SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
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[x] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
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(Name of Registrant as Specified In Its Charter)
Daily Money Fund
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Arthur S. Loring
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which
transaction applies:
(2) Aggregate number of securities to which
transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total Fee Paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a) (2)
and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of
its filing.
</TABLE>
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
TREASURY ONLY PORTFOLIO
CLASS I
CLASS II
CLASS III
A FUND OF DAILY MONEY FUND
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-843-3001
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of Treasury Only Portfolio:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
Meeting) of Treasury Only Portfolio will be held at the office of Daily
Money Fund (the trust), 82 Devonshire Street, Boston, Massachusetts 02109,
on May 9, 1997, at 9:45 a.m. The purpose of the Meeting is to consider and
act upon the following proposals, and to transact such other business as
may properly come before the Meeting or any adjournments thereof.
1. To approve an amended management contract for the fund.
2. To approve an Agreement and Plan providing for the reorganization of
the fund from a separate series of one Delaware business trust to
another.
The Board of Trustees has fixed the close of business on March 12, 1997,
as the record date for the determination of shareholders of the fund and
each class entitled to notice of, and to vote at, such Meeting and any
adjournments thereof.
By order of the Board of Trustees,
ARTHUR S. LORING, Secretary
March 12, 1997
YOUR VOTE IS IMPORTANT -
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY SHAREHOLDER
WHO DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO INDICATE VOTING
INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND SIGN IT, AND RETURN IT IN
THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED
STATES. IN ORDER TO AVOID UNNECESSARY EXPENSE, WE ASK YOUR COOPERATION IN
MAILING YOUR PROXY CARD PROMPTLY, NO MATTER HOW LARGE OR SMALL YOUR
HOLDINGS MAY BE.
INSTRUCTIONS FOR EXECUTING PROXY CARD
The following general rules for executing proxy cards may be of assistance
to you and help avoid the time and expense involved in validating your vote
if you fail to execute your proxy card properly.
1. INDIVIDUAL ACCOUNTS: Your name should be signed exactly as it appears
in the registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.
3. ALL OTHER ACCOUNTS should show the capacity of the individual signing.
This can be shown either in the form of the account registration itself or
by the individual executing the proxy card. For example:
REGISTRATION VALID
SIGNATURE
A. 1) ABC Corp. John Smith,
Treasurer
2) ABC Corp. John Smith,
Treasurer
c/o John Smith, Treasurer
B. 1) ABC Corp. Profit Sharing Plan Ann B. Collins,
Trustee
2) ABC Trust Ann B. Collins,
Trustee
3) Ann B. Collins, Trustee Ann B. Collins,
Trustee
u/t/d 12/28/78
C. 1) Anthony B. Craft, Cust. Anthony B. Craft
f/b/o Anthony B. Craft, Jr.
UGMA
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS OF
DAILY MONEY FUND: TREASURY ONLY PORTFOLIO
TO BE HELD ON MAY 9, 1997
This Proxy Statement is furnished in connection with a solicitation of
proxies made by, and on behalf of, the Board of Trustees of Daily Money
Fund (the trust) to be used at the Special Meeting of Shareholders of
Treasury Only Portfolio (the fund) and at any adjournments thereof (the
Meeting), to be held on May 9, 1997, at 9:45 a.m. at 82 Devonshire Street,
Boston, Massachusetts 02109, the principal executive office of the trust
and Fidelity Management & Research Company (FMR), the fund's investment
adviser.
The purpose of the Meeting is set forth in the accompanying Notice. The
solicitation is made primarily by the mailing of this Proxy Statement and
the accompanying proxy card on or about March 12, 1997. Supplementary
solicitations may be made by mail, telephone, telegraph, facsimile, or by
personal interview by representatives of the trust. In addition, D.F. King
& Co. may be paid on a per-call basis to solicit shareholders on behalf of
the fund at an anticipated cost of approximately $________. The expenses in
connection with preparing this Proxy Statement and its enclosures and of
all solicitations will be borne by FMR. FMR will reimburse brokerage firms
and others for their reasonable expenses in forwarding solicitation
material to the beneficial owners of shares. The principal business address
of Fidelity Distributors Corporation (FDC), the fund's principal
underwriter and distribution agent, is 82 Devonshire Street, Boston,
Massachusetts 02109. The principal business address of FMR Texas, Inc. (FMR
Texas), subadviser to the fund, is 400 East Las Colinas Boulevard, Irving,
Texas 75039.
If the enclosed proxy card is executed and returned, it may nevertheless
be revoked at any time prior to its use by written notification received by
the trust, by the execution of a later-dated proxy card, or by attending
the Meeting and voting in person.
All proxy cards solicited by the Board of Trustees that are properly
executed and received by the Secretary prior to the Meeting, and which are
not revoked, will be voted at the Meeting. Shares represented by such
proxies will be voted in accordance with the instructions thereon. If no
specification is made on a proxy card, it will be voted FOR the matters
specified on the proxy card. Only proxies that are voted will be counted
towards establishing a quorum. Broker non-votes are not considered voted
for this purpose. Shareholders should note that while votes to ABSTAIN will
count toward establishing a quorum, passage of any proposal being
considered at the Meeting will occur only if a sufficient number of votes
are cast FOR the proposal. Accordingly, votes to ABSTAIN and votes AGAINST
will have the same effect in determining whether the proposal is approved.
The fund may also arrange to have votes recorded by telephone. D.F. King &
Co. may be paid on a per-call basis for vote-by-phone solicitations on
behalf of the fund at an anticipated cost of approximately $______. The
expenses in connection with telephone voting will be borne by FMR. If the
fund records votes by telephone, it will use procedures designed to
authenticate shareholders' identities, to allow shareholders to authorize
the voting of their shares in accordance with their instructions, and to
confirm that their instructions have been properly recorded. Proxies voted
by telephone may be revoked at any time before they are voted in the same
manner that proxies voted by mail may be revoked.
If a quorum is present at the Meeting, but sufficient votes to approve one
or more of the proposed items are not received, or if other matters arise
requiring shareholder attention, the persons named as proxies may propose
one or more adjournments of the Meeting to permit further solicitation of
proxies. Any such adjournment will require the affirmative vote of a
majority of those shares present at the Meeting or represented by proxy.
When voting on a proposed adjournment, the persons named as proxies will
vote FOR the proposed adjournment all shares that they are entitled to vote
with respect to each item, unless directed to vote AGAINST the item, in
which case such shares will be voted AGAINST the proposed adjournment with
respect to that item. A shareholder vote may be taken on one or more of the
items in this Proxy Statement prior to such adjournment if sufficient votes
have been received and it is otherwise appropriate.
Shares of each class of the fund issued and outstanding as of January 31,
1997, are indicated in the following table:
Treasury Only Portfolio - Class I _______________
Treasury Only Portfolio - Class II _______________
Treasury Only Portfolio - Class III _______________
As of January 31, 1997, the Trustees and officers of the fund owned, in
the aggregate, less than __% of the outstanding shares of the fund. To the
knowledge of the trust, [no shareholder owned of record or beneficially
more than 5% of the outstanding shares of the fund on that
date.]/[substantial (5% or more) record ownership of the fund on January
31, 1997 was as follows: for Treasury Only Portfolio - Class I: ________
(__%), and __________ (_%); for Treasury Only Portfolio - Class II: ______
( __%), and _____ (_%); and for Treasury Only Portfolio - Class III: ______
(__%), and _____ (_%). To the knowledge of the trust, no other shareholder
owned of record or beneficially more than 5% of the outstanding shares of
the fund on that date.]
Shareholders of record at the close of business on March 12, 1997, will be
entitled to vote at the Meeting. Each such shareholder will be entitled to
one vote for each share held on that date.
FOR A FREE COPY OF THE FUND'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED
MARCH 31, 1996, AND SEMIANNUAL REPORT FOR THE FISCAL PERIOD ENDED SEPTEMBER
30, 1996, CALL __________________ OR WRITE TO FIDELITY DISTRIBUTORS
CORPORATION AT 82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109.
VOTE REQUIRED: APPROVAL OF PROPOSALS 1 AND 2 REQUIRES THE AFFIRMATIVE VOTE
OF A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES" OF THE FUND. UNDER THE
INVESTMENT COMPANY ACT OF 1940 (THE 1940 ACT), THE VOTE OF A "MAJORITY OF
THE OUTSTANDING VOTING SECURITIES" MEANS THE AFFIRMATIVE VOTE OF THE LESSER
OF (A) 67% OR MORE OF THE VOTING SECURITIES PRESENT AT THE MEETING OR
REPRESENTED BY PROXY IF THE HOLDERS OF MORE THAN 50% OF THE OUTSTANDING
VOTING SECURITIES ARE PRESENT OR REPRESENTED BY PROXY OR (B) MORE THAN 50%
OF THE OUTSTANDING VOTING SECURITIES. BROKER NON-VOTES ARE NOT CONSIDERED
"PRESENT" FOR THIS PURPOSE.
1. TO APPROVE AN AMENDED MANAGEMENT CONTRACT FOR THE FUND.
The Board of Trustees, including a majority of those Trustees who are not
"interested persons" of the trust or FMR (the Independent Trustees), has
approved, and recommends that the shareholders of the fund approve,
amendments to the fund's management contract with FMR (the Amended
Contract). The Amended Contract modifies the management fee arrangement
between the fund and FMR to make it consistent with the management fee
arrangement between comparable Fidelity institutional money market funds
(FIMM funds) and FMR.
Under the present management contract (the Present Contract), the fund
pays FMR an all-inclusive management fee at an annual rate of 0.42% of the
fund's average net assets, and FMR pays all of the fund's other expenses
with certain exceptions (such as applicable Rule 12b-1 fees and other
expenses described below). The proposal would modify the contractual
management fee arrangement between the fund and FMR by (i) reducing the
management fee rate from 0.42% of the fund's average net assets to 0.20% of
the fund's average net assets, and (ii) replacing the all-inclusive fee
structure with a fee structure under which the fund (rather than FMR) would
pay all of its other expenses. The fund is marketed as part of the FIMM
funds product line - a product line of high minimum investment,
lower-expense money market funds for institutional investors. The proposed
management fee arrangement is standard for other FIMM funds.
Currently, FMR voluntarily limits the total operating expenses (excluding
applicable Rule 12b-1 fees and certain other expenses) of each class of the
fund, and of each class of most other FIMM funds, to 0.20% of the class's
average net assets. FMR may terminate the voluntary expense limitation with
respect to the fund at any time without prior notice to shareholders; FMR
does not, however, intend to do so at this time whether or not shareholders
approve the Amended Contract. Therefore, approval of the proposal is not
expected to result in a change in the total operating expenses of any class
of the fund at this time because, under the proposed management fee
structure, each class would continue to be subject to the same voluntary
expense limitation. If FMR were to terminate the voluntary expense
limitation in the future, the fund's total operating expenses under the
Amended Contract could exceed the fund's current all-inclusive management
fee. Approval of the proposal would not affect the way in which the fund is
managed.
PROPOSED AMENDMENTS TO THE PRESENT MANAGEMENT CONTRACT. A copy of the
Amended Contract, marked to indicate the proposed amendments, is supplied
as Exhibit on page . Except for the modifications discussed above, the
Amended Contract is substantially identical to the Present Contract. (For a
detailed discussion of the fund's Present Contract, refer to the section
entitled "Present Management Contract" beginning on page .) If approved by
shareholders, the Amended Contract will take effect on May 30, 1997 (or, if
later, the first day of the first month following approval) and will remain
in effect through May 31, 1998, and thereafter only as long as its
continuance is approved at least annually by (i) the vote, cast in person
at a meeting called for the purpose, of the Independent Trustees and (ii)
the vote of either a majority of the Trustees or a majority of the
outstanding shares of the fund. If the Amended Contract is not approved,
the Present Contract will continue in effect through May 31, 1997, and
thereafter only as long as its continuance is approved at least annually by
(i) the vote, cast in person at a meeting called for the purpose, of a
majority of the Independent Trustees and (ii) the vote of either a majority
of the Trustees or a majority of the outstanding shares of the fund.
