SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 2-52322)
UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 69 [X]
and
REGISTRATION STATEMENT (No. 811-2546)
UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 69 [X]
Fidelity Commonwealth Trust
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number: 617-563-7000
Eric D. Roiter, Secretary
82 Devonshire Street
Boston, Massachusetts 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
( ) immediately upon filing pursuant to paragraph (b).
( ) on ( ) pursuant to paragraph (b).
( ) 60 days after filing pursuant to paragraph (a)(1).
( x ) on June 24, 2000 pursuant to paragraph (a)(1) of Rule 485.
( ) 75 days after filing pursuant to paragraph (a)(2).
( ) on ( ) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
( ) this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
Like securities of all mutual
funds, these securities have
not been approved or
disapproved by the
Securities and Exchange
Commission, and the
Securities and Exchange
Commission has not
determined if this
prospectus is accurate or
complete. Any
representation to the
contrary is a criminal
offense.
FIDELITY(registered trademark)
INTERMEDIATE BOND
FUND
(fund number 032, trading symbol FTHRX)
PROSPECTUS
JUNE 24, 2000
(fidelity_logo_graphic)(registered trademark)
82 Devonshire Street, Boston, MA 02109
CONTENTS
FUND SUMMARY 3 INVESTMENT SUMMARY
3 PERFORMANCE
4 FEE TABLE
FUND BASICS 6 INVESTMENT DETAILS
8 VALUING SHARES
SHAREHOLDER INFORMATION 9 BUYING AND SELLING SHARES
14 EXCHANGING SHARES
15 ACCOUNT FEATURES AND POLICIES
20 DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS
21 TAX CONSEQUENCES
FUND SERVICES 22 FUND MANAGEMENT
23 FUND DISTRIBUTION
APPENDIX 24 FINANCIAL HIGHLIGHTS
FUND SUMMARY
INVESTMENT SUMMARY
INVESTMENT OBJECTIVE
INTERMEDIATE BOND FUND seeks a high level of current income.
PRINCIPAL INVESTMENT STRATEGIES
Fidelity Management & Research Company (FMR)'s principal investment
strategies include:
(small solid bullet) Normally investing in U.S. dollar-denominated
investment-grade bonds (those of medium and high quality).
(small solid bullet) Managing the fund to have similar overall
interest rate risk to the Lehman Brothers Intermediate
Government/Corporate Bond Index.
(small solid bullet) Normally maintaining a dollar-weighted average
maturity between three and 10 years.
(small solid bullet) Allocating assets across different market sectors
and maturities.
(small solid bullet) Analyzing a security's structural features and
current pricing, trading opportunities, and the credit quality of its
issuer to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) INTEREST RATE CHANGES. Interest rate increases
can cause the price of a debt security to decrease.
(small solid bullet) FOREIGN EXPOSURE. Entities located in foreign
countries can be affected by adverse political, regulatory, market or
economic developments in those countries.
(small solid bullet) PREPAYMENT. The ability of an issuer of a debt
security to repay principal prior to a security's maturity can cause
greater price volatility if interest rates change.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently from
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
PERFORMANCE
The following information illustrates the changes in the fund's
performance from year to year and compares the fund's performance to
the performance of a market index and an average of the performance of
similar funds over various periods of time. Returns are based on past
results and are not an indication of future performance.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
YEAR-BY-YEAR RETURNS
INTERMEDIATE BOND
Calendar Years 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
% % % % % % % % % %
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: nil
Row: 7, Col: 1, Value: nil
Row: 8, Col: 1, Value: nil
Row: 9, Col: 1, Value: nil
Row: 10, Col: 1, Value: nil
DURING THE PERIODS SHOWN IN THE CHART FOR INTERMEDIATE BOND, THE
HIGHEST RETURN FOR A QUARTER WAS __% (QUARTER ENDED___ ) AND THE
LOWEST RETURN FOR A QUARTER WAS ___% (QUARTER ENDED_____ ).
THE YEAR-TO-DATE RETURN AS OF MARCH 31, 2000 FOR INTERMEDIATE BOND WAS
__%.
AVERAGE ANNUAL RETURNS
For the periods ended Past 1 year Past 5 years Past 10 years
December 31, 1999
Intermediate Bond % % %
Lehman Brothers Inter- % % %
mediate Government/
Corporate Bond Index
Lipper Short-Intermediate % % %
Investment Grade Debt
Funds Average
[If FMR had not reimbursed certain fund expenses during these periods,
the fund's returns would have been lower.]
The Lehman Brothers Intermediate Government/Corporate Bond Index is a
market value-weighted index of government and investment-grade
corporate fixed-rate debt issues with maturities between one and 10
years.
The Lipper Funds Average reflects the performance (excluding
sales charges) of mutual funds with similar objectives.
FEE TABLE
The following table describes the fees and expenses that are incurred
when you buy, hold, or sell shares of the fund. [The annual fund
operating expenses provided below for the fund do not reflect the
effect of any reduction of certain expenses during the period.] [The
annual fund operating expenses provided below for the fund are based
on historical expenses.]
SHAREHOLDER FEES (PAID BY THE INVESTOR DIRECTLY)
Sales charge (load) on None
purchases and reinvested
distributions
Deferred sales charge (load) None
on redemptions
Annual account maintenance $12.00
fee (for accounts under
$2,500)
ANNUAL FUND OPERATING EXPENSES (PAID FROM FUND ASSETS)
Management fee %
Distribution and Service None
(12b-1) fee
Other expenses %
Total annual fund operating %
expenses
[ A portion of the brokerage commissions that the fund pays is used
to reduce the fund's expenses. [In addition] [T/t]hrough arrangements
with the fund's [custodian] [and] [transfer agent], credits
realized as a result of uninvested cash balances are used to reduce
[custodian] [and] [transfer agent] expenses.] [Including [this/these]
reduction[s], the total fund operating expenses, [after
reimbursement,] would have been ___%.]
This EXAMPLE helps you compare the cost of investing in the fund with
the cost of investing in other mutual funds.
Let's say, hypothetically, that the fund's annual return is 5% and
that your shareholder fees and the fund's annual operating expenses
are exactly as described in the fee table. This example illustrates
the effect of fees and expenses, but is not meant to suggest actual or
expected fees and expenses or returns, all of which may vary. For
every $10,000 you invested, here's how much you would pay in total
expenses if you close your account at the end of each time period
indicated:
1 year $
3 years $
5 years $
10 years $
FUND BASICS
INVESTMENT DETAILS
INVESTMENT OBJECTIVE
INTERMEDIATE BOND FUND seeks a high level of current income.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests the fund's assets in U.S. dollar-denominated
investment-grade bonds (those of medium and high quality).
FMR uses the Lehman Brothers Intermediate Government/Corporate Bond
Index as a guide in structuring the fund and selecting its
investments. FMR manages the fund to have similar overall interest
rate risk to the index. In addition, the fund normally maintains a
dollar-weighted average maturity between three and 10 years. As of
April 30, 2000, the dollar-weighted average maturity of the fund and
the index was approximately ___ and ___ years, respectively. In
determining a security's maturity for purposes of calculating the
fund's average maturity, an estimate of the average time for its
principal to be paid may be used. This can be substantially shorter
than its stated maturity.
FMR allocates the fund's assets among different market sectors (for
example, corporate or government securities) and different maturities
based on its view of the relative value of each sector or maturity.
In buying and selling securities for the fund, FMR analyzes a
security's structural features and current price compared to its
estimated long-term value, any short-term trading opportunities
resulting from market inefficiencies, and the credit quality of its
issuer.
To earn additional income for the fund, FMR may use a trading
strategy that involves selling mortgage securities and simultaneously
agreeing to purchase similar securities on a later date at a set
price. This trading strategy may result in an increased portfolio
turnover rate which increases transaction costs and may increase
taxable gains.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices, interest rates, or other factors that affect security
values. If FMR's strategies do not work as intended, the fund may not
achieve its objective.
DESCRIPTION OF PRINCIPAL SECURITY TYPES
DEBT SECURITIES are used by issuers to borrow money. The issuer
usually pays a fixed, variable, or floating rate of interest, and must
repay the amount borrowed at the maturity of the security. Some debt
securities, such as zero coupon bonds, do not pay current interest but
are sold at a discount from their face values. Debt securities include
corporate bonds, government securities, and mortgage and other
asset-backed securities.
PRINCIPAL INVESTMENT RISKS
Many factors affect the fund's performance. The fund's yield and share
price change daily based on changes in interest rates and market
conditions and in response to other economic, political, or financial
developments. The fund's reaction to these developments will be
affected by the types and maturities of securities in which the fund
invests, the financial condition, industry and economic sector, and
geographic location of an issuer, and the fund's level of investment
in the securities of that issuer. When you sell your shares of the
fund, they could be worth more or less than what you paid for them.
The following factors can significantly affect the fund's performance:
INTEREST RATE CHANGES. Debt securities have varying levels of
sensitivity to changes in interest rates. In general, the price of a
debt security can fall when interest rates rise and can rise when
interest rates fall. Securities with longer maturities and mortgage
securities can be more sensitive to interest rate changes. In other
words, the longer the maturity of a security, the greater the impact a
change in interest rates could have on the security's price. In
addition, short-term and long-term interest rates do not necessarily
move in the same amount or the same direction. Short-term securities
tend to react to changes in short-term interest rates, and long-term
securities tend to react to changes in long-term interest rates.
FOREIGN EXPOSURE. Foreign securities and securities issued by U.S.
entities with substantial foreign operations can involve additional
risks relating to political, economic, or regulatory conditions in
foreign countries. All of these factors can make foreign investments
more volatile than U.S. investments.
PREPAYMENT. Many types of debt securities, including mortgage
securities, are subject to prepayment risk. Prepayment occurs when the
issuer of a security can repay principal prior to the security's
maturity. Securities subject to prepayment can offer less potential
for gains during a declining interest rate environment and similar or
greater potential for loss in a rising interest rate environment. In
addition, the potential impact of prepayment features on the price of
a debt security can be difficult to predict and result in greater
volatility.
ISSUER-SPECIFIC CHANGES. Changes in the financial condition of an
issuer, changes in specific economic or political conditions that
affect a particular type of security or issuer, and changes in general
economic or political conditions can affect the credit quality or
value of an issuer's securities. Lower-quality debt securities (those
of less than investment-grade quality) tend to be more sensitive to
these changes than higher-quality debt securities.
In response to market, economic, political, or other conditions, FMR
may temporarily use a different investment strategy for defensive
purposes. If FMR does so, different factors could affect the fund's
performance and the fund may not achieve its investment objective.
FUNDAMENTAL INVESTMENT POLICIES
The policy discussed below is fundamental, that is, subject to change
only by shareholder approval.
INTERMEDIATE BOND FUND seeks a high level of current
income.
VALUING SHARES
The fund is open for business each day the New York Stock Exchange
(NYSE) is open.
The fund's net asset value per share (NAV) is the value of a single
share. Fidelity normally calculates the fund's NAV as of the close of
business of the NYSE, normally 4:00 p.m. Eastern time. However, NAV
may be calculated earlier if trading on the NYSE is restricted or as
permitted by the Securities and Exchange Commission (SEC). The fund's
assets are valued as of this time for the purpose of computing the
fund's NAV.
To the extent that the fund's assets are traded in other markets on
days when the NYSE is closed, the value of the fund's assets may be
affected on days when the fund is not open for business. In addition,
trading in some of the fund's assets may not occur on days when the
fund is open for business.
The fund's assets are valued primarily on the basis of information
furnished by a pricing service or market quotations. Certain
short-term securities are valued on the basis of amortized cost. If
market quotations or information furnished by a pricing service is not
readily available for a security or if a security's value has been
materially affected by events occurring after the close of the
exchange or market on which the security is principally traded (for
example, a foreign exchange or market), that security may be valued by
another method that the Board of Trustees believes accurately reflects
fair value. A security's valuation may differ depending on the method
used for determining value.
SHAREHOLDER INFORMATION
BUYING AND SELLING SHARES
GENERAL INFORMATION
Fidelity Investments(registered trademark) was established in 1946 to
manage one of America's first mutual funds. Today, Fidelity is the
largest mutual fund company in the country, and is known as an
innovative provider of high-quality financial services to individuals
and institutions.
In addition to its mutual fund business, the company operates one of
America's leading discount brokerage firms, Fidelity Brokerage
Services, Inc. (FBSI). Fidelity is also a leader in providing
tax-advantaged retirement plans for individuals investing on their own
or through their employer.
For account, product and service information, please use the following
web site and phone numbers:
(small solid bullet) For information over the Internet, visit
Fidelity's web site at www.fidelity.com.
(small solid bullet) For accessing account information automatically
by phone, use Fidelity Automated Service Telephone (FASTSM),
1-800-544-5555.
(small solid bullet) For exchanges, redemptions, and account
assistance, 1-800-544-6666.
(small solid bullet) For mutual fund and brokerage information,
1-800-544-6666.
(small solid bullet) For retirement information,
1-800-544-4774.
(small solid bullet) TDD - Service for the Deaf and Hearing-Impaired,
1-800-544-0118 (9:00 a.m. - 9:00 p.m. Eastern time).
Please use the following addresses:
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
OVERNIGHT EXPRESS
Fidelity Investments
2300 Litton Lane - KH1A
Hebron, KY 41048
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75039-5587
You may buy or sell shares of the fund through a retirement account or
an investment professional. If you invest through a retirement account
or an investment professional, the procedures for buying, selling, and
exchanging shares of the fund and the account features and policies
may differ. Additional fees may also apply to your investment in the
fund, including a transaction fee if you buy or sell shares of the
fund through a broker or other investment professional.
Certain methods of contacting Fidelity, such as by telephone or
electronically, may be unavailable or delayed (for example, during
periods of unusual market activity). In addition, the level and type
of service available may be restricted based on criteria established
by Fidelity.
The different ways to set up (register) your account with Fidelity are
listed in the following table.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
RETIREMENT
FOR TAX-ADVANTAGED RETIREMENT SAVINGS
(solid bullet) TRADITIONAL INDIVIDUAL RETIREMENT ACCOUNTS (IRAS)
(solid bullet) ROTH IRAS
(solid bullet) ROLLOVER IRAS
(solid bullet) 401(K) PLANS AND CERTAIN OTHER 401(A)-QUALIFIED PLANS
(solid bullet) KEOGH PLANS
(solid bullet) SIMPLE IRAS
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS)
(solid bullet) SALARY REDUCTION SEP-IRAS (SARSEPS)
(solid bullet) 403(B) CUSTODIAL ACCOUNTS
(solid bullet) DEFERRED COMPENSATION PLANS (457 PLANS)
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
TRUST
FOR MONEY BEING INVESTED BY A TRUST
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS OR
OTHER GROUPS
BUYING SHARES
The price to buy one share of the fund is the fund's NAV. The fund's
shares are sold without a sales charge.
Your shares will be bought at the next NAV calculated after your
investment is received in proper form.
Short-term or excessive trading into and out of the fund may harm
performance by disrupting portfolio management strategies and by
increasing expenses. Accordingly, the fund may reject any purchase
orders, including exchanges, particularly from market timers or
investors who, in FMR's opinion, have a pattern of short-term or
excessive trading or whose trading has been or may be disruptive to
the fund. For these purposes, FMR may consider an investor's trading
history in the fund or other Fidelity funds, and accounts under common
ownership or control.
The fund may stop offering shares completely or may offer shares only
on a limited basis, for a period of time or permanently.
When you place an order to buy shares, note the following:
(small solid bullet) All of your purchases must be made in U.S.
dollars and checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check,
each check must have a value of at least $50.
(small solid bullet) Fidelity reserves the right to limit the number
of checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will
be canceled and you could be liable for any losses or fees the fund or
Fidelity has incurred.
Certain financial institutions that have entered into sales agreements
with Fidelity Distributors Corporation (FDC) may enter confirmed
purchase orders on behalf of customers by phone, with payment to
follow no later than the time when the fund is priced on the following
business day. If payment is not received by that time, the order will
be canceled and the financial institution could be held liable for
resulting fees or losses.
MINIMUMS
TO OPEN AN ACCOUNT $2,500
For certain Fidelity retirement accountsA $500
TO ADD TO AN ACCOUNT $250
Through regular investment plans $100
MINIMUM BALANCE $2,000
For certain Fidelity retirement accountsA $500
A FIDELITY TRADITIONAL IRA, ROTH IRA, ROLLOVER IRA, SEP-IRA, AND KEOGH
ACCOUNTS.
There is no minimum account balance or initial or subsequent purchase
minimum for investments through Fidelity Portfolio Advisory
ServicesSM, a qualified state tuition program, certain Fidelity
retirement accounts funded through salary deduction, or accounts
opened with the proceeds of distributions from such retirement
accounts.
In addition, the fund may waive or lower purchase minimums in other
circumstances.
KEY INFORMATION
PHONE 1-800-544-6666 TO OPEN AN ACCOUNT
(small solid bullet) Exchange
from another Fidelity fund.
Call the phone number at left.
TO ADD TO AN ACCOUNT
(small solid bullet) Exchange
from another Fidelity fund.
Call the phone number at left.
(small solid bullet) Use
Fidelity Money
Line(registered trademark)
to transfer from your bank
account.
INTERNET WWW.FIDELITY.COM TO OPEN AN ACCOUNT
(small solid bullet) Complete
and sign the application.
Make your check payable to
the complete name of the
fund. Mail to the address
under "Mail" below.
TO ADD TO AN ACCOUNT
(small solid bullet) Exchange
from another Fidelity fund.
(small solid bullet) Use
Fidelity Money Line to
transfer from your bank
account.
MAIL FIDELITY INVESTMENTS TO OPEN AN ACCOUNT
P.O. BOX 770001 CINCINNATI, (small solid bullet) Complete
OH 45277-0002 and sign the application.
Make your check payable to
the complete name of the
fund. Mail to the address at
left.
TO ADD TO AN ACCOUNT
(small solid bullet) Make
your check payable to the
complete name of the fund.
Indicate your fund account
number on your check and
mail to the address at left.
(small solid bullet) Exchange
from another Fidelity fund.
Send a letter of instruction
to the address at left,
including your name, the
funds' names, the fund
account numbers, and the
dollar amount or number of
shares to be exchanged.
IN PERSON TO OPEN AN ACCOUNT
(small solid bullet) Bring
your application and check
to a Fidelity Investor
Center. Call 1-800-544-9797
for the center nearest you.
TO ADD TO AN ACCOUNT
(small solid bullet) Bring
your check to a Fidelity
Investor Center. Call
1-800-544-9797 for the
center nearest you.
WIRE TO OPEN AN ACCOUNT
(small solid bullet) Call
1-800-544-6666 to set up
your account and to arrange
a wire transaction.
(small solid bullet) Wire
within 24 hours to: Bankers
Trust Company, Bank Routing
# 021001033, Account #
00163053.
(small solid bullet) Specify
the complete name of the
fund and include your new
fund account number and your
name.
TO ADD TO AN ACCOUNT
(small solid bullet) Wire to:
Bankers Trust Company, Bank
Routing # 021001033, Account
# 00163053.
(small solid bullet) Specify
the complete name of the
fund and include your fund
account number and your name.
AUTOMATICALLY TO OPEN AN ACCOUNT
(small solid bullet) Not
available.
TO ADD TO AN ACCOUNT
(small solid bullet) Use
Fidelity Automatic Account
Builder(registered
trademark) or Direct Deposit.
(small solid bullet) Use
Fidelity Automatic Exchange
Service to exchange from a
Fidelity money market fund.
SELLING SHARES
The price to sell one share of the fund is the fund's NAV.
Your shares will be sold at the next NAV calculated after your order
is received in proper form.
Certain requests must include a signature guarantee. It is designed to
protect you and Fidelity from fraud. Your request must be made in
writing and include a signature guarantee if any of the following
situations apply:
(small solid bullet) You wish to sell more than $100,000 worth of
shares;
(small solid bullet) Your account registration has changed within
the last 15 or 30 days, depending on your account;
(small solid bullet) The check is being mailed to a different address
than the one on your account (record address);
(small solid bullet) The check is being made payable to someone other
than the account owner; or
(small solid bullet) The redemption proceeds are being transferred to
a Fidelity account with a different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including Fidelity Investor Centers), dealer, credit union (if
authorized under state law), securities exchange or association,
clearing agency, or savings association. A notary public cannot
provide a signature guarantee.
When you place an order to sell shares, note the following:
(small solid bullet) If you are selling some but not all of your
shares, leave at least $2,000 worth of shares in the account to keep
it open ($500 for retirement accounts), except accounts not subject to
account minimums.
(small solid bullet) Normally, Fidelity will process redemptions by
the next business day, but Fidelity may take up to seven days to
process redemptions if making immediate payment would adversely affect
the fund.
(small solid bullet) Redemption proceeds (other than exchanges) may be
delayed until money from prior purchases sufficient to cover your
redemption has been received and collected. This can take up to seven
business days after a purchase.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays),
when trading on the NYSE is restricted, or as permitted by the SEC.
(small solid bullet) Redemption proceeds may be paid in securities or
other property rather than in cash if FMR determines it is in
the best interests of the fund.
(small solid bullet) If you sell shares by writing a check and the
amount of the check is greater than the value of your account, your
check will be returned to you and you may be subject to additional
charges.
(small solid bullet) You will not receive interest on amounts
represented by uncashed redemption checks.
(small solid bullet) Unless otherwise instructed, Fidelity will send a
check to the record address.
KEY INFORMATION
PHONE 1-800-544-6666 (small solid bullet) Call the
phone number at left to
initiate a wire transaction
or to request a check for
your redemption.
(small solid bullet) Use
Fidelity Money Line to
transfer to your bank account.
(small solid bullet) Exchange
to another Fidelity fund.
Call the phone number at left.
INTERNET WWW.FIDELITY.COM (small solid bullet) Exchange
to another Fidelity fund.
(small solid bullet) Use
Fidelity Money Line to
transfer to your bank account.
MAIL FIDELITY INVESTMENTS INDIVIDUAL, JOINT TENANT,
P.O. BOX 660602 DALLAS, TX SOLE PROPRIETORSHIP, UGMA,
75266-0602 UTMA
(small solid bullet) Send a
letter of instruction to the
address at left, including
your name, the fund's name,
your fund account number,
and the dollar amount or
number of shares to be sold.
The letter of instruction
must be signed by all
persons required to sign for
transactions, exactly as
their names appear on the
account.
RETIREMENT ACCOUNT
(small solid bullet) The
account owner should
complete a retirement
distribution form. Call
1-800-544-6666 to request one.
TRUST
(small solid bullet) Send a
letter of instruction to the
address at left, including
the trust's name, the fund's
name, the trust's fund
account number, and the
dollar amount or number of
shares to be sold. The
trustee must sign the letter
of instruction indicating
capacity as trustee. If the
trustee's name is not in the
account registration,
provide a copy of the trust
document certified within
the last 60 days.
BUSINESS OR ORGANIZATION
(small solid bullet) Send a
letter of instruction to the
address at left, including
the firm's name, the fund's
name, the firm's fund
account number, and the
dollar amount or number of
shares to be sold. At least
one person authorized by
corporate resolution to act
on the account must sign the
letter of instruction.
(small solid bullet) Include
a corporate resolution with
corporate seal or a
signature guarantee.
EXECUTOR, ADMINISTRATOR,
CONSERVATOR, GUARDIAN
(small solid bullet) Call
1-800-544-6666 for
instructions.
IN PERSON INDIVIDUAL, JOINT TENANT,
SOLE PROPRIETORSHIP, UGMA,
UTMA
(small solid bullet) Bring a
letter of instruction to a
Fidelity Investor Center.
Call 1-800-544-9797 for the
center nearest you. The
letter of instruction must
be signed by all persons
required to sign for
transactions, exactly as
their names appear on the
account.
RETIREMENT ACCOUNT
(small solid bullet) The
account owner should
complete a retirement
distribution form. Visit a
Fidelity Investor Center to
request one. Call
1-800-544-9797 for the
center nearest you.
TRUST
(small solid bullet) Bring a
letter of instruction to a
Fidelity Investor Center.
Call 1-800-544-9797 for the
center nearest you. The
trustee must sign the letter
of instruction indicating
capacity as trustee. If the
trustee's name is not in the
account registration,
provide a copy of the trust
document certified within
the last 60 days.
BUSINESS OR ORGANIZATION
(small solid bullet) Bring a
letter of instruction to a
Fidelity Investor Center.
Call 1-800-544-9797 for the
center nearest you. At least
one person authorized by
corporate resolution to act
on the account must sign the
letter of instruction.
(small solid bullet) Include
a corporate resolution with
corporate seal or a
signature guarantee.
EXECUTOR, ADMINISTRATOR,
CONSERVATOR, GUARDIAN
(small solid bullet) Visit a
Fidelity Investor Center for
instructions. Call
1-800-544-9797 for the
center nearest you.
AUTOMATICALLY (small solid bullet) Use
Personal Withdrawal Service
to set up periodic
redemptions from your account.
CHECK (small solid bullet) Write a
check to sell shares from
your account.
EXCHANGING SHARES
An exchange involves the redemption of all or a portion of the shares
of one fund and the purchase of shares of another fund.
As a shareholder, you have the privilege of exchanging shares of the
fund for shares of other Fidelity funds.
However, you should note the following policies and restrictions
governing exchanges:
(small solid bullet) The fund you are exchanging into must be
available for sale in your state.
(small solid bullet) You may exchange only between accounts that are
registered in the same name, address, and taxpayer identification
number.
(small solid bullet) Before exchanging into a fund, read its
prospectus.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) The fund may temporarily or permanently terminate
the exchange privilege of any investor who makes more than four
exchanges out of the fund per calendar year. Accounts under common
ownership or control will be counted together for purposes of the four
exchange limit.
(small solid bullet) The exchange limit may be modified for accounts
held by certain institutional retirement plans to conform to plan
exchange limits and Department of Labor regulations. See your plan
materials for further information.
(small solid bullet) The fund may refuse exchange purchases by any
person or group if, in FMR's judgment, the fund would be unable to
invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
The fund may terminate or modify the exchange privilege in the future.
Other funds may have different exchange restrictions, and may impose
trading fees of up to 3.00% of the amount exchanged. Check each fund's
prospectus for details.
ACCOUNT FEATURES AND POLICIES
FEATURES
The following features are available to buy and sell shares of the
fund.
AUTOMATIC INVESTMENT AND WITHDRAWAL PROGRAMS. Fidelity offers
convenient services that let you automatically transfer money into
your account, between accounts, or out of your account. While
automatic investment programs do not guarantee a profit and will not
protect you against loss in a declining market, they can be an
excellent way to invest for retirement, a home, educational expenses,
and other long-term financial goals. Automatic withdrawal or exchange
programs can be a convenient way to provide a consistent income flow
or to move money between your investments.
<TABLE>
<CAPTION>
<S> <C> <C>
FIDELITY AUTOMATIC ACCOUNT
BUILDER TO MOVE MONEY FROM
YOUR BANK ACCOUNT TO A
FIDELITY FUND.
MINIMUM FREQUENCY PROCEDURES
$100 Monthly or quarterly (small solid bullet) To set
up for a new account,
complete the appropriate
section on the fund
application.
(small solid bullet) To set
up for existing accounts,
call 1-800-544-6666 or visit
Fidelity's web site for an
application.
(small solid bullet) To make
changes, call 1-800-544-6666
at least three business days
prior to your next scheduled
investment date.
DIRECT DEPOSIT TO SEND ALL OR
A PORTION OF YOUR PAYCHECK
OR GOVERNMENT CHECK TO A
FIDELITY FUND.A
MINIMUM FREQUENCY PROCEDURES
$100 Every pay period (small solid bullet) To set
up for a new account, check
the appropriate box on the
fund application.
(small solid bullet) To set
up for an existing account,
call 1-800-544-6666 or visit
Fidelity's web site for an
authorization form.
(small solid bullet) To make
changes you will need a new
authorization form. Call
1-800-544-6666 or visit
Fidelity's web site to
obtain one.
A BECAUSE ITS SHARE PRICE
FLUCTUATES, THE FUND MAY NOT
BE AN APPROPRIATE CHOICE FOR
DIRECT DEPOSIT OF YOUR
ENTIRE CHECK.
FIDELITY AUTOMATIC EXCHANGE
SERVICE TO MOVE MONEY FROM A
FIDELITY MONEY MARKET FUND
TO ANOTHER FIDELITY FUND.
MINIMUM FREQUENCY PROCEDURES
$100 Monthly, bimonthly, (small solid bullet) To set
quarterly, or annually up, call 1-800-544-6666
after both accounts are
opened.
(small solid bullet) To make
changes, call 1-800-544-6666
at least three business days
prior to your next scheduled
exchange date.
</TABLE>
PERSONAL WITHDRAWAL SERVICE
TO SET UP PERIODIC
REDEMPTIONS FROM YOUR
ACCOUNT TO YOU OR TO YOUR
BANK ACCOUNT.
FREQUENCY PROCEDURES
Monthly (small solid bullet) To set
up, call 1-800-544-6666.
(small solid bullet) To make
changes, call Fidelity at
1-800-544-6666 at least
three business days prior to
your next scheduled
withdrawal date.
OTHER FEATURES. The following other features are also available to
buy and sell shares of the fund.
WIRE
TO PURCHASE AND SELL SHARES VIA THE FEDERAL RESERVE WIRE SYSTEM.
(small solid bullet) You must sign up for the wire feature
before using it. Complete the appropriate section on the application
when opening your account, or call 1-800-544-6666 to add the feature
after your account is opened. Call 1-800-544-6666 before your first
use to verify that this feature is set up on your account.
(small solid bullet) To sell shares by wire, you must designate the
U.S. commercial bank account(s) into which you wish the redemption
proceeds deposited.
FIDELITY MONEY LINE
TO TRANSFER MONEY BETWEEN YOUR BANK ACCOUNT AND YOUR FUND ACCOUNT.
(small solid bullet) You must sign up for the Money Line feature
before using it. Complete the appropriate section on the application
and then call 1-800-544-6666 or visit Fidelity's web site before your
first use to verify that this feature is set up on your account.
(small solid bullet) Most transfers are complete within three business
days of your call.
(small solid bullet) Minimum purchase: $100
(small solid bullet) Maximum purchase: $100,000
FIDELITY ON-LINE XPRESS+(registered trademark)
TO MANAGE YOUR INVESTMENTS THROUGH YOUR PC.
CALL 1-800-544-0240 OR VISIT FIDELITY'S WEB SITE FOR MORE
INFORMATION.
(small solid bullet) For account balances and holdings;
(small solid bullet) To review recent account history;
(small solid bullet) For mutual fund and brokerage trading; and
(small solid bullet) For access to research and analysis tools.
FIDELITY ONLINE TRADING
TO ACCESS AND MANAGE YOUR ACCOUNT OVER THE INTERNET AT FIDELITY'S
WEB SITE.
(small solid bullet) For account balances and holdings;
(small solid bullet) To review recent account history;
(small solid bullet) To obtain quotes;
(small solid bullet) For mutual fund and brokerage trading; and
(small solid bullet) To access third-party research on companies,
stocks, mutual funds and the market.
FAST
TO ACCESS AND MANAGE YOUR ACCOUNT AUTOMATICALLY BY PHONE USING TOUCH
TONE OR SPEECH RECOGNITION.
CALL 1-800-544-5555.
(small solid bullet) For account balances and holdings;
(small solid bullet) For mutual fund and brokerage trading;
(small solid bullet) To obtain quotes;
(small solid bullet) To review orders and mutual fund activity; and
(small solid bullet) To change your personal identification number
(PIN).
CHECKWRITING
TO REDEEM SHARES FROM YOUR ACCOUNT.
(small solid bullet) To set up, complete the appropriate section on
the application.
(small solid bullet) All account owners must sign a signature card to
receive a checkbook.
(small solid bullet) You may write an unlimited number of checks.
(small solid bullet) Minimum check amount: $500
(small solid bullet) Do not try to close out your account by check.
(small solid bullet) To obtain more checks, call Fidelity at
1-800-544-6666.
POLICIES
The following policies apply to you as a shareholder.
STATEMENTS AND REPORTS that Fidelity sends to you include the
following:
(small solid bullet) Confirmation statements (after transactions
affecting your account balance except reinvestment of distributions in
the fund or another fund and certain transactions through automatic
investment or withdrawal programs).
(small solid bullet) Monthly or quarterly account statements
(detailing account balances and all transactions completed during the
prior month or quarter).
(small solid bullet) Financial reports (every six months).
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed to your household, even if you have more
than one account in the fund. Call Fidelity at 1-800-544-8544 if you
need additional copies of financial reports or prospectuses.
Electronic copies of most financial reports and prospectuses are
available at Fidelity's web site. To participate in Fidelity's
electronic delivery program, call Fidelity or visit Fidelity's web
site for more information.
You may initiate many TRANSACTIONS BY TELEPHONE OR ELECTRONICALLY.
Fidelity will not be responsible for any losses resulting from
unauthorized transactions if it follows reasonable security procedures
designed to verify the identity of the investor. Fidelity will request
personalized security codes or other information, and may also record
calls. For transactions conducted through the Internet, Fidelity
recommends the use of an Internet browser with 128-bit encryption. You
should verify the accuracy of your confirmation statements immediately
after you receive them. If you do not want the ability to sell and
exchange by telephone, call Fidelity for instructions.
When you sign your ACCOUNT APPLICATION, you will be asked to certify
that your social security or taxpayer identification number is correct
and that you are not subject to 31% backup withholding for failing to
report income to the IRS. If you violate IRS regulations, the IRS can
require the fund to withhold 31% of your taxable distributions and
redemptions.
Fidelity may deduct an ANNUAL MAINTENANCE FEE of $12.00 from accounts
with a value of less than $2,500, subject to an annual maximum charge
of $24.00 per shareholder. It is expected that accounts will be valued
on the second Friday in November of each year. Accounts opened after
September 30 will not be subject to the fee for that year. The fee,
which is payable to Fidelity, is designed to offset in part the
relatively higher costs of servicing smaller accounts. This fee will
not be deducted from Fidelity brokerage accounts, retirement accounts
(except non-prototype retirement accounts), accounts using regular
investment plans, or if total assets with Fidelity exceed $30,000.
Eligibility for the $30,000 waiver is determined by aggregating
accounts with Fidelity maintained by Fidelity Service Company, Inc. or
FBSI which are registered under the same social security number or
which list the same social security number for the custodian of a
Uniform Gifts/Transfers to Minors Act account.
If your ACCOUNT BALANCE falls below $2,000 (except accounts not
subject to account minimums), you will be given 30 days' notice to
reestablish the minimum balance. If you do not increase your balance,
Fidelity may close your account and send the proceeds to you. Your
shares will be sold at the NAV on the day your account is closed.
Fidelity may charge a FEE FOR CERTAIN SERVICES, such as providing
historical account documents.
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
The fund earns interest, dividends, and other income from its
investments, and distributes this income (less expenses) to
shareholders as dividends. The fund also realizes capital gains from
its investments, and distributes these gains (less any losses) to
shareholders as capital gain distributions.
The fund normally declares dividends daily and pays them monthly. The
fund normally pays capital gain distributions in June and December.
EARNING DIVIDENDS
Shares begin to earn dividends on the first business day following the
day of purchase.
Shares earn dividends until, but not including, the next business day
following the day of redemption.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. The following options may be available for
the fund's distributions:
1. REINVESTMENT OPTION. Your dividends and capital gain distributions
will be automatically reinvested in additional shares of the fund. If
you do not indicate a choice on your application, you will be assigned
this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested in additional shares of the fund. Your
dividends will be paid in cash.
3. CASH OPTION. Your dividends and capital gain distributions will be
paid in cash.
4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividends
will be automatically invested in shares of another identically
registered Fidelity fund. Your capital gain distributions will be
automatically invested in shares of another identically registered
Fidelity fund, automatically reinvested in additional shares of the
fund, or paid in cash.
Not all distribution options are available for every account. If the
option you prefer is not listed on your account application, or if you
want to change your current option, call Fidelity.
If you elect to receive distributions paid in cash by check and the
U.S. Postal Service does not deliver your checks, your distribution
option may be converted to the Reinvestment Option. You will not
receive interest on amounts represented by uncashed distribution
checks.
TAX CONSEQUENCES
As with any investment, your investment in the fund could have tax
consequences for you. If you are not investing through a
tax-advantaged retirement account, you should consider these tax
consequences.
TAXES ON DISTRIBUTIONS.
Distributions you receive from the fund are subject to federal income
tax, and may also be subject to state or local taxes.
For federal tax purposes, the fund's dividends and distributions of
short-term capital gains are taxable to you as ordinary income, while
the fund's distributions of long-term capital gains are taxable to you
generally as capital gains.
If a fund's distributions exceed its income and capital gains realized
in any year, all or a portion of those distributions may be treated as
a return of capital to shareholders for tax purposes. A return of
capital generally will not be taxable to you but will reduce the cost
basis of your shares and result in a higher reported capital gain or a
lower reported capital loss when you sell your shares.
If you buy shares when a fund has realized but not yet distributed
income or capital gains, you will be "buying a dividend" by paying the
full price for the shares and then receiving a portion of the price
back in the form of a taxable distribution.
Any taxable distributions you receive from the fund will normally be
taxable to you when you receive them, regardless of your distribution
option. If you elect to receive distributions in cash or to invest
distributions automatically in shares of another Fidelity fund, you
will receive certain December distributions in January, but those
distributions will be taxable as if you received them on December 31.
TAXES ON TRANSACTIONS. Your redemptions, including exchanges, may
result in a capital gain or loss for federal tax purposes. A capital
gain or loss on your investment in the fund generally is the
difference between the cost of your shares and the price you receive
when you sell them.
FUND SERVICES
FUND MANAGEMENT
Intermediate Bond is a mutual fund, an investment that pools
shareholders' money and invests it toward a specified goal.
FMR is the fund's manager.
As of ______, FMR had approximately $____billion in discretionary
assets under management.
As the manager, FMR is responsible for choosing the fund's investments
and handling its business affairs.
Affiliates assist FMR with foreign investments:
(small solid bullet) Fidelity Management & Research (U.K.) Inc. (FMR
U.K.), in London, England, serves as a sub-adviser for the fund. FMR
U.K. was organized in 1986 to provide investment research and advice
to FMR. FMR U.K. may provide investment research and advice on
issuers based outside the United States and may also provide
investment advisory services for the fund.
(small solid bullet) Fidelity Management & Research (Far East) Inc.
(FMR Far East) serves as a sub-adviser for the fund. FMR Far East was
organized in 1986 to provide investment research and advice to FMR.
FMR Far East may provide in vestment research and advice on issuers
based outside the United States and may also provide investment
advisory services for the fund.
(small solid bullet) Fidelity Investments Japan Limited (FIJ), in
Tokyo, Japan, serves as a sub-adviser for the fund. As of ______, FIJ
had approximately $____ billion in discretionary assets under
management. FIJ may provide investment research and advice on issuers
based outside the United States.
Fidelity Investments Money Management, Inc. (FIMM), in Merrimack, New
Hampshire, serves as sub-adviser for the fund. FIMM is primarily
responsible for choosing investments for the fund.
FIMM is an affiliate of FMR. As of ______, FIMM had approximately
$____ billion in discretionary assets under management.
Ford O'Neil is vice president and manager of Intermediate Bond, which
he has managed since July 1998. He also manages other Fidelity funds.
Since joining Fidelity in 1990, Mr. O'Neil has worked as an analyst
and manager.
From time to time a manager, analyst, or other Fidelity employee may
express views regarding a particular company, security, industry, or
market sector. The views expressed by any such person are the views of
only that individual as of the time expressed and do not necessarily
represent the views of Fidelity or any other person in the Fidelity
organization. Any such views are subject to change at any time based
upon market or other conditions and Fidelity disclaims any
responsibility to update such views. These views may not be relied on
as investment advice and, because investment decisions for a Fidelity
fund are based on numerous factors, may not be relied on as an
indication of trading intent on behalf of any Fidelity fund.
The fund pays a management fee to FMR. The management fee is
calculated and paid to FMR every month. The fee is calculated by
adding a group fee rate to an individual fund fee rate, dividing by
twelve, and multiplying the result by the fund's average net assets
throughout the month.
The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0.37%, and it
drops as total assets under management increase.
For April 2000, the group fee rate was ____%. The individual fund fee
rate is 0.30%.
The total management fee for the fiscal year ended April 30, 2000, was
____% of the fund's average net assets.
FMR pays FIMM, FMR U.K., and FMR Far East for providing sub-advisory
services. FMR Far East pays FIJ for providing sub-advisory
services.
FMR may, from time to time, agree to reimburse the fund for management
fees and other expenses above a specified limit. FMR retains the
ability to be repaid by the fund if expenses fall below the specified
limit prior to the end of the fiscal year. Reimbursement arrangements,
which may be discontinued by FMR at any time, can decrease the
fund's expenses and boost its performance.
[As of ______, approximately ____% of the fund's total outstanding
shares were held by [FMR/FMR and [an] FMR affiliate[s]/[an] FMR
affiliate[s]].]
FUND DISTRIBUTION
FDC distributes the fund's shares.
The fund has adopted a Distribution and Service Plan pursuant to Rule
12b-1 under the Investment Company Act of 1940 that recognizes that
FMR may use its management fee revenues, as well as its past profits
or its resources from any other source, to pay FDC for expenses
incurred in connection with providing services intended to result in
the sale of fund shares and/or shareholder support services. FMR,
directly or through FDC, may pay intermediaries, such as banks,
broker-dealers and other service-providers, that provide those
services. Currently, the Board of Trustees has authorized such
payments.
To receive payments made pursuant to a Distribution and Service Plan,
intermediaries must sign the appropriate agreement with FDC in
advance.
FMR may allocate brokerage transactions in a manner that takes into
account the sale of shares of the fund, provided that the fund
receives brokerage services and commission rates comparable to those
of other broker-dealers.
No dealer, sales representative, or any other person has been
authorized to give any information or to make any representations,
other than those contained in this prospectus and in the related
statement of additional information (SAI), in connection with the
offer contained in this prospectus. If given or made, such other
information or representations must not be relied upon as having been
authorized by the fund or FDC. This prospectus and the related SAI do
not constitute an offer by the fund or by FDC to sell shares of the
fund to or to buy shares of the fund from any person to whom it is
unlawful to make such offer.
APPENDIX
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
fund's financial history for the past 5 years. Certain information
reflects financial results for a single fund share. The total
returns in the table represent the rate that an investor would have
earned (or lost) on an investment in the fund (assuming reinvestment
of all dividends and distributions) .This information has been
audited by _______, independent accountants, whose report, along with
the fund's financial highlights and financial statements, are included
in the fund's annual report. A free copy of the annual report is
available upon request.
[Financial Highlights to be filed by subsequent amendment.]
You can obtain additional information about the fund. The fund's SAI
includes more detailed information about the fund and its investments.
The SAI is incorporated herein by reference (legally forms a part of
the prospectus). The fund's annual and semi-annual reports include a
discussion of the fund's holdings and recent market conditions and the
fund's investment strategies that affected performance.
For a free copy of any of these documents or to request other
information or ask questions about the fund, call Fidelity at
1-800-544-8544. In addition, you may visit Fidelity's web site at
www.fidelity.com for a free copy of a prospectus or an annual or
semi-annual report or to request other information.
The SAI, the fund's annual and semi-annual reports and other related
materials are available from the Electronic Data Gathering,
Analysis, and Retrieval (EDGAR) Database on the SEC's web site
(http://www.sec.gov) . You can obtain copies of this information,
after paying a duplicating fee, by sending a request by email to
[email protected] or by writing the Public Reference Section of the
SEC, Washington, D.C. 20549-0102. You can also review and copy
information about the fund, including the fund's SAI, at the SEC's
Public Reference Room in Washington, D.C. Call 1-202-942-8090
for information on the operation of the SEC's Public Reference Room.
INVESTMENT COMPANY ACT OF 1940, FILE NUMBER 811-2546
Fidelity, Fidelity Investments & (Pyramid) Design, Fidelity
Investments, TouchTone Xpress, Fidelity Money Line, Fidelity Automatic
Account Builder, Fidelity On-Line Xpress+ and Directed Dividends are
registered trademarks of FMR Corp.
FAST and Portfolio Advisory Services are service marks of FMR Corp.
The third-party marks appearing above are the marks of their
respective owners.
1.704234.102 IBF-pro-0600
FIDELITY INTERMEDIATE BOND FUND
A FUND OF FIDELITY COMMONWEALTH TRUST
STATEMENT OF ADDITIONAL INFORMATION
JUNE 24, 2000
This statement of additional information (SAI) is not a prospectus.
Portions of the funds annual report are incorporated herein. The
annual report is supplied with this SAI.
To obtain a free additional copy of the prospectus, dated June 24,
2000, or an annual report, please call Fidelity(registered trademark)
at 1-800-544-8544 or visit Fidelity's web site at
www.fidelity.com.
TABLE OF CONTENTS PAGE
Investment Policies and 2
Limitations
Portfolio Transactions 9
Valuation 11
Performance 12
Additional Purchase, Exchange 15
and Redemption Information
Distributions and Taxes 15
Trustees and Officers 15
Control of Investment Advisers 19
Management Contract 19
Distribution Services 22
Transfer and Service Agent 23
Agreements
Description of the Trust 23
Financial Statements 24
Appendix 24
IBF-ptb-0600
1.475964.102
(fidelity_logo_graphic)(registered trademark)
82 Devonshire Street, Boston, MA 02109
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in
the prospectus. Unless otherwise noted, whenever an investment policy
or limitation states a maximum percentage of the fund's assets that
may be invested in any security or other asset, or sets forth a policy
regarding quality standards, such standard or percentage limitation
will be determined immediately after and as a result of the fund's
acquisition of such security or other asset. Accordingly, any
subsequent change in values, net assets, or other circumstances will
not be considered when determining whether the investment complies
with the fund's investment policies and limitations.
The fund's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940 (the
1940 Act)) of the fund. However, except for the fundamental investment
limitations listed below, the investment policies and limitations
described in this SAI are not fundamental and may be changed without
shareholder approval.
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) 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 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.
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) 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.
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities);
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements; or
(9) invest in companies for the purpose of exercising control or
management.
(10) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the
same fundamental investment objective, policies, and limitations as
the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)).
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 15% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets were invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 5.
The fund intends to comply with the requirements of Section
12(d)(1)(G)(i)(IV) of the 1940 Act.
The following pages contain more detailed information about types of
instruments in which the fund may invest, strategies FMR may employ in
pursuit of the fund's investment objective, and a summary of related
risks. FMR may not buy all of these instruments or use all of these
techniques unless it believes that doing so will help the fund achieve
its goal.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be,
"affiliated persons" of the fund under the 1940 Act. These
transactions may involve repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50
largest U.S. banks (measured by deposits); municipal securities; U.S.
Government securities with affiliated financial institutions that are
primary dealers in these securities; short-term currency transactions;
and short-term borrowings. In accordance with exemptive orders issued
by the Securities and Exchange Commission (SEC), the Board of Trustees
has established and periodically reviews procedures applicable to
transactions involving affiliated financial institutions.
ASSET-BACKED SECURITIES represent interests in pools of mortgages,
loans, receivables or other assets. Payment of interest and repayment
of principal may be largely dependent upon the cash flows generated by
the assets backing the securities and, in certain cases, supported by
letters of credit, surety bonds, or other credit enhancements.
Asset-backed security values may also be affected by other factors
including changes in interest rates, the availability of information
concerning the pool and its structure, the creditworthiness of the
servicing agent for the pool, the originator of the loans or
receivables, or the entities providing the credit enhancement. In
addition, these securities may be subject to prepayment risk.
BORROWING. The fund may borrow from banks or from other funds advised
by FMR or its affiliates, or through reverse repurchase agreements. If
the fund borrows money, its share price may be subject to greater
fluctuation until the borrowing is paid off. If the fund makes
additional investments while borrowings are outstanding, this may be
considered a form of leverage.
CASH MANAGEMENT. A fund can hold uninvested cash or can invest it in
cash equivalents such as money market securities, repurchase
agreements or shares of money market funds. Generally, these
securities offer less potential for gains than other types of
securities.
CENTRAL CASH FUNDS are money market funds managed by FMR or its
affiliates that seek to earn a high level of current income (free from
federal income tax in the case of a municipal money market fund) while
maintaining a stable $1.00 share price. The funds comply with
industry-standard requirements for money market funds regarding the
quality, maturity, and diversification of their investments.
DOLLAR-WEIGHTED AVERAGE MATURITY is derived by multiplying the value
of each investment by the time remaining to its maturity, adding these
calculations, and then dividing the total by the value of the fund's
portfolio. An obligation's maturity is typically determined on a
stated final maturity basis, although there are some exceptions to
this rule.
For example, if it is probable that the issuer of an instrument will
take advantage of a maturity-shortening device, such as a call,
refunding, or redemption provision, the date on which the instrument
will probably be called, refunded, or redeemed may be considered to be
its maturity date. Also, the maturities of mortgage securities,
including collateralized mortgage obligations, and some asset-backed
securities are determined on a weighted average life basis, which is
the average time for principal to be repaid. For a mortgage security,
this average time is calculated by estimating the timing of principal
payments, including unscheduled prepayments, during the life of the
mortgage. The weighted average life of these securities is likely to
be substantially shorter than their stated final maturity.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies,
and securities issued by U.S. entities with substantial foreign
operations may involve significant risks in addition to the risks
inherent in U.S. investments.
Foreign investments involve risks relating to local political,
economic, regulatory, or social instability, military action or
unrest, or adverse diplomatic developments, and may be affected by
actions of foreign governments adverse to the interests of U.S.
investors. Such actions may include expropriation or nationalization
of assets, confiscatory taxation, restrictions on U.S. investment or
on the ability to repatriate assets or convert currency into U.S.
dollars, or other government intervention. Additionally, governmental
issuers of foreign debt securities may be unwilling to pay interest
and repay principal when due and may require that the conditions for
payment be renegotiated. There is no assurance that FMR will be able
to anticipate these potential events or counter their effects. In
addition, the value of securities denominated in foreign currencies
and of dividends and interest paid with respect to such securities
will fluctuate based on the relative strength of the U.S. dollar.
The risks of foreign investing may be magnified for investments in
emerging markets, which may have relatively unstable governments,
economies based on only a few industries, and securities markets that
trade a small number of securities.
FOREIGN CURRENCY TRANSACTIONS. A fund may conduct foreign currency
transactions on a spot (i.e., cash) or forward basis (i.e., by
entering into forward contracts to purchase or sell foreign
currencies). Although foreign exchange dealers generally do not charge
a fee for such conversions, they do realize a profit based on the
difference between the prices at which they are buying and selling
various currencies. Thus, a dealer may offer to sell a foreign
currency at one rate, while offering a lesser rate of exchange should
the counterparty desire to resell that currency to the dealer. Forward
contracts are customized transactions that require a specific amount
of a currency to be delivered at a specific exchange rate on a
specific date or range of dates in the future. Forward contracts are
generally traded in an interbank market directly between currency
traders (usually large commercial banks) and their customers. The
parties to a forward contract may agree to offset or terminate the
contract before its maturity, or may hold the contract to maturity and
complete the contemplated currency exchange.
Successful use of currency management strategies will depend on FMR's
skill in analyzing currency values. Currency management strategies may
substantially change a fund's investment exposure to changes in
currency exchange rates and could result in losses to a fund if
currencies do not perform as FMR anticipates. For example, if a
currency's value rose at a time when FMR had hedged a fund by selling
that currency in exchange for dollars, a fund would not participate in
the currency's appreciation. If FMR hedges currency exposure through
proxy hedges, a fund could realize currency losses from both the hedge
and the security position if the two currencies do not move in tandem.
Similarly, if FMR increases a fund's exposure to a foreign currency
and that currency's value declines, a fund will realize a loss. There
is no assurance that FMR's use of currency management strategies will
be advantageous to a fund or that it will hedge at appropriate times.
FUND'S RIGHTS AS A SHAREHOLDER. The fund does not intend to direct or
administer the day-to-day operations of any company. A fund, however,
may exercise its rights as a shareholder and may communicate its views
on important matters of policy to management, the Board of Directors,
and shareholders of a company when FMR determines that such matters
could have a significant effect on the value of the fund's investment
in the company. The activities in which a fund may engage, either
individually or in conjunction with others, may include, among others,
supporting or opposing proposed changes in a company's corporate
structure or business activities; seeking changes in a company's
directors or management; seeking changes in a company's direction or
policies; seeking the sale or reorganization of the company or a
portion of its assets; or supporting or opposing third-party takeover
efforts. This area of corporate activity is increasingly prone to
litigation and it is possible that a fund could be involved in
lawsuits related to such activities. FMR will monitor such activities
with a view to mitigating, to the extent possible, the risk of
litigation against a fund and the risk of actual liability if a fund
is involved in litigation. No guarantee can be made, however, that
litigation against a fund will not be undertaken or liabilities
incurred.
FUTURES AND OPTIONS. The following paragraphs pertain to futures and
options: Combined Positions, Correlation of Price Changes, Futures
Contracts, Futures Margin Payments, Limitations on Futures and Options
Transactions, Liquidity of Options and Futures Contracts, Options and
Futures Relating to Foreign Currencies, OTC Options, Purchasing Put
and Call Options, and Writing Put and Call Options.
COMBINED POSITIONS involve purchasing and writing options in
combination with each other, or in combination with futures or forward
contracts, to adjust the risk and return characteristics of the
overall position. For example, purchasing a put option and writing a
call option on the same underlying instrument would construct a
combined position whose risk and return characteristics are similar to
selling a futures contract. Another possible combined position would
involve writing a call option at one strike price and buying a call
option at a lower price, to reduce the risk of the written call option
in the event of a substantial price increase. Because combined options
positions involve multiple trades, they result in higher transaction
costs and may be more difficult to open and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of
types of exchange-traded options and futures contracts, it is likely
that the standardized contracts available will not match a fund's
current or anticipated investments exactly. A fund may invest in
options and futures contracts based on securities with different
issuers, maturities, or other characteristics from the securities in
which the fund typically invests, which involves a risk that the
options or futures position will not track the performance of the
fund's other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match a
fund's investments well. Options and futures prices are affected by
such factors as current and anticipated short-term interest rates,
changes in volatility of the underlying instrument, and the time
remaining until expiration of the contract, which may not affect
security prices the same way. Imperfect correlation may also result
from differing levels of demand in the options and futures markets and
the securities markets, from structural differences in how options and
futures and securities are traded, or from imposition of daily price
fluctuation limits or trading halts. A fund may purchase or sell
options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to
attempt to compensate for differences in volatility between the
contract and the securities, although this may not be successful in
all cases. If price changes in a fund's options or futures positions
are poorly correlated with its other investments, the positions may
fail to produce anticipated gains or result in losses that are not
offset by gains in other investments.
FUTURES CONTRACTS. In purchasing a futures contract, the buyer agrees
to purchase a specified underlying instrument at a specified future
date. In selling a futures contract, the seller agrees to sell a
specified underlying instrument at a specified future date. The price
at which the purchase and sale will take place is fixed when the buyer
and seller enter into the contract. Some currently available futures
contracts are based on specific securities, such as U.S. Treasury
bonds or notes, and some are based on indices of securities prices.
Futures can be held until their delivery dates, or can be closed out
before then if a liquid secondary market is available.
The value of a futures contract tends to increase and decrease in
tandem with the value of its underlying instrument. Therefore,
purchasing futures contracts will tend to increase a fund's exposure
to positive and negative price fluctuations in the underlying
instrument, much as if it had purchased the underlying instrument
directly. When a fund sells a futures contract, by contrast, the value
of its futures position will tend to move in a direction contrary to
the market. Selling futures contracts, therefore, will tend to offset
both positive and negative market price changes, much as if the
underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract
is not required to deliver or pay for the underlying instrument unless
the contract is held until the delivery date. However, both the
purchaser and seller are required to deposit "initial margin" with a
futures broker, known as a futures commission merchant (FCM), when the
contract is entered into. Initial margin deposits are typically equal
to a percentage of the contract's value. If the value of either
party's position declines, that party will be required to make
additional "variation margin" payments to settle the change in value
on a daily basis. The party that has a gain may be entitled to receive
all or a portion of this amount. Initial and variation margin payments
do not constitute purchasing securities on margin for purposes of a
fund's investment limitations. In the event of the bankruptcy of an
FCM that holds margin on behalf of a fund, the fund may be entitled to
return of margin owed to it only in proportion to the amount received
by the FCM's other customers, potentially resulting in losses to the
fund.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. The fund has filed a
notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading
Commission (CFTC) and the National Futures Association, which regulate
trading in the futures markets. The fund intends to comply with Rule
4.5 under the Commodity Exchange Act, which limits the extent to which
the fund can commit assets to initial margin deposits and option
premiums.
In addition, the fund will not: (a) sell futures contracts, purchase
put options, or write call options if, as a result, more than 25% of
the fund's total assets would be hedged with futures and options under
normal conditions; (b) purchase futures contracts or write put options
if, as a result, the fund's total obligations upon settlement or
exercise of purchased futures contracts and written put options would
exceed 25% of its total assets; or (c) purchase call options if, as a
result, the current value of option premiums for call options
purchased by the fund would exceed 5% of the fund's total assets.
These limitations do not apply to options attached to or acquired or
traded together with their underlying securities, and do not apply to
securities that incorporate features similar to options.
The above limitations on the fund's investments in futures contracts
and options, and the fund's policies regarding futures contracts and
options discussed elsewhere in this SAI may be changed as regulatory
agencies permit.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a
liquid secondary market will exist for any particular options or
futures contract at any particular time. Options may have relatively
low trading volume and liquidity if their strike prices are not close
to the underlying instrument's current price. In addition, exchanges
may establish daily price fluctuation limits for options and futures
contracts, and may halt trading if a contract's price moves upward or
downward more than the limit in a given day. On volatile trading days
when the price fluctuation limit is reached or a trading halt is
imposed, it may be impossible to enter into new positions or close out
existing positions. If the secondary market for a contract is not
liquid because of price fluctuation limits or otherwise, it could
prevent prompt liquidation of unfavorable positions, and potentially
could require a fund to continue to hold a position until delivery or
expiration regardless of changes in its value. As a result, a fund's
access to other assets held to cover its options or futures positions
could also be impaired.
OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures
contracts are similar to forward currency exchange contracts, except
that they are traded on exchanges (and have margin requirements) and
are standardized as to contract size and delivery date. Most currency
futures contracts call for payment or delivery in U.S. dollars. The
underlying instrument of a currency option may be a foreign currency,
which generally is purchased or delivered in exchange for U.S.
dollars, or may be a futures contract. The purchaser of a currency
call obtains the right to purchase the underlying currency, and the
purchaser of a currency put obtains the right to sell the underlying
currency.
The uses and risks of currency options and futures are similar to
options and futures relating to securities or indices, as discussed
above. A fund may purchase and sell currency futures and may purchase
and write currency options to increase or decrease its exposure to
different foreign currencies. Currency options may also be purchased
or written in conjunction with each other or with currency futures or
forward contracts. Currency futures and options values can be expected
to correlate with exchange rates, but may not reflect other factors
that affect the value of a fund's investments. A currency hedge, for
example, should protect a Yen-denominated security from a decline in
the Yen, but will not protect a fund against a price decline resulting
from deterioration in the issuer's creditworthiness. Because the value
of a fund's foreign-denominated investments changes in response to
many factors other than exchange rates, it may not be possible to
match the amount of currency options and futures to the value of the
fund's investments exactly over time.
OTC OPTIONS. Unlike exchange-traded options, which are standardized
with respect to the underlying instrument, expiration date, contract
size, and strike price, the terms of over-the-counter (OTC) options
(options not traded on exchanges) generally are established through
negotiation with the other party to the option contract. While this
type of arrangement allows the purchaser or writer greater flexibility
to tailor an option to its needs, OTC options generally involve
greater credit risk than exchange-traded options, which are guaranteed
by the clearing organization of the exchanges where they are traded.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the
purchaser obtains the right (but not the obligation) to sell the
option's underlying instrument at a fixed strike price. In return for
this right, the purchaser pays the current market price for the option
(known as the option premium). Options have various types of
underlying instruments, including specific securities, indices of
securities prices, and futures contracts. The purchaser may terminate
its position in a put option by allowing it to expire or by exercising
the option. If the option is allowed to expire, the purchaser will
lose the entire premium. If the option is exercised, the purchaser
completes the sale of the underlying instrument at the strike price. A
purchaser may also terminate a put option position by closing it out
in the secondary market at its current price, if a liquid secondary
market exists.
The buyer of a typical put option can expect to realize a gain if
security prices fall substantially. However, if the underlying
instrument's price does not fall enough to offset the cost of
purchasing the option, a put buyer can expect to suffer a loss
(limited to the amount of the premium, plus related transaction
costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right
to purchase, rather than sell, the underlying instrument at the
option's strike price. A call buyer typically attempts to participate
in potential price increases of the underlying instrument with risk
limited to the cost of the option if security prices fall. At the same
time, the buyer can expect to suffer a loss if security prices do not
rise sufficiently to offset the cost of the option.
WRITING PUT AND CALL OPTIONS. The writer of a put or call option takes
the opposite side of the transaction from the option's purchaser. In
return for receipt of the premium, the writer assumes the obligation
to pay the strike price for the option's underlying instrument if the
other party to the option chooses to exercise it. The writer may seek
to terminate a position in a put option before exercise by closing out
the option in the secondary market at its current price. If the
secondary market is not liquid for a put option, however, the writer
must continue to be prepared to pay the strike price while the option
is outstanding, regardless of price changes. When writing an option on
a futures contract, a fund will be required to make margin payments to
an FCM as described above for futures contracts.
If security prices rise, a put writer would generally expect to
profit, although its gain would be limited to the amount of the
premium it received. If security prices remain the same over time, it
is likely that the writer will also profit, because it should be able
to close out the option at a lower price. If security prices fall, the
put writer would expect to suffer a loss. This loss should be less
than the loss from purchasing the underlying instrument directly,
however, because the premium received for writing the option should
mitigate the effects of the decline.
Writing a call option obligates the writer to sell or deliver the
option's underlying instrument, in return for the strike price, upon
exercise of the option. The characteristics of writing call options
are similar to those of writing put options, except that writing calls
generally is a profitable strategy if prices remain the same or fall.
Through receipt of the option premium, a call writer mitigates the
effects of a price decline. At the same time, because a call writer
must be prepared to deliver the underlying instrument in return for
the strike price, even if its current value is greater, a call writer
gives up some ability to participate in security price increases.
ILLIQUID SECURITIES cannot be sold or disposed of in the ordinary
course of business at approximately the prices at which they are
valued. Difficulty in selling securities may result in a loss or may
be costly to a fund. Under the supervision of the Board of Trustees,
FMR determines the liquidity of a fund's investments and, through
reports from FMR, the Board monitors investments in illiquid
securities. In determining the liquidity of a fund's investments, FMR
may consider various factors, including (1) the frequency and volume
of trades and quotations, (2) the number of dealers and prospective
purchasers in the marketplace, (3) dealer undertakings to make a
market, and (4) the nature of the security and the market in which it
trades (including any demand, put or tender features, the mechanics
and other requirements for transfer, any letters of credit or other
credit enhancement features, any ratings, the number of holders, the
method of soliciting offers, the time required to dispose of the
security, and the ability to assign or offset the rights and
obligations of the security).
INDEXED SECURITIES are instruments whose prices are indexed to the
prices of other securities, securities indices, currencies, or other
financial indicators. Indexed securities typically, but not always,
are debt securities or deposits whose value at maturity or coupon rate
is determined by reference to a specific instrument or statistic.
Mortgage-indexed securities, for example, could be structured to
replicate the performance of mortgage securities and the
characteristics of direct ownership.
The performance of indexed securities depends to a great extent on the
performance of the security, currency, or other instrument to which
they are indexed, and may also be influenced by interest rate changes
in the United States and abroad. Indexed securities may be more
volatile than the underlying instruments. Indexed securities are also
subject to the credit risks associated with the issuer of the
security, and their values may decline substantially if the issuer's
creditworthiness deteriorates. Recent issuers of indexed securities
have included banks, corporations, and certain U.S. Government
agencies.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive
order issued by the SEC, a fund may lend money to, and borrow money
from, other funds advised by FMR or its affiliates. A fund will lend
through the program only when the returns are higher than those
available from an investment in repurchase agreements, and will borrow
through the program only when the costs are equal to or lower than the
cost of bank loans. Interfund loans and borrowings normally extend
overnight, but can have a maximum duration of seven days. Loans may be
called on one day's notice. A fund may have to borrow from a bank at a
higher interest rate if an interfund loan is called or not renewed.
Any delay in repayment to a lending fund could result in a lost
investment opportunity or additional borrowing costs.
INVESTMENT-GRADE DEBT SECURITIES. Investment-grade debt securities are
medium and high-quality securities. Some may possess speculative
characteristics and may be more sensitive to economic changes and to
changes in the financial conditions of issuers. A debt security is
considered to be investment-grade if it is rated investment-grade by
Moody's Investors Service, Standard & Poor's, Duff & Phelps Credit
Rating Co., or Fitch IBCA Inc., or is unrated but considered to be of
equivalent quality by FMR.
LOWER-QUALITY DEBT SECURITIES. Lower-quality debt securities have poor
protection with respect to the payment of interest and repayment of
principal, or may be in default. These securities are often considered
to be speculative and involve greater risk of loss or price changes
due to changes in the issuer's capacity to pay. The market prices of
lower-quality debt securities may fluctuate more than those of
higher-quality debt securities and may decline significantly in
periods of general economic difficulty, which may follow periods of
rising interest rates.
The market for lower-quality debt securities may be thinner and less
active than that for higher-quality debt securities, which can
adversely affect the prices at which the former are sold. Adverse
publicity and changing investor perceptions may affect the liquidity
of lower-quality debt securities and the ability of outside pricing
services to value lower-quality debt securities.
A fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise to exercise its rights as a security
holder to seek to protect the interests of security holders if it
determines this to be in the best interest of the fund's shareholders.
MORTGAGE SECURITIES are issued by government and non-government
entities such as banks, mortgage lenders, or other institutions. A
mortgage security is an obligation of the issuer backed by a mortgage
or pool of mortgages or a direct interest in an underlying pool of
mortgages. Some mortgage securities, such as collateralized mortgage
obligations (or "CMOs"), make payments of both principal and interest
at a range of specified intervals; others make semiannual interest
payments at a predetermined rate and repay principal at maturity (like
a typical bond). Mortgage securities are based on different types of
mortgages, including those on commercial real estate or residential
properties. Stripped mortgage securities are created when the interest
and principal components of a mortgage security are separated and sold
as individual securities. In the case of a stripped mortgage security,
the holder of the "principal-only" security (PO) receives the
principal payments made by the underlying mortgage, while the holder
of the "interest-only" security (IO) receives interest payments from
the same underlying mortgage.
Fannie Maes and Freddie Macs are pass-through securities issued by
Fannie Mae and Freddie Mac, respectively. Fannie Mae and Freddie Mac,
which guarantee payment of interest and repayment of principal on
Fannie Maes and Freddie Macs, respectively, are federally chartered
corporations supervised by the U.S. Government that act as
governmental instrumentalities under authority granted by Congress.
Fannie Mae is authorized to borrow from the U.S. Treasury to meet its
obligations. Fannie Maes and Freddie Macs are not backed by the full
faith and credit of the U.S. Government.
The value of mortgage securities may change due to shifts in the
market's perception of issuers and changes in interest rates. In
addition, regulatory or tax changes may adversely affect the mortgage
securities market as a whole. Non-government mortgage securities may
offer higher yields than those issued by government entities, but also
may be subject to greater price changes than government issues.
Mortgage securities are subject to prepayment risk, which is the risk
that early principal payments made on the underlying mortgages,
usually in response to a reduction in interest rates, will result in
the return of principal to the investor, causing it to be invested
subsequently at a lower current interest rate. Alternatively, in a
rising interest rate environment, mortgage security values may be
adversely affected when prepayments on underlying mortgages do not
occur as anticipated, resulting in the extension of the security's
effective maturity and the related increase in interest rate
sensitivity of a longer-term instrument. The prices of stripped
mortgage securities tend to be more volatile in response to changes in
interest rates than those of non-stripped mortgage securities.
To earn additional income for a fund, FMR may use a trading strategy
that involves selling mortgage securities and simultaneously agreeing
to purchase similar securities on a later date at a set price. This
trading strategy may result in an increased portfolio turnover rate
which increases costs and may increase taxable gains.
REPURCHASE AGREEMENTS involve an agreement to purchase a security and
to sell that security back to the original seller at an agreed-upon
price. The resale price reflects the purchase price plus an
agreed-upon incremental amount which is unrelated to the coupon rate
or maturity of the purchased security. As protection against the risk
that the original seller will not fulfill its obligation, the
securities are held in a separate account at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus
the accrued incremental amount. The value of the security purchased
may be more or less than the price at which the counterparty has
agreed to purchase the security. In addition, delays or losses could
result if the other party to the agreement defaults or becomes
insolvent. The fund will engage in repurchase agreement transactions
with parties whose creditworthiness has been reviewed and found
satisfactory by FMR.
RESTRICTED SECURITIES are subject to legal restrictions on their sale.
Difficulty in selling securities may result in a loss or be costly to
a fund. Restricted securities generally can be sold in privately
negotiated transactions, pursuant to an exemption from registration
under the Securities Act of 1933, or in a registered public offering.
Where registration is required, the holder of a registered security
may be obligated to pay all or part of the registration expense and a
considerable period may elapse between the time it decides to seek
registration and the time it may be permitted to sell a security under
an effective registration statement. If, during such a period, adverse
market conditions were to develop, the holder might obtain a less
favorable price than prevailed when it decided to seek registration of
the security.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
fund sells a security to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase that
security at an agreed-upon price and time. The fund will enter into
reverse repurchase agreements with parties whose creditworthiness has
been reviewed and found satisfactory by FMR. Such transactions may
increase fluctuations in the market value of fund assets and a fund's
yield and may be viewed as a form of leverage.
