SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (NO 2-77909)
UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 25* [x]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 [x]
Daily Money Fund
(Exact Name of Registrant as Specified in Declaration of Trust)
82 Devonshire St., Boston, MA 02109
(Address Of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, Including Area Code (617) 570-7000
Arthur S. Loring, Secretary
82 Devonshire Street
Boston, MA 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
( ) Immediately upon filing pursuant to paragraph (b)
( ) On ( ) pursuant to paragraph (b)
( ) 60 days after filing pursuant to paragraph (a)
(x ) On ( June 30, 1994 ) pursuant to paragraph (a)
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and has filed the notice required by such
rule on March 30, 1993.
* The Post-Effective Amendment for Daily Money Fund electronically
transmitted to the SEC on March 2, 1994, was filed in error as
Post-Effective Amendment No. 23. The correct Post-Effective Amendment
number should have been No. 24. This Post-Effective Amendment is being
filed as No. 25.
DAILY MONEY FUND:
MONEY MARKET PORTFOLIO and U.S. TREASURY PORTFOLIO
CROSS REFERENCE SHEET
PART B STATEMENT OF ADDITIONAL INFORMATION
10,11 Cover Page
12 FMR; Description of the Fund
13a,b,c Investment Policies and Limitations
d *
14a,b Trustees and Officers
c *
15a *
b Description of the Fund
c *
16a,(i,ii) FMR; Trustees and Officers
a(iii),b,c,d Management Contracts; Contracts with Companies Affiliated
with FMR
e Portfolio Transactions
f Distribution and Service Plan
g *
h Description of the Fund
i Contracts with Companies Affiliated with FMR
17a Portfolio Transactions
b *
c,d Portfolio Transactions
e *
18a Description of the Fund
b *
19a Distribution and Service Plan
b Valuation of Portfolio Securities
20 Distributions and Taxes
21a(i,ii) Contracts with Companies Affiliated with FMR
22 Performance
23 Financial Statements for the Portfolios' fiscal year ended July 31, 1993
are included in the Prospectus.
*Not Applicable
DAILY MONEY FUND:
MONEY MARKET PORTFOLIO and U.S. TREASURY PORTFOLIO
CROSS REFERENCE SHEET
PART A PROSPECTUS CAPTION
1 Cover Page
2 Summary of Portfolio Expenses
3a,b The Portfolios' Financial History
c Performance
4a(i) Daily Money Fund and the Fidelity Organization
a(ii),b,c Investment Objectives and Policies; Appendix
5a Daily Money Fund and the Fidelity Organization
b,c,d,e Management, Distribution and Services
f Portfolio Transactions
6a(i) Daily Money Fund and the Fidelity Organization
a(ii) How to Invest, Exchange and Redeem
a(iii) Daily Money Fund and the Fidelity Organization
b.c.d *
f,g How to Invest, Exchange and Redeem; Distribution and Taxes
7a Management, Distribution and Services
b(i,ii) How to Invest, Exchange and Redeem
b(iii,iv) *
b(v) How to Invest, Exchange and Redeem
c *
d How to Invest, Exchange and Redeem
e,f(i,ii) Management, Distribution and Services
f(iii) *
8 How to Invest, Exchange and Redeem
9 *
*Not Applicable
DAILY MONEY FUND:
U.S. TREASURY PORTFOLIO-CLASS B
CROSS REFERENCE SHEET
PART B STATEMENT OF ADDITIONAL INFORMATION
10,11 Cover Page
12 FMR; Description of the Fund
13a,b,c Investment Policies and Limitations
d *
14a,b Trustees and Officers
c *
15a *
b Description of the Fund
c *
16a(i,ii) FMR;Trustees and Officers
a(iii),b,c,d Management Contracts; Contracts with Companies Affiliated
with FMR
e Portfolio Transactions
f Distribution and Service Plan
g *
h Description of the Fund
i Contracts with Companies Affiliated with FMR
17a Portfolio Transactions
b *
c,d Portfolio Transactions
e *
18a Description of the Fund
b *
19a Valuation of Portfolio Securities
20 Distributions and Taxes
21a(i,ii) Contracts with companies Affiliated with FMR
a(iii),b,c *
22 Performance
23 Financial Statements for the Portfolios' fiscal year ended July 31, 1993
are incorporated herein by reference.
*Not Applicable
DAILY MONEY FUND:
U.S. TREASURY PORTFOLIO-CLASS B
CROSS REFERENCE SHEET
PART A PROSPECTUS CAPTION
1 Cover Page
2 Summary of Portfolio Expenses
3a,b The Portfolios' Financial History
c Performance
4a(i) Daily Money Fund and the Fidelity Organization
a(ii),b,c Investment Objectives and Policies; Appendix
5a Daily Money Fund and the Fidelity Organization
b,c,d,e Management Contract, Distribution and Shareholder Servicing
Plans
f Portfolio Transactions
6a(i) Daily Money Fund and the Fidelity Organization
a(ii) How to Invest, Exchange and Redeem
a(iii) Daily Money Fund and the Fidelity Organization
b,c,d *
e Cover Page; How to Invest, Exchange and Redeem
f,g How to Invest, Exchange and Redeem; Distributions and Taxes
7a Management Contract, Distribution and Shareholder Servicing Plans
b)i,ii) How to Invest, Exchange and Redeem
b(iii,iv) *
b(v) How to Invest, Exchange and Redeem
c *
d How to Invest, Exchange and Redeem
e,f(i,ii) Management Contract, Distribution and Servicing Plans
f(iii) *
8 How to Invest, Exchange and Redeem
9 *
*Not Applicable
FIDELITY U.S. TREASURY PORTFOLIO 82 DEVONSHIRE STREET
CLASS B BOSTON, MASSACHUSETTS 02109
PROSPECTUS
U.S. Treasury Portfolio (the Portfolio), a portfolio of Daily Money Fund
(the Fund), seeks as high a level of current income as is consistent with
the preservation of capital and liquidity by investing in money market
instruments.
The Portfolio offers shares by exchange to investors in Class B shares of
Fidelity Advisor Funds ("Class B Shares"). This Prospectus offers Class B
Shares. The Portfolio offers shares to individual, institutional and
corporate investors ( "Initial Shares"). Initial Class shares are
offered through a separate prospectus.
AN INVESTMENT IN THE PORTFOLIO IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT AND THERE CAN BE NO ASSURANCE THAT THE PORTFOLIO WILL
MAINTAIN A STABLE $1.00 SHARE PRICE.
Please read t his Prospectus before investing. It is designed
to provide you with information and help you decide if the
Portfolio's goals match your own. R etain this document for future
reference. A Statement of Additional Information (dated June 30, 1994) has
been filed with the Securities and Exchange Commission (SEC) and is
incorporated herein by reference. This free Statement of Additional
Information is available upon request from Fidelity Distributors
Corporation (Distributors), 82 Devonshire Street, Boston, MA 02109, or
from your investment professional.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT
RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
For further information or assistance in opening an account, please call:
TOLL FREE 800-843-3001
TABLE OF CONTENTS
Summary of Portfolio Expenses
Financial Highlights
Investment Objective
Investment Policies
Performance
Distributions and Taxes
How to Invest, Exchange and Redeem
Daily Money Fund and the Fidelity Organization
Management, Distribution and Services
Appendix
LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
June 30, 1994
DMFB-PRO-594
SUMMARY OF PORTFOLIO EXPENSES
The purpose of the table below is to assist you in understanding the
various costs and expenses that an investor in Class B shares would bear
directly or indirectly. The standard format was developed for use by all
mutual funds to help investors make their investment decisions. The expense
information should be considered along with other important information
such as the Portfolio's investment objective and past performance.
SHAREHOLDER TRANSACTION EXPENSES
Maximum Contingent Deferred Sales Charge
(as a percentage of redemption proceeds) 4.00%*
Sales Charge on Reinvested Dividends None
Exchange Fees None
* Declines from 4.00% to 0.00% for Class B shares held up to a
maximum of 5 years..
Shareholder transaction expenses represent charges paid when you sell or
exchange Class B shares of the Portfolio. See "How to Buy Shares" and "How
to Sell Shares" on page__.
ANNUAL OPERATING EXPENSES:
Management Fee .17%
Distribution Fee (including .25%
Shareholder Service Fee) 1.00 %
Other Expenses ** .18% *
Total Operating Expenses 1.35 %
* After waivers.
** Projections are based on estimated expenses for first
year..
EXAMPLE: An investor would pay the following expenses on a $1,000
investment in Class B Shares, assuming a 5% annual return and
either (1) redemption at the end of each time period (2) no
redemption at the end of each time period:
1 YEAR* 3 YEARS* 5 YEARS* 10 YEARS+
$14 $44 $76 $167
* Reflects deductions of applicable contingent deferred sales charge.
+ Reflects conversion to Initial Shares after six years.
A. ANNUAL OPERATING EXPENSES are based on historical expenses for the most
recent fiscal year. Management fees are paid by the Portfolio to Fidelity
Management & Research Company (FMR) for managing its investments and
business affairs. The rate for management fees is based on the Portfolio's
historical expenses and represents the net rate retained by FMR after
payments made under the distribution and service plan for Initial
Class Shares pursuant to Rule 12 b- 1 under the Investment Company
Act of 1940 (Initial 12b-1 Plan). The rate for distribution fees
reflects average payments made by FMR pursuant to the Initial 12b-1
Plan, plus a distribution fee payable by Class B Shares. Long-term
shareholders may pay more than the economic equivalent of the maximum
front-end sales charges permitted by the National Association of Securities
Dealers, Inc. (NASD) due to distribution and shareholder service fees.
Shareholder service fees are paid to investment professionals for services
and expenses in connection with providing individual assistance to Class
B shareholders . The Portfolio incur s other expenses for
maintaining shareholder records, furnishing shareholder statements and
reports, and for other services. FMR has voluntarily agreed to reimburse
the Portfolio to the extent that total operating expenses for Class B
Shares (exclusive of taxes, interest, brokerage commissions, and
extraordinary expenses) are in excess of an annual rate of 1.35% of the
average net assets of Class B Shares. If reimbursements were not in effect,
the management fee, other expenses and total operating expenses for
Class B Shares would have be en .17%, 2.42% and 2.84 % ,
respectively estimated . Management fees, distribution fees,
shareholder service fees and other expenses are reflected in the Class B
Share price or dividends and are not charged directly to individual
shareholder accounts. Please refer to the section entitled "Management
Contract, Distribution and Shareholder Servicing Plans" on page for
further information.
THE HYPOTHETICAL EXAMPLE illustrates the estimated expenses
associated with a $1,000 investment in Class B Shares over periods of 1, 3,
5 and 10 years, based on the estimated expenses (after
reimbursement, if any) in the table, an assumed annual rate of return
of 5% and deduction of the applicable contingent deferred sales charge
(CDSC) in years 1, 3, and 5. See How to Sell Shares, page __ for
information about the CDSC. A CDSC IS IMPOSED ONLY IF YOU REDEEM CLASS B
SHARES WITHIN 5 YEARS. THE RETURN OF 5% AND ESTIMATED EXPENSES SHOULD NOT
BE CONSIDERED INDICATIONS OF ACTUAL OR EXPECTED SHARE PERFORMANCE, BOTH OF
WHICH MAY VARY.
FINANCIAL H IGHLIGHTS
The following table gives information about the Portfolio's financial
history and uses the Fund's fiscal year (which ends July 31). The annual
information in the table has been audited by Coopers & Lybrand,
independent accountants. Their unqualified report is included in the
Portfolio's Annual Report. On September 29, 1993 U.S. Treasury Portfolio
was converted from a separate series of a Massachusetts business trust to a
separate series of a Delaware business trust and adopted the audited
financial statements of its predecessor portfolio as its own. On or about
May 2, 1994, Class B Shares will be offered by exchange to Class B
shareholders of the Fidelity Advisor Funds. The information below regarding
initial class shares does not reflect the Class B distribution fee and
shareholder servicing fee and therefore, may not be representative of the
actual operational results for Class B Shares.
U.S. TREASURY PORTFOLIO
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Six Months Years Ended July 31, August 31,
ended 1983
1/31/94 (Commenceme
nt of
Operations) to
(Unaudited) 1993 1992 1991 1990 1989 1988 1987 1986 1985 July 31, 1984
SELECTED PER-SHARE DATA
Net asset value,
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of
period
Income from
.013 .027 .042 .065 .079 .083 .063 .057 .069 .085 .085
Investment
Operations
Net interest
income
Dividends from
(.013) (.027) (.042) (.065) (.079) (.083) (.063) (.057) (.069) (.085) (.085)
net
interest income
Net asset value,
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
end
of period.
TOTAL RETURN (DAGGER)
1.31% 2.78 4.25 6.69 8.24 8.64 6.45 5.81 7.15 8.79 8.84
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of
$ 2,694,872 $ 2,949,17 $ 3,093,71 $ 1,701,70 $ 1,177,29 $ 994,133 $ 319,708 $ 240,298 $ 157,386 $ 128,751 $ 108,216
period (000 1 4 4 0
omitted)
Ratio of expenses to
.58%* .57 .59 .59 .59 .64 .64 .58 .60 .60 .66*
average net assets
Ratio of expenses to
.58%* .57 .59 .59 .59 .64 .64 .58 .60 .60 .84*
avera
before voluntary
expense limitation
Ratio of net interest
2.58%* 2.73 4.14 6.42 7.91 8.47 6.26 5.67 6.89 8.41 9.60*
income to average
net assets
</TABLE>
* ANNUALIZED
(DAGGER) TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
INVESTMENT OBJECTIVE
The Portfolio's investment objective is to seek as high a level of current
income as is consistent with the preservation of capital and liquidity by
investing in money market instruments. The Portfolio's investment objective
is fundamental and may be changed only by vote of a majority of its
outstanding shares. The Portfolio may not always achieve its objective, but
it will follow the investment style in the following paragraphs.
INVESTMENT POLICIES
Unless otherwise noted, the Portfolio's investment policies and limitations
are not fundamental and may be changed without shareholder approval. The
permitted investments of U.S. Treasury Portfolio are as follows:
The Portfolio invests in instruments which are direct obligations of the
U.S. government, and repurchase agreements involving such securities.
Direct U.S. government obligations consist of securities issued or
guaranteed as to principal and interest by the U.S. government and backed
by the full faith and credit of the United States.
These include U.S. Treasury bills, notes and bonds, and instruments issued
by the Export-Import Bank of the U.S., the General Services Administration,
the Government National Mortgage Association, the Small Business
Administration, and the Washington Metropolitan Area Transit Authority. The
Portfolio will not invest in securities of U.S. government agencies or
instrumentalities that are not backed by the full faith and credit of the
United States. The Portfolio intends to invest 100% of its total assets in
U.S. Treasury bills, notes, and bonds and other direct obligations of the
U.S. Treasury. The Portfolio also may engage in repurchase agreements
backed by these obligations. This policy may be changed only upon 90 days'
notice to shareholders.
MATURITY. The Portfolio must limit its investments to securities with
remaining maturities of 397 days or less and must maintain a
dollar-weighted average maturity of 90 days or less.
The Portfolio's ability to achieve its investment objective depends
on the quality and maturity of its investments. Although the Portfolio's
policies are designed to help maintain a stable $1.00 share price, all
money market instruments can change in value when interest rates or
issuers' creditworthiness change, or if an issuer or guarantor of a
security fails to pay interest or principal when due. If these changes in
value were large enough, the Portfolio's share price could fall below
$1.00. In general, securities with longer maturities are more vulnerable to
price changes, although they may provide higher yields.
INVESTMENT LIMITATIONS
The following summarizes the Portfolio's principal investment limitations.
A complete listing is contained in the Statement of Additional Information.
1. The Portfolio will not purchase a security if, as a result: (a) with
respect to 75% of its total assets, more than 5% of its total assets would
be invested in securities of any single issuer; or (b) more than 25% of its
total assets would be invested in issuers having their principal business
activities in a particular industry. These limitations do not apply to
obligations issued or guaranteed by the U.S. government or its agencies or
instrumentalities.
2. (a) The Portfolio may borrow money for temporary or emergency purposes
or by engaging in reverse repurchase agreements, but not in an amount
exceeding 33 1/3% of its total assets. (b) The Portfolio may borrow money
from banks or from other funds advised by FMR or an affiliate. (c) The
Portfolio will not purchase securities when borrowings (other than reverse
repurchase agreements) exceed 5% of its total assets.
As a non-fundamental policy, the Portfolio may not purchase a security, if
as a result, more than 10% of its net assets would be invested in illiquid
instruments.
Except for the Portfolio's investment objectives, limitation 1, and 33 1/3%
limitations on borrowings, the Portfolio's policies and limitations
described in this Prospectus are not fundamental and may be changed without
shareholder approval. These limitations and the policies discussed in
"Investment Objectives " and "Investment Policies" are
considered at time of purchase; the sale of securities is not required in
the event of a subsequent change in circumstances.
While there may be occasions when, in order to raise cash to meet
redemptions, the Portfolio might be required to sell securities at a loss,
the Portfolio's policy generally will be to hold securities to maturity
rather than to follow a policy of active trading.
PORTFOLIO TRANSACTIONS
Money market obligations generally are traded in the over-the-counter
market through broker-dealers. A broker- dealer is a securities firm or
bank which makes a market for securities by offering to buy at one price
and to sell at a slightly higher price. The difference between the prices
is known as a spread. Since FMR trades, directly or through affiliated
sub-advisers, a large number of securities, including those of Fidelity's
other funds, broker-dealers are willing to work with the Portfolio on a
more favorable spread than would be possible for most individual investors.
The Portfolio has authorized FMR to allocate transactions to some
broker-dealers who help distribute the Portfolio's shares or the shares of
Fidelity's other funds, to the extent permitted by law, and on an agency
basis to Fidelity Brokerage Services, Inc. (FBSI) and Fidelity Brokerage
Services, Ltd. (FBSL), affiliates of FMR. FMR will make such allocations if
commissions are comparable to those charged by non-affiliated qualified
broker-dealers for similar services.
Higher commissions may be paid to firms that provide research services to
the extent permitted by law. FMR also is authorized to allocate brokerage
transactions to FBSI in order to secure from FBSI research services
produced by third party, independent entities. FMR may use this research
information in managing the Portfolio's assets, as well as assets of
other clients.
PERFORMANCE
The Portfolio may quote its yield, effective yield and total return in
advertisements or in reports or other communications. All performance
information is historical and is not intended to indicate future
performance.
The Portfolio's YIELD refers to the income generated by an investment in
the Portfolio over a seven-day period expressed as an annual percentage
rate. The Portfolio also may calculate an effective yield by compounding
the base period return over a one-year period. The EFFECTIVE YIELD will be
slightly higher than the yield because of the compounding effect on this
assumed reinvestment. In addition, yields quoted in advertising may be
based on historical seven-day periods.
The Portfolio's TOTAL RETURN is based on the overall dollar or percentage
change in value of a hypothetical investment in the Portfolio assuming
dividend distributions are reinvested. A CUMULATIVE TOTAL RETURN reflects
the Portfolio's performance over a stated period of time. An AVERAGE ANNUAL
TOTAL RETURN reflects the hypothetical annually compounded rate that would
have produced the same cumulative total return if performance had been
constant over the entire period. Because average annual returns tend to
smooth out variations in the Portfolio's performance, investors should
recognize that they are not the same as actual year-by-year results.
DISTRIBUTIONS AND TAXES
The Portfolio ordinarily declares dividends from net investment income
daily and pays such dividends monthly. The Portfolio intends to distribute
substantially all of its net investment income and capital gains, if any,
to shareholders within each calendar year as well as on a fiscal year
basis.
FEDERAL TAXES. Dividends derived from net investment income and short-term
capital gains are taxable as ordinary income. The Portfolio's distributions
are taxable when they are paid, whether you take them in cash or reinvest
them in additional shares, except that distributions declared in December
and paid in January are taxable as if paid on December 31. The Portfolio
will send you an IRS Form 1099-DIV by January 31 showing your taxable
distributions for the past calendar year.
OTHER TAX INFORMATION. The information above is only a summary of some of
the federal tax consequences generally affecting the Portfolio and its
shareholders, and no attempt has been made to discuss individual tax
consequences. In addition to federal tax, investors may be subject to state
or local taxes on their investment.
STATE AND LOCAL TAXES: Investors should consult their tax advisors to
determine whether the Portfolio is suitable to their particular tax
situation. Mutual fund dividends from most U.S. government securities
generally are free from state and local income taxes. Pennsylvania does not
provide this benefit, and some states may limit the benefit. However,
legislation providing for a pass-through has been approved by the
Pennsylvania legislature which, if signed by the Governor, would be
retroactive to January 1, 1993. In addition, certain types of
securities, such as repurchase agreements and certain agency backed
securities, may not qualify for the government interest exemption on a
state-by-state basis. Some states may impose intangible property taxes.
When you sign your account application, you will be asked to certify that
your social security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require the
Portfolio to withhold 31% of your taxable distributions and redemptions.
HOW TO INVEST, EXCHANGE AND REDEEM
HOW TO INVEST. Class B Shares of the Portfolio are currently available only
to holders of Class B shares of Fidelity Advisor Fund s . An
investment in Class B shares of the Portfolio may only be made by
exchange of Class B Shares of Fidelity Advisor Funds or through
reinvestment of distributions on Class B Shares. Direct purchases of
C lass B s hares will not be accepted.
Class B Shares of the Portfolio are offered continuously to investors
who engage an investment professional for investment advice and may be
purchased at the net asset value per share (NAV) next determined
after the transfer agent receives your order. Fidelity Investments
Institutional Operations company (FIIOC) (the Transfer Agent), ZR5, P.O.
Box 1182, Boston, MA 02103-1182, provides transfer and dividend paying
services for each Fund. The Transfer Agent has delegated certain transfer,
dividend paying and shareholder services to State Street Bank and Trust
company (State Street) P.O. Box 8302, Boston, Massachusetts 02766-8302.
The Class B shares are offered at NAV without an initial a sales charge.
Class B Shares may be subject to a CDSC upon redemption. For more
information on how the CDSC is calculated, see"How to Sell Shares," page
___. It is the responsibility of your investment professional to transmit
your order to the Transfer Agent before 4:00 p.m. Eastern time in order for
you to receive that day's share price.
SHARE PRICE. Fidelity Service Co. (Service) calculates the NAV of Class B
Shares at 2:00 p.m. and 4:00 p.m. Eastern time each day that the Portfolio
is open for business (see "Holiday Schedule" on page ). The NAV of Class B
Shares is determined by adding the value of all securities and other assets
of the Portfolio, deducting its actual and accrued liabilities of Class B
Shares, and dividing by the number of Class B Shares outstanding. The
Portfolio values its portfolio securities on the basis of amortized cost.
Class B Shares purchased begin to earn income dividends on the following
business day.
MINIMUM INVESTMENT AND ACCOUNT BALANCE. The minimum initial investment by
exchange to establish a new account in Class B Shares is $1,000. Subsequent
investments must be at least $250. If you want to keep your account open,
please leave $500 in it. If an account balance falls below $500 due to
redemption, the Portfolio may close it and mail the proceeds less any
applicable CDSC, to the address of record. Investors will be given 30 days'
notice that their account will be closed unless they make an additional
investment to increase their account balance to the $500 minimum.
1.HOW TO EXCHANGE. An exchange is the redemption of Class B s hares
of one fund and the purchase of Class B s hares of another fund, each
at the next determined NAV. A CDSC will not apply to Class B shares
redeemed by exchange. The applicable CDSC for exchanged Class B shares will
be based on the date of purchase and cost of the Class B shares initially
purchased. The exchange privilege is a convenient way to buy and sell
Class B Shares or Class B shares of certain Fidelity Advisor Funds
registered in your state.
To protect fund performance and shareholders, F MR discourages
frequent trading in response to short-term market fluctuations.
The Portfolio reserves the right to refuse exchange purchases by any person
or group if, in FMR's opinion , the Portfolio would be unable to
invest effectively in accordance with its investment objective and policies
or would otherwise potentially be adversely affected. Your exchanges
may be restricted or refused if the Portfolio receives or anticipates
simultaneous orders effecting significant portions of a fund's assets. In
particular, exchanges that coincide with "market timing" strategies can
have adverse effects on the Portfolio. The exchange privilege may be
modified or terminated in the future. The exchange limit may be modified
for certain institutional retirement plans.
Exchange instructions may be given by you in writing or by telephone
directly to the Transfer Agent or through your investment professional.
For more information on entering an exchange transaction, please consult
your investment professional.
Before you make an exchange:
1. Read the prospectus of the Fund into which you want to exchange.
2. Class B shares may be exchanged only into Class B shares of another
Fidelity Advisor Fund, seven calendar days after purchase at NAV.
3. You may exchange only between accounts that are registered in the
same name, address, and taxpayer identification number.
4. Currently, there is no limit on the number of exchanges out of the
Portfolio.
5. TAXES: The exchange of shares is considered a sale and may be
taxable. The Transfer Agent will send you or your investment professional a
confirmation of each exchange transaction.
You may initiate transactions by telephone. Note that Fidelity will
not be responsible for any losses resulting from unauthorized transactions
if it follows reasonable procedures designed to verify the identity of the
caller. Fidelity will request personalized security codes or other
information, and may also record calls. You should verify the accuracy of
your confirmation statements immediately after you receive them. If you do
not want the ability to redeem and exchange by telephone, call Fidelity for
instructions.
Class B Shares will be redeemed at the next determined NAV following
receipt and acceptance of the exchange order. Class B Shares to be acquired
will be purchased at the next determined NAV after redemption proceeds are
made available. Investors will earn dividends on the Class B shares of the
acquired fund in accordance with that fund's customary policy. Investors
should note that under certain circumstances, a fund may take up to seven
days to make redemption proceeds available for the exchange purchase of
shares of another fund.
FIDELITY ADVISOR SYSTEMATIC EXCHANGE PROGRAM. You can exchange a specific
dollar amount of Class B Shares into Class B shares of Fidelity Advisor
Fund on a monthly, quarterly or semiannual basis under the following
conditions:
1. The account from which the exchanges are to be processed must have a
minimum balance of $10,000.
2. The account into which the exchanges are to be processed must be an
existing account with a minimum balance $1,000.
3. Both accounts must have identical registrations and taxpayer
identification numbers. The minimum amount that can be exchanged
systematically into Class B shares is $100.
4. Systematic Exchanges will be processed at the NAV determined on the
transaction date.
HOW TO SELL SHARES
You may sell (redeem) all or a portion of your Class B shares on any day
the New York Stock Exchange (NYSE) and the Federal Reserve Bank of New York
(New York Fed) are open at the NAV next determined after the Transfer Agent
receives your request to sell, minus any applicable CDSC (see below).
Orders to sell may be placed by you in writing or by telephone or through
your investment professional. For orders to sell placed through your
investment professional, it is the investment professional's responsibility
to transmit such orders to the Transfer Agent by 4:00 p.m. Eastern time for
you to receive that day's share price.
Once your Class B shares are redeemed, a Fund normally will send the
proceeds on the next business day to the address of record. If making
immediate payment could adversely affect the Fund, the Fund may take up to
seven days to pay you.
When the NYSE or New York Fed is closed (or when trading is restricted)
for any reason other than their customary weekend or holiday closings, or
under any emergency circumstances as determined by the SEC to merit such
action, a Fund may suspend redemption or postpone payment dates for more
than seven days. The Transfer Agent requires additional documentation to
sell Class B shares registered in the name of a corporation, agent or
fiduciary or a surviving joint owner. Call 1-800-221-5207 for specific
requirements.
REDEMPTION REQUESTS BY TELEPHONE:
TO RECEIVE A CHECK. You may sell Class B shares of a Fund having a value
of $100,000 or less from your account by calling the Transfer Agent.
Redemption proceeds must be sent to the address of record listed on the
account, and a change of address must not have occurred within the
preceding 60 days.
TO RECEIVE A WIRE. You may sell Class B shares of a Fund and have the
proceeds wired to a pre-designated bank account. Wires will generally be
sent the next business day following the redemption of Class B shares from
your account.
Telephone redemptions cannot be processed for Fidelity Advisor Fund
prototype retirement accounts where State Street Bank and Trust Company is
the custodian.
REDEMPTION REQUESTS IN WRITING. For your protection, if you sell Class B
shares of a Fund having a value of more than $100,000, or if you are
sending the proceeds of a redemption of any amount to an address other than
the address of record listed on the account, or if you have requested a
change of address within the preceding 60 days, or if you wish to have the
proceeds wired to a non-predesignated bank account, you must send a letter
of instruction signed by all registered owners with signature(s) guaranteed
to the Transfer Agent. A signature guarantee is a widely recognized way to
protect you by guaranteeing the signature on your request; it may not be
provided by a notary public. Signature guarantee(s) will be accepted from
banks, brokers, dealers, municipal securities dealers, municipal securities
brokers, government securities dealers, government securities brokers,
credit unions (if authorized under state law), national securities
exchanges, registered securities associations, clearing agencies and
savings associations.
REINSTATEMENT PRIVILEGE. If you have sold all or part of your shares of
a Fund you may reinvest an amount equal to all or a portion of the
redemption proceeds in Class B shares of the Fund or Class B shares of any
of the other Fidelity Advisor Funds, at the NAV next determined after
receipt of your investment order, provided that such reinvestment is made
within 30 days of redemption. Under these circumstances, the dollar amount
of the CDSC you paid will be reimbursed to you by reinvesting that amount
in Class B shares. You must reinstate your shares into an account with the
same registration. This privilege may be exercised only once by a
shareholder with respect to a Fund and certain restrictions may apply. For
purposes of the CDSC schedule, the holding period of the Class B shares
will continue as if the Class B shares had not been redeemed.
CONTINGENT DEFERRED SALES CHARGE. Class B shares may, upon redemption, be
assessed a CDSC based on the following schedule:
From Date of Purchase Contingent Deferred Sales Charge
Less than 1 year 4%
1 year to less than 3 years 3%
3 years to less than 4 years 2%
4 years to less than 5 years 1%
5 years to less than 6 years * 0%
* After a maximum holding period of 6 years, Class B Shares will convert
automatically to Initial Shares of the Portfolio. See "Conversion Feature"
below for more information.
The CDSC will be calculated based on the lesser of the cost of Class
B Shares at the initial date of purchase or on the value of Class B
Shares at redemption, not including any reinvested dividends or capital
gains. In determining the applicability and rate of any CDSC at redemption,
Class B shares representing reinvested dividends and capital gains,
if any, will be redeemed first, followed by Class B Shares
that have been held the longest period of time . The applicable
CDSC calculated is based on the holding period of Class B Shares of the
Fidelity Advisor Funds that were exchanged for Class B Shares (not
including reinvested dividends or capital gains). The holding period begins
with the date of their initial purchase; and the value that pertains to the
Class B Shares is the lessor of their initial price or exchange date price.
CONVERSION FEATURE. After a maximum holding period of 6 years from
the initial date of purchase, Class B Shares convert
automatically to Initial Shares of the Portfolio. Conversion to Initial
Shares will be at NAV. At the time of conversion, a portion of the Class B
S hares purchased through the reinvestment of dividends or capital
gains (Dividend Shares) will also convert to Initial Shares. The portion of
Dividend Shares that will convert is determined by the ratio that Class B
non-Dividend Shares converting bear to your total Class B non-Dividend
Shares. (A portion of Class B Shares that had been acquired by exchange
also may convert, representing the appreciated value and/or reinvested
dividends or capital gains applicable to Class B shares of Fidelity
Advisor Fund s prior to their exchange into the Portfolio.)
CONTINGENT DEFERRED SALES CHARGE WAIVERS. The CDSC may be waived (i) in
cases of disability or death, provided that the redemption is made within
one year following the death or initial determination of disability, or
(ii) in connection with a total or partial redemption made in connection
with certain distributions from retirement plans or accounts.
FOR MORE INFORMATION ABOUT THE CDSC, INCLUDING THE CONVERSION FEATURE AND
THE PERMITTED CIRCUMSTANCES FOR CDSC WAIVER, CONTACT YOUR INVESTMENT
PROFESSIONAL.
DISTRIBUTION OPTIONS
When you fill out your Class B account application, you can choose
from three Distribution Options:
1. Reinvestment Option. Dividend distributions will be automatically
reinvested in additional Class B Shares of the Portfolio. If you do not
indicate a choice on your account application, you will be assigned this
option.
2. Income-Earned Option. A check will be sent for each dividend
distribution.
3. Directed Dividends Program. Dividend distributions will be automatically
invested in Class B shares of an identically registered Fidelity Advisor
Fund.
You may change your Distribution Option at any time by notifying the
Transfer Agent in writing. Distribution checks will be mailed no fewer than
seven days after the first day of the month. Reinvestment of distributions
will be made at that day's NAV. Class B Shares acquired through
distributions will not be subject to a CDSC.
S HAREHOLDER COMMUNICATIONS
The Transfer Agent or your investment professional will send you a
confirmation after every transaction that affects your Class
B Share balance or account registration. In addition, a consolidated
statement will be provided at least quarterly. At least twice a year
each shareholder will receive the Portfolio's financial statements.
To reduce expenses, only one copy of most shareholder reports (such
as the Annual Report) will be mailed to each shareholder address.
Please write to the Transfer Agent or contact your investment professional
if you need to have additional reports sent each time.
A Fund pays for these shareholder communications, but not for special
services that are required by a few shareholders, such as a request for a
historical transcript of an account. You may be required to pay a fee for
such special services. If you are purchasing Class B shares of a Fund
through a program of administrative services offered by an investment
professional, you should read the additional materials pertaining to that
program in conjunction with this prospectus. Certain features of a Fund,
such as the minimum initial or subsequent investment, may be modified in
these programs, and administrative charges may be imposed for the services
rendered.
2.HOLIDAY SCHEDULE. The Portfolio is open for business and NAV for Class B
Shares is calculated every day that both the Federal Reserve Bank of New
York (New York Fed) and the New York Stock Exchange (NYSE) are open for
trading . The following holiday closings have been scheduled for 1994:
Dr. Martin Luther King, Jr. Day (observed), Presidents' Day, Good Friday,
Memorial Day, Independence Day (observed), Labor Day, Columbus Day,
Veterans' Day, Thanksgiving Day and Christmas Day (observed). Although FMR
expects the same holiday schedule, with the addition of New Years Day, to
be observed in the future, the New York Fed or the NYSE may modify its
schedule at any time. The right is reserved to advance the time by which
purchase and redemption requests must be received on any day that: (1) the
New York Fed or the NYSE close early; (2) if in FMR's judgement, early
closing is determined to be in the best interest of the Portfolios
shareholders; or (3) as permitted by the SEC. To the extent that portfolio
securities are traded in other markets on days the New York Fed or the NYSE
is closed, the Class B shares NAV may be affected when investors may not
purchase or redeem shares. Certain other Fidelity funds may follow
different holiday closing schedules.
MANAGEMENT, DISTRIBUTION AND
SERVICES
MANAGEMENT CONTRACTS. For managing its investments and business affairs,
the Portfolio pays FMR a monthly management fee at the annual rate of .50%
of its average net assets for the month. For the fiscal year ended July 31,
1993, management fees for U.S. Treasury Portfolio amounted to $14,208,606.
FMR has voluntarily agreed to reimburse Class B Shares to the extent that
its aggregate operating expenses (excluding interest, taxes, brokerage
commissions and extraordinary expenses), are in excess of an annual rate of
1.35% of average net assets. 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.
FMR, on behalf of the Portfolio, has entered into a sub-advisory agreement
with FMR Texas under which FMR Texas has primary responsibility for
providing portfolio investment management services, while FMR retains
responsibility for providing other management services. Under each
sub-advisory agreement, FMR pays FMR Texas a fee equal to 50% of the
management fee retained by FMR under its current management contract with
the Portfolio, after payments by FMR pursuant to the Portfolio's Initial
12b-1 plan and the distribution plan for Class B Shares. The fees paid to
FMR Texas are not reduced by any voluntary or mandatory expense
reimbursements that may be in effect from time to time.
DISTRIBUTION AND SHAREHOLDER SERVICING PLANS. The Trustees of the Fund have
adopted a distribution and service plan (the Plan) on behalf
of the Class B Shares of the Portfolio pursuant to Rule 12b-1 of the
Investment Company Act of 1940 (the Rule). The Rule provides in substance
that a mutual fund may not engage directly or indirectly in financing any
activity that is intended primarily to result in the sale of shares of
a fund except pursuant to a plan adopted by the fund under the Rule.
The Board of Trustees has adopted the Plan to allow Class B Shares
and FMR to incur certain expenses that might be considered to constitute
direct or indirect payment by Class B Shares of distribution expenses .
Under the Distribution Plan, Class B Shares are authorized to pay
Distributors a monthly distribution fee as compensation for its services
and expenses in connection with the distribution of Class B shares. Class B
shares pay Distributors a distribution fee at an annual rate of up to
.75% of the average net asset of Class B Shares determined as of the
close of business on each day throughout the month . The Distribution
Plan further provides that FMR may make payments out of its management fee
at an annualized rate of up to .38% of the Class B shares' average
net assets, directly to Distributors for distribution-related expenses. The
total distribution fee charged to the Class B Shares will be reduced by the
amount paid to Distributors by FMR. The amount payable to Distributors by
FMR is determined by the percentage amount paid by FMR to Distributors in
connection with the Initial Class Distribution Plan.
Class B also has a Shareholder Servicing Plan, adopted under Rule 12b-1,
which will reduce the net investment income and total return of a fund's
Class B Share. Under Shareholder Servicing Plans in effect for the Class B
shares of each Fund, investment professionals are compensated at an annual
rate of .25% of average daily net assets of that Fund's Class B shares for
providing ongoing shareholder support services to investors in Class B
shares. The Shareholder Servicing Plans have been approved by each Trust's
Board of Trustees.
Class B shares bear the fees paid pursuant to their Distribution and
Service Plan and Shareholder Servicing Plan. Such fees are not borne by
individual accounts, and will be limited by the restrictions imposed by the
NASD rule regarding asset based sales charges.
Distributors may, at its expense, provide promotional incentives such as
sales contests and trips to investment professionals who support the
sale of Class B shares . In some instances, these incentives
will be offered only to certain types of investment
professionals, such as bank affiliated or non-bank affiliated
broker-dealers, or to investment professionals whose
representatives provide services in connection with the sale or expected
sale of significant amounts of Class B shares .
The Glass-Steagall Act generally prohibits federally and state chartered or
supervised banks from engaging in the business of underwriting, selling or
distributing securities. Although the scope of this prohibition under the
Glass-Steagall Act has not been fully defined, in Distributors' opinion, it
should not prohibit banks from being paid for shareholder servicing and
record keeping. If, because of changes in law or regulation, or because of
new interpretations of existing law, a bank or the Portfolio were prevented
from continuing these arrangements, it is expected that other arrangements
would be made for these services and that shareholders would not suffer
adverse financial consequences. In addition, state securities laws on this
issue may differ from the interpretations of federal law expressed herein,
and banks and financial institutions may be required to register as dealers
pursuant to state law.
FIIOC, 82 Devonshire Street, Boston, MA, an affiliate of FMR, acts as the
transfer and dividend-paying agent for Class B Shares and maintains
Class B shareholder records. FIIOC is paid fees based on the type,
size and number of accounts in Class B Shares of the Portfolio, and the
number of transactions made by shareholders of Class B Shares.
Service, 82 Devonshire Street, Boston, MA, an affiliate of FMR, performs
the calculations necessary to determine the NAV of Class B Shares and
maintains the general accounting records for Class B Shares.
DAILY MONEY FUND AND THE FIDELITY
ORGANIZATION
THE FUND. U.S. Treasury Portfolio is a diversified portfolio of Daily Money
Fund, an open-end management investment company originally organized as a
Massachusetts business trust by Declaration of Trust dated June 7, 1982,
amended and restated as of September 1, 1989, and reorganized as a Delaware
business trust on September 29, 1993. The Fund's Board of Trustees
supervises Fund activities and reviews contractual arrangements with
companies that provide the Portfolio with services. The Fund is not
required to hold annual shareholder meetings, although special meetings may
be called for a class of shares , the Portfolio or the Fund as a
whole for purposes such as electing or removing Trustees, changing
fundamental policies, approving a new or amended management contract or
a plan of distribution. Shareholders receive one vote for each
share of the Portfolio and fractional votes for each fractional share of
the Portfolio. Separate votes are taken by each class of shares, or the
Portfolio if a matter affects just that class or the Portfolio,
respectively.
INITIAL CLASS SHARES
U.S. Treasury Portfolio also offers Initial Class Shares to individual,
institutional and corporate investors at NAV.
Initial Shares may be exchanged for shares of certain other Fidelity Funds.
Transfer agent and shareholder services for Initial Shares are performed by
FIIOC. For the fiscal year ended July 31, 1993, total operating expenses
for the Initial Shares were .57% of average net assets.
Under the Initial 12b-1 Plan, certain investment professionals are
compensated up to a maximum annual rate of .38% of the average net assets
of the Initial Shares with respect to which they provide or have provided
shareholder support or distribution services. Investment professionals
may receive different levels of compensation with respect to one particular
class of shares in the U.S. Treasury Portfolio.
Initial Class Shares of the Portfolio will generally have a higher yield
and total return than Class B shares due to higher expenses in general.
Investment professionals may receive different levels of compensation with
respect to one class of shares over another class of shares in the
Portfolio.
Fidelity Investments is one of the largest investment management
organizations in the United States and has its principal business address
at 82 Devonshire Street, Boston, Massachusetts. It is composed of a number
of different subsidiaries and divisions which provide a variety of
financial products and services. The Fund employs various Fidelity
companies to perform certain activities required to operate the Portfolio.
FMR, the Portfolio's adviser, is the original Fidelity company, founded in
1946. FMR provides a number of mutual funds and other clients with
investment research and portfolio management services. FMR maintains a
large staff of experienced investment personnel and a full complement of
related support facilities. As of January 31, 1994, FMR advised funds
having more than 15 million shareholder accounts with a total value of more
than $225 billion. Fidelity Distributors Corporation (Distributors)
distributes shares for the Fidelity funds.
FMR Texas Inc. (FMR Texas), the Portfolio's sub adviser, is a wholly owned
subsidiary of FMR that provides advice and investment management services
with respect to money market instruments. FMR Texas, a Texas corporation,
has its principal offices at 400 East Las Colinas Boulevard, Irving, Texas.
FMR Corp. is the parent company for the Fidelity companies. Through
ownership of voting common stock, Edward C. Johnson 3d (President and a
Trustee of the Fund), Johnson family members, and various trusts for the
benefit of Johnson family members form a controlling group with respect to
FMR Corp.
APPENDIX
The following paragraphs provide a brief description of the securities in
which the Portfolio may invest and the transactions it may make. The
Portfolio is not limited by this discussion, however, and may purchase
other types of securities and enter into other types of transactions if
they are consistent with the Portfolio's investment objective and policies.
DELAYED DELIVERY TRANSACTIONS. The Portfolio may buy and sell securities on
a when-issued or delayed delivery or when issued basis, with payment and
delivery taking place at a future date. The market value of securities
purchased in this way may change before the delivery date, which could
affect the market value of the Portfolio's assets. Ordinarily, a Portfolio
will not earn interest on securities purchased until they are delivered.
ILLIQUID INVESTMENTS. Under the supervision of the Board of
Trustees, FMR determines the liquidity of the Portfolio's investments. The
absence of a trading market can make it difficult to ascertain a market
value for illiquid investments. It may be difficult or impossible for the
Portfolio to sell illiquid investments promptly at an acceptable price.
INTERFUND BORROWING PROGRAM. The Portfolio has received permission from the
SEC to lend money to and borrow money from other funds advised by FMR or
its affiliates. The Portfolio will participate in the interfund borrowing
program only as a borrower. Interfund loans normally will extend overnight,
but can have a maximum duration of seven days. Loans may be called on one
day's notice, and the Portfolio may have to borrow from a bank at a higher
interest rate if an interfund loan is called or not renewed. Any delay in
repayment to a lending fund could cause a lost investment opportunity or
additional borrowing costs.
MONEY MARKET refers to the marketplace where short-term, high grade debt
securities are traded. These securities include U.S. government
obligations, commercial paper, certificates of deposit and bankers'
acceptances, time deposits and short-term corporate obligations. These
securities normally carry specific rates of return. A portfolio may invest
in variable rate obligations which provide for adjustments in interest
rates on specific dates, and floating rate obligations which have an
interest rate that changes whenever there is a change in the designated
base rate.
MUNICIPAL OBLIGATIONS are issued to raise money for various public
purposes, including general purpose financing for state and local
governments as well as financing for specific projects or public
facilities. Municipal obligations may be backed by the full taxing power of
a municipality or by the revenues from a specific project or the credit of
a private organization.
REPURCHASE AGREEMENTS. Repurchase agreements are transactions by which a
Portfolio purchases a security and simultaneously commits to resell that
security to the seller at an agreed upon price at a higher price. In the
event of bankruptcy of the other party to a repurchase agreement, a
Portfolio could experience delays in recovering cash. To the extent that,
in the meantime, the value of the securities purchased may have decreased,
a Portfolio could experience a loss. In all cases, FMR must find the
creditworthiness of the other party to a transaction satisfactory.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
Portfolio sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash. At the same time, each Portfolio agrees
to repurchase the instrument at an agreed-upon price and time. Each
Portfolio expects that it will engage in reverse repurchase agreements for
temporary purposes such as to fund redemption requests. Reverse repurchase
agreements may increase the risk of fluctuation in the market value of a
Portfolio's assets or in its yield.
STRIPPED GOVERNMENT SECURITIES. Stripped securities are created by
separating the income and principal components of a debt instrument and
selling them separately. Each Portfolio may purchase U.S. Treasury STRIPS
(Separate Trading of Registered Interest and Principal of Securities), that
are created when the coupon payments and the principal payment are stripped
from an outstanding Treasury bond by a Federal Reserve Bank.
TIME DEPOSITS. Non-negotiable deposits in a banking institution earning a
specified interest rate over a given period of time.
U.S. GOVERNMENT OBLIGATIONS. Debt securities issued or guaranteed by the
U.S. Treasury or by an agency or instrumentality of the U.S. government.
Not all U.S. government obligations are backed by the full faith and credit
of the United States. For example, securities issued by the Federal Farm
Credit Bank or by the Federal National Mortgage Association are supported
by the agency's right to borrow money from the U.S. Treasury under certain
circumstances. Securities issued by the Financing Corporation are supported
only by the credit of the agency. There is no guarantee that the government
will support these types of securities, and therefore they involve more
risk than other government obligations.
VARIABLE OR FLOATING RATE OBLIGATIONS including certain participation
interests in municipal obligations, have interest rate adjustments formulas
that permit a Portfolio sell them a par value plus accrued interest on
short notice. When determining the maturity of a variable or floating rate
instrument, he Portfolio may look to the date the demand feature can be
exercised or to the date the interest rate is readjusted, rather than to
the final maturity of the instrument.
ZERO COUPON BONDS do not make interest payments; instead they are sold at a
deep discount from their face value and are redeemed at face value when
they mature. Because zero coupon bonds do not pay current income, their
prices can be very volatile when interest rates change. In calculating its
daily dividend, a Portfolio takes into account as income a portion of the
difference between a zero coupon bond's purchase price and its face value.
DAILY MONEY FUND: 82 DEVONSHIRE STREET
(Money Market Portfolio and U.S. Treasury Portfolio) BOSTON, MASSACHUSETTS
02109
PROSPECTUS
Daily Money Fund (the Fund) offers individual, institutional and corporate
investors a convenient and economical way to invest in professionally
managed portfolios. The Fund seeks as high a level of current income as is
consistent with the preservation of capital and liquidity by investing in
money market instruments within the standards prescribed for Money Market
Portfolio and U.S. Treasury Portfolio.
AN INVESTMENT IN EACH PORTFOLIO IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT AND THERE CAN BE NO ASSURANCE THAT EACH PORTFOLIO WILL
MAINTAIN A STABLE $1.00 SHARE PRICE.
This Prospectus is designed to provide investors with information that they
should know before investing. Please read and retain this document for
future reference. The Annual Report to Shareholders is incorporated herein.
A Statement of Additional Information (dated June 30, 1994) has been filed
with the Securities and Exchange Commission (SEC) and is incorporated
herein by appropriate reference. This free Statement of Additional
Information is available upon request from Fidelity Distributors
Corporation (Distributors), 82 Devonshire Street, Boston, Massachusetts
02109. To obtain an additional copy of these documents, please call the
number below.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISK,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
For further information or assistance in opening an account, please call:
TOLL FREE 800-843-3001
TABLE OF CONTENTS
Summary of Portfolio Expenses
The Portfolios' Financial History
Investment Objectives
Investment Policies
Performance
Distributions and Taxes
How to Invest, Exchange and Redeem
Daily Money Fund and the Fidelity Organization
Management, Distribution and Services
Appendix
Financial Statements 16
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
June 30, 1994
SUMMARY OF PORTFOLIO EXPENSES
U.S. Treasury Portfolio offers two classes of shares: and Class B
shares. Only Initial Class Shares are offered through this prospectus. The
purpose of the table below is to assist you in understanding the various
costs and expenses that an investor in Initial Class Shares or shares of
Money Market Portfolio would bear directly or indirectly. Hereafter, unless
otherwise noted, all references to "shares" of a Portfolio shall mean or
shares of Money Market Portfolio. Th is standard format was
developed for use by all mutual funds to help investors make their
investment decisions. T his expense information should be
considered along with other important information such as each
Portfolio's investment objective and past performance. There are no
transaction expenses associated with purchases or sales of each Portfolio's
shares.
A. ANNUAL OPERATING EXPENSES:
MONEY U.S.
MARKET TREASURY
PORTFOLIO PORTFOLIO
Management Fee .50% .50%
12b-1 Fees .00% .00%
Other Expenses .11% .07%
Total Operating Expenses .61% .57%
B. EXAMPLE:
An investor would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end of each time
period:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
Money Market
Portfolio $6 $20 $34 $76
U.S. Treasury
Portfolio $6 $18 $32 $71
Annual operating expenses are based on historical expenses for the most
recent fiscal year ended. Management fees are paid by each Portfolio to
Fidelity Management & Research Company (FMR) for managing its
investments and business affairs. The Distribution and Service Plan for
Initial Class Shares and shares of Money Market Portfolio requires FMR to
make payments to certain third parties (Qualified Recipients) from its
management fee, its past profits or any other source available to it. The
maximum amount payable to Qualified Recipients under the Plan is currently
at the annual rate of 0.38% of the average net assets of the Portfolio's
shares to which that Qualified Recipient is related. Long-term shareholders
may pay more than the economic equivalent of the maximum front-end sales
charges permitted by the National Association of Securities Dealers, Inc.
(NASD) due to 12b-1 fees. Each Portfolio incurs Other Expenses for
maintaining shareholder records, furnishing shareholder statements and
reports, and for other services. Management fees and other expenses are
reflected in each Portfolio's share price or dividends and are not charged
directly to individual shareholder accounts. Please refer to the section
entitled "Management, Distribution and Services" on page for further
information.
The hypothetical example illustrates the expenses associated with a
$1,000 investment in shares of each Portfolio over periods of 1, 3, 5 and
10 years, based on the expenses in the table and an assumed annual rate of
return of 5%. THE RETURN OF 5% AND EXPENSES SHOULD NOT BE CONSIDERED
INDICATIONS OF ACTUAL OR EXPECTED PERFORMANCE OF INITIAL CLASS SHARES OR
SHARES OF MONEY MARKET PORTFOLIO, BOTH OF WHICH MAY VARY.
THE PORTFOLIOS' FINANCIAL HISTORY
FINANCIAL HIGHLIGHTS. The following tables give information about each
Portfolio's financial history and use the Fund's fiscal year (which ends
July 31). The annual information in the tables has have been audited
by Coopers & Lybrand, independent accountants. Their unqualified report
is included in the Portfolios' Annual Report on page 27. On September 29,
1993 Money Market Portfolio and U.S. Treasury Portfolio were converted from
a separate series of a Massachusetts business trust to separate series of a
Delaware business trust and each adopted the audited financial statements
of its predecessor portfolio as its own.
MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Six Months Years Ended July 31,
ended
1/31/94
(Unaudited) 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984
SELECTED PER-SHARE DATA
Net asset value,
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
Income from Investment
.013 .028 .041 .067 .080 .085 .066 .057 .072 .088 .094
Operations
Net interest income
Dividends from net
(.013) (.028) (.041) (.067) (.080) (.085) (.066) (.057) (.072) (.088) (.094)
interest income
Net asset value, end
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
of period.
TOTAL RETURN
1.33% 2.82 4.21 6.90 8.34 8.81 6.81 5.87 7.39 9.20 9.77
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period
$ 1,445,269 $ 1,451,40 $ 1,531,36 $ 1,714,10 $ 1,349,67 $ 893,611 $ 560,528 $ 440,944 $ 388,832 $ 236,808 $ 104,964
(000 omitted)3 4 8 0
Ratio of expenses to
.65%* .61 .59 .60 .61 .64 .66 .62 .60 .66 .72
average net assets
Ratio of expenses to
.65%* .61 .59 .60 .61 .73 .66 .62 .60 .66 .95
average net assets
before voluntary
expense limitation
Ratio of net interest
2.62%* 2.76 4.19 6.61 7.99 8.56 6.57 5.78 7.11 8.57 9.64
income to average net
assets
</TABLE>
U.S. TREASURY PORTFOLIO
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Six Months Years Ended July 31, August 31,
ended 1983
1/31/94 (Commenceme
nt of
Operations) to
(Unaudited) 1993 1992 1991 1990 1989 1988 1987 1986 1985 July 31, 1984
SELECTED PER-SHARE DATA
Net asset value,
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of
period
Income from
.013 .027 .042 .065 .079 .083 .063 .057 .069 .085 .085
Investment
Operations
Net interest
income
Dividends from
(.013) (.027) (.042) (.065) (.079) (.083) (.063) (.057) (.069) (.085) (.085)
net
interest income
Net asset value,
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
end
of period.
TOTAL RETURN (DAGGER)
1.31% 2.78 4.25 6.69 8.24 8.64 6.45 5.81 7.15 8.79 8.84
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of
$ 2,694,872 $ 2,949,17 $ 3,093,71 $ 1,701,70 $ 1,177,29 $ 994,133 $ 319,708 $ 240,298 $ 157,386 $ 128,751 $ 108,216
period (000 1 4 4 0
omitted)
Ratio of expenses to
.58%* .57 .59 .59 .59 .64 .64 .58 .60 .60 .66*
average net assets
Ratio of expenses to
.58%* .57 .59 .59 .59 .64 .64 .58 .60 .60 .84*
average
before voluntary
expense limitation
Ratio of net interest
2.58%* 2.73 4.14 6.42 7.91 8.47 6.26 5.67 6.89 8.41 9.60*
income to average
net assets
</TABLE>
* ANNUALIZED
(DAGGER) TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
INVESTMENT OBJECTIVES
Each Portfolio's investment objective is to seek as high a level of current
income as is consistent with the preservation of capital and liquidity by
investing in money market instruments. Each Portfolio's investment
objective is fundamental and may be changed only by vote of a majority of
its outstanding shares. Each Portfolio may not always achieve its
objective, but it will follow the investment style in the following
paragraphs.
INVESTMENT POLICIES
The Fund's portfolios are differentiated in terms of their permitted
investments. Unless otherwise noted, each Portfolio's investment policies
and limitations are not fundamental and may be changed without shareholder
approval. The permitted investments of Money Market Portfolio and U.S.
Treasury Portfolio are as follows:
MONEY MARKET PORTFOLIO invests in U.S. dollar-denominated money market
instruments of domestic and foreign issuers. As a non-fundamental policy,
the Portfolio will invest in "first tier" securities. First tier securities
have received the highest rating (e.g., S&P A - 1 rating) from at
least two NRSROs (or one, if only one has rated the security) or are
obligations of the U.S. government, its agencies and instrumentalities .
The Portfolio may purchase unrated obligations determined to be of
equivalent quality pursuant to procedures adopted by the Board of Trustees.
The Portfolio's investments include:
(bullet) Obligations of companies in the financial services industry,
including banks, savings and loans associations, consumer industrial and
finance companies, securities brokerage companies and a variety of firms in
the insurance field. Under normal conditions, the Portfolio will invest
more than 25% of its total assets in obligations of companies in the
financial services industry.
(bullet) Obligations of governments and their agencies and
instrumentalities.
(bullet) Short-term corporate obligations, including commercial paper,
notes and bonds.
(bullet) Other short-term debt obligations.
Except for temporary defensive purposes, Money Market Portfolio will invest
more than 25% of its total assets in obligations of companies in the
financial services industry. Because Money Market Portfolio concentrates
more than 25% of its total assets in the financial services industry, its
performance may be affected by conditions affecting banks and other
financial services companies. The Money Market Portfolio also may invest in
restricted securities (see the Appendix beginning on page ).
Money Market Portfolio invests in U.S. dollar-denominated obligations of
U.S. banks and foreign branches of U.S. banks, foreign banks and foreign
branches of foreign banks (referred to as Eurodollars), and U.S. branches
and agencies of foreign banks (referred to as Yankee dollars). Eurodollar
and Yankee dollar investments involve risks that are different from
investments in securities of U.S. domestic banks. These risks may include
future unfavorable political and economic developments and possible
withholding taxes, seizure of foreign deposits, currency controls, interest
limitations or other governmental restrictions which might affect the
payment of principal or interest on securities owned by the Portfolio.
Additionally, there may be less public information available about foreign
banks and their branches and agencies. Foreign branches of foreign banks
are not regulated by U.S. banking authorities, and generally are not bound
by accounting, auditing and financial reporting standards comparable to
those of U.S. banks. Although FMR carefully considers these factors when
making investments, the Portfolio does not limit the amount of its assets
that can be invested in any one type of instrument or in any one foreign
country.
U.S. TREASURY PORTFOLIO invests in instruments which are direct obligations
of the U.S. government, and repurchase agreements involving such
securities. Direct U.S. government obligations consist of securities issued
or guaranteed as to principal and interest by the U.S. government and
backed by the full faith and credit of the United States.
These include U.S. Treasury bills, notes and bonds, and instruments issued
by the Export-Import Bank of the U.S., the General Services Administration,
the Government National Mortgage Association, the Small Business
Administration, and the Washington Metropolitan Area Transit Authority. The
Portfolio will not invest in securities of U.S. government agencies or
instrumentalities that are not backed by the full faith and credit of the
United States. The Portfolio intends to invest 100% of its total assets in
U.S. Treasury bills, notes, and bonds and other direct obligations of the
U.S. Treasury. The Portfolio also may engage in repurchase agreements
backed by these obligations. This policy may be changed only upon 90 days'
notice to shareholders.
MATURITY. Each Portfolio must limit its investments to securities with
remaining maturities of 397 days or less and must maintain a
dollar-weighted average maturity of 90 days or less.
Each Portfolio's ability to achieve its investment objective depends on the
quality and maturity of its investments. Although each Portfolio's policies
are designed to help maintain a stable $1.00 share price, all money market
instruments can change in value when interest rates or issuers'
creditworthiness change, or if an issuer or guarantor of a security fails
to pay interest or principal when due. If these changes in value were large
enough, a Portfolio's share price could fall below $1.00. In general,
securities with longer maturities are more vulnerable to price changes,
although they may provide higher yields.
INVESTMENT LIMITATIONS
The following summarizes each Portfolio's principal investment limitations.
A complete listing is contained in the Statement of Additional Information.
1. Money Market Portfolio normally may not invest more than 5% of its
total assets in the securities (other than U.S. government securities) of
any single issuer. Under certain conditions, however, the Portfolio may
invest up to 10% of its total assets in the first tier securities of a
single issuer for up to three business days.
2. Each Portfolio will not purchase a security if, as a result: (a) with
respect to 75% of its total assets, more than 5% of its total assets would
be invested in securities of any single issuer; or (b) more than 25% of its
total assets would be invested in issuers having their principal business
activities in a particular industry, but Money Market Portfolio will invest
more than 25% of its total assets in the obligations of companies in the
financial services industry, except for temporary defensive purposes. These
limitations do not apply to obligations issued or guaranteed by the U.S.
government or its agencies or instrumentalities.
3. (a) Each Portfolio may borrow money for temporary or emergency purposes
or by engaging in reverse repurchase agreements, but not in an amount
exceeding 33 1/3% of its total assets. (b) Each Portfolio may borrow money
from banks or from other funds advised by FMR or an affiliate. (c) Each
Portfolio will not purchase securities when borrowings (other than reverse
repurchase agreements) exceed 5% of its total assets.
4. Money Market Portfolio (a) may lend its portfolio securities to
broker-dealers and institutions but only when the loans are fully
collateralized; (b) may make loans to other funds advised by FMR and its
affiliates not to exceed 10% of its net assets; and (c) will limit these
loans to 33 1/3% of its total assets.
As a non-fundamental policy, each portfolio may not purchase a security, if
as a result, more than 10% of its net assets would be invested in illiquid
instruments.
Except for the Portfolios' investment objectives, limitation 2, and 331/3%
limitations on borrowings and loans, the Portfolios' policies and
limitations described in this Prospectus are not fundamental and may be
changed without shareholder approval. These limitations and the policies
discussed in "Investment Objectives and Investment Policies" are
considered at time of purchase; the sale of securities is not required in
the event of a subsequent change in circumstances.
While there may be occasions when, in order to raise cash to meet
redemptions, a Portfolio might be required to sell securities at a loss,
each Portfolio's policy generally will be to hold securities to maturity
rather than to follow a policy of active trading.
PORTFOLIO TRANSACTIONS
Money market obligations generally are traded in the over-the-counter
market through broker-dealers. A broker-dealer is a securities firm or bank
which makes a market for securities by offering to buy at one price and to
sell at a slightly higher price. The difference between the prices is known
as a spread. Since FMR trades, directly or through affiliated sub-advisers,
a large number of securities, including those of Fidelity's other funds,
broker-dealers are willing to work with the Portfolios on a more favorable
spread than would be possible for most individual investors.
Each Portfolio has authorized FMR to allocate transactions to some
broker-dealers who help distribute the Portfolios' shares or the shares of
Fidelity's other funds, to the extent permitted by law, and on an agency
basis to Fidelity Brokerage Services, Inc. (FBSI) and Fidelity Brokerage
Services, Ltd. (FBSL), affiliates of FMR. FMR will make such allocations if
commissions are comparable to those charged by non-affiliated qualified
broker-dealers for similar services.
Higher commissions may be paid to firms that provide research services to
the extent permitted by law. FMR also is authorized to allocate brokerage
transactions to FBSI in order to secure from FBSI research services
produced by third party, independent entities. FMR may use this research
information in managing each Portfolio's assets, as well as assets of other
clients.
PERFORMANCE
Each Portfolio may quote its yield, effective yield and total return in
advertisements or in reports or other communications. All performance
information is historical and is not intended to indicate future
performance.
Each Portfolio's YIELD refers to the income generated by an investment in a
Portfolio over a seven-day period expressed as an annual percentage rate.
Each Portfolio also may calculate an effective yield by compounding the
base period return over a one-year period. The EFFECTIVE YIELD will be
slightly higher than the yield because of the compounding effect on this
assumed reinvestment. In addition, yields quoted in advertising may be
based on historical seven-day periods.
The current yield and effective yield calculations for Initial
Class Shares and shares of Money Market Portfolio are illustrated below
for the seven-day period ended January 31, 1994:
MONEY MARKET U.S. TREASURY
PORTFOLIO PORTFOLIO
Effective Effective
Yield Yield Yield Yield
2.62% 2.65% 2.54% 2.57%
Each Portfolio's TOTAL RETURN is based on the overall dollar or percentage
change in value of a hypothetical investment in a Portfolio assuming
dividend distributions are reinvested. A CUMULATIVE TOTAL RETURN reflects a
Portfolio's performance over a stated period of time. An AVERAGE ANNUAL
TOTAL RETURN reflects the hypothetical annually compounded rate that would
have produced the same cumulative total return if performance had been
constant over the entire period. Because average annual returns tend to
smooth out variations in a Portfolio's performance, investors should
recognize that they are not the same as actual year-by-year results.
DISTRIBUTIONS AND TAXES
Each Portfolio ordinarily declares dividends from net investment income
daily and pays such dividends monthly. Each Portfolio intends to distribute
substantially all of its net investment income and capital gains, if any,
to shareholders within each calendar year as well as on a fiscal year
basis.
FEDERAL TAXES. Dividends derived from net investment income and short-term
capital gains are taxable as ordinary income. Each Portfolio's
distributions are taxable when they are paid, whether you take them in cash
or reinvest them in additional shares, except that distributions declared
in December and paid in January are taxable as if paid on December 31. The
Portfolios will send you an IRS Form 1099-DIV by January 31 showing your
taxable distributions for the past calendar year.
OTHER TAX INFORMATION. The information above is only a summary of some of
the federal tax consequences generally affecting a Portfolio and its
shareholders, and no attempt has been made to discuss individual tax
consequences. In addition to federal tax, investors may be subject to state
or local taxes on their investment.
STATE AND LOCAL TAXES: Investors should consult their tax advisors to
determine whether a Portfolio is suitable to their particular tax
situation. Mutual fund dividends from most U.S. government securities
generally are free from state and local income taxes. Pennsylvania does not
provide this benefit, and some states may limit the benefit. However,
legislation providing for a pass-through has been approved by the
Pennsylvania legislature which, if signed by the Governor, would be
retroactive to January 1, 1993. In addition, certain types of
securities, such as repurchase agreements and certain agency backed
securities, may not qualify for the government interest exemption on a
state-by-state basis. Some states may impose intangible property taxes.
When you sign your account application, you will be asked to certify that
your social security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require each
Portfolio to withhold 31% of your taxable distributions and redemptions.
HOW TO INVEST, EXCHANGE AND REDEEM
Shares of each Portfolio are offered continuously and may be purchased at
the next determined net asset value per share (NAV) after an order is
received and accepted. The Portfolios do not impose any sales charges in
connection with purchases of their shares, although institutions may charge
their clients fees in connection with purchases and sales for the accounts
of their clients. Each Portfolio may discontinue offering its shares
generally or in any particular state without notice to shareholders.
IF YOU ARE INVESTING THROUGH A SECURITIES DEALER OR BANK (FINANCIAL
INSTITUTION), CONTACT THAT FINANCIAL INSTITUTION DIRECTLY.
Investors purchasing shares of the Portfolios through a program of services
offered by a Financial Institution should read the program materials in
conjunction with this Prospectus. Certain features of the Portfolios may be
modified in these programs and administrative charges (in addition to
payments the Financial Institution may receive pursuant to the
Distribution and Service Plan) may be imposed for the services rendered.
These features include the minimum for subsequent investment amounts and
exchanges with certain Fidelity funds. For further information, including
copies of prospectuses, statements of additional information and
applications, investors should contact their Financial Institution or the
Fund directly.
SHARE PRICE. Fidelity Service Co. (Service) calculates each Portfolio's NAV
at 2:00 p.m. and 4:00 p.m. Eastern time each day that the Portfolio is open
for business (see "Holiday Schedule" on page ). The NAV of each Portfolio
is determined by adding the value of all securities and other assets of the
Portfolio, deducting its actual and accrued liabilities, and dividing by
the number of shares of the Portfolio. outstanding Each Portfolio
values its portfolio securities on the basis of amortized cost. Shares
purchased at the 2 p.m. price earn the income dividend declared that day.
Shares purchased at the 4 p.m. price (including all purchases by check)
begin to earn income dividends on the following business day.
MINIMUM INVESTMENT AND ACCOUNT BALANCE. The minimum initial investment to
establish a new account in each Portfolio is $1,000. Subsequent investments
must be at least $250. If you want to keep your account open, please leave
$500 in it. If an account balance falls below $500 due to redemption, a
Portfolio may close it and mail the proceeds to the address of record.
Investors will be given 30 days' notice that their account will be closed
unless they make an additional investment to increase their account balance
to the $500 minimum.
HOW TO INVEST. Unless you already have a Fidelity mutual fund account you
must complete and sign the application.
INVESTING BY CHECK. An investor or a Financial Institution must send a
check payable to Daily Money Fund and the name of the Portfolio, together
with a completed application, to the address below:
3.Daily Money Fund:
U.S. Treasury Portfolio or
Money Market Portfolio
FIIOC, ZR5
P.O. Box 1182
Boston, MA 02103-1182
Checks must be drawn on a U.S. bank payable to Daily Money Fund and the
Portfolio in which the investor plans to invest.
INVESTING BY MAIL. To make additional investments directly, put the account
number on the check and mail to the address above. If a purchase is made
with more than one check, each check must have a value of at least $50, and
the minimum investment requirement still applies. Each Portfolio reserves
the right to limit the number of checks processed at one time. If a check
does not clear, the purchase will be canceled and the investor could be
liable for any losses and/or fees incurred.
INVESTING BY WIRE. An investor may purchase shares of each Portfolio by
wiring funds through the Federal Reserve System of the Portfolios'
custodian bank. The Portfolios require notification of all wire purchases.
To secure same day acceptance, investors must telephone Institutional
Trading before 2 p.m., to advise them of the wire, and for wiring
instructions.
INSTITUTIONAL TRADING:
NATIONWIDE 800-343-6310
IN MASSACHUSETTS 800-462-2603
OR 617-439-0270
Investors are urged to initiate the purchase of shares as early in the day
as possible and to provide advance notice to Institutional Trading of large
transactions. If Institutional Trading is not advised of the order prior to
2 p.m., or if clearing house funds are transferred via the Bank Wire
system, the order will be accepted on the business day following the day of
transfer and shares will begin earning dividends on that day. There is no
fee imposed by the Portfolios for wire purchases. However, banks may impose
such a fee.
4.HOW TO EXCHANGE. An exchange is a convenient way to buy shares of a
Portfolio or other Fidelity funds. The Fidelity family of funds has a
variety of investment objectives. Investors may exchange shares of each
Portfolio for shares of other Fidelity funds (subject to the minimum
initial investment requirement and the terms of the program of services
offered by their Financial Institution) that are registered in their state.
If you have purchased shares of a Portfolio in connection with the Fidelity
Advisor Funds program, your shares may be exchanged only for Class A
shares of Fidelity Advisor Funds . Other shareholders may not
exchange shares of a Portfolio for Class A shares of Fidelity
Advisor Funds.
You may only exchange between accounts that are registered in the same
name, address, and taxpayer identification number. Exchanges will not be
permitted until a completed and signed mutual fund application is on file.
Investors must consult the prospectus of the fund to be acquired to
determine eligibility and suitability. To protect Portfolio
performance and shareholders, Fidelity discourages frequent trading in
response to short-term market fluctuations. In particular, exchanges that
coincide with "market timing" strategies can have adverse effects on the
Portfolios .
Each Portfolio reserves the right at any time without prior notice to
refuse exchange purchases by any person or group if, in FMR's judgment, the
Portfolio would be unable to invest effectively in accordance with its
investment objective and policies or would otherwise potentially be
adversely affected. The exchange privilege may be modified or terminated in
the future.
TO EXCHANGE BY TELEPHONE. Exchanges may be requested by calling
Institutional Trading (see "Redemption Requests by Wire" on page ).
You may initiate many transactions by telephone. Note that Fidelity will
not be responsible for any losses resulting from unauthorized transactions
if it follows reasonable procedures designed to verify the identity of the
caller. Fidelity will request personalized security codes or other
information, and may also record calls. You should verify the accuracy of
your confirmation statements immediately after you receive them. If you do
not want the ability to redeem and exchange by telephone, call Fidelity for
instructions.
TO EXCHANGE BY MAIL. Written requests for exchanges should contain the
Fund name, account number and number of shares to be redeemed, and
the name of the Portfolio's shares to be purchased. The letter must
be signed by a person authorized to act on the account and must include a
signature guarantee. Letters should be sent to FIIOC at the following
address:
Daily Money Fund:
U.S. Treasury Portfolio or
Money Market Portfolio
FIIOC, ZR5
P.O. Box 1182
Boston, MA 02103-1182
RESTRICTIONS. Currently, there is no limit on the number of exchanges out
of each Portfolio, nor are there any administrative or redemption fees
applicable to exchanges out of the Portfolios. However, other funds may
restrict or limit exchanges, and may impose administrative fees of up to
$7.50 and redemption fees of up to 1.5% on exchanges. Check each fund's
prospectus for details.
Shares of a Portfolio will be redeemed at the next determined NAV
following receipt of the exchange order. Shares of the fund to be acquired
will be purchased at the next determined NAV after redemption
proceeds are made available. Investors will earn dividends in the acquired
fund in accordance with the fund's customary policy, normally on the day
the exchange request is received and accepted. Investors should note that
under certain circumstances, a fund may take up to seven calendar
days to make redemption proceeds available for the exchange purchase of
shares of another fund.
Investors must apply for the wire feature on their account application.
Institutional Trading will send notification that this feature is active;
wire redemptions may then be made by calling Institutional Trading during
trading hours. If telephone instructions are received before 2 p.m.,
proceeds of the redemption will be wired in federal funds on the same day
to the bank account designated on the application. If an account is closed
by wire redemption, any accrued dividends will be paid at the beginning of
the following month.
TAXES. Each exchange is considered the sale of shares of one fund
and the purchase of shares in another, which may produce a gain or loss for
tax purposes.
HOW TO REDEEM. Investors may redeem all or a portion of their shares on any
business day. Shares will be redeemed at the next NAV calculated after the
Portfolio has received and accepted the redemption request. If an investor
closes an account, any accrued dividends will be paid at the beginning of
the following month. Remember that a Portfolio may hold payment until it is
reasonably satisfied that investments made by check have been collected
(which can take up to seven calendar days). Shares redeemed at the 2
p.m. price do not receive the dividend declared on the day of redemption.
Shares redeemed at the 4 p.m. price do receive the dividend declared on the
day of redemption.
REDEMPTION REQUESTS BY CHECK (minimum $500):
(bullet) Investors must have applied for the checkwriting feature on their
account application.
(bullet) There are no limits on the number of checks that may be written.
(bullet) If the amount of a check written is greater than the value of the
account, the check will be returned and the investor may be subject to
extra charges.
5.REDEMPTION REQUESTS BY WIRE may be made by calling Institutional Trading
(see the "Institutional Trading" phone numbers on page ).
An investor may change the bank account(s) designated to receive an amount
redeemed at any time by sending a letter of instruction with a signature
guarantee to:
FIIOC
Mail Zone ZR5
P.O. Box 1182
Boston, MA 02103-1182
Further documentation may be required when deemed appropriate by FIIOC.
REDEMPTION REQUESTS BY MAIL. Send a letter of instruction with signature
guarantee(s) to the address given above. The letter should specify the name
of the Portfolio, the number of shares to be sold, name, account number,
address, and should include the additional requirements listed below that
apply to each particular account.
<TABLE>
<CAPTION>
<S> <C>
Type of Registration Requirements
Individual, Joint Tenant, Sole Proprietorship, Letter of instruction signed by all person(s) required
Custodial (Uniform Gifts or Transfers to Minors to sign for the account exactly as it is registered,
Act), General Partners accompanied by signature guarantee(s).
Letter of instruction and a corporate resolution,
Corporations, Associations signed by person(s) required to sign for the account
accompanied by signature guarantee(s).
A letter of instruction signed by the Trustee(s) with
signature guarantee(s). (If the Trustee's name is not
registered on the account, also provide a copy of the
trust document, certified within the last 60 days.)
Trusts
</TABLE>
Investors who do not fall into any of these registration categories (i.e.,
executors, administrators, conservators, or guardians) should call
Institutional Trading for further instructions.
A signature guarantee is a widely accepted way to protect you and FIIOC by
verifying the signature on your redemption request; it may not be provided
by a notary public. Signature guarantees will be accepted from banks,
brokers, dealers, municipal securities dealers, municipal securities
brokers, government securities dealers, government securities brokers,
credit unions (if authorized under state law), national securities
exchanges, registered securities associations, clearing agencies and
savings associations.
If making immediate payment of redemption proceeds could adversely affect
the Portfolio, it may take up to seven days to pay you. Also, when the New
York Stock Exchange is closed (or when trading is restricted) for any
reason other than its customary weekend or holiday closings, or under any
emergency circumstances as determined by the SEC to merit such action, a
Portfolio may suspend redemption s or postpone payment dates.
Investors unable to execute transactions by telephone to Institutional
Trading or their Financial Institution (for example, during times of
unusual market activity), should consider placing orders by mail to FIIOC
at the address above. In cases of suspension of the right of redemption,
the request for redemption may either be withdrawn or payment may be made
based on the NAV next determined after the termination of the suspension.
CHOOSING A DISTRIBUTION OPTION
Investors may choose from two distribution options:
A. THE SHARE OPTION reinvests dividend distributions in additional
shares of the applicable Portfolio . This option is assigned
automatically if no choice is made on the application. The Share Option
provides for the purchase of new shares on the day dividends are
distributed.
B. THE INCOME-EARNED OPTION means all income dividends are paid in cash.
STATEMENTS AND REPORTS
Service will send the investor a confirmation statement after every
transaction (except a reinvestment of dividends or capital gains) that
affects the share balance or account registration. In addition, an account
statement will be mailed to the record address quarterly. A statement with
tax information will be mailed by January 31 of each year and also will be
filed with the IRS. At least twice a year investors will receive the
Portfolios' financial statements. To reduce expenses, only one copy of the
Portfolios' reports (such as the Annual Report) may be mailed to each
investor's household. Investors should contact their Financial Institution
or the Portfolios to request additional reports each time.
ADDITIONAL INFORMATION. Each Portfolio also reserves the right to reject
any specific purchase order including certain purchases by exchange (see
"How to Exchange" on page ). Purchase orders may be refused if, in FMR's
opinion, they are of a size that would disrupt management of a Portfolio.
6.HOLIDAY SCHEDULE. Each Portfolio is open for business and its NAV is
calculated every day that both the Federal Reserve Bank of New York (New
York Fed) and the New York Stock Exchange (NYSE) are open. The following
holiday closings have been scheduled for 1994: Dr. Martin Luther King, Jr.
Day (observed), Presidents' Day, Good Friday, Memorial Day, Independence
Day (observed), Labor Day, Columbus Day, Veterans' Day, Thanksgiving Day
and Christmas Day (observed). Although FMR expects the same holiday
schedule, with the addition of New Year's Day, to be observed in the
future, the New York Fed or the NYSE may modify its holiday schedule at any
time. The right is reserved to advance the time by which purchase and
redemption requests must be received on any day that: (1) the New York Fed
or the NYSE close early; (2) if in FMR's judgement, early closing is
determined to be in the best interest of the Portfolio's shareholders; or
(3) as permitted by the SEC. To the extent that portfolio securities are
traded in other markets on days the New York Fed or the NYSE is closed,
each Portfolio's NAV may be affected when investors may not purchase or
redeem shares. Certain other Fidelity funds may follow different holiday
closing schedules.
MANAGEMENT, DISTRIBUTION AND SERVICES
MANAGEMENT CONTRACTS. For managing its investments and business affairs,
each Portfolio pays FMR a monthly management fee at the annual rate of .50%
of its average net assets for the month. FMR has voluntarily agreed to
reimburse each Portfolio to the extent that its total operating
expenses (excluding interest, taxes, brokerage commissions and
extraordinary expenses), including management fees, are in excess of an
annual rate of .65% of average net assets. For the fiscal year ended July
31, 1993, management fees for Money Market Portfolio and U.S. Treasury
Portfolio amounted to $7,773,471 and $14,208,606, respectively. FMR retains
the ability to be repaid for expense reimbursements in the amount that
expenses fall below the limit prior to the end of the fiscal year.
FMR, on behalf of each Portfolio, has entered into a sub-advisory agreement
with FMR Texas under which FMR Texas has primary responsibility for
providing portfolio investment management services, while FMR retains
responsibility for providing other management services. Under each
sub-advisory agreement, FMR pays FMR Texas a fee equal to 50% of the
management fee retained by FMR under its current management contract with
the Portfolios, after payments by FMR pursuant to the plan of
distribution for Initial Class Shares and shares of Money Market
Portfolio. The fees paid to FMR Texas are not reduced by any voluntary
or mandatory expense reimbursements that may be in effect from time to
time. For the fiscal year ended July 31, 1993, sub-advisory fees for Money
Market Portfolio and U.S. Treasury Portfolio amounted to $3,886,735 and
$7,104,303, respectively.
DISTRIBUTION AND SERVICE PLAN. The Trustees of the Fund have adopted a
Distribution and Service Plan (the Plan) on behalf of the Original Shares
of U.S. Treasury Portfolio and shares of Money Market Portfolio under Rule
12b-1 of the Investment Company Act of 1940 (the Rule). The Rule provides
in substance that a mutual fund may not engage directly or indirectly in
financing any activity that is intended primarily to result in the sale of
shares except pursuant to a plan adopted under the Rule. The Board of
Trustees has adopted the Plan to allow the Initial Class Shares or the
shares of Money Market Portfolio and FMR to incur certain expenses that
might be considered to constitute direct or indirect payment of
distribution expenses. No separate payments are authorized to be made by
the Original Shares or shares of Money Market Portfolio under the
Plan. Rather, the Plan recognizes that FMR makes payments from its
management fee or any other sources available to parties such as banks or
broker-dealers (Qualified Recipients) that provide shareholder support
services or assist in selling Original Shares and shares of
Money Market Portfolio or perform other distribution-related activities.
Qualified Recipients currently are compensated under the Plan at a maximum
rate of up to .38% annually of the average net assets of the Original
Shares and shares of Money Market Portfolio with respect to which
they provide or have provided shareholder support or distribution services.
Distributors may, at its own expense, provide promotional incentives to
Qualified Recipients who support the sale of Original Shares
and shares of Money Market Portfolio without reimbursement from the
Portfolios. In some instances, these incentives may be offered only to
certain institutions whose representatives provide services in connection
with the sale or expected sale of significant amounts of shares.
The Glass-Steagall Act generally prohibits federally and state chartered or
supervised banks from engaging in the business of underwriting, selling or
distributing securities. Although the scope of this prohibition under the
Glass-Steagall Act has not been fully defined, in Distributors' opinion, it
should not prohibit banks from being paid for shareholder servicing and
record keeping. If, because of changes in law or regulation, or because of
new interpretations of existing law, a bank or the Fund were prevented from
continuing these arrangements, it is expected that other arrangements would
be made for these services and that shareholders would not suffer adverse
financial consequences. In addition, state securities laws on this issue
may differ from the interpretations of federal law expressed herein, and
banks and financial institutions may be required to register as dealers
pursuant to state law.
FIIOC, 82 Devonshire Street, Boston, MA, an affiliate of FMR, acts as the
transfer and dividend-paying agent for Initial Class Shares and shares
of Money Market Portfolio and maintains records for the
holders of such shares . FIIOC is paid fees based on the type, size and
number of accounts in Initial Class Shares of Money Market Portfolio
and the number of transactions made by shareholders of a Portfolio. For the
fiscal year ended July 31, 1993 these payments amounted to $1,220,839 and
$1,310,256 for Money Market Portfolio of U.S. Treasury
Portfolio , respectively.
Service, 82 Devonshire Street, Boston, MA, an affiliate of FMR, performs
the calculations necessary to determine the NAV of each Portfolio and
maintains the general accounting records for each Portfolio. The fees for
these services are based on each Portfolio's average net assets, but must
fall within a range of $20,000 to $750,000 per year. For the fiscal year
ended July 31, 1993, Service received fees of $167,470 and $263,327 from
Money Market Portfolio and U.S. Treasury Portfolio, respectively.
Total expenses for the fiscal year ended July 31, 1993 were .61% of average
net assets for Money Market Portfolio and .57% of average net assets for
Initial Class Shares of U.S. Treasury Portfolio.
DAILY MONEY FUND AND THE FIDELITY ORGANIZATION
THE FUND. Money Market Portfolio and U.S. Treasury Portfolio are
diversified portfolios of Daily Money Fund, an open-end management
investment company originally organized as a Massachusetts business trust
by Declaration of Trust dated June 7, 1982, amended and restated as of
September 1, 1989, and reorganized as a Delaware business trust on
September 29, 1993. The Fund's Board of Trustees supervises Fund activities
and reviews contractual arrangements with companies that provide the
Portfolios with services. The Fund is not required to hold annual
shareholder meetings, although special meetings may be called for a
specific class of shares, Portfolio, or the Fund as a whole for purposes
such as electing or removing Trustees, changing fundamental policies or
approving a management contract or plan of distribution. Shareholders
receive one vote for each share of a Portfolio they own and fractional
votes for each fractional share of a Portfolio they own. Separate votes are
taken by each Portfolio or class of shares if a matter affects just that
Portfolio or class, respectively.
As set forth under "Summary of Portfolio Expenses" U.S. Treasury
Portfolio offers a class of shares to retail investors who engage an
investment professional for investment advice, with a contingent deferred
sales charge (Class B shares). Class B shares are subject to an annual
distribution fee of .75% of average net assets, an annual service fee of
.25% of average net assets, and a contingent deferred sales charge upon
redemption within five years of purchase, which decreases from a maximum of
4% to 0%. After six years, Class B shares automatically convert to Original
Shares.
Class B shares are available only through exchange from Fidelity Advisor
Funds which offer Class B shares. Class B shares may be exchanged only for
Class B Shares of Fidelity Advisor Funds. Transfer agent and shareholder
services for Class B shares are performed by FIIOC.
For the current fiscal year , FMR has voluntarily agreed to reimburse
Class B shares to the extent that its total operating expenses (excluding
interest, taxes, brokerage commissions and extraordinary expenses),
including management fees, are in excess of an annual rate of 1.35%. If FMR
had not reimbursed Class B shares, total operating expenses would have
been 2.84% of average net assets (estimated).
Class B s hares will generally have a lower yield and total return
than Original Shares due to higher expenses in general. Investment
professionals may receive different levels of compensation with respect to
one class of shares over another class of shares in U.S.
Treasury Portfolio.
Fidelity Investments is one of the largest investment management
organizations in the U.S. and has its principal business address at 82
Devonshire Street, Boston, Massachusetts. It is composed of a number of
different subsidiaries and divisions which provide a variety of financial
products and services. The Fund employs various Fidelity companies to
perform certain activities required to operate the Portfolios.
FMR, the Portfolios' adviser, is the original Fidelity company, founded in
1946. FMR provides a number of mutual funds and other clients with
investment research and portfolio management services. FMR maintains a
large staff of experienced investment personnel and a full complement of
related support facilities. As of January 31, 1993, FMR advised funds
having more than 15 million shareholder accounts with a total value of more
than $225 billion. Fidelity Distributors Corporation (Distributors)
distributes shares for the Fidelity funds.
FMR Texas Inc. (FMR Texas), the Portfolios' sub adviser, is a wholly owned
subsidiary of FMR that provides advice and investment management services
with respect to money market instruments. FMR Texas, a Texas corporation,
has its principal offices at 400 East Las Colinas Boulevard, Irving, Texas.
FMR Corp. is the parent company for the Fidelity companies. Through
ownership of voting common stock, Edward C. Johnson 3d (President and a
Trustee of the Fund), Johnson family members, and various trusts for the
benefit of Johnson family members form a controlling group with respect to
FMR Corp.
APPENDIX
The following paragraphs provide a brief description of the securities in
which the Portfolios may invest and the transactions they may make.
Consistent with its investment objective and policies, each Portfolio may
invest in or engage in one or more of the following securities
transactions. However each, Portfolio may purchase or engage in one or more
of the following securities or transactions if they are consistent with the
Portfolio's investment objective and policies.
ASSET BACKED SECURITIES. May include pools of mortgages, loans, or
receivables. Payment of principal and interest may be largely dependent
upon the cash flows generated by the assets backing the securities.
BANKERS' ACCEPTANCES. Negotiable obligations of a bank to pay a draft which
has been drawn on it by a customer. These obligations are backed by large
banks and usually are backed by goods in international trade.
CERTIFICATES OF DEPOSIT. Negotiable certificates representing a commercial
bank's obligations to repay funds deposited with it, earning specified
rates of interest over a given period of time.
COMMERCIAL PAPER. Short-term obligations issued by banks, broker-dealers,
corporations and other entities for purposes such as financing their
current operations.
DELAYED DELIVERY TRANSACTIONS. A Portfolio may buy and sell securities on a
when-issued or delayed delivery or when issued basis, with payment and
delivery taking place at a future date. The market value of securities
purchased in this way may change before the delivery date, which could
affect the market value of a Portfolio's assets. Ordinarily, a Portfolio
will not earn interest on securities purchased until they are delivered.
FINANCIAL SERVICES INDUSTRY. Because the Money Market Portfolio
concentrates more than 25% of its total assets in the financial services
industry, its performance may be affected by conditions affecting banks and
other financial services companies. Companies in the financial services
industry are subject to various risks related to that industry, such as
governmental regulation, changes in interest rates, and exposure on loans,
including loans to foreign borrowers. Investments in the financial services
industry may include obligations of foreign and domestic banks, savings and
loan associations, consumer and industrial finance companies, securities
brokerage companies, leasing companies, and a variety of firms in the
insurance field. These obligations include time deposits, certificates of
deposit, bankers' acceptances, and commercial paper.
ILLIQUID INVESTMENTS. Under the supervision of the Board of Trustees, FMR
determines the liquidity of the Portfolios' investments. The absence of a
trading market can make it difficult to ascertain a market value for
illiquid investments. It may be difficult or impossible for the Portfolios
to sell illiquid investments promptly at an acceptable price.
INTERFUND BORROWING PROGRAM. Each Portfolio has received permission from
the SEC to lend money to and borrow money from other funds advised by FMR
or its affiliates. U.S. Treasury Portfolio will participate in the
interfund borrowing program only as a borrower. Interfund loans normally
will extend overnight, but can have a maximum duration of seven days. Money
Market Portfolio will lend through the program when the returns are higher
than those available at the same time from other short-term instruments
(such as repurchase agreements), and will borrow through the program only
when the costs are equal to or lower than the cost of bank loans. The Money
Market Portfolio will not lend more than 10% of its assets to other funds,
and neither Portfolio will borrow through the program if, after doing so,
total outstanding borrowings would exceed 15% of the Portfolio's total
assets. Loans may be called on one day's notice, and the Portfolios may
have to borrow from a bank at a higher interest rate if an interfund loan
is called or not renewed. Any delay in repayment to a lending fund could
cause a lost investment opportunity or additional borrowing costs.
MONEY MARKET refers to the marketplace where short-term, high grade debt
securities are traded. These securities include U.S. government
obligations, commercial paper, certificates of deposit and bankers'
acceptances, time deposits and short-term corporate obligations. These
securities normally carry specific rates of return. A Portfolio may invest
in variable rate obligations which provide for adjustments in interest
rates on specific dates, and floating rate obligations which have an
interest rate that changes whenever there is a change in the designated
base rate.
MUNICIPAL OBLIGATIONS are issued to raise money for various public
purposes, including general purpose financing for state and local
governments as well as financing for specific projects or public
facilities. Municipal obligations may be backed by the full taxing power of
a municipality or by the revenues from a specific project or the credit of
a private organization.
REPURCHASE AGREEMENTS. Repurchase agreements are transactions by which a
Portfolio purchases a security and simultaneously commits to resell that
security to the seller at an agreed upon price at a higher price. In the
event of bankruptcy of the other party to a repurchase agreement, a
Portfolio could experience delays in recovering cash. To the extent that,
in the meantime, the value of the securities purchased may have decreased,
a Portfolio could experience a loss. In all cases, FMR must find the
creditworthiness of the other party to a transaction satisfactory.
RESTRICTED SECURITIES (cannot be sold to the public without registration
under the Securities Act of 1933 (restricted securities). Unless registered
for sale, these securities can only be sold in privately negotiated
transactions or pursuant to an exemption from registration.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
Portfolio sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash. At the same time, each Portfolio agrees
to repurchase the instrument at an agreed-upon price and time. Each
Portfolio expects that it will engage in reverse repurchase agreements for
temporary purposes such as to fund redemption requests. Reverse repurchase
agreements may increase the risk of fluctuation in the market value of a
Portfolio's assets or in its yield.
STRIPPED GOVERNMENT SECURITIES. Stripped securities are created by
separating the income and principal components of a debt instrument and
selling them separately. Each Portfolio may purchase U.S. Treasury STRIPS
(Separate Trading of Registered Interest and Principal of Securities), that
are created when the coupon payments and the principal payment are stripped
from an outstanding Treasury bond by a Federal Reserve Bank.
TIME DEPOSITS. Non-negotiable deposits in a banking institution earning a
specified interest rate over a given period of time.
U.S. GOVERNMENT OBLIGATIONS. Debt securities issued or guaranteed by the
U.S. Treasury or by an agency or instrumentality of the U.S. government.
Not all U.S. government obligations are backed by the full faith and credit
of the United States. For example, securities issued by the Federal Farm
Credit Bank or by the Federal National Mortgage Association are supported
by the agency's right to borrow money from the U.S. Treasury under certain
circumstances. Securities issued by the Financing Corporation are supported
only by the credit of the agency. There is no guarantee that the government
will support these types of securities, and therefore they involve more
risk than other government obligations.
VARIABLE OR FLOATING RATE OBLIGATIONS including certain participation
interests in municipal obligations, have interest rate adjustment formulas
that help stabilize their market values. Many variable and floating rate
instruments also carry demand features that permit a Portfolio to sell them
at par value plus accrued interest on short notice. When determining the
maturity of a variable or floating rate instrument, the Portfolio may look
to the date the demand feature can be exercised, or to the date the
interest rate is readjusted, rather than to the final maturity of the
instrument.
ZERO COUPON BONDS do not make interest payments; instead they are sold at a
deep discount from their face value and are redeemed at face value when
they mature. Because zero coupon bonds do not pay current income, their
prices can be very volatile when interest rates change. In calculating its
daily dividend, a Portfolio takes into account as income a portion of the
difference between a zero coupon bond's purchase price and its face value.
DAILY MONEY FUND:
MONEY MARKET PORTFOLIO
U.S. TREASURY PORTFOLIO
STATEMENT OF ADDITIONAL INFORMATION
This Statement is not a prospectus but should be read in conjunction with
the Fund's current Prospectus
(dated June 30, 1994) . The Annual Report is incorporated into the
Prospectus. Please retain this Statement for future reference. To obtain
an additional copy of this Statement or of the Prospectus and Annual
Report, please call Fidelity nationwide at 800-843-3001. If you are
investing through a financial institution, contact that institution
directly.
TABLE OF CONTENTS
Page
Investment Policies and Limitations 2
Portfolio Transactions 7
Valuation of Portfolio Securities 8
Performance 8
Additional Purchase and Redemption Information 11
Distributions and Taxes 11
FMR 11
Trustees and Officers 12
Management Contracts 13
Contracts With Companies Affiliated With FMR 14
Distribution and Service Plans 15
Description of the Fund 16
Appendix 18
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
SUB-ADVISOR
FMR Texas Inc. (FMR Texas)
DISTRIBUTOR
Fidelity Distributors Corporation (Distributors)
TRANSFER AGENT
Fidelity Investments Institutional Operations Company (FIIOC)
CUSTODIAN
Morgan Guaranty Trust Company of New York
June 30, 1994
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of each Portfolio's assets that may
be invested in any security or other asset, or sets forth a policy
regarding quality standards, such standard or percentage limitation shall
be determined immediately after and as a result of each Portfolio's
acquisition of such security or other asset. Accordingly, any subsequent
change in values, net assets, or other circumstances will not be considered
when determining whether the investment complies with each Portfolio's
investment policies and limitations.
Each Portfolio's fundamental investment policies and limitations may not be
changed without approval by a "majority of the outstanding voting
securities" as defined in the Investment Company Act of 1940 (the 1940 Act)
of the Portfolio.
INVESTMENT LIMITATIONS OF U.S. TREASURY PORTFOLIO
THE FOLLOWING ARE U.S. TREASURY PORTFOLIO'S FUNDAMENTAL INVESTMENT
LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE PORTFOLIO MAY NOT:
(1) purchase the securities of any issuer (other than obligations issued or
guaranteed as to principal and interest by the government of the United
States, its agencies or instrumentalities) if, as a result thereof more
than 5% of its total assets would be invested in the securities of such
issuer; provided, however, that with respect to 25% of its total assets,
10%, of its assets may be invested in the securities of an issuer;
(2) issue senior securities except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the Portfolio may (i) borrow money for
temporary or emergency purposes (not for leveraging or investment) and (ii)
engage in reverse repurchase agreements for any purpose; provided that (i)
and (ii) in combination do not exceed 33 1/3% of the Portfolio's total
assets (including the amount borrowed) less liabilities (other than
borrowings). Any borrowings that come to exceed this amount will be
reduced within three days (not including Sundays and holidays) to the
extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
Portfolio may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than the 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 Portfolio's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the
Portfolio from investing in securities or other instruments backed by real
estate or securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments;
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities to repurchase
agreements;
(9) write or purchase any put or call options;
(10) The Portfolio may, not withstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the same
fundamental investment objective, policies and limitations as the
Portfolio.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT
SHAREHOLDER APPROVAL.
(i) The Portfolio does not currently intend to purchase a security (other
than a security issued or guaranteed by the U.S. government or any of its
agencies or instrumentalities) if, as a result, more than 5% of its total
assets would be invested in the securities of a single issuer; provided
that the Portfolio may invest up to 10% of its total assets in the first
tier securities of a single issuer for up to three business days.
(ii) The Portfolio does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in kind and
amount to the securities sold short and provided that transactions in
futures contracts and options are not deemed to constitute selling
securities short.