The management fee is an annual percentage of the fund's average net
assets, calculated and paid monthly. Under the Present Contract, the fund
pays FMR a 0.42% all-inclusive management fee, and FMR pays all of the
fund's other expenses with certain exceptions (described below). Under the
Amended Contract, the fund would pay FMR a 0.20% management fee that is not
all-inclusive; the fund would pay separately for all of its other expenses.
MODIFICATIONS TO THE MANAGEMENT FEE STRUCTURE. Under the Present Contract,
the fund pays FMR an all-inclusive management fee at an annual rate of
0.42% of the fund's average net assets. FMR pays all of the fund's other
expenses, with the following exceptions: Rule 12b-1 fees (applicable to
Class II and Class III shares only); taxes; brokerage fees and commissions;
interest on the fund's borrowings; the fees and expenses of the Independent
Trustees; and such non-recurring expenses as may arise, including the costs
of any litigation to which the fund may be a party, and any obligation the
fund may have to indemnify its officers and Trustees with respect to
litigation. FMR also provides for, and bears the cost of, transfer agent
and dividend disbursing services through Fidelity Investments Institutional
Operations Company, Inc. (FIIOC), and portfolio and general accounting
record maintenance through Fidelity Service Company, Inc. (FSC). The fund's
management fee is reduced by the amount of compensation that the fund pays
to the Independent Trustees.
Class II and Class III shares of the fund are subject to Rule 12b-1 fees
of 0.15% and 0.25%, respectively, of the applicable class's average net
assets; Class I shares of the fund are not subject to Rule 12b-1 fees.
Class II and Class III each pays Rule 12b-1 fees to FDC as compensation for
FDC's services and expenses in connection with the distribution of the
class's shares. The proposed modifications to the management fee
arrangement between the fund and FMR do not affect the Rule 12b-1 fees.
Under the Amended Contract, the fund would pay FMR a management fee at an
annual rate of 0.20% of the fund's average net assets, the standard rate
for other FIMM funds. Unlike the management fee under the Present Contract,
the management fee under the Amended Contract would not be all-inclusive.
Therefore, in addition to the management fee and the other expenses (listed
above) for which the fund pays under the Present Contract, the fund would
pay for its expenses including: legal and audit expenses; custodian,
registrar, and transfer agent fees and expenses; the fees and expenses
related to the registration and qualification of the trust and the fund's
shares for distribution under state and federal securities laws; the
expenses of printing and mailing notices and reports and proxy material to
the fund's shareholders; all other expenses incidental to holding meetings
of the fund's shareholders, including proxy solicitations therefor; a
proportionate share of insurance premiums and Investment Company Institute
dues; and the expenses of typesetting, printing, and mailing prospectuses
and statements of additional information. Although the Amended Contract
provides that the fund would pay the expenses of typesetting, printing, and
mailing prospectuses, statements of additional information, notices, and
reports to shareholders, if shareholders approve this proposal, the trust,
on behalf of the fund, would be added as a party to a transfer agent
agreement with FIIOC, pursuant to which FIIOC would bear the cost of
providing these services to shareholders of each class of the fund.
Currently, FMR voluntarily reimburses each class of the fund to the extent
that total operating expenses (excluding Rule 12b-1 fees applicable to
Class II and Class III shares; interest; taxes; brokerage commissions; and
extraordinary expenses) exceed 0.20% of the class's average net assets. FMR
does not intend to terminate the voluntary expense limitation at this time.
The proposed amendments, therefore, would not result in an increase in any
class's total operating expenses at this time because, under the proposed
management fee structure, each class would continue to be subject to the
same voluntary expense limitation. If FMR were to terminate the voluntary
expense limitation in the future, the fund's total operating expenses under
the Amended Contract could exceed the fund's current all-inclusive
management fee.
REASONS FOR THE PROPOSAL. FMR recommended the proposed amendments to the
fund's management contract to the Board of Trustees in order to bring the
fund's management fee structure in line with that of comparable Fidelity
institutional money market funds. Together, the fund and the comparable
Fidelity funds are marketed as the Fidelity Institutional Money Market (or
FIMM) funds. FMR proposed the amendments as part of its effort to
standardize the terms of the management contracts for all of the FIMM
funds. Like the fund, the other FIMM funds currently offer three classes of
shares (Class I, Class II, and Class III).
FMR's request that the fund's management contract be amended reflects its
belief that the fund should have the management fee structure that is
standard for other FIMM funds. In making its request, FMR noted that
although the fund was once marketed as part of a different product line,
the fund is now marketed as part of the FIMM funds product line - a product
line of high minimum investment, lower-expense money market funds for
institutional investors. Although the fund currently operates under the
same voluntary expense limitation as most other FIMM funds, it does not
have the standard FIMM funds management contract and fee structure.
Because the FIMM funds are marketed together in the same prospectuses,
which describe, among other features, the funds' management fee
arrangements (including expense limitations), prospectus disclosure of the
terms of the various management contracts may lead to investor confusion
about the management fee structure of the FIMM funds product line.
Standardizing the fund's management fee structure would further the goal of
simplifying the prospectus disclosure and improving shareholder
understanding of the product line. Moreover, standardizing the fund's
management fee structure will not have any impact on the current total
operating expenses of any class of the fund, or affect the way in which the
fund is managed.
According to Lipper Analytical Services, Inc. (Lipper), an independent
service that monitors the mutual fund industry, the median management fee
rate for the Institutional Money Market Fund fee universe, which includes
356 funds, was approximately 0.37% for the twelve months ended December
1996. This median fee rate is 172% higher than the fee rate proposed under
the Amended Contract. The median total expense rate (after reimbursement)
for the same fee universe was approximately 0.38% for the same period.
Based on the proposed management fee rate (and assuming the current
voluntary expense limitation is in effect), the total operating expenses of
Class I of the fund (0.20%) would be below the median; the total operating
expenses of Class II of the fund (0.35%) would be below the median; and the
total operating expenses of Class III of the fund (0.45%) would be above
the median. The above-median results for Class III are attributable to the
class's 0.25% distribution and service fee.
COMPARISON OF MANAGEMENT FEES AND TOTAL EXPENSES. Under the Present
Contract, the fund pays FMR an all-inclusive management fee at an annual
rate of 0.42% of the fund's average net assets, and FMR pays all of the
fund's other expenses with certain exceptions. Under the Amended Contract,
the fund would pay FMR a management fee at an annual rate of 0.20% of the
fund's average net assets and would pay separately for all of its other
expenses.
Currently, FMR voluntarily reimburses each class of the fund to the extent
that total operating expenses (excluding Rule 12b-1 fees applicable to
Class II and Class III shares; interest; taxes; brokerage commissions; and
extraordinary expenses) exceed 0.20% of the class's average net assets.
Although FMR does not currently intend to do so, it may terminate the
voluntary expense limitation at any time without prior notice to
shareholders.
The following chart compares the fund's management fee under the terms of
the Present Contract for the fiscal year ended March 31, 1996, to the
management fee that the fund would have incurred under the Amended Contract
if it had been in effect during that period.
Present Contract Amended Contract Percentage Difference
Management Fee Management Fee
$ ,5,448,560* $ 2,597,120 (52%)
* Figure does not reflect the voluntary expense limitation currently in
effect. The voluntary expense limitation resulted in an actual management
fee of $2,597,120, the same management fee that the fund would have
incurred under the Amended Contract.
The following charts compare the fees and expenses that each class of the
fund paid under the Present Contract for the fiscal year ended March 31,
1996, to the fees and expenses that each class would have paid under the
Amended Contract if it had been in effect during that period. The fees and
expenses are shown both with and without the reduction due to the voluntary
expense limitation currently in effect. All fees and expenses are expressed
as a percentage of the applicable class's average net assets.
CLASS I PRESENT CONTRACT AMENDED CONTRACT
Management Fee 0.20%*/0.42% 0.20%
Rule 12b-1 Fee N/A N/A
Other Expenses 0.00% 0.00%*/0.17%**
Total Operating 0.20%*/0.42% 0.20%*/0.37%**
Expenses
CLASS II PRESENT CONTRACT AMENDED CONTRACT
Management Fee 0.20%*/0.42% 0.20%
Rule 12b-1 Fee 0.15% 0.15%
Other Expenses(dagger) 0.00% 0.00%*/0.15%**
Total Operating 0.35%*/0.57% 0.35%*/0.50%**
Expenses(dagger)
CLASS III PRESENT CONTRACT AMENDED CONTRACT
Management Fee 0.20%*/0.42% 0.20%
Rule 12b-1 Fee 0.25% 0.25%
Other Expenses 0.00% 0.00%*/0.14%**
Total Operating 0.45%*/0.67% 0.45%*/0.59%**
Expenses
* Figures reflect the voluntary expense limitation currently in effect.
** Estimated. Actual expenses may be higher or lower than those shown.
(dagger) Annualized.
The proposed amendments would not result in an increase in the total
operating expenses of any class of the fund at this time because, under the
proposed management fee structure, each class would continue to be subject
to the same voluntary expense limitation currently in effect with respect
to that class.
MATTERS CONSIDERED BY THE BOARD
The mutual funds for which the members of the Board of Trustees serve as
Trustees are referred to herein as the "Fidelity funds." The Board of
Trustees meets eleven times a year. The Board of Trustees, including the
Independent Trustees, believe that matters bearing on the appropriateness
of the fund's management fees are considered at most, if not all, of their
meetings. While the full Board of Trustees or the Independent Trustees, as
appropriate, act on all major matters, a significant portion of the
activities of the Board of Trustees (including certain of those described
herein) are conducted through committees. The Independent Trustees meet
frequently in executive session and are advised by independent legal
counsel selected by the Independent Trustees.
The Amended Contract was approved by the Board of Trustees of the fund,
including all of the Independent Trustees, on December 19, 1996.The Board
of Trustees received materials relating to the Amended Contract in advance
of the meeting at which the Amended Contract was considered, and had the
opportunity to ask questions and request further information in connection
with such consideration.
INFORMATION RECEIVED BY THE BOARD. In connection with their monthly
meetings Trustees receive materials specifically relating to the Amended
Contract. These materials include: (i) information on the investment
performance of the fund, a peer group of funds and an appropriate index or
combination of indices, (ii) sales and redemption data, (iii) the economic
outlook and the general investment outlook in the markets in which the fund
invests, and (iv) notable changes in the fund's investments. The Board of
Trustees and the Independent Trustees also consider periodically other
material facts such as (1) FMR's financial condition, (2) arrangements in
respect of the distribution of the fund's shares, (3) the procedures
employed to determine the value of the fund's assets, (4) the allocation of
the fund's brokerage, if any, including allocations to brokers affiliated
with FMR, (5) FMR's management of the relationships with the fund's
custodian and subcustodians, and (6) the resources devoted to and the
record of compliance with the fund's investment policies and restrictions
and with policies on personal securities transactions.
In considering the Amended Contract, the Board of Trustees and the
Independent Trustees did not identify any single factor as all-important or
controlling, and the following summary does not detail all of the matters
considered. Matters considered by the Board of Trustees and the Independent
Trustees include the following:
INVESTMENT COMPLIANCE AND PERFORMANCE. The Board of Trustees and the
Independent Trustees considered whether the fund has operated within its
investment objective and its record of compliance with its investment
restrictions. They also reviewed monthly the fund's investment performance
as well as the performance of a peer group of mutual funds, and the
performance of an appropriate index or combination of indices.
FMR'S PERSONNEL AND METHODS. The Board of Trustees and the Independent
Trustees annually review a report detailing the background of the fund's
portfolio manager, and the fund's investment objective and discipline. The
Independent Trustees have also had discussions with senior management of
FMR responsible for investment operations, and the senior management of
Fidelity's money market group. Among other things they considered the size,
education and experience of FMR's investment staff, its use of technology,
and FMR's approach to recruiting, training and retaining portfolio managers
and other research, advisory and management personnel.
NATURE AND QUALITY OF OTHER SERVICES. The Board of Trustees and the
Independent Trustees considered the nature, quality, cost and extent of
administrative and shareholder services performed by FMR and affiliated
companies, both under the Amended Contract and under separate agreements
covering transfer agency functions and pricing, bookkeeping and securities
lending services, if any. The Board of Trustees and the Independent
Trustees have also considered the nature and extent of FMR's supervision of
third party service providers, principally custodians and subcustodians.