SECURITIES LENDING. A fund may lend securities to parties such as
broker-dealers or other institutions, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange
(NYSE) and a subsidiary of FMR Corp.
Securities lending allows a fund to retain ownership of the securities
loaned and, at the same time, earn additional income. The borrower
provides the fund with collateral in an amount at least equal to the
value of the securities loaned. The fund maintains the ability to
obtain the right to vote or consent on proxy proposals involving
material events affecting securities loaned. If the borrower defaults
on its obligation to return the securities loaned because of
insolvency or other reasons, a fund could experience delays and costs
in recovering the securities loaned or in gaining access to the
collateral. These delays and costs could be greater for foreign
securities. If a fund is not able to recover the securities loaned, a
fund may sell the collateral and purchase a replacement investment in
the market. The value of the collateral could decrease below the value
of the replacement investment by the time the replacement investment
is purchased. Loans will be made only to parties deemed by FMR to be
in good standing and when, in FMR's judgment, the income earned would
justify the risks.
Cash received as collateral through loan transactions may be invested
in other eligible securities. Investing this cash subjects that
investment, as well as the securities loaned, to market appreciation
or depreciation.
SOURCES OF LIQUIDITY OR CREDIT SUPPORT. Issuers may employ various
forms of credit and liquidity enhancements, including letters of
credit, guarantees, puts, and demand features, and insurance provided
by domestic or foreign entities such as banks and other financial
institutions. FMR may rely on its evaluation of the credit of the
liquidity or credit enhancement provider in determining whether to
purchase a security supported by such enhancement. In evaluating the
credit of a foreign bank or other foreign entities, FMR will consider
whether adequate public information about the entity is available and
whether the entity may be subject to unfavorable political or economic
developments, currency controls, or other government restrictions that
might affect its ability to honor its commitment. Changes in the
credit quality of the entity providing the enhancement could affect
the value of the security or a fund's share price.
STRIPPED SECURITIES are the separate income or principal components of
a debt security. The risks associated with stripped securities are
similar to those of other debt securities, although stripped
securities may be more volatile, and the value of certain types of
stripped securities may move in the same direction as interest rates.
U.S. Treasury securities that have been stripped by a Federal Reserve
Bank are obligations issued by the U.S. Treasury.
Privately stripped government securities are created when a dealer
deposits a U.S. Treasury security or other U.S. Government security
with a custodian for safekeeping. The custodian issues separate
receipts for the coupon payments and the principal payment, which the
dealer then sells.
SWAP AGREEMENTS can be individually negotiated and structured to
include exposure to a variety of different types of investments or
market factors. Depending on their structure, swap agreements may
increase or decrease a fund's exposure to long- or short-term interest
rates (in the United States or abroad), foreign currency values,
mortgage securities, corporate borrowing rates, or other factors such
as security prices or inflation rates. Swap agreements can take many
different forms and are known by a variety of names.
In a typical cap or floor agreement, one party agrees to make payments
only under specified circumstances, usually in return for payment of a
fee by the other party. For example, the buyer of an interest rate cap
obtains the right to receive payments to the extent that a specified
interest rate exceeds an agreed-upon level, while the seller of an
interest rate floor is obligated to make payments to the extent that a
specified interest rate falls below an agreed-upon level. An interest
rate collar combines elements of buying a cap and selling a floor.
Swap agreements will tend to shift a fund's investment exposure from
one type of investment to another. For example, if the fund agreed to
exchange payments in dollars for payments in foreign currency, the
swap agreement would tend to decrease the fund's exposure to U.S.
interest rates and increase its exposure to foreign currency and
interest rates. Caps and floors have an effect similar to buying or
writing options. Depending on how they are used, swap agreements may
increase or decrease the overall volatility of a fund's investments
and its share price and yield.
The most significant factor in the performance of swap agreements is
the change in the specific interest rate, currency, or other factors
that determine the amounts of payments due to and from a fund. If a
swap agreement calls for payments by the fund, the fund must be
prepared to make such payments when due. In addition, if the
counterparty's creditworthiness declined, the value of a swap
agreement would be likely to decline, potentially resulting in losses.
A fund may be able to eliminate its exposure under a swap agreement
either by assignment or other disposition, or by entering into an
offsetting swap agreement with the same party or a similarly
creditworthy party.
TEMPORARY DEFENSIVE POLICIES. The fund reserves the right to invest
without limitation in investment-grade money market or short-term debt
instruments for temporary, defensive purposes.
VARIABLE AND FLOATING RATE SECURITIES provide for periodic adjustments
in the interest rate paid on the security. Variable rate securities
provide for a specified periodic adjustment in the interest rate,
while floating rate securities have interest rates that change
whenever there is a change in a designated benchmark rate. Some
variable or floating rate securities are structured with put features
that permit holders to demand payment of the unpaid principal balance
plus accrued interest from the issuers or certain financial
intermediaries.
WHEN-ISSUED AND FORWARD PURCHASE OR SALE TRANSACTIONS involve a
commitment to purchase or sell specific securities at a predetermined
price or yield in which payment and delivery take place after the
customary settlement period for that type of security. Typically, no
interest accrues to the purchaser until the security is delivered.
When purchasing securities pursuant to one of these transactions, the
purchaser assumes the rights and risks of ownership, including the
risks of price and yield fluctuations and the risk that the security
will not be issued as anticipated. Because payment for the securities
is not required until the delivery date, these risks are in addition
to the risks associated with a fund's investments. If a fund remains
substantially fully invested at a time when a purchase is outstanding,
the purchases may result in a form of leverage. When a fund has sold a
security pursuant to one of these transactions, the fund does not
participate in further gains or losses with respect to the security.
If the other party to a delayed-delivery transaction fails to deliver
or pay for the securities, a fund could miss a favorable price or
yield opportunity or suffer a loss.
A fund may renegotiate a when-issued or forward transaction and may
sell the underlying securities before delivery, which may result in
capital gains or losses for the fund.
ZERO COUPON BONDS do not make interest payments; instead, they are
sold at a discount from their face value and are redeemed at face
value when they mature. Because zero coupon bonds do not pay current
income, their prices can be more volatile than other types of
fixed-income securities when interest rates change. In calculating a
fund's dividend, a portion of the difference between a zero coupon
bond's purchase price and its face value is considered income.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed
on behalf of the fund by FMR pursuant to authority contained in the
management contract. FMR is also responsible for the placement of
transaction orders for other investment companies and investment
accounts for which it or its affiliates act as investment adviser. In
selecting broker-dealers, subject to applicable limitations of the
federal securities laws, FMR considers various relevant factors,
including, but not limited to: the size and type of the transaction;
the nature and character of the markets for the security to be
purchased or sold; the execution efficiency, settlement capability,
and financial condition of the broker-dealer firm; the broker-dealer's
execution services rendered on a continuing basis; the reasonableness
of any commissions; and, if applicable, arrangements for payment of
fund expenses.
If FMR grants investment management authority to a sub-adviser (see
the section entitled "Management Contract"), that sub-adviser is
authorized to place orders for the purchase and sale of portfolio
securities, and will do so in accordance with the policies described
above.
Generally, commissions for investments traded on foreign exchanges
will be higher than for investments traded on U.S. exchanges and may
not be subject to negotiation.
The fund may execute portfolio transactions with broker-dealers who
provide research and execution services to the fund or other
investment accounts over which FMR or its affiliates exercise
investment discretion. Such services may include advice concerning the
value of securities; the advisability of investing in, purchasing, or
selling securities; and the availability of securities or the
purchasers or sellers of securities. In addition, such broker-dealers
may furnish analyses and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy, and
performance of investment accounts; and effect securities transactions
and perform functions incidental thereto (such as clearance and
settlement).
For transactions in fixed-income securities, FMR's selection of
broker-dealers is generally based on the availability of a security
and its price and, to a lesser extent, on the overall quality of
execution and other services, including research, provided by the
broker-dealer.
The receipt of research from broker-dealers that execute transactions
on behalf of a fund may be useful to FMR in rendering investment
management services to that fund or its other clients, and conversely,
such research provided by broker-dealers who have executed transaction
orders on behalf of other FMR clients may be useful to FMR in carrying
out its obligations to a fund. The receipt of such research has not
reduced FMR's normal independent research activities; however, it
enables FMR to avoid the additional expenses that could be incurred if
FMR tried to develop comparable information through its own efforts.
Fixed-income securities are generally purchased from an issuer or
underwriter acting as principal for the securities, on a net basis
with no brokerage commission paid. However, the dealer is compensated
by a difference between the security's original purchase price and the
selling price, the so-called "bid-asked spread." Securities may also
be purchased from underwriters at prices that include underwriting
fees.
Subject to applicable limitations of the federal securities laws, the
fund may pay a broker-dealer commissions for agency transactions that
are in excess of the amount of commissions charged by other
broker-dealers in recognition of their research and execution
services. In order to cause the fund to pay such higher commissions,
FMR must determine in good faith that such commissions are reasonable
in relation to the value of the brokerage and research services
provided by such executing broker-dealers, viewed in terms of a
particular transaction or FMR's overall responsibilities to that fund
or its other clients. In reaching this determination, FMR will not
attempt to place a specific dollar value on the brokerage and research
services provided, or to determine what portion of the compensation
should be related to those services.
To the extent permitted by applicable law, FMR is authorized to
allocate portfolio transactions in a manner that takes into account
assistance received in the distribution of shares of the fund or other
Fidelity funds and to use the research services of brokerage and other
firms that have provided such assistance. FMR may use research
services provided by and 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. [Prior to December 9, 1997, FMR used research services
provided by and placed agency transactions with Fidelity Brokerage
Services (FBS), an indirect subsidiary of FMR Corp.]
FMR may allocate brokerage transactions to broker-dealers (including
affiliates of FMR) who have entered into arrangements with FMR under
which the broker-dealer allocates a portion of the commissions paid by
a fund toward the reduction of that fund's expenses. The transaction
quality must, however, be comparable to those of other qualified
broker-dealers.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members
of national securities exchanges from executing exchange transactions
for investment accounts which they or their affiliates manage, unless
certain requirements are satisfied. Pursuant to such requirements, the
Board of Trustees has authorized NFSC to execute portfolio
transactions on national securities exchanges in accordance with
approved procedures and applicable SEC rules.
The Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio
transactions on behalf of the fund and review the commissions paid by
the fund over representative periods of time to determine if they are
reasonable in relation to the benefits to the fund.
For the fiscal periods ended April 30, 2000 and 1999, the fund's
portfolio turnover rates were ___% and ___%, respectively. [Variations
in turnover rate may be due to a fluctuating volume of shareholder
purchase and redemption orders, market conditions, or changes in FMR's
investment outlook.]]
[[For the fiscal years ended April 30, 2000, 1999, and 1998, the fund
paid brokerage commissions of $________, $_________, and $________,
respectively. Significant changes in brokerage commissions paid by the
fund from year to year may result from changing asset levels
throughout the year.] The fund may pay both commissions and spreads in
connection with the placement of portfolio transactions. [For the
fiscal years ended April 30, 2000, 1999, and 1998, the fund paid no
brokerage commissions.]]
[During the fiscal years ended April 30, 2000, 1999, and 1998, the
fund paid brokerage commissions of $_______, $_______, and $_______,
respectively, to NFSC. NFSC is paid on a commission basis. [During the
fiscal year ended April 30, 2000, this amounted to approximately __%
of the aggregate brokerage commissions paid by the fund for
transactions involving approximately __% of the aggregate dollar
amount of transactions for which the fund paid brokerage commissions.
[The difference between the percentage of aggregate brokerage
commissions paid to, and the percentage of the aggregate dollar amount
of transactions effected through, NFSC is a result of the low
commission rates charged by NFSC.] [NFSC has used a portion of the
commissions paid by the fund to reduce that fund's custodian or
transfer agent fees.]]]
[During the fiscal years ended April 30, 2000, 1999, and 1998, the
fund paid brokerage commissions of $_____, $_____, and $_____,
respectively, to FBS. FBS is paid on a commission basis. [During the
fiscal year ended April 30, 2000, this amounted to approximately __%
of the aggregate brokerage commissions paid by the fund for
transactions involving approximately __% of the aggregate dollar
amount of transactions for which the fund paid brokerage commissions.
[The difference between the percentage of aggregate brokerage
commissions paid to, and the percentage of the aggregate dollar amount
of transactions effected through, FBS is a result of the low
commission rates charged by FBS.] [FBS has used a portion of the
commissions paid by the fund to reduce that fund's custodian or
transfer agent fees.]]]
[During the fiscal years ended April 30, 2000, 1999, and 1998, the
fund paid brokerage commissions of $_____, $_____, and $_____,
respectively, to FBSJ. FBSJ is paid on a commission basis. [During the
fiscal year ended April 30, 2000, this amounted to approximately __%
of the aggregate brokerage commissions paid by the fund for
transactions involving approximately __% of the aggregate dollar
amount of transactions for which the fund paid brokerage commissions.
[The difference between the percentage of aggregate brokerage
commissions paid to, and the percentage of the aggregate dollar amount
of transactions effected through, FBSJ is a result of the low
commission rates charged by FBSJ.][FBSJ has used a portion of the
commissions paid by the fund to reduce that fund's custodian or
transfer agent fees.]]]
[[During the fiscal year ended April 30, 2000, the fund paid $__ in
brokerage commissions to firms for providing research services
involving approximately $__ of transactions. The provision of research
services was not necessarily a factor in the placement of all this
business with such firms.] [During the fiscal year ended April 30,
2000, the fund paid no brokerage commissions to firms for providing
research services.]]
The Trustees of the fund have approved procedures in conformity with
Rule 10f-3 under the 1940 Act whereby a fund may purchase securities
that are offered in underwritings in which an affiliate of FMR
participates. These procedures prohibit the fund from directly or
indirectly benefiting an FMR affiliate in connection with such
underwritings. In addition, for underwritings where an FMR affiliate
participates as a principal underwriter, certain restrictions may
apply that could, among other things, limit the amount of securities
that the fund could purchase in the underwriting.
From time to time the Trustees will review whether the recapture for
the benefit of the fund of some portion of the brokerage commissions
or similar fees paid by the fund on portfolio transactions is legally
permissible and advisable. The fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at
present no other recapture arrangements are in effect. The Trustees
intend to continue to review whether recapture opportunities are
available and are legally permissible and, if so, to determine in the
exercise of their business judgment whether it would be advisable for
the fund to seek such recapture.
Although the Trustees and officers of the fund are substantially the
same as those of other funds managed by FMR or its affiliates,
investment decisions for the fund are made independently from those of
other funds or investment accounts managed by FMR or its
affiliates. It sometimes happens that the same security is held in
the portfolio of more than one of these funds or investment accounts.
Simultaneous transactions are inevitable when several funds and
investment accounts are managed by the same investment adviser,
particularly when the same security is suitable for the investment
objective of more than one fund or investment account.
When two or more funds are simultaneously engaged in the purchase or
sale of the same security, the prices and amounts are allocated in
accordance with procedures believed to be appropriate and equitable
for each fund. In some cases this system could have a detrimental
effect on the price or value of the security as far as the fund is
concerned. In other cases, however, the ability of the fund to
participate in volume transactions will produce better executions and
prices for the fund. It is the current opinion of the Trustees that
the desirability of retaining FMR as investment adviser to the fund
outweighs any disadvantages that may be said to exist from exposure to
simultaneous transactions.
VALUATION
The fund's net asset value per share (NAV) is the value of a single
share. The NAV of the fund is computed by adding the value of the
fund's investments, cash, and other assets, subtracting its
liabilities, and dividing the result by the number of shares
outstanding.
Portfolio securities are valued by various methods depending on the
primary market or exchange on which they trade. Fixed-income
securities and other assets for which market quotations are readily
available may be valued at market values determined by such
securities' most recent bid prices (sales prices if the principal
market is an exchange) in the principal market in which they normally
are traded, as furnished by recognized dealers in such securities or
assets. Or, fixed-income securities and convertible securities may be
valued on the basis of information furnished by a pricing service that
uses a valuation matrix which incorporates both dealer-supplied
valuations and electronic data processing techniques. Use of pricing
services has been approved by the Board of Trustees. A number of
pricing services are available, and the fund may use various pricing
services or discontinue the use of any pricing service.
Futures contracts and options are valued on the basis of market
quotations, if available. Securities of other open-end investment
companies are valued at their respective NAVs.
Independent brokers or quotation services provide prices of foreign
securities in their local currency. FSC gathers all exchange rates
daily at the close of the NYSE using the last quoted price on the
local currency and then translates the value of foreign securities
from their local currencies into U.S. dollars. Any changes in the
value of forward contracts due to exchange rate fluctuations and days
to maturity are included in the calculation of NAV. If an event that
is expected to materially affect the value of a portfolio security
occurs after the close of an exchange or market on which that security
is traded, then that security will be valued in good faith by a
committee appointed by the Board of Trustees.
Short-term securities with remaining maturities of sixty days or less
for which market quotations and information furnished by a pricing
service are not readily available are valued either at amortized cost
or at original cost plus accrued interest, both of which approximate
current value.
The procedures set forth above need not be used to determine the value
of the securities owned by the fund if, in the opinion of a committee
appointed by the Board of Trustees, some other method would more
accurately reflect the fair value of such securities. For example,
securities and other assets for which there is no readily available
market value may be valued in good faith by a committee appointed by
the Board of Trustees. In making a good faith determination of the
value of a security, the committee may review price movements in
futures contracts and American Depositary Receipts (ADRs), market and
trading trends, the bid/ask quotes of brokers and off-exchange
institutional trading.
PERFORMANCE
The fund may quote performance in various ways. All performance
information supplied by the fund in advertising is historical and is
not intended to indicate future returns. The fund's share price, yield
and return fluctuate in response to market conditions and other
factors, and the value of fund shares when redeemed may be more or
less than their original cost.
YIELD CALCULATIONS. Yields for the fund are computed by dividing the
fund's interest and income for a given 30-day or one-month period, net
of expenses, by the average number of shares entitled to receive
distributions during the period, dividing this figure by the fund's
NAV at the end of the period, and annualizing the result (assuming
compounding of income) in order to arrive at an annual percentage
rate. Income is calculated for purposes of yield quotations in
accordance with standardized methods applicable to all stock and bond
funds. In general, interest income is reduced with respect to bonds
trading at a premium over their par value by subtracting a portion of
the premium from income on a daily basis, and is increased with
respect to bonds trading at a discount by adding a portion of the
discount to daily income. Income is adjusted to reflect gains and
losses from principal repayments received by a fund with respect to
mortgage-related securities and other asset-backed securities. Other
capital gains and losses generally are excluded from the calculation.
Income calculated for the purposes of calculating the fund's yield
differs from income as determined for other accounting purposes.
Because of the different accounting methods used, and because of the
compounding of income assumed in yield calculations, the fund's yield
may not equal its distribution rate, the income paid to an investor's
account, or the income reported in the fund's financial statements.
Yield information may be useful in reviewing the fund's performance
and in providing a basis for comparison with other investment
alternatives. However, the fund's yield fluctuates, unlike investments
that pay a fixed interest rate over a stated period of time. When
comparing investment alternatives, investors should also note the
quality and maturity of the portfolio securities of respective
investment companies they have chosen to consider.
Investors should recognize that in periods of declining interest rates
the fund's yield will tend to be somewhat higher than prevailing
market rates, and in periods of rising interest rates the fund's yield
will tend to be somewhat lower. Also, when interest rates are falling,
the inflow of net new money to the fund from the continuous sale of
its shares will likely be invested in instruments producing lower
yields than the balance of the fund's holdings, thereby reducing the
fund's current yield. In periods of rising interest rates, the
opposite can be expected to occur.
RETURN CALCULATIONS. Returns quoted in advertising reflect all aspects
of the fund's return, including the effect of reinvesting dividends
and capital gain distributions, and any change in the fund's NAV over
a stated period. A cumulative return reflects actual performance over
a stated period of time. Average annual returns are calculated by
determining the growth or decline in value of a hypothetical
historical investment in the fund over a stated period, and then
calculating the annually compounded percentage rate that would have
produced the same result if the rate of growth or decline in value had
been constant over the period. For example, a cumulative return of
100% over ten years would produce an average annual return of 7.18%,
which is the steady annual rate of return that would equal 100% growth
on a compounded basis in ten years. While average annual returns are a
convenient means of comparing investment alternatives, investors
should realize that the fund's performance is not constant over time,
but changes from year to year, and that average annual returns
represent averaged figures as opposed to the actual year-to-year
performance of the fund.
In addition to average annual returns, the fund may quote unaveraged
or cumulative returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative returns
may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a
series of redemptions, over any time period. Returns may be broken
down into their components of income and capital (including capital
gains and changes in share price) to illustrate the relationship of
these factors and their contributions to return. Returns may be quoted
on a before-tax or after-tax basis. Returns may or may not include the
effect of the fund's small account fee. Excluding the fund's small
account fee from a return calculation produces a higher return figure.
Returns, yields and other performance information may be quoted
numerically or in a table, graph, or similar illustration.
NET ASSET VALUE. Charts and graphs using the fund's NAVs, adjusted
NAVs, and benchmark indexes may be used to exhibit performance. An
adjusted NAV includes any distributions paid by the fund and reflects
all elements of its return. Unless otherwise indicated, the fund's
adjusted NAVs are not adjusted for sales charges, if any.
HISTORICAL FUND RESULTS. The following table shows the fund's yield
and returns for the fiscal periods ended April 30, 2000.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Average Annual Returns Cumulative Returns
Thirty-Day Yield One Year Five Years Ten Years One Year Five Years Ten Years
Intermediate Bond % % % % % % %
</TABLE>
[Note: If FMR had not reimbursed certain fund expenses during these
periods, the fund's returns would have been lower.]
[Note: If FMR had not reimbursed certain fund expenses during these
periods, the fund's yield would have been ___%.]
The following table shows the income and capital elements of the
fund's cumulative return. The table compares the fund's return to the
record of the Standard & Poor's 500 Index (S&P 500(registered
trademark)), the Dow Jones Industrial Average (DJIA), and the cost of
living, as measured by the Consumer Price Index (CPI), over the same
period. The S&P 500 and DJIA comparisons are provided to show how the
fund's return compared to the record of a market
capitalization-weighted index of common stocks and a narrower set of
stocks of major industrial companies, respectively, over the same
period. Because the fund invests in fixed-income securities, common
stocks represent a different type of investment from the fund. Common
stocks generally offer greater growth potential than the fund, but
generally experience greater price volatility, which means greater
potential for loss. In addition, common stocks generally provide lower
income than a fixed-income investment such as the fund. The S&P 500
and DJIA returns are based on the prices of unmanaged groups of stocks
and, unlike the fund's returns, do not include the effect of brokerage
commissions or other costs of investing.
During the 10-year period ended April 30, 2000, a hypothetical $10,000
investment in Intermediate Bond would have grown to $____, assuming
all distributions were reinvested. Returns are based on past results
and are not an indication of future performance. Tax consequences of
different investments have not been factored into the figures below.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
INTERMEDIATE BOND INDEXES
Fiscal Year Ended Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value S&P 500
Investment Distributions Gain Distributions
2000 $ $ $ $ $
1999 $ $ $ $ $
1998 $ $ $ $ $
1997 $ $ $ $ $
1996 $ $ $ $ $
1995 $ $ $ $ $
1994 $ $ $ $ $
1993 $ $ $ $ $
1992 $ $ $ $ $
1991 $ $ $ $ $
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
INTERMEDIATE BOND INDEXES
Fiscal Year Ended DJIA Cost of Living
2000 $ $
1999 $ $
1998 $ $
1997 $ $
1996 $ $
1995 $ $
1994 $ $
1993 $ $
1992 $ $
1991 $ $
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in the fund
on May 1, 1990, the net amount invested in fund shares was $10,000.
The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions
for the period covered (their cash value at the time they were
reinvested) amounted to $____. If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments for the period would have
amounted to $____ for dividends and $____ for capital gain
distributions.
PERFORMANCE COMPARISONS. The fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed
as mutual fund rankings prepared by Lipper Inc. (Lipper), an
independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Generally, Lipper rankings are based on
return, assume reinvestment of distributions, do not take sales
charges or trading fees into consideration, and are prepared without
regard to tax consequences. Lipper may also rank based on yield. In
addition to the mutual fund rankings, the fund's performance may be
compared to stock, bond, and money market mutual fund performance
indexes prepared by Lipper or other organizations. When comparing
these indexes, it is important to remember the risk and return
characteristics of each type of investment. For example, while stock
mutual funds may offer higher potential returns, they also carry the
highest degree of share price volatility. Likewise, money market funds
may offer greater stability of principal, but generally do not offer
the higher potential returns available from stock mutual funds.
From time to time, the fund's performance may also be compared to
other mutual funds tracked by financial or business publications and
periodicals. For example, the fund may quote Morningstar, Inc. in its
advertising materials. Morningstar, Inc. is a mutual fund rating
service that rates mutual funds on the basis of risk-adjusted
performance. Rankings that compare the performance of Fidelity funds
to one another in appropriate categories over specific periods of time
may also be quoted in advertising. The fund may advertise risk
ratings, including symbols or numbers, prepared by independent rating
agencies.
The fund's performance may also be compared to that of the benchmark
index representing the universe of securities in which the fund may
invest. The return of the index reflects reinvestment of all dividends
and capital gains paid by securities included in the index. Unlike the
fund's returns, however, the index's returns do not reflect brokerage
commissions, transaction fees, or other costs of investing directly in
the securities included in the index.
Intermediate Bond may compare its performance to that of the Lehman
Brothers Intermediate Government/Corporate Bond Index, a market
value-weighted index for government and corporate fixed-rate debt
issues. Issues included in the index have an outstanding par value of
at least $100 million and maturities between one and 10 years.
Government and corporate issues include all public obligations of the
U.S. Treasury (excluding flower bonds and foreign-targeted issues) and
U.S. Government agencies, as well as nonconvertible investment-grade,
SEC-registered corporate debt.
The fund may be compared in advertising to Certificates of Deposit
(CDs) or other investments issued by banks or other depository
institutions. Mutual funds differ from bank investments in several
respects. For example, the fund may offer greater liquidity or higher
potential returns than CDs, the fund does not guarantee an investor's
principal or return, and fund shares are not FDIC insured.
Fidelity may provide information designed to help individuals
understand their investment goals and explore various financial
strategies. Such information may include information about current
economic, market, and political conditions; materials that describe
general principles of investing, such as asset allocation,
diversification, risk tolerance, and goal setting; questionnaires
designed to help create a personal financial profile; worksheets used
to project savings needs based on assumed rates of inflation and
hypothetical rates of return; and action plans offering investment
alternatives. Materials may also include discussions of Fidelity's
asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides
historical returns of the capital markets in the United States,
including common stocks, small capitalization stocks, long-term
corporate bonds, intermediate-term government bonds, long-term
government bonds, Treasury bills, the U.S. rate of inflation (based on
the CPI), and combinations of various capital markets. The performance
of these capital markets is based on the returns of different indexes.
Fidelity funds may use the performance of these capital markets in
order to demonstrate general risk-versus-reward investment scenarios.
Performance comparisons may also include the value of a hypothetical
investment in any of these capital markets. The risks associated with
the security types in any capital market may or may not correspond
directly to those of the funds. Ibbotson calculates returns in the
same method as the funds. The funds may also compare performance to
that of other compilations or indexes that may be developed and made
available in the future.
In advertising materials, Fidelity may reference or discuss its
products and services, which may include other Fidelity funds;
retirement investing; brokerage products and services; model
portfolios or allocations; saving for college or other goals; and
charitable giving. In addition, Fidelity may quote or reprint
financial or business publications and periodicals as they relate to
current economic and political conditions, fund management, portfolio
composition, investment philosophy, investment techniques, the
desirability of owning a particular mutual fund, and Fidelity services
and products. Fidelity may also reprint, and use as advertising and
sales literature, articles from Fidelity Focus(Registered trademark),
a quarterly magazine provided free of charge to Fidelity fund
shareholders.
The fund may present its fund number, Quotron(trademark) number, and
CUSIP number, and discuss or quote its current portfolio manager.
VOLATILITY. The fund may quote various measures of volatility and
benchmark correlation in advertising. In addition, the fund may
compare these measures to those of other funds. Measures of volatility
seek to compare the fund's historical share price fluctuations or
returns to those of a benchmark. Measures of benchmark correlation
indicate how valid a comparative benchmark may be. All measures of
volatility and correlation are calculated using averages of historical
data. In advertising, the fund may also discuss or illustrate examples
of interest rate sensitivity.
MOMENTUM INDICATORS indicate the fund's price movements over specific
periods of time. Each point on the momentum indicator represents the
fund's percentage change in price movements over that period.
The fund may advertise examples of the effects of periodic investment
plans, including the principle of dollar cost averaging. In such a
program, an investor invests a fixed dollar amount in a fund at
periodic intervals, thereby purchasing fewer shares when prices are
high and more shares when prices are low. While such a strategy does
not assure a profit or guard against loss in a declining market, the
investor's average cost per share can be lower than if fixed numbers
of shares are purchased at the same intervals. In evaluating such a
plan, investors should consider their ability to continue purchasing
shares during periods of low price levels.
As of April 30, 2000, FMR advised over $____ billion in municipal fund
assets, $____ billion in taxable fixed-income fund assets, $___
billion in money market fund assets, $___ billion in equity fund
assets, $___ billion in international fund assets, and $___ billion in
Spartan fund assets. The fund may reference the growth and variety of
money market mutual funds and the adviser's innovation and
participation in the industry. The equity funds under management
figure represents the largest amount of equity fund assets under
management by a mutual fund investment adviser in the United States,
making FMR America's leading equity (stock) fund manager. FMR, its
subsidiaries, and affiliates maintain a worldwide information and
communications network for the purpose of researching and managing
investments abroad.
In addition to performance rankings, the fund may compare its total
expense ratio to the average total expense ratio of similar funds
tracked by Lipper. The fund's total expense ratio is a significant
factor in comparing bond and money market investments because of its
effect on yield.
ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION
The fund may make redemption payments in whole or in part in readily
marketable securities or other property, valued for this purpose as
they are valued in computing the fund's NAV, if FMR determines it is
in the best interests of the fund. Shareholders that receive
securities or other property on redemption may realize a gain or loss
for tax purposes, and will incur any costs of sale, as well as the
associated inconveniences.
DISTRIBUTIONS AND TAXES
DIVIDENDS. Because the fund's income is primarily derived from
interest, dividends from the fund generally will not qualify for the
dividends-received deduction available to corporate shareholders.
Short-term capital gains are taxable as dividends, but do not qualify
for the dividends-received deduction. A portion of the fund's
dividends derived from certain U.S. Government securities and
securities of certain other investment companies may be exempt from
state and local taxation.
CAPITAL GAIN DISTRIBUTIONS. The fund's long-term capital gain
distributions are federally taxable to shareholders generally as
capital gains.
[As of April 30, 2000, the fund had an aggregate capital loss
carryforward of approximately $____. This loss carryforward, [all of
which will expire on April 30, ____ of which $____, $____, and $____
will expire on April 30, ____, ____, and ____, respectively], is
available to offset future capital gains.]
RETURNS OF CAPITAL. If the fund's distributions exceed its taxable
income and capital gains realized during a taxable year, all or a
portion of the distributions made in the same taxable year may be
recharacterized as a return of capital to shareholders. A return of
capital distribution will generally not be taxable, but will reduce
each shareholder's cost basis in the fund and result in a higher
reported capital gain or lower reported capital loss when those shares
on which the distribution was received are sold.
FOREIGN TAX CREDIT OR DEDUCTION. Foreign governments may withhold
taxes on dividends and interest earned by the fund with respect to
foreign securities. Foreign governments may also impose taxes on other
payments or gains with respect to foreign securities. Because the fund
does not currently anticipate that securities of foreign issuers will
constitute more than 50% of its total assets at the end of its fiscal
year, shareholders should not expect to be eligible to claim a foreign
tax credit or deduction on their federal income tax returns with
respect to foreign taxes withheld.
TAX STATUS OF THE FUND. The fund intends to qualify each year as a
"regulated investment company" under Subchapter M of the Internal
Revenue Code so that it will not be liable for federal tax on income
and capital gains distributed to shareholders. In order to qualify as
a regulated investment company, and avoid being subject to federal
income or excise taxes at the fund level, the fund intends to
distribute substantially all of its net investment income and net
realized capital gains within each calendar year as well as on a
fiscal year basis, and intends to comply with other tax rules
applicable to regulated investment companies.
OTHER TAX INFORMATION. The information above is only a summary of some
of the tax consequences generally affecting the fund and its
shareholders, and no attempt has been made to discuss individual tax
consequences. It is up to you or your tax preparer to determine
whether the sale of shares of the fund resulted in a capital gain or
loss or other tax consequence to you. In addition to federal income
taxes, shareholders may be subject to state and local taxes on fund
distributions, and shares may be subject to state and local personal
property taxes. Investors should consult their tax advisers to
determine whether a fund is suitable to their particular tax
situation.
TRUSTEES AND OFFICERS
The Trustees, Members of the Advisory Board, and executive officers of
the trust and fund, as applicable, are listed below. The Board
of Trustees governs the fund and is responsible for protecting the
interests of shareholders. The Trustees are experienced executives who
meet periodically throughout the year to oversee the fund's
activities, review contractual arrangements with companies that
provide services to the fund, and review the fund's performance.
Except as indicated, each individual has held the office shown or
other offices in the same company for the last five years. All persons
named as Trustees and Members of the Advisory Board also serve in
similar capacities for other funds advised by FMR or its affiliates.
The business address of each Trustee, Member of the Advisory Board,
and officer who is an "interested person" (as defined in the 1940 Act)
is 82 Devonshire Street, Boston, Massachusetts 02109, which is also
the address of FMR. The business address of all the other Trustees is
Fidelity Investments(registered trademark), P.O. Box 9235, Boston,
Massachusetts 02205-9235.Those Trustees who are "interested persons"
by virtue of their affiliation with either the trust or FMR are
indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (69), Trustee, is President of Fidelity
Intermediate Bond Fund. Mr. Johnson also serves as President of other
Fidelity funds. He is Chief Executive Officer, Chairman, 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
Management & Research (U.K.) Inc. and of Fidelity Management &
Research (Far East) Inc.; Chairman (1998) and a Director (1997) of
Fidelity Investments Money Managements, Inc.; Chairman and
Representative Director of Fidelity Investments Japan Limited (1997);
and a Director of FDC and of FMR Co., Inc. (2000).
J. MICHAEL COOK (57), Member of the Advisory Board (2000).
Prior to Mr. Cook's retirement in May 1999, he served as Chairman and
Chief Executive Officer of Deloitte & Touche LLP, Chairman of the
Deloitte & Touche Foundation, and a member of the Board of Deloitte
Touche Tohmatsu. He currently serves as an Executive in Residence of
the Columbia Business School and as a Director of Dow Chemical Company
(2000), Columbia/HCA Healthcare Corporation (1999), and Children First
(1999). He is a member of the Executive Committee of the Securities
Regulation Institute, a member of the Advisory Board of Boardroom
Consultants, a Director of the National Forum for Health Care Quality,
Measurement and Reporting, past chairman and a member of the Board of
Catalyst (a leading organization for the advancement of women in
business), and is a Director of the STAR Foundation (Society to
Advance the Retarded and Handicapped). He also serves as a member of
the Board and Executive Committee and as Co-Chairman of the Audit and
Finance Committee of the Center for Strategic & International Studies,
a member of the Board of Overseers of the Columbia Business School,
and a Member of the Advisory Board of the Graduate School of Business
of the University of Florida.
RALPH F. COX (67), Trustee, is President of RABAR 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 Waste Management
Inc. (non-hazardous waste, 1993), CH2M Hill Companies
(engineering), and Bonneville Pacific (independent power and
petroleum production) . In addition, he is a member of advisory
boards of Texas A&M University and the University of Texas at Austin.
PHYLLIS BURKE DAVIS (68), Trustee. Mrs. Davis is retired from Avon
Products, Inc. where she held various positions including Senior Vice
President of Corporate Affairs and Group Vice President of U.S. sales,
distribution, and manufacturing. She is currently a Director of
BellSouth Corporation (telecommunications), Eaton Corporation
(manufacturing), and the TJX Companies, Inc. (retail stores), and
previously served as a Director of Hallmark Cards, Inc., Nabisco
Brands, Inc. , and Standard Brands, Inc. In addition, she is a
member of the Board of Directors of the Southampton Hospital in
Southampton, N.Y. (1998).
ROBERT M. GATES (56), Trustee (1997), is a consultant, author, and
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 Charles Stark Draper
Laboratory (non-profit), NACCO Industries, Inc. (mining and
manufacturing), and TRW Inc. (automotive, space, defense, and
information technology). Mr. Gates previously served as a Director of
LucasVarity PLC (automotive components and diesel engines). He is
currently serving as Dean of the George Bush School of Government and
Public Service at Texas A & M University (1999-2000). 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.
DONALD J. KIRK (67), Trustee, is Executive-in-Residence (1995) at
Columbia University Graduate School of Business. 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 as a Director
of 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), Vice Chairman 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).
NED C. LAUTENBACH (56), Trustee (2000), has been a partner of
Clayton, Dubilier & Rice, Inc. (private equity investment firm) since
September 1998. Mr. Lautenbach was Senior Vice President of IBM
Corporation from 1992 until his retirement in July 1998. From 1993 to
1995 he was Chairman of IBM World Trade Corporation. He also was a
member of IBM's Corporate Executive Committee from 1994 to July 1998.
He is a Director of PPG Industries Inc. (glass, coating and chemical
manufacturer), Dynatech Corporation (global communications equipment),
Eaton Corporation (global manufacturer of highly engineered products)
and ChoicePoint Inc. (data identification, retrieval, storage, and
analysis).
*PETER S. LYNCH (57), Trustee, is Vice Chairman and a Director
of FMR; and a Director of FMR Co., Inc. (2000). 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(registered trademark) 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 (66), Trustee (1997), is the Interim Chancellor
for the University of North Carolina at Chapel Hill. Previously he
had served from 1995 through 1998 as Vice President of Finance for the
University of North Carolina (16-school system). 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), Duke-Weeks Realty Corporation
(real estate, 1994), Carolina Power and Light Company (electric
utility, 1996), the Kenan Transport Company (trucking, 1996), and
Dynatech Corporation (electronics, 1999). Previously, he was a
Director of First American Corporation (bank holding company,
1979-1996). In addition, Mr. McCoy served as a member of the Board of
Visitors for the University of North Carolina at Chapel Hill
(1994-1998) and currently serves on the Board of Visitors of the
Kenan-Flager Business School (University of North Carolina at Chapel
Hill, 1988).
GERALD C. McDONOUGH (71), Trustee and Chairman of the non-interested
Trustees, is Chairman of G.M. Management Group (strategic advisory
services). Mr. McDonough is a Director and Chairman of the Board 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 (67), Trustee (1993), is Chairman Emeritus of
Lexmark International, Inc. (office machines, 1991) where he still
remains a member of the Board. 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), Imation Corp. (imaging and information storage, 1997). He is
a Board member of Dynatech Corporation (electronics, 1999).
*ROBERT C. POZEN (53), Trustee (1997), is Senior Vice President of
Fidelity Intermediate Bond Fund. Mr. Pozen also serves as Senior Vice
President of other Fidelity funds (1997). He is President and a
Director of FMR (1997), Fidelity Management & Research (U.K.) Inc.
(1997), Fidelity Management & Research (Far East) Inc. (1997),
Fidelity Investments Money Management, Inc. (1998), and FMR Co., Inc.
(2000); and a Director of Strategic Advisers, Inc. (1999). Previously,
Mr. Pozen served as General Counsel, Managing Director, and Senior
Vice President of FMR Corp.
THOMAS R. WILLIAMS (71), Trustee, is President of The Wales Group,
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 National Life Insurance Company of Vermont and American Software,
Inc. Mr. Williams was previously a Director of ConAgra, Inc.
(agricultural products), Georgia Power Company (electric utility), and
Avado, Inc. (restaurants).
DWIGHT D. CHURCHILL (46), is Vice President of Fidelity
Intermediate Bond Fund. He serves as President of the Fixed-Income
Division (2000), Vice President of Bond Funds, Group Leader of the
Bond Group, Senior Vice President of FMR (1997), and Vice President of
FIMM (1998). Mr. Churchill joined Fidelity in 1993 as Vice President
and Group Leader of Taxable Fixed-Income Investments.
FORD O'NEIL (38), is vice president of Fidelity Intermediate Bond
Fund (1999), and other funds advised by FMR. Prior to his current
responsibilities, Mr. O'Neil managed a variety of Fidelity funds.
ERIC D. ROITER (51), is Secretary of Fidelity Intermediate Bond
Fund (1998). He also serves as Secretary of other Fidelity Funds
(1998); Vice President, General Counsel and Clerk of FMR (1998); and
Vice President and Clerk of FDC (1998). Prior to joining Fidelity,
Mr. Roiter was with the law firm of Debevoise & Plimpton, as an
associate (1981-1984) and as a partner (1985-1997), and served as an
Assistant General Counsel of the U.S. Securities and Exchange
Commission (1979-1981). Mr. Roiter was an Adjunct Member, Faculty of
Law, at Columbia University Law School (1996-1997).
ROBERT A. DWIGHT (41), is Treasurer of Fidelity Intermediate Bond
Fund (2000). Mr. Dwight also serves as Treasurer of other Fidelity
funds (2000) and is an employee of FMR. Prior to becoming Treasurer of
the Fidelity funds, he served as President of Fidelity Accounting and
Custody Services (FACS). Before joining Fidelity, Mr. Dwight was
Senior Vice President of fund accounting operations for The Boston
Company.
MARIA F. DWYER (41), is Deputy Treasurer of Fidelity Intermediate
Bond Fund (2000). She also serves as Deputy Treasurer of other
Fidelity funds (2000) and is a Vice President (1999) and an employee
(1996) of FMR. Prior to joining Fidelity, Ms. Dwyer served as Director
of Compliance for MFS Investment Management.
MATTHEW N. KARSTETTER (38), is Deputy Treasurer of Fidelity
Intermediate Bond Fund (1998). He also serves as Deputy
Treasurer of other Fidelity funds (1998) and is an employee of FMR
(1998). Before joining FMR, Mr. Karstetter served as Vice President of
Investment Accounting and Treasurer of IDS Mutual Funds at American
Express Financial Advisors (1996-1998). Prior to 1996, Mr. Karstetter
was Vice President, Mutual Fund Services at State Street Bank & Trust
(1991-1996).
STANLEY N. GRIFFITH (53), is Assistant Vice President of Fidelity
Intermediate Bond Fund (1998). Mr. Griffith is Assistant Vice
President of Fidelity's Fixed-Income Funds (1998) and an employee of
FMR Corp.
JOHN H. COSTELLO (53), is Assistant Treasurer of Fidelity
Intermediate Bond Fund. Mr. Costello also serves as Assistant
Treasurer of other Fidelity funds and is an employee of FMR.
THOMAS J. SIMPSON (41), is Assistant Treasurer of Fidelity
Intermediate Bond Fund(1998). Mr. Simpson is Assistant Treasurer
of Fidelity's Fixed-Income Funds (1998) and an employee of FMR (1996).
Prior to joining FMR, Mr. Simpson was Vice President and Fund
Controller of Liberty Investment Services (1987-1995).
The following table sets forth information describing the compensation
of each Trustee and Member of the Advisory Board of the fund for his
or her services for the fiscal year ended April 30, 2000, or calendar
year ended December 31, 1999, as applicable.
<TABLE>
<CAPTION>
<S> <C> <C>
COMPENSATION TABLE
Trustees and Members of the Aggregate Compensation from Total Compensation from the
Advisory Board Intermediate Bond [B,]C Fund Complex* A
Edward C. Johnson 3d ** $ 0 $ 0
J. Michael Cook ***** $ 0
Ralph F. Cox $ $ 217,500
Phyllis Burke Davis $ $ 211,500
Robert M. Gates $ $ 217,500
E. Bradley Jones**** $ $ 217,500
Donald J. Kirk $ $ 217,500
Ned C. Lautenbach *** $ 0 $ 54,000
Peter S. Lynch ** $ 0 $ 0
William O. McCoy $ $ 214,500
Gerald C. McDonough $ $ 269,000
Marvin L. Mann $ $ 217,500
Robert C. Pozen** $ 0 $ 0
Thomas R. Williams $ $213,000
</TABLE>
* Information is for the calendar year ended December 31, 1999 for 236
funds in the complex.
** Interested Trustees of the fund are compensated by FMR.
*** During the period from October 14, 1999 through December 31, 1999,
Mr. Lautenbach served as a Member of the Advisory Board. Effective
January 1, 2000, Mr. Lautenbach serves as a Member of the Board of
Trustees.
**** Mr. Jones served on the Board of Trustees through December 31,
1999.
***** Effective March 16, 2000, Mr. Cook serves as a Member of the
Advisory Board.
A Compensation figures include cash, amounts required to be deferred,
and may include amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1999, 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, $53,735; William O. McCoy, $53,735; and Thomas
R. Williams, $62,319.
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: Ralph F. Cox, $__; Phyllis Burke Davis,
$__;Robert M. Gates, $__; E. Bradley Jones, $__; Donald J. Kirk,
$__;William O. McCoy, $__; Gerald C. McDonough, $__; Marvin L. Mann,
$__; and Thomas R. Williams, $__.
D Certain of the non-interested Trustees' aggregate compensation from
the fund includes accrued voluntary deferred compensation as follows:
[_____, $____;] [_____, $_____;] [_______, $______].
Under a deferred compensation plan adopted in September 1995 and
amended in November 1996 and January 2000 (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 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.
[[ As of April 30, 2000, approximately __% of the fund's total
outstanding shares was held by [FMR] [[and] [an] FMR affiliate[s]].
FMR Corp. is the ultimate parent company of [FMR] [[and] [this/these]
FMR affiliate[s]]. By virtue of their ownership interest in FMR Corp.,
as described in the "Control of Investment Advisers" section on page
19, Mr. Edward C. Johnson 3d, President and Trustee of the fund, and
Ms. Abigail P. Johnson, of the fund, may be deemed to be a beneficial
owner of these shares. As of the above date, with the exception of Mr.
Johnson 3d's and Ms. Johnson's deemed ownership of the fund's shares,
the Trustees, Members of the Advisory Board, and officers of the fund
owned, in the aggregate, less than __% of the fund's total outstanding
shares.]]
[As of April 30, 2000, the Trustees, Members of the Advisory Board,
and officers of the fund owned, in the aggregate, less than __% of the
fund's total outstanding shares.]
[As of April 30, 2000, the following owned of record or beneficially
5% or more (up to and including 25%) of the fund's outstanding
shares:]
[As of April 30, 2000, approximately ____% of the fund's total
outstanding shares were held by_______.]
[A shareholder owning of record or beneficially more than 25% of a
fund's outstanding shares may be considered a controlling person. That
shareholder's vote could have a more significant effect on matters
presented at a shareholders' meeting than votes of other
shareholders.]
CONTROL OF INVESTMENT ADVISERS
FMR Corp., organized in 1972, is the ultimate parent company of FMR,
Fidelity Investments Money Management, Inc. (FIMM), Fidelity
Management & Research (U.K.) Inc. (FMR U.K.), and Fidelity Management
& Research (Far East) Inc. (FMR Far East). The voting common stock of
FMR Corp. is divided into two classes. Class B is held predominantly
by members of the Edward C. Johnson 3d family and is entitled to 49%
of the vote on any matter acted upon by the voting common stock. Class
A is held predominantly by non-Johnson family member employees of FMR
Corp. and its affiliates and is entitled to 51% of the vote on any
such matter. The Johnson family group and all other Class B
shareholders have entered into a shareholders' voting agreement under
which all Class B shares will be voted in accordance with the majority
vote of Class B shares. Under the 1940 Act, control of a company is
presumed where one individual or group of individuals owns more than
25% of the voting stock of that company. Therefore, through their
ownership of voting common stock and the execution of the
shareholders' voting agreement, members of the Johnson family may be
deemed, under the 1940 Act, to form a controlling group with respect
to FMR Corp.
At present, the principal operating activities of FMR Corp. are
those conducted by its division, Fidelity Investments Retail Marketing
Company, which provides marketing services to various companies within
the Fidelity organization.
Fidelity International Limited (FIL), a Bermuda company formed in
1968, is the ultimate parent company of Fidelity Investments Japan
Limited (FIJ), Edward C. Johnson 3d, Johnson family members, and
various trusts for the benefit of the Johnson family own, directly or
indirectly, more than 25% of the voting common stock of FIL. FIL
provides investment advisory services to non-U.S. investment companies
and institutional investors investing in securities throughout the
world.
The fund, FMR, FIMM, FMR U.K., FMR Far East, FIJ and FDC have
adopted a code of ethics under Rule 17j-1 of the Investment Company
Act of 1940 that sets forth employees' fiduciary responsibilities
regarding the fund, establishes procedures for personal investing, and
restricts certain transactions. Employees subject to the code of
ethics, including Fidelity investment personnel, may invest in
securities for their own investment accounts, including securities
that may be purchased or held by the fund.
MANAGEMENT CONTRACT
The fund has entered into a management contract with FMR, pursuant to
which FMR furnishes investment advisory and other services.
MANAGEMENT SERVICES. Under the terms of its management contract with
the fund, FMR acts as investment adviser and, subject to the
supervision of the Board of Trustees, directs the investments of the
fund in accordance with its investment objective, policies and
limitations. FMR also provides the fund with all necessary office
facilities and personnel for servicing the fund's investments,
compensates all officers of the fund and all Trustees who are
"interested persons" of the trust or of FMR, and all personnel of the
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 the fund. These services include
providing facilities for maintaining the fund's organization;
supervising relations with custodians, transfer and pricing agents,
accountants, underwriters and other persons dealing with the fund;
preparing all general shareholder communications and conducting
shareholder relations; maintaining the fund's records and the
registration of the fund's shares under federal securities laws and
making necessary filings under state securities laws; developing
management and shareholder services for the fund; and furnishing
reports, evaluations and analyses on a variety of subjects to the
Trustees.
MANAGEMENT-RELATED EXPENSES. In addition to the management
fee payable to FMR and the fees payable to the transfer, dividend
disbursing, and shareholder servicing agent, pricing and bookkeeping
agent, and the costs associated with securities lending , as
applicable, the fund pays all of its expenses that are not assumed by
those parties. The fund pays for the typesetting, printing, and
mailing of its proxy materials to shareholders, legal expenses, and
the fees of the custodian, auditor, and non-interested Trustees. The
fund's management contract further provides that the fund will pay for
typesetting, printing, and mailing prospectuses, statements of
additional information, notices, and reports to shareholders; however,
under the terms of the fund's transfer agent agreement, the transfer
agent bears the costs of providing these services to existing
shareholders. Other expenses paid by the fund include interest, taxes,
brokerage commissions, the fund's proportionate share of insurance
premiums and Investment Company Institute dues, and the costs of
registering shares under federal securities laws and making necessary
filings under state securities laws. The 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.
MANAGEMENT FEE. For the services of FMR under the 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Assets Annualized Rate Group Net Assets Effective Annual Fee Rate
0 - $3 billion .3700% $ 1 billion .3700%
3 - 6 .3400 50 .2188
6 - 9 .3100 100 .1869
9 - 12 .2800 150 .1736
12 - 15 .2500 200 .1652
15 - 18 .2200 250 .1587
18 - 21 .2000 300 .1536
21 - 24 .1900 350 .1494
24 - 30 .1800 400 .1459
30 - 36 .1750 450 .1427
36 - 42 .1700 500 .1399
42 - 48 .1650 550 .1372
48 - 66 .1600 600 .1349
66 - 84 .1550 650 .1328
84 - 120 .1500 700 .1309
120 - 156 .1450 750 .1291
156 - 192 .1400 800 .1275
192 - 228 .1350 850 .1260
228 - 264 .1300 900 .1246
264 - 300 .1275 950 .1233
300 - 336 .1250 1,000 .1220
336 - 372 .1225 1,050 .1209
372 - 408 .1200 1,100 .1197
408 - 444 .1175 1,150 .1187
444 - 480 .1150 1,200 .1177
480 - 516 .1125 1,250 .1167
516 - 587 .1100 1,300 .1158
587 - 646 .1080 1,350 .1149
646 - 711 .1060 1,400 .1141
711 - 782 .1040
782 - 860 .1020
860 - 946 .1000
946 - 1,041 .0980
1,041 - 1,145 .0960
1,145 - 1,260 .0940
Over 1,260 .0920
</TABLE>
The group fee rate is calculated on a cumulative basis pursuant to the
graduated fee rate schedule shown above on the left. The schedule
above on the right shows 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
rate at $____ billion of group net assets - the approximate level for
April 2000 - was ____%, which is the weighted average of the
respective fee rates for each level of group net assets up to $___
billion.
The fund's individual fund fee rate is 0.30%. Based on the average
group net assets of the funds advised by FMR for April 2000, the
fund's annual management fee rate would be calculated as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Group Fee Rate Individual Fund Fee Rate Management Fee Rate
Intermediate Bond 0.___% + 0.30% = 0.___%
</TABLE>
One-twelfth of the management fee rate is applied to the fund's
average net assets for the month, giving a dollar amount which is the
fee for that month.
For the fiscal years ended April 30, 2000, 1999, and 1998, the fund
paid FMR management fees of $______, $_______, and $______,
respectively.
FMR may, from time to time, voluntarily reimburse all or a portion of
the fund's operating expenses (exclusive of interest, taxes,
certain securities lending costs , brokerage commissions, and
extraordinary expenses), which is subject to revision or
discontinuance. 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.
Expense reimbursements by FMR will increase the fund's returns and
yield, and repayment of the reimbursement by the fund will lower its
returns and yield.
SUB-ADVISERS. FMR has entered into a sub-advisory agreement with FIMM
pursuant to which FIMM has primary responsibility for choosing
investments for the fund.
Under the terms of the sub-advisory agreement, FMR pays FIMM fees
equal to 50% of the management fee payable to FMR under its management
contract with the 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.
On behalf of the fund, for the fiscal year ended April 30, 2000 and
1999, FMR paid FIMM a fee of $_____ and $_____, respectively.
On behalf of Intermediate Bond, FMR has entered into sub-advisory
agreements with FMR U.K., and FMR Far East. Pursuant to the
sub-advisory agreements, FMR may receive from the sub-advisers
investment research and advice on issuers outside the United States
and FMR may grant the sub-advisers investment management authority as
well as the authority to buy and sell securities if FMR believes it
would be beneficial to the fund.
On behalf of the fund, FMR Far East has entered into a sub-advisory
agreement with FIJ pursuant to which FMR Far East may receive from FIJ
investment research and advice relating to Japanese issuers (and such
other Asian issuers as FMR Far East may designate).
For providing non-discretionary investment advice and research
services the sub-advisers are compensated as follows:
(small solid bullet) 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.
(small solid bullet) FMR Far East pays FIJ a fee equal to 100% of
FIJ's costs incurred in connection with providing investment advice
and research services for a fund to FMR Far East.
For providing discretionary investment management and executing
portfolio transactions, the sub-advisers are compensated as follows:
(small solid bullet) FMR pays FMR U.K. and FMR Far East a fee equal to
50% of its monthly management fee with respect to the fund's average
net assets managed by the sub-adviser on a discretionary basis.
[For investment advice and research services, no fees were paid to FMR
U.K. or FMR Far East on behalf of the fund for the past three fiscal
years.]
[For providing investment advice and research services, fees paid to
[FMR U.K./FMR Far East] for the past three fiscal years are shown in
the table below.]
Fiscal Year Ended April 30 FMR U.K. FMR Far East
2000 $ $
1999 $ $
1998 $ $
[For discretionary investment management and execution of portfolio
transactions, no fees were paid to [FMR U.K/FMR Far East] on behalf of
the fund for the past three fiscal years.]
[For discretionary investment management and execution of portfolio
transactions, fees paid to [FMR U.K/FMR Far East] for the past three
fiscal years are shown in the table below.]
Fiscal Year Ended April 30 FMR U.K. FMR Far East
2000 $ $
1999 $ $
1998 $ $
[No fees were paid to [FMR U.K./FMR Far East] on behalf of the fund
for the past three fiscal years.]
DISTRIBUTION SERVICES
The fund has entered into a distribution agreement with FDC, an
affiliate of FMR. FDC is a broker-dealer registered under the
Securities Exchange Act of 1934 and a member of the National
Association of Securities Dealers, Inc. The 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 NAV. Promotional and administrative expenses
in connection with the offer and sale of shares are paid by FMR.
The Trustees have approved a Distribution and Service Plan on behalf
of the fund pursuant to Rule 12b-1 under the 1940 Act (the Rule). The
Rule provides in substance that a mutual fund may not engage directly
or indirectly in financing any activity that is primarily intended to
result in the sale of shares of the fund except pursuant to a plan
approved on behalf of the fund under the Rule. The Plan, as approved
by the Trustees, allows the fund and FMR to incur certain expenses
that might be considered to constitute indirect payment by the fund of
distribution expenses.
Under the Plan, if the payment of management fees by the fund to FMR
is deemed to be indirect financing by the fund of the distribution of
its shares, such payment is authorized by the Plan. The Plan
specifically recognizes that FMR may use its management fee revenue,
as well as its past profits or its other resources, to pay FDC for
expenses incurred in connection with providing services intended to
result in the sale of fund shares and/or shareholder support services.
In addition, the Plan provides that FMR, directly or through FDC, may
pay intermediaries, such as banks, broker-dealers and other
service-providers, that provide those services. Currently, the Board
of Trustees has authorized such payments for Intermediate Bond shares.
Prior to approving the Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and
determined that there is a reasonable likelihood that the Plan will
benefit the fund and its shareholders. In particular, the Trustees
noted that the Plan does not authorize payments by the fund other than
those made to FMR under its management contract with the fund. To the
extent that the Plan gives FMR and FDC greater flexibility in
connection with the distribution of fund shares, additional sales of
fund shares or stabilization of cash flows may result. Furthermore,
certain shareholder support services may be provided more effectively
under the Plan by local entities with whom shareholders have other
relationships.
The Glass-Steagall Act generally prohibits federally and state
chartered or supervised banks from directly engaging in the business
of underwriting, selling or distributing securities. FDC believes
that the Glass-Steagall Act should not preclude a bank from performing
shareholder support services, or servicing and recordkeeping
functions. FDC intends to engage banks only to perform such
functions. However, changes in federal or state statutes and
regulations pertaining to the permissible activities o f banks, as
well as further judicial or administrative decisions or
interpretations, could prevent a bank from continuing to perform all
or a part of the contemplated services. If a bank were prohibited
from so acting, the Trustees would consider what actions, if any,
would be necessary to continue to provide efficient and effective
shareholder services. In such event, changes in the operation of the
fund might occur, including possible termination of any automatic
investment or redemption or other services then provided by the bank.
It is not expected that shareholders would suffer any adverse
financial consequences as a result of any of these occurrences. In
addition, state securities laws on this issue may differ from the
interpretations of federal law expressed herein, and banks and other
financial institutions may be required to register as dealers pursuant
to state law.
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.
FDC may compensate intermediaries that satisfy certain criteria
established from time to time by FDC relating to the level or type of
services provided by the intermediary, the sale or expected sale of
significant amounts of shares, or other factors.
TRANSFER AND SERVICE AGENT AGREEMENTS
The fund has entered into a transfer agent agreement with FSC, an
affiliate of FMR. Under the terms of the agreement, FSC performs
transfer agency, dividend disbursing, and shareholder services for the
fund.
For providing transfer agency services, FSC receives an account fee
and an asset-based fee each paid monthly with respect to each account
in the fund. For retail accounts and certain institutional accounts,
these fees are based on account size and fund type. For certain
institutional retirement accounts, these fees are based on fund type.
For certain other institutional retirement accounts, these fees are
based on account type and fund type. The account fees are subject to
increase based on postage rate changes.
FSC also collects small account fees from certain accounts with
balances of less than $2,500.
In addition, FSC receives the pro rata portion of the transfer agency
fees applicable to shareholder accounts in a qualified state tuition
program (QSTP), as defined under the Small Business Job Protection Act
of 1996, managed by FMR or an affiliate and in each Fidelity Freedom
Fund and Fidelity Four-in-One Index Fund, funds of funds managed by an
FMR affiliate, according to the percentage of the QSTP's, Freedom
Fund's or Fidelity Four-in-One Index Fund's assets that is invested in
the fund, subject to certain limitations in the case of Fidelity
Four-in-One Index Fund.
FSC pays out-of-pocket expenses associated with providing transfer
agent services. In addition, FSC bears the expense of typesetting,
printing, and mailing prospectuses, statements of additional
information, and all other reports, notices, and statements to
existing shareholders, with the exception of proxy statements.
The fund has also entered into a service agent agreement with FSC.
Under the terms of the agreement, FSC calculates the NAV and dividends
for the fund, maintains the fund's portfolio and general accounting
records, and administers the fund's securities lending program.
For providing pricing and bookkeeping services, FSC receives a monthly
fee based on the fund's average daily net assets throughout the month.
The annual rates for pricing and bookkeeping services for the fund are
0.0275% of the first $500 million of average net assets, 0.0175% of
average net assets between $500 million and $3 billion, 0.0021% of
average net assets between $3 billion and $25 billion, and 0.00075% of
average net assets in excess of $25 billion. The fee, not including
reimbursement for out-of-pocket expenses, is limited to a minimum of
$60,000 per year.
For the fiscal years ended April 30, 2000, 1999, and 1998, the fund
paid FSC pricing and bookkeeping fees, including reimbursement for
related out-of-pocket expenses, of $_____, $708,000, and $750,000,
respectively.
For administering the fund's securities lending program, FSC is paid
based on the number and duration of individual securities loans.
[For the fiscal years ended April 30, 2000, 1999, and 1998, the
fund did not pay FSC for securities lending.]
[For the fiscal years ended April 30, 2000, 1999, and 1998, the
fund paid FSC $___, $____, and $____, respectively, for securities
lending.]
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Fidelity Intermediate Bond Fund is a fund of
Fidelity Commonwealth Trust, an open-end management investment company
organized as a Massachusetts business trust on November 8, 1974. On
February 10, 2000, Spartan 500 Index Fund changed its name from
Spartan Market Index Fund to Spartan 500 Index Fund. On April 18,
1997, Spartan 500 Index Fund changed its name from Fidelity Market
Index Fund to Spartan Market Index Fund. Currently, there are 5
funds in the trust: Fidelity Intermediate Bond Fund, Fidelity Large
Cap Stock Fund, Fidelity Mid-Cap Stock Fund, Fidelity Small Cap Stock
Fund and Spartan 500 Index Fund. The Trustees are permitted to create
additional funds in the trust.
The assets of the trust received for the issue or sale of shares of
each fund and all income, earnings, profits, and proceeds thereof,
subject to the rights of creditors, are allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets
of each fund in the trust shall be charged with the liabilities and
expenses attributable to such fund. Any general expenses of the trust
shall be allocated between or among any one or more of the funds.
SHAREHOLDER LIABILITY. The trust is an entity commonly known as a
"Massachusetts business trust." Under Massachusetts law, shareholders
of such a trust may, under certain circumstances, be held personally
liable for the obligations of the trust.
The Declaration of Trust contains an express disclaimer of
shareholder liability for the debts, liabilities, obligations, and
expenses of the trust or fund. The Declaration of Trust provides that
the trust shall not have any claims against shareholders except for
the payment of the purchase price of shares and requires that each
agreement, obligation, or instrument entered into or executed by the
trust or the Trustees relating to the trust or to a fund shall
include a provision limiting the obligations created thereby to the
trust or to one or more funds and its or their assets. The Declaration
of Trust further provides that shareholders of a fund shall not have a
claim on or a right to any assets belonging to any other fund.
The Declaration of Trust provides for indemnification out of each
fund's property of any shareholder or former shareholder held
personally liable for the obligations of the fund solely by reason of
his or her being or having been a shareholder and not because of his
or her acts or omissions or for some other reason. The Declaration of
Trust also provides that each fund shall, upon request, assume the
defense of any claim made against any shareholder for any act or
obligation of the fund and satisfy any judgment thereon. Thus, the
risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which a fund
itself would be unable to meet its obligations. FMR believes that, in
view of the above, the risk of personal liability to shareholders is
remote.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. As a shareholder, you are entitled to one vote for each
dollar of net asset value that you own. The voting rights of
shareholders can be changed only by a shareholder vote. Shares may be
voted in the aggregate, by fund and by class.
The shares have no preemptive or conversion rights. Shares are fully
paid and nonassessable, except as set forth under the heading
"Shareholder Liability" above.
The trust or a fund may be terminated upon the sale of its assets
to, or merger with, another open-end management investment company or
series thereof, or upon liquidation and distribution of its assets.
Generally, the merger of the trust or a fund with another operating
mutual fund or the sale of substantially all of the assets of the
trust or a fund to another operating mutual fund requires approval by
a vote of shareholders of the trust or the fund. The Trustees may,
however, reorganize or terminate the trust or a fund without prior
shareholder approval. In the event of the dissolution or liquidation
of the trust, shareholders of each of its funds are entitled to
receive the underlying assets of such fund available for distribution.
In the event of the dissolution or liquidation of a fund, shareholders
of that fund are entitled to receive the underlying assets of the fund
available for distribution.
CUSTODIAN. The Bank of New York, 110 Washington Street, New York, New
York, is custodian of the assets of the fund. The custodian is
responsible for the safekeeping of a fund's assets and the appointment
of any subcustodian banks and clearing agencies. The Chase Manhattan
Bank, headquartered in New York, also may serve as a special purpose
custodian of certain assets in connection with repurchase agreement
transactions.
FMR, its officers and directors, its affiliated companies, and members
of the Board of Trustees may, from time to time, conduct transactions
with various banks, including banks serving as custodians for certain
funds advised by FMR. Transactions that have occurred to date include
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.
AUDITOR. __________, serves as independent accountant for the fund.
The auditor examines financial statements for the fund and provides
other audit, tax, and related services.
FINANCIAL STATEMENTS
The fund's financial statements and financial highlights for the
fiscal year ended April 30, 2000, and report of the auditor, are
included in the fund's annual report and are incorporated herein by
reference.
APPENDIX
Fidelity, Fidelity Investments & (Pyramid) Design, Fidelity Focus,
Fidelity Investments and Magellan are registered trademarks of FMR
Corp.
The third party marks appearing above are the marks of their
respective owners.
Like securities of all mutual
funds, these securities have
not been approved or
disapproved by the
Securities and Exchange
Commission, and the
Securities and Exchange
Commission has not
determined if this
prospectus is accurate or
complete. Any
representation to the
contrary is a criminal
offense.
FIDELITY(registered trademark)
SMALL CAP STOCK
FUND
(fund number 340, trading symbol FSLCX)
FIDELITY
MID-CAP STOCK
FUND
(fund number 337, trading symbol FMCSX)
FIDELITY
LARGE CAP STOCK
FUND
(fund number 338, trading symbol FLCSX)
PROSPECTUS
JUNE 24, 2000
(fidelity_logo_graphic)(registered trademark)
82 Devonshire Street, Boston, MA 02109
CONTENTS
FUND SUMMARY 3 INVESTMENT SUMMARY
4 PERFORMANCE
5 FEE TABLE
FUND BASICS 7 INVESTMENT DETAILS
8 VALUING SHARES
SHAREHOLDER INFORMATION 9 BUYING AND SELLING SHARES
16 EXCHANGING SHARES
16 ACCOUNT FEATURES AND POLICIES
19 DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS
19 TAX CONSEQUENCES
FUND SERVICES 19 FUND MANAGEMENT
20 FUND DISTRIBUTION
APPENDIX 21 FINANCIAL HIGHLIGHTS
21 ADDITIONAL PERFORMANCE
INFORMATION
FUND SUMMARY
INVESTMENT SUMMARY
INVESTMENT OBJECTIVE
SMALL CAP STOCK FUND seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
Fidelity Management & Research Company (FMR)'s principal investment
strategies include:
(small solid bullet) Normally investing at least 65% of total assets
in common stocks of companies with small market capitalizations (those
with market capitalizations similar to companies in the Russell
2000(registered trademark)).
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Investing in either "growth" stocks or "value"
stocks or both.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets can be more
volatile than the U.S. market due to increased risks of adverse
issuer, political, regulatory, market or economic developments and can
perform differently from the U.S. market.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently from
the value of the market as a whole.
(small solid bullet) SMALL CAP INVESTING. The value of securities of
smaller, less well-known issuers can perform differently from the
market as a whole and other types of stocks and can be more volatile
than that of larger issuers.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE
MID-CAP STOCK FUND seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
FMR's principal investment strategies include:
(small solid bullet) Normally investing at least 65% of total assets
in common stocks of companies with medium market capitalizations
(those with market capitalizations similar to companies in the S&P
MidCap 400(registered trademark)).
(small solid bullet) Potentially investing in companies with smaller
or larger market capitalizations.
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Investing in either "growth" stocks or "value"
stocks or both.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets can be more
volatile than the U.S. market due to increased risks of adverse
issuer, political, regulatory, market or economic developments and can
perform differently from the U.S. market.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently from
the value of the market as a whole. The value of securities of smaller
issuers can be more volatile than that of larger issuers.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE
LARGE CAP STOCK FUND seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
FMR's principal investment strategies include:
(small solid bullet) Normally investing at least 65% of total assets
in common stocks of companies with large market capitalizations (over
$1 billion).
