (i) the vote, cast in person at a meeting called
for the purpose, of a majority of the Independent Trustees and (ii)
the vote of either a majority of the Trustees or a majority of the
outstanding shares of the fund. If the Amended Contract is not
approved, the Present Contract will continue in effect through June
30, 2000, and thereafter only as long as its continuance is approved
at least annually as above.
The management fee is an annual percentage of the fund's average net
assets (the management fee rate), calculated and paid monthly. The
management fee rate is the sum of two components: a Group Fee Rate,
which varies according to assets under management by FMR, and a fixed
Individual Fund Fee Rate. The Amended Contract modifies the Group Fee
Rate by providing for lower fee rates if FMR's assets under management
remain above $408 billion.
MODIFICATION TO GROUP FEE RATE. The Group Fee Rate varies based upon
the monthly average of the aggregate net assets of all registered
investment companies having management contracts with FMR (assets
under management by FMR). For example, as assets under management by
FMR increase, the Group Fee Rate declines. The Amended Contract would
not change the group fee calculation for assets under management by
FMR of $408 billion or less. Above $408 billion in assets under FMR's
management, the Group Fee Rate declines under both the Present
Contract and the Amended Contract, but under the Amended Contract, it
declines faster. Group Fee Rates that are lower than those contained
in the fund's Present Contract have been voluntarily implemented by
FMR on January 1, 1996.
The Group Fee Rate is calculated according to a graduated schedule
providing for different rates for different levels of assets under
management by FMR. The rate at which the Group Fee Rate declines is
determined by fee "breakpoints" that provide for lower fee rates when
assets increase. The Amended Contract adds four new fee breakpoints
for assets under FMR's management above $408 billion, as illustrated
in the following table. (For an explanation of how the Group Fee Rate
is used to calculate the management fee, see the section entitled
"Present Management Contracts" beginning on page .)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
GROUP FEE RATE BREAKPOINTS
Average Group Assets ($ Present Contract Average Group Assets ($ Amended Contract
billions) billions)
Over 372 .1200% 372 - 408 .1200%
408 - 444 .1175%
444 - 480 .1150%
480 - 516 .1125%
Over 516 .1100%
</TABLE>
The result at various levels of group net assets is illustrated by
the table below.
EFFECTIVE GROUP FEE RATES
Group Net Assets ($ billions) Present Contract* Amended Contract
150 .1736% .1736%
200 .1652% .1652%
250 .1587% .1587%
300 .1536% .1536%
350 .1494% .1494%
400 .1459% .1459%
450 .1430% .1427%
500 .1407% .1399%
550 .1388% .1372%
* Does not reflect voluntary adoption of extended group fee rate
schedules by FMR on January 1, 1996.
Average assets under FMR's management for the month ended April 30,
1999 were approximately $748 billion.
COMPARISON OF MANAGEMENT FEES. For the month ended April 30, 1999,
average assets under management by FMR were approximately $748
billion. The fund's management fee rate under the Amended Contract for
the month ended April 30, 1999, would have been 0.4300%, compared to
0.4338% under the Present Contract. The management fee rate remains
the same under both the Present Contract and the Amended Contract
until assets under FMR's management exceed $408 billion, at which
point the management fee rate under the Amended Contract begins to
decline relative to the Present Contract.
The following chart compares the fund's management fee as calculated
under the terms of the Present Contract for the fiscal year ended
April 30, 1999, to the management fee the fund would have incurred if
the Amended Contract had been in effect.
<TABLE>
<CAPTION>
<S> <C> <C>
Present Contract Management Amended Contract Management Fee Percentage Difference
Fee*
$14,543,000 $14,446,000 (.0067%)
</TABLE>
* Does not reflect voluntary adoption of extended group fee rate
schedules by FMR on January 1, 1996.
MODIFICATION OF MANAGEMENT CONTRACT AMENDMENT PROVISIONS. The Amended
Contract allows FMR and the Trust, on behalf of the fund, to amend the
Management Contract subject to the provisions of Section 15 of the
1940 Act, as modified or interpreted by the Securities and Exchange
Commission. In contrast, the Present Contract explicitly requires the
vote of a majority of the outstanding voting securities of the fund to
authorize all amendments. Generally, the proposed modification to the
Present Contract's amendment provisions will allow FMR and the Trust,
on behalf of the fund, to amend the Management Contract without
shareholder vote IF THE 1940 ACT PERMITS THEM TO DO SO. For example,
under current interpretations of Section 15 of the 1940 Act, the
Amended Contract would give FMR and the Trust the ability to amend the
Management Contract to immediately reflect a management fee decrease
without the delay of having to first conduct a proxy solicitation. In
short, the proposed modification gives FMR and the Trust added
flexibility to amend the Management Contract subject to 1940 Act
constraints. Of course, any future amendments to the Management
Contract would require the approval of the fund's Board of Trustees.
MATTERS CONSIDERED BY THE BOARD
The mutual funds for which the members of the Board of Trustees serve
as Trustees are referred to herein as the "Fidelity funds." The Board
of Trustees meets eleven times a year. The Board of Trustees,
including the Independent Trustees, believe that matters bearing on
the appropriateness of the fund's management fees are considered at
most, if not all, of their meetings. While the full Board of Trustees
or the Independent Trustees, as appropriate, act on all major matters,
a significant portion of the activities of the Board of Trustees
(including certain of those described herein) is conducted
through committees. The Independent Trustees meet frequently in
executive session and are advised by independent legal counsel
selected by the Independent Trustees.
The proposal to present the Amended Contract to shareholders was
approved by the Board of Trustees of the fund, including all of the
Independent Trustees, on May 20, 1999. The Board of Trustees
considered and approved the modifications to the Group Fee Rate
schedule during the two-month period from November to December 1995.
The Board of Trustees received materials relating to the Amended
Contract in advance of the meeting at which the Amended Contract was
considered, and had the opportunity to ask questions and request
further information in connection with such consideration.
INFORMATION RECEIVED BY THE INDEPENDENT TRUSTEES. In connection with
their monthly meetings the Trustees received materials
specifically relating to the Amended Contract. These materials
included (i) information on the investment performance of the fund, a
peer group of funds and an appropriate index or combination of
indices, (ii) sales and redemption data in respect of the fund, and
(iii) the economic outlook and the general investment outlook in the
markets in which the fund invests. The Board of Trustees and the
Independent Trustees also consider periodically other material facts
such as (1) FMR's results and financial condition, (2) arrangements in
respect of the distribution of the fund's shares, (3) the procedures
employed to determine the value of the fund's assets, (4) the
allocation of the fund's brokerage, if any, including allocations to
brokers affiliated with FMR, (5) FMR's management of the relationships
with the fund's custodian and subcustodians, (6) the resources devoted
to and the record of compliance with the fund's investment policies
and restrictions and with policies on personal securities
transactions, and (7) the nature, cost and character of non-investment
management services provided by FMR and its affiliates.
In response to questions raised by the Independent Trustees,
additional information was furnished by FMR including, among other
items, information on and analysis of (a) the overall organization of
FMR, (b) the choice of performance indices and benchmarks, (c) the
composition of peer groups of funds, (d) transfer agency and
bookkeeping fees paid to affiliates of FMR, (e) investment
performance, (f) investment management staffing, (g) the potential for
achieving further economies of scale, (h) operating expenses paid to
third parties, and (i) the information furnished to investors,
including the fund's shareholders.
In considering the Amended Contract, the Board of Trustees and the
Independent Trustees did not identify any single factor as
all-important or controlling, and the following summary does not
detail all of the matters considered. Matters considered by the
Board of Trustees and the Independent Trustees in connection with
their approval of the Amended Contract include the following:
BENEFITS TO SHAREHOLDERS. The Board of Trustees and the Independent
Trustees considered the benefit to shareholders of investing in a fund
that is part of a large family of funds offering a variety of
investment disciplines and providing for a large variety of fund and
shareholder services. With regard to the proposed modification to the
Present Contract's amendment provisions, the Board of Trustees and the
Independent Trustees considered the benefit to shareholders of FMR's
and the trust's increased flexibility (within 1940 Act constraints) to
amend the Management Contract without the delays and potential costs
of a proxy solicitation.
INVESTMENT COMPLIANCE AND PERFORMANCE. The Board of Trustees and the
Independent Trustees considered whether the fund has operated within
its investment objective and its record of compliance with its
investment restrictions. They also reviewed monthly the fund's
investment performance as well as the performance of a peer group of
mutual funds, and the performance of an appropriate index or
combination of indices.
FMR'S PERSONNEL AND METHODS. The Board of Trustees and the
Independent Trustees review at least annually the background of the
fund's portfolio manager and the fund's investment objective and
discipline. The Independent Trustees have also had discussions with
senior management of FMR responsible for investment operations and the
senior management of Fidelity's fixed-income group. Among other
things, they considered the size, education and experience of FMR's
investment staff, its use of technology, and FMR's approach to
recruiting, training and retaining portfolio managers and other
research, advisory and management personnel.
NATURE AND QUALITY OF OTHER SERVICES. The Board of Trustees and the
Independent Trustees considered the nature, quality, cost and extent
of administrative and shareholder services performed by FMR and
affiliated companies, both under the Present Contract and the Amended
Contract and under separate agreements covering transfer agency
functions and pricing, bookkeeping and securities lending services, if
any. The Board of Trustees and the Independent Trustees have also
considered the nature and extent of FMR's supervision of third party
service providers, principally custodians and subcustodians.
EXPENSES. The Board of Trustees and the Independent Trustees
considered the fund's expense ratio and the expense ratios of a peer
group of funds. They also considered the amount and nature of fees
paid by shareholders.
PROFITABILITY. The Board of Trustees and the Independent Trustees
considered the level of FMR's profits in respect of the management of
the Fidelity funds, including the fund. This consideration included an
extensive review of FMR's methodology in allocating its costs to the
management of the fund. The Board of Trustees and the Independent
Trustees have concluded that the cost allocation methodology employed
by FMR has a reasonable basis and is appropriate in light of all of
the circumstances. They considered the profits realized by FMR in
connection with the operation of the fund and whether the amount of
profit is a fair entrepreneurial profit for the management of the
fund. They also considered the profits realized from non-fund
businesses which may benefit from or be related to the fund's
business. The Board of Trustees and the Independent Trustees also
considered FMR's profit margins in comparison with available industry
data, both accounting for and ignoring marketing expenses.
ECONOMIES OF SCALE. The Board of Trustees and the Independent
Trustees considered whether there have been economies of scale in
respect of the management of the Fidelity funds, whether the Fidelity
funds (including the fund) have appropriately benefited from any
economies of scale, and whether there is potential for realization of
any further economies of scale. The Board of Trustees and the
Independent Trustees have concluded that FMR's mutual fund business
presents some limited opportunities to realize economies of scale and
that these economies are being shared between fund shareholders and
FMR in an appropriate manner. The Independent Trustees have also
concluded that the existing group fee structure should be continued
but determined that it would be appropriate to change the group fee
structure as proposed herein.
OTHER BENEFITS TO FMR. The Board of Trustees and the Independent
Trustees also considered the character and amount of fees paid by the
fund and the fund's shareholders for services provided by FMR and its
affiliates, including fees for services like transfer agency, fund
accounting and direct shareholder services. They also considered the
allocation of fund brokerage to brokers affiliated with FMR and the
receipt of sales loads and payments under Rule 12b-1 plans in respect
of certain of the Fidelity funds. The Board of Trustees and the
Independent Trustees also considered the revenues and profitability of
FMR businesses other than its mutual fund business, including FMR's
retail brokerage, correspondent brokerage, capital markets, trust,
investment advisory, pension record keeping, insurance, publishing,
real estate, international research and investment funds, and others.
The Board of Trustees and the Independent Trustees considered the
intangible benefits that accrue to FMR and its affiliates by virtue of
their relationship with the fund.
CONCLUSION. Based on their evaluation of all material factors and
assisted by the advice of independent counsel, the Trustees concluded
(i) that the existing management fee structure is fair and reasonable
and (ii) that the proposed modifications to the management fee
structure, that is the reduction of the Group Fee Rate schedule and
the proposed modification to the Present Contract's amendment
provisions, are in the best interest of the fund's shareholders. The
Board of Trustees, including the Independent Trustees, voted to
approve the submission of the Amended Contract to shareholders of the
fund and recommends that shareholders of the fund vote FOR the Amended
Contract. If approved, the Amended Contract will take effect on the
first day of the first month following shareholder approval.
6. TO APPROVE AMENDED SUB-ADVISORY AGREEMENTS WITH FMR U.K. FOR
FIDELITY MID-CAP STOCK FUND, FIDELITY LARGE CAP STOCK FUND, FIDELITY
SMALL CAP SELECTOR, AND FIDELITY INTERMEDIATE BOND FUND.
The Board of Trustees, including the Trustees who are not "interested
persons" of the Trust or of FMR (the Independent Trustees), has
approved, and recommends that shareholders of each fund approve, a
proposal to adopt an amended sub-advisory agreement among
FMR , FMR U.K. , and the trust with respect to the fund
(the Amended Agreement). Each fund's Amended Agreement would allow
FMR, FMR U.K., and the trust, on behalf of the fund, to modify the
Amended Agreement subject to the requirements of the 1940 Act. Each
fund's existing sub-advisory agreement (the Present Agreement)
requires the vote of a majority of the fund's outstanding voting
securities to authorize all amendments. FMR PAYS ALL OF FMR U.K.'S
FEES UNDER EACH FUND'S AMENDED AGREEMENT. EACH FUND'S AMENDED
AGREEMENT WOULD NOT AFFECT THE FEES THAT THE FUND PAYS TO FMR UNDER
ITS PRESENT MANAGEMENT CONTRACT.
PRESENT AGREEMENTS. Under each fund's Present Agreement, FMR U.K.
acts as an investment consultant to FMR and supplies FMR with
investment research information and portfolio management advice as FMR
reasonably requests on behalf of the fund. FMR U.K. provides
investment advice and research services with respect to issuers
located outside of the United States, focusing primarily on companies
based in Europe. Under each fund's Present Agreement with FMR U.K.,
FMR, NOT THE FUND, pays FMR U.K. a fee equal to 110% of FMR U.K.'s
costs incurred in connection with providing investment advice and
research services.
Furthermore, under each fund's Present Agreement, FMR may grant FMR
U.K. investment management authority with respect to all or a portion
of the fund's assets, as well as the authority to buy and sell stocks,
bonds, and other securities for the fund, subject to the overall
supervision of FMR and the Board of Trustees. To the extent that FMR
grants FMR U.K. investment management authority under each fund's
Present Agreement, FMR, NOT THE FUND, pays FMR U.K. a fee equal to 50%
of FMR's monthly management fee (including any performance adjustment
for Fidelity Mid-Cap Stock Fund, Fidelity Large Cap Stock Fund, and
Fidelity Small Cap Selector) with respect to the fund's average net
assets managed by FMR U.K. on a discretionary basis.
Each fund's Present Agreement requires the vote of a majority of the
fund's outstanding voting securities to authorize all amendments.
PROPOSED AMENDMENTS TO THE PRESENT AGREEMENTS. Each fund's Amended
Agreement would allow FMR, FMR U.K., and the trust, on behalf of the
fund, to amend the Proposed Agreement subject to the provisions of
Section 15 of the 1940 Act, as modified or interpreted by the
Securities and Exchange Commission. In contrast, each fund's Present
Agreement explicitly requires the vote of a majority of the
outstanding voting securities of the fund to authorize all amendments.
Generally, the proposed modification to the Present Agreement's
amendment provisions would allow amendment of the Amended Agreement
without shareholder vote ONLY IF THE 1940 ACT SO PERMITS. In short,
the proposed modification gives FMR, FMR U.K., and the trust added
flexibility to amend the Amended Agreement subject to 1940 Act
constraints. Of course, any future amendments to the Amended Agreement
would require the approval of the Board of Trustees.
On May 20, 1999, the Board of Trustees agreed to submit the Amended
Agreement to shareholders of each fund pursuant to a unanimous vote of
both the full Board of Trustees and the Independent Trustees. The
Trustees considered the benefit to shareholders of FMR's, FMR U.K.'s,
and the trust's increased flexibility (within 1940 Act constraints) to
amend the Amended Agreement without the delays and potential costs of
a proxy solicitation.
A corresponding modification is also proposed to the amendment
provisions in Fidelity Large Cap Stock Fund's, Fidelity Small Cap
Selector's, and Fidelity Intermediate Bond Fund's present management
contracts. (Fidelity Mid-Cap Stock Fund's present management contract
contains the modified amendment provision.) See "Modification of
Management Contract Amendment Provisions" on pages and .
A copy of the form of Amended Agreement for each fund, marked to
indicate the proposed amendments, is supplied as Exhibit 5 on page .
Except for the modifications discussed above, Fidelity Mid-Cap Stock
Fund's, Fidelity Large Cap Stock Fund's, and Fidelity Intermediate
Bond Fund's Amended Agreements are substantially identical to their
Present Agreements. Except for the modifications discussed above (and
certain other minor modifications to make the fund's Amended Agreement
conform to the "standard" sub-advisory agreement with FMR U.K. for the
Fidelity funds), Fidelity Small Cap Selector's Amended Agreement is
substantially identical to its Present Agreement. (For a detailed
discussion of each fund's Present Agreement, refer to the section
entitled "Sub-Advisory Agreements" beginning on page .) If approved by
shareholders, each fund's Amended Agreement will take effect on
October 1, 1999 (or the first day of the first month following
approval) and will remain in effect through July 31, 2000 (in the case
of Fidelity Mid-Cap Stock Fund, Fidelity Large Cap Stock Fund, and
Fidelity Small Cap Selector) or June 30, 2000 (in the case of Fidelity
Intermediate Bond Fund) and from year to year thereafter, but only as
long as its continuance is approved at least annually by (i) the vote,
cast in person at a meeting called for the purpose, of a majority of
the Independent Trustees and (ii) the vote of either a majority of the
Trustees or a majority of the outstanding shares of the fund. Each
fund's Amended Agreement would be terminable on 60 days' written
notice by either party to the agreement and the Amended Agreement
would terminate automatically in the event of its assignment. If a
fund's Amended Agreement is not approved, its Present Agreement will
continue in effect through July 31, 2000 (in the case of Fidelity
Mid-Cap Stock Fund, Fidelity Large Cap Stock Fund, and Fidelity Small
Cap Selector) or June 30, 2000 (in the case of Fidelity Intermediate
Bond Fund) and thereafter only as long as its continuance is approved
at least annually as above.
FMR would continue to pay all of FMR U.K.'s fees under each fund's
Amended Agreement. If shareholders approve the Amended Agreement, FMR
could, in the future and subject to the approval of the Board of
Trustees, further amend the Amended Agreements to change the fees FMR
pays to FMR U.K. for providing the services described above. IF
SHAREHOLDERS APPROVE THE AMENDED AGREEMENT, FMR COULD NOT, HOWEVER, IN
THE FUTURE AMEND A FUND'S PRESENT MANAGEMENT CONTRACT TO INCREASE THE
FUND'S MANAGEMENT FEE RATE PAYABLE TO FMR THEREUNDER WITHOUT
SHAREHOLDER APPROVAL.
FMR U.K., with its principal office in London, England, is a
wholly-owned subsidiary of FMR established in 1986 to provide
investment research to FMR with respect to foreign securities. This
research complements other research on foreign securities produced by
FMR's U.S.-based research analysts and portfolio managers, or obtained
from broker-dealers or other sources.
FMR U.K. may also provide investment advisory services to FMR with
respect to other investment companies for which FMR serves as
investment adviser, and to other clients. Currently, FMR U.K.'s only
client other than FMR is Fidelity International Limited (FIL), an
affiliate of FMR organized under the laws of Bermuda. FIL provides
investment advisory services to non-U.S. investment companies and
institutional investors investing in securities of issuers throughout
the world. Edward C. Johnson 3d, President and a Trustee of the trust,
is Chairman and a Director of FMR U.K., Chairman and a Director of
FIL, and a principal stockholder of both FIL and FMR. For more
information on FMR U.K., see the section entitled "Activities and
Management of FMR U.K. and FMR Far East" on page .
CONCLUSION. The Board of Trustees has concluded that the proposal
will benefit each fund and its shareholders. The Trustees recommend
voting FOR the proposal. With respect to each fund, if the Amended
Agreement is approved by shareholders, the Amended Agreement will take
effect on the first day of the first month following approval. If the
Amended Agreement is not approved by shareholders, the Present
Agreement with FMR U.K. will remain in effect.
7. TO APPROVE AMENDED SUB-ADVISORY AGREEMENTS WITH FMR FAR EAST FOR
FIDELITY MID-CAP STOCK FUND, FIDELITY LARGE CAP STOCK FUND, FIDELITY
SMALL CAP SELECTOR, AND FIDELITY INTERMEDIATE BOND FUND.
The Board of Trustees, including the Trustees who are not "interested
persons" of the Trust or of FMR (the Independent Trustees), has
approved, and recommends that shareholders of each fund approve, a
proposal to adopt an amended sub-advisory agreement among
FMR , FMR Far East , and the trust with respect to the
fund (the Amended Agreement). Each fund's Amended Agreement would
allow FMR, FMR Far East, and the trust, on behalf of the fund, to
modify the Amended Agreement subject to the requirements of the 1940
Act. Each fund's existing sub-advisory agreement (the Present
Agreement) requires the vote of a majority of the fund's outstanding
voting securities to authorize all amendments. FMR PAYS ALL OF FMR FAR
EAST'S FEES UNDER EACH FUND'S AMENDED AGREEMENT. EACH FUND'S AMENDED
AGREEMENT WOULD NOT AFFECT THE FEES THAT THE FUND PAYS TO FMR UNDER
ITS PRESENT MANAGEMENT CONTRACT.
PRESENT AGREEMENTS. Under each fund's Present Agreement, FMR Far East
acts as an investment consultant to FMR and supplies FMR with
investment research information and portfolio management advice as FMR
reasonably requests on behalf of the fund. FMR Far East provides
investment advice and research services with respect to issuers
located outside of the United States, focusing primarily on companies
based in the Far East. Under each fund's Present Agreement with FMR
Far East, FMR, NOT THE FUND, pays FMR Far East a fee equal to 105% of
FMR Far East's costs incurred in connection with providing investment
advice and research services.
Furthermore, under each fund's Present Agreement, FMR may grant FMR
Far East investment management authority with respect to all or a
portion of the fund's assets, as well as the authority to buy and sell
stocks, bonds, and other securities for the fund, subject to the
overall supervision of FMR and the Board of Trustees. To the extent
that FMR grants FMR Far East investment management authority under
each fund's Present Agreement, FMR, NOT THE FUND, pays FMR Far East a
fee equal to 50% of FMR's monthly management fee (including any
performance adjustment for Fidelity Mid-Cap Stock Fund, Fidelity Large
Cap Stock Fund, and Fidelity Small Cap Selector) with respect to the
fund's average net assets managed by FMR Far East on a discretionary
basis.
Each fund's Present Agreement requires the vote of a majority of the
fund's outstanding voting securities to authorize all amendments.
PROPOSED AMENDMENTS TO THE PRESENT AGREEMENTS. Each fund's Amended
Agreement would allow FMR, FMR Far East, and the trust, on behalf of
the fund, to amend the Proposed Agreement subject to the provisions of
Section 15 of the 1940 Act, as modified or interpreted by the
Securities and Exchange Commission. In contrast, each fund's Present
Agreement explicitly requires the vote of a majority of the
outstanding voting securities of the fund to authorize all amendments.
Generally, the proposed modification to the Present Agreement's
amendment provisions would allow amendment of the Amended Agreement
without shareholder vote ONLY IF THE 1940 ACT SO PERMITS. In short,
the proposed modification gives FMR, FMR Far East, and the trust added
flexibility to amend the Amended Agreement subject to 1940 Act
constraints. Of course, any future amendments to the Amended Agreement
would require the approval of the Board of Trustees.
On May 20, 1999, the Board of Trustees agreed to submit the Amended
Agreement to shareholders of each fund pursuant to a unanimous vote of
both the full Board of Trustees and the Independent Trustees. The
Trustees considered the benefit to shareholders of FMR's, FMR Far
East's, and the trust's increased flexibility (within 1940 Act
constraints) to amend the Amended Agreement without the delays and
potential costs of a proxy solicitation.
A corresponding modification is also proposed to the amendment
provisions in Fidelity Large Cap Stock Fund's, Fidelity Small Cap
Selector's, and Fidelity Intermediate Bond Fund's present management
contracts. (Fidelity Mid-Cap Stock Fund's present management contract
contains the modified amendment provision.) See "Modification of
Management Contract Amendment Provisions" on pages and .
A copy of the form of Amended Agreement for each fund, marked to
indicate the proposed amendments, is supplied as Exhibit 6 on page .
Except for the modifications discussed above, Fidelity Mid-Cap Stock
Fund's, Fidelity Large Cap Stock Fund's, and Fidelity Intermediate
Bond Fund's Amended Agreements are substantially identical to their
Present Agreements. Except for the modifications discussed above (and
certain other minor modifications to make the fund's Amended Agreement
conform to the "standard" sub-advisory agreement with FMR Far East for
the Fidelity funds), Fidelity Small Cap Selector's Amended Agreement
is substantially identical to its Present Agreement. (For a detailed
discussion of each fund's Present Agreement, refer to the section
entitled "Sub-Advisory Agreements" beginning on page .) If approved by
shareholders, each fund's Amended Agreement will take effect on
October 1, 1999 (or the first day of the first month following
approval) and will remain in effect through July 31, 2000 (in the case
of Fidelity Mid-Cap Stock Fund, Fidelity Large Cap Stock Fund, and
Fidelity Small Cap Selector) or June 30, 2000 (in the case of Fidelity
Intermediate Bond Fund) and from year to year thereafter, but only as
long as its continuance is approved at least annually by (i) the vote,
cast in person at a meeting called for the purpose, of a majority of
the Independent Trustees and (ii) the vote of either a majority of the
Trustees or a majority of the outstanding shares of the fund. Each
fund's Amended Agreement would be terminable on 60 days' written
notice by either party to the agreement and the Amended Agreement
would terminate automatically in the event of its assignment. If a
fund's Amended Agreement is not approved, its Present Agreement will
continue in effect through July 31, 2000 (in the case of Fidelity
Mid-Cap Stock Fund, Fidelity Large Cap Stock Fund, and Fidelity Small
Cap Selector) or June 30, 2000 (in the case of Fidelity Intermediate
Bond Fund) and thereafter only as long as its continuance is approved
at least annually as above.
FMR would continue to pay all of FMR Far East's fees under each
fund's Amended Agreement. If shareholders approve the Amended
Agreement, FMR could, in the future and subject to the approval of the
Board of Trustees, further amend the Amended Agreements to change the
fees FMR pays to FMR Far East for providing the services described
above. IF SHAREHOLDERS APPROVE THE AMENDED AGREEMENT, FMR COULD NOT,
HOWEVER, IN THE FUTURE AMEND A FUND'S PRESENT MANAGEMENT CONTRACT TO
INCREASE THE FUND'S MANAGEMENT FEE RATE PAYABLE TO FMR THEREUNDER
WITHOUT SHAREHOLDER APPROVAL.
FMR Far East, with its principal office in Tokyo, Japan, is a
wholly-owned subsidiary of FMR established in 1986 to provide
investment research to FMR with respect to foreign securities. This
research complements other research on foreign securities produced by
FMR's U.S.-based research analysts and portfolio managers, or obtained
from broker-dealers or other sources.
FMR Far East may also provide investment advisory services to FMR
with respect to other investment companies for which FMR serves as
investment adviser, and to other clients. Currently, FMR Far East's
only client other than FMR is Fidelity International Limited (FIL), an
affiliate of FMR organized under the laws of Bermuda. FIL provides
investment advisory services to non-U.S. investment companies and
institutional investors investing in securities of issuers throughout
the world. Edward C. Johnson 3d, President and a Trustee of the trust,
is Chairman and a Director of FMR Far East, Chairman and a Director of
FIL, and a principal stockholder of both FIL and FMR. For more
information on FMR Far East, see the section entitled "Activities and
Management of FMR U.K. and FMR Far East" on page .
CONCLUSION. The Board of Trustees has concluded that the proposal
will benefit each fund and its shareholders. The Trustees recommend
voting FOR the proposal. With respect to each fund, if the Amended
Agreement is approved by shareholders, the Amended Agreement will take
effect on the first day of the first month following approval. If the
Amended Agreement is not approved by shareholders, the Present
Agreement with FMR Far East will remain in effect.
8. TO APPROVE A DISTRIBUTION AND SERVICE PLAN PURSUANT TO RULE 12B-1
FOR FIDELITY SMALL CAP SELECTOR.
The Board of Trustees has approved, and recommends that shareholders
of Fidelity Small Cap Selector approve, a Distribution and Service
Plan (the Plan) for the fund. A copy of the form of Plan is attached
to this Proxy Statement as Exhibit 7.
THE PLAN. The Plan was approved by the Board as provided for by Rule
12b-1 (the Rule) promulgated by the Securities and Exchange Commission
(SEC) under the 1940 Act. The Rule provides that an investment company
(e.g., a mutual fund) acting as a distributor of its shares must do so
pursuant to a written Plan "describing all material aspects of the
proposed financing of distribution.'' Under the Rule, an investment
company is deemed to be acting as a distributor of its shares if it
engages "directly or indirectly in financing any activity which is
primarily intended to result in the sale of shares issued by such
company, including, but not necessarily limited to, advertising,
compensation of underwriters, dealers, and sales personnel, the
printing and mailing of prospectuses to other than current
shareholders, and the printing and mailing of sales literature.''
The Plan is designed to avoid legal uncertainties which may arise
from the ambiguity of the phrase "primarily intended to result in the
sale of shares'' and from the term "indirectly'' as used in the Rule.
The SEC has neither approved nor disapproved the Plan.
The Plan contemplates that all expenses relating to the distribution
of fund shares shall be paid for by FMR, or Fidelity Distributors
Corporation (FDC), a wholly owned subsidiary of FMR Corp., out of past
profits and other resources, including management fees paid by the
fund to FMR. The Plan also recognizes that FMR, either directly or
through FDC, may make payments from these sources to securities
dealers and to other third parties who engage in the sale of fund
shares or who render shareholder services. The Plan provides that, to
the extent that the fund's payment of management fees to FMR might be
considered to constitute the "indirect'' financing of activities
"primarily intended to result in the sale of shares,'' such payment is
expressly authorized. THE PLAN DOES NOT AUTHORIZE PAYMENTS BY THE FUND
OTHER THAN THOSE THAT ARE TO BE MADE TO FMR UNDER ITS MANAGEMENT
CONTRACT.
The fund may execute portfolio transactions with, and purchase
securities issued by, depository institutions that receive payments
under the Plan. No preference for the instruments of such depository
institutions will be shown in the selection of investments.
Although the Plan contemplates that FMR and FDC may engage in various
distribution activities, it does not require them to perform any
specific type of distribution activity or to incur any specific level
of expense for such activities.
The Plan contains a number of provisions relating to reporting
obligations and to its amendment and termination as required by the
Rule. If approved by shareholders, the Plan will continue in effect as
long as its continuance is specifically approved at least annually by
a majority of the Board of Trustees, including a majority of the
Trustees who are not "interested persons'' of the trust and who have
no direct or indirect financial interest in the operation of the Plan
or any agreement related to the Plan (the non-interested Trustees),
cast in person at a meeting called for the purpose of voting on the
Plan. The Plan may be amended at any time by the Trustees, except that
it may not be amended to authorize direct payments by the fund to
finance any activity primarily intended to result in the sale of
shares issued by the fund or to increase materially the amount spent
by the fund for distribution without the approval of a majority of the
outstanding shares of the fund and the Trustees. All material
amendments to the Plan must be approved by a majority of the
non-interested Trustees. The Plan, and any agreements related to the
Plan, may be terminated at any time by a vote of the majority of the
non-interested Trustees or by a vote of the majority of the
outstanding shares of the fund. The Plan requires that the Trustees
receive, at least quarterly, a written report as to the amounts
expended during the quarter by FMR, or FDC, in connection with
financing any activity primarily intended to result in the sale of
shares issued by the fund, and the purposes for which such
expenditures were made. As required by the Rule, while the Plan is in
effect, the selection and nomination of those Trustees who are not
"interested persons" shall be committed to the discretion of the
non-interested Trustees then in office.
TRUSTEE CONSIDERATION. In determining to recommend the adoption of
the Plan, the Board considered a variety of factors and was advised by
counsel who are not counsel to FMR or FDC. The Trustees believe that
the fees paid by the fund to FMR under the Management Contract are
fair and reasonable, that the services provided thereunder are
necessary and appropriate for the fund and its shareholders, and that
the fund does not indirectly finance the distribution of its shares in
contravention of the Rule. Nonetheless, the Trustees concluded that
adoption of the Plan would avoid legal uncertainties which might arise
as a result of what they and FMR believe to be potentially subjective
and ambiguous language contained in the Rule and in public releases
issued by the SEC in connection with the proposal and adoption of the
Rule (SEC Releases). The Trustees believe that the adoption of the
Plan is advisable to minimize such legal uncertainties and to provide
other benefits to the fund and its shareholders.
The Trustees noted that the fund's Plan does not involve any direct
payment by the fund to finance any activity primarily intended to
result in the sale of shares issued by the fund, and that any
amendment of the fund's Management Contract with FMR to increase the
amount paid by the fund thereunder would require approval of both the
Trustees and the fund's shareholders. The Trustees also considered the
factors suggested in the SEC Releases including: the need for
independent counsel or experts to assist the Trustees in reaching a
determination; the nature and causes of the problems and circumstances
which made consideration of a Plan appropriate; the way in which a
Plan would resolve or alleviate the problems, including the nature and
approximate amount of the expenditures contemplated by the Plan; the
merits of possible alternatives to the Plan; the interrelationship
between the Plan and the activities of FMR in financing the
distribution of the fund's shares; the possible benefits of the Plan
to FMR and its affiliates relative to those expected to accrue to the
fund; and consequently the effects of the Plan on existing
shareholders.
The reduction in legal uncertainties arising from the potentially
subjective and ambiguous language that appears in the Rule and in the
SEC Releases enables the Trustees, in connection with their review of
the fund's Management Contract with FMR, to consider the full range of
services provided by FMR and FDC, including services which may be
related to the distribution of the fund's shares. In addition, the
Board of Trustees considered alternatives to the Plan, including
direct payments by the fund to FDC and/or third parties and the
implementation of a sales load. The Trustees believe it is appropriate
to ensure that FMR and FDC have the flexibility to direct their
distribution activities in a manner consistent with prevailing market
conditions by using, subject to approval of the Trustees, their
resources, including the current management fee, to make payments to
third parties. To the extent that FMR has greater flexibility under
the Plan, additional sales of the fund's shares may result. The
Trustees believe that this flexibility has the potential to benefit
the fund by reducing the possibility that the fund would experience
net redemptions, which might require the liquidation of portfolio
securities in amounts and at times that could be disadvantageous for
investment purposes. Of course, there can be no assurance that these
events will occur.
