SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the [X]
Registrant
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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)
(IF YOU CHECKED "FILED BY
REGISTRANT ABOVE" DO NOT
FILL THIS IN: 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:
SPARTAN(registered trademark) MUNICIPAL INCOME FUND
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
SPARTAN FLORIDA MUNICIPAL INCOME FUND
SPARTAN NEW JERSEY MUNICIPAL INCOME FUND
FUNDS OF
FIDELITY COURT STREET TRUST
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-544-8888
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of the above funds:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
Meeting) of Spartan Municipal Income Fund, Spartan Connecticut
Municipal Income Fund, Spartan Florida Municipal Income Fund and
Spartan New Jersey Municipal Income Fund (the funds), will be held at
a n office of Fidelity Court Street Trust (the trust), 82
Devonshire Street, Boston, Massachusetts 02109, on December 15, 1999,
at 9:00 a.m. The purpose of the Meeting is to consider and act upon
the following proposals, and to transact such other business as may
properly come before the Meeting or any adjournments thereof.
1. To elect a Board of Trustees.
2. To ratify the selection of PricewaterhouseCoopers LLP as
independent accountants of the funds.
3. To authorize the Trustees to adopt an amended and restated
Declaration of Trust.
4. To approve an amended management contract for Spartan Municipal
Income Fund.
5. To approve an amended management contract, including a management
fee structure change, for Spartan Connecticut Municipal Income Fund,
Spartan Florida Municipal Income Fund and Spartan New Jersey Municipal
Income Fund.
6. To approve an Agreement and Plan providing for the reorganization
of Spartan Municipal Income Fund from a separate series of one
Massachusetts Business Trust to another.
7. To eliminate Spartan Municipal Income Fund's fundamental 80%
investment policy and adopt a comparable non-fundamental policy.
8. To eliminate Spartan Connecticut Municipal Income Fund's
fundamental 80% investment policy and adopt a comparable
non-fundamental policy.
9. To eliminate Spartan Florida Municipal Income Fund's fundamental
80% investment policy and adopt a comparable non-fundamental policy.
10. To eliminate Spartan New Jersey Municipal Income Fund's
fundamental 80% investment policy and adopt a comparable
non-fundamental policy.
11. To eliminate Spartan Florida Municipal Income Fund's fundamental
investment poli cies regarding investments in debt securities of
investment-grade quality and below investment-grade quality.
12. To amend Spartan Municipal Income Fund's fundamental investment
limitation concerning diversification to exclude securities of
other investment companies from the limitation for the fund .
The Board of Trustees has fixed the close of business on October 18,
1999 as the record date for the determination of the shareholders of
each of the funds entitled to notice of, and to vote at, such Meeting
and any adjournments thereof.
By order of the Board of Trustees,
ERIC D. ROITER Secretary
October 18, 1999
YOUR VOTE IS IMPORTANT -
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY
SHAREHOLDER WHO DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO
INDICATE VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND SIGN
IT, AND RETURN IT IN THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF
MAILED IN THE UNITED STATES. IN ORDER TO AVOID UNNECESSARY EXPENSE, WE
ASK YOUR COOPERATION IN MAILING YOUR PROXY CARD PROMPTLY, NO MATTER
HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.
INSTRUCTIONS FOR EXECUTING PROXY CARD
The following general rules for executing proxy cards may be of
assistance to you and help avoid the time and expense involved in
validating your vote if you fail to execute your proxy card properly.
1. INDIVIDUAL ACCOUNTS: Your name should be signed exactly as it
appears in the registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.
3. ALL OTHER ACCOUNTS should show the capacity of the individual
signing. This can be shown either in the form of the account
registration itself or by the individual executing the proxy card. For
example:
REGISTRATION VALID SIGNATURE
A. 1) ABC Corp. John Smith, Treasurer
2) ABC Corp. John Smith, Treasurer
c/o John Smith, Treasurer
B. 1) ABC Corp. Profit Sharing Plan Ann B. Collins, Trustee
2) ABC Trust Ann B. Collins, Trustee
3) Ann B. Collins, Trustee Ann B. Collins, Trustee
u/t/d 12/28/78
C. 1) Anthony B. Craft, Cust. Anthony B. Craft
f/b/o Anthony B. Craft, Jr.
UGMA
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS OF
FIDELITY COURT STREET TRUST:
SPARTAN MUNICIPAL INCOME FUND
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
SPARTAN FLORIDA MUNICIPAL INCOME FUND
SPARTAN NEW JERSEY MUNICIPAL INCOME FUND
TO BE HELD ON DECEMBER 15, 1999
This Proxy Statement is furnished in connection with a solicitation
of proxies made by, and on behalf of, the Board of Trustees of
Fidelity Court Street Trust (the trust) to be used at the Special
Meeting of Shareholders of Spartan Municipal Income Fund, Spartan
Connecticut Municipal Income Fund, Spartan Florida Municipal Income
Fund and Spartan New Jersey Municipal Income Fund (the funds) and at
any adjournments thereof (the Meeting), to be held on December 15,
1999 at 9:00 a.m. at 82 Devonshire Street, Boston, Massachusetts
02109, a n office of the trust and Fidelity Management &
Research Company (FMR), the funds' investment adviser.
The purpose of the Meeting is set forth in the accompanying Notice.
The solicitation is being made primarily by the mailing of this Proxy
Statement and the accompanying proxy card on or about October 18,
1999. Supplementary solicitations may be made by mail, telephone,
telegraph, facsimile, electronic means or by personal interview by
representatives of the trust. In addition, Management Information
Services Corp. (MIS) and D.F. King & Co., Inc. may be paid on a
per-call basis to solicit shareholders on behalf of the funds at an
anticipated cost of approximately $4,000 (Spartan Municipal Income
Fund), $2,000 (Spartan Connecticut Municipal Income Fund), $2,000
(Spartan Florida Municipal Income Fund), and $2,000 (Spartan New
Jersey Municipal Income Fund), respectively. The expenses in
connection with preparing this Proxy Statement and its enclosures and
of all solicitations for Spartan Municipal Income Fund will be paid by
the fund, provided the expenses do not exceed Spartan Municipal Income
Fund's existing expense cap of 0.53%. Expenses exceeding Spartan
Municipal Income Fund's expense cap will be paid by FMR. The expenses
in connection with preparing this Proxy Statement and its enclosures
and of all solicitations for Spartan Connecticut Municipal Income
Fund, Spartan Florida Municipal Income Fund and Spartan New Jersey
Municipal Income Fund will be borne by FMR. Spartan Municipal Income
Fund (FMR for Spartan Connecticut Municipal Income Fund, Spartan
Florida Municipal Income Fund and Spartan New Jersey Municipal Income
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 funds' principal underwriter and distribution
agent, is 82 Devonshire Street, Boston, Massachusetts 02109. The
principal business address of Fidelity Investments Money Management,
Inc. (FIMM), subadviser to the funds, is 1 Spartan Way, Merrimack, New
Hampshire 03054.
If the enclosed proxy card is executed and returned, it may
nevertheless be revoked at any time prior to its use by written
notification received by the trust, by the execution of a later-dated
proxy card, by the trust's receipt of a subsequent valid telephonic
vote or by attending the Meeting and voting in person.
All proxy cards solicited by the Board of Trustees that are properly
executed and received by the Secretary prior to the Meeting, and are
not revoked, will be voted at the Meeting. Shares represented by such
proxies will be voted in accordance with the instructions thereon. If
no specification is made on a proxy card, it will be voted FOR the
matters specified on the proxy card. Only proxies that are voted will
be counted towards establishing a quorum. Broker non-votes are not
considered voted for this purpose. Shareholders should note that while
votes to ABSTAIN will count toward establishing a quorum, passage of
any proposal being considered at the Meeting will occur only if a
sufficient number of votes are cast FOR the proposal. Accordingly,
votes to ABSTAIN and votes AGAINST will have the same effect in
determining whether the proposal is approved.
The funds may also arrange to have votes recorded by telephone. The
expenses in connection with telephone voting for Spartan Municipal
Income Fund will be paid by the fund, provided the expenses do not
exceed Spartan Municipal Income Fund's expense cap of 0.53%. Expenses
exceeding Spartan Municipal Income Fund's expense cap will be paid by
FMR. The expenses in connection with telephone voting for Spartan
Connecticut Municipal Income Fund, Spartan Florida Municipal Income
Fund and Spartan New Jersey Municipal Income Fund will be borne by
FMR. If the funds record votes by telephone, they will use procedures
designed to authenticate shareholders' identities, to allow
shareholders to authorize the voting of their shares in accordance
with their instructions, and to confirm that their instructions have
been properly recorded. Proxies voted by telephone may be revoked at
any time before they are voted in the same manner that proxies voted
by mail may be revoked. D.F. King & Co., Inc. may be paid on a
per-call basis for vote-by-phone solicitations on behalf of the funds
at an anticipated cost of approximately $ 6,000 (Spartan
Municipal Income Fund), $ 2,000 (Spartan Connecticut Municipal
Income Fund), $ 2,000 (Spartan Florida Municipal Income Fund)
and $ 2,000 (Spartan New Jersey Municipal Income Fund).
If a quorum is not present at the Meeting, or if a quorum is present
at the Meeting but sufficient votes to approve one or more of the
proposed items are not received, or if other matters arise requiring
shareholder attention, the persons named as proxy agents may propose
one or more adjournments of the Meeting to permit further solicitation
of proxies. Any such adjournment will require the affirmative vote of
a majority of those shares present at the Meeting or represented by
proxy. When voting on a proposed adjournment, the persons named as
proxy agents will vote FOR the proposed adjournment all shares that
they are entitled to vote with respect to each item, unless directed
to vote AGAINST the item, in which case such shares will be voted
AGAINST the proposed adjournment with respect to that item. A
shareholder vote may be taken on one or more of the items in this
Proxy Statement prior to such adjournment if sufficient votes have
been received and it is otherwise appropriate.
Shares of each fund of the trust issued and outstanding as of August
31, 1999 are indicated in the following table:
SPARTAN MUNICIPAL INCOME FUND 360,720,591
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND 32,219,409
SPARTAN FLORIDA MUNICIPAL INCOME FUND 37,780,833
SPARTAN NEW JERSEY MUNICIPAL INCOME FUND 35,696,278
As of August 31, 1999 , the nominees and officers of the trust owned,
in the aggregate, less than 1% of the funds' outstanding shares.
Shareholders of record at the close of business on October 18, 1999
will be entitled to vote at the Meeting. Each such shareholder will be
entitled to one vote for each dollar of net asset value held on that
date.
FOR A FREE COPY OF EACH FUND'S ANNUAL REPORT FOR THE FISCAL YEAR
ENDED NOVEMBER 30, 199 8 , CALL 1-800-544-8888 OR WRITE TO
FIDELITY DISTRIBUTORS CORPORATION AT 82 DEVONSHIRE STREET, BOSTON,
MASSACHUSETTS 02109.
VOTE REQUIRED: A PLURALITY OF ALL VOTES CAST AT THE MEETING IS
SUFFICIENT TO APPROVE PROPOSAL 1 AND A MAJORITY OF ALL VOTES OF THE
APPROPRIATE FUND CAST AT THE MEETING IS SUFFICIENT TO APPROVE PROPOSAL
2. APPROVAL OF PROPOSAL 3 REQUIRES THE AFFIRMATIVE VOTE OF A "MAJORITY
OF THE OUTSTANDING VOTING SECURITIES" OF THE ENTIRE TRUST. APPROVAL OF
PROPOSALS 4 THROUGH 12 REQUIRES THE AFFIRMATIVE VOTE OF A "MAJORITY OF
THE OUTSTANDING VOTING SECURITIES" OF THE APPROPRIATE FUNDS. UNDER THE
INVESTMENT COMPANY ACT OF 1940 (THE 1940 ACT), THE VOTE OF A "MAJORITY
OF THE OUTSTANDING VOTING SECURITIES" MEANS THE AFFIRMATIVE VOTE OF
THE LESSER OF (A) 67% OR MORE OF THE VOTING SECURITIES PRESENT AT THE
MEETING OR REPRESENTED BY PROXY IF THE HOLDERS OF MORE THAN 50% OF THE
OUTSTANDING VOTING SECURITIES ARE PRESENT OR REPRESENTED BY PROXY OR
(B) MORE THAN 50% OF THE OUTSTANDING VOTING SECURITIES. BROKER
NON-VOTES ARE NOT CONSIDERED "PRESENT" FOR THIS PURPOSE.
The following tables summarize the proposals applicable to each fund.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Proposal # Proposal Description Applicable Fund(s) Page
1. To elect as Trustees the All 6
nominees presented in
proposal 1.
2. To ratify the selection of All 15
PricewaterhouseCoopers LLP
as independent accountants
of the funds.
3. To authorize the Trustees to All 16
adopt an amended and
restated Declaration of Trust.
4. To approve an amended Spartan Municipal Income Fund 17
management contract for the
fund that would reduce the
management fee payable to
FMR by the fund as FMR's
assets under management
increase and allow future
modifications of the
contract without a
shareholder vote if
permitted by the 1940 Act.
5. To approve an amended Spartan Connecticut Municipal 20
management contract, Income Fund Spartan Florida
including a management fee Municipal Income Fund
structure change for the Spartan New Jersey Municipal
fund and allow future Income Fund
modifications of the
contract without a
shareholder vote if
permitted by the 1940 Act.
6. To approve an agreement and Spartan Municipal Income Fund 26
plan providing for the
reorganization of the fund
from a separate series of
one Massachusetts business
trust to a separate series
of another Massachusetts
business trust.
7. To eliminate the fundamental Spartan Municipal Income Fund 27
80% investment policy and
adopt a comparable
non-fundamental policy.
8. To eliminate the fundamental Spartan Connecticut Municipal 27
80% investment policy and Income Fund
adopt a comparable
non-fundamental policy.
9. To eliminate the fundamental Spartan Florida Municipal 28
80% investment policy and Income Fund
adopt a comparable
non-fundamental policy.
10. To eliminate the fundamental Spartan New Jersey Municipal 29
80% investment policy and Income Fund
adopt a comparable
non-fundamental policy.
11. To eliminate the fundamental Spartan Florida Municipal 29
investment policy regarding Income Fund
investments in debt
securities of
investment-grade quality and
below investment-grade
quality.
12. To amend the diversification Spartan Municipal Income Fund 30
limitation to exclude
"securities of other
investment companies" from
issuer diversification limits.
</TABLE>
1. TO ELECT A BOARD OF TRUSTEES.
The purpose of this proposal is to elect a Board of Trustees of the
Trust. Pursuant to the provisions of the Declaration of Trust of
Fidelity Court Street Trust, the Trustees have determined that the
number of Trustees shall be fixed at twelve. E. Bradley Jones is
scheduled to retire at the end of 1999 and it is proposed that Ned
C. Lautenbac h serve as Trustee effective January 1, 2000 .
It is intended that the enclosed proxy card will be voted for the
election as Trustees of the nominees listed below, unless such
authority has been withheld in the proxy card.
Except for Mr. Lautenbach , all nominees named below are
currently Trustees of Fidelity Court Street Trust and have served in
that capacity continuously since originally elected or appointed.
Robert M. Gates, William O. McCoy and Robert C. Pozen, were selected
by the trust's Nominating and Administration Committee (see page
16 ) and were appointed to the Board in March 1997, January 1997
and August 1997, respectively. Mr. Lautenbach was selected by
the trust's Nominating and Administration Committee and will be
appointed to the Board effective January 1, 2000 . None of the
nominees are related to one another. Those nominees indicated by an
asterisk (*) are "interested persons" of the trust by virtue of, among
other things, their affiliation with either the trust, the funds'
investment adviser (FMR, or the Adviser), or the funds' distribution
agent, FDC. The business address of each nominee who is an "interested
person" is 82 Devonshire Street, Boston, Massachusetts 02109, and the
business address of all other nominees is Fidelity Investments, P.O.
Box 9235, Boston, Massachusetts 02205-9235. Except for Robert M.
Gates, William O. McCoy, Robert C. Pozen, and Mr. Lautenbach
each of the nominees is currently a Trustee of 57 registered
investment companies advised by FMR. Mr. Gates, Mr. McCoy and Mr.
Pozen are currently Trustees of 55 registered investment
companies advised by FMR. Mr. Lautenbach is not currently a
Trustee of any registered investment companies advised by FMR.
In the election of Trustees, those twelve nominees receiving the
highest number of votes cast at the Meeting, providing a quorum is
present, shall be elected.
<TABLE>
<CAPTION>
<S> <C> <C>
Nominee (Age) Principal Occupation** Year of Election or Appointment
Ralph F. Cox (67) President of RABAR 1991
Enterprises (management
consulting-engineering
industry, 1994). Prior to
February 1994, he was
President of Greenhill
Petroleum Corporation
(petroleum exploration and
production). Until March
1990, Mr. Cox was President
and Chief Operating Officer
of Union Pacific Resources
Company (exploration and
production). He is a
Director of USA Waste
Services, Inc.
(non-hazardous waste, 1993),
CH2M Hill Companies
(engineering), Rio Grande,
Inc. (oil and gas
production), and Daniel
Industries (petroleum
measurement equipment
manufacturer). In addition,
he is a member of advisory
boards of Texas A&M
University and the
University of Texas at Austin.
Phyllis Burke Davis (67) Prior to her retirement in 1992
September 1991, Mrs. Davis
was the Senior Vice
President of Corporate
Affairs of Avon Products,
Inc. She is currently a
Director of BellSouth
Corporation
(telecommunications), Eaton
Corporation (manufacturing,
1991), and the TJX
Companies, Inc. (retail
stores), and previously
served as a Director of
Hallmark Cards, Inc.
(1985-1991) and Nabisco
Brands, Inc. In addition,
she is a member of the
President's Advisory Council
of The University of Vermont
School of Business
Administration.
Robert M. Gates (56) Consultant, author, and 1997
lecturer (1993). Mr. Gates
was Director of the Central
Intelligence Agency (CIA)
from 1991-1993. From 1989 to
1991, Mr. Gates served as
Assistant to the President
of the United States and
Deputy National Security
Advisor. Mr. Gates is a
Director of LucasVarity PLC
(automotive components and
diesel engines), Charles
Stark Draper Laboratory
(non-profit), NACCO
Industries, Inc. (mining and
manufacturing), and TRW Inc.
(original equipment and
replacement products). Mr.
Gates also is a Trustee of
the Forum for International
Policy and of the Endowment
Association of the College
of William and Mary. In
addition, he is a member of
the National Executive Board
of the Boy Scouts of America.
*Edward C. Johnson 3d (69) President, is Chairman, Chief 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.
Nominee (Age) Principal Occupation ** Year of Election or Appointment
Donald J. Kirk (67) Executive-in-Residence (1995) 1987
at Columbia University
Graduate School of Business
and a financial consultant.
From 1987 to January 1995,
Mr. Kirk was a Professor at
Columbia University Graduate
School of Business. Prior to
1987, he was Chairman of the
Financial Accounting
Standards Board. Mr. Kirk
previously served as a
Director of General Re
Corporation (reinsurance,
1987-1998) and Valuation
Research Corp. (appraisals
and valuations, 1993-1995).
He serves as Chairman of the
Board of Directors of
National Arts Stabilization
Inc., Chairman of the Board
of Trustees of the Greenwich
Hospital Association,
Director of the Yale-New
Haven Health Services Corp.
(1998), a Member of the
Public Oversight Board of
the American Institute of
Certified Public
Accountants' SEC Practice
Section (1995), and as a
Public Governor of the
National Association of
Securities Dealers, Inc.
(1996).
*Peter S. Lynch (56) Vice Chairman and Director of 1990
FMR. Prior to May 31, 1990,
he was a Director of FMR and
Executive Vice President of
FMR (a position he held
until March 31, 1991); Vice
President of Fidelity
Magellan Fund and FMR Growth
Group Leader; and Managing
Director of FMR Corp. Mr.
Lynch was also Vice
President of Fidelity
Investments Corporate
Services (1991-1992). In
addition, he serves as a
Trustee of Boston College,
Massachusetts Eye & Ear
Infirmary, Historic
Deerfield (1989) and Society
for the Preservation of New
England Antiquities, and as
an Overseer of the Museum of
Fine Arts of Boston.
William O. McCoy (66) Vice President of Finance for 1997
the University of North
Carolina (16-school system,
1995). Prior to his
retirement in December 1994,
Mr. McCoy was Vice Chairman
of the Board of BellSouth
Corporation
(telecommunications, 1984)
and President of BellSouth
Enterprises (1986). He is
currently a Director of
Liberty Corporation (holding
company, 1984), Weeks
Corporation of Atlanta (real
estate, 1994), Carolina
Power and Light Company
(electric utility, 1996) and
the Kenan Transport Co.
(1996). Previously, he was a
Director of First American
Corporation (bank holding
company, 1979-1996). In
addition, Mr. McCoy serves
as a member of the Board of
Visitors for the University
of North Carolina at Chapel
Hill (1994) and for the
Kenan-Flager Business School
(University of North
Carolina at Chapel Hill,
1988).
Gerald C. McDonough (71) Chairman of G.M. Management 1989
Group (strategic advisory
services). Mr. McDonough is
a Director of York
International Corp. (air
conditioning and
refrigeration), Commercial
Intertech Corp. (hydraulic
systems, building systems,
and metal products, 1992),
CUNO, Inc. (liquid and gas
filtration products, 1996),
and Associated Estates
Realty Corporation (a real
estate investment trust,
1993). Mr. McDonough served
as a Director of
ACME-Cleveland Corp. (metal
working, telecommunications,
and electronic products)
from 1987-1996 and
Brush-Wellman Inc. (metal
refining) from 1983-1997).
Marvin L. Mann (66) Chairman of the Board of 1993
Lexmark International, Inc.
(office machines, 1991).
Prior to 1991, he held the
positions of Vice President
of International Business
Machines Corporation ("IBM")
and President and General
Manager of various IBM
divisions and subsidiaries.
Mr. Mann is a Director of
M.A. Hanna Company
(chemicals, 1993) and
Imation Corp. (imaging and
information storage, 1997).
*Robert C. Pozen (53) Senior Vice President, is 1997
also President and a
Director of FMR (1997); and
President and a Director of
Fidelity Investments Money
Management, Inc. (1998),
Fidelity Management &
Research (U.K.) Inc. (1997),
and Fidelity Management &
Research (Far East) Inc.
(1997). Previously, Mr.
Pozen served as General
Counsel, Managing Director,
and Senior Vice President of
FMR Corp.
Thomas R. Williams (71) President of The Wales Group, 1989
Inc. (management and
financial advisory
services). Prior to retiring
in 1987, Mr. Williams served
as Chairman of the Board of
First Wachovia Corporation
(bank holding company), and
Chairman and Chief Executive
Officer of The First
National Bank of Atlanta and
First Atlanta Corporation
(bank holding company). He
is currently a of Director
of ConAgra, Inc.
(agricultural products),
Georgia Power Company
(electric utility), National
Life Insurance Company of
Vermont, American Software,
Inc., and AppleSouth, Inc.
(restaurants, 1992).
Nominee (Age) Principal Occupation** Year of Election or Appointment
Ned C. Lautenbach++ (55) Partner of Clayton, Dubilier 2000
& Rice, Inc. (private equity
investment firm) since
September 1998. Mr.
Lautenbach was Senior Vice
President of IBM Corporation
from 1992 until his
retirement in July 1998.
From 1993 to 1995 he was
Chairman of IBM World Trade
Corporation. He also was a
member of IBM's Corporate
Executive Committee from
1994 to July 1998. He is a
Director of PPG Industries
Inc. (glass, coating and
chemical manufacturer),
Dynatech Corporation (global
communications equipment),
Eaton Corporation (global
manufacturer of highly
engineered products) and
ChoicePoint Inc. (data
identification, retrieval,
storage, and analysis).
</TABLE>
** Except as otherwise indicated, each individual has held the office
shown or other offices in the same company for the last five years.
++ Nominated to serve as Trustee effective on or about January 1,
2000, upon retirement of E. Bradley Jones.
As of August 31, 1999 the nominees, Trustees and officers of the
Trust and each fund owned, in the aggregate, less than 1% of each
fund's outstanding shares.
If elected, the Trustees will hold office without limit in time
except that (a) any Trustee may resign; (b) any Trustee may be removed
by written instrument, signed by at least two-thirds of the number of
Trustees prior to such removal; (c) any Trustee who requests to be
retired or who has become incapacitated by illness or injury may be
retired by written instrument signed by a majority of the other
Trustees; and (d) a Trustee may be removed at any Special Meeting of
shareholders by a two-thirds vote of the outstanding voting securities
of the trust. In case a vacancy shall for any reason exist, the
remaining Trustees will fill such vacancy by appointing another
Trustee, so long as, immediately after such appointment, at least
two-thirds of the Trustees have been elected by shareholders. If, at
any time, less than a majority of the Trustees holding office has been
elected by the shareholders, the Trustees then in office will promptly
call a shareholders' meeting for the purpose of electing a Board of
Trustees. Otherwise, there will normally 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 November 30, 1998. It is expected that the Trustees will
meet at least ten times a year at regularly scheduled meetings.
The trust's Audit Committee is composed entirely of Trustees who are
not interested persons of the trust, FMR or its affiliates and
normally meets four times a year, or as required, prior to meetings of
the Board of Trustees. Currently, Messrs. Kirk (Chairman), Gates and
McCoy, and Mrs. Davis are members of the committee. The committee
oversees and monitors the trust's internal control structure, its
auditing function and its financial reporting process, including the
resolution of material reporting issues. The committee recommends to
the Board of Trustees the appointment of auditors for the trust. It
reviews audit plans, fees and other material arrangements in respect
of the engagement of auditors, including non-audit services to be
performed. It reviews the qualifications of key personnel involved in
the foregoing activities. The committee plays an oversight role in
respect of the trust's investment compliance procedures and the code
of ethics. During the twelve months ended November 30, 1998, the
committee held four meetings.
The trust's Nominating and Administration Committee is currently
composed of Messrs. McDonough (Chairman), Mann , Williams and
E. Bradley Jones (scheduled to retire at the end of 1999) . 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 November 30, 1998, the committee held no 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 each fund for his
or her services for the fiscal year ended November 30, 1998, or
calendar year ended December 31, 1998, as applicable.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
COMPENSATION TABLE
AGGREGATE COMPENSATION FROM Edward C. Johnson 3d** Abigail P. Johnson **,# Ralph F. Cox Phyllis Burke Davis
EACH FUND
Spartan Municipal Income FundB $ 0 $ 0 $ 1,128 $ 1,117
Spartan Connecticut Municipal 0 0 128 127
Income FundB
Spartan Florida Municipal 0 0 155 154
Income FundB
Spartan New Jersey Municipal 0 0 134 133
Income FundB
TOTAL COMPENSATION FROM THE $ 0 $ 0 $ 223,500 $ 220,500
FUND COMPLEX*,A
AGGREGATE COMPENSATION FROM Donald J. Kirk Peter S. Lynch** William O. McCoy Gerald C. McDonough
EACH FUND
Spartan Municipal Income FundB $ 1,154 $ 0 $ 1,134 $ 1,389
Spartan Connecticut Municipal 130 0 129 158
Income FundB
Spartan Florida Municipal 158 0 156 191
Income FundB
Spartan New Jersey Municipal 0 135 166
Income FundB
TOTAL COMPENSATION FROM THE $ 226,500 $ 0 $ 223,500 $ 273,500
FUND COMPLEX*,A
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMPENSATION TABLE
AGGREGATE COMPENSATION FROM Robert M. Gates J. Gary Burkhead ** E. Bradley Jones##
EACH FUND
Spartan Municipal Income FundB $ 1,134 $ 0 $ 1,122
Spartan Connecticut Municipal 129 0 128
Income FundB
Spartan Florida Municipal 156 0 155
Income FundB
Spartan New Jersey Municipal 135 0 134
Income FundB
TOTAL COMPENSATION FROM THE $ 223,500 $ 0 $ 222,000
FUND COMPLEX*,A
AGGREGATE COMPENSATION FROM Marvin L. Mann Robert C. Pozen** Thomas R. Williams
EACH FUND
Spartan Municipal Income FundB $ 1,122 $ 0 $ 1,134
Spartan Connecticut Municipal 127 0 129
Income FundB
Spartan Florida Municipal 153 0 156
Income FundB
Spartan New Jersey Municipal 133 0 135
Income FundB
TOTAL COMPENSATION FROM THE $ 220,500 $ 0 $225,500
FUND COMPLEX*,A
</TABLE>
* Information is for the calendar year ended December 31, 1998 for 230
funds in the complex.