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Investing in either"growth" stocks or "value"
stocks or both.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets can be more
volatile than the U.S. market due to increased risks of adverse
issuer, political, regulatory, market or economic developments and can
perform differently from the U.S. market.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently from
the value of the market as a whole.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
PERFORMANCE
The following information illustrates Small Cap Stock's performance
over the past year and the changes in Mid-Cap Stock's and Large Cap
Stock's performance from year to year and compares each fund's
performance to the performance of a market index and an average of the
performance of similar funds over various periods of time. Returns are
based on past results and are not an indication of future performance.
YEAR-BY-YEAR RETURNS
SMALL CAP STOCK
Calendar Years 1999
%
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: nil
Row: 7, Col: 1, Value: nil
Row: 8, Col: 1, Value: nil
Row: 9, Col: 1, Value: nil
Row: 10, Col: 1, Value: nil
DURING THE PERIOD SHOWN IN THE CHART FOR SMALL CAP STOCK, THE HIGHEST
RETURN FOR A QUARTER WAS __% (QUARTER ENDED _____) AND THE LOWEST
RETURN FOR A QUARTER WAS __% (QUARTER ENDED ______).
THE YEAR-TO-DATE RETURN AS OF MARCH 31, 2000 FOR SMALL CAP STOCK WAS
__%.
MID-CAP STOCK
Calendar Years 1995 1996 1997 1998 1999
% % % % %
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: nil
Row: 7, Col: 1, Value: nil
Row: 8, Col: 1, Value: nil
Row: 9, Col: 1, Value: nil
Row: 10, Col: 1, Value: nil
DURING THE PERIODS SHOWN IN THE CHART FOR MID-CAP STOCK, THE HIGHEST
RETURN FOR A QUARTER WAS __% (QUARTER ENDED _____) AND THE LOWEST
RETURN FOR A QUARTER WAS __% (QUARTER ENDED _____).
THE YEAR-TO-DATE RETURN AS OF MARCH 31, 2000 FOR MID-CAP STOCK WAS
__%.
LARGE CAP STOCK
Calendar Years 1996 1997 1998 1999
% % % %
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: nil
Row: 7, Col: 1, Value: nil
Row: 8, Col: 1, Value: nil
Row: 9, Col: 1, Value: nil
Row: 10, Col: 1, Value: nil
DURING THE PERIODS SHOWN IN THE CHART FOR LARGE CAP STOCK, THE HIGHEST
RETURN FOR A QUARTER WAS __% (QUARTER ENDED ____) AND THE LOWEST
RETURN FOR A QUARTER WAS __% (QUARTER ENDED ______).
THE YEAR-TO-DATE RETURN AS OF MARCH 31, 2000 FOR LARGE CAP STOCK WAS
__%.
AVERAGE ANNUAL RETURNS
For the periods ended Past 1 year Past 5 years Life of fund
December 31, 1999
Small Cap Stock % n/a %A
Russell 2000 % n/a %A
Lipper Small Cap Funds Average % n/a %A
Mid-Cap Stock % % %B
S&P MidCap 400 % % %B
Lipper Mid-Cap Funds Average % % %B
Large Cap Stock % % %C
S&P 500 % % %C
Lipper Growth Funds Average % % %C
A FROM MARCH 12, 1998.
B FROM MARCH 29, 1994.
C FROM JUNE 22, 1995.
[If FMR had not reimbursed certain fund expenses during these periods,
_________'s returns would have been lower.]
Standard & Poor's 500 IndexSM (S&P 500(registered trademark)) is a
market capitalization-weighted index of common stocks.
Standard & Poor's MidCap 400 Index is a market capitalization-weighted
index of 400 medium-capitalization stocks.
Russell 2000 Index is a market capitalization-weighted index of 2,000
small company stocks.
Each Lipper Funds Average reflects the performance (excluding sales
charges) of mutual funds with similar objectives.
FEE TABLE
The following table describes the fees and expenses that are incurred
when you buy, hold, or sell shares of a fund. [The annual fund
operating expenses provided below for ____________ are based on
historical expenses, adjusted to reflect current fees.] [The annual
fund operating expenses provided below for ________________ do not
reflect the effect of any [expense reimbursements] [[or] reduction of
certain expenses] during the period.] [The annual fund operating
expenses provided below for _______________ are based on historical
expenses.]
SHAREHOLDER FEES (PAID BY THE INVESTOR DIRECTLY)
Sales charge (load) on None
purchases and reinvested
distributions
Deferred sales charge (load) None
on redemptions
Redemption fee on shares
held less than three years
(as a % of amount redeemed)
for Small Cap Stock only 2.00%
Annual account maintenance $12.00
fee (for accounts under
$2,500)
ANNUAL FUND OPERATING EXPENSES (PAID FROM FUND ASSETS)
SMALL CAP STOCK Management fee %
Distribution and Service None
(12b-1) fee
Other expenses %
Total annual fund operating %
expenses A
MID-CAP STOCK Management fee %
Distribution and Service None
(12b-1) fee
Other expenses %
Total annual fund operating %
expenses
LARGE CAP STOCK Management fee %
Distribution and Service None
(12b-1) fee
Other expenses %
Total annual fund operating %
expenses
[A portion of the brokerage commissions that a fund pays is used to
reduce that fund's expenses. [In addition,] [T/t]hrough arrangements
with each fund's [custodian] [and] [transfer agent], credits realized
as a result of uninvested cash balances are used to reduce [custodian]
[and] [transfer agent] expenses. Including [this/these] reduction[s],
the total fund operating expenses [, after reimbursement for Small Cap
Stock,] would have been __% for Small Cap Stock, __% for Mid-Cap
Stock, and __% for Large Cap Stock.]
This EXAMPLE helps you compare the cost of investing in the funds with
the cost of investing in other mutual funds.
Let's say, hypothetically, that each fund's annual return is 5% and
that your shareholder fees and each fund's annual operating expenses
are exactly as described in the fee table. This example illustrates
the effect of fees and expenses, but is not meant to suggest actual or
expected fees and expenses or returns, all of which may vary. For
every $10,000 you invested, here's how much you would pay in total
expenses if you close your account at the end of each time period
indicated and if you leave your account open:
Account open Account closed
SMALL CAP STOCK 1 year $ $
3 years $ $
5 years $ $
10 years $ $
MID-CAP STOCK 1 year $ $
3 years $ $
5 years $ $
10 years $ $
LARGE CAP STOCK 1 year $ $
3 years $ $
5 years $ $
10 years $ $
FUND BASICS
INVESTMENT DETAILS
INVESTMENT OBJECTIVE
SMALL CAP STOCK FUND seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests at least 65% of the fund's total assets in common
stocks of companies with small market capitalizations. Small market
capitalization companies are those whose market capitalization is
similar to the market capitalization of companies in the Russell 2000
at the time of the fund's investment. Companies whose capitalization
no longer meets this definition after purchase continue to be
considered to have a small market capitalization for purposes of the
65% policy. As of April 30, 2000, the Russell 2000 included companies
with capitalizations between $___ million and $___ [m/b]illion. The
size of companies in the Russell 2000 changes with market conditions
and the composition of the index.
FMR may invest the fund's assets in securities of foreign issuers in
addition to securities of domestic issuers.
FMR is not constrained by any particular investment style. At any
given time, FMR may tend to buy "growth" stocks or "value" stocks, or
a combination of both types. In buying and selling securities for the
fund, FMR relies on fundamental analysis of each issuer and its
potential for success in light of its current financial condition, its
industry position, and economic and market conditions. Factors
considered include growth potential, earnings estimates, and
management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
INVESTMENT OBJECTIVE
MID-CAP STOCK FUND seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests at least 65% of the fund's total assets in common
stocks of companies with medium market capitalizations. Medium market
capitalization companies are those whose market capitalization is
similar to the market capitalization of companies in the S&P MidCap
400 at the time of the fund's investment. Companies whose
capitalization no longer meets this definition after purchase continue
to be considered to have a medium market capitalization for purposes
of the 65% policy. As of April 30, 2000, the S&P MidCap 400 included
companies with capitalizations between $__ million and $__
[m/b]illion. The size of companies in the S&P MidCap 400 changes with
market conditions and the composition of the index. FMR may also
invest the fund's assets in companies with smaller or larger market
capitalizations.
FMR may invest the fund's assets in securities of foreign issuers in
addition to securities of domestic issuers.
FMR is not constrained by any particular investment style. At any
given time, FMR may tend to buy "growth" stocks or "value" stocks, or
a combination of both types. In buying and selling securities for the
fund, FMR relies on fundamental analysis of each issuer and its
potential for success in light of its current financial condition, its
industry position, and economic and market conditions. Factors
considered include growth potential, earnings estimates, and
management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
INVESTMENT OBJECTIVE
LARGE CAP STOCK FUND seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests at least 65% of the fund's total assets in common
stocks of companies with large market capitalizations. FMR defines
large market capitalization companies as those with market
capitalizations of $1 billion or more at the time of the fund's
investment. Companies whose capitalization falls below this level
after purchase continue to be considered to have a large market
capitalization for purposes of the 65% policy.
FMR may invest the fund's assets in securities of foreign issuers in
addition to securities of domestic issuers.
FMR is not constrained by any particular investment style. At any
given time, FMR may tend to buy "growth" stocks or "value" stocks, or
a combination of both types. In buying and selling securities for the
fund, FMR relies on fundamental analysis of each issuer and its
potential for success in light of its current financial condition, its
industry position, and economic and market conditions. Factors
considered include growth potential, earnings estimates, and
management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
DESCRIPTION OF PRINCIPAL SECURITY TYPES
EQUITY SECURITIES represent an ownership interest, or the right to
acquire an ownership interest, in an issuer. Different types of equity
securities provide different voting and dividend rights and priority
in the event of the bankruptcy of the issuer. Equity securities
include common stocks, preferred stocks, convertible securities, and
warrants.
PRINCIPAL INVESTMENT RISKS
Many factors affect each fund's performance. A fund's share price
changes daily based on changes in market conditions and interest rates
and in response to other economic, political, or financial
developments. A fund's reaction to these developments will be affected
by the types of securities in which the fund invests, the financial
condition, industry and economic sector, and geographic location of an
issuer, and the fund's level of investment in the securities of that
issuer. When you sell your shares of a fund, they could be worth more
or less than what you paid for them.
The following factors can significantly affect a fund's performance:
STOCK MARKET VOLATILITY. The value of equity securities fluctuates in
response to issuer, political, market, and economic developments. In
the short term, equity prices can fluctuate dramatically in response
to these developments. Different parts of the market and different
types of equity securities can react differently to these
developments. For example, large cap stocks can react differently from
small cap stocks, and "growth" stocks can react differently from
"value" stocks. Issuer, political, or economic developments can affect
a single issuer, issuers within an industry or economic sector or
geographic region, or the market as a whole.
FOREIGN EXPOSURE. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations
can involve additional risks relating to political, economic, or
regulatory conditions in foreign countries. These risks include
fluctuations in foreign currencies; withholding or other taxes;
trading, settlement, custodial, and other operational risks; and the
less stringent investor protection and disclosure standards of some
foreign markets. All of these factors can make foreign investments,
especially those in emerging markets, more volatile and potentially
less liquid than U.S. investments. In addition, foreign markets can
perform differently from the U.S. market.
ISSUER-SPECIFIC CHANGES. Changes in the financial condition of an
issuer, changes in specific economic or political conditions that
affect a particular type of security or issuer, and changes in general
economic or political conditions can affect the value of an issuer's
securities.
SMALL CAP INVESTING. The value of securities of smaller, less
well-known issuers can be more volatile than that of larger issuers
and can react differently to issuer, political, market, and economic
developments than the market as a whole and other types of stocks.
Smaller issuers can have more limited product lines, markets and
financial resources.
In response to market, economic, political, or other conditions, FMR
may temporarily use a different investment strategy for defensive
purposes. If FMR does so, different factors could affect a fund's
performance and the fund may not achieve its investment objective.
FUNDAMENTAL INVESTMENT POLICIES
The policies discussed below are fundamental, that is, subject to
change only by shareholder approval.
LARGE CAP STOCK FUND seeks long-term growth of capital.
MID-CAP STOCK FUND seeks long-term growth of capital.
SMALL CAP STOCK FUND seeks long-term growth of capital.
VALUING SHARES
Each fund is open for business each day the New York Stock Exchange
(NYSE) is open.
Each fund's net asset value per share (NAV) is the value of a single
share. Fidelity normally calculates each fund's NAV as of the close of
business of the NYSE, normally 4:00 p.m. Eastern time. However, NAV
may be calculated earlier if trading on the NYSE is restricted or as
permitted by the Securities and Exchange Commission (SEC). Each fund's
assets are valued as of this time for the purpose of computing the
fund's NAV.
To the extent that each fund's assets are traded in other markets on
days when the NYSE is closed, the value of the fund's assets may be
affected on days when the fund is not open for business. In addition,
trading in some of a fund's assets may not occur on days when the fund
is open for business.
Each fund's assets are valued primarily on the basis of market
quotations. Certain short-term securities are valued on the basis of
amortized cost. If market quotations are not readily available for a
security or if a security's value has been materially affected by
events occurring after the close of the exchange or market on which
the security is principally traded (for example, a foreign exchange or
market), that security may be valued by another method that the Board
of Trustees believes accurately reflects fair value. A security's
valuation may differ depending on the method used for determining
value.
SHAREHOLDER INFORMATION
BUYING AND SELLING SHARES
GENERAL INFORMATION
Fidelity Investments(registered trademark) was established in 1946 to
manage one of America's first mutual funds. Today, Fidelity is the
largest mutual fund company in the country, and is known as an
innovative provider of high-quality financial services to individuals
and institutions.
In addition to its mutual fund business, the company operates one of
America's leading discount brokerage firms, Fidelity Brokerage
Services, Inc. (FBSI). Fidelity is also a leader in providing
tax-advantaged retirement plans for individuals investing on their own
or through their employer.
For account, product and service information, please use the following
web site and phone numbers:
(small solid bullet) For information over the Internet, visit
Fidelity's web site at www.fidelity.com.
(small solid bullet) For accessing account information automatically
by phone, use Fidelity Automated Service Telephone (FASTSM),
1-800-544-5555.
(small solid bullet) For exchanges, redemptions, and account
assistance, 1-800-544-6666.
(small solid bullet) For mutual fund and brokerage information,
1-800-544-6666.
(small solid bullet) For retirement information, 1-800-544-4774.
(small solid bullet) TDD - Service for the Deaf and Hearing-Impaired,
1-800-544-0118 (9:00 a.m. - 9:00 p.m. Eastern time).
Please use the following addresses:
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
OVERNIGHT EXPRESS
Fidelity Investments
2300 Litton Lane - KH1A
Hebron, KY 41048
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75039-5587
You may buy or sell shares of the funds through a retirement account
or an investment professional. If you invest through a retirement
account or an investment professional, the procedures for buying,
selling, and exchanging shares of a fund and the account features and
policies may differ. Additional fees may also apply to your investment
in a fund, including a transaction fee if you buy or sell shares of
the fund through a broker or other investment professional.
Certain methods of contacting Fidelity, such as by telephone or
electronically, may be unavailable or delayed (for example, during
periods of unusual market activity). In addition, the level and type
of service available may be restricted based on criteria established
by Fidelity.
The different ways to set up (register) your account with Fidelity are
listed in the following table.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
RETIREMENT
FOR TAX-ADVANTAGED RETIREMENT SAVINGS
(solid bullet) TRADITIONAL INDIVIDUAL RETIREMENT ACCOUNTS (IRAS)
(solid bullet) ROTH IRAS
(solid bullet) ROLLOVER IRAS
(solid bullet) 401(K) PLANS AND CERTAIN OTHER 401(A)-QUALIFIED PLANS
(solid bullet) KEOGH PLANS
(solid bullet) SIMPLE IRAS
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS)
(solid bullet) SALARY REDUCTION SEP-IRAS (SARSEPS)
(solid bullet) 403(B) CUSTODIAL ACCOUNTS
(solid bullet) DEFERRED COMPENSATION PLANS (457 PLANS)
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
TRUST
FOR MONEY BEING INVESTED BY A TRUST
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS OR
OTHER GROUPS
BUYING SHARES
The price to buy one share of each fund is the fund's NAV. Each fund's
shares are sold without a sales charge.
Your shares will be bought at the next NAV calculated after your
investment is received in proper form.
Short-term or excessive trading into and out of a fund may harm
performance by disrupting portfolio management strategies and by
increasing expenses. Accordingly, a fund may reject any purchase
orders, including exchanges, particularly from market timers or
investors who, in FMR's opinion, have a pattern of short-term or
excessive trading or whose trading has been or may be disruptive to
that fund. For these purposes, FMR may consider an investor's trading
history in that fund or other Fidelity funds, and accounts under
common ownership or control.
Each fund may stop offering shares completely or may offer shares only
on a limited basis, for a period of time or permanently.
When you place an order to buy shares, note the following:
(small solid bullet) All of your purchases must be made in U.S.
dollars and checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check,
each check must have a value of at least $50.
(small solid bullet) Fidelity reserves the right to limit the number
of checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will
be canceled and you could be liable for any losses or fees a fund or
Fidelity has incurred.
Certain financial institutions that have entered into sales agreements
with Fidelity Distributors Corporation (FDC) may enter confirmed
purchase orders on behalf of customers by phone, with payment to
follow no later than the time when a fund is priced on the following
business day. If payment is not received by that time, the order will
be canceled and the financial institution could be held liable for
resulting fees or losses.
MINIMUMS
TO OPEN AN ACCOUNT $2,500
For certain Fidelity retirement accountsA $500
TO ADD TO AN ACCOUNT $250
Through regular investment plans $100
MINIMUM BALANCE $2,000
For certain Fidelity retirement accountsA $500
A FIDELITY TRADITIONAL IRA, ROTH IRA, ROLLOVER IRA, SEP-IRA, AND KEOGH
ACCOUNTS.
There is no minimum account balance or initial or subsequent purchase
minimum for investments through Fidelity Portfolio Advisory
ServicesSM, a qualified state tuition program, certain Fidelity
retirement accounts funded through salary deduction, or accounts
opened with the proceeds of distributions from such retirement
accounts.
In addition, each fund may waive or lower purchase minimums in other
circumstances.
KEY INFORMATION
PHONE 1-800-544-6666 TO OPEN AN ACCOUNT
(small solid bullet) Exchange
from another Fidelity fund.
Call the phone number at left.
TO ADD TO AN ACCOUNT
(small solid bullet) Exchange
from another Fidelity fund.
Call the phone number at left.
(small solid bullet) Use
Fidelity Money
Line(registered trademark)
to transfer from your bank
account.
INTERNET WWW.FIDELITY.COM TO OPEN AN ACCOUNT
(small solid bullet) Complete
and sign the application.
Make your check payable to
the complete name of the
fund. Mail to the address
under "Mail" below.
TO ADD TO AN ACCOUNT
(small solid bullet) Exchange
from another Fidelity fund.
(small solid bullet) Use
Fidelity Money Line to
transfer from your bank
account.
MAIL FIDELITY INVESTMENTS TO OPEN AN ACCOUNT
P.O. BOX 770001 CINCINNATI, (small solid bullet) Complete
OH 45277-0002 and sign the application.
Make your check payable to
the complete name of the
fund. Mail to the address at
left.
TO ADD TO AN ACCOUNT
(small solid bullet) Make
your check payable to the
complete name of the fund.
Indicate your fund account
number on your check and
mail to the address at left.
(small solid bullet) Exchange
from another Fidelity fund.
Send a letter of instruction
to the address at left,
including your name, the
funds' names, the fund
account numbers, and the
dollar amount or number of
shares to be exchanged.
IN PERSON TO OPEN AN ACCOUNT
(small solid bullet) Bring
your application and check
to a Fidelity Investor
Center. Call 1-800-544-9797
for the center nearest you.
TO ADD TO AN ACCOUNT
(small solid bullet) Bring
your check to a Fidelity
Investor Center. Call
1-800-544-9797 for the
center nearest you.
WIRE TO OPEN AN ACCOUNT
(small solid bullet) Call
1-800-544-6666 to set up
your account and to arrange
a wire transaction.
(small solid bullet) Wire
within 24 hours to: Bankers
Trust Company, Bank Routing
# 021001033, Account #
00163053.
(small solid bullet) Specify
the complete name of the
fund and include your new
fund account number and your
name.
TO ADD TO AN ACCOUNT
(small solid bullet) Wire to:
Bankers Trust Company, Bank
Routing # 021001033, Account
# 00163053.
(small solid bullet) Specify
the complete name of the
fund and include your fund
account number and your name.
AUTOMATICALLY TO OPEN AN ACCOUNT
(small solid bullet) Not
available.
TO ADD TO AN ACCOUNT
(small solid bullet) Use
Fidelity Automatic Account
Builder(registered
trademark) or Direct Deposit.
(small solid bullet) Use
Fidelity Automatic Exchange
Service to exchange from a
Fidelity money market fund.
SELLING SHARES
The price to sell one share of Mid-Cap Stock or Large Cap Stock is the
fund's NAV. The price to sell one share of Small Cap Stock is the
fund's NAV, minus the redemption fee (trading fee), if applicable.
Small Cap Stock will deduct a trading fee of 2 .00% from the
redemption amount if you sell your shares after holding them less than
three years. This fee is paid to the fund rather than Fidelity, and is
designed to offset the brokerage commissions, market impact, and other
costs associated with fluctuations in fund asset levels and cash flow
caused by short-term shareholder trading.
If you bought shares on different days, the shares you held longest
will be redeemed first for purposes of determining whether the trading
fee applies. The trading fee does not apply to shares that were
acquired through reinvestment of distributions.
Your shares will be sold at the next NAV calculated after your order
is received in proper form, minus the trading fee, if applicable.
Certain requests must include a signature guarantee. It is designed to
protect you and Fidelity from fraud. Your request must be made in
writing and include a signature guarantee if any of the following
situations apply:
(small solid bullet) You wish to sell more than $100,000 worth of
shares;
(small solid bullet) Your account registration has changed within the
last 15 or 30 days, depending on your account;
(small solid bullet) The check is being mailed to a different address
than the one on your account (record address);
(small solid bullet) The check is being made payable to someone other
than the account owner; or
(small solid bullet) The redemption proceeds are being transferred to
a Fidelity account with a different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including Fidelity Investor Centers), dealer, credit union (if
authorized under state law), securities exchange or association,
clearing agency, or savings association. A notary public cannot
provide a signature guarantee.
When you place an order to sell shares, note the following:
(small solid bullet) If you are selling some but not all of your
shares, leave at least $2,000 worth of shares in the account to keep
it open ($500 for retirement accounts), except accounts not subject to
account minimums.
(small solid bullet) Normally, Fidelity will process redemptions by
the next business day, but Fidelity may take up to seven days to
process redemptions if making immediate payment would adversely affect
a fund.
(small solid bullet) Redemption proceeds (other than exchanges) may be
delayed until money from prior purchases sufficient to cover your
redemption has been received and collected. This can take up to seven
business days after a purchase.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays),
when trading on the NYSE is restricted, or as permitted by the SEC.
(small solid bullet) Redemption proceeds may be paid in securities or
other property rather than in cash if FMR determines it is in the best
interests of a fund.
(small solid bullet) You will not receive interest on amounts
represented by uncashed redemption checks.
(small solid bullet) Unless otherwise instructed, Fidelity will send a
check to the record address.
KEY INFORMATION
PHONE 1-800-544-6666 (small solid bullet) Call the
phone number at left to
initiate a wire transaction
or to request a check for
your redemption.
(small solid bullet) Use
Fidelity Money Line to
transfer to your bank account.
(small solid bullet) Exchange
to another Fidelity fund.
Call the phone number at left.
INTERNET WWW.FIDELITY.COM (small solid bullet) Exchange
to another Fidelity fund.
(small solid bullet) Use
Fidelity Money Line to
transfer to your bank account.
MAIL FIDELITY INVESTMENTS INDIVIDUAL, JOINT TENANT,
P.O. BOX 660602 DALLAS, TX SOLE PROPRIETORSHIP, UGMA,
75266-0602 UTMA
(small solid bullet) Send a
letter of instruction to the
address at left, including
your name, the fund's name,
your fund account number,
and the dollar amount or
number of shares to be sold.
The letter of instruction
must be signed by all
persons required to sign for
transactions, exactly as
their names appear on the
account.
RETIREMENT ACCOUNT
(small solid bullet) The
account owner should
complete a retirement
distribution form. Call
1-800-544-6666 to request one.
TRUST
(small solid bullet) Send a
letter of instruction to the
address at left, including
the trust's name, the fund's
name, the trust's fund
account number, and the
dollar amount or number of
shares to be sold. The
trustee must sign the letter
of instruction indicating
capacity as trustee. If the
trustee's name is not in the
account registration,
provide a copy of the trust
document certified within
the last 60 days.
BUSINESS OR ORGANIZATION
(small solid bullet) Send a
letter of instruction to the
address at left, including
the firm's name, the fund's
name, the firm's fund
account number, and the
dollar amount or number of
shares to be sold. At least
one person authorized by
corporate resolution to act
on the account must sign the
letter of instruction.
(small solid bullet) Include
a corporate resolution with
corporate seal or a
signature guarantee.
EXECUTOR, ADMINISTRATOR,
CONSERVATOR, GUARDIAN
(small solid bullet) Call
1-800-544-6666 for
instructions.
IN PERSON INDIVIDUAL, JOINT TENANT,
SOLE PROPRIETORSHIP, UGMA,
UTMA
(small solid bullet) Bring a
letter of instruction to a
Fidelity Investor Center.
Call 1-800-544-9797 for the
center nearest you. The
letter of instruction must
be signed by all persons
required to sign for
transactions, exactly as
their names appear on the
account.
RETIREMENT ACCOUNT
(small solid bullet) The
account owner should
complete a retirement
distribution form. Visit a
Fidelity Investor Center to
request one. Call
1-800-544-9797 for the
center nearest you.
TRUST
(small solid bullet) Bring a
letter of instruction to a
Fidelity Investor Center.
Call 1-800-544-9797 for the
center nearest you. The
trustee must sign the letter
of instruction indicating
capacity as trustee. If the
trustee's name is not in the
account registration,
provide a copy of the trust
document certified within
the last 60 days.
BUSINESS OR ORGANIZATION
(small solid bullet) Bring a
letter of instruction to a
Fidelity Investor Center.
Call 1-800-544-9797 for the
center nearest you. At least
one person authorized by
corporate resolution to act
on the account must sign the
letter of instruction.
(small solid bullet) Include
a corporate resolution with
corporate seal or a
signature guarantee.
EXECUTOR, ADMINISTRATOR,
CONSERVATOR, GUARDIAN
(small solid bullet) Visit a
Fidelity Investor Center for
instructions. Call
1-800-544-9797 for the
center nearest you.
AUTOMATICALLY (small solid bullet) Use
Personal Withdrawal Service
to set up periodic
redemptions from your account.
EXCHANGING SHARES
An exchange involves the redemption of all or a portion of the shares
of one fund and the purchase of shares of another fund.
As a shareholder, you have the privilege of exchanging shares of a
fund for shares of other Fidelity funds.
However, you should note the following policies and restrictions
governing exchanges:
(small solid bullet) The fund you are exchanging into must be
available for sale in your state.
(small solid bullet) You may exchange only between accounts that are
registered in the same name, address, and taxpayer identification
number.
(small solid bullet) Before exchanging into a fund, read its
prospectus.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Each fund may temporarily or permanently
terminate the exchange privilege of any investor who makes more than
four exchanges out of the fund per calendar year. Accounts under
common ownership or control will be counted together for purposes of
the four exchange limit.
(small solid bullet) The exchange limit may be modified for accounts
held by certain institutional retirement plans to conform to plan
exchange limits and Department of Labor regulations. See your plan
materials for further information.
(small solid bullet) Each fund may refuse exchange purchases by any
person or group if, in FMR's judgment, the fund would be unable to
invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
The funds may terminate or modify the exchange privileges in the
future.
Other funds may have different exchange restrictions, and may impose
trading fees of up to 2 .00% of the amount exchanged. Check each
fund's prospectus for details.
ACCOUNT FEATURES AND POLICIES
FEATURES
The following features are available to buy and sell shares of the
funds.
AUTOMATIC INVESTMENT AND WITHDRAWAL PROGRAMS. Fidelity offers
convenient services that let you automatically transfer money into
your account, between accounts, or out of your account. While
automatic investment programs do not guarantee a profit and will not
protect you against loss in a declining market, they can be an
excellent way to invest for retirement, a home, educational expenses,
and other long-term financial goals. Automatic withdrawal or exchange
programs can be a convenient way to provide a consistent income flow
or to move money between your investments.
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FIDELITY AUTOMATIC ACCOUNT
BUILDER TO MOVE MONEY FROM
YOUR BANK ACCOUNT TO A
FIDELITY FUND.
MINIMUM FREQUENCY PROCEDURES
$100 Monthly or quarterly (small solid bullet) To set
up for a new account,
complete the appropriate
section on the fund
application.
(small solid bullet) To set
up for existing accounts,
call 1-800-544-6666 or visit
Fidelity's web site for an
application.
(small solid bullet) To make
changes, call 1-800-544-6666
at least three business days
prior to your next scheduled
investment date.
DIRECT DEPOSIT TO SEND ALL OR
A PORTION OF YOUR PAYCHECK
OR GOVERNMENT CHECK TO A
FIDELITY FUND.A
MINIMUM FREQUENCY PROCEDURES
$100 Every pay period (small solid bullet) To set
up for a new account, check
the appropriate box on the
fund application.
(small solid bullet) To set
up for an existing account,
call 1-800-544-6666 or visit
Fidelity's web site for an
authorization form.
(small solid bullet) To make
changes you will need a new
authorization form. Call
1-800-544-6666 or visit
Fidelity's web site to
obtain one.
A BECAUSE THEIR SHARE PRICES
FLUCTUATE, THESE FUNDS MAY
NOT BE APPROPRIATE CHOICES
FOR DIRECT DEPOSIT OF YOUR
ENTIRE CHECK.
FIDELITY AUTOMATIC EXCHANGE
SERVICE TO MOVE MONEY FROM A
FIDELITY MONEY MARKET FUND
TO ANOTHER FIDELITY FUND.
MINIMUM FREQUENCY PROCEDURES
$100 Monthly, bimonthly, (small solid bullet) To set
quarterly, or annually up, call 1-800-544-6666
after both accounts are
opened.
(small solid bullet) To make
changes, call 1-800-544-6666
at least three business days
prior to your next scheduled
exchange date.
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PERSONAL WITHDRAWAL SERVICE
TO SET UP PERIODIC
REDEMPTIONS FROM YOUR
ACCOUNT TO YOU OR TO YOUR
BANK ACCOUNT.
FREQUENCY PROCEDURES
Monthly (small solid bullet) To set
up, call 1-800-544-6666.
(small solid bullet) To make
changes, call Fidelity at
1-800-544-6666 at least
three business days prior to
your next scheduled
withdrawal date.
OTHER FEATURES. The following other features are also available to buy
and sell shares of the funds.
WIRE
TO PURCHASE AND SELL SHARES VIA THE FEDERAL RESERVE WIRE SYSTEM.
(small solid bullet) You must sign up for the wire feature before
using it. Complete the appropriate section on the application when
opening your account, or call 1-800-544-6666 to add the feature after
your account is opened. Call 1-800-544-6666 before your first use to
verify that this feature is set up on your account.
(small solid bullet) To sell shares by wire, you must designate the
U.S. commercial bank account(s) into which you wish the redemption
proceeds deposited.
FIDELITY MONEY LINE
TO TRANSFER MONEY BETWEEN YOUR BANK ACCOUNT AND YOUR FUND ACCOUNT.
(small solid bullet) You must sign up for the Money Line feature
before using it. Complete the appropriate section on the application
and then call 1-800-544-6666 or visit Fidelity's web site before your
first use to verify that this feature is set up on your account.
(small solid bullet) Most transfers are complete within three business
days of your call.
(small solid bullet) Minimum purchase: $100
(small solid bullet) Maximum purchase: $100,000
FIDELITY ON-LINE XPRESS+(registered trademark)
TO MANAGE YOUR INVESTMENTS THROUGH YOUR PC.
CALL 1-800-544-0240 OR VISIT FIDELITY'S WEB SITE FOR MORE INFORMATION.
(small solid bullet) For account balances and holdings;
(small solid bullet) To review recent account history;
(small solid bullet) For mutual fund and brokerage trading; and
(small solid bullet) For access to research and analysis tools.
FIDELITY ONLINE TRADING
TO ACCESS AND MANAGE YOUR ACCOUNT OVER THE INTERNET AT FIDELITY'S WEB
SITE.
(small solid bullet) For account balances and holdings;
(small solid bullet) To review recent account history;
(small solid bullet) To obtain quotes;
(small solid bullet) For mutual fund and brokerage trading; and
(small solid bullet) To access third-party research on companies,
stocks, mutual funds and the market.
FAST
TO ACCESS AND MANAGE YOUR ACCOUNT AUTOMATICALLY BY PHONE USING TOUCH
TONE OR SPEECH RECOGNITION.
CALL 1-800-544-5555.
(small solid bullet) For account balances and holdings;
(small solid bullet) For mutual fund and brokerage trading;
(small solid bullet) To obtain quotes;
(small solid bullet) To review orders and mutual fund activity; and
(small solid bullet) To change your personal identification number
(PIN).
POLICIES
The following policies apply to you as a shareholder.
STATEMENTS AND REPORTS that Fidelity sends to you include the
following:
(small solid bullet) Confirmation statements (after transactions
affecting your account balance except reinvestment of distributions in
the fund or another fund and certain transactions through automatic
investment or withdrawal programs).
(small solid bullet) Monthly or quarterly account statements
(detailing account balances and all transactions completed during the
prior month or quarter).
(small solid bullet) Financial reports (every six months).
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed to your household, even if you have more
than one account in a fund. Call Fidelity at 1-800-544-8544 if you
need additional copies of financial reports or prospectuses.
Electronic copies of most financial reports and prospectuses are
available at Fidelity's web site. To participate in Fidelity's
electronic delivery program, call Fidelity or visit Fidelity's web
site for more information.
You may initiate many TRANSACTIONS BY TELEPHONE OR ELECTRONICALLY.
Fidelity will not be responsible for any losses resulting from
unauthorized transactions if it follows reasonable security procedures
designed to verify the identity of the investor. Fidelity will request
personalized security codes or other information, and may also record
calls. For transactions conducted through the Internet, Fidelity
recommends the use of an Internet browser with 128-bit encryption. You
should verify the accuracy of your confirmation statements immediately
after you receive them. If you do not want the ability to sell and
exchange by telephone, call Fidelity for instructions.
When you sign your ACCOUNT APPLICATION, you will be asked to certify
that your social security or taxpayer identification number is correct
and that you are not subject to 31% backup withholding for failing to
report income to the IRS. If you violate IRS regulations, the IRS can
require a fund to withhold 31% of your taxable distributions and
redemptions.
Fidelity may deduct an ANNUAL MAINTENANCE FEE of $12.00 from accounts
with a value of less than $2,500, subject to an annual maximum charge
of $24.00 per shareholder. It is expected that accounts will be valued
on the second Friday in November of each year. Accounts opened after
September 30 will not be subject to the fee for that year. The fee,
which is payable to Fidelity, is designed to offset in part the
relatively higher costs of servicing smaller accounts. This fee will
not be deducted from Fidelity brokerage accounts, retirement accounts
(except non-prototype retirement accounts), accounts using regular
investment plans, or if total assets with Fidelity exceed $30,000.
Eligibility for the $30,000 waiver is determined by aggregating
accounts with Fidelity maintained by Fidelity Service Company, Inc. or
FBSI which are registered under the same social security number or
which list the same social security number for the custodian of a
Uniform Gifts/Transfers to Minors Act account.
If your ACCOUNT BALANCE falls below $2,000 (except accounts not
subject to account minimums), you will be given 30 days' notice to
reestablish the minimum balance. If you do not increase your balance,
Fidelity may close your account and send the proceeds to you. Your
shares will be sold at the NAV, minus the trading fee, if applicable,
on the day your account is closed.
Fidelity may charge a FEE FOR CERTAIN SERVICES, such as providing
historical account documents.
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
Each fund earns dividends, interest, and other income from its
investments, and distributes this income (less expenses) to
shareholders as dividends. Each fund also realizes capital gains from
its investments, and distributes these gains (less any losses) to
shareholders as capital gain distributions.
Each fund normally pays dividends and capital gain distributions in
June and December.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. The following options may be available for
each fund's distributions:
1. REINVESTMENT OPTION. Your dividends and capital gain distributions
will be automatically reinvested in additional shares of the fund. If
you do not indicate a choice on your application, you will be assigned
this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested in additional shares of the fund. Your
dividends will be paid in cash.
3. CASH OPTION. Your dividends and capital gain distributions will be
paid in cash.
4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividends
will be automatically invested in shares of another identically
registered Fidelity fund. Your capital gain distributions will be
automatically invested in shares of another identically registered
Fidelity fund, automatically reinvested in additional shares of the
fund, or paid in cash.
Not all distribution options are available for every account. If the
option you prefer is not listed on your account application, or if you
want to change your current option, call Fidelity.
If you elect to receive distributions paid in cash by check and the
U.S. Postal Service does not deliver your checks, your distribution
option may be converted to the Reinvestment Option. You will not
receive interest on amounts represented by uncashed distribution
checks.
TAX CONSEQUENCES
As with any investment, your investment in a fund could have tax
consequences for you. If you are not investing through a
tax-advantaged retirement account, you should consider these tax
consequences.
TAXES ON DISTRIBUTIONS. Distributions you receive from each fund are
subject to federal income tax, and may also be subject to state or
local taxes.
For federal tax purposes, each fund's dividends and distributions of
short-term capital gains are taxable to you as ordinary income, while
each fund's distributions of long-term capital gains are taxable to
you generally as capital gains.
If you buy shares when a fund has realized but not yet distributed
income or capital gains, you will be "buying a dividend" by paying the
full price for the shares and then receiving a portion of the price
back in the form of a taxable distribution.
Any taxable distributions you receive from a fund will normally be
taxable to you when you receive them, regardless of your distribution
option.
TAXES ON TRANSACTIONS. Your redemptions, including exchanges, may
result in a capital gain or loss for federal tax purposes. A capital
gain or loss on your investment in a fund generally is the difference
between the cost of your shares and the price you receive when you
sell them.
FUND SERVICES
FUND MANAGEMENT
Each fund is a mutual fund, an investment that pools shareholders'
money and invests it toward a specified goal.
FMR is each fund's manager.
As of _____, FMR had approximately $__ billion in discretionary assets
under management.
As the manager, FMR is responsible for choosing each fund's
investments and handling its business affairs.
Affiliates assist FMR with foreign investments:
(small solid bullet) Fidelity Management & Research (U.K.) Inc. (FMR
U.K.), in London, England, serves as a sub-adviser for each fund. FMR
U.K. was organized in 1986 to provide investment research and advice
to FMR. FMR U.K. may provide investment research and advice on issuers
based outside the United States and may also provide investment
advisory services for each fund.
(small solid bullet) Fidelity Management & Research (Far East) Inc.
(FMR Far East) serves as a sub-adviser for each fund. FMR Far East was
organized in 1986 to provide investment research and advice to FMR.
FMR Far East may provide investment research and advice on issuers
based outside the United States and may also provide investment
advisory services for each fund.
(small solid bullet) Fidelity Investments Japan Limited (FIJ), in
Tokyo, Japan, serves as a sub-adviser for each fund. As of ______, FIJ
had approximately $___billion in discretionary assets under
management. FIJ may provide investment research and advice on issuers
based outside the United States and may also provide investment
advisory services for each fund.
Beginning January 1, 2001, FMR Co., Inc. (FMRC) will serve as
sub-adviser for each fund. FMRC will be primarily responsible for
choosing investments for each fund. FMRC is a wholly owned subsidiary
of FMR.
Paul Antico is manager of Small Cap Stock, which he has managed since
inception. Previously, he managed other Fidelity funds. Since joining
Fidelity in 1991, Mr. Antico has worked as an analyst and manager.
David Felman is vice president and manager of Mid-Cap Stock Fund. He
also manages other Fidelity funds. Mr. Felman joined Fidelity as an
analyst in 1993.
Karen Firestone is manager of Large Cap Stock, which she has managed
since April 1998. She also manages other Fidelity funds. Since joining
Fidelity in 1983, Ms. Firestone has worked as an analyst and manager.
From time to time a manager, analyst, or other Fidelity employee may
express views regarding a particular company, security, industry, or
market sector. The views expressed by any such person are the views of
only that individual as of the time expressed and do not necessarily
represent the views of Fidelity or any other person in the Fidelity
organization. Any such views are subject to change at any time based
upon market or other conditions and Fidelity disclaims any
responsibility to update such views. These views may not be relied on
as investment advice and, because investment decisions for a Fidelity
fund are based on numerous factors, may not be relied on as an
indication of trading intent on behalf of any Fidelity fund.
Each fund pays a management fee to FMR. The management fee is
calculated and paid to FMR every month. The fee is determined by
calculating a basic fee and then applying a performance adjustment.
The performance adjustment either increases or decreases the
management fee, depending on how well Small Cap Stock has performed
relative to the Russell 2000, Mid-Cap Stock has performed relative to
the S&P MidCap 400, or Large Cap Stock has performed relative to the
S&P 500.
Management fee = Basic fee +/- Performance adjustment
The basic fee is calculated by adding a group fee rate to an
individual fund fee rate, dividing by twelve, and multiplying the
result by a fund's average net assets throughout the month.
The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0.52%, and it
drops as total assets under management increase.
For April 2000, the group fee rate was __%. The individual fund fee
rate is 0.45% for Small Cap Stock, 0.30% for Mid-Cap Stock, and 0.30%
for Large Cap Stock.
The basic fee for Small Cap Stock, Mid-Cap Stock, and Large Cap Stock
for the fiscal year ended April 30, 2000, was __%, __% and __%,
respectively, of the fund's average net assets.
The performance adjustment rate is calculated monthly by comparing
over the performance period Small Cap Stock's performance to that of
the Russell 2000, Mid-Cap Stock's performance to that of The S&P
MidCap 400, and Large Cap Stock's performance to that of the S&P 500.
For Small Cap Stock, the performance period began on April 1, 1998 and
will eventually include 36 months. The performance adjustment took
effect on March 1, 1999.
For Mid-Cap Stock and Large Cap Stock, the performance period is the
most recent 36 month period.
The performance adjustment rate is divided by twelve and multiplied by
the fund's average net assets throughout the month, and the resulting
dollar amount is then added to or subtracted from the basic fee. The
maximum annualized performance adjustment rate is (plus/minus)0.20% of
the fund's average net assets over the performance period.
The total management fee, as a percentage of a fund's average net
assets, for the fiscal year ended April 30, 2000, for each fund is
shown in the table below.
Total Management Fee
Small Cap Stock %
Mid-Cap Stock %
Large Cap Stock %
FMR pays FMR U.K. and FMR Far East for providing sub-advisory
services. FMR Far East pays FIJ for providing sub-advisory services.
FMR will pay FMRC for providing sub-advisory services.
FMR may, from time to time, agree to reimburse the funds for
management fees and other expenses above a specified limit. FMR
retains the ability to be repaid by a fund if expenses fall below the
specified limit prior to the end of the fiscal year. Reimbursement
arrangements, which may be discontinued by FMR at any time , can
decrease a fund's expenses and boost its performance.
[As of April 30, 2000, approximately __% and __% of [_______]'s total
outstanding shares, respectively, were held by [FMR/FMR and [an] FMR
affiliate[s]/[an] FMR affiliate[s]].]
FUND DISTRIBUTION
FDC distributes each fund's shares.
Each fund has adopted a Distribution and Service Plan pursuant to Rule
12b-1 under the Investment Company Act of 1940 that recognizes that
FMR may use its management fee revenues, as well as its past profits
or its resources from any other source, to pay FDC for expenses
incurred in connection with providing services intended to result in
the sale of fund shares and/or shareholder support services. FMR,
directly or through FDC, may pay intermediaries, such as banks,
broker-dealers and other service-providers, that provide those
services. Currently, the Board of Trustees of each fund has authorized
such payments.
To receive payments made pursuant to a Distribution and Service Plan,
intermediaries must sign the appropriate agreement with FDC in
advance.
FMR may allocate brokerage transactions in a manner that takes into
account the sale of shares of a fund, provided that the fund receives
brokerage services and commission rates comparable to those of other
broker-dealers.
No dealer, sales representative, or any other person has been
authorized to give any information or to make any representations,
other than those contained in this prospectus and in the related
statement of additional information (SAI), in connection with the
offer contained in this prospectus. If given or made, such other
information or representations must not be relied upon as having been
authorized by the funds or FDC. This prospectus and the related SAI do
not constitute an offer by the funds or by FDC to sell shares of the
funds to or to buy shares of the funds from any person to whom it is
unlawful to make such offer.
APPENDIX
FINANCIAL HIGHLIGHTS
The financial highlights tables are intended to help you understand
each fund's financial history for the past 5 years or, if shorter, the
period of the fund's operations. Certain information reflects
financial results for a single fund share. The total returns in the
table represent the rate that an investor would have earned (or lost)
on an investment in the fund (assuming reinvestment of all dividends
and distributions). This information has been audited by Deloitte &
Touche LLP (2000 annual information only for Mid-Cap Stock),
independent accountants, whose reports, along with each fund's
financial highlights and financial statements, are included in each
fund's annual report. Annual information prior to 2000 for Mid-Cap
Stock was audited by PricewaterhouseCoopers LLP. A free copy of each
annual report is available upon request.
ADDITIONAL PERFORMANCE INFORMATION
Lipper has created new comparison categories that group funds
according to portfolio characteristics and capitalization, as well as
by capitalization only. The Lipper Small-Cap Core Funds Average,
Lipper Mid-Cap Core Funds Average, and Lipper Large-Cap Core Funds
Average, reflect the performance (excluding sales charges) of mutual
funds with similar portfolio characteristics and capitalization. The
Lipper Small-Cap Supergroup Funds Average, Lipper Mid-Cap Supergroup
Funds Average, and Lipper Large-Cap Supergroup Funds Average reflect
the performance (excluding sales charges) of mutual funds with similar
capitalization. The following information compares the performance of
each fund to two new Lipper comparison categories.
AVERAGE ANNUAL RETURNS
For the periods ended Past 1 year Past 5 years Life of fund
December 31, 1999
Small Cap Stock % n/a %A
Lipper Small-Cap Core Funds % n/a %A
Average
Lipper Small-Cap Supergroup % n/a %A
Funds Average
Mid-Cap Stock % % %B
Lipper Mid-Cap Core Funds % % %B
Average
Lipper Mid-Cap Supergroup % % %B
Funds Average
Large Cap Stock % n/a %C
Lipper Large-Cap Core Funds % n/a %C
Average
Lipper Large-Cap Supergroup % n/a %C
Funds Average
A FROM MARCH 12, 1998.
B FROM MARCH 29, 1994.
C FROM JUNE 22, 1995.
[If FMR had not reimbursed certain fund expenses during these periods,
___________'s returns would have been lower.]
You can obtain additional information about the funds. The funds' SAI
includes more detailed information about each fund and its
investments. The SAI is incorporated herein by reference (legally
forms a part of the prospectus). Each fund's annual and semi-annual
reports include a discussion of the fund's holdings and recent market
conditions and the fund's investment strategies that affected
performance.
For a free copy of any of these documents or to request other
information or ask questions about a fund, call Fidelity at
1-800-544-8544. In addition, you may visit Fidelity's web site at
www.fidelity.com for a free copy of a prospectus or an annual or
semi-annual report or to request other information.
The SAI, the funds' annual and semi-annual reports and other related
materials are available from the Electronic Data Gathering, Analysis,
and Retrieval (EDGAR) Database on the SEC's web site
(http://www.sec.gov). You can obtain copies of this information, after
paying a duplicating fee, by sending a request by e-mail to
[email protected] or by writing the Public Reference Section of the
SEC, Washington, D.C. 20549-0102. You can also review and copy
information about the funds, including the funds' SAI, at the SEC's
Public Reference Room in Washington, D.C. Call 1-202-942-8090 for
information on the operation of the SEC's Public Reference Room.
INVESTMENT COMPANY ACT OF 1940, FILE NUMBER 811-2546
Fidelity, Fidelity Investments and (Pyramid) Design, Fidelity
Investments, Fidelity Money Line, Fidelity Automatic Account Builder,
Fidelity On-Line Xpress+, and Directed Dividends are registered
trademarks of FMR Corp.
FAST and Portfolio Advisory Services are service marks of FMR Corp.
1.704255.102. SML-pro-0600
FIDELITY(registered trademark) SMALL CAP STOCK FUND
FIDELITY MID-CAP STOCK FUND
FIDELITY LARGE CAP STOCK FUND
FUNDS OF FIDELITY COMMONWEALTH TRUST
STATEMENT OF ADDITIONAL INFORMATION
JUNE 24, 2000
This statement of additional information (SAI) is not a prospectus.
Portions of each fund's annual reports are incorporated herein. The
annual reports are supplied with this SAI.
To obtain a free additional copy of the prospectus, dated June 24,
2000, or an annual report, please call Fidelity at 1-800-544-8544 or
visit Fidelity's web site at www.fidelity.com.
TABLE OF CONTENTS PAGE
Investment Policies and 17
Limitations
Portfolio Transactions 23
Valuation 26
Performance 26
Additional Purchase, Exchange 33
and Redemption Information
Distributions and Taxes 33
Trustees and Officers 34
Control of Investment Advisers 37
Management Contracts 37
Distribution Services 43
Transfer and Service Agent 43
Agreements
Description of the Trust 44
Financial Statements 44
Appendix 44
SML-ptb-0600
1.475973.102
(fidelity_logo_graphic)(registered trademark)
82 Devonshire Street, Boston, MA 02109
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in
the prospectus. Unless otherwise noted, whenever an investment policy
or limitation states a maximum percentage of a fund's assets that may
be invested in any security or other asset, or sets forth a policy
regarding quality standards, such standard or percentage limitation
will be determined immediately after and as a result of the fund's
acquisition of such security or other asset. Accordingly, any
subsequent change in values, net assets, or other circumstances will
not be considered when determining whether the investment complies
with the fund's investment policies and limitations.
A fund's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940 (the
1940 Act) of the fund. However, except for the fundamental investment
limitations listed below, the investment policies and limitations
described in this SAI are not fundamental and may be changed without
shareholder approval.
INVESTMENT LIMITATIONS OF SMALL CAP STOCK
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) 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 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;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) 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;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)).
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 15% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
For purposes of normally investing at least 65% of the fund's total
assets in common stocks of companies with small market
capitalizations, FMR interprets "total assets" to exclude collateral
received for securities lending transactions.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets were invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page __.
INVESTMENT LIMITATIONS OF MID-CAP STOCK
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) 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 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;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) 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;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the
same investment objectives, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)).
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 15% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
For purposes of normally investing at least 65% of the fund's total
assets in common stocks of companies with medium market
capitalizations, FMR interprets "total assets" to exclude collateral
received for securities lending transactions.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page ___.
INVESTMENT LIMITATIONS OF LARGE CAP STOCK
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) 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 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;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 331/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 331/3% limitation;
(4) 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;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 331/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same investment objective, policies, and limitations
as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)).
(iv) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 15% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
For purposes of normally investing at least 65% of the fund's total
assets in common stocks of companies with large market
capitalizations, FMR interprets "total assets" to exclude collateral
received for securities lending transactions.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets were invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page ___.
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related
risks. FMR may not buy all of these instruments or use all of these
techniques unless it believes that doing so will help a fund achieve
its goal.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be,
"affiliated persons" of the fund under the 1940 Act. These
transactions may involve repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50
largest U.S. banks (measured by deposits); municipal securities; U.S.
Government securities with affiliated financial institutions that are
primary dealers in these securities; short-term currency transactions;
and short-term borrowings. In accordance with exemptive orders issued
by the Securities and Exchange Commission (SEC), the Board of Trustees
has established and periodically reviews procedures applicable to
transactions involving affiliated financial institutions.
BORROWING. Each fund may borrow from banks or from other funds advised
by FMR or its affiliates, or through reverse repurchase agreements. If
a fund borrows money, its share price may be subject to greater
fluctuation until the borrowing is paid off. If a fund makes
additional investments while borrowings are outstanding, this may be
considered a form of leverage.
CASH MANAGEMENT. A fund can hold uninvested cash or can invest it in
cash equivalents such as money market securities, repurchase
agreements or shares of money market funds. Generally, these
securities offer less potential for gains than other types of
securities.
CENTRAL CASH FUNDS are money market funds managed by FMR or its
affiliates that seek to earn a high level of current income (free from
federal income tax in the case of a municipal money market fund) while
maintaining a stable $1.00 share price. The funds comply with
industry-standard requirements for money market funds regarding the
quality, maturity, and diversification of their investments.
COMMON STOCK represents an equity or ownership interest in an issuer.
In the event an issuer is liquidated or declares bankruptcy, the
claims of owners of bonds and preferred stock take precedence over the
claims of those who own common stock.
CONVERTIBLE SECURITIES are bonds, debentures, notes, preferred stocks
or other securities that may be converted or exchanged (by the holder
or by the issuer) into shares of the underlying common stock (or cash
or securities of equivalent value) at a stated exchange ratio. A
convertible security may also be called for redemption or conversion
by the issuer after a particular date and under certain circumstances
(including a specified price) established upon issue. If a convertible
security held by a fund is called for redemption or conversion, the
fund could be required to tender it for redemption, convert it into
the underlying common stock, or sell it to a third party.
Convertible securities generally have less potential for gain or loss
than common stocks. Convertible securities generally provide yields
higher than the underlying common stocks, but generally lower than
comparable non-convertible securities. Because of this higher yield,
convertible securities generally sell at prices above their
"conversion value," which is the current market value of the stock to
be received upon conversion. The difference between this conversion
value and the price of convertible securities will vary over time
depending on changes in the value of the underlying common stocks and
interest rates. When the underlying common stocks decline in value,
convertible securities will tend not to decline to the same extent
because of the interest or dividend payments and the repayment of
principal at maturity for certain types of convertible securities.
However, securities that are convertible other than at the option of
the holder generally do not limit the potential for loss to the same
extent as securities convertible at the option of the holder. When the
underlying common stocks rise in value, the value of convertible
securities may also be expected to increase. At the same time,
however, the difference between the market value of convertible
securities and their conversion value will narrow, which means that
the value of convertible securities will generally not increase to the
same extent as the value of the underlying common stocks. Because
convertible securities may also be interest-rate sensitive, their
value may increase as interest rates fall and decrease as interest
rates rise. Convertible securities are also subject to credit risk,
and are often lower-quality securities.
DEBT SECURITIES are used by issuers to borrow money. The issuer
usually pays a fixed, variable or floating rate of interest, and must
repay the amount borrowed at the maturity of the security. Some debt
securities, such as zero coupon bonds, do not pay interest but are
sold at a deep discount from their face values. Debt securities
include corporate bonds, government securities, and mortgage and other
asset-backed securities.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies,
and securities issued by U.S. entities with substantial foreign
operations may involve significant risks in addition to the risks
inherent in U.S. investments.
Foreign investments involve risks relating to local political,
economic, regulatory, or social instability, military action or
unrest, or adverse diplomatic developments, and may be affected by
actions of foreign governments adverse to the interests of U.S.
investors. Such actions may include expropriation or nationalization
of assets, confiscatory taxation, restrictions on U.S. investment or
on the ability to repatriate assets or convert currency into U.S.
dollars, or other government intervention. Additionally, governmental
issuers of foreign debt securities may be unwilling to pay interest
and repay principal when due and may require that the conditions for
payment be renegotiated. There is no assurance that FMR will be able
to anticipate these potential events or counter their effects. In
addition, the value of securities denominated in foreign currencies
and of dividends and interest paid with respect to such securities
will fluctuate based on the relative strength of the U.S. dollar.
It is anticipated that in most cases the best available market for
foreign securities will be on an exchange or in over-the-counter (OTC)
markets located outside of the United States. Foreign stock markets,
while growing in volume and sophistication, are generally not as
developed as those in the United States, and securities of some
foreign issuers may be less liquid and more volatile than securities
of comparable U.S. issuers. Foreign security trading, settlement and
custodial practices (including those involving securities settlement
where fund assets may be released prior to receipt of payment) are
often less developed than those in U.S. markets, and may result in
increased risk or substantial delays in the event of a failed trade or
the insolvency of, or breach of duty by, a foreign broker-dealer,
securities depository or foreign subcustodian. In addition, the costs
associated with foreign investments, including withholding taxes,
brokerage commissions and custodial costs, are generally higher than
with U.S. investments.
Foreign markets may offer less protection to investors than U.S.
markets. Foreign issuers are generally not bound by uniform
accounting, auditing, and financial reporting requirements and
standards of practice comparable to those applicable to U.S. issuers.
Adequate public information on foreign issuers may not be available,
and it may be difficult to secure dividends and information regarding
corporate actions on a timely basis. In general, there is less overall
governmental supervision and regulation of securities exchanges,
brokers, and listed companies than in the United States. OTC markets
tend to be less regulated than stock exchange markets and, in certain
countries, may be totally unregulated. Regulatory enforcement may be
influenced by economic or political concerns, and investors may have
difficulty enforcing their legal rights in foreign countries.
Some foreign securities impose restrictions on transfer within the
United States or to U.S. persons. Although securities subject to such
transfer restrictions may be marketable abroad, they may be less
liquid than foreign securities of the same class that are not subject
to such restrictions.
American Depositary Receipts (ADRs) as well as other "hybrid" forms of
ADRs, including European Depositary Receipts (EDRs) and Global
Depositary Receipts (GDRs), are certificates evidencing ownership of
shares of a foreign issuer. These certificates are issued by
depository banks and generally trade on an established market in the
United States or elsewhere. The underlying shares are held in trust by
a custodian bank or similar financial institution in the issuer's home
country. The depository bank may not have physical custody of the
underlying securities at all times and may charge fees for various
services, including forwarding dividends and interest and corporate
actions. ADRs are alternatives to directly purchasing the underlying
foreign securities in their national markets and currencies. However,
ADRs continue to be subject to many of the risks associated with
investing directly in foreign securities. These risks include foreign
exchange risk as well as the political and economic risks of the
underlying issuer's country.
The risks of foreign investing may be magnified for investments in
emerging markets. Security prices in emerging markets can be
significantly more volatile than those in more developed markets,
reflecting the greater uncertainties of investing in less established
markets and economies. In particular, countries with emerging markets
may have relatively unstable governments, may present the risks of
nationalization of businesses, restrictions on foreign ownership and
prohibitions on the repatriation of assets, and may have less
protection of property rights than more developed countries. The
economies of countries with emerging markets may be based on only a
few industries, may be highly vulnerable to changes in local or global
trade conditions, and may suffer from extreme and volatile debt
burdens or inflation rates. Local securities markets may trade a small
number of securities and may be unable to respond effectively to
increases in trading volume, potentially making prompt liquidation of
holdings difficult or impossible at times.
FOREIGN CURRENCY TRANSACTIONS. A fund may conduct foreign currency
transactions on a spot (i.e., cash) or forward basis (i.e., by
entering into forward contracts to purchase or sell foreign
currencies). Although foreign exchange dealers generally do not charge
a fee for such conversions, they do realize a profit based on the
difference between the prices at which they are buying and selling
various currencies. Thus, a dealer may offer to sell a foreign
currency at one rate, while offering a lesser rate of exchange should
the counterparty desire to resell that currency to the dealer. Forward
contracts are customized transactions that require a specific amount
of a currency to be delivered at a specific exchange rate on a
specific date or range of dates in the future. Forward contracts are
generally traded in an interbank market directly between currency
traders (usually large commercial banks) and their customers. The
parties to a forward contract may agree to offset or terminate the
contract before its maturity, or may hold the contract to maturity and
complete the contemplated currency exchange.
The following discussion summarizes the principal currency management
strategies involving forward contracts that could be used by a fund. A
fund may also use swap agreements, indexed securities, and options and
futures contracts relating to foreign currencies for the same
purposes.
A "settlement hedge" or "transaction hedge" is designed to protect a
fund against an adverse change in foreign currency values between the
date a security is purchased or sold and the date on which payment is
made or received. Entering into a forward contract for the purchase or
sale of the amount of foreign currency involved in an underlying
security transaction for a fixed amount of U.S. dollars "locks in" the
U.S. dollar price of the security. Forward contracts to purchase or
sell a foreign currency may also be used by a fund in anticipation of
future purchases or sales of securities denominated in foreign
currency, even if the specific investments have not yet been selected
by FMR.
A fund may also use forward contracts to hedge against a decline in
the value of existing investments denominated in foreign currency. For
example, if a fund owned securities denominated in pounds sterling, it
could enter into a forward contract to sell pounds sterling in return
for U.S. dollars to hedge against possible declines in the pound's
value. Such a hedge, sometimes referred to as a "position hedge,"
would tend to offset both positive and negative currency fluctuations,
but would not offset changes in security values caused by other
factors. A fund could also hedge the position by selling another
currency expected to perform similarly to the pound sterling. This
type of hedge, sometimes referred to as a "proxy hedge," could offer
advantages in terms of cost, yield, or efficiency, but generally would
not hedge currency exposure as effectively as a direct hedge into U.S.
dollars. Proxy hedges may result in losses if the currency used to
hedge does not perform similarly to the currency in which the hedged
securities are denominated.
A fund may enter into forward contracts to shift its investment
exposure from one currency into another. This may include shifting
exposure from U.S. dollars to a foreign currency, or from one foreign
currency to another foreign currency. This type of strategy, sometimes
known as a "cross-hedge," will tend to reduce or eliminate exposure to
the currency that is sold, and increase exposure to the currency that
is purchased, much as if a fund had sold a security denominated in one
currency and purchased an equivalent security denominated in another.
Cross-hedges protect against losses resulting from a decline in the
hedged currency, but will cause a fund to assume the risk of
fluctuations in the value of the currency it purchases.
Successful use of currency management strategies will depend on FMR's
skill in analyzing currency values. Currency management strategies may
substantially change a fund's investment exposure to changes in
currency exchange rates and could result in losses to a fund if
currencies do not perform as FMR anticipates. For example, if a
currency's value rose at a time when FMR had hedged a fund by selling
that currency in exchange for dollars, a fund would not participate in
the currency's appreciation. If FMR hedges currency exposure through
proxy hedges, a fund could realize currency losses from both the hedge
and the security position if the two currencies do not move in tandem.
Similarly, if FMR increases a fund's exposure to a foreign currency
and that currency's value declines, a fund will realize a loss. There
is no assurance that FMR's use of currency management strategies will
be advantageous to a fund or that it will hedge at appropriate times.
FUNDS' RIGHTS AS SHAREHOLDERS. The funds do not intend to direct or
administer the day-to-day operations of any company. A fund, however,
may exercise its rights as a shareholder and may communicate its views
on important matters of policy to management, the Board of Directors,
and shareholders of a company when FMR determines that such matters
could have a significant effect on the value of the fund's investment
in the company. The activities in which a fund may engage, either
individually or in conjunction with others, may include, among others,
supporting or opposing proposed changes in a company's corporate
structure or business activities; seeking changes in a company's
directors or management; seeking changes in a company's direction or
policies; seeking the sale or reorganization of the company or a
portion of its assets; or supporting or opposing third-party takeover
efforts. This area of corporate activity is increasingly prone to
litigation and it is possible that a fund could be involved in
lawsuits related to such activities. FMR will monitor such activities
with a view to mitigating, to the extent possible, the risk of
litigation against a fund and the risk of actual liability if a fund
is involved in litigation. No guarantee can be made, however, that
litigation against a fund will not be undertaken or liabilities
incurred.
FUTURES AND OPTIONS. The following paragraphs pertain to futures and
options: Combined Positions, Correlation of Price Changes, Futures
Contracts, Futures Margin Payments, Limitations on Futures and Options
Transactions, Liquidity of Options and Futures Contracts, Options and
Futures Relating to Foreign Currencies, OTC Options, Purchasing Put
and Call Options, and Writing Put and Call Options.
COMBINED POSITIONS involve purchasing and writing options in
combination with each other, or in combination with futures or forward
contracts, to adjust the risk and return characteristics of the
overall position. For example, purchasing a put option and writing a
call option on the same underlying instrument would construct a
combined position whose risk and return characteristics are similar to
selling a futures contract. Another possible combined position would
involve writing a call option at one strike price and buying a call
option at a lower price, to reduce the risk of the written call option
in the event of a substantial price increase. Because combined options
positions involve multiple trades, they result in higher transaction
costs and may be more difficult to open and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of
types of exchange-traded options and futures contracts, it is likely
that the standardized contracts available will not match a fund's
current or anticipated investments exactly. A fund may invest in
options and futures contracts based on securities with different
issuers, maturities, or other characteristics from the securities in
which the fund typically invests, which involves a risk that the
options or futures position will not track the performance of the
fund's other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match a
fund's investments well. Options and futures prices are affected by
such factors as current and anticipated short-term interest rates,
changes in volatility of the underlying instrument, and the time
remaining until expiration of the contract, which may not affect
security prices the same way. Imperfect correlation may also result
from differing levels of demand in the options and futures markets and
the securities markets, from structural differences in how options and
futures and securities are traded, or from imposition of daily price
fluctuation limits or trading halts. A fund may purchase or sell
options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to
attempt to compensate for differences in volatility between the
contract and the securities, although this may not be successful in
all cases. If price changes in a fund's options or futures positions
are poorly correlated with its other investments, the positions may
fail to produce anticipated gains or result in losses that are not
offset by gains in other investments.
FUTURES CONTRACTS. In purchasing a futures contract, the buyer agrees
to purchase a specified underlying instrument at a specified future
date. In selling a futures contract, the seller agrees to sell a
specified underlying instrument at a specified future date. The price
at which the purchase and sale will take place is fixed when the buyer
and seller enter into the contract. Some currently available futures
contracts are based on specific securities, such as U.S. Treasury
bonds or notes, and some are based on indices of securities prices,
such as the Standard & Poor's 500 IndexSM (S&P 500(registered
trademark)). Futures can be held until their delivery dates, or can be
closed out before then if a liquid secondary market is available.
The value of a futures contract tends to increase and decrease in
tandem with the value of its underlying instrument. Therefore,
purchasing futures contracts will tend to increase a fund's exposure
to positive and negative price fluctuations in the underlying
instrument, much as if it had purchased the underlying instrument
directly. When a fund sells a futures contract, by contrast, the value
of its futures position will tend to move in a direction contrary to
the market. Selling futures contracts, therefore, will tend to offset
both positive and negative market price changes, much as if the
underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract
is not required to deliver or pay for the underlying instrument unless
the contract is held until the delivery date. However, both the
purchaser and seller are required to deposit "initial margin" with a
futures broker, known as a futures commission merchant (FCM), when the
contract is entered into. Initial margin deposits are typically equal
to a percentage of the contract's value. If the value of either
party's position declines, that party will be required to make
additional "variation margin" payments to settle the change in value
on a daily basis. The party that has a gain may be entitled to receive
all or a portion of this amount. Initial and variation margin payments
do not constitute purchasing securities on margin for purposes of a
fund's investment limitations. In the event of the bankruptcy of an
FCM that holds margin on behalf of a fund, the fund may be entitled to
return of margin owed to it only in proportion to the amount received
by the FCM's other customers, potentially resulting in losses to the
fund.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. Each fund has filed a
notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading
Commission (CFTC) and the National Futures Association, which regulate
trading in the futures markets. The funds intend to comply with Rule
4.5 under the Commodity Exchange Act, which limits the extent to which
the funds can commit assets to initial margin deposits and option
premiums.
In addition, each fund will not: (a) sell futures contracts, purchase
put options, or write call options if, as a result, more than 25% of
the fund's total assets would be hedged with futures and options under
normal conditions; (b) purchase futures contracts or write put options
if, as a result, the fund's total obligations upon settlement or
exercise of purchased futures contracts and written put options would
exceed 25% of its total assets under normal conditions; or (c)
purchase call options if, as a result, the current value of option
premiums for call options purchased by the fund would exceed 5% of the
fund's total assets. These limitations do not apply to options
attached to or acquired or traded together with their underlying
securities, and do not apply to securities that incorporate features
similar to options.
The above limitations on the funds' investments in futures contracts
and options, and the funds' policies regarding futures contracts and
options discussed elsewhere in this SAI may be changed as regulatory
agencies permit.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a
liquid secondary market will exist for any particular options or
futures contract at any particular time. Options may have relatively
low trading volume and liquidity if their strike prices are not close
to the underlying instrument's current price. In addition, exchanges
may establish daily price fluctuation limits for options and futures
contracts, and may halt trading if a contract's price moves upward or
downward more than the limit in a given day. On volatile trading days
when the price fluctuation limit is reached or a trading halt is
imposed, it may be impossible to enter into new positions or close out
existing positions. If the secondary market for a contract is not
liquid because of price fluctuation limits or otherwise, it could
prevent prompt liquidation of unfavorable positions, and potentially
could require a fund to continue to hold a position until delivery or
expiration regardless of changes in its value. As a result, a fund's
access to other assets held to cover its options or futures positions
could also be impaired.
OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures
contracts are similar to forward currency exchange contracts, except
that they are traded on exchanges (and have margin requirements) and
are standardized as to contract size and delivery date. Most currency
futures contracts call for payment or delivery in U.S. dollars. The
underlying instrument of a currency option may be a foreign currency,
which generally is purchased or delivered in exchange for U.S.
dollars, or may be a futures contract. The purchaser of a currency
call obtains the right to purchase the underlying currency, and the
purchaser of a currency put obtains the right to sell the underlying
currency.
