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)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ]Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which
transaction applies:
(2) Aggregate number of securities to which
transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total Fee Paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a) (2)
and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of
its filing.
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(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
FIDELITY MUNICIPAL MONEY MARKET FUND
SPARTAN NEW JERSEY MUNICIPAL MONEY MARKET FUND
FUNDS OF
FIDELITY BEACON STREET TRUST
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-544-8888
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of the above funds:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
Meeting) of Fidelity Municipal Money Market Fund and Spartan New Jersey
Municipal Money Market Fund (the funds) will be held at the office of
Fidelity Beacon Street Trust (the trust), 82 Devonshire Street, Boston,
Massachusetts 02109 on November 19, 1997, at 9:00 a.m. The purpose of the
Meeting is to consider and act upon the following proposals, and to
transact such other business as may properly come before the Meeting or any
adjournments thereof.
1. To elect a Board of Trustees.
2. To ratify the selection of Price Waterhouse LLP as independent
accountants of the trust.
3. To amend the Trust Instrument to provide dollar-based voting rights for
shareholders of the trust.
4. To adopt a new fundamental policy for Spartan New Jersey Municipal
Money Market Fund permitting the fund to invest all of its assets in
another open-end investment company with substantially the same investment
objective and policies.
5. To approve an amended management contract for Fidelity Municipal Money
Market Fund.
6. To amend Spartan New Jersey Municipal Money Market Fund's fundamental
investment limitation concerning real estate.
7. To amend Fidelity Municipal Money Market Fund's fundamental investment
limitation concerning diversification to exclude securities of other
investment companies from the limitation.
8. To approve an agreement and plan providing for the reorganization of
Fidelity Municipal Money Market Fund from a separate series of one Delaware
business trust to another.
9. To approve an agreement and plan providing for the reorganization of
Spartan New Jersey Municipal Money Market Fund from a separate series of
one Delaware business trust to another.
ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS
10. To amend Spartan New Jersey Municipal Money Market Fund's fundamental
investment limitation concerning the issuance of senior securities.
11. To amend Spartan New Jersey Municipal Money Market Fund's fundamental
investment limitation concerning borrowing.
12. To amend Spartan New Jersey Municipal Money Market Fund's fundamental
investment limitation concerning the concentration of its investments in a
single industry.
The Board of Trustees has fixed the close of business on September 22,
1997 as the record date for the determination of the shareholders of each
of the funds entitled to notice of, and to vote at, such Meeting and any
adjournments thereof.
By order of the Board of Trustees,
ARTHUR S. LORING, Secretary
September 22, 1997
YOUR VOTE IS IMPORTANT -
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY SHAREHOLDER
WHO DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO INDICATE VOTING
INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND SIGN IT, AND RETURN IT IN
THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED
STATES. IN ORDER TO AVOID UNNECESSARY EXPENSE, WE ASK YOUR COOPERATION IN
MAILING YOUR PROXY CARD PROMPTLY, NO MATTER HOW LARGE OR SMALL YOUR
HOLDINGS MAY BE.
INSTRUCTIONS FOR EXECUTING PROXY CARD
The following general rules for executing proxy cards may be of assistance
to you and help avoid the time and expense involved in validating your vote
if you fail to execute your proxy card properly.
1. INDIVIDUAL ACCOUNTS: Your name should be signed exactly as it appears
in the registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.
3. ALL OTHER ACCOUNTS should show the capacity of the individual signing.
This can be shown either in the form of the account registration itself or
by the individual executing the proxy card. For example:
REGISTRATION VALID
SIGNATURE
A. 1) ABC Corp. John Smith,
Treasurer
2) ABC Corp. John Smith,
Treasurer
c/o John Smith, Treasurer
B. 1) ABC Corp. Profit Sharing Plan Ann B. Collins,
Trustee
2) ABC Trust Ann B. Collins,
Trustee
3) Ann B. Collins, Trustee Ann B. Collins,
Trustee
u/t/d 12/28/78
C. 1) Anthony B. Craft, Cust. Anthony B. Craft
f/b/o Anthony B. Craft, Jr.
UGMA
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS OF
FIDELITY BEACON STREET TRUST:
FIDELITY MUNICIPAL MONEY MARKET FUND
SPARTAN NEW JERSEY MUNICIPAL MONEY MARKET FUND
TO BE HELD ON NOVEMBER 19, 1997
This Proxy Statement is furnished in connection with a solicitation of
proxies made by, and on behalf of, the Board of Trustees of Fidelity Beacon
Street Trust (the trust) to be used at the Special Meeting of Shareholders
of Fidelity Municipal Money Market Fund and Spartan New Jersey Municipal
Money Market Fund (the funds) and at any adjournments thereof (the
Meeting), to be held on November 19, 1997 at 9:00 a.m. at 82 Devonshire
Street, Boston, Massachusetts 02109, the principal executive office of the
trust and Fidelity Management & Research Company (FMR), the funds'
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 September 22, 1997. Supplementary
solicitations may be made by mail, telephone, telegraph, facsimile, or by
personal interview by representatives of the trust. In addition, Management
Information Services Corp. (MIS) and D.F. King & Co. Inc. may be paid on a
per-call basis to solicit shareholders on behalf of the funds at an
anticipated cost of approximately $6,000 (Fidelity Municipal Money Market
Fund) and $2,000 (Spartan New Jersey Municipal Money Market Fund).
Fidelity Municipal Money Market Fund will pay its expenses in connection
with preparing this Proxy Statement and its enclosures and of all
solicitations, and will reimburse brokerage firms and others for their
reasonable expenses in forwarding solicitation material to the beneficial
owners of shares. FMR will bear Spartan New Jersey Municipal Money Market
Fund's expenses in connection with preparing this Proxy Statement and its
enclosures and of all solicitations, and will reimburse brokerage firms and
others for their reasonable expenses in forwarding solicitation material to
the beneficial owners of shares. The principal business address of
Fidelity Distributors Corporation (FDC), the funds' principal underwriter
and distribution agent, is 82 Devonshire Street, Boston, Massachusetts
02109. The principal business address of FMR Texas Inc. (FMR Texas),
subadviser to the funds, 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 funds may also arrange to have votes recorded by telephone. D.F. King
& Co. Inc. may be paid on a per-call basis for vote-by-phone solicitations
on behalf of the funds at an anticipated cost of approximately $17,000
(Fidelity Municipal Money Market Fund) and $4,000 (Spartan New Jersey
Municipal Money Market Fund). Fidelity Municipal Money Market Fund will pay
its expenses in connection with telephone voting. FMR will bear Spartan New
Jersey Municipal Money Market Fund's expenses in connection with telephone
voting. If the funds record votes by telephone, they will use procedures
designed to authenticate shareholders' identities, to allow shareholders to
authorize the voting of their shares in accordance with their instructions,
and to confirm that their instructions have been properly recorded. Proxies
voted by telephone may be revoked at any time before they are voted in the
same manner that proxies voted by mail may be revoked.
If a quorum is not present at the Meeting, or if a quorum is present at
the Meeting, but sufficient votes to approve one or more of the proposed
items are not received, or if other matters arise requiring shareholder
attention, the persons named as 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 fund of the trust issued and outstanding as of July 31,
1997 are indicated in the following table:
Fidelity Municipal Money Market Fund
Spartan New Jersey Municipal Money Market Fund
[IF APPLICABLE: As of [INSERT THE SECOND MONTH-END FROM PRINT DATE] , the
nominees and officers of the trust owned, in the aggregate, less than 1% of
the fund[s'] outstanding shares.]
[: To the knowledge of the trust, substantial (5% or more) record or
beneficial ownership of [each/the fund(s) [and class] on July 31, 1997 was
as follows:
[IF APPLICABLE: FMR has advised the trust that for Proposals [LIST ALL
APPLICABLE PROPOSALS] contained in this Proxy Statement, it will vote its
shares at the Meeting [FOR each Proposal.] To the knowledge of the
trust[s], no [other] shareholder owned of record or beneficially more than
5% of the outstanding shares of the fund[s] on that date.
Shareholders of record at the close of business on September 22, 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 EACH FUND'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED
OCTOBER 31, 1996 AND THE SEMIANNUAL REPORT FOR THE FISCAL PERIOD ENDED
APRIL 30, 1997, CALL 1-800-544-8888 OR WRITE TO FIDELITY DISTRIBUTORS
CORPORATION AT 82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109.
VOTE REQUIRED: A PLURALITY OF ALL VOTES CAST AT THE MEETING IS SUFFICIENT
TO APPROVE PROPOSALS 1 AND 2. APPROVAL OF PROPOSAL 3 REQUIRES THE
AFFIRMATIVE VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES" OF
BOTH THE TRUST AND OF EACH FUND OF THE TRUST. APPROVAL OF PROPOSALS 4
THROUGH12 REQUIRES THE AFFIRMATIVE VOTE OF A "MAJORITY OF THE OUTSTANDING
VOTING SECURITIES" OF THE APPROPRIATE FUNDS. UNDER THE INVESTMENT COMPANY
ACT OF 1940 (THE 1940 ACT), THE VOTE OF A "MAJORITY OF THE OUTSTANDING
VOTING SECURITIES" MEANS THE AFFIRMATIVE VOTE OF THE LESSER OF (A) 67% OR
MORE OF THE VOTING SECURITIES PRESENT AT THE MEETING OR REPRESENTED BY
PROXY IF THE HOLDERS OF MORE THAN 50% OF THE OUTSTANDING VOTING SECURITIES
ARE PRESENT OR REPRESENTED BY PROXY OR (B) MORE THAN 50% OF THE OUTSTANDING
VOTING SECURITIES. BROKER NON-VOTES ARE NOT CONSIDERED "PRESENT" FOR THIS
PURPOSE.
The following tables summarize the proposals applicable to each fund.
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Proposal # Proposal Description Applicable Funds
1. To elect as Trustees Fidelity Municipal Money Market Fund
the 12 nominees Spartan New Jersey Municipal Money
presented in Proposal Market Fund
1.
2. To ratify the selection Fidelity Municipal Money Market Fund
of Price Waterhouse Spartan New Jersey Municipal Money
LLP as independent Market Fund
accountants of the
trust.
3. To amend the Trust Fidelity Municipal Money Market Fund
Instrument to provide Spartan New Jersey Municipal Money
voting rights based on Market Fund
a shareholder's total
dollar investment in a
fund, rather than on
the number of shares
owned.
4. To adopt a new Spartan New Jersey Municipal Money
fundamental Market Fund
investment policy for
the fund that would
permit it to invest all
of its assets in
another open-end
investment company
managed by FMR or
an affiliate with
substantially the same
investment objective
and policies.
5. To approve an Fidelity Municipal Money Market Fund
amended
management contract
for the fund that would
reduce the
management fee
payable to FMR by
the fund as FMR's
assets under
management
increase.
6. REAL ESTATE: To make Spartan New Jersey Municipal Money
explicit the ability of Market Fund
the fund to purchase
any security or
instrument backed by
real estate or real
estate interests and
any security of
companies engaged
in the real estate
business. Also to
eliminate the
restriction that
securities backed by
real estate must be
marketable.
7. DIVERSIFICATION: To Fidelity Municipal Money Market Fund
amend the
diversification
limitation to exclude
"securities of other
investment
companies" from
issuer diversification
limits.
8. To approve an Fidelity Municipal Money Market Fund
agreement and plan
providing for the
reorganization of
Fidelity Municipal
Money Market Fund
from one Delaware
business trust to
another.
9. To approve an Spartan New Jersey Municipal Money
agreement and plan Market Fund
providing for the
reorganization of
Spartan New Jersey
Municipal Money
Market Fund from one
Delaware business
trust to another.
ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS
10. SENIOR SECURITIES: To Spartan New Jersey Municipal Money
add the ability to issue Market Fund
senior securities to
the extent permitted
under the Investment
Company Act of 1940
Act.
11. BORROWING: To Spartan New Jersey Municipal Money
amend the borrowing Market Fund
limitation to require a
reduction in borrowing
if borrowings exceed
the 33 1/3% limit for
any reason rather
than solely because of
a decline in net
assets.
12. CONCENTRATION: To Spartan New Jersey Municipal Money
standardize language Market Fund
and explicitly exclude
"tax-exempt
obligations issued or
guaranteed by a U.S.
territory or possession
or a state or local
government, or a
political subdivision
thereof" from the
limitation on industry
concentration.
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1. TO ELECT A BOARD OF TRUSTEES.
The purpose of this proposal is to elect a Board of Trustees of the Trust.
Pursuant to the provisions of the Trust Instrument of Fidelity Beacon
Street Trust, the Trustees have determined that the number of Trustees
shall be fixed at twelve. It is intended that the enclosed proxy card will
be voted for the election as Trustees of the twelve nominees listed below,
unless such authority has been withheld in the proxy card.
