SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the [X]
Registrant
Filed by a [ ]
Party other than the
Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the
Commission Only (as
permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant
to Sec. 240.14a-11(c) or
Sec. 240.14a-12
(Name of Registrant as
Specified In Its Charter)
Fidelity Summer Street Trust
(Name of Person(s) Filing
Proxy Statement, if other
than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below
per Exchange Act Rules
14a-6(i)(1) and 0-11.
(1) Title of each class of
securities to which
transaction applies:
(2) Aggregate number of
securities to which
transaction applies:
(3) Per unit price or other
underlying value of
transaction
computed pursuant to Exchange
Act Rule 0-11:
(4) Proposed maximum aggregate
value of transaction:
(5) Total Fee Paid:
[ ] Fee paid previously with
preliminary materials.
[ ] Check box if any part of the
fee is offset as provided by
Exchange Act Rule 0-11(a) (2)
and identify the filing for
which the offsetting fee was
paid previously. Identify the
previous filing by
registration statement
number, or the Form or
Schedule and the date of
its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or
Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
FIDELITY CAPITAL & INCOME FUND
A FUND OF
FIDELITY SUMMER STREET TRUST
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-544-6666
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of FIDELITY CAPITAL & INCOME FUND:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
Meeting) of Fidelity Capital & Income Fund (the fund), a series of
Summer Street Trust, a single series trust (the trust), will be held
at an office of the trust, 27 State Street, 10th Floor, Boston,
Massachusetts 02109 on May 17, 2000, at 9:00 a.m. The purpose of the
Meeting is to consider and act upon the following proposals, and to
transact such other business as may properly come before the Meeting
or any adjournments thereof.
1. To elect a Board of Trustees.
2. To ratify the selection of PricewaterhouseCoopers LLP as
independent accountants of the fund.
3. To authorize the Trustees to adopt an amended and restated
Declaration of Trust.
4. To approve an amended management contract for the fund.
5. To approve an amended sub-advisory agreement with Fidelity
Management & Research (U.K.) Inc. for the fund.
6. To approve an amended sub-advisory agreement with Fidelity
Management & Research (Far East) Inc. for the fund.
7. To amend the fund's fundamental investment limitation concerning
diversification to exclude securities of other investment
companies from the limitation.
The Board of Trustees has fixed the close of business on March 20,
2000 as the record date for the determination of the shareholders of
the fund 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
March 20, 2000
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 SUMMER STREET TRUST: FIDELITY CAPITAL & INCOME FUND
TO BE HELD ON MAY 17, 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 Summer Street Trust (the trust) to be used at the Special
Meeting of Shareholders of Fidelity Capital & Income Fund (the fund)
and at any adjournments thereof (the Meeting), to be held on May 17,
2000 at 9:00 a.m. at 27 State Street, 10th Floor, Boston,
Massachusetts 02109, an office of the trust and Fidelity Management &
Research Company (FMR), the fund's 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 March 20, 2000.
Supplementary solicitations may be made by mail, telephone, telegraph,
facsimile, electronic means or by personal interview by
representatives of the trust. In addition, Management Information
Services Corp. (MIS) and D.F. King & Co., Inc. may be paid on a
per-call basis to solicit shareholders on behalf of the fund at an
anticipated cost of approximately $6,000. The fund may also
arrange to have votes recorded by telephone. D.F. King & Co., Inc. may
be paid on a per-call basis for vote-by-phone solicitations on behalf
of the fund at an anticipated cost of approximately $8,000. If
the fund records votes by telephone, it 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. The expenses in connection with preparing this
Proxy Statement and its enclosures and of all solicitations, including
telephone voting, will be paid by the fund. The fund will reimburse
brokerage firms and others for their reasonable expenses in forwarding
solicitation material to the beneficial owners of shares.
The principal business address of Fidelity Distributors Corporation
(FDC), the fund's 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
the fund, is 82 Devonshire Street, Boston, Massachusetts 02109.
Fidelity Investments Japan Limited (FIJ) located at Shiroyama JT Mori
Blgd., 4-3-1 Toranomon, Minato-Ku, Tokyo 105, Japan is also a
subadvisor to the 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. With respect to the fund
shares held in Fidelity individual retirement accounts (including
Traditional, Rollover, SEP, SAR-SEP, Roth and SIMPLE IRAs), the IRA
Custodian will vote those shares for which it has received
instructions from shareholders only in accordance with such
instructions. If Fidelity IRA shareholders do not vote their shares,
the IRA Custodian will vote their shares for them, in the same
proportion as other Fidelity IRA shareholders have voted, but only to
the extent necessary to reach quorum at the meeting.
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.
On January 31, 2000, there were 317,295,008 shares of the fund
issued and outstanding. Shareholders of record at the close of
business on March 20, 2000 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.
As of January 31, 2000, the nominees and officers of the trust owned,
in the aggregate, less than 1% of the fund's outstanding shares.
FOR A FREE COPY OF THE FUND'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED
APRIL 30, 1999 AND THE SEMIANNUAL REPORT FOR THE FISCAL PERIOD ENDED
OCTOBER 31, 1999 CALL 1-800-544-6666 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
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 7 REQUIRES THE AFFIRMATIVE VOTE OF A "MAJORITY OF
THE OUTSTANDING VOTING SECURITIES" OF THE FUND. UNDER THE INVESTMENT
COMPANY ACT OF 1940 (THE 1940 ACT), THE VOTE OF A "MAJORITY OF THE
OUTSTANDING VOTING SECURITIES" MEANS THE AFFIRMATIVE VOTE OF THE
LESSER OF (A) 67% OR MORE OF THE VOTING SECURITIES PRESENT AT THE
MEETING OR REPRESENTED BY PROXY IF THE HOLDERS OF MORE THAN 50% OF THE
OUTSTANDING VOTING SECURITIES ARE PRESENT OR REPRESENTED BY PROXY OR
(B) MORE THAN 50% OF THE OUTSTANDING VOTING SECURITIES. BROKER
NON-VOTES ARE NOT CONSIDERED "PRESENT" FOR THIS PURPOSE.
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 Summer 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.
All nominees named below are currently Trustees of Fidelity Summer
Street Trust and have served in that capacity continuously since
originally elected or appointed. Robert M. Gates, Ned C. Lautenbach,
William O. McCoy and Robert Pozen were selected by the trust's
Nominating and Administration Committee (see page 14) and were
appointed to the Board in March 1997, December 1999, January 1997 and
August 1997, respectively. None of the nominees are related to one
another. Those nominees indicated by an asterisk (*) are "interested
persons" of the trust by virtue of, among other things, their
affiliation with either the trust, the fund's investment adviser (FMR,
or the Adviser), or the fund's distribution agent, FDC. The business
address of each nominee who is an "interested person" is 82 Devonshire
Street, Boston, Massachusetts 02109, and the business address of all
other nominees is Fidelity Investments, P.O. Box 9235, Boston,
Massachusetts 02205-9235. Except for Robert M. Gates, Ned C.
Lautenbach, William O. McCoy, and Robert C. Pozen, each of the
nominees is currently a Trustee of 56 registered investment
companies advised by FMR. Mr. Gates, Mr. McCoy and Mr. Pozen are
currently Trustees of 55 registered investment companies
advised by FMR. Mr. Lautenbach is currently a Trustee of 52
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 Waste Management
Inc. (non-hazardous waste,
1993), CH2M Hill Companies
(engineering), and
Bonneville Pacific
(independent power and
petroleum production). In
addition, he is a member of
advisory boards of Texas A&M
University and the
University of Texas at Austin.
Phyllis Burke Davis (68) Retired from Avon Products, 1992
Inc. where she held various
positions including Senior
Vice President of Corporate
Affairs and Group Vice
President of U.S. sales,
distribution, and
manufacturing. She is
currently a Director of
BellSouth Corporation
(telecommunications), Eaton
Corporation (manufacturing),
and the TJX Companies, Inc.
(retail stores), and
previously served as a
Director of Hallmark Cards,
Inc., Nabisco Brands, Inc.,
and Standard Brands, Inc. In
addition, she is a member of
the Board of Directors of
the Southampton Hospital in
Southampton, N.Y. (1998).
Robert M. Gates (56) 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 Charles Stark
Draper Laboratory
(non-profit), NACCO
Industries, Inc. (mining and
manufacturing), and TRW Inc.
(automotive, space, defense,
and information technology).
Mr. Gates previously served
as a Director of Lucas
Varity PLC (automotive
components and diesel
engines). He is currently
serving as Dean of the
George Bush School of
Government and Public
Service at Texas A & M
University (1999-2000). Mr.
Gates also is a Trustee of
the Forum for International
Policy and of the Endowment
Association of the College
of William and Mary. In
addition, he is a member of
the National Executive Board
of the Boy Scouts of America.
*Edward C. Johnson 3d (69) President, is Chairman, Chief 1977
Executive Officer and a
Director of FMR Corp.; a
Director and Chairman of the
Board and of the Executive
Committee of FMR; Chairman
and a Director of Fidelity
Investments Money
Management, Inc. (1998),
Fidelity Management &
Research (U.K.) Inc., and
Fidelity Management &
Research (Far East) Inc.;
and a Director of FDC.
Donald J. Kirk (67) Executive-in-Residence (1995) 1987
at Columbia University
Graduate School of Business.
From 1987 to January 1995,
Mr. Kirk was a Professor at
Columbia University Graduate
School of Business. Prior to
1987, he was Chairman of the
Financial Accounting
Standards Board. Mr. Kirk
previously served as a
Director of General Re
Corporation (reinsurance,
1987-1998) and as a Director
of Valuation Research Corp.
(appraisals and valuations,
1993-1995). He serves as
Chairman of the Board of
Directors of National Arts
Stabilization Inc., Chairman
of the Board of Trustees of
the Greenwich Hospital
Association, Director of the
Yale-New Haven Health
Services Corp. (1998), Vice
Chairman of the Public
Oversight Board of the
American Institute of
Certified Public
Accountants' SEC Practice
Section (1995), and as a
Public Governor of the
National Association of
Securities Dealers, Inc.
(1996).
Ned C. Lautenbach (56) 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 (57) 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.
William O. McCoy (66) Interim Chancellor for the 1997
University of North Carolina
at Chapel Hill. Previously
he had served from 1995
through 1998 as Vice
President of Finance for the
University of North Carolina
(16-school system). Prior to
his retirement in December
1994, Mr. McCoy was Vice
Chairman of the Board of
BellSouth Corporation
(telecommunications, 1984)
and President of BellSouth
Enterprises (1986). He is
currently a Director of
Liberty Corporation (holding
company, 1984), Duke-Weeks
Realty Corporation (real
estate, 1994), Carolina
Power and Light Company
(electric utility, 1996),
the Kenan Transport Company
(trucking, 1996), and
Dynatech Corporation
(electronics, 1999).
Previously, he was a
Director of First American
Corporation (bank holding
company, 1979-1996). In
addition, Mr. McCoy served
as a member of the Board of
Visitors for the University
of North Carolina at Chapel
Hill (1994-1998) and
currently serves on the
Board of Visitors of the
Kenan-Flager Business School
(University of North
Carolina at Chapel Hill,
1988).
Gerald C. McDonough (71) Chairman of the 1989
non-interested Trustees, is
Chairman of G.M. Management
Group (strategic advisory
services). Mr. McDonough is
a Director and Chairman of
the Board of York
International Corp. (air
conditioning and
refrigeration), Commercial
Intertech Corp. (hydraulic
systems, building systems,
and metal products, 1992),
CUNO, Inc. (liquid and gas
filtration products, 1996),
and Associated Estates
Realty Corporation (a real
estate investment trust,
1993). Mr. McDonough served
as a Director of
ACME-Cleveland Corp. (metal
working, telecommunications,
and electronic products)
from 1987-1996 and
Brush-Wellman Inc. (metal
refining) from 1983-1997.
Marvin L. Mann (67) Chairman Emeritus of Lexmark 1993
International, Inc. (office
machines, 1991) where he
still remains a member of
the Board. Prior to 1991, he
held the positions of Vice
President of International
Business Machines
Corporation ("IBM") and
President and General
Manager of various IBM
divisions and subsidiaries.
Mr. Mann is a Director of
M.A. Hanna Company
(chemicals, 1993), Imation
Corp. (imaging and
information storage, 1997).
He is a Board member of
Dynatech Corporation
(electronics, 1999).
*Robert C. Pozen (53) 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
National Life Insurance
Company of Vermont and
American Software, Inc. Mr.
Williams was previously a
Director of ConAgra, Inc.
(agricultural products),
Georgia Power Company
(electric utility), and
Avado, Inc. (restaurants).
</TABLE>
** Except as otherwise indicated, each individual has held the office
shown or other offices in the same company for the last five years.
As of January 31, 2000, the nominees, Trustees and officers of the
trust and the fund owned, in the aggregate, less than 1% of the 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 be no meeting of shareholders
for the purpose of electing Trustees.
The trust's Board, which is currently composed of three interested
and nine non-interested Trustees, met eleven times during the twelve
months ended April 30, 1999. It is expected that the Trustees will
meet at least ten times a year at regularly scheduled meetings.
The trust's Audit Committee is composed entirely of Trustees who are
not interested persons of the trust, FMR or its affiliates and
normally meets four times a year, or as required, in conjunction with
meetings of the Board of Trustees. Currently, Messrs. Kirk (Chairman),
Gates and McCoy, and Mrs. Davis are members of the committee. The
committee oversees and monitors the trust's internal control
structure, its auditing function and its financial reporting process,
including the resolution of material reporting issues. The committee
recommends to the Board of Trustees the appointment of auditors for
the trust. It reviews audit plans, fees and other material
arrangements in respect of the engagement of auditors, including
non-audit services to be performed. It reviews the qualifications of
key personnel involved in the foregoing activities. The committee
plays an oversight role in respect of the trust's investment
compliance procedures and the code of ethics. During the twelve months
ended April 30, 1999, the committee held seven meetings.
The trust's Nominating and Administration Committee is currently
composed of Messrs. McDonough (Chairman), Mann, and Williams. The
committee members confer periodically and hold meetings as required.
The committee makes nominations for independent trustees, and for
membership on committees. The committee periodically reviews
procedures and policies of the Board of Trustees and committees. It
acts as the administrative committee under the Retirement Plan for
non-interested trustees who retired prior to December 30, 1996. It
monitors the performance of legal counsel employed by the trust and
the independent trustees. The committee in the first instance monitors
compliance with, and acts as the administrator of the provisions of
the code of ethics applicable to the independent trustees. During the
twelve months ended April 30, 1999, the committee held two meetings.
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 the
fund for his or her services for the fiscal year ended April 30, 1999,
or calendar year ended December 31, 1999, as applicable.
<TABLE>
<CAPTION>
<S> <C> <C>
COMPENSATION TABLE
Trustees and Member of the Aggregate Compensation from Total Compensation from the
Advisory Board Fidelity Capital & Income Fund Complex*,A
FundB,C,D
Edward C. Johnson3d** $ 0 $ 0
Abigail P. Johnson**,1 $ 0 $ 0
Ralph F. Cox $ 759 $ 217,500
Phyllis Burke Davis $ 744 $ 211,500
Robert M. Gates $ 759 $ 217,500
E. Bradley Jones**** $ 754 $ 217,500
Donald J. Kirk $ 765 $ 217,500
Ned C. Lautenbach*** $ 0 $ 54,000
Peter S. Lynch** $ 0 $ 0
William O. McCoy $ 759 $ 214,500
Gerald C. McDonough $ 929 $ 269,000
Marvin L. Mann $ 759 $ 217,500
Robert C. Pozen** $ 0 $ 0
Thomas R. Williams $ 759 $ 213,000
</TABLE>
* Information is for the calendar year ended December 31, 1999 for
236 funds in the complex.
** Interested Trustees of the fund and Ms. Johnson are
compensated by FMR.
*** During the period from October 14, 1999 through December 31, 1999,
Mr. Lautenbach served as a Member of the Advisory Board of the
trust. Mr. Lautenbach was appointed to the Board of Trustees
effective January 1, 2000.
**** Mr. Jones served on the Board of Trustees through December 31,
1999.
1 Effective April 1, 1999, Ms. Johnson serves as a Member of the
Advisory Board of certain trusts, including Fidelity Summer Street
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, 199 9 , the Trustees accrued
required deferred compensation from the funds as follows: Ralph F.
Cox, $75,000; Phyllis Burke Davis, $75,000; Robert M. Gates, $75,000;
E. Bradley Jones, $75,000; Donald J. Kirk, $75,000; William O. McCoy,
$75,000; Gerald C. McDonough, $87,500; Marvin L. Mann, $75,000; and
Thomas R. Williams, $75,000. Certain of the non-interested Trustees
elected voluntarily to defer a portion of their compensation as
follows: Ralph F. Cox, $ 53,735 ; William O. McCoy,
$53,735 ; and Thomas R. Williams, $ 62,319 .
B Compensation figures include cash, and may include amounts required
to be deferred and amounts deferred at the election of Trustees.