The Board of Trustees recognized that a greater level of fund assets
benefits FMR by increasing its management fee revenues. The Board
noted the high quality of investment management services and the
expansion of, and many innovations in, investor services that have
been provided by FMR over the years. The Board believes that revenues
received by FMR contribute to its continuing ability to attract and
retain a high caliber of investment and other personnel and to develop
and implement new systems for providing services and information to
shareholders. The Board considers this ability to be an important
benefit to the fund and its shareholders.
CONCLUSION. For the reasons stated above, the members of the Board of
Trustees unanimously concluded in the exercise of their business
judgment and in light of their fiduciary duties under state law and
the 1940 Act that there is a reasonable likelihood that the Plan will
benefit the fund and its shareholders. The Trustees recommend that
shareholders of the fund vote FOR approval of the Plan. With respect
to the fund, if the Plan is not approved, the Board and FMR will
consider alternative means of obtaining the services that are to be
provided under the Plan.
9. TO APPROVE AN AGREEMENT AND PLAN PROVIDING FOR THE REORGANIZATION
OF FIDELITY SMALL CAP SELECTOR FROM A SEPARATE SERIES OF ONE
MASSACHUSETTS BUSINESS TRUST TO ANOTHER.
The Board of Trustees has approved an Agreement and Plan of
Reorganization (the Plan of Reorganization) in the form attached to
this Proxy Statement as Exhibit 8. The Plan of Reorganization provides
for the reorganization of Fidelity Small Cap Selector (the Fund) from
a separate series of Fidelity Commonwealth Trust (the Trust), a
Massachusetts business trust, to a newly-established, separate series
of Fidelity Capital Trust (Capital Trust), also a Massachusetts
business trust (the Reorganization).
The investment objective, policies, and limitations of the Fund will
not change, except as approved by shareholders and as described in
this proxy statement. A separate series of Capital Trust will carry on
the business of the Fund following the Reorganization (the Series).
The Series, which has not yet commenced business operations, will have
an investment objective, policies, and limitations identical to those
of the Fund (except as they may be modified pursuant to a vote of the
shareholders as proposed in this proxy statement ; see Proposal
11 ).
Both the Trust and Capital Trust are Massachusetts business trusts
and currently have substantially similar Declarations of Trust. The
Trust is presently seeking authorization to adopt the
form of New Declaration of Trust that is described in Proposal 3 in
this proxy statement. In addition, the Board of Trustees of Capital
Trust has approved the solicitation of shareholders of Capital Trust
to seek authorization to adopt the form of New Declaration of Trust
that is described in Proposal 3 in this proxy statement. If
neither trust adopts the New Declaration of Trust, the rights of the
Fund's shareholders under state law and the Fund's governing documents
would be unaffected by the Reorganization. If both trusts adopt the
New Declaration of Trust, the rights of the Fund's shareholders under
state law and the Fund's governing documents would, likewise, be
unaffected by the Reorganization. If only one trust adopts the New
Declaration of Trust, the Trustees of the adopting trust would enjoy
greater flexibility and, subject to applicable requirements of the
1940 Act and Massachusetts law, broader authority to act. See Proposal
3 for more information on the changes effected by the New Declaration
of Trust.
The Reorganization will not affect the operation of the Fund in a
material manner. The same individuals serve as Trustees of both
trusts. Both trusts are authorized to issue an unlimited number of
shares of beneficial interest, and each Declaration of Trust permits
the Trustees to create one or more additional series or funds.
In connection with the Reorganization, the Fund's fiscal year end
will change from April to October. The Trustees may change the fiscal
year end of the Fund at their discretion in the future.
FMR, the Fund's investment adviser, will be responsible for the
investment management of the Series, subject to the supervision of the
Board of Trustees, under a management contract substantively identical
to the contract in effect between FMR and the Fund immediately prior
to the Closing Date (including as it may be modified pursuant to a
vote of shareholders of the Fund as proposed in this proxy statement)
(the New Management Contract); similarly, Fidelity Management &
Research (U.K.) Inc. (FMR U.K.) and Fidelity Management & Research
(Far East) Inc. (FMR Far East), the Fund's sub-advisers, will have
primary responsibility for providing investment advice and research
services outside the United States or investment management authority
under sub-advisory agreements substantively identical to the
agreements in effect between FMR and FMR U.K. or FMR Far East
immediately prior to the Closing Date (including as each may be
modified pursuant to a vote of shareholders of the Fund as proposed in
this proxy statement) (the New Sub-Advisory Agreements).
The Fund's distribution agent, Fidelity Distributors Corporation
(FDC), will distribute shares of the Series under a General
Distribution Agreement substantively identical to the contract in
effect between FDC and the Fund immediately prior to the Closing Date.
REASON FOR THE PROPOSED REORGANIZATION. The Fund is presently
organized as a series of the Trust, which has six series of shares or
funds. The Board of Trustees unanimously recommends reorganization of
the Fund to a separate series of Capital Trust (i.e., into the
Series), which will succeed to the business of the Fund. Moving the
Fund from the Trust to Capital Trust will consolidate and streamline
the production and mailing of certain legal documents. THE PROPOSED
CHANGE WILL HAVE NO MATERIAL EFFECT ON SHAREHOLDERS OR THE MANAGEMENT
OF THE FUND.
The proposal to present the Plan of Reorganization to shareholders
was approved by the Board of Trustees of the Trust, including all of
the Trustees who are not interested persons of FMR, on May 20, 1999.
The Board of Trustees recommends that Fund shareholders vote FOR the
approval of the Plan of Reorganization described below. Such a vote
encompasses approval of the reorganization of the Fund to a separate
series of Capital Trust; temporary waiver of certain investment
limitations of the Fund to permit the Reorganization (see "Temporary
Waiver of Investment Restrictions" on page 50); and authorization of
the Trust, as sole shareholder of the Series, to approve (i) the New
Management Contract, (ii) the New Sub-Advisory Agreements , and
(iii) a Distribution and Service Plan for the Series under Rule
12b-1 substantively identical to the Plan in effect with respect to
the Fund immediately prior to the Closing Date, as such Distribution
and Service Plan may be adopted pursuant to a vote of shareholders of
the Fund as proposed in this proxy statement (the New Plan). If
shareholders of the Fund do not approve the Plan of Reorganization,
the Fund will continue to operate as a series of the Trust.
SUMMARY OF THE PLAN OF REORGANIZATION. The following discussion
summarizes the important terms of the Plan of Reorganization. This
summary is qualified in its entirety by reference to the Plan of
Reorganization itself.
On the Closing Date (defined below) of the Reorganization, the Fund
will transfer all of its assets to the Series, a series of shares of
Capital Trust established for the purpose of effecting the
Reorganization, in exchange for the assumption by the Series of all of
the liabilities of the Fund and the issuance of shares of beneficial
interest in the Series (Series Shares) equal to the number of Fund
shares outstanding on the Closing Date. Immediately thereafter, the
Fund will distribute one Series Share for each Fund share (the Fund
Shares) held by the shareholder on the Closing Date to each Fund
shareholder, in exchange for such Fund Shares. Immediately after this
distribution of the Series Shares, the Fund will be terminated and, as
soon as practicable thereafter, will be wound up and liquidated. UPON
COMPLETION OF THE REORGANIZATION, EACH FUND SHAREHOLDER WILL BE THE
OWNER OF FULL AND FRACTIONAL SERIES SHARES EQUAL IN NUMBER,
DENOMINATION, AND AGGREGATE NET ASSET VALUE TO HIS OR HER FUND SHARES.
The Plan of Reorganization authorizes the Trust , as the sole
initial shareholder of the Series , to approve (i) the New
Management Contract, (ii) the New Sub-Advisory Agreements, and (iii)
the New Plan.
Capital Trust's Board of Trustees will hold office without time
limits, except that (a) any Trustee may resign; (b) any Trustee may be
removed by written instrument signed by at least two-thirds of the
number of Trustees prior to removal; (c) any Trustee who requests to
be retired by written instrument signed by a majority of the other
Trustees or who is unable to serve due to physical or mental
incapacity by reason of disease or otherwise, death, or for any other
reason, may be retired; and (d) a Trustee may be removed at any
Special Meeting of the shareholders by a vote of two-thirds of the
outstanding shares of Capital Trust. In case a vacancy shall for any
reason exist, the remaining Trustees will fill such vacancy by
appointing another Trustee, so long as immediately after such
appointment, at least two-thirds of the Trustees have been elected by
shareholders. If, at any time, less than a majority of the Trustees
holding office has been elected by shareholders, the Trustees then in
office will promptly call a shareholders' meeting for the purpose of
electing a Board of Trustees. Otherwise, there will normally be no
meeting of shareholders for the purpose of electing Trustees.
The New Management Contract, the New Sub-Advisory Agreements, and the
New Plan will take effect on the Closing Date. The New Management
Contract and the New Sub-Advisory Agreements will continue in force
until July 31, 2000. The New Plan will continue in force until April
30, 2000. The New Management Contract and the New Sub-Advisory
Agreements will continue in force thereafter from year to year so long
as their continuance is approved at least annually by (i) the vote of
a majority of the Trustees who are not "interested persons" of Capital
Trust, FMR, or, in the case of the New Sub-Advisory Agreements, FMR
U.K. or FMR Far East, cast in person at a meeting called for the
purpose of voting on such approval, and (ii) by the vote of a majority
of the Trustees or by the vote of a majority of the outstanding shares
of the Series. The New Plan will continue in effect only if approved
annually by a vote of the Trustees and of those Trustees who are not
interested persons, cast in person at a meeting called for that
purpose. The New Management Contract and the New Sub-Advisory
Agreements will be terminable without penalty on sixty days' written
notice either by Capital Trust, FMR, FMR U.K. or FMR Far East, as the
case may be, and will terminate automatically in the event of
assignment. The New Plan may be terminable at any time, without the
payment of any penalty, by a vote of a majority of the Independent
Trustees or by a vote of a majority of the outstanding voting
securities of the Series.
Assuming the Plan of Reorganization is approved, it is currently
contemplated that the Reorganization will become effective at the
close of business on December 29 , 1999 (the Closing Date).
However, the Reorganization may become effective at such other date as
the parties may agree in writing.
The obligations of the Trust and Capital Trust under the Plan of
Reorganization are subject to various conditions as stated therein.
Notwithstanding the approval of the Plan of Reorganization by Fund
shareholders, the Plan of Reorganization may be terminated or amended
at any time prior to the Reorganization by action of the Trustees to
provide against unforeseen events, if (1) there is a material breach
by the other party of any representation, warranty, or agreement
contained in the Plan of Reorganization to be performed at or prior to
the Closing Date or (2) it reasonably appears that a party will not or
cannot meet a condition of the Plan of Reorganization. Generally,
either party may at any time waive the other party's compliance with
any of the covenants and conditions contained in, or both parties may
amend, the Plan of Reorganization, provided that such waiver or
amendment does not materially adversely affect the interests of Fund
shareholders.
CONTINUATION OF FUND SHAREHOLDER ACCOUNTS AND PLANS. Capital Trust's
transfer agent will establish an account for the Series' shareholders
containing the appropriate number and denominations of Series Shares
to be received by each holder of Fund Shares under the Plan of
Reorganization. Such accounts will be identical in all material
respects to the accounts currently maintained by the Fund's transfer
agent for the Fund's shareholders. Fund shareholders who are receiving
payment under a withdrawal plan with respect to Fund Shares will
retain the same rights and privileges as to Series Shares under the
Plan of Reorganization. Similarly, no further action will be necessary
in order to continue any automatic investment plan or retirement plan
currently maintained by a Fund shareholder with respect to Fund
Shares.
EXPENSES. The Fund and the Series shall each be responsible for all
of their respective expenses of the Reorganization, estimated at
$28,500 in the aggregate.
TEMPORARY WAIVER OF INVESTMENT RESTRICTIONS. Certain fundamental
investment restrictions of the Fund, which prohibit the Fund from
acquiring more than a stated percentage of ownership of another
company, might be construed as restricting the Fund's ability to carry
out the Reorganization. By approving the Plan of Reorganization, Fund
shareholders will be agreeing to waive, only for the purpose of the
Reorganization, those fundamental investment restrictions that could
prohibit or otherwise impede the transaction.
TAX CONSEQUENCES OF THE REORGANIZATION. Each trust will receive an
opinion from their counsel, Kirkpatrick & Lockhart LLP, that the
Reorganization will constitute a tax-free reorganization within the
meaning of Section 368(a)(1)(F) of the Internal Revenue Code of 1986,
as amended. Accordingly, no gain or loss will be recognized for
federal income tax purposes by the Fund, the Series, or the Fund's
shareholders upon (1) the transfer of the Fund's assets in exchange
solely for the Series Shares and the assumption by Capital Trust on
behalf of the Series of the Fund's liabilities or (2) the distribution
of Series Shares to the Fund's shareholders in exchange for their Fund
Shares. The opinion further provides, among other things, that (a) the
basis for federal income tax purposes of the Series Shares to be
received by each Fund shareholder will be the same as that of his or
her Fund Shares immediately prior to the Reorganization; and (b) each
Fund shareholder's holding period for his or her Series Shares will
include the Fund shareholder's holding period for his or her Fund
Shares, provided that said Fund Shares were held as capital assets on
the date of the exchange.
CONCLUSION. The Board of Trustees has concluded that the proposed
Plan of Reorganization to reorganize the Fund into a separate series
of a Massachusetts business trust is in the best interest of the
Fund's shareholders. The Trustees recommend that the Fund's
shareholders vote FOR the approval of the Plan of Reorganization as
described above. Such a vote encompasses approval of the
reorganization of the Fund to a separate series of a Massachusetts
business trust; temporary waiver of certain investment limitations of
the Fund to permit the Reorganization (see "Temporary Waiver of
Investment Restrictions" on page ); and authorization of the
Trust, as sole shareholder of the Series, to approve (i) the New
Management Contract, (ii) the New Sub-Advisory Agreements for the
Series between FMR and FMR U.K. and FMR Far East, and (iii) the New
Plan. If approved, the Plan of Reorganization will take effect on the
Closing Date. If the Plan of Reorganization is not approved, the Fund
will continue to operate as a series of the Trust.
10. TO ELIMINATE A FUNDAMENTAL INVESTMENT POLICY OF FIDELITY
INTERMEDIATE BOND FUND.
The Board of Trustees has approved, and recommends that shareholders
of the fund approve, a proposal that would eliminate a fundamental
investment policy of Fidelity Intermediate Bond Fund. The elimination
of this policy will allow the fund to more clearly communicate its
investment objective and strategies in conformity with the
requirements of revised Form N-1A (the form used by open-end
investment companies like the fund to register under the Investment
Company Act of 1940 and the Securities Act of 1933).
DISCUSSION OF PROPOSED MODIFICATION. The fund's investment objective
and an investment policy currently read as follows:
"The fund seeks a high level of current income by investing primarily
in investment-grade, fixed-income obligations."
Because this investment policy is fundamental, it cannot be
eliminated without a vote of the fund's shareholders.
If the proposal is approved, the fund's fundamental investment
objective would remain unchanged, but the fundamental investment
policy would be eliminated as follows (deleted language is
[bracketed]):
"The fund seeks a high level of current income [by investing
primarily in investment-grade, fixed-income obligations]."
As indicated above, if the proposal is approved, the fund's
fundamental investment objective of seeking a high level of current
income would not change. However, the fundamental investment policy of
investing primarily in investment-grade, fixed-income obligations
would be eliminated. The eliminated policy is currently described
elsewhere in the fund's registration statement disclosure.
Eliminating the policy is not expected to materially affect the
way the fund is managed. Eliminating the policy will allow the fund to
comply with the requirements of revised Form N-1A for concise,
understandable descriptions of its investment objective and
strategies, and will allow the fund to more clearly communicate its
investment objective and strategies to shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposed
elimination of the foregoing fundamental investment policy is in the
best interest of the fund and its shareholders. The Trustees recommend
voting FOR the proposal. If approved by shareholders, the proposal
will become effective when the disclosure is revised to reflect
the change. If the proposal is not approved by the fund's
shareholders, the fund's current fundamental investment policy will
remain unchanged.
ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS
The primary purpose of Proposals 11 and 12 is to revise certain of
the funds' investment limitations to conform to limitations which are
standard for similar types of funds managed by FMR. The Board of
Trustees asked FMR to analyze the various fundamental and
non-fundamental investment limitations of the Fidelity funds, and,
where practical and appropriate to a fund's investment objective and
policies, propose to shareholders adoption of standard fundamental
limitations and elimination of certain other fundamental limitations.
Generally, when fundamental limitations are eliminated, Fidelity's
standard non-fundamental limitations replace them. By making these
limitations non-fundamental, the Board of Trustees may amend a
limitation as they deem appropriate, without seeking shareholder
approval. The Board of Trustees would amend the limitations to
respond, for instance, to developments in the marketplace, or changes
in federal or state law. The costs of shareholder meetings called for
these purposes are generally borne by a fund and its shareholders.
It is not anticipated that these proposals will substantially affect
the way a fund is currently managed. However, FMR is presenting them
to you for your approval because FMR believes that increased
standardization will help to promote operational efficiencies and
facilitate monitoring of compliance with fundamental and
non-fundamental investment limitations. Although adoption of a new or
revised limitation is not likely to have any impact on the current
investment techniques employed by a fund, it will contribute to the
overall objectives of standardization.
11. TO AMEND FIDELITY LARGE CAP STOCK FUND'S, FIDELITY SMALL CAP
SELECTOR'S, AND FIDELITY INTERMEDIATE BOND FUND'S FUNDAMENTAL
INVESTMENT LIMITATION CONCERNING DIVERSIFICATION.
Each fund's current fundamental investment limitation concerning
diversification is as follows:
"The fund may not with respect to 75% of the fund's total assets,
purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government {FOR FIDELITY INTERMEDIATE BOND
FUND: U.S. Government} or any of its agencies or
instrumentalities) if, as a result, (a) more than 5% of the fund's
total assets would be invested in the securities of that issuer, or
(b) the fund would hold more than 10% of the outstanding voting
securities of that issuer."
The Trustees recommend that shareholders of each fund vote to replace
that fund's current fundamental investment limitation with the
following amended fundamental investment limitation governing
diversification (additional language is ((underlined))):
"The fund may not with respect to 75% of the fund's total assets,
purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. ((G))overnment {FOR FIDELITY INTERMEDIATE BOND
FUND: U.S. Government} or any of its agencies or
instrumentalities((, or securities of other investment companies)))
if, as a result, (a) more than 5% of the fund's total assets would be
invested in the securities of that issuer, or (b) the fund would hold
more than 10% of the outstanding voting securities of that issuer."
The percentage limits in the proposed fundamental limitation
concerning diversification are the percentage limitations imposed by
the 1940 Act for diversified investment companies. The amended
fundamental diversification limitation makes one change from the
current limitation: subject to applicable 1940 Act requirements, it
would permit each fund to invest without limit in the securities of
other investment companies. Pursuant to an order of exemption granted
by the SEC, each fund may invest in certain money market or
short-term bond funds (the Central Funds) managed by FMR or an
affiliate of FMR. The Central Funds do not currently bear the cost of
investment advisory, management, or transfer agent fees, except for
certain pricing and bookkeeping fees. The Central Funds pay minimal
fees for services, such as custodian , auditor, and Independent
Trustees fees. FMR anticipates that making use of the Central Funds
will benefit each fund by enhancing the efficiency of cash management
and by providing increased short-term investment opportunities. If the
proposal is approved, the Central Funds are expected to serve as a
principal option for cash investment for each fund.
If this proposal is approved, the amended fundamental diversification
limitation cannot be changed without the approval of the shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit each fund and its shareholders. The Trustees
recommend voting FOR the proposal. The amended fundamental
diversification limitation, upon shareholder approval, will become
effective when the disclosure is revised to reflect the changes. If
the proposal is not approved by the shareholders of a fund, that
fund's current fundamental diversification limitation will remain
unchanged.
12. TO AMEND FIDELITY INTERMEDIATE BOND FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING THE UNDERWRITING OF SECURITIES.
The fund's current fundamental investment limitation concerning
underwriting states:
"The fund may not act as underwriter (except as it may be deemed such
in a sale of restricted securities)."
The trustees recommend that shareholders of the fund vote to replace
this limitation with the following fundamental limitation governing
underwriting:
"The fund may not underwrite securities issued by others, except to
the extent that the fund may be considered an underwriter within the
meaning of the Securities Act of 1933 in the disposition of restricted
securities."
The primary purpose of the proposed amendment is to clarify the
fund's fundamental policy with respect to underwriting. The proposal
also serves to conform the fund's fundamental investment limitation
concerning underwriting to a limitation which is expected to become
standard for all funds managed by FMR. (See "Adoption of Standardized
Investment Limitations" on page .) If the proposal is approved, the
new limitation may not be changed without the approval of
shareholders.
Adoption of the proposed limitation concerning underwriting is not
expected to affect the way in which the fund is managed, the
investment performance of the fund, or the securities or instruments
in which the fund invests.
CONCLUSION. The Board of Trustees has concluded that the proposal
will benefit the fund and its shareholders. The Trustees recommend
voting FOR the proposal. Upon shareholder approval, the amended
fundamental limitation will become effective when the
disclosure is revised to reflect the changes. If the proposal is
not approved by the shareholders of the fund, the fund's current
limitation will remain unchanged.
OTHER BUSINESS
The Board knows of no other business to be brought before the
Meeting. However, if any other matters properly come before the
Meeting, it is the intention that proxies that do not contain specific
instructions to the contrary will be voted on such matters in
accordance with the judgment of the persons therein designated.
ACTIVITIES AND MANAGEMENT OF FMR
FMR, a corporation organized in 1946, serves as investment adviser to
a number of investment companies. Information concerning the advisory
fees and average net assets of funds with investment objectives
similar to Fidelity Mid-Cap Stock Fund, Fidelity Large Cap Stock Fund,
and Fidelity Small Cap Selector and advised by FMR is contained in the
Table of Average Net Assets and Expense Ratios in Exhibit 9 beginning
on page . Information concerning the advisory fees and average net
assets of funds with investment objectives similar to Fidelity
Intermediate Bond Fund and advised by FMR is contained in the Table of
Average Net Assets and Expense Ratios in Exhibit 10 beginning on page
.
FMR, its officers and directors, its affiliated companies, and the
Trustees, from time to time have transactions with various banks,
including the custodian banks for certain of the funds advised by FMR.
Those transactions that have occurred to date have included mortgages
and personal and general business loans. In the judgment of FMR, the
terms and conditions of those transactions were not influenced by
existing or potential custodial or other fund relationships.
The Directors of FMR are Edward C. Johnson 3d, Chairman of the Board
and of the Executive Committee; Robert C. Pozen, President; and Peter
S. Lynch, Vice Chairman. Each of the Directors is also a Trustee of
the trust. Messrs. Johnson 3d, Pozen, J. Gary Burkhead, John H.
Costello, Matthew N. Karstetter, Eric D. Roiter, Richard A. Silver,
Leonard M. Rush, Robert A. Lawrence, Abigail Johnson, Dwight D.
Churchill, Fred L. Henning, Jr., Bradford L. Lewis, Thomas J. Simpson,
and Stanley N. Griffith are currently officers of the trust and
officers or employees of FMR or FMR Corp. With the exception of Mr.
Costello, Mr. Karstetter, and Mr. Simpson, all of these persons hold
or have options to acquire stock of FMR Corp. The principal business
address of each of the Directors of FMR is 82 Devonshire Street,
Boston, Massachusetts 02109.
All of the stock of FMR is owned by its parent company, FMR Corp., 82
Devonshire Street, Boston, Massachusetts 02109, which was organized on
October 31, 1972. Members of Mr. Edward C. Johnson 3d's family are the
predominant owners of a class of shares of common stock, representing
approximately 49% of the voting power of FMR Corp., and, therefore,
under the 1940 Act may be deemed to form a controlling group with
respect to FMR Corp.
During the period May 1, 1998, through May 31, 1999, no transactions
were entered into by Trustees and nominees as Trustee of the trust
involving more than 1% of the voting common, non-voting common and
equivalent stock, or preferred stock of FMR Corp.
ACTIVITIES AND MANAGEMENT OF FMR U.K. AND FMR FAR EAST
FMR U.K. and FMR Far East are wholly-owned subsidiaries of FMR formed
in 1986 to provide research and investment advice with respect to
companies based outside the United States for certain funds for which
FMR acts as investment adviser. FMR may also grant the sub-advisers
investment management authority as well as authority to buy and sell
securities for certain of the funds for which it acts as investment
adviser, if FMR believes it would be beneficial to a fund.
Funds with investment objectives similar to Fidelity Mid-Cap Stock
Fund, Fidelity Large Cap Stock Fund, and Fidelity Small Cap Selector
managed by FMR with respect to which FMR currently has sub-advisory
agreements with either FMR U.K. or FMR Far East, and the net assets of
each of these funds, are indicated in the Table of Average Net Assets
and Expense Ratios in Exhibit 9 beginning on page . Funds with
investment objectives similar to Fidelity Intermediate Bond Fund
managed by FMR with respect to which FMR currently has sub-advisory
agreements with either FMR U.K. or FMR Far East, and the net assets of
each of these funds, are indicated in the Table of Average Net Assets
and Expense Ratios in Exhibit 10 beginning on page .
The Directors of FMR U.K. and FMR Far East are Edward C. Johnson 3d,
Chairman, and Robert C. Pozen, President. Mr. Johnson 3d also is
President and a Trustee of the trust and of other funds advised
by FMR; Chairman and a Director of FIMM; Chairman, Chief Executive
Officer, President, and a Director of FMR Corp., and a Director and
Chairman of the Board and of the Executive Committee of FMR. In
addition, Mr. Pozen is Senior Vice President and a Trustee of the
trust and of other funds advised by FMR; President and a Director of
FMR; and President and a Director of FIMM. Each of the Directors is a
stock holder of FMR Corp. The principal business address of the
Directors is 82 Devonshire Street, Boston, Massachusetts 02109.
ACTIVITIES AND MANAGEMENT OF FIMM
FIMM is a wholly owned subsidiary of FMR formed in 1997 to provide
portfolio management services to certain Fidelity funds and investment
advice with respect to fixed-income instruments.
Funds with investment objectives similar to Fidelity Intermediate
Bond Fund for which FMR has entered into a sub-advisory agreement with
FIMM, and the net assets of each of these funds, are indicated in the
Table of Average Net Assets and Expense Ratios in Exhibit 10 beginning
on page .
The Directors of FIMM are Edward C. Johnson 3d, Chairman, and Robert
C. Pozen, President. Mr. Johnson 3d also is President and a Trustee of
the trust and of other funds advised by FMR; Chairman, Chief Executive
Officer, President, and a Director of FMR Corp.; Chairman of the Board
and of the Executive Committee of FMR; a Director of FMR; and Chairman
and a Director of FMR U.K. and FMR Far East. In addition, Mr.
Pozen is Senior Vice President and a Trustee of the trust and of other
funds advised by FMR; a Director of FMR Corp.; Director of FMR; and
President and Director of FMR U.K. and FMR Far East. Each of the
Directors is a stockholder of FMR Corp. The principal business address
of the Directors is 82 Devonshire Street, Boston, Massachusetts 02109.
PRESENT MANAGEMENT CONTRACTS
(FIDELITY MID-CAP STOCK FUND, FIDELITY LARGE CAP STOCK FUND,
FIDELITY SMALL CAP SELECTOR, AND FIDELITY INTERMEDIATE BOND FUND)
Each fund employs FMR to furnish investment advisory and other
services. Under its management contract with each fund, FMR acts as
investment adviser and, subject to the supervision of the Board of
Trustees, directs the investments of each fund in accordance with its
investment objective, policies, and limitations. FMR also provides
each fund with all necessary office facilities and personnel for
servicing each fund's investments, compensates all officers of each
fund and all Trustees who are "interested persons" of the trust or of
FMR, and all personnel of each fund or FMR performing services
relating to research, statistical, and investment activities.
In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administrative services
necessary for the operation of each fund. These services include
providing facilities for maintaining each fund's organization;
supervising relations with custodians, transfer and pricing agents,
accountants, underwriters, and other persons dealing with each fund;
preparing all general shareholder communications and conducting
shareholder relations; maintaining each fund's records and the
registration of each fund's shares under federal and state laws;
developing management and shareholder services for each fund; and
furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees. Services provided by affiliates of FMR will continue
under the proposed management contracts described in Proposals 4 and
5.
In addition to the management fee payable to FMR, each fund pays
transfer agent and pricing and bookkeeping fees to Fidelity Service
Company, Inc. (FSC), an affiliate of FMR, its transfer, dividend
disbursing, and shareholder servicing agent. Although each fund's
current management contract provides that the fund will pay for
typesetting, printing, and mailing prospectuses, statements of
additional information, notices, and reports to shareholders, the
trust on behalf of each fund has entered into a revised transfer agent
agreement with FSC, pursuant to which FSC bears the costs of providing
these services to existing shareholders. Other expenses paid by each
fund include interest, taxes, brokerage commissions, and the fund's
proportionate share of insurance premiums and Investment Company
Institute dues. Each fund is also liable for such non-recurring
expenses as may arise, including costs of any litigation to which the
fund may be a party, and any obligation it may have to indemnify its
officers and Trustees with respect to litigation.
Transfer agent fees and pricing and bookkeeping fees, including
reimbursement for out-of-pocket expenses, paid to FSC by the funds for
the fiscal year ended April 30, 1999 amounted to the following:
<TABLE>
<CAPTION>
<S> <C> <C>
Pricing and Bookkeeping Fees
Fund Transfer Agent Fees
Fidelity Mid-Cap Stock Fund $ 3,757,000 $ 621,000
Fidelity Large Cap Stock Fund $ 670,673 $ 147,916
Fidelity Small Cap Selector $ 2,072,368 $ 295,830
Fidelity Intermediate Bond Fund $ 6,589,000 $ 708,000
</TABLE>
Each fund also has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer
registered under the Securities Exchange Act of 1934 and is a member
of the National Association of Securities Dealers, Inc. Each
distribution agreement calls for FDC to use all reasonable efforts,
consistent with its other business, to secure purchasers for shares of
the fund, which are continuously offered at net asset value per share.
Promotional and administrative expenses in connection with the offer
and sale of shares are paid by FMR.
For Fidelity Small Cap Selector, sales charge revenue paid to, and
retained by, FDC for the fiscal year ended April 30, 1999 amounted to
$ 203,175 and $ 203,102 , respectively. On September 30,
1999, Fidelity Small Cap Selector's 3.00% sales charge was eliminated.
FMR is Fidelity Mid-Cap Stock Fund's manager pursuant to a management
contract dated June 26, 1999, which was last approved by Fidelity
Devonshire Trust, as the then sole shareholder of the fund, on June
26, 1999, pursuant to an Agreement and Plan of Reorganization
approved by shareholders of the fund on November 18, 1998. The terms
of Fidelity Mid-Cap Stock Fund's present management contract duplicate
those of the contract approved by shareholders of the fund on November
18, 1998. At that time, Fidelity Mid-Cap Stock Fund's shareholders
approved a proposal to modify the group fee portion of the management
fee to provide for lower fee rates if FMR's assets under management
remained above $210 billion; to modify the performance adjustment
calculation to round the performance of the fund and its comparative
index to the nearest 0.01%, rather than the nearest 1.00%; and to
amend the management contract to allow FMR and the trust, on behalf of
the fund, to modify the contract subject to the requirements of the
1940 Act. FMR is Fidelity Large Cap Stock Fund's manager pursuant to a
management contract dated May 18, 1995, which was approved by FMR, as
the then sole shareholder of the fund, on June 5, 1995. FMR is
Fidelity Small Cap Selector's manager pursuant to a management
contract dated November 1, 1994, which was last approved by
shareholders on October 26, 1994. At that time, Fidelity Small Cap
Selector's shareholders approved a proposal to modify the group fee
portion of the management fee to provide for lower fee rates if FMR's
assets under management remained above $210 billion. FMR is Fidelity
Intermediate Bond Fund's manager pursuant to a management contract
dated December 1, 1994, which was last approved by shareholders on
November 16, 1994. At that time, Fidelity Intermediate Bond Fund's
shareholders approved a proposal to modify the group fee portion of
the management fee to provide for lower fee rates if FMR's assets
under management remained above $156 billion; and to increase the
individual fund fee rate from 0.15% to 0.30%.
For the services of FMR under Fidelity Mid-Cap Stock Fund's, Fidelity
Large Cap Stock Fund's, and Fidelity Small Cap Selector's management
contracts, each fund pays FMR a monthly management fee which has two
components: a basic fee, which is the sum of a group fee rate and an
individual fund fee rate, and a performance adjustment based on a
comparison of Fidelity Mid-Cap Stock Fund's performance to that of the
Standard & Poor's MidCap 400(Registered trademark) Index (S&P MidCap
400), Fidelity Large Cap Stock Fund's performance to that of the
Standard & Poor's 500 Index (S&P 500), and Fidelity Small Cap
Selector's performance to that of the Russell 2000 Index (Russell
2000).
For the services of FMR under Fidelity Intermediate Bond Fund's
management contract, the fund pays FMR a monthly management fee which
has two components: a group fee rate and an individual fund fee rate.
The group fee rate is based on the monthly average net assets of all
of the registered investment companies with which FMR has management
contracts and is calculated on a cumulative basis pursuant to the
graduated fee rate schedules shown below on the left. The schedules
below on the right show the effective annual group fee rate at various
asset levels, which is the result of cumulatively applying the
annualized rates on the left. For example, the effective annual fee
rates at $748 billion of group net assets - the approximate level for
April 1999 - were .2824% (for Fidelity Mid-Cap Stock Fund, Fidelity
Large Cap Stock Fund, and Fidelity Small Cap Selector) and .1300% (for
Fidelity Intermediate Bond Fund), which are the weighted averages of
the respective fee rates for each level of group net assets up to $748
billion.
On January 1, 1996, for Fidelity Large Cap Stock Fund,
Fidelity Small Cap Selector, and Fidelity Intermediate Bond Fund, FMR
voluntarily modified the breakpoints in the group fee rate schedules.
The revised group fee rate schedules, depicted below, provide for
lower management fee rates as FMR's assets under management increase.