** Interested Trustees of the funds, Ms. Johnson and Mr. Burkhead are
compensated by FMR.
# Effective April 1, 1999, Ms. Johnson serves as a Member of the
Advisory Board of certain trusts, including Fidelity Court Street
Trust.
## E. Bradley Jones is scheduled to retire at the end of 1999.
A Compensation figures include cash, amounts required to be deferred,
and may include amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1998, the Trustees accrued required
deferred compensation from the funds as follows: Ralph F. Cox,
$75,000; Phyllis Burke Davis, $75,000; Robert M. Gates,
$ 75,0 00; E. Bradley Jones, $75,000; Donald J. Kirk, $75,000;
William O. McCoy, $75,000; Gerald C. McDonough, $87,500; Marvin L.
Mann, $75,000; and Thomas R. Williams, $75,000. Certain of the
non-interested Trustees elected voluntarily to defer a portion of
their compensation as follows: Ralph F. Cox, $55,039; Marvin L.
Mann, $5 5,03 9; William O. McCoy, $55,039; and Thomas R.
Williams, $6 3 ,4 33 .
B Compensation figures include cash, and may include amounts required
to be deferred and amounts deferred at the election of Trustees.
Under a deferred compensation plan adopted in September 1995 and
amended in November 1996 (the Plan), non-interested Trustees must
defer receipt of a portion of, and may elect to defer receipt of an
additional portion of, their annual fees. Amounts deferred under the
Plan are subject to vesting and are treated as though equivalent
dollar amounts had been invested in shares of a cross-section of
Fidelity funds including funds in each major investment discipline and
representing a majority of Fidelity's assets under management (the
Reference Funds). The amounts ultimately received by the Trustees
under the Plan will be directly linked to the investment performance
of the Reference Funds. Deferral of fees in accordance with the Plan
will have a negligible effect on a fund's assets, liabilities, and net
income per share, and will not obligate a fund to retain the services
of any Trustee or to pay any particular level of compensation to the
Trustee. A fund may invest in the Reference Funds under the Plan
without shareholder approval.
2. TO RATIFY THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS
INDEPENDENT ACCOUNTANTS OF THE FUNDS.
By a vote of the non-interested Trustees, the firm of
PricewaterhouseCoopers LLP has been selected as independent
accountants for each fund to sign or certify any financial statements
of each fund required by any law or regulation to be certified by an
independent accountant and filed with the Securities and Exchange
Commission (SEC) or any state. Pursuant to the 1940 Act, such
selection requires the ratification of shareholders. In addition, as
required by the 1940 Act, the vote of the Trustees is subject to the
right of each fund, by vote of a majority of its outstanding voting
securities at any meeting called for the purpose of voting on such
action, to terminate such employment without penalty.
PricewaterhouseCoopers LLP has advised each fund that to the best of
its knowledge and belief, as of the record date, no
PricewaterhouseCoopers LLP professional had any direct or material
indirect ownership interest in each fund, inconsistent with the
independence standards pertaining to accountants.
The independent accountants examine annual financial statements for
the funds and provide other audit and tax-related services. In
recommending the selection of each fund's accountants, the Audit
Committee reviewed the nature and scope of the services to be provided
(including non-audit services) and whether the performance of such
services would affect the accountants' independence. Representatives
of PricewaterhouseCoopers LLP are not expected to be present at the
Meeting, but have been given the opportunity to make a statement if
they so desire and will be available should any matter arise requiring
their presence.
3. TO AUTHORIZE THE TRUSTEES TO ADOPT AN AMENDED AND RESTATED
DECLARATION OF TRUST.
The Board of Trustees has approved and recommends that the
shareholders of the trust authorize them to adopt and execute an
Amended and Restated Declaration of Trust for the trust and the funds
of the trust in the form attached to this Proxy Statement as Exhibit 1
(New Declaration of Trust). The attached New Declaration of Trust has
been marked to show changes from the trust's existing Declaration of
Trust (Current Declaration of Trust). The New Declaration of Trust is
a more modern form of trust instrument for a Massachusetts business
trust, and, going forward, will be used as the standard Declaration of
Trust for all new Fidelity Massachusetts business trusts.
The New Declaration of Trust gives the Trustees more flexibility and,
subject to applicable requirements of the 1940 Act and Massachusetts
law, broader authority to act. This increased flexibility may allow
the Trustees to react more quickly to changes in competitive and
regulatory conditions and, as a consequence, may allow the funds to
operate in a more efficient and economical manner. ADOPTION OF THE NEW
DECLARATION OF TRUST WILL NOT ALTER IN ANY WAY THE TRUSTEES' EXISTING
FIDUCIARY OBLIGATIONS TO ACT WITH DUE CARE AND IN THE SHAREHOLDERS'
INTERESTS. BEFORE UTILIZING ANY NEW FLEXIBILITY THAT THE NEW
DECLARATION OF TRUST MAY AFFORD, THE TRUSTEES MUST FIRST CONSIDER THE
SHAREHOLDERS' INTERESTS AND THEN ACT IN ACCORDANCE WITH SUCH
INTERESTS.
Adoption of the New Declaration of Trust will NOT result in any
changes in the funds' Trustees or officers or in the investment
policies and shareholder services described in the funds' current
prospectuses.
Generally, a majority of the Trustees may amend the Current
Declaration of Trust when authorized by a "majority of the outstanding
voting securities" (as defined in the 1940 Act) of the trust. On
October 16, 1997, the Trustees approved the form of the New
Declaration of Trust. On December 18, 1997, the Board approved several
additional changes to the form of the New Declaration of Trust, which
changes have been incorporated into the form attached to this Proxy
Statement. On September 17, 1998, the Board authorized the submission
of the New Declaration of Trust to the trust's shareholders for their
authorization at this Meeting.
The New Declaration of Trust amends the Current Declaration of Trust
in a number of significant ways. The following discussion summarizes
some of the more significant amendments to the Current Declaration of
Trust effected by the New Declaration of Trust.
IN ADDITION TO THE CHANGES DESCRIBED BELOW, THERE ARE OTHER
SUBSTANTIVE AND STYLISTIC DIFFERENCES BETWEEN THE NEW DECLARATION OF
TRUST AND THE CURRENT DECLARATION OF TRUST. THE FOLLOWING SUMMARY IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE NEW DECLARATION OF TRUST
ITSELF, WHICH IS ATTACHED AS EXHIBIT 1 TO THIS PROXY STATEMENT.
SIGNIFICANT CHANGES EFFECTED BY THE NEW DECLARATION OF TRUST.
REORGANIZATION OR TERMINATION OF THE TRUST OR ITS SERIES. Unlike the
Current Declaration of Trust, the New Declaration of Trust generally
permits the Trustees, subject to applicable Federal and state law, to
reorganize or terminate the trust or any of its series. The Current
Declaration of Trust requires shareholder approval in order to
reorganize or terminate the trust or any of its series.
Under certain circumstances, it may not be in the shareholders'
interest to require a shareholder meeting to permit the trust or a
fund to reorganize into another entity. For example, in order to
reduce the cost and scope of state regulatory constraints or to take
advantage of a more favorable tax treatment offered by another state,
the Trustees may determine that it would be in the shareholders'
interests to reorganize a fund to domicile it in another state or to
change its legal form. Under the Current Declaration of Trust, the
Trustees cannot effectuate such a potentially beneficial
reorganization without first conducting a shareholder meeting and
incurring the attendant costs and delays. In contrast, the New
Declaration of Trust gives the Trustees the flexibility to reorganize
the trust or any of its series and achieve potential shareholder
benefits without incurring the delay and potential costs of a proxy
solicitation. Such flexibility should help to assure that the trust
and its funds operate under the most appropriate form of organization.
Similarly, under certain circumstances, it may not be in the
shareholders' interest to require a shareholder meeting to permit the
Trustees to terminate a fund. For example, a fund may have
insufficient assets to invest effectively or excessively high expense
levels due to operational needs. Under such circumstances, absent
viable alternatives, the Trustees may determine that terminating the
fund is in the shareholders' interest and the only appropriate course
of action. The process of obtaining shareholder approval of the fund's
termination may, however, make it more difficult to complete the
fund's liquidation and termination and, in general, will increase the
costs associated with the termination. In such a case, it may be in
the shareholders' interest to permit fund termination without
incurring the costs and delays of a shareholder meeting.
As discussed above, before allowing a trust or fund reorganization or
termination to proceed without shareholder approval, the Trustees have
a fiduciary responsibility to first determine that the proposed
transaction is in the shareholders' interest. Any exercise of the
Trustees' increased authority under the New Declaration of Trust is
also subject to any applicable requirements of the 1940 Act and
Massachusetts law. Of course, in all cases, the New Declaration of
Trust would require that shareholders receive written notification of
any proposed transaction.
The New Declaration of Trust does NOT give the Trustees the authority
to merge a fund with another operating mutual fund or sell all of a
fund's assets to another operating mutual fund without first seeking
shareholder approval. Under the New Declaration of Trust, shareholder
approval is still required for these transactions.
FUTURE AMENDMENTS OF THE DECLARATION OF TRUST. The New Declaration of
Trust permits the Trustees, with certain exceptions, to amend the
Declaration of Trust without shareholder approval. Under the New
Declaration of Trust, shareholders generally have the right to vote on
any amendment affecting their right to vote, on any amendment altering
the maximum number of permitted Trustees, on any amendment affecting
the New Declaration of Trust's amendment provisions, on any amendment
required by law or the trust's registration statement, and on any
matter submitted to shareholders by the Trustees. The Current
Declaration of Trust, on the other hand, generally gives shareholders
the exclusive power to amend the Declaration of Trust. By allowing
amendment of the Declaration of Trust without shareholder approval,
the New Declaration of Trust gives the Trustees the necessary
authority to react quickly to future contingencies. As mentioned
above, such increased authority remains subordinate to the Trustees'
continuing fiduciary obligations to act with due care and in the
shareholders' interest.
OTHER CHANGES EFFECTED BY THE NEW DECLARATION OF TRUST.
In addition to the significant changes above, the New Declaration of
Trust modifies the Current Declaration of Trust in a number of
important ways, including the following:
1. The New Declaration of Trust modifies the Current Declaration of
Trust to allow FMR and the trust, on behalf of each fund, to amend the
fund's respective Management Contract subject to the provisions of
Section 15 of the 1940 Act, as modified or interpreted by the SEC. In
contrast, the Current Declaration of Trust explicitly requires the
vote of a majority of the outstanding voting securities of a fund to
authorize all such amendments. A corresponding change is also proposed
for the funds' Management Contracts. For more information on this
topic generally, see "Modification of Management Contract Amendment
Provisions" on pages 26 and 32 .
2. The New Declaration of Trust clarifies that the Trustees may
impose other fees (for example, purchase fees) in addition to sales
charges upon investment in a fund and clarifies that deferred sales
charges and other fees (for example, redemption fees) may be imposed
upon redemption of a fund's shares.
3. The New Declaration of Trust confirms and clarifies various
existing Trustee powers. For example, the New Declaration of Trust
clarifies that the Trustees, in addition to banks and trust companies,
may employ as fund custodians companies that are members of a national
securities exchange or other entities permitted under the 1940 Act;
delegate authority to investment advisers and other agents; adopt and
offer dividend reinvestment and related plans; operate and carry on
the business of an investment company; and interpret the investment
policies, practices, and limitations of any fund.
4. The New Declaration of Trust clarifies that no shareholder of a
trust series shall have a claim on the assets of another series and
further clarifies that, by virtue of investing in a fund, a
shareholder is deemed to have assented to and agreed to be bound by
the terms of the New Declaration of Trust.
5. The New Declaration of Trust deletes various technical and/or
antiquated requirements from the Current Declaration of Trust,
including existing requirements that a Trustee vacancy be deemed to
occur when a Trustee is absent from his or her state of residence,
that Trustee vacancies must be filled within six calendar months, and
that portfolio securities be held pursuant to safeguards prescribed by
usual Massachusetts practice.
6. As a general matter, the New Declaration of Trust modifies the
Current Declaration of Trust to incorporate appropriate references to
classes of shares.
7. Lastly, the New Declaration of Trust generally expands various
1940 Act defined terms to encompass SEC modifications and
interpretations. Specific references to discrete sections of the 1940
Act that are contained in the New Declaration of Trust have likewise
been expanded to include SEC modifications and interpretations.
CONCLUSION. The Board of Trustees has concluded that the proposed
adoption of the New Declaration of Trust is in the best interests of
the trust's shareholders. Accordingly, the Trustees unanimously
recommend that the shareholders vote FOR the proposal to authorize
them to adopt and execute the New Declaration of Trust. If the
proposal is not approved, the Current Declaration of Trust will remain
unchanged and in effect.
4. TO APPROVE AN AMENDED MANAGEMENT CONTRACT FOR SPARTAN MUNICIPAL
INCOME FUND.
The Board of Trustees, including the Trustees who are not "interested
persons" of the Trust or of FMR (the Independent Trustees), has
approved, and recommends that shareholders of the fund approve, a
proposal to adopt an amended management contract with FMR (the Amended
Contract). The Amended Contract modifies the management fee that FMR
receives from the fund to provide for lower fees when FMR's assets
under management exceed certain levels. In addition, the Amended
Contract allows FMR and the trust, on behalf of the fund, to modify
the Management Contract subject to the requirements of the 1940 Act.
The existing Management Contract (Present Contract) currently requires
the vote of a majority of the fund's outstanding voting securities to
authorize all amendments. See "Modification of Management Contract
Amendment Provisions" on page 26 for more details. THE AMENDED
CONTRACT WILL RESULT IN A MANAGEMENT FEE THAT IS THE SAME AS, OR LOWER
THAN, THE FEE PAYABLE UNDER THE PRESENT CONTRACT. (For information on
FMR, see the section entitled "Activities and Management of FMR" on
page .)
PROPOSED AMENDMENT(S) TO THE PRESENT MANAGEMENT CONTRACT. A copy of
the Amended Contract, marked to indicate the proposed amendment(s), is
supplied as Exhibit 2 on page 50 . 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 of Spartan Municipal Income Fund " beginning on page
37 .) If approved by shareholders, the Amended Contract will
take effect on January 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 Group Fee
Rate by providing for lower fee rates if FMR's assets under management
remain above $408 billion.
MODIFICATION TO GROUP FEE RATE. The Group Fee Rate varies based upon
the monthly average of the aggregate net assets of all registered
investment companies having management contracts with FMR (assets
under management by FMR). For example, as assets under management by
FMR increase, the Group Fee Rate declines. The Amended Contract would
not change the group fee calculation for assets under management by
FMR of $408 billion or less. Above $408 billion in assets under FMR's
management, the Group Fee Rate declines under both the Present
Contract and the Amended 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 January 1, 1996.
The Group Fee Rate is calculated according to a graduated schedule
providing for different rates for different levels of assets under
management by FMR. The rate at which the Group Fee Rate declines is
determined by fee "breakpoints" that provide for lower fee rates when
assets increase. The Amended Contract adds four new fee breakpoints
for assets under FMR's management above $408 billion as illustrated in
the following table. (For an explanation of how the Group Fee Rate is
used to calculate the management fee, see the section entitled
"Present Management Contract of Spartan Municipal Income Fund "
beginning on page .)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
GROUP FEE RATE BREAKPOINTS
PRESENT CONTRACT AMENDED CONTRACT
Average Group Assets ($ Present Contract* Average Group Assets ($ Amended Contract
billions) billions)
Over 372 .1200% 372 - 408 .1200%
408 - 444 .1175%
444 - 480 .1150%
480 - 516 .1125%
Over 516 .1100%
</TABLE>
The result at various levels of group net assets is illustrated by the
table below.
EFFECTIVE ANNUAL GROUP FEE RATES
Group Net Assets ($ billions) Present Contract* Amended Contract
150 .1736% .1736%
200 .1652% .1652%
250 .1587% .1587%
300 .1536% .1536%
350 .1494% .1494%
400 .1459% .1459%
450 .1430% .1427%
500 .1407% .1399%
550 .1388% .1372%
* Does not reflect voluntary adoption of extended group fee rate
schedules by FMR on January 1, 1996.
Average assets under FMR's management for August 1999 were
approximately $7 63 billion.
COMPARISON OF MANAGEMENT FEES. For the month ended August
1999, average assets under management by FMR were approximately
$7 63 billion. The fund's management fee rate under the Amended
Contract, for the month ended August , 1999, would have been
.379 6 %, compared to .383 6 % under the Present Contract.
The management fee rate remains the same under both the Present
Contract and the Amended Contract until assets under FMR's management
exceed $408 billion, at which point the management fee rate under the
Amended Contract begins to decline relative to the Present Contract.
The following chart compare the fund's management fee as calculated
under the terms of the Present Contract for the fiscal year ended
November, 1998 to the management fee the fund would have incurred if
the Amended Contract had been in effect.
<TABLE>
<CAPTION>
<S> <C> <C>
Present Contract Management Amended Contract Management Fee Percentage Difference
Fee*
$ 11,372,000 $ 11,303,000 (0.61%)
</TABLE>
* Does not reflect voluntary adoption of extended group fee rate
schedules by FMR on January 1, 1996.
The following chart compares the fund's management fee under the
terms of the Present Contract for the twelve month period ended August
31, 1999 to the management fee the fund would have incurred if the
Amended Contract had been in effect.
<TABLE>
<CAPTION>
<S> <C> <C>
Present Contract Management Amended Contract Management Fee Percentage Difference
Fee*
$ 17,646,000 $ 17,492,000 (0.87%)
</TABLE>
* Does not reflect voluntary adoption of extended group fee rate
schedules by FMR on January 1, 1996.
MODIFICATION OF MANAGEMENT CONTRACT AMENDMENT PROVISIONS. The Amended
Contract allows FMR and the Trust, on behalf of the fund, to amend the
Management Contract subject to the provisions of Section 15 of the
1940 Act, as modified or interpreted by the Securities and Exchange
Commission. In contrast, the Present Contract explicitly requires the
vote of a majority of the outstanding voting securities of the fund to
authorize all amendments. Generally, the proposed modification to the
Present Contract's amendment provisions will allow FMR and the Trust,
on behalf of the fund, to amend the Management Contract without
shareholder vote IF THE 1940 ACT PERMITS THEM TO DO SO. For example,
under current interpretations of Section 15 of the 1940 Act, the
Amended Contract would give FMR and the Trust the ability to amend the
Management Contract to immediately reflect a management fee decrease
without the delay of having to first conduct a proxy solicitation. In
short, the proposed modification gives FMR and the Trust added
flexibility to amend the Management Contract subject to 1940 Act
constraints. Of course, any future amendments to the Management
Contract would require the approval of the fund's Board of Trustees.
MATTERS CONSIDERED BY THE BOARD
The mutual funds for which the members of the Board of Trustees serve
as Trustees are referred to herein as the "Fidelity funds." The Board
of Trustees meets eleven times a year. The Board of Trustees,
including the Independent Trustees, believe that matters bearing on
the appropriateness of the fund's management fees are considered at
most, if not all, of their meetings. While the full Board of Trustees
or the Independent Trustees, as appropriate, act on all major matters,
a significant portion of the activities of the Board of Trustees
(including certain of those described herein) 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 September 17, 1998. The Board of Trustees
considered and approved the modifications to the Group Fee Rate
schedule during the two month period(s) from November to December
1995. The Board of Trustees received materials relating to the Amended
Contract in advance of the meeting at which the Amended Contract was
considered, and had the opportunity to ask questions and request
further information in connection with such consideration.
INFORMATION RECEIVED BY THE INDEPENDENT TRUSTEES. In connection with
their 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 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 MANAGEMENT CONTRACT, INCLUDING A MANAGEMENT
FEE STRUCTURE CHANGE, FOR SPARTAN CONNECTICUT MUNICIPAL INCOME
FUND, SPARTAN FLORIDA MUNICIPAL INCOME FUND, AND SPARTAN NEW JERSEY
MUNICIPAL INCOME FUND.
The Board of Trustees, including the Trustees who are not "interested
persons" of the trust or of FMR (the Independent Trustees), has
approved, and recommends that shareholders of the funds approve, a
proposal to adopt an amended management contract with FMR (the Amended
Contract). The Amended Contract changes each fund's current
"all-inclusive" management fee arrangement to a "group fee"
arrangement that is standard for other Fidelity municipal bond funds.
The change in each fund's management fee structure is discussed in
more detail below. In addition, the Amended Contract allows FMR and
the trust, on behalf of each fund, to modify the Management Contract
subject to the requirements of the 1940 Act. The existing Management
Contract currently requires the vote of a majority of each fund's
outstanding voting securities to authorize all amendments. See
"Modification of Management Contract Amendment Provisions" on page
35 for more details.
MODIFICATION OF MANAGEMENT FEE STRUCTURE. The proposed management fee
structure differs significantly from the funds' current management fee
structure. Under the terms of each fund's existing management contract
(Present Contract), the funds pay an all-inclusive management fee to
FMR that covers substantially all fund expenses. Specifically, under
the Present Contract, FMR pays each fund's operating expenses, with
limited exceptions. In contrast, under the terms of the Amended
Contract, each fund would pay its management fee and other expenses
separately. FMR would no longer pay the funds' other expenses.
If approved, the proposed group fee structure will result in a lower
management fee. Under the proposed group fee structure, each fund's
total operating expense ratio may, however, exceed its current rate of
0.55%. If the Amended Contract is approved, FMR has voluntarily agreed
to limit each fund's total operating expense ratio to 0.53% of each
fund's average net assets through December 31, 2000. See "Comparison
of Management Fees and Total Expenses" on page 32 for more
detailed information on the financial effects of changing to the
proposed group fee structure.
Each fund's current management fee is an annual percentage of each
fund's average net assets and is calculated and paid monthly. Under
the Present Contract, each fund pays FMR a management fee at an annual
rate of 0.55% of each fund's average daily net assets. Under the terms
of the Present Contract, FMR not only provides the funds with
investment advisory and research services, but also pays all of the
funds' expenses, with the exception of fees and expenses of all
Trustees of the trust who are not "interested persons" of the trust or
FMR; interest on borrowings; taxes; brokerage fees and commissions;
and such non-recurring expenses as may arise, including costs of any
litigation to which the funds may be a party, and any obligation it
may have to indemnify the officers and Trustees with respect to
litigation. The management fee that the funds pay FMR is reduced by an
amount equal to the fees and expenses paid by each fund to the
non-interested Trustees.
The Amended Contract would replace each fund's existing all-inclusive
management fee structure with a group fee structure that is standard
for other Fidelity municipal bond funds. Under the terms of the
Amended Contract, each fund would pay a management fee as well as its
other expenses.
Under the Amended Contract, each fund's management fee would be
calculated by adding a Group Fee Rate to an Individual Fund Fee Rate
and multiplying the result by each fund's average net assets. The
Group Fee Rate varies based upon the monthly average of the 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
Individual Fund Fee Rate is a fixed rate specific to each fund. Under
the Amended Contract, each fund's Individual Fund Fee Rate would equal
0.25%.
Each fund's proposed Group Fee Rate would be calculated according to
the graduated schedule below. The schedule provides for different fee
rates for different levels of assets under management by FMR. As
illustrated in the table, the rate at which the Group Fee Rate
declines is determined by fee "breakpoints" that provide for lower fee
rates when the total assets managed by FMR increase.
GROUP FEE RATE SCHEDULE
Average Group Assets Annualized Rate
0 - $3 billion .3700%
3 - 6 .3400
6 - 9 .3100
9 - 12 .2800
12 - 15 .2500
15 - 18 .2200
18 - 21 .2000
21 - 24 .1900
24 - 30 .1800
30 - 36 .1750
36 - 42 .1700
42 - 48 .1650
48 - 66 .1600
66 - 84 .1550
84 - 120 .1500
120 - 156 .1450
156 - 192 .1400
192 - 228 .1350
228 - 264 .1300
264 - 300 .1275
300 - 336 .1250
336 - 372 .1225
372 - 408 .1200
408 - 444 .1175
444 - 480 .1150
480 - 516 .1125
Over 516 .1100
Average assets under management by FMR for August 1999 were
approximately $7 63 billion.
Under the Amended Contract, in addition to the management fee, the
funds will pay all of their other operating expenses, including (i)
interest and taxes; (ii) brokerage commissions and other costs in
connection with the purchase or sale of securities and other
investment instruments; (iii) fees and expenses of the Trustees other
than those who are "interested persons" of the trust or FMR; (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 each fund's shares for distribution
under state and federal securities laws; (vii) expenses of printing
and mailing reports and notices and proxy material to shareholders;
(viii) all other expenses incidental to holding meetings of
shareholders, including proxy solicitations; (ix) a pro rata share,
based on relative net assets of each fund and other registered
investment companies having Advisory and Service or Management
Contracts with FMR, 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 each fund is a party and the legal obligation
which each fund may have to indemnify the Trustees and officers with
respect thereto.
Lastly, under each fund's current all-inclusive management fee
arrangement, shareholders currently have the right to vote on any
expense increases over 0.55% of average net assets. Under the Amended
Contract, shareholders would also have the right to vote on any
increases in FMR's management fee; however, because the management fee
would not be all-inclusive, shareholders would not have the right to
vote on other expense increases.
COMPARISON OF MANAGEMENT FEES AND TOTAL EXPENSES. As indicated below,
if the Amended Contract is approved, each fund's management fee will
decrease; although each fund's total operating expense ratio may
increase. If the Amended Contract is approved, FMR has voluntarily
agreed to limit each fund's total operating expense ratio to 0.53% of
its average net assets through December 31, 2000 (excluding interest,
taxes, brokerage commissions and extraordinary expenses). After
December 31, 2000, each fund's total operating expense ratio could
increase and could exceed the fund's current 0.55% all-inclusive
management fee. However, at the level of assets under management by
FMR for August 1999 ($7 63 billion), changing from the
funds' current 0.55% all-inclusive management fee rate to the proposed
group fee structure (without any expense reimbursement) would result
in an estimated total operating expense ratio for Spartan
Connecticut Municipal Income Fund, Spartan Florida Municipal Income
Fund and Spartan New Jersey Municipal Income Fund of 0.52%, 0.52% and
0.53%, respectively .
The following charts compare each fund's management fee under the
terms of it s Present Contract for the fiscal year ended
November 30, 1998, to the management fee that each fund would have
incurred under the Amended Contract if it had been in effect during
that period.
