SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
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[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
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(Name of Registrant as Specified In Its Charter) Fidelity Contrafund
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(Name of Person(s) Filing Proxy Statement, if other than the
Registrant) Arthur S. Loring, Secretary
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:
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[ ] 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.
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(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
FIDELITY CONTRAFUND
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-544-8888
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of FIDELITY CONTRAFUND:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
Meeting) of Fidelity Contrafund (the fund), a series of Fidelity
Contrafund, a single series trust (the trust), will be held at the office
of the trust, 82 Devonshire Street, Boston, Massachusetts 02109 on January
14, 1998, 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 Coopers & Lybrand L.L.P. as independent
accountants of the trust.
3. To amend the Declaration of Trust to provide dollar-based voting rights
for shareholders of the trust.
4. To amend the Declaration of Trust regarding shareholder notification of
appointment of Trustees.
5. To amend the Declaration of Trust to provide the fund with the ability
to invest all of its assets in another open-end investment company with
substantially the same investment objective and policies.
6. To adopt a new fundamental investment policy for the fund permitting
the fund to invest all of its assets in another open-end investment company
with substantially the same investment objective and policies.
7. To approve an amended management contract for the fund.
8. To approve a new sub-advisory agreement with FMR U.K. for the fund.
9. To approve a new sub-advisory agreement with FMR Far East for the fund.
10. To amend the fund's fundamental investment objective and replace
certain fundamental investment policies with non-fundamental policies.
11. To amend the fund's fundamental investment limitation concerning
diversification to exclude investments in other investment companies from
the limitation.
12. To ratify the fund's fundamental investment limitation concerning the
concentration of its investments in a single industry.
13. To ratify the fund's fundamental investment limitation concerning
commodities.
By order of the Board of Trustees,
ARTHUR S. LORING, Secretary
November 17, 1997
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 CONTRAFUND
TO BE HELD ON JANUARY 14, 1998
This Proxy Statement is furnished in connection with a solicitation of
proxies made by, and on behalf of, the Board of Trustees of Fidelity
Contrafund (the trust) to be used at the Special Meeting of Shareholders of
Fidelity Contrafund (the fund) and at any adjournments thereof (the
Meeting), to be held on January 14, 1998 at 9:00 a.m. at 82 Devonshire
Street, Boston, Massachusetts 02109, the principal executive office of the
trust and Fidelity Management & Research Company (FMR), the fund's
investment adviser.
The purpose of the Meeting is set forth in the accompanying Notice. The
solicitation is made primarily by the mailing of this Proxy Statement and
the accompanying proxy card on or about November 17, 1997. Supplementary
solicitations may be made by mail, telephone, telegraph, facsimile,
electronic means or by personal interview by representatives of the trust.
In addition, Management Information Services Corp. (MIS) and D.F. King &
Co., Inc. may be paid on a per-call basis to solicit shareholders on behalf
of the fund at an anticipated cost of approximately $________. The expenses
in connection with preparing this Proxy Statement and its enclosures and of
all solicitations will be paid by the fund. The fund will reimburse
brokerage firms and others for their reasonable expenses in forwarding
solicitation material to the beneficial owners of shares. The principal
business address of Fidelity Distributors Corporation (FDC), the fund's
principal underwriter and distribution agent, and Fidelity Management &
Research (U.K.) Inc. (FMR U.K.) and Fidelity Management & Research (Far
East) Inc. (FMR Far East), subadvisers to the fund, is 82 Devonshire
Street, Boston, Massachusetts 02109.
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, 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 which 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 fund may also arrange to have votes recorded by telephone. D.F. King &
Co., Inc. may be paid on a per-call basis for vote-by-phone solicitations
on behalf of the fund at an anticipated cost of approximately $______. The
expenses in connection with telephone voting will be paid by the fund. If
the fund records votes by telephone, it will use procedures designed to
authenticate shareholders' identities, to allow shareholders to authorize
the voting of their shares in accordance with their instructions, and to
confirm that their instructions have been properly recorded. Proxies voted
by telephone may be revoked at any time before they are voted in the same
manner that proxies voted by mail may be revoked.
If a quorum is not present at the Meeting, or if a quorum is present at
the Meeting, but sufficient votes to approve one or more of the proposed
items are not received, or if other matters arise requiring shareholder
attention, the persons named as proxy agents may propose one or more
adjournments of the Meeting to permit further solicitation of proxies. Any
such adjournment will require the affirmative vote of a majority of those
shares present at the Meeting or represented by proxy. When voting on a
proposed adjournment, the persons named as proxy agents will vote FOR the
proposed adjournment all shares that they are entitled to vote with respect
to each item, unless directed to vote AGAINST the item, in which case such
shares will be voted AGAINST the proposed adjournment with respect to that
item. A shareholder vote may be taken on one or more of the items in this
Proxy Statement prior to such adjournment if sufficient votes have been
received and it is otherwise appropriate.
On September 30, 1997 there were ________ shares of the fund issued and
outstanding. [INSERT BENEFICIAL OWNERSHIP LANGUAGE]. Shareholders of record
at the close of business on November 17, 1997 will be entitled to vote at
the Meeting. Each such shareholder will be entitled to one vote for each
share held on that date.
FOR A FREE COPY OF THE FUND'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1996 AND THE SEMIANNUAL REPORT FOR THE FISCAL PERIOD ENDED
JUNE 30, 1997 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 FUND CAST AT THE
MEETING IS SUFFICIENT TO APPROVE PROPOSAL 2. APPROVAL OF PROPOSALS 3
THROUGH 13 REQUIRES THE AFFIRMATIVE VOTE OF A "MAJORITY OF THE OUTSTANDING
VOTING SECURITIES" OF THE FUND. UNDER THE INVESTMENT COMPANY ACT OF 1940
(THE 1940 ACT), THE VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING
SECURITIES" MEANS THE AFFIRMATIVE VOTE OF THE LESSER OF (A) 67% OR MORE OF
THE VOTING SECURITIES PRESENT AT THE MEETING OR REPRESENTED BY PROXY IF THE
HOLDERS OF MORE THAN 50% OF THE OUTSTANDING VOTING SECURITIES ARE PRESENT
OR REPRESENTED BY PROXY OR (B) MORE THAN 50% OF THE OUTSTANDING VOTING
SECURITIES. BROKER NON-VOTES ARE NOT CONSIDERED "PRESENT" FOR THIS PURPOSE.
1. TO ELECT A BOARD OF TRUSTEES.
The purpose of this proposal is to elect a Board of Trustees of the Trust.
Pursuant to the provisions of the Declaration of Trust of Fidelity
Contrafund, the Trustees have determined that the number of Trustees shall
be fixed at twelve. It is intended that the enclosed proxy card will be
voted for the election as Trustees of the twelve nominees listed below,
unless such authority has been withheld in the proxy card.
Except for Robert C. Pozen, all nominees named below are currently
Trustees of Fidelity Contrafund and have served in that capacity
continuously since originally elected or appointed. Phyllis Burke Davis,
Marvin L. Mann, William O. McCoy, and Robert M. Gates were selected by the
trust's Nominating and Administration Committee (see page 13) and were
appointed to the Board in December 1992, October 1993, January 1997, and
March 1997, respectively. None of the nominees are related to one another.
Those nominees indicated by an asterisk (*) are "interested persons" of the
trust by virtue of, among other things, their affiliation with either the
trust, the funds' investment adviser (FMR, or the Adviser), or the funds'
distribution agent, FDC. The business address of each nominee who is an
"interested person" is 82 Devonshire Street, Boston, Massachusetts 02109,
and the business address of all other nominees is Fidelity Investments,
P.O. Box 9235, Boston, Massachusetts 02205-9235. Except for Robert M.
Gates, William O. McCoy, and Robert C. Pozen, each of the nominees is
currently a Trustee or General Partner, as the case may be, of 62
registered investment companies (trusts or partnerships) advised by FMR.
Mr. Gates and Mr. McCoy are currently a Trustee or General Partner, as the
case may be, of 55 registered investment companies (trusts or partnerships)
advised by FMR. Mr. Pozen is currently a Trustee or General Partner, as the
case may be, of 52 registered investment companies (trusts or partnerships)
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.
Nominee Principal Occupation ** Year of
(Age) Election or
Appointmen
t
Ralph F. Cox President of RABAR Enterprises 1991
(management
consulting-engineering industry,
(65) 1994). Prior to February 1994,
he was President of Greenhill
Petroleum Corporation
(petroleum exploration and
production). Until March 1990,
Mr. Cox was President and
Chief Operating Officer of Union
Pacific Resources Company
(exploration and production). He
is a Director of USA Waste
Services, Inc. (non-hazardous
waste, 1993), CH2M Hill
Companies (engineering), Rio
Grande, Inc. (oil and gas
production), and Daniel
Industries (petroleum
measurement equipment
manufacturer). In addition, he is
a member of advisory boards of
Texas A&M University and the
University of Texas at Austin.
Phyllis Burke Davis Prior to her retirement in 1992
September 1991, Mrs. Davis
was the Senior Vice President of
(66) Corporate Affairs of Avon
Products, Inc. She is currently a
Director of BellSouth
Corporation
(telecommunications), Eaton
Corporation (manufacturing,
1991), and the TJX Companies,
Inc. (retail stores), and
previously served as a Director
of Hallmark Cards, Inc.
(1985-1991) and Nabisco
Brands, Inc. In addition, she is a
member of the President's
Advisory Council of The
University of Vermont School of
Business Administration.
Robert M. Gates Consultant, author, and lecturer 1997
(1993). Mr. Gates was Director
of the Central Intelligence
(54) 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 currently a
Trustee for the Forum For
International Policy, a Board
Member for the Virginia
Neurological Institute, and a
Senior Advisor of the Harvard
Journal of World Affairs. In
addition, Mr. Gates also serves
as a member of the corporate
board for 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).
*Edward C. Johnson President, is Chairman, Chief 1968
3d Executive Officer and a Director
of FMR Corp.; a Director and
Chairman of the Board and of
(67) the Executive Committee of
FMR; Chairman and a Director
of FMR Texas Inc., Fidelity
Management & Research (U.K.)
Inc., and Fidelity Management &
Research (Far East) Inc.
E. Bradley Jones Prior to his retirement in 1984, 1990
Mr. Jones was Chairman and
Chief Executive Officer of LTV
(70) Steel Company. He is a Director
of TRW Inc. (original equipment
and replacement products),
Consolidated Rail Corporation,
Birmingham Steel Corporation,
and RPM, Inc. (manufacturer of
chemical products), and he
previously served as a Director
of NACCO Industries, Inc.
(mining and manufacturing,
1985-1995), Hyster-Yale
Materials Handling, Inc.
(1985-1995), and
Cleveland-Cliffs Inc. (mining),
and as a Trustee of First Union
Real Estate Investments. In
addition, he serves as a Trustee
of the Cleveland Clinic
Foundation, where he has also
been a member of the Executive
Committee as well as Chairman
of the Board and President, a
Trustee and member of the
Executive Committee of
University School (Cleveland),
and a Trustee of Cleveland
Clinic Florida.
Donald J. Kirk Executive-in-Residence (1995) 1987
at Columbia University Graduate
School of Business and a
financial consultant. From 1987
(65) 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 is a
Director of General Re
Corporation (reinsurance), and
he previously served as a
Director of Valuation Research
Corp. (appraisals and
valuations, 1993-1995). In
addition, he serves as Chairman
of the Board of Directors of the
National Arts Stabilization Fund,
Chairman of the Board of
Trustees of the Greenwich
Hospital Association, a Member
of the Public Oversight Board of
the American Institute of
Certified Public Accountants'
SEC Practice Section (1995),
and as a Public Governor of the
National Association of
Securities Dealers, Inc. (1996).
*Peter S. Lynch Vice Chairman and Director of 1990
FMR (1992). Prior to May 31,
1990, he was a Director of FMR
(54) and Executive Vice President of
FMR (a position he held until
March 31, 1991); Vice President
of Fidelity Magellan Fund and
FMR Growth Group Leader; and
Managing Director of FMR Corp.
Mr. Lynch was also Vice
President of Fidelity Investments
Corporate Services (1991-1992).
In addition, he serves as a
Trustee of Boston College,
Massachusetts Eye & Ear
Infirmary, Historic Deerfield
(1989) and Society for the
Preservation of New England
Antiquities, and as an Overseer
of the Museum of Fine Arts of
Boston.
William O. McCoy Vice President of Finance for the 1997
University of North Carolina
(16-school system, 1995). Prior to
(64) his retirement in December 1994,
Mr. McCoy was Vice Chairman of
the Board of BellSouth
Corporation (telecommunications,
1984) and President of BellSouth
Enterprises (1986). He is currently
a Director of Liberty Corporation
(holding company, 1984), Weeks
Corporation of Atlanta (real
estate, 1994), Carolina Power
and Light Company (electric utility,
1996) and the Kenan Transport
Co. (1996). Previously, he was a
Director of First American
Corporation (bank holding
company, 1979-1996). In addition,
Mr. McCoy serves as a member
of the Board of Visitors for the
University of North Carolina at
Chapel Hill (1994) and for the
Kenan-Flager Business School
(University of North Carolina at
Chapel Hill, 1988).
Gerald C. McDonough Chairman of G.M. Management 1989
Group (strategic advisory
services). Mr. McDonough is a
(69) 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.
Marvin L. Mann Chairman of the Board, 1993
President, and Chief Executive
Officer of Lexmark International,
(64) 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),
Imation Corp. (imaging and
information storage, 1997), and
Infomart (marketing services,
1991), a Trammell Crow Co. In
addition, he serves as the
Campaign Vice Chairman of the
Tri-State United Way (1993) and
is a member of the University of
Alabama President's Cabinet.
*Robert C. Pozen Senior Vice President, is -
President and a Director of FMR
(1997); and President and a
(51) Director of FMR Texas Inc.
(1997), Fidelity Management &
Research (U.K.) Inc. (1997), and
Fidelity Management &
Research (Far East) Inc. (1997).
Previously, Mr. Pozen served as
General Counsel, Managing
Director, and Senior Vice
President of FMR Corp.
Thomas R. Williams President of The Wales Group, 1989
Inc. (management and financial
advisory services). Prior to
retiring in 1987, Mr. Williams
(69) served as Chairman of the
Board of First Wachovia
Corporation (bank holding
company), and Chairman and
Chief Executive Officer of The
First National Bank of Atlanta
and First Atlanta Corporation
(bank holding company). He is
currently a Director of BellSouth
Corporation
(telecommunications), ConAgra,
Inc. (agricultural products),
Fisher Business Systems, Inc.
(computer software), Georgia
Power Company (electric utility),
Gerber Alley & Associates, Inc.
(computer software), National
Life Insurance Company of
Vermont, American Software,
Inc., and AppleSouth, Inc.
(restaurants, 1992).
** Except as otherwise indicated, each individual has held the office shown
or other offices in the same company for the last five years.
As of September 30, 1997, the nominees, Trustees and officers of the Trust
and the fund owned, in the aggregate, less than __% of the fund's
outstanding shares.
If elected, the Trustees will hold office without limit in time except
that (a) any Trustee may resign; (b) any Trustee may be removed by written
instrument, signed by at least two-thirds of the number of Trustees prior
to such removal; (c) any Trustee who requests to be retired or who has
become incapacitated by illness or injury may be retired by written
instrument signed by a majority of the other Trustees; and (d) a Trustee
may be removed at any Special Meeting of shareholders by a two-thirds vote
of the outstanding voting securities of the trust. In case a vacancy shall
for any reason exist, the remaining Trustees will fill such vacancy by
appointing another Trustee, so long as, immediately after such appointment,
at least two-thirds of the Trustees have been elected by shareholders. If,
at any time, less than a majority of the Trustees holding office has been
elected by the shareholders, the Trustees then in office will promptly call
a shareholders' meeting for the purpose of electing a Board of Trustees.
Otherwise, there will normally be no meeting of shareholders for the
purpose of electing Trustees.
The trust's Board, which is currently composed of two interested and nine
non-interested Trustees, met eleven times during the twelve months ended
December 31, 1996. It is expected that the Trustees will meet at least ten
times a year at regularly scheduled meetings.
The trust's Audit Committee is composed entirely of Trustees who are not
interested persons of the trust, FMR or its affiliates and normally meets
four times a year, or as required, prior to meetings of the Board of
Trustees. Currently, Messrs. Kirk (Chairman), Gates, and McCoy, and Mrs.
Davis are members of the Committee. The committee oversees and monitors the
trust's internal control structure, its auditing function and its financial
reporting process, including the resolution of material reporting issues.
The committee recommends to the Board of Trustees the appointment of
auditors for the trust. It reviews audit plans, fees and other material
arrangements in respect of the engagement of auditors, including non-audit
services to be performed. It reviews the qualifications of key personnel
involved in the foregoing activities. The committee plays an oversight role
in respect of the trust's investment compliance procedures and the code of
ethics. During the twelve months ended December 31, 1996, the committee
held four meetings.
The trust's Nominating and Administration Committee is currently composed
of Messrs. McDonough (Chairman), Jones, and Williams. The committee members
confer periodically and hold meetings as required. The committee makes
nominations for independent trustees, and for membership on committees. The
committee periodically reviews procedures and policies of the Board of
Trustees and committees. It acts as the administrative committee under the
Retirement Plan for non-interested trustees who retired prior to December
30, 1996. It monitors the performance of legal counsel employed by the
trust and the independent trustees. The committee in the first instance
monitors compliance with, and acts as the administrator of the provisions
of the code of ethics applicable to the independent trustees. During the
twelve months ended December 31, 1996, the committee held four meetings.
The Nominating and Administration Committee will consider nominees
recommended by shareholders. Recommendations should be submitted to the
committee in care of the Secretary of the Trust. The trust does not have a
compensation committee; such matters are considered by the Nominating and
Administration Committee.
The following table sets forth information describing the compensation of
each Trustee and Member of the Advisory Board of the fund for his or her
services for the fiscal year ended December 31, 1997.