(iii) Subject to revision upon 60 days' notice to shareholders, the
Portfolio does not currently intend to purchase securities on margin,
except that the Portfolio may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iv) The Portfolio may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an affiliate
serves as investment adviser or (b) by engaging in reverse repurchase
agreements with any party. The Portfolio will not purchase any security
while borrowings (excluding reverse repurchase agreements) representing
more than 5% of its total assets are outstanding. The Portfolio will not
borrow from other funds advised by FMR or its affiliates if total
outstanding borrowings immediately after such borrowing would exceed 15% of
the Portfolio's total assets.
(v) The Portfolio does not currently intend to purchase any security if, as
a result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(vi) The Portfolio does not currently intend to make loans, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(vii) The Portfolio does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of reorganization, consolidation, or merger.
(viii) The Portfolio does not currently intend to purchase the securities
of any issuer (other than securities issued or guaranteed by domestic or
foreign governments or political subdivisions thereof) if, as a result,
more than 5% of its total assets would be invested in the securities of
business enterprises that, including predecessors, have a record of less
than three years of continuous operation.
(ix) The Portfolio does not currently intend to invest in oil, gas or other
mineral exploration or development program or leases.
(x) The Portfolio does not currently intend to purchase the securities of
any issuer if those officers and Trustees of the Fund and those officers
and directors of FMR who individually own more than 1/2 of 1% of the
securities of such issuer together own more than 5% of such issuer's
securities.
(x) The Portfolio does not currently intend to invest all of its assets in
the securities of a single open-end management investment company with
substantially the same fundamental investment objectives, policies, and
limitations as the Portfolio.
INVESTMENT LIMITATIONS OF MONEY MARKET PORTFOLIO
THE FOLLOWING ARE MONEY MARKET PORTFOLIO'S FUNDAMENTAL INVESTMENT
LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE PORTFOLIO MAY NOT:
(1) purchase the securities of any issuer (other than obligations issued or
guaranteed as to principal and interest by the government of the United
States, its agencies or instrumentalities) if, as a result thereof, more
than 5% of its total assets would be invested in the securities of such
issuer; provided, however, that with respect to 25% of its total assets 10%
of its assets may be invested in the securities of an issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the Portfolio may (i) borrow money for
temporary or emergency purposes (not for leveraging or investment) and (ii)
engage in reverse repurchase agreements for any purpose; provided that (i)
and (ii) in combination do not exceed 33 1/3% of the Portfolio's total
assets (including the amount borrowed) less liabilities (other than
borrowings). Any borrowings that come to exceed this amount will be
reduced within three days (not including Sundays and holidays) to the
extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
Portfolio may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities), if, as a result, more than 25% of the Portfolio's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry, except that the Portfolio
will invest more than 25% of its total assets in the financial services
industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the
Portfolio from investing in securities or other instruments backed by real
estate or securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments;
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements;
(9) write or purchase any put or call options;
(10) The Portfolio may, not withstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the same
fundamental investment objectives, policies and limitations as the
Portfolio.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT
SHAREHOLDER APPROVAL.
(i) The Portfolio does not currently intend to purchase a security (other
than a security issued or guaranteed by the U.S. government or any of its
agents or instrumentalities) if, as a result, more than 5% of its total
assets would be invested in the securities of a single issuer; provided
that the Portfolio may invest up to 10% of its total assets in the first
tier securities of a single issuer for up to three business days.
(ii) The Portfolio does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in kind and
amount to the securities sold short, and provided that transactions in
futures contracts and options are not deemed to constitute selling
securities short.
(iii) Subject to revision upon 60 days' notice to shareholders, the
Portfolio does not currently intend to purchase securities on margin,
except that the Portfolio may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iv) The Portfolio may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an affiliate
serves as investment adviser or (b) by engaging in reverse repurchase
agreements with any party. The Portfolio will not purchase any security
while borrowings (excluding reverse repurchase agreements) representing
more than 5% of its total assets are outstanding. The Portfolio will not
borrow from other funds advised by FMR or its affiliates if total
outstanding borrowings immediately after such borrowing would exceed 15% of
the Portfolio's total assets.
(v) The Portfolio does not currently intend to purchase any security if, as
a result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued
(vi) The Portfolio does not currently intend to lend assets other than
securities to other parties, except by lending money (up to 10% of the
Portfolio's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser. (This limitation
does not apply to purchases of debt securities or to repurchase
agreements.)
(vii) The Portfolio does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of reorganization, consolidation, or merger.
(viii) The Portfolio does not currently intend to purchase the securities
of any issuer (other than securities issued or guaranteed by domestic or
foreign governments or political subdivisions thereof) if, as a result,
more than 5% of its total assets would be invested in securities of
business enterprises that, including predecessors, have a record of less
than three years' continuous operation;
(ix) The Portfolio does not currently intend to invest in oil, gas or other
mineral exploration or development programs or leases.
(x) The Portfolio does not currently intend to purchase the securities of
any issuer if those officers and Trustees of the Fund and those officers
and directors of FMR who individually own more than 1/2 of 1% of the
securities of such issuer together own more than 5% of such issuer's
securities.
(xi) The Portfolio does not currently intend to invest all of its assets in
the securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the Portfolio.
(As an operating policy subject to change only upon approval by the Board
of Trustees and 60 days' prior notice to shareholders, neither Portfolio
currently intends to purchase futures contracts or options on futures
contracts.)
AFFILIATED BANK TRANSACTIONS. Each Portfolio may engage in transactions
with financial institutions that are, or may be considered to be,
"affiliated persons" of a Portfolio under the Investment Company Act of
1940. These transactions may include repurchase agreements with custodian
banks; short-term obligations of, and repurchase agreements with, the 50
largest U.S. banks (measured by deposits); municipal securities; U. S.
government securities with affiliated financial institutions that are
primary dealers in these securities; short-term currency transactions; and
short-term borrowings. In accordance with exemptive orders issued by the
Securities and Exchange Commission, the Board of Trustees has established
and periodically reviews procedures applicable to transactions involving
affiliated financial institutions.
ASSET BACKED SECURITIES may include pools of mortgages, loans,
receivables or other assets. Payment of principal and interest may be
largely dependent upon the cash flows generated by the assets backing the
securities, and, in certain cases, supported by letters of credit, surety
bonds, or other credit enhancements, The value of asset-backed securities
may also be affected by the creditworthiness of the servicing agent for the
pool, the originator of the loans or receivables, or financial
institution(s) providing the credit support.
DELAYED-DELIVERY TRANSACTIONS. Each Portfolio may buy and sell securities
on a delayed-delivery or when-issued basis. These transactions involve a
commitment by a Portfolio to purchase or sell specific securities at a
predetermined price and/or yield, with payment and delivery taking place
after the customary settlement period for that type of security (and more
than seven days in the future). Typically, no interest accrues to the
purchaser until the security is delivered.
When purchasing securities on a delayed-delivery basis, a Portfolio assumes
the rights and risks of ownership, including the risk of price and yield
fluctuations. Because a Portfolio is not required to pay for securities
until the delivery date, these risks are in addition to the risks
associated with the Portfolio's other investments. If a Portfolio remains
substantially fully invested at a time when delayed-delivery purchases are
outstanding, the delayed-delivery purchases may result in a form of
leverage. When delayed-delivery purchases are outstanding, a Portfolio
will set aside appropriate liquid assets in a segregated custodial account
to cover its purchase obligations. When a Portfolio has sold a security on
a delayed-delivery basis, the Portfolio does not participate in further
gains or losses with respect to the security. If the other party to a
delayed-delivery transaction fails to deliver or pay for the securities, a
Portfolio could miss a favorable price or yield opportunity, or could
suffer a loss.
A Portfolio may renegotiate delayed-delivery transactions after they are
entered into, and may sell underlying securities before they are delivered,
which may result in capital gains or losses.
FOREIGN SECURITIES. The obligations of foreign branches of U.S. banks may
be general obligations of the parent bank in addition to the issuing
branch, or may be limited by the terms of a specific obligation and by
governmental regulation. Payment of interest and principal upon these
obligations also may be affected by governmental action in the country of
domicile of the branch (generally referred to as sovereign risk). In
addition, evidences of ownership of portfolio securities may be held
outside of the U.S. and the Money Market Portfolio may be subject to the
risks associated with the holding of such property overseas. Various
provisions of federal law governing the establishment and operation of
domestic branches do not apply to foreign branches of domestic banks.
Obligations of U.S. branches and agencies of foreign banks may be general
obligations of the main bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation and by federal and state
regulation as well as by governmental action in the country in which the
foreign bank has its head office. The Portfolio's ability to access assets
from abroad for payment may be subject to foreign law.
Obligations of foreign issuers also involve certain additional risks.
Foreign issuers may be subject to less government regulation and
supervision than U.S. issuers. Foreign issuers also generally are not
bound by uniform accounting, auditing and financial reporting requirements
comparable to those applicable to U.S. issuers.
ILLIQUID INVESTMENTS. Illiquid investments are investments that cannot be
sold or disposed of in the ordinary course of business at approximately the
prices at which they are valued. Under the supervision of the Board of
Trustees, FMR determines the liquidity of each Portfolio's investments and,
through reports from FMR, the Board monitors investments in illiquid
instruments. In determining the liquidity of a Portfolio's investments,
FMR may consider various factors including (1) the frequency of trades and
quotations, (2) the number of dealers and prospective purchasers in the
marketplace, (3) dealer undertakings to make a market, (4) the nature of
the security (including any demand or tender features) and (5) the nature
of the marketplace for trades (including the ability to assign or offset
the Portfolio's rights and obligations relating to the investment).
Investments currently considered by Money Market Portfolio to be illiquid
include repurchase agreements not entitling the holder to payment of
principal and interest within seven days. Also, FMR may determine
some restricted securities and time deposits to be illiquid. In the
absence of market quotations, illiquid investments are valued for purposes
of monitoring amortized cost valuation at fair value as determined in good
faith by a committee appointed by the Board of Trustees. If through a
change in values, net assets or other circumstances, a Portfolio were in a
position where 10% or more of its net assets were invested in illiquid
securities, it would seek to take appropriate steps to protect liquidity.
REPURCHASE AGREEMENTS. In a repurchase agreement, a Portfolio purchases a
security and simultaneously commits to resell that security to the seller
at an agreed upon price on an agreed upon date within a number of days from
the date of purchase. The resale price reflects the purchase price plus an
agreed upon incremental amount which is unrelated to the coupon rate or
maturity of the purchased security. A repurchase agreement involves the
obligation of the seller to pay the agreed upon price, which obligation is
in effect secured by the value (at least equal to the amount of the agreed
upon resale price and marked to market daily) of the underlying security.
Each Portfolio may engage in repurchase agreements with respect to any
security type in which it is authorized to invest. While it does not
presently appear possible to eliminate all risks from these transactions
(particularly the possibility of a decline in the market value of the
underlying securities, as well as delays and costs to a Portfolio in
connection with bankruptcy proceedings), it is the policy of each Portfolio
to limit repurchase agreement transactions to those parties whose
creditworthiness has been reviewed and found satisfactory by FMR.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where
registration is required , a Por tfolio may be obligated to pay all or
part of the registration expense and a considerable period could elapse
between the time it decides to seek registration and the time the Portfolio
may be permitted to sell a security under an effective registration
statement. If, during such a period, adverse market conditions were to
develop, the Portfolio might obtain a less favorable price than prevailed
when it decided to seek registration of the security. However, in general,
the Portfolio anticipates holding restricted securities to maturity or
selling them in an exempt transaction.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
Portfolio sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the Portfolio will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement.
Each Portfolio will enter into reverse repurchase agreements only with
parties whose creditworthiness has been found satisfactory by FMR. Such
transactions may increase fluctuations in the market value of each
Portfolio's assets and may be viewed as a form of leverage.
SHORT SALES "AGAINST THE BOX". Each Portfolio may sell securities short
when it owns or has the right to obtain securities equivalent in kind or
amount to the securities sold short. Short sales could be used to protect
the net asset value per share of a Portfolio in anticipation of increased
interest rates, without sacrificing the current yield of the securities
sold short. If the Portfolio enters into a short sale against the box, it
will be required to set aside securities equivalent in kind and amount to
the securities sold short (or securities convertible or exchangeable into
such securities) and will be required to hold such securities while the
short sale is outstanding. A Portfolio will incur transaction costs,
including interest expense, in connection with opening, maintaining, and
closing short sales against the box.
VARIABLE OR FLOATING RATE INSTRUMENTS. Each Portfolio may invest in
variable or floating rate instruments that ultimately mature in more than
397 days, if the Portfolio acquires a right to sell the securities that
meets certain requirements set forth in Rule 2a-7. Variable rate
instruments (including instruments subject to a demand feature) that mature
in 397 days or less and government securities with a variable rate of
interest adjusted no less frequently than every 762 days, may be deemed to
have maturities equal to the period remaining until the next adjustment of
the interest rate. Other variable rate instruments with demand features
may be deemed to have a maturity equal to the longer of the period
remaining until the next readjustment of the interest rate or the period
remaining until the principal amount can be recovered through demand. A
floating rate instrument subject to a demand feature may be deemed to have
a maturity equal to the period remaining until the principal amount can be
recovered through demand.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of the Portfolios by FMR (either directly or through affiliated
sub-advisers) pursuant to authority contained in each Portfolio's
Management Contract. FMR is also responsible for the placement of
transaction orders for other investment companies and accounts for which it
or its affiliates act as investment adviser. Securities purchased and sold
by the Portfolios generally will be traded on a net basis (i.e., without
commission). In selecting broker-dealers, subject to applicable
limitations of the federal securities laws, FMR will consider various
relevant factors, including, but not limited to, the size and type of the
transaction; the nature and character of the markets for the security to be
purchased or sold; the execution efficiency, settlement capability, and
financial condition of the broker-dealer firm; the broker-dealer's
execution services rendered on a continuing basis; and the reasonableness
of any commissions.
The Portfolios may execute portfolio transactions with broker-dealers who
provide research and execution services to the Portfolios and/or other
accounts over which FMR or its affiliates exercise investment discretion.
Such services may include advice concerning the value of securities; the
advisability of investing in, purchasing or selling securities; the
availability of securities or the purchasers or sellers of securities;
furnishing analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy and performance of
accounts; and effecting securities transactions and performing functions
incidental thereto (such as clearance and settlement). FMR maintains a
listing of broker-dealers who provide such services on a regular basis.
However, as many transactions on behalf of the Portfolios are placed with
dealers (including broker-dealers on the list) without regard to the
furnishing of such services, it is not possible to estimate the proportion
of such transactions directed to such broker-dealers solely because such
services were provided. The selection of such broker-dealers is generally
made by FMR (to the extent possible consistent with execution
considerations) based upon the quality of research and execution services
provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the Portfolios may be useful to FMR in rendering investment
management services to the Portfolios and/or their other clients, and
conversely, such research provided by broker-dealers who have executed
transaction orders on behalf of other FMR clients may be useful to FMR in
carrying out its obligations to the Portfolios. The receipt of such
research has not reduced FMR's normal independent research activities;
however, it enables FMR to avoid the additional expenses that could be
incurred if FMR were to attempt to develop comparable information through
its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause
the Portfolios to pay such higher commissions, FMR must determine in good
faith that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers
viewed in terms of a particular transaction or FMR's overall
responsibilities to the Portfolios or its other clients. In reaching this
determination, FMR will not attempt to place a specific dollar value on the
brokerage and/or research services provided or to determine what portion of
the compensation should be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the Portfolios or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services
provided by and place agency transactions with Fidelity Brokerage Services
Inc. (FBSI) and Fidelity Brokerage Services, Ltd. (FBSL), subsidiaries of
FMR Corp., if the commissions are fair and reasonable and comparable to
commissions charged by non-affiliated qualified brokerage firms for similar
services.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, unless certain
requirements are satisfied. Pursuant to such regulations, the Board of
Trustees has authorized FBS I to execute portfolio transactions on
national securities exchanges. In accordance with approved procedures
and applicable SCE rules.
The Trustees periodically review FMR's performance of its responsibilities
in connection with the placement of portfolio transactions on behalf of the
Portfolios and review commissions paid by the Portfolios over
representative periods of time to determine if they are reasonable in
relation to the benefits to the Portfolios.
From time to time, the Trustees will review whether the recapture for the
benefit of the Portfolios of some portion of the brokerage commissions or
similar fees paid by the Portfolios on portfolio transactions is legally
permissible and advisable. The Portfolios seek to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at present no
other recapture arrangements are in effect. The Trustees intend to
continue to review whether recapture opportunities are available and are
legally permissible and, if so, to determine in the exercise of their
business judgment whether it would be advisable for the Portfolios to seek
such recapture.
Although the Trustees and officers are substantially the same as those of
other funds managed by FMR, investment decisions for the Portfolios are
made independently from those of other funds managed by FMR or accounts
managed by FMR affiliates. It sometimes happens that the same security is
held in the portfolio of more than one of these funds or accounts.
Simultaneous transactions are inevitable when several funds are managed by
the same investment adviser, particularly when the same security is
suitable for the investment objective of more than one fund.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with a formula considered by the officers of the funds involved to be
equitable to each fund. In some cases this system could have a detrimental
effect on the price or value of the security as far as the Portfolios are
concerned. In other cases, however, the ability of the Portfolios to
participate in volume transactions will produce better executions and
prices for the Portfolios. It is the current opinion of the Trustees that
the desirability of retaining FMR as investment adviser to the Portfolios
outweighs any disadvantages that may be said to exist from exposure to
simultaneous transactions.
VALUATION OF PORTFOLIO SECURITIES
Each Portfolio values its investments on the basis of amortized cost. This
technique involves valuing an instrument at its cost as adjusted for
amortization of premium or accretion of discount rather than its value
based on current market quotations or appropriate substitutes which reflect
current market conditions. The amortized cost value of an instrument may
be higher or lower than the price a Portfolio would receive if it sold the
instrument.
Valuing each Portfolio's instruments on the basis of amortized cost and use
of the term "money market fund" are permitted by Rule 2a-7 under the 1940
Act. Each Portfolio must adhere to certain conditions under Rule 2a-7;
these conditions are summarized in the Prospectus.
The Board of Trustees of the Fund oversees FMR's adherence to SEC rules
concerning money market funds, and has established procedures designed to
stabilize each Portfolio's NAV at $1.00. At such intervals as they deem
appropriate, the Trustees consider the extent to which NAV calculated by
using market valuations would deviate from $1.00 per share. If the
Trustees believe that a deviation from a Portfolio's amortized cost per
share may result in material dilution or other unfair results to
shareholders, the Trustees have agreed to take such corrective action, if
any, as they deem appropriate to eliminate or reduce, to the extent
reasonably practicable, the dilution or unfair results. Such corrective
action could include selling portfolio instruments prior to maturity to
realize capital gains or losses or to shorten average portfolio maturity;
withholding dividends; redeeming shares in kind; establishing NAV by using
available market quotations; and such other measures as the Trustees may
deem appropriate.
During periods of declining interest rates, a Portfolio's yield based on
amortized cost may be higher than the yield based on market valuations.
Under these circumstances, a shareholder in a Portfolio would be able to
obtain a somewhat higher yield than would result if the Portfolio utilized
market valuations to determine its NAV. The converse would apply in a
period of rising interest rates.
PERFORMANCE
Each Portfolio's performance may be compared to the performance of other
mutual funds in general, or to the performance of particular types of
mutual funds. These comparisons may be expressed as mutual fund rankings
prepared by Lipper Analytical Services, Inc. (Lipper), an independent
service located in Summit, New Jersey which monitors the performance of
mutual funds. Lipper generally ranks funds on the basis of total return,
assuming reinvestment of distributions, but does not take sales charges or
redemption fees into consideration, and is prepared without regard to tax
consequences. Lipper may also rank the Portfolios based on yield. In
addition to the mutual fund rankings, each Portfolio's performance may be
compared to mutual fund performance indices prepared by Lipper.
The Portfolios may compare performance or the performance of securities
in shich it may invest to averages published by IBC USA (Publications),
Inc. of Ashland, Massachussetts. These averages assume reinvestment of
distributions. The MONEY FUND AVERAGES which is reported in the MONEY FUND
REPORT, covers over 543 money market funds.
Each Portfolio may discuss its fund number, Quotron(TRADEMARK) number,
CUSIP number, and current portfolio manager.
From time to time each Portfolio's performance also may be compared to
other mutual funds tracked by financial or business publications and
periodicals. For example, each Portfolio may quote Morningstar, Inc. in
its advertising materials. Morningstar, Inc. is a mutual fund rating
service that rates mutual funds on the basis of risk-adjusted performance.
In addition, each Portfolio may quote financial or business publications
and periodicals as they relate to portfolio management, investment
philosophy, and investment techniques. Rankings that compare the
performance of Fidelity funds to one another in appropriate categ ories
over specific periods of time may also be quoted in advertising.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the Consumer Price Index), and
combinations of various capital markets. The performance of these capital
markets is based on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any
of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the
funds. Ibbotson calculates total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
The Portfolios also may compare their performance to the yields of other
money market securities or averages of other money market securities as
reported by the Federal Reserve Bulletin, by TeleRate, a financial
information network, or by Salomon Brothers Inc., a broker-dealer firm, and
to other fixed-income investments such as Certificates of Deposit (CDs).
The principal value and interest rate of CDs and money market securities
are fixed at the time of purchase whereas each Portfolio's yield will
fluctuate. Unlike some CDs and certain other money market securities,
money market mutual funds are not insured by the FDIC. Investors should
give consideration to the quality and maturity of the portfolio securities
of the respective investment companies when comparing investment
alternatives. Each Portfolio may reference the growth and variety of money
market mutual funds and the FMR's innovation and participation in the
industry.
YIELD CALCULATIONS. The Portfolios' yield refers to the income
generated by an investment in the Portfolio over a seven day period
expressed as an annual percentage rate. The effective yield, although
calculated similarly, will be slightly higher than the yield because it
assumes that income earned from the investment is reinvested (the
compounding effect of reinvestment). In addition to the current yield, the
Portfolio may quote yields in advertising based on any historical seven day
periods.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of a Portfolio's return, including the effect of reinvesting
dividends and capital gain distributions (if any). Average annual returns
are calculated by determining the growth or decline in value of a
hypothetical historical investment in a Portfolio over a stated period and
then calculating the annually compounded percentage rate that would have
produced the same results if the rate of growth or decline in the value of
the investment had been constant over that period. For example, a
cumulative return of 100% over ten years would produce an average annual
return of 7.18%, which is the steady annual rate that would equal 100%
growth on a compounded basis in ten years. While average annual returns
are a convenient means of comparing investment alternatives, investors
should realize that a Portfolio's performance is not constant over time,
but changes from year to year, and that average annual returns represent
averaged figures as opposed to the actual year-to-year performance.
In addition to average annual returns, a Portfolio may quote unaveraged or
cumulative total returns reflecting the simple change in the value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as percentages or as dollar amounts and may be
calculated for a single investment, a series of investments or a series of
redemptions over any time period. Total returns may be broken down into
their components of income and capital in order to illustrate the
relationship of these factors and their contributions to total return.
Total returns, yields, and other performance information may be quoted
numerically or in a table, graph, or similar illustration. The Money
Market Portfolio's cumulative total returns and average annual returns for
periods ended January 31, 1994 were as follows:
Historical Portfolio Results
One Year Five Years Ten Years
Average Annual Total Returns 2.67% 5.63% 6.65%
Cumulative Total Returns 2.67% 31.51% 90.45
The following chart shows the income and capital elements of a Portfolio's
year-by-year total returns for the period July 31, 1983 through January 31,
1994 for Money Market Portfolio as compared to the cost of living measured
by the Consumer Price Index over the same period.
During the period from July 31, 1983 through January 31, 1994, a
hypothetical investment of $10,000 in the Money Market Portfolio would have
grown to $19,918 assuming all dividends were reinvested.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Years Initial Value of Value of Total Consumer
Ended $10,000 Reinvested Reinvested Value Price
7/31 Investment Dividends Capital Gains Index
1983 $10,000 $0 $0 $10,000 $10,000
1984 10,000 977 0 10,977 10,420
1985 10,000 1,988 0 11,988 10,791
1986 10,000 2,874 0 12,874 10,961
1987 10,000 3,629 0 13,629 11,391
1988 10,000 4,557 0 14,557 11,862
1989 10,000 5,840 0 15,840 12,452
1990 10,000 7,160 0 17,160 13,053
1991 10,000 8,345 0 18,345 13,634
1992 10,000 9,117 0 19,117 14,064
1993 10,000 9,656 0 19,656 14,454
1/31/94 10,000 9,918 0 19,918 14,635
</TABLE>
** From month-end closest to the initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on April 15,
1983, the net amount invested in shares of the Money Market Portfolio was
$10,000. The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends for the period covered (that is,
their cash value at the time they were reinvested) amounted to $19,918. If
distributions had not been reinvested, the amount of distributions earned
from the Portfolio over time would have been smaller and the cash payments
(dividends) for the period would have come to $6,911. The Portfolio did
not distribute any capital gains during the period.
The U.S. Treasury Portfolio's cumulative total returns and average annual
returns for the fiscal periods ended January 31, 1994 were as follows:
Historical Portfolio Results
<TABLE>
<CAPTION>
<S> <C> <C> <C>
One-Year Five-Year Ten Year
Average Annual Total Returns 2.651% 5.55% 6.49%
Cumulative Total Returns 2.651% 31.00% 87.4%
</TABLE>
The following chart shows the income and capital elements of the U.S.
Treasury Portfolio's year-by-year total returns for the period August 31,
1983 through January 31, 1994 as compared to the cost of living measured by
the Consumer Price Index over the same period.
During the period from August 31, 1983 through January 31, 1994, a
hypothetical investment of $10,000 in the U.S. Treasury Portfolio would
have grown to $19,462 assuming all dividends were reinvested.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Period Initial Value of Value of Total Consumer
Ended $10,000 Reinvested Reinvested Value Price
7/31 Investment Dividends Capital Gains Index**
*1983 $10,000 $0 $0 $10,000 $10,000
1984 10,000 884 0 10,884 10,389
1985 10,000 1,841 0 11,841 10,758
1986 10,000 2,688 0 12,688 10,928
1987 10,000 3,425 0 13,425 11,357
1988 10,000 4,291 0 14,291 11,826
1989 10,000 5,526 0 15,526 12,415
1990 10,000 6,805 0 16,805 13,014
1991 10,000 7,929 0 17,929 13,593
1992 10,000 8,692 0 18,602 14,022
1993 10,000 9,211 0 19,211 14,411
1/31/94 10,000 9,462 0 19,462 14,591
</TABLE>
* From August 31, 1983 through July 31, 1984.
** From month-end closest to the initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on August
31, 1983 the net amount invested in shares of the U.S. Treasury Portfolio
was $10,000. The cost of the initial investment ($10,000) together with
the aggregate cost of reinvested dividends for the period covered (that is,
their cash value at the time they were reinvested) amounted to
$19,462 . If distributions had not been reinvested, the amount of
distributions earned from the U.S. Treasury Portfolio over time would have
been smaller and the cash payments (dividends) for the period would have
come to $6,679 . The U.S. Treasury Portfolio did not distribute any
capital gains during the period.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing the Portfolios' NAV. Shareholders receiving any such securities
or other property on redemption may realize either a gain or loss for tax
purposes and will incur any costs of sale, as well as the associated
inconveniences.
Pursuant to Rule 11a-3 (the Rule) under the 1940 Act, each Portfolio is
required to give shareholders at least 60 days' notice prior to terminating
or modifying its exchange privilege. Under the Rule, the 60 day
notification requirement may be waived if (i) the only effect of a
modification would be to reduce or eliminate an administrative fee,
redemption fee or deferred sales charge ordinarily payable at the time of
exchange, or (ii) a Portfolio suspends the redemption of the shares to be
exchanged as permitted under the 1940 Act or the rules and regulations
thereunder, or the fund to be acquired suspends the sale of its shares
because it is unable to invest amounts effectively in accordance with its
investment objective and policies.
Each Portfolio has notified shareholders that it reserves the right at any
time without prior notice to refuse exchange purchases by any person or
group if, in FMR's judgment, it would be unable to invest effectively in
accordance with its investment objective and policies or would otherwise
potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and the
U.S. Postal Service cannot deliver your checks, or if your checks remain
uncashed for six months, Fidelity may reinvest your distributions at the
then-current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS. Dividends from each Portfolio will not normally qualify for the
dividends-received deduction available to corporations, since each
Portfolio's income is primarily derived from interest income and short-term
capital gains. Depending upon state law, a portion of each Portfolio's
dividends attributable to interest income derived from U.S. government
securities may be exempt from state and local taxation. The Portfolios
will provide information on the portion of each Portfolio's dividends, if
any, that qualify for this exemption.
CAPITAL GAIN DISTRIBUTIONS. Each Portfolio may distribute short-term
capital gains once a year or more often as necessary to maintain its net
asset value at $1.00 per share or to comply with distribution requirements
under federal tax law. The Portfolios do not anticipate earning long-term
capital gains on securities.
TAX STATUS OF FUND. Each Portfolio has qualified and intends to qualify as
a "regulated investment company" under the Internal Revenue Code of 1986,
as amended (the Code), so that neither Portfolio will be liable for federal
income or excise taxes on net investment income or capital gains to the
extent that these are distributed to shareholders in accordance with
applicable provisions of the Code.
STATE AND LOCAL TAX ISSUES. For mutual funds organized as business trusts,
most states' laws provide a pass-through of the state and local income tax
exemption afforded to direct owners of U.S. government securities.
Therefore, for residents of most states, the tax treatment of your dividend
distributions from the Portfolio will be the same as if you directly owned
your proportionate share of the Portfolio's securities. Thus, because the
income earned on most U.S. government securities in which the Portfolio
invests is exempt from state and local income taxes in most states, the
portion of your dividends from the Portfolio attributable to these
securities will also be free from income taxes in those states. The
exemption from state and local income taxation does not preclude states
from asserting other taxes on the ownership of U.S. government securities.
FMR
FMR is a wholly owned subsidiary of FMR Corp., a parent company organized
in 1972. At present, the principal operating activities of FMR Corp. are
those conducted by three of its divisions as follows: Fidelity Service
Company, which is the transfer and shareholder servicing agent for certain
of the funds advised by FMR; Fidelity Investments Institutional Operations
Company, which performs shareholder servicing functions for certain
institutional customers; and Fidelity Investments Retail Marketing Company,
which provides marketing services to various companies within the Fidelity
organization.
Several affiliates of FMR are also engaged in the investment advisory
business. Fidelity Management Trust Company (FMTC), provides trustee,
investment advisory, and administrative services to retirement plans and
corporate employee benefit accounts. Fidelity Management & Research
(U.K.) Inc. (FMR U.K.) and Fidelity Management & Research (Far East)
Inc. (FMR Far East), both wholly owned subsidiaries of FMR formed in 1986,
supply investment research, and may supply portfolio management services,
to FMR in connection with certain funds advised by FMR. Analysts employed
by FMR, FMR U.K., and FMR Far East research and visit thousands of domestic
and foreign companies each year. FMR Texas Inc., a wholly owned subsidiary
of FMR formed in 1989, supplies portfolio management and research services
in connection with certain money market funds advised by FMR.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the Fund are listed below. Except
as indicated, each individual has held the office shown or other offices in
the same company for the last five years. Trustees and officers elected or
appointed prior to the Trust's conversion to a Delaware business trust
served the Massachusetts business trust in identical capacities. All
persons named as Trustees and officers also serve in similar capacities for
other funds advised by FMR. Unless otherwise noted, the business address
of each Trustee and officer is 82 Devonshire Street, Boston, MA 02109,
which is also the address of FMR. Those Trustees who are "interested
persons" (as defined in the 1940 Act) by virtue of their affiliation with
either the Fund or FMR are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d, Trustee and President, is Chairman, Chief Executive
Officer and a Director of FMR Corp.; a Director and Chairman of the Board
and of the Executive Committee of FMR; Chairman and a Director of FMR Texas
Inc. (1989), Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD, Trustee and Senior Vice President, is President of FMR;
and President and a Director of FMR Texas Inc. (1989), Fidelity Management
& Research (U.K.) Inc. and Fidelity Management & Research (Far
East) Inc.
RALPH F. COX, 200 Rivercrest Drive, Fort Worth, TX, Trustee (1991), is
President of Greenhill Petroleum Corporation (petroleum exploration and
production, 1990). Prior to his retirement in March 1990, Mr. Cox was
President and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of Bonneville Pacific
Corporation (independent power, 1989) and CH2M Hill Companies
(engineering). In addition, he served on the Board of Directors of the
Norton Company (manufacturer of industrial devices, 1983-1990) and
continues to serve on the Board of Directors of the Texas State Chamber of
Commerce, and is a member of advisory boards of Texas A&M University
and the University of Texas at Austin.
PHYLLIS BURKE DAVIS, P.O Box 264 Bridgehampton, NY, Trustee (1992). Prior
to her retirement in September 1991, Mrs. Davis was the Senior Vice
President of Corporate Affairs of Avon Products, Inc. She is currently a
Director of BellSouth Corporation (telecommunications), Eaton Corporation
(manufacturing, 1991), and the TJX Companies, Inc. (retail stores, 1990),
and previously served as a Director of Hallmark Cards, Inc. (1985-1991) and
Nabisco Brands, Inc. In addition, she serves as a Director of the New York
City Chapter of the National Multiple Sclerosis Society, and is a member of
the Advisory Council of the International Executive Service Corps. and the
President's Advisory Council of The University of Vermont School of
Business Administration.
RICHARD J. FLYNN, 77 Fiske Hill, Sturbridge, MA, Trustee, is a financial
consultant. Prior to September 1986, Mr. Flynn was Vice Chairman and a
Director of the Norton Company (manufacturer of industrial devices). He is
currently a Director of Mechanics Bank and a Trustee of College of the Holy
Cross and Old Sturbridge Village, Inc.
E. BRADLEY JONES, 30195 Chagrin Blvd., Suite 104W, Pepper Pike, OH, Trustee
(1990). Prior to his retirement in 1984, Mr. Jones was Chairman and Chief
Executive Officer of LTV Steel Company. Prior to May 1990, he was Director
of National City Corporation (a bank holding company) and National City
Bank of Cleveland. He is a Director of TRW Inc. (original equipment and
replacement products), Cleveland-Cliffs Inc (mining), NACCO Industries,
Inc. (mining and marketing), Consolidated Rail Corporation, Birmingham
Steel Corporation (1988), Hyster-Yale Materials Handling, Inc. (1989), and
RPM, Inc. (manufacturer of chemical products, 1990). In addition, he
serves as a Trustee of First Union Real Estate Investments; Chairman of the
Board of Trustees and a member of the Executive Committee of the Cleveland
Clinic Foundation, a Trustee and a member of the Executive Committee of
University School (Cleveland), and a Trustee of Cleveland Clinic Florida.
DONALD J. KIRK, 680 Steamboat Road, Apartment #1-North, Greenwich, CT,
Trustee, is a Professor at Columbia University Graduate School of Business
and a financial consultant. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance), and Valuation Research Corp.(appraisals and
valuations, 1993). In addition, he serves as Vice Chairman of the Board
of Directors of the National Arts Stabilization Fund and Vice Chairman of
the Board of Trustees of the Greenwich Hospital Association.
*PETER S. LYNCH, Trustee (1990) is Vice Chairman of FMR (1992). Prior to
his retirement on May 31, 1990, he was a Director of FMR (1989) 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). He is a Director of
W.R. Grace & Co. (chemicals, 1989) and Morrison Knudsen Corporation
(engineering and constructi on). 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
(1990).
GERALD C. McDONOUGH, 135 Aspenwood Drive, Cleveland, OH, Trustee (1989), is
Chairman of G.M. Management Group (strategic advisory services). Prior to
his retirement in July 1988, he was Chairman and Chief Executive Officer of
Leaseway Transportation Corp. (physical distribution services). Mr.
McDonough is a Director of ACME-Cleveland Corp. (metal working,
telecommunications and electronic products), Brush-Wellman Inc. (metal
refining), York International Corp. (air conditioning and refrigeration,
1989), and Commercial Intertech Corp. (water treatment equipment, 1992).
and associated Estates Realty Corporation (a real estate investment trust,
199 3).
EDWARD H. MALONE, 5601 Turtle Bay Drive #2104, Naples, FL, Truste e.
Prio r to his retirement in 1985, Mr. Malone was Chairman, General
Electric Investment Corporation and a Vice President of General Electric
Company. He is a Director of Allegheny Power Systems, Inc. (electric
utility), General Re Corporation (reinsurance) and Mattel Inc. (toy
manufacturer). He is also a Trustee of Rensselaer Polytechnic Institute
and of Corporate Property Investors and a member of the Advisory Boards of
Butler Capital Corporation Funds and Warburg, Pincus Partnership Funds.
MARVIN L. MANN, 55 Railroad Avenue, Greenwich, CT, Trustee (1933) is
Chairman of the Board, President, and Chief Executive Officer of Lexmark of
Lexmark International, Inc. (office machines, 1991). Prior to 1991, he
held the positions of Vice President of International Business Machines
Corporation ("IBM") and President and General Manager of various IBM
divisions and subsidiaries. Mr. Mann is a director of M.A Hanna Company
(chemicals, 1993) and 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 (1990).
THOMAS R. WILLIAMS, 21st Floor, 191 Peachtree Street, N.E., Atlanta, GA,
Trustee, is President of The Wales Group, Inc. (management and financial
advisory services). Prior to retiring in 1987, Mr. Williams served as
Chairman of the Board of First Wachovia Corporation (bank holding company),
and Chairman and Chief Executive Officer of The First National Bank of
Atlanta and First Atlanta Corporation (bank holding company). He is
currently a Director of 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. (1989), and AppleSouth, Inc.
(restaurants, 1992).
GARY L. FRENCH, Treasurer (1991). Prior to becoming Treasurer of the
Fidelity funds, Mr. French was Senior Vice President, Fund Accounting -
Fidelity Accounting & Custody Services Co. (1991); Vice President, Fund
Accounting - Fidelity Accounting & Custody Services Co. (1990); and
Senior Vice President, Chief Financial and Operations Officer - Huntington
Advisers, Inc. (1985-1990).
ARTHUR S. LORING, Secretary, is Senior Vice President and General Counsel
of FMR, Vice President-Legal of FMR Corp., and Clerk of FDC.
LELAND BARRON, Vice President (1993) is also Vice President of other funds
advised by FMR and an employee of FMR Texas Inc.
JOHN TODD, Vice President (1992), is also Vice President of other funds
advised by FMR and an employee of FMR Texas Inc.
THOMAS D. MAHER, is Assistant Vice President of Fidelity's money market
funds and Vice President and Associate General Counsel of FMR Texas Inc.
(1990).
Under a retirement program which became effective November 1, 1989, a
Trustee, upon reaching age 72, becomes eligible to participate in a defined
benefit retirement program under which he receives payments during his
lifetime from the Portfolios based on his final year's basic trustees fees
and length of service. Currently, Messrs. Robert L. Johnson, William R.
Spaulding, Bertram H. Witham, and David L. Yunich participate in the
program. On July 31, 1993, the Trustees and officers of the Fund as a group
own less than 1% of each Portfolio's outstanding shares.
MANAGEMENT CONTRACTS
Each Portfolio employs FMR to furnish investment advisory and other
services. Under its Management Contract with each Portfolio, approved by
shareholders at their August 24, 1989 meeting, FMR acts as investment
adviser and, subject to the supervision of the Board of Trustees, directs
the investments of each Portfolio in accordance with its investment
objective, policies and limitations.
FMR also provides each Portfolio with all necessary office facilities and
personnel for servicing the Portfolio's investments, and compensates all
officers all Fund, all Trustees who are "interested persons" of the Fund or
of FMR, and all personnel of each Portfolio or FMR performing services
relating to research, statistical and investment activities. In addition,
FMR or its affiliates, subject to the supervision of the Board of Trustees,
provide the management and administrative services necessary for the
operation of each Portfolio. These services include providing facilities
for maintaining each Portfolio's organization, supervising relations with
custodians, transfer and pricing agents, accountants, underwriters and
other persons dealing with each Portfolio, preparing all general
shareholder communications and conducting shareholder relations,
maintaining each Portfolio's records and the registration of each
Portfolio's shares under federal and state laws, developing management and
shareholder services for each Portfolio and furnishing reports, evaluations
and analyses on a variety of subjects to the Trustees.
In addition to the management fees payable to FMR and the fees payable to
its transfer agent, each Portfolio pays all of its expenses, without
limitation, including typesetting, printing and mailing proxy material to
existing shareholders, legal expenses and the fees of the custodian and
auditor. (Effective June 1, 1989, FIIOC, the Portfolios' transfer agent
assumed payment of expenses of typesetting, printing and mailing of
Prospectuses and Statements of Additional Information and reports to
existing shareholders. There is no assurance that such an arrangement will
continue beyond the terms of the Portfolios' current transfer agent
agreements.) (See "Contracts with Companies Affiliated with FMR.") Other
expenses paid by the Portfolios include each Portfolio's proportionate
share of insurance premiums and Investment Company Institute dues, and
costs of registering shares under federal and state securities laws. The
Portfolios are also liable for such nonrecurring expenses as may arise,
including costs of litigation to which a Portfolio is a party, and any
obligation they may have to indemnify the officers and Trustees with
respect to such litigation.
For these services, each Portfolio pays FMR a monthly management fee at the
annual rate of .50% of the average net assets of that Portfolio throughout
the month. For the fiscal years ended July 31, 1993, 1992 and 1991, FMR
received fees amounting to $7,773.471, $8,206,375 and $8,057,006,
respectively, from Money Market Portfolio and $14,208,606, $10,958,456 and
$8,076,247, respectively, from U.S. Treasury Portfolio.
Effective October 14, 1988, FMR voluntarily agreed to waive all or a
portion of its management fee or reimburse each Portfolio to the extent
that its aggregate operating expenses, including management fees, were in
excess of an annual rate of .65% of average net assets. 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.
To comply with the California Code of Regulations, FMR will reimburse a
Portfolio if and to the extent that a Portfolio's aggregate annual
operating expenses exceed specified percentages of its average net assets.
The applicable percentages are 2 1/2% of the first $30 million, 2% of the
next $70 million, and 1 1/2% of average net assets in excess of $100
million. When calculating a Portfolio's expenses for purposes of this
regulation, a Portfolio may exclude interest, taxes, brokerage commissions,
and extraordinary expenses, as well as a portion of its distribution plan
expenses and for Money Market Portfolio, custodian fees attributable to
investments in foreign securities.
SUB-ADVISER. FMR has entered into a sub-advisory agreement with FMR Texas
Inc. (FMR Texas) pursuant to which FMR Texas has primary responsibility for
providing portfolio investment management services to the Portfolios.
Under the sub-advisory agreements, FMR pays FMR Texas fees equal to 50% of
the management fee retained by FMR under its management contracts with the
Portfolios, after payments by FMR pursuant to the Portfolios' 12b-1 plan.
The fees paid to FMR Texas are not reduced by any voluntary or mandatory
expense reimbursements that may be in effect from time to time. For the
fiscal years ended July 31 1993, 1992, and 1991 FMR paid FMR Texas fees
that amounted to $1,726,876, $1,825,881, and $1,775,118, for Money Market
Portfolio and $2,400,702, $1,934,302, and $1,483,943 for U.S. Treasury
Portfolio.
CONTRACTS WITH COMPANIES AFFILIATED WITH FMR
FIIOC is the transfer, dividend-paying and shareholder servicing agent for
each Portfolio and maintains shareholder records. FIIOC receives a per
account fee and a monetary transaction fee of $65 and $14, respectively, or
$60 and $12, respectively, depending on the nature of services provided.
Fees for institutional retirement plan accounts, if any, would be based on
the NAV of all such accounts in a Portfolio.
In addition, FIIOC pays out-of-pocket expenses associated with providing
transfer agent services, and bears the expense of typesetting, printing and
mailing Prospectuses, Statements of Additional Information, reports,
notices and statements to shareholders. Transfer agent fees and expenses
for the fiscal years ended July 31, 1993, 1992 and 1991 were $1,220,834,
$938,144, and $1,060,757, respectively, for Money Market Portfolio,
$1,310,256, $915,597, and $909,265, respectively, for U.S. Treasury
Portfolio.
Service performs the calculations necessary to determine each Portfolio's
NAV and dividends, and maintains each Portfolio's accounting records.
Prior to July 1, 1991, the annual fee for these pricing and bookkeeping
services was based on two schedules, one pertaining to each Portfolio's
average net assets, and one pertaining to the type and number of
transactions each Portfolio made. The fee rates in effect as of July 1,
1991 are based on each Portfolio's average net assets, specifically .0175%
for the first $500 million of average net assets and .0075% for average net
assets in excess of $500 million. The fee is limited to a minimum of
$20,000 and a maximum of $750,000 per year. For the fiscal 1993, 1992 and
1991, the fees paid to Service for pricing and bookkeeping services
(including related out-of-pocket expenses) were $167,470 $175,549, and
$180,185, respectively, for Money Market Portfolio, and $263,327 $217,831,
and $158,474, respectively, for U.S. Treasury Portfolio.
Prior to December 5, 1991, FMTC served as the custodian of the assets of
Money Market Portfolio. FMTC, an affiliate of FMR, was organized as a
Massachusetts bank in 1981. FMTC is an FDIC insured bank, but is not a
member of the Federal Reserve System. FMTC also provides investment
management and certain fiduciary services to employee benefit plans of
large to mid-sized domestic companies. For services as custodian, FMTC was
compensated according to an annual fee based upon average net assets for
each month and received fees for security transactions. Effective December
5, 1991, Morgan Guaranty Trust Company of New York is the custodian of
Money Market Portfolio's assets.
For the period August 1, 1991 through December 4, 1991, and the fiscal year
ended July 31, 1991, FMTC received fees amounting to $78,817 and $96,022,
respectively, for its services as custodian for Money Market Portfolio.
Each Portfolio has a Distribution Agreement with Distributors, a wholly
owned subsidiary of FMR, organized as a Massachusetts corporation on July
18, 1960. Distributors is a broker-dealer registered under the Securities
Exchange Act of 1934 and a member of the National Association of Securities
Dealers, Inc. The Distribution Agreement calls for Distributors to use all
reasonable efforts, consistent with its other business, to secure
purchasers for shares of each Portfolio, which are offered continuously.
Promotional and administrative expenses in connection with the offer and
sale of shares are paid by FMR.
DISTRIBUTION AND SERVICE PLANS
Each Portfolio or class, as the case may be has adopted a Distribution and
Service Plan (the Plan) under Rule 12b-1 (the Rule) under the 1940 Act.
The Rule provides in substance that a mutual fund may not engage directly
or indirectly in financing any activity that is primarily intended to
result in the sale of its shares except pursuant to a plan adopted by the
fund under the Rule. The Fund's Board of Trustees has adopted each Plan to
allow FMR to incur certain expenses that may be deemed, in some cases, to
constitute direct or indirect payment by the Portfolios or class of
distribution expenses.
Ea ch Plan requires FMR to make payments to certain third parties
(Qualified Recipients), other than Distributors, for assistance in selling
shares or for providing shareholder support services. The Plan authorizes
FMR to make such payments from its management fees, its past profits or any
other source available to it; provided that such payments cannot exceed the
amount of each Portfolio's management fee. The maximum amount payable to
Qualified Recipients under the Plan, as determined by the Board of
Trustees, is currently at the annual rate of .38% of the average net asset
value of Portfolio shares to which that Qualified Recipient is related.
The percentage amount payable varies according to the aggregate dollar
level of assets to which a Qualified Recipient is related in any Portfolio
of Daily Money Fund and in Daily Tax-Exempt Money Fund, another fund
advised by FMR.
QUALIFIED RECIPIENTS. Qualified Recipients are broker-dealers, banks or
other parties with whom Distributors has entered into written Service
Contracts and who assist or have assisted in selling shares of the Fund or
who provide shareholder support services. Under the Plan, payments may be
made to Qualified Recipients with respect to Portfolio shares to which the
Qualified Recipient is related, that is, shares owned by shareholders for
whom the Qualified Recipient is the dealer of record or holder of record,
the investment adviser, or a custodian; for whom the Qualified Recipient
was instrumental in the purchase of shares; or with whom the Qualified
Recipient has a servicing relationship. Should a shareholder cease to be a
client of a Qualified Recipient, but continue to hold shares of the
Portfolios, the Qualified Recipient would no longer be entitled to payments
under the Plan.
Functions of Qualified Recipients may include, among other things, services
rendered in the distribution of Portfolio shares, answering routine client
inquiries regarding the Portfolios, providing necessary facilities and
personnel to establish and maintain shareholder records, processing
purchase and redemption transactions, processing automatic investment and
redemption of client cash account balances, assisting clients in changing
dividend options, account registrations and addresses, performing
sub-accounting, arranging for bank wires, and providing such other services
as the Portfolios may reasonably request, to the extent the Qualified
Recipient is permitted to do so by applicable statute, rule or regulation.
The Plan also permits Qualified Recipients to pay the costs of advertising,
implementing activities under the Plan, and printing and distributing
Prospectuses, Statements of Additional Information and sales literature to
prospective investors.
The fees to be paid to Qualified Recipients, and the basis on which payment
is made, are determined by Distributors and/or FMR; provided, however, that
a majority of the Board of Trustees, including a majority of those Trustees
who are not "interested persons" of the Fund and have no direct or indirect
interest in the operations of the Plan or any related agreements (the
Independent Trustees) may at any time and from time to time decrease the
maximum percentage amount and/or maximum total amount payable to Qualified
Recipients with respect to the shares to which they are related, or remove
any person as a Qualified Recipient. Amounts payable under the Plan are
payable to Distributors, which pays such amounts to the Qualified
Recipients. A report of amounts expended under the Plan must be made to
the Board of Trustees at least quarter ly.
The Glass-Steagall Act generally prohibits federally and state chartered or
supervised banks from engaging in the business of underwriting, selling or
distributing securities. Although the scope of this prohibition under the
Glass-Steagall Act has not been clearly defined in Distributors' opinion it
should not prohibit banks form being paid for shareholder servicing and
recordkeeping functions as a Qualified Recipient. Distributors will engage
banks as Qualified Recipients only to perform such functions. However,
changes in federal or state statutes and regulations pertaining to the
permissible activities of banks and their affiliates or subsidiaries, as
well as further judicial or administrative decisions or interpretations,
could prevent a bank from continuing to perform all or a part of the
contemplated services. If a bank were prohibited from so acting, the
Trustees would consider what actions, if any, would be necessary to
continue to provide efficient and effective shareholder services. In such
event, changes in the operation of the Portfolios might occur, including
possible termination of any automatic investment or redemption or other
services then being provided by the bank. It is not expected that
shareholders would suffer any adverse financial consequences as a result of
any of these occurrences. The Portfolios may execute portfolio
transactions with and purchase securities issued by depository institutions
that act as Qualified Recipients. No preference will be shown in the
selection of investments for the instruments of depository institutions
acting as Qualified Recipients under the Plan. In addition, state
securities laws on this issue may differ from the interpretations of
federal law expressed herein, and banks and financial institutions may be
required to register as dealers pursuant to state law.
Pursuant to Rule 12b-1, the Plan together with any related agreements has
been approved by a majority vote of the Trustees, including the Independent
Trustees, cast in person at a meeting held for the purpose of voting on
such an agreement. As required by the Rule, the Trustees carefully
considered all pertinent factors relating to the implementation of the Plan
prior to its approval, and have determined that there is a reasonable
likelihood that the Plan will benefit the Portfolios and its shareholders.
The Plan was also approved by vote of a majority of the outstanding shares
of each Portfolio on April 27, 1984.
Under its terms, the Plan shall remain in effect from year to year as long
as such continuance is approved at least annually by a vote of a majority
of the Trustees and of the Independent Trustees. The Plan may not be
amended to increase materially the amount to be spent for distribution
without the approval of a majority of the outstanding shares of each
Portfolio, and may not be materially amended in any case without a vote of
a majority of the Trustees and of the Trustees who are not "interested
persons" of the Fund or FMR. So long as the Plan is in effect, the
selection and nomination of the Trustees who are not interested persons of
the Fund shall be committed to the discretion of the Trustees who are not
interested persons of the Fund. The Plan may be terminated at any time by
vote of a majority of the Independent Trustees, or by vote of a majority of
the outstanding shares of each Portfolio, and terminates automatically in
the event of its assignment.
DESCRIPTION OF THE FUND
FUND ORGANIZATION. Money Market Portfolio and U.S. Treasury Portfolio are
portfolios of Fidelity Daily Money Fund, an open-end management investment
company organized as a Delaware business trust on September 29, 1993. The
Portfolios acquired all of the assets of the Money Market Portfolio and
U.S. Treasury Portfolio, respectively, portfolios of Daily Money Fund, a
Massachusetts business trust. The Declaration of Trust permits the
Trustees to create additional series (or portfolios). Currently, there are
six Portfolios of the Fund: U.S. Treasury Portfolio; Money Market
Portfolio; Fidelity U.S. Treasury Income Portfolio; and Capital Reserves:
Money Market Portfolio, U.S. Government Portfolio and Municipal Money
Market Portfolio. The Trust Instrument permits the Trustees to create
additional portfolios.
In the event that FMR ceases to be the investment adviser to the Fund or a
Portfolio, the right of the Fund or Portfolio to use the identifying name
"Fidelity" may be withdrawn. There is a remote possibility that one
Portfolio might become liable for any misstatement in its prospectus or
statement of additional information about another Portfolio.
The assets of the Fund received for the issue or sale of shares of each
Portfolio and all income, earnings, profits, and proceeds thereof, subject
only to the rights of creditors, are especially allocated to such
Portfolio, and constitute the underlying assets of such Portfolio. The
underlying assets of each Portfolio are segregated on the books of account,
and are to be charged with the liabilities with respect to such Portfolio
and with a share of the general expenses of the Fund. Expenses with
respect to the Fund are to be allocated in proportion to the asset value of
the respective Portfolios, except where allocations of direct expense can
otherwise be fairly made. The officers of the Fund, subject to the general
supervision of the Board of Trustees, have the power to determine which
expenses are allocable to a given Portfolio, or which are general or
allocable to all of the Portfolios. In the event of the dissolution or
liquidation of the Fund, shareholders of each Portfolio are entitled to
receive as a class the underlying assets of such Portfolio available for
distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. The Fund is a business trust organized
under Delaware law. Delaware law provides that shareholders shall be
entitled to the same limitations of personal liability extended to
stockholders of private corporations for profit. The courts of some
states, however, may decline to apply Delaware law on this point. The
Trust Instrument contains an express disclaimer of shareholder liability
for the debts, liabilities, obligations, and expenses of the Fund and
requires that a disclaimer be given in each contract entered into or
executed by the Fund or the Trustees. The Trust Instrument provides for
indemnification out of a portfolio's property of any shareholders held
personally liable for the obligations of the portfolio. The Trust
Instrument also provides that each portfolio shall, upon request, assume
the defense of any claim made against any shareholder for any act or
obligation of the portfolio and satisfy any judgment thereon. Thus, the
risk of a shareholder incurring financial loss on account of shareholder
liability is limited to circumstances in which Delaware law does not apply,
no contractual limitation of liability was in effect, and the portfolio is
unable to meet its obligations. FMR believes that, in view of the above,
the risk of personal liability to shareholders is remote.
The Trust Instrument further provides that the Trustees, if they have
exercised reasonable care, shall not be personally liable to any person
other than the Trust or its shareholders; moreover, the Trustees shall not
be liable for any conduct whatsoever, provided that a Trustee is not
protected against any liability to which he would otherwise be subject of
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of his office.
VOTING RIGHTS. Each Portfolio's capital consists of shares of beneficial
interest. The shares have no preemptive or conversion rights; the voting
and dividend rights, the right of redemption, and the privilege of exchange
are described in the Prospectus. Shares are fully paid and nonassessable,
except as set forth under the heading "Shareholder and Trustee Liability"
above. Shareholders representing 10% or more of the Fund or a Portfolio
may, as set forth in the Trust Instrument, call meetings of the Fund or a
Portfolio for any purpose related to the Fund or Portfolio, as the case may
be, including, in the case of a meeting of the entire Fund, the purpose of
voting on removal of one or more Trustees.
The Fund or any Portfolio may be terminated upon the sale of its assets to
another open-end management investment company, or upon liquidation and
distribution of its assets to, or merger with another open-end management
investment company or series thereof, or upon liquidation and distribution
of its assets. Generally such terminations must be approved by vote of the
holders of a majority of the outstanding shares of the Trust or the
portfolio; however, the Trustees may, without prior shareholder approval,
change the form of organization of the Trust by merger, consolidation, or
incorporation. If not so terminated or reorganized, the Trust and its
portfolios will continue indefinitely.
Under the Trust Instrument, the Trustees may, without shareholder vote,
cause the Trust to merge or consolidate into one or more trusts,
partnerships, or corporations, or cause the Trust to be incorporated under
Delaware law, so long as the surviving entity is an open-end management
investment company that will succeed to or assume the Fund registration
statement. The Fund may also invest all of its assets in another
investment company.
On March 15, 1994, the following owned of record or beneficially 5% or
more of the outstanding shares of the Portfolios:
For Money Market Portfolio: Texas Commerce Bank, N.A., Houston,Texas,
owned 8.42%; Boston Financial Data Services, North Quincy, MA owned 7.04%;
Old Republic International Corp., Chicago, IL owned 5.19%..
For U.S. Treasury Portfolio: Bank of America, San Francisco, CA, owned
25.31%,; Texas Commerce Bank, N.A. Houston, Texas, owned 22.73%.
A shareholder owning of record of beneficially more than 25% of the funds
outstanding shares may be considered a controlling person. Their votes
could have a more significant effect on matters presented at a shareholders
meeting than votes of other shareholders.
CUSTODIA N. Morgan Guaranty Trust Company of New York, 60 Wall
Street, New York, NY, 10260 is custodian of the assets of the Fund. The
custodian is responsible for the safekeeping of the Fund's assets and the
appointment of subcustodian banks and clearing agencies. The custodian
takes no part in determining the investment policies of the Fund or in
deciding which securities are purchased or sold by the Fund. The Fund may,
however, invest in obligations of the custodian and may purchase securities
from or sell securities to the custodian.
FMR, its officers and directors, its affiliated companies, and the Fund's
Trustees may from time to time have transactions with various banks,
including banks serving as custodians for certain of the funds advised by
FMR. Transactions that have occurred to date include mortgages and
personal and general business loans. In the judgment of FMR, the terms and
conditions of those transactions were not influenced by existing or
potential custodial or other Fund relationships.
AUDITOR. Coopers & Lybrand 1999 Bryan Street, Dallas, TX 75201, serves
as the Fund's independent accountant. The auditor examines financial
statements for the funds and provides other audit, tax, and related
services.
APPENDIX
The descriptions that follow are examples of eligible ratings for the
Portfolios. The Portfolios may, however, consider the ratings for other
types of investments and the ratings assigned by other rating organizations
when determining the eligibility of a particular investment.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S COMMERCIAL PAPER RATING:
PRIME-1 - issuers (or related institutions) have a superior capacity for
repayment of short-term promissory obligations.
Prime -1 repayment capacity will normally be evidenced by the following
characteristics:
Leading market positions in well established industries.
High rates of return on funds employed.
Conservative capitalization structures with moderate reliance on debt and
ample asset protection.
Broad margins in earnings coverage of fixed financial charges with high
internal cash generation.
Well-established access to a range of financial markets and assured
sources of alternate liquidity.
PRIME-2 - Issuers (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited in the Prime-1
rating but to a lesser degree. Earnings trends and coverage ratios, while
sound, will be more subject to variation. Capitalization characteristics,
while still appropriate, may be more affected by external conditions.
Ample alternative liquidity is maintained.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S CORPORATE BOND RATINGS:
AAA- Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally
referred to as "gilt edge." Interest payments are protected by a large or
by an exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position of
such issuers.
AA - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long term risks appear somewhat
larger than in Aaa securities.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S COMMERCIAL PAPER RATING:
A-1 - This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics will be denoted with a plus (+)
sign designation.
A-2 - Capacity for timely payment on issues with this designation is
strong. However, the relative degree of safety is not as high as for
issues designated A-1.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S CORPORATE BOND RATINGS:
AAA - This is the highest rating assigned by Standard & Poor's to a
debt obligation and indicates an extremely strong capacity to pay principal
and interest.
AA - Bonds rated AA also qualify as high quality debt obligations.
Capacity to pay principal and interest is very strong, and in the majority
of instances they differ from AAA issues only in small degree.
U.S. TREASURY PORTFOLIO - CLASS B
A PORTFOLIO OF DAILY MONEY FUND
STATEMENT OF ADDITIONAL INFORMATION
This Statement is not a prospectus but should be read in conjunction with
the Fund's current Prospectus (dated June 30, 1994). The Portfolio offers
shares to individual institutional and corporate investors ("Initial
Shares"). The Portfolio also offers shares by exchange to investors in
Class B shares of certain Fidelity Advisor Funds ("Class B Shares"). This
statement offers Class B Shares. Please retain this Statement for future
reference. To obtain an additional copy of this Statement or of the
Prospectus and Annual Report, please call Fidelity nationwide at
800-843-3001. If you are investing through a financial institution,
contact that institution directly.
TABLE OF CONTENTS
Page
Investment Policies and Limitations 2
Portfolio Transactions 7
Valuation of Portfolio Securities 8
Performance 8
Additional Purchase and Redemption Information 11
Distributions and Taxes 11
FMR 11
Trustees and Officers 12
Management Contracts 13
Contracts With Companies Affiliated With FMR 14
Distribution and Service Plan 15
Description of the Fund 16
Appendix 18
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
SUB-ADVISOR
FMR Texas Inc. (FMR Texas)
DISTRIBUTOR
Fidelity Distributors Corporation (Distributors)
TRANSFER AGENT
Fidelity Investments Institutional Operations Company (FIIOC)
CUSTODIAN
Morgan Guaranty Trust Company of New York
June 30, 1994
DMF-sai-594
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of the Portfolio's assets that may
be invested in any security or other asset, or sets forth a policy
regarding quality standards, such standard or percentage limitation shall
be determined immediately after and as a result of the Portfolio's
acquisition of such security or other asset. Accordingly, any subsequent
change in values, net assets, or other circumstances will not be considered
when determining whether the investment complies with the Portfolio's
investment policies and limitations.
The Portfolio's fundamental investment policies and limitations may not be
changed without approval by a "majority of the outstanding voting
securities" as defined in the Investment Company Act of 1940 (the 1940 Act)
of the Portfolio.
INVESTMENT LIMITATIONS
THE FOLLOWING ARE U.S. TREASURY PORTFOLIO'S FUNDAMENTAL INVESTMENT
LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE PORTFOLIO MAY NOT:
(1) purchase the securities of any issuer (other than obligations issued or
guaranteed as to principal and interest by the government of the United
States, its agencies or instrumentalities) if, as a result thereof more
than 5% of its total assets would be invested in the securities of such
issuer; provided, however, that with respect to 25% of its total assets,
10%, of its assets may be invested in the securities of an issuer;
(2) issue senior securities except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the Portfolio may (i) borrow money for
temporary or emergency purposes (not for leveraging or investment) and (ii)
engage in reverse repurchase agreements for any purpose; provided that (i)
and (ii) in combination do not exceed 33 1/3% of the Portfolio's total
assets (including the amount borrowed) less liabilities (other than
borrowings). Any borrowings that come to exceed this amount will be
reduced within three days (not including Sundays and holidays) to the
extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
Portfolio may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than the 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 Portfolio's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the
Portfolio from investing in securities or other instruments backed by real
estate or securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments;
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements;
(9) write or purchase any put or call options;
(10) The Portfolio may, not withstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the same
fundamental investment objective, policies and limitations as the
Portfolio.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT
SHAREHOLDER APPROVAL.
(i) The Portfolio does not currently intend to purchase a security (other
than a security issued or guaranteed by the U.S. government or any of its
agencies or instrumentalities) if, as a result, more than 5% of its total
assets would be invested in the securities of a single issuer; provided
that the Portfolio may invest up to 10% of its total assets in the first
tier securities of a single issuer for up to three business days.
(ii) The Portfolio does not currently intend to purchase the voting
securities of any issuer.
(iii) The Portfolio does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in kind and
amount to the securities sold short and provided that transactions in
futures contracts and options are not deemed to constitute selling
securities short.
(iv) Subject to revision upon 60 days' notice to shareholders, the
Portfolio does not currently intend to purchase securities on margin,
except that the Portfolio may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(v) The Portfolio may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an affiliate
serves as investment adviser or (b) by engaging in reverse repurchase
agreements with any party. The Portfolio will not purchase any security
while borrowings (excluding reverse repurchase agreements) representing
more than 5% of its total assets are outstanding. The Portfolio will not
borrow from other funds advised by FMR or its affiliates if total
outstanding borrowings immediately after such borrowing would exceed 15% of
the Portfolio's total assets.
(vi) The Portfolio does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to legal
or contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(vii) The Portfolio does not currently intend to make loans, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(viii) The Portfolio does not currently intend to (a) purchase securities
of other investment companies, except in the open market where no
commission except the ordinary broker's commission is paid, or (b) purchase
or retain securities issued by other open-end investment companies.
Limitations (a) and (b) do not apply to securities received as dividends,
through offers of exchange, or as a result of reorganization,
consolidation, or merger.
(ix) The Portfolio does not currently intend to purchase the securities of
any issuer (other than securities issued or guaranteed by domestic or
foreign governments or political subdivisions thereof) if, as a result,
more than 5% of its total assets would be invested in the securities of
business enterprises that, including predecessors, have a record of less
than three years of continuous operation.
(x) The Portfolio does not currently intend to invest in oil, gas or other
mineral exploration or development program or leases.
(xi) The Portfolio does not currently intend to purchase the securities of
any issuer if those officers and Trustees of the Fund and those officers
and directors of FMR who individually own more than 1/2 of 1% of the
securities of such issuer together own more than 5% of such issuer's
securities.
(xii) The Portfolio does not currently intend to invest all of its assets
in the securities of a single open-end management investment company with
substantially the same fundamental investment objectives, policies, and
limitations as the Portfolio.
(As an operating policy subject to change only upon approval by the Board
of Trustees and 60 days' prior notice to shareholders, the Portfolio does
not currently intend to purchase futures contracts or options on futures
contracts.)
AFFILIATED BANK TRANSACTIONS. The Portfolio may engage in transactions
with financial institutions that are, or may be considered to be,
"affiliated persons" of the fund under the Investment Company Act of 1940.
These transactions may include repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50 largest
U.S. banks (measured by deposits); municipal securities; U.S. government
securities with affiliated financial institutions that are primary dealers
in these securities; short-term currency transactions; and short-term
borrowings. In accordance with exemptive orders issued by the Securities
and Exchange Commission, the Board of Trustees has established and
periodically reviews procedures applicable to transactions involving
affiliated financial institutions.
DELAYED-DELIVERY TRANSACTIONS. The Portfolio may buy and sell securities
on a delayed-delivery or when-issued basis. These transactions involve a
commitment by the Portfolio to purchase or sell specific securities at a
predetermined price and/or yield, with payment and delivery taking place
after the customary settlement period for that type of security (and more
than seven days in the future). Typically, no interest accrues to the
purchaser until the security is delivered.
When purchasing securities on a delayed-delivery basis, the Portfolio
assumes the rights and risks of ownership, including the risk of price and
yield fluctuations. Because the Portfolio is not required to pay for
securities until the delivery date, these risks are in addition to the
risks associated with the Portfolio's other investments. If the Portfolio
remains substantially fully invested at a time when delayed-delivery
purchases are outstanding, the delayed-delivery purchases may result in a
form of leverage. When delayed-delivery purchases are outstanding, a
Portfolio will set aside appropriate liquid assets in a segregated
custodial account to cover its purchase obligations. When the Portfolio
has sold a security on a delayed-delivery basis, the Portfolio does not
participate in further gains or losses with respect to the security. If
the other party to a delayed-delivery transaction fails to deliver or pay
for the securities, the Portfolio could miss a favorable price or yield
opportunity, or could suffer a loss.
The Portfolio may renegotiate delayed-delivery transactions after they are
entered into, and may sell underlying securities before they are delivered,
which may result in capital gains or losses.
ILLIQUID INVESTMENTS. Illiquid investments are investments that cannot be
sold or disposed of in the ordinary course of business at approximately the
prices at which they are valued. Under the supervision of the Board of
Trustees, FMR determines the liquidity of each Portfolio's investments and,
through reports from FMR, the Board monitors investments in illiquid
instruments. In determining the liquidity of a Portfolio's investments,
FMR may consider various factors including (1) the frequency of trades and
quotations, (2) the number of dealers and prospective purchasers in the
marketplace, (3) dealer undertakings to make a market, (4) the nature of
the security (including any demand or tender features) and (5) the nature
of the marketplace for trades (including the ability to assign or offset
the Portfolio's rights and obligations relating to the investment).
Investments currently considered by the Portfolio to be illiquid include
repurchase agreements not entitling the holder to payment of principal and
interest within seven days. In the absence of market quotations, illiquid
investments are valued for purposes of monitoring amortized cost valuation
at fair value as determined in good faith by a committee appointed by the
Board of Trustees. If through a change in values, net assets or other
circumstances, the Portfolio were in a position where 10% or more of its
net assets were invested in illiquid securities, it would seek to take
appropriate steps to protect liquidity.
REPURCHASE AGREEMENTS. In a repurchase agreement, the Portfolio purchases
a security and simultaneously commits to resell that security to the seller
at an agreed upon price on an agreed upon date within a number of days from
the date of purchase. The resale price reflects the purchase price plus an
agreed upon incremental amount which is unrelated to the coupon rate or
maturity of the purchased security. A repurchase agreement involves the
obligation of the seller to pay the agreed upon price, which obligation is
in effect secured by the value (at least equal to the amount of the agreed
upon resale price and marked to market daily) of the underlying security.
The Portfolio may engage in repurchase agreements with respect to any
security type in which it is authorized to invest. While it does not
presently appear possible to eliminate all risks from these transactions
(particularly the possibility of a decline in the market value of the
underlying securities, as well as delays and costs to the Portfolio in
connection with bankruptcy proceedings), it is the policy of the Portfolio
to limit repurchase agreement transactions to those parties whose
creditworthiness has been reviewed and found satisfactory by FMR.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, the
Portfolio sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the Portfolio will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement.
The Portfolio will enter into reverse repurchase agreements only with
parties whose creditworthiness has been found satisfactory by FMR. Such
transactions may increase fluctuations in the market value of the
Portfolio's assets and may be viewed as a form of leverage.
SHORT SALES "AGAINST THE BOX". The Portfolio may sell securities short
when it owns or has the right to obtain securities equivalent in kind or
amount to the securities sold short. Short sales could be used to protect
the net asset value per share of the Portfolio in anticipation of increased
interest rates, without sacrificing the current yield of the securities
sold short. If the Portfolio enters into a short sale against the box, it
will be required to set aside securities equivalent in kind and amount to
the securities sold short (or securities convertible or exchangeable into
such securities) and will be required to hold such securities while the
short sale is outstanding. The Portfolio will incur transaction costs,
including interest expense, in connection with opening, maintaining, and
closing short sales against the box.
VARIABLE OR FLOATING RATE INSTRUMENTS. The Portfolio may invest in
variable or floating rate instruments that ultimately mature in more than
397 days, if the Portfolio acquires a right to sell the securities that
meets certain requirements set forth in Rule 2a-7. Variable rate
instruments (including instruments subject to a demand feature) that mature
in 397 days or less and government securities with a variable rate of
interest adjusted no less frequently than every 762 days, may be deemed to
have maturities equal to the period remaining until the next adjustment of
the interest rate. Other variable rate instruments with demand features
may be deemed to have a maturity equal to the longer of the period
remaining until the next readjustment of the interest rate or the period
remaining until the principal amount can be recovered through demand. A
floating rate instrument subject to a demand feature may be deemed to have
a maturity equal to the period remaining until the principal amount can be
recovered through demand.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of the Portfolio by FMR (either directly or through affiliated
sub-advisers) pursuant to authority contained in the Portfolio's Management
Contract. FMR is also responsible for the placement of transaction orders
for other investment companies and accounts for which it or its affiliates
act as investment adviser. Securities purchased and sold by the Portfolio
generally will be traded on a net basis (i.e., without commission). In
selecting broker-dealers, subject to applicable limitations of the federal
securities laws, FMR will consider various relevant factors, including, but
not limited to, the size and type of the transaction; the nature and
character of the markets for the security to be purchased or sold; the
execution efficiency, settlement capability, and financial condition of the
broker-dealer firm; the broker-dealer's execution services rendered on a
continuing basis; and the reasonableness of any commissions.
The Portfolio may execute portfolio transactions with broker-dealers who
provide research and execution services to the Portfolio and/or other
accounts over which FMR or its affiliates exercise investment discretion.
Such services may include advice concerning the value of securities; the
advisability of investing in, purchasing or selling securities; the
availability of securities or the purchasers or sellers of securities;
furnishing analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy and performance of
accounts; and effecting securities transactions and performing functions
incidental thereto (such as clearance and settlement). FMR maintains a
listing of broker-dealers who provide such services on a regular basis.
However, as many transactions on behalf of the Portfolio are placed with
dealers (including broker-dealers on the list) without regard to the
furnishing of such services, it is not possible to estimate the proportion
of such transactions directed to such broker-dealers solely because such
services were provided. The selection of such broker-dealers is generally
made by FMR (to the extent possible consistent with execution
considerations) based upon the quality of research and execution services
provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the Portfolio may be useful to FMR in rendering investment
management services to the Portfolio or their other clients, and
conversely, such research provided by broker-dealers who have executed
transaction orders on behalf of other FMR clients may be useful to FMR in
carrying out its obligations to the Portfolio. The receipt of such
research has not reduced FMR's normal independent research activities;
however, it enables FMR to avoid the additional expenses that could be
incurred if FMR were to attempt to develop comparable information through
its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause
the Portfolio to pay such higher commissions, FMR must determine in good
faith that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers
viewed in terms of a particular transaction or FMR's overall
responsibilities to the Portfolio or its other clients. In reaching this
determination, FMR will not attempt to place a specific dollar value on the
brokerage and/or research services provided or to determine what portion of
the compensation should be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the Portfolio or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services
provided by and to place agency transactions with Fidelity Brokerage
Services Inc. (FBSI), subsidiary of FMR Corp., if the commissions are fair
and reasonable and comparable to commissions charged by non-affiliated
qualified brokerage firms for similar services.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, except in accordance with
regulations of the SEC. Pursuant to such regulations, the Board of
Trustees has approved a written agreement which permits FBSI to effect
portfolio transactions for the Portfolio on national securities exchanges
and to retain compensation in connection with such transactions.
The Trustees periodically review FMR's performance of its responsibilities
in connection with the placement of portfolio transactions on behalf of the
Portfolio and review commissions paid by the Portfolio over representative
periods of time to determine if they are reasonable in relation to the
benefits to the Portfolio.
From time to time, the Trustees will review whether the recapture for the
benefit of the Portfolio of some portion of the brokerage commissions or
similar fees paid by the Portfolio on portfolio transactions is legally
permissible and advisable. The Portfolio seek to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at present no
other recapture arrangements are in effect. The Trustees intend to
continue to review whether recapture opportunities are available and are
legally permissible and, if so, to determine in the exercise of their
business judgment whether it would be advisable for the Portfolio to seek
such recapture.
Although the Trustees and officers are substantially the same as those of
other funds managed by FMR, investment decisions for the Portfolio are made
independently from those of other funds managed by FMR or accounts managed
by FMR affiliates. It sometimes happens that the same security is held in
the portfolio of more than one of these funds or accounts. Simultaneous
transactions are inevitable when several funds and account are managed by
the same investment adviser, particularly when the same security is
suitable for the investment objective of more than one fund or account.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with a formula considered by the officers of the funds involved to be
equitable to each fund. In some cases this system could have a detrimental
effect on the price or value of the security as far as the Portfolio are
concerned. In other cases, however, the ability of the Portfolio to
participate in volume transactions will produce better executions and
prices for the Portfolio. It is the current opinion of the Trustees that
the desirability of retaining FMR as investment adviser to the Portfolio
outweighs any disadvantages that may be said to exist from exposure to
simultaneous transactions.
VALUATION OF PORTFOLIO SECURITIES
The Portfolio values its investments on the basis of amortized cost. This
technique involves valuing an instrument at its cost as adjusted for
amortization of premium or accretion of discount rather than its value
based on current market quotations or appropriate substitutes which reflect
current market conditions. The amortized cost value of an instrument may
be higher or lower than the price a Portfolio would receive if it sold the
instrument.
Valuing the Portfolio's instruments on the basis of amortized cost and use
of the term "money market fund" are permitted by Rule 2a-7 under the 1940
Act. The Portfolio must adhere to certain conditions under Rule 2a-7;
these conditions are summarized in the Prospectus.
The Board of Trustees of the Fund oversees FMR's adherence to SEC rules
concerning money market funds, and has established procedures designed to
stabilize the Portfolio's NAV at $1.00. At such intervals as they deem
appropriate, the Trustees consider the extent to which NAV calculated by
using market valuations would deviate from $1.00 per share. If the
Trustees believe that a deviation from the Portfolio's amortized cost per
share may result in material dilution or other unfair results to
shareholders, the Trustees have agreed to take such corrective action, if
any, as they deem appropriate to eliminate or reduce, to the extent
reasonably practicable, the dilution or unfair results. Such corrective
action could include selling portfolio instruments prior to maturity to
realize capital gains or losses or to shorten average portfolio maturity;
withholding dividends; redeeming shares in kind; establishing NAV by using
available market quotations; and such other measures as the Trustees may
deem appropriate.
During periods of declining interest rates, the Portfolio's yield based on
amortized cost may be higher than the yield based on market valuations.
Under these circumstances, a shareholder in the Portfolio would be able to
obtain a somewhat higher yield than would result if the Portfolio utilized
market valuations to determine its NAV. The converse would apply in a
period of rising interest rates.
PERFORMANCE
Initial Shares and Class B Shares may compare their respective performance
or the performance of securities in which they may invest to averages
published by IBC/USA (Publications), Inc. of Ashland, Massachusetts. These
averages assume reinvestment of distributions. The MONEY FUND AVERAGES/all
taxable, which is reported in the MONEY FUND REPORT , covers over 543 money
market funds.
The Portfolio's Performance may be compared to the performance of other
mutual funds in general, or to the performance of particular types of
mutual funds. These comparisons may be expressed as mutual fund rankings
prepared by Lipper Analytical Services, Inc. (Lipper), an independent
service located in Summit, New Jersey which monitors the performance of
mutual funds. Lipper generally ranks funds on the basis of total return,
assuming reinvestment of distributions, but does not take sales charges or
redemption fees into consideration, and is prepared without regard to tax
consequences. Lipper may also rank the Portfolio based on yield. In
addition to the mutual fund rankings, the Portfolio's performance may be
compared to mutual fund performance indices prepared by Lipper.
The Portfolio may discuss its fund number, Quotron(Registered trademark)
number, CUSIP number, and current portfolio manager.
From time to time performance also may be compared to other mutual funds
tracked by financial or business publications and periodicals. For
example, the Portfolio may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. In addition, the
Portfolio may quote financial or business publications and periodicals as
they relate to portfolio management, investment philosophy, and investment
techniques. Rankings that compare the performance of Fidelity funds to one
another in appropriate categories over specific periods of time may also be
quoted in advertising.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the Consumer Price Index), and
combinations of various capital markets. The performance of these capital
markets is based on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any
of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the
funds. Ibbotson calculates total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
Performance may also be compared to the yields of other money market
securities or averages of other money market securities as reported by the
Federal Reserve Bulletin, by TeleRate, a financial information network, or
by Salomon Brothers Inc., a broker-dealer firm, and to other fixed-income
investments such as Certificates of Deposit (CDs). The principal value and
interest rate of CDs and money market securities are fixed at the time of
purchase whereas the Portfolio's yield will fluctuate. Unlike some CDs and
certain other money market securities, money market mutual funds are not
insured by the FDIC. Investors should give consideration to the quality
and maturity of the portfolio securities of the respective investment
companies when comparing investment alternatives. The Portfolio may
reference the growth and variety of money market mutual funds and the FMR's
innovation and participation in the industry.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of the Initial Shares and Class B Shares return including the
effect of reinvesting dividends and capital gain distributions (if any).
Average annual returns are calculated by determining the growth or decline
in value of a hypothetical historical investment in the Portfolio over a
stated period and then calculating the annually compounded percentage rate
that would have produced the same results if the rate of growth or decline
in the value of the investment had been constant over that period. For
example, a cumulative return of 100% over ten years would produce an
average annual return of 7.18%, which is the steady annual rate that would
equal 100% growth on a compounded basis in ten years. While average annual
returns are a convenient means of comparing investment alternatives,
investors should realize that a Portfolio's performance is not constant
over time, but changes from year to year, and that average annual returns
represent averaged figures as opposed to the actual year-to-year
performance.
In addition to average annual returns, the Initial Shares and Class B
Shares may quote unaveraged or cumulative total returns reflecting the
simple change in the value of an investment over a stated period. Average
annual and cumulative total returns may be quoted as percentages or as
dollar amounts and may be calculated for a single investment, a series of
investments or a series of redemptions over any time period. Total returns
may be broken down into their components of income and capital in order to
illustrate the relationship of these factors and their contributions to
total return. Total returns, yields, and other performance information may
be quoted numerically or in a table, graph, or similar illustration. The
Initial Shares and Class B Shares cumulative total returns and average
annual returns for the fiscal periods ended July 31, 1993 were as follows:
U.S. Treasury Portfolio-Initial Class Shares
U.S. Treasury Portfolio-Class B Shares**
Historical Portfolio Results
One-Year Five-Year Life of Portfolio*
Average Annual Total Returns 2.78% 6.10% 6.80%
Cumulative Total Returns 2.78% 34.43% 92.11%
One-Year Five-Year Life of Portfolio*
Average Annual Total Returns -1.22% 5.94% 6.80%
Cumulative Total Returns -1.22% 33.43% 92.11%
* From August 31, 1983 through July 31, 1993.
** Average annual total returns include the effect of the maximum
applicable contingent deferred sales charge (CDSC) applicable at the end of
the stated period. Cumulative total returns do not include the effect of
the CDSC and would have been lower if it had been taken into account.
Neither total returns include the effects of Class B shares distribution
and service fees. These fees will be charged once Class B shares commence
operations. Class B shares are expected to be available on or about Mary
2, 1994.
The following chart shows the income and capital elements to year-by-year
total returns for the period August 31, 1983 through July 31, 1993 as
compared to the cost of living measured by the Consumer Price Index over
the same period.
During the period from August 31, 1983 through January 31, 1994, a
hypothetical investment of $10,000 in the Initial Shares would have grown
to $19,462 assuming all dividends were reinvested.
Period Initial Value of Value of Total Consumer
Ended $10,000 Reinvested Reinvested Value Price
7/31 Investment Dividends Capital Gains Index
1984* 10,000 884 0 10,884 10,389
1985 10,000 1,841 0 11,841 10,758
1986 10,000 2,688 0 12,688 10,928
1987 10,000 3,425 0 13,425 11,357
1988 10,000 4,291 0 14,291 11,826
1989 10,000 5,526 0 15,526 12,415
1990 10,000 6,805 0 16,805 13,014
1991 10,000 7,929 0 17,929 13,593
1992 10,000 8,692 0 18,602 14,022
1993 10,000 9,211 0 19,211 14,411
1/31/94 10,000 19,462 0 19,462 14,591
* From August 31, 1983 through July 31, 1984.
Explanatory Notes: With an initial investment of $10,000 made on August
31, 1983 the net amount invested in Initial Shares Portfolio was $10,000.
The cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends for the period covered (that is, their cash
value at the time they were reinvested) amounted to $19,462. If
distributions had not been reinvested, the amount of distributions earned
from the Initial Shares over time would have been smaller and the cash
payments (dividends) for the period would have come to $6,679. did not
distribute any capital gains during the period.
ADDITIONAL PURCHASE EXCHANGE AND REDEMPTION INFORMATION
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing NAV of the Initial Shares and Class B Shares. Shareholders
receiving any such securities or other property on redemption may realize
either a gain or loss for tax purposes and will incur any costs of sale, as
well as the associated inconveniences.
Pursuant to Rule 11a-3 (the Rule) under the 1940 Act, each Portfolio is
required to give shareholders at least 60 days' notice prior to terminating
or modifying its exchange privilege. Under the Rule, the 60 day
notification requirement may be waived if (i) the only effect of a
modification would be to reduce or eliminate an administrative fee,
redemption fee or deferred sales charge ordinarily payable at the time of
exchange, or (ii) a Portfolio suspends the redemption of the shares to be
exchanged as permitted under the 1940 Act or the rules and regulations
thereunder, or the fund to be acquired suspends the sale of its shares
because it is unable to invest amounts effectively in accordance with its
investment objective and policies.
The Portfolio has notified shareholders that it reserves the right at any
time without prior notice to refuse exchange purchases by any person or
group if, in FMR's judgment, it would be unable to invest effectively in
accordance with its investment objective and policies or would otherwise
potentially be adversely affected. Class B Shares are available only by
exchange from other Fidelity Advisor Class B Shares. Direct purchases into
the Class B Shares will not be accepted.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and the
U.S. Postal Service cannot deliver your checks, or if your checks remain
uncashed for six months, Fidelity may reinvest your distributions at the
then-current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS. Dividends from the Portfolio will not normally qualify for the
dividends-received deduction available to corporations, since the
Portfolio's income is primarily derived from interest income and short-term
capital gains. Depending upon state law, a portion of the Portfolio's
dividends attributable to interest income derived from U.S. government
securities may be exempt from state and local taxation. The Portfolio will
provide information on the portion of the Portfolio's dividends, if any,
that qualify for this exemption.
CAPITAL GAIN DISTRIBUTIONS. The Portfolio may distribute short-term
capital gains once a year or more often as necessary to maintain its net
asset value at $1.00 per share or to comply with distribution requirements
under federal tax law. The Portfolio do not anticipate earning long-term
capital gains on securities.
TAX STATUS OF FUND. The Portfolio has qualified and intends to qualify as
a "regulated investment company" under the Internal Revenue Code of 1986,
as amended (the Code), so that the Portfolio will not be liable for federal
income or excise taxes on net investment income or capital gains to the
extent that these are distributed to shareholders in accordance with
applicable provisions of the Code.
STATE AND LOCAL TAX ISSUES. For mutual funds organized as business trusts,
most states' laws provide a pass-through of the state and local income tax
exemption afforded to direct owners of U.S. government securities.
Therefore, for residents of most states, the tax treatment of your dividend
distributions from the Portfolio will be the same as if you directly owned
your proportionate share of the Portfolio's securities. Thus, because the
income earned on most U.S. government securities in which the Portfolio
invests is exempt from state and local income taxes in most states, the
portion of your dividends from the Portfolio attributable to these
securities will also be free from income taxes in those states. The
exemption from state and local income taxation does not preclude states
from asserting other taxes on the ownership of U.S. government securities.
FMR
FMR is a wholly owned subsidiary of FMR Corp., a parent company organized
in 1972. At present, the principal operating activities of FMR Corp. are
those conducted by three of its divisions as follows: Fidelity Service
Company, which is the transfer and shareholder servicing agent for certain
of the funds advised by FMR; Fidelity Investments Institutional Operations
Company, which performs shareholder servicing functions for certain
institutional customers; and Fidelity Investments Retail Marketing Company,
which provides marketing services to various companies within the Fidelity
organization.
Several affiliates of FMR are also engaged in the investment advisory
business. Fidelity Management Trust Company (FMTC), provides trustee,
investment advisory, and administrative services to retirement plans and
corporate employee benefit accounts. Fidelity Management & Research
(U.K.) Inc. (FMR U.K.) and Fidelity Management & Research (Far East)
Inc. (FMR Far East), both wholly owned subsidiaries of FMR formed in 1986,
supply investment research, and may supply portfolio management services,
to FMR in connection with certain funds advised by FMR. Analysts employed
by FMR, FMR U.K., and FMR Far East research and visit thousands of domestic
and foreign companies each year. FMR Texas Inc., a wholly owned subsidiary
of FMR formed in 1989, supplies portfolio management and research services
in connection with certain money market funds advised by FMR.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the Fund are listed below. Except
as indicated, each individual has held the office shown or other offices in
the same company for the last five years. Trustees and officers elected or
appointed prior to the Trust's conversion to a Delaware business trust
served the Massachusetts business trust in identical capacities. All
persons named as Trustees and officers also serve in similar capacities for
other funds advised by FMR. Unless otherwise noted, the business address
of each Trustee and officer is 82 Devonshire Street, Boston, MA 02109,
which is also the address of FMR. Those Trustees who are "interested
persons" (as defined in the 1940 Act) by virtue of their affiliation with
either the Fund or FMR are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d, Trustee and President, is Chairman, Chief Executive
Officer and a Director of FMR Corp.; a Director and Chairman of the Board
and of the Executive Committee of FMR; Chairman and a Director of FMR Texas
Inc. (1989), Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD, Trustee and Senior Vice President, is President of FMR;
and President and a Director of FMR Texas Inc. (1989), Fidelity Management
& Research (U.K.) Inc. and Fidelity Management & Research (Far
East) Inc.
RALPH F. COX, 200 Rivercrest Drive, Fort Worth, TX, Trustee (1991), is
President of Greenhill Petroleum Corporation (petroleum exploration and
production, 1990). Prior to his retirement in March 1990, Mr. Cox was
President and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of Bonneville Pacific
Corporation (independent power, 1989) and CH2M Hill Companies
(engineering). In addition, he served on the Board of Directors of the
Norton Company (manufacturer of industrial devices, 1983-1990) and
continues to serve on the Board of Directors of the Texas State Chamber of
Commerce, and is a member of advisory boards of Texas A&M University
and the University of Texas at Austin.
PHYLLIS BURKE DAVIS, 340 E. 64th Street #22C, New York, NY, Trustee (1992).
Prior to her retirement in September 1991, Mrs. Davis was the Senior Vice
President of Corporate Affairs of Avon Products, Inc. She is currently a
Director of BellSouth Corporation (telecommunications), Eaton Corporation
(manufacturing, 1991), and the TJX Companies, Inc. (retail stores, 1990),
and previously served as a Director of Hallmark Cards, Inc. (1985-1991) and
Nabisco Brands, Inc. In addition, she serves as a Director of the New York
City Chapter of the National Multiple Sclerosis Society, and is a member of
the Advisory Council of the International Executive Service Corps. and the
President's Advisory Council of The University of Vermont School of
Business Administration.
RICHARD J. FLYNN, 77 Fiske Hill, Sturbridge, MA, Trustee, is a financial
consultant. Prior to September 1986, Mr. Flynn was Vice Chairman and a
Director of the Norton Company (manufacturer of industrial devices). He is
currently a Director of Mechanics Bank and a Trustee of College of the Holy
Cross and Old Sturbridge Village, Inc.
E. BRADLEY JONES, 30195 Chagrin Blvd., Suite 104W, Pepper Pike, OH, Trustee
(1990). Prior to his retirement in 1984, Mr. Jones was Chairman and Chief
Executive Officer of LTV Steel Company. Prior to May 1990, he was Director
of National City Corporation (a bank holding company) and National City
Bank of Cleveland. He is a Director of TRW Inc. (original equipment and
replacement products), Cleveland-Cliffs Inc (mining), NACCO Industries,
Inc. (mining and marketing), Consolidated Rail Corporation, Birmingham
Steel Corporation (1988), Hyster-Yale Materials Handling, Inc. (1989), and
RPM, Inc. (manufacturer of chemical products, 1990). In addition, he
serves as a Trustee of First Union Real Estate Investments; Chairman of the
Board of Trustees and a member of the Executive Committee of the Cleveland
Clinic Foundation, a Trustee and a member of the Executive Committee of
University School (Cleveland), and a Trustee of Cleveland Clinic Florida.
DONALD J. KIRK, 680 Steamboat Road, Apartment #1-North, Greenwich, CT,
Trustee, is a Professor at Columbia University Graduate School of Business
and a financial consultant. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance), and Valuation Research Corp.(appraisals and
valuations, 1993). In addition, he serves as Vice Chairman of the Board of
Directors of the National Arts Stabilization Fund and Vice Chairman of the
Board of Trustees of the Greenwich Hospital Association.
*PETER S. LYNCH, Trustee (1990) is Vice Chairman of FMR (1992). Prior to
his retirement on May 31, 1990, he was a Director of FMR (1989) 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). He is a Director of
W.R. Grace & Co. (chemicals, 1989) and Morrison Knudsen Corporation
(engineering and construction). 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 (1990).
GERALD C. McDONOUGH, 135 Aspenwood Drive, Cleveland, OH, Trustee (1989), is
Chairman of G.M. Management Group (strategic advisory services). Prior to
his retirement in July 1988, he was Chairman and Chief Executive Officer of
Leaseway Transportation Corp. (physical distribution services). Mr.
McDonough is a Director of ACME-Cleveland Corp. (metal working,
telecommunications and electronic products), Brush-Wellman Inc. (metal
refining), York International Corp. (air conditioning and refrigeration,
1989), and Commercial Intertech Corp. (water treatment equipment, 1992).
and associated Estates Realty Corporation (a real estate investment trust,
1993).
EDWARD H. MALONE, 5601 Turtle Bay Drive #2104, Naples, FL, Trustee. Prior
to his retirement in 1985, Mr. Malone was Chairman, General Electric
Investment Corporation and a Vice President of General Electric Company.
He is a Director of Allegheny Power Systems, Inc. (electric utility),
General Re Corporation (reinsurance) and Mattel Inc. (toy manufacturer).
He is also a Trustee of Rensselaer Polytechnic Institute and of Corporate
Property Investors and a member of the Advisory Boards of Butler Capital
Corporation Funds and Warburg, Pincus Partnership Funds.
MARVIN L. MANN, 55 Railroad Avenue, Greenwich, CT, Trustee(1933) is
Chairman of the Board, President, and Chief Executive Officer of Lexmark of
Lexmark International, Inc. (office machines, 1991). Prior to 1991, he
held the positions of Vice President of International Business Machines
Corporation ("IBM") and President and General Manager of various IBM
divisions and subsidiaries. Mr. Mann is a director of M.A Hanna Company
(chemicals, 1993) and 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 (1990).
THOMAS R. WILLIAMS, 21st Floor, 191 Peachtree Street, N.E., Atlanta, GA,
Trustee, is President of The Wales Group, Inc. (management and financial
advisory services). Prior to retiring in 1987, Mr. Williams served as
Chairman of the Board of First Wachovia Corporation (bank holding company),
and Chairman and Chief Executive Officer of The First National Bank of
Atlanta and First Atlanta Corporation (bank holding company). He is
currently a Director of 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. (1989), and AppleSouth, Inc.
(restaurants, 1992).
GARY L. FRENCH, Treasurer (1991). Prior to becoming Treasurer of the
Fidelity funds, Mr. French was Senior Vice President, Fund Accounting -
Fidelity Accounting & Custody Services Co. (1991); Vice President, Fund
Accounting - Fidelity Accounting & Custody Services Co. (1990); and
Senior Vice President, Chief Financial and Operations Officer - Huntington
Advisers, Inc. (1985-1990).
ARTHUR S. LORING, Secretary, is Senior Vice President and General Counsel
of FMR, Vice President-Legal of FMR Corp., and Clerk of FDC.
LELAND BARRON, Vice President (1993) is also Vice President of other funds
advised by FMR and an employee of FMR Texas Inc.
JOHN TODD, Vice President (1992), is also Vice President of other funds
advised by FMR and an employee of FMR Texas Inc.
THOMAS D. MAHER, is Assistant Vice President of Fidelity's money market
funds and Vice President and Associate General Counsel of FMR Texas Inc.
(1990).
Under a retirement program which became effective November 1, 1989, a
Trustees, upon reaching age 72, become eligible to participate in a defined
benefit retirement program under which they receive payments during their
lifetime from the Portfolio based on his final year's basic trustees fees
and length of service. Currently, Messrs. Robert L. Johnson, William R.
Spaulding, Bertram H. Witham, and David L. Yunich participate in the
program. On July 31, 1993, the Trustees and officers of the Fund as a group
owned less than 1% of the Portfolio's outstanding shares.
MANAGEMENT CONTRACT
The Portfolio employs FMR to furnish investment advisory and other
services. Under its Management Contract with the Portfolio, approved by
shareholders at their August 24, 1989 meeting, FMR acts as investment
adviser and, subject to the supervision of the Board of Trustees, directs
the investments of the Portfolio in accordance with its investment
objective, policies and limitations.
FMR also provides the Portfolio with all necessary office facilities and
personnel for servicing the Portfolio's investments, and compensates all
officers all Fund, all Trustees who are "interested persons" of the Fund or
of FMR, and all personnel of the Portfolio 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 Portfolio. These services include providing facilities
for maintaining the Portfolio's organization, supervising relations with
custodians, transfer and pricing agents, accountants, underwriters and
other persons dealing with the Portfolio, preparing all general shareholder
communications and conducting shareholder relations, maintaining the
Portfolio's records and the registration of the Portfolio's shares under
federal and state laws, developing management and shareholder services for
the Portfolio and furnishing reports, evaluations and analyses on a variety
of subjects to the Trustees.