<TABLE>
<CAPTION>
<S> <C> <C>
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
Present Contract Management Amended Contract Management Percentage Difference*
Fee* Fee*
$1,957,880 $1,369,370 (30.06%)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SPARTAN FLORIDA MUNICIPAL INCOME FUND
Present Contract Management Amended Contract Management Percentage Difference*
Fee* Fee*
$2,370,588 $1,658,027 (30.06%)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SPARTAN NEW JERSEY MUNICIPAL INCOME FUND
Present Contract Management Amended Contract Management Percentage Difference*
Fee* Fee*
$2,054,831 $1,437,183 (30.06%)
</TABLE>
* Under the Present Contract, FMR pays substantially all fund expenses
from the 0.55% management fee it receives from each fund. Under the
Amended Contract, FMR is not responsible for paying each fund's
expenses; each fund pays its operating expenses separately from the
management fee. See "Modification of Management Fee Structure" on page
for more details.
The following charts compare each fund's management fee under the
terms of the Present Contracts for the twelve month period ended
August 31, 1999, to the management fee that each fund would
have incurred under the Amended Contract if it had been in effect
during that period.
<TABLE>
<CAPTION>
<S> <C> <C>
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
Present Contract Management Amended Contract Management Percentage Difference*
Fee* Fee*
$2,038,046 $1,413,701 (30.63%)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SPARTAN FLORIDA MUNICIPAL INCOME FUND
Present Contract Management Amended Contract Management Percentage Difference*
Fee* Fee*
$2,447,864 $1,698,010 (30.63%)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SPARTAN NEW JERSEY MUNICIPAL INCOME FUND
Present Contract Management Amended Contract Management Percentage Difference*
Fee* Fee*
$2,177,900 $1,510,544 (30.64%)
</TABLE>
* Under the Present Contract, FMR pays substantially all fund expenses
from the 0.55% management fee it receives from each fund. Under the
Amended Contract, FMR is not responsible for paying each fund's
expenses; the funds pay their operating expenses separately from the
management fee. See "Modification of Management Fee Structure" on page
for more details.
COMPARATIVE EXPENSE TABLE
The following tables provide data concerning each fund's management
fees and expenses as a percentage of average net assets for the 12
month period ended May 3 1 , 199 9 under the
Present Contract and if the Amended Contract had been in effect during
the same period.
The following figures are based on historical expenses adjusted to
reflect current fees and are calculated as a percentage of average net
assets.
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
Present Contract* Amended Contract*
Management Fee 0.55% 0.38%
Rule 12b-1 Fee none none
Other Expenses 0.00% 0.14%
Total Operating Expenses 0.55% 0.52%
SPARTAN FLORIDA MUNICIPAL INCOME FUND
Present Contract* Amended Contract*
Management Fee 0.55% 0.38%
Rule 12b-1 Fee none none
Other Expenses 0.00% 0.14%
Total Operating Expenses 0.55% 0.52%
SPARTAN NEW JERSEY MUNICIPAL INCOME FUND
Present Contract* Amended Contract*
Management Fee 0.55% 0.38%
Rule 12b-1 Fee none none
Other Expenses 0.00% 0.15%
Total Operating Expenses 0.55% 0.53%
* Under the Present Contract, FMR pays substantially all fund expenses
from the 0.55% management fee it receives from the funds. Under the
Amended Contract, FMR is not responsible for paying the funds'
expenses; each fund pays its operating expenses separately from the
management fee. See "Modification of Management Fee Structure" on page
for more details.
EXAMPLE: The following illustrates the expenses on a $10,000
investment under the fees and expenses stated above, assuming (1) 5%
annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Present Contract Amended Contract
1 Year 3 Years 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
Spartan Connecticut Municipal $ 56 $ 176 $ 307 $ 689 $ 53 $ 167 $ 291 $ 653
Income Fund
Spartan Florida Municipal $ 56 $ 176 $ 307 $ 689 $ 53 $ 167 $ 291 $ 653
Income Fund
Spartan New Jersey Municipal $ 56 $ 176 $ 307 $ 689 $ 54 $ 170 $ 296 $ 665
Income Fund
</TABLE>
The purpose of this example and the table is to assist investors in
understanding the various costs and expenses of investing in shares of
the funds. The example above should not be considered a representation
of past or future expenses of the funds. Actual expenses may vary from
year to year and may be higher or lower than those shown above.
MODIFICATION OF MANAGEMENT CONTRACT AMENDMENT PROVISIONS. The Amended
Contract allows FMR and the Trust, on behalf of each fund, to amend
each fund's 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 each 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 each 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 each fund's 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 each fund's
Management Contract subject to 1940 Act constraints. Of course, any
future amendments to each fund's Management Contract would require the
approval of each fund's Board of Trustees.
EFFECTIVE DATE OF AMENDED CONTRACT. If approved by shareholders, each
Amended Contract will take effect on January 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, or the vote 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 each fund. If
Amended Contract is not approved, each 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.
C op ies of the form of Amended Contract, marked to
indicate the proposed amendments, are supplied as Exhibit
3 on page 58 (Spartan Connecticut Municipal Income Fund),
Exhibit 4 on page 61 (Spartan Florida Municipal Income Fund), and
Exhibit 5 on page 64 (Spartan New Jersey Municipal Income Fund).
Except for the material modifications discussed in this proposal,
each Amended Contract is substantially the same as each Present
Contracts. (For a detailed discussion of each fund's Present Contract,
refer to the section entitled "Present Management Contract s of
Spartan Connecticut Municipal Income Fund, Spartan Florida Municipal
Income Fund and Spartan New Jersey Municipal Income Fund "
b eginning on page 45 . )
MATTERS CONSIDERED BY THE BOARD
The mutual funds for which the members of the Board of Trustees serve
as Trustees are referred to herein as the "Fidelity funds." The Board
of Trustees meets eleven times a year. The Board of Trustees,
including the Independent Trustees, believe that matters bearing on
the appropriateness of each fund's management fees are considered at
most, if not all, of their meetings. While the full Board of Trustees
or the Independent Trustees, as appropriate, act on all major matters,
a significant portion of the activities of the Board of Trustees
(including certain of those described herein) 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 each Amended Contract to shareholders was
approved by the Board of Trustees of the funds, including all of the
Independent Trustees, on September 17, 1998. The Board of Trustees
received materials relating to each Amended Contract in advance of the
meeting at which each 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 each Amended Contract. These materials included (i) information on
the investment performance of the funds, a peer group of funds, and an
appropriate index or combination of indices, (ii) sales and redemption
data in respect of the funds, (iii) the economic outlook and the
general investment outlook in the markets in which the funds invest,
and (iv) notable changes in each fund's investments. The Board of
Trustees and the Independent Trustees also consider periodically other
material facts such as (1) FMR's results and financial condition, (2)
arrangements in respect of the distribution of each fund's shares, (3)
the procedures employed to determine the value of each fund's assets,
(4) the allocation of each fund's brokerage, if any, including
allocations to brokers affiliated with FMR, (5) FMR's management of
the relationships with each fund's custodian and subcustodians, (6)
the resources devoted to and the record of compliance with each fund's
investment policies and restrictions and with policies on personal
securities transactions, and (7) the nature, cost and character of
non-investment management services provided by FMR and its affiliates.
In response to questions raised by the Independent Trustees,
additional information was furnished by FMR including, among other
items, information on and analysis of (a) the overall organization of
FMR, (b) the 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 each fund's shareholders.
In considering each 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 each 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 each
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 each Management Contract without the delays and potential costs
of a proxy solicitation.
INVESTMENT COMPLIANCE AND PERFORMANCE. The Board of Trustees and the
Independent Trustee considered whether each fund has operated within
its investment objective and its record of compliance with its
investment restrictions. They also reviewed monthly each fund's
investment performance as well as the performance of a peer group of
mutual funds, and the performance of an appropriate index or
combination of indices.
FMR'S PERSONNEL AND METHODS. The Board of Trustees and the
Independent Trustees review at least annually the background of each
fund's portfolio manager and each fund's investment objective and
discipline. The Independent Trustees have also had discussions with
senior management of FMR responsible for investment operations and the
senior management of Fidelity's 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 each Present Contract and each
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 each 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 funds. This consideration included
an extensive review of FMR's methodology in allocating its costs to
the management of the funds. 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 funds and whether the amount of
profit is a fair entrepreneurial profit for the management of the
funds. They also considered the profits realized from non-fund
businesses which may benefit from or be related to each fund's
business. The Board of Trustees and the Independent Trustees also
considered FMR's profit margins in comparison with available industry
data, both accounting for and ignoring marketing expenses.
ECONOMIES OF SCALE. The Board of Trustees and the Independent
Trustees considered whether there have been economies of scale in
respect of the management of the Fidelity funds, whether the Fidelity
funds (including the funds) have appropriately benefited from any
economies of scale, and whether there is potential for realization of
any further economies of scale. The Board of Trustees and the
Independent Trustees have concluded that FMR's mutual fund business
presents some limited opportunities to realize economies of scale and
that these economies are being shared between fund shareholders and
FMR in an appropriate manner.
OTHER BENEFITS TO FMR. The Board of Trustees and the Independent
Trustees also considered the character and amount of fees paid by each
fund and each fund's shareholders for services provided by FMR and its
affiliates, including fees for services like transfer agency, fund
accounting and direct shareholder services. They also considered the
allocation of fund brokerage to brokers affiliated with FMR and the
receipt of sales loads and payments under Rule 12b-1 plans in respect
of certain of the Fidelity funds. The Board of Trustees and the
Independent Trustees also considered the revenues and profitability of
FMR businesses other than its mutual fund business, including FMR's
retail brokerage, correspondent brokerage, capital markets, trust,
investment advisory, pension record keeping, insurance, publishing,
real estate, international research and investment funds, and others.
The Board of Trustees and the Independent Trustees considered the
intangible benefits that accrue to FMR and its affiliates by virtue of
their relationship with the funds.
CONCLUSION. Based on their evaluation of all material factors and
assisted by the advice of independent counsel, the Trustees concluded
that the proposed modifications to the management fee structure, that
is the implementation of the Group Fee Rate structure and the proposed
modification to each Present Contract's amendment provisions, are in
the best interest of each fund's shareholders. The Board of Trustees,
including the Independent Trustees, voted to approve the submission of
each Amended Contract to shareholders of each fund and recommends that
shareholders of each fund vote FOR each Amended Contract. If approved,
each Amended Contract will take effect on the first day of the first
month following shareholder approval.
6. TO APPROVE AN AGREEMENT AND PLAN PROVIDING FOR THE REORGANIZATION
OF SPARTAN MUNICIPAL INCOME FUND FROM A SEPARATE SERIES OF ONE
MASSACHUSETTS BUSINESS TRUST TO ANOTHER.
The Board of Trustees has approved an Agreement and Plan of
Reorganization (the Plan of Reorganization) in the form attached to
this Proxy Statement as Exhibit 6 . The Plan of Reorganization
provides for the reorganization of Spartan Municipal Income Fund (the
Fund) from a separate series of Fidelity Court Street Trust (the
Trust), a Massachusetts business trust, to a newly-established,
separate series of Fidelity Municipal Trust (Municipal Trust), also a
Massachusetts business trust (the Reorganization).
The investment objective, policies, and limitations of the Fund will
not change except as approved by shareholders and as described in this
proxy statement. A separate series of Municipal Trust will carry on
the business of the Fund following the Reorganization (the Series).
The Series, which has not yet commenced business operations, will have
an investment objective, policies, and limitations identical to those
of the Fund (except as they may be modified pursuant to a vote of the
shareholders as proposed in this proxy statement; see proposals 7 and
12).
Both the Trust and Municipal Trust are Massachusetts business trusts.
The Trust is presently seeking shareholder authorization to adopt the
form of New Declaration of Trust that is described in Proposal 3 in
this Proxy Statement. Municipal Trust has already adopted the form of
New Declaration of Trust. If the Trust adopts the New Declaration of
Trust, the rights of the Fund's shareholders under state law and the
Fund's governing documents would be unaffected by the Reorganization.
If the Trust does not adopt the New Declaration of Trust, the rights
of the Fund's shareholders after the Reorganization under Municipal
Trust's Declaration of Trust would differ from the rights that the
shareholders currently enjoy under the Trust's existing Declaration of
Trust. The differences between the Trust's existing Declaration of
Trust and the form of New Declaration of Trust are discussed in
Proposal 3.
The Reorganization will not affect the operation of the Fund in a
material manner. The same individuals serve as Trustees of both
trusts. Both trusts are authorized to issue an unlimited number of
shares of beneficial interest, and each Declaration of Trust permits
the Trustees to create one or more additional series or funds.
In connection with the Reorganization, the Fund's fiscal year end
will change from November to December, effective December 2000. The
Trustees may change the fiscal year end of the Fund at their
discretion in the future.
FMR, the Fund's investment adviser, will be responsible for the
investment management of the Series, subject to the supervision of the
Board of Trustees, under a management contract substantively identical
to the contract in effect between FMR and the Fund immediately prior
to the Closing Date (including as it may be modified pursuant to a
vote of shareholders of the Fund as proposed in the Proxy
Statement)(the New Management Contract) . S imilarly, Fidelity
Investments Money Management, Inc., (FIMM), the Fund's sub-adviser,
will have primary responsibility for providing portfolio investment
advisory services to the Series under a Sub-Advisory Agreement
substantively identical to the agreement in effect between FIMM (the
successor to FMR Texas Inc.) and FMR immediately prior to the Closing
Date (the New Sub-Advisory Agreement).
The Fund's distribution agent, Fidelity Distributors Corporation
(FDC) will distribute shares of the Series under a General
Distribution Agreement substantively identical to the contract in
effect between FDC and the Fund immediately prior to the Closing Date.
REASON FOR THE PROPOSED REORGANIZATION. The Fund is presently
organized as a series of the Trust, which has four series of shares or
funds. The Board of Trustees unanimously recommend s
reorganization of the Fund to a separate series of Municipal Trust
(i.e., into the Series), which will succeed to the business of the
Fund. Moving the Fund from the Trust to Municipal Trust will
consolidate and streamline the production and mailing of certain
financial reports and legal documents. THE PROPOSED CHANGE WILL HAVE
NO MATERIAL EFFECT ON SHAREHOLDERS OR THE MANAGEMENT OF THE FUND.
The proposal to present the Plan of Reorganization to shareholders
was approved by the Board of Trustees of the Trust, including all of
the Trustees who are not interested persons of FMR, on September 17,
1998. The Board of Trustees recommend s that Fund shareholders
vote FOR the approval of the Plan of Reorganization described below.
Such a vote encompasses approval of the reorganization of the Fund to
a separate series of Municipal Trust; temporary waiver of certain
investment limitations of the Fund to permit the Reorganization (see
"Temporary Waiver of Investment Restrictions" on page 42 ); and
authorization of the Trust, as sole shareholder of the Series, to
approve (i) the New Management Contract; (ii) the New Sub-Advisory
Agreement; and (iii) the Distribution and Service Plan for the Series
under Rule 12b-1, substantively identical to the Plan in effect with
respect to the Fund immediately prior to the Closing Date (the New
Plan). If shareholders of the Fund do not approve the Plan of
Reorganization, the Fund will continue to operate as a series of the
Trust.
SUMMARY OF THE PLAN OF REORGANIZATION. The following discussion
summarizes the important terms of the Plan of Reorganization. This
summary is qualified in its entirety by reference to the Plan of
Reorganization itself.
On the Closing Date (defined below) of the Reorganization, the Fund
will transfer all of its assets to the Series, a series of shares of
Municipal Trust established for the purpose of effecting the
Reorganization, in exchange for the assumption by the Series of all of
the liabilities of the Fund and the issuance of shares of beneficial
interest in the Series (Series Shares) equal to the number of Fund
shares outstanding on the Closing Date. Immediately thereafter, the
Fund will distribute one Series Share for each Fund share (the Fund
Shares) held by the shareholder on the Closing Date to each Fund
shareholder, in exchange for such Fund Shares. Immediately after this
distribution of the Series Shares, the Fund will be terminated and, as
soon as practicable thereafter, will be wound up and liquidated. UPON
COMPLETION OF THE REORGANIZATION, EACH FUND SHAREHOLDER WILL BE THE
OWNER OF FULL AND FRACTIONAL SERIES SHARES EQUAL IN NUMBER,
DENOMINATION, AND AGGREGATE NET ASSET VALUE TO HIS OR HER FUND SHARES.
The Plan of Reorganization authorizes the Trust as the sole initial
shareholder of the Series to approve (i) the New Management Contract ,
(ii) the New Sub-Advisory Agreement, and (iii) the New Plan.
Municipal Trust's Board of Trustees will hold office without time
limits, except that (a) any Trustee may resign; (b) any Trustee may be
removed by written instrument signed by at least two-thirds of the
number of Trustees prior to removal; (c) any Trustee who requests to
be retired by written instrument signed by a majority of the other
Trustees or who is unable to serve due to physical or mental
incapacity by reason of disease or otherwise, death, or for any other
reason, may be retired; and (d) a Trustee may be removed at any
Special Meeting of the shareholders by a vote of two-thirds of the
outstanding shares of Municipal Trust. In case a vacancy shall for any
reason exist, the remaining Trustees will fill such vacancy by
appointing another Trustee, so long as, immediately after such
appointment, at least two-thirds of the Trustees have been elected by
shareholders. If, at any time, less than a majority of the Trustees
holding office has been elected by shareholders, the Trustees then in
office will promptly call a shareholders' meeting for the purpose of
electing a Board of Trustees. Otherwise, there will normally be no
meeting of shareholders for the purpose of electing Trustees.
The New Management Contract, the New Sub-Advisory Agreement, and the
New Plan will take effect on the Closing Date. The New Management
Contract and the New Sub-Advisory Agreement will continue in force
until June 30, 2000. The New Plan will continue in force until April
30, 2000. The New Sub-Advisory Agreement and the New Management
Contract will continue in force thereafter from year to year so long
as their continuance is approved at least annually by (i) the vote of
a majority of the Trustees who are not "interested persons" of
Municipal Trust, FMR, or, in the case of the agreement, FIMM, cast in
person at a meeting called for the purpose of voting on such approval,
and (ii) by the vote of a majority of the Trustees or by the vote of a
majority of the outstanding shares of the Series. The New Plan will
continue in effect only if approved annually by a vote of the Trustees
and of those Trustees who are not interested persons, cast in person
at a meeting called for that purpose. The New Management Contract and
the New Sub-Advisory Agreement will be terminable without penalty on
sixty days' written notice either by Municipal Trust, FMR, or FIMM, as
the case may be, and will terminate automatically in the event of its
assignment. The New Plan may be terminable at any time, without the
payment of any penalty, by a vote of a majority of the Independent
Trustees or by a vote of a majority of the outstanding voting
securities of the fund.
Assuming the Plan of Reorganization is approved, it is currently
contemplated that the Reorganization will become effective at the
close of business on February 23, 2000 (the Closing Date). However,
the Reorganization may become effective at such other date as the
parties may agree in writing.
The obligations of the Trust and Municipal Trust under the Plan of
Reorganization are subject to various conditions as stated therein.
Notwithstanding the approval of the Plan of Reorganization by Fund
shareholders, the Plan of Reorganization may be terminated or amended
at any time prior to the Reorganization by action of the Trustees to
provide against unforeseen events, if (1) there is a material breach
by the other party of any representation, warranty, or agreement
contained in the Plan of Reorganization to be performed at or prior to
the Closing Date or (2) it reasonably appears that a party will not or
cannot meet a condition of the Plan of Reorganization. Generally,
either party may at any time waive the other party's compliance with
any of the covenants and conditions contained in, or both parties may
amend, the Plan of Reorganization, provided that such waiver or
amendment does not materially adversely affect the interests of Fund
shareholders.
CONTINUATION OF FUND SHAREHOLDER ACCOUNTS AND PLANS. Municipal
Trust's transfer agent will establish an account for the Series'
shareholders containing the appropriate number and denominations of
Series Shares to be received by each holder of Fund Shares under the
Plan of Reorganization. Such accounts will be identical in all
material respects to the accounts currently maintained by the Fund's
transfer agent for the Fund's shareholders. Fund shareholders who are
receiving payment under a withdrawal plan with respect to Fund Shares
will retain the same rights and privileges as to Series Shares under
the Plan of Reorganization. Similarly, no further action will be
necessary in order to continue any automatic investment plan or
retirement plan currently maintained by a Fund shareholder with
respect to Fund Shares.
EXPENSES. The Fund and the Series shall each be responsible for all
of their respective expenses of the Reorganization, estimated a t
$8,000 in the aggregate, provided that they do not exceed the
fund's expense cap of 0.53%. Expenses exceeding the fund's expense
cap, as applicable, will be paid by FMR.
TEMPORARY WAIVER OF INVESTMENT RESTRICTIONS. Certain fundamental
investment restrictions of the Fund, which prohibit the Fund from
acquiring more than a stated percentage of ownership of another
company, might be construed as restricting the Fund's ability to carry
out the Reorganization. By approving the Plan of Reorganization, Fund
shareholders will be agreeing to waive, only for the purpose of the
Reorganization, those fundamental investment restrictions that could
prohibit or otherwise impede the transaction.
TAX CONSEQUENCES OF THE REORGANIZATION. Each trust will receive an
opinion from their counsel, Kirkpatrick & Lockhart LLP, that the
Reorganization will constitute a tax-free reorganization within the
meaning of Section 368(a)(1)(F) of the Internal Revenue Code of 1986,
as amended. Accordingly, no gain or loss will be recognized for
federal income tax purposes by the Fund, the Series, or the Fund's
shareholders upon (1) the transfer of the Fund's assets in exchange
solely for the Series Shares and the assumption by the Trust on behalf
of the Series of the Fund's liabilities or (2) the distribution of
Series Shares to the Fund's shareholders in exchange for their Fund
Shares. The opinion further provides, among other things, that (a) the
basis for federal income tax purposes of the Series Shares to be
received by each Fund shareholder will be the same as that of his or
her Fund Shares immediately prior to the Reorganization; and (b) each
Fund shareholder's holding period for his or her Series Shares will
include the Fund shareholder's holding period for his or her Fund
Shares, provided that said Fund Shares were held as capital assets on
the date of the exchange.
CONCLUSION. The Board of Trustees has concluded that the proposed
Plan of Reorganization to reorganize the Fund into a separate series
of a Massachusetts business trust is in the best interest of the
Fund's shareholders. The Trustees recommend that the Fund's
shareholders vote FOR the approval of the Plan of Reorganization as
described above. Such a vote encompasses approval of the
reorganization of the Fund to a separate series of a Massachusetts
business trust; temporary waiver of certain investment limitations of
the Fund to permit the Reorganization (see "Temporary Waiver of
Investment Restrictions" on page ); authorization of the the
Trust, as sole shareholder of the Series, to approve (i) the New
Management Contract, (ii) the New Sub-Advisory Agreement for the
Series between FMR and FIMM, and (iii) the New Plan. If approved, the
Plan of Reorganization will take effect on the Closing Date. If the
Plan of Reorganization is not approved, the Fund will continue to
operate as a series of the Trust.
7. TO ELIMINATE SPARTAN MUNICIPAL INCOME FUND'S FUNDAMENTAL 80%
INVESTMENT POLICY AND ADOPT A COMPARABLE NON-FUNDAMENTAL POLICY.
The Board of Trustees has approved, and recommends that the
shareholders of the fund approve, a proposal to eliminate the fund's
fundamental 80% investment policy and adopt a comparable
non-fundamental policy that is standard for other Fidelity national
municipal bond funds. If shareholders approve this proposal, the
Trustees intend to eliminate the fund's fundamental 80% investment
policy and adopt a non-fundamental policy that uses an 80% "asset
test" rather than an "income test." Fundamental policies can be
changed or eliminated only with shareholder approval, while
non-fundamental policies can be changed without shareholder
approval. It is anticipated that the elimination of the current
fundamental policy and the adoption of the proposed non-fundamental
policy will have no material impact on the way the fund is managed.
The current fundamental 80% investment policy for the fund is as
follows:
"The fund will normally invest so that at least 80% of its income is
exempt from federal income tax."
If the proposal to eliminate the current fundamental policy is
approved, the Trustees intend to adopt the following non-fundamental
policy:
"The fund will normally invest at least 80% of its assets in
municipal securities whose interest is exempt from federal income
tax."
DISCUSSION OF PROPOSED MODIFICATION. Eliminating the fund's
fundamental 80% investment policy and adopting the proposed
non-fundamental policy will allow the Trustees to modify the fund's
80% polic y , as necessary, to comply with the SEC's "name test
rule" (Name Test Rule) if and wh en it is adopted without having
to incur the potential costs and delays of conducting a shareholder
meeting.
The SEC proposed the Name Test Rule in February 1997. The Name Test
Rule governs the use of mutual fund names and, if and when
eventually adopted by the SEC, may apply to the fund. If a
definitive version of the rule is ultimately adopted, the fund's 80%
policy may require modification to comply with the requirements of the
definitive rule. Briefly stated, eliminating the fund's fundamental
80% investment policy and adopting the proposed non-fundamental policy
will give the Trustees the flexibility to comply more quickly with the
definitive Name Test Rule , if and when adopted .
In addition, because the proposed asset-based test can be efficiently
monitored, adopting an asset-based 80% investment policy limit may
facilitate the fund' s compliance efforts.
As noted above, fundamental investment policies can be changed or
eliminated only with shareholder approval, while non-fundamental
policies can be changed or eliminated without shareholder approval.
Changes in non-fundamental policies are still subject, however, to the
supervision of the Board of Trustees. Therefore, any future changes to
the fund's proposed non-fundamental 80% policy, while not requiring
shareholder approval, would require approval of the Board.
In sum, it is not expected that approval of the proposal will
materially alter the manner in which the fund is currently managed.
Rather, approval of the proposal will provide the Trustees with
additional flexibility to respond to future regulatory changes and
developments in the marketplace .
CONCLUSION. The Board of Trustees believes that eliminati ng
the fund's fundamental 80% investment policy and adopti ng the
proposed non-fundamental investment policy will benefit the fund and
its shareholders. The Trustees recommend voting FOR the proposal. Upon
shareholder approval, the changes will become effective when the
fund's disclosure is revised to reflect the changes. If the proposal
is not approved by the shareholders of the fund, the fund's current
fundamental policy will remain unchanged.
8. TO ELIMINATE SPARTAN CONNECTICUT MUNICIPAL INCOME FUND'S
FUNDAMENTAL 80% INVESTMENT POLICY AND ADOPT A COMPARABLE
NON-FUNDAMENTAL POLICY.
The Board of Trustees has approved, and recommends that the
shareholders of the fund approve, a proposal to eliminate the fund's
fundamental 80% investment policy and adopt a comparable
non-fundamental policy. If shareholders approve this proposal, the
Trustees intend to eliminate the fund's fundamental 80% investment
policy and adopt a non-fundamental policy that uses an 80% "asset
test , " which is standard for other Fidelity municipal bond
funds, rather than an "income test". Fundamental policies can be
changed or eliminated only with shareholder approval, while
non-fundamental policies can be changed without shareholder
approval. It is anticipated that the elimination of the current
fundamental policy and the adoption of the proposed non-fundamental
policy will have no material impact on the way the fund is managed.
The current fundamental 80% investment policy for the fund is as
follows:
"The fund will normally invest so that at least 80% of its income is
exempt from both federal and Connecticut personal income taxes."
If the proposal to eliminate the current fundamental policy is
approved, the Trustees intend to adopt the following non-fundamental
policy:
"The fund will normally invest at least 80% of its assets in
municipal securities whose interest is exempt from federal and
Connecticut personal income taxes."
DISCUSSION OF PROPOSED MODIFICATION. Eliminating the fund's
fundamental 80% investment policy and adopting the proposed
non-fundamental policy will allow the Trustees to modify the fund's
80% polic y , as necessary, to comply with the SEC's "name test
rule" (Name Test Rule) if and when it is adopted without having
to incur the potential costs and delays of conducting a shareholder
meeting.