The uses and risks of currency options and futures are similar to
options and futures relating to securities or indices, as discussed
above. A fund may purchase and sell currency futures and may purchase
and write currency options to increase or decrease its exposure to
different foreign currencies. Currency options may also be purchased
or written in conjunction with each other or with currency futures or
forward contracts. Currency futures and options values can be expected
to correlate with exchange rates, but may not reflect other factors
that affect the value of a fund's investments. A currency hedge, for
example, should protect a Yen-denominated security from a decline in
the Yen, but will not protect a fund against a price decline resulting
from deterioration in the issuer's creditworthiness. Because the value
of a fund's foreign-denominated investments changes in response to
many factors other than exchange rates, it may not be possible to
match the amount of currency options and futures to the value of the
fund's investments exactly over time.
OTC OPTIONS. Unlike exchange-traded options, which are standardized
with respect to the underlying instrument, expiration date, contract
size, and strike price, the terms of OTC options (options not traded
on exchanges) generally are established through negotiation with the
other party to the option contract. While this type of arrangement
allows the purchaser or writer greater flexibility to tailor an option
to its needs, OTC options generally involve greater credit risk than
exchange-traded options, which are guaranteed by the clearing
organization of the exchanges where they are traded.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the
purchaser obtains the right (but not the obligation) to sell the
option's underlying instrument at a fixed strike price. In return for
this right, the purchaser pays the current market price for the option
(known as the option premium). Options have various types of
underlying instruments, including specific securities, indices of
securities prices, and futures contracts. The purchaser may terminate
its position in a put option by allowing it to expire or by exercising
the option. If the option is allowed to expire, the purchaser will
lose the entire premium. If the option is exercised, the purchaser
completes the sale of the underlying instrument at the strike price. A
purchaser may also terminate a put option position by closing it out
in the secondary market at its current price, if a liquid secondary
market exists.
The buyer of a typical put option can expect to realize a gain if
security prices fall substantially. However, if the underlying
instrument's price does not fall enough to offset the cost of
purchasing the option, a put buyer can expect to suffer a loss
(limited to the amount of the premium, plus related transaction
costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right
to purchase, rather than sell, the underlying instrument at the
option's strike price. A call buyer typically attempts to participate
in potential price increases of the underlying instrument with risk
limited to the cost of the option if security prices fall. At the same
time, the buyer can expect to suffer a loss if security prices do not
rise sufficiently to offset the cost of the option.
WRITING PUT AND CALL OPTIONS. The writer of a put or call option takes
the opposite side of the transaction from the option's purchaser. In
return for receipt of the premium, the writer assumes the obligation
to pay the strike price for the option's underlying instrument if the
other party to the option chooses to exercise it. The writer may seek
to terminate a position in a put option before exercise by closing out
the option in the secondary market at its current price. If the
secondary market is not liquid for a put option, however, the writer
must continue to be prepared to pay the strike price while the option
is outstanding, regardless of price changes. When writing an option on
a futures contract, a fund will be required to make margin payments to
an FCM as described above for futures contracts.
If security prices rise, a put writer would generally expect to
profit, although its gain would be limited to the amount of the
premium it received. If security prices remain the same over time, it
is likely that the writer will also profit, because it should be able
to close out the option at a lower price. If security prices fall, the
put writer would expect to suffer a loss. This loss should be less
than the loss from purchasing the underlying instrument directly,
however, because the premium received for writing the option should
mitigate the effects of the decline.
Writing a call option obligates the writer to sell or deliver the
option's underlying instrument, in return for the strike price, upon
exercise of the option. The characteristics of writing call options
are similar to those of writing put options, except that writing calls
generally is a profitable strategy if prices remain the same or fall.
Through receipt of the option premium, a call writer mitigates the
effects of a price decline. At the same time, because a call writer
must be prepared to deliver the underlying instrument in return for
the strike price, even if its current value is greater, a call writer
gives up some ability to participate in security price increases.
ILLIQUID SECURITIES cannot be sold or disposed of in the ordinary
course of business at approximately the prices at which they are
valued. Difficulty in selling securities may result in a loss or may
be costly to a fund. Under the supervision of the Board of Trustees,
FMR determines the liquidity of a fund's investments and, through
reports from FMR, the Board monitors investments in illiquid
securities. In determining the liquidity of a fund's investments, FMR
may consider various factors, including (1) the frequency and volume
of trades and quotations, (2) the number of dealers and prospective
purchasers in the marketplace, (3) dealer undertakings to make a
market, and (4) the nature of the security and the market in which it
trades (including any demand, put or tender features, the mechanics
and other requirements for transfer, any letters of credit or other
credit enhancement features, any ratings, the number of holders, the
method of soliciting offers, the time required to dispose of the
security, and the ability to assign or offset the rights and
obligations of the security).
INDEXED SECURITIES are instruments whose prices are indexed to the
prices of other securities, securities indices, currencies, or other
financial indicators. Indexed securities typically, but not always,
are debt securities or deposits whose value at maturity or coupon rate
is determined by reference to a specific instrument or statistic.
Currency-indexed securities typically are short-term to
intermediate-term debt securities whose maturity values or interest
rates are determined by reference to the values of one or more
specified foreign currencies, and may offer higher yields than U.S.
dollar-denominated securities. Currency-indexed securities may be
positively or negatively indexed; that is, their maturity value may
increase when the specified currency value increases, resulting in a
security that performs similarly to a foreign-denominated instrument,
or their maturity value may decline when foreign currencies increase,
resulting in a security whose price characteristics are similar to a
put on the underlying currency. Currency-indexed securities may also
have prices that depend on the values of a number of different foreign
currencies relative to each other.
The performance of indexed securities depends to a great extent on the
performance of the security, currency, or other instrument to which
they are indexed, and may also be influenced by interest rate changes
in the United States and abroad. Indexed securities may be more
volatile than the underlying instruments. Indexed securities are also
subject to the credit risks associated with the issuer of the
security, and their values may decline substantially if the issuer's
creditworthiness deteriorates. Recent issuers of indexed securities
have included banks, corporations, and certain U.S. Government
agencies.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive
order issued by the SEC, a fund may lend money to, and borrow money
from, other funds advised by FMR or its affiliates. A fund will lend
through the program only when the returns are higher than those
available from an investment in repurchase agreements, and will borrow
through the program only when the costs are equal to or lower than the
cost of bank loans. Interfund loans and borrowings normally extend
overnight, but can have a maximum duration of seven days. Loans may be
called on one day's notice. A fund may have to borrow from a bank at a
higher interest rate if an interfund loan is called or not renewed.
Any delay in repayment to a lending fund could result in a lost
investment opportunity or additional borrowing costs.
INVESTMENT-GRADE DEBT SECURITIES. Investment-grade debt securities are
medium and high-quality securities. Some may possess speculative
characteristics and may be more sensitive to economic changes and to
changes in the financial conditions of issuers. A debt security is
considered to be investment-grade if it is rated investment-grade by
Moody's Investors Service, Standard & Poor's, Duff & Phelps Credit
Rating Co., or Fitch IBCA Inc., or is unrated but considered to be of
equivalent quality by FMR.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS. Direct debt instruments are
interests in amounts owed by a corporate, governmental, or other
borrower to lenders or lending syndicates (loans and loan
participations), to suppliers of goods or services (trade claims or
other receivables), or to other parties. Direct debt instruments
involve a risk of loss in case of default or insolvency of the
borrower and may offer less legal protection to the purchaser in the
event of fraud or misrepresentation, or there may be a requirement
that a fund supply additional cash to a borrower on demand.
Purchasers of loans and other forms of direct indebtedness depend
primarily upon the creditworthiness of the borrower for payment of
interest and repayment of principal. If scheduled interest or
principal payments are not made, the value of the instrument may be
adversely affected. Loans that are fully secured provide more
protections than an unsecured loan in the event of failure to make
scheduled interest or principal payments. However, there is no
assurance that the liquidation of collateral from a secured loan would
satisfy the borrower's obligation, or that the collateral could be
liquidated. Indebtedness of borrowers whose creditworthiness is poor
involves substantially greater risks and may be highly speculative.
Borrowers that are in bankruptcy or restructuring may never pay off
their indebtedness, or may pay only a small fraction of the amount
owed. Direct indebtedness of developing countries also involves a risk
that the governmental entities responsible for the repayment of the
debt may be unable, or unwilling, to pay interest and repay principal
when due.
Investments in loans through direct assignment of a financial
institution's interests with respect to a loan may involve additional
risks. For example, if a loan is foreclosed, the purchaser could
become part owner of any collateral, and would bear the costs and
liabilities associated with owning and disposing of the collateral. In
addition, it is conceivable that under emerging legal theories of
lender liability, a purchaser could be held liable as a co-lender.
Direct debt instruments may also involve a risk of insolvency of the
lending bank or other intermediary.
A loan is often administered by a bank or other financial institution
that acts as agent for all holders. The agent administers the terms of
the loan, as specified in the loan agreement. Unless, under the terms
of the loan or other indebtedness, the purchaser has direct recourse
against the borrower, the purchaser may have to rely on the agent to
apply appropriate credit remedies against a borrower. If assets held
by the agent for the benefit of a purchaser were determined to be
subject to the claims of the agent's general creditors, the purchaser
might incur certain costs and delays in realizing payment on the loan
or loan participation and could suffer a loss of principal or
interest.
Direct indebtedness may include letters of credit, revolving credit
facilities, or other standby financing commitments that obligate
purchasers to make additional cash payments on demand. These
commitments may have the effect of requiring a purchaser to increase
its investment in a borrower at a time when it would not otherwise
have done so, even if the borrower's condition makes it unlikely that
the amount will ever be repaid.
Each fund limits the amount of total assets that it will invest in any
one issuer or in issuers within the same industry (see each fund's
investment limitations). For purposes of these limitations, a fund
generally will treat the borrower as the "issuer" of indebtedness held
by the fund. In the case of loan participations where a bank or other
lending institution serves as financial intermediary between a fund
and the borrower, if the participation does not shift to the fund the
direct debtor-creditor relationship with the borrower, SEC
interpretations require a fund, in appropriate circumstances, to treat
both the lending bank or other lending institution and the borrower as
"issuers" for these purposes. Treating a financial intermediary as an
issuer of indebtedness may restrict a fund's ability to invest in
indebtedness related to a single financial intermediary, or a group of
intermediaries engaged in the same industry, even if the underlying
borrowers represent many different companies and industries.
LOWER-QUALITY DEBT SECURITIES. Lower-quality debt securities have poor
protection with respect to the payment of interest and repayment of
principal, or may be in default. These securities are often considered
to be speculative and involve greater risk of loss or price changes
due to changes in the issuer's capacity to pay. The market prices of
lower-quality debt securities may fluctuate more than those of
higher-quality debt securities and may decline significantly in
periods of general economic difficulty, which may follow periods of
rising interest rates.
The market for lower-quality debt securities may be thinner and less
active than that for higher-quality debt securities, which can
adversely affect the prices at which the former are sold. Adverse
publicity and changing investor perceptions may affect the liquidity
of lower-quality debt securities and the ability of outside pricing
services to value lower-quality debt securities.
Because the risk of default is higher for lower-quality debt
securities, FMR's research and credit analysis are an especially
important part of managing securities of this type. FMR will attempt
to identify those issuers of high-yielding securities whose financial
condition is adequate to meet future obligations, has improved, or is
expected to improve in the future. FMR's analysis focuses on relative
values based on such factors as interest or dividend coverage, asset
coverage, earnings prospects, and the experience and managerial
strength of the issuer.
A fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise to exercise its rights as a security
holder to seek to protect the interests of security holders if it
determines this to be in the best interest of the fund's shareholders.
PREFERRED STOCK represents an equity or ownership interest in an
issuer that pays dividends at a specified rate and that has precedence
over common stock in the payment of dividends. In the event an issuer
is liquidated or declares bankruptcy, the claims of owners of bonds
take precedence over the claims of those who own preferred and common
stock.
REAL ESTATE INVESTMENT TRUSTS. Equity real estate investment trusts
own real estate properties, while mortgage real estate investment
trusts make construction, development, and long-term mortgage loans.
Their value may be affected by changes in the value of the underlying
property of the trusts, the creditworthiness of the issuer, property
taxes, interest rates, and tax and regulatory requirements, such as
those relating to the environment. Both types of trusts are dependent
upon management skill, are not diversified, and are subject to heavy
cash flow dependency, defaults by borrowers, self-liquidation, and the
possibility of failing to qualify for tax-free status of income under
the Internal Revenue Code and failing to maintain exemption from the
1940 Act.
REPURCHASE AGREEMENTS involve an agreement to purchase a security and
to sell that security back to the original seller at an agreed-upon
price. The resale price reflects the purchase price plus an
agreed-upon incremental amount which is unrelated to the coupon rate
or maturity of the purchased security. As protection against the risk
that the original seller will not fulfill its obligation, the
securities are held in a separate account at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus
the accrued incremental amount. The value of the security purchased
may be more or less than the price at which the counterparty has
agreed to purchase the security. In addition, delays or losses could
result if the other party to the agreement defaults or becomes
insolvent. The funds will engage in repurchase agreement transactions
with parties whose creditworthiness has been reviewed and found
satisfactory by FMR.
RESTRICTED SECURITIES are subject to legal restrictions on their sale.
Difficulty in selling securities may result in a loss or be costly to
a fund. Restricted securities generally can be sold in privately
negotiated transactions, pursuant to an exemption from registration
under the Securities Act of 1933, or in a registered public offering.
Where registration is required, the holder of a registered security
may be obligated to pay all or part of the registration expense and a
considerable period may elapse between the time it decides to seek
registration and the time it may be permitted to sell a security under
an effective registration statement. If, during such a period, adverse
market conditions were to develop, the holder might obtain a less
favorable price than prevailed when it decided to seek registration of
the security.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
fund sells a security to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase that
security at an agreed-upon price and time. The funds will enter into
reverse repurchase agreements with parties whose creditworthiness has
been reviewed and found satisfactory by FMR. Such transactions may
increase fluctuations in the market value of fund assets and may be
viewed as a form of leverage.
SECURITIES OF OTHER INVESTMENT COMPANIES, including shares of
closed-end investment companies, unit investment trusts, and open-end
investment companies, represent interests in professionally managed
portfolios that may invest in any type of instrument. Investing in
other investment companies involves substantially the same risks as
investing directly in the underlying instruments, but may involve
additional expenses at the investment company-level, such as portfolio
management fees and operating expenses. Certain types of investment
companies, such as closed-end investment companies, issue a fixed
number of shares that trade on a stock exchange or over-the-counter at
a premium or a discount to their net asset value. Others are
continuously offered at net asset value, but may also be traded in the
secondary market.
The extent to which a fund can invest in securities of other
investment companies is limited by federal securities laws.
SECURITIES LENDING. A fund may lend securities to parties such as
broker-dealers or other institutions, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange
(NYSE) and a subsidiary of FMR Corp.
Securities lending allows a fund to retain ownership of the securities
loaned and, at the same time, earn additional income. The borrower
provides the fund with collateral in an amount at least equal to the
value of the securities loaned. The fund maintains the ability to
obtain the right to vote or consent on proxy proposals involving
material events affecting securities loaned. If the borrower defaults
on its obligation to return the securities loaned because of
insolvency or other reasons, a fund could experience delays and costs
in recovering the securities loaned or in gaining access to the
collateral. These delays and costs could be greater for foreign
securities. If a fund is not able to recover the securities loaned, a
fund may sell the collateral and purchase a replacement investment in
the market. The value of the collateral could decrease below the value
of the replacement investment by the time the replacement investment
is purchased. Loans will be made only to parties deemed by FMR to be
in good standing and when, in FMR's judgment, the income earned would
justify the risks.
Cash received as collateral through loan transactions may be invested
in other eligible securities. Investing this cash subjects that
investment, as well as the securities loaned, to market appreciation
or depreciation.
SHORT SALES "AGAINST THE BOX" are short sales of securities that a
fund owns or has the right to obtain (equivalent in kind or amount to
the securities sold short). If a fund enters into a short sale against
the box, it will be required to set aside securities equivalent in
kind and amount to the securities sold short (or securities
convertible or exchangeable into such securities) and will be required
to hold such securities while the short sale is outstanding. The fund
will incur transaction costs, including interest expenses, in
connection with opening, maintaining, and closing short sales against
the box.
SWAP AGREEMENTS can be individually negotiated and structured to
include exposure to a variety of different types of investments or
market factors. Depending on their structure, swap agreements may
increase or decrease a fund's exposure to long- or short-term interest
rates (in the United States or abroad), foreign currency values,
mortgage securities, corporate borrowing rates, or other factors such
as security prices or inflation rates. Swap agreements can take many
different forms and are known by a variety of names.
In a typical cap or floor agreement, one party agrees to make payments
only under specified circumstances, usually in return for payment of a
fee by the other party. For example, the buyer of an interest rate cap
obtains the right to receive payments to the extent that a specified
interest rate exceeds an agreed-upon level, while the seller of an
interest rate floor is obligated to make payments to the extent that a
specified interest rate falls below an agreed-upon level. An interest
rate collar combines elements of buying a cap and selling a floor.
Swap agreements will tend to shift a fund's investment exposure from
one type of investment to another. For example, if the fund agreed to
exchange payments in dollars for payments in foreign currency, the
swap agreement would tend to decrease the fund's exposure to U.S.
interest rates and increase its exposure to foreign currency and
interest rates. Caps and floors have an effect similar to buying or
writing options. Depending on how they are used, swap agreements may
increase or decrease the overall volatility of a fund's investments
and its share price.
The most significant factor in the performance of swap agreements is
the change in the specific interest rate, currency, or other factors
that determine the amounts of payments due to and from a fund. If a
swap agreement calls for payments by the fund, the fund must be
prepared to make such payments when due. In addition, if the
counterparty's creditworthiness declined, the value of a swap
agreement would be likely to decline, potentially resulting in losses.
A fund may be able to eliminate its exposure under a swap agreement
either by assignment or other disposition, or by entering into an
offsetting swap agreement with the same party or a similarly
creditworthy party.
TEMPORARY DEFENSIVE POLICIES. Each fund reserves the right to invest
without limitation in preferred stocks and investment-grade debt
instruments for temporary, defensive purposes.
WARRANTS. Warrants are instruments which entitle the holder to buy an
equity security at a specific price for a specific period of time.
Changes in the value of a warrant do not necessarily correspond to
changes in the value of its underlying security. The price of a
warrant may be more volatile than the price of its underlying
security, and a warrant may offer greater potential for capital
appreciation as well as capital loss.
Warrants do not entitle a holder to dividends or voting rights with
respect to the underlying security and do not represent any rights in
the assets of the issuing company. A warrant ceases to have value if
it is not exercised prior to its expiration date. These factors can
make warrants more speculative than other types of investments.
ZERO COUPON BONDS do not make interest payments; instead, they are
sold at a discount from their face value and are redeemed at face
value when they mature. Because zero coupon bonds do not pay current
income, their prices can be more volatile than other types of
fixed-income securities when interest rates change. In calculating a
fund's dividend, a portion of the difference between a zero coupon
bond's purchase price and its face value is considered income.
PORTFOLIO TRANSACTIONS
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
management contract. FMR is also responsible for the placement of
transaction orders for other investment companies and investment
accounts for which it or its affiliates act as investment adviser. In
selecting broker-dealers, subject to applicable limitations of the
federal securities laws, FMR considers various relevant factors,
including, but not limited to: the size and type of the transaction;
the nature and character of the markets for the security to be
purchased or sold; the execution efficiency, settlement capability,
and financial condition of the broker-dealer firm; the broker-dealer's
execution services rendered on a continuing basis; the reasonableness
of any commissions; and, if applicable, arrangements for payment of
fund expenses.
If FMR grants investment management authority to a sub-adviser (see
the section entitled "Management Contracts"), that sub-adviser is
authorized to place orders for the purchase and sale of portfolio
securities, and will do so in accordance with the policies described
above.
Generally, commissions for investments traded on foreign exchanges
will be higher than for investments traded on U.S. exchanges and may
not be subject to negotiation.
Each fund may execute portfolio transactions with broker-dealers who
provide research and execution services to the fund or other
investment accounts over which FMR or its affiliates exercise
investment discretion. Such services may include advice concerning the
value of securities; the advisability of investing in, purchasing, or
selling securities; and the availability of securities or the
purchasers or sellers of securities. In addition, such broker-dealers
may furnish analyses and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy, and
performance of investment accounts; and effect securities transactions
and perform functions incidental thereto (such as clearance and
settlement).
The selection of such broker-dealers for transactions in equity
securities is generally made by FMR (to the extent possible consistent
with execution considerations) in accordance with a ranking of
broker-dealers determined periodically by FMR's investment staff based
upon the quality of research and execution services provided.
For transactions in fixed-income securities, FMR's selection of
broker-dealers is generally based on the availability of a security
and its price and, to a lesser extent, on the overall quality of
execution and other services, including research, provided by the
broker-dealer.
The receipt of research from broker-dealers that execute transactions
on behalf of a fund may be useful to FMR in rendering investment
management services to that fund or its other clients, and conversely,
such research provided by broker-dealers who have executed transaction
orders on behalf of other FMR clients may be useful to FMR in carrying
out its obligations to a fund. The receipt of such research has not
reduced FMR's normal independent research activities; however, it
enables FMR to avoid the additional expenses that could be incurred if
FMR tried to develop comparable information through its own efforts.
Fixed-income securities are generally purchased from an issuer or
underwriter acting as principal for the securities, on a net basis
with no brokerage commission paid. However, the dealer is compensated
by a difference between the security's original purchase price and the
selling price, the so-called "bid-asked spread." Securities may also
be purchased from underwriters at prices that include underwriting
fees.
Subject to applicable limitations of the federal securities laws, a
fund may pay a broker-dealer commissions for agency transactions that
are in excess of the amount of commissions charged by other
broker-dealers in recognition of their research and execution
services. In order to cause a fund to pay such higher commissions, FMR
must determine in good faith that such commissions are reasonable in
relation to the value of the brokerage and research services provided
by such executing broker-dealers, viewed in terms of a particular
transaction or FMR's overall responsibilities to that fund or its
other clients. In reaching this determination, FMR will not attempt to
place a specific dollar value on the brokerage and research services
provided, or to determine what portion of the compensation should be
related to those services.
To the extent permitted by applicable law, FMR is authorized to
allocate portfolio transactions in a manner that takes into account
assistance received in the distribution of shares of the funds or
other Fidelity funds and to use the research services of brokerage and
other firms that have provided such assistance. FMR may use research
services provided by and 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. [Prior to December 9, 1997, FMR used research services
provided by and placed agency transactions with Fidelity Brokerage
Services (FBS), an indirect subsidiary of FMR Corp.]
FMR may allocate brokerage transactions to broker-dealers (including
affiliates of FMR) who have entered into arrangements with FMR under
which the broker-dealer allocates a portion of the commissions paid by
a fund toward the reduction of that fund's expenses. The transaction
quality must, however, be comparable to those of other qualified
broker-dealers.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members
of national securities exchanges from executing exchange transactions
for investment accounts which they or their affiliates manage, unless
certain requirements are satisfied. Pursuant to such requirements, the
Board of Trustees has authorized NFSC to execute portfolio
transactions on national securities exchanges in accordance with
approved procedures and applicable SEC rules.
The Trustees of each fund periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio
transactions on behalf of the fund and review the commissions paid by
the fund over representative periods of time to determine if they are
reasonable in relation to the benefits to the fund.
For the fiscal periods ended April 30, 2000 and 1999, the portfolio
turnover rates were ___% and 170%, respectively, for Small Cap Stock,
___% and 121%, respectively, for Mid-Cap Stock, and ___% and 100%,
respectively, for Large Cap Stock. [Variations in turnover rate may be
due to a fluctuating volume of shareholder purchase and redemption
orders, market conditions, or changes in FMR's investment outlook.]
The following tables show the brokerage commissions paid by the funds.
Significant changes in brokerage commissions paid by a fund from year
to year may result from changing asset levels throughout the year. A
fund may pay both commissions and spreads in connection with the
placement of portfolio transactions. [For the fiscal year ended April
30, 2000, the funds paid no brokerage commissions.]
The first table below shows the total amount of brokerage commissions
paid by each fund.
Fiscal Year Ended April 30 Total Amount Paid
SMALL CAP STOCK
2000 $
1999 $1,750,721
1998* $395,608
MID-CAP STOCK
2000 $
1999 $3,271,336
1998 $3,508,794
LARGE CAP STOCK
2000 $
1999 $503,479
1998 $232,239
*From March 12, 1998 (commencement of operations).
The [first] table below shows the total amount of brokerage
commissions paid by each fund to NFSC for the past three fiscal years.
[The second table shows the approximate percentage of aggregate
brokerage commissions paid by a fund to NFSC for transactions
involving the approximate percentage of the aggregate dollar amount of
transactions for which the fund paid brokerage commissions for the
fiscal year ended 2000.] NFSC is paid on a commission basis.
Total Amount Paid
Fiscal Year Ended April 30 To NFSC
SMALL CAP STOCK
2000 $
1999 $
1998* $
MID-CAP STOCK
2000 $
1999 $
1998 $
LARGE CAP STOCK
2000 $
1999 $
1998 $
*From March 12, 1998 (commencement of operations).
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fiscal Year Ended 2000 % of Aggregate Commissions % of Aggregate Dollar Amount
Paid to NFSC of Transactions Effected
through NFSC
SMALL CAP STOCK[(dagger)] April 30 % %
MID-CAP STOCK[(dagger)] April 30 % %
LARGE CAP STOCK[(dagger)] April 30 % %
</TABLE>
[(dagger) The difference between the percentage of aggregate brokerage
commissions paid to, and the percentage of the aggregate dollar amount
of transactions effected through, NFSC is a result of the low
commission rates charged by NFSC.]
[NFSC has used a portion of the commissions paid by a fund to reduce
that fund's custodian or transfer agent fees.]
[The following table shows the dollar amount of brokerage commissions
paid to firms for providing research services and the approximate
dollar amount of the transactions involved for the fiscal year ended
2000.]
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fiscal Year Ended 2000 $ Amount of Commissions Paid $ Amount of Brokerage
to Firms that Provided Transactions Involved*
Research Services*
SMALL CAP STOCK April 30 $ $
MID-CAP STOCK April 30 $ $
LARGE CAP STOCK April 30 $ $
</TABLE>
*The provision of research services was not necessarily a factor in
the placement of all this business with such firms.
[For the fiscal year ended April 30, 2000 the funds paid no brokerage
commissions to firms for providing research services.]
The Trustees of each fund have approved procedures in conformity with
Rule 10f-3 under the 1940 Act whereby a fund may purchase securities
that are offered in underwritings in which an affiliate of FMR
participates. These procedures prohibit the funds from directly or
indirectly benefiting an FMR affiliate in connection with such
underwritings. In addition, for underwritings where an FMR affiliate
participates as a principal underwriter, certain restrictions may
apply that could, among other things, limit the amount of securities
that the funds could purchase in the underwriting.
From time to time the Trustees will review whether the recapture for
the benefit of the funds of some portion of the brokerage commissions
or similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at
present no other recapture arrangements are in effect. The Trustees
intend to continue to review whether recapture opportunities are
available and are legally permissible and, if so, to determine in the
exercise of their business judgment whether it would be advisable for
each fund to seek such recapture.
Although the Trustees and officers of each fund are substantially the
same as those of other funds managed by FMR or its affiliates,
investment decisions for each fund are made independently from those
of other funds or investment accounts managed by FMR or its
affiliates. It sometimes happens that the same security is held in the
portfolio of more than one of these funds or investment accounts.
Simultaneous transactions are inevitable when several funds and
investment accounts are managed by the same investment adviser,
particularly when the same security is suitable for the investment
objective of more than one fund or investment account.
When two or more funds are simultaneously engaged in the purchase or
sale of the same security, the prices and amounts are allocated in
accordance with procedures believed to be appropriate and equitable
for each fund. In some cases this system could have a detrimental
effect on the price or value of the security as far as each fund is
concerned. In other cases, however, the ability of the funds to
participate in volume transactions will produce better executions and
prices for the funds. It is the current opinion of the Trustees that
the desirability of retaining FMR as investment adviser to each fund
outweighs any disadvantages that may be said to exist from exposure to
simultaneous transactions.
VALUATION
Each fund's net asset value per share (NAV) is the value of a single
share. The NAV of each fund is computed by adding the value of the
fund's investments, cash, and other assets, subtracting its
liabilities, and dividing the result by the number of shares
outstanding.
Portfolio securities are valued by various methods depending on the
primary market or exchange on which they trade. Most equity securities
for which the primary market is the United States are valued at last
sale price or, if no sale has occurred, at the closing bid price. Most
equity securities for which the primary market is outside the United
States are valued using the official closing price or the last sale
price in the principal market in which they are traded. If the last
sale price (on the local exchange) is unavailable, the last evaluated
quote or closing bid price normally is used. Securities of other
open-end investment companies are valued at their respective NAVs.
Fixed-income securities and other assets for which market quotations
are readily available may be valued at market values determined by
such securities' most recent bid prices (sales prices if the principal
market is an exchange) in the principal market in which they normally
are traded, as furnished by recognized dealers in such securities or
assets. Or, fixed-income securities and convertible securities may be
valued on the basis of information furnished by a pricing service that
uses a valuation matrix which incorporates both dealer-supplied
valuations and electronic data processing techniques. Use of pricing
services has been approved by the Board of Trustees. A number of
pricing services are available, and the funds may use various pricing
services or discontinue the use of any pricing service.
Futures contracts and options are valued on the basis of market
quotations, if available.
Independent brokers or quotation services provide prices of foreign
securities in their local currency. Fidelity Service Company (FSC)
gathers all exchange rates daily at the close of the NYSE using the
last quoted price on the local currency and then translates the value
of foreign securities from their local currencies into U.S. dollars.
Any changes in the value of forward contracts due to exchange rate
fluctuations and days to maturity are included in the calculation of
NAV. If an event that is expected to materially affect the value of a
portfolio security occurs after the close of an exchange or market on
which that security is traded, then that security will be valued in
good faith by a committee appointed by the Board of Trustees.
Short-term securities with remaining maturities of sixty days or less
for which market quotations and information furnished by a pricing
service are not readily available are valued either at amortized cost
or at original cost plus accrued interest, both of which approximate
current value.
The procedures set forth above need not be used to determine the value
of the securities owned by a fund if, in the opinion of a committee
appointed by the Board of Trustees, some other method would more
accurately reflect the fair value of such securities. For example,
securities and other assets for which there is no readily available
market value may be valued in good faith by a committee appointed by
the Board of Trustees. In making a good faith determination of the
value of a security, the committee may review price movements in
futures contracts and ADRs, market and trading trends, the bid/ask
quotes of brokers and off-exchange institutional trading.
PERFORMANCE
A fund may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is
not intended to indicate future returns. Each fund's share price and
return fluctuate in response to market conditions and other factors,
and the value of fund shares when redeemed may be more or less than
their original cost.
RETURN CALCULATIONS. Returns quoted in advertising reflect all aspects
of a fund's return, including the effect of reinvesting dividends and
capital gain distributions, and any change in a fund's NAV over a
stated period. A cumulative return reflects actual performance over a
stated period of time. Average annual returns are calculated by
determining the growth or decline in value of a hypothetical
historical investment in a fund over a stated period, and then
calculating the annually compounded percentage rate that would have
produced the same result if the rate of growth or decline in value had
been constant over the period. For example, a cumulative return of
100% over ten years would produce an average annual return of 7.18%,
which is the steady annual rate of return that would equal 100% growth
on a compounded basis in ten years. While average annual returns are a
convenient means of comparing investment alternatives, investors
should realize that a fund's performance is not constant over time,
but changes from year to year, and that average annual returns
represent averaged figures as opposed to the actual year-to-year
performance of a fund.
In addition to average annual returns, a fund may quote unaveraged or
cumulative returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative returns
may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a
series of redemptions, over any time period. Returns may be broken
down into their components of income and capital (including capital
gains and changes in share price) in order to illustrate the
relationship of these factors and their contributions to return.
Returns may be quoted on a before-tax or after-tax basis. Returns may
or may not include the effect of a fund's trading fee. Excluding a
fund's trading fee from a return calculation produces a higher return
figure. Returns and other performance information may be quoted
numerically or in a table, graph, or similar illustration.
NET ASSET VALUE. Charts and graphs using a fund's NAVs, adjusted NAVs,
and benchmark indexes may be used to exhibit performance. An adjusted
NAV includes any distributions paid by a fund and reflects all
elements of its return. Unless otherwise indicated, a fund's adjusted
NAVs are not adjusted for sales charges, if any.
MOVING AVERAGES. A fund may illustrate performance using moving
averages. A long-term moving average is the average of each week's
adjusted closing NAV for a specified period. A short-term moving
average is the average of each day's adjusted closing NAV for a
specified period. Moving Average Activity Indicators combine adjusted
closing NAVs from the last business day of each week with moving
averages for a specified period to produce indicators showing when an
NAV has crossed, stayed above, or stayed below its moving average. The
13-week and 39-week long-term moving averages for each fund are shown
in the table below.
Fund 13-Week Long-Term Moving 39-Week Long-Term Moving
Average Average
Small Cap Stock* $ $
$ $
$ $
Mid-Cap Stock* $ $
$ $
$ $
Large Cap Stock* $ $
$ $
$ $
* On April 28, 2000.
HISTORICAL FUND RESULTS. The following table shows each fund's returns
for the fiscal periods ended April 30, 2000.
For Small Cap Stock, returns do not include the effect of the fund's
2 .00% trading fee, applicable to shares held less than three
years.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Average Annual Returns Cumulative Returns
One Year Five Years Life of Fund One Year Five Years Life of Fund
Small Cap Stock % n/a %* % n/a %*
Mid-Cap Stock % % %** % % %**
Large Cap Stock % % %*** % % %***
</TABLE>
* From March 12, 1998 (commencement of operations).
** From March 29, 1994 (commencement of operations).
*** From June 22, 1995 (commencement of operations).
[If FMR had not reimbursed certain funs expenses during these periods,
_______'s returns would have been lower.]
The following tables show the income and capital elements of each
fund's cumulative return. The tables compare each fund's return to the
record of the S&P 500, the Dow Jones Industrial Average (DJIA), and
the cost of living, as measured by the Consumer Price Index (CPI),
over the same period. The S&P 500 and DJIA comparisons are provided to
show how each fund's return compared to the record of a market
capitalization-weighted index of common stocks and a narrower set of
stocks of major industrial companies, respectively, over the same
period. Each fund has the ability to invest in securities not included
in either index, and its investment portfolio may or may not be
similar in composition to the indexes. The S&P 500 and DJIA returns
are based on the prices of unmanaged groups of stocks and, unlike each
fund's returns, do not include the effect of brokerage commissions or
other costs of investing.
The following tables show the growth in value of a hypothetical
$10,000 investment in each fund during the life of each fund, assuming
all distributions were reinvested. Returns are based on past results
and are not an indication of future performance. Tax consequences of
different investments have not been factored into the figures below.
During the period from March 12, 1998 (commencement of operations) to
April 30, 2000, a hypothetical $10,000 investment in Small Cap Stock
would have grown to $______.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SMALL CAP STOCK INDEXES
Fiscal Year
Ended Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value S&P 500
Investment Distributions Gain Distributions
2000 $ $ $ $ $
1999 $ $ $ $ $
1998* $ $ $ $ $
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SMALL CAP STOCK INDEXES
Fiscal Year Ended DJIA Cost of Living**
2000 $ $
1999 $ $
1998* $ $
</TABLE>
* From March 12, 1998 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Small Cap
Stock on March 12, 1998, the net amount invested in fund shares was
$10,000. The cost of the initial investment ($10,000) together with
the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time
they were reinvested) amounted to $______. If distributions had not
been reinvested, the amount of distributions earned from the fund over
time would have been smaller, and cash payments for the period would
have amounted to $______ for dividends and $_____ for capital gain
distributions. The figures in the table do not include the effect of
the fund's 2 .00% trading fee applicable to shares held less
than three years.
During the period from March 29, 1994 (commencement of operations) to
April 30, 2000, a hypothetical $10,000 investment in Mid-Cap Stock
would have grown to $______.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
MID-CAP STOCK INDEXES
Fiscal Year
Ended Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value S&P 500
Investment Distributions Gain Distributions
2000 $ $ $ $ $
1999 $ $ $ $ $
1998 $ $ $ $ $
1997 $ $ $ $ $
1996 $ $ $ $ $
1995 $ $ $ $ $
1994* $ $ $ $ $
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
MID-CAP STOCK INDEXES
Fiscal Year Ended DJIA Cost of Living**
2000 $ $
1999 $ $
1998 $ $
1997 $ $
1996 $ $
1995 $ $
1994* $ $
</TABLE>
* From March 29, 1994 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Mid-Cap
Stock on March 29, 1994, the net amount invested in fund shares was
$10,000. The cost of the initial investment ($10,000) together with
the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time
they were reinvested) amounted to $______. If distributions had not
been reinvested, the amount of distributions earned from the fund over
time would have been smaller, and cash payments for the period would
have amounted to $______ for dividends and $_____ for capital gain
distributions.
During the period from June 22, 1995 (commencement of operations) to
April 30, 2000, a hypothetical $10,000 investment in Large Cap Stock
would have grown to $______.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
LARGE CAP STOCK INDEXES
Fiscal Year
Ended Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value S&P 500
Investment Distributions Gain Distributions
2000 $ $ $ $ $
1999 $ $ $ $ $
1998 $ $ $ $ $
1997 $ $ $ $ $
1996* $ $ $ $ $
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
LARGE CAP STOCK INDEXES
Fiscal Year Ended DJIA Cost of Living**
2000 $ $
1999 $ $
1998 $ $
1997 $ $
1996* $ $
</TABLE>
* From June 22, 1995 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Large Cap
Stock on June 22, 1995, the net amount invested in fund shares was
$10,000. The cost of the initial investment ($10,000) together with
the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time
they were reinvested) amounted to $______. If distributions had not
been reinvested, the amount of distributions earned from the fund over
time would have been smaller, and cash payments for the period would
have amounted to $______ for dividends and $_____ for capital gain
distributions.
PERFORMANCE COMPARISONS. A fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed
as mutual fund rankings prepared by Lipper Inc. (Lipper), an
independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Generally, Lipper rankings are based on
return, assume reinvestment of distributions, do not take sales
charges or trading fees into consideration, and are prepared without
regard to tax consequences. In addition to the mutual fund rankings, a
fund's performance may be compared to stock, bond, and money market
mutual fund performance indexes prepared by Lipper or other
organizations. When comparing these indexes, it is important to
remember the risk and return characteristics of each type of
investment. For example, while stock mutual funds may offer higher
potential returns, they also carry the highest degree of share price
volatility. Likewise, money market funds may offer greater stability
of principal, but generally do not offer the higher potential returns
available from stock mutual funds.
From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and
periodicals. For example, a fund may quote Morningstar, Inc. in its
advertising materials. Morningstar, Inc. is a mutual fund rating
service that rates mutual funds on the basis of risk-adjusted
performance. Rankings that compare the performance of Fidelity funds
to one another in appropriate categories over specific periods of time
may also be quoted in advertising.
A fund's performance may also be compared to that of each benchmark
index representing the universe of securities in which the fund may
invest. The return of each index reflects reinvestment of all
dividends and capital gains paid by securities included in each index.
Unlike a fund's returns, however, each index's returns do not reflect
brokerage commissions, transaction fees, or other costs of investing
directly in the securities included in the index.
Small Cap Stock may compare its performance to that of the Russell
2000(registered trademark) Index, a market capitalization-weighted
index of 2,000 small company stocks.
Mid-Cap Stock may compare its performance to that of the Standard &
Poor's MidCap 400(registered trademark) Index, a market
capitalization-weighted index of 400 medium-capitalization stocks.
Large Cap Stock may compare its performance to that of the Standard &
Poor's 500 Index, a market capitalization-weighted index of common
stocks.
A fund may be compared in advertising to Certificates of Deposit (CDs)
or other investments issued by banks or other depository institutions.
Mutual funds differ from bank investments in several respects. For
example, a fund may offer greater liquidity or higher potential
returns than CDs, a fund does not guarantee an investor's principal or
return, and fund shares are not FDIC insured.
Fidelity may provide information designed to help individuals
understand their investment goals and explore various financial
strategies. Such information may include information about current
economic, market, and political conditions; materials that describe
general principles of investing, such as asset allocation,
diversification, risk tolerance, and goal setting; questionnaires
designed to help create a personal financial profile; worksheets used
to project savings needs based on assumed rates of inflation and
hypothetical rates of return; and action plans offering investment
alternatives. Materials may also include discussions of Fidelity's
asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides
historical returns of the capital markets in the United States,
including common stocks, small capitalization stocks, long-term
corporate bonds, intermediate-term government bonds, long-term
government bonds, Treasury bills, the U.S. rate of inflation (based on
the CPI), and combinations of various capital markets. The performance
of these capital markets is based on the returns of different indexes.
Fidelity funds may use the performance of these capital markets in
order to demonstrate general risk-versus-reward investment scenarios.
Performance comparisons may also include the value of a hypothetical
investment in any of these capital markets. The risks associated with
the security types in any capital market may or may not correspond
directly to those of the funds. Ibbotson calculates returns in the
same method as the funds. The funds may also compare performance to
that of other compilations or indexes that may be developed and made
available in the future.
In advertising materials, Fidelity may reference or discuss its
products and services, which may include other Fidelity funds;
retirement investing; brokerage products and services; model
portfolios or allocations; saving for college or other goals; and
charitable giving. In addition, Fidelity may quote or reprint
financial or business publications and periodicals as they relate to
current economic and political conditions, fund management, portfolio
composition, investment philosophy, investment techniques, the
desirability of owning a particular mutual fund, and Fidelity services
and products. Fidelity may also reprint, and use as advertising and
sales literature, articles from Fidelity Focus(Registered trademark),
a quarterly magazine provided free of charge to Fidelity fund
shareholders.
A fund may present its fund number, Quotron(trademark) number, and
CUSIP number, and discuss or quote its current portfolio manager.
VOLATILITY. A fund may quote various measures of volatility and
benchmark correlation in advertising. In addition, the fund may
compare these measures to those of other funds. Measures of volatility
seek to compare a fund's historical share price fluctuations or
returns to those of a benchmark. Measures of benchmark correlation
indicate how valid a comparative benchmark may be. All measures of
volatility and correlation are calculated using averages of historical
data.
MOMENTUM INDICATORS indicate a fund's price movements over specific
periods of time. Each point on the momentum indicator represents a
fund's percentage change in price movements over that period.
A fund may advertise examples of the effects of periodic investment
plans, including the principle of dollar cost averaging. In such a
program, an investor invests a fixed dollar amount in a fund at
periodic intervals, thereby purchasing fewer shares when prices are
high and more shares when prices are low. While such a strategy does
not assure a profit or guard against loss in a declining market, the
investor's average cost per share can be lower than if fixed numbers
of shares are purchased at the same intervals. In evaluating such a
plan, investors should consider their ability to continue purchasing
shares during periods of low price levels.
A fund may be available for purchase through retirement plans or other
programs offering deferral of, or exemption from, income taxes, which
may produce superior after-tax returns over time. For example, a
$1,000 investment earning a taxable return of 10% annually would have
an after-tax value of $1,949 after ten years, assuming tax was
deducted from the return each year at a 31% rate. An equivalent
tax-deferred investment would have an after-tax value of $2,100 after
ten years, assuming tax was deducted at a 31% rate from the
tax-deferred earnings at the end of the ten-year period.
As of April 30, 2000, FMR advised over $__ billion in municipal fund
assets, $__ billion in taxable fixed-income fund assets, $__ billion
in money market fund assets, $___ billion in equity fund assets, $__
billion in international fund assets, and $___ billion in
Spartan(registered trademark) fund assets. The funds may reference the
growth and variety of money market mutual funds and the adviser's
innovation and participation in the industry. The equity funds under
management figure represents the largest amount of equity fund assets
under management by a mutual fund investment adviser in the United
States, making FMR America's leading equity (stock) fund manager. FMR,
its subsidiaries, and affiliates maintain a worldwide information and
communications network for the purpose of researching and managing
investments abroad.
ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION
A fund may make redemption payments in whole or in part in readily
marketable securities or other property, valued for this purpose as
they are valued in computing each fund's NAV, if FMR determines it is
in the best interests of the fund. Shareholders that receive
securities or other property on redemption may realize a gain or loss
for tax purposes, and will incur any costs of sale, as well as the
associated inconveniences.
DISTRIBUTIONS AND TAXES
DIVIDENDS. A portion of each fund's income may qualify for the
dividends-received deduction available to corporate shareholders to
the extent that the fund's income is derived from qualifying
dividends. Because each fund may earn other types of income, such as
interest, short-term capital gains, and non-qualifying dividends, the
percentage of dividends from the fund that qualifies for the deduction
generally will be less than 100%. A portion of each fund's dividends
derived from certain U.S. Government securities and securities of
certain other investment companies may be exempt from state and local
taxation.
CAPITAL GAIN DISTRIBUTIONS. Each fund's long-term capital gain
distributions are federally taxable to shareholders generally as
capital gains.
[As of April 30, 2000, ______ had an aggregate capital loss
carryforward of approximately $____. This loss carryforward, of which
$___, $___, and $___will expire on ______ is available to offset
future capital gains [, subject to certain limitations].]
RETURNS OF CAPITAL. If a fund's distributions exceed its taxable
income and capital gains realized during a taxable year, all or a
portion of the distributions made in the same taxable year may be
recharacterized as a return of capital to shareholders. A return of
capital distribution will generally not be taxable, but will reduce
each shareholder's cost basis in the fund and result in a higher
reported capital gain or lower reported capital loss when those shares
on which the distribution was received are sold.
FOREIGN TAX CREDIT OR DEDUCTION. Foreign governments may withhold
taxes on dividends and interest earned by a fund with respect to
foreign securities. Foreign governments may also impose taxes on other
payments or gains with respect to foreign securities. Because each
fund does not currently anticipate that securities of foreign issuers
will constitute more than 50% of its total assets at the end of its
fiscal year, shareholders should not expect to be eligible to claim a
foreign tax credit or deduction on their federal income tax returns
with respect to foreign taxes withheld.
TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a
"regulated investment company" under Subchapter M of the Internal
Revenue Code so that it will not be liable for federal tax on income
and capital gains distributed to shareholders. In order to qualify as
a regulated investment company, and avoid being subject to federal
income or excise taxes at the fund level, each fund intends to
distribute substantially all of its net investment income and net
realized capital gains within each calendar year as well as on a
fiscal year basis, and intends to comply with other tax rules
applicable to regulated investment companies.
OTHER TAX INFORMATION. The information above is only a summary of some
of the tax consequences generally affecting each fund and its
shareholders, and no attempt has been made to discuss individual tax
consequences. It is up to you or your tax preparer to determine
whether the sale of shares of a fund resulted in a capital gain or
loss or other tax consequence to you. In addition to federal income
taxes, shareholders may be subject to state and local taxes on fund
distributions, and shares may be subject to state and local personal
property taxes. Investors should consult their tax advisers to
determine whether a fund is suitable to their particular tax
situation.
TRUSTEES AND OFFICERS
The Trustees, Member of the Advisory Board, and executive officers of
the trust and funds, as applicable, are listed below. The Board of
Trustees governs each fund and is responsible for protecting the
interests of shareholders. The Trustees are experienced executives who
meet periodically throughout the year to oversee each fund's
activities, review contractual arrangements with companies that
provide services to each fund, and review each fund's performance.
Except as indicated, each individual has held the office shown or
other offices in the same company for the last five years. All persons
named as Trustees and Members of the Advisory Board also serve in
similar capacities for other funds advised by FMR or its affiliates.
The business address of each Trustee and officer who is an "interested
person" (as defined in the 1940 Act) is 82 Devonshire Street, Boston,
Massachusetts 02109, which is also the address of FMR. The business
address of all the other Trustees is Fidelity Investments(registered
trademark), P.O. Box 9235, Boston, Massachusetts 02205-9235. Those
Trustees who are "interested persons" by virtue of their affiliation
with either the trust or FMR are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (69), Trustee, is President of Small Cap Stock,
Mid-Cap Stock, and Large Cap Stock. Mr. Johnson also serves as
President of other Fidelity funds. He is Chief Executive Officer,
Chairman, 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 Management & Research (U.K.) Inc. and of Fidelity
Management & Research (Far East) Inc.; Chairman (1998) and a Director
(1997) of Fidelity Investments Money Management, Inc.; Chairman and
Representative Director of Fidelity Investments Japan Limited (1997);
and a Director of FDC and of FMR Co., Inc. (2000). Abigail Johnson,
Vice President of Small Cap Stock, Mid-Cap Stock, and Large Cap Stock,
is Mr. Johnson's daughter.
ABIGAIL P. JOHNSON (38), is Vice President of certain Equity Funds
(1997), and is a Director of FMR Corp. (1994). Before assuming her
current responsibilities, Ms. Johnson managed a number of Fidelity
funds. Edward C. Johnson 3d, Trustee and President of the Funds, is
Ms. Johnson's father.
J. MICHAEL COOK (_), Member of the Advisory Board (2000). Prior to Mr.
Cook's retireme nt in May 1999, he served as Chairman and Chief
Executive Officer of Deloitte & Touche LLP, Chairman of the Deloitte &
Touche Foundation, and a member of the Board of Deloitte Touche
Tohmatsu. He currently serves as an Executive in Residence of the
Columbia Business School and as a Director of Dow Chemical Company
(2000), Columbia/HCA Healthcare Corporation (1999), and Children First
(1999). He is a member of the Executive Committee of the Securities
Regulation Institute, a member of the Advisory Board of Boardroom
Consultants, a Director of the National Forum for Health Care Quality,
Measurement and Reporting, past chairman and a member of the Board of
Catalyst (a leading organization for the advancement of women in
business), and is a Director of the STAR Foundation (Society to
Advance the Retarded and Handicapped). He also serves as a member of
the Board and Executive Committee and as Co-Chairman of the Audit and
Finance Committee of the Center for Strategic & International Studies,
a member of the Board of Overseers of the Columbia Business School,
and a Member of the Advisory Board of the Graduate School of Business
of the University of Florida.
RALPH F. COX (67), Trustee, is President of RABAR 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 Waste Management
Inc. (non-hazardous waste, 1993), CH2M Hill Companies (engineering),
and Bonneville Pacific (independent power and petroleum production).
In addition, he is a member of advisory boards of Texas A&M University
and the University of Texas at Austin.
PHYLLIS BURKE DAVIS (68), Trustee. Mrs. Davis is retired from Avon
Products, Inc. where she held various positions including Senior Vice
President of Corporate Affairs and Group Vice President of U.S. sales,
distribution, and manufacturing. She is currently a Director of
BellSouth Corporation (telecommunications), Eaton Corporation
(manufacturing), and the TJX Companies, Inc. (retail stores), and
previously served as a Director of Hallmark Cards, Inc., Nabisco
Brands, Inc., and Standard Brands, Inc. In addition, she is a member
of the Board of Directors of the Southampton Hospital in Southampton,
N.Y. (1998).
ROBERT M. GATES (56), Trustee (1997), is a consultant, author, and
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 Charles Stark Draper
Laboratory (non-profit), NACCO Industries, Inc. (mining and
manufacturing), and TRW Inc. (automotive, space, defense, and
information technology). Mr. Gates previously served as a Director of
LucasVarity PLC (automotive components and diesel engines). He is
currently serving as Dean of the George Bush School of Government and
Public Service at Texas A & M University (1999-2000). 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.
DONALD J. KIRK (67), Trustee, is Executive-in-Residence (1995) at
Columbia University Graduate School of Business. 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 as a Director
of 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), Vice Chairman 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).
NED C. LAUTENBACH (56), Trustee (2000), has been a partner of Clayton,
Dubilier & Rice, Inc. (private equity investment firm) since September
1998. Mr. Lautenbach was Senior Vice President of IBM Corporation from
1992 until his retirement in July 1998. From 1993 to 1995 he was
Chairman of IBM World Trade Corporation. He also was a member of IBM's
Corporate Executive Committee from 1994 to July 1998. He is a Director
of PPG Industries Inc. (glass, coating and chemical manufacturer),
Dynatech Corporation (global communications equipment), Eaton
Corporation (global manufacturer of highly engineered products) and
ChoicePoint Inc. (data identification, retrieval, storage, and
analysis).
*PETER S. LYNCH (57), Trustee, is Vice Chairman and a Director of FMR;
and a Director of FMR Co., Inc. (2000). 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(registered trademark) 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 (66), Trustee (1997), is the Interim Chancellor for
the University of North Carolina at Chapel Hill. Previously he had
served from 1995 through 1998 as Vice President of Finance for the
University of North Carolina (16-school system). 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), Duke-Weeks Realty Corporation
(real estate, 1994), Carolina Power and Light Company (electric
utility, 1996), the Kenan Transport Company (trucking, 1996), and
Dynatech Corporation (electronics, 1999). Previously, he was a
Director of First American Corporation (bank holding company,
1979-1996). In addition, Mr. McCoy served as a member of the Board of
Visitors for the University of North Carolina at Chapel Hill
(1994-1998) and currently serves on the Board of Visitors of the
Kenan-Flager Business School (University of North Carolina at Chapel
Hill, 1988).
GERALD C. McDONOUGH (71), Trustee and Chairman of the non-interested
Trustees, is Chairman of G.M. Management Group (strategic advisory
services). Mr. McDonough is a Director and Chairman of the Board 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 (67), Trustee (1993), is Chairman Emeritus of Lexmark
International, Inc. (office machines, 1991) where he still remains a
member of the Board. 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), Imation Corp. (imaging and information storage, 1997). He is a
Board member of Dynatech Corporation (electronics, 1999).
*ROBERT C. POZEN (53), Trustee (1997), is Senior Vice President of
Small Cap Stock, Mid-Cap Stock and Large Cap Stock (1997). Mr. Pozen
also serves as Senior Vice President of other Fidelity funds (1997).
He is President and a Director of FMR (1997), Fidelity Management &
Research (U.K.) Inc. (1997), Fidelity Management & Research (Far East)
Inc. (1997), Fidelity Investments Money Management, Inc. (1998), and
FMR Vo., Inc. (2000); and a Director of Strategic Advisers, Inc.
(1999). Previously, Mr. Pozen served as General Counsel, Managing
Director, and Senior Vice President of FMR Corp.
THOMAS R. WILLIAMS (71), Trustee, is President of The Wales Group,
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 National Life Insurance Company of Vermont and American Software,
Inc. Mr. Williams was previously a Director of ConAgra, Inc.
(agricultural products), Georgia Power Company (electric utility), and
Avado, Inc. (restaurants).
[Portfolio Managers: KAREN FIRESTONE (Large Cap), DAVID FELMAN
(Mid-Cap) & PAUL ANTICO (Small Cap).]
ERIC D. ROITER (51), is Secretary of Small Cap Stock, Mid-Cap Stock,
and Large Cap Stock (1998). He also serves as Secretary of other
Fidelity funds (1998); Vice President, General Counsel, and Clerk of
FMR (1998); and Vice President and Clerk of FDC (1998). Prior to
joining Fidelity, Mr. Roiter was with the law firm of Debevoise &
Plimpton, as an associate (1981-1984) and as a partner (1985-1997),
and served as an Assistant General Counsel of the U.S. Securities and
Exchange Commission (1979-1981). Mr. Roiter was an Adjunct Member,
Faculty of Law, at Columbia University Law School (1996-1997).
ROBERT A. DWIGHT (41), is Treasurer of Small Cap Stock, Mid-Cap Stock,
and Large Cap Stock (2000). Mr. Dwight also serves as Treasurer of
other Fidelity funds (2000) and is an employee of FMR. Prior to
becoming Treasurer of the Fidelity funds, he served as President of
Fidelity Accounting and Custody Services (FACS). Before joining
Fidelity, Mr. Dwight was Senior Vice President of fund accounting
operations for The Boston Company.
MARIA F. DWYER (41), is Deputy Treasurer of Small Cap Stock, Mid-Cap
Stock, and Large Cap Stock (2000). She also serves as Deputy Treasurer
of other Fidelity funds and is a Vice President (1999) and an employee
(1996) of FMR. Prior to joining Fidelity, Ms. Dwyer served as Director
of Compliance for MFS Investment Management.
MATTHEW N. KARSTETTER (38), is Deputy Treasurer of Small Cap Stock,
Mid-Cap Stock, and Large Cap Stock (1998). He also serves as Deputy
Treasurer of other Fidelity funds (1998) and is an employee of FMR
(1998). Before joining FMR, Mr. Karstetter served as Vice President of
Investment Accounting and Treasurer of IDS Mutual Funds at American
Express Financial Advisors (1996-1998). Prior to 1996, Mr. Karstetter
was Vice President, Mutual Fund Services at State Street Bank & Trust
(1991-1996).
JOHN H. COSTELLO (53), is Assistant Treasurer of Small Cap Stock,
Mid-Cap Stock, and Large Cap Stock. Mr Costello also serves as
Assistant Treasurer of other Fidelity funds and is an employee of FMR.
The following table sets forth information describing the compensation
of each Trustee of each fund for his or her services for the fiscal
year ended April 30, 2000, or calendar year ended December 31, 1999,
as applicable.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMPENSATION TABLE
Trustees and Member of the Aggregate Compensation from Aggregate Compensation from Aggregate Compensation from
Advisory Board Small Cap Stock [B,]C Mid-Cap Stock [B,]D Large Cap Stock [B,]E
Edward C. Johnson 3d ** $ 0 $ 0 $ 0
J. Michael Cook***** $ 0 $ 0 $ 0
Ralph F. Cox $ $ $
Phyllis Burke Davis $ $ $
Robert M. Gates $ $ $
E. Bradley Jones**** $ $ $
Donald J. Kirk $ $ $
Ned C. Lautenbach *** $ 0 $ 0 $ 0
Peter S. Lynch ** $ 0 $ 0 $ 0
William O. McCoy $ $ $
Gerald C. McDonough $ $ $
Marvin L. Mann $ $ $
Robert C. Pozen** $ 0 $ 0 $ 0
Thomas R. Williams $ $ $
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
COMPENSATION TABLE
Trustees and Member of the Total Compensation from the
Advisory Board Fund Complex* A
Edward C. Johnson 3d ** $ 0
J. Michael Cook***** $ 0
Ralph F. Cox $ 217,500
Phyllis Burke Davis $ 0
Robert M. Gates $ 217,500
E. Bradley Jones**** $ 217,500
Donald J. Kirk $ 217,500
Ned C. Lautenbach *** $ 54,000
Peter S. Lynch ** $ 0
William O. McCoy $ 214,500
Gerald C. McDonough $ 269,000
Marvin L. Mann $ 217,500
Robert C. Pozen** $ 0
Thomas R. Williams $213,000
</TABLE>
* Information is for the calendar year ended December 31, 1999 for 236
funds in the complex.
** Interested Trustees of the funds are compensated by FMR.
*** During the period from October 14, 1999 through December 31, 1999,
Mr. Lautenbach served as a Member of the Advisory Board. Effective
January 1, 2000, Mr. Lautenbach serves as a Member of the Board of
Trustees.
**** Mr. Jones served on the Board of Trustees through December 31,
1999.
***** Effective April 1, 2000, Mr. Cook serves as a Member of the
Advisory Board.
A Compensation figures include cash, amounts required to be deferred,
and may include amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1999, 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, $53,735; William O. McCoy, $53,735; and Thomas
R. Williams, $62,319.
[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: Ralph F. Cox, $__; Phyllis Burke Davis, $__;
Robert M. Gates, $__; E. Bradley Jones, $__; Donald J. Kirk, $__;
William O. McCoy, $__; Gerald C. McDonough, $__; Marvin L. Mann, $__;
and Thomas R. Williams, $__.]
[D The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $__; Phyllis Burke Davis, $__;
Robert M. Gates, $__; E. Bradley Jones, $__; Donald J. Kirk, $__;
William O. McCoy, $__; Gerald C. McDonough, $__; Marvin L. Mann, $__;
and Thomas R. Williams, $__.]
[E The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $__; Phyllis Burke Davis, $__;
Robert M. Gates, $__; E. Bradley Jones, $__; Donald J. Kirk, $__;
William O. McCoy, $__; Gerald C. McDonough, $__; Marvin L. Mann, $__;
and Thomas R. Williams, $__.]
[F Certain of the non-interested Trustees' aggregate compensation from
a fund includes accrued voluntary deferred compensation as
follows:____________________; ___________________________; and
_____________________________.]
Under a deferred compensation plan adopted in September 1995 and
amended in November 1996 and January 2000 (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 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.
[As of April 30, 2000, approximately __% of ________'s total
outstanding shares was held by [FMR] [[and] [an] FMR affiliate[s]].
FMR Corp. is the ultimate parent company of [FMR] [[and] [this/these]
FMR affiliate[s]]. By virtue of their ownership interest in FMR Corp.,
as described in the "Control of Investment Advisers" section on page
___, Mr. Edward C. Johnson 3d, President and Trustee of the fund, and
Ms. Abigail P. Johnson, Vice President of the fund, may be deemed to
be a beneficial owner of these shares. As of the above date, with the
exception of Mr. Johnson 3d's and Ms. Johnson's deemed ownership of
_____'s shares, the Trustees and officers of the funds owned, in the
aggregate, less than __% of each fund's total outstanding shares.]
[As of April 30, 2000, the Trustees and officers of each fund owned,
in the aggregate, less than __% of _____'s total outstanding shares.]
[As of April 30, 2000, the following owned of record or beneficially
5% or more (up to and including 25%) of __________'s outstanding
shares:]
[As of April 30, 2000, approximately ____% of ____________'s total
outstanding shares were held by _________; approximately ___% of
__________'s total outstanding shares were held by _________; and
approximately ___% of _________'s total outstanding shares were held
by ___________.]
[A shareholder owning of record or beneficially more than 25% of a
fund's outstanding shares may be considered a controlling person. That
shareholder's vote could have a more significant effect on matters
presented at a shareholders' meeting than votes of other
shareholders.]
CONTROL OF INVESTMENT ADVISERS
FMR Corp., organized in 1972, is the ultimate parent company of FMR,
Fidelity Management & Research (U.K.) Inc. (FMR U.K.), Fidelity
Management & Research (Far East) Inc. (FMR Far East), and FMR Co.,
Inc. (FMRC). The voting common stock of FMR Corp. is divided into two
classes. Class B is held predominantly by members of the Edward C.
Johnson 3d family and is entitled to 49% of the vote on any matter
acted upon by the voting common stock. Class A is held predominantly
by non-Johnson family member employees of FMR Corp. and its affiliates
and is entitled to 51% of the vote on any such matter. The Johnson
family group and all other Class B shareholders have entered into a
shareholders' voting agreement under which all Class B shares will be
voted in accordance with the majority vote of Class B shares. Under
the 1940 Act, control of a company is presumed where one individual or
group of individuals owns more than 25% of the voting stock of that
company. Therefore, through their ownership of voting common stock and
the execution of the shareholders' voting agreement, members of the
Johnson family may be deemed, under the 1940 Act, to form a
controlling group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by its division, Fidelity Investments Retail Marketing
Company, which provides marketing services to various companies within
the Fidelity organization.
Fidelity International Limited (FIL), a Bermuda company formed in
1968, is the ultimate parent company of Fidelity Investments Japan
Limited (FIJ). Edward C. Johnson 3d, Johnson family members, and
various trusts for the benefit of the Johnson family own, directly or
indirectly, more than 25% of the voting common stock of FIL. FIL
provides investment advisory services to non-U.S. investment companies
and institutional investors investing in securities throughout the
world.
The funds, FMR, FMRC, FMR U.K., FMR Far East, FIJ, and FDC have
adopted a code of ethics under Rule 17j-1 of the Investment Company
Act of 1940 that sets forth employees' fiduciary responsibilities
regarding the funds, establishes procedures for personal investing,
and restricts certain transactions. Employees subject to the code of
ethics, including Fidelity investment personnel, may invest in
securities for their own investment accounts, including securities
that may be purchased or held by the funds.
MANAGEMENT CONTRACTS
Each fund has entered into a management contract with FMR, pursuant to
which FMR furnishes investment advisory and other services.
MANAGEMENT SERVICES. Under the terms of 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 the
fund in accordance with its investment objective, policies and
limitations. FMR also provides each fund with all necessary office
facilities and personnel for servicing the 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 securities laws and
making necessary filings under state securities laws; developing
management and shareholder services for each fund; and furnishing
reports, evaluations and analyses on a variety of subjects to the
Trustees.
MANAGEMENT-RELATED EXPENSES. In addition to the management fee payable
to FMR and the fees payable to the transfer, dividend disbursing, and
shareholder servicing agent , pricing and bookkeeping agent, and the
costs associated with securities lending, as applicable, each fund
pays all of its expenses that are not assumed by those parties. Each
fund pays for the typesetting, printing, and mailing of its proxy
materials to shareholders, legal expenses, and the fees of the
custodian, auditor, and non-interested Trustees. Each fund's
management contract further provides that the fund will pay for
typesetting, printing, and mailing prospectuses, statements of
additional information, notices, and reports to shareholders; however,
under the terms of each fund's transfer agent agreement, the transfer
agent bears the costs of providing these services to existing
shareholders. Other expenses paid by each fund include interest,
taxes, brokerage commissions, the fund's proportionate share of
insurance premiums and Investment Company Institute dues, and the
costs of registering shares under federal securities laws and making
necessary filings under state securities laws. 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.
MANAGEMENT FEES. For the services of FMR under the management
contract, 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 Small Cap Stock's performance to that of the Russell
2000, Mid-Cap Stock's performance to that of the S&P MidCap 400, and
Large Cap Stock's performance to that of the S&P 500.
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.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Assets Annualized Rate Group Net Assets Effective Annual Fee Rate
0 - $3 billion .5200% $ 1 billion .5200%
3 - 6 .4900 50 .3823
6 - 9 .4600 100 .3512
9 - 12 .4300 150 .3371
12 - 15 .4000 200 .3284
15 - 18 .3850 250 .3219
18 - 21 .3700 300 .3163
21 - 24 .3600 350 .3113
24 - 30 .3500 400 .3067
30 - 36 .3450 450 .3024
36 - 42 .3400 500 .2982
42 - 48 .3350 550 .2942
48 - 66 .3250 600 .2904
66 - 84 .3200 650 .2870
84 - 102 .3150 700 .2838
102 - 138 .3100 750 .2809
138 - 174 .3050 800 .2782
174 - 210 .3000 850 .2756
210 - 246 .2950 900 .2732
246 - 282 .2900 950 .2710
282 - 318 .2850 1,000 .2689
318 - 354 .2800 1,050 .2669
354 - 390 .2750 1,100 .2649
390 - 426 .2700 1,150 .2631
426 - 462 .2650 1,200 .2614
462 - 498 .2600 1,250 .2597
498 - 534 .2550 1,300 .2581
534 - 587 .2500 1,350 .2566
587 - 646 .2463 1,400 .2551
646 - 711 .2426
711 - 782 .2389
782 - 860 .2352
860 - 946 .2315
946 - 1,041 .2278
1,041 - 1,145 .2241
1,145 - 1,260 .2204
Over 1,260 .2167
</TABLE>
The group fee rate is calculated on a cumulative basis pursuant to the
graduated fee rate schedule shown above on the left. The schedule
above on the right shows 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
rate at $___ billion of group net assets - the approximate level for
April 2000 - was __%, which is the weighted average of the respective
fee rates for each level of group net assets up to $__ billion.
Small Cap Stock's, Mid-Cap Stock's, and Large Cap Stock's individual
fund fee rates are 0.45%, 0.30% and 0.30%, respectively. Based on the
average group net assets of the funds advised by FMR for April 30
2000, each fund's annual basic fee rate would be calculated as
follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Group Fee Rate Individual Fund Fee Rate Basic Fee Rate
Small Cap Stock 0.___% + 0.45% = 0.___%
Mid-Cap Stock 0.___% + 0.30% = 0.___%
Large Cap Stock 0.___% + 0.30% = 0.___%
</TABLE>
One-twelfth of the basic fee rate is applied to each fund's average
net assets for the month, giving a dollar amount which is the fee for
that month.
COMPUTING THE PERFORMANCE ADJUSTMENT. The basic fee for each of Small
Cap Stock, Mid-Cap Stock, and Large Cap Stock 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 over the same period of the Russell 2000
for Small Cap Stock, the S&P MidCap 400 for Mid-Cap Stock, or the S&P
500 for Large Cap Stock. The performance period for Small Cap Stock,
Mid-Cap Stock, and Large Cap Stock commenced on April 1, 1998, April
1, 1994, and July 1, 1995, respectively. Starting with the twelfth
month, the performance adjustment takes effect. Each month subsequent
to the twelfth month, a new month is added to the performance period
until the performance period includes 36 months. Thereafter, the
performance period consists of the most recent month plus the previous
35 months.
Each percentage point of difference, calculated to the nearest 0.01%
(up to a maximum difference of (plus/minus)10.00 is multiplied by a
performance adjustment rate of 0.02%.
The 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 throughout the month, giving a dollar amount which will be
added to (or subtracted from) the basic fee.
The maximum annualized performance adjustment rate is
(plus/minus)0.20% of a fund's average net assets over the performance
period.
A fund's performance is calculated based on change in NAV. For
purposes of calculating the performance adjustment, any dividends or
capital gain distributions paid by the fund are treated as if
reinvested in that fund's 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 is based on a
fund's performance compared to the investment record of the applicable
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 the Index. Moreover, the comparative investment performance
of each fund is based solely on the relevant performance period
without regard to the cumulative performance over a longer or shorter
period of time.