Fidelity Mid-Cap Stock Fund's current management contract reflects the
revised group fee rate schedule below.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FIDELITY MID-CAP STOCK FUND, FIDELITY LARGE CAP STOCK FUND,
AND FIDELITY SMALL CAP SELECTOR
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Assets Annualized Rate Group Net Assets Effective Annual Fee Rate
$0 - 3 billion .5200% $ 0.5 billion .5200%
3 - 6 .4900 25 .4238
6 - 9 .4600 50 .3823
9 - 12 .4300 75 .3626
12 - 15 .4000 100 .3512
15 - 18 .3850 125 .3430
18 - 21 .3700 150 .3371
21 - 24 .3600 175 .3325
24 - 30 .3500 200 .3284
30 - 36 .3450 225 .3249
36 - 42 .3400 250 .3219
42 - 48 .3350 275 .3190
48 - 66 .3250 300 .3163
66 - 84 .3200 325 .3137
84 - 102 .3150 350 .3113
102 - 138 .3100 375 .3090
138 - 174 .3050 400 .3067
174 - 210 .3000 425 .3046
210 - 246 .2950 450 .3024
246 - 282 .2900 475 .3003
282 - 318 .2850 500 .2982
318 - 354 .2800 525 .2962
354 - 390 .2750 550 .2942
390 - 426 .2700
426 - 462 .2650
462 - 498 .2600
498 - 534 .2550
Over 534 .2500
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FIDELITY INTERMEDIATE BOND FUND
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Assets Annualized Rate Group Net Assets Effective Annual Fee Rate
$0 - 3 billion .3700% $ 0.5 billion .3700%
3 - 6 .3400 25 .2664
6 - 9 .3100 50 .2188
9 - 12 .2800 75 .1986
12 - 15 .2500 100 .1869
15 - 18 .2200 125 .1793
18 - 21 .2000 150 .1736
21 - 24 .1900 175 .1690
24 - 30 .1800 200 .1652
30 - 36 .1750 225 .1618
36 - 42 .1700 250 .1587
42 - 48 .1650 275 .1560
48 - 66 .1600 300 .1536
66 - 84 .1550 325 .1514
84 - 120 .1500 350 .1494
120 - 156 .1450 375 .1476
156 - 192 .1400 400 .1459
192 - 228 .1350 425 .1443
228 - 264 .1300 450 .1427
264 - 300 .1275 475 .1413
300 - 336 .1250 500 .1399
336 - 372 .1225 525 .1385
372 - 408 .1200 550 .1372
408 - 444 .1175
444 - 480 .1150
480 - 516 .1125
Over 516 .1100
</TABLE>
Each fund's individual fund fee rate is stated below.
Fund Individual Fund Fee Rate
Fidelity Mid-Cap Stock Fund 0.30%
Fidelity Large Cap Stock Fund 0.30%
Fidelity Small Cap Selector 0.35%
Fidelity Intermediate Bond Fund 0.30%
Based on the average group net assets of the funds advised by FMR for
April 1999, Fidelity Mid-Cap Stock Fund's, Fidelity Large Cap Stock
Fund's, and Fidelity Small Cap Selector's annual basic fee rates
would be calculated as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Individual Fund Fee Rate
Fund Group Fee Rate Basic Fee Rate
Fidelity Mid-Cap Stock Fund 0.2824% + 0.30% = 0.5824%
Fidelity Large Cap Stock Fund 0.2824% + 0.30% = 0.5824%
Fidelity Small Cap Selector 0.2824% + 0.35% = 0.6324%
</TABLE>
Based on the average group net assets of the funds advised by FMR for
April 1999, Fidelity Intermediate Bond Fund's annual management fee
rate would be calculated as follows:
Group Fee Rate Individual Fund Fee Rate Management Fee Rate
0.1300% + 0.30% = 0.4300%
One-twelfth of this annual basic fee rate for Fidelity Mid-Cap
Stock Fund, Fidelity Large Cap Stock Fund, and Fidelity Small Cap
Selector, and annual management fee rate for Fidelity Intermediate
Bond Fund, is applied to each fund's net assets averaged for the
most recent month, giving a dollar amount, which is the fee for that
month.
COMPUTING THE PERFORMANCE ADJUSTMENT. The basic fee for each of
Fidelity Mid-Cap Stock Fund, Fidelity Large Cap Stock Fund, and
Fidelity Small Cap Selector is subject to upward or downward
adjustment, depending upon whether, and to what extent, the fund's
investment performance for the performance period exceeds, or is
exceeded by, the record of the S&P MidCap 400, S&P 500, and Russell
2000, respectively, (the Index) over the same period. The performance
period consists of the most recent month plus the previous 35 months.
For Fidelity Large Cap Stock Fund and Fidelity Small Cap Selector,
each percentage point of difference, calculated to the nearest 1.00%,
(up to a maximum difference of +/-10.00) is multiplied by a
performance adjustment rate of 0.02%. Thus, the maximum annualized
adjustment rate is +/-0.20%. For Fidelity Mid-Cap Stock Fund, each
percentage point of difference, calculated to the nearest 0.01%, (up
to a maximum difference of +/-10.00) is multiplied by a performance
adjustment rate of 0.02%. Thus, the maximum annualized adjustment rate
is +/-0.20%. This performance comparison is made at the end of each
month. One-twelfth (1/12) of this rate is then applied to each fund's
average net assets for the entire performance period, giving a dollar
amount which will be added to (or subtracted from) the basic fee.
Fidelity Mid-Cap Stock Fund's, Fidelity Large Cap Stock Fund's, and
Fidelity Small Cap Selector's performance is calculated based on
change in net asset value (NAV). For purposes of calculating the
performance adjustment, any dividends or capital gain distributions
paid by each fund are treated as if reinvested in fund shares at the
NAV as of the record date for payment. The record of the Index is
based on change in value and is adjusted for any cash distributions
from the companies whose securities compose the Index.
Because the adjustment to the basic fee for each of Fidelity Mid-Cap
Stock Fund, Fidelity Large Cap Stock Fund, and Fidelity Small Cap
Selector is based on the fund's performance compared to the investment
record of its respective Index, the controlling factor is not whether
the fund's performance is up or down per se, but whether it is up or
down more or less than the record of its respective Index. Moreover,
the comparative investment performance of each of Fidelity Mid-Cap
Stock Fund, Fidelity Large Cap Stock Fund, and Fidelity Small Cap
Selector is based solely on the relevant performance period without
regard to the cumulative performance over a longer or shorter period
of time.
During the fiscal year ended April 30, 1999, for its services as
investment adviser to the funds, FMR received fees (including the
group fee breakpoints voluntarily adopted by FMR and the amount of any
performance adjustment) as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Management Fee as a
Percentage of Average Net
Fund Management Fee Performance Adjustment Assets
Fidelity Mid-Cap Stock Fund $ 8,369,000 $ (1,558,000) .4961%
Fidelity Large Cap Stock Fund $ 1,531,999 $ (146,444) .5353%
Fidelity Small Cap Selector $ 3,720,757 $ (770,621) .5286%
Fidelity Intermediate Bond Fund $ 14,446,000 N/A .4330%
</TABLE>
FMR may, from time to time, agree to reimburse all or a portion of
each fund's total operating expenses (exclusive of interest, taxes,
securities lending fees, brokerage commissions, and extraordinary
expenses). FMR retains the ability to be repaid for these expense
reimbursements in the amount that expenses fall below the limit prior
to the end of the fiscal year.
Effective March 2, 1998, FMR has voluntarily agreed to reimburse
Fidelity Small Cap Stock Fund to the extent that the management
fee, other expenses and total operating expenses (excluding
interest, taxes, securities lending fees, brokerage commissions and
extraordinary expenses), as a percentage of its average net assets,
exceed 1.50%. This arrangement can be terminated by FMR at any time.
SUB-ADVISORY AGREEMENTS
(FIDELITY MID-CAP STOCK FUND, FIDELITY LARGE CAP STOCK FUND,
FIDELITY SMALL CAP SELECTOR, AND FIDELITY INTERMEDIATE BOND FUND)
On behalf of Fidelity Intermediate Bond Fund, FMR has entered into a
sub-advisory agreement with Fidelity Investments Money Management,
Inc. (FIMM), pursuant to which FIMM has primary responsibility for
providing portfolio investment management services to the fund. Under
the sub-advisory agreement, dated January 1, 1999, FMR pays FIMM fees
equal to 50% of the management fee payable to FMR under its management
contract with Fidelity Intermediate Bond Fund. The fees paid to FIMM
are not reduced by any voluntary or mandatory expense reimbursements
that may be in effect from time to time. For the fiscal year ended
April 30, 1999, FMR paid FIMM fees of $ 2,462,000 .
On behalf of Fidelity Mid-Cap Stock Fund, Fidelity Large Cap Stock
Fund, Fidelity Small Cap Selector, and Fidelity Intermediate Bond
Fund, FMR has entered into sub-advisory agreements with FMR U.K. and
FMR Far East. Pursuant to the sub-advisory agreements, FMR may receive
investment advice and research services outside the United States from
the sub-advisers. On behalf of each fund, FMR may also grant FMR U.K.
and FMR Far East investment management authority, as well as the
authority to buy and sell securities if FMR believes it would be
beneficial to the funds. Fidelity Mid-Cap Stock Fund's sub-advisory
agreements, dated June 26 , 1999, were last approved by Fidelity
Devonshire Trust, as the then sole shareholder of the fund, on June
26 , 1999, pursuant to an Agreement and Plan of Reorganization
approved by shareholders of the fund on November 18, 1998. The terms
of Fidelity Mid-Cap Stock Fund's current sub-advisory agreements
duplicate those of the sub-advisory agreements approved by
shareholders of the fund on November 18, 1998. Fidelity Large Cap
Stock Fund's sub-advisory agreements, dated May 18, 1995, were
approved by FMR, as the then sole shareholder of the fund, on June 5,
1995. Fidelity Small Cap Selector's sub-advisory agreements, dated
June 17, 1993, were approved by FMR, as the then sole shareholder of
the fund, on June 17 , 1993. Fidelity Intermediate Bond Fund's
sub-advisory agreements, dated December 1, 1994, were last approved by
shareholders on November 16, 1994. At that time, Fidelity Intermediate
Bond Fund's shareholders approved new sub-advisory agreements that not
only allowed FMR to receive investment advice and research services
from the sub-advisers, but also permitted FMR to grant the
sub-advisers investment management authority, as well as the authority
to buy and sell securities if FMR believed it would be beneficial to
the fund.
Currently, FMR U.K. and FMR Far East each focus on issuers in
countries other than the United States such as those in Europe, Asia,
and the Pacific Basin.
FMR U.K. and FMR Far East, which were organized in 1986, are wholly
owned subsidiaries of FMR. Under the sub-advisory agreements, FMR pays
the fees of FMR U.K. and FMR Far East. For providing non-discretionary
investment advice and research services, FMR pays FMR U.K. and FMR Far
East fees equal to 110% and 105%, respectively, of FMR U.K.'s and FMR
Far East's costs incurred in connection with providing investment
advice and research services.
On behalf of Fidelity Mid-Cap Stock Fund, Fidelity Large Cap Stock
Fund, Fidelity Small Cap Selector, and Fidelity Intermediate Bond
Fund, for providing discretionary investment management and executing
portfolio transactions, FMR pays FMR U.K. and FMR Far East a fee equal
to 50% of its monthly management fee rate (including any performance
adjustment for Fidelity Mid-Cap Stock Fund, Fidelity Large Cap Stock
Fund, and Fidelity Small Cap Selector) with respect to each fund's
average net assets managed by the sub-adviser on a discretionary
basis.
For providing investment advice and research services, on behalf of
Fidelity Mid-Cap Stock Fund, Fidelity Large Cap Stock Fund, and
Fidelity Small Cap Selector, the fees paid to the sub-advisers for the
fiscal year ended April 30, 1999 were as follows:
FMR U.K. FMR Far East
Fidelity Mid-Cap Stock Fund $ 6,746 $ 4,372
Fidelity Large Cap Stock Fund $ 12,628 $ 9,120
Fidelity Small Cap Selector $ 15,506 $ 12,001
For providing discretionary investment management and executing
portfolio transactions, on behalf of Fidelity Mid-Cap Stock Fund,
Fidelity Large Cap Stock Fund, and Fidelity Small Cap Selector, no
fees were paid by FMR to FMR U.K. and FMR Far East for the fiscal year
ended April 30, 1999.
For the fiscal year ended April 30, 1999, no fees were paid by FMR to
FMR U.K. and FMR Far East on behalf of Fidelity Intermediate Bond
Fund.
PORTFOLIO TRANSACTIONS
(FIDELITY MID-CAP STOCK FUND, FIDELITY LARGE CAP STOCK FUND,
FIDELITY SMALL CAP SELECTOR, AND FIDELITY INTERMEDIATE BOND FUND)
All orders for the purchase or sale of portfolio securities are
placed on behalf of each fund by FMR pursuant to authority contained
in the fund's management contract.
FMR may place agency transactions with National Financial Services
Corporation (NFSC) and Fidelity Brokerage Services (Japan), LLC
(FBSJ), indirect subsidiaries of FMR Corp., if the commissions are
fair, reasonable, and comparable to commissions charged by
non-affiliated, qualified brokerage firms for similar services.
The brokerage commissions paid to NFSC by Fidelity Mid-Cap Stock
Fund, Fidelity Large Cap Stock Fund, and Fidelity Small Cap Selector
for the fiscal year ended April 30, 1999 are listed in the following
table:
<TABLE>
<CAPTION>
<S> <C> <C>
Brokerage Commissions paid to % of Aggregate Commissions
NFSC paid to NFSC
Fidelity Mid-Cap Stock Fund $ 385,568 11.79%
Fidelity Large Cap Stock Fund $ 85,407 16.97%
Fidelity Small Cap Selector $ 85,677 4.91%
</TABLE>
For the fiscal year ended April 30, 1999, Fidelity Intermediate Bond
Fund paid no brokerage commissions to affiliated brokers.
SUBMISSION OF CERTAIN SHAREHOLDER PROPOSALS
The trust does not hold annual shareholder meetings. Shareholders
wishing to submit proposals for inclusion in a proxy statement for a
subsequent shareholder meeting should send their written proposals to
the Secretary of the Trust, 82 Devonshire Street, Boston,
Massachusetts 02109.
NOTICE TO BANKS, BROKER-DEALERS AND
VOTING TRUSTEES AND THEIR NOMINEES
Please advise the trust, in care of Fidelity Service Company,
Inc., P.O. Box 789, Boston, Massachusetts 02109, whether
other persons are beneficial owners of shares for which proxies are
being solicited and, if so, the number of copies of the Proxy
Statement and Annual Report you wish to receive in order to supply
copies to the beneficial owners of the respective shares.
EXHIBIT 1
FORM OF
AMENDED AND RESTATED DECLARATION OF TRUST
The language to be added to the current Declaration of Trust is
((underlined)), and the language to be deleted is set forth in
[brackets]. Headings that were underlined in the trust's current
Declaration of Trust remain underlined in this Exhibit.
((AMENDED AND)) RESTATED DECLARATION OF TRUST, made [June 16, 1994]
((______, 1999)) by each of the Trustees whose signature is affixed
hereto (the "Trustees")((.))
WHEREAS, the Trustees desire to ((amend and)) restate this
Declaration of Trust for the sole purpose of supplementing the
Declaration of Trust to incorporate amendments duly adopted; and
WHEREAS, this Trust was initially made on November 8, 1974 by Edward
C. Johnson 3d, Caleb Loring, Jr., George K. McKenzie and William R.
Spaulding in order to establish a trust fund for the investment and
reinvestment of funds contributed thereto;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust fund hereunder shall be held and managed in
[T]((t))rust under this ((Amended and)) [r]((R))estated Declaration of
Trust as herein set forth below.
ARTICLE I
NAME AND DEFINITIONS
NAME
SECTION 1. This Trust shall be known as [the] "Fidelity Commonwealth
Trust."
DEFINITIONS
SECTION 2. Wherever used herein, unless otherwise required by the
context or specifically provided:
(a) The [T]((t))erms "Affiliated Person," "Assignment," "Commission,"
"Interested Person," "Majority Shareholder Vote" (the 67% or 50%
requirement of the third sentence of Section 2(a)(42) of the 1940 Act,
whichever may be applicable)((,)) and "Principal Underwriter" shall
have the meanings given them in the 1940 Act, as [amended from time to
time] ((modified by or interpreted by any applicable order or orders
of the Commission or any rules or regulations adopted or
interpretative releases of the Commission thereunder));
(b) (("Bylaws" shall mean the bylaws of the Trust, if any, as amended
from time to time;))
(c) (("Class" refers to the class of Shares of a Series of the Trust
established in accordance with the provisions of Article III;))
(d) (("Declaration of Trust" means this Amended and Restated
Declaration of Trust, as further amended or restated, from time to
time;))
[(c)] (((e))) "Net Asset Value" means the net asset value of each
Series of the Trust ((or Class thereof)) determined in the manner
provided in Article X, Section 3;
[(d)] (((f))) "Shareholder" means a record owner of Shares of the
Trust;
[(f)] (((g))) "Shares" means the equal proportionate transferable
units of interest into which the beneficial interest of the Trust or
each Series shall be divided from time to time, including such
[c]((C))lass or [c]((C))lasses of Shares as the Trustees may from time
to time create and establish and including fractions of [s]((S))hares
as well as whole [s]((S))hares ((as)) consistent with the requirements
of Federal and/or state securities laws;
(h) "Series" refers to ((any)) series of Shares of the Trust
established in accordance with the provisions of Article III[.]((;))
[(b)] (((i))) [The] "Trust" refers to Fidelity Commonwealth Trust
((and reference to the Trust, when applicable to one or more Series of
the Trust, shall refer to any such Series));
[(e)] (((j))) [The] "Trustees" refer to the individual trustees in
their capacity as trustees hereunder of the Trust and their successor
or successors for the time being in office as such trustee or
trustees; ((and))
[(g)] (((k))) [The] "1940 Act" refers to the Investment Company Act
of 1940, as amended from time to time.
ARTICLE II
PURPOSE OF TRUST
The purpose of this Trust is to provide investors a continuous source
of managed investment in securities.
ARTICLE III
BENEFICIAL INTEREST
SHARES OF BENEFICIAL INTEREST
SECTION 1. The beneficial interest in the Trust shall be divided into
such transferable Shares of one or more separate and distinct Series
or [c]((C))lasses ((of Series)) as the Trustees shall((,)) from time
to time((,)) create and establish. The number of ((authorized)) Shares
((of each Series, and Class thereof,)) is unlimited((.)) [and]
[e]((E))ach Share shall be without par value and shall be fully paid
and nonassessable. The Trustees shall have full power and authority,
in their sole discretion, and without obtaining any prior
authorization or vote of the Shareholders [or] of any Series or
[c]((C))lass of [Shareholders of] the Trust [,] (((a))) to create and
establish (and to change in any manner) Shares or any Series or
[c]((C))lasses thereof with such preferences, voting powers, rights,
and privileges as the Trustees may((,)) from time to time((,))
determine[,] ((; (b))) to divide or combine the Shares or any Series
or [c]((C))lasses thereof into a greater or lesser number[,] ((; (c)))
to classify or reclassify any issued Shares into one or more Series or
[c]((C))lasses of Shares[,] ((; (d))) to abolish any one or more
Series or Classes of Shares; and (((e))) to take such other action
with respect to the Shares as the Trustees may deem desirable.
[ESTABLISHMENT OF SERIES]
((ESTABLISHMENT OF SERIES AND CLASSES))
SECTION 2. The establishment of any Series ((or Class thereof)) shall
be effective upon the adoption of a resolution by a majority of the
then Trustees setting forth such establishment and designation and the
relative rights and preferences of the Shares of such Series ((or
Class)). At any time that there are no Shares outstanding of any
particular Series or Class previously established and designated, the
Trustees may by a majority vote abolish [that] ((such)) Series ((or
Class)) and the establishment and designation thereof.
OWNERSHIP OF SHARES
SECTION 3. The ownership of Shares shall be recorded in the books of
the Trust ((or a transfer or similar agent)). The Trustees may make
such rules as they consider appropriate for the transfer of Shares and
similar matters. The record books of the Trust ((as kept by the Trust
or by any transfer or similar agent, as the case may be,)) shall be
conclusive as to who are the holders of Shares and as to the number of
Shares held from time to time by each Shareholder.
INVESTMENT IN THE TRUST
SECTION 4. The Trustees shall accept investments in the Trust from
such persons and on such terms as they may((,)) from time to time((,))
authorize. Such investments may be in the form of cash [or]((,))
securities((,)) ((or other property)) in which the appropriate Series
is authorized to invest, valued as provided in Article X, Section 3.
After the date of the initial contribution of capital, the number of
Shares to represent the initial contribution may in the Trustees'
discretion be considered as outstanding, and the amount received by
the Trustees on [the] account of the contribution shall be treated as
an asset of the Trust. Subsequent investments in the Trust shall be
credited to each Shareholder's account in the form of full Shares at
the Net Asset Value per Share next determined after the investment is
received; provided, however, that the Trustees may, in their sole
discretion [,] (a) impose a sales charge ((or other fee)) upon
investments in the Trust ((or Series or any Classes thereof,)) and (b)
issue fractional Shares.
[ASSETS AND LIABILITIES OF SERIES]
((ASSETS AND LIABILITIES OF SERIES AND CLASSES))
SECTION 5. All consideration received by the Trust for the issue or
sale of Shares of a particular Series, together with all assets in
which such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof, including any proceeds
derived from the sale, exchange, or liquidation of such assets, and
any funds or payments derived from any reinvestment of such proceeds
in whatever form the same may be, shall be referred to as "assets
belonging to" that Series. In addition, any assets, income, earnings,
profits, and proceeds thereof, funds, or payments [which] ((that)) are
not readily identifiable as belonging to any particular Series ((or
Class)), shall be allocated by the Trustees between and among one or
more of the Series ((or Classes)) in such manner as they, in their
sole discretion, deem fair and equitable. Each such allocation shall
be conclusive and binding upon the Shareholders of all Series ((or
Classes)) for all purposes[,] and shall be referred to as assets
belonging to that Series ((or Class)). The assets belonging to a
particular Series shall be so recorded upon the books of the Trust[,]
((or of its agent or agents)) and shall be held by the Trustees in
[T]((t))rust for the benefit of the holders of Shares of that Series.
The assets belonging to each particular Series shall be charged with
the liabilities of that Series and all expenses, costs, charges((,))
and reserves attributable to that Series((, except that liabilities
and expenses may, in the Trustees' discretion, be allocated solely to
a particular Class and, in which case, shall be borne by that Class.))
Any general liabilities, expenses, costs, charges((,)) or reserves of
the Trust [which] ((that)) are not readily identifiable as belonging
to any particular Series ((or Class)) shall be allocated and charged
by the Trustees between or among any one or more of the Series ((or
Classes)) in such manner as the Trustees((,)) in their sole
discretion((,)) deem fair and equitable[.] ((and shall be referred to
as "liabilities belonging to" that Series or Class.)) Each such
allocation shall be conclusive and binding upon the Shareholders of
all Series ((or Classes)) for all purposes. Any creditor of any Series
may look only to the assets of that Series to satisfy such creditor's
debt. ((No Shareholder or former Shareholder of any Series shall have
a claim on or any right to any assets allocated or belonging to any
other Series.))
NO PREEMPTIVE RIGHTS
SECTION 6. Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued by the
Trust or the Trustees.
[LIMITATION OF PERSONAL LIABILITY]
((STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY))
SECTION 7. ((Shares shall be deemed to be personal property giving
only the rights provided in this instrument. Every shareholder by
virtue of having become a shareholder shall be held to have expressly
assented and agreed to be bound by the terms hereof. No Shareholder of
the Trust and of each Series shall be personally liable for the debts,
liabilities, obligations, and expenses incurred by, contracted for, or
otherwise existing with respect to, the Trust or by or on behalf of
any Series.)) The Trustees shall have no power to bind any Shareholder
personally or to call upon any Shareholder for the payment of any sum
of money or assessment whatsoever other than such as the Shareholder
may((,)) at any time((,)) personally agree to pay by way of
subscription for any Shares or otherwise. Every note, bond,
contract((,)) or other undertaking issued by or on behalf of the Trust
or the Trustees relating to the Trust ((or to a Series)) shall include
a recitation limiting the obligation represented thereby to the Trust
((or to one or more Series)) and its ((or their)) assets (but the
omission of such a recitation shall not operate to bind any
Shareholder ((or Trustee))).
ARTICLE IV
THE TRUSTEES
MANAGEMENT OF THE TRUST
SECTION 1. The business and affairs of the Trust shall be managed by
the Trustees, and they shall have all powers necessary and desirable
to carry out that responsibility.
[ELECTION: INITIAL TRUSTEES]
((INITIAL TRUSTEES; ELECTION))
SECTION 2. ((The initial Trustees shall be at least three individuals
who shall affix their signatures hereto.)) On a date fixed by the
Trustees, the Shareholders shall elect not less than three Trustees. A
Trustee shall not be required to be a Shareholder of the Trust. [The
initial Trustees shall be Edward C. Johnson 3d, Caleb Loring, Jr.,
George K. McKenzie and William R. Spaulding and such other individuals
as the Board of Trustees shall appoint pursuant to Section 4 of this
Article IV.]
TERM OF OFFICE OF TRUSTEES
SECTION 3. The Trustees shall hold office during the lifetime of this
Trust, and until its termination as hereinafter provided; except (a)
that any Trustee may resign his trust by written instrument signed by
him and delivered to the other Trustees, which shall take effect upon
such delivery or upon such later date as is specified therein; (b)
that any Trustee may be removed at any time by written instrument,
signed by at least two-thirds (((2/3))) of the number of Trustees
prior to such removal, specifying the date when such removal shall
become effective; (c) that any Trustee who requests in writing to be
retired or who has become incapacitated by illness or injury may be
retired by written instrument signed by a majority of the other
Trustees, specifying the date of his retirement; and (d) a Trustee may
be removed at any [S]((s))pecial [M]((m))eeting of the Trust by a vote
of two-thirds (((2/3))) of the outstanding Shares.
RESIGNATION AND APPOINTMENT OF TRUSTEES
SECTION 4. In case of the declination, death, resignation,
retirement, ((or)) removal [, incapacity, or inability] of any of the
Trustees, or in case a vacancy shall, by reason of an increase in
number[,] ((of the Trustees,)) or for any other reason, exist, the
remaining Trustees shall fill such vacancy by appointing such other
person as they in their discretion shall see fit consistent with the
limitations under the 1940 Act. Such appointment shall be evidenced by
a written instrument signed by a majority of the Trustees in office or
by recording in the records of the Trust, whereupon the appointment
shall take effect. An appointment of a Trustee may be made by the
Trustees then in office in anticipation of a vacancy to occur by
reason of retirement, resignation((,)) or increase in number of
Trustees effective at a later date, provided that said appointment
shall become effective only at or after the effective date of said
retirement, resignation((,)) or increase in number of Trustees. As
soon as any Trustee so appointed shall have accepted this
[t]((T))rust, the [t]((T))rust estate shall vest in the new Trustee or
Trustees, together with the continuing Trustees, without any further
act or conveyance, and he shall be deemed a Trustee hereunder. The
((foregoing)) power of appointment is subject to the provisions of
Section 16(a) of the 1940 Act((, as modified by or interpreted by any
applicable order or orders of the Commission or any rules or
regulations adopted or interpretative releases of the Commission)).
[TEMPORARY ABSENCE OF TRUSTEE]
((TEMPORARY ABSENCE OF TRUSTEES))
SECTION 5. Any Trustee may, by power of attorney, delegate his power
for a period not exceeding six (((6))) months at any one time to any
other Trustee or Trustees, provided that in no case shall less than
two Trustees personally exercise the other powers hereunder except as
herein otherwise expressly provided.
NUMBER OF TRUSTEES
SECTION 6. The number of Trustees, not less than three (3) nor more
than twelve (12), serving hereunder at any time shall be determined by
the Trustees themselves.
Whenever a vacancy in the Board of Trustees shall occur, until such
vacancy is filled, or while any Trustee is [absent from the
Commonwealth of Massachusetts or, if not a domiciliary of
Massachusetts, is absent from his state of domicile, or is] physically
or mentally incapacitated by reason of disease or otherwise, the other
Trustees shall have all the powers hereunder and the certificate of
the other Trustees of such vacancy[, absence] or incapacity[,] shall
be conclusive[, provided, however, that no vacancy shall remain
unfilled for a period longer than six calendar months].
EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE
SECTION 7. The death, declination, resignation, retirement, removal,
incapacity, or inability of the Trustees, or any one of them, shall
not operate to annul the Trust or to revoke any existing agency
created pursuant to the terms of this Declaration of Trust.
OWNERSHIP OF ASSETS OF THE TRUST
SECTION 8. The assets of the Trust shall be held separate and apart
from any assets now or hereafter held in any capacity other than as
Trustee hereunder by the Trustees or any successor Trustees. All of
the assets of the Trust shall at all times be considered as vested in
the Trustees. No Shareholder shall be deemed to have a severable
ownership in any individual asset of the Trust or any right of
partition or possession thereof, but each Shareholder shall have a
proportionate undivided beneficial interest in the Trust.
ARTICLE V
POWERS OF THE TRUSTEES
POWERS
SECTION 1. The Trustees((,)) in all instances((,)) shall act as
principals[,] and are and shall be free from the control of the
Shareholders. The Trustees shall have full power and authority to do
any and all acts and to make and execute any and all contracts and
instruments that they may consider necessary or appropriate in
connection with the management of the Trust. ((Except as otherwise
provided herein or in the 1940 Act,)) [T]((t))he Trustees shall not in
any way be bound or limited by present or future laws or customs in
regard to trust investments, but shall have full authority and power
to make any and all investments [which] ((that)) they, in their
[uncontrolled] discretion, shall deem proper to accomplish the purpose
of this Trust. Subject to any applicable limitation in [the] ((this))
Declaration of Trust or the Bylaws of the Trust, ((if any,)) the
Trustees shall have power and authority:
(a) To invest and reinvest cash and other property, and to hold cash
or other property uninvested[,] without((,)) in any event((,)) being
bound [by] or limited by any present or future law or custom in regard
to investments by Trustees, and to sell, exchange, lend, pledge,
mortgage, hypothecate, write options on((,)) and lease any or all of
the assets of the Trust.
(b) To adopt Bylaws not inconsistent with this Declaration of Trust
providing for the conduct of the business of the Trust and to amend
and repeal them to the extent that they do not reserve that right to
the Shareholders.
(c) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate.
(d) To employ [a] ((one or more)) bank((s,)) [or] trust [company]
((companies, companies that are members of a national securities
exchange, or other entities permitted under the 1940 Act, as modified
by or interpreted by any applicable order or orders of the Commission
or any rules or regulations adopted or interpretative releases of the
Commission thereunder,)) as custodian((s)) of any assets of the Trust
subject to any conditions set forth in this Declaration of Trust or in
the Bylaws, if any.
(e) To retain a transfer agent and Shareholder servicing agent, or
both.
(f) To provide for the distribution of interests of the Trust either
through a [p]((P))rincipal [u]((U))nderwriter in the manner
hereinafter provided for or by the Trust itself, or both.
(g) To set record dates in the manner hereinafter provided for.
(h) To delegate such authority as they consider desirable to any
officers of the Trust and to any [agent,] ((investment adviser,
manager,)) custodian((,)) [or] underwriter((, or other agent or
independent contractor)).
(i) To sell or exchange any or all of the assets of the Trust,
subject to the provisions of Article XII, Section 4[(b)] hereof.
(j) To vote or give assent[,] or exercise any rights of ownership[,]
with respect to stock or other securities or property; and to execute
and deliver powers of attorney to such person or persons as the
Trustees shall deem proper, granting to such person or persons such
power and discretion with relation to securities or property as the
Trustees shall deem proper.
(k) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities.
(l) To hold any security or property in a form not indicating any
trust, whether in bearer, unregistered((,)) or other negotiable form;
or either in its own name or in the name of a custodian or a nominee
or nominees[, subject in either case to proper safeguards according to
the usual practice of Massachusetts trust companies or investment
companies].
(m) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes in
accordance with the provisions of Article III ((and to establish
Classes of such Series having relative rights, powers, and duties as
the Trustees may provide consistent with applicable laws)).
(n) To allocate assets, liabilities((,)) and expenses of the Trust to
a particular Series ((or Class, as appropriate,)) or to apportion the
same between or among two or more Series ((or Classes, as
appropriate)), provided that any liabilities or expenses incurred by a
particular Series ((or Class)) shall be payable solely out of the
assets belonging to that Series as provided for in Article III.
(o) To consent to or participate in any plan for the reorganization,
consolidation((,)) or merger of any corporation or concern, any
security of which is held in the Trust; to consent to any contract,
lease, mortgage, purchase, or sale of property by such corporation or
concern, and to pay calls or subscriptions with respect to any
security held in the Trust.
(p) To compromise, arbitrate, or otherwise adjust claims in favor of
or against the Trust or any matter in controversy((,)) including, but
not limited to, claims for taxes.
(q) To make distributions of income and of capital gains to
Shareholders in the manner hereinafter provided for.
(r) To borrow money((,)) and to pledge, mortgage((,)) or hypothecate
the assets of the Trust((,)) subject to the applicable requirements of
the 1940 Act.
(s) To establish, from time to time, a minimum total investment for
Shareholders[,] and to require the redemption of the Shares of any
Shareholders whose investment is less than such minimum upon giving
notice to such Shareholder.
(t) ((To operate as and carry on the business of an investment
company and to exercise all the powers necessary and appropriate to
the conduct of such operations)).
(( (u) To interpret the investment policies, practices or limitations
of any S eries.))
(( (v) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary,
suitable or proper for the accomplishment of any purpose or the
attainment of any object or the furtherance of any power hereinbefore
set forth, either alone or in association with others, and to do every
other act or thing incidental or appurtenant to or growing out of or
connected with the aforesaid business or purposes, objects or
powers.))
[(t)] (((w))) Notwithstanding any other provision hereof, to invest
all of the assets of any [s]((S))eries in a single open-end investment
company, including investment by means of transfer of such assets in
exchange for an interest or interests in such investment company.
((The foregoing clauses shall be construed both as objects and
powers, and the foregoing enumeration of specific powers shall not be
held to limit or restrict in any manner the general powers of the
Trustees. Any action by one or more of the Trustees in their capacity
as such hereunder shall be deemed an action on behalf of the Trust or
the applicable Series and not an action in an individual capacity.))
((The Trustees shall not be limited to investing in obligations
maturing before the possible termination of the Trust or any Series or
Class thereof.))
No one dealing with the Trustees shall be under any obligation to
make any inquiry concerning the authority of the Trustees, or to see
to the application of any payments made or property transferred to the
Trustees or upon their order.
TRUSTEES AND OFFICERS AS SHAREHOLDERS
SECTION 2. Any Trustee, officer or other agent of the Trust may
acquire, own and dispose of Shares to the same extent as if he were
not a Trustee, officer or agent; and the Trustees may issue and sell
or cause to be issued and sold Shares to and buy such Shares from any
such person [or] ((of)) any firm or company in which he is interested,
subject only to the general limitations herein contained as to the
sale and purchase of such Shares; and all subject to any restrictions
which may be contained in the Bylaws((, if any)).
ACTION BY THE TRUSTEES
SECTION 3. ((Except as otherwise provided herein or in the 1940
Act,)) [T]((t))he Trustees shall act by majority vote at a meeting
duly called or by unanimous written consent without a meeting or by
telephone consent provided a quorum of Trustees participate in any
such telephonic meeting, unless the 1940 Act requires that a
particular action be taken only at a meeting [of the] ((at which)) the
Trustees ((are present in person)). At any meeting of the Trustees, a
majority of the Trustees shall constitute a quorum. Meetings of the
Trustees may be called orally or in writing by the Chairman of the
Trustees or by any two other Trustees. Notice of the time, date((,))
and place of all meetings of the Trustees shall be given by the party
calling the meeting to each Trustee by telephone((,)) [or]
((telefax)), telegram((, or other electro-mechanical means)) sent to
his home or business address at least twenty-four(( (24))) hours in
advance of the meeting or by written notice mailed to his home or
business address at least seventy-two(( (72))) hours in advance of the
meeting. Notice need not be given to any Trustee who attends the
meeting without objecting to the lack of notice or who executes a
written waiver of notice with respect to the meeting. Subject to the
requirements of the 1940 Act, the Trustees by majority vote may
delegate to any one of their number their authority to approve
particular matters or take particular actions on behalf of the Trust.