The SEC proposed the Name Test Rule in February 1997. The Name Test
Rule governs the use of mutual fund names and, if and when
eventually adopted by the SEC, may apply to the fund. If a
definitive version of the rule is ultimately adopted, the fund's 80%
policy may require modification to comply with the requirements of the
definitive rule. Briefly stated, eliminating the fund's fundamental
80% investment policy and adopting the proposed non-fundamental policy
will give the Trustees the flexibility to comply more quickly with the
definitive Name Test Rule , if and when adopted .
In addition, because the proposed asset-based test can be efficiently
monitored, adopting an asset-based 80% investment policy limit may
facilitate the fund's compliance efforts.
As noted above, fundamental investment policies can be changed or
eliminated only with shareholder approval, while non-fundamental
policies can be changed or eliminated without shareholder approval.
Changes in non-fundamental policies are still subject, however, to the
supervision of the Board of Trustees. Therefore, any future changes to
the fund's proposed non-fundamental 80% policy, while not requiring
shareholder approval, would require approval of the Board.
In sum, it is not expected that approval of the proposal will
materially alter the manner in which the fund is currently managed.
Rather, approval of the proposal will provide the Trustees with
additional flexibility to respond to future regulatory changes and
developments in the marketplace .
CONCLUSION. The Board of Trustees believes that eliminati ng
the fund's fundamental 80% investment policy and adopti ng the
proposed non-fundamental investment policy will benefit the fund and
its shareholders. The Trustees recommend voting FOR the proposal. Upon
shareholder approval, the changes will become effective when the
fund's disclosure is revised to reflect the changes. If the proposal
is not approved by the shareholders of the fund, the fund's current
fundamental policy will remain unchanged.
9. TO ELIMINATE SPARTAN FLORIDA MUNICIPAL INCOME FUND'S FUNDAMENTAL
80% INVESTMENT POLICY AND ADOPT A COMPARABLE NON-FUNDAMENTAL
POLICY.
The Board of Trustees has approved, and recommends that the
shareholders of the fund approve, a proposal to eliminate the fund's
fundamental 80% investment policy and adopt a comparable
non-fundamental policy. If shareholders approve this proposal, the
Trustees intend to eliminate the fund's fundamental 80% investment
policy and adopt a non-fundamental policy that uses an 80% "asset
test," which is standard for other Fidelity municipal bond
funds, rather than an "income test" . Fundamental policies
can be changed or eliminated only with shareholder approval, while
non-fundamental policies can be changed without shareholder
approval. It is anticipated that the elimination of the current
fundamental policy and the adoption of the proposed non-fundamental
policy will have no material impact on the way the fund is managed.
The current fundamental 80% investment policy for the fund is as
follows:
"The fund will normally invest so that at least 80% of its income
distributions are free from federal income tax."
If the proposal to eliminate the current fundamental policy is
approved, the Trustees intend to adopt the following non-fundamental
policy:
"The fund will normally invest at least 80% of its assets in
municipal securities whose interest is exempt from federal income
tax."
DISCUSSION OF PROPOSED MODIFICATION. Eliminating the fund's
fundamental 80% investment policy and adopting the proposed
non-fundamental policy will allow the Trustees to modify the fund's
80% polic y , as necessary, to comply with the SEC's "name test
rule" (Name Test Rule) if and when it is adopted without having
to incur the potential costs and delays of conducting a shareholder
meeting.
The SEC proposed the Name Test Rule in February 1997. The Name Test
Rule governs the use of mutual fund names and, if and when
eventually adopted by the SEC, may apply to the fund. If a
definitive version of the rule is ultimately adopted, the fund's 80%
policy may require modification to comply with the requirements of the
definitive rule. Briefly stated, eliminating the fund's fundamental
80% investment policy and adopting the proposed non-fundamental policy
will give the Trustees the flexibility to comply more quickly with the
definitive Name Test Rule , if and when adopted .
In addition, because the proposed asset-based test can be efficiently
monitored, adopting an asset-based 80% investment policy limit may
facilitate the fund's compliance efforts.
As noted above, fundamental investment policies can be changed or
eliminated only with shareholder approval, while non-fundamental
policies can be changed or eliminated without shareholder approval.
Changes in non-fundamental policies are still subject, however, to the
supervision of the Board of Trustees. Therefore, any future changes to
the fund's proposed non-fundamental 80% policy, while not requiring
shareholder approval, would require approval of the Board.
In sum, it is not expected that approval of the proposal will
materially alter the manner in which the fund is currently managed.
Rather, approval of the proposal will provide the Trustees with
additional flexibility to respond to future regulatory changes and
developments in the marketplace .
CONCLUSION. The Board of Trustees believes that eliminat ing
the fund's fundamental 80% investment policy and adopti ng the
proposed non-fundamental investment policy will benefit the fund and
its shareholders. The Trustees recommend voting FOR the proposal. Upon
shareholder approval, the changes will become effective when the
fund's disclosure is revised to reflect the changes. If the proposal
is not approved by the shareholders of the fund, the fund's current
fundamental policy will remain unchanged.
10. TO ELIMINATE SPARTAN NEW JERSEY MUNICIPAL INCOME FUND'S
FUNDAMENTAL 80% INVESTMENT POLICY AND ADOPT A COMPARABLE
NON-FUNDAMENTAL POLICY.
The Board of Trustees has approved, and recommends that the
shareholders of the fund approve, a proposal to eliminate the fund's
fundamental 80% investment policy and adopt a comparable
non-fundamental policy. If shareholders approve this proposal, the
Trustees intend to eliminate the fund's fundamental 80% investment
policy and adopt a non-fundamental policy that uses an 80% "asset
test," which is standard for other Fidelity municipal bond funds,
rather than an "income test". Fundamental policies can be changed
or eliminated only with shareholder approval, while non-fundamental
policies can be changed without shareholder approval. It is
anticipated that the elimination of the current fundamental policy and
the adoption of the proposed non-fundamental policy will have no
material impact on the way the fund is managed.
The current fundamental 80% investment policy for the fund is as
follows:
"Under normal conditions, the fund will invest so that at least 80%
of its income is exempt from both federal income tax and New Jersey
Gross Income Tax."
If the proposal to eliminate the current fundamental policy is
approved, the Trustees intend to adopt the following non-fundamental
policy:
"The fund will normally invest at least 80% of its assets in
municipal securities whose interest is exempt from federal income tax
and New Jersey Gross Income Tax."
DISCUSSION OF PROPOSED MODIFICATION. Eliminating the fund's
fundamental 80% investment policy and adopting the proposed
non-fundamental policy will allow the Trustees to modify the fund's
80% polic y , as necessary, to comply with the SEC's "name test
rule" (Name Test Rule) if and when it is adopted without having
to incur the potential costs and delays of conducting a shareholder
meeting.
The SEC proposed the Name Test Rule in February 1997. The Name Test
Rule governs the use of mutual fund names and, if and when
eventually adopted by the SEC, may apply to the fund. If a
definitive version of the rule is ultimately adopted, the fund's 80%
policy may require modification to comply with the requirements of the
definitive rule. Briefly stated, eliminating the fund's fundamental
80% investment policy and adopting the proposed non-fundamental policy
will give the Trustees the flexibility to comply more quickly with the
definitive Name Test Rule , if and when adopted .
In addition, because the proposed asset-based test can be efficiently
monitored, adopting an asset-based 80% investment policy limit may
facilitate the fun d's compliance efforts.
As noted above, fundamental investment policies can be changed or
eliminated only with shareholder approval, while non-fundamental
policies can be changed or eliminated without shareholder approval.
Changes in non-fundamental policies are still subject, however, to the
supervision of the Board of Trustees. Therefore, any future changes to
the fund's proposed non-fundamental 80% policy, while not requiring
shareholder approval, would require approval of the Board.
In sum, it is not expected that approval of the proposal will
materially alter the manner in which the fund is currently managed.
Rather, approval of the proposal will provide the Trustees with
additional flexibility to respond to future regulatory changes and
developments in the marketplace .
CONCLUSION. The Board of Trustees believes that eliminati ng
the fund's fundamental 80% investment policy and adopti ng the
proposed non-fundamental investment policy will benefit the fund and
its shareholders. The Trustees recommend voting FOR the proposal. Upon
shareholder approval, the changes will become effective when the
fund's disclosure is revised to reflect the changes. If the proposal
is not approved by the shareholders of the fund, the fund's current
fundamental policy will remain unchanged.
11. TO ELIMINATE SPARTAN FLORIDA MUNICIPAL INCOME FUND'S FUNDAMENTAL
INVESTMENT POLIC IES REGARDING INVESTMENTS IN DEBT
SECURITIES OF INVESTMENT-GRADE QUALITY AND BELOW
I NVESTME NT-GRADE QUALITY.
The Board of Trustees has approved, and recommends that the
shareholders of the fund approve, a proposal that would eliminate
certain fundamental investment policies. The elimination of these
policies will allow the fund to more clearly communicate its
investment strategy by standardizing its investment disclosure in a
manner consistent with other Fidelity funds with similar investment
disciplines. The elimination of these investment policies is not
expected to materially affect the way the fund is managed.
The fund's investment objective and certain fundamental investment
policies read as follows:
"Spartan Florida Municipal Income seeks the highest level of current
income, exempt from federal income tax, available from municipal bonds
judged by FMR to be of investment-grade quality. The fund may also
invest a portion of its assets in bonds rated below investment-grade
quality."
If the proposal is approved, the fund's fundamental investment
objective would remain unchanged but the fundamental investment
policies would be eliminated as follows (deleted language is
[bracketed]):
"Spartan Florida Municipal Income seeks the highest level of current
income[,] exempt from federal income tax[, available from municipal
bonds judged by FMR to be of investment-grade quality. The fund may
also invest a portion of its assets in bonds rated below
investment-grade quality]."
Because the foregoing policies are fundamental, they cannot be
modified or eliminated without shareholder approval.
DISCUSSION OF PROPOSED MODIFICATION. Eliminating the foregoing
fundamental policies will allow the fund to more clearly communicate
its investment strategy to shareholders by standardizing its
investment disclosure in a manner consistent with other Fidelity funds
with similar investment disciplines.
If the proposal is approved, the fund will continue to rely on its
existing, more restrictive non-fundamental policy of investing in
investment-grade securities. The fund does not currently invest, or
intend to invest, in securities rated below investment-grade. As noted
above, fundamental policies can be changed or eliminated only with
shareholder approval, while non-fundamental policies can be changed or
eliminated without shareholder approval. Changes in non-fundamental
policies, however, are still subject to the supervision of the Board
of Trustees.
Eliminating the fundamental policy will have no material effect on
the way the fund is managed.
CONCLUSION. The Board of Trustees has concluded that the proposed
elimination of the foregoing fundamental investment policies regarding
investment in investment-grade debt securities and securities rated
below investment-grade will benefit the fund and its shareholders. The
Trustees recommend voting FOR the proposal. If approved by
shareholders, the elimination of the policies will become effective
when disclosure is revised to reflect the changes. If the proposal is
not approved by shareholders of the fund, the fund's current
fundamental policies will remain in effect.
12. TO AMEND SPARTAN MUNICIPAL INCOME FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING DIVERSIFICATION TO EXCLUDE SECURITIES OF
OTHER INVESTMENT COMPANIES FROM THE LIMITATION FOR THE FUND.
The fund's current fundamental investment limitation concerning
diversification is as follows:
"The fund may not, with respect to 75% of the fund's total assets,
purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, (a) more than 5% of the fund's
total assets would be invested in the securities of that issuer, or
(b) the fund would hold more than 10% of the outstanding voting
securities of that issuer."
The Trustees recommend that shareholders of the fund vote to replace
the fund's current fundamental investment limitation with the
following amended fundamental investment limitation governing
diversification (additional language is underlined):
"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, 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 the investment of cash
generated by fund shareholder or investment activity, or through the
investment of fund assets allocated to the short-term bond or money
markets in support of the fund's investment objective. For some funds,
the Investment Funds may serve as the principal option for cash
investment. If the proposal is approved, future amendments to the
fund's fundamental diversification limitation would continue to
require shareholder approval.
If this proposal is approved, the amended fundamental diversification
limitation cannot be changed without the approval of the shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit the fund and its shareholders. The Trustees
recommend voting FOR the proposal. The amended fundamental
diversification limitation, upon shareholder approval, will become
effective when the disclosure is revised to reflect the changes. If
the proposal is not approved by the shareholders of the fund, the
fund's current fundamental diversification limitation will remain
unchanged.
OTHER BUSINESS
The Board knows of no other business to be brought before the
Meeting. However, if any other matters properly come before the
Meeting, it is the intention that proxies that do not contain specific
instructions to the contrary will be voted on such matters in
accordance with the judgment of the persons therein designated.
ACTIVITIES AND MANAGEMENT OF FMR
FMR, a corporation organized in 1946, serves as investment adviser to
a number of investment companies. Information concerning the advisory
fees and average net assets of funds with investment objectives
similar to Spartan Municipal Income Fund, Spartan Connecticut
Municipal Income Fund, Spartan Florida Municipal Income Fund and
Spartan New Jersey Municipal Income Fund and advised by FMR is
contained in the Table of Average Net Assets and Expense Ratios in
Exhibit 7 beginning on page 82 .
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 . Each of the Directors is also a Trustee of the
trust , except Abigail P. Johnson . Messrs. Johnson 3d, Pozen,
John H. Costello, Matthew N. Karstetter, Eric D. Roiter, Stanley N.
Griffith , Thomas Simpson, Richard A. Silver, Fred L. Henning,
Dwight D. Churchill, George A. Fischer, Christine J. Thompson, and
Norm U. Lind are currently officers of the trust and officers or
employees of FMR or FMR Corp. With the exception of Mr. Costello, Mr.
Karstetter, all of these persons hold or have options to acquire stock
of FMR Corp. The principal business address of each of the Directors
of FMR is 82 Devonshire Street, Boston, Massachusetts 02109.
All of the stock of FMR is owned by its parent company, FMR Corp., 82
Devonshire Street, Boston, Massachusetts 02109, which was organized on
October 31, 1972. Members of Mr. Edward C. Johnson 3d's and Ms.
Abigail 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 December 1, 1997 through August 31, 1999, no
transactions were entered into by Trustees and nominees as Trustee of
the trust involving more than 1% of the voting common, non-voting
common and equivalent stock, or preferred stock of FMR Corp.
ACTIVITIES AND MANAGEMENT OF FIMM
FIMM is a wholly owned subsidiary of FMR formed in 1997 to provide
portfolio management services to Fidelity's money market funds and
investment advice with respect to money market instruments.
Funds with investment objectives similar to Spartan Municipal Income
Fund, Spartan Connecticut Municipal Income Fund, Spartan Florida
Municipal Income Fund, and Spartan New Jersey Municipal Income Fund
for which FMR has entered into a sub-advisory agreement with FIMM (the
successor to FMR Texas), and the net assets of each of these funds,
are indicated in the Table of Average Net Assets and Expense Ratios in
Exhibit 7 beginning on page 82 .
The Directors of FIMM are Edward C. Johnson 3d, Chairman, and Robert
C. Pozen, President. Mr. Johnson 3d also is President and a Trustee of
the trust and of other funds advised by FMR; Chairman, Chief Executive
Officer, President, and a Director of FMR Corp.; Chairman of the Board
and of the Executive Committee of FMR; a Director of FMR; and Chairman
and Director of Fidelity Management & Research (U.K.) Inc. (FMR U.K.)
and Fidelity Management & Research (Far East) Inc. (FMR Far East). In
addition, Mr. Pozen is Senior Vice President and a Trustee of the
trust and of other funds advised by FMR; Director of FMR; and
President and Director of FMR , FMR U.K., and FMR Far East. Each
of the Directors is a stockholder of FMR Corp. The principal business
address of the Directors is 82 Devonshire Street, Boston,
Massachusetts 02109.
PRESENT MANAGEMENT CONTRACT OF SPARTAN MUNICIPAL INCOME FUND
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 reimburses
Citibank, N.A. (Citibank) for its services as the fund's custodian,
transfer agent, and service agent. Previously, the fund reimbursed
UMB Bank, n.a. (UMB) as the fund's custodian, transfer agent, and
service agent. Prior to June 21, 1999, UMB acted as the fund's
custodian, transfer agent, and service 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 Citibank, pursuant to which Citibank 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 the
trust's officers and Trustees with respect to litigation.
Effective June 21, 1999, Citibank has entered into a
sub-agreement with Fidelity Service Company, Inc. (FSC), an affiliate
of FMR, under the terms of which FSC performs the processing
activities associated with providing transfer agency, dividend
disbursing and shareholder servicing functions for the fund. (Prior
to June 21, 1999, UMB had a sub-agreement with FSC.) U nder both
sub-agreements, FSC bears the expense of typesetting, printing,
and mailing prospectuses, statements of additional information, and
all other reports, notices, and statements to shareholders, except
proxy statements. FSC also pays all out-of-pocket expenses associated
with transfer agent services. Transfer agent fees and pricing and
bookkeeping fees, including reimbursement for out-of-pocket expenses,
paid to FSC by UMB on behalf of the fund for the fiscal year
ended November 30, 1998 were $3,661,000.
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.
FMR is the fund's manager pursuant to a management contract dated
December 1, 1994 which was approved by shareholders on November 16,
1994.
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 $643 billion of group net assets - the approximate level for
November 1998 - was .1333%, which is the weighted average of the
respective fee rates for each level of group net assets up to $643
billion.
On January 1, 1996, 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>
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Assets Annualized Rate Group Net Assets Effective Annual Fee Rate
0 - $3 billion .3700% $ 0.5 billion .3700%
3 - 6 .3400 25 .2664
6 - 9 .3100 50 .2188
9 - 12 .2800 75 .1986
12 - 15 .2500 100 .1869
15 - 18 .2200 125 .1793
18 - 21 .2000 150 .1736
21 - 24 .1900 175 .1690
24 - 30 .1800 200 .1652
30 - 36 .1750 225 .1618
36 - 42 .1700 250 .1587
42 - 48 .1650 275 .1560
48 - 66 .1600 300 .1536
66 - 84 .1550 325 .1514
84 - 120 .1500 350 .1494
120 - 156 .1450 375 .1476
156 - 192 .1400 400 .1459
192 - 228 .1350 425 .1443
228 - 264 .1300 450 .1427
264 - 300 .1275 475 .1413
300 - 336 .1250 500 .1399
336 - 372 .1225 525 .1385
372 - 408 .1200 550 .1372
408 - 444 .1175
444 - 480 .1150
480 - 516 .1125
Over - 516 .1100
</TABLE>
The fund's individual fund fee rate is 0.25%. Based on the average
group net assets of the funds advised by FMR for November 1998, the
fund's annual management fee rate would be calculated as follows:
Group Fee Rate Individual Fund Fee Rate Management Fee Rate
0.1333% + 0.25% = 0.3833%
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 1998, FMR received $11,303,000 for its services as
investment adviser to the fund. This fee was equivalent to 0.38% 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.
PRESENT MANAGEMENT CONTRACTS OF SPARTAN CONNECTICUT MUNICIPAL INCOME
FUND, SPARTAN FLORIDA MUNICIPAL INCOME FUND AND SPARTAN NEW JERSEY
MUNICIPAL INCOME FUND
Each fund employs FMR to furnish investment advisory and other
services. Under its management contract with each fund, FMR acts as
investment adviser and, subject to the supervision of the Board of
Trustees, directs the investments of each fund in accordance with its
investment objective, policies, and limitations. FMR also provides
each fund with all necessary office facilities and personnel for
servicing each fund's investments, compensates all officers of each
fund and all Trustees who are "interested persons" of the trust or of
FMR, and all personnel of each fund or FMR performing services
relating to research, statistical, and investment activities.
In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administrative services
necessary for the operation of each fund. These services include
providing facilities for maintaining each fund's organization;
supervising relations with custodians, transfer and pricing agents,
accountants, underwriters, and other persons dealing with each fund;
preparing all general shareholder communications and conducting
shareholder relations; maintaining each fund's records and the
registration of each fund's shares under federal and state laws;
developing management and shareholder services for each fund; and
furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees. Services provided by affiliates of FMR will continue
under the proposed management contract described in proposal 5.
Ef fective June 21, 1999, Ci tibank has entered into a
sub-agreement with Fidelity Service Company, Inc. (FSC), an affiliate
of FMR, under the terms of which FSC performs the processing
activities associated with providing transfer agency, dividend
disbursing and shareholder servicing functions for each fund.
(Prior to June 21, 1999, UMB had a sub-agr eement with FSC.)
Under both sub-agreement s , FSC bears the expense of
typesetting, printing, and mailing prospectuses, statements of
additional information, and all other reports, notices, and statements
to shareholders, except proxy statements. FSC also pays all
out-of-pocket expenses associated with transfer agent services.
Each fund also has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer
registered under the Securities Exchange Act of 1934 and is a member
of the National Association of Securities Dealers, Inc. Each
distribution agreement calls for FDC to use all reasonable efforts,
consistent with its other business, to secure purchasers for shares of
the fund, which are continuously offered at net asset value per share.
Promotional and administrative expenses in connection with the offer
and sale of shares are paid by FMR.
FMR is responsible for the payment of all operating expenses of each
fund with certain exceptions. Specific expenses payable by FMR include
expenses for typesetting, printing, and mailing proxy materials to
shareholders; legal expenses, fees of the custodian, auditor, and
interested Trustees; each fund's proportionate share of insurance
premiums and Investment Company Institute dues, and the costs of
registering shares under federal securities laws and making necessary
filings under state securities laws. Each fund's management contract
further provides that FMR will pay for typesetting, printing, and
mailing prospectuses, statements of additional information, notices
and reports to shareholders; however, under the terms of each fund's
transfer agent agreement, the transfer agent bears the costs of
providing these services to existing shareholders. FMR also pays all
fees associated with transfer agency, dividend disbursing, and
shareholder services, pricing and bookkeeping services.
FMR pays all other expenses of each fund with the following
exceptions: fees and expenses of all Trustees of the trust who are not
"interested persons" of the trust or FMR (the non-interested
Trustees), interest, taxes, brokerage commissions (if any), and such
nonrecurring expenses as may arise, including costs of any litigation
to which a fund may be a party, and any obligation it may have to
indemnify its officers and Trustees with respect to litigation.
FMR is Spartan Connecticut Municipal Income Fund's and Spartan New
Jersey Municipal Income Fund's manager pursuant to management
contracts dated January 1, 1992, which were approved by shareholders
on December 11, 1991. FMR is Spartan Florida Municipal Income Fund's
manager pursuant to a management contract dated February 20, 1992,
which was approved by FMR, then sole shareholder of the fund, on March
13, 1992. The management fee paid to FMR is reduced by an amount equal
to the fees and expenses paid by each fund to the non-interested
Trustees.
For the services of FMR under each management contract, each fund
pays FMR a monthly management fee at the annual rate of 0.55% of its
average net assets throughout the month. Fees received by FMR, after
reduction of fees and expenses paid by each fund to the non-interested
trustees, for the fiscal year ended November 30, 1998 from each fund
were $1,957,880, $2,370,588, and $2,054,831, for Spartan Connecticut
Municipal Income Fund, Spartan Florida Municipal Income Fund and
Spartan New Jersey Municipal Income Fund, respectively.
FMR may, from time to time, agree to reimburse all or a portion of
each 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 Spartan Municipal Income Fund, Spartan Connecticut
Municipal Income Fund, Spartan Florida Municipal Income Fund, and
Spartan New Jersey Municipal Income Fund, FMR has entered into a
sub-advisory agreement with Fidelity Investments Money Management,
Inc. (FIMM) (the successor to FMR Texas) pursuant to which FIMM has
primary responsibility for providing portfolio investment management
services to each fund.
Under the sub-advisory agreements, dated January 1, 1999 F MR
pays FIMM fees equal to 50% of the management fee payable to FMR under
its management contract with each fund. The fees paid to FIMM are not
reduced by any voluntary or mandatory expense reimbursements that may
be in effect from time to time.
For the fiscal year ended November 30, 1998, no fees were paid by FMR
to FIMM on behalf of the funds.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are
placed on behalf of each fund by FMR pursuant to authority contained
in the fund's management contract.
FMR may place agency transactions with National Financial Services
Corporation (NFSC) an indirect subsidiary of FMR Corp., if the
commissions are fair, reasonable, and comparable to commissions
charged by non-affiliated, qualified brokerage firms for similar
services.
During fiscal 1998, the funds paid no brokerage commissions to
affiliated brokers.
SUBMISSION OF CERTAIN SHAREHOLDER PROPOSALS
The trust does not hold annual shareholder meetings. Shareholders
wishing to submit proposals for inclusion in a proxy statement for a
subsequent shareholder meeting should send their written proposals to
the Secretary of the Trust, 82 Devonshire Street, Boston,
Massachusetts 02109.
NOTICE TO BANKS, BROKER-DEALERS AND
VOTING TRUSTEES AND THEIR NOMINEES
Please advise the trust, in care of Fidelity Service Company, Inc.,
P.O. Box 789, Boston, MA 02109, whether other persons are beneficial
owners of shares for which proxies are being solicited and, if so, the
number of copies of the Proxy Statement and Annual Reports you wish to
receive in order to supply copies to the beneficial owners of the
respective shares.
EXHIBIT 1
((UNDERLINED)) LANGUAGE WILL BE ADDED
[BRACKETED] LANGUAGE WILL BE DELETED
((FORM OF AMENDED AND RESTATED
DECLARATION OF TRUST
DATED [JANUARY 19, 1995]_________))
The language to be added to the current Declaration of Trust is
((underlined)), and the language to be deleted is set forth in
[brackets]. Headings that were underlined in the trust's current
Declaration of Trust remain underlined in this Exhibit.
((AMENDED AND RESTATED DECLARATION OF TRUST, made __________))
[January 19, 1995] ((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 April 21, 1977 by Edward C.
Johnson 3d 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.]((1.)) This Trust shall be known as "Fidelity Court
Street Trust".
DEFINITIONS
SECTION[ 2.](( 2.)) Wherever used herein, unless otherwise required
by the context or specifically provided:
(a) The ((terms)) [Terms]"Affiliated Person((,")) [',]
"Assignment((,")) [',] "Commission((,")) [',]"Interested Person((,"))
[",] "Majority Shareholder Vote" (the 67% or 50% requirement of the
third sentence of Section 2(a)(42) of the 1940 Act, whichever may be
[applicable)] ((applicable),)) and "Principal Underwriter" shall have
the meanings given them in the 1940 Act, as ((modified by or
interpreted by any applicable order or orders of the Commission or any
rules or regulations adopted or interpretative releases of the
Commission thereunder));[amended from time to time;]
(b) (("Bylaws" shall mean ))[The "Trust" refers to Fidelity Court
Street Trust and reference to] the ((bylaws ))[Trust when applicable
to one or more series]of the Trust, ((if any, as amended from
time))[shall refer] to ((time;))[any such series;]
(((c) "Class" refers to the class of Shares of a Series of the Trust
established in accordance with the provisions of Article III;))
(((d) "Declaration of Trust" means this Amended and Restated
Declaration of Trust, as further amended or restated, from time to
time;))
(((e)))[(c)] "Net Asset Value" means the net asset value of each
Series of the Trust ((or Class thereof)) determined in the manner
provided in Article X, Section 3;
(((f))) [(d)] "Shareholder" means a record owner of Shares of the
Trust;
(((g))) [(f)]" Shares" means the equal proportionate transferable
units of interest into which the beneficial interest of the Trust or
each Series shall be divided from time to time, including such
((Class)) [class] or ((Classes)) [classes] of Shares as the Trustees
may from time to time create and ((establish)) [establish,] and
including fractions of Shares as well as whole ((Shares as)) [shares]
consistent with the requirements of Federal and/or state securities
laws;
(h) "Series" refers to ((any)) series of Shares of the Trust
established in accordance with the provisions of Article ((III;))
III[.]
