SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
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paid previously. Identify the
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FIDELITY INTERNATIONAL BOND FUND
FIDELITY NEW MARKETS INCOME FUND
FIDELITY STRATEGIC INCOME FUND
SPARTAN INTERMEDIATE MUNICIPAL INCOME FUND
FUNDS OF
FIDELITY SCHOOL STREET TRUST
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-544-8888
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of the above funds:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
Meeting) of Fidelity International Bond Fund, Fidelity New Markets
Income Fund, Fidelity Strategic Income Fund, and Spartan Intermediate
Municipal Income Fund (the funds), will be held at an office of
Fidelity School Street Trust (the trust), 27 State Street, 10th Floor,
Boston, Massachusetts 02109 on January 19, 2000, at 10:00 a.m. The
purpose of the Meeting is to consider and act upon the following
proposals, and to transact such other business as may properly come
before the Meeting or any adjournments thereof.
1. To elect a Board of Trustees.
2. To ratify the selection of PricewaterhouseCoopers LLP as
independent accountants of the funds.
3. To authorize the Trustees to adopt an amended and restated
Declaration of Trust.
4. To approve an amended sub-advisory agreement with Fidelity
Management & Research (Far East) Inc. for Fidelity International
Bond Fund and Fidelity New Markets Income Fund.
5. To approve an amended sub-advisory agreement with Fidelity
Management & Research (U.K.) Inc. for Fidelity International Bond
Fund and Fidelity New Markets Income Fund.
6. To approve an amended sub-advisory agreement with Fidelity
International Investment Advisors for Fidelity International Bond
Fund and Fidelity New Markets Income Fund.
7. To approve an amended sub-advisory agreement between Fidelity
International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited for Fidelity International Bond
Fund and Fidelity New Markets Income Fund.
8. To approve an amended sub-advisory agreement with Fidelity
Investments Japan Limited for Fidelity International Bond Fund and
Fidelity New Markets Income Fund.
9. To modify Spartan Intermediate Municipal Income Fund's
fundamental investment objective and eliminate certain fundamental
investment policies of the fund.
10. To eliminate Spartan Intermediate Municipal Income Fund's
fundamental 80% investment policy and adopt a comparable
non-fundamental policy.
11. To amend Spartan Intermediate Municipal Income Fund's fundamental
investment limitation concerning diversification.
The Board of Trustees has fixed the close of business on November 22,
1999 as the record date for the determination of the shareholders of
each of the funds entitled to notice of, and to vote at, such Meeting
and any adjournments thereof.
By order of the Board of Trustees,
ERIC D. ROITER Secretary
November 22, 1999
YOUR VOTE IS IMPORTANT -
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY
SHAREHOLDER WHO DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO
INDICATE VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND SIGN
IT, AND RETURN IT IN THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF
MAILED IN THE UNITED STATES. IN ORDER TO AVOID UNNECESSARY EXPENSE, WE
ASK YOUR COOPERATION IN MAILING YOUR PROXY CARD PROMPTLY, NO MATTER
HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.
INSTRUCTIONS FOR EXECUTING PROXY CARD
The following general rules for executing proxy cards may be of
assistance to you and help avoid the time and expense involved in
validating your vote if you fail to execute your proxy card properly.
1. INDIVIDUAL ACCOUNTS: Your name should be signed exactly as it
appears in the registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the
registration.
3. ALL OTHER ACCOUNTS should show the capacity of the individual
signing. This can be shown either in the form of the account
registration itself or by the individual executing the proxy card.
For example:
REGISTRATION VALID SIGNATURE
A. 1) ABC Corp. John Smith, Treasurer
2) ABC Corp. John Smith, Treasurer
c/o John Smith, Treasurer
B. 1) ABC Corp. Profit Sharing Plan Ann B. Collins, Trustee
2) ABC Trust Ann B. Collins, Trustee
3) Ann B. Collins, Trustee Ann B. Collins, Trustee
u/t/d 12/28/78
C. 1) Anthony B. Craft, Cust. Anthony B. Craft
f/b/o Anthony B. Craft, Jr.
UGMA
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS OF
FIDELITY SCHOOL STREET TRUST:
FIDELITY INTERNATIONAL BOND FUND
FIDELITY NEW MARKETS INCOME FUND
FIDELITY STRATEGIC INCOME FUND
SPARTAN INTERMEDIATE MUNICIPAL INCOME FUND
TO BE HELD ON JANUARY 19, 2000
This Proxy Statement is furnished in connection with a solicitation
of proxies made by, and on behalf of, the Board of Trustees of
Fidelity School Street Trust (the trust) to be used at the Special
Meeting of Shareholders of Fidelity International Bond Fund, Fidelity
New Markets Income Fund, Fidelity Strategic Income Fund, and Spartan
Intermediate Municipal Income Fund (the funds) and at any adjournments
thereof (the Meeting), to be held on January 19, 2000 at 10:00 a.m. at
27 State Street, 10th Floor, Boston, Massachusetts 02109, an
office of the trust and Fidelity Management & Research Company
(FMR), the funds' investment adviser.
The purpose of the Meeting is set forth in the accompanying Notice.
The solicitation is being made primarily by the mailing of this Proxy
Statement and the accompanying proxy card on or about November 22,
1999. Supplementary solicitations may be made by mail, telephone,
telegraph, facsimile, electronic means or by personal interview by
representatives of the trust. In addition, Management Information
Services Corp. (MIS), an ADP Company , and D.F. King & Co., Inc.
may be paid on a per-call basis to solicit shareholders on behalf
of Fidelity International Bond Fund, Fidelity New Markets Income
Fund, Fidelity Strategic Income Fund, and Spartan Intermediate
Municipal Income Fund at an anticipated cost of approximately
$3,000 for Fidelity International Bond Fund, $3,000 for Fidelity New
Markets Income Fund, $2,000 for Fidelity Strategic Income Fund, and
$4,000 for Spartan Intermediate Municipal Income Fund,
respectively . The expenses in connection with preparing this Proxy
Statement and its enclosures and of all solicitations will be paid by
the funds, provided a fund's expenses do not exceed its expense
cap: Fidelity New Markets Income Fund's existing voluntar y
expense cap of 1.20%, Fidelity Strategic Income Fund's existing
voluntar y expense cap of 1.10%, and Spartan Intermediate
Municipal Income Fund's existing voluntar y expense cap of
0.53%. The funds will reimburse brokerage firms and others for
their reasonable expenses in forwarding solicitation material to the
beneficial owners of shares. Expenses exceeding a fund's expense
cap, if applicable, will be paid by FMR. The principal business
address of Fidelity Distributors Corporation (FDC), the funds'
principal underwriter and distribution agent, and Fidelity Management
& Research (U.K.) Inc. (FMR U.K.) and Fidelity Management & Research
(Far East) Inc. (FMR Far East), subadvisers to Fidelity International
Bond Fund, Fidelity New Markets Income Fund, and Fidelity Strategic
Income Fund, is 82 Devonshire Street, Boston, Massachusetts 02109. The
principal business address of Fidelity Investments Money Management,
Inc. (FIMM), sub-adviser to Fidelity Strategic Income Fund and Spartan
Intermediate Municipal Income Fund, is 1 Spartan Way, Merrimack, New
Hampshire 03054. Fidelity Investments Japan Limited (FIJ) located at
Shiroyama JT Mori Blgd., 4-3-1 Toranomon, Minato-ku, Tokyo 105, Japan;
Fidelity International Investment Advisors (FIIA) located at Pembroke
Hall, 42 Crow Lane, Pembroke HM19, Bermuda; and Fidelity International
Investment Advisors (U.K.) Limited (FIIA(U.K.)L) located at 130
Tonbridge Road, Hildenborough, Kent, TN119DZ, England, are also
subadvisers to Fidelity International Bond Fund, Fidelity New Markets
Income Fund, and Fidelity Strategic Income Fund.
If the enclosed proxy card is executed and returned, it may
nevertheless be revoked at any time prior to its use by written
notification received by the trust, by the execution of a later-dated
proxy card, by the trust's receipt of a subsequent valid telephonic
vote, or by attending the Meeting and voting in person.
All proxy cards solicited by the Board of Trustees that are properly
executed and received by the Secretary prior to the Meeting, and are
not revoked, will be voted at the Meeting. Shares represented by such
proxies will be voted in accordance with the instructions thereon. If
no specification is made on a proxy card, it will be voted FOR the
matters specified on the proxy card. Only proxies that are voted will
be counted towards establishing a quorum. Broker non-votes are not
considered voted for this purpose. Shareholders should note that while
votes to ABSTAIN will count toward establishing a quorum, passage of
any proposal being considered at the Meeting will occur only if a
sufficient number of votes are cast FOR the proposal. Accordingly,
votes to ABSTAIN and votes AGAINST will have the same effect in
determining whether the proposal is approved.
The funds may also arrange to have votes recorded by telephone. The
expenses in connection with telephone voting will be paid by the
funds, provided the expenses do not exceed a fund's existing expense
cap, as described on page . Expenses exceeding a fund's expense
cap will be paid by FMR. If the funds record votes by telephone, they
will use procedures designed to authenticate shareholders' identities,
to allow shareholders to authorize the voting of their shares in
accordance with their instructions, and to confirm that their
instructions have been properly recorded. Proxies voted by telephone
may be revoked at any time before they are voted in the same manner
that proxies voted by mail may be revoked. D.F. King & Co., Inc. may
be paid on a per-call basis for vote-by-phone solicitations on behalf
of the funds at an anticipated cost of approximately $ 4,000 for
Fidelity International Bond Fund, $ 4,000 for Fidelity New
Markets Income Fund, $ 2,000 for Fidelity Strategic Income Fund,
and $ 6,000 for Spartan Intermediate Municipal Income Fund.
If a quorum is not present at the Meeting, or if a quorum is present
at the Meeting but sufficient votes to approve one or more of the
proposed items are not received, or if other matters arise requiring
shareholder attention, the persons named as proxy agents may propose
one or more adjournments of the Meeting to permit further solicitation
of proxies. Any such adjournment will require the affirmative vote of
a majority of those shares present at the Meeting or represented by
proxy. When voting on a proposed adjournment, the persons named as
proxy agents will vote FOR the proposed adjournment all shares that
they are entitled to vote with respect to each item, unless directed
to vote AGAINST the item, in which case such shares will be voted
AGAINST the proposed adjournment with respect to that item. A
shareholder vote may be taken on one or more of the items in this
Proxy Statement prior to such adjournment if sufficient votes have
been received and it is otherwise appropriate.
Shares of each fund of the trust issued and outstanding as of
September 30, 1999 are indicated in the following table:
Fund # of Shares
Fidelity International Bond 7,705,835
Fund
Fidelity New Markets Income 19,326,593
Fund
Fidelity Strategic Income Fund 3,627,208
Spartan Intermediate 116,554,806
Municipal Income Fund
As of September 30, 1999, the nominees , Trustees, and officers
of the trust owned, in the aggregate, less than 1% of the funds'
outstanding shares.
To the knowledge of the trust, substantial (5% or more) record or
beneficial ownership of each fund on September 30, 1999 was as
follows:
Fidelity New Markets Income Fund: Charles Schwab & Co., San
Francisco, CA (6.69%).
Fidelity Strategic Income Fund: FMR Capital, Boston, MA
(30.50%).
FMR has advised the trust that for Proposals 1, 2, and 3
contained in this Proxy Statement, it will vote its shares at the
Meeting FOR each Proposal. To the knowledge of the trust, no other
shareholder owned of record or beneficially more than 5% of the
outstanding shares of the funds on that date.
Shareholders of record at the close of business on November 22, 1999
will be entitled to vote at the Meeting. Each such shareholder will be
entitled to one vote for each dollar of net asset value held on that
date.
FOR A FREE COPY OF EACH FUND'S ANNUAL REPORT FOR THE FISCAL YEAR
ENDED DECEMBER 31, 1998 AND THE SEMIANNUAL REPORT FOR THE FISCAL
PERIOD ENDED JUNE 30, 1999, CALL 1-800-544-8888, OR WRITE TO FIDELITY
DISTRIBUTORS CORPORATION AT 82 DEVONSHIRE STREET, BOSTON,
MASSACHUSETTS 02109.
VOTE REQUIRED: A PLURALITY OF ALL VOTES CAST AT THE MEETING IS
SUFFICIENT TO APPROVE PROPOSAL 1 AND A MAJORITY OF ALL VOTES OF THE
APPROPRIATE FUND CAST AT THE MEETING IS SUFFICIENT TO APPROVE PROPOSAL
2. APPROVAL OF PROPOSAL 3 REQUIRES THE AFFIRMATIVE VOTE OF A "MAJORITY
OF THE OUTSTANDING VOTING SECURITIES" OF THE ENTIRE TRUST. APPROVAL OF
PROPOSALS 4 THROUGH 11 REQUIRES THE AFFIRMATIVE VOTE OF A "MAJORITY OF
THE OUTSTANDING VOTING SECURITIES" OF THE APPROPRIATE FUNDS. UNDER THE
INVESTMENT COMPANY ACT OF 1940 (THE 1940 ACT), THE VOTE OF A "MAJORITY
OF THE OUTSTANDING VOTING SECURITIES" MEANS THE AFFIRMATIVE VOTE OF
THE LESSER OF (A) 67% OR MORE OF THE VOTING SECURITIES PRESENT AT THE
MEETING OR REPRESENTED BY PROXY IF THE HOLDERS OF MORE THAN 50% OF THE
OUTSTANDING VOTING SECURITIES ARE PRESENT OR REPRESENTED BY PROXY OR
(B) MORE THAN 50% OF THE OUTSTANDING VOTING SECURITIES. BROKER
NON-VOTES ARE NOT CONSIDERED "PRESENT" FOR THIS PURPOSE.
The following table summarizes the proposals applicable to each fund.
Proposal # Proposal Description Applicable Funds Page
1. To elect as Trustees the 12 All 8
nominees presented in
Proposal 1.
2. To ratify the selection of All 17
PricewaterhouseCoopers LLP
as independent accountants
of the funds.
3. To authorize the Trustees to All 17
adopt an amended and
restated Declaration of Trust.
4. To approve an amended Fidelity International Bond 19
sub-advisory agreement with Fund, Fidelity New Markets
FMR Far East to allow FMR, Income Fund
FMR Far East, and the trust,
on behalf of each fund, to
modify the agreement subject
to the requirements of the
Investment Company Act of
1940.
5. To approve an amended Fidelity International Bond 21
sub-advisory agreement with Fund, Fidelity New Markets
FMR U.K. to allow FMR, FMR Income Fund
U.K., and the trust, on
behalf of each fund, to
modify the agreement subject
to the requirements of the
Investment Company Act of
1940.
6. To approve an amended Fidelity International Bond 21
sub-advisory agreement with Fund, Fidelity New Markets
FIIA to allow FMR, FIIA, and Income Fund
the trust, on behalf of each
fund, to modify the
agreement subject to the
requirements of the
Investment Company Act of
1940.
Proposal # Proposal Description Applicable Funds Page
7. To approve an amended Fidelity International Bond 22
sub-advisory agreement Fund, Fidelity New Markets
between FIIA and FIIA(U.K.)L Income Fund
to allow FIIA, FIIA(U.K.)L,
and the trust, on behalf of
each fund, to modify the
agreement subject to the
requirements of the
Investment Company Act of
1940.
8. To approve an amended Fidelity International Bond 23
sub-advisory agreement with Fund, Fidelity New Markets
FIJ to allow FMR, FIJ, and Income Fund
the trust, on behalf of each
fund, to modify the
agreement subject to the
requirements of the
Investment Company Act of
1940.
9. To modify Spartan Spartan Intermediate 23
Intermediate Municipal Municipal Income Fund
Income Fund's fundamental
investment objective and
eliminate certain
fundamental investment
policies of the fund.
10. To eliminate Spartan Spartan Intermediate 24
Intermediate Municipal Municipal Income Fund
Income Fund's fundamental
80% investment policy and
adopt a comparable
non-fundamental policy.
11. To amend the diversification Spartan Intermediate 25
limitation to exclude Municipal Income Fund
"securities of other
investment companies" from
issuer diversification limits.
1. TO ELECT A BOARD OF TRUSTEES.
The purpose of this proposal is to elect a Board of Trustees of the
Trust. Pursuant to the provisions of the Declaration of Trust of
Fidelity School Street Trust, the Trustees have determined that the
number of Trustees shall be fixed at twelve. It is intended that the
enclosed proxy card will be voted for the election as Trustees of the
twelve nominees listed below, unless such authority has been withheld
in the proxy card.
Except for Ned C. Lautenbac h, all nominees named below are
currently Trustees of Fidelity School Street Trust and have served in
that capacity continuously since originally elected or appointed.
Robert M. Gates, William O. McCoy, and Robert C. Pozen were selected
by the trust's Nominating and Administration Committee (see page
16 ) and were appointed to the Board in March 1997, January
1997, and August 1997, respectively. Mr. Lautenbach is expected to
be appointed to the Board on or about January 1, 2000, upon the
retirement of E. Bradley Jones. None of the nominees are related
to one another. Those nominees indicated by an asterisk (*) are
"interested persons" of the trust by virtue of, among other things,
their affiliation with either the trust, the funds' investment adviser
(FMR, or the Adviser), or the funds' distribution agent, FDC. The
business address of each nominee who is an "interested person" is 82
Devonshire Street, Boston, Massachusetts 02109, and the business
address of all other nominees is Fidelity Investments, P.O. Box 9235,
Boston, Massachusetts 02205-9235. Except for Messrs . Gates,
Lautenbach, McCoy, and Pozen, each of the nominees is
currently a Trustee of 57 registered investment companies advised by
FMR. Mr. Gates, Mr. McCoy, and Mr. Pozen are currently Trustees of 55
registered investment companies advised by FMR. M r. Lautenbach
i s not yet a Trustee of any registered investment companies
advised by FMR.
In the election of Trustees, those twelve nominees receiving the
highest number of votes cast at the Meeting, providing a quorum is
present, shall be elected.
<TABLE>
<CAPTION>
<S> <C> <C>
Nominee (Age) Principal Occupation** Year of Election or Appointment
Ralph F. Cox (67) President of RABAR 1991
Enterprises (management
consulting-engineering
industry, 1994). Prior to
February 1994, he was
President of Greenhill
Petroleum Corporation
(petroleum exploration and
production). Until March
1990, Mr. Cox was President
and Chief Operating Officer
of Union Pacific Resources
Company (exploration and
production). He is a
Director of USA Waste
Services, Inc.
(non-hazardous waste, 1993),
CH2M Hill Companies
(engineering), Rio Grande,
Inc. (oil and gas
production), and Daniel
Industries (petroleum
measurement equipment
manufacturer). In addition,
he is a member of advisory
boards of Texas A&M
University and the
University of Texas at Austin.
Phyllis Burke Davis (68) Prior to her retirement in 1992
September 1991, Mrs. Davis
was the Senior Vice
President of Corporate
Affairs of Avon Products,
Inc. She is currently a
Director of BellSouth
Corporation
(telecommunications), Eaton
Corporation (manufacturing,
1991), and the TJX
Companies, Inc. (retail
stores), and previously
served as a Director of
Hallmark Cards, Inc.
(1985-1991) and Nabisco
Brands, Inc. In addition,
she is a member of the
President's Advisory Council
of The University of Vermont
School of Business
Administration.
Robert M. Gates (56) Consultant, author, and 1997
lecturer (1993). Mr. Gates
was Director of the Central
Intelligence Agency (CIA)
from 1991-1993. From 1989 to
1991, Mr. Gates served as
Assistant to the President
of the United States and
Deputy National Security
Advisor. Mr. Gates is a
Director of LucasVarity PLC
(automotive components and
diesel engines), Charles
Stark Draper Laboratory
(non-profit), NACCO
Industries, Inc. (mining and
manufacturing), and TRW Inc.
(original equipment and
replacement products). Mr.
Gates also is a Trustee of
the Forum for International
Policy and of the Endowment
Association of the College
of William and Mary. In
addition, he is a member of
the National Executive Board
of the Boy Scouts of America.
*Edward C. Johnson 3d (69) President, is Chairman, Chief 1976
Executive Officer and a
Director of FMR Corp.; a
Director and Chairman of the
Board and of the Executive
Committee of FMR; Chairman
and a Director of Fidelity
Investments Money
Management, Inc. (1998),
Fidelity Management &
Research (U.K.) Inc., and
Fidelity Management &
Research (Far East) Inc.
Donald J. Kirk (67) Executive-in-Residence (1995) 1987
at Columbia University
Graduate School of Business
and a financial consultant.
From 1987 to January 1995,
Mr. Kirk was a Professor at
Columbia University Graduate
School of Business. Prior to
1987, he was Chairman of the
Financial Accounting
Standards Board. Mr. Kirk
previously served as a
Director of General Re
Corporation (reinsurance,
1987-1998) and Valuation
Research Corp. (appraisals
and valuations, 1993-1995).
He serves as Chairman of the
Board of Directors of
National Arts Stabilization
Inc., Chairman of the Board
of Trustees of the Greenwich
Hospital Association,
Director of the Yale-New
Haven Health Services Corp.
(1998), a Member of the
Public Oversight Board of
the American Institute of
Certified Public
Accountants' SEC Practice
Section (1995), and as a
Public Governor of the
National Association of
Securities Dealers, Inc.
(1996).
Ned C. Lautenbach+ (55) Partner of Clayton, Dubilier 2000
& 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 (56) Vice Chairman and Director of 1990
FMR. Prior to May 31, 1990,
he was a Director of FMR and
Executive Vice President of
FMR (a position he held
until March 31, 1991); Vice
President of Fidelity
Magellan Fund and FMR Growth
Group Leader; and Managing
Director of FMR Corp. Mr.
Lynch was also Vice
President of Fidelity
Investments Corporate
Services (1991-1992). In
addition, he serves as a
Trustee of Boston College,
Massachusetts Eye & Ear
Infirmary, Historic
Deerfield (1989) and Society
for the Preservation of New
England Antiquities, and as
an Overseer of the Museum of
Fine Arts of Boston.
Nominee (Age) Principal Occupation ** Year of Election or Appointment
William O. McCoy (66) Vice President of Finance for 1997
the University of North
Carolina (16-school system,
1995). Prior to his
retirement in December 1994,
Mr. McCoy was Vice Chairman
of the Board of BellSouth
Corporation
(telecommunications, 1984)
and President of BellSouth
Enterprises (1986). He is
currently a Director of
Liberty Corporation (holding
company, 1984), Weeks
Corporation of Atlanta (real
estate, 1994), Carolina
Power and Light Company
(electric utility, 1996) and
the Kenan Transport Co.
(1996). Previously, he was a
Director of First American
Corporation (bank holding
company, 1979-1996). In
addition, Mr. McCoy serves
as a member of the Board of
Visitors for the University
of North Carolina at Chapel
Hill (1994) and for the
Kenan-Flager Business School
(University of North
Carolina at Chapel Hill,
1988).
Gerald C. McDonough (71) Chairman of G.M. Management 1989
Group (strategic advisory
services). Mr. McDonough is
a Director of York
International Corp. (air
conditioning and
refrigeration), Commercial
Intertech Corp. (hydraulic
systems, building systems,
and metal products, 1992),
CUNO, Inc. (liquid and gas
filtration products, 1996),
and Associated Estates
Realty Corporation (a real
estate investment trust,
1993). Mr. McDonough served
as a Director of
ACME-Cleveland Corp. (metal
working, telecommunications,
and electronic products)
from 1987-1996 and
Brush-Wellman Inc. (metal
refining) from 1983-1997.
Marvin L. Mann (66) Chairman of the Board of 1993
Lexmark International, Inc.
(office machines, 1991).
Prior to 1991, he held the
positions of Vice President
of International Business
Machines Corporation ("IBM")
and President and General
Manager of various IBM
divisions and subsidiaries.
Mr. Mann is a Director of
M.A. Hanna Company
(chemicals, 1993) and
Imation Corp. (imaging and
information storage, 1997).
*Robert C. Pozen (53) Senior Vice President, is 1997
also President and a
Director of FMR (1997); and
President and a Director of
Fidelity Investments Money
Management, Inc. (1998),
Fidelity Management &
Research (U.K.) Inc. (1997),
and Fidelity Management &
Research (Far East) Inc.
(1997). Previously, Mr.
Pozen served as General
Counsel, Managing Director,
and Senior Vice President of
FMR Corp.
Thomas R. Williams (71) President of The Wales Group, 1989
Inc. (management and
financial advisory
services). Prior to retiring
in 1987, Mr. Williams served
as Chairman of the Board of
First Wachovia Corporation
(bank holding company), and
Chairman and Chief Executive
Officer of The First
National Bank of Atlanta and
First Atlanta Corporation
(bank holding company). He
is currently a Director of
ConAgra, Inc. (agricultural
products), Georgia Power
Company (electric utility),
National Life Insurance
Company of Vermont, American
Software, Inc., and
AppleSouth, Inc.
(restaurants, 1992).
</TABLE>
+ Ap pointment expected on or about January 1, 2000, upon the
retirement of E. Bradley Jones.
** Except as otherwise indicated, each individual has held the office
shown or other offices in the same company for the last five years.
As of September 30, 1999 the nominees, Trustees, and officers of the
Trust, and each fund owned, in the aggregate, less than 1% of each
fund's outstanding shares.
If elected, the Trustees will hold office without limit in time
except that (a) any Trustee may resign; (b) any Trustee may be removed
by written instrument, signed by at least two-thirds of the number of
Trustees prior to such removal; (c) any Trustee who requests to be
retired or who has become incapacitated by illness or injury may be
retired by written instrument signed by a majority of the other
Trustees; and (d) a Trustee may be removed at any Special Meeting of
shareholders by a two-thirds vote of the outstanding voting securities
of the trust. In case a vacancy shall for any reason exist, the
remaining Trustees will fill such vacancy by appointing another
Trustee, so long as, immediately after such appointment, at least
two-thirds of the Trustees have been elected by shareholders. If, at
any time, less than a majority of the Trustees holding office has been
elected by the shareholders, the Trustees then in office will promptly
call a shareholders' meeting for the purpose of electing a Board of
Trustees. Otherwise, there will normally not be a meeting of
shareholders for the purpose of electing Trustees.
The trust's Board, which is currently composed of three interested
and nine non-interested Trustees, met eleven times during the twelve
months ended December 31, 1998. It is expected that the Trustees will
meet at least ten times a year at regularly scheduled meetings.
The trust's Audit Committee is composed entirely of Trustees who are
not interested persons of the trust, FMR or its affiliates and
normally meets four times a year, or as required, prior to meetings of
the Board of Trustees. Currently, Messrs. Kirk (Chairman), Gates and
McCoy, and Mrs. Davis are members of the Committee. The committee
oversees and monitors the trust's internal control structure, its
auditing function, and its financial reporting process, including the
resolution of material reporting issues. The committee recommends to
the Board of Trustees the appointment of auditors for the trust. It
reviews audit plans, fees, and other material arrangements in respect
of the engagement of auditors, including non-audit services to be
performed. It reviews the qualifications of key personnel involved in
the foregoing activities. The committee plays an oversight role in
respect of the trust's investment compliance procedures and the code
of ethics. During the twelve months ended December 31, 1998, the
committee held five meetings.
The trust's Nominating and Administration Committee is currently
composed of Messrs. McDonough (Chairman), Jones, Mann, and Williams.
The committee members confer periodically and hold meetings as
required. The committee makes nominations for independent trustees,
and for membership on committees. The committee periodically reviews
procedures and policies of the Board of Trustees and committees. It
acts as the administrative committee under the Retirement Plan for
non-interested trustees who retired prior to December 30, 1996. It
monitors the performance of legal counsel employed by the trust and
the independent trustees. The committee in the first instance monitors
compliance with, and acts as the administrator of the provisions of
the code of ethics applicable to the independent trustees. During the
twelve months ended December 31, 1998, the committee did not meet. The
Nominating and Administration Committee will consider nominees
recommended by shareholders. Recommendations should be submitted to
the committee in care of the Secretary of the Trust. The trust does
not have a compensation committee; such matters are considered by the
Nominating and Administration Committee.