C The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $ 342; Phyllis Burke
Davis, $ 342; Robert M. Gates, $ 342; E. Bradley Jones,
$ 342; Donald J. Kirk, $ 342; Ned C. Lautenbach,
$ 0 ; William O. McCoy, $ 342; Gerald C. McDonough,
$ 399; Marvin L. Mann, $ 342 ; and Thomas R. Williams,
$ 342 .
D For the fiscal year ended April 30, 1999, certain of the
non-interested Trustees' aggregate compensation from the fund includes
accrued voluntary deferred compensation as follows: Ralph F. Cox,
$290; Marvin L. Mann, $200; William O. McCoy, $290; and Thomas R.
Williams, $290.
Under a deferred compensation plan adopted in September 1995 and
amended in November 1996 a nd January 200 0 (the Plan),
non-interested Trustees must defer receipt of a portion of, and may
elect to defer receipt of an additional portion of, their annual fees.
Amounts deferred under the Plan are treated as though equivalent
dollar amounts had been invested in shares of a cross-section of
Fidelity funds including funds in each major investment discipline and
representing a majority of Fidelity's assets under management (the
Reference Funds). The amounts ultimately received by the Trustees
under the Plan will be directly linked to the investment performance
of the Reference Funds. Deferral of fees in accordance with the Plan
will have a negligible effect on a fund's assets, liabilities, and net
income per share, and will not obligate a fund to retain the services
of any Trustee or to pay any particular level of compensation to the
Trustee. A fund may invest in the Reference Funds under the Plan
without shareholder approval.
2. TO RATIFY THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS
INDEPENDENT ACCOUNTANTS OF THE FUND.
By a vote of the non-interested Trustees, the firm of
PricewaterhouseCoopers LLP has been selected as independent
accountants for the fund to sign or certify any financial statements
of the 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 the 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 the 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 the fund inconsistent with the
independence standards pertaining to accountants.
The independent accountants examine annual financial statements for
the fund and provide other audit and tax-related services. In
recommending the selection of the 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 fund
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 fund 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 fund's Trustees or officers or in the investment
policies described in the 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 and November 18, 1999, 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 and November
18, 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 OR CLASSES.
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 all or a portion of the trust or
any of its series or classes. 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 all or a portion
of the trust, a fund or class 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 all or a portion of the trust or any of its
series or classes 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 fund 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 or class. 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, fund, or class
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 or class with another operating mutual fund or sell
all or a portion of a class's or 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.
REFERENCES TO CLASSES. The New Declaration of Trust includes explicit
references to "classes" of a fund in appropriate places throughout the
document. Classes are often a more efficient way of offering a
specific investment strategy to different types of investors without
creating separate funds for each type of investor. Each class
represents an interest in the same portfolio of securities but may be
offered with different service features, distribution arrangements or
fees. Although the Trustees are not prohibited from authorizing the
issuance of classes of shares under the Current Declaration of Trust,
the Trustees believe that it is appropriate to explicitly describe
their ability, without a vote of Shareholders, to establish new
classes of shares, to change or abolish existing classes of shares, to
divide an existing fund into classes of shares, and to take any other
action with respect to classes that they deem appropriate.
INVESTMENT IN OTHER INVESTMENT COMPANIES. The New Declaration of
Trust clarifies that the Trustees may authorize the investment of a
portion of the fund's assets in one or more open-end investment
companies (Fund-of-Funds Structure). The current Declaration of Trust
explicitly allows the Trustees to authorize the fund to invest all of
its assets in a single open-end investment company but does not
specifically provide the Trustees with the ability to invest a portion
of its assets in one or more investment companies. In a Fund-of-Funds
Structure, each fund retains its own characteristics, but is able to
achieve efficiencies by consolidating portfolio management for some or
all of its assets with other funds or to achieve other operational
efficiencies. The purpose of the Fund-of-Funds Structure generally is
to achieve operational efficiencies by consolidating portfolio
management for a portion of the fund's assets with other funds which
invest a portion of their assets similarly. For example, three
different funds with different allocations among stocks, bonds and
money market investments but similar investment policies within each
asset class might each invest in the same stock, bond and money market
funds. The Fund-of-Funds Structure allows multiple funds with similar
investment policies for a portion of their assets to consolidate
portfolio management in a single pool for their assets that are
managed similarly. FMR and the Board of Trustees continually review
methods of structuring mutual funds to take advantage of potential
efficiencies or other benefits. While neither FMR nor the Trustees
have determined that a Fund-of-Funds Structure is appropriate at this
time, the Trustees believe it could be in the best interests of the
fund to adopt such a structure at a future date. If approved, the New
Declaration of Trust would provide the Trustees with the power to
authorize the fund to invest all or a portion of its assets in one or
more open-end investment companies. The Trustees will authorize such a
transaction only if a Fund-of-Funds Structure is permitted under the
fund's investment policies and if they determine that a Fund-of-Funds
Structure is in the best interests of the fund and its shareholders.
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 to enter into a Management Contract with the trust,
on behalf of the fund, and to amend the fund's Management Contract
subject to the provisions of Section 15 of the 1940 Act, as modified
or interpreted by the SEC. In contrast, the Current Declaration of
Trust explicitly requires the vote of a majority of the outstanding
voting securities of a fund to enter into and amend Management
Contracts. A corresponding change is also proposed for the fund's
Management Contract. For more information on this topic generally, see
"Modification of Management Contract Amendment Provisions" on page 24.
2. The New Declaration of Trust broadens the authority of the
Trustees to redeem a shareholder for any reason deemed appropriate by
the Trustees. The Trustees' ability to do so would be limited by the
1940 Act and other applicable legal and regulatory requirements. The
Current Declaration of Trust explicitly allows the Trustees only to
redeem shareholders who do not meet a fund's minimum balance
requirement.
3. The New Declaration of Trust explicitly allows the Trustees to
effect Subportfolio Fund Structures, mergers, reorganizations and
similar transactions through any method approved by the Trustees,
including share-for-share exchanges, transfers or sale of assets,
shareholder in-kind redemptions and purchases, and exchange offers.
4. 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.
5. The New Declaration of Trust confirms and clarifies various
existing Trustee powers. For example, the New Declaration of Trust
clarifies that the Trustees may employ as fund custodians, in addition
to banks and trust companies, 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; interpret the investment
policies, practices, and limitations of any fund; and deal in shares
of a fund.
6. 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.
7. 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.
8. The New Declaration of Trust clarifies that the Trustees may
authorize dividends of fund property in addition to stock dividends.
9. The New Declaration of Trust permits the rights and preferences of
a Series or Class to be set forth in the registration statement for
such Series or Class or in any other document in addition to in a
resolution of the Board of Trustees.
10. 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 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 MANAGEMENT CONTRACT FOR THE FUND.
The Board of Trustees, including the Trustees who are not "interested
persons" of the Trust or of FMR (the Independent Trustees), has
approved, and recommends that shareholders of the fund approve, a
proposal to adopt an amended management contract with FMR (the Amended
Contract). The Amended Contract would lower two components of the
management fee FMR receives from the fund. First, the individual fund
fee rate would be reduced from 0.55% to 0.45% of the fund's average
daily net assets, resulting in a net decrease of 0.10% of average net
assets. Second, the Amended Contract modifies the management fee that
FMR receives from the fund to provide for lower fees when FMR's assets
under management exceed certain levels. In addition, the Amended
Contract allows FMR and the trust, on behalf of the fund, to modify
the Management Contract subject to the requirements of the 1940 Act.
The existing Management Contract (Present Contract) currently requires
the vote of a majority of the fund's outstanding voting securities to
authorize all amendments. See "Modification of Management Contract
Amendment Provisions" on page 25 for more details. THE AMENDED
CONTRACT WILL RESULT IN A MANAGEMENT FEE THAT IS LOWER THAN THE FEE
PAYABLE UNDER THE PRESENT CONTRACT. The proposed reduction in the
fund's individual fund fee rate was voluntarily adopted by FMR on July
1, 1996. (For information on FMR, see the section entitled "Activities
and Management of FMR" on page .)
PROPOSED AMENDMENTS TO THE PRESENT MANAGEMENT CONTRACT. A copy of the
Amended Contract, marked to indicate the proposed amendments, is
supplied as Exhibit 2 on page . Except for the modifications discussed
above, it is substantially identical to the Present Contract. (For a
detailed discussion of the fund's Present Contract, refer to the
section entitled "Present Management Contract" beginning on page .) If
approved by shareholders, the Amended Contract will take effect on
June 1, 2000 (or, if later, the first day of the first month following
approval) and will remain in effect through June 30, 2000 and
thereafter, but only as long as its continuance is approved at least
annually by (i) the vote, cast in person at a meeting called for the
purpose, of a majority of the Independent Trustees and (ii) the vote
of either a majority of the Trustees or by the vote of a majority of
the outstanding shares of the fund. If the Amended Contract is not
approved, the Present Contract will continue in effect through June
30, 2000, and thereafter only as long as its continuance is approved
at least annually as above.
The management fee is an annual percentage of the fund's average net
assets (the management fee rate), calculated and paid monthly. The
management fee rate is the sum of two components: a Group Fee Rate,
which varies according to assets under management by FMR, and a fixed
Individual Fund Fee Rate. The Amended Contract modifies the Individual
Fund Fee Rate from 0.55% of the fund's average net assets to 0.45% of
the fund's average net assets. The Amended Contract also modifies the
Group Fee Rate by providing for lower fee rates if FMR's assets under
management remain above $156 billion.
MODIFICATION TO INDIVIDUAL FUND FEE RATE. The Amended Contract for
the fund would decrease the fund's Individual Fund Fee Rate from 0.55%
to 0.45% of the fund's average daily net assets. The proposed
reduction in the fund's Individual Fund Fee Rate was voluntarily
adopted by FMR on July 1, 1996.
MODIFICATION TO GROUP FEE RATE. The Group Fee Rate varies based upon
the monthly average of the aggregate net assets of all registered
investment companies having management contracts with FMR (assets
under management by FMR). For example, as assets under management by
FMR increase, the Group Fee Rate declines. The Amended Contract would
not change the group fee calculation for assets under management by
FMR of $156 billion or less. Above $156 billion in assets under FMR's
management, the Group Fee Rate declines under both the Present
Contract and the Amended Contact, but under the Amended Contract, it
declines faster. Group Fee Rates that are lower than those contained
in the fund's Present Contract have been voluntarily implemented by
FMR on August 1, 1994, January 1, 1996, and August 1, 1999.
The Group Fee Rate is calculated according to a graduated schedule
providing for different rates for different levels of assets under
management by FMR. The rate at which the Group Fee Rate declines is
determined by fee "breakpoints" that provide for lower fee rates when
assets increase. The Amended Contract adds new fee breakpoints for
assets under FMR's management above $156 billion as illustrated in the
following table. (For an explanation of how the Group Fee Rate is used
to calculate the management fee, see the section entitled "Present
Management Contract" beginning on page .)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
GROUP FEE RATE BREAKPOINTS
PRESENT CONTRACT AMENDED CONTRACT
Average Group Assets ($ Present Contract* Average Group Assets ($ Amended Contract
billions) billions)
84 - 120 .1500% 84 - 120 .1500%
120 - 174 .1450% 120 - 156 .1450%
174 - 228 .1400% 156 - 192 .1400%
228 - 282 .1375% 192 - 228 .1350%
282 - 336 .1350% 228 - 264 .1300%
over 336 .1325% 264 - 300 .1275%
300 - 336 .1250%
336 - 372 .1225%
372 - 408 .1200%
408 - 444 .1175%
444 - 480 .1150%
480 - 516 .1125%
516 - 587 .1100%
587 - 646 .1080%
646 - 711 .1060%
711 - 782 .1040%
782 - 860 .1020%
860 - 946 .1000%
946 - 1,041 .0980%
1,041 - 1,145 .0960%
1,145 - 1,260 .0940%
over 1,260 .0920%
</TABLE>
The result at various levels of group net assets is illustrated by
the table below.
EFFECTIVE ANNUAL GROUP FEE RATES
Group Net Assets ($ billions) Present Contract* Amended Contract
150 .1736% .1736%
200 .1658% .1652%
250 .1604% .1587%
300 .1565% .1536%
350 .1533% .1494%
400 .1507% .1459%
450 .1487% .1427%
500 .1471% .1399%
550 .1457% .1372%
600 .1446% .1349%
650 .1437% .1328%
700 .1429% .1309%
750 .1422% .1291%
800 .1416% .1275%
850 .1411% .1260%
900 .1406% .1246%
950 .1402% .1233%
1,000 .1398% .1220%
1,050 .1394% .1209%
1,100 .1391% .1197%
1,150 .1388% .1187%
1,200 .1386% .1177%
1,250 .1383% .1167%
1,300 .1381% .1158%
1,350 .1379% .1149%
1,400 .1377% .1141%
* Does not reflect voluntary adoption of extended group fee rate
schedules by FMR on August 1, 1994, January 1, 1996, and August 1,
1999.
Average assets under FMR's management for January 31, 2000
were approximately $ 847 billion.
COMPARISON OF MANAGEMENT FEES. For the month ended January 31,
2000 , average assets under management by FMR were approximately
$ 847 billion. The fund's management fee rate under the Amended
Contract, for the twelve months ended January 2000 , would have
been 0.57 89 %, compared to 0.69 20 % under the Present
Contract.
The management fee rate will decline under the Amended Contract. In
particular, the Individual Fund Fee Rate will decrease by 0.10% of the
fund's average net assets. The Group Fee Rate will remain the same
under both the Present Contract and the Amended Contract until assets
under FMR's management exceed $156 billion, at which point the Group
Fee Rate under the Amended Contract begins to decline relative to the
Present Contract, resulting in a further reduction in the management
fee rate.
The following chart compares the fund's management fee as calculated
under the terms of the Present Contract for fiscal 1999 to the
management fee the fund would have incurred if the Amended Contract
had been in effect.
Present Contract Amended Contract Difference (as a percentage
of Management Fee(s) paid
under the Present Contract)
$ 15,789,000 $ 13,268,000 (15.97)%
* Does not reflect voluntary adoption of extended group fee rate
schedules by FMR on August 1, 1994, January 1, 1996, and August 1,
1999, nor voluntary adoption of the reduction in the Individual Fund
Fee Rate for the fund on July 1, 1996.
The following chart compares the fund's management fee under the
terms of the Present Contract for the twelve month period ended
January 31, 2000 to the management fee the fund would have
incurred if the Amended Contract had been in effect.
Present Contract Amended Contract Difference (as a percentage
of Management Fee(s) paid
under the Present Contract)
$ 18,083,000 $ 15,128,000 (16.34)%
* Does not reflect voluntary adoption of extended group fee rate
schedules by FMR on August 1, 1994, January 1, 1996, and August 1,
1999, nor voluntary adoption of the reduction in the Individual Fund
Fee Rate for the fund on July 1, 1996.
MODIFICATION OF MANAGEMENT CONTRACT AMENDMENT PROVISIONS. The Amended
Contract allows FMR and the trust, on behalf of the fund, to amend the
Management Contract subject to the provisions of Section 15 of the
1940 Act, as modified or interpreted by the Securities and Exchange
Commission. In contrast, the Present Contract explicitly requires the
vote of a majority of the outstanding voting securities of the fund to
authorize all amendments. Generally, the proposed modification to the
Present Contract's amendment provisions will allow FMR and the trust,
on behalf of the fund, to amend the Management Contract without
shareholder vote IF THE 1940 ACT PERMITS THEM TO DO SO. For example,
under current interpretations of Section 15 of the 1940 Act, the
Amended Contract would give FMR and the trust the ability to amend the
Management Contract to immediately reflect a management fee decrease
without the delay of having to first conduct a proxy solicitation. In
short, the proposed modification gives FMR and the trust added
flexibility to amend the Management Contract subject to 1940 Act
constraints. Of course, any future amendments to the Management
Contract would require the approval of the fund's Board of Trustees.
MATTERS CONSIDERED BY THE BOARD
The mutual funds for which the members of the Board of Trustees serve
as Trustees are referred to herein as the "Fidelity funds." The Board
of Trustees meets eleven times a year. The Board of Trustees,
including the Independent Trustees, believe that matters bearing on
the appropriateness of the fund's management fees are considered at
most, if not all, of their meetings. While the full Board of Trustees
or the Independent Trustees, as appropriate, act on all major matters,
a significant portion of the activities of the Board of Trustees
(including certain of those described herein) are conducted through
committees. The Independent Trustees meet frequently in executive
session and are advised by independent legal counsel selected by the
Independent Trustees.
The proposal to present the Amended Contract to shareholders was
approved by the Board of Trustees of the fund, including all of the
Independent Trustees, on July 7, 1999. The Board of Trustees,
including all of the Independent Trustees of the fund, considered and
approved the modifications to the Individual Fund Fee Rate on June 20,
1996, and considered and approved the modifications to the Group Fee
Rate schedule during the two month periods from September to October
1999, November to December 1995, and June to July 1994. The Board of
Trustees received materials relating to the Amended Contract in
advance of the meeting at which the Amended Contract was considered,
and had the opportunity to ask questions and request further
information in connection with such consideration.