COMPENSATION TABLE
Trustees and Members of the Advisory Board Aggregate Total
Compensati Compensati
on on from the
from Fund
Contrafund Complex*
B,C,D+ A
J. Gary Burkhead **,# $0 $ 0
Ralph F. Cox $11,34 137,70
7 0
Phyllis Burke Davis $11,05 134,70
1 0
Richard J. Flynn*** $0 168,00
0
Robert M. Gates **** $9,629 [ 0
]
Edward C. Johnson 3d ** $0 0
E. Bradley Jones $11,13 134,70
1 0
Donald J. Kirk $11,13 136,20
1 0
Peter S. Lynch ** $0 0
William O. McCoy***** $11,65 85,333
0
Gerald C. McDonough $13,85 136,20
9 0
Edward H. Malone*** $0 136,20
0
Marvin L. Mann $11,34 134,70
7 0
Robert C. Pozen** $0 0
Thomas R. Williams $11,34 136,20
7 0
* Information is for the calendar year ended December 31, 1996 for 235
funds in the complex.
** Interested Trustees of the fund are compensated by FMR.
*** Richard J. Flynn and Edward H. Malone served on the Board of Trustees
through December 31, 1996.
****Mr. Gates was appointed to the Board of Trustees effective March 1,
1997.
*****During the period from May 1, 1996 through December 31, 1996, William
O. McCoy served as a Member of the Advisory Board of the trust. Mr. McCoy
was appointed to the Board of Trustees effective January 1, 1997.
# J. Gary Burkhead served on the Board of Trustees through August 1, 1997.
Effective August 1, 1997, Mr. Burkhead serves as a Member of the Advisory
Board of the trust.
+ Estimated
A Compensation figures include cash, a pro rata portion of benefits accrued
under the retirement program for the period ended December 30, 1996 and
required to be deferred, and may include amounts deferred at the election
of Trustees.
B Compensation figures include cash, and may include amounts required to be
deferred, a pro rata portion of benefits accrued under the retirement
program for the period ended December 30, 1996 and required to be deferred,
and amounts deferred at the election of Trustees.
C The following amounts are required to be deferred by each non-interested
Trustee, most of which is subject to vesting: Ralph F. Cox, $5330, Phyllis
Burke Davis, $5330, Richard J. Flynn, $0, Robert M. Gates, $4514, E.
Bradley Jones, $5330, Donald J. Kirk, $5330, William O. McCoy, $5388,
Gerald C. McDonough, $6218, Edward H. Malone, $0, Marvin L. Mann, $5330,
and Thomas R. Williams, $5330.
D For the fiscal year ended December 31, 1997, certain of the
non-interested Trustees' aggregate compensation from the fund includes
accrued voluntary deferred compensation as follows: Ralph F. Cox, $4417,
Marvin L.Mann, $4417, and Thomas R. Williams, $4417.
Under a retirement program adopted in July 1988 and modified in November
1995 and November 1996, each non-interested Trustee who retired before
December 30, 1996 may receive payments from a Fidelity fund during his or
her lifetime based on his or her basic trustee fees and length of service.
The obligation of a fund to make such payments is neither secured nor
funded. A Trustee became eligible to participate in the program at the end
of the calendar year in which he or she reached age 72, provided that, at
the time of retirement, he or she had served as a Fidelity fund Trustee for
at least five years.
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 treated as though
equivalent dollar amounts had been invested in shares of a cross-section of
Fidelity funds including funds in each major investment discipline and
representing a majority of Fidelity's assets under management (the
Reference Funds). The amounts ultimately received by the Trustees under the
Plan will be directly linked to the investment performance of the Reference
Funds. Deferral of fees in accordance with the Plan will have a negligible
effect on a fund's assets, liabilities, and net income per share, and will
not obligate a fund to retain the services of any Trustee or to pay any
particular level of compensation to the Trustee. A fund may invest in the
Reference Funds under the Plan without shareholder approval.
As of December 30, 1996, the non-interested Trustees terminated the
retirement program for Trustees who retire after such date. In connection
with the termination of the retirement program, each then-existing
non-interested Trustee received a credit to his or her Plan account equal
to the present value of the estimated benefits that would have been payable
under the retirement program. The amounts credited to the non-interested
Trustees' Plan accounts are subject to vesting and are treated as though
equivalent dollar amounts had been invested in shares of the Reference
Funds. The amounts ultimately received by the Trustees in connection with
the credits to their Plan accounts will be directly linked to the
investment performance of the Reference Funds. The termination of the
retirement program and related crediting of estimated benefits to the
Trustees' Plan accounts did not result in a material cost to the funds.
2. TO RATIFY THE SELECTION OF COOPERS & LYBRAND L.L.P. AS INDEPENDENT
ACCOUNTANTS OF THE TRUST.
By a vote of the non-interested Trustees, the firm of Coopers & Lybrand
L.L.P. has been selected as independent accountants for the fund to sign or
certify any financial statements of the fund required by any law or
regulation to be certified by an independent accountant and filed with the
Securities and Exchange Commission (SEC) or any state. Pursuant to the 1940
Act, such selection requires the ratification of shareholders. In addition,
as required by the 1940 Act, the vote of the Trustees is subject to the
right of the fund, by vote of a majority of its outstanding voting
securities at any meeting called for the purpose of voting on such action,
to terminate such employment without penalty. Coopers & Lybrand L.L.P. has
advised the fund that it has no direct or material indirect ownership
interest in the fund.
The independent accountants examine annual financial statements for the
fund and provide other audit and tax-related services. In recommending the
selection of the trust'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 Coopers & Lybrand L.L.P. 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. On September 18, 1997
Coopers & Lybrand L.L.P. and Price Waterhouse LLP announced plans to merge
their practices world wide. Coopers & Lybrand L.L.P. and Price Waterhouse
LLP expect the merger, which is subject to approval by the partners of both
organizations and by the regulators, to become effective in early 1998.
3. TO AMEND THE DECLARATION OF TRUST TO PROVIDE DOLLAR-BASED VOTING RIGHTS
FOR SHAREHOLDERS OF THE TRUST.
The Board of Trustees has approved, and recommends that shareholders of
the trust approve a proposal to amend Article VIII, Section 1 of the
Declaration of Trust. The amendment would provide voting rights based on a
shareholder's total dollar interest in a fund (dollar-based voting), rather
than on the number of shares owned, for all shareholder votes for a fund.
As a result, voting power would be allocated in proportion to the value of
each shareholder's investment.
BACKGROUND. Fidelity Contrafund is a fund of Fidelity Contrafund, an
open-end management investment company organized as a Massachusetts
business trust. Currently, it is the only fund in the trust. If there were
additional funds in the trust, shareholders of each fund would vote
separately on matters concerning only that fund and would vote on a
trust-wide basis on matters that affect the trust as a whole, such as
electing trustees or amending the Declaration of Trust. Currently, under
the Declaration of Trust, each share is entitled to one vote, regardless of
the relative value of the shares of each fund in the trust.
The original intent of the one-share, one-vote provision was to provide
equitable voting rights to all shareholders as required by the 1940 Act. In
the case where a trust has several series or funds, voting rights may
become disproportionate since the net asset value per share (NAV) of the
separate funds generally diverge over time. The Staff of the Securities and
Exchange Commission (SEC) has issued a "no-action" letter permitting a
trust to seek shareholder approval of a dollar-based voting system. The
proposed amendment will comply with the conditions stated in the no-action
letter.
REASON FOR PROPOSAL. If approved, the amendment would provide a more
equitable distribution of voting rights for certain votes than the
one-share, one-vote system currently in effect. The voting power of each
shareholder would be commensurate with the value of the shareholder's
dollar investment rather than with the number of shares held.
Under the current voting provisions, an investment in a fund with a lower
NAV may have significantly greater voting power than the same dollar amount
invested in a fund with a higher NAV. The table below shows a hypothetical
example of this.
Fund Net Asset Value $1,000
investment in
terms of
number of
shares
A $ 10.00 100.000
B $ 7.57 132.100
C $ 10.93 91.491
D $ 1.00 1,000.000
For example, Fund D shareholders would have ten times the voting power of
Fund A shareholders, because a $1,000 investment in Fund D would buy ten
times as many shares as a $1,000 investment in Fund A. Accordingly, a
one-share, one-vote system may provide certain shareholders with a
disproportionate ability to affect the vote relative to shareholders of
other funds in the trust. If dollar-based voting had been in effect, each
shareholder would have had 1,000 voting shares. Their voting power would be
proportionate to their economic interest, which FMR believes is a more
equitable result, and which is the result with respect to a typical
corporation where each voting share generally has an equal market price.
As long as there is only one fund in the trust, as in the case of Fidelity
Contrafund, the proposal will not affect the voting rights of fund
shareholders. However, if additional funds are added to the trust in the
future, voting rights would be changed under the proposal. On matters
requiring trust-wide votes where all funds are required to vote,
shareholders who own shares with a lower NAV than other funds in the trust
would be giving other shareholders in the trust more voting "power" than
they currently have. On matters affecting only one fund, only shareholders
of that fund vote on the issue. In this instance, under both the current
Declaration of Trust and an amended Declaration of Trust, all shareholders
of the fund would have the same voting rights, since the NAV is the same
for all shares in a single fund.
AMENDMENT TO THE DECLARATION OF TRUST. Article VIII, Section 1 sets forth
the method of calculating voting rights for all shareholder votes for the
trust. If approved, Article VIII, Section 1 will be amended as follows
(material to be added is ((underlined)) and material to be deleted is
[bracketed]):
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
Section 1. The Shareholders shall have power to vote... On any matter
submitted to a vote of the Shareholders, all Shares shall be voted by
individual Series, except (i) when required by the 1940 Act, Shares shall
be voted in the aggregate and not by individual Series; and (ii) 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. [Each whole Share shall be entitled to one vote as to any
matter on which it is entitled to vote, and each fractional Share shall be
entitled to a proportionate fractional vote.] ((A Shareholder of each
Series 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, on
any matter on which such Shareholder is entitled to vote and each
fractional dollar amount shall be entitled to a proportionate fractional
vote.)) There shall be no cumulative voting in the election of Trustees.
Shares may be voted in person or by proxy. Until Shares are issued, the
Trustees may exercise all rights of Shareholders and may take any action
required or permitted by law, this Declaration of Trust or any Bylaws of
the Trust to be taken by Shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the trust and its shareholders. The Trustees recommend voting FOR
the proposal. The amended Declaration of Trust will become effective upon
shareholder approval. If the proposal is not approved by shareholders of
the trust, Article VIII, Section 1 of the Declaration of Trust will remain
unchanged.
4. TO AMEND THE DECLARATION OF TRUST REGARDING SHAREHOLDER NOTIFICATION OF
APPOINTMENT OF TRUSTEES.
The trust's Declaration of Trust provides that in the case of a vacancy on
the Board of Trustees, the remaining Trustees shall fill the vacancy by
appointing a person they, in their discretion, see fit, consistent with the
limitations of the 1940 Act. Section 16 of the 1940 Act states that a
vacancy may be filled by the Trustees, if after filling the vacancy, at
least two-thirds of the Trustees then holding office were elected by the
holders of the outstanding voting securities of the trust. It also states
that if at any time less than 50% of the Trustees were elected by
shareholders, a shareholder meeting must be called within 60 days for the
purposes of electing Trustees to fill the existing vacancies.
The Declaration of Trust currently requires that within three months of a
Trustee appointment, notification of such be mailed to each shareholder of
the trust. Trustees may appoint a Trustee in anticipation of a current
Trustee's retirement or resignation, or in the event of an increase in the
number of Trustees. The current Declaration of Trust also requires
shareholder notification within three months of such an appointment.
The Trustees recommend that shareholders of the trust vote to eliminate
the notification requirement from the trust's Declaration of Trust. The
language to be deleted from the Declaration of Trust is [bracketed].
ARTICLE IV
THE TRUSTEES
RESIGNATION AND APPOINTMENT OF TRUSTEES
Section 4. In case of the declination, death, resignation, retirement,
removal, incapacity, or inability of any of the Trustees, in case a vacancy
shall, by reason of an increase in 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 Investment Company Act of 1940. 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. [Within three months of such appointment
the Trustees shall cause notice of such appointment to be mailed to each
Shareholder at his address as recorded on the books of the Trust.] An
appointment of a Trustee may be made by the Trustees then in office [and
notice thereof mailed to Shareholders as aforesaid] in anticipation of a
vacancy to occur by reason of retirement, resignation or increase in number
of Trustees effective at a later date, provided that said appointment shall
become effective only at or after the effective date of said retirement,
resignation or increase in number of Trustees. As soon as any Trustee so
appointed shall have accepted this trust, the trust estate shall vest in
the new Trustee or Trustees, together with the continuing Trustees, without
any further act or conveyance, and he shall be deemed a Trustee hereunder.
The power of appointment is subject to the provisions of Section 16(a) of
the 1940 Act.
Notifying a trust's shareholders in the event of an appointment of a
Trustee is not required by any federal or state law. Such notification to
all shareholders of a trust would be costly to the funds of the trust. If
the proposal is approved, shareholders will be notified of Trustee
appointments in the next financial report for the fund. Other than
eliminating the notification requirement, this proposal does not amend any
other aspect of Trustee resignation or appointment.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the trust and its shareholders. The Trustees recommend voting FOR
the proposal. The amended Declaration of Trust will become effective upon
shareholder approval. If the proposal is not approved by shareholders of
the trust, Article IV, Section 4 of the Declaration of Trust will remain
unchanged.
5. TO AMEND THE DECLARATION OF TRUST TO PROVIDE THE FUND WITH THE ABILITY
TO INVEST ALL OF ITS ASSETS IN ANOTHER OPEN-END INVESTMENT COMPANY WITH
SUBSTANTIALLY THE SAME INVESTMENT OBJECTIVE AND POLICIES.
The Board of Trustees has approved, and recommends that shareholders of
the trust approve, a proposal to amend Article V, Section 1 of the
Declaration of Trust to clarify that the Trustees may authorize the
investment of all of the fund's assets in another open-end investment
company with substantially the same investment objective and policies
("Master Feeder Fund Structure"). The purpose of a Master Feeder Fund
Structure is to achieve operational efficiencies by consolidating portfolio
management while maintaining different distribution and servicing
structures. In order to implement a Master Feeder Fund Structure, both the
Declaration of Trust and the fund's policies must permit the structure.
Currently, the fund's policies do not allow for such investments. Proposal
6 on page 21 seeks the approval of the fund's shareholders to adopt a
fundamental investment policy to permit investment in another open-end
investment company. This proposal, which amends the Declaration of Trust,
clarifies the Board's ability to implement the Master Feeder Fund Structure
if the fund's policies permit it.
BACKGROUND. A number of mutual funds have developed so called
"master-feeder" fund structures under which several "feeder" funds invest
all of their assets in a single pooled investment, or "master" fund. For
example, an institutional equity fund with a high initial minimum
investment amount for large investors might pool its investments with an
equity fund with low minimums designed for retail investors. This structure
allows several Feeder Funds with substantially the same objective but
different distribution and servicing features to combine their investments
and manage them as one Master Fund instead of managing them separately. The
Feeder Funds combine their investments by investing all of their assets in
one Master Fund. (Each Feeder Fund invested in a single Master Fund retains
its own characteristics, but is able to achieve operational efficiencies by
investing together with the other Feeder Funds in the Master Feeder Fund
Structure.) The current Declaration of Trust does not specifically provide
the Trustees the ability to authorize the Master Feeder Fund Structure.
REASON FOR THE PROPOSAL. FMR and the Board of Trustees continually review
methods of structuring mutual funds to take maximum advantage of potential
efficiencies. While neither FMR nor the Trustees has determined that the
fund should invest in a Master Fund, the Trustees believe it could be in
the best interest of the fund to adopt such a structure at a future date.
If this proposal is approved, the Declaration of Trust amendment would
provide the Trustees with the power to authorize the fund to invest all of
its assets in a single open-end investment company. The Trustees will
authorize such a transaction only if a Master Feeder Fund Structure is
permitted under the fund's investment policies (see Proposal 6), if they
determine that a Master Feeder Fund Structure is in the best interest of
the fund, and if, upon advice of counsel, they determine that the
investment will not have material adverse tax consequences to the fund or
its shareholders. The Trustees will specifically consider the impact, if
any, on fees paid by the fund as a result of adopting a Master Feeder Fund
Structure. Although the current Declaration of Trust does not contain any
explicit prohibition against implementing a Master Feeder Fund Structure,
the specific authority is being sought in the event the Trustees deem it
appropriate to adopt a Master Feeder Fund Structure in the future.
AMENDMENT TO THE DECLARATION OF TRUST. If the proposal is approved,
Article V, Section 1 of the Declaration of Trust will be amended as
follows: (material to be added is underlined):
"Subject to any applicable limitation in the Declaration of Trust or the
Bylaws of the Trust, the Trustees shall have power and authority:
(((t) Notwithstanding any other provision hereof, to invest all of the
assets of any series 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;))"
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the trust and its shareholders. The Trustees recommend voting FOR
the proposal. The amended Declaration of Trust will become effective upon
shareholder approval. If the proposal is not approved by shareholders of
the trust, Article V, Section 1 of the Declaration of Trust will remain
unchanged.
6. TO ADOPT A NEW FUNDAMENTAL INVESTMENT POLICY FOR THE FUND PERMITTING THE
FUND TO INVEST ALL OF ITS ASSETS IN ANOTHER OPEN-END INVESTMENT COMPANY
WITH SUBSTANTIALLY THE SAME INVESTMENT OBJECTIVE AND POLICIES.
The Board of Trustees has approved, and recommends that shareholders of
the fund approve, the adoption of a new fundamental investment policy that
would permit the fund to invest all of its assets in another open-end
investment company with substantially the same investment objective and
policies ("Master Feeder Fund Structure"). The purpose of the Master Feeder
Fund Structure would be to achieve operational efficiencies by
consolidating portfolio management while maintaining different distribution
and servicing structures.