In addition to the management fees payable to FMR and the fees payable to
its transfer agent, each Portfolio pays all of its expenses, without
limitation, including typesetting, printing and mailing proxy material to
existing shareholders, legal expenses and the fees of the custodian and
auditor. (Effective June 1, 1989, FIIOC, the Portfolio's transfer agent
assumed payment of expenses of typesetting, printing and mailing of
Prospectuses and Statements of Additional Information and reports to
existing shareholders. There is no assurance that such an arrangement will
continue beyond the terms of the Portfolio' current transfer agent
agreements.) (See "Contracts with Companies Affiliated with FMR.") Other
expenses paid by the Portfolio include Portfolio's proportionate share of
insurance premiums and Investment Company Institute dues, and costs of
registering shares under federal and state securities laws. The Portfolio
are also liable for such nonrecurring expenses as may arise, including
costs of litigation to which a Portfolio is a party, and any obligation
they may have to indemnify the officers and Trustees with respect to such
litigation.
For these services, each Portfolio pays FMR a monthly management fee at the
annual rate of .50% of the average net assets of that Portfolio throughout
the month. For the fiscal years ended July 31, 1993, 1992 and 1991, FMR
received fees amounting to $14,208,606, $10,958,456, and $8,076,247,
respectively from the Portfolio.
Effective October 14, 1988, FMR voluntarily agreed to waive all or a
portion of its management fee or reimburse the Portfolio to the extent that
its aggregate operating expenses, including management fees, were in excess
of an annual rate of .65% of average net assets. 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.
To comply with the California Code of Regulations, FMR will reimburse a
Portfolio if and to the extent that a Portfolio's aggregate annual
operating expenses exceed specified percentages of its average net assets.
The applicable percentages are 2 1/2% of the first $30 million, 2% of the
next $70 million, and 1 1/2% of average net assets in excess of $100
million. When calculating a Portfolio's expenses for purposes of this
regulation, a Portfolio may exclude interest, taxes, brokerage commissions,
and extraordinary expenses, as well as a portion of its distribution plan
expenses and for Money Market Portfolio, custodian fees attributable to
investments in foreign securities.
SUB-ADVISER. FMR has entered into a sub-advisory agreement with FMR Texas
Inc. (FMR Texas) pursuant to which FMR Texas has primary responsibility for
providing portfolio investment management services to the Portfolio.
Under the sub-advisory agreements, FMR pays FMR Texas fees equal to 50% of
the management fee retained by FMR under its management contracts with the
Portfolio, after payments by FMR pursuant to the Portfolio' 12b-1 plan.
The fees paid to FMR Texas are not reduced by any voluntary or mandatory
expense reimbursements that may be in effect from time to time. For the
fiscal years ended July 31 1993, 1992, and 1991 FMR paid FMR Texas fees
that amounted to $2,400,702, $1,934,302, and $1,483,943 for U.S. Treasury
Portfolio.
CONTRACTS WITH COMPANIES AFFILIATED WITH FMR
FIIOC is the transfer, dividend-paying and shareholder servicing agent the
Initial Shares and Class B Shares and maintains shareholder records.
FIIOC receives a per account fee and a monetary transaction fee of $65 and
$14, respectively, or $60 and $12, respectively, depending on the nature of
services provided. Fees for institutional retirement plan accounts, if
any, would be based on the NAV of all such accounts in the Portfolio.
In addition, FIIOC pays out-of-pocket expenses associated with providing
transfer agent services, and bears the expense of typesetting, printing and
mailing Prospectuses, Statements of Additional Information, reports,
notices and statements to shareholders. Initial Shares transfer agent fees
and expenses for the fiscal years ended July 31, 1993, 1992 and 1991 were
$1,310,256, $915,597, and $909,265, respectively, for the
Portfolio.
Service performs the calculations necessary to determine the NAV and
dividends of Initial Shares and Class B Shares, and maintains the
portfolio's accounting records. Prior to July 1, 1991, the annual fee for
these pricing and bookkeeping services was based on two schedules, one
pertaining to the Portfolio's average net assets, and one pertaining to the
type and number of transactions the Portfolio made. The fee rates in
effect as of July 1, 1991 are based on the Portfolio's average net assets,
specifically .0175% for the first $500 million of average net assets and
.0075% for average net assets in excess of $500 million. The fee is
limited to a minimum of $20,000 and a maximum of $750,000 per year. For
the fiscal year ended July 31, 1993, 1992 and 1991, the fees paid to
Service for pricing and bookkeeping services (including related
out-of-pocket expenses) were $263,327 $217,831, and $158,474,
respectively, for the Portfolio.
The Portfolio has a Distribution Agreement with Distributors, a wholly
owned subsidiary of FMR, organized as a Massachusetts corporation on July
18, 1960. Distributors is a broker-dealer registered under the Securities
Exchange Act of 1934 and a member of the National Association of Securities
Dealers, Inc. The Distribution Agreement calls for Distributors to use all
reasonable efforts, consistent with its other business, to secure
purchasers for shares of the Portfolio, which is offered continuously.
Promotional and administrative expenses in connection with the offer and
sale of shares are paid by FMR.
DISTRIBUTION AND SERVICE PLANS
The Trustees of the Trust on behalf of each of the Initial Shares and Class
B Shares have adopted a Distribution and Service Plan (the Plan) under Rule
12b-1 of the 1940 Act (the Rule). The Rule provides in substance that a
mutual fund may not engage directly or indirectly in financing any activity
that is primarily intended to result in the sale of shares except pursuant
to a plan adopted by the fund under the Rule. The Trustees have adopted
each Plan to allow FMR to incur certain expenses that may be deemed, in
some cases, to constitute direct or indirect payment by the Portfolio of
distribution expenses.
The Plan requires FMR to make payments to certain third parties (Qualified
Recipients), other than Distributors, for assistance in selling shares of
Initial and Class B Shares or for providing shareholder support services.
The Plan authorizes FMR to make such payments from its management fees, its
past profits or any other source available to it; provided that such
payments cannot exceed the amount of the Portfolio's management fee. The
maximum amount payable to Initial Share Qualified Recipients under the
Plan, as determined by the Board of Trustees, is currently .38% of the
average net assets of which that Qualified Recipient is related. The
percentage amount payable varies according to the aggregate dollar level of
assets to which a Qualified Recipient is related in the Initial Shares and
in Daily Tax-Exempt Money Fund, another fund advised by FMR.
Under the Plan, Class B is authorized to pay Distributors a monthly
distribution fee at an annual rate of up to .75% of the Class B's average
net asset. The Plan provides that FMR may make payments out of its
management fee at an annualized rate of up to .38% of Initial shares
average net assets. The Distribution fee paid by Initial shares from the
Portfolio's management fee will similarly be paid by Class B from the
management fee. The difference between this distribution fee that matches
the Initial shares distribution fee, and the maximum of .75% will be paid
by the Class B shares. The total distribution fee paid by Class B will be
.75% of average net assets.
Under a Shareholder Servicing Plan in effect for Class B, investment
professionals are compensated at an annual rate of .25% of Class B's
average net assets for providing ongoing shareholder support services to
their customers. The Shareholder Servicing Plans have been approved by the
Board of Trustees.
Except as described above, distribution fees paid pursuant to the
Distribution and Service Plans and Shareholder Servicing Plan are paid by
either the Initial shares or Class B shares not by individual accounts.
QUALIFIED RECIPIENTS. Qualified Recipients are broker-dealers, banks or
other parties with whom Distributors has entered into written Service
Contracts and who assist or have assisted in selling shares of the Fund or
who provide shareholder support services. Under the Plan, payments may be
made to Qualified Recipients with respect to Portfolio shares to which the
Qualified Recipient is related, that is, shares owned by shareholders for
whom the Qualified Recipient is the dealer of record or holder of record,
the investment adviser, or a custodian; for whom the Qualified Recipient
was instrumental in the purchase of shares; or with whom the Qualified
Recipient has a servicing relationship. Should a shareholder cease to be a
client of a Qualified Recipient, but continue to hold shares of the
Portfolio, the Qualified Recipient would no longer be entitled to payments
under the Plans.
Functions of Qualified Recipients may include, among other things, services
rendered in the distribution of Portfolio shares, answering routine client
inquiries regarding the Portfolio, providing necessary facilities and
personnel to establish and maintain shareholder records, processing
purchase and redemption transactions, processing automatic investment and
redemption of client cash account balances, assisting clients in changing
dividend options, account registrations and addresses, performing
sub-accounting, arranging for bank wires, and providing such other services
as the Portfolio may reasonably be requests, to the extent the Qualified
Recipient is permitted to do so by applicable statute, rule or regulation.
The Plans also permits Qualified Recipients to pay the costs of
advertising, implementing activities under the Plans, and printing and
distributing Prospectuses, Statements of Additional Information and sales
literature to prospective investors.
The fees to be paid to Qualified Recipients, and the basis on which payment
is made, are determined by Distributors and/or FMR; provided, however, that
a majority of the Board of Trustees, including a majority of those Trustees
who are not "interested persons" and have no direct or indirect interest in
the operations of the Plans or any related agreements (the Independent
Trustees) may at any time and from time to time decrease the maximum
percentage amount and/or maximum total amount payable to Qualified
Recipients with respect to the shares to which they are related, or remove
any person as a Qualified Recipient. Amounts payable under the Plans are
payable to Distributors, which pays such amounts to the Qualified
Recipients. A report of amounts expended under the Plan must be made to
the Board of Trustees at least quarterly.
The NASD has approved amendments which subject asset based sales charges to
its maximum sales charge rule. Fees paid pursuant to the Fund's
Distribution and Service Plan will be limited by the restrictions imposed
by the NASD rule.
The Glass-Steagall Act generally prohibits federally and state chartered or
supervised banks from engaging in the business of underwriting, selling or
distributing securities. Although the scope of this prohibition under the
Glass-Steagall Act has not been clearly defined in Distributors' opinion it
should not prohibit banks form being paid for shareholder servicing and
recordkeeping functions as a Qualified Recipient. Distributors will engage
banks as Qualified Recipients only to perform such functions. However,
changes in federal or state statutes and regulations pertaining to the
permissible activities of banks and their affiliates or subsidiaries, as
well as further judicial or administrative decisions or interpretations,
could prevent a bank from continuing to perform all or a part of the
contemplated services. If a bank were prohibited from so acting, the
Trustees would consider what actions, if any, would be necessary to
continue to provide efficient and effective shareholder services. In such
event, changes in the operation might occur, including possible termination
of any automatic investment or redemption or other services then being
provided by the bank. It is not expected that shareholders would suffer
any adverse financial consequences as a result of any of these occurrences.
The Portfolio may execute portfolio transactions with and purchase
securities issued by depository institutions that act as Qualified
Recipients. No preference will be shown in the selection of investments
for the instruments of depository institutions acting as Qualified
Recipients under the Plans. In addition, state securities laws on this
issue may differ from the interpretations of federal law expressed herein,
and banks and financial institutions may be required to register as dealers
pursuant to state law.
Pursuant to Rule 12b-1, the Plans together with any related agreements has
been approved by a majority vote of the Trustees, including the Independent
Trustees, cast in person at a meeting held for the purpose of voting on
such an agreement. As required by the Rule, the Trustees carefully
considered all pertinent factors relating to the implementation of the Plan
prior to its approval, and have determined that there is a reasonable
likelihood that the Plan will benefit the respective Initial and Class B
Shareholders.
Under its terms, the Plans shall remain in effect from year to year as long
as such continuance is approved at least annually by a vote of a majority
of the Trustees and of the Independent Trustees. The Plans may not be
amended to increase materially the amount to be spent for distribution
without the approval of a majority of the outstanding shares of the Initial
Shares or Class B Shares, and may not be materially amended in any case
without a vote of a majority of the Trustees and of the Trustees who are
not "interested persons" of the Fund or FMR. So long as the Plans arein
effect, the selection and nomination of the Trustees who are not interested
persons of the Fund shall be committed to the discretion of the Trustees
who are not interested persons of the Fund. The Plans may be terminated at
any time by vote of a majority of the Independent Trustees, or by vote of a
majority of the outstanding shares of the Initial or Class B Shares, and
terminates automatically in the event of its assignment.
DESCRIPTION OF THE FUND
TRUST ORGANIZATION. U.S. Treasury Portfolio is a Series of Fidelity Daily
Money Fund, an open-end management investment company organized as a
Delaware business trust on September 29, 1993. The Portfolio acquired all
of the assets U.S. Treasury Portfolio, a Portfolio of Daily Money Fund, a
Massachusetts business trust. The Declaration of Trust permits the
Trustees to create additional series (or portfolios). Currently, there are
six Portfolios of the Fund: U.S. Treasury Portfolio (which offers Initial
Shares and Class B Shares); Money Market Portfolio; Fidelity U.S. Treasury
Income Portfolio; and Capital Reserves: Money Market Portfolio, U.S.
Government Portfolio and Municipal Money Market Portfolio.
In the event that FMR ceases to be the investment adviser to the Portfolio,
the right of the Portfolio to use the identifying name "Fidelity" may be
withdrawn. There is a remote possibility that one Portfolio might become
liable for any misstatement in its prospectus or statement of additional
information about another Portfolio.
The assets of the Fund received for the issue or sale of shares of each
Portfolio and all income, earnings, profits, and proceeds thereof, subject
only to the rights of creditors, are especially allocated to such
Portfolio, and constitute the underlying assets of such Portfolio. The
underlying assets of each Portfolio are segregated on the books of account,
and are to be charged with the liabilities with respect to such Portfolio
and with a share of the general expenses of the Fund. Expenses with
respect to the Fund are to be allocated in proportion to the asset value of
the respective Portfolios, except where allocations of direct expense can
otherwise be fairly made. The officers of the Fund, subject to the general
supervision of the Board of Trustees, have the power to determine which
expenses are allocable to a given Portfolio, or which are general or
allocable to all of the Portfolios. In the event of the dissolution or
liquidation of the Fund, shareholders of each Portfolio are entitled to
receive as a class the underlying assets of such Portfolio available for
distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. The Fund is a business trust organized
under Delaware law. Delaware law provides that shareholders shall be
entitled to the same limitations of personal liability extended to
stockholders of private corporations for profit. The courts of some
states, however, may decline to apply Delaware law on this point. The
Trust Instrument contains an express disclaimer of shareholder liability
for the debts, liabilities, obligations, and expenses of the Fund and
requires that a disclaimer be given in each contract entered into or
executed by the Fund or the Trustees. The Trust Instrument provides for
indemnification out of the portfolio's property of any shareholders held
personally liable for the obligations of the portfolio. The Trust
Instrument also provides that the portfolio shall, upon request, assume the
defense of any claim made against any shareholder for any act or obligation
of the portfolio and satisfy any judgment thereon. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which Delaware law does not apply, no
contractual limitation of liability was in effect, and the portfolio is
unable to meet its obligations. FMR believes that, in view of the above,
the risk of personal liability to shareholders is remote. Claims asserted
against Initial Shares may subject holders of Class B Shares to certain
liabilites and claims asserted against Class B Shares may subject Initial
Shares to certain liabilities.
The Trust Instrument further provides that the Trustees, if they have
exercised reasonable care, shall not be personally liable to any person
other than the Trust or its shareholders; moreover, the Trustees shall not
be liable for any conduct whatsoever, provided that a Trustee is not
protected against any liability to which he would otherwise be subject of
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of his office.
VOTING RIGHTS. The Portfolio's capital consists of shares of beneficial
interest. The shares have no preemptive or conversion rights; the voting
and dividend rights, the right of redemption, and the privilege of exchange
are described in the Prospectus. Shares are fully paid and nonassessable,
except as set forth under the heading "Shareholder and Trustee Liability"
above. Shareholders representing 10% or more of the Fund Portfolio or
Initial or Class B Shares may, as set forth in the Trust Instrument, call
meetings of the Fund Portfolio or Initial or Class B Shares for any purpose
related to the Fund or Portfolio, or Initial or Class B Shares as the case
may be, including, in the case of a meeting of the entire Fund, the purpose
of voting on removal of one or more Trustees.
The Fund or any Portfolio may be terminated upon the sale of its assets to
another open-end management investment company, or upon liquidation and
distribution of its assets to, or merger with another open-end management
investment company or series thereof, or upon liquidation and distribution
of its assets. Generally such terminations must be approved by vote of the
holders of a majority of the outstanding shares of the Trust or the
portfolio; however, the Trustees may, without prior shareholder approval,
change the form of organization of the Trust by merger, consolidation, or
incorporation. If not so terminated or reorganized, the Trust and its
portfolios will continue indefinitely.
Under the Trust Instrument, the Trustees may, without shareholder vote,
cause the Trust to merge or consolidate into one or more trusts,
partnerships, or corporations, or cause the Trust to be incorporated under
Delaware law, so long as the surviving entity is an open-end management
investment company that will succeed to or assume the Fund registration
statement. The Portfolio may also invest all of its assets in another
investment company.
CUSTODIAN. Morgan Guaranty Trust Company of New York, 60 Wall Street, New
York, NY, 10260 is custodian of the assets of the Portfolio. The custodian
is responsible for the safekeeping of the Fund's assets and the appointment
of subcustodian banks and clearing agencies. The custodian takes no part
in determining the investment policies of the Portfolio or in deciding
which securities are purchased or sold by the Portfolio. The Portfolio
may, however, invest in obligations of the custodian and may purchase
securities from or sell securities to the custodian.
FMR, its officers and directors, its affiliated companies, and the Fund's
Trustees may from time to time have transactions with various banks,
including banks serving as custodians for certain of the funds advised by
FMR. Transactions that have occurred to date include mortgages and
personal and general business loans. In the judgment of FMR, the terms and
conditions of those transactions were not influenced by existing or
potential custodial or other Fund relationships.
AUDITOR. Coopers & Lybrand 1999 Bryan Street, Dallas, TX 75201, serves
as the Fund's independent accountant. The auditor examines financial
statements for the funds and provides other audit, tax, and related
services.
PART C - OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) 1. Annual financial statements for the fiscal year ending July 31,
1993 were last filed as part of the Prospectus and are incorporated by
reference in Post Effective Amendment No 22.
2. Semi-annual financial statements for the period ended January 31, 1994
are electronically filed herein as Exhibit 24(a)(2).
(b) Exhibits:
1. (a) Trust Instrument dated June 20, 1991 was electronically filed and
is incorporated by reference as Exhibit 1(a) to Post Effective Amendment
No. 22.
2. (a) By-Laws of the Trust dated June 20, 1991 were electronically filed
and are incorporated by reference as Exhibit 2(a) to Post Effective
Amendment No. 22.
3. Not applicable.
4. Not applicable.
5. (a) Management Contract dated September 30, 1993 between Daily Money
Fund, on behalf of U.S. Treasury Income, and Fidelity Management &
Research Company is electronically filed herein as Exhibit 5(a).
(b) Management Contract dated September 30, 1993 between Daily Money Fund,
on behalf of Money Market Portfolio, and Fidelity Management & Research
Company is electronically filed herein as Exhibit 5(b).
(c) Management Contract dated September 30, 1993 between Daily Money Fund,
on behalf of U.S. Treasury Portfolio, and Fidelity Management &
Research Company is electronically filed herein as Exhibit 5(c).
(d) Management Contract dated September 30, 1993 between Daily Money Fund,
on behalf of Capital Reserves: Municipal Money Market Portfolio, and
Fidelity Management & Research Company is electronically filed herein
as Exhibit 5(d).
(e) Management Contract dated September 30, 1993 between Daily Money Fund,
on behalf of Capital Reserves: Money Market Portfolio, and Fidelity
Management & Research Company is electronically filed herein as Exhibit
5(e).
(f) Management Contract dated September 30, 1993 between Daily Money Fund,
on behalf of Capital Reserves: U.S. Government Portfolio, and Fidelity
Management & Research Company is electronically filed herein as Exhibit
5(f).
(g) Sub-Advisory Agreement dated September 30, 1993 between FMR Texas Inc.
and Fidelity Management & Research Company, on behalf of Money Market
Portfolio, is electronically filed herein as Exhibit 5(g).
(h) Sub-Advisory Agreement dated September 30, 1993 between FMR Texas Inc.
and Fidelity Management & Research Company, on behalf of U.S. Treasury
Portfolio, is electronically filed herein as Exhibit 5(h)
(i) Sub-Advisory Agreement dated September 30, 1993 between FMR Texas Inc.
and Fidelity Management & Research Company, on behalf of Capital
Reserves: Money Market Portfolio, is electronically filed herein as
Exhibit 5(i).
(j) Sub-Advisory Agreement dated September 30, 1993 between FMR Texas Inc.
and Fidelity Management & Research Company, on behalf of U.S.
Government Portfolio, is electronically filed herein as Exhibit 5(j).
(k) Sub-Advisory Agreement dated September 30, 1993 between FMR Texas Inc.
and Fidelity Management & Research Company, on behalf of Capital
Reserves: Municipal Money Market Portfolio, is electronically filed herein
as Exhibit 5(k).
(l) Sub-Advisory Agreement dated September 30, 1993 between FMR Texas Inc.
and Fidelity Management & Research Company, on behalf of U.S. Treasury
Portfolio, is electronically filed herein as Exhibit 5(l).
6. (a) General Distribution Agreement dated September 30, 1993 between
Daily Money Fund, on behalf of Money Market Portfolio, and Fidelity
Distributors Corporation is electronically filed herein as Exhibit 6(a).
(b) General Distribution Agreement dated September 30, 1993 between Daily
Money Fund, on behalf of U.S. Treasury Portfolio, and Fidelity Distributors
Corporation is electronically filed herein as Exhibit 6(b).
(c) General Distribution Agreement dated September 30, 1993 between Daily
Money Fund, on behalf of U.S. Treasury Income Portfolio, and Fidelity
Distributors Corporation is electronically filed herein as Exhibit 6(c).
(d) General Distribution Agreement dated September 30, 1993 between Daily
Money Fund, on behalf of Capital Reserves: U.S. Government Portfolio, and
National Financial Services Corporation is electronically filed herein as
Exhibit 6(d).
(e) General Distribution Agreement dated September 30, 1993 between Daily
Money Fund, on behalf of Capital Reserves: Municipal Money Market
Portfolio, and National Financial Services Corporation is electronically
filed herein as Exhibit 6(e).
(f) General Distribution Agreement dated September 30, 1993 between Daily
Money Fund, on behalf of Capital Reserves: Money Market Portfolio, and
National Financial Services Corporation is electronically filed herein as
Exhibit 6(f).
7. (a) Retirement Plan for non-interested person Trustees, Directors or
General Partners is incorporated herein by reference to Exhibit 7 to
Post-Effective Amendment No. 18.
8. (a) Custodian Agreement between Daily Money Fund on behalf of U.S.
Treasury Income Portfolio; Money Market Portfolio, U.S. Treasury Portfolio;
Capital Reserves: U.S. Government Portfolio, Money Market Portfolio and
Morgan Guaranty Trust Company of New York is electronically filed herein
as Exhibit 8(a).
(b) Custodian Agreement between Daily Money Fund on behalf of Capital
Reserves: Municipal Money Market Portfolio and United Missouri Bank is
electronically filed herein as Exhibit 8(b)
(c) Form of Sub-Custodian Agreement between Fidelity Investment
Companies (including Daily Money Fund on behalf of U.S. Treasury Income
Portfolio; Daily Money Fund: Money Market Portfolio, U.S. Treasury
Portfolio; Capital Reserves: U.S. Government Portfolio, Money Market
Portfolio) and Morgan Guaranty Trust Company of New York and between
Fidelity Investment Companies (including Daily Money Fund on behalf of
Capital Reserves: Municipal Money Market Portfolio) and United Missouri
Bank was electronically filed and is incorporated herein by reference as
Exhibit 8(c) to Post Effective Amendment No. 22.
(d) Form of Supplemental Custodian Agreement between Fidelity
Investment Companies (including Daily Money Fund on behalf of U.S.
Treasury Income Portfolio; Daily Money Fund: Money Market Portfolio, U.S.
Treasury Portfolio; Capital Reserves: U.S. Government Portfolio, Money
Market Portfolio) and Morgan Guaranty Trust Company of New York was
electronically filed and is incorporated herein by reference as Exhibit
8(d) to Post Effective Amendment No. 22.
9. (a) Amended Transfer Agent Agreement dated September 30, 1993 between
Daily Money Fund and Fidelity Investment Institutional Operations Company
is electronically filed herein as Exhibit 9(a)
(b) Schedule A dated September 30, 1993 for Capital Reserves: Money
Market Portfolio is electronically filed herein as Exhibit 9(b).
(c) Schedule A dated September 30, 1993 for Capital Reserves: U.S.
Government Portfolio is electronically filed herein as Exhibit 9(c).
(d) Schedule A dated September 30, 1993 for U.S. Treasury Portfolio is
electronically filed herein as Exhibit 9(d).
(e) Schedule A dated September 30, 1993 for U.S. Treasury Income
Portfolio is electronically filed herein as Exhibit 9(e).
(f) Schedule A dated September 30, 1993 for Capital Reserves: Money
Market Portfolio is electronically filed herein as Exhibit 9(f).
(g) Transfer Agent Agreement dated September 30, 1993 between Daily Money
Fund: Capital Reserves: Municipal Money Market Portfolio and United
Missouri Bank, N.A. is electronically filed herein as Exhibit 9(g).
(h) Schedule A dated September 30, 1993 for Capital Reserves: Municipal
Money Market Portfolio is electronically filed herein as Exhibit 9(h).
(i) Appointment of Sub-transfer Agent between FMR Corp. and Fidelity
Investment Institutional Operations Company on behalf of Daily Money Fund:
Capital Reserves: Municipal Money Market Portfolio is electronically filed
herein as Exhibit 9(i).
(j) Form of Schedule B between Daily Money Fund on behalf of U.S.
Treasury Income Portfolio; Money Market Portfolio, U.S. Treasury
Portfolio; Capital Reserves: U.S. Government Portfolio, Money Market
Portfolio and Fidelity Service Company was electronically filed and are
incorporated herein by reference to Exhibit 9(e) to Post Effective
Amendment No. 22.
(k) Form of Schedule C between Daily Money Fund on behalf of U.S.
Treasury Income Portfolio; Money Market Portfolio, U.S. Treasury
Portfolio; Capital Reserves: U.S. Government Portfolio, Money Market
Portfolio and Fidelity Service Company was electronically filed and are
incorporated herein by reference to Exhibit 9(g) to Post Effective
Amendment No. 22.
(l) Service Agreement dated September 30, 1993 between Daily Money Fund:
Capital Reserves Municipal Money Market Portfolio and United Missouri Bank,
N.A. is electronically filed herein as Exhibit 9(l)
(m) Schedule B dated September 30, 1993 for Capital Reserves: Municipal
Money Market Portfolio is electronically filed herein as Exhibit 9(m).
(n) Schedule C dated September 30, 1993 for Capital Reserves: Municipal
Money Market Portfolio is electronically filed herein as Exhibit 9(n).
10. Not applicable.
11. The Consent of Coopers & Lybrand is filed herein as Exhibit 11.
12. Not applicable.
13. Not applicable.
14. Not applicable.
15. (a) Service Plan dated September 30, 1993 between Daily Money Fund,
Fidelity Management & Research Company, and Fidelity Distributors
Corporation is electronically filed herein as Exhibit 15(a).
(b) Distribution and Service Plan dated September 30, 1993 for Daily
Money Fund: U.S. Treasury Income Portfolio is electronically filed herein
as Exhibit 15(b).
(c) Distribution and Service Plan dated September 30, 1993 for Daily
Money Fund: Capital Reserves: Money Market Portfolio, U.S. Government
Portfolio, and Municipal Money Market Portfolio is electronically filed
herein as Exhibit 15(c).
(d) Form of Distribution and Service Plan for Class B of Daily Money Fund:
U.S. Treasury Portfolio is filed herein as Exhibit 15(d).
Item 25. Persons Controlled by or under Common Control with Registrant
The Board of Trustees of Registrant is the same as the boards of other
funds advised by FMR, each of which has Fidelity Management & Research
Company as its investment adviser. In addition, the officers of these funds
are substantially identical. Nonetheless, Registrant takes the position
that it is not under common control with these other funds since the power
residing in the respective boards and officers arises as the result of an
official position with the respective funds.
Item 26. Number of Holders of Securities
February 28, 1994
Title of Class Number of Record Holders
U.S. Treasury Portfolio 5751
Money Market Portfolio 1746
U.S. Treasury Income Portfolio 1979
Capital Reserves: Money Market Portfolio 3195
Capital Reserves: U.S. Government Portfolio 354
Capital Reserves: Municipal Money Market Portfolio 168
Item 27. Indemnification
Article XI, Section 2 of the Declaration of Trust sets forth the reasonable
and fair means for determining whether indemnification shall be provided to
any past or present Trustee or officer. It states that the Registrant
shall indemnify any present or past Trustee or officer to the fullest
extent permitted by law against liability and all expenses reasonably
incurred by him in connection with any claim, action, suit or proceeding in
which he is involved by virtue of his service as a trustee, an officer, or
both. Additionally, amounts paid or incurred in settlement of such matters
are covered by this indemnification. Indemnification will not be provided
in certain circumstances, however. These include instances of willful
misfeasance, bad faith, gross negligence, and reckless disregard of the
duties involved in the conduct of the particular office involved.
Item 28. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held, during the
past two fiscal years, the following positions of a substantial nature.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman of the Executive Committee of FMR; President and
Chief Executive Officer of FMR Corp.; Chairman of the Board
and a Director of FMR, FMR Corp., FMR Texas Inc., Fidelity
Management & Research (U.K.) Inc. and Fidelity
Management & Research (Far East) Inc.; President and
Trustee of funds advised by FMR;
J. Gary Burkhead President of FMR; Managing Director of FMR Corp.; President
and a Director of FMR Texas Inc., Fidelity Management &
Research (U.K.) Inc. and Fidelity Management & Research
(Far East) Inc.; Senior Vice President and Trustee of funds advised
by FMR.
Peter S. Lynch Vice Chairman of FMR (1992).
David Breazzano Vice President of FMR (1993) and of a fund advised by FMR.
Stephan Campbell Vice President of FMR (1993).
Rufus C. Cushman, Jr. Vice President of FMR and of funds advised by FMR; Corporate
Preferred Group Leader.
Will Danof Vice President of FMR (1993) and of a fund advised by FMR.
Scott DeSano Vice President of FMR (1993).
Penelope Dobkin Vice President of FMR and of a fund advised by FMR.
Larry Domash Vice President of FMR (1993).
George Domolky Vice President of FMR (1993) and of a fund advised by FMR.
Charles F. Dornbush Senior Vice President of FMR; Chief Financial Officer of the
Fidelity funds; Treasurer of FMR Texas Inc., Fidelity Management
& Research (U.K.) Inc., and Fidelity Management &
Research (Far East) Inc.
Robert K. Duby Vice President of FMR.
Margaret L. Eagle Vice President of FMR and of a fund advised by FMR.
Kathryn L. Eklund Vice President of FMR.
Richard B. Fentin Senior Vice President of FMR (1993) and of a fund advised by
FMR.
Daniel R. Frank Vice President of FMR and of funds advised by FMR.
Gary L. French Vice President of FMR and Treasurer of the funds advised by
FMR. Prior to assuming the position as Treasurer he was Senior
Vice President, Fund Accounting - Fidelity Accounting &
Custody Services Co.
Michael S. Gray Vice President of FMR and of funds advised by FMR.
Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.
William J. Hayes Senior Vice President of FMR; Income/Growth Group Leader and
International Group Leader.
Robert Haber Vice President of FMR and of funds advised by FMR.
Daniel Harmetz Vice President of FMR and of a fund advised by FMR.
Ellen S. Heller Vice President of FMR.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
John Hickling Vice President of FMR (1993) and of funds advised by FMR.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Robert F. Hill Vice President of FMR; and Director of Technical Research.
Stephan Jonas Vice President of FMR (1993).
David B. Jones Vice President of FMR (1993).
Steven Kaye Vice President of FMR (1993) and of a fund advised by FMR.
Frank Knox Vice President of FMR (1993).
Robert A. Lawrence Senior Vice President of FMR (1993); and High Income Group
Leader.
Alan Leifer Vice President of FMR and of a fund advised by FMR.
Harris Leviton Vice President of FMR (1993) and of a fund advised by FMR.
Bradford E. Lewis Vice President of FMR and of funds advised by FMR.
Robert H. Morrison Vice President of FMR and Director of Equity Trading.
David Murphy Vice President of FMR and of funds advised by FMR.
Jacques Perold Vice President of FMR.
Brian Posner Vice President of FMR (1993) and of a fund advised by FMR.
Anne Punzak Vice President of FMR and of funds advised by FMR.
Richard A. Spillane Vice President of FMR and of funds advised by FMR; and
Director of Equity Research.
Robert E. Stansky Senior Vice President of FMR (1993) and of funds advised by
FMR.
Thomas Steffanci Senior Vice President of FMR (1993); and Fixed-Income Division
Head.
Gary L. Swayze Vice President of FMR and of funds advised by FMR; and
Tax-Free Fixed-Income Group Leader.
Donald Taylor Vice President of FMR (1993) and of funds advised by FMR.
Beth F. Terrana Senior Vice President of FMR (1993) and of funds advised by
FMR.
Joel Tillinghast Vice President of FMR (1993) and of a fund advised by FMR.
Robert Tucket Vice President of FMR (1993).
George A. Vanderheiden Senior Vice President of FMR; Vice President of funds advised by
FMR; and Growth Group Leader.
Jeffrey Vinik Senior Vice President of FMR (1993) and of a fund advised by
FMR.
Guy E. Wickwire Vice President of FMR and of a fund advised by FMR.
Arthur S. Loring Senior Vice President (1993), Clerk and General Counsel of FMR;
Vice President, Legal of FMR Corp.; and Secretary of funds
advised by FMR.
</TABLE>
(2) FMR TEXAS INC. (FMR Texas)
FMR Texas provides investment advisory services to Fidelity Management
& Research Company. The directors and officers of the Sub-Adviser have
held the following positions of a substantial nature during the past two
fiscal years.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman and Director of FMR Texas; Chairman of the
Executive Committee of FMR; President and Chief Executive
Officer of FMR Corp.; Chairman of the Board and a Director
of FMR, FMR Corp., Fidelity Management & Research
(Far East) Inc. and Fidelity Management & Research
(U.K.) Inc.; President and Trustee of funds advised by FMR.
J. Gary Burkhead President and Director of FMR Texas; President of FMR;
Managing Director of FMR Corp.; President and a Director of
Fidelity Management & Research (Far East) Inc. and
Fidelity Management & Research (U.K.) Inc.; Senior
Vice President and Trustee of funds advised by FMR.
Frederic L. Henning Jr. Senior Vice President of FMR Texas; Money Market Group
Leader.
Leland Baron Vice President of FMR Texas and of funds advised by FMR.
Thomas D. Maher Vice President of FMR Texas.
Burnell Stehman Vice President of FMR Texas and of funds advised by FMR.
John Todd Vice President of FMR Texas and of funds advised by FMR.
Sarah H. Zenoble Vice President of FMR Texas and of funds advised by FMR.
Charles F. Dornbush Treasurer of FMR Texas; Treasurer of Fidelity Management
& Research (U.K.) Inc.; Treasurer of Fidelity
Management & Research (Far East) Inc.; Senior Vice
President and Chief Financial Officer of the Fidelity funds.
David C. Weinstein Secretary of FMR Texas; Clerk of Fidelity Management
& Research (U.K.) Inc.; Clerk of Fidelity Management
& Research (Far East) Inc.
</TABLE>
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR and the following other funds:
CrestFunds, Inc.
The Victory Funds
ARK Funds
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee and President
Nita B. Kincaid Director None
W. Humphrey Bogart Director None
Kurt A. Lange President and Treasurer None
William L. Adair Senior Vice President None
Thomas W. Littauer Senior Vice President None
Arthur S. Loring Vice President and Clerk Secretary
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31a of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company or Fidelity
Service Co., 82 Devonshire Street, Boston, MA 02109, or the funds'
respective custodian: United Missouri Bank, N.A., 1010 Grand Avenue, Kansas
City, MO, or Morgan Guaranty Trust Company of New York, 61 Wall Street,
37th Floor, New York, NY.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
Not applicable.
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee or General Partner, as
the case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Daily Money Fund Fidelity Institutional Tax-Exempt Cash Portfolios
Daily Tax-Exempt Money Fund Fidelity Institutional Investors Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust II
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Court Street Trust II Fidelity New York Municipal Trust II
Fidelity Hereford Street Trust Fidelity Phillips Street Trust
Fidelity Institutional Cash Portfolios Fidelity Union Street Trust II
</TABLE>
in addition to any other investment company for which Fidelity Management
& Research Company acts as investment adviser and for which the
undersigned individual serves as President and Board Member (collectively,
the "Funds"), hereby severally constitute and appoint J. Gary Burkhead, my
true and lawful attorney-in-fact, with full power of substitution, and with
full power to sign for me and in my name in the appropriate capacity any
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Pre-Effective Amendments or
Post-Effective Amendments to said Registration Statements on Form N-1A or
any successor thereto, any Registration Statements on Form N-14, and any
supplements or other instruments in connection therewith, and generally to
do all such things in my name and behalf in connection therewith as said
attorney-in-fact deem necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission. I hereby ratify and confirm all that said attorneys-in-fact or
their substitutes may do or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d October 20, 1993
Edward C. Johnson 3d
POWER OF ATTORNEY
We, the undersigned Directors, Trustees or General Partners, as the case
may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Daily Money Fund Fidelity Institutional Tax-Exempt Cash Portfolios
Daily Tax-Exempt Money Fund Fidelity Institutional Investors Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust II
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Court Street Trust II Fidelity New York Municipal Trust II
Fidelity Hereford Street Trust Fidelity Phillips Street Trust
Fidelity Institutional Cash Portfolios Fidelity Union Street Trust II
</TABLE>
in addition to any other investment company for which Fidelity Management
& Research Company acts as investment adviser and for which the
undersigned individual serves as a Director, Trustee or General Partner
(collectively, the "Funds"), hereby severally constitute and appoint Arthur
J. Brown, Arthur C. Delibert, Robert C. Hacker, Richard M. Phillips, Dana
L. Platt and Stephanie Xupolos, each of them singly, my true and lawful
attorney-in-fact, with full power of substitution, and with full power to
each of them, to sign for me and my name in the appropriate capacities any
Registration Statements of the Funds on Form N-1A or any successor thereto,
any and all subsequent Pre-Effective Amendments or Post-Effective
Amendments to said Registration Statements on Form N-1A or any successor
thereto, any Registration Statements on Form N-14, and any supplements or
other instruments in connection therewith, and generally to do all such
things in my name and behalf in connection therewith as said
attorneys-in-fact deem necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission, hereby ratifying and confirming all that said attorney-in-fact
or their substitutes may do or cause to be done by virtue hereof.
WITNESS our hands on this twentieth day of October, 1993.
/s/Edward C. Johnson 3d /s/Donald J. Kirk
Edward C. Johnson 3d Donald J. Kirk
/s/J. Gary Burkhead /s/Peter S. Lynch
J. Gary Burkhead Peter S. Lynch
/s/Ralph F. Cox /s/Marvin L. Mann
Ralph F. Cox Marvin L. Mann
/s/Phyllis Burke Davis /s/Edward H. Malone
Phyllis Burke Davis Edward H. Malone
/s/Richard J. Flynn /s/Gerald C. McDonough
Richard J. Flynn Gerald C. McDonough
/s/E. Bradley Jones /s/Thomas R. Williams
E. Bradley Jones Thomas R. Williams
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 25 to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Boston, and Commonwealth of Massachusetts, on the 8th day of April 1994.
Daily Money Fund
By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
(Signature) (Title) (Date)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
/s/Edward C. Johnson 3d(dagger) President and Trustee April 8 , 1994
Edward C. Johnson 3d (Principal Executive Officer)
</TABLE>
/s/Gary L. French Treasurer April 8 , 1994
Gary L. French
/s/J. Gary Burkhead Trustee April 8 , 1994
J. Gary Burkhead
/s/Ralph F. Cox* Trustee April 8 , 1994
Ralph F. Cox
/s/Phyllis Burke Davis* Trustee April 8 , 1994
Phyllis Burke Davis
/s/Richard J. Flynn* Trustee April 8 , 1994
Richard J. Flynn
/s/E. Bradley Jones* Trustee April 8 , 1994
E. Bradley Jones
/s/Donald J. Kirk* Trustee April 8 , 1994
Donald J. Kirk
/s/Peter S. Lynch* Trustee April 8, 1994
Peter S. Lynch
/s/Edward H. Malone* Trustee April 8, 1994
Edward H. Malone
/s/Marvin L. Mann* Trustee April 8 , 1994
Marvin L. Mann
/s/Gerald C. McDonough* Trustee April 8 , 1994
Gerald C. McDonough
/s/Thomas R. Williams* Trustee April 8, 1994
Thomas R. Williams
(dagger) Signatures affixed by J. Gary Burkhead pursuant to a power of
attorney dated October 20, 1993 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated October 20, 1993 and filed herewith.
DAILY MONEY FUND
SEMIANNUAL REPORT
JANUARY 31, 1994
DAILY MONEY FUND: MONEY MARKET PORTFOLIO
INVESTMENTS/JANUARY 31, 1994 (UNAUDITED)
(Showing Percentage of Total Value of Investments)
ANNUALIZED ANNUALIZED
YIELD AT YIELD AT
DUE TIME OF PRINCIPAL VALUE DUE TIME OF PRINCIPAL VALUE
DATE PURCHASE AMOUNT (NOTE 1) DATE PURCHASE AMOUNT (NOTE 1)
BANKERS' ACCEPTANCES - 3.6%
DOMESTIC BANKERS ACCEPTANCE - 1.3%
Trust Company Bank
2/7/94 3.08% $ 20,000,000 $ 19,989,766 8982769C
NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 2.3%
Mitsubishi Bank, Ltd.
2/16/94 3.11 2,000,000 1,997,416 610998US
Sakura Bank, Ltd.
2/9/94 3.26 10,000,000 9,992,777 793999KA
2/15/94 3.26 12,000,000 11,984,833 793999KC
Sanwa Bank, Ltd.
2/9/94 3.11 4,600,000 4,596,831 804999MB
2/17/94 3.11 5,650,000 5,642,216 804999MD
34,214,073
TOTAL BANKERS' ACCEPTANCES 54,203,839
CERTIFICATES OF DEPOSIT - 31.2%
NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 22.5%
Bank of Tokyo
2/11/94 3.44 10,000,000 10,000,000 0659932T
Canadian Imperial Bank of Commerce
4/4/94 3.27 25,000,000 25,000,000 136990EB
4/5/94 3.27 25,000,000 25,000,000 136990EC
Credit Suisse
6/1/94 3.31 40,000,000 40,041,468 225991BS
Fuji Bank, Ltd.
2/4/94 3.10 10,000,000 10,000,260 35999DHR
3/7/94 3.25 25,000,000 25,000,000 35999DHL
Industrial Bank of Japan, Ltd.
2/15/94 3.10 50,000,000 50,000,000 4559905V
2/22/94 3.10 10,000,000 10,000,000 4559905U
Lloyds Bank PLC
2/28/94 3.35 17,000,000 16,999,961 539991AF
Societe Generale
3/4/94 3.41 10,000,000 9,998,494 833991SJ
4/18/94 3.41 5,000,000 4,999,641 833991SP
4/25/94 3.43 50,000,000 50,000,000 833991SK
5/17/94 3.48 3,000,000 2,999,595 833991SL
Sumitomo Bank, Ltd.
2/24/94 3.45 10,000,000 10,000,000 86699EBL
2/28/94 3.10 30,000,000 30,000,000 86699ECH
2/28/94 3.10 18,000,000 18,000,000 86699ECK
338,039,419
LONDON BRANCH, EURODOLLAR, FOREIGN BANKS - 8.7%
ABN-AMRO Bank
2/3/94 3.37% $ 5,000,000 $ 5,000,000 032993KM
3/31/94 3.36 15,000,000 14,999,978 032993KL
2/23/94 3.35 25,000,000 25,000,090 032993KN
2/23/94 3.36 20,000,000 19,999,962 032993KK
Abbey National PLC, UK
2/28/94 3.37 25,000,000 25,000,145 007994GM
Lloyds Bank PLC
4/12/94 3.37 15,000,000 14,994,607 539991AG
Rabobank Nederland, N.V.
3/28/94 3.36 15,000,000 14,996,670 216992JC
Sumitomo Bank, Ltd.
2/7/94 3.10 10,000,000 10,000,209 86699ECF
129,991,661
TOTAL CERTIFICATES OF DEPOSIT 468,031,080
COMMERCIAL PAPER - 23.8%
CIESCO, L.P.
2/16/94 3.10 25,000,000 24,967,813 177996LN
Commerzbank U.S. Finance, Inc.
2/1/94 3.35 17,449,000 17,449,000 202995AP
Corporate Receivables Corp.
2/3/94 3.08 2,000,000 1,999,658 220992CD
Dresdner U.S. Finance Inc.
5/19/94 3.43 13,000,000 12,869,787 261998AC
General Electric Capital Corporation
3/1/94 3.39 25,000,000 24,934,861 369998KP
3/10/94 3.37 (a) 25,000,000 25,000,000 369998LE
3/30/94 3.39 20,000,000 19,893,917 369998KW
HYPO U.S. Finance
4/4/94 3.30 6,895,000 6,856,170 07299DAC
4/14/94 3.38 10,000,000 9,933,200 07299DAB
Hanson Finance Corp.
2/9/94 3.25 40,000,000 39,971,289 41199AAL
Kingdom of Denmark
2/14/94 3.39 70,000,000 69,915,825 249998AX
Kredietbank, N.A. Finance Corporation
5/17/94 3.48 15,000,000 14,850,375 50099DAC
5/24/94 3.46 5,000,000 4,947,111 50099DAF
Merck & Company, Inc.
5/27/94 3.40 15,000,000 14,839,479 5893319S
New South Wales Treasury Corp.
2/2/94 3.38 15,000,000 14,998,604 648992AD
2/14/94 3.38 19,500,000 19,476,410 648992AE
2/23/94 3.43 5,000,000 4,989,611 648992AF
ANNUALIZED ANNUALIZED
YIELD AT YIELD AT
DUE TIME OF PRINCIPAL VALUE DUE TIME OF PRINCIPAL VALUE
DATE PURCHASE AMOUNT (NOTE 1) DATE PURCHASE AMOUNT (NOTE 1)
COMMERCIAL PAPER - CONTINUED
Principal Mutual Life Insurance Company
2/15/94 3.08% $ 10,000,000 $ 9,988,061 742992JF
Texaco Inc.
2/17/94 3.11 10,000,000 9,986,222 920998LV
USAA Capital Corporation
2/18/94 3.28 10,000,000 9,984,558 914992FM
TOTAL COMMERCIAL PAPER 357,851,951
FEDERAL AGENCIES - 4.6%
FEDERAL FARM CREDIT BANK - DISCOUNT NOTES - 2.0%
6/14/94 3.33 30,000,000 29,636,467 313993MB
FEDERAL NATIONAL MORTGAGE ASSOC. - AGENCY COUPONS - 1.6%
2/14/94 3.60 (a) 25,000,000 25,000,000 9931287F
FEDERAL NATIONAL MORTGAGE ASSOC. - DISCOUNT NOTES - 1.0%
7/6/94 3.47 10,000,000 9,853,611 9931164R
7/20/94 3.47 5,295,000 5,210,486 9931167M
15,064,097
TOTAL FEDERAL AGENCIES 69,700,564
U.S. TREASURY OBLIGATIONS - 1.9%
U.S. TREASURY BILLS
12/15/94 3.43 30,000,000 29,120,325 993134FU
BANK NOTES - 0.7%
PNC Bank, N.A.
4/19/94 3.30 10,000,000 9,997,424 69399EAD
FOREIGN GOVERNMENT OBLIGATIONS
(U.S. Dollars) - 4.6%
Canadian Treasury Bills
5/26/94 3.42 20,000,000 19,787,200 136992ST
5/31/94 3.42 30,000,000 29,666,800 136992SQ
6/13/94 3.35 20,000,000 19,758,000 136992TM
TOTAL FOREIGN GOVERNMENT OBLIGATIONS 69,212,000
SHORT-TERM NOTES (a) - 3.7%
CSA Funding (A)
2/7/94 3.16 22,000,000 22,000,000 129993AD
CSA Funding (B)
2/7/94 3.16 10,000,000 10,000,000 129993AC
CSA Funding (C)
2/7/94 3.16 23,000,000 23,000,000 129993AE
TOTAL SHORT-TERM NOTES 55,000,000
TIME DEPOSITS - 5.0%
Dai-Ichi Kangyo Bank, Ltd.
2/22/94 3.13% $ 25,000,000 $ 25,000,000 2379984G
Hong Kong & Shanghai Banking Corp.
2/1/94 3.25 50,000,000 50,000,000 4385609E
TOTAL TIME DEPOSITS 75,000,000
MUNICIPAL SECURITIES - 4.8%
Harris County Texas Health Facilities Authority
2/25/94 3.13 4,700,000 4,700,000 41415P9H
Illinois Student Assistance
2/7/94 3.22 (a) 10,000,000 10,000,000 452281DD
Louisiana Public Facilities Authority
2/25/94 3.13 47,200,000 47,200,000 5463969J
New Orleans Aviation Board (MBIA Insured)
2/7/94 3.26 (a) 9,700,000 9,700,000 64763H9B
TOTAL MUNICIPAL SECURITIES 71,600,000
MATURITY
AMOUNT
REPURCHASE AGREEMENTS - 16.1%
With First Boston Corporation:
At 3.10%, dated 1/12/94 due 2/10/94:
U.S. Government Obligations
(principal amount $31,304,907)
5.5% to 10.75%,
2/15/03 to 8/1/23 $ 30,074,917 30,000,000
At 3.10%, dated 1/12/94 due 2/16/94:
U.S. Government Obligations
(principal amount $41,705,658)
0% to 10.75%,
2/15/03 to 8/1/24 40,120,556 40,000,000
With Goldman, Sachs & Co.:
At 3.17%, dated 1/5/94 due 2/2/94:
U.S. Government Obligations
(principal amount $25,598,611)
6.50% to 9%,
12/1/99 to 1/1/24 25,061,639 25,000,000
MATURITY VALUE
AMOUNT (NOTE 1)
REPURCHASE AGREEMENTS - CONTINUED
With Goldman, Sachs & Co. - continued
At 3.125%, dated 1/10/94 due 2/7/94:
U.S. Government Obligations
(principal amount $40,960,440)
6.50% to 9%,
12/1/99 to 1/1/24 $ 40,097,222 $ 40,000,000
With Shearson Lehman Government Securities:
At 3.10%, dated 1/20/94 due 2/15/94:
65399ENMU.S. Government Obligations
(principal amount $32,992,772)
6.50%, 10/15/23 31,983,447 31,912,000
In a joint trading account
(U.S. Treasury Obligations)
dated 1/31/94, due 2/1/94
(Note 2)
At 3.19% 54,004,779 54,000,000
99799MSQAt 3.22% 20,653,846 20,652,000 99799MSU
TOTAL REPURCHASE AGREEMENTS 241,564,000
TOTAL INVESTMENTS - 100% $ 1,501,281,183
Total Cost for Income Tax Purposes-$1,501,281,183
LEGEND:
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
INCOME TAX INFORMATION:
At July 31, 1993, the fund had a capital loss carryforward of approximately
$65,000 of which $30,000 and $35,000 will expire on July 31, 2000 and 2001,
respectively.
MONEY MARKET PORTFOLIO
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
DRAFT
<TABLE>
<CAPTION>
<S> <C> <C>
January 31, 1994 (Unaudited)
ASSETS
Investment in securities, at value (including repurchase agreements of $241,564,000) (Notes 1 and 2) - $ 1,501,281,183
See accompanying schedule
Interest receivable 3,848,241
Receivable from investment adviser for expense reductions (Note 5) 20,307
TOTAL ASSETS 1,505,149,731
LIABILITIES
Payable for investments $ 54,120,325
purchased
Share transactions in process 4,667,849
Dividends payable 243,158
Accrued management fee 603,707
Other payables and accrued expenses 245,405
TOTAL LIABILITIES 59,880,444
NET ASSETS $ 1,445,269,287
Net Assets consist of:
Paid in capital $ 1,445,269,112
Accumulated net realized gain (loss) on investments 175
NET ASSETS, for 1,445,269,112 shares outstanding $ 1,445,269,287
NET ASSET VALUE, offering price and redemption price per share ($1,445,269,287 (divided by) 1,445,269,112 $1.00
shares)
</TABLE>
Statement of Operations
DRAFT
<TABLE>
<CAPTION>
<S> <C> <C>
Six Months Ended January 31, 1994 (Unaudited)
INTEREST INCOME $ 24,178,244
EXPENSES
Management fee (Note 4) $ 3,694,628
Transfer agent fees (Note 4) 904,215
Accounting fees and expenses (Note 4) 80,014
Non-interested trustees' compensation 4,725
Custodian fees and expenses 44,777
Registration fees 57,004
Audit 12,128
Legal 13,177
Miscellaneous 12,656
Total expenses before 4,823,324
reductions
Expense reductions (Note 5) (20,307) 4,803,017
NET INTEREST INCOME 19,375,227
NET REALIZED GAIN (LOSS) ON 65,226
INVESTMENTS (NOTE 1)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 19,440,453
</TABLE>
Statement of Changes in Net Assets
DRAFT
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR
ENDED ENDED
JANUARY 31, 1994 JULY 31,
(UNAUDITED) 1993
INCREASE (DECREASE) IN NET ASSETS
Operations $ 19,375,227 $ 42,868,040
Net interest income
Net realized gain (loss) on investments 65,226 (34,675)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 19,440,453 42,833,365
Dividends to shareholders from net interest income (19,375,227) (42,868,040)
Share transactions at net asset value of $1.00 per share 4,715,418,507 8,652,766,139
Proceeds from sales of shares
Reinvestment of dividends from net interest income 15,972,805 35,339,347
Cost of shares redeemed (4,737,590,141) (8,768,032,138)
Net increase (decrease) in net assets and shares resulting from share transactions (6,198,829) (79,926,652)
TOTAL INCREASE (DECREASE) IN NET ASSETS (6,133,603) (79,961,327)
NET ASSETS
Beginning of period 1,451,402,890 1,531,364,217
End of period $ 1,445,269,287 $ 1,451,402,890
</TABLE>
Financial Highlights
DRAFT
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED JULY 31,
ENDED
JANUARY 31, 1994
(UNAUDITED) 1993 1992 1991 1990 1989
SELECTED PER-SHARE DATA
Net asset value, beginning of period
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Income from Investment Operations
.013 .028 .041 .067 .080 .085
Net interest income
Dividends from net interest income
(.013) (.028) (.041) (.067) (.080) (.085)
Net asset value, end of period
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN (DAGGER)
1.33% 2.82% 4.21% 6.90% 8.34% 8.81%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted)
$ 1,445,269 $ 1,451,403 $ 1,531,364 $ 1,714,108 $ 1,349,670 $ 893,611
Ratio of expenses to average net assets (DAGGER)(DAGGER)
.65%* .61% .59% .60% .61% .64%
Ratio of expenses to average net assets
.65%* .61% .59% .60% .61% .73%
before expense reductions (DAGGER)(DAGGER)
Ratio of net interest income to average
2.62%* 2.76% 4.19% 6.61% 7.99% 8.56%
net assets
</TABLE>
* ANNUALIZED
(DAGGER) TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED
AND WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE
PERIOD SHOWN.
(DAGGER)(DAGGER) SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS.
DAILY MONEY FUND: U.S. TREASURY PORTFOLIO
INVESTMENTS/JANUARY 31, 1994 (UNAUDITED)
(Showing Percentage of Total Value of Investments)
ANNUALIZED
YIELD AT
DUE TIME OF PRINCIPAL VALUE MATURITY VALUE
DATE PURCHASE AMOUNT (NOTE 1) AMOUNT (NOTE 1)
U.S. Treasury Obligations - 49.6%
U.S. TREASURY BILLS - 27.8%
2/3/94 3.30% $ 76,000,000 $ 75,986,278 99399HWL
4/7/94 3.35 33,500,000 33,304,025 99399HLF
4/21/94 3.18 200,000,000 198,626,277 99399H2P
4/28/94 3.23 20,000,000 19,848,067 99399H3C
5/5/94 3.21 26,000,000 25,791,112 99399HNJ
5/5/94 3.27 26,000,000 25,787,082 99399HNA
5/5/94 3.30 78,000,000 77,348,741 99399HPC
5/26/94 3.30 30,000,000 29,691,250 99399H6B
5/26/94 3.35 90,000,000 89,059,594 99399H5G
6/2/94 3.36 50,000,000 49,445,417 99399H5R
6/30/94 3.30 123,000,000 121,370,934
746,258,777
U.S. TREASURY NOTES - 21.8%
2/15/94 3.14 13,000,000 13,017,818 99399GGL
2/28/94 3.11 37,000,000 37,060,758 99399GHC
3/31/94 3.24 31,000,000 31,119,398 99399GJC
4/30/94 3.14 20,000,000 20,100,310 99399GGN
4/30/94 3.23 28,000,000 28,134,676 99399GFV
5/15/94 3.16 114,000,000 115,177,825 99399GGR
5/15/94 3.22 75,000,000 75,781,296 9931079W
5/31/94 3.20 21,000,000 21,123,228 99399GGM
7/15/94 3.16 50,000,000 51,073,428 993993DG
7/31/94 3.15 45,000,000 45,220,109 993993DF
7/31/94 3.20 23,000,000 23,106,203 9931079X
8/15/94 3.08 93,000,000 97,596,899 993993DE
8/15/94 3.15 25,000,000 25,475,61 993993CY3
583,987,561
TOTAL U.S. TREASURY OBLIGATIONS 1,330,246,338
Repurchase Agreements - 50.4%
In a joint trading account
(U.S. Treasury Obligations)
dated 1/31/94, due 2/1/94
(Note 2)
At 3.19% $ 1,313,116,205 $ 1,313,000,000 99799MSQ
At 3.22% 37,653,366 37,650,000 99799MSU
TOTAL REPURCHASE AGREEMENTS 1,350,650,000
TOTAL INVESTMENTS - 100% $ 2,680,896,338
Total Cost for Income Tax Purposes - $2,680,896,338
INCOME TAX INFORMATION:
At July 31, 1993, the fund had a capital loss carryforward of approximately
$44,000 which will expire on July 31, 2001.
U.S. TREASURY PORTFOLIO
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
DRAFT
<TABLE>
<CAPTION>
<S> <C> <C>
January 31, 1994 (Unaudited)
ASSETS
Investment in securities, at value (including repurchase agreements of $1,350,650,000) (Notes 1 and 2) $ 2,680,896,338
- - See accompanying schedule
Cash 5,567,740
Interest receivable 12,101,671
TOTAL ASSETS 2,698,565,749
LIABILITIES
Dividends payable $ 2,242,848
Accrued management fee 1,188,240
Other payables and accrued expenses 262,484
TOTAL LIABILITIES 3,693,572
NET ASSETS $ 2,694,872,177
Net Assets consist of:
Paid in capital $ 2,694,868,084
Accumulated net realized gain (loss) on investments 4,093
NET ASSETS, for 2,694,868,084 shares outstanding $ 2,694,872,177
NET ASSET VALUE, offering price and redemption price per share ($2,694,872,177 (divided by) 2,694,868,084 $1.00
shares)
</TABLE>
Statement of Operations
DRAFT
<TABLE>
<CAPTION>
<S> <C> <C>
Six Months Ended January 31, 1994 (Unaudited)
INTEREST INCOME $ 46,089,025
EXPENSES
Management fee (Note 4) $ 7,291,961
Transfer agent fees (Note 4) 906,181
Accounting fees and expenses (Note 4) 134,281
Non-interested trustees' compensation 9,383
Custodian fees and expenses 56,702
Registration fees 60,399
Audit 24,354
Legal 21,472
Miscellaneous 24,436
TOTAL EXPENSES 8,529,169
NET INTEREST INCOME 37,559,856
NET REALIZED GAIN (LOSS) ON (1,754)
INVESTMENTS (NOTE 1)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 37,558,102
</TABLE>
Statement of Changes in Net Assets
DRAFT
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR
ENDED ENDED
JANUARY 31, 1994 JULY 31,
(UNAUDITED) 1993
INCREASE (DECREASE) IN NET ASSETS
Operations $ 37,559,856 $ 77,613,277
Net interest income
Net realized gain (loss) on investments (1,754) (44,237)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 37,558,102 77,569,040
Dividends to shareholders from net interest income (37,559,856) (77,613,277)
Share transactions at net asset value of $1.00 per share 7,120,277,850 13,719,270,587
Proceeds from sales of shares
Reinvestment of dividends from net interest income 21,461,308 42,776,435
Cost of shares redeemed (7,396,035,729) (13,906,546,104)
Net increase (decrease) in net assets and shares resulting from share transactions (254,296,571) (144,499,082)
TOTAL INCREASE (DECREASE) IN NET ASSETS (254,298,325) (144,543,319)
NET ASSETS
Beginning of period 2,949,170,502 3,093,713,821
End of period $ 2,694,872,177 $ 2,949,170,502
</TABLE>
Financial Highlights
DRAFT
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED JULY 31,
ENDED
JANUARY 31, 1994
(UNAUDITED) 1993 1992 1991 1990 1989
SELECTED PER-SHARE DATA
Net asset value, beginning of period
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Income from Investment Operations
.013 .027 .042 .065 .079 .083
Net interest income
Dividends from net interest income
(.013) (.027) (.042) (.065) (.079) (.083)
Net asset value, end of period
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN (DAGGER)
1.31% 2.78% 4.25% 6.69% 8.24% 8.64%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted)
$ 2,694,872 $ 2,949,171 $ 3,093,714 $ 1,701,704 $ 1,177,290 $ 994,133
Ratio of expenses to average net assets
.58%* .57% .59% .59% .59% .64%
Ratio of expenses to average net assets
.58%* .57% .59% .59% .59% .64%
before
expense reductions
Ratio of net interest income to average
2.58%* 2.73% 4.14% 6.42% 7.91% 8.47%
net assets
</TABLE>
* ANNUALIZED
(DAGGER) TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD ENDED JANUARY 31, 1994 (UNAUDITED)
7. SIGNIFICANT ACCOUNTING POLICIES.
Money Market Portfolio and U.S. Treasury Portfolio (the funds) are funds of
Daily Money Fund (the trust) and are authorized to issue an unlimited
number of shares. The trust is registered under the Investment Company Act
of 1940, as amended (the 1940 Act), as an open-end management investment
company. At a special meeting of the shareholders of the funds held on
March 24, 1993, shareholders approved an Agreement and Plan of Conversion
and Termination (the Plan of Conversion), providing for the conversion of
the funds from separate series of a Massachusetts business trust, to
separate series of a Delaware business trust, effective September 29, 1993.
The individual investment objective, policies and limitations of the funds
remain the same. The following summarizes the significant accounting
policies of the funds:
SECURITY VALUATION. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, each fund is not subject to income taxes to
the extent that it distributes all of its taxable income for the fiscal
year. The schedules of investments include information regarding income
taxes under the caption "Income Tax Information."
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of original issue discount, is accrued as earned.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
8. OPERATING POLICIES.
REPURCHASE AGREEMENTS. The funds, through their custodian, receive delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The funds' investment
adviser, Fidelity Management & Research Company (FMR), is responsible
for determining that the value of these underlying securities remains at
least equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the funds, along with other
registered investment companies having management contracts with FMR, may
transfer uninvested cash balances into a joint trading account. These
balances are invested in one or more repurchase agreements that are
collateralized by U.S. Treasury or Federal Agency obligations.
9. JOINT TRADING ACCOUNT.
At the end of the period, the U.S. Treasury fund had 20% or more of its
total investments in repurchase agreements through a joint trading account.
These repurchase agreements were with entities whose creditworthiness has
been reviewed and found satisfactory by FMR. The repurchase agreements were
dated January 31, 1994 and due February 1, 1994. The maturity values of the
joint trading account investments were $1,313,116,205 at 3.19% and
$37,653,366 at 3.22%.
The investments in repurchase agreements through the joint trading account
are summarized as follows:
MAXIMUM
AMOUNT AGGREGATE AGGREGATE AGGREGATE
NO. OF WITH ONE PRINCIPAL MATURITY MARKET COUPON MATURITY
DEALERS DEALER AMOUNT OF AMOUNT OF VALUE OF RATES OF DATES OF
OR BANKS OR BANK AGREEMENTS AGREEMENTS COLLATERAL COLLATERAL COLLATERAL
At 3.19% 10 18% $3,338,000,000 $3,338,295,424 $3,400,338,433 3.875%-12.375%
2/15/94-2/15/23
At 3.22% 3 41% 465,000,000 465,041,567 469,534,224 0%-11.25%
3/10/94-8/15/19
10. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, FMR receives a fee that
is computed daily at an annual rate of .50% of the fund's average net
assets.
SUB-ADVISER FEE. As each fund's investment sub-adviser, FMR Texas Inc., a
wholly owned subsidiary of FMR, receives a fee from FMR of 50% of the
management fee payable to FMR. The fees are paid prior to any voluntary
expense reimbursements which may be in effect, and after reducing the fee
for any payments by FMR pursuant to each fund's Distribution and Service
Plan.
DISTRIBUTION AND SERVICE PLAN. Pursuant to the Distribution and Service
Plans (the Plans), and in accordance with Rule 12b-1 of the 1940 Act, FMR
or the funds' distributor, Fidelity Distributors Corporation (FDC), an
affiliate of FMR, may use their resources to pay administrative and
promotional expenses related to the sale of each fund's shares. Subject to
the approval of the Board of Trustees, the Plans also authorize payments to
third parties that assist in the sale of each fund's shares or render
shareholder support services. FMR or FDC has informed the funds that
payments made to third parties under the Plans amounted to $1,969,651 and
$4,746,877 for the Money Market and U.S. Treasury funds, respectively, for
the period.
In connection with the Plan of Conversion, a new Management Contract, new
Sub-Advisory Agreement and new Distribution and Service Plan identical to
those previously in effect, became effective on September 29, 1993.
TRANSFER AGENT FEE. Fidelity Investments Institutional Operations Company
(FIIOC), an affiliate of FMR, is the funds' transfer, dividend disbursing
and shareholder servicing agent. FIIOC receives fees based on the type,
size, number of accounts and the number of transactions made by
shareholders. FIIOC pays for typesetting, printing and mailing of all
shareholder reports, except proxy statements.
ACCOUNTING FEE. Fidelity Service Co., an affiliate of FMR, maintains the
funds' accounting records. The fee is based on the level of average net
assets for the month plus out-of-pocket expenses.
11. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse the funds' operating expenses
(excluding interest, taxes, brokerage commissions and extraordinary
expenses) above an annual rate of .65% of average net assets. For the
period, the reimbursement reduced the expenses of the Money Market fund by
$20,307.
12. BENEFICIAL INTEREST.
At the end of the period, 2 shareholders were each record owners of more
than 10% of the total outstanding shares of the U. S. Treasury fund,
totaling 48%.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL INFORMATION OF THE
SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS
PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS. NEITHER THE FUND NOR
FIDELITY DISTRIBUTORS CORPORATION IS A
BANK AND FUND SHARES ARE NOT BACKED OR GUARANTEED BY ANY BANK OR INSURED BY
THE FDIC.
This page is to be BLANK - do not strip-in this type or the BAR at top of
page.
Thank you
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
SUB-ADVISER
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, PRESIDENT
J. Gary Burkhead, SENIOR VICE PRESIDENT
Gary L. French, TREASURER
John H. Costello, ASSISTANT TREASURER
Arthur S. Loring, SECRETARY
David H. Potel, ASSISTANT SECRETARY
TRUSTEES
J. Gary Burkhead
Ralph F. Cox
Phyllis Burke Davis
Richard J. Flynn
Edward C. Johnson 3d
E. Bradley Jones
Donald J. Kirk
Peter S. Lynch
Edward H. Malone
Marvin L. Mann
Gerald C. McDonough
Thomas R. Williams
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND
SHAREHOLDER
SERVICING AGENT
Fidelity Investments Institutional
Operations Company
Boston, MA
CUSTODIAN
Morgan Guaranty Trust Company of New York
New York, NY
DMF-3-94S
MANAGEMENT CONTRACT
between
DAILY MONEY FUND: Fidelity U.S. Treasury Income Portfolio
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this 30th day of September, 1993, by and between Daily
Money Fund, a Delaware business trust which may issue one or more series of
shares of beneficial interest (hereinafter called the "Fund"), on behalf of
Fidelity U.S. Treasury Income Portfolio (hereinafter called the
"Portfolio"), and Fidelity Management & Research Company, a
Massachusetts corporation (hereinafter called the "Adviser").
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision
of the Fund's Board of Trustees, direct the investments of the Portfolio in
accordance with the investment objective, policies and limitations as
provided in the Portfolio's Prospectus or other governing instruments, as
amended from time to time, the Investment Company Act of 1940 and rules
thereunder, as amended from time to time (the "1940 Act"), and such other
limitations as the Portfolio may impose by notice in writing to the
Adviser. The Adviser shall also furnish for the use of the Portfolio
office space and all necessary office facilities, equipment and personnel
for servicing the investments of the Portfolio; and shall pay the salaries
and fees of all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all personnel of
the Fund or the Adviser performing services relating to research,
statistical and investment activities. The Adviser is authorized, in its
discretion and without prior consultation with the Portfolio, to buy, sell,
lend and otherwise trade in any stocks, bonds and other securities and
investment instruments on behalf of the Portfolio. The investment policies
and all other actions of the Portfolio are and shall at all times be
subject to the control and direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for the
performance by its affiliates of) the management and administrative
services necessary for the operation of the Fund. The Adviser shall,
subject to the supervision of the Board of Trustees, perform various
services for the Portfolio, including but not limited to: (i) providing the
Portfolio with office space, equipment and facilities (which may be its
own) for maintaining its organization; (ii) on behalf of the Portfolio,
supervising relations with, and monitoring the performance of, custodians,
depositories, transfer and pricing agents, accountants, attorneys,
underwriters, brokers and dealers, insurers and other persons in any
capacity deemed to be necessary or desirable; (iii) preparing all general
shareholder communications, including shareholder reports; (iv) conducting
shareholder relations; (v) maintaining the Fund's existence and its
records; (vi) during such times as shares are publicly offered, maintaining
the registration and qualification of the Portfolio's shares under federal
and state law; and (vii) investigating the development of and developing
and implementing, if appropriate, management and shareholder services
designed to enhance the value or convenience of the Portfolio as an
investment vehicle.
The Adviser shall also furnish such reports, evaluations, information or
analyses to the Fund as the Fund's Board of Trustees may request from time
to time or as the Adviser may deem to be desirable. The Adviser shall make
recommendations to the Fund's Board of Trustees with respect to Fund
policies, and shall carry out such policies as are adopted by the Trustees.
The Adviser shall, subject to review by the Board of Trustees, furnish such
other services as the Adviser shall from time to time determine to be
necessary or useful to perform its obligations under this Contract.
(c) The Adviser undertakes to pay all expenses involved in the operations
of the Portfolio, except the following, which shall be paid by the
Portfolio: (i) taxes; (ii) the fees and expenses of all Trustees of the
Fund who are not "interested persons" of the Fund or the Adviser; (iii)
brokerage fees and commissions; (iv) interest expenses with respect to
borrowings by the Portfolio; and (v) such non-recurring and extraordinary
expenses as may arise, including actions, suits or proceedings to which the
Portfolio is or is threatened to be a party and the legal obligation that
the Portfolio may have to indemnify the Fund's Trustees and officers with
respect thereto. It is understood that service charges billed directly to
shareholders of the Portfolio, including charges for exchanges,
redemptions, and retained or other services, shall not be payable by the
Adviser, but may be received by the Adviser or its affiliates.
The Adviser, at its own expense, shall place all orders for the purchase
and sale of portfolio securities for the Portfolio's account with brokers
or dealers selected by the Adviser, which may include brokers or dealers
affiliated with the Adviser. The Adviser shall use its best efforts to
seek to execute portfolio transactions at prices which are advantageous to
the Portfolio and at commission rates which are reasonable in relation to
the benefits received. In selecting brokers or dealers qualified to
execute a particular transaction, brokers or dealers may be selected who
also provide brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934) to the Portfolio
and/or the other accounts over which the Adviser or its affiliates exercise
investment discretion. The Adviser is authorized to pay a broker or dealer
who provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess of
the amount of commission another broker or dealer would have charged for
effecting that transaction if the Adviser determines in good faith that
such amount of commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer. This
determination may be viewed in terms of either that particular transaction
or the overall responsibilities which the Adviser and its affiliates have
with respect to accounts over which they exercise investment discretion.
The Trustees of the Fund shall periodically review the commissions paid by
the Portfolio to determine if the commissions paid over representative
periods of time were reasonable in relation to the benefits to the
Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors,
officers or otherwise and that directors, officers and stockholders of the
Adviser are or may be or become similarly interested in the Fund, and that
the Adviser may be or become interested in the Fund as a shareholder or
otherwise.
3. For the services and facilities to be furnished hereunder, the Adviser
shall receive a management fee payable monthly as soon as practicable after
the last day of each month, at an annual rate of .42% of the average daily
net assets of the Portfolio (computed in the manner set forth in the Fund's
Trust Instrument) determined as of the close of business on each day
throughout the month; provided that the fee, so computed, shall be reduced
by the compensation, including reimbursement of expenses, paid by the
Portfolio to those Trustees who are not "interested persons" of the Fund or
the Adviser. In the case of initiation or termination of this Contract
during any month, the fee shall be reduced proportionately based on the
number of business days during which it is in effect and the fee computed
upon the average net assets for the business days it is so in effect for
that month.
4. 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.
5. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 5, this Contract shall continue in force until May 31, 1994
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 5, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to the Contract or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment of
any penalty, by action of its Trustees or Board of Directors, as the case
may be, or with respect to the Portfolio by vote of a majority of the
outstanding voting securities of the Portfolio. This Contract shall
terminate automatically in the event of its assignment.
6. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Trust Instrument and
agrees that the obligations assumed by the Fund pursuant to this Contract
shall be limited in all cases to the Portfolio and its assets, and the
Adviser shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio or any other Portfolio of
the Fund. In addition, the Adviser shall not seek satisfaction of any such
obligation from the Trustees or any individual Trustee. The Adviser
understands that the rights and obligations of any Portfolio under the
Trust Instrument are separate and distinct from those of any and all other
Portfolios.
7. This contract shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws 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.
DAILY MONEY FUND
on behalf of Fidelity U.S. Treasury Income Portfolio
SEAL By /S/J. Gary Burkhead
Senior V.P. of Fund
FIDELITY MANAGEMENT & RESEARCH COMPANY
SEAL By /S/J. Gary Burkhead
President
LG932500020
MANAGEMENT CONTRACT
between
DAILY MONEY FUND
Money Market Portfolio
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this 30th day of September 1993, by and between Daily Money
Fund, a Delaware business trust which may issue one or more series of
shares of beneficial interest (hereinafter called the "Fund"), on behalf of
Money Market Portfolio (hereinafter called the "Portfolio"), and Fidelity
Management & Research Company, a Massachusetts corporation (hereinafter
called the "Adviser").
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 Portfolios 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 each 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.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors,
officers or otherwise and that directors, officers and stockholders of the
Adviser are or may be or become similarly interested in the Fund, and that
the Adviser may be or become interested in the Fund as a shareholder or
otherwise.
3. For the services and facilities to be furnished hereunder, the Adviser
shall receive a management fee payable monthly as soon as practicable after
the last day of each month and equivalent to an annual rate of .50% of the
average daily net assets of the Portfolio.
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.
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Contract shall continue in force until May 31, 1994
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 Trust Instrument and
agrees that the obligations assumed by the Fund pursuant to this Contract
shall be limited in all cases to the Portfolio and its assets, and the
Adviser shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio or any other Portfolio of
the Fund. In addition, the Adviser shall not seek satisfaction of any such
obligation from the Trustees or any individual Trustee. The Adviser
understands that the rights and obligations of any Portfolio under the
Trust Instrument are separate and distinct from those of any and all other
Portfolios.
8. This contract 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.
DAILY MONEY FUND
on behalf of Money Market Portfolio
SEAL By: /S/J. Gary Burkhead
Senior Vice President
FIDELITY MANAGEMENT & RESEARCH COMPANY
SEAL By: /S/J. Gary Burkhead President
LG932510016
MANAGEMENT CONTRACT
between
DAILY MONEY FUND
U.S. Treasury Portfolio
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this 30th day of September 1993, by and between Daily Money
Fund, a Delaware business trust which may issue one or more series of
shares of beneficial interest (hereinafter called the "Fund"), on behalf of
U.S. Treasury Portfolio (hereinafter called the "Portfolio"), and Fidelity
Management & Research Company, a Massachusetts corporation (hereinafter
called the "Adviser").
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 Portfolios 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 each 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.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors,
officers or otherwise and that directors, officers and stockholders of the
Adviser are or may be or become similarly interested in the Fund, and that
the Adviser may be or become interested in the Fund as a shareholder or
otherwise.
3. For the services and facilities to be furnished hereunder, the Adviser
shall receive a management fee payable monthly as soon as practicable after
the last day of each month and equivalent to an annual rate of .50% of the
average daily net assets of the Portfolio.
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.
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Contract shall continue in force until May 31, 1994
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 Trust Instrument and
agrees that the obligations assumed by the Fund pursuant to this Contract
shall be limited in all cases to the Portfolio and its assets, and the
Adviser shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio or any other Portfolio of
the Fund. In addition, the Adviser shall not seek satisfaction of any such
obligation from the Trustees or any individual Trustee. The Adviser
understands that the rights and obligations of any Portfolio under the
Trust Instrument are separate and distinct from those of any and all other
Portfolios.
8. This contract 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.
DAILY MONEY FUND
on behalf of U.S. Treasury Portfolio
SEAL By: /S/J. Gary Burkhead Senior Vice President
FIDELITY MANAGEMENT & RESEARCH COMPANY
SEAL By: /S/J. Gary Burkhead
President
LG932510018
MANAGEMENT CONTRACT
between
DAILY MONEY FUND
CAPITAL RESERVES: Municipal Money Market Portfolio
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this 30th day of September, 1993, by and between Daily
Money Fund, a Delaware business trust which may issue one or more series of
shares of beneficial interest (hereinafter called the "Fund"), on behalf of
Capital Reserves: Municipal Money Market Portfolio (hereinafter called the
"Portfolio"), and Fidelity Management & Research Company, a
Massachusetts corporation (hereinafter called the "Adviser").
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 each Portfolio's shares under federal
and state law; and (vii) investigating the development of and developing
and implementing, if appropriate, management and shareholder services
designed to enhance the value or convenience of the Portfolio as an
investment vehicle.
The Adviser, at its own expense, shall 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 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.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors,
officers or otherwise and that directors, officers and stockholders of the
Adviser are or may be or become similarly interested in the Fund, and that
the Adviser may be or become interested in the Fund as a shareholder or
otherwise.
3. For the services and facilities to be furnished hereunder, the Adviser
shall receive a management fee payable monthly as soon as practicable after
the last day of each month and equivalent to an annual rate of .50% of the
average daily net assets of the Portfolio.
4. It is understood that the Portfolio will pay all their 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.
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Contract shall continue in force until May 31, 1994
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 Trust Instrument and
agrees that the obligations assumed by the Fund pursuant to this Contract
shall be limited in all cases to the Portfolio and their assets, and the
Adviser shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio or any other Portfolio of
the Fund. In addition, the Adviser shall not seek satisfaction of any such
obligation from the Trustees or any individual Trustee. The Adviser
understands that the rights and obligations of any Portfolio under the
Trust Instrument are separate and distinct from those of any and all other
Portfolio.
8. This contract 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 therof.
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.
DAILY MONEY FUND
on behalf of Capital Reserves:
Municipal Money Market Portfolio
SEAL By: /S/J. Gary Burkhead Senior Vice
President of Daily Money Fund
FIDELITY MANAGEMENT & RESEARCH COMPANY
SEAL By: /S/J. Gary Burkhead
President
Lg932460018
MANAGEMENT CONTRACT
between
DAILY MONEY FUND
CAPITAL RESERVES: Money Market Portfolio
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this 30th day of September, 1993, by and between Daily
Money Fund, a Delaware business trust which may issue one or more series of
shares of beneficial interest (hereinafter called the "Fund"), on behalf of
Capital Reserves: Money Market Portfolio (hereinafter called the
"Portfolio"), and Fidelity Management & Research Company, a
Massachusetts corporation (hereinafter called the "Adviser").
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 each Portfolio's shares under federal
and state law; and (vii) investigating the development of and developing
and implementing, if appropriate, management and shareholder services
designed to enhance the value or convenience of the Portfolio as an
investment vehicle.
The Adviser, at its own expense, shall 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 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.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors,
officers or otherwise and that directors, officers and stockholders of the
Adviser are or may be or become similarly interested in the Fund, and that
the Adviser may be or become interested in the Fund as a shareholder or
otherwise.
3. For the services and facilities to be furnished hereunder, the Adviser
shall receive a management fee payable monthly as soon as practicable after
the last day of each month and equivalent to an annual rate of .50% of the
average daily net assets of the Portfolio.
4. It is understood that the Portfolio will pay all their 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.
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Contract shall continue in force until May 31, 1994
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 Trust Instrument and
agrees that the obligations assumed by the Fund pursuant to this Contract
shall be limited in all cases to the Portfolio and their assets, and the
Adviser shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio or any other Portfolio of
the Fund. In addition, the Adviser shall not seek satisfaction of any such
obligation from the Trustees or any individual Trustee. The Adviser
understands that the rights and obligations of any Portfolio under the
Trust Instrument are separate and distinct from those of any and all other
Portfolio.
8. This contract 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.
DAILY MONEY FUND
on behalf of Capital Reserves:
Money Market Portfolio
SEAL By: /S/J. Gary Burkhead
Senior Vice President of Daily Money Fund
FIDELITY MANAGEMENT & RESEARCH COMPANY
SEAL By: /S/J. Gary Burkhead
President
LG932460017
MANAGEMENT CONTRACT
between
DAILY MONEY FUND
CAPITAL RESERVES: U.S Government Portfolio
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this 30th day of September, 1993, by and between Daily
Money Fund, a Delaware business trust which may issue one or more series of
shares of beneficial interest (hereinafter called the "Fund"), on behalf of
Capital Reserves: U. S Government Portfolio (hereinafter called the
"Portfolio"), and Fidelity Management & Research Company, a
Massachusetts corporation (hereinafter called the "Adviser").
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 each Portfolio's shares under federal
and state law; and (vii) investigating the development of and developing
and implementing, if appropriate, management and shareholder services
designed to enhance the value or convenience of the Portfolio as an
investment vehicle.
The Adviser, at its own expense, shall 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 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.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors,
officers or otherwise and that directors, officers and stockholders of the
Adviser are or may be or become similarly interested in the Fund, and that
the Adviser may be or become interested in the Fund as a shareholder or
otherwise.
3. For the services and facilities to be furnished hereunder, the Adviser
shall receive a management fee payable monthly as soon as practicable after
the last day of each month and equivalent to an annual rate of .50% of the
average daily net assets of the Portfolio.
4. It is understood that the Portfolio will pay all their 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.
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Contract shall continue in force until May 31, 1994
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 Trust Instrument and
agrees that the obligations assumed by the Fund pursuant to this Contract
shall be limited in all cases to the Portfolio and their assets, and the
Adviser shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio or any other Portfolio of
the Fund. In addition, the Adviser shall not seek satisfaction of any such
obligation from the Trustees or any individual Trustee. The Adviser
understands that the rights and obligations of any Portfolio under the
Trust Instrument are separate and distinct from those of any and all other
Portfolio.
8. This contract 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.
DAILY MONEY FUND
on behalf of Capital Reserves:
U.S Government Portfolio
SEAL By: /S/J. Gary Burkhead Senior Vice
President of Daily Money Fund
FIDELITY MANAGEMENT & RESEARCH COMPANY
SEAL By: /S/J. Gary Burkhead President
Lg932460016
SUB-ADVISORY AGREEMENT
between
FMR Texas Inc.
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this 30th day of September, 1993, by and between FMR Texas
Inc., a Texas corporation with principal offices at 400 East Las Colinas
Boulevard, Irving, Texas (hereinafter called the "Sub-Adviser") and
Fidelity Management & Research Company, a Massachusetts corporation
with principal offices at 82 Devonshire Street, Boston, Massachusetts
(hereinafter called the "Adviser").
WHEREAS the Adviser has entered into a Management Contract with Daily
Money Fund, a Delaware business trust which may issue one or more series of
shares of beneficial interest (hereinafter called the "Fund"), on behalf of
the Money Market Portfolio (hereinafter called the "Portfolio"), pursuant
to which the Adviser is to act as investment manager and adviser to the
Portfolio, and
WHEREAS the Sub-Adviser was formed for the purpose of providing investment
management of money market mutual funds, both taxable and tax-exempt,
advising generally with respect to money market instruments, and managing
or providing advice with respect to cash management.
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Adviser and the Sub-Adviser agree as follows:
1. (a) The Sub-Adviser shall, subject to the supervision of the Adviser,
direct the investments of 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 l940 and rules thereunder, as amended from
time to time (the "l940 Act"), and such other limitations as the Portfolio
may impose by notice in writing to the Adviser or Sub-Adviser. The
Sub-Adviser shall also furnish for the use of the Portfolio office space
and all necessary office facilities, equipment and personnel for servicing
the investments of the Portfolio; and shall pay the salaries and fees of
all personnel of the Sub-Adviser performing services for the Portfolio
relating to research, statistical and investment activities. The
Sub-Adviser is authorized, in its discretion and without prior consultation
with the Portfolio or the Adviser, to buy, sell, lend and otherwise trade
in any stocks, bonds and other securities and investment instruments on
behalf of the Portfolio. The investment policies and all other actions of
the Portfolio are and shall at all times be subject to the control and
direction of the Fund's Board of Trustees.
(b) The Sub-Adviser shall also furnish such reports, evaluations,
information or analyses to the Fund and the Adviser as the Fund's Board of
Trustees or the Adviser may request from time to time or as the Sub-Adviser
may deem to be desirable. The Sub-Adviser shall make recommendations to
the Fund's Board of Trustees with respect to Portfolio policies, and shall
carry out such policies as are adopted by the Trustees. The Sub-Adviser
shall, subject to review by the Board of Trustees, furnish such other
services as the Sub-Adviser shall from time to time determine to be
necessary or useful to perform its obligations under this Agreement and
which are not otherwise furnished by the Adviser.
(c) The Sub-Adviser, at its own expense, shall place all orders for the
purchase and sale of portfolio securities for the Portfolio's account with
brokers or dealers selected by the Sub-Adviser, which may include brokers
or dealers affiliated with the Adviser or Sub-Adviser. The Sub-Adviser
shall use its best efforts to seek to execute portfolio transactions at
prices which are advantageous to the Portfolio and at commission rates
which are reasonable in relation to the benefits received. In selecting
brokers or dealers qualified to execute a particular transaction, brokers
or dealers may be selected who also provide brokerage and research services
(as those terms are defined in Section 28(e) of the Securities Exchange Act
of l934) to the Portfolio and/or the other accounts over which the
Sub-Adviser, Adviser or their affiliates exercise investment discretion.
The Sub-Adviser is authorized to pay a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Sub-Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination
may be viewed in terms of either that particular transaction or the overall
responsibilities which the Sub-Adviser and its affiliates have with respect
to accounts over which they exercise investment discretion. The Trustees
of the Fund shall periodically review the commissions paid by the Portfolio
to determine if the commissions paid over representative periods of time
were reasonable in relation to the benefits to the Portfolio.
2. The Sub-Adviser will be compensated by the 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 50% of the management fee which
the Portfolio is obligated to pay the Adviser under the Portfolio's
Management Contract with the Adviser. Such fee shall not be reduced to
reflect expense reimbursements or fee waivers by the Adviser, if any, in
effect from time to time.
3. It is understood that Trustees, officers, and shareholders of the Fund
are or may be or become interested in the Adviser or the Sub-Adviser as
directors, officers or otherwise and that directors, officers and
stockholders of the Adviser or the Sub-Adviser are or may be or become
similarly interested in the Fund, and that the Adviser or the Sub-Adviser
may be or become interested in the Fund as a shareholder or otherwise.
4. It is understood that the Portfolio will pay all its expenses other
than those expressly stated to be payable by the Sub-Adviser hereunder or
by the Adviser under the Management Contract with the Portfolio, which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in
connection with the purchase or sale of securities and other investment
instruments; (iii) fees and expenses of the Fund's Trustees other than
those who are "interested persons" of the Fund, the Sub-Adviser or the
Adviser; (iv) legal and audit expenses; (v) custodian, registrar and
transfer agent fees and expenses; (vi) fees and expenses related to the
registration and qualification of the Fund and the Portfolio's shares for
distribution under state and federal securities laws; (vii) expenses of
printing and mailing reports and notices and proxy material to shareholders
of the Portfolio; (viii) all other expenses incidental to holding meetings
of the Portfolio's shareholders, including proxy solicitations therefor;
(ix) a pro rata share, based on relative net assets of the Portfolio and
other registered investment companies having Advisory and Service or
Management Contracts with the Adviser, of 50% of insurance premiums for
fidelity and other coverage; (x) its proportionate share of association
membership dues; (xi) expenses of typesetting for printing Prospectuses and
Statements of Additional Information and supplements thereto; (xii)
expenses of printing and mailing Prospectuses and Statements of Additional
Information and supplements thereto sent to existing shareholders; and
(xiii) such non-recurring or extraordinary expenses as may arise, including
those relating to actions, suits or proceedings to which the Portfolio is a
party and the legal obligation which the Portfolio may have to indemnify
the Fund's Trustees and officers with respect thereto.
5. The Services of the Sub-Adviser to the Adviser are not to be deemed to
be exclusive, the Sub-Adviser being free to render services to others and
engage in other activities, provided, however, that such other services and
activities do not, during the term of this Agreement, interfere, in a
material manner, with the Sub-Adviser's ability to meet all of its
obligations with respect to rendering investment advice hereunder. The
Sub-Adviser shall for all purposes be an independent contractor and not an
agent or employee of the Adviser or the Fund. 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 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.
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Agreement shall continue in force until May 31, 1994
and indefinitely thereafter, but only so long as the continuance after such
period shall be specifically approved at least annually by vote of the
Fund's Board of Trustees or by vote of a majority of the outstanding voting
securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Adviser, the
Sub-Adviser and the Portfolio, such consent on the part of the Portfolio to
be authorized by vote of a majority of the outstanding voting securities of
the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 6, the terms of any continuance or modification of the Agreement
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to such Agreement or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on
such approval.
(d) Either the Adviser, the Sub-Adviser or the Portfolio may, at any time
on sixty (60) days' prior written notice to the other parties, terminate
this Agreement, without payment of any penalty, by action of its Board of
Trustees or Directors, or by vote of a majority of its outstanding voting
securities. This Agreement shall terminate automatically in the event of
its assignment.
7. The Sub-Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Trust Instrument or other
organizational document of the Fund and agrees that any obligations of the
Fund or the Portfolio arising in connection with this Agreement shall be
limited in all cases to the Portfolio and its assets, and the Sub-Adviser
shall not seek satisfaction of any such obligation from the shareholders or
any shareholder of the Portfolio. Nor shall the Sub-Adviser seek
satisfaction of any such obligation from the Trustees or any individual
Trustee.
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 "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.
FMR TEXAS INC.
By: /S/Charles F. Donbush
Treasurer
FIDELITY MANAGEMENT & RESEARCH COMPANY
By: /S/J. Gary Burkhead
President
LG932510023
SUB-ADVISORY AGREEMENT
between
FMR Texas Inc.
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this 30th day of September, 1993, by and between FMR Texas
Inc., a Texas corporation with principal offices at 400 East Las Colinas
Boulevard, Irving, Texas (hereinafter called the "Sub-Adviser") and
Fidelity Management & Research Company, a Massachusetts corporation
with principal offices at 82 Devonshire Street, Boston, Massachusetts
(hereinafter called the "Adviser").
WHEREAS the Adviser has entered into a Management Contract with Daily
Money Fund, a Delaware business trust which may issue one or more series of
shares of beneficial interest (hereinafter called the "Fund"), on behalf of
the U.S. Treasury Portfolio (hereinafter called the "Portfolio"), pursuant
to which the Adviser is to act as investment manager and adviser to the
Portfolio, and
WHEREAS the Sub-Adviser was formed for the purpose of providing investment
management of money market mutual funds, both taxable and tax-exempt,
advising generally with respect to money market instruments, and managing
or providing advice with respect to cash management.
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Adviser and the Sub-Adviser agree as follows:
1. (a) The Sub-Adviser shall, subject to the supervision of the Adviser,
direct the investments of 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 l940 and rules thereunder, as amended from
time to time (the "l940 Act"), and such other limitations as the Portfolio
may impose by notice in writing to the Adviser or Sub-Adviser. The
Sub-Adviser shall also furnish for the use of the Portfolio office space
and all necessary office facilities, equipment and personnel for servicing
the investments of the Portfolio; and shall pay the salaries and fees of
all personnel of the Sub-Adviser performing services for the Portfolio
relating to research, statistical and investment activities. The
Sub-Adviser is authorized, in its discretion and without prior consultation
with the Portfolio or the Adviser, to buy, sell, lend and otherwise trade
in any stocks, bonds and other securities and investment instruments on
behalf of the Portfolio. The investment policies and all other actions of
the Portfolio are and shall at all times be subject to the control and
direction of the Fund's Board of Trustees.
(b) The Sub-Adviser shall also furnish such reports, evaluations,
information or analyses to the Fund and the Adviser as the Fund's Board of
Trustees or the Adviser may request from time to time or as the Sub-Adviser
may deem to be desirable. The Sub-Adviser shall make recommendations to
the Fund's Board of Trustees with respect to Portfolio policies, and shall
carry out such policies as are adopted by the Trustees. The Sub-Adviser
shall, subject to review by the Board of Trustees, furnish such other
services as the Sub-Adviser shall from time to time determine to be
necessary or useful to perform its obligations under this Agreement and
which are not otherwise furnished by the Adviser.
(c) The Sub-Adviser, at its own expense, shall place all orders for the
purchase and sale of portfolio securities for the Portfolio's account with
brokers or dealers selected by the Sub-Adviser, which may include brokers
or dealers affiliated with the Adviser or Sub-Adviser. The Sub-Adviser
shall use its best efforts to seek to execute portfolio transactions at
prices which are advantageous to the Portfolio and at commission rates
which are reasonable in relation to the benefits received. In selecting
brokers or dealers qualified to execute a particular transaction, brokers
or dealers may be selected who also provide brokerage and research services
(as those terms are defined in Section 28(e) of the Securities Exchange Act
of l934) to the Portfolio and/or the other accounts over which the
Sub-Adviser, Adviser or their affiliates exercise investment discretion.
The Sub-Adviser is authorized to pay a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Sub-Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination
may be viewed in terms of either that particular transaction or the overall
responsibilities which the Sub-Adviser and its affiliates have with respect
to accounts over which they exercise investment discretion. The Trustees
of the Fund shall periodically review the commissions paid by the Portfolio
to determine if the commissions paid over representative periods of time
were reasonable in relation to the benefits to the Portfolio.
2. The Sub-Adviser will be compensated by the 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 50% of the management fee which
the Portfolio is obligated to pay the Adviser under the Portfolio's
Management Contract with the Adviser. Such fee shall not be reduced to
reflect expense reimbursements or fee waivers by the Adviser, if any, in
effect from time to time.
3. It is understood that Trustees, officers, and shareholders of the Fund
are or may be or become interested in the Adviser or the Sub-Adviser as
directors, officers or otherwise and that directors, officers and
stockholders of the Adviser or the Sub-Adviser are or may be or become
similarly interested in the Fund, and that the Adviser or the Sub-Adviser
may be or become interested in the Fund as a shareholder or otherwise.
4. It is understood that the Portfolio will pay all its expenses other
than those expressly stated to be payable by the Sub-Adviser hereunder or
by the Adviser under the Management Contract with the Portfolio, which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in
connection with the purchase or sale of securities and other investment
instruments; (iii) fees and expenses of the Fund's Trustees other than
those who are "interested persons" of the Fund, the Sub-Adviser or the
Adviser; (iv) legal and audit expenses; (v) custodian, registrar and
transfer agent fees and expenses; (vi) fees and expenses related to the
registration and qualification of the Fund and the Portfolio's shares for
distribution under state and federal securities laws; (vii) expenses of
printing and mailing reports and notices and proxy material to shareholders
of the Portfolio; (viii) all other expenses incidental to holding meetings
of the Portfolio's shareholders, including proxy solicitations therefor;
(ix) a pro rata share, based on relative net assets of the Portfolio and
other registered investment companies having Advisory and Service or
Management Contracts with the Adviser, of 50% of insurance premiums for
fidelity and other coverage; (x) its proportionate share of association
membership dues; (xi) expenses of typesetting for printing Prospectuses and
Statements of Additional Information and supplements thereto; (xii)
expenses of printing and mailing Prospectuses and Statements of Additional
Information and supplements thereto sent to existing shareholders; and
(xiii) such non-recurring or extraordinary expenses as may arise, including
those relating to actions, suits or proceedings to which the Portfolio is a
party and the legal obligation which the Portfolio may have to indemnify
the Fund's Trustees and officers with respect thereto.
5. The Services of the Sub-Adviser to the Adviser are not to be deemed to
be exclusive, the Sub-Adviser being free to render services to others and
engage in other activities, provided, however, that such other services and
activities do not, during the term of this Agreement, interfere, in a
material manner, with the Sub-Adviser's ability to meet all of its
obligations with respect to rendering investment advice hereunder. The
Sub-Adviser shall for all purposes be an independent contractor and not an
agent or employee of the Adviser or the Fund. 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 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.