Except for Robert M. Gates, William O. McCoy, and Robert C. Pozen, all
nominees named below are currently Trustees of Fidelity Beacon Street Trust
and have served in that capacity continuously since originally elected or
appointed. Ralph F. Cox, Phyllis Burke Davis, and Marvin L. Mann were
selected by the trust's Nominating and Administration Committee (see page
[REFERENCE PAGE DESCRIBING NOMINATING COMMITTEE IN THIS PROPOSAL] ) and
were appointed to the Board in November 1991, December 1992, and October
1993. None of the nominees are related to one another. Those nominees
indicated by an asterisk (*) are "interested persons" of the trust by
virtue of, among other things, their affiliation with either the trust, the
funds' investment adviser (FMR, or the Adviser), or the funds' distribution
agent, FDC. The business address of each nominee who is an "interested
person" is 82 Devonshire Street, Boston, Massachusetts 02109, and the
business address of all other nominees is Fidelity Investments, P.O. Box
9235, Boston, Massachusetts 02205-9235. Except for Robert M. Gates, William
O. McCoy, and Robert C. Pozen, each of the nominees is currently a Trustee
or General Partner, as the case may be, of 62 registered investment
companies (trusts or partnerships) advised by FMR. Mr. Gates, Mr. McCoy,
and Mr. Pozen are currently a Trustee or General Partner, as the case may
be, of 48 registered investment companies (trusts or partnerships) advised
by FMR.
In the election of Trustees, those twelve nominees receiving the highest
number of votes cast at the Meeting, providing a quorum is present, shall
be elected.
Nominee Principal Occupation ** Year of
(Age) Election or
Appointmen
t
Ralph F. Cox President of RABAR Enterprises 1991
(management
consulting-engineering industry,
(65) 1994.) Prior to February 1994,
he was President of Greenhill
Petroleum Corporation
(petroleum exploration and
production). Until March 1990,
Mr. Cox was President and
Chief Operating Officer of Union
Pacific Resources Company
(exploration and production). He
is a Director of USA Waste
Services, Inc. (non-hazardous
waste, 1993), CH2M Hill
Companies (engineering), Rio
Grande, Inc. (oil and gas
production), and Daniel
Industries (petroleum
measurement equipment
manufacturer). In addition, he is
a member of advisory boards of
Texas A&M University and the
University of Texas at Austin.
Phyllis Burke Davis Prior to her retirement in 1992
September 1991, Mrs. Davis
was the Senior Vice President of
(65) Corporate Affairs of Avon
Products, Inc. She is currently a
Director of BellSouth
Corporation
(telecommunications), Eaton
Corporation (manufacturing,
1991), and the TJX Companies,
Inc. (retail stores), and
previously served as a Director
of Hallmark Cards, Inc.
(1985-1991) and Nabisco
Brands, Inc. In addition, she is a
member of the President's
Advisory Council of The
University of Vermont School of
Business Administration.
Robert M. Gates Consultant, author, and lecturer
(1993). Mr. Gates was Director
of the Central Intelligence
(54) Agency (CIA) from 1991-1993.
From 1989 to 1991, Mr. Gates
served as Assistant to the
President of the United States
and Deputy National Security
Advisor. Mr. Gates is currently a
Trustee for the Forum For
International Policy, a Board
Member for the Virginia
Neurological Institute, and a
Senior Advisor of the Harvard
Journal of World Affairs. In
addition, Mr. Gates also serves
as a member of the corporate
board for LucasVarity PLC
(automotive components and
diesel engines), Charles Stark
Draper Laboratory (non-profit),
NACCO Industries, Inc. (mining
and manufacturing), and TRW
Inc. (original equipment and
replacement products).
*Edward C. Johnson President, is Chairman, Chief 1968
3d Executive Officer and a Director
of FMR Corp.; a Director and
Chairman of the Board and of
(67) the Executive Committee of
FMR; Chairman and a Director
of FMR Texas Inc., Fidelity
Management & Research (U.K.)
Inc., and Fidelity Management &
Research (Far East) Inc.
E. Bradley Jones Prior to his retirement in 1984, 1990
Mr. Jones was Chairman and
Chief Executive Officer of LTV
(70) Steel Company. He is a Director
of TRW Inc. (original equipment
and replacement products),
Consolidated Rail Corporation,
Birmingham Steel Corporation,
and RPM, Inc. (manufacturer of
chemical products), and he
previously served as a Director
of NACCO Industries, Inc.
(mining and manufacturing,
1985-1995), and Hyster-Yale
Materials Handling, Inc.
(1985-1995), and
Cleveland-Cliffs Inc (mining),
and as a Trustee of First Union
Real Estate Investments. In
addition, he serves as a Trustee
of the Cleveland Clinic
Foundation, where he has also
been a member of the Executive
Committee as well as Chairman
of the Board and President, a
Trustee and member of the
Executive Committee of
University School (Cleveland),
and a Trustee of Cleveland
Clinic Florida.
Donald J. Kirk Executive-in-Residence (1995) 1987
at Columbia University Graduate
School of Business and a
financial consultant. From 1987
(64) to January 1995, Mr. Kirk was a
Professor at Columbia University
Graduate School of Business.
Prior to 1987, he was Chairman
of the Financial Accounting
Standards Board. Mr. Kirk is a
Director of General Re
Corporation (reinsurance), and
he previously served as a
Director of Valuation Research
Corp. (appraisals and
valuations, 1993-1995). In
addition, he serves as Chairman
of the Board of Directors of the
National Arts Stabilization Fund,
Chairman of the Board of
Trustees of the Greenwich
Hospital Association, a Member
of the Public Oversight Board of
the American Institute of
Certified Public Accountants'
SEC Practice Section (1995),
and as a Public Governor of the
National Association of
Securities Dealers, Inc. (1996).
*Peter S. Lynch Vice Chairman and Director of 1990
FMR (1992). Prior to May 31,
1990, he was a Director of FMR
(54) and Executive Vice President of
FMR (a position he held until
March 31, 1991); Vice President
of Fidelity Magellan Fund and
FMR Growth Group Leader; and
Managing Director of FMR Corp.
Mr. Lynch was also Vice
President of Fidelity Investments
Corporate Services (1991-1992).
He is a Director of W.R. Grace &
Co. (chemicals) and Morrison
Knudsen Corporation
(engineering and construction).
In addition, he serves as a
Trustee of Boston College,
Massachusetts Eye & Ear
Infirmary, Historic Deerfield
(1989) and Society for the
Preservation of New England
Antiquities, and as an Overseer
of the Museum of Fine Arts of
Boston.
William O. McCoy Vice President of Finance for the
University of North Carolina
(16-school system, 1995). Prior to
(64) his retirement in December 1994,
Mr. McCoy was Vice Chairman of
the Board of BellSouth
Corporation (telecommunications,
1984) and President of BellSouth
Enterprises (1986). He is currently
a Director of Liberty Corporation
(holding company, 1984), Weeks
Corporation of Atlanta (real
estate, 1994), Carolina Power
and Light Company (electric utility,
1996), and the Kenan Transport
Co. (1996). Previously, he was a
Director of First American
Corporation (bank holding
company, 1979-1996). In addition,
Mr. McCoy serves as a member
of the Board of Visitors for the
University of North Carolina at
Chapel Hill (1994) and for the
Kenan-Flager Business School
(University of North Carolina at
Chapel Hill, 1988).
Gerald C. McDonough Chairman of G.M. Management 1989
Group (strategic advisory
services). Prior to his retirement
(68) in July 1988, he was Chairman
and Chief Executive Officer of
Leaseway Transportation Corp.
(physical distribution services).
Mr. McDonough is a Director of
Brush-Wellman Inc. (metal
refining), York International
Corp. (air conditioning and
refrigeration), Commercial
Intertech Corp. (hydraulic
systems, building systems, and
metal products, 1992), CUNO,
Inc. (liquid and gas filtration
products, 1996), and Associated
Estates Realty Corporation (a
real estate investment trust,
1993). Mr. McDonough served
as a Director of
ACME-Cleveland Corp. (metal
working, telecommunications,
and electronic products) from
1987-1996.
Marvin L. Mann Chairman of the Board, 1993
President, and Chief Executive
Officer of Lexmark International,
(64) Inc. (office machines, 1991).
Prior to 1991, he held the
positions of Vice President of
International Business Machines
Corporation ("IBM") and
President and General Manager
of various IBM divisions and
subsidiaries. Mr. Mann is a
Director of M.A. Hanna
Company (chemicals, 1993) and
Infomart (marketing services,
1991), a Trammell Crow Co. In
addition, he serves as the
Campaign Vice Chairman of the
Tri-State United Way (1993) and
is a member of the University of
Alabama President's Cabinet.
*Robert C. Pozen Senior Vice President, is
President and a Director of FMR
(1997); and President and a
(51) Director of FMR Texas Inc.
(1997), Fidelity Management &
Research (U.K.) Inc. (1997), and
Fidelity Management &
Research (Far East) Inc. (1997).
Previously, Mr. Pozen served as
General Counsel, Managing
Director, and Senior Vice
President of FMR Corp.
Thomas R. Williams President of The Wales Group, 1989
Inc. (management and financial
advisory services). Prior to
retiring in 1987, Mr. Williams
(69) served as Chairman of the
Board of First Wachovia
Corporation (bank holding
company), and Chairman and
Chief Executive Officer of The
First National Bank of Atlanta
and First Atlanta Corporation
(bank holding company). He is
currently a Director of BellSouth
Corporation
(telecommunications), ConAgra,
Inc. (agricultural products),
Fisher Business Systems, Inc.
(computer software), Georgia
Power Company (electric utility),
Gerber Alley & Associates, Inc.
(computer software), National
Life Insurance Company of
Vermont, American Software,
Inc., and AppleSouth, Inc.
(restaurants, 1992).
** Except as otherwise indicated, each individual has held the office shown
or other offices in the same company for the last five years.
[AS OF JULY 31, 1997, THE NOMINEES, TRUSTEES, AND OFFICERS OF THE TRUST
AND THE FUNDS OWNED, IN THE AGGREGATE, LESS THAN 1% OF EACH FUND'S
OUTSTANDING SHARES.]
If elected, the Trustees will hold office without limit in time except
that (a) any Trustee may resign; (b) any Trustee may be removed by written
instrument, signed by at least two-thirds of the number of Trustees prior
to such removal; (c) any Trustee who requests to be retired or who has
become incapacitated by illness or injury may be retired by written
instrument signed by a majority of the other Trustees; and (d) a Trustee
may be removed at any Special Meeting of shareholders by a two-thirds vote
of the outstanding voting securities of the trust. In case a vacancy shall
for any reason exist, the remaining Trustees will fill such vacancy by
appointing another Trustee, so long as, immediately after such appointment,
at least two-thirds of the Trustees have been elected by shareholders. If,
at any time, less than a majority of the Trustees holding office has been
elected by the shareholders, the Trustees then in office will promptly call
a shareholders' meeting for the purpose of electing a Board of Trustees.
Otherwise, there will normally be no meeting of shareholders for the
purpose of electing Trustees.
The trust's Board, which is currently composed of two interested and seven
non-interested Trustees, met eleven times during the twelve months ended
October 31, 1996. It is expected that the Trustees will meet at least ten
times a year at regularly scheduled meetings.
The trust's Audit Committee is composed entirely of Trustees who are not
interested persons of the trust, FMR or its affiliates and normally meets
four times a year, or as required, prior to meetings of the Board of
Trustees. Currently, Mr. Kirk (Chairman) and Mrs. Davis are members of the
Committee. If elected, it is anticipated that Mr. McCoy and Mr. Gates will
be members of the committee. The committee oversees and monitors the
trust's internal control structure, its auditing function and its financial
reporting process, including the resolution of material reporting issues.
The committee recommends to the Board of Trustees the appointment of
auditors for the trust. It reviews audit plans, fees and other material
arrangements in respect of the engagement of auditors, including non-audit
services to be performed. It reviews the qualifications of key personnel
involved in the foregoing activities. The committee plays an oversight role
in respect of the trust's investment compliance procedures and the code of
ethics. During the twelve months ended October 31, 1996, the committee
held four meetings.
The trust's Nominating and Administration Committee is currently composed
of Messrs. McDonough (Chairman), Jones, and Williams. The committee members
confer periodically and hold meetings as required. The committee makes
nominations for independent trustees, and for membership on committees.