BACKGROUND. A number of mutual funds have developed so called
"master-feeder" fund structures under which several "feeder" funds invest
all of their assets in a single "master" fund. In order to implement a
Master Feeder Fund Structure, an amendment to the Declaration of Trust is
proposed, as is the adoption of a new fundamental investment policy.
Proposal 5 proposes to amend the Declaration of Trust to allow the Trustees
to authorize the conversion to a Master Feeder Fund Structure when
permitted by the fund's policies. This proposal would add a fundamental
policy for the fund that permits a Master Feeder Fund Structure.
REASON FOR THE PROPOSAL. FMR and the Board of Trustees continually review
methods of structuring mutual funds to take advantage of potential
efficiencies. While neither the Board nor FMR has determined that the fund
should invest in a Master Fund, the Trustees believe it could be in the
best interests of the fund to adopt such a structure at a future date.
At present, certain of the fund's fundamental investment policies and
limitations would prevent the fund from investing all of its assets in
another investment company, and would require a vote of shareholders before
such a structure could be adopted. To avoid the costs associated with a
subsequent shareholder meeting, the Trustees recommend that shareholders
vote to permit the fund's assets to be invested in a single Master Fund,
without a further vote of shareholders. The Trustees will authorize such an
investment only if they determine that action to be in the best interests
of the fund and its shareholders and if, upon advice of counsel, they
determine that the investment will not have material adverse tax
consequences to the fund. Approval of Proposal 5 provides the Trustees with
explicit authority to approve a Master Feeder Fund Structure. If
shareholders approve this proposal, certain fundamental and non-fundamental
policies and limitations of the fund that currently prohibit investment in
shares of one investment company would not apply to permit the investment
in a Master Fund managed by FMR or its affiliates or successor. These
policies include the fund's limitations on concentration, diversification
and underwriting.
DISCUSSION. FMR may manage a number of mutual funds with similar
investment objectives, policies, and limitations but with different
features and services (Comparable Funds). Were these Comparable Funds to
pool their assets, operational efficiencies could be achieved, offering the
opportunity to reduce costs. Similarly, FMR anticipates that a Master
Feeder Fund Structure would facilitate the introduction of new Fidelity
mutual funds, increasing the investment options available to shareholders.
The fund's method of operation and shareholder services would not be
materially affected by its investment in a Master Fund, except that the
assets of the fund would be managed as part of a larger pool. Were the fund
to invest all of its assets in a Master Fund, it would hold only a single
investment security, and the Master Fund would directly invest in
individual securities pursuant to its investment objective. The Master Fund
would be managed by FMR or an affiliate, such as FMR Texas, Inc. in the
case of a money market fund. The Trustees would retain the right to
withdraw the fund's investments from a Master Fund at any time and would do
so if the Master Fund's investment objective and policies were no longer
appropriate for the fund. The fund would then resume investing directly in
individual securities as it does currently. Whenever a Feeder Fund is asked
to vote at a shareholder meeting of the Master Fund, the Feeder Fund will
hold a meeting of its shareholders if required by applicable law or the
Feeder Fund's policies to vote on the matters to be considered at the
Master Fund shareholder meeting. The fund will cast its votes at the Master
Fund meeting in the same proportion as the fund's shareholders voted at
their meeting.
At present, the Trustees have not considered any specific proposal to
authorize pooling of assets. The Trustees will authorize investing the
fund's assets in a Master Fund only if they determine that pooling is in
the best interests of the fund and if, upon advice of counsel, they
determine that the investment will not have material adverse tax
consequences to the fund or its shareholders. In determining whether to
invest in a Master Fund, the Trustees will consider, among other things,
the opportunity to reduce costs and to achieve operational efficiencies.
The Trustees will not authorize investment in a Master Fund if doing so
would materially increase costs (including fees) to shareholders.
FMR may benefit from the use of a Master Feeder Fund Structure if overall
assets under management are increased (since FMR's fees are based on
assets). Also, FMR's expenses of providing investment and other services to
the fund may be reduced. If the fund's investment in a Master Fund were to
reduce FMR's expenses materially, the Trustees would consider whether a
reduction in FMR's management fee would be appropriate if and when a Master
Feeder Fund Structure is implemented.
PROPOSED FUNDAMENTAL POLICY. To allow the fund to invest in a Master Fund
at a future date, the Trustees recommend that the fund adopt the following
fundamental policy:
"The fund may, notwithstanding any other fundamental investment policy or
limitation, invest all of its assets in the securities of a single open-end
management investment company managed by Fidelity Management & Research
Company or an affiliate or successor with substantially the same
fundamental investment objective, policies, and limitations as the fund."
If the proposal is adopted, the Trustees intend to adopt a non-fundamental
investment limitation for the fund which states:
"The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company managed by
Fidelity Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund."
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the fund and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the fundamental limitation will
become effective when disclosure is revised to reflect the changes. If the
proposal is not approved by the shareholders of the fund, the fund's
current fundamental investment policies will remain unchanged with respect
to potential investment in Master Funds.
7. TO APPROVE AN AMENDED MANAGEMENT CONTRACT FOR THE FUND.
The Board of Trustees, including the Trustees who are not "interested
persons" of the Trust or of FMR (the Independent Trustees), has approved,
and recommends that shareholders of the fund approve, a proposal to adopt
an amended management contract with FMR (the Amended Contract). The Amended
Contract modifies several aspects of the management fee that FMR receives
from the fund for managing its investments and business affairs.
CURRENT MANAGEMENT FEE. The management fee is calculated and paid monthly,
and is normally expressed as an annual percentage of the fund's average net
assets. The fee has two components: a Basic Fee and a Performance
Adjustment. The Basic Fee is an annual percentage of the fund's average net
assets for the current month. The Basic Fee rate is the sum of a Group Fee
rate, which declines as FMR's fund assets under management increase, and a
fixed individual fund fee rate of 0.30%. The Basic Fee rate for the fund's
fiscal year ended December 31, 1996 (not including the fee amendments
discussed below) was 0.6132%.
The Performance Adjustment is a positive or negative dollar amount based
on the fund's performance and assets for the most recent 36 months. If the
fund outperforms the S&P 500 (the Index) over 36 months, FMR receives a
positive Performance Adjustment, and if the fund underperforms the Index,
the management fee is reduced by a negative Performance Adjustment. The
Performance Adjustment is an annual percentage of the fund's average net
assets over the 36-month performance period. The Performance Adjustment
rate is 0.02% for each percentage point of outperformance or
underperformance, subject to a maximum of 0.20% if the fund outperforms or
underperforms the Index by more than ten percentage points. Performance of
the fund and the Index are rounded to the nearest whole percentage point
for purposes of the calculation.
PROPOSED MANAGEMENT FEE AMENDMENTS. The Amended Contract would (1) reduce
the Group Fee rate further if FMR's assets under management remain over
$210 billion, and (2) modify the Performance Adjustment calculation to
round the performance of the fund and the Index to the nearest 0.01%,
rather than the nearest 1.00%.
IMPACT OF GROUP FEE RATE REDUCTION. At FMR's current level of assets under
management ($531 billion as of August 31, 1997), the changes to the Group
Fee rate reduce the management fee. FMR has voluntarily implemented the
Group Fee reductions pending shareholder approval, and the Fund has paid
lower management fees as a result. For the fund's fiscal year ended
December 31, 1996, the management fee using the proposed Group Fee
reductions (including the Performance Adjustment) was 0.5727% of the Fund's
average net assets. The Group Fee reductions lowered the management fee
rate by 0.0084% compared to the rate FMR was entitled to receive under the
Present Contract (0.5811%).
IMPACT OF PERFORMANCE ADJUSTMENT CHANGES. The more precise rounding method
for the Performance Adjustment would have increased the management fee rate
for the fiscal year ended December 31, 1996 by 0.0007% of the Fund's
average net assets for the year.
COMBINED EFFECT OF FEE CHANGES. In the fiscal year ended December 31,
1996, the Group Fee reductions and the changes to the Performance
Adjustment would have resulted in a 0.0077% reduction in the total
management fee. The future impact will depend on many different factors,
and may represent an increase or decrease from the management fee under the
Present Contract. The Group Fee rate reductions will either reduce the
management fee or leave it unchanged, depending on the level of FMR's
assets under management. Calculating performance to the nearest 0.01% may
increase or decrease the Performance Adjustment, depending on whether
performance would have been rounded up or down.
FMR is the fund's investment adviser pursuant to a management contract
dated January 1, 1993, which was approved by shareholders on December 16,
1992. (For information on FMR, see the section entitled "Activities and
Management of FMR," on page 41.) A copy of the Amended Contract, marked to
indicate the proposed amendments, is supplied as Exhibit 1 on page 48.
Except for the modifications discussed above, the Amended Contract is
substantially identical to the fund's Present Contract with FMR. (For a
detailed discussion of the fund's Present Contract, refer to the section
entitled "Present Management Contract," on page 42.) If approved by
shareholders, the Amended Contract will take effect on the first day of the
first month following approval and will remain in effect through July 31,
1998, and thereafter, but only as long as its continuance is approved at
least annually by (i) the vote, cast in person at a meeting called for the
purpose, of a majority of the Independent Trustees and (ii) the vote of
either a majority of the Trustees or a majority of the outstanding shares
of the fund. If the Amended Contract is not approved, the Present Contract
will continue in effect through July 31, 1998, and thereafter only as long
as its continuance is approved at least annually as described above.
MODIFICATION TO GROUP FEE RATE. The Group Fee rate varies based on the
aggregate net assets of all registered investment companies having
management contracts with FMR (group assets). As group assets increase, the
Group Fee rate declines. The Amended Contract would not change the Group
Fee rate if group assets are $210 billion or less. Above $210 billion in
group assets, the Group Fee rate declines under both contracts, but under
the Amended Contract, it declines faster.
The Group Fee rate is calculated according to a graduated schedule
providing for different rates for different levels of group assets. The
rate at which the Group Fee rate declines is determined by fee
"breakpoints" that provide for lower fee rates when group assets increase.
The Amended Contract would add 10 new, lower breakpoints applicable when
group assets are above $210 billion as illustrated in the following table.
(For an explanation of how the Group Fee rate is used to calculate the
management fee see the section entitled "Present Management Contract" on
page 42.)
GROUP FEE RATE BREAKPOINTS
Average Group Present Group Amended
Assets Contract Assets Contract
($ billions) ($ billions)
Over 174 .3000% 174-210 .3000%
210-246 .2950%
246-282 .2900%
282-318 .2850%
318-354 .2800%
354-390 .2750%
390-426 .2700%
426-462 .2650%
462-498 .2600%
498-534 .2550%
Over 534 .2500%
The resulting Group Fee rates at various levels of group assets are
indicated below. (For an explanation of how the breakpoints are combined to
arrive at the Group Fee rate, see "Present Management Contract" on page
42.)
EFFECTIVE GROUP FEE RATES
Group Present Amended
Assets Contract Contract
($ billions)
150 .3371% .3371%
200 .3284% .3284%
250 .3227% .3219%
300 .3190% .3163%
350 .3162% .3113%
400 .3142% .3067%
450 .3126% .3024%
500 .3114% .2982%
550 .3103% .2942%
FMR voluntarily adopted various additional Group Fee breakpoints for group
assets over $174 billion in 1993, 1994 and 1996. Although the new fee
breakpoints have not been added to the management contract pending
shareholder approval, FMR has voluntarily based its management fee on the
Group Fee schedule contained in the Amended Contract since January 1, 1996.
Group assets for August 31, 1997 were approximately $531 billion.
MODIFICATIONS TO PERFORMANCE ADJUSTMENT - ROUNDING METHOD. The annual
Performance Adjustment rate equals 0.02% for each percentage point by which
the fund outperforms or underperforms the Index over a 36-month performance
period. Under the Present Contract, the investment performance of both the
fund and the Index are rounded to the nearest full percentage point (for
example, 15.5123% is rounded to 16%.) Rounding to full percentage points
results in the Performance Adjustment rate being applied in 0.02%
increments. In comparison, under the Amended Contract, the investment
performance of both the fund and Index are rounded to the nearest 0.01%
(using the prior example, 15.5123% is rounded to 15.51%) prior to
calculating the difference in investment performance. The more precise
rounding method results in a more accurate measure of the difference in
investment performance and allows for the Performance Adjustment to be
applied in 0.0002% increments. This reduces the chance of minor changes in
performance resulting in significant changes to the Performance Adjustment,
and ultimately the fund's management fee.
During fiscal 1996, using the more precise rounding methodology, the
impact on the annual performance fee rate would have been between 0.0107%
and (0.0107)% as a percentage of the fund's average net assets for the
year. The aggregate impact during fiscal 1996 was a 0.0007% increase in the
management fee.
COMPARISON OF MANAGEMENT FEES. The following table compares the fund's
management fee as calculated under the terms of the Present Contract (not
including FMR's voluntary implementation of the Group Fee reductions) for
fiscal 1996 to the management fee the fund would have incurred if the
Amended Contract had been in effect. Management fees are expressed in
dollars and as percentages of the fund's average net assets for the year.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Present Contract Amended Contract Difference
$ % $ % $ %
Basic Fee 119,191,54 0.6132 117,562,92 0.6048 (1,628,617 (0.0084)
2 5 )
Performan (6,238,556) (0.0321) (6,096,988) (0.0314 141,568 0.0007
ce )
Adjustmen
t
Total 112,952,98 0.5811 111,465,93 0.5734 (1,487,049 (0.0077)
Managem 6 7 )
ent Fee
</TABLE>
The following table provides data concerning the fund's management fees
and expenses as a percentage of average net assets for the fiscal year
ended December 31, 1996 under the Present Contract (not including FMR's
voluntary implementation of the Group Fee reductions) and if the Amended
Contract had been in effect during the same period.
The following figures are based on historical expenses adjusted to reflect
current fees of the fund and are calculated as a percentage of average net
assets.
COMPARATIVE FEE TABLE
ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)
Present Contract Amended
Contract
Management Fee 0.58% 0.57%
Other Expenses 0.25% 0.25%
Total Fund Operating 0.83% 0.82%
Expenses
A portion of the brokerage commissions that the fund pays is used to
reduce the fund's expenses. The fund has entered into arrangements with its
custodian and transfer agent whereby interest earned on uninvested cash
balances is used to offset a portion of the fund's expenses. Including
these reductions, the total operating expenses presented in the table would
have been 0.79% under the Present Contract and 0.78% under the Amended
Contract.
EXAMPLE: The following illustrates the expenses on a $1,000 investment
under the fees and expenses stated above, assuming (1) 5% annual return and
(2) redemption at the end of each time period and (3) payment of the fund's
3.00% sales charge:
1 Year 3 Years 5 Years 10
Years
Present Contract $50 $91 $133 $243
Amended Contract $50 $91 $133 $244
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
fund. The example above should not be considered a representation of past
or future expenses of the fund. Actual expenses may vary from year to year
and may be higher or lower than those shown above.
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 June 19, 1997. The Board of Trustees considered and approved
the modifications to the Group Fee Rate schedule during the two month
periods from November to December 1995, June to July 1994, and September to
October 1993, and the modifications to the Performance Adjustment
calculation during the period from June to July 1995. The Board of Trustees
received materials relating to the Amended Contract in advance of the
meeting at which the Amended Contract was considered, and had the
opportunity to ask questions and request further information in connection
with such consideration.
INFORMATION RECEIVED BY THE INDEPENDENT TRUSTEES. In connection with their
monthly meetings Trustees receive materials specifically relating to the
Amended Contract. These materials include: (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, (iii) the economic outlook and the general
investment outlook in the markets in which the fund invests, and (iv)
notable changes in the 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 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 and
the use of "soft" commission dollars to pay fund expenses and to pay for
research and other similar services, (5) FMR's management of the
relationships with 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 audit of
non-investment management services provided by FMR and its affiliates.
In response to questions raised by the Independent Trustees, additional
information was furnished by FMR including, among other items, information
on and analysis of (a) the overall organization of FMR, (b) the impact of
performance adjustments to management fees, (c) the choice of performance
indices and benchmarks, (d) the composition of peer groups of funds, (e)
transfer agency and bookkeeping fees paid to affiliates of FMR, (f)
investment performance, (g) investment management staffing, (h) the
potential for achieving further economies of scale, (i) operating expenses
paid to third parties, and (j) the information furnished to investors,
including the fund's shareholders.
In considering the Amended Contract, the Board of Trustees and the
Independent Trustees did not identify any single factor as all-important or
controlling, and the following summary does not detail all of the matters
considered. Matters considered by the Board of Trustees and the Independent
Trustees in connection with their approval of the Amended Contract include
the following:
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 annually review a report detailing 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 equity group. Among other things they considered the size,
education and experience of FMR's investment staff, its use of technology,
and FMR's approach to recruiting, training and retaining portfolio managers
and other research, advisory and management personnel.
NATURE AND QUALITY OF OTHER SERVICES. The Board of Trustees and the
Independent Trustees considered the nature, quality, cost and extent of
administrative and shareholder services performed by FMR and affiliated
companies, both under 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, credit
card, 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.
OTHER 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.
CONCLUSION. 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 foregoing summary does not detail all
of the matters considered. Based on their evaluation of all material
factors and assisted by the advice of independent counsel, the Trustees
concluded (i) that the existing management fee structure is fair and
reasonable and (ii) that the proposed modifications to the management fee
rates, that is the reduction of the Group Fee Rate schedule and the
modifications to the performance adjustment calculation, 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.
8. TO APPROVE A NEW SUB-ADVISORY AGREEMENT WITH FMR U.K. FOR THE FUND.
In conjunction with its portfolio management responsibilities on behalf of
the fund, FMR has entered into sub-advisory agreements with affiliates
whose offices are geographically dispersed around the world. To strengthen
these relationships, the Board of Trustees proposes that shareholders of
the fund approve a new sub-advisory agreement (the Proposed Agreement)
between FMR U.K. and FMR on behalf of the fund to replace FMR's existing
agreement with FMR U.K. The Proposed Agreement would allow FMR not only to
receive investment advice and research services from FMR U.K., but also
would permit FMR to grant FMR U.K. investment management authority if FMR
believes it would be beneficial to the fund and its shareholders. Because
FMR pays all of FMR U.K.'s fees, the Proposed Agreement would not affect
the fees paid by the fund to FMR.