EXPENSES. The Board of Trustees and the Independent Trustees considered the
fund's expense ratio and expense ratios of a peer group of funds. They also
considered the amount and nature of fees paid by shareholders.
PROFITABILITY. The Board of Trustees and the Independent Trustees
considered the level of FMR's profits in respect of the management of the
Fidelity funds, including the fund. This consideration included an
extensive review of FMR's methodology in allocating its costs to the
management of the fund. The Board of Trustees and the Independent Trustees
have concluded that the cost allocation methodology employed by FMR has a
reasonable basis and is appropriate in light of all of the circumstances.
They considered the profits realized by FMR in connection with the
operation of the fund and whether the amount of profit is a fair
entrepreneurial profit for the management of the fund. They also considered
the profits realized from non-fund businesses which may benefit from or be
related to the fund's business. The Board of Trustees and the Independent
Trustees also considered FMR's profit margins in comparison with available
industry data, both accounting for and ignoring market expenses.
OTHER BENEFITS TO FMR. The Board of Trustees and the Independent Trustees
also considered the character and amount of fees paid by the fund and the
fund's shareholders for services provided by FMR and its affiliates,
including fees for services like transfer agency, fund accounting and
direct shareholder services. They also considered the allocation of fund
brokerage to brokers affiliated with FMR and the receipt of sales loads and
payments under Rule 12b-1 plans in respect of certain of the Fidelity
funds. The Board of Trustees and the Independent Trustees also considered
the revenues and profitability of FMR businesses other than its mutual fund
business, including FMR's retail brokerage, correspondent brokerage,
capital markets, trust, investment advisory, pension record keeping, credit
card, insurance, publishing, real estate, international research and
investment funds, and others. The Board of Trustees and the Independent
Trustees considered the intangible benefits that accrue to FMR and its
affiliates by virtue of their relationship with the fund.
OTHER BENEFITS TO SHAREHOLDERS. The Board of Trustees and the Independent
Trustees considered the benefit to shareholders of investing in a fund that
is part of a large family of funds offering a variety of investment
disciplines and providing for a large variety of fund and shareholder
services.
CONCLUSION. Based on their evaluation of all material factors and assisted
by the advice of independent counsel, the Trustees concluded that the
proposed modifications to the management fee structure are in the best
interest of the fund's shareholders. The Board of Trustees, including the
Independent Trustees, voted to approve the submission of the Amended
Contract to shareholders of the fund and recommends that shareholders of
the fund vote FOR the Amended Contract.
2. TO APPROVE AN AGREEMENT AND PLAN PROVIDING FOR THE REORGANIZATION OF THE
FUND FROM A SEPARATE SERIES OF ONE DELAWARE BUSINESS TRUST TO ANOTHER.
The Board of Trustees, including a majority of the Independent Trustees,
has approved an Agreement and Plan of Reorganization (the Plan of
Reorganization) in the form attached to this Proxy Statement as Exhibit 2.
The Plan of Reorganization provides for a reorganization of Treasury Only
Portfolio (the Fund) from a separate series of Daily Money Fund (DMF), a
Delaware business trust, to a newly-established, separate series of
Fidelity Institutional Cash Portfolios (the Trust), also a Delaware
business trust (the Reorganization).THE PROPOSED CHANGE WILL HAVE NO
MATERIAL EFFECT ON SHAREHOLDERS OR THE MANAGEMENT OF THE FUND.
The investment objective, policies, and limitations of the Fund will not
change. A separate series of the Trust will carry on the business of the
Fund following the Reorganization (the Series). The Series, which has not
yet commenced business operations, will have an investment objective,
policies, and limitations identical to those of the Fund. The Series will
have the same class structure as the Fund. Since both DMF and the Trust are
Delaware business trusts, organized under substantially similar Trust
Instruments, the rights of the security holders of the Fund under state law
and the governing documents are expected to remain unchanged after the
Reorganization, nor will the Reorganization affect the operation of the
Fund in a material manner. The same individuals serve as Trustees of both
trusts. Both trusts are authorized to issue an unlimited number of shares
of beneficial interest, and each Trust Instrument permits the Trustees to
create one or more additional series or funds. The Trust's fiscal year is
the same as that of the Fund, although the Trustees may change the fiscal
year at their discretion.
FMR, the Fund's investment adviser, will be responsible for the investment
management of the Series, subject to the supervision of the Board of
Trustees, under a management contract substantially identical to the
contract currently in effect between FMR and the Fund (the Present
Management Contract) (except as it may be modified pursuant to a vote of
the shareholders of the fund as proposed in this Proxy Statement);
similarly, FMR Texas, the Fund's sub-adviser, will have primary
responsibility for providing portfolio investment advisory services to the
Series under a Sub-Advisory Agreement substantially identical to the
agreement currently in effect between FMR Texas and FMR (the Present
Sub-Advisory Agreement).
The Fund's distribution agent, FDC, will distribute shares of the Series
under a General Distribution Agreement substantially identical to the
contract currently in effect between FDC and the Fund.
REASON FOR THE PROPOSED REORGANIZATION. The Fund is presently organized as
a series of DMF, which has six series of shares or funds. The Board of
Trustees unanimously recommends conversion of the Fund to a separate series
of the Trust (i.e., into the Series) which will succeed to the business of
the Fund. Moving the Fund from DMF to the Trust will consolidate and
streamline the production and mailing of certain financial reports and
legal documents. The proposed change will have no material effect on
shareholders or the management of the Fund.
The Plan of Reorganization was approved by the Board of Trustees of DMF,
including all of the Trustees who are not interested persons of FMR, on
December 19, 1996. The Board of Trustees recommends that Fund shareholders
vote FOR the approval of the Plan of Reorganization described below. Such a
vote encompasses approval of the conversion of the Fund to a separate
series of the Trust; temporary waiver of certain investment limitations of
the Fund to permit the Reorganization (see "Temporary Waiver of Investment
Restrictions" on page _); authorization of DMF, as sole shareholder of the
Series, to approve (i) a Management Contract for the Series between the
Trust and FMR, and (ii) a Sub-Advisory Agreement between FMR and FMR Texas
with respect to the Series, substantially identical to the contracts
currently in effect with the Fund (except as the Present Management
Contract may be modified pursuant to a vote of the shareholders of the Fund
as proposed in this Proxy Statement); and authorization of DMF, as sole
shareholder of each class of the Series, to approve a Distribution and
Service Plan under Rule 12b-1 for each class of the Series substantially
identical to the plan currently in effect with respect to each such class
of the Fund (except as indicated in the plans attached as Exhibits 3, 4,
and 5 to this Proxy Statement). If shareholders of the Fund do not approve
the Plan of Reorganization, the Fund will continue to operate as a series
of DMF.
SUMMARY OF THE PLAN OF REORGANIZATION. The following discussion summarizes
the important terms of the Plan of Reorganization. This summary is
qualified in its entirety by reference to the Plan of Reorganization
itself, which is attached as Exhibit 2 to this Proxy Statement.
On the Closing Date of the Reorganization (defined below), the Fund will
transfer all of its assets to the Series, a series of shares of the Trust
established for the purpose of effecting the Reorganization, in exchange
for the assumption by the Series of all of the liabilities of the Fund and
the issuance of shares of beneficial interest of the corresponding classes
of the Series (the Trust Series Shares) equal to the number of Fund shares
outstanding on the Closing Date. Immediately thereafter, the Fund will
distribute one Trust Series Share of the applicable class for each Fund
share (the Fund Shares) held by the shareholder on the Closing Date to each
Fund shareholder, in liquidation of such Fund Shares. Immediately after
this distribution of the Trust Series Shares, the Fund will be terminated
and, as soon as practicable thereafter, will be wound up and liquidated.
UPON COMPLETION OF THE REORGANIZATION, EACH FUND SHAREHOLDER WILL BE THE
OWNER OF FULL AND FRACTIONAL TRUST SERIES SHARES EQUAL IN NUMBER,
DENOMINATION, AND AGGREGATE NET ASSET VALUE TO HIS OR HER FUND SHARES.
The Plan of Reorganization authorizes DMF, as the then sole initial
shareholder of the Series, to approve (i) a Management Contract with FMR
for the Series (the New Management Contract), and (ii) a Sub-Advisory
Agreement between FMR and FMR Texas with respect to the Series (the New
Sub-Advisory Agreement), substantially identical to the contracts currently
in effect with the Fund (except as the Present Management Contract may be
modified pursuant to a vote of the shareholders of the Fund as proposed in
this Proxy Statement); and authorizes DMF, as the then sole initial
shareholder of each class of the Series, to approve a Distribution and
Service Plan under Rule 12b-1 for each class of the Series substantially
identical to the plan currently in effect with respect to each such class
of the Fund (except as indicated in the plans attached as Exhibits 3, 4,
and 5 to this Proxy Statement).
The Trust's Board of Trustees will hold office without limit in time
except that (a) any Trustee may resign; (b) any Trustee may be removed by
written instrument signed by at least two-thirds of the number of Trustees
prior to removal; (c) any Trustee who requests in writing to be retired or
who has become incapacitated by illness or injury may be retired by written
instrument signed by a majority of the other Trustees; and (d) a Trustee
may be removed at any Special Meeting of the shareholders by a vote of
two-thirds of the outstanding shares of the Trust. In case a vacancy shall
for any reason exist, the remaining Trustees will fill such vacancy by
appointing another Trustee, so long as, immediately after such appointment,
at least two-thirds of the Trustees have been elected by shareholders. If,
at any time, less than a majority of the Trustees holding office has been
elected by shareholders, the Trustees then in office will promptly call a
shareholders' meeting for the purpose of electing a Board of Trustees.
Otherwise, there will normally be no meeting of shareholders for the
purpose of electing Trustees.
The New Management Contract, the New Sub-Advisory Agreement, and the New
Plans will take effect on the Closing Date. The New Management Contract,
the New Sub-Advisory Agreement, and the New Plans will continue in force
until May 31, 1998. Each agreement will continue in force thereafter from
year to year so long as its continuance is approved at least annually (i)
by the vote of a majority of the Trustees who are not "interested persons"
of the Trust, FMR, or FMR Texas, cast in person at a meeting called for the
purpose of voting on such approval, and (ii) by the vote of a majority of
the Trustees or by the vote of a majority of the outstanding shares of the
Series. The New Plans will continue in effect only if approved annually by
a vote of the Trustees and of those Trustees who are not interested
persons, cast in person at a meeting called for that purpose. The New
Management Contract and New Sub-Advisory Agreement each will be terminable
without penalty on sixty days' written notice either by the Trust, FMR, or
FMR Texas, as the case may be, and will terminate automatically in the
event of its assignment. The New Plans will be terminable at any time
without penalty by a vote of a majority of the Independent Trustees or a
majority of the outstanding voting shares of the applicable class.
Assuming the Plan of Reorganization is approved, it is currently
contemplated that the Reorganization will become effective at the close of
business on May 30, 1997 (the Closing Date). However, the Reorganization
may become effective at such later date as the parties may agree in
writing.
The obligations of DMF and the Trust under the Plan of Reorganization are
subject to various conditions as stated therein. Notwithstanding the
approval of the Plan of Reorganization by Fund shareholders, the Plan of
Reorganization may be terminated or amended at any time prior to the
Reorganization by action of the Trustees to provide against unforeseen
events, if (1) there is a material breach by the other party of any
representation, warranty, or agreement contained in the Plan of
Reorganization to be performed at or prior to the Closing Date or (2) it
reasonably appears that a party will not or cannot meet a condition of the
Plan of Reorganization. Either trust may at any time waive compliance with
any of the covenants and conditions contained in, or may amend, the Plan of
Reorganization, provided that such waiver or amendment does not materially
adversely affect the interests of Fund shareholders.
CONTINUATION OF FUND SHAREHOLDER ACCOUNTS AND PLANS. The Trust's transfer
agent will establish an account for the Series' shareholders containing the
appropriate number and denominations of Trust Series Shares to be received
by each holder of Fund Shares under the Plan of Reorganization. Such
accounts will be identical in all material respects to the accounts
currently maintained by the Fund's transfer agent for the Fund's
shareholders.
EXPENSES. Expenses of the Reorganization, estimated at $_________ in the
aggregate, will be borne by FMR.