((Written consents or waivers of Trustees may be executed in one or
more counterparts. Execution of a written consent or waiver and
delivery thereof to the Trust may be accomplished by telefax or other
electro-mechanical means.))
CHAIRMAN OF THE TRUSTEES
SECTION 4. The Trustees may appoint one of their number to be
Chairman of the Board of Trustees. The Chairman shall preside at all
meetings of the Trustees, shall be responsible for the execution of
policies established by the Trustees and the administration of the
Trust, and may be the chief executive, financial and accounting
officer of the Trust.
ARTICLE VI
EXPENSES OF THE TRUST
TRUSTEE REIMBURSEMENT
SECTION 1. Subject to the provisions of Article III, Section 5, the
Trustees shall be reimbursed from the Trust estate or the assets
belonging to the appropriate Series for their expenses and
disbursements, including, without limitation, fees and expenses of
Trustees who are not Interested Persons of the Trust[,]((;)) interest
expense, taxes, fees and commissions of every kind[,]((;)) expenses of
pricing Trust portfolio securities[,]((;)) expenses of issue,
repurchase and redemption of shares including expenses attributable to
a program of periodic repurchases or redemptions[,]((;)) expenses of
registering and qualifying the Trust and its Shares under Federal and
[S]((s))tate laws and regulations[,]((;)) charges of custodians,
transfer agents, and registrars[,]((;)) expenses of preparing and
setting up in type [P]((p))rospectuses and [S]((s))tatements of
[A]((a))dditional [I]((i))nformation[,]((;)) expenses of printing and
distributing [P]((p))rospectuses sent to existing Shareholders[,]((;))
auditing and legal expenses[,]((;)) reports to Shareholders[,]((;))
expenses of meetings of Shareholders and proxy solicitations
therefor[,]((;)) insurance expense[,]((;)) association membership
dues[,]((;)) and for such non-recurring items as may arise, including
litigation to which the Trust is a party[,]((;)) and for all losses
and liabilities by them incurred in administering the Trust, and for
the payment of such expenses, disbursements, losses, and liabilities
the Trustees shall have a lien on the assets belonging to the
appropriate Series prior to any rights or interests of the
Shareholders thereto. This section shall not preclude the Trust from
directly paying any of the aforementioned fees and expenses.
ARTICLE VII
INVESTMENT ADVISER, PRINCIPAL UNDERWRITER,
AND TRANSFER AGENT
INVESTMENT ADVISER
SECTION 1. Subject to a Majority Shareholder Vote, the Trustees
may((,)) in their discretion ((and)) from time to time((,)) enter into
an investment advisory or management contract(s) with respect to the
Trust or any Series thereof whereby the other party(ies) to such
contract(s) shall undertake to furnish the Trustees such management,
investment advisory, statistical((,)) and research facilities and
services and such other facilities and services, if any, and all upon
such terms and conditions, as the Trustees may((,)) in their
discretion((,)) determine. Notwithstanding any provisions of this
Declaration of Trust, the Trustees may authorize the investment
adviser(s) (subject to such general or specific instructions as the
Trustees may from time to time adopt) to effect purchases, sales((,))
or exchanges of portfolio securities and other investment instruments
of the Trust on behalf of the Trustees or may authorize any officer,
agent, or Trustee to effect such purchases, sales((,)) or exchanges
pursuant to recommendations of the investment adviser (and all without
further action by the Trustees). Any such purchases, sales((,)) and
exchanges shall be deemed to have been authorized by all of the
Trustees.
The Trustees may, subject to applicable requirements of the 1940 Act,
((as modified by or interpreted by any applicable order or orders of
the Commission or any rules or regulations adopted or interpretative
releases of the Commission thereunder,)) including those relating to
Shareholder approval, authorize the investment adviser to employ one
or more sub-advisers from time to time to perform such of the acts and
services of the investment adviser, and upon such terms and
conditions, as may be agreed upon between the investment adviser and
sub-adviser.
PRINCIPAL UNDERWRITER
SECTION 2. The Trustees may in their discretion from time to time
enter into [(a)] ((an exclusive or non-exclusive)) contract(s) ((on
behalf of the Trust or any Series or Class thereof)) providing for the
sale of the Shares, whereby the Trust may either agree to sell the
Shares to the other party to the contract or appoint such other party
its sales agent for such Shares. In either case, the contract shall be
on such terms and conditions as may be prescribed in the Bylaws, if
any, and such further terms and conditions as the Trustees may((,)) in
their discretion((,)) determine not inconsistent with the provisions
of this Article VII or of the Bylaws, if any [; and s] ((S))uch
contract may also provide for the repurchase or sale of Shares by such
other party as principal or as agent of the Trust.
TRANSFER AGENT
SECTION 3. The Trustees may((,)) in their discretion ((and)) from
time to time((,)) enter into [a] ((one or more)) transfer agency and
Shareholder service contract[(s)]((s)) whereby the other party shall
undertake to furnish the Trustees with transfer agency and Shareholder
services. [The] ((Such)) contracts shall be on such terms and
conditions as the Trustees may((,)) in their discretion((,)) determine
not inconsistent with the provisions of this Declaration of Trust or
of the Bylaws, if any. Such services may be provided by one or more
entities.
PARTIES TO CONTRACT
SECTION 4. Any contract of the character described in Sections 1, 2
and 3 of this Article VII or in Article IX hereof may be entered into
with any corporation, firm, partnership, trust or association,
although one or more of the Trustees or officers of the Trust may be
an officer, director, trustee, shareholder, or member of such other
party to the contract, and no such contract shall be invalidated or
rendered voidable by reason of the existence of any relationship, nor
shall any person holding such relationship be liable merely by reason
of such relationship for any loss or expense to the Trust under or by
reason of said contract or accountable for any profit realized
directly or indirectly therefrom, provided that the contract when
entered into was reasonable and fair and not inconsistent with the
provisions of this Article VII or the Bylaws, if any. The same person
(including a firm, corporation, partnership, trust, or association)
may be the other party to contracts entered into pursuant to Sections
1, 2 and 3 above or Article IX, and any individual may be financially
interested or otherwise affiliated with persons who are parties to any
or all of the contracts mentioned in this Section 4.
PROVISIONS AND AMENDMENTS
SECTION 5. Any contract entered into pursuant to Sections 1 and 2 of
this Article VII shall be consistent with and subject to the
requirements of Section 15 of the 1940 Act((, as modified by or
interpreted by any applicable order or orders of the Commission or any
rules or regulations adopted or interpretative releases of the
Commission)) ([including any amendments thereof] or other applicable
Act of Congress hereafter enacted)((,)) with respect to its
continuance in effect, ((its amendment,)) its termination, and the
method of authorization and approval of such contract or renewal
thereof[, and no amendment to any contract, entered into pursuant to
Section 1 shall be effective unless assented to by a Majority
Shareholder Vote].
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
SECTION 1. The Shareholders shall have power to vote [(i)](((a))) for
the election of Trustees as provided in Article IV, Section 2[,]((;))
[(ii)](((b))) for the removal of Trustees as provided in Article IV,
Section 3(d)[,]((;)) [(iii)](((c))) with respect to any investment
advisory or management contract as provided in Article VII, Sections 1
and 5[,]((;)) [(iv)](((d))) ((with respect to any termination, merger,
consolidation, reorganization, or sale of assets of the Trust or any
of its Series or Classes as provided in Article XII, Section 4; (e)))
with respect to the amendment of this Declaration of Trust as provided
in Article XII, Section 7[,]((;)) [(v)](((f))) to the same extent as
the shareholders of a Massachusetts business corporation, as to
whether or not a court action, proceeding or claim should be brought
or maintained derivatively or as a class action on behalf of the Trust
or the Shareholders, provided, however, that a Shareholder of a
particular Series shall not be entitled to bring any derivative or
class action on behalf of any other Series of the Trust[,]((;)) and
[(vi)](((g))) with respect to such additional matters relating to the
Trust as may be required or authorized by law, by this Declaration of
Trust, or the Bylaws of the Trust, if any, or any registration of the
Trust with the [Securities and Exchange] Commission ["the Commission"]
or any [S]((s))tate, as the Trustees may consider desirable.
On any matter submitted to a vote of the Shareholders, all Shares
shall be voted by individual Series, except ((as provided in the
following sentence and except)) [(i)](((a))) when required by the 1940
Act, Shares shall be voted in the aggregate and not by individual
Series; and [(ii)](((b))) when the Trustees have determined that the
matter affects only the interests of one or more Series, then only the
Shareholders of such Series shall be entitled to vote thereon. ((The
Trustees may also determine that a matter affects only the interests
of one or more Classes of a Series, in which case, any such matter
shall be voted on by such Class or Classes.)) A [s]((S))hareholder of
each Series ((or Class thereof)) shall be entitled to one vote for
each dollar of net asset value (number of Shares owned times net asset
value per share) [per share] of such Series(( or Class thereof)) on
any matter on which such [s]((S))hareholder is entitled to vote((,))
and each fractional dollar amount shall be entitled to a proportionate
fractional vote. There shall be no cumulative voting in the election
of Trustees. Shares may be voted in person or by proxy. Until Shares
are issued, the Trustees may exercise all rights of Shareholders and
may take any action required or permitted by law, this Declaration of
Trust or any Bylaws of the Trust,(( if any,)) to be taken by
Shareholders.
MEETINGS
SECTION 2. The first Shareholders' meeting shall be held as specified
in Section 2 of Article IV at the principal office of the Trust or
such other place as the Trustees may designate. Special meetings of
the Shareholders of any Series may be called by the Trustees and shall
be called by the Trustees upon the written request of Shareholders
owning at least one-tenth (((1/10))) of the outstanding Shares
entitled to vote. Whenever ten or more Shareholders meeting the
qualifications set forth in Section 16(c) of the 1940 Act, [as the
same may be amended from time to time,] ((as modified by or
interpreted by any applicable order or orders of the Commission or any
rules or regulations adopted or interpretative releases of the
Commission,)) seek the opportunity of furnishing materials to the
other Shareholders with a view to obtaining signatures on such a
request for a meeting, the Trustees shall comply with the provisions
of said Section 16(c) with respect to providing such Shareholders
access to the list of the Shareholders of record of the Trust or the
mailing of such materials to such Shareholders of record. Shareholders
shall be entitled to at least fifteen (((15))) days' notice of any
meeting.
QUORUM AND REQUIRED VOTE
SECTION 3. A majority of Shares entitled to vote in person or by
proxy shall be a quorum for the transaction of business at a
Shareholders' meeting, except that where any provision of law or of
this Declaration of Trust permits or requires that holders of any
Series ((or Class)) shall vote as a Series ((or Class))[,] then a
majority of the aggregate number of Shares of that Series ((or Class))
entitled to vote shall be necessary to constitute a quorum for the
transaction of business by that Series ((or Class)). Any lesser number
shall be sufficient for adjournments. Any adjourned session or
sessions may be held, within a reasonable time after the date set for
the original meeting, without the necessity of further notice. Except
when a larger vote is required ((by applicable law or)) by any
provision of this Declaration of Trust or the Bylaws, if any, a
majority of the Shares voted in person or by proxy shall decide any
questions and a plurality shall elect a Trustee, provided that where
any provision of law or of this Declaration of Trust permits or
requires that the holders of any Series ((or Class)) shall vote as a
Series ((or Class)), then a majority of the Shares of that Series ((or
Class)) voted on the matter shall decide that matter insofar as that
Series ((or Class)) is concerned. ((Shareholders may act by unanimous
written consent. Actions taken by a Series or Class may be consented
to unanimously in writing by Shareholders of that Series or Class.))
ARTICLE IX
CUSTODIAN
APPOINTMENT AND DUTIES
SECTION 1. The Trustees shall at all times employ a bank((,)) [or]
((a company that is a member of a national securities exchange,))
trust company, ((or other entity permitted under the 1940 Act, as
modified by or interpreted by any applicable order or orders of the
Commission or any rules or regulations adopted or interpretative
releases of the Commission thereunder,)) having capital, surplus((,))
and undivided profits of at least two million dollars ($2,000,000), or
such other amount [or such other entity] as shall be allowed by the
Commission or by the 1940 Act, as custodian with authority as its
agent, but subject to such restrictions, limitations and other
requirements, if any, as may be contained in the Bylaws of the
Trust((, if any)):
(1) to hold the securities owned by the Trust and deliver the same
upon written order or oral order, if confirmed in writing, or by such
electro-mechanical or electronic devices as are agreed to by the Trust
and the custodian, if such procedures have been authorized in writing
by the Trust;
(2) to receive and receipt for any moneys due to the Trust and
deposit the same in its own banking department or elsewhere as the
Trustees may direct; and
(3) to disburse such funds upon orders or vouchers;
and the Trust may also employ such custodian as its agent:
(1) to keep the books and accounts of the Trust and furnish clerical
and accounting services; and
(2) to compute, if authorized to do so [by the Trustees], the Net
Asset Value of any Series ((or Class thereof)) in accordance with the
provisions hereof; all upon such basis of compensation as may be
agreed upon between the Trustees and the custodian. [If so directed by
a Majority Shareholder Vote, the custodian shall deliver and pay over
all property of the Trust held by it as specified in such vote.]
The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and
services of the custodian, and upon such terms and conditions, as may
be agreed upon between the custodian and such sub-custodian and
approved by the Trustees, provided that in every case such
sub-custodian shall be a bank((,)) [or] ((a company that is a member
of a national securities exchange,)) trust company [organized under
the laws of the United States or one of the states thereof and]((, or
other entity permitted under the 1940 Act, as modified by or
interpreted by any applicable order or orders of the Commission or any
rules or regulations adopted or interpretative releases of the
Commission thereunder,)) having capital((,)) [and] surplus and
[individual] ((undivided)) profits of at least two million dollars
($2,000,000)((,)) or such other [person] ((amount)) as [may] ((shall))
be [permitted] ((allowed)) by the Commission [or otherwise in
accordance with] ((or by)) the 1940 Act [as from time to time
amended].
[CENTRAL CERTIFICATE SYSTEM]
((CENTRAL DEPOSITORY SYSTEM))
SECTION 2. Subject to such rules, regulations and orders as the
Commission may adopt, the Trustees may direct the custodian to deposit
all or any part of the securities owned by the Trust in a system for
the central handling of securities established by a national
securities exchange or a national securities association registered
with the Commission under the Securities Exchange Act of 1934[,] or
such other person as may be permitted by the Commission[,] or
otherwise in accordance with the 1940 Act [as from time to time
amended], pursuant to which system all securities of any particular
class or series of any issuer deposited within the system are treated
as fungible and may be transferred or pledged by bookkeeping entry
without physical delivery of such securities[,]((;)) provided that all
such deposits shall be subject to withdrawal only upon the order of
the Trust ((or its custodian, subcustodians, or other authorized
agents)).
ARTICLE X
[DISTRIBUTIONS AND REDEMPTIONS]
((DISTRIBUTIONS, REDEMPTIONS AND DETERMINATION OF NET ASSET VALUE))
DISTRIBUTIONS
SECTION 1.
(a) The Trustees may from time to time declare and pay dividends. The
amount of such dividends and the payment of them shall be wholly in
the discretion of the Trustees.
(b) The Trustees shall have the power, to the fullest extent
permitted by the laws of Massachusetts, at any time to declare and
cause to be paid dividends on Shares of a particular Series, from the
assets belonging to that Series, which dividends, at the election of
the Trustees, may be paid daily or otherwise pursuant to a standing
resolution or resolutions adopted only once or with such frequency as
the Trustees may determine, and may be payable in Shares of that
Series, ((or Classes thereof,)) at the election of each Shareholder of
that Series.
((The Trustees may adopt and offer to Shareholders such dividend
reinvestment plans, cash dividend payout plans, or related plans as
the Trustees shall deem appropriate.))
(c) Anything in this instrument to the contrary notwithstanding, the
Trustees may at any time declare and distribute ((a stock dividend))
pro rata among the Shareholders of a particular Series((, or Class
thereof,)) as of the record date of that Series ((or Class)) fixed as
provided in ((Article XII,)) Section 3 [hereof a "stock dividend"].
REDEMPTIONS
SECTION 2. In case any holder of record of Shares of a particular
Series ((or Class of a Series)) desires to dispose of his Shares, he
may deposit at the office of the transfer agent or other authorized
agent of that Series a written request or such other form of request
as the Trustees may((,)) from time to time((,)) authorize, requesting
that the Series purchase the Shares in accordance with this Section 2;
and the Shareholder so requesting shall be entitled to require the
Series to purchase, and the Series or the principal underwriter of the
Series shall purchase his said Shares, but only at the Net Asset Value
thereof (as described in Section 3 hereof). The Series shall make
payment for any such Shares to be redeemed, as aforesaid, in cash or
property from the assets of that Series((,)) and payment for such
Shares ((less any applicable deferred sales charges and/or fees))
shall be made by the Series or the principal underwriter of the Series
to the Shareholder of record within seven (7) days after the date upon
which the request is effective.
DETERMINATION OF NET ASSET VALUE AND VALUATION OF PORTFOLIO ASSETS
SECTION 3. The term "Net Asset Value" of any Series ((or Class))
shall mean that amount by which the assets of that Series[,] ((or
Class)) exceed its liabilities, all as determined by or under the
direction of the Trustees. Such value per Share shall be determined
separately for each Series ((or Class)) of Shares and shall be
determined on such days and at such times as the Trustees may
determine. Such determination shall be made with respect to securities
for which market quotations are readily available, at the market value
of such securities; and with respect to other securities and assets,
at the fair value as determined in good faith by the Trustees[;]((,))
provided, however, that the Trustees, without Shareholder approval,
may alter the method of appraising portfolio securities insofar as
permitted under the 1940 Act and the rules, regulations((,)) and
interpretations thereof promulgated or issued by the Commission or
insofar as permitted by any [O]((o))rder of the Commission applicable
to the Series. The Trustees may delegate any of their powers and
duties under this Section 3 with respect to appraisal of assets and
liabilities. At any time, the Trustees may cause the value [par]
((per)) Share last determined to be determined again in a similar
manner and may fix the time when such redetermined value shall become
effective.
SUSPENSION OF THE RIGHT OF REDEMPTION
SECTION 4. The Trustees may declare a suspension of the right of
redemption or postpone the date of payment as permitted under the 1940
Act. Such suspension shall take effect at such time as the Trustees
shall specify((,)) but not later than the close of business on the
business day next following the declaration of suspension, and
thereafter there shall be no right of redemption or payment until the
Trustees shall declare the suspension at an end. In the case of a
suspension of the right of redemption, a Shareholder may either
withdraw his request for redemption or receive payment based on the
Net Asset Value per Share existing after the termination of the
suspension. ((In the event that any Series is divided into Classes,
the provisions of this Section, to the extent applicable as determined
in the discretion of the Trustees and consistent with applicable law,
may be equally applied to each such Class.))
ARTICLE XI
LIMITATION OF LIABILITY AND INDEMNIFICATION
LIMITATION OF LIABILITY
SECTION 1. Provided they have exercised reasonable care and have
acted under the reasonable belief that their actions are in the best
interest of the Trust, the Trustees shall not be responsible for or
liable in any event for neglect or wrongdoing of them or any officer,
agent, employee((,)) or investment adviser of the Trust, but nothing
contained herein shall protect any Trustee against any liability to
which he would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence((,)) or reckless disregard of the duties
involved in the conduct of his office.
[INDEMNIFICATION]
((INDEMNIFICATION OF COVERED PERSONS))
SECTION 2.
(a) Subject to the exceptions and limitations contained in Section
(b) below:
(i) every person who is, or has been, a Trustee or officer of the
Trust (hereinafter referred to as "Covered Person") shall be
indemnified by the appropriate Series to the fullest extent permitted
by law against liability and against all expenses reasonably incurred
or paid by him in connection with any claim, action, suit((,)) or
proceeding in which he becomes involved as a party or otherwise by
virtue of his being or having been a Trustee or officer and against
amounts paid or incurred by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall
apply to all claims, actions, suits or proceedings (civil, criminal or
other, including appeals), actual or threatened while in office or
thereafter, and the words "liability" and "expenses" shall include,
without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered
Person:
(i) who shall have been adjudicated by a court or body before which
the proceeding was brought (A) to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his office((;)) or (B) not to have acted in good faith in the
reasonable belief that his action was in the best interest of the
Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence((,)) or reckless disregard of
the duties involved in the conduct of his office,
(A) by the court or other body approving the settlement;
(B) by at least a majority of those Trustees who are neither
[i]((I))nterested [p]((P))ersons of the Trust nor are parties to the
matter based upon a review of readily available facts (as opposed to a
full trial-type inquiry); or
(C) by written opinion of independent legal counsel based upon a
review of readily available facts (as opposed to a full trial-type
inquiry);
provided, however, that any Shareholder may, by appropriate legal
proceedings, challenge any such determination by the Trustees, or by
independent counsel.
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall
not be exclusive of or affect any other rights to which any Covered
Person may now or hereafter be entitled, shall continue as to a person
who has ceased to be such Trustee or officer((,)) and shall inure to
the benefit of the heirs, executors, and administrators of such a
person. Nothing contained herein shall affect any rights to
indemnification to which Trust personnel, other than Trustees and
officers, and other persons may be entitled by contract or otherwise
under law.
(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit((,)) or proceeding of the character
described in [p]((P))aragraph (a) of this Section 2 may be paid by the
applicable Series from time to time prior to final disposition thereof
upon receipt of an undertaking by or on behalf of such Covered Person
that such amount will be paid over by him to the applicable Series if
it is ultimately determined that he is not entitled to indemnification
under this Section 2; provided, however, that either [(a)](((i))) such
Covered Person shall have provided appropriate security for such
undertaking[,]((;)) [(b)](((ii) ))the Trust is insured against losses
arising out of any such advance payments((;)) or [(c)](((iii))) either
a majority of the Trustees who are neither interested persons of the
Trust nor parties to the matter, or independent legal counsel in a
written opinion, shall have determined, based upon a review of readily
available facts (as opposed to a trial-type inquiry or full
investigation), that there is reason to believe that such Covered
Person will be found entitled to indemnification under this Section 2.
[SHAREHOLDERS]
((INDEMNIFICATION OF SHAREHOLDERS))
SECTION 3. In case any Shareholder or former Shareholder of any
Series of the Trust shall be held to be personally liable solely by
reason of his being or having been a Shareholder and not because of
his acts or omissions or for some other reason, the Shareholder or
former Shareholder (or his heirs, executors, administrators, or other
legal representatives or((,)) in the case of a corporation or other
entity, its corporate or other general successor) shall be entitled
out of the assets belonging to the applicable Series to be held
harmless from and indemnified against all loss and expense arising
from such liability. The Series shall, upon request by the
Shareholder, assume the defense of any claim made against the
Shareholder for any act or obligation of the Series and satisfy any
judgment thereon.
ARTICLE XII
MISCELLANEOUS
[TRUST NOT A PARTNERSHIP]
((TRUST NOT A PARTNERSHIP, ETC.))
SECTION 1. It is hereby expressly declared that a trust(( is created
hereby)) and not a partnership [is created hereby]((,)) ((joint stock
association, corporation, bailment, or any form of a legal
relationship other than a trust)). No Trustee hereunder shall have any
power to ((personally)) bind [personally] either the Trust's officers
or any Shareholder. All persons extending credit to, contracting
with((,)) or having any claim against the Trust or the Trustees shall
look only to the assets of the appropriate Series for payment under
such credit, contract, or claim; and neither the Shareholders nor the
Trustees, nor any of their agents, whether past, present, or future,
shall be personally liable therefor. Nothing in this Declaration of
Trust shall protect a Trustee against any liability to which the
Trustee would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence((,)) or reckless disregard of the duties
involved in the conduct of the office of Trustee hereunder.
TRUSTEES' GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY
SECTION 2. The exercise by the Trustees of their powers and
discretions hereunder in good faith and with reasonable care under the
circumstances then prevailing, shall be binding upon everyone
interested. Subject to the provisions of Section 1 of this Article XII
and to Article XI, the Trustees shall not be liable for errors of
judgment or mistakes of fact or law. The Trustees may take advice of
counsel or other experts with respect to the meaning and operation of
this Declaration of Trust, and subject to the provisions of Section 1
of this Article XII and to Article XI, shall be under no liability for
any act or omission in accordance with such advice or for failing to
follow such advice. The Trustees shall not be required to give any
bond as such, nor any surety if a bond is obtained.
ESTABLISHMENT OF RECORD DATES
SECTION 3. The Trustees may close the stock transfer books of the
Trust for a period not exceeding sixty (60) days preceding the date of
any meeting of Shareholders, or the date for the payment of any
dividends, or the date for the allotment of rights, or the date when
any change or conversion or exchange of Shares shall go into effect;
or in lieu of closing the stock transfer books as aforesaid, the
Trustees may fix in advance a date not exceeding sixty (60) days
preceding the date of any meeting of Shareholders, or the date for
payment of any dividend((s)), or the date for the allotment of rights,
or the date when any change or conversion or exchange of Shares shall
go into effect, as a record date for the determination of the
Shareholders entitled to notice of, and to vote at, any such meeting,
or entitled to receive payment of any such dividend, or to any such
allotment of rights, or to exercise the rights in respect of any such
change, conversion or exchange of Shares, and in such case such
Shareholders and only such Shareholders as shall be Shareholders of
record on the date so fixed shall be entitled to such notice of, and
to vote at, such meeting, or to receive payment of such dividend, or
to receive such allotment or rights, or to exercise such rights, as
the case may be, notwithstanding any transfer of any Shares on the
books of the Trust after any such record date fixed or aforesaid.
[TERMINATION OF TRUST]
((DURATION; TERMINATION OF TRUST, A SERIES OR A CLASS; MERGERS, ETC.))
[Section 4]
[(a)] ((SECTION 4.1. DURATION)). [This] ((The)) Trust shall continue
without limitation of time, but subject to the provisions of
[sub-section (b) of this Section 4] ((this Article XII.))
[(b)] [Subject to a Majority Shareholder Vote of each Series affected
by the matter or, if applicable, to a Majority Shareholder Vote of the
Trust, the Trustees may]
[(i) sell and convey the assets of the Trust or any affected Series
to another trust, partnership, association or corporation organized
under the laws of any state which is a diversified open-end management
investment company as defined in the 1940 Act, for adequate
consideration which may include the assumption of all outstanding
obligations, taxes and other liabilities, accrued or contingent, of
the Trust or any affected Series, and which may include shares of
beneficial interest or stock of such trust, partnership, association
or corporation; or]
[(ii) at any time sell and convert into money all of the assets of
the Trust or any affected Series.]
[Upon making provision for the payment of such liabilities in either
(i) or (ii), by such assumption or otherwise, the Trustees shall
distribute the remaining proceeds or assets (as the case may be)
ratably among the holders of the Shares of the Trust or any affected
Series then outstanding.]
[(c) Upon completion of the distribution of the remaining proceeds or
the remaining assets as provided in sub-section (b), the Trust or any
affected Series shall terminate and the Trustees shall be discharged
of any and all further liabilities and duties hereunder and the right,
title and interest of all parties shall be cancelled and discharged.]
((SECTION 4.2.TERMINATION OF THE TRUST, A SERIES OR A CLASS. (a)
Subject to applicable Federal and state law, the Trust or any Series
or Class thereof may be terminated (i) by Majority Shareholder Vote of
the Trust, each Series affected, or each Class affected, as the case
may be; or (ii) without the vote or consent of Shareholders by a
majority of the Trustees either at a meeting or by written consent.
The Trustees shall provide written notice to the affected Shareholders
of a termination effected under clause (ii) above. Upon the
termination of the Trust or the Series or Class,))
(((i) the Trust or the Series or Class shall carry on no business
except for the purpose of winding up its affairs;))
(((ii) the Trustees shall proceed to wind up the affairs of the
Trust or the Series or Class, and all of the powers of the Trustees
under this Declaration of Trust shall continue until the affairs of
the Trust shall have been wound up, including the power to fulfill or
discharge the contracts of the Trust or the Series or Class thereof;
collect its assets; sell, convey, assign, exchange, transfer, or
otherwise dispose of all or any part of the remaining Trust property
or Trust property allocated or belonging to such Series or Class to
one or more persons at public or private sale for consideration that
may consist in whole or in part of cash, securities, or other property
of any kind; discharge or pay its liabilities; and do all other acts
appropriate to liquidate its business; provided that any sale,
conveyance, assignment, exchange, transfer, or other disposition of
all or substantially all the Trust property or Trust property
allocated or belonging to such Series or Class (other than as provided
in (iii) below) shall require Shareholder approval in accordance with
Section 4.3 below; and))
(((iii) after paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities, and
refunding agreements as they deem necessary for their protection, the
Trustees may distribute the remaining Trust property or the remaining
property of the terminated Series or Class, in cash or in kind or
partly each, among the Shareholders of the Trust or the Series or
Class according to their respective rights; and))
(((b) after termination of the Trust or the Series or Class and
distribution to the Shareholders as herein provided, a majority of the
Trustees shall execute and lodge among the records of the Trust and
file with the Secretary of The Commonwealth of Massachusetts, as
appropriate, an instrument in writing setting forth the fact of such
termination, and the Trustees shall thereupon be discharged from all
further liabilities and duties with respect to the Trust or the
terminated Series or Class, and the rights and interests of all
Shareholders of the Trust or the terminated Series or Class shall
thereupon cease.))
((SECTION 4.3. MERGER, CONSOLIDATION, AND SALE OF ASSETS. Subject to
applicable Federal and state law and except as otherwise provided in
Section 4.4 below, the Trust or any Series thereof may merge or
consolidate with any other corporation, association, trust, or other
organization or may sell, lease, or exchange all or substantially all
of the Trust property or Trust property allocated or belonging to such
Series, including its good will, upon such terms and conditions and
for such consideration when and as authorized at any meeting of
Shareholders called for such purpose by a Majority Shareholder Vote of
the Trust or affected Series, as the case may be. Any such merger,
consolidation, sale, lease, or exchange shall be deemed for all
purposes to have been accomplished under and pursuant to Massachusetts
law.))
((SECTION 4.4. INCORPORATION; REORGANIZATION. Subject to applicable
Federal and state law, the Trustees may without the vote or consent of
Shareholders cause to be organized or assist in organizing a
corporation or corporations under the laws of any jurisdiction or any
other trust, partnership, limited liability company, association, or
other organization to take over all of the Trust property or the Trust
property allocated or belonging to such Series or to carry on any
business in which the Trust shall directly or indirectly have any
interest, and to sell, convey and transfer the Trust property or the
Trust property allocated or belonging to such Series to any such
corporation, trust, limited liability company, partnership,
association, or organization in exchange for the shares or securities
thereof or otherwise, and to lend money to, subscribe for the shares
or securities of, and enter into any contracts with any such
corporation, trust, partnership, limited liability company,
association, or organization, or any corporation, partnership, limited
liability company, trust, association, or organization in which the
Trust or such Series holds or is about to acquire shares or any other
interest. Subject to applicable Federal and state law, the Trustees
may also cause a merger or consolidation between the Trust or any
successor thereto and any such corporation, trust, partnership,
limited liability company, association, or other organization. Nothing
contained herein shall be construed as requiring approval of
Shareholders for the Trustees to organize or assist in organizing one
or more corporations, trusts, partnerships, limited liability
companies, associations, or other organizations and selling,
conveying, or transferring the Trust property or a portion of the
Trust property to such organization or entities; provided, however,
that the Trustees shall provide written notice to the affected
Shareholders of any transaction whereby, pursuant to this Section 4.4,
the Trust or any Series thereof sells, conveys, or transfers
substantially all of its assets to another entity or merges or
consolidates with another entity.))
FILING OF COPIES, REFERENCES, AND HEADINGS
SECTION 5. The original or a copy of this instrument and of each
[d]((D))eclaration of [t]((T))rust supplemental hereto shall be kept
at the office of the Trust where it may be inspected by any
Shareholder. A copy of this instrument and of each supplemental
[d]((D))eclaration of [t]((T))rust shall be filed by the Trustees with
the Secretary of [t]((T))he Commonwealth of Massachusetts and the
Boston City Clerk, as well as any other governmental office where such
filing may from time to time be required. Anyone dealing with the
Trust may rely on a certificate by an officer or Trustee of the Trust
as to whether or not any such supplemental [d]((D))eclarations of
[t]((T))rust have been made and as to any matters in connection with
the Trust hereunder, and with the same effect as if it were the
original, may rely on a copy certified by an officer or Trustee of the
Trust to be a copy of this instrument or of any such supplemental
[d]((D))eclaration of [t]((T))rust. In this instrument or in any such
supplemental [d]((D))eclaration of [t]((T))rust, references to this
instrument[,] and all expressions like "herein," "hereof" and
"hereunder," shall be deemed to refer to this instrument as amended or
affected by any such supplemental [d]((D))eclaration of [t]((T))rust.
Headings are placed herein for convenience of reference only and in
case of any conflict, the text of this instrument, rather than the
headings, shall control. This instrument may be executed in any number
of counterparts each of which shall be deemed an original.
APPLICABLE LAW
SECTION 6. The Trust set forth in this instrument is made in
[t]((T))he Commonwealth of Massachusetts, and it is created under and
is to be governed by and construed and administered according to the
laws of said Commonwealth. The Trust shall be of the type commonly
called a Massachusetts business trust, and without limiting the
provisions hereof, the Trust may exercise all powers which are
ordinarily exercised by such a trust((, and the absence of a specific
reference herein to any such power, privilege, or action shall not
imply that the Trust may not exercise such power or privilege or take
such actions)).
AMENDMENTS
SECTION 7. [If authorized by votes of the Trustees and a Majority
Shareholder Vote, or by any larger vote which may be required by
applicable law or this Declaration of Trust in any particular case,]
((Except as specifically provided herein,)) the Trustees [shall]
((may, without shareholder vote,)) amend or otherwise supplement this
[instrument,] ((Declaration of Trust)) by making ((an amendment,)) a
[d]((D))eclaration of [t]((T))rust supplemental hereto[, which
thereafter shall form a part hereof, except that an amendment which
shall affect the Shareholders of one or more Series but not the
Shareholders of all outstanding Series shall be authorized by vote of
the Shareholders holding a majority of the Shares entitled to vote of
each Series affected and no vote of Shareholders of a Series not
affected shall be required. Amendments having the purpose of changing
the name of the Trust or of supplying any omission, curing any
ambiguity or curing, correcting or supplementing any defective or
inconsistent provision contained herein shall not require
authorization by Shareholder vote. Copies of the supplemental
declaration of trust shall be filed as specified in Section 5 of this
Article XII.] ((or an amended and restated Declaration of Trust.