On June 19, 1997, the Board of Trustees agreed to submit the Proposed
Agreement to shareholders of the fund pursuant to a unanimous vote of both
the full Board of Trustees and those Trustees who were not "interested
persons" of the trust or FMR. FMR provided substantial information to the
Trustees to assist them in their deliberations. The Trustees determined
that allowing FMR to grant investment management authority to FMR U.K.
would provide FMR increased flexibility in the assignment of portfolio
managers and give the fund access to managers located abroad who may have
more specialized expertise with respect to local companies and markets.
Additionally, the Trustees believe that the fund and its shareholders may
benefit from giving FMR, through FMR U.K., the ability to execute portfolio
transactions from points in Europe that are physically closer to foreign
issuers and the primary markets in which their securities are traded.
Increasing FMR's proximity to foreign markets should enable the fund to
participate more readily in full trading sessions on foreign exchanges, and
to react more quickly to changing market conditions.
If approved by shareholders, the Proposed Agreement will replace the
sub-advisory agreement currently in effect with FMR U.K. with respect to
the fund (the Current Agreement). The Current Agreement, dated November 1,
1989, was approved by the fund's shareholders on October 18, 1989. A copy
of the Proposed Agreement is attached to this proxy statement as Exhibit 2.
FMR U.K., with its principal office in London, England is a wholly-owned
subsidiary of FMR established in 1986 to provide investment research to FMR
with respect to foreign securities. This research complements other
research on foreign securities produced by FMR's U.S.-based research
analysts and portfolio managers, or obtained from broker-dealers or other
sources.
FMR U.K. may also provide investment advisory services to FMR with respect
to other investment companies for which FMR serves as investment adviser,
and to other clients. Currently, FMR U.K.'s only client other than FMR is
Fidelity International Limited (FIL), an affiliate of FMR organized under
the laws of Bermuda. FIL provides investment advisory services to non-U.S.
investment companies and institutional investors investing in securities of
issuers throughout the world. Edward C. Johnson 3d, President and a Trustee
of the trust, is Chairman and a Director of FMR U.K., Chairman, and a
Director of FIL, and a principal stockholder of both FIL and FMR. For more
information on FMR U.K., see the section entitled "Activities and
Management of FMR U.K. and FMR Far East" on page 42.
Under the Current Agreement, FMR U.K. acts as an investment consultant to
FMR and supplies FMR with investment research information and portfolio
management advice as FMR reasonably requests on behalf of the fund. FMR
U.K. provides investment advice and research services with respect to
issuers located outside of the United States, focusing primarily on
companies based in Europe. Under the Current Agreement with FMR U.K., FMR,
NOT THE FUND, pays FMR U.K.'s fee equal to 110% of its costs incurred in
connection with the agreement.
For the fiscal year ended December 31, 1996, FMR paid FMR U.K. $1,434,000
on behalf of the fund. Fees paid to the sub-adviser are not reduced to
reflect expense reimbursements or fee waivers by FMR, if any, in effect
from time to time.
Although FMR employees are expected to consult regularly with FMR U.K.,
under the Current Agreement, FMR U.K. has no authority to make investment
decisions on behalf of the fund. Under the Proposed Agreement, FMR would
continue to receive investment advice from FMR U.K., but it could also
grant investment management authority to FMR U.K. with respect to all or a
portion of the fund's assets. If FMR U.K. were to exercise investment
management authority on behalf of the fund, it would be required, subject
to the supervision of FMR, to direct the investments of the fund in
accordance with the fund's investment objective, policies, and limitations
as provided in the fund's Prospectus or other governing instruments and
such other limitations as the fund may impose by notice in writing to FMR
or FMR U.K. If FMR grants investment management authority to FMR U.K. with
respect to all or a portion of the fund's assets, FMR U.K. would be
authorized to buy or sell stocks, bonds, and other securities for the fund
subject to the overall supervision of FMR and the Board of Trustees. In
addition, the Proposed Agreement would authorize FMR to delegate other
investment management services to FMR U.K., including, but not limited to,
currency management services (including buying and selling currency options
and entering into currency forward and futures contracts on behalf of the
fund), other transactions in futures contracts and options, and borrowing
or lending portfolio securities. If any of these investment management
services were delegated, FMR U.K. would continue to be subject to the
control and direction of FMR and the Board of Trustees and to be bound by
the investment objective, policies, and limitations of the fund.
THE PROPOSED AGREEMENT WOULD NOT INCREASE THE FEES PAID TO FMR BY THE
FUND. The fees paid by FMR to FMR U.K. for investment advice as described
above would remain unchanged. However, to the extent that FMR granted
investment management authority to FMR U.K., FMR would pay FMR U.K. 50% of
its monthly management fee with respect to the average net assets managed
on a discretionary basis by FMR U.K. for investment management and
portfolio execution services.
If approved by shareholders, the Proposed Agreement would take effect on
February 1, 1998 (or, if later, the first day of the first month following
approval) and would continue in force until July 31, 1998 and from year to
year thereafter, but only as long as its continuance was approved at least
annually by (i) the vote, cast in person at a meeting called for the
purpose, of a majority of those Trustees who are not "interested persons"
of the trust or FMR 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.
The Proposed Agreement could be transferred to a successor of FMR U.K.
without resulting in its termination and without shareholder approval, as
long as the transfer did not constitute an assignment under applicable
securities regulations. The Proposed Agreement would be terminable on 60
days' written notice by either party to the agreement and the Proposed
Agreement would terminate automatically in the event of its assignment.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the fund and its shareholders. The Trustees recommend voting FOR
the proposal. If the Proposed Agreement is not approved, FMR's Current
Agreement on behalf of the fund will continue in effect.
9. TO APPROVE A NEW SUB-ADVISORY AGREEMENT WITH FMR FAR EAST FOR THE FUND.
In conjunction with its portfolio management responsibilities on behalf of
the fund, FMR has entered into sub-advisory agreements with affiliates
whose offices are geographically dispersed around the world. To strengthen
these relationships, the Board of Trustees proposes that shareholders of
the fund approve a new sub-advisory agreement (the Proposed Agreement)
between FMR Far East and FMR on behalf of the fund to replace FMR's
existing agreement with FMR Far East. The Proposed Agreement would allow
FMR not only to receive investment advice and research services from FMR
Far East, but also would permit FMR to grant FMR Far East investment
management authority if FMR believes it would be beneficial to the fund and
its shareholders. Because FMR pays all of FMR Far East's fees, the Proposed
Agreement would not affect the fees paid by the fund to FMR.
On June 19, 1997, the Board of Trustees agreed to submit the Proposed
Agreement to shareholders of the fund pursuant to a unanimous vote of both
the full Board of Trustees and those Trustees who were not "interested
persons" of the trust or FMR. FMR provided substantial information to the
Trustees to assist them in their deliberations. The Trustees determined
that allowing FMR to grant investment management authority to FMR Far East
would provide FMR increased flexibility in the assignment of portfolio
managers and give the fund access to managers located abroad who may have
more specialized expertise with respect to local companies and markets.
Additionally, the Trustees believe that the fund and its shareholders may
benefit from giving FMR, through FMR Far East, the ability to execute
portfolio transactions from points in the Far East that are physically
closer to foreign issuers and the primary markets in which their securities
are traded. Increasing FMR's proximity to foreign markets should enable the
fund to participate more readily in full trading sessions on foreign
exchanges, and to react more quickly to changing market conditions.
If approved by shareholders, the Proposed Agreement will replace the
sub-advisory agreement currently in effect with FMR Far East with respect
to the fund (the Current Agreement). The Current Agreement, dated November
1, 1989, was approved by the fund's shareholders on October 18, 1989. A
copy of the Proposed Agreement is attached to this proxy statement as
Exhibit 3.
FMR Far East, with its principal office in Tokyo, Japan is a wholly-owned
subsidiary of FMR established in 1986 to provide investment research to FMR
with respect to foreign securities. This research complements other
research on foreign securities produced by FMR's U.S.-based research
analysts and portfolio managers, or obtained from broker-dealers or other
sources.
FMR Far East may also provide investment advisory services to FMR with
respect to other investment companies for which FMR serves as investment
adviser, and to other clients. Currently, FMR Far East's only client other
than FMR is Fidelity International Limited (FIL), an affiliate of FMR
organized under the laws of Bermuda. FIL provides investment advisory
services to non-U.S. investment companies and institutional investors
investing in securities of issuers throughout the world. Edward C. Johnson
3d, President and a Trustee of the trust, is Chairman and a Director of FMR
Far East, Chairman, and a Director of FIL, and a principal stockholder of
both FIL and FMR. For more information on FMR Far East, see the section
entitled "Activities and Management of FMR U.K. and FMR Far East" on page
42.
Under the Current Agreement, FMR Far East acts as an investment
consultant to FMR and supplies FMR with investment research information and
portfolio management advice as FMR reasonably requests on behalf of the
fund. FMR Far East provides investment advice and research services with
respect to issuers located outside of the United States, focusing primarily
on companies based in the Far East. Under the Current Agreement with FMR
Far East, FMR, NOT THE FUND, pays FMR Far East's fee equal to 105% of its
costs incurred in connection with the agreement.
For the fiscal year ended December 31, 1996, FMR paid FMR Far East
$1,402,000 on behalf of the fund. Fees paid to the sub-adviser are not
reduced to reflect expense reimbursements or fee waivers by FMR, if any, in
effect from time to time.
Although FMR employees are expected to consult regularly with FMR Far
East, under the Current Agreement, FMR Far East has no authority to make
investment decisions on behalf of the fund. Under the Proposed Agreement,
FMR would continue to receive investment advice from FMR Far East, but it
could also grant investment management authority to FMR Far East with
respect to all or a portion of the fund's assets. If FMR Far East were to
exercise investment management authority on behalf of the fund, it would be
required, subject to the supervision of FMR, to direct the investments of
the fund in accordance with the fund's investment objective, policies, and
limitations as provided in the fund's Prospectus or other governing
instruments and such other limitations as the fund may impose by notice in
writing to FMR or FMR Far East. If FMR grants investment management
authority to FMR Far East with respect to all or a portion of the fund's
assets, FMR Far East would be authorized to buy or sell stocks, bonds, and
other securities for the fund subject to the overall supervision of FMR and
the Board of Trustees. In addition, the Proposed Agreement would authorize
FMR to delegate other investment management services to FMR Far East,
including, but not limited to, currency management services (including
buying and selling currency options and entering into currency forward and
futures contracts on behalf of the fund), other transactions in futures
contracts and options, and borrowing or lending portfolio securities. If
any of these investment management services were delegated, FMR Far East
would continue to be subject to the control and direction of FMR and the
Board of Trustees and to be bound by the investment objective, policies,
and limitations of the fund.
THE PROPOSED AGREEMENT WOULD NOT INCREASE THE FEES PAID TO FMR BY THE
FUND. The fees paid by FMR to FMR Far East for investment advice as
described above would remain unchanged. However, to the extent that FMR
granted investment management authority to FMR Far East, FMR would pay FMR
Far East 50% of its monthly management fee with respect to the average net
assets managed on a discretionary basis by FMR Far East for investment
management and portfolio execution services.
If approved by shareholders, the Proposed Agreement would take effect on
February 1, 1998 (or, if later, the first day of the first month following
approval) and would continue in force until July 31, 1998 and from year to
year thereafter, but only as long as its continuance was approved at least
annually by (i) the vote, cast in person at a meeting called for the
purpose, of a majority of those Trustees who are not "interested persons"
of the trust or FMR 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.
The Proposed Agreement could be transferred to a successor of FMR Far East
without resulting in its termination and without shareholder approval, as
long as the transfer did not constitute an assignment under applicable
securities regulations. The Proposed Agreement would be terminable on 60
days' written notice by either party to the agreement and the Proposed
Agreement would terminate automatically in the event of its assignment.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the fund and its shareholders. The Trustees recommend voting FOR
the proposal. If the Proposed Agreement is not approved, FMR's Current
Agreement on behalf of the fund will continue in effect.
10. TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT OBJECTIVE AND REPLACE
CERTAIN FUNDAMENTAL INVESTMENT POLICIES WITH NON-FUNDAMENTAL POLICIES.
The Board of Trustees has approved, and recommends that shareholders of
the fund approve, modifications to the fund's investment objective and
policies. The proposed modifications are intended to describe the fund's
investment approach more clearly, and to reflect changes in the fund's
investments and investment strategies over the years since the fund was
introduced. The proposal also would make some of the fund's investment
policies non-fundamental (i.e., changeable without shareholder approval,
but subject to supervision of the Board of Trustees), to provide
flexibility to deal with future changes in the marketplace.
INVESTMENT OBJECTIVE AND RELATED INVESTMENT POLICIES. Contrafund's
investment objective and policies have remained essentially unchanged since
the fund was introduced in 1967. The fund's investment objective, and the
policies describing its key investment strategies, currently read as
follows:
The fund seeks capital appreciation by investing in securities of
companies believed by FMR to be undervalued due to an overly pessimistic
appraisal by the public of their future outlook. FMR will invest in
securities of companies (1) which have been unpopular for some time but
where recent developments bring hope of improved operating results; (2)
which have enjoyed recent market popularity but which appear to have
temporarily fallen out of favor for reasons that are considered
non-recurring or short term; or (3) which are undervalued in relation to
popular securities of other companies in the same industry.
The objective and policies above are fundamental, which means they cannot
be modified without a vote of the fund's shareholders.
The proposal would modify the fund's investment objective and policies to
reduce their emphasis on securities that are unpopular or out of favor.
Unlike some "contrarian" funds, which focus exclusively on companies that
are doing poorly or whose stock is trading at historical lows, Contrafund's
contrarian approach also encompasses companies where general market opinion
is neutral or even favorable, if FMR believes that the market has
overlooked or discounted positive developments that could benefit the
company's stock. To reflect this aspect of the fund's strategy more
clearly, the proposal would modify the fund's objective and policies to
read as follows:
The fund seeks capital appreciation by investing in securities of
companies whose value FMR believes is not fully recognized by the public.
These may include (1) companies experiencing positive fundamental change
such as a new management team or product launch, a significant cost-cutting
initiative, a merger or acquisition, or a reduction in industry capacity
that should lead to improved pricing; (2) companies whose earnings
potential has increased or is expected to increase more than generally
perceived; (3) companies that have enjoyed recent market popularity but
which appear to have temporarily fallen out of favor for reasons that are
considered non-recurring or short term; and (4) companies that are
undervalued in relation to securities of other companies in the same
industry.
Under the proposal, only the fund's investment objective would be
fundamental. The examples in the sentence following the objective could be
changed without further shareholder approval subject to the supervision of
the Board of Trustees.
The proposal would not change the fund's contrarian investment style or
its goal of seeking capital appreciation. The proposal would, however,
reflect changes in the fund's mix of investment strategies over the years.
Companies whose stock is out of favor or viewed pessimistically play a less
significant role in the fund than they did in the 1960s, when the fund
commenced operations. In their place, companies that are not necessarily
performing poorly, but whose potential is not fully recognized by the
market, have come to represent a more important part of the fund's
portfolio.
The proposed investment objective and policies would reflect this change
in emphasis. In addition, the proposed investment policies would provide
specific examples of the factors (such as a positive fundamental change in
a company's business, or an increase in earnings potential) that FMR uses
to identify instances where the popular view overlooks or understates a
company's future prospects. Because the proposed investment policies would
be non-fundamental, they could be modified or updated in the future without
the necessity of calling a shareholder meeting, to remain current with the
strategies used by FMR to implement the fund's objective.
OTHER INVESTMENT POLICIES. In addition to the investment policies
discussed above, the fund's current fundamental investment policies provide
that the fund: 1) will remain substantially fully invested in equity and
debt securities; 2) will usually be primarily invested in common stocks and
convertible securities; and 3) may make substantial investments in
investment-grade fixed-income obligations if FMR believes that market
conditions warrant a more conservative approach. If the proposal is
approved by shareholders, the fund's Trustees intend to replace the above
fundamental policies with the following non-fundamental policies:
The fund normally invests primarily in common stocks and securities
convertible into common stocks. The fund also reserves the right to invest
without limitation in preferred stocks and investment-grade debt
instruments for temporary, defensive purposes.
Under both the current and proposed policies, the fund will primarily
invest in common stocks and convertible securities and will reserve the
right to invest in more conservative instruments under certain
circumstances. Although the fund will no longer be required to remain
substantially fully invested in equity and debt securities, iit is not
currently anticipated that the changes will have any material impact on the
investments of the fund or the way it is managed. However, approval of the
proposal will permit the fund to react to changing market and regulatory
conditions, subject to the supervision of the Trustees, without seeking
additional approval from shareholders.
The proposal will broaden the fund's ability to invest in more
conservative investments in two ways. First, the proposed policy clarifies
that more conservative investments can be made for temporary, defensive
purposes rather than just when market conditions warrant a more
conservative approach. Second, the fund would be able to invest in
preferred stocks as well as investment grade debt securities for temporary,
defensive purposes. Preferred stocks are generally considered more risky
than investment-grade debt securities, but more conservative than common
stocks. The proposed "temporary defensive" policy is the standard policy
for Fidelity equity funds. The Trustees believe that efforts to standardize
the fund's temporary defensive policy will promote operational efficiencies
and facilitate compliance monitoring.
The SEC has proposed amendments to its requirements for mutual fund
prospectuses that would require a fund to disclose in its prospectus its
ability to invest for temporary defensive purposes and the percentage of
assets that may be committed to temporary defensive positions. Replacing
the fund's current fundamental temporary defensive policy with a
non-fundamental policy would permit the fund to conform to any future
regulatory changes without the possible need for an additional shareholder
meeting.
See Exhibit 4 for a complete listing of the current and proposed
investment objective and policies discussed in this proposal.