TEMPORARY WAIVER OF INVESTMENT RESTRICTIONS. Certain fundamental
investment restrictions of the Fund, which prohibit the Fund from acquiring
more than a stated percentage of ownership of another company, might be
construed as restricting the Fund's ability to carry out the
Reorganization. By approving the Plan of Reorganization, Fund shareholders
will be agreeing to waive, only for the purpose of the Reorganization,
those fundamental investment restrictions that could prohibit or otherwise
impede the transaction.
TAX CONSEQUENCES OF THE REORGANIZATION. Each trust has received an opinion
from their counsel, Kirkpatrick & Lockhart LLP, that the Reorganization
will constitute a tax-free reorganization within the meaning of Section
368(a)(1)(F) of the Internal Revenue Code of 1986, as amended. Accordingly,
no gain or loss will be recognized for federal income tax purposes by the
Fund, the Series, or the Fund's shareholders upon (1) the transfer of the
Fund's assets in exchange solely for the Trust Series Shares and the
assumption by the Trust on behalf of the Series of the Fund's liabilities
or (2) the distribution of Trust Series Shares to the Fund's shareholders
in liquidation of their Fund Shares. The opinion further provides, among
other things, that (a) the basis for federal income tax purposes of the
Trust Series Shares to be received by each Fund shareholder will be the
same as that of his or her Fund Shares immediately prior to the
Reorganization; and (b) each Fund shareholder's holding period for his or
her Trust Series Shares will include the Fund shareholder's holding period
for his or her Fund Shares, provided that said Fund Shares were held as
capital assets on the date of the exchange.
CONCLUSION. The Board of Trustees has concluded that the proposed Plan of
Reorganization to convert the Fund into a separate series of the Trust is
in the best interest of the Fund's shareholders. The Trustees recommend
that the Fund's shareholders vote FOR the approval of the Plan of
Reorganization as described above. Such a vote encompasses approval of the
reorganization of the Fund to a separate series of the Trust; temporary
waiver of certain investment limitations of the Fund to permit the
Reorganization (see "Temporary Waiver of Investment Restrictions" on page
__); authorization of DMF, as sole shareholder of the Series, to approve
(i) a Management Contract for the Series between the Trust and FMR, and
(ii) a Sub-Advisory Agreement for the Series between FMR and FMR Texas,
substantially identical to the contracts currently in effect with the Fund
(except as the Present Management Contract may be modified pursuant to a
vote of the shareholders of the Fund as proposed in this Proxy Statement);
and authorization of DMF, as sole shareholder of each class of the Series,
to approve a Distribution And Service Plan under Rule 12b-1 for each class
of the Series substantially identical to the plan currently in effect with
respect to each such class of the Fund (except as indicated in the plans
attached as Exhibits 3, 4, and 5 to this Proxy Statement). If approved, the
Plan of Reorganization will take effect on the Closing Date. If the Plan of
Reorganization is not approved, the Fund will continue to operate as a
series of DMF.
OTHER BUSINESS
The Board knows of no other business to be brought before the Meeting.
However, if any other matters properly come before the Meeting, it is the
intention that proxies that do not contain specific instructions to the
contrary will be voted on such matters in accordance with the judgment of
the persons therein designated.
PRESENT MANAGEMENT CONTRACT
The fund employs FMR to furnish investment advisory and other services.
Under its management contract with the fund, FMR acts as investment adviser
and, subject to the supervision of the Board of Trustees, directs the
investments of the fund in accordance with its investment objective,
policies, and limitations. FMR also provides the fund with all necessary
office facilities and personnel for servicing the fund's investments,
compensates all officers of the fund and all Trustees who are "interested
persons" of the trust or of FMR, and all personnel of the fund or FMR
performing services relating to research, statistical, and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administrative services
necessary for the operation of the fund. These services include providing
facilities for maintaining the fund's organization; supervising relations
with custodians, transfer and pricing agents, accountants, underwriters,
and other persons dealing with the fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining the fund's
records and the registration of the fund's shares under federal and state
laws; developing management and shareholder services for the fund; and
furnishing reports, evaluations, and analyses on a variety of subjects to
the Trustees. Services provided by affiliates of FMR will continue under
the proposed management contract described in proposal 1.
FMR is responsible for the payment of all expenses of the fund with
certain exceptions. Specific expenses payable by FMR include, without
limitation, expenses for typesetting, printing, and mailing proxy materials
to shareholders; legal expenses, and the fees of the custodian, auditor and
interested Trustees; costs of typesetting, printing, and mailing
prospectuses and statements of additional information, notices and reports
to shareholders; the fund's proportionate share of insurance premiums and
Investment Company Institute dues. FMR also provides for transfer agent and
dividend disbursing services through FIIOC, and portfolio and general
accounting record maintenance through FSC, an affiliate of FMR.
FMR pays all other expenses of the fund with the following exceptions:
fees and expenses of all Trustees of the trust who are not "interested
persons" of the trust or FMR (the non-interested Trustees); interest on
borrowings; taxes; brokerage commissions (if any); and such nonrecurring
expenses as may arise, including costs of any litigation to which the fund
may be a party, and any obligation it may have to indemnify the officers
and Trustees with respect to litigation.
FMR is the fund's manager pursuant to a management contract dated
September 30, 1993, which was approved by Daily Money Fund as sole
shareholder of the fund on September 29, 1993, pursuant to an Agreement and
Plan of Conversion and Termination approved by shareholders of the fund on
March 24, 1993. The management fee paid to FMR is reduced by an amount
equal to the fees and expenses paid by the fund to the non-interested
Trustees.
For the services of FMR under the contract, the fund pays FMR a monthly
management fee at the annual rate of .42% of the average net assets of the
fund throughout the month. Fees received by FMR, after reduction of fees
and expenses paid by the fund to the non-interested Trustees, for the
fiscal year ended March 31, 1996 from the fund were $2,597,120.
FMR may, from time to time, voluntarily reimburse all or a portion of the
fund's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to be
repaid for these expense reimbursements in the amount that expenses fall
below the limit prior to the end of the fiscal year. Expense reimbursements
by FMR will increase the fund's total returns and yield and repayment of
the reimbursement by the fund will lower its total returns and yield.
During fiscal 1996, FMR voluntarily agreed to reimburse the fund to the
extent that its aggregate operating expenses, including management fees
(but excluding Rule 12b-1 fees; interest; taxes; brokerage commissions; and
extraordinary expenses), were in excess of an annual rate of .20% of the
average net assets of the fund. If this reimbursement had not been in
effect, for fiscal 1996, FMR would have received fees amounting to
$5,448,560, which would have been equivalent to __% of the average net
assets of the fund (after reduction for compensation to the non-interested
Trustees).
SUB-ADVISORY AGREEMENTS
FMR has entered into a sub-advisory agreement with FMR Texas pursuant to
which FMR Texas has primary responsibility for providing portfolio
investment management services to the fund. The fund's sub-advisory
agreement, dated September 30, 1993, was approved by Daily Money Fund as
sole shareholder of the fund on September 29, 1993, pursuant to an
Agreement and Plan of Conversion and Termination approved by shareholders
of the fund on March 24, 1993.
Under the sub-advisory agreement, FMR pays FMR Texas fees equal to 50% of
the management fee payable to FMR under its management contract with the
fund. 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 March 31, 1996, FMR paid FMR Texas fees of
$2,724,280.
ACTIVITIES AND MANAGEMENT OF FMR
FMR, a corporation organized in 1946, serves as investment adviser to a
number of investment companies. Information concerning the advisory fees,
net assets, and total expenses of funds with investment objectives similar
to Treasury Only Portfolio's and advised by FMR is contained in the Table
of Average Net Assets and Expense Ratios in Exhibit 6 beginning on page __.
FMR, its officers and directors, its affiliated companies, and the
Trustees, from time to time have transactions with various banks, including
the custodian banks for certain of the funds advised by FMR. Those
transactions that have occurred to date have included mortgages and
personal and general business loans. In the judgment of FMR, the terms and
conditions of those transactions were not influenced by existing or
potential custodial or other fund relationships.
The Directors of FMR are Edward C. Johnson 3d, Chairman of the Board; J.
Gary Burkhead, President; and Peter S. Lynch, Vice Chairman. Each of the
Directors is also a Trustee of the trust. Mr. Johnson 3d, Mr. Burkhead,
John H. Costello, Arthur S. Loring, Thomas D. Maher, Kenneth A. Rathgeber,
Leonard M. Rush, Thomas J. Simpson, Sarah H. Zenoble, and Leland C. Barron
are currently officers of the trust and officers or employees of FMR, FMR
Texas, or FMR Corp. With the exception of Mr. Costello, Mr. Maher, Mr.
Rathgeber, and Mr. Rush, all of these persons are stockholders of FMR Corp.
The principal business address of each of the Directors of FMR is 82
Devonshire Street, Boston, Massachusetts 02109.
All of the stock of FMR is owned by its parent company, FMR Corp., 82
Devonshire Street, Boston, Massachusetts 02109, which was organized on
October 31, 1972. Members of Mr. Edward C. Johnson 3d's family are the
predominant owners of a class of shares of common stock, representing
approximately 49% of the voting power of FMR Corp., and, therefore, under
the 1940 Act may be deemed to form a controlling group with respect to FMR
Corp.
During the period March 31, 1995 through January 31, 1997, [no/the
following] transactions were entered into by Trustees and nominees as
Trustee of the trust involving more than 1% of the voting common,
non-voting common and equivalent stock, or preferred stock of FMR Corp.
ACTIVITIES AND MANAGEMENT OF FMR TEXAS
FMR Texas is a wholly owned subsidiary of FMR formed in 1989 to provide
portfolio management services to Fidelity's money market funds and
investment advice with respect to money market instruments.
Funds with investment objectives similar to Treasury Only Portfolio's for
which FMR has entered into a sub-advisory agreement with FMR Texas, and the
net assets of each of these funds, are indicated in the Table of Average
Net Assets and Expense Ratios in Exhibit 6 beginning on page __.
The Directors of FMR Texas are Edward C. Johnson 3d, Chairman, and J. Gary
Burkhead, President. Mr. Johnson 3d also is President and a Trustee of the
trust and of other funds advised by FMR; Chairman, Chief Executive Officer,
President, and a Director of FMR Corp.; Chairman of the Board and of the
Executive Committee of FMR; a Director of FMR; and Chairman and Director of
Fidelity Management & Research (U.K.) Inc. and Fidelity Management &
Research (Far East) Inc. In addition, Mr. Burkhead is Senior Vice President
and a Trustee of the trust and of other funds advised by FMR; a Director of
FMR Corp.; President and Director of FMR; and President and Director of FMR
U.K. and FMR Far East. Each of the Directors is a stockholder of FMR Corp.
The principal business address of the Directors is 82 Devonshire Street,
Boston, Massachusetts 02109.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of the fund by FMR pursuant to authority contained in the fund's
management contract.
FMR may place agency transactions with Fidelity Brokerage Services, Inc.
(FBSI) and Fidelity Brokerage Services (FBS), subsidiaries of FMR Corp., if
the commissions are fair, reasonable, and comparable to commissions charged
by non-affiliated, qualified brokerage firms for similar services.
SUBMISSION OF CERTAIN SHAREHOLDER PROPOSALS
The trust does not hold annual shareholder meetings. Shareholders wishing
to submit proposals for inclusion in a proxy statement for a subsequent
shareholder meeting should send their written proposals to the Secretary of
the Trust, 82 Devonshire Street, Boston, Massachusetts 02109.
NOTICE TO BANKS, BROKER-DEALERS AND
VOTING TRUSTEES AND THEIR NOMINEES
Please advise the trust, in care of Fidelity Investments Institutional
Operations Company, Inc., 82 Devonshire Street, Boston, Massachusetts
02109, whether other persons are beneficial owners of shares for which
proxies are being solicited and, if so, the number of copies of the Proxy
Statement and Annual Reports you wish to receive in order to supply copies
to the beneficial owners of the respective shares.
EXHIBIT 1
The language added to the current contract is in ((double parentheses));
the language deleted is set forth in [brackets].