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Agreement shall continue in force until May 31, 1994
and indefinitely thereafter, but only so long as the continuance after such
period shall be specifically approved at least annually by vote of the
Fund's Board of Trustees or by vote of a majority of the outstanding voting
securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Adviser, the
Sub-Adviser and the Portfolio, such consent on the part of the Portfolio to
be authorized by vote of a majority of the outstanding voting securities of
the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 6, the terms of any continuance or modification of the Agreement
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to such Agreement or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on
such approval.
(d) Either the Adviser, the Sub-Adviser or the Portfolio may, at any time
on sixty (60) days' prior written notice to the other parties, terminate
this Agreement, without payment of any penalty, by action of its Board of
Trustees or Directors, or by vote of a majority of its outstanding voting
securities. This Agreement shall terminate automatically in the event of
its assignment.
7. The Sub-Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Trust Instrument or other
organizational document of the Fund and agrees that any obligations of the
Fund or the Portfolio arising in connection with this Agreement shall be
limited in all cases to the Portfolio and its assets, and the Sub-Adviser
shall not seek satisfaction of any such obligation from the shareholders or
any shareholder of the Portfolio. Nor shall the Sub-Adviser seek
satisfaction of any such obligation from the Trustees or any individual
Trustee.
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 "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.
FMR TEXAS INC.
By: /S/Charles F. Dornbush
Treasurer
FIDELITY MANAGEMENT & RESEARCH COMPANY
By: /S/J. Gary Burkhead President
LG932510024
SUB-ADVISORY AGREEMENT
between
FMR Texas Inc.
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this 30th day of September, 1993, by and between FMR Texas
Inc., a Texas corporation with principal offices at 400 East Las Colinas
Boulevard, Irving, Texas (hereinafter called the "Sub-Adviser") and
Fidelity Management & Research Company, a Massachusetts corporation
with principal offices at 82 Devonshire Street, Boston, Massachusetts
(hereinafter called the "Adviser").
WHEREAS the Adviser has entered into a Management Contract with Daily
Money Fund, a Delaware business trust which may issue one or more series of
shares of beneficial interest (hereinafter called the "Fund"), on behalf of
Capital Reserves: Money Market Portfolio (hereinafter called the
"Portfolio"), pursuant to which the Adviser is to act as investment manager
and adviser to the Portfolio, and
WHEREAS the Sub-Adviser was formed for the purpose of providing investment
management of money market mutual funds, both taxable and tax-exempt,
advising generally with respect to money market instruments, and managing
or providing advice with respect to cash management.
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Adviser and the Sub-Adviser agree as follows:
1. (a) The Sub-Adviser shall, subject to the supervision of the Adviser,
direct the investments of 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 l940 and rules thereunder, as amended from
time to time (the "l940 Act"), and such other limitations as the Portfolio
may impose by notice in writing to the Adviser or Sub-Adviser. The
Sub-Adviser shall also furnish for the use of the Portfolio office space
and all necessary office facilities, equipment and personnel for servicing
the investments of the Portfolio; and shall pay the salaries and fees of
all personnel of the Sub-Adviser performing services for the Portfolio
relating to research, statistical and investment activities. The
Sub-Adviser is authorized, in its discretion and without prior consultation
with the Portfolio or the Adviser, to buy, sell, lend and otherwise trade
in any stocks, bonds and other securities and investment instruments on
behalf of the Portfolio. The investment policies and all other actions of
the Portfolio are and shall at all times be subject to the control and
direction of the Fund's Board of Trustees.
(b) The Sub-Adviser shall also furnish such reports, evaluations,
information or analyses to the Fund and the Adviser as the Fund's Board of
Trustees or the Adviser may request from time to time or as the Sub-Adviser
may deem to be desirable. The Sub-Adviser shall make recommendations to
the Fund's Board of Trustees with respect to Portfolio policies, and shall
carry out such policies as are adopted by the Trustees. The Sub-Adviser
shall, subject to review by the Board of Trustees, furnish such other
services as the Sub-Adviser shall from time to time determine to be
necessary or useful to perform its obligations under this Agreement and
which are not otherwise furnished by the Adviser.
(c) The Sub-Adviser, at its own expense, shall place all orders for the
purchase and sale of portfolio securities for the Portfolio's account with
brokers or dealers selected by the Sub-Adviser, which may include brokers
or dealers affiliated with the Adviser or Sub-Adviser. The Sub-Adviser
shall use its best efforts to seek to execute portfolio transactions at
prices which are advantageous to the Portfolio and at commission rates
which are reasonable in relation to the benefits received. In selecting
brokers or dealers qualified to execute a particular transaction, brokers
or dealers may be selected who also provide brokerage and research services
(as those terms are defined in Section 28(e) of the Securities Exchange Act
of l934) to the Portfolio and/or the other accounts over which the
Sub-Adviser, Adviser or their affiliates exercise investment discretion.
The Sub-Adviser is authorized to pay a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Sub-Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination
may be viewed in terms of either that particular transaction or the overall
responsibilities which the Sub-Adviser and its affiliates have with respect
to accounts over which they exercise investment discretion. The Trustees
of the Fund shall periodically review the commissions paid by the Portfolio
to determine if the commissions paid over representative periods of time
were reasonable in relation to the benefits to the Portfolio.
2. The Sub-Adviser will be compensated by the 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 50% of the management fee which
the Portfolio are obligated to pay the Adviser under the Portfolio's
Management Contract with the Adviser. Such fee shall not be reduced to
reflect expense reimbursements or fee waivers by the Adviser, if any, in
effect from time to time.
3. It is understood that Trustees, officers, and shareholders of the Fund
are or may be or become interested in the Adviser or the Sub-Adviser as
directors, officers or otherwise and that directors, officers and
stockholders of the Adviser or the Sub-Adviser are or may be or become
similarly interested in the Fund, and that the Adviser or the Sub-Adviser
may be or become interested in the Fund as a shareholder or otherwise.
4. It is understood that the Portfolio will pay all their expenses other
than those expressly stated to be payable by the Sub-Adviser hereunder or
by the Adviser under the Management Contract with the Portfolio, which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in
connection with the purchase or sale of securities and other investment
instruments; (iii) fees and expenses of the Fund's Trustees other than
those who are "interested persons" of the Fund, the Sub-Adviser or the
Adviser; (iv) legal and audit expenses; (v) custodian, registrar and
transfer agent fees and expenses; (vi) fees and expenses related to the
registration and qualification of the Fund and the Portfolio's shares for
distribution under state and federal securities laws; (vii) expenses of
printing and mailing reports and notices and proxy material to shareholders
of the Portfolio; (viii) all other expenses incidental to holding meetings
of the Portfolio's shareholders, including proxy solicitations therefor;
(ix) a pro rata share, based on relative net assets of the Portfolio and
other registered investment companies having Advisory and Service or
Management Contract 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 are
a party and the legal obligation which the Portfolio may have to indemnify
the Fund's Trustees and officers with respect thereto.
5. The Services of the Sub-Adviser to the Adviser are not to be deemed to
be exclusive, the Sub-Adviser being free to render services to others and
engage in other activities, provided, however, that such other services and
activities do not, during the term of this Agreement, interfere, in a
material manner, with the Sub-Adviser's ability to meet all of its
obligations with respect to rendering investment advice hereunder. The
Sub-Adviser shall for all purposes be an independent contractor and not an
agent or employee of the Adviser or the Fund. 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 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.
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Agreement shall continue in force until May 31, 1994
and indefinitely thereafter, but only so long as the continuance after such
period shall be specifically approved at least annually by vote of the
Fund's Board of Trustees or by vote of a majority of the outstanding voting
securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Adviser, the
Sub-Adviser and the Portfolio, such consent on the part of the Portfolio to
be authorized by vote of a majority of the outstanding voting securities of
the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 6, the terms of any continuance or modification of the Agreement
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to such Agreement or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on
such approval.
(d) Either the Adviser, the Sub-Adviser or the Portfolio may, at any time
on sixty (60) days' prior written notice to the other parties, terminate
this Agreement, without payment of any penalty, by action of its Board of
Trustees or Directors, or by vote of a majority of its outstanding voting
securities. This Agreement shall terminate automatically in the event of
its assignment.
7. The Sub-Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Trust Instrumentof the Fund and
agrees that any obligations of the Fund or the Portfolio arising in
connection with this Agreement shall be limited in all cases to the
Portfolio and their 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.
8. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.
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.
FMR TEXAS INC.
By /S/Charles F. Dornbush
Treasurer
FIDELITY MANAGEMENT & RESEARCH COMPANY
By /S/J. Gary Burkhead
President
Lg932460036
SUB-ADVISORY AGREEMENT
between
FMR Texas Inc.
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this 30th day of September, 1993, by and between FMR Texas
Inc., a Texas corporation with principal offices at 400 East Las Colinas
Boulevard, Irving, Texas (hereinafter called the "Sub-Adviser") and
Fidelity Management & Research Company, a Massachusetts corporation
with principal offices at 82 Devonshire Street, Boston, Massachusetts
(hereinafter called the "Adviser").
WHEREAS the Adviser has entered into a Management Contract with Daily
Money Fund, a Delaware business trust which may issue one or more series of
shares of beneficial interest (hereinafter called the "Fund"), on behalf of
Capital Reserves: U.S. Government Portfolio (hereinafter called the
"Portfolio"), pursuant to which the Adviser is to act as investment manager
and adviser to the Portfolio, and
WHEREAS the Sub-Adviser was formed for the purpose of providing investment
management of money market mutual funds, both taxable and tax-exempt,
advising generally with respect to money market instruments, and managing
or providing advice with respect to cash management.
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Adviser and the Sub-Adviser agree as follows:
1. (a) The Sub-Adviser shall, subject to the supervision of the Adviser,
direct the investments of 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 l940 and rules thereunder, as amended from
time to time (the "l940 Act"), and such other limitations as the Portfolio
may impose by notice in writing to the Adviser or Sub-Adviser. The
Sub-Adviser shall also furnish for the use of the Portfolio office space
and all necessary office facilities, equipment and personnel for servicing
the investments of the Portfolio; and shall pay the salaries and fees of
all personnel of the Sub-Adviser performing services for the Portfolio
relating to research, statistical and investment activities. The
Sub-Adviser is authorized, in its discretion and without prior consultation
with the Portfolio or the Adviser, to buy, sell, lend and otherwise trade
in any stocks, bonds and other securities and investment instruments on
behalf of the Portfolio. The investment policies and all other actions of
the Portfolio are and shall at all times be subject to the control and
direction of the Fund's Board of Trustees.
(b) The Sub-Adviser shall also furnish such reports, evaluations,
information or analyses to the Fund and the Adviser as the Fund's Board of
Trustees or the Adviser may request from time to time or as the Sub-Adviser
may deem to be desirable. The Sub-Adviser shall make recommendations to
the Fund's Board of Trustees with respect to Portfolio policies, and shall
carry out such policies as are adopted by the Trustees. The Sub-Adviser
shall, subject to review by the Board of Trustees, furnish such other
services as the Sub-Adviser shall from time to time determine to be
necessary or useful to perform its obligations under this Agreement and
which are not otherwise furnished by the Adviser.
(c) The Sub-Adviser, at its own expense, shall place all orders for the
purchase and sale of portfolio securities for the Portfolio's account with
brokers or dealers selected by the Sub-Adviser, which may include brokers
or dealers affiliated with the Adviser or Sub-Adviser. The Sub-Adviser
shall use its best efforts to seek to execute portfolio transactions at
prices which are advantageous to the Portfolio and at commission rates
which are reasonable in relation to the benefits received. In selecting
brokers or dealers qualified to execute a particular transaction, brokers
or dealers may be selected who also provide brokerage and research services
(as those terms are defined in Section 28(e) of the Securities Exchange Act
of l934) to the Portfolio and/or the other accounts over which the
Sub-Adviser, Adviser or their affiliates exercise investment discretion.
The Sub-Adviser is authorized to pay a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Sub-Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination
may be viewed in terms of either that particular transaction or the overall
responsibilities which the Sub-Adviser and its affiliates have with respect
to accounts over which they exercise investment discretion. The Trustees
of the Fund shall periodically review the commissions paid by the Portfolio
to determine if the commissions paid over representative periods of time
were reasonable in relation to the benefits to the Portfolio.
2. The Sub-Adviser will be compensated by the 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 50% of the management fee which
the Portfolio are obligated to pay the Adviser under the Portfolio's
Management Contract with the Adviser. Such fee shall not be reduced to
reflect expense reimbursements or fee waivers by the Adviser, if any, in
effect from time to time.
3. It is understood that Trustees, officers, and shareholders of the Fund
are or may be or become interested in the Adviser or the Sub-Adviser as
directors, officers or otherwise and that directors, officers and
stockholders of the Adviser or the Sub-Adviser are or may be or become
similarly interested in the Fund, and that the Adviser or the Sub-Adviser
may be or become interested in the Fund as a shareholder or otherwise.
4. It is understood that the Portfolio will pay all their expenses other
than those expressly stated to be payable by the Sub-Adviser hereunder or
by the Adviser under the Management Contract with the Portfolio, which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in
connection with the purchase or sale of securities and other investment
instruments; (iii) fees and expenses of the Fund's Trustees other than
those who are "interested persons" of the Fund, the Sub-Adviser or the
Adviser; (iv) legal and audit expenses; (v) custodian, registrar and
transfer agent fees and expenses; (vi) fees and expenses related to the
registration and qualification of the Fund and the Portfolio's shares for
distribution under state and federal securities laws; (vii) expenses of
printing and mailing reports and notices and proxy material to shareholders
of the Portfolio; (viii) all other expenses incidental to holding meetings
of the Portfolio's shareholders, including proxy solicitations therefor;
(ix) a pro rata share, based on relative net assets of the Portfolio and
other registered investment companies having Advisory and Service or
Management Contract 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 are
a party and the legal obligation which the Portfolio may have to indemnify
the Fund's Trustees and officers with respect thereto.
5. The Services of the Sub-Adviser to the Adviser are not to be deemed to
be exclusive, the Sub-Adviser being free to render services to others and
engage in other activities, provided, however, that such other services and
activities do not, during the term of this Agreement, interfere, in a
material manner, with the Sub-Adviser's ability to meet all of its
obligations with respect to rendering investment advice hereunder. The
Sub-Adviser shall for all purposes be an independent contractor and not an
agent or employee of the Adviser or the Fund. 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 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.
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Agreement shall continue in force until May 31, 1994
and indefinitely thereafter, but only so long as the continuance after such
period shall be specifically approved at least annually by vote of the
Fund's Board of Trustees or by vote of a majority of the outstanding voting
securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Adviser, the
Sub-Adviser and the Portfolio, such consent on the part of the Portfolio to
be authorized by vote of a majority of the outstanding voting securities of
the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 6, the terms of any continuance or modification of the Agreement
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to such Agreement or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on
such approval.
(d) Either the Adviser, the Sub-Adviser or the Portfolio may, at any time
on sixty (60) days' prior written notice to the other parties, terminate
this Agreement, without payment of any penalty, by action of its Board of
Trustees or Directors, or by vote of a majority of its outstanding voting
securities. This Agreement shall terminate automatically in the event of
its assignment.
7. The Sub-Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Trust Instrument of the Fund and
agrees that any obligations of the Fund or the Portfolio arising in
connection with this Agreement shall be limited in all cases to the
Portfolio and their 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.
8. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.
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.
FMR TEXAS INC.
By /S/Charles F. Dornbush
Treasurer
FIDELITY MANAGEMENT & RESEARCH COMPANY
By /S/J. Gary Burkhead
President
LG932460034
SUB-ADVISORY AGREEMENT
between
FMR Texas Inc.
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this 30th day of September, 1994, by and between FMR Texas
Inc., a Texas corporation with principal offices at 400 East Las Colinas
Boulevard, Irving, Texas (hereinafter called the "Sub-Adviser") and
Fidelity Management & Research Company, a Massachusetts corporation
with principal offices at 82 Devonshire Street, Boston, Massachusetts
(hereinafter called the "Adviser").
WHEREAS the Adviser has entered into a Management Contract with Daily
Money Fund, a Delaware business trust which may issue one or more series of
shares of beneficial interest (hereinafter called the "Fund"), on behalf of
Capital Reserves: Municipal Money Market Portfolio (hereinafter called the
"Portfolio"), pursuant to which the Adviser is to act as investment manager
and adviser to the Portfolio, and
WHEREAS the Sub-Adviser was formed for the purpose of providing investment
management of money market mutual funds, both taxable and tax-exempt,
advising generally with respect to money market instruments, and managing
or providing advice with respect to cash management.
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Adviser and the Sub-Adviser agree as follows:
1. (a) The Sub-Adviser shall, subject to the supervision of the Adviser,
direct the investments of 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 l940 and rules thereunder, as amended from
time to time (the "l940 Act"), and such other limitations as the Portfolio
may impose by notice in writing to the Adviser or Sub-Adviser. The
Sub-Adviser shall also furnish for the use of the Portfolio office space
and all necessary office facilities, equipment and personnel for servicing
the investments of the Portfolio; and shall pay the salaries and fees of
all personnel of the Sub-Adviser performing services for the Portfolio
relating to research, statistical and investment activities. The
Sub-Adviser is authorized, in its discretion and without prior consultation
with the Portfolio or the Adviser, to buy, sell, lend and otherwise trade
in any stocks, bonds and other securities and investment instruments on
behalf of the Portfolio. The investment policies and all other actions of
the Portfolio are and shall at all times be subject to the control and
direction of the Fund's Board of Trustees.
(b) The Sub-Adviser shall also furnish such reports, evaluations,
information or analyses to the Fund and the Adviser as the Fund's Board of
Trustees or the Adviser may request from time to time or as the Sub-Adviser
may deem to be desirable. The Sub-Adviser shall make recommendations to
the Fund's Board of Trustees with respect to Portfolio policies, and shall
carry out such policies as are adopted by the Trustees. The Sub-Adviser
shall, subject to review by the Board of Trustees, furnish such other
services as the Sub-Adviser shall from time to time determine to be
necessary or useful to perform its obligations under this Agreement and
which are not otherwise furnished by the Adviser.
(c) The Sub-Adviser, at its own expense, shall place all orders for the
purchase and sale of portfolio securities for the Portfolio's account with
brokers or dealers selected by the Sub-Adviser, which may include brokers
or dealers affiliated with the Adviser or Sub-Adviser. The Sub-Adviser
shall use its best efforts to seek to execute portfolio transactions at
prices which are advantageous to the Portfolio and at commission rates
which are reasonable in relation to the benefits received. In selecting
brokers or dealers qualified to execute a particular transaction, brokers
or dealers may be selected who also provide brokerage and research services
(as those terms are defined in Section 28(e) of the Securities Exchange Act
of l934) to the Portfolio and/or the other accounts over which the
Sub-Adviser, Adviser or their affiliates exercise investment discretion.
The Sub-Adviser is authorized to pay a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Sub-Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination
may be viewed in terms of either that particular transaction or the overall
responsibilities which the Sub-Adviser and its affiliates have with respect
to accounts over which they exercise investment discretion. The Trustees
of the Fund shall periodically review the commissions paid by the Portfolio
to determine if the commissions paid over representative periods of time
were reasonable in relation to the benefits to the Portfolio.
2. The Sub-Adviser will be compensated by the 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 50% of the management fee which
the Portfolio are obligated to pay the Adviser under the Portfolio's
Management Contract with the Adviser. Such fee shall not be reduced to
reflect expense reimbursements or fee waivers by the Adviser, if any, in
effect from time to time.
3. It is understood that Trustees, officers, and shareholders of the Fund
are or may be or become interested in the Adviser or the Sub-Adviser as
directors, officers or otherwise and that directors, officers and
stockholders of the Adviser or the Sub-Adviser are or may be or become
similarly interested in the Fund, and that the Adviser or the Sub-Adviser
may be or become interested in the Fund as a shareholder or otherwise.
4. It is understood that the Portfolio will pay all their expenses other
than those expressly stated to be payable by the Sub-Adviser hereunder or
by the Adviser under the Management Contract with the Portfolio, which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in
connection with the purchase or sale of securities and other investment
instruments; (iii) fees and expenses of the Fund's Trustees other than
those who are "interested persons" of the Fund, the Sub-Adviser or the
Adviser; (iv) legal and audit expenses; (v) custodian, registrar and
transfer agent fees and expenses; (vi) fees and expenses related to the
registration and qualification of the Fund and the Portfolio's shares for
distribution under state and federal securities laws; (vii) expenses of
printing and mailing reports and notices and proxy material to shareholders
of the Portfolio; (viii) all other expenses incidental to holding meetings
of the Portfolio's shareholders, including proxy solicitations therefor;
(ix) a pro rata share, based on relative net assets of the Portfolio and
other registered investment companies having Advisory and Service or
Management Contract 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 are
a party and the legal obligation which the Portfolio may have to indemnify
the Fund's Trustees and officers with respect thereto.
5. The Services of the Sub-Adviser to the Adviser are not to be deemed to
be exclusive, the Sub-Adviser being free to render services to others and
engage in other activities, provided, however, that such other services and
activities do not, during the term of this Agreement, interfere, in a
material manner, with the Sub-Adviser's ability to meet all of its
obligations with respect to rendering investment advice hereunder. The
Sub-Adviser shall for all purposes be an independent contractor and not an
agent or employee of the Adviser or the Fund. 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 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.
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Agreement shall continue in force until May 31, 1994
and indefinitely thereafter, but only so long as the continuance after such
period shall be specifically approved at least annually by vote of the
Fund's Board of Trustees or by vote of a majority of the outstanding voting
securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Adviser, the
Sub-Adviser and the Portfolio, such consent on the part of the Portfolio to
be authorized by vote of a majority of the outstanding voting securities of
the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 6, the terms of any continuance or modification of the Agreement
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to such Agreement or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on
such approval.
(d) Either the Adviser, the Sub-Adviser or the Portfolio may, at any time
on sixty (60) days' prior written notice to the other parties, terminate
this Agreement, without payment of any penalty, by action of its Board of
Trustees or Directors, or by vote of a majority of its outstanding voting
securities. This Agreement shall terminate automatically in the event of
its assignment.
7. The Sub-Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Trust Instrument of the Fund and
agrees that any obligations of the Fund or the Portfolio arising in
connection with this Agreement shall be limited in all cases to the
Portfolio and their 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.
8. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.
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.
FMR TEXAS INC.
By /S/Charles F. Dornbush
Treasurer
FIDELITY MANAGEMENT & RESEARCH COMPANY
By /s/J. Gary Burkhead
President
LG932460039
SUB-ADVISORY AGREEMENT
between
FMR Texas Inc.
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this 30th day of September, 1993, by and between FMR Texas
Inc., a Texas corporation with principal offices at 400 East Las Colinas
Boulevard, Irving, Texas (hereinafter called the "Sub-Adviser") and
Fidelity Management & Research Company, a Massachusetts corporation
with principal offices at 82 Devonshire Street, Boston, Massachusetts
(hereinafter called the "Adviser").
WHEREAS the Adviser has entered into a Management Contract with Daily
Money Fund, a Delaware business trust which may issue one or more series of
shares of beneficial interest (hereinafter called the "Fund"), on behalf of
Fidelity U.S. Treasury Income Portfolio (hereinafter called the
"Portfolio"), pursuant to which the Adviser is to act as investment manager
and adviser to the Portfolio, and
WHEREAS the Sub-Adviser was formed for the purpose of providing investment
management of money market mutual funds, both taxable and tax-exempt,
advising generally with respect to money market instruments, and managing
or providing advice with respect to cash management.
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Adviser and the Sub-Adviser agree as follows:
1. (a) The Sub-Adviser shall, subject to the supervision of the Adviser,
direct the investments of 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 or Sub-Adviser. The
Sub-Adviser shall also furnish for the use of the Portfolio office space
and all necessary office facilities, equipment and personnel for servicing
the investments of the Portfolio; and shall pay the salaries and fees of
all personnel of the Sub-Adviser performing services for the Portfolio
relating to research, statistical and investment activities. The
Sub-Adviser is authorized, in its discretion and without prior consultation
with the Portfolio or the Adviser, to buy, sell, lend and otherwise trade
in any stocks, bonds and other securities and investment instruments on
behalf of the Portfolio. The investment policies and all other actions of
the Portfolio are and shall at all times be subject to the control and
direction of the Fund's Board of Trustees.
(b) The Sub-Adviser shall also furnish such reports, evaluations,
information or analyses to the Fund and the Adviser as the Fund's Board of
Trustees or the Adviser may request from time to time or as the Sub-Adviser
may deem to be desirable. The Sub-Adviser shall make recommendations to
the Fund's Board of Trustees with respect to Portfolio policies, and shall
carry out such policies as are adopted by the Trustees. The Sub-Adviser
shall, subject to review by the Board of Trustees, furnish such other
services as the Sub-Adviser shall from time to time determine to be
necessary or useful to perform its obligations under this Agreement and
which are not otherwise furnished by the Adviser.
(c) The Sub-Adviser, at its own expense, shall place all orders for the
purchase and sale of portfolio securities for the Portfolio's account with
brokers or dealers selected by the Sub-Adviser, which may include brokers
or dealers affiliated with the Adviser or Sub-Adviser. The Sub-Adviser
shall use its best efforts to seek to execute portfolio transactions at
prices which are advantageous to the Portfolio and at commission rates
which are reasonable in relation to the benefits received. In selecting
brokers or dealers qualified to execute a particular transaction, brokers
or dealers may be selected who also provide brokerage and research services
(as those terms are defined in Section 28(e) of the Securities Exchange Act
of 1934) to the Portfolio and/or the other accounts over which the
Sub-Adviser, Adviser or their affiliates exercise investment discretion.
The Sub-Adviser is authorized to pay a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Sub-Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination
may be viewed in terms of either that particular transaction or the overall
responsibilities which the Sub-Adviser and its affiliates have with respect
to accounts over which they exercise investment discretion. The Trustees
of the Fund shall periodically review the commissions paid by the Portfolio
to determine if the commissions paid over representative periods of time
were reasonable in relation to the benefits to the Portfolio.
2. The Sub-Adviser will be compensated by the 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 50% of the management fee which
the Portfolio is obligated to pay the Adviser under the Portfolio's
Management Contract with the Adviser. Such fee shall not be reduced to
reflect expense reimbursements or fee waivers by the Adviser, if any, in
effect from time to time.
3. It is understood that Trustees, officers, and shareholders of the Fund
are or may be or become interested in the Adviser or the Sub-Adviser as
directors, officers or otherwise and that directors, officers and
stockholders of the Adviser or the Sub-Adviser are or may be or become
similarly interested in the Fund, and that the Adviser or the Sub-Adviser
may be or become interested in the Fund as a shareholder or otherwise.
4. It is understood that the Portfolio will pay all its expenses other
than those expressly stated to be payable by the Sub-Adviser hereunder or
by the Adviser under the Management Contract with the Portfolio, which
expenses payable by the Portfolio shall include, (i) taxes; (ii) the fees
and expenses of all Trustees of the Fund who are not "interested persons"
of the Fund, the Adviser or the Sub-Adviser; (iii) brokerage fees and
commissions; (iv) interest expenses with respect to borrowings by the
Portfolio; and (v) such non-recurring and extraordinary expenses as may
arise, including actions, suits or proceedings to which the Portfolio is or
is threatened to be a party and the legal obligation that the Portfolio may
have to indemnify the Fund's Trustees and officers with respect thereto.
5. The Services of the Sub-Adviser to the Adviser are not to be deemed to
be exclusive, the Sub-Adviser being free to render services to others and
engage in other activities, provided, however, that such other services and
activities do not, during the term of this Agreement, interfere, in a
material manner, with the Sub-Adviser's ability to meet all of its
obligations with respect to rendering investment advice hereunder. The
Sub-Adviser shall for all purposes be an independent contractor and not an
agent or employee of the Adviser or the Fund. 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 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.
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Agreement shall continue in force until May 31, 1994
and indefinitely thereafter, but only so long as the continuance after such
period shall be specifically approved at least annually by vote of the
Fund's Board of Trustees or by vote of a majority of the outstanding voting
securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Adviser, the
Sub-Adviser and the Portfolio, such consent on the part of the Portfolio to
be authorized by vote of a majority of the outstanding voting securities of
the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 6, the terms of any continuance or modification of the Agreement
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to such Agreement or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on
such approval.
(d) Either the Adviser, the Sub-Adviser or the Portfolio may, at any time
on sixty (60) days' prior written notice to the other parties, terminate
this Agreement, without payment of any penalty, by action of its Board of
Trustees or Directors, or by vote of a majority of its outstanding voting
securities. This Agreement shall terminate automatically in the event of
its assignment.
7. The Sub-Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Trust Instrument of the Fund and
agrees that any obligations of the Fund or the Portfolio arising in
connection with this Agreement shall be limited in all cases to the
Portfolio and its assets, and the Sub-Adviser shall not seek satisfaction
of any such obligation from the shareholders or any shareholder of the
Portfolio. Nor shall the Sub-Adviser seek satisfaction of any such
obligation from the Trustees or any individual Trustee.
8. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.
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 all as of the date written above.
FMR TEXAS INC.
By /s/ Charles F. Dornbush
Treasurer
FIDELITY MANAGEMENT & RESEARCH COMPANY
By /s/ J. Gary Burkhead
President
LG932500028
GENERAL DISTRIBUTION AGREEMENT
between
DAILY MONEY FUND
Money Market Portfolio
and
FIDELITY DISTRIBUTORS CORPORATION
Required authorizations and approvals having been obtained, Daily Money
Fund, a Delaware business trust which may issue one or more series of
beneficial interest ("Issuer"), with respect to shares of Money Market
Portfolio, a series of the Issuer, and Fidelity Distributors Corporation, a
Massachusetts corporation having its principal place of business in Boston,
Massachusetts ("Distributors"), hereby consent pursuant to the existing
General Distribution Agreement dated June 1, 1986, to an amendment in its
entirety of said Agreement as of September 30, 1993, as set forth below.
In consideration of the mutual promises and undertakings herein contained,
the parties agree as follows:
1. Sale of Shares - The Issuer grants to the Distributor the right to sell
shares on behalf of the Issuer during the term of this Agreement and
subject to the registration requirements of the Securities Act of 1933, as
amended ("1933 Act"), and of the laws governing the sale of securities in
the various states ("Blue Sky Laws") under the following terms and
conditions: the Distributor (i) shall have the right to sell, as agent on
behalf of the Issuer, shares authorized for issue and registered under the
1933 Act, and (ii) may sell shares under offers of exchange, if available,
between and among the funds advised by Fidelity Management & Research
Company ("FMR").
2. Sale of Shares by the Issuer - The rights granted to the Distributor
shall be nonexclusive in that the Issuer reserves the right to sell its
shares to investors on applications received and accepted by the Issuer.
Further, the Issuer reserves the right to issue shares in connection with
the merger or consolidation, or acquisition by the Issuer through purchase
or otherwise, with any other investment company, trust, or personal holding
company.
3. Shares Covered by this Agreement - This Agreement shall apply to
unissued shares of the Issuer, shares of the Issuer held in its treasury in
the event that in the discretion of the Issuer treasury shares shall be
sold, and shares of the Issuer repurchased for resale.
4. Public Offering Price - Except as otherwise noted in the Issuer's
current Prospectus and/or Statement of Additional Information, all shares
sold to investors by the Distributor or the Issuer will be sold at the
public offering price. The public offering price for all accepted
subscriptions will be the net asset value per share, as determined in the
manner described in the Issuer's current Prospectus and/or Statement of
Additional Information, plus a sales charge (if any) described in the
Issuer's current Prospectus and/or Statement of Additional Information.
The Issuer shall in all cases receive the net asset value per share on all
sales. If a sales charge is in effect, the Distributor shall have the
right subject to such rules or regulations of the Securities and Exchange
Commission as may then be in effect pursuant to Section 22 of the
Investment Company Act of 1940 to pay a portion of the sales charge to
dealers who have sold shares of the Issuer. If a fee in connection with
shareholder redemptions is in effect, the Issuer shall collect the fee on
behalf of Distributors and, unless otherwise agreed upon by the Issuer and
Distributors, Distributors shall be entitled to receive all of such fees.
5. Suspension of Sales - If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further
orders for shares shall be processed by the Distributor except such
unconditional orders as may have been placed with the Distributor before it
had knowledge of the suspension. In addition, the Issuer reserves the
right to suspend sales and the Distributor's authority to process orders
for shares on behalf of the Issuer if, in the judgment of the Issuer, it is
in the best interests of the Issuer to do so. Suspension will continue for
such period as may be determined by the Issuer.
6. Solicitation of Sales - In consideration of these rights granted to the
Distributor, the Distributor agrees to use all reasonable efforts,
consistent with its other business, to secure purchasers for shares of the
Issuer. This shall not prevent the Distributor from entering into like
arrangements (including arrangements involving the payment of underwriting
commissions) with other issuers. This does not obligate the Distributor to
register as a broker or dealer under the Blue Sky Laws of any jurisdiction
in which it is not now registered or to maintain its registration in any
jurisdiction in which it is now registered. If a sales charge is in
effect, the Distributor shall have the right to enter into sales agreements
with dealers of its choice for the sale of shares of the Issuer to the
public at the public offering price only and fix in such agreements the
portion of the sales charge which may be retained by dealers, provided that
the Issuer shall approve the form of the dealer agreement and the dealer
discounts set forth therein and shall evidence such approval by filing said
form of dealer agreement and amendments thereto as an exhibit to its
currently effective Registration Statement under the 1933 Act.
7. Authorized Representations - The Distributor is not authorized by the
Issuer to give any information or to make any representations other than
those contained in the appropriate registration statements or Prospectuses
and Statements of Additional Information filed with the Securities and
Exchange Commission under the 1933 Act (as these registration statements,
Prospectuses and Statements of Additional Information may be amended from
time to time), or contained in shareholder reports or other material that
may be prepared by or on behalf of the Issuer for the Distributor's use.
This shall not be construed to prevent the Distributor from preparing and
distributing sales literature or other material as it may deem appropriate.
8. Portfolio Securities - Portfolio securities of the Issuer may be bought
or sold by or through the Distributor, and the Distributor may participate
directly or indirectly in brokerage commissions or "spreads" for
transactions in portfolio securities of the Issuer.
9. Registration of Shares - The Issuer agrees that it will take all action
necessary to register shares under the 1933 Act (subject to the necessary
approval of its shareholders) so that there will be available for sale the
number of shares the Distributor may reasonably be expected to sell. The
Issuer shall make available to the Distributor such number of copies of its
currently effective Prospectus and Statement of Additional Information as
the Distributor may reasonably request. The Issuer shall furnish to the
Distributor copies of all information, financial statements and other
papers which the Distributor may reasonably request for use in connection
with the distribution of shares of the Issuer.
10. Expenses - The Issuer shall pay all fees and expenses (a) in connection
with the preparation, setting in type and filing of any registration
statement, Prospectus and Statement of Additional Information under the
1933 Act and amendments for the issue of its shares, (b) in connection with
the registration and qualification of shares for sale in the various states
in which the Board of Trustees of the Issuer shall determine it advisable
to qualify such shares for sale (including registering the Issuer as a
broker or dealer or any officer of the Issuer as agent or salesman in any
state), (c) of preparing, setting in type, printing and mailing any report
or other communication to shareholders of the Issuer in their capacity as
such, and (d) of preparing, setting in type, printing and mailing
Prospectuses, Statements of Additional Information and any supplements
thereto sent to existing shareholders.
As provided in the Distribution and Service Plan adopted by the Issuer, it
is recognized by the Issuer that FMR may reimburse the Distributor for any
direct expenses incurred in the distribution of shares of the Issuer from
any source available to it, including advisory and service or management
fees paid to it by the Issuer.
11. Indemnification - The Issuer agrees to indemnify and hold harmless the
Distributor and each of its directors and officers and each person, if any,
who controls the Distributor within the meaning of Section 15 of the 1933
Act against any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages, or expense and reasonable counsel fees incurred in
connection therewith) arising by reason of any person acquiring any shares,
based upon the ground that the registration statement, Prospectus,
Statement of Additional Information, shareholder reports or other
information filed or made public by the Issuer (as from time to time
amended) included an untrue statement of a material fact or omitted to
state a material fact required to be stated or necessary in order to make
the statements not misleading under the 1933 Act, or any other statute or
the common law. However, the Issuer does not agree to indemnify the
Distributor or hold it harmless to the extent that the statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Issuer by or on behalf of the Distributor. In no case (i)
is the indemnity of the Issuer in favor of the Distributor or any person
indemnified to be deemed to protect the Distributor or any person against
any liability to the Issuer or its security holders to which the
Distributor or such person would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties
or by reason of its reckless disregard of its obligations and duties under
this Agreement, or (ii) is the Issuer to be liable under its indemnity
agreement contained in this paragraph with respect to any claim made
against the Distributor or any person indemnified unless the Distributor or
person, as the case may be, shall have notified the Issuer in writing of
the claim within a reasonable time after the summons or other first written
notification giving information of the nature of the claim shall have been
served upon the Distributor or any such person (or after the Distributor or
such person shall have received notice of service on any designated agent).
However, failure to notify the Issuer of any claim shall not relieve the
Issuer from any liability which it may have to the Distributor or any
person against whom such action is brought otherwise than on account of its
indemnity agreement contained in this paragraph. The Issuer shall be
entitled to participate at its own expense in the defense, or, if it so
elects, to assume the defense of any suit brought to enforce any claims,
but if the Issuer elects to assume the defense, the defense shall be
conducted by counsel chosen by it and satisfactory to the Distributor or
person or persons, defendant or defendants in the suit. In the event the
Issuer elects to assume the defense of any suit and retain counsel, the
Distributor, officers or directors or controlling person or persons,
defendant or defendants in the suit, shall bear the fees and expenses of
any additional counsel retained by them. If the Issuer does not elect to
assume the defense of any suit, it will reimburse the Distributor, officers
or directors or controlling person or persons, defendant or defendants in
the suit, for the reasonable fees and expenses of any counsel retained by
them. The Issuer agrees to notify the Distributor promptly of the
commencement of any litigation or proceedings against it or any of its
officers or trustees in connection with the issuance or sale of any of the
shares.
The Distributor also covenants and agrees that it will indemnify and hold
harmless the Issuer and each of its Board members and officers and each
person, if any, who controls the Issuer within the meaning of Section 15 of
the 1933 Act, against any loss, liability, damages, claim or expense
(including the reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable counsel fees
incurred in connection therewith) arising by reason of any person acquiring
any shares, based upon the 1933 Act or any other statute or common law,
alleging any wrongful act of the Distributor or any of its employees or
alleging that the registration statement, Prospectus, Statement of
Additional Information, shareholder reports or other information filed or
made public by the Issuer (as from time to time amended) included an untrue
statement of a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not misleading,
insofar as the statement or omission was made in reliance upon, and in
conformity with information furnished to the Issuer by or on behalf of the
Distributor. In no case (i) is the indemnity of the Distributor in favor
of the Issuer or any person indemnified to be deemed to protect the Issuer
or any person against any liability to which the Issuer or such person
would otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under this Agreement, or
(ii) is the Distributor to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against the
Issuer or any person indemnified unless the Issuer or person, as the case
may be, shall have notified the Distributor in writing of the claim within
a reasonable time after the summons or other first written notification
giving information of the nature of the claim shall have been served upon
the Issuer or any such person (or after the Issuer or such person shall
have received notice of service on any designated agent). However, failure
to notify the Distributor of any claim shall not relieve the Distributor
from any liability which it may have to the Issuer or any person against
whom the action is brought otherwise than on account of its indemnity
agreement contained in this paragraph. In the case of any notice to the
Distributor, it shall be entitled to participate, at its own expense, in
the defense or, if it so elects, to assume the defense of any suit brought
to enforce the claim, but if the Distributor elects to assume the defense,
the defense shall be conducted by counsel chosen by it and satisfactory to
the Issuer, to its officers and Board and to any controlling person or
persons, defendant or defendants in the suit. In the event that the
Distributor elects to assume the defense of any suit and retain counsel,
the Issuer or controlling persons, defendant or defendants in the suit,
shall bear the fees and expense of any additional counsel retained by them.
If the Distributor does not elect to assume the defense of any suit, it
will reimburse the Issuer, officers and Board or controlling person or
persons, defendant or defendants in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Distributor agrees to notify
the Issuer promptly of the commencement of any litigation or proceedings
against it in connection with the issue and sale of any of the shares.
12. Effective Date - This agreement shall be effective upon its execution,
and unless terminated as provided, shall continue in force until January
31, 1994 and thereafter from year to year, provided continuance is approved
annually by the vote of a majority of the Board members of the Issuer, and
by the vote of those Board members of the Issuer who are not "interested
persons" of the Issuer and, if a plan under Rule 12b-1 under the Investment
Company Act of 1940 is in effect, by the vote of those Board members of the
Issuer who are not "interested persons" of the Issuer and who are not
parties to the Distribution and Service Plan or this Agreement and have no
financial interest in the operation of the Distribution and Service Plan or
in any agreements related to the Distribution and Service Plan, cast in
person at a meeting called for the purpose of voting on the approval. This
Agreement shall automatically terminate in the event of its assignment. As
used in this paragraph, the terms "assignment" and "interested persons"
shall have the respective meanings specified in the Investment Company Act
of 1940 as now in effect or as hereafter amended. In addition to
termination by failure to approve continuance or by assignment, this
Agreement may at any time be terminated by either party upon not less than
sixty days' prior written notice to the other party.
13. Notice - Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by registered or certified
mail, postage prepaid, addressed by the party giving notice to the other
party at the last address furnished by the other party to the party giving
notice: if to the Issuer, at 82 Devonshire Street, Boston, Massachusetts,
and if to the Distributor, at 82 Devonshire Street, Boston, Massachusetts.
14. Limitation of Liability - The Distributor is expressly put on notice of
the limitation of shareholder liability as set forth in the Trust
Instrument of the Issuer and agrees that the obligations assumed by the
Issuer under this contract shall be limited in all cases to the Issuer and
its assets. The Distributor shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the Issuer. Nor
shall the Distributor seek satisfaction of any such obligation from the
Trustees or any individual Trustee of the Issuer. The Distributor
understands that the rights and obligations of each series of shares of the
Issuer under the Issuer's Trust Instrument are separate and distinct from
those of any and all other series.
IN WITNESS WHEREOF, the Issuer has executed this instrument in its name
and behalf, and its seal affixed, by one of its officers duly authorized,
and the Distributor has executed this instrument in its name and behalf,
and its corporate seal affixed, by one of its officers duly authorized, as
of the day and year first above written.
DAILY MONEY FUND: Money Market Portfolio,
Attest: /s/ Arthur S. Loring By: /s/ J. Gary Burkhead
Secretary J. Gary Burkhead
Senior Vice President
FIDELITY DISTRIBUTORS CORPORATION
Attest: /s/ Arthur S. Loring By: /s/ Kurt A. Lange
Clerk Kurt A. Lange
President
LG932510012
GENERAL DISTRIBUTION AGREEMENT
between
DAILY MONEY FUND
U.S. Treasury Portfolio
and
FIDELITY DISTRIBUTORS CORPORATION
Required authorizations and approvals having been obtained, Daily Money
Fund, a Delaware business trust which may issue one or more series of
beneficial interest ("Issuer"), with respect to shares of U.S. Treasury
Portfolio, a series of the Issuer, and Fidelity Distributors Corporation, a
Massachusetts corporation having its principal place of business in Boston,
Massachusetts ("Distributors"), hereby consent pursuant to the existing
General Distribution Agreement dated June 1, 1986, to an amendment in its
entirety of said Agreement as of September 30, 1993, as set forth below.
In consideration of the mutual promises and undertakings herein contained,
the parties agree as follows:
1. Sale of Shares - The Issuer grants to the Distributor the right to sell
shares on behalf of the Issuer during the term of this Agreement and
subject to the registration requirements of the Securities Act of 1933, as
amended ("1933 Act"), and of the laws governing the sale of securities in
the various states ("Blue Sky Laws") under the following terms and
conditions: the Distributor (i) shall have the right to sell, as agent on
behalf of the Issuer, shares authorized for issue and registered under the
1933 Act, and (ii) may sell shares under offers of exchange, if available,
between and among the funds advised by Fidelity Management & Research
Company ("FMR").
2. Sale of Shares by the Issuer - The rights granted to the Distributor
shall be nonexclusive in that the Issuer reserves the right to sell its
shares to investors on applications received and accepted by the Issuer.
Further, the Issuer reserves the right to issue shares in connection with
the merger or consolidation, or acquisition by the Issuer through purchase
or otherwise, with any other investment company, trust, or personal holding
company.
3. Shares Covered by this Agreement - This Agreement shall apply to
unissued shares of the Issuer, shares of the Issuer held in its treasury in
the event that in the discretion of the Issuer treasury shares shall be
sold, and shares of the Issuer repurchased for resale.
4. Public Offering Price - Except as otherwise noted in the Issuer's
current Prospectus and/or Statement of Additional Information, all shares
sold to investors by the Distributor or the Issuer will be sold at the
public offering price. The public offering price for all accepted
subscriptions will be the net asset value per share, as determined in the
manner described in the Issuer's current Prospectus and/or Statement of
Additional Information, plus a sales charge (if any) described in the
Issuer's current Prospectus and/or Statement of Additional Information.
The Issuer shall in all cases receive the net asset value per share on all
sales. If a sales charge is in effect, the Distributor shall have the
right subject to such rules or regulations of the Securities and Exchange
Commission as may then be in effect pursuant to Section 22 of the
Investment Company Act of 1940 to pay a portion of the sales charge to
dealers who have sold shares of the Issuer. If a fee in connection with
shareholder redemptions is in effect, the Issuer shall collect the fee on
behalf of Distributors and, unless otherwise agreed upon by the Issuer and
Distributors, Distributors shall be entitled to receive all of such fees.
5. Suspension of Sales - If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further
orders for shares shall be processed by the Distributor except such
unconditional orders as may have been placed with the Distributor before it
had knowledge of the suspension. In addition, the Issuer reserves the
right to suspend sales and the Distributor's authority to process orders
for shares on behalf of the Issuer if, in the judgment of the Issuer, it is
in the best interests of the Issuer to do so. Suspension will continue for
such period as may be determined by the Issuer.
6. Solicitation of Sales - In consideration of these rights granted to the
Distributor, the Distributor agrees to use all reasonable efforts,
consistent with its other business, to secure purchasers for shares of the
Issuer. This shall not prevent the Distributor from entering into like
arrangements (including arrangements involving the payment of underwriting
commissions) with other issuers. This does not obligate the Distributor to
register as a broker or dealer under the Blue Sky Laws of any jurisdiction
in which it is not now registered or to maintain its registration in any
jurisdiction in which it is now registered. If a sales charge is in
effect, the Distributor shall have the right to enter into sales agreements
with dealers of its choice for the sale of shares of the Issuer to the
public at the public offering price only and fix in such agreements the
portion of the sales charge which may be retained by dealers, provided that
the Issuer shall approve the form of the dealer agreement and the dealer
discounts set forth therein and shall evidence such approval by filing said
form of dealer agreement and amendments thereto as an exhibit to its
currently effective Registration Statement under the 1933 Act.
7. Authorized Representations - The Distributor is not authorized by the
Issuer to give any information or to make any representations other than
those contained in the appropriate registration statements or Prospectuses
and Statements of Additional Information filed with the Securities and
Exchange Commission under the 1933 Act (as these registration statements,
Prospectuses and Statements of Additional Information may be amended from
time to time), or contained in shareholder reports or other material that
may be prepared by or on behalf of the Issuer for the Distributor's use.
This shall not be construed to prevent the Distributor from preparing and
distributing sales literature or other material as it may deem appropriate.
8. Portfolio Securities - Portfolio securities of the Issuer may be bought
or sold by or through the Distributor, and the Distributor may participate
directly or indirectly in brokerage commissions or "spreads" for
transactions in portfolio securities of the Issuer.
9. Registration of Shares - The Issuer agrees that it will take all action
necessary to register shares under the 1933 Act (subject to the necessary
approval of its shareholders) so that there will be available for sale the
number of shares the Distributor may reasonably be expected to sell. The
Issuer shall make available to the Distributor such number of copies of its
currently effective Prospectus and Statement of Additional Information as
the Distributor may reasonably request. The Issuer shall furnish to the
Distributor copies of all information, financial statements and other
papers which the Distributor may reasonably request for use in connection
with the distribution of shares of the Issuer.
10. Expenses - The Issuer shall pay all fees and expenses (a) in connection
with the preparation, setting in type and filing of any registration
statement, Prospectus and Statement of Additional Information under the
1933 Act and amendments for the issue of its shares, (b) in connection with
the registration and qualification of shares for sale in the various states
in which the Board of Trustees of the Issuer shall determine it advisable
to qualify such shares for sale (including registering the Issuer as a
broker or dealer or any officer of the Issuer as agent or salesman in any
state), (c) of preparing, setting in type, printing and mailing any report
or other communication to shareholders of the Issuer in their capacity as
such, and (d) of preparing, setting in type, printing and mailing
Prospectuses, Statements of Additional Information and any supplements
thereto sent to existing shareholders.
As provided in the Distribution and Service Plan adopted by the Issuer, it
is recognized by the Issuer that FMR may reimburse the Distributor for any
direct expenses incurred in the distribution of shares of the Issuer from
any source available to it, including advisory and service or management
fees paid to it by the Issuer.
11. Indemnification - The Issuer agrees to indemnify and hold harmless the
Distributor and each of its directors and officers and each person, if any,
who controls the Distributor within the meaning of Section 15 of the 1933
Act against any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages, or expense and reasonable counsel fees incurred in
connection therewith) arising by reason of any person acquiring any shares,
based upon the ground that the registration statement, Prospectus,
Statement of Additional Information, shareholder reports or other
information filed or made public by the Issuer (as from time to time
amended) included an untrue statement of a material fact or omitted to
state a material fact required to be stated or necessary in order to make
the statements not misleading under the 1933 Act, or any other statute or
the common law. However, the Issuer does not agree to indemnify the
Distributor or hold it harmless to the extent that the statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Issuer by or on behalf of the Distributor. In no case (i)
is the indemnity of the Issuer in favor of the Distributor or any person
indemnified to be deemed to protect the Distributor or any person against
any liability to the Issuer or its security holders to which the
Distributor or such person would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties
or by reason of its reckless disregard of its obligations and duties under
this Agreement, or (ii) is the Issuer to be liable under its indemnity
agreement contained in this paragraph with respect to any claim made
against the Distributor or any person indemnified unless the Distributor or
person, as the case may be, shall have notified the Issuer in writing of
the claim within a reasonable time after the summons or other first written
notification giving information of the nature of the claim shall have been
served upon the Distributor or any such person (or after the Distributor or
such person shall have received notice of service on any designated agent).
However, failure to notify the Issuer of any claim shall not relieve the
Issuer from any liability which it may have to the Distributor or any
person against whom such action is brought otherwise than on account of its
indemnity agreement contained in this paragraph. The Issuer shall be
entitled to participate at its own expense in the defense, or, if it so
elects, to assume the defense of any suit brought to enforce any claims,
but if the Issuer elects to assume the defense, the defense shall be
conducted by counsel chosen by it and satisfactory to the Distributor or
person or persons, defendant or defendants in the suit. In the event the
Issuer elects to assume the defense of any suit and retain counsel, the
Distributor, officers or directors or controlling person or persons,
defendant or defendants in the suit, shall bear the fees and expenses of
any additional counsel retained by them. If the Issuer does not elect to
assume the defense of any suit, it will reimburse the Distributor, officers
or directors or controlling person or persons, defendant or defendants in
the suit, for the reasonable fees and expenses of any counsel retained by
them. The Issuer agrees to notify the Distributor promptly of the
commencement of any litigation or proceedings against it or any of its
officers or trustees in connection with the issuance or sale of any of the
shares.
The Distributor also covenants and agrees that it will indemnify and hold
harmless the Issuer and each of its Board members and officers and each
person, if any, who controls the Issuer within the meaning of Section 15 of
the 1933 Act, against any loss, liability, damages, claim or expense
(including the reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable counsel fees
incurred in connection therewith) arising by reason of any person acquiring
any shares, based upon the 1933 Act or any other statute or common law,
alleging any wrongful act of the Distributor or any of its employees or
alleging that the registration statement, Prospectus, Statement of
Additional Information, shareholder reports or other information filed or
made public by the Issuer (as from time to time amended) included an untrue
statement of a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not misleading,
insofar as the statement or omission was made in reliance upon, and in
conformity with information furnished to the Issuer by or on behalf of the
Distributor. In no case (i) is the indemnity of the Distributor in favor
of the Issuer or any person indemnified to be deemed to protect the Issuer
or any person against any liability to which the Issuer or such person
would otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under this Agreement, or
(ii) is the Distributor to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against the
Issuer or any person indemnified unless the Issuer or person, as the case
may be, shall have notified the Distributor in writing of the claim within
a reasonable time after the summons or other first written notification
giving information of the nature of the claim shall have been served upon
the Issuer or any such person (or after the Issuer or such person shall
have received notice of service on any designated agent). However, failure
to notify the Distributor of any claim shall not relieve the Distributor
from any liability which it may have to the Issuer or any person against
whom the action is brought otherwise than on account of its indemnity
agreement contained in this paragraph. In the case of any notice to the
Distributor, it shall be entitled to participate, at its own expense, in
the defense or, if it so elects, to assume the defense of any suit brought
to enforce the claim, but if the Distributor elects to assume the defense,
the defense shall be conducted by counsel chosen by it and satisfactory to
the Issuer, to its officers and Board and to any controlling person or
persons, defendant or defendants in the suit. In the event that the
Distributor elects to assume the defense of any suit and retain counsel,
the Issuer or controlling persons, defendant or defendants in the suit,
shall bear the fees and expense of any additional counsel retained by them.
If the Distributor does not elect to assume the defense of any suit, it
will reimburse the Issuer, officers and Board or controlling person or
persons, defendant or defendants in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Distributor agrees to notify
the Issuer promptly of the commencement of any litigation or proceedings
against it in connection with the issue and sale of any of the shares.
12. Effective Date - This agreement shall be effective upon its execution,
and unless terminated as provided, shall continue in force until January
31, 1994 and thereafter from year to year, provided continuance is approved
annually by the vote of a majority of the Board members of the Issuer, and
by the vote of those Board members of the Issuer who are not "interested
persons" of the Issuer and, if a plan under Rule 12b-1 under the Investment
Company Act of 1940 is in effect, by the vote of those Board members of the
Issuer who are not "interested persons" of the Issuer and who are not
parties to the Distribution and Service Plan or this Agreement and have no
financial interest in the operation of the Distribution and Service Plan or
in any agreements related to the Distribution and Service Plan, cast in
person at a meeting called for the purpose of voting on the approval. This
Agreement shall automatically terminate in the event of its assignment. As
used in this paragraph, the terms "assignment" and "interested persons"
shall have the respective meanings specified in the Investment Company Act
of 1940 as now in effect or as hereafter amended. In addition to
termination by failure to approve continuance or by assignment, this
Agreement may at any time be terminated by either party upon not less than
sixty days' prior written notice to the other party.
13. Notice - Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by registered or certified
mail, postage prepaid, addressed by the party giving notice to the other
party at the last address furnished by the other party to the party giving
notice: if to the Issuer, at 82 Devonshire Street, Boston, Massachusetts,
and if to the Distributor, at 82 Devonshire Street, Boston, Massachusetts.
14. Limitation of Liability - The Distributor is expressly put on notice of
the limitation of shareholder liability as set forth in the Trust
Instrument of the Issuer and agrees that the obligations assumed by the
Issuer under this contract shall be limited in all cases to the Issuer and
its assets. The Distributor shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the Issuer. Nor
shall the Distributor seek satisfaction of any such obligation from the
Trustees or any individual Trustee of the Issuer. The Distributor
understands that the rights and obligations of each series of shares of the
Issuer under the Issuer's Trust Instrument are separate and distinct from
those of any and all other series.
IN WITNESS WHEREOF, the Issuer has executed this instrument in its name
and behalf, and its seal affixed, by one of its officers duly authorized,
and the Distributor has executed this instrument in its name and behalf,
and its corporate seal affixed, by one of its officers duly authorized, as
of the day and year first above written.
DAILY MONEY FUND: U.S. Treasury Portfolio,
Attest: /s. Arthur S. Loring By: /s/ J. Gary Burkhead
Secretary J. Gary Burkhead
Senior Vice President
FIDELITY DISTRIBUTORS CORPORATION
Attest: /s. Arthur S. Loring By: /s/ Kurt A. Lange
Clerk Kurt A. Lange
President
LG932510015
GENERAL DISTRIBUTION AGREEMENT
between
DAILY MONEY FUND: U.S. Treasury Income Portfolio
and
FIDELITY DISTRIBUTORS CORPORATION
Agreement made this 30th day of September, 1993, between Daily Money Fund,
a Delaware business trust having its principal place of business in Boston,
Massachusetts and which may issue one or more series of beneficial interest
("Issuer"), with respect to shares of U.S. Treasury Income Portfolio, a
series of the Issuer, and Fidelity Distributors Corporation, a
Massachusetts corporation having its principal place of business in Boston,
Massachusetts ("Distributors").
In consideration of the mutual promises and undertakings herein contained,
the parties agree as follows:
1. Sale of Shares - The Issuer grants to the Distributor the right to sell
shares on behalf of the Issuer during the term of this Agreement and
subject to the registration requirements of the Securities Act of 1933, as
amended ("1933 Act"), and of the laws governing the sale of securities in
the various states ("Blue Sky Laws") under the following terms and
conditions: the Distributor (i) shall have the right to sell, as agent on
behalf of the Issuer, shares authorized for issue and registered under the
1933 Act, and (ii) may sell shares under offers of exchange, if available,
between and among the funds advised by Fidelity Management & Research
Company ("FMR").
2. Sale of Shares by the Issuer - The rights granted to the Distributor
shall be nonexclusive in that the Issuer reserves the right to sell its
shares to investors on applications received and accepted by the Issuer.
Further, the Issuer reserves the right to issue shares in connection with
the merger or consolidation, or acquisition by the Issuer through purchase
or otherwise, with any other investment company, trust, or personal holding
company.
3. Shares Covered by this Agreement - This Agreement shall apply to
unissued shares of the Issuer, shares of the Issuer held in its treasury in
the event that in the discretion of the Issuer treasury shares shall be
sold, and shares of the Issuer repurchased for resale.
4. Public Offering Price - Except as otherwise noted in the Issuer's
current Prospectus and/or Statement of Additional Information, all shares
sold to investors by the Distributor or the Issuer will be sold at the
public offering price. The public offering price for all accepted
subscriptions will be the net asset value per share, as determined in the
manner described in the Issuer's current Prospectus and/or Statement of
Additional Information, plus a sales charge (if any) described in the
Issuer's current Prospectus and/or Statement of Additional Information.
The Issuer shall in all cases receive the net asset value per share on all
sales. If a sales charge is in effect, the Distributor shall have the
right subject to such rules or regulations of the Securities and Exchange
Commission as may then be in effect pursuant to Section 22 of the
Investment Company Act of 1940 to pay a portion of the sales charge to
dealers who have sold shares of the Issuer. If a fee in connection with
shareholder redemptions is in effect, the Issuer shall collect the fee on
behalf of Distributors and, unless otherwise agreed upon by the Issuer and
Distributors, Distributors shall be entitled to receive all of such fees.
5. Suspension of Sales - If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further
orders for shares shall be processed by the Distributor except such
unconditional orders as may have been placed with the Distributor before it
had knowledge of the suspension. In addition, the Issuer reserves the
right to suspend sales and the Distributor's authority to process orders
for shares on behalf of the Issuer if, in the judgment of the Issuer, it is
in the best interests of the Issuer to do so. Suspension will continue for
such period as may be determined by the Issuer.
6. Solicitation of Sales - In consideration of these rights granted to the
Distributor, the Distributor agrees to use all reasonable efforts,
consistent with its other business, to secure purchasers for shares of the
Issuer. This shall not prevent the Distributor from entering into like
arrangements (including arrangements involving the payment of underwriting
commissions) with other issuers. This does not obligate the Distributor to
register as a broker or dealer under the Blue Sky Laws of any jurisdiction
in which it is not now registered or to maintain its registration in any
jurisdiction in which it is now registered. If a sales charge is in
effect, the Distributor shall have the right to enter into sales agreements
with dealers of its choice for the sale of shares of the Issuer to the
public at the public offering price only and fix in such agreements the
portion of the sales charge which may be retained by dealers, provided that
the Issuer shall approve the form of the dealer agreement and the dealer
discounts set forth therein and shall evidence such approval by filing said
form of dealer agreement and amendments thereto as an exhibit to its
currently effective Registration Statement under the 1933 Act.
7. Authorized Representations - The Distributor is not authorized by the
Issuer to give any information or to make any representations other than
those contained in the appropriate registration statements or Prospectuses
and Statements of Additional Information filed with the Securities and
Exchange Commission under the 1933 Act (as these registration statements,
Prospectuses and Statements of Additional Information may be amended from
time to time), or contained in shareholder reports or other material that
may be prepared by or on behalf of the Issuer for the Distributor's use.
This shall not be construed to prevent the Distributor from preparing and
distributing sales literature or other material as it may deem appropriate.
8. Portfolio Securities - Portfolio securities of the Issuer may be bought
or sold by or through the Distributor, and the Distributor may participate
directly or indirectly in brokerage commissions or "spreads" for
transactions in portfolio securities of the Issuer. However, all sums of
money received by the Distributor as a result of such purchases and sales
or as a result of such participation must, after reimbursement of actual
expenses of the Distributor in connection with such activity, be paid over
by the Distributor for the benefit of the Issuer.
9. Registration of Shares - The Issuer agrees that it will take all action
necessary to register shares under the 1933 Act (subject to the necessary
approval of its shareholders) so that there will be available for sale the
number of shares the Distributor may reasonably be expected to sell. The
Issuer shall make available to the Distributor such number of copies of its
currently effective Prospectus and Statement of Additional Information as
the Distributor may reasonably request. The Issuer shall furnish to the
Distributor copies of all information, financial statements and other
papers which the Distributor may reasonably request for use in connection
with the distribution of shares of the Issuer.
10. Expenses - The Issuer shall pay all fees and expenses (a) in connection
with the preparation, setting in type and filing of any registration
statement, Prospectus and Statement of Additional Information under the
1933 Act and amendments for the issue of its shares, (b) in connection with
the registration and qualification of shares for sale in the various states
in which the Board of Trustees of the Issuer shall determine it advisable
to qualify such shares for sale (including registering the Issuer as a
broker or dealer or any officer of the Issuer as agent or salesman in any
state), (c) of preparing, setting in type, printing and mailing any report
or other communication to shareholders of the Issuer in their capacity as
such, and (d) of preparing, setting in type, printing and mailing
Prospectuses, Statements of Additional Information and any supplements
thereto sent to existing shareholders.
As provided in the Distribution and Service Plan adopted by the Issuer, it
is recognized by the Issuer that FMR may reimburse the Distributor for any
direct expenses incurred in the distribution of shares of the Issuer from
any source available to it, including advisory and service or management
fees paid to it by the Issuer.
11. Indemnification - The Issuer agrees to indemnify and hold harmless the
Distributor and each of its directors and officers and each person, if any,
who controls the Distributor within the meaning of Section 15 of the 1933
Act against any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages, or expense and reasonable counsel fees incurred in
connection therewith) arising by reason of any person acquiring any shares,
based upon the ground that the registration statement, Prospectus,
Statement of Additional Information, shareholder reports or other
information filed or made public by the Issuer (as from time to time
amended) included an untrue statement of a material fact or omitted to
state a material fact required to be stated or necessary in order to make
the statements not misleading under the 1933 Act, or any other statute or
the common law. However, the Issuer does not agree to indemnify the
Distributor or hold it harmless to the extent that the statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Issuer by or on behalf of the Distributor. In no case (i)
is the indemnity of the Issuer in favor of the Distributor or any person
indemnified to be deemed to protect the Distributor or any person against
any liability to the Issuer or its security holders to which the
Distributor or such person would otherwise be subject by reason of wilful
misfeasance, bad faith or gross negligence in the performance of its duties
or by reason of its reckless disregard of its obligations and duties under
this Agreement, or (ii) is the Issuer to be liable under its indemnity
agreement contained in this paragraph with respect to any claim made
against the Distributor or any person indemnified unless the Distributor or
person, as the case may be, shall have notified the Issuer in writing of
the claim within a reasonable time after the summons or other first written
notification giving information of the nature of the claim shall have been
served upon the Distributor or any such person (or after the Distributor or
such person shall have received notice of service on any designated agent).
However, failure to notify the Issuer of any claim shall not relieve the
Issuer from any liability which it may have to the Distributor or any
person against whom such action is brought otherwise than on account of its
indemnity agreement contained in this paragraph. The Issuer shall be
entitled to participate at its own expense in the defense, or, if it so
elects, to assume the defense of any suit brought to enforce any claims,
but if the Issuer elects to assume the defense, the defense shall be
conducted by counsel chosen by it and satisfactory to the Distributor or
person or persons, defendant or defendants in the suit. In the event the
Issuer elects to assume the defense of any suit and retain counsel, the
Distributor, officers or directors or controlling person or persons,
defendant or defendants in the suit, shall bear the fees and expenses of
any additional counsel retained by them. If the Issuer does not elect to
assume the defense of any suit, it will reimburse the Distributor, officers
or directors or controlling person or persons, defendant or defendants in
the suit, for the reasonable fees and expenses of any counsel retained by
them. The Issuer agrees to notify the Distributor promptly of the
commencement of any litigation or proceedings against it or any of its
officers or trustees in connection with the issuance or sale of any of the
shares.
The Distributor also covenants and agrees that it will indemnify and hold
harmless the Issuer and each of its Board members and officers and each
person, if any, who controls the Issuer within the meaning of Section 15 of
the 1933 Act, against any loss, liability, damages, claim or expense
(including the reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable counsel fees
incurred in connection therewith) arising by reason of any person acquiring
any shares, based upon the 1933 Act or any other statute or common law,
alleging any wrongful act of the Distributor or any of its employees or
alleging that the registration statement, Prospectus, Statement of
Additional Information, shareholder reports or other information filed or
made public by the Issuer (as from time to time amended) included an untrue
statement of a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not misleading,
insofar as the statement or omission was made in reliance upon, and in
conformity with information furnished to the Issuer by or on behalf of the
Distributor. In no case (i) is the indemnity of the Distributor in favor
of the Issuer or any person indemnified to be deemed to protect the Issuer
or any person against any liability to which the Issuer or such person
would otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under this Agreement, or
(ii) is the Distributor to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against the
Issuer or any person indemnified unless the Issuer or person, as the case
may be, shall have notified the Distributor in writing of the claim within
a reasonable time after the summons or other first written notification
giving information of the nature of the claim shall have been served upon
the Issuer or any such person (or after the Issuer or such person shall
have received notice of service on any designated agent). However, failure
to notify the Distributor of any claim shall not relieve the Distributor
from any liability which it may have to the Issuer or any person against
whom the action is brought otherwise than on account of its indemnity
agreement contained in this paragraph. In the case of any notice to the
Distributor, it shall be entitled to participate, at its own expense, in
the defense or, if it so elects, to assume the defense of any suit brought
to enforce the claim, but if the Distributor elects to assume the defense,
the defense shall be conducted by counsel chosen by it and satisfactory to
the Issuer, to its officers and Board and to any controlling person or
persons, defendant or defendants in the suit. In the event that the
Distributor elects to assume the defense of any suit and retain counsel,
the Issuer or controlling persons, defendant or defendants in the suit,
shall bear the fees and expense of any additional counsel retained by them.
If the Distributor does not elect to assume the defense of any suit, it
will reimburse the Issuer, officers and Board or controlling person or
persons, defendant or defendants in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Distributor agrees to notify
the Issuer promptly of the commencement of any litigation or proceedings
against it in connection with the issue and sale of any of the shares.
12. Effective Date - This agreement shall be effective upon its execution,
and unless terminated as provided, shall continue in force until January
31, 1994 and thereafter from year to year, provided continuance is approved
annually by the vote of a majority of the Board members of the Issuer, and
by the vote of those Board members of the Issuer who are not "interested
persons" of the Issuer and, if a plan under Rule 12b-1 under the Investment
Company Act of 1940 is in effect, by the vote of those Board members of the
Issuer who are not "interested persons" of the Issuer and who are not
parties to the Distribution and Service Plan or this Agreement and have no
financial interest in the operation of the Distribution and Service Plan or
in any agreements related to the Distribution and Service Plan, cast in
person at a meeting called for the purpose of voting on the approval. This
Agreement shall automatically terminate in the event of its assignment. As
used in this paragraph, the terms "assignment" and "interested persons"
shall have the respective meanings specified in the Investment Company Act
of 1940 as now in effect or as hereafter amended. In addition to
termination by failure to approve continuance or by assignment, this
Agreement may at any time be terminated by either party upon not less than
sixty days' prior written notice to the other party.
13. Notice - Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by registered or certified
mail, postage prepaid, addressed by the party giving notice to the other
party at the last address furnished by the other party to the party giving
notice: if to the Issuer, at 82 Devonshire Street, Boston, Massachusetts,
and if to the Distributor, at 82 Devonshire Street, Boston, Massachusetts.
14. Limitation of Liability - The Distributor is expressly put on notice of
the limitation of shareholder liability as set forth in the Declaration of
Trust or other organizational document of the Issuer and agrees that the
obligations assumed by the Issuer under this contract shall be limited in
all cases to the Issuer and its assets. The Distributor shall not seek
satisfaction of any such obligation from the shareholders or any
shareholder of the Issuer. Nor shall the Distributor seek satisfaction of
any such obligation from the Trustees or any individual Trustee of the
Issuer. The Distributor understands that the rights and obligations of
each series of shares of the Issuer under the Issuer's Declaration of Trust
or other organizational document are separate and distinct from those of
any and all other series.
15. 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.
IN WITNESS WHEREOF, the Issuer has executed this instrument in its name
and behalf, and its seal affixed, by one of its officers duly authorized,
and the Distributor has executed this instrument in its name and behalf by
one of its officers duly authorized, as of the day and year first above
written.
DAILY MONEY FUND:
U.S. Treasury Income Portfolio
By/s/ J. Gary Burkhead
Senior V.P. of Fund
FIDELITY DISTRIBUTORS CORPORATION
By/s/ Kurt A. Lang
President
LG932640007
GENERAL DISTRIBUTION AGREEMENT
between
DAILY MONEY
CAPITAL RESERVES: U.S. Government Portfolio
and
NATIONAL FINANCIAL SERVICES CORPORATION
Agreement made this 30th day of September, 1993, between Daily Money Fund,
a Delaware business trust which may issue one or more series of beneficial
interest ("Issuer"), with respect to shares of Capital Reserves: U.S.
Government Portfolio, a series of the Issuer, and National Financial
Services Corporation, a Massachusetts corporation having its principal
place of business in Boston, Massachusetts ("Distributors").
In consideration of the mutual promises and undertakings herein contained,
the parties agree as follows:
1. Sale of Shares - The Issuer grants to the Distributor the right to sell
shares on behalf of the Issuer during the term of this Agreement and
subject to the registration requirements of the Securities Act of 1933, as
amended ("1933 Act"), and of the laws governing the sale of securities in
the various states ("Blue Sky Laws") under the following terms and
conditions: the Distributor (i) shall have the right to sell, as agent on
behalf of the Issuer, shares authorized for issue and registered under the
1933 Act, and (ii) may sell shares under offers of exchange, if available,
between and among the funds advised by Fidelity Management & Research
Company ("FMR").
2. Sale of Shares by the Issuer - The rights granted to the Distributor
shall be nonexclusive in that the Issuer reserves the right to sell its
shares to investors on applications received and accepted by the Issuer.
Further, the Issuer reserves the right to issue shares in connection with
the merger or consolidation, or acquisition by the Issuer through purchase
or otherwise, with any other investment company, trust, or personal holding
company.
3. Shares Covered by this Agreement - This Agreement shall apply to
unissued shares of the Issuer, shares of the Issuer held in its treasury in
the event that in the discretion of the Issuer treasury shares shall be
sold, and shares of the Issuer repurchased for resale.
4. Public Offering Price - Except as otherwise noted in the Issuer's
current Prospectus and/or Statement of Additional Information, all shares
sold to investors by the Distributor or the Issuer will be sold at the
public offering price. The public offering price for all accepted
subscriptions will be the net asset value per share, as determined in the
manner described in the Issuer's current Prospectus and/or Statement of
Additional Information, plus a sales charge (if any) described in the
Issuer's current Prospectus and/or Statement of Additional Information.
The Issuer shall in all cases receive the net asset value per share on all
sales. If a sales charge is in effect, the Distributor shall have the
right subject to such rules or regulations of the Securities and Exchange
Commission as may then be in effect pursuant to Section 22 of the
Investment Company Act of 1940 to pay a portion of the sales charge to
dealers who have sold shares of the Issuer. If a fee in connection with
shareholder redemptions is in effect, the Issuer shall collect the fee on
behalf of the Distributor and, unless otherwise agreed upon by the Issuer
and the Distributor, the Distributor shall be entitled to receive all of
such fees.
5. Suspension of Sales - If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further
orders for shares shall be processed by the Distributor except such
unconditional orders as may have been placed with the Distributor before it
had knowledge of the suspension. In addition, the Issuer reserves the
right to suspend sales and the Distributor's authority to process orders
for shares on behalf of the Issuer if, in the judgment of the Issuer, it is
in the best interests of the Issuer to do so. Suspension will continue for
such period as may be determined by the Issuer.
6. Solicitation of Sales - In consideration of these rights granted to the
Distributor, the Distributor agrees to use all reasonable efforts,
consistent with its other business, to secure purchasers for shares of the
Issuer. This shall not prevent the Distributor from entering into like
arrangements (including arrangements involving the payment of underwriting
commissions) with other issuers. This does not obligate the Distributor to
register as a broker or dealer under the Blue Sky Laws of any jurisdiction
in which it is not now registered or to maintain its registration in any
jurisdiction in which it is now registered. If a sales charge is in
effect, the Distributor shall have the right to enter into sales agreements
with dealers of its choice for the sale of shares of the Issuer to the
public at the public offering price only and fix in such agreements the
portion of the sales charge which may be retained by dealers, provided that
the Issuer shall approve the form of the dealer agreement and the dealer
discounts set forth therein and shall evidence such approval by filing said
form of dealer agreement and amendments thereto as an exhibit to its
currently effective Registration Statement under the 1933 Act.
7. Authorized Representations - The Distributor is not authorized by the
Issuer to give any information or to make any representations other than
those contained in the appropriate registration statements or Prospectuses
and Statements of Additional Information filed with the Securities and
Exchange Commission under the 1933 Act (as these registration statements,
Prospectuses and Statements of Additional Information may be amended from
time to time), or contained in shareholder reports or other material that
may be prepared by or on behalf of the Issuer for the Distributor's use.
This shall not be construed to prevent the Distributor from preparing and
distributing sales literature or other material as it may deem appropriate.
8. Portfolio Securities - Portfolio securities of the Issuer may be bought
or sold by or through the Distributor, and the Distributor may participate
directly or indirectly in brokerage commissions or "spreads" for
transactions in portfolio securities of the Issuer. However, all sums of
money received by the Distributor as a result of such purchases and sales
or as a result of such participation must, after reimbursement of actual
expenses of the Distributor in connection with such activity, be paid over
by the Distributor for the benefit of the Issuer.
9. Registration of Shares - The Issuer agrees that it will take all action
necessary to register shares under the 1933 Act (subject to the necessary
approval of its shareholders) so that there will be available for sale the
number of shares the Distributor may reasonably be expected to sell. The
Issuer shall make available to the Distributor such number of copies of its
currently effective Prospectus and Statement of Additional Information as
the Distributor may reasonably request. The Issuer shall furnish to the
Distributor copies of all information, financial statements and other
papers which the Distributor may reasonably request for use in connection
with the distribution of shares of the Issuer.
10. Expenses - The Issuer shall pay all fees and expenses (a) in connection
with the preparation, setting in type and filing of any registration
statement, Prospectus and Statement of Additional Information under the
1933 Act and amendments for the issue of its shares, (b) in connection with
the registration and qualification of shares for sale in the various states
in which the Board of Trustees of the Issuer shall determine it advisable
to qualify such shares for sale (including registering the Issuer as a
broker or dealer or any officer of the Issuer as agent or salesman in any
state), (c) of preparing, setting in type, printing and mailing any report
or other communication to shareholders of the Issuer in their capacity as
such, and (d) of preparing, setting in type, printing and mailing
Prospectuses, Statements of Additional Information and any supplements
thereto sent to existing shareholders.
As provided in the Distribution and Service Plan adopted by the Issuer, it
is recognized by the Issuer that FMR may reimburse the Distributor for any
direct expenses incurred in the distribution of shares of the Issuer from
any source available to it, including advisory and service or management
fees paid to it by the Issuer.
11. Indemnification - The Issuer agrees to indemnify and hold harmless the
Distributor and each of its directors and officers and each person, if any,
who controls the Distributor within the meaning of Section 15 of the 1933
Act against any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages, or expense and reasonable counsel fees incurred in
connection therewith) arising by reason of any person acquiring any shares,
based upon the ground that the registration statement, Prospectus,
Statement of Additional Information, shareholder reports or other
information filed or made public by the Issuer (as from time to time
amended) included an untrue statement of a material fact or omitted to
state a material fact required to be stated or necessary in order to make
the statements not misleading under the 1933 Act, or any other statute or
the common law. However, the Issuer does not agree to indemnify the
Distributor or hold it harmless to the extent that the statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Issuer by or on behalf of the Distributor. In no case (i)
is the indemnity of the Issuer in favor of the Distributor or any person
indemnified to be deemed to protect the Distributor or any person against
any liability to the Issuer or its security holders to which the
Distributor or such person would otherwise be subject by reason of wilful
misfeasance, bad faith or gross negligence in the performance of its duties
or by reason of its reckless disregard of its obligations and duties under
this Agreement, or (ii) is the Issuer to be liable under its indemnity
agreement contained in this paragraph with respect to any claim made
against the Distributor or any person indemnified unless the Distributor or
person, as the case may be, shall have notified the Issuer in writing of
the claim within a reasonable time after the summons or other first written
notification giving information of the nature of the claim shall have been
served upon the Distributor or any such person (or after the Distributor or
such person shall have received notice of service on any designated agent).
However, failure to notify the Issuer of any claim shall not relieve the
Issuer from any liability which it may have to the Distributor or any
person against whom such action is brought otherwise than on account of its
indemnity agreement contained in this paragraph. The Issuer shall be
entitled to participate at its own expense in the defense, or, if it so
elects, to assume the defense of any suit brought to enforce any claims,
but if the Issuer elects to assume the defense, the defense shall be
conducted by counsel chosen by it and satisfactory to the Distributor or
person or persons, defendant or defendants in the suit. In the event the
Issuer elects to assume the defense of any suit and retain counsel, the
Distributor, officers or directors or controlling person or persons,
defendant or defendants in the suit, shall bear the fees and expenses of
any additional counsel retained by them. If the Issuer does not elect to
assume the defense of any suit, it will reimburse the Distributor, officers
or directors or controlling person or persons, defendant or defendants in
the suit, for the reasonable fees and expenses of any counsel retained by
them. The Issuer agrees to notify the Distributor promptly of the
commencement of any litigation or proceedings against it or any of its
officers or trustees in connection with the issuance or sale of any of the
shares.
The Distributor also covenants and agrees that it will indemnify and hold
harmless the Issuer and each of its Board members and officers and each
person, if any, who controls the Issuer within the meaning of Section 15 of
the 1933 Act, against any loss, liability, damages, claim or expense
(including the reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable counsel fees
incurred in connection therewith) arising by reason of any person acquiring
any shares, based upon the 1933 Act or any other statute or common law,
alleging any wrongful act of the Distributor or any of its employees or
alleging that the registration statement, Prospectus, Statement of
Additional Information, shareholder reports or other information filed or
made public by the Issuer (as from time to time amended) included an untrue
statement of a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not misleading,
insofar as the statement or omission was made in reliance upon, and in
conformity with information furnished to the Issuer by or on behalf of the
Distributor. In no case (i) is the indemnity of the Distributor in favor
of the Issuer or any person indemnified to be deemed to protect the Issuer
or any person against any liability to which the Issuer or such person
would otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under this Agreement, or
(ii) is the Distributor to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against the
Issuer or any person indemnified unless the Issuer or person, as the case
may be, shall have notified the Distributor in writing of the claim within
a reasonable time after the summons or other first written notification
giving information of the nature of the claim shall have been served upon
the Issuer or any such person (or after the Issuer or such person shall
have received notice of service on any designated agent). However, failure
to notify the Distributor of any claim shall not relieve the Distributor
from any liability which it may have to the Issuer or any person against
whom the action is brought otherwise than on account of its indemnity
agreement contained in this paragraph. In the case of any notice to the
Distributor, it shall be entitled to participate, at its own expense, in
the defense or, if it so elects, to assume the defense of any suit brought
to enforce the claim, but if the Distributor elects to assume the defense,
the defense shall be conducted by counsel chosen by it and satisfactory to
the Issuer, to its officers and Board and to any controlling person or
persons, defendant or defendants in the suit. In the event that the
Distributor elects to assume the defense of any suit and retain counsel,
the Issuer or controlling persons, defendant or defendants in the suit,
shall bear the fees and expense of any additional counsel retained by them.
If the Distributor does not elect to assume the defense of any suit, it
will reimburse the Issuer, officers and Board or controlling person or
persons, defendant or defendants in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Distributor agrees to notify
the Issuer promptly of the commencement of any litigation or proceedings
against it in connection with the issue and sale of any of the shares.
12. Effective Date - This agreement shall be effective upon its execution,
and unless terminated as provided, shall continue in force until January
31, 1994 and thereafter from year to year, provided continuance is approved
annually by the vote of a majority of the Board members of the Issuer, and
by the vote of those Board members of the Issuer who are not "interested
persons" of the Issuer and, if a plan under Rule 12b-1 under the Investment
Company Act of 1940 is in effect, by the vote of those Board members of the
Issuer who are not "interested persons" of the Issuer and who are not
parties to the Distribution and Service Plan or this Agreement and have no
financial interest in the operation of the Distribution and Service Plan or
in any agreements related to the Distribution and Service Plan, cast in
person at a meeting called for the purpose of voting on the approval. This
Agreement shall automatically terminate in the event of its assignment. As
used in this paragraph, the terms "assignment" and "interested persons"
shall have the respective meanings specified in the Investment Company Act
of 1940 as now in effect or as hereafter amended. In addition to
termination by failure to approve continuance or by assignment, this
Agreement may at any time be terminated by either party upon not less than
sixty days' prior written notice to the other party.
13. Notice - Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by registered or certified
mail, postage prepaid, addressed by the party giving notice to the other
party at the last address furnished by the other party to the party giving
notice: if to the Issuer, at 82 Devonshire Street, Boston, Massachusetts,
and if to the Distributor, at 82 Devonshire Street, Boston, Massachusetts.
14. Limitation of Liability - The Distributor is expressly put on notice of
the limitation of shareholder liability as set forth in the Trust
Instrument of the Issuer and agrees that the obligations assumed by the
Issuer under this contract shall be limited in all cases to the Issuer and
its assets. The Distributor shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the Issuer. Nor
shall the Distributor seek satisfaction of any such obligation from the
Trustees or any individual Trustee of the Issuer. The Distributor
understands that the rights and obligations of each series of shares of the
Issuer under the Issuer's Declaration of Trust are separate and distinct
from those of any and all other series.
IN WITNESS WHEREOF, the Issuer has executed this instrument in its name
and behalf, and its seal affixed, by one of its officers duly authorized,
and the Distributor has executed this instrument in its name and behalf,
and its corporate seal affixed, by one of its officers duly authorized, as
of the day and year first above written.
DAILY MONEY FUND:
Capital Reserves: U.S. Government Portfolio
Attest:/s/ Arthur S. Loring By /s/ J. Gary Burkhead
Secretary
NATIONAL FINANCIAL SERVICES CORPORATION
Attest: By _/s/ Robert P. Mazzarella
Clerk
LG932460024
GENERAL DISTRIBUTION AGREEMENT
between
DAILY MONEY
CAPITAL RESERVES: Municipal Money Market Portfolio
and
NATIONAL FINANCIAL SERVICES CORPORATION
Agreement made this 30 day of September, 1993, between Daily Money Fund, a
Delaware business trust which may issue one or more series of beneficial
interest ("Issuer"), with respect to shares of Capital Reserves: Municipal
Money Market Portfolio, a series of the Issuer, and National Financial
Services Corporation, a Massachusetts corporation having its principal
place of business in Boston, Massachusetts ("Distributors").
In consideration of the mutual promises and undertakings herein contained,
the parties agree as follows:
1. Sale of Shares - The Issuer grants to the Distributor the right to sell
shares on behalf of the Issuer during the term of this Agreement and
subject to the registration requirements of the Securities Act of 1933, as
amended ("1933 Act"), and of the laws governing the sale of securities in
the various states ("Blue Sky Laws") under the following terms and
conditions: the Distributor (i) shall have the right to sell, as agent on
behalf of the Issuer, shares authorized for issue and registered under the
1933 Act, and (ii) may sell shares under offers of exchange, if available,
between and among the funds advised by Fidelity Management & Research
Company ("FMR").
2. Sale of Shares by the Issuer - The rights granted to the Distributor
shall be nonexclusive in that the Issuer reserves the right to sell its
shares to investors on applications received and accepted by the Issuer.
Further, the Issuer reserves the right to issue shares in connection with
the merger or consolidation, or acquisition by the Issuer through purchase
or otherwise, with any other investment company, trust, or personal holding
company.
3. Shares Covered by this Agreement - This Agreement shall apply to
unissued shares of the Issuer, shares of the Issuer held in its treasury in
the event that in the discretion of the Issuer treasury shares shall be
sold, and shares of the Issuer repurchased for resale.
4. Public Offering Price - Except as otherwise noted in the Issuer's
current Prospectus and/or Statement of Additional Information, all shares
sold to investors by the Distributor or the Issuer will be sold at the
public offering price. The public offering price for all accepted
subscriptions will be the net asset value per share, as determined in the
manner described in the Issuer's current Prospectus and/or Statement of
Additional Information, plus a sales charge (if any) described in the
Issuer's current Prospectus and/or Statement of Additional Information.
The Issuer shall in all cases receive the net asset value per share on all
sales. If a sales charge is in effect, the Distributor shall have the
right subject to such rules or regulations of the Securities and Exchange
Commission as may then be in effect pursuant to Section 22 of the
Investment Company Act of 1940 to pay a portion of the sales charge to
dealers who have sold shares of the Issuer. If a fee in connection with
shareholder redemptions is in effect, the Issuer shall collect the fee on
behalf of the Distributor and, unless otherwise agreed upon by the Issuer
and the Distributor, the Distributor shall be entitled to receive all of
such fees.
5. Suspension of Sales - If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further
orders for shares shall be processed by the Distributor except such
unconditional orders as may have been placed with the Distributor before it
had knowledge of the suspension. In addition, the Issuer reserves the
right to suspend sales and the Distributor's authority to process orders
for shares on behalf of the Issuer if, in the judgment of the Issuer, it is
in the best interests of the Issuer to do so. Suspension will continue for
such period as may be determined by the Issuer.
6. Solicitation of Sales - In consideration of these rights granted to the
Distributor, the Distributor agrees to use all reasonable efforts,
consistent with its other business, to secure purchasers for shares of the
Issuer. This shall not prevent the Distributor from entering into like
arrangements (including arrangements involving the payment of underwriting
commissions) with other issuers. This does not obligate the Distributor to
register as a broker or dealer under the Blue Sky Laws of any jurisdiction
in which it is not now registered or to maintain its registration in any
jurisdiction in which it is now registered. If a sales charge is in
effect, the Distributor shall have the right to enter into sales agreements
with dealers of its choice for the sale of shares of the Issuer to the
public at the public offering price only and fix in such agreements the
portion of the sales charge which may be retained by dealers, provided that
the Issuer shall approve the form of the dealer agreement and the dealer
discounts set forth therein and shall evidence such approval by filing said
form of dealer agreement and amendments thereto as an exhibit to its
currently effective Registration Statement under the 1933 Act.
7. Authorized Representations - The Distributor is not authorized by the
Issuer to give any information or to make any representations other than
those contained in the appropriate registration statements or Prospectuses
and Statements of Additional Information filed with the Securities and
Exchange Commission under the 1933 Act (as these registration statements,
Prospectuses and Statements of Additional Information may be amended from
time to time), or contained in shareholder reports or other material that
may be prepared by or on behalf of the Issuer for the Distributor's use.
This shall not be construed to prevent the Distributor from preparing and
distributing sales literature or other material as it may deem appropriate.
8. Portfolio Securities - Portfolio securities of the Issuer may be bought
or sold by or through the Distributor, and the Distributor may participate
directly or indirectly in brokerage commissions or "spreads" for
transactions in portfolio securities of the Issuer. However, all sums of
money received by the Distributor as a result of such purchases and sales
or as a result of such participation must, after reimbursement of actual
expenses of the Distributor in connection with such activity, be paid over
by the Distributor for the benefit of the Issuer.
9. Registration of Shares - The Issuer agrees that it will take all action
necessary to register shares under the 1933 Act (subject to the necessary
approval of its shareholders) so that there will be available for sale the
number of shares the Distributor may reasonably be expected to sell. The
Issuer shall make available to the Distributor such number of copies of its
currently effective Prospectus and Statement of Additional Information as
the Distributor may reasonably request. The Issuer shall furnish to the
Distributor copies of all information, financial statements and other
papers which the Distributor may reasonably request for use in connection
with the distribution of shares of the Issuer.
10. Expenses - The Issuer shall pay all fees and expenses (a) in connection
with the preparation, setting in type and filing of any registration
statement, Prospectus and Statement of Additional Information under the
1933 Act and amendments for the issue of its shares, (b) in connection with
the registration and qualification of shares for sale in the various states
in which the Board of Trustees of the Issuer shall determine it advisable
to qualify such shares for sale (including registering the Issuer as a
broker or dealer or any officer of the Issuer as agent or salesman in any
state), (c) of preparing, setting in type, printing and mailing any report
or other communication to shareholders of the Issuer in their capacity as
such, and (d) of preparing, setting in type, printing and mailing
Prospectuses, Statements of Additional Information and any supplements
thereto sent to existing shareholders.
As provided in the Distribution and Service Plan adopted by the Issuer, it
is recognized by the Issuer that FMR may reimburse the Distributor for any
direct expenses incurred in the distribution of shares of the Issuer from
any source available to it, including advisory and service or management
fees paid to it by the Issuer.
11. Indemnification - The Issuer agrees to indemnify and hold harmless the
Distributor and each of its directors and officers and each person, if any,
who controls the Distributor within the meaning of Section 15 of the 1933
Act against any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages, or expense and reasonable counsel fees incurred in
connection therewith) arising by reason of any person acquiring any shares,
based upon the ground that the registration statement, Prospectus,
Statement of Additional Information, shareholder reports or other
information filed or made public by the Issuer (as from time to time
amended) included an untrue statement of a material fact or omitted to
state a material fact required to be stated or necessary in order to make
the statements not misleading under the 1933 Act, or any other statute or
the common law. However, the Issuer does not agree to indemnify the
Distributor or hold it harmless to the extent that the statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Issuer by or on behalf of the Distributor. In no case (i)
is the indemnity of the Issuer in favor of the Distributor or any person
indemnified to be deemed to protect the Distributor or any person against
any liability to the Issuer or its security holders to which the
Distributor or such person would otherwise be subject by reason of wilful
misfeasance, bad faith or gross negligence in the performance of its duties
or by reason of its reckless disregard of its obligations and duties under
this Agreement, or (ii) is the Issuer to be liable under its indemnity
agreement contained in this paragraph with respect to any claim made
against the Distributor or any person indemnified unless the Distributor or
person, as the case may be, shall have notified the Issuer in writing of
the claim within a reasonable time after the summons or other first written
notification giving information of the nature of the claim shall have been
served upon the Distributor or any such person (or after the Distributor or
such person shall have received notice of service on any designated agent).
However, failure to notify the Issuer of any claim shall not relieve the
Issuer from any liability which it may have to the Distributor or any
person against whom such action is brought otherwise than on account of its
indemnity agreement contained in this paragraph. The Issuer shall be
entitled to participate at its own expense in the defense, or, if it so
elects, to assume the defense of any suit brought to enforce any claims,
but if the Issuer elects to assume the defense, the defense shall be
conducted by counsel chosen by it and satisfactory to the Distributor or
person or persons, defendant or defendants in the suit. In the event the
Issuer elects to assume the defense of any suit and retain counsel, the
Distributor, officers or directors or controlling person or persons,
defendant or defendants in the suit, shall bear the fees and expenses of
any additional counsel retained by them. If the Issuer does not elect to
assume the defense of any suit, it will reimburse the Distributor, officers
or directors or controlling person or persons, defendant or defendants in
the suit, for the reasonable fees and expenses of any counsel retained by
them. The Issuer agrees to notify the Distributor promptly of the
commencement of any litigation or proceedings against it or any of its
officers or trustees in connection with the issuance or sale of any of the
shares.
The Distributor also covenants and agrees that it will indemnify and hold
harmless the Issuer and each of its Board members and officers and each
person, if any, who controls the Issuer within the meaning of Section 15 of
the 1933 Act, against any loss, liability, damages, claim or expense
(including the reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable counsel fees
incurred in connection therewith) arising by reason of any person acquiring
any shares, based upon the 1933 Act or any other statute or common law,
alleging any wrongful act of the Distributor or any of its employees or
alleging that the registration statement, Prospectus, Statement of
Additional Information, shareholder reports or other information filed or
made public by the Issuer (as from time to time amended) included an untrue
statement of a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not misleading,
insofar as the statement or omission was made in reliance upon, and in
conformity with information furnished to the Issuer by or on behalf of the
Distributor. In no case (i) is the indemnity of the Distributor in favor
of the Issuer or any person indemnified to be deemed to protect the Issuer
or any person against any liability to which the Issuer or such person
would otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under this Agreement, or
(ii) is the Distributor to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against the
Issuer or any person indemnified unless the Issuer or person, as the case
may be, shall have notified the Distributor in writing of the claim within
a reasonable time after the summons or other first written notification
giving information of the nature of the claim shall have been served upon
the Issuer or any such person (or after the Issuer or such person shall
have received notice of service on any designated agent). However, failure
to notify the Distributor of any claim shall not relieve the Distributor
from any liability which it may have to the Issuer or any person against
whom the action is brought otherwise than on account of its indemnity
agreement contained in this paragraph. In the case of any notice to the
Distributor, it shall be entitled to participate, at its own expense, in
the defense or, if it so elects, to assume the defense of any suit brought
to enforce the claim, but if the Distributor elects to assume the defense,
the defense shall be conducted by counsel chosen by it and satisfactory to
the Issuer, to its officers and Board and to any controlling person or
persons, defendant or defendants in the suit. In the event that the
Distributor elects to assume the defense of any suit and retain counsel,
the Issuer or controlling persons, defendant or defendants in the suit,
shall bear the fees and expense of any additional counsel retained by them.
If the Distributor does not elect to assume the defense of any suit, it
will reimburse the Issuer, officers and Board or controlling person or
persons, defendant or defendants in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Distributor agrees to notify
the Issuer promptly of the commencement of any litigation or proceedings
against it in connection with the issue and sale of any of the shares.
12. Effective Date - This agreement shall be effective upon its execution,
and unless terminated as provided, shall continue in force until January
31, 1994 and thereafter from year to year, provided continuance is approved
annually by the vote of a majority of the Board members of the Issuer, and
by the vote of those Board members of the Issuer who are not "interested
persons" of the Issuer and, if a plan under Rule 12b-1 under the Investment
Company Act of 1940 is in effect, by the vote of those Board members of the
Issuer who are not "interested persons" of the Issuer and who are not
parties to the Distribution and Service Plan or this Agreement and have no
financial interest in the operation of the Distribution and Service Plan or
in any agreements related to the Distribution and Service Plan, cast in
person at a meeting called for the purpose of voting on the approval. This
Agreement shall automatically terminate in the event of its assignment. As
used in this paragraph, the terms "assignment" and "interested persons"
shall have the respective meanings specified in the Investment Company Act
of 1940 as now in effect or as hereafter amended. In addition to
termination by failure to approve continuance or by assignment, this
Agreement may at any time be terminated by either party upon not less than
sixty days' prior written notice to the other party.
13. Notice - Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by registered or certified
mail, postage prepaid, addressed by the party giving notice to the other
party at the last address furnished by the other party to the party giving
notice: if to the Issuer, at 82 Devonshire Street, Boston, Massachusetts,
and if to the Distributor, at 82 Devonshire Street, Boston, Massachusetts.
14. Limitation of Liability - The Distributor is expressly put on notice of
the limitation of shareholder liability as set forth in the Trust
Instrument of the Issuer and agrees that the obligations assumed by the
Issuer under this contract shall be limited in all cases to the Issuer and
its assets. The Distributor shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the Issuer. Nor
shall the Distributor seek satisfaction of any such obligation from the
Trustees or any individual Trustee of the Issuer. The Distributor
understands that the rights and obligations of each series of shares of the
Issuer under the Issuer's Declaration of Trust are separate and distinct
from those of any and all other series.