Shareholders shall have the right to vote (a) on any amendment that
would affect their right to vote granted in Section 1 of Article VIII;
(b) on any amendment that would alter the maximum number of Trustees
permitted under Section 6 of Article IV; (c) on any amendment to this
Section 7; (d) on any amendment as may be required by law or by the
Trust's registration statement filed with the Commission; and (e) on
any amendment submitted to them by the Trustees. Any amendment
required or permitted to be submitted to Shareholders that, as the
Trustees determine, shall affect the Shareholders of one or more
Series or Classes shall be authorized by vote of the Shareholders of
each Series or Class affected and no vote of shareholders of a Series
or Class not affected shall be required. Notwithstanding anything else
herein, any amendment to Article XI shall not limit the rights to
indemnification or insurance provided therein with respect to action
or omission of Covered Persons prior to such amendment.))
FISCAL YEAR
SECTION 8. The fiscal year of the Trust shall end on a specified date
as set forth in the Bylaws, if any, provided, however, that the
Trustees may, without Shareholder approval, change the fiscal year of
the Trust.
USE OF THE WORD "FIDELITY"
SECTION 9. Fidelity Management & Research Company ("FMR") has
consented to the use by any Series of the Trust of the identifying
word "Fidelity" in the name of any Series of the Trust at some future
date. Such consent is conditioned upon the employment of FMR ((or a
subsidiary or affiliate thereof)) as investment adviser of each Series
of the Trust. As between the Trust and itself, FMR controls the use of
the name of the Trust insofar as such name contains the identifying
word "Fidelity." FMR may from time to time use the identifying word
"Fidelity" in other connections and for other purposes, including,
without limitation, in the names of other investment companies,
corporations, or businesses [which] ((that)) it may manage, advise,
sponsor or own or in which it may have a financial interest. FMR may
require the Trust or any Series thereof to cease using the identifying
word "Fidelity" in the name of the Trust or any Series thereof if the
Trust or any Series thereof ceases to employ FMR or a subsidiary or
affiliate thereof as investment adviser.
PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS
((SECTION 10.(a) The provisions of this Declaration of Trust are
severable, and, if the Trustees shall determine, with the advice of
counsel, that any of such provisions is in conflict with the 1940 Act,
the regulated investment company provisions of the Internal Revenue
Code or with other applicable laws and regulations, the conflicting
provision shall be deemed never to have constituted a part of this
Declaration of Trust; provided, however, that such determination shall
not affect any of the remaining provisions of this Declaration of
Trust or render invalid or improper any action taken or omitted prior
to such determination.))
(((b) If any provision of this Declaration Trust shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such
jurisdiction and shall not in any manner affect such provisions in any
other jurisdiction or any other provision of this Declaration of Trust
in any jurisdiction.))
IN WITNESS WHEREOF, the undersigned, being all of the Trustees of the
Trust, have executed this instrument [this 16th day of June, 1994]
((as of the date set forth above)).
SIGNATURE LINES OMITTED
EXHIBIT 2
((UNDERLINED)) LANGUAGE WILL BE ADDED
[BRACKETED] LANGUAGE WILL BE DELETED
FORM OF
MANAGEMENT CONTRACT
BETWEEN
FIDELITY COMMONWEALTH TRUST:
FIDELITY LARGE CAP STOCK FUND
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
[AGREEMENT] ((AMENDMENT)) made this [18th day of May 1995] ((___ day
of ____ 1999)), by and between Fidelity Commonwealth Trust, a
Massachusetts business trust which may issue one or more series of
shares of beneficial interest (hereinafter called the "Fund"), on
behalf of Fidelity Large Cap Stock Fund (hereinafter called the
"Portfolio"), and Fidelity Management & Research Company, a
Massachusetts corporation (hereinafter called the "Adviser") as set
forth in its entirety below.
((Required authorization and approval by shareholders and Trustees
having been obtained, the Fund, on behalf of the Portfolio, and the
Adviser hereby consent, pursuant to Paragraph 6 of the existing
Management Contract dated May 18, 1995, to a modification of said
Contract in the manner set forth below. The Amended Management
Contract shall, when executed by duly authorized officers of the Fund
and the Adviser, take effect on ______________, 1999.))
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the
supervision of the Fund's Board of Trustees, direct the investments of
the Portfolio in accordance with the investment objective, policies
and limitations as provided in the Portfolio's Prospectus or other
governing instruments, as amended from time to time, the Investment
Company Act of 1940 and rules thereunder, as amended from time to time
(the "1940 Act"), and such other limitations as the Portfolio may
impose by notice in writing to the Adviser. The Adviser shall also
furnish for the use of the Portfolio office space and all necessary
office facilities, equipment and personnel for servicing the
investments of the Portfolio; and shall pay the salaries and fees of
all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all
personnel of the Fund or the Adviser performing services relating to
research, statistical and investment activities. The Adviser is
authorized, in its discretion and without prior consultation with the
Portfolio, to buy, sell, lend and otherwise trade in any stocks, bonds
and other securities and investment instruments on behalf of the
Portfolio. The investment policies and all other actions of the
Portfolio are and shall at all times be subject to the control and
direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for
the performance by its affiliates of) the management and
administrative services necessary for the operation of the Fund. The
Adviser shall, subject to the supervision of the Board of Trustees,
perform various services for the Portfolio, including but not limited
to: (i) providing the Portfolio with office space, equipment and
facilities (which may be its own) for maintaining its organization;
(ii) on behalf of the Portfolio, supervising relations with, and
monitoring the performance of, custodians, depositories, transfer and
pricing agents, accountants, attorneys, underwriters, brokers and
dealers, insurers and other persons in any capacity deemed to be
necessary or desirable; (iii) preparing all general shareholder
communications, including shareholder reports; (iv) conducting
shareholder relations; (v) maintaining the Fund's existence and its
records; (vi) during such times as shares are publicly offered,
maintaining the registration and qualification of the Portfolio's
shares under federal and state law; and (vii) investigating the
development of and developing and implementing, if appropriate,
management and shareholder services designed to enhance the value or
convenience of the Portfolio as an investment vehicle.
The Adviser shall also furnish such reports, evaluations, information
or analyses to the Fund as the Fund's Board of Trustees may request
from time to time or as the Adviser may deem to be desirable. The
Adviser shall make recommendations to the Fund's Board of Trustees
with respect to Fund policies, and shall carry out such policies as
are adopted by the Trustees. The Adviser shall, subject to review by
the Board of Trustees, furnish such other services as the Adviser
shall from time to time determine to be necessary or useful to perform
its obligations under this Contract.
(c) The Adviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or
dealers selected by the Adviser, which may include brokers or dealers
affiliated with the Adviser. The Adviser shall use its best efforts to
seek to execute portfolio transactions at prices which are
advantageous to the Portfolio and at commission rates which are
reasonable in relation to the benefits received. In selecting brokers
or dealers qualified to execute a particular transaction, brokers or
dealers may be selected who also provide brokerage and research
services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) to the Portfolio and/or the other
accounts over which the Adviser or its affiliates exercise investment
discretion. The Adviser is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess
of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Adviser determines in
good faith that such amount of commission is reasonable in relation to
the value of the brokerage and research services provided by such
broker or dealer. This determination may be viewed in terms of either
that particular transaction or the overall responsibilities which the
Adviser and its affiliates have with respect to accounts over which
they exercise investment discretion. The Trustees of the Fund shall
periodically review the commissions paid by the Portfolio to determine
if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor.
The Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of
the Fund are or may be or become interested in the Adviser as
directors, officers or otherwise and that directors, officers and
stockholders of the Adviser are or may be or become similarly
interested in the Fund, and that the Adviser may be or become
interested in the Fund as a shareholder or otherwise.
3. The Adviser will be compensated on the following basis for the
services and facilities to be furnished hereunder. The Adviser shall
receive a monthly management fee, payable monthly as soon as
practicable after the last day of each month, composed of a Basic Fee
and a Performance Adjustment. The Performance Adjustment is added to
or subtracted from the Basic Fee depending on whether the Portfolio
experienced better or worse performance than the Standard & Poor's
Composite Index of 500 Stocks (the "Index"). The Performance
Adjustment is not cumulative. An increased fee will result even though
the performance of the Portfolio over some period of time shorter than
the performance period has been behind that of the Index, and,
conversely, a reduction in the fee will be made for a month even
though the performance of the Portfolio over some period of time
shorter than the performance period has been ahead of that of the
Index. The Basic Fee and the Performance Adjustment will be computed
as follows:
(a) Basic Fee Rate: The annual Basic Fee Rate shall be the sum of
the Group Fee Rate and the Individual Fund Fee Rate calculated to the
nearest millionth decimal place as follows:
(i) Group Fee Rate. The Group Fee Rate shall be based upon the
monthly average of the net assets of the registered investment
companies having Advisory and Service or Management Contracts with the
Adviser (computed in the manner set forth in the fund's Declaration of
Trust or other organizational document) determined as of the close of
business on each business day throughout the month. The Group Fee Rate
shall be determined on a cumulative basis pursuant to the following
schedule:
Average Net Assets Annualized Fee Rate (for each
level)
0 - $ 3 billion .5200%
3 - 6 .4900%
6 - 9 .4600%
9 - 12 .4300%
12 - 15 .4000%
15 - 18 .3850%
18 - 21 .3700%
21 - 24 .3600%
24 - 30 .3500%
30 - 36 .3450%
36 - 42 .3400%
42 - 48 .3350%
48 - 66 .3250%
66 - 84 .3200%
84 - 102 .3150%
102 - 138 .3100%
138 - 174 .3050%
174 - 210 .3000%
210 - 246 .2950%
246 - 282 .2900%
282 - 318 .2850%
318 - 354 .2800%
354 - 390 .2750%
[Over 390] [.2700%]
((390)) - ((426)) ((.2700%))
((426)) - ((462)) ((.2650%))
((462)) - ((498)) ((.2600%))
((498)) - ((534)) ((.2550%))
((Over)) ((534)) ((.2500%))
(ii) Individual Fund Fee Rate. The Individual Fund Fee Rate shall
be .30%.
(b) Basic Fee. One-twelfth of the Basic Fee Rate shall be applied to
the average of the net assets of the Portfolio (computed in the manner
set forth in the Fund's Declaration of Trust or other organizational
document) determined as of the close of business on each business day
throughout the month. The resulting dollar amount comprises the Basic
Fee.
(c) Performance Adjustment Rate: The Performance Adjustment Rate is
0.02% for each percentage point (the performance of the Portfolio and
the Index each being calculated to the nearest [percentage point]
((.01%))) that the Portfolio's investment performance for the
performance period was better or worse than the record of the Index as
then constituted. The maximum performance adjustment rate is 0.20%.
The performance period will commence with the first day of the first
full month following the Portfolio's commencement of operations.
During the first eleven months of the performance period for the
Portfolio, there will be no performance adjustment. Starting with the
twelfth month of the performance period, the performance adjustment
will take effect. Following the twelfth month a new month will be
added to the performance period until the performance period equals 36
months. Thereafter the performance period will consist of the current
month plus the previous 35 months.
The Portfolio's investment performance will be measured by comparing
(i) the opening net asset value of one share of the Portfolio on the
first business day of the performance period with (ii) the closing net
asset value of one share of the Portfolio as of the last business day
of such period. In computing the investment performance of the
Portfolio and the investment record of the Index, distributions of
realized capital gains, the value of capital gains taxes per share
paid or payable on undistributed realized long-term capital gains
accumulated to the end of such period and dividends paid out of
investment income on the part of the Portfolio, and all cash
distributions of the securities included in the Index, will be treated
as reinvested in accordance with Rule 205-1 or any other applicable
rules under the Investment Advisers Act of 1940, as the same from time
to time may be amended.
(d) Performance Adjustment. One-twelfth of the annual Performance
Adjustment Rate will be applied to the average of the net assets of
the Portfolio (computed in the manner set forth in the Fund's
Declaration of Trust or other organizational document) determined as
of the close of business on each business day throughout the month and
the performance period.
(e) In case of termination of this Contract during any month, the
fee for that month shall be reduced proportionately on the basis of
the number of business days during which it is in effect for that
month. The Basic Fee Rate will be computed on the basis of and applied
to net assets averaged over that month ending on the last business day
on which this Contract is in effect. The amount of this Performance
Adjustment to the Basic Fee will be computed on the basis of and
applied to net assets averaged over the 36-month period ending on the
last business day on which this Contract is in effect provided that if
this Contract has been in effect less than 36 months, the computation
will be made on the basis of the period of time during which it has
been in effect.
4. It is understood that the Portfolio will pay all its expenses,
which expenses payable by the Portfolio shall include, without
limitation, (i) interest and taxes; (ii) brokerage commissions and
other costs in connection with the purchase or sale of securities and
other investment instruments; (iii) fees and expenses of the Fund's
Trustees other than those who are "interested persons" of the Fund or
the Adviser; (iv) legal and audit expenses; (v) custodian, registrar
and transfer agent fees and expenses; (vi) fees and expenses related
to the registration and qualification of the Fund and the Portfolio's
shares for distribution under state and federal securities laws; (vii)
expenses of printing and mailing reports and notices and proxy
material to shareholders of the Portfolio; (viii) all other expenses
incidental to holding meetings of the Portfolio's shareholders,
including proxy solicitations therefor; (ix) a pro rata share, based
on relative net assets of the Portfolio and other registered
investment companies having Advisory and Service or Management
Contracts with the Adviser, of 50% of insurance premiums for fidelity
and other coverage; (x) its proportionate share of association
membership dues; (xi) expenses of typesetting for printing
Prospectuses and Statements of Additional Information and supplements
thereto; (xii) expenses of printing and mailing Prospectuses and
Statements of Additional Information and supplements thereto sent to
existing shareholders; and (xiii) such non-recurring or extraordinary
expenses as may arise, including those relating to actions, suits or
proceedings to which the Portfolio is a party and the legal obligation
which the Portfolio may have to indemnify the Fund's Trustees and
officers with respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and
engage in other activities, provided, however, that such other
services and activities do not, during the term of this Contract,
interfere, in a material manner, with the Adviser's ability to meet
all of its obligations with respect to rendering services to the
Portfolio hereunder. In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Adviser, the Adviser shall not be subject
to liability to the Portfolio or to any shareholder of the Portfolio
for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses that may be sustained in the
purchase, holding or sale of any security or other investment
instrument.
6. (a) Subject to prior termination as provided in sub-paragraph (d)
of this paragraph 6, this Contract shall continue in force until July
31, [1995] ((2000 ))and indefinitely thereafter, but only so long as
the continuance after such date shall be specifically approved at
least annually by vote of the Trustees of the Fund or by vote of a
majority of the outstanding voting securities of the Portfolio.
(b) This Contract may be modified by mutual consent [, such consent
on the part of the Fund to be authorized by vote of a majority of the
outstanding voting securities of the Portfolio] ((subject to the
provisions of Section 15 of the 1940 Act, as modified by or
interpreted by any applicable order or orders of the Securities and
Exchange Commission ("the Commission") or any rules or regulations
adopted by, or interpretative releases of, the Commission)).
(c) In addition to the requirements of sub-paragraphs (a) and (b) of
this paragraph 6, the terms of any continuance or modification of this
Contract must have been approved by the vote of a majority of those
Trustees of the Fund who are not parties to the Contract or interested
persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment
of any penalty, by action of its Trustees or Board of Directors, as
the case may be, or with respect to the Portfolio by vote of a
majority of the outstanding voting securities of the Portfolio. This
Contract shall terminate automatically in the event of its assignment.
7. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Declaration of Trust
or other organizational document and agrees that the obligations
assumed by the Fund pursuant to this Contract shall be limited in all
cases to the Portfolio and its assets, and the Adviser shall not seek
satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio or any other Portfolios of the Fund. In
addition, the Adviser shall not seek satisfaction of any such
obligations from the Trustees or any individual Trustee. The Adviser
understands that the rights and obligations of any Portfolio under the
Declaration of Trust or other organizational document are separate and
distinct from those of any and all other Portfolios.
8. This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Massachusetts, without giving
effect to the choice of laws provisions thereof.
((The terms "vote of a majority of the outstanding voting
securities," "assignment," and "interested persons," when used herein,
shall have the respective meanings specified in the 1940 Act, as now
in effect or as hereafter amended, and subject to such orders as may
be granted by the Commission.))
IN WITNESS WHEREOF the parties have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as
of the date written above.
SIGNATURE LINES OMITTED
EXHIBIT 3
((UNDERLINED)) LANGUAGE WILL BE ADDED
[BRACKETED] LANGUAGE WILL BE DELETED
FORM OF
MANAGEMENT CONTRACT
BETWEEN
FIDELITY COMMONWEALTH TRUST:
FIDELITY SMALL CAP [STOCK FUND] ((SELECTOR))
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
[MODIFICATION] ((AMENDMENT)) made this [1st day of November 1994]
((___ day of ______ 1999)), by and between Fidelity Commonwealth
Trust, a Massachusetts business trust which may issue one or more
series of shares of beneficial interest (hereinafter called the
"Fund"), on behalf of Fidelity Small Cap [Stock Fund] ((Selector))
(hereinafter called the "Portfolio"), and Fidelity Management &
Research Company, a Massachusetts corporation (hereinafter called the
"Adviser") ((as set forth in its entirety below)).
Required authorization and approval by shareholders and Trustees
having been obtained, the Fund, on behalf of the Portfolio, and the
Adviser hereby consent, pursuant to Paragraph 6 of the existing
Management Contract, dated [June 17, 1993] ((November 1, 1994)), to a
modification of said Contract in the manner set forth below. The
[Modified] ((Amended)) Management Contract shall, when executed by
duly authorized officers of the Fund and the Adviser, take effect on
[the later of November 1, 1994 or the first day of the month following
approval] ((________, 1999)).
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the
supervision of the Fund's Board of Trustees, direct the investments of
the Portfolio in accordance with the investment objective, policies
and limitations as provided in the Portfolio's Prospectus or other
governing instruments, as amended from time to time, the Investment
Company Act of 1940 and rules thereunder, as amended from time to time
(the "1940 Act"), and such other limitations as the Portfolio may
impose by notice in writing to the Adviser. The Adviser shall also
furnish for the use of the Portfolio office space and all necessary
office facilities, equipment and personnel for servicing the
investments of the Portfolio; and shall pay the salaries and fees of
all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all
personnel of the Fund or the Adviser performing services relating to
research, statistical and investment activities. The Adviser is
authorized, in its discretion and without prior consultation with the
Portfolio, to buy, sell, lend and otherwise trade in any stocks, bonds
and other securities and investment instruments on behalf of the
Portfolio. The investment policies and all other actions of the
Portfolio are and shall at all times be subject to the control and
direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for
the performance by its affiliates of) the management and
administrative services necessary for the operation of the Fund. The
Adviser shall, subject to the supervision of the Board of Trustees,
perform various services for the Portfolio, including but not limited
to: (i) providing the Portfolio with office space, equipment and
facilities (which may be its own) for maintaining its organization;
(ii) on behalf of the Portfolio, supervising relations with, and
monitoring the performance of, custodians, depositories, transfer and
pricing agents, accountants, attorneys, underwriters, brokers and
dealers, insurers and other persons in any capacity deemed to be
necessary or desirable; (iii) preparing all general shareholder
communications, including shareholder reports; (iv) conducting
shareholder relations; (v) maintaining the Fund's existence and its
records; (vi) during such times as shares are publicly offered,
maintaining the registration and qualification of the Portfolio's
shares under federal and state law; and (vii) investigating the
development of and developing and implementing, if appropriate,
management and shareholder services designed to enhance the value or
convenience of the Portfolio as an investment vehicle.
The Adviser shall also furnish such reports, evaluations, information
or analyses to the Fund as the Fund's Board of Trustees may request
from time to time or as the Adviser may deem to be desirable. The
Adviser shall make recommendations to the Fund's Board of Trustees
with respect to Fund policies, and shall carry out such policies as
are adopted by the Trustees. The Adviser shall, subject to review by
the Board of Trustees, furnish such other services as the Adviser
shall from time to time determine to be necessary or useful to perform
its obligations under this Contract.
(c) The Adviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or
dealers selected by the Adviser, which may include brokers or dealers
affiliated with the Adviser. The Adviser shall use its best efforts to
seek to execute portfolio transactions at prices which are
advantageous to the Portfolio and at commission rates which are
reasonable in relation to the benefits received. In selecting brokers
or dealers qualified to execute a particular transaction, brokers or
dealers may be selected who also provide brokerage and research
services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) to the Portfolio and/or the other
accounts over which the Adviser or its affiliates exercise investment
discretion. The Adviser is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess
of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Adviser determines in
good faith that such amount of commission is reasonable in relation to
the value of the brokerage and research services provided by such
broker or dealer. This determination may be viewed in terms of either
that particular transaction or the overall responsibilities which the
Adviser and its affiliates have with respect to accounts over which
they exercise investment discretion. The Trustees of the Fund shall
periodically review the commissions paid by the Portfolio to determine
if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor.
The Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of
the Fund are or may be or become interested in the Adviser as
directors, officers or otherwise and that directors, officers and
stockholders of the Adviser are or may be or become similarly
interested in the Fund, and that the Adviser may be or become
interested in the Fund as a shareholder or otherwise.
3. The Adviser will be compensated on the following basis for the
services and facilities to be furnished hereunder. The Adviser shall
receive a monthly management fee, payable monthly as soon as
practicable after the last day of each month, composed of a Basic Fee
and a Performance Adjustment. The Performance Adjustment is added to
or subtracted from the Basic Fee depending on whether the Portfolio
experienced better or worse performance than the Russell 2000 Index
(the "Index"). The Performance Adjustment is not cumulative. An
increased fee will result even though the performance of the Portfolio
over some period of time shorter than the performance period has been
behind that of the Index, and, conversely, a reduction in the fee will
be made for a month even though the performance of the Portfolio over
some period of time shorter than the performance period has been ahead
of that of the Index. The Basic Fee and the Performance Adjustment
will be computed as follows:
(a) Basic Fee Rate: The annual Basic Fee Rate shall be the sum of
the Group Fee Rate and the Individual Fund Fee Rate calculated to the
nearest millionth decimal place as follows:
(i) Group Fee Rate. The Group Fee Rate shall be based upon the
monthly average of the net assets of the registered investment
companies having Advisory and Service or Management Contracts with the
Adviser (computed in the manner set forth in the fund's Declaration of
Trust or other organizational document) determined as of the close of
business on each business day throughout the month. The Group Fee Rate
shall be determined on a cumulative basis pursuant to the following
schedule:
Average Net Assets Annualized Fee Rate (for each
level)
0 - $ 3 billion .5200%
3 - 6 .4900%
6 - 9 .4600%
9 - 12 .4300%
12 - 15 .4000%
15 - 18 .3850%
18 - 21 .3700%
21 - 24 .3600%
24 - 30 .3500%
30 - 36 .3450%
36 - 42 .3400%
42 - 48 .3350%
48 - 66 .3250%
66 - 84 .3200%
84 - 102 .3150%
102 - 138 .3100%
138 - 174 .3050%
174 - 210 .3000%
210 - 246 .2950%
246 - 282 .2900%
282 - 318 .2850%
318 - 354 .2800%
354 - 390 .2750%
[Over 390] [.2700%]
((390)) - ((426)) ((.2700%))
((426)) - ((462)) ((.2650%))
((462)) - ((498)) ((.2600%))
((498)) - ((534)) ((.2550%))
((Over)) ((534)) ((.2500%))
(ii) Individual Fund Fee Rate. The Individual Fund Fee Rate shall
be .35%.
(b) Basic Fee. One-twelfth of the Basic Fee Rate shall be applied to
the average of the net assets of the Portfolio (computed in the manner
set forth in the Fund's Declaration of Trust or other organizational
document) determined as of the close of business on each business day
throughout the month. The resulting dollar amount comprises the Basic
Fee.
(c) Performance Adjustment Rate: The Performance Adjustment Rate is
0.02% for each percentage point (the performance of the Portfolio and
the Index each being calculated to the nearest [percentage
point] ((.01%))) that the Portfolio's investment performance for the
performance period was better or worse than the record of the Index as
then constituted. The maximum performance adjustment rate is 0.20%.
The performance period will commence with the first day of the first
full month following the Portfolio's commencement of operations.
During the first eleven months of the performance period for the
Portfolio, there will be no performance adjustment. Starting with the
twelfth month of the performance period, the performance adjustment
will take effect. Following the twelfth month a new month will be
added to the performance period until the performance period equals 36
months. Thereafter the performance period will consist of the current
month plus the previous 35 months.
The Portfolio's investment performance will be measured by comparing
(i) the opening net asset value of one share of the Portfolio on the
first business day of the performance period with (ii) the closing net
asset value of one share of the Portfolio as of the last business day
of such period. In computing the investment performance of the
Portfolio and the investment record of the Index, distributions of
realized capital gains, the value of capital gains taxes per share
paid or payable on undistributed realized long-term capital gains
accumulated to the end of such period and dividends paid out of
investment income on the part of the Portfolio, and all cash
distributions of the securities included in the Index, will be treated
as reinvested in accordance with Rule 205-1 or any other applicable
rules under the Investment Advisers Act of 1940, as the same from time
to time may be amended.
(d) Performance Adjustment. One-twelfth of the annual Performance
Adjustment Rate will be applied to the average of the net assets of
the Portfolio (computed in the manner set forth in the Fund's
Declaration of Trust or other organizational document) determined as
of the close of business on each business day throughout the month and
the performance period.
(e) In case of termination of this Contract during any month, the
fee for that month shall be reduced proportionately on the basis of
the number of business days during which it is in effect for that
month. The Basic Fee Rate will be computed on the basis of and applied
to net assets averaged over that month ending on the last business day
on which this Contract is in effect. The amount of this Performance
Adjustment to the Basic Fee will be computed on the basis of and
applied to net assets averaged over the 36-month period ending on the
last business day on which this Contract is in effect provided that if
this Contract has been in effect less than 36 months, the computation
will be made on the basis of the period of time during which it has
been in effect.
4. It is understood that the Portfolio will pay all its expenses,
which expenses payable by the Portfolio shall include, without
limitation, (i) interest and taxes; (ii) brokerage commissions and
other costs in connection with the purchase or sale of securities and
other investment instruments; (iii) fees and expenses of the Fund's
Trustees other than those who are "interested persons" of the Fund or
the Adviser; (iv) legal and audit expenses; (v) custodian, registrar
and transfer agent fees and expenses; (vi) fees and expenses related
to the registration and qualification of the Fund and the Portfolio's
shares for distribution under state and federal securities laws; (vii)
expense of printing and mailing reports and notices and proxy material
to shareholders of the Portfolio; (viii) all other expenses incidental
to holding meetings of the Portfolio's shareholders, including proxy
solicitations therefor; (ix) a pro rata share, based on relative net
assets of the Portfolio and other registered investment companies
having Advisory and Service or Management Contracts with the Adviser,
of 50% of insurance premiums for fidelity and other coverage; (x) its
proportionate share of association membership dues; (xi) expenses of
typesetting for printing Prospectuses and Statements of Additional
Information and supplements thereto; (xii) expenses of printing and
mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Portfolio is a
party and the legal obligation which the Portfolio may have to
indemnify the Fund's Trustees and officers with respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and
engage in other activities, provided, however, that such other
services and activities do not, during the term of this Contract,
interfere, in a material manner, with the Adviser's ability to meet
all of its obligations with respect to rendering services to the
Portfolio hereunder. In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Adviser, the Adviser shall not be subject
to liability to the Portfolio or to any shareholder of the Portfolio
for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses that may be sustained in the
purchase, holding or sale of any security ((or other investment
instrument)).
6. (a) Subject to prior termination as provided in sub-paragraph (d)
of this paragraph 6, this Contract shall continue in force until July
31, [1995] ((2000)) and indefinitely thereafter, but only so long as
the continuance after such date shall be specifically approved at
least annually by vote of the Trustees of the Fund or by vote of a
majority of the outstanding voting securities of the Portfolio.
(b) This Contract may be modified by mutual consent [, such consent
on the part of the Fund to be authorized by vote of a majority of the
outstanding voting securities of the Portfolio] ((subject to the
provisions of Section 15 of the 1940 Act, as modified by or
interpreted by any applicable order or orders of the Securities and
Exchange Commission (the "Commission") or any rules or regulations
adopted by, or interpretative releases of, the Commission)).
(c) In addition to the requirements of sub-paragraphs (a) and (b) of
this paragraph 6, the terms of any continuance or modification of this
Contract must have been approved by the vote of a majority of those
Trustees of the Fund who are not parties to the Contract or interested
persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment
of any penalty, by action of its Trustees or Board of Directors, as
the case may be, or with respect to the Portfolio by vote of a
majority of the outstanding voting securities of the Portfolio. This
Contract shall terminate automatically in the event of its assignment.
7. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Declaration of Trust
or other organizational document and agrees that the obligations
assumed by the Fund pursuant to this Contract shall be limited in all
cases to the Portfolio and its assets, and the Adviser shall not seek
satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio or any other Portfolios of the Fund. In
addition, the Adviser shall not seek satisfaction of any such
obligations from the Trustees or any individual Trustee. The Adviser
understands that the rights and obligations of any Portfolio under the
Declaration of Trust or other organizational document are separate and
distinct from those of any and all other Portfolios.
8. This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Massachusetts, without giving
effect to the choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have
the respective meanings specified in the 1940 Act, as now in effect or
as hereafter amended, and subject to such orders as may be granted by
the [Securities and Exchange] Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as
of the date written above.
SIGNATURE LINES OMITTED
EXHIBIT 4
((UNDERLINED)) LANGUAGE WILL BE ADDED
[BRACKETED] LANGUAGE WILL BE DELETED
FORM OF
MANAGEMENT CONTRACT
BETWEEN
FIDELITY COMMONWEALTH TRUST:
FIDELITY INTERMEDIATE BOND FUND
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
[MODIFICATION] ((AMENDMENT)) made this [1st day of December 1994]
((___ day of ______1999)), by and between Fidelity Commonwealth Trust,
a Massachusetts business trust which may issue one or more series of
shares of beneficial interest (hereinafter called the "Fund"), on
behalf of Fidelity Intermediate Bond Fund (hereinafter called the
"Portfolio"), and Fidelity Management & Research Company, a
Massachusetts corporation (hereinafter called the "Adviser") ((as set
forth in its entirety below)).
Required authorization and approval by shareholders and Trustees
having been obtained, the Fund, on behalf of the Portfolio, and the
Adviser hereby consent, pursuant to Paragraph 6 of the existing
Management Contract [modified September 1, 1992] ((dated December 1,
1994)), to a modification of said Contract in the manner set forth
below. The [Modified] ((Amended)) Management Contract shall, when
executed by duly authorized officers of the Fund and the Adviser, take
effect on [the later of November 1, 1994 or the first day of the month
following approval] ((_________, 1999)).
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the
supervision of the Fund's Board of Trustees, direct the investments of
the Portfolio in accordance with the investment objective, policies
and limitations as provided in the Portfolio's Prospectus or other
governing instruments, as amended from time to time, the Investment
Company Act of 1940 and rules thereunder, as amended from time to time
(the "1940 Act"), and such other limitations as the Portfolio may
impose by notice in writing to the Adviser. The Adviser shall also
furnish for the use of the Portfolio office space and all necessary
office facilities, equipment and personnel for servicing the
investments of the Portfolio; and shall pay the salaries and fees of
all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all
personnel of the Fund or the Adviser performing services relating to
research, statistical and investment activities. The Adviser is
authorized, in its discretion and without prior consultation with the
Portfolio, to buy, sell, lend and otherwise trade in any stocks, bonds
and other securities and investment instruments on behalf of the
Portfolio. The investment policies and all other actions of the
Portfolio are and shall at all times be subject to the control and
direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for
the performance by its affiliates of) the management and
administrative services necessary for the operation of the Fund. The
Adviser shall, subject to the supervision of the Board of Trustees,
perform various services for the Portfolio, including but not limited
to: (i) providing the Portfolio with office space, equipment and
facilities (which may be its own) for maintaining its organization;
(ii) on behalf of the Portfolio, supervising relations with, and
monitoring the performance of, custodians, depositories, transfer and
pricing agents, accountants, attorneys, underwriters, brokers and
dealers, insurers and other persons in any capacity deemed to be
necessary or desirable; (iii) preparing all general shareholder
communications, including shareholder reports; (iv) conducting
shareholder relations; (v) maintaining the Fund's existence and its
records; (vi) during such times as shares are publicly offered,
maintaining the registration and qualification of the Portfolio's
shares under federal and state law; and (vii) investigating the
development of and developing and implementing, if appropriate,
management and shareholder services designed to enhance the value or
convenience of the Portfolio as an investment vehicle.
The Adviser shall also furnish such reports, evaluations, information
or analyses to the Fund as the Fund's Board of Trustees may request
from time to time or as the Adviser may deem to be desirable. The
Adviser shall make recommendations to the Fund's Board of Trustees
with respect to Fund policies, and shall carry out such policies as
are adopted by the Trustees. The Adviser shall, subject to review by
the Board of Trustees, furnish such other services as the Adviser
shall from time to time determine to be necessary or useful to perform
its obligations under this Contract.
(c) The Adviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or
dealers selected by the Adviser, which may include brokers or dealers
affiliated with the Adviser. The Adviser shall use its best efforts to
seek to execute portfolio transactions at prices which are
advantageous to the Portfolio and at commission rates which are
reasonable in relation to the benefits received. In selecting brokers
or dealers qualified to execute a particular transaction, brokers or
dealers may be selected who also provide brokerage and research
services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) to the Portfolio and/or the other
accounts over which the Adviser or its affiliates exercise investment
discretion. The Adviser is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess
of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Adviser determines in
good faith that such amount of commission is reasonable in relation to
the value of the brokerage and research services provided by such
broker or dealer. This determination may be viewed in terms of either
that particular transaction or the overall responsibilities which the
Adviser and its affiliates have with respect to accounts over which
they exercise investment discretion. The Trustees of the Fund shall
periodically review the commissions paid by the Portfolio to determine
if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor.
The Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of
the Fund are or may be or become interested in the Adviser as
directors, officers or otherwise and that directors, officers and
stockholders of the Adviser are or may be or become similarly
interested in the Fund, and that the Adviser may be or become
interested in the Fund as a shareholder or otherwise.
3. The Adviser will be compensated on the following basis for the
services and facilities to be furnished hereunder. The Adviser shall
receive a monthly management fee, payable monthly as soon as
practicable after the last day of each month, composed of a Group Fee
and an Individual Fund Fee.