The committee periodically reviews procedures and policies of the Board of
Trustees and committees. It acts as the administrative committee under the
Retirement Plan for non-interested trustees who retired prior to December
30, 1996. It monitors the performance of legal counsel employed by the
trust and the independent trustees. The committee in the first instance
monitors compliance with, and acts as the administrator of the provisions
of, the code of ethics applicable to the independent trustees. During the
twelve months ended October 31, 1996, the committee held five meetings. The
Nominating and Administration Committee will consider nominees recommended
by shareholders. Recommendations should be submitted to the committee in
care of the Secretary of the Trust. The trust does not have a compensation
committee; such matters are considered by the Nominating and Administration
Committee.
The following table sets forth information describing the compensation of
each Trustee and Member of the Advisory Board of each fund for his or her
services for the fiscal year ended October 31, 1996, or calendar year ended
December 31, 1996, as applicable.
COMPENSATION TABLE
Trustees and Aggregate Aggregate Total
Members of the Compensation Compensation Compensation
Advisory Board from from from the
Fidelity Municipal Spartan New Fund
Money Market Jersey Municipal Complex*
Fund Money Market A
A,B Fund
A,C
J. Gary Burkhead $0 $0 $ 0
**, #
Ralph F. Cox $1,312 $174 137,700
Phyllis Burke $1,280 $169 134,700
Davis
Richard J. $1,622 $214 168,000
Flynn***
Edward C. $0 $0 0
Johnson 3d **
E. Bradley Jones $1,295 $171 134,700
Donald J. Kirk $1,308 $172 136,200
Peter S. Lynch ** $0 $0 0
William O. $575 $77 85,333
McCoy****
Gerald C. $1,291 $170 136,200
McDonough
Edward H. $1,286 $171 136,200
Malone***
Marvin L. Mann $1,286 $171 134,700
Thomas R. $1,307 $172 136,200
Williams
* Information is for the calendar year ended December 31, 1996 for 235
funds in the complex.
** Interested Trustees of the funds are compensated by FMR.
*** Richard J. Flynn and Edward H. Malone served on the Board of Trustees
through December 31, 1996.
****During the period from May 1, 1996 through December 31, 1996, William
O. McCoy served as a Member of the Advisory Board of the trust.
# J. Gary Burkhead served on the Board of Trustees through August 1, 1997.
Effective August 1, 1997, Mr. Burkhead serves as a Member of the Advisory
Board of the trust.
A Compensation figures include cash, a pro rata portion of benefits accrued
under the retirement program for the period ended December 30, 1996 and
required to be deferred, and may include amounts deferred at the election
of Trustees.
B The following amounts are required to be deferred by each non-interested
Trustee, most of which is subject to vesting: Ralph F. Cox, $47, Phyllis
Burke Davis, $47, Richard J. Flynn, $0, E. Bradley Jones, $47, Donald J.
Kirk, $47, Gerald C. McDonough, $47, Edward H. Malone, $47, Marvin L. Mann,
$47, and Thomas R. Williams, $47.
C The following amounts are required to be deferred by each non-interested
Trustee, most of which is subject to vesting: Ralph F. Cox, $6, Phyllis
Burke Davis, $6, Richard J. Flynn, $0, E. Bradley Jones, $6, Donald J.
Kirk, $6, Gerald C. McDonough, $6, Edward H. Malone, $6, Marvin L. Mann,
$6, and Thomas R. Williams, $6.
Under a retirement program adopted in July 1988 and modified in November
1995 and November 1996, each non-interested Trustee who retired before
December 30, 1996 may receive payments from a Fidelity fund during his or
her lifetime based on his or her basic trustee fees and length of service.
The obligation of a fund to make such payments is neither secured nor
funded. A Trustee became eligible to participate in the program at the end
of the calendar year in which he or she reached age 72, provided that, at
the time of retirement, he or she had served as a Fidelity fund Trustee for
at least five years.
Under a deferred compensation plan adopted in September 1995 and amended in
November 1996 (the Plan), non-interested Trustees must defer receipt of a
portion of, and may elect to defer receipt of an additional portion of,
their annual fees. Amounts deferred under the Plan are treated as though
equivalent dollar amounts had been invested in shares of a cross-section of
Fidelity funds including funds in each major investment discipline and
representing a majority of Fidelity's assets under management (the
Reference Funds). The amounts ultimately received by the Trustees under the
Plan will be directly linked to the investment performance of the Reference
Funds. Deferral of fees in accordance with the Plan will have a negligible
effect on a fund's assets, liabilities, and net income per share, and will
not obligate a fund to retain the services of any Trustee or to pay any
particular level of compensation to the Trustee. A fund may invest in the
Reference Funds under the Plan without shareholder approval.
As of December 30, 1996, the non-interested Trustees terminated the
retirement program for Trustees who retire after such date. In connection
with the termination of the retirement program, each then-existing
non-interested Trustee received a credit to his or her Plan account equal
to the present value of the estimated benefits that would have been payable
under the retirement program. The amounts credited to the non-interested
Trustees' Plan accounts are subject to vesting and are treated as though
equivalent dollar amounts had been invested in shares of the Reference
Funds. The amounts ultimately received by the Trustees in connection with
the credits to their Plan accounts will be directly linked to the
investment performance of the Reference Funds. The termination of the
retirement program and related crediting of estimated benefits to the
Trustees' Plan accounts did not result in a material cost to the funds.
2. TO RATIFY THE SELECTION OF PRICE WATERHOUSE LLP AS INDEPENDENT
ACCOUNTANTS OF THE TRUST.
By a vote of the non-interested Trustees, the firm of Price Waterhouse LLP
has been selected as independent accountants for the trust to sign or
certify any financial statements of the trust required by any law or
regulation to be certified by an independent accountant and filed with the
Securities and Exchange Commission (SEC) or any state. Pursuant to the 1940
Act, such selection requires the ratification of shareholders. In addition,
as required by the 1940 Act, the vote of the Trustees is subject to the
right of the trust, by vote of a majority of its outstanding voting
securities at any meeting called for the purpose of voting on such action,
to terminate such employment without penalty. Price Waterhouse LLP has
advised the trust that it has no direct or material indirect ownership
interest in the trust.
The independent accountants examine annual financial statements for the
funds and provide other audit and tax-related services. In recommending the
selection of the trust's accountants, the Audit Committee reviewed the
nature and scope of the services to be provided (including non-audit
services) and whether the performance of such services would affect the
accountants' independence. Representatives of Price Waterhouse LLP are not
expected to be present at the Meeting, but have been given the opportunity
to make a statement if they so desire and will be available should any
matter arise requiring their presence.
3. TO AMEND THE TRUST INSTRUMENT TO PROVIDE DOLLAR-BASED VOTING RIGHTS FOR
SHAREHOLDERS OF THE TRUST.
The Board of Trustees has approved, and recommends that shareholders of
the trust approve, a proposal to amend Article VII, Section 1 of the Trust
Instrument. The amendment would provide voting rights based on a
shareholder's total dollar interest in a fund (dollar-based voting), rather
than on the number of shares owned, for all shareholder votes for a fund.
As a result, voting power would be allocated in proportion to the value of
each shareholder's investment.
BACKGROUND. Fidelity Municipal Money Market Fund and Spartan New Jersey
Municipal Money Market Fund are funds of Fidelity Beacon Street Trust, an
open-end management investment company organized as a Delaware business
trust. Currently, there are two funds in the trust. Shareholders of each
fund vote separately on matters concerning only that fund and vote on a
trust-wide basis on matters that affect the trust as a whole, such as
electing trustees or amending the Trust Instrument. Currently, under the
Trust Instrument, each share is entitled to one vote, regardless of the
relative value of the shares of each fund in the trust.
The original intent of the one-share, one-vote provision was to provide
equitable voting rights to all shareholders as required by the 1940 Act. In
the case where a trust has several series or funds, such as Fidelity Beacon
Street Trust, voting rights may have become disproportionate since the net
asset value per share (NAV) of the separate funds generally diverge over
time. The Staff of the Securities and Exchange Commission (SEC) has issued
a "no-action" letter permitting a trust to seek shareholder approval of a
dollar-based voting system. The proposed amendment will comply with the
conditions stated in the no-action letter.
REASON FOR PROPOSAL. If approved, the amendment would provide a more
equitable distribution of voting rights for certain votes than the
one-share, one-vote system currently in effect. The voting power of each
shareholder would be commensurate with the value of the shareholder's
dollar investment rather than with the number of shares held.
Under the current voting provisions, an investment in a fund with a lower
NAV may have significantly greater voting power than the same dollar amount
invested in a fund with a higher NAV. Currently, since there are only money
market funds in the trust, the proposal will not affect the voting rights
of fund shareholders on votes requiring trust-wide participation since
money market funds are managed to maintain a $1.00 NAV. However, if
additional funds with fluctuating NAVs are added to the trust, relative
voting rights would be changed under the proposal. To illustrate the
potentially disproportionate calculation of voting power currently in
place, the table below shows a hypothetical example of a trust with funds
with fluctuating NAVs.
Fund Net Asset Value $1,000
investment in
terms of
number of
shares
A $ 10.00 100.000
B $ 7.57 132.100
C $ 10.93 91.491
D $ 1.00 1,000.000
For example, Fund D shareholders would have ten times the voting power of
Fund A shareholders, because a $1,000 investment in Fund D would buy ten
times as many shares as a $1,000 investment in Fund A. Accordingly, a
one-share, one-vote system may provide certain shareholders with a
disproportionate ability to affect the vote relative to shareholders of
other funds in the trust. If dollar-based voting had been in effect, each
shareholder would have had 1,000 voting shares. Their voting power would be
proportionate to their economic interest, which FMR believes is a more
equitable result, and which is the result with respect to a typical
corporation where each voting share generally has an equal market price.
On matters requiring trust-wide votes where all funds are required to
vote, shareholders who own shares with a lower NAV than other funds in the
trust would be giving other shareholders in the trust more voting "power"
than they currently have. On matters affecting only one fund, only
shareholders of that fund vote on the issue. In this instance, under both
the current Trust Instrument and an amended Trust Instrument, all
shareholders of the fund would have the same voting rights, since the NAV
is the same for all shares in a single fund.
AMENDMENT TO THE TRUST INSTRUMENT. Article VII, Section 1 sets forth the
method of calculating voting rights for all shareholder votes for the
trust. If approved, Article VII, Section 1 will be amended as follows
(material to be added is ((underlined)) and material to be deleted is
[bracketed]):
ARTICLE VII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Voting powers
Section 1. On any matter submitted to a vote of the Shareholders, all
Shares shall be voted separately by individual Series, except (i) when
required by the 1940 Act, Shares shall be voted in the aggregate and not
by individual Series; and (ii) when the Trustees have determined that the
matter affects the interests of more than one Series, then the
Shareholders of all such Series shall be entitled to vote thereon. The
Trustees may also determine that a matter affects only the interests of one
or more classes of a Series, in which case any such matter shall be voted
on by such class or classes. [Each whole Share shall be entitled to one
vote as to any matter on which it is entitled to vote, and each fractional
Share shall be entitled to a propor tionate fractional vote.] ((A
Shareholder of each Series shall be entitled to one vote for each dollar
of net asset value (number of shares owned times net asset value per
share) of such Series, on any matter on which such Shareholder is entitled
to vote and each fractional dollar amount shall be entitled to a
proportionate frac tional vote. ))There shall be no cumulative voting in
the election of Trustees. Shares may be voted in person or by proxy or
in any manner provided for in the Bylaws. A proxy may be given in
writing. The Bylaws may provide that proxies may also, or may instead, be
given by any electronic or telecommunications device or in any other
manner. Notwithstanding anything else herein or in the Bylaws, in the
event a proposal by anyone other than the officers or Trustees of the Trust
is sub mitted to a vote of the Shareholders of one or more Series or of
the Trust, or in the event of any proxy contest or proxy solicitation or
proposal in opposition to any proposal by the officers or Trustees of the
Trust, Shares may be voted only in per son or by written proxy. Until
Shares are issued, the Trustees may exercise all rights of Shareholders
and may take any action required or permitted by law, this Trust
Instrument or any of the Bylaws of the Trust to be taken by Shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the trust and its shareholders. The Trustees recommend voting FOR
the proposal. The amendment will become effective upon shareholder
approval. If the proposal is not approved by the shareholders of the trust,
the Trust Instrument will remain unchanged.
4. TO ADOPT A NEW FUNDAMENTAL INVESTMENT POLICY FOR SPARTAN NEW JERSEY
MUNICIPAL MONEY MARKET FUND PERMITTING THE FUND TO INVEST ALL OF ITS ASSETS
IN ANOTHER OPEN-END INVESTMENT COMPANY WITH SUBSTANTIALLY THE SAME
INVESTMENT OBJECTIVE AND POLICIES.
The Board of Trustees has approved, and recommends that shareholders of
Spartan New Jersey Municipal Money Market Fund approve, the adoption of a
new fundamental investment policy that would permit the fund to invest all
of its assets in another open-end investment company with substantially the
same investment objective and policies ("Master Feeder Fund Structure").