IN WITNESS WHEREOF, the Issuer has executed this instrument in its name
and behalf, and its seal affixed, by one of its officers duly authorized,
and the Distributor has executed this instrument in its name and behalf,
and its corporate seal affixed, by one of its officers duly authorized, as
of the day and year first above written.
DAILY MONEY FUND:
Capital Reserves: Municipal Money Market Portfolio
Attest:/s/ Arthur S. Lorng By /s/ J. Gary Burkhead
Secretary
NATIONAL FINANCIAL SERVICES CORPORATION
Attest: By /s/ Robert P. Mazzarella
Clerk
LG932460029
GENERAL DISTRIBUTION AGREEMENT
between
DAILY MONEY
CAPITAL RESERVES: Money Market Portfolio
and
NATIONAL FINANCIAL SERVICES CORPORATION
Agreement made this 30 day of September, 1993, between Daily Money Fund, a
Delaware business trust which may issue one or more series of beneficial
interest ("Issuer"), with respect to shares of Capital Reserves: Money
Market Portfolio, a series of the Issuer, and National Financial Services
Corporation, a Massachusetts corporation having its principal place of
business in Boston, Massachusetts ("Distributors").
In consideration of the mutual promises and undertakings herein contained,
the parties agree as follows:
1. Sale of Shares - The Issuer grants to the Distributor the right to sell
shares on behalf of the Issuer during the term of this Agreement and
subject to the registration requirements of the Securities Act of 1933, as
amended ("1933 Act"), and of the laws governing the sale of securities in
the various states ("Blue Sky Laws") under the following terms and
conditions: the Distributor (i) shall have the right to sell, as agent on
behalf of the Issuer, shares authorized for issue and registered under the
1933 Act, and (ii) may sell shares under offers of exchange, if available,
between and among the funds advised by Fidelity Management & Research
Company ("FMR").
2. Sale of Shares by the Issuer - The rights granted to the Distributor
shall be nonexclusive in that the Issuer reserves the right to sell its
shares to investors on applications received and accepted by the Issuer.
Further, the Issuer reserves the right to issue shares in connection with
the merger or consolidation, or acquisition by the Issuer through purchase
or otherwise, with any other investment company, trust, or personal holding
company.
3. Shares Covered by this Agreement - This Agreement shall apply to
unissued shares of the Issuer, shares of the Issuer held in its treasury in
the event that in the discretion of the Issuer treasury shares shall be
sold, and shares of the Issuer repurchased for resale.
4. Public Offering Price - Except as otherwise noted in the Issuer's
current Prospectus and/or Statement of Additional Information, all shares
sold to investors by the Distributor or the Issuer will be sold at the
public offering price. The public offering price for all accepted
subscriptions will be the net asset value per share, as determined in the
manner described in the Issuer's current Prospectus and/or Statement of
Additional Information, plus a sales charge (if any) described in the
Issuer's current Prospectus and/or Statement of Additional Information.
The Issuer shall in all cases receive the net asset value per share on all
sales. If a sales charge is in effect, the Distributor shall have the
right subject to such rules or regulations of the Securities and Exchange
Commission as may then be in effect pursuant to Section 22 of the
Investment Company Act of 1940 to pay a portion of the sales charge to
dealers who have sold shares of the Issuer. If a fee in connection with
shareholder redemptions is in effect, the Issuer shall collect the fee on
behalf of the Distributor and, unless otherwise agreed upon by the Issuer
and the Distributor, the Distributor shall be entitled to receive all of
such fees.
5. Suspension of Sales - If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further
orders for shares shall be processed by the Distributor except such
unconditional orders as may have been placed with the Distributor before it
had knowledge of the suspension. In addition, the Issuer reserves the
right to suspend sales and the Distributor's authority to process orders
for shares on behalf of the Issuer if, in the judgment of the Issuer, it is
in the best interests of the Issuer to do so. Suspension will continue for
such period as may be determined by the Issuer.
6. Solicitation of Sales - In consideration of these rights granted to the
Distributor, the Distributor agrees to use all reasonable efforts,
consistent with its other business, to secure purchasers for shares of the
Issuer. This shall not prevent the Distributor from entering into like
arrangements (including arrangements involving the payment of underwriting
commissions) with other issuers. This does not obligate the Distributor to
register as a broker or dealer under the Blue Sky Laws of any jurisdiction
in which it is not now registered or to maintain its registration in any
jurisdiction in which it is now registered. If a sales charge is in
effect, the Distributor shall have the right to enter into sales agreements
with dealers of its choice for the sale of shares of the Issuer to the
public at the public offering price only and fix in such agreements the
portion of the sales charge which may be retained by dealers, provided that
the Issuer shall approve the form of the dealer agreement and the dealer
discounts set forth therein and shall evidence such approval by filing said
form of dealer agreement and amendments thereto as an exhibit to its
currently effective Registration Statement under the 1933 Act.
7. Authorized Representations - The Distributor is not authorized by the
Issuer to give any information or to make any representations other than
those contained in the appropriate registration statements or Prospectuses
and Statements of Additional Information filed with the Securities and
Exchange Commission under the 1933 Act (as these registration statements,
Prospectuses and Statements of Additional Information may be amended from
time to time), or contained in shareholder reports or other material that
may be prepared by or on behalf of the Issuer for the Distributor's use.
This shall not be construed to prevent the Distributor from preparing and
distributing sales literature or other material as it may deem appropriate.
8. Portfolio Securities - Portfolio securities of the Issuer may be bought
or sold by or through the Distributor, and the Distributor may participate
directly or indirectly in brokerage commissions or "spreads" for
transactions in portfolio securities of the Issuer. However, all sums of
money received by the Distributor as a result of such purchases and sales
or as a result of such participation must, after reimbursement of actual
expenses of the Distributor in connection with such activity, be paid over
by the Distributor for the benefit of the Issuer.
9. Registration of Shares - The Issuer agrees that it will take all action
necessary to register shares under the 1933 Act (subject to the necessary
approval of its shareholders) so that there will be available for sale the
number of shares the Distributor may reasonably be expected to sell. The
Issuer shall make available to the Distributor such number of copies of its
currently effective Prospectus and Statement of Additional Information as
the Distributor may reasonably request. The Issuer shall furnish to the
Distributor copies of all information, financial statements and other
papers which the Distributor may reasonably request for use in connection
with the distribution of shares of the Issuer.
10. Expenses - The Issuer shall pay all fees and expenses (a) in connection
with the preparation, setting in type and filing of any registration
statement, Prospectus and Statement of Additional Information under the
1933 Act and amendments for the issue of its shares, (b) in connection with
the registration and qualification of shares for sale in the various states
in which the Board of Trustees of the Issuer shall determine it advisable
to qualify such shares for sale (including registering the Issuer as a
broker or dealer or any officer of the Issuer as agent or salesman in any
state), (c) of preparing, setting in type, printing and mailing any report
or other communication to shareholders of the Issuer in their capacity as
such, and (d) of preparing, setting in type, printing and mailing
Prospectuses, Statements of Additional Information and any supplements
thereto sent to existing shareholders.
As provided in the Distribution and Service Plan adopted by the Issuer, it
is recognized by the Issuer that FMR may reimburse the Distributor for any
direct expenses incurred in the distribution of shares of the Issuer from
any source available to it, including advisory and service or management
fees paid to it by the Issuer.
11. Indemnification - The Issuer agrees to indemnify and hold harmless the
Distributor and each of its directors and officers and each person, if any,
who controls the Distributor within the meaning of Section 15 of the 1933
Act against any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages, or expense and reasonable counsel fees incurred in
connection therewith) arising by reason of any person acquiring any shares,
based upon the ground that the registration statement, Prospectus,
Statement of Additional Information, shareholder reports or other
information filed or made public by the Issuer (as from time to time
amended) included an untrue statement of a material fact or omitted to
state a material fact required to be stated or necessary in order to make
the statements not misleading under the 1933 Act, or any other statute or
the common law. However, the Issuer does not agree to indemnify the
Distributor or hold it harmless to the extent that the statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Issuer by or on behalf of the Distributor. In no case (i)
is the indemnity of the Issuer in favor of the Distributor or any person
indemnified to be deemed to protect the Distributor or any person against
any liability to the Issuer or its security holders to which the
Distributor or such person would otherwise be subject by reason of wilful
misfeasance, bad faith or gross negligence in the performance of its duties
or by reason of its reckless disregard of its obligations and duties under
this Agreement, or (ii) is the Issuer to be liable under its indemnity
agreement contained in this paragraph with respect to any claim made
against the Distributor or any person indemnified unless the Distributor or
person, as the case may be, shall have notified the Issuer in writing of
the claim within a reasonable time after the summons or other first written
notification giving information of the nature of the claim shall have been
served upon the Distributor or any such person (or after the Distributor or
such person shall have received notice of service on any designated agent).
However, failure to notify the Issuer of any claim shall not relieve the
Issuer from any liability which it may have to the Distributor or any
person against whom such action is brought otherwise than on account of its
indemnity agreement contained in this paragraph. The Issuer shall be
entitled to participate at its own expense in the defense, or, if it so
elects, to assume the defense of any suit brought to enforce any claims,
but if the Issuer elects to assume the defense, the defense shall be
conducted by counsel chosen by it and satisfactory to the Distributor or
person or persons, defendant or defendants in the suit. In the event the
Issuer elects to assume the defense of any suit and retain counsel, the
Distributor, officers or directors or controlling person or persons,
defendant or defendants in the suit, shall bear the fees and expenses of
any additional counsel retained by them. If the Issuer does not elect to
assume the defense of any suit, it will reimburse the Distributor, officers
or directors or controlling person or persons, defendant or defendants in
the suit, for the reasonable fees and expenses of any counsel retained by
them. The Issuer agrees to notify the Distributor promptly of the
commencement of any litigation or proceedings against it or any of its
officers or trustees in connection with the issuance or sale of any of the
shares.
The Distributor also covenants and agrees that it will indemnify and hold
harmless the Issuer and each of its Board members and officers and each
person, if any, who controls the Issuer within the meaning of Section 15 of
the 1933 Act, against any loss, liability, damages, claim or expense
(including the reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable counsel fees
incurred in connection therewith) arising by reason of any person acquiring
any shares, based upon the 1933 Act or any other statute or common law,
alleging any wrongful act of the Distributor or any of its employees or
alleging that the registration statement, Prospectus, Statement of
Additional Information, shareholder reports or other information filed or
made public by the Issuer (as from time to time amended) included an untrue
statement of a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not misleading,
insofar as the statement or omission was made in reliance upon, and in
conformity with information furnished to the Issuer by or on behalf of the
Distributor. In no case (i) is the indemnity of the Distributor in favor
of the Issuer or any person indemnified to be deemed to protect the Issuer
or any person against any liability to which the Issuer or such person
would otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under this Agreement, or
(ii) is the Distributor to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against the
Issuer or any person indemnified unless the Issuer or person, as the case
may be, shall have notified the Distributor in writing of the claim within
a reasonable time after the summons or other first written notification
giving information of the nature of the claim shall have been served upon
the Issuer or any such person (or after the Issuer or such person shall
have received notice of service on any designated agent). However, failure
to notify the Distributor of any claim shall not relieve the Distributor
from any liability which it may have to the Issuer or any person against
whom the action is brought otherwise than on account of its indemnity
agreement contained in this paragraph. In the case of any notice to the
Distributor, it shall be entitled to participate, at its own expense, in
the defense or, if it so elects, to assume the defense of any suit brought
to enforce the claim, but if the Distributor elects to assume the defense,
the defense shall be conducted by counsel chosen by it and satisfactory to
the Issuer, to its officers and Board and to any controlling person or
persons, defendant or defendants in the suit. In the event that the
Distributor elects to assume the defense of any suit and retain counsel,
the Issuer or controlling persons, defendant or defendants in the suit,
shall bear the fees and expense of any additional counsel retained by them.
If the Distributor does not elect to assume the defense of any suit, it
will reimburse the Issuer, officers and Board or controlling person or
persons, defendant or defendants in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Distributor agrees to notify
the Issuer promptly of the commencement of any litigation or proceedings
against it in connection with the issue and sale of any of the shares.
12. Effective Date - This agreement shall be effective upon its execution,
and unless terminated as provided, shall continue in force until January
31, 1994 and thereafter from year to year, provided continuance is approved
annually by the vote of a majority of the Board members of the Issuer, and
by the vote of those Board members of the Issuer who are not "interested
persons" of the Issuer and, if a plan under Rule 12b-1 under the Investment
Company Act of 1940 is in effect, by the vote of those Board members of the
Issuer who are not "interested persons" of the Issuer and who are not
parties to the Distribution and Service Plan or this Agreement and have no
financial interest in the operation of the Distribution and Service Plan or
in any agreements related to the Distribution and Service Plan, cast in
person at a meeting called for the purpose of voting on the approval. This
Agreement shall automatically terminate in the event of its assignment. As
used in this paragraph, the terms "assignment" and "interested persons"
shall have the respective meanings specified in the Investment Company Act
of 1940 as now in effect or as hereafter amended. In addition to
termination by failure to approve continuance or by assignment, this
Agreement may at any time be terminated by either party upon not less than
sixty days' prior written notice to the other party.
13. Notice - Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by registered or certified
mail, postage prepaid, addressed by the party giving notice to the other
party at the last address furnished by the other party to the party giving
notice: if to the Issuer, at 82 Devonshire Street, Boston, Massachusetts,
and if to the Distributor, at 82 Devonshire Street, Boston, Massachusetts.
14. Limitation of Liability - The Distributor is expressly put on notice of
the limitation of shareholder liability as set forth in the Trust
Instrument of the Issuer and agrees that the obligations assumed by the
Issuer under this contract shall be limited in all cases to the Issuer and
its assets. The Distributor shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the Issuer. Nor
shall the Distributor seek satisfaction of any such obligation from the
Trustees or any individual Trustee of the Issuer. The Distributor
understands that the rights and obligations of each series of shares of the
Issuer under the Issuer's Declaration of Trust are separate and distinct
from those of any and all other series.
IN WITNESS WHEREOF, the Issuer has executed this instrument in its name
and behalf, and its seal affixed, by one of its officers duly authorized,
and the Distributor has executed this instrument in its name and behalf,
and its corporate seal affixed, by one of its officers duly authorized, as
of the day and year first above written.
DAILY MONEY FUND:
Capital Reserves: Money Market Portfolio
Attest:/s/ Arthur S.Loring By /s/ J. Gary Burkhead
Secretary
NATIONAL FINANCIAL SERVICES CORPORATION
Attest: By /s/ Robert P. Mozzarella
Clerk
LG932460031
CUSTODIAN AGREEMENT
Dated as of: September 30, 1993
Between
DAILY MONEY FUND
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
TABLE OF CONTENTS
ARTICLE
Page
I. APPOINTMENT OF CUSTODIAN 1
II. POWERS AND DUTIES OF CUSTODIAN 1
2.01 Safekeeping 1
2.02 Manner of Holding Securities 2
2.03 Security Purchases 2
2.04 Exchanges of Securities 3
2.05 Sales of Securities 3
2.06 Depositary Receipts 3
2.07 Exercise of Rights; Tender Offers 4
2.08 Stock Dividends, Rights, Etc. 4
2.09 Options 4
2.10 Futures Contracts 4
2.11 Borrowing 5
2.12 Interest Bearing Deposits 5
2.13 Foreign Exchange Transactions 6
2.14 Securities Loans 6
2.15 Collections 7
2.16 Dividends, Distributions and Redemptions 7
2.17 Proceeds from Shares Sold 7
2.18 Proxies, Notices, Etc. 7
2.19 Bills and Other Disbursements 8
2.20 Nondiscretionary Functions 8
2.21 Bank Accounts 8
2.22 Deposit of Fund Assets in Securities Systems 9
2.23 Other Transfers 10
2.24 Establishment of Segregated Account 10
2.25 Custodian's Books and Records . 10
2.26 Opinion of Fund's Independent Certified Public Accountants 11
2.27 Reports of Independent Certified Public Accountants 11
2.28 Overdraft Facility 11
III. PROPER INSTRUCTIONS, SPECIAL INSTRUCTIONS
AND RELATED MATTERS 12
3.01 Proper Instructions and Special Instructions 12
3.02 Authorized Persons 13
3.03 Persons Having Access to Assets of the Portfolios 13
3.04 Actions of the Custodian Based on Proper Instructions and
Special Instructions 13
IV. SUBCUSTODIANS 13
4.01 Domestic Subcustodians 14
4.02 Foreign Subcustodians and Interim Subcustodians 14
4.03 Special Subcustodians 15
4.04 Termination of a Subcustodian 15
4.05 Certification Regarding Foreign Subcustodians 16
V. STANDARD OF CARE; INDEMNIFICATION 16
5.01 Standard of Care 16
5.02 Liability of Custodian for Actions of Other Persons 17
5.03 Indemnification 18
5.04 Investment Limitations 19
5.05 Fund's Right to Proceed 19
VI. COMPENSATION 20
VII. TERMINATION 20
7.01 Termination of Agreement in Full 20
7.02 Termination as to One or More Portfolios 21
VIII. DEFINED TERMS 21
IX. MISCELLANEOUS 22
9.01 Execution of Documents, Etc 22
9.02 Representative Capacity; Nonrecourse Obligations 22
9.03 Several Obligations of the Portfolios 23
9.04 Representations and Warranties 23
9.05 Entire Agreement 23
9.06 Waivers and Amendments 24
9.07 Interpretation 24
9.08 Captions 24
9.09 Governing Law 24
9.10 Notices 24
9.11 Assignment 25
9.12 Counterparts 25
9.13 Confidentiality; Survival of Obligations 25
APPENDICES
Appendix "A" - List of Portfolios
Appendix "B" - List of Foreign Subcustodians
and Special Subcustodians
Appendix "C" - Procedures Relating to
Custodian's Security Interest
CUSTODIAN AGREEMENT
AGREEMENT made as of the 30th day of September, 1993 between Daily Money
Fund (the "Fund") and Morgan Guaranty Trust Company of New York (the
"Custodian").
W I T N E S S E T H
WHEREAS, the Fund may, from time to time organize one or more series of
shares, in addition to the series set forth in Appendix "A" attached
hereto, each of which shall represent an interest in a separate portfolio
of cash, securities and other assets (all such existing and additional
series now or hereafter listed on Appendix "A" being hereinafter referred
to individually, as a "Portfolio," and collectively, as the "Portfolios");
and
WHEREAS, the Fund desires to appoint the Custodian as custodian on behalf
of the Portfolios in accordance with the provisions of the Investment
Company Act of 1940 (the "1940 Act") and the rules and regulations
thereunder, under the terms and conditions set forth in this Agreement, and
the Custodian has agreed so to act as custodian.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
APPOINTMENT OF CUSTODIAN
On behalf of the Portfolios, the Fund hereby employs and appoints the
Custodian as a custodian, subject to the terms and provisions of this
Agreement. The Fund shall deliver to the Custodian, or shall cause to be
delivered to the Custodian, cash, securities and other assets owned by the
Portfolios from time to time during the term of this Agreement and shall
specify the Portfolio to which such cash, securities and other assets are
to be specifically allocated.
ARTICLE II
POWERS AND DUTIES OF CUSTODIAN
As custodian, the Custodian shall have and perform the powers and duties
set forth in this Article II. Pursuant to and in accordance with Article
IV hereof, the Custodian may appoint one or more Subcustodians (as
hereinafter defined) to exercise the powers and perform the duties of the
Custodian set forth in this Article II and references to the Custodian in
this Article II shall include any Subcustodian so appointed.
Section 2.01. Safekeeping. The Custodian shall keep safely all cash,
securities and other assets of the Portfolios delivered to the Custodian
and, on behalf of the Portfolios, the Custodian shall, from time to time,
accept delivery of cash, securities and other assets for safekeeping.
Section 2.02. Manner of Holding Securities.
(a) The Custodian shall at all times hold securities of the Portfolios
either: (i) by physical possession of the share certificates or other
instruments representing such securities in registered or bearer form; or
(ii) in book-entry form by a Securities System (as hereinafter defined) in
accordance with the provisions of Section 2.22 below.
(b) The Custodian shall at all times hold registered securities of each
Portfolio in the name of the Custodian, the Portfolio or a nominee of
either of them, unless specifically directed by Proper Instructions to hold
such registered securities in so-called street name; provided that, in any
event, all such securities and other assets shall be held in an account of
the Custodian containing only assets of a Portfolio, or only assets held by
Custodian as a fiduciary or custodian for customers, and provided further,
that the records of the Custodian shall indicate at all times the Portfolio
or other customer for which such securities and other assets are held in
such account and the respective interests therein.
Section 2.03. Security Purchases. Upon receipt of Proper Instructions
(as hereinafter defined), the Custodian shall pay for and receive
securities purchased for the account of a Portfolio, provided that payment
shall be made by Custodian only upon receipt of the securities: (a) by the
Custodian; (b) by a clearing corporation of a national securities exchange
of which the Custodian is a member; or (c) by a Securities System.
Notwithstanding the foregoing, upon receipt of Proper Instructions: (i) in
the case of a repurchase agreement, the Custodian may release funds to a
Securities System prior to the receipt of advice from the Securities System
that the securities underlying such repurchase agreement have been
transferred by book-entry into the Account (as hereinafter defined)
maintained with such Securities System by the Custodian, provided that the
Custodian's instructions to the Securities system require that the
Securities System may make payment of such funds to the other party to the
repurchase agreement only upon transfer by book-entry of the securities
underlying the repurchase agreement into the Account; (ii) in the case of
time deposits, call account deposits, currency deposits, and other
deposits, foreign exchange transactions, futures contracts or options,
pursuant to Sections 2.09, 2.10, 2.12 and 2.13 hereof, the Custodian may
make payment therefor before receipt of an advice or confirmation
evidencing said deposit or entry into such transaction; (iii) in the case
of the purchase of securities, the settlement of which occurs outside of
the United States of America, the Custodian may make payment therefor and
receive delivery of such securities in accordance with local custom and
practice generally accepted by Institutional Clients (as hereinafter
defined) in the country in which the settlement occurs, but in all events
subject to the standard of care set forth in Article V hereof; and (iv) in
the case of the purchase of securities in which, in accordance with
standard industry custom and practice generally accepted by Institutional
Clients with respect to such securities, the receipt of such securities and
the payment therefor take place in different countries, the Custodian may
receive delivery of such securities and make payment therefor in accordance
with standard industry custom and practice for such securities generally
accepted by Institutional Clients, but in all events subject to the
standard of care set forth in Article V hereof. For purposes of this
Agreement, an "Institutional Client" shall mean a major commercial bank,
corporation, insurance company, or substantially similar institution,
which, as a substantial part of its business operations, purchases or sells
securities and makes use of custodial services.
Section 2.04. Exchanges of Securities. Upon receipt of Proper
Instructions, the Custodian shall exchange securities held by it for the
account of a Portfolio for other securities in connection with any
reorganization, recapitalization, split-up of shares, change of par value,
conversion or other event relating to the securities or the issuer of such
securities, and shall deposit any such securities in accordance with the
terms of any reorganization or protective plan. The Custodian shall,
without receiving Proper Instructions: surrender securities in temporary
form for definitive securities; surrender securities for transfer into the
name of the Custodian, a Portfolio or a nominee of either of them, as
permitted by Section 2.02(b); and surrender securities for a different
number of certificates or instruments representing the same number of
shares or same principal amount of indebtedness, provided that the
securities to be issued will be delivered to the Custodian or a nominee of
the Custodian.
Section 2.05. Sales of Securities. Upon receipt of Proper Instructions,
the Custodian shall make delivery of securities which have been sold for
the account of a Portfolio, but only against payment therefor in the form
of: (a) cash, certified check, bank cashier's check, bank credit, or bank
wire transfer; (b) credit to the account of the custodian with a clearing
corporation of a national securities exchange of which the Custodian is a
member; or (c) credit to the Account of the Custodian with a Securities
System, in accordance with the provisions of Section 2.22 hereof.
Notwithstanding the foregoing: (i) in the case of the sale of securities,
the settlement of which occurs outside of the United States of America,
such securities shall be delivered and paid for in accordance with local
custom and practice generally accepted by Institutional Clients in the
country in which the settlement occurs, but in all events subject to the
standard of care set forth in Article V hereof; (ii) in the case of the
sale of securities in which, in accordance with standard industry custom
and practice generally accepted by Institutional Clients with respect to
such securities, the delivery of such securities and receipt of payment
therefor take place in different countries, the Custodian may deliver such
securities and receive payment therefor in accordance with standard
industry custom and practice for such securities generally accepted by
Institutional Clients, but in all events subject to the standard of care
set forth in Article V hereof; and (iii) in the case of securities held in
physical form, such securities shall be delivered and paid for in
accordance with "street delivery custom" to a broker or its clearing agent,
against delivery to the Custodian of a receipt for such securities,
provided that the Custodian shall have taken reasonable steps to ensure
prompt collection of the payment for, or the return of, such securities by
the broker or its clearing agent, and provided further that the Custodian
shall not be responsible for the selection of or the failure or inability
to perform of such broker or its clearing agent.
Section 2.06. Depositary Receipts. Upon receipt of Proper Instructions,
the Custodian shall surrender securities to the depositary used for such
securities by an issuer of American Depositary Receipts or International
Depositary Receipts (hereinafter referred to, collectively, as "ADRs"),
against a written receipt therefor adequately describing such securities
and written evidence satisfactory to the Custodian that the depositary has
acknowledged receipt of instructions to issue ADRs with respect to such
securities in the name of the Custodian or a nominee of the Custodian, for
delivery to the Custodian at such place as the Custodian may from time to
time designate. Upon receipt of Proper Instructions, the Custodian shall
surrender ADRs to the issuer thereof, against a written receipt therefor
adequately describing the ADRs surrendered and written evidence
satisfactory to the Custodian that the issuer of the ADRs has acknowledged
receipt of instructions to cause its depository to deliver the securities
underlying such ADRs to the Custodian.
Section 2.07. Exercise of Rights; Tender Offers. Upon receipt of Proper
Instructions, the Custodian shall: (a) deliver warrants, puts, calls,
rights or similar securities to the issuer or trustee thereof, or to the
agent of such issuer or trustee, for the purpose of exercise or sale,
provided that the new securities, cash or other assets, if any, acquired as
a result of such actions are to be delivered to the Custodian; and (b)
deposit securities upon invitations for tenders thereof, provided that the
consideration for such securities is to be paid or delivered to the
Custodian, or the tendered securities are to be returned to the Custodian.
Notwithstanding any provision of this Agreement to the contrary, the
Custodian shall take all necessary action, unless otherwise directed to the
contrary in Proper Instructions, to comply with the terms of all mandatory
or compulsory exchanges, calls, tenders, redemptions, or similar rights of
security ownership, and shall promptly notify the Fund of such action in
writing by facsimile transmission or in such other manner as the Fund and
Custodian may agree in writing.
Section 2.08. Stock Dividends, Rights, Etc. The Custodian shall receive
and collect all stock dividends, rights and other items of like nature and,
upon receipt of Proper Instructions, take action with respect to the same
as directed in such Proper Instructions.
Section 2.09. Options. Upon receipt of Proper Instructions and in
accordance with the provisions of any agreement between the Custodian, any
registered broker-dealer and, if necessary, the Fund relating to compliance
with the rules of the Options Clearing Corporation or of any registered
national securities exchange or similar organization(s), the Custodian
shall: (a) receive and retain confirmations or other documents, if any,
evidencing the purchase or writing of an option on a security or securities
index by a Portfolio; (b) deposit and maintain in a segregated account,
securities (either physically or by book-entry in a Securities System),
cash or other assets; and (c) pay, release and/or transfer such securities,
cash or other assets in accordance with notices or other communications
evidencing the expiration, termination or exercise of such options
furnished by the Options Clearing Corporation, the securities or options
exchange on which such options are traded, or such other organization as
may be responsible for handling such option transactions. The Fund and the
broker-dealer shall be responsible for the sufficiency of assets held in
any segregated account established in compliance with applicable margin
maintenance requirements and the performance of other terms of any option
contract.
Section 2.10. Futures Contracts. Upon receipt of Proper Instructions, or
pursuant to the provisions of any futures margin procedural agreement among
the Fund, on behalf of any Portfolio, the Custodian and any futures
commission merchant (a "Procedural Agreement"), the Custodian shall: (a)
receive and retain confirmations, if any, evidencing the purchase or sale
of a futures contract or an option on a futures contract by a Portfolio;
(b) deposit and maintain in a segregated account, cash, securities and
other assets designated as initial, maintenance or variation "margin"
deposits intended to secure the Portfolio's performance of its obligations
under any futures contracts purchased or sold or any options on futures
contracts written by the Portfolio, in accordance with the provisions of
any Procedural Agreement designed to comply with the rules of the Commodity
Futures Trading Commission and/or any commodity exchange or contract market
(such as the Chicago Board of Trade), or any similar organization(s),
regarding such margin deposits; and (c) release assets from and/or transfer
assets into such margin accounts only in accordance with any such
Procedural Agreements. The Fund and such futures commission merchant shall
be responsible for the sufficiency of assets held in the segregated account
in compliance with applicable margin maintenance requirements and the
performance of any futures contract or option on a futures contract in
accordance with its terms.
Section 2.11. Borrowing. Upon receipt of Proper Instructions, the
Custodian shall deliver securities of a Portfolio to lenders or their
agents, or otherwise establish a segregated account as agreed to by the
Fund and the Custodian, as collateral for borrowings effected by the Fund
on behalf of a Portfolio, provided that such borrowed money is payable by
the lender (a) to or upon the Custodian's order, as Custodian for such
Portfolio, and (b) concurrently with delivery of such securities.
Section 2.12. Interest Bearing Deposits.
Upon receipt of Proper Instructions directing the Custodian to purchase
interest bearing fixed term and call deposits (hereinafter referred to
collectively, as "Interest Bearing Deposits") for the account of a
Portfolio, the Custodian shall purchase such Interest Bearing Deposits in
the name of a Portfolio with such banks or trust companies (including the
Custodian, any Subcustodian or any subsidiary or affiliate of the
Custodian) (hereinafter referred to as "Banking Institutions") and in such
amounts as the Fund may direct pursuant to Proper Instructions. Such
Interest Bearing Deposits may be denominated in U.S. Dollars or other
currencies, as the Fund may determine and direct pursuant to Proper
Instructions. The Custodian shall include in its records with respect to
the assets of each Portfolio appropriate notation as to the amount and
currency of each such Interest Bearing Bank Deposit, the accepting Banking
Institution and all other appropriate details, and shall retain such forms
of advice or receipt evidencing such account, if any, as may be forwarded
to the Custodian by the Banking Institution. The responsibilities of the
Custodian to the Fund for Interest Bearing Deposits accepted on the
Custodian's books in the United States shall be that of a U.S. bank for a
similar deposit. With respect to Interest Bearing Deposits other than
those accepted on the Custodian's books, (a) the Custodian shall be
responsible for the collection of income as set forth in Section 2.15 and
the transmission of cash and instructions to and from such accounts; and
(b) the Custodian shall have no duty with respect to the selection of the
Banking Institution or, so long as the Custodian acts in accordance with
Proper Instructions, for the failure of such Banking Institution to pay
upon demand. Upon receipt of Proper Instructions, the Custodian shall take
such reasonable actions as the Fund deems necessary or appropriate to cause
each such Interest Bearing Deposit Account to be insured to the maximum
extent possible by all applicable deposit insurers including, without
limitation, the Federal Deposit Insurance Corporation.
Section 2.13. Foreign Exchange Transactions
(a) Foreign Exchange Transactions Other than as Principal. Upon receipt
of Proper Instructions, the Custodian shall settle foreign exchange
contracts or options to purchase and sell foreign currencies for spot and
future delivery on behalf of and for the account of a Portfolio with such
currency brokers or Banking Institutions as the Fund may determine and
direct pursuant to Proper Instructions. The Custodian shall be responsible
for the transmission of cash and instructions to and from the currency
broker or Banking Institution with which the contract or option is made,
the safekeeping of all certificates and other documents and agreements
evidencing or relating to such foreign exchange transactions and the
maintenance of proper records as set forth in Section 2.25. The Custodian
shall have no duty with respect to the selection of the currency brokers or
Banking Institutions with which the Fund deals or, so long as the Custodian
acts in accordance with Proper Instructions, for the failure of such
brokers or Banking Institutions to comply with the terms of any contract or
option.
(b) Foreign Exchange Contracts as Principal. The Custodian shall not be
obligated to enter into foreign exchange transactions as principal.
However, if the Custodian has made available to the Fund its services as a
principal in foreign exchange transactions, upon receipt of Proper
Instructions, the Custodian shall enter into foreign exchange contracts or
options to purchase and sell foreign currencies for spot and future
delivery on behalf of and for the account of a Portfolio with the Custodian
as principal. The Custodian shall be responsible for the selection of the
currency brokers or Banking Institutions and the failure of such currency
brokers or Banking Institutions to comply with the terms of any contract or
option.
(c) Payments. Notwithstanding anything to the contrary contained herein,
upon receipt of Proper Instructions the Custodian may, in connection with a
foreign exchange contract, make free outgoing payments of cash in the form
of U.S. Dollars or foreign currency prior to receipt of confirmation of
such foreign exchange contract or confirmation that the countervalue
currency completing such contract has been delivered or received.
Section 2.14. Securities Loans. Upon receipt of Proper Instructions, the
Custodian shall, in connection with loans of securities by a Portfolio,
deliver securities of such Portfolio to the borrower thereof prior to
receipt of the collateral, if any, for such borrowing; provided that, in
cases of loans of securities secured by cash collateral, the Custodian's
instructions to the Securities System shall require that the Securities
System deliver the securities of the Portfolio to the borrower thereof only
upon receipt of the collateral for such borrowing.
Section 2.15. Collections. The Custodian shall, and shall cause any
Subcustodian to: (a) collect amounts due and payable to the Fund with
respect to portfolio securities and other assets of each Portfolio; (b)
promptly credit to the account of each Portfolio all income and other
payments relating to portfolio securities and other assets held by the
Custodian hereunder upon Custodian's receipt of such income or payments or
as otherwise agreed in writing by the Custodian and the Fund; (c) promptly
endorse and deliver any instruments required to effect such collections;
and (d) promptly execute ownership and other certificates and affidavits
for all federal, state and foreign tax purposes in connection with receipt
of income or other payments with respect to portfolio securities and other
assets of each Portfolio, or in connection with the transfer of such
securities or other assets; provided, however, that with respect to
portfolio securities registered in so-called street name, the Custodian
shall use its best efforts to collect amounts due and payable to the Fund.
The Custodian shall promptly notify the Fund in writing by facsimile
transmission or in such other manner as the Fund and Custodian may agree in
writing if any amount payable with respect to portfolio securities or other
assets of the Portfolios is not received by the Custodian when due. The
Custodian shall not be responsible for the collection of amounts due and
payable with respect to portfolio securities or other assets that are in
default.
Section 2.16. Dividends, Distributions and Redemptions. The Custodian
shall promptly release funds or securities: (a) upon receipt of Proper
Instructions, to one or more Distribution Accounts designated by the Fund
in such Proper Instructions; or (b) upon receipt of Special Instructions,
as otherwise directed by the Fund, for the purpose of the payment of
dividends or other distributions to shareholders of the Portfolios, and
payment to shareholders who have requested repurchase or redemption of
their shares of the Portfolio(s) (collectively, the "Shares"). For
purposes of this Agreement, a "Distribution Account" shall mean an account
established at a Banking Institution designated by the Fund in Special
Instructions.
Section 2.17. Proceeds from Shares Sold. The Custodian shall receive
funds representing cash payments received for Shares issued or sold from
time to time by the Fund, and shall promptly credit such funds to the
account(s) of the applicable Portfolio(s). The Custodian shall promptly
notify the Fund of Custodian's receipt of cash in payment for Shares issued
by the Fund by facsimile transmission or in such other manner as the Fund
and Custodian may agree in writing. Upon receipt of Proper Instructions,
the Custodian shall: (a) deliver all federal funds received by the
Custodian in payment for Shares in payment for such investments as may be
set forth in such Proper Instructions and at a time agreed upon between the
Custodian and the Fund; and (b) make federal funds available to the Fund as
of specified times agreed upon from time to time by the Fund and the
Custodian, in the amount of checks received in payment for Shares which are
deposited to the accounts of the Portfolios.
Section 2.18. Proxies, Notices, Etc. The Custodian shall deliver to the
Fund, in the most expeditious manner practicable, all forms of proxies, all
notices of meetings, and any other notices or announcements affecting or
relating to securities owned by the Portfolios that are received by the
Custodian, any Subcustodian, or any nominee of either of them, and, upon
receipt of Proper Instructions, the Custodian shall execute and deliver, or
cause such Subcustodian or nominee to execute and deliver, such proxies or
other authorizations as may be required. Except as directed pursuant to
Proper Instructions, neither the Custodian nor any Subcustodian or nominee
shall vote upon any such securities, or execute any proxy to vote thereon,
or give any consent or take any other action with respect thereto.
Section 2.19. Bills and Other Disbursements. Upon receipt of Proper
Instructions, the Custodian shall pay or cause to be paid, all bills,
statements, or other obligations of the Portfolios.
Section 2.20. Nondiscretionary Functions. The Custodian shall attend to
all nondiscretionary details in connection with the sale, exchange,
substitution, purchase, transfer or other dealings with securities or other
assets of the Portfolios held by the Custodian, except as otherwise
directed from time to time pursuant to Proper Instructions.
Section 2.21. Bank Accounts
(a) Accounts with the Custodian and any Subcustodians. The Custodian shall
open and operate a bank account or accounts (hereinafter referred to
collectively, as "Bank Accounts") on the books of the Custodian or any
Subcustodian provided that such account(s) shall be in the name of the
Custodian or a nominee of the Custodian, for the account of a Portfolio,
and shall be subject only to the draft or order of the Custodian; provided
however, that such Bank Accounts in countries other than the United States
may be held in an account of the Custodian containing only assets held by
the Custodian as a fiduciary or custodian for customers, and provided
further, that the records of the Custodian shall indicate at all times the
Portfolio or other customer for which such securities and other assets are
held in such account and the respective interests therein. Such Bank
Accounts may be denominated in either U.S. Dollars or other currencies.
The responsibilities of the Custodian to the Fund for deposits accepted on
the Custodian's books in the United States shall be that of a U.S. bank for
a similar deposit. The responsibilities of the Custodian to the Fund for
deposits accepted on any Subcustodian's books shall be governed by the
provisions of Section 5.02.
(b) Accounts With Other Banking Institutions. The Custodian may open and
operate Bank Accounts on behalf of a Portfolio, in the name of the
Custodian or a nominee of the Custodian, at a Banking Institution other
than the Custodian or any Subcustodian, provided that such account(s) shall
be in the name of the Custodian or a nominee of the Custodian, for the
account of a Portfolio, and shall be subject only to the draft or order of
the Custodian; provided however, that such Bank Accounts may be held in an
account of the Custodian containing only assets held by the Custodian as a
fiduciary or custodian for customers, and provided further, that the
records of the Custodian shall indicate at all times the Portfolio or other
customer for which such securities and other assets are held in such
account and the respective interests therein. Such Bank Accounts may be
denominated in either U.S. Dollars or other currencies. Subject to the
provisions of Section 5.01(a), the Custodian shall be responsible for the
selection of the Banking Institution and for the failure of such Banking
Institution to pay according to the terms of the deposit.
(c) Deposit Insurance. Upon receipt of Proper Instructions, the Custodian
shall take such reasonable actions as the Fund deems necessary or
appropriate to cause each deposit account established by the Custodian
pursuant to this Section 2.21 to be insured to the maximum extent possible
by all applicable deposit insurers including, without limitation, the
Federal Deposit Insurance Corporation.
Section 2.22. Deposit of Fund Assets in Securities Systems. The
Custodian may deposit and/or maintain domestic securities owned by the
Portfolios in: (a) The Depository Trust Company; (b) the Participants
Trust Company; (c) any book-entry system as provided in (i) Subpart O of
Treasury Circular No. 300, 31 CFR 306.115, (ii) Subpart B of Treasury
Circular Public Debt Series No. 27-76, 31 CFR 350.2, or (iii) the
book-entry regulations of federal agencies substantially in the form of 31
CFR 306.115; or (d) any other domestic clearing agency registered with the
Securities and Exchange Commission ("SEC") under Section 17A of the
Securities Exchange Act of 1934 (or as may otherwise be authorized by the
Securities and Exchange Commission to serve in the capacity of depository
or clearing agent for the securities or other assets of investment
companies) which acts as a securities depository and the use of which the
Fund has previously approved by Special Instructions (as hereinafter
defined) (each of the foregoing being referred to in this Agreement as a
"Securities System"). Use of a Securities System shall be in accordance
with applicable Federal Reserve Board and SEC rules and regulations, if
any, and subject to the following provisions:
(A) The Custodian may deposit and/or maintain securities held hereunder
in a Securities System, provided that such securities are represented in an
account ("Account") of the Custodian in the Securities System which Account
shall not contain any assets of the Custodian other than assets held as a
fiduciary, custodian, or otherwise for customers.
(B) The books and records of the Custodian shall at all times identify
those securities belonging to each Portfolio which are maintained in a
Securities System.
(C) The Custodian shall pay for securities purchased for the account of a
Portfolio only upon (w) receipt of advice from the Securities System that
such securities have been transferred to the Account of the Custodian, and
(x) the making of an entry on the records of the Custodian to reflect such
payment and transfer for the account of such Portfolio. The Custodian
shall transfer securities sold for the account of a Portfolio only upon (y)
receipt of advice from the Securities System that payment for such
securities has been transferred to the Account of the Custodian, and (z)
the making of an entry on the records of the Custodian to reflect such
transfer and payment for the account of such Portfolio. Copies of all
advices from the Securities System relating to transfers of securities for
the account of a Portfolio shall identify such Portfolio, shall be
maintained for the Portfolio by the Custodian. The Custodian shall deliver
to the Fund on the next succeeding business day daily transaction reports
which shall include each day's transactions in the Securities System for
the account of each Portfolio. Such transaction reports shall be delivered
to the Fund or any agent designated by the Fund pursuant to Proper
Instructions, by computer or in such other manner as the Fund and Custodian
may agree in writing.
(D) The Custodian shall, if requested by the Fund pursuant to Proper
Instructions, provide the Fund with all reports obtained by the Custodian
or any Subcustodian with respect to a Securities System's accounting
system, internal accounting control and procedures for safeguarding
securities deposited in the Securities System.
(E) Upon receipt of Special Instructions, the Custodian shall terminate
the use of any Securities System (except the federal book-entry system) on
behalf of any Portfolio as promptly as practicable and shall take all
actions reasonably practicable to safeguard the securities of the
Portfolios maintained with such Securities System.
Section 2.23. Other Transfers. Upon receipt of Special Instructions, the
Custodian shall make such other dispositions of securities, funds or other
property of the Portfolios in a manner or for purposes other than as
expressly set forth in this Agreement, provided that the Special
Instructions relating to such disposition shall include a statement of the
purpose for which the delivery is to be made, the amount of funds and/or
securities to be delivered, and the name of the person or persons to whom
delivery is to be made, and shall otherwise comply with the provisions of
Sections 3.01 and 3.03 hereof.
Section 2.24. Establishment of Segregated Account. Upon receipt of
Proper Instructions, the Custodian shall establish and maintain on its
books a segregated account or accounts for and on behalf of a Portfolio,
into which account or accounts may be transferred cash and/or securities or
other assets of such Portfolio, including securities maintained by the
Custodian in a Securities System pursuant to Section 2.22 hereof, said
account or accounts to be maintained: (a) for the purposes set forth in
Sections 2.09, 2.10 and 2.11 hereof; (b) for the purposes of compliance by
the Fund with the procedures required by Investment Company Act Release No.
10666, or any subsequent release or releases of the SEC relating to the
maintenance of segregated accounts by registered investment companies; or
(c) for such other purposes as set forth, from time to time, in Special
Instructions.
Section 2.25. Custodian's Books and Records. The Custodian shall provide
any assistance reasonably requested by the Fund in the preparation of
reports to Fund shareholders and others, audits of accounts, and other
ministerial matters of like nature. The Custodian shall maintain complete
and accurate records with respect to securities and other assets held for
the accounts of the Portfolios as required by the rules and regulations of
the SEC applicable to investment companies registered under the 1940 Act,
including: (a) journals or other records of original entry containing a
detailed and itemized daily record of all receipts and deliveries of
securities (including certificate and transaction identification numbers,
if any), and all receipts and disbursements of cash; (b) ledgers or other
records reflecting (i) securities in transfer, (ii) securities in physical
possession, (iii) securities borrowed, loaned or collateralizing
obligations of the Portfolios, (iv) monies borrowed and monies loaned
(together with a record of the collateral therefor and substitutions of
such collateral), and (v) dividends and interest received; and (c)
cancelled checks and bank records related thereto. The Custodian shall
keep such other books and records of the Fund as the Fund shall reasonably
request. All such books and records maintained by the Custodian shall be
maintained in a form acceptable to the Fund and in compliance with the
rules and regulations of the SEC, including, but not limited to, books and
records required to be maintained by Section 31(a) of the 1940 Act and the
rules and regulations from time to time adopted thereunder. All books and
records maintained by the Custodian pursuant to this Agreement shall at all
times be the property of the Fund and shall be available during normal
business hours for inspection and use by the Fund and its agents,
including, without limitation, its independent certified public
accountants. Notwithstanding the preceding sentence, the Funds shall not
take any actions or cause the Custodian to take any actions which would
cause, either directly or indirectly, the Custodian to violate any
applicable laws, regulations or orders.
Section 2.26. Opinion of Fund's Independent Certified Public Accountants.
The Custodian shall take all reasonable action as the Fund may request to
obtain from year to year favorable opinions from the Fund's independent
certified public accountants with respect to the Custodian's activities
hereunder in connection with the preparation of the Fund's Form N-1A and
the Fund's Form N-SAR or other periodic reports to the SEC and with respect
to any other requirements of the SEC.
Section 2.27. Reports by Independent Certified Public Accountants. At
the request of the Fund, the Custodian shall deliver to the Fund a written
report prepared by the Custodian's independent certified public accountants
with respect to the services provided by the Custodian under this
Agreement, including, without limitation, the Custodian's accounting
system, internal accounting control and procedures for safeguarding cash,
securities and other assets, including cash, securities and other assets
deposited and/or maintained in a Securities System or with a Subcustodian.
Such report shall be of sufficient scope and in sufficient detail as may
reasonably be required by the Fund and as may reasonably be obtained by the
Custodian.
Section 2.28. Overdraft Facility. In the event that the Custodian is
directed by Proper Instructions to make any payment or transfer of funds on
behalf of a Portfolio for which there would be, at the close of business on
the date of such payment or transfer, insufficient funds held by the
Custodian on behalf of such Portfolio, the Custodian may, in its
discretion, provide an overdraft (an "Overdraft") to the Fund on behalf of
such Portfolio, in an amount sufficient to allow the completion of such
payment. Any Overdraft provided hereunder: (a) shall be payable on the
next Business Day, unless otherwise agreed by the Fund and the Custodian;
and (b) shall accrue interest from the date of the Overdraft to the date of
payment in full by the Fund on behalf of the applicable Portfolio at a rate
agreed upon in writing, from time to time, by the Custodian and the Fund.
The Custodian and the Fund acknowledge that the purpose of such Overdrafts
is to temporarily finance the purchase or sale of securities for prompt
delivery in accordance with the terms hereof, or to meet emergency expenses
not reasonably foreseeable by the Fund. The Custodian shall promptly
notify the Fund in writing (an "Overdraft Notice") of any Overdraft by
facsimile transmission or in such other manner as the Fund and the
Custodian may agree in writing. At the request of the Custodian, the Fund,
on behalf of a Portfolio, shall pledge, assign and grant to the Custodian a
security interest in certain specified securities of the Portfolio, as
security for Overdrafts provided to such Portfolio, under the terms and
conditions set forth in Appendix "C" attached hereto.
ARTICLE III
PROPER INSTRUCTIONS, SPECIAL INSTRUCTIONS
AND RELATED MATTERS
Section 3.01. Proper Instructions and Special Instructions.
(a) Proper Instructions. As used herein, the term "Proper Instructions"
shall mean: (i) a tested telex, a written (including, without limitation,
facsimile transmission) request, direction, instruction or certification
signed or initialed by or on behalf of the Fund by one or more Authorized
Persons (as hereinafter defined); (ii) a telephonic or other oral
communication by one or more Authorized Persons; or (iii) a communication
effected directly between an electro-mechanical or electronic device or
system (including, without limitation, computers) by or on behalf of the
Fund by one or more Authorized Persons; provided, however, that
communications of the types described in clauses (ii) and (iii) above
purporting to be given by an Authorized Person shall be considered Proper
Instructions only if the Custodian reasonably believes such communications
to have been given by an Authorized Person with respect to the transaction
involved. Proper Instructions in the form of oral communications shall be
confirmed by the Fund by tested telex or in writing in the manner set forth
in clause (i) above, but the lack of such confirmation shall in no way
affect any action taken by the Custodian in reliance upon such oral
instructions prior to the Custodian's receipt of such confirmation. The
Fund and the Custodian are hereby authorized to record any and all
telephonic or other oral instructions communicated to the Custodian.
Proper Instructions may relate to specific transactions or to types or
classes of transactions, and may be in the form of standing instructions.
(b) Special Instructions. As used herein, the term "Special Instructions"
shall mean Proper Instructions countersigned or confirmed in writing by the
Treasurer or any Assistant Treasurer of the Fund or any other person
designated by the Treasurer of the Fund in writing, which countersignature
or confirmation shall be (i)included on the same instrument containing the
Proper Instructions or on a separate instrument relating thereto, and (ii)
delivered by hand, by facsimile transmission, or in such other manner as
the Fund and the Custodian agree in writing.
(c) Address for Proper Instructions and Special Instructions. Proper
Instructions and Special Instructions shall be delivered to the Custodian
at the address and/or telephone, telecopy or telex number agreed upon from
time to time by the Custodian and the Fund.
Section 3.02. Authorized Persons. Concurrently with the execution of
this Agreement and from time to time thereafter, as appropriate, the Fund
shall deliver to the Custodian, duly certified as appropriate by a
Treasurer or Assistant Treasurer of the Fund, a certificate setting forth:
(a) the names, titles, signatures and scope of authority of all persons
authorized to give Proper Instructions or any other notice, request,
direction, instruction, certificate or instrument on behalf of the Fund
(collectively, the "Authorized Persons" and individually, an "Authorized
Person"); and (b) the names, titles and signatures of those persons
authorized to issue Special Instructions. Such certificate may be accepted
and relied upon by the Custodian as conclusive evidence of the facts set
forth therein and shall be considered to be in full force and effect until
delivery to the Custodian of a similar certificate to the contrary. Upon
delivery of a certificate which deletes the name(s) of a person previously
authorized to give Proper Instructions or to issue Special Instructions,
such persons shall no longer be considered an Authorized Person or
authorized to issue Special Instructions.
Section 3.03. Persons Having Access to Assets of the Portfolios.
Notwithstanding anything to the contrary contained in this Agreement, no
Authorized Person, Trustee, officer, employee or agent of the Fund shall
have physical access to the assets of any Portfolio held by the Custodian
nor shall the Custodian deliver any assets of a Portfolio for delivery to
an account of such person; provided, however, that nothing in this Section
3.03 shall prohibit (a) any Authorized Person from giving Proper
Instructions, or any person authorized to issue Special Instructions from
issuing Special Instructions, so long as such action does not result in
delivery of or access to assets of any Portfolio prohibited by this Section
3.03; or (b) the Fund's independent certified public accountants from
examining or reviewing the assets of the Portfolios held by the Custodian.
The Fund shall deliver to the Custodian a written certificate identifying
such Authorized Persons, Trustees, officers, employees and agents of the
Fund.
Section 3.04. Actions of Custodian Based on Proper Instructions and
Special Instructions. So long as and to the extent that the Custodian acts
in accordance with (a) Proper Instructions or Special Instructions, as the
case may be, and (b) the terms of this Agreement, the Custodian shall not
be responsible for the title, validity or genuineness of any property, or
evidence of title thereof, received by it or delivered by it pursuant to
this Agreement.
ARTICLE IV
SUBCUSTODIANS
The Custodian may, from time to time, in accordance with the relevant
provisions of this Article IV, appoint one or more Domestic Subcustodians,
Foreign Subcustodians, Interim Subcustodians and Special Subcustodians to
act on behalf of a Portfolio. (For purposes of this Agreement, all duly
appointed Domestic Subcustodians, Foreign Subcustodians, Interim
Subcustodians, and Special Subcustodians are hereinafter referred to
collectively, as "Subcustodians.")
Section 4.01. Domestic Subcustodians. The Custodian may, at any time and
from time to time, appoint any bank as defined in Section 2(a)(5) of the
1940 Act meeting the requirements of a custodian under Section 17(f) of the
1940 Act and the rules and regulations thereunder, to act on behalf of one
or more Portfolios as a subcustodian for purposes of holding cash,
securities and other assets of such Portfolios and performing other
functions of the Custodian within the United States (a "Domestic
Subcustodian"); provided, that, the Custodian shall notify the Fund in
writing of the identity and qualifications of any proposed Domestic
Subcustodian at least thirty (30) days prior to appointment of such
Domestic Subcustodian, and the Fund may, in its sole discretion, by written
notice to the Custodian executed by an Authorized Person disapprove of the
appointment of such Domestic Subcustodian. If following notice by the
Custodian to the Fund regarding appointment of a Domestic Subcustodian and
the expiration of thirty (30) days after the date of such notice, the Fund
shall have failed to notify the Custodian of its disapproval thereof, the
Custodian may, in its discretion, appoint such proposed Domestic
Subcustodian as its subcustodian.
Section 4.02. Foreign Subcustodians and Interim Subcustodians.
(a) Foreign Subcustodians. The Custodian may, at any time and from time
to time, appoint: (i) any bank, trust company or other entity meeting the
requirements of an "eligible foreign custodian" under Section 17(f) of the
1940 Act and the rules and regulations thereunder or by order of the
Securities and Exchange Commission exempted therefrom, or (ii) any bank as
defined in Section 2(a)(5) of the 1940 Act meeting the requirements of a
custodian under Section 17(f) of the 1940 Act and the rules and regulations
thereunder to act on behalf of one or more Portfolios as a subcustodian for
purposes of holding cash, securities and other assets of such Portfolios
and performing other functions of the Custodian in countries other than the
United States of America (a "Foreign Subcustodian"); provided, that, prior
to the appointment of any Foreign Subcustodian, the Custodian shall have
obtained written confirmation of the approval of the Board of Trustees or
other governing body or entity of the Fund on behalf of the applicable
Portfolio(s) (which approval may be withheld in the sole discretion of such
Board of Trustees or other governing body or entity) with respect to (i)
the identity and qualifications of any proposed Foreign Subcustodian, (ii)
the country or countries in which, and the securities depositories or
clearing agencies, if any, through which, any proposed Foreign Subcustodian
is authorized to hold securities and other assets of the Portfolio(s), and
(iii) the form and terms of the subcustodian agreement to be entered into
between such proposed Foreign Subcustodian and the Custodian. Each such
duly approved Foreign Subcustodian and the countries where and the
securities depositories and clearing agencies through which they may hold
securities and other assets of the Funds shall be listed on Appendix "B"
attached hereto, as it may be amended, from time to time, in accordance
with the provisions of Section 9.05(c) hereof. The Fund shall be
responsible for informing the Custodian sufficiently in advance of a
proposed investment which is to be held in a country in which no Foreign
Subcustodian is authorized to act, in order that there shall be sufficient
time for the Custodian to effect the appropriate arrangements with a
proposed foreign subcustodian, including obtaining approval as provided in
this Section 4.02(a). The Custodian shall not amend any subcustodian
agreement entered into with a Foreign Subcustodian, or agree to change or
permit any changes thereunder, or waive any rights under such agreement,
which materially affect the Fund's rights or the Foreign Subcustodian's
obligations or duties to the Fund under such agreement, except upon prior
approval pursuant to Special Instructions.
(b) Interim Subcustodians. Notwithstanding the foregoing, in the event
that a Portfolio shall invest in a security or other asset to be held in a
country in which no Foreign Subcustodian is authorized to act, the
Custodian shall promptly notify the Fund in writing by facsimile
transmission or in such other manner as the Fund and Custodian shall agree
in writing of the unavailability of an approved Foreign Subcustodian in
such country; and the Custodian shall, upon receipt of Special
Instructions, appoint any Person designated by the Fund in such Special
Instructions to hold such security or other asset. (Any Person appointed
as a subcustodian pursuant to this Section 4.02(b) is hereinafter referred
to as an "Interim Subcustodian.")
Section 4.03. Special Subcustodians. Upon receipt of Special
Instructions, the Custodian shall, on behalf of the Fund for one or more
Portfolios, appoint one or more banks, trust companies or other entities
designated in such Special Instructions to act as a subcustodian for
purposes of: (i) effecting third-party repurchase transactions with banks,
brokers, dealers or other entities through the use of a common custodian or
subcustodian; (ii) establishing a joint trading account for the Portfolios
and other registered open-end management investment companies for which
Fidelity Management & Research Company serves as investment adviser,
through which the Portfolios and such other investment companies shall
collectively participate in certain repurchase transactions; (iii)
providing depository and clearing agency services with respect to certain
variable rate demand note securities; and (iv) effecting any other
transactions designated by the Fund in Special Instructions. (Each such
designated subcustodian is hereinafter referred to as a "Special
Subcustodian.") Each such duly appointed Special Subcustodian shall be
listed on Appendix "B" attached hereto, as it may be amended from time to
time in accordance with the provisions of Section 9.05(c) hereof. In
connection with the appointment of any Special Subcustodian, the Custodian
shall enter into a subcustodian agreement with the Special Subcustodian in
form and substance approved by the Fund, provided that such agreement shall
in all events comply with the provisions of the 1940 Act and the rules and
regulations thereunder and the terms and provisions of this Agreement. The
Custodian shall not amend any subcustodian agreement entered into with a
Special Subcustodian, or agree to change or permit any changes thereunder,
or waive any rights under such agreement, except upon prior approval
pursuant to Special Instructions.
Section 4.04. Termination of a Subcustodian. The Custodian shall (i)
cause each Domestic Subcustodian and Foreign Subcustodian to, and (ii) use
its best efforts to cause each Interim Subcustodian and Special
Subcustodian to, perform all of its obligations in accordance with the
terms and conditions of the subcustodian agreement between the Custodian
and such Subcustodian. In the event that the Custodian is unable to cause
such Subcustodian to fully perform its obligations thereunder, the
Custodian shall forthwith, upon the receipt of Special Instructions,
terminate such Subcustodian with respect to the Fund and, if necessary or
desirable, appoint a replacement Subcustodian in accordance with the
provisions of Section 4.01 or Section 4.02, as the case may be. In
addition to the foregoing, the Custodian (A) may, at any time in its
discretion, upon written notification to the Fund, terminate any Domestic
Subcustodian, Foreign Subcustodian or Interim Subcustodian, and (B) shall,
upon receipt of Special Instructions, terminate any Subcustodian with
respect to the Fund, in accordance with the termination provisions under
the applicable subcustodian agreement.
Section 4.05. Certification Regarding Foreign Subcustodians. Upon
request of the Fund, the Custodian shall deliver to the Fund a certificate
stating: (i) the identity of each Foreign Subcustodian then acting on
behalf of the Custodian; (ii) the countries in which and the securities
depositories and clearing agents through which each such Foreign
Subcustodian is then holding cash, securities and other assets of any
Portfolio; and (iii) such other information as may be requested by the Fund
to ensure compliance with Rule 17(f)-5 under the 1940 Act.
ARTICLE V
STANDARD OF CARE; INDEMNIFICATION
Section 5.01. Standard of Care.
(a) General Standard of Care. The Custodian shall exercise reasonable
care and diligence in carrying out all of its duties and obligations under
this Agreement, and shall be liable to the Fund for all loss, damage and
expense suffered or incurred by the Fund or the Portfolios resulting from
the failure of the Custodian to exercise such reasonable care and
diligence.
(b) Actions Prohibited by Applicable Law, Etc. In no event shall the
Custodian incur liability hereunder if the Custodian or any Subcustodian or
Securities System, or any subcustodian, securities depository or securities
system utilized by any such Subcustodian, or any nominee of the Custodian
or any Subcustodian (individually, a "Person") is prevented, forbidden or
delayed from performing, or omits to perform, any act or thing which this
Agreement provides shall be performed or omitted to be performed, by reason
of: (i) any provision of any present or future law or regulation or order
of the United States of America, or any state thereof, or of any foreign
country, or political subdivision thereof or of any court of competent
jurisdiction; or (ii) any act of God or war or other similar circumstance
beyond the control of the Custodian, unless, in each case, such delay or
nonperformance is caused by (A) the negligence, misfeasance or misconduct
of the applicable Person, or (B) a malfunction or failure of equipment
operated or utilized by the applicable Person other than a malfunction or
failure beyond such Person's control and which could not reasonably be
anticipated and/or prevented by such Person.
(c) Mitigation by Custodian. Upon the occurrence of any event which
causes or may cause any loss, damage or expense to the Fund or any
Portfolio, (i) the Custodian shall, (ii) the Custodian shall cause any
applicable Domestic Subcustodian or Foreign Subcustodian to, and (iii) the
Custodian shall use its best efforts to cause any applicable Interim
Subcustodian or Special Subcustodian to, use all commercially reasonable
efforts and take all reasonable steps under the circumstances to mitigate
the effects of such event and to avoid continuing harm to the Fund and the
Portfolios.
(d) Advice of Counsel. The Custodian shall be entitled to receive and act
upon advice of counsel on all matters. The Custodian shall be without
liability for any action reasonably taken or omitted in good faith pursuant
to the advice of (i) counsel for the Fund, or (ii) at the expense of the
Custodian, such other counsel as the Fund and the Custodian may agree upon;
provided, however, with respect to the performance of any action or
omission of any action upon such advice, the Custodian shall be required to
conform to the standard of care set forth in Section 5.01(a).
(e) Expenses of the Fund. In addition to the liability of the Custodian
under this Article V, the Custodian shall be liable to the Fund for all
reasonable costs and expenses incurred by the Fund in connection with any
claim by the Fund against the Custodian arising from the obligations of the
Custodian hereunder including, without limitation, all reasonable
attorneys' fees and expenses incurred by the Fund in asserting any such
claim, and all expenses incurred by the Fund in connection with any
investigations, lawsuits or proceedings relating to such claim; provided,
that the Fund has recovered from the Custodian for such claim.
(f) Liability for Past Records. The Custodian shall have no liability in
respect of any loss, damage or expense suffered by the Fund, insofar as
such loss, damage or expense arises from the performance of the Custodian's
duties hereunder by reason of the Custodian's reliance upon records that
were maintained for the Fund by entities other than the Custodian prior to
the Custodian's employment hereunder.
Section 5.02. Liability of Custodian for Actions of Other Persons.
(a) Domestic Subcustodians and Foreign Subcustodians. The Custodian shall
be liable for the actions or omissions of any Domestic Subcustodian or any
Foreign Subcustodian to the same extent as if such action or omission were
performed by the Custodian itself. In the event of any loss, damage or
expense suffered or incurred by the Fund caused by or resulting from the
actions or omissions of any Domestic Subcustodian or Foreign Subcustodian
for which the Custodian would otherwise be liable, the Custodian shall
promptly reimburse the Fund in the amount of any such loss, damage or
expense.
(b) Interim Subcustodians. Notwithstanding the provisions of Section 5.01
to the contrary, the Custodian shall not be liable to the Fund for any
loss, damage or expense suffered or incurred by the Fund or any Portfolio
resulting from the actions or omissions of an Interim Subcustodian unless
such loss, damage or expense is caused by, or results from, the negligence,
misfeasance or misconduct of the Custodian; provided, however, in the event
of any such loss, damage or expense, the Custodian shall take all
reasonable steps to enforce such rights as it may have against such Interim
Subcustodian to protect the interests of the Fund and the Portfolios.
(c) Special Subcustodians. Notwithstanding the provisions of Section 5.01
to the contrary and except as otherwise provided in any subcustodian
agreement to which the Custodian, the Fund and any Special Subcustodian are
parties, the Custodian shall not be liable to the Fund for any loss, damage
or expense suffered or incurred by the Fund or any Portfolio resulting from
the actions or omissions of a Special Subcustodian, unless such loss,
damage or expense is caused by, or results from, the negligence,
misfeasance or misconduct of the Custodian; provided, however, that in the
event of any such loss, damage or expense, the Custodian shall take all
reasonable steps to enforce such rights as it may have against any Special
Subcustodian to protect the interests of the Fund and the Portfolios.
(d) Securities Systems. Notwithstanding the provisions of Section 5.01 to
the contrary, the Custodian shall not be liable to the Fund for any loss,
damage or expense suffered or incurred by the Fund or any Portfolio
resulting from the use by the Custodian of a Securities System, unless such
loss, damage or expense is caused by, or results from, the negligence,
misfeasance or misconduct of the Custodian; provided, however, that in the
event of any such loss, damage or expense, the Custodian shall take all
reasonable steps to enforce such rights as it may have against the
Securities System to protect the interests of the Fund and the Portfolios.
(e) Reimbursement of Expenses. The Fund agrees to reimburse the Custodian
for all reasonable out-of-pocket expenses incurred by the Custodian in
connection with the fulfillment of its obligations under this Section 5.02;
provided, however, that such reimbursement shall not apply to expenses
occasioned by or resulting from the negligence, misfeasance or misconduct
of the Custodian.
Section 5.03. Indemnification.
(a) Indemnification Obligations. Subject to the limitations set forth in
this Agreement, the Fund agrees to indemnify and hold harmless the
Custodian and its nominees from all loss, damage and expense (including
reasonable attorneys' fees) suffered or incurred by the Custodian or its
nominee caused by or arising from actions taken by the Custodian in the
performance of its duties and obligations under this Agreement; provided,
however, that such indemnity shall not apply to loss, damage and expense
occasioned by or resulting from the negligence, misfeasance or misconduct
of the Custodian or its nominee. In addition, the Fund agrees to indemnify
any Person against any liability incurred by reason of taxes assessed to
such Person, or other loss, damage or expenses incurred by such Person,
resulting from the fact that securities and other property of the
Portfolios are registered in the name of such Person; provided, however,
that in no event shall such indemnification be applicable to income,
franchise or similar taxes which may be imposed or assessed against any
Person.
(b) Notice of Litigation, Right to Prosecute, Etc. The Fund shall not be
liable for indemnification under this Section 5.03 unless a Person shall
have promptly notified the Fund in writing of the commencement of any
litigation or proceeding brought against such Person in respect of which
indemnity may be sought under this Section 5.03. With respect to claims in
such litigation or proceedings for which indemnity by the Fund may be
sought and subject to applicable law and the ruling of any court of
competent jurisdiction, the Fund shall be entitled to participate in any
such litigation or proceeding and, after written notice from the Fund to
any Person, the Fund may assume the defense of such litigation or
proceeding with counsel of its choice at its own expense in respect of that
portion of the litigation for which the Fund may be subject to an
indemnification obligation; provided, however, a Person shall be entitled
to participate in (but not control) at its own cost and expense, the
defense of any such litigation or proceeding if the Fund has not
acknowledged in writing its obligation to indemnify the Person with respect
to such litigation or proceeding. If the Fund is not permitted to
participate or control such litigation or proceeding under applicable law
or by a ruling of a court of competent jurisdiction, such Person shall
reasonably prosecute such litigation or proceeding. A Person shall not
consent to the entry of any judgment or enter into any settlement in any
such litigation or proceeding without providing the Fund with adequate
notice of any such settlement or judgment, and without the Fund's prior
written consent. All Persons shall submit written evidence to the Fund
with respect to any cost or expense for which they are seeking
indemnification in such form and detail as the Fund may reasonably request.
Section 5.04. Investment Limitations. If the Custodian has otherwise
complied with the terms and conditions of this Agreement in performing its
duties generally, and more particularly in connection with the purchase,
sale or exchange of securities made by or for a Portfolio, the Custodian
shall not be liable to the Fund and the Fund agrees to indemnify the
Custodian and its nominees, for any loss, damage or expense suffered or
incurred by the Custodian and its nominees arising out of any violation of
any investment or other limitation to which the Fund is subject.
Section 5.05. Fund's Right to Proceed. Notwithstanding anything to the
contrary contained herein, the Fund shall have, at its election upon
reasonable notice to the Custodian, the right to enforce, to the extent
permitted by any applicable agreement and applicable law, the Custodian's
rights against any Subcustodian, Securities System, or other Person for
loss, damage or expense caused the Fund by such Subcustodian, Securities
System, or other Person, and shall be entitled to enforce the rights of the
Custodian with respect to any claim against such Subcustodian, Securities
System or other Person, which the Custodian may have as a consequence of
any such loss, damage or expense, if and to the extent that the Fund has
not been made whole for any such loss or damage. If the Custodian makes
the Fund whole for any such loss or damage, the Custodian shall retain the
ability to enforce its rights directly against such Subcustodian,
Securities System or other Person. Upon the Fund's election to enforce any
rights of the Custodian under this Section 5.05, the Fund shall reasonably
prosecute all actions and proceedings directly relating to the rights of
the Custodian in respect of the loss, damage or expense incurred by the
Fund; provided that, so long as the Fund has acknowledged in writing its
obligation to indemnify the Custodian under Section 5.03 hereof with
respect to such claim, the Fund shall retain the right to settle,
compromise and/or terminate any action or proceeding in respect of the
loss, damage or expense incurred by the Fund without the Custodian's
consent and provided further, that if the Fund has not made an
acknowledgement of its obligation to indemnify, the Fund shall not settle,
compromise or terminate any such action or proceeding without the written
consent of the Custodian, which consent shall not be unreasonably withheld
or delayed. The Custodian agrees to cooperate with the Fund and take all
actions reasonably requested by the Fund in connection with the Fund's
enforcement of any rights of the Custodian. The Fund agrees to reimburse
the Custodian for all reasonable out-of-pocket expenses incurred by the
Custodian in connection with the fulfillment of its obligations under this
Section 5.05; provided, however, that such reimbursement shall not apply to
expenses occasioned by or resulting from the negligence, misfeasance or
misconduct of the Custodian.
ARTICLE VI
COMPENSATION
On behalf of each Portfolio, the Fund shall compensate the Custodian in an
amount, and at such times, as may be agreed upon in writing, from time to
time, by the Custodian and the Fund.
ARTICLE VII
TERMINATION
Section 7.01. Termination of Agreement in Full. This Agreement shall
continue in full force and effect until the first to occur of: (a)
termination by the Custodian by an instrument in writing delivered or
mailed to the Fund, such termination to take effect not sooner than ninety
(90) days after the date of such delivery; (b) termination by the Fund by
an instrument in writing delivered or mailed to the Custodian, such
termination to take effect not sooner than thirty (30) days after the date
of such delivery; or (c) termination by the Fund by written notice
delivered to the Custodian, based upon the Fund's determination that there
is a reasonable basis to conclude that the Custodian is insolvent or that
the financial condition of the Custodian is deteriorating in any material
respect, in which case termination shall take effect upon the Custodian's
receipt of such notice or at such later time as the Fund shall designate.
In the event of termination pursuant to this Section 7.01, the Fund shall
make payment of all accrued fees and unreimbursed expenses within a
reasonable time following termination and delivery of a statement to the
Fund setting forth such fees and expenses. The Fund shall identify in any
notice of termination a successor custodian to which the cash, securities
and other assets of the Portfolios shall, upon termination of this
Agreement, be delivered. In the event that no written notice designating a
successor custodian shall have been delivered to the Custodian on or before
the date when termination of this Agreement shall become effective, the
Custodian may deliver to a bank or trust company doing business in Boston,
Massachusetts, of its own selection, having an aggregate capital, surplus,
and undivided profits, as shown by its last published report, of not less
than $25,000,000, all securities and other assets held by the Custodian and
all instruments held by the Custodian relative thereto and all other
property held by it under this Agreement. Thereafter, such bank or trust
company shall be the successor of the Custodian under this Agreement. In
the event that securities and other assets remain in the possession of the
Custodian after the date of termination hereof owing to failure of the Fund
to appoint a successor custodian, the Custodian shall be entitled to
compensation for its services in accordance with the fee schedule most
recently in effect, for such period as the Custodian retains possession of
such securities and other assets, and the provisions of this Agreement
relating to the duties and obligations of the Custodian and the Fund shall
remain in full force and effect. In the event of the appointment of a
successor custodian, it is agreed that the cash, securities and other
property owned by the Fund and held by the Custodian, any Subcustodian or
nominee shall be delivered to the successor custodian; and the Custodian
agrees to cooperate with the Fund in the execution of documents and
performance of other actions necessary or desirable in order to substitute
the successor custodian for the Custodian under this Agreement.
Section 7.02. Termination as to One or More Portfolios. This Agreement
may be terminated as to one or more Portfolios (but less than all of the
Portfolios) by delivery of an amended Appendix "A" deleting such Portfolios
pursuant to Section 9.05(b) hereof, in which case termination as to such
deleted Portfolios shall take effect thirty (30) days after the date of
such delivery. The execution and delivery of an amended Appendix "A" which
deletes one or more Portfolios shall constitute a termination of this
Agreement only with respect to such deleted Portfolio(s), shall be governed
by the preceding provisions of Section 7.01 as to the identification of a
successor custodian and the delivery of cash, securities and other assets
of the Portfolio(s) so deleted, and shall not affect the obligations of the
Custodian and the Fund hereunder with respect to the other Portfolios set
forth in Appendix "A," as amended from time to time.
ARTICLE VIII
DEFINED TERMS
The following terms are defined in the following sections:
Term Section
Account 2.22
ADRs 2.06
Authorized Person(s) 3.02
Banking Institution 2.12(a)
Business Day Appendix "C"
Bank Accounts 2.21
Distribution Account 2.16
Domestic Subcustodian 4.01
Foreign Subcustodian 4.02(a)
Institutional Client 2.03
Interim Subcustodian 4.02(b)
Overdraft 2.28
Overdraft Notice 2.28
Person 5.01(b)
Portfolio Preamble
Procedural Agreement 2.10
Proper Instructions 3.01(a)
SEC 2.22
Securities System 2.22
Shares 2.16
Special Instructions 3.01(b)
Special Subcustodian 4.03
Subcustodian Article IV
1940 Act Preamble
ARTICLE IX
MISCELLANEOUS
Section 9.01. Execution of Documents, Etc.
(a) Actions by the Fund. Upon request, the Fund shall execute and
deliver to the Custodian such proxies, powers of attorney or other
instruments as may be reasonable and necessary or desirable in connection
with the performance by the Custodian or any Subcustodian of their
respective obligations under this Agreement or any applicable subcustodian
agreement, provided that the exercise by the Custodian or any Subcustodian
of any such rights shall in all events be in compliance with the terms of
this Agreement.
(b) Actions by Custodian. Upon receipt of Proper Instructions, the
Custodian shall execute and deliver to the Fund or to such other parties as
the Fund may designate in such Proper Instructions, all such documents,
instruments or agreements as may be reasonable and necessary or desirable
in order to effectuate any of the transactions contemplated hereby.
Section 9.02. Representative Capacity; Nonrecourse Obligations. A COPY
OF THE DECLARATION OF TRUST OF THE FUND IS ON FILE WITH THE SECRETARY OF
THE STATE OF THE FUND'S FORMATION, AND NOTICE IS HEREBY GIVEN THAT THIS
AGREEMENT IS NOT EXECUTED ON BEHALF OF THE TRUSTEES OF THE FUND AS
INDIVIDUALS, AND THE OBLIGATIONS OF THIS AGREEMENT ARE NOT BINDING UPON ANY
OF THE TRUSTEES, OFFICERS, SHAREHOLDERS OR PARTNERS OF THE FUND
INDIVIDUALLY, BUT ARE BINDING ONLY UPON THE ASSETS AND PROPERTY OF THE
PORTFOLIOS. THE CUSTODIAN AGREES THAT NO SHAREHOLDER, TRUSTEE, OFFICER OR
PARTNER OF THE FUND MAY BE HELD PERSONALLY LIABLE OR RESPONSIBLE FOR ANY
OBLIGATIONS OF THE FUND ARISING OUT OF THIS AGREEMENT.
Section 9.03. Several Obligations of the Portfolios. WITH RESPECT TO ANY
OBLIGATIONS OF THE FUND ON BEHALF OF THE PORTFOLIOS ARISING OUT OF THIS
AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE OBLIGATIONS ARISING UNDER
SECTIONS 2.28, 5.03, 5.05 and ARTICLE VI HEREOF, THE CUSTODIAN SHALL LOOK
FOR PAYMENT OR SATISFACTION OF ANY OBLIGATION SOLELY TO THE ASSETS AND
PROPERTY OF THE PORTFOLIO TO WHICH SUCH OBLIGATION RELATES AS THOUGH THE
FUND HAD SEPARATELY CONTRACTED WITH THE CUSTODIAN BY SEPARATE WRITTEN
INSTRUMENT WITH RESPECT TO EACH PORTFOLIO.
Section 9.04. Representations and Warranties.
(a) Representations and Warranties of the Fund. The Fund hereby
represents and warrants that each of the following shall be true, correct
and complete at all times during the term of this Agreement: (i) the Fund
is duly organized under the laws of its jurisdiction of organization and is
registered as an open-end management investment company under the 1940 Act;
and (ii) the execution, delivery and performance by the Fund of this
Agreement are (w) within its power, (x) have been duly authorized by all
necessary action, and (y) will not (A) contribute to or result in a breach
of or default under or conflict with any existing law, order, regulation or
ruling of any governmental or regulatory agency or authority, or (B)
violate any provision of the Fund's corporate charter, Declaration of Trust
or other organizational document, or bylaws, or any amendment thereof or
any provision of its most recent Prospectus or Statement of Additional
Information.
(b) Representations and Warranties of the Custodian. The Custodian
hereby represents and warrants that each of the following shall be true,
correct and complete at all times during the term of this Agreement: (i)
the Custodian is duly organized under the laws of its jurisdiction of
organization and qualifies to act as a custodian to open-end management
investment companies under the provisions of the 1940 Act; and (ii) the
execution, delivery and performance by the Custodian of this Agreement are
(w) within its power, (x) have been duly authorized by all necessary
action, and (y) will not (A) contribute to or result in a breach of or
default under or conflict with any existing law, order, regulation or
ruling of any governmental or regulatory agency or authority, or (B)
violate any provision of the Custodian's corporate charter, or other
organizational document, or bylaws, or any amendment thereof.
Section 9.05. Entire Agreement. This Agreement constitutes the entire
understanding and agreement of the parties hereto with respect to the
subject matter hereof and accordingly, supersedes as of the effective date
of this Agreement any custodian agreement heretofore in effect between the
Fund and the Custodian.
Section 9.06. Waivers and Amendments. No provision of this Agreement may
be waived, amended or terminated except by a statement in writing signed by
the party against which enforcement of such waiver, amendment or
termination is sought; provided, however: (a) Appendix "A" listing the
Portfolios for which the Custodian serves as custodian may be amended from
time to time to add one or more Portfolios, by the Fund's execution and
delivery to the Custodian of an amended Appendix "A", and the execution of
such amended Appendix by the Custodian, in which case such amendment shall
take effect immediately upon execution by the Custodian; (b) Appendix "A"
may be amended from time to time to delete one or more Portfolios (but less
than all of the Portfolios), by the Fund's execution and delivery to the
Custodian of an amended Appendix A", in which case such amendment shall
take effect thirty (30) days after such delivery, unless otherwise agreed
by the Custodian and the Fund in writing; (c) Appendix "B" listing Foreign
Subcustodians and Special Subcustodians approved by the Fund may be amended
from time to time to add or delete one or more Foreign Subcustodians or
Special Subcustodians by the Fund's execution and delivery to the Custodian
of an amended Appendix "B", in which case such amendment shall take effect
immediately upon execution by the Custodian; and (d) Appendix "C" setting
forth the procedures relating to the Custodian's security interest may be
amended only by an instrument in writing executed by the Fund and the
Custodian.
Section 9.07. Interpretation. In connection with the operation of this
Agreement, the Custodian and the Fund may agree in writing from time to
time on such provisions interpretative of or in addition to the provisions
of this Agreement as may in their joint opinion be consistent with the
general tenor of this Agreement. No interpretative or additional
provisions made as provided in the preceding sentence shall be deemed to be
an amendment of this Agreement.
Section 9.08. Captions. Headings contained in this Agreement, which are
included as convenient references only, shall have no bearing upon the
interpretation of the terms of the Agreement or the obligations of the
parties hereto.
Section 9.09. Governing Law. Insofar as any question or dispute may
arise in connection with the custodianship of foreign securities pursuant
to an agreement with a Foreign Subcustodian that is governed by the laws of
the State of New York, the provisions of this Agreement shall be construed
in accordance with and governed by the laws of the State of New York,
provided that in all other instances this Agreement shall be construed in
accordance with and governed by the laws of the Commonwealth of
Massachusetts, in each case without giving effect to principles of
conflicts of law.
Section 9.10. Notices. Except in the case of Proper Instructions or
Special Instructions, notices and other writings contemplated by this
Agreement shall be delivered by hand or by facsimile transmission (provided
that in the case of delivery by facsimile transmission, notice shall also
be mailed postage prepaid to the parties at the following addresses:
(a) If to the Fund:
c/o Fidelity Management & Research Company
82 Devonshire Street
Boston, Massachusetts 02109
Attn: Gary L. French
Telephone: (617) 570-6556
Telefax: (617) 742-1231
(b) If to the Custodian:
c/o Morgan Guaranty Trust Company of New York
60 Wall Street
New York, NY 10260
Attn: Stella Milano
Telephone: (212) 648-3194
or to such other address as either party may have designated in writing to
the other party hereto.
Section 9.11. Assignment. This Agreement shall be binding on and shall
inure to the benefit of the Fund and the Custodian and their respective
successors and assigns, provided that, subject to the provisions of Section
7.01 hereof, neither party hereto may assign this Agreement or any of its
rights or obligations hereunder without the prior written consent of the
other party.
Section 9.12. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original. This Agreement
shall become effective when one or more counterparts have been signed and
delivered by each of the parties.
Section 9.13. Confidentiality; Survival of Obligations. The parties
hereto agree that each shall treat confidentially the terms and conditions
of this Agreement and all information provided by each party to the other
regarding its business and operations. All confidential information
provided by a party hereto shall be used by any other party hereto solely
for the purpose of rendering services pursuant to this Agreement and,
except as may be required in carrying out this Agreement, shall not be
disclosed to any third party without the prior consent of such providing
party. The foregoing shall not be applicable to any information that is
publicly available when provided or thereafter becomes publicly available
other than through a breach of this Agreement, or that is required to be
disclosed by any bank examiner of the Custodian or any Subcustodian, any
auditor of the parties hereto, by judicial or administrative process or
otherwise by applicable law or regulation. The provisions of this Section
9.13 and Sections 9.01, 9.02, 9.03, 9.09, Section 2.28, Section 3.04,
Section 7.01, Article V and Article VI hereof and any other rights or
obligations incurred or accrued by any party hereto prior to termination of
this Agreement shall survive any termination of this Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed in its name and behalf on the day and year first above written.
DAILY MONEY FUND MORGAN GUARANTY TRUST
COMPANY OF NEW YORK
By: /s/ Gary French By: /s/ Stella Milano
Name: Gary French Name: Stella Milano
Title: Treasurer Title: Vice President
APPENDIX "C" TO THE
CUSTODIAN AGREEMENT BETWEEN
DAILY MONEY FUND AND
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
Dated as of September 30, 1993
PROCEDURES RELATING TO CUSTODIAN'S SECURITY INTEREST
As security for any Overdrafts (as defined in the Custodian Agreement) of
any Portfolio, the Fund, on behalf of such Portfolio, shall pledge, assign
and grant to the Custodian a security interest in Collateral (as
hereinafter defined), under the terms, circumstances and conditions set
forth in this Appendix "C".
Section 1. Defined Terms. As used in this Appendix "C" the following
terms shall have the following respective meanings:
(a) "Business Day" shall mean any day that is not a Saturday, a Sunday or
a day on which the Custodian is closed for business.
(b) "Collateral" shall mean, with respect to any Portfolio, the securities
having a fair market value (as determined in accordance with the procedures
set forth in the prospectus for the Portfolio) equal to the aggregate of
all Overdraft Obligations of such Portfolio: (i) identified in any Pledge
Certificate executed on behalf of such Portfolio; or (ii) designated by the
Custodian for such Portfolio pursuant to Section 3 of this Appendix C.
Such securities shall consist of marketable securities held by the
Custodian on behalf of such Portfolio or, if no such marketable securities
are held by the Custodian on behalf of such Portfolio, such other
securities designated by the Fund in the applicable Pledge Certificate or
by the Custodian pursuant to Section 3 of this Appendix C.
(c) "Overdraft Obligations" shall mean, with respect to any Portfolio, the
amount of any outstanding Overdraft(s) provided by the Custodian to such
Portfolio together with all accrued interest thereon.
(d) "Pledge Certificate" shall mean a Pledge Certificate in the form
attached to this Appendix "C" as Schedule 1 executed by a duly authorized
officer of the Fund and delivered by the Fund to the Custodian by facsimile
transmission or in such other manner as the Fund and the Custodian may
agree in writing.
(e) "Release Certificate" shall mean a Release Certificate in the form
attached to this Appendix "C" as Schedule 2 executed by a duly authorized
officer of the Custodian and delivered by the Custodian to the Fund by
facsimile transmission or in such other manner as the Fund and the
Custodian may agree in writing.
(f) "Written Notice" shall mean a written notice executed by a duly
authorized officer of the party delivering the notice and delivered by
facsimile transmission or in such other manner as the Fund and the
Custodian shall agree in writing.
Section 2. Pledge of Collateral. To the extent that any Overdraft
Obligations of any Portfolio are not satisfied within one (1) Business Day
after receipt by the Fund of a Written Notice requesting security for such
Overdraft Obligation and stating the amount of such Overdraft Obligation,
the Fund, on behalf of such Portfolio, shall pledge, assign and grant to
the Custodian a first priority security interest, by delivering to the
Custodian, a Pledge Certificate executed by the Fund on behalf of such
Portfolio describing the applicable Collateral. Such Written Notice may,
in the discretion of the Custodian, be included within or accompany the
Overdraft Notice relating to the applicable Overdraft Obligations.
Section 3. Failure to Pledge Collateral. In the event that the Fund
shall fail: (a) to pay, on behalf of the applicable Portfolio, the
Overdraft Obligation described in such Written Notice; (b) to deliver to
the Custodian a Pledge Certificate pursuant to Section 2; or (c) to
identify substitute securities pursuant to Section 6 upon the sale or
maturity of any securities identified as Collateral, the Custodian may, by
Written Notice to the Fund specify Collateral which shall secure the
applicable Overdraft Obligation. The Fund, on behalf of any applicable
Portfolio, hereby pledges, assigns and grants to the Custodian a first
priority security interest in any and all Collateral specified in such
Written Notice; provided that such pledge, assignment and grant of security
shall be deemed to be effective only upon receipt by the Fund of such
Written Notice.
Section 4. Delivery of Additional Collateral. If at any time the
Custodian shall notify the Fund by Written Notice that the fair market
value of the Collateral securing any Overdraft Obligation is less than the
amount of such Overdraft Obligation, the Fund, on behalf of the applicable
Portfolio, shall deliver to the Custodian, within one (1) Business Day
following the Fund's receipt of such Written Notice, an additional Pledge
Certificate describing additional Collateral. If the Fund shall fail to
deliver such additional Pledge Certificate, the Custodian may specify
Collateral which shall secure the unsecured amount of the applicable
Overdraft Obligation in accordance with Section 3 of this Appendix C.
Section 5. Release of Collateral. Upon payment by the Fund of any
Overdraft Obligation secured by the pledge of Collateral, the Custodian
shall promptly deliver to the Fund a Release Certificate pursuant to which
the Custodian shall release Collateral from the lien under the applicable
Pledge Certificate or Written Notice pursuant to Section 3 having a fair
market value equal to the amount paid by the Fund on account of such
Overdraft Obligation. In addition, if at any time the Fund shall notify
the Custodian by Written Notice that the Fund desires that specified
Collateral be released and: (a) that the fair market value of the
Collateral securing any Overdraft Obligation shall exceed the amount of
such Overdraft Obligation; or (b) that the Fund has delivered a Pledge
Certificate substituting Collateral for such Overdraft Obligation, the
Custodian shall deliver to the Fund, within one (1) Business Day following
the Custodian's receipt of such Written Notice, a Release Certificate
relating to the Collateral specified in such Written Notice.
Section 6. Substitution of Collateral. The Fund may substitute
securities for any securities identified as Collateral by delivery to the
Custodian of a Pledge Certificate executed by the Fund on behalf of the
applicable Portfolio, indicating the securities pledged as Collateral.
Section 7. Security for Individual Portfolios' Overdraft Obligations.
The pledge of Collateral by the Fund on behalf of any individual Portfolio
shall secure only the Overdraft Obligations of such Portfolio. In no event
shall the pledge of Collateral by one Portfolio be deemed or considered to
be security for the Overdraft Obligations of any other Portfolio.
Section 8. Custodian's Remedies. Upon (a) the Fund's failure to pay any
Overdraft Obligation of a Portfolio within thirty (30) days after receipt
by the Fund of a Written Notice demanding security therefore, and (b) one
(1) Business Day's prior Written Notice to the Fund, the Custodian may
elect to enforce its security interest in the Collateral securing such
Overdraft Obligation, by taking title to (at the then prevailing fair
market value), or selling in a commercially reasonable manner, so much of
the Collateral as shall be required to pay such Overdraft Obligation in
full. Notwithstanding the provisions of any applicable law, including,
without limitation, the Uniform Commercial Code, the remedy set forth in
the preceding sentence shall be the only right or remedy to which the
Custodian is entitled with respect to the pledge and security interest
granted pursuant to any Pledge Certificate or Section 3, without limiting
the foregoing, the Custodian hereby waives and relinquishes all contractual
and common law rights of set off to which it may now or hereafter be or
become entitled with respect to any obligations of the Fund to the
Custodian arising under this Appendix C to the Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Appendix to be
executed in its name and behalf on the day and year first above written.
DAILY MONEY FUND MORGAN GUARANTY TRUST
COMPANY OF NEW YORK
By: /s/ Gary French By: /s/ Stella Milano
Name: Gary French Name: Stella Milano
Title: Treasurer Title: Vice President
SCHEDULE 1
TO
APPENDIX "C"
PLEDGE CERTIFICATE
This Pledge Certificate is delivered pursuant to the Custodian Agreement
dated as of September 30, 1993 (the "Agreement"), between Daily Money Fund
(the "Fund") and Morgan Guaranty Trust Company of New York (the
"Custodian"). Capitalized terms used herein without definition shall have
the respective meanings ascribed to them in the Agreement. Pursuant to
[Section 2 or Section 4] of Appendix "C" attached to the Agreement, the
Fund, on behalf of [ ] (the "Portfolio"), hereby pledges, assigns
and grants to the Custodian a first priority security interest in the
securities listed on Exhibit "A" attached to this Pledge Certificate
(collectively, the "Pledged Securities"). Upon delivery of this Pledge
Certificate, the Pledged Securities shall constitute Collateral, and shall
secure all Overdraft Obligations of the Portfolio described in that certain
Written Notice dated , 19 , delivered by the Custodian to the
Fund. The pledge, assignment and grant of security in the Pledged
Securities hereunder shall be subject in all respect to the terms and
conditions of the Agreement, including, without limitation, Sections 7 and
8 of Appendix "C" attached thereto.
IN WITNESS WHEREOF, the Fund has caused this Pledge Certificate to be
executed in its name, on behalf of the Portfolio this day of 19 .
DAILY MONEY FUND
By: /s/ Gary French
Name: Gary French
Title: Treasurer
EXHIBIT "A"
TO
PLEDGE CERTIFICATE
Type of Certificate/CUSIP Number of
Issuer Security Numbers Shares
SCHEDULE 2
TO
APPENDIX "C"
RELEASE CERTIFICATE
This Release Certificate is delivered pursuant to the Custodian Agreement
dated as of September 30, 1993 (the "Agreement"), between Daily Money Fund
(the "Fund") and Morgan Guaranty Trust Company of New York (the
"Custodian"). Capitalized terms used herein without definition shall have
the respective meanings ascribed to them in the Agreement. Pursuant to
Section 5 of Appendix "C" attached to the Agreement, the Custodian hereby
releases the securities listed on Exhibit "A" attached to this Release
Certificate from the lien under the [Pledge Certificate dated , 19
or the Written Notice delivered pursuant to Section 3 of Appendix "C"
dated , 19 ].
IN WITNESS WHEREOF, the Custodian has caused this Release Certificate to
be executed in its name and on its behalf this day of 19 .
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK
By: /s/ Stella Milano
Name: Stella Milano
Title: Vice President
EXHIBIT "A"
TO
RELEASE CERTIFICATE
Type of Certificate/CUSIP Number of
Issuer Security Numbers Shares
[{filename |LG933150.023}] -{PAGE|5}-
CUSTODIAN AGREEMENT
Dated as of: September 30, 1993
Between
DAILY MONEY FUND
and
UNITED MISSOURI BANK, N.A.
TABLE OF CONTENTS
ARTICLE
Page
I. APPOINTMENT OF CUSTODIAN 1
II. POWERS AND DUTIES OF CUSTODIAN 1
2.01 Safekeeping 1
2.02 Manner of Holding Securities 2
2.03 Security Purchases 2
2.04 Exchanges of Securities 3
2.05 Sales of Securities 3
2.06 Depositary Receipts 3
2.07 Exercise of Rights; Tender Offers 4
2.08 Stock Dividends, Rights, Etc. 4
2.09 Options 4
2.10 Futures Contracts 4
2.11 Borrowing 5
2.12 Interest Bearing Deposits 5
2.13 Foreign Exchange Transactions 6
2.14 Securities Loans 6
2.15 Collections 7
2.16 Dividends, Distributions and Redemptions 7
2.17 Proceeds from Shares Sold 7
2.18 Proxies, Notices, Etc. 7
2.19 Bills and Other Disbursements 8
2.20 Nondiscretionary Functions 8
2.21 Bank Accounts 8
2.22 Deposit of Fund Assets in Securities Systems 9
2.23 Other Transfers 10
2.24 Establishment of Segregated Account 10
2.25 Custodian's Books and Records . 10
2.26 Opinion of Fund's Independent Certified Public Accountants 11
2.27 Reports of Independent Certified Public Accountants 11
2.28 Overdraft Facility 11
III. PROPER INSTRUCTIONS, SPECIAL INSTRUCTIONS
AND RELATED MATTERS 12
3.01 Proper Instructions and Special Instructions 12
3.02 Authorized Persons 13
3.03 Persons Having Access to Assets of the Portfolios 13
3.04 Actions of the Custodian Based on Proper Instructions and
Special Instructions 13
IV. SUBCUSTODIANS 13
4.01 Domestic Subcustodians 14
4.02 Foreign Subcustodians and Interim Subcustodians 14
4.03 Special Subcustodians 15
4.04 Termination of a Subcustodian 15
4.05 Certification Regarding Foreign Subcustodians 16
V. STANDARD OF CARE; INDEMNIFICATION 16
5.01 Standard of Care 16
5.02 Liability of Custodian for Actions of Other Persons 17
5.03 Indemnification 18
5.04 Investment Limitations 19
5.05 Fund's Right to Proceed 19
VI. COMPENSATION 20
VII. TERMINATION 20
7.01 Termination of Agreement in Full 20
7.02 Termination as to One or More Portfolios 21
VIII. DEFINED TERMS 21
IX. MISCELLANEOUS 22
9.01 Execution of Documents, Etc 22
9.02 Representative Capacity; Nonrecourse Obligations 22
9.03 Several Obligations of the Portfolios 23
9.04 Representations and Warranties 23
9.05 Entire Agreement 23
9.06 Waivers and Amendments 24
9.07 Interpretation 24
9.08 Captions 24
9.09 Governing Law 24
9.10 Notices 24
9.11 Assignment 25
9.12 Counterparts 25
9.13 Confidentiality; Survival of Obligations 25
APPENDICES
Appendix "A" - List of Portfolios
Appendix "B" - List of Foreign Subcustodians
and Special Subcustodians
Appendix "C" - Procedures Relating to
Custodian's Security Interest
CUSTODIAN AGREEMENT
AGREEMENT made as of the 30th day of September, 1993 between Daily Money
Fund (the "Fund") and United Missouri Bank, N.A. (the "Custodian").
W I T N E S S E T H
WHEREAS, the Fund may, from time to time organize one or more series of
shares, in addition to the series set forth in Appendix "A" attached
hereto, each of which shall represent an interest in a separate portfolio
of cash, securities and other assets (all such existing and additional
series now or hereafter listed on Appendix "A" being hereinafter referred
to individually, as a "Portfolio," and collectively, as the "Portfolios");
and
WHEREAS, the Fund desires to appoint the Custodian as custodian on behalf
of the Portfolios in accordance with the provisions of the Investment
Company Act of 1940 (the "1940 Act") and the rules and regulations
thereunder, under the terms and conditions set forth in this Agreement, and
the Custodian has agreed so to act as custodian.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
APPOINTMENT OF CUSTODIAN
On behalf of the Portfolios, the Fund hereby employs and appoints the
Custodian as a custodian, subject to the terms and provisions of this
Agreement. The Fund shall deliver to the Custodian, or shall cause to be
delivered to the Custodian, cash, securities and other assets owned by the
Portfolios from time to time during the term of this Agreement and shall
specify the Portfolio to which such cash, securities and other assets are
to be specifically allocated.