INFORMATION RECEIVED BY THE INDEPENDENT TRUSTEES. In connection with
their meetings the Trustees received materials specifically relating
to the Amended Contract. These materials included (i) information on
the investment performance of the fund, a peer group of funds and an
appropriate index or combination of indices, (ii) sales and redemption
data in respect of the fund, and (iii) the economic outlook and the
general investment outlook in the markets in which the fund invests.
The Board of Trustees and the Independent Trustees also consider
periodically other material facts such as (1) FMR's results and
financial condition, (2) arrangements in respect of the distribution
of the fund's shares, (3) the procedures employed to determine the
value of the fund's assets, (4) the allocation of the fund's
brokerage, if any, including allocations to brokers affiliated with
FMR, (5) FMR's management of the relationships with the fund's
custodian and subcustodians, (6) the resources devoted to and the
record of compliance with the fund's investment policies and
restrictions and with policies on personal securities transactions and
(7) the nature, cost and character of non-investment management
services provided by FMR and its affiliates.
In response to questions raised by the Independent Trustees,
additional information was furnished by FMR including, among other
items, information on and analysis of (a) the overall organization of
FMR, (b) the choice of performance indices and benchmarks, (c) the
composition of peer groups of funds, (d) transfer agency and
bookkeeping fees paid to affiliates of FMR, (e) investment
performance, (f) investment management staffing, (g) the potential for
achieving further economies of scale, (h) operating expenses paid to
third parties, and (i) the information furnished to investors,
including the fund's shareholders.
In considering the Amended Contract, the Board of Trustees and the
Independent Trustees did not identify any single factor as
all-important or controlling, and the following summary does not
detail all the matters considered. Matters considered by the Board of
Trustees and the Independent Trustees in connection with their
approval of the Amended Contract include the following:
BENEFITS TO SHAREHOLDERS. The Board of Trustees and the Independent
Trustees considered the benefit to shareholders of investing in a fund
that is part of a large family of funds offering a variety of
investment disciplines and providing for a large variety of fund and
shareholder services. With regard to the proposed modification to the
Present Contract's amendment provisions, the Board of Trustees and the
Independent Trustees considered the benefit to shareholders of FMR's
and the trust's increased flexibility (within 1940 Act constraints) to
amend the Management Contract without the delays and potential costs
of a proxy solicitation.
INVESTMENT COMPLIANCE AND PERFORMANCE. The Board of Trustees and the
Independent Trustees considered whether the fund has operated within
its investment objective and its record of compliance with its
investment restrictions. They also reviewed monthly the fund's
investment performance as well as the performance of a peer group of
mutual funds, and the performance of an appropriate index or
combination of indices.
FMR'S PERSONNEL AND METHODS. The Board of Trustees and the
Independent Trustees review at least annually the background of the
fund's portfolio manager and the fund's investment objective and
discipline. The Independent Trustees have also had discussions with
senior management of FMR responsible for investment operations and the
senior management of Fidelity's fixed income group. Among other things
they considered the size, education and experience of FMR's investment
staff, its use of technology, and FMR's approach to recruiting,
training and retaining portfolio managers and other research, advisory
and management personnel.
NATURE AND QUALITY OF OTHER SERVICES. The Board of Trustees and the
Independent Trustees considered the nature, quality, cost and extent
of administrative and shareholder services performed by FMR and
affiliated companies, both under the Present Contract and the Amended
Contract and under separate agreements covering transfer agency
functions and pricing, bookkeeping and securities lending services, if
any. The Board of Trustees and the Independent Trustees have also
considered the nature and extent of FMR's supervision of third party
service providers, principally custodians and subcustodians.
EXPENSES. The Board of Trustees and the Independent Trustees
considered the fund's expense ratio and expense ratios of a peer group
of funds. They also considered the amount and nature of fees paid by
shareholders.
PROFITABILITY. The Board of Trustees and the Independent Trustees
considered the level of FMR's profits in respect of the management of
the Fidelity funds, including the fund. This consideration included an
extensive review of FMR's methodology in allocating its costs to the
management of the fund. The Board of Trustees and the Independent
Trustees have concluded that the cost allocation methodology employed
by FMR has a reasonable basis and is appropriate in light of all of
the circumstances. They considered the profits realized by FMR in
connection with the operation of the fund and whether the amount of
profit is a fair entrepreneurial profit for the management of the
fund. They also considered the profits realized from non-fund
businesses which may benefit from or be related to the fund's
business. The Board of Trustees and the Independent Trustees also
considered FMR's profit margins in comparison with available industry
data, both accounting for and ignoring marketing expenses.
ECONOMIES OF SCALE. The Board of Trustees and the Independent
Trustees considered whether there have been economies of scale in
respect of the management of the Fidelity funds, whether the Fidelity
funds (including the fund) have appropriately benefitted from any
economies of scale, and whether there is potential for realization of
any further economies of scale. The Board of Trustees and the
Independent Trustees have concluded that FMR's mutual fund business
presents some limited opportunities to realize economies of scale and
that these economies are being shared between fund shareholders and
FMR in an appropriate manner. The Independent Trustees have also
concluded that the existing group fee structure should be continued
but determined that it would be appropriate to change the group fee
structure as proposed herein.
OTHER BENEFITS TO FMR. The Board of Trustees and the Independent
Trustees also considered the character and amount of fees paid by the
fund and the fund's shareholders for services provided by FMR and its
affiliates, including fees for services like transfer agency, fund
accounting and direct shareholder services. They also considered the
allocation of fund brokerage to brokers affiliated with FMR and the
receipt of sales loads and payments under Rule 12b-1 plans in respect
of certain of the Fidelity funds. The Board of Trustees and the
Independent Trustees also considered the revenues and profitability of
FMR businesses other than its mutual fund business, including FMR's
retail brokerage, correspondent brokerage, capital markets, trust,
investment advisory, pension record keeping, insurance, publishing,
real estate, international research and investment funds, and others.
The Board of Trustees and the Independent Trustees considered the
intangible benefits that accrue to FMR and its affiliates by virtue of
their relationship with the fund.
CONCLUSION. Based on their evaluation of all material factors and
assisted by the advice of independent counsel, the Trustees concluded
(i) that the existing management fee structure is fair and reasonable
and (ii) that the proposed modifications to the management fee
structure, that is the reduction of the Individual Fund Fee Rate, the
reduction of the Group Fee Rate schedule, and the proposed
modification to the Present Contract's amendment provisions are in the
best interest of the fund's shareholders. The Board of Trustees,
including the Independent Trustees, voted to approve the submission of
the Amended Contract to shareholders of the fund and recommends that
shareholders of the fund vote FOR the Amended Contract. If approved,
the Amended Contract will take effect on the first day of the first
month following shareholder approval.
5. TO APPROVE AN AMENDED SUB-ADVISORY AGREEMENT WITH FMR FAR EAST FOR
THE FUND.
The Board of Trustees, including the Trustees who are not "interested
persons" of the trust or of FMR (the Independent Trustees), has
approved, and recommends that shareholders of the fund approve, a
proposal to adopt an amended sub-advisory agreement among FMR, FMR Far
East, and the trust with respect to the fund (the Amended Agreement).
The 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. The 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 THE FUND'S AMENDED
AGREEMENT. THE FUND'S AMENDED AGREEMENT WOULD NOT AFFECT THE FEES THAT
THE FUND PAYS TO FMR UNDER ITS PRESENT MANAGEMENT CONTRACT.
PRESENT AGREEMENTS. Under the 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 the 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. Effective January 1, 2000, FMR Far
East, in turn, has entered into a sub-advisory agreement with Fidelity
Investments Japan Limited (FIJ), a wholly owned subsidiary of Fidelity
International Limited, to provide such investment research and
portfolio management advice as FMR Far East reasonably requests. FMR
Far East, NOT THE FUND , pays FIJ a sub-advisory fee equal to
100% of FIJ's costs incurred in connection with providing investment
advice and research services.
Furthermore, under the 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 the
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.
The 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. The fund's Amended
Agreement would allow FMR, FMR Far East, and the trust, on behalf of
the fund, to amend the Proposed Agreement subject to the provisions of
Section 15 of the 1940 Act, as modified or interpreted by the
Securities and Exchange Commission. In contrast, the 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 the fund pursuant to a unanimous vote of
both the full Board of Trustees and the Independent Trustees. The
Trustees considered the benefit to shareholders of FMR's, FMR Far
East's, and the trust's increased flexibility (within 1940 Act
constraints) to amend the Amended Agreement without the delays and
potential costs of a proxy solicitation.
A corresponding modification is also proposed to the amendment
provisions in Fidelity Capital & Income Fund's present management
contract. See "Modification of Management Contract Amendment
Provisions" on page .
A copy of the form of Amended Agreement for the fund, marked to
indicate the proposed amendments, is supplied as Exhibit 3 beginning
on page 49. Except for the modifications discussed above, Fidelity
Capital & Income Fund's Amended Agreements are substantially identical
to their Present Agreements. (For a detailed discussion of the fund's
Present Agreement, refer to the section entitled "Sub-Advisory
Agreements" beginning on page .) If approved by shareholders, the
fund's Amended Agreement will take effect on June 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. The 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 the 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 the 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 THE 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., FMR Far East, and FIJ" on page .
CONCLUSION. The Board of Trustees has concluded that the proposal
will benefit the fund and its shareholders. The Trustees recommend
voting FOR the proposal. With respect to the 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.
6. TO APPROVE AMENDED SUB-ADVISORY AGREEMENTS WITH FMR U.K. FOR THE
FUND.
The Board of Trustees, including the Trustees who are not "interested
persons" of the trust or of FMR (the Independent Trustees), has
approved, and recommends that shareholders of the fund approve, a
proposal to adopt an amended sub-advisory agreement among FMR, FMR
U.K., and the trust with respect to the fund (the Amended Agreement).
The 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. The 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 THE FUND'S AMENDED AGREEMENT.
THE FUND'S AMENDED AGREEMENT WOULD NOT AFFECT THE FEES THAT THE FUND
PAYS TO FMR UNDER ITS PRESENT MANAGEMENT CONTRACT.
PRESENT AGREEMENTS. Under the 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
the 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 the 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 the 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.
The 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. The fund's Amended
Agreement would allow FMR, FMR U.K., and the trust, on behalf of the
fund, to amend the Proposed Agreement subject to the provisions of
Section 15 of the 1940 Act, as modified or interpreted by the
Securities and Exchange Commission. In contrast, the 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 the fund pursuant to a unanimous vote of
both the full Board of Trustees and the Independent Trustees. The
Trustees considered the benefit to shareholders of FMR's, FMR U.K.'s,
and the trust's increased flexibility (within 1940 Act constraints) to
amend the Amended Agreement without the delays and potential costs of
a proxy solicitation.
A corresponding modification is also proposed to the amendment
provisions in Fidelity Capital & Income Fund's present management
contract. See "Modification of Management Contract Amendment
Provisions" on page .
A copy of the form of Amended Agreement for the fund, marked to
indicate the proposed amendments, is supplied as Exhibit 4 beginning
on page 53. Except for the modifications discussed above, Fidelity
Capital & Income Fund's Amended Agreements are substantially identical
to their Present Agreements. (For a detailed discussion of the fund's
Present Agreement, refer to the section entitled "Sub-Advisory
Agreements" beginning on page .) If approved by shareholders, the
fund's Amended Agreement will take effect on June 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. The 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 the 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 the 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 THE 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., FMR Far East, and FIJ " on page .
CONCLUSION. The Board of Trustees has concluded that the proposal
will benefit the fund and its shareholders. The Trustees recommend
voting FOR the proposal. With respect to the fund, if the Amended
Agreement is approved by shareholders, the Amended Agreement will take
effect on the first day of the first month following approval. If the
Amended Agreement is not approved by shareholders, the Present
Agreement with FMR U.K. will remain in effect.
7. TO AMEND THE 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.
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 Capital & Income Fund and advised by FMR is
contained in the Table of Average Net Assets and Expense Ratios in
Exhibit 5 beginning on page 56.
FMR, its officers and directors, its affiliated companies, and the
Trustees, from time to time have transactions with various banks,
including the custodian banks for certain of the funds advised by FMR.
Those transactions that have occurred to date have included mortgages
and personal and general business loans. In the judgment of FMR, the
terms and conditions of those transactions were not influenced by
existing or potential custodial or other fund relationships.
The Directors of FMR are Edward C. Johnson 3d, Chairman of the Board
and of the Executive Committee; Robert C. Pozen, President; Peter S.
Lynch, Vice Chairman; and Abigail P. Johnson, Senior Vice President.
With the exception of Ms. Johnson, each of the Directors is
also a Trustee of the trust. Messrs. Johnson 3d, Pozen, John H.
Costello, Matthew N. Karstetter, Maria F. Dwyer, Eric D. Roiter,
Robert A. Dwig ht, Robert A. Lawrence, and David Glancy are
currently officers of the trust and officers or employees of FMR or
FMR Corp. 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 May 1, 1999 through January 31, 2000, 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. , FMR FAR EAST, AND
FIJ
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 grant FMR U.K. and FMR Far
East 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. FIJ is a wholly owned subsidiary of Fidelity International
Limited, organized in Japan in 1986 to provide research and investment
recommendations with respect to companies primarily based in Japan and
other parts of Asia.
Funds with investment objectives similar to Fidelity Capital & 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 Exhibit 5 beginning on page
57.
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 Fidelity Investments Money Management, Inc.
(FIMM); Chairman, Chief Executive Officer, President, and a Director
of FMR Corp., and a Director and Chairman of the Board and of the
Executive Committee of FMR. In addition, Mr. Pozen is Senior Vice
President and a Trustee of the trust and of other funds advised by
FMR; President and a Director of FMR; and President and a Director of
FIMM. Each of the Directors is a stock holder of FMR Corp. The
principal business address of the Directors is 82 Devonshire Street,
Boston, Massachusetts 02109.
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.
PRESENT MANAGEMENT CONTRACT
The fund employs FMR to furnish investment advisory and other
services. Under its management contract with the fund, FMR acts as
investment adviser and, subject to the supervision of the Board of
Trustees, directs the investments of the fund in accordance with its
investment objective, policies, and limitations. FMR also provides the
fund with all necessary office facilities and personnel for servicing
the fund's investments, compensates all officers of the fund and all
Trustees who are "interested persons" of the trust or of FMR, and all
personnel of the fund or FMR performing services relating to research,
statistical, and investment activities.
In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administrative services
necessary for the operation of the fund. These services include
providing facilities for maintaining the fund's organization;
supervising relations with custodians, transfer and pricing agents,
accountants, underwriters, and other persons dealing with the fund;
preparing all general shareholder communications and conducting
shareholder relations; maintaining the fund's records and the
registration of the fund's shares under federal and state laws;
developing management and shareholder services for the fund; and
furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees. Services provided by affiliates of FMR will continue
under the proposed management contract described in proposal 4.
In addition to the management fee payable to FMR, the fund pays
transfer agent and pricing and bookkeeping fees to Fidelity Service
Company, Inc. (FSC), an affiliate of FMR, its transfer, dividend
disbursing, and shareholder servicing agent. Although the fund's
current management contract provides that the fund will pay for
typesetting, printing, and mailing prospectuses, statements of
additional information, notices, and reports to shareholders, the
trust, on behalf of the fund has entered into a revised transfer agent
agreement with FSC, pursuant to which FSC bears the costs of providing
these services to existing shareholders. Other expenses paid by the
fund include interest, taxes, brokerage commissions, and the fund's
proportionate share of insurance premiums and Investment Company
Institute dues. The fund is also liable for such non-recurring
expenses as may arise, including costs of any litigation to which the
fund may be a party, and any obligation it may have to indemnify its
officers and Trustees with respect to litigation.
Transfer agent fees, including reimbursement for out-of-pocket
expenses, paid to FSC by the fund for fiscal 1999 amounted to
$4 ,232,0 00. Pricing and bookkeeping fees, including
reimbursement for out-of-pocket expenses, paid to FSC by the fund for
fiscal 1999 amounted to $788,000. FSC also received fees for
administering the fund's securities lending program. Securities
lending costs are based on the number and duration of individual
securities loans. Securities lending costs for the fiscal year ended
1999 were $13,000.
The fund also has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer
registered under the Securities Exchange Act of 1934 and is a member
of the National Association of Securities Dealers, Inc. The
distribution agreement calls for FDC to use all reasonable efforts,
consistent with its other business, to secure purchasers for shares of
the fund, which are continuously offered at net asset value per share.
Promotional and administrative expenses in connection with the offer
and sale of shares are paid by FMR.
FDC received no payments from the fund pursuant to a Distribution and
Service Plan under Rule 12b-1. The Plan does not authorize payments by
the fund other than those that are to be made to FMR under its
management contract.