(a) Group Fee Rate. The Group Fee Rate shall be based upon the
monthly average of the net assets of the registered investment
companies having Advisory and Service or Management Contracts with the
Adviser (computed in the manner set forth in the fund's Declaration of
Trust or other organizational document) determined as of the close of
business on each business day throughout the month. The Group Fee Rate
shall be determined on a cumulative basis pursuant to the following
schedule:
Average Net Assets Annualized Fee Rate (for each
level)
0 - $ 3 billion .3700%
3 - 6 .3400%
6 - 9 .3100%
9 - 12 .2800%
12 - 15 .2500%
15 - 18 .2200%
18 - 21 .2000%
21 - 24 .1900%
24 - 30 .1800%
30 - 36 .1750%
36 - 42 .1700%
42 - 48 .1650%
48 - 66 .1600%
66 - 84 .1550%
84 - 120 .1500%
120 - 156 .1450%
156 - 192 .1400%
192 - 228 .1350%
228 - 264 .1300%
264 - 300 .1275%
300 - 336 .1250%
336 - 372 .1225%
[Over 372] [.1200%]
((372)) - ((408)) ((.1200%))
((408)) - ((444)) ((.1175%))
((444)) - ((480)) ((.1150%))
((480)) - ((516)) ((.1125%))
((Over)) ((516)) ((.1100%))
(b) Individual Fund Fee Rate. The Individual Fund Fee Rate shall be
.30%.
The sum of the Group Fee Rate, calculated as described above to the
nearest millionth, and the Individual Fund Fee Rate shall constitute
the Annual Management Fee Rate. One-twelfth of the Annual Management
Fee Rate shall be applied to the average of the net assets of the
Portfolio (computed in the manner set forth in the Fund's Declaration
of Trust or other organizational document) determined as of the close
of business on each business day throughout the month.
(c) In case of termination of this Contract during any month, the
fee for that month shall be reduced proportionately on the basis of
the number of business days during which it is in effect, and the fee
computed upon the average net assets for the business days it is so in
effect for that month.
4. It is understood that the Portfolio will pay all its expenses,
which expenses payable by the Portfolio shall include, without
limitation, (i) interest and taxes; (ii) brokerage commissions and
other costs in connection with the purchase or sale of securities and
other investment instruments; (iii) fees and expenses of the Fund's
Trustees other than those who are "interested persons" of the Fund or
the Adviser; (iv) legal and audit expenses; (v) custodian, registrar
and transfer agent fees and expenses; (vi) fees and expenses related
to the registration and qualification of the Fund and the Portfolio's
shares for distribution under state and federal securities laws; (vii)
expenses of printing and mailing reports and notices and proxy
material to shareholders of the Portfolio; (viii) all other expenses
incidental to holding meetings of the Portfolio's shareholders,
including proxy solicitations therefor; (ix) a pro rata share, based
on relative net assets of the Portfolio and other registered
investment companies having Advisory and Service or Management
Contracts with the Adviser, of 50% of insurance premiums for fidelity
and other coverage; (x) its proportionate share of association
membership dues; (xi) expenses of typesetting for printing
Prospectuses and Statements of Additional Information and supplements
thereto; (xii) expenses of printing and mailing Prospectuses and
Statements of Additional Information and supplements thereto sent to
existing shareholders; and (xiii) such non-recurring or extraordinary
expenses as may arise, including those relating to actions, suits or
proceedings to which the Portfolio is a party and the legal obligation
which the Portfolio may have to indemnify the Fund's Trustees and
officers with respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and
engage in other activities, provided, however, that such other
services and activities do not, during the term of this Contract,
interfere, in a material manner, with the Adviser's ability to meet
all of its obligations with respect to rendering services to the
Portfolio hereunder. In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Adviser, the Adviser shall not be subject
to liability to the Portfolio or to any shareholder of the Portfolio
for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses that may be sustained in the
purchase, holding or sale of any security or other investment
instrument.
6. (a) Subject to prior termination as provided in sub-paragraph (d)
of this paragraph 6, this Contract shall continue in force until June
30, [1995] ((2000)) and indefinitely thereafter, but only so long as
the continuance after such date shall be specifically approved at
least annually by vote of the Trustees of the Fund or by vote of a
majority of the outstanding voting securities of the Portfolio.
(b) This Contract may be modified by mutual consent [, such consent
on the part of the Fund to be authorized by vote of a majority of the
outstanding voting securities of the Portfolio] ((subject to the
provisions of Section 15 of the 1940 Act, as modified by or
interpreted by any applicable order or orders of the Securities and
Exchange Commission (the "Commission") or any rules or regulations
adopted by, or interpretative releases of, the Commission)).
(c) In addition to the requirements of sub-paragraphs (a) and (b) of
this paragraph 6, the terms of any continuance or modification of this
Contract must have been approved by the vote of a majority of those
Trustees of the Fund who are not parties to the Contract or interested
persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment
of any penalty, by action of its Trustees or Board of Directors, as
the case may be, or with respect to the Portfolio by vote of a
majority of the outstanding voting securities of the Portfolio. This
Contract shall terminate automatically in the event of its assignment.
7. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Declaration of Trust
or other organizational document and agrees that the obligations
assumed by the Fund pursuant to this Contract shall be limited in all
cases to the Portfolio and its assets, and the Adviser shall not seek
satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio or any other Portfolios of the Fund. In
addition, the Adviser shall not seek satisfaction of any such
obligations from the Trustees or any individual Trustee. The Adviser
understands that the rights and obligations of any Portfolio under the
Declaration of Trust or other organizational document are separate and
distinct from those of any and all other Portfolios.
8. This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Massachusetts, without giving
effect to the choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have
the respective meanings specified in the 1940 Act, as now in effect or
as hereafter amended, and subject to such orders as may be granted by
the [Securities and Exchange] Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all of
the date written above.
SIGNATURE LINES OMITTED
EXHIBIT 5
((UNDERLINED)) LANGUAGE WILL BE ADDED
[BRACKETED] LANGUAGE WILL BE DELETED
The proper name of each fund, Fidelity Mid-Cap Stock Fund, Fidelity
Large Cap Stock Fund, Fidelity Small Cap Selector, or Fidelity
Intermediate Bond Fund, as the case may be, will be inserted in that
fund's contract where indicated by "{NAME OF PORTFOLIO}."
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
AND
FIDELITY COMMONWEALTH TRUST ON BEHALF OF
{NAME OF PORTFOLIO}
((AMENDMENT)) [AGREEMENT] made this {FOR FIDELITY MID-CAP STOCK FUND:
[ 26th day of June, 1999]} {FOR FIDELITY LARGE CAP STOCK FUND:
[18th day of May 1995]} {FOR FIDELITY SMALL CAP SELECTOR: [17th day of
June, 1993]} {FOR FIDELITY INTERMEDIATE BOND FUND: [1st day of
December, 1994]} ((__ day of ______, 1999)), by {FOR FIDELITY MID-CAP
STOCK FUND, FIDELITY LARGE CAP STOCK FUND, AND FIDELITY INTERMEDIATE
BOND FUND: and between} {FOR FIDELITY SMALL CAP SELECTOR: ((and
between))} Fidelity Management & Research Company, a Massachusetts
corporation with principal offices at 82 Devonshire Street, Boston,
Massachusetts (hereinafter called the "Advisor"); Fidelity Management
& Research (U.K.) Inc. (hereinafter called the "Sub-Advisor"); and
Fidelity Commonwealth Trust, a Massachusetts business trust which may
issue one or more series of shares of beneficial interest (hereinafter
called the "Trust") on behalf of {NAME OF PORTFOLIO} (hereinafter
called the "Portfolio").
((Required authorization and approval by shareholders and Trustees
having been obtained, the Trust, on behalf of the Portfolio, the
Advisor, and the Sub-Advisor hereby consent, pursuant to Paragraph
9(b) of the existing Sub-Advisory Agreement dated {FOR FIDELITY
MID-CAP STOCK FUND: June 26 , 1999} {FOR FIDELITY LARGE CAP
STOCK FUND: May 18, 1995} {FOR FIDELITY SMALL CAP SELECTOR: June 17,
1993} {FOR FIDELITY INTERMEDIATE BOND FUND: December 1, 1994}, to a
modification of said Sub-Advisory Agreement in the manner set forth
below. The Amended Sub-Advisory Agreement shall, when executed by duly
authorized officers of the Trust, the Advisor, and the Sub-Advisor,
take effect on ________, 1999.))
WHEREAS the Trust and the Advisor have entered into a Management
Contract on behalf of the Portfolio, pursuant to which the Advisor is
to act as investment manager of the Portfolio; and
WHEREAS the Sub-Advisor and its subsidiaries and other affiliated
persons have personnel in various locations throughout the world and
have been formed in part for the purpose of researching and compiling
information and recommendations with respect to the economies of
various countries, {FOR FIDELITY MID-CAP STOCK FUND, FIDELITY LARGE
CAP STOCK FUND, AND FIDELITY INTERMEDIATE BOND FUND: and securities
of} {FOR FIDELITY SMALL CAP SELECTOR: [including] ((and)) securities
((of)) [issued in and]} issuers located in such countries, and
providing investment advisory services in connection therewith;
NOW, THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the Trust, the Advisor and the
Sub-Advisor agree as follows:
1. Duties: The Advisor may, in its discretion, appoint the
Sub-Advisor to perform one or more of the following services with
respect to all or a portion of the investments of the Portfolio. The
services and the portion of the investments of the Portfolio to be
advised or managed by the Sub-Advisor shall be as agreed upon from
time to time by the Advisor and the Sub-Advisor. The Sub-Advisor shall
pay the salaries and fees of all personnel of the Sub-Advisor
performing services for the Portfolio relating to research,
statistical and investment activities.
(a) INVESTMENT ADVICE: If and to the extent requested by the
Advisor, the Sub-Advisor shall provide investment advice to the
Portfolio and the Advisor with respect to all or a portion of the
investments of the Portfolio, and in connection with such advice shall
furnish the Portfolio and the Advisor such factual information,
research reports and investment recommendations as the Advisor may
reasonably require. Such information may include written and oral
reports and analyses.
(b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Advisor, the Sub-Advisor shall, subject to the supervision of the
Advisor, manage all or a portion of the investments of the Portfolio
in accordance with the investment objective, policies and limitations
provided in the Portfolio's Prospectus or other governing instruments,
as amended from time to time, the Investment Company Act of 1940
("1940 Act") and rules thereunder, as amended from time to time, and
such other limitations as the Trust or Advisor may impose with respect
to the Portfolio by notice to the Sub-Advisor. With respect to the
portion of the investments of the Portfolio under its management, the
Sub-Advisor is authorized to make investment decisions on behalf of
the Portfolio with regard to any stock, bond, other security or
investment instrument, and to place orders for the purchase and sale
of such securities through such broker-dealers as the Sub-Advisor may
select. The Sub-Advisor may also be authorized, but only to the extent
such duties are delegated in writing by the Advisor, to provide
additional investment management services to the Portfolio, including
but not limited to services such as managing foreign currency
investments, purchasing and selling or writing futures and options
contracts, borrowing money or lending securities on behalf of the
Portfolio. All investment management and any other activities of the
Sub-Advisor shall at all times be subject to the control and direction
of the Advisor and the Trust's Board of Trustees.
(c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform any or
all of the services contemplated by this Agreement directly or through
such of its subsidiaries or other affiliated persons as the
Sub-Advisor shall determine; provided, however, that performance of
such services through such subsidiaries or other affiliated persons
shall have been approved by the Trust to the extent required pursuant
to the 1940 Act and rules thereunder.
2. Information to be Provided to the Trust and the Advisor: The
Sub-Advisor shall furnish such reports, evaluations, information or
analyses to the Trust and the Advisor as the Trust's Board of Trustees
or the Advisor may reasonably request from time to time, or as the
Sub-Advisor may deem to be desirable.
3. Brokerage: In connection with the services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Sub-Advisor
{FOR FIDELITY SMALL CAP SELECTOR: [, at its own expense,]}
shall place all orders for the purchase and sale of portfolio
securities for the Portfolio's account with brokers or dealers
selected by the Sub-Advisor, which may include brokers or dealers
affiliated with the Advisor or Sub-Advisor. The Sub-Advisor shall use
its best efforts to seek to execute portfolio transactions at prices
which are advantageous to the Portfolio and at commission rates which
are reasonable in relation to the benefits received. In selecting
brokers or dealers qualified to execute a particular transaction,
brokers or dealers may be selected who also provide brokerage and
research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of l934) to the Portfolio {FOR FIDELITY
MID-CAP STOCK FUND, FIDELITY LARGE CAP STOCK FUND, AND FIDELITY
INTERMEDIATE BOND FUND: and/or to the} {FOR FIDELITY SMALL CAP
SELECTOR: and((/or)) to [any] ((the))} other accounts over which the
Sub-Advisor or Advisor exercise investment discretion. The Sub-Advisor
is authorized to pay a broker or dealer who provides such brokerage
and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting
that transaction if the Sub-Advisor determines in good faith that such
amount of commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer.
This determination may be viewed in terms of either that particular
transaction or the overall responsibilities which the Sub-Advisor has
with respect to accounts over which it exercises investment
discretion. The Trustees of the Trust shall periodically review the
commissions paid by the Portfolio to determine if the commissions paid
over representative periods of time were reasonable in relation to the
benefits to the Portfolio.
4. Compensation: The Advisor shall compensate the Sub-Advisor on the
following basis for the services to be furnished hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under
subparagraph (a) of paragraph 1 of this Agreement, the Advisor agrees
to pay the Sub-Advisor a monthly Sub-Advisory Fee. The Sub-Advisory
Fee shall be equal to 110% of the Sub-Advisor's costs incurred in
connection with rendering the services referred to in subparagraph (a)
of paragraph 1 of this Agreement. The Sub-Advisory Fee shall not be
reduced to reflect expense reimbursements or fee waivers by the
Advisor, if any, in effect from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Advisor agrees
to pay the Sub-Advisor a monthly Investment Management Fee. The
Investment Management Fee shall be equal to: (i) 50% of the monthly
management fee rate (including performance adjustments, if any) that
the Portfolio is obligated to pay the Advisor under its Management
Contract with the Advisor, multiplied by: (ii) the fraction equal to
the net assets of the Portfolio as to which the Sub-Advisor shall have
provided investment management services divided by the net assets of
the Portfolio for that month. If in any fiscal year the aggregate
expenses of the Portfolio exceed any applicable expense limitation
imposed by any state or federal securities laws or regulations, and
the Advisor waives all or a portion of its management fee or
reimburses the Portfolio for expenses to the extent required to
satisfy such limitation, the Investment Management Fee paid to the
Sub-Advisor will be reduced by 50% of the amount of such waivers or
reimbursements multiplied by the fraction determined in (ii). If the
Sub-Advisor reduces its fees to reflect such waivers or reimbursements
and the Advisor subsequently recovers all or any portion of such
waivers or reimbursements, then the Sub-Advisor shall be entitled to
receive from the Advisor a proportionate share of the amount
recovered. To the extent that waivers and reimbursements by the
Advisor required by such limitations are in excess of the Advisor's
management fee, the Investment Management Fee paid to the Sub-Advisor
will be reduced to zero for that month, but in no event shall the
Sub-Advisor be required to reimburse the Advisor for all or a portion
of such excess reimbursements.
(c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph 1
for the same portion of the investments of the Portfolio for the same
period, the fees paid to the Sub-Advisor with respect to such
investments shall be calculated exclusively under subparagraph (b) of
this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the
Sub-Advisor hereunder or by the Advisor under the Management Contract
with the Portfolio, which expenses payable by the Portfolio shall
include, without limitation, (i) interest and taxes; (ii) brokerage
commissions and other costs in connection with the purchase or sale of
securities and other investment instruments; (iii) fees and expenses
of the Trust's Trustees other than those who are "interested persons"
of the Trust, the Sub-Advisor or the Advisor; (iv) legal and audit
expenses; (v) custodian, registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Trust and the Portfolio's shares for distribution
under state and federal securities laws; (vii) expenses of printing
and mailing reports and notices and proxy material to shareholders of
the Portfolio; (viii) all other expenses incidental to holding
meetings of the Portfolio's shareholders, including proxy
solicitations therefore; (ix) a pro rata share, based on relative net
assets of the Portfolio and other registered investment companies
having Advisory and Service or Management Contracts with the Advisor,
of 50% of insurance premiums for fidelity and other coverage; (x) its
proportionate share of association membership dues; (xi) expenses of
typesetting for printing Prospectuses and Statements of Additional
Information and supplements thereto; (xii) expenses of printing and
mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Portfolio is a
party and the legal obligation which the Portfolio may have to
indemnify the Trust's Trustees and officers with respect thereto.
6. Interested Persons: It is understood that Trustees, officers, and
shareholders of the Trust are or may be or become interested in the
Advisor or the Sub-Advisor as directors, officers or otherwise and
that directors, officers and stockholders of the Advisor or the
Sub-Advisor are or may be or become similarly interested in the Trust,
and that the Advisor or the Sub-Advisor may be or become interested in
the Trust as a shareholder or otherwise.
7. Services to Other Companies or Accounts: The services of the
Sub-Advisor to the Advisor are not to be deemed to be exclusive, the
Sub-Advisor being free to render services to others and engage in
other activities, provided, however, that such other services and
activities do not, during the term of this Agreement, interfere, in a
material manner, with the Sub-Advisor's ability to meet all of its
obligations hereunder. The Sub-Advisor shall for all purposes be an
independent contractor and not an agent or employee of the Advisor or
the Trust.
8. Standard of Care: In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Sub-Advisor, the Sub-Advisor shall not be
subject to liability to the Advisor, the Trust or to any shareholder
of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that
may be sustained in the purchase, holding or sale of any security.
9. Duration and Termination of Agreement; Amendments:
(a) Subject to prior termination as provided in subparagraph (d) of
this paragraph 9, this Agreement shall continue in force until {FOR
FIDELITY MID-CAP STOCK FUND: July 31, 2000} {FOR FIDELITY LARGE
CAP STOCK FUND: July 31, [1995] ((2000))} {FOR FIDELITY SMALL CAP
SELECTOR: July 31, [1993] ((2000))} {FOR FIDELITY INTERMEDIATE BOND
FUND: June 30, [1995] ((2000))} and indefinitely thereafter, but only
so long as the continuance after such period shall be specifically
approved at least annually by vote of the Trust's Board of Trustees or
by vote of a majority of the outstanding voting securities of the
Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor,
the Sub-Advisor and the Portfolio [, such consent on the part of the
Portfolio to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio] ((subject to the provisions of
Section 15 of the 1940 Act, as modified by or interpreted by any
applicable order or orders of the Securities and Exchange Commission
(the "Commission") or any rules or regulations adopted by, or
interpretative releases of, the Commission)).
(c) In addition to the requirements of subparagraphs (a) and (b) of
this paragraph 9, the terms of any continuance or modification of this
Agreement must have been approved by the vote of a majority of those
Trustees of the Trust who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval.
(d) Either the Advisor, the Sub-Advisor or the Portfolio may, at any
time on sixty (60) days' prior written notice to the other parties,
terminate this Agreement, without payment of any penalty, by action of
its Board of Trustees or Directors, or with respect to the Portfolio
by vote of a majority of its outstanding voting securities. This
Agreement shall terminate automatically in the event of its
assignment.
10. Limitation of Liability: The Sub-Advisor is hereby expressly put
on notice of the limitation of shareholder liability as set forth in
the Declaration of Trust {FOR FIDELITY MID-CAP STOCK FUND, FIDELITY
LARGE CAP STOCK FUND, AND FIDELITY INTERMEDIATE BOND FUND: or other
organizational document} {FOR FIDELITY SMALL CAP SELECTOR: ((or other
organizational document))} of the Trust and agrees that any
obligations of the Trust or the Portfolio arising in connection with
this Agreement shall be limited in all cases to the Portfolio and its
assets, and the Sub-Advisor shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the Portfolio.
Nor shall the Sub-Advisor seek satisfaction of any such obligation
from the Trustees or any individual Trustee.
11. Governing Law: This Agreement shall be governed by, and construed
in accordance with, the laws of the Commonwealth of Massachusetts {FOR
FIDELITY MID-CAP STOCK FUND, FIDELITY LARGE CAP STOCK FUND, AND
FIDELITY INTERMEDIATE BOND FUND, without giving effect to the choice
of laws provisions thereof} {FOR FIDELITY SMALL CAP SELECTOR: ((,
without giving effect to the choice of laws provisions thereof))}.
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested
persons," when used herein, shall have the respective meanings
specified in the 1940 Act as now in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to
be signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as
of the date written above.
SIGNATURE LINES OMITTED
EXHIBIT 6
((UNDERLINED)) LANGUAGE WILL BE ADDED
[BRACKETED] LANGUAGE WILL BE DELETED
The proper name of each fund, Fidelity Mid-Cap Stock Fund, Fidelity
Large Cap Stock Fund, Fidelity Small Cap Selector, or Fidelity
Intermediate Bond Fund, as the case may be, will be inserted in that
fund's contract where indicated by "{NAME OF PORTFOLIO}."
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC.
AND
FIDELITY COMMONWEALTH TRUST ON BEHALF OF
{NAME OF PORTFOLIO}
((AMENDMENT)) [AGREEMENT] made this {FOR FIDELITY MID-CAP STOCK
FUND: [26th day of June, 1999]} {FOR FIDELITY LARGE CAP STOCK
FUND: [18th day of May 1995]} {FOR FIDELITY SMALL CAP SELECTOR: [17th
day of June, 1993]} {FOR FIDELITY INTERMEDIATE BOND FUND: [1st day of
December, 1994]} ((__ day of _____, 1999)), by {FOR FIDELITY MID-CAP
STOCK FUND, FIDELITY LARGE CAP STOCK FUND, AND FIDELITY INTERMEDIATE
BOND FUND: and between} {FOR FIDELITY SMALL CAP SELECTOR: ((and
between))} Fidelity Management & Research Company, a Massachusetts
corporation with principal offices at 82 Devonshire Street, Boston,
Massachusetts (hereinafter called the "Advisor"); Fidelity Management
& Research (Far East) Inc. (hereinafter called the "Sub-Advisor"); and
Fidelity Commonwealth Trust, a Massachusetts business trust which may
issue one or more series of shares of beneficial interest (hereinafter
called the "Trust") on behalf of {NAME OF PORTFOLIO} (hereinafter
called the "Portfolio").
((Required authorization and approval by shareholders and Trustees
having been obtained, the Trust, on behalf of the Portfolio, the
Advisor, and the Sub-Advisor hereby consent, pursuant to Paragraph
9(b) of the existing Sub-Advisory Agreement dated {FOR FIDELITY
MID-CAP STOCK FUND: June 26, 1999} {FOR FIDELITY LARGE CAP STOCK
FUND: May 18, 1995} {FOR FIDELITY SMALL CAP SELECTOR: June 17, 1993}
{FOR FIDELITY INTERMEDIATE BOND FUND: December 1, 1994}, to a
modification of said Sub-Advisory Agreement in the manner set forth
below. The Amended Sub-Advisory Agreement shall, when executed by duly
authorized officers of the Trust, the Advisor, and the Sub-Advisor,
take effect on ________, 1999.))
WHEREAS the Trust and the Advisor have entered into a Management
Contract on behalf of the Portfolio, pursuant to which the Advisor is
to act as investment manager of the Portfolio; and
WHEREAS the Sub-Advisor and its subsidiaries and other affiliated
persons have personnel in various locations throughout the world and
have been formed in part for the purpose of researching and compiling
information and recommendations with respect to the economies of
various countries, {FOR FIDELITY MID-CAP STOCK FUND, FIDELITY LARGE
CAP STOCK FUND, AND FIDELITY INTERMEDIATE BOND FUND: and securities
of} {FOR FIDELITY SMALL CAP SELECTOR: [including] ((and)) securities
((of)) [issued in and]} issuers located in such countries, and
providing investment advisory services in connection therewith;
NOW, THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the Trust, the Advisor and the
Sub-Advisor agree as follows:
1. Duties: The Advisor may, in its discretion, appoint the
Sub-Advisor to perform one or more of the following services with
respect to all or a portion of the investments of the Portfolio. The
services and the portion of the investments of the Portfolio to be
advised or managed by the Sub-Advisor shall be as agreed upon from
time to time by the Advisor and the Sub-Advisor. The Sub-Advisor shall
pay the salaries and fees of all personnel of the Sub-Advisor
performing services for the Portfolio relating to research,
statistical and investment activities.
(a) INVESTMENT ADVICE: If and to the extent requested by the
Advisor, the Sub-Advisor shall provide investment advice to the
Portfolio and the Advisor with respect to all or a portion of the
investments of the Portfolio, and in connection with such advice shall
furnish the Portfolio and the Advisor such factual information,
research reports and investment recommendations as the Advisor may
reasonably require. Such information may include written and oral
reports and analyses.
(b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Advisor, the Sub-Advisor shall, subject to the supervision of the
Advisor, manage all or a portion of the investments of the Portfolio
in accordance with the investment objective, policies and limitations
provided in the Portfolio's Prospectus or other governing instruments,
as amended from time to time, the Investment Company Act of 1940 (the
"1940 Act") and rules thereunder, as amended from time to time, and
such other limitations as the Trust or Advisor may impose with respect
to the Portfolio by notice to the Sub-Advisor. With respect to the
portion of the investments of the Portfolio under its management, the
Sub-Advisor is authorized to make investment decisions on behalf of
the Portfolio with regard to any stock, bond, other security or
investment instrument, and to place orders for the purchase and sale
of such securities through such broker-dealers as the Sub-Advisor may
select. The Sub-Advisor may also be authorized, but only to the extent
such duties are delegated in writing by the Advisor, to provide
additional investment management services to the Portfolio, including
but not limited to services such as managing foreign currency
investments, purchasing and selling or writing futures and options
contracts, borrowing money, or lending securities on behalf of the
Portfolio. All investment management and any other activities of the
Sub-Advisor shall at all times be subject to the control and direction
of the Advisor and the Trust's Board of Trustees.
(c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform any or
all of the services contemplated by this Agreement directly or through
such of its subsidiaries or other affiliated persons as the
Sub-Advisor shall determine; provided, however, that performance of
such services through such subsidiaries or other affiliated persons
shall have been approved by the Trust to the extent required pursuant
to the 1940 Act and rules thereunder.
2. Information to be Provided to the Trust and the Advisor: The
Sub-Advisor shall furnish such reports, evaluations, information or
analyses to the Trust and the Advisor as the Trust's Board of Trustees
or the Advisor may reasonably request from time to time, or as the
Sub-Advisor may deem to be desirable.
3. Brokerage: In connection with the services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Sub-Advisor
{FOR FIDELITY SMALL CAP SELECTOR: [, at its own expense,]} shall place
all orders for the purchase and sale of portfolio securities for the
Portfolio's account with brokers or dealers selected by the
Sub-Advisor, which may include brokers or dealers affiliated with the
Advisor or Sub-Advisor. The Sub-Advisor shall use its best efforts to
seek to execute portfolio transactions at prices which are
advantageous to the Portfolio and at commission rates which are
reasonable in relation to the benefits received. In selecting brokers
or dealers qualified to execute a particular transaction, brokers or
dealers may be selected who also provide brokerage and research
services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of l934) to the Portfolio {FOR FIDELITY
MID-CAP STOCK FUND, FIDELITY LARGE CAP STOCK FUND, AND FIDELITY
INTERMEDIATE BOND FUND: and/or to the} {FOR FIDELITY SMALL CAP
SELECTOR: and((/or)) to [any] ((the))} other accounts over which the
Sub-Advisor or Advisor exercise investment discretion. The Sub-Advisor
is authorized to pay a broker or dealer who provides such brokerage
and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting
that transaction if the Sub-Advisor determines in good faith that such
amount of commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer.
This determination may be viewed in terms of either that particular
transaction or the overall responsibilities which the Sub-Advisor has
with respect to accounts over which it exercises investment
discretion. The Trustees of the Trust shall periodically review the
commissions paid by the Portfolio to determine if the commissions paid
over representative periods of time were reasonable in relation to the
benefits to the Portfolio.
4. Compensation: The Advisor shall compensate the Sub-Advisor on the
following basis for the services to be furnished hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under
subparagraph (a) of paragraph 1 of this Agreement, the Advisor agrees
to pay the Sub-Advisor a monthly Sub-Advisory Fee. The Sub-Advisory
Fee shall be equal to 105% of the Sub-Advisor's costs incurred in
connection with rendering the services referred to in subparagraph (a)
of paragraph 1 of this Agreement. The Sub-Advisory Fee shall not be
reduced to reflect expense reimbursements or fee waivers by the
Advisor, if any, in effect from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Advisor agrees
to pay the Sub-Advisor a monthly Investment Management Fee. The
Investment Management Fee shall be equal to: (i) 50% of the monthly
management fee rate (including performance adjustments, if any) that
the Portfolio is obligated to pay the Advisor under its Management
Contract with the Advisor, multiplied by: (ii) the fraction equal to
the net assets of the Portfolio as to which the Sub-Advisor shall have
provided investment management services divided by the net assets of
the Portfolio for that month. If in any fiscal year the aggregate
expenses of the Portfolio exceed any applicable expense limitation
imposed by any state or federal securities laws or regulations, and
the Advisor waives all or a portion of its management fee or
reimburses the Portfolio for expenses to the extent required to
satisfy such limitation, the Investment Management Fee paid to the
Sub-Advisor will be reduced by 50% of the amount of such waivers or
reimbursements multiplied by the fraction determined in (ii). If the
Sub-Advisor reduces its fees to reflect such waivers or reimbursements
and the Advisor subsequently recovers all or any portion of such
waivers and reimbursements, then the Sub-Advisor shall be entitled to
receive from the Advisor a proportionate share of the amount
recovered. To the extent that waivers and reimbursements by the
Advisor required by such limitations are in excess of the Advisor's
management fee, the Investment Management Fee paid to the Sub-Advisor
will be reduced to zero for that month, but in no event shall the
Sub-Advisor be required to reimburse the Advisor for all or a portion
of such excess reimbursements.
(c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph 1
for the same portion of the investments of the Portfolio for the same
period, the fees paid to the Sub-Advisor with respect to such
investments shall be calculated exclusively under subparagraph (b) of
this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the
Sub-Advisor hereunder or by the Advisor under the Management Contract
with the Portfolio, which expenses payable by the Portfolio shall
include, without limitation, (i) interest and taxes; (ii) brokerage
commissions and other costs in connection with the purchase or sale of
securities and other investment instruments; (iii) fees and expenses
of the Trust's Trustees other than those who are "interested persons"
of the Trust, the Sub-Advisor or the Advisor; (iv) legal and audit
expenses; (v) custodian, registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Trust and the Portfolio's shares for distribution
under state and federal securities laws; (vii) expenses of printing
and mailing reports and notices and proxy material to shareholders of
the Portfolio; (viii) all other expenses incidental to holding
meetings of the Portfolio's shareholders, including proxy
solicitations therefore; (ix) a pro rata share, based on relative net
assets of the Portfolio and other registered investment companies
having Advisory and Service or Management Contracts with the Advisor,
of 50% of insurance premiums for fidelity and other coverage; (x) its
proportionate share of association membership dues; (xi) expenses of
typesetting for printing Prospectuses and Statements of Additional
Information and supplements thereto; (xii) expenses of printing and
mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Portfolio is a
party and the legal obligation which the Portfolio may have to
indemnify the Trust's Trustees and officers with respect thereto.
6. Interested Persons: It is understood that Trustees, officers, and
shareholders of the Trust are or may be or become interested in the
Advisor or the Sub-Advisor as directors, officers or otherwise and
that directors, officers and stockholders of the Advisor or the
Sub-Advisor are or may be or become similarly interested in the Trust,
and that the Advisor or the Sub-Advisor may be or become interested in
the Trust as a shareholder or otherwise.
7. Services to Other Companies or Accounts: The services of the
Sub-Advisor to the Advisor are not to be deemed to be exclusive, the
Sub-Advisor being free to render services to others and engage in
other activities, provided, however, that such other services and
activities do not, during the term of this Agreement, interfere, in a
material manner, with the Sub-Advisor's ability to meet all of its
obligations hereunder. The Sub-Advisor shall for all purposes be an
independent contractor and not an agent or employee of the Advisor or
the Trust.
8. Standard of Care: In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Sub-Advisor, the Sub-Advisor shall not be
subject to liability to the Advisor, the Trust or to any shareholder
of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that
may be sustained in the purchase, holding or sale of any security.
9. Duration and Termination of Agreement; Amendments:
(a) Subject to prior termination as provided in subparagraph (d) of
this paragraph 9, this Agreement shall continue in force until {FOR
FIDELITY MID-CAP STOCK FUND: July 31, 2000} {FOR FIDELITY LARGE CAP
STOCK FUND: July 31, [1995] ((2000))} {FOR FIDELITY SMALL CAP
SELECTOR: July 31, [1993] ((2000))} {FOR FIDELITY INTERMEDIATE BOND
FUND: June 30, [1995] ((2000))} and indefinitely thereafter, but only
so long as the continuance after such period shall be specifically
approved at least annually by vote of the Trust's Board of Trustees or
by vote of a majority of the outstanding voting securities of the
Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor,
the Sub-Advisor and the Portfolio [, such consent on the part of the
Portfolio to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio] ((subject to the provisions of
Section 15 of the 1940 Act, as modified by or interpreted by any
applicable order or orders of the Securities and Exchange Commission
(the "Commission") or any rules or regulations adopted by, or
interpretative releases of, the Commission)).
(c) In addition to the requirements of subparagraphs (a) and (b) of
this paragraph 9, the terms of any continuance or modification of this
Agreement must have been approved by the vote of a majority of those
Trustees of the Trust who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval.
(d) Either the Advisor, the Sub-Advisor or the Portfolio may, at any
time on sixty (60) days' prior written notice to the other parties,
terminate this Agreement, without payment of any penalty, by action of
its Board of Trustees or Directors, or with respect to the Portfolio
by vote of a majority of its outstanding voting securities. This
Agreement shall terminate automatically in the event of its
assignment.
10. Limitation of Liability: The Sub-Advisor is hereby expressly put
on notice of the limitation of shareholder liability as set forth in
the Declaration of Trust {FOR FIDELITY MID-CAP STOCK FUND, FIDELITY
LARGE CAP STOCK FUND, AND FIDELITY INTERMEDIATE BOND FUND: or other
organizational document} {FOR FIDELITY SMALL CAP SELECTOR: ((or other
organizational document))} of the Trust and agrees that any
obligations of the Trust or the Portfolio arising in connection with
this Agreement shall be limited in all cases to the Portfolio and its
assets, and the Sub-Advisor shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the Portfolio.
Nor shall the Sub-Advisor seek satisfaction of any such obligation
from the Trustees or any individual Trustee.
11. Governing Law: This Agreement shall be governed by, and construed
in accordance with, the laws of the Commonwealth of Massachusetts {FOR
FIDELITY MID-CAP STOCK FUND, FIDELITY LARGE CAP STOCK FUND, AND
FIDELITY INTERMEDIATE BOND FUND, without giving effect to the choice
of laws provisions thereof} {FOR FIDELITY SMALL CAP SELECTOR: ((,
without giving effect to the choice of laws provisions thereof))}.
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested
persons," when used herein, shall have the respective meanings
specified in the 1940 Act as now in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to
be signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as
of the date written above.