The following table shows the amount of management fees paid by each
fund to FMR for the past three fiscal years, and the amount of
negative or positive performance adjustments to the management fees
paid by each fund.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fund Fiscal Years Ended April 30 Performance Adjustment Management Fees Paid to FMR
Small Cap Stock 2000 $ $ *
1999 $ -31,862 $ 4,086,220*
1998** n/a $ 380,263*
Mid-Cap Stock 2000 $ $ *
1999 $ -1,557,686 $ 8,368,916*
1998 $ 23,736 $ 9,412,300*
Large Cap Stock 2000 $ $ *
1999 $ -146,444 $ 1,531,999*
1998 $ -188,609 $ 606,874*
</TABLE>
* Including the amount of the performance adjustment.
** From March 12, 1998 (commencement of operations).
FMR may, from time to time, voluntarily reimburse all or a portion of
a fund's operating expenses (exclusive of interest, taxes, certain
securities lending costs, brokerage commissions, and extraordinary
expenses), which is subject to revision or discontinuance. 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.
Expense reimbursements by FMR will increase a fund's returns, and
repayment of the reimbursement by a fund will lower its returns.
FMR voluntarily agreed to reimburse Small Cap Stock if and to the
extent that its aggregate operating expenses, including management
fees, were in excess of an annual rate of its average net assets. The
table below shows the periods of reimbursement and levels of expense
limitation; the dollar amount of management fees incurred under each
fund's contract before reimbursement; and the dollar amount of
management fees reimbursed by FMR under the expense reimbursement for
each period.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Periods of Expense Limitation Aggregate Operating Expense Fiscal Years Ended April 30
From To Limitation
Small Cap Stock May 1, 1999 April 30, 2000 1.50% 2000
May 1, 1998 April 30, 1999 1.50% 1999
March 2, 1998 April 30, 1998 1.50% 1998
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Management Fee Before Amount of Management Fee
Reimbursement Reimbursement
Small Cap Stock $ $
$ 4,118,082 $ 0
$ 380,263 $ 197,166
</TABLE>
SUB-ADVISERS. On January 1, 2001, FMR will enter into a sub-advisory
agreement with FMRC on behalf of each fund pursuant to which FMRC will
have primary responsibility for choosing investments for each fund.
Under the terms of the sub-advisory agreements for each fund, FMR will
pay FMRC fees equal to 50% of the management fee (including any
performance adjustment) payable to FMR under its management contract
with each fund. The fees paid to FMRC will not be reduced by any
voluntary or mandatory expense reimbursements that may be in effect
from time to time.
On behalf of Small Cap Stock, Mid-Cap Stock, and Large Cap Stock, FMR
has entered into sub-advisory agreements with FMR U.K. and FMR Far
East. Pursuant to the sub-advisory agreements, FMR may receive from
the sub-advisers investment research and advice on issuers outside the
United States and FMR may grant the sub-advisers investment management
authority as well as the authority to buy and sell securities if FMR
believes it would be beneficial to the funds.
On behalf of each fund, FMR Far East has entered into a sub-advisory
agreement with FIJ pursuant to which FMR Far East may receive from FIJ
investment research and advice relating to Japanese issuers (and such
other Asian issuers as FMR Far East may designate).
For providing non-discretionary investment advice and research
services the sub-advisers are compensated as follows:
(small solid bullet) 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.
(small solid bullet) FMR Far East pays FIJ a fee equal to 100% of
FIJ's costs incurred in connection with providing investment advice
and research services for a fund to FMR Far East.
For providing discretionary investment management and executing
portfolio transactions, the sub-advisers are compensated as follows:
(small solid bullet) FMR pays FMR U.K. and FMR Far East a fee equal to
50% of its monthly management fee (including any performance
adjustment) with respect to the fund's average net assets managed by
the sub-adviser on a discretionary basis.
[For investment advice and research services, no fees were paid to FMR
U.K. and FMR Far East for the past fiscal year.]
For providing investment advice and research services, fees paid to
FMR U.K. and FMR Far East for the past three fiscal years are shown in
the table below.
Fiscal Year Ended April 30 FMR U.K. FMR Far East
Small Cap Stock
2000 $ $
1999 $ 57,016 $ 44,746
1998* $ 5,055 $ 5,380
Mid-Cap Stock
2000 $ $
1999 $ 6,746 $ 4,372
1998 $ 4,062 $ 4,048
Large Cap Stock
2000 $ $
1999 $ 12,628 $ 9,120
1998 $ 3,078 $ 3,093
*From March 12, 1998 (commencement of operations).
[For discretionary investment management and execution of portfolio
transactions, no fees were paid to FMR U.K. and FMR Far East on behalf
of the funds for the past three fiscal years.]
[For discretionary investment management and execution of portfolio
transactions, fees paid to FMR U.K. and FMR Far East for the past
three fiscal years are shown in the table below.
Fiscal Year Ended April 30 FMR U.K. FMR Far East
Small Cap Stock
2000 $ $
1999 $ 0 $ 0
1998* $ 0 $ 0
Mid-Cap Stock
2000 $ $
1999 $ 0 $ 0
1998 $ 0 $ 0
Large Cap Stock
2000 $ $
1999 $ 0 $ 0
1998 $ 0 $ 0
*From March 12, 1998 (commencement of operations).
DISTRIBUTION SERVICES
Each fund has entered into a distribution agreement with FDC, an
affiliate of FMR. FDC is a broker-dealer registered under the
Securities Exchange Act of 1934 and a member of the National
Association of Securities Dealers, Inc. The distribution agreements
call for FDC to use all reasonable efforts, consistent with its other
business, to secure purchasers for shares of each fund, which are
continuously offered at NAV. Promotional and administrative expenses
in connection with the offer and sale of shares are paid by FMR.
The Trustees have approved Distribution and Service Plans on behalf of
each fund (the Plans) pursuant to Rule 12b-1 under the 1940 Act (the
Rule). The Rule provides in substance that a mutual fund may not
engage directly or indirectly in financing any activity that is
primarily intended to result in the sale of shares of the fund except
pursuant to a plan approved on behalf of the fund under the Rule. The
Plans, as approved by the Trustees, allow the funds and FMR to incur
certain expenses that might be considered to constitute indirect
payment by the funds of distribution expenses.
Under each Plan, if the payment of management fees by the fund to FMR
is deemed to be indirect financing by the fund of the distribution of
its shares, such payment is authorized by the Plan. Each Plan
specifically recognizes that FMR may use its management fee revenue,
as well as its past profits or its other resources, to pay FDC for
expenses incurred in connection with providing services intended to
result in the sale of fund shares and/or shareholder support services.
In addition, each Plan provides that FMR, directly or through FDC, may
pay intermediaries, such as banks, broker-dealers and other
service-providers, that provide those services. Currently, the Board
of Trustees has authorized such payments for Small Cap Stock, Mid-Cap
Stock, and Large Cap Stock shares.
Prior to approving each Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and
determined that there is a reasonable likelihood that the Plan will
benefit the fund and its shareholders. In particular, the Trustees
noted that each Plan does not authorize payments by the fund other
than those made to FMR under its management contract with the fund. To
the extent that each Plan gives FMR and FDC greater flexibility in
connection with the distribution of fund shares, additional sales of
fund shares or stabilization of cash flows may result. Furthermore,
certain shareholder support services may be provided more effectively
under the Plans by local entities with whom shareholders have other
relationships.
The Glass-Steagall Act generally prohibits federally and state
chartered or supervised banks from directly engaging in the business
of underwriting, selling or distributing securities. FDC believes that
the Glass-Steagall Act should not preclude a bank from performing
shareholder support services, or servicing and recordkeeping
functions. FDC intends to engage banks only to perform such functions.
However, changes in federal or state statutes and regulations
pertaining to the permissible activities of banks, as well as further
judicial or administrative decisions or interpretations, could prevent
a bank from continuing to perform all or a part of the contemplated
services. If a bank were prohibited from so acting, the Trustees would
consider what actions, if any, would be necessary to continue to
provide efficient and effective shareholder services. In such event,
changes in the operation of the funds might occur, including possible
termination of any automatic investment or redemption or other
services then provided by the bank. It is not expected that
shareholders would suffer any adverse financial consequences as a
result of any of these occurrences. In addition, state securities laws
on this issue may differ from the interpretations of federal law
expressed herein, and banks and other financial institutions may be
required to register as dealers pursuant to state law.
Each fund may execute portfolio transactions with, and purchase
securities issued by, depository institutions that receive payments
under the Plans. No preference for the instruments of such depository
institutions will be shown in the selection of investments.
FDC may compensate intermediaries that satisfy certain criteria
established from time to time by FDC relating to the level or type of
services provided by the intermediary, the sale or expected sale of
significant amounts of shares, or other factors.
TRANSFER AND SERVICE AGENT AGREEMENTS
Each fund has entered into a transfer agent agreement with FSC, an
affiliate of FMR. Under the terms of the agreements, FSC performs
transfer agency, dividend disbursing, and shareholder services for
each fund.
For providing transfer agency services, FSC receives an account fee
and an asset-based fee each paid monthly with respect to each account
in a fund. For retail accounts and certain institutional accounts,
these fees are based on account size and fund type. For certain
institutional retirement accounts, these fees are based on fund type.
For certain other institutional retirement accounts, these fees are
based on account type and fund type. The account fees are subject to
increase based on postage rate changes.
The asset-based fees are subject to adjustment if the year-to-date
total return of the S&P 500 exceeds a positive or negative 15%.
FSC also collects small account fees from certain accounts with
balances of less than $2,500.
In addition, FSC receives the pro rata portion of the transfer agency
fees applicable to shareholder accounts in a qualified state tuition
program (QSTP), as defined under the Small Business Job Protection Act
of 1996, managed by FMR or an affiliate and in each Fidelity Freedom
Fund and Fidelity Four-in-One Index Fund, funds of funds managed by an
FMR affiliate, according to the percentage of the QSTP's, Freedom
Fund's or Fidelity Four-in-One Index Fund's assets that is invested in
a fund, subject to certain limitations in the case of Fidelity
Four-in-One Index Fund.
FSC pays out-of-pocket expenses associated with providing transfer
agent services. In addition, FSC bears the expense of typesetting,
printing, and mailing prospectuses, statements of additional
information, and all other reports, notices, and statements to
existing shareholders, with the exception of proxy statements.
Each fund has also entered into a service agent agreement with FSC.
Under the terms of the agreements, FSC calculates the NAV and
dividends for each fund, maintains each fund's portfolio and general
accounting records, and administers each fund's securities lending
program.
For providing pricing and bookkeeping services, FSC receives a monthly
fee based on each fund's average daily net assets throughout the
month.
The annual rates for pricing and bookkeeping services for the funds
are 0.0365% of the first $500 million of average net assets, 0.0155%
of average net assets between $500 million and $3 billion, 0.0040% of
average net assets between $3 billion and $25 billion, and 0.00075% of
average net assets in excess of $25 billion. The fee, not including
reimbursement for out-of-pocket expenses, is limited to a minimum of
$60,000 per year.
Pricing and bookkeeping fees, including reimbursement for
out-of-pocket expenses, paid by the funds to FSC for the past three
fiscal years are shown in the table below.
Fund 2000 1999 1998
Small Cap Stock $ $ 290,553 $ 29,422*
Mid-Cap Stock $ $ 621,272 $ 627,926
Large Cap Stock $ $ 147,916 $ 80,621
*From March 12, 1998 (commencement of operations).
For administering each fund's securities lending program, FSC is paid
based on the number and duration of individual securities loans.
[For the fiscal years ended April 30, 2000, 1999, and 1998, the funds
did not pay FSC for securities lending.]
[Payments made by the funds to FSC for securities lending for the past
three fiscal years are shown in the table below.
Fund 2000 1999 1998
Small Cap Stock $ $ 0 $ 0*
Mid-Cap Stock $ $ 0 $ 0
Large Cap Stock $ $ 0 $ 0
*From March 12, 1998 (commencement of operations).
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Fidelity Small Cap Stock Fund, Fidelity Mid-Cap
Stock Fund, and Fidelity Large Cap Stock Fund are funds of Fidelity
Commonwealth Trust, an open-end management investment company
organized as a Massachusetts business trust on November 8, 1974. On
February 10, 2000, Spartan 500 Index Fund changed its name from
Spartan Market Index Fund to Spartan 500 I ndex Fund. On April 18,
1997, Spartan 500 Index Fund changed its name from Fidelity Market
Index Fund to Spartan Markey Index Fund. Currently, there are six
funds in Fidelity Commonwealth Trust: Fidelity Intermediate Bond Fund,
Fidelity Large Cap Stock Fund, Spartan 5 0 0 Index Fund, Fidelity
Small Cap Selector, Fidelity Mid-Cap Stock Fund, and Fidelity Small
Cap Stock Fund. The Trustees are permitted to create additional funds
in the trust and to create additional classes of the fund.
The assets of the trust received for the issue or sale of shares of
each fund and all income, earnings, profits, and proceeds thereof,
subject to the rights of creditors, are allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets
of each fund in the trust shall be charged with the liabilities and
expenses attributable to such fund. Any general expenses of the trust
shall be allocated between or among any one or more of the funds.
SHAREHOLDER LIABILITY. The trust is an entity commonly known as a
"Massachusetts business trust." Under Massachusetts law, shareholders
of such a trust may, under certain circumstances, be held personally
liable for the obligations of the trust.
The Declaration of Trust contains an express disclaimer of shareholder
liability for the debts, liabilities, obligations, and expenses of the
trust or fund. The Declaration of Trust provides that the trust shall
not have any claim against shareholders except for the payment of the
purchase price of shares and requires that each agreement, obligation,
or instrument entered into or executed by the trust or the Trustees
relating to the trust or to a fund shall include a provision limiting
the obligations created thereby to the trust or to one or more funds
and its or their assets. The Declaration of Trust further provides
that shareholders of a fund shall not have a claim on or right to any
assets belonging to any other fund.
The Declaration of Trust provides for indemnification out of each
fund's property of any shareholder or former shareholder held
personally liable for the obligations of the fund solely by reason of
his or her being or having been a shareholder and not because of his
or her acts or omissions or for some other reason. The Declaration of
Trust also provides that each fund shall, upon request, assume the
defense of any claim made against any shareholder for any act or
obligation of the fund and satisfy any judgment thereon. Thus, the
risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which a fund
itself would be unable to meet its obligations. FMR believes that, in
view of the above, the risk of personal liability to shareholders is
remote.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. As a shareholder, you are entitled to one vote for each
dollar of net asset value, you own. The voting rights of shareholders
can be changed only by a shareholder vote. Shares may be voted in the
aggregate, by fund and by class.
The shares have no preemptive or conversion rights. Shares are fully
paid and nonassessable, except as set forth under the heading
"Shareholder Liability" above.
The trust or a fund may be terminated upon the sale of its assets to,
or merger with, another open-end management investment company or
series thereof, or upon liquidation and distribution of its assets.
Generally, the merger of the trust or a fund with another operating
mutual fund or the sale of all or a portion of the assets of the trust
or a fund to another operating mutual fund requires approval by a vote
of shareholders of the trust or the fund. The Trustees may, however,
reorganize or terminate the trust or a fund without prior shareholder
approval. In the event of the dissolution or liquidation of the trust,
shareholders of each of its funds are entitled to receive the
underlying assets of such fund or available for distribution. In the
event of the dissolution or liquidation of a fund, shareholders of
that fund are entitled to receive the underlying assets of the fund
available for distribution.
CUSTODIANS. Brown Brothers Harriman & Co., 40 Water Street, Boston,
Massachusetts, is custodian of the assets of Small Cap Stock and Large
Cap Stock. The Chase Manhattan Bank, 1 Chase Manhattan Plaza, New
York, New York, is custodian of the assets of Mid-Cap Stock. Each
custodian is responsible for the safekeeping of a fund's assets and
the appointment of any subcustodian banks and clearing agencies. For
Small Cap Stock and Large Cap Stock, The Chase Manhattan Bank,
headquartered in New York, also may serve as a special purpose
custodian of certain assets in connection with repurchase agreement
transactions. The Bank of New York, headquartered in New York, also
may serve as a special purpose custodian of certain assets in
connection with repurchase agreement transactions.
FMR, its officers and directors, its affiliated companies, and members
of the Board of Trustees may, from time to time, conduct transactions
with various banks, including banks serving as custodians for certain
funds advised by FMR. The Boston branch of Small Cap Stock's and Large
Cap Stock's custodian leases its office space from an affiliate of FMR
at a lease payment which, when entered into, was consistent with
prevailing market rates. Transactions that have occurred to date
include 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.
AUDITOR. Deloitte & Touche LLP, 200 Berkeley Street, Boston,
Massachusetts, serves as independent accountant for each fund. The
auditor examines financial statements for the funds and provides other
audit, tax, and related services.
FINANCIAL STATEMENTS
Each fund's financial statements and financial highlights for the
fiscal year ended April 30, 2000, and report of the auditor, are
included in the fund's annual report and are incorporated herein by
reference.
APPENDIX
Fidelity, Fidelity Investments & (Pyramid) Design, Fidelity Focus,
Spartan, Fidelity Investments, and Magellan are registered trademarks
of FMR Corp.
The third party marks appearing above are the marks of their
respective owners.
Fidelity Commonwealth Trust
PART C. OTHER INFORMATION
Item 23. Exhibits
(a) (1) Amended and Restated Declaration of Trust, dated December 16,
1999, is filed herein as Exhibit a(1).
(b) Bylaws of the Trust, as amended and dated May 19, 1994, are
incorporated herein by reference to Exhibit 2(a) of Fidelity
Union Street Trust's (File No. 2-50318) Post-Effective Amendment
No. 87.
(c) Not applicable.
(d) (1) Management Contract, dated October 1, 1999, between Fidelity
Intermediate Bond Fund and Fidelity Management & Research
Company, is filed herein as Exhibit d(1).
(2) Management Contract, dated December 1, 1997, between Spartan
500 Index Fund (formerly Spartan Market Index Fund) and
Fidelity Management & Research Company, is incorporated
herein by reference to Exhibit 5(b) of Post-Effective
Amendment No. 65.
(3) Management Contract, dated June 26, 1999, between Fidelity
Mid-Cap Stock Fund and Fidelity Management & Research
Company, is incorporated herein by reference to Exhibit d(3)
of Post-Effective Amendment No. 68.
(4) Management Contract, dated October 1, 1999, between Fidelity
Large Cap Stock Fund and Fidelity Management & Research
Company, is filed herein as Exhibit d(4).
(5) Management Contract, dated February 19, 1998, between
Fidelity Small Cap Stock Fund and Fidelity Management &
Research Company, is incorporated herein by reference to
Exhibit 5(e) of Post-Effective Amendment No. 65.
(6) Sub-Advisory Agreement, dated October 1, 1999, between
Fidelity Management & Research Company and Fidelity
Management & Research (U.K.) Inc., on behalf of Fidelity
Intermediate Bond Fund is filed herein as Exhibit d(6).
(7) Sub-Advisory Agreement, dated October 1, 1999, between
Fidelity Management & Research Company and Fidelity
Management & Research (Far East) Inc., on behalf of Fidelity
Intermediate Bond Fund is filed herein as Exhibit d(7).
(8) Sub-Advisory Agreement, dated January 1, 1999, between
Fidelity Management & Research Company and Fidelity
Investments Money Management, Inc. (FIMM), on behalf of
Fidelity Intermediate Bond Fund is incorporated herein by
reference to Exhibit d(8) of Post-Effective Amendment No. 67.
(9) Sub-Advisory Agreement, dated October 1, 1999, between
Fidelity Management & Research Company and Fidelity
Management & Research (U.K.) Inc., on behalf of Fidelity
Large Cap Stock Fund is filed herein as Exhibit d(9).
(10) Sub-Advisory Agreement, dated October 1, 1999, between
Fidelity Management & Research Company and Fidelity
Management & Research (Far East) Inc., on behalf of Fidelity
Large Cap Stock Fund is filed herein as Exhibit d(10).
(11) Form of Sub-Advisory Agreement, between Fidelity Management &
Research Company and FMR Co., Inc., on behalf of Fidelity
Large Cap Stock Fund is filed herein as Exhibit d(11).
(12) Sub-Advisory Agreement, dated October 1, 1999, between
Fidelity Management & Research Company and Fidelity
Management & Research (U.K.) Inc., on behalf of Fidelity
Mid-Cap Stock Fund, is filed herein as Exhibit d(12).
(13) Sub-Advisory Agreement, dated October 1, 1999, between
Fidelity Management & Research Company and Fidelity
Management & Research (Far East) Inc., on behalf of Fidelity
Mid-Cap Stock Fund, is filed herein as Exhibit d(13).
(14) Form of Sub-Advisory Agreement, between Fidelity Management &
Research Company and FMR Co., Inc., on behalf of Fidelity
Mid-Cap Stock Fund is filed herein as Exhibit d(14).
(15) Sub-Advisory Agreement, dated February 19, 1998, between
Fidelity Management & Research Company and Fidelity
Management & Research (U.K.) Inc., on behalf of Fidelity
Small Cap Stock Fund is incorporated herein by reference to
Exhibit 5(l) of Post-Effective Amendment No. 65.
(16) Sub-Advisory Agreement, dated February 19, 1998, between
Fidelity Management & Research Company and Fidelity
Management & Research (Far East) Inc., on behalf of Fidelity
Small Cap Stock Fund is incorporated herein by reference to
Exhibit 5(m) of Post-Effective Amendment No. 65.
(17) Form of Sub-Advisory Agreement, between Fidelity Management &
Research Company, and FMR Co., Inc., on behalf of Fidelity
Small Cap Stock Fund is filed herein as Exhibit d(17).
(18) Sub-Advisory Agreement, dated October 1, 1999, between
Fidelity Management & Research Company and Bankers Trust
Company, on behalf of Spartan 500 Index Fund (formerly
Spartan Market Index Fund) is filed herein as Exhibit d(18).
(19) Form of Sub-Advisory Agreement, between Fidelity Management &
Research Company and FMR Co., Inc., on behalf of Spartan 500
Index Fund (formerly Spartan Market Index Fund) is filed
herein as Exhibit d(19).
(20) Research Agreement, dated January 1, 2000, between Fidelity
Management & Research (Far East) Inc. and Fidelity Investment
Japan Limited, on behalf of Fidelity Intermediate Bond Fund
is filed herein as Exhibit d(20).
(21) Research Agreement, dated January 1, 2000, between Fidelity
Management & Research (Far East) Inc. and Fidelity Investment
Japan Limited, on behalf of Fidelity Large Cap Stock Fund is
filed herein as Exhibit d(21).
(22) Research Agreement, dated January 1, 2000, between Fidelity
Management & Research (Far East) Inc. and Fidelity Investment
Japan Limited, on behalf of Fidelity Mid-Cap Stock Fund is
filed herein as Exhibit d(22).
(23) Research Agreement, dated January 1, 2000, between Fidelity
Management & Research (Far East) Inc. and Fidelity Investment
Japan Limited, on behalf of Fidelity Small Cap Stock Fund is
filed herein as Exhibit d(23).
(e) (1) General Distribution Agreement, dated April 1, 1987, between
Fidelity Intermediate Bond Fund and Fidelity Distributors
Corporation is incorporated herein by reference to Exhibit
6(a) of Post-Effective Amendment No. 57.
(2) Amendment to General Distribution Agreement, dated January 1,
1988, between Fidelity Intermediate Bond Fund and Fidelity
Distributors Corporation is incorporated herein by reference
to Exhibit 6(b) of Post-Effective Amendment No. 57.
. (3) General Distribution Agreement, dated June 26, 1999, between
Fidelity Mid-Cap Stock Fund and Fidelity Distributors
Corporation is incorporated herein by reference to Exhibit
e(3) of Post-Effective Amendment No. 68.
(4) General Distribution Agreement, dated February 15, 1990,
between Spartan 500 Index Fund (formerly Spartan Market Index
Fund) and Fidelity Distributors Corporation is incorporated
herein by reference to Exhibit 6(c) of Post-Effective
Amendment No. 57.
(5) General Distribution Agreement, dated May 18, 1995, between
Fidelity Large Cap Stock Fund and Fidelity Distributors
Corporation is incorporated herein by reference to Exhibit
6(e) of Post-Effective Amendment No. 57.
(6) General Distribution Agreement, dated February 19, 1998,
between Fidelity Small Cap Stock Fund and Fidelity
Distributors Corporation is incorporated herein by reference
to Exhibit 6(f) of Post-Effective Amendment No. 65.
(7) Amendments to the General Distribution Agreement between
Fidelity Commonwealth Trust on behalf of Fidelity
Intermediate Bond Fund, Spartan 500 Index Fund (formerly
Spartan Market Index Fund), and Fidelity Large Cap Stock
Fund, and Fidelity Distributors Corporation, dated March 14,
1996 and July 15, 1996, are incorporated herein by reference
to Exhibit 6(a) of Fidelity Court Street Trust's (File No.
2-58774) Post-Effective Amendment No. 61 .
(8) Form of Bank Agency Agreement (most recently revised January,
1997) is incorporated herein by reference to Exhibit e(10) of
Post-Effective Amendment No. 68.
(9) Form of Selling Dealer Agreement for Bank-Related
Transactions (most recently revised January, 1997) is
incorporated herein by reference to Exhibit e(11) of
Post-Effective Amendment No. 68.
(f) (1) The Fee Deferral Plan for Non-Interested Person Directors and
Trustees of the Fidelity Funds, effective as of September 15,
1995 and amended through January 1, 2000, is incorporated
herein by reference to Exhibit (f)(1) of Fidelity
Massachusetts Municipal Trust's (File No. 2-75537)
Post-Effective Amendment No. 39.
(g) (1) Custodian Agreement and Appendix C, dated September 1, 1994,
between Brown Brothers Harriman & Company and Fidelity
Commonwealth Trust on behalf of Fidelity Small Cap Stock Fund
are incorporated herein by reference to Exhibit 8(a) of
Fidelity Commonwealth Trust's (File No. 2-52322)
Post-Effective Amendment No. 56.
(2) Appendix A, dated August 11, 1999, to the Custodian
Agreement, dated September 1, 1994, between Brown Brothers
Harriman & Company and Fidelity Commonwealth Trust on behalf
of Fidelity Small Cap Stock Fund is incorporated herein by
reference to Exhibit g(6) of Fidelity Advisor Series I's
(File No. 2-84776) Post-Effective Amendment No. 50.
(3) Appendix B, dated March 16, 2000, to the Custodian Agreement,
dated September 1, 1994, between Brown Brothers Harriman &
Company and Fidelity Commonwealth Trust on behalf of Fidelity
Small Cap Stock Fund is filed herein as Exhibit g(3).
(4) Addendum, dated October 21, 1996, to the Custodian Agreement,
dated September 1, 1994, between Brown Brothers Harriman &
Company and Fidelity Commonwealth Trust on behalf of Fidelity
Small Cap Stock Fund is incorporated herein by reference to
Exhibit g(4) of Post-Effective Amendment No. 68.
(5) Custodian Agreement and Appendix C, dated August 1, 1994,
between The Chase Manhattan Bank, N.A. and Fidelity
Commonwealth Trust on behalf of Fidelity Mid Cap Stock Fund
are incorporated herein by reference to Exhibit 8(a) of
Fidelity Investment Trust's (File No. 2-90649) Post-Effective
Amendment No. 59.
(6) Appendix A, dated February 22, 2000, to the Custodian
Agreement, dated August 1, 1994, between The Chase Manhattan
Bank, N.A. and Fidelity Commonwealth Trust on behalf of
Fidelity Mid Cap Stock Fund is filed herein as Exhibit
(g)(6).
(7) Appendix B, dated March 16, 2000, to the Custodian Agreement,
dated August 1, 1994, between The Chase Manhattan Bank, N.A.
and Fidelity Commonwealth Trust on behalf of Fidelity Mid Cap
Stock Fund is filed herein as Exhibit (g)(7).
(8) Addendum, dated October 21, 1996, to the Custodian Agreement,
dated August 1, 1994, between The Chase Manhattan Bank, N.A.
and Fidelity Commonwealth Trust on behalf of Fidelity Mid Cap
Stock Fund is incorporated herein by reference to Exhibit
(g)(4) of Fidelity Charles Street Trust's (File No. 2-73133)
Post-Effective Amendment No. 65.
(9) Custodian Agreement and Appendix C, dated December 1, 1994,
between The Bank of New York and Fidelity Commonwealth Trust
on behalf of Fidelity Intermediate Bond Fund are incorporated
herein by reference to Exhibit 8(a) of Fidelity Hereford
Street Trust's (File No. 33-52577) Post-Effective Amendment
No. 4.
(10) Appendix A, dated October 18, 1999, to the Custodian
Agreement, dated December 1, 1994, between The Bank of New
York and Fidelity Commonwealth Trust on behalf of Fidelity
Intermediate Bond Fund is incorporated herein by reference to
Exhibit g(2) of Fidelity Summer Street Trust's (File No.
2-58542) Post-Effective Amendment No. 58.
(11) Appendix B, dated March 16, 2000, to the Custodian Agreement,
dated December 1, 1994, between The Bank of New York and
Fidelity Commonwealth Trust on behalf of Fidelity
Intermediate Bond Fund is incorporated herein by reference to
Exhibit g(3) of Fidelity Summer Street Trust's (File No.
2-58542) Post-Effective Amendment No. 58.
(12) Addendum, dated October 21, 1996, to the Custodian Agreement,
dated December 1, 1994, between The Bank of New York and
Fidelity Commonwealth Trust on behalf of Fidelity
Intermediate Bond Fund is incorporated herein by reference to
Exhibit g(4) of Fidelity Hereford Street Trust's (File No.
33-52577) Post-Effective Amendment No. 12.
(13) Amendment, dated July 14, 1999, to the Fee Schedule to the
Custodian Agreement, dated December 1, 1994, between The Bank
of New York and Fidelity Commonwealth Trust on behalf of
Fidelity Intermediate Bond Fund is incorporated herein by
reference to Exhibit (g)(5) of Fidelity Summer Street Trust's
(File No. 2-58542) Post-Effective Amendment No. 58.
(14) Custodian Agreement and Appendix C, dated November 5, 1997,
between Bankers Trust Company and Fidelity Commonwealth Trust
on behalf of Spartan 500 Index Fund (formerly Spartan Market
Index Fund) are incorporated herein by reference to Exhibit
8(q) of Post-Effective Amendment No. 65.
(15) Appendix A, dated February 22, 2000, to the Custodian
Agreement, dated November 5, 1997, between Bankers Trust
Company and Fidelity Commonwealth Trust on behalf of Spartan
500 Index Fund (formerly Spartan Market Index Fund) is filed
herein as Exhibit g(15).
(16) Appendix B, dated December 16, 1999, to the Custodian
Agreement, dated November 5, 1997, between Bankers Trust
Company and Fidelity Commonwealth Trust on behalf of Spartan
Market Index Fund (formerly Spartan Market Index Fund) is
filed herein as Exhibit g(16).
(17) Fidelity Group Repo Custodian Agreement among The Bank of New
York, J. P. Morgan Securities, Inc., and Fidelity
Commonwealth Trust, on behalf of Fidelity Intermediate Bond
Fund, Fidelity Large Cap Stock Fund, and Spartan 500 Index
Fund (formerly Spartan Market Index Fund), dated February 12,
1996, is incorporated herein by reference to Exhibit 8(d) of
Fidelity Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.
(18) Schedule 1 to the Fidelity Group Repo Custodian Agreement
between The Bank of New York and Fidelity Commonwealth Trust,
on behalf of Fidelity Intermediate Bond Fund, Fidelity Large
Cap Stock Fund, and Spartan 500 Index Fund (formerly Spartan
Market Index Fund), dated February 12, 1996, is incorporated
herein by reference to Exhibit 8(e) of Fidelity Institutional
Cash Portfolios' (File No. 2-74808) Post-Effective Amendment
No. 31.
(19) Fidelity Group Repo Custodian Agreement among Chemical Bank,
Greenwich Capital Markets, Inc., and Fidelity Commonwealth
Trust, on behalf of Fidelity Intermediate Bond Fund, Fidelity
Large Cap Stock Fund, and Spartan 500 Index Fund (formerly
Spartan Market Index Fund), dated November 13, 1995, is
incorporated herein by reference to Exhibit 8(f) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.
(20) Schedule 1 to the Fidelity Group Repo Custodian Agreement
between Chemical Bank and Fidelity Commonwealth Trust, on
behalf of Fidelity Intermediate Bond Fund, Fidelity Large Cap
Stock Fund, and Spartan 500 Index Fund (formerly Spartan
Market Index Fund), dated November 13, 1995, is incorporated
herein by reference to Exhibit 8(g) of Fidelity Institutional
Cash Portfolios' (File No. 2-74808) Post-Effective Amendment
No. 31.
(21) Joint Trading Account Custody Agreement between The Bank of
New York and Fidelity Commonwealth Trust, on behalf of
Fidelity Intermediate Bond Fund, Fidelity Large Cap Stock
Fund, and Spartan 500 Index Fund (formerly Spartan Market
Index Fund), dated May 11, 1995, is incorporated herein by
reference to Exhibit 8(h) of Fidelity Institutional Cash
Portfolios' (File No. 2-74808) Post-Effective Amendment No.
31.
(22) First Amendment to Joint Trading Account Custody Agreement
between The Bank of New York and Fidelity Commonwealth Trust,
on behalf of Fidelity Intermediate Bond Fund, Fidelity Large
Cap Stock Fund, and Spartan 500 Index Fund (formerly Spartan
Market Index Fund), dated July 14, 1995, is incorporated
herein by reference to Exhibit 8(i) of Fidelity Institutional
Cash Portfolios' (File No. 2-74808) Post-Effective Amendment
No. 31.
(23) Forms of Fidelity Group Repo Custodian Agreement and Schedule
1 among The Bank of New York, J. P. Morgan Securities, Inc.,
and Fidelity Commonwealth Trust, on behalf of Fidelity Small
Cap Stock Fund and Fidelity Mid-Cap Stock Fund are
incorporated herein by reference to Exhibit 8(m) of
Post-Effective Amendment No. 66.
(24) Forms of Fidelity Group Repo Custodian Agreement and Schedule
1 among Chemical Bank, Greenwich Capital Markets, Inc., and
Fidelity Commonwealth Trust, on behalf of Fidelity Small Cap
Stock Fund and Fidelity Mid-Cap Stock Fund are incorporated
herein by reference to Exhibit 8(n) of Post-Effective
Amendment No. 66.
(25) Forms of Joint Trading Account Custody Agreement and First
Amendment to Joint Trading Account Custody Agreement between
The Bank of New York and Fidelity Commonwealth Trust, on
behalf of Fidelity Small Cap Stock Fund and Fidelity Mid-Cap
Stock Fund are incorporated herein by reference to Exhibit
8(o) of Post-Effective Amendment No. 66.
(h) Not applicable.
(i) Not applicable.
(j) Not applicable.
(k) Not applicable.
(l) Not applicable.
(m) (1) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Intermediate Bond Fund is incorporated herein by
reference to Exhibit m(1) of Post-Effective Amendment No. 68.
(2) Distribution and Service Plan pursuant to Rule 12b-1 for
Spartan 500 Index Fund (formerly Spartan Market Index Fund)
is incorporated herein by reference to Exhibit m(2) of
Post-Effective Amendment No. 68.
(3) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Large Cap Stock Fund is incorporated herein by
reference to Exhibit m(3) of Post-Effective Amendment No. 68.
(4) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Small Cap Stock Fund is incorporated herein by
reference to Exhibit m(4) of Post-Effective Amendment No. 68.
(5) Distribution and Service Plan, pursuant to Rule 12b-1 for
Fidelity Mid-Cap Stock Fund is incorporated herein by
reference to Exhibit m(5) of Post-Effective Amendment No. 68.
(n) Not applicable.
(o) Not applicable.
(p)(1) Code of Ethics, dated January 1, 2000, adopted by each fund,
Fidelity Management & Research Company, Fidelity Investments
Money Management, Inc., FMR Co., Inc., Fidelity Management &
Research (U.K.) Inc., Fidelity Management & Research (Far
East) Inc., Fidelity Investments Japan Limited, and Fidelity
Distributors Corporation pursuant to Rule 17j-1 is filed
herein as Exhibit (p)(1).
(p)(2) Code of Ethics, dated September 1998, adopted by Bankers Trust
Company pursuant to Rule 17j-1 is filed herein as Exhibit
(p)(2).
Item 24. Trusts Controlled by or under Common Control with this Trust
The Board of Trustees of the Trust is the same as the board of other
Fidelity funds, each of which has Fidelity Management & Research
Company, or an affiliate, as its investment adviser. In addition, the
officers of the Trust are substantially identical to those of the
other Fidelity funds. Nonetheless, the Trust takes the position that
it is not under common control with other Fidelity funds because the
power residing in the respective boards and officers arises as the
result of an official position with the respective trusts.
Item 25. Indemnification
Article XI, Section 2 of the Declaration of Trust sets forth the
reasonable and fair means for determining whether indemnification
shall be provided to any past or present Trustee or officer. It states
that the Trust shall indemnify any present or past trustee or officer
to the fullest extent permitted by law against liability, and all
expenses reasonably incurred by him or her in connection with any
claim, action, suit or proceeding in which he or she is involved by
virtue of his or her service as a trustee or officer and against any
amount incurred in settlement thereof. Indemnification will not be
provided to a person adjudged by a court or other adjudicatory body to
be liable to the Trust or its shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of his
or her duties (collectively, "disabling conduct"), or not to have
acted in good faith in the reasonable belief that his or her action
was in the best interest of the Trust. In the event of a settlement,
no indemnification may be provided unless there has been a
determination, as specified in the Declaration of Trust, that the
officer or trustee did not engage in disabling conduct.
Pursuant to Section 11 of the Distribution Agreement, the Trust
agrees to indemnify and hold harmless the Distributor and each of its
directors and officers and each person, if any, who controls the
Distributor within the meaning of Section 15 of the 1933 Act against
any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss,
liability, claim, damages, or expense and reasonable counsel fees
incurred in connection therewith) arising by reason of any person
acquiring any shares, based upon the ground that the registration
statement, Prospectus, Statement of Additional Information,
shareholder reports or other information filed or made public by the
Trust (as from time to time amended) included an untrue statement of a
material fact or omitted to state a material fact required to be
stated or necessary in order to make the statements not misleading
under the 1933 Act, or any other statute or the common law. However,
the Trust does not agree to indemnify the Distributor or hold it
harmless to the extent that the statement or omission was made in
reliance upon, and in conformity with, information furnished to the
Trust by or on behalf of the Distributor. In no case is the indemnity
of the Trust in favor of the Distributor or any person indemnified to
be deemed to protect the Distributor or any person against any
liability to the Issuer or its security holders to which the
Distributor or such person would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.
Pursuant to the agreement by which Fidelity Service Company, Inc.
("FSC") is appointed transfer agent, the Trust agrees to indemnify and
hold FSC harmless against any losses, claims, damages, liabilities or
expenses (including reasonable counsel fees and expenses) resulting
from:
(1) any claim, demand, action or suit brought by any person other
than the Trust, including by a shareholder, which names FSC and/or the
Trust as a party and is not based on and does not result from FSC's
willful misfeasance, bad faith or negligence or reckless disregard of
duties, and arises out of or in connection with FSC's performance
under the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent
contributed to by FSC's willful misfeasance, bad faith or negligence
or reckless disregard of its duties) which results from the negligence
of the Trust, or from FSC's acting upon any instruction(s) reasonably
believed by it to have been executed or communicated by any person
duly authorized by the Trust, or as a result of FSC's acting in
reliance upon advice reasonably believed by FSC to have been given by
counsel for the Trust, or as a result of FSC's acting in reliance upon
any instrument or stock certificate reasonably believed by it to have
been genuine and signed, countersigned or executed by the proper
person.
Item 26. Business and Other Connections of Investment Advisers
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY (FMR)
82 Devonshire Street, Boston, MA 02109
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held,
during the past two fiscal years, the following positions of a
substantial nature.
Edward C. Johnson 3d Chairman of the Board and
Director of FMR; Chief
Executive Officer, Chairman
of the Board, and Director
of FMR Corp., Fidelity
Investments Money
Management, Inc. (FIMM),
Fidelity Management &
Research (U.K.) Inc. (FMR
U.K.), Fidelity Management &
Research (Far East) Inc.
(FMR Far East), and Fidelity
Management & Research Co.,
Inc. (FMRC); Chairman of the
Executive Committee of FMR;
Chairman and Representative
Director of Fidelity
Investments Japan Limited
(FIJ); President and Trustee
of funds advised by FMR.
Robert C. Pozen President and Director of
FMR; Senior Vice President
and Trustee of funds advised
by FMR; President and
Director of FIMM, FMRC, FMR
U.K., and FMR Far East;
Director of Strategic
Advisers, Inc.; Previously,
General Counsel, Managing
Director, and Senior Vice
President of FMR Corp.
Peter S. Lynch Vice Chairman of the Board
and Director of FMR and FMRC.
John Avery Vice President of FMR and of
funds advised by FMR.
Robert Bertelson Vice President of FMR and of
a fund advised by FMR.
John H. Carlson Vice President of FMR and of
funds advised by FMR.
Robert C. Chow Vice President of FMR and of
a fund advised by FMR.
Dwight D. Churchill Senior Vice President of FMR
and Vice President of Bond
Funds advised by FMR; Vice
President of FIMM.
Laura B. Cronin Vice President of FMR and
Treasurer of FMR, FIMM, FMR
U.K., FMRC and FMR Far East.
Barry Coffman Vice President of FMR and of
a fund advised by FMR.
Arieh Coll Vice President of FMR.
Catherine Collins Vice President of FMR.
Frederic G. Corneel Tax Counsel of FMR.
William Danoff Senior Vice President of FMR
and Vice President of funds
advised by FMR.
Scott E. DeSano Vice President of FMR.
Penelope Dobkin Vice President of FMR and of
a fund advised by FMR.
Walter C. Donovan Vice President of FMR.
Bettina Doulton Senior Vice President of FMR
and of funds advised by FMR.
Stephen DuFour Vice President of FMR and of
a fund advised by FMR.
Maria F. Dwyer Vice President of FMR and
Deputy Treasurer of the
Fidelity funds.
Margaret L. Eagle Vice President of FMR and of
a fund advised by FMR.
William R. Ebsworth Vice President of FMR.
David Felman Vice President of FMR and of
a fund advised by FMR.
Richard B. Fentin Senior Vice President of FMR
and Vice President of a fund
advised by FMR.
Karen Firestone Vice President of FMR and of
a fund advised by FMR.
Michael B. Fox Assistant Treasurer of FMR,
FIMM, FMR U.K., and FMR Far
East; Vice President and
Treasurer of FMR Corp. and
Strategic Advisers, Inc.;
Vice President of FMR U.K.,
FMR Far East, and FIMM.
Gregory Fraser Vice President of FMR and of
funds advised by FMR.
Jay Freedman Assistant Clerk of FMR; Clerk
of FMR Corp., FMR U.K., FMR
Far East, FMRC, and
Strategic Advisers, Inc.;
Secretary of FIMM; Vice
President Deputy General
Counsel FMR Corp.
David L. Glancy Vice President of FMR and of
funds advised by FMR.
Barry A. Greenfield Vice President of FMR and of
funds advised by FMR.
Boyce I. Greer Senior Vice President of FMR
and Vice President of Money
Market Funds advised by FMR;
Vice President of FIMM.
Bart A. Grenier Senior Vice President of FMR
and Vice President of
High-Income Funds advised by
FMR.
Robert J. Haber Vice President of FMR.
Richard C. Habermann Senior Vice President of FMR
and Vice President of funds
advised by FMR.
Fred L. Henning Jr. Senior Vice President of FMR;
Senior Vice President of
FIMM; Vice President of
Fixed-Income Funds advised
by FMR.
Bruce T. Herring Vice President of FMR.
Robert F. Hill Vice President of FMR and
Director of Technical
Research.
Frederick Hoff Vice President of FMR.
Abigail P. Johnson Senior Vice President of FMR
and Vice President of funds
advised by FMR; Director of
FMR Corp.; Associate
Director and Senior Vice
President of Equity Funds
advised by FMR.
David B. Jones Vice President of FMR.
Steven Kaye Senior Vice President of FMR
and of a fund advised by FMR.
Francis V. Knox Vice President of FMR;
Compliance Officer of FMR
U.K. and FMR Far East.
Harris Leviton Vice President of FMR and of
a fund advised by FMR.
Bradford E. Lewis Vice President of FMR and of
funds advised by FMR.
Richard R. Mace Jr. Vice President of FMR and of
funds advised by FMR.
Shigeki Makino Vice President of FMR.
Charles A. Mangum Vice President of FMR and of
funds advised by FMR.
Kevin McCarey Vice President of FMR and of
funds advised by FMR.
James McDowell Senior Vice President of FMR.
Neal P. Miller Vice President of FMR and of
a fund advised by FMR.
Jacques Perold Vice President of FMR.
Stephen Petersen Senior Vice President of FMR
and Vice President of funds
advised by FMR.
Alan Radlo Vice President of FMR.
Eric D. Roiter Vice President, General
Counsel, and Clerk of FMR
and Secretary of funds
advised by FMR.
Lee H. Sandwen Vice President of FMR.
Patricia A. Satterthwaite Vice President of FMR and of
funds advised by FMR.
Fergus Shiel Vice President of FMR and of
funds advised by FMR.
Richard A. Silver Vice President of FMR.
Carol A. Smith-Fachetti Vice President of FMR.
Steven J. Snider Vice President of FMR and of
funds advised by FMR.
Thomas T. Soviero Vice President of FMR and of
a fund advised by FMR.
Richard Spillane Senior Vice President of FMR;
Associate Director and
Senior Vice President of
Equity Funds advised by FMR;
Previously, Senior Vice
President and Director of
Operations and Compliance of
FMR U.K.
Thomas M. Sprague Vice President of FMR and of
a fund advised by FMR.
Robert E. Stansky Senior Vice President of FMR
and Vice President of a fund
advised by FMR.
Scott D. Stewart Vice President of FMR and of
funds advised by FMR.
Beth F. Terrana Senior Vice President of FMR
and Vice President of funds
advised by FMR.
Yoko Tilley Vice President of FMR.
Joel C. Tillinghast Vice President of FMR and of
a fund advised by FMR.
Robert Tuckett Vice President of FMR.
Jennifer Uhrig Vice President of FMR and of
funds advised by FMR.
George A. Vanderheiden Senior Vice President of FMR
and Director of FMR Corp.
Jason Weiner Vice President of FMR and of
a fund advised by FMR.
Steven S. Wymer Vice President of FMR and of
a fund advised by FMR.
(2) FMR CO., INC. (FMRC)
82 Devonshire Street, Boston, MA 02109
FMRC provides investment advisory services to Fidelity Management &
Research Company. The directors and officers of the Sub-Adviser have
held the following positions of a substantial nature during the past
two fiscal years.
Edward C. Johnson 3d Chairman of the Board and
Director of FMRC, FMR U.K.,
FMR, FMR Corp., FIMM, and
FMR Far East; President and
Chief Executive Officer of
FMR Corp.; Chairman of the
Executive Committee of FMR;
Chairman and Representative
Director of Fidelity
Investments Japan Limited
(FIJ); President and Trustee
of funds advised by FMR.
Robert C. Pozen Senior Vice President and
Trustee of funds advised by
FMR; President and Director
of FMRC, FIMM, FMR, FMR
U.K., and FMR Far East;
Director of Strategic
Advisers, Inc.; Previously,
General Counsel, Managing
Director, and Senior Vice
President of FMR Corp.
Peter S. Lynch Vice Chairman of the Board
and Director of FMR and FMRC.
Brian Clancy Vice President.
Laura B. Cronin Treasurer of FMRC, FMR U.K.,
FMR Far East, FMR, and FIMM
and Vice President of FMR.
Jay Freedman Assistant Clerk of FMR; Clerk
of FMR Corp., FMR U.K., FMR
Far East, FMRC, and
Strategic Advisers, Inc.;
Secretary of FIMM; Vice
President Deputy General
Counsel FMR Corp.
(3) FIDELITY MANAGEMENT & RESEARCH (U.K.) INC. (FMR U.K.)
25 Lovat Lane, London, EC3R 8LL, England
FMR U.K. provides investment advisory services to Fidelity Management
& Research Company and Fidelity Management Trust Company. The
directors and officers of the Sub-Adviser have held the following
positions of a substantial nature during the past two fiscal years.
Edward C. Johnson 3d Chairman of the Board and
Director of FMR U.K., FMRC,
FMR, FMR Corp., FIMM, and
FMR Far East; President and
Chief Executive Officer of
FMR Corp.; Chairman of the
Executive Committee of FMR;
Chairman and Representative
Director of Fidelity
Investments Japan Limited
(FIJ); President and Trustee
of funds advised by FMR.
Robert C. Pozen President and Director of FMR
U.K.; Senior Vice President
and Trustee of funds advised
by FMR; President and
Director of FIMM, FMR, FMRC,
and FMR Far East; Director
of Strategic Advisers, Inc.;
Previously, General Counsel,
Managing Director, and
Senior Vice President of FMR
Corp.
Laura B. Cronin Treasurer of FMR U.K., FMR
Far East, FMR, and FIMM and
Vice President of FMR.
Michael B. Fox Assistant Treasurer of FMR
U.K., FMR, FMR Far East,
FMRC, and FIMM; Vice
President of FMR U.K., FMR
Far East, and FIMM; Vice
President and Treasurer of
FMR Corp. and Strategic
Advisers, Inc.
Simon Fraser Senior Vice President of FMR
U.K. and Director and
President of FIIA.
Jay Freedman Clerk of FMR U.K., FMR Far
East, FMR Corp., FMRC, and
Strategic Advisers, Inc.;
Assistant Clerk of FMR;
Secretary of FIMM; Vice
President Deputy General
Counsel FMR Corp.
Susan Englander Hislop Assistant Clerk of FMR U.K.,
FMR Far East, and Strategic
Advisers, Inc.; Assistant
Secretary of FIMM.
Francis V. Knox Compliance Officer of FMR
U.K. and FMR Far East; Vice
President of FMR.
(4) FIDELITY MANAGEMENT & RESEARCH (Far East) INC. (FMR Far East)
Shiroyama JT Mori Bldg., 4-3-1 Toranomon Minato-ku, Tokyo 105,
Japan
FMR Far East provides investment advisory services to Fidelity
Management & Research Company and Fidelity Management Trust Company.
The directors and officers of the Sub-Adviser have held the following
positions of a substantial nature during the past two fiscal years.
Edward C. Johnson 3d Chairman of the Board and
Director of FMR Far East,
FMR, FMR Corp., FMRC, FIMM,
and FMR U.K.; Chairman of
the Executive Committee of
FMR; President and Chief
Executive Officer of FMR
Corp.; Chairman and
Representative Director of
Fidelity Investments Japan
Limited (FIJ); President and
Trustee of funds advised by
FMR.
Robert C. Pozen President and Director of FMR
Far East; Senior Vice
President and Trustee of
funds advised by FMR;
President and Director of
FIMM, FMR U.K., FMRC, and
FMR; Director of Strategic
Advisers, Inc.; Previously,
General Counsel, Managing
Director, and Senior Vice
President of FMR Corp.
Robert H. Auld Senior Vice President of FMR
Far East.
Laura B. Cronin Treasurer of FMR Far East,
FMR U.K., FMR, FMRC, and
FIMM and Vice President of
FMR.
Michael B. Fox Assistant Treasurer of FMR
Far East, FMR, FMR U.K., and
FIMM; Vice President of FMR
Far East and FMR U.K.; Vice
President and Treasurer of
FMR Corp. and Strategic
Advisers, Inc.
Francis V. Knox Compliance Officer of FMR Far
East and FMR U.K.; Vice
President of FMR.
Jay Freedman Clerk of FMR Far East, FMR
U.K., FMR Corp., FMRC, and
Strategic Advisers, Inc.;
Assistant Clerk of FMR;
Secretary of FIMM; Vice
President Deputy General
Counsel FMR Corp.
Susan Englander Hislop Assistant Clerk of FMR Far
East, FMR U.K., and
Strategic Advisers, Inc.;
Assistant Secretary of FIMM.
Billy Wilder Vice President of FMR Far
East; President and
Representative Director of
FIJ.
(5) FIDELITY INVESTMENTS MONEY MANAGEMENT, INC. (FIMM)
1 Spartan Way, Merrimack, NH 03054
FIMM provides investment advisory services to Fidelity Management &
Research Company. The directors and officers of the Sub-Adviser have
held the following positions of a substantial nature during the past
two fiscal years.
Edward C. Johnson 3d Chairman of the Board and
Director of FIMM, FMR, FMR
Corp., FMR Far East, FMRC,
and FMR U.K.; Chairman of
the Executive Committee of
FMR; President and Chief
Executive Officer of FMR
Corp.; Chairman and
Representative Director of
Fidelity Investments Japan
Limited (FIJ); President and
Trustee of funds advised by
FMR.
Robert C. Pozen President and Director of
FIMM; Senior Vice President
and Trustee of funds advised
by FMR; President and
Director of FMR, FMR U.K.,
FMRC, and FMR Far East;
Director of Strategic
Advisers, Inc.; Previously,
General Counsel, Managing
Director, and Senior Vice
President of FMR Corp.
Fred L. Henning Jr. Senior Vice President of
FIMM; Senior Vice President
of FMR and Vice President of
Fixed-Income Funds advised
by FMR.
Boyce I. Greer Vice President of FIMM;
Senior Vice President of FMR
and Vice President of Money
Market Funds advised by FMR.
Dwight D. Churchill Vice President of FIMM;
Senior Vice President of FMR
and Vice President of Bond
Funds advised by FMR.
Laura B. Cronin Treasurer of FIMM, FMR Far
East, FMR U.K., FMRC, and
FMR and Vice President of FMR.
Michael B. Fox Assistant Treasurer of FIMM,
FMR U.K., FMR Far East, and
FMR; Vice President and
Treasurer of FMR Corp. and
Strategic Advisers, Inc.;
Vice President of FIMM, FMR
U.K., and FMR Far East.
Jay Freedman Secretary of FIMM; Clerk of
FMR U.K., FMR Far East, FMR
Corp., FMRC, and Strategic
Advisers, Inc.; Assistant
Clerk of FMR; Vice President
Deputy General Counsel FMR
Corp.
Susan Englander Hislop Assistant Secretary of FIMM;
Assistant Clerk of FMR U.K.,
FMR Far East, and Strategic
Advisers, Inc.
Stanley N. Griffith Assistant Secretary of FIMM.
(6) FIDELITY INVESTMENTS JAPAN LIMITED (FIJ)
Shiroyama JT Mori Bldg., 4-3-1 Toranomon Minato-ku, Tokyo 105,
Japan
The directors and officers of FIJ have held, during the past two
fiscal years, the following positions of a substantial nature.
Edward C. Johnson 3d Chairman and Representative
Director of FIJ; Chairman of
the Board and Director of
FMR Far East, FMR, FMR
Corp., FMR U.K., FMRC, and
FIMM; Chairman of the
Executive Committee of FMR;
President and Chief
Executive Officer of FMR
Corp.; President and Trustee
of funds advised by FMR.
Yasuo Kuramoto Vice Chairman and
Representative Director of
FIJ.
Billy Wilder President and Representative
Director of FIJ; Vice
President of FMR Far East.
Noboru Kawai Director and General Manager
of Administration of FIJ.
Tetsuzo Nishimura Director and Vice President
of Wholesales/ Broker
Distribution of FIJ.
Hiroshi Yamashita Senior Managing Director of
FIJ.
Yasushi Murofushi Statutory Auditor of FIJ.
Takeshi Okazaki Director and Head of
Institutional Sales of FIJ.
Simon Haslam Director of FIJ; Director and
Chief Financial Officer of
FIIA, FISL (U.K.), and FII;
Director and Secretary of
FIIA(U.K.)L; Previously,
Chief Financial Officer of
FIL; Company Secretary of
Fidelity Investments Group
of Companies (U.K.).
(7) BANKERS TRUST COMPANY (BT)
One Bankers Trust Plaza, New York, NY 10006
BT provides investment advisory services to Spartan 500 Index Fund
and Fidelity Management & Research Company. The directors and officers
of BT have held, during the past two fiscal years, the following
positions of a substantial nature.
Josef Ackermann Chairman of the Board, Chief
Executive Officer, and
President of BT and Bankers
Trust Corporation.
Eugene A. Ludwig Vice Chairman of BT and
Bankers Trust Corporation.
Hermann-Josef Lamberti Vice Chairman of BT and
Bankers Trust Corporation.
Mary Cirillo Managing Director of BT and
Executive Vice President of
Bankers Trust Corporation.
Michael Fazio Managing Director of BT and
Executive Vice President of
Bankers Trust Corporation.
Troland S. Link Managing Director and General
Counsel of BT and General
Counsel of Bankers Trust
Corporation.
Item 27. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for
all funds advised by FMR or an affiliate.
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with Fund
Edward L. McCartney Director and President None
J. Gary Burkhead Director None
Paul J. Gallagher Director None
Kevin J. Kelly Director None
Daniel T. Geraci Executive Vice President None
Eric D. Roiter Vice President and Clerk Secretary
Jane Greene Treasurer and Controller None
Gary Greenstein Assistant Treasurer None
Jay Freedman Assistant Clerk None
Linda Capps Holland Compliance Officer None
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 28. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31a of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company or Fidelity
Service Company, Inc., 82 Devonshire Street, Boston, MA 02109, or the
funds' respective custodians, the Bank of New York, 110 Washington
Street, New York, N.Y. (Fidelity Intermediate Bond Fund), Bankers
Trust Company, 130 Liberty Street, New York, N.Y. 10006 (Spartan 500
Index Fund), Brown Brothers Harriman & Company, 40 Water Street,
Boston, MA 02109 (Fidelity Large Cap Stock Fund and Fidelity Small Cap
Stock Fund), and The Chase Manhattan Bank, 1 Chase Manhattan Plaza,
New York, NY (Fidelity Mid-Cap Stock Fund).
Item 29. Management Services
Not applicable.
Item 30. Undertakings
(a) The Registrant undertakes for Fidelity Intermediate Bond Fund,
Spartan 500 Index Fund (formerly Spartan Market Index Fund), Fidelity
Large Cap Stock Fund, and Fidelity Small Cap Stock Fund: (1) to call a
meeting of shareholders for the purpose of voting upon the questions
of removal of a trustee or trustees, when requested to do so by record
holders of not less than 10% of its outstanding shares; and (2) to
assist in communications with other shareholders pursuant to Section
16(c)(1) and (2), whenever shareholders meeting the qualifications set
forth in Section 16(c) seek the opportunity to communicate with other
shareholders with a view toward requesting a meeting.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 69 to the Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Boston, and Commonwealth of Massachusetts, on the 18th day
of April 2000.
Fidelity Commonwealth Trust
By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons
in the capacities and on the dates indicated.
(Signature) (Title) (Date)
/s/Edward C. Johnson 3d President and Trustee April 18, 2000
(dagger)
Edward C. Johnson 3d (Principal Executive Officer)
/s/Robert A. Dwight Treasurer April 18, 2000
Robert A. Dwight
/s/Robert C. Pozen Trustee April 18, 2000
Robert C. Pozen
/s/Ralph F. Cox Trustee April 18, 2000
*
Ralph F. Cox
/s/Phyllis Burke Davis * Trustee April 18, 2000
Phyllis Burke Davis
/s/Robert M. Gates Trustee April 18, 2000
*
Robert M. Gates
/s/Donald J. Kirk Trustee April 18, 2000
*
Donald J. Kirk
/s/Ned C. Lautenbach Trustee April 18, 2000
*
Ned C. Lautenbach
/s/Peter S. Lynch Trustee April 18, 2000
*
Peter S. Lynch
/s/Marvin L. Mann Trustee April 18, 2000
*
Marvin L. Mann
/s/William O. McCoy Trustee April 18, 2000
*
William O. McCoy
/s/Gerald C. McDonough Trustee April 18, 2000
*
Gerald C. McDonough
/s/Thomas R. Williams Trustee April 18, 2000
*
Thomas R. Williams
(dagger) Signatures affixed by Robert C. Pozen pursuant to a power of
attorney dated July 17, 1997 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of
attorney dated December 16, 1999 and filed herewith.
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee, or General
Partner, as the case may be, of the following investment companies:
Fidelity Aberdeen Street Trust Fidelity Hereford Street Trust
Fidelity Advisor Series I Fidelity Income Fund
Fidelity Advisor Series II Fidelity Institutional Cash
Fidelity Advisor Series III Portfolios
Fidelity Advisor Series IV Fidelity Institutional
Fidelity Advisor Series V Tax-Exempt Cash Portfolios
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts
Fidelity Beacon Street Trust Municipal Trust
Fidelity Boston Street Trust Fidelity Money Market Trust
Fidelity California Municipal Fidelity Mt. Vernon Street
Trust Trust
Fidelity California Municipal Fidelity Municipal Trust
Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal
Fidelity Charles Street Trust Trust
Fidelity Commonwealth Trust Fidelity New York Municipal
Fidelity Concord Street Trust Trust II
Fidelity Congress Street Fund Fidelity Phillips Street Trust
Fidelity Contrafund Fidelity Puritan Trust
Fidelity Corporate Trust Fidelity Revere Street Trust
Fidelity Court Street Trust Fidelity School Street Trust
Fidelity Court Street Trust II Fidelity Securities Fund
Fidelity Covington Trust Fidelity Select Portfolios
Fidelity Daily Money Fund Fidelity Sterling Performance
Fidelity Destiny Portfolios Portfolio, L.P.
Fidelity Deutsche Mark Fidelity Summer Street Trust
Performance Fidelity Trend Fund
Portfolio, L.P. Fidelity U.S.
Fidelity Devonshire Trust Investments-Bond Fund, L.P.
Fidelity Exchange Fund Fidelity U.S.
Fidelity Financial Trust Investments-Government
Fidelity Fixed-Income Trust Securities
Fidelity Government Fund, L.P.
Securities Fund Fidelity Union Street Trust
Fidelity Hastings Street Trust Fidelity Union Street Trust II
Fidelity Yen Performance
Portfolio, L.P.
Newbury Street Trust
Variable Insurance Products
Fund
Variable Insurance Products
Fund II
Variable Insurance Products
Fund III
in addition to any other investment company for which Fidelity
Management & Research Company or an affiliate acts as investment
adviser and for which the undersigned individual serves as President
and Director, Trustee, or General Partner (collectively, the "Funds"),
hereby constitute and appoint Robert C. Pozen my true and lawful
attorney-in-fact, with full power of substitution, and with full power
to him to sign for me and in my name in the appropriate capacity, all
Registration Statements of the Funds on Form N-1A, Form N-8A, or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A, Form N-8A, or any successor thereto, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such
things in my name and on my behalf in connection therewith as said
attorney-in-fact deems necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and the Investment Company
Act of 1940, and all related requirements of the Securities and
Exchange Commission. I hereby ratify and confirm all that said
attorney-in-fact or his substitutes may do or cause to be done by
virtue hereof. This power of attorney is effective for all documents
filed on or after August 1, 1997.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d July 17, 1997
Edward C. Johnson 3d
POWER OF ATTORNEY
We, the undersigned Directors, Trustees, or General Partners, as the
case may be, of the following investment companies:
Colchester Street Trust Fidelity Hastings Street Trust
Fidelity Aberdeen Street Trust Fidelity Hereford Street Trust
Fidelity Advisor Series I Fidelity Income Fund
Fidelity Advisor Series II Fidelity Institutional
Fidelity Advisor Series III Tax-Exempt Cash Portfolios
Fidelity Advisor Series IV Fidelity Investment Trust
Fidelity Advisor Series V Fidelity Magellan Fund
Fidelity Advisor Series VI Fidelity Massachusetts
Fidelity Advisor Series VII Municipal Trust
Fidelity Advisor Series VIII Fidelity Money Market Trust
Fidelity Beacon Street Trust Fidelity Mt. Vernon Street
Fidelity Boston Street Trust Trust
Fidelity California Municipal Fidelity Municipal Trust
Trust Fidelity Municipal Trust II
Fidelity California Municipal Fidelity New York Municipal
Trust II Trust
Fidelity Capital Trust Fidelity New York Municipal
Fidelity Charles Street Trust Trust II
Fidelity Commonwealth Trust Fidelity Oxford Street Trust
Fidelity Concord Street Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Court Street Trust Fidelity School Street Trust
Fidelity Court Street Trust II Fidelity Securities Fund
Fidelity Covington Trust Fidelity Select Portfolios
Fidelity Destiny Portfolios Fidelity Summer Street Trust
Fidelity Devonshire Trust Fidelity Trend Fund
Fidelity Exchange Fund Fidelity U.S.
Fidelity Financial Trust Investments-Bond Fund, L.P.
Fidelity Fixed-Income Trust Fidelity U.S.
Fidelity Government Investments-Government
Securities Fund Securities
Fund, L.P.
Fidelity Union Street Trust
Fidelity Union Street Trust II
Newbury Street Trust
Variable Insurance Products
Fund
Variable Insurance Products
Fund II
plus any other investment company for which Fidelity Management &
Research Company or an affiliate acts as investment adviser and for
which the undersigned individual serves as Directors, Trustees, or
General Partners (collectively, the "Funds"), hereby constitute and
appoint Arthur J. Brown, Arthur C. Delibert, Stephanie A. Djinis,
Robert C. Hacker, Thomas M. Leahey, Richard M. Phillips, and Dana L.
Platt, each of them singly, our true and lawful attorneys-in-fact,
with full power of substitution, and with full power to each of them,
to sign for us and in our names in the appropriate capacities, all
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A or any successor thereto, any Registration
Statements on Form N-14, and any supplements or other instruments in
connection therewith, and generally to do all such things in our names
and behalf in connection therewith as said attorneys-in-fact deems
necessary or appropriate, to comply with the provisions of the
Securities Act of 1933 and the Investment Company Act of 1940, and all
related requirements of the Securities and Exchange Commission. I
hereby ratify and confirm all that said attorneys-in-fact or their
substitutes may do or cause to be done by virtue hereof. This power
of attorney is effective for all documents filed on or after January
1, 2000.
WITNESS our hands on this sixteenth day of December, 1999.
/s/Edward C. Johnson 3d /s/Peter S. Lynch
Edward C. Johnson 3d Peter S. Lynch
/s/Ralph F. Cox /s/William O. McCoy
Ralph F. Cox William O. McCoy
/s/Phyllis Burke Davis /s/Gerald C. McDonough
Phyllis Burke Davis Gerald C. McDonough
/s/Ned C. Lautenbach /s/Marvin L. Mann
Ned C. Lautenbach Marvin L. Mann
/s/Donald J. Kirk /s/Thomas R. Williams
Donald J. Kirk Thomas R. Williams
/s/Robert C. Pozen /s/Robert M. Gates
Robert C. Pozen Robert M. Gates
POWER OF ATTORNEY
I, the undersigned Treasurer and principal financial and accounting
officer of the following investment companies:
Colchester Street Trust Fidelity Hastings Street Trust
Fidelity Aberdeen Street Trust Fidelity Hereford Street Trust
Fidelity Advisor Series I Fidelity Income Fund
Fidelity Advisor Series II Fidelity Institutional
Fidelity Advisor Series III Tax-Exempt Cash Portfolios
Fidelity Advisor Series IV Fidelity Investment Trust
Fidelity Advisor Series V Fidelity Magellan Fund
Fidelity Advisor Series VI Fidelity Massachusetts
Fidelity Advisor Series VII Municipal Trust
Fidelity Advisor Series VIII Fidelity Money Market Trust
Fidelity Beacon Street Trust Fidelity Mt. Vernon Street
Fidelity Boston Street Trust Trust
Fidelity California Municipal Fidelity Municipal Trust
Trust Fidelity Municipal Trust II
Fidelity California Municipal Fidelity New York Municipal
Trust II Trust
Fidelity Capital Trust Fidelity New York Municipal
Fidelity Charles Street Trust Trust II
Fidelity Commonwealth Trust Fidelity Oxford Street Trust
Fidelity Concord Street Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Court Street Trust Fidelity School Street Trust
Fidelity Court Street Trust II Fidelity Securities Fund
Fidelity Covington Trust Fidelity Select Portfolios
Fidelity Destiny Portfolios Fidelity Summer Street Trust
Fidelity Devonshire Trust Fidelity Trend Fund
Fidelity Exchange Fund Fidelity U.S.
Fidelity Financial Trust Investments-Bond Fund, L.P.
Fidelity Fixed-Income Trust Fidelity U.S.
Fidelity Government Investments-Government
Securities Fund Securities
Fund, L.P.
Fidelity Union Street Trust
Fidelity Union Street Trust II
Newbury Street Trust
Variable Insurance Products
Fund
Variable Insurance Products
Fund II
Variable Insurance Products
Fund III
plus any other investment company for which Fidelity Management &
Research Company or an affiliate acts as investment adviser and for
which the undersigned individual serves as President and Director,
Trustee, or General Partner (collectively, the "Funds"), hereby
constitute and appoint John H. Costello my true and lawful
attorney-in-fact, with full power of substitution, and with full power
to sign for me and in my name in the appropriate capacity, all
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A or any successor thereto, any Registration
Statements on Form N-14, and any supplements or other instruments in
connection therewith, and generally to do all such things in my name
and behalf in connection therewith as said attorneys-in-fact deems
necessary or appropriate, to comply with the provisions of the
Securities Act of 1933 and the Investment Company Act of 1940, and all
related requirements of the Securities and Exchange Commission. I
hereby ratify and confirm all that said attorney-in-fact or their
substitutes may do or cause to be done by virtue hereof. This power
of attorney is effective for all documents filed on or after February
1, 2000.
WITNESS my hand on the date set forth below.