FORM OF
MANAGEMENT CONTRACT
BETWEEN
DAILY MONEY FUND:
TREASURY ONLY PORTFOLIO
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT ((AMENDED and RESTATED as of)) [made] this [30th day of
September, 1993] ((__ day of May, 1997)), 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 Treasury
Only Portfolio (hereinafter called the "Portfolio"), and Fidelity
Management & Research Company, a Massachusetts corporation (hereinafter
called the "Adviser") ((as set forth in its entirety below)).
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 other services, shall not be payable by the
Adviser, but may be received by the Adviser or its affiliates.]
(c) The Adviser [, at its own expense,] shall place all orders for the
purchase and sale of portfolio securities for the Portfolio's account with
brokers or dealers selected by the Adviser, which may include brokers or
dealers affiliated with the Adviser. The Adviser shall use its best efforts
to seek to execute portfolio transactions at prices which are advantageous
to the Portfolio and at commission rates which are reasonable in relation
to the benefits received. In selecting brokers or dealers qualified to
execute a particular transaction, brokers or dealers may be selected who
also provide brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934) to the Portfolio
and/or the other accounts over which the Adviser or its affiliates exercise
investment discretion. The Adviser is authorized to pay a broker or dealer
who provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess of
the amount of commission another broker or dealer would have charged for
effecting that transaction if the Adviser determines in good faith that
such amount of commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer. This
determination may be viewed in terms of either that particular transaction
or the overall responsibilities which the Adviser and its affiliates have
with respect to accounts over which they exercise investment discretion.
The Trustees of the Fund shall periodically review the commissions paid by
the Portfolio to determine if the commissions paid over representative
periods of time were reasonable in relation to the benefits to the
Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors,
officers or otherwise and that directors, officers and stockholders of the
Adviser are or may be or become similarly interested in the Fund, and that
the Adviser may be or become interested in the Fund as a shareholder or
otherwise.
3. For the services and facilities to be furnished hereunder, the Adviser
shall receive a ((monthly)) management fee [payable monthly as soon as
practicable after the last day of each month, at] ((equivalent to)) an
annual rate of [.42%] ((.20%)) 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]
((in)) the case of initiation or termination of this Contract during any
month, the fee ((for that month)) shall be reduced proportionately [based
on] ((on the basis of)) the number of business days during which it is in
effect and the fee computed upon the average net assets for the business
days it is so in effect for that month.
4. ((It is understood that the Portfolio will pay all its expenses, which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in
connection with the purchase or sale of securities and other investment
instruments; (iii) fees and expenses of the Fund's Trustees other than
those who are "interested persons" of the Fund or the Adviser; (iv) legal
and audit expenses; (v) custodian, registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Fund and the Portfolio's shares for distribution under
state and federal securities laws; (vii) expenses of printing and mailing
reports and notices and proxy material to shareholders of the Portfolio;
(viii) all other expenses incidental to holding meetings of the Portfolio's
shareholders, including proxy solicitations therefor; (ix) a pro rata
share, based on relative net assets of the Portfolio and other registered
investment companies having Advisory and Service or Management Contracts
with the Adviser, of 50% of insurance premiums for Fidelity and other
coverage; (x) its proportionate share of association membership dues; (xi)
expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (xii) expenses of printing
and mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Portfolio is a party
and the legal obligation which the Portfolio may have to indemnify the
Fund's Trustees and officers with respect thereto.))
[4.] ((5)). The services of the Adviser to the Portfolio are not to be
deemed exclusive, the Adviser being free to render services to others and
engage in other activities, provided, however, that such other services and
activities do not, during the term of this Contract, interfere, in a
material manner, with the Adviser's ability to meet all of its obligations
with respect to rendering services to the Portfolio hereunder. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser,
the Adviser shall not be subject to liability to the Portfolio or to any
shareholder of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security ((or other
investment instrument.))
[5.] ((6)) (a) Subject to prior termination as provided in sub-paragraph
(d) of this paragraph [5] ((6)), this Contract shall continue in force
until [May 31, 1994] ((May 31, 1998)) and indefinitely thereafter, but only
so long as the continuance after such date shall be specifically approved
at least annually by vote of the Trustees of the Fund or by vote of a
majority of the outstanding voting securities of the Portfolio.
(b) This Contract may be modified by mutual consent, such consent on the
part of the Fund to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph [5} 6, the terms of any continuance or modification of this
Contract must have been approved by the vote of a majority of those
Trustees of the Fund who are not parties to the Contract or interested
persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval.
(d) Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Contract, without payment of any
penalty, by action of its Trustees or Board of Directors, as the case may
be, or with respect to the Portfolio by vote of a majority of the
outstanding voting securities of the Portfolio. This Contract shall
terminate automatically in the event of its assignment.
[6.] 7. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's 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 Portfolios of
the Fund. In addition, the Adviser shall not seek satisfaction of any such
obligations from the Trustees or any individual Trustee. The Adviser
understands that the rights and obligations of any Portfolio under the
Trust Instrument are separate and distinct from those of any and all other
Portfolios.
[7.] 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.
[SIGNATURE LINES OMITTED]
EXHIBIT 2
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the Agreement) is made as of
the 19th day of December 1996, by and between Treasury Only Portfolio (the
Fund), a separate series of Daily Money Fund (DMF), and Fidelity
Institutional Cash Portfolios (the Trust), each a business trust duly
formed under the laws of the State of Delaware.
This Agreement is intended to be, and is adopted as, a plan of
reorganization within the meaning of Section 368(a)(1)(F) of the Internal
Revenue Code of 1986, as amended (the Code). The reorganization will
comprise: (a) the transfer of all of the assets of the Fund to a series of
the Trust (the Series) solely in exchange for shares of beneficial interest
of the applicable classes of the Series (the Trust Series Shares) and the
assumption by the Series of the Fund's liabilities; and (b) the
constructive distribution of such Trust Series Shares of the applicable
classes of the Fund to its shareholders (Fund Shareholder) in complete
liquidation and termination of the Fund in exchange for all of the Fund's
outstanding shares of the corresponding classes (Fund Shares). The Fund
shall receive shares of the applicable classes of the Series equal to the
number and class of Fund Shares on the Closing Date (as defined below).
Immediately thereafter, the Fund shall then distribute to each Fund
Shareholder one Trust Series Share for each Fund Share held by the
shareholder on the Closing Date. The foregoing transactions are referred to
herein as the "Reorganization."
In consideration of the mutual promises and subject to the terms and
conditions herein, the parties covenant and agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE FUND
DMF on behalf of the Fund represents and warrants as follows:
(a) The Fund is a series of DMF, a business trust duly formed, validly
existing, and in good standing under the laws of the State of Delaware and
has the power to own all of its properties and assets and to carry out its
obligations under this Agreement. It has all necessary federal, state, and
local authorizations to carry out its business as now being conducted and
to carry out this Agreement;
(b) The Fund is duly registered as an open-end management investment
company under the Investment Company Act of 1940 (the 1940 Act), as
amended, or is a series of a registrant and such registration is in full
force and effect;
(c) The Fund is not in, and the execution, delivery and performance of
this Agreement will not result in, violation of any provision of the Trust
Instrument or the Fund's Bylaws, or, to the Fund's knowledge, of any
agreement, indenture, instrument, contract, lease or other undertaking to
which the Fund is a party or by which the Fund is bound or result in the
acceleration of any obligation or the imposition of any penalty under any
agreement, judgment or decree to which the Fund is a party or is bound;
(d) The Fund has no material contracts or other commitments (other than
this Agreement) that will not be terminated without liability to the Fund
on or prior to the Closing Date;
(e) To the Fund's knowledge, no material legal, administrative, or other
proceeding or investigation of, or before, any court or governmental body
presently is pending or threatened against the Fund or any of its
properties or assets which assert liability on the part of the Fund, except
as previously disclosed in writing to the Trust. The Fund knows of no facts
that might form the basis for the institution of such proceedings;
(f) The Fund has filed or will file all federal and state tax returns
which, to the knowledge of the Fund's officers, are required to be filed by
the Fund and has paid or will pay all federal and state taxes shown to be
due on said returns or provision shall have been made for the payment
thereof, and, to the best of the Fund's knowledge, no such return is
currently under audit and no assessment has been asserted with respect to
such returns;
(g) All of the issued and outstanding shares of the Fund are, and at the
Closing Date will be, duly and validly issued and outstanding and fully
paid and nonassessable as a matter of Delaware law (except as disclosed in
the Fund's Statement of Additional Information), and have been offered for
sale in conformity with all applicable federal securities laws. All of the
issued and outstanding shares of the Fund will, at the Closing Date, be
held by the persons and in the amounts as certified in accordance with the
provisions of this Agreement;
(h) The information to be furnished by the Fund for use in applications
for orders, registration statements, proxy materials and other documents
which may be necessary in connection with the transactions contemplated
hereby shall be accurate and complete and shall comply in all material
respects with federal securities and other laws and regulations thereunder
applicable thereto;
(i) At both the Valuation Time (as defined in Section 4) and the Closing
Date (as defined in Section 6), the Fund will have the full right, power,
and authority to sell, assign, transfer, and deliver its portfolio
securities and any other assets of the Fund to be transferred to the Series
pursuant to this Agreement. At the Closing Date, subject only to the
delivery of the Fund's portfolio securities and any such other assets as
contemplated by this Agreement, the Series will acquire the Fund's
portfolio securities and any such other assets subject to no encumbrances,
liens, or security interests (except for those that may arise in the
ordinary course and are disclosed to the Series) and without any
restrictions upon the transfer thereof;
(j) The execution, delivery, and performance of this Agreement will have
been duly authorized prior to the Closing Date by all necessary corporate
action on the part of the Fund, and this Agreement constitutes a valid and
binding obligation of the Fund enforceable in accordance with its terms,
subject to shareholder approval;
(k) To the best of the knowledge of the Fund's management, there is no
plan or intention by the Fund's shareholders to sell, exchange or otherwise
dispose of any of the Trust Series Shares to be received in the
Reorganization;
(l) The Fund shares are widely held and may be purchased and redeemed upon
request;
(m) No consideration other than Trust Series Shares will be issued in
exchange for the Fund Shares in the Reorganization;
(n) Immediately following consummation of the Reorganization, the Fund
Shareholders will own all of the Trust Series Shares and will own such
shares solely by reason of their ownership of the Fund Shares immediately
prior to the Reorganization;
(o) Immediately following the consummation of the Reorganization, the
Trust will hold on behalf of the Series the same assets and be subject to
the same liabilities that the Fund held or was subject to immediately prior
thereto, except for assets used to pay expenses incurred in connection with
the Reorganization. Assets used to pay expenses and all distributions
(except for distributions and redemptions arising in the ordinary course of
the Fund's business as an open-end investment company) made by the Fund
immediately preceding the Reorganization will, in the aggregate, constitute
less than [Confirm with Treasurers: 1%] of the net assets of the Fund;
(p) At the time of the Reorganization, the Fund will not have outstanding
any warrants, options, convertible securities, or any other type of right
pursuant to which any person could acquire stock in the Fund;
(q) There is no intercompany indebtedness between the Series and the Fund
that was issued, acquired or that will be settled at a discount;
(r) The Fund's liabilities to be assumed by the Series in the
Reorganization were incurred by the Fund in the ordinary course of its
business and are associated with the assets to be transferred;
(s) The Fund's shareholders each will pay their own expenses, if any,
incurred in connection with the Reorganization;
(t) The fair market value of the Fund's assets to be transferred by the
Fund to the Series will equal or exceed the Fund's liabilities to be
assumed by the Series plus the liabilities to which the transferred assets
are subject;
(u) The Fund is a regulated investment company as defined in Section 851
of the Internal Revenue Code of 1986, as amended;
(v) At the time of the Reorganization, the Fund is not under the
jurisdiction of a court in a proceeding under Title 11 of the United States
Code or similar case within the meaning of Section 368(a)(3)(A) of the
Code;
(w) To the Fund's knowledge, no consent, approval, authorization, or order
of any court or governmental authority is required for the consummation by
the Fund of the transactions contemplated by this Agreement, except such as
have been obtained under the Securities Act of 1933 (the 1933 Act), the
Securities Exchange Act of 1934 (the 1934 Act), and the 1940 Act;
(x) The Fund has no known liabilities of a material nature, contingent or
otherwise, other than those shown as belonging to it on its statement of
assets and liabilities as of March 31, 1996 and those incurred in the
ordinary course of the Fund's business as an investment company since March
31, 1996; and
(y) The Fund will be liquidated immediately after the Reorganization.