FMR is the fund's manager pursuant to a management contracted dated
April 1, 1994, which was approved by shareholders on March 23, 1994.
The management contract was submitted to shareholders in connection
with a proposal to provide for lower fees when FMR's assets under
management exceed certain levels.
For the services of FMR under the management contract, the fund pays
FMR a monthly management fee which has two components: a group fee
rate and an individual fund fee rate.
The group fee rate is based on the monthly average net assets of all
of the registered investment companies with which FMR has management
contracts and is calculated on a cumulative basis pursuant to the
graduated fee rate schedule shown below on the left. The schedule
below on the right shows the effective annual group fee rate at
various asset levels, which is the result of cumulatively applying the
annualized rates on the left. For example, the effective annual fee
rate at $748 billion of group net assets - the approximate level for
April 1999 - was 0.1300%, which is the weighted average of the
respective fee rates for each level of group net assets up to $748
billion.
On August 1, 1999, January 1, 1996 and August 1, 1994, FMR
voluntarily modified the breakpoints in the group fee rate schedule.
The revised group fee rate schedule, depicted below, provides for
lower management fee rates as FMR's assets under management increase.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Assets Annualized Rate Group Net Assets Effective Annual Fee Rate
0 - $3 billion .3700% $ 1 billion .3700%
3 - 6 .3400 50 .2188
6 - 9 .3100 100 .1869
9 - 12 .2800 150 .1736
12 - 15 .2500 200 .1652
15 - 18 .2200 250 .1587
18 - 21 .2000 300 .1536
21 - 24 .1900 350 .1494
24 - 30 .1800 400 .1459
30 - 36 .1750 450 .1427
36 - 42 .1700 500 .1399
42 - 48 .1650 550 .1372
48 - 66 .1600 600 .1349
66 - 84 .1550 650 .1328
84 - 120 .1500 700 .1309
120 - 156 .1450 750 .1291
156 - 192 .1400 800 .1275
192 - 228 .1350 850 .1260
228 - 264 .1300 900 .1246
264 - 300 .1275 950 .1233
300 - 336 .1250 1,000 .1220
336 - 372 .1225 1,050 .1209
372 - 408 .1200 1,100 .1197
408 - 444 .1175 1,150 .1187
444 - 480 .1150 1,200 .1177
480 - 516 .1125 1,250 .1167
516 - 587 .1100 1,300 .1158
587 - 646 .1080 1,350 .1149
646 - 711 .1060 1,400 .1141
711 - 782 .1040
782 - 860 .1020
860 - 946 .1000
946 - 1,041 .0980
1,041 - 1,145 .0960
1,145 - 1,260 .0940
Over 1,260 .0920
</TABLE>
The fund's individual fund fee rate is 0.55%. Effective July 1, 1996,
FMR voluntarily agreed to reduce the individual fund fee rate from
0.55% to 0.45%, the rate currently in effect. Based on the average
group net assets of the funds advised by FMR for April 1999, the
fund's annual management fee rate would be calculated as follows:
Group Fee Rate Individual Fund Fee Rate Management Fee Rate
0.1300% + 0.45%* = 0.5800%
* If the voluntary reduction effective July 1, 1996 were not in
effect, the total management fee rate in this example would have been
0.6800%.
One-twelfth of this annual management fee rate is applied to the
fund's net assets averaged for the most recent month, giving a dollar
amount, which is the fee for that month.
During fiscal 1999, FMR received $13,268,000 for its services as
investment adviser to the fund. This fee was equivalent to 0.5829% of
the average net assets of the fund.
FMR may, from time to time, agree to reimburse all or a portion of
the fund's total operating expenses (exclusive of interest, taxes,
brokerage commissions, and extraordinary expenses). FMR retains the
ability to be repaid for these expense reimbursements in the amount
that expenses fall below the limit prior to the end of the fiscal
year.
SUB-ADVISORY AGREEMENTS
On behalf of the fund, FMR has entered into sub-advisory agreements
with FMR U.K. and FMR Far East. FMR Far East, in turn, has entered
into a sub-advisory agreement with FIJ. Pursuant to the
sub-advisory agreements, FMR may receive investment advice and
research services outside the United States from the sub-advisers. 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 fund. The sub-advisory agreements, dated
April 1, 1994, were approved by shareholders on March 23, 1994. The
sub-advisory agreements were submitted to shareholders to seek
approval for FMR to grant FMR U.K. and FMR Far East investment
management authority as well as the authority to buy and sell
securities if FMR believes it will be beneficial to the fund and its
shareholders. FMR Far East's sub-advisory agreement with FIJ is
dated January 1, 2000.
Currently, FMR U.K. and FMR Far East each focus on issuers in
countries other than the United States such as those in Europe, Asia,
and the Pacific Basin.
FMR U.K. and FMR Far East, which were organized in 1986, are wholly
owned subsidiaries of FMR. FIJ, which was organized in 1986, is a
wholly owned subsidiary of Fidelity International Limited. Under
the sub-advisory agreements FMR pays the fees of FMR U.K. and FMR Far
East. For providing non-discretionary investment advice and research
services, FMR pays FMR U.K. and FMR Far East fees equal to 110% and
105%, respectively, of FMR U.K.'s and FMR Far East's costs incurred in
connection with providing investment advice and research services.
FMR Far East pays FIJ a fee equal to 100% of FIJ's costs incurred in
connection with providing investment advice and research services.
For providing discretionary investment management and executing
portfolio transactions, FMR pays FMR U.K. and FMR Far East a fee equal
to 50% of its monthly management fee rate with respect to the fund's
average net assets managed by the sub-adviser on a discretionary
basis.
For the fiscal year ended April 30, 1999, no fees were paid by FMR to
FMR U.K. and FMR Far East on behalf of the fund.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are
placed on behalf of the fund by FMR pursuant to authority contained in
the 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.
During fiscal 1999, the fund paid brokerage commissions of $45,000 to
NFSC. During fiscal 1999, this amounted to approximately 6.3% of the
aggregate brokerage commissions paid by the fund.
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
The language to be added to the current Amended and Restated
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 Amended and Restated Declaration of Trust remain underlined in
this Exhibit.
((FORM OF AMENDED AND RESTATED DECLARATION OF TRUST
FIDELITY SUMMER STREET TRUST))
DATED [APRIL 14, 1994]((__________________))
AMENDED AND RESTATED DECLARATION OF TRUST, made [April 14, 1994]
((____________, 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 March 23, 1977 by Edward C.
Johnson 3d, William L. Byrnes, and Caleb Loring, Jr. 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 Summer 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) [The "Trust" refers to Fidelity Summer Street Trust and
reference to the Trust, when applicable to one or more Series of the
Trust, shall refer to any such Series;] (("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;
[(e) 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;]
[(f)] (((g))) "Shares" means the equal proportionate transferable
units of interest into which the beneficial interest of the Trust or
each Series shall be divided from time to time, including such
[c]((C))lass or [c]((C))lasses of Shares as the Trustees may from time
to time create and establish ((and)) including fractions of Shares as
well as whole Shares ((as)) consistent with the requirements of
Federal and/or [other] ((state)) securities laws;
[(g) The "1940 Act" refers to the Investment Company Act of 1940, as
amended from time to time; and]
(h) "Series" refers to ((any)) series of Shares of the Trust
established in accordance with the provisions of Article III[.]((;))
(((i) "Trust" refers to Fidelity Summer Street Trust and reference
to the Trust, when applicable to one or more Series of the Trust,
shall refer to any such Series;))
(((j) "Trustees" refer to the individual trustees in their capacity
as trustees hereunder of the Trust and their successor or successors
for the time being in office as such trustee or trustees; and))
(((k) "1940 Act" refers to the Investment Company Act of 1940, as
amended from time to time.))
ARTICLE II
PURPOSE OF TRUST
The [P]((p))urpose of this Trust is to provide investors a continuous
source of managed investment in securities.
ARTICLE III
BENEFICIAL INTEREST
SHARES OF BENEFICIAL INTEREST
SECTION 1. The beneficial interest in the Trust shall be divided into
such transferable Shares of one or more separate and distinct Series
or [c]((C))lasses ((of Series)) as the Trustees shall((,)) from time
to time((,)) create and establish. The number of ((authorized)) Shares
((of each Series, and Class thereof,)) is unlimited((.)) [and]
[e]((E))ach Share shall be without par value and shall be fully paid
and nonassessable. The Trustees shall have full power and authority,
in their sole discretion((,)) and without obtaining any prior
authorization or vote of the Shareholders [or] of any Series or
[c]((C))lass [of Shareholders] of the Trust (((a))) to create and
establish (and to change in any manner) Shares or any Series or
[c]((C))lasses thereof[,] with such preferences, voting powers,
rights((,)) and privileges as the Trustees may((,)) from time to
time((,)) determine[,]((;)(b) ))to divide or combine the Shares or any
Series or [c]Classes thereof into a greater or lesser number[,]((; (c)
))to classify or reclassify any issued Shares into one or more Series
or [c]((C))lasses of Shares[,]((; (d) ))to abolish any one or more
Series ((or Classes)) of Shares[,]((;)) and (((e))) to take such other
action with respect to the Shares as the Trustees may deem desirable.
ESTABLISHMENT OF SERIES AND CLASSES
SECTION 2. The establishment of any Series ((or Class thereof)) shall
be effective upon the adoption of a resolution by a majority of the
then Trustees setting forth such establishment and designation and the
relative rights and preferences of the Shares of such Series ((or
Class, whether directly in such resolution or by reference to, or
approval of, another document that sets forth such relative rights and
preferences of the Shares of such Series or Class including, without
limitation, any registration statement of the Trust, or as otherwise
provided in such resolution)). At any time that there are no Shares
outstanding of any particular Series ((or Class ))previously
established and designated, the Trustees may by a majority vote
abolish [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 account of the contribution shall be treated as an
asset of the Trust. Subsequent investments in the Trust shall be
credited to each Shareholder's account in the form of full Shares at
the Net Asset Value per Share next determined after the investment is
received; provided, however, that the Trustees may, in their sole
discretion[,] (a) impose a sales charge ((or other fee)) upon
investments in the Trust ((or Series or any Classes thereof,)) and (b)
issue fractional Shares.
ASSETS AND LIABILITIES OF SERIES AND CLASSES
SECTION 5. All consideration received by the Trust for the issue or
sale of Shares of a particular Series, together with all assets in
which such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof, including any proceeds
derived from the sale, exchange((,)) or liquidation of such assets,
and any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall be referred to as
"assets belonging to" that Series. In addition((,)) any assets,
income, earnings, profits, and proceeds thereof, funds, or payments
[which] ((that)) are not readily identifiable as belonging to any
particular Series ((or Class,)) shall be allocated by the Trustees
between and among one or more of the Series ((or Classes)) in such
manner as they, in their sole discretion, deem fair and equitable.
Each such allocation shall be conclusive and binding upon the
Shareholders of all Series ((or Classes ))for all purposes[,] and
shall be referred to as assets belonging to that Series ((or Class)).
The assets belonging to a particular Series shall be so recorded upon
the books of the Trust[,] ((or of its agent or agents)) and shall be
held by the Trustees in [T]((t))rust for the benefit of the holders of
Shares of that Series.
The assets belonging to each particular Series shall be charged with
the liabilities of that Series and all expenses, costs, charges, and
reserves attributable to that Series((, except that liabilities and
expenses may, in the Trustees' discretion, be allocated solely to a
particular Class and, in which case, shall be borne by that Class)).
Any general liabilities, expenses, costs, charges, or reserves of the
Trust [which] ((that)) are not readily identifiable as belonging to
any particular Series ((or Class)) shall be allocated and charged by
the Trustees between or among any one or more of the Series ((or
Classes)) in such manner as the Trustees((,)) in their sole
discretion((,)) deem fair and equitable ((and shall be referred to as
"liabilities belonging to" that Series or Class)). Each such
allocation shall be conclusive and binding upon the Shareholders of
all Series ((or Classes)) for all purposes. Any creditor of any Series
may look only to the assets of that Series to satisfy such creditor's
debt. ((No Shareholder or former Shareholder of any Series shall have
a claim on or any right to any assets allocated or belonging to any
other Series.))
NO PREEMPTIVE RIGHTS
SECTION 6. Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued by the
Trust or the Trustees.
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; ELECTION
SECTION 2. ((The initial Trustees shall be at least three individuals
who shall affix their signatures hereto.)) On [or before December 31,
1978, on] a date fixed by the Trustees, the Shareholders shall elect
not less than three Trustees. A Trustee shall not be required to be a
Shareholder of the Trust. [The initial Trustees shall be Edward C.
Johnson 3rd, William L. Byrnes and Caleb Loring Jr., and such other
individuals as the Board of Trustees shall appoint pursuant to Section
4 of this Article IV.]
TERM OF OFFICE OF TRUSTEES
SECTION 3. The Trustees shall hold office during the lifetime of this
Trust, and until its termination as hereinafter provided; except (a)
that any Trustee may resign his trust by written instrument signed by
him and delivered to the other Trustees, which shall take effect upon
such delivery or upon such later date as is specified therein; (b)
that any Trustee may be removed at any time by written instrument,
signed by at least two-thirds (((2/3))) of the number of Trustees
prior to such removal, specifying the date when such removal shall
become effective; (c) that any Trustee who requests in writing to be
retired or who has become incapacitated by illness or injury may be
retired by written instrument signed by a majority of the other
Trustees, specifying the date of his retirement; and (d) a Trustee may
be removed at any [S]((s))pecial [M]((m))eeting of the Trust by a vote
of two-thirds (((2/3))) of the outstanding Shares.
RESIGNATION AND APPOINTMENT OF TRUSTEES
SECTION 4. In case of the declination, death, resignation,
retirement, ((or)) removal[, incapacity, or inability] of any of the
Trustees, or in case a vacancy shall, by reason of an increase in
number[,] ((of the Trustees,)) or for any other reason, exist, the
remaining Trustees shall fill such vacancy by appointing such other
person as they in their discretion shall see fit consistent with the
limitations under the 1940 Act. Such appointment shall be evidenced by
a written instrument signed by a majority of the Trustees in office or
by recording in the records of the Trust, whereupon the appointment
shall take effect. An appointment of a Trustee may be made by the
Trustees then in office in anticipation of a vacancy to occur by
reason of retirement, resignation((,)) or increase in number of
Trustees effective at a later date, provided that said appointment
shall become effective only at or after the effective date of said
retirement, resignation((,)) or increase in number of Trustees. As
soon as any Trustee so appointed shall have accepted this
[t]((T))rust, the [t]((T))rust estate shall vest in the new Trustee or
Trustees, together with the continuing Trustees, without any further
act or conveyance, and he shall be deemed a Trustee hereunder. The
((foregoing ))power of appointment is subject to the provisions of
Section 16(a) of the 1940 Act,(( as modified by or interpreted by any
applicable order or orders of the Commission or any rules or
regulations adopted or interpretative releases of the Commission)).
TEMPORARY ABSENCE OF 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 ((or
Series)).
ARTICLE V
POWERS OF THE TRUSTEES
POWERS
SECTION 1. The Trustees((,)) in all instances((,)) shall act as
principals[,] and are and shall be free from the control of the
Shareholders. The Trustees shall have full power and authority to do
any and all acts and to make and execute any and all contracts and
instruments that they may consider necessary or appropriate in
connection with the management of the Trust. ((Except as otherwise
provided herein or in the 1940 Act,)) [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 ((one or more banks, trust companies, companies that
are members of ))a [bank] ((national securities exchange, or other
entities permitted under the 1940 Act, as modified by or interpreted
by any applicable order)) or [trust company] ((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, custodian] ((investment
adviser, manager, custodian, underwriter,)) or [underwriter] ((other
agent or independent contractor)).
(i) To sell or exchange any or all of the assets of the Trust,
subject to the provisions of Article XII, Section 4[(b)] hereof.
(j) To vote or give assent[,] or exercise any rights of ownership[,]
with respect to stock or other securities or property; and to execute
and deliver powers of attorney to such person or persons as the
Trustees shall deem proper, granting to such person or persons such
power and discretion with relation to securities or property as the
Trustees shall deem proper.
(k) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities.
(l) To hold any security or property in a form not indicating any
trust, whether in bearer, unregistered((,)) or other negotiable form;
or either in its own name or in the name of a custodian or a nominee
or nominees [,subject in either case to proper safeguards according to
the usual practice of Massachusetts trust companies or investment
companies].
(m) To establish separate and distinct Series with separately
defined investment objectives and policies and distinct investment
purposes in accordance with the provisions of Article III ((and to
establish Classes of such Series having relative rights, powers, and
duties as the Trustees may provide consistent with applicable laws.))
(n) To allocate assets, liabilities((,)) and expenses of the Trust
to a particular Series ((or Class, as appropriate,)) or to apportion
the same between or among two or more Series[,] ((or Classes, as
appropriate,)) provided that any liabilities or expenses incurred by a
particular Series ((or Class)) shall be payable solely out of the
assets belonging to that Series as provided for in Article III.