The following table sets forth information describing the
compensation of each Trustee and Member of the Advisory Board of each
fund for his or her services for the fiscal year ended December 31,
1998.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
COMPENSATION TABLE
AGGREGATE COMPENSATION FROM Edward C. Johnson 3d*** Abigail P. Johnson ***, # J. Gary Burkhead ***, ## Ralph F. Cox
EACH FUND
Fidelity International Bond $ 0 $ 0 $ 0 $ 27
FundB
Fidelity New Markets Income 0 0 0 105
FundB
Fidelity Strategic Income FundB 0 0 0 5
Spartan Intermediate 0 0 0 393
Municipal Income FundB
TOTAL COMPENSATION FROM THE $ 0 $ 0 $ 0 $ 223,500
FUND COMPLEX*, A
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMPENSATION TABLE
AGGREGATE COMPENSATION FROM Phyllis Burke Davis Robert M. Gates E. Bradley Jones
EACH FUND
Fidelity International Bond $ 27 $ 27 $ 27
FundB
Fidelity New Markets Income 104 105 104
FundB
Fidelity Strategic Income FundB 5 5 5
Spartan Intermediate 388 393 390
Municipal Income FundB
TOTAL COMPENSATION FROM THE $ 220,500 $ 223,500 $ 222,000
FUND COMPLEX*, A
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
COMPENSATION TABLE
AGGREGATE COMPENSATION
FROM Donald J. Kirk Ned C. Lautenbach** Peter S. Lynch *** William O. McCoy Gerald C. McDonough
EACH FUND
Fidelity International Bond $ 27 $ 0 $ 0 $ 27 $ 33
FundB
Fidelity New Markets Income 106 0 0 105 129
FundB
Fidelity Strategic Income FundB 6 0 0 5 7
Spartan Intermediate 398 0 0 393 480
Municipal Income FundB
TOTAL COMPENSATION FROM THE $ 226,500 $ 0 $ 0 $ 223,500 $ 273,500
FUND COMPLEX*, A
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMPENSATION TABLE
AGGREGATE COMPENSATION FROM Marvin L. Mann Robert C. Pozen *** Thomas R. Williams
EACH FUND
Fidelity International Bond $ 26 $ 0 $ 27
FundB
Fidelity New Markets Income 103 0 105
FundB
Fidelity Strategic Income FundB 5 0 5
Spartan Intermediate 388 0 393
Municipal Income FundB
TOTAL COMPENSATION FROM THE $ 220,500 $ 0 $223,500
FUND COMPLEX*, A
</TABLE>
* Information is for the calendar year ended December 31, 1998 for 237
funds in the complex.
** Effective October 14, 1999, Mr. Lautenbach serves as a Member of
the Advisory Board of the Trust.
*** Interested Trustees of the funds, Ms. Johnson and Mr. Burkhead
are compensated by FMR.
# Effective April 1, 1999, Ms. Johnson serves as a Member of the
Advisory Board of certain trusts, including Fidelity School Street
Trust.
## J. Gary Burkhead served on the Board of Trustees through July
31, 1997. Effective August 1, 1997, Mr. Burkhead serves as a Member of
the Advisory Board of the trust.
A Compensation figures include cash, amounts required to be deferred,
and may include amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1998, the Trustees accrued required
deferred compensation from the funds as follows: Ralph F. Cox,
$75,000; Phyllis Burke Davis, $75,000; Robert M. Gates,
$ 75,00 0; E. Bradley Jones, $75,000; Donald J. Kirk, $75,000;
William O. McCoy, $75,000; Gerald C. McDonough, $87,500; Marvin L.
Mann, $75,000; and Thomas R. Williams, $75,000. Certain of the
non-interested Trustees elected voluntarily to defer a portion of
their compensation as follows: Ralph F. Cox, $55,039; William O.
McCoy, $55,039; Marvin L. Mann, $55,039; and Thomas R. Williams,
$63,433.
B Compensation figures include cash.
Under a deferred compensation plan adopted in September 1995 and
amended in November 1996 (the Plan), non-interested Trustees must
defer receipt of a portion of, and may elect to defer receipt of an
additional portion of, their annual fees. Amounts deferred under the
Plan are subject to vesting and are treated as though equivalent
dollar amounts had been invested in shares of a cross-section of
Fidelity funds including funds in each major investment discipline and
representing a majority of Fidelity's assets under management (the
Reference Funds). The amounts ultimately received by the Trustees
under the Plan will be directly linked to the investment performance
of the Reference Funds. Deferral of fees in accordance with the Plan
will have a negligible effect on a fund's assets, liabilities, and net
income per share, and will not obligate a fund to retain the services
of any Trustee or to pay any particular level of compensation to the
Trustee. A fund may invest in the Reference Funds under the Plan
without shareholder approval.
2. TO RATIFY THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS
INDEPENDENT ACCOUNTANTS OF THE FUNDS.
By a vote of the non-interested Trustees, the firm of
PricewaterhouseCoopers LLP has been selected as independent
accountants for each fund to sign or certify any financial statements
of each fund required by any law or regulation to be certified by an
independent accountant and filed with the Securities and Exchange
Commission (SEC) or any state. Pursuant to the 1940 Act, such
selection requires the ratification of shareholders. In addition, as
required by the 1940 Act, the vote of the Trustees is subject to the
right of each fund, by vote of a majority of its outstanding voting
securities at any meeting called for the purpose of voting on such
action, to terminate such employment without penalty.
PricewaterhouseCoopers LLP has advised each fund that to the best of
its knowledge and belief, as of the record date, no
PricewaterhouseCoopers LLP professional had any direct or material
indirect ownership interest in each fund, inconsistent with the
independence standards pertaining to accountants.
The independent accountants examine annual financial statements for
the funds and provide other audit and tax-related services. In
recommending the selection of each fund's accountants, the Audit
Committee reviewed the nature and scope of the services to be provided
(including non-audit services) and whether the performance of such
services would affect the accountants' independence. Representatives
of PricewaterhouseCoopers LLP are not expected to be present at the
Meeting, but have been given the opportunity to make a statement if
they so desire and will be available should any matter arise requiring
their presence.
3. TO AUTHORIZE THE TRUSTEES TO ADOPT AN AMENDED AND RESTATED
DECLARATION OF TRUST.
The Board of Trustees has approved and recommends that the
shareholders of the trust authorize them to adopt and execute an
Amended and Restated Declaration of Trust for the trust and the funds
of the trust in the form attached to this Proxy Statement as Exhibit 1
(New Declaration of Trust). The attached New Declaration of Trust has
been marked to show changes from the trust's existing Declaration of
Trust (Current Declaration of Trust). The New Declaration of Trust is
a more modern form of trust instrument for a Massachusetts business
trust, and, going forward, will be used as the standard Declaration of
Trust for all new Fidelity Massachusetts business trusts.
The New Declaration of Trust gives the Trustees more flexibility and,
subject to applicable requirements of the 1940 Act and Massachusetts
law, broader authority to act. This increased flexibility may allow
the Trustees to react more quickly to changes in competitive and
regulatory conditions and, as a consequence, may allow the funds to
operate in a more efficient and economical manner. ADOPTION OF THE NEW
DECLARATION OF TRUST WILL NOT ALTER IN ANY WAY THE TRUSTEES' EXISTING
FIDUCIARY OBLIGATIONS TO ACT WITH DUE CARE AND IN THE SHAREHOLDERS'
INTERESTS. BEFORE UTILIZING ANY NEW FLEXIBILITY THAT THE NEW
DECLARATION OF TRUST MAY AFFORD, THE TRUSTEES MUST FIRST CONSIDER THE
SHAREHOLDERS' INTERESTS AND THEN ACT IN ACCORDANCE WITH SUCH
INTERESTS.
Adoption of the New Declaration of Trust will NOT result in any
changes in the funds' Trustees or officers or in the investment
policies and shareholder services described in e ach fund's
current prospectus.
Generally, a majority of the Trustees may amend the Current
Declaration of Trust when authorized by a "majority of the outstanding
voting securities" (as defined in the 1940 Act) of the trust. On
October 16, 1997, the Trustees approved the form of the New
Declaration of Trust. On December 18, 1997, the Board approved several
additional changes to the form of the New Declaration of Trust, which
changes have been incorporated into the form attached to this Proxy
Statement. On July 15, 1999, the Board authorized the submission of
the New Declaration of Trust to the trust's shareholders for their
authorization at this Meeting.
The New Declaration of Trust amends the Current Declaration of Trust
in a number of significant ways. The following discussion summarizes
some of the more significant amendments to the Current Declaration of
Trust effected by the New Declaration of Trust.
IN ADDITION TO THE CHANGES DESCRIBED BELOW, THERE ARE OTHER
SUBSTANTIVE AND STYLISTIC DIFFERENCES BETWEEN THE NEW DECLARATION OF
TRUST AND THE CURRENT DECLARATION OF TRUST. THE FOLLOWING SUMMARY IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE NEW DECLARATION OF TRUST
ITSELF, WHICH IS ATTACHED AS EXHIBIT 1 TO THIS PROXY STATEMENT.
SIGNIFICANT CHANGES EFFECTED BY THE NEW DECLARATION OF TRUST.
REORGANIZATION OR TERMINATION OF THE TRUST OR ITS SERIES. Unlike the
Current Declaration of Trust, the New Declaration of Trust generally
permits the Trustees, subject to applicable federal and state law, to
reorganize or terminate the trust or any of its series. The Current
Declaration of Trust requires shareholder approval in order to
reorganize or terminate the trust or any of its series.
Under certain circumstances, it may not be in the shareholders'
interest to require a shareholder meeting to permit the trust or a
fund to reorganize into another entity. For example, in order to
reduce the cost and scope of state regulatory constraints or to take
advantage of a more favorable tax treatment offered by another state,
the Trustees may determine that it would be in the shareholders'
interests to reorganize a fund to domicile it in another state or to
change its legal form. Under the Current Declaration of Trust, the
Trustees cannot effectuate such a potentially beneficial
reorganization without first conducting a shareholder meeting and
incurring the attendant costs and delays. In contrast, the New
Declaration of Trust gives the Trustees the flexibility to reorganize
the trust or any of its series and achieve potential shareholder
benefits without incurring the delay and potential costs of a proxy
solicitation. Such flexibility should help to assure that the trust
and its funds operate under the most appropriate form of organization.
Similarly, under certain circumstances, it may not be in the
shareholders' interest to require a shareholder meeting to permit the
Trustees to terminate a fund. For example, a fund may have
insufficient assets to invest effectively or excessively high expense
levels due to operational needs. Under such circumstances, absent
viable alternatives, the Trustees may determine that terminating the
fund is in the shareholders' interest and the only appropriate course
of action. The process of obtaining shareholder approval of the fund's
termination may, however, make it more difficult to complete the
fund's liquidation and termination and, in general, will increase the
costs associated with the termination. In such a case, it may be in
the shareholders' interest to permit fund termination without
incurring the costs and delays of a shareholder meeting.
As discussed above, before allowing a trust or fund reorganization or
termination to proceed without shareholder approval, the Trustees have
a fiduciary responsibility to first determine that the proposed
transaction is in the shareholders' interest. Any exercise of the
Trustees' increased authority under the New Declaration of Trust is
also subject to any applicable requirements of the 1940 Act and
Massachusetts law. Of course, in all cases, the New Declaration of
Trust would require that shareholders receive written notification of
any proposed transaction.
The New Declaration of Trust does NOT give the Trustees the authority
to merge a fund with another operating mutual fund or sell all of a
fund's assets to another operating mutual fund without first seeking
shareholder approval. Under the New Declaration of Trust, shareholder
approval is still required for these transactions.
FUTURE AMENDMENTS OF THE DECLARATION OF TRUST. The New Declaration of
Trust permits the Trustees, with certain exceptions, to amend the
Declaration of Trust without shareholder approval. Under the New
Declaration of Trust, shareholders generally have the right to vote on
any amendment affecting their right to vote, on any amendment altering
the maximum number of permitted Trustees, on any amendment affecting
the New Declaration of Trust's amendment provisions, on any amendment
required by law or the trust's registration statement, and on any
matter submitted to shareholders by the Trustees. The Current
Declaration of Trust, on the other hand, generally gives shareholders
the exclusive power to amend the Declaration of Trust. By allowing
amendment of the Declaration of Trust without shareholder approval,
the New Declaration of Trust gives the Trustees the necessary
authority to react quickly to future contingencies. As mentioned
above, such increased authority remains subordinate to the Trustees'
continuing fiduciary obligations to act with due care and in the
shareholders' interest.
OTHER CHANGES EFFECTED BY THE NEW DECLARATION OF TRUST.
In addition to the significant changes above, the New Declaration of
Trust modifies the Current Declaration of Trust in a number of
important ways, including the following:
1. The New Declaration of Trust modifies the Current Declaration of
Trust to allow FMR and the trust, on behalf of each fund, to amend the
fund's respective advisory contract subject to the provisions of
Section 15 of the 1940 Act, as modified or interpreted by the SEC. In
contrast, the Current Declaration of Trust explicitly requires the
vote of a majority of the outstanding voting securities of a fund to
authorize all such amendments. A corresponding change is also proposed
for certain of the funds' Sub-Advisory Agreements. For more
information on this topic generally, see Proposals 4 through 8.
2. The New Declaration of Trust clarifies that the Trustees may
impose other fees (for example, purchase fees) in addition to sales
charges upon investment in a fund and clarifies that deferred sales
charges and other fees (for example, redemption fees) may be imposed
upon redemption of a fund's shares.
3. The New Declaration of Trust confirms and clarifies various
existing Trustee powers. For example, the New Declaration of Trust
clarifies that the Trustees, in addition to banks and trust companies,
may employ as fund custodians companies that are members of a national
securities exchange or other entities permitted under the 1940 Act;
delegate authority to investment advisers and other agents; adopt and
offer dividend reinvestment and related plans; operate and carry on
the business of an investment company; and interpret the investment
policies, practices, and limitations of any fund.
4. The New Declaration of Trust clarifies that no shareholder of a
trust series shall have a claim on the assets of another series and
further clarifies that, by virtue of investing in a fund, a
shareholder is deemed to have assented to and agreed to be bound by
the terms of the New Declaration of Trust.
5. The New Declaration of Trust deletes various technical and/or
antiquated requirements from the Current Declaration of Trust,
including existing requirements that a Trustee vacancy be deemed to
occur when a Trustee is absent from his or her state of residence,
that Trustee vacancies must be filled within six calendar months, and
that portfolio securities be held pursuant to safeguards prescribed by
usual Massachusetts practice.
6. As a general matter, the New Declaration of Trust modifies the
Current Declaration of Trust to incorporate appropriate references to
classes of shares.
7. Lastly, the New Declaration of Trust generally expands various
1940 Act defined terms to encompass SEC modifications and
interpretations. Specific references to discrete sections of the 1940
Act that are contained in the New Declaration of Trust have likewise
been expanded to include SEC modifications and interpretations.
CONCLUSION. The Board of Trustees has concluded that the proposed
adoption of the New Declaration of Trust is in the best interests of
the trust's shareholders. Accordingly, the Trustees unanimously
recommend that the shareholders vote FOR the proposal to authorize
them to adopt and execute the New Declaration of Trust. If the
proposal is not approved, the Current Declaration of Trust will remain
unchanged and in effect.
4. TO APPROVE AN AMENDED SUB-ADVISORY AGREEMENT WITH FMR FAR EAST FOR
FIDELITY INTERNATIONAL BOND FUND AND FIDELITY NEW MARKETS INCOME
FUND.
The Board of Trustees, including the Trustees who are not "interested
persons" of the Trust or of FMR (the Independent Trustees), has
approved, and recommends that shareholders of each fund approve, a
proposal to adopt an amended sub-advisory agreement among FMR, FMR Far
East, and the trust with respect to the fund (the Amended Agreement).
Each fund's Amended Agreement would allow FMR, FMR Far East, and the
trust, on behalf of the fund, to modify the Amended Agreement subject
to the requirements of the 1940 Act. Each fund's existing sub-advisory
agreement (the Present Agreement) requires the vote of a majority of
the fund's outstanding voting securities to authorize all amendments.
FMR PAYS ALL OF FMR FAR EAST'S FEES UNDER EACH FUND'S AMENDED
AGREEMENT. EACH FUND'S AMENDED AGREEMENT WOULD NOT AFFECT THE FEES
THAT THE FUND PAYS TO FMR UNDER ITS PRESENT MANAGEMENT CONTRACT.
PRESENT AGREEMENTS. Under each fund's Present Agreement, FMR Far East
acts as an investment consultant to FMR and supplies FMR with
investment research information and portfolio management advice as FMR
reasonably requests on behalf of the fund. FMR Far East provides
investment advice and research services with respect to issuers
located outside of the United States, focusing primarily on companies
based in the Far East. Under each fund's Present Agreement with FMR
Far East, FMR, NOT THE FUND, pays FMR Far East a fee equal to 105% of
FMR Far East's costs incurred in connection with providing investment
advice and research services.
Furthermore, under each fund's Present Agreement, FMR may grant FMR
Far East investment management authority with respect to all or a
portion of the fund's assets, as well as the authority to buy and sell
stocks, bonds, and other securities for the fund, subject to the
overall supervision of FMR and the Board of Trustees. To the extent
that FMR grants FMR Far East investment management authority under
each fund's Present Agreement, FMR, NOT THE FUND, pays FMR Far East a
fee equal to 50% of FMR's monthly management fee with respect to the
fund's average net assets managed by FMR Far East on a discretionary
basis.
Each fund's Present Agreement requires the vote of a majority of the
fund's outstanding voting securities to authorize all amendments.
PROPOSED AMENDMENTS TO THE PRESENT AGREEMENTS. Each fund's Amended
Agreement would allow FMR, FMR Far East, and the trust, on behalf of
the fund, to amend the Proposed Agreement subject to the provisions of
Section 15 of the 1940 Act, as modified or interpreted by the SEC. In
contrast, each fund's Present Agreement explicitly requires the vote
of a majority of the outstanding voting securities of the fund to
authorize all amendments. Generally, the proposed modification to the
Present Agreement's amendment provisions would allow amendment of the
Amended Agreement without shareholder vote ONLY IF THE 1940 ACT SO
PERMITS. In short, the proposed modification gives FMR, FMR Far East,
and the trust added flexibility to amend the Amended Agreement subject
to 1940 Act constraints. Of course, any future amendments to the
Amended Agreement would require the approval of the Board of Trustees.
On July 15, 1999, the Board of Trustees agreed to submit the Amended
Agreement to shareholders of each fund pursuant to a unanimous vote of
both the full Board of Trustees and the Independent Trustees. The
Trustees considered the benefit to shareholders of FMR's, FMR Far
East's, and the trust's increased flexibility (within 1940 Act
constraints) to amend the Amended Agreement without the delays and
potential costs of a proxy solicitation.
A copy of the form of Amended Agreement for each fund, marked to
indicate the proposed amendments, is supplied as Exhibits 2 and
3 beginning on page 43 . Except for the modifications
discussed above, Fidelity International Bond Fund's and Fidelity New
Markets Income Fund's Amended Agreements are substantially identical
to their Present Agreements. (For a detailed discussion of each fund's
Present Agreement, refer to the section entitled "Sub-Advisory
Agreements" beginning on page .) If approved by shareholders,
each fund's Amended Agreement will take effect on February 1, 2000 (or
the first day of the first month following approval) and will remain
in effect through June 30, 2000 and from year to year thereafter, but
only as long as its continuance is approved at least annually by (i)
the vote, cast in person at a meeting called for the purpose, of a
majority of the Independent Trustees and (ii) the vote of either a
majority of the Trustees or a majority of the outstanding shares of
the fund. Each fund's Amended Agreement would be terminable on 60
days' written notice by either party to the agreement and the Amended
Agreement would terminate automatically in the event of its
assignment. If a fund's Amended Agreement is not approved, its Present
Agreement will continue in effect through June 30, 2000 and thereafter
only as long as its continuance is approved at least annually as
above.
FMR would continue to pay all of FMR Far East's fees under each
fund's Amended Agreement. If shareholders approve the Amended
Agreement, FMR could, in the future and subject to the approval of the
Board of Trustees, further amend the Amended Agreements to change the
fees FMR pays to FMR Far East for providing the services described
above. IF SHAREHOLDERS APPROVE THE AMENDED AGREEMENT, FMR COULD NOT,
HOWEVER, IN THE FUTURE AMEND A FUND'S PRESENT MANAGEMENT CONTRACT TO
INCREASE THE FUND'S MANAGEMENT FEE RATE PAYABLE TO FMR THEREUNDER
WITHOUT SHAREHOLDER APPROVAL.
FMR Far East, with its principal office in Tokyo, Japan, is a
wholly-owned subsidiary of FMR established in 1986 to provide
investment research to FMR with respect to foreign securities. This
research complements other research on foreign securities produced by
FMR's U.S.-based research analysts and portfolio managers, or obtained
from broker-dealers or other sources.
FMR Far East may also provide investment advisory services to FMR
with respect to other investment companies for which FMR serves as
investment adviser, and to other clients. Currently, FMR Far East's
only client other than FMR is Fidelity International Limited (FIL), an
affiliate of FMR organized under the laws of Bermuda. FIL provides
investment advisory services to non-U.S. investment companies and
institutional investors investing in securities of issuers throughout
the world. Edward C. Johnson 3d, President and a Trustee of the trust,
is Chairman and a Director of FMR Far East, Chairman and a Director of
FIL, and a principal stockholder of both FIL and FMR. For more
information on FMR Far East, see the section entitled "Activities and
Management of FMR U.K. and FMR Far East" on page .
CONCLUSION. The Board of Trustees has concluded that the proposal
will benefit each fund and its shareholders. The Trustees recommend
voting FOR the proposal. With respect to each fund, if the Amended
Agreement is approved by shareholders, the Amended Agreement will take
effect on the first day of the first month following approval. If the
Amended Agreement is not approved by shareholders, the Present
Agreement with FMR Far East will remain in effect.
5. TO APPROVE AN AMENDED SUB-ADVISORY AGREEMENT WITH FMR U.K. FOR
FIDELITY INTERNATIONAL BOND FUND AND FIDELITY NEW MARKETS INCOME
FUND.
The Board of Trustees, including the Trustees who are not "interested
persons" of the Trust or of FMR (the Independent Trustees), has
approved, and recommends that shareholders of each fund approve, a
proposal to adopt an amended sub-advisory agreement among FMR, FMR
U.K., and the trust with respect to the fund (the Amended Agreement).
Each fund's Amended Agreement would allow FMR, FMR U.K., and the
trust, on behalf of the fund, to modify the Amended Agreement subject
to the requirements of the 1940 Act. Each fund's existing sub-advisory
agreement (the Present Agreement) requires the vote of a majority of
the fund's outstanding voting securities to authorize all amendments.
FMR PAYS ALL OF FMR U.K.'S FEES UNDER EACH FUND'S AMENDED AGREEMENT.
EACH FUND'S AMENDED AGREEMENT WOULD NOT AFFECT THE FEES THAT THE FUND
PAYS TO FMR UNDER ITS PRESENT MANAGEMENT CONTRACT.
PRESENT AGREEMENTS. Under each fund's Present Agreement, FMR U.K.
acts as an investment consultant to FMR and supplies FMR with
investment research information and portfolio management advice as FMR
reasonably requests on behalf of the fund. FMR U.K. provides
investment advice and research services with respect to issuers
located outside of the United States, focusing primarily on companies
based in Europe. Under each fund's Present Agreement with FMR U.K.,
FMR, NOT THE FUND, pays FMR U.K. a fee equal to 110% of FMR U.K.'s
costs incurred in connection with providing investment advice and
research services.
Furthermore, under each fund's Present Agreement, FMR may grant FMR
U.K. investment management authority with respect to all or a portion
of the fund's assets, as well as the authority to buy and sell stocks,
bonds, and other securities for the fund, subject to the overall
supervision of FMR and the Board of Trustees. To the extent that FMR
grants FMR U.K. investment management authority under each fund's
Present Agreement, FMR, NOT THE FUND, pays FMR U.K. a fee equal to 50%
of FMR's monthly management fee with respect to the fund's average net
assets managed by FMR U.K. on a discretionary basis.
Each fund's Present Agreement requires the vote of a majority of the
fund's outstanding voting securities to authorize all amendments.
PROPOSED AMENDMENTS TO THE PRESENT AGREEMENTS. Each fund's Amended
Agreement would allow FMR, FMR U.K., and the trust, on behalf of the
fund, to amend the Proposed Agreement subject to the provisions of
Section 15 of the 1940 Act, as modified or interpreted by the SEC. In
contrast, each fund's Present Agreement explicitly requires the vote
of a majority of the outstanding voting securities of the fund to
authorize all amendments. Generally, the proposed modification to the
Present Agreement's amendment provisions would allow amendment of the
Amended Agreement without shareholder vote ONLY IF THE 1940 ACT SO
PERMITS. In short, the proposed modification gives FMR, FMR U.K., and
the trust added flexibility to amend the Amended Agreement subject to
1940 Act constraints. Of course, any future amendments to the Amended
Agreement would require the approval of the Board of Trustees.
On July 15, 1999, the Board of Trustees agreed to submit the Amended
Agreement to shareholders of each fund pursuant to a unanimous vote of
both the full Board of Trustees and the Independent Trustees. The
Trustees considered the benefit to shareholders of FMR's, FMR U.K.'s,
and the trust's increased flexibility (within 1940 Act constraints) to
amend the Amended Agreement without the delays and potential costs of
a proxy solicitation.
A copy of the form of Amended Agreement for each fund, marked to
indicate the proposed amendments, is supplied as Exhibits 4 and
5 beginning on page 48 . Except for the modifications
discussed above, Fidelity International Bond Fund's and Fidelity New
Markets Income Fund's Amended Agreements are substantially identical
to their Present Agreements. (For a detailed discussion of each fund's
Present Agreement, refer to the section entitled "Sub-Advisory
Agreements" beginning on page .) If approved by shareholders,
each fund's Amended Agreement will take effect on February 1, 2000 (or
the first day of the first month following approval) and will remain
in effect through June 30, 2000 and from year to year thereafter, but
only as long as its continuance is approved at least annually by (i)
the vote, cast in person at a meeting called for the purpose, of a
majority of the Independent Trustees and (ii) the vote of either a
majority of the Trustees or a majority of the outstanding shares of
the fund. Each fund's Amended Agreement would be terminable on 60
days' written notice by either party to the agreement and the Amended
Agreement would terminate automatically in the event of its
assignment. If a fund's Amended Agreement is not approved, its Present
Agreement will continue in effect through June 30, 2000 and thereafter
only as long as its continuance is approved at least annually as
above.
FMR would continue to pay all of FMR U.K.'s fees under each fund's
Amended Agreement. If shareholders approve the Amended Agreement, FMR
could, in the future and subject to the approval of the Board of
Trustees, further amend the Amended Agreements to change the fees FMR
pays to FMR U.K. for providing the services described above. IF
SHAREHOLDERS APPROVE THE AMENDED AGREEMENT, FMR COULD NOT, HOWEVER, IN
THE FUTURE AMEND A FUND'S PRESENT MANAGEMENT CONTRACT TO INCREASE THE
FUND'S MANAGEMENT FEE RATE PAYABLE TO FMR THEREUNDER WITHOUT
SHAREHOLDER APPROVAL.
FMR U.K., with its principal office in London, England, is a
wholly-owned subsidiary of FMR established in 1986 to provide
investment research to FMR with respect to foreign securities. This
research complements other research on foreign securities produced by
FMR's U.S.-based research analysts and portfolio managers, or obtained
from broker-dealers or other sources.
FMR U.K. may also provide investment advisory services to FMR with
respect to other investment companies for which FMR serves as
investment adviser, and to other clients. Currently, FMR U.K.'s only
client other than FMR is Fidelity International Limited (FIL), an
affiliate of FMR organized under the laws of Bermuda. FIL provides
investment advisory services to non-U.S. investment companies and
institutional investors investing in securities of issuers throughout
the world. Edward C. Johnson 3d, President and a Trustee of the trust,
is Chairman and a Director of FMR U.K., Chairman and a Director of
FIL, and a principal stockholder of both FIL and FMR. For more
information on FMR U.K., see the section entitled "Activities and
Management of FMR U.K. and FMR Far East" on page .