The purpose of the Master Feeder Fund Structure would be to achieve
operational efficiencies by consolidating portfolio management while
maintaining different distribution and servicing structures.
BACKGROUND. A number of mutual funds have developed so called
"master-feeder" fund structures under which several "feeder" funds invest
all of their assets in a single "master" fund.
REASON FOR THE PROPOSAL. FMR and the Board of Trustees continually review
methods of structuring mutual funds to take advantage of potential
efficiencies. While neither the Board nor FMR has determined that Spartan
New Jersey Municipal Money Market Fund should invest in a Master Fund, the
Trustees believe it could be in the best interests of the fund to adopt
such a structure at a future date.
At present, certain of the fund's fundamental investment policies and
limitations would prevent the fund from investing all of its assets in
another investment company, and would require a vote of shareholders before
such a structure could be adopted. To avoid the costs associated with a
subsequent shareholder meeting, the Trustees recommend that shareholders
vote to permit the fund's assets to be invested in a single Master Fund,
without a further vote of shareholders. The Trustees will authorize such an
investment only if they determine that action to be in the best interests
of the fund and its shareholders and if, upon advice of counsel, they
determine that the investment will not have material adverse tax
consequences to the fund.
DISCUSSION. FMR may manage a number of mutual funds with similar
investment objectives, policies, and limitations but with different
features and services (Comparable Funds). Were these Comparable Funds to
pool their assets, operational efficiencies could be achieved, offering the
opportunity to reduce costs. Similarly, FMR anticipates that a Master
Feeder Fund Structure would facilitate the introduction of new Fidelity
mutual funds, increasing the investment options available to shareholders.
The fund's method of operation and shareholder services would not be
materially affected by its investment in a Master Fund, except that the
assets of the fund would be managed as part of a larger pool. Were the fund
to invest all of its assets in a Master Fund, it would hold only a single
investment security, and the Master Fund would directly invest in
individual securities pursuant to its investment objective. The Master Fund
would be managed by FMR or an affiliate, such as FMR Texas Inc. in the case
of a money market fund. The Trustees would retain the right to withdraw the
fund's investments from a Master Fund at any time and would do so if the
Master Fund's investment objective and policies were no longer appropriate
for the fund. The fund would then resume investing directly in individual
securities as it does currently. Whenever a Feeder Fund is asked to vote at
a shareholder meeting of the Master Fund, the Feeder Fund will hold a
meeting of its shareholders if required by applicable law or the Feeder
Fund's policies to vote on the matters to be considered at the Master Fund
shareholder meeting. The fund will cast its votes at the Master Fund
meeting in the same proportion as the fund's shareholders voted at their
meeting.
At present, the Trustees have not considered any specific proposal to
authorize pooling of assets. The Trustees will authorize investing the
fund's assets in a Master Fund only if they determine that pooling is in
the best interests of the fund and if, upon advice of counsel, they
determine that the investment will not have material adverse tax
consequences to the fund or its shareholders. In determining whether to
invest in a Master Fund, the Trustees will consider, among other things,
the opportunity to reduce costs and to achieve operational efficiencies.
The Trustees will not authorize investment in a Master Fund if doing so
would materially increase costs (including fees) to shareholders.
FMR may benefit from the use of a Master Feeder Fund Structure if overall
assets under management are increased (since FMR's fees are based on
assets). Also, FMR's expenses of providing investment and other services to
the fund may be reduced. If the fund's investment in a Master Fund were to
reduce FMR's expenses materially, the Trustees would consider whether a
reduction in FMR's management fee would be appropriate if and when a Master
Feeder Fund Structure is implemented.
PROPOSED FUNDAMENTAL POLICY. To allow the fund to invest in a Master Fund
at a future date, the Trustees recommend that Spartan New Jersey Municipal
Money Market Fund adopt the following fundamental policy:
"The fund may, notwithstanding any other fundamental investment policy or
limitation, invest all of its assets in the securities of a single open-end
management investment company managed by Fidelity Management & Research
Company or an affiliate or successor with substantially the same
fundamental investment objective, policies, and limitations as the fund."
If the proposal is adopted, the Trustees intend to adopt a non-fundamental
investment limitation for the fund which states:
"The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company managed by
Fidelity Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund."
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit Spartan New Jersey Municipal Money Market Fund and its
shareholders. The Trustees recommend voting FOR the proposal. Upon
shareholder approval, the changes will become effective when the disclosure
is revised to reflect the changes. If the proposal is not approved by the
shareholders of the fund, the fund's current fundamental investment
policies will remain unchanged with respect to potential investment in a
Master Fund.
5. TO APPROVE AN AMENDED MANAGEMENT CONTRACT FOR FIDELITY MUNICIPAL MONEY
MARKET FUND.
The Trustees recommend that the shareholders of the fund approve an
amendment to the fund's management contract with Fidelity Management &
Research Company (FMR) (the Amended Contract). The Amended Contract
modifies the management fee that FMR receives from the fund to provide for
lower fees when FMR's assets under management exceed certain levels. THE
AMENDED CONTRACT WILL RESULT IN A MANAGEMENT FEE THAT IS THE SAME AS, OR
LOWER THAN, THE FEE PAYABLE UNDER THE PRESENT MANAGEMENT CONTRACT (THE
PRESENT CONTRACT). (For information on FMR, see the section entitled
"Activities and Management of FMR" on page __.)
PROPOSED AMENDMENT TO THE PRESENT MANAGEMENT CONTRACT. A copy of the
Amended Contract, marked to indicate the proposed amendment, is supplied as
Exhibit 1 on page __ . Except for the modifications discussed above, it is
substantially identical to the Present Contract. (For a detailed discussion
of the fund's Present Contract, refer to the section entitled "Present
Management Contract" beginning on page __.) If approved by shareholders,
the Amended Contract will take effect on the first day of the first month
following approval and will remain in effect through May 31, 1998 and
thereafter, but only as long as its continuance is approved at least
annually by (i) the vote, cast in person at a meeting called for the
purpose, of a majority of those Trustees who are not "interested persons"
of the trust or FMR (the Independent Trustees) and (ii) the vote of either
a majority of the Trustees or by the vote of a majority of the outstanding
shares of the fund. If the Amended Contract is not approved, the Present
Contract will continue in effect through 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 a majority of the
Independent Trustees and (ii) the vote of either a majority of the Trustees
or by the vote of a majority of the outstanding shares of the fund.
The management fee is an annual percentage of the fund's average net
assets (the management fee rate), calculated and paid monthly. The
management fee rate is the sum of two components: a Group Fee Rate, which
varies according to assets under management by FMR, and a fixed Individual
Fund Fee Rate. The Amended Contract modifies the Group Fee Rate by
providing for lower fee rates if FMR's assets under management remain above
$120 billion.
MODIFICATION TO GROUP FEE RATE. The Group Fee Rate varies based upon the
monthly average of the aggregate net assets of all registered investment
companies having management contracts with FMR (assets under management by
FMR). For example, as assets under management by FMR increase, the Group
Fee Rate declines. The Amended Contract would not change the group fee
calculation for assets under management by FMR of $120 billion or less.
Above $120 billion in assets under FMR's management, the Group Fee Rate
declines under both the Present Contract and the Amended Contact, but under
the Amended Contract, it declines faster. Group Fee Rates that are lower
than those contained in the fund's Present Contract have been voluntarily
implemented by FMR on November 1, 1993, August 1, 1994, and January 1,
1996.
The Group Fee Rate is calculated according to a graduated schedule
providing for different rates for different levels of assets under
management by FMR. The rate at which the Group Fee Rate declines is
determined by fee "breakpoints" that provide for lower fee rates when
assets increase. The Amended Contract adds 12 new fee breakpoints for
assets under FMR's management above $120 billion as illustrated in the
following table. (For an explanation of how the Group Fee Rate is used to
calculate the management fee, see the section entitled "Present Management
Contract" beginning on page ___.)
GROUP FEE RATE BREAKPOINTS
PRESENT CONTRACT AMENDED CONTRACT
Average Group Present Average Group Amended
Assets Contract* Assets Contract
($ billions) ($ billions)
Over 120 .1450% 120 - 156 .1450%
156 - 192 .1400%
192 - 228 .1350%
228 - 264 .1300%
264 - 300 .1275%
300 - 336 .1250%
336 - 372 .1225%
372 - 408 .1200%
408 - 444 .1175%
444 - 480 .1150%
480 - 516 .1125%
Over 516 .1100%
The result at various levels of group net assets is illustrated by the
table below.
EFFECTIVE ANNUAL GROUP FEE RATES
Group Net Present Amended
Assets Contract* Contract
($ billions)
150 .1736% .1736%
200 .1658% .1652%
250 .1606% .1587%
300 .1572% .1536%
350 .1547% .1494%
400 .1529% .1459%
450 .1515% .1427%
500 .1503% .1399%
550 .1494% .1372%
* Does not reflect voluntary adoption of extended group fee rate schedules
by FMR on November 1, 1993, August 1, 1994, and January 1, 1996.
Assets under FMR's management for July 1997 were approximately $522
billion.
COMPARISON OF MANAGEMENT FEES. For July 1997, average assets under
management by FMR were $522 billion. The fund's management fee rate under
the Amended Contract would have been __%, compared to __% under the
Present Contract. The management fee rate will remain the same under both
the Present Contract and the Amended Contract until assets under FMR's
management exceed $120 billion, at which point the management fee rate
under the Amended Contract begins to decline relative to the Present
Contract. The following chart compares the fund's management fee under the
terms of the Present Contract for the fiscal year ended October 31, 1996 to
the management fee the fund would have incurred if the Amended Contract had
been in effect.
Present Contract Amended Contract
Management Management Percentage
Fee* Fee Difference
$11,129,250 $10,873,637 (23%)
* Does not reflect voluntary adoption of extended group fee rate schedules
by FMR on November 1, 1993, August 1, 1994, and January 1, 1996.
The following chart compares the fund's management fee under the terms of
the Present Contract for the period ended July 31, 1997 to the management
fee the fund would have incurred if the Amended Contract had been in
effect.
Present Contract Amended Contract
Management Management Percentage
Fee* Fee Difference
$11,610,892 $11,258,279 (3%)
* Does not reflect voluntary adoption of extended group fee rate schedules
by FMR on November 1, 1993, August 1, 1994, and January 1, 1996.
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 October 17, 1996. The Board of
Trustees considered and approved the modifications to the Group Fee Rate
schedule during the two month periods from November to December 1995, June
to July 1994, and September to October 1993. The Board of Trustees
received materials relating to the Amended Contract in advance of the
meeting at which the Amended Contract was considered, and had the
opportunity to ask questions and request further information in connection
with such consideration.
INFORMATION RECEIVED BY THE INDEPENDENT TRUSTEES. In connection with their
monthly meetings Trustees receive materials specifically relating to the
Amended Contract. These materials include: (i) information on the
investment performance of the fund, a peer group of funds and an
appropriate index or combination of indices, (ii) sales and redemption data
in respect of the fund, (iii) the economic outlook and the general
investment outlook in the markets in which the fund invests, and (iv)
notable changes in the fund's investments. The Board of Trustees and the
Independent Trustees also consider periodically other material facts such
as (1) FMR's 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 response to questions raised by the Independent Trustees, additional
information was furnished by FMR including, among other items, information
on and analysis of (a) the overall organization of FMR, (b) the choice of
performance indices and benchmarks, (c) the composition of peer groups of
funds, (d) transfer agency and bookkeeping fees paid to affiliates of FMR,
(e) investment performance, (f) investment management staffing, (g) the
potential for achieving further economies of scale, (h) operating expenses
paid to third parties, and (i) the information furnished to investors,
including the fund's shareholders.
Matters considered by the Board of Trustees and the Independent Trustees
in connection with their approval of the Amended Contract include the
following:
INVESTMENT COMPLIANCE AND PERFORMANCE. The Board of Trustees and the
Independent Trustees considered whether the fund has operated within its
investment objective and its record of compliance with its investment
restrictions. They also reviewed monthly the fund's investment performance
as well as the performance of a peer group of mutual funds, and the
performance of an appropriate index or combination of indices.
FMR'S PERSONNEL AND METHODS. The Board of Trustees and the Independent
Trustees annually review a report detailing the background of the fund's
portfolio manager, and the fund's investment objective and discipline. The
Independent Trustees have also had discussions with senior management of
FMR responsible for investment operations, and the senior management of
Fidelity's 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.