(((i))) [b] (("Trust" refers to Fidelity Court Street Trust and
reference to the Trust, when applicable to one or more Series of the
Trust, shall refer to any such Series;))
(((j))) [(i)] 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;
(((k))) [(g)] The "1940 Act" refers to the Investment Company Act of
1940, as amended from time to time[; and] ((.))
ARTICLE II
PURPOSE OF TRUST
The purpose of this Trust is to provide investors a continuous source
of managed investment in securities.
ARTICLE III
BENEFICIAL INTEREST
SHARES OF BENEFICIAL INTEREST
SECTION [1.] ((1.)) The beneficial interest in the Trust shall be
divided into such transferable Shares of one or more separate and
distinct Series ((or Classes of Series)) as the Trustees shall((,))
from time to time((,)) create and establish. The number of
((authorized)) Shares ((of)) [is unlimited and] each ((Series, and
Class thereof, is unlimited. Each)) Share shall be without par value
and shall be fully paid and nonassessable. The Trustees shall have
full power and authority, in their sole discretion((,)) and without
obtaining any prior authorization or vote of the Shareholders [or] of
any Series or ((Class)) [class] of [Shareholders of] the ((Trust (a)))
[Trust,] to create and establish (and to change in any manner) Shares
or any Series or ((Classes))[classes] thereof with such preferences,
voting powers, rights((,)) and privileges as the Trustees may((,))
from time to time((, ))determine[,]((; (b))) [time determine,] to
divide or combine the Shares or any Series or ((Classes))[classes]
thereof into a greater or lesser number; (c) [number,] to classify or
reclassify any issued Shares into one or more Series or
((Classes))[classes] of ((Shares; (d)))[Shares,] to abolish any one or
more Series or ((Classes))[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[SERIES]
SECTION [2.] ((2.)) The establishment of any Series ((or Class
thereof)) shall be effective upon the adoption of a resolution by a
majority of the then Trustees setting forth such establishment and
designation and the relative rights and preferences of the Shares of
such Series ((or Class.)) At any time that there are no Shares
outstanding of any particular Series ((or Class)) previously
established and designated, the Trustees may by a majority vote
abolish ((such)) [that] Series ((or Class)) and the establishment and
designation thereof.
OWNERSHIP OF SHARES
SECTION [3.] ((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.] ((4.)) The Trustees shall accept investments in the
Trust from such persons and on such terms as they may((,)) from time
to time((,)) authorize. Such investments may be in the form of cash((,
securities)) or ((other))[securities] ((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.] ((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, charge((s,))
and reserves attributable to that Serie((s, 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.))[shall be allocated and charged by the Trustees between or
among any one or more of the Series in such manner as the Trustees in
their sole discretion deem fair and equitable. Each such allocation
shall be conclusive and binding upon the Shareholders of all Series
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.] ((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.] ((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.]((1.)) The business and affairs of the Trust shall be
managed by the Trustees, and they shall have all powers necessary and
desirable to carry out that responsibility.
[ELECTION: INITIAL TRUSTEES] ((INITIAL TRUSTEES; ELECTION))
SECTION [2.] ((2. The initial Trustees shall be at least three
individuals who shall affix their signatures hereto.)) On a date fixed
by the Trustees, the Shareholders shall elect not less than three
Trustees. A Trustee shall not be required to be a Shareholder of the
Trust. [The initial Trustees shall be Edward C. Johnson 3d, 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.] ((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.](( 4.)) In case of the declination, death, resignation,
retirement, [removal, incapacity,] or [inability] ((removal)) of any
of the Trustees, ((or)) in case a vacancy shall, by reason of an
increase in ((number of the Trustees,))[number,] 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.] ((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.] ((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.] ((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.] ((8.)) The assets of the Trust shall be held separate
and apart from any assets now or hereafter held in any capacity other
than as Trustee hereunder by the Trustees or any successor Trustees.
All of the assets of the Trust shall at all times be considered as
vested in the Trustees. No Shareholder shall be deemed to have a
severable ownership in any individual asset of the Trust or any right
of partition or possession thereof, but each Shareholder shall have a
proportionate undivided beneficial interest in the Trust.
ARTICLE V
POWERS OF THE TRUSTEES
POWERS
SECTION [1.] ((1.)) The Trustees((,)) in all instances((,)) shall act
as principals[,] and are and shall be free from the control of the
Shareholders. The Trustees shall have full power and authority to do
any and all acts and to make and execute any and all contracts and
instruments that they may consider necessary or appropriate in
connection with the management of the Trust ((. Except as otherwise
provided herein or in the 1940 Act,)) the [T]((t))he Trustees shall
not in any way be bound or limited by present or future laws or
customs in regard to trust investments, but shall have full authority
and power to make any and all investments [which] ((that)) they, in
their [uncontrolled] discretion, shall deem proper to accomplish the
purpose of this Trust. Subject to any applicable limitation in [the]
((this)) Declaration of Trust or the Bylaws of the Trust, ((if any,))
the Trustees shall have power and authority:
(a) To invest and reinvest cash and other property, and to hold cash
or other property ((uninvested))[,] without((,)) in any event((,))
being bound or limited by any present or future law or custom in
regard to investments by Trustees, and to sell, exchange, lend,
pledge, mortgage, hypothecate, write options on((,)) and lease any or
all of the assets of the Trust.
(b) To adopt Bylaws not inconsistent with this Declaration of Trust
providing for the conduct of the business of the Trust and to amend
and repeal them to the extent that they do not reserve that right to
the Shareholders.
(c) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate.
(d) To employ [a] ((one or more)) bank((s,)) [or] trust
compan[y]((ies that are members of a national securities exchange, or
other entities permitted under the 1940 Act, as modified by or
interpreted by any applicable order or orders of the Commission or any
rules or regulations adopted or interpretative releases of the
Commission thereunder,)) as custodian((s)) of any assets of the Trust
subject to any conditions set forth in this Declaration of Trust or in
the Bylaws, if any.
(e) To retain a transfer agent and Shareholder servicing agent, or
both.
(f) To provide for the distribution of interests of the Trust either
through a [p]((P))rincipal [u]((U))nderwriter in the manner
hereinafter provided for or by the Trust itself, or both.
(g) To set record dates in the manner hereinafter provided for.
(h) To delegate such authority as they consider desirable to any
officers of the Trust and to any [agent,] ((investment)) [custodian]
((adviser, manager, custodian, underwriter, or other agent)) or
((independent)) [underwriter.] ((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) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary,
suitable or proper for the accomplishment of any purpose or the
attainment of any object or the furtherance of any power hereinbefore
set forth, either alone or in association with others, and to do every
other act or thing incidental or appurtenant to or growing out of or
connected with the aforesaid business or purposes, objects or
powers.))
[(t)] (((w))) Notwithstanding any other provision hereof, to invest
all of the assets of any [s]((S))eries in a single open-end investment
company, including investment by means of transfer of such assets in
exchange for an interest or interests in such investment company.
((The foregoing clauses shall be construed both as objects and
powers, and the foregoing enumeration of specific powers shall not be
held to limit or restrict in any manner the general powers of the
Trustees. Any action by one or more of the Trustees in their capacity
as such hereunder shall be deemed an action on behalf of the Trust or
the applicable Series and not an action in an individual capacity.))
((The Trustees shall not be limited to investing in obligations
maturing before the possible termination of the Trust or any Series or
Class thereof.))
No one dealing with the Trustees shall be under any obligation to
make any inquiry concerning the authority of the Trustees, or to see
to the application of any payments made or property transferred to the
Trustees or upon their order.
TRUSTEES AND OFFICERS AS SHAREHOLDERS
SECTION [2.] ((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.] ((3.)) [The]((Except as otherwise provided herein or in
the 1940 Act, the)) Trustees shall act by majority vote at a meeting
duly called or by unanimous written consent without a meeting or by
telephone consent provided a quorum of Trustees participate in any
such telephonic meeting, unless the 1940 Act requires that a
particular action be taken only at a meeting ((at)) [of] ((which)) the
((Trustees are present))[Trustees.] ((in person.)) At any meeting of
the Trustees, a majority of the Trustees shall constitute a quorum.
Meetings of the Trustees may be called orally or in writing by the
Chairman of the Trustees or by any two other Trustees. Notice of the
time, date((, ))and place of all meetings of the Trustees shall be
given by the party calling the meeting to each Trustee by telephone((,
telefax,))[or] telegram or ((other electro-mechanical means)) sent to
his home or business address at least twenty-four(((24))) hours in
advance of the meeting or by written notice mailed to his home or
business address at least seventy-two (((72))) hours in advance of the
meeting. Notice need not be given to any Trustee who attends the
meeting without objecting to the lack of notice or who executes a
written waiver of notice with respect to the meeting. Subject to the
requirements of the 1940 Act, the Trustees by majority vote may
delegate to any one of their number their authority to approve
particular matters or take particular actions on behalf of the Trust.
((Written consents or waivers of Trustees may be executed in one or
more counterparts. Execution ))of ((a written consent or waiver and
delivery thereof to the Trust may be accomplished by telefax or other
electro-mechanical means.))
CHAIRMAN OF THE TRUSTEES
SECTION [4.] ((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.] ((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 Information[,]((;)) expenses of printing and
distributing prospectuses sent to existing Shareholders[,]((;))
auditing and legal expenses[,]((;)) reports to Shareholders[,]((;))
expenses of meetings of Shareholders and proxy solicitations
therefor[,]((;)) insurance expense[,]((;)) association membership
dues((;)) and for such non-recurring items as may arise, including
litigation to which the Trust is a party[,]((;)) and for all losses
and liabilities by them incurred in administering the Trust, and for
the payment of such expenses, disbursements, losses((,)) and
liabilities the Trustees shall have a lien on the assets belonging to
the appropriate Series prior to any rights or interests of the
Shareholders thereto. This section shall not preclude the Trust from
directly paying any of the aforementioned fees and expenses.
ARTICLE VII
INVESTMENT ADVISER, PRINCIPAL[,] UNDERWRITER, AND TRANSFER AGENT
INVESTMENT ADVISER
SECTION [1.] ((1.)) Subject to a Majority Shareholder Vote, the
Trustees may((,)) in their discretion ((and)) from time to time((,))
enter into an investment advisory or management contract(s) with
respect to the Trust or any Series thereof whereby the other
party(ies) to such contract(s) shall undertake to furnish the Trustees
such management, investment advisory, statistical((,)) and research
facilities and services and such other facilities and services, if
any, and all upon such terms and conditions, as the Trustees may((,))
in their discretion((,)) determine. Notwithstanding any provisions of
this Declaration of Trust, the Trustees may authorize the investment
adviser(s) (subject to such general or specific instructions as the
Trustees may from time to time adopt) to effect purchases, sales or
exchanges of portfolio securities and other investment instruments of
the Trust on behalf of the Trustees or may authorize any officer,
agent, or Trustee to effect such purchases, sales((,)) or exchanges
pursuant to recommendations of the investment adviser (and all without
further action by the Trustees). Any such purchases, sales((,)) and
exchanges shall be deemed to have been authorized by all of the
Trustees.
The Trustees may, subject to applicable requirements of the 1940 Act,
((as modified by or interpreted by any applicable order or orders of
the Commission or any rules or regulations adopted or interpretative
releases of the Commission thereunder,)) including those relating to
Shareholder approval, authorize the investment adviser to employ one
or more sub[-]((-)) advisers from time to time to perform such of the
acts and services of the investment adviser, and upon such terms and
conditions, as may be agreed upon between the investment adviser and
sub[-]((-)) adviser.
PRINCIPAL UNDERWRITER
SECTION [2.] ((2. The Trustees may in their discretion from time to
time enter into [(a)]((an exclusive or non-exclusive)) contract(s)
((on behalf of the Trust or any Series or Class thereof)) providing
for the sale of the Shares, whereby the Trust may either agree to sell
the Shares to the other party to the contract or appoint such other
party its sales agent for such Shares. In either case, the contract
shall be on such terms and conditions as may be prescribed in the
Bylaws, if any, and such further terms and conditions as the Trustees
may ((,)) in their discretion((,)) determine not inconsistent with the
provisions of this Article VII[,] or of the Bylaws, if any[;]((.))
[and s]((S))uch contract may also provide for the repurchase or sale
of Shares by such other party as principal or as agent of the Trust.
TRANSFER AGENT
SECTION [3.] ((3.)) The Trustees may((,)) in their discretion ((and))
from time to time ((,)) enter into [a] ((one or more)) transfer agency
and Shareholder service contract s whereby the other party shall
undertake to furnish the Trustees with transfer agency and Shareholder
services. [The]Such contract((s)) shall be on such terms and
conditions as the Trustees may((,)) in their discretion((,)) determine
not inconsistent with the provisions of this Declaration of Trust or
of the Bylaws, if any. Such services may be provided by one or more
entities.
PARTIES TO CONTRACT
SECTION [4.] ((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.] ((5.)) Any contract entered into pursuant to Sections 1
and 2 of this Article VII shall be consistent with and subject to the
requirements of Section 15 of the 1940 Act ((, as modified by or
interpreted by any applicable order or orders of the Commission or any
rules or regulations adopted or interpretative releases of the
Commission)) ([including any amendments thereof](( or)) other
applicable Act of Congress hereafter enacted)((,)) with respect to its
continuance in effect, ((its amendment,)) its termination, and the
method of authorization and approval of such contract or renewal
thereof and no amendment to any contract, entered into pursuant to
Section 1 shall be effective unless assented to by a Majority
Shareholder Vote.
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
SECTION [1.] ((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 [(i)]((as
provided in the following sentence and except (a))) when required by
the 1940 Act, Shares shall be voted in the aggregate and not by
individual Series; and [(ii)] (((b))) when the Trustees have
determined that the matter affects only the interests of one or more
Series, then only the Shareholders of such Series shall be entitled to
vote thereon. ((The Trustees may also determine that a matter affects
only the interests of one or more Classes of a Series, in which case,
any such matter shall be voted on by such Class or Classes.)) A
Shareholder of each Series ((or Class thereof)) shall be entitled to
one vote for each dollar of net asset value (number of Shares owned
times net asset value per share) of such Series[,] ((or Class
thereof)) on any matter on which such Shareholder is entitled to
vote((,)) and each fractional dollar amount shall be entitled to
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.] ((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.] ((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,] ((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.] ((1.)) The Trustees shall at all times employ a bank ((,
a company that is a member of a national securities exchange,))[or]
trust company ((, or other entity permitted under the 1940 Act, as
modified by or interpreted by any applicable order or orders of the
Commission or any rules or regulations adopted or interpretative
releases of the Commission thereunder,)) having capital, surplus((,))
and undivided profits of at least two million dollars ($2,000,000), or
such other amount [or such other entity] as shall be allowed by the
Commission or by the 1940 Act, as custodian with authority as its
agent, but subject to such restrictions, limitations and other
requirements, if any, as may be contained in the Bylaws of the
Trust((, if any)):
[(1)] (((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)] (((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)] (((3))) to disburse such funds upon orders or vouchers;
and the Trust may also employ such custodian as its agent:
[(1)] (((1))) to keep the books and accounts of the Trust and furnish
clerical and accounting services; and
[(2)] (((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.] ((Act.))
CENTRAL [CERTIFICATE] DEPOSITORY SYSTEM
SECTION [2.] ((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,] ((Act,)) pursuant to which system all securities of any
particular class or series of any issuer deposited within the system
are treated as fungible and may be transferred or pledged by
bookkeeping entry without physical delivery of such securities[,]((;
))provided that all such deposits shall be subject to withdrawal only
upon the order of the [Trust.] ((Trust or its custodian,
subcustodians, or other authorized agents.))
ARTICLE X
[DISTRIBUTIONS AND REDEMPTIONS]((DISTRIBUTIONS, REDEMPTIONS AND
DETERMINATION OF NET ASSET VALUE))
SECTION 1.
(a) The Trustees may from time to time declare and pay dividends.
The amount of such dividends and the payment of them shall be wholly
in the discretion of the Trustees.
(b) The Trustees shall have ((the)) power, to the fullest extent
permitted by the laws of Massachusetts, at any time to declare and
cause to be paid dividends on Shares of a particular Series, from the
assets belonging to that Series, which dividends, at the election of
the Trustees, may be paid daily or otherwise pursuant to a standing
resolution or resolutions adopted only once or with such frequency as
the Trustees may determine, and may be payable in Shares of that
Series ((, or Classes thereof,)) at the election of each Shareholder
of that Series.
((The Trustees may adopt and offer to Shareholders such dividend
reinvestment plans, cash dividend payout plans, or related plans as
the Trustees shall deem appropriate.))
(c) Anything in this instrument to the contrary notwithstanding, the
Trustees may at any time declare and distribute ((a stock dividend))
pro rata among the Shareholders of a particular Series ((, or Class
thereof,)) as of the record date of that Series ((or Class)) fixed as
provided in ((Article XII,)) Section 3 [hereof a "stock dividend"].
REDEMPTIONS
SECTION [2.] ((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.] ((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.] ((4.)) The Trustees may declare a suspension of the
right of redemption or postpone the date of payment as permitted under
the 1940 Act. Such suspension shall take effect at such time as the
Trustees shall specify((,)) but not later than the close of business
on the business day next following the declaration of suspension, and
thereafter there shall be no right of redemption or payment until the
Trustees shall declare the suspension at an end. In the case of a
suspension of the right of redemption, a Shareholder may either
withdraw his request for redemption or receive payment based on the
Net Asset Value per Share existing after the termination of the
suspension. ((In the event that any Series is divided into Classes,
the provisions of this Section, to the extent applicable as determined
in the discretion of the Trustees and consistent with applicable law,
may be equally applied to each such Class.))
ARTICLE XI
LIMITATION OF LIABILITY AND INDEMNIFICATION
LIMITATION OF LIABILITY
SECTION [1.] ((1.)) Provided they have exercised reasonable care and
have acted under the reasonable belief that their actions are in the
best interest of the Trust, the Trustees shall not be responsible for
or liable in any event for neglect or wrongdoing of them or any
officer, agent, employee((,)) or investment adviser of the Trust, but
nothing contained herein shall protect any Trustee against any
liability to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence((,)) or reckless disregard of
the duties involved in the conduct of his office.
INDEMNIFICATION OF COVERED PERSONS
SECTION 2.
(a) Subject to the exceptions and limitations contained in Section
(b) below:
(i) every person who is, or has been, a Trustee or officer of the
Trust (hereinafter referred to as "Covered Person") shall be
indemnified by the appropriate Series to the fullest extent permitted
by law against liability and against all expenses reasonably incurred
or paid by him in connection with any claim, action, suit((,)) or
proceeding in which he becomes involved as a party or otherwise by
virtue of his being or having been a Trustee or officer and against
amounts paid or incurred by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall
apply to all claims, actions, suits or proceedings (civil, criminal or
other, including appeals), actual or threatened while in office or
thereafter, and the words "liability" and "expenses" shall include,
without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered
Person:
(i) who shall have been adjudicated by a court or body before which
the proceeding was brought (A) to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his office((;)) or (B) not to have acted in good faith in the
reasonable belief that his action was in the best interest of the
Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence((,)) or reckless disregard of
the duties involved in the conduct of his office,
(A) by the court or other body approving the settlement;
(B) by at least a majority of those Trustees who are neither
[interested persons] ((Interested Persons)) of the Trust nor are
parties to the matter based upon a review of readily available facts
(as opposed to a full trial-type inquiry); or
(C) by written opinion of independent legal counsel based upon a
review of readily available facts (as opposed to a full trial-type
inquiry);
provided, however, that any Shareholder may, by appropriate legal
proceedings, challenge any such determination by the Trustees, or by
independent counsel.
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall
not be exclusive of or affect any other rights to which any Covered
Person may now or hereafter be entitled, shall continue as to a person
who has ceased to be such Trustee or officer((,)) and shall inure to
the benefit of the heirs, executors((,)) and administrators of such a
person. Nothing contained herein shall affect any rights to
indemnification to which Trust personnel, other than Trustees and
officers, and other persons may be entitled by contract or otherwise
under law.
(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit((,)) or proceeding of the character
described in [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.] ((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.] ((1.)) It is hereby expressly declared that a trust ((is
created hereby)) and not ((a partnership, joint stock association,
corporation, bailment, or any form of a legal
relationship))[partnership] ((other))[is] ((than ))[created]
((a))[hereby.] ((trust.)) No Trustee hereunder shall have any power to
((personally)) bind [personally] either the Trust's officers or any
Shareholder. All persons extending credit to, contracting with ((,))
or having any claim against the Trust or the Trustees shall look only
to the assets of the appropriate Series for payment under such credit,
contract ((,)) or claim; and neither the Shareholders nor the
Trustees, nor any of their agents, whether past, present ((,)) or
future, shall be personally liable therefor. Nothing in this
Declaration of Trust shall protect a Trustee against any liability to
which the Trustee would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence ((,)) or reckless disregard
of the duties involved in the conduct of the office of Trustee
hereunder.
TRUSTEE[']S' GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY
SECTION [2.] ((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.] ((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.
[(a)] SECTION 4((.1. ))[THIS] ((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]
[(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]
((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,))
[(ii) at any time sell and convert into money all of the assets of
the Trust or any affected Series.]
(((i) the Trust or the Series or Class shall carry on no business
except for the purpose of winding up its affairs;))
(((ii) the Trustees shall proceed to wind up the affairs of the
Trust or the Series or Class, and all of the powers of the Trustees
under this Declaration of Trust shall continue until the affairs of
the Trust shall have been wound up, including the power to fulfill or
discharge the contracts of the Trust or the Series or Class thereof;
collect its assets; sell, convey, assign, exchange, transfer, or
otherwise dispose of all or any part of the remaining Trust property
or Trust property allocated or belonging to such Series or Class to
one or more persons at public or private sale for consideration that
may consist in whole or in part of cash, securities, or other property
of any kind; discharge or pay its liabilities; and do all other acts
appropriate to liquidate its business; provided that any sale,
conveyance, assignment, exchange, transfer, or other disposition of
all or substantially all the Trust property or Trust property
allocated or belonging to such Series or Class (other than as provided
in (iii) below) shall require Shareholder approval in accordance with
Section 4.3 below; and))
[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] ((Secretary of The Commonwealth of Massachusetts,))
as [provided] ((appropriate, 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
interests[,] 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 thereof may merge or
consolidate with any other corporation, association, trust, or other
organization or may sell, lease, or exchange all or substantially all
of the Trust property or Trust property allocated or belonging to such
Series, including its good will, upon such terms and conditions and
for such consideration when and as authorized at any meeting of
Shareholders called for such purpose by a Majority Shareholder Vote of
the Trust or affected Series, as the case may be. Any such merger,
consolidation, sale, lease, or exchange shall be deemed for all
purposes to have been accomplished under and pursuant to Massachusetts
law.))
((SECTION 4.4. INCORPORATION; REORGANIZATION. Subject to applicable
Federal and state law, the Trustees may without the vote or consent of
Shareholders cause to be organized or assist in organizing a
corporation or corporations under the laws of any jurisdiction or any
other trust, partnership, limited liability company, association, or
other organization to take over all of the Trust property or the Trust
property allocated or belonging to such Series or to carry on any
business in which the Trust shall directly or indirectly have any
interest, and to sell, convey and transfer the Trust property or the
Trust property allocated or belonging to such Series to any such
corporation, trust, limited liability company, partnership,
association, or organization in exchange for the shares or securities
thereof or otherwise, and to lend money to, subscribe for the shares
or securities of, and enter into any contracts with any such
corporation, trust, partnership, limited liability company,
association, or organization, or any corporation, partnership, limited
liability company, trust, association, or organization in which the
Trust or such Series holds or is about to acquire shares or any other
interest. Subject to applicable Federal and state law, the Trustees
may also cause a merger or consolidation between the Trust or any
successor thereto and any such corporation, trust, partnership,
limited liability company, association, or other organization. Nothing
contained herein shall be construed as requiring approval of
Shareholders for the Trustees to organize or assist in organizing one
or more corporations, trusts, partnerships, limited liability
companies, associations, or other organizations and selling,
conveying, or transferring the Trust property or a portion of the
Trust property to such organization or entities; provided, however,
that the Trustees shall provide written notice to the affected
Shareholders of any transaction whereby, pursuant to this Section 4.4,
the Trust or any Series therof sells, conveys, or transfers
substantially all of its assets to another entity or merges or
consolidates with another entity.))
FILING OF COPIES, REFERENCES, AND HEADINGS
SECTION [5.] ((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.] ((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)) [trust.]((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 shall form a part hereof, except
that an amendment which] ((determine,)) 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 Shareholders] of ((shareholders
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.] ((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 [as
investment adviser of] or a subsidiary or affiliate thereof as
investment adviser of each Series of the Trust. As between the Trust
and itself, FMR controls the use of the name of the Trust insofar as
such name contains the identifying word "Fidelity". FMR may from time
to time use the identifying word "Fidelity" in other connections and
for other purposes, including, without limitation, in the names of
other investment companies, corporations((,)) or businesses [which]
((that)) it may manage, advise, sponsor or own or in which it may have
a financial interest. FMR may require the Trust or any Series thereof
to cease using the identifying word "Fidelity" in the name of the
Trust or any Series thereof if the Trust or any Series thereof ceases
to employ FMR or a subsidiary or affiliate thereof as investment
adviser.
PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS.
((SECTION 10. (a) The provisions of this Declaration of Trust are
severable, and, if the Trustees shall determine, with the advice of
counsel, that any of such provisions is in conflict with the 1940 Act,
the regulated investment company provisions of the Internal Revenue
Code or with other applicable laws and regulations, the conflicting
provision shall be deemed never to have constituted a part of this
Declaration of Trust; provided, however, that such determination shall
not affect any of the remaining provisions of this Declaration of
Trust or render invalid or improper any action taken or omitted prior
to such determination.))
(( (b) If any provision of this Declaration Trust shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such
jurisdiction and shall not in any manner affect such provisions in any
other jurisdiction or any other provision of this Declaration of Trust
in any jurisdiction.))
IN WITNESS WHEREOF, the undersigned, being all of the Trustees of the
Trust, have executed this instrument [this] ((as)) [19th] ((of the))
[day] ((date)) [of] ((set forth)) [January] ((above.)) [1995.]
[SIGNATURE LINES OMITTED]
EXHIBIT 2
((UNDERLINED)) LANGUAGE WILL BE ADDED
[BRACKETED] LANGUAGE WILL BE DELETED
[FORM OF]
MANAGEMENT CONTRACT
BETWEEN
FIDELITY COURT STREET TRUST:
[FIDELITY HIGH YIELD TAX-FREE PORTFOLIO]
((SPARTAN MUNICIPAL INCOME FUND))
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
[MODIFICATION made] ((AMENDMENT made)) this ___ [1st] day of
______, [December, 1994] ____ by and between Fidelity Court 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 High Yield Tax-Free Portfolio]
((Spartan Municipal 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 March 1, 1993, to a modification of said
Contract in the manner set forth below. The Modified Management
Contract shall when executed by duly authorized officers of the Fund
and the Adviser, take effect on the later of January 1, ((2000))
[1994] or the first day of the month following approval.