SIGNATURE LINES OMITTED
EXHIBIT 7
FORM OF
DISTRIBUTION AND SERVICE PLAN
FIDELITY COMMONWEALTH TRUST: FIDELITY SMALL CAP SELECTOR
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by
Rule 12b-1 under the Investment Company Act of 1940 (the "Act") of
Fidelity Small Cap Selector (the "Portfolio"), a series of shares of
Fidelity Commonwealth Trust (the "Fund").
2. The Fund has entered into a General Distribution Agreement with
respect to the Portfolio with Fidelity Distributors Corporation (the
"Distributor"), a wholly-owned subsidiary of Fidelity Management &
Research Company (the "Adviser"), under which the Distributor uses all
reasonable efforts, consistent with its other business, to secure
purchasers for the Portfolio's shares of beneficial interest
("shares"). Under the agreement, the Distributor pays the expenses of
printing and distributing any prospectuses, reports and other
literature used by the Distributor, advertising, and other promotional
activities in connection with the offering of shares of the Portfolio
for sale to the public. It is recognized that the Adviser may use its
management fee revenues as well as past profits or its resources from
any other source, to make payment to the Distributor with respect to
any expenses incurred in connection with the distribution of Portfolio
shares, including the activities referred to above.
3. The Adviser directly, or through the Distributor, may, subject to
the approval of the Trustees, make payments to securities dealers and
other third parties who engage in the sale of shares or who render
shareholder support services, including but not limited to providing
office space, equipment and telephone facilities, answering routine
inquiries regarding the Portfolio, processing shareholder transactions
and providing such other shareholder services as the Fund may
reasonably request.
4. The Portfolio will not make separate payments as a result of this
Plan to the Adviser, Distributor or any other party, it being
recognized that the Portfolio presently pays, and will continue to
pay, a management fee to the Adviser. To the extent that any payments
made by the Portfolio to the Adviser, including payment of management
fees, should be deemed to be indirect financing of any activity
primarily intended to result in the sale of shares of the Portfolio
within the context of Rule 12b-1 under the Act, then such payments
shall be deemed to be authorized by this Plan.
5. This Plan shall become effective upon the approval by a vote of at
least a "majority of the outstanding voting securities of the
Portfolio" (as defined in the Act), the plan having been approved by a
vote of a majority of the Trustees of the Fund, including a majority
of Trustees who are not "interested persons" of the Fund (as defined
in the Act) and who have no direct or indirect financial interest in
the operation of this Plan or in any agreements related to this Plan
(the "Independent Trustees"), cast in person at a meeting called for
the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain
in effect from the date specified above until April 30, 2000 and from
year to year thereafter, provided, however, that such continuance is
subject to approval annually by a vote of a majority of the Trustees
of the Fund, including a majority of the Independent Trustees, cast in
person at a meeting called for the purpose of voting on this Plan.
This Plan may be amended at any time by the Board of Trustees,
provided that (a) any amendment to authorize direct payments by the
Portfolio to finance any activity primarily intended to result in the
sale of shares of the Portfolio, or to increase materially the amount
spent by the Portfolio for distribution, shall be effective only upon
approval by a vote of a majority of the outstanding voting securities
of the Portfolio, and (b) any material amendments of this Plan shall
be effective only upon approval in the manner provided in the first
sentence in this paragraph.
7. This Plan may be terminated at any time, without the payment of
any penalty, by vote of a majority of the Independent Trustees or by a
vote of a majority of the outstanding voting securities of the
Portfolio.
8. During the existence of this Plan, the Fund shall require the
Adviser and/or Distributor to provide the Fund, for review by the
Fund's Board of Trustees, and the Trustees shall review, at least
quarterly, a written report of the amounts expended in connection with
financing any activity primarily intended to result in the sale of
shares of the Portfolio (making estimates of such costs where
necessary or desirable) and the purposes for which such expenditures
were made.
9. This Plan does not require the Adviser or Distributor to perform
any specific type or level of distribution activities or to incur any
specific level of expenses for activities primarily intended to result
in the sale of shares of the Portfolio.
10. Consistent with the limitation of shareholder liability as set
forth in the Fund's Declaration of Trust or other organizational
document, any obligations assumed by the Portfolio pursuant to this
Plan and any agreements related to this Plan shall be limited in all
cases to the Portfolio and its assets, and shall not constitute
obligations of any other series of shares of the Fund.
11. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Plan
shall not be affected thereby.
EXHIBIT 8
FORM OF
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the Agreement) is made as
of the __ day of ____ 1999, by and between Fidelity Commonwealth Trust
(Commonwealth Trust), on behalf of Fidelity Small Cap Selector (the
Fund), a separate series of Commonwealth Trust, and Fidelity Capital
Trust (Capital Trust), each a business trust duly formed under the
laws of the Commonwealth of Massachusetts.
This Agreement is intended to be, and is adopted as, a plan of
reorganization within the meaning of Section 368(a)(1)(F) of the
Internal Revenue Code of 1986, as amended (the Code). The
reorganization will comprise (a) the transfer of all of the assets of
the Fund to a series of Capital Trust (the Series) solely in exchange
for shares of beneficial interest of the Series (the Series Shares)
and the assumption by the Series of the Fund's liabilities; and (b)
the constructive distribution of such Series Shares by the Fund to its
shareholders (Fund Shareholder(s)) in complete liquidation and
termination of the Fund, in exchange for all of the Fund's outstanding
shares (Fund Shares). The Fund shall receive shares of the Series
equal to the number of Fund Shares on the Closing Date (as defined
below). Immediately thereafter, the Fund shall then distribute to each
Fund Shareholder one Series Share for each Fund Share held by the
shareholder on the Closing Date. The foregoing transactions are
referred to herein as the "Reorganization."
In consideration of the mutual promises and subject to the terms and
conditions herein, the parties covenant and agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE FUND
Commonwealth Trust, on behalf of the Fund, represents and warrants as
follows:
(a) The Fund is a series of Commonwealth Trust, a business trust duly
formed, validly existing, and in good standing under the laws of the
Commonwealth of Massachusetts, and has the power to own all of its
properties and assets and to carry out its obligations under this
Agreement. It has all necessary federal, state, and local
authorizations to carry out its business as now being conducted and to
carry out this Agreement;
(b) The Fund is a series of Commonwealth Trust, which is duly
registered as an open-end management investment company under the
Investment Company Act of 1940 (the 1940 Act), as amended, and such
registration is in full force and effect;
(c) The Fund is not in, and the execution, delivery and performance
of this Agreement will not result in a violation of any provision of
the Restated Declaration of Trust or the Bylaws of Commonwealth Trust,
or, to the Fund's knowledge, of any agreement, indenture, instrument,
contract, lease or other undertaking to which the Fund is a party or
by which the Fund is bound or result in the acceleration of any
obligation or the imposition of any penalty under any agreement,
judgment or decree to which the Fund is a party or is bound;
(d) The Fund has no material contracts or other commitments (other
than this Agreement) that will not be terminated without liability to
the Fund on or prior to the Closing Date;
(e) To the Fund's knowledge, no material legal, administrative, or
other proceeding or investigation of, or before, any court or
governmental body presently is pending or threatened against the Fund
or any of its properties or assets that assert liability on the part
of the Fund, except as previously disclosed in writing to Capital
Trust. The Fund knows of no facts that might form the basis for the
institution of such proceedings;
(f) The Fund has filed or will file all federal and state tax returns
that, to the knowledge of the Fund's officers, are required to be
filed by the Fund and has paid or will pay all federal and state taxes
shown to be due on said returns or provision shall have been made for
the payment thereof, and, to the best of the Fund's knowledge, no such
return is currently under audit and no assessment has been asserted
with respect to such returns;
(g) All of the issued and outstanding shares of the Fund are, and at
the Closing Date will be, duly and validly issued and outstanding and
fully paid and nonassessable as a matter of Massachusetts law (except
as disclosed in the Fund's Statement of Additional Information) and
have been offered for sale in conformity with all applicable federal
securities laws. All of the issued and outstanding shares of the Fund
will, at the Closing Date, be held by the persons and in the amounts
as certified in accordance with the provisions of this Agreement;
(h) The information to be furnished by the Fund for use in
applications for orders, registration statements, proxy materials and
other documents that may be necessary in connection with the
transactions contemplated hereby shall be accurate and complete and
shall comply in all material respects with federal securities and
other laws and regulations thereunder applicable thereto;
(i) At both the Valuation Time (as defined in Section 4) and the
Closing Date (as defined in Section 6), the Fund will have the full
right, power, and authority to sell, assign, transfer, and deliver its
portfolio securities and any other assets of the Fund to be
transferred to the Series pursuant to this Agreement. As of the
Closing Date, subject only to the delivery of the Fund's portfolio
securities and any such other assets as contemplated by this
Agreement, the Series will acquire the Fund's portfolio securities and
any such other assets subject to no encumbrances, liens, or security
interests (except for those that may arise in the ordinary course and
are disclosed to the Series) and without any restrictions upon the
transfer thereof;
(j) The execution, delivery, and performance of this Agreement will
have been duly authorized prior to the Closing Date by all necessary
corporate action on the part of the Fund, and this Agreement
constitutes a valid and binding obligation of the Fund enforceable in
accordance with its terms, subject to shareholder approval;
(k) To the best knowledge of the Fund's management, there is no plan
or intention by any of the Fund's shareholders to sell, exchange or
otherwise dispose of any of the Series Shares to be received in the
Reorganization;
(l) The Fund shares are widely held and may be purchased and redeemed
upon request;
(m) Immediately following consummation of the Reorganization, the
Fund Shareholders will own all of the Series Shares and will own such
shares solely by reason of their ownership of the Fund Shares
immediately prior to the Reorganization;
(n) Immediately following the consummation of the Reorganization,
Capital Trust will hold, on behalf of the Series, the same assets and
be subject to the same liabilities that the Fund held or was subject
to immediately prior thereto, except for assets used to pay expenses
incurred in connection with the Reorganization. Assets used to pay
expenses and all distributions (except for distributions and
redemptions arising in the ordinary course of the Fund's business as
an open-end investment company) made by the Fund immediately preceding
the Reorganization will, in the aggregate, constitute less than 1% of
the net assets of the Fund;
(o) At the time of the Reorganization, the Fund will not have
outstanding any warrants, options, convertible securities, or any
other type of right pursuant to which any person could acquire shares
of beneficial interest in the Fund;
(p) The Fund's liabilities to be assumed by the Series in the
Reorganization were incurred by the Fund in the ordinary course of its
business and are associated with the assets to be transferred;
(q) Fund Shareholders each will pay their own expenses, if any,
incurred in connection with the Reorganization;
(r) The fair market value of the Fund's assets to be transferred by
the Fund to the Series will equal or exceed the Fund's liabilities to
be assumed by the Series plus the liabilities to which the transferred
assets are subject;
(s) The Fund is a regulated investment company as defined in Section
851 of the Code;
(t) The Fund is not under the jurisdiction of a court in a proceeding
under Title 11 of the United States Code or similar case within the
meaning of Section 368(a)(3)(A) of the Code;
(u) To the Fund's knowledge, no consent, approval, authorization, or
order of any court or governmental authority is required for the
consummation by the Fund of the transactions contemplated by this
Agreement, except such as shall have been obtained under the
Securities Act of 1933 (the 1933 Act), the Securities Exchange Act of
1934 (the 1934 Act), and the 1940 Act;
(v) The Fund has no known liabilities of a material nature,
contingent or otherwise, other than those shown as belonging to it on
its statement of assets and liabilities as of April 30, 1999 and those
incurred in the ordinary course of the Fund's business as an
investment company since same date as determined above; and
(w) The Fund will be liquidated immediately after the Reorganization.
2. REPRESENTATIONS AND WARRANTIES OF CAPITAL TRUST
Capital Trust represents and warrants as follows:
(a) Capital Trust is a business trust duly formed, validly existing,
and in good standing under the laws of the Commonwealth of
Massachusetts. It has all necessary federal, state, and local
authorizations to carry out its business as now being conducted and to
carry out this Agreement;
(b) Capital Trust is duly registered as an open-end management
investment company under the 1940 Act, and the Series is a duly
established and designated series of Capital Trust;
(c) Capital Trust is not in, and the execution, delivery and
performance of this Agreement will not result in a violation of any
provision of the Amended and Restated Declaration of Trust or Capital
Trust's Bylaws, or, to Capital Trust's knowledge, of any agreement,
indenture, instrument, contract, lease or other undertaking to which
Capital Trust is a party or by which Capital Trust is bound or result
in the acceleration of any obligation or the imposition of any penalty
under any agreement, judgment or decree to which Capital Trust is a
party or is bound;
(d) To Capital Trust's knowledge, no material legal, administrative,
or other proceeding or investigation of, or before, any court or
governmental body presently is pending or threatened against Capital
Trust or any of its properties or assets that assert liability on the
part of Capital Trust, except as previously disclosed in writing to
Capital Trust. Capital Trust knows of no facts that might form the
basis for the institution of such proceedings;
(e) Capital Trust intends for the Series to be a regulated investment
company under Section 851 of the Code;
(f) Prior to the Closing Date, there shall be no issued and
outstanding Series Shares or any other securities issued by the Series
(except for the one share that may be issued to FMR); Series Shares
issued in connection with the transactions contemplated herein will be
duly and validly issued and outstanding, fully paid and non-assessable
under Massachusetts law on the Closing Date;
(g) The execution, delivery, and performance of this Agreement will
have been duly authorized prior to the Closing Date by all necessary
corporate action on the part of Capital Trust, and, upon its proper
execution, this Agreement will constitute a valid and binding
obligation of Capital Trust enforceable against the Series in
accordance with its terms;
(h) As of the Closing Date, the Series Shares will have been duly
authorized and, when so issued and delivered, will be duly and validly
issued shares of the Series, fully paid and non-assessable under
Massachusetts law, except that under Massachusetts law, shareholders
of a Massachusetts business trust, under certain circumstances, may be
held personally liable for obligations of Capital Trust;
(i) The fair market value of the Series Shares to be received by the
Fund Shareholders will be equal to the fair market value of their Fund
Shares surrendered in exchange therefor;
(j) Capital Trust has no plan or intention on behalf of the Series to
issue additional Series Shares following the Reorganization other than
in the ordinary course of the business of the Series as a series of a
registered open-end investment company;
(k) Capital Trust has no plan or intention to redeem or otherwise
reacquire any of the Series Shares issued to the Fund Shareholders
pursuant to the Reorganization other than through redemptions arising
in the ordinary course of the business of the Series as a series of a
registered open-end investment company;
(l) Following the Reorganization, Capital Trust, on behalf of the
Series, will continue the Fund's historic business;
(m) No consideration other than Series Shares will be issued in
exchange for the Fund shares in the Reorganization;
(n) At the time of the Reorganization, there will be no intercompany
indebtedness existing between the Series and the Fund that was issued,
acquired, or that will be settled at a discount;
(o) At the time of the Reorganization, the Series will be a regulated
investment company as defined in Section 851 of the Code;
(p) Capital Trust has no plan or intention to sell or otherwise
dispose of any of the Fund's assets to be acquired by the Series in
the Reorganization, except for dispositions made in the ordinary
course of its business or dispositions necessary to maintain the
status of the Series as a regulated investment company under Section
851 of the Code;
(q) The information to be furnished by Capital Trust with respect to
the Series for use in applications for orders, registration
statements, proxy materials and other documents that may be necessary
in connection with the transactions contemplated hereby shall be
accurate and complete and shall comply in all material respects with
federal securities and other laws and regulations applicable thereto;
(r) Capital Trust, on behalf of the Series, shall use all reasonable
efforts to obtain the approvals and authorizations required by the
1933 Act and the 1940 Act as it may deem appropriate in order to
operate after the Closing Date;
(s) To Capital Trust's knowledge, no consent, approval,
authorization, or order of any court or governmental authority is
required for the consummation by the Series of the transactions
contemplated by this Agreement, except such as shall have been
obtained under the 1933 Act, the 1934 Act, and the 1940 Act; and
(t) Capital Trust, on behalf of the Series, will use the Employer
Identification Number that was used by the Fund.
3. REORGANIZATION
(a) Subject to the requisite approval of the Fund Shareholders, if
applicable, and to the other terms and conditions contained herein,
the Fund agrees to assign, convey, transfer, and deliver to the Series
established by Capital Trust solely for the purpose of acquiring all
of the assets of the Fund (which Series has not issued any Series
Shares (except for one share that may be issued to FMR) or commenced
operations) as of the Closing Date all of the assets of the Fund of
any kind and nature existing on the Closing Date. The Series agrees in
exchange therefor (1) to assume all of the Fund's liabilities existing
on or after the Closing Date, whether or not determinable on the
Closing Date, and (2) to issue and deliver to the Fund the number of
full and fractional Series Shares equal to the value and number of
full and fractional shares of the Fund outstanding at the time of the
closing, as described in paragraph 6, as of the Closing Date provided
for in Section 6(a).
(b) The assets of the Fund to be acquired by the Series and allocated
thereto shall include, without limitation, all cash, cash equivalents,
securities, receivables (including interest or dividends receivables),
claims, choses in action, and other property owned by the Fund, and
any deferred or prepaid expenses shown as an asset on the books of the
Fund on the Closing Date. The Fund will pay or cause to be paid to the
Series any dividend or interest payments received by it on or after
the Closing Date with respect to the assets transferred to the Series
hereunder, and the Series will retain any dividend or interest
payments received by it after the Valuation Time (as defined in
Section 4) with respect to the assets transferred hereunder without
regard to the payment date thereof. The liabilities of the Fund to be
assumed by the Series and allocated thereto, shall include (except as
otherwise provided herein) all of the Fund's liabilities, debts,
obligations, and duties, of whatever kind or nature, whether absolute,
accrued, contingent, or otherwise, whether or not determinable on the
Closing Date, and whether or not specifically referred to in this
Agreement.
(c) Immediately upon delivery to the Fund of the Series Shares, the
individual Trustees of Commonwealth Trust or any officer duly
authorized by them, on the Commonwealth Trust's behalf as the then
sole shareholder of the Series, shall (1) approve (i) a Management
Contract between Capital Trust, on behalf of the Series, and FMR, (ii)
Sub-Advisory Agreements between FMR and Fidelity Management & Research
(U.K.) Inc. and Fidelity Management & Research (Far East) Inc., (iii)
a Distribution and Service Plan under Rule 12b-1 under the 1940 Act
between Capital Trust, on behalf of the Series, and Fidelity
Distributors Corporation (FDC), substantively identical to the
contract, agreements and plan currently in effect with respect to the
Fund immediately prior to the Closing Date (as defined below), except
as to the parties to such contract, agreements and plan, (iv) the
independent accountants who currently serve in that capacity for the
Fund, and (v) the adoption of the revised fundamental policy described
in Proposal 11 of the Proxy Statement.
(d) Pursuant to this Agreement, as soon after the Closing Date as is
conveniently practicable (the Liquidation Date), the Fund will
constructively distribute to the Fund Shareholders the Series Shares
pro rata in proportion to their respective shares of beneficial
interest in the Fund, such Fund Shareholders being shareholders of
record as determined as of the Valuation Time on the Closing Date in
accordance with Commonwealth Trust's Restated Declaration of Trust, in
liquidation of such Fund. Such distribution will be accomplished by
the Fund's transfer agent opening accounts on the share records of the
Series in the names of such Fund Shareholders and transferring the
Series Shares thereto. Each Fund Shareholder's account shall be
credited with the respective pro rata number of full and fractional
(rounded to the third decimal place) Series Shares due that
shareholder. All outstanding Fund Shares, including any represented by
certificates, shall simultaneously be canceled on the Fund's share
transfer records. The Series shall not issue certificates representing
Series Shares in connection with such distribution.
(e) Immediately after the distribution of the Series Shares as set
forth in Section 3(d), the Fund shall be liquidated and terminated,
and any such further actions shall be taken in connection therewith as
required by applicable law.
(f) Any transfer taxes payable upon issuance of Series Shares in a
name other than that of the registered holder on the Fund's books of
the Fund Shares constructively exchanged for the Series Shares shall
be paid by the person to whom such Series Shares are to be issued, as
a condition of such transfer.
(g) Any reporting responsibility of the Fund is and shall remain the
responsibility of the Fund up to and including the date on which it is
liquidated.
4. VALUATION
(a) The valuation time shall be the close of business of the New York
Stock Exchange on the Closing Date (the Valuation Time).
(b) The value of the Fund's net assets to be acquired by the Series
hereunder shall be the net asset value per share computed as of the
Valuation Time, using the valuation procedures set forth in the Fund's
then current Prospectus and Statement of Additional Information.
(c) The number, value, and denomination of full and fractional Series
Shares to be issued in exchange for the Fund's net assets shall be
equal to the number, value, and denomination of full and fractional
Fund Shares outstanding on the Closing Date.
(d) All computations pursuant to this Section shall be made by
Fidelity Service Company, Inc. (FSC), a wholly-owned subsidiary of FMR
Corp., in accordance with its regular practice as pricing agent for
the Fund.
5. FEES; EXPENSES
(a) Capital Trust and the Fund each represents that there is no
person who dealt with it who by reason of such dealings is entitled to
any broker's or finder's fees or commissions arising out of the
transactions contemplated hereby.
(b) The Fund shall be responsible for all expenses, fees and other
charges in connection with the transactions contemplated by the
Agreement.
6. CLOSING DATE
(a) The transfer of the Fund's assets in exchange for the assumption
by the Series of the Fund's liabilities and the issuance of Series
Shares, as described above, together with related acts necessary to
consummate the same, (the Closing), unless otherwise provided herein,
shall occur at the principal office of Commonwealth Trust and Capital
Trust, 82 Devonshire Street, Boston, Massachusetts, on December 29,
1999, or at such other place or date as the parties may agree in
writing (the Closing Date). All acts taking place at the Closing shall
be deemed to take place simultaneously as of the Valuation Time or at
such other time and/or place as the parties may agree.
(b) In the event that on the Closing Date (i) any of the markets for
securities held by the Fund are closed to trading, or (ii) trading
thereon is restricted, or (iii) trading or reporting of trading on
said markets or elsewhere is disrupted, all so that accurate appraisal
of the total net asset value of the Fund is impracticable, the Closing
Date shall be postponed until the first business day after the day
when such trading shall have been fully resumed and reporting shall
have been restored, or such other date as the parties may agree.
(c) The Fund shall deliver at the Closing a certificate of an
authorized officer stating that it has notified Brown Brothers
Harriman & Co., as custodian for the Fund, of the Fund's
reorganization to a series of Capital Trust.
(d) FSC, as transfer agent for the Fund, shall deliver at the Closing
a certificate as to the conversion on its books and records of each
Fund Shareholder account to an account as a holder of Series Shares.
Capital Trust shall issue and deliver a confirmation to the Fund
evidencing the Series Shares to be credited as of the Closing Date or
provide evidence satisfactory to the Fund that such Series Shares have
been credited to the Fund's account on the books of Capital Trust. At
the Closing, each party shall deliver to the other such bills of sale,
checks, assignments, stock certificates, receipts or other documents
as such other party or its counsel may reasonably request.
7. SHAREHOLDER MEETING AND TERMINATION OF THE FUND
(a) If required to do so pursuant to the terms of Commonwealth
Trust's Restated Declaration of Trust or otherwise by applicable law,
the Fund agrees to call a meeting of its shareholders (the
Shareholder's Meeting) to consider and act upon this Agreement. The
Fund shall take all other action necessary to obtain approval of the
transactions contemplated hereby.
(b) The Fund agrees that as soon as reasonably practicable after
distribution of the Series Shares, the Fund shall be liquidated and
terminated as a series of Commonwealth Trust pursuant to its Restated
Declaration of Trust, any further actions shall be taken in connection
therewith as required by applicable law, and on and after the Closing
Date the Fund shall not conduct any business except in connection with
its liquidation and termination.
8. CONDITIONS TO OBLIGATIONS OF CAPITAL TRUST
The obligations of Capital Trust hereunder shall be subject to the
following conditions:
(a) That the Fund furnishes to Capital Trust a statement, dated as of
the Closing Date, signed by an officer of Commonwealth Trust,
certifying that as of the Valuation Time and the Closing Date all
representations and warranties of the Fund made in this Agreement are
true and correct in all material respects and that the Fund has
complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to such dates;
(b) That the Fund furnishes Capital Trust with copies of the
resolutions, certified by an officer of Commonwealth Trust, evidencing
the adoption of this Agreement and, if applicable, the approval of the
transactions contemplated herein by the requisite vote of the holders
of the outstanding shares of beneficial interest of the Fund;
(c) That the Fund shall deliver to Capital Trust at the Closing a
statement of its assets and liabilities, together with a certificate
as to the aggregate asset value of the Fund's portfolio securities,
all as of the Valuation Time, certified on the Fund's behalf by its
Treasurer or Assistant Treasurer;
(d) That the Fund's custodian shall deliver to Capital Trust a
certificate identifying the assets of the Fund held by such custodian
as of the Valuation Time on the Closing Date and stating that at the
Valuation Time (i) the assets held by the custodian will be
transferred to the Series; (ii) the Fund's assets have been duly
endorsed in proper form for transfer in such condition as to
constitute good delivery thereof; and (iii) to the best of the
custodian's knowledge, all necessary taxes in conjunction with the
delivery of the assets, including all applicable federal and state
stock transfer stamps, if any, have been paid or provision for payment
has been made;
(e) That the Fund's transfer agent shall deliver to Capital Trust at
the Closing a certificate setting forth the number of shares of the
Fund outstanding as of the Valuation Time and the name and address of
each holder of record of any such shares and the number of shares held
of record by each such shareholder;
(f) If applicable, that the Fund calls a Shareholder's Meeting to
consider and act upon this Agreement and that the Fund takes all other
action necessary to obtain approval of the transactions contemplated
hereby;
(g) That the Fund delivers to Capital Trust a certificate of an
officer of Commonwealth Trust, dated the Closing Date, that there has
been no material adverse change in the Fund's financial position since
April 30, 1999, other than changes in the market value of its
portfolio securities, or changes due to net redemptions of its shares,
dividends paid, or losses from operations; and
(h) That all of the issued and outstanding shares of beneficial
interest of the Fund shall have been offered for sale and sold in
conformity with all applicable state securities laws and, to the
extent that any audit of the records of the Fund or its transfer agent
by Capital Trust or its agents shall have revealed otherwise, the Fund
shall have taken all actions that in the opinion of Capital Trust are
necessary to remedy any prior failure on the part of the Fund to have
offered for sale and sold such shares in conformity with such laws.
9. CONDITIONS TO OBLIGATIONS OF THE FUND
The obligations of the Fund hereunder shall be subject to the
following conditions:
(a) That Capital Trust shall have executed and delivered to the Fund
an Assumption of Liabilities, certified by an officer of Capital
Trust, dated as of the Closing Date, pursuant to which Capital Trust,
on behalf of the Series, will assume all of the liabilities of the
Fund existing at the Valuation Time in connection with the
transactions contemplated by this Agreement;
(b) That Capital Trust furnishes to the Fund a statement, dated as of
the Closing Date, signed by an officer of Capital Trust, certifying
that as of the Valuation Time and the Closing Date all representations
and warranties of the Series made in this Agreement are true and
correct in all material respects, and Capital Trust has complied with
all the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such dates; and
(c) That the Fund shall have received an opinion of Kirkpatrick &
Lockhart LLP, counsel to the Fund and Capital Trust, to the effect
that the Series Shares are duly authorized and upon delivery to the
Fund as provided in this Agreement will be validly issued and will be
fully paid and nonassessable under Massachusetts law.
10. CONDITIONS TO OBLIGATIONS OF THE FUND AND CAPITAL TRUST
The obligations of the Fund and Capital Trust hereunder shall be
subject to the following conditions:
(a) If applicable, that this Agreement shall have been adopted and
the transactions contemplated herein shall have been approved by the
requisite vote of the holders of the outstanding shares of beneficial
interest of the Fund;
(b) That all consents of other parties and all other consents,
orders, and permits of federal, state, and local regulatory
authorities (including those of the Securities and Exchange Commission
and of state blue sky and securities authorities, including "no
action" positions of such federal or state authorities) deemed
necessary by Capital Trust or the Fund to permit consummation, in all
material respects, of the transactions contemplated hereby shall have
been obtained, except where failure to obtain any such consent, order,
or permit would not involve a risk of a material adverse effect on the
assets or properties of Capital Trust or the Fund, provided that
either party hereto may for itself waive any of such conditions;
(c) That all proceedings taken by either the Fund or the Series in
connection with the transactions contemplated by this Agreement and
all documents incidental thereto shall be satisfactory in form and
substance to it and its counsel, Kirkpatrick & Lockhart LLP;
(d) That Capital Trust shall have taken all necessary action so that
the Series shall be a series of a registered open-end investment
company under the 1940 Act immediately after the closing;
(e) That there shall not be any material litigation pending with
respect to the matters contemplated by this Agreement; and
(f) That Capital Trust and the Fund shall have received an opinion of
Kirkpatrick & Lockhart LLP satisfactory to Capital Trust and the Fund
that for federal income tax purposes:
(i) The Reorganization will be a reorganization under Section
368(a)(1)(F) of the Code, and the Fund and the Series will each be
parties to the Reorganization under Section 368(b) of the Code;
(ii) No gain or loss will be recognized by the Fund upon the
transfer of all of its assets to the Series in exchange solely for the
Series Shares and the assumption of the Fund's liabilities followed by
the distribution of the Series Shares to the shareholders of the Fund
in liquidation of the Fund;
(iii) No gain or loss will be recognized by the Series on the
receipt of the Fund's assets in exchange solely for the Series Shares
and the assumption of the Fund's liabilities;
(iv) The basis of the Fund's assets in the hands of the Series will
be the same as the basis of such assets in the Fund's hands
immediately prior to the Reorganization;
(v) The Series' holding period in the assets to be received from the
Fund will include the Fund's holding period in such assets;
(vi) A Fund Shareholder will recognize no gain or loss on the
exchange of his or her shares of beneficial interest in the Fund for
the Series Shares in the Reorganization;
(vii) A Fund Shareholder's basis in the Series Shares to be received
by him or her will be the same as his or her basis in the Fund Shares
exchanged therefor;
(viii) A Fund Shareholder's holding period for his or her Series
Shares will include the holding period of the Fund Shares exchanged,
provided that those Fund Shares were held as capital assets on the
date of the Reorganization; and
(ix) The Reorganization will not result in the termination of the
Fund's taxable year, and the Fund's tax attributes enumerated in
Section 381(c) of the Code will be taken into account by the Series as
if there had been no conversion.
Notwithstanding anything herein to the contrary, neither the Fund nor
Capital Trust may waive the conditions set forth in this subsection
10(f).
11. COVENANTS OF THE FUND
(a) The Fund covenants to operate its business in the ordinary course
between the date hereof and the Closing Date, it being understood that
such ordinary course of business will include the payment of customary
dividends and distributions.
(b) The Fund covenants that the Series Shares are not being acquired
for the purpose of making any distribution thereof, other than in
accordance with the terms of this Agreement.
(c) The Fund covenants that it will assist Capital Trust in obtaining
such information as Capital Trust reasonably requests concerning the
beneficial ownership of Fund Shares.
(d) The Fund covenants that its liquidation and termination will be
effected in the manner provided in its Restated Declaration of Trust
in accordance with applicable law and, after the Closing Date, the
Fund will not conduct any business except in connection with its
liquidation and termination.
12. TERMINATION; WAIVER
(a) The parties hereto may terminate this Agreement by mutual
consent. In addition, either party may, at its option, terminate this
Agreement at or prior to the Closing Date because
(i) Of a material breach by the other of any representation,
warranty, or agreement contained herein to be performed at or prior to
the Closing Date; or
(ii) A condition herein expressed to be precedent to the obligations
of the terminating party has not been met and it reasonably appears
that it will not or cannot be met.
(b) In the event of any such termination, there shall be no liability
for damages on the part of Capital Trust or the Fund, or their
respective Trustees or officers.
13. SOLE AGREEMENT; AMENDMENTS; WAIVERS; SURVIVAL OF WARRANTIES
(a) This Agreement supersedes all previous correspondence and oral
communications between the parties regarding the subject matter
hereof, constitutes the only understanding with respect to such
subject matter, may not be changed except by a letter of agreement
signed by each party hereto, and shall be construed in accordance with
and governed by the laws of the Commonwealth of Massachusetts.
(b) This Agreement may be amended, modified, or supplemented in such
manner as may be mutually agreed upon in writing by the appropriate
officers of Commonwealth Trust, Capital Trust, the Fund, or the
Series; provided, however, that following the Shareholders' Meeting,
if any, called by the Fund pursuant to Section 7 of this Agreement, no
such amendment may have the effect of changing the provisions for
determining the number of the Series Shares to be received by the Fund
Shareholders under this Agreement to the detriment of such
shareholders without their further approval.
(c) Either party may waive any condition to its obligations
hereunder, provided that such waiver does not have any material
adverse effect on the interests of Fund Shareholders.
The representations, warranties, and covenants contained in the
Agreement, or in any document delivered pursuant hereto or in
connection herewith, shall survive the consummation of the
transactions contemplated hereunder.
14. LIMITATION OF LIABILITY
Copies of the Declarations of Trust of Capital Trust, as amended and
restated, and of Commonwealth Trust, as restated, are on file with the
Secretary of State of the Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the
Trustees of Capital Trust and Commonwealth Trust as trustees and not
individually and that the obligations of the Fund and the Series under
this instrument are not binding upon any of Commonwealth Trust's or
Capital Trust's Trustees, officers, or shareholders individually, but
are binding only upon the assets and property of such Fund or Series.
The Fund and Capital Trust each agrees that its obligations hereunder
apply only to such Fund and the Series, respectively, and not to its
shareholders individually or to the Trustees of such Fund or Series.
15. ASSIGNMENT
This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment
or transfer of any rights or obligations hereunder shall be made by
any party without the written consent of the other party. Nothing
herein expressed or implied is intended or shall be construed to
confer upon or give any person, firm, or corporation other than the
parties hereto and their respective successors and assigns any rights
or remedies under or by reason of this Agreement.
This Agreement may be executed in any number of counterparts, each of
which, when executed and delivered, shall be deemed to be an original.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized officer.