ECONOMIES OF SCALE. The Board of Trustees and the Independent Trustees
considered whether there have been economies of scale in respect of the
management of the Fidelity funds, whether the Fidelity funds (including the
fund) have appropriately benefitted from any economies of scale, and
whether there is potential for realization of any further economies of
scale. The Board of Trustees and the Independent Trustees have concluded
that FMR's mutual fund business presents some limited opportunities to
realize economies of scale and that these economies are being shared
between fund shareholders and FMR in an appropriate manner. The Independent
Trustees have also concluded that the existing group fee structure should
be continued but determined that it would be appropriate to change the
group fee structure as proposed herein.
OTHER BENEFITS TO FMR. The Board of Trustees and the Independent Trustees
also considered the character and amount of fees paid by the fund and the
fund's shareholders for services provided by FMR and its affiliates,
including fees for services like transfer agency, fund accounting and
direct shareholder services. They also considered the allocation of fund
brokerage to brokers affiliated with FMR and the receipt of sales loads and
payments under Rule 12b-1 plans in respect of certain of the Fidelity
funds. The Board of Trustees and the Independent Trustees also considered
the revenues and profitability of FMR businesses other than its mutual fund
business, including FMR's retail brokerage, correspondent brokerage,
capital markets, trust, investment advisory, pension record keeping, credit
card, insurance, publishing, real estate, international research and
investment funds, and others. The Board of Trustees and the Independent
Trustees considered the intangible benefits that accrue to FMR and its
affiliates by virtue of their relationship with the fund.
OTHER BENEFITS TO SHAREHOLDERS. The Board of Trustees and the Independent
Trustees considered the benefit to shareholders of investing in a fund that
is part of a large family of funds offering a variety of investment
disciplines and providing for a large variety of fund and shareholder
services.
CONCLUSION. In considering the Amended Contract, the Board of Trustees and
the Independent Trustees did not identify any single factor as
all-important or controlling, and the foregoing summary does not detail all
of the matters considered. Based on their evaluation of all material
factors and assisted by the advice of independent counsel, the Trustees
concluded (i) that the existing management fee structure is fair and
reasonable and (ii) that the proposed modifications to the management fee
structure, that is the reduction of the Group Fee Rate schedule, 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.
6. TO AMEND SPARTAN NEW JERSEY MUNICIPAL MONEY MARKET FUND'S FUNDAMENTAL
INVESTMENT LIMITATION CONCERNING REAL ESTATE.
The fund's fundamental investment limitation concerning real estate
currently states:
"The fund may not purchase or sell real estate unless acquired as a result
of ownership of securities (but this shall not prevent the fund from
purchasing or selling marketable securities issued by companies or other
entities or investment vehicles that deal in real estate or interests
therein, nor shall this prevent the fund from purchasing interests in pools
of real estate mortgage loans)."
The Trustees recommend that shareholders of the fund vote to replace this
fundamental investment limitation with the following fundamental investment
limitation governing purchases and sales of real estate.
"The fund may not purchase or sell real estate unless acquired as a result
of ownership of securities or other instruments (but this shall not prevent
the fund from investing in securities or other instruments backed by real
estate or securities of companies engaged in the real estate business)."
The primary purpose of the proposed amendment is to clarify the types of
securities in which the fund is authorized to invest and to conform the
fund's fundamental real estate limitation to a limitation that is expected
to become standard for all funds managed by FMR. (See "Adoption of
Standardized Investment Limitations" on page 39.) If the proposal is
approved, the new fundamental real estate limitation may not be changed
without the approval of shareholders.
Adoption of the proposed limitation concerning real estate is not expected
to significantly affect the way in which the fund is managed, the
investment performance of the fund, or the securities or instruments in
which the fund invests. However, to the extent that the fund invests to a
greater extent in real estate related securities, it will be subject to the
risks of the real estate market. This industry is sensitive to factors such
as changes in real estate values and property taxes, overbuilding,
variations in rental income, and interest rates. Performance could also be
affected by the structure, cash flow, and management skill of real estate
companies.
The fund does not expect to acquire real estate. However, the proposed
limitation would clarify several points. First, the proposed limitation
would make explicit that the fund may acquire a security or other
instrument that is secured by a mortgage or other right to foreclose on
real estate, in the event of a default. Second, the proposed limitation
would clarify the fact that the fund may invest without limitation in
securities issued or guaranteed by companies engaged in acquiring,
constructing, financing, developing, or operating real estate projects
(e.g., securities of issuers that develop various industrial, commercial,
or residential real estate projects such as factories, office buildings, or
apartments). Any investments in these securities or other instruments are,
of course, subject to the fund's investment objective and policies and to
other limitations regarding diversification and concentration in particular
industries. The proposed limitation covers all types of real estate-related
investments, while the current limitation refers to "marketable"
securities. Any unmarketable investments will continue to be limited to 10%
of net assets by the fund's existing non-fundamental limitation.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the fund and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the changes will become effective
when the disclosure is revised to reflect the changes. If the proposal is
not approved by the shareholders of the fund, the fund's current limitation
will remain unchanged.
7.TO AMEND FIDELITY MUNICIPAL MONEY MARKET FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING DIVERSIFICATION.
The fund's current fundamental investment limitation concerning
diversification is as follows:
"The fund may not with respect to 75% of the fund's total assets, purchase
the securities of any issuer (other than securities issued or guaranteed by
the U.S. government, or any of its agencies or instrumentalities) if, as a
result thereof, (a) more than 5% of the fund's total assets would be
invested in the securities of that issuer, or (b) the fund would hold more
than 10% of the outstanding voting securities of that issuer."
The Trustees recommend that shareholders of the fund vote to replace the
fund's current fundamental investment limitation with the following amended
fundamental investment limitation governing diversification:
"The fund may not with respect to 75% of the fund's total assets, purchase
the securities of any issuer (other than securities issued or guaranteed by
the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more than 5%
of the fund's total assets would be invested in the securities of that
issuer, or (b) the fund would hold more than 10% of the outstanding voting
securities of that issuer."
The text recommended would make one change to the fund's diversification
limitation. Addition of the text would permit the fund to invest without
limitation in the securities of other investment companies. Pursuant to an
exemptive order granted by the SEC, the fund may invest up to 25% of its
total assets in non-publicly offered money market funds (the Central Funds)
managed by FMR or an affiliate of FMR. The Central Funds do not currently
pay investment advisory, management, or transfer agent fees, but do pay
minimal fees for services, such as custodian, auditor, and Independent
Trustees fees. If the proposal is approved the fund may increase its
investment in the Central Funds in addition to investing directly in money
market securities. FMR believes that the fund will benefit by having the
Central Funds available as an investment alternative without having to
incur the cost of a shareholder meeting.
The SEC has proposed amendments to the regulations applicable to national
tax-exempt money market funds that may limit investment in the securities
of a single issuer (other than U.S. Government securities) to no more than
5% of a fund's total assets except that a fund may invest up to 25% of its
total assets in the securities of a single issuer for up to three business
days. If the proposed amendment is adopted, FMR will comply with the
amendment. Pursuant to the order of exemption referred to above, the fund
may continue to invest for cash management purposes up to 25% of total
assets in the Central Funds managed by FMR or an affiliate of FMR.
Fidelity Municipal Money Market Fund intends to interpret the fundamental
limitation in accordance with SEC regulations applicable to money market
funds.
If this proposal is approved, the amended fundamental diversification
limitation cannot be changed without the approval of the shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit the fund and its shareholders. The Trustees
recommend voting FOR the proposal. Upon shareholder approval, the changes
will become effective when the disclosure is revised to reflect the
changes. If the proposal is not approved by the shareholders of the fund,
the fund's current fundamental diversification limitation will remain
unchanged.
8. TO APPROVE AN AGREEMENT AND PLAN PROVIDING FOR THE REORGANIZATION OF
FIDELITY MUNICIPAL MONEY MARKET FUND FROM A SEPARATE SERIES OF ONE DELAWARE
BUSINESS TRUST TO ANOTHER.
The Board of Trustees has approved an Agreement and Plan of Reorganization
(the Plan of Reorganization) in the form attached to this Proxy Statement
as Exhibit 2. The Plan of Reorganization provides for a reorganization of
Fidelity Municipal Money Market Fund (the Fund) from a separate series of
Fidelity Beacon Street Trust (Beacon Street Trust), a Delaware business
trust, to a newly-established, separate series of Fidelity Union Street
Trust II (the Trust), also a Delaware business trust (the Reorganization).
The investment objective, policies, and limitations of the Fund will not
change except as approved by shareholders and as described in this proxy
statement. A separate series of 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 (except as they
may be modified pursuant to a vote of the shareholders as proposed in this
proxy statement). Since both Beacon Street Trust 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 except with regard to shareholder voting rights (as
described below), nor will the Reorganization affect the operation of the
Fund in a material manner. The same individuals serve as Trustees of both
trusts, except for Mr. Gates, Mr. McCoy, and Mr. Pozen. 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. Shareholder voting rights for the Fund are
based on the number of shares owned (share-based voting). Currently, the
Trust has share-based voting. However, the Trust has filed a proxy
statement with the Securities and Exchange Commission proposing to
shareholders of the Trust to adopt dollar-based voting, which would provide
for shareholder voting rights that are based on the total dollar interest
in a fund. While the differences between the shareholder voting rights
would have no bearing on matters affecting only one fund in a trust, on
matters requiring trust-wide votes where all funds in a trust are required
to vote, dollar-based voting provides shareholders voting power that is
proportionate to their economic interest whereas share-based voting may
provide shareholders who own shares with a lower net asset value than other
funds in the trust with a disproportionate ability to affect the vote
relative to shareholders of the other funds in the trust. After the
Reorganization, the voting rights of Fund shareholders will change to
reflect those of the Series. For more information regarding voting rights
of shareholders of the Fund, refer to the section of the Fund's Statement
of Additional Information called "Description of the Trust." The Trust's
fiscal year end is August 31, which is different than that of the Beacon
Street Trust. The Trustees may change the fiscal year end of the Trust at
their discretion in the future.
FMR, the Fund's investment adviser, will be responsible for the
investment management of the Series, subject to the supervision of the
Board of Trustees, under a management contract identical to the contract in
effect between FMR and the Fund (the Present Management Contract);
similarly, FMR Texas Inc. (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 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 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 Beacon Street Trust, which has two series of shares or funds.
The Board of Trustees unanimously recommends reorganization 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 Beacon Street Trust 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 proposal to present the Plan of Reorganization to shareholders was
approved by the Board of Trustees of Beacon Street Trust, including all of
the Trustees who are not interested persons of FMR, on [Date of Board
Approval]. The Board of Trustees recommend 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 _); and authorization of Beacon Street Trust, as sole
shareholder of the Series, to approve (i) a Management Contract for the
Series between the Trust and FMR, (ii) the Sub-Advisory Agreement between
FMR and FMR Texas, with respect to the Series and (iii) the Distribution
and Service Plan under Rule 12b-1, identical to the contract or Plan, as
the case may be, in effect with the Fund immediately prior to the Closing
Date (including as the Management Contract may be modified pursuant to a
vote of shareholders of the fund as proposed in 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 Beacon Street Trust.
SUMMARY OF THE PLAN OF REORGANIZATION. The following discussion summarizes
the important terms of the Plan of Reorganization. This summary is
qualified in its entirety by reference to the Plan of Reorganization
itself, 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 in the Series (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 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 Beacon Street Trust as the then sole
initial shareholder of the Series to approve (i) a Management Contract with
FMR for the Series (the New Management Contract), (ii) the Sub-Advisory
Agreement between FMR and FMR Texas with respect to the Series (the New
Sub-Advisory Agreement), and (iii) the Distribution and Service Plan (the
New Plan) under Rule 12b-1 with respect to the Series, identical to the
contracts or plans, as the case may be, in effect with the Fund
immediately prior to the Closing Date (including as the Management Contract
may be modified pursuant to a vote of shareholders of the fund as proposed
in 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 to be retired by written
instrument signed by a majority of the other Trustees or who is unable to
serve due to physical or mental incapacity by reason of disease or
otherwise, death, or for any other reason, may be retired; and (d) a
Trustee may be removed at any Special Meeting of the shareholders by a vote
of two-thirds of the outstanding shares of 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
Plan will take effect on the Closing Date. The New Management Contract, the
New Sub-Advisory Agreement, and the New Plan will continue in force until
May 31, 1998, May 31, 1998, and April 30, 1998, respectively. 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 vote of a majority of the Trustees or by the vote of
a majority of the outstanding shares of the Series. The New Plan will
continue in effect only if approved annually by a vote of the Trustees and
of those Trustees who are not interested persons, cast in person at a
meeting called for that purpose. The New Management Contract, New
Sub-Advisory Agreement, and New Plan 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.
Assuming the Plan of Reorganization is approved, it is currently
contemplated that the Reorganization will become effective at the close of
business on December 20, 1997 (the Closing Date). However, the
Reorganization may become effective at such later date as the parties may
agree in writing.