2. REPRESENTATIONS AND WARRANTIES OF THE TRUST
The Trust represents and warrants as follows:
(a) The Trust is a business trust duly formed, validly existing, and in
good standing under the laws of the State of Delaware. It has all necessary
federal, state, and local authorizations to carry out its business as now
being conducted and to carry out this Agreement;
(b) The Trust is duly registered as an open-end management investment
company under the 1940 Act, and the Series is a duly established and
designated series of the Trust;
(c) The Trust is not in, and the execution, delivery and performance of
this Agreement will not result in, violation of any provision of the
Amended and Restated Trust Instrument or the Trust's Bylaws, or, to the
Trust's knowledge, of any agreement, indenture, instrument, contract, lease
or other undertaking to which the Trust is a party or by which the Trust is
bound or result in the acceleration of any obligation or the imposition of
any penalty under any agreement, judgment or decree to which the Trust is a
party or is bound;
(d) To the Trust's knowledge, no material legal, administrative, or other
proceeding or investigation of, or before, any court or governmental body
presently is pending or threatened against the Trust or any of its
properties or assets which assert liability on the part of the Trust,
except as previously disclosed in writing to the Trust. The Trust knows of
no facts that might form the basis for the institution of such proceedings;
(e) The Trust intends for the Series to be a regulated investment company,
under Section 851 of the Code;
(f) Prior to the Closing Date, there shall be no issued and outstanding
Trust Series Shares or any other securities issued by the Series (except
for the one share of each class that may be issued to FMR); Trust Series
Shares issued in connection with the transactions contemplated herein will
be, duly and validly issued and outstanding, fully paid and non-assessable
under Delaware law on the Closing Date;
(g) The execution, delivery, and performance of this Agreement will have
been duly authorized prior to the Closing Date by all necessary corporate
action on the part of the Trust, and, upon its proper execution, this
Agreement will constitute a valid and binding obligation of the Trust
enforceable against the Series in accordance with its terms;
(h) The Trust Series Shares at the Closing will have been duly authorized
and, when so issued and delivered, will be duly and validly issued shares
of the Series, fully paid and non-assessable under Delaware law;
(i) The fair market value of the Trust Series Shares to be received by the
Fund Shareholders will be equal to the fair market value of their Fund
Shares constructively surrendered in exchange therefor;
(j) The Trust has no plan or intention on behalf of the Series to issue
additional Trust Series Shares following the Reorganization except for
issuance of shares arising in the ordinary course of the business of the
Series as the series of an open-end investment company;
(k) The Trust has no plan or intention to reacquire the Trust Series
Shares issued to the Fund Shareholders pursuant to the Reorganization other
than through redemptions arising in the ordinary course of the business of
the Series as a series of an open-end investment company;
(l) Following the Reorganization, the Trust, on behalf of the Series, will
continue the Fund's historic business;
(m) The Trust has no plan or intention to sell or otherwise dispose of any
of the Fund's assets to be acquired by the Series in the Reorganization,
except for dispositions made in the ordinary course of its business and
dispositions necessary to maintain the status of the Series as a regulated
investment company under Section 851 of the Code;
(n) The information to be furnished by the Trust with respect to the
Series for use in applications for orders, registration statements, proxy
materials and other documents which may be necessary in connection with the
transactions contemplated hereby shall be accurate and complete and shall
comply in all material respects with federal securities and other laws and
regulations applicable thereto;
(o) The Trust, on behalf of the Series, shall use all reasonable efforts
to obtain the approvals and authorizations required by the 1933 Act and the
1940 Act as it may deem appropriate in order to operate after the Closing
Date; and
(p) To the Trust's knowledge, no consent, approval, authorization, or
order of any court or governmental authority is required for the
consummation by the Series of the transactions contemplated by this
Agreement, except such as have been obtained under the 1933 Act, the 1934
Act, and the 1940 Act.
3. REORGANIZATION
(a) Subject to the requisite approval of the shareholders of the Fund and
to the other terms and conditions contained herein, the Fund agrees to
assign, convey, transfer, and deliver to the Series established by the
Trust solely for the purpose of acquiring all of the assets of the Fund,
which Series has not issued any Trust Series Shares (except for one share
of each class that may be issued to FMR) or commenced operations, on the
Closing Date all of the assets of the Fund of any kind and nature existing
on the Closing Date. The Series agrees in exchange therefor (1) to assume
all of the Fund's liabilities existing on or after the Closing Date,
whether or not determinable on the Closing Date, and (2) to issue and
deliver to the Fund the number of full and fractional Trust Series Shares
of the applicable classes equal to the value and number of full and
fractional shares of the corresponding classes of the Fund outstanding at
the time of the closing, as described in paragraph 6, on the Closing Date
provided for in Section 6(a).
(b) The assets of the Fund to be acquired by the Series and allocated
thereto shall include, without limitation, all cash, cash equivalents,
securities, receivables (including interest or dividends receivables),
claims, choses in action, and other property owned by the Fund, and any
deferred or prepaid expenses shown as an asset on the books of the Fund on
the Closing Date. The Fund will pay or cause to be paid to the Series any
dividend or interest payments received by it on or after the Closing Date
with respect to the assets transferred to the Series hereunder, and the
Series will retain any dividend or interest payments received by it after
the Valuation Time (as defined in Section 4) with respect to the assets
transferred hereunder without regard to the payment date thereof.
(c) Immediately upon delivery to the Fund of the Trust Series Shares, the
individual Trustees of DMF or any officer duly authorized by them, on DMF's
behalf as the then sole shareholder of the Series, shall (1) elect as
trustees of the Trust (Trustees) the persons who are currently Trustees of
DMF; and (2) approve (i) a Management Contract between the Trust on behalf
of the Series and FMR, and (ii) a Sub-Advisory Agreement between FMR and
FMR Texas Inc., substantially identical to the contracts currently in
effect with the Fund, except as to the parties to such contracts (and
except as the Management Contract may be modified pursuant to a vote of the
shareholders of the Fund pursuant to the proxy statement); and, the
individual Trustees of DMF or any officer duly authorized by them, on DMF's
behalf as the then sole shareholder of each class of the Series, shall
approve a Distribution and Service Plan under Rule 12b-1 under the 1940 Act
between the Trust on behalf of each class of the Series and Fidelity
Distributors Corporation (FDC) substantially identical to the plan
currently in effect with respect to each such class of the Fund, except as
to the parties to such plans (and except as indicated in the plans attached
as Exhibits 3, 4, and 5 to the proxy statement).
(d) Pursuant to this Agreement, as soon after the Closing Date as is
conveniently practicable (the Liquidation Date), the Fund will
constructively distribute the Trust Series Shares of the applicable classes
pro rata in proportion to their respective shares of beneficial interest of
the corresponding classes of the Fund to Fund Shareholders of record
determined as of the Valuation Time on the Closing Date in accordance with
the Fund's Trust Instrument, in liquidation of such Fund. Such distribution
will be accomplished by the Fund's transfer agent opening accounts on the
share records of the Series in the names of such Fund Shareholders and
transferring the Trust Series Shares of the applicable classes thereto.
Each Fund Shareholder's account shall be credited with the respective pro
rata number of full and fractional (rounded to the third decimal place)
Trust Series Shares of the applicable classes due that shareholder. All
outstanding Fund Shares, including any represented by certificates, shall
simultaneously be canceled on the Fund's share transfer records. The Series
shall not issue certificates representing Trust Series Shares in connection
with such distribution.
(e) Immediately after the distribution of the Trust Series Shares as set
forth in Section 3(d), the Fund shall be liquidated and terminated and any
such further actions shall be taken in connection therewith as required by
applicable law.
(f) Any transfer taxes payable upon issuance of Trust Series Shares in a
name other than that of the registered holder on the Fund's books of the
Fund Shares constructively exchanged for the Trust Series Shares shall be
paid by the person to whom such Trust Series Shares are to be issued, as a
condition of such transfer.
(g) Any reporting responsibility of the Fund is and shall remain the
responsibility of the Fund up to and including the date on which it is
liquidated.
4. VALUATION
(a) The valuation time shall be 4:00 p.m. Eastern time on the Closing Date
(the Valuation Time).
(b) The value of the Fund's net assets to be acquired by the Series
hereunder shall be the net asset value computed as of the Valuation Time,
using the valuation procedures set forth in the Fund's then current
Prospectus and Statement of Additional Information.
(c) The number, value, class, and denomination of full and fractional
Trust Series Shares to be issued in exchange for the Fund's net assets
shall be equal to the number, value, class, and denomination of full and
fractional Fund Shares outstanding on the Closing Date.
(d) All computations pursuant to this Section shall be made by FSC, an
affiliate of FMR Corp., in accordance with its regular practice as pricing
agent for the Fund.
5. FEES; EXPENSES
(a) The Trust and the Fund each represent that there is no person who
dealt with it who by reason of such dealings is entitled to any broker's or
finder's fees or commissions arising out of the transactions contemplated
hereby.
(b) Pursuant to the Fund's management contract with FMR, FMR will pay all
fees and expenses, including legal, accounting, printing, filing, and proxy
solicitation expenses, portfolio transfer taxes (if any), or other similar
expenses incurred in connection with the transactions contemplated by this
Agreement (but not including costs incurred in connection with the purchase
or sale of portfolio securities).
6. CLOSING DATE
(a) The transfer of the Fund's assets in exchange for the assumption by
the Series of the Fund's liabilities and the issuance of Trust Series
Shares, as described above, together with related acts necessary to
consummate the same, (the Closing), unless otherwise provided herein, shall
occur at the principal office of DMF and the Trust, 82 Devonshire Street,
Boston, Massachusetts, on ____, 1997, or at such other place or later date
as the parties may agree in writing (the Closing Date). All acts taking
place at the Closing shall be deemed to take place simultaneously as of the
Valuation Time or at such other time and/or place as the parties may agree.
(b) In the event that, on the Closing Date: (i) any of the markets for
securities held by the Fund are closed to trading, or (ii) trading thereon
is restricted, or (iii) trading or reporting of trading on said markets or
elsewhere is disrupted, all so that accurate appraisal of the total net
asset value of the Fund is impracticable, the Closing Date shall be
postponed until the first business day after the day when such trading
shall have been fully resumed and reporting shall have been restored, or
such other date as the parties may agree.
(c) The Fund shall deliver at the Closing a certificate of an authorized
officer stating that it has notified The Bank of New York, as custodian for
the Fund, of the Fund's reorganization to a series of the Trust.
(d) Fidelity Investments Institutional Operations Company, Inc., as
transfer agent for the Fund, shall deliver at the Closing a certificate as
to the conversion on its books and records of each Fund Shareholder account
to an account as a holder of Trust Series Shares. The Trust shall issue and
deliver a confirmation to the Fund evidencing the Trust Series Shares to be
credited on the Closing Date or provide evidence satisfactory to the Fund
that such Trust Series Shares have been credited to the Fund's account on
the books of the Trust. At the Closing, each party shall deliver to the
other such bills of sale, checks, assignments, stock certificates, receipts
or other documents as such other party or its counsel may reasonably
request.
7. SHAREHOLDER MEETING AND TERMINATION OF THE FUND
(a) The Fund agrees to call a meeting of its shareholders (the
Shareholders' Meeting) to consider and act upon this Agreement and to take
all other action necessary to obtain approval of the transactions
contemplated hereby.
(b) The Fund agrees that as soon as reasonably practicable after
distribution of the Trust Series Shares, the Fund shall be liquidated and
terminated as a series of DMF pursuant to its Trust Instrument, any further
actions shall be taken in connection therewith as required by applicable
law, and on and after the Closing Date the Fund shall not conduct any
business except in connection with its liquidation and termination.