CONCLUSION. The Board of Trustees believes that the proposed modifications
to the fund's investment objective and policies are in the best interests
of the fund and its shareholders, and unanimously recommends that
shareholders vote FOR the proposal. If approved, the proposed objective and
policies will take effect when the disclosure is revised to reflect the
changes. If the proposal is not approved, the fund's current fundamental
objective and policies will remain unchanged.
11. TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT LIMITATION CONCERNING
DIVERSIFICATION.
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:
"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 the percentage limitations imposed by the 1940 Act for
diversified investment companies. The amended fundamental diversification
limitation makes one change from the current limitation; it would permit
the fund to invest without limit in the securities of other investment
companies. Pursuant to an order of exemption granted by the SEC, the fund
may invest up to 25% of total assets in non-publicly offered money market
or short-term bond funds (the Central Funds) managed by FMR or an affiliate
of FMR. The Central Funds do not currently pay investment advisory,
management, or transfer agent fees, but do pay minimal fees for services,
such as custodian, auditor, and Independent Trustees fees. FMR anticipates
that the Central Funds will benefit the fund by enhancing the efficiency of
cash management for the Fidelity funds and by providing increased
short-term investment opportunities. If the proposal is approved, the
Central Funds are expected to serve as a principal option for cash
investment for the fund.
If this proposal is approved, the amended fundamental diversification
limitation cannot be changed without the approval of the shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit 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.
12. TO RATIFY THE FUND'S FUNDAMENTAL INVESTMENT LIMITATION CONCERNING THE
CONCENTRATION OF ITS INVESTMENTS IN A SINGLE INDUSTRY.
Pursuant to Section 8(b) of the 1940 Act, a mutual fund must state its
policy relating to, among other things, the concentration of its
investments in a single industry. The fund has been operating under the
following fundamental investment limitation concerning concentration:
"The fund may not purchase the securities of any issuer (other than
obligations issued or guaranteed by the U.S. government or any of its
agencies or instrumentalities) if, as a result, more than 25% of the fund's
total assets would be invested in the securities of companies whose
principal business activities are in the same industry."
The Trustees recommend that shareholders of the fund vote to ratify the
fund's fundamental investment limitation concerning concentration with the
following change:
"The fund may not purchase the securities of any issuer (other than
((securities)) issued or guaranteed by the U.S. Government or any of its
agencies or instrumentalities) if, as a result, more than 25% of the fund's
total assets would be invested in the securities of companies whose
principal business activities are in the same industry."
The primary purpose of the proposal is to ratify the fund's current
fundamental concentration limitation while also conforming it to a
limitation which is expected to become standard for all funds managed by
FMR. If the proposal is approved, the new fundamental concentration
limitation cannot be changed without the approval of shareholders.
Ratification of the proposed amended limitation on concentration is not
expected to affect the way the fund is managed, the investment performance
of the fund, or the securities or instruments in which the fund invests.
The proposed amended limitation is not substantially different from the
current policy and is not likely to have any impact on the investment
techniques employed by the fund.
CONCLUSION. The Board of Trustees has concluded that the proposal benefits
the fund and its shareholders. The Trustees recommend voting FOR the
proposal. Upon shareholder approval, the amended fundamental limitation
will become effective when the disclosure is revised to reflect the change.
If the proposal is not approved by the shareholders of the fund, the fund's
current limitation will remain unchanged.
13. TO RATIFY THE FUND'S FUNDAMENTAL INVESTMENT LIMITATION CONCERNING
COMMODITIES.
Pursuant to Section 8(b) of the 1940 Act, a mutual fund must state its
policy relating to, among other things, the purchase and sale of
commodities. The fund has been operating under a fundamental investment
limitation concerning commodities. In general, the fund does not anticipate
any future investment activity with respect to physical commodities, but
pursuant to securities regulation, must have a stated policy.
The Trustees recommend that shareholders vote to ratify the following
fundamental investment limitation concerning the purchase or sale of
commodities currently being followed by the fund:
"The fund may not purchase or sell physical commodities unless acquired as
a result of ownership of securities or other instruments (but this shall
not prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed by
physical commodities)."
The fundamental policy conforms to a limitation that is expected to become
standard for all funds managed by FMR. The limitation does not permit the
fund to acquire physical commodities directly, but permits the fund to
invest in securities and other instruments backed by commodities and to
sell commodities acquired as a result of ownership of other investments. In
addition, the limitation does not apply to options and futures contracts.
If the proposal is approved, the fundamental limitation concerning
commodities cannot be changed without the approval of shareholders.
Ratification of the proposed amended limitation on commodities is not
expected to affect the way the fund is managed, the investment performance
of the fund, or the securities or instruments in which the fund invests.
CONCLUSION. The Board of Trustees has concluded that the proposal benefits
the fund and its shareholders. The Trustees recommend voting FOR the
proposal. Upon shareholder approval, the fundamental limitation will become
effective immediately. If the proposal is not approved by the shareholders
of the fund, the fund will continue to follow its current limitation.
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,
net assets, and total expenses of funds with investment objectives similar
to Fidelity Contrafund and advised by FMR is contained in the Table of
Average Net Assets and Expense Ratios in Exhibit 5 beginning on page 74.
FMR, its officers and directors, its affiliated companies, and the
Trustees, from time to time have transactions with various banks, including
the custodian banks for certain of the funds advised by FMR. Those
transactions that have occurred to date have included mortgages and
personal and general business loans. In the judgment of FMR, the terms and
conditions of those transactions were not influenced by existing or
potential custodial or other fund relationships.
The Directors of FMR are Edward C. Johnson 3d, Chairman of the Board and
of the Executive Committee; Robert C. Pozen, President; and Peter S. Lynch,
Vice Chairman. With the exception of Robert C. Pozen, who is proposed for
election as a Trustee, each of the Directors is also a Trustee of the
trust. Messrs. Johnson 3d, Pozen, J. Gary Burkhead, John H. Costello,
Arthur S. Loring, Robert H. Morrison, Richard A. Silver, Leonard M. Rush,
William J. Hayes, Ms. Abigail Johnson, and Mr. William Danoff are currently
officers of the trust and officers or employees of FMR or FMR Corp. With
the exception of Mr. Costello, Mr. Silver, and Mr. Danoff, all of these
persons hold or have options to acquire stock of FMR Corp. The principal
business address of each of the Directors of FMR is 82 Devonshire Street,
Boston, Massachusetts 02109.
All of the stock of FMR is owned by its parent company, FMR Corp., 82
Devonshire Street, Boston, Massachusetts 02109, which was organized on
October 31, 1972. Members of Mr. Edward C. Johnson 3d's family are the
predominant owners of a class of shares of common stock, representing
approximately 49% of the voting power of FMR Corp., and, therefore, under
the 1940 Act may be deemed to form a controlling group with respect to FMR
Corp.
During the period January 1, 1996 through September 30, 1997, no
transactions were entered into by Trustees and nominees as Trustee of the
trust involving more than 1% of the voting common, non-voting common and
equivalent stock, or preferred stock of FMR Corp.
ACTIVITIES AND MANAGEMENT OF FMR U.K. AND FMR FAR EAST
FMR U.K. and FMR Far East are wholly-owned subsidiaries of FMR formed in
1986 to provide research and investment advice with respect to companies
based outside the United States for certain funds for which FMR acts as
investment adviser. FMR may also grant the sub-advisers investment
management authority as well as authority to buy and sell securities for
certain of the funds for which it acts as investment adviser, if FMR
believes it would be beneficial to a fund.
Funds with investment objectives similar to Fidelity Contrafund managed by
FMR with respect to which FMR currently has sub-advisory agreements with
either FMR U.K. or FMR Far East, and the net assets of each of these funds,
are indicated in the Table of Average Net Assets and Expense Ratios in
Exhibit 5 beginning on page 74.
The Directors of FMR U.K. and FMR Far East are Edward C. Johnson 3d,
Chairman, and Robert C. Pozen, President. Mr. Johnson 3d also is President
and a Trustee of the trust and other funds advised by FMR; Chairman and a
Director of FMR Texas Inc. (FMR Texas); Chairman, Chief Executive Officer,
President, and a Director of FMR Corp., Chairman of the Board and of the
Executive Committee of FMR, and a Director of FMR. In addition, Mr. Pozen
is Senior Vice President of the trust and Senior Vice President and a
Trustee of other funds advised by FMR; a Director of FMR Corp.; Director of
FMR; and President and Director of FMR Texas. Each of the Directors is a
stock holder of FMR Corp. The principal business address of the Directors
is 82 Devonshire Street, Boston, Massachusetts 02109.
PRESENT MANAGEMENT CONTRACT
The fund employs FMR to furnish investment advisory and other services.
Under its management contract with the fund, FMR acts as investment adviser
and, subject to the supervision of the Board of Trustees, directs the
investments of the fund in accordance with its investment objective,
policies, and limitations. FMR also provides the fund with all necessary
office facilities and personnel for servicing the fund's investments,
compensates all officers of the fund and all Trustees who are "interested
persons" of the trust or of FMR, and all personnel of the fund or FMR
performing services relating to research, statistical, and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administrative services
necessary for the operation of the fund. These services include providing
facilities for maintaining the fund's organization; supervising relations
with custodians, transfer and pricing agents, accountants, underwriters,
and other persons dealing with the fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining the fund's
records and the registration of the fund's shares under federal and state
laws; developing management and shareholder services for the fund; and
furnishing reports, evaluations, and analyses on a variety of subjects to
the Trustees. Services provided by affiliates of FMR will continue under
the proposed management contract described in Proposal 8.
In addition to the management fee payable to FMR, the fund pays transfer
agent and pricing and bookkeeping fees to Fidelity Service Company, Inc.
(FSC), an affiliate of FMR, its transfer, dividend disbursing, and
shareholder servicing agent. Although the fund's current management
contract provides that the fund will pay for typesetting, printing, and
mailing prospectuses, statements of additional information, notices, and
reports to shareholders, the trust, on behalf of the fund has entered into
a revised transfer agent agreement with FSC, pursuant to which FSC bears
the costs of providing these services to existing shareholders. Other
expenses paid by the fund include interest, taxes, brokerage commissions,
and the fund's proportionate share of insurance premiums and Investment
Company Institute dues. The fund is also liable for such non-recurring
expenses as may arise, including costs of any litigation to which the fund
may be a party, and any obligation it may have to indemnify its officers
and Trustees with respect to litigation.
Transfer agent fees and pricing and bookkeeping fees, including
reimbursement for out-of-pocket expenses, paid to FSC by the fund for
fiscal 1996 amounted to $42,465,000 and $849,000, respectively. FSC also
received fees for administering the fund's securities lending program.
Securities lending fees are based on the number and duration of individual
securities loans. Securities lending fees for fiscal 1996 were $105,000.
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. Promotional and administrative expenses in connection with the
offer and sale of shares are paid by FMR. Sales charge revenue paid to, and
retained by, FDC for fiscal 1996 amounted to $16,029,000.
FMR is the fund's manager pursuant to a management contract dated January
1, 1993, which was approved by shareholders on December 16, 1992.
Shareholder approval had been requested for changes affecting the basic fee
portion of the total management fee that FMR receives from the fund. The
approved contract modified the group fee by providing for lower fee rates
if FMR's assets under management remain above $138 billion, and also raised
the individual fund fee rate from 0.09% to 0.30%.
For the services of FMR under the contract, the fund pays FMR a monthly
management fee composed of the sum of two elements: a basic fee and a
performance adjustment based on a comparison of the fund's performance to
that of the Standard & Poor's 500 Index (S&P 500(registered trademark)).
COMPUTING THE BASIC FEE. The fund's basic fee rate is composed of two
elements: 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 $453 billion of group net assets
- - the approximate level for December 1996 - was 0.3021%, which is the
weighted average of the respective fee rates for each level of group net
assets up to $453 billion.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE
RATES
Average Group Annualized Group Net Effective
Assets Rate Assets Annual
Fee Rate
0 - $ 3 billion .5200% $ 0.5 billion .5200%
3 - 6 .4900 25 .4238
6 - 9 .4600 50 .3823
9 - 12 .4300 75 .3626
12 - 15 .4000 100 .3512
15 - 18 .3850 125 .3430
18 - 21 .3700 150 .3371
21 - 24 .3600 175 .3325
24 - 30 .3500 200 .3284
30 - 36 .3450 225 .3253
36 - 42 .3400 250 .3223
42 - 48 .3350 275 .3198
48 - 66 .3250 300 .3175
66 - 84 .3200 325 .3153
84 - 102 .3150 350 .3133
102 - 138 .3100
138 - 174 .3050
174 - 228 .3000
228 - 282 .2950
282 - 336 .2900
Over 336 .2850
Under the fund's current management contract with FMR, the group fee rate
is based on a schedule with breakpoints ending at .3000% for average group
assets in excess of $174 billion. Prior to January 1, 1993, the group fee
rate breakpoints shown above for average group assets in excess of $138
billion and under $228 billion were voluntarily adopted by FMR on January
1, 1992. The additional breakpoints shown above for average group assets in
excess of $228 billion were voluntarily adopted by FMR on November 1, 1993.
On August 1, 1994, FMR voluntarily revised the prior extensions to the
group fee rate schedule, and added new breakpoints for average group assets
in excess of $210 billion and under $390 billion as shown in the schedule
below, pending shareholder approval of a new management contract reflecting
the revised schedule. The revised group fee rate schedule provides for
lower management fee rates as FMR's assets under management increase. The
revised group fee rate schedule was identical to the above schedule for
average group assets under $210 billion.
On January 1, 1996, FMR voluntarily added new breakpoints to the revised
schedule for average group assets in excess of $390 billion, pending
shareholder approval of a new management contract reflecting the revised
schedule and additional breakpoints. The revised group fee rate schedule
and its extensions provide for lower management fee rates as FMR's assets
under management increase. For average group assets in excess of $210
billion, the revised group fee rate schedule with additional breakpoints
voluntarily adopted by FMR is as follows:
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE
RATES
Average Group Annualized Group Net Effective
Assets Rate Assets Annual
Fee Rate
174 - $210 .3000% $ 150 billion .3371%
billion
210 - 246 .2950% 175 .3325
246 - 282 .2900 200 .3284
282 - 318 .2850 225 .3249
318 - 354 .2800 250 .3219
354 - 390 .2750 275 .3190
390 - 426 .2700 300 .3163
426 - 462 .2650 325 .3137
462 - 498 .2600 350 .3113
498 - 534 .2550 375 .3090
Over 534 .2500 400 .3067
425 .3046
450 .3024
475 .3003
500 .2982
525 .2962
550 .2942
The individual fund fee rate is 0.30%. Based on the average group net
assets of the funds advised by FMR for December 1996, the annual basic fee
rate would be calculated as follows:
Group Fee Rate Individual Fund Basic Fee Rate
Fee Rate
0.3021% + 0.30% = 0.6021%
One-twelfth of this annual basic fee rate is applied to the fund's net
assets averaged for the month, giving a dollar amount, which is the fee for
that month.
COMPUTING THE PERFORMANCE ADJUSTMENT. The basic fee is subject to upward
or downward adjustment, depending upon whether, and to what extent, the
fund's investment performance for the performance period exceeds, or is
exceeded by, the record of the S&P 500 (the Index) over the same period.
The performance period consists of the current month plus the previous 35
months. Each percentage point of difference, calculated to the nearest 1.0%
(up to a maximum difference of +/-10.00 ) is multiplied by a performance
adjustment rate of .02%. Thus, the maximum annualized adjustment rate is
+/-.20%. This performance comparison is made at the end of each month. One
twelfth (1/12) of this rate is then applied to the fund's average net
assets for the entire performance period, giving a dollar amount which will
be added to (or subtracted from) the basic fee.
The fund's performance is calculated based on change in net asset value.
For purposes of calculating the performance adjustment, any dividends or
capital gain distributions paid by the fund are treated as if reinvested in
fund shares at the net asset value as of the record date for payment. The
record of the Index is based on change in value and is adjusted for any
cash distributions from the companies whose securities compose the Index.
Because the adjustment to the basic fee is based on the fund's performance
compared to the investment record of the Index, the controlling factor is
not whether the fund's performance is up or down per se, but whether it is
up or down more or less than the record of the Index. Moreover, the
comparative investment performance of the fund is based solely on the
relevant performance period without regard to the cumulative performance
over a longer or shorter period of time.
During fiscal 1996, FMR received $111,424,000 for its services as
investment adviser to the fund. This fee, which includes both the basic fee
and the performance adjustment, was equivalent to 0.57% of the average net
assets of the fund. For 1996, the downward performance adjustment amounted
to $6,130,000 for the fund.
FMR may, from time to time, voluntarily reimburse all or a portion of the
fund's 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. Expense reimbursements
by FMR will increase the fund's total returns and repayment of the
reimbursement by the fund will lower its total returns.
SUB-ADVISORY AGREEMENTS
On behalf of Fidelity Contrafund FMR has entered into sub-advisory
agreements with FMR U.K. and FMR Far East. Pursuant to the sub-advisory
agreements, FMR may receive investment advice and research services outside
the United States from the sub-advisers. The sub-advisory agreements, dated
November 1, 1989, were approved by shareholders on October 18, 1989. These
were the first sub-advisory agreements adopted for the fund.
Currently, FMR U.K. and FMR Far East each focus on issuers in countries
other than the United States such as those in Europe, Asia, and the Pacific
Basin.
FMR U.K. and FMR Far East, which were organized in 1986, are wholly owned
subsidiaries of FMR. Under the sub-advisory agreements FMR pays the fees of
FMR U.K. and FMR Far East. For providing non-discretionary investment
advice and research services, FMR pays FMR U.K. and FMR Far East fees equal
to 110% and 105%, respectively, of FMR U.K.'s and FMR Far East's costs
incurred in connection with providing investment advice and research
services.
For providing investment advice and research services, the fees paid to
the sub-advisers for the fiscal year ended 1996 were as follows:
FMR U.K. FMR Far East
$ 1,434,000 $1,402,000
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) and Fidelity Brokerage Services (FBS), indirect
subsidiaries of FMR Corp., if the commissions are fair, reasonable, and
comparable to commissions charged by non-affiliated, qualified brokerage
firms for similar services.