The obligations of Beacon Street Trust 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. Fund shareholders who are receiving payment under a
withdrawal plan with respect to Fund Shares will retain the same rights and
privileges as to Trust Series Shares under the Plan of Reorganization.
Similarly, no further action will be necessary in order to continue any
automatic investment plan or retirement plan currently maintained by a Fund
shareholder with respect to Fund Shares.
EXPENSES.The Fund and the Series shall each be responsible for all of
their respective expenses of the Reorganization, estimated at $______ in
the aggregate.
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 a Delaware
business trust is in the best interest of the Fund's shareholders. The
Trustees recommend that the Fund's shareholders vote FOR the approval of
the Plan of Reorganization as described above. Such a vote encompasses
approval of the reorganization of the Fund to a separate series of a
Delaware business trust; temporary waiver of certain investment limitations
of the Fund to permit the Reorganization (see "Temporary Waiver of
Investment Restrictions" on page __); authorization of the Beacon Street
Trust, as sole shareholder of the Series, to approve (i) a Management
Contract for the Series between the Trust and FMR, (ii) a Sub-Advisory
Agreement for the Series between FMR and FMR Texas, and (iii) a
Distribution and Service Plan under Rule 12b-1, identical to the contract
or plan, as the case may be, in effect with the Fund immediately prior to
the Closing Date (including as the Management Contract may be modified
pursuant to a vote of shareholders of the fund as proposed in 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 fund of Beacon Street Trust.
9. TO APPROVE AN AGREEMENT AND PLAN PROVIDING FOR THE REORGANIZATION OF
SPARTAN NEW JERSEY MUNICIPAL MONEY MARKET FUND FROM A SEPARATE SERIES OF
ONE DELAWARE BUSINESS TRUST TO ANOTHER.
The Board of Trustees has approved an Agreement and Plan of Reorganization
(the Plan of Reorganization) in the form attached to this Proxy Statement
as Exhibit 3. The Plan of Reorganization provides for a reorganization of
Spartan New Jersey Municipal Money Market Fund (the Fund) from a separate
series of Fidelity Beacon Street Trust (Beacon Street Trust), a Delaware
business trust, to a newly-established, separate series of Fidelity Court
Street Trust II (the Trust), also a Delaware business trust (the
Reorganization).
The investment objective, policies, and limitations of the Fund will not
change except as approved by shareholders and as described in this proxy
statement. A separate series of 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 (except as they
may be modified pursuant to a vote of the shareholders as proposed in this
proxy statement). Since both Beacon Street Trust 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 except with regard to shareholder voting rights (as
described below), nor will the Reorganization affect the operation of the
Fund in a material manner. Currently, 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. Shareholder
voting rights for the Fund are based on the number of shares owned
(share-based voting). Currently, the Trust has share-based voting. However,
the Trust has filed a proxy statement with the Securities and Exchange
Commission proposing to shareholders of the Trust to adopt dollar-based
voting, which would provide for shareholder voting rights that are based on
the total dollar interest in a fund. While the differences between the
shareholder voting rights would have no bearing on matters affecting only
one fund in a trust, on matters requiring trust-wide votes where all funds
in a trust are required to vote, dollar-based voting provides shareholders
voting power that is proportionate to their economic interest whereas
share-based voting may provide shareholders who own shares with a lower net
asset value than other funds in the trust with a disproportionate ability
to affect the vote relative to shareholders of the other funds in the
trust. After the Reorganization, the voting rights of Fund shareholders
will change to reflect those of the Series. For more information regarding
voting rights of shareholders of the Fund, refer to the section of the
Fund's Statement of Additional Information called "Description of the
Trust." The Trust's fiscal year end is November 30, which is different than
that of the Beacon Street Trust. The Trustees may change the fiscal year
end of the Trust at their discretion in the future.
FMR, the Fund's investment adviser, will be responsible for the
investment management of the Series, subject to the supervision of the
Board of Trustees, under a management contract identical to the contract in
effect between FMR and the Fund (the Present Management Contract);
similarly, FMR Texas Inc. (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 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 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 Beacon Street Trust, which has two series of shares or funds.
The Board of Trustees unanimously recommends reorganization 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 Beacon Street Trust 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 proposal to present the Plan of Reorganization to shareholders was
approved by the Board of Trustees of Beacon Street Trust, including all of
the Trustees who are not interested persons of FMR, on [Date of Board
Approval]. The Board of Trustees recommend 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 _); and authorization of Beacon Street Trust, as sole
shareholder of the Series, to approve (i) a Management Contract for the
Series between the Trust and FMR, (ii) the Sub-Advisory Agreement between
FMR and FMR Texas, with respect to the Series and (iii) the Distribution
and Service Plan under Rule 12b-1, identical to the contract or Plan, as
the case may be, in effect with the Fund immediately prior to the Closing
Date (including as the Management Contract may be modified pursuant to a
vote of shareholders of the fund as proposed in 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 Beacon Street Trust.
SUMMARY OF THE PLAN OF REORGANIZATION. The following discussion summarizes
the important terms of the Plan of Reorganization. This summary is
qualified in its entirety by reference to the Plan of Reorganization
itself, which is attached as Exhibit 3 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 in the Series (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 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 Beacon Street Trust as the then sole
initial shareholder of the Series to approve (i) a Management Contract with
FMR for the Series (the New Management Contract), (ii) the Sub-Advisory
Agreement between FMR and FMR Texas with respect to the Series (the New
Sub-Advisory Agreement), and (iii) the Distribution and Service Plan (the
New Plan) under Rule 12b-1 with respect to the Series, identical to the
contracts or plans, as the case may be, in effect with the Fund
immediately prior to the Closing Date (including as the Management Contract
may be modified pursuant to a vote of shareholders of the fund as proposed
in 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 to be retired by written
instrument signed by a majority of the other Trustees or who is unable to
serve due to physical or mental incapacity by reason of disease or
otherwise, death, or for any other reason, may be retired; and (d) a
Trustee may be removed at any Special Meeting of the shareholders by a vote
of two-thirds of the outstanding shares of 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
Plan will take effect on the Closing Date. The New Management Contract, the
New Sub-Advisory Agreement, and the New Plan will continue in force until
May 31, 1998, May 31, 1998, and April 30, 1998, respectively. 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 vote of a majority of the Trustees or by the vote of
a majority of the outstanding shares of the Series. The New Plan will
continue in effect only if approved annually by a vote of the Trustees and
of those Trustees who are not interested persons, cast in person at a
meeting called for that purpose. The New Management Contract, New
Sub-Advisory Agreement, and New Plan 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.
Assuming the Plan of Reorganization is approved, it is currently
contemplated that the Reorganization will become effective at the close of
business on January 21, 1998 (the Closing Date). However, the
Reorganization may become effective at such later date as the parties may
agree in writing.
The obligations of Beacon Street Trust 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. Fund shareholders who are receiving payment under a
withdrawal plan with respect to Fund Shares will retain the same rights and
privileges as to Trust Series Shares under the Plan of Reorganization.
Similarly, no further action will be necessary in order to continue any
automatic investment plan or retirement plan currently maintained by a Fund
shareholder with respect to Fund Shares.
EXPENSES. 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 a Delaware
business trust is in the best interest of the Fund's shareholders. The
Trustees recommend that the Fund's shareholders vote FOR the approval of
the Plan of Reorganization as described above. Such a vote encompasses
approval of the reorganization of the Fund to a separate series of a
Delaware business trust; temporary waiver of certain investment limitations
of the Fund to permit the Reorganization (see "Temporary Waiver of
Investment Restrictions" on page __); authorization of the Beacon Street
Trust, as sole shareholder of the Series, to approve (i) a Management
Contract for the Series between the Trust and FMR, (ii) a Sub-Advisory
Agreement for the Series between FMR and FMR Texas, and (iii) a
Distribution and Service Plan under Rule 12b-1, identical to the contract
or plan, as the case may be, in effect with the Fund immediately prior to
the Closing Date (including as the Management Contract, Sub-Advisory
Agreement, or the Distribution and Service Plan may be modified pursuant to
a vote of shareholders of the fund as proposed in 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 fund of Beacon Street Trust.
ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS
The primary purpose of Proposals 10 through 12 is to revise several of
Spartan New Jersey Municipal Money Market Fund's investment limitations to
conform to limitations which are standard for similar types of funds
managed by FMR. The Board of Trustees asked FMR to analyze the various
fundamental and non-fundamental investment limitations of the Fidelity
funds, and, where practical and appropriate to a fund's investment
objective and policies, propose to shareholders adoption of standard
fundamental limitations and elimination of certain other fundamental
limitations. Generally, when fundamental limitations are eliminated,
Fidelity's standard non-fundamental limitations replace them. By making
these limitations non-fundamental, the Board of Trustees may amend a
limitation as they deem appropriate, without seeking shareholder approval.
The Board of Trustees would amend the limitations to respond, for instance,
to developments in the marketplace, or changes in federal or state law. The
costs of shareholder meetings called for these purposes are generally borne
by a fund and its shareholders.
It is not anticipated that these proposals will substantially affect the
way the fund is currently managed. However, FMR is presenting them to you
for your approval because FMR believes that increased standardization will
help to promote operational efficiencies and facilitate monitoring of
compliance with fundamental and non-fundamental investment limitations.
Although adoption of a new or revised limitation is not likely to have any
impact on the current investment techniques employed by the fund, it will
contribute to the overall objectives of standardization.
10. TO AMEND SPARTAN NEW JERSEY MUNICIPAL MONEY MARKET FUND'S FUNDAMENTAL
INVESTMENT LIMITATION CONCERNING THE ISSUANCE OF SENIOR SECURITIES.
The fund's current fundamental investment limitation regarding the
issuance of senior securities states:
"The fund may not issue bonds or any other class of securities preferred
over shares of the fund in respect of the fund's assets or earnings;
provided that Fidelity Beacon Street Trust may issue additional series of
shares in accordance with its Declaration of Trust."
The Trustees recommend that shareholders vote to replace this limitation
with the following fundamental investment limitation governing the issuance
of senior securities:
"The fund may not issue senior securities, except as permitted under the
Investment Company Act of 1940."
The primary purpose of the proposal is to revise the fund's fundamental
senior securities limitation to conform to a limitation that is expected to
become standard for all funds managed by FMR. (See "Adoption of
Standardized Investment Limitations" on page 39.) If the proposal is
approved, the new fundamental senior securities limitation cannot be
changed without the approval of shareholders.
Adoption of the proposed limitation on senior securities is not expected
to affect the way in which the fund is managed, the investment performance
of the fund, or the securities or instruments in which the fund invests.
However, the proposed limitation clarifies that the fund may issue senior
securities to the extent permitted under the 1940 Act.
Although the definition of a "senior security" involves complex statutory
and regulatory concepts, a senior security is generally thought of as an
obligation of a fund which has a claim to the fund's assets or earnings
that takes precedence over the claims of the fund's shareholders. The 1940
Act generally prohibits mutual funds from issuing senior securities;
however, mutual funds are permitted to engage in certain types of
transactions that might be considered "senior securities" as long as
certain conditions are satisfied. For example, a transaction which
obligates a fund to pay money at a future date (e.g., the purchase of
securities for settlement on a date that is further away than the normal
settlement period) may be considered a "senior security." A mutual fund,
however, is permitted to enter into this type of transaction if it
maintains a segregated account containing liquid securities in an amount
equal to its obligation to pay cash for the securities at a future date.
The fund utilizes transactions that may be considered "senior securities"
only in accordance with applicable regulatory requirements under the 1940
Act.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the fund and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the changes will become effective
when the disclosure is revised to reflect the changes. If the proposal is
not approved by the shareholders of the fund, the fund's current limitation
will remain unchanged.
11. TO AMEND SPARTAN NEW JERSEY MUNICIPAL MONEY MARKET FUND'S FUNDAMENTAL
INVESTMENT LIMITATION CONCERNING BORROWING.
The fund's current fundamental investment limitation concerning borrowing
states:
"The fund may not borrow money, except that the fund may borrow money for
temporary or emergency purposes (not for leveraging or investment) in an
amount not exceeding 33 1/3% of the value of its total assets (including
the amount borrowed) less liabilities (other than borrowings). Any
borrowings that come to exceed 33 1/3% of the value of the fund's total
assets by reason of a decline in net assets will be reduced within three
days (exclusive of Sundays and holidays) to the extent necessary to comply
with the 33 1/3% limitation."
The Trustees recommend that shareholders of the fund vote to replace the
fund's current fundamental investment limitation with the following amended
fundamental investment limitation governing borrowing:
"The fund may not borrow money, except that the fund may borrow money for
temporary or emergency purposes (not for leveraging or investment) in an
amount not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings that
come to exceed this amount will be reduced within three days (not including
Sundays and holidays) to the extent necessary to comply with the 33 1/3%
limitation."