CONCLUSION. The Board of Trustees has concluded that the proposal
will benefit each fund and its shareholders. The Trustees recommend
voting FOR the proposal. With respect to each fund, if the Amended
Agreement is approved by shareholders, the Amended Agreement will take
effect on the first day of the first month following approval. If the
Amended Agreement is not approved by shareholders, the Present
Agreement with FMR U.K. will remain in effect.
6. TO APPROVE AN AMENDED SUB-ADVISORY AGREEMENT WITH FIDELITY
INTERNATIONAL INVESTMENT ADVISORS FOR FIDELITY INTERNATIONAL BOND
FUND AND FIDELITY NEW MARKETS INCOME FUND.
The Board of Trustees, including the Trustees who are not "interested
persons" of the Trust or of FMR (the Independent Trustees), has
approved, and recommends that shareholders of each fund approve, a
proposal to adopt an amended sub-advisory agreement among FMR, FIIA,
and the trust with respect to the fund (the Amended Agreement). Each
fund's Amended Agreement would allow FMR, FIIA, and the trust, on
behalf of the fund, to modify the Amended Agreement subject to the
requirements of the 1940 Act. Each fund's existing sub-advisory
agreement (the Present Agreement) requires the vote of a majority of
the fund's outstanding voting securities to authorize all amendments.
FMR PAYS ALL OF FIIA'S FEES UNDER EACH FUND'S AMENDED AGREEMENT. EACH
FUND'S AMENDED AGREEMENT WOULD NOT AFFECT THE FEES THAT THE FUND PAYS
TO FMR UNDER ITS PRESENT MANAGEMENT CONTRACT.
PRESENT AGREEMENTS. Under each fund's Present Agreement, FIIA acts as
an investment consultant to FMR and supplies FMR with investment
research information and portfolio management advice as FMR reasonably
requests on behalf of the fund. FIIA provides investment advice and
research services with respect to issuers located outside of the
United States, focusing primarily on companies based in Hong Kong,
Australia, New Zealand, and Southeast Asia (other than Japan). Under
each fund's Present Agreement with FIIA, FMR, NOT THE FUND, pays FIIA
a fee equal to 30% of FMR's monthly management fee with respect to the
fund's average net assets for which the sub-adviser has provided
FMR with investment advice and research services.
Furthermore, under each fund's Present Agreement, FMR may grant FIIA
investment management authority with respect to all or a portion of
the fund's assets, as well as the authority to buy and sell stocks,
bonds, and other securities for the fund, subject to the overall
supervision of FMR and the Board of Trustees. To the extent that FMR
grants FIIA investment management authority under each fund's Present
Agreement, FMR, NOT THE FUND, pays FIIA a fee equal to 57% of FMR's
monthly management fee with respect to the fund's average net assets
managed by FIIA on a discretionary basis.
Each fund's Present Agreement requires the vote of a majority of the
fund's outstanding voting securities to authorize all amendments.
PROPOSED AMENDMENTS TO THE PRESENT AGREEMENTS. Each fund's Amended
Agreement would allow FMR, FIIA, and the trust, on behalf of the fund,
to amend the Proposed Agreement subject to the provisions of Section
15 of the 1940 Act, as modified or interpreted by the SEC. In
contrast, each fund's Present Agreement explicitly requires the vote
of a majority of the outstanding voting securities of the fund to
authorize all amendments. Generally, the proposed modification to the
Present Agreement's amendment provisions would allow amendment of the
Amended Agreement without shareholder vote ONLY IF THE 1940 ACT SO
PERMITS. In short, the proposed modification gives FMR, FIIA, and the
trust added flexibility to amend the Amended Agreement subject to 1940
Act constraints. Of course, any future amendments to the Amended
Agreement would require the approval of the Board of Trustees.
On July 15, 1999, the Board of Trustees agreed to submit the Amended
Agreement to shareholders of each fund pursuant to a unanimous vote of
both the full Board of Trustees and the Independent Trustees. The
Trustees considered the benefit to shareholders of FMR's, FIIA's, and
the trust's increased flexibility (within 1940 Act constraints) to
amend the Amended Agreement without the delays and potential costs of
a proxy solicitation.
A copy of the form of Amended Agreement for each fund, marked to
indicate the proposed amendments, is supplied as Exhibits 6 and
7 beginning on page 53 . Except for the modifications
discussed above (and certain other minor modifications to make the
fund's Amended Agreement conform to the "standard" sub-advisory
agreement with FIIA for the Fidelity funds), Fidelity International
Bond Fund's and Fidelity New Markets Income Fund's Amended Agreement
is substantially identical to its Present Agreement. (For a detailed
discussion of each fund's Present Agreement, refer to the section
entitled "Sub-Advisory Agreements" beginning on page .) If
approved by shareholders, each fund's Amended Agreement will take
effect on February 1, 2000 (or the first day of the first month
following approval) and will remain in effect through June 30, 2000
and from year to year thereafter, but only as long as its continuance
is approved at least annually by (i) the vote, cast in person at a
meeting called for the purpose, of a majority of the Independent
Trustees and (ii) the vote of either a majority of the Trustees or a
majority of the outstanding shares of the fund. Each fund's Amended
Agreement would be terminable on 60 days' written notice by either
party to the agreement and the Amended Agreement would terminate
automatically in the event of its assignment. If a fund's Amended
Agreement is not approved, its Present Agreement will continue in
effect through June 30, 2000 and thereafter only as long as its
continuance is approved at least annually as above.
FMR would continue to pay all of FIIA's fees under each fund's
Amended Agreement. If shareholders approve the Amended Agreement, FMR
could, in the future and subject to the approval of the Board of
Trustees, further amend the Amended Agreements to change the fees FMR
pays to FIIA for providing the services described above. IF
SHAREHOLDERS APPROVE THE AMENDED AGREEMENT, FMR COULD NOT, HOWEVER, IN
THE FUTURE AMEND A FUND'S PRESENT MANAGEMENT CONTRACT TO INCREASE THE
FUND'S MANAGEMENT FEE RATE PAYABLE TO FMR THEREUNDER WITHOUT
SHAREHOLDER APPROVAL.
FIIA, with its principal office in Pembroke, Bermuda, is a
wholly-owned subsidiary of Fidelity International Limited (FIL)
established in 1983 to provide investment research to FIL with respect
to foreign securities. This research complements other research on
foreign securities produced by FMR's U.S.-based research analysts and
portfolio managers, or obtained from broker-dealers or other sources.
FIIA may also provide investment advisory services to FMR with
respect to other investment companies for which FMR serves as
investment adviser, and to other clients. Currently, FIIA is also the
investment advisor of Fidelity Advisor Korea Fund, Inc., a closed-end
investment company. FIL is an affiliate of FMR organized under the
laws of Bermuda. FIL provides investment advisory services to non-U.S.
investment companies and institutional investors investing in
securities of issuers throughout the world. Edward C. Johnson 3d,
President and a Trustee of the trust, is Chairman and a Director of
FIIA, Chairman and a Director of FIL, and a principal stockholder of
both FIL and FMR. For more information on FIIA, see the section
entitled "Activities and Management of FIJ, FIIA, and FIIA(U.K.)L" on
page .
CONCLUSION. The Board of Trustees has concluded that the proposal
will benefit each fund and its shareholders. The Trustees recommend
voting FOR the proposal. With respect to each fund, if the Amended
Agreement is approved by shareholders, the Amended Agreement will take
effect on the first day of the first month following approval. If the
Amended Agreement is not approved by shareholders, the Present
Agreement with FIIA will remain in effect.
7. TO APPROVE AN AMENDED SUB-ADVISORY AGREEMENT BETWEEN FIDELITY
INTERNATIONAL INVESTMENT ADVISORS AND FIDELITY INTERNATIONAL
INVESTMENT ADVISORS (U.K.) LIMITED FOR FIDELITY INTERNATIONAL BOND
FUND AND FIDELITY NEW MARKETS INCOME FUND.
The Board of Trustees, including the Trustees who are not "interested
persons" of the Trust or of FMR (the Independent Trustees), has
approved, and recommends that shareholders of each fund approve, a
proposal to adopt an amended sub-advisory agreement between FIIA,
FIIA(U.K.)L, and the trust with respect to the fund (the Amended
Agreement). Each fund's Amended Agreement would allow FIIA,
FIIA(U.K.)L, and the trust, on behalf of the fund, to modify the
Amended Agreement subject to the requirements of the 1940 Act. Each
fund's existing sub-advisory agreement (the Present Agreement)
requires the vote of a majority of the fund's outstanding voting
securities to authorize all amendments. FIIA PAYS ALL OF FIIA(U.K.)L'S
FEES UNDER EACH FUND'S AMENDED AGREEMENT. EACH FUND'S AMENDED
AGREEMENT WOULD NOT AFFECT THE FEES THAT THE FUND PAYS TO FMR UNDER
ITS PRESENT MANAGEMENT CONTRACT.
PRESENT AGREEMENTS. Under each fund's Present Agreement, FIIA(U.K.)L
acts as an investment consultant to FIIA and FIIA supplies FMR with
investment research information and portfolio management advice as FMR
reasonably requests on behalf of the fund. FIIA(U.K.)L provides
investment advice and research services with respect to issuers
located outside of the United States, focusing primarily on companies
based in Western Europe, principally the U.K. and Europe. Under each
fund's Present Agreement with FIIA, FIIA, NOT THE FUND, pays
FIIA(U.K.)L a fee equal to 110% of FIIA(U.K.)L's costs incurred in
connection with providing investment advice and research services.
Furthermore, under each fund's Present Agreement, FIIA may grant
FIIA(U.K.)L investment management authority with respect to all or a
portion of the fund's assets, as well as the authority to buy and sell
stocks, bonds, and other securities for the fund, subject to the
overall supervision of FMR and the Board of Trustees. To the extent
that FIIA grants FIIA(U.K.)L investment management authority under
each fund's Present Agreement, FIIA, NOT THE FUND, pays FIIA(U.K.)L a
fee equal to 110% of FIIA(U.K.)L's costs incurred in connection with
providing discretionary investment management services.
Each fund's Present Agreement requires the vote of a majority of the
fund's outstanding voting securities to authorize all amendments.
PROPOSED AMENDMENTS TO THE PRESENT AGREEMENTS. Each fund's Amended
Agreement would allow FIIA, FIIA(U.K.)L, and the trust, on behalf of
the fund, to amend the Proposed Agreement subject to the provisions of
Section 15 of the 1940 Act, as modified or interpreted by the SEC. In
contrast, each fund's Present Agreement explicitly requires the vote
of a majority of the outstanding voting securities of the fund to
authorize all amendments. Generally, the proposed modification to the
Present Agreement's amendment provisions would allow amendment of the
Amended Agreement without shareholder vote ONLY IF THE 1940 ACT SO
PERMITS. In short, the proposed modification gives FIIA, FIIA(U.K.)L,
and the trust added flexibility to amend the Amended Agreement subject
to 1940 Act constraints. Of course, any future amendments to the
Amended Agreement would require the approval of the Board of Trustees.
On July 15, 1999, the Board of Trustees agreed to submit the Amended
Agreement to shareholders of each fund pursuant to a unanimous vote of
both the full Board of Trustees and the Independent Trustees. The
Trustees considered the benefit to shareholders of FIIA's,
FIIA(U.K.)L's, and the trust's increased flexibility (within 1940 Act
constraints) to amend the Amended Agreement without the delays and
potential costs of a proxy solicitation.
A copy of the form of Amended Agreement for each fund, marked to
indicate the proposed amendments, is supplied as Exhibits 8 and
9 beginning on page 59 . Except for the modifications
discussed above (and certain other minor modifications to make the
fund's Amended Agreement conform to the "standard" sub-advisory
agreement with FIIA(U.K.)L for the Fidelity funds), Fidelity
International Bond Fund's and Fidelity New Markets Income Fund's
Amended Agreement is substantially identical to its Present Agreement.
(For a detailed discussion of each fund's Present Agreement, refer to
the section entitled "Sub-Advisory Agreements" beginning on page
.) If approved by shareholders, each fund's Amended Agreement
will take effect on February 1, 2000 (or the first day of the first
month following approval) and will remain in effect through June 30,
2000 and from year to year thereafter, but only as long as its
continuance is approved at least annually by (i) the vote, cast in
person at a meeting called for the purpose, of a majority of the
Independent Trustees and (ii) the vote of either a majority of the
Trustees or a majority of the outstanding shares of the fund. Each
fund's Amended Agreement would be terminable on 60 days' written
notice by either party to the agreement and the Amended Agreement
would terminate automatically in the event of its assignment. If a
fund's Amended Agreement is not approved, its Present Agreement will
continue in effect through June 30, 2000 and thereafter only as long
as its continuance is approved at least annually as above.
FIIA would continue to pay all of FIIA(U.K.)L's fees under each
fund's Amended Agreement. If shareholders approve the Amended
Agreement, FIIA could, in the future and subject to the approval of
the Board of Trustees, further amend the Amended Agreements to change
the fees FIIA pays to FIIA(U.K.)L for providing the services described
above. IF SHAREHOLDERS APPROVE THE AMENDED AGREEMENT, FMR COULD NOT,
HOWEVER, IN THE FUTURE AMEND A FUND'S PRESENT MANAGEMENT CONTRACT TO
INCREASE THE FUND'S MANAGEMENT FEE RATE PAYABLE TO FMR THEREUNDER
WITHOUT SHAREHOLDER APPROVAL.
FIIA(U.K.)L, with its principal office in Kent, England, is a
wholly-owned subsidiary of Fidelity International Management Holdings
Limited, an indirect wholly-owned subsidiary of FIL. FIIA(U.K.)L,
established in 1984, provides investment research to FIIA with respect
to foreign securities. This research complements other research on
foreign securities produced by FMR's U.S.-based research analysts and
portfolio managers, or obtained from broker-dealers or other sources.
FIIA(U.K.)L may also provide investment advisory services to
FI IA with respect to other investment companies for which FIIA
serves as investment adviser, and to other clients. For more
information on FIIA(U.K.)L, see the section entitled "Activities and
Management of FIJ, FIIA, and FIIA(U.K.)L" on page .
CONCLUSION. The Board of Trustees has concluded that the proposal
will benefit each fund and its shareholders. The Trustees recommend
voting FOR the proposal. With respect to each fund, if the Amended
Agreement is approved by shareholders, the Amended Agreement will take
effect on the first day of the first month following approval. If the
Amended Agreement is not approved by shareholders, the Present
Agreement with FIIA(U.K)L will remain in effect.
8. TO APPROVE AN AMENDED SUB-ADVISORY AGREEMENT WITH FIDELITY
INVESTMENTS JAPAN LIMITED FOR FIDELITY INTERNATIONAL BOND FUND AND
FIDELITY NEW MARKETS INCOME FUND.
The Board of Trustees, including the Trustees who are not "interested
persons" of the Trust or of FMR (the Independent Trustees), has
approved, and recommends that shareholders of each fund approve, a
proposal to adopt an amended sub-advisory agreement among FMR, FIJ,
and the trust with respect to the fund (the Amended Agreement). Each
fund's Amended Agreement would allow FMR, FIJ, and the trust, on
behalf of the fund, to modify the Amended Agreement subject to the
requirements of the 1940 Act. Each fund's existing sub-advisory
agreement (the Present Agreement) requires the vote of a majority of
the fund's outstanding voting securities to authorize all amendments.
FMR PAYS ALL OF FIJ'S FEES UNDER EACH FUND'S AMENDED AGREEMENT. EACH
FUND'S AMENDED AGREEMENT WOULD NOT AFFECT THE FEES THAT THE FUND PAYS
TO FMR UNDER ITS PRESENT MANAGEMENT CONTRACT.
PRESENT AGREEMENTS. Under each fund's Present Agreement, FIJ acts as
an investment consultant to FMR and supplies FMR with investment
research information and portfolio management advice as FMR reasonably
requests on behalf of the fund. FIJ provides investment advice and
research services with respect to issuers located outside of the
United States, focusing primarily on companies based in the Far East,
principally Japan and other parts of Asia. Under each fund's Present
Agreement with FIJ, FMR, NOT THE FUND, pays FIJ a fee equal to 30% of
FMR's monthly management fee with respect to the fund's average net
assets for which the sub-adviser provided FMR with investment
advice and research service .
Furthermore, under each fund's Present Agreement, FMR may grant FIJ
investment management authority with respect to all or a portion of
the fund's assets, as well as the authority to buy and sell stocks,
bonds, and other securities for the fund, subject to the overall
supervision of FMR and the Board of Trustees. To the extent that FMR
grants FIJ investment management authority under each fund's Present
Agreement, FMR, NOT THE FUND, pays FIJ a fee equal to 57% of FMR's
monthly management fee with respect to the fund's average net assets
managed by FIJ on a discretionary basis.
Each fund's Present Agreement requires the vote of a majority of the
fund's outstanding voting securities to authorize all amendments.
PROPOSED AMENDMENTS TO THE PRESENT AGREEMENTS. Each fund's Amended
Agreement would allow FMR, FIJ, and the trust, on behalf of the fund,
to amend the Proposed Agreement subject to the provisions of Section
15 of the 1940 Act, as modified or interpreted by the SEC. In
contrast, each fund's Present Agreement explicitly requires the vote
of a majority of the outstanding voting securities of the fund to
authorize all amendments. Generally, the proposed modification to the
Present Agreement's amendment provisions would allow amendment of the
Amended Agreement without shareholder vote ONLY IF THE 1940 ACT SO
PERMITS. In short, the proposed modification gives FMR, FIJ, and the
trust added flexibility to amend the Amended Agreement subject to 1940
Act constraints. Of course, any future amendments to the Amended
Agreement would require the approval of the Board of Trustees.
On July 15, 1999, the Board of Trustees agreed to submit the Amended
Agreement to shareholders of each fund pursuant to a unanimous vote of
both the full Board of Trustees and the Independent Trustees. The
Trustees considered the benefit to shareholders of FMR's, FIJ's, and
the trust's increased flexibility (within 1940 Act constraints) to
amend the Amended Agreement without the delays and potential costs of
a proxy solicitation.
A copy of the form of Amended Agreement for each fund, marked to
indicate the proposed amendments, is supplied as Exhibits 10
and 11 beginning on page 64 . Except for the
modifications discussed above (and certain other minor modifications
to make the fund's Amended Agreement conform to the "standard"
sub-advisory agreement with FIJ for the Fidelity funds), Fidelity
International Bond Fund's and Fidelity New Markets Income Fund's
Amended Agreement is substantially identical to its Present Agreement.
(For a detailed discussion of each fund's Present Agreement, refer to
the section entitled "Sub-Advisory Agreements" beginning on page
.) If approved by shareholders, each fund's Amended Agreement
will take effect on February 1, 2000 (or the first day of the first
month following approval) and will remain in effect through June 30,
2000 and from year to year thereafter, but only as long as its
continuance is approved at least annually by (i) the vote, cast in
person at a meeting called for the purpose, of a majority of the
Independent Trustees and (ii) the vote of either a majority of the
Trustees or a majority of the outstanding shares of the fund. Each
fund's Amended Agreement would be terminable on 60 days' written
notice by either party to the agreement and the Amended Agreement
would terminate automatically in the event of its assignment. If a
fund's Amended Agreement is not approved, its Present Agreement will
continue in effect through June 30, 2000 and thereafter only as long
as its continuance is approved at least annually as above.
FMR would continue to pay all of FIJ's fees under each fund's Amended
Agreement. If shareholders approve the Amended Agreement, FMR could,
in the future and subject to the approval of the Board of Trustees,
further amend the Amended Agreements to change the fees FMR pays to
FIJ for providing the services described above. IF SHAREHOLDERS
APPROVE THE AMENDED AGREEMENT, FMR COULD NOT, HOWEVER, IN THE FUTURE
AMEND A FUND'S PRESENT MANAGEMENT CONTRACT TO INCREASE THE FUND'S
MANAGEMENT FEE RATE PAYABLE TO FMR THEREUNDER WITHOUT SHAREHOLDER
APPROVAL.
FIJ, with its principal office in Tokyo, Japan, is a wholly-owned
subsidiary of Fidelity International Limited (FIL) established in 1986
to provide investment research to FIL with respect to foreign
securities. FIJ registered with the SEC in order to provide investment
advisory services to FMR with respect to foreign securities. This
research complements other research on foreign securities produced by
FMR's U.S.-based research analysts and portfolio managers, or obtained
from broker-dealers or other sources.
FIJ may also provide investment advisory services to FMR with respect
to other investment companies for which FMR serves as investment
adviser, and to other clients. Currently, FIJ's only client other than
FMR is FIL, an affiliate of FMR organized under the laws of Bermuda.
FIL provides investment advisory services to non-U.S. investment
companies and institutional investors investing in securities of
issuers throughout the world. Edward C. Johnson 3d, President and a
Trustee of the trust, is Chairman and a Director of FIJ, Chairman and
a Director of FIL, and a principal stockholder of both FIL and FMR.
For more information on FIJ, see the section entitled "Activities and
Management of FIJ, FIIA, and FIIA(U.K.)L" on page .
CONCLUSION. The Board of Trustees has concluded that the proposal
will benefit each fund and its shareholders. The Trustees recommend
voting FOR the proposal. With respect to each fund, if the Amended
Agreement is approved by shareholders, the Amended Agreement will take
effect on the first day of the first month following approval. If the
Amended Agreement is not approved by shareholders, the Present
Agreement with FIJ will remain in effect.
9. TO MODIFY SPARTAN INTERMEDIATE MUNICIPAL INCOME FUND'S
FUNDAMENTAL INVESTMENT OBJECTIVE AND ELIMINATE CERTAIN FUNDAMENTAL
INVESTMENT POLICIES OF THE FUND.
The Board of Trustees has approved, and recommends that shareholders
of the fund approve, a proposal that would modify the fund's
fundamental investment objective and eliminate certain of
its fundamental investment policies. The proposal is intended
to allow the fund to communicate more clearly its investment objective
and strategies by standardizing its investment disclosure in a manner
consistent with other Fidelity funds with similar investment
disciplines. The modifications to the fund's investment objective and
elimination of the investment policies are not expected to materially
affect the way the fund is managed.
The fund's investment objective and certain investment policies
currently read as follows:
"Spartan Intermediate Municipal Income Fund seeks the highest level
of income exempt from federal income tax that can be obtained,
consistent with the preservation of capital, from a diversified
portfolio of investment-grade obligations."
If the proposal is approved, the fund's fundamental investment
objective would read as follows (additional language is
(( underlined )) and deleted language is [bracketed]):
"Spartan Intermediate Municipal Income Fund seeks [the highest]
(( as high a )) level of (( current )) income,
exempt from federal income tax [that can be obtained], (( as
is )) consistent with the preservation of capital[, from a
diversified portfolio of investment-grade obligations]."
Because the fund's investment objective and the foregoing policies
are fundamental, they cannot be modified or eliminated without
shareholder approval.
DISCUSSION OF PROPOSED MODIFICATIONS. Modifying the fund's
investment objective will allow the fund to communicate more clearly
its investment objective to shareholders. Eliminating the foregoing
fundamental policies will allow the fund to more clearly
communicate its investment strateg ies to shareholders by
standardizing its investment disclosure in a manner consistent with
other Fidelity funds with similar investment disciplines.
If the proposal is approved, the fund will continue to rely on its
existing fundamental policy regarding diversification and its existing
non-fundamental policy of investing in investment-grade securities.
Pursuant to current fundamental policy, the fund is "diversified" as
defined in the Investment Company Act of 1940, which means
that , with respect to at least 75% of its total assets ,
(a) no more than 5% of its total assets are invested in the securities
of a single issuer and (b) the fund owns no more than 10% of the
outstanding voting securities of such issuer. In addition, pursuant to
its non-fundamental policy of investing in investment-grade
securities, the fund does not currently invest, or intend to invest,
in below investment-grade securities. As noted above, fundamental
policies can be changed or eliminated only with shareholder approval,
while non-fundamental policies can be changed or eliminated without
shareholder approval. Changes in non-fundamental policies, however,
are still subject to the supervision of the Board of Trustees.
Modifying the fund's fundamental investment objective and
eliminating the fundamental investment policies as proposed
will have no m aterial e ffect on the way the fund is
managed.
CONCLUSION. The Board of Trustees has concluded that modifying the
fund's fundamenta l investment objective and eliminating the
fundamental investment policies as described above are in the
best interest of the fund and its shareholders. The Trustees recommend
voting FOR the proposal. If approved by shareholders, the changes will
become effective when disclosure is revised to reflect them. If the
proposal is not approved by the fund's shareholders, the fund's
current fundamental investment objective and policies will remain
unchanged.
10. TO ELIMINATE SPARTAN INTERMEDIATE MUNICIPAL INCOME FUND'S
FUNDAMENTAL 80% INVESTMENT POLICY AND ADOPT A COMPARABLE
NON-FUNDAMENTAL POLICY.
The Board of Trustees has approved, and recommends that the
shareholders of the fund approve, a proposal to eliminate the fund's
fundamental 80% investment policy and adopt a comparable
non-fundamental policy that is standard for other Fidelity national
municipal bond funds. Fundamental policies can be changed or
eliminated only with shareholder approval, while non-fundamental
policies can be changed without shareholder approval. It is
anticipated that the elimination of the current fundamental policy and
the adoption of the proposed non-fundamental policy will have no
material effect on the way the fund is managed.
The current fundamental 80% investment policy for the fund is as
follows:
"The fund will normally invest so that at least 80% of its assets are
invested in municipal securities whose interest is free from federal
income tax."
If the proposal to eliminate the current fundamental policy is
approved, the Trustees intend to adopt the following non-fundamental
policy:
"The fund will normally invest so that at least 80% of its assets are
invested in municipal securities whose interest is exempt from federal
income tax."
DISCUSSION OF PROPOSED MODIFICATION. Eliminating the fund's
fundamental 80% investment policy and adopting the comparable
non-fundamental policy will allow the Trustees to modify the fund's
80% policy, as necessary, to comply with the SEC's "name test rule"
(Name Test Rule) , if a nd when it is adopted ,
without having to incur the potential costs and delays of conducting a
shareholder meeting.
The SEC proposed the Name Test Rule in February 1997. The Name Test
Rule governs the use of mutual fund names and, if and whe n
eventually adopted by the SEC, may apply to the fund. If a definitive
version of the rule is ultimately adopted, the fund's 80%
policy may require modification to comply with the requirements
of the definitive rule. Briefly stated, eliminating the fund's
fundamental 80% investment policy and adopting the proposed
non-fundamental policy will give the Trustees the flexibility to
comply more quickly with a definitive Name Test Rule, i f and when
adopted .
As noted above, fundamental investment policies can be changed or
eliminated only with shareholder approval, while non-fundamental
policies can be changed or eliminated without shareholder approval.
Changes in non-fundamental policies are still subject, however, to the
supervision of the Board of Trustees. Therefore, any future changes to
the fund's proposed non-fundamental 80% policy, while not requiring
shareholder approval, would require approval of the Board.
In sum, it is not expected that approval of the proposal will have a
material effect on the way the fund is currently managed. Rather,
approval of the proposal will provide the Trustees with additional
flexibility to respond to future regulatory changes and
developments in the marketplace.
CONCLUSION. The Board of Trustees believes that eliminating
th e fund's fundamental 80% investment policy and adopting
the proposed non-fundamental 80% investment policy will benefit
the fund and its shareholders. The Trustees recommend voting FOR the
proposal. Upon shareholder approval, the changes will become effective
when the fund's disclosure is revised to reflect them. If the proposal
is not approved by the shareholders of the fund, the fund's current
fundamental 80% policy will remain unchanged.
11. TO AMEND SPARTAN INTERMEDIATE MUNICIPAL INCOME FUND'S FUNDAMENTAL
INVESTMENT LIMITATION CONCERNING DIVERSIFICATION TO EXCLUDE
SECURITIES OF OTHER INVESTMENT COMPANIES FROM THE LIMITATION FOR
THE FUND.