(o) To consent to or participate in any plan for the reorganization,
consolidation((,)) or merger of any corporation or concern, any
security of which is held in the Trust; to consent to any contract,
lease, mortgage, purchase, or sale of property by such corporation or
concern, and to pay calls or subscriptions with respect to any
security held in the Trust.
(p) To compromise, arbitrate, or otherwise adjust claims in favor of
or against the Trust or any matter in controversy((,)) including, but
not limited to, claims for taxes.
(q) To make distributions of income and of capital gains to
Shareholders in the manner hereinafter provided for.
(r) To borrow money((,)) and to pledge, mortgage((,)) or hypothecate
the assets of the Trust((,)) subject to ((the)) applicable
requirements of the 1940 Act.
(s) To establish, from time to time, a minimum total investment for
Shareholders[,] and to require the redemption of the Shares of any
Shareholders whose investment is less than such minimum upon giving
notice to such Shareholder.
(((t) To operate as and carry on the business of an investment
company and to exercise all the powers necessary and appropriate to
the conduct of such operations.))
(((u) To interpret the investment policies, practices or limitations
of any Series.))
(((v) To issue, sell, repurchase, redeem, retire, cancel, acquire,
hold, resell, reissue, dispose of, and otherwise deal in Shares and,
subject to the provisions set forth in Article III and Article X, to
apply to any such repurchase, redemption, retirement, cancellation or
acquisition of Shares any funds or property of the Trust, or the
particular Series of the Trust, with respect to which such Shares are
issued.))
[(t)] (((w))) Notwithstanding any other provision hereof, to invest
all ((or a portion ))of the assets of any [s]((S))eries in [a single]
((one or more)) open-end investment [company] ((companies)), including
investment by means of transfer of such assets in exchange for an
interest or interests in such investment company ((or companies or by
any other method approved by the Trustees.))
(((x) In general to carry on any other business in connection with
or incidental to any of the foregoing powers, to do everything
necessary, suitable or proper for the accomplishment of any purpose or
the attainment of any object or the furtherance of any power
hereinbefore set forth, either alone or in association with others,
and to do every other act or thing incidental or appurtenant to or
growing out of or connected with the aforesaid business or purposes,
objects or powers.))
((The foregoing clauses shall be construed both as objects and
powers, and the foregoing enumeration of specific powers shall not be
held to limit or restrict in any manner the general powers of the
Trustees. Any action by one or more of the Trustees in their capacity
as such hereunder shall be deemed an action on behalf of the Trust or
the applicable Series and not an action in an individual capacity.))
((The Trustees shall not be limited to investing in obligations
maturing before the possible termination of the Trust or any Series or
Class thereof.))
No one dealing with the Trustees shall be under any obligation to
make any inquiry concerning the authority of the Trustees, or to see
to the application of any payments made or property transferred to the
Trustees or upon their order.
TRUSTEES AND OFFICERS AS SHAREHOLDERS
SECTION 2. Any Trustee, officer or other agent of the Trust may
acquire, own and dispose of Shares to the same extent as if he were
not a Trustee, officer or agent; and the Trustees may issue and sell
or cause to be issued and sold Shares to and buy such Shares from any
such person of any firm or company in which he is interested, subject
only to the general limitations herein contained as to the sale and
purchase of such Shares; and all subject to any restrictions which may
be contained in the Bylaws((, if any)).
ACTION BY THE TRUSTEES
SECTION 3. ((Except as otherwise provided herein or in the 1940
Act,)) [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,
telegram,)) or [telegram] ((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 [P]((p))rospectuses 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[e,]((;)) 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,] ((applicable
requirements of the 1940 Act, as modified by or interpreted by any
applicable order of the Commission or any rules or regulations adopted
or interpretative releases of ))the ((Commission thereunder, 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 such]. ((Such))
contract may also provide for the repurchase or sale of Shares by such
other party as principal or as agent of the Trust.
TRANSFER AGENT
SECTION 3. The Trustees may((,)) in their discretion ((and ))from
time to time((,)) enter into [a] ((one or more ))transfer agency and
Shareholder service [contract(s)] ((contracts)) 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((,)) [(including] ((as
modified by or interpreted by any applicable order or orders of the
Commission or ))any [amendments thereof] ((rules or regulations
adopted)) or ((interpretative releases of the Commission (or ))other
applicable Act of Congress hereafter enacted)((,)) with respect to its
continuance in effect, ((its amendment, ))its termination, and the
method of authorization and approval of such contract or renewal
thereof[, and no amendment to any contract entered into pursuant to
Section 1 shall be effective unless assented to by a Majority
Shareholder Vote].
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
SECTION 1. The Shareholders shall have power to vote [(i)] (((a)
))for the election of Trustees as provided in Article IV, Section 2[,
(ii)] ((; (b) ))for the removal of Trustees as provided in Article IV,
Section 3(d)[, (iii)] ((; (c) ))with respect to any investment
advisory or management contract as provided in Article VII, Sections 1
and 5[, (iv)] ((; (d) ))with respect to ((any termination, merger,
consolidation, reorganization, or sale of assets of the Trust or any
of its Series or Classes as provided in Article XII, Section 4; (e)
with respect to ))the amendment of this Declaration of Trust as
provided in Article XII, Section 7[, (v)] ((; (f) ))to the same extent
as the shareholders of a Massachusetts business corporation, as to
whether or not a court action, proceeding or claim should be brought
or maintained derivatively or as a class action on behalf of the Trust
or the Shareholders, provided, however, that a Shareholder of a
particular Series shall not be entitled to bring any derivative or
class action on behalf of any other Series of the Trust[,]((; ))and
[(vi)] (((g) ))with respect to such additional matters relating to the
Trust as may be required or authorized by law, by this Declaration of
Trust, or the Bylaws of the Trust, if any, or any registration of the
Trust with the [Securities and Exchange] Commission [(the
"Commission")] or any [S]((s))tate, as the Trustees may consider
desirable.
On any matter submitted to a vote of the Shareholders, all
[s]((S))hares shall be voted by individual Series, except ((as
provided in the following sentence and except (a))) [(i)] 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 [S]((s))hare) of such Series((, or Class
thereof)) on any matter on which such Shareholder is entitled to vote,
and each fractional dollar amount shall be entitled to a proportionate
fractional vote. There shall be no cumulative voting in the election
of Trustees. Shares may be voted in person or by proxy. Until Shares
are issued, the Trustees may exercise all rights of Shareholders and
may take any action required or permitted by law, this Declaration of
Trust or any Bylaws of the Trust((, if any,)) to be taken by
Shareholders.
MEETINGS
SECTION 2. The first Shareholders' meeting shall be held as specified
in Section 2 of Article IV at the principal office of the Trust or
such other place as the Trustees may designate. Special meetings of
the Shareholders of any Series may be called by the Trustees and shall
be called by the Trustees upon the written request of Shareholders
owning at least one-tenth (((1/10) ))of the outstanding Shares
entitled to vote. Whenever ten or more Shareholders meeting the
qualifications set forth in Section 16(c) of the 1940 Act, as
((modified by or interpreted by any applicable order or orders of the
Commission or any rules or regulations adopted or interpretative
releases of ))the [same may be amended from time to time,]
((Commission, ))seek the opportunity of furnishing materials to the
other Shareholders with a view to obtaining signatures on such a
request for a meeting, the Trustees shall comply with the provisions
of said Section 16(c) with respect to providing such Shareholders
access to the list of the Shareholders of record of the Trust or the
mailing of such materials to such Shareholders of record. Shareholders
shall be entitled to at least fifteen (((15) ))days' notice of any
meeting.
QUORUM AND REQUIRED VOTE
SECTION 3. A majority of Shares entitled to vote in person or by
proxy shall be a quorum for the transaction of business at a
Shareholders' meeting, except that where any provision of law or of
this Declaration of Trust permits or requires that holders of any
Series ((or Class ))shall vote as a Series[,](( or Class ))then a
majority of the aggregate number of Shares of that Series ((or Class
))entitled to vote shall be necessary to constitute a quorum for the
transaction of business by that Series ((or Class)). Any lesser number
shall be sufficient for adjournments. Any adjourned session or
sessions may be held, within a reasonable time after the date set for
the original meeting, without the necessity of further notice. Except
when a larger vote is required ((by applicable law or ))by any
provision of this Declaration of Trust or the Bylaws, if any, a
majority of the Shares voted in person or by proxy shall decide any
questions and a plurality shall elect a Trustee, provided that where
any provision of law or of this Declaration of Trust permits or
requires that the holders of any Series ((or Class ))shall vote as a
Series[,] ((or Class, ))then a majority of the Shares of that Series
((or Class ))voted on the matter shall decide that matter insofar as
that Series ((or Class ))is concerned.(( Shareholders may act by
unanimous written consent. Actions taken by a Series or Class may be
consented to unanimously in writing by Shareholders of that Series or
Class.))
ARTICLE IX
CUSTODIAN
APPOINTMENT AND DUTIES
SECTION 1. The Trustees shall at all times employ a bank((, a company
that is a member of a national securities exchange, trust company, or
other entity permitted under the 1940 Act, as modified by or
interpreted by any applicable order or orders of the Commission or any
rules or regulations adopted ))or [trust company] ((interpretative
releases of the Commission thereunder, ))having capital, surplus((,))
and undivided profits of at least two million dollars ($2,000,000), or
such other amount [or such other entity] as shall be allowed by the
Commission or by the 1940 Act, as custodian with authority as its
agent, but subject to such restrictions, limitations and other
requirements, if any, as may be contained in the Bylaws of the
Trust((, if any)):
(1) to hold the securities owned by the Trust and deliver the same
upon written order or oral order, if confirmed in writing, or by such
electro-mechanical or electronic devices as are agreed to by the Trust
and the custodian, if such procedures have been authorized in writing
by the Trust;
(2) to receive and receipt for any moneys due to the Trust and
deposit the same in its own banking department or elsewhere as the
Trustees may direct; and
(3) to disburse such funds upon orders or vouchers;
and the Trust may also employ such custodian as its agent:
(1) to keep the books and accounts of the Trust and furnish clerical
and accounting services; and
(2) to compute, if authorized to do so((,)) [by] the [Trustees, the]
Net Asset Value of any Series ((or Class thereof ))in accordance with
the provisions hereof; all upon such basis of compensation as may be
agreed upon between the Trustees and the custodian.
[If so directed by a Majority Shareholder Vote, the custodian shall
deliver and pay over all property of the Trust held by it as specified
in such vote.]
The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and
services of the custodian, and upon such terms and conditions, as may
be agreed upon between the custodian and such sub-custodian and
approved by the Trustees, provided that in every case such
sub-custodian shall be a bank((, a company that is a member of a
national securities exchange, trust company, ))or [trust company
organized] ((other entity permitted ))under the [laws] ((1940 Act, as
modified by or interpreted by any applicable order or orders ))of the
[United States] ((Commission or any rules or regulations adopted ))or
[one] ((interpretative releases ))of the [states thereof and]
((Commission thereunder, ))having capital, 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] 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 dividend of stock
or other property ))pro rata among the Shareholders of a particular
Series((, or Class thereof, ))as of the record date of that Series
((or Class)) fixed as provided in ((Article XII,)) Section 3 [hereof a
"stock dividend"].
REDEMPTIONS
SECTION 2. In case any holder of record of Shares of a particular
Series ((or Class of a Series)) desires to dispose of his Shares, he
may deposit at the office of the transfer agent or other authorized
agent of that Series a written request or such other form of request
as the Trustees may((,)) from time to time((,)) authorize, requesting
that the Series purchase the Shares in accordance with this Section 2;
and the Shareholder so requesting shall be entitled to require the
Series to purchase, and the Series or the principal underwriter of the
Series shall purchase his said Shares, but only at the Net Asset Value
thereof (as described in Section 3 hereof). The Series shall make
payment for any such Shares to be redeemed, as aforesaid, in cash or
property from the assets of that Series((,)) and payment for such
Shares ((less any applicable deferred sales charges and/or fees))
shall be made by the Series or the principal underwriter of the Series
to the Shareholder of record within seven (7) days after the date upon
which the request is effective.
DETERMINATION OF NET ASSET VALUE AND VALUATION OF PORTFOLIO ASSETS
SECTION 3. The term "Net Asset Value" of any Series ((or Class))
shall mean that amount by which the assets of that Series ((or Class))
exceed its liabilities, all as determined by or under the direction of
the Trustees. Such value per Share shall be determined separately for
each Series ((or Class)) of Shares and shall be determined on such
days and at such times as the Trustees may determine. Such
determination shall be made with respect to securities for which
market quotations are readily available, at the market value of such
securities; and with respect to other securities and assets, at the
fair value as determined in good faith by the Trustees, provided,
however, that the Trustees, without Shareholder approval, may alter
the method of appraising portfolio securities insofar as permitted
under the 1940 Act and the rules, regulations((,)) and interpretations
thereof promulgated or issued by the Commission or insofar as
permitted by any [O]((o))rder of the Commission applicable to the
Series. The Trustees may delegate any of [their] ((its)) powers and
duties under this Section 3 with respect to appraisal of assets and
liabilities. At any time((,)) the Trustees may cause the value per
Share last determined to be determined again in ((a)) similar manner
and may fix the time when such redetermined value shall become
effective.
SUSPENSION OF THE RIGHT OF REDEMPTION
SECTION 4. The Trustees may declare a suspension of the right of
redemption or postpone the date of payment as permitted under the 1940
Act. Such suspension shall take effect at such time as the Trustees
shall specify((,)) but not later than the close of business on the
business day next following the declaration of suspension, and
thereafter there shall be no right of redemption or payment until the
Trustees shall declare the suspension at an end. In the case of a
suspension of the right of redemption, a Shareholder may either
withdraw his request for redemption or receive payment based on the
Net Asset Value per Share existing after the termination of the
suspension.(( In the event that any Series is divided into Classes,
the provisions of this Section, to the extent applicable as determined
in the discretion of the Trustees and consistent with applicable law,
may be equally applied to each such Class.))
REDEMPTION OF SHARES
((SECTION 5. The Trustees may require Shareholders to redeem Shares
for any reason under terms set by the Trustees, including, but not
limited to, (i) the determination of the Trustees that direct or
indirect ownership of Shares of any Series has or may become
concentrated in such Shareholder to an extent that would disqualify
any Series as a regulated investment company under the Internal
Revenue Code of 1986, as amended (or any successor statute thereto),
(ii) the failure of a Shareholder to supply a tax identification
number if required to do so, or (iii) the failure of a Shareholder to
pay when due for the purchase of Shares issued to him. The redemption
shall be effected at the redemption price and in the manner provided
in this Article X.))
((The holders of Shares shall upon demand disclose to the Trustees in
writing such information with respect to direct and indirect ownership
of Shares as the Trustees deem necessary to comply with the provisions
of the Internal Revenue Code, or to comply with the requirements of
any other taxing authority.))
ARTICLE XI
LIMITATION OF LIABILITY AND INDEMNIFICATION
LIMITATION OF LIABILITY
SECTION 1. Provided they have exercised reasonable care and have
acted under the reasonable belief that their actions are in the best
interest of the Trust, the Trustees shall not be responsible for or
liable in any event for neglect or wrongdoing of them or any officer,
agent, employee((,)) or investment adviser of the Trust, but nothing
contained herein shall protect any Trustee against any liability to
which he would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence((,)) or reckless disregard of the duties
involved in the conduct of his office.
INDEMNIFICATION OF COVERED PERSONS
SECTION 2.
(a) Subject to the exceptions and limitations contained in Section
(b) below:
(i) every person who is, or has been, a Trustee or officer of the
Trust (hereinafter referred to as "Covered Person") shall be
indemnified by the appropriate Series to the fullest extent permitted
by law against liability and against all expenses reasonably incurred
or paid by him in connection with any claim, action, suit((,)) or
proceeding in which he becomes involved as a party or otherwise by
virtue of his being or having been a Trustee or officer and against
amounts paid or incurred by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall
apply to all claims, actions, suits or proceedings (civil, criminal or
other, including appeals), actual or threatened while in office or
thereafter, and the words "liability" and "expenses" shall include,
without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered
Person:
(i) who shall have been adjudicated by a court or body before which
the proceeding was brought (A) to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his office; or (B) not to have acted in good faith in the
reasonable belief that his action was in the best interest of the
Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence((,)) or reckless disregard of
the duties involved in the conduct of his office,
(A) by the court or other body approving the settlement;
(B) by at least a majority of those Trustees who are neither
[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.
INDEMNIFICATION OF SHAREHOLDERS
SECTION 3. In case any Shareholder or former Shareholder of any
Series of the Trust shall be held to be personally liable solely by
reason of his being or having been a Shareholder and not because of
his acts or omissions or for some other reason, the Shareholder or
former Shareholder (or his heirs, executors, administrators((,)) or
other legal representatives or((,)) in the case of a corporation or
other entity, its corporate or other general successor) shall be
entitled out of the assets belonging to the applicable Series to be
held harmless from and indemnified against all loss and expense
arising from such liability. The Series shall, upon request by the
Shareholder, assume the defense of any claim made against the
Shareholder for any act or obligation of the Series and satisfy any
judgment thereon.