The primary purpose of the proposal is to revise the fund's fundamental
borrowing limitation to conform to a limitation that is expected to become
standard for all funds managed by FMR. (See "Adoption of Standardized
Investment Limitations" on page 39.) If the proposal is approved, the
amended fundamental borrowing limitation cannot be changed without the
approval of shareholders.
Adoption of the proposed fundamental limitation concerning borrowing is
not expected to affect the way in which the fund is managed, the investment
performance of the fund, or the securities or instruments in which the fund
invests. However, the proposed fundamental limitation would clarify one
point. Under the proposed limitation, the fund must reduce borrowings that
come to exceed 33 1/3% of its total assets for any reason. While under the
current limitation, the fund must reduce borrowings that come to exceed 33
1/3% of total assets only when there is a decline in net assets.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the fund and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the changes will become effective
when the disclosure is revised to reflect the changes. If the proposal is
not approved by the shareholders of the fund, the fund's current limitation
will remain unchanged.
12. TO AMEND SPARTAN NEW JERSEY MUNICIPAL MONEY MARKET FUND'S FUNDAMENTAL
INVESTMENT LIMITATION CONCERNING THE CONCENTRATION OF ITS INVESTMENTS IN A
SINGLE INDUSTRY.
The fund's current fundamental investment limitation concerning the
concentration of its investments within a single industry states:
"The fund may not purchase the securities of any issuer (other than
securities issued or guaranteed by the U.S. government or any of its
agencies, instrumentalities, territories or possessions, or issued or
guaranteed by a state government or political subdivision thereof) if, as a
result, more than 25% of the value of its total assets would be invested in
securities of companies having their principal business activities in the
same industry."
The Trustees recommend that shareholders of the fund vote to replace this
fundamental investment limitation with the following amended fundamental
investment limitation governing concentration:
"The fund may not purchase the securities of any issuer (other than
securities issued or guaranteed by the U.S. Government or any of its
agencies or instrumentalities, or tax-exempt obligations issued or
guaranteed by a U.S. territory or possession or a state or local
government, or a political subdivision of any of the foregoing) if, as a
result, more than 25% of the fund's total assets would be invested in
securities of companies whose principal business activities are in the same
industry."
The primary purpose of the proposal is to revise the fund's fundamental
concentration limitation to conform to a limitation which is expected to
become standard for all municipal funds managed by FMR. (See "Adoption of
Standardized Investment Limitations" on page 39.) If the proposal is
approved, the new fundamental concentration limitation could not be changed
without the approval of shareholders.
Adoption of the proposed amended limitation on concentration is not
expected to affect the way the fund is managed, the investment performance
of the fund, or the securities or instruments in which the fund invests.
The proposed amended limitation is not substantially different from the
current policy and is not likely to have any impact on the investment
techniques employed by the fund.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the fund and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the changes will become effective
when the disclosure is revised to reflect the changes. If the proposal is
not approved by the shareholders of the fund, the fund's current limitation
will remain unchanged.
OTHER BUSINESS
The Board knows of no other business to be brought before the Meeting.
However, if any other matters properly come before the Meeting, it is the
intention that proxies that do not contain specific instructions to the
contrary will be voted on such matters in accordance with the judgment of
the persons therein designated.
ACTIVITIES AND MANAGEMENT OF FMR
FMR, a corporation organized in 1946, serves as investment adviser to a
number of investment companies. Information concerning the advisory fees,
net assets, and total expenses of funds with investment objectives similar
to Fidelity Municipal Money Market Fund and advised by FMR is contained in
the Table of Average Net Assets and Expense Ratios in Exhibit 4 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 and
of the Executive Committee; Robert C. Pozen, President; and Peter S. Lynch,
Vice Chairman. With the exception of Robert C. Pozen, who is proposed for
election as a Trustee, each of the Directors is also a Trustee of the
trust. Messrs. Johnson 3d, Pozen, J. Gary Burkhead, John H. Costello,
Arthur S. Loring, Thomas D. Maher, Thomas Simpson, Richard A. Silver,
Leonard M. Rush, Fred L. Henning, Jr., Boyce Greer, Diane McLaughlin, and
Scott Orr are currently officers of the trust and officers or employees of
FMR or FMR Corp. With the exception of Mr. Costello, Mr. Maher, Mr.
Simpson, Mr. Silver, and Mr. Rush, [CONFIRM WITH PROXY COORDINATOR: Ms.
McLaughlin, and Mr. Orr], all of these persons hold or have options to
acquire stock of FMR Corp. The principal business address of each of the
Directors of FMR is 82 Devonshire Street, Boston, Massachusetts 02109.
All of the stock of FMR is owned by its parent company, FMR Corp., 82
Devonshire Street, Boston, Massachusetts 02109, which was organized on
October 31, 1972. Members of Mr. Edward C. Johnson 3d's family are the
predominant owners of a class of shares of common stock, representing
approximately 49% of the voting power of FMR Corp., and, therefore, under
the 1940 Act may be deemed to form a controlling group with respect to FMR
Corp.
During the period November 1, 1996 through July 31, 1997, [the following
transactions/no transactions] were entered into by Trustees and nominees as
Trustee of the trust involving more than 1% of the voting common,
non-voting common and equivalent stock, or preferred stock of FMR Corp.
PRESENT MANAGEMENT CONTRACT
Fidelity Municipal Money Market 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 5.
In addition to the management fee payable to FMR, the fund reimburses UMB
Bank, n.a. (UMB) for its services as the fund's custodian and transfer
agent. Although the fund's current management contract provides that the
fund will pay for typesetting, printing, and mailing prospectuses,
statements of additional information, notices, and reports to shareholders,
the trust, on behalf of the fund has entered into a revised transfer agent
agreement with UMB, pursuant to which UMB bears the costs of providing
these services to existing shareholders. Other expenses paid by the fund
include interest, taxes, brokerage commissions, and the fund's
proportionate share of insurance premiums and Investment Company Institute
dues. The fund is also liable for such non-recurring expenses as may arise,
including costs of any litigation to which the fund may be a party, and any
obligation it may have to indemnify the trust's officers and Trustees with
respect to litigation.
UMB has entered into a sub-contract with Fidelity Service Company, Inc.
(FSC), an affiliate of FMR, under the terms of which FSC performs the
processing activities associated with providing transfer agent and
shareholder servicing functions for the fund. Under the sub-contract, FSC
bears the expense of typesetting, printing, and mailing prospectuses,
statements of additional information, and all other reports, notices, and
statements to shareholders, except proxy statements. FSC also pays all
out-of-pocket expenses associated with transfer agent services. Transfer
agent fees and pricing and bookkeeping fees, including reimbursement for
out-of-pocket expenses, paid to FSC by UMB on behalf of the fund for the
fiscal year ended October 31, 1996 were $6,790,000.
The fund also has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer registered
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. The distribution agreement calls
for FDC to use all reasonable efforts, consistent with its other business,
to secure purchasers for shares of the fund, which are continuously offered
at net asset value per share. Promotional and administrative expenses in
connection with the offer and sale of shares are paid by FMR.
FMR is the fund's manager pursuant to a management contract dated
November 1, 1993, which was approved by shareholders on November 17, 1993.
Shareholders approved the addition of two new fee breakpoints for group
asset levels above $120 billion: for group assets of $120 to $174 billion,
the fee rate was reduced from .150% to .145%, and for group assets over
$174 billion, the fee rate was reduced from .150% to .140%.
For the services of FMR under the contract, the fund pays FMR a monthly
management fee composed of the sum of two elements: a group fee rate and an
individual fund fee rate.
The group fee rate is based on the monthly average net assets of all of
the registered investment companies with which FMR has management
contracts.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE
RATES
Average Annualized Group Effective
Group Rate Net Annual
Assets Assets Fee Rate
$0 - 3 billion .3700% $ 0.5 .3700%
billion
3 - 6 .3400 25 .2664
6 - 9 .3100 50 .2188
9 - 12 .2800 75 .1986
12 - 15 .2500 100 .1869
15 - 18 .2200 125 .1793
18 - 21 .2000 150 .1736
21 - 24 .1900 175 .1695
24 - 30 .1800 200 .1658
30 - 36 .1750 225 .1629
36 - 42 .1700 250 .1604
42 - 48 .1650 275 .1583
48 - 66 .1600 300 .1565
66 - 84 .1550 325 .1548
84 - 120 .1500 350 .1533
120 - 174 .1450 400 .1507
174 - 228 .1400
228 - 282 .1375
282 - 336 .1350
Over 336 .1325
Under the fund's current management contract with FMR, the group fee rate
is based on a schedule with breakpoints ending at .1400% for average group
assets in excess of $174 billion. Prior to December 1, 1993, the group fee
rate breakpoints shown above for average group assets in excess of $120
billion and under $228 billion were voluntarily adopted by FMR on January
1, 1992. The additional breakpoints shown above for average group assets in
excess of $228 billion were voluntarily adopted by FMR on November 1, 1993.
On August 1, 1994, FMR voluntarily revised the prior extensions to the
group fee rate schedule, and added new breakpoints for average group assets
in excess of $156 billion and under $372 billion as shown in the schedule
below, pending shareholder approval of a new management contract reflecting
the revised schedule. The revised group fee rate schedule provides for
lower management fee rates as FMR's assets under management increase. The
revised group fee rate schedule was identical to the above schedule for
average group assets under $156 billion.
On January 1, 1996, FMR voluntarily added new breakpoints to the revised
schedule for average group assets in excess of $372 billion, pending
shareholder approval of a new management contract reflecting the revised
schedule and additional breakpoints. The revised group fee rate schedule
and its extensions provide for lower management fee rates as FMR's assets
under management increase. For average group assets in excess of $156
billion, the revised group fee rate schedule with additional breakpoints
voluntarily adopted by FMR is as follows:
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE
RATES
Average Group Annualized Group Net Effective
Assets Rate Assets Annual
Fee Rate
120 - $156 .1450% $ 150 billion .1736%
billion
156 - 192 .1400 175 .1690
192 - 228 .1350 200 .1652
228 - 264 .1300 225 .1618
264 - 300 .1275 250 .1587
300 - 336 .1250 275 .1560
336 - 372 .1225 300 .1536
372 - 408 .1200 325 .1514
408 - 444 .1175 350 .1494
444 - 480 .1150 375 .1476
480 - 516 .1125 400 .1459
Over 516 .1100 425 .1443
450 .1427
475 .1413
500 .1399
525 .1385
550 .1372
The group fee rate is calculated on a cumulative basis pursuant to the
graduated fee rate schedule shown above on the left. The schedule above on
the right shows the effective annual group fee rate at various asset
levels, which is the result of cumulatively applying the annualized rates
on the left. For example, the effective annual fee rate at $435 billion of
group net assets - the approximate level for October 1996 - was .1437%,
which is the weighted average of the respective fee rates for each level of
group net assets up to $435 billion.
The individual fund fee rate is 0.15%. Based on the average group net
assets of the funds advised by FMR for October 1996, the annual management
fee rate would be calculated as follows:
Group Fee Rate Individual Fund Management Fee
Fee Rate Rate
0.1437% + 0.15% = 0.2937%
One-twelfth of this annual management fee rate is applied to the fund's
net assets averaged for the month, giving a dollar amount, which is the fee
for that month.
During the fiscal year ended October 31, 1996, FMR received $10,874,000
for its services as investment adviser to the fund. This fee was equivalent
to 0.30% of the average net assets of the fund.
FMR may, from time to time, voluntarily reimburse all or a portion of the
fund's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to be
repaid for these expense reimbursements in the amount that expenses fall
below the limit prior to the end of the fiscal year. Expense reimbursements
by FMR will increase the fund's total returns and yield and repayment of
the reimbursement by the fund will lower its total returns and yield.
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 Fidelity Municipal Money
Market Fund 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 4 beginning on
page __.
The Directors of FMR Texas are Edward C. Johnson 3d, Chairman, and Robert
C. Pozen, President. Mr. Johnson 3d also is President and a Trustee of the
trust and of other funds advised by FMR; Chairman, Chief Executive Officer,
President, and a Director of FMR Corp.; Chairman of the Board and of the
Executive Committee of FMR; a Director of FMR; and Chairman and Director of
Fidelity Management & Research (U.K.) Inc. (FMR U.K.) and Fidelity
Management & Research (Far East) Inc. (FMR Far East). In addition, Mr.
Pozen is Senior Vice President and a Trustee of other funds advised by FMR;
a Director of FMR Corp.; 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 each fund by FMR pursuant to authority contained in the fund's
management contract.
FMR may place agency transactions with National Financial Services
Corporation (NFSC) an indirect subsidiary of FMR Corp., if the commissions
are fair, reasonable, and comparable to commissions charged by
non-affiliated, qualified brokerage firms for similar services.