During fiscal 1996 the fund paid brokerage commissions of $_______ to NFSC
and $______ to FBS. During fiscal 1996, this amounted to approximately
____% and ____%, respectively, of the aggregate brokerage commissions paid
by the fund.
SUBMISSION OF CERTAIN SHAREHOLDER PROPOSALS
The trust does not hold annual shareholder meetings. Shareholders wishing
to submit proposals for inclusion in a proxy statement for a subsequent
shareholder meeting should send their written proposals to the Secretary of
the Trust, 82 Devonshire Street, Boston, Massachusetts 02109.
NOTICE TO BANKS, BROKER-DEALERS AND
VOTING TRUSTEES AND THEIR NOMINEES
Please advise the trust, in care of [CHECK WITH MARKETING TO DETERMINE WHO
CONTACT WILL BE.], 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
FORM OF MANAGEMENT CONTRACT
The language to be added to the current contract is ((underlined)) and
material to be deleted is set forth in [brackets].
MANAGEMENT CONTRACT
BETWEEN
FIDELITY CONTRAFUND
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
[MODIFICATION made] ((AGREEMENT AMENDED and RESTATED as of)) this [1st]
____ day of [January 1993] ((February 1998)), by and between Fidelity
Contrafund, a Massachusetts business trust which may issue one or more
series of shares of beneficial interest (hereinafter called the "Fund"), on
behalf of its single existing series of shares of beneficial interest
(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, [Fidelity Contrafund,] the Fund, on behalf of the Portfolio,
and [Fidelity Management & Research Company] ((the Adviser)) hereby
consent, pursuant to Paragraph 6 of the existing Management Contract dated
[November 1, 1989] ((January 1, 1993)), to a modification of said Contract
in the manner set forth below. The [Modified] ((Amended)) Management
Contract shall, when executed by duly authorized officers of the Fund and
[the] Adviser, take effect on [the later of January 1, 1993] ((February
___, 1998)) 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[, at its own expense,] shall place all orders for the
purchase and sale of portfolio securities for the Portfolio's account with
brokers or dealers selected by the Adviser, which may include brokers or
dealers affiliated with the Adviser. The Adviser shall use its best
efforts to seek to execute portfolio transactions at prices which are
advantageous to the Portfolio and at commission rates which are reasonable
in relation to the benefits received. In selecting brokers or dealers
qualified to execute a particular transaction, brokers or dealers may be
selected who also provide brokerage and research services (as those terms
are defined in Section 28(e) of the Securities Exchange Act of 1934) to the
Portfolio and/or the other accounts over which the Adviser or its
affiliates exercise investment discretion. The Adviser is authorized to
pay a broker or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for the Portfolio which is
in excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Adviser determines in good
faith that such amount of commission is reasonable in relation to the value
of the brokerage and research services provided by such broker or dealer.
This determination may be viewed in terms of either that particular
transaction or the overall responsibilities which the Adviser and its
affiliates have with respect to accounts over which they exercise
investment discretion. The Trustees of the Fund shall periodically review
the commissions paid by the Portfolio to determine if the commissions paid
over representative periods of time were reasonable in relation to the
benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors,
officers or otherwise and that directors, officers and stockholders of the
Adviser are or may be or become similarly interested in the Fund, and that
the Adviser may be or become interested in the Fund as a shareholder or
otherwise.
3. The Adviser will be compensated on the following basis for the services
and facilities to be furnished hereunder. The Adviser shall receive a
monthly management fee, payable monthly as soon as practicable after the
last day of each month, composed of a [b]Basic [f]Fee and a [p]Performance
[a]Adjustment. [to the basic fee based upon the investment performance of
the Portfolio in relation to] ((The Performance Adjustment is added to or
subtracted from the Basic Fee depending on whether the Portfolio
experienced better or worse performance than)) the Standard & Poor's 500
[Composite Stock Price] Index (the "Index"). ((The Performance Adjustment
is not cumulative. An increased fee will result even though the
performance of the Portfolio over some period of time shorter than the
performance period has been behind that of the Index, and, conversely, a
reduction in the fee will be made for a month even though the performance
of the Portfolio over some period of time shorter than the performance
period has been ahead of that of the Index.)) The [b]((B))asic [f]((F))ee
and the [p]((P))erformance [a]((A))djustment will be computed as follows:
(a) Basic Fee Rate: The annual [b]((B))asic [f]((F))ee [r]((R))ate shall
be the sum of the [g]((G))roup [f]((F))ee [r]((R))ate and the
[i]((I))ndividual [f]((F))und [f]((F))ee [r]((R))ate calculated to the
nearest millionth decimal place as follows:
(i) Group Fee Rate. The [g]((G))roup [f]((F))ee [r]((R))ate 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 [charter]
((Fund's Declaration of Trust or other organizational document)) [of each
investment company]) determined as of the close of business on each
business day throughout the month. The [g]((G))roup [f]((F))ee [r]((R))ate
shall be determined on a cumulative basis pursuant to the following
schedule:
Average Net Assets Annualized Fee Rate (for each level)
0 - $ 3 billion .520((0))%
3 - 6 .490((0))
6 - 9 .460((0))
9 - 12 .430((0))
12 - 15 .400((0))
15 - 18 .385((0))
18 - 21 .370((0))
21 - 24 .360((0))
24 - 30 .350((0))
30 - 36 .345((0))
36 - 42 .340((0))
42 - 48 .335((0))
48 - 66 .325((0))
66 - 84 .320((0))
84 - 102 .315((0))
102 - 138 .310((0))
138 - 174 .305((0))
[Over 174] [.300]
((174 - 210)) ((.3000))
((210 - 246)) ((.2950))
((246 - 282)) ((.2900))
((282 - 318)) ((.2850))
((318 - 354)) ((.2800))
((354 - 390)) ((.2750))
((390 - 426)) ((.2700))
((426 - 462)) ((.2650))
((462 - 498)) ((.2600))
((498 - 534)) ((.2550))
((Over 534)) ((.2500))
(ii) Individual Fund Fee Rate. The [i]((I))ndividual [f]((F))und
[f]((F((ee [r]((R))ate shall be 0.30%.
(b) Basic Fee. One-twelfth of the [annual] [b]((B))asic [f]((F))ee
[r]((R))ate shall be applied to the average of the net assets of the
Portfolio (computed in the manner set forth in the Fund's Declaration of
Trust ((or other organizational document))) determined as of the close of
business on each business day throughout the month. The resulting dollar
amount comprises the [b]((B))asic [f]((F))ee. [This basic fee will be
subject to upward or downward adjustment on the basis of the Portfolio's
investment performance as follows:]
(c) [The] Performance Adjustment ((Rate)): [An adjustment to the monthly
basic fee will be made by applying a performance adjustment rate to the
average net assets of the Portfolio over the performance period. The
resulting dollar figure will be added to or subtracted from the basic fee
depending on whether the Portfolio experienced better or worse performance
than the Index.] ((The Performance Adjustment Rate is 0.02% for each
percentage point (the performance of the Portfolio and the Index each being
calculated to the nearest 0.01%) that the Portfolio's investment
performance for the performance period was better or worse than the record
of the Index as then constituted. The maximum performance adjustment rate
is 0.20%.))
[The performance adjustment rate is 0.02% for each percentage point
rounded to the nearer point (the higher point if exactly one-half point)
that the Portfolio's investment performance for the performance period was
better or worse than the record of the Index as then constituted. The
maximum performance adjustment rate is 0.20%.]
The performance period will commence on December 1, 1984. [(the date of
the predecessor corporation's contract) and d]During the first eleven
months [after such date (including December, 1984)] ((of the performance
period for the Portfolio,)) there will be no performance adjustment.
Starting with the twelfth month [(December, 1985)] ((of the performance
period,)) the performance adjustment will take effect. ((Following the
twelfth month a new month will be added to the performance period until the
performance period equals 36 months. Thereafter the performance period
will consist of the current month plus the previous 35 months.))
[Following the twelfth month a new month will be added to the performance
period until the performance period equals 36 months. Thereafter the
performance period will consist of the current month plus the previous 35
months.]
The Portfolio's investment performance will be measured by comparing (i)
the opening net asset value of one share of the Portfolio on the first
business day of the performance period with (ii) the closing net asset
value of one share of the Portfolio as of the last business day of such
period. In computing the investment performance of the Portfolio and the
investment record of the Index, distributions of realized capital gains,
the value of capital gains taxes per share paid or payable on undistributed
realized long-term capital gains accumulated to the end of such period and
dividends paid out of investment income on the part of the Portfolio, and
all cash distributions of the [companies whose stocks comprise]
((securities included in)) the Index, will be treated as reinvested in
accordance with Rule 205-1 or any other applicable rules under the
Investment Advisers Act of 1940, as the same from time to time may be
amended.
[The computation of the performance adjustment will not be cumulative. A
positive fee rate will apply even though the performance of the Portfolio
over some period of time shorter than the performance period has been
behind that of the Index, and, conversely, a negative fee rate will apply
for a month even though the performance of the Portfolio over some period
of time shorter than the performance period has been ahead of that of the
Index.]
(d) ((Performance Adjustment.)) One-twelfth of the annual
[p]((P))erformance [a]((A))djustment [r]((R))ate [shall] ((will)) be
applied to the average of the net assets of the Portfolio (computed in the
manner set forth in the ((Fund's)) Declaration of Trust ((or other
organizational document)) [of the Fund adjusted as provided in
sub-paragraph (e) of this paragraph 3 below, if applicable)] determined as
of the close of business on each business day throughout the month and the
performance period. [The resulting dollar amount is added to or deducted
from the basic fee.]
[(e) In the event of a merger or other business combination involving
another entity for which the Adviser is the investment adviser, and where
such other entity utilizes a performance adjustment in determining its
investment advisory fee, then:
(A) For purpose of determining the amount of the performance adjustment,
the net assets of the acquired entity averaged over the period from the
first day of the performance period through the date of the transaction
shall be considered to have been included in the net assets of the
Portfolio for the period from the first day of the performance period
through the date of the transaction.
(B) For purposes of determining the performance adjustment, the opening net
asset value of one share of the Portfolio on the first business day of the
performance period shall be adjusted on a dollar-weighed basis by (i)
multiplying the percentage change (to the nearest one-hundredth of one
percent) between the actual net asset value of one share of the Portfolio
and of the other entity on the first day of the Portfolio's performance
period and such respective net asset values per share on the date of the
transaction ( as computed in paragraph 3 (c)) by the respective average net
assets of the Portfolio and such other entity; (measured from the first day
of the Portfolio's performance period through the date of the transaction);
(ii) combining the products determined in (i); (iii) dividing by the sum of
the average net assets of the Portfolio and such other entity; and (iv) if
a positive percentage, dividing 1 plus the percentage determined in (iii)
(expressed as a decimal to the nearest one-hundredth of a percent) into the
net asset value of one share of the Portfolio on the date of the
transaction (as computed in paragraph 3 (c); or (v) if a negative
percentage, deducting the percentage determined in (iii) (expressed as a
decimal to the nearest one-hundredth of a percent) from 1 and dividing the
result into the net asset value of one share of the Portfolio on the date
of the transaction ( as computed in paragraph 3 (c). The resulting adjusted
net asset value of one share of the Portfolio on the first business day of
the Portfolio's performance period shall be utilized in calculating the
annual rate of performance adjustment under paragraph 3 (c) for the 36
monthly fee calculations following the date of the transaction. One-twelfth
of the annual performance adjustment rate shall be applied to the average
of the net assets of the Portfolio determined as provided in paragraph 3
(e) (A). The performance adjustment so computed shall be added to or
deducted from the amount of the basic fee (as computed in paragraph 3 (b))
depending upon whether the performance of the Portfolio exceeded or was
exceeded by the record of the Index.]
([f]((e))) In [the] case of termination of this Contract during any month,
the fee for that month shall be reduced proportionately on the basis of the
number of business days during which it is in effect for that month. The
[b]((B))asic [f]((F))ee [r]((R))ate will be computed on the basis of and
applied to net assets averaged over that month ending on the last business
day on which this Contract is in effect. The amount of this
[p]((P))erformance [a]((A))djustment to the [b]((B))asic [f]((F))ee will be
computed on the basis of and applied to net assets averaged over the
36-month period ending on the last business day on which this Contract is
in effect provided that if this Contract has been in effect less than 36
months, the computation will be made on the basis of the period of time
during which it has been in effect.
4. It is understood that the Portfolio will pay all its expenses [other
than those expressly stated to be payable by the Adviser hereunder], which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in
connection with the purchase or sale of securities and other investment
instruments; (iii) fees and expenses of the Fund's Trustees other than
those who are "interested persons" of the Fund or the Adviser; (iv) legal
and audit expenses; (v) custodian, registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Fund and the Portfolio's shares for distribution under
state and federal securities laws; (vii) expenses of printing and mailing
reports and notices and proxy material to shareholders of the Portfolio;
(viii) all other expenses incidental to holding meetings of the Portfolio's
shareholders, including proxy solicitations therefor; (ix) a pro rata
share, based on relative net assets of the Portfolio and other registered
investment companies having Advisory and Service or Management Contracts
with the Adviser, of 50% of insurance premiums for fidelity and other
coverage; (x) its proportionate share of association membership dues; (xi)
expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (xii) expenses of printing
and mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Portfolio is a party
and the legal obligation which the Portfolio may have to indemnify the
Fund's Trustees and officers with respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and engage
in other activities, provided, however, that such other services and
activities do not, during the term of this Contract, interfere, in a
material manner, with the Adviser's ability to meet all of its obligations
with respect to rendering services to the Portfolio hereunder. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser,
the Adviser shall not be subject to liability to the Portfolio or to any
shareholder of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security ((or other
investment instrument.))
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Contract shall continue in force until July 31,
[1993] ((1998)) 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.
(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 [the] ((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 2
FORM OF SUB-ADVISORY AGREEMENT
The language to be added to the current contract is ((underlined)) and
material to be deleted is set forth in [brackets].
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
((AND
FIDELITY CONTRAFUND ON BEHALF OF FIDELITY CONTRAFUND))
AGREEMENT made this [1st day of November, 1989] ((_____ day of February,
1998,)) by and between Fidelity Management & Research [(U.K.) Inc.]
((Company,)) a Massachusetts corporation with principal offices at 82
Devonshire Street, Boston, Massachusetts (hereinafter called the
"[Sub-]Adviser") and Fidelity Management & Research (((U.K.) Inc.))
[Company, a Massachusetts corporation with principal offices at 82
Devonshire Street, Boston, Massachusetts] (hereinafter called the
(("Sub-))Adviser")((; and Fidelity Contrafund, a Massachusetts business
trust which may issue one or more series of shares of beneficial interest
(hereinafter called the "Trust") on behalf of Fidelity Contrafund
(hereinafter called the "Portfolio").))
WHEREAS ((the Trust and)) the Adviser [has] ((have)) entered into a
Management Contract [with Fidelity Contrafund, a Massachusetts business
trust which may issue one or more series of shares of beneficial interest
(hereinafter called the "Fund"),] on behalf of [its single existing series
of shares of beneficial interest, Fidelity Contrafund (hereinafter called
the "Portfolio")] ((the Portfolio)), pursuant to which the Adviser is to
act as investment [adviser to the Fund] ((manager of the Portfolio)), and
WHEREAS the Sub-Adviser ((and its subsidiaries and other affiliated persons
have)) [has] personnel in [Western Europe] ((various locations throughout
the world)) and [was] ((have been)) formed ((in part)) for the purpose of
researching and compiling information and recommendations with respect to
the economies of various countries, and ((securities of)) issuers located
[outside of North America, principally in Western Europe.] ((in such
countries, and providing investment advisory services in connection
therewith;))
NOW THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Adviser and the Sub-Adviser agree as follows:
((1. Duties: The Adviser may, in its discretion, appoint the Sub-Adviser
to perform one or more of the following services with respect to all or a
portion of the investments of the Portfolio. The services and the portion
of the investments of the Portfolio to be advised or managed by the
Sub-Adviser shall be as agreed upon from time to time by the Adviser and
the Sub-Adviser. The Sub-Adviser shall pay the salaries and fees of all
personnel of the Sub-Adviser performing services for the Portfolio relating
to research, statistical and investment activities.))
[1.] (((a) INVESTMENT ADVICE: If and to the extent requested by the
Adviser,)) [T]the Sub-Adviser shall [act as an investment consultant]
((provide investment advice to the Portfolio and)) [to] the Adviser ((with
respect to all or a portion of the investments of the Portfolio, and in
connection with such advice)) [and] shall furnish ((the Portfolio and)) the
Adviser factual information, research reports and investment
recommendations [relating to non-U.S. issuers of securities located in, and
the economies of, various countries outside the U.S., all] as the Adviser
may reasonably require. Such information [shall] ((may)) include written
and oral reports and analyses.
(((b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Advisor, the Sub-Advisor shall, subject to the supervision of the Advisor,
manage all or a portion of the investments of the Portfolio in accordance
with the investment objective, policies and limitations provided in the
Portfolio's Prospectus or other governing instruments, as amended from time
to time, the Investment Company Act of 1940 (the "1940 Act") and rules
thereunder, as amended from time to time, and such other limitations as the
Trust or Advisor may impose with respect to the Portfolio by notice to the
Sub-Advisor. With respect to the portion of the investments of the
Portfolio under its management, the Sub-Advisor is authorized to make
investment decisions on behalf of the Portfolio with regard to any stock,
bond, other security or investment instrument, and to place orders for the
purchase and sale of such securities through such broker-dealers as the
Sub-Advisor may select. The Sub-Advisor may also be authorized, but only
to the extent such duties are delegated in writing by the Advisor, to
provide additional investment management services to the Portfolio,
including but not limited to services such as managing foreign currency
investments, purchasing and selling or writing futures and options
contracts, borrowing money or lending securities on behalf of the
Portfolio. All investment management and any other activities of the
Sub-Advisor shall at all times be subject to the control and direction of
the Advisor and the Trust's Board of Trustees.