ARTICLE XII
MISCELLANEOUS
TRUST NOT A PARTNERSHIP, ETC.
SECTION 1. It is hereby expressly declared that a trust ((is created
hereby)) and not ((a partnership, joint stock association,
corporation, bailment, or any form of)) a [partnership is created
hereby] ((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] TRUSTEES' GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR
SURETY
SECTION 2. The exercise by the Trustees of their powers and
discretions hereunder in good faith and with reasonable care under the
circumstances then prevailing, shall be binding upon everyone
interested. Subject to the provisions of Section 1 of this Article XII
and to Article XI, the Trustees shall not be liable for errors of
judgment or mistakes of fact or law. The Trustees may take advice of
counsel or other experts with respect to the meaning and operation of
this Declaration of Trust, and subject to the provisions of Section 1
of this Article XII and to Article XI, shall be under no liability for
any act or omission in accordance with such advice or for failing to
follow such advice. The Trustees shall not be required to give any
bond as such, nor any surety if a bond is obtained.
ESTABLISHMENT OF RECORD DATES
SECTION 3. The Trustees may close the stock transfer books of the
Trust for a period not exceeding sixty (60) days preceding the date of
any meeting of Shareholders, or the date for the payment of any
dividends,or the date for the allotment of rights, or the date when
any change or conversion or exchange of Shares shall go into effect;
or in lieu of closing the stock transfer books as aforesaid, the
Trustees may fix in advance a date[,] not exceeding sixty (60) days
preceding the date of any meeting of Shareholders, or the date for
payment of any dividend((s)), or the date for the allotment of rights,
or the date when any change or conversion or exchange of Shares shall
go into effect, as a record date for the determination of the
Shareholders entitled to notice of, and to vote at, any such meeting,
or entitled to receive payment of any such dividend, or to any such
allotment of rights, or to exercise the rights in respect of any such
change, conversion or exchange of Shares, and in such case such
Shareholders and only such Shareholders as shall be Shareholders of
record on the date so fixed shall be entitled to such notice of, and
to vote at, such meeting, or to receive payment of such dividend, or
to receive such allotment or rights, or to exercise such rights, as
the case may be, notwithstanding any transfer of any Shares on the
books of the Trust after any such record date fixed or aforesaid.
DURATION; TERMINATION OF TRUST, A SERIES OR A CLASS; MERGERS, ETC.
[Section 4.]
[(a) This] ((SECTION 4.1. DURATION. The ))Trust shall continue
without limitation of time((,)) but subject to the provisions [of
sub-section (b)] of 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] (((iii) after paying or adequately
providing)) for the payment of all((liabilities, and upon receipt of))
such [liabilities in either (i) or (ii), by such assumption or
otherwise,] ((releases, indemnities, and refunding agreements as they
deem necessary for their protection,)) the Trustees [shall] ((may))
distribute the remaining [proceeds] ((Trust property)) or [assets (as]
((the remaining property of)) the [case may be) ratably] ((terminated
Series or Class, in cash or in kind or partly each,)) among [the
holders of] the [Shares] ((Shareholders)) of the Trust or [any
affected] ((the)) Series [then outstanding.]((or Class according to
their respective rights; and))
[(c) Upon completion] (((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 [remaining proceeds or] ((Trust and file with)) the
[remaining assets as provided] ((Secretary of The Commonwealth of
Massachusetts, if required, an instrument)) in [sub-section (b),]
((writing setting forth)) the [Trust or any affected Series shall
terminate] ((fact of such termination,)) and the Trustees shall
((thereupon)) be discharged [of any and] ((from)) all further
liabilities and duties [hereunder] ((with respect to the Trust or the
terminated Series or Class,)) and the [right, title] ((rights)) and
interest((s)) of all [parties] ((Shareholders of the Trust or the
terminated Series or Class)) shall [be cancelled and
discharged]((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 or Class thereof may merge
or consolidate with any other corporation, association, trust, or
other organization or may sell, lease, or exchange all or a portion of
the Trust property or Trust property allocated or belonging to such
Series or Class, 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 or Class, as the case
may be. Such transactions may be effected through share-for-share
exchanges, transfers or sale of assets, shareholder in-kind
redemptions and purchases, exchange offers, or any other method
approved by the Trustees.))
((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 or a portion of the Trust property
or all or a portion of the Trust property allocated or belonging to
such Series or Class 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 or Class 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 or any
Series or Class thereof 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 or Class thereof sells, conveys, or transfers
all or a portion of its assets to another entity or merges or
consolidates with another entity. Such transactions may be effected
through share-for-share exchanges, transfers or sale of assets,
shareholder in-kind redemptions and purchases, exchange offers, or any
other method approved by the Trustees.))
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] ((Except as specifically
provided herein,)) the Trustees [and] ((may, without shareholder vote,
amend or otherwise supplement this Declaration of Trust by making an
amendment,)) a [Majority Shareholder Vote,] ((Declaration of Trust
supplemental hereto)) or [by] ((an amended and restated Declaration of
Trust. Shareholders shall have the right to vote (a) on)) any [larger]
((amendment that would affect their right to)) vote [which] ((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 [applicable] law or [this Declaration of Trust in]
((by the Trust's registration statement filed with the Commission; and
(e) on)) any [particular case,] ((amendment submitted to them by the
Trustees. Any amendment required or permitted to be submitted to
Shareholders that, as)) the Trustees [shall amend or otherwise
supplement this instrument, by making a declaration of trust
supplemental hereto, which thereafter] ((determine,)) 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] ((or Classes)) shall be authorized by vote of the
Shareholders [holding a majority of the Shares entitled to vote] of
each Series ((or Class)) affected and no vote of [S]((s))hareholders
of a Series ((or Class)) not affected shall be required. [Amendments
having the purpose of changing the name of the Trust or of supplying]
((Notwithstanding anything else herein,)) any [omission, curing any
ambiguity or curing, correcting or supplementing any defective or
inconsistent provision contained herein] ((amendment to Article XI))
shall not [require authorization by Shareholder vote. Copies of]
((limit)) the [supplemental declaration] ((rights to indemnification
or insurance provided therein with respect to action or omission)) of
[trust shall be filed as specified in Section 5 of this Article
XII]((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 as of the date set forth
above.))
[SIGNATURE LINES OMITTED]
EXHIBIT 2
((UNDERLINED)) DISCLOSURE WILL BE ADDED
[BRACKETED] DISCLOSURE WILL BE DELETED
FORM OF
MANAGEMENT CONTRACT
BETWEEN
FIDELITY SUMMER STREET TRUST:
FIDELITY CAPITAL & INCOME FUND
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
((AMENDMENT)) [MODIFICATION] made this [1st day of April, 1994]
((_______, 2000)), by and between Fidelity Summer Street Trust, a
Massachusetts business trust which may issue one or more series of
shares of beneficial interest (hereinafter called the "Fund"), on
behalf of Fidelity Capital & Income Fund (hereinafter called the
"Portfolio")((,)) and Fidelity Management & Research Company, a
Massachusetts corporation (hereinafter called the "Adviser") ((as set
forth in its entirety below)).
Required authorization and approval by shareholders and Trustees
having been obtained, the Fund, on behalf of the Portfolio, and the
Adviser hereby consent, pursuant to Paragraph 6 of the existing
Management Contract [modified September 1, 1992 and further modified
April 1, 1993] ((dated April 1, 1994,)) to a modification of said
Contract in the manner set forth below. The [Modified] ((Amended))
Management Contract shall, when executed by duly authorized officers
of the Fund and the Adviser, take effect on [the later of April 1,
1994 or the first day of the month following approval.] ((____,
2000)).
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the
supervision of the Fund's Board of Trustees, direct the investments of
the Portfolio in accordance with the investment objective, policies
and limitations as provided in the Portfolio's Prospectus or other
governing instruments, as amended from time to time, the Investment
Company Act of 1940 and rules thereunder, as amended from time to time
(the "1940 Act"), and such other limitations as the Portfolio may
impose by notice in writing to the Adviser. The Adviser shall also
furnish for the use of the Portfolio office space and all necessary
office facilities, equipment and personnel for servicing the
investments of the Portfolio; and shall pay the salaries and fees of
all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all
personnel of the Fund or the Adviser performing services relating to
research, statistical and investment activities. The Adviser is
authorized, in its discretion and without prior consultation with the
Portfolio, to buy, sell, lend and otherwise trade in any stocks, bonds
and other securities and investment instruments on behalf of the
Portfolio. The investment policies and all other actions of the
Portfolio are and shall at all times be subject to the control and
direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for
the performance by its affiliates of) the management and
administrative services necessary for the operation of the Fund. The
Adviser shall, subject to the supervision of the Board of Trustees,
perform various services for the Portfolio, including but not limited
to: (i) providing the Portfolio with office space, equipment and
facilities (which may be its own) for maintaining its organization;
(ii) on behalf of the Portfolio, supervising relations with, and
monitoring the performance of, custodians, depositories, transfer and
pricing agents, accountants, attorneys, underwriters, brokers and
dealers, insurers and other persons in any capacity deemed to be
necessary or desirable; (iii) preparing all general shareholder
communications, including shareholder reports; (iv) conducting
shareholder relations; (v) maintaining the Fund's existence and its
records; (vi) during such times as shares are publicly offered,
maintaining the registration and qualification of the Portfolio's
shares under federal and state law; and (vii) investigating the
development of and developing and implementing, if appropriate,
management and shareholder services designed to enhance the value or
convenience of the Portfolio as an investment vehicle.
The Adviser[, at its own expense,] shall also furnish such reports,
evaluations, information or analyses to the Fund as the Fund's Board
of Trustees may request from time to time or as the Adviser may deem
to be desirable. The Adviser shall make recommendations to the Fund's
Board of Trustees with respect to Fund policies, and shall carry out
such policies as are adopted by the Trustees. The Adviser shall,
subject to review by the Board of Trustees, furnish such other
services as the Adviser shall from time to time determine to be
necessary or useful to perform its obligations under this Contract.
(c) The Adviser[, 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 Adviser, which may
include brokers or dealers affiliated with the Adviser. The Adviser
shall use its best efforts to seek to execute portfolio transactions
at prices which are advantageous to the Portfolio and at commission
rates which are reasonable in relation to the benefits received. In
selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) to the Portfolio and/or
the other accounts over which the Adviser or its affiliates exercise
investment discretion. The Adviser is authorized to pay a broker or
dealer who provides such brokerage and research services a commission
for executing a portfolio transaction for the Portfolio which is in
excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Adviser determines in
good faith that such amount of commission is reasonable in relation to
the value of the brokerage and research services provided by such
broker or dealer. This determination may be viewed in terms of either
that particular transaction or the overall responsibilities which the
Adviser and its affiliates have with respect to accounts over which
they exercise investment discretion. The Trustees of the Fund shall
periodically review the commissions paid by the Portfolio to determine
if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor.
The Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of
the Fund are or may be or become interested in the Adviser as
directors, officers or otherwise and that directors, officers and
stockholders of the Adviser are or may be or become similarly
interested in the Fund, and that the Adviser may be or become
interested in the Fund as a shareholder or otherwise.
3. The Adviser will be compensated on the following basis for the
services and facilities to be furnished hereunder. The Adviser shall
receive a monthly management fee, payable monthly as soon as
practicable after the last day of each month, composed of a Group Fee
and an Individual Fund Fee.
(a) Group Fee Rate. The Group Fee Rate shall be based upon the
monthly average of the net assets of the registered investment
companies having Advisory and Service or Management Contracts with the
Adviser (computed in the manner set forth in the fund's Declaration of
Trust or other organizational document[,](())) determined as of the
close of business on each business day throughout the month. The Group
Fee Rate shall be determined on a cumulative basis pursuant to the
following schedule[.]((:))
GROUP FEE RATE SCHEDULE
Average ((Group)) [Net] Assets Annualized [Fee] Rate [(for
each level)]
0 - $3 billion .3700%
3 - 6 .3400
6 - 9 .3100
9 - 12 .2800
12 - 15 .2500
15 - 18 .2200
18 - 21 .2000
21 - 24 .1900
24 - 30 .1800
30 - 36 .1750
36 - 42 .1700
42 - 48 .1650
48 - 66 .1600
66 - 84 .1550
84 - 120 .1500
[120 - 174] [.1450]
[174 - 228] [.1400]
[228 - 282] [.1375]
[282 - 336] [.1350]
[Over 336] [.1325]
((120 - 156)) ((.1450))
((156 - 192)) ((.1400))
((192 - 228)) ((.1350))
((228 - 264)) ((.1300))
((264 - 300)) ((.1275))
((300 - 336)) ((.1250))
((336 - 372)) ((.1225))
((372 - 408)) ((.1200))
((408 - 444)) ((.1175))
((444 - 480)) ((.1150))
((480 - 516)) ((.1125))
((516 - 587)) ((.1100))
((587 - 646)) ((.1080))
((646 - 711)) ((.1060))
((711 - 782)) ((.1040))
((782 - 860)) ((.1020))
((860 - 946)) ((.1000))
((946 - 1,041)) ((.0980))
((1,041 - 1,145)) ((.0960))
((1,145 - 1,260)) ((.0940))
((over - 1,260)) ((.0920))
(b) Individual Fund Fee Rate. The Individual Fund Fee Rate shall be
[.55%] ((0.45%)).
The sum of the Group Fee Rate, calculated as described above to the
nearest millionth, and the Individual Fund Fee Rate shall constitute
the Annual Management Fee Rate. One-twelfth of the Annual Management
Fee Rate shall be applied to the average of the net assets of the
Portfolio (computed in the manner set forth in the Fund's Declaration
of Trust or other organizational document(())) determined as of the
close of business on each business day throughout the month.
(c) In case of termination of this Contract during any month, the
fee for that month shall be reduced proportionately on the basis of
the number of business days during which it is in effect, and the fee
computed upon the average net assets for the business days it is so in
effect for that month.
4. It is understood that the Portfolio will pay all its expenses
[other than those expressly stated to be payable by the Adviser
hereunder], which expenses payable by the Portfolio shall include,
without limitation, (i) interest and taxes; (ii) brokerage commissions
and other costs in connection with the purchase or sale of securities
and other investment instruments; (iii) fees and expenses of the
Fund's Trustees other than those who are "interested persons" of the
Fund or the Adviser; (iv) legal and audit expenses; (v) custodian,
registrar and transfer agent fees and expenses; (vi) fees and expenses
related to the registration and qualification of the Fund and the
Portfolio's shares for distribution under state and federal securities
laws; (vii) expenses of printing and mailing reports and notices and
proxy material to shareholders of the Portfolio; (viii) all other
expenses incidental to holding meetings of the Portfolio's
shareholders, including proxy solicitations therefor; (ix) a pro rata
share, based on relative net assets of the Portfolio and other
registered investment companies having Advisory and Service or
Management Contracts with the Adviser, of 50% of insurance premiums
for fidelity and other coverage; (x) its proportionate share of
association membership dues; (xi) expenses of typesetting for printing
Prospectuses and Statements of Additional Information and supplements
thereto; (xii) expenses of printing and mailing Prospectuses and
Statements of Additional Information and supplements thereto sent to
existing shareholders; and (xiii) such non-recurring or extraordinary
expenses as may arise, including those relating to actions, suits or
proceedings to which the Portfolio is a party and the legal obligation
which the Portfolio may have to indemnify the Fund's Trustees and
officers with respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and
engage in other activities, provided, however, that such other
services and activities do not, during the term of this Contract,
interfere, in a material manner, with the Adviser's ability to meet
all of its obligations with respect to rendering services to the
Portfolio hereunder. In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Adviser, the Adviser shall not be subject
to liability to the Portfolio or to any shareholder of the Portfolio
for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses that may be sustained in the
purchase, holding or sale of any security(( or other investment
instrument)).
6. (a) Subject to prior termination as provided in sub-paragraph (d)
of this paragraph 6, this Contract shall continue in force until June
30, [1994] ((2000)) and indefinitely thereafter, but only so long as
the continuance after such date shall be specifically approved at
least annually by vote of the Trustees of the Fund or by vote of a
majority of the outstanding voting securities of the Portfolio.
(b) This Contract may be modified by mutual consent(( subject to the
provisions of Section 15 of the 1940 Act, as modified by or
interpreted by any applicable order or orders of the Securities and
Exchange Commission (the "Commission" or any rules or regulations
adopted by, or interpretative releases of, the Commission)) [, such
consent on the part of the Fund to be authorized by vote of a majority
of the outstanding voting securities of the Portfolio].
(c) In addition to the requirements of sub-paragraphs (a) and (b) of
this paragraph 6, the terms of any continuance or modification of this
Contract must have been approved by the vote of a majority of those
Trustees of the Fund who are not parties to the Contract or interested
persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment
of any penalty, by action of its Trustees or Board of Directors, as
the case may be, or with respect to the Portfolio by vote of a
majority of the outstanding voting securities of the Portfolio. This
Contract shall terminate automatically in the event of its assignment.
7. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Declaration of Trust
or other organizational document and agrees that the obligations
assumed by the Fund pursuant to this Contract shall be limited in all
cases to the Portfolio and its assets, and the Adviser shall not seek
satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio or any other Portfolios of the Fund. In
addition, the Adviser shall not seek satisfaction of any such
obligations from the Trustees or any individual Trustee. The Adviser
understands that the rights and obligations of any Portfolio under the
Declaration of Trust or other organizational document are separate and
distinct from those of any and all other Portfolios.
8. This Agreement shall be governed by, and ((construed)) in
accordance with, the laws of the Commonwealth of Massachusetts,
without giving effect to the choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have
the respective meanings specified in the 1940 Act, as now in effect or
as hereafter amended, and subject to such orders as may be granted by
the [Securities and Exchange] Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as
of the date written above.
[SIGNATURE LINES OMITTED]
EXHIBIT 3
((UNDERLINED)) DISCLOSURE WILL BE ADDED
[BRACKETED] DISCLOSURE WILL BE DELETED
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH ([FAR EAST] ((FAR EAST))) INC.
AND
FIDELITY SUMMER STREET TRUST ON BEHALF OF
FIDELITY CAPITAL & INCOME FUND
[AGREEMENT] ((AMENDMENT)) made this [1st day of April 1994]
((_____2000,)) by and between Fidelity Management & Research Company,
a Massachusetts corporation with principal offices at 82 Devonshire
Street, Boston, Massachusetts (hereinafter called the "Advisor");
Fidelity Management & Research (Far East)[,] Inc. (hereinafter called
the (("))Sub-Advisor(("))); and Fidelity Summer 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 Capital & Income Fund (hereinafter called the
"Portfolio").
((Required authorization and approval by shareholders and Trustees
having been obtained, the Fund, on behalf of the Portfolio, the
Advisor and the Sub-Advisor hereby consent, pursuant to Paragraph 6 of
the existing Sub-Advisory Agreement dated April 1, 1994, to a
modification of said Agreement in the manner set below. The Amended
Sub-Advisory Agreement shall, when executed by duly authorized
officers of the Fund, the Advisor and the Sub-Advisor, take effect on
_______, 2000.))
WHEREAS the Trust and the Advisor have entered into a Management
Contract on behalf of the Portfolio, pursuant to which the Advisor is
to act as investment manager of the Portfolio[,]((;)) and
WHEREAS the Sub-Advisor and its subsidiaries and other affiliated
persons have personnel in various locations throughout the world and
have been formed in part for the purpose of researching and compiling
information and recommendations with respect to the economies of
various countries, and securities of issuers located in such
countries, and providing investment advisory services in connection
therewith;
NOW, THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the Trust, the Advisor and the
Sub-Advisor agree as follows:
1. Duties: The Advisor may, in its discretion, appoint the
Sub-Advisor to perform one or more of the following services with
respect to all or a portion of the investments of the Portfolio. The
services and the portion of the investments of the Portfolio to be
advised or managed by the Sub-Advisor shall be as agreed upon from
time to time by the Advisor and the Sub-Advisor. The Sub-Advisor shall
pay the salaries and fees of all personnel of the Sub-Advisor
performing services for the Portfolio relating to research,
statistical and investment activities.
(a) INVESTMENT ADVICE: If and to the extent requested by the
Advisor, the Sub-Advisor shall provide investment advice to the
Portfolio and the Advisor with respect to all or a portion of the
investments of the Portfolio, and in connection with such advice shall
furnish the Portfolio and the Advisor such factual information,
research reports and investment recommendations as the [Adviser]
((Advisor)) may reasonably require. Such information may include
written and oral reports and analyses.
(b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Advisor, the Sub-Advisor shall, subject to the supervision of the
Advisor, manage all or a portion of the investments of the Portfolio
in accordance with the investment objective, policies and limitations
provided in the Portfolio's Prospectus or other governing instruments,
as amended from time to time, the Investment Company Act of 1940 (the
"1940 Act") and rules thereunder, as amended from time to time, and
such other limitations as the Trust or Advisor may impose with respect
to the Portfolio by notice to the Sub-Advisor. With respect to the
portion of the investments of the Portfolio under its management, the
Sub-Advisor is authorized to make investment decisions on behalf of
the Portfolio with regard to any stock, bond, other security or
investment instrument, and to place orders for the purchase and sale
of such securities through such broker-dealers as the Sub-Advisor may
select. The Sub-Advisor may also be authorized, but only to the extent
such duties are delegated in writing by the Advisor, to provide
additional investment management services to the Portfolio, including
but not limited to services such as managing foreign currency
investments, purchasing and selling or writing futures and options
contracts, borrowing money, or lending securities on behalf of the
Portfolio. All investment management and any other activities of the
Sub-Advisor shall at all times be subject to the control and direction
of the Advisor and the Trust's Board of Trustees.
(c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform any or
all of the services contemplated by this Agreement directly or through
such of its subsidiaries or other affiliated persons as the
Sub-Advisor shall determine; provided, however, that performance of
such services through such subsidiaries or other affiliated persons
shall have been approved by the Trust to the extent required pursuant
to the 1940 Act and rules thereunder.["]
2. Information to be Provided to the Trust and the Advisor: The
Sub-Advisor shall furnish such reports, evaluations, information or
analyses to the Trust and the Advisor as the Trust's Board of Trustees
or the Advisor may reasonably request from time to time, or as the
Sub-Advisor may deem to be desirable.
3. Brokerage: In connection with the services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Sub-Advisor
shall place all orders for the purchase and sale of portfolio
securities for the Portfolio's account with brokers or dealers
selected by the Sub-Advisor, which may include brokers or dealers
affiliated with the Advisor or Sub-Advisor. The Sub-Advisor shall use
its best efforts to seek to execute portfolio transactions at prices
which are advantageous to the Portfolio and at commission rates which
are reasonable in relation to the benefits received. In selecting
brokers or dealers qualified to execute a particular transaction,
brokers or dealers may be selected who also provide brokerage and
research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of l934) to the Portfolio and/or to the other
accounts over which the Sub-Advisor or Advisor exercise investment
discretion. The Sub-Advisor is authorized to pay a broker or dealer
who provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess
of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Sub-Advisor determines
in good faith that such amount of commission is reasonable in relation
to the value of the brokerage and research services provided by such
broker or dealer. This determination may be viewed in terms of either
that particular transaction or the overall responsibilities which the
Sub-Advisor has with respect to accounts over which it exercises
investment discretion. The Trustees of the Trust shall periodically
review the commissions paid by the Portfolio to determine if the
commissions paid over representative periods of time were reasonable
in relation to the benefits to the Portfolio.
4. Compensation: The Advisor shall compensate the Sub-Advisor on the
following basis for the services to be furnished hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under
subparagraph (a) of paragraph 1 of this Agreement, the Advisor agrees
to pay the Sub-Advisor a monthly Sub-Advisory Fee. The Sub-Advisory
Fee shall be equal to 105% of the Sub-Advisor's costs incurred in
connection with rendering the services referred to in subparagraph (a)
of paragraph 1 of this Agreement. The Sub-Advisory Fee shall not be
reduced to reflect expense reimbursements or fee waivers by the
Advisor, if any, in effect from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Advisor agrees
to pay the Sub-Advisor a monthly Investment Management Fee. The
Investment Management Fee shall be equal to: (i) 50% of the monthly
management fee rate (including performance adjustments, if any) that
the Portfolio is obligated to pay the Advisor under its Management
Contract with the Advisor, multiplied by: (ii) the fraction equal to
the net assets of the Portfolio as to which the Sub-Advisor shall have
provided investment management services divided by the net assets of
the Portfolio for that month. If in any fiscal year the aggregate
expenses of the Portfolio exceed any applicable expense limitation
imposed by any state or federal securities laws or regulations, and
the Advisor waives all or a portion of its management fee or
reimburses the Portfolio for expenses to the extent required to
satisfy such limitation, the Investment Management Fee paid to the
Sub-Advisor will be reduced by 50% of the amount of such waivers or
reimbursements multiplied by the fraction determined in (ii). If the
Sub-Advisor reduces its fees to reflect such waivers or reimbursements
and the Advisor subsequently recovers all or any portion of such
waivers and reimbursements, then the Sub-Advisor shall be entitled to
receive from the Advisor a proportionate share of the amount
recovered. To the extent that waivers and reimbursements by the
Advisor required by such limitations are in excess of the Advisor's
management fee, the Investment Management Fee paid to the Sub-Advisor
will be reduced to zero for that month, but in no event shall the
Sub-Advisor be required to reimburse the Advisor for all or a portion
of such excess reimbursements.
(c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph 1
for the same portion of the investments of the Portfolio for the same
period, the fees paid to the Sub-Advisor with respect to such
investments shall be calculated exclusively under subparagraph (b) of
this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the
Sub-Advisor hereunder or by the Advisor under the Management Contract
with the Portfolio, which expenses payable by the Portfolio shall
include, without limitation, (i) interest and taxes; (ii) brokerage
commissions and other costs in connection with the purchase or sale of
securities and other investment instruments; (iii) fees and expenses
of the Trust's Trustees other than those who are "interested persons"
of the Trust, the Sub-Advisor or the Advisor; (iv) legal and audit
expenses; (v) custodian, registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Trust and the Portfolio's shares for distribution
under state and federal securities laws; (vii) expenses of printing
and mailing reports and notices and proxy material to shareholders of
the Portfolio; (viii) all other expenses incidental to holding
meetings of the Portfolio's shareholders, including proxy
solicitations therefore; (ix) a pro rata share, based on relative net
assets of the Portfolio and other registered investment companies
having Advisory and Service or Management Contracts with the Advisor,
of 50% of insurance premiums for fidelity and other coverage; (x) its
proportionate share of association membership dues; (xi) expenses of
typesetting for printing Prospectuses and Statements of Additional
Information and supplements thereto; (xii) expenses of printing and
mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Portfolio is a
party and the legal obligation which the Portfolio may have to
indemnify the Trust's Trustees and officers with respect thereto.
6. Interested Persons: It is understood that Trustees, officers, and
shareholders of the Trust are or may be or become interested in the
Advisor or the Sub-Advisor as directors, officers or otherwise and
that directors, officers and stockholders of the Advisor or the
Sub-Advisor are or may be or become similarly interested in the Trust,
and that the Advisor or the Sub-Advisor may be or become interested in
the Trust as a shareholder or otherwise.
7. Services to Other Companies or Accounts: The services of the
Sub-Advisor to the Advisor are not to be deemed to be exclusive, the
Sub-Advisor being free to render services to others and engage in
other activities, provided, however, that such other services and
activities do not, during the term of this Agreement, interfere, in a
material manner, with the Sub-Advisor's ability to meet all of its
obligations hereunder. The Sub-Advisor shall for all purposes be an
independent contractor and not an agent or employee of the Advisor or
the Trust.
8. Standard of Care: In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Sub-Advisor, the Sub-Advisor shall not be
subject to liability to the Advisor, the Trust or to any shareholder
of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that
may be sustained in the purchase, holding or sale of any security.
9. Duration and Termination of Agreement; Amendments:
(a) Subject to prior termination as provided in subparagraph (d) of
this paragraph 9((,)) [of] this Agreement shall continue in force
until June 30, [1994] ((2000)) and indefinitely thereafter, but only
so long as the continuance after such period shall be specifically
approved at least annually by vote of the Trust's Board of Trustees or
by vote of a majority of the outstanding voting securities of the
Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor,
the Sub-Advisor and the Portfolio(( subject to the provisions of
Section 15 of the 1940 Act, as modified by or interpreted by any
applicable order or orders of the Securities and Exchange Commission
(the "Commission") or any rules or regulations adopted by, or
interpretative releases of, the Commission)) [, such consent on the
part of the Portfolio to be authorized by vote of a majority of the
outstanding voting securities of the Portfolio].
(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)) DISCLOSURE WILL BE ADDED
[BRACKETED] DISCLOSURE WILL BE DELETED
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
AND
FIDELITY SUMMER STREET TRUST ON BEHALF OF
FIDELITY CAPITAL & INCOME FUND
[AGREEMENT] ((AMENDMENT)) made this [1st day of April 1994]
((______2000)), by and between Fidelity Management & Research Company,
a Massachusetts corporation with principal offices at 82 Devonshire
Street, Boston, Massachusetts (hereinafter called the "Advisor");
Fidelity Management & Research (U.K.) Inc. (hereinafter called the
"Sub-Advisor"); and Fidelity Summer 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 Capital & Income Fund (hereinafter called the "Portfolio").
((Required authorization and approval by shareholders and Trustees
having been obtained, the Fund, on behalf of the Portfolio, the
Advisor and the Sub-Advisor hereby consent, pursuant to Paragraph 6 of
the existing Sub-Advisory Agreement dated April 1, 1994, to a
modification of said Agreement in the manner set below. The Amended
Sub-Advisory Agreement shall, when executed by duly authorized
officers of the Fund, the Advisor and the Sub-Advisor, take effect on
______, 2000.))
WHEREAS the Trust and the Advisor have entered into a Management
Contract on behalf of the Portfolio, pursuant to which the Advisor is
to act as investment manager of the Portfolio; and
WHEREAS the Sub-Advisor and its subsidiaries and other affiliated
persons have personnel in various locations throughout the world and
have been formed in part for the purpose of researching and compiling
information and recommendations with respect to the economies of
various countries, and securities of issuers located in such
countries, and providing investment advisory services in connection
therewith;
NOW, THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the Trust, the Advisor and the
Sub-Advisor agree as follows:
1. Duties: The Advisor may, in its discretion, appoint the
Sub-Advisor to perform one or more of the following services with
respect to all or a portion of the investments of the Portfolio. The
services and the portion of the investments of the Portfolio to be
advised or managed by the Sub-Advisor shall be as agreed upon from
time to time by the Advisor and the Sub-Advisor. The Sub-Advisor shall
pay the salaries and fees of all personnel of the Sub-Advisor
performing services for the Portfolio relating to research,
statistical and investment activities.
(a) INVESTMENT ADVICE: If and to the extent requested by the
Advisor, the Sub-Advisor shall provide investment advice to the
Portfolio and the Advisor with respect to all or a portion of the
investments of the Portfolio, and in connection with such advice shall
furnish the Portfolio and ((the)) Advisor such factual information,
research reports and investment recommendations as the Advisor may
reasonably require. Such information may include written and oral
reports and analyses.
(b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Advisor, the Sub-Advisor shall, subject to the supervision of the
Advisor, manage all or a portion of the investments of the Portfolio
in accordance with the investment objective, policies and limitations
provided in the Portfolio's Prospectus or other governing instruments,
as amended from time to time, the Investment Company Act of 1940 (the
"1940 Act") and rules thereunder, as amended from time to time, and
such other limitations as the Trust or Advisor may impose with respect
to the Portfolio by notice to the Sub-Advisor. With respect to the
portion of the investments of the Portfolio under its management, the
Sub-Advisor is authorized to make investment decisions on behalf of
the Portfolio with regard to any stock, bond, other security or
investment instrument, and to place orders for the purchase and sale
of such securities through such broker-dealers as the Sub-Advisor may
select. The Sub-Advisor may also be authorized, but only to the extent
such duties are delegated in writing by the Advisor, to provide
additional investment management services to the Portfolio, including
but not limited to services such as managing foreign currency
investments, purchasing and selling or writing futures and options
contracts, borrowing money or lending securities on behalf of the
Portfolio. All investment management and any other activities of the
Sub-Advisor shall at all times be subject to the control and direction
of the Advisor and the Trust's Board of Trustees.
(c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform any or
all of the services contemplated by this Agreement directly or through
such of its subsidiaries or other affiliated persons as the
Sub-Advisor shall determine; provided, however, that performance of
such services through such subsidiaries or other affiliated persons
shall have been approved by the Trust to the extent required pursuant
to the 1940 Act and rules thereunder.
2. Information to be Provided to the Trust and the Advisor: The
Sub-Advisor shall furnish such reports, evaluations, information or
analyses to the Trust and the Advisor as the Trust's Board of Trustees
or the Advisor may reasonably request from time to time, or as the
Sub-Advisor may deem to be desirable.
3. Brokerage: In connection with the services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Sub-Advisor[,]
shall place all orders for the purchase and sale of portfolio
securities for the Portfolio's account with brokers or dealers
selected by the Sub-Advisor, which may include brokers or dealers
affiliated with the Advisor or Sub-Advisor. The Sub-Advisor shall use
its best efforts to seek to execute portfolio transactions at prices
which are advantageous to the Portfolio and at commission rates which
are reasonable in relation to the benefits received. In selecting
brokers or dealers qualified to execute a particular transaction,
brokers or dealers may be selected who also provide brokerage and
research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of l934) to the Portfolio and/or to the other
accounts over which the Sub-Advisor or Advisor exercise investment
discretion. The Sub-Advisor is authorized to pay a broker or dealer
who provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess
of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Sub-Advisor determines
in good faith that such amount of commission is reasonable in relation
to the value of the brokerage and research services provided by such
broker or dealer. This determination may be viewed in terms of either
that particular transaction or the overall responsibilities which the
Sub-Advisor has with respect to accounts over which it exercises
investment discretion. The Trustees of the Trust shall periodically
review the commissions paid by the Portfolio to determine if the
commissions paid over representative periods of time were reasonable
in relation to the benefits to the Portfolio.