8. CONDITIONS TO OBLIGATIONS OF THE TRUST
The obligations of the Trust hereunder shall be subject to the following
conditions:
(a) That the Fund furnishes to the Trust a statement, dated as of the
Closing Date, signed by an officer of DMF, certifying that as of the
Valuation Time and the Closing Date all representations and warranties of
the Fund made in this Agreement are true and correct in all material
respects and that the Fund has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied at or
prior to such dates;
(b) That the Fund furnishes the Trust with copies of the resolutions,
certified by an officer of DMF, evidencing the adoption of this Agreement
and the approval of the transactions contemplated herein by the requisite
vote of the holders of the outstanding shares of beneficial interest of the
Fund;
(c) That the Fund shall deliver to the Trust at the Closing a statement of
its assets and liabilities, together with a certificate as to the aggregate
asset value of the Fund's portfolio securities, all as of the Valuation
Time, certified on the Fund's behalf by its Treasurer or Assistant
Treasurer;
(d) That the Fund's custodian shall deliver to the Trust a certificate
identifying the assets of the Fund held by such custodian as of the
Valuation Time on the Closing Date and stating that at the Valuation Time:
(i) the assets held by the custodian will be transferred to the Series;
(ii) the Fund's assets have been duly endorsed in proper form for transfer
in such condition as to constitute good delivery thereof; and (iii) to the
best of the custodian's knowledge, all necessary taxes in conjunction with
the delivery of the assets, including all applicable federal and state
stock transfer stamps, if any, have been paid or provision for payment has
been made;
(f) That the Fund's transfer agent shall deliver to the Trust at the
Closing a certificate setting forth the number and class of shares of the
Fund outstanding as of the Valuation Time and the name and address of each
holder of record of any such shares and the number and class of shares held
of record by each such shareholder;
(g) That the Fund calls a Shareholder's Meeting to consider and act upon
this Agreement and to take all other action necessary to obtain approval of
the transactions contemplated hereby;
(h) That the Fund delivers to the Trust a certificate of an officer of
DMF, dated the Closing Date, that there has been no material adverse change
in the Fund's financial position since March 31, 1997, other than changes
in the market value of its portfolio securities, or changes due to net
redemptions of its shares, dividends paid, or losses from operations; and
(i) That all of the issued and outstanding shares of beneficial interest
of the Fund shall have been offered for sale and sold in conformity with
all applicable state securities laws and, to the extent that any audit of
the records of the Fund or its transfer agent by the Trust or its agents
shall have revealed otherwise, the Fund shall have taken all actions that
in the opinion of the Trust are necessary to remedy any prior failure on
the part of the Fund to have offered for sale and sold such shares in
conformity with such laws.
9. CONDITIONS TO OBLIGATIONS OF THE FUND
The obligations of the Fund hereunder shall be subject to the following
conditions:
(a) That the Trust shall have executed and delivered to the Fund an
Assumption of Liabilities, certified by an officer of the Trust, dated as
of the Closing Date pursuant to which Trust on behalf of the Series will
assume all of the liabilities of the Fund existing at the Valuation Time in
connection with the transactions contemplated by this Agreement;
(b) That the Trust furnishes to the Fund a statement, dated as of the
Closing Date, signed by an officer of Trust, certifying that as of the
Valuation Time and the Closing Date all representations and warranties of
the Series made in this Agreement are true and correct in all material
respects, and the Trust has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied at or prior to
such dates; and
(c) That the Fund shall have received an opinion of Kirkpatrick & Lockhart
LLP, counsel to the Fund and the Trust, to the effect that the Trust Series
Shares are duly authorized and upon delivery to the Fund as provided in
this Agreement will be validly issued and will be fully paid and
nonassessable under Delaware law.
10. CONDITIONS TO OBLIGATIONS OF THE FUND AND THE TRUST
The obligations of the Fund and the Trust hereunder shall be subject to
the following conditions:
(a) That this Agreement shall have been adopted and the transactions
contemplated herein shall have been approved by the requisite vote of the
holders of the outstanding shares of beneficial interest of the Fund;
(b) That all consents of other parties and all other consents, orders, and
permits of federal, state, and local regulatory authorities (including
those of the Commission and of state blue sky and securities authorities,
including "no action" positions of such federal or state authorities)
deemed necessary by the Trust or the Fund to permit consummation, in all
material respects, of the transactions contemplated hereby shall have been
obtained, except where failure to obtain any such consent, order, or permit
would not involve a risk of a material adverse effect on the assets or
properties of the Trust or the Fund, provided that either party hereto may
for itself waive any of such conditions;
(c) That all proceedings taken by either the Fund or the Series in
connection with the transactions contemplated by this Agreement and all
documents incidental thereto shall be satisfactory in form and substance to
it and its counsel, Kirkpatrick & Lockhart LLP;
(d) That the Trust shall have taken all necessary action so that the
Series shall be a series of a registered open-end investment company under
the 1940 Act immediately after the closing.
(e) That there shall not be any material litigation pending with respect
to the matters contemplated by this Agreement;
(f) That the Trust and the Fund shall have received an opinion of
Kirkpatrick & Lockhart LLP satisfactory to the Trust and the Fund that for
federal income tax purposes:
(i) The Reorganization will be a reorganization under Section
368(a)(1)(F) of the Code, and the Fund and the Series will each be parties
to the Reorganization under section 368(b) of the Code;
(ii) No gain or loss will be recognized by the Fund upon the transfer of
all of its assets to the Series in exchange solely for the Trust Series
Shares of the applicable classes and the assumption of the Fund's
liabilities followed by the distribution of the Trust Series Shares to the
shareholders of the corresponding classes of the Fund in liquidation of the
Fund;
(iii) No gain or loss will be recognized by the Series on the receipt of
the Fund's assets in exchange solely for the Trust Series Shares and the
assumption of the Fund's liabilities;
(iv) The basis of the Fund's assets in the hands of the Series will be
the same as the basis of such assets in the Fund's hands immediately prior
to the Reorganization;
(v) The Series' holding period in the assets to be received from the Fund
will include the Fund's holding period in such assets;
(vi) A Fund Shareholder will recognize no gain or loss on the exchange of
his or her shares of beneficial interest in the Fund for the Trust Series
Shares in the Reorganization;
(vii) A Fund Shareholder's basis in the Trust Series Shares to be
received by him or her will be the same as his or her basis in the Fund
Shares exchanged therefor;
(viii) A Fund Shareholder's holding period for his or her Trust Series
Shares will include the holding period of the Fund Shares exchanged,
provided that those Fund Shares were held as capital assets on the date of
the Reorganization.
Notwithstanding anything herein to the contrary, neither the Fund nor the
Trust may waive the conditions set forth in this subsection 10(f).
11. COVENANTS OF THE FUND AND THE TRUST
(a) The Fund covenants to operate its business in the ordinary course
between the date hereof and the Closing Date, it being understood that such
ordinary course of business will include the payment of customary dividends
and distributions.
(b) The Fund covenants that the Trust Series Shares are not being acquired
for the purpose of making any distribution thereof, other than in
accordance with the terms of this Agreement.
(c) The Fund covenants that it will assist the Trust in obtaining such
information as the Trust reasonably requests concerning the beneficial
ownership of Fund Shares.
(d) The Fund covenants that its liquidation and termination will be
effected in the manner provided in its Trust Instrument in accordance with
applicable law and, after the Closing Date, the Fund will not conduct any
business except in connection with its liquidation and termination.
12. TERMINATION; WAIVER
(a) The Trust and the Fund may terminate this Agreement by mutual
agreement. In addition, either the Trust or the Fund may at its option
terminate this Agreement at or prior to the Closing Date because:
(i) Of a material breach by the other of any representation, warranty, or
agreement contained herein to be performed at or prior to the Closing Date;
or
(ii) A condition herein expressed to be precedent to the obligations of
the terminating party has not been met and it reasonably appears that it
will not or cannot be met.
(b) In the event of any such termination, there shall be no liability for
damages on the part of the Trust or the Fund, or their respective Trustees
or officers.
13. SOLE AGREEMENT; AMENDMENTS; WAIVERS; SURVIVAL OF WARRANTIES
(a). This Agreement supersedes all previous correspondence and oral
communications between the parties regarding the subject matter hereof,
constitutes the only understanding with respect to such subject matter, may
not be changed except by a letter of agreement signed by each party hereto
and shall be construed in accordance with and governed by the laws of the
[Commonwealth of Massachusetts/State of Delaware].
(b) This Agreement may be amended, modified, or supplemented in such
manner as may be mutually agreed upon in writing by the respective
President, any Vice President, or Treasurer of the Series or the Fund;
provided, however, that following the shareholders' meeting called by the
Fund pursuant to Section 7 of this Agreement, no such amendment may have
the effect of changing the provisions for determining the number of the
Series Shares to be received by the Fund shareholders under this Agreement
to the detriment of such shareholders without their further approval.
(c) Either Fund may waive any condition to its obligations hereunder,
provided that such waiver does not have any material adverse effect on the
interests of such Fund's shareholders.
The representations, warranties, and covenants contained in the Agreement,
or in any document delivered pursuant hereto or in connection herewith,
shall survive the consummation of the transactions contemplated hereunder.
14. TRUST INSTRUMENTS
Copies of the Amended and Restated Trust Instrument of the Trust and the
Trust Instrument of DMF are on file with the Secretary of State of the
State of Delaware, and notice is hereby given that this instrument is
executed on behalf of the Trustees of the Trust and DMF as trustees and not
individually and that the obligations of the Fund and the Series under this
instrument are not binding upon any of such Fund's or Trust's Trustees,
officers, or shareholders individually but are binding only upon the assets
and property of such Fund or Series. The Fund and the Trust each agrees
that its obligations hereunder apply only to such Fund and the Series,
respectively, and not to its shareholders individually or to the Trustees
of such Fund or Series.
15. ASSIGNMENT.
This Agreement shall bind and inure to the benefit of the parties hereto
and their respective successors and assigns, but no assignment or transfer
of any rights or obligations hereunder shall be made by any party without
the written consent of the other party. Nothing herein expressed or implied
is intended or shall be construed to confer upon or give any person, firm,
or corporation other than the parties hereto and their respective
successors and assigns any rights or remedies under or by reason of this
Agreement.
This Agreement may be executed in any number of counterparts, each of
which, when executed and delivered, shall be deemed to be an original.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed by its duly authorized officer.
Daily Money Fund:
Treasury Only Portfolio
[signature lines omitted]
Fidelity Institutional Cash Portfolios:
Treasury Only Portfolio
[signature lines omitted]
FMR hereby agrees, pursuant to its Management
Contract with DMF in respect of the Fund
and with the Trust in respect of the Series,
to assume the expenses provided for in
accordance with paragraph 5(b) of this Agreement.
FIDELITY MANAGEMENT & RESEARCH COMPANY
[signature lines omitted]
EXHIBIT 3
The language added to the current plan is in ((double parentheses)); the
language deleted from the current plan is set forth in [brackets].
FORM OF
DISTRIBUTION AND SERVICE PLAN
DAILY MONEY FUND:
[FIDELITY U.S] TREASURY [INCOME] ((ONLY)) PORTFOLIO
CLASS I SHARES
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, ((as amended)) (the "Act")
((for Class I shares )) of [Fidelity U.S.] Treasury [Income] Only Portfolio
((("Class I"), a class of shares of Treasury Only 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] ((on behalf of)) 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.] ((It is recognized that Fidelity Management &
Research Company (the "Adviser") may use its management fee revenues as
well as past profits or its resources from any other source, to make
payment to the Distributor with respect to any expenses incurred in
connection with the distribution of Class I shares, including the
activities referred to above.))
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 ((Class I)) 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] ((Class I)) 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 ((Class I)) shares [of the Portfolio] within the
[context] ((meaning)) 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)
((of Class I)), 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 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] 199_, 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] ((Class I)) to
finance any activity primarily intended to result in the sale of ((Class
I)) shares [of the Portfolio], to increase materially the amount spent by
[the Portfolio] ((Class I)) 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 ((Class I, in the case of this Plan,
or upon approval by a vote of a majority of the outstanding voting
securities of)) the Portfolio, ((in the case of the Management Contract,))
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.
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] ((Class
I)).
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 ((Class I)) 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 ((Class I)) shares [of the Portfolio].