ARTICLE II
POWERS AND DUTIES OF CUSTODIAN
As custodian, the Custodian shall have and perform the powers and duties
set forth in this Article II. Pursuant to and in accordance with Article
IV hereof, the Custodian may appoint one or more Subcustodians (as
hereinafter defined) to exercise the powers and perform the duties of the
Custodian set forth in this Article II and references to the Custodian in
this Article II shall include any Subcustodian so appointed.
Section 2.01. Safekeeping. The Custodian shall keep safely all cash,
securities and other assets of the Portfolios delivered to the Custodian
and, on behalf of the Portfolios, the Custodian shall, from time to time,
accept delivery of cash, securities and other assets for safekeeping.
Section 2.02. Manner of Holding Securities.
(a) The Custodian shall at all times hold securities of the Portfolios
either: (i) by physical possession of the share certificates or other
instruments representing such securities in registered or bearer form; or
(ii) in book-entry form by a Securities System (as hereinafter defined) in
accordance with the provisions of Section 2.22 below.
(b) The Custodian shall at all times hold registered securities of each
Portfolio in the name of the Custodian, the Portfolio or a nominee of
either of them, unless specifically directed by Proper Instructions to hold
such registered securities in so-called street name; provided that, in any
event, all such securities and other assets shall be held in an account of
the Custodian containing only assets of a Portfolio, or only assets held by
Custodian as a fiduciary or custodian for customers, and provided further,
that the records of the Custodian shall indicate at all times the Portfolio
or other customer for which such securities and other assets are held in
such account and the respective interests therein.
Section 2.03. Security Purchases. Upon receipt of Proper Instructions
(as hereinafter defined), the Custodian shall pay for and receive
securities purchased for the account of a Portfolio, provided that payment
shall be made by Custodian only upon receipt of the securities: (a) by the
Custodian; (b) by a clearing corporation of a national securities exchange
of which the Custodian is a member; or (c) by a Securities System.
Notwithstanding the foregoing, upon receipt of Proper Instructions: (i) in
the case of a repurchase agreement, the Custodian may release funds to a
Securities System prior to the receipt of advice from the Securities System
that the securities underlying such repurchase agreement have been
transferred by book-entry into the Account (as hereinafter defined)
maintained with such Securities System by the Custodian, provided that the
Custodian's instructions to the Securities system require that the
Securities System may make payment of such funds to the other party to the
repurchase agreement only upon transfer by book-entry of the securities
underlying the repurchase agreement into the Account; (ii) in the case of
time deposits, call account deposits, currency deposits, and other
deposits, foreign exchange transactions, futures contracts or options,
pursuant to Sections 2.09, 2.10, 2.12 and 2.13 hereof, the Custodian may
make payment therefor before receipt of an advice or confirmation
evidencing said deposit or entry into such transaction; (iii) in the case
of the purchase of securities, the settlement of which occurs outside of
the United States of America, the Custodian may make payment therefor and
receive delivery of such securities in accordance with local custom and
practice generally accepted by Institutional Clients (as hereinafter
defined) in the country in which the settlement occurs, but in all events
subject to the standard of care set forth in Article V hereof; and (iv) in
the case of the purchase of securities in which, in accordance with
standard industry custom and practice generally accepted by Institutional
Clients with respect to such securities, the receipt of such securities and
the payment therefor take place in different countries, the Custodian may
receive delivery of such securities and make payment therefor in accordance
with standard industry custom and practice for such securities generally
accepted by Institutional Clients, but in all events subject to the
standard of care set forth in Article V hereof. For purposes of this
Agreement, an "Institutional Client" shall mean a major commercial bank,
corporation, insurance company, or substantially similar institution,
which, as a substantial part of its business operations, purchases or sells
securities and makes use of custodial services.
Section 2.04. Exchanges of Securities. Upon receipt of Proper
Instructions, the Custodian shall exchange securities held by it for the
account of a Portfolio for other securities in connection with any
reorganization, recapitalization, split-up of shares, change of par value,
conversion or other event relating to the securities or the issuer of such
securities, and shall deposit any such securities in accordance with the
terms of any reorganization or protective plan. The Custodian shall,
without receiving Proper Instructions: surrender securities in temporary
form for definitive securities; surrender securities for transfer into the
name of the Custodian, a Portfolio or a nominee of either of them, as
permitted by Section 2.02(b); and surrender securities for a different
number of certificates or instruments representing the same number of
shares or same principal amount of indebtedness, provided that the
securities to be issued will be delivered to the Custodian or a nominee of
the Custodian.
Section 2.05. Sales of Securities. Upon receipt of Proper Instructions,
the Custodian shall make delivery of securities which have been sold for
the account of a Portfolio, but only against payment therefor in the form
of: (a) cash, certified check, bank cashier's check, bank credit, or bank
wire transfer; (b) credit to the account of the custodian with a clearing
corporation of a national securities exchange of which the Custodian is a
member; or (c) credit to the Account of the Custodian with a Securities
System, in accordance with the provisions of Section 2.22 hereof.
Notwithstanding the foregoing: (i) in the case of the sale of securities,
the settlement of which occurs outside of the United States of America,
such securities shall be delivered and paid for in accordance with local
custom and practice generally accepted by Institutional Clients in the
country in which the settlement occurs, but in all events subject to the
standard of care set forth in Article V hereof; (ii) in the case of the
sale of securities in which, in accordance with standard industry custom
and practice generally accepted by Institutional Clients with respect to
such securities, the delivery of such securities and receipt of payment
therefor take place in different countries, the Custodian may deliver such
securities and receive payment therefor in accordance with standard
industry custom and practice for such securities generally accepted by
Institutional Clients, but in all events subject to the standard of care
set forth in Article V hereof; and (iii) in the case of securities held in
physical form, such securities shall be delivered and paid for in
accordance with "street delivery custom" to a broker or its clearing agent,
against delivery to the Custodian of a receipt for such securities,
provided that the Custodian shall have taken reasonable steps to ensure
prompt collection of the payment for, or the return of, such securities by
the broker or its clearing agent, and provided further that the Custodian
shall not be responsible for the selection of or the failure or inability
to perform of such broker or its clearing agent.
Section 2.06. Depositary Receipts. Upon receipt of Proper Instructions,
the Custodian shall surrender securities to the depositary used for such
securities by an issuer of American Depositary Receipts or International
Depositary Receipts (hereinafter referred to, collectively, as "ADRs"),
against a written receipt therefor adequately describing such securities
and written evidence satisfactory to the Custodian that the depositary has
acknowledged receipt of instructions to issue ADRs with respect to such
securities in the name of the Custodian or a nominee of the Custodian, for
delivery to the Custodian at such place as the Custodian may from time to
time designate. Upon receipt of Proper Instructions, the Custodian shall
surrender ADRs to the issuer thereof, against a written receipt therefor
adequately describing the ADRs surrendered and written evidence
satisfactory to the Custodian that the issuer of the ADRs has acknowledged
receipt of instructions to cause its depository to deliver the securities
underlying such ADRs to the Custodian.
Section 2.07. Exercise of Rights; Tender Offers. Upon receipt of Proper
Instructions, the Custodian shall: (a) deliver warrants, puts, calls,
rights or similar securities to the issuer or trustee thereof, or to the
agent of such issuer or trustee, for the purpose of exercise or sale,
provided that the new securities, cash or other assets, if any, acquired as
a result of such actions are to be delivered to the Custodian; and (b)
deposit securities upon invitations for tenders thereof, provided that the
consideration for such securities is to be paid or delivered to the
Custodian, or the tendered securities are to be returned to the Custodian.
Notwithstanding any provision of this Agreement to the contrary, the
Custodian shall take all necessary action, unless otherwise directed to the
contrary in Proper Instructions, to comply with the terms of all mandatory
or compulsory exchanges, calls, tenders, redemptions, or similar rights of
security ownership, and shall promptly notify the Fund of such action in
writing by facsimile transmission or in such other manner as the Fund and
Custodian may agree in writing.
Section 2.08. Stock Dividends, Rights, Etc. The Custodian shall receive
and collect all stock dividends, rights and other items of like nature and,
upon receipt of Proper Instructions, take action with respect to the same
as directed in such Proper Instructions.
Section 2.09. Options. Upon receipt of Proper Instructions and in
accordance with the provisions of any agreement between the Custodian, any
registered broker-dealer and, if necessary, the Fund relating to compliance
with the rules of the Options Clearing Corporation or of any registered
national securities exchange or similar organization(s), the Custodian
shall: (a) receive and retain confirmations or other documents, if any,
evidencing the purchase or writing of an option on a security or securities
index by a Portfolio; (b) deposit and maintain in a segregated account,
securities (either physically or by book-entry in a Securities System),
cash or other assets; and (c) pay, release and/or transfer such securities,
cash or other assets in accordance with notices or other communications
evidencing the expiration, termination or exercise of such options
furnished by the Options Clearing Corporation, the securities or options
exchange on which such options are traded, or such other organization as
may be responsible for handling such option transactions. The Fund and the
broker-dealer shall be responsible for the sufficiency of assets held in
any segregated account established in compliance with applicable margin
maintenance requirements and the performance of other terms of any option
contract.
Section 2.10. Futures Contracts. Upon receipt of Proper Instructions, or
pursuant to the provisions of any futures margin procedural agreement among
the Fund, on behalf of any Portfolio, the Custodian and any futures
commission merchant (a "Procedural Agreement"), the Custodian shall: (a)
receive and retain confirmations, if any, evidencing the purchase or sale
of a futures contract or an option on a futures contract by a Portfolio;
(b) deposit and maintain in a segregated account, cash, securities and
other assets designated as initial, maintenance or variation "margin"
deposits intended to secure the Portfolio's performance of its obligations
under any futures contracts purchased or sold or any options on futures
contracts written by the Portfolio, in accordance with the provisions of
any Procedural Agreement designed to comply with the rules of the Commodity
Futures Trading Commission and/or any commodity exchange or contract market
(such as the Chicago Board of Trade), or any similar organization(s),
regarding such margin deposits; and (c) release assets from and/or transfer
assets into such margin accounts only in accordance with any such
Procedural Agreements. The Fund and such futures commission merchant shall
be responsible for the sufficiency of assets held in the segregated account
in compliance with applicable margin maintenance requirements and the
performance of any futures contract or option on a futures contract in
accordance with its terms.
Section 2.11. Borrowing. Upon receipt of Proper Instructions, the
Custodian shall deliver securities of a Portfolio to lenders or their
agents, or otherwise establish a segregated account as agreed to by the
Fund and the Custodian, as collateral for borrowings effected by the Fund
on behalf of a Portfolio, provided that such borrowed money is payable by
the lender (a) to or upon the Custodian's order, as Custodian for such
Portfolio, and (b) concurrently with delivery of such securities.
Section 2.12. Interest Bearing Deposits.
Upon receipt of Proper Instructions directing the Custodian to purchase
interest bearing fixed term and call deposits (hereinafter referred to
collectively, as "Interest Bearing Deposits") for the account of a
Portfolio, the Custodian shall purchase such Interest Bearing Deposits in
the name of a Portfolio with such banks or trust companies (including the
Custodian, any Subcustodian or any subsidiary or affiliate of the
Custodian) (hereinafter referred to as "Banking Institutions") and in such
amounts as the Fund may direct pursuant to Proper Instructions. Such
Interest Bearing Deposits may be denominated in U.S. Dollars or other
currencies, as the Fund may determine and direct pursuant to Proper
Instructions. The Custodian shall include in its records with respect to
the assets of each Portfolio appropriate notation as to the amount and
currency of each such Interest Bearing Bank Deposit, the accepting Banking
Institution and all other appropriate details, and shall retain such forms
of advice or receipt evidencing such account, if any, as may be forwarded
to the Custodian by the Banking Institution. The responsibilities of the
Custodian to the Fund for Interest Bearing Deposits accepted on the
Custodian's books in the United States shall be that of a U.S. bank for a
similar deposit. With respect to Interest Bearing Deposits other than
those accepted on the Custodian's books, (a) the Custodian shall be
responsible for the collection of income as set forth in Section 2.15 and
the transmission of cash and instructions to and from such accounts; and
(b) the Custodian shall have no duty with respect to the selection of the
Banking Institution or, so long as the Custodian acts in accordance with
Proper Instructions, for the failure of such Banking Institution to pay
upon demand. Upon receipt of Proper Instructions, the Custodian shall take
such reasonable actions as the Fund deems necessary or appropriate to cause
each such Interest Bearing Deposit Account to be insured to the maximum
extent possible by all applicable deposit insurers including, without
limitation, the Federal Deposit Insurance Corporation.
Section 2.13. Foreign Exchange Transactions
(a) Foreign Exchange Transactions Other than as Principal. Upon receipt
of Proper Instructions, the Custodian shall settle foreign exchange
contracts or options to purchase and sell foreign currencies for spot and
future delivery on behalf of and for the account of a Portfolio with such
currency brokers or Banking Institutions as the Fund may determine and
direct pursuant to Proper Instructions. The Custodian shall be responsible
for the transmission of cash and instructions to and from the currency
broker or Banking Institution with which the contract or option is made,
the safekeeping of all certificates and other documents and agreements
evidencing or relating to such foreign exchange transactions and the
maintenance of proper records as set forth in Section 2.25. The Custodian
shall have no duty with respect to the selection of the currency brokers or
Banking Institutions with which the Fund deals or, so long as the Custodian
acts in accordance with Proper Instructions, for the failure of such
brokers or Banking Institutions to comply with the terms of any contract or
option.
(b) Foreign Exchange Contracts as Principal. The Custodian shall not be
obligated to enter into foreign exchange transactions as principal.
However, if the Custodian has made available to the Fund its services as a
principal in foreign exchange transactions, upon receipt of Proper
Instructions, the Custodian shall enter into foreign exchange contracts or
options to purchase and sell foreign currencies for spot and future
delivery on behalf of and for the account of a Portfolio with the Custodian
as principal. The Custodian shall be responsible for the selection of the
currency brokers or Banking Institutions and the failure of such currency
brokers or Banking Institutions to comply with the terms of any contract or
option.
(c) Payments. Notwithstanding anything to the contrary contained herein,
upon receipt of Proper Instructions the Custodian may, in connection with a
foreign exchange contract, make free outgoing payments of cash in the form
of U.S. Dollars or foreign currency prior to receipt of confirmation of
such foreign exchange contract or confirmation that the countervalue
currency completing such contract has been delivered or received.
Section 2.14. Securities Loans. Upon receipt of Proper Instructions, the
Custodian shall, in connection with loans of securities by a Portfolio,
deliver securities of such Portfolio to the borrower thereof prior to
receipt of the collateral, if any, for such borrowing; provided that, in
cases of loans of securities secured by cash collateral, the Custodian's
instructions to the Securities System shall require that the Securities
System deliver the securities of the Portfolio to the borrower thereof only
upon receipt of the collateral for such borrowing.
Section 2.15. Collections. The Custodian shall, and shall cause any
Subcustodian to: (a) collect amounts due and payable to the Fund with
respect to portfolio securities and other assets of each Portfolio; (b)
promptly credit to the account of each Portfolio all income and other
payments relating to portfolio securities and other assets held by the
Custodian hereunder upon Custodian's receipt of such income or payments or
as otherwise agreed in writing by the Custodian and the Fund; (c) promptly
endorse and deliver any instruments required to effect such collections;
and (d) promptly execute ownership and other certificates and affidavits
for all federal, state and foreign tax purposes in connection with receipt
of income or other payments with respect to portfolio securities and other
assets of each Portfolio, or in connection with the transfer of such
securities or other assets; provided, however, that with respect to
portfolio securities registered in so-called street name, the Custodian
shall use its best efforts to collect amounts due and payable to the Fund.
The Custodian shall promptly notify the Fund in writing by facsimile
transmission or in such other manner as the Fund and Custodian may agree in
writing if any amount payable with respect to portfolio securities or other
assets of the Portfolios is not received by the Custodian when due. The
Custodian shall not be responsible for the collection of amounts due and
payable with respect to portfolio securities or other assets that are in
default.
Section 2.16. Dividends, Distributions and Redemptions. The Custodian
shall promptly release funds or securities: (a) upon receipt of Proper
Instructions, to one or more Distribution Accounts designated by the Fund
in such Proper Instructions; or (b) upon receipt of Special Instructions,
as otherwise directed by the Fund, for the purpose of the payment of
dividends or other distributions to shareholders of the Portfolios, and
payment to shareholders who have requested repurchase or redemption of
their shares of the Portfolio(s) (collectively, the "Shares"). For
purposes of this Agreement, a "Distribution Account" shall mean an account
established at a Banking Institution designated by the Fund in Special
Instructions.
Section 2.17. Proceeds from Shares Sold. The Custodian shall receive
funds representing cash payments received for Shares issued or sold from
time to time by the Fund, and shall promptly credit such funds to the
account(s) of the applicable Portfolio(s). The Custodian shall promptly
notify the Fund of Custodian's receipt of cash in payment for Shares issued
by the Fund by facsimile transmission or in such other manner as the Fund
and Custodian may agree in writing. Upon receipt of Proper Instructions,
the Custodian shall: (a) deliver all federal funds received by the
Custodian in payment for Shares in payment for such investments as may be
set forth in such Proper Instructions and at a time agreed upon between the
Custodian and the Fund; and (b) make federal funds available to the Fund as
of specified times agreed upon from time to time by the Fund and the
Custodian, in the amount of checks received in payment for Shares which are
deposited to the accounts of the Portfolios.
Section 2.18. Proxies, Notices, Etc. The Custodian shall deliver to the
Fund, in the most expeditious manner practicable, all forms of proxies, all
notices of meetings, and any other notices or announcements affecting or
relating to securities owned by the Portfolios that are received by the
Custodian, any Subcustodian, or any nominee of either of them, and, upon
receipt of Proper Instructions, the Custodian shall execute and deliver, or
cause such Subcustodian or nominee to execute and deliver, such proxies or
other authorizations as may be required. Except as directed pursuant to
Proper Instructions, neither the Custodian nor any Subcustodian or nominee
shall vote upon any such securities, or execute any proxy to vote thereon,
or give any consent or take any other action with respect thereto.
Section 2.19. Bills and Other Disbursements. Upon receipt of Proper
Instructions, the Custodian shall pay or cause to be paid, all bills,
statements, or other obligations of the Portfolios.
Section 2.20. Nondiscretionary Functions. The Custodian shall attend to
all nondiscretionary details in connection with the sale, exchange,
substitution, purchase, transfer or other dealings with securities or other
assets of the Portfolios held by the Custodian, except as otherwise
directed from time to time pursuant to Proper Instructions.
Section 2.21. Bank Accounts
(a) Accounts with the Custodian and any Subcustodians. The Custodian shall
open and operate a bank account or accounts (hereinafter referred to
collectively, as "Bank Accounts") on the books of the Custodian or any
Subcustodian provided that such account(s) shall be in the name of the
Custodian or a nominee of the Custodian, for the account of a Portfolio,
and shall be subject only to the draft or order of the Custodian; provided
however, that such Bank Accounts in countries other than the United States
may be held in an account of the Custodian containing only assets held by
the Custodian as a fiduciary or custodian for customers, and provided
further, that the records of the Custodian shall indicate at all times the
Portfolio or other customer for which such securities and other assets are
held in such account and the respective interests therein. Such Bank
Accounts may be denominated in either U.S. Dollars or other currencies.
The responsibilities of the Custodian to the Fund for deposits accepted on
the Custodian's books in the United States shall be that of a U.S. bank for
a similar deposit. The responsibilities of the Custodian to the Fund for
deposits accepted on any Subcustodian's books shall be governed by the
provisions of Section 5.02.
(b) Accounts With Other Banking Institutions. The Custodian may open and
operate Bank Accounts on behalf of a Portfolio, in the name of the
Custodian or a nominee of the Custodian, at a Banking Institution other
than the Custodian or any Subcustodian, provided that such account(s) shall
be in the name of the Custodian or a nominee of the Custodian, for the
account of a Portfolio, and shall be subject only to the draft or order of
the Custodian; provided however, that such Bank Accounts may be held in an
account of the Custodian containing only assets held by the Custodian as a
fiduciary or custodian for customers, and provided further, that the
records of the Custodian shall indicate at all times the Portfolio or other
customer for which such securities and other assets are held in such
account and the respective interests therein. Such Bank Accounts may be
denominated in either U.S. Dollars or other currencies. Subject to the
provisions of Section 5.01(a), the Custodian shall be responsible for the
selection of the Banking Institution and for the failure of such Banking
Institution to pay according to the terms of the deposit.
(c) Deposit Insurance. Upon receipt of Proper Instructions, the Custodian
shall take such reasonable actions as the Fund deems necessary or
appropriate to cause each deposit account established by the Custodian
pursuant to this Section 2.21 to be insured to the maximum extent possible
by all applicable deposit insurers including, without limitation, the
Federal Deposit Insurance Corporation.
Section 2.22. Deposit of Fund Assets in Securities Systems. The
Custodian may deposit and/or maintain domestic securities owned by the
Portfolios in: (a) The Depository Trust Company; (b) the Participants
Trust Company; (c) any book-entry system as provided in (i) Subpart O of
Treasury Circular No. 300, 31 CFR 306.115, (ii) Subpart B of Treasury
Circular Public Debt Series No. 27-76, 31 CFR 350.2, or (iii) the
book-entry regulations of federal agencies substantially in the form of 31
CFR 306.115; or (d) any other domestic clearing agency registered with the
Securities and Exchange Commission ("SEC") under Section 17A of the
Securities Exchange Act of 1934 (or as may otherwise be authorized by the
Securities and Exchange Commission to serve in the capacity of depository
or clearing agent for the securities or other assets of investment
companies) which acts as a securities depository and the use of which the
Fund has previously approved by Special Instructions (as hereinafter
defined) (each of the foregoing being referred to in this Agreement as a
"Securities System"). Use of a Securities System shall be in accordance
with applicable Federal Reserve Board and SEC rules and regulations, if
any, and subject to the following provisions:
(A) The Custodian may deposit and/or maintain securities held hereunder
in a Securities System, provided that such securities are represented in an
account ("Account") of the Custodian in the Securities System which Account
shall not contain any assets of the Custodian other than assets held as a
fiduciary, custodian, or otherwise for customers.
(B) The books and records of the Custodian shall at all times identify
those securities belonging to each Portfolio which are maintained in a
Securities System.
(C) The Custodian shall pay for securities purchased for the account of a
Portfolio only upon (w) receipt of advice from the Securities System that
such securities have been transferred to the Account of the Custodian, and
(x) the making of an entry on the records of the Custodian to reflect such
payment and transfer for the account of such Portfolio. The Custodian
shall transfer securities sold for the account of a Portfolio only upon (y)
receipt of advice from the Securities System that payment for such
securities has been transferred to the Account of the Custodian, and (z)
the making of an entry on the records of the Custodian to reflect such
transfer and payment for the account of such Portfolio. Copies of all
advices from the Securities System relating to transfers of securities for
the account of a Portfolio shall identify such Portfolio, shall be
maintained for the Portfolio by the Custodian. The Custodian shall deliver
to the Fund on the next succeeding business day daily transaction reports
which shall include each day's transactions in the Securities System for
the account of each Portfolio. Such transaction reports shall be delivered
to the Fund or any agent designated by the Fund pursuant to Proper
Instructions, by computer or in such other manner as the Fund and Custodian
may agree in writing.
(D) The Custodian shall, if requested by the Fund pursuant to Proper
Instructions, provide the Fund with all reports obtained by the Custodian
or any Subcustodian with respect to a Securities System's accounting
system, internal accounting control and procedures for safeguarding
securities deposited in the Securities System.
(E) Upon receipt of Special Instructions, the Custodian shall terminate
the use of any Securities System (except the federal book-entry system) on
behalf of any Portfolio as promptly as practicable and shall take all
actions reasonably practicable to safeguard the securities of the
Portfolios maintained with such Securities System.
Section 2.23. Other Transfers. Upon receipt of Special Instructions, the
Custodian shall make such other dispositions of securities, funds or other
property of the Portfolios in a manner or for purposes other than as
expressly set forth in this Agreement, provided that the Special
Instructions relating to such disposition shall include a statement of the
purpose for which the delivery is to be made, the amount of funds and/or
securities to be delivered, and the name of the person or persons to whom
delivery is to be made, and shall otherwise comply with the provisions of
Sections 3.01 and 3.03 hereof.
Section 2.24. Establishment of Segregated Account. Upon receipt of
Proper Instructions, the Custodian shall establish and maintain on its
books a segregated account or accounts for and on behalf of a Portfolio,
into which account or accounts may be transferred cash and/or securities or
other assets of such Portfolio, including securities maintained by the
Custodian in a Securities System pursuant to Section 2.22 hereof, said
account or accounts to be maintained: (a) for the purposes set forth in
Sections 2.09, 2.10 and 2.11 hereof; (b) for the purposes of compliance by
the Fund with the procedures required by Investment Company Act Release No.
10666, or any subsequent release or releases of the SEC relating to the
maintenance of segregated accounts by registered investment companies; or
(c) for such other purposes as set forth, from time to time, in Special
Instructions.
Section 2.25. Custodian's Books and Records. The Custodian shall provide
any assistance reasonably requested by the Fund in the preparation of
reports to Fund shareholders and others, audits of accounts, and other
ministerial matters of like nature. The Custodian shall maintain complete
and accurate records with respect to securities and other assets held for
the accounts of the Portfolios as required by the rules and regulations of
the SEC applicable to investment companies registered under the 1940 Act,
including: (a) journals or other records of original entry containing a
detailed and itemized daily record of all receipts and deliveries of
securities (including certificate and transaction identification numbers,
if any), and all receipts and disbursements of cash; (b) ledgers or other
records reflecting (i) securities in transfer, (ii) securities in physical
possession, (iii) securities borrowed, loaned or collateralizing
obligations of the Portfolios, (iv) monies borrowed and monies loaned
(together with a record of the collateral therefor and substitutions of
such collateral), and (v) dividends and interest received; and (c)
cancelled checks and bank records related thereto. The Custodian shall
keep such other books and records of the Fund as the Fund shall reasonably
request. All such books and records maintained by the Custodian shall be
maintained in a form acceptable to the Fund and in compliance with the
rules and regulations of the SEC, including, but not limited to, books and
records required to be maintained by Section 31(a) of the 1940 Act and the
rules and regulations from time to time adopted thereunder. All books and
records maintained by the Custodian pursuant to this Agreement shall at all
times be the property of the Fund and shall be available during normal
business hours for inspection and use by the Fund and its agents,
including, without limitation, its independent certified public
accountants. Notwithstanding the preceding sentence, the Funds shall not
take any actions or cause the Custodian to take any actions which would
cause, either directly or indirectly, the Custodian to violate any
applicable laws, regulations or orders.
Section 2.26. Opinion of Fund's Independent Certified Public Accountants.
The Custodian shall take all reasonable action as the Fund may request to
obtain from year to year favorable opinions from the Fund's independent
certified public accountants with respect to the Custodian's activities
hereunder in connection with the preparation of the Fund's Form N-1A and
the Fund's Form N-SAR or other periodic reports to the SEC and with respect
to any other requirements of the SEC.
Section 2.27. Reports by Independent Certified Public Accountants. At
the request of the Fund, the Custodian shall deliver to the Fund a written
report prepared by the Custodian's independent certified public accountants
with respect to the services provided by the Custodian under this
Agreement, including, without limitation, the Custodian's accounting
system, internal accounting control and procedures for safeguarding cash,
securities and other assets, including cash, securities and other assets
deposited and/or maintained in a Securities System or with a Subcustodian.
Such report shall be of sufficient scope and in sufficient detail as may
reasonably be required by the Fund and as may reasonably be obtained by the
Custodian.
Section 2.28. Overdraft Facility. In the event that the Custodian is
directed by Proper Instructions to make any payment or transfer of funds on
behalf of a Portfolio for which there would be, at the close of business on
the date of such payment or transfer, insufficient funds held by the
Custodian on behalf of such Portfolio, the Custodian may, in its
discretion, provide an overdraft (an "Overdraft") to the Fund on behalf of
such Portfolio, in an amount sufficient to allow the completion of such
payment. Any Overdraft provided hereunder: (a) shall be payable on the
next Business Day, unless otherwise agreed by the Fund and the Custodian;
and (b) shall accrue interest from the date of the Overdraft to the date of
payment in full by the Fund on behalf of the applicable Portfolio at a rate
agreed upon in writing, from time to time, by the Custodian and the Fund.
The Custodian and the Fund acknowledge that the purpose of such Overdrafts
is to temporarily finance the purchase or sale of securities for prompt
delivery in accordance with the terms hereof, or to meet emergency expenses
not reasonably foreseeable by the Fund. The Custodian shall promptly
notify the Fund in writing (an "Overdraft Notice") of any Overdraft by
facsimile transmission or in such other manner as the Fund and the
Custodian may agree in writing. At the request of the Custodian, the Fund,
on behalf of a Portfolio, shall pledge, assign and grant to the Custodian a
security interest in certain specified securities of the Portfolio, as
security for Overdrafts provided to such Portfolio, under the terms and
conditions set forth in Appendix "C" attached hereto.
ARTICLE III
PROPER INSTRUCTIONS, SPECIAL INSTRUCTIONS
AND RELATED MATTERS
Section 3.01. Proper Instructions and Special Instructions.
(a) Proper Instructions. As used herein, the term "Proper Instructions"
shall mean: (i) a tested telex, a written (including, without limitation,
facsimile transmission) request, direction, instruction or certification
signed or initialed by or on behalf of the Fund by one or more Authorized
Persons (as hereinafter defined); (ii) a telephonic or other oral
communication by one or more Authorized Persons; or (iii) a communication
effected directly between an electro-mechanical or electronic device or
system (including, without limitation, computers) by or on behalf of the
Fund by one or more Authorized Persons; provided, however, that
communications of the types described in clauses (ii) and (iii) above
purporting to be given by an Authorized Person shall be considered Proper
Instructions only if the Custodian reasonably believes such communications
to have been given by an Authorized Person with respect to the transaction
involved. Proper Instructions in the form of oral communications shall be
confirmed by the Fund by tested telex or in writing in the manner set forth
in clause (i) above, but the lack of such confirmation shall in no way
affect any action taken by the Custodian in reliance upon such oral
instructions prior to the Custodian's receipt of such confirmation. The
Fund and the Custodian are hereby authorized to record any and all
telephonic or other oral instructions communicated to the Custodian.
Proper Instructions may relate to specific transactions or to types or
classes of transactions, and may be in the form of standing instructions.
(b) Special Instructions. As used herein, the term "Special Instructions"
shall mean Proper Instructions countersigned or confirmed in writing by the
Treasurer or any Assistant Treasurer of the Fund or any other person
designated by the Treasurer of the Fund in writing, which countersignature
or confirmation shall be (i)included on the same instrument containing the
Proper Instructions or on a separate instrument relating thereto, and (ii)
delivered by hand, by facsimile transmission, or in such other manner as
the Fund and the Custodian agree in writing.
(c) Address for Proper Instructions and Special Instructions. Proper
Instructions and Special Instructions shall be delivered to the Custodian
at the address and/or telephone, telecopy or telex number agreed upon from
time to time by the Custodian and the Fund.
Section 3.02. Authorized Persons. Concurrently with the execution of
this Agreement and from time to time thereafter, as appropriate, the Fund
shall deliver to the Custodian, duly certified as appropriate by a
Treasurer or Assistant Treasurer of the Fund, a certificate setting forth:
(a) the names, titles, signatures and scope of authority of all persons
authorized to give Proper Instructions or any other notice, request,
direction, instruction, certificate or instrument on behalf of the Fund
(collectively, the "Authorized Persons" and individually, an "Authorized
Person"); and (b) the names, titles and signatures of those persons
authorized to issue Special Instructions. Such certificate may be accepted
and relied upon by the Custodian as conclusive evidence of the facts set
forth therein and shall be considered to be in full force and effect until
delivery to the Custodian of a similar certificate to the contrary. Upon
delivery of a certificate which deletes the name(s) of a person previously
authorized to give Proper Instructions or to issue Special Instructions,
such persons shall no longer be considered an Authorized Person or
authorized to issue Special Instructions.
Section 3.03. Persons Having Access to Assets of the Portfolios.
Notwithstanding anything to the contrary contained in this Agreement, no
Authorized Person, Trustee, officer, employee or agent of the Fund shall
have physical access to the assets of any Portfolio held by the Custodian
nor shall the Custodian deliver any assets of a Portfolio for delivery to
an account of such person; provided, however, that nothing in this Section
3.03 shall prohibit (a) any Authorized Person from giving Proper
Instructions, or any person authorized to issue Special Instructions from
issuing Special Instructions, so long as such action does not result in
delivery of or access to assets of any Portfolio prohibited by this Section
3.03; or (b) the Fund's independent certified public accountants from
examining or reviewing the assets of the Portfolios held by the Custodian.
The Fund shall deliver to the Custodian a written certificate identifying
such Authorized Persons, Trustees, officers, employees and agents of the
Fund.
Section 3.04. Actions of Custodian Based on Proper Instructions and
Special Instructions. So long as and to the extent that the Custodian acts
in accordance with (a) Proper Instructions or Special Instructions, as the
case may be, and (b) the terms of this Agreement, the Custodian shall not
be responsible for the title, validity or genuineness of any property, or
evidence of title thereof, received by it or delivered by it pursuant to
this Agreement.
ARTICLE IV
SUBCUSTODIANS
The Custodian may, from time to time, in accordance with the relevant
provisions of this Article IV, appoint one or more Domestic Subcustodians,
Foreign Subcustodians, Interim Subcustodians and Special Subcustodians to
act on behalf of a Portfolio. (For purposes of this Agreement, all duly
appointed Domestic Subcustodians, Foreign Subcustodians, Interim
Subcustodians, and Special Subcustodians are hereinafter referred to
collectively, as "Subcustodians.")
Section 4.01. Domestic Subcustodians. The Custodian may, at any time and
from time to time, appoint any bank as defined in Section 2(a)(5) of the
1940 Act meeting the requirements of a custodian under Section 17(f) of the
1940 Act and the rules and regulations thereunder, to act on behalf of one
or more Portfolios as a subcustodian for purposes of holding cash,
securities and other assets of such Portfolios and performing other
functions of the Custodian within the United States (a "Domestic
Subcustodian"); provided, that, the Custodian shall notify the Fund in
writing of the identity and qualifications of any proposed Domestic
Subcustodian at least thirty (30) days prior to appointment of such
Domestic Subcustodian, and the Fund may, in its sole discretion, by written
notice to the Custodian executed by an Authorized Person disapprove of the
appointment of such Domestic Subcustodian. If following notice by the
Custodian to the Fund regarding appointment of a Domestic Subcustodian and
the expiration of thirty (30) days after the date of such notice, the Fund
shall have failed to notify the Custodian of its disapproval thereof, the
Custodian may, in its discretion, appoint such proposed Domestic
Subcustodian as its subcustodian.
Section 4.02. Foreign Subcustodians and Interim Subcustodians.
(a) Foreign Subcustodians. The Custodian may, at any time and from time
to time, appoint: (i) any bank, trust company or other entity meeting the
requirements of an "eligible foreign custodian" under Section 17(f) of the
1940 Act and the rules and regulations thereunder or by order of the
Securities and Exchange Commission exempted therefrom, or (ii) any bank as
defined in Section 2(a)(5) of the 1940 Act meeting the requirements of a
custodian under Section 17(f) of the 1940 Act and the rules and regulations
thereunder to act on behalf of one or more Portfolios as a subcustodian for
purposes of holding cash, securities and other assets of such Portfolios
and performing other functions of the Custodian in countries other than the
United States of America (a "Foreign Subcustodian"); provided, that, prior
to the appointment of any Foreign Subcustodian, the Custodian shall have
obtained written confirmation of the approval of the Board of Trustees or
other governing body or entity of the Fund on behalf of the applicable
Portfolio(s) (which approval may be withheld in the sole discretion of such
Board of Trustees or other governing body or entity) with respect to (i)
the identity and qualifications of any proposed Foreign Subcustodian, (ii)
the country or countries in which, and the securities depositories or
clearing agencies, if any, through which, any proposed Foreign Subcustodian
is authorized to hold securities and other assets of the Portfolio(s), and
(iii) the form and terms of the subcustodian agreement to be entered into
between such proposed Foreign Subcustodian and the Custodian. Each such
duly approved Foreign Subcustodian and the countries where and the
securities depositories and clearing agencies through which they may hold
securities and other assets of the Funds shall be listed on Appendix "B"
attached hereto, as it may be amended, from time to time, in accordance
with the provisions of Section 9.05(c) hereof. The Fund shall be
responsible for informing the Custodian sufficiently in advance of a
proposed investment which is to be held in a country in which no Foreign
Subcustodian is authorized to act, in order that there shall be sufficient
time for the Custodian to effect the appropriate arrangements with a
proposed foreign subcustodian, including obtaining approval as provided in
this Section 4.02(a). The Custodian shall not amend any subcustodian
agreement entered into with a Foreign Subcustodian, or agree to change or
permit any changes thereunder, or waive any rights under such agreement,
which materially affect the Fund's rights or the Foreign Subcustodian's
obligations or duties to the Fund under such agreement, except upon prior
approval pursuant to Special Instructions.
(b) Interim Subcustodians. Notwithstanding the foregoing, in the event
that a Portfolio shall invest in a security or other asset to be held in a
country in which no Foreign Subcustodian is authorized to act, the
Custodian shall promptly notify the Fund in writing by facsimile
transmission or in such other manner as the Fund and Custodian shall agree
in writing of the unavailability of an approved Foreign Subcustodian in
such country; and the Custodian shall, upon receipt of Special
Instructions, appoint any Person designated by the Fund in such Special
Instructions to hold such security or other asset. (Any Person appointed
as a subcustodian pursuant to this Section 4.02(b) is hereinafter referred
to as an "Interim Subcustodian.")
Section 4.03. Special Subcustodians. Upon receipt of Special
Instructions, the Custodian shall, on behalf of the Fund for one or more
Portfolios, appoint one or more banks, trust companies or other entities
designated in such Special Instructions to act as a subcustodian for
purposes of: (i) effecting third-party repurchase transactions with banks,
brokers, dealers or other entities through the use of a common custodian or
subcustodian; (ii) establishing a joint trading account for the Portfolios
and other registered open-end management investment companies for which
Fidelity Management & Research Company serves as investment adviser,
through which the Portfolios and such other investment companies shall
collectively participate in certain repurchase transactions; (iii)
providing depository and clearing agency services with respect to certain
variable rate demand note securities; and (iv) effecting any other
transactions designated by the Fund in Special Instructions. (Each such
designated subcustodian is hereinafter referred to as a "Special
Subcustodian.") Each such duly appointed Special Subcustodian shall be
listed on Appendix "B" attached hereto, as it may be amended from time to
time in accordance with the provisions of Section 9.05(c) hereof. In
connection with the appointment of any Special Subcustodian, the Custodian
shall enter into a subcustodian agreement with the Special Subcustodian in
form and substance approved by the Fund, provided that such agreement shall
in all events comply with the provisions of the 1940 Act and the rules and
regulations thereunder and the terms and provisions of this Agreement. The
Custodian shall not amend any subcustodian agreement entered into with a
Special Subcustodian, or agree to change or permit any changes thereunder,
or waive any rights under such agreement, except upon prior approval
pursuant to Special Instructions.
Section 4.04. Termination of a Subcustodian. The Custodian shall (i)
cause each Domestic Subcustodian and Foreign Subcustodian to, and (ii) use
its best efforts to cause each Interim Subcustodian and Special
Subcustodian to, perform all of its obligations in accordance with the
terms and conditions of the subcustodian agreement between the Custodian
and such Subcustodian. In the event that the Custodian is unable to cause
such Subcustodian to fully perform its obligations thereunder, the
Custodian shall forthwith, upon the receipt of Special Instructions,
terminate such Subcustodian with respect to the Fund and, if necessary or
desirable, appoint a replacement Subcustodian in accordance with the
provisions of Section 4.01 or Section 4.02, as the case may be. In
addition to the foregoing, the Custodian (A) may, at any time in its
discretion, upon written notification to the Fund, terminate any Domestic
Subcustodian, Foreign Subcustodian or Interim Subcustodian, and (B) shall,
upon receipt of Special Instructions, terminate any Subcustodian with
respect to the Fund, in accordance with the termination provisions under
the applicable subcustodian agreement.
Section 4.05. Certification Regarding Foreign Subcustodians. Upon
request of the Fund, the Custodian shall deliver to the Fund a certificate
stating: (i) the identity of each Foreign Subcustodian then acting on
behalf of the Custodian; (ii) the countries in which and the securities
depositories and clearing agents through which each such Foreign
Subcustodian is then holding cash, securities and other assets of any
Portfolio; and (iii) such other information as may be requested by the Fund
to ensure compliance with Rule 17(f)-5 under the 1940 Act.
ARTICLE V
STANDARD OF CARE; INDEMNIFICATION
Section 5.01. Standard of Care.
(a) General Standard of Care. The Custodian shall exercise reasonable
care and diligence in carrying out all of its duties and obligations under
this Agreement, and shall be liable to the Fund for all loss, damage and
expense suffered or incurred by the Fund or the Portfolios resulting from
the failure of the Custodian to exercise such reasonable care and
diligence.
(b) Actions Prohibited by Applicable Law, Etc. In no event shall the
Custodian incur liability hereunder if the Custodian or any Subcustodian or
Securities System, or any subcustodian, securities depository or securities
system utilized by any such Subcustodian, or any nominee of the Custodian
or any Subcustodian (individually, a "Person") is prevented, forbidden or
delayed from performing, or omits to perform, any act or thing which this
Agreement provides shall be performed or omitted to be performed, by reason
of: (i) any provision of any present or future law or regulation or order
of the United States of America, or any state thereof, or of any foreign
country, or political subdivision thereof or of any court of competent
jurisdiction; or (ii) any act of God or war or other similar circumstance
beyond the control of the Custodian, unless, in each case, such delay or
nonperformance is caused by (A) the negligence, misfeasance or misconduct
of the applicable Person, or (B) a malfunction or failure of equipment
operated or utilized by the applicable Person other than a malfunction or
failure beyond such Person's control and which could not reasonably be
anticipated and/or prevented by such Person.
(c) Mitigation by Custodian. Upon the occurrence of any event which
causes or may cause any loss, damage or expense to the Fund or any
Portfolio, (i) the Custodian shall, (ii) the Custodian shall cause any
applicable Domestic Subcustodian or Foreign Subcustodian to, and (iii) the
Custodian shall use its best efforts to cause any applicable Interim
Subcustodian or Special Subcustodian to, use all commercially reasonable
efforts and take all reasonable steps under the circumstances to mitigate
the effects of such event and to avoid continuing harm to the Fund and the
Portfolios.
(d) Advice of Counsel. The Custodian shall be entitled to receive and act
upon advice of counsel on all matters. The Custodian shall be without
liability for any action reasonably taken or omitted in good faith pursuant
to the advice of (i) counsel for the Fund, or (ii) at the expense of the
Custodian, such other counsel as the Fund and the Custodian may agree upon;
provided, however, with respect to the performance of any action or
omission of any action upon such advice, the Custodian shall be required to
conform to the standard of care set forth in Section 5.01(a).
(e) Expenses of the Fund. In addition to the liability of the Custodian
under this Article V, the Custodian shall be liable to the Fund for all
reasonable costs and expenses incurred by the Fund in connection with any
claim by the Fund against the Custodian arising from the obligations of the
Custodian hereunder including, without limitation, all reasonable
attorneys' fees and expenses incurred by the Fund in asserting any such
claim, and all expenses incurred by the Fund in connection with any
investigations, lawsuits or proceedings relating to such claim; provided,
that the Fund has recovered from the Custodian for such claim.
(f) Liability for Past Records. The Custodian shall have no liability in
respect of any loss, damage or expense suffered by the Fund, insofar as
such loss, damage or expense arises from the performance of the Custodian's
duties hereunder by reason of the Custodian's reliance upon records that
were maintained for the Fund by entities other than the Custodian prior to
the Custodian's employment hereunder.
Section 5.02. Liability of Custodian for Actions of Other Persons.
(a) Domestic Subcustodians and Foreign Subcustodians. The Custodian shall
be liable for the actions or omissions of any Domestic Subcustodian or any
Foreign Subcustodian to the same extent as if such action or omission were
performed by the Custodian itself. In the event of any loss, damage or
expense suffered or incurred by the Fund caused by or resulting from the
actions or omissions of any Domestic Subcustodian or Foreign Subcustodian
for which the Custodian would otherwise be liable, the Custodian shall
promptly reimburse the Fund in the amount of any such loss, damage or
expense.
(b) Interim Subcustodians. Notwithstanding the provisions of Section 5.01
to the contrary, the Custodian shall not be liable to the Fund for any
loss, damage or expense suffered or incurred by the Fund or any Portfolio
resulting from the actions or omissions of an Interim Subcustodian unless
such loss, damage or expense is caused by, or results from, the negligence,
misfeasance or misconduct of the Custodian; provided, however, in the event
of any such loss, damage or expense, the Custodian shall take all
reasonable steps to enforce such rights as it may have against such Interim
Subcustodian to protect the interests of the Fund and the Portfolios.
(c) Special Subcustodians. Notwithstanding the provisions of Section 5.01
to the contrary and except as otherwise provided in any subcustodian
agreement to which the Custodian, the Fund and any Special Subcustodian are
parties, the Custodian shall not be liable to the Fund for any loss, damage
or expense suffered or incurred by the Fund or any Portfolio resulting from
the actions or omissions of a Special Subcustodian, unless such loss,
damage or expense is caused by, or results from, the negligence,
misfeasance or misconduct of the Custodian; provided, however, that in the
event of any such loss, damage or expense, the Custodian shall take all
reasonable steps to enforce such rights as it may have against any Special
Subcustodian to protect the interests of the Fund and the Portfolios.
(d) Securities Systems. Notwithstanding the provisions of Section 5.01 to
the contrary, the Custodian shall not be liable to the Fund for any loss,
damage or expense suffered or incurred by the Fund or any Portfolio
resulting from the use by the Custodian of a Securities System, unless such
loss, damage or expense is caused by, or results from, the negligence,
misfeasance or misconduct of the Custodian; provided, however, that in the
event of any such loss, damage or expense, the Custodian shall take all
reasonable steps to enforce such rights as it may have against the
Securities System to protect the interests of the Fund and the Portfolios.
(e) Reimbursement of Expenses. The Fund agrees to reimburse the Custodian
for all reasonable out-of-pocket expenses incurred by the Custodian in
connection with the fulfillment of its obligations under this Section 5.02;
provided, however, that such reimbursement shall not apply to expenses
occasioned by or resulting from the negligence, misfeasance or misconduct
of the Custodian.
Section 5.03. Indemnification.
(a) Indemnification Obligations. Subject to the limitations set forth in
this Agreement, the Fund agrees to indemnify and hold harmless the
Custodian and its nominees from all loss, damage and expense (including
reasonable attorneys' fees) suffered or incurred by the Custodian or its
nominee caused by or arising from actions taken by the Custodian in the
performance of its duties and obligations under this Agreement; provided,
however, that such indemnity shall not apply to loss, damage and expense
occasioned by or resulting from the negligence, misfeasance or misconduct
of the Custodian or its nominee. In addition, the Fund agrees to indemnify
any Person against any liability incurred by reason of taxes assessed to
such Person, or other loss, damage or expenses incurred by such Person,
resulting from the fact that securities and other property of the
Portfolios are registered in the name of such Person; provided, however,
that in no event shall such indemnification be applicable to income,
franchise or similar taxes which may be imposed or assessed against any
Person.
(b) Notice of Litigation, Right to Prosecute, Etc. The Fund shall not be
liable for indemnification under this Section 5.03 unless a Person shall
have promptly notified the Fund in writing of the commencement of any
litigation or proceeding brought against such Person in respect of which
indemnity may be sought under this Section 5.03. With respect to claims in
such litigation or proceedings for which indemnity by the Fund may be
sought and subject to applicable law and the ruling of any court of
competent jurisdiction, the Fund shall be entitled to participate in any
such litigation or proceeding and, after written notice from the Fund to
any Person, the Fund may assume the defense of such litigation or
proceeding with counsel of its choice at its own expense in respect of that
portion of the litigation for which the Fund may be subject to an
indemnification obligation; provided, however, a Person shall be entitled
to participate in (but not control) at its own cost and expense, the
defense of any such litigation or proceeding if the Fund has not
acknowledged in writing its obligation to indemnify the Person with respect
to such litigation or proceeding. If the Fund is not permitted to
participate or control such litigation or proceeding under applicable law
or by a ruling of a court of competent jurisdiction, such Person shall
reasonably prosecute such litigation or proceeding. A Person shall not
consent to the entry of any judgment or enter into any settlement in any
such litigation or proceeding without providing the Fund with adequate
notice of any such settlement or judgment, and without the Fund's prior
written consent. All Persons shall submit written evidence to the Fund
with respect to any cost or expense for which they are seeking
indemnification in such form and detail as the Fund may reasonably request.
Section 5.04. Investment Limitations. If the Custodian has otherwise
complied with the terms and conditions of this Agreement in performing its
duties generally, and more particularly in connection with the purchase,
sale or exchange of securities made by or for a Portfolio, the Custodian
shall not be liable to the Fund and the Fund agrees to indemnify the
Custodian and its nominees, for any loss, damage or expense suffered or
incurred by the Custodian and its nominees arising out of any violation of
any investment or other limitation to which the Fund is subject.
Section 5.05. Fund's Right to Proceed. Notwithstanding anything to the
contrary contained herein, the Fund shall have, at its election upon
reasonable notice to the Custodian, the right to enforce, to the extent
permitted by any applicable agreement and applicable law, the Custodian's
rights against any Subcustodian, Securities System, or other Person for
loss, damage or expense caused the Fund by such Subcustodian, Securities
System, or other Person, and shall be entitled to enforce the rights of the
Custodian with respect to any claim against such Subcustodian, Securities
System or other Person, which the Custodian may have as a consequence of
any such loss, damage or expense, if and to the extent that the Fund has
not been made whole for any such loss or damage. If the Custodian makes
the Fund whole for any such loss or damage, the Custodian shall retain the
ability to enforce its rights directly against such Subcustodian,
Securities System or other Person. Upon the Fund's election to enforce any
rights of the Custodian under this Section 5.05, the Fund shall reasonably
prosecute all actions and proceedings directly relating to the rights of
the Custodian in respect of the loss, damage or expense incurred by the
Fund; provided that, so long as the Fund has acknowledged in writing its
obligation to indemnify the Custodian under Section 5.03 hereof with
respect to such claim, the Fund shall retain the right to settle,
compromise and/or terminate any action or proceeding in respect of the
loss, damage or expense incurred by the Fund without the Custodian's
consent and provided further, that if the Fund has not made an
acknowledgement of its obligation to indemnify, the Fund shall not settle,
compromise or terminate any such action or proceeding without the written
consent of the Custodian, which consent shall not be unreasonably withheld
or delayed. The Custodian agrees to cooperate with the Fund and take all
actions reasonably requested by the Fund in connection with the Fund's
enforcement of any rights of the Custodian. The Fund agrees to reimburse
the Custodian for all reasonable out-of-pocket expenses incurred by the
Custodian in connection with the fulfillment of its obligations under this
Section 5.05; provided, however, that such reimbursement shall not apply to
expenses occasioned by or resulting from the negligence, misfeasance or
misconduct of the Custodian.
ARTICLE VI
COMPENSATION
On behalf of each Portfolio, the Fund shall compensate the Custodian in an
amount, and at such times, as may be agreed upon in writing, from time to
time, by the Custodian and the Fund.
ARTICLE VII
TERMINATION
Section 7.01. Termination of Agreement in Full. This Agreement shall
continue in full force and effect until the first to occur of: (a)
termination by the Custodian by an instrument in writing delivered or
mailed to the Fund, such termination to take effect not sooner than ninety
(90) days after the date of such delivery; (b) termination by the Fund by
an instrument in writing delivered or mailed to the Custodian, such
termination to take effect not sooner than thirty (30) days after the date
of such delivery; or (c) termination by the Fund by written notice
delivered to the Custodian, based upon the Fund's determination that there
is a reasonable basis to conclude that the Custodian is insolvent or that
the financial condition of the Custodian is deteriorating in any material
respect, in which case termination shall take effect upon the Custodian's
receipt of such notice or at such later time as the Fund shall designate.
In the event of termination pursuant to this Section 7.01, the Fund shall
make payment of all accrued fees and unreimbursed expenses within a
reasonable time following termination and delivery of a statement to the
Fund setting forth such fees and expenses. The Fund shall identify in any
notice of termination a successor custodian to which the cash, securities
and other assets of the Portfolios shall, upon termination of this
Agreement, be delivered. In the event that no written notice designating a
successor custodian shall have been delivered to the Custodian on or before
the date when termination of this Agreement shall become effective, the
Custodian may deliver to a bank or trust company doing business in Boston,
Massachusetts, of its own selection, having an aggregate capital, surplus,
and undivided profits, as shown by its last published report, of not less
than $25,000,000, all securities and other assets held by the Custodian and
all instruments held by the Custodian relative thereto and all other
property held by it under this Agreement. Thereafter, such bank or trust
company shall be the successor of the Custodian under this Agreement. In
the event that securities and other assets remain in the possession of the
Custodian after the date of termination hereof owing to failure of the Fund
to appoint a successor custodian, the Custodian shall be entitled to
compensation for its services in accordance with the fee schedule most
recently in effect, for such period as the Custodian retains possession of
such securities and other assets, and the provisions of this Agreement
relating to the duties and obligations of the Custodian and the Fund shall
remain in full force and effect. In the event of the appointment of a
successor custodian, it is agreed that the cash, securities and other
property owned by the Fund and held by the Custodian, any Subcustodian or
nominee shall be delivered to the successor custodian; and the Custodian
agrees to cooperate with the Fund in the execution of documents and
performance of other actions necessary or desirable in order to substitute
the successor custodian for the Custodian under this Agreement.
Section 7.02. Termination as to One or More Portfolios. This Agreement
may be terminated as to one or more Portfolios (but less than all of the
Portfolios) by delivery of an amended Appendix "A" deleting such Portfolios
pursuant to Section 9.05(b) hereof, in which case termination as to such
deleted Portfolios shall take effect thirty (30) days after the date of
such delivery. The execution and delivery of an amended Appendix "A" which
deletes one or more Portfolios shall constitute a termination of this
Agreement only with respect to such deleted Portfolio(s), shall be governed
by the preceding provisions of Section 7.01 as to the identification of a
successor custodian and the delivery of cash, securities and other assets
of the Portfolio(s) so deleted, and shall not affect the obligations of the
Custodian and the Fund hereunder with respect to the other Portfolios set
forth in Appendix "A," as amended from time to time.
ARTICLE VIII
DEFINED TERMS
The following terms are defined in the following sections:
Term Section
Account 2.22
ADRs 2.06
Authorized Person(s) 3.02
Banking Institution 2.12(a)
Business Day Appendix "C"
Bank Accounts 2.21
Distribution Account 2.16
Domestic Subcustodian 4.01
Foreign Subcustodian 4.02(a)
Institutional Client 2.03
Interim Subcustodian 4.02(b)
Overdraft 2.28
Overdraft Notice 2.28
Person 5.01(b)
Portfolio Preamble
Procedural Agreement 2.10
Proper Instructions 3.01(a)
SEC 2.22
Securities System 2.22
Shares 2.16
Special Instructions 3.01(b)
Special Subcustodian 4.03
Subcustodian Article IV
1940 Act Preamble
ARTICLE IX
MISCELLANEOUS
Section 9.01. Execution of Documents, Etc.
(a) Actions by the Fund. Upon request, the Fund shall execute and
deliver to the Custodian such proxies, powers of attorney or other
instruments as may be reasonable and necessary or desirable in connection
with the performance by the Custodian or any Subcustodian of their
respective obligations under this Agreement or any applicable subcustodian
agreement, provided that the exercise by the Custodian or any Subcustodian
of any such rights shall in all events be in compliance with the terms of
this Agreement.
(b) Actions by Custodian. Upon receipt of Proper Instructions, the
Custodian shall execute and deliver to the Fund or to such other parties as
the Fund may designate in such Proper Instructions, all such documents,
instruments or agreements as may be reasonable and necessary or desirable
in order to effectuate any of the transactions contemplated hereby.
Section 9.02. Representative Capacity; Nonrecourse Obligations. A COPY
OF THE DECLARATION OF TRUST OF THE FUND IS ON FILE WITH THE SECRETARY OF
THE STATE OF THE FUND'S FORMATION, AND NOTICE IS HEREBY GIVEN THAT THIS
AGREEMENT IS NOT EXECUTED ON BEHALF OF THE TRUSTEES OF THE FUND AS
INDIVIDUALS, AND THE OBLIGATIONS OF THIS AGREEMENT ARE NOT BINDING UPON ANY
OF THE TRUSTEES, OFFICERS, SHAREHOLDERS OR PARTNERS OF THE FUND
INDIVIDUALLY, BUT ARE BINDING ONLY UPON THE ASSETS AND PROPERTY OF THE
PORTFOLIOS. THE CUSTODIAN AGREES THAT NO SHAREHOLDER, TRUSTEE, OFFICER OR
PARTNER OF THE FUND MAY BE HELD PERSONALLY LIABLE OR RESPONSIBLE FOR ANY
OBLIGATIONS OF THE FUND ARISING OUT OF THIS AGREEMENT.
Section 9.03. Several Obligations of the Portfolios. WITH RESPECT TO ANY
OBLIGATIONS OF THE FUND ON BEHALF OF THE PORTFOLIOS ARISING OUT OF THIS
AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE OBLIGATIONS ARISING UNDER
SECTIONS 2.28, 5.03, 5.05 and ARTICLE VI HEREOF, THE CUSTODIAN SHALL LOOK
FOR PAYMENT OR SATISFACTION OF ANY OBLIGATION SOLELY TO THE ASSETS AND
PROPERTY OF THE PORTFOLIO TO WHICH SUCH OBLIGATION RELATES AS THOUGH THE
FUND HAD SEPARATELY CONTRACTED WITH THE CUSTODIAN BY SEPARATE WRITTEN
INSTRUMENT WITH RESPECT TO EACH PORTFOLIO.
Section 9.04. Representations and Warranties.
(a) Representations and Warranties of the Fund. The Fund hereby
represents and warrants that each of the following shall be true, correct
and complete at all times during the term of this Agreement: (i) the Fund
is duly organized under the laws of its jurisdiction of organization and is
registered as an open-end management investment company under the 1940 Act;
and (ii) the execution, delivery and performance by the Fund of this
Agreement are (w) within its power, (x) have been duly authorized by all
necessary action, and (y) will not (A) contribute to or result in a breach
of or default under or conflict with any existing law, order, regulation or
ruling of any governmental or regulatory agency or authority, or (B)
violate any provision of the Fund's corporate charter, Declaration of Trust
or other organizational document, or bylaws, or any amendment thereof or
any provision of its most recent Prospectus or Statement of Additional
Information.
(b) Representations and Warranties of the Custodian. The Custodian
hereby represents and warrants that each of the following shall be true,
correct and complete at all times during the term of this Agreement: (i)
the Custodian is duly organized under the laws of its jurisdiction of
organization and qualifies to act as a custodian to open-end management
investment companies under the provisions of the 1940 Act; and (ii) the
execution, delivery and performance by the Custodian of this Agreement are
(w) within its power, (x) have been duly authorized by all necessary
action, and (y) will not (A) contribute to or result in a breach of or
default under or conflict with any existing law, order, regulation or
ruling of any governmental or regulatory agency or authority, or (B)
violate any provision of the Custodian's corporate charter, or other
organizational document, or bylaws, or any amendment thereof.
Section 9.05. Entire Agreement. This Agreement constitutes the entire
understanding and agreement of the parties hereto with respect to the
subject matter hereof and accordingly, supersedes as of the effective date
of this Agreement any custodian agreement heretofore in effect between the
Fund and the Custodian.
Section 9.06. Waivers and Amendments. No provision of this Agreement may
be waived, amended or terminated except by a statement in writing signed by
the party against which enforcement of such waiver, amendment or
termination is sought; provided, however: (a) Appendix "A" listing the
Portfolios for which the Custodian serves as custodian may be amended from
time to time to add one or more Portfolios, by the Fund's execution and
delivery to the Custodian of an amended Appendix "A", and the execution of
such amended Appendix by the Custodian, in which case such amendment shall
take effect immediately upon execution by the Custodian; (b) Appendix "A"
may be amended from time to time to delete one or more Portfolios (but less
than all of the Portfolios), by the Fund's execution and delivery to the
Custodian of an amended Appendix A", in which case such amendment shall
take effect thirty (30) days after such delivery, unless otherwise agreed
by the Custodian and the Fund in writing; (c) Appendix "B" listing Foreign
Subcustodians and Special Subcustodians approved by the Fund may be amended
from time to time to add or delete one or more Foreign Subcustodians or
Special Subcustodians by the Fund's execution and delivery to the Custodian
of an amended Appendix "B", in which case such amendment shall take effect
immediately upon execution by the Custodian; and (d) Appendix "C" setting
forth the procedures relating to the Custodian's security interest may be
amended only by an instrument in writing executed by the Fund and the
Custodian.
Section 9.07. Interpretation. In connection with the operation of this
Agreement, the Custodian and the Fund may agree in writing from time to
time on such provisions interpretative of or in addition to the provisions
of this Agreement as may in their joint opinion be consistent with the
general tenor of this Agreement. No interpretative or additional
provisions made as provided in the preceding sentence shall be deemed to be
an amendment of this Agreement.
Section 9.08. Captions. Headings contained in this Agreement, which are
included as convenient references only, shall have no bearing upon the
interpretation of the terms of the Agreement or the obligations of the
parties hereto.
Section 9.09. Governing Law. Insofar as any question or dispute may
arise in connection with the custodianship of foreign securities pursuant
to an agreement with a Foreign Subcustodian that is governed by the laws of
the State of New York, the provisions of this Agreement shall be construed
in accordance with and governed by the laws of the State of New York,
provided that in all other instances this Agreement shall be construed in
accordance with and governed by the laws of the Commonwealth of
Massachusetts, in each case without giving effect to principles of
conflicts of law.
Section 9.10. Notices. Except in the case of Proper Instructions or
Special Instructions, notices and other writings contemplated by this
Agreement shall be delivered by hand or by facsimile transmission (provided
that in the case of delivery by facsimile transmission, notice shall also
be mailed postage prepaid to the parties at the following addresses:
(a) If to the Fund:
c/o Fidelity Management & Research Company
82 Devonshire Street
Boston, Massachusetts 02109
Attn: Gary L. French
Telephone: (617) 570-6556
Telefax: (617) 742-1231
(b) If to the Custodian:
c/o United Missouri Bank, N.A.
928 Grand Avenue, P.O. Box 419226
Kansas City, Missouri 64141-6226
Attn: Ralph Santoro
Telephone: (816) 860-7000
or to such other address as either party may have designated in writing to
the other party hereto.
Section 9.11. Assignment. This Agreement shall be binding on and shall
inure to the benefit of the Fund and the Custodian and their respective
successors and assigns, provided that, subject to the provisions of Section
7.01 hereof, neither party hereto may assign this Agreement or any of its
rights or obligations hereunder without the prior written consent of the
other party.
Section 9.12. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original. This Agreement
shall become effective when one or more counterparts have been signed and
delivered by each of the parties.
Section 9.13. Confidentiality; Survival of Obligations. The parties
hereto agree that each shall treat confidentially the terms and conditions
of this Agreement and all information provided by each party to the other
regarding its business and operations. All confidential information
provided by a party hereto shall be used by any other party hereto solely
for the purpose of rendering services pursuant to this Agreement and,
except as may be required in carrying out this Agreement, shall not be
disclosed to any third party without the prior consent of such providing
party. The foregoing shall not be applicable to any information that is
publicly available when provided or thereafter becomes publicly available
other than through a breach of this Agreement, or that is required to be
disclosed by any bank examiner of the Custodian or any Subcustodian, any
auditor of the parties hereto, by judicial or administrative process or
otherwise by applicable law or regulation. The provisions of this Section
9.13 and Sections 9.01, 9.02, 9.03, 9.09, Section 2.28, Section 3.04,
Section 7.01, Article V and Article VI hereof and any other rights or
obligations incurred or accrued by any party hereto prior to termination of
this Agreement shall survive any termination of this Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed in its name and behalf on the day and year first above written.
DAILY MONEY FUND UNITED MISSOURI BANK, N.A.
By: /s/ Gary French By: /s/ Diane E. Schompp
Name: Gary French Name: _______________________
Title: Treasurer Title: Vice President
APPENDIX "C" TO THE
CUSTODIAN AGREEMENT BETWEEN
DAILY MONEY FUND AND UNITED MISSOURI BANK, N.A.
Dated as of September 30, 1993
PROCEDURES RELATING TO CUSTODIAN'S SECURITY INTEREST
As security for any Overdrafts (as defined in the Custodian Agreement) of
any Portfolio, the Fund, on behalf of such Portfolio, shall pledge, assign
and grant to the Custodian a security interest in Collateral (as
hereinafter defined), under the terms, circumstances and conditions set
forth in this Appendix "C".
Section 1. Defined Terms. As used in this Appendix "C" the following
terms shall have the following respective meanings:
(a) "Business Day" shall mean any day that is not a Saturday, a Sunday or
a day on which the Custodian is closed for business.
(b) "Collateral" shall mean, with respect to any Portfolio, the securities
having a fair market value (as determined in accordance with the procedures
set forth in the prospectus for the Portfolio) equal to the aggregate of
all Overdraft Obligations of such Portfolio: (i) identified in any Pledge
Certificate executed on behalf of such Portfolio; or (ii) designated by the
Custodian for such Portfolio pursuant to Section 3 of this Appendix C.
Such securities shall consist of marketable securities held by the
Custodian on behalf of such Portfolio or, if no such marketable securities
are held by the Custodian on behalf of such Portfolio, such other
securities designated by the Fund in the applicable Pledge Certificate or
by the Custodian pursuant to Section 3 of this Appendix C.
(c) "Overdraft Obligations" shall mean, with respect to any Portfolio, the
amount of any outstanding Overdraft(s) provided by the Custodian to such
Portfolio together with all accrued interest thereon.
(d) "Pledge Certificate" shall mean a Pledge Certificate in the form
attached to this Appendix "C" as Schedule 1 executed by a duly authorized
officer of the Fund and delivered by the Fund to the Custodian by facsimile
transmission or in such other manner as the Fund and the Custodian may
agree in writing.
(e) "Release Certificate" shall mean a Release Certificate in the form
attached to this Appendix "C" as Schedule 2 executed by a duly authorized
officer of the Custodian and delivered by the Custodian to the Fund by
facsimile transmission or in such other manner as the Fund and the
Custodian may agree in writing.
(f) "Written Notice" shall mean a written notice executed by a duly
authorized officer of the party delivering the notice and delivered by
facsimile transmission or in such other manner as the Fund and the
Custodian shall agree in writing.
Section 2. Pledge of Collateral. To the extent that any Overdraft
Obligations of any Portfolio are not satisfied within one (1) Business Day
after receipt by the Fund of a Written Notice requesting security for such
Overdraft Obligation and stating the amount of such Overdraft Obligation,
the Fund, on behalf of such Portfolio, shall pledge, assign and grant to
the Custodian a first priority security interest, by delivering to the
Custodian, a Pledge Certificate executed by the Fund on behalf of such
Portfolio describing the applicable Collateral. Such Written Notice may,
in the discretion of the Custodian, be included within or accompany the
Overdraft Notice relating to the applicable Overdraft Obligations.
Section 3. Failure to Pledge Collateral. In the event that the Fund
shall fail: (a) to pay, on behalf of the applicable Portfolio, the
Overdraft Obligation described in such Written Notice; (b) to deliver to
the Custodian a Pledge Certificate pursuant to Section 2; or (c) to
identify substitute securities pursuant to Section 6 upon the sale or
maturity of any securities identified as Collateral, the Custodian may, by
Written Notice to the Fund specify Collateral which shall secure the
applicable Overdraft Obligation. The Fund, on behalf of any applicable
Portfolio, hereby pledges, assigns and grants to the Custodian a first
priority security interest in any and all Collateral specified in such
Written Notice; provided that such pledge, assignment and grant of security
shall be deemed to be effective only upon receipt by the Fund of such
Written Notice.
Section 4. Delivery of Additional Collateral. If at any time the
Custodian shall notify the Fund by Written Notice that the fair market
value of the Collateral securing any Overdraft Obligation is less than the
amount of such Overdraft Obligation, the Fund, on behalf of the applicable
Portfolio, shall deliver to the Custodian, within one (1) Business Day
following the Fund's receipt of such Written Notice, an additional Pledge
Certificate describing additional Collateral. If the Fund shall fail to
deliver such additional Pledge Certificate, the Custodian may specify
Collateral which shall secure the unsecured amount of the applicable
Overdraft Obligation in accordance with Section 3 of this Appendix C.
Section 5. Release of Collateral. Upon payment by the Fund of any
Overdraft Obligation secured by the pledge of Collateral, the Custodian
shall promptly deliver to the Fund a Release Certificate pursuant to which
the Custodian shall release Collateral from the lien under the applicable
Pledge Certificate or Written Notice pursuant to Section 3 having a fair
market value equal to the amount paid by the Fund on account of such
Overdraft Obligation. In addition, if at any time the Fund shall notify
the Custodian by Written Notice that the Fund desires that specified
Collateral be released and: (a) that the fair market value of the
Collateral securing any Overdraft Obligation shall exceed the amount of
such Overdraft Obligation; or (b) that the Fund has delivered a Pledge
Certificate substituting Collateral for such Overdraft Obligation, the
Custodian shall deliver to the Fund, within one (1) Business Day following
the Custodian's receipt of such Written Notice, a Release Certificate
relating to the Collateral specified in such Written Notice.
Section 6. Substitution of Collateral. The Fund may substitute
securities for any securities identified as Collateral by delivery to the
Custodian of a Pledge Certificate executed by the Fund on behalf of the
applicable Portfolio, indicating the securities pledged as Collateral.
Section 7. Security for Individual Portfolios' Overdraft Obligations.
The pledge of Collateral by the Fund on behalf of any individual Portfolio
shall secure only the Overdraft Obligations of such Portfolio. In no event
shall the pledge of Collateral by one Portfolio be deemed or considered to
be security for the Overdraft Obligations of any other Portfolio.
Section 8. Custodian's Remedies. Upon (a) the Fund's failure to pay any
Overdraft Obligation of a Portfolio within thirty (30) days after receipt
by the Fund of a Written Notice demanding security therefore, and (b) one
(1) Business Day's prior Written Notice to the Fund, the Custodian may
elect to enforce its security interest in the Collateral securing such
Overdraft Obligation, by taking title to (at the then prevailing fair
market value), or selling in a commercially reasonable manner, so much of
the Collateral as shall be required to pay such Overdraft Obligation in
full. Notwithstanding the provisions of any applicable law, including,
without limitation, the Uniform Commercial Code, the remedy set forth in
the preceding sentence shall be the only right or remedy to which the
Custodian is entitled with respect to the pledge and security interest
granted pursuant to any Pledge Certificate or Section 3, without limiting
the foregoing, the Custodian hereby waives and relinquishes all contractual
and common law rights of set off to which it may now or hereafter be or
become entitled with respect to any obligations of the Fund to the
Custodian arising under this Appendix C to the Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Appendix to be
executed in its name and behalf on the day and year first above written.
DAILY MONEY FUND UNITED MISSOURI BANK, N.A.
By: /s/ Gary French By: /s/ Dianne E. Schempp
Name: Gary French Name: ______________________
Title: Treasurer Title: Vice President
SCHEDULE 1
TO
APPENDIX "C"
PLEDGE CERTIFICATE
This Pledge Certificate is delivered pursuant to the Custodian Agreement
dated as of September 30, 1993 (the "Agreement"), between Daily Money Fund
(the "Fund") and United Missouri Bank, N.A. (the "Custodian").
Capitalized terms used herein without definition shall have the respective
meanings ascribed to them in the Agreement. Pursuant to [Section 2 or
Section 4] of Appendix "C" attached to the Agreement, the Fund, on behalf
of [ ] (the "Portfolio"), hereby pledges, assigns and grants to the
Custodian a first priority security interest in the securities listed on
Exhibit "A" attached to this Pledge Certificate (collectively, the "Pledged
Securities"). Upon delivery of this Pledge Certificate, the Pledged
Securities shall constitute Collateral, and shall secure all Overdraft
Obligations of the Portfolio described in that certain Written Notice dated
, 19 , delivered by the Custodian to the Fund. The pledge,
assignment and grant of security in the Pledged Securities hereunder shall
be subject in all respect to the terms and conditions of the Agreement,
including, without limitation, Sections 7 and 8 of Appendix "C" attached
thereto.
IN WITNESS WHEREOF, the Fund has caused this Pledge Certificate to be
executed in its name, on behalf of the Portfolio this day of 19 .
DAILY MONEY FUND
By: /s/ Gary French
Name: ___________________
Title: Vice President
EXHIBIT "A"
TO
PLEDGE CERTIFICATE
Type of Certificate/CUSIP Number of
Issuer Security Numbers Shares
SCHEDULE 2
TO
APPENDIX "C"
RELEASE CERTIFICATE
This Release Certificate is delivered pursuant to the Custodian Agreement
dated as of September 30, 1993 (the "Agreement"), between Daily Money Fund
(the "Fund") and United Missouri Bank, N.A. (the "Custodian"). Capitalized
terms used herein without definition shall have the respective meanings
ascribed to them in the Agreement. Pursuant to Section 5 of Appendix "C"
attached to the Agreement, the Custodian hereby releases the securities
listed on Exhibit "A" attached to this Release Certificate from the lien
under the [Pledge Certificate dated , 19 or the Written Notice
delivered pursuant to Section 3 of Appendix "C" dated , 19 ].
IN WITNESS WHEREOF, the Custodian has caused this Release Certificate to
be executed in its name and on its behalf this day of 19 .
UNITED MISSOURI BANK, N.A.
By: /s/ Diane E. Shempp
Name: _____________________
Title: Vice President
EXHIBIT "A"
TO
RELEASE CERTIFICATE
Type of Certificate/CUSIP Number of
Issuer Security Numbers Shares
{filename |DOCUMENT.02} -{PAGE|1}-
DAILY MONEY FUND
AMENDED TRANSFER AGENT AGREEMENT WITH
FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS COMPANY
Required authorizations and approvals having been obtained, amendment in
its entirety is hereby made this 30th day of September, 1993 by and between
FMR Corp., a Massachusetts corporation, and its division, Fidelity
Investments Institutional Operations Company ("FIIOC"), and Daily Money
Fund (the "Fund"), a Delaware business trust which may issue one or more
series of shares of beneficial interest ("Portfolio(s)") all with principal
offices at 82 Devonshire Street, Boston, Massachusetts, of the existing
Transfer Agent Agreement with FMR Corp. and FIIOC, as set forth below.
Reference to the Fund, when applicable to one or more Portfolios of the
Fund, shall refer to any such Portfolio;
1. Appointments. The Fund hereby appoints and employs FIIOC as agent to
provide those services described in the schedules attached to this
Agreement for each of the Portfolio(s) of the Fund upon notice in writing
that a Portfolio requests such services. FIIOC shall perform the
obligations and the services set forth in the attached schedules upon the
terms and conditions hereinafter set forth.
2. Documents. The Fund has furnished FIIOC copies of the Fund's Trust
Instrument, Bylaws, Advisory and Service or Management Contract, Custodian
Contract, current prospectus and Statement of Additional Information (the
"Prospectus"), any other governing documents and all forms relating to any
plan, program or service offered by the Fund. The Fund shall furnish
promptly to FIIOC a copy of any amendment or supplement to the
above-mentioned documents. The Fund shall furnish to FIIOC any additional
documents requested by it as necessary for it to perform the services
required hereunder.
3. Services to be Performed. FIIOC shall be responsible for performing
as agent, as of the date of this Agreement, the services described in the
following schedules attached hereto and made a part hereof, as said
schedules may be amended from time to time:
Schedule A: Transfer agent, dividend and distribution disbursing agent,
and shareholders' servicing agent.
Operating procedures and standards to be followed for each function may be
established from time to time by agreement between the Fund and FIIOC. The
above schedules may be amended or deleted, or additional schedules may be
included, as deemed necessary from time to time by agreement between the
Fund and FIIOC. Deletion of any schedule shall be in accordance with the
termination provisions of Section 15 of this Agreement. Each schedule and
any amendments thereto shall be dated and signed by the parties to this
Agreement.
4. Record Keeping and Other Information. FIIOC shall create and maintain
all records required by all applicable laws, rules and regulations relating
to the services to be performed as set forth in the schedules attached
hereto, including but not limited to records required by Section 31(a) of
the Investment Company Act of 1940 and the Rules thereunder, as the same
may be amended from time to time. All records shall be the property of the
Fund and shall be available for inspection and use by the Fund at all
times. Where applicable, such records shall be maintained by FIIOC for the
periods and in the places required by Rule 31a-2 under the Investment
Company Act of 1940.
5. Audits, Inspections and Visits. FIIOC shall make available during
regular business hours all records and other data created and maintained
pursuant to this Agreement for reasonable audit and inspection by the Fund,
any agent or person designated by the Fund, or any regulatory agency having
authority over the Fund. Upon reasonable notice by the Fund, FIIOC shall
make available during regular business hours its facilities and premises
employed in connection with its performance of this Agreement for
reasonable visits by the Fund, any agent or person designated by the Fund,
or any regulatory agency having authority over the Fund.
6. Compensation. For the performance of its obligations hereunder, the
Fund shall pay FIIOC in accordance with the fee arrangements described in
each schedule attached hereto.
7. Appointment of Agents. FIIOC, at its expense, may at any time or times
in its discretion appoint (and may at any time remove) one or more other
parties as Agent to perform any or all of the services specified hereunder
and carry out such provisions of this Agreement as FIIOC may from time to
time direct; provided, however, that the appointment of any such Agent
shall not relieve FIIOC of any of its responsibilities or liabilities
hereunder.
8. Use of FIIOC's Name. The Fund shall not use the name of FIIOC in any
Prospectus, sales literature or other material relating to the Fund in a
manner not consented to prior to use; provided, however, that FIIOC shall
approve all uses of its name which merely refer in accurate terms to its
appointments, duties or fees hereunder or which are required by the
Securities and Exchange Commission or a state securities commission; and
further provided, that in no event shall such approval be unreasonably
withheld.
9. Use of Fund's Name. FIIOC shall not use the name of the Fund or
material relating to the Fund on any forms (including any checks, bank
drafts or bank statements) for other than internal use in a manner not
consented to prior to use, provided, however, that the Fund shall approve
all uses of its name which merely refer in accurate terms to the
appointment of FIIOC hereunder or which are required by the Securities and
Exchange Commission or a state securities commission; and further, provided
that in no event shall such approval be unreasonably withheld.
10. Security. FIIOC represents and warrants that, to the best of its
knowledge, the various procedures and systems which FIIOC has implemented
with regard to the safeguarding from loss or damage attributable to fire,
theft or any other cause (including provision for twenty-four hours a day
restricted access) of the Fund's blank checks, certificates, records and
other data and FIIOC's records, data, equipment, facilities and other
property used in the performance of its obligations hereunder are adequate,
and that it will make such changes therein from time to time as in its
judgment are required for the secure performance of its obligations
hereunder. FIIOC shall review such systems and procedures on a periodic
basis and the Fund shall have access to review these systems and
procedures.
11. Insurance. FIIOC shall maintain insurance of the types and in the
amounts deemed by it to be appropriate and shall notify the Fund should any
of its insurance coverage be changed for any reason. Such notification
shall include the date of change and the reason or reasons therefor. FIIOC
shall notify the Fund of any material claims against FIIOC, whether or not
they may be covered by insurance, and shall notify the Fund from time to
time as may be appropriate of the total outstanding claims made by FIIOC
under its insurance coverage. To the extent that policies of insurance may
provide for coverage of claims for liability or indemnity by the parties
set forth in this Agreement, the contracts of insurance shall take
precedence, and no provision of this Agreement shall be construed to
relieve an insurer of any obligation to pay claims to the Fund, FIIOC or
other insured party which would otherwise be a covered claim in the absence
of any provision of this Agreement.
12. Indemnification.
A. The Fund shall indemnify and hold FIIOC harmless against any losses,
claims, damages, liabilities or expenses (including reasonable counsel fees
and expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other than
the Fund, including by a shareholder, which names FIIOC and/or the Fund as
a party and is not based on and does not result from FIIOC's willful
misfeasance, bad faith or negligence or reckless disregard of duties, and
arises out of or in connection with FIIOC's performance hereunder; or
(2) any claim, demand, action or suit (except to the extent contributed
to by FIIOC's willful misfeasance, bad faith or negligence or reckless
disregard of duties) which results from the negligence of the Fund, or from
FIIOC's acting upon any instruction(s) reasonably believed by it to have
been executed or communicated by any person duly authorized by the Fund, or
as a result of FIIOC's acting in reliance upon advice reasonably believed
by FIIOC to have been given by counsel for the Fund, or as a result of
FIIOC's acting in reliance upon any instrument or stock certificate
reasonably believed by it to have been genuine and signed, countersigned or
executed by the proper person.
B. FIIOC shall indemnify and hold the Fund harmless against any losses,
claims, damages, liabilities or expenses (including reasonable counsel fees
and expenses) resulting from any claim, demand, action or suit brought by
any person other than FIIOC, which names the Fund and/or FIIOC as a party
and is based upon and arises out of acts, errors or omissions of FIIOC
constituting negligence, lack of good faith or willful misconduct in the
performance of FIIOC's duties under this Agreement.
In the event that either party requests the other to indemnify or hold it
harmless hereunder, the party requesting indemnification (the "Indemnified
Party") shall inform the other party (the "Indemnifying Party") of the
relevant facts known to Indemnified Party concerning the matter in
question. The Indemnified Party shall use reasonable care to identify and
promptly to notify the Indemnifying Party concerning any matter which
presents, or appears likely to present, a claim for indemnification. The
Indemnifying Party shall have the election of defending the Indemnified
Party against any claim which may be the subject of indemnification or of
holding the Indemnified Party harmless hereunder. In the event the
Indemnifying Party so elects, it will so notify the Indemnified Party and
thereupon the Indemnifying Party shall take over defense of the claim and,
if so requested by the Indemnifying Party, the Indemnified Party shall
incur no further legal or other expenses related thereto for which it shall
be entitled to indemnity or to being held harmless hereunder; provided,
however, that nothing herein shall prevent the Indemnified Party from
retaining counsel at its own expense to defend any claim. Except with the
Indemnifying Party's prior written consent, the Indemnified Party shall in
no event confess any claim or make any compromise in any matter in which
the Indemnifying Party will be asked to indemnify or hold Indemnified Party
harmless hereunder.
13. Acts of God, etc. FIIOC shall not be liable for delays or errors
occurring by reason of circumstances beyond its control, including but not
limited to acts of civil or military authority, national emergencies, work
stoppages, fire, flood, catastrophe, acts of God, insurrection, war, riot,
or failure of communication equipment of common carriers or power supply.
In the event of equipment breakdowns beyond its control, FIIOC shall, at no
additional expense to the Fund, take reasonable steps to minimize service
interruptions and mitigate their effects but shall have no liability with
respect thereto. FIIOC shall enter into and shall maintain in effect with
appropriate parties one or more agreements making reasonable provision for
emergency use of electronic data processing equipment.
14. Amendments. FIIOC and the Fund shall regularly consult with each
other regarding FIIOC's performance of its obligations and its compensation
hereunder. In connection therewith, the Fund shall submit to FIIOC at a
reasonable time in advance of filing with the Securities and Exchange
Commission copies of any amended or supplemented registration statements
(including exhibits) under the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, and, a reasonable time in
advance of their proposed use, copies of any amended or supplemented forms
relating to any plan, program or service offered by the Fund. Any change
in such material which would require any change in FIIOC's obligations
hereunder shall be subject to FIIOC's approval, which shall not be
unreasonably withheld. In the event that a change in such documents or in
the procedures contained therein materially increases the cost to FIIOC of
performing its obligations hereunder, FIIOC shall be entitled to receive
reasonable compensation therefor.
15. Duration, Termination, etc. Neither this Agreement nor any
provisions hereof may be changed, waived, discharged or terminated orally,
but only by written instrument which shall make specific reference to this
Agreement and which shall be signed by the party against which enforcement
of such change, waiver, discharge or termination is sought.
This Agreement shall continue in effect until December 31, 1994 and
indefinitely thereafter so long as such continuance is approved at least
annually by vote of the Fund's Board of Trustees; provided, however, that
this Agreement may be terminated at any time by six months' written notice
given by FIIOC to the Fund or six months' written notice given by the Fund
to FIIOC; and provided further that this Agreement may be terminated
immediately at any time for cause either by the Fund or by FIIOC in the
event that such cause remains unremedied for a reasonable period of time
not to exceed ninety days after receipt of written specification of such
cause. Any such termination shall not affect the rights and obligations of
the parties under paragraph 12 hereof.
Upon the termination hereof, the Fund shall pay to FIIOC such compensation
as may be due for the period prior to the date of such termination. In the
event that the Fund designates a successor to any of FIIOC's obligations
hereunder, FIIOC shall, at the expense and direction of the Fund, transfer
to such successor all relevant books, records and other data established or
maintained by FIIOC hereunder (including, if FIIOC has been acting as
Transfer Agent, a certified list of the shareholders of the Fund with name,
address, and, if provided, taxpayer identification or Social Security
number, and a complete record of the account of each shareholder). To the
extent that FIIOC incurs expenses related to a transfer of responsibilities
to a successor, FIIOC shall be entitled to be reimbursed for such expenses,
including any out-of-pocket expenses reasonably incurred by FIIOC in
connection with the transfer.
16. Shareholder Liability. FMR Corp. and FIIOC are hereby expressly put
on notice of the limitation of shareholder liability as set forth in the
Trust Instrument of the Fund and agree that obligations assumed by the Fund
pursuant to this Agreement shall be limited in all cases to the Portfolio
and its assets. FMR Corp. and FIIOC agree that they shall not seek
satisfaction of any such obligation from the shareholders or any individual
shareholder of the Fund, nor from the Trustees or any individual Trustee of
the Fund.
17. Miscellaneous. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed and enforced in accordance with
and governed by the laws of the Commonwealth of Massachusetts. The
captions in this Agreement are included for convenience of reference only
and in no way define or delimit any of the provisions hereof or otherwise
affect their construction or effect. This Agreement may be executed
simultaneously in two counterparts, each of which taken together shall
constitute one and the same instrument. FMR Corp. and Service understand
that the rights and obligations of each Portfolio under the Trust
Instrument are separate and distinct from those of any and all other
Portfolios.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
FMR CORP.
By /s/ Denis M. McCarthy
Treasurer
FIDELITY INVESTMENTS INSTITUTIONAL
OPERATIONS COMPANY
By Virginia M. Meany
President
DAILY MONEY FUND
By Gary French
Treasurer
LG932460040
- -6-
Dated as of September 30, 1993
Daily Money Fund:
Capital Reserves: Money Market Portfolio (the Portfolio)
SCHEDULE A: TRANSFER AGENT, DIVIDEND AND DISTRIBUTION DISBURSING AGENT,
AND SHAREHOLDER SERVICING AGENT
I. Services To Be Performed: Fidelity Investments Institutional Operations
Company, a division of FMR Corp. (FIIOC) shall be responsible for the
following:
A. FIIOC shall administer and/or perform transfer agent functions for the
Portfolio. It will:
(1) receive for acceptance, orders for the purchase of Portfolio shares,
and promptly deliver payments received by it and appropriate documentation
therefor to the Portfolio's custodian;
(2) pursuant to purchase orders, issue the appropriate number of Portfolio
shares and properly register such shares to the appropriate shareholder
account;
(3) receive for acceptance, redemption requests and redemption instructions
(including redemptions by check transmitted to FIIOC by any duly appointed
check processing agent) and process payments for redemption to shareholders
in accordance with the terms, conditions and rules governing each
shareholder's account as set forth in the Portfolio's prospectus, statement
of additional information and each shareholder's account application;
(4) effect transfers of shares by the registered owners thereof upon
receipt of appropriate instructions; and
(5) prepare and mail to Portfolio shareholders such confirmations and
statements of account as may be required under applicable law and as may be
reasonably requested by the Portfolio.
B. FIIOC shall act as service agent of the Portfolio in connection with
dividend and capital gains distributions by the Portfolio. It will:
(1) for each Portfolio shareholder who has elected to receive dividends
and/or distributions in cash, send payments to shareholders in accordance
with the shareholder's election; and
(2) for each Portfolio shareholder who has elected to receive dividends
and/or distributions in shares of the Portfolio or in shares of another
mutual fund for which FIIOC serves as transfer agent, credit the
shareholder's account(s) for the proper number of shares.
C. In addition to the foregoing services, FIIOC shall:
(1) perform all the customary administrative services related to its
transfer agent and dividend and distribution disbursing agent functions,
including, but not limited to:
(a) maintaining all shareholder accounts,
(b) preparing shareholder meeting lists, and supervising, but not paying
for, various agents and contractors employed to mail proxy materials and
receive and tabulate proxies,
(c) typesetting, printing and mailing shareholder reports and prospectuses
to current Portfolio shareholders,
(d) withholding taxes (including withholding for foreign taxes) for
shareholders for whom withholdings are required by federal or state
regulation and filing all required reports with respect thereto,
(e) preparing, distributing and filing all requisite shareholder tax
statements on appropriate forms and responding to inquiries with respect
thereto, and
(f) establishing and supervising the operation of bank accounts for the
receipt of funds for share purchases and the payment of dividends,
distributions and redemption proceeds;
(2) furnish the Portfolio with all necessary reports of Portfolio shares
sold in each state in order to permit compliance with the state securities
laws; and
(3) as required, respond to shareholder inquiries relating to the status of
their accounts, Portfolio performance, distributions, and share price, and
furnish shareholders with copies of account histories and make adjustments
to shareholder accounts to correct account files.
II. Compensation: For the performance of its obligations hereunder, the
Portfolio shall pay FIIOC in accordance with this Schedule A.
A. Certain Defined Terms
For purposes of this Schedule A, the following terms shall have the
meanings indicated:
An "account" shall mean each and every account or subaccount of a
Portfolio shareholder of record maintained on a transfer agency system by
FIIOC or on a transfer agency system operated by divisions and subsidiaries
of FMR Corp. or any other entity to whom FIIOC has delegated all or a
portion of its duties under this Schedule A such term shall not include an
account maintained on any subaccounting system operated by broker, bank or
other intermediary who is acting on behalf of its customer and who is not
acting pursuant to a delegation of duties by FIIOC.
"Basic Retail Account" shall mean any account of the Portfolio other than
a USA Account, an Institutional Trading Account, a Broker-Dealer Trading
Account or an Institutional Employee Benefit Account.
"Broker-Dealer Trading Account" shall mean any account of the Portfolio
maintained on behalf of a broker-dealer (other than broker-dealer
affiliates of FMR) or its clients.
"Centralized Service Transaction" shall mean each monetary transaction
described in Exhibit A to this Schedule A executed on behalf of an
institutional customer (such as a bank trust department, corporation or
investment adviser), or its clients who has no remote system access and for
whom FIIOC inputs all account activity information and performs all account
maintenance functions.
"Institutional Employee Benefit Account" shall mean an account of the
Portfolio maintained on behalf of a corporation, association, partnership
or other employer for the benefit of employees, by which employer and
employee contributions are invested in the Portfolio as part of a qualified
or non-qualified employee benefit plan primarily through payroll
deductions.
"Institutional Trading Account" shall mean any account maintained on
behalf of an institutional client (such as a bank, institutional advisor,
insurance company or law firm), other than a broker-dealer or its clients.
"Remote Service Transaction" shall mean each monetary transaction
described in Exhibit A-1 to the Schedule A executed on behalf of an
institutional customer (such as a bank, investment adviser, insurance
company or law firm), or its clients, who utilizes remote system access
equipment to input account activity information and to perform account
maintenance functions.
"USA Account" shall mean any account of the Portfolio established as the
core feature under the Fidelity USA Program, into which brokerage account
cash balances may be swept and from which brokerage account, credit card
and check debits may be satisfied.
B. Schedule of Account and Transaction Fees
(1) Basic Retail Accounts
(a) Account Fees - The Portfolio shall pay an account fee at the annual
rates (adjusted in accordance with the procedures set forth in II.C.(1)(a)
and (c) below) of $10.00 for Basic Retail Accounts with a value of less
than $5,000 and $13.75 for Basic Retail Accounts with a value of $5,000 or
more (the "December 31, 1992 Retail Account Fee Rates").
(b) Transaction Fees - For all Basic Retail Accounts the Portfolio shall
pay a fee (adjusted in accordance with the procedures set forth in
II.C.(1)(a) and (c) below) of $5.61 for each transaction described in
Exhibit A-1 to this Schedule A (the "December 31, 1992 Retail Transaction
Fee Rate").
(2) USA Accounts
(a) Account Fees - The Portfolio shall pay an account fee, in lieu of the
fees set forth in II.B.(1)(a), at the annual rate (adjusted in accordance
with the procedures set forth in II.C.(1)(b) and (c) below) of $12.35 for
each USA Account (the "December 31, 1992 Account Fee Rate").
(b) Transaction Fees - For all USA Accounts the Portfolio shall pay a fee
(adjusted in accordance with the procedures set forth in II.C.(1)(b)
below), in lieu of the fees set forth in II.B.(1)(b), of $0.74 for each
transaction described in Exhibit A-2 to this Schedule A (the "December 31,
1992 USA Transaction Fee Rate").
(c) Shareholder Service Fees - The foregoing Account Fees and Transactions
Fees, shall be in addition to, and not be reduced by, the fees charged to
shareholders directly for participating in the Fidelity USA program.
(3) Institutional Trading Accounts
(a) Account Fees - The Portfolio shall pay an account fee, in lieu of the
fees set forth in II.B.(1)(a) at the annual rate of $95.00 for each
Institutional Trading Account.
(b) Transaction Fees - The Portfolio shall pay a fee, in lieu of the fees
set forth in II.B.(1)(b), of $20.00 for each Centralized Service
Transaction and $17.50 for each Remote Service Transaction of such
Institutional Trading Account.
(4) Broker-Dealer Trading Accounts
(a) Account Fees - The Portfolio shall pay an account fee, in lieu of the
fees set forth in II.B.(1)(a), at the annual rate of $30.00 for each
Broker-Dealer Institutional Trading Account.
(b) Transaction Fees - The Portfolio shall pay a fee, in lieu of the fees
set forth in II.B.(1)(b) of $6.00 for each Centralized Service Transaction
and each Remote Service Transaction of such Broker-Dealer Institutional
Trading Account.
(5) Institutional Employee Benefit Plan Accounts - The Portfolio shall pay
a fee, in lieu of the fees set forth in II.B.(1), based upon the month end
value of all Institutional Employee Benefit Plan Accounts at an annual rate
of 0.30%.
C. Rate Changes
(1) Basic Retail Account and USA Account Rate Adjustments
(a) Annual Cost of Living Adjustment for Basic Retail Accounts - The
December 31, 1992 Retail Account Fee Rates and Retail Transaction Fee Rates
set forth in II.B.(1) of this Schedule A shall be adjusted annually for
increases in the cost of living as of the first day of January. On each
January 1, beginning January 1, 1994, the rates shall be adjusted by
multiplying 70% of the percentage change in the National Consumer Price
Index for Urban Areas Index (the Index) for the preceding calendar year
times the rates in effect for the preceding calendar year and adding the
results to the respective rates for the preceding calendar year to
determine the then current rate for the ensuing calendar year. Each
adjustment shall be rounded to the nearest one cent.
SAMPLE CALCULATION: Assuming the December 31, 1992 Retail Account Rate was
$7.00 and the December 31, 1992 Retail Transaction Fee Rate was $5.00, that
the Index reported a change in wage and price levels for the 12 months
ended December 31, 1993 of 5%, then the adjusted rates for the period
beginning January 1, 1994 would be calculated as follows:
Basic Retail Account Fee Rate Computation:
70% x 5% x $7.00 = $ .25
Add 7.00
1994 Basic Retail Account Fee $ 7.25
Basic Retail Transaction Fee Rate Computation:
70% x 5% x $5.00 = $ .18
Add 5.00
1994 Basic Retail Transaction Fee $ 5.18
(b) Annual Cost of Living Adjustment for USA Accounts - The December 31,
1992 USA Account Fee Rate and USA Transaction Fee Rate set forth in
II.B.(2) of this Schedule A shall be adjusted annually for increases in the
cost of living as of the first day of January. On each January 1,
beginning January 1, 1994, the rates shall be adjusted by multiplying 70%
of the percentage change in the Index for the preceding calendar year times
the rates in effect for the preceding calendar year and adding the results
to the respective rates for the preceding calendar year to determine the
then current rate for the ensuing calendar year.