The fund's current fundamental investment limitation concerning
diversification is as follows:
"The fund may not with respect to 75% of the fund's total assets,
purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, (a) more than 5% of the fund's
total assets would be invested in the securities of that issuer, or
(b) the fund would hold more than 10% of the outstanding voting
securities of that issuer."
The Trustees recommend that shareholders of the fund vote to replace
the fund's current fundamental investment limitation with the
following amended fundamental investment limitation governing
diversification (additional language is (( underlined ))
and deleted language is [bracketed]):
"The fund may not with respect to 75% of the fund's total assets,
purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. [g] (( G )) overnment or any of its
agencies or instrumentalities (( , or securities of other
investment companies) )) if, as a result, (a) more than 5% of
the fund's total assets would be invested in the securities of that
issuer, or (b) the fund would hold more than 10% of the outstanding
voting securities of that issuer."
The percentage limits in the proposed fundamental limitation
concerning diversification are imposed by the 1940 Act. The amended
fundamental diversification limitation makes one change from the
current limitation: subject to applicable 1940 Act requirements, it
would permit the fund to invest without limit in the securities of
other investment companies including the portion of the fund allocated
to the fixed-income market. Pursuant to an order of exemption granted
by the SEC, the fund may invest in short-term bond or money market
funds managed by FMR or an affiliate of FMR (the Investment Funds).
The Investment Funds currently do not bear the cost of investment
advisory, management, or transfer agent fees, although they may do so
subject to the conditions of the SEC order, including Board review of
the total fees paid by shareholders of the fund. The Investment Funds
currently pay minimal fees for services such as custodian, auditor,
certain pricing and bookkeeping services, and Independent Trustees
fees. FMR anticipates that investing in the Investment Funds will
benefit the fund by enhancing the efficiency of investment of cash
generated by fund shareholder or investment activity, or through the
investment of fund assets allocated to the short-term bond or money
markets in support of the fund's investment objective. For some funds,
the Investment Funds may serve as the principal option for cash
investment. If the proposal is approved, future amendments to the
fund's fundamental diversification limitation would continue to
require shareholder approval.
If this proposal is approved, the amended fundamental diversification
limitation cannot be changed without the approval of the shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit the fund and its shareholders. The Trustees
recommend voting FOR the proposal. The amended fundamental
diversification limitation, upon shareholder approval, will become
effective when the disclosure is revised to reflect the changes. If
the proposal is not approved by the shareholders of the fund, the
fund's current fundamental diversification limitation will remain
unchanged.
OTHER BUSINESS
The Board knows of no other business to be brought before the
Meeting. However, if any other matters properly come before the
Meeting, it is the intention that proxies that do not contain specific
instructions to the contrary will be voted on such matters in
accordance with the judgment of the persons therein designated.
ACTIVITIES AND MANAGEMENT OF FMR
FMR, a corporation organized in 1946, serves as investment adviser to
a number of investment companies. Information concerning the advisory
fees and average net assets of funds with investment objectives
similar to Fidelity International Bond Fund and Fidelity New Markets
Income Fund and advised by FMR is contained in the Tables of Average
Net Assets and Expense Ratios in Exhibits 12 and 13
beginning on page 71 .
FMR, its officers and directors, its affiliated companies, and the
Trustees, from time to time have transactions with various banks,
including the custodian banks for certain of the funds advised by FMR.
Those transactions that have occurred to date have included mortgages
and personal and general business loans. In the judgment of FMR, the
terms and conditions of those transactions were not influenced by
existing or potential custodial or other fund relationships.
The Directors of FMR are Edward C. Johnson 3d, Chairman of the Board
and of the Executive Committee; R obert C. Pozen, President;
Peter S. Lynch, Vice Chairman; and Abigail P. Johnson, Senior Vice
President. With the exception of Abigail P. Johnson, each of
the Directors is also a Trustee of the trust . Messrs. Johnson
3d, Pozen, John H. Costello, Matthew N. Karstetter, Eric D. Roiter,
Thomas J. Simpson, Richard A. Silver, Fred L. Henning, Jr., Dwight
D. Churchill, Bart A. Grenier and Stanley N. Griffith, are
currently officers of the trust and officers or employees of FMR or
FMR Corp. With the exception of Mr. Karstetter, all of these persons
hold or have options to acquire stock of FMR Corp. The principal
business address of each of the Directors of FMR is 82 Devonshire
Street, Boston, Massachusetts 02109.
All of the stock of FMR is owned by its parent company, FMR Corp., 82
Devonshire Street, Boston, Massachusetts 02109, which was organized on
October 31, 1972. Members of Mr. Edward C. Johnson 3d and Ms.
Abigail P. Johnson's family are the predominant owners of a class
of shares of common stock, representing approximately 49% of the
voting power of FMR Corp., and, therefore, under the 1940 Act may be
deemed to form a controlling group with respect to FMR Corp.
During the period January 1, 1998 through September 30, 1999, no
transactions were entered into by Trustees and nominees as Trustee of
the trust involving more than 1% of the voting common, non-voting
common and equivalent stock, or preferred stock of FMR Corp.
ACTIVITIES AND MANAGEMENT OF FMR U.K. AND FMR FAR EAST
FMR U.K. and FMR Far East are wholly-owned subsidiaries of FMR formed
in 1986 to provide research and investment advice with respect to
companies based outside the United States for certain funds for which
FMR acts as investment adviser. FMR may also grant the sub-advisers
investment management authority as well as authority to buy and sell
securities for certain of the funds for which it acts as investment
adviser, if FMR believes it would be beneficial to a fund.
Funds with investment objectives similar to Fidelity International
Bond Fund and Fidelity New Markets Income Fund managed by FMR with
respect to which FMR currently has sub-advisory agreements with either
FMR U.K. or FMR Far East, and the net assets of each of these funds,
are indicated in the Table of Average Net Assets and Expense Ratios in
Exhibits 12 and 13 beginning on page 72 .
The Directors of FMR U.K. and FMR Far East are Edward C. Johnson 3d,
Chairman, and Robert C. Pozen, President. Mr. Johnson 3d also is
President and a Trustee of the trust and other funds advised by FMR;
Chairman and a Director of FIMM; Chairman, Chief Executive Officer,
President, and a Director of FMR Corp., and a Director and Chairman of
the Board and of the Executive Committee of FMR. In addition, Mr.
Pozen is Senior Vice President and a Trustee of the trust and of other
funds advised by FMR; President and a Director of FMR; and President
and a Director of FIMM. Each of the Directors is a stockholder of FMR
Corp. The principal business address of the Directors is 82 Devonshire
Street, Boston, Massachusetts 02109.
ACTIVITIES AND MANAGEMENT OF FIJ, FIIA, AND FIIA(U.K.)L
FMR, on behalf of Fidelity International Bond Fund, Fidelity New
Markets Income Fund, and Fidelity Strategic Income Fund has entered
into sub-advisory agreements with FIJ and FIIA, both wholly owned
subsidiaries of Fidelity International Limited (FIL). FIIA in turn has
entered into sub-advisory agreements with its U.K. subsidiary,
FIIA(U.K.)L.
The sub-advisers provide research and investment recommendations with
respect to companies based outside of the United States. FIJ focuses
on companies primarily based in Japan and other parts of Asia. FIIA
focuses primarily on companies based in Hong Kong, Australia, New
Zealand, and Southeast Asia (other than Japan). FIIA(U.K.)L focuses
primarily on companies based in the U.K. and Europe. Open-end funds
with investment objectives similar to Fidelity International Bond Fund
and Fidelity New Markets Income Fund managed by FMR with respect to
which FMR currently has sub-advisory agreements with either FIJ, FIIA
and/or FIIA(U.K.)L, and the net assets of each of these funds, are
indicated in the Tables of Average Net Assets and Expense Ratios in
Exhibits 12 and 13 beginning on page 72 .
The Directors of FIJ are Billy Wilder, President, Simon Haslam,
Edward C. Johnson 3d, Noboru Kawai, Yasuo Kuramoto, Tetsuzo Nishimura,
Takeshi Okazaki, and Hiroshi Yamashita. With the exception of Mr.
Edward C. Johnson 3d, the principal business address of each of the
Directors is Shiroyama JT Mori Building, 4-3-1 Toranomon, Minato-ku,
Tokyo 105, Japan. The principal business address of Mr. Edward C.
Johnson 3d is 82 Devonshire Street, Boston, Massachusetts 02109.
The Directors of FIIA are Simon Fraser, President, Anthony J.
Bolton, Keith Ferguson, Simon Haslam, Richard Horlick, K.C. Lee, Frank
Mutch, Peter Phillips, and David J. Saul. The principal business
address of each of the Directors is Pembroke Hall, 42 Crow Lane,
Pembroke HM19, Bermuda.
The Directors of FIIA(U.K.)L are Anthony Bolton, Pamela Edwards,
Simon Haslam, and Sally Walden. The principal business address of each
of the Directors is 26 Lovat Lane, London, EC3R 8LL, England.
FIIA also is the investment adviser of Fidelity Advisor Korea Fund,
Inc., a closed-end investment company with net assets of approximately
$ 42,716,548 , as of December 31, 1998 . As compensation
for its services to the closed-end fund, FIIA receives 60% of the
management fee paid by the fund to FMR. The Korea Fund management fee
is payable monthly at an annual rate equal to 1.00% of Korea Fund's
average daily net assets. At FIIA's request, FIJ may provide
sub-advisory services with respect to the fund's investments. As
compensation for these services, FIJ would receive 50% of the fee paid
to FIIA by the fund in respect of the assets of the fund managed by
FIJ on a discretionary basis and 30% of the fee paid to FIIA in
respect of the assets of the fund managed by FIJ on a
non-discretionary basis.
SUB-ADVISORY AGREEMENTS
On behalf of Fidelity Strategic Income Fund and Spartan Intermediate
Municipal Income Fund, FMR has entered into a sub-advisory agreement
with Fidelity Investments Money Management, Inc. (FIMM) pursuant to
which FIMM chooses certain types of investments for Fidelity
Strategic Income Fund and ha s primary responsibility for providing
portfolio investment management services for Spartan
Intermediate Municipal Income Fund. Under 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. For the fiscal year ended December
31, 1998, FMR paid FIMM no fees on behalf of Fidelity Strategic Income
Fund and Spartan Intermediate Municipal Income Fund.
On behalf of Fidelity International Bond Fund, Fidelity New Markets
Income Fund, and Fidelity Strategic Income Fund, FMR has entered into
sub-advisory agreements with FMR U.K., FMR Far East, FIJ, and FIIA.
FIIA, in turn, has entered into a sub-advisory agreement with
FIIA(U.K.)L. Pursuant to the sub-advisory agreements, FMR may receive
investment advice and research services outside the United States from
the sub-advisers. On behalf of Fidelity International Bond Fund,
Fidelity New Markets Income Fund, and Fidelity Strategic Income Fund,
FMR may also 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.
Sub-advisory agreements for the funds were approved as follows:
Fund Sub-Advisor Approval Date Contract Date
Fidelity International Bond FMR Far East 09/17/97 02/26/98
Fund
FMR (U.K.) 09/17/97 02/26/98
FIIA 07/15/99 08/01/99
FIIA(U.K.)L 09/17/97 02/26/98
FIJ 07/15/99 08/01/99
Fidelity New Markets Income FMR Far East 09/17/97 02/26/98
Fund
FMR (U.K.) 09/17/97 02/26/98
FIIA 07/15/99 08/01/99
FIIA(U.K.)L 09/17/97 02/26/98
FIJ 07/15/99 08/01/99
Fidelity Strategic Income Fund FMR Far East 04/22/98* 04/16/98
FMR (U.K.) 04/22/98* 04/16/98
FIIA 04/22/98* 04/16/98
FIIA(U.K.)L 04/22/98* 04/16/98
FIJ 04/22/98* 04/16/98
* Approved by sole shareholder prior to commencement of operations.
Currently, FMR U.K., FMR Far East, FIJ, FIIA, and FIIA(U.K.)L each
focus on issuers in countries other than the United States such as
those in Europe, Asia, and the Pacific Basin.
FMR U.K. and FMR Far East, which were organized in 1986, are
wholly-owned subsidiaries of FMR. FIJ and FIIA are wholly-owned
subsidiaries of Fidelity International Limited (FIL), a Bermuda
company formed in 1968 which primarily provides investment advisory
services to non-U.S. investment companies and institutional investors
investing in securities throughout the world. Edward C. Johnson 3d,
Johnson family members, and various trusts for the benefit of the
Johnson family owns, directly or indirectly, more than 25% of the
voting common stock of FIL. FIJ was organized in Japan in 1986. FIIA
was organized in Bermuda in 1983. FIIA(U.K.)L was organized in the
United Kingdom in 1984, and is a wholly-owned subsidiary of Fidelity
International Management Holdings Limited, an indirect wholly owned
subsidiary of FIL.
Under the sub-advisory agreements FMR pays the fees of FMR U.K., FMR
Far East, FIJ, and FIIA. FIIA, in turn, pays the fees of FIIA(U.K.)L.
For providing non-discretionary investment advice and research
services the sub-advisers are compensated as follows:
(medium solid bullet) FMR pays FMR Far East and FMR U.K. fees equal
to 105% and 110%, respectively, of FMR U.K.'s and FMR Far East's costs
incurred in connection with providing investment advice and research
services.
(medium solid bullet) FMR pays FIIA and FIJ fees equal to 30% of
FMR's monthly management fee with respect to the average net assets
held by the fund for which the sub-adviser has provided FMR with
investment advice and research services.
(medium solid bullet) FIIA pays FIIA(U.K.)L a fee equal to 110% of
FIIA(U.K.)L's costs incurred in connection with providing investment
advice and research services.
For providing discretionary investment management and executing
portfolio transactions, the sub-advisers are compensated as follows:
(medium solid bullet) FMR pays FMR Far East and FMR U.K. 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.
(medium solid bullet) FMR pays FIIA and FIJ a fee equal to 57% of its
monthly management fee with respect to the fund's average net assets
managed by the sub-advisors on a discretionary basis.
(medium solid bullet) FIIA pays FIIA(U.K.)L a fee equal to 110% of
FIIA(U.K.)L's costs incurred in connection with providing
discretionary investment management services.
F or providing investment advice and research services, the fees
paid to the subadvisors for the fiscal year ended 1998 were as
follows :
FMR U.K. FMR Far East FIIA FIIAL U.K. FIJ
International Bond $ 0 $ 0 $ 121,889 $ 75,948 $ 0
New Markets Income $ 0 $ 0 $ 0 $ 0 $ 0
Strategic Income $ 0 $ 0 $ 0 $ 0 $ 0
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are
placed on behalf of Fidelity International Bond Fund, Fidelity New
Markets Income Fund, and Fidelity Strategic Income Fund by FMR
pursuant to authority contained in the fund's management contract.
FMR may place agency transactions with National Financial Services
Corporation (NFSC) and Fidelity Brokerage Services (Japan), LLC
(FBSJ), indirect subsidiaries of FMR Corp., if the commissions are
fair, reasonable, and comparable to commissions charged by
non-affiliated, qualified brokerage firms for similar services.
All orders for the purchase or sale of portfolio securities are
placed on behalf of Spartan Intermediate Municipal Income Fund by FMR
pursuant to authority contained in the fund's management contract.
FMR may place agency transactions with NFSC , an indirect
subsidiary of FMR Corp., if the commissions are fair, reasonable, and
comparable to commissions charged by non-affiliated, qualified
brokerage firms for similar services.
For the fiscal year ended December 31, 1998, Fidelity International
Bond Fund, Fidelity New Markets Income Fund, Fidelity Strategic
Income Fund , and S partan Intermediate Municipal Income
Fun d paid no brokerage commissions to affiliated brokers.
SUBMISSION OF CERTAIN SHAREHOLDER PROPOSALS
The trust does not hold annual shareholder meetings. Shareholders
wishing to submit proposals for inclusion in a proxy statement for a
subsequent shareholder meeting should send their written proposals to
the Secretary of the Trust, 82 Devonshire Street, Boston,
Massachusetts 02109.
NOTICE TO BANKS, BROKER-DEALERS AND
VOTING TRUSTEES AND THEIR NOMINEES
Please advise the trust, in care of Fidelity Service Company, Inc.,
P.O. Box 789, Boston, MA 02109, whether other persons are beneficial
owners of shares for which proxies are being solicited and, if so, the
number of copies of the Proxy Statement and Annual Reports you wish to
receive in order to supply copies to the beneficial owners of the
respective shares.
EXHIBIT 1
((UNDERLINED)) LANGUAGE WILL BE ADDED
[BRACKETED] LANGUAGE WILL BE DELETED
AMENDED AND RESTATED DECLARATION OF TRUST
[DATED JANUARY 19, 1995]
The language to be added to the current Declaration of Trust is
((underlined)), and the language to be deleted is set forth in
[brackets]. Headings that were underlined in the trust's current
Declaration of Trust must remain underlined in this Exhibit.
AMENDED AND RESTATED DECLARATION OF TRUST, made January 19, [1995]
((2000)) 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 September 10, 1976 by
Edward C. Johnson 3d, Caleb Loring, Jr., William L. Byrnes, Dwight L.
Allison, Jr., Eugene A. Clapp 2nd, Robert L. Johnson, George K.
McKenzie and William R. Spalding in order to establish a trust fund
for the investment and reinvestment of funds contributed thereto;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust fund hereunder shall be held and managed in
[T]((t))rust under this Amended and Restated Declaration of Trust as
herein set forth below.
ARTICLE I
NAME AND DEFINITIONS
NAME
SECTION 1. This Trust shall be known as "Fidelity School Street
Trust((.))"[.]
DEFINITIONS
SECTION 2. Wherever used herein, unless otherwise required by the
context or specifically provided:
(a) The [T]((t))erms "Affiliated Person((,))"[,] "Assignment((,))"[,]
"Commission((,))"[,] "Interested Person((,))"[,] "Majority Shareholder
Vote" (the 67% or 50% requirement of the third sentence of Section
2(a)(42) of the 1940 Act, whichever may be applicable)((,)) and
"Principal Underwriter" shall have the meanings given them in the 1940
Act, as [amended from time to time]((modified by or interpreted by any
applicable order or orders of the Commission or any rules or
regulations adopted or interpretative releases of the Commission
thereunder));
(((b) "Bylaws" shall mean the bylaws of the Trust, if any, as amended
from time to time;))
(((c) "Class" refers to the class of Shares of a Series of the Trust
established in accordance with the provisions of Article III;))
(((d) "Declaration of Trust" means this Amended and Restated
Declaration of Trust, as further amended or restated, from time to
time;))
[(c)](((e))) "Net Asset Value" means the net asset value of each
Series of the Trust ((or Class thereof)) determined in the manner
provided in Article X, Section 3;
[(d)](((f))) "Shareholder" means a record owner of Shares of the
Trust;
[(f)](((g))) "Shares" means the equal proportionate transferable
units of interest into which the beneficial interest of the Trust or
each Series shall be divided from time to time, including such
[c]((C))lass or [c]((C))lasses of [s]((S))hares 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[.]((;))
[(b)](((i))) [The ]"Trust" refers to Fidelity School Street Trust and
reference to the Trust, when applicable to one or more [s]((S))eries
of the Trust, shall refer to any such [s]((S))eries;
[(e)](((j))) [The ]"Trustees" refer to the individual trustees in
their capacity as trustees hereunder of the Trust and their successor
or successors for the time being in office as such trustee or
trustees;(( and))
[(g)](((k))) [The ]"1940 Act" refers to the Investment Company Act of
1940, as amended from time to time[; and]((.))
ARTICLE II
PURPOSE OF TRUST
The purpose of this Trust is to provide investors a continuous source
of managed investment in securities.
ARTICLE III
BENEFICIAL INTEREST
SHARES OF BENEFICIAL INTEREST
SECTION 1. The beneficial interest in the Trust shall be divided into
such transferable Shares of one or more separate and distinct Series
or [c]((C))lasses ((of Series ))as the Trustees shall((,)) from time
to time((,)) create and establish. The number of ((authorized ))Shares
((of each Series, and Class thereof, ))is unlimited[ and]((.))
[e]((E))ach Share shall be without par value and shall be fully paid
and nonassessable. The Trustees shall have full power and authority,
in their sole discretion((,)) and without obtaining any prior
authorization or vote of the Shareholders [or]((of ))any Series or
[c]((C))lass of [Shareholders] the Trust[,] (((a) ))to create and
establish (and to change in any manner) Shares or any Series or
[c]((C))lasses thereof with such preferences, voting powers,
rights((,)) and privileges as the Trustees may((,)) from time to
time((,)) determine[,]((; (b))) to divide or combine the Shares or any
Series or [c]((C))lasses thereof into a greater or lesser number[,]((;
(c))) to classify or reclassify any issued Shares into one or more
Series ((or Classes ))of Shares[,]((; (d))) to abolish any one or more
Series or [c]((C))lasses 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.)) At any time that there are no Shares outstanding of any
particular Series ((or Class ))previously established and designated,
the Trustees may by a majority vote abolish [that]((such ))Series ((or
Class ))and the establishment and designation thereof.
OWNERSHIP OF SHARES
SECTION 3. The ownership of Shares shall be recorded in the books of
the Trust[.](( or a transfer or similar agent.)) The Trustees may make
such rules as they consider appropriate for the transfer of Shares and
similar matters. The record books of ((the Trust as kept by ))the
Trust ((or by any transfer or similar agent, as the case may be,
))shall be conclusive as to who are the holders of Shares and as to
the number of Shares held from time to time by each Shareholder.
INVESTMENT IN THE TRUST
SECTION 4. The Trustees shall accept investments in the Trust from
such persons and on such terms as they may((,)) from time to time((,))
authorize. Such investments may be in the form of cash((,))
[or]securities((,)) ((or other property ))in which the appropriate
Series is authorized to invest, valued as provided in Article X,
Section 3. After the date of the initial contribution of capital, the
number of Shares to represent the initial contribution may in the
Trustees' discretion be considered as outstanding((,)) and the amount
received by the Trustees on [the ]account of the contribution shall be
treated as an asset of the Trust. Subsequent investments in the Trust
shall be credited to each Shareholder's account in the form of full
Shares at the Net Asset Value per Share next determined after the
investment is received; provided, however, that the Trustees may, in
their sole discretion[,] (a) impose a sales charge ((or other fee
))upon investments in the Trust ((or Series or any Classes thereof,
))and (b) issue fractional Shares.
[ASSETS AND LIABILITIES OF SERIES]
((ASSETS AND LIABILITIES OF SERIES AND CLASSES))
SECTION 5. All consideration received by the Trust for the issue or
sale of Shares of a particular Series, together with all assets in
which such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof, including any proceeds
derived from the sale, exchange((,)) or liquidation of such assets,
and any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall be referred to as
"assets belonging to" that Series. In addition((,)) any assets,
income, earnings, profits, and proceeds thereof, funds, or payments
[which]((that)) are not readily identifiable as belonging to any
particular Series ((or Class, ))shall be allocated by the Trustees
between and among one or more of the Series ((or Classes ))in such
manner as they, in their sole discretion, deem fair and equitable.
Each such allocation shall be conclusive and binding upon the
Shareholders of all Series ((or Classes)) for all purposes[,] and
shall be referred to as assets belonging to that Series[.](( or
Class.)) The assets belonging to a particular Series shall be so
recorded upon the books of the Trust[,] ((or of its agent or agents
))and shall be held by the Trustees in 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 [which]((that)) are not readily identifiable as belonging to
any particular Series ((or Class ))shall be allocated and charged by
the Trustees between or among any one or more of the Series ((or
Classes ))in such manner as the Trustees((,)) in their sole
discretion((,)) deem fair and equitable[.](( and shall be referred to
as "liabilities belonging to" that Series or Class.)) Each such
allocation shall be conclusive and binding upon the Shareholders of
all Series ((or Classes ))for all purposes. Any creditor of any Series
may look only to the assets of that Series to satisfy such creditor's
debt. ((No Shareholder or former Shareholder of any Series shall have
a claim on or any right to any assets allocated or belonging to any
other Series.))
NO PREEMPTIVE RIGHTS
SECTION 6. [The]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.
[ELECTION: INITIAL TRUSTEES]
((INITIAL TRUSTEES; ELECTION))
SECTION 2. ((The initial Trustees shall be at least three individuals
who shall affix their signatures hereto.)) [On or before December 31,
1977, o]((O))n a date fixed by the Trustees, the Shareholders shall
elect not less than three Trustees. A Trustee shall not be required to
be a Shareholder of the Trust. [The initial Trustees who shall serve
until such election and until their successors are elected and
qualified shall be Edward C. Johnson 3d, Caleb Loring, Jr., William L.
Byrnes, Dwight L. Allison, Jr., Eugene A. Clapp 2nd, Robert L.
Johnson, George K. McKenzie and William R. Spalding and such other
individuals as the Board of Trustees shall appoint pursuant to Section
4 of the Article IV.]
TERM OF OFFICE OF TRUSTEES
SECTION 3. The Trustees shall hold office during the lifetime of this
Trust, and until its termination as hereinafter provided; except (a)
that any Trustee may resign his trust by written instrument signed by
him and delivered to the other Trustees, which shall take effect upon
such delivery or upon such later date as is specified therein; (b)
that any Trustee may be removed at any time by written instrument,
signed by at least two-thirds (((2/3) ))of the number of Trustees
prior to such removal, specifying the date when such removal shall
become effective; (c) that any Trustee who requests in writing to be
retired or who has become incapacitated by illness or injury may be
retired by written instrument signed by a majority of the other
Trustees, specifying the date of his retirement; and (d) a Trustee may
be removed at any [S]((s))pecial [M]((m))eeting of the Trust by a vote
of two-thirds (((2/3) ))of the outstanding Shares.
RESIGNATION AND APPOINTMENT OF TRUSTEES
SECTION 4. In case of the declination, death, resignation,
retirement, ((or ))removal[, incapacity, or inability] of any of the
Trustees, or in case a vacancy shall, by reason of an increase in
number[,] ((of the Trustees, ))or for any other reason, exist, the
remaining Trustees shall fill such vacancy by appointing such other
person as they in their discretion shall see fit consistent with the
limitations under the [Investment Company Act of ]1940[.](( Act.))
Such appointment shall be evidenced by a written instrument signed by
a majority of the Trustees in office or by recording in the records of
the Trust, whereupon the appointment shall take effect. An appointment
of a Trustee may be made by the Trustees then in office in
anticipation of a vacancy to occur by reason of retirement,
resignation((,)) or increase in number of Trustees effective at a
later date, provided that said appointment shall become effective only
at or after the effective date of said retirement, resignation((,)) or
increase in number of Trustees. As soon as any Trustee so appointed
shall have accepted this [t]((T))rust, the [t]((T))rust estate shall
vest in the new Trustee or Trustees, together with the continuing
Trustees, without any further act or conveyance, and he shall be
deemed a Trustee hereunder. The ((foregoing ))power of appointment is
subject to the provisions of Section 16(a) of the 1940 Act[.](( , as
modified by or interpreted by any applicable order or orders of the
Commission or any rules or regulations adopted or interpretative
releases of the Commission.))
[TEMPORARY ABSENCE OF TRUSTEE]
((TEMPORARY ABSENCE OF TRUSTEES))
SECTION 5. Any Trustee may, by power of attorney, delegate his power
for a period not exceeding six (((6))) months at any one time to any
other Trustee or Trustees, provided that in no case shall less than
two Trustees personally exercise the other powers hereunder except as
herein otherwise expressly provided.
NUMBER OF TRUSTEES
SECTION 6. The number of Trustees, not less than three (3) nor more
than twelve (12), serving hereunder at any time shall be determined by
the Trustees themselves.
Whenever a vacancy in the Board of Trustees shall occur, until such
vacancy is filled, or while any Trustee is [absent from the
Commonwealth of Massachusetts or, if not a domiciliary of
Massachusetts, is absent from his state of domicile, or is ]physically
or mentally incapacitated by reason of disease or otherwise, the other
Trustees shall have all the powers hereunder and the certificate of
the other Trustees of such vacancy[, absence] or incapacity[,] shall
be conclusive[, provided, however, that no vacancy shall remain
unfilled for a period longer than six calendar months.]((.))
EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE
SECTION 7. The death, declination, resignation, retirement, removal,
incapacity, or inability of the Trustees, or any one of them, shall
not operate to annul the Trust or to revoke any existing agency
created pursuant to the terms of this Declaration of Trust.
OWNERSHIP OF ASSETS OF THE TRUST
SECTION 8. The assets of the Trust shall be held separate and apart
from any assets now or hereafter held in any capacity other than as
Trustee hereunder by the Trustees or any successor Trustees. All of
the assets of the Trust shall at all times be considered as vested in
the Trustees. No Shareholder shall be deemed to have a severable
ownership in any individual asset of the Trust or any right of
partition or possession thereof, but each Shareholder shall have a
proportionate undivided beneficial interest in the Trust.
ARTICLE V
POWERS OF THE TRUSTEES
POWERS
SECTION 1. The Trustees((,)) in all instances((,)) shall act as
principals[,] and are and shall be free from the control of the
Shareholders. The Trustees shall have full power and authority to do
any and all acts and to make and execute any and all contracts and
instruments that they may consider necessary or appropriate in
connection with the management of the Trust. ((Except as otherwise
provided herein or in the 1940 Act,)) [T]((t))he Trustees shall not in
any way be bound or limited by present or future laws or customs in
regard to trust investments, but shall have full authority and power
to make any and all investments [which]((that)) they, in their
[uncontrolled ]discretion, shall deem proper to accomplish the purpose
of this Trust. Subject to any applicable limitation in [the]((this))
Declaration of Trust or the Bylaws of the Trust, ((if any, ))the
Trustees shall have power and authority:
(a) To invest and reinvest cash and other property, and to hold cash
or other property uninvested[,] without((,)) in any event((,)) being
bound or limited by any present or future law or custom in regard to
investments by Trustees, and to sell, exchange, lend, pledge,
mortgage, hypothecate, write options on((,)) and lease any or all of
the assets of the Trust.
(b) To adopt Bylaws not inconsistent with this Declaration of Trust
providing for the conduct of the business of the Trust and to amend
and repeal them to the extent that they do not reserve that right to
the Shareholders.
(c) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate.
(d) To employ [a] ((one or more ))bank((s,)) [or ]trust
compan[y]((ies, companies that are members of a national securities
exchange, or other entities permitted under the 1940 Act, as modified
by or interpreted by any applicable order or orders of the Commission
or any rules or regulations adopted or interpretative releases of the
Commission thereunder, ))as custodian((s)) of any assets of the Trust
subject to any conditions set forth in this Declaration of Trust or in
the Bylaws, if any.
(e) To retain a transfer agent and Shareholder servicing agent, or
both.
(f) To provide for the distribution of interests of the Trust either
through a [p]((P))rincipal [u]((U))nderwriter in the manner
hereinafter provided for or by the Trust itself, or both.
(g) To set record dates in the manner hereinafter provided for.
(h) To delegate such authority as they consider desirable to any
officers of the Trust and to any [agent,]((investment adviser,
manager,)) custodian((,)) [or ]underwriter[.]((, or other agent or
independent contractor.))
(i) To sell or exchange any or all of the assets of the Trust,
subject to the provisions of Article XII, Section 4[(b)] hereof.
(j) To vote or give assent[,] or exercise any rights of ownership[,]
with respect to stock or other securities or property; and to execute
and deliver powers of attorney to such person or persons as the
Trustees shall deem proper, granting to such person or persons such
power and discretion with relation to securities or property as the
Trustees shall deem proper.
(k) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities.
(l) To hold any security or property in a form not indicating any
trust, whether in bearer, unregistered((,)) or other negotiable form;
or either in its own name or in the name of a custodian or a nominee
or nominees[, subject in either case to proper safeguards according to
the usual practice of Massachusetts trust companies or investment
companies.]((.))
(m) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes in
accordance with the provisions of Article III[.](( and to establish
Classes of such Series having relative rights, powers, and duties as
the Trustees may provide consistent with applicable laws.))
(n) To allocate assets, liabilities((,)) and expenses of the Trust to
a particular Series ((or Class, as appropriate, ))or to apportion the
same between or among two or more Series[,] ((or Classes, as
appropriate, ))provided that any liabilities or expenses incurred by a
particular Series ((or Class ))shall be payable solely out of the
assets belonging to that Series as provided for in Article III.
(o) To consent to or participate in any plan for the reorganization,
consolidation((,)) or merger of any corporation or concern, any
security of which is held in the Trust; to consent to any contract,
lease, mortgage, purchase, or sale of property by such corporation or
concern, and to pay calls or subscriptions with respect to any
security held in the Trust.
(p) To compromise, arbitrate, or otherwise adjust claims in favor of
or against the Trust or any matter in controversy((,)) including, but
not limited to, claims for taxes.
(q) To make distributions of income and of capital gains to
Shareholders in the manner hereinafter provided for.
(r) To borrow money, and to pledge, mortgage((,)) or hypothecate the
assets of the Trust, subject to ((the ))applicable
[limitations]((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) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary,
suitable or proper for the accomplishment of any purpose or the
attainment of any object or the furtherance of any power hereinbefore
set forth, either alone or in association with others, and to do every
other act or thing incidental or appurtenant to or growing out of or
connected with the aforesaid business or purposes, objects or
powers.))
[(t)](((w))) Notwithstanding any other provision hereof, to invest
all of the assets of any [s]((S))eries in a single open-end investment
company, including investment by means of transfer of such assets in
exchange for an interest or interests in such investment company.
((The foregoing clauses shall be construed both as objects and
powers, and the foregoing enumeration of specific powers shall not be
held to limit or restrict in any manner the general powers of the
Trustees. Any action by one or more of the Trustees in their capacity
as such hereunder shall be deemed an action on behalf of the Trust or
the applicable Series and not an action in an individual capacity.))
((The Trustees shall not be limited to investing in obligations
maturing before the possible termination of the Trust or any Series or
Class thereof.))
No one dealing with the Trustees shall be under any obligation to
make any inquiry concerning the authority of the Trustees, or to see
to the application of any payments made or property transferred to the
Trustees or upon their order.
TRUSTEES AND OFFICERS AS SHAREHOLDERS
SECTION 2. Any Trustee, officer or other agent of the Trust may
acquire, own and dispose of Shares to the same extent as if he were
not a Trustee, officer or agent; and the Trustees may issue and sell
or cause to be issued and sold Shares to and buy such Shares from any
such person of any firm or company in which he is interested, subject
only to the general limitations herein contained as to the sale and
purchase of such Shares; and all subject to any restrictions which may
be contained in the Bylaws[.]((, if any.))
ACTION BY THE TRUSTEES
SECTION 3. ((Except as otherwise provided herein or in the 1940 Act,
))[T]((t))he Trustees shall act by majority vote at a meeting duly
called or by unanimous written consent without a meeting or by
telephone consent provided a quorum of Trustees participate in any
such telephonic meeting, unless the 1940 Act requires that a
particular action be taken only at a meeting [of]((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,)) [or
]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 [t]((T))rust estate or the
assets belonging to the appropriate Series for their expenses and
disbursements, including, without limitation, fees and expenses of
Trustees who are not Interested Persons of the Trust[,]((;)) interest
expense, taxes, fees and commissions of every kind[,]((;)) expenses of
pricing Trust portfolio securities[,]((;)) expenses of issue,
repurchase and redemption of shares including expenses attributable to
a program of periodic repurchases or redemptions, expenses of
registering and qualifying the Trust and its Shares under Federal and
[S]((s))tate laws and regulations[,]((;)) charges of custodians,
transfer agents, and registrars[,]((;)) expenses of preparing and
setting up in type prospectuses and [S]((s))tatements of
[A]((a))dditional [I]((i))nformation[,]((;)) 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 [(a)]((an exclusive or non-exclusive)) contract(s) ((on
behalf of the Trust or any Series or Class thereof ))providing for the
sale of the Shares, whereby the Trust may either agree to sell the
Shares to the other party to the contract or appoint such other party
its sales agent for such Shares. In either case, the contract shall be
on such terms and conditions as may be prescribed in the Bylaws, if
any, and such further terms and conditions as the Trustees may((,)) in
their discretion((,)) determine not inconsistent with the provisions
of this Article VII[,] or of the Bylaws, if any[;]((.)) [and
s]((S))uch contract may also provide for the repurchase or sale of
Shares by such other party as principal or as agent of the Trust.
TRANSFER AGENT
SECTION 3. The Trustees may((,)) in their discretion ((and ))from
time to time((,)) enter into [a]((one or more)) transfer agency and
Shareholder service contract((s)) whereby the other party shall
undertake to furnish the Trustees with transfer agency and Shareholder
services. [The]((Such)) contract((s)) shall be on such terms and
conditions as the Trustees may((,)) in their discretion((,)) determine
not inconsistent with the provisions of this Declaration of Trust or
of the Bylaws, if any. Such services may be provided by one or more
entities.
PARTIES TO CONTRACT
SECTION 4. Any contract of the character described in Sections 1, 2
and 3 of this Article VII or in Article IX hereof may be entered into
with any corporation, firm, partnership, trust or association,
although one or more of the Trustees or officers of the Trust may be
an officer, director, trustee, shareholder, or member of such other
party to the contract, and no such contract shall be invalidated or
rendered voidable by reason of the existence of any relationship, nor
shall any person holding such relationship be liable merely by reason
of such relationship for any loss or expense to the Trust under or by
reason of said contract or accountable for any profit realized
directly or indirectly therefrom, provided that the contract when
entered into was reasonable and fair and not inconsistent with the
provisions of this Article VII or the Bylaws, if any. The same person
(including a firm, corporation, partnership, trust, or association)
may be the other party to contracts entered into pursuant to Sections
1, 2 and 3 above or Article IX, and any individual may be financially
interested or otherwise affiliated with persons who are parties to any
or all of the contracts mentioned in this Section 4.
PROVISIONS AND AMENDMENTS
SECTION 5. Any contract entered into pursuant to Sections 1 and 2 of
this Article VII shall be consistent with and subject to the
requirements of Section 15 of the 1940 Act((, as modified by or
interpreted by any applicable order or orders of the Commission or any
rules or regulations adopted or interpretative releases of the
Commission)) ([including any amendments thereof ] or other applicable
Act of Congress hereafter enacted)((,)) with respect to its
continuance in effect, ((its amendment,)) its termination, and the
method of authorization and approval of such contract or renewal
thereof[, and no amendment to any contract, entered into pursuant to
Section 1 shall be effective unless assented to by a Majority
Shareholder Vote.]((.))
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
SECTION 1. The Shareholders shall have power to vote [(i)](((a))) for
the election of Trustees as provided in Article IV, Section 2[,
(ii)]((; (b))) for the removal of Trustees as provided in Article IV,
Section 3(d)[, (iii)]((; (c))) with respect to any investment advisory
or management contract as provided in Article VII, ((Sections 1 and 5;
(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 [1, (iv)]((4; (e))) with
respect to the amendment of this Declaration of Trust as provided in
Article XII, Section 7[, (v)]((; (f))) to the same extent as the
shareholders of a Massachusetts business corporation, as to whether or
not a court action, proceeding or claim should be brought or
maintained derivatively or as a class action on behalf of the Trust or
the Shareholders, provided, however, that a Shareholder of a
particular Series shall not be entitled to bring any derivative or
class action on behalf of any other Series of the Trust[,]((;)) and
[(vi)](((g))) with respect to such additional matters relating to the
Trust as may be required or authorized by law, by this Declaration of
Trust, or the Bylaws of the Trust, if any, or any registration of the
Trust with the [Securities and Exchange] Commission [(the
"Commission")] or any [S]((s))tate as the Trustees may consider
desirable.
On any matter submitted to a vote of the Shareholders, all
[s]((S))hares shall be voted by individual Series, ((except as
provided in the following sentence and ))except [(i)](((a))) when
required by the 1940 Act, Shares shall be voted in the aggregate and
not by individual Series; and [(ii)](((b))) when the Trustees have
determined that the matter affects only the interests of one or more
Series, then only the Shareholders of such Series shall be entitled to
vote thereon. ((The Trustees may also determine that a matter affects
only the interests of one or more Classes of a Series, in which case,
any such matter shall be voted on by such Class or Classes.)) A
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 [the
same may be amended from time to time,]((modified by or interpreted by
any applicable order or orders of the Commission or any rules or
regulations adopted or interpretative releases of the Commission,))
seek the opportunity of furnishing materials to the other Shareholders
with a view to obtaining signatures on such a request for a meeting,
the Trustees shall comply with the provisions of said Section 16(c)
with respect to providing such Shareholders access to the list of the
Shareholders of record of the Trust or the mailing of such materials
to such Shareholders of record. Shareholders shall be entitled to at
least fifteen (((15) ))days' notice of any meeting.
QUORUM AND REQUIRED VOTE
SECTION 3. A majority of Shares entitled to vote in person or by
proxy shall be a quorum for the transaction of business at a
Shareholders' meeting, except that where any provision of law or of
this Declaration of Trust permits or requires that holders of any
Series ((or Class ))shall vote as a Series[,] ((or Class ))then a
majority of the aggregate number of Shares of that Series ((or Class))
entitled to vote shall be necessary to constitute a quorum for the
transaction of business by that Series[.](( or Class.)) Any lesser
number shall be sufficient for adjournments. Any adjourned session or
sessions may be held, within a reasonable time after the date set for
the original meeting, without the necessity of further notice. Except
when a larger vote is required ((by applicable law or ))by any
provision of this Declaration of Trust or the Bylaws, ((if any, ))a
majority of the Shares voted in person or by proxy shall decide any
questions and a plurality shall elect a Trustee, provided that where
any provision of law or of this Declaration of Trust permits or
requires that the holders of any Series ((or Class)) shall vote as a
Series[,] ((or Class, ))then a majority of the Shares of that Series
((or Class ))voted on the matter shall decide that matter insofar as
that Series ((or Class ))is concerned. ((Shareholders may act by
unanimous written consent. Actions taken by a Series or Class may be
consented to unanimously in writing by Shareholders of that Series or
Class.))
ARTICLE IX
CUSTODIAN
APPOINTMENT AND DUTIES
SECTION 1. The Trustees shall at all times employ a bank [or trust
company]((, a company that is a member of a national securities
exchange, trust company, or other entity permitted under the 1940 Act,
as modified by or interpreted by any applicable order or orders of the
Commission or any rules or regulations adopted or interpretative
releases of the Commission thereunder,)) having capital, surplus((,))
and undivided profits of at least two million dollars ($2,000,000), or
such other amount [or such other entity] as shall be allowed by the
Commission or by the 1940 Act, as custodian with authority as its
agent, but subject to such restrictions, limitations and other
requirements, if any, as may be contained in the Bylaws of the
Trust[:]((, if any:))
(1) to hold the securities owned by the Trust and deliver the same
upon written order or oral order, if confirmed in writing, or by such
electro-mechanical or electronic devices as are agreed to by the Trust
and the custodian, if such procedures have been authorized in writing
by the Trust;
(2) to receive and receipt for any moneys due to the Trust and
deposit the same in its own banking department or elsewhere as the
Trustees may direct; and
(3) to disburse such funds upon orders or vouchers;
and the Trust may also employ such custodian as its agent:
(1) to keep the books and accounts of the Trust and furnish clerical
and accounting services; and
(2) to compute, if authorized to do so[ by the Trustees], the Net
Asset Value of any Series ((or Class thereof ))in accordance with the
provisions hereof;(( all upon such basis of compensation as may be
agreed upon between the Trustees and the custodian.))
[all upon such basis of compensation as may be agreed upon between
the Trustees and the custodian. If so directed by a Majority
Shareholder Vote, the custodian shall deliver and pay over all
property of the Trust held by it as specified in such vote.]
The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and
services of the custodian, and upon such terms and conditions, as may
be agreed upon between the custodian and such sub-custodian and
approved by the Trustees, provided that in every case such
sub-custodian shall be a bank((, a company that is a member of a
national securities exchange,)) [or ]trust company[ organized]((, or
other entity permitted)) under the [laws of the United States or one
of the states thereof]((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,)) [and ]having capital[ and]((,)) surplus((,)) and
undivided profits of at least two million dollars ($2,000,000)((,)) or
such other [person]((amount)) as [may]((shall)) be
[permitted]((allowed)) by the Commission[,] or [otherwise in
accordance with]((by)) the 1940 Act[ as from time to time
amended.]((.))
[CENTRAL CERTIFICATE SYSTEM]
((CENTRAL DEPOSITORY SYSTEM))
SECTION 2. Subject to such rules, regulations and orders as the
Commission may adopt, the Trustees may direct the custodian to deposit
all or any part of the securities owned by the Trust in a system for
the central handling of securities established by a national
securities exchange or a national securities association registered
with the Commission under the Securities Exchange Act of 1934[,] or
such other person as may be permitted by the Commission[,] or
otherwise in accordance with the 1940 Act[ as from time to time
amended], pursuant to which system all securities of any particular
class or series of any issuer deposited within the system are treated
as fungible and may be transferred or pledged by bookkeeping entry
without physical delivery of such securities[,]((;)) provided that all
such deposits shall be subject to withdrawal only upon the order of
the Trust[.](( or its custodian, subcustodians, or other authorized
agents.))
ARTICLE X
[DISTRIBUTIONS AND REDEMPTIONS]
DISTRIBUTIONS, REDEMPTIONS AND DETERMINATION OF NET ASSET VALUE
DISTRIBUTIONS
SECTION 1.
(a) The Trustees may from time to time declare and pay dividends. The
amount of such dividends and the payment of them shall be wholly in
the discretion of the Trustees.
(b) The Trustees shall have ((the ))power, to the fullest extent
permitted by the laws of Massachusetts, at any time to declare and
cause to be paid dividends on Shares of a particular Series, from the
assets belonging to that Series, which dividends, at the election of
the Trustees, may be paid daily or otherwise pursuant to a standing
resolution or resolutions adopted only once or with such frequency as
the Trustees may determine, and may be payable in Shares of that
Series((, or Classes thereof,)) at the election of each Shareholder of
that Series.
((The Trustees may adopt and offer to Shareholders such dividend
reinvestment plans, cash dividend payout plans, or related plans as
the Trustees shall deem appropriate.))
(c) Anything in this instrument to the contrary notwithstanding, the
Trustees may at any time declare and distribute ((a stock dividend
))pro rata among the Shareholders of a particular Series((, or Class
thereof, ))as of the record date of that Series ((or Class ))fixed as
provided in Article XII, Section 3[ hereof a "stock dividend."]((.))
REDEMPTIONS
SECTION 2. In case any holder of record of Shares of a particular
Series ((or Class of a Series ))desires to dispose of his Shares, he
may deposit at the office of the transfer agent or other authorized
agent of that Series a written request or such other form of request
as the Trustees may((,)) from time to time((,)) authorize, requesting
that the Series purchase the Shares in accordance with this Section 2;
and the Shareholder so requesting shall be entitled to require the
Series to purchase, and the Series or the principal underwriter of the
Series shall purchase his said Shares, but only at the Net Asset Value
thereof (as described in Section 3 hereof). The Series shall make
payment for any such Shares to be redeemed, as aforesaid, in cash ((or
property ))from the assets of that Series((,)) and payment for such
Shares ((less any applicable deferred sales charges and/or fees
))shall be made by the Series or the principal underwriter of the
Series to the Shareholder of record within seven (7) days after the
date upon which the request is effective.
DETERMINATION OF NET ASSET VALUE AND VALUATION OF PORTFOLIO ASSETS
SECTION 3. The term "Net Asset Value" of any Series ((or Class
))shall mean that amount by which the assets of that Series[,] ((or
Class ))exceed its liabilities, all as determined by or under the
direction of the Trustees. Such value per Share shall be determined
separately for each Series ((or Class ))of Shares and shall be
determined on such days and at such times as the Trustees may
determine. Such determination shall be made with respect to securities
for which market quotations are readily available, at the market value
of such securities; and with respect to other securities and assets,
at the fair value as determined in good faith by the Trustees,
provided, however, that the Trustees, without Shareholder approval,
may alter the method of appraising portfolio securities insofar as
permitted under the 1940 Act and the rules, regulations((,)) and
interpretations thereof promulgated or issued by the Commission or
insofar as permitted by any [O]((o))rder of the Commission applicable
to the Series. The Trustees may delegate any of 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
[par]((per)) Share last determined to be determined again in ((a))
similar manner and may fix the time when such redetermined value shall
become effective.
SUSPENSION OF THE RIGHT OF REDEMPTION
SECTION 4. The Trustees may declare a suspension of the right of
redemption or postpone the date of payment as permitted under the 1940
Act. Such suspension shall take effect at such time as the Trustees
shall specify((,)) but not later than the close of business on the
business day next following the declaration of suspension, and
thereafter there shall be no right of redemption or payment until the
Trustees shall declare the suspension at an end. In the case of a
suspension of the right of redemption, a Shareholder may either
withdraw his request for redemption or receive payment based on the
Net Asset Value per Share existing after the termination of the
suspension. ((In the event that any Series is divided into Classes,
the provisions of this Section, to the extent applicable as determined
in the discretion of the Trustees and consistent with applicable law,
may be equally applied to each such Class.))
ARTICLE XI
LIMITATION OF LIABILITY AND INDEMNIFICATION
LIMITATION OF LIABILITY
SECTION 1. Provided they have exercised reasonable care and have
acted under the reasonable belief that their actions are in the best
interest of the Trust, the Trustees shall not be responsible for or
liable in any event for neglect or wrongdoing of them or any officer,
agent, employee((,)) or investment adviser of the Trust, but nothing
contained herein shall protect any Trustee against any liability to
which he would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence((,)) or reckless disregard of the duties
involved in the conduct of his office.
[INDEMNIFICATION]
((INDEMNIFICATION OF COVERED PERSONS))
SECTION 2.
(a) Subject to the exceptions and limitations contained in Section
(b) below:
(i) every person who is, or has been, a Trustee or officer of the
Trust (hereinafter referred to as "Covered Person") shall be
indemnified by the appropriate Series to the fullest extent permitted
by law against liability and against all expenses reasonably incurred
or paid by him in connection with any claim, action, suit((,)) or
proceeding in which he becomes involved as a party or otherwise by
virtue of his being or having been a Trustee or officer and against
amounts paid or incurred by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall
apply to all claims, actions, suits or proceedings (civil, criminal or
other, including appeals), actual or threatened while in office or
thereafter, and the words "liability" and "expense((s))" shall
include, without limitation, attorneys' fees, costs, judgments,
amounts paid in settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered
Person:
(i) who shall have been adjudicated by a court or body before which
the proceeding was brought (A) to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his office((;)) or (B) not to have acted in good faith in the
reasonable belief that his action was in the best interest of the
Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence((,)) or reckless disregard of
the duties involved in the conduct of his office,
(A) by the court or other body approving the settlement;
(B) by at least a majority of those Trustees who are neither
[i]((I))nterested [p]((P))ersons of the Trust nor are parties to the
matter based upon a review of readily available facts (as opposed to a
full trial-type inquiry); or
(C) by written opinion of independent legal counsel based upon a
review of readily available facts (as opposed to a full trial-type
inquiry);
provided, however, that any Shareholder may, by appropriate legal
proceedings, challenge any such determination by the Trustees, or by
independent counsel.
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall
not be exclusive of or affect any other rights to which any Covered
Person may now or hereafter be entitled, shall continue as to a person
who has ceased to be such Trustee or officer((,)) and shall inure to
the benefit of the heirs, executors((,)) and administrators of such a
person. Nothing contained herein shall affect any rights to
indemnification to which Trust personnel, other than Trustees and
officers, and other persons may be entitled by contract or otherwise
under law.
(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit((,)) or proceeding of the character
described in [p]((P))aragraph (a) of this Section 2 may be paid by the
applicable Series from time to time prior to final disposition thereof
upon receipt of an undertaking by or on behalf of such Covered Person
that such amount will be paid over by him to the applicable Series if
it is ultimately determined that he is not entitled to indemnification
under this Section 2; provided, however, that either [(a)](((i))) such
Covered Person shall have provided appropriate security for such
undertaking[,]((;)) [(b)](((ii))) the Trust is insured against losses
arising out of any such advance payments((;)) or [(c)](((iii))) either
a majority of the Trustees who are neither interested persons of the
Trust nor parties to the matter, or independent legal counsel in a
written opinion, shall have determined, based upon a review of readily
available facts (as opposed to a trial-type inquiry or full
investigation), that there is reason to believe that such Covered
Person will be found entitled to indemnification under this Section 2.
[SHAREHOLDERS]
((INDEMNIFICATION OF SHAREHOLDERS))
SECTION 3. In case any Shareholder or former Shareholder of any
Series of the Trust shall be held to be personally liable solely by
reason of his being or having been a Shareholder and not because of
his acts or omissions or for some other reason, the Shareholder or
former Shareholder (or his heirs, executors, administrators((,)) or
other legal representatives or((,)) in the case of a corporation or
other entity, its corporate or other general successor) shall be
entitled out of the assets belonging to the applicable Series to be
held harmless from and indemnified against all loss and expense
arising from such liability. The Series shall, upon request by the
Shareholder, assume the defense of any claim made against the
Shareholder for any act or obligation of the Series and satisfy any
judgment thereon.
ARTICLE XII
MISCELLANEOUS
[TRUST NOT A PARTNERSHIP]
((TRUST NOT A PARTNERSHIP, ETC.))
SECTION 1. It is hereby expressly declared that a trust ((is created
hereby ))and not a partnership[ is created hereby.]((, joint stock
association, corporation, bailment, or any form of a legal
relationship other than a trust.)) No Trustee hereunder shall have any
power to ((personally ))bind [personally] either the Trust's officers
or any Shareholder. All persons extending credit to, contracting
with((,)) or having any claim against the Trust or the Trustees shall
look only to the assets of the appropriate Series for payment under
such credit, contract((,)) or claim; and neither the Shareholders nor
the Trustees, nor any of their agents, whether past, present((,)) or
future, shall be personally liable therefor. Nothing in this
Declaration of Trust shall protect a Trustee against any liability to
which the Trustee would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence((,)) or reckless disregard of
the duties involved in the conduct of the office of Trustee hereunder.
TRUSTEE[']S((')) GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY
SECTION 2. The exercise by the Trustees of their powers and
discretions hereunder in good faith and with reasonable care under the
circumstances then prevailing, shall be binding upon everyone
interested. Subject to the provisions of Section 1 of this Article XII
and to Article XI, the Trustees shall not be liable for errors of
judgment or mistakes of fact or law. The Trustees may take advice ((of
))counsel or other experts with respect to the meaning and operation
((of ))this Declaration of Trust, and subject to the provisions of
Section 1 of this Article XII and to Article XI, shall be under no
liability for any act or omission in accordance with such advice or
for failing to follow such advice. The Trustees shall not be required
to give any bond as such, nor any surety if a bond is obtained.
ESTABLISHMENT OF RECORD DATES
SECTION 3. The Trustees may close the stock transfer books of the
Trust for a period not exceeding sixty (60) days preceding the date of
any meeting of Shareholders, or the date for the payment of any
dividends, or the date for the allotment of rights, or the date when
any change or conversion or exchange of Shares shall go into effect;
or in lieu of closing the stock transfer books as aforesaid, the
Trustees may fix in advance a date not exceeding sixty (60) days
preceding the date of any meeting of Shareholders, or the date for
payment of any dividend((s)), or the date for the allotment of rights,
or the date when any change or conversion or exchange of Shares shall
go into effect, as a record date for the determination of the
Shareholders entitled to notice of, and to vote at, any such meeting,
or entitled to receive payment of any such dividend, or to any such
allotment of rights, or to exercise the rights in respect of any such
change, conversion or exchange of Shares, and in such case such
Shareholders and only such Shareholders as shall be Shareholders of
record on the date so fixed shall be entitled to such notice of, and
to vote at, such meeting, or to receive payment of such dividend, or
to receive such allotment or rights, or to exercise such rights, as
the case may be, notwithstanding any transfer of any Shares on the
books of the Trust after any such record date fixed or aforesaid.