10. Consistent with the limitation of shareholder liability as set forth
in the Fund's Trust Instrument, any obligation assumed by [the Portfolio]
((Class I)) pursuant to this Plan and any agreements related to this Plan
shall be limited in all cases to [the Portfolio] ((Class I)) and its
assets, and shall not constitute an obligation of any [other series of
shares of the Fund] ((shareholder of the Fund or of any other class of the
Portfolio, series of the Fund or class of such series)).
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.
EXHIBIT 4
The language added to the current plan is in ((double parentheses)); the
language deleted from the current plan is set forth in [brackets].
FORM OF
DISTRIBUTION AND SERVICE PLAN
DAILY MONEY FUND:
((TREASURY ONLY PORTFOLIO))
CLASS II SHARES
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 the Class II shares ((of Treasury
Only Portfolio)) ("Class II"), ((a class of shares)) of Treasury Only
((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"), [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 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 sales
of Shares or who engage in shareholder support services; and
(6) providing training, marketing and support to such dealers and others
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 ((and
paragraph 2 hereof, all with respect to Class II shares)), Class II [of the
Fund] shall pay to the Distributor a fee at the annual rate of 0.15% of
[such Class'] ((the)) average daily net assets ((of Class II)) throughout
the month, or such lesser amount as may be established from time to time by
the Trustees of the Trust, as specified in paragraph 6 of this Plan;
provided that, for any period during which the total of such fee and all
other expenses of the Fund (or of Class II), would exceed the gross income
of the Fund (or of Class II), such fee shall be reduced by such excess.
Such fee shall be computed and paid monthly. 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 shares of Class II, but
shall exclude assets attributable to any other Class of the Fund. 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 ((Class II)) 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 thereof.
4. [Each Class of the] The Fund presently pays, and will continue to pay,
a management fee to ((Fidelity Management & 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] ((make payments to)) the
Distributor [for] ((with respect to any)) expenses incurred in connection
with the distribution of ((Class II)) Shares, including the activities
referred to in paragraphs 2 and 3 hereof. To the extent that the payment of
management fees by the [Class] ((Fund)) to the Adviser should be deemed to
be indirect financing of any activity primarily intended to result in the
sale of ((Class II)) 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" (as defined in the Act) of Class II, 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 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 May 31, [1996] ((199_)), 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 maximum fee provided for in paragraph 3 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 II, in the case of the Plan,
or upon approval by a vote of a 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 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] Class ((II)).
8. 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 shares of Class II (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] Class ((II Shares)).
10. Consistent with the limitation of shareholder liability as set forth
in the Trust's [Declaration of Trust](( Trust Instrument)), any obligation
assumed by Class II pursuant to this Plan or any agreement related to this
Plan shall be limited in all cases to Class II and its assets and shall not
constitute an obligation of any shareholder of the Trust or of any other
[series or Class of the Trust] ((class of the Fund, series of the Trust or
class of such series.))
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.
EXHIBIT 5
The language added to the current plan is in ((double parentheses)); the
language deleted from the current plan is set forth in [brackets].
FORM OF
DISTRIBUTION AND SERVICE PLAN
DAILY MONEY FUND:
TREASURY ONLY PORTFOLIO))
CLASS III SHARES
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 the Class III shares ((of Treasury
Only Portfolio)) ("Class III"), ((a class of shares)) of Treasury Only
((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"), [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 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 sales
of Shares or who engage in shareholder support services; and
(6) providing training, marketing and support to such dealers and others
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 ((and
paragraph 2 hereof, all with respect to Class III shares)), Class III [of
the Fund] shall pay to the Distributor a fee at the annual rate of 0.25% of
[such Class'] ((the)) average daily net assets ((of Class III)) throughout
the month, or such lesser amount as may be established from time to time by
the Trustees of the Trust, as specified in paragraph 6 of this Plan;
provided that, for any period during which the total of such fee and all
other expenses of the Fund (or of Class III), would exceed the gross income
of the Fund (or of Class III), such fee shall be reduced by such excess.
Such fee shall be computed and paid monthly. 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 shares of Class III, but
shall exclude assets attributable to any other Class of the Fund. 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 ((Class III)) 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 thereof.
4. [Each Class of the] The Fund presently pays, and will continue to pay,
a management fee to ((Fidelity Management & 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] ((make payments to)) the
Distributor [for] ((with respect to any)) expenses incurred in connection
with the distribution of ((Class III)) Shares, including the activities
referred to in paragraphs 2 and 3 hereof. To the extent that the payment of
management fees by the [Class] ((Fund)) to the Adviser should be deemed to
be indirect financing of any activity primarily intended to result in the
sale of ((Class III)) 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" (as defined in the Act) of Class III, 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 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 May 31, [1996] ((199__)), 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 maximum fee provided for in paragraph 3 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 III, in the case of the Plan,
or upon approval by a vote of a 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 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] Class ((III)).
8. 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 shares of Class III (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] Class ((III Shares)).
10. Consistent with the limitation of shareholder liability as set forth
in the Trust's [Declaration of Trust] ((Trust Instrument)), any obligation
assumed by Class III pursuant to this Plan or any agreement related to this
Plan shall be limited in all cases to Class III and its assets and shall
not constitute an obligation of any shareholder of the Trust or of any
other [series or Class of the Trust] ((class of the Fund, series of the
Trust or class of such series.))
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.
Vote this proxy card TODAY! Your prompt response will
save Treasury Only the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------------
- --------------------
DAILY MONEY FUND: TREASURY ONLY
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring, and Gerald C. McDonough, or any one or more
of them, attorneys, with full power of substitution, to vote all shares of
Daily Money Fund: Treasury Only which the undersigned is entitled to vote
at the Special Meeting of Shareholders of the fund to be held at the office
of the trust at 82 Devonshire St., Boston, MA 02109, on May 9, 1997 at
9:45a.m. and at any adjournments thereof. All powers may be exercised by a
majority of said proxy holders or substitutes voting or acting or, if only
one votes and acts, then by that one. This Proxy shall be voted on the
proposals described in the Proxy Statement as specified on the reverse
side. Receipt of the Notice of the Meeting and the accompanying Proxy
Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1997
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
233809300/680
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
1. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
fund.
2. To approve an Agreement and Plan providing for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
reorganization of the fund from a separate series of one
Delaware business trust to another.
</TABLE>
FIMMIT-PXC-397 233809300/680
Vote this proxy card TODAY! Your prompt response will
save Treasury Only the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- -------------------------------------------------------------------------
DAILY MONEY FUND: TREASURY ONLY
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring, and Gerald C. McDonough, or any one or more
of them, attorneys, with full power of substitution, to vote all shares of
Daily Money Fund: Treasury Only which the undersigned is entitled to vote
at the Special Meeting of Shareholders of the fund to be held at the office
of the trust at 82 Devonshire St., Boston, MA 02109, on May 9, 1997 at
9:45a.m. and at any adjournments thereof. All powers may be exercised by a
majority of said proxy holders or substitutes voting or acting or, if only
one votes and acts, then by that one. This Proxy shall be voted on the
proposals described in the Proxy Statement as specified on the reverse
side. Receipt of the Notice of the Meeting and the accompanying Proxy
Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1997
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
233809805/542
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- --------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
1. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
fund.
2. To approve an Agreement and Plan providing for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
reorganization of the fund from a separate series of one
Delaware business trust to another.
</TABLE>
FIMMIIT-PXC-397 233809805/542
Vote this proxy card TODAY! Your prompt response will
save Treasury Only the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- -------------------------------------------------------------------------
DAILY MONEY FUND: TREASURY ONLY
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring, and Gerald C. McDonough, or any one or more
of them, attorneys, with full power of substitution, to vote all shares of
Daily Money Fund: Treasury Only which the undersigned is entitled to vote
at the Special Meeting of Shareholders of the fund to be held at the office
of the trust at 82 Devonshire St., Boston, MA 02109, on May 9, 1997 at
9:45a.m. and at any adjournments thereof. All powers may be exercised by a
majority of said proxy holders or substitutes voting or acting or, if only
one votes and acts, then by that one. This Proxy shall be voted on the
proposals described in the Proxy Statement as specified on the reverse
side. Receipt of the Notice of the Meeting and the accompanying Proxy
Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1997
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
233809888/543
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
1. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
fund.
2. To approve an Agreement and Plan providing for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
reorganization of the fund from a separate series of one
Delaware business trust to another.
</TABLE>
FIMMIIIT-PXC-397 233809888/543
EXHIBIT 6
[TABLE WILL BE UPDATED IN A SUBSEQUENT FILING]
FUNDS ADVISED BY FMR - TABLE OF AVERAGE NET ASSETS AND EXPENSE RATIOS (A)
<TABLE>
<CAPTION>
INVESTMENT FISCAL AVERAGE RATIO OF NET RATIO OF
OBJECTIVE AND FUND YEAR END (A) NET ASSETS ADVISORY FEES EXPENSES TO
(MILLIONS)(B) TO AVERAGE AVERAGE NET
NET ASSETS ASSETS (C)
PAID
TO FMR (C)
<S> <C> <C> <C> <C> <C> <C>
TAXABLE MONEY MARKET
((yen))
Cash Reserves 11/30/94 $ 12,398.9 0.19% 0.52%
State and Local Asset
Management Series:
Government Money 11/30/94 396.6 0.43 0.43
Market
U.S. Government 11/30/94# 1,103.0 0.20(dagger) 0.36(dagger)*
Reserves
Variable Insurance
Products:
Money Market 12/31/94 599.0 0.20 0.27
Select Money Market 2/28/95 680.4 0.20 0.65
Daily Money Fund:
U.S. Treasury Income 3/31/95# 1,174.2 0.20(dagger)* 0.20(dagger)*
Institutional Cash:
Domestic Money
Market:
Class I 3/31/95 945.4 0.13* 0.18*
Class III 3/31/95** 23.3 0.13(dagger)* 0.50(dagger)*
Money Market :
Class I 3/31/95 4,964.0 0.14* 0.18*
Class III 3/31/95 254.0 0.14* 0.50*
U.S. Government:
Class I 3/31/95 3,321.2 0.16* 0.18*
Class III 3/31/95** 18.7 0.16(dagger)* 0.43(dagger)*
U.S. Treasury 3/31/95 1,323.0 0.14* 0.18*
U.S. Treasury II:
Class I 3/31/95 4,209.2 0.13* 0.18*
Class III 3/31/95 130.9 0.13* 0.50*
Spartan Money Market 4/30/95 7,334.4 0.44* 0.44*
Spartan U.S. 4/30/95 745.9 0.45 0.45
Government Money
Market
Spartan U.S. Treasury 4/30/95# 1,625.6 0.45(dagger)* 0.45(dagger)*
Money Market
The North Carolina
Capital Management
Trust:
Cash Portfolio 6/30/95 1,453.7 0.38 0.39
Daily Money Fund:
Capital Reserves:
Money Market 7/31/95 763.5 0.33*% 0.99*%
U.S. Government 7/31/95 259.1 0.39* 0.99*
Money Market
Money Market 7/31/95 1,846.6 0.34* 0.65*
U.S. Treasury:
Initial Class 7/31/95 1,951.5 0.50* 0.65*
Class B 7/31/95 4.8 0.50* 1.35*
Daily Income Trust 8/31/95 2,209.6 0.33 0.54
Money Market Trust:
Domestic Money 8/31/95 322.5 0.42 0.42
Market
Retirement 8/31/95 2,001.3 0.42 0.42
Government
Money Market
Retirement Money 8/31/95 3,636.2 0.42 0.42
Market
U.S. Government 8/31/95 199.8 0.42 0.42
U.S. Treasury 8/31/95 147.7 0.42 0.42
Advisor Annuity Fund:
Money Market 12/31/95** 6.8 0.25* 1.00*
</TABLE>
(a) All fund data are as of the fiscal year end noted in the chart or as of
September 30,1995, if fiscal year end figures are not yet available.
(b) Average net assets are computed on the basis of average net assets of
each fund at the close of business on each business day throughout its
fiscal period.
(c) Reflects reductions for any expense reimbursement paid by or due from
FMR pursuant to voluntary or state expense limitations. Funds so affected
are indicated by an (*).
(dagger) Annualized
# Year end changed
** Less than a complete fiscal year
((yen)) Fidelity Management & Research Company has entered into a
sub-advisory agreement with FMR Texas Inc., with respect to each fund.