SAMPLE CALCULATION: Assuming the December 31, 1992 USA Account Rate was
$11.00 and the December 31, 1992 USA Transaction Fee Rate was $.65, that
the Index reported a change in wage and price levels for the 12 months
ended December 31, 1993 of 5%, then the adjusted rates for the period
beginning January 1, 1994 would be calculated as follows:
USA Account Fee Rate Computation:
70% x 5% x $11.00 = $ .39
Add 11.00
1994 USA Account Fee $ 11.39
USA Transaction Fee Rate Computation:
70% x 5% x $0.65 = $ .02
Add .65
1994 USA Transaction Fee $ 0.67
(c) Postal Rate Changes - On the first day of any month following the
month in which the United States Postal Service implements a postal rate
increase, or if the increase is effective with the first day of a month,
then commencing on that first day, (Effective Date) the Account Fees and
Transaction Fees for Basic Retail Accounts and USA Accounts then in effect
shall be adjusted by a Postage Increase Factor (PIF). The PIF adjustment
shall be computed in the following fashion. The Account Fees and the
Transaction Fees for Basic Retail Accounts and USA Accounts then in effect
shall each be multiplied by the PIF and the resulting amounts shall be
added to the respective current rates. The PIF shall be determined by
dividing the revenues derived from the Account Fees and Transaction Fees
for Basic Retail Accounts and USA Accounts for the 12 months preceding the
Effective Date of the postal rate increase into the postal costs associated
with Basic Retail Accounts and with USA Accounts, respectively, for the
same 12-month period and then multiplying the result times a Class Cost
Factor. The Class Cost Factor shall be derived by calculating the dollar
weighted postage increase for all classes of postage being utilized to
perform services to Basic Retail Accounts and to USA Accounts,
respectively. The dollar-weighted postage increase shall be calculated by
multiplying the percentage increase for each class by the postal costs for
each such class and dividing the sum of such calculations by the total
postage costs for the 12 months preceding the Effective Date. Each
adjustment should be rounded to the nearest one cent.
SAMPLE CALCULATION: Postal rate adjustments would be calculated for
Account Fees and Transaction Fees for Basic Retail Accounts and USA
Accounts in the example set forth below for Basic Retail Accounts, assuming
(a) that on May 31 prior to the implementation of a postal rate increase,
the annual rate for Basic Retail Account Fees is $7.00 and the Transaction
Fee rate is $5.00, (b) that for the previous 12 months the revenues from
such fees are $10 million, and (c) that there were following three classes
of Basic Retail Account postage costs for the same period and the following
increases occur on June 1:
Postage 12 months of Postage Rate
Class Postage Cost Increases
1st $400,000 6%
2nd $100,000 9%
3rd $200,000 11%
STEP 1: CALCULATION OF THE DOLLAR-WEIGHTED POSTAGE INCREASE.
$400,000 x 6% = $ 24,000
$100,000 x 9% = 9,000
$200,000 x 11% = 22,000
$ 55,000
divided by total postage costs $700,000
Class Cost Factor .0785
STEP 2: CALCULATION OF POSTAGE INCREASE FACTOR (PIF).
12 month postage costs $700,000
divided by 12 month revenues 10,000,000
.07
multiplied by the Class Cost Factor .0785
PIF .0055
STEP 3: CALCULATION OF JUNE 1 RATES.
Basic Retail Account Fee computation:
$7.00 x .0055 = $ .04
Add 7.00
6/1 Basic Retail Account Fee $7.04
Basic Retail Transaction Fee Computation:
$5.00 x .0055 = $ .03
Add 5.00
6/1 Basic Retail Transaction Fee $5.03
D. Schedule of Payments
FIIOC shall be entitled to receive the account fee in respect of an
account under the applicable provisions of paragraph B above in each year
in which such account has a share balance greater than zero as of January
1, and in respect of each account opened after January 1 of such year.
Accounts with a share balance of zero shall be closed as of December 31
each year, and no account fee shall be paid in respect of such accounts for
the following year unless it is reopened. Account fees shall be billed
monthly on a pro rata basis at one-twelfth of the applicable annual rate as
of the end of each calendar month for each account open or opened during
the month. An account shall be a billable account as of the end of the
month in which it is opened, and the end of each month thereafter through
December 31, even though the value of such account may become zero. The
net asset value of an account as most recently determined in accordance
with the Portfolio's prospectus before 11:59 p.m., Boston time, on the last
calendar day of a month shall be the value used to determine the applicable
fee for the entire month. FIIOC may bill for accounts maintained on
transfer agency systems maintained by other divisions and subsidiaries of
FMR Corp. or any other entity to whom FIIOC has delegated all or a portion
of its duties under this Schedule A. Transaction fees with respect to an
account are billable by FIIOC as of the end of each month in which the
transaction occurs. In the event that a transaction is canceled or
corrected, the cancellation or correction shall be reflected as a credit to
the Fund against billable transactions for the month in which the
cancellation or correction occurs.
E. Shareholder Charges - FIIOC shall be entitled to charge a shareholder
directly, and may redeem shares of the Portfolio held in a shareholder's
account, for:
(1) Exchange Fees - FIIOC may from time to time receive, through payment by
shareholders of the Portfolio, all or a portion of an exchange fee in an
amount and under circumstances authorized by the Trustees of the Fund. If
a portion of any exchange fee collected is to be allocated to the
Portfolio, such amount shall be applied to reduce transaction fees or other
charges otherwise payable to FIIOC pursuant to this Agreement in accordance
with the allocation authorization by the Board of Trustees of the Fund.
(2) Wire fees - any fees in effect on January 1, 1993 as disclosed in the
Portfolio's Prospectus or which may be approved by the Trustees of the Fund
for executing a wire transfer of the proceeds of any wire redemption order
placed by a shareholder.
(3) Dishonored Checks - any fees reasonably related to cost and imposed by
FIIOC when a shareholder purchases shares by check and the purchase is
subsequently canceled because the check was dishonored by the shareholder's
bank.
(4) Account Histories - any fees reasonably related to cost and imposed by
FIIOC to prepare, at the request of a shareholder, an account history or
provide other research information for any year(s) prior to the calendar
year in which the request is made by the shareholder.
(5) Miscellaneous Supplemental Fees - any fees imposed by FIIOC or any
affiliate of FIIOC for providing supplemental services to a shareholder
pursuant to separate arrangements with the customer, including but not
limited to fees for personal advisory services, fees for providing check
redemption services, for maintaining and providing services to an
individual retirement custodian account, a Keogh custodian account, a
Prototype Profit Sharing or Money Purchase Pension Plan account or for
other similar supplemental services.
III. Costs and Expenses
A. Allocation of Costs. FIIOC will be responsible for all expenses, costs
and other charges arising out of the performance of its obligations
hereunder, including the fees and disbursements of any third party retained
to perform any of the services to the Portfolio on behalf of FIIOC
(including the fees and handling charges of brokers, banks and other
intermediaries for forwarding shareholder reports and statements with
respect to each account for which an account fee is imposed); all paper,
typesetting, printing, stationery, envelopes, postage, labeling costs, mail
sorting and other similar costs of preparing and mailing any dividend or
redemption payment, all shareholder reports (including the cost of printing
and mailing prospectuses sent to current shareholders), tax statements,
confirmations, notices and statements of account; all telephone and
computer equipment and usage charges; and all personnel expenses, heat,
light, rent, utilities, equipment purchases or rentals; all insurance
premiums associated with the provision of services under this agreement,
unless the Trustees shall have specifically authorized an allocation of all
or a portion of the premium to the Portfolio; all costs associated with the
provision of check redemption services (including, the costs of printing
and mailing of checks and checkbooks to shareholders, the charges of any
vendor retained by the Portfolio to process checks for payment, and the
charges of sending canceled checks to shareholders); and other necessary
expenses associated with the provision of services hereunder.
Notwithstanding the foregoing, the Portfolio shall be required to bear all
expenses for all accounts, including USA Core Accounts, Institutional
Trading Accounts, Broker-Dealer Trading Accounts and Institutional Employee
Benefit Accounts, associated with: (1) the printing, handling, forwarding
or mailing of shareholder reports and notices to shareholders who own
shares through an account of a broker, bank or other intermediary if FIIOC
is not compensated by an account fee for each sub-account, (2) the charges
of any bank for establishing and operating accounts for the receipt of
funds for share purchases and the payment of dividends, distributions and
redemption proceeds, (3) all fees and expenses of registering shares for
sale under the state securities laws, and (4) the holding of annual or
special meetings of Portfolio shareholders, including: the costs of
typesetting, printing, postage and mailing notices, proxy cards and proxy
statements (and, if required, annual reports sent to shareholders who have
opened accounts subsequent to the last regular mailing date of such reports
to shareholders); the fees and other disbursements of any agent hired to
mail proxy materials and/or tabulate proxies; all charges incurred by any
proxy soliciting agent; the reasonable and customary fees and handling
charges of brokers, banks and other intermediaries for forwarding proxy
materials; and all other customary expenses associated with the holding of
shareholder meetings.
B. Reports. Once each year, FIIOC shall submit to the Fund and the other
funds advised by Fidelity Management & Research Company with which
FIIOC has Transfer Agent Agreements (the Funds) a report setting forth the
total amount of costs and expenses incurred by FIIOC in the performance of
its obligations to the Funds under the Transfer Agent Agreements and the
total amounts payable by the Funds for such services. FIIOC shall also
provide annually a report by an independent certified public accounting
firm (who may be the auditors of FIIOC) on FIIOC's income and expenses.
The term "Transfer Agent Agreements" shall mean this agreement between
FIIOC and the Fund and agreements of like tenor between FIIOC and other
Funds.
FMR Corp.
By: /s/Denis M. McCarthy
Title: Treasurer
Fidelity Investments Institutional Operations Company
By: Virginia M. Meany
Title: President
Daily Money Fund, on behalf of
Capital Reserves: Money Market Portfolio
By: Gary L. French
Title: Treasurer
[FOR SPARTAN FUNDS ONLY]
Fidelity Management & Research Company (FMR) and the Trust on behalf of
the Portfolio have entered into a management contract pursuant to which FMR
has agreed to pay certain enumerated expenses. FMR hereby agrees with
FIIOC to pay all compensation set forth in paragraph II of this Schedule A
and, so long as the management contract remains in effect, FIIOC agrees
with the Portfolio to look exclusively to FMR for payment of the fees and
expenses set forth in paragraph II of this Schedule A.
Fidelity Management & Research Company
By: /s/ Gary L. French
Title: Treasurer
FMR Corp.
By: Denis M. McCarthy
Title: Treasurer
Fidelity Investments Institutional Operations
Company
By: Virginia M. Meany
Title: Sr. Vice President
Daily Money Fund, on behalf of
Capital Reserves: Money Market Portfolio
By: /s/Gary L. French
Title: Treasurer
Exhibit A-1
Monetary Transaction Types
The following monetary transactions may be billed by Fidelity Investments
Institutional Operations Company under the Transfer Agent Agreement with
Daily Money Fund: Money Market Portfolio:
Direct Payments - an investor pays cash and shares are issued pursuant to a
single order to purchase shares.
Direct Redemption - an investor's shares are redeemed and a check is sent
for redemption proceeds.
Exchange Redemption - A shareholder has entered an order to sell shares of
the Portfolio and invest proceeds in another Fund that permits exchange
privileges.
Exchange Purchase - A shareholder has entered an order of redemption to
another Fund and directed that proceeds of the redemption be invested in
the Portfolio.
Transfer - The change of ownership of an account is registered, by opening
a new account in the Portfolio and transferring of shares to the new
account.
Wire Purchases - An investor places an order for the purchase of shares and
purchase price is wired to the Portfolio.
Purchase by Directed Dividend - Pursuant to standing instruction of a
shareholder, shares of the Portfolio are purchased and the purchase price
is paid by a dividend from a different Fund.
Check Redemption - A shareholder's check is presented for payment and
shares sufficient to honor the check are redeemed.
Wire Liquidation - A shareholder requests that a specified number of shares
or dollar amount of shares be redeemed and a bank wire is sent for the
proceeds of redemption, less any applicable bank charges for the wire.
Electronic Funds Purchase - Shares are purchased by an electronic funds
transfer.
Electronic Funds Redemption - Shares are redeemed and the proceeds of
redemption are transferred electronically to the shareholder.
Systematic Withdrawal Plan Redemptions - Pursuant to standing instructions,
a shareholder redeems a specified amount of shares.
Exhibit A-2
USA Account Transaction Fees
The following monetary transactions may be billed by Fidelity Service
Company under the Transfer Agent Agreement with Daily MOney Fund: Money
Market Portfolio in connection with a USA Account:
Cash Advances - Each cash advance to a shareholder from a participating
financial institution for which the debit balance in the Fidelity USA
account is satisfied by a redemption of Portfolio shares.
Checks Paid - Each check drawn by a shareholder (other than a check issued
in connection with the Fidelity USA bill payment program) which is
presented for payment and results in a redemption of Portfolio shares.
Checks Received - Each check which is deposited into a Fidelity USA account
and results in the purchase of Portfolio shares.
Debit Card Purchases - Each use of a debit (or credit) card issued to a
Fidelity USA account participant to pay for goods or services which results
in the redemption of Portfolio shares in an account sufficient to cover the
debit (or credit) card charge.
Direct Deposit - Each pre-authorized deposit of funds through a
participating financial institution by a Fidelity USA program participant
to such program participant's Fidelity USA account which results in a
purchase of Portfolio shares.
EFT Received - Each electronic transfer of funds to a Fidelity USA account
by a Fidelity USA program participant which results in a purchase of
Portfolio shares.
EFT Paid - Each electronic transfer of funds by a Fidelity USA program
participant from such program participant's Fidelity USA account, which
results in a redemption of Portfolio shares.
Wire Received - Each wire transfer of funds by a Fidelity USA program
participant to a Fidelity USA account, which results in a purchase of
Portfolio shares.
Wire Sent - Each wire transfer of funds by a Fidelity USA program
participant from such program participant's Fidelity USA account, which
results in a redemption of Portfolio shares.
Automatic Teller - Each use of an automatic teller machine by a Fidelity
USA program participant to secure cash or to transfer funds, which results
in a redemption of Portfolio shares.
LG932720002
Dated as of September 30, 1993
Daily Money Fund:
Capital Reserves: U.S. Government Portfolio (the Portfolio)
SCHEDULE A: TRANSFER AGENT, DIVIDEND AND DISTRIBUTION DISBURSING
AGENT, AND SHAREHOLDER SERVICING AGENT
I. Services To Be Performed: Fidelity Investments Institutional Operations
Company, a division of FMR Corp. (FIIOC) shall be responsible for the
following:
A. FIIOC shall administer and/or perform transfer agent functions for the
Portfolio. It
will:
(1) receive for acceptance, orders for the purchase of Portfolio shares,
and promptly deliver payments received by it and appropriate documentation
therefor to the Portfolio's custodian;
(2) pursuant to purchase orders, issue the appropriate number of Portfolio
shares and properly register such shares to the appropriate shareholder
account;
(3) receive for acceptance, redemption requests and redemption instructions
(including redemptions by check transmitted to FIIOC by any duly appointed
check processing agent) and process payments for redemption to shareholders
in accordance with the terms, conditions and rules governing each
shareholder's account as set forth in the Portfolio's prospectus, statement
of additional information and each shareholder's account application;
(4) effect transfers of shares by the registered owners thereof upon
receipt of appropriate instructions; and
(5) prepare and mail to Portfolio shareholders such confirmations and
statements of account as may be required under applicable law and as may be
reasonably requested by the Portfolio.
B. FIIOC shall act as service agent of the Portfolio in connection with
dividend and
capital gains distributions by the Portfolio. It will:
(1) for each Portfolio shareholder who has elected to receive dividends
and/or distributions in cash, send payments to shareholders in accordance
with the shareholder's election; and
(2) for each Portfolio shareholder who has elected to receive dividends
and/or distributions in shares of the Portfolio or in shares of another
mutual fund for which FIIOC serves as transfer agent, credit the
shareholder's account(s) for the proper number of shares.
C. In addition to the foregoing services, FIIOC shall:
(1) perform all the customary administrative services related to its
transfer agent and dividend and distribution disbursing agent functions,
including, but not limited to:
(a) maintaining all shareholder accounts,
(b) preparing shareholder meeting lists, and supervising, but not paying
for, various agents and contractors employed to mail proxy materials and
receive and tabulate proxies,
(c) typesetting, printing and mailing shareholder reports and prospectuses
to current Portfolio shareholders,
(d) withholding taxes (including withholding for foreign taxes) for
shareholders for whom withholdings are required by federal or state
regulation and filing all required reports with respect thereto,
(e) preparing, distributing and filing all requisite shareholder tax
statements on appropriate forms and responding to inquiries with respect
thereto, and
(f) establishing and supervising the operation of bank accounts for the
receipt of funds for share purchases and the payment of dividends,
distributions and redemption proceeds;
(2) furnish the Portfolio with all necessary reports of Portfolio shares
sold in each state in order to permit compliance with the state securities
laws; and
(3) as required, respond to shareholder inquiries relating to the status of
their accounts, Portfolio performance, distributions, and share price, and
furnish shareholders with copies of account histories and make adjustments
to shareholder accounts to correct account files.
II. Compensation: For the performance of its obligations hereunder, the
Portfolio shall pay FIIOC in accordance with this Schedule A.
A. Certain Defined Terms
For purposes of this Schedule A, the following terms shall have the
meanings indicated:
An "account" shall mean each and every account or subaccount of a
Portfolio shareholder of record maintained on a transfer agency system by
FIIOC or on a transfer agency system operated by divisions and subsidiaries
of FMR Corp. or any other entity to whom FIIOC has delegated all or a
portion of its duties under this Schedule A such term shall not include an
account maintained on any subaccounting system operated by broker, bank or
other intermediary who is acting on behalf of its customer and who is not
acting pursuant to a delegation of duties by FIIOC.
"Basic Retail Account" shall mean any account of the Portfolio other than
a USA Account, an Institutional Trading Account, a Broker-Dealer Trading
Account or an Institutional Employee Benefit Account.
"Broker-Dealer Trading Account" shall mean any account of the Portfolio
maintained on behalf of a broker-dealer (other than broker-dealer
affiliates of FMR) or its clients.
"Centralized Service Transaction" shall mean each monetary transaction
described in Exhibit A to this Schedule A executed on behalf of an
institutional customer (such as a bank trust department, corporation or
investment adviser), or its clients who has no remote system access and for
whom FIIOC inputs all account activity information and performs all account
maintenance functions.
"Institutional Employee Benefit Account" shall mean an account of the
Portfolio maintained on behalf of a corporation, association, partnership
or other employer for the benefit of employees, by which employer and
employee contributions are invested in the Portfolio as part of a qualified
or non-qualified employee benefit plan primarily through payroll
deductions.
"Institutional Trading Account" shall mean any account maintained on
behalf of an institutional client (such as a bank, institutional advisor,
insurance company or law firm), other than a broker-dealer or its clients.
"Remote Service Transaction" shall mean each monetary transaction
described in Exhibit A-1 to the Schedule A executed on behalf of an
institutional customer (such as a bank, investment adviser, insurance
company or law firm), or its clients, who utilizes remote system access
equipment to input account activity information and to perform account
maintenance functions.
"USA Account" shall mean any account of the Portfolio established as the
core feature under the Fidelity USA Program, into which brokerage account
cash balances may be swept and from which brokerage account, credit card
and check debits may be satisfied.
B. Schedule of Account and Transaction Fees
(1) Basic Retail Accounts
(a) Account Fees - The Portfolio shall pay an account fee at the annual
rates (adjusted in accordance with the procedures set forth in II.C.(1)(a)
and (c) below) of $10.00 for Basic Retail Accounts with a value of less
than $5,000 and $13.75 for Basic Retail Accounts with a value of $5,000 or
more (the "December 31, 1992 Retail Account Fee Rates").
(b) Transaction Fees - For all Basic Retail Accounts the Portfolio shall
pay a fee (adjusted in accordance with the procedures set forth in
II.C.(1)(a) and (c) below) of $5.61 for each transaction described in
Exhibit A-1 to this Schedule A (the "December 31, 1992 Retail Transaction
Fee Rate").
(2) USA Accounts
(a) Account Fees - The Portfolio shall pay an account fee, in lieu of the
fees set forth in II.B.(1)(a), at the annual rate (adjusted in accordance
with the procedures set forth in II.C.(1)(b) and (c) below) of $12.35 for
each USA Account (the "December 31, 1992 Account Fee Rate").
(b) Transaction Fees - For all USA Accounts the Portfolio shall pay a fee
(adjusted in accordance with the procedures set forth in II.C.(1)(b)
below), in lieu of the fees set forth in II.B.(1)(b), of $0.74 for each
transaction described in Exhibit A-2 to this Schedule A (the "December 31,
1992 USA Transaction Fee Rate").
(c) Shareholder Service Fees - The foregoing Account Fees and Transactions
Fees, shall be in addition to, and not be reduced by, the fees charged to
shareholders directly for participating in the Fidelity USA program.
(3) Institutional Trading Accounts
(a) Account Fees - The Portfolio shall pay an account fee, in lieu of the
fees set forth in II.B.(1)(a) at the annual rate of $95.00 for each
Institutional Trading Account.
(b) Transaction Fees - The Portfolio shall pay a fee, in lieu of the fees
set forth in II.B.(1)(b), of $20.00 for each Centralized Service
Transaction and $17.50 for each Remote Service Transaction of such
Institutional Trading Account.
(4) Broker-Dealer Trading Accounts
(a) Account Fees - The Portfolio shall pay an account fee, in lieu of the
fees set forth in II.B.(1)(a), at the annual rate of $30.00 for each
Broker-Dealer Institutional Trading Account.
(b) Transaction Fees - The Portfolio shall pay a fee, in lieu of the fees
set forth in II.B.(1)(b) of $6.00 for each Centralized Service Transaction
and each Remote Service Transaction of such Broker-Dealer Institutional
Trading Account.
(5) Institutional Employee Benefit Plan Accounts - The Portfolio shall pay
a fee, in lieu of the fees set forth in II.B.(1), based upon the month end
value of all Institutional Employee Benefit Plan Accounts at an annual rate
of 0.30%.
C. Rate Changes
(1) Basic Retail Account and USA Account Rate Adjustments
(a) Annual Cost of Living Adjustment for Basic Retail Accounts - The
December 31, 1992 Retail Account Fee Rates and Retail Transaction Fee Rates
set forth in II.B.(1) of this Schedule A shall be adjusted annually for
increases in the cost of living as of the first day of January. On each
January 1, beginning January 1, 1994, the rates shall be adjusted by
multiplying 70% of the percentage change in the National Consumer Price
Index for Urban Areas Index (the Index) for the preceding calendar year
times the rates in effect for the preceding calendar year and adding the
results to the respective rates for the preceding calendar year to
determine the then current rate for the ensuing calendar year. Each
adjustment shall be rounded to the nearest one cent.
SAMPLE CALCULATION: Assuming the December 31, 1992 Retail Account Rate was
$7.00 and the December 31, 1992 Retail Transaction Fee Rate was $5.00, that
the Index reported a change in wage and price levels for the 12 months
ended December 31, 1993 of 5%, then the adjusted rates for the period
beginning January 1, 1994 would be calculated as follows:
Basic Retail Account Fee Rate Computation:
70% x 5% x $7.00 = $ .25
Add 7.00
1994 Basic Retail Account Fee $ 7.25
Basic Retail Transaction Fee Rate Computation:
70% x 5% x $5.00 = $ .18
Add 5.00
1994 Basic Retail Transaction Fee $ 5.18
(b) Annual Cost of Living Adjustment for USA Accounts - The December 31,
1992 USA Account Fee Rate and USA Transaction Fee Rate set forth in
II.B.(2) of this Schedule A shall be adjusted annually for increases in the
cost of living as of the first day of January. On each January 1,
beginning January 1, 1994, the rates shall be adjusted by multiplying 70%
of the percentage change in the Index for the preceding calendar year times
the rates in effect for the preceding calendar year and adding the results
to the respective rates for the preceding calendar year to determine the
then current rate for the ensuing calendar year.
SAMPLE CALCULATION: Assuming the December 31, 1992 USA Account Rate was
$11.00 and the December 31, 1992 USA Transaction Fee Rate was $.65, that
the Index reported a change in wage and price levels for the 12 months
ended December 31, 1993 of 5%, then the adjusted rates for the period
beginning January 1, 1994 would be calculated as follows:
USA Account Fee Rate Computation:
70% x 5% x $11.00 = $ .39
Add 11.00
1994 USA Account Fee $ 11.39
USA Transaction Fee Rate Computation:
70% x 5% x $0.65 = $ .02
Add .65
1994 USA Transaction Fee $ 0.67
(c) Postal Rate Changes - On the first day of any month following the
month in which the United States Postal Service implements a postal rate
increase, or if the increase is effective with the first day of a month,
then commencing on that first day, (Effective Date) the Account Fees and
Transaction Fees for Basic Retail Accounts and USA Accounts then in effect
shall be adjusted by a Postage Increase Factor (PIF). The PIF adjustment
shall be computed in the following fashion. The Account Fees and the
Transaction Fees for Basic Retail Accounts and USA Accounts then in effect
shall each be multiplied by the PIF and the resulting amounts shall be
added to the respective current rates. The PIF shall be determined by
dividing the revenues derived from the Account Fees and Transaction Fees
for Basic Retail Accounts and USA Accounts for the 12 months preceding the
Effective Date of the postal rate increase into the postal costs associated
with Basic Retail Accounts and with USA Accounts, respectively, for the
same 12-month period and then multiplying the result times a Class Cost
Factor. The Class Cost Factor shall be derived by calculating the dollar
weighted postage increase for all classes of postage being utilized to
perform services to Basic Retail Accounts and to USA Accounts,
respectively. The dollar-weighted postage increase shall be calculated by
multiplying the percentage increase for each class by the postal costs for
each such class and dividing the sum of such calculations by the total
postage costs for the 12 months preceding the Effective Date. Each
adjustment should be rounded to the nearest one cent.
SAMPLE CALCULATION: Postal rate adjustments would be calculated for
Account Fees and Transaction Fees for Basic Retail Accounts and USA
Accounts in the example set forth below for Basic Retail Accounts, assuming
(a) that on May 31 prior to the implementation of a postal rate increase,
the annual rate for Basic Retail Account Fees is $7.00 and the Transaction
Fee rate is $5.00, (b) that for the previous 12 months the revenues from
such fees are $10 million, and (c) that there were following three classes
of Basic Retail Account postage costs for the same period and the following
increases occur on June 1:
Postage 12 months of Postage Rate
Class Postage Cost Increases
1st $400,000 6%
2nd $100,000 9%
3rd $200,000 11%
STEP 1: CALCULATION OF THE DOLLAR-WEIGHTED POSTAGE INCREASE.
$400,000 x 6% = $ 24,000
$100,000 x 9% = 9,000
$200,000 x 11% = 22,000
$ 55,000
divided by total postage costs $700,000
Class Cost Factor .0785
STEP 2: CALCULATION OF POSTAGE INCREASE FACTOR (PIF).
12 month postage costs $700,000
divided by 12 month revenues 10,000,000
.07
multiplied by the Class Cost Factor .0785
PIF .0055
STEP 3: CALCULATION OF JUNE 1 RATES.
Basic Retail Account Fee computation:
$7.00 x .0055 = $ .04
Add 7.00
6/1 Basic Retail Account Fee $7.04
Basic Retail Transaction Fee Computation:
$5.00 x .0055 = $ .03
Add 5.00
6/1 Basic Retail Transaction Fee $5.03
D. Schedule of Payments
FIIOC shall be entitled to receive the account fee in respect of an
account under the applicable provisions of paragraph B above in each year
in which such account has a share balance greater than zero as of January
1, and in respect of each account opened after January 1 of such year.
Accounts with a share balance of zero shall be closed as of December 31
each year, and no account fee shall be paid in respect of such accounts for
the following year unless it is reopened. Account fees shall be billed
monthly on a pro rata basis at one-twelfth of the applicable annual rate as
of the end of each calendar month for each account open or opened during
the month. An account shall be a billable account as of the end of the
month in which it is opened, and the end of each month thereafter through
December 31, even though the value of such account may become zero. The
net asset value of an account as most recently determined in accordance
with the Portfolio's prospectus before 11:59 p.m., Boston time, on the last
calendar day of a month shall be the value used to determine the applicable
fee for the entire month. FIIOC may bill for accounts maintained on
transfer agency systems maintained by other divisions and subsidiaries of
FMR Corp. or any other entity to whom FIIOC has delegated all or a portion
of its duties under this Schedule A. Transaction fees with respect to an
account are billable by FIIOC as of the end of each month in which the
transaction occurs. In the event that a transaction is canceled or
corrected, the cancellation or correction shall be reflected as a credit to
the Fund against billable transactions for the month in which the
cancellation or correction occurs.
E. Shareholder Charges - FIIOC shall be entitled to charge a shareholder
directly, and may redeem shares of the Portfolio held in a shareholder's
account, for:
(1) Exchange Fees - FIIOC may from time to time receive, through payment by
shareholders of the Portfolio, all or a portion of an exchange fee in an
amount and under circumstances authorized by the Trustees of the Fund. If
a portion of any exchange fee collected is to be allocated to the
Portfolio, such amount shall be applied to reduce transaction fees or other
charges otherwise payable to FIIOC pursuant to this Agreement in accordance
with the allocation authorization by the Board of Trustees of the Fund.
(2) Wire fees - any fees in effect on January 1, 1993 as disclosed in the
Portfolio's Prospectus or which may be approved by the Trustees of the Fund
for executing a wire transfer of the proceeds of any wire redemption order
placed by a shareholder.
(3) Dishonored Checks - any fees reasonably related to cost and imposed by
FIIOC when a shareholder purchases shares by check and the purchase is
subsequently canceled because the check was dishonored by the shareholder's
bank.
(4) Account Histories - any fees reasonably related to cost and imposed by
FIIOC to prepare, at the request of a shareholder, an account history or
provide other research information for any year(s) prior to the calendar
year in which the request is made by the shareholder.
(5) Miscellaneous Supplemental Fees - any fees imposed by FIIOC or any
affiliate of FIIOC for providing supplemental services to a shareholder
pursuant to separate arrangements with the customer, including but not
limited to fees for personal advisory services, fees for providing check
redemption services, for maintaining and providing services to an
individual retirement custodian account, a Keogh custodian account, a
Prototype Profit Sharing or Money Purchase Pension Plan account or for
other similar supplemental services.
III. Costs and Expenses
A. Allocation of Costs. FIIOC will be responsible for all expenses, costs
and other charges arising out of the performance of its obligations
hereunder, including the fees and disbursements of any third party retained
to perform any of the services to the Portfolio on behalf of FIIOC
(including the fees and handling charges of brokers, banks and other
intermediaries for forwarding shareholder reports and statements with
respect to each account for which an account fee is imposed); all paper,
typesetting, printing, stationery, envelopes, postage, labeling costs, mail
sorting and other similar costs of preparing and mailing any dividend or
redemption payment, all shareholder reports (including the cost of printing
and mailing prospectuses sent to current shareholders), tax statements,
confirmations, notices and statements of account; all telephone and
computer equipment and usage charges; and all personnel expenses, heat,
light, rent, utilities, equipment purchases or rentals; all insurance
premiums associated with the provision of services under this agreement,
unless the Trustees shall have specifically authorized an allocation of all
or a portion of the premium to the Portfolio; all costs associated with the
provision of check redemption services (including, the costs of printing
and mailing of checks and checkbooks to shareholders, the charges of any
vendor retained by the Portfolio to process checks for payment, and the
charges of sending canceled checks to shareholders); and other necessary
expenses associated with the provision of services hereunder.
Notwithstanding the foregoing, the Portfolio shall be required to bear all
expenses for all accounts, including USA Core Accounts, Institutional
Trading Accounts, Broker-Dealer Trading Accounts and Institutional Employee
Benefit Accounts, associated with: (1) the printing, handling, forwarding
or mailing of shareholder reports and notices to shareholders who own
shares through an account of a broker, bank or other intermediary if FIIOC
is not compensated by an account fee for each sub-account, (2) the charges
of any bank for establishing and operating accounts for the receipt of
funds for share purchases and the payment of dividends, distributions and
redemption proceeds, (3) all fees and expenses of registering shares for
sale under the state securities laws, and (4) the holding of annual or
special meetings of Portfolio shareholders, including: the costs of
typesetting, printing, postage and mailing notices, proxy cards and proxy
statements (and, if required, annual reports sent to shareholders who have
opened accounts subsequent to the last regular mailing date of such reports
to shareholders); the fees and other disbursements of any agent hired to
mail proxy materials and/or tabulate proxies; all charges incurred by any
proxy soliciting agent; the reasonable and customary fees and handling
charges of brokers, banks and other intermediaries for forwarding proxy
materials; and all other customary expenses associated with the holding of
shareholder meetings.
B. Reports. Once each year, FIIOC shall submit to the Fund and the other
funds advised by Fidelity Management & Research Company with which
FIIOC has Transfer Agent Agreements (the Funds) a report setting forth the
total amount of costs and expenses incurred by FIIOC in the performance of
its obligations to the Funds under the Transfer Agent Agreements and the
total amounts payable by the Funds for such services. FIIOC shall also
provide annually a report by an independent certified public accounting
firm (who may be the auditors of FIIOC) on FIIOC's income and expenses.
The term "Transfer Agent Agreements" shall mean this agreement between
FIIOC and the Fund and agreements of like tenor between FIIOC and other
Funds.
FMR Corp.
By: /s/Denis M. McCarthy
Title: Treasurer
Fidelity Investments Institutional Operations Company
By: Virginia M. Meany
Title: Sr. Vice President
Daily Money Fund, on behalf of
Capital Reserves: U.S. Government Portfolio
By: /s/Gary L. French
Title: Treasurer
[FOR SPARTAN FUNDS ONLY]
Fidelity Management & Research Company (FMR) and the Trust on behalf of
the Portfolio have entered into a management contract pursuant to which FMR
has agreed to pay certain enumerated expenses. FMR hereby agrees with
FIIOC to pay all compensation set forth in paragraph II of this Schedule A
and, so long as the management contract remains in effect, FIIOC agrees
with the Portfolio to look exclusively to FMR for payment of the fees and
expenses set forth in paragraph II of this Schedule A.
Fidelity Management & Research Company
By: Gary L. French
Title: Treasurer
FMR Corp.
By: Denis M. McCarthy
Title: Treasurer
Fidelity Investments Institutional Operations
Company
By: Virginia M. Meany
Title: President
Daily Money Fund, on behalf of
Capital Reserves: U.S. Government Portfolio
By: Gary L. French
Title: Treasurer
Exhibit A-1
Monetary Transaction Types
The following monetary transactions may be billed by Fidelity Investments
Institutional Operations Company under the Transfer Agent Agreement with
Daily Money Fund: Money Market Portfolio:
Direct Payments - an investor pays cash and shares are issued pursuant to a
single order to purchase shares.
Direct Redemption - an investor's shares are redeemed and a check is sent
for redemption proceeds.
Exchange Redemption - A shareholder has entered an order to sell shares of
the Portfolio and invest proceeds in another Fund that permits exchange
privileges.
Exchange Purchase - A shareholder has entered an order of redemption to
another Fund and directed that proceeds of the redemption be invested in
the Portfolio.
Transfer - The change of ownership of an account is registered, by opening
a new account in the Portfolio and transferring of shares to the new
account.
Wire Purchases - An investor places an order for the purchase of shares and
purchase price is wired to the Portfolio.
Purchase by Directed Dividend - Pursuant to standing instruction of a
shareholder, shares of the Portfolio are purchased and the purchase price
is paid by a dividend from a different Fund.
Check Redemption - A shareholder's check is presented for payment and
shares sufficient to honor the check are redeemed.
Wire Liquidation - A shareholder requests that a specified number of shares
or dollar amount of shares be redeemed and a bank wire is sent for the
proceeds of redemption, less any applicable bank charges for the wire.
Electronic Funds Purchase - Shares are purchased by an electronic funds
transfer.
Electronic Funds Redemption - Shares are redeemed and the proceeds of
redemption are transferred electronically to the shareholder.
Systematic Withdrawal Plan Redemptions - Pursuant to standing instructions,
a shareholder redeems a specified amount of shares.
Exhibit A-2
USA Account Transaction Fees
The following monetary transactions may be billed by Fidelity Service
Company under the Transfer Agent Agreement with Daily MOney Fund: Money
Market Portfolio in connection with a USA Account:
Cash Advances - Each cash advance to a shareholder from a participating
financial institution for which the debit balance in the Fidelity USA
account is satisfied by a redemption of Portfolio shares.
Checks Paid - Each check drawn by a shareholder (other than a check issued
in connection with the Fidelity USA bill payment program) which is
presented for payment and results in a redemption of Portfolio shares.
Checks Received - Each check which is deposited into a Fidelity USA account
and results in the purchase of Portfolio shares.
Debit Card Purchases - Each use of a debit (or credit) card issued to a
Fidelity USA account participant to pay for goods or services which results
in the redemption of Portfolio shares in an account sufficient to cover the
debit (or credit) card charge.
Direct Deposit - Each pre-authorized deposit of funds through a
participating financial institution by a Fidelity USA program participant
to such program participant's Fidelity USA account which results in a
purchase of Portfolio shares.
EFT Received - Each electronic transfer of funds to a Fidelity USA account
by a Fidelity USA program participant which results in a purchase of
Portfolio shares.
EFT Paid - Each electronic transfer of funds by a Fidelity USA program
participant from such program participant's Fidelity USA account, which
results in a redemption of Portfolio shares.
Wire Received - Each wire transfer of funds by a Fidelity USA program
participant to a Fidelity USA account, which results in a purchase of
Portfolio shares.
Wire Sent - Each wire transfer of funds by a Fidelity USA program
participant from such program participant's Fidelity USA account, which
results in a redemption of Portfolio shares.
Automatic Teller - Each use of an automatic teller machine by a Fidelity
USA program participant to secure cash or to transfer funds, which results
in a redemption of Portfolio shares.
LG932720004
Dated as of September 30, 1993
Daily Money Fund:
U.S. Treasury Portfolio (the Portfolio)
SCHEDULE A: TRANSFER AGENT, DIVIDEND AND DISTRIBUTION DISBURSING
AGENT, AND SHAREHOLDER SERVICING AGENT
I. Services To Be Performed: Fidelity Investments Institutional Operations
Company, a division of FMR Corp. (FIIOC) shall be responsible for the
following:
A. FIIOC shall administer and/or perform transfer agent functions for the
Portfolio. It
will:
(1) receive for acceptance, orders for the purchase of Portfolio shares,
and promptly deliver payments received by it and appropriate documentation
therefor to the Portfolio's custodian;
(2) pursuant to purchase orders, issue the appropriate number of Portfolio
shares and properly register such shares to the appropriate shareholder
account;
(3) receive for acceptance, redemption requests and redemption instructions
(including redemptions by check transmitted to FIIOC by any duly appointed
check processing agent) and process payments for redemption to shareholders
in accordance with the terms, conditions and rules governing each
shareholder's account as set forth in the Portfolio's prospectus, statement
of additional information and each shareholder's account application;
(4) effect transfers of shares by the registered owners thereof upon
receipt of appropriate instructions; and
(5) prepare and mail to Portfolio shareholders such confirmations and
statements of account as may be required under applicable law and as may be
reasonably requested by the Portfolio.
B. FIIOC shall act as service agent of the Portfolio in connection with
dividend and
capital gains distributions by the Portfolio. It will:
(1) for each Portfolio shareholder who has elected to receive dividends
and/or distributions in cash, send payments to shareholders in accordance
with the shareholder's election; and
(2) for each Portfolio shareholder who has elected to receive dividends
and/or distributions in shares of the Portfolio or in shares of another
mutual fund for which FIIOC serves as transfer agent, credit the
shareholder's account(s) for the proper number of shares.
C. In addition to the foregoing services, FIIOC shall:
(1) perform all the customary administrative services related to its
transfer agent and dividend and distribution disbursing agent functions,
including, but not limited to:
(a) maintaining all shareholder accounts,
(b) preparing shareholder meeting lists, and supervising, but not paying
for, various agents and contractors employed to mail proxy materials and
receive and tabulate proxies,
(c) typesetting, printing and mailing shareholder reports and prospectuses
to current Portfolio shareholders,
(d) withholding taxes (including withholding for foreign taxes) for
shareholders for whom withholdings are required by federal or state
regulation and filing all required reports with respect thereto,
(e) preparing, distributing and filing all requisite shareholder tax
statements on appropriate forms and responding to inquiries with respect
thereto, and
(f) establishing and supervising the operation of bank accounts for the
receipt of funds for share purchases and the payment of dividends,
distributions and redemption proceeds;
(2) furnish the Portfolio with all necessary reports of Portfolio shares
sold in each state in order to permit compliance with the state securities
laws; and
(3) as required, respond to shareholder inquiries relating to the status of
their accounts, Portfolio performance, distributions, and share price, and
furnish shareholders with copies of account histories and make adjustments
to shareholder accounts to correct account files.
II. Compensation: For the performance of its obligations hereunder, the
Portfolio shall pay FIIOC in accordance with this Schedule A.
A. Certain Defined Terms
For purposes of this Schedule A, the following terms shall have the
meanings indicated:
An "account" shall mean each and every account or subaccount of a
Portfolio shareholder of record maintained on a transfer agency system by
FIIOC or on a transfer agency system operated by divisions and subsidiaries
of FMR Corp. or any other entity to whom FIIOC has delegated all or a
portion of its duties under this Schedule A such term shall not include an
account maintained on any subaccounting system operated by broker, bank or
other intermediary who is acting on behalf of its customer and who is not
acting pursuant to a delegation of duties by FIIOC.
"Basic Retail Account" shall mean any account of the Portfolio other than
a USA Account, an Institutional Trading Account, a Broker-Dealer Trading
Account or an Institutional Employee Benefit Account.
"Broker-Dealer Trading Account" shall mean any account of the Portfolio
maintained on behalf of a broker-dealer (other than broker-dealer
affiliates of FMR) or its clients.
"Centralized Service Transaction" shall mean each monetary transaction
described in Exhibit A to this Schedule A executed on behalf of an
institutional customer (such as a bank trust department, corporation or
investment adviser), or its clients who has no remote system access and for
whom FIIOC inputs all account activity information and performs all account
maintenance functions.
"Institutional Employee Benefit Account" shall mean an account of the
Portfolio maintained on behalf of a corporation, association, partnership
or other employer for the benefit of employees, by which employer and
employee contributions are invested in the Portfolio as part of a qualified
or non-qualified employee benefit plan primarily through payroll
deductions.
"Institutional Trading Account" shall mean any account maintained on
behalf of an institutional client (such as a bank, institutional advisor,
insurance company or law firm), other than a broker-dealer or its clients.
"Remote Service Transaction" shall mean each monetary transaction
described in Exhibit A-1 to the Schedule A executed on behalf of an
institutional customer (such as a bank, investment adviser, insurance
company or law firm), or its clients, who utilizes remote system access
equipment to input account activity information and to perform account
maintenance functions.
"USA Account" shall mean any account of the Portfolio established as the
core feature under the Fidelity USA Program, into which brokerage account
cash balances may be swept and from which brokerage account, credit card
and check debits may be satisfied.
B. Schedule of Account and Transaction Fees
(1) Basic Retail Accounts
(a) Account Fees - The Portfolio shall pay an account fee at the annual
rates (adjusted in accordance with the procedures set forth in II.C.(1)(a)
and (c) below) of $10.00 for Basic Retail Accounts with a value of less
than $5,000 and $13.75 for Basic Retail Accounts with a value of $5,000 or
more (the "December 31, 1992 Retail Account Fee Rates").
(b) Transaction Fees - For all Basic Retail Accounts the Portfolio shall
pay a fee (adjusted in accordance with the procedures set forth in
II.C.(1)(a) and (c) below) of $5.61 for each transaction described in
Exhibit A-1 to this Schedule A (the "December 31, 1992 Retail Transaction
Fee Rate").
(2) USA Accounts
(a) Account Fees - The Portfolio shall pay an account fee, in lieu of the
fees set forth in II.B.(1)(a), at the annual rate (adjusted in accordance
with the procedures set forth in II.C.(1)(b) and (c) below) of $12.35 for
each USA Account (the "December 31, 1992 Account Fee Rate").
(b) Transaction Fees - For all USA Accounts the Portfolio shall pay a fee
(adjusted in accordance with the procedures set forth in II.C.(1)(b)
below), in lieu of the fees set forth in II.B.(1)(b), of $0.74 for each
transaction described in Exhibit A-2 to this Schedule A (the "December 31,
1992 USA Transaction Fee Rate").
(c) Shareholder Service Fees - The foregoing Account Fees and Transactions
Fees, shall be in addition to, and not be reduced by, the fees charged to
shareholders directly for participating in the Fidelity USA program.
(3) Institutional Trading Accounts
(a) Account Fees - The Portfolio shall pay an account fee, in lieu of the
fees set forth in II.B.(1)(a) at the annual rate of $95.00 for each
Institutional Trading Account.
(b) Transaction Fees - The Portfolio shall pay a fee, in lieu of the fees
set forth in II.B.(1)(b), of $20.00 for each Centralized Service
Transaction and $17.50 for each Remote Service Transaction of such
Institutional Trading Account.
(4) Broker-Dealer Trading Accounts
(a) Account Fees - The Portfolio shall pay an account fee, in lieu of the
fees set forth in II.B.(1)(a), at the annual rate of $30.00 for each
Broker-Dealer Institutional Trading Account.
(b) Transaction Fees - The Portfolio shall pay a fee, in lieu of the fees
set forth in II.B.(1)(b) of $6.00 for each Centralized Service Transaction
and each Remote Service Transaction of such Broker-Dealer Institutional
Trading Account.
(5) Institutional Employee Benefit Plan Accounts - The Portfolio shall pay
a fee, in lieu of the fees set forth in II.B.(1), based upon the month end
value of all Institutional Employee Benefit Plan Accounts at an annual rate
of 0.30%.
C. Rate Changes
(1) Basic Retail Account and USA Account Rate Adjustments
(a) Annual Cost of Living Adjustment for Basic Retail Accounts - The
December 31, 1992 Retail Account Fee Rates and Retail Transaction Fee Rates
set forth in II.B.(1) of this Schedule A shall be adjusted annually for
increases in the cost of living as of the first day of January. On each
January 1, beginning January 1, 1994, the rates shall be adjusted by
multiplying 70% of the percentage change in the National Consumer Price
Index for Urban Areas Index (the Index) for the preceding calendar year
times the rates in effect for the preceding calendar year and adding the
results to the respective rates for the preceding calendar year to
determine the then current rate for the ensuing calendar year. Each
adjustment shall be rounded to the nearest one cent.
SAMPLE CALCULATION: Assuming the December 31, 1992 Retail Account Rate was
$7.00 and the December 31, 1992 Retail Transaction Fee Rate was $5.00, that
the Index reported a change in wage and price levels for the 12 months
ended December 31, 1993 of 5%, then the adjusted rates for the period
beginning January 1, 1994 would be calculated as follows:
Basic Retail Account Fee Rate Computation:
70% x 5% x $7.00 = $ .25
Add 7.00
1994 Basic Retail Account Fee $ 7.25
Basic Retail Transaction Fee Rate Computation:
70% x 5% x $5.00 = $ .18
Add 5.00
1994 Basic Retail Transaction Fee $ 5.18
(b) Annual Cost of Living Adjustment for USA Accounts - The December 31,
1992 USA Account Fee Rate and USA Transaction Fee Rate set forth in
II.B.(2) of this Schedule A shall be adjusted annually for increases in the
cost of living as of the first day of January. On each January 1,
beginning January 1, 1994, the rates shall be adjusted by multiplying 70%
of the percentage change in the Index for the preceding calendar year times
the rates in effect for the preceding calendar year and adding the results
to the respective rates for the preceding calendar year to determine the
then current rate for the ensuing calendar year.
SAMPLE CALCULATION: Assuming the December 31, 1992 USA Account Rate was
$11.00 and the December 31, 1992 USA Transaction Fee Rate was $.65, that
the Index reported a change in wage and price levels for the 12 months
ended December 31, 1993 of 5%, then the adjusted rates for the period
beginning January 1, 1994 would be calculated as follows:
USA Account Fee Rate Computation:
70% x 5% x $11.00 = $ .39
Add 11.00
1994 USA Account Fee $ 11.39
USA Transaction Fee Rate Computation:
70% x 5% x $0.65 = $ .02
Add .65
1994 USA Transaction Fee $ 0.67
(c) Postal Rate Changes - On the first day of any month following the
month in which the United States Postal Service implements a postal rate
increase, or if the increase is effective with the first day of a month,
then commencing on that first day, (Effective Date) the Account Fees and
Transaction Fees for Basic Retail Accounts and USA Accounts then in effect
shall be adjusted by a Postage Increase Factor (PIF). The PIF adjustment
shall be computed in the following fashion. The Account Fees and the
Transaction Fees for Basic Retail Accounts and USA Accounts then in effect
shall each be multiplied by the PIF and the resulting amounts shall be
added to the respective current rates. The PIF shall be determined by
dividing the revenues derived from the Account Fees and Transaction Fees
for Basic Retail Accounts and USA Accounts for the 12 months preceding the
Effective Date of the postal rate increase into the postal costs associated
with Basic Retail Accounts and with USA Accounts, respectively, for the
same 12-month period and then multiplying the result times a Class Cost
Factor. The Class Cost Factor shall be derived by calculating the dollar
weighted postage increase for all classes of postage being utilized to
perform services to Basic Retail Accounts and to USA Accounts,
respectively. The dollar-weighted postage increase shall be calculated by
multiplying the percentage increase for each class by the postal costs for
each such class and dividing the sum of such calculations by the total
postage costs for the 12 months preceding the Effective Date. Each
adjustment should be rounded to the nearest one cent.
SAMPLE CALCULATION: Postal rate adjustments would be calculated for
Account Fees and Transaction Fees for Basic Retail Accounts and USA
Accounts in the example set forth below for Basic Retail Accounts, assuming
(a) that on May 31 prior to the implementation of a postal rate increase,
the annual rate for Basic Retail Account Fees is $7.00 and the Transaction
Fee rate is $5.00, (b) that for the previous 12 months the revenues from
such fees are $10 million, and (c) that there were following three classes
of Basic Retail Account postage costs for the same period and the following
increases occur on June 1:
Postage 12 months of Postage Rate
Class Postage Cost Increases
1st $400,000 6%
2nd $100,000 9%
3rd $200,000 11%
STEP 1: CALCULATION OF THE DOLLAR-WEIGHTED POSTAGE INCREASE.
$400,000 x 6% = $ 24,000
$100,000 x 9% = 9,000
$200,000 x 11% = 22,000
$ 55,000
divided by total postage costs $700,000
Class Cost Factor .0785
STEP 2: CALCULATION OF POSTAGE INCREASE FACTOR (PIF).
12 month postage costs $700,000
divided by 12 month revenues 10,000,000
.07
multiplied by the Class Cost Factor .0785
PIF .0055
STEP 3: CALCULATION OF JUNE 1 RATES.
Basic Retail Account Fee computation:
$7.00 x .0055 = $ .04
Add 7.00
6/1 Basic Retail Account Fee $7.04
Basic Retail Transaction Fee Computation:
$5.00 x .0055 = $ .03
Add 5.00
6/1 Basic Retail Transaction Fee $5.03
D. Schedule of Payments
FIIOC shall be entitled to receive the account fee in respect of an
account under the applicable provisions of paragraph B above in each year
in which such account has a share balance greater than zero as of January
1, and in respect of each account opened after January 1 of such year.
Accounts with a share balance of zero shall be closed as of December 31
each year, and no account fee shall be paid in respect of such accounts for
the following year unless it is reopened. Account fees shall be billed
monthly on a pro rata basis at one-twelfth of the applicable annual rate as
of the end of each calendar month for each account open or opened during
the month. An account shall be a billable account as of the end of the
month in which it is opened, and the end of each month thereafter through
December 31, even though the value of such account may become zero. The
net asset value of an account as most recently determined in accordance
with the Portfolio's prospectus before 11:59 p.m., Boston time, on the last
calendar day of a month shall be the value used to determine the applicable
fee for the entire month. FIIOC may bill for accounts maintained on
transfer agency systems maintained by other divisions and subsidiaries of
FMR Corp. or any other entity to whom FIIOC has delegated all or a portion
of its duties under this Schedule A. Transaction fees with respect to an
account are billable by FIIOC as of the end of each month in which the
transaction occurs. In the event that a transaction is canceled or
corrected, the cancellation or correction shall be reflected as a credit to
the Fund against billable transactions for the month in which the
cancellation or correction occurs.
E. Shareholder Charges - FIIOC shall be entitled to charge a shareholder
directly, and may redeem shares of the Portfolio held in a shareholder's
account, for:
(1) Exchange Fees - FIIOC may from time to time receive, through payment by
shareholders of the Portfolio, all or a portion of an exchange fee in an
amount and under circumstances authorized by the Trustees of the Fund. If
a portion of any exchange fee collected is to be allocated to the
Portfolio, such amount shall be applied to reduce transaction fees or other
charges otherwise payable to FIIOC pursuant to this Agreement in accordance
with the allocation authorization by the Board of Trustees of the Fund.
(2) Wire fees - any fees in effect on January 1, 1993 as disclosed in the
Portfolio's Prospectus or which may be approved by the Trustees of the Fund
for executing a wire transfer of the proceeds of any wire redemption order
placed by a shareholder.
(3) Dishonored Checks - any fees reasonably related to cost and imposed by
FIIOC when a shareholder purchases shares by check and the purchase is
subsequently canceled because the check was dishonored by the shareholder's
bank.
(4) Account Histories - any fees reasonably related to cost and imposed by
FIIOC to prepare, at the request of a shareholder, an account history or
provide other research information for any year(s) prior to the calendar
year in which the request is made by the shareholder.
(5) Miscellaneous Supplemental Fees - any fees imposed by FIIOC or any
affiliate of FIIOC for providing supplemental services to a shareholder
pursuant to separate arrangements with the customer, including but not
limited to fees for personal advisory services, fees for providing check
redemption services, for maintaining and providing services to an
individual retirement custodian account, a Keogh custodian account, a
Prototype Profit Sharing or Money Purchase Pension Plan account or for
other similar supplemental services.
III. Costs and Expenses
A. Allocation of Costs. FIIOC will be responsible for all expenses, costs
and other charges arising out of the performance of its obligations
hereunder, including the fees and disbursements of any third party retained
to perform any of the services to the Portfolio on behalf of FIIOC
(including the fees and handling charges of brokers, banks and other
intermediaries for forwarding shareholder reports and statements with
respect to each account for which an account fee is imposed); all paper,
typesetting, printing, stationery, envelopes, postage, labeling costs, mail
sorting and other similar costs of preparing and mailing any dividend or
redemption payment, all shareholder reports (including the cost of printing
and mailing prospectuses sent to current shareholders), tax statements,
confirmations, notices and statements of account; all telephone and
computer equipment and usage charges; and all personnel expenses, heat,
light, rent, utilities, equipment purchases or rentals; all insurance
premiums associated with the provision of services under this agreement,
unless the Trustees shall have specifically authorized an allocation of all
or a portion of the premium to the Portfolio; all costs associated with the
provision of check redemption services (including, the costs of printing
and mailing of checks and checkbooks to shareholders, the charges of any
vendor retained by the Portfolio to process checks for payment, and the
charges of sending canceled checks to shareholders); and other necessary
expenses associated with the provision of services hereunder.
Notwithstanding the foregoing, the Portfolio shall be required to bear all
expenses for all accounts, including USA Core Accounts, Institutional
Trading Accounts, Broker-Dealer Trading Accounts and Institutional Employee
Benefit Accounts, associated with: (1) the printing, handling, forwarding
or mailing of shareholder reports and notices to shareholders who own
shares through an account of a broker, bank or other intermediary if FIIOC
is not compensated by an account fee for each sub-account, (2) the charges
of any bank for establishing and operating accounts for the receipt of
funds for share purchases and the payment of dividends, distributions and
redemption proceeds, (3) all fees and expenses of registering shares for
sale under the state securities laws, and (4) the holding of annual or
special meetings of Portfolio shareholders, including: the costs of
typesetting, printing, postage and mailing notices, proxy cards and proxy
statements (and, if required, annual reports sent to shareholders who have
opened accounts subsequent to the last regular mailing date of such reports
to shareholders); the fees and other disbursements of any agent hired to
mail proxy materials and/or tabulate proxies; all charges incurred by any
proxy soliciting agent; the reasonable and customary fees and handling
charges of brokers, banks and other intermediaries for forwarding proxy
materials; and all other customary expenses associated with the holding of
shareholder meetings.
B. Reports. Once each year, FIIOC shall submit to the Fund and the other
funds advised by Fidelity Management & Research Company with which
FIIOC has Transfer Agent Agreements (the Funds) a report setting forth the
total amount of costs and expenses incurred by FIIOC in the performance of
its obligations to the Funds under the Transfer Agent Agreements and the
total amounts payable by the Funds for such services. FIIOC shall also
provide annually a report by an independent certified public accounting
firm (who may be the auditors of FIIOC) on FIIOC's income and expenses.
The term "Transfer Agent Agreements" shall mean this agreement between
FIIOC and the Fund and agreements of like tenor between FIIOC and other
Funds.
FMR Corp.
By: /s/ Denis M. McCarthy
Title: Treasurer
Fidelity Investments Institutional Operations Company
By: Virginia M. Meany
Title: Sr. Vice President
Daily Money Fund, on behalf of
U.S. Treasury Portfolio
By: /s/ Gary L. French
Title: Treasurer
[FOR SPARTAN FUNDS ONLY]
Fidelity Management & Research Company (FMR) and the Trust on behalf of
the Portfolio have entered into a management contract pursuant to which FMR
has agreed to pay certain enumerated expenses. FMR hereby agrees with
FIIOC to pay all compensation set forth in paragraph II of this Schedule A
and, so long as the management contract remains in effect, FIIOC agrees
with the Portfolio to look exclusively to FMR for payment of the fees and
expenses set forth in paragraph II of this Schedule A.
Fidelity Management & Research Company
By: /s/Gary L. French
Title: Treasurer
FMR Corp.
By: Denis M. McCarthy
Title: Treasurer
Fidelity Investments Institutional Operations
Company
By: Virginia M Meany
Title: Sr. Vice President
Daily Money Fund, on behalf of
U.S. Treasury Portfolio
By: /s/Gary L. French
Title: Treasurer
Exhibit A-1
Monetary Transaction Types
The following monetary transactions may be billed by Fidelity Investments
Institutional Operations Company under the Transfer Agent Agreement with
Daily Money Fund: Money Market Portfolio:
Direct Payments - an investor pays cash and shares are issued pursuant to a
single order to purchase shares.
Direct Redemption - an investor's shares are redeemed and a check is sent
for redemption proceeds.
Exchange Redemption - A shareholder has entered an order to sell shares of
the Portfolio and invest proceeds in another Fund that permits exchange
privileges.
Exchange Purchase - A shareholder has entered an order of redemption to
another Fund and directed that proceeds of the redemption be invested in
the Portfolio.
Transfer - The change of ownership of an account is registered, by opening
a new account in the Portfolio and transferring of shares to the new
account.
Wire Purchases - An investor places an order for the purchase of shares and
purchase price is wired to the Portfolio.
Purchase by Directed Dividend - Pursuant to standing instruction of a
shareholder, shares of the Portfolio are purchased and the purchase price
is paid by a dividend from a different Fund.
Check Redemption - A shareholder's check is presented for payment and
shares sufficient to honor the check are redeemed.
Wire Liquidation - A shareholder requests that a specified number of shares
or dollar amount of shares be redeemed and a bank wire is sent for the
proceeds of redemption, less any applicable bank charges for the wire.
Electronic Funds Purchase - Shares are purchased by an electronic funds
transfer.
Electronic Funds Redemption - Shares are redeemed and the proceeds of
redemption are transferred electronically to the shareholder.
Systematic Withdrawal Plan Redemptions - Pursuant to standing instructions,
a shareholder redeems a specified amount of shares.
Exhibit A-2
USA Account Transaction Fees
The following monetary transactions may be billed by Fidelity Service
Company under the Transfer Agent Agreement with Daily MOney Fund: Money
Market Portfolio in connection with a USA Account:
Cash Advances - Each cash advance to a shareholder from a participating
financial institution for which the debit balance in the Fidelity USA
account is satisfied by a redemption of Portfolio shares.
Checks Paid - Each check drawn by a shareholder (other than a check issued
in connection with the Fidelity USA bill payment program) which is
presented for payment and results in a redemption of Portfolio shares.
Checks Received - Each check which is deposited into a Fidelity USA account
and results in the purchase of Portfolio shares.
Debit Card Purchases - Each use of a debit (or credit) card issued to a
Fidelity USA account participant to pay for goods or services which results
in the redemption of Portfolio shares in an account sufficient to cover the
debit (or credit) card charge.
Direct Deposit - Each pre-authorized deposit of funds through a
participating financial institution by a Fidelity USA program participant
to such program participant's Fidelity USA account which results in a
purchase of Portfolio shares.
EFT Received - Each electronic transfer of funds to a Fidelity USA account
by a Fidelity USA program participant which results in a purchase of
Portfolio shares.
EFT Paid - Each electronic transfer of funds by a Fidelity USA program
participant from such program participant's Fidelity USA account, which
results in a redemption of Portfolio shares.
Wire Received - Each wire transfer of funds by a Fidelity USA program
participant to a Fidelity USA account, which results in a purchase of
Portfolio shares.
Wire Sent - Each wire transfer of funds by a Fidelity USA program
participant from such program participant's Fidelity USA account, which
results in a redemption of Portfolio shares.
Automatic Teller - Each use of an automatic teller machine by a Fidelity
USA program participant to secure cash or to transfer funds, which results
in a redemption of Portfolio shares.
LG932720005
Dated as of September 30, 1993
Daily Money Fund:
Fidelity U.S. Treasury Income Portfolio (the Portfolio)
SCHEDULE A: TRANSFER AGENT, DIVIDEND AND DISTRIBUTION DISBURSING
AGENT, AND SHAREHOLDER SERVICING AGENT
I. Services To Be Performed: Fidelity Investments Institutional Operations
Company, a division of FMR Corp. (FIIOC) shall be responsible for the
following:
A. FIIOC shall administer and/or perform transfer agent functions for the
Portfolio. It
will:
(1) receive for acceptance, orders for the purchase of Portfolio shares,
and promptly deliver payments received by it and appropriate documentation
therefor to the Portfolio's custodian;
(2) pursuant to purchase orders, issue the appropriate number of Portfolio
shares and properly register such shares to the appropriate shareholder
account;
(3) receive for acceptance, redemption requests and redemption instructions
(including redemptions by check transmitted to FIIOC by any duly appointed
check processing agent) and process payments for redemption to shareholders
in accordance with the terms, conditions and rules governing each
shareholder's account as set forth in the Portfolio's prospectus, statement
of additional information and each shareholder's account application;
(4) effect transfers of shares by the registered owners thereof upon
receipt of appropriate instructions; and
(5) prepare and mail to Portfolio shareholders such confirmations and
statements of account as may be required under applicable law and as may be
reasonably requested by the Portfolio.
B. FIIOC shall act as service agent of the Portfolio in connection with
dividend and
capital gains distributions by the Portfolio. It will:
(1) for each Portfolio shareholder who has elected to receive dividends
and/or distributions in cash, send payments to shareholders in accordance
with the shareholder's election; and
(2) for each Portfolio shareholder who has elected to receive dividends
and/or distributions in shares of the Portfolio or in shares of another
mutual fund for which FIIOC serves as transfer agent, credit the
shareholder's account(s) for the proper number of shares.
C. In addition to the foregoing services, FIIOC shall:
(1) perform all the customary administrative services related to its
transfer agent and dividend and distribution disbursing agent functions,
including, but not limited to:
(a) maintaining all shareholder accounts,
(b) preparing shareholder meeting lists, and supervising, but not paying
for, various agents and contractors employed to mail proxy materials and
receive and tabulate proxies,
(c) typesetting, printing and mailing shareholder reports and prospectuses
to current Portfolio shareholders,
(d) withholding taxes (including withholding for foreign taxes) for
shareholders for whom withholdings are required by federal or state
regulation and filing all required reports with respect thereto,
(e) preparing, distributing and filing all requisite shareholder tax
statements on appropriate forms and responding to inquiries with respect
thereto, and
(f) establishing and supervising the operation of bank accounts for the
receipt of funds for share purchases and the payment of dividends,
distributions and redemption proceeds;
(2) furnish the Portfolio with all necessary reports of Portfolio shares
sold in each state in order to permit compliance with the state securities
laws; and
(3) as required, respond to shareholder inquiries relating to the status of
their accounts, Portfolio performance, distributions, and share price, and
furnish shareholders with copies of account histories and make adjustments
to shareholder accounts to correct account files.
II. Compensation: For the performance of its obligations hereunder, the
Portfolio shall pay FIIOC in accordance with this Schedule A.
A. Certain Defined Terms
For purposes of this Schedule A, the following terms shall have the
meanings indicated:
An "account" shall mean each and every account or subaccount of a
Portfolio shareholder of record maintained on a transfer agency system by
FIIOC or on a transfer agency system operated by divisions and subsidiaries
of FMR Corp. or any other entity to whom FIIOC has delegated all or a
portion of its duties under this Schedule A such term shall not include an
account maintained on any subaccounting system operated by broker, bank or
other intermediary who is acting on behalf of its customer and who is not
acting pursuant to a delegation of duties by FIIOC.
"Basic Retail Account" shall mean any account of the Portfolio other than
a USA Account, an Institutional Trading Account, a Broker-Dealer Trading
Account or an Institutional Employee Benefit Account.
"Broker-Dealer Trading Account" shall mean any account of the Portfolio
maintained on behalf of a broker-dealer (other than broker-dealer
affiliates of FMR) or its clients.
"Centralized Service Transaction" shall mean each monetary transaction
described in Exhibit A to this Schedule A executed on behalf of an
institutional customer (such as a bank trust department, corporation or
investment adviser), or its clients who has no remote system access and for
whom FIIOC inputs all account activity information and performs all account
maintenance functions.
"Institutional Employee Benefit Account" shall mean an account of the
Portfolio maintained on behalf of a corporation, association, partnership
or other employer for the benefit of employees, by which employer and
employee contributions are invested in the Portfolio as part of a qualified
or non-qualified employee benefit plan primarily through payroll
deductions.
"Institutional Trading Account" shall mean any account maintained on
behalf of an institutional client (such as a bank, institutional advisor,
insurance company or law firm), other than a broker-dealer or its clients.
"Remote Service Transaction" shall mean each monetary transaction
described in Exhibit A-1 to the Schedule A executed on behalf of an
institutional customer (such as a bank, investment adviser, insurance
company or law firm), or its clients, who utilizes remote system access
equipment to input account activity information and to perform account
maintenance functions.
"USA Account" shall mean any account of the Portfolio established as the
core feature under the Fidelity USA Program, into which brokerage account
cash balances may be swept and from which brokerage account, credit card
and check debits may be satisfied.
B. Schedule of Account and Transaction Fees
(1) Basic Retail Accounts
(a) Account Fees - The Portfolio shall pay an account fee at the annual
rates (adjusted in accordance with the procedures set forth in II.C.(1)(a)
and (c) below) of $10.00 for Basic Retail Accounts with a value of less
than $5,000 and $13.75 for Basic Retail Accounts with a value of $5,000 or
more (the "December 31, 1992 Retail Account Fee Rates").
(b) Transaction Fees - For all Basic Retail Accounts the Portfolio shall
pay a fee (adjusted in accordance with the procedures set forth in
II.C.(1)(a) and (c) below) of $5.61 for each transaction described in
Exhibit A-1 to this Schedule A (the "December 31, 1992 Retail Transaction
Fee Rate").
(2) USA Accounts
(a) Account Fees - The Portfolio shall pay an account fee, in lieu of the
fees set forth in II.B.(1)(a), at the annual rate (adjusted in accordance
with the procedures set forth in II.C.(1)(b) and (c) below) of $12.35 for
each USA Account (the "December 31, 1992 Account Fee Rate").
(b) Transaction Fees - For all USA Accounts the Portfolio shall pay a fee
(adjusted in accordance with the procedures set forth in II.C.(1)(b)
below), in lieu of the fees set forth in II.B.(1)(b), of $0.74 for each
transaction described in Exhibit A-2 to this Schedule A (the "December 31,
1992 USA Transaction Fee Rate").
(c) Shareholder Service Fees - The foregoing Account Fees and Transactions
Fees, shall be in addition to, and not be reduced by, the fees charged to
shareholders directly for participating in the Fidelity USA program.
(3) Institutional Trading Accounts
(a) Account Fees - The Portfolio shall pay an account fee, in lieu of the
fees set forth in II.B.(1)(a) at the annual rate of $95.00 for each
Institutional Trading Account.
(b) Transaction Fees - The Portfolio shall pay a fee, in lieu of the fees
set forth in II.B.(1)(b), of $20.00 for each Centralized Service
Transaction and $17.50 for each Remote Service Transaction of such
Institutional Trading Account.
(4) Broker-Dealer Trading Accounts
(a) Account Fees - The Portfolio shall pay an account fee, in lieu of the
fees set forth in II.B.(1)(a), at the annual rate of $30.00 for each
Broker-Dealer Institutional Trading Account.
(b) Transaction Fees - The Portfolio shall pay a fee, in lieu of the fees
set forth in II.B.(1)(b) of $6.00 for each Centralized Service Transaction
and each Remote Service Transaction of such Broker-Dealer Institutional
Trading Account.
(5) Institutional Employee Benefit Plan Accounts - The Portfolio shall pay
a fee, in lieu of the fees set forth in II.B.(1), based upon the month end
value of all Institutional Employee Benefit Plan Accounts at an annual rate
of 0.30%.
C. Rate Changes
(1) Basic Retail Account and USA Account Rate Adjustments
(a) Annual Cost of Living Adjustment for Basic Retail Accounts - The
December 31, 1992 Retail Account Fee Rates and Retail Transaction Fee Rates
set forth in II.B.(1) of this Schedule A shall be adjusted annually for
increases in the cost of living as of the first day of January. On each
January 1, beginning January 1, 1994, the rates shall be adjusted by
multiplying 70% of the percentage change in the National Consumer Price
Index for Urban Areas Index (the Index) for the preceding calendar year
times the rates in effect for the preceding calendar year and adding the
results to the respective rates for the preceding calendar year to
determine the then current rate for the ensuing calendar year. Each
adjustment shall be rounded to the nearest one cent.
SAMPLE CALCULATION: Assuming the December 31, 1992 Retail Account Rate was
$7.00 and the December 31, 1992 Retail Transaction Fee Rate was $5.00, that
the Index reported a change in wage and price levels for the 12 months
ended December 31, 1993 of 5%, then the adjusted rates for the period
beginning January 1, 1994 would be calculated as follows:
Basic Retail Account Fee Rate Computation:
70% x 5% x $7.00 = $ .25
Add 7.00
1994 Basic Retail Account Fee $ 7.25
Basic Retail Transaction Fee Rate Computation:
70% x 5% x $5.00 = $ .18
Add 5.00
1994 Basic Retail Transaction Fee $ 5.18
(b) Annual Cost of Living Adjustment for USA Accounts - The December 31,
1992 USA Account Fee Rate and USA Transaction Fee Rate set forth in
II.B.(2) of this Schedule A shall be adjusted annually for increases in the
cost of living as of the first day of January. On each January 1,
beginning January 1, 1994, the rates shall be adjusted by multiplying 70%
of the percentage change in the Index for the preceding calendar year times
the rates in effect for the preceding calendar year and adding the results
to the respective rates for the preceding calendar year to determine the
then current rate for the ensuing calendar year.
SAMPLE CALCULATION: Assuming the December 31, 1992 USA Account Rate was
$11.00 and the December 31, 1992 USA Transaction Fee Rate was $.65, that
the Index reported a change in wage and price levels for the 12 months
ended December 31, 1993 of 5%, then the adjusted rates for the period
beginning January 1, 1994 would be calculated as follows:
USA Account Fee Rate Computation:
70% x 5% x $11.00 = $ .39
Add 11.00
1994 USA Account Fee $ 11.39
USA Transaction Fee Rate Computation:
70% x 5% x $0.65 = $ .02
Add .65
1994 USA Transaction Fee $ 0.67
(c) Postal Rate Changes - On the first day of any month following the
month in which the United States Postal Service implements a postal rate
increase, or if the increase is effective with the first day of a month,
then commencing on that first day, (Effective Date) the Account Fees and
Transaction Fees for Basic Retail Accounts and USA Accounts then in effect
shall be adjusted by a Postage Increase Factor (PIF). The PIF adjustment
shall be computed in the following fashion. The Account Fees and the
Transaction Fees for Basic Retail Accounts and USA Accounts then in effect
shall each be multiplied by the PIF and the resulting amounts shall be
added to the respective current rates. The PIF shall be determined by
dividing the revenues derived from the Account Fees and Transaction Fees
for Basic Retail Accounts and USA Accounts for the 12 months preceding the
Effective Date of the postal rate increase into the postal costs associated
with Basic Retail Accounts and with USA Accounts, respectively, for the
same 12-month period and then multiplying the result times a Class Cost
Factor. The Class Cost Factor shall be derived by calculating the dollar
weighted postage increase for all classes of postage being utilized to
perform services to Basic Retail Accounts and to USA Accounts,
respectively. The dollar-weighted postage increase shall be calculated by
multiplying the percentage increase for each class by the postal costs for
each such class and dividing the sum of such calculations by the total
postage costs for the 12 months preceding the Effective Date. Each
adjustment should be rounded to the nearest one cent.
SAMPLE CALCULATION: Postal rate adjustments would be calculated for
Account Fees and Transaction Fees for Basic Retail Accounts and USA
Accounts in the example set forth below for Basic Retail Accounts, assuming
(a) that on May 31 prior to the implementation of a postal rate increase,
the annual rate for Basic Retail Account Fees is $7.00 and the Transaction
Fee rate is $5.00, (b) that for the previous 12 months the revenues from
such fees are $10 million, and (c) that there were following three classes
of Basic Retail Account postage costs for the same period and the following
increases occur on June 1:
Postage 12 months of Postage Rate
Class Postage Cost Increases
1st $400,000 6%
2nd $100,000 9%
3rd $200,000 11%
STEP 1: CALCULATION OF THE DOLLAR-WEIGHTED POSTAGE INCREASE.
$400,000 x 6% = $ 24,000
$100,000 x 9% = 9,000
$200,000 x 11% = 22,000
$ 55,000
divided by total postage costs $700,000
Class Cost Factor .0785
STEP 2: CALCULATION OF POSTAGE INCREASE FACTOR (PIF).
12 month postage costs $700,000
divided by 12 month revenues 10,000,000
.07
multiplied by the Class Cost Factor .0785
PIF .0055
STEP 3: CALCULATION OF JUNE 1 RATES.
Basic Retail Account Fee computation:
$7.00 x .0055 = $ .04
Add 7.00
6/1 Basic Retail Account Fee $7.04
Basic Retail Transaction Fee Computation:
$5.00 x .0055 = $ .03
Add 5.00
6/1 Basic Retail Transaction Fee $5.03
D. Schedule of Payments
FIIOC shall be entitled to receive the account fee in respect of an
account under the applicable provisions of paragraph B above in each year
in which such account has a share balance greater than zero as of January
1, and in respect of each account opened after January 1 of such year.
Accounts with a share balance of zero shall be closed as of December 31
each year, and no account fee shall be paid in respect of such accounts for
the following year unless it is reopened. Account fees shall be billed
monthly on a pro rata basis at one-twelfth of the applicable annual rate as
of the end of each calendar month for each account open or opened during
the month. An account shall be a billable account as of the end of the
month in which it is opened, and the end of each month thereafter through
December 31, even though the value of such account may become zero. The
net asset value of an account as most recently determined in accordance
with the Portfolio's prospectus before 11:59 p.m., Boston time, on the last
calendar day of a month shall be the value used to determine the applicable
fee for the entire month. FIIOC may bill for accounts maintained on
transfer agency systems maintained by other divisions and subsidiaries of
FMR Corp. or any other entity to whom FIIOC has delegated all or a portion
of its duties under this Schedule A. Transaction fees with respect to an
account are billable by FIIOC as of the end of each month in which the
transaction occurs. In the event that a transaction is canceled or
corrected, the cancellation or correction shall be reflected as a credit to
the Fund against billable transactions for the month in which the
cancellation or correction occurs.
E. Shareholder Charges - FIIOC shall be entitled to charge a shareholder
directly, and may redeem shares of the Portfolio held in a shareholder's
account, for:
(1) Exchange Fees - FIIOC may from time to time receive, through payment by
shareholders of the Portfolio, all or a portion of an exchange fee in an
amount and under circumstances authorized by the Trustees of the Fund. If
a portion of any exchange fee collected is to be allocated to the
Portfolio, such amount shall be applied to reduce transaction fees or other
charges otherwise payable to FIIOC pursuant to this Agreement in accordance
with the allocation authorization by the Board of Trustees of the Fund.
(2) Wire fees - any fees in effect on January 1, 1993 as disclosed in the
Portfolio's Prospectus or which may be approved by the Trustees of the Fund
for executing a wire transfer of the proceeds of any wire redemption order
placed by a shareholder.
(3) Dishonored Checks - any fees reasonably related to cost and imposed by
FIIOC when a shareholder purchases shares by check and the purchase is
subsequently canceled because the check was dishonored by the shareholder's
bank.
(4) Account Histories - any fees reasonably related to cost and imposed by
FIIOC to prepare, at the request of a shareholder, an account history or
provide other research information for any year(s) prior to the calendar
year in which the request is made by the shareholder.
(5) Miscellaneous Supplemental Fees - any fees imposed by FIIOC or any
affiliate of FIIOC for providing supplemental services to a shareholder
pursuant to separate arrangements with the customer, including but not
limited to fees for personal advisory services, fees for providing check
redemption services, for maintaining and providing services to an
individual retirement custodian account, a Keogh custodian account, a
Prototype Profit Sharing or Money Purchase Pension Plan account or for
other similar supplemental services.
III. Costs and Expenses
A. Allocation of Costs. FIIOC will be responsible for all expenses, costs
and other charges arising out of the performance of its obligations
hereunder, including the fees and disbursements of any third party retained
to perform any of the services to the Portfolio on behalf of FIIOC
(including the fees and handling charges of brokers, banks and other
intermediaries for forwarding shareholder reports and statements with
respect to each account for which an account fee is imposed); all paper,
typesetting, printing, stationery, envelopes, postage, labeling costs, mail
sorting and other similar costs of preparing and mailing any dividend or
redemption payment, all shareholder reports (including the cost of printing
and mailing prospectuses sent to current shareholders), tax statements,
confirmations, notices and statements of account; all telephone and
computer equipment and usage charges; and all personnel expenses, heat,
light, rent, utilities, equipment purchases or rentals; all insurance
premiums associated with the provision of services under this agreement,
unless the Trustees shall have specifically authorized an allocation of all
or a portion of the premium to the Portfolio; all costs associated with the
provision of check redemption services (including, the costs of printing
and mailing of checks and checkbooks to shareholders, the charges of any
vendor retained by the Portfolio to process checks for payment, and the
charges of sending canceled checks to shareholders); and other necessary
expenses associated with the provision of services hereunder.
Notwithstanding the foregoing, the Portfolio shall be required to bear all
expenses for all accounts, including USA Core Accounts, Institutional
Trading Accounts, Broker-Dealer Trading Accounts and Institutional Employee
Benefit Accounts, associated with: (1) the printing, handling, forwarding
or mailing of shareholder reports and notices to shareholders who own
shares through an account of a broker, bank or other intermediary if FIIOC
is not compensated by an account fee for each sub-account, (2) the charges
of any bank for establishing and operating accounts for the receipt of
funds for share purchases and the payment of dividends, distributions and
redemption proceeds, (3) all fees and expenses of registering shares for
sale under the state securities laws, and (4) the holding of annual or
special meetings of Portfolio shareholders, including: the costs of
typesetting, printing, postage and mailing notices, proxy cards and proxy
statements (and, if required, annual reports sent to shareholders who have
opened accounts subsequent to the last regular mailing date of such reports
to shareholders); the fees and other disbursements of any agent hired to
mail proxy materials and/or tabulate proxies; all charges incurred by any
proxy soliciting agent; the reasonable and customary fees and handling
charges of brokers, banks and other intermediaries for forwarding proxy
materials; and all other customary expenses associated with the holding of
shareholder meetings.
B. Reports. Once each year, FIIOC shall submit to the Fund and the other
funds advised by Fidelity Management & Research Company with which
FIIOC has Transfer Agent Agreements (the Funds) a report setting forth the
total amount of costs and expenses incurred by FIIOC in the performance of
its obligations to the Funds under the Transfer Agent Agreements and the
total amounts payable by the Funds for such services. FIIOC shall also
provide annually a report by an independent certified public accounting
firm (who may be the auditors of FIIOC) on FIIOC's income and expenses.
The term "Transfer Agent Agreements" shall mean this agreement between
FIIOC and the Fund and agreements of like tenor between FIIOC and other
Funds.
FMR Corp.
By: Denis M. McCarthy
Title: Treasurer
Fidelity Investments Institutional Operations Company
By: Virginia M. Meany
Title: Sr. Vice President
Daily Money Fund, on behalf of
Fifelity U.S. Treasury Income Portfolio
By: Gary L. French
Title: Treasurer
[FOR SPARTAN FUNDS ONLY]
Fidelity Management & Research Company (FMR) and the Trust on behalf of
the Portfolio have entered into a management contract pursuant to which FMR
has agreed to pay certain enumerated expenses. FMR hereby agrees with
FIIOC to pay all compensation set forth in paragraph II of this Schedule A
and, so long as the management contract remains in effect, FIIOC agrees
with the Portfolio to look exclusively to FMR for payment of the fees and
expenses set forth in paragraph II of this Schedule A.
Fidelity Management & Research Company
By: /s/Gary L. French
Title: Treasurer
FMR Corp.
By: Denis M. McCarthy
Title: Treasurer
Fidelity Investments Institutional Operations
Company
By: Virginia M. Meany
Title: Sr. Vice President
Daily Money Fund, on behalf of
Fidelity U.S. Treasury Income Portfolio
By: Gary L. French
Title: Treasurer
Exhibit A-1
Monetary Transaction Types
The following monetary transactions may be billed by Fidelity Investments
Institutional Operations Company under the Transfer Agent Agreement with
Daily Money Fund: Money Market Portfolio:
Direct Payments - an investor pays cash and shares are issued pursuant to a
single order to purchase shares.
Direct Redemption - an investor's shares are redeemed and a check is sent
for redemption proceeds.
Exchange Redemption - A shareholder has entered an order to sell shares of
the Portfolio and invest proceeds in another Fund that permits exchange
privileges.
Exchange Purchase - A shareholder has entered an order of redemption to
another Fund and directed that proceeds of the redemption be invested in
the Portfolio.
Transfer - The change of ownership of an account is registered, by opening
a new account in the Portfolio and transferring of shares to the new
account.
Wire Purchases - An investor places an order for the purchase of shares and
purchase price is wired to the Portfolio.
Purchase by Directed Dividend - Pursuant to standing instruction of a
shareholder, shares of the Portfolio are purchased and the purchase price
is paid by a dividend from a different Fund.
Check Redemption - A shareholder's check is presented for payment and
shares sufficient to honor the check are redeemed.
Wire Liquidation - A shareholder requests that a specified number of shares
or dollar amount of shares be redeemed and a bank wire is sent for the
proceeds of redemption, less any applicable bank charges for the wire.
Electronic Funds Purchase - Shares are purchased by an electronic funds
transfer.
Electronic Funds Redemption - Shares are redeemed and the proceeds of
redemption are transferred electronically to the shareholder.
Systematic Withdrawal Plan Redemptions - Pursuant to standing instructions,
a shareholder redeems a specified amount of shares.
Exhibit A-2
USA Account Transaction Fees
The following monetary transactions may be billed by Fidelity Service
Company under the Transfer Agent Agreement with Daily MOney Fund: Money
Market Portfolio in connection with a USA Account:
Cash Advances - Each cash advance to a shareholder from a participating
financial institution for which the debit balance in the Fidelity USA
account is satisfied by a redemption of Portfolio shares.
Checks Paid - Each check drawn by a shareholder (other than a check issued
in connection with the Fidelity USA bill payment program) which is
presented for payment and results in a redemption of Portfolio shares.
Checks Received - Each check which is deposited into a Fidelity USA account
and results in the purchase of Portfolio shares.
Debit Card Purchases - Each use of a debit (or credit) card issued to a
Fidelity USA account participant to pay for goods or services which results
in the redemption of Portfolio shares in an account sufficient to cover the
debit (or credit) card charge.
Direct Deposit - Each pre-authorized deposit of funds through a
participating financial institution by a Fidelity USA program participant
to such program participant's Fidelity USA account which results in a
purchase of Portfolio shares.
EFT Received - Each electronic transfer of funds to a Fidelity USA account
by a Fidelity USA program participant which results in a purchase of
Portfolio shares.
EFT Paid - Each electronic transfer of funds by a Fidelity USA program
participant from such program participant's Fidelity USA account, which
results in a redemption of Portfolio shares.
Wire Received - Each wire transfer of funds by a Fidelity USA program
participant to a Fidelity USA account, which results in a purchase of
Portfolio shares.
Wire Sent - Each wire transfer of funds by a Fidelity USA program
participant from such program participant's Fidelity USA account, which
results in a redemption of Portfolio shares.
Automatic Teller - Each use of an automatic teller machine by a Fidelity
USA program participant to secure cash or to transfer funds, which results
in a redemption of Portfolio shares.
LG932720006
Dated as of September 30, 1993
Daily Money Fund:
Money Market Portfolio (the Portfolio)
SCHEDULE A: TRANSFER AGENT, DIVIDEND AND DISTRIBUTION DISBURSING AGENT,
AND SHAREHOLDER SERVICING AGENT
I. Services To Be Performed: Fidelity Investments Institutional Operations
Company, a division of FMR Corp. (FIIOC) shall be responsible for the
following:
A. FIIOC shall administer and/or perform transfer agent functions for the
Portfolio. It will:
(1) receive for acceptance, orders for the purchase of Portfolio shares,
and promptly deliver payments received by it and appropriate documentation
therefor to the Portfolio's custodian;
(2) pursuant to purchase orders, issue the appropriate number of Portfolio
shares and properly register such shares to the appropriate shareholder
account;
(3) receive for acceptance, redemption requests and redemption instructions
(including redemptions by check transmitted to FIIOC by any duly appointed
check processing agent) and process payments for redemption to shareholders
in accordance with the terms, conditions and rules governing each
shareholder's account as set forth in the Portfolio's prospectus, statement
of additional information and each shareholder's account application;
(4) effect transfers of shares by the registered owners thereof upon
receipt of appropriate instructions; and
(5) prepare and mail to Portfolio shareholders such confirmations and
statements of account as may be required under applicable law and as may be
reasonably requested by the Portfolio.
B. FIIOC shall act as service agent of the Portfolio in connection with
dividend and capital gains distributions by the Portfolio. It will:
(1) for each Portfolio shareholder who has elected to receive dividends
and/or distributions in cash, send payments to shareholders in accordance
with the shareholder's election; and
(2) for each Portfolio shareholder who has elected to receive dividends
and/or distributions in shares of the Portfolio or in shares of another
mutual fund for which FIIOC serves as transfer agent, credit the
shareholder's account(s) for the proper number of shares.
C. In addition to the foregoing services, FIIOC shall:
(1) perform all the customary administrative services related to its
transfer agent and dividend and distribution disbursing agent functions,
including, but not limited to:
(a) maintaining all shareholder accounts,
(b) preparing shareholder meeting lists, and supervising, but not paying
for, various agents and contractors employed to mail proxy materials and
receive and tabulate proxies,
(c) typesetting, printing and mailing shareholder reports and prospectuses
to current Portfolio shareholders,
(d) withholding taxes (including withholding for foreign taxes) for
shareholders for whom withholdings are required by federal or state
regulation and filing all required reports with respect thereto,
(e) preparing, distributing and filing all requisite shareholder tax
statements on appropriate forms and responding to inquiries with respect
thereto, and
(f) establishing and supervising the operation of bank accounts for the
receipt of funds for share purchases and the payment of dividends,
distributions and redemption proceeds;
(2) furnish the Portfolio with all necessary reports of Portfolio shares
sold in each state in order to permit compliance with the state securities
laws; and
(3) as required, respond to shareholder inquiries relating to the status of
their accounts, Portfolio performance, distributions, and share price, and
furnish shareholders with copies of account histories and make adjustments
to shareholder accounts to correct account files.
II. Compensation: For the performance of its obligations hereunder, the
Portfolio shall pay FIIOC in accordance with this Schedule A.
A. Certain Defined Terms
For purposes of this Schedule A, the following terms shall have the
meanings indicated:
An "account" shall mean each and every account or subaccount of a
Portfolio shareholder of record maintained on a transfer agency system by
FIIOC or on a transfer agency system operated by divisions and subsidiaries
of FMR Corp. or any other entity to whom FIIOC has delegated all or a
portion of its duties under this Schedule A such term shall not include an
account maintained on any subaccounting system operated by broker, bank or
other intermediary who is acting on behalf of its customer and who is not
acting pursuant to a delegation of duties by FIIOC.
"Basic Retail Account" shall mean any account of the Portfolio other than
a USA Account, an Institutional Trading Account, a Broker-Dealer Trading
Account or an Institutional Employee Benefit Account.
"Broker-Dealer Trading Account" shall mean any account of the Portfolio
maintained on behalf of a broker-dealer (other than broker-dealer
affiliates of FMR) or its clients.
"Centralized Service Transaction" shall mean each monetary transaction
described in Exhibit A to this Schedule A executed on behalf of an
institutional customer (such as a bank trust department, corporation or
investment adviser), or its clients who has no remote system access and for
whom FIIOC inputs all account activity information and performs all account
maintenance functions.
"Institutional Employee Benefit Account" shall mean an account of the
Portfolio maintained on behalf of a corporation, association, partnership
or other employer for the benefit of employees, by which employer and
employee contributions are invested in the Portfolio as part of a qualified
or non-qualified employee benefit plan primarily through payroll
deductions.
"Institutional Trading Account" shall mean any account maintained on
behalf of an institutional client (such as a bank, institutional advisor,
insurance company or law firm), other than a broker-dealer or its clients.
"Remote Service Transaction" shall mean each monetary transaction
described in Exhibit A-1 to the Schedule A executed on behalf of an
institutional customer (such as a bank, investment adviser, insurance
company or law firm), or its clients, who utilizes remote system access
equipment to input account activity information and to perform account
maintenance functions.
"USA Account" shall mean any account of the Portfolio established as the
core feature under the Fidelity USA Program, into which brokerage account
cash balances may be swept and from which brokerage account, credit card
and check debits may be satisfied.
B. Schedule of Account and Transaction Fees
(1) Basic Retail Accounts
(a) Account Fees - The Portfolio shall pay an account fee at the annual
rates (adjusted in accordance with the procedures set forth in II.C.(1)(a)
and (c) below) of $10.00 for Basic Retail Accounts with a value of less
than $5,000 and $13.75 for Basic Retail Accounts with a value of $5,000 or
more (the "December 31, 1992 Retail Account Fee Rates").
(b) Transaction Fees - For all Basic Retail Accounts the Portfolio shall
pay a fee (adjusted in accordance with the procedures set forth in
II.C.(1)(a) and (c) below) of $5.61 for each transaction described in
Exhibit A-1 to this Schedule A (the "December 31, 1992 Retail Transaction
Fee Rate").
(2) USA Accounts
(a) Account Fees - The Portfolio shall pay an account fee, in lieu of the
fees set forth in II.B.(1)(a), at the annual rate (adjusted in accordance
with the procedures set forth in II.C.(1)(b) and (c) below) of $12.35 for
each USA Account (the "December 31, 1992 Account Fee Rate").
(b) Transaction Fees - For all USA Accounts the Portfolio shall pay a fee
(adjusted in accordance with the procedures set forth in II.C.(1)(b)
below), in lieu of the fees set forth in II.B.(1)(b), of $0.74 for each
transaction described in Exhibit A-2 to this Schedule A (the "December 31,
1992 USA Transaction Fee Rate").
(c) Shareholder Service Fees - The foregoing Account Fees and Transactions
Fees, shall be in addition to, and not be reduced by, the fees charged to
shareholders directly for participating in the Fidelity USA program.
(3) Institutional Trading Accounts
(a) Account Fees - The Portfolio shall pay an account fee, in lieu of the
fees set forth in II.B.(1)(a) at the annual rate of $95.00 for each
Institutional Trading Account.
(b) Transaction Fees - The Portfolio shall pay a fee, in lieu of the fees
set forth in II.B.(1)(b), of $20.00 for each Centralized Service
Transaction and $17.50 for each Remote Service Transaction of such
Institutional Trading Account.
(4) Broker-Dealer Trading Accounts
(a) Account Fees - The Portfolio shall pay an account fee, in lieu of the
fees set forth in II.B.(1)(a), at the annual rate of $30.00 for each
Broker-Dealer Institutional Trading Account.
(b) Transaction Fees - The Portfolio shall pay a fee, in lieu of the fees
set forth in II.B.(1)(b) of $6.00 for each Centralized Service Transaction
and each Remote Service Transaction of such Broker-Dealer Institutional
Trading Account.
(5) Institutional Employee Benefit Plan Accounts - The Portfolio shall pay
a fee, in lieu of the fees set forth in II.B.(1), based upon the month end
value of all Institutional Employee Benefit Plan Accounts at an annual rate
of 0.30%.
C. Rate Changes
(1) Basic Retail Account and USA Account Rate Adjustments
(a) Annual Cost of Living Adjustment for Basic Retail Accounts - The
December 31, 1992 Retail Account Fee Rates and Retail Transaction Fee Rates
set forth in II.B.(1) of this Schedule A shall be adjusted annually for
increases in the cost of living as of the first day of January. On each
January 1, beginning January 1, 1994, the rates shall be adjusted by
multiplying 70% of the percentage change in the National Consumer Price
Index for Urban Areas Index (the Index) for the preceding calendar year
times the rates in effect for the preceding calendar year and adding the
results to the respective rates for the preceding calendar year to
determine the then current rate for the ensuing calendar year. Each
adjustment shall be rounded to the nearest one cent.
SAMPLE CALCULATION: Assuming the December 31, 1992 Retail Account Rate was
$7.00 and the December 31, 1992 Retail Transaction Fee Rate was $5.00, that
the Index reported a change in wage and price levels for the 12 months
ended December 31, 1993 of 5%, then the adjusted rates for the period
beginning January 1, 1994 would be calculated as follows:
Basic Retail Account Fee Rate Computation:
70% x 5% x $7.00 = $ .25
Add 7.00
1994 Basic Retail Account Fee $ 7.25
Basic Retail Transaction Fee Rate Computation:
70% x 5% x $5.00 = $ .18
Add 5.00
1994 Basic Retail Transaction Fee $ 5.18
(b) Annual Cost of Living Adjustment for USA Accounts - The December 31,
1992 USA Account Fee Rate and USA Transaction Fee Rate set forth in
II.B.(2) of this Schedule A shall be adjusted annually for increases in the
cost of living as of the first day of January. On each January 1,
beginning January 1, 1994, the rates shall be adjusted by multiplying 70%
of the percentage change in the Index for the preceding calendar year times
the rates in effect for the preceding calendar year and adding the results
to the respective rates for the preceding calendar year to determine the
then current rate for the ensuing calendar year.
SAMPLE CALCULATION: Assuming the December 31, 1992 USA Account Rate was
$11.00 and the December 31, 1992 USA Transaction Fee Rate was $.65, that
the Index reported a change in wage and price levels for the 12 months
ended December 31, 1993 of 5%, then the adjusted rates for the period
beginning January 1, 1994 would be calculated as follows:
USA Account Fee Rate Computation:
70% x 5% x $11.00 = $ .39
Add 11.00
1994 USA Account Fee $ 11.39
USA Transaction Fee Rate Computation:
70% x 5% x $0.65 = $ .02
Add .65
1994 USA Transaction Fee $ 0.67
(c) Postal Rate Changes - On the first day of any month following the
month in which the United States Postal Service implements a postal rate
increase, or if the increase is effective with the first day of a month,
then commencing on that first day, (Effective Date) the Account Fees and
Transaction Fees for Basic Retail Accounts and USA Accounts then in effect
shall be adjusted by a Postage Increase Factor (PIF). The PIF adjustment
shall be computed in the following fashion. The Account Fees and the
Transaction Fees for Basic Retail Accounts and USA Accounts then in effect
shall each be multiplied by the PIF and the resulting amounts shall be
added to the respective current rates. The PIF shall be determined by
dividing the revenues derived from the Account Fees and Transaction Fees
for Basic Retail Accounts and USA Accounts for the 12 months preceding the
Effective Date of the postal rate increase into the postal costs associated
with Basic Retail Accounts and with USA Accounts, respectively, for the
same 12-month period and then multiplying the result times a Class Cost
Factor. The Class Cost Factor shall be derived by calculating the dollar
weighted postage increase for all classes of postage being utilized to
perform services to Basic Retail Accounts and to USA Accounts,
respectively. The dollar-weighted postage increase shall be calculated by
multiplying the percentage increase for each class by the postal costs for
each such class and dividing the sum of such calculations by the total
postage costs for the 12 months preceding the Effective Date. Each
adjustment should be rounded to the nearest one cent.