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the
supervision of the Fund's Board of Trustees, direct the investments of
the Portfolio in accordance with the investment objective, policies
and limitations as provided in the Portfolio's Prospectus or other
governing instruments, as amended from time to time, the Investment
Company Act of 1940 and rules thereunder, as amended from time to time
(the "1940 Act"), and such other limitations as the Portfolio may
impose by notice in writing to the Adviser. The Adviser shall also
furnish for the use of the Portfolio office space and all necessary
office facilities, equipment and personnel for servicing the
investments of the Portfolio; and shall pay the salaries and fees of
all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all
personnel of the Fund or the Adviser performing services relating to
research, statistical and investment activities. The Adviser is
authorized, in its discretion and without prior consultation with the
Portfolio, to buy, sell, lend and otherwise trade in any stocks, bonds
and other securities and investment instruments on behalf of the
Portfolio. The investment policies and all other actions of the
Portfolio are and shall at all times be subject to the control and
direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for
the performance by its affiliates of) the management and
administrative services necessary for the operation of the Fund. The
Adviser shall, subject to the supervision of the Board of Trustees,
perform various services for the Portfolio, including but not limited
to: (i) providing the Portfolio with office space, equipment and
facilities (which may be its own) for maintaining its organization;
(ii) on behalf of the Portfolio, supervising relations with, and
monitoring the performance of, custodians, depositories, transfer and
pricing agents, accountants, attorneys, underwriters, brokers and
dealers, insurers and other persons in any capacity deemed to be
necessary or desirable; (iii) preparing all general shareholder
communications, including shareholder reports; (iv) conducting
shareholder relations; (v) maintaining the Fund's existence and its
records; (vi) during such times as shares are publicly offered,
maintaining the registration and qualification of the Portfolio's
shares under federal and state law; and (vii) investigating the
development of and developing and implementing, if appropriate,
management and shareholder services designed to enhance the value or
convenience of the Portfolio as an investment vehicle.
The Adviser shall also furnish such reports, evaluations, information
or analyses to the Fund as the Fund's Board of Trustees may request
from time to time or as the Adviser may deem to be desirable. The
Adviser shall make recommendations to the Fund's Board of Trustees
with respect to Fund policies, and shall carry out such policies as
are adopted by the Trustees. The Adviser shall, subject to review by
the Board of Trustees, furnish such other services as the Adviser
shall from time to time determine to be necessary or useful to perform
its obligations under this Contract.
(c) The Adviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or
dealers selected by the Adviser, which may include brokers or dealers
affiliated with the Adviser. The Adviser shall use its best efforts to
seek to execute portfolio transactions at prices which are
advantageous to the Portfolio and at commission rates which are
reasonable in relation to the benefits received. In selecting brokers
or dealers qualified to execute a particular transaction, brokers or
dealers may be selected who also provide brokerage and research
services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) to the Portfolio and/or the other
accounts over which the Adviser or its affiliates exercise investment
discretion. The Adviser is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess
of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Adviser determines in
good faith that such amount of commission is reasonable in relation to
the value of the brokerage and research services provided by such
broker or dealer. This determination may be viewed in terms of either
that particular transaction or the overall responsibilities which the
Adviser and its affiliates have with respect to accounts over which
they exercise investment discretion. The Trustees of the Fund shall
periodically review the commissions paid by the Portfolio to determine
if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor.
The Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of
the Fund are or may be or become interested in the Adviser as
directors, officers or otherwise and that directors, officers and
stockholders of the Adviser are or may be or become similarly
interested in the Fund, and that the Adviser may be or become
interested in the Fund as a shareholder or otherwise.
3. The Adviser will be compensated on the following basis for the
services and facilities to be furnished hereunder. The Adviser shall
receive a monthly management fee, payable monthly as soon as
practicable after the last day of each month, composed of a Group Fee
and an Individual Fund Fee.
(a) Group Fee Rate. The Group Fee Rate shall be based upon the
monthly average of the net assets of the registered investment
companies having Advisory and Service or Management Contracts with the
Adviser (computed in the manner set forth in the fund's Declaration of
Trust or other organizational document) determined as of the close of
business on each business day throughout the month. The Group Fee Rate
shall be determined on a cumulative basis pursuant to the following
schedule:
Average Net Assets Annualized Fee Rate (for each
level)
[$] 0 - (($)) 3 billion .3700%
3 - 6 .3400
6 - 9 .3100
9 - 12 .2800
12 - 15 .2500
15 - 18 .2200
18 - 21 .2000
21 - 24 .1900
24 - 30 .1800
30 - 36 .1750
36 - 42 .1700
42 - 48 .1650
48 - 66 .1600
66 - 84 .1550
84 - 120 .1500
120 - 156 .1450
156 - 192 .1400
192 - 228 .1350
228 - 264 .1300
264 - 300 .1275
300 - 336 .1250
336 - 372 .1225
[Over 372] [.1200]
((372 - 408)) ((.1200))
((408 - 444)) ((.1175))
((444 - 480)) ((.1150))
((480 - 516)) ((.1125))
((Over 516)) ((.1100))
(b) Individual Fund Fee Rate. The Individual Fund Fee Rate shall be
.25%.
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
[is]computed upon the average net assets for the business days it is
so in effect for that month.
4. It is understood that the Portfolio will pay all its expenses,
which expenses payable by the Portfolio shall include, without
limitation, (i) interest and taxes; (ii) brokerage commissions and
other costs in connection with the purchase or sale of securities and
other investment instruments; (iii) fees and expenses of the Fund's
Trustees other than those who are "interested persons" of the Fund or
the Adviser; (iv) legal and audit expenses; (v) custodian, registrar
and transfer agent fees and expenses; (vi) fees and expenses related
to the registration and qualification of the Fund and the Portfolio's
shares for distribution under state and federal securities laws; (vii)
expenses of printing and mailing reports and notices and proxy
material to shareholders of the Portfolio; (viii) all other expenses
incidental to holding meetings of the Portfolio's shareholders,
including proxy solicitations therefor; (ix) a pro rata share, based
on relative net assets of the Portfolio and other registered
investment companies having Advisory and Service or Management
Contracts with the Adviser, of 50% of insurance premiums for fidelity
and other coverage; (x) its proportionate share of association
membership dues; (xi) expenses of typesetting for printing
Prospectuses and Statements of Additional Information and supplements
thereto; (xii) expenses of printing and mailing Prospectuses and
Statements of Additional Information and supplements thereto sent to
existing shareholders; and (xiii) such non-recurring or extraordinary
expenses as may arise, including those relating to actions, suits or
proceedings to which the Portfolio is a party and the legal obligation
which the Portfolio may have to indemnify the Fund's Trustees and
officers with respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and
engage in other activities, provided, however, that such other
services and activities do not, during the term of this Contract,
interfere, in a material manner, with the Adviser's ability to meet
all of its obligations with respect to rendering services to the
Portfolio hereunder. In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Adviser, the Adviser shall not be subject
to liability to the Portfolio or to any shareholder of the Portfolio
for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses that may be sustained in the
purchase, holding or sale of any security or other investment
instrument.
6. (a) Subject to prior termination as provided in sub-paragraph (d)
of this paragraph 6, this Contract shall continue in force until June
30, [1995] ((2000)) and indefinitely thereafter, but only so long as
the continuance after such date shall be specifically approved at
least annually by vote of the Trustees of the Fund or by vote of a
majority of the outstanding voting securities of the Portfolio.
(b) This Contract may be modified by mutual consent[, such consent
on the part of the Fund to be authorized by vote of a majority of the
outstanding voting securities of the Portfolio.] ((subject to the
provisions of Section 15 of the 1940 Act, as modified by or
interpreted by any applicable order or orders of the Securities and
Exchange Commission (the "Commission") or any rules or regulations
adopted by, or interpretative releases of, the Commission.))
(c) In addition to the requirements of sub-paragraphs (a) and (b) of
this paragraph 6, the terms of any continuance or modification of this
Contract must have been approved by the vote of a majority of those
Trustees of the Fund who are not parties to the Contract or interested
persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment
of any penalty, by action of its Trustees or Board of Directors, as
the case may be, or with respect to the Portfolio by vote of a
majority of the outstanding voting securities of the Portfolio. This
Contract shall terminate automatically in the event of its assignment.
7. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Declaration of Trust
or other organizational document and agrees that the obligations
assumed by the Fund pursuant to this Contract shall be limited in all
cases to the Portfolio and its assets, and the Adviser shall not seek
satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio or any other Portfolios of the Fund. In
addition, the Adviser shall not seek satisfaction of any such
obligations from the Trustees or any individual Trustee. The Adviser
understands that the rights and obligations of any Portfolio under the
Declaration of Trust or other organizational document are separate and
distinct from those of any and all other Portfolios.
8. This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Massachusetts, without giving
effect to the choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have
the respective meanings specified in the 1940 Act, as now in effect or
as hereafter amended, and subject to such orders as may be granted by
the [Securities and Exchange]Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as
of the date written above.
[SIGNATURE LINES OMITTED]
EXHIBIT 3
((UNDERLINED)) LANGUAGE WILL BE ADDED
[BRACKETED] LANGUAGE WILL BE DELETED
[FORM OF]
MANAGEMENT CONTRACT
BETWEEN
FIDELITY COURT STREET TRUST:
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
[ AGREEMENT] ((AMENDMENT made)) this [1st] __ day of [January]
_____, [1992] ((2000)) by and between Fidelity Court 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 Spartan Connecticut Municipal Income ((Fund)) [Portfolio]
(hereinafter called the "Portfolio"), and Fidelity Management &
Research Company, a Massachusetts corporation (hereinafter called the
["] (("))Adviser") ((as set forth in its entirety below.))
((Required authorization and approval by shareholders and Trustees
having been obtained, the Fund, on behalf of the Portfolio, and the
Adviser hereby consent, pursuant to Paragraph 6 of the existing
Management Contract dated January 1, 1992, to a modification of said
Contract in the manner set forth below. The Amended Management
Contract shall, when executed by duly authorized officers of the Fund
and Adviser, take effect on January 1, 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 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 undertakes to pay all expenses involved in the
operation of the Portfolio, except the following, which shall be paid
by the Portfolio: (i) taxes; (ii) the fees and expenses of all
Trustees of the Fund who are not "interested persons" of the Fund or
of the Adviser; (iii) brokerage fees and commissions; (iv) interest
expenses with respect to borrowings by the Portfolio; and (v) such
non-recurring and extraordinary expenses as may arise, including
actions, suits or proceedings to which the Portfolio is or is
threatened to be a party and the legal obligation that the Portfolio
may have to indemnify the Fund's Trustees and officers with respect
thereto. It is understood that service charges billed directly to
shareholders of the Portfolio, including charges for exchanges,
redemptions, or other services, shall not be payable by the Adviser,
but may be received and retained by the Adviser or its affiliates.]
(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. [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, at the annual
rate of .55% of the average net assets of the Portfolio (computed in
the manner set forth in the Fund's Declaration of Trust) determined as
of the close of business on each day throughout the month; provided
that the fee, so computed, shall be reduced by the compensation,
including reimbursement of expenses, paid by the Portfolio to those
Trustees who are not "interested persons" of the Fund or the Adviser.
In the case of initiation or termination of this Contract during any
month, the fee shall be reduced proportionately based on 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.]((The Adviser will be compensated on the following basis
for the services and facilities to be furnished hereunder. The Adviser
shall receive a monthly management fee, payable monthly as soon as
practicable after the last day of each month, composed of a Group Fee
and an Individual Fund Fee.))
(((a) Group Fee Rate. The Group Fee Rate shall be based upon the
monthly average of the net assets of the registered investment
companies having Advisory and Service or Management Contracts with the
Adviser (computed in the manner set forth in the fund's Declaration of
Trust or other organizational document) determined as of the close of
business on each business day throughout the month. The Group Fee Rate
shall be determined on a cumulative basis pursuant to the following
schedule:))
((Average Net Assets Annualized Fee Rate (for each
level)
0 - $ 3 billion .3700%
3 - 6 .3400
6 - 9 .3100
9 - 12 .2800
12 - 15 .2500
15 - 18 .2200
18 - 21 .2000
21 - 24 .1900
24 - 30 .1800
30 - 36 .1750
36 - 42 .1700
42 - 48 .1650
48 - 66 .1600
66 - 84 .1550
84 - 120 .1500
120 - 156 .1450
156 - 192 .1400
192 - 228 .1350
228 - 264 .1300
264 - 300 .1275
300 - 336 .1250
336 - 372 .1225
372 - 408 .1200
408 - 444 .1175
444 - 480 .1150
480 - 516 .1125
Over 516 .1100))
(((b) Individual Fund Fee Rate. The Individual Fund Fee Rate shall
be .25%
The sum of the Group Fee Rate, calculated as described above to the
nearest millionth, and the Individual Fund Fee Rate shall constitute
the Annual Management Fee Rate. One-twelfth of the Annual Management
Fee Rate shall be applied to the average of the net assets of the
Portfolio (computed in the manner set forth in the Fund's Declaration
of Trust or other organizational document) determined as of the close
of business on each business day throughout the month.))
(((c) In case of termination of this Contract during any month, the
fee for that month shall be reduced proportionately on the basis of
the number of business days during which it is in effect, and the fee
computed upon the average net assets for the business days it is so in
effect for that month.))
((4. It is understood that the Portfolio will pay all its expenses,
which expenses payable by the Portfolio shall include, without
limitation, (i) interest and taxes; (ii) brokerage commissions and
other costs in connection with the purchase or sale of securities and
other investment instruments; (iii) fees and expenses of the Fund's
Trustees other than those who are "interested persons" of the Fund or
the Adviser; (iv) legal and audit expenses; (v) custodian, registrar
and transfer agent fees and expenses; (vi) fees and expenses related
to the registration and qualification of the Fund and the Portfolio's
shares for distribution under state and federal securities laws; (vii)
expenses of printing and mailing reports and notices and proxy
material to shareholders of the Portfolio; (viii) all other expenses
incidental to holding meetings of the Portfolio's shareholders,
including proxy solicitations therefor; (ix) a pro rata share, based
on relative net assets of the Portfolio and other registered
investment companies having Advisory and Service or Management
Contracts with the Adviser, of 50% of insurance premiums for fidelity
and other coverage; (x) its proportionate share of association
membership dues; (xi) expenses of typesetting for printing
Prospectuses and Statements of Additional Information and supplements
thereto; (xii) expenses of printing and mailing Prospectuses and
Statements of Additional Information and supplements thereto sent to
existing shareholders; and (xiii) such non-recurring or extraordinary
expenses as may arise, including those relating to actions, suits or
proceedings to which the Portfolio is a party and the legal obligation
which the Portfolio may have to indemnify the Fund's Trustees and
officers with respect thereto.))
[4.]((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.))
[5.]((6.))(a) Subject to prior termination as provided in
sub((-))[-]paragraph (d) of this paragraph [5,] ((6,)) this Contract
shall continue in force until ((June 30, 2000)) [May 31, 1992] and
indefinitely thereafter, but only so long as the continuance after
such date shall be specifically approved at least annually by vote of
the Trustees of the Fund or by vote of a majority of the outstanding
voting securities of the Portfolio.
(b) This Contract may be modified by mutual consent [, such consent
on the part of the Fund to be authorized by vote of a majority of the
outstanding voting securities of the Portfolio] ((subject to the
provisions of Section 15 of the 1940 Act, as modified by or
interpreted by any applicable order or orders of the Securities and
Exchange Commission (the "Commission") or any rules or regulations
adopted by, or interpretative releases of, the Commission.))
(c) In addition to the requirements of ((sub-))[-]((paragraphs)) (a)
and (b) of this paragraph [5, ] ((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.
[6.]((7.)) The Adviser is hereby expressly put on notice of the
limitation of shareholder liability as set forth in the Fund's
Declaration of Trust ((or other organizational document)) and agrees
that the obligations assumed by the Fund pursuant to this Contract
shall be limited in all cases to the Portfolio and its assets, and the
Adviser shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio or any other
Portfolios of the Fund. In addition, the Adviser shall not seek
satisfaction of any such obligations from the Trustees or any
individual Trustee. The Adviser understands that the rights and
obligations of any Portfolio under the Declaration of Trust ((or other
organizational document)) are separate and distinct from those of any
and all other Portfolios.
((8. This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Massachusetts, without giving
effect to the choice of laws provisions thereof.))
The terms ["]((")) vote of a majority of the outstanding voting
securities," ["](("))assignment" and ["](("))interested"persons," when
used herein, shall have the respective meanings specified in the 1940
Act, as now in effect or as hereafter amended, and subject to such
orders as may be granted by the [Securities and Exchange] Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, ((and their respective seals to be hereunto affixed,)) all
as of the date written above.
[SIGNATURE LINES OMITTED]
EXHIBIT 4
((UNDERLINED)) LANGUAGE WILL BE ADDED
[BRACKETED] LANGUAGE WILL BE DELETED
[FORM OF]
MANAGEMENT CONTRACT
BETWEEN
FIDELITY COURT STREET TRUST:
SPARTAN FLORIDA MUNICIPAL INCOME FUND
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
[AGREEMENT] ((AMENDMENT made)) this [20th] __ day of [February]
_______, [1992] ((2000)) by and between Fidelity Court 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 Spartan Florida Municipal Income ((Fund))
[Portfolio] (hereinafter called the "Portfolio"), and Fidelity
Management & Research Company, a Massachusetts corporation
(hereinafter called the ["] (("))Adviser") ((as set forth in its
entirety below.))
((Required authorization and approval by shareholders and Trustees
having been obtained, the Fund, on behalf of the Portfolio, and the
Adviser hereby consent, pursuant to Paragraph 6 of the existing
Management Contract dated February 20, 1992, to a modification of said
Contract in the manner set forth below. The Amended Management
Contract shall, when executed by duly authorized officers of the Fund
and Adviser, take effect on January 1, 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 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 undertakes to pay all expenses involved in the
operation of the Portfolio, except the following, which shall be paid
by the Portfolio: (i) taxes; (ii) the fees and expenses of all
Trustees of the Fund who are not "interested persons" of the Fund or
of the Adviser; (iii) brokerage fees and commissions; (iv) interest
expenses with respect to borrowings by the Portfolio; and (v) such
non-recurring and extraordinary expenses as may arise, including
actions, suits or proceedings to which the Portfolio is or is
threatened to be a party and the legal obligation that the Portfolio
may have to indemnify the Fund's Trustees and officers with respect
thereto. It is understood that service charges billed directly to
shareholders of the Portfolio, including charges for exchanges,
redemptions, or other services, shall not be payable by the Adviser,
but may be received and retained by the Adviser or its affiliates.]
(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. [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, at the annual
rate of .55% of the average net assets of the Portfolio (computed in
the manner set forth in the Fund's Declaration of Trust) determined as
of the close of business on each day throughout the month; provided
that the fee, so computed, shall be reduced by the compensation,
including reimbursement of expenses, paid by the Portfolio to those
Trustees who are not "interested persons" of the Fund or the Adviser.
In the case of initiation or termination of this Contract during any
month, the fee shall be reduced proportionately based on 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.]((The Adviser will be compensated on the following basis
for the services and facilities to be furnished hereunder. The Adviser
shall receive a monthly management fee, payable monthly as soon as
practicable after the last day of each month, composed of a Group Fee
and an Individual Fund Fee.))
(((a) Group Fee Rate. The Group Fee Rate shall be based upon the
monthly average of the net assets of the registered investment
companies having Advisory and Service or Management Contracts with the
Adviser (computed in the manner set forth in the fund's Declaration of
Trust or other organizational document) determined as of the close of
business on each business day throughout the month. The Group Fee Rate
shall be determined on a cumulative basis pursuant to the following
schedule:))
((Average Net Assets Annualized Fee Rate (for each
level)
0 - $ 3 billion .3700%
3 - 6 .3400
6 - 9 .3100
9 - 12 .2800
12 - 15 .2500
15 - 18 .2200
18 - 21 .2000
21 - 24 .1900
24 - 30 .1800
30 - 36 .1750
36 - 42 .1700
42 - 48 .1650
48 - 66 .1600
66 - 84 .1550
84 - 120 .1500
120 - 156 .1450
156 - 192 .1400
192 - 228 .1350
228 - 264 .1300
264 - 300 .1275
300 - 336 .1250
336 - 372 .1225
372 - 408 .1200
408 - 444 .1175
444 - 480 .1150
480 - 516 .1125
Over 516 .1100))
(((b) Individual Fund Fee Rate. The Individual Fund Fee Rate shall
be .25%
The sum of the Group Fee Rate, calculated as described above to the
nearest millionth, and the Individual Fund Fee Rate shall constitute
the Annual Management Fee Rate. One-twelfth of the Annual Management
Fee Rate shall be applied to the average of the net assets of the
Portfolio (computed in the manner set forth in the Fund's Declaration
of Trust or other organizational document) determined as of the close
of business on each business day throughout the month.))
(((c) In case of termination of this Contract during any month, the
fee for that month shall be reduced proportionately on the basis of
the number of business days during which it is in effect, and the fee
computed upon the average net assets for the business days it is so in
effect for that month.))
((4. It is understood that the Portfolio will pay all its expenses,
which expenses payable by the Portfolio shall include, without
limitation, (i) interest and taxes; (ii) brokerage commissions and
other costs in connection with the purchase or sale of securities and
other investment instruments; (iii) fees and expenses of the Fund's
Trustees other than those who are "interested persons" of the Fund or
the Adviser; (iv) legal and audit expenses; (v) custodian, registrar
and transfer agent fees and expenses; (vi) fees and expenses related
to the registration and qualification of the Fund and the Portfolio's
shares for distribution under state and federal securities laws; (vii)
expenses of printing and mailing reports and notices and proxy
material to shareholders of the Portfolio; (viii) all other expenses
incidental to holding meetings of the Portfolio's shareholders,
including proxy solicitations therefor; (ix) a pro rata share, based
on relative net assets of the Portfolio and other registered
investment companies having Advisory and Service or Management
Contracts with the Adviser, of 50% of insurance premiums for fidelity
and other coverage; (x) its proportionate share of association
membership dues; (xi) expenses of typesetting for printing
Prospectuses and Statements of Additional Information and supplements
thereto; (xii) expenses of printing and mailing Prospectuses and
Statements of Additional Information and supplements thereto sent to
existing shareholders; and (xiii) such non-recurring or extraordinary
expenses as may arise, including those relating to actions, suits or
proceedings to which the Portfolio is a party and the legal obligation
which the Portfolio may have to indemnify the Fund's Trustees and
officers with respect thereto.))
[4.]((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.))
[5.]((6.))(a) Subject to prior termination as provided in
sub((-))[-]paragraph (d) of this paragraph [5,] ((6,)) this Contract
shall continue in force until ((June 30, 2000)) [May 31, 1993] and
indefinitely thereafter, but only so long as the continuance after
such date shall be specifically approved at least annually by vote of
the Trustees of the Fund or by vote of a majority of the outstanding
voting securities of the Portfolio.
(b) This Contract may be modified by mutual consent [, such consent
on the part of the Fund to be authorized by vote of a majority of the
outstanding voting securities of the Portfolio] ((subject to the
provisions of Section 15 of the 1940 Act, as modified by or
interpreted by any applicable order or orders of the Securities and
Exchange Commission (the "Commission") or any rules or regulations
adopted by, or interpretative releases of, the Commission.))
(c) In addition to the requirements of ((sub-))[-]((paragraphs)) (a)
and (b) of this paragraph [5, ]((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.
[6.]((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 5
((UNDERLINED)) LANGUAGE WILL BE ADDED
[BRACKETED] LANGUAGE WILL BE DELETED
[FORM OF]
MANAGEMENT CONTRACT
BETWEEN
FIDELITY COURT STREET TRUST:
SPARTAN NEW JERSEY MUNICIPAL INCOME FUND
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
[ AGREEMENT] ((AMENDMENT made)) this [1st] __ day of [January]
_______, [1992] ((2000)) by and between Fidelity Court 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 Spartan New Jersey Municipal [High Yield]
Income ((Fund)) [Portfolio] (hereinafter called the "Portfolio"), and
Fidelity Management & Research Company, a Massachusetts corporation
(hereinafter called the ["](("))Adviser") ((as set forth in its
entirety below.))
((Required authorization and approval by shareholders and Trustees
having been obtained, the Fund, on behalf of the Portfolio, and the
Adviser hereby consent, pursuant to Paragraph 6 of the existing
Management Contract dated January 1, 1992, to a modification of said
Contract in the manner set forth below. The Amended Management
Contract shall, when executed by duly authorized officers of the Fund
and Adviser, take effect on January 1, 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 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 undertakes to pay all expenses involved in the
operation of the Portfolio, except the following, which shall be paid
by the Portfolio: (i) taxes; (ii) the fees and expenses of all
Trustees of the Fund who are not "interested persons" of the Fund or
of the Adviser; (iii) brokerage fees and commissions; (iv) interest
expenses with respect to borrowings by the Portfolio; and (v) such
non-recurring and extraordinary expenses as may arise, including
actions, suits or proceedings to which the Portfolio is or is
threatened to be a party and the legal obligation that the Portfolio
may have to indemnify the Fund's Trustees and officers with respect
thereto. It is understood that service charges billed directly to
shareholders of the Portfolio, including charges for exchanges,
redemptions, or other services, shall not be payable by the Adviser,
but may be received and retained by the Adviser or its affiliates.]
(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. [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, at the annual
rate of .55% of the average net assets of the Portfolio (computed in
the manner set forth in the Fund's Declaration of Trust) determined as
of the close of business on each day throughout the month; provided
that the fee, so computed, shall be reduced by the compensation,
including reimbursement of expenses, paid by the Portfolio to those
Trustees who are not "interested persons" of the Fund or the Adviser.
In the case of initiation or termination of this Contract during any
month, the fee shall be reduced proportionately based on 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.]((The Adviser will be compensated on the following basis
for the services and facilities to be furnished hereunder. The Adviser
shall receive a monthly management fee, payable monthly as soon as
practicable after the last day of each month, composed of a Group Fee
and an Individual Fund Fee.))
(((a) Group Fee Rate. The Group Fee Rate shall be based upon the
monthly average of the net assets of the registered investment
companies having Advisory and Service or Management Contracts with the
Adviser (computed in the manner set forth in the fund's Declaration of
Trust or other organizational document) determined as of the close of
business on each business day throughout the month. The Group Fee Rate
shall be determined on a cumulative basis pursuant to the following
schedule:))
((Average Net Assets Annualized Fee Rate (for each
level)
0 - $ 3 billion .3700%
3 - 6 .3400
6 - 9 .3100
9 - 12 .2800
12 - 15 .2500
15 - 18 .2200
18 - 21 .2000
21 - 24 .1900
24 - 30 .1800
30 - 36 .1750
36 - 42 .1700
42 - 48 .1650
48 - 66 .1600
66 - 84 .1550
84 - 120 .1500
120 - 156 .1450
156 - 192 .1400
192 - 228 .1350
228 - 264 .1300
264 - 300 .1275
300 - 336 .1250
336 - 372 .1225
372 - 408 .1200
408 - 444 .1175
444 - 480 .1150
480 - 516 .1125
Over 516 .1100))
(((b) Individual Fund Fee Rate. The Individual Fund Fee Rate shall
be .25%
The sum of the Group Fee Rate, calculated as described above to the
nearest millionth, and the Individual Fund Fee Rate shall constitute
the Annual Management Fee Rate. One-twelfth of the Annual Management
Fee Rate shall be applied to the average of the net assets of the
Portfolio (computed in the manner set forth in the Fund's Declaration
of Trust or other organizational document) determined as of the close
of business on each business day throughout the month.))
(((c) In case of termination of this Contract during any month, the
fee for that month shall be reduced proportionately on the basis of
the number of business days during which it is in effect, and the fee
computed upon the average net assets for the business days it is so in
effect for that month.))