4. Compensation: The Advisor shall compensate the Sub-Advisor on the
following basis for the services to be furnished hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under
subparagraph (a) of paragraph 1 of this Agreement, the Advisor agrees
to pay the Sub-Advisor a monthly Sub-Advisory Fee. The Sub-Advisory
Fee shall be equal to 110% of the Sub-Advisor's costs incurred in
connection with rendering the services referred to in subparagraph (a)
of paragraph 1 of this Agreement. The Sub-Advisory Fee shall not be
reduced to reflect expense reimbursements or fee waivers by the
Advisor, if any, in effect from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Advisor agrees
to pay the Sub-Advisor a monthly Investment Management Fee. The
Investment Management Fee shall be equal to: (i) 50% of the monthly
management fee rate (including performance adjustments, if any) that
the Portfolio is obligated to pay the Advisor under its Management
Contract with the Advisor, multiplied by: (ii) the fraction equal to
the net assets of the Portfolio as to which the Sub-Advisor shall have
provided investment management services divided by the net assets of
the Portfolio for that month. If in any fiscal year the aggregate
expenses of the Portfolio exceed any applicable expense limitation
imposed by any state or federal securities laws or regulations, and
the Advisor waives all or a portion of its management fee or
reimburses the Portfolio for expenses to the extent required to
satisfy such limitation, the Investment Management Fee paid to the
Sub-Advisor will be reduced by 50% of the amount of such waivers or
reimbursements multiplied by the fraction determined in (ii). If the
Sub-Advisor reduces its fees to reflect such waivers or reimbursements
and the Advisor subsequently recovers all or any portion of such
waivers or reimbursements, then the Sub-Advisor shall be entitled to
receive from the Advisor a proportionate share of the amount
recovered. To the extent that waivers and reimbursements by the
Advisor required by such limitations are in excess of the Advisor's
management fee, the Investment Management Fee paid to the Sub-Advisor
will be reduced to zero for that month, but in no event shall the
Sub-Advisor be required to reimburse the Advisor for all or a portion
of such excess reimbursements.
(c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph (1)
for the same portion of the investments of the Portfolio for the same
period, the fees paid to the Sub-Advisor with respect to such
investments shall be calculated exclusively under subparagraph (b) of
this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the
Sub-Advisor hereunder or by the Advisor under the Management Contract
with the Portfolio, which expenses payable by the Portfolio shall
include, without limitation, (i) interest and taxes; (ii) brokerage
commissions and other costs in connection with the purchase or sale of
securities and other investment instruments; (iii) fees and expenses
of the Trust's Trustees other than those who are "interested persons"
of the Trust, the Sub-Advisor or the Advisor; (iv) legal and audit
expenses; (v) custodian, registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Trust and the Portfolio's shares for distribution
under state and federal securities laws; (vii) expenses of printing
and mailing reports and notices and proxy material to shareholders of
the Portfolio; (viii) all other expenses incidental to holding
meetings of the Portfolio's shareholders, including proxy
solicitations therefore; (ix) a pro rata share, based on relative net
assets of the Portfolio and other registered investment companies
having Advisory and Service or Management Contracts with the Advisor,
of 50% of insurance premiums for fidelity and other coverage; (x) its
proportionate share of association membership dues; (xi) expenses of
typesetting for printing Prospectuses and Statements of Additional
Information and supplements thereto; (xii) expenses of printing and
mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Portfolio is a
party and the legal obligation which the Portfolio may have to
indemnify the Trust's Trustees and officers with respect thereto.
6. Interested Persons: It is understood that Trustees, officers, and
shareholders of the Trust are or may be or become interested in the
Advisor or the Sub-Advisor as directors, officers or otherwise and
that directors, officers and stockholders of the Advisor or the
Sub-Advisor are or may be or become similarly interested in the Trust,
and that the Advisor or the Sub-Advisor may be or become interested in
the Trust as a shareholder or otherwise.
7. Services to Other Companies or Accounts: The services of the
Sub-Advisor to the Advisor are not to be deemed to be exclusive, the
Sub-Advisor being free to render services to others and engage in
other activities, provided, however, that such other services and
activities do not, during the term of this Agreement, interfere, in a
material manner, with the Sub-Advisor's ability to meet all of its
obligations hereunder. The Sub-Advisor shall for all purposes be an
independent contractor and not an agent or employee of the Advisor or
the Trust.
8. Standard of Care: In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Sub-Advisor, the Sub-Advisor shall not be
subject to liability to the Advisor, the Trust or to any shareholder
of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that
may be sustained in the purchase, holding or sale of any security.
9. Duration and Termination of Agreement; Amendments:
(a) Subject to prior termination as provided in subparagraph (d) of
this paragraph 9, this Agreement shall continue in force until June
30, [1994] ((2000)) and indefinitely thereafter, but only so long as
the continuance after such period shall be specifically approved at
least annually by vote of the Trust's Board of Trustees or by vote of
a majority of the outstanding voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor,
the Sub-Advisor and the Portfolio ((subject to the provisions of
Section 15 of the 1940 Act, as modified by or interpreted by any
applicable order or orders of the Securities and Exchange Commission
(the "Commission") or any rules or regulations adopted by, or
interpretative releases of, the Commission ))[, such consent on the
part of the Portfolio to be authorized by vote of a majority of the
outstanding voting securities of the Portfolio].
(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 hereto affixed, all as of
the date written above.
[SIGNATURE LINES OMITTED]
EXHIBIT 5
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
U.S. Bond Index(f) 2/28/99 $ 1,060.1 0.07(z)%
Capital & Income(i) 4/30/99 2,276.0 0.58
High Income(i) 4/30/99 3,015.0 0.80
Intermediate Bond(f)(i) 4/30/99 3,336.4 0.43
Investment Grade Bond(f)(i) 4/30/99 2,091.6 0.43
Short-Term Bond(f)(i) 4/30/99 857.0 0.41(z)
Spartan Government Income(f) 4/30/99 560.0 0.51(z)
The North Carolina Capital
Management Trust:
Term Portfolio(f) 6/30/99 86.4 0.35
Ginnie Mae(f)(i) 7/31/99 1,232.1 0.37(z)
Government Income(f) 7/31/99 1,567.7 0.43
Intermediate Government 7/31/99 785.0 0.53(z)
Income(f)(i)
Target Timeline Funds:(f)(i)
2001 7/31/99 15.7 0.00(z)
2003 7/31/99 23.2 0.00(z)
Spartan Investment Grade 9/30/99 1,398.9 0.47(z)
Bond(f)(i)
Advisor Mortgage
Securities:(f)(i)(x)
Class A 10/31/99 2.6 0.43
Class B 10/31/99 13.9 0.43
Class T 10/31/99 24.8 0.43
Institutional Class 10/31/99 18.3 0.43
Initial Class 10/31/99 430.8 0.43
Advisor Government
Investment:(f)(i)
Class A 10/31/99 12.3 0.43
Class B 10/31/99 85.7 0.43
Class T 10/31/99 213.0 0.43
Class C 10/31/99 27.1 0.43
Institutional Class 10/31/99 24.3 0.43
Advisor High Income:(e)(i)(x)
Class A 10/31/99 0.7 0.57(d)
Class B 10/31/99 1.1 0.57(d)
Class T 10/31/99 1.6 0.57(d)
Class C 10/31/99 1.3 0.57(d)
Institutional Class 10/31/99 0.7 0.57(d)
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)
Advisor High Yield:(i)
Class A 10/31/99 $ 168.0 0.58%
Class B 10/31/99 1,130.7 0.58
Class T 10/31/99 2,523.1 0.58
Class C 10/31/99 217.3 0.58
Institutional Class 10/31/99 130.4 0.58
Advisor Short
Fixed-Income:(f)(i)
Class A 10/31/99 13.1 0.43
Class T 10/31/99 307.3 0.43
Class C 10/31/99 11.9 0.43
Institutional Class 10/31/99 6.9 0.43
Advisor Intermediate
Bond:(f)(i)
Class A 10/31/99 15.8 0.43
Class B 10/31/99 52.9 0.43
Class T 10/31/99 304.2 0.43
Class C 10/31/99 11.3 0.43
Institutional Class 10/31/99 164.3 0.43
Institutional 11/30/99 407.7 0.45
Short-Intermediate
Government(f)
Real Estate High Income 11/30/99 98.4 0.73
Advisor Emerging Markets
Income:(h)
Class A 12/31/99 2.2 0.68
Class B 12/31/99 17.5 0.68
Class T 12/31/99 51.5 0.68
Class C 12/31/99 1.9 0.68
Institutional Class 12/31/99 2.3 0.68
Advisor Strategic Income:(f)(i)
Class A 12/31/99 11.4 0.58
Class B 12/31/99 81.4 0.58
Class T 12/31/99 193.5 0.58
Class C 12/31/99 14.3 0.58
Institutional Class 12/31/99 4.6 0.58
International Bond(h) 12/31/99 68.5 0.68
New Markets Income(g) 12/31/99 200.7 0.68
Real Estate High Income II 12/31/99 277.6 0.73
Strategic Income(j) 12/31/99 32.2 0.58
Variable Insurance Products:
High Income(i)
Initial Class 12/31/99 $ 2,338.3 0.58%
Service Class 12/31/99 187.9 0.58
Variable Insurance Products
II:
Investment Grade Bond(i) 12/31/99 711.2 0.43
</TABLE>
(a) All fund data are as of the fiscal year end noted in the chart or
as of December 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) Annualized
(e) Less than a complete fiscal year
(f) FMR has entered into a sub-advisory agreement with Fidelity
Investments Money Management, Inc., with respect to the fund.
(g) 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.
(h) 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.
(i) FMR has entered into sub-advisory agreements with FMR U.K. and FMR
Far East, with respect to the fund.
(j) FMR has entered into sub-advisory agreements with FMR U.K., FMR
Far East, and FIIA, with respect to the fund.
SUM-pxs-0300 CUSIP# 316062108/FUND# 038
1.736508.100
Vote this proxy card TODAY! Your prompt response will
save your fund the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- ----------------------------------------------------------------------
FIDELITY SUMMER STREET TRUST: FIDELITY CAPITAL & INCOME FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward
C. Johnson 3d, Eric D. Roiter and Ralph F. Cox, or any one or more of
them, attorneys, with full power of substitution, to vote all shares
of FIDELITY SUMMER STREET TRUST: FIDELITY CAPITAL & INCOME FUND 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 May 17, 2000 at 9:00
a.m. and at any adjournments thereof. All powers may be exercised by
a majority of said proxy holders or substitutes voting or acting or,
if only one votes and acts, then by that one. This Proxy shall be
voted on the proposals described in the Proxy Statement as specified
on the reverse side. Receipt of the Notice of the Meeting and the
accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When
signing in a fiduciary capacity, such as executor, administrator,
trustee, attorney, guardian, etc., please so indicate. Corporate and
partnership proxies should be signed by an authorized person
indicating the person's title.
Date ______________
________________________________________________
________________________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
cusip #316062108/fund #038
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:
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the 12 nominees [ ] FOR all nominees listed [ ] WITHHOLD authority to 1.
specified below as Trustees: (except as marked to the vote for all nominees.
Ralph F. Cox, Phyllis Burke contrary below).
Davis, Robert M. Gates,
Edward C. Johnson 3d, Donald
J. Kirk, Ned C. Lautenbach,
Peter S. Lynch, William O.
McCoy, Gerald C. McDonough,
Marvin L. Mann, Robert C.
Pozen, 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>
______________________________________________________________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
PricewaterhouseCoopers LLP
as independent accountants
of the fund.
3. To authorize the Trustees to FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
adopt an amended and
restated Declaration of Trust.
4. To approve an amended FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
management contract for the
fund.
5. To approve an amended FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
sub-advisory agreement with
Fidelity Management &
Research (U.K.) Inc. for the
fund.
6. To approve an amended FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
sub-advisory agreement with
Fidelity Management &
Research (Far East) Inc. for
the fund.
7. To amend the fund's FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
fundamental investment
limitation concerning
diversification to exclude
securities of other
investment companies from
the limitation.
</TABLE>
CAI-PXC-0300 cusip# 316062108/fund# 038
IMPORTANT PROXY MATERIALS
PLEASE CAST YOUR VOTE NOW!
FIDELITY(Registered trademark) CAPITAL & INCOME FUND
Dear Shareholder:
I am writing to let you know that a special meeting of shareholders of
Fidelity Capital & Income Fund (the fund) will be held on May 17,
2000. The purpose of the meeting is to vote on several important
proposals that affect the fund and your investment. As a shareholder,
you have the opportunity to voice your opinion on the matters that
affect your fund. 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 interests 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
1-800-544-6666. 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 ARE THE PROPOSALS?
1. To elect a Board of Trustees.
2. To ratify the selection of PricewaterhouseCoopers LLP as
independent accountants of the fund.
3. To authorize the Trustees to adopt an Amended and Restated
Declaration of Trust.
4. To approve an amended management contract for Fidelity Capital &
Income Fund.
5. To approve an amended sub-advisory agreement with Fidelity
Management & Research (U.K.) Inc. (FMR U.K.) for the fund.
6. To approve an amended sub-advisory agreement with Fidelity
Management & Research (Far East) Inc. (FMR Far East) for the fund.
7. To amend the fund's fundamental investment limitation concerning
diversification to exclude securities of other investment companies
from the limitation.
PROPOSAL 1: WHAT ROLE DOES THE BOARD PLAY?
The Trustees oversee the investment policies of the 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
fund.
PROPOSAL 2: WHAT IS THE ROLE OF THE INDEPENDENT ACCOUNTANTS?
The independent accountants act as the fund's auditors. They review
the fund's annual financial statements and provide other audit and
tax-related services.
PROPOSAL 3: WHY IS THE FUND PROPOSING TO ADOPT AN AMENDED AND RESTATED
DECLARATION OF TRUST?
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 with due care and in the
interests of 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. Adoption of the new Declaration of Trust will not result in
any changes in the fund's trustees or officers or in the investment
policies described in the fund's current prospectus.
PROPOSAL 4: WHY IS THE FUND PROPOSING AN AMENDED MANAGEMENT CONTRACT?
The changes are threefold. First, the amended management contract
would lower the individual fund fee rate from 0.55% to 0.45% of the
fund's average daily net assets, resulting in a net decrease of 0.10%
of average net assets.
Second, the amended management contract would provide for lower
management fees to be paid to Fidelity Management & Research Company
(FMR) when FMR's assets under management exceed certain levels.
Third, the proposal would allow FMR and the fund to amend the
management contract without shareholder vote if the Investment Company
Act of 1940 (the 1940 Act) permits them to do so. For example, this
would allow the management contract to be amended to reflect a
management fee decrease without holding a shareholder meeting.
PROPOSALS 5 AND 6: WHAT IS A SUB-ADVISORY AGREEMENT AND HOW WILL THE
PROPOSED AMENDED SUB-ADVISORY AGREEMENTS AFFECT THE FUND?
Generally, the sub-advisory agreements allow FMR increased access to
more specialized investment expertise in foreign markets. The fund's
amended sub-advisory agreements would allow FMR, FMR U.K., FMR Far
East, 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, and FMR Far
East, with its principal office in Tokyo, Japan, are wholly-owned
subsidiaries of FMR. FMR pays all fees of FMR U.K. and FMR Far East
under the fund's amended agreements. The amended agreements would not
increase the fees paid to FMR by the fund.
PROPOSAL 7: COULD YOU EXPLAIN THIS PROPOSAL TO AMEND THE FUND'S
FUNDAMENTAL INVESTMENT LIMITATION CONCERNING DIVERSIFICATION TO
EXCLUDE SECURITIES OF OTHER INVESTMENT COMPANIES FROM THE LIMITATION?
This proposal would permit the fund to invest without limit in the
securities of other investment companies (the legal term for mutual
funds and similar entities). Pursuant to an order of exemption granted
by the SEC, the fund may invest in money market or short-term bond
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 fund's cash management.
HAS THE FUND'S BOARD OF TRUSTEES APPROVED EACH PROPOSAL?
Yes. The Board of Trustees has 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 the fund on the record date. The record date is
March 20, 2000.
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 1-800-544-6666.
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."
REMEMBER, THE ABOVE IS ONLY A SUMMARY OF A FEW KEY FEATURES OF THE
PROPOSALS. PLEASE READ THE PROXY STATEMENT FOR COMPLETE DETAILS ON
EACH PROPOSAL.