[TERMINATION OF TRUST]
((DURATION; TERMINATION OF TRUST, A SERIES OR A CLASS; MERGERS, ETC.))
[Section 4.]
[(a)]((SECTION 4.1. DURATION. ))[This]((The)) Trust shall continue
without limitation of time((,)) but subject to the provisions of
[sub-section (b) ]this [Section 4.]((Article XII.))
[(b) Subject to a Majority Shareholder Vote of each Series affected
by the matter or, if applicable, to a Majority Shareholder Vote of the
Trust, the Trustees may]
((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) sell and convey the assets of the Trust or any affected Series
to another trust, partnership, association or corporation organized
under the laws of any state which is a diversified open-end management
investment company as defined in the 1940 Act, for adequate
consideration which may include the assumption of all outstanding
obligations, taxes and other liabilities, accrued or contingent, of
the Trust or any affected Series, and which may include shares of
beneficial interest or stock of such trust, partnership, association
or corporation; or]
(((i) the Trust or the Series or Class shall carry on no business
except for the purpose of winding up its affairs;))
[(ii) at any time sell and convert into money all of the assets of
the Trust or any affected Series.]
(((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))
[Upon making provision for the payment of all such liabilities in
either (i) or (ii), by such assumption or otherwise, the Trustees
shall distribute the remaining proceeds or assets (as the case may be)
ratably among the holders of the Shares of the Trust or any affected
Series then outstanding.]
(((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))
[(c)Upon completion of the distribution of the remaining proceeds or
the remaining assets as provided in sub-section (b), the Trust or any
affected Series shall terminate and the Trustees shall be discharged
of any and all further liabilities and duties hereunder and the right,
title and interest of all parties shall be cancelled and discharged.]
(((b) after termination of the Trust or the Series or Class and
distribution to the Shareholders as herein provided, a majority of the
Trustees shall execute and lodge among the records of the Trust and
file with the Secretary of The Commonwealth of Massachusetts, as
appropriate, an instrument in writing setting forth the fact of such
termination, and the Trustees shall thereupon be discharged from all
further liabilities and duties with respect to the Trust or the
terminated Series or Class, and the rights and interests of all
Shareholders of the Trust or the terminated Series or Class shall
thereupon cease.))
((SECTION 4.3. MERGER, CONSOLIDATION, AND SALE OF ASSETS. Subject to
applicable Federal and state law and except as otherwise provided in
Section 4.4 below, the Trust or any Series thereof may merge or
consolidate with any other corporation, association, trust, or other
organization or may sell, lease, or exchange all or substantially all
of the Trust property or Trust property allocated or belonging to such
Series, including its good will, upon such terms and conditions and
for such consideration when and as authorized at any meeting of
Shareholders called for such purpose by a Majority Shareholder Vote of
the Trust or affected Series, as the case may be. Any such merger,
consolidation, sale, lease, or exchange shall be deemed for all
purposes to have been accomplished under and pursuant to Massachusetts
law.))
((SECTION 4.4. INCORPORATION; REORGANIZATION. Subject to applicable
Federal and state law, the Trustees may without the vote or consent of
Shareholders cause to be organized or assist in organizing a
corporation or corporations under the laws of any jurisdiction or any
other trust, partnership, limited liability company, association, or
other organization to take over all of the Trust property or the Trust
property allocated or belonging to such Series or to carry on any
business in which the Trust shall directly or indirectly have any
interest, and to sell, convey and transfer the Trust property or the
Trust property allocated or belonging to such Series to any such
corporation, trust, limited liability company, partnership,
association, or organization in exchange for the shares or securities
thereof or otherwise, and to lend money to, subscribe for the shares
or securities of, and enter into any contracts with any such
corporation, trust, partnership, limited liability company,
association, or organization, or any corporation, partnership, limited
liability company, trust, association, or organization in which the
Trust or such Series holds or is about to acquire shares or any other
interest. Subject to applicable Federal and state law, the Trustees
may also cause a merger or consolidation between the Trust or any
successor thereto and any such corporation, trust, partnership,
limited liability company, association, or other organization. Nothing
contained herein shall be construed as requiring approval of
Shareholders for the Trustees to organize or assist in organizing one
or more corporations, trusts, partnerships, limited liability
companies, associations, or other organizations and selling,
conveying, or transferring the Trust property or a portion of the
Trust property to such organization or entities; provided, however,
that the Trustees shall provide written notice to the affected
Shareholders of any transaction whereby, pursuant to this Section 4.4,
the Trust or any Series thereof sells, conveys, or transfers
substantially all of its assets to another entity or merges or
consolidates with another entity.))
FILING OF COPIES, REFERENCES, AND HEADINGS
SECTION 5. The original or a copy of this instrument and of each
[d]((D))eclaration of [t]((T))rust supplemental hereto shall be kept
at the office of the Trust where it may be inspected by any
Shareholder. A copy of this instrument and of each supplemental
[d]((D))eclaration of [t]((T))rust shall be filed by the Trustees with
the Secretary of [t]((T))he Commonwealth of Massachusetts and the
Boston City Clerk, as well as any other governmental office where such
filing may from time to time be required. Anyone dealing with the
Trust may rely on a certificate by an officer or Trustee of the Trust
as to whether or not any such supplemental [d]((D))eclarations of
[t]((T))rust have been made and as to any matters in connection with
the Trust hereunder, and with the same effect as if it were the
original, may rely on a copy certified by an officer or Trustee of the
Trust to be a copy of this instrument or of any such supplemental
[d]((D))eclaration of [t]((T))rust. In this instrument or in any such
supplemental [d]((D))eclaration of [t]((T))rust, references to this
instrument and all expressions like "herein," "hereof" and
"hereunder," shall be deemed to refer to this instrument as amended or
affected by any such supplemental [d]((D))eclaration of [t]((T))rust.
Headings are placed herein for convenience of reference only and in
case of any conflict, the text of this instrument, rather than the
headings, shall control. This instrument may be executed in any number
of counterparts each of which shall be deemed an original.
APPLICABLE LAW
SECTION 6. The [t]((T))rust set forth in this instrument is made in
[t]((T))he Commonwealth of Massachusetts, and it is created under and
is to be governed by and construed and administered according to the
laws of said Commonwealth. The Trust shall be of the type commonly
called a Massachusetts business trust, and without limiting the
provisions hereof, the Trust may exercise all powers which are
ordinarily exercised by such a trust[.]((, and the absence of a
specific reference herein to any such power, privilege, or action
shall not imply that the Trust may not exercise such power or
privilege or take such actions.))
AMENDMENTS
SECTION 7. [If authorized by votes of the Trustees and a Majority
Shareholder Vote, or by any larger vote which may be required by
applicable law or this Declaration of Trust in any particular case,
]((Except as specifically provided herein, ))the Trustees [shall
]((may, without shareholder vote, ))amend or otherwise supplement this
[instrument]((Declaration of Trust)) by making ((an amendment,)) a
[d]((D))eclaration of [t]((T))rust supplemental hereto[, which
thereafter shall form a part hereof, except that an amendment which
shall affect the Shareholders of one or more Series but not the
Shareholders of all outstanding Series shall be authorized by vote of
the Shareholders holding a majority of the Shares entitled to vote of
each Series affected and no vote of Shareholders of a Series not
affected shall be required.]((or an amended and restated Declaration
of Trust.)) [Amendments having the purpose of changing the name of the
Trust or of supplying any omission, curing any ambiguity or curing,
correcting or supplementing any defective or inconsistent provision
contained herein shall not require authorization by Shareholder vote.
Copies of the supplemental declaration of trust shall be filed as
specified in Section 5 of this Article XII.] ((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 herein with respect to action or omission of
Covered Persons prior to such amendment.))
FISCAL YEAR
SECTION 8. The fiscal year of the Trust shall end on a specified date
as set forth in the Bylaws, ((if any, ))provided, however, that the
Trustees may, without Shareholder approval, change the fiscal year of
the Trust.
USE OF THE WORD "FIDELITY"
SECTION 9. Fidelity Management & Research Company ("FMR") has
consented to the use by any Series of the Trust of the identifying
word "Fidelity" in the name of any Series of the Trust at some future
date. Such consent is conditioned upon the employment of FMR ((or a
subsidiary or affiliate thereof ))as investment adviser of each Series
of the Trust. As between the Trust and itself, FMR controls the use of
the name of the Trust insofar as such name contains the identifying
word "Fidelity["].((")) FMR may from time to time use the identifying
word "Fidelity" in other connections and for other purposes,
including, without limitation, in the names of other investment
companies, corporations((,)) or businesses [which]((that)) it may
manage, advise, sponsor or own or in which it may have a financial
interest. FMR may require the Trust or any Series thereof to cease
using the identifying word "Fidelity" in the name of the Trust or any
Series thereof if the Trust or any Series thereof ceases to employ FMR
or a subsidiary or affiliate thereof as investment adviser.
PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS
((SECTION 10. (a) The provisions of this Declaration of Trust are
severable, and, if the Trustees shall determine, with the advice of
counsel, that any of such provisions is in conflict with the 1940 Act,
the regulated investment company provisions of the Internal Revenue
Code or with other applicable laws and regulations, the conflicting
provision shall be deemed never to have constituted a part of this
Declaration of Trust; provided, however, that such determination shall
not affect any of the remaining provisions of this Declaration of
Trust or render invalid or improper any action taken or omitted prior
to such determination)).
(((b) If any provision of this Declaration Trust shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such
jurisdiction and shall not in any manner affect such provisions in any
other jurisdiction or any other provision of this Declaration of Trust
in any jurisdiction)).
IN WITNESS WHEREOF, the undersigned, being all of the Trustees of the
Trust, have executed this instrument [this 19th day of January,
1995.]((as of the date set forth above.))
[SIGNATURE LINES OMITTED]
EXHIBIT 2
((UNDERLINED)) LANGUAGE WILL BE ADDED
[BRACKETED] LANGUAGE WILL BE DELETED
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH [COMPANY ](FAR EAST) INC.
AND
FIDELITY SCHOOL STREET TRUST ON BEHALF OF
FIDELITY INTERNATIONAL BOND FUND
AGREEMENT made this [26th]((____)) day of [February,]((_______,))
[1998,]((200_,)) 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 [Company ](Far East) Inc.
(hereinafter called the "Sub-Advisor"); and Fidelity School Street
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 International Bond Fund (hereinafter
called the "Portfolio").
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, [including]((and)) securities [issued in and]((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[,
at its own expense,] shall place all orders for the purchase and sale
of portfolio securities for the Portfolio's account with brokers or
dealers selected by the Sub-Advisor, which may include brokers or
dealers affiliated with the Advisor or Sub-Advisor. The Sub-Advisor
shall use its best efforts to seek to execute portfolio transactions
at prices which are advantageous to the Portfolio and at commission
rates which are reasonable in relation to the benefits received. In
selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of l934) to the Portfolio
[and]((and/or)) to [any]((the)) other accounts over which the
Sub-Advisor or Advisor exercise investment discretion. The Sub-Advisor
is authorized to pay a broker or dealer who provides such brokerage
and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting
that transaction if the Sub-Advisor determines in good faith that such
amount of commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer.
This determination may be viewed in terms of either that particular
transaction or the overall responsibilities which the Sub-Advisor has
with respect to accounts over which it exercises investment
discretion. The Trustees of the Trust shall periodically review the
commissions paid by the Portfolio to determine if the commissions paid
over representative periods of time were reasonable in relation to the
benefits to the Portfolio.
4. Compensation: The Advisor shall compensate the Sub-Advisor on the
following basis for the services to be furnished hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under
subparagraph (a) of paragraph 1 of this Agreement, the Advisor agrees
to pay the Sub-Advisor a monthly Sub-Advisory Fee. The Sub-Advisory
Fee shall be equal to 105% of the Sub-Advisor's costs incurred in
connection with rendering the services referred to in subparagraph (a)
of paragraph 1 of this Agreement. The Sub-Advisory Fee shall not be
reduced to reflect expense reimbursements or fee waivers by the
Advisor, if any, in effect from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Advisor agrees
to pay the Sub-Advisor a monthly Investment Management Fee. The
Investment Management Fee shall be equal to: (i) 50% of the monthly
management fee rate (including performance adjustments, if any) that
the Portfolio is obligated to pay the Advisor under its Management
Contract with the Advisor, multiplied by: (ii) the fraction equal to
the net assets of the Portfolio as to which the Sub-Advisor shall have
provided investment management services divided by the net assets of
the Portfolio for that month. If in any fiscal year the aggregate
expenses of the Portfolio exceed any applicable expense limitation
imposed by any state or federal securities laws or regulations, and
the Advisor waives all or a portion of its management fee or
reimburses the Portfolio for expenses to the extent required to
satisfy such limitation, the Investment Management Fee paid to the
Sub-Advisor will be reduced by 50% of the amount of such waivers or
reimbursements multiplied by the fraction determined in (ii). If the
Sub-Advisor reduces its fees to reflect such waivers or reimbursements
and the Advisor subsequently recovers all or any portion of such
waivers and reimbursements, then the Sub-Advisor shall be entitled to
receive from the Advisor a proportionate share of the amount
recovered. To the extent that waivers and reimbursements by the
Advisor required by such limitations are in excess of the Advisor's
management fee, the Investment Management Fee paid to the Sub-Advisor
will be reduced to zero for that month, but in no event shall the
Sub-Advisor be required to reimburse the Advisor for all or a portion
of such excess reimbursements.
(c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph 1
for the same portion of the investments of the Portfolio for the same
period, the fees paid to the Sub-Advisor with respect to such
investments shall be calculated exclusively under subparagraph (b) of
this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the
Sub-Advisor hereunder or by the Advisor under the Management Contract
with the Portfolio, which expenses payable by the Portfolio shall
include, without limitation, (i) interest and taxes; (ii) brokerage
commissions and other costs in connection with the purchase or sale of
securities and other investment instruments; (iii) fees and expenses
of the Trust's Trustees other than those who are "interested persons"
of the Trust, the Sub-Advisor or the Advisor; (iv) legal and audit
expenses; (v) custodian, registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Trust and the Portfolio's shares for distribution
under state and federal securities laws; (vii) expenses of printing
and mailing reports and notices and proxy material to shareholders of
the Portfolio; (viii) all other expenses incidental to holding
meetings of the Portfolio's shareholders, including proxy
solicitations therefore; (ix) a pro rata share, based on relative net
assets of the Portfolio and other registered investment companies
having Advisory and Service or Management Contracts with the Advisor,
of 50% of insurance premiums for fidelity and other coverage; (x) its
proportionate share of association membership dues; (xi) expenses of
typesetting for printing Prospectuses and Statements of Additional
Information and supplements thereto; (xii) expenses of printing and
mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Portfolio is a
party and the legal obligation which the Portfolio may have to
indemnify the Trust's Trustees and officers with respect thereto.
6. Interested Persons: It is understood that Trustees, officers, and
shareholders of the Trust are or may be or become interested in the
Advisor or the Sub-Advisor as directors, officers or otherwise and
that directors, officers and stockholders of the Advisor or the
Sub-Advisor are or may be or become similarly interested in the Trust,
and that the Advisor or the Sub-Advisor may be or become interested in
the Trust as a shareholder or otherwise.
7. Services to Other Companies or Accounts: The services of the
Sub-Advisor to the Advisor are not to be deemed to be exclusive, the
Sub-Advisor being free to render services to others and engage in
other activities, provided, however, that such other services and
activities do not, during the term of this Agreement, interfere, in a
material manner, with the Sub-Advisor's ability to meet all of its
obligations hereunder. The Sub-Advisor shall for all purposes be an
independent contractor and not an agent or employee of the Advisor or
the Trust.
8. Standard of Care: In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Sub-Advisor, the Sub-Advisor shall not be
subject to liability to the Advisor, the Trust or to any shareholder
of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that
may be sustained in the purchase, holding or sale of any security.
9. Duration and Termination of Agreement; Amendments:
(a) Subject to prior termination as provided in subparagraph (d) of
this paragraph 9, this Agreement shall continue in force until June
[30,]((__,)) [1998]((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 Trust's Board of Trustees or
by vote of a majority of the outstanding voting securities of the
Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor,
the Sub-Advisor and the Portfolio[, such consent on](( subject to))
the [part]((provisions)) of ((Section 15 of ))the [Portfolio to be
authorized]((1940 Act, as modified by or interpreted)) by [vote]((any
applicable order or orders)) of [a majority of ]the [outstanding
voting securities of]((Securities and Exchange Commission (the
"Commission") or any rules or regulations adopted by, or
interpretative releases of,)) the [Portfolio.]((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.
[SIGNATURE LINES OMITTED]
EXHIBIT 3
((UNDERLINED)) LANGUAGE WILL BE ADDED
[BRACKETED] LANGUAGE WILL BE DELETED
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH [COMPANY ](FAR EAST) INC.
AND
FIDELITY SCHOOL STREET TRUST ON BEHALF OF
FIDELITY NEW MARKETS INCOME FUND
AGREEMENT made this [26th]((____)) day of [February]((______,))
[1998,]((200_,)) 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 [Company ](Far East) Inc.
(hereinafter called the "Sub-Advisor"); and Fidelity School Street
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 New Markets Income Fund (hereinafter
called the "Portfolio").
WHEREAS the Trust and the Advisor have entered into a Management
Contract on behalf of ((the ))Portfolio, pursuant to which the Advisor
[acts]((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, [including]((and)) securities [issued in and]((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-dealer 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[,
at its own expense,] shall place all orders for the purchase and sale
of portfolio securities for the Portfolio's account with brokers or
dealers selected by the Sub-Advisor which may include brokers or
dealers affiliated with the Advisor or Sub-Advisor. The Sub-Advisor
shall use its best efforts to seek to execute portfolio transactions
at prices which are advantageous to the Portfolio and at commission
rates which are reasonable in relation to the benefits received. In
selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of l934) to the Portfolio
[and]((and/or)) to [any]((the)) other accounts over which the
Sub-Advisor or Advisor exercise investment discretion. The Sub-Advisor
is authorized to pay a broker or dealer who provides such brokerage
and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting
that transaction if the Sub-Advisor determines in good faith that such
amount of commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer.
This determination may be viewed in terms of either that particular
transaction or the overall responsibilities which the Sub-Advisor has
with respect to accounts over which it exercises investment
discretion. The Trustees of the Trust shall periodically review the
commissions paid by the Portfolio to determine if the commissions paid
over representative periods of time were reasonable in relation to the
benefits to the Portfolio.
4. Compensation: The Advisor shall compensate the Sub-Advisor on the
following basis for the services to be furnished hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under
subparagraph (a) of paragraph 1 of this Agreement, the Advisor agrees
to pay the Sub-Advisor a monthly Sub-Advisory Fee. The Sub-Advisory
Fee shall be equal to 105% of the Sub-Advisor's costs incurred in
connection with rendering the services referred to in subparagraph (a)
of paragraph 1 of this Agreement. The Sub-Advisory Fee shall not be
reduced to reflect expense reimbursements or fee waivers by the
Advisor, if any, in effect from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Advisor agrees
to pay the Sub-Advisor a monthly Investment Management Fee. The
Investment Management Fee shall be equal to: (i) 50% of the monthly
management fee rate (including performance adjustments, if any) that
the Portfolio is obligated to pay the Advisor under its Management
Contract with the Advisor, multiplied by: (ii) the fraction equal to
the net assets of the Portfolio as to which the Sub-Advisor shall have
provided investment management services divided by the net assets of
the Portfolio for that month. If in any fiscal year the aggregate
expenses of the Portfolio exceed any applicable expense limitation
imposed by any state or federal securities laws or regulations, and
the Advisor waives all or a portion of its management fee or
reimburses the Portfolio for expenses to the extent required to
satisfy such limitation, the Investment Management Fee paid to the
Sub-Advisor will be reduced by 50% of the amount of such waivers or
reimbursements multiplied by the fraction determined in (ii). If the
Sub-Advisor reduces its fees to reflect such waivers or reimbursements
and the Advisor subsequently recovers all or any portion of such
waivers and reimbursements, then the Sub-Advisor shall be entitled to
receive from the Advisor a proportionate share of the amount
recovered. To the extent that waivers and reimbursements by the
Advisor required by such limitations are in excess of the Advisor's
management fee, the Investment Management Fee paid to the Sub-Advisor
will be reduced to zero for that month, but in no event shall the
Sub-Advisor be required to reimburse the Advisor for all or a portion
of such excess reimbursements.
(c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph 1
for the same portion of the investments of the Portfolio for the same
period, the fees paid to the Sub-Advisor with respect to such
investments shall be calculated exclusively under subparagraph (b) of
this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the
Sub-Advisor hereunder or by the Advisor under the Management Contract
with the Portfolio, which expenses payable by the Portfolio shall
include, without limitation, (i) interest and taxes; (ii) brokerage
commissions and other costs in connection with the purchase or sale of
securities and other investment instruments; (iii) fees and expenses
of the Trust's Trustees other than those who are ["](("))interested
persons" of the Trust, the Sub-Advisor or the Advisor; (iv) legal and
audit expenses; (v) custodian, registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Trust and the Portfolio's shares for distribution
under state and federal securities laws; (vii) expenses of printing
and mailing reports and notices and proxy material to shareholders of
the Portfolio; (viii) all other expenses incidental to holding
meetings of the Portfolio's shareholders, including proxy
solicitations therefore; (ix) a pro rata share, based on relative net
assets of the Portfolio and other registered investment companies
having Advisory and Service or Management Contracts with the Advisor,
of 50% of insurance premiums for fidelity and other coverage; (x) its
proportionate share of association membership dues; (xi) expenses of
typesetting for printing Prospectuses and Statements of Additional
Information and supplements thereto; (xii) expenses of printing and
mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Portfolio is a
party and the legal obligation which the Portfolio may have to
indemnify the Trust's Trustees and officers with respect thereto.
6. Interested Persons: It is understood that Trustees, officers, and
shareholders of the Trust are or may be or become interested in the
Advisor or the Sub-Advisor as directors, officers or otherwise and
that directors, officers and stockholders of the Advisor or the
Sub-Advisor are or may be or become similarly interested in the Trust,
and that the Advisor or the Sub-Advisor may be or become interested in
the Trust as a shareholder or otherwise.
7. Services to Other Companies or Accounts: The services of the
Sub-Advisor to the Advisor are not to be deemed to be exclusive, the
Sub-Advisor being free to render services to others and engage in
other activities, provided, however, that such other services and
activities do not, during the term of this Agreement, interfere, in a
material manner, with the Sub-Advisor's ability to meet all of its
obligations hereunder. The Sub-Advisor shall for all purposes be an
independent contractor and not an agent or employee of the Advisor or
the Trust.
8. Standard of Care: In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Sub-Advisor, the Sub-Advisor shall not be
subject to liability to the Advisor, the Trust or to any shareholder
of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that
may be sustained in the purchase, holding or sale of any security.
9. Duration and Termination of Agreement; Amendments:
(a) Subject to prior termination as provided in subparagraph (d) of
this paragraph 9, this Agreement shall continue in force until June
30, [1998]((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 Trust's Board of Trustees or by vote of
a majority of the outstanding voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor,
the Sub-Advisor and the Portfolio[, such consent on](( subject to))
the [part]((provisions of Section 15)) of the [Portfolio to be
authorized]((1940 Act, as modified by or interpreted)) by [vote of a
majority]((any applicable order or orders)) of the [outstanding voting
securities of]((Securities and Exhange Commission (the "Commission")
or any rules or regulations adopted by, or interpretative releases
of,)) the [Portfolio.]((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.
[SIGNATURE LINES OMITTED]
EXHIBIT 4
((UNDERLINED)) LANGUAGE WILL BE ADDED
[BRACKETED] LANGUAGE WILL BE DELETED
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH [COMPANY ](U.K.) INC.
AND
FIDELITY SCHOOL STREET TRUST ON BEHALF OF
FIDELITY INTERNATIONAL BOND FUND
AGREEMENT made this [26th]((____)) day of [February,]((________,))
[1998.]((____.)) 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[ Company] (U.K.) Inc.
(hereinafter called the "Sub-Advisor"); and Fidelity School Street
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 International Bond Fund (hereinafter
called the "Portfolio").
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, [including]((and)) securities [issued in and]((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[,
at its own expense,] shall place all orders for the purchase and sale
of portfolio securities for the Portfolio's account with brokers or
dealers selected by the Sub-Advisor, which may include brokers or
dealers affiliated with the Advisor or Sub-Advisor. The Sub-Advisor
shall use its best efforts to seek to execute portfolio transactions
at prices which are advantageous to the Portfolio and at commission
rates which are reasonable in relation to the benefits received. In
selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of l934) to the Portfolio [and
any]((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, ((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 Trust's Board of Trustees or by vote of a
majority of the outstanding voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor,
the Sub-Advisor and the Portfolio[, such consent on](( subject to))
the [part]((provisions)) of ((Section 15 of ))the [Portfolio to be
authorized]((1940 Act, as modified or interpreted)) by [vote]((any
applicable order or orders)) of [a majority of ]the [outstanding
voting securities of]((Securities and Exchange Commission (the
"Commission") or any rules or regulations adopted by, or
interpretative releases of)) the [Portfolio.]((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.
[SIGNATURE LINES OMITTED]
EXHIBIT 5
((UNDERLINED)) LANGUAGE WILL BE ADDED
[BRACKETED] LANGUAGE WILL BE DELETED
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH [COMPANY ](U.K.) INC.
AND
FIDELITY SCHOOL STREET TRUST ON BEHALF OF
FIDELITY NEW MARKETS INCOME FUND
AGREEMENT made this [26th]((____)) day of [February,]((________,))
[1998,]((200_,)) 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[ Company] (U.K.) Inc.
(hereinafter called the "Sub-Advisor"); and Fidelity School Street
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 New Markets Income Fund (hereinafter
called the "Portfolio").
WHEREAS the Trust and the Advisor have entered into a Management
Contract on behalf of ((the ))Portfolio, pursuant to which the Advisor
[acts]((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, [including]((and)) securities [issued in and]((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 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[,
at its own expense,] shall place all orders for the purchase and sale
of portfolio securities for the Portfolio's account with brokers or
dealers selected by the Sub-Advisor, which may include brokers or
dealers affiliated with the Advisor or Sub-Advisor. The Sub-Advisor
shall use its best efforts to seek to execute portfolio transactions
at prices which are advantageous to the Portfolio and at commission
rates which are reasonable in relation to the benefits received. In
selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of l934) to the Portfolio
[and]((and/or)) to [any]((the)) other accounts over which the
Sub-Advisor or Advisor exercise investment discretion. The Sub-Advisor
is authorized to pay a broker or dealer who provides such brokerage
and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting
that transaction if the Sub-Advisor determines in good faith that such
amount of commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer.
This determination may be viewed in terms of either that particular
transaction or the overall responsibilities which the Sub-Advisor has
with respect to accounts over which it exercises investment
discretion. The Trustees of the Trust shall periodically review the
commissions paid by the Portfolio to determine if the commissions paid
over representative periods of time were reasonable in relation to the
benefits to the Portfolio.