((4. It is understood that the Portfolio will pay all its expenses,
which expenses payable by the Portfolio shall include, without
limitation, (i) interest and taxes; (ii) brokerage commissions and
other costs in connection with the purchase or sale of securities and
other investment instruments; (iii) fees and expenses of the Fund's
Trustees other than those who are "interested persons" of the Fund or
the Adviser; (iv) legal and audit expenses; (v) custodian, registrar
and transfer agent fees and expenses; (vi) fees and expenses related
to the registration and qualification of the Fund and the Portfolio's
shares for distribution under state and federal securities laws; (vii)
expenses of printing and mailing reports and notices and proxy
material to shareholders of the Portfolio; (viii) all other expenses
incidental to holding meetings of the Portfolio's shareholders,
including proxy solicitations therefor; (ix) a pro rata share, based
on relative net assets of the Portfolio and other registered
investment companies having Advisory and Service or Management
Contracts with the Adviser, of 50% of insurance premiums for fidelity
and other coverage; (x) its proportionate share of association
membership dues; (xi) expenses of typesetting for printing
Prospectuses and Statements of Additional Information and supplements
thereto; (xii) expenses of printing and mailing Prospectuses and
Statements of Additional Information and supplements thereto sent to
existing shareholders; and (xiii) such non-recurring or extraordinary
expenses as may arise, including those relating to actions, suits or
proceedings to which the Portfolio is a party and the legal obligation
which the Portfolio may have to indemnify the Fund's Trustees and
officers with respect thereto.))
[4.]((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.))
[5.]((6.))(a) Subject to prior termination as provided in
sub((-))[-]paragraph (d) of this paragraph [5,] ((6,)) this Contract
shall continue in force until ((June 30, 2000)) [May 31, 1992] and
indefinitely thereafter, but only so long as the continuance after
such date shall be specifically approved at least annually by vote of
the Trustees of the Fund or by vote of a majority of the outstanding
voting securities of the Portfolio.
(b) This Contract may be modified by mutual consent [, such consent
on the part of the Fund to be authorized by vote of a majority of the
outstanding voting securities of the Portfolio] ((subject to the
provisions of Section 15 of the 1940 Act, as modified by or
interpreted by any applicable order or orders of the Securities and
Exchange Commission (the "Commission") or any rules or regulations
adopted by, or interpretative releases of, the Commission.))
(c) In addition to the requirements of ((sub-))[-]((paragraphs)) (a)
and (b) of this paragraph [5, ]((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.
[6.]((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 6
FORM OF
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the Agreement) is made as
of the __ day of ____, by and between Fidelity Court Street Trust
(Court Street Trust), on behalf of Spartan Municipal Income Fund (the
Fund), a separate series of Court Street Trust, and Fidelity Municipal
Trust (Municipal Trust), each a business trust duly formed under the
laws of the Commonwealth of Massachusetts.
This Agreement is intended to be, and is adopted as, a plan of
reorganization within the meaning of Section 368(a)(1)(F) of the
Internal Revenue Code of 1986, as amended (the Code). The
reorganization will comprise (a) the transfer of all of the assets of
the Fund to a series of Municipal Trust (the Series) solely in
exchange for shares of beneficial interest of the Series (the Series
Shares) and the assumption by the Series of the Fund's liabilities;
and (b) the constructive distribution of such Series Shares by the
Fund to its shareholders (Fund Shareholder(s)) in complete liquidation
and termination of the Fund, in exchange for all of the Fund's
outstanding shares (Fund Shares). The Fund shall receive shares of the
Series equal to the number of Fund Shares on the Closing Date (as
defined below). Immediately thereafter, the Fund shall then distribute
to each Fund Shareholder one Series Share for each Fund Share held by
the shareholder on the Closing Date. The foregoing transactions are
referred to herein as the "Reorganization."
In consideration of the mutual promises and subject to the terms and
conditions herein, the parties covenant and agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE FUND
Court Street Trust, on behalf of the Fund, represents and warrants as
follows:
(a) The Fund is a series of Court Street Trust, a business trust duly
formed, validly existing, and in good standing under the laws of the
Commonwealth of Massachusetts, and has the power to own all of its
properties and assets and to carry out its obligations under this
Agreement. It has all necessary federal, state, and local
authorizations to carry out its business as now being conducted and to
carry out this Agreement;
(b) The Fund is a series of Court Street Trust, which is duly
registered as an open-end management investment company under the
Investment Company Act of 1940 (the 1940 Act), as amended, and such
registration is in full force and effect;
(c) The Fund is not in, and the execution, delivery and performance
of this Agreement will not result in a violation of any provision of
the Amended and Restated Declaration of Trust or the Bylaws of Court
Street Trust, or, to the Fund's knowledge, of any agreement,
indenture, instrument, contract, lease or other undertaking to which
the Fund is a party or by which the Fund is bound or result in the
acceleration of any obligation or the imposition of any penalty under
any agreement, judgment or decree to which the Fund is a party or is
bound;
(d) The Fund has no material contracts or other commitments (other
than this Agreement) that will not be terminated without liability to
the Fund on or prior to the Closing Date;
(e) To the Fund's knowledge, no material legal, administrative, or
other proceeding or investigation of, or before, any court or
governmental body presently is pending or threatened against the Fund
or any of its properties or assets that assert liability on the part
of the Fund, except as previously disclosed in writing to Municipal
Trust. The Fund knows of no facts that might form the basis for the
institution of such proceedings;
(f) The Fund has filed or will file all federal and state tax returns
that, to the knowledge of the Fund's officers, are required to be
filed by the Fund and has paid or will pay all federal and state taxes
shown to be due on said returns or provision shall have been made for
the payment thereof, and, to the best of the Fund's knowledge, no such
return is currently under audit and no assessment has been asserted
with respect to such returns;
(g) All of the issued and outstanding shares of the Fund are, and at
the Closing Date will be, duly and validly issued and outstanding and
fully paid and nonassessable as a matter of Massachusetts law (except
as disclosed in the Fund's Statement of Additional Information) and
have been offered for sale in conformity with all applicable federal
securities laws. All of the issued and outstanding shares of the Fund
will, at the Closing Date, be held by the persons and in the amounts
as certified in accordance with the provisions of this Agreement;
(h) The information to be furnished by the Fund for use in
applications for orders, registration statements, proxy materials and
other documents that may be necessary in connection with the
transactions contemplated hereby shall be accurate and complete and
shall comply in all material respects with federal securities and
other laws and regulations thereunder applicable thereto;
(i) At both the Valuation Time (as defined in Section 4) and the
Closing Date (as defined in Section 6), the Fund will have the full
right, power, and authority to sell, assign, transfer, and deliver its
portfolio securities and any other assets of the Fund to be
transferred to the Series pursuant to this Agreement. As of the
Closing Date, subject only to the delivery of the Fund's portfolio
securities and any such other assets as contemplated by this
Agreement, the Series will acquire the Fund's portfolio securities and
any such other assets subject to no encumbrances, liens, or security
interests (except for those that may arise in the ordinary course and
are disclosed to the Series) and without any restrictions upon the
transfer thereof;
(j) The execution, delivery, and performance of this Agreement will
have been duly authorized prior to the Closing Date by all necessary
corporate action on the part of the Fund, and this Agreement
constitutes a valid and binding obligation of the Fund enforceable in
accordance with its terms, subject to shareholder approval;
(k) To the best knowledge of the Fund's management, there is no plan
or intention by any of the Fund's shareholders to sell, exchange or
otherwise dispose of any of the Series Shares to be received in the
Reorganization;
(l) The Fund shares are widely held and may be purchased and redeemed
upon request;
(m) Immediately following consummation of the Reorganization, the
Fund Shareholders will own all of the Series Shares and will own such
shares solely by reason of their ownership of the Fund Shares
immediately prior to the Reorganization;
(n) Immediately following the consummation of the Reorganization,
Municipal Trust will hold, on behalf of the Series, the same assets
and be subject to the same liabilities that the Fund held or was
subject to immediately prior thereto, except for assets used to pay
expenses incurred in connection with the Reorganization. Assets used
to pay expenses and all distributions (except for distributions and
redemptions arising in the ordinary course of the Fund's business as
an open-end investment company) made by the Fund immediately preceding
the Reorganization will, in the aggregate, constitute less than 1% of
the net assets of the Fund;
(o) At the time of the Reorganization, the Fund will not have
outstanding any warrants, options, convertible securities, or any
other type of right pursuant to which any person could acquire shares
of beneficial interest in the Fund;
(p) The Fund's liabilities to be assumed by the Series in the
Reorganization were incurred by the Fund in the ordinary course of its
business and are associated with the assets to be transferred;
(q) Fund Shareholders each will pay their own expenses, if any,
incurred in connection with the Reorganization;
(r) The fair market value of the Fund's assets to be transferred by
the Fund to the Series will equal or exceed the Fund's liabilities to
be assumed by the Series plus the liabilities to which the transferred
assets are subject;
(s) The Fund is a regulated investment company as defined in Section
851 of the Code;
(t) The Fund is not under the jurisdiction of a court in a proceeding
under Title 11 of the United States Code or similar case within the
meaning of Section 368(a)(3)(A) of the Code;
2. REPRESENTATIONS AND WARRANTIES OF MUNICIPAL TRUST
Municipal Trust represents and warrants as follows:
(a) Municipal Trust is a business trust duly formed, validly
existing, and in good standing under the laws of the Commonwealth of
Massachusetts. It has all necessary federal, state, and local
authorizations to carry out its business as now being conducted and to
carry out this Agreement;
(b) Municipal Trust is duly registered as an open-end management
investment company under the 1940 Act, and the Series is a duly
established and designated series of Municipal Trust;
(c) Municipal Trust is not in, and the execution, delivery and
performance of this Agreement will not result in a violation of any
provision of the Amended and Restated Declaration of Trust or
Municipal Trust's Bylaws, or, to Municipal Trust's knowledge, of any
agreement, indenture, instrument, contract, lease or other undertaking
to which Municipal Trust is a party or by which Municipal Trust is
bound or result in the acceleration of any obligation or the
imposition of any penalty under any agreement, judgment or decree to
which Municipal Trust is a party or is bound;
(d) To Municipal Trust's knowledge, no material legal,
administrative, or other proceeding or investigation of, or before,
any court or governmental body presently is pending or threatened
against Municipal Trust or any of its properties or assets that assert
liability on the part of Municipal Trust, except as previously
disclosed in writing to Municipal Trust. Municipal Trust knows of no
facts that might form the basis for the institution of such
proceedings;
(e) Municipal Trust intends for the Series to be a regulated
investment company under Section 851 of the Code;
(f) Prior to the Closing Date, there shall be no issued and
outstanding Series Shares or any other securities issued by the Series
(except for the one share that may be issued to FMR); Series Shares
issued in connection with the transactions contemplated herein will be
duly and validly issued and outstanding, fully paid and non-assessable
under Massachusetts law on the Closing Date;
(g) The execution, delivery, and performance of this Agreement will
have been duly authorized prior to the Closing Date by all necessary
corporate action on the part of Municipal Trust, and, upon its proper
execution, this Agreement will constitute a valid and binding
obligation of Municipal Trust enforceable against the Series in
accordance with its terms;
(h) As of the Closing Date, the Series Shares will have been duly
authorized and, when so issued and delivered, will be duly and validly
issued shares of the Series, fully paid and non-assessable under
Massachusetts law except that under Massachusetts law, shareholders of
a Massachusetts business trust, under certain circumstances, may be
held personally liable for obligations of Municipal Trust;
(i) The fair market value of the Series Shares to be received by the
Fund Shareholders will be equal to the fair market value of their Fund
Shares surrendered in exchange therefor;
(j) Municipal Trust has no plan or intention on behalf of the Series
to issue additional Series Shares following the Reorganization other
than in the ordinary course of the business of the Series as the
series of a registered open-end investment company;
(k) Municipal Trust has no plan or intention to redeem or otherwise
reacquire any of the Series Shares issued to the Fund Shareholders
pursuant to the Reorganization other than through redemptions arising
in the ordinary course of the business of the Series as a series of a
registered open-end investment company;
(l) Following the Reorganization, Municipal Trust, on behalf of the
Series, will continue the Fund's historic business;
(m) No consideration other than series shares will be issued in
exchange for the Fund shares in the Reorganization.
(n) At the time of the Reorganization, there will be no intercompany
indebtedness existing between the Series and the Fund that was issued,
acquired, or that will be settled at a discount.
(o) At the time of the Reorganization, the Series will be a regulated
investment company as defined in section 851 of the Code.
(p) Municipal Trust has no plan or intention to sell or otherwise
dispose of any of the Fund's assets to be acquired by the Series in
the Reorganization, except for dispositions made in the ordinary
course of its business or dispositions necessary to maintain the
status of the Series as a regulated investment company under Section
851 of the Code;
(q) The information to be furnished by Municipal Trust with respect
to the Series for use in applications for orders, registration
statements, proxy materials and other documents that may be necessary
in connection with the transactions contemplated hereby shall be
accurate and complete and shall comply in all material respects with
federal securities and other laws and regulations applicable thereto;
(r) Municipal Trust, on behalf of the Series, shall use all
reasonable efforts to obtain the approvals and authorizations required
by the 1933 Act and the 1940 Act as it may deem appropriate in order
to operate after the Closing Date; and
(s) To Municipal Trust's knowledge, no consent, approval,
authorization, or order of any court or governmental authority is
required for the consummation by the Series of the transactions
contemplated by this Agreement, except such as shall have been
obtained under the 1933 Act, the 1934 Act, and the 1940 Act.
(t) Municipal Trust, on behalf of the Series, will use the Employer
Identification Number that was used by the Fund.
3. REORGANIZATION
(a) Subject to the requisite approval of the Fund Shareholders, if
applicable, and to the other terms and conditions contained herein,
the Fund agrees to assign, convey, transfer, and deliver to the Series
established by Municipal Trust solely for the purpose of acquiring all
of the assets of the Fund (which Series has not issued any Series
Shares (except for one share that may be issued to FMR) or commenced
operations) as of the Closing Date all of the assets of the Fund of
any kind and nature existing on the Closing Date. The Series agrees in
exchange therefor (1) to assume all of the Fund's liabilities existing
on or after the Closing Date, whether or not determinable on the
Closing Date, and (2) to issue and deliver to the Fund the number of
full and fractional Series Shares equal to the value and number of
full and fractional shares of the Fund outstanding at the time of the
closing, as described in paragraph 6, as of the Closing Date provided
for in Section 6(a).
(b) The assets of the Fund to be acquired by the Series and allocated
thereto shall include, without limitation, all cash, cash equivalents,
securities, receivables (including interest or dividends receivables),
claims, choses in action, and other property owned by the Fund, and
any deferred or prepaid expenses shown as an asset on the books of the
Fund on the Closing Date. The Fund will pay or cause to be paid to the
Series any dividend or interest payments received by it on or after
the Closing Date with respect to the assets transferred to the Series
hereunder, and the Series will retain any dividend or interest
payments received by it after the Valuation Time (as defined in
Section 4) with respect to the assets transferred hereunder without
regard to the payment date thereof. The liabilities of the Fund to be
assumed by the Series and allocated thereto, shall include (except as
otherwise provided herein) all of the Fund's liabilities, debts,
obligations, and duties,of whatever kind or nature, whether absolute,
accrued, contingent, or otherwise, whether or not determinable on the
Closing Date, and whether or not specifically referred to in this
Agreement.
(c) Immediately upon delivery to the Fund of the Series Shares, the
individual Trustees of Court Street Trust or any officer duly
authorized by them, on the Court Street Trust's behalf as the then
sole shareholder of the Series, shall (1) approve (i) a Management
Contract between Municipal Trust, on behalf of the Series, and FMR,
(ii) Sub-Advisory Agreement between FMR and Fidelity Investments Money
Management, Inc., (iii) a Distribution and Service Plan under Rule
12b-1 under the 1940 Act between Municipal Trust, on behalf of the
Series, and Fidelity Distributors Corporation (FDC) substantively
identical to the contracts, agreement(s) and plan(s) currently in
effect with respect to the Fund immediately prior to the Closing Date
(as defined below), except as to the parties to such contract,
agreement and plan and (iii) the independent accountants who currently
serve in that capacity for the Fund, and (iv) the adoption of revised
fundamental policy described in Proposal 12 of the Proxy Statement.
(d) Pursuant to this Agreement, as soon after the Closing Date as is
conveniently practicable (the Liquidation Date), the Fund will
constructively distribute to the Fund Shareholders the Series Shares
pro rata in proportion to their respective shares of beneficial
interest in the Fund, such Fund Shareholders being shareholders of
record as determined as of the Valuation Time on the Closing Date in
accordance with the Court Street Trust Amended and Restated
Declaration of Trust, in liquidation of such Fund. Such distribution
will be accomplished by the Fund's transfer agent opening accounts on
the share records of the Series in the names of such Fund Shareholders
and transferring the Series Shares thereto. Each Fund Shareholder's
account shall be credited with the respective pro rata number of full
and fractional (rounded to the third decimal place) Series Shares due
that shareholder. All outstanding Fund Shares, including any
represented by certificates, shall simultaneously be canceled on the
Fund's share transfer records. The Series shall not issue certificates
representing Series Shares in connection with such distribution.
(e) Immediately after the distribution of the Series Shares as set
forth in Section 3(d), the Fund shall be liquidated and terminated,
and any such further actions shall be taken in connection therewith as
required by applicable law.
(f) Any transfer taxes payable upon issuance of Series Shares in a
name other than that of the registered holder on the Fund's books of
the Fund Shares constructively exchanged for the Series Shares shall
be paid by the person to whom such Series Shares are to be issued, as
a condition of such transfer.
(g) Any reporting responsibility of the Fund is and shall remain the
responsibility of the Fund up to and including the date on which it is
liquidated.
4. VALUATION
(a) The valuation time shall be the close of business of the New York
Stock Exchange on the Closing Date (the Valuation Time).
(b) The value of the Fund's net assets to be acquired by the Series
hereunder shall be the net asset value per share computed as of the
Valuation Time, using the valuation procedures set forth in the Fund's
then current Prospectus and Statement of Additional Information.
(c) The number, value, and denomination of full and fractional Series
Shares to be issued in exchange for the Fund's net assets shall be
equal to the number, value, and denomination of full and fractional
Fund Shares outstanding on the Closing Date.
(d) All computations pursuant to this Section shall be made by
Fidelity Service Company, Inc. (FSC), a wholly-owned subsidiary of FMR
Corp., in accordance with its regular practice as pricing agent for
the Fund.
5. FEES; EXPENSES
(a) Municipal Trust and the Fund each represents that there is no
person who dealt with it who by reason of such dealings is entitled to
any broker's or finder's fees or commissions arising out of the
transactions contemplated hereby.
(b) The Fund shall be responsible for all expenses, fees and other
charges in connection with the transactions contemplated by the
Agreement, provided that they do not exceed the fund's existing
expense cap. Expenses exceeding the the fund's expense cap, as
applicable, will be paid by FMR, but not including costs incurred in
connection with the purchase or sale of portfolio securities.
6. CLOSING DATE
(a) The transfer of the Fund's assets in exchange for the assumption
by the Series of the Fund's liabilities and the issuance of Series
Shares, as described above, together with related acts necessary to
consummate the same, (the Closing), unless otherwise provided herein,
shall occur at the principal office of the Court Street Trust and
Municipal Trust, 82 Devonshire Street, Boston, Massachusetts, on
February 23, 2000, or at such other place or date as the parties may
agree in writing (the Closing Date). All acts taking place at the
Closing shall be deemed to take place simultaneously as of the
Valuation Time or at such other time and/or place as the parties may
agree.
(b) In the event that, on the Closing Date (i) any of the markets for
securities held by the Fund are closed to trading, or (ii) trading
thereon is restricted, or (iii) trading or reporting of trading on
said markets or elsewhere is disrupted, all so that accurate appraisal
of the total net asset value of the Fund is impracticable, the Closing
Date shall be postponed until the first business day after the day
when such trading shall have been fully resumed and reporting shall
have been restored, or such other date as the parties may agree.
(c) The Fund shall deliver at the Closing a certificate of an
authorized officer stating that it has notified Citibank, N.A., as
custodian for the Fund, of the Fund's reorganization to a series of
Municipal Trust.
(d) Citibank, N.A., as transfer agent for the Fund, shall deliver at
the Closing a certificate as to the conversion on its books and
records of each Fund Shareholder account to an account as a holder of
Series Shares. Municipal Trust shall issue and deliver a confirmation
to the Fund evidencing the Series Shares to be credited as of the
Closing Date or provide evidence satisfactory to the Fund that such
Series Shares have been credited to the Fund's account on the books of
Municipal Trust. At the Closing, each party shall deliver to the other
such bills of sale, checks, assignments, stock certificates, receipts
or other documents as such other party or its counsel may reasonably
request.
7. SHAREHOLDER MEETING AND TERMINATION OF THE FUND
(a) If required to do so pursuant to the terms of Court Street
Trust's Amended and Restated Declaration of Trust or otherwise by
applicable law, the Fund agrees to call a meeting of its shareholders
(the Shareholder's Meeting) to consider and act upon this Agreement.
The Fund shall take all other action necessary to obtain approval of
the transactions contemplated hereby.
(b) The Fund agrees that as soon as reasonably practicable after
distribution of the Series Shares, the Fund shall be liquidated and
terminated as a series of Court Street Trust pursuant to its Amended
and Restated Declaration of Trust, any further actions shall be taken
in connection therewith as required by applicable law, and on and
after the Closing Date the Fund shall not conduct any business except
in connection with its liquidation and termination.
8. CONDITIONS TO OBLIGATIONS OF MUNICIPAL TRUST
The obligations of Municipal Trust hereunder shall be subject to the
following conditions:
(a) That the Fund furnishes to Municipal Trust a statement, dated as
of the Closing Date, signed by an officer of Court Street Trust,
certifying that as of the Valuation Time and the Closing Date all
representations and warranties of the Fund made in this Agreement are
true and correct in all material respects and that the Fund has
complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to such dates;
(b) That the Fund furnishes Municipal Trust with copies of the
resolutions, certified by an officer of Court Street Trust, evidencing
the adoption of this Agreement and, if applicable, the approval of the
transactions contemplated herein by the requisite vote of the holders
of the outstanding shares of beneficial interest of the Fund;
(c) That the Fund shall deliver to Municipal Trust at the Closing a
statement of its assets and liabilities, together with a certificate
as to the aggregate asset value of the Fund's portfolio securities,
all as of the Valuation Time, certified on the Fund's behalf by its
Treasurer or Assistant Treasurer;
(d) That the Fund's custodian shall deliver to Municipal Trust a
certificate identifying the assets of the Fund held by such custodian
as of the Valuation Time on the Closing Date and stating that at the
Valuation Time (i) the assets held by the custodian will be
transferred to the Series; (ii) the Fund's assets have been duly
endorsed in proper form for transfer in such condition as to
constitute good delivery thereof; and (iii) to the best of the
custodian's knowledge, all necessary taxes in conjunction with the
delivery of the assets, including all applicable federal and state
stock transfer stamps, if any, have been paid or provision for payment
has been made;
(e) That the Fund's transfer agent shall deliver to Municipal Trust
at the Closing a certificate setting forth the number of shares of the
Fund outstanding as of the Valuation Time and the name and address of
each holder of record of any such shares and the number of shares held
of record by each such shareholder;
(f) If applicable, that the Fund calls a Shareholder's Meeting to
consider and act upon this Agreement and that the Fund takes all other
action necessary to obtain approval of the transactions contemplated
hereby;
(g) That the Fund delivers to Municipal Trust a certificate of an
officer of Court Street Trust, dated the Closing Date, that there has
been no material adverse change in the Fund's financial position since
November 30, 1998, other than changes in the market value of its
portfolio securities, or changes due to net redemptions of its shares,
dividends paid, or losses from operations; and
(h) That all of the issued and outstanding shares of beneficial
interest of the Fund shall have been offered for sale and sold in
conformity with all applicable state securities laws and, to the
extent that any audit of the records of the Fund or its transfer agent
by Municipal Trust or its agents shall have revealed otherwise, the
Fund shall have taken all actions that in the opinion of Municipal
Trust are necessary to remedy any prior failure on the part of the
Fund to have offered for sale and sold such shares in conformity with
such laws.
9. CONDITIONS TO OBLIGATIONS OF THE FUND
The obligations of the Fund hereunder shall be subject to the
following conditions:
(a) That Municipal Trust shall have executed and delivered to the
Fund an Assumption of Liabilities, certified by an officer of
Municipal Trust, dated as of the Closing Date pursuant to which Trust,
on behalf of the Series, will assume all of the liabilities of the
Fund existing at the Valuation Time in connection with the
transactions contemplated by this Agreement;
(b) That Municipal Trust furnishes to the Fund a statement, dated as
of the Closing Date, signed by an officer of Trust, certifying that as
of the Valuation Time and the Closing Date all representations and
warranties of the Series made in this Agreement are true and correct
in all material respects, and Municipal Trust has complied with all
the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such dates; and
(c) That the Fund shall have received an opinion of Kirkpatrick &
Lockhart LLP, counsel to the Fund and Municipal Trust, to the effect
that the Series Shares are duly authorized and upon delivery to the
Fund as provided in this Agreement will be validly issued and will be
fully paid and nonassessable under Massachusetts law.
10. CONDITIONS TO OBLIGATIONS OF THE FUND AND MUNICIPAL TRUST
The obligations of the Fund and Municipal Trust hereunder shall be
subject to the following conditions:
(a) If applicable, that this Agreement shall have been adopted and
the transactions contemplated herein shall have been approved by the
requisite vote of the holders of the outstanding shares of beneficial
interest of the Fund;
(b) That all consents of other parties and all other consents,
orders, and permits of federal, state, and local regulatory
authorities (including those of the Securities and Exchange Commission
and of state blue sky and securities authorities, including "no
action" positions of such federal or state authorities) deemed
necessary by Municipal Trust or the Fund to permit consummation, in
all material respects, of the transactions contemplated hereby shall
have been obtained, except where failure to obtain any such consent,
order, or permit would not involve a risk of a material adverse effect
on the assets or properties of Municipal Trust or the Fund, provided
that either party hereto may for itself waive any of such conditions;
(c) That all proceedings taken by either the Fund or the Series in
connection with the transactions contemplated by this Agreement and
all documents incidental thereto shall be satisfactory in form and
substance to it and its counsel, Kirkpatrick & Lockhart LLP;
(d) That Municipal Trust shall have taken all necessary action so
that the Series shall be a series of a registered open-end investment
company under the 1940 Act immediately after the closing.
(e) That there shall not be any material litigation pending with
respect to the matters contemplated by this Agreement;
(f) That Municipal Trust and the Fund shall have received an opinion
of Kirkpatrick & Lockhart LLP satisfactory to Municipal Trust and the
Fund that for federal income tax purposes:
(i) The Reorganization will be a reorganization under Section
368(a)(1)(F) of the Code, and the Fund and the Series will each be
parties to the Reorganization under section 368(b) of the Code;
(ii) No gain or loss will be recognized by the Fund upon the
transfer of all of its assets to the Series in exchange solely for the
Series Shares and the assumption of the Fund's liabilities followed by
the distribution of those the Series Shares to the shareholders of the
Fund in liquidation of the Fund;
(iii) No gain or loss will be recognized by the Series on the
receipt of the Fund's assets in exchange solely for the the Series
Shares and the assumption of the Fund's liabilities;
(iv) The basis of the Fund's assets in the hands of the Series will
be the same as the basis of such assets in the Fund's hands
immediately prior to the Reorganization;
(v) The Series' holding period in the assets to be received from the
Fund will include the Fund's holding period in such assets;
(vi) A Fund Shareholder will recognize no gain or loss on the
exchange of his or her shares of beneficial interest in the Fund for
the Series Shares in the Reorganization;
(vii) A Fund Shareholder's basis in the the Series Shares to be
received by him or her will be the same as his or her basis in the
Fund Shares exchanged therefor;
(viii) A Fund Shareholder's holding period for his or her Series
Shares will include the holding period of the Fund Shares exchanged,
provided that those Fund Shares were held as capital assets on the
date of the Reorganization.