SIGNATURE LINES OMITTED
EXHIBIT 9
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FUNDS ADVISED BY FMR - TABLE OF AVERAGE NET ASSETS AND EXPENSE
RATIOS (A)
INVESTMENT OBJECTIVE AND FUND FISCAL YEAR END (A) AVERAGE NET ASSETS RATIO OF NET ADVISORY FEES
(MILLIONS)(B) TO AVERAGE NET ASSETS PAID
TO FMR (C)
GROWTH
Contrafund II ((pound)) 6/30/98 $ 226.3 0.59%
Fidelity Fifty ((pound)) 6/30/98 180.5 0.43
Advisor Focus Funds:
Consumer Industries: ((pound))
Class A 7/31/98 1.3 0.59
Class T 7/31/98 10.7 0.59
Class B 7/31/98 2.2 0.59
Class C 7/31/98 0.5 0.59
Institutional Class 7/31/98 2.7 0.59
Cyclical Industries: ((pound))
Class A 7/31/98 0.4 0.59
Class T 7/31/98 2.7 0.59
Class B 7/31/98 0.5 0.59
Class C 7/31/98 0.1 0.59
Institutional Class 7/31/98 1.5 0.59
Financial Services: ((pound))
Class A 7/31/98 12.6 0.59
Class T 7/31/98 82.7 0.59
Class B 7/31/98 30.1 0.59
Class C 7/31/98 8.3 0.59
Institutional Class 7/31/98 3.9 0.59
Health Care: ((pound))
Class A 7/31/98 10.5 0.59
Class T 7/31/98 79.2 0.59
Class B 7/31/98 22.1 0.59
Class C 7/31/98 6.5 0.59
Institutional Class 7/31/98 7.1 0.59
Natural Resources: ((pound))
Class A 7/31/98 6.9 0.59
Class T 7/31/98 499.5 0.59
Class B 7/31/98 54.7 0.59
Class C 7/31/98 1.6 0.59
Institutional Class 7/31/98 6.2 0.59
Advisor Focus Funds:
(continued)
Technology: ((pound))
Class A 7/31/98 $ 11.7 0.59%
Class T 7/31/98 76.3 0.59
Class B 7/31/98 17.6 0.59
Class C 7/31/98 3.0 0.59
Institutional Class 7/31/98 5.2 0.59
Utilities Growth: ((pound))
Class A 7/31/98 1.4 0.59
Class T 7/31/98 13.9 0.59
Class B 7/31/98 5.9 0.59
Class C 7/31/98 1.6 0.59
Institutional Class 7/31/98 3.7 0.59
Blue Chip Growth ((pound)) 7/31/98 14,487.5 0.47
Dividend Growth ((pound)) 7/31/98 5,316.4 0.65
Low-Priced Stock ((pound)) 7/31/98 10,834.5 0.74
OTC Portfolio ((pound)) 7/31/98 4,213.9 0.50
Export and Multinational Fund 8/31/98 468.9 0.59
((pound))
Destiny I ((pound)) 9/30/98 6,399.7 0.31
Destiny II ((pound)) 9/30/98 4,058.8 0.45
Advisor Diversified
International ((rex-all)) **
Class A 10/31/99 1.1 0.74((bold italic B))
Class T 10/31/99 3.3 0.74((bold italic B)
Class B 10/31/99 1.5 0.74((bold italic B))
Class C 10/31/99 1.5 0.74((bold italic B))
Institutional Class 10/31/99 1.1 0.74((bold italic B)
Advisor Europe Capital
Appreciation ((rex-all)) **
Class A 10/31/99 1.0 0.74((bold italic B))
Class T 10/31/99 4.7 0.74((bold italic B))
Class B 10/31/99 1.6 0.74((bold italic B))
Class C 10/31/99 1.5 0.74((bold italic B))
Institutional Class 10/31/99 0.5 0.74((bold italic B))
Advisor Global Equity
((rex-all)) **
Class A 10/31/99 $ 1.2 0.74((bold italic B))%
Class T 10/31/99 1.4 0.74((bold italic B))
Class B 10/31/99 1.2 0.74((bold italic B))
Class C 10/31/99 1.3 0.74((bold italic B))
Institutional Class 10/31/99 1.1 0.74((bold italic B))
Advisor International Capital
Appreciation: ((rex-all)) **
Class A 10/31/98 0.6 0.73(dagger)
Class T 10/31/98 6.9 0.73(dagger)
Class B 10/31/98 2.3 0.73(dagger)
Class C 10/31/98 1.3 0.73(dagger)
Institutional Class 10/31/98 5.0 0.73(dagger)
Advisor Japan ((rex-all)) **
Class A 10/31/99 0.7 0.74((bold italic B))
Class T 10/31/99 1.1 0.74((bold italic B))
Class B 10/31/99 0.9 0.74((bold italic B))
Class C 10/31/99 0.6 0.74((bold italic B))
Institutional Class 10/31/99 0.6 0.74((bold italic B))
Advisor Latin America
((rex-all)) **
Class A 10/31/99 0.4 0.74((bold italic B))
Class T 10/31/99 0.5 0.74((bold italic B))
Class B 10/31/99 0.5 0.74((bold italic B))
Class C 10/31/99 0.4 0.74((bold italic B))
Institutional Class 10/31/99 0.4 0.74((bold italic B))
Advisor Overseas: ((epslon))
Class A 10/31/98 8.5 0.89
Class T 10/31/98 1,159.5 0.89
Class B 10/31/98 51.9 0.89
Class C 10/31/98 6.1 0.89
Institutional Class 10/31/98 47.3 0.89
Canada ((epslon)) 10/31/98 71.9 0.30
Capital Appreciation ((pound)) 10/31/98 2,379.7 0.44
Disciplined Equity ((pound)) 10/31/98 2,857.4 0.43
Diversified International 10/31/98 1,849.8 0.83
((epslon))
Emerging Markets ((epslon)) 10/31/98 390.9 0.74
Europe ((epslon)) 10/31/98 $ 1,399.6 0.73%
Europe Capital Appreciation 10/31/98 594.4 0.72
((epslon))
France ((epslon)) 10/31/98 12.5 0.73
Germany ((epslon)) 10/31/98 23.7 0.73
Hong Kong and China ((rex-all)) 10/31/98 154.3 0.74
International Value ((rex-all)) 10/31/98 454.5 0.82
Japan ((rex-all)) 10/31/98 238.4 1.01
Japan Small Companies 10/31/98 95.1 0.74
((rex-all))
Latin America ((epslon)) 10/31/98 594.2 0.75
Nordic ((epslon)) 10/31/98 104.3 0.74
Overseas ((epslon)) 10/31/98 3,862.7 0.90
Pacific Basin ((rex-all)) 10/31/98 206.8 1.11
Southeast Asia ((rex-all)) 10/31/98 235.6 1.16
Stock Selector ((pound)) 10/31/98 1,885.4 0.43
TechnoQuant Growth 10/31/98 67.4 0.39
United Kingdom ((epslon)) 10/31/98 7.5 0.74
Value ((pound)) 10/31/98 7,451.9 0.41
Worldwide ((epslon)) 10/31/98 1,169.1 0.74
Advisor Dividend Growth
((pound))**
Class A 11/30/99 7.9 0.59((bold italic B))
Class T 11/30/99 76.2 0.59((bold italic B))
Class B 11/30/99 55.9 0.59((bold italic B))
Class C 11/30/99 25.3 0.59((bold italic B))
Institutional Class 11/30/99 18.2 0.59((bold italic B))
Advisor Equity Growth:
((pound))
Class A 11/30/98 56.8 0.59
Class T 11/30/98 4,568.3 0.59
Class B 11/30/98 166.9 0.59
Class C 11/30/98 26.0 0.59
Institutional Class 11/30/98 1,004.7 0.59
Advisor Growth
Opportunities:((pound))
Class A 11/30/98 255.0 0.46
Class T 11/30/98 22,748.7 0.46
Class B 11/30/98 925.6 0.46
Class C 11/30/98 146.1 0.46
Institutional Class 11/30/98 493.0 0.46
Advisor Large Cap: ((pound))
Class A 11/30/98 $ 3.1 0.59%
Class T 11/30/98 59.5 0.59
Class B 11/30/98 27.5 0.59
Class C 11/30/98 1.5 0.59
Institutional Class 11/30/98 7.7 0.59
Advisor Mid Cap: ((pound))
Class A 11/30/98 8.2 0.59
Class T 11/30/98 357.3 0.59
Class B 11/30/98 73.2 0.59
Class C 11/30/98 6.5 0.59
Institutional Class 11/30/98 35.4 0.59
Advisor Retirement Growth
((pound))**
Class A 11/30/99 0.6 0.59((bold italic B))
Class T 11/30/99 3.5 0.59((bold italic B))
Class B 11/30/99 1.7 0.59((bold italic B))
Class C 11/30/99 1.1 0.59((bold italic B))
Institutional Class 11/30/99 0.3 0.59((bold italic B))
Advisor Small Cap: ((pound))**
Class A 11/30/98 4.2 0.74((bold italic B))
Class T 11/30/98 30.2 0.74((bold italic B))
Class B 11/30/98 9.5 0.74((bold italic B))
Class C 11/30/98 9.4 0.74((bold italic B))
Institutional Class 11/30/98 8.2 0.74((bold italic B))
Advisor Strategic
Opportunities: ((pound))
Class A 11/30/98 3.5 0.38
Class T 11/30/98 491.8 0.38
Class B 11/30/98 109.5 0.38
Initial Class 11/30/98 20.2 0.38
Institutional Class 11/30/98 4.7 0.38
Advisor TechnoQuant Growth:
((pound))
Class A 11/30/98 $ 3.8 0.59%
Class T 11/30/98 18.3 0.59
Class B 11/30/98 11.6 0.59
Class C 11/30/98 0.3 0.59
Institutional Class 11/30/98 1.3 0.59
Emerging Growth ((pound)) 11/30/98 2,172.0 0.79
Growth Company ((pound)) 11/30/98 10,377.6 0.42
New Millennium ((pound)) 11/30/98 1,525.9 0.62
Retirement Growth ((pound)) 11/30/98 4,376.5 0.40
Contrafund ((pound)) 12/31/98 33,442.4 0.45
Trend ((pound)) 12/31/98 1,354.1 0.39
Variable Insurance Products:
Growth
Initial Class 12/31/98 9,027.5 0.59
Service Class 12/31/98 50.6 0.59
Overseas ((epslon))
Initial Class 12/31/98 2,073.3 0.74
Service Class 12/31/98 15.9 0.74
Variable Insurance Products II:
Asset Manager: Growth
((pound))
Initial Class 12/31/98 495.2 0.59
Service Class 12/31/98 1.1 0.59
Contrafund ((pound))
Initial Class 12/31/98 4,974.2 0.59
Service Class 12/31/98 61.3 0.59
Variable Insurance Products
III:
Growth Opportunities ((pound))
Initial Class 12/31/98 1,296.4 0.59
Service Class 12/31/98 66.4 0.59
Mid Cap ((pound))**
Initial Class 12/31/98 0.5 .59((bold italic B))
Service Class 12/31/98 0.5 .59((bold italic B))
Select Portfolios:
Air Transportation ((pound)) 2/28/99 $ 98.2 0.58%
Automotive ((pound)) 2/28/99 60.6 0.59
Biotechnology ((pound)) 2/28/99 574.0 0.59
Brokerage and Investment 2/28/99 728.9 0.59
Management ((pound))
Business Services and 2/28/99 55.4 0.59
Outsourcing ((pound))
Chemicals ((pound)) 2/28/99 47.2 0.59
Computers ((pound)) 2/28/99 1,008.6 0.60
Construction and Housing 2/28/99 83.1 0.59
((pound))
Consumer Industries ((pound)) 2/28/99 77.9 0.59
Cyclical Industries ((pound)) 2/28/99 3.9 0.59
Defense and Aerospace 2/28/99 53.5 0.58
((pound))
Developing Communications 2/28/99 310.5 0.60
((pound))
Electronics ((pound)) 2/28/99 2,259.4 0.59
Energy ((pound)) 2/28/99 140.5 0.59
Energy Service ((pound)) 2/28/99 653.1 0.59
Environmental Services 2/28/99 20.8 0.59
((pound))
Financial Services ((pound)) 2/28/99 624.8 0.59
Food and Agriculture 2/28/99 227.4 0.59
((pound))
Gold ((pound)) 2/28/99 206.8 0.59
Health Care ((pound)) 2/28/99 2,518.2 0.59
Home Finance ((pound)) 2/28/99 1,350.2 0.58
Industrial Equipment 2/28/99 42.5 0.59
((pound))
Industrial Materials 2/28/99 16.1 0.59
((pound))
Insurance ((pound)) 2/28/99 110.1 0.59
Leisure ((pound)) 2/28/99 292.2 0.59
Medical Delivery ((pound)) 2/28/99 155.5 0.59
Medical Equipment and 2/28/99 16.1 0.60(dagger)
Systems ((pound)) **
Multimedia ((pound)) 2/28/99 130.4 0.59
Natural Gas ((pound)) 2/28/99 51.5 0.59
Natural Resources ((pound)) 2/28/99 6.5 0.59
Paper and Forest Products 2/28/99 15.0 0.59
((pound))
Select Portfolios: - continued
Precious Metals and 2/28/99 $ 150.1 0.59%
Minerals ((pound))
Regional Banks ((pound)) 2/28/99 1,247.4 0.59
Retailing ((pound)) 2/28/99 282.2 0.59
Software and Computer 2/28/99 572.6 0.59
Services ((pound))
Technology ((pound)) 2/28/99 758.6 0.60
Telecommunications ((pound)) 2/28/99 783.1 0.59
Transportation ((pound)) 2/28/99 24.4 0.58
Utilities Growth ((pound)) 2/28/99 408.1 0.59
Magellan ((pound)) 3/31/99 75,792.2 0.43
Large Cap Stock ((pound)) 4/30/99 286.2 0.54
Mid Cap Stock ((pound)) 4/30/99 1,687.0 0.50
Small Cap Selector ((pound)) 4/30/99 703.9 0.53
Small Cap Stock ((pound)) 4/30/99 557.9 0.73
</TABLE>
(a) All fund data are as of the fiscal year end noted in the chart
or as of April 30, 1999, if fiscal year end figures are not yet
available.
(b) Average net assets are computed on the basis of average net
assets of each fund or class at the close of business on each business
day throughout its fiscal period.
(c) Reflects reductions for any expense reimbursement paid by or
due from FMR pursuant to voluntary or state expense limitations. Funds
so affected are indicated by an (*). The ratio for certain multi-class
funds is presented gross of expense reductions for presentation
purposes.
(dagger) Annualized
** Less than a complete fiscal year
((bold italic B)) Based on estimated expenses for the first
year
((rex-all)) Fidelity Management & Research Company (FMR) has
entered into sub-advisory agreements with the following affiliates:
Fidelity Management & Research (U.K.) Inc. (FMR U.K.), Fidelity
Management & Research (Far East) Inc. (FMR Far East), Fidelity
Investments Japan Ltd. (FIJ), Fidelity International Investment
Advisors (FIIA), and Fidelity International Investment Advisors (U.K.)
Limited (FIIA (U.K.) L), with respect to the fund.
((epslon)) FMR has entered into sub-advisory agreements with the
following affiliates: FMR U.K., FMR Far East, FIIA, and FIIA (U.K.) L,
with respect to the fund.
((pound)) FMR has entered into sub-advisory agreements with FMR
U.K. and FMR Far East, with respect to the fund.
EXHIBIT 10
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FUNDS ADVISED BY FMR - TABLE OF AVERAGE NET ASSETS AND EXPENSE
RATIOS (A)
INVESTMENT OBJECTIVE AND FUND FISCAL YEAR END (A) AVERAGE NET ASSETS RATIO OF NET ADVISORY FEES
(MILLIONS)(B) TO AVERAGE NET ASSETS PAID
TO FMR (C)
TAXABLE BOND
The North Carolina Capital
Management Trust:
Term Portfolio (u) 6/30/98 $ 71.0 0.35%
Ginnie Mae ((pound)) (u) 7/31/98 863.5 0.42*
Government Income (u) 7/31/98 1,191.0 0.44
Intermediate Government 7/31/98 735.8 0.38
Income ((pound)) (u)
Target Timeline Funds:
((pound)) (u)
1999 7/31/98 13.1 0.00*
2001 7/31/98 11.7 0.00*
2003 7/31/98 16.4 0.00*
Spartan Ginnie Mae (u) 8/31/98 614.3 0.38*
Short-Intermediate Government 9/30/98 126.3 0.44
(u)
Spartan Investment Grade 9/30/98 820.2 0.38*
Bond ((pound)) (u)
Spartan Short-Term Bond 9/30/98 316.3 0.38*
((pound)) (u)
Advisor Mortgage Securties:
((pound))(#)(u)
Class A 10/31/98 0.8 0.44
Class B 10/31/98 4.0 0.44
Class T 10/31/98 14.6 0.44
Institutional Class 10/31/98 21.3 0.44
Initial Class 10/31/98 471.0 0.44
Advisor Government
Investment: ((pound))(u)
Class A 10/31/98 3.1 0.43
Class B 10/31/98 29.1 0.43
Class T 10/31/98 161.2 0.43
Class C 10/31/98 3.7 0.43
Institutional Class 10/31/98 24.7 0.43
Advisor High Yield: ((pound))
Class A 10/31/98 87.2 0.58
Class B 10/31/98 823.9 0.58
Class T 10/31/98 2,481.8 0.58
Class C 10/31/98 71.0 0.58
Institutional Class 10/31/98 117.4 0.58
Advisor Short Fixed-Income:
((pound))(u)
Class A 10/31/98 $ 6.5 0.44%
Class T 10/31/98 336.8 0.44
Class C 10/31/98 2.0 0.44
Institutional Class 10/31/98 6.5 0.44
Advisor Intermediate Bond:
((pound))(#)(u)
Class A 11/30/98 6.1 0.43
Class B 11/30/98 27.2 0.43
Class T 11/30/98 278.0 0.43
Class C 11/30/98 2.5 0.43
Institutional Class 11/30/98 173.2 0.43
Institutional 11/30/98 356.7 0.45
Short-Intermediate
Government (u)
Real Estate High Income 11/30/98 73.1 0.73
Advisor Emerging Markets
Income: ((epslon))(#)
Class A 12/31/98 2.5 0.69
Class B 12/31/98 20.4 0.69
Class T 12/31/98 72.8 0.69
Class C 12/31/98 0.4 0.69
Institutional Class 12/31/98 1.0 0.69
Advisor Strategic Income:
((pound))(#)(u)
Class A 12/31/98 6.9 0.58
Class B 12/31/98 68.3 0.58
Class T 12/31/98 162.4 0.58
Class C 12/31/98 7.0 0.58
Institutional Class 12/31/98 6.0 0.58
International Bond ((epslon)) 12/31/98 74.5 0.68
New Markets Income ((rex-all)) 12/31/98 279.0 0.69
Real Estate High Income II 12/31/98 132.0 0.73
Strategic Income** 12/31/98 18.3 0.04*(dagger)
Variable Insurance Products:
High Income ((pound))
Initial Class 12/31/98 2,449.6 0.58
Service Class 12/31/98 66.6 0.58
Variable Insurance Products
II:
Investment Grade Bond (u) 12/31/98 262.9 0.43
U.S. Bond Index (u) 2/28/99 1,060.1 0.07*
Capital & Income ((pound)) 4/30/99 $ 2,276.0 0.58%
High Income ((pound)) 4/30/99 3,015.0 0.80
Intermediate Bond ((pound)) (u) 4/30/99 3,336.4 0.43
Investment Grade Bond 4/30/99 2,091.6 0.43
((pound)) (u)
Short-Term Bond ((pound)) (u) 4/30/99 857.0 0.41*
Spartan Government Income (u) 4/30/99 560.0 0.60*
</TABLE>
(a) All fund data are as of the fiscal year end noted in the chart
or as of April 30, 1999.
(b) Average net assets are computed on the basis of average net
assets of each fund at the close of business on each business day
throughout its fiscal period.
(c) Reflects reductions for any expense reimbursement paid by or
due from FMR pursuant to voluntary or state expense limitations. Funds
so affected are indicated by an (*). For multiple class funds, the
ratio of net advisory fees to average net assets is presented gross of
reductions for certain classes, for presentation purposes. Funds so
affected are indicated by (#).
(dagger) Annualized
** Less than a complete fiscal year
((rex-all)) Fidelity Management & Research Company has entered into
sub-advisory agreements with the following affiliates: Fidelity
Management & Research (U.K.) Inc. (FMR U.K.), Fidelity Management &
Research (Far East) Inc. (FMR Far East), Fidelity Investments Japan
Ltd. (FIJ), Fidelity International Investment Advisors (FIIA), and
Fidelity International Investment Advisors (U.K.) Limited (FIIA (U.K.)
L), with respect to the fund.
((epslon)) Fidelity Management & Research Company has entered into
sub-advisory agreements with the following affiliates: FMR U.K., FMR
Far East, FIIA, and FIIA (U.K.) L, with respect to the fund.
((pound)) Fidelity Management & Research Company has entered into
sub-advisory agreements with FMR U.K. and FMR Far East, with respect
to the fund.
(u) Fidelity Management & Research Company has entered into a
sub-advisory agreement with Fidelity Investments Money Management,
Inc., with respect to the fund.
COMM-pxs-0799 CUSIP#315912105/FUND#032
1.720678.100 CUSIP#315912402/FUND#338
CUSIP#315912303/FUND#336
CUSIP#315912501/FUND#340
CUSIP#316128404/FUND#337
Vote this proxy card TODAY! Your prompt response will
save your fund the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- ----------------------------------------------------------------------
FIDELITY COMMONWEALTH TRUST: FIDELITY SMALL CAP STOCK FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward
C. Johnson 3d, Marvin L. Mann , and Eric D. Roiter, or any one
or more of them, attorneys, with full power of substitution, to vote
all shares of FIDELITY COMMONWEALTH TRUST as indicated above which the
undersigned is entitled to vote at the Special Meeting of Shareholders
of the fund to be held at the office of the trust at 82 Devonshire
St., Boston, MA 02109, on September 15, 1999 at 9:00 a.m. and at any
adjournments thereof. All powers may be exercised by a majority of
said proxy holders or substitutes voting or acting or, if only one
votes and acts, then by that one. This Proxy shall be voted on the
proposals described in the Proxy Statement as specified on the reverse
side. Receipt of the Notice of the Meeting and the accompanying Proxy
Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When
signing in a fiduciary capacity, such as executor, administrator,
trustee, attorney, guardian, etc., please so indicate. Corporate and
partnership proxies should be signed by an authorized person
indicating the person's title.
Date , 1999
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
(340, 337, 338, 336, 032 HH)
Please refer to the Proxy Statement discussion of each of these
matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE
PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with
their best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
Please fold and detach card at perforation before mailing .
- ----------------------------------------------------------------------
Please vote by filling in the boxes below.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the twelve nominees FOR all nominees listed WITHHOLD authority to vote 1.
specified below as Trustees: (except as marked to the for all nominees.
(01) Ralph F. Cox, (02) contrary at left).
Phyllis Burke Davis, (03)
Robert M. Gates, (04) Edward [ ]
C. Johnson 3d, (05) E.
Bradley Jones, (06) Donald [ ]
J. Kirk, (07) Peter S.
Lynch, (08) William O.
McCoy, (09) Gerald C.
McDonough, (10) Marvin L.
Mann, (11) Robert C. Pozen,
and (12) Thomas R. Williams
(INSTRUCTION: TO WITHHOLD
AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE(S), WRITE
THE NAME(S) OF THE
NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
______________________________________________________________________
FOR AGAINST ABSTAIN
2. To ratify the selection of [ ] [ ] [ ] 2.
Deloitte & Touche LLP as
independent accountants of
the fund.
3. To authorize the Trustees to [ ] [ ] [ ] 3.
adopt an amended and
restated Declaration of Trust.
COMM-pxc-0799 cusip #315912501 #340 HH
Vote this proxy card TODAY! Your prompt response will
save your fund the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- ----------------------------------------------------------------------
FIDELITY COMMONWEALTH TRUST: FIDELITY MID-CAP STOCK FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward
C. Johnson 3d, Marvin L. Mann , and Eric D. Roiter, or any one
or more of them, attorneys, with full power of substitution, to vote
all shares of FIDELITY COMMONWEALTH TRUST as indicated above which the
undersigned is entitled to vote at the Special Meeting of Shareholders
of the fund to be held at the office of the trust at 82 Devonshire
St., Boston, MA 02109, on September 15, 1999 at 9:00 a.m. and at any
adjournments thereof. All powers may be exercised by a majority of
said proxy holders or substitutes voting or acting or, if only one
votes and acts, then by that one. This Proxy shall be voted on the
proposals described in the Proxy Statement as specified on the reverse
side. Receipt of the Notice of the Meeting and the accompanying Proxy
Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When
signing in a fiduciary capacity, such as executor, administrator,
trustee, attorney, guardian, etc., please so indicate. Corporate and
partnership proxies should be signed by an authorized person
indicating the person's title.
Date , 1999
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
(340, 337, 338, 336, 032 HH)
Please refer to the Proxy Statement discussion of each of these
matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE
PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with
their best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
Please fold and detach card at perforation before mailing.
- ----------------------------------------------------------------------
Please vote by filling in the boxes below.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the twelve nominees FOR all nominees listed WITHHOLD authority to vote 1.
specified below as Trustees: (except as marked to the for all nominees.
(01) Ralph F. Cox, (02) contrary at left).
Phyllis Burke Davis, (03)
Robert M. Gates, (04) Edward
C. Johnson 3d, (05) E.
Bradley Jones, (06) Donald
J. Kirk, (07) Peter S. [ ]
Lynch, (08) William O. [ ]
McCoy, (09) Gerald C.
McDonough, (10) Marvin L.
Mann, (11) Robert C. Pozen,
and (12) Thomas R. Williams
(INSTRUCTION: TO WITHHOLD
AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE(S), WRITE
THE NAME(S) OF THE
NOMINEE(S) ON THE LINE
BELOW.)
</TABLE>
______________________________________________________________________
FOR AGAINST ABSTAIN
2. To ratify the selection of [ ] [ ] [ ] 2.
PricewaterhouseCoopers LLP
as independent accountants
of the fund.
3. To authorize the Trustees to [ ] [ ] [ ] 3.
adopt an amended and
restated Declaration of Trust.
6. To approve an amended [ ] [ ] [ ] 6.
sub-advisory agreement with
Fidelity Management &
Research (U.K.) Inc. for the
fund.
7. To approve an amended [ ] [ ] [ ] 7.
sub-advisory agreement with
Fidelity Management &
Research (Far East) Inc. for
the fund.
COMM-pxc-0799 cusip #316128404 #337 HH
Vote this proxy card TODAY! Your prompt response will
save your fund the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- ----------------------------------------------------------------------
FIDELITY COMMONWEALTH TRUST: FIDELITY LARGE CAP STOCK FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward
C. Johnson 3d, Marvin L. Mann , and Eric D. Roiter, or any one
or more of them, attorneys, with full power of substitution, to vote
all shares of FIDELITY COMMONWEALTH TRUST as indicated above which the
undersigned is entitled to vote at the Special Meeting of Shareholders
of the fund to be held at the office of the trust at 82 Devonshire
St., Boston, MA 02109, on September 15, 1999 at 9:00 a.m. and at any
adjournments thereof. All powers may be exercised by a majority of
said proxy holders or substitutes voting or acting or, if only one
votes and acts, then by that one. This Proxy shall be voted on the
proposals described in the Proxy Statement as specified on the reverse
side. Receipt of the Notice of the Meeting and the accompanying Proxy
Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When
signing in a fiduciary capacity, such as executor, administrator,
trustee, attorney, guardian, etc., please so indicate. Corporate and
partnership proxies should be signed by an authorized person
indicating the person's title.
Date , 1999
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
(340, 337, 338, 336, 032 HH)
Please refer to the Proxy Statement discussion of each of these
matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE
PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with
their best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
Please fold and detach card at perforation before mailing .
- ----------------------------------------------------------------------
Please vote by filling in the boxes below.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the twelve nominees FOR all nominees listed WITHHOLD authority to vote 1.
specified below as Trustees: (except as marked to the for all nominees.
(01) Ralph F. Cox, (02) contrary at left).
Phyllis Burke Davis, (03)
Robert M. Gates, (04) Edward
C. Johnson 3d, (05) E. [ ]
Bradley Jones, (06) Donald [ ]
J. Kirk, (07) Peter S.
Lynch, (08) William O.
McCoy, (09) Gerald C.
McDonough, (10) Marvin L.
Mann, (11) Robert C. Pozen,
and (12) Thomas R. Williams
(INSTRUCTION: TO WITHHOLD
AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE(S), WRITE
THE NAME(S) OF THE
NOMINEE(S) ON THE LINE
BELOW.)
</TABLE>
______________________________________________________________________
FOR AGAINST ABSTAIN
2. To ratify the selection of [ ] [ ] [ ] 2.
Deloitte & Touche LLP as
independent accountants of
the fund.
3. To authorize the Trustees to [ ] [ ] [ ] 3.
adopt an amended and
restated Declaration of Trust.
4. To approve an amended [ ] [ ] [ ] 4.
management contract for the
fund.
6. To approve an amended [ ] [ ] [ ] 6.
sub-advisory agreement with
Fidelity Management &
Research (U.K.) Inc. for the
fund.
7. To approve an amended [ ] [ ] [ ] 7.
sub-advisory agreement with
Fidelity Management &
Research (Far East) Inc. for
the fund.
11. To amend the fund's [ ] [ ] [ ] 11.
fundamental investment
limitation concerning
diversification to exclude
securities of other
investment companies from
the limitation.
COMM-pxc-0799 cusip #315912402 #338 HH
Vote this proxy card TODAY! Your prompt response will
save your fund the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- ----------------------------------------------------------------------
FIDELITY COMMONWEALTH TRUST: FIDELITY SMALL CAP SELECTOR
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward
C. Johnson 3d, Marvin L. Mann , and Eric D. Roiter, or any one
or more of them, attorneys, with full power of substitution, to vote
all shares of FIDELITY COMMONWEALTH TRUST as indicated above which the
undersigned is entitled to vote at the Special Meeting of Shareholders
of the fund to be held at the office of the trust at 82 Devonshire
St., Boston, MA 02109, on September 15, 1999 at 9:00 a.m. and at any
adjournments thereof. All powers may be exercised by a majority of
said proxy holders or substitutes voting or acting or, if only one
votes and acts, then by that one. This Proxy shall be voted on the
proposals described in the Proxy Statement as specified on the reverse
side. Receipt of the Notice of the Meeting and the accompanying Proxy
Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When
signing in a fiduciary capacity, such as executor, administrator,
trustee, attorney, guardian, etc., please so indicate. Corporate and
partnership proxies should be signed by an authorized person
indicating the person's title.
Date , 1999
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
(340, 337, 338, 336, 032 HH)
Please refer to the Proxy Statement discussion of each of these
matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE
PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with
their best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
Please fold and detach card at perforation before mailing .
- ----------------------------------------------------------------------
Please vote by filling in the boxes below.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the twelve nominees FOR all nominees listed WITHHOLD authority to vote 1.
specified below as Trustees: (except as marked to the for all nominees.
(01) Ralph F. Cox, (02) contrary at left).
Phyllis Burke Davis, (03)
Robert M. Gates, (04) Edward
C. Johnson 3d, (05) E. [ ]
Bradley Jones, (06) Donald
J. Kirk, (07) Peter S. [ ]
Lynch, (08) William O.
McCoy, (09) Gerald C.
McDonough, (10) Marvin L.
Mann, (11) Robert C. Pozen,
and (12) Thomas R. Williams
(INSTRUCTION: TO WITHHOLD
AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE(S), WRITE
THE NAME(S) OF THE
NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
______________________________________________________________________
FOR AGAINST ABSTAIN
2. To ratify the selection of [ ] [ ] [ ] 2.
Deloitte & Touche LLP as
independent accountants of
the fund.
3. To authorize the Trustees to [ ] [ ] [ ] 3.
adopt an amended and
restated Declaration of Trust.
4. To approve an amended [ ] [ ] [ ] 4.
management contract for the
fund.
6. To approve an amended [ ] [ ] [ ] 6.
sub-advisory agreement with
Fidelity Management &
Research (U.K.) Inc. for the
fund.
7. To approve an amended [ ] [ ] [ ] 7.
sub-advisory agreement with
Fidelity Management &
Research (Far East) Inc. for
the fund.
8. To approve a distribution and [ ] [ ] [ ] 8.
service plan pursuant to
Rule 12b-1 for the fund.
9. To approve an agreement and [ ] [ ] [ ] 9.
plan providing for the
reorganization of the fund
from a separate series of
one Massachusetts business
trust to another.
11. To amend the fund's [ ] [ ] [ ] 11.
fundamental investment
limitation concerning
diversification to exclude
securities of other
investment companies from
the limitation.
COMM-pxc-0799 cusip #315912303 #336 HH
Vote this proxy card TODAY! Your prompt response will
save your fund the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- ----------------------------------------------------------------------
FIDELITY COMMONWEALTH TRUST: FIDELITY INTERMEDIATE BOND FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward
C. Johnson 3d, Marvin L. Mann , and Eric D. Roiter, or any one
or more of them, attorneys, with full power of substitution, to vote
all shares of FIDELITY COMMONWEALTH TRUST as indicated above which the
undersigned is entitled to vote at the Special Meeting of Shareholders
of the fund to be held at the office of the trust at 82 Devonshire
St., Boston, MA 02109, on September 15, 1999 at 9:00 a.m. and at any
adjournments thereof. All powers may be exercised by a majority of
said proxy holders or substitutes voting or acting or, if only one
votes and acts, then by that one. This Proxy shall be voted on the
proposals described in the Proxy Statement as specified on the reverse
side. Receipt of the Notice of the Meeting and the accompanying Proxy
Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When
signing in a fiduciary capacity, such as executor, administrator,
trustee, attorney, guardian, etc., please so indicate. Corporate and
partnership proxies should be signed by an authorized person
indicating the person's title.
Date , 1999
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
(340, 337, 338, 336, 032 HH)
Please refer to the Proxy Statement discussion of each of these
matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE
PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with
their best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
Please fold and detach card at perforation before mailing.
- ----------------------------------------------------------------------
Please vote by filling in the boxes below.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the twelve nominees FOR all nominees listed WITHHOLD authority to vote 1.
specified below as Trustees: (except as marked to the for all nominees.
(01) Ralph F. Cox, (02) contrary at left).
Phyllis Burke Davis, (03)
Robert M. Gates, (04) Edward
C. Johnson 3d, (05) E. [ ]
Bradley Jones, (06) Donald
J. Kirk, (07) Peter S. [ ]
Lynch, (08) William O.
McCoy, (09) Gerald C.
McDonough, (10) Marvin L.
Mann, (11) Robert C. Pozen,
and (12) Thomas R. Williams
(INSTRUCTION: TO WITHHOLD
AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE(S), WRITE
THE NAME(S) OF THE
NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
FOR AGAINST ABSTAIN
2. To ratify the selection of [ ] [ ] [ ] 2.
Deloitte & Touche LLP as
independent accountants of
the fund.
3. To authorize the Trustees to [ ] [ ] [ ] 3.
adopt an amended and
restated Declaration of Trust.
5. To approve an amended [ ] [ ] [ ] 5.
management contract for the
fund.
6. To approve an amended [ ] [ ] [ ] 6.
sub-advisory agreement with
Fidelity Management &
Research (U.K.) Inc. for the
fund.
7. To approve an amended [ ] [ ] [ ] 7.
sub-advisory agreement with
Fidelity Management &
Research (Far East) Inc. for
the fund.
10. To eliminate a fundamental [ ] [ ] [ ] 10.
investment policy of the fund.
11. To amend the fund's [ ] [ ] [ ] 11.
fundamental investment
limitation concerning
diversification to exclude
securities of other
investment companies from
the limitation.
12. To amend the fund's [ ] [ ] [ ] 12.
fundamental investment
limitation concerning the
underwriting of securities.
COMM-pxc-0799 cusip #315912105 #032 HH