4. Compensation: The Advisor shall compensate the Sub-Advisor on the
following basis for the services to be furnished hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under
subparagraph (a) of paragraph 1 of this Agreement, the Advisor agrees
to pay the Sub-Advisor a monthly Sub-Advisory Fee. The Sub-Advisory
Fee shall be equal to 110% of the Sub-Advisor's costs incurred in
connection with rendering the services referred to in subparagraph (a)
of paragraph 1 of this Agreement. The Sub-Advisory Fee shall not be
reduced to reflect expense reimbursements or fee waivers by the
Advisor, if any, in effect from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Advisor agrees
to pay the Sub-Advisor a monthly Investment Management Fee. The
Investment Management Fee shall be equal to: (i) 50% of the monthly
management fee rate (including performance adjustments, if any) that
the Portfolio is obligated to pay the Advisor under its Management
Contract with the Advisor, multiplied by: (ii) the fraction equal to
the net assets of the Portfolio as to which the Sub-Advisor shall have
provided investment management services divided by the net assets of
the Portfolio for that month. If in any fiscal year the aggregate
expenses of the Portfolio exceed any applicable expense limitation
imposed by any state or federal securities laws or regulations, and
the Advisor waives all or a portion of its management fee or
reimburses the Portfolio for expenses to the extent required to
satisfy such limitation, the Investment Management Fee paid to the
Sub-Advisor will be reduced by 50% of the amount of such waivers or
reimbursements multiplied by the fraction determined in (ii). If the
Sub-Advisor reduces its fees to reflect such waivers or reimbursements
and the Advisor subsequently recovers all or any portion of such
waivers or reimbursements, then the Sub-Advisor shall be entitled to
receive from the Advisor a proportionate share of the amount
recovered. To the extent that waivers and reimbursements by the
Advisor required by such limitations are in excess of the Advisor's
management fee, the Investment Management Fee paid to the Sub-Advisor
will be reduced to zero for that month, but in no event shall the
Sub-Advisor be required to reimburse the Advisor for all or a portion
of such excess reimbursements.
(c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph (1)
for the same portion of the investments of the Portfolio for the same
period, the fees paid to the Sub-Advisor with respect to such
investments shall be calculated exclusively under subparagraph (b) of
this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the
Sub-Advisor hereunder or by the Advisor under the Management Contract
with the Portfolio, which expenses payable by the Portfolio shall
include, without limitation, (i) interest and taxes; (ii) brokerage
commissions and other costs in connection with the purchase or sale of
securities and other investment instruments; (iii) fees and expenses
of the Trust's Trustees other than those who are ["](("))interested
persons" of the Trust, the Sub-Advisor or the Advisor; (iv) legal and
audit expenses; (v) custodian, registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Trust and the Portfolio's shares for distribution
under state and federal securities laws; (vii) expenses of printing
and mailing reports and notices and proxy material to shareholders of
the Portfolio; (viii) all other expenses incidental to holding
meetings of the Portfolio's shareholders, including proxy
solicitations therefore; (ix) a pro rata share, based on relative net
assets of the Portfolio and other registered investment companies
having Advisory and Service or Management Contracts with the Advisor,
of 50% of insurance premiums for fidelity and other coverage; (x) its
proportionate share of association membership dues; (xi) expenses of
typesetting for printing Prospectuses and Statements of Additional
Information and supplements thereto; (xii) expenses of printing and
mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Portfolio is a
party and the legal obligation which the Portfolio may have to
indemnify the Trust's Trustees and officers with respect thereto.
6. Interested Persons: It is understood that Trustees, officers, and
shareholders of the Trust are or may be or become interested in the
Advisor or the Sub-Advisor as directors, officers or otherwise and
that directors, officers and stockholders of the Advisor or the
Sub-Advisor are or may be or become similarly interested in the Trust,
and that the Advisor or the Sub-Advisor may be or become interested in
the Trust as a shareholder or otherwise.
7. Services to Other Companies or Accounts: The services of the
Sub-Advisor to the Advisor are not to be deemed to be exclusive, the
Sub-Advisor being free to render services to others and engage in
other activities, provided, however, that such other services and
activities do not, during the term of this Agreement, interfere, in a
material manner, with the Sub-Advisor's ability to meet all of its
obligations hereunder. The Sub-Advisor shall for all purposes be an
independent contractor and not an agent or employee of the Advisor or
the Trust.
8. Standard of Care: In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Sub-Advisor, the Sub-Advisor shall not be
subject to liability to the Advisor, the Trust or to any shareholder
of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that
may be sustained in the purchase, holding or sale of any security.
9. Duration and Termination of Agreement; Amendments:
(a) Subject to prior termination as provided in subparagraph (d) of
this paragraph 9, this Agreement shall continue in force until June
30, [1998]((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 Trust's Board of Trustees or by vote of
a majority of the outstanding voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor,
the Sub-Advisor and the Portfolio[, such consent on] ((subject to))
the [part]((provisions of Section 15)) of the [Portfolio to be
authorized]((1940 Act, as modified by or interpreted)) by [vote of a
majority]((any applicable order or orders)) of the [outstanding voting
securities of]((Securities and Exchange Commission (the "Commission")
or any rules or regulations adopted by, or interpretative releases
of,)) the [Portfolio.]((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.
[SIGNATURE LINES OMITTED]
EXHIBIT 6
((UNDERLINED)) LANGUAGE WILL BE ADDED
[BRACKETED] LANGUAGE WILL BE DELETED
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY INTERNATIONAL INVESTMENT ADVISORS
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY SCHOOL STREET TRUST ON BEHALF OF
FIDELITY INTERNATIONAL BOND FUND
AGREEMENT [made]((AMENDED AND RESTATED as of)) this [1st]((____)) day
of [August,]((________)) [1999]((200_)) by and between Fidelity
Management & Research Company, a Massachusetts corporation with
principal offices at 82 Devonshire Street, Boston, Massachusetts
(hereinafter called the "Advisor"); Fidelity International Investment
Advisors, a Bermuda company with principal offices at Pembroke Hall,
Pembroke, Bermuda (hereinafter called the "Sub-Advisor"); and Fidelity
School Street 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 International Bond Fund
(hereinafter called the "Portfolio").
WHEREAS the Trust and the Advisor have entered into a Management
Contract on behalf of the Portfolio, pursuant to which the Advisor
[acts]((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, [including]((and)) securities [issued in and]((
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[,
at its own expense,] shall place all orders for the purchase and sale
of portfolio securities for the Portfolio's account with brokers or
dealers selected by the Sub-Advisor, which may include brokers or
dealers affiliated with the Advisor or Sub-Advisor. The Sub-Advisor
shall use its best efforts to seek to execute portfolio transactions
at prices which are advantageous to the Portfolio and at commission
rates which are reasonable in relation to the benefits received. In
selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide
brokerage and research services [any]((the)) other accounts over which
the Sub-Advisor or Advisor exercise investment discretion. The
Sub-Advisor is authorized to pay a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting
that transaction if the Sub-Advisor determines in good faith that such
amount of commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer.
This determination may be viewed in terms of either that particular
transaction or the overall responsibilities which the Sub-Advisor has
with respect to accounts over which it exercises investment
discretion. The Trustees of the Trust shall periodically review the
commissions paid by the Portfolio to determine if the commissions paid
over representative periods of time were reasonable in relation to the
benefits to the Portfolio.
4. Compensation: The Advisor shall compensate the Sub-Advisor on the
following basis for the services to be furnished hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under
subparagraph (a) of paragraph 1 of this Agreement, the Advisor agrees
to pay the Sub-Advisor a monthly Sub-Advisory Fee. The Sub-Advisory
Fee shall be equal to: (i) 30% 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 advice divided by the net assets of the Portfolio for that
month. 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) 57% 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 57% 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 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 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, ((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 Trust's Board of Trustees or by vote of a
majority of the outstanding voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor,
the Sub-Advisor and the Portfolio[, such consent on]((subject to)) the
[part]((provisions)) of ((Section 15 of ))the [Portfolio to be
authorized]((1940 Act, as modified by or interpreted)) by [vote]((any
applicable order or orders)) of [a majority of ]the [outstanding
voting securities of]((Securities and Exchange Commission (the
"Commission") or any rules or regulations adopted by, or
interpretative releases of,)) the [Portfolio.]((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.
[SIGNATURE LINES OMITTED]
EXHIBIT 7
((UNDERLINED)) LANGUAGE WILL BE ADDED
[BRACKETED] LANGUAGE WILL BE DELETED
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY INTERNATIONAL INVESTMENT ADVISORS
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY SCHOOL STREET TRUST ON BEHALF
FIDELITY NEW MARKETS INCOME FUND
AGREEMENT [made]((AMENDED AND RESTATED as of)) this [1st]((____)) day
of [August, ]((________, 200_)) by and between Fidelity Management &
Research Company, a Massachusetts corporation with principal offices
at 82 Devonshire Street, Boston, Massachusetts (hereinafter called the
"Advisor"); Fidelity International Investment Advisors, a Bermuda
company with principal offices at Pembroke Hall, Pembroke, Bermuda
(hereinafter called the "Sub-Advisor"); and Fidelity School Street
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 New Markets Income Fund (hereinafter
called the "Portfolio").
WHEREAS the Trust and the Advisor have entered into a Management
Contract on behalf of ((the ))Portfolio, pursuant to which the Advisor
[acts]((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, [including]((and)) securities [issued in and
]((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[,
at its own expense,] shall place all orders for the purchase and sale
of portfolio securities for the Portfolio's account with brokers or
dealers selected by the Sub-Advisor, which may include brokers or
dealers affiliated with the Advisor or Sub-Advisor. The Sub-Advisor
shall use its best efforts to seek to execute portfolio transactions
at prices which are advantageous to the Portfolio and at commission
rates which are reasonable in relation to the benefits received. In
selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of l934) to the Portfolio
[and]((and/or)) to [any]((the)) other accounts over which the
Sub-Advisor or Advisor exercise investment discretion. The Sub-Advisor
is authorized to pay a broker or dealer who provides such brokerage
and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting
that transaction if the Sub-Advisor determines in good faith that such
amount of commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer.
This determination may be viewed in terms of either that particular
transaction or the overall responsibilities which the Sub-Advisor has
with respect to accounts over which it exercises investment
discretion. The Trustees of the Trust shall periodically review the
commissions paid by the Portfolio to determine if the commissions paid
over representative periods of time were reasonable in relation to the
benefits to the Portfolio.
4. Compensation: The Advisor shall compensate the Sub-Advisor on the
following basis for the services to be furnished hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under
subparagraph (a) of paragraph 1 of this Agreement, the Advisor agrees
to pay the Sub-Advisor a monthly Sub-Advisory Fee. The Sub-Advisory
Fee shall be equal to: (i) 30% 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 advice divided by the net assets of the Portfolio for that
month. 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) 57% 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 57% 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 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 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, ((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 Trust's Board of Trustees or by vote of a
majority of the outstanding voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor,
the Sub-Advisor and the Portfolio[, such consent on](( subject to))
the [part]((provisions)) of ((Section 15 of)) the [Portfolio to be
authorized]((1940 Act, as modified by or interpreted)) by [vote]((any
applicable order or orders)) of [a majority of ]the [outstanding
voting securities of]((Securities and Exchange Commission (the
"Commission") or any rules or regulations adopted by, or
interpretative releases of,)) the [Portfolio.]((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.
[SIGNATURE LINES OMITTED]
EXHIBIT 8
((UNDERLINED)) LANGUAGE WILL BE ADDED
[BRACKETED] LANGUAGE WILL BE DELETED
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY INTERNATIONAL INVESTMENT ADVISORS (U.K.) LIMITED
AND
FIDELITY INTERNATIONAL INVESTMENT ADVISORS
AGREEMENT made this [26th]((____)) day of [February]((________,))
[1998,]((200_,)) by ((and between ))Fidelity International Investment
Advisors (U.K.) Limited, 27-28 Lovat Lane, London, England
(hereinafter called the "U.K. Sub-Advisor") and Fidelity International
Investment Advisors, a Bermuda company with principal offices at
Pembroke Hall, Pembroke, Bermuda (hereinafter called the
"Sub-Advisor").
WHEREAS Fidelity Management & Research Company, a Massachusetts
corporation (hereinafter called the "Advisor"), has entered into a
Management Contract with Fidelity School Street 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 International Bond Fund (hereinafter called the "Portfolio"),
pursuant to which the Advisor [acts]((is to act)) as investment
advisor to the Portfolio, and
WHEREAS, the Sub-Advisor has entered into a Sub-Advisory Agreement
with the Advisor (the "Sub-Advisory Agreement") pursuant to which the
Sub-Advisor, directly or through certain of its subsidiaries or other
affiliated persons, shall provide investment advice or investment
management and order execution services to the Portfolio, and
WHEREAS the U.K. Sub-Advisor has personnel in Western Europe and has
been formed in part for the purpose of researching and compiling
information and recommendations with respect to the economies of
various countries, [including]((and)) securities [issued and]((of))
issuers located outside of North America, principally in the U.K. and
Europe.
NOW THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the Sub-Advisor and the U.K.
Sub-Advisor agree as follows:
1. Duties: The Sub-Advisor may, in its discretion, appoint the U.K.
Sub-Advisor to perform one or more of the following services with
respect to all or a portion of the investments of the Portfolio, in
connection with the Sub-Advisor's duties under the Sub-Advisory
Agreement. The services and the portion of the investments of the
Portfolio advised or managed by the U.K. Sub-Advisor shall be as
agreed upon from time to time by the Sub-Advisor and the U.K.
Sub-Advisor. The U.K. Sub-Advisor shall pay the salaries and fees of
all personnel of the U.K. 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
Sub-Advisor, the U.K. Sub-Advisor shall provide investment advice to
the Sub-Advisor with respect to all or a portion of the investments of
the Portfolio, and in connection with such advice shall furnish the
Sub-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
Sub-Advisor, the U.K. Sub-Advisor shall 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 U.K. Sub-Advisor. With respect to the portion of the
investments of the Portfolio under its management, the U.K.
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 U.K. Sub-Advisor
may select. The U.K. 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 U.K. Sub-Advisor shall at all times be subject to the control and
direction of the Sub-Advisor, the Advisor and the Trust's Board of
Trustees.
2. Information to be Provided to the Trust and the Advisor: The U.K.
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 U.K. 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 U.K.
Sub-Advisor[, at its own expense,] shall place all orders for the
purchase and sale of portfolio securities for the Portfolio's account
with brokers or dealers selected by the U.K. Sub-Advisor, which may
include brokers or dealers affiliated with the Advisor, Sub-Advisor or
U.K. Sub-Advisor. The U.K. 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]((and/or)) to
[any]((the)) other accounts over which the U.K. Sub-Advisor, the
Sub-Advisor or Advisor exercise investment discretion. The U.K.
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 U.K. 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 U.K. Sub-Advisor
and the Sub-Advisor have with respect to accounts over which they
exercise 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 Sub-Advisor shall compensate the U.K.
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 Sub-Advisor
agrees to pay the U.K. Sub-Advisor a monthly U.K. Sub-Advisory Fee.
The U.K. Sub-Advisory Fee shall be equal to 110% of the U.K.
Sub-Advisor's costs incurred in connection rendering the services
referred to in subparagraph (a) of paragraph 1 of this Agreement. The
U.K. Sub-Advisory Fee shall not be reduced to reflect expense
reimbursements or fee waivers by the Sub-Advisor or 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 Sub-Advisor
agrees to pay the U.K. Sub-Advisor a monthly Investment Management
Fee. The Investment Management Fee shall be equal to 110% of the U.K.
Sub-Advisor's costs incurred in connection rendering the services
referred to in subparagraph (b) of paragraph 1 of this Agreement. The
U.K. Sub-Advisory Fee shall not be reduced to reflect expense
reimbursements or fee waivers by the Sub-Advisor or Advisor, if any,
in effect from time to time.
(c) PROVISION OF MULTIPLE SERVICES: If the U.K. 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 U.K. 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 U.K.
Sub-Advisor hereunder, by the Sub-Advisor under the Sub-Advisory
Agreement or by the Advisor under the Management Contract with the
Portfolio.
6. Interested Persons: It is understood that Trustees, officers, and
shareholders of the Trust are or may be or become interested in the
Advisor, the Sub-Advisor or the U.K. Sub-Advisor as directors,
officers or otherwise and that directors, officers and stockholders of
the Advisor, the Sub-Advisor or the U.K. Sub-Advisor are or may be or
become similarly interested in the Trust, and that the Advisor, the
Sub-Advisor or the U.K. 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 U.K.
Sub-Advisor to the Sub-Advisor are not to be deemed to be exclusive,
the U.K. 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 U.K. Sub-Advisor's ability
to meet all of its obligations hereunder. The U.K. Sub-Advisor shall
for all purposes be an independent contractor and not an agent or
employee of the Advisor, the Sub-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 U.K. Sub-Advisor, the U.K. 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.
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, [1998]((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 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 U.K. Sub-Advisor, the Sub-Advisor and the Portfolio[, such consent
on](( subject to)) the [part]((provisions)) of ((Section 15 of
))the[Portfolio to be authorized]((1940 Act, as modified by or
interpreted)) by [vote]((any applicable order or orders)) of [a
majority of ]the [outstanding voting securities of]((Securities and
Exchange Commission (the "Commission") or any rules or regulations
adopted by, or interpretative releases of,)) the
[Portfolio.]((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 U.K. 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 U.K. 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 U.K. Sub-Advisor
shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio. Nor shall the U.K.
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.
[SIGNATURE LINES OMITTED]
EXHIBIT 9
((UNDERLINED)) LANGUAGE WILL BE ADDED
[BRACKETED] LANGUAGE WILL BE DELETED
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY INTERNATIONAL INVESTMENT ADVISORS (U.K.) LIMITED
AND
FIDELITY INTERNATIONAL INVESTMENT ADVISORS
AGREEMENT made this [26th]((____)) day of [February]((________,))
[1998,]((200_,)) by ((and between ))Fidelity International Investment
Advisors (U.K.) Limited, 27-28 Lovat Lane, London, England
(hereinafter called the "U.K. Sub-Advisor" and Fidelity International
Investment Advisors, a Bermuda company with principal offices at
Pembroke Hall, Pembroke, Bermuda (hereinafter called the
"Sub-Advisor").
WHEREAS Fidelity Management & Research Company, a Massachusetts
corporation (hereinafter called the "Advisor"), has entered into a
Management Contract with Fidelity School Street 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 New Markets Income Fund (hereinafter called the "Portfolio"),
pursuant to which the Advisor [acts]((is to act)) as investment
advisor to the Portfolio, and
WHEREAS, the Sub-Advisor has entered into a Sub-Advisory Agreement
with the Advisor (the "Sub-Advisory Agreement") pursuant to which the
Sub-Advisor, directly or through certain of its subsidiaries or other
affiliated persons, shall provide investment advice or investment
management and order execution services to the Portfolio, and
WHEREAS the U.K. Sub-Advisor has personnel in Western Europe and has
been formed in part for the purpose of researching and compiling
information and recommendations with respect to the economies of
various countries, [including]((and)) securities [issued and]((of))
issuers located outside of North America, principally in the U.K. and
Europe.
NOW THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the Sub-Advisor and the U.K.
Sub-Advisor agree as follows:
1. Duties: The Sub-Advisor may, in its discretion, appoint the U.K.
Sub-Advisor to perform one or more of the following services with
respect to all or a portion of the investments of the Portfolio, in
connection with the Sub-Advisor's duties under the Sub-Advisory
Agreement. The services and the portion of the investments of the
Portfolio advised or managed by the U.K. Sub-Advisor shall be as
agreed upon from time to time by the Sub-Advisor and the U.K.
Sub-Advisor. The U.K. Sub-Advisor shall pay the salaries and fees of
all personnel of the U.K. 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
Sub-Advisor, the U.K. Sub-Advisor shall provide investment advice to
the Sub-Advisor with respect to all or a portion of the investments of
the Portfolio, and in connection with such advice shall furnish the
Sub-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
Sub-Advisor, the U.K. Sub-Advisor shall 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 U.K. Sub-Advisor. With respect to the portion of the
investments of the Portfolio under its management, the U.K.
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 U.K. Sub-Advisor
may select. The U.K. 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 U.K. Sub-Advisor shall at all times be subject to the control and
direction of the Sub-Advisor, the Advisor and the Trust's Board of
Trustees.
2. Information to be Provided to the Trust and the Advisor: The U.K.
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 U.K. 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 U.K.
Sub-Advisor[, at its own expense,] shall place all orders for the
purchase and sale of portfolio securities for the Portfolio's account
with brokers or dealers selected by the U.K. Sub-Advisor, which may
include brokers or dealers affiliated with the Advisor, Sub-Advisor or
U.K. Sub-Advisor. The U.K. 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]((and/or)) to
[any]((the)) other accounts over which the U.K. Sub-Advisor, the
Sub-Advisor or Advisor exercise investment discretion. The U.K.
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 U.K. 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 U.K. Sub-Advisor
and the Sub-Advisor have with respect to accounts over which they
exercise 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 Sub-Advisor shall compensate the U.K.
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 Sub-Advisor
agrees to pay the U.K. Sub-Advisor a monthly U.K. Sub-Advisory Fee.
The U.K. Sub-Advisory Fee shall be equal to 110% of the U.K.
Sub-Advisor's costs incurred in connection rendering the services
referred to in subparagraph (a) of paragraph 1 of this Agreement. The
U.K. Sub-Advisory Fee shall not be reduced to reflect expense
reimbursements or fee waivers by the Sub-Advisor or 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 Sub-Advisor
agrees to pay the U.K. Sub-Advisor a monthly Investment Management
Fee. The Investment Management Fee shall be equal to 110% of the U.K.
Sub-Advisor's costs incurred in connection rendering the services
referred to in subparagraph (b) of paragraph 1 of this Agreement. The
U.K. Sub-Advisory Fee shall not be reduced to reflect expense
reimbursements or fee waivers by the Sub-Advisor or Advisor, if any,
in effect from time to time.
(c) PROVISION OF MULTIPLE SERVICES: If the U.K. 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 U.K. 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 U.K.
Sub-Advisory hereunder, by the Sub-Advisor under the Sub-Advisory
Agreement or by the Advisor under the Management Contract with the
Portfolio.
6. Interested Persons: It is understood that Trustees, officers, and
shareholders of the Trust are or may be or become interested in the
Advisor, the Sub-Advisor or the U.K. Sub-Advisor as directors,
officers or otherwise and that directors, officers and stockholders of
the Advisor, the Sub-Advisor or the U.K. Sub-Advisor are or may be or
become similarly interested in the Trust, and that the Advisor, the
Sub-Advisor or the U.K. 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 U.K.
Sub-Advisor to the Sub-Advisor are not to be deemed to be exclusive,
the U.K. 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 U.K. Sub-Advisor's ability
to meet all of its obligations hereunder. The U.K. Sub-Advisor shall
for all purposes be an independent contractor and not an agent or
employee of the Advisor, the Sub-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 U.K. Sub-Advisor, the U.K. 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.
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, [1998]((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 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 U.K. Sub-Advisor, the Sub-Advisor and the Portfolio[, such consent
on](( subject to)) the [part]((provisions of Section 15 ))of the
[Portfolio to be authorized]((1940 Act, as modified by or
interpreted)) by [vote of a majority]((any applicable order or
orders)) of the [outstanding voting securities of]((Securities and
Exchange Commission (the "Commission") or any rules or regulations
adopted by, or interpretative releases of,)) the
[Portfolio.]((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 U.K. 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 U.K. 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 U.K. Sub-Advisor
shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio. Nor shall the U.K.
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.
[SIGNATURE LINES OMITTED]
EXHIBIT 10
((UNDERLINED)) LANGUAGE WILL BE ADDED
[BRACKETED] LANGUAGE WILL BE DELETED
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY INVESTMENTS JAPAN LIMITED
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY SCHOOL STREET TRUST ON BEHALF OF
FIDELITY INTERNATIONAL BOND FUND
AGREEMENT [made]((AMENDED AND RESTATED as of)) this [1st]((____)) day
of [August,]((________,)) [1999,]((200_,)) by and between Fidelity
Management & Research Company, a Massachusetts corporation with
principal offices at 82 Devonshire Street, Boston, Massachusetts
(hereinafter called the "Advisor"); Fidelity Investments Japan
Limited, a Japanese company with principal offices at Shiroyama JT
Mori Building, 19th Floor, 3-1 Toranomon 4-chome, Minato-ku, Tokyo
105, Japan (hereinafter called the "Sub-Advisor"); and Fidelity School
Street 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 International Bond Fund (hereinafter
called the "Portfolio").
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 has 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: (i) 30% 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 advice divided by the net assets of the Portfolio for that
month. 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) 57% 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 57% 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 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 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]((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 Trust's Board of Trustees or by vote of
a majority of the outstanding voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor,
the Sub-Advisor and the Portfolio[, such consent on](( subject to))
the [part]((provisions of Section 15)) of the [Portfolio to be
authorized]((1940 Act, as modified by or interpreted)) by [vote of a
majority]((any applicable order or orders)) of the [outstanding voting
securities of]((Securities and Exchange Commission (the "Commission")
or any rules or regulations adopted by, or interpretative releases of
,)) the [Portfolio.]((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, all as of the date written above.
[SIGNATURE LINES OMITTED]
EXHIBIT 11
((UNDERLINED)) LANGUAGE WILL BE ADDED
[BRACKETED] LANGUAGE WILL BE DELETED
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY INVESTMENTS JAPAN LIMITED
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY SCHOOL STREET TRUST ON BEHALF OF
FIDELITY NEW MARKETS INCOME FUND
AGREEMENT [made]((AMENDED AND RESTATED as of)) this [1st]((____)) day
of [August,]((________,)) [1999,]((200_)) by and between Fidelity
Management & Research Company, a Massachusetts corporation with
principal offices at 82 Devonshire Street, Boston, Massachusetts
(hereinafter called the "Advisor"); Fidelity Investments Japan
Limited, a Japanese company with principal offices at Shiroyama JT
Mori Building, 19th Floor, 3-1 Toranomon 4-chome, Minato-ku, Tokyo
105, Japan (hereinafter called the "Sub-Advisor"); and Fidelity School
Street 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 New Markets Income Fund(hereinafter
called the "Portfolio").
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 has 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: (i) 30% 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 advice divided by the net assets of the Portfolio for that
month. 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) 57% 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 57% 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 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 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]((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 Trust's Board of Trustees or by vote of
a majority of the outstanding voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor,
the Sub-Advisor and the Portfolio[, such consent on] ((subject to))
the [part]((provisions of Section 15)) of the [Portfolio to be
authorized]((1940 Act, as modified by or interpreted)) by [vote of a
majority]((any applicable order or orders)) of the [outstanding voting
securities of]((Securities and Exchange Commission (the "Commission")
or any rules or regulations adopted by, or interpretative releases of
,)) the [Portfolio.]((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, all as of the date written above.