(ix) The Reorganization will not result in the termination of the
Fund's taxable year, and the Fund's tax attributes enumerated in
Section 381(c) of the Code will be taken into account by the Series as
if there had been no conversion.
Notwithstanding anything herein to the contrary, neither the Fund nor
Municipal Trust may waive the conditions set forth in this subsection
10(f).
11. COVENANTS OF THE FUND
(a) The Fund covenants to operate its business in the ordinary course
between the date hereof and the Closing Date, it being understood that
such ordinary course of business will include the payment of customary
dividends and distributions.
(b) The Fund covenants that the Series Shares are not being acquired
for the purpose of making any distribution thereof, other than in
accordance with the terms of this Agreement.
(c) The Fund covenants that it will assist Municipal Trust in
obtaining such information as Municipal Trust reasonably requests
concerning the beneficial ownership of Fund Shares.
(d) The Fund covenants that its liquidation and termination will be
effected in the manner provided in its Amended and Restated
Declaration of Trust in accordance with applicable law and, after the
Closing Date, the Fund will not conduct any business except in
connection with its liquidation and termination.
12. TERMINATION; WAIVER
(a) The parties hereto may terminate this Agreement by mutual
consent. In addition, either party may, at its option, terminate this
Agreement at or prior to the Closing Date because
(i) Of a material breach by the other of any representation,
warranty, or agreement contained herein to be performed at or prior to
the Closing Date; or
(ii) A condition herein expressed to be precedent to the obligations
of the terminating party has not been met and it reasonably appears
that it will not or cannot be met.
(b) In the event of any such termination, there shall be no liability
for damages on the part of Municipal Trust or the Fund, or their
respective Trustees or officers.
13. SOLE AGREEMENT; AMENDMENTS; WAIVERS; SURVIVAL OF WARRANTIES
(a) This Agreement supersedes all previous correspondence and oral
communications between the parties regarding the subject matter
hereof, constitutes the only understanding with respect to such
subject matter, may not be changed except by a letter of agreement
signed by each party hereto and shall be construed in accordance with
and governed by the laws of the Commonwealth of Massachusetts.
(b) This Agreement may be amended, modified, or supplemented in such
manner as may be mutually agreed upon in writing by the appropriate
officers of Court Street Trust, Municipal Trust, the Fund, or the
Series; provided, however, that following the shareholders' meeting,
if any, called by the Fund pursuant to Section 7 of this Agreement, no
such amendment may have the effect of changing the provisions for
determining the number of the Series Shares to be received by the Fund
shareholders under this Agreement to the detriment of such
shareholders without their further approval.
(c) Either party may waive any condition to its obligations
hereunder, provided that such waiver does not have any material
adverse effect on the interests of Fund Shareholders.
The representations, warranties, and covenants contained in the
Agreement, or in any document delivered pursuant hereto or in
connection herewith, shall survive the consummation of the
transactions contemplated hereunder.
14. LIMITATION OF LIABILITY
Copies of the Declarations of Trust of Municipal Trust and Court
Street Trust, as restated and amended, are on file with the Secretary
of State of the Commonwealth of Massachusetts, and notice is hereby
given that this instrument is executed on behalf of the Trustees of
Municipal Trust and Court Street Trust as trustees and not
individually and that the obligations of the Fund and the Series under
this instrument are not binding upon any of Court Street Trust's or
Municipal Trust's Trustees, officers, or shareholders individually,
but are binding only upon the assets and property of such Fund or
Series. The Fund and Municipal Trust each agrees that its obligations
hereunder apply only to such Fund and the Series, respectively, and
not to its shareholders individually or to the trustees of such Fund
or Series.
15. ASSIGNMENT
This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment
or transfer of any rights or obligations hereunder shall be made by
any party without the written consent of the other party. Nothing
herein expressed or implied is intended or shall be construed to
confer upon or give any person, firm, or corporation other than the
parties hereto and their respective successors and assigns any rights
or remedies under or by reason of this Agreement.
This Agreement may be executed in any number of counterparts, each of
which, when executed and delivered, shall be deemed to be an original.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized officer.
FIDELITY COURT STREET TRUST, ON BEHALF OF
SPARTAN MUNICIPAL INCOME FUND
[Signature Lines Omitted]
FIDELITY MUNICIPAL TRUST
[signature lines omitted]
FMR hereby agrees to assume the expenses provided for in
accordance with paragraph 5(b) of this Agreement.
FIDELITY MANAGEMENT & RESEARCH COMPANY
[signature lines omitted]
EXHIBIT 7
FUNDS ADVISED BY FMR - TABLE OF AVERAGE NET ASSETS AND EXPENSE RATIOS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
INVESTMENT OBJECTIVE AND FUND FISCAL YEAR END (A) AVERAGE NET ASSETS RATIO OF NET ADVISORY FEES
(MILLIONS)(B) TO AVERAGE NET ASSETS PAID
TO FMR (C)
MUNICIPAL INCOME (D)
Spartan Arizona Municipal 8/31/98 $ 21.5 0.55%
Income
Spartan Maryland Municipal 8/31/98 40.5 0.55
Income
Spartan Short-Intermediate 8/31/98 691.8 0.55
Municipal Income
Advisor Intermediate
Municipal Income (x)
Class A 10/31/98 0.8 0.38
Class T 10/31/98 53.1 0.38
Class B 10/31/98 8.4 0.38
Class C 10/31/98 0.5 0.38
Institutional Class 10/31/98 6.1 0.38
Advisor Municipal Income (x)
Class A 10/31/98 5.1 0.39
Class T 10/31/98 383.4 0.39
Class B 10/31/98 47.1 0.39
Class C 10/31/98 3.0 0.39
Institutional Class 10/31/98 2.7 0.39
Spartan Connecticut Municipal 11/30/98 356.2 0.55
Income
Spartan Florida Municipal 11/30/98 431.3 0.55
Income
Spartan Municipal Income 11/30/98 2,937.2 0.38
Spartan New Jersey Municipal 11/30/98 373.9 0.55
Income
Spartan Intermediate 12/31/98 1,128.0 0.35
Municipal Income
Spartan Michigan Municipal 12/31/98 465.2 0.38(z)
Income
Spartan Minnesota Municipal 12/31/98 303.0 0.35(z)
Income
Spartan Ohio Municipal Income 12/31/98 390.7 0.38(z)
Spartan Pennsylvania 12/31/98 265.8 0.55
Municipal Income
Spartan Massachusetts 1/31/99 1,299.6 0.38
Municipal Income
Spartan New York Municipal 1/31/99 1,144.6 0.38(z)
Income
Spartan California Municipal 2/28/99 1,280.7 0.38
Income
</TABLE>
(a) All fund data are as of the fiscal year end noted in the chart or
as of July 31, 1999, if fiscal year end figures are not available.
(b) Average net assets are computed on the basis of average net assets
of each fund or class at the close of business on each business day
throughout its fiscal period.
(c) Reflects reductions for any expense reimbursement paid by or due
from FMR pursuant to voluntary or state expense limitations. Funds so
affected are indicated by an (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 (x).
(d) FMR has entered into sub-advisory agreements with Fidelity
Investments Money Management, Inc. (FIMM) with respect to the fund.
COU-PXS-1099 CUSIP#316089101/FUND#407
1.728426.100 CUSIP#316089705/FUND#427
CUSIP#316089507/FUND#037
CUSIP#316089200/FUND#416
Vote this proxy card TODAY! Your prompt response will
save the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- ----------------------------------------------------------------------
FIDELITY COURT STREET TRUST: SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward
C. Johnson 3d, Eric D. Roiter and Phyllis Burke Davis, or any one or
more of them, attorneys, with full power of substitution, to vote all
shares of Fidelity Court Street Trust: Spartan Connecticut Municipal
Income Fund which the undersigned is entitled to vote at the Special
Meeting of Shareholders of the fund to be held at the office of the
trust at 82 Devonshire St., Boston, MA 02109, on December 15, 1999 at
9:00 a.m. and at any adjournments thereof. All powers may be
exercised by a majority of said proxy holders or substitutes voting or
acting or, if only one votes and acts, then by that one. This Proxy
shall be voted on the proposals described in the Proxy Statement as
specified on the reverse side. Receipt of the Notice of the Meeting
and the accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When
signing in a fiduciary capacity, such as executor, administrator,
trustee, attorney, guardian, etc., please so indicate. Corporate and
partnership proxies should be signed by an authorized person
indicating the person's title.
Date _____________, 1999
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
cusip# 316089101/fund# 407
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:
- ----------------------------------------------------------------------
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.
5. To approve an amended FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
management contract for the
fund, including a management
fee structure change.
8. To eliminate the fund's FOR [ ] AGAINST [ ] ABSTAIN [ ] 8.
fundamental 80% investment
policy and adopt a
comparable non-fundamental
policy.
CTM-PXC-1099 cusip# 316089101/fund# 407
Vote this proxy card TODAY! Your prompt response will
save the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- ----------------------------------------------------------------------
FIDELITY COURT STREET TRUST: SPARTAN FLORIDA MUNICIPAL INCOME FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward
C. Johnson 3d, Eric D. Roiter and Phyllis Burke Davis , or any one or
more of them, attorneys, with full power of substitution, to vote all
shares of Fidelity Court Street Trust: Spartan Florida Municipal
Income Fund which the undersigned is entitled to vote at the Special
Meeting of Shareholders of the fund to be held at the office of the
trust at 82 Devonshire St., Boston, MA 02109, on December 15, 1999 at
9:00 a.m. and at any adjournments thereof. All powers may be
exercised by a majority of said proxy holders or substitutes voting or
acting or, if only one votes and acts, then by that one. This Proxy
shall be voted on the proposals described in the Proxy Statement as
specified on the reverse side. Receipt of the Notice of the Meeting
and the accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When
signing in a fiduciary capacity, such as executor, administrator,
trustee, attorney, guardian, etc., please so indicate. Corporate and
partnership proxies should be signed by an authorized person
indicating the person's title.
Date _____________, 1999
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
cusip# 316089705/fund# 427
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 nominees [ ] FOR all nominees listed [ ] WITHHOLD authority to 1.
specified below as Trustees: (except as marked to the vote for all nominees.
(01) Ralph F. Cox, (02) contrary below).
Phyllis Burke Davis, (03)
Robert M. Gates, (04) Edward
C. Johnson 3d, (05) Donald
J. Kirk, (06) Peter S.
Lynch, (07) William O.
McCoy, (08) Gerald C.
McDonough, (09) Marvin L.
Mann, (10) Robert C. Pozen,
(11) Thomas R. Williams, and
(12) Ned C. Lautenbach.
(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 funds.
3. To authorize the Trustees to FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
adopt an amended and
restated Declaration of Trust.
5. To approve an amended FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
management contract for the
fund, including a management
fee structure change.
9. To eliminate the fund's FOR [ ] AGAINST [ ] ABSTAIN [ ] 9.
fundamental 80% investment
policy and adopt a
comparable non-fundamental
policy.
11. To eliminate the fund's FOR [ ] AGAINST [ ] ABSTAIN [ ] 11.
fundamental investment
policy regarding investments
in debt securities of
investment-grade quality and
below investment-grade
quality.
</TABLE>
SFC-PXC-1099 cusip# 316089705/fund# 427
Vote this proxy card TODAY! Your prompt response will
save the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- ----------------------------------------------------------------------
FIDELITY COURT STREET TRUST: SPARTAN NEW JERSEY MUNICIPAL INCOME FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward
C. Johnson 3d, Eric D. Roiter and Phyllis Burke Davis , or any one or
more of them, attorneys, with full power of substitution, to vote all
shares of Fidelity Court Street Trust: Spartan New Jersey Municipal
Income Fund which the undersigned is entitled to vote at the Special
Meeting of Shareholders of the fund to be held at the office of the
trust at 82 Devonshire St., Boston, MA 02109, on December 15, 1999 at
9:00 a.m. and at any adjournments thereof. All powers may be
exercised by a majority of said proxy holders or substitutes voting or
acting or, if only one votes and acts, then by that one. This Proxy
shall be voted on the proposals described in the Proxy Statement as
specified on the reverse side. Receipt of the Notice of the Meeting
and the accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When
signing in a fiduciary capacity, such as executor, administrator,
trustee, attorney, guardian, etc., please so indicate. Corporate and
partnership proxies should be signed by an authorized person
indicating the person's title.
Date _____________, 1999
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
cusip# 316089200/fund# 416
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 nominees [ ] FOR all nominees listed [ ] WITHHOLD authority to 1.
specified below as Trustees: (except as marked to the vote for all nominees.
(01) Ralph F. Cox, (02) contrary below).
Phyllis Burke Davis, (03)
Robert M. Gates, (04) Edward
C. Johnson 3d, (05) Donald
J. Kirk, (06) Peter S.
Lynch, (07) William O.
McCoy, (08) Gerald C.
McDonough, (09) Marvin L.
Mann, (10) Robert C. Pozen,
(11) Thomas R. Williams, and
(12) Ned C. Lautenbach.
(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 funds.
3. To authorize the Trustees to FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
adopt an amended and
restated Declaration of Trust.
5. To approve an amended FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
management contract for the
fund, including a management
fee structure change.
10. To eliminate the fund's FOR [ ] AGAINST [ ] ABSTAIN [ ] 10.
fundamental 80% investment
policy and adopt a
comparable non-fundamental
policy.
</TABLE>
NJN-PXC-1099 cusip# 316089200/fund# 416
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 COURT STREET TRUST: SPARTAN MUNICIPAL INCOME FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward
C. Johnson 3d, Eric D. Roiter and Phyllis Burke Davis, or any one or
more of them, attorneys, with full power of substitution, to vote all
shares of Fidelity Court Street Trust: Spartan Municipal Income Fund
which the undersigned is entitled to vote at the Special Meeting of
Shareholders of the fund to be held at the office of the trust at 82
Devonshire St., Boston, MA 02109, on December 15, 1999 at 9:00 a.m.
and at any adjournments thereof. All powers may be exercised by a
majority of said proxy holders or substitutes voting or acting or, if
only one votes and acts, then by that one. This Proxy shall be voted
on the proposals described in the Proxy Statement as specified on the
reverse side. Receipt of the Notice of the Meeting and the
accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When
signing in a fiduciary capacity, such as executor, administrator,
trustee, attorney, guardian, etc., please so indicate. Corporate and
partnership proxies should be signed by an authorized person
indicating the person's title.
Date _____________, 1999
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
cusip # 316089507/fund# 037
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 nominees [ ] FOR all nominees listed [ ] WITHHOLD authority to 1.
specified below as Trustees: (except as marked to the vote for all nominees.
(01) Ralph F. Cox, (02) contrary below).
Phyllis Burke Davis, (03)
Robert M. Gates, (04) Edward
C. Johnson 3d, (05) Donald
J. Kirk, (06) Peter S.
Lynch, (07) William O.
McCoy, (08) Gerald C.
McDonough, (09) Marvin L.
Mann, (10) Robert C. Pozen,
(11) Thomas R. Williams, and
(12) Ned C. Lautenbach.
(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.
6. To approve a plan providing FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
for the reorganization of
the fund from a series of
one Massachusetts Business
Trust to another.
7. To eliminate the fund's FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
fundamental 80% investment
policy and adopt a
comparable non-fundamental
policy.
12. To amend the fund's FOR [ ] AGAINST [ ] ABSTAIN [ ] 12.
fundamental investment
limitation concerning
diversification to exclude
securities of other
investment companies from
the limitation for the fund.
</TABLE>
HIY-PXC-1099 cusip# 316089507/fund# 037
IMPORTANT PROXY MATERIALS
PLEASE CAST YOUR VOTE NOW!
SPARTAN(Registered trademark) MUNICIPAL INCOME FUND
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
SPARTAN FLORIDA MUNICIPAL INCOME FUND
SPARTAN NEW JERSEY MUNICIPAL INCOME FUND
Dear Shareholder:
I am writing to let you know that a special meeting of shareholders of
the Fidelity funds mentioned above will be held on December 15, 1999.
The purpose of the meeting is to vote on several important proposals
that affect the funds and your investment in them. As a shareholder,
you have the opportunity to voice your opinion on the matters that
affect your fund(s). This package contains information about the
proposals and the materials to use when voting by mail.
Please read the enclosed materials and cast your vote on the proxy
card(s). PLEASE VOTE AND RETURN YOUR CARD(S) PROMPTLY. YOUR VOTE IS
EXTREMELY IMPORTANT, NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY
BE.
All of the proposals have been carefully reviewed by the Board of
Trustees. The Trustees, most of whom are not affiliated with
Fidelity, are responsible for protecting your interests as a
shareholder. The Trustees believe these proposals are in the best
interest of shareholders. They recommend that you vote FOR each
proposal.
The following Q&A is provided to assist you in understanding the
proposals. Each of the proposals is described in greater detail in
the enclosed proxy statement.
VOTING IS QUICK AND EASY. EVERYTHING YOU NEED IS ENCLOSED. To cast
your vote, simply complete the proxy card(s) enclosed in this package.
Be sure to sign the card(s) before mailing it in the postage-paid
envelope.
If you have any questions before you vote, please call Fidelity at
1-800-544-8888. We'll be glad to help you get your vote in quickly.
Thank you for your participation in this important initiative.
Sincerely,
Edward C. Johnson 3d
Chairman and Chief Executive Officer
Important information to help you understand and vote on the proposals
Please read the full text of the enclosed proxy statement. Below is a
brief overview of the proposals to be voted upon. Your vote is
important. We appreciate you placing your trust in Fidelity and look
forward to helping you achieve your financial goals.
WHAT PROPOSALS AM I BEING ASKED TO VOTE ON?
You may be asked to vote on the following proposals:
1. To elect a Board of Trustees.
2. To ratify the selection of PricewaterhouseCoopers LLP as
independent accountants of the funds.
3. To authorize the Trustees to adopt an amended and restated
Declaration of Trust.
4. To approve an amended management contract for Spartan Municipal
Income Fund.
5. To approve an amended management contract, including a management
fee structure change, for Spartan Connecticut Municipal Income Fund,
Spartan Florida Municipal Income Fund, and Spartan New Jersey
Municipal Income Fund.
6. To approve an Agreement and Plan providing for the reorganization
of Spartan Municipal Income Fund from a separate series of one
Massachusetts business trust to another.
7. To eliminate Spartan Municipal Income Fund's fundamental 80%
investment policy and adopt a comparable non-fundamental policy.
8. To eliminate Spartan Connecticut Municipal Income Fund's
fundamental 80% investment policy and adopt a comparable
non-fundamental policy.
9. To eliminate Spartan Florida Municipal Income Fund's fundamental
80% investment policy and adopt a comparable non-fundamental policy.
10. To eliminate Spartan New Jersey Municipal Income Fund's
fundamental 80% investment policy and adopt a comparable
non-fundamental policy.
11. To eliminate Spartan Florida Municipal Income Fund's fundamental
investment policies regarding investments in debt securities of
investment-grade quality and below investment-grade quality.
12. To amend Spartan Municipal Income Fund's fundamental investment
limitation concerning diversification to exclude securities of other
investment companies from the limitation for the fund.
WHAT ROLE DOES THE BOARD PLAY? (PROPOSAL 1)
The Trustees oversee the investment policies of each fund. Members of
the Board are fiduciaries and have an obligation to serve the best
interests of shareholders, including approving policy changes such as
those proposed in the proxy statement. In addition, the Trustees
review fund performance, oversee fund activities, and review
contractual arrangements with companies that provide services to the
funds.
WHAT IS THE ROLE OF THE INDEPENDENT ACCOUNTANTS? (PROPOSAL 2)
The independent accountants examine annual financial statements for
the funds and provide other audit and tax-related services. They also
sign or certify any financial statements of the funds that are
required by law to be independently certified and filed with the
Securities and Exchange Commission (SEC).
WHY ARE THE FUNDS PROPOSING TO ADOPT AN AMENDED AND RESTATED
DECLARATION OF TRUST? (PROPOSAL 3)
The new Declaration of Trust is a more modern form of trust instrument
for a Massachusetts business trust. It gives the Trustees more
flexibility, and, subject to the applicable requirements of federal
and state law, broader authority to act. This increased flexibility
may allow the Trustees to react more quickly to changes in competitive
and regulatory conditions.
Adoption of the new Declaration of Trust will not alter the Trustees'
existing fiduciary obligations to act in the best interests of the
funds' shareholders. Before utilizing any new flexibility that the
new Declaration of Trust may afford, the Trustees must first consider
the shareholders' interests and act in accordance with such interests.
The new Declaration of Trust amends the current Declaration of Trust
in a number of significant ways. Please review the proxy statement
for specific details.
WHY IS SPARTAN MUNICIPAL INCOME FUND PROPOSING AN AMENDED MANAGEMENT
CONTRACT?
(PROPOSAL 4)
The amended management contract provides for lower management fees to
be paid to Fidelity Management & Research Company (FMR) when FMR's
assets under management exceed certain levels. The fund's amended
management contract also allows FMR and the trust, on behalf of the
fund, to modify the fund's management contract subject to the
requirements of the Investment Company Act of 1940 (1940 Act).
The amended management contract will result in a management fee that
is the same as or lower than the fee payable under the fund's present
contract. Please refer to the proxy statement for specific details of
the amended management contract proposal.
WHY ARE SPARTAN CONNECTICUT MUNICIPAL INCOME FUND, SPARTAN FLORIDA
MUNICIPAL INCOME FUND, AND SPARTAN NEW JERSEY MUNICIPAL INCOME FUND
PROPOSING AN AMENDED MANAGEMENT CONTRACT? (PROPOSAL 5)
The amended management contract for the funds change each fund's
current "all-inclusive" management fee arrangement to a "group fee"
arrangement that is standard for other Fidelity municipal bond funds.
Each fund's amended management contract also allows FMR and the trust,
on behalf of the fund, to modify the fund's management contract
subject to the requirements of the 1940 Act.
Under the present management contract, each fund pays FMR an
all-inclusive management fee which covers substantially all fund
expenses; FMR pays the fund's operating expenses, with limited
exceptions. Under the proposed amended management contract, each fund
would pay its management fee and other expenses separately. FMR would
no longer pay each fund's other expenses. The group fee rate varies
according to the monthly average net assets of all funds having
management contracts with FMR, and provides for lower management fees
to be paid to FMR when FMR's assets under management exceed certain
levels. If approved, the proposed group fee structure will result in
a lower management fee, but each fund's total operating expense ratio
may or may not exceed the current rate.
Please refer to the proxy statement for specific details of each
fund's amended management contract proposal.
WHY IS SPARTAN MUNICIPAL INCOME FUND PROPOSING TO APPROVE AN AGREEMENT
AND PLAN OF REORGANIZATION FROM A SEPARATE SERIES OF ONE MASSACHUSETTS
BUSINESS TRUST TO ANOTHER? (PROPOSAL 6)
The Board is proposing to reorganize Spartan Municipal Income Fund to
a separate series of another Massachusetts business trust to
consolidate and streamline the production and mailing of certain legal
documents. The proposed change will have no material effect on
shareholders or the management of the fund.
WHY ARE SPARTAN MUNICIPAL INCOME FUND, SPARTAN CONNECTICUT MUNICIPAL
INCOME FUND, SPARTAN FLORIDA MUNICIPAL INCOME FUND, AND SPARTAN NEW
JERSEY MUNICIPAL INCOME FUND PROPOSING TO ELIMINATE THEIR FUNDAMENTAL
80% INVESTMENT POLICY AND REPLACE THEM WITH A COMPARABLE
NON-FUNDAMENTAL POLICY? (PROPOSALS 7, 8, 9, AND 10)
By making each fund's fundamental (cannot be changed without
shareholder approval) 80% investment policy non-fundamental (future
changes to the policy would only require approval by the Board of
Trustees, not shareholders), the Trustees will be able to comply more
quickly when the SEC adopts a definitive version of its proposed name
test rule (Name Test Rule). In addition, if the proposal is
approved, the fundamental 80% "income test" will be replaced with a
non-fundamental "asset test. " An asset-based test can be monitored
more efficiently than an income-based test, which may facilitate the
fund's compliance efforts.
The Trustees propose that each fund's existing 80% fundamental policy
be made non-fundamental. Thus, when the SEC adopts a definitive Name
Test Rule, the Trustees will have the flexibility to modify each
fund's policy to conform to the new rule without the delay and expense
of a shareholder meeting. The Trustees anticipate that the approval
of the proposal will have no material effect on the funds or their
investment operations.
WHY IS SPARTAN FLORIDA MUNICIPAL INCOME FUND PROPOSING TO ELIMINATE
ITS FUNDAMENTAL INVESTMENT POLICIES REGARDING INVESTMENTS IN
INVESTMENT-GRADE QUALITY AND BELOW INVESTMENT-GRADE QUALITY DEBT
SECURITIES? (PROPOSAL 11)
The primary purpose of this proposal is to allow the fund to more
clearly communicate its investment strategy by standardizing its
investment disclosure in a manner consistent with other Fidelity funds
with similar investment disciplines. If the proposal is approved, the
fund will continue to rely on its more restrictive, non-fundamental
investment policy of investing in investment-grade debt securities.
The fund does not currently invest, or intend to invest, in securities
rated below investment-grade, and the elimination of these policies is
not expected to materially affect the way the fund is managed.
WHAT IS THE BENEFIT OF AMENDING THE FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING DIVERSIFICATION TO EXCLUDE SECURITIES OF OTHER INVESTMENT
COMPANIES FROM THE LIMITATION FOR SPARTAN MUNICIPAL INCOME FUND?
(PROPOSAL 12)
This proposal would permit the fund, subject to the requirements of
the 1940 Act, to invest without limit in the securities of other
investment companies including the portion of each fund allocated to
the fixed-income market. Pursuant to an order of exemption granted by
the SEC, the fund may invest in short-term bond or money market funds
managed by FMR or an affiliate of FMR (the Investment Funds). FMR
anticipates that investing in the Investment Funds will benefit the
fund by enhancing the efficiency of the investment of cash generated
by fund shareholder or investment activity, or through the investment
of fund assets allocated to the short-term bond or money markets in
support of a fund's investment objective.
HAS THE FUND'S BOARD OF TRUSTEES APPROVED EACH PROPOSAL?
Yes. The Board of Trustees has unanimously approved all of the
proposals and recommends that you vote to approve them.
HOW MANY VOTES AM I ENTITLED TO CAST?
As a shareholder, you are entitled to one vote for each dollar of net
asset value you own of a fund on the record date. The record date is
October 18, 1999.
HOW DO I VOTE MY SHARES?
You can vote your shares by completing and signing the enclosed proxy
card(s) and mailing it in the enclosed postage paid envelope. If you
need any assistance, or have any questions regarding the proposals or
how to vote your shares, please call Fidelity at 1-800-544-8888.
HOW DO I SIGN THE PROXY CARD?
INDIVIDUAL ACCOUNTS: Shareholders should sign exactly as their names
appear on the account registration shown on the card.
JOINT ACCOUNTS: Either owner may sign, but the name of the person
signing should conform exactly to a name shown in the registration.
ALL OTHER ACCOUNTS: The person signing must indicate his or her
capacity. For example, a trustee for a trust or other entity should
sign, "Ann B. Collins, Trustee."