/s/Robert A. Dwight January 20, 2000
Robert A. Dwight
POWER OF ATTORNEY
I, the undersigned Secretary of the investment companies for which
Fidelity Management & Research Company or an affiliate acts as
investment adviser (collectively, the "Funds"), hereby severally
constitute and appoint Arthur J. Brown, Arthur C. Delibert, Stephanie
A. Djinis, Robert C. Hacker, Thomas M. Leahey, Richard M. Phillips,
and Dana L. Platt, each of them singly, my true and lawful
attorneys-in-fact, with full power of substitution, and with full
power to each of them, to sign for me and in my name in the
appropriate capacity, any and all representations with respect to the
consistency of foreign language translation prospectuses with the
original prospectuses filed in connection with the Post-Effective
Amendments for the Funds as said attorneys-in-fact deem necessary or
appropriate to comply with the provisions of the Securities Act of
1933 and the Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission. I hereby
ratify and confirm all that said attorneys-in-fact, or their
substitutes may do or cause to be done by virtue hereof. This power
of attorney is effective for all documents filed on or after January
1, 1998.
WITNESS my hand on this twenty-ninth day of December, 1997.
/s/Eric Roiter
Eric Roiter
Exhibit a(1)
AMENDED AND RESTATED DECLARATION OF TRUST
FIDELITY COMMONWEALTH TRUST
AMENDED AND RESTATED DECLARATION OF TRUST, made December 16, 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 for the investment and
reinvestment of funds contributed thereto;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust hereunder shall be held and managed in trust
under this Amended and Restated Declaration of Trust as herein set
forth below.
_________________________________________________
ARTICLE I
NAME AND DEFINITIONS
NAME
SECTION 1. This Trust shall be known as "Fidelity Commonwealth
Trust."
DEFINITIONS
SECTION 2. Wherever used herein, unless otherwise required by the
context or specifically provided:
(a) The terms "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 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;
(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;
(f) "Shareholder" means a record owner of Shares of the Trust;
(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 Class or
Classes of Shares as the Trustees may from time to time create and
establish and including fractions of Shares as well as whole Shares 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;
(i) "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;
(j) "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
(k) "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 Classes 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. Each 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 of any
Series or Class of the Trust (a) to create and establish (and to
change in any manner) Shares or any Series or Classes 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 Classes thereof into a greater or lesser
number; (c) to classify or reclassify any issued Shares into one or
more Series or Classes 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 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,
whether directly in such resolution or by reference to, or approval
of, another document that sets forth such relative rights and
preferences of the Shares of such Series or Class including, without
limitation, any registration statement of the Trust, or as otherwise
provided in such resolution. 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 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, 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 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 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 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 trust 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 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.
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.
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.
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 special meeting 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 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 Trust, the
Trust 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 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 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 or incapacity shall be conclusive.
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 or Series.
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, the 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
that they, in their discretion, shall deem proper to accomplish the
purpose of this Trust. Subject to any applicable limitation in 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 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 one or more banks, trust 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 custodians
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 Principal Underwriter 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 investment adviser, manager,
custodian, 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 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.
(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 Series.
(v) To issue, sell, repurchase, redeem, retire, cancel, acquire,
hold, resell, reissue, dispose of, and otherwise deal in Shares and,
subject to the provisions set forth in Article III and Article X, to
apply to any such repurchase, redemption, retirement, cancellation or
acquisition of Shares any funds or property of the Trust, or the
particular Series of the Trust, with respect to which such Shares are
issued.
(w) Notwithstanding any other provision hereof, to invest all or a
portion of the assets of any Series in one or more open-end investment
companies, including investment by means of transfer of such assets in
exchange for an interest or interests in such investment company or
companies or by any other method approved by the Trustees.
(x) 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.
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 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,
the 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 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, 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 state laws and
regulations; charges of custodians, transfer agents, and registrars;
expenses of preparing and setting up in type prospectuses and
statements of additional information; expenses of printing and
distributing prospectuses 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 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. Such 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 one or more transfer agency and Shareholder service
contracts whereby the other party shall undertake to furnish the
Trustees with transfer agency and Shareholder services. 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 (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.
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
SECTION 1. The Shareholders shall have power to vote (a) for the
election of Trustees as provided in Article IV, Section 2; (b) for the
removal of Trustees as provided in Article IV, Section 3(d); (c) with
respect to any investment advisory or management contract as provided
in Article VII, Sections 1 and 5; (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; (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 (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
Commission or any state, 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 (a) when required by the 1940 Act,
Shares shall be voted in the aggregate and not by individual Series;
and (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 Shareholder 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) of such
Series or Class thereof on any matter on which such Shareholder 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 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, 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 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, 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.
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, 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 as shall be allowed by the
Commission or by the 1940 Act.
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, 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, 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 dividend of stock or
other property 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.
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
order of the Commission applicable to the Series. The Trustees may
delegate any of its powers and duties under this Section 3 with
respect to appraisal of assets and liabilities. At any time, the
Trustees may cause the value 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.
REDEMPTION OF SHARES
SECTION 5. The Trustees may require Shareholders to redeem Shares for
any reason under terms set by the Trustees, including, but not limited
to, (i) the determination of the Trustees that direct or indirect
ownership of Shares of any Series has or may become concentrated in
such Shareholder to an extent that would disqualify any Series as a
regulated investment company under the Internal Revenue Code of 1986,
as amended (or any successor statute thereto), (ii) the failure of a
Shareholder to supply a tax identification number if required to do
so, or (iii) the failure of a Shareholder to pay when due for the
purchase of Shares issued to him. The redemption shall be effected at
the redemption price and in the manner provided in this Article X.
The holders of Shares shall upon demand disclose to the Trustees in
writing such information with respect to direct and indirect ownership
of Shares as the Trustees deem necessary to comply with the provisions
of the Internal Revenue Code, or to comply with the requirements of
any other taxing authority.
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 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
Interested Persons 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 Paragraph (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 (i) such Covered
Person shall have provided appropriate security for such undertaking;
(ii) the Trust is insured against losses arising out of any such
advance payments; or (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.
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, ETC.
SECTION 1. It is hereby expressly declared that a trust is created
hereby and not a partnership, 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 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 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, 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.
DURATION; TERMINATION OF TRUST, A SERIES OR A CLASS; MERGERS, ETC.
SECTION 4.1. DURATION. The Trust shall continue without limitation
of time, but subject to the provisions of this Article XII.
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
Declaration of Trust 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 Declaration of Trust shall be
filed by the Trustees with the Secretary of The 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 Declarations of Trust 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 Declaration of Trust. In this instrument or in
any such supplemental Declaration of Trust, 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 Declaration of Trust. 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 The
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. Except as specifically provided herein, the Trustees may,
without shareholder vote, amend or otherwise supplement this
Declaration of Trust by making an amendment, a Declaration of Trust
supplemental hereto 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 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 as of the date set forth above.
/s/Edward C. Johnson 3d /s/Peter S. Lynch
Edward C. Johnson 3d* Peter S. Lynch*
/s/Ralph F. Cox /s/William O. McCoy
Ralph F. Cox William O. McCoy
/s/Phyllis Burke Davis /s/Gerald C. McDonough
Phyllis Burke Davis Gerald C. McDonough
/s/Robert M. Gates /s/Marvin L. Mann
Robert M. Gates Marvin L. Mann
/s/E. Bradley Jones /s/Robert C. Pozen
E. Bradley Jones Robert C. Pozen*
/s/Donald J. Kirk /s/Thomas R. Williams
Donald J. Kirk Thomas R. Williams
*Interested Trustees
The business addresses of the
members of the Board of
Trustees are:
INTERESTED TRUSTEES (*):
82 Devonshire Street
Boston, MA 02109
NON-INTERESTED TRUSTEES:
82 Devonshire Street
Boston, MA 02109
Mailing Address:
P.O. Box 9235
Boston, MA 02205-9235
FIDELITY COMMONWEALTH TRUST
82 Devonshire Street
Boston, MA 02109
Exhibit d(1)
MANAGEMENT CONTRACT
between
FIDELITY COMMONWEALTH TRUST:
FIDELITY INTERMEDIATE BOND FUND
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AMENDMENT made this 1st day of October, 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 dated December 1, 1994, 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 October 1, 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
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, 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 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 of
the date written above.
FIDELITY COMMONWEALTH TRUST
on behalf of Fidelity Intermediate Bond Fund
By /s/Robert C. Pozen
Robert C. Pozen
Senior Vice President
FIDELITY MANAGEMENT & RESEARCH COMPANY
By /s/Robert C. Pozen
Robert C. Pozen
President
Exhibit d(4)
MANAGEMENT CONTRACT
between
FIDELITY COMMONWEALTH TRUST:
FIDELITY LARGE CAP STOCK FUND
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AMENDMENT made this 1st day of October, 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 October 1, 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
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 .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, 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 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.
FIDELITY COMMONWEALTH TRUST
on behalf of Fidelity Large Cap Stock Fund
By /s/Robert C. Pozen
Robert C. Pozen
Senior Vice President
FIDELITY MANAGEMENT & RESEARCH COMPANY
By /s/Robert C. Pozen
Robert C. Pozen
President
Exhibit d(6)
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
AND
FIDELITY COMMONWEALTH TRUST ON BEHALF OF
FIDELITY INTERMEDIATE BOND FUND
AMENDMENT made this 1st day of October, 1999, by 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 Fidelity Intermediate Bond Fund (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 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 October 1, 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, and securities of 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
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 and/or to 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 June
30, 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 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 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, 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.
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
By /s/Laura B. Cronin
Laura Cronin
Treasurer
FIDELITY MANAGEMENT & RESEARCH COMPANY
By /s/Robert C. Pozen
Robert C. Pozen
President
FIDELITY COMMONWEALTH TRUST
on behalf of Fidelity Intermediate Bond Fund
By /s/Robert C. Pozen
Robert C. Pozen
Senior Vice President
Exhibit d(7)
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC.
AND
FIDELITY COMMONWEALTH TRUST ON BEHALF OF
FIDELITY INTERMEDIATE BOND FUND
AMENDMENT made this 1st day of October, 1999, by 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 Fidelity Intermediate Bond Fund (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 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 October 1, 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, and securities of 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
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 and/or to 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 June
30, 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 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 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, 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.
FIDELITY MANAGEMENT & RESEARCH (Far East) INC.
By /s/Laura B. Cronin
Laura Cronin
Treasurer
FIDELITY MANAGEMENT & RESEARCH COMPANY
By /s/Robert C.Pozen
Robert C. Pozen
President
FIDELITY COMMONWEALTH TRUST
on behalf of Fidelity Intermediate Bond Fund
By /s/Robert C. Pozen
Robert C. Pozen
Senior Vice President
Exhibit d(9)
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
AND
FIDELITY COMMONWEALTH TRUST ON BEHALF OF
FIDELITY LARGE CAP STOCK FUND
AMENDMENT made this 1st day of October, 1999, by 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 Fidelity Large Cap Stock Fund (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 May 18, 1995, 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 October 1, 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, and securities of 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
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 and/or to 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 July
31, 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 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 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, 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.
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
By /s/Laura B. Cronin
Laura Cronin
Treasurer
FIDELITY MANAGEMENT & RESEARCH COMPANY
By /s/Robert C. Pozen
Robert C. Pozen
President
FIDELITY COMMONWEALTH TRUST
on behalf of Fidelity Large Cap Stock Fund
By /s/Robert C. Pozen
Robert C. Pozen
Senior Vice President
Exhibit d(10)
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC.
AND
FIDELITY COMMONWEALTH TRUST ON BEHALF OF
FIDELITY LARGE CAP STOCK FUND
AMENDMENT made this 1st day of October, 1999, by 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 Fidelity Large Cap Stock Fund (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 May 18, 1995, 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 October 1, 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, and securities of 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
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 1934) to the Portfolio and/or to 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 July
31, 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 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 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, 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.
FIDELITY MANAGEMENT & RESEARCH (Far East) INC.
By /s/Laura B. Cronin
Laura Cronin
Treasurer
FIDELITY MANAGEMENT & RESEARCH COMPANY
By /s/Robert C. Pozen
Robert C. Pozen
President
FIDELITY COMMONWEALTH TRUST
on behalf of Fidelity Large Cap Stock Fund
By /s/Robert C. Pozen
Robert C. Pozen
Senior Vice President
Exhibit d(11)
FORM OF
SUB-ADVISORY AGREEMENT
between
FMR CO., INC. and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this day of , 200_, by and between FMR Co.,
Inc., a Massachusetts corporation with principal offices at 82
Devonshire Street, Boston, Massachusetts (hereinafter called the
``Sub-Adviser") and Fidelity Management & Research Company, a
Massachusetts corporation with principal offices at 82 Devonshire
Street, Boston, Massachusetts (hereinafter called the ``Adviser").
WHEREAS the Adviser has entered into a Management Contract with
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"), pursuant to which the Adviser
is to act as investment manager and adviser to the Portfolio, and
WHEREAS the Sub-Adviser was formed for the purpose of providing
investment management of equity and high income funds and advising
generally with respect to equity and high income instruments.
NOW, THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the Adviser and the Sub-Adviser agree
as follows:
1. (a) The Sub-Adviser shall, subject to the supervision of the
Adviser, direct the investments of all or such portion of the
Portfolio's assets as the Adviser shall designate 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 or Sub-Adviser. The Sub-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 personnel of the
Sub-Adviser performing services for the Portfolio relating to
research, statistical and investment activities. The Sub-Adviser is
authorized, in its discretion and without prior consultation with the
Portfolio or the Adviser, 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) The Sub-Adviser shall also furnish such reports, evaluations,
information or analyses to the Fund and the Adviser as the Fund's
Board of Trustees or the Adviser may request from time to time or as
the Sub-Adviser may deem to be desirable. The Sub-Adviser shall make
recommendations to the Fund's Board of Trustees with respect to
Portfolio policies, and shall carry out such policies as are adopted
by the Trustees. The Sub-Adviser shall, subject to review by the
Board of Trustees, furnish such other services as the Sub-Adviser
shall from time to time determine to be necessary or useful to perform
its obligations under this Agreement and which are not otherwise
furnished by the Adviser.
(c) The Sub-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 Sub-Adviser, which may include brokers or
dealers affiliated with the Adviser or Sub-Adviser. The Sub-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 l934) to the Portfolio and/or
the other accounts over which the Sub-Adviser, Adviser or their
affiliates exercise investment discretion. The Sub-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 Sub-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 Sub-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.
2. As compensation for the services to be furnished by the
Sub-Adviser hereunder, the Adviser agrees to pay the Sub-Adviser a
monthly fee equal to 50% of the management fee (including performance
adjustments, if any) that the Portfolio is obligated to pay the
Adviser under the Portfolio's Management Contract with the Adviser in
respect of that portion of the Portfolio's assets managed by the
Sub-Adviser during such month. Such fee shall not be reduced to
reflect expense reimbursements or fee waivers by the Adviser, if any,
in effect from time to time.
3. It is understood that Trustees, officers, and shareholders of the
Fund are or may be or become interested in the Adviser or the
Sub-Adviser as directors, officers or otherwise and that directors,
officers and stockholders of the Adviser or the Sub-Adviser are or may
be or become similarly interested in the Fund, and that the Adviser or
the Sub-Adviser may be or become interested in the Fund as a
shareholder or otherwise.
4. It is understood that the Portfolio will pay all its expenses
other than those expressly stated to be payable by the Sub-Adviser
hereunder or by the Adviser 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
Fund's Trustees other than those who are ``interested persons" of the
Fund, the Sub-Adviser 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 Sub-Adviser to the Adviser are not to be
deemed to be exclusive, the Sub-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
Agreement, interfere, in a material manner, with the Sub-Adviser's
ability to meet all of its obligations with respect to rendering
investment advice hereunder. The Sub-Adviser shall for all purposes
be an independent contractor and not an agent or employee of the
Adviser or the Fund.
6. In the absence of willful misfeasance, bad faith, gross negligence
or reckless disregard of obligations or duties hereunder on the part
of the Sub-Adviser, the Sub-Adviser 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.
7. (a) Subject to prior termination as provided in sub-paragraph (d)
of this paragraph 7, this Agreement shall continue in force until
_____, and indefinitely thereafter, but only so long as the
continuance after such period shall be specifically approved at least
annually by vote of the Fund'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 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 interpretive releases of, the Commission.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of
this paragraph 7, the terms of any continuance or modification of the
Agreement must have been approved by the vote of a majority of those
Trustees of the Fund who are not parties to such 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 Adviser, the Sub-Adviser 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 by vote of a majority of its
outstanding voting securities. This Agreement shall terminate
automatically upon the termination of the Management Contract between
the Fund, on behalf of the Portfolio, and the Adviser. This Agreement
shall terminate automatically in the event of its assignment.
8. The Sub-Adviser is hereby expressly put on notice of the
limitation of shareholder liability as set forth in the Declaration of
Trust or other organizational document of the Fund and agrees that any
obligations of the Fund or the Portfolio arising in connection with
this Agreement shall be limited in all cases to the Portfolio and its
assets, and the Sub-Adviser shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the Portfolio.
Nor shall the Sub-Adviser seek satisfaction of any such obligation
from the Trustees or any individual Trustee.
9. 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 ``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 Investment Company Act of 1940 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 d(12)
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
AND
FIDELITY COMMONWEALTH TRUST ON BEHALF OF
FIDELITY MID-CAP STOCK FUND
AMENDMENT made this 1st day of October, 1999 by 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 Fidelity Mid-Cap Stock Fund (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 June 26, 1999, 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 October 1, 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, and securities of 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
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 and/or to 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 July
31, 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 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 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, 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.
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
By /s/Laura B. Cronin
Laura Cronin
Treasurer
FIDELITY MANAGEMENT & RESEARCH COMPANY
By /s/Robert C. Pozen
Robert C. Pozen
President
FIDELITY COMMONWEALTH TRUST
on behalf of Fidelity Mid-Cap Stock Fund
By /s/Robert C. Pozen
Robert C. Pozen
Senior Vice President
Exhibit d(13)
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC.
AND
FIDELITY COMMONWEALTH TRUST ON BEHALF OF
FIDELITY MID-CAP STOCK FUND
AMENDMENT made this 1st day of October, 1999, by 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 Fidelity Mid-Cap Stock Fund (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 June 26, 1999, 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 October 1, 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, and securities of 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
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 and/or to 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 July
31, 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 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 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, 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.
FIDELITY MANAGEMENT & RESEARCH (Far East) INC.
By /s/Laura B. Cronin
Laura Cronin
Treasurer
FIDELITY MANAGEMENT & RESEARCH COMPANY
By /s/Robert C. Pozen
Robert C. Pozen
President
FIDELITY COMMONWEALTH TRUST
on behalf of Fidelity Mid-Cap Stock Fund
By /s/Robert C. Pozen
Robert C. Pozen
Senior Vice President
Exhibit d(14)
FORM OF
SUB-ADVISORY AGREEMENT
between
FMR CO., INC. and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this day of , 200_, by and between FMR Co.,
Inc., a Massachusetts corporation with principal offices at 82
Devonshire Street, Boston, Massachusetts (hereinafter called the
``Sub-Adviser") and Fidelity Management & Research Company, a
Massachusetts corporation with principal offices at 82 Devonshire
Street, Boston, Massachusetts (hereinafter called the ``Adviser").
WHEREAS the Adviser has entered into a Management Contract with
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 Mid-Cap Stock Fund
(hereinafter called the ``Portfolio"), pursuant to which the Adviser
is to act as investment manager and adviser to the Portfolio, and
WHEREAS the Sub-Adviser was formed for the purpose of providing
investment management of equity and high income funds and advising
generally with respect to equity and high income instruments.
NOW, THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the Adviser and the Sub-Adviser agree
as follows:
1. (a) The Sub-Adviser shall, subject to the supervision of the
Adviser, direct the investments of all or such portion of the
Portfolio's assets as the Adviser shall designate 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 or Sub-Adviser. The Sub-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 personnel of the
Sub-Adviser performing services for the Portfolio relating to
research, statistical and investment activities. The Sub-Adviser is
authorized, in its discretion and without prior consultation with the
Portfolio or the Adviser, 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) The Sub-Adviser shall also furnish such reports, evaluations,
information or analyses to the Fund and the Adviser as the Fund's
Board of Trustees or the Adviser may request from time to time or as
the Sub-Adviser may deem to be desirable. The Sub-Adviser shall make
recommendations to the Fund's Board of Trustees with respect to
Portfolio policies, and shall carry out such policies as are adopted
by the Trustees. The Sub-Adviser shall, subject to review by the
Board of Trustees, furnish such other services as the Sub-Adviser
shall from time to time determine to be necessary or useful to perform
its obligations under this Agreement and which are not otherwise
furnished by the Adviser.
(c) The Sub-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 Sub-Adviser, which may include brokers or
dealers affiliated with the Adviser or Sub-Adviser. The Sub-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 l934) to the Portfolio and/or
the other accounts over which the Sub-Adviser, Adviser or their
affiliates exercise investment discretion. The Sub-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 Sub-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 Sub-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.
2. As compensation for the services to be furnished by the
Sub-Adviser hereunder, the Adviser agrees to pay the Sub-Adviser a
monthly fee equal to 50% of the management fee (including performance
adjustments, if any) that the Portfolio is obligated to pay the
Adviser under the Portfolio's Management Contract with the Adviser in
respect of that portion of the Portfolio's assets managed by the
Sub-Adviser during such month. Such fee shall not be reduced to
reflect expense reimbursements or fee waivers by the Adviser, if any,
in effect from time to time.
3. It is understood that Trustees, officers, and shareholders of the
Fund are or may be or become interested in the Adviser or the
Sub-Adviser as directors, officers or otherwise and that directors,
officers and stockholders of the Adviser or the Sub-Adviser are or may
be or become similarly interested in the Fund, and that the Adviser or
the Sub-Adviser may be or become interested in the Fund as a
shareholder or otherwise.
4. It is understood that the Portfolio will pay all its expenses
other than those expressly stated to be payable by the Sub-Adviser
hereunder or by the Adviser 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
Fund's Trustees other than those who are ``interested persons" of the
Fund, the Sub-Adviser 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 Sub-Adviser to the Adviser are not to be
deemed to be exclusive, the Sub-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
Agreement, interfere, in a material manner, with the Sub-Adviser's
ability to meet all of its obligations with respect to rendering
investment advice hereunder. The Sub-Adviser shall for all purposes
be an independent contractor and not an agent or employee of the
Adviser or the Fund.
6. In the absence of willful misfeasance, bad faith, gross negligence
or reckless disregard of obligations or duties hereunder on the part
of the Sub-Adviser, the Sub-Adviser 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.
7. (a) Subject to prior termination as provided in sub-paragraph (d)
of this paragraph 7, this Agreement shall continue in force until
_____, and indefinitely thereafter, but only so long as the
continuance after such period shall be specifically approved at least
annually by vote of the Fund'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 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 interpretive releases of, the Commission.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of
this paragraph 7, the terms of any continuance or modification of the
Agreement must have been approved by the vote of a majority of those
Trustees of the Fund who are not parties to such 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 Adviser, the Sub-Adviser 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 by vote of a majority of its
outstanding voting securities. This Agreement shall terminate
automatically upon the termination of the Management Contract between
the Fund, on behalf of the Portfolio, and the Adviser. This Agreement
shall terminate automatically in the event of its assignment.
8. The Sub-Adviser is hereby expressly put on notice of the
limitation of shareholder liability as set forth in the Declaration of
Trust or other organizational document of the Fund and agrees that any
obligations of the Fund or the Portfolio arising in connection with
this Agreement shall be limited in all cases to the Portfolio and its
assets, and the Sub-Adviser shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the Portfolio.
Nor shall the Sub-Adviser seek satisfaction of any such obligation
from the Trustees or any individual Trustee.
9. 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 ``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 Investment Company Act of 1940 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 d(17)
FORM OF
SUB-ADVISORY AGREEMENT
between
FMR CO., INC. and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this day of , 200_, by and between FMR Co.,
Inc., a Massachusetts corporation with principal offices at 82
Devonshire Street, Boston, Massachusetts (hereinafter called the
``Sub-Adviser") and Fidelity Management & Research Company, a
Massachusetts corporation with principal offices at 82 Devonshire
Street, Boston, Massachusetts (hereinafter called the ``Adviser").
WHEREAS the Adviser has entered into a Management Contract with
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
(hereinafter called the ``Portfolio"), pursuant to which the Adviser
is to act as investment manager and adviser to the Portfolio, and
WHEREAS the Sub-Adviser was formed for the purpose of providing
investment management of equity and high income funds and advising
generally with respect to equity and high income instruments.
NOW, THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the Adviser and the Sub-Adviser agree
as follows:
1. (a) The Sub-Adviser shall, subject to the supervision of the
Adviser, direct the investments of all or such portion of the
Portfolio's assets as the Adviser shall designate 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 or Sub-Adviser. The Sub-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 personnel of the
Sub-Adviser performing services for the Portfolio relating to
research, statistical and investment activities. The Sub-Adviser is
authorized, in its discretion and without prior consultation with the
Portfolio or the Adviser, 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) The Sub-Adviser shall also furnish such reports, evaluations,
information or analyses to the Fund and the Adviser as the Fund's
Board of Trustees or the Adviser may request from time to time or as
the Sub-Adviser may deem to be desirable. The Sub-Adviser shall make
recommendations to the Fund's Board of Trustees with respect to
Portfolio policies, and shall carry out such policies as are adopted
by the Trustees. The Sub-Adviser shall, subject to review by the
Board of Trustees, furnish such other services as the Sub-Adviser
shall from time to time determine to be necessary or useful to perform
its obligations under this Agreement and which are not otherwise
furnished by the Adviser.
(c) The Sub-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 Sub-Adviser, which may include brokers or
dealers affiliated with the Adviser or Sub-Adviser. The Sub-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 l934) to the Portfolio and/or
the other accounts over which the Sub-Adviser, Adviser or their
affiliates exercise investment discretion. The Sub-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 Sub-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 Sub-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.
2. As compensation for the services to be furnished by the
Sub-Adviser hereunder, the Adviser agrees to pay the Sub-Adviser a
monthly fee equal to 50% of the management fee (including performance
adjustments, if any) that the Portfolio is obligated to pay the
Adviser under the Portfolio's Management Contract with the Adviser in
respect of that portion of the Portfolio's assets managed by the
Sub-Adviser during such month. Such fee shall not be reduced to
reflect expense reimbursements or fee waivers by the Adviser, if any,
in effect from time to time.
3. It is understood that Trustees, officers, and shareholders of the
Fund are or may be or become interested in the Adviser or the
Sub-Adviser as directors, officers or otherwise and that directors,
officers and stockholders of the Adviser or the Sub-Adviser are or may
be or become similarly interested in the Fund, and that the Adviser or
the Sub-Adviser may be or become interested in the Fund as a
shareholder or otherwise.
4. It is understood that the Portfolio will pay all its expenses
other than those expressly stated to be payable by the Sub-Adviser
hereunder or by the Adviser 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
Fund's Trustees other than those who are ``interested persons" of the
Fund, the Sub-Adviser 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 Sub-Adviser to the Adviser are not to be
deemed to be exclusive, the Sub-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
Agreement, interfere, in a material manner, with the Sub-Adviser's
ability to meet all of its obligations with respect to rendering
investment advice hereunder. The Sub-Adviser shall for all purposes
be an independent contractor and not an agent or employee of the
Adviser or the Fund.
6. In the absence of willful misfeasance, bad faith, gross negligence
or reckless disregard of obligations or duties hereunder on the part
of the Sub-Adviser, the Sub-Adviser 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.
7. (a) Subject to prior termination as provided in sub-paragraph (d)
of this paragraph 7, this Agreement shall continue in force until
_____, and indefinitely thereafter, but only so long as the
continuance after such period shall be specifically approved at least
annually by vote of the Fund'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 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 interpretive releases of, the Commission.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of
this paragraph 7, the terms of any continuance or modification of the
Agreement must have been approved by the vote of a majority of those
Trustees of the Fund who are not parties to such 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 Adviser, the Sub-Adviser 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 by vote of a majority of its
outstanding voting securities. This Agreement shall terminate
automatically upon the termination of the Management Contract between
the Fund, on behalf of the Portfolio, and the Adviser. This Agreement
shall terminate automatically in the event of its assignment.
8. The Sub-Adviser is hereby expressly put on notice of the
limitation of shareholder liability as set forth in the Declaration of
Trust or other organizational document of the Fund and agrees that any
obligations of the Fund or the Portfolio arising in connection with
this Agreement shall be limited in all cases to the Portfolio and its
assets, and the Sub-Adviser shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the Portfolio.
Nor shall the Sub-Adviser seek satisfaction of any such obligation
from the Trustees or any individual Trustee.
9. 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 ``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 Investment Company Act of 1940 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 d(18)
SUBADVISORY AGREEMENT
This Agreement is entered into as of the 1st day of October, 1999,
among Fidelity Commonwealth Trust, a Massachusetts business trust (the
"Trust"), on behalf of Spartan Market Index Fund, a series portfolio
of the Trust (the "Portfolio"), Fidelity Management & Research
Company, a Massachusetts corporation ("Manager"), and Bankers Trust
Company, a New York banking corporation ("Subadviser").
WHEREAS, the Trust, on behalf of the Portfolio, has entered into a
Management Contract, dated December 1, 1997, with Manager (the
"Management Contract"), pursuant to which Manager has agreed to
provide certain management and administrative services to the
Portfolio; and
WHEREAS, Manager desires to appoint Subadviser as investment
subadviser to provide the investment advisory and administrative
services to the Portfolio specified herein, and Subadviser is willing
to serve the Portfolio in such capacity; and
WHEREAS, the trustees of the Trust (the "Trustees"), including a
majority of the Trustees who are not "interested persons" (as such
term is defined below) of any party to this Agreement, and the
shareholder(s) of the Portfolio, have each consented to such an
arrangement;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree as follows:
I. APPOINTMENT OF SUBADVISER; COMPENSATION
1.1 Appointment as Subadviser. Subject to and in accordance with
the provisions hereof, Manager hereby appoints Subadviser as
investment subadviser to perform the various investment advisory and
other services to the Portfolio set forth herein and, subject to the
restrictions set forth herein, hereby delegates to Subadviser the
authority vested in Manager pursuant to the Management Contract to the
extent necessary to enable Subadviser to perform its obligations under
this Agreement.
1.2 Scope of Investment Authority. (a) The Subadviser is hereby
authorized, on a discretionary basis, to manage the investments and
determine the composition of the assets of the Portfolio, subject at
all times to (i) the supervision and control of the Trustees, (ii) the
requirements of the Investment Company Act of 1940, as amended (the
"Investment Company Act") and the rules thereunder, (iii) the
investment objective, policies and limitations, as provided in the
Portfolio's Prospectus and other governing documents, and (iv) such
instructions, policies and limitations relating to the Portfolio as
the Trustees or Manager may from time to time adopt and communicate in
writing to Subadviser. Notwithstanding anything herein to the
contrary, Subadviser is not authorized to take any action, including
the purchase and sale of portfolio securities, in contravention of any
restriction, limitation, objective, policy or instruction described in
the previous sentence.
(b) It is understood and agreed that, for so long as this Agreement
shall remain in effect, Subadviser shall retain discretionary
investment authority over the manner in which the Portfolio's assets
are invested, and Manager shall not have the right to overrule any
investment decision with respect to a particular security made by
Subadviser, provided that the Trustees and Manager shall at all times
have the right to monitor the Portfolio's investment activities and
performance, require Subadviser to make reports and give explanations
as to the manner in which the Portfolio's assets are being invested,
and, should either Manager or the Trustees become dissatisfied with
Subadviser's performance in any way, terminate this Agreement in
accordance with the provisions of Section 8.2 hereof.
1.3 Appointment as Proxy Voting Agent. Subject to and in accordance
with the provisions hereof, the Trustees hereby appoint Subadviser as
the Portfolio's proxy voting agent, and hereby delegate to Subadviser
discretionary authority to vote all proxies solicited by or with
respect to issuers of securities in which the assets of the Portfolio
may be invested from time to time. Upon written notice to Subadviser,
the Trustees may at any time withdraw the authority granted to
Subadviser pursuant to this Section 1.3 to perform any or all of the
proxy voting services contemplated hereby.
1.4 Governing Documents. Manager will provide Subadviser with
copies of (i) the Trust's Declaration of Trust and By-laws, as
currently in effect, (ii) the Portfolio's currently effective
prospectus and statement of additional information, as set forth in
the Trust's registration statement under the Investment Company Act
and the Securities Act of 1933, as amended, (iii) any instructions,
investment policies or other restrictions adopted by the Trustees or
Manager supplemental thereto, and (iv) the Management Contract.
Manager will provide Subadviser with such further documentation and
information concerning the investment objectives, policies and
restrictions applicable to the Portfolio as Subadviser may from time
to time reasonably request.
1.5 Subadviser's Relationship. Notwithstanding anything herein to
the contrary, Subadviser shall be an independent contractor and will
have no authority to act for or represent the Trust, the Portfolio or
Manager in any way or otherwise be deemed an agent of any of them,
except to the extent expressly authorized by this Agreement or in
writing by the Trust or Manager.
1.6 Compensation. Subadviser shall be compensated for the services
it performs on behalf of the Portfolio in accordance with the terms
set forth in Appendix A to this Agreement.
II. SERVICES TO BE PERFORMED BY SUBADVISER
2.1 Investment Advisory Services. (a) In fulfilling its
obligations to manage the assets of the Portfolio, Subadviser will:
(i) formulate and implement a continuous investment program for the
Portfolio;
(ii) take whatever steps are necessary to implement these investment
programs by the purchase and sale of securities and other investments,
including the selection of brokers or dealers, the placing of orders
for such purchases and sales in accordance with the provisions of
paragraph (b) below and assuring that such purchases and sales are
properly settled and cleared;
(iii) provide such reports with respect to the implementation of the
Portfolio's investment program as the Trustees or Manager shall
reasonably request; and
(iv) provide advice and assistance to Manager as to the
determination of the fair value of certain securities where market
quotations are not readily available for purposes of calculating net
asset value of the Portfolio in accordance with valuation procedures
and methods established by the Trustees.
(b) The Subadviser shall place all orders for the purchase and sale
of portfolio securities for the Portfolio's account with brokers and
dealers selected by Subadviser. Such brokers and dealers may include
brokers or dealers that are "affiliated persons" (as such term is
defined in the Investment Company Act) of the Trust, the Portfolio,
Manager or Subadviser, provided that Subadviser shall only place
orders on behalf of the Portfolio with such affiliated persons in
accordance with procedures adopted by the Trustees pursuant to Rule
17e-1 under the Investment Company Act. The Subadviser 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 other
accounts over which Subadviser or its affiliates exercise investment
discretion. The Subadviser is authorized to pay a broker or dealer
who provided 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 Subadviser 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
Subadviser and its affiliates have in respect to accounts over which
they exercise investment discretion. The Trustees shall periodically
review the commissions paid by the Portfolio to determine if the
commissions paid over representative periods were reasonable in
relation to the benefits to the Portfolio.
2.2. Administrative and Other Services. (a) Subadviser will, at
its expense, furnish (i) all necessary investment and management
facilities, including salaries of personnel required for it to execute
its duties faithfully, and (ii) administrative facilities, including
bookkeeping, clerical personnel and equipment necessary for the
efficient conduct of the investment affairs of the Portfolio
(excluding determination of net asset values and shareholder
accounting services).
(b) Subadviser will maintain all accounts, books and records with
respect to the Portfolio as are required of an investment adviser of a
registered investment company pursuant to the Investment Company Act
and the rules thereunder. Subadviser agrees that such records are the
property of the Trust, and will be surrendered to the Trust promptly
upon request. The Manager shall be granted reasonable access to the
records and documents in Subadviser's possession relating to the
Portfolios.
(c) Subadviser shall provide such information as is necessary to
enable Manager to prepare and update the Trust's registration
statement (and any supplement thereto) and the Portfolio's financial
statements. Subadviser understands that the Trust and Manager will
rely on such information in the preparation of the Trust's
registration statement and the Portfolio's financial statements, and
hereby covenants that any such information approved by Subadviser
expressly for use in such registration and/or financial statements
shall be true and complete in all material respects.
(d) Subadviser will vote the Portfolio's investment securities in
the manner in which Subadviser believes to be in the best interests of
the Portfolio, and shall review its proxy voting activities on a
periodic basis with the Trustees.
(e) Subadviser will provide custodian services to the Portfolio in
accordance with the provisions of a separate Custodian Agreement,
dated as of the date hereof, between the Trust, on behalf of the
Portfolio, and Subadviser.
III. COMPLIANCE; CONFIDENTIALITY
3.1 Compliance. (a) Subadviser will comply with (i) all applicable
state and federal laws and regulations governing the performance of
the Subadviser's duties hereunder, (ii) the investment objective,
policies and limitations, as provided in the Portfolio's Prospectus
and other governing documents, and (iii) such instructions, policies
and limitations relating to the Portfolio as the Trustees or Manager
may from time to time adopt and communicate in writing to subadviser.
(b) Subadviser will adopt a written code of ethics complying with
the requirements of Rule 17j-1 under the Investment Company Act and
will provide the Trust with a copy of such code of ethics, evidence of
its adoption and copies of any supplemental policies and procedures
implemented to ensure compliance therewith.
3.2 Confidentiality. The parties to this Agreement agree that each
shall treat as confidential all information provided by a party to the
others regarding such party's business and operations, including
without limitation the investment activities or holdings of the
Portfolio. All confidential information provided by a party hereto
shall be used by any other parties hereto solely for the purposes of
rendering services pursuant to this Agreement and, except as may be
required in carrying out the terms of this Agreement, shall not be
disclosed to any third party without the prior consent of such
providing party. The foregoing shall not be applicable to any
information that is publicly available when provided or which
thereafter becomes publicly available other than in contravention of
this Section 3.2 or which is required to be disclosed by any
regulatory authority in the lawful and appropriate exercise of its
jurisdiction over a party, any auditor of the parties hereto, by
judicial or administrative process or otherwise by applicable law or
regulation.
IV. LIABILITY OF SUBADVISER
4.1 Liability; Standard of Care. Notwithstanding anything herein to
the contrary, neither Subadviser, nor any of its directors, officers
or employees, shall be liable to Manager or the Trust for any loss
resulting from Subadviser's acts or omissions as Subadviser to the
Portfolio, except to the extent any such losses result from bad faith,
willful misfeasance, reckless disregard or gross negligence on the
part of the Subadviser or any of its directors, officers or employees
in the performance of the Subadviser's duties and obligations under
this Agreement.
4.2 Indemnification. (a) Subadviser agrees to indemnify and hold
the Trust and Manager harmless from any and all direct or indirect
liabilities, losses or damages (including reasonable attorneys fees)
suffered by the Trust or Manager resulting from (i) Subadviser's
breach of its duties hereunder, or (ii) bad faith, willful
misfeasance, reckless disregard or gross negligence on the part of the
Subadviser or any of its directors, officers or employees in the
performance of the Subadviser's duties and obligations under this
Agreement, except to the extent such loss results from the Trust's or
Manager's own willful misfeasance, bad faith, reckless disregard or
negligence in the performance of their respective duties and
obligations under the Management Contract or this Agreement.
(b) Manager hereby agrees to indemnify and hold Subadviser harmless
from any and all direct or indirect liabilities, losses or damages
(including reasonable attorney's fees) suffered by Subadviser
resulting from (i) Manager's breach of its duties under Management
Contract, or (ii) bad faith, willful misfeasance, reckless disregard
or gross negligence on the part of Manager or any of its directors,
officers or employees in the performance of Manager's duties and
obligations under this Agreement, except to the extent such loss
results from Subadviser's own willful misfeasance, bad faith, reckless
disregard or negligence in the performance of Subadviser's duties and
obligations under this Agreement.
V. SUPPLEMENTAL ARRANGEMENTS; EXPENSES; INSURANCE
5.1 Supplemental Arrangements. Subject to the prior written consent
of the Trustees and Manager, Subadviser may enter into arrangements
with other persons affiliated with Subadviser to better fulfill its
obligations under this Agreement for the provision of certain
personnel and facilities to Subadviser, provided that such
arrangements do not rise to the level of an advisory contract subject
to the requirements of Section 15 of the Investment Company Act.
5.2 Expenses. It is understood that the Portfolio will pay all of
its expenses other than those expressly stated to be payable by
Subadviser hereunder or by Manager under the Management Agreement.
Subadviser expressly agrees to pay the cost of all custody services
required by the Portfolio. Expenses paid by the Portfolios will
include, but not be limited to, (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 Trustees other than those who are "interested persons" of the
Trust, Manager or Subadviser; (iv) legal and audit expenses; (v)
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 therefor; (ix) a pro rata
share based on the relative net assets of the Portfolio and other
registered investment companies having Advisory and Service or
Management Contracts with the Manager, of 50% of insurance premiums
for fidelity bond and other coverage; (x) investment management fees;
(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 any legal obligation that the Portfolio may
have to indemnify the Trustees, officers and/or employees or agents
with respect thereto. Subadviser shall not cause the Trust or the
Portfolios to incur any expenses, other than those reasonably
necessary for Subadviser to fulfill its obligations under this
Agreement, unless Subadviser has first notified Manager of its
intention to do so.
5.3 Insurance. Subadviser shall maintain for the duration hereof,
with an insurer acceptable to Manager, a blanket bond and professional
liability (errors and omissions) insurance in amounts reasonably
acceptable to Manager. Subadviser agrees that such insurance shall be
considered primary and Subadviser shall assure that such policies pay
claims prior to similar policies that may be maintained by Manager.
In the event Subadviser fails to have in force such insurance, that
failure will not exclude Subadviser's responsibility to pay up to the
limit Subadviser would have had to pay had said insurance been in
force.
VI. CONFLICTS OF INTEREST
6.1 Conflicts of Interest. It is understood that the Trustees,
officers, agents and shareholders of the Trust are or may be
interested in Subadviser as directors, officers, stockholders or
otherwise; that directors, officers, agents and stockholders of
Subadviser are or may be interested in the Trust as trustees,
officers, shareholders or otherwise; that Subadviser may be interested
in the Trust; and that the existence of any such dual interest shall
not affect the validity of this Agreement or of any transactions
hereunder except as otherwise provided in the Trust's Declaration of
Trust and the Articles of Incorporation of Subadviser, respectively,
or by specific provisions of applicable law.
VII. REGULATION
7.1 Regulation. Subadviser shall submit to all regulatory and
administrative bodies having jurisdiction over the services provided
pursuant to this Agreement any information, reports or other material
which any such body by reason of this Agreement may reasonably request
or require pursuant to applicable laws and regulations.
VIII. DURATION AND TERMINATION OF AGREEMENT
8.1 Effective Date; Duration; Continuance. (a) This Agreement
shall become effective on October 1, 1999.
(b) Subject to prior termination pursuant to Section 8.2 below, this
Agreement shall continue in force until July 31, 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 or by a vote of a majority of the outstanding voting
securities of the Portfolio, provided that in either event such
continuance shall also be approved by the vote of a majority of the
Trustees who are not "interested persons" (as such term is defined in
the Investment Company Act) of any party to this Agreement cast in
person at a meeting called for the purpose of voting on such approval.
(c) The required shareholder approval of this Agreement or any
continuance of this Agreement shall be effective with respect to the
Portfolio if a majority of the outstanding voting securities of the
series (as defined in Rule 18f-2(h) under the Investment Company Act)
of shares of the Portfolio votes to approve this Agreement or its
continuance.
8.2 Termination and Assignment. (a) This Agreement may be
terminated at any time, upon sixty days' written notice, without the
payment of any penalty, (i) by the Trustees, (ii) by the vote of a
majority of the outstanding voting securities of the Portfolio; (iii)
by Manager, or (iv) by Subadviser.
(b) This Agreement will terminate automatically, without the payment
of any penalty, (i) in the event of its assignment (as defined in the
Investment Company Act) or (ii) in the event the Management Contract
is terminated for any reason.
8.3 Definitions. 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 Investment Company Act as now in effect or
as hereafter amended, and subject to such orders or no-action letters
as may be granted by the Securities and Exchange Commission
("Commission").
IX. REPRESENTATIONS, WARRANTIES AND COVENANTS
9.1 Representations of the Portfolio. The Trust, on behalf of the
Portfolio, represents and warrants that:
(i) the Trust is a business trust established pursuant to the laws
of the Commonwealth of Massachusetts;
(ii) the Trust is duly registered as an investment company under the
Investment Company Act and the Portfolio is a duly constituted series
portfolio thereof;
(iii) the execution, delivery and performance of this Agreement are
within the Trust's powers, have been and remain duly authorized by all
necessary action (including without limitation all necessary approvals
and other actions required under the Investment Company Act) and will
not violate or constitute a default under any applicable law or
regulation or of any decree, order, judgment, agreement or instrument
binding on the Trust or the Portfolio;
(iv) no consent (including, but not limited to, exchange control
consents) of any applicable governmental authority or body is
necessary, except for such consents as have been obtained and are in
full force and effect, and all conditions of which have been duly
complied with; and
(v) this Agreement constitutes a legal, valid and binding obligation
enforceable against the Trust and the Portfolio in accordance with its
terms.
9.2 Representations of the Manager. The Manager represents,
warrants and agrees that:
(i) Manager is a corporation established pursuant to the laws of the
Commonwealth of Massachusetts;
(ii) Manager is duly registered as an "investment adviser" under the
Investment Advisers Act of 1940 ("Advisers Act");
(iii) Manager has been duly appointed by the Trustees and
Shareholders of the Portfolio to provide investment services to the
Portfolio as contemplated by the Management Contract.
(iv) the execution, delivery and performance of this Agreement are
within Manager's powers, have been and remain duly authorized by all
necessary corporate action and will not violate or constitute a
default under any applicable law or regulation or of any decree,
order, judgment, agreement or instrument binding on Manager;
(v) no consent (including, but not limited to, exchange control
consents) of any applicable governmental authority or body is
necessary, except for such consents as have been obtained and are in
full force and effect, and all conditions of which have been duly
complied with; and
(vi) this Agreement constitutes a legal, valid and binding obligation
enforceable against Manager.
9.3 Representations of Subadviser. Subadviser represents,
warrants and agrees that:
(i) Subadviser is a New York banking corporation established
pursuant to the laws of the State of New York;
(ii) Subadviser is duly registered as an "investment adviser" under
the Advisers Act; or is a "bank" as defined in Section 202 (a) (2) of
the Advisers Act or an "insurance company" as defined in Section 202
(a) (2) of the Advisers Act.
(iii) the execution, delivery and performance of this Agreement are
within Subadviser's powers, have been and remain duly authorized by
all necessary corporate action and will not violate or constitute a
default under any applicable law or regulation or of any decree,
order, judgment, agreement or instrument binding on Subadviser;
(iv) no consent (including, but not limited to, exchange control
consents) of any applicable governmental authority or body is
necessary, except for such consents as have been obtained and are in
full force and effect, and all conditions of which have been duly
complied with; and
(v) this Agreement constitutes a legal, valid and binding obligation
enforceable against Subadviser.
9.4 Covenants of the Subadviser. (a) Subadviser will promptly
notify the Trust and Manager in writing of the occurrence of any event
which could have a material impact on the performance of its
obligations pursuant to this Agreement, including without limitation:
(i) the occurrence of any event which could disqualify Subadviser
from serving as an investment adviser of a registered investment
company pursuant to Section 9 (a) of the Investment Company Act or
otherwise;
(ii) any material change in the Subadviser's overall business
activities that may have a material adverse affect on the Subadviser's
ability to perform under its obligations under this Agreement;
(iii) any event that would constitute a change in control of
Subadviser;
(iv) any change in the portfolio manager of the Portfolio; and
(v) the existence of any pending or threatened audit, investigation,
complaint, examination or other inquiry (other than routine regulatory
examinations or inspections) relating to the Portfolio conducted by
any state or federal governmental regulatory authority.
(b) Subadviser agrees that it will promptly supply Manager with
copies of any material changes to any of the documents provided by
Subadviser pursuant to Section 3.1.
X. MISCELLANEOUS PROVISIONS
10.1 Use of Subadviser's Name. Neither the Trust nor Manager will
use the name of Subadviser, or any affiliate of Subadviser, in any
prospectus, advertisement sales literature or other communication to
the public except in accordance with such policies and procedures as
shall be mutually agreed to in writing by the Subadviser and the
Manager.
10.2 Use of Trust or Manager's Name. Subadviser will not use the
name of Manager, the Trust or the Portfolio in any prospectus,
advertisement, sales literature or other communication to the public
except in accordance with such policies and procedures as shall be
mutually agreed to in writing by the Subadviser and the Manager.
10.3 Amendments. This Agreement may be modified by mutual consent
of the Manager, the Subadviser and the Portfolio subject to the
provisions of Section 15 of the Investment Company Act, as modified by
or interpreted by any applicable order or orders of the Commission or
any rules or regulations adopted by, or interpretive releases of, the
Commission.
10.4 Entire Agreement. This Agreement contains the entire
understanding and agreement of the parties with respect to the subject
hereof.
10.5 Captions. The headings in the sections of this Agreement are
inserted for convenience of reference only and shall not constitute a
part of the Agreement.
10.6 Notices. All notices required to be given pursuant to this
Agreement shall be delivered or mailed to the last known business
address of the Trust, Manager or Subadviser, as the case may be, in
person or by registered mail or a private mail or delivery service
providing the sender with notice of receipt. Notice shall be deemed
given on the date delivered or mailed in accordance with this Section
10.6.
10.7 Severability. Should any portion of this Agreement, for any
reason, be held to be void at law or in equity, the Agreement shall be
construed, insofar as is possible, as if such portion had never been
contained herein.
10.8 Governing Law. The provisions of this Agreement shall be
construed and interpreted in accordance with the laws of the
Commonwealth of Massachusetts (without giving effect to the choice of
law provisions thereof), or any of the applicable provisions of the
Investment Company Act. To the extent that the laws of the
Commonwealth of Massachusetts, or any of the provisions in this
Agreement, conflict with applicable provisions of the Investment
Company Act, the latter shall control.
10.9 Limitation of Liability. A copy of the Declaration of Trust
establishing the Trust, dated November 8, 1974, together with all
amendments, is on file in the office of the Secretary of the
Commonwealth of Massachusetts, and notice is hereby given that this
Agreement is not executed on behalf of any of the Trustees as
individuals and no Trustee, shareholder, officer, employee or agent of
the Trust shall be held to any personal liability, nor shall resort be
had to their private property, for the satisfaction of any obligation
or claim, in connection with the affairs of the Trust or the
Portfolio, but only the assets belonging to the Portfolio shall be
liable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed under seal by their duly authorized officers as of the
date first mentioned above.
Fidelity Commonwealth Trust
on behalf of Spartan Market Index Fund
By: /s/Robert C. Pozen
Name: Robert C. Pozen
Title: Senior Vice President
Fidelity Management & Research Company
By: /s/Robert C. Pozen
Name: Robert C. Pozen
Title: President
Bankers Trust Company
By: /s/Josh Weinrich
Name: Josh Weinrich
Title: Managing Director
APPENDIX A
Pursuant to Section 1.6 of the Subadvisory Agreement among Fidelity
Commonwealth Trust (the "Trust"), on behalf of Spartan Market Index
Fund (the "Portfolio"), Fidelity Management & Research Company
("Manager") and Bankers Trust Company ("Subadviser"), Subadviser shall
be compensated for the services it performs on behalf of the Portfolio
as follows:
1. Fees Payable by Manager. Manager will pay Subadviser a monthly
fee computed at an annual rate of 0.006% (0.6 basis points) of the
average daily net assets of the Portfolio (computed in the manner set
forth in the Trust's Declaration of Trust) throughout the month.
Subadviser's fee shall be computed monthly, and within twelve
business days of the end of each calendar month, Manager shall
transmit to Subadviser the fee for the previous month. Payment shall
be made in federal funds wired to a bank account designated by
Subadviser. If this Agreement becomes effective or terminates before
the end of any month, the fee (if any) for the period from the
effective date to the end of such month or from the beginning of such
month to the date of termination, as the case may be, shall be
prorated according to the proportion which such period bears to the
full month in which such effectiveness or termination occurs.
Subadviser agrees to look exclusively to Manager, and not to any
assets of the Trust or the Portfolio, for the payment of Subadviser's
fees arising under this Paragraph 1.
Exhibit d(19)
FORM OF
SUB-ADVISORY AGREEMENT
between
FMR CO., INC. and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this ___ day of _______, 200_, by and between FMR
Co., Inc., a Massachusetts corporation with principal offices at 82
Devonshire Street, Boston, Massachusetts (hereinafter called the
``Sub-Adviser") and Fidelity Management & Research Company, a
Massachusetts corporation with principal offices at 82 Devonshire
Street, Boston, Massachusetts (hereinafter called the ``Adviser").
WHEREAS the Adviser has entered into a Management Contract with
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 Spartan 500 Index Fund (hereinafter
called the ``Portfolio"), pursuant to which the Adviser is to act as
investment manager and adviser to the Portfolio, and
WHEREAS the Sub-Adviser was formed for the purpose of providing
investment management of equity and high income funds and advising
generally with respect to equity and high income instruments.
NOW, THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the Adviser and the Sub-Adviser agree
as follows:
1. (a) The Sub-Adviser shall, subject to the supervision of the
Adviser, direct the investments of all or such portion of the
Portfolio's assets as the Adviser shall designate 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 l940 and rules thereunder,
as amended from time to time (the ``l940 Act"), and such other
limitations as the Portfolio may impose by notice in writing to the
Adviser or Sub-Adviser. The Sub-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 personnel of the
Sub-Adviser performing services for the Portfolio relating to
research, statistical and investment activities. The Sub-Adviser is
authorized, in its discretion and without prior consultation with the
Portfolio or the Adviser, 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) The Sub-Adviser shall also furnish such reports, evaluations,
information or analyses to the Fund and the Adviser as the Fund's
Board of Trustees or the Adviser may request from time to time or as
the Sub-Adviser may deem to be desirable. The Sub-Adviser shall make
recommendations to the Fund's Board of Trustees with respect to
Portfolio policies, and shall carry out such policies as are adopted
by the Trustees. The Sub-Adviser shall, subject to review by the
Board of Trustees, furnish such other services as the Sub-Adviser
shall from time to time determine to be necessary or useful to perform
its obligations under this Agreement and which are not otherwise
furnished by the Adviser.
(c) The Sub-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 Sub-Adviser, which may include brokers or
dealers affiliated with the Adviser or Sub-Adviser. The Sub-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 l934) to the Portfolio and/or
the other accounts over which the Sub-Adviser, Adviser or their
affiliates exercise investment discretion. The Sub-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 Sub-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 Sub-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.
2. As compensation for the services to be furnished by the
Sub-Adviser hereunder, the Adviser agrees to pay the Sub-Adviser a
monthly fee equal to 50% of the management fee (including performance
adjustments, if any) that the Portfolio is obligated to pay the
Adviser under the Portfolio's Management Contract with the Adviser in
respect of that portion of the Portfolio's assets managed by the
Sub-Adviser during such month. Such fee shall not be reduced to
reflect expense reimbursements or fee waivers by the Adviser, if any,
in effect from time to time.
3. It is understood that Trustees, officers, and shareholders of the
Fund are or may be or become interested in the Adviser or the
Sub-Adviser as directors, officers or otherwise and that directors,
officers and stockholders of the Adviser or the Sub-Adviser are or may
be or become similarly interested in the Fund, and that the Adviser or
the Sub-Adviser may be or become interested in the Fund as a
shareholder or otherwise.
4. It is understood that the Portfolio will pay all its expenses
other than those expressly stated to be payable by the Sub-Adviser
hereunder or by the Adviser 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
Fund's Trustees other than those who are ``interested persons" of the
Fund, the Sub-Adviser 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 Sub-Adviser to the Adviser are not to be
deemed to be exclusive, the Sub-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
Agreement, interfere, in a material manner, with the Sub-Adviser's
ability to meet all of its obligations with respect to rendering
investment advice hereunder. The Sub-Adviser shall for all purposes
be an independent contractor and not an agent or employee of the
Adviser or the Fund.
6. In the absence of willful misfeasance, bad faith, gross negligence
or reckless disregard of obligations or duties hereunder on the part
of the Sub-Adviser, the Sub-Adviser 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.
7. (a) Subject to prior termination as provided in sub-paragraph (d)
of this paragraph 7, this Agreement shall continue in force until July
31, 200_, and indefinitely thereafter, but only so long as the
continuance after such period shall be specifically approved at least
annually by vote of the Fund'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 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 interpretive releases of, the Commission.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of
this paragraph 7, the terms of any continuance or modification of the
Agreement must have been approved by the vote of a majority of those
Trustees of the Fund who are not parties to such 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 Adviser, the Sub-Adviser 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 by vote of a majority of its
outstanding voting securities. This Agreement shall terminate
automatically upon the termination of the Management Contract between
the Fund, on behalf of the Portfolio, and the Adviser. This Agreement
shall terminate automatically in the event of its assignment.
8. The Sub-Adviser is hereby expressly put on notice of the
limitation of shareholder liability as set forth in the Declaration of
Trust or other organizational document of the Fund and agrees that any
obligations of the Fund or the Portfolio arising in connection with
this Agreement shall be limited in all cases to the Portfolio and its
assets, and the Sub-Adviser shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the Portfolio.
Nor shall the Sub-Adviser seek satisfaction of any such obligation
from the Trustees or any individual Trustee.
9. 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 ``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 Investment Company Act of 1940 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 d(20)
RESEARCH AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH (FAR EAST), INC.
AND
FIDELITY INVESTMENTS JAPAN LIMITED
AGREEMENT made this 1st day of January, 2000, by and between Fidelity
Management & Research (Far East), Inc., a Massachusetts corporation
(the "Sub-Advisor"); and Fidelity Investments Japan Limited, a
Japanese corporation (the "Japan Sub-Advisor").
WHEREAS, Fidelity Management & Research Company, a Massachusetts
corporation (the "Advisor"), has entered into a Management Contract
(the "Management Contract") with Fidelity Commonwealth Trust, a
Massachusetts business trust which may issue one or more series of
shares of beneficial interest (the "Trust"), on behalf of Fidelity
Intermediate Bond Fund (the "Portfolio"), pursuant to which the
Advisor acts as investment advisor to the Portfolio; and
WHEREAS, the Sub-Advisor has entered into a Sub-Advisory Agreement
(the "Sub-Advisory Agreement") with the Advisor, pursuant to which the
Sub-Advisor, directly or through certain of its subsidiaries or other
affiliated persons, may provide, at the Advisor's discretion,
investment advice or investment management and order execution
services to the Portfolio; and
WHEREAS, the Japan Sub-Advisor has personnel in Japan, and has been
formed for the purpose, among others, of researching and compiling
information and recommendations with respect to the economies of Japan
and other Asian countries and the securities of issuers located in
Japan and other Asian countries;
NOW THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the Sub-Advisor and the Japan
Sub-Advisor hereby agree as follows:
1. Delegation of Duties: Pursuant to paragraph 1(c) of the
Sub-Advisory Agreement, the Sub-Advisor hereby delegates to the Japan
Sub-Advisor, and the Japan Sub-Advisor hereby accepts, responsibility
for performing such non-discretionary investment advisory and research
services relating to the Japanese economy and the securities of
Japanese issuers (and such other Asian economies and issuers as the
Sub-Advisor may request from time to time) as may be requested of the
Sub-Advisor by the Advisor pursuant to the Sub-Advisory Agreement.
The Japan Sub-Advisor shall pay the salaries and fees of all personnel
of the Japan Sub-Advisor performing such services on behalf of the
Portfolio.
(a) INVESTMENT ADVICE: In connection with the performance of such
services, the Japan Sub-Advisor shall furnish to the Advisor and the
Sub-Advisor such factual information, research reports and investment
recommendations as Advisor or the Sub-Advisor may reasonably require.
Such information may include written and oral reports and analyses.
All such reports, recommendations, analyses and other information may
be used, transferred, assigned or sold by the Sub-Advisor, in its sole
discretion, without the consent of the Japan Sub-Advisor.
(b) SUBSIDIARIES AND AFFILIATES: The Japan 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
Japan 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, the Advisor and the
Sub-Advisor: The Japan Sub-Advisor shall furnish such reports,
evaluations, information or analyses to the Trust, the Advisor, and
the Sub-Advisor, as the Trust's Board of Trustees, the Advisor or the
Sub-Advisor may reasonably request from time to time, or as the Japan
Sub-Advisor may deem to be desirable.
3. Compensation: For the services provided under this Agreement, the
Sub-Advisor agrees to pay the Japan Sub-Advisor a monthly fee equal to
100% of the Japan Sub-Advisor's costs incurred in connection with
rendering the services provided hereunder. The Japan Sub-Advisor's
fee shall not be reduced to reflect expense reimbursements or fee
waivers by the Sub-Advisor or the Advisor, if any, in effect from time
to time.
4. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the Japan
Sub-Advisor hereunder, by the Sub-Advisor under the Sub-Advisory
Agreement or by the Advisor under the Management Contract.
5. Interested Persons: It is understood (i) that Trustees, officers,
and shareholders of the Trust are or may be or become interested in
the Advisor, the Sub-Advisor or the Japan Sub-Advisor as directors,
officers or otherwise, (ii) that directors, officers and stockholders
of the Advisor, the Sub-Advisor or the Japan Sub-Advisor are or may be
or become similarly interested in the Trust, and (iii) that the
Advisor, the Sub-Advisor or the Japan Sub-Advisor are or may be or
become interested in the Trust as a shareholder or otherwise.
6. Services to Other Companies or Accounts: The services of the
Japan Sub-Advisor to the Sub-Advisor are not to be deemed to be
exclusive, the Japan 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 Japan
Sub-Advisor's ability to meet all of its obligations hereunder. The
Japan Sub-Advisor shall for all purposes be an independent contractor
and not an agent or employee of the Sub-Advisor, the Advisor or the
Trust.
7. 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 Japan Sub-Advisor, the Japan Sub-Advisor
shall not be subject to liability to the Sub-Advisor, 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.
8. Liability. Notwithstanding anything in this Agreement to the
contrary, it is understood that the Sub-Advisor shall remain liable to
the Advisor and the Portfolio under the Sub-Advisory Agreement for the
acts and omissions of Japan Sub-Advisor taken in the course of the
performance of the Japan Sub-Advisor's duties hereunder to the same
extent as would be the case had the Sub-Advisor performed such acts or
omissions itself, provided, however, that to the extent the
Sub-Advisor suffers a loss to the Advisor or the Portfolio as a result
of or arising out of such acts or omissions of the Japan Sub-Advisor,
the Sub-Advisor shall be entitled to seek redress against the Japan
Sub-Advisor in accordance with the terms hereof.
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 June
30, 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, the Japan Sub-Advisor and 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, the Japan 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 Japan Sub-Advisor is hereby
expressly put on notice of the limitation of shareholder liability as
set forth in the Declaration of Trust 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 Japan
Sub-Advisor shall not seek satisfaction of any such obligation from
the shareholders or any shareholder of the Portfolio. Nor shall the
Japan 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, 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 person,"
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.
FIDELITY MANAGEMENT & RESEARCH (FAR EAST), INC.
BY: /s/Laura B. Cronin
Laura B. Cronin
Treasurer
FIDELITY INVESTMENTS JAPAN LIMITED
BY: /s/Billy Wilder
Billy Wilder
President
Exhibit d(21)
RESEARCH AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH (FAR EAST), INC.
AND
FIDELITY INVESTMENTS JAPAN LIMITED
AGREEMENT made this 1st day of January, 2000, by and between Fidelity
Management & Research (Far East), Inc., a Massachusetts corporation
(the "Sub-Advisor"); and Fidelity Investments Japan Limited, a
Japanese corporation (the "Japan Sub-Advisor").
WHEREAS, Fidelity Management & Research Company, a Massachusetts
corporation (the "Advisor"), has entered into a Management Contract
(the "Management Contract") with Fidelity Commonwealth Trust, a
Massachusetts business trust which may issue one or more series of
shares of beneficial interest (the "Trust"), on behalf of Fidelity
Large Cap Stock Fund (the "Portfolio"), pursuant to which the Advisor
acts as investment advisor to the Portfolio; and
WHEREAS, the Sub-Advisor has entered into a Sub-Advisory Agreement
(the "Sub-Advisory Agreement") with the Advisor, pursuant to which the
Sub-Advisor, directly or through certain of its subsidiaries or other
affiliated persons, may provide, at the Advisor's discretion,
investment advice or investment management and order execution
services to the Portfolio; and
WHEREAS, the Japan Sub-Advisor has personnel in Japan, and has been
formed for the purpose, among others, of researching and compiling
information and recommendations with respect to the economies of Japan
and other Asian countries and the securities of issuers located in
Japan and other Asian countries;
NOW THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the Sub-Advisor and the Japan
Sub-Advisor hereby agree as follows:
1. Delegation of Duties: Pursuant to paragraph 1(c) of the
Sub-Advisory Agreement, the Sub-Advisor hereby delegates to the Japan
Sub-Advisor, and the Japan Sub-Advisor hereby accepts, responsibility
for performing such non-discretionary investment advisory and research
services relating to the Japanese economy and the securities of
Japanese issuers (and such other Asian economies and issuers as the
Sub-Advisor may request from time to time) as may be requested of the
Sub-Advisor by the Advisor pursuant to the Sub-Advisory Agreement.
The Japan Sub-Advisor shall pay the salaries and fees of all personnel
of the Japan Sub-Advisor performing such services on behalf of the
Portfolio.
(a) INVESTMENT ADVICE: In connection with the performance of such
services, the Japan Sub-Advisor shall furnish to the Advisor and the
Sub-Advisor such factual information, research reports and investment
recommendations as Advisor or the Sub-Advisor may reasonably require.
Such information may include written and oral reports and analyses.
All such reports, recommendations, analyses and other information may
be used, transferred, assigned or sold by the Sub-Advisor, in its sole
discretion, without the consent of the Japan Sub-Advisor.
(b) SUBSIDIARIES AND AFFILIATES: The Japan 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
Japan 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, the Advisor and the
Sub-Advisor: The Japan Sub-Advisor shall furnish such reports,
evaluations, information or analyses to the Trust, the Advisor, and
the Sub-Advisor, as the Trust's Board of Trustees, the Advisor or the
Sub-Advisor may reasonably request from time to time, or as the Japan
Sub-Advisor may deem to be desirable.
3. Compensation: For the services provided under this Agreement, the
Sub-Advisor agrees to pay the Japan Sub-Advisor a monthly fee equal to
100% of the Japan Sub-Advisor's costs incurred in connection with
rendering the services provided hereunder. The Japan Sub-Advisor's
fee shall not be reduced to reflect expense reimbursements or fee
waivers by the Sub-Advisor or the Advisor, if any, in effect from time
to time.
4. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the Japan
Sub-Advisor hereunder, by the Sub-Advisor under the Sub-Advisory
Agreement or by the Advisor under the Management Contract.
5. Interested Persons: It is understood (i) that Trustees, officers,
and shareholders of the Trust are or may be or become interested in
the Advisor, the Sub-Advisor or the Japan Sub-Advisor as directors,
officers or otherwise, (ii) that directors, officers and stockholders
of the Advisor, the Sub-Advisor or the Japan Sub-Advisor are or may be
or become similarly interested in the Trust, and (iii) that the
Advisor, the Sub-Advisor or the Japan Sub-Advisor are or may be or
become interested in the Trust as a shareholder or otherwise.
6. Services to Other Companies or Accounts: The services of the
Japan Sub-Advisor to the Sub-Advisor are not to be deemed to be
exclusive, the Japan 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 Japan
Sub-Advisor's ability to meet all of its obligations hereunder. The
Japan Sub-Advisor shall for all purposes be an independent contractor
and not an agent or employee of the Sub-Advisor, the Advisor or the
Trust.
7. 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 Japan Sub-Advisor, the Japan Sub-Advisor
shall not be subject to liability to the Sub-Advisor, 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.
8. Liability. Notwithstanding anything in this Agreement to the
contrary, it is understood that the Sub-Advisor shall remain liable to
the Advisor and the Portfolio under the Sub-Advisory Agreement for the
acts and omissions of Japan Sub-Advisor taken in the course of the
performance of the Japan Sub-Advisor's duties hereunder to the same
extent as would be the case had the Sub-Advisor performed such acts or
omissions itself, provided, however, that to the extent the
Sub-Advisor suffers a loss to the Advisor or the Portfolio as a result
of or arising out of such acts or omissions of the Japan Sub-Advisor,
the Sub-Advisor shall be entitled to seek redress against the Japan
Sub-Advisor in accordance with the terms hereof.
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 July
31, 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, the Japan Sub-Advisor and 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, the Japan 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 Japan Sub-Advisor is hereby
expressly put on notice of the limitation of shareholder liability as
set forth in the Declaration of Trust 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 Japan
Sub-Advisor shall not seek satisfaction of any such obligation from
the shareholders or any shareholder of the Portfolio. Nor shall the
Japan 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, 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 person,"
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.
FIDELITY MANAGEMENT & RESEARCH (FAR EAST), INC.
BY: /s/Laura B. Cronin
Laura B. Cronin
Treasurer
FIDELITY INVESTMENTS JAPAN LIMITED
BY: /s/Billy Wilder
Billy Wilder
President
Exhibit d(22)
RESEARCH AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH (FAR EAST), INC.
AND
FIDELITY INVESTMENTS JAPAN LIMITED
AGREEMENT made this 1st day of January, 2000, by and between Fidelity
Management & Research (Far East), Inc., a Massachusetts corporation
(the "Sub-Advisor"); and Fidelity Investments Japan Limited, a
Japanese corporation (the "Japan Sub-Advisor").