[SIGNATURE LINES OMITTED]
EXHIBIT 12
FUNDS ADVISED BY FMR - TABLE OF AVERAGE NET ASSETS AND EXPENSE
RATIOS(A)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
INVESTMENT OBJECTIVE AND FUND FISCAL YEAR END (A) AVERAGE NET ASSETS RATIO OF NET ADVISORY FEES
(MILLIONS)(B) TO AVERAGE NET ASSETS PAID
TO FMR(C)
TAXABLE BOND
Spartan Investment Grade 9/30/98 $ 820.2 0.38%(z)
Bond(g)(d)
Advisor Mortgage
Securities:(g)(x)(d)
Class A 10/31/98 0.8 0.44
Class B 10/31/98 4.0 0.44
Class T 10/31/98 14.6 0.44
Institutional Class 10/31/98 21.3 0.44
Initial Class 10/31/98 471.0 0.44
Advisor Government
Investment:(g)(d)
Class A 10/31/98 3.1 0.43
Class B 10/31/98 29.1 0.43
Class T 10/31/98 161.2 0.43
Class C 10/31/98 3.7 0.43
Institutional Class 10/31/98 24.7 0.43
Advisor High Yield:(g)
Class A 10/31/98 87.2 0.58
Class B 10/31/98 823.9 0.58
Class T 10/31/98 2,481.8 0.58
Class C 10/31/98 71.0 0.58
Institutional Class 10/31/98 117.4 0.58
Advisor Short
Fixed-Income:(g)(d)
Class A 10/31/98 6.5 0.44
Class T 10/31/98 336.8 0.44
Class C 10/31/98 2.0 0.44
Institutional Class 10/31/98 6.5 0.44
Advisor Intermediate
Bond:(g)(x)(d)
Class A 10/31/98 6.1 0.43
Class B 10/31/98 27.2 0.43
Class T 10/31/98 278.0 0.43
Class C 10/31/98 2.5 0.43
Institutional Class 10/31/98 173.2 0.43
Institutional 11/30/98 356.7 0.45
Short-Intermediate
Government(d)
Real Estate High Income 11/30/98 73.1 0.73
Advisor Emerging Markets
Income:(f)(x)
Class A 12/31/98 $ 2.5 0.69%
Class B 12/31/98 20.4 0.69
Class T 12/31/98 72.8 0.69
Class C 12/31/98 0.4 0.69
Institutional Class 12/31/98 1.0 0.69
Advisor Strategic
Income:(g)(x)(d)
Class A 12/31/98 6.9 0.58
Class B 12/31/98 68.3 0.58
Class T 12/31/98 162.4 0.58
Class C 12/31/98 7.0 0.58
Institutional Class 12/31/98 6.0 0.58
International Bond(f) 12/31/98 74.5 0.68
New Markets Income(e) 12/31/98 279.0 0.69
Real Estate High Income II 12/31/98 132.0 0.73
Strategic Income 12/31/98 18.3 0.04(z)
Variable Insurance Products:
High Income(g)
Initial Class 12/31/98 2,449.6 0.58
Service Class 12/31/98 66.6 0.58
Variable Insurance Products
II:
Investment Grade Bond(d) 12/31/98 262.9 0.43
U.S. Bond Index(d) 2/28/99 1,060.1 0.07(z)
Capital & Income(g) 4/30/99 2,276.0 0.58
High Income(g) 4/30/99 3,015.0 0.80
Intermediate Bond(g)(d) 4/30/99 3,336.4 0.43
Investment Grade Bond(g)(d) 4/30/99 2,091.6 0.43
Short-Term Bond(g)(d) 4/30/99 857.0 0.41(z)
Spartan Government Income(d) 4/30/99 560.0 0.60(z)
The North Carolina Capital
Management Trust:
Term Portfolio(d) 6/30/99 86.4 0.35
Ginnie Mae(g)(d) 7/31/99 1,232.1 0.36(z)
Government Income(d) 7/31/99 1,567.7 0.43
Intermediate Government 7/31/99 785.0 0.53(z)
Income(g)(d)
Target Timeline Funds:(g)(d)
2001 7/31/99 15.7 0.00(z)
2003 7/31/99 23.2 0.00(z)
</TABLE>
(a) All fund data are as of the fiscal year end noted in the chart or
as of August 31, 1999, if fiscal year end figures are not available
(b) Average net assets are computed on the basis of average net assets
of each fund at the close of business on each business day throughout
its fiscal period.
(c) Reflects reductions for any expense reimbursement paid by or due
from Fidelity Management & Research Company (FMR) pursuant to
voluntary or state expense limitations. Funds so affected are
indicated by a (z). For multiple class funds, the ratio of net
advisory fees to average net assets is presented gross of reductions
for certain classes, for presentation purposes. Funds so affected are
indicated by a (x).
(d) FMR has entered into a sub-advisory agreement with Fidelity
Investments Money Management, Inc., with respect to the fund.
(e) FMR has entered into sub-advisory agreements with the following
affiliates: Fidelity Management & Research(U.K.) Inc.(FMR U.K.),
Fidelity Management & Research(Far East) Inc.(FMR Far East), Fidelity
Investments Japan Ltd.(FIJ), Fidelity International Investment
Advisors(FIIA), and Fidelity International Investment Advisors(U.K.)
Limited(FIIA(U.K.) L), with respect to the fund.
(f) FMR has entered into sub-advisory agreements with the following
affiliates: FMR U.K., FMR Far East, FIIA, and FIIA(U.K.) L, with
respect to the fund.
(g) Fidelity Management & Research Company has entered into
sub-advisory agreements with FMR U.K. and FMR Far East, with respect
to the fund.
EXHIBIT 13
FUNDS ADVISED BY FMR - TABLE OF AVERAGE NET ASSETS AND EXPENSE RATIOS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
INVESTMENT OBJECTIVE AND FUND FISCAL YEAR END (A) AVERAGE NET ASSETS RATIO OF NET ADVISORY FEES
(MILLIONS)(B) TO AVERAGE NET ASSETS PAID
TO FMR (C)
MUNICIPAL INCOME (D)
Advisor Intermediate
Municipal Income(x)
Class A 10/31/98 $ 0.8 0.38%
Class T 10/31/98 53.1 0.38
Class B 10/31/98 8.4 0.38
Class C 10/31/98 0.5 0.38
Institutional Class 10/31/98 6.1 0.38
Advisor Municipal Income(x)
Class A 10/31/98 5.1 0.39
Class T 10/31/98 383.4 0.39
Class B 10/31/98 47.1 0.39
Class C 10/31/98 3.0 0.39
Institutional Class 10/31/98 2.7 0.39
Spartan Connecticut Municipal 11/30/98 356.2 0.55
Income
Spartan Florida Municipal 11/30/98 431.3 0.55
Income
Spartan Municipal Income 11/30/98 2,937.2 0.38
Spartan New Jersey Municipal 11/30/98 373.9 0.55
Income
Spartan Intermediate 12/31/98 1,128.0 0.35
Municipal Income
Spartan Michigan Municipal 12/31/98 465.2 0.38(z)
Income
Spartan Minnesota Municipal 12/31/98 303.0 0.35(z)
Income
Spartan Ohio Municipal Income 12/31/98 390.7 0.38(z)
Spartan Pennsylvania 12/31/98 265.8 0.55
Municipal Income
Spartan Massachusetts 1/31/99 1,299.6 0.38
Municipal Income
Spartan New York Municipal 1/31/99 1,144.6 0.38(z)
Income
Spartan California Municipal 2/28/99 1,280.7 0.38
Income
Spartan Arizona Municipal 8/31/99 27.4 0.55
Income
Spartan Maryland Municipal 8/31/99 47.4 0.55
Income
Spartan Short-Intermediate 8/31/99 668.1 0.55
Municipal Income
</TABLE>
(a) All fund data are as of the fiscal year end noted in the chart or
as of August 31, 1999, if fiscal year end figures are not available.
(b) Average net assets are computed on the basis of average net assets
of each fund or class at the close of business on each business day
throughout its fiscal period.
(c) Reflects reductions for any expense reimbursement paid by or due
from Fidelity Management & Research Company (FMR) pursuant to
voluntary or state expense limitations. Funds so affected are
indicated by a (z). For multiple class funds, the ratio of net
advisory fees to average net assets is presented gross of reductions
for certain classes, for presentation purposes. Funds so affected are
indicated by a (x).
(d) FMR has entered into sub-advisory agreements with Fidelity
Investments Money Management, Inc. with respect to the fund.
SCH-pxs-1199 CUSIP# 315910109/FUND# 451
1.730454.100 CUSIP# 315910836/FUND# 331
CUSIP# 31638R303/FUND# 368
CUSIP# 31638R204/FUND# 036
Vote this proxy card TODAY! Your prompt response
will save the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- ----------------------------------------------------------------------
FIDELITY SCHOOL STREET TRUST: FIDELITY INTERNATIONAL BOND FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s)
Edward C. Johnson 3d, Eric D. Roiter and Phyllis Burke Davis, or any
one or more of them, attorneys, with full power of substitution, to
vote all shares of FIDELITY SCHOOL STREET TRUST as indicated above
which the undersigned is entitled to vote at the Special Meeting of
Shareholders of the fund to be held at an office of the trust at
27 State Street, 10th Floor, Boston, MA 02109, on January 19, 2000 at
10:00 a.m. and at any adjournments thereof. All powers may be
exercised by a majority of said proxy holders or substitutes voting or
acting or, if only one votes and acts, then by that one. This Proxy
shall be voted on the proposals described in the Proxy Statement as
specified on the reverse side. Receipt of the Notice of the Meeting
and the accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When
signing in a fiduciary capacity, such as executor, administrator,
trustee, attorney, guardian, etc., please so indicate. Corporate and
partnership proxies should be signed by an authorized person
indicating the person's title.
Date __________________________________
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
(036, 331, 368, 451 HH)
Please refer to the Proxy Statement discussion of each of these
matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE
PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with
their best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- ----------------------------------------------------------------------
PLEASE VOTE BY FILLING IN THE BOXES BELOW.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the nominees FOR all nominees listed WITHWITHHOLD authority to 1.
specified below as Trustees: (except as marked to the vote for all nominees.
(01) Ralph F. Cox, (02) contrary below). [ ]
Phyllis Burke Davis, (03) [ ]
Robert M. Gates, (04) Edward
C. Johnson 3d, (05) Donald
J. Kirk, (06) Ned C.
Lautenbach, (07) Peter S.
Lynch, (08) William O.
McCoy, (09) Gerald C.
McDonough, (10) Marvin L.
Mann, (11) Robert C. Pozen,
(12) Thomas R. Williams.
(INSTRUCTION: TO WITHHOLD
AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE(S), WRITE
THE NAME(S) OF THE
NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
______________________________________________________________________
FOR AGAINST ABSTAIN
2. To ratify the selection of [ ] [ ] [ ] 2.
PricewaterhouseCoopers LLP
as independent accountants
of the fund.
3. To authorize the Trustees to [ ] [ ] [ ] 3.
adopt an amended and
restated Declaration of Trust.
4. To approve an amended [ ] [ ] [ ] 4.
sub-advisory agreement with
Fidelity Management &
Research (Far East) Inc. for
the fund.
5. To approve an amended [ ] [ ] [ ] 5.
sub-advisory agreement with
Fidelity Management &
Research (U.K.) Inc. for the
fund.
6. To approve an amended [ ] [ ] [ ] 6.
sub-advisory agreement with
Fidelity International
Investment Advisors for the
fund.
7. To approve an amended [ ] [ ] [ ] 7.
sub-advisory agreement
between Fidelity
International Investment
Advisors and Fidelity
International Investment
Advisors (U.K.) Limited for
the fund.
8. To approve an amended [ ] [ ] [ ] 8.
sub-advisory agreement with
Fidelity Investments Japan
Limited for the fund.
GLO-PXC-1199 cusip# 315910109 fund# 451 HH
Vote this proxy card TODAY! Your prompt response
will save the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- ----------------------------------------------------------------------
FIDELITY SCHOOL STREET TRUST: FIDELITY NEW MARKETS INCOME FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s)
Edward C. Johnson 3d, Eric D. Roiter and Phyllis Burke Davis, or any
one or more of them, attorneys, with full power of substitution, to
vote all shares of FIDELITY SCHOOL STREET TRUST as indicated above
which the undersigned is entitled to vote at the Special Meeting of
Shareholders of the fund to be held at an office of the trust at
27 State Street, 10th Floor, Boston, MA 02109, on January 19, 2000 at
10:00 a.m. and at any adjournments thereof. All powers may be
exercised by a majority of said proxy holders or substitutes voting or
acting or, if only one votes and acts, then by that one. This Proxy
shall be voted on the proposals described in the Proxy Statement as
specified on the reverse side. Receipt of the Notice of the Meeting
and the accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When
signing in a fiduciary capacity, such as executor, administrator,
trustee, attorney, guardian, etc., please so indicate. Corporate and
partnership proxies should be signed by an authorized person
indicating the person's title.
Date __________________________________
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
(036, 331, 368, 451 HH)
Please refer to the Proxy Statement discussion of each of these
matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE
PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with
their best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- ----------------------------------------------------------------------
PLEASE VOTE BY FILLING IN THE BOXES BELOW.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the nominees FOR all nominees listed WITHHOLD authority to vote 1.
specified below as Trustees: (except as marked to the for all nominees.
(01) Ralph F. Cox, (02) contrary below). [ ]
Phyllis Burke Davis, (03) [ ]
Robert M. Gates, (04) Edward
C. Johnson 3d, (05) Donald
J. Kirk, (06) Ned C.
Lautenbach, (07) Peter S.
Lynch, (08) William O.
McCoy, (09) Gerald C.
McDonough, (10) Marvin L.
Mann, (11) Robert C. Pozen,
(12) Thomas R. Williams.
(INSTRUCTION: TO WITHHOLD
AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE(S), WRITE
THE NAME(S) OF THE
NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
______________________________________________________________________
2. To ratify the selection of [ ] [ ] [ ] 2.
PricewaterhouseCoopers LLP
as independent accountants
of the fund.
3. To authorize the Trustees to [ ] [ ] [ ] 3.
adopt an amended and
restated Declaration of Trust.
4. To approve an amended [ ] [ ] [ ] 4.
sub-advisory agreement with
Fidelity Management &
Research (Far East) Inc. for
the fund.
5. To approve an amended [ ] [ ] [ ] 5.
sub-advisory agreement with
Fidelity Management &
Research (U.K.) Inc. for the
fund.
6. To approve an amended [ ] [ ] [ ] 6.
sub-advisory agreement with
Fidelity International
Investment Advisors for the
fund.
7. To approve an amended [ ] [ ] [ ] 7.
sub-advisory agreement
between Fidelity
International Investment
Advisors and Fidelity
International Investment
Advisors (U.K.) Limited for
the fund.
8. To approve an amended [ ] [ ] [ ] 8.
sub-advisory agreement with
Fidelity Investments Japan
Limited for the fund.
NMI-PXC-1199 cusip# 315910836 fund# 331 HH
Vote this proxy card TODAY! Your prompt response
will save the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- ----------------------------------------------------------------------
FIDELITY SCHOOL STREET TRUST: FIDELITY STRATEGIC INCOME FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s)
Edward C. Johnson 3d, Eric D. Roiter and Phyllis Burke Davis, or any
one or more of them, attorneys, with full power of substitution, to
vote all shares of FIDELITY SCHOOL STREET TRUST as indicated above
which the undersigned is entitled to vote at the Special Meeting of
Shareholders of the fund to be held at an office of the trust at
27 State Street, 10th Floor, Boston, MA 02109, on January 19, 2000 at
10:00 a.m. and at any adjournments thereof. All powers may be
exercised by a majority of said proxy holders or substitutes voting or
acting or, if only one votes and acts, then by that one. This Proxy
shall be voted on the proposals described in the Proxy Statement as
specified on the reverse side. Receipt of the Notice of the Meeting
and the accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When
signing in a fiduciary capacity, such as executor, administrator,
trustee, attorney, guardian, etc., please so indicate. Corporate and
partnership proxies should be signed by an authorized person
indicating the person's title.
Date __________________________________
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
(036, 331, 368, 451 HH)
Please refer to the Proxy Statement discussion of each of these
matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE
PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with
their best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- ----------------------------------------------------------------------
PLEASE VOTE BY FILLING IN THE BOXES BELOW.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the nominees FOR all nominees listed WITHHOLD authority to vote 1.
specified below as Trustees: (except as marked to the for all nominees. [ ]
(01) Ralph F. Cox, (02) contrary below). [ ]
Phyllis Burke Davis, (03)
Robert M. Gates, (04) Edward
C. Johnson 3d, (05) Donald
J. Kirk, (06) Ned C.
Lautenbach, (07) Peter S.
Lynch, (08) William O.
McCoy, (09) Gerald C.
McDonough, (10) Marvin L.
Mann, (11) Robert C. Pozen,
(12) Thomas R. Williams.
(INSTRUCTION: TO WITHHOLD
AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE(S), WRITE
THE NAME(S) OF THE
NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
______________________________________________________________________
FOR AGAINST ABSTAIN
2. To ratify the selection of [ ] [ ] [ ] 2.
PricewaterhouseCoopers LLP
as independent accountants
of the fund.
3. To authorize the Trustees to [ ] [ ] [ ] 3.
adopt an amended and
restated Declaration of Trust.
FSN-PXC-1199 cusip# 31638R303 fund# 368 HH
Vote this proxy card TODAY! Your prompt response
will save the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- ----------------------------------------------------------------------
FIDELITY SCHOOL STREET TRUST: SPARTAN INTERMEDIATE MUNICIPAL INCOME
FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s)
Edward C. Johnson 3d, Eric D. Roiter and Phyllis Burke Davis, or any
one or more of them, attorneys, with full power of substitution, to
vote all shares of FIDELITY SCHOOL STREET TRUST as indicated above
which the undersigned is entitled to vote at the Special Meeting of
Shareholders of the fund to be held at an office of the trust at
27 State Street, 10th Floor, Boston, MA 02109, on January 19, 2000 at
10:00 a.m. and at any adjournments thereof. All powers may be
exercised by a majority of said proxy holders or substitutes voting or
acting or, if only one votes and acts, then by that one. This Proxy
shall be voted on the proposals described in the Proxy Statement as
specified on the reverse side. Receipt of the Notice of the Meeting
and the accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When
signing in a fiduciary capacity, such as executor, administrator,
trustee, attorney, guardian, etc., please so indicate. Corporate and
partnership proxies should be signed by an authorized person
indicating the person's title.
Date __________________________________
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
(036, 331, 368, 451 HH)
Please refer to the Proxy Statement discussion of each of these
matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE
PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with
their best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- ----------------------------------------------------------------------
PLEASE VOTE BY FILLING IN THE BOXES BELOW.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the nominees FOR all nominees listed WITHHOLD authority to vote 1.
specified below as Trustees: (except as marked to the for all nominees. [ ]
(01) Ralph F. Cox, (02) contrary below). [ ]
Phyllis Burke Davis, (03)
Robert M. Gates, (04) Edward
C. Johnson 3d, (05) Donald
J. Kirk, (06) Ned C.
Lautenbach, (07) Peter S.
Lynch, (08) William O.
McCoy, (09) Gerald C.
McDonough, (10) Marvin L.
Mann, (11) Robert C. Pozen,
(12) Thomas R. Williams.
(INSTRUCTION: TO WITHHOLD
AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE(S), WRITE
THE NAME(S) OF THE
NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
______________________________________________________________________
FOR AGAINST ABSTAIN
2. To ratify the selection of [ ] [ ] [ ] 2.
PricewaterhouseCoopers LLP
as independent accountants
of the fund.
3. To authorize the Trustees to [ ] [ ] [ ] 3.
adopt an amended and
restated Declaration of Trust.
9. To modify the fund's [ ] [ ] [ ] 9.
fundamental investment
objective and eliminate
certain fundamental
investment policies.
10. To eliminate the fund's [ ] [ ] [ ] 10.
fundamental 80% investment
policy and adopt a
comparable non-fundamental
policy.
11. To amend the fund's [ ] [ ] [ ] 11.
fundamental investment
limitation concerning
diversification.
LIM-PXC-1199 cusip# 31638R204 fund# 036 HH
IMPORTANT PROXY MATERIALS
PLEASE CAST YOUR VOTE NOW!
FIDELITY INTERNATIONAL BOND FUND
FIDELITY NEW MARKETS INCOME FUND
FIDELITY STRATEGIC INCOME FUND
SPARTAN(Registered trademark) INTERMEDIATE MUNICIPAL INCOME FUND
Dear Shareholder:
I am writing to let you know that a special meeting of shareholders of
the Fidelity funds mentioned above will be held on January 19, 2000.
The purpose of the meeting is to vote on several important proposals
that affect the funds and your investment in them. As a shareholder,
you have the opportunity to voice your opinion on the matters that
affect your fund(s). This package contains information about the
proposals and the materials to use when voting by mail.
Please read the enclosed materials and cast your vote on the proxy
card(s). PLEASE VOTE AND RETURN YOUR CARD(S) PROMPTLY. YOUR VOTE IS
EXTREMELY IMPORTANT, NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY
BE.
All of the proposals have been carefully reviewed by the Board of
Trustees. The Trustees, most of whom are not affiliated with
Fidelity, are responsible for protecting your interests as a
shareholder. The Trustees believe these proposals are in the best
interest of shareholders. They recommend that you vote FOR each
proposal.
The following Q&A is provided to assist you in understanding the
proposals. Each of the proposals is described in greater detail in
the enclosed proxy statement.
VOTING IS QUICK AND EASY. EVERYTHING YOU NEED IS ENCLOSED. To cast
your vote, simply complete the proxy card(s) enclosed in this package.
Be sure to sign the card(s) before mailing it in the postage-paid
envelope.
If you have any questions before you vote, please call Fidelity at
1-800-544-8888. We'll be glad to help you get your vote in quickly.
Thank you for your participation in this important initiative.
Sincerely,
Edward C. Johnson 3d
Chairman and Chief Executive Officer
Important information to help you understand and vote on the proposals
Please read the full text of the enclosed proxy statement. Below is a
brief overview of the proposals to be voted upon. Your vote is
important. We appreciate you placing your trust in Fidelity and look
forward to helping you achieve your financial goals.
WHAT PROPOSALS AM I BEING ASKED TO VOTE ON?
You may be asked to vote on the following proposals:
1. To elect a Board of Trustees.
2. To ratify the selection of PricewaterhouseCoopers LLP as
independent accountants of the funds.
3. To authorize the Trustees to adopt an amended and restated
Declaration of Trust.
4. To approve an amended sub-advisory agreement with Fidelity
Management & Research (Far East) Inc. for Fidelity International
Bond Fund and Fidelity New Markets Income Fund.
5. To approve an amended sub-advisory agreement with Fidelity
Management & Research (U.K.) Inc. for Fidelity International Bond
Fund and Fidelity New Markets Income Fund.
6. To approve an amended sub-advisory agreement with Fidelity
International Investment Advisors for Fidelity International Bond
Fund and Fidelity New Markets Income Fund.
7. To approve an amended sub-advisory agreement between Fidelity
International Investment Advisors and Fidelity International
Investment Advisors (U.K.) Limited for Fidelity International Bond
Fund and Fidelity New Markets Income Fund.
8. To approve an amended sub-advisory agreement with Fidelity
Investments Japan Limited for Fidelity International Bond Fund and
Fidelity New Markets Income Fund.
9. To modify Spartan Intermediate Municipal Income Fund's fundamental
investment objective and eliminate certain fundamental investment
policies of the fund.
10. To eliminate Spartan Intermediate Municipal Income Fund's
fundamental 80% investment policy and adopt a comparable
non-fundamental policy.
11. To amend Spartan Intermediate Municipal Income Fund's fundamental
investment limitation concerning diversification.
WHAT ROLE DOES THE BOARD PLAY? (PROPOSAL 1)
The Trustees oversee the investment policies of each fund. Members of
the Board are fiduciaries and have an obligation to serve the best
interests of shareholders, including approving policy changes such as
those proposed in the proxy statement. In addition, the Trustees
review fund performance, oversee fund activities, and review
contractual arrangements with companies that provide services to the
funds.
WHAT IS THE ROLE OF THE INDEPENDENT ACCOUNTANTS? (PROPOSAL 2)
The independent accountants examine annual financial statements for
the funds and provide other audit and tax-related services. They also
sign or certify any financial statements of the funds that are
required by law to be independently certified and filed with the
Securities and Exchange Commission (SEC).
WHY ARE THE FUNDS PROPOSING TO ADOPT AN AMENDED AND RESTATED
DECLARATION OF TRUST? (PROPOSAL 3)
The new Declaration of Trust is a more modern form of trust instrument
for a Massachusetts business trust. It gives the Trustees more
flexibility, and, subject to the applicable requirements of federal
and state law, broader authority to act. This increased flexibility
may allow the Trustees to react more quickly to changes in competitive
and regulatory conditions.
Adoption of the new Declaration of Trust will not alter the Trustees'
existing fiduciary obligations to act in the best interests of the
funds' shareholders. Before utilizing any new flexibility that the
new Declaration of Trust may afford, the Trustees must first consider
the shareholders' interests and act in accordance with such interests.
The new Declaration of Trust amends the current Declaration of Trust
in a number of significant ways. Please review the proxy statement
for specific details.
WHAT IS A SUB-ADVISORY AGREEMENT AND HOW WILL THE PROPOSED AMENDED
SUB-ADVISORY AGREEMENTS AFFECT FIDELITY INTERNATIONAL BOND FUND AND
FIDELITY NEW MARKETS INCOME FUND? (PROPOSALS 4, 5, 6, 7, AND 8)
Generally, the sub-advisory agreements allow FMR increased access to
more specialized investment expertise in foreign markets. Each fund's
amended sub-advisory agreements allow FMR, FMR U.K., FMR Far East,
Fidelity International Investment Advisors (FIIA), FIIA (U.K.)L, and
Fidelity Investments Japan (FIJ) Limited, and the trust, on behalf of
the fund, to modify the fund's sub-advisory agreements subject to the
requirements of the 1940 Act. FMR U.K., with its principal office in
London, England, FMR Far East, with its principal office in Tokyo,
Japan, FIIA, with its principal office in Pembroke, Bermuda, FIIA
(U.K.)L, with its principal office in Kent, England, and FIJ, with its
principal office in Tokyo, Japan are wholly-owned subsidiaries of FMR.
The amended agreements would not affect the fees paid to FMR by each
fund.
WHY IS SPARTAN INTERMEDIATE MUNICIPAL INCOME FUND PROPOSING TO MODIFY
ITS FUNDAMENTAL INVESTMENT OBJECTIVE, AND ELIMINATE CERTAIN
FUNDAMENTAL INVESTMENT POLICIES? (PROPOSAL 9)
The primary purpose of this proposal is to allow the fund to more
clearly communicate its investment strategy by standardizing its
investment disclosure in a manner consistent with other Fidelity funds
with similar investment disciplines. Modifying the fund's fundamental
investment objective and eliminating the investment policies as
proposed will have no material effect on the way the fund is managed.
WHY IS SPARTAN INTERMEDIATE MUNICIPAL INCOME FUND PROPOSING TO
ELIMINATE ITS FUNDAMENTAL 80% INVESTMENT POLICY AND ADOPT A COMPARABLE
NON-FUNDAMENTAL POLICY? (PROPOSAL 10)
By eliminating the fund's fundamental (cannot be changed without
shareholder approval) 80% investment policy, and adopting a
non-fundamental (future changes to the policy would only require
approval by the Board of Trustees, not shareholders) policy, the
Trustees will be able to comply more quickly when the SEC adopts a
definitive version of its proposed name test rule (Name Test Rule).
The Name Test Rule governs the use of mutual fund names and, if and
when eventually adopted by the SEC, may apply to the fund.
If the proposal is approved, the Trustees will have the flexibility to
modify the fund's policy to conform to the Name Test Rule (if a
definitive version is adopted by the SEC) without the delay and
expense of a shareholder meeting. The Trustees anticipate that the
approval of the proposal will have no material effect on the fund or
its investment operations.
WHAT IS THE BENEFIT OF AMENDING THE FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING DIVERSIFICATION FOR SPARTAN INTERMEDIATE MUNICIPAL INCOME
FUND? (PROPOSAL 11)
This proposal would permit the fund, subject to the requirements of
the 1940 Act, to invest without limit in the securities of other
investment companies including the portion of the fund allocated to
the fixed-income market. Pursuant to an order of exemption granted by
the SEC, the fund may invest in short-term bond or money market funds
managed by FMR or an affiliate of FMR (the Investment Funds). FMR
anticipates that investing in the Investment Funds will benefit the
fund by enhancing the efficiency of the investment of cash generated
by fund shareholder or investment activity, or through the investment
of fund assets allocated to the short-term bond or money markets in
support of a fund's investment objective.
HAS THE FUND'S BOARD OF TRUSTEES APPROVED EACH PROPOSAL?
Yes. The Board of Trustees has unanimously approved all of the
proposals and recommends that you vote to approve them.
HOW MANY VOTES AM I ENTITLED TO CAST?
As a shareholder, you are entitled to one vote for each dollar of net
asset value you own of a fund on the record date. The record date is
November 22, 1999.
HOW DO I VOTE MY SHARES?
You can vote your shares by completing and signing the enclosed proxy
card(s) and mailing it in the enclosed postage paid envelope. If you
need any assistance, or have any questions regarding the proposals or
how to vote your shares, please call Fidelity at 1-800-544-8888.
HOW DO I SIGN THE PROXY CARD?
INDIVIDUAL ACCOUNTS: Shareholders should sign exactly as their names
appear on the account registration shown on the card.
JOINT ACCOUNTS: Either owner may sign, but the name of the person
signing should conform exactly to a name shown in the registration.
ALL OTHER ACCOUNTS: The person signing must indicate his or her
capacity. For example, a trustee for a trust or other entity should
sign, "Ann B. Collins, Trustee."