SAMPLE CALCULATION: Postal rate adjustments would be calculated for
Account Fees and Transaction Fees for Basic Retail Accounts and USA
Accounts in the example set forth below for Basic Retail Accounts, assuming
(a) that on May 31 prior to the implementation of a postal rate increase,
the annual rate for Basic Retail Account Fees is $7.00 and the Transaction
Fee rate is $5.00, (b) that for the previous 12 months the revenues from
such fees are $10 million, and (c) that there were following three classes
of Basic Retail Account postage costs for the same period and the following
increases occur on June 1:
Postage 12 months of Postage Rate
Class Postage Cost Increases
1st $400,000 6%
2nd $100,000 9%
3rd $200,000 11%
STEP 1: CALCULATION OF THE DOLLAR-WEIGHTED POSTAGE INCREASE.
$400,000 x 6% = $ 24,000
$100,000 x 9% = 9,000
$200,000 x 11% = 22,000
$ 55,000
divided by total postage costs $700,000
Class Cost Factor .0785
STEP 2: CALCULATION OF POSTAGE INCREASE FACTOR (PIF).
12 month postage costs $700,000
divided by 12 month revenues 10,000,000
.07
multiplied by the Class Cost Factor .0785
PIF .0055
STEP 3: CALCULATION OF JUNE 1 RATES.
Basic Retail Account Fee computation:
$7.00 x .0055 = $ .04
Add 7.00
6/1 Basic Retail Account Fee $7.04
Basic Retail Transaction Fee Computation:
$5.00 x .0055 = $ .03
Add 5.00
6/1 Basic Retail Transaction Fee $5.03
D. Schedule of Payments
FIIOC shall be entitled to receive the account fee in respect of an
account under the applicable provisions of paragraph B above in each year
in which such account has a share balance greater than zero as of January
1, and in respect of each account opened after January 1 of such year.
Accounts with a share balance of zero shall be closed as of December 31
each year, and no account fee shall be paid in respect of such accounts for
the following year unless it is reopened. Account fees shall be billed
monthly on a pro rata basis at one-twelfth of the applicable annual rate as
of the end of each calendar month for each account open or opened during
the month. An account shall be a billable account as of the end of the
month in which it is opened, and the end of each month thereafter through
December 31, even though the value of such account may become zero. The
net asset value of an account as most recently determined in accordance
with the Portfolio's prospectus before 11:59 p.m., Boston time, on the last
calendar day of a month shall be the value used to determine the applicable
fee for the entire month. FIIOC may bill for accounts maintained on
transfer agency systems maintained by other divisions and subsidiaries of
FMR Corp. or any other entity to whom FIIOC has delegated all or a portion
of its duties under this Schedule A. Transaction fees with respect to an
account are billable by FIIOC as of the end of each month in which the
transaction occurs. In the event that a transaction is canceled or
corrected, the cancellation or correction shall be reflected as a credit to
the Fund against billable transactions for the month in which the
cancellation or correction occurs.
E. Shareholder Charges - FIIOC shall be entitled to charge a shareholder
directly, and may redeem shares of the Portfolio held in a shareholder's
account, for:
(1) Exchange Fees - FIIOC may from time to time receive, through payment by
shareholders of the Portfolio, all or a portion of an exchange fee in an
amount and under circumstances authorized by the Trustees of the Fund. If
a portion of any exchange fee collected is to be allocated to the
Portfolio, such amount shall be applied to reduce transaction fees or other
charges otherwise payable to FIIOC pursuant to this Agreement in accordance
with the allocation authorization by the Board of Trustees of the Fund.
(2) Wire fees - any fees in effect on January 1, 1993 as disclosed in the
Portfolio's Prospectus or which may be approved by the Trustees of the Fund
for executing a wire transfer of the proceeds of any wire redemption order
placed by a shareholder.
(3) Dishonored Checks - any fees reasonably related to cost and imposed by
FIIOC when a shareholder purchases shares by check and the purchase is
subsequently canceled because the check was dishonored by the shareholder's
bank.
(4) Account Histories - any fees reasonably related to cost and imposed by
FIIOC to prepare, at the request of a shareholder, an account history or
provide other research information for any year(s) prior to the calendar
year in which the request is made by the shareholder.
(5) Miscellaneous Supplemental Fees - any fees imposed by FIIOC or any
affiliate of FIIOC for providing supplemental services to a shareholder
pursuant to separate arrangements with the customer, including but not
limited to fees for personal advisory services, fees for providing check
redemption services, for maintaining and providing services to an
individual retirement custodian account, a Keogh custodian account, a
Prototype Profit Sharing or Money Purchase Pension Plan account or for
other similar supplemental services.
III. Costs and Expenses
A. Allocation of Costs. FIIOC will be responsible for all expenses, costs
and other charges arising out of the performance of its obligations
hereunder, including the fees and disbursements of any third party retained
to perform any of the services to the Portfolio on behalf of FIIOC
(including the fees and handling charges of brokers, banks and other
intermediaries for forwarding shareholder reports and statements with
respect to each account for which an account fee is imposed); all paper,
typesetting, printing, stationery, envelopes, postage, labeling costs, mail
sorting and other similar costs of preparing and mailing any dividend or
redemption payment, all shareholder reports (including the cost of printing
and mailing prospectuses sent to current shareholders), tax statements,
confirmations, notices and statements of account; all telephone and
computer equipment and usage charges; and all personnel expenses, heat,
light, rent, utilities, equipment purchases or rentals; all insurance
premiums associated with the provision of services under this agreement,
unless the Trustees shall have specifically authorized an allocation of all
or a portion of the premium to the Portfolio; all costs associated with the
provision of check redemption services (including, the costs of printing
and mailing of checks and checkbooks to shareholders, the charges of any
vendor retained by the Portfolio to process checks for payment, and the
charges of sending canceled checks to shareholders); and other necessary
expenses associated with the provision of services hereunder.
Notwithstanding the foregoing, the Portfolio shall be required to bear all
expenses for all accounts, including USA Core Accounts, Institutional
Trading Accounts, Broker-Dealer Trading Accounts and Institutional Employee
Benefit Accounts, associated with: (1) the printing, handling, forwarding
or mailing of shareholder reports and notices to shareholders who own
shares through an account of a broker, bank or other intermediary if FIIOC
is not compensated by an account fee for each sub-account, (2) the charges
of any bank for establishing and operating accounts for the receipt of
funds for share purchases and the payment of dividends, distributions and
redemption proceeds, (3) all fees and expenses of registering shares for
sale under the state securities laws, and (4) the holding of annual or
special meetings of Portfolio shareholders, including: the costs of
typesetting, printing, postage and mailing notices, proxy cards and proxy
statements (and, if required, annual reports sent to shareholders who have
opened accounts subsequent to the last regular mailing date of such reports
to shareholders); the fees and other disbursements of any agent hired to
mail proxy materials and/or tabulate proxies; all charges incurred by any
proxy soliciting agent; the reasonable and customary fees and handling
charges of brokers, banks and other intermediaries for forwarding proxy
materials; and all other customary expenses associated with the holding of
shareholder meetings.
B. Reports. Once each year, FIIOC shall submit to the Fund and the other
funds advised by Fidelity Management & Research Company with which
FIIOC has Transfer Agent Agreements (the Funds) a report setting forth the
total amount of costs and expenses incurred by FIIOC in the performance of
its obligations to the Funds under the Transfer Agent Agreements and the
total amounts payable by the Funds for such services. FIIOC shall also
provide annually a report by an independent certified public accounting
firm (who may be the auditors of FIIOC) on FIIOC's income and expenses.
The term "Transfer Agent Agreements" shall mean this agreement between
FIIOC and the Fund and agreements of like tenor between FIIOC and other
Funds.
FMR Corp.
By: /s/ Denis M. McCarthy
Name:Denis M. McCarthy
Title: Treasurer
Fidelity Investments Institutional Operations Company
By: /s/ Virginia M. Meany
Name: Virginia M. Meany
Title: Sr. Vice President
Daily Money Fund, on behalf of
Money Market Portfolio
By: /s/ Gary L. French
Name: Gary L. French
Title: Treasurer
[FOR SPARTAN FUNDS ONLY]
Fidelity Management & Research Company (FMR) and the Trust on behalf of
the Portfolio have entered into a management contract pursuant to which FMR
has agreed to pay certain enumerated expenses. FMR hereby agrees with
FIIOC to pay all compensation set forth in paragraph II of this Schedule A
and, so long as the management contract remains in effect, FIIOC agrees
with the Portfolio to look exclusively to FMR for payment of the fees and
expenses set forth in paragraph II of this Schedule A.
Fidelity Management & Research Company
By: /s/ Gary L. French
Name: Gary L. French
Title: Treasurer
FMR Corp.
By: /s Denis M. McCarthy
Name: Denis M. McCarthy
Title: Treasurer
Fidelity Investments Institutional Operations
Company
By: /s/ Virginia M. Meany
Name: Virginia M. Meany
Title: Sr. Vice President
Daily Money Fund, on behalf of
Money Market Portfolio
By: /s/ Gary L. French
Name: Gary L. French
Title: Treasurer
Exhibit A-1
Monetary Transaction Types
The following monetary transactions may be billed by Fidelity Investments
Institutional Operations Company under the Transfer Agent Agreement with
Daily Money Fund: Money Market Portfolio:
Direct Payments - an investor pays cash and shares are issued pursuant to a
single order to purchase shares.
Direct Redemption - an investor's shares are redeemed and a check is sent
for redemption proceeds.
Exchange Redemption - A shareholder has entered an order to sell shares of
the Portfolio and invest proceeds in another Fund that permits exchange
privileges.
Exchange Purchase - A shareholder has entered an order of redemption to
another Fund and directed that proceeds of the redemption be invested in
the Portfolio.
Transfer - The change of ownership of an account is registered, by opening
a new account in the Portfolio and transferring of shares to the new
account.
Wire Purchases - An investor places an order for the purchase of shares and
purchase price is wired to the Portfolio.
Purchase by Directed Dividend - Pursuant to standing instruction of a
shareholder, shares of the Portfolio are purchased and the purchase price
is paid by a dividend from a different Fund.
Check Redemption - A shareholder's check is presented for payment and
shares sufficient to honor the check are redeemed.
Wire Liquidation - A shareholder requests that a specified number of shares
or dollar amount of shares be redeemed and a bank wire is sent for the
proceeds of redemption, less any applicable bank charges for the wire.
Electronic Funds Purchase - Shares are purchased by an electronic funds
transfer.
Electronic Funds Redemption - Shares are redeemed and the proceeds of
redemption are transferred electronically to the shareholder.
Systematic Withdrawal Plan Redemptions - Pursuant to standing instructions,
a shareholder redeems a specified amount of shares.
Exhibit A-2
USA Account Transaction Fees
The following monetary transactions may be billed by Fidelity Service
Company under the Transfer Agent Agreement with Daily MOney Fund: Money
Market Portfolio in connection with a USA Account:
Cash Advances - Each cash advance to a shareholder from a participating
financial institution for which the debit balance in the Fidelity USA
account is satisfied by a redemption of Portfolio shares.
Checks Paid - Each check drawn by a shareholder (other than a check issued
in connection with the Fidelity USA bill payment program) which is
presented for payment and results in a redemption of Portfolio shares.
Checks Received - Each check which is deposited into a Fidelity USA account
and results in the purchase of Portfolio shares.
Debit Card Purchases - Each use of a debit (or credit) card issued to a
Fidelity USA account participant to pay for goods or services which results
in the redemption of Portfolio shares in an account sufficient to cover the
debit (or credit) card charge.
Direct Deposit - Each pre-authorized deposit of funds through a
participating financial institution by a Fidelity USA program participant
to such program participant's Fidelity USA account which results in a
purchase of Portfolio shares.
EFT Received - Each electronic transfer of funds to a Fidelity USA account
by a Fidelity USA program participant which results in a purchase of
Portfolio shares.
EFT Paid - Each electronic transfer of funds by a Fidelity USA program
participant from such program participant's Fidelity USA account, which
results in a redemption of Portfolio shares.
Wire Received - Each wire transfer of funds by a Fidelity USA program
participant to a Fidelity USA account, which results in a purchase of
Portfolio shares.
Wire Sent - Each wire transfer of funds by a Fidelity USA program
participant from such program participant's Fidelity USA account, which
results in a redemption of Portfolio shares.
Automatic Teller - Each use of an automatic teller machine by a Fidelity
USA program participant to secure cash or to transfer funds, which results
in a redemption of Portfolio shares.
LG932720001
DAILY MONEY FUND
CAPITAL RESERVES MUNICIPAL MONEY MARKET PORTFOLIO
TRANSFER AGENT AGREEMENT WITH UNITED MISSOURI BANK, N.A.
Required authorizations and approvals having been obtained, agreement is
hereby made this 30th day of September, 1993 by and between United Missouri
Bank, N.A. (the Bank) with its principal offices at 1010 Grand Avenue,
Kansas City, Missouri, and Daily Money Fund, on behalf of Capital Reserves:
Municipal Money Market Portfolio (the Fund), a Delaware business trust
which may issue one or more series of shares of beneficial interest
(Portfolio(s)) with principal offices at 82 Devonshire Street, Boston,
Massachusetts.
Reference to the Fund, when applicable to one or more Portfolios of the
Fund, shall refer to any such Portfolio;
1. Appointments. The Fund hereby appoints and employs the Bank as agent
to provide those services described in the schedules attached to this
Agreement for the Fund upon notice in writing that the Fund requests such
services. The Bank shall perform the obligations and the services set
forth in the attached schedules upon the terms and conditions hereinafter
set forth.
2. Documents. The Fund has furnished the Bank copies of the Fund's Trust
Instrument, Bylaws, a form of Advisory and Service or Management Contract,
Custodian Contract, current Prospectus and Statement of Additional
Information (the Prospectus), any other governing documents and all forms
relating to any plan, program or service offered by the Fund. The Fund
shall furnish promptly to the Bank a copy of any amendment or supplement to
the above-mentioned documents. The Fund shall furnish to the Bank any
additional documents requested by it as necessary for it to perform the
services required hereunder.
3. Services to be Performed. The Bank shall be responsible for
performing as agent, as of the date of this Agreement, the services
described in the following schedules attached hereto and made a part
hereof, as said schedules may be amended from time to time:
Schedule A: Transfer agent, dividend and distribution disbursing agent
and shareholder agent.
Operating procedures and standards to be followed for each function may be
established from time to time by agreement between the Fund and the Bank.
The above schedules may be amended or deleted, or additional schedules may
be included, as deemed necessary from time to time by agreement between the
Fund and the Bank. Deletion of any schedule shall be in accordance with
the termination provisions of Paragraph 15 of this Agreement. Each
schedule and any amendments thereto shall be dated and signed by the
parties to this Agreement.
4. Record Keeping and Other Information. The Bank shall create and
maintain all records required by all applicable laws, rules and regulations
relating to the services to be performed as set forth in the schedules
attached hereto, including but not limited to records required by Section
31(a) of the Investment Company Act of 1940 and the Rules thereunder, as
the same may be amended from time to time. All records shall be the
property of the Fund and shall be available for inspection and use by the
Fund at all times. Where applicable, such records shall be maintained by
the Bank for the periods and in the places required by Rule 31a-2 under the
Investment Company Act of 1940.
5. Audits, Inspections and Visits. The Bank shall make available during
regular business hours all records and other data created and maintained
pursuant to this Agreement for reasonable audit and inspection by the Fund,
any agent or person designated by the Fund, or any regulatory agency having
authority over the Fund. Upon reasonable notice by the Fund, the Bank
shall make available during regular business hours its facilities and
premises employed in connection with its performance of this Agreement for
reasonable visits by the Fund, any agent or person designated by the Fund,
or any regulatory agency having authority over the Fund.
6. Compensation. For the performance of its obligations hereunder, the
Fund shall pay the Bank in accordance with the fee arrangements described
in each schedule attached hereto.
7. Appointment of Agents. The Bank, at its expense, may at any time or
times in its discretion appoint (and may at any time remove) one or more
other parties as Agent to perform any or all of the services specified
hereunder and carry out such provisions of this Agreement as the Bank may
from time to time direct; provided, however, that the appointment of any
such Agent (other than Fidelity Investments Institutional Operations
Company) shall not relieve the Bank of any of its responsibilities or
liabilities hereunder.
8. Use of the Bank's Name. The Fund shall not use the name of the Bank
in any Prospectus, sales literature or other material relating to the Fund
in a manner not consented to prior to use; provided, however, that the Bank
shall approve all uses of its name which merely refer in accurate terms to
its appointments, duties or fees hereunder or which are required by the
Securities and Exchange Commission or a state securities commission; and
further provided, that in no event shall such approval be unreasonably
withheld.
9. Use of Fund's Name. The Bank shall not use the name of the Fund or
material relating to the Fund on any forms (including any checks, bank
drafts or bank statements) for other than internal use in a manner not
consented to prior to use, provided, however, that the Fund shall approve
all uses of its name which merely refer in accurate terms to the
appointment of the Bank hereunder or which are required by the Securities
and Exchange Commission or a state securities commission; and further,
provided that in no event shall such approval be unreasonably withheld.
10. Security. The Bank represents and warrants that, to the best of its
knowledge, the various procedures and systems which the Bank has
implemented with regard to the safeguarding from loss or damage
attributable to fire, theft or any other cause (including provision for
twenty-four hours a day restricted access) of the Fund's blank checks,
certificates, records and other data and the Bank's records, data,
equipment, facilities and other property used in the performance of its
obligations hereunder are adequate, and that it will make such changes
therein from time to time as in its judgment are required for the secure
performance of its obligations hereunder. The Bank shall review such
systems and procedures on a periodic basis and the Fund shall have access
to review these systems and procedures.
11. Insurance. The Bank shall maintain insurance of the types and in the
amounts deemed by it to be appropriate and shall notify the Fund should any
of its insurance coverage be changed for any reason. Such notification
shall include the date of change and the reason or reasons therefor. The
Bank shall notify the Fund of any material claims against the Bank, whether
or not they may be covered by insurance, and shall notify the Fund from
time to time as may be appropriate of the total outstanding claims made by
the Bank under its insurance coverage. To the extent that policies of
insurance may provide for coverage of claims for liability or indemnity by
the parties set forth in this Agreement, the contracts of insurance shall
take precedence, and no provision of this Agreement shall be construed to
relieve an insurer of any obligation to pay claims to the Fund, the Bank or
other insured party which would otherwise be a covered claim in the absence
of any provision of this Agreement.
12. Indemnification.
A. The Fund shall indemnify and hold the Bank harmless against any losses,
claims, damages, liabilities or expenses (including reasonable counsel fees
and expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other than
the Fund, including by a shareholder, which names the Bank and/or the Fund
as a party and is not based on and does not result from the Bank's willful
misfeasance, bad faith or negligence or reckless disregard of duties, and
arises out of or in connection with the Bank's performance hereunder; or
(2) any claim, demand, action or suit (except to the extent contributed
to by the Bank's willful misfeasance, bad faith or negligence or reckless
disregard of duties) which results from the negligence of the Fund, or from
the Bank's acting upon any instruction(s) reasonably believed by it to have
been executed or communicated by any person duly authorized by the Fund, or
as a result of the Bank's acting in reliance upon advice reasonably
believed by the Bank to have been given by counsel for the Fund, or as a
result of the Bank's acting in reliance upon any instrument or stock
certificate reasonably believed by it to have been genuine and signed,
countersigned or executed by the proper person.
B. The Bank shall indemnify and hold the Fund harmless against any losses,
claims, damages, liabilities or expenses (including reasonable counsel fees
and expenses) resulting from any claim, demand, action or suit brought by
any person other than the Bank, which names the Fund and/or the Bank as a
party and is based upon and arises out of the Bank's willful misfeasance,
bad faith or negligence or reckless disregard of duties in connection with
its performance hereunder.
In the event that either party requests the other to indemnify or hold it
harmless hereunder, the party requesting indemnification (the Indemnified
Party) shall inform the other party (the Indemnifying Party) of the
relevant facts known to Indemnified Party concerning the matter in
question. The Indemnified Party shall use reasonable care to identify and
promptly to notify the Indemnifying Party concerning any matter which
presents, or appears likely to present, a claim for indemnification. The
Indemnifying Party shall have the election of defending the Indemnified
Party against any claim which may be the subject of indemnification or of
holding the Indemnified Party harmless hereunder. In the event the
Indemnifying Party so elects, it will so notify the Indemnified Party and
thereupon the Indemnifying Party shall take over defense of the claim and,
if so requested by the Indemnifying Party, the Indemnified Party shall
incur no further legal or other expenses related thereto for which it shall
be entitled to indemnity or to being held harmless hereunder; provided,
however, that nothing herein shall prevent the Indemnified Party from
retaining counsel at its own expense to defend any claim. Except with the
Indemnifying Party's prior written consent, the Indemnified Party shall in
no event confess any claim or make any compromise in any matter in which
the Indemnifying Party will be asked to indemnify or hold Indemnified Party
harmless hereunder.
13. Acts of God, etc. The Bank shall not be liable for delays or errors
occurring by reason of circumstances beyond its control, including but not
limited to acts of civil or military authority, national emergencies, work
stoppages, fire, flood, catastrophe, acts of God, insurrection, war, riot,
or failure of communication equipment of common carriers or power supply.
In the event of equipment breakdowns beyond its control, the Bank shall, at
no additional expense to the Fund, take reasonable steps to minimize
service interruptions and mitigate their effects but shall have no
liability with respect thereto. The Bank shall enter into and shall
maintain in effect with appropriate parties one or more agreements making
reasonable provision for emergency use of electronic data processing
equipment.
14. Amendments. The Bank and the Fund shall regularly consult with each
other regarding the Bank's performance of its obligations and its
compensation hereunder. In connection therewith, the Fund shall submit to
the Bank at a reasonable time in advance of filing with the Securities and
Exchange Commission copies of any amended or supplemented registration
statements (including exhibits) under the Securities Act of 1933, as
amended, and the Investment Company Act of 1940, as amended, and, a
reasonable time in advance of their proposed use, copies of any amended or
supplemented forms relating to any plan, program or service offered by the
Fund. Any change in such material which would require any change in the
Bank's obligations hereunder shall be subject to the Bank's approval, which
shall not be unreasonably withheld. In the event that a change in such
documents or in the procedures contained therein materially increases the
cost to the Bank of performing its obligations hereunder, the Bank shall be
entitled to receive reasonable compensation therefor.
15. Duration, Termination, etc. Neither this Agreement nor any
provisions hereof may be changed, waived, discharged or terminated orally,
but only by written instrument which shall make specific reference to this
Agreement and which shall be signed by the party against which enforcement
of such change, waiver, discharge or termination is sought.
This Agreement shall continue in effect until December 31, 1993 and
indefinitely thereafter so long as such continuance is approved at least
annually by vote of the Fund's Board of Trustees; provided, however, that
this Agreement may be terminated at any time by six months' written notice
given by the Bank to the Fund or six months' written notice given by the
Fund to the Bank; and provided further that this Agreement may be
terminated immediately at any time for cause either by the Fund or by the
Bank in the event that such cause remains unremedied for a reasonable
period of time not to exceed ninety days after receipt of written
specification of such cause. Any such termination shall not affect the
rights and obligations of the parties under paragraph 12 hereof.
Upon the termination hereof, the Fund shall pay to the Bank such
compensation as may be due for the period prior to the date of such
termination. In the event that the Fund designates a successor to any of
the Bank's obligations hereunder, the Bank shall, at the expense and
direction of the Fund, transfer to such successor all relevant books,
records and other data established or maintained by the Bank hereunder
(including, if the Bank has been acting as Transfer Agent, a certified list
of the shareholders of the Fund with name, address, and, if provided,
taxpayer identification or Social Security number, and a complete record of
the account of each shareholder). To the extent that the Bank incurs
expenses related to a transfer of responsibilities to a successor, the Bank
shall be entitled to be reimbursed for such expenses, including any
out-of-pocket expenses reasonably incurred by the Bank in connection with
the transfer.
16. Shareholder Liability. The Bank is hereby expressly put on notice of
(i) the limitation of shareholder liability as set forth in the Trust
Instrument of the Fund and (ii) of the provisions in the Trust Instrument
permitting the establishment of separate series (or Portfolios) and
limiting the liability of each Portfolio to obligations of that Portfolio;
the Bank hereby agrees that obligations assumed by the Fund pursuant to
this Agreement are in all cases assumed on behalf of a particular
Portfolio, and each such obligation shall be limited in all cases to that
Portfolio and its assets. The Bank agrees that it shall not seek
satisfaction of any such obligation from the shareholders or any individual
shareholder of the Fund, nor from the Trustees or any individual Trustee of
the Fund.
17. Miscellaneous. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed and enforced in accordance with
and governed by the laws of the Commonwealth of Massachusetts. The
captions in this Agreement are included for convenience of reference only
and in no way define or delimit any of the provisions hereof or otherwise
affect their construction or effect. This Agreement may be executed
simultaneously in two counterparts, each of which taken together shall
constitute one and the same instrument. The Bank understands that the
rights and obligations of each Portfolio under the Trust Instrument are
separate and distinct from those of any and all other Portfolios.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
UNITED MISSOURI BANK, N.A.
By: /s/Duane E. Schempp
Title: Vice President
DAILY MONEY FUND
CAPITAL RESERVES
MUNICIPAL MONEY MARKET PORTFOLIO
By Gary L. French
Title: Treasurer
LG932700.007
Dated as of September 30, 1993
Daily Money Fund:
Capital Reserves: Municipal Money Market Portfolio (the Portfolio)
SCHEDULE A: TRANSFER AGENT, DIVIDEND AND DISTRIBUTION DISBURSING
AGENT, AND SHAREHOLDER SERVICING AGENT
I. Services To Be Performed: United Missouri Bank, N.A. shall be
responsible for the following:
A. United Missouri Bank, N.A. shall administer and/or perform transfer
agent functions for the Portfolio. It will:
(1) receive for acceptance, orders for the purchase of Portfolio shares,
and promptly deliver payments received by it and appropriate documentation
therefor to the Portfolio's custodian;
(2) pursuant to purchase orders, issue the appropriate number of Portfolio
shares and properly register such shares to the appropriate shareholder
account;
(3) receive for acceptance, redemption requests and redemption instructions
(including redemptions by check transmitted to United Missouri Bank, N.A.
by any duly appointed check processing agent) and process payments for
redemption to shareholders in accordance with the terms, conditions and
rules governing each shareholder's account as set forth in the Portfolio's
prospectus, statement of additional information and each shareholder's
account application;
(4) effect transfers of shares by the registered owners thereof upon
receipt of appropriate instructions; and
(5) prepare and mail to Portfolio shareholders such confirmations and
statements of account as may be required under applicable law and as may be
reasonably requested by the Portfolio.
B. United Missouri Bank, N.A. shall act as service agent of the Portfolio
in connection with dividend and capital gains distributions by the
Portfolio. It will:
(1) for each Portfolio shareholder who has elected to receive dividends
and/or distributions in cash, send payments to shareholders in accordance
with the shareholder's election; and
(2) for each Portfolio shareholder who has elected to receive dividends
and/or distributions in shares of the Portfolio or in shares of another
mutual fund for which United Missouri Bank, N.A. serves as transfer agent,
credit the shareholder's account(s) for the proper number of shares.
C. In addition to the foregoing services, United Missouri Bank, N.A. shall:
(1) perform all the customary administrative services related to its
transfer agent and dividend and distribution disbursing agent functions,
including, but not limited to:
(a) maintaining all shareholder accounts,
(b) preparing shareholder meeting lists, and supervising, but not paying
for, various agents and contractors employed to mail proxy materials and
receive and tabulate proxies,
(c) typesetting, printing and mailing shareholder reports and prospectuses
to current Portfolio shareholders,
(d) withholding taxes (including withholding for foreign taxes) for
shareholders for whom withholdings are required by federal or state
regulation and filing all required reports with respect thereto,
(e) preparing, distributing and filing all requisite shareholder tax
statements on appropriate forms and responding to inquiries with respect
thereto, and
(f) establishing and supervising the operation of bank accounts for the
receipt of funds for share purchases and the payment of dividends,
distributions and redemption proceeds;
(2) furnish the Portfolio with all necessary reports of Portfolio shares
sold in each state in order to permit compliance with the state securities
laws; and
(3) as required, respond to shareholder inquiries relating to the status of
their accounts, Portfolio performance, distributions, and share price, and
furnish shareholders with copies of account histories and make adjustments
to shareholder accounts to correct account files.
II. Compensation: For the performance of its obligations hereunder, the
Portfolio shall pay United Missouri Bank, N.A. in accordance with this
Schedule A.
A. Certain Defined Terms
For purposes of this Schedule A, the following terms shall have the
meanings indicated:
An "account" shall mean each and every account or subaccount of a
Portfolio shareholder of record maintained on a transfer agency system by
United Missouri Bank, N.A. or on a transfer agency system operated by
divisions and subsidiaries of FMR Corp. or any other entity to whom United
Missouri Bank, N.A. has delegated all or a portion of its duties under this
Schedule A such term shall not include an account maintained on any
subaccounting system operated by broker, bank or other intermediary who is
acting on behalf of its customer and who is not acting pursuant to a
delegation of duties by United Missouri Bank, N.A..
"Basic Retail Account" shall mean any account of the Portfolio other than
a USA Account, an Institutional Trading Account, a Broker-Dealer Trading
Account or an Institutional Employee Benefit Account.
"Broker-Dealer Trading Account" shall mean any account of the Portfolio
maintained on behalf of a broker-dealer (other than broker-dealer
affiliates of FMR) or its clients.
"Centralized Service Transaction" shall mean each monetary transaction
described in Exhibit A to this Schedule A executed on behalf of an
institutional customer (such as a bank trust department, corporation or
investment adviser), or its clients who has no remote system access and for
whom United Missouri Bank, N.A. inputs all account activity information and
performs all account maintenance functions.
"Institutional Employee Benefit Account" shall mean an account of the
Portfolio maintained on behalf of a corporation, association, partnership
or other employer for the benefit of employees, by which employer and
employee contributions are invested in the Portfolio as part of a qualified
or non-qualified employee benefit plan primarily through payroll
deductions.
"Institutional Trading Account" shall mean any account maintained on
behalf of an institutional client (such as a bank, institutional advisor,
insurance company or law firm), other than a broker-dealer or its clients.
"Remote Service Transaction" shall mean each monetary transaction
described in Exhibit A-1 to the Schedule A executed on behalf of an
institutional customer (such as a bank, investment adviser, insurance
company or law firm), or its clients, who utilizes remote system access
equipment to input account activity information and to perform account
maintenance functions.
"USA Account" shall mean any account of the Portfolio established as the
core feature under the Fidelity USA Program, into which brokerage account
cash balances may be swept and from which brokerage account, credit card
and check debits may be satisfied.
B. Schedule of Account and Transaction Fees
(1) Basic Retail Accounts
(a) Account Fees - The Portfolio shall pay an account fee at the annual
rates (adjusted in accordance with the procedures set forth in II.C.(1)(a)
and (c) below) of $10.00) for Basic Retail Accounts with a value of less
than $5,000 and $13.75 for Basic Retail Accounts with a value of $5,000 or
more (the "December 31, 1992 Retail Account Fee Rates").
(b) Transaction Fees - For all Basic Retail Accounts the Portfolio shall
pay a fee (adjusted in accordance with the procedures set forth in
II.C.(1)(a) and (c) below) of $5.61 for each transaction described in
Exhibit A-1 to this Schedule A (the "December 31, 1992 Retail Transaction
Fee Rate").
(2) USA Accounts
(a) Account Fees - The Portfolio shall pay an account fee, in lieu of the
fees set forth in II.B.(1)(a), at the annual rate (adjusted in accordance
with the procedures set forth in II.C.(1)(b) and (c) below) of $12.35 for
each USA Account (the "December 31, 1992 Account Fee Rate").
(b) Transaction Fees - For all USA Accounts the Portfolio shall pay a fee
(adjusted in accordance with the procedures set forth in II.C.(1)(b)
below), in lieu of the fees set forth in II.B.(1)(b), of $0.74 for each
transaction described in Exhibit A-2 to this Schedule A (the "December 31,
1992 USA Transaction Fee Rate").
(c) Shareholder Service Fees - The foregoing Account Fees and Transactions
Fees, shall be in addition to, and not be reduced by, the fees charged to
shareholders directly for participating in the Fidelity USA program.
(3) Institutional Trading Accounts
(a) Account Fees - The Portfolio shall pay an account fee, in lieu of the
fees set forth in II.B.(1)(a) at the annual rate of $95.00 for each
Institutional Trading Account.
(b) Transaction Fees - The Portfolio shall pay a fee, in lieu of the fees
set forth in II.B.(1)(b), of $20.00 for each Centralized Service
Transaction and $17.50 for each Remote Service Transaction of such
Institutional Trading Account.
(4) Broker-Dealer Trading Accounts
(a) Account Fees - The Portfolio shall pay an account fee, in lieu of the
fees set forth in II.B.(1)(a), at the annual rate of $30.00 for each
Broker-Dealer Institutional Trading Account.
(b) Transaction Fees - The Portfolio shall pay a fee, in lieu of the fees
set forth in II.B.(1)(b) of $6.00 for each Centralized Service Transaction
and each Remote Service Transaction of such Broker-Dealer Institutional
Trading Account.
(5) Institutional Employee Benefit Plan Accounts - The Portfolio shall pay
a fee, in lieu of the fees set forth in II.B.(1), based upon the month end
value of all Institutional Employee Benefit Plan Accounts at an annual rate
of 0.30%.
C. Rate Changes
(1) Basic Retail Account and USA Account Rate Adjustments
(a) Annual Cost of Living Adjustment for Basic Retail Accounts - The
December 31, 1992 Retail Account Fee Rates and Retail Transaction Fee Rates
set forth in II.B.(1) of this Schedule A shall be adjusted annually for
increases in the cost of living as of the first day of January. On each
January 1, beginning January 1, 1994, the rates shall be adjusted by
multiplying 70% of the percentage change in the National Consumer Price
Index for Urban Areas Index (the Index) for the preceding calendar year
times the rates in effect for the preceding calendar year and adding the
results to the respective rates for the preceding calendar year to
determine the then current rate for the ensuing calendar year. Each
adjustment shall be rounded to the nearest one cent.
SAMPLE CALCULATION: Assuming the December 31, 1992 Retail Account Rate was
$7.00 and the December 31, 1992 Retail Transaction Fee Rate was $5.00, that
the Index reported a change in wage and price levels for the 12 months
ended December 31, 1993 of 5%, then the adjusted rates for the period
beginning January 1, 1994 would be calculated as follows:
Basic Retail Account Fee Rate Computation:
70% x 5% x $7.00 = $ .25
Add 7.00
1994 Basic Retail Account Fee $ 7.25
Basic Retail Transaction Fee Rate Computation:
70% x 5% x $5.00 = $ .18
Add 5.00
1994 Basic Retail Transaction Fee $ 5.18
(b) Annual Cost of Living Adjustment for USA Accounts - The December 31,
1992 USA Account Fee Rate and USA Transaction Fee Rate set forth in
II.B.(2) of this Schedule A shall be adjusted annually for increases in the
cost of living as of the first day of January. On each January 1,
beginning January 1, 1994, the rates shall be adjusted by multiplying 70%
of the percentage change in the Index for the preceding calendar year times
the rates in effect for the preceding calendar year and adding the results
to the respective rates for the preceding calendar year to determine the
then current rate for the ensuing calendar year.
SAMPLE CALCULATION: Assuming the December 31, 1992 USA Account Rate was
$11.00 and the December 31, 1992 USA Transaction Fee Rate was $.65, that
the Index reported a change in wage and price levels for the 12 months
ended December 31, 1993 of 5%, then the adjusted rates for the period
beginning January 1, 1994 would be calculated as follows:
USA Account Fee Rate Computation:
70% x 5% x $11.00 = $ .39
Add 11.00
1994 USA Account Fee $ 11.39
USA Transaction Fee Rate Computation:
70% x 5% x $0.65 = $ .02
Add .65
1994 USA Transaction Fee $ 0.67
(c) Postal Rate Changes - On the first day of any month following the
month in which the United States Postal Service implements a postal rate
increase, or if the increase is effective with the first day of a month,
then commencing on that first day, (Effective Date) the Account Fees and
Transaction Fees for Basic Retail Accounts and USA Accounts then in effect
shall be adjusted by a Postage Increase Factor (PIF). The PIF adjustment
shall be computed in the following fashion. The Account Fees and the
Transaction Fees for Basic Retail Accounts and USA Accounts then in effect
shall each be multiplied by the PIF and the resulting amounts shall be
added to the respective current rates. The PIF shall be determined by
dividing the revenues derived from the Account Fees and Transaction Fees
for Basic Retail Accounts and USA Accounts for the 12 months preceding the
Effective Date of the postal rate increase into the postal costs associated
with Basic Retail Accounts and with USA Accounts, respectively, for the
same 12-month period and then multiplying the result times a Class Cost
Factor. The Class Cost Factor shall be derived by calculating the dollar
weighted postage increase for all classes of postage being utilized to
perform services to Basic Retail Accounts and to USA Accounts,
respectively. The dollar-weighted postage increase shall be calculated by
multiplying the percentage increase for each class by the postal costs for
each such class and dividing the sum of such calculations by the total
postage costs for the 12 months preceding the Effective Date. Each
adjustment should be rounded to the nearest one cent.
SAMPLE CALCULATION: Postal rate adjustments would be calculated for
Account Fees and Transaction Fees for Basic Retail Accounts and USA
Accounts in the example set forth below for Basic Retail Accounts, assuming
(a) that on May 31 prior to the implementation of a postal rate increase,
the annual rate for Basic Retail Account Fees is $7.00 and the Transaction
Fee rate is $5.00, (b) that for the previous 12 months the revenues from
such fees are $10 million, and (c) that there were following three classes
of Basic Retail Account postage costs for the same period and the following
increases occur on June 1:
Postage 12 months of Postage Rate
Class Postage Cost Increases
1st $400,000 6%
2nd $100,000 9%
3rd $200,000 11%
STEP 1: CALCULATION OF THE DOLLAR-WEIGHTED POSTAGE INCREASE.
$400,000 x 6% = $ 24,000
$100,000 x 9% = 9,000
$200,000 x 11% = 22,000
$ 55,000
divided by total postage costs $700,000
Class Cost Factor .0785
STEP 2: CALCULATION OF POSTAGE INCREASE FACTOR (PIF).
12 month postage costs $700,000
divided by 12 month revenues 10,000,000
.07
multiplied by the Class Cost Factor .0785
PIF .0055
STEP 3: CALCULATION OF JUNE 1 RATES.
Basic Retail Account Fee computation:
$7.00 x .0055 = $ .04
Add 7.00
6/1 Basic Retail Account Fee $7.04
Basic Retail Transaction Fee Computation:
$5.00 x .0055 = $ .03
Add 5.00
6/1 Basic Retail Transaction Fee $5.03
D. Schedule of Payments
United Missouri Bank, N.A. shall be entitled to receive the account fee
in respect of an account under the applicable provisions of paragraph B
above in each year in which such account has a share balance greater than
zero as of January 1, and in respect of each account opened after January 1
of such year. Accounts with a share balance of zero shall be closed as of
December 31 each year, and no account fee shall be paid in respect of such
accounts for the following year unless it is reopened. Account fees shall
be billed monthly on a pro rata basis at one-twelfth of the applicable
annual rate as of the end of each calendar month for each account open or
opened during the month. An account shall be a billable account as of the
end of the month in which it is opened, and the end of each month
thereafter through December 31, even though the value of such account may
become zero. The net asset value of an account as most recently determined
in accordance with the Portfolio's prospectus before 11:59 p.m., Boston
time, on the last calendar day of a month shall be the value used to
determine the applicable fee for the entire month. United Missouri Bank,
N.A. may bill for accounts maintained on transfer agency systems maintained
by other divisions and subsidiaries of FMR Corp. or any other entity to
whom United Missouri Bank, N.A. has delegated all or a portion of its
duties under this Schedule A. Transaction fees with respect to an account
are billable by United Missouri Bank, N.A. as of the end of each month in
which the transaction occurs. In the event that a transaction is canceled
or corrected, the cancellation or correction shall be reflected as a credit
to the Fund against billable transactions for the month in which the
cancellation or correction occurs.
E. Shareholder Charges - United Missouri Bank, N.A. shall be entitled to
charge a shareholder directly, and may redeem shares of the Portfolio held
in a shareholder's account, for:
(1) Exchange Fees - United Missouri Bank, N.A. may from time to time
receive, through payment by shareholders of the Portfolio, all or a portion
of an exchange fee in an amount and under circumstances authorized by the
Trustees of the Fund. If a portion of any exchange fee collected is to be
allocated to the Portfolio, such amount shall be applied to reduce
transaction fees or other charges otherwise payable to United Missouri
Bank, N.A. pursuant to this Agreement in accordance with the allocation
authorization by the Board of Trustees of the Fund.
(2) Wire fees - any fees in effect on January 1, 1993 as disclosed in the
Portfolio's Prospectus or which may be approved by the Trustees of the Fund
for executing a wire transfer of the proceeds of any wire redemption order
placed by a shareholder.
(3) Dishonored Checks - any fees reasonably related to cost and imposed by
United Missouri Bank, N.A. when a shareholder purchases shares by check and
the purchase is subsequently canceled because the check was dishonored by
the shareholder's bank.
(4) Account Histories - any fees reasonably related to cost and imposed by
United Missouri Bank, N.A. to prepare, at the request of a shareholder, an
account history or provide other research information for any year(s) prior
to the calendar year in which the request is made by the shareholder.
(5) Miscellaneous Supplemental Fees - any fees imposed by United Missouri
Bank, N.A. or any affiliate of United Missouri Bank, N.A. for providing
supplemental services to a shareholder pursuant to separate arrangements
with the customer, including but not limited to fees for personal advisory
services, fees for providing check redemption services, for maintaining and
providing services to an individual retirement custodian account, a Keogh
custodian account, a Prototype Profit Sharing or Money Purchase Pension
Plan account or for other similar supplemental services.
III. Costs and Expenses
A. Allocation of Costs. United Missouri Bank, N.A. will be responsible for
all expenses, costs and other charges arising out of the performance of its
obligations hereunder, including the fees and disbursements of any third
party retained to perform any of the services to the Portfolio on behalf of
United Missouri Bank, N.A. (including the fees and handling charges of
brokers, banks and other intermediaries for forwarding shareholder reports
and statements with respect to each account for which an account fee is
imposed); all paper, typesetting, printing, stationery, envelopes, postage,
labeling costs, mail sorting and other similar costs of preparing and
mailing any dividend or redemption payment, all shareholder reports
(including the cost of printing and mailing prospectuses sent to current
shareholders), tax statements, confirmations, notices and statements of
account; all telephone and computer equipment and usage charges; and all
personnel expenses, heat, light, rent, utilities, equipment purchases or
rentals; all insurance premiums associated with the provision of services
under this agreement, unless the Trustees shall have specifically
authorized an allocation of all or a portion of the premium to the
Portfolio; all costs associated with the provision of check redemption
services (including, the costs of printing and mailing of checks and
checkbooks to shareholders, the charges of any vendor retained by the
Portfolio to process checks for payment, and the charges of sending
canceled checks to shareholders); and other necessary expenses associated
with the provision of services hereunder. Notwithstanding the foregoing,
the Portfolio shall be required to bear all expenses for all accounts,
including USA Core Accounts, Institutional Trading Accounts, Broker-Dealer
Trading Accounts and Institutional Employee Benefit Accounts, associated
with: (1) the printing, handling, forwarding or mailing of shareholder
reports and notices to shareholders who own shares through an account of a
broker, bank or other intermediary if United Missouri Bank, N.A. is not
compensated by an account fee for each sub-account, (2) the charges of any
bank for establishing and operating accounts for the receipt of funds for
share purchases and the payment of dividends, distributions and redemption
proceeds, (3) all fees and expenses of registering shares for sale under
the state securities laws, and (4) the holding of annual or special
meetings of Portfolio shareholders, including: the costs of typesetting,
printing, postage and mailing notices, proxy cards and proxy statements
(and, if required, annual reports sent to shareholders who have opened
accounts subsequent to the last regular mailing date of such reports to
shareholders); the fees and other disbursements of any agent hired to mail
proxy materials and/or tabulate proxies; all charges incurred by any proxy
soliciting agent; the reasonable and customary fees and handling charges of
brokers, banks and other intermediaries for forwarding proxy materials; and
all other customary expenses associated with the holding of shareholder
meetings.
B. Reports. Once each year, United Missouri Bank, N.A. shall submit to the
Fund and the other funds advised by Fidelity Management & Research
Company with which United Missouri Bank, N.A. has Transfer Agent Agreements
(the Funds) a report setting forth the total amount of costs and expenses
incurred by United Missouri Bank, N.A. in the performance of its
obligations to the Funds under the Transfer Agent Agreements and the total
amounts payable by the Funds for such services. United Missouri Bank, N.A.
shall also provide annually a report by an independent certified public
accounting firm (who may be the auditors of United Missouri Bank, N.A.) on
United Missouri Bank, N.A.'s income and expenses. The term "Transfer Agent
Agreements" shall mean this agreement between United Missouri Bank, N.A.
and the Fund and agreements of like tenor between United Missouri Bank,
N.A. and other Funds.
FMR Corp.
By: /s/Dennis M. McCarthy
Name: ______________________
Title: ______________________
United Missouri Bank, N.A
By: Duane E Schempp
Name: ______________________
Title: ______________________
Daily Money Fund
Capital Reserves: Municipal Money MarketPortfolio
By: ______________________
Name: Gary L. French
Title: Treasurer
Exhibit A-1
Monetary Transaction Types
The following monetary transactions may be billed by United Missouri Bank,
N.A. under the Transfer Agent Agreement with Fidelity Investment Series:
Fidelity Advisor High Income Municipal Portfolio:
Direct Payments - an investor pays cash and shares are issued pursuant to a
single order to purchase shares.
Direct Redemption - an investor's shares are redeemed and a check is sent
for redemption proceeds.
Exchange Redemption - A shareholder has entered an order to sell shares of
the Portfolio and invest proceeds in another Fund that permits exchange
privileges.
Exchange Purchase - A shareholder has entered an order of redemption to
another Fund and directed that proceeds of the redemption be invested in
the Portfolio.
Transfer - The change of ownership of an account is registered, by opening
a new account in the Portfolio and transferring of shares to the new
account.
Wire Purchases - An investor places an order for the purchase of shares and
purchase price is wired to the Portfolio.
Purchase by Directed Dividend - Pursuant to standing instruction of a
shareholder, shares of the Portfolio are purchased and the purchase price
is paid by a dividend from a different Fund.
Check Redemption - A shareholder's check is presented for payment and
shares sufficient to honor the check are redeemed.
Wire Liquidation - A shareholder requests that a specified number of shares
or dollar amount of shares be redeemed and a bank wire is sent for the
proceeds of redemption, less any applicable bank charges for the wire.
Electronic Funds Purchase - Shares are purchased by an electronic funds
transfer.
Electronic Funds Redemption - Shares are redeemed and the proceeds of
redemption are transferred electronically to the shareholder.
Systematic Withdrawal Plan Redemptions - Pursuant to standing instructions,
a shareholder redeems a specified amount of shares.
Exhibit A-2
USA Account Transaction Fees
The following monetary transactions may be billed by United Missouri Bnak,
N.A. under the Transfer Agent Agreement Fidelity Investment Series:
Fidelity Advisor High Income Municipal Portfolio in connection with a USA
Account:
Cash Advances - Each cash advance to a shareholder from a participating
financial institution for which the debit balance in the Fidelity USA
account is satisfied by a redemption of Portfolio shares.
Checks Paid - Each check drawn by a shareholder (other than a check issued
in connection with the Fidelity USA bill payment program) which is
presented for payment and results in a redemption of Portfolio shares.
Checks Received - Each check which is deposited into a Fidelity USA account
and results in the purchase of Portfolio shares.
Debit Card Purchases - Each use of a debit (or credit) card issued to a
Fidelity USA account participant to pay for goods or services which results
in the redemption of Portfolio shares in an account sufficient to cover the
debit (or credit) card charge.
Direct Deposit - Each pre-authorized deposit of funds through a
participating financial institution by a Fidelity USA program participant
to such program participant's Fidelity USA account which results in a
purchase of Portfolio shares.
EFT Received - Each electronic transfer of funds to a Fidelity USA account
by a Fidelity USA program participant which results in a purchase of
Portfolio shares.
EFT Paid - Each electronic transfer of funds by a Fidelity USA program
participant from such program participant's Fidelity USA account, which
results in a redemption of Portfolio shares.
Wire Received - Each wire transfer of funds by a Fidelity USA program
participant to a Fidelity USA account, which results in a purchase of
Portfolio shares.
Wire Sent - Each wire transfer of funds by a Fidelity USA program
participant from such program participant's Fidelity USA account, which
results in a redemption of Portfolio shares.
Automatic Teller - Each use of an automatic teller machine by a Fidelity
USA program participant to secure cash or to transfer funds, which results
in a redemption of Portfolio shares.
LG932670041
APPOINTMENT OF SUB-TRANSFER AGENT
DAILY MONEY FUND
CAPITAL RESERVES MUNICIPAL MONEY MARKET PORTFOLIO
AGREEMENT dated as of September 30, 1993 between FMR Corp., a
Massachusetts corporation with principal offices at 82 Devonshire Street,
Boston, Massachusetts, Fidelity Investments Institutional Operations
Company (FIIOC), a division of FMR Corp. with principal offices at 82
Devonshire Street, Boston, Massachusetts, and United Missouri Bank, N.A.
(the Bank), with principal offices at 1010 Grand Avenue, Kansas City,
Missouri.
WHEREAS, the Bank has entered into a Transfer Agent Agreement dated
September 30, 1993 (the Agreement) with Daily Money Fund on behalf of
Capital Reserves Municipal Money Market Portfolio (the Fund), a Delaware
business trust with principal offices at 82 Devonshire Street, Boston,
Massachusetts, under which the Bank has assumed certain responsibilities,
including:
(i) receive for acceptance, orders for the purchase of Fund shares, and
promptly deliver payments received by it and appropriate documentation
therefor to the Fund's custodian;
(ii) pursuant to purchase orders, issue the appropriate number of Fund
shares and properly register such shares to the appropriate shareholder
account;
(iii) receive for acceptance, redemption requests and redemption
instructions (including redemptions by check transmitted to FIIOC by any
duly appointed check processing agent) and process payments for redemption
to shareholders in accordance with the terms, conditions and rules
governing each shareholder's account as set forth in the Fund's prospectus,
statement of additional information and each shareholder's account
application;
(iv) effect transfers of shares by the registered owners thereof upon
receipt of appropriate instructions; and
(v) prepare and mail to Fund shareholders such confirmations and statements
of account as may be required under applicable law and as may be reasonably
requested by the Fund.
Further, the Bank has assumed certain service agent responsibilities in
connection with dividend and capital gain distributions by the Fund,
including:
(i) for each Fund shareholder who has elected to receive dividends and/or
distributions in cash, send payments to shareholders in accordance with the
shareholder's election; and
(ii) for each Fund shareholder who has elected to receive dividends and/or
distributions in shares of the Fund or in shares of another mutual fund for
which FIIOC serves as transfer agent, credit the shareholder's account(s)
for the proper number of shares.
In addition to the foregoing services, the Bank has agreed to:
(i) perform all the customary administrative services related to its
transfer agent and dividend and distribution disbursing agent functions,
including, but not limited to:
(a) maintaining all shareholder accounts,
(b) preparing shareholder meeting lists, and supervising, but not paying
for, various agents and contractors employed to mail proxy materials and
receive and tabulate proxies,
(c) typesetting, printing and mailing shareholder reports and prospectuses
to current Fund shareholders,
(d) withholding taxes (including withholding for foreign taxes) for
shareholders for whom withholdings are required by federal or state
regulation and filing all required reports with respect thereto,
(e) preparing, distributing and filing all requisite shareholder tax
statements on appropriate forms and responding to inquiries with respect
thereto, and
(f) establishing and supervising the operation of bank accounts for the
receipt of funds for share purchases and the payment of dividends,
distributions and redemption proceeds;
(ii) furnish the Fund with all necessary reports of Fund shares sold in
each state in order to permit compliance with the state securities laws;
and
(iii) as required, respond to shareholder inquiries relating to the status
of their accounts, Fund performance, distributions, and share price, and
furnish shareholders with copies of account histories and make adjustments
to shareholder accounts to correct account files.
WHEREAS, the Bank wishes to retain FIIOC, and FIIOC is willing, to carry
out these functions on behalf of the Bank;
NOW THEREFORE, in consideration of the premises and the mutual promises
thereinafter set forth, FIIOC and the Bank hereby agree as follows:
1. The Bank hereby designates FIIOC as its agent pursuant to Paragraph 7
of the Agreement to carry out all of the responsibilities and functions of
the Bank under the Agreement (which is attached as Exhibit A hereto) and
FIIOC agrees to assume all of the Bank's obligations thereunder (including
its responsibility for certain expenses, costs and other charges allocated
to the Bank). The description of all responsibilities and functions
included in the Agreement is incorporated herein as if set forth at length
herein. FIIOC agrees to act as such and to carry out the responsibilities
set forth in the Agreement, upon the terms and conditions therein and
hereinafter set forth and in accordance with the principles of principal
and agent enunciated by the common law. The Bank agrees to supply FIIOC
with all documents, records and other information supplied to the Bank by
the Fund pursuant to the Agreement.
2. In full payment for FIIOC's performance hereunder, the Bank agrees to
pay to FIIOC any and all compensation received from the Fund by the Bank
pursuant to the Agreement and any written Schedules which may constitute
attachments thereto (Schedules). The Bank shall undertake to collect from
the Fund all compensation appropriately due and owing to it under the
Agreement.
3. The Bank is entitled to indemnification under the Agreement in
accordance with Paragraph 12. The Bank agrees to indemnify FIIOC for
FIIOC's losses, claims, damages, liabilities, and expenses (including
reasonable counsel fees and expenses) (losses) to the extent that the Bank
is entitled to and receives indemnification from the Fund pursuant to
Paragraph 12 of the Agreement in connection with the events upon which
FIIOC's indemnification claim is based. The Bank agrees to advise the Fund
of any claim of FIIOC for indemnification arising in connection with
FIIOC's activities in carrying out the responsibilities of the Bank as
provided in the Agreement. Otherwise, the Bank shall not be required to
indemnify FIIOC in connection with FIIOC's losses hereunder unless the
Bank's own negligence, willful misconduct or bad faith contributed to such
losses, and then only to the extent of the Bank's contribution thereto.
The Bank shall not be liable for any act or omission of FIIOC in carrying
out the responsibilities assigned to FIIOC. FIIOC shall hold the Bank
harmless from any losses in connection with the Agreement, except to the
extent that such losses were contributed to by the Bank's own negligence,
willful misconduct, or bad faith.
4. FIIOC represents and warrants that, to the best of its knowledge, the
various procedures and systems that FIIOC has implemented with regard to
safeguarding from loss or damage attributable to fire, theft or any other
cause (including provision for twenty-four hour a day restricted access)
the Fund's blank checks, records, certificates, and other data and FIIOC's
records, data, equipment, facilities and other property used in the
performance of its obligations hereunder are adequate and that it will make
such changes therein from time to time as in its judgment are required for
the secure performance of its obligations hereunder. FIIOC shall review
such systems and procedures on a period basis; and the Bank shall have no
obligation to review these systems and procedures.
5. Each party agrees to perform such further acts and execute such
further documents as are necessary to effectuate the purposes hereof. This
agreement shall be construed and enforced in accordance with and governed
by the laws of the Commonwealth of Massachusetts. This agreement may be
executed simultaneously in two counterparts, each of which taken together
shall constitute one and the same instrument.
6. The Bank shall not agree to any agreement or waiver of the provisions
of the Agreement without the written consent of FIIOC. This Agreement
shall continue in effect until December 31, 1993 and thereafter as the
parties may mutually agree; provided, however, that this agreement may be
terminated at any time by six months' written notice given by FIIOC to the
Bank or by the Bank to FIIOC; and further provided that this agreement may
be terminated immediately at any time by the Bank in the event that the
Agreement between the Fund and the Bank is terminated.
7. FIIOC and the Bank are hereby expressly put on notice of (i) the
limitation of shareholder liability as set forth in the Trust Instrument of
the Fund and (ii) of the provisions in the Trust Instrument permitting the
establishment of separate series (or Portfolio(s)) and limiting the
liability of each Portfolio to obligations of that Portfolio; the Bank
hereby agrees that obligations assumed by the Fund pursuant to this
Agreement are in all cases assumed on behalf of a particular Portfolio, and
each such obligation shall be limited in all cases to that Portfolio and
its assets. The Bank agrees that it shall not seek satisfaction of any
such obligation from the shareholders or any individual shareholder of the
Fund, nor from the Trustees or any individual Trustee of the Fund.
IN WITNESS WHEREOF, the parties have duly executed this agreement as of
the day and year first above written.
UNITED MISSOURI BANK, N.A. FMR CORP.
By Duane Schempp By /s/Denis M. McCarthy
Treasurer
FIDELITY INVESTMENTS INSTITUTIONAL
OPERATIONS COMPANY
By Virginia M. Meany
Senior Vice President
LG932670049
Dated September 30, 1993
DAILY MONEY FUND:
CAPITAL RESERVES: MUNICIPAL MONEY MARKET PORTFOLIO (the Portfolio)
SCHEDULE B: AGENT TO PERFORM PORTFOLIO PRICING AND BOOKKEEPING
I. Services To Be Performed. United Missouri Bank, N.A. (United Missouri)
shall be responsible for:
A. Accounting relating to the Portfolio and portfolio transactions of the
Portfolio.
B. The determination of net asset value per share of the outstanding shares
of the Portfolio and the offering price, if any, at which shares are to be
sold, at the times and in the manner described in the Trust Instrument or
Partnership Agreement, as amended, and the Prospectus of the Portfolio
(pricing).
C. The determination of distributions, if any.
D. The timely communication of information determined in B and C above, to
the person or persons designated by the Portfolio.
E. Maintaining the books of account of the Portfolio.
F. In conjunction with the Custodian, receiving information and keeping
records about all corporate actions, including, but not limited to , cash
and stock distributions or dividends, stock splits and reverse stock
splits, taken by companies whose securities are held by the Portfolio.
G. Monitoring foreign corporate actions and foreign trades and entering
orders to convert foreign currency or establish contracts for future
settlement of foreign currency.
H. Processing and monitoring the settlement of Variable Rate Demand Notes
and GNMA's.
I. Monitoring and accounting for futures and options.
II. Compensation. For the performance of its obligations hereunder, the
Portfolio shall pay United Missouri an annual fee based on average daily
net assets for each month. The fee schedule is as follows:
Portfolio's
Average Daily Net Assets Fee Rate
$500 million and under .0175%
Over $500 million .0075%
provided, however, that the minimum total annual fee payable by the
Portfolio to United Missouri shall be $20,000 and the maximum total annual
fee payable by the Portfolio to United Missouri shall be $750,000. United
Missouri shall be reimbursed for out-of-pocket expenses for pricing,
dividend and interest quotation services and related communications and
telephone charges.
FMR Corp.
By: /s/Denis M. McCarthy
Title: Treasurer
United Missouri Bank, N.A.
By: Duane E. Schempp
Title: Vice President
DAILY MONEY FUND, on behalf of
CAPITAL RESERVES: MUNICIPAL MONEY
MARKET PORTFOLIO
By: Gary L. French
Title: Treasurer
Dated September 30, 1993
DAILY MONEY FUND:
CAPITAL RESERVES MUNICIPAL MONEY MARKET PORTFOLIO (the Portfolio)
SCHEDULE C: AGENT FOR SECURITIES LENDING TRANSACTIONS
I. Services To Be Performed. United Missouri Bank, N.A. (the Bank) shall
be responsible for administering a program of securities lending from the
Portfolio's portfolio by:
A. Carrying out security loan transactions between approved borrowers and
the Portfolio, including assisting Custodian in receiving and returning
collateral for loans.
B. Marking to market loans outstanding each day.
C. Ensuring that the value of collateral for loans is 100% or more of
loaned securities at market price and issuing demands for additional
collateral should the percentage fall below 100%.
The details of operating standards and procedures to be followed shall be
established from time to time by agreement between the Bank and the
Portfolio and shall be expressed in a procedures manual maintained by the
Bank.
II. Compensation. For the performance of its obligations hereunder, the
Portfolio shall pay the Bank according to the following:
Opening a loan $15
Closing a loan $15
Daily mark to market of collateral $ 5
UNITED MISSOURI BANK, N.A.
By: /s/ Duane Schempp
Name: ______________________
Title: Vice President
DAILY MONEY FUND, on behalf of
CAPITAL RESERVES MUNICIPAL MONEY
MARKET PORTFOLIO
By: /s/ Gary L. French
Name: Gary L. French
Title: Treasurer
LG932700.014
DAILY MONEY FUND
CAPITAL RESERVES MUNICIPAL MONEY MARKET PORTFOLIO
SERVICE AGREEMENT WITH UNITED MISSOURI BANK, N.A
Required authorizations and approvals having been obtained, agreement is
hereby made this 30th day of September, 1993 by and between United Missouri
Bank, N.A. (United Missouri), with principal offices at 1010 Grand Avenue,
Kansas City, Missouri, and Daily Money Fund, on behalf of Capital Reserves
Municipal Money Market Portfolio (the Fund), a Delaware business trust
which may issue one or more series of shares of beneficial interest
(Portfolio(s)) with principal offices at 82 Devonshire Street, Boston,
Massachusetts.
Reference to the Fund, when applicable to one or more Portfolios of the
Fund, shall refer to any such Portfolio;
1. Appointments. The Fund hereby appoints and employs United Missouri as
agent to provide those services described in the schedules attached to this
Agreement for the Fund upon notice in writing that the Fund requests such
services. United Missouri shall perform the obligations and the services
set forth in the attached schedules upon the terms and conditions
hereinafter set forth.
2. Documents. The Fund has furnished United Missouri copies of the
Fund's Trust Instrument, Bylaws, a form of Advisory and Service or
Management Contract, Custodian Contract, current Prospectus and Statement
of Additional Information (the Prospectus), any other governing documents
and all forms relating to any plan, program or service offered by the Fund.
The Fund shall furnish promptly to United Missouri a copy of any amendment
or supplement to the above-mentioned documents. The Fund shall furnish to
United Missouri any additional documents requested by it as necessary for
it to perform the services required hereunder.
3. Services to be Performed. United Missouri shall be responsible for
performing as agent, as of the date of this Agreement, the services
described in the following schedules attached hereto and made a part
hereof, as said schedules may be amended from time to time:
Schedule B: Agent for pricing and bookkeeping.
Schedule C: Agent for securities lending transactions.
Operating procedures and standards to be followed for each function may be
established from time to time by agreement between the Fund and United
Missouri. The above schedules may be amended or deleted, or additional
schedules may be included, as deemed necessary from time to time by
agreement between the Fund and United Missouri. Deletion of any schedule
shall be in accordance with the termination provisions of Paragraph 15 of
this Agreement. Each schedule and any amendments thereto shall be dated
and signed by the parties to this Agreement.
4. Record Keeping and Other Information. United Missouri shall create
and maintain all records required by all applicable laws, rules and
regulations relating to the services to be performed as set forth in the
schedules attached hereto, including but not limited to records required by
Section 31(a) of the Investment Company Act of 1940 and the Rules
thereunder, as the same may be amended from time to time. All records
shall be the property of the Fund and shall be available for inspection and
use by the Fund at all times. Where applicable, such records shall be
maintained by United Missouri for the periods and in the places required by
Rule 31a-2 under the Investment Company Act of 1940.
5. Audits, Inspections and Visits. United Missouri shall make available
during regular business hours all records and other data created and
maintained pursuant to this Agreement for reasonable audit and inspection
by the Fund, any agent or person designated by the Fund, or any regulatory
agency having authority over the Fund. Upon reasonable notice by the Fund,
United Missouri shall make available during regular business hours its
facilities and premises employed in connection with its performance of this
Agreement for reasonable visits by the Fund, any agent or person designated
by the Fund, or any regulatory agency having authority over the Fund.
6. Compensation. For the performance of its obligations hereunder, the
Fund shall pay United Missouri in accordance with the fee arrangements
described in each schedule attached hereto.
7. Appointment of Agents. United Missouri, at its expense, may at any
time or times in its discretion appoint (and may at any time remove) one or
more other parties as Agent to perform any or all of the services specified
hereunder and carry out such provisions of this Agreement as United
Missouri may from time to time direct; provided, however, that the
appointment of any such Agent (other than Fidelity Service Co.) shall not
relieve United Missouri of any of its responsibilities or liabilities
hereunder.
8. Use of United Missouri's Name. The Fund shall not use the name of
United Missouri in any Prospectus, sales literature or other material
relating to the Fund in a manner not consented to prior to use; provided,
however, that United Missouri shall approve all uses of its name which
merely refer in accurate terms to its appointments, duties or fees
hereunder or which are required by the Securities and Exchange Commission
or a state securities commission; and further provided, that in no event
shall such approval be unreasonably withheld.
9. Use of Fund's Name. United Missouri shall not use the name of the
Fund or material relating to the Fund on any forms (including any checks,
bank drafts or bank statements) for other than internal use in a manner not
consented to prior to use, provided, however, that the Fund shall approve
all uses of its name which merely refer in accurate terms to the
appointment of United Missouri hereunder or which are required by the
Securities and Exchange Commission or a state securities commission; and
further, provided that in no event shall such approval be unreasonably
withheld.
10. Security. United Missouri represents and warrants that, to the best
of its knowledge, the various procedures and systems which United Missouri
has implemented with regard to the safeguarding from loss or damage
attributable to fire, theft or any other cause (including provision for
twenty-four hours a day restricted access) of the Fund's blank checks,
certificates, records and other data and United Missouri's records, data,
equipment, facilities and other property used in the performance of its
obligations hereunder are adequate, and that it will make such changes
therein from time to time as in its judgment are required for the secure
performance of its obligations hereunder. United Missouri shall review
such systems and procedures on a periodic basis and the Fund shall have
access to review these systems and procedures.
11. Insurance. United Missouri shall maintain insurance of the types and
in the amounts deemed by it to be appropriate and shall notify the Fund
should any of its insurance coverage be changed for any reason. Such
notification shall include the date of change and the reason or reasons
therefor. United Missouri shall notify the Fund of any material claims
against United Missouri, whether or not they may be covered by insurance,
and shall notify the Fund from time to time as may be appropriate of the
total outstanding claims made by United Missouri under its insurance
coverage. To the extent that policies of insurance may provide for
coverage of claims for liability or indemnity by the parties set forth in
this Agreement, the contracts of insurance shall take precedence, and no
provision of this Agreement shall be construed to relieve an insurer of any
obligation to pay claims to the Fund, United Missouri or other insured
party which would otherwise be a covered claim in the absence of any
provision of this Agreement.
12. Indemnification.
A. The Fund shall indemnify and hold United Missouri harmless against any
losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other than
the Fund, including by a shareholder, which names United Missouri and/or
the Fund as a party and is not based on and does not result from United
Missouri's willful misfeasance, bad faith or negligence or reckless
disregard of duties, and arises out of or in connection with United
Missouri's performance hereunder; or
(2) any claim, demand, action or suit (except to the extent contributed
to by United Missouri's willful misfeasance, bad faith or negligence or
reckless disregard of duties) which results from the negligence of the
Fund, or from United Missouri's acting upon any instruction(s) reasonably
believed by it to have been executed or communicated by any person duly
authorized by the Fund, or as a result of United Missouri's acting in
reliance upon advice reasonably believed by United Missouri to have been
given by counsel for the Fund, or as a result of United Missouri's acting
in reliance upon any instrument or stock certificate reasonably believed by
it to have been genuine and signed, countersigned or executed by the proper
person.
B. United Missouri shall indemnify and hold the Fund harmless against any
losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from any claim, demand, action or suit
brought by any person other than United Missouri, which names the Fund
and/or United Missouri as a party and is based upon and arises out of
United Missouri's willful misfeasance, bad faith or negligence or reckless
disregard of duties in connection with its performance hereunder.
In the event that either party requests the other to indemnify or hold it
harmless hereunder, the party requesting indemnification (the Indemnified
Party) shall inform the other party (the Indemnifying Party) of the
relevant facts known to Indemnified Party concerning the matter in
question. The Indemnified Party shall use reasonable care to identify and
promptly to notify the Indemnifying Party concerning any matter which
presents, or appears likely to present, a claim for indemnification. The
Indemnifying Party shall have the election of defending the Indemnified
Party against any claim which may be the subject of indemnification or of
holding the Indemnified Party harmless hereunder. In the event the
Indemnifying Party so elects, it will so notify the Indemnified Party and
thereupon the Indemnifying Party shall take over defense of the claim and,
if so requested by the Indemnifying Party, the Indemnified Party shall
incur no further legal or other expenses related thereto for which it shall
be entitled to indemnity or to being held harmless hereunder; provided,
however, that nothing herein shall prevent the Indemnified Party from
retaining counsel at its own expense to defend any claim. Except with the
Indemnifying Party's prior written consent, the Indemnified Party shall in
no event confess any claim or make any compromise in any matter in which
the Indemnifying Party will be asked to indemnify or hold the Indemnified
Party harmless hereunder.
13. Acts of God, etc. United Missouri shall not be liable for delays or
errors occurring by reason of circumstances beyond its control, including
but not limited to acts of civil or military authority, national
emergencies, work stoppages, fire, flood, catastrophe, acts of God,
insurrection, war, riot, or failure of communication equipment of common
carriers or power supply. In the event of equipment breakdowns beyond its
control, United Missouri shall, at no additional expense to the Fund, take
reasonable steps to minimize service interruptions and mitigate their
effects but shall have no liability with respect thereto. United Missouri
shall enter into and shall maintain in effect with appropriate parties one
or more agreements making reasonable provision for emergency use of
electronic data processing equipment.
14. Amendments. United Missouri and the Fund shall regularly consult
with each other regarding United Missouri's performance of its obligations
and its compensation hereunder. In connection therewith, the Fund shall
submit to United Missouri at a reasonable time in advance of filing with
the Securities and Exchange Commission copies of any amended or
supplemented registration statements (including exhibits) under the
Securities Act of 1933, as amended, and the Investment Company Act of 1940,
as amended, and, a reasonable time in advance of their proposed use, copies
of any amended or supplemented forms relating to any plan, program or
service offered by the Fund. Any change in such material which would
require any change in United Missouri's obligations hereunder shall be
subject to United Missouri's approval, which shall not be unreasonably
withheld. In the event that a change in such documents or in the
procedures contained therein materially increases the cost to United
Missouri of performing its obligations hereunder, United Missouri shall be
entitled to receive reasonable compensation therefor.
15. Duration, Termination, etc. Neither this Agreement nor any
provisions hereof may be changed, waived, discharged or terminated orally,
but only by written instrument which shall make specific reference to this
Agreement and which shall be signed by the party against which enforcement
of such change, waiver, discharge or termination is sought.
This Agreement shall continue in effect until December 31, 1993, and
indefinitely thereafter so long as such continuance is approved at least
annually by vote of the Fund's Board of Trustees; provided, however, that
this Agreement may be terminated at any time by six months' written notice
given by United Missouri to the Fund or six months' written notice given by
the Fund to United Missouri; and provided further that this Agreement may
be terminated immediately at any time for cause either by the Fund or by
United Missouri in the event that such cause remains unremedied for a
reasonable period of time not to exceed ninety days after receipt of
written specification of such cause. Any such termination shall not affect
the rights and obligations of the parties under paragraph 12 hereof.
Upon the termination hereof, the Fund shall pay to United Missouri such
compensation as may be due for the period prior to the date of such
termination. In the event that the Fund designates a successor to any of
United Missouri's obligations hereunder, United Missouri shall, at the
expense and direction of the Fund, transfer to such successor all relevant
books, records and other data established or maintained by United Missouri
hereunder (including, if United Missouri has been acting as Transfer Agent,
a certified list of the shareholders of the Fund with name, address, and,
if provided, taxpayer identification or Social Security number, and a
complete record of the account of each shareholder). To the extent that
United Missouri incurs expenses related to a transfer of responsibilities
to a successor, United Missouri shall be entitled to be reimbursed for such
expenses, including any out-of-pocket expenses reasonably incurred by
United Missouri in connection with the transfer.
16. Shareholder Liability. United Missouri is hereby expressly put on
notice of (i) the limitation of shareholder liability as set forth in the
Trust Instrument of the Fund and (ii) of the provisions in the Trust
Instrument permitting the establishment of separate series (or Portfolios)
and limiting the liability of each Portfolio to obligations of that
Portfolio; United Missouri hereby agrees that obligations assumed by the
Fund pursuant to this Agreement are in all cases assumed on behalf of a
particular Portfolio, and each such obligation shall be limited in all
cases to that Portfolio and its assets. United Missouri agrees that they
shall not seek satisfaction of any such obligation from the shareholders or
any individual shareholder of the Fund, nor from the Trustees or any
individual Trustee of the Fund.
17. Miscellaneous. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed and enforced in accordance with
and governed by the laws of the Commonwealth of Massachusetts. The
captions in this Agreement are included for convenience of reference only
and in no way define or delimit any of the provisions hereof or otherwise
affect their construction or effect. This Agreement may be executed
simultaneously in two counterparts, each of which taken together shall
constitute one and the same instrument. United Missouri understands that
the rights and obligations of each Portfolio under the Trust Instrument are
separate and distinct from those of any and all other Portfolios.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
UNITED MISSOURI BANK, N.A.
By
Duane Schempp
DAILY MONEY FUND
Capital Reserves Municipal Money Market Portfolio
By Gary L. French
Treasurer
LG932670038
Exhibit 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference into the Statement of
Additional Information in Post-Effective Amendment No. 25 to the
Registration Statement on Form N-1A (the "Registration Statement") of Daily
Money Fund: Money Market Portfolio and U.S. Treasury Portfolio, of our
report dated August 20, 1993, relating to the financial statements and
financial highlights which is incorporated by reference in said Statement
of Additional Information.
We further consent to the references to our Firm in the Prospectus and
Statement of Additional Information under the headings "Financial
Highlights" and "Auditor".
/s/COOPERS & LYBRAND
COOPERS & LYBRAND
Boston, Massachusetts
April 8, 1994
SERVICE PLAN
THIS PLAN made as of the 30th day of September, 1993, by and between Daily
Money Fund, an unincorporated business trust organized and existing under
the laws of the State of Delaware (the "Fund"), and FIDELITY MANAGEMENT
& RESEARCH COMPANY (the "Adviser") and FIDELITY DISTRIBUTORS
CORPORATION (the "Distributor"), corporations organized and existing under
the laws of the Commonwealth of Massachusetts;
WITNESSETH:
WHEREAS, the Fund is engaged in business as an open-end management
investment company and is registered as such under the Investment Company
Act of 1940 (the "Act"); and
WHEREAS, it has been proposed that the Adviser, through the Distributor,
make periodic payments, out of the fee paid to it, its past profits or any
other source available to it, to certain securities dealers, financial
institutions or other industry professionals for distribution,
administration and/or for servicing investors in Fund shares; and
WHEREAS, the Fund intends to distribute its shares of beneficial interest
("shares") in accordance with Rule 12b-1 under the Act, and desires to
adopt a Service Plan pursuant to such rule; and
WHEREAS, the Board of Trustees, in considering whether the Fund should
adopt and implement a written plan, has evaluated such information as it
deemed necessary to make an informed determination as to whether a written
plan should be adopted and implemented and has considered such pertinent
factors as it deemed necessary to form the basis for a decision to use
assets of the Fund for such purposes and has determined that there is a
reasonable likelihood that adoption and implementation of a plan will
benefit the Fund and its shareholders.
NOW THEREFORE, the fund hereby adopts a Service Plan (hereinafter referred
to as the "Plan") in accordance with Rule 12b-1 under the Act, and the
parties hereto agree to the following terms and conditions of the Plan:
1. There shall be paid periodically, to one or more securities dealers,
financial institutions or other industry professionals, such as investment
advisers, accountants and estate planning firms ("Qualified Recipients"), a
fee in respect of the Fund's shares owned by shareholders for whom the
Qualified Recipient is the dealer of record or holder of record, or with
whom the Qualified Recipient has a servicing relationship. Servicing
functions may include, among other things: services rendered in connection
with the distribution of Fund shares; answering client inquiries regarding
the Fund; processing purchase and redemption transactions, including
automatic investment and redemption of client cash account balances;
providing periodic statements showing a client's account balances and
integration of such statements with other client transactions; assisting
clients in changing dividend options, account registrations and addresses;
performing sub-accounting; arranging for bank wires; and providing such
other services as the Fund may reasonably request.
The schedule of such fees (as provided in supplement to this Plan and
which may vary from time to time) and the basis upon which such fees will
be paid shall be subject to the overall direction of the Fund's Board of
Trustees; provided that such fees shall be paid out of the fee paid to the
Adviser, the Adviser's past profits or any other source available to the
Adviser and further provided, that the indirect cost to the Fund shall not
exceed the fee paid to the Adviser. The Adviser agrees that it will
reimburse the Distributor amounts paid to Qualified Recipients pursuant to
this paragraph. The payment to a Qualified Recipient is subject to
compliance by the Qualified Recipient with the terms of a Service Agreement
between the Qualified Recipient with the terms of a Service Agreement
between the Qualified Recipient and the Distributor. The fee to be paid to
a Qualified Recipient and the basis on which payment will be made shall be
determined by the Adviser, within the limitations set forth above,
provided, however, that a majority of the Board of Trustees, including a
majority of the Trustees who are not "interested persons" of the Fund (as
defined in the Act) and who have no direct or indirect financial interest
in the operation of this Plan or in any agreements related to the Plan
(hereinafter referred to as "Qualified Trustees"), may at any time and from
time to time (i) decrease the maximum percentage rate payable to Qualified
Recipients, (ii) increase or decrease the percentage rate being paid to any
Qualified Recipient or Recipients within the percentage limitation set
forth above or such lower maximum limitation as is then in effect, and
(iii) select any person as a Qualified Recipient or remove any person from
that status.
For the purpose of determining the fees payable to a Qualified Recipient,
the value of the Fund's net assets shall be computed in the manner
specified in the Fund's then current Prospectus for computation in
connection with the determination of the net asset value of the Fund's
shares.
2. The Fund or the Adviser shall, from time to time, furnish or otherwise
make available to the Distributor such financial reports, proxy statements
and other information relating to the business and affairs of the Fund as
the Distributor may reasonably require in order to discharge its duties and
obligations hereunder.
3, Nothing herein contained shall be deemed to require the Fund to take
any action contrary to its Trust Instrument or By-Laws, or any applicable
statutory or regulatory requirement to which it is subject or by which it
is bound, or relieve or deprive the Board of Trustees of the Fund of the
responsibility for and control of the conduct of the affairs of the Funds.
4. This Plan shall become effective upon approval by a vote of at least a
"majority of the outstanding voting securities of the Fund," and upon
approval by a vote of the Trustees of the Fund, and of the Qualified
Trustees cast in person at a meeting called for the purpose of voting on
this Plan. For the purposes of this Plan, the terms "interested persons"
and "majority of the outstanding voting securities of the Fund" are used as
defined in the Act.
5. This Plan shall remain in effect until July 31, 1994, and from year to
year thereafter, provided, however, that such continuance is subject to
approval annually by a vote of the Trustees of the Fund and of the
Qualified Trustees cast in person at a meeting called for the purpose of
voting on this Plan. If such annual approval is not obtained, the Plan
shall expire 12 months after the date of the last approval. This Plan may
be amended at any time by the Board of Trustees, provided that (a) any
amendment to increase materially the amount to be spent for the services
described herein shall be effective only upon approval by a vote of a
majority of the outstanding shares of the fund, and (b) any material
amendments of this Plan shall be effective only upon approval in the manner
provided in the first sentence in this paragraph.
6. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Qualified Trustees or by a vote of a
majority of the outstanding voting securities of the Fund.
7. Nothing herein contained shall limit the freedom of the Adviser or
Distributor or any "affiliated person," as defined in the Act, to render
investment supervisory and corporate administrative services to other
investment companies, to act as distributor, adviser or investment
counselor to other persons, firms or corporations and to engage in other
business activities.
8. Neither the Distributor, the Adviser nor any of their employees or
agents are authorized to make any representations concerning the shares
except those contained in the then current Fund prospectus.
9. The Adviser and Distributor shall use their best efforts in rendering
services hereunder, but in the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of its obligations hereunder,
neither the Adviser nor the Distributor shall be liable to the Fund or any
of its shareholders for any error of judgment or mistake of law or for any
act or omission, or, for any losses sustained by the Fund or its
shareholders.
10. The Distributor shall provide the Fund, for review by the Fund's Board
of Trustees, and the Trustees shall review, at least quarterly, a written
report of the amounts expended pursuant to the Plan and the purposes for
which such expenditures were made. Such written report shall be in a form
satisfactory to the Fund and shall supply all information necessary for the
Board to discharge its responsibilities, including its responsibilities
pursuant to Rule 12b-1.
11. While this Plan is in effect, the selection and nomination of
Qualified Trustees shall be committed to the discretion of the Trustees who
are not interested persons.
12. The Fund shall preserve copies of this Plan and any agreements related
to and all reports made pursuant to Section 10 hereof, for a period of not
less than six years from the date of this Plan or any such report, as the
case may be, the first two years in an easily accessible place.
13. This Plan shall be construed in accordance with the laws of the
Commonwealth of Massachusetts and the applicable provisions of the Act. To
the extent the applicable law of the Commonwealth of Massachusetts or any
of the provisions herein conflict with the applicable provisions of the
Act, the latter shall control.
14. The Adviser and the Distributor are hereby expressly put on notice of
the limitation of shareholder liability as set forth in the Fund's Trust
Instrument and agree that the obligations assumed by the Fund pursuant to
this Plan and any agreements related to this Plan shall be limited in all
cases to the Fund and its assets, and neither the Distributor, Adviser or
their agents shall seek satisfaction of any such obligation from the
shareholders or any shareholder of the Fund. In addition, neither the
Adviser, Distributor or their agents shall seek satisfaction of any such
obligations from the Trustees or any individual Trustee.
15. If any provision of the Plan shall be held or made invalid by a court
decision, statute, rule or otherwise the remainder of the Plan shall not be
affected thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Plan to be signed
by the respective officers thereunto duly authorized and their respective
corporate seals to be hereunto affixed, as of the day and year first above
written.
ATTEST: DAILY MONEY FUND
/s/ Arthur S. Loring By: /s/ J. Gary Burkhead
Secretary J. Gary Burkhead
(SEAL) Senior Vice President
ATTEST: FIDELITY DISTRIBUTORS CORPORATION
/s/ Arthur S. Loring By: /s/ Kurt A. Lange
Clerk Kurt A. Lange
(SEAL) President
ATTEST: FIDELITY MANAGEMENT & RESEARCH
/s/ Arthur S. Loring COMPANY
Clerk By: /s/ J. Gary Burkhead
(SEAL) J. Gary Burkhead
President
LG932510055
DISTRIBUTION AND SERVICE PLAN
for Daily Money Fund:
Fidelity U.S. Treasury Income Portfolio
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by Rule
12b-1 under the Investment Company Act of 1940 (the "Act") of Fidelity U.S.
Treasury Income Portfolio (the "Portfolio"), a series of shares of Daily
Money Fund (the "Fund").
2. The Fund has entered into a General Distribution Agreement with respect
to the Portfolio with Fidelity Distributors Corporation (the
"Distributor"), a wholly-owned subsidiary of Fidelity Management &
Research Company (the "Adviser"), under which the Distributor uses all
reasonable efforts, consistent with its other business, to secure
purchasers for the Portfolio's shares of beneficial interest ("shares").
Under the agreement, the Distributor pays the expenses of printing and
distributing any prospectuses, reports and other literature used by the
Distributor, advertising, and other promotional activities in connection
with the offering of shares of the Portfolio for sale to the public. It is
understood that the Adviser may reimburse the Distributor for these
expenses from any source available to it, including management fees paid to
it by the Portfolio.
3. The Adviser directly, or through the Distributor, may, subject to the
approval of the Trustees, make payments to securities dealers and other
third parties who engage in the sale of shares or who render shareholder
support services, including but not limited to providing office space,
equipment and telephone facilities, answering routine inquiries regarding
the Portfolio, processing shareholder transactions and providing such other
shareholder services as the Fund may reasonably request.
4. The Portfolio will not make separate payments as a result of this Plan
to the Adviser, Distributor or any other party, it being recognized that
the Portfolio presently pays, and will continue to pay, a management fee to
the Adviser. To the extent that any payments made by the Portfolio to the
Adviser, including payment of management fees, should be deemed to be
indirect financing of any activity primarily intended to result in the sale
of shares of the Portfolio within the context of Rule 12b-1 under the Act,
then such payments shall be deemed to be authorized by this Plan.
5. This Plan shall become effective upon the first business day of the
month following approval by a vote of at least a "majority of the
outstanding voting securities of the Portfolio" (as defined in the Act),
the plan having been approved by a vote of a majority of the Trustees of
the Fund, including a majority of Trustees who are not "interested persons"
of the Fund (as defined in the Act) and who have no direct or indirect
financial interest in the operation of this Plan or in any agreements
related to this Plan (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect from the date specified above until June 30, 1994, and from year to
year thereafter, provided, however, that such continuance is subject to
approval annually by a vote of a majority of the Trustees of the Fund,
including a majority of the Independent Trustees, cast in person at a
meeting called for the purpose of voting on this Plan. This Plan may be
amended at any time by the Board of Trustees, provided that (a) any
amendment to authorize direct payments by the Portfolio to finance any
activity primarily intended to result in the sale of shares of the
Portfolio, to increase materially the amount spent by the Portfolio for
distribution, or any amendment of the Management Contract to increase the
amount to be paid by the Portfolio thereunder shall be effective only upon
approval by a vote of a majority of the outstanding voting securities of
the Portfolio, and (b) any material amendments of this Plan shall be
effective only upon approval in the manner provided in the first sentence
in this paragraph.
7. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of
a majority of the outstanding voting securities of the Portfolio.
8. During the existence of this Plan, the Fund shall require the Adviser
and/or Distributor to provide the Fund, for review by the Fund's Board of
Trustees, and the Trustees shall review, at least quarterly, a written
report of the amounts expended in connection with financing any activity
primarily intended to result in the sale of shares of the Portfolio (making
estimates of such costs where necessary or desirable) and the purposes for
which such expenditures were made.
9. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale
of shares of the Portfolio.
10. Consistent with the limitation of shareholder liability as set forth
in the Fund's Trust Instrument, any obligations assumed by the Portfolio
pursuant to this Plan and any agreements related to this Plan shall be
limited in all cases to the Portfolio and its assets, and shall not
constitute obligations of any other series of shares of the Fund.
11. If any provision of this Plan shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
LG932500024
DISTRIBUTION AND SERVICE PLAN
of Daily Money Fund: Capital Reserves:
Money Market Portfolio, U.S, Government Portfolio, and
Municipal Money Market Portfolio
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by
Securities and Exchange Commission Rule 12b-1 under the Investment Company
Act of 1940, as amended (the "Act") for Capital Reserves: Money Market
Portfolio, U.S. Government Portfolio, and Municipal Money Market Portfolio
(the "Portfolios"), portfolios of Daily Money Fund (the "Fund").
2. The Fund has entered into a General Distribution Agreement on behalf of
the Portfolios with Fidelity Distributors Corporation (the "Distributor"),
under which the Distributor uses all reasonable efforts, consistent with
its other business, to secure purchasers of the Portfolio's shares of
beneficial interest (the "Shares"). Such efforts may include, but neither
are required to include nor are limited to, the following: (1) formulation
and implementation of marketing and promotional activities, such as mail
promotions and television, radio, newspaper, magazine and other mass media
advertising; (2) preparation, printing and distribution of sales
literature; (3) preparation, printing and distribution of prospectuses of
the Portfolios and reports to recipients other than existing shareholders
of the Portfolios; (4) obtaining such information, analyses and reports
with respect to marketing and promotional activities as the Distributor
may, from time to time, deem advisable; (5) making payments to securities
dealers and others engaged in the sale of Shares or who engage in
shareholder support services; and (6) providing training, marketing and
support to such dealers and other with respect to the sale of Shares.
3. In consideration for the services provided and the expenses incurred by
the Distributor pursuant to the General Distribution Agreement, the
Portfolios shall pay to the Distributor a fee at the annual rate of up to
.40% of its average daily net assets throughout the month. The
determination of daily net assets shall be made at the close of business
each day throughout the month and computed in the manner specified in the
Portfolios' then current Prospectus for the determination of the net asset
value of the Portfolios' shares. The Distributor may use all or any
portion of the fee received pursuant to the Plan to compensate securities
dealers or other persons who have engaged in the sale of Shares or in
shareholder support services pursuant to agreements with the Distributor,
or to pay any of the expenses associated with other activities authorized
under paragraph 2 hereof.
4. The Portfolios presently pay, and will continue to pay a management fee
to Fidelity Management & Research Company (the "Adviser") pursuant to a
management agreement between the Portfolios and the Adviser (the
"Management Contract"). It is recognized that the Adviser may use its
management fee revenue as well as its past profits or its resources from
any other source, to reimburse the Distributor for expenses incurred in
connection with the distribution of Shares, including the activities
referred to in paragraphs 2 and 3 hereof. To the extent that the payment
of management fees by the Portfolios to the Adviser should be deemed to be
indirect financing of any activity primarily intended to result in the sale
of Shares within the meaning of Rule 12b-1, then such payment shall be
deemed to be authorized by this Plan.
5. This Plan shall become effective upon the first business day of the
month following approval by a vote of at least a "majority of the
outstanding voting securities of the Portfolios" (as defined in the Act),
this Plan having been approved by a vote of a majority of the Trustees of
the Fund, including a majority of Trustees who are not "interested persons"
of the Fund (as defined in the Act) and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement
related to the Plan (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect until June 30, 1994, and from year to year thereafter; provided,
however, that such continuance is subject to approval annually by a vote of
a majority of the Trustees of the Fund, including a majority of the
Independent Trustees, cast in person at a meeting called for the purpose of
voting on this Plan. This Plan may be amended at any time by the Board of
Trustees, provided that (a) any amendment to increase materially the fee
provided for in paragraph 3 hereof or any amendment of the Management
Contract to increase the amount to be paid by the Portfolios thereunder
shall be effective only upon approval by a vote of a majority of the
outstanding voting securities of the Portfolios, and (b) any material
amendment of this Plan shall be effective only upon approval in the manner
provided in the first sentence of this paragraph 6.
7. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of
a majority of the outstanding voting securities of the Portfolios.
8. During the existence of this Plan, the Fund shall require the Adviser
and/or the Distributor to provide the Fund, for review by the Fund's
Trustees, and the Trustees shall review, at least quarterly, a written
report of the amounts expended in connection with financing any activity
primarily intended to result in the sale of shares of the Portfolios
(making estimates of such costs where necessary or desirable) and the
purposes for which such expenditures were made.
9. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale
of shares of the Portfolios.
10. Consistent with the limitation of shareholder liability as set forth
in the Fund's Trust Instrument, any obligation assumed by the Portfolios
pursuant to this Plan and any agreement related to this Plan shall be
limited in all cases to the Portfolios and their assets and shall not
constitute an obligation of any shareholder of the Fund or of any other
class or series of shares of the Fund.
11. If any provision of the Plan shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
LG932460023
Exhibit 15
FORM OF
DISTRIBUTION AND SERVICE PLAN
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by
Securities and Exchange Commission Rule 12b-1 under the Investment Company
Act of 1940, as amended (the "Act") for Class B shares of U.S. Treasury
Portfolio ("Class B"), a class of shares of U.S. Treasury Portfolio (the
"Fund"), a series of Daily Money Fund (the "Trust").
2. The Trust has entered into a General Distribution Agreement on behalf
of the Fund with Fidelity Distributors Corporation (the "Distributor")
under which the Distributor uses all reasonable efforts, consistent with
its other business, to secure purchasers of the Fund's shares of beneficial
interest (the "shares"). Such efforts may include, but neither are
required to include nor are limited to, the following: (1) formulation and
implementation of marketing and promotional activities, such as mail
promotions and television, radio, newspaper, magazine and other mass media
advertising; (2) preparation, printing and distribution of sales
literature; (3) preparation, printing and distribution of prospectuses of
the Fund and reports to recipients other than existing shareholders of the
Fund; (4) obtaining such information, analyses and reports with respect to
marketing and promotional activities as the Distributor may, from time to
time, deem advisable; (5) making payments to securities dealers and others
engaged in the sale of shares or who engage in shareholder support services
("Investment Professionals"); and (6) providing training, marketing and
support to Investment Professionals with respect to the sale of shares.
3. In accordance with such terms as the Trustees may, from time to time
establish, and in conjunction with its services under the General
Distribution Agreement with respect to shares of Class B ("Class B
Shares"), the Distributor is hereby specifically authorized to make
payments to Investment Professionals in connection with the sale of the
Class B Shares. Such payments may be paid as a percentage of the dollar
amount of purchases of Class B Shares attributable to a particular
Investment Professional, or may take such other form as may be approved by
the Trustees.
4. In consideration for the services provided and the expenses incurred
by the Distributor pursuant to the General Distribution Agreement and to
paragraphs 2 and 3 hereof, all with respect to Class B Shares:
(a) Class B shall pay to the Distributor a monthly distribution fee at the
annual rate of 0.75% (or such lesser amount as the Trustees may, from time
to time, determine) of the average daily net assets throughout the month,
which may be paid out of the management fee paid by the Fund or otherwise,
as the Trustees may determine. The determination of daily net assets shall
be made at the close of business each day throughout the month and computed
in the manner specified in the Fund's then current Prospectus for the
determination of the net asset value of Class B Shares, but shall exclude
assets attributable to any other class of shares of the Fund. The
Distributor may, but shall not be required to, use all or any portion of
the distribution fee received pursuant to the Plan to compensate Investment
Professionals who have engaged in the sale of Class B Shares or in
shareholder support services pursuant to agreements with the Distributor,
or to pay any of the expenses associated with other activities authorized
under paragraphs 2 and 3 hereof; and
(b) In addition, the Plan recognizes that the Distributor may, in
accordance with such terms as the Trustees may from time to time establish,
receive all or a portion of any sales charges, including contingent
deferred sales charges, which may be imposed upon the sale or redemption of
Class B Shares.
5. Separate from any payments made as described in paragraph 4 hereof,
Class B shall also pay to the Distributor a service fee at the annual rate
of 0.25% (or such lesser amount as the Trustees may, from time to time,
determine) of the average daily net assets throughout the month. The
determination of daily net assets shall be made at the close of business
each day throughout the month and computed in the manner specified in the
Fund's then current Prospectus for the determination of the net asset value
of Class B Shares, but shall exclude assets attributable to any other class
of shares of the Fund. The Distributor shall use all [or a portion] of
such service fees to compensate Investment Professionals for personal
service and/or the maintenance of shareholder accounts.
6. The Fund presently pays, and will continue to pay, a management fee to
Fidelity Management and Research Company (the "Adviser") pursuant to a
management agreement between the Fund and the Adviser (the "Management
Contract"). It is recognized that the Adviser may use its management fee
revenue, as well as its past profits or its resources from any other
source, to reimburse the Distributor for expenses incurred in connection
with the distribution of Class B Shares, including the activities referred
to in paragraphs 2 and 3 hereof. To the extent that the payment of
management fees by the Fund to the Adviser should be deemed to be indirect
financing of any activity primarily intended to result in the sale of Class
B Shares within the meaning of Rule 12b-1, then such payment shall be
deemed to be authorized by this Plan.
7. This Plan shall become effective upon the first business day of the
month following approval by "a vote of at least a majority of the
outstanding voting securities" (as defined in the Act) of Class B, this
Plan having been approved by a vote of a majority of the Trustees of the
Trust, including a majority of Trustees who are not "interested persons" of
the Trust (as defined in the Act) and who have no direct or indirect
financial interest in the operation of the Plan or in any agreement related
to the Plan (the "Independent Trustees"), cast in person at a meeting
called for the purpose of voting on this Plan.
8. This Plan shall, unless terminated as hereinafter provided, remain in
effect until [date], and from year to year thereafter; provided, however,
that such continuance is subject to approval annually by a vote of a
majority of the Trustees of the Trust, including a majority of the
Independent Trustees, cast in person at a meeting called for the purpose of
voting on this Plan. This Plan may be amended at any time by the Board of
Trustees, provided that (a) any amendment to increase materially the fee
provided for in paragraphs 4 or 5 hereof or any amendment of the Management
Contract to increase the amount to be paid by the Fund thereunder shall be
effective only upon approval by a vote of a majority of the outstanding
voting securities of Class B in the case of this Plan, or upon approval by
a vote of the majority of the outstanding voting securities of the Fund, in
the case of the Management Contract, and (b) any material amendment of this
Plan shall be effective only upon approval in the manner provided in the
first sentence of paragraph 7.
9. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of
a majority of the outstanding voting securities of Class B.
10. During the existence of this Plan, the Trust shall require the
Adviser and/or the Distributor to provide the Trust, for review by the
Trustees, and the Trustees shall review, at least quarterly, a written
report of the amounts expended in connection with financing any activity
primarily intended to result in the sale of Class B Shares (making
estimates of such costs where necessary or desirable) and the purposes for
which such expenditures were made.
11. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale
of Class B Shares.
12. Consistent with the limitation of shareholder liability as set forth
in the Trust's Declaration of Trust, any obligation assumed by Class B
pursuant to this Plan and any agreement related to this Plan shall be
limited in all cases to Class B and its assets and shall not constitute an
obligation of any shareholder of the Trust or of any other class of the
Fund, series of the Trust or class of such series.
13. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Plan shall
not be affected thereby.