WHEREAS, Fidelity Management & Research Company, a Massachusetts
corporation (the "Advisor"), has entered into a Management Contract
(the "Management Contract") with Fidelity Commonwealth Trust, a
Massachusetts business trust which may issue one or more series of
shares of beneficial interest (the "Trust"), on behalf of Mid-Cap
Stock Fund (the "Portfolio"), pursuant to which the Advisor acts as
investment advisor to the Portfolio; and
WHEREAS, the Sub-Advisor has entered into a Sub-Advisory Agreement
(the "Sub-Advisory Agreement") with the Advisor, pursuant to which the
Sub-Advisor, directly or through certain of its subsidiaries or other
affiliated persons, may provide, at the Advisor's discretion,
investment advice or investment management and order execution
services to the Portfolio; and
WHEREAS, the Japan Sub-Advisor has personnel in Japan, and has been
formed for the purpose, among others, of researching and compiling
information and recommendations with respect to the economies of Japan
and other Asian countries and the securities of issuers located in
Japan and other Asian countries;
NOW THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the Sub-Advisor and the Japan
Sub-Advisor hereby agree as follows:
1. Delegation of Duties: Pursuant to paragraph 1(c) of the
Sub-Advisory Agreement, the Sub-Advisor hereby delegates to the Japan
Sub-Advisor, and the Japan Sub-Advisor hereby accepts, responsibility
for performing such non-discretionary investment advisory and research
services relating to the Japanese economy and the securities of
Japanese issuers (and such other Asian economies and issuers as the
Sub-Advisor may request from time to time) as may be requested of the
Sub-Advisor by the Advisor pursuant to the Sub-Advisory Agreement.
The Japan Sub-Advisor shall pay the salaries and fees of all personnel
of the Japan Sub-Advisor performing such services on behalf of the
Portfolio.
(a) INVESTMENT ADVICE: In connection with the performance of such
services, the Japan Sub-Advisor shall furnish to the Advisor and the
Sub-Advisor such factual information, research reports and investment
recommendations as Advisor or the Sub-Advisor may reasonably require.
Such information may include written and oral reports and analyses.
All such reports, recommendations, analyses and other information may
be used, transferred, assigned or sold by the Sub-Advisor, in its sole
discretion, without the consent of the Japan Sub-Advisor.
(b) SUBSIDIARIES AND AFFILIATES: The Japan 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
Japan 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, the Advisor and the
Sub-Advisor: The Japan Sub-Advisor shall furnish such reports,
evaluations, information or analyses to the Trust, the Advisor, and
the Sub-Advisor, as the Trust's Board of Trustees, the Advisor or the
Sub-Advisor may reasonably request from time to time, or as the Japan
Sub-Advisor may deem to be desirable.
3. Compensation: For the services provided under this Agreement, the
Sub-Advisor agrees to pay the Japan Sub-Advisor a monthly fee equal to
100% of the Japan Sub-Advisor's costs incurred in connection with
rendering the services provided hereunder. The Japan Sub-Advisor's
fee shall not be reduced to reflect expense reimbursements or fee
waivers by the Sub-Advisor or the Advisor, if any, in effect from time
to time.
4. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the Japan
Sub-Advisor hereunder, by the Sub-Advisor under the Sub-Advisory
Agreement or by the Advisor under the Management Contract.
5. Interested Persons: It is understood (i) that Trustees, officers,
and shareholders of the Trust are or may be or become interested in
the Advisor, the Sub-Advisor or the Japan Sub-Advisor as directors,
officers or otherwise, (ii) that directors, officers and stockholders
of the Advisor, the Sub-Advisor or the Japan Sub-Advisor are or may be
or become similarly interested in the Trust, and (iii) that the
Advisor, the Sub-Advisor or the Japan Sub-Advisor are or may be or
become interested in the Trust as a shareholder or otherwise.
6. Services to Other Companies or Accounts: The services of the
Japan Sub-Advisor to the Sub-Advisor are not to be deemed to be
exclusive, the Japan 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 Japan
Sub-Advisor's ability to meet all of its obligations hereunder. The
Japan Sub-Advisor shall for all purposes be an independent contractor
and not an agent or employee of the Sub-Advisor, the Advisor or the
Trust.
7. 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 Japan Sub-Advisor, the Japan Sub-Advisor
shall not be subject to liability to the Sub-Advisor, 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.
8. Liability. Notwithstanding anything in this Agreement to the
contrary, it is understood that the Sub-Advisor shall remain liable to
the Advisor and the Portfolio under the Sub-Advisory Agreement for the
acts and omissions of Japan Sub-Advisor taken in the course of the
performance of the Japan Sub-Advisor's duties hereunder to the same
extent as would be the case had the Sub-Advisor performed such acts or
omissions itself, provided, however, that to the extent the
Sub-Advisor suffers a loss to the Advisor or the Portfolio as a result
of or arising out of such acts or omissions of the Japan Sub-Advisor,
the Sub-Advisor shall be entitled to seek redress against the Japan
Sub-Advisor in accordance with the terms hereof.
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 July
31, 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, the Japan Sub-Advisor and 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, the Japan 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 Japan Sub-Advisor is hereby
expressly put on notice of the limitation of shareholder liability as
set forth in the Declaration of Trust 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 Japan
Sub-Advisor shall not seek satisfaction of any such obligation from
the shareholders or any shareholder of the Portfolio. Nor shall the
Japan 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, 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 person,"
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.
FIDELITY MANAGEMENT & RESEARCH (FAR EAST), INC.
BY: /s/Laura B. Cronin
Laura B. Cronin
Treasurer
FIDELITY INVESTMENTS JAPAN LIMITED
BY: /s/Billy Wilder
Billy Wilder
President
Exhibit d(23)
RESEARCH AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH (FAR EAST), INC.
AND
FIDELITY INVESTMENTS JAPAN LIMITED
AGREEMENT made this 1st day of January, 2000, by and between Fidelity
Management & Research (Far East), Inc., a Massachusetts corporation
(the "Sub-Advisor"); and Fidelity Investments Japan Limited, a
Japanese corporation (the "Japan Sub-Advisor").
WHEREAS, Fidelity Management & Research Company, a Massachusetts
corporation (the "Advisor"), has entered into a Management Contract
(the "Management Contract") with Fidelity Commonwealth Trust, a
Massachusetts business trust which may issue one or more series of
shares of beneficial interest (the "Trust"), on behalf of Fidelity
Small Cap Stock Fund (the "Portfolio"), pursuant to which the Advisor
acts as investment advisor to the Portfolio; and
WHEREAS, the Sub-Advisor has entered into a Sub-Advisory Agreement
(the "Sub-Advisory Agreement") with the Advisor, pursuant to which the
Sub-Advisor, directly or through certain of its subsidiaries or other
affiliated persons, may provide, at the Advisor's discretion,
investment advice or investment management and order execution
services to the Portfolio; and
WHEREAS, the Japan Sub-Advisor has personnel in Japan, and has been
formed for the purpose, among others, of researching and compiling
information and recommendations with respect to the economies of Japan
and other Asian countries and the securities of issuers located in
Japan and other Asian countries;
NOW THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the Sub-Advisor and the Japan
Sub-Advisor hereby agree as follows:
1. Delegation of Duties: Pursuant to paragraph 1(c) of the
Sub-Advisory Agreement, the Sub-Advisor hereby delegates to the Japan
Sub-Advisor, and the Japan Sub-Advisor hereby accepts, responsibility
for performing such non-discretionary investment advisory and research
services relating to the Japanese economy and the securities of
Japanese issuers (and such other Asian economies and issuers as the
Sub-Advisor may request from time to time) as may be requested of the
Sub-Advisor by the Advisor pursuant to the Sub-Advisory Agreement.
The Japan Sub-Advisor shall pay the salaries and fees of all personnel
of the Japan Sub-Advisor performing such services on behalf of the
Portfolio.
(a) INVESTMENT ADVICE: In connection with the performance of such
services, the Japan Sub-Advisor shall furnish to the Advisor and the
Sub-Advisor such factual information, research reports and investment
recommendations as Advisor or the Sub-Advisor may reasonably require.
Such information may include written and oral reports and analyses.
All such reports, recommendations, analyses and other information may
be used, transferred, assigned or sold by the Sub-Advisor, in its sole
discretion, without the consent of the Japan Sub-Advisor.
(b) SUBSIDIARIES AND AFFILIATES: The Japan 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
Japan 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, the Advisor and the
Sub-Advisor: The Japan Sub-Advisor shall furnish such reports,
evaluations, information or analyses to the Trust, the Advisor, and
the Sub-Advisor, as the Trust's Board of Trustees, the Advisor or the
Sub-Advisor may reasonably request from time to time, or as the Japan
Sub-Advisor may deem to be desirable.
3. Compensation: For the services provided under this Agreement, the
Sub-Advisor agrees to pay the Japan Sub-Advisor a monthly fee equal to
100% of the Japan Sub-Advisor's costs incurred in connection with
rendering the services provided hereunder. The Japan Sub-Advisor's
fee shall not be reduced to reflect expense reimbursements or fee
waivers by the Sub-Advisor or the Advisor, if any, in effect from time
to time.
4. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the Japan
Sub-Advisor hereunder, by the Sub-Advisor under the Sub-Advisory
Agreement or by the Advisor under the Management Contract.
5. Interested Persons: It is understood (i) that Trustees, officers,
and shareholders of the Trust are or may be or become interested in
the Advisor, the Sub-Advisor or the Japan Sub-Advisor as directors,
officers or otherwise, (ii) that directors, officers and stockholders
of the Advisor, the Sub-Advisor or the Japan Sub-Advisor are or may be
or become similarly interested in the Trust, and (iii) that the
Advisor, the Sub-Advisor or the Japan Sub-Advisor are or may be or
become interested in the Trust as a shareholder or otherwise.
6. Services to Other Companies or Accounts: The services of the
Japan Sub-Advisor to the Sub-Advisor are not to be deemed to be
exclusive, the Japan 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 Japan
Sub-Advisor's ability to meet all of its obligations hereunder. The
Japan Sub-Advisor shall for all purposes be an independent contractor
and not an agent or employee of the Sub-Advisor, the Advisor or the
Trust.
7. 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 Japan Sub-Advisor, the Japan Sub-Advisor
shall not be subject to liability to the Sub-Advisor, 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.
8. Liability. Notwithstanding anything in this Agreement to the
contrary, it is understood that the Sub-Advisor shall remain liable to
the Advisor and the Portfolio under the Sub-Advisory Agreement for the
acts and omissions of Japan Sub-Advisor taken in the course of the
performance of the Japan Sub-Advisor's duties hereunder to the same
extent as would be the case had the Sub-Advisor performed such acts or
omissions itself, provided, however, that to the extent the
Sub-Advisor suffers a loss to the Advisor or the Portfolio as a result
of or arising out of such acts or omissions of the Japan Sub-Advisor,
the Sub-Advisor shall be entitled to seek redress against the Japan
Sub-Advisor in accordance with the terms hereof.
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 July
31, 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, the Japan Sub-Advisor and 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, the Japan 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 Japan Sub-Advisor is hereby
expressly put on notice of the limitation of shareholder liability as
set forth in the Declaration of Trust 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 Japan
Sub-Advisor shall not seek satisfaction of any such obligation from
the shareholders or any shareholder of the Portfolio. Nor shall the
Japan 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, 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 person,"
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.
FIDELITY MANAGEMENT & RESEARCH (FAR EAST), INC.
BY: /s/Laura B. Cronin
Laura B. Cronin
Treasurer
FIDELITY INVESTMENTS JAPAN LIMITED
BY: /s/Billy Wilder
Billy Wilder
President
Exhibit (g)(3)
Appendix "B"
To
Custodian Agreement
Between
Brown Brothers Harriman & Co. and Each of the Investment
Companies Listed on Appendix "A" thereto
Dated as of March 16, 2000
The following is a list of Additional Custodians, Special
Subcustodians and Foreign Subcustodians under the Custodian Agreement
dated as of September 1, 1994 (the "Custodian Agreement"):
A. Additional Custodians
CUSTODIAN PURPOSE
Bank of New York FICASH
FITERM
B. Special Subcustodians:
SUBCUSTODIAN PURPOSE
Bank of New York FICASH
C. Foreign Subcustodians:
<TABLE>
<CAPTION>
<S> <C> <C>
COUNTRY FOREIGN SUBCUSTODIAN DEPOSITORY
Argentina Citibank, N.A., Buenos Aires Caja de Valores, S.A.;
(Citibank, N.A., New York Central de Registracion y
Agt. 7/16/81
New York Agreement Amendment Liquidacion de Instrumentos
8/31/90)
de Endeudamiento Publico (CRYL)
BankBoston, N.A., Buenos Aires
(First Nat. Bank of Boston
Agreement 1/15/88
Omnibus Amendment 2/22/94)
Australia National Australia Bank Ltd., Austraclear Limited;
Melbourne
(National Australia Bank Agt. Reserve Bank Information and
5/1/85
Agreement Amendment 2/13/92 Transfer System (RITS)
Omnibus Amendment 11/22/93)
The Clearing House Electronic
Sub-register system
Austria Creditanstalt, AG, Vienna Oesterreichische Kontrollbank
(Creditanstalt Bankverein Aktiengesellschaft (OEKB)
Agreement 12/18/89
Omnibus Amendment 1/17/94)
Bahrain British Bank of the Middle None
East, Manama
Bangladesh Standard Chartered Bank, Dhaka None
(Standard Chartered Bank
Agreement 2/18/92)
Belgium Banque Bruxelles Lambert, Caisse Interprofessionnelle
Brussels de Depot
(Banque Bruxelles Lambert et Virements de Titres (CIK);
Agreement 11/15/90
Omnibus Amendment 3/1/94) Banque Nationale de Belgique
(BNB)
Bermuda Bank of N.T. Butterfield &
Son Ltd., Hamilton
Botswana Stanbic Bank Botswana,
Limited, Gaborone
for The Standard Bank of
South Africa, Limited (SBSA)
Brazil BankBoston, N.A., Sao Paulo Sao Paulo Stock Exchange
(First National Bank of (BOVESPA);
Boston Agreement 1/5/88
Omnibus Amendment 2/22/94) Rio de Janeiro Exchange (BVRJ);
Camara de Liquidacao e Custodia
S.A. (CLC)
Companhia Brasleira de
Liquidacao e Custodia
Bulgaria ING Bank N.V. (ING) Central Depository AD (and)
Bulgarian National Bank
Canada Canadian Imperial Bank of Canadian Depository for
Commerce, Toronto Securities,
(Canadian Imperial Bank of Ltd., (CDS)
Commerce
Agreement 9/9/88
Omnibus Amendment 12/1/93)
Royal Bank of Canada, Toronto Bank of Canada
Proposed Agreement 2/23/96
Chile Citibank, N.A., Santiago Deposito Central de Valores,
S.A.
(Citibank N.A., New York (DCV)
Agreement 7/16/81
New York Agreement Amendment
8/31/90)
China-Shanghai Standard Chartered Bank, Shanghai Securities Central
Shanghai Clearing
(Standard Chartered Bank & Registration Corporation
Agreement 2/18/92)
(SSCCRC)
China- Standard Chartered Bank, Shenzhen Securities
Shenzhen Shenzhen Registration
(Standard Chartered Bank Corp. Ltd., (SSRC)
Agreement 2/18/92)
Colombia Cititrust Colombia , S.A., Deposito Central de Valores
Sociedad Fiduciaria, Bogota (DCV)
(Citibank N.A., New York
Agreement 7/16/81
New York Agreement Amendment Deposito Centralizado de
8/31/90 Valores
Citibank N.A. Subsidiary (DECEVAL)
Amendment 10/19/95
Citibank N.A./Cititrust
Colombia Agreement 12/2/91)
Czech Republic Citibank a.s., Praha, an Stredisko Cennych Papiru (SCP)
indirect subsidiary of
Citibank, N.A.
Czech National Bank
Denmark Den Danske Bank, Copenhagen Vaerdipapircentralen - VP
Center
(Den Danske Bank Agreement
1/1/89
Omnibus Amendment 12/1/93)
Ecuador Citibank, N.A., Quito None
(Citibank, N.A. New York
Agreement 7/16/81
New York Agreement Amendment
8/31/90
Citibank, Quito Side Letter
7/3/95)
Egypt Citibank, N.A., Cairo Misr for Clearing, Settlement
(Citibank, N.A. New York and Depository
Agreement 7/16/81
New York Agreement Amendment
8/31/90)
Finland Merita Bank Ltd., Helsinki Finnish Central Securities
Depository Ltd.
France Banque Paribas, Paris SICOVAM;
Agreement 4/2/93) Banque de France
Germany Dresdner Bank AG, Frankfurt Deutsche Borse Clearing (DBC)
(Dresdner Bank Agreement
10/6/95)
Ghana Merchant Bank (Ghana) None
Limited, Accra
for The Standard Bank of
South Africa, Limited (SBSA)
Greece Citibank, N.A., Athens The Central Securities
Depository,
(Citibank N.A., New York Apothetirion Titlon A.E.
Agreement 7/16/81
New York Agreement Amendment
8/31/90)
The Bank of Greece
Hong Kong The Hongkong & Shanghai Banking Central Clearing and
Corp., Ltd., Hong Kong Settlement System (CCASS)
(Hongkong & Shanghai Banking
Corp. Agt. 4/19/91
Omnibus Supplement 12/29/93) The Central Money Markets Unit
Hungary Citibank Budapest, Rt. Central Depository and Clearing
(Citibank N.A., New York House (Budapest) Ltd.,
Agreement 7/16/81
New York Agreement Amendment (KELER Ltd.)
8/31/90
Citibank N.A. Subsidiary
Amendment 10/19/95
Citibank N.A./Citibank
Budapest Agmt. 1/24/92
(amended 6/23/92 and 9/29/92))
India Citibank, N.A., Mumbai National Securities Depository
Limited
(Citibank N.A., New York
Agreement 7/16/81
New York Agreement Amendment
8/31/90
Citibank, Mumbai Amendment
11/17/93)
Standard Chartered Bank, Mumbai
(Standard Chartered Bank
Agreement 2/18/92
SCB, Mumbai Annexure and Side
Letter 7/18/94)
Indonesia Citibank, N.A., Jakarta PT Kustodian Sentral Efek
Indonesia
(Citibank N.A., New York
Agreement 7/16/81
New York Agreement Amendment
8/31/90)
Ireland Allied Irish Banks, plc., Gilt Settlement Office (GSO)
Dublin
(Allied Irish Banks Agreement
1/10/89
Omnibus Amendment 4/8/94) CREST
Israel Bank Hapoalim, B.M. Tel-Aviv Stock Exchange
(Bank Hapoalim Agreement (TASE) Clearinghouse Ltd.
8/27/92)
Italy Banca Commerciale Italiana, Monte Titoli S.p.A.
Milan
(Banca Commerciale Italiana
Agreement 5/8/89
Agreement Amendment 10/8/93 Banca D'Italia
Omnibus Amendment 12/14/93)
Ivory Coast Societe Generale de Banques Depositaire Central Banque de
en Cote d'Ivoire, a
wholly owned subsidiary of Reglement (DCBR)
Societe Generale
Japan The Bank of Tokyo-Mitsubishi, Japan Securities Depository
Ltd., Center.,
Tokyo (JASDEC); Bank of Japan
Jordan Arab Bank, plc, Amman None
(Arab Bank Agreement 4/5/95
HSBC Bank Middle East
Kenya Stanbic Bank Kenya, Limited, None
Nairobi
for The Standard Bank of
South Africa, Limited (SBSA)
Lebanon British Bank of the Middle Midclear
East, Beirut
Luxembourg Kredietbank Luxembourg (KBL)
Malaysia Hongkong Bank Malaysia Berhad, Malaysian Central Depository
Sdn.
Kuala Lumpur Bhd (MCD)
(Hongkong & Shanghai Banking
Corp. Agt. 4/19/91
Omnibus Supplement 12/29/93
Malaysia Subsidiary Bank Negara Malaysia
Supplement 5/23/94)
Mauritius Hongkong & Shanghai Banking Central Depository &
Corp., Ltd., Settlement Co.,
Port Louis Ltd.
Mexico Citibank Mexico, S.A., Mexico Institucion para el Deposito de
City
(Citibank N.A., New York Valores- S.D. INDEVAL, S.A. de
Agreement 7/16/81
New York Agreement Amendment C.V.
8/31/90
Citibank, Mexico, S.A.
Amendment 2/7/95)
Banco de Mexico
Morocco Banque Marocaine du Commerce MAROCLEAR
Exterieur,
Casablanca
(BMCE Agreement 7/6/94)
Citibank Maghreb, Casablanca,
Casablanca
Namibia Standard Bank Namibia Ltd., None
Windhoek
Netherlands MeesPierson N.V., Nederlands Centraal Instituut
voor
Amsterdam, a wholly owned (NECIGEF)/KAS Associatie N.V.
subsidiary of
Societe Generale (KAS); De Nederlandsche Bank
ABN-AMRO Bank N.V. (DNB)New
New Zealand National Australia Bank Ltd., New Zealand Securities
Melbourne
(National Australia Bank Depository Limited (NZCDS)
Agreement 5/1/85
Agreement Amendment 2/13/92
Omnibus Amendment 11/22/93
New Zealand Addendum 3/7/89)
Norway Den norske Bank ASA, Oslo Verdipapirsentralen (VPS)
(Den norske Bank Agreement
11/16/94)
Oman British Bank of the Middle Muscat Securities Market
East, Muscat
Pakistan Standard Chartered Bank, The Central Depository
Karachi
(Standard Chartered Bank Company of Pakistan (CDC)
Agreement 2/18/92)
Peru Citibank, N.A., Lima Caja de Valores (CAVAL)
(Citibank N.A., New York
Agreement 7/16/81
New York Agreement Amendment
8/31/90)
Philippines Citibank, N.A., Manila The Philippines Central
Depository,
(Citibank N.A., New York Inc.; The Registry of Scripless
Agreement 7/16/81
New York Agreement Amendment Securities of the Bureau of the
8/31/90)
Treasury Department of Finance
Poland Citibank Poland, S.A., Warsaw National Depository of
Securities
(Citibank N.A., New York
Agreement 7/16/81
New York Agreement Amendment National Bank of Poland
8/31/90
Citibank Subsidiary Amendment
10/19/95
Citibank, N.A./Citibank
Poland S.A. Agt. 11/6/92)
Bank Polska Kasa Opieki S.A.,
Warsaw
Portugal Banco Comercial Portuges, Central de Valores Mobiliaros
Lisboa
(Interbolsa)
Romania National Company for Clearing
Settlement & Depository for
Securities
Bucharest Stock Exchange
National Bank of Romania
Russia Credit Suisse First Boston Rosvneshtorgbank (VTB)
(Moscow), Ltd
Citibank T/O, Moscow Moscow Interbank Currency
Exchange Clearinghouse (MICEX)
National Depository Center
Singapore Hongkong & Shanghai Banking Central Depository Pte Ltd.
(CDP)
Corp., Ltd., Singapore
(Hongkong & Shanghai Banking
Corp. Agt. 4/19/91
Omnibus Supplement 12/29/93)
Slovak Internationale Nederlanden Stredisko Cennych Papeirov
Republic Bank N.V. (ING BankN.V.), (SCP)
Amsterdam
National Bank of Slovakia
Slovenia Central Klirnisko Depotna
Drozba
d.d.
South Africa First National Bank of The Central Depository (Pty)
Southern Africa Ltd., Ltd.
Johannesburg (CD)
(First National Bank of
Southern Africa Agmt. 8/7/91)
South Korea Citibank, N.A., Seoul Korean Securities Depository
(KSD)
(Citibank N.A., New York
Agreement 7/16/81
New York Agreement Amendment
8/31/90
Citibank, Seoul Agreement
Supplement 10/28/94)
Spain Banco Santander S.A., Madrid Servicio de Compensacion y
(Banco Santander Agreement Liquidacion de Valores (SCLV)
12/14/88)
Banco de Espana
Sri Lanka Hongkong & Shanghai Banking Central Depository System (Pvt)
Corp. Ltd.,
Colombo Limited (CDS)
(Hongkong & Shanghai Banking
Corp. Agt. 4/19/91
Omnibus Supplement 12/29/93)
Swaziland Standard Bank Swaziland, None
Limited, Mbabane
for The Standard Bank of
South Africa, Limited (SBSA)
Sweden Skandinaviska Enskilda Vardepapperscentralen VPC AB
Banken, Stockholm
(Skandinaviska Enskilda
Banken Agreement 2/20/89
Omnibus Amendment 12/3/93)
Switzerland Swiss Bank Corporation, Basel SIS SegaInterSettle AG (SIS)
(Swiss Bank Corporation
Agreement 3/1/94)
Taiwan Standard Chartered Bank, Taipei Taiwan Securities Central
Depository
(Standard Chartered Bank Co. Ltd. (TSCD)
Agmt. 2/18/92)
Thailand Hongkong & Shanghai Banking Thailand Securities Depository
Corp. Ltd.,
Bangkok Company (TSD)
(Hongkong & Shanghai Banking
Corp. Agmt. 4/19/91
Omnibus Amendment 12/29/93)
Transnational Cedel Bank Societe
Anonyme, Luxembourg
Euroclear Clearance System
Societe Cooperative, Belgium
Turkey Citibank, N.A., Istanbul Takas ve Saklama Bankasi A.S.
(TvS)
(Citibank N.A., New York
Agmt. 7/16/81
New York Agmt. Amendment Central Bank of Turkey (CBT)
8/31/90)
United Lloyds Bank PLC, London Central Gilts Office (CGO);
Kingdom Midland Bank Plc
CREST;
Central Money Markets Office
(CMO)
Uruguay BankBoston, N.A. Montevideo None
Venezuela Citibank, N.A., Caracas The Caja Venezolana de
(Citibank N.A., New York Valores (CVV)
Agreement 7/16/81
New York Agreement Amendment
8/31/90)
Zambia Stanbic Bank Zambia Ltd., Lusaka Central Depository
Lusaka
The Bank of Zamibia
Zimbabwe Stanbic Bank Zimbabwe Ltd., None
Harare
</TABLE>
Each of the Investment Companies Listed on Appendix "A" to the
Custodian Agreement, on Behalf of Each of Their Respective Portfolios
By: ___/s/John Costello______________________
Name: _ John Costello______________________
Title: __Asst. Treasurer______________________
Exhibit (g)(6)
APPENDIX "A"
TO
CUSTODIAN AGREEMENT
BETWEEN
The Chase Manhattan Bank and each of the following Investment
Companies
Dated as of February 22, 2000
The following is a list of the Funds and their respective Portfolios
for which the Custodian shall serve under a Custodian Agreement dated
as of August 1, 1994:
<TABLE>
<CAPTION>
<S> <C> <C>
FUND PORTFOLIO EFFECTIVE AS OF:
Fidelity Advisor Series I Fidelity Advisor Balanced Fund August 1, 1994
Fidelity Advisor Equity August 1, 1994
Growth Fund
Fidelity Advisor Equity August 1, 1994
Income Fund
Fidelity Advisor Growth & November 14, 1996
Income Fund
Fidelity Advisor TechnoQuant November 14, 1996
Growth Fund
Fidelity Advisor Series II
Fidelity Advisor Series III
Fidelity Advisor Series VII Fidelity Advisor Consumer July 18, 1996
Industries Fund
Fidelity Advisor Cyclical July 18, 1996
Industries Fund
Fidelity Advisor Financial July 18, 1996
Services Fund
Fidelity Advisor Health Care July 18, 1996
Fund
Fidelity Advisor Technology July 18, 1996
Fund
Fidelity Advisor Utilities July 18, 1996
Growth Fund
Fidelity Advisor Series VIII Fidelity Advisor Emerging August 1, 1994
Markets Income Fund
Fidelity Advisor Overseas Fund August 1, 1994
Fidelity Beacon Street Trust Fidelity Managed Currency Fund August 1, 1994
Fidelity Capital Trust Fidelity TechnoQuant Growth October 17, 1996
Fund
Fidelity Charles Street Trust Fidelity Asset Manager August 1, 1994
Fidelity Asset Manager: Growth August 1, 1994
Fidelity Asset Manager: September 22, 1999
Aggressive
Fidelity Asset Manager: Income August 1, 1994
Fidelity Commonwealth Trust Fidelity Mid-Cap Stock Fund* August 1, 1994
Fidelity Deutsche Mark Fidelity Deutsche Mark August 1, 1994
Performance Performance Portfolio, L.P.
Portfolio, L.P.
Fidelity Devonshire Trust Fidelity Equity-Income Fund August 1, 1994
Fidelity Financial Trust Fidelity Equity-Income II Fund August 1, 1994
Fidelity Hastings Street Trust Fidelity Fund August 1, 1994
Fidelity Growth & Income II March 25, 1998
Portfolio
Fidelity Investment Trust Fidelity Diversified Global August 1, 1994
Fund
Fidelity Diversified August 1, 1994
International Fund
Fidelity Emerging Markets Fund August 1, 1994
Fidelity Europe Capital August 1, 1994
Appreciation Fund
Fidelity Europe Fund August 1, 1994
Fidelity International Growth August 1, 1994
& Income Fund
Fidelity Aggressive August 1, 1994
International Fund *
Fidelity Japan Fund August 1, 1994
Fidelity Overseas Fund August 1, 1994
Fidelity Pacific Basin Fund August 1, 1994
Fidelity Southeast Asia Fund August 1, 1994
Fidelity Worldwide Fund August 1, 1994
Fidelity Mt. Vernon Street Fidelity New Millennium Fund August 1, 1994
Trust
Fidelity Puritan Trust Fidelity Puritan Fund August 1, 1994
Fidelity Revere Street Trust Taxable Central Cash Fund October 17, 1996
Central Cash Collateral Fund June 22, 1999
Fidelity School Street Trust Fidelity International Bond August 1, 1994
Fund
Fidelity New Markets Income August 1, 1994
Fund
Fidelity Securities Fund Fidelity Growth & Income August 1, 1994
Portfolio
Fidelity Sterling Performance Fidelity Sterling Performance August 1, 1994
Portfolio, L.P.
Portfolio, L.P.
Fidelity Trend Fund Fidelity Trend Fund August 1, 1994
Fidelity Union Street Trust Fidelity Export and August 1, 1994
Multinational Fund
Fidelity Yen Performance Fidelity Yen Performance August 1, 1994
Portfolio, L.P.
Portfolio, L.P.
Variable Insurance Products Equity-Income Portfolio August 1, 1994
Fund
Overseas Portfolio August 1, 1994
Variable Insurance Products Asset Manager Portfolio August 1, 1994
Fund II
Asset Manager: Growth Portfolio August 1, 1994
Variable Insurance Products Balanced Portfolio August 1, 1994
Fund III
Growth & Income Portfolio December 19, 1996
</TABLE>
*Fidelity Investment Trust: Fidelity International Value Fund changed
its name to Fidelity Aggressive International Fund effective
February 11, 2000.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Appendix to be executed in its name and behalf as of the day and year
first set forth opposite each such Portfolio.
Each of the Investment The Chase Manhattan Bank
Companies
Listed on this Appendix "A",
on behalf
of each of their respective
Portfolios
By: /s/Maria Dwyer By: /s/Matthew Goad
Name: Maria Dwyer Name: Matthew Goad
Title: Deputy Treasurer Title: Vice President
Exhibit (g)(7)
Appendix "B
To
Custodian Agreement
Between
The Chase Manhattan Bank, N.A. and Each of the Investment
Companies Listed on Appendix "A" thereto
Dated as of March 16, 2000
The following is a list of Additional Custodians, Special
Subcustodians and Foreign Subcustodians under the Custodian Agreement
dated as of August 1, 1994 (the "Custodian Agreement"):
A. Additional Custodians:
CUSTODIAN PURPOSE
Bank of New York FICASH
FITERM
B. Special Subcustodians:
SUBCUSTODIAN PURPOSE
Bank of New York FICASH
Citibank, N.A. Global Bond Certificates*
C. Foreign Subcustodians:
COUNTRY FOREIGN SUBCUSTODIAN DEPOSITORY
Argentina Chase Manhattan Bank, N.A., Caja de Valores, S.A.
Buenos Aires
Citibank, N.A., Buenos Aires
Australia The Chase Manhattan Bank, Austraclear Limited
Sydney
RITS
Westpac Banking Corporation,
Sydney
The Clearing House Electronic
Sub-register System
Austria Creditanstalt-Bankverein, Osterreichsche Kontrollbank
Vienna Aktiengesellschaft (OEKB)
Bahrain British Bank of the Middle None
East, Manama
Bangladesh Standard Chartered Bank, Dhaka None
*Citibank, N.A. will act as Special Subcustodian with respect to
global bond certificates for the following portfolios only: Fidelity
Advisor Series VIII: Fidelity Advisor Emerging Markets Income Fund;
Fidelity Investment Trust:
Fidelity New Markets Income Fund.
<TABLE>
<CAPTION>
<S> <C> <C>
Belgium Generale Bank, Caisse Interprofessionnelle
Brussels de Depot et de Virement de
Banque Bruxelles Lambert, Titres (CIK)
Brussels
Banque Nationale de Belgique
Bermuda The Bank of Bermuda, Limited None
Hamilton
Botswana Barclays Bank of Botswana Ltd., None
Gaborone
Brazil Citibank, N.A., Sao Paulo Bolsa de Valores de Sao Paulo
(BOVESPA/CALISPA);
Companhia Brasleira de
Liquidacao e Custodia
BankBoston, N.A., Sao Paulo Rio de Janeiro Stock Exchange
(BVRJ)
Companhia Brasileira de
Liquidacao
e Custodia
Bulgaria ING Bank, Sofia Central Depository AD,
Bulgarian
National Bank
Canada Canada Imperial Bank of Canadian Depository for
Commerce,
Toronto Securities Ltd. (CDS)
Royal Bank of Canada
Chile Chase Manhattan Bank, Santiago Deposito Central de Valores,
S.A.
Citibank, N.A., Santiago
China-Shanghai Hongkong & Shanghai Banking Shanghai Securities Central
Corp., Ltd., Shanghai Clearing & Registration Corp.
(SSCCRC)
China- Hongkong & Shanghai Banking Shenzhen Securities Central
Shenzhen
Corp., Ltd., Shenzhen Clearing Co (SSCC)
Colombia Cititrust Colombia S.A., Deposito Central de Valores
Sociedad Fiduciaria,
Bogota
Deposito Centralizado de
Valores
(DECEVAL)
Cyprus The Cyprus Popular Bank Ltd None
Czech Ceskoslovenska Obchodni Securities Center (SCP)
Republic Banka, A.S., Prague
ING Bank N.V., Prague
Denmark Den Danske Bank, Copenhagen Vaerdipapircentralen-VP Center
Ecuador Citibank, N.A., Quito None
Egypt National Bank of Egypt, Cairo Misr for Clearing, Settlement
and
Depository
Citibank, N.A., Cairo
Finland Merita Bank, Ltd., Central Share Register of
Helsinki Finland (CSR)
France Banque Paribas, Paris SICOVAM
Credit Agricole Indosuez, Paris
Societe Generale
Germany Dresdner Bank A.G., Frankfurt Deutsche Borse Clearing (DBC)
Ghana Barclays Bank of Ghana Ltd., None
Accra
Greece Barclays Bank Plc, Athens The Central Securities
Depository
(Apothetirio Titlon, A.E.)
Bank of Greece
Hong Kong Chase Manhattan Bank, Central Clearing & Settlement
Hong Kong System (CCASS)
Hongkong & Shanghai Banking The Central Money Markets Unit
Corp., Ltd.,
Hong Kong
Hungary Citibank Budapest Rt., Budapest Central Depository & Clearing
House
(Budapest) Ltd. (KELER Ltd.)
India Deutsche Bank AG, Mumbai National Securities Depository
Limited (NSDL)
Hongkong & Shanghai Banking Central Depository Services
Corp. Ltd., (India) Limited (CDSL)
Mumbai
Chase Manhattan Bank, Mumbai
Standard Chartered Bank, Mumbai
Indonesia Hongkong & Shanghai Banking PT Kustodian Sentral Efek
Corp. Ltd., Indonesia
Jakarta
Standard Chartered Bank,
Jakarta
Ireland Bank of Ireland, Dublin The CREST System
Allied Irish Bank PLC, Dublin Bank of Ireland Securities
Settlement
Office
Israel Bank Leumi Le-Israel, B. M., Tel Aviv Stock Exchange
Tel Aviv
(TASE) Clearinghouse Ltd.
Italy Bank Paribas, Milan Monte Titoli S.p.A.
Citibank, N.A., Milan Banca d'Italia
Ivory Coast Societe Generale de Banques en
Cote d'Ivoire, Abidjan None
Japan The Fuji Bank, Limited, Tokyo Japan Securities
Depository Center (JASDEC)
Bank of Tokyo-Mitsubishi Bank of Japan
Ltd., Tokyo
Jordan Arab Bank, PLC, Amman None
Kenya Barclays Bank of Kenya Ltd., None
Nairobi
Lebanon The British Bank of the Midclear
Middle East (BBME)
Luxembourg Banque Generale du Luxembourg None
Banque Bruxelles Lambert,
Luxembourg
Malaysia The Chase Manhattan Bank, Malaysian Central Depository
(M) Berhad, Kuala Lumpur Sdn. Bhd. (MCD)
Hongkong Bank Malaysia
Berhad, Kuala Lumpur
Mauritius Hongkong & Shanghai Banking Central Depository &
Corp. Ltd., Settlement Co.,
Port Louis Ltd. (CDS)
Mexico Chase Manhattan Bank, Mexico, Institucion para el Deposito de
S.A.
Valores-S.D. INDEVAL, S.A.
Citibank Mexico, S.A., Mexico de C.V.
City,
a wholly-owned subsidiary of
Citibank, N.A.
Morocco Banque Commerciale du Maroc, MAROCLEAR
Casablanca
Namibia Standard Bank Namibia Ltd., None
Windhoek
Netherlands ABN-AMRO, Bank N.V., Nederlands Centraal Instituut
Amsterdam voor Giraal Effectenverkeer
BV (NECIGEF); KAS Associatie,
N.V. (KAS)
New Zealand National Nominees Ltd., New Zealand Central Securities
Auckland
Depository Limited (NZCSD)
ANZ Banking Group (New
Zealand) Limited,
Wellington
Norway Den norske Bank ASA, Oslo Verdipapirsentralen, The
Norwegian
Registry of Securities (VPS)
Oman British Bank of the Middle Muscat Securities Market
East, Muscat
Pakistan Citibank, N. A., Karachi Central Depository
Company of Pakistan (CDC)
Standard Chartered Bank,
Karachi
Deutsche Bank AG, Karachi
Peru Citibank, N.A., Lima Caja de Valores (CAVALI, S.A.)
Philippines Hongkong & Shanghai Banking The Philippines Central
Depository,
Corp., Ltd., Manila Inc.
Poland Bank Handlowy W. Warzawie, National Depository of
S.A., Warsaw Securities
Citibank Poland, S.A.,
Warsaw, a wholly-owned
indirect subsidiary of
Citibank, N.A.
Bank Polska Kasa Opieki, S.A.
Portugal Banco Espirito Santo e Central de Valores Mobiliaros
Commercial
de Lisboa, S.A., Lisbon (Interbolsa)
Bankco Comercial Portuges,
Lisbon
The Central Treasury Bills
Registrar
Romania ING Bank N.V., Bucharest National Company for Clearing,
ABN AMRO Bank (Romania) Settlement & Depository
for Securities (SNCDD)
Bucharest Stock Exchange (BSE)
Russia Chase Manhattan Bank Rosvneshtorgbank (VTB)
International,
Moscow
Credit Suisse First Boston AO,
Moscow, a wholly-owned
subsidiary of Credit Suisse
First Boston
Singapore Chase Manhattan Bank, Singapore Central Depository (Pte) Ltd.
(CDP)
Standard Chartered Bank, Singapore Government
Singapore Securities Book-entry System
Oversea-Chinese Banking
Corporation Limited,
Singapore
Slovak Ceskoslovenska Obchodna, Stredisko Cennych Papierov
Republic Banka, A.S. (SCP)
Bratislava
ING Bank N.V., Bratislava
Slovenia Banka Creditanstalt D.D., Central Klirnisko Depotna
Ljubljana Druzba
d.d. (KDD)
South Africa Standard Bank of South The Central Depository Limited
Africa, Ltd.,
Johannesburg STRATE
First National Bank of
Southern Africa Ltd.,
Johannesburg
South Korea Hongkong & Shanghai Banking Korean Securities Depository
Corp., Ltd.
Seoul (KSD)
Standard Chartered Bank, Seoul
Spain Chase Manhattan Bank C.M.B., Servicio de Compensacion y
S.A.
Madrid Liquidacion de Valores (SCLV)
Banco Santander S.A., Madrid Banco de Espana
Sri Lanka Hongkong & Shanghai Banking Central Depository System
Corp. Ltd.,
Colombo (Pvt) Limited (CDS)
Swaziland Stanbic Bank Swaziland None
Limited, Mbabane
Standard Bank Swaziland Limited
Sweden Skandinaviska Enskilda Vardepappercentralen,
Banken, Stockholm
The Swedish Central Securities
Svenska Handelsbanken, Depository
Stockholm
Switzerland Union Bank of Switzerland, Schweizerische Effekten-
Zurich Giro A.G. (SEGA)
Taiwan Chase Manhattan Bank, Taipei Taiwan Securities Central
Depository Co., Ltd. (TSCD)
Hongkong & Shanghai Banking
Corp., Ltd.
Taipei
Thailand Chase Manhattan Bank, Bangkok Thailand Securities Depository
Company Limited (TSD)
Standard Chartered Bank,
Bangkok
Transnational CEDEL, S.A. Luxembourg
The Euroclear System
Turkey Chase Manhattan Bank, Istanbul Takas ve Saklama A.S. (TvS)
Citibank, N.A., Istanbul Central Bank of Turkey
United Chase Manhattan Bank, London The CREST System
Kingdom
First Chicago NBD Central Gilts Office
Corporation, London
Central Moneymarkets Office
Uruguay BankBoston, N.A., Montevideo None
Citibank, N.A., Montevideo
Venezuela Citibank, N.A., Caracas Central Bank of Venezuela
Zambia Barclays Bank of Zambia Ltd., Lusaka Stock Exchange
Lusaka
Zimbabwe Barclays Bank of Zimbabwe None
Ltd., Harare
</TABLE>
Each of the Investment Companies Listed on
Appendix "A" to the Custodian Agreement,
on Behalf of Each of Their Respective Portfolios
By: /s/John Costello
Name: John Costello
Title: Asst. Treasurer
Exhibit (g)(15)
APPENDIX "A"
TO
CUSTODIAN AGREEMENT
BETWEEN
Each of the Investment Companies,
on behalf of their respective portfolios,
listed on this appendix "A"
and
Bankers Trust Company
Dated as of February 22, 2000
The following is a list of the Funds and their respective Portfolios
for which the Custodian shall serve under a Custodian Agreement dated
as of November 5, 1997 (the "Custodian Agreement"):
<TABLE>
<CAPTION>
<S> <C> <C>
Name: Portfolio: Effective as of:
Fidelity Commonwealth Trust: Spartan 500 Index Fund* December 1, 1997
Fidelity Concord Street Trust: Spartan Extended Market November 5, 1997
Index Fund
Spartan Total Market Index Fund November 5, 1997
Spartan International Market November 5, 1997
Index Fund
Spartan U.S. Equity Index Fund December 5, 1997
Variable Insurance Products Index 500 Portfolio December 1, 1997
Fund II:
</TABLE>
*Spartan Market Index Fund changed its name to Spartan 500 Index Fund
effective February 10, 2000.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Appendix to be executed in its name and behalf as of the day and year
first set forth opposite each such Portfolio.
Each of the Investment Companies,
on Behalf of Each of Their
Respective Portfolios,
Listed on this Appendix A to Bankers Trust Company
the Custodian Agreement.
By: /s/Maria Dwyer By: /s/Nancy McNally
Name: Maria Dwyer Name: Nancy McNally
Title: Deputy Treasurer Title: Director
Exhibit (g)(16)
APPENDIX "B"
TO
CUSTODIAN AGREEMENT
BETWEEN
and Each of the Investment Companies,
on Behalf of Each of Their Respective Portfolios,
Listed on this Appendix "A" to the Custodian Agreement
AND
Bankers Trust Company
Dated as of December 16, 1999
The following is a list of Additional Custodians, Special
Subcustodians and Foreign Subcustodians under the Custodian Agreement
dated as of November 5, 1997 (the "Custodian Agreement"):
A. Additional Custodians:
Custodian Purpose
Bank of New York FICASH
FITERM
B. Special Subcustodians:
Subustodian Purpose
C. Foreign Subcustodians:
<TABLE>
<CAPTION>
<S> <C> <C>
COUNTRY SUBCUSTODIAN DEPOSITORY
Argentina Citibank, N.A., Buenos Aires Caja de Valores, S.A
Deutsche Bank S.A.
Australia Bankers Trust Australia Austraclear Limited
Limited,
through its wholly-owned
indirect
subsidiary Pendal Nominees Pty. The Reserve Bank
National Australia Bank Limited Limited, Sydney
ANZ Nominees Ltd. Information and
Transfer System (RITS)
The Clearing House Electronic
Sub-register System
Austria Creditanstalt-Bankverein, Wertpapiersammelbank,
Vienna
Deutsche Bank AG division of Osterreichische
Kontrollbank
Aktiengesellschaft (OeKB)
Bangladesh The Hongkong and Shanghai
Banking
Corporation, Limited, Dhaka
Belgium Generale Bank, Brussels Caisse Interprofessionelle
Fortis Bank N.V. de Depots et de Virements
Paribas Brussels Branch de Titres, S.A. (CIK)
Banque Nationale de Belgique
(BNB)
Botswana Barclays Bank of Botswana Ltd.,
Gaborone, a 74.9% direct
subsidiary of Barclays Bank Plc
Brazil Citibank, N.A. Sao Paulo Systema Especial de
Deutsche Bank S.A. Liquidacao e Custodia
(SELIC); Bolsa de Valores
de Sao Paulo (BOVESPA/
CALISPA)
Companhia Brasileira de
Liquidacao
e Custodia
Canada Royal Bank of Canada, Toronto Canadian Depository for
Securities, Ltd., (CDS)
Chile Citibank, N.A., Santiago Deposito Central de
Valores, S.A. (DCV)
China-Shanghai The Hongkong and Shanghai Shanghai Securities Central
Banking
Corporation Limited, Shanghai Clearing & Registration
Deutsche Bank AG Corporation (SSCCRC)
China-Shenzhen The Hongkong and Shanghai Shenzhen Securities Central
Banking,
Corporation Limited, Shenzhen Clearing Co., Ltd. (SSCC)
Deutsche Bank AG
Colombia Cititrust Colombia S.A. Deposito Central de Vlaores
Sociedad (DVC)
Fiduciaria, Bogota, a wholly-
owned subsidiary of Citibank, Deposito Centralizado de
N.A. Valores
(DECEVAL)
Czech Republic Ceskoslovenska Obchodni Banka, Stredisko Cennych Pairu
A.S., Prague (SCP)
Deutsche Bank AG Czech National Bank (CNB)
Denmark Den Danske Bank, Copenhagen Vaerdipapircentralen, The
Danish Securities Center (VP)
Ecuador Citibank, N.A., Quito
Egypt National Bank of Egypt, Cairo The Misr for Clearing,
Citibank, N.A. Settlement and Depository
(MCSD)
Finland Merita Bank Ltd., Helsinki Finnish Central Securities
Depository Ltd. (CSD)
France Banque Paribas, paris Societe Interprofessionelle
Deutsche Bank AG pour la Compensation des
Valeurs Movilieres (SICOVAM)
Banque de France
Germany Dresdner Bank AG, Frankfurt Deutsche Borse Clearing (DBC)
Deutsche Bank AG
Greece National Bank of Greece S.A., The Central Securities
Athens Depository (Apothetirion
Titlon A.E.)
The Bank of Greece
Hong Kong Hongkong and Shanghai Banking The Central Clearing and
Corporation, Limited Hong Kong Settlement System (CCASS)
The Deutsche Bank AG The Central Moneymarkets Unit
Hungary Citibank Budapest Rt., Central Depository and
Budapest, a
wholly-owned indirect Clearing House (Budapest)
subsidiary
of Citibank, N.A. Ltd. (KELER Ltd.)
Deutsche Bank S.A.
India Deutsche Bank AG, Mumbai National Securities Depository
Limited (NSDL)
Hongkong & Shanghai Banking
Corp. Ltd., Mumbai
Standard Chartered Bank,
Mumbai
Indonesia The Hongkong and Shanghai Bank Indonesia
Banking
Corporation Limited, Jakarta PT Kustodian Sentral Efek
Deutsche Bank AG
Ireland Allied Irish Banks plc, Dublin Gilt Settlement Office (GSO)
Bank of Ireland The CREST System
Israel Bank Leumi Le-Israel, B.M., The Clearing House of the Tel
Tel Aviv Aviv Stock Exchange
Bank Hapoalim, B.M. The Bank of Israel
Italy Banca Commerciale Italiana, Monte Titoli S.p.A.
Milan
Deutsche Bank S.A. Banca d'Italia
Citibank, N.A., Milan
Japan Sumitomo Bank, Ltd., Tokyo Japan Securities Depository
Dai Ichi Kangyo Bank Ltd. Center (JASDEC)
Bank of Tokyo-Mitsubishi Ltd. Bank of Japan
Jordan Arab Bank, plc, Amman
Kenya Barclays Bank of Kenya Ltd., The Central Bank of Kenya
Nairobi, a 68.5% direct
subsidiary of Barclays Bank Plc
Luxembourg Banque Generale du
Luxembourg, S.A. (BG)
Malaysia United Overseas Bank (Malaysia) Malaysian Central Depository
Bhd Sdn. Bhd. (MCD)
Deutsche Bank S.A. Bank Negara Malasia
Mauritius HongKong & Shanghai Banking The Central Depository
Corp.
& Settlement Co., Ltd., (CDS)
Mexico Bancomer, S.A., Institucion de S.D. INDEVAL, S.A.
Banca Multiple, Grupo (Institucion para el
Financiero, Mexcio City Deposito de Valores)
Citibank Mexico, S.A. Banco de Mexico
Banco Nacional de Mexico
(BANAMEX)
Morocco Banque Marocaine du Commerce MAROCLEAR
Exterieur, Casablanca
Netherlands ABN-AMRO Bank N.V., Nederlands Centraal Instituut
Amsterdam voor Giraal Effectenverkeer
Deutsche Bank AG BV (NECIGEF)
New Zealand The Hongkong and Shanghai New Zealand Central
Banking
Corporation Limited, Securities Depository Limited
Wellington (NZCSD) (formerly
National Nominees Ltd Austraclear Ltd.)
Norway The Euroclear System, Brussels Verdipapirsentralen, The
Den Norske Bank ASA Norwegian Registry of
Securities (VPS)
Christiania Bank og Kreditkasse
Olso
Pakistan The Hongkong and Shanghai The Central Depository
Banking
Corporation Limited, Karachi Company of Pakistan (CDC)
Deutsche Bank AG
Peru Citibank, N.A., Lima Caja De Valores (CAVALI), S.A.
Philippines The Hongkong and Shanghai The Philippines Central
Banking
Corporation Limited, Manila Depository Inc.
Deutsche Bank AG The Book-Entry System
of the Central Bank
The Registry of Scripless
Securities of the Bureau of the
Treasury, Department of
Finance
Poland Citibank Poland, S.A., The National Depository of
Warsaw, a
wholly-owned indirect Securities
subsidiary
of Citibank, N.A. National Bank of Poland
Deutsche Bank AG
Portugal Banco Espirito Santo e Central de Valores Mobiliarios
Comercial
de Lisboa, S.A., Lisbon
Banco Comercial Portuges (BCP)
Romania ING Bank N.V., Bucharest National Company for Clearing,
Settlement & Depository For
Securities (SNCDD)
Bucharest Stock Exchange (BSE)
Russia Credit Suisse First Boston
AO, Moscow
Deutsche Bank S.A.
Singapore United Overseas Bank, Singapore Central Depository (Pte.) Ltd.
Deutsche Bank AG (CDP)
The Monetary Authority of
Singapore
Slovenia Banka Creditonstalt d.d. Klirinsko Depotna Druzba
Ljubljana, a
99.96% owned subsidiary of
Creditanstalt AG
Slovak Republic Ceskoslovenska Obchodna Banka, Stredisko Cennych Papierov
A.S., Bratislava (SCP)
Bank Austria National Bank of Slovakia
(NBS)
South Africa ABSA Bank Limited, The Central Depository (Pty)
Johannesburg Ltd. (CD)
STRATE
South Korea The Hongkong and Shanghai Korean Securities Depository
Banking
Corporation Limited, Seoul (KSD)
Deutsche Bank AG
Spain Banco Santander S.A., Madrid Servicio de Compensacion y
Deutsche Bank S.A. Liquidacion de Valores, S.A.
(SCLV)
Banco de Espana
Sri Lanka The Hongkong and Shanghai Central Depository System
Banking
Corporation Limited, Colombo (Pvt) Limited (CDS)
Deutsche Bank AG
Sweden Svenska Handelsbanken, Vardepapperscentralen, AB,
Stockholm The Swedish Central
Securities Depository
Switzerland Union Bank of Switzerland AG Schweizerische Effekten - Giro
Credit Suisse First Boston AG (SEGA)
Taiwan Central Trust of China, Taipei Taiwan Securities Central
Deutsche Bank AG Depository Co. (TSCD)
The Hongkong and Shanghai
Banking
Corporation Limited, Taipei
Thailand The Hongkong and Shanghai Thailand Securities Depository
Banking
Corporation Limited, Bangkok Company Limited (TSD)
Deutsche Bank AG
Transnational Cedel Bank Societe Anonyme
Luxembourg
Turkey Osmanli Bankasi A.S., Instanbul Takas ve Saklama Bankasi
A.S. (Takasbank) (TvS)
Central Bank of Turkey (CBT)
United Kingdom Bankers Trust Company Central Gilts Office (CGO)
London
Deutsche Bank AG Central Moneymarkets Office
(CMO)
CREST
Uruguay Citibank, N.A. Montevideo
Venezuela Citibank, N.A., Caracas The Caja Venezolana de
Valores (CVV)
The Central
Zambia Barclays Bank of Zambia Ltd., Lusaka Central Despitory
Lusaka, a wholly-owned direct (LCD)
subsidiary of Barclays Bank Plc
The Bank of Zambia
Zimbabwe Barclays Bank of Zimbabwe Ltd.,
Harare, a 66% direct subsidiary
of Barclays Bank Plc
</TABLE>
Each of the Investment Companies Listed on Appendix A to the Custodian
Agreement, on Behalf of Each of Their Respective Portfolios
By: /s/John Costello
Name: John Costello
Title: Asst. Treasurer
Exhibit (p)(1)
FIDELITY INVESTMENTS'
CODE OF ETHICS FOR PERSONAL INVESTING
JANUARY 1, 2000
CODE OF ETHICS FOR PERSONAL INVESTING
This document constitutes the Code of Ethics adopted by the Fidelity
Funds (the "Funds"), the subsidiaries of FMR Corp. that serve as
investment advisors or principal underwriters and their affiliated
companies (collectively, the "Fidelity Companies") pursuant to the
provisions of Rule 17j-1 under the Investment Company Act of 1940 and
of Rules 204-2(a)(12) and 204-2(a)(13) under the Investment Advisers
Act of 1940 (collectively, the "Rules").
I. PURPOSE AND SCOPE OF THIS CODE
A. PERSONAL SECURITIES TRANSACTIONS
This Code focuses on personal transactions in securities by persons
associated with the various Fidelity Companies. Accordingly, the Code
does not attempt to address all areas of potential liability under
applicable laws. For example, provisions of the Investment Company
Act of 1940 prohibit various transactions between a fund and
affiliated persons, including the knowing sale or purchase of property
to or from a fund on a principal basis and joint transactions between
a fund and an affiliated person. This Code does not address these
other areas of potential violation. Accordingly, persons covered by
this Code are advised to seek advice from the Ethics Officer, or his
or her designee (collectively, the "Ethics Office"), before engaging
in any transaction other than the normal purchase or sale of fund
shares or the regular performance of their business duties if the
transaction directly or indirectly involves themselves and one or more
of the Funds.
B. GUIDING PRINCIPLES
The Code is based on the principle that the officers, directors,
partners and employees of the Fidelity Companies owe a fiduciary duty
to, among others, the shareholders of the Funds to place the interests
of the Fund shareholders above their own and to conduct their personal
securities transactions in a manner which does not interfere with Fund
transactions, create an actual or potential conflict of interest with
a Fund or otherwise take unfair advantage of their relationship to the
Funds. Persons covered by this Code must adhere to this general
principle as well as comply with the Code's specific provisions. It
bears emphasis that technical compliance with the Code's procedures
will not automatically insulate from scrutiny trades which show a
pattern of abuse of the individual's fiduciary duties to the Fidelity
Funds in general or a specific Fund in particular. For officers and
employees of Fidelity Management & Research Company ("FMR") and its
affiliates, the fiduciary responsibility applies to all of the
investment companies advised by FMR or any of its affiliates as well
as any account holding the assets of third parties for which FMR or
any of its affiliates acts in an investment advisory capacity (both
types of portfolios hereinafter referred to as the "Fidelity Funds" or
"Funds").
Recognizing that certain requirements are imposed on investment
companies and their advisers by virtue of the Investment Company Act
of 1940 and the Investment Advisers Act of 1940, considerable thought
has been given to devising a code of ethics designed to provide legal
protection to accounts for which a fiduciary relationship exists and
at the same time maintain an atmosphere within which conscientious
professionals may develop and maintain investment skills. It is the
combined judgment of the Fidelity Companies and the Boards of the
Funds that as a matter of policy a code of ethics should not inhibit
responsible personal investment by professional investment personnel,
within boundaries reasonably necessary to insure that appropriate
safeguards exist to protect the Funds. This policy is based on the
belief that personal investment experience can over time lead to
better performance of the individual's professional investment
responsibilities. The logical extension of this line of reasoning is
that such personal investment experience may, and conceivably should,
involve securities which are suitable for the Funds in question. This
policy quite obviously increases the possibility of overlapping
transactions. The provisions of this Code, therefore, are designed to
foster personal investments while minimizing conflicts under these
circumstances and establishing safeguards against overreaching.
II. PERSONS (AND ACCOUNTS) TO WHOM THIS CODE APPLIES
Unless otherwise specified, each provision of this Code applies to all
members of the Board of the Funds, and all officers, directors,
partners and employees of every Fidelity Company. In addition, the
provisions apply to any individual designated and so notified in
writing by the Ethics Office. Where the applicability of a particular
provision is more limited, the provision will so state. For example,
particular provisions may state they are limited to:
A.ACCESS PERSONS
This category includes Investment Professionals, Senior Executives and
certain other employees specified in paragraph II. A. 2. below.
1. INVESTMENT PROFESSIONALS are (i) portfolio managers, research
analysts and traders employed by FMR; (ii) employees seconded to FMR
from Fidelity International Limited ("FIL") performing similar
functions; (iii) all employees of the Capital Markets Division of
Fidelity Investment Institutional Brokerage Group ("FIIBG"); (iv)
officers (vice-president and above) and members of the Boards of
Directors of FMR; and (v) such other employees as the Ethics Office
may designate and so notify in writing.
2. SENIOR EXECUTIVES are (i) officers (vice-president and above) and
members of the Boards of Directors of FMR Corp.; (ii) attorneys within
Administrative and Government Affairs' ("AGA") Legal Department; (iii)
employees of the Fund Treasurer's Department, the FMR Investment &
Advisor Compliance Department and the Compliance Systems Technology
Group; and (iv) such other employees as the Ethics Office may
designate and so notify in writing.
3. OTHER ACCESS PERSONS are all other employees who, in connection
with their regular duties, make, participate in, or obtain timely
information regarding the purchase or sale of a security by a Fund or
of any investment recommendation to a Fund. This includes (i)
employees of FMR, Fidelity Management Trust Company ("FMTC"), and
Fidelity Pricing and Cash Management Services ("FPCMS"); (ii) other
employees seconded from FIL to the foregoing companies; (iii) all
employees with access to the BOS E (AS400 trading machine), BOS H
(AS400 development machine), INVIEW, BONDVIEW or OVERVIEW systems or
any other system containing timely information about the Funds'
activities or investment recommendations made to the Funds; (iv) all
employees within AGA's Operations Audit and Analysis Department, and
(v) such other employees as the Ethics Office may designate and so
notify in writing.
Although the Ethics Office seeks to notify Access Persons of their
status as such, you are required to comply with all provisions
applicable to Access Persons if you are within the above definitions
even if the Ethics Office does not notify you of your status. Please
contact the Ethics Office if you believe you are an Access Person or
if you are unsure of your status under the Code.
B. NON-ACCESS TRUSTEES
1. Trustees of the Fidelity Group of Funds will generally be deemed
Access Persons; however, Trustees who fulfill both of the following
conditions will be deemed "Non-Access Trustees" and treated as a
separate category:
a) The Trustee is not an "interested person" (as defined in Section
2(a)(19) of the Investment Company Act of 1940) of any Fidelity Fund;
and
b) The Trustee elects not to receive the Daily Directors' Report and
further elects not to have access to the INVIEW, BONDVIEW, or OVERVIEW
systems; PROVIDED that this condition shall only be considered
fulfilled as of the fifteenth day after the Trustee has notified the
Ethics Office of such election.
C. PORTFOLIO MANAGERS.
This category includes employees whose assigned duties are to manage
any Fund, or portion thereof, and who have the power and authority to
make investment decisions on behalf of such Fund or portion thereof.
D. FIDELITY EMPLOYEES.
This category includes all employees of the Fidelity Companies,
including employees seconded to any Fidelity Company by FIL.
E. OTHER PERSONS.
These are persons as specified in a particular provision of the Code
or as designated by the Ethics Office.
F. COVERED ACCOUNTS (BENEFICIAL OWNERSHIP).
It bears emphasis that the provisions of the Code apply to
transactions in reportable securities for any account "beneficially
owned" by any person covered by the Code. The term "beneficial
ownership" is more encompassing than one might expect. For example,
an individual may be deemed to have beneficial ownership of securities
held in the name of a spouse, minor children, or relatives sharing his
or her home, or under other circumstances indicating a sharing of
financial interest. See the Appendix to this Code for a more
comprehensive explanation of beneficial ownership. Please contact the
Ethics Office if you are unsure as to whether you have beneficial
ownership of particular securities or accounts.
III. PROVISIONS APPLICABLE TO FIDELITY EMPLOYEES AND THEIR ACCOUNTS
A. PROCEDURAL REQUIREMENTS
1. REPORTS ON REPORTABLE SECURITIES. Fidelity has established certain
procedures to monitor individual transactions in reportable securities
(as defined below) for compliance with this Code, and to avoid
situations which have the potential for conflicts of interest with the
Funds. You and all persons subject to this Code are required to
comply with the procedures described below. Failure to follow these
procedures or the filing of a false, misleading or materially
incomplete report will itself constitute a violation of this Code.
Reports required under Section III.A.5. are necessary only for
transactions in reportable securities. If an investment is made in an
entity substantially all of whose assets are shares of another entity
or entities, the security purchased should be reported and the
underlying security or securities identified. Furthermore, if an
investment is made in a private placement, this transaction must be
reported. (See Exhibit B.)
"REPORTABLE SECURITIES" are ALL securities except:
a) U.S. Treasury Notes, Bills and Bonds;
b) money market instruments such as certificates of deposit, banker's
acceptances and commercial paper;
c) shares of registered open-end investment companies;
d) securities issued by FMR Corp.;
e) any obligations of agencies and instrumentalities of the U.S.
government if the remaining maturity is one year or less; and
f) commodities and options and futures on commodities provided that
the purchase of these instruments may not be utilized to indirectly
acquire interests or securities which could not be acquired directly
or which could not be acquired without reporting or pre-clearance.
See Section III.B.4.
2. ACKNOWLEDGMENT. Each new Fidelity employee will be given a copy of
this Code of Ethics upon commencement of employment. Within 7 days
thereafter, you must file an acknowledgment (Exhibit A.) stating that
you have read and understand the provisions of the Code of Ethics, and
provide a written list to the Ethics Office of all brokerage accounts
in which you are a beneficial owner of any securities in the account
(Exhibit E.). Additionally, your acknowledgment accords Fidelity the
authority to access at any time records for any beneficially owned
brokerage account for the period of time you were employed by
Fidelity.
3. ANNUAL UPDATE. Each year, on or before January 31, you must file
an annual update stating that you have reviewed the provisions of the
Code of Ethics, understand the provisions of the Code and that the
Code applies to you, and believe that your personal transactions in
reportable securities for the previous calendar year, and those of
your family members which are deemed to be beneficially owned by you,
have been reported as required under the Code and were consistent with
its provisions (Exhibit A.).
4. USE OF BROKERS.
a) ALL FIDELITY EMPLOYEES must conduct all personal and beneficially
owned transactions in reportable securities through a brokerage
account at Fidelity Brokerage Services, Inc. (FBSI), or with an
approved broker outside the U.S. (See Exhibit G.). By opening an
account with FBSI you agree to allow FBSI to forward to the Ethics
Office reports of your account transactions and to allow the Ethics
Office access to all account information. Upon opening such an
account you are required to notify FBSI of your status as an employee.
b) HARDSHIP EXCEPTION: Under circumstances evidencing special
hardship and then only with the express written approval of the Ethics
Office, you may be granted a waiver to establish accounts for trading
reportable securities with brokers other than FBSI or those approved
for the region. (See Section VIII.). If you maintain an account with
an external broker pursuant to permission from the Ethics Office, you
must ensure duplicate reporting as specified in "Transaction
Reporting." (See Section III. A. 5.).
5. TRANSACTION REPORTING. Each employee must report personal
transactions in reportable securities to the Ethics Office. Failure
to file a report will be treated as the equivalent of a report
indicating that there were no transactions in reportable securities.
This reporting obligation may be met as follows:
a) FBSI Accounts: The Ethics Office will assume responsibility for
obtaining trade information from FBSI for accounts in your name and
all other related FBSI accounts that have been disclosed to the Ethics
Office by you.
b) Non-FBSI (External) Accounts: If any transactions in reportable
securities are not being conducted through a FBSI account (including
those conducted through an approved broker outside the U.S. or another
external broker pursuant to permission from the Ethics Office), you
are responsible for ensuring that the institution where the account is
maintained agrees to, and promptly provides, regular copies of
confirmations and statements directly to the Ethics Office. These
confirmations and statements must include the trade date, security
description, number of shares or principal amount of each security,
the nature of the transaction (e.g., purchase or sale), the total
price and the name of the institution that effected the transactions.
If transactions cannot or are not reported by the external institution
in this fashion, permission to open the account will not be granted or
will be revoked by the Ethics Office.
c) Failure to Report by External Brokers. As noted above, employees
are responsible for ensuring their transactions in reportable
securities not conducted through a FBSI account are reported to the
Ethics Office. If you have executed transactions through an external
broker and the broker does not report the transactions as specified in
paragraph b) above, you must promptly forward the necessary
information to the Ethics Office. If account statements with the
necessary information are not available, you must complete the REPORT
OF SECURITIES TRANSACTIONS (Exhibit B) with the information and
forward it to the Ethics Office.
B. PROHIBITED ACTIVITIES
1. ACTIVITIES FOR PERSONAL BENEFIT. Inducing or causing a Fund to
take action, or to fail to take action, for personal benefit rather
than for the benefit of the Fund is prohibited. For example, you
would violate this Code by causing a Fund to purchase a security you
owned for the purpose of supporting or increasing the price of that
security. Causing a Fund to refrain from selling a security in an
attempt to protect a personal investment, such as an option on that
security, also would violate this Code.
2. PROFITING FROM KNOWLEDGE OF FUND TRANSACTIONS. Using your
knowledge of Fund transactions to profit by the market effect of such
transactions is prohibited.
3. VIOLATIONS OF THE ANTIFRAUD LAWS AND REGULATIONS. Violations of
the antifraud provisions of the federal securities laws and the rules
and regulations promulgated thereunder, including the antifraud
provision of Rule 17j-1 under the Investment Company Act of 1940, are
prohibited. In that Rule, the Securities and Exchange Commission
specifically makes it unlawful for any person affiliated with a Fund,
investment adviser or principal underwriter of a Fund in connection
with the purchase or sale, directly or indirectly, by such person of a
"security held or to be acquired" by such Fund:
"(1) To employ any device, scheme or artifice to defraud the Fund;
(2) To make any untrue statement of a material fact to the Fund or
omit to state a material fact necessary in order to make the
statements made to the Fund, in light of the circumstances under which
they are made, not misleading;
(3) To engage in any act, practice or course of business that operates
or would operate as a fraud or deceit upon the Fund; or
(4) To engage in any manipulative practice with respect to the Fund."
Rule 17j-1 defines "security held or to be acquired" very broadly to
include any security (other securities that are not reportable
securities) that, "within the most recent 15 days, (i) is or has been
held by such company, or (ii) is being or has been considered by such
company or its investment adviser for purchase by such company, and
(iii) any option to purchase or sell, and any security convertible
into or exchangeable for" a reportable security. Thus the antifraud
provisions of Rule 17j-1 may apply to transactions in securities even
if not recently traded by a Fund. Under Rule 17j-1, a sufficient
nexus exists if a fraud is effected in connection with a security held
for a long period in a portfolio or merely considered for inclusion in
a portfolio. In addition, the receipt of compensation in the form of
an opportunity to purchase a security that is intended to induce a
Fund to purchase other securities must be reported under this Rule,
whether or not the compensation is in the form of an opportunity to
purchase a security "held or to be acquired" by a Fund. Moreover, the
general antifraud provisions of the Securities Exchange Act of 1934
and other federal securities statutes make unlawful fraud in
connection with the purchase or sale of securities, even if such
securities do not fall within the scope of Rule 17j-1.