(c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform any or all
of the services contemplated by this Agreement directly or through such of
its subsidiaries or other affiliated persons as the Sub-Advisor shall
determine; provided, however, that performance of such services through
such subsidiaries or other affiliated persons shall have been approved by
the Trust to the extent required pursuant to the 1940 Act and rules
thereunder.
2. Information to be Provided to the Trust and the Adviser: The
Sub-Adviser shall furnish such reports, evaluations, information or
analyses to the Trust and the Adviser as the Trust's Board of Trustees or
the Adviser may reasonably request from time to time, or as the Sub-Adviser
may deem to be desirable.
3. Brokerage: In connection with the services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Sub-Advisor shall
place all orders for the purchase and sale of portfolio securities for the
Portfolio's account with brokers or dealers selected by the Sub-Advisor,
which may include brokers or dealers affiliated with the Advisor or
Sub-Advisor. The Sub-Advisor shall use its best efforts to seek to execute
portfolio transactions at prices which are advantageous to the Portfolio
and at commission rates which are reasonable in relation to the benefits
received. In selecting brokers or dealers qualified to execute a
particular transaction, brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of l934) to the Portfolio and/or to
the other accounts over which the Sub-Advisor or Advisor exercise
investment discretion. The Sub-Advisor is authorized to pay a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess of
the amount of commission another broker or dealer would have charged for
effecting that transaction if the Sub-Advisor determines in good faith that
such amount of commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer. This
determination may be viewed in terms of either that particular transaction
or the overall responsibilities which the Sub-Advisor has with respect to
accounts over which it exercises investment discretion. The Trustees of
the Trust shall periodically review the commissions paid by the Portfolio
to determine if the commissions paid over representative periods of time
were reasonable in relation to the benefits to the Portfolio.))
[2]((4). ((Compensation:)) The [Sub-Adviser will be compensated by the]
Adviser ((shall compensate the Sub-Adviser)) on the following basis for the
services to be furnished hereunder. [: the Adviser agrees to pay the
Sub-Adviser a monthly fee equal to 110% of the Sub-Adviser's costs incurred
in connection with the Agreement, said costs to be determined in relation
to the assets of the Portfolio that benefit from the services of the
Sub-Adviser.]
(((a) INVESTMENT ADVISORY FEE: For services provided under subparagraph
(a) of paragraph 1 of this Agreement, the Advisor agrees to pay the
Sub-Advisor a monthly Sub-Advisory Fee. The Sub-Advisory Fee shall be
equal to 110% of the Sub-Advisor's costs incurred in connection with
rendering the services referred to in subparagraph (a) of paragraph 1 of
this Agreement. The Sub-Advisory Fee shall not be reduced to reflect
expense reimbursements or fee waivers by the Advisor, if any, in effect
from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under subparagraph
(b) of paragraph 1 of this Agreement, the Advisor agrees to pay the
Sub-Advisor a monthly Investment Management Fee. The Investment Management
Fee shall be equal to: (i) 50% of the monthly management fee rate
(including performance adjustments, if any) that the Portfolio is obligated
to pay the Advisor under its Management Contract with the Advisor,
multiplied by: (ii) the fraction equal to the net assets of the Portfolio
as to which the Sub-Advisor shall have provided investment management
services divided by the net assets of the Portfolio for that month. If in
any fiscal year the aggregate expenses of the Portfolio exceed any
applicable expense limitation imposed by any state or federal securities
laws or regulations, and the Advisor waives all or a portion of its
management fee or reimburses the Portfolio for expenses to the extent
required to satisfy such limitation, the Investment Management Fee paid to
the Sub-Advisor will be reduced by 50% of the amount of such waivers or
reimbursements multiplied by the fraction determined in (ii). If the
Sub-Advisor reduces its fees to reflect such waivers or reimbursements and
the Advisor subsequently recovers all or any portion of such waivers or
reimbursements, then the Sub-Advisor shall be entitled to receive from the
Advisor a proportionate share of the amount recovered. To the extent that
waivers and reimbursements by the Advisor required by such limitations are
in excess of the Advisor's management fee, the Investment Management Fee
paid to the Sub-Advisor will be reduced to zero for that month, but in no
event shall the Sub-Advisor be required to reimburse the Advisor for all or
a portion of such excess reimbursements.
(c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph (1) for
the same portion of the investments of the Portfolio for the same period,
the fees paid to the Sub-Advisor with respect to such investments shall be
calculated exclusively under subparagraph (b) of this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the Sub-Advisor
hereunder or by the Advisor under the Management Contract with the
Portfolio, which expenses payable by the Portfolio shall include, without
limitation, (i) interest and taxes; (ii) brokerage commissions and other
costs in connection with the purchase or sale of securities and other
investment instruments; (iii) fees and expenses of the Trust's Trustees
other than those who are "interested persons" of the Trust, the Sub-Advisor
or the Advisor; (iv) legal and audit expenses; (v) custodian, registrar and
transfer agent fees and expenses; (vi) fees and expenses related to the
registration and qualification of the Trust and the Portfolio's shares for
distribution under state and federal securities laws; (vii) expenses of
printing and mailing reports and notices and proxy material to shareholders
of the Portfolio; (viii) all other expenses incidental to holding meetings
of the Portfolio's shareholders, including proxy solicitations therefore;
(ix) a pro rata share, based on relative net assets of the Portfolio and
other registered investment companies having Advisory and Service or
Management Contracts with the Advisor, of 50% of insurance premiums for
fidelity and other coverage; (x) its proportionate share of association
membership dues; (xi) expenses of typesetting for printing Prospectuses and
Statements of Additional Information and supplements thereto; (xii)
expenses of printing and mailing Prospectuses and Statements of Additional
Information and supplements thereto sent to existing shareholders; and
(xiii) such non-recurring or extraordinary expenses as may arise, including
those relating to actions, suits or proceedings to which the Portfolio is a
party and the legal obligation which the Portfolio may have to indemnify
the Trust's Trustees and officers with respect thereto.))
[3]((6)). ((Interested Persons:)) It is understood that Trustees,
officers and shareholders of the [Fund] ((Trust)) are or may be or become
interested in the Adviser [and] or the Sub-Adviser as directors, officers
or otherwise and that directors, officers and stockholders of the Adviser
[and] ((or)) the Sub-Adviser are or may be or become similarly interested
in the [Fund] ((Trust)), and that the Adviser or the Sub-Adviser may be or
become interested in the [Fund] ((Trust)) as a shareholder or otherwise.
[4]((7)). ((Services to Other Companies or Accounts: The services of the
Sub-Adviser to the Adviser are not to be deemed to be exclusive, the
Sub-Adviser being free to render services to others and engage in other
activities, provided, however, that such other services and activities do
not, during the term of this Agreement, interfere, in a material manner,
with the Sub-Adviser's ability to meet all of its obligations hereunder.))
The Sub-Adviser shall for all purposes be an independent contractor and not
an agent or employee of the Adviser or the [Fund] ((Trust)). [The
Sub-Adviser shall have no authority to act for, represent, bind or obligate
the Adviser or the Fund, and shall in no event have discretion to invest or
reinvest assets held by the Portfolio.]
[5]((8)). ((Standard of Care:)) [The Services of the Sub-Adviser to the
Adviser are not to be deemed to be exclusive, the Sub-Adviser being free to
render services to others and engage in other activities, provided,
however, that such other services and activities do not, during the term of
this Agreement, interfere, in a material manner, with the Sub-Adviser's
ability to meet all of its obligations with respect to rendering investment
advice hereunder.] In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the
part of the Sub-Adviser, the Sub-Adviser shall not be subject to liability
to the Adviser, the [Fund] ((Trust)) or to any shareholder of the Portfolio
for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses that may be sustained in the purchase,
holding or sale of any security.
((9. Duration and Termination of Agreement; Amendments:))
[6.] (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph [6]((9)), this Agreement shall continue in force until July
31, [1990] ((1998)) and indefinitely thereafter, but only so long as the
continuance after such period shall be specifically approved at least
annually by vote of the [Fund's] ((Trust's)) Board of Trustees or by vote
of a majority of the outstanding voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Adviser,
the Sub-Adviser and the Portfolio, such consent on the part of the [Fund]
((Portfolio)) to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of
this paragraph [6]((9)), the terms of any continuance or modification of
[the] ((this)) Agreement must have been approved by the vote of a majority
of those Trustees of the [Fund] ((Trust)) who are not parties to such
Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval.
(d) Either the Adviser, the Sub-Adviser or the Portfolio may, at
any time on sixty (60) days' prior written notice to the other parties,
terminate this Agreement, without payment of any penalty, by action of its
Board of Trustees or Directors, or ((with respect to the Portfolio)) by
vote of a majority of its outstanding voting securities. This Agreement
shall terminate automatically in the event of its assignment.
[7]((10)). ((Limitation of Liability:)) The Sub-Adviser is hereby
expressly put on notice of the limitation of shareholder liability as set
forth in the Declaration of Trust ((or other organizational document)) of
the [Fund] ((Trust)) and agrees that any obligations of the [Fund]
((Trust)) or the Portfolio arising in connection with this Agreement shall
be limited in all cases to the Portfolio and its assets, and the
Sub-Adviser shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio. Nor shall the
Sub-Adviser seek satisfaction of any such obligation from the Trustees or
any individual Trustee.
((11. Governing Law: This Agreement shall be governed by, and construed
in accordance with, the laws of the Commonwealth of Massachusetts, without
giving effect to the choice of laws provisions thereof.))
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested persons,"
when used herein, shall have the respective meanings specified in the
Investment Company Act of 1940 as now in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as of
the date written above.
[SIGNATURE LINES OMITTED]
EXHIBIT 3
FORM OF SUB-ADVISORY AGREEMENT
The language to be added to the current contract is ((underlined)) and
material to be deleted is set forth in [brackets].
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC.
((AND
FIDELITY CONTRAFUND ON BEHALF OF FIDELITY CONTRAFUND))
AGREEMENT made this [1st day of November 1989] ((_____ day of February
1998)), by and between Fidelity Management & Research [(Far East) Inc.]
((Company,)) a Massachusetts corporation with principal offices at 82
Devonshire Street, Boston, Massachusetts (hereinafter called the
"[Sub-]Adviser") and Fidelity Management & Research (U.K.) Inc. [Company, a
Massachusetts corporation with principal offices at 82 Devonshire Street,
Boston, Massachusetts] (hereinafter called the (("Sub-))Adviser")((; and
Fidelity Contrafund, a Massachusetts business trust which may issue one or
more series of shares of beneficial interest (hereinafter called the
"Trust") on behalf of Fidelity Contrafund (hereinafter called the
"Portfolio").))
WHEREAS ((the Trust and)) the Adviser [has] ((have)) entered into a
Management Contract [with Fidelity Contrafund, a Massachusetts business
trust which may issue one or more series of shares of beneficial interest
(hereinafter called the "Fund"),] on behalf of its single existing series
of shares of beneficial interest, Fidelity Contrafund (hereinafter called
the "Portfolio")] ((the Portfolio)), pursuant to which the Adviser is to
act as investment [adviser to the Fund] ((manager of the Portfolio)), and
WHEREAS the Sub-Adviser ((and its subsidiaries and other affiliated persons
have)) [has] personnel in [Asia and the Pacific Basin] ((various locations
throughout the world)) and [was] ((have been)) formed ((in part)) for the
purpose of researching and compiling information and recommendations with
respect to the economies of various countries, and ((securities of))
issuers located [outside of North America, principally in Asia and the
Pacific Basin.] ((in such countries, and providing investment advisory
services in connection therewith;))
NOW THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Adviser and the Sub-Adviser agree as follows:
((1. Duties: The Adviser may, in its discretion, appoint the Sub-Adviser
to perform one or more of the following services with respect to all or a
portion of the investments of the Portfolio. The services and the portion
of the investments of the Portfolio to be advised or managed by the
Sub-Adviser shall be as agreed upon from time to time by the Adviser and
the Sub-Adviser. The Sub-Adviser shall pay the salaries and fees of all
personnel of the Sub-Adviser performing services for the Portfolio relating
to research, statistical and investment activities.))
[1.] (((a) INVESTMENT ADVICE: If and to the extent requested by the
Adviser,)) [T]the Sub-Adviser shall [act as an investment consultant]
((provide investment advice to the Portfolio and)) [to] the Adviser ((with
respect to all or a portion of the investments of the Portfolio, and in
connection with such advice)) [and] shall furnish ((the Portfolio and)) the
Adviser factual information, research reports and investment
recommendations [relating to non-U.S. issuers of securities located in, and
the economies of, various countries outside the U.S., all] as the Adviser
may reasonably require. Such information [shall] ((may)) include written
and oral reports and analyses.
(((b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Advisor, the Sub-Advisor shall, subject to the supervision of the Advisor,
manage all or a portion of the investments of the Portfolio in accordance
with the investment objective, policies and limitations provided in the
Portfolio's Prospectus or other governing instruments, as amended from time
to time, the Investment Company Act of 1940 (the "1940 Act") and rules
thereunder, as amended from time to time, and such other limitations as the
Trust or Advisor may impose with respect to the Portfolio by notice to the
Sub-Advisor. With respect to the portion of the investments of the
Portfolio under its management, the Sub-Advisor is authorized to make
investment decisions on behalf of the Portfolio with regard to any stock,
bond, other security or investment instrument, and to place orders for the
purchase and sale of such securities through such broker-dealers as the
Sub-Advisor may select. The Sub-Advisor may also be authorized, but only
to the extent such duties are delegated in writing by the Advisor, to
provide additional investment management services to the Portfolio,
including but not limited to services such as managing foreign currency
investments, purchasing and selling or writing futures and options
contracts, borrowing money, or lending securities on behalf of the
Portfolio. All investment management and any other activities of the
Sub-Advisor shall at all times be subject to the control and direction of
the Advisor and the Trust's Board of Trustees.
(c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform any or all
of the services contemplated by this Agreement directly or through such of
its subsidiaries or other affiliated persons as the Sub-Advisor shall
determine; provided, however, that performance of such services through
such subsidiaries or other affiliated persons shall have been approved by
the Trust to the extent required pursuant to the 1940 Act and rules
thereunder.
2. Information to be Provided to the Trust and the Adviser: The
Sub-Adviser shall furnish such reports, evaluations, information or
analyses to the Trust and the Adviser as the Trust's Board of Trustees or
the Adviser may reasonably request from time to time, or as the Sub-Adviser
may deem to be desirable.
3. Brokerage: In connection with the services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Sub-Advisor shall
place all orders for the purchase and sale of portfolio securities for the
Portfolio's account with brokers or dealers selected by the Sub-Advisor,
which may include brokers or dealers affiliated with the Advisor or
Sub-Advisor. The Sub-Advisor shall use its best efforts to seek to execute
portfolio transactions at prices which are advantageous to the Portfolio
and at commission rates which are reasonable in relation to the benefits
received. In selecting brokers or dealers qualified to execute a
particular transaction, brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of l934) to the Portfolio and/or to
the other accounts over which the Sub-Advisor or Advisor exercise
investment discretion. The Sub-Advisor is authorized to pay a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess of
the amount of commission another broker or dealer would have charged for
effecting that transaction if the Sub-Advisor determines in good faith that
such amount of commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer. This
determination may be viewed in terms of either that particular transaction
or the overall responsibilities which the Sub-Advisor has with respect to
accounts over which it exercises investment discretion. The Trustees of
the Trust shall periodically review the commissions paid by the Portfolio
to determine if the commissions paid over representative periods of time
were reasonable in relation to the benefits to the Portfolio.))
[2]((4)). ((Compensation:)) The [Sub-Adviser will be compensated by the]
Adviser ((shall compensate the Sub-Adviser)) on the following basis for the
services to be furnished hereunder. [: the Adviser agrees to pay the
Sub-Adviser a monthly fee equal to 105% of the Sub-Adviser's costs incurred
in connection with the Agreement, said costs to be determined in relation
to the assets of the Portfolio that benefit from the services of the
Sub-Adviser.]
(((a) INVESTMENT ADVISORY FEE: For services provided under subparagraph
(a) of paragraph 1 of this Agreement, the Advisor agrees to pay the
Sub-Advisor a monthly Sub-Advisory Fee. The Sub-Advisory Fee shall be
equal to 105% of the Sub-Advisor's costs incurred in connection with
rendering the services referred to in subparagraph (a) of paragraph 1 of
this Agreement. The Sub-Advisory Fee shall not be reduced to reflect
expense reimbursements or fee waivers by the Advisor, if any, in effect
from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under subparagraph
(b) of paragraph 1 of this Agreement, the Advisor agrees to pay the
Sub-Advisor a monthly Investment Management Fee. The Investment Management
Fee shall be equal to: (i) 50% of the monthly management fee rate
(including performance adjustments, if any) that the Portfolio is obligated
to pay the Advisor under its Management Contract with the Advisor,
multiplied by: (ii) the fraction equal to the net assets of the Portfolio
as to which the Sub-Advisor shall have provided investment management
services divided by the net assets of the Portfolio for that month. If in
any fiscal year the aggregate expenses of the Portfolio exceed any
applicable expense limitation imposed by any state or federal securities
laws or regulations, and the Advisor waives all or a portion of its
management fee or reimburses the Portfolio for expenses to the extent
required to satisfy such limitation, the Investment Management Fee paid to
the Sub-Advisor will be reduced by 50% of the amount of such waivers or
reimbursements multiplied by the fraction determined in (ii). If the
Sub-Advisor reduces its fees to reflect such waivers or reimbursements and
the Advisor subsequently recovers all or any portion of such waivers and
reimbursements, then the Sub-Advisor shall be entitled to receive from the
Advisor a proportionate share of the amount recovered. To the extent that
waivers and reimbursements by the Advisor required by such limitations are
in excess of the Advisor's management fee, the Investment Management Fee
paid to the Sub-Advisor will be reduced to zero for that month, but in no
event shall the Sub-Advisor be required to reimburse the Advisor for all or
a portion of such excess reimbursements.