4. USE OF DERIVATIVES. Derivatives, including futures and options,
and other arrangements may not be used to evade the restrictions of
this Code. Accordingly, you may not use derivatives or other
arrangements with similar effects to take positions in securities that
the Code would prohibit if the positions were taken directly. For
purposes of this section, "futures" are futures on securities or
securities indexes; "options" are options (puts or calls) on
securities or securities indexes, or options on futures on securities
or securities indexes. Options and futures on commodities are not
"reportable securities" except as specified in Section III. A. 1. f).
5. GIFTS AND HOSPITALITIES. The Fidelity Companies generally prohibit
employees from receiving gifts, gratuities, and other from any person
or entity that does business with the Funds or with any Fidelity
Company or from any entity which is a potential portfolio investment
for the Funds. Fidelity's Gifts and Gratuities Policy, which is
separate from this Code, sets forth the specific policies,
restrictions and procedures to be observed by employees with respect
to business-related gifts and related matters.
6. RESTRICTED SECURITIES. From time to time, the Ethics Office may
place a security on a restricted list. Certain employees, as
designated on a case-by-case basis by the Ethics Office, may not
effect transactions in securities on the restricted list.
7. INVESTMENTS IN HEDGE FUNDS AND INVESTMENT CLUBS. You may not
invest in hedge funds or investment clubs because such funds or clubs
cannot normally be expected to comply with the provisions of this
Code.
C. RESTRICTED ACTIVITIES
The following are restricted by this Code of Ethics:
1. SHORT SALE ACTIVITIES. Purchasing puts to open, selling calls to
open or selling a security short where there is no corresponding long
position in the underlying security is prohibited; short sales against
the box are permitted. This prohibition includes purchasing puts and
selling calls on all market indexes with the exception of the
following indexes: S&P 100, S&P Mid Cap 400, S&P 500, Morgan Stanley
Consumer Index, FTSE 100 and Nikkei 225. Short sales of the Fidelity
Select Portfolios are also prohibited.
2. PUBLIC OFFERINGS FOR WHICH NO PUBLIC MARKET PREVIOUSLY EXISTED.
The purchase of an initial public offering of securities for which no
public market in the same or similar securities of that issuer has
previously existed is prohibited except as noted below. This
prohibition includes "secondary" public offerings (where the
securities are offered publicly by a substantial shareholder and not
from the company's treasury) and so-called "free stock offers" through
the Internet, and applies both to equity and debt securities.
EXCEPTIONS. Exceptions from this prohibition may be granted in
special circumstances with the written permission of the Ethics Office
(e.g., receipt of securities or their subsequent sale by an insurance
policyholder or depositor of a company converting from mutual to stock
form).
3. EXCESSIVE TRADING. While active personal trading does not in and
of itself raise issues under Rule 17j-1, the Fidelity Companies and
Boards of the Funds believe that a very high volume of personal
trading can be time consuming and can increase the possibility of
actual or apparent conflicts with portfolio transactions.
Accordingly, an unusually high level of personal trading activity is
strongly discouraged and may be monitored by the Ethics Office to the
extent appropriate for the category of person, and a pattern of
excessive trading may lead to the taking of appropriate action under
the Code.
4. DISCRETIONARY AUTHORIZATION. You may not exercise investment
discretion over accounts in which you have no beneficial interest. If
you wish to do so, you must contact the Ethics Office for approval.
IV. ADDITIONAL REQUIREMENTS APPLICABLE TO ACCESS PERSONS
Because of their access to information about Fund investments and/or
investment recommendations, Access Persons are necessarily subject to
somewhat greater restrictions and closer scrutiny than are other
persons subject to the Code. Accordingly, in addition to complying
with the provisions detailed in Section III of this Code, Access
Persons are required to comply with the provisions of this section.
A.DISCLOSURE OF PERSONAL SECURITIES HOLDINGS.
Access Persons must disclose in writing all personal securities
holdings owned directly or otherwise beneficially owned. (See Exhibit
F.)
1. INITIAL REPORT. Each new Access Person must file a holdings
disclosure within 7 days of the commencement of employment or of being
designation an Access Person.
2. ANNUAL REPORT. Each Access Person must file a holdings report
containing current information as of a date no more than 30 days
before the report is submitted.
B. ALL PERSONAL TRADES IN REPORTABLE SECURITIES MUST BE CLEARED IN
ADVANCE BY THE APPROPRIATE PRE-CLEARANCE DESK.
One of the most important objectives of this Code is to prevent Access
Persons from making personal trades on the basis of information about
portfolio transactions made by the Funds. Trading on such information
for personal benefit not only constitutes a violation of this Code,
but also may influence the market in the security traded and thus
prevent transactions for the Funds from being conducted at the most
favorable price. To further reduce the possibility that Fund
transactions will be affected by such trades, Access Persons must
comply with the following procedures before effecting a personal
transaction in any securities which are "reportable securities":
1. PRE-CLEARANCE PROCEDURES.
a) On any day that you plan to trade a reportable security, you must
first contact the appropriate pre-clearance desk for approval. (See
Exhibit H.) (PLEASE NOTE THAT PRE-CLEARANCE COMMUNICATIONS MAY BE
RECORDED FOR THE PROTECTION OF FIDELITY AND ITS EMPLOYEES.) By
seeking pre-clearance, you will be deemed to be advising the Ethics
Office that you (i) do not possess any material, nonpublic information
relating to the security; (ii) are not using knowledge of any proposed
trade or investment program relating to the Funds for personal
benefit; (iii) believe the proposed trade is available to any market
participant on the same terms; and (iv) will provide any other
relevant information requested by the Ethics Office. The pre-clearance
desk will consider approval of the trade for execution only upon the
day the request is made. Generally, a pre-clearance request will not
be approved if the pre-clearance desk determines that the trade will
have a material influence on the market for that security or will take
advantage of, or hinder, trading by the Funds. Additionally, the
pre-clearance desk will evaluate a pre-clearance request for a
transaction to determine if you are in compliance with the other
provisions of the Code relevant to such transaction. Securities and
transaction types that do not require pre-clearance include the
following: currency warrants; rights subscriptions; gifting of
securities; automatic dividend reinvestments; and options on the
following indexes: S&P 100, S&P Mid Cap 400, S&P 500, Morgan Stanley
Consumer Index, FTSE 100 and Nikkei 225.
b) Transactions in accounts beneficially owned by an employee where
investment discretion has been provided to a third party in a written
document and for which the employee provides no input regarding
investment decision making will not be subject to pre-clearance.
Transactions in reportable securities in such accounts, however, still
must be reported under this Code.
c) In addition to any other sanctions provided for under the Code (see
Section IX. D.), failure to pre-clear a transaction as required above
may result in a requirement to surrender any profits realized in
connection with the transaction.
C. GOOD-TILL-CANCELED ORDERS.
Access Persons may not place good-till-canceled orders.
Good-till-canceled orders may inadvertently cause an employee to
violate the pre-clearance provisions of this Code.
D. PURCHASE OF CLOSED-END FUNDS.
The purchase of closed-end funds for which a Fidelity Company performs
the pricing and bookkeeping services is prohibited without prior
approval by the Ethics Office.
V.ADDITIONAL REQUIREMENTS APPLICABLE TO INVESTMENT PROFESSIONALS AND
SENIOR EXECUTIVES
In addition to complying with the provisions detailed in Sections III
and IV of this Code, Investment Professionals and Senior Executives
are required to comply with the provisions of this section.
A. PRIVATE PLACEMENTS.
Private placements are in many cases not suitable investments for the
Funds. However, in various circumstances, they may be suitable
investments. In order to avoid even the appearance of a conflict of
interest between their personal investment activities and their
fiduciary responsibility to the Funds' shareholders, Investment
Professionals and Senior Executives must follow the procedures
outlined below to participate in a private placement.
1. PRIOR APPROVAL TO PARTICIPATE.
You must receive written approval from your Division or Department
Head and the Ethics Office, utilizing Exhibit C, prior to any purchase
of a privately placed security. If you are a Division or Department
Head, then approval shall be received from the President of FMR. (See
Exhibit C.)
2. TRANSACTION REPORTING.
If approved, you must report the purchase to the Ethics Office within
10 days of the end of the month in which the purchase occurred, using
the REPORT OF SECURITIES TRANSACTIONS form (Exhibit B.).
3. IN THE EVENT OF SUBSEQUENT INVESTMENT BY A FUND OR FUNDS.
After approval is granted, if you have any material role in subsequent
consideration by any Fund of an investment in the same or an
affiliated issuer, you must disclose your interest in the private
placement investment to the person(s) making the investment decision.
Notwithstanding such a disclosure, any decision by any Fund to
purchase the securities of the issuer, or an affiliated issuer, must
be subject to an independent review by your Division or Department
Head.
B. SURRENDER OF SHORT-TERM TRADING PROFITS.
Short-term trading can be both time consuming and can increase the
possibility of actual or apparent conflicts with Fund transactions.
To reduce instances of short-term trading, the Fidelity Companies and
the Boards of the Funds have determined that Investment Professionals
and Senior Executives will be required to surrender short-term trading
profits.
Short-term trading profits are profits generated from the purchase and
sale of the same (or equivalent) security within 60 calendar days.
Transactions will be matched with any opposite transaction within the
most recent 60 calendar days. Options on the following indexes are
not subject to this provision: S&P 100, S&P Mid Cap 400, S&P 500,
Morgan Stanley Consumer Index, FTSE 100 and Nikkei 225. Exhibit D
contains further information and examples concerning application of
this policy.
C. PURCHASE OF SECURITIES OF CERTAIN BROKER-DEALERS.
Investment Professionals and Senior Executives, unless specifically
excluded by the Ethics Office, may not purchase securities of certain
broker-dealers or parent companies as identified from time to time by
the Ethics Office based upon the level and nature of services provided
to the Funds.
D. RESEARCH NOTES.
Investment Professionals and Senior Executives specifically designated
by the Ethics Office must wait two business days after the day on
which a research note is issued prior to trading for their
beneficially owned accounts in the securities of the issuer(s) that is
the subject of the note.
E. AFFIRMATIVE DUTY TO RECOMMEND SUITABLE SECURITIES.
A portfolio manager or a research analyst may not fail to timely
recommend a suitable security to, or purchase or sell a suitable
security for, a Fund in order to avoid an actual or apparent conflict
with a personal transaction in that security. Before trading any
security, a portfolio manager or research analyst has an affirmative
duty to provide to Fidelity any material, public information that
comes from the company about such security in his or her possession.
As a result, portfolio managers or research analysts should (a)
confirm that a Research Note regarding such information on such
security is on file prior to trading in the security, or (b) if not,
should either contact the Director of Research or publish such
information in their possession and wait two business days prior to
trading in the security.
F. AFFIRMATIVE DUTY TO DISCLOSE.
Investment Professionals and Senior Executives who own a security, or
who have decided to effect a personal transaction in a security, have
an affirmative duty to disclose this information in the course of any
communication about that security when the purpose or reasonable
consequence of such communication is to influence a portfolio to buy,
hold or sell that security. The disclosure of ownership should be
part of the initial communication but need not be repeated in the case
of continuing communications directed to a specific person.
G. SERVICE AS A DIRECTOR OR TRUSTEE.
Service on a board of directors or Trustees poses several forms of
potential conflicts for employees. These include potentially
conflicting fiduciary duties to the company and a Fund, receipt of
possibly material, nonpublic information and conflicting demands on
the time of the employee. Accordingly, service by any Investment
Professional or Senior Executive on a board of directors of a
non-Fidelity publicly-traded or privately-held company likely to issue
shares is prohibited absent prior authorization. Approval will be
based upon a determination that the board service would be in the best
interests of the Funds and their shareholders. Requests for approval
of board service should be submitted in writing to the Ethics Office.
VI. PROHIBITION ON CERTAIN TRADES BY PORTFOLIO MANAGERS
Portfolio managers are the people most familiar with the investment
decisions they are making for the Funds they manage. Even the
appearance of a portfolio manager trading the same securities for his
or her personal account on or about the same time as he or she is
trading for the Fund is not in the best interest of the Funds.
Accordingly, as a portfolio manager, you may not buy or sell a
security your Fund has traded within 7 calendar days on either side of
the Fund's trade date (i.e., date of execution, not the settlement
date). For example, assuming the day your Fund trades a security is
day 0, day 8 is the first day you may trade that security for your own
account. This prohibition is in addition to the restrictions that
apply generally to all persons subject to this Code and those
applicable to Access Persons. If application of this rule would work
to the disadvantage of a Fund (e.g., you sold a security on day 0 and
on day 3, after new events had occurred, determined that the Fund
should buy the same security) you must apply to the Ethics Officer for
an exception (see Section VIII. below).
In addition to any other sanction provided for under the Code of
Ethics (see Section IX. D.), any profit realized from a transaction
within the prescribed period may be required to be surrender to FMR.
Transactions in accounts beneficially owned by you where investment
discretion has been provided to a third party in a written document
and for which you provide no input regarding investment decision
making will not be subject to this 7 day provision.
VII. NON-ACCESS TRUSTEES
Pursuant to Rule 17j-1, a Non-Access Trustee need not file reports of
his or her transactions in reportable securities unless at the time of
the transaction the Board member knew, or in the ordinary course of
fulfilling his or her duties as a Fidelity Fund Board member should
have known: (a) that one or more of the Funds had purchased or sold or
was actively considering the purchase or sale of that security within
the 15-day period preceding the Board member's transaction, or (b)
that one or more Funds would be purchasing, selling or actively
considering the purchase or sale of that security within the 15 days
following the Board member's transaction. The knowledge in question
is the Board member's knowledge at the time of the Board member's
transaction, not knowledge subsequently acquired. Although a
Non-Access Trustee is not required to report transactions unless the
above conditions are met, the Boards of Trustees of the Funds have
adopted a policy that requires a Non-Access Trustee to report personal
securities transactions on at least a quarterly basis.
VIII. WAIVERS AND EXCEPTIONS
A. REQUESTS TO WAIVER A PROVISION OF THE CODE OF ETHICS.
An employee may request in writing to the Ethics Office a waiver of
any Code of Ethics provision. If appropriate, the Ethics Office will
consult with the Ethics Oversight Committee (a committee which
consists of representatives from senior management) in considering
such request. The Ethics Office will inform you in writing whether or
not the waiver has been granted. If you are granted a waiver to any
Code of Ethics provision, you will be expected to comply with all
other provisions of the Code. You may contact the Ethics Office for
specific requirements.
B. EXCEPTIONS.
Special approval to make any trade prohibited by this Code may be
sought from the Ethics Office. Special approvals will be considered
on a case-by-case basis. The decision to grant special approval will
be based on whether the trade is consistent with the general
principles of this Code and whether the trade is consistent with the
interest of the relevant Fund(s). The Ethics Office will maintain a
written record of exceptions, if any, that are permitted.
IX. ENFORCEMENT
The Rules adopted by the SEC require that a code of ethics must not
only be adopted but must also be enforced with reasonable diligence.
Records of any violation of the Code and of the actions taken as a
result of such violations will be kept.
A. REVIEW.
The Ethics Office will review on a regular basis the reports filed
pursuant to this Code. In this regard, the Ethics Office will give
special attention to evidence, if any, of potential violations of the
antifraud provisions of the federal securities laws or the procedural
requirements or ethical standards set forth in this Code and the
Statement of Policies and Procedures with Respect to the Flow and Use
of Material Nonpublic (Inside) Information ("Insider Trading Policy
Statement" to follow).
The policies and procedures described in this Code do not create any
obligations to any person or entity other than the Fidelity Companies
and the Funds. This Code is not a promise or contract, and it may be
modified at any time. The Fidelity Companies and the Funds retain the
discretion to decide whether this Code applies to a specific
situation, and how it should be interpreted.
B. BOARD REPORTING.
The Ethics Office will provide to the Boards of Trustees of the Funds
no less frequently than annually a summary of significant sanctions
imposed for material violations of this Code or the Insider Trading
Policy Statement.
C. VIOLATIONS.
When potential violations of the Code of Ethics or the Insider Trading
Policy Statement come to the attention of the Ethics Office, the
Ethics Office may investigate the matter. This investigation may
include a meeting with the employee. Upon completion of the
investigation, if necessary, the matter will be reviewed with senior
management or other appropriate parties, and a determination will be
made as to whether any sanction should be imposed as detailed below.
The employee will be informed of any sanction determined to be
appropriate.
D. SANCTIONS.
Since violations of the Code or the Insider Trading Policy Statement
will not necessarily constitute violations of federal securities laws,
the sanctions for violations of the Code or the Insider Trading Policy
Statement will vary. Sanctions may be issued by (i) the appropriate
Board(s) of Trustees of the Fund(s) or Fidelity Company, (ii) senior
management, (iii) the Ethics Office, or (iv) other appropriate entity.
Sanctions may include, but are not limited to, (i) warning, (ii) fine
or other monetary penalty, (iii) personal trading ban, (iv) dismissal,
and (v) referral to civil or criminal authorities. Additionally,
other legal remedies may be pursued.
E. APPEALS PROCEDURES.
If you feel that you are aggrieved by any action rendered with respect
to a violation of the Code of Ethics or a waiver request, you may
appeal the determination by providing the Ethics Office with a written
explanation within 30 days of being informed of such determination.
The Ethics Office will arrange for a review by senior management or
other appropriate party and will advise you whether the action will be
imposed, modified or withdrawn. During the review process, you will
have an opportunity to submit a written statement. In addition, you
may elect to be represented by counsel of your own choosing.
APPENDIX -- BENEFICIAL OWNERSHIP
As used in the Code of Ethics, beneficial ownership will be
interpreted using Section 16 of the Securities Exchange Act of 1934
("1934 Act") as a general guideline, except that the determination of
such ownership will apply to all securities, including debt and equity
securities. For purposes of Section 16, a beneficial owner means:
Any person who, directly or indirectly, through any contract,
arrangement, understanding, relationship, or otherwise, has or shares
a direct or indirect pecuniary interest in the securities.
In general, "pecuniary interest" means the opportunity, directly or
indirectly, to profit or share in any profit derived from a
transaction in the subject securities.
Using the above-described definition as a broad outline, the ultimate
determination of beneficial ownership will be made in light of the
facts of the particular case. Key factors to be considered are the
ability of the person to benefit from the proceeds of the security,
and the degree of the person's ability to exercise control over the
security.
1. SECURITIES HELD BY FAMILY MEMBERS. As a general rule, a person is
regarded as having an indirect pecuniary interest in, and therefore is
the beneficial owner of, securities held by any child, stepchild,
grandchild, parent, step-parent, grandparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law (collectively, "immediate family")
sharing the same household. Adoptive relationships are included for
purposes of determining whether securities are held by a member of a
person's immediate family.
2. SECURITIES HELD BY A CORPORATION OR SIMILAR ENTITY. A person shall
not be regarded as having a direct or indirect pecuniary interest in,
and therefore shall not be the beneficial owner of, portfolio
securities held by a corporation or similar entity in which the person
owns securities provided that (i) the person is not a controlling
shareholder of the entity or (ii) the person does not have or share
investment control over the entity's portfolio securities. "Portfolio
securities" means all securities owned by an entity other than
securities issued by the entity. Business trusts are treated as
corporations for these purposes. In addition, the 1934 Act makes no
distinction between public and private corporations for purposes of
determining beneficial ownership.
3. SECURITIES HELD IN TRUST. In general, a person's interest in a
trust will amount to an indirect pecuniary interest in the securities
held by that trust. However, the following persons shall generally
not be deemed beneficial owners of the securities held by a trust:
a) Beneficiaries, unless (i) the beneficiary has or shares investment
control with the trustees with respect to transactions in the trust's
securities, (ii) the beneficiary has investment control without
consultation with the trustee, or (iii) if the trustee does not
exercise exclusive investment control, the beneficiary will be the
beneficial owner to the extent of his or her pro rata interest in the
trust.
b) Trustees, unless the trustee has a pecuniary interest in any
holding or transaction in the securities held by the trust. A trustee
will be deemed to have a pecuniary interest in the trust's holdings if
at least one beneficiary of the trust is a member of the trustee's
immediate family.
c) Settlors, unless a settlor reserves the right to revoke the trust
without the consent of another person; provided, however, that if the
settlor does not exercise or share investment control over the
issuer's securities held by the trust the settlor will not be deemed
to be the beneficial owner of those securities.
Indirect pecuniary interest for purposes of Section 16 also includes a
general partner's proportionate interest in the portfolio securities
held by a general or limited partnership.
Finally, beneficial ownership is not deemed to be conferred by virtue
of an interest in:
a) portfolio securities held by any holding company registered under
the Public Utility Holding Company Act of 1935;
b) portfolio securities held by any investment company registered
under the Investment Company Act of 1940; or
c) securities comprising part of a broad-based publicly-traded market
basket or index of stocks approved for trading by the appropriate
federal governmental authority.
EXAMPLES OF BENEFICIAL OWNERSHIP
1. Securities Held by Family Members
(a) Example 1-A:
X and Y are married. Although Y has an independent source of income
from a family inheritance and segregates her funds from those of her
husband, Y contributes to the maintenance of the family home. X and Y
have engaged in joint estate planning and have the same financial
adviser. Since X and Y's resources are clearly significantly directed
towards their common property, they will be deemed to be beneficial
owners of each other's securities.
(b) Example 1-B:
X and Y are separated and have filed for divorce. Neither party
contributes to the support of the other. X has no control over the
financial affairs of his wife and his wife has no control over his
financial affairs. Neither X nor Y is a beneficial owner of the
other's securities.
(c) Example 1-C:
X's adult son Z lives in X's home. Z is self-supporting and
contributes to household expenses. X is a beneficial owner of Z's
securities.
(d) Example 1-D:
X's mother A lives alone and is financially independent. X has power
of attorney over his mother's estate, pays all her bills and manages
her investment affairs. X borrows freely from A without being
required to pay back funds with interest, if at all. X takes out
personal loans from A's bank in A's name, the interest from such loans
being paid from A's account. X is a significant heir of A's estate.
X is a beneficial owner of A's securities.
2. Securities Held by a Company
(a) Example 2-A:
O is a holding company with 5 shareholders. X owns 30% of the shares
in the company. X will be presumed to have beneficial ownership of
the securities owned by O.
3. Securities Held in Trust
(a) Example 3-A:
X is trustee of a trust created for his two minor children. When both
of X's children reach 21, each will receive an equal share of the
corpus of the trust. X is a beneficial owner of the securities in the
trust.
(b) Example 3-B:
X is trustee of an irrevocable trust for his daughter. X is a
director of the issuer of the equity securities held by the trust.
The daughter is entitled to the income of the trust until she is 25
years old, and is then entitled to the corpus. If the daughter dies
before reaching 25, X is entitled to the corpus. X should report the
holdings and transactions of the trust as his own.
Exhbit (p)(2)
CONFIDENTIAL INFORMATION, INSIDER TRADING AND RELATED MATTERS
Issue Date: September 1998
CONTENTS
LETTER TO ALL EMPLOYEES
INTRODUCTION
PROTECTING CONFIDENTIAL INFORMATION
The Basic Policy
Nature of Confidential Information
Safeguarding Documents and Files
Securing Communications
Temporary Staff and Outside Services
Client Confidentiality Agreements
Inquiries from Outside Parties
Customer Inquiries Regarding Investment Advice
Public Statements and Shareholder Communications
INSIDER TRADING AND CONFLICT OF INTEREST
The Basic Policy
Nature of Material Nonpublic Information
Insider Trading
"Frontrunning"
Dealing with Rumors
Unintentional Receipt of Confidential Information
Personal Securities Trading by Employees
SHARING INFORMATION WITHIN BANKERS TRUST - THE "CHINESE WALL"
The Basic Policy
The "Chinese Wall"
Crossing the Chinese Wall
Avoid Unintended "Backflow" of Information
Additional Walls
THE RESTRICTED LIST AND THE GRAY LIST
What Are the Restricted and Gray Lists?
Updates and Distribution of the Lists
Trading Restrictions - The Restricted List
Waivers and Exceptions to Trading Restrictions
OTHER MATTERS
The Compliance Department
Waivers and Exceptions
Confirming Your Compliance with Policies
If You Have Questions
PERSONAL SECURITIES TRANSACTIONS BY EMPLOYEES . . . . . . . . SEPARATE BOOKLET
(copyright) 1998 Bankers Trust Corporation
BANKERS TRUST
September 1998
To All Employees:
This is your personal copy of Bankers Trust's Employee Compliance
Guide, CONFIDENTIAL INFORMATION, INSIDER TRADING AND RELATED MATTERS.
These policies and procedures are designed to protect the Firm against
inadvertent leaks of sensitive data and possible violations of various
securities laws, as well as to protect the reputation of the Firm and
its employees. They are extremely important.
The policies and procedures described in this booklet are
comprehensive and are supported by three basic guiding principles:
1) Information that you receive as a Bankers Trust employee is
confidential and intended to be used solely for the business purposes
of the Firm or its clients. You must safeguard confidential
information at all times.
2) If you possess material nonpublic information about or affecting
securities or their issuer, you may not buy or sell such securities
regardless of the source of the information.
3) Whenever potential conflicts of interest arise, you should place
our fiduciary duty to clients ahead of Bankers Trust's immediate
interests, and you should place the interests of Bankers Trust ahead
of your personal financial interests.
Thank you for your attention to both the letter and spirit of these
standards of professional conduct. Should you ever have a question on
how to apply these policies to some event or circumstance, I encourage
you to seek the guidance of the Compliance Department.
Sincerely,
Frank Newman
Chairman and
Chief Executive Officer
INTRODUCTION
This policy statement, CONFIDENTIAL INFORMATION, INSIDER TRADING AND
RELATED MATTERS, applies worldwide to all employees of Bankers Trust
Corporation and its subsidiaries (referred to herein as "Bankers
Trust" or the "Firm"). For legal and business reasons, it is
essential that our clients, prospective customers and others are
confident that they can rely on our integrity and discretion to
protect and properly use the confidential information they entrust to
us.
Adhering to the policies and standards of conduct described in this
booklet is a condition of your employment with Bankers Trust. Failure
to comply with them may subject you to disciplinary action, including
possible dismissal and civil or criminal penalties. Also, if you
become aware of an apparent violation of these policies and procedures
by another employee, you must report the relevant facts to the
Compliance Department.
No written policy can anticipate every situation. Use common sense
and good judgment when responding to situations that may not be
specifically covered by these standards, and recognize when to seek
advice regarding their application.
PROTECTING CONFIDENTIAL INFORMATION
1. THE BASIC POLICY
Improper disclosure or misuse of confidential information is
prohibited. You are required to treat confidential information in a
responsible and proper manner, and in accordance with the policies and
procedures of Bankers Trust.
2. NATURE OF CONFIDENTIAL INFORMATION
Confidential information refers to business matters not generally
known or made available to the public. You should generally presume
that all business information acquired in connection with your
responsibilities at Bankers Trust regarding the Firm, its clients and
business transactions is confidential unless the contrary is clearly
evident. This includes proprietary information, products and
transactions developed or used by Bankers Trust as explained further
in the Firm's RULES FOR BUSINESS CONDUCT.
EXAMPLES OF CONFIDENTIAL INFORMATION
(solid bullet) a client's planned acquisition target or restructuring
plan;
(solid bullet) forthcoming investment research recommendations;
(solid bullet) information about a client's accounts or borrowings;
(solid bullet) proprietary or fiduciary trading positions and
strategies;
(solid bullet) customer, supplier, creditor and investor lists; and
(solid bullet) unannounced information about Bankers Trust's earnings
or transactions.
3. SAFEGUARDING DOCUMENTS AND FILES
When handling confidential information contained in written documents,
computer files or other modes of communication and storage, you have a
personal responsibility to protect it. Also, each department should
develop appropriate policies and procedures to properly protect
confidential information within its control.
RECOMMENDED PRACTICES TO SAFEGUARD CONFIDENTIAL DOCUMENTS AND FILES
(solid bullet) mark confidential documents as CONFIDENTIAL;
(solid bullet) prevent unrestricted copying of confidential documents
and keep track of copies made;
(solid bullet) shred confidential documents that are no longer needed;
(solid bullet) protect documents and files by using locked cabinets
and limiting computer access;
(solid bullet) use caution when carrying confidential documents and
files in public areas;
(solid bullet) keep desks and conference rooms clear;
(solid bullet) when appropriate, use code names to protect the
identities of participants in a transaction; and
(solid bullet) restrict access by visitors (including Bankers Trust
personnel from other departments) in areas where they can observe or
overhear confidential information.
4. SECURING COMMUNICATIONS
Avoid discussing confidential information in public areas such as
elevators, hallways, taxicabs, airplanes or restaurants where others
may be listening. Be careful when using speakerphones, cellular
phones, e-mail, the Internet and similar methods of communication
because conversations and messages can be overheard or intercepted.
Also, don't share information over the telephone until you have
identified the caller. When asked informally by friends or at social
gatherings about confidential matters concerning Bankers Trust, its
clients or others, as a general rule you should decline to comment.
THOSE "IN THE KNOW" CAN PROTECT THE FIRM, FAMILY AND FRIENDS - AND
THEMSELVES - BY KEEPING WORKPLACE INFORMATION AT THE WORKPLACE.
5. TEMPORARY STAFF AND OUTSIDE SERVICES
If consultants or temporary staff are utilized in your department,
exercise care to ensure they do not gain unauthorized access to or
mishandle confidential information. Also recognize that certain
functions or areas within Bankers Trust may be too sensitive to
entrust to temporary workers or outside service organizations. When
deemed appropriate by business line management or when required by
local regulations, outside personnel should sign a confidentiality
agreement (as approved by the Legal Department) to confirm their
awareness and understanding of the requirement to protect confidential
information and not misuse it.
6. CLIENT CONFIDENTIALITY AGREEMENTS
A confidentiality agreement with a client or a prospective customer
may impose additional obligations on the Firm with respect to
protecting confidential information. Business line management should
establish appropriate internal procedures and provide instructions to
employees to ensure compliance with its terms.
When initially drafted, some confidentiality agreements can be overly
broad in scope and could impair our ability to pursue other business
opportunities during or after the term of the agreement. Therefore,
the Legal Department should review confidentiality agreements prior to
being signed by a duly authorized department manager or their
designee.
7. INQUIRIES FROM OUTSIDE PARTIES
Unless specifically consented to by the customer, we generally do not
disclose any confidential information about our customer's dealings
with us to any outside party. An exception to this general rule
occurs when regulators and other proper legal authorities or process
require that we disclose specific information. Before releasing
information or taking any action, you should immediately report the
matter to your supervisor and seek the advice of either the Compliance
Department or the Legal Department.
Other financial institutions may ask that we respond to credit
inquiries concerning our dealings with existing or former customers.
To avoid potential liability, such responses should be limited to a
very narrow statement of objective factual matters known to us
directly and should never express an opinion as to the client's
creditworthiness or integrity. Also, no response to a credit inquiry
should be made without first obtaining the approval of a departmental
credit officer or an officer in the Credit Policy Department.
8. CUSTOMER INQUIRIES REGARDING INVESTMENT ADVICE
When appropriate in responding to a customer inquiry regarding
investment advice, departments engaged in investment research,
investment management or investment advisory functions should make
sure that their customers understand that we maintain a Chinese Wall
and that Bankers Trust personnel who make investment decisions or
recommendations cannot gain access to, nor benefit from, any
confidential information obtained by the Private Functions of the Firm
(see page 11).
9. PUBLIC STATEMENTS AND SHAREHOLDER COMMUNICATIONS
When Bankers Trust information is released to the public, it must be
accurate and disclosed in a proper way. Since a public statement made
by a Bankers Trust employee - even a statement that does not release
any confidential information - could embarrass the Firm or subject it
to liability, all contacts with shareholders and security analysts
should be cleared in advance with Corporate Affairs in New York.
All requests for speeches, interviews or comments for use in
broadcasts, newspapers, magazines or other media should be referred
to, or cleared by, Corporate Affairs (in the U.S. and Australia), the
designated Communications Officer (in London), Marketing Services (in
Asia) or the head of your Bankers Trust office (for all other
international locations). When practical, these departments should be
furnished with, and given an opportunity to comment on, the text or
outline of the statement or speech and responses to any likely
questions.
INSIDER TRADING AND CONFLICT OF INTEREST
1. THE BASIC POLICY
Trading securities or other financial instruments for the accounts of
Bankers Trust, its clients or for personal interests while you are in
possession of material nonpublic information about or affecting them
(regardless of how it was obtained) is prohibited. You are also
prohibited from disclosing material nonpublic information to third
parties except in accordance with the policies and procedures
described in this booklet or where disclosure is required by law.
Avoid situations that may appear to be a conflict of interest, let
alone any actual conflict, in both business and personal securities
transactions.
UNDER VARIOUS SECURITIES LAWS, VIOLATIONS MIGHT OCCUR IF YOU TRADE
SECURITIES (OR THEIR DERIVATIVES SUCH AS OPTIONS) WHILE IN POSSESSION
OF MATERIAL NONPUBLIC INFORMATION ABOUT THEM, OR DISCLOSE SUCH
INFORMATION TO THIRD PARTIES WHO, IN TURN, TRADE THOSE SECURITIES OR
DERIVATIVES. THE SECURITIES LAWS OF VARIOUS JURISDICTIONS PROVIDE A
BROAD RANGE OF REMEDIES TO PROTECT AND MAINTAIN THE INTEGRITY OF THE
SECURITIES MARKETS. VIOLATION OF APPLICABLE INSIDER TRADING LAWS AND
REGULATIONS COULD SUBJECT YOU TO SUBSTANTIAL CIVIL OR CRIMINAL
PENALTIES.
2. NATURE OF MATERIAL NONPUBLIC INFORMATION
Material nonpublic information (also known as price sensitive
information in some jurisdictions) refers to confidential information
about or affecting a particular issuer or its securities that is not
generally known to the investing public and a reasonable investor
would likely consider important when making an investment decision.
While no single rule can define whether a particular item is in fact
material, information that, if known to the public, would likely
affect the price of a publicly traded security (or would likely
influence decisions to buy, sell or hold a security) has a high
probability of being material.
EXAMPLES OF NONPUBLIC INFORMATION ABOUT ISSUERS LIKELY TO BE MATERIAL
(solid bullet) knowledge of unannounced tender offers;
(solid bullet) plans to issue or redeem securities;
(solid bullet) new products or major contracts;
(solid bullet) liquidity problems or covenant defaults;
(solid bullet) significant management developments;
(solid bullet) estimates about revenues and earnings; and
(solid bullet) significant mergers, acquisitions or divestitures.
3. INSIDER TRADING
"Insiders" are persons who owe a fiduciary duty to a company's
stockholders and typically include a company's officers, directors and
employees. Insiders also may include a company's outside advisors,
bankers, lawyers, underwriters and printers when they receive material
nonpublic information about the company for a specific purpose.
As a Bankers Trust employee, you should generally assume that any
nonpublic information coming into your possession is material and you
may not trade in or recommend any related securities while in
possession of that information. Also, you may not disclose such
information to others (a practice generally referred to as "tipping")
since such conduct may be unethical and illegal. In fact, indirect
receipt of nonpublic information may subject you to these rules if you
knew, or should have known, that the information originated from the
company or from someone who had a duty not to disclose it.
THE SECURITIES LAWS GOVERNING INSIDER TRADING ARE COMPLEX AND
EVOLVING. YOU SHOULD CONSULT THE COMPLIANCE DEPARTMENT IF UNCERTAIN
WHETHER THE INFORMATION YOU POSSESS IS MATERIAL OR NONPUBLIC BEFORE
MAKING A PURCHASE, SALE OR RECOMMENDATION TO WHICH IT RELATES.
4. "FRONTRUNNING"
You are prohibited from buying or selling securities for the account
of Bankers Trust, as well as for your own account, on the basis of
your knowledge about our clients' trading positions, plans or
strategies, or our own forthcoming research recommendations.
5. DEALING WITH RUMORS
Various securities laws prohibit the circulation of rumors where the
underlying intent is to manipulate the price of publicly traded
securities. As a general rule, you should refrain from conveying
rumors to others. If you have reason to believe that a particular
rumor is being circulated to influence the market, you should report
the matter to the Compliance Department.
Securities trading on the basis of unsubstantiated rumors may subject
you or the Firm to regulatory scrutiny and possible civil or other
penalties. Keep in mind that recommendations and other statements to
clients must have a reasonable basis in fact. Contact your supervisor
if uncertain how to handle a particular rumor.
6. UNINTENTIONAL RECEIPT OF CONFIDENTIAL INFORMATION
Sometimes, confidential information is inadvertently or improperly
communicated to a person who should not have access to that
information. To help avoid this situation, you should clearly
describe your position at the Firm when calling on clients, prospects
and in general discussions with others.
CONTACT THE COMPLIANCE DEPARTMENT IMMEDIATELY IF YOU INADVERTENTLY OR
IMPROPERLY RECEIVE NONPUBLIC INFORMATION THAT MAY BE MATERIAL TO
DETERMINE WHAT ACTION, IF ANY, IS APPROPRIATE IN THE CIRCUMSTANCES.
7. PERSONAL SECURITIES TRADING BY EMPLOYEES
You must always avoid any actual or potential conflicts of interest
between your Bankers Trust duties and responsibilities, and your
personal investment activities. Restrictions that pertain to personal
securities transactions by employees, including opening and
maintaining Employee Related Accounts (as defined) and the requirement
to pre-clear personal securities transactions, are described in a
separate booklet that supplements this policy statement entitled
PERSONAL SECURITIES TRANSACTIONS BY EMPLOYEES.
SHARING INFORMATION WITHIN BANKERS TRUST - THE "CHINESE WALL"
1. THE BASIC POLICY
Absent appropriate consent, confidential and material nonpublic
information, whether relating to Bankers Trust, its clients or others,
should not be disclosed to anyone other than relevant Bankers Trust
personnel, the Firm's outside lawyers, advisors and accountants, and
where appropriate concerning a transaction, the participants in the
transaction. You are permitted to share confidential information
within Bankers Trust only when the communication observes our Chinese
Wall policies and procedures, it complies with our duty of
confidentiality owed to clients and the recipient of the information:
(solid bullet) has a legitimate need to know the information in
connection with his or her Bankers Trust duties;
(solid bullet) has no responsibilities, whether to Bankers Trust, its
clients or others, that are likely to give rise to conflict of
interest or a misuse of the information; and
(solid bullet) understands that the information is confidential, as
well as the limitations on further distribution of the information.
THIS POLICY IS EXTREMELY IMPORTANT. YOU MUST EXERCISE CAUTION BEFORE
SHARING CONFIDENTIAL INFORMATION AND, WHEN APPROPRIATE, VERIFY THE
IDENTITY OF THE RECIPIENT AND ASCERTAIN THAT HE OR SHE HAS A
LEGITIMATE NEED FOR THE INFORMATION AND HAS NO CONFLICTING DUTIES.
2. THE "CHINESE WALL"
Because Bankers Trust is a multi-faceted financial institution, some
areas of the Firm may have material nonpublic information about a
particular company while other areas of the Firm may wish to buy, sell
or recommend that company's securities. The controls provided by our
"Chinese Wall" policies and procedures allow us to engage in these
diverse activities without violating the law or breaching our
fiduciary responsibilities.
The Chinese Wall separates the "Private" areas of the Firm ("Potential
Insider Functions") that are likely to come into possession of
material nonpublic information in the ordinary course of business from
the "Public" areas of the Firm ("Trading and Advising Functions") that
trade securities or other instruments for our own account or for the
accounts of others, or that render investment advice. Generally,
material nonpublic information obtained by anyone who works in the
Potential Insider Functions should not be communicated to anyone
outside those functions, and particularly must not be communicated to
anyone in the Firm's Trading or Advising Functions.
PRIVATE FUNCTIONS
Examples include:
(solid bullet) mergers, acquisitions and corporate advisory;
(solid bullet) commercial lending and credit;
(solid bullet) corporate finance; and
(solid bullet) corporate trust.
PUBLIC FUNCTIONS
Examples include:
(solid bullet) trading, sales and funding;
(solid bullet) brokerage;
(solid bullet) investment management; and investment research.
Employees assigned to certain infrastructure and control groups, such
as Operations and Product Controllers, may obtain confidential
information while conducting their normal activities. In addition,
members of senior management and the Compliance, Legal, Audit and
Credit departments are generally considered "above the Chinese Wall"
and therefore have ready access to confidential information. If you
are a member of one of these groups or a similar function within the
Firm, be careful to avoid any improper disclosure of confidential
information, particularly with respect to personnel on the "Public"
side of the Chinese Wall.
3. CROSSING THE CHINESE WALL
In limited situations, communicating material nonpublic information to
a person involved in a Trading or Advising Function may be necessary
to achieve a legitimate business purpose. For example, an investment
research analyst's expertise in a particular industry may be necessary
concerning a proposed corporate finance transaction.
UNLESS THE COMPLIANCE DEPARTMENT HAS EXPRESSLY APPROVED A PARTICULAR
DEPARTMENT'S PROCEDURES FOR CONDUCTING CHINESE WALL CROSSINGS, ANY
COMMUNICATION OF MATERIAL NONPUBLIC INFORMATION FROM THE "PRIVATE"
SIDE OF THE CHINESE WALL TO AN EMPLOYEE ON THE "PUBLIC" SIDE OF THE
CHINESE WALL MUST BE HANDLED THROUGH THE COMPLIANCE DEPARTMENT.
FURTHER, FOR DEPARTMENTS THAT DO NOT HAVE APPROVED PROCEDURES, THE
COMPLIANCE DEPARTMENT MUST BE NOTIFIED REGARDING THE PROPOSED
COMMUNICATION PRIOR TO INITIATING ANY CONTACT WITH THE EMPLOYEE.
You should contact the Compliance Department if uncertain whether a
proposed communication of material nonpublic information is
permissible. Also, the Compliance Department should be notified
immediately if you believe such information may have been improperly
communicated either within Bankers Trust or elsewhere.
4. AVOID UNINTENDED "BACKFLOW" OF INFORMATION
In principle, the Chinese Wall need not inhibit the flow of
information from the "Public" side to the "Private" side of the Wall.
Communication of this type, however, may cause an unintended
"backflow" of confidential information. For example, a request for
public information on a particular company by a mergers and
acquisitions specialist (Private Function) to an investment research
analyst (Public Function) may provide the research analyst a hint as
to a possible material development.
All unnecessary business communications (in either direction) between
the Private Functions and Public Functions should be avoided and care
must be exercised whenever an employee engaged in a Private Function
deems it necessary to obtain information from an employee in a Public
Function. Questions in this regard should be directed to the
Compliance Department.
5. ADDITIONAL WALLS
Beyond the Chinese Wall described above, we often establish other
walls - some temporary and some permanent - to insulate confidential
information held within certain business lines from other personnel
who should not have access to that information.
EXAMPLES OF ADDITIONAL WALLS
(solid bullet) While our research functions that publish investment
recommendations for distribution to the public are generally
considered to be on the "Public" side of the Chinese Wall, information
such as an analyst's plan to significantly change an existing
recommendation regarding particular securities is confidential and
should generally not be disclosed to personnel in the Firm's trading
and sales functions (unless prior approval has been obtained from the
Compliance Department) until such research is released to customers.
(solid bullet) Investment management personnel who become aware of a
significant client investment plan that will likely affect market
prices should not reveal the plan to personnel who handle Bankers
Trust's proprietary trading and investing.
(solid bullet) In the lending areas of the Firm, information relating
to a proposed loan to one company should be insulated from personnel
working on a proposed loan to another company if the two companies are
competing to acquire the same target company.
THE RESTRICTED LIST AND THE GRAY LIST
1. WHAT ARE THE RESTRICTED AND GRAY LISTS?
For legal, regulatory and business reasons, the Compliance Department
maintains a Restricted List and a Gray List of securities. Securities
may be placed on these lists when certain conditions are met, such as
when a business area within Bankers Trust:
(solid bullet) possesses material nonpublic information about or
affecting the securities or their issuer;
(solid bullet) is involved in a securities offering or significant
transaction affecting the securities or their issuer; or
(solid bullet) may be issuing to the public a significant change in
the Firm's investment recommendation regarding certain securities or
issuers.
The Restricted List is comprised of securities in which the normal
trading or recommending activity of the Firm and its employees is
prohibited or subject to specified restrictions as described in the
List. While the Restricted List is distributed quite extensively
within Bankers Trust, its composition is generally considered
confidential and should not be shared with others outside of the Firm.
In response to any inquiry, you should reply simply that we are not
able to take a position or make a recommendation regarding the
particular security at this time.
The Gray List is a highly confidential list maintained by the
Compliance Department to check the integrity of the Chinese Wall, and
to prevent or address potential conflicts of interest concerning
trading decisions and investment recommendations. Securities may be
placed on the Gray List when the Firm is involved in an unannounced
material transaction, or for other confidential monitoring purposes.
2. UPDATES AND DISTRIBUTION OF THE LISTS
The Compliance Department determines when securities should be added
to or removed from both the Restricted List and Gray List and
distributes the Restricted List to appropriate personnel within the
Firm. Business line management of the various Private Functions is
responsible for informing and updating the Compliance Department
concerning details of the Firm's involvement in certain confidential
transactions.
Certain business units that are routinely involved in the Firm's
investment banking and advisory businesses follow specific procedures
for providing deal information to the Compliance Department. If you
are assigned to a department that does not have such procedures and
you become aware of material nonpublic information about or affecting
a publicly traded company or its securities, you should immediately
notify the Compliance Department.
3. TRADING RESTRICTIONS - THE RESTRICTED LIST
Personnel in the Firm's Public Functions, such as trading and sales,
investment management and investment research, must refer to the
Restricted List regularly and comply with its trading restrictions.
Generally, the trading restrictions may limit or prohibit:
(solid bullet) transactions involving securities on the Restricted
List in the accounts of Bankers Trust, its employees and its
customers; and
(solid bullet) solicitation and investment advising activities, such
as commenting about, recommending or soliciting orders involving
securities on the Restricted List, or issuing research regarding such
securities.
Trading restrictions may apply to customer accounts where Bankers
Trust exercises investment discretion, but do not generally apply to
unsolicited customer trades executed on an "agency" basis (i.e., where
the Firm is not acting as principal). Special rules apply to customer
and proprietary accounts connected with certain defined index, passive
or basket trading strategies where a transaction involving securities
on the Restricted List is dictated by contract or predetermined
formula. Additional information about these special rules can be
obtained from the Compliance Department.
The Restricted List describes the various types of trading
restrictions imposed on Bankers Trust and its employees in light of
certain legal, regulatory and business requirements.
TRADING RESTRICTIONS -
THE RESTRICTED LIST
FULL RESTRICTION
When securities are subject to "Full Restriction," the following
activities with respect to such securities are generally PROHIBITED:
(solid bullet) trading for the Firm's proprietary account;
(solid bullet) trading for Employee Related Accounts;
(solid bullet) trading for customer accounts over which Bankers Trust
exercises investment discretion;
(solid bullet) basket trading for an account, such as an index fund,
where the transaction is dictated by a contract or predetermined
formula;
(solid bullet) market making activities;
(solid bullet) solicitation of customer orders;
(solid bullet) issuance or distribution of written research or
rendering oral recommendations; and
(solid bullet) execution of unsolicited customer orders, unless such
orders are executed on an "agency" basis only.
NOTE: For securities not subject to "Full Restriction," the Restricted
List identifies which of the above specific activities are prohibited.
4. WAIVERS AND EXCEPTIONS TO TRADING RESTRICTIONS
Waivers and exceptions to any trading restrictions identified on the
Restricted List require the specific prior approval of the Compliance
Department. Violation of the trading restrictions could subject the
Firm and the employee involved to civil or criminal penalties, as well
as other disciplinary actions.
OTHER MATTERS
1. THE COMPLIANCE DEPARTMENT
As used in this policy statement, the "Compliance Department" refers
to the Bankers Trust Compliance Department and the BTAL Compliance
Department.
The Bankers Trust Compliance Department is organized generally by U.S.
business lines and regionally for Asia, Europe/Middle East/Africa and
Latin America, and is comprised of the following groups:
(solid bullet) Broker-Dealer Compliance (including Latin America);
(solid bullet) Fiduciary Compliance;
(solid bullet) Corporate Compliance; and
(solid bullet) Europe & Asia Regional Compliance.
The BTAL Compliance Department is organized generally by business
lines in Australia and New Zealand.
2. WAIVERS AND EXCEPTIONS
Bankers Trust policies regarding confidential information, insider
trading and related matters as described in this booklet are
necessarily a general summary. In practice, some situations may arise
that warrant making exceptions to some general rules set forth herein,
and you must obtain approval from the Compliance Department before
taking action regarding such an exception.
3. CONFIRMING YOUR COMPLIANCE WITH POLICIES
Annually, you are required to sign a statement as a Bankers Trust
employee acknowledging that you have received this policy statement
CONFIDENTIAL INFORMATION, INSIDER TRADING AND RELATED MATTERS and
confirm your adherence to Bankers Trust's standards of conduct.
4. IF YOU HAVE QUESTIONS
You should refer to the Compliance Department all questions concerning
the interpretation or application of these policies, the propriety of
any particular conduct, or other compliance-related matters.
NOTE -- REFER TO PERSONAL SECURITIES TRANSACTIONS BY EMPLOYEES, A
SEPARATE BOOKLET THAT SUPPLEMENTS THIS POLICY STATEMENT, FOR
ADDITIONAL INFORMATION REGARDING OPENING AND MAINTAINING EMPLOYEE
RELATED ACCOUNTS (AS DEFINED), PRE-CLEARANCE OF TRADES AND OTHER RULES
AND RESTRICTIONS REGARDING PERSONAL SECURITIES TRANSACTIONS BY
EMPLOYEES.
Exhibit (p)2)
PERSONAL SECURITIES TRANSACTIONS BY EMPLOYEES
Issue Date: September 1998
CONTENTS
INTRODUCTION
SUMMARY
OPENING AND MAINTAINING EMPLOYEE RELATED ACCOUNTS
The Basic Policy
Employee Related Accounts Defined
"Designated Broker" Rule
Waivers to the Designated Broker Rule
Monitoring Employee Related Accounts
PRE-CLEARING TRANSACTIONS IN EMPLOYEE RELATED ACCOUNTS
The Basic Policy
Pre-Clearance Procedures
Additional Supervisory Pre-Clearance
Private Securities Transactions
RESTRICTIONS REGARDING PERSONAL SECURITIES TRANSACTIONS
The Basic Policy
Material Nonpublic Information
Corporate and Departmental Restricted Lists
"Frontrunning"
Employee Transactions in Bankers Trust Securities
Avoiding Conflicts with Your Bankers Trust Job Responsibilities
Initial Public Offerings and New Issues
OTHER MATTERS
Waivers and Exceptions
Confirming Your Compliance with Policies
If You Have Questions
NOTE: THE POLICIES CONTAINED IN THIS BOOKLET SHOULD BE READ IN
CONJUNCTION WITH THE POLICY STATEMENT CONFIDENTIAL INFORMATION,
INSIDER TRADING AND RELATED MATTERS.
(copyright) 1998 Bankers Trust Corporation
INTRODUCTION
This policy statement, PERSONAL SECURITIES TRANSACTIONS BY EMPLOYEES,
applies worldwide to all employees of Bankers Trust Corporation and
its subsidiaries (referred to herein as "Bankers Trust" or the
"Firm"). Along with the standards provided in this booklet, you
should be familiar with the contents of the Firm's related policy
statement CONFIDENTIAL INFORMATION, INSIDER TRADING AND RELATED
MATTERS.
As used in this Guide, "securities" transactions include those
involving equity or debt securities, derivatives of securities (such
as options, warrants and indexes), futures, commodities and similar
instruments.
You should always conduct your personal trading activities lawfully,
properly and responsibly, and are encouraged to adopt long-term
investment strategies that are consistent with your financial
resources and objectives. The Firm generally discourages short-term
trading strategies, and you are cautioned that such strategies may
inherently carry a higher risk of regulatory and other scrutiny. In
any event, excessive or inappropriate trading that interferes with
your job performance, or compromises the duty that Bankers Trust owes
to its clients and shareholders, will not be tolerated.
SUMMARY
This booklet is organized to help you comply with Bankers Trust's
policies and procedures, and to protect you and the Firm from
potential liability. In summary, the section entitled:
(solid bullet) OPENING AND MAINTAINING EMPLOYEE RELATED ACCOUNTS
describes the types of accounts you must disclose to the Compliance
Department upon joining the Firm and your requirement to obtain
explicit permission from the Compliance Department prior to opening
and maintaining Employee Related Accounts (as defined);
(solid bullet) PRE-CLEARING TRANSACTIONS IN EMPLOYEE RELATED ACCOUNTS
describes the procedures you must follow to pre-clear your personal
securities transactions with the Compliance Department before you
place any order with your broker; and
(solid bullet) RESTRICTIONS REGARDING PERSONAL SECURITIES TRANSACTIONS
describes certain trading prohibitions and procedures you must observe
to avoid violating the Firm's policies and various securities laws and
regulations.
Questions about this policy and the matters discussed herein should be
directed to your Compliance Officer or to the Compliance Department at
(212) 250-5812.
OPENING AND MAINTAINING EMPLOYEE RELATED ACCOUNTS
1. THE BASIC POLICY
All employees must obtain the explicit permission of the Compliance
Department prior to opening a new Employee Related Account. Upon
joining Bankers Trust, new employees are required to disclose all of
their Employee Related Accounts (as defined below) to the Compliance
Department and must carry out the instructions provided to conform
such accounts, if necessary, to the Firm's policies.
UNDER NO CIRCUMSTANCE ARE YOU PERMITTED TO OPEN OR MAINTAIN ANY
EMPLOYEE RELATED ACCOUNT THAT IS UNDISCLOSED TO THE COMPLIANCE
DEPARTMENT. ALSO, THE POLICIES, PROCEDURES AND RULES DESCRIBED
THROUGHOUT THIS GUIDE APPLY TO ALL OF YOUR EMPLOYEE RELATED ACCOUNTS.
2. EMPLOYEE RELATED ACCOUNTS DEFINED
"Employee Related Accounts" include all accounts in which you have an
ownership or beneficial interest (or can exercise investment
discretion or control) and have the capability of holding securities,
or in which securities transactions may be executed, even if the
accounts are inactive. Employee Related Accounts include:
(solid bullet) your own accounts;
(solid bullet) your spouse's accounts and the accounts of your minor
children and other relatives (whether by marriage or otherwise) living
in your home;
(solid bullet) accounts in which you, your spouse, your minor children
or other relatives living in your home have a beneficial interest; and
(solid bullet) accounts over which you or your spouse exercise
investment discretion or control.
ALTHOUGH THEY ARE SECURITIES IN THE TECHNICAL SENSE, MONEY MARKET
FUNDS AND OPEN-ENDED MUTUAL FUNDS HELD DIRECTLY WITH THE FUND OR ITS
TRANSFER AGENT ARE NOT CONSIDERED EMPLOYEE RELATED ACCOUNTS FOR THE
PURPOSES OF APPLYING THE ABOVE DEFINITION.
3. "DESIGNATED BROKER" RULE
Depending on your Bankers Trust location, you may be required to open
and maintain your Employee Related Accounts with a "Designated
Broker," which refers to brokerage firms specifically identified by
the Compliance Department for employee use. Employee Related Accounts
with the Designated Brokers must be opened in accordance with local
Compliance Department procedures.
Employees who wish to open and maintain an Employee Related Account in
the U.S. must do so with one of the following Designated Brokers:
(solid bullet) BT Alex. Brown Incorporated
(solid bullet) Quick & Reilly (Wall Street Office)
(solid bullet) Salomon Smith Barney (the Rasweiler Group, New York)
Information about opening such an account can be obtained from the
Compliance Department at (212) 250-5812.
Employees assigned to Bankers Trust offices outside the U.S. are
provided local guidelines regarding Designated Brokers (and
instructions about opening and maintaining Employee Related Accounts)
by Regional Compliance Groups for Asia, Australia/New Zealand,
Europe/Middle East/Africa and Latin America. You should contact your
Regional Compliance Officer if you have questions.
4. WAIVERS TO THE DESIGNATED BROKER RULE
In very limited situations, the Compliance Department may grant you
permission to open or maintain an Employee Related Account at a
brokerage firm other than a Designated Broker. Generally, such
permission is limited to the following types of situations:
(solid bullet) your spouse or close relative, by reason of employment,
is required by his or her employer to maintain their brokerage
accounts with a firm other than a Designated Broker; or
(solid bullet) your Employee Related Account is maintained on a
"discretionary" basis. This means that full investment discretion has
been granted to an outside bank, investment manager or trustee, and
neither you nor a close relative participates in the investment
decisions or is informed in advance regarding transactions in the
account.
An employee's request to the Compliance Department for an exemption to
the Designated Broker policy must be submitted in writing. If
permission is granted, duplicates of account statements and
transaction confirmations must be provided to the Compliance
Department. Your continued eligibility for an exception to the
Designated Broker policy is periodically reviewed and evaluated and
can be revoked at any time.
NOTE -- DO NOT OPEN AN ACCOUNT WITH ANOTHER BROKERAGE FIRM UNTIL YOU
RECEIVE AUTHORIZATION TO DO SO FROM THE COMPLIANCE DEPARTMENT.
5. MONITORING EMPLOYEE RELATED ACCOUNTS
To ensure adherence to Bankers Trust's policies, the Compliance
Department monitors transactions in Employee Related Accounts, whether
they are maintained with a Designated Broker or otherwise. If you
violate the Firm's policies and procedures as described herein, you
may be required to cancel, reverse or freeze any transaction or
position in your Employee Related Account at your expense, regardless
of where the account is held. Such action may be required without
advance notice.
PRE-CLEARING TRANSACTIONS IN EMPLOYEE RELATED ACCOUNTS
1. THE BASIC POLICY
You must contact the Compliance Department to pre-clear all
transactions involving securities or their derivatives in your
Employee Related Accounts (other than transactions involving only U.S.
Treasury securities or open-ended mutual funds) prior to placing an
order with your broker. You are personally responsible for ensuring
that your proposed transaction does not violate the Firm's policies or
applicable securities laws and regulations by virtue of your Bankers
Trust responsibilities or information you may possess about the
securities or their issuer.
2. PRE-CLEARANCE PROCEDURES
Proposed transactions in your Employee Related Accounts must be
personally pre-cleared with the Compliance Department. After
providing the requested information about the transaction, you will be
informed whether you have been granted permission to place the order
with your broker which is valid for the day given and the next
business day. If permission is denied to proceed with the proposed
transaction, such denial is confidential and should not be disclosed
to others.
For employees assigned to Bankers Trust offices in the U.S. and
Canada, securities transactions can be pre-cleared by contacting the
Compliance Department at (212) 250-5812.
Employees assigned to Bankers Trust offices outside of the U.S. and
Canada are provided local guidelines and contacts for pre-clearing
securities transactions by Regional Compliance Groups for Asia,
Australia/New Zealand, Europe/Middle East/Africa and Latin America.
You should contact your Regional Compliance Officer if you have
questions.
3. ADDITIONAL SUPERVISORY PRE-CLEARANCE
Depending on your area of assignment, you may be subject to additional
departmental policies that require you to first pre-clear your
proposed securities transaction with your supervisor prior to
requesting pre-clearance from the Compliance Department. If you are
assigned to one of the Bankers Trust departments in which employees
are subject to this requirement, you will be informed of this fact
when you contact the Compliance Department for pre-clearance.
4. PRIVATE SECURITIES TRANSACTIONS
Investment transactions in private securities, such as limited
partnerships or the securities of private companies, are likely to be
made directly with the sponsor and not executed in your Employee
Related Account. Prior to engaging in a private securities
transaction, you must first obtain the approval of your supervisor and
then pre-clear the transaction with the Compliance Department.
Private securities transactions that give rise to actual or apparent
conflicts of interest are prohibited.
RESTRICTIONS REGARDING PERSONAL SECURITIES TRANSACTIONS
1. THE BASIC POLICY
You have a personal obligation to conduct your investing activities
and related securities transactions lawfully and in a manner that
avoids actual or potential conflicts between your own interests and
the interests of Bankers Trust and its customers. You must carefully
consider the nature of your Bankers Trust responsibilities - and the
type of information you might be deemed to possess in light of any
particular securities transaction - before you engage in that
transaction.
2. MATERIAL NONPUBLIC INFORMATION
If you possess material nonpublic information about or affecting
securities, or their issuer, you are prohibited from buying or selling
such securities, or advising any other person to buy or sell such
securities.
3. CORPORATE AND DEPARTMENTAL RESTRICTED LISTS
You are not permitted to buy or sell any securities that are included
on the Corporate Restricted List and/or other applicable departmental
restricted lists.
4. "FRONTRUNNING"
You are prohibited from engaging in "frontrunning," which means that
you may not buy or sell securities or other instruments for your
Employee Related Accounts so as to benefit from your knowledge of the
Firm's or a client's trading positions, plans or strategies, or
forthcoming research recommendations.
5. EMPLOYEE TRANSACTIONS IN BANKERS TRUST SECURITIES
Bankers Trust recognizes the special interest many employees have in
investing in the securities of Bankers Trust Corporation. Observe,
however, that your employment relationship with the Firm gives rise to
special rules concerning such transactions to avoid potential
conflicts of interest.
A. TRANSACTIONS SUBJECT TO SPECIAL RULES
Personal trading activity in Bankers Trust Corporation securities that
are subject to special rules are generally transactions that change
your beneficial ownership interest, such as:
(solid bullet) purchases, sales or other transactions in Employee
Related Accounts;
(solid bullet) employee investment elections in Bankers Trust benefit
plans, such as investment elections affecting the Bankers Trust Common
Stock Fund in the PartnerShare Plan;
(solid bullet) exercise of Bankers Trust stock options granted as part
of an employee's compensation;
(solid bullet) optional cash purchases of common stock through Bankers
Trust's Dividend Reinvestment and Common Stock Purchase Plan; and
(solid bullet) gifts or donations of Bankers Trust Corporation stock
to charitable organizations, relatives or others.
B. SPECIAL RULES
The following special rules apply to all transactions that change your
beneficial ownership interest in the securities of Bankers Trust
Corporation:
(solid bullet) all employees must pre-clear transactions involving
Bankers Trust Corporation securities with Corporate Compliance in New
York (212) 250-5812, even if assigned to an office outside the U.S. or
Canada;
(solid bullet) Bankers Trust Corporation securities may not be pledged
or used as collateral for any loan except for a margin loan associated
with an Employee Related Account;
(solid bullet) any short sale of Bankers Trust Corporation securities
is prohibited;
(solid bullet) any transaction that involves options or warrants
referenced to Bankers Trust Corporation securities, other than
exercising stock options granted under a Bankers Trust incentive
compensation plan, is prohibited; and
(solid bullet) over-the-counter derivative transactions that are
referenced to the value of Bankers Trust Corporation securities are
prohibited.
C. "BLACKOUT" PERIODS
During certain times of the year, you are prohibited from conducting
transactions in Bankers Trust Corporation securities which affect your
beneficial interest in the Firm. These "blackout" periods surround
the end of each fiscal quarter or year and begin on the first day of
each calendar quarter and end 48 hours after public release of the
financial reports for the quarter or year.
ADDITIONAL RESTRICTED PERIODS MAY BE REQUIRED FOR CERTAIN INDIVIDUALS
AND EVENTS, AND YOU WILL BE INFORMED OF WHETHER SUCH A RESTRICTED
PERIOD IS IN EFFECT WHEN YOU REQUEST PRE-CLEARANCE OF YOUR PROPOSED
TRANSACTION INVOLVING BANKERS TRUST CORPORATION SECURITIES. ANY
QUESTIONS CONCERNING WHETHER YOU ARE SUBJECT TO ADDITIONAL
RESTRICTIONS SHOULD BE DIRECTED TO THE COMPLIANCE DEPARTMENT.
6. AVOIDING CONFLICTS WITH YOUR BANKERS TRUST JOB RESPONSIBILITIES
You are prohibited from buying, selling or holding positions in
securities and other instruments for your Employee Related Accounts
that give rise to a conflict of interest, or the appearance of
conflict, between your personal financial interests and your Bankers
Trust job responsibilities.
Following is a summary of the Firm's basic rules and procedures that
are designed to prevent actual or apparent conflicts of interest. If
you believe a proposed personal securities transaction may give rise
to a potential conflict of interest, or may not comply with the
following rules and procedures, you should resolve the matter with
your Compliance Officer before placing the order.
A. SECURITIES IN COMPANIES WITH WHICH YOU HAVE SIGNIFICANT DEALINGS
You are prohibited from buying or selling, for your Employee Related
Accounts, securities of companies with which you have significant
dealings on behalf of Bankers Trust, or for which you have ongoing
relationship management responsibilities on behalf of the Firm. This
rule applies to all employees who have significant dealings with the
Firm's customers, counterparties, suppliers or vendors. Also, you are
generally prohibited from acquiring an interest in any private equity
investment vehicle sponsored by such companies.
B. SECURITIES IN WHICH YOU HAVE TRADING OR TRADING-RELATED
RESPONSIBILITIES
To prevent actual or apparent conflicts of interest, employees with
"trading or trading-related responsibilities" with respect to
particular types of securities or instruments may be limited or
prohibited from buying or selling the same types of securities or
instruments for their Employee Related Accounts. Employees have
trading or trading-related responsibilities with respect to particular
types of securities or instruments if their duties:
(solid bullet) involve the Firm's proprietary dealing or investing
activities (e.g., where committing the Firm's capital may be
involved); and
(solid bullet) are associated with the origination, structuring,
trading, market making, positioning, bookrunning, distribution, sales,
research or analysis of particular types of securities or instruments.
If you have trading or trading-related responsibilities for equity
securities, investment grade debt securities or U.S. Government,
Government Agency or municipal securities (including derivatives
thereof), you are permitted to buy or sell such securities for your
Employee Related Accounts subject to compliance with certain
departmental guidelines that may require supervisory approval and
minimum holding periods.
If you have trading or trading-related responsibilities for
non-investment grade debt securities, commodities, futures, FX or
other instruments (including derivatives thereof), you are prohibited
from buying or selling the same type of securities or instruments for
your Employee Related Accounts.
C. PORTFOLIO MANAGERS, INVESTMENT ADVISORY PROFESSIONALS AND "ACCESS
PERSONS"
If you are a portfolio manager, investment advisory professional or
"access person" associated with the Firm's asset or funds management
businesses, you may be subject to certain rules designed to prevent
conflicts of interest. You can obtain more information about these
rules from your supervisor or the Compliance Department.
D. TRANSACTIONS SUBJECT TO MINIMUM HOLDING PERIODS
Securities bought or sold for your Employee Related Accounts may be
subject to a minimum holding period to address potential conflicts of
interest. Examples of the type of job functions and transactions that
typically require a minimum holding period include:
(solid bullet) equity securities bought or sold by an employee with
proprietary equity trading or trading-related responsibilities (60-day
holding period);
(solid bullet) certain debt securities bought or sold by an employee
with proprietary trading or trading-related responsibilities for U.S.
Government, Government Agency, municipal or investment-grade corporate
debt securities (60-day holding period);
(solid bullet) securities bought or sold by an equity research
analyst, falling within the research analyst's assigned industry group
(up to a six-month holding period); and
(solid bullet) securities bought or sold by employees assigned to most
Bankers Trust offices outside the U.S. (holding period varies by
region).
E. ADDITIONAL INTERNATIONAL PROCEDURES
Regional Compliance Groups for Asia, Australia/New Zealand,
Europe/Middle East/Africa and Latin America may modify the procedures
described in this section to reflect local market practices and
regulatory requirements. You should contact your Regional Compliance
Officer to obtain information about local modifications, if any, to
these requirements.
7. INITIAL PUBLIC OFFERINGS AND NEW ISSUES
For regulatory reasons, you are prohibited from purchasing or
subscribing for securities connected with an initial public offering
or a new issue where a U.S.-registered broker-dealer is involved in
the distribution, or where any part of the distribution is offered in
the U.S. This prohibition applies even if Bankers Trust has no role
or involvement in the distribution.
For initial public offerings and new issues of securities of non-U.S.
companies distributed entirely outside of the U.S., employees assigned
to international offices of Bankers Trust may be permitted to purchase
or subscribe for such securities, provided that the appropriate
Regional Compliance Group of the Compliance Department approves such
proposed transaction in advance. You should contact your Regional
Compliance Officer for local guidelines that apply.
OTHER MATTERS
1. WAIVERS AND EXCEPTIONS
Bankers Trust policies regarding personal securities transactions by
employees as described in this booklet is necessarily a general
summary. In practice, some situations may arise to warrant making
exceptions to some general rules set forth herein, and you must obtain
approval from the Compliance Department before taking action regarding
such an exception.
2. CONFIRMING YOUR COMPLIANCE WITH POLICIES
Annually, you are required to sign a statement as a Bankers Trust
employee acknowledging that you have received this supplement to the
policy statement CONFIDENTIAL INFORMATION, INSIDER TRADING AND RELATED
MATTERS and confirm your adherence to Bankers Trust's standards of
conduct.
3. IF YOU HAVE QUESTIONS
You should refer all questions concerning the interpretation or
application of these policies, the propriety of any particular
conduct, or other compliance-related matters to the Compliance
Department.
NOTE -- ADHERING TO THE POLICIES AND STANDARDS OF CONDUCT DISCUSSED IN
THIS GUIDE IS ONE OF THE CONDITIONS OF EMPLOYMENT WITH BANKERS TRUST.
FAILURE TO COMPLY WITH THEM MAY SUBJECT YOU TO DISCIPLINARY ACTION,
INCLUDING POSSIBLE DISMISSAL. IN ADDITION, VIOLATION OF THE RULES
DESCRIBED IN THIS GUIDE MAY ALSO SUBJECT YOU TO POSSIBLE CIVIL OR
CRIMINAL PENALTIES IN ACCORDANCE WITH THE SECURITIES LAWS OR
REGULATORY RULES APPLICABLE IN VARIOUS JURISDICTIONS.