(c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph 1 for
the same portion of the investments of the Portfolio for the same period,
the fees paid to the Sub-Advisor with respect to such investments shall be
calculated exclusively under subparagraph (b) of this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the Sub-Advisor
hereunder or by the Advisor under the Management Contract with the
Portfolio, which expenses payable by the Portfolio shall include, without
limitation, (i) interest and taxes; (ii) brokerage commissions and other
costs in connection with the purchase or sale of securities and other
investment instruments; (iii) fees and expenses of the Trust's Trustees
other than those who are "interested persons" of the Trust, the Sub-Advisor
or the Advisor; (iv) legal and audit expenses; (v) custodian, registrar and
transfer agent fees and expenses; (vi) fees and expenses related to the
registration and qualification of the Trust and the Portfolio's shares for
distribution under state and federal securities laws; (vii) expenses of
printing and mailing reports and notices and proxy material to shareholders
of the Portfolio; (viii) all other expenses incidental to holding meetings
of the Portfolio's shareholders, including proxy solicitations therefore;
(ix) a pro rata share, based on relative net assets of the Portfolio and
other registered investment companies having Advisory and Service or
Management Contracts with the Advisor, of 50% of insurance premiums for
fidelity and other coverage; (x) its proportionate share of association
membership dues; (xi) expenses of typesetting for printing Prospectuses and
Statements of Additional Information and supplements thereto; (xii)
expenses of printing and mailing Prospectuses and Statements of Additional
Information and supplements thereto sent to existing shareholders; and
(xiii) such non-recurring or extraordinary expenses as may arise, including
those relating to actions, suits or proceedings to which the Portfolio is a
party and the legal obligation which the Portfolio may have to indemnify
the Trust's Trustees and officers with respect thereto.))
[3]((6)). ((Interested Persons:)) It is understood that Trustees,
officers and shareholders of the [Fund] ((Trust)) are or may be or become
interested in the Adviser [and] ((or)) the Sub-Adviser as directors,
officers or otherwise and that directors, officers and stockholders of the
Adviser [and] ((or)) the Sub-Adviser are or may be or become similarly
interested in the [Fund] ((Trust)), and that the Adviser or the Sub-Adviser
may be or become interested in the [Fund] ((Trust)) as a shareholder or
otherwise.
[4]((7)). ((Services to Other Companies or Accounts: The services of the
Sub-Adviser to the Adviser are not to be deemed to be exclusive, the
Sub-Adviser being free to render services to others and engage in other
activities, provided, however, that such other services and activities do
not, during the term of this Agreement, interfere, in a material manner,
with the Sub-Adviser's ability to meet all of its obligations hereunder.))
The Sub-Adviser shall for all purposes be an independent contractor and not
an agent or employee of the Adviser or the [Fund] ((Trust)). [The
Sub-Adviser shall have no authority to act for, represent, bind or obligate
the Adviser or the Fund, and shall in no event have discretion to invest or
reinvest assets held by the Portfolio.]
[5]((8)). ((Standard of Care:)) [The Services of the Sub-Adviser to the
Adviser are not to be deemed to be exclusive, the Sub-Adviser being free to
render services to others and engage in other activities, provided,
however, that such other services and activities do not, during the term of
this Agreement, interfere, in a material manner, with the Sub-Adviser's
ability to meet all of its obligations with respect to rendering investment
advice hereunder.] In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the
part of the Sub-Adviser, the Sub-Adviser shall not be subject to liability
to the Adviser, the [Fund] ((Trust)) or to any shareholder of the [Fund]
((Portfolio)) for any act or omission in the course of, or connected with,
rendering services hereunder or for any losses that may be sustained in the
purchase, holding or sale of any security.
((9. Duration and Termination of Agreement; Amendments:))
[6.] (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph [6]((9)), this Agreement shall continue in force until July
31, [1990] ((1998)) and indefinitely thereafter, but only so long as the
continuance after such period shall be specifically approved at least
annually by vote of the [Fund's] ((Trust's)) Board of Trustees or by vote
of a majority of the outstanding voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Adviser,
the Sub-Adviser and the Portfolio, such consent on the part of the [Fund]
((Portfolio)) to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b)
of this paragraph [6]((9)), the terms of any continuance or modification of
[the] ((this)) Agreement must have been approved by the vote of a majority
of those Trustees of the [Fund] ((Trust)) who are not parties to such
Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval.
(d) Either the Adviser, the Sub-Adviser or the Portfolio may, at
any time on sixty (60) days' prior written notice to the other parties,
terminate this Agreement, without payment of any penalty, by action of its
Board of Trustees or Directors, or ((with respect to the Portfolio)) by
vote of a majority of its outstanding voting securities. This Agreement
shall terminate automatically in the event of its assignment.
[7]((10)). ((Limitation of Liability:)) The Sub-Adviser is hereby
expressly put on notice of the limitation of shareholder liability as set
forth in the Declaration of Trust ((or other organizational document)) of
the [Fund] ((Trust)) and agrees that any obligations of the [Fund]
((Trust)) or the Portfolio arising in connection with this Agreement shall
be limited in all cases to the Portfolio and its assets, and the
Sub-Adviser shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio. Nor shall the
Sub-Adviser seek satisfaction of any such obligation from the Trustees or
any individual Trustee.
((11. Governing Law: This Agreement shall be governed by, and construed
in accordance with, the laws of the Commonwealth of Massachusetts, without
giving effect to the choice of laws provisions thereof.))
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested persons,"
when used herein, shall have the respective meanings specified in the
Investment Company Act of 1940 as now in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as of
the date written above.
[SIGNATURE LINES OMITTED]
EXHIBIT 4
CURRENT FUNDAMENTAL INVESTMENT OBJECTIVE. The fund seeks capital
appreciation by investing in securities of companies believed by FMR to be
undervalued due to an overly pessimistic appraisal by the public of their
future outlook.
CURRENT FUNDAMENTAL INVESTMENT POLICIES.
FMR will invest in companies:
1) which have been unpopular for some time but where recent developments
bring hope of improved operating results;
2) which have enjoyed recent market popularity but which appear to have
temporarily fallen out of favor for reasons that are considered
non-recurring or short term; or
3) which are undervalued in relation to popular securities of other
companies in the same industry.
The fund will remain substantially fully invested in common stocks,
preferred stocks, bonds, securities with warrants attached, and other
certificates of indebtedness. The fund will usually be primarily invested
in common stocks and securities convertible into common stocks. However, if
FMR believes that market conditions warrant a more conservative approach,
the fund may make substantial investments in investment-grade fixed-income
obligations of all types and U.S. Government obligations.
PROPOSED FUNDAMENTAL INVESTMENT OBJECTIVE. The fund seeks capital
appreciation by investing in securities of companies whose value FMR
believes is not fully recognized by the public.
PROPOSED NON-FUNDAMENTAL INVESTMENT POLICIES. The types of companies the
fund may invest in include:
1) companies experiencing positive fundamental change such as a new
management team or product launch, a significant cost-cutting initiative, a
merger or acquisition, or a reduction in industry capacity that leads to
improved pricing;
2) companies whose earnings potential has increased or is expected to
increase more than generally perceived;
3) companies that have enjoyed recent market popularity but which appear
to have temporarily fallen out of favor for reasons that are considered
non-recurring or short term; and
4) companies that are undervalued in relation to securities of other
companies in the same industry.
The fund normally invests primarily in common stocks and securities
convertible into common stocks. FMR normally invests the fund's assets
according to its investment strategy. The fund also reserves the right to
invest without limitation in preferred stocks and investment-grade debt
instruments for temporary, defensive purposes.
EXHIBIT 5
[TABLE WILL BE UPDATED IN A SUBSEQUENT FILING]
FUNDS ADVISED BY FMR - TABLE OF AVERAGE NET ASSETS AND EXPENSE RATIOS (A)
<TABLE>
<CAPTION>
INVESTMENT FISCAL AVERAGE RATIO OF NET RATIO OF
OBJECTIVE AND FUND YEAR END (A) NET ASSETS ADVISORY FEES EXPENSES TO
(MILLIONS)(B) TO AVERAGE AVERAGE NET
NET ASSETS ASSETS (C)
PAID
TO FMR (C)
<S> <C> <C> <C> <C> <C> <C>
GROWTH
Select Portfolios:
Air Transportation 2/28/95 $ 9.4 0.24%* 2.50%*
((pound))
American Gold 2/28/95 350.5 0.62 1.41
Automotive ((pound)) 2/28/95 102.2 0.62 1.80*
Biotechnology ((pound)) 2/28/95 413.9 0.62 1.59
Brokerage and
Investment
Management ((pound)) 2/28/95 30.5 0.26* 2.54*
Chemicals ((pound)) 2/28/95 144.0 0.62 1.51*
Computers ((pound)) 2/28/95 131.6 0.62 1.69*
Construction and 2/28/95 40.9 0.62 1.74*
Housing ((pound))
Consumer 2/28/95 7.9 0.30* 2.49*
Products ((pound))
Defense and 2/28/95 5.2 -* 2.49*
Aerospace ((pound))
Developing 2/28/95 222.6 0.62 1.50*
Communication
s ((pound))
Electronics ((pound)) 2/28/95 155.8 0.62 1.71*
Energy ((pound)) 2/28/95 104.4 0.62 1.85
Energy Service 2/28/95 59.4 0.62 1.79*
((pound))
Environmental 2/28/95 45.0 0.62 2.01*
Services ((pound))
Financial Services 2/28/95 108.2 0.62 1.54*
((pound))
Food and 2/28/95 92.7 0.62 1.68*
Agriculture ((pound))
Health Care ((pound)) 2/28/95 642.9 0.62 1.36*
Home Finance ((pound)) 2/28/95 200.7 0.62 1.45*
Industrial 2/28/95 123.8 0.62 1.78*
Equipment ((pound))
Industrial 2/28/95 177.3 0.62 1.53*
Materials ((pound))
Insurance ((pound)) 2/28/95 10.3 0.62 2.34*
Leisure ((pound)) 2/28/95 73.1 0.62 1.62*
Medical Delivery 2/28/95 214.0 0.62 1.45*
((pound))
Multimedia ((pound)) (PSI) 2/28/95 31.5 0.62 2.03*
Natural Gas ((pound)) 2/28/95 77.1 0.62 1.66*
Paper and Forest 2/28/95 56.2 0.62 1.87*
Products ((pound))
Precious Metals 2/28/95 437.1 0.62 1.46
and
Minerals ((pound))
Regional Banks 2/28/95 143.9 0.62 1.56*
((pound))
Select Portfolios
(continued):
Retailing ((pound)) 2/28/95 $ 60.8 0.62% 1.96*%
Software and 2/28/95 182.1 0.62 1.50*
Computer
Services ((pound))
Technology ((pound)) 2/28/95 206.1 0.62 1.56*
Telecommunicatio 2/28/95 374.3 0.62 1.55*
ns ((pound))
Transportation ((pound)) 2/28/95 12.7 0.62 2.36*
Utilities 2/28/95 224.4 0.62 1.42*
Growth((pound))(PSI)
Magellan ((pound)) 3/31/95 35,788.6 0.75 0.96*
Mid Cap Stock 4/30/95** 300.2 0.66(dagger) 1.22(dagger)*
Small Cap Stock 4/30/95 640.2 0.56 0.90*
Fidelity Fifty ((pound)) 6/30/94** 44.2 0.63(dagger) 1.58(dagger)
Blue Chip Growth 7/31/94 1,359.3 0.70 1.22
Low-Priced Stock 7/31/94 2,084.5 0.79 1.13
((pound))
OTC Portfolio 7/31/94 1,296.9 0.50 .88
Export Fund 8/31/95** 62.6 0.62(dagger) 1.65(dagger)
Advisor Strategic
Opportunities:
Class A ((pound)) 9/30/94 337.0 0.72 1.84
Class B ((pound)) 9/30/94** 3.3 0.72 2.63(dagger)
Initial Shares ((pound)) 9/30/94 19.6 0.72 1.14
Destiny I 9/30/94 3,204.9 0.65 0.70
Destiny II 9/30/94 1,326.8 0.73 0.80
Advisor Emerging 10/31/94 125.5 1.00(dagger) 1.78(dagger)
Asia Fund, Inc.
(oval)
Advisor Global 10/31/94 115.8 0.77 2.07*
Resources ((pound))
Advisor Growth 10/31/94 3,215.2 0.69 1.62*
Opportunities -
Class A
Advisor Overseas 10/31/94 428.7 0.80 2.12
((sigma))
Canada ((sigma)) 10/31/94 214.8 0.80 1.57
Capital Appreciation 10/31/94 1,720.3 0.77 1.17
((pound))
Disciplined Equity 10/31/94 891.4 0.72 1.05
((pound))
Diversified 10/31/94 316.5 0.72 1.25
International ((sigma))
Emerging Markets 10/31/94 1,639.2 0.77 1.52
((sigma))
Europe ((sigma)) 10/31/94 493.3 0.72 1.35
Europe Capital 10/31/94** 288.2 0.77(dagger) 1.54(dagger)
Appreciation ((sigma))
International Value 10/31/95** 9.6 0.77(dagger) 2.00(dagger)*
(rexall)
Japan (rexall) 10/31/94 362.4 0.75 1.42
Latin America ((sigma)) 10/31/94 $ 782.5 0.77% 1.48%
Overseas ((sigma)) 10/31/94 1,895.8 0.80 1.24
Pacific Basin (rexall) 10/31/94 509.8 0.86 1.54
Southeast Asia (rexall) 10/31/94 806.9 0.69 1.47
Stock Selector ((pound)) 10/31/94 710.5 0.72 1.09
Value ((pound)) 10/31/94 3,325.0 0.52 0.79
Worldwide ((sigma)) 10/31/94 530.6 0.77 1.32
Advisor Equity
Portfolio Growth :
Class A ((pound)) 11/30/94 663.9 0.64 1.70
Institutional Class 11/30/94 364.1 0.64 0.84
((pound))
Emerging Growth 11/30/94 617.7 0.66 1.02
((pound))
Growth Company 11/30/94 2,748.9 0.73 1.05
((pound))
New Millennium 11/30/94 312.2 0.82 1.29
Retirement Growth 11/30/94 2989.2 0.77 1.07
((pound))
</TABLE>
(a) All fund data are as of the fiscal year end noted in the chart or as of
April 30,1995, if fiscal year end figures are not yet available.
(b) Average net assets are computed on the basis of average net assets of
each fund 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 (*).
(d) Reflects reductions for any expense reimbursement paid by or due from
FMR pursuant to voluntary or state expense limitations, or paid by or due
from brokers to which certain portfolio trades have been directed. Funds so
affected are indicated by an (*).
(dagger) Annualized
# Year end changed
** Less than a complete fiscal year
(yen) Fidelity Management & Research Company has entered into sub-advisory
agreements with the following affiliates: Fidelity Management & Research
(U.K.) Inc. (FMR U.K.), Fidelity Management & Research (Far East) Inc. (FMR
Far East), Fidelity Investments Japan Ltd. (FIJ), Fidelity International
Investment Advisors (FIIA), and Fidelity International Investment Advisors
(U.K.) Limited (FIIAL U.K.), with respect to the fund.
((sigma)) Fidelity Management & Research Company has entered into
sub-advisory agreements with the following affiliates: FMR U.K., FMR Far
East, FIJ (New Markets Income and Advisor Emerging Markets only), FIIA, and
FIIAL U.K., with respect to the fund.
((pound)) Fidelity Management & Research Company has entered into
sub-advisory agreements with FMR U.K. and FMR Far East, with respect to the
fund.
((yen)) Fidelity Management & Research Company has entered into a
sub-advisory agreement with FMR Texas Inc., with respect to the fund.
(oval) Fidelity Management & Research Company has entered into sub-advisory
agreements with FIIA and FIJ, with respect to the fund.
(psi) Effective August 3, 1994, Utilities Income Fund and Select
Utilities Portfolio have been renamed to Utilities Fund and Utilities
Growth Portfolio, respectively.
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.
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- --------------------
FIDELITY CONTRAFUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring, and Gerald C. McDonough, or any one or more
of them, attorneys, with full power of substitution, to vote all shares of
Fidelity Contrafund 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 January 14, 1998 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 _____________, 1997
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
cusip # 316071109/fund# 022
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- --------------------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the 12 nominees specified below as [ ] FOR all nominees [ ] 1.
Trustees: Ralph F. Cox, Phyllis Burke Davis, Robert listed (except as WITHHOLD
M. Gates, Edward C. Johnson 3d, E. Bradley Jones, marked to the contrary authority to
Donald J. Kirk, Peter S. Lynch, William O. McCoy, below). vote for all
Gerald C. McDonough, Marvin L. Mann, Robert C. nominees.
Pozen, Thomas R. Williams. (INSTRUCTION: TO
WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE(S), WRITE THE NAME(S) OF THE NOMINEE(S)
ON THE LINE BELOW.)
</TABLE>
__________________________________________________________________________
___________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of Coopers & Lybrand L.L.P. as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust.
3. To amend the Declaration of Trust to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the trust.
4. To amend the Declaration of Trust regarding FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
shareholder notification of appointment of Trustees.
5. To amend the Declaration of Trust to provide the fund FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
with the ability to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
6. To adopt a new fundamental policy for the fund FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
permitting the fund to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
7. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
fund.
8. To approve a new sub-advisory agreement with FMR FOR [ ] AGAINST [ ] ABSTAIN [ ] 8.
U.K. for the fund.
9. To approve a new sub-advisory agreement with FMR FOR [ ] AGAINST [ ] ABSTAIN [ ] 9.
Far East for the fund.
10. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 10.
objective and replace certain fundamental investment
policies with non-fundamental policies.
11. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 11.
limitation concerning diversification to exclude
investments in other investment companies from the
limitation.
12. To ratify the fund's fundamental investment limitation FOR [ ] AGAINST [ ] ABSTAIN [ ] 12.
concerning the concentration of its investments in a
single industry.
13. To ratify the fund's fundamental investment limitation FOR [ ] AGAINST [ ] ABSTAIN [ ] 13.
concerning commodities.
</TABLE>
CON-PXC-1197 cusip # 316071109/fund# 022