During the fiscal year ended October 1996, the funds paid no brokerage
commissions to affiliated brokers.
SUBMISSION OF CERTAIN SHAREHOLDER PROPOSALS
The trust does not hold annual shareholder meetings. Shareholders wishing
to submit proposals for inclusion in a proxy statement for a subsequent
shareholder meeting should send their written proposals to the Secretary of
the Trust, 82 Devonshire Street, Boston, Massachusetts 02109.
NOTICE TO BANKS, BROKER-DEALERS AND
VOTING TRUSTEES AND THEIR NOMINEES
Please advise the trust, in care of [CHECK WITH MARKETING TO DETERMINE WHO
CONTACT WILL BE.], whether other persons are beneficial owners of shares
for which proxies are being solicited and, if so, the number of copies of
the Proxy Statement and Annual Reports you wish to receive in order to
supply copies to the beneficial owners of the respective shares.
EXHIBIT 1
((Underlined)) disclosure will be added; [bracketed] disclosure will be
deleted.
FORM OF
MANAGEMENT CONTRACT
between
FIDELITY BEACON STREET TRUST:
((FIDELITY MUNICIPAL MONEY MARKET FUND))
[FIDELITY TAX-EXEMPT MONEY MARKET TRUST]
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
((AGREEMENT AMENDED and RESTATED as of)) [Modification made] this [1st]
((______)) day of [November 1993] ((____ _____, 19__)), by and between
Fidelity Beacon Street Trust, a Delaware business trust which may issue one
or more series of shares of beneficial interest (hereinafter called the
"Fund"), ((on behalf of Fidelity Municipal Money Market Fund (hereinafter
called the "Portfolio"),)) and Fidelity Management & Research Company, a
Massachusetts corporation (hereinafter called the (("Adviser")))
["Advisor"] ((as set forth in its entirety below.))
[Required authorization and approval by shareholders and Trustees having
been obtained, the Fund, on behalf of the Portfolio, and the Advisor hereby
consent, pursuant to Paragraph 6 of the existing Management Contract dated
December 30, 1991, to a modification of said Contract in the manner set
forth below. The Modified Management Contract shall, when executed by duly
authorized officers of the Fund and the Advisor, take effect on the later
of November 1, 1993 or the first day of the month following approval.]
1. (a) Investment Advisory Services. The ((Adviser)) [Advisor] undertakes
to act as investment ((adviser)) [advisor] 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)) [Advisor]. The ((Adviser)) [Advisor] 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)) [Advisor] and of all personnel of the Fund or the
((Adviser)) [Advisor] performing services relating to research, statistical
and investment activities. The ((Adviser)) [Advisor] 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)) [Advisor] 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)) [Advisor] 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)) [Advisor] 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)) [Advisor] may deem to be
desirable. The ((Adviser)) [Advisor] 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)) [Advisor]
shall, subject to review by the Board of Trustees, furnish such other
services as the ((Adviser)) [Advisor] shall from time to time determine to
be necessary or useful to perform its obligations under this Contract.
(c) The ((Adviser)) [Advisor] [, 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))
[Advisor], which may include brokers or dealers affiliated with the
((Adviser)) [Advisor]. The ((Adviser)) [Advisor] shall use its best efforts
to seek to execute portfolio transactions at prices which are advantageous
to the Portfolio and at commission rates which are reasonable in relation
to the benefits received. In selecting brokers or dealers qualified to
execute a particular transaction, brokers or dealers may be selected who
also provide brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934) to the Portfolio
and/or the other accounts over which the ((Adviser)) [Advisor] or its
affiliates exercise investment discretion. The ((Adviser)) [Advisor] is
authorized to pay a broker or dealer who provides such brokerage and
research services a commission for executing a portfolio transaction for
the Portfolio which is in excess of the amount of commission another broker
or dealer would have charged for effecting that transaction if the
((Adviser)) [Advisor] determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination may
be viewed in terms of either that particular transaction or the overall
responsibilities which the ((Adviser)) [Advisor] and its affiliates have
with respect to accounts over which they exercise investment discretion.
The Trustees of the [Trust] ((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)) [Advisor] shall, in acting hereunder, be an independent
contractor. The ((Adviser)) [Advisor] 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)) [Advisor] as
directors, officers or otherwise and that directors, officers and
stockholders of the ((Adviser)) [Advisor] are or may be or become similarly
interested in the Fund, and that the ((Adviser)) [Advisor] may be or become
interested in the Fund as a shareholder or otherwise.
3. The ((Adviser)) [Advisor] will be compensated on the following basis
for the services and facilities to be furnished hereunder. The ((Adviser))
[Advisor] shall receive a monthly management fee, payable monthly as soon
as practicable after the last day of each month, composed of a Group
((Fee)) [fee rate] and an Individual Fund ((Fee.)) [fee rate.]
(a) Group Fee Rate. The Group Fee [rate] ((Rate)) shall be based upon
the monthly average of the net assets of the registered investment
companies having Advisory and Service or Management Contracts with the
((Adviser)) [Advisor] (computed in the manner set forth in the [charter of
each investment company] ((fund's Declaration of Trust or other
organizational document)) ) determined as of the close of business on each
business day throughout the month. The [group fee rate] ((Group Fee Rate))
shall be determined on a cumulative basis pursuant to the following
schedule:
Average Net Assets Annualized Fee Rate (for each level)
$0 - 3 billion .3700%
3 - 6 .3400
6 - 9 .3100
9 - 12 .2800
12 - 15 .2500
15 - 18 .2200
18 - 21 .2000
21 - 24 .1900
24 - 30 .1800
30 - 36 .1750
36 - 42 .1700
42 - 48 .1650
48 - 66 .1600
66 - 84 .1550
84 - 120 .1500
[120 - 174] [.1450]
[Over 174] [.1400]
((120 - 156)) ((.1450))
((156 - 192)) ((.1400))
((192 - 228)) ((.1350))
((228 - 264)) ((.1300))
((264 - 300)) ((.1275))
((300 - 336)) ((.1250))
((336 - 372)) ((.1225))
((372 - 408)) ((.1200))
((408 - 444)) ((.1175))
((444 - 480)) ((.1150))
((480 - 516)) ((.1125))
((Over 516)) ((.1100))
(b) Individual Fund Fee Rate. The Individual Fund [fee rate] ((Fee
Rate)) shall be 0.15%.
The sum of the Group [fee rate] ((Fee Rate)), calculated as described
above to the nearest millionth, and the Individual Fund [fee rate] ((Fee
Rate)) shall constitute the [annual management fee rate] ((Annual
Management Fee Rate)). One-twelfth of the [annual management fee] ((Annual
Management Fee Rate)) shall be applied to the average of the net assets of
the Portfolio (computed in the manner set forth in the [Trust Instrument of
the Fund] ((Fund's Declaration of Trust or other organizational document)))
determined as of the close of business on each business day throughout the
month.
(( (c) ))In case of termination of this [contract] ((Contract)) during
any month, the fee for that month shall be reduced [proportionally]
((proportionately)) on the basis of the number of business days during
which it is in effect, and the fee computed upon the average net assets for
the business days it is so in effect for that month.
4. It is understood that the Portfolio will pay all its expenses, [other
than those expressly stated to be payable by the Advisor hereunder,] which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in
connection with the purchase or sale of securities and other investment
instruments; (iii) fees and expenses of the Fund's Trustees other than
those who are "interested persons" of the Fund or the ((Adviser))
[Advisor]; (iv) legal and audit expenses; (v) custodian, registrar and
transfer agent fees and expenses; (vi) fees and expenses related to the
registration and qualification of the 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)) [Advisor], of 50% of insurance
premiums for fidelity and other coverage; (x) its proportionate share of
association membership dues; (xi) expenses of typesetting for printing
Prospectuses and Statements of Additional Information and supplements
thereto; (xii) expenses of printing and mailing Prospectuses and Statements
of Additional Information and supplements thereto sent to existing
shareholders; and (xiii) such non-recurring or extraordinary expenses as
may arise, including those relating to actions, suits or proceedings to
which the Portfolio is a party and the legal obligation which the Portfolio
may have to indemnify the Fund's Trustees and officers with respect
thereto.
5. The services of the ((Adviser)) [Advisor] to the Portfolio are not to
be deemed exclusive, the ((Adviser)) [Advisor] being free to render
services to others and engage in other activities, provided, however, that
such other services and activities do not, during the term of this
Contract, interfere, in a material manner, with the ((Adviser's))
[Advisor'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)) [Advisor],
the ((Adviser)) [Advisor] shall not be subject to liability to the
Portfolio or to any shareholder of the Portfolio for any act or omission in
the course of, or connected with, rendering services hereunder or for any
losses that may be sustained in the purchase, holding or sale of any
security ((or other investment instrument)).
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Contract shall continue in force until May 31,
[1994] ((1998)) and indefinitely thereafter, but only so long as the
continuance after such date shall be specifically approved at least
annually by vote of the Trustees of the Fund or by vote of a majority of
the outstanding voting securities of the Portfolio.
(b) This Contract may be modified by mutual consent, such consent on the
part of the Fund to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 6, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to the Contract or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment of
any penalty, by action of its Trustees or Board of Directors, as the case
may be, or with respect to the Portfolio by vote of a majority of the
outstanding voting securities of the Portfolio. This Contract shall
terminate automatically in the event of its assignment.
7. The ((Adviser)) [Advisor] is hereby expressly put on notice of the
limitation of shareholder liability as set forth in the Fund's [of Trust
Instrument] ((Declaration of Trust or other organizational document)) and
agrees that the obligations assumed by the Fund pursuant to this Contract
shall be limited in all cases to the Portfolio and its assets, and the
((Adviser)) [Advisor] shall not seek satisfaction of any such obligation
from the shareholders or any shareholder of the Portfolio or [the] ((any))
other Portfolios of the Fund. In addition, the ((Adviser)) [Advisor] shall
not seek satisfaction of any such obligations from the Trustees or any
individual Trustee. The ((Adviser)) [Advisor] understands that the rights
and obligations of any Portfolio under the Declaration of Trust ((or other
organizational document)) are separate and distinct from those of any and
all other Portfolios.
8. This [contract] ((Agreement)) shall be governed by ((,)) and
con((s))trued 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 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 [and their respective seals to be hereunto affixed,]
the parties have caused this instrument to be signed in their behalf by
their respective officers thereunto duly authorized, ((and their respective
seals to be hereunto affixed,)) all as of the date written above.
[SIGNATURE LINES OMITTED]
EXHIBIT 2
FORM OF
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the Agreement) is made as of
the __ day of ____ 1997, [date trustees approved the reorganization] by and
between Fidelity Municipal Money Market Fund (the Fund), a separate series
of Fidelity Beacon Street Trust (Beacon Street Trust) and Fidelity Union
Street Trust II (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
in 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 by 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 (Fund Shares). The Fund shall receive shares of
the Series equal to the number of Fund Shares on the Closing Date (as
defined below). Immediately thereafter, the Fund shall then distribute to
each Fund Shareholder one 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
The Beacon Street Trust on behalf of the Fund represents and warrants as
follows:
(a) The Fund is a series of Beacon Street Trust, 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 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;
(y) 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 April 30, 1997 and those incurred in the
ordinary course of the Fund's business as an investment company since April
30, 1997; and
(z) 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 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 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
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 equal to the value
and number of full and fractional shares of the Fund outstanding at the
time of the closing, as described in paragraph 6, 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 Beacon Street Trust or any officer duly authorized
by them, on the Beacon Street Trust's behalf as the then sole shareholder
of the Series, shall (1) approve (i) a Management Contract between the
Trust on behalf of the Series and FMR, (ii) a Sub-Advisory Agreement
between FMR and FMR Texas Inc., (iii) a Distribution and Service Plan under
Rule 12b-1 under the 1940 Act between the Trust on behalf of the Series and
Fidelity Distributors Corporation (FDC) substantively identical to the plan
and contracts currently in effect with the Fund, except as to the parties
to such plan or contract, (and except as the Management Contract may be
modified pursuant to a vote of the shareholders of the fund pursuant to the
proxy statement distributed in connection with the Special Meeting of Fund
Shareholders (Proxy Statement)) (iv) the independent accountants who
currently serve in that capacity for the Fund, and (v) the adoption of
revised fundamental policies described in Proposal 7 of the Proxy
Statement.
(d) Pursuant to this Agreement, as soon after the Closing Date as is
conveniently practicable (the Liquidation Date), the Fund will
constructively distribute the Trust Series Shares pro rata in proportion to
their respective shares of beneficial interest in 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 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 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, 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, and denomination of full and fractional Fund
Shares outstanding on the Closing Date.
(d) All computations pursuant to this Section shall be made by Fidelity
Service Company, Inc. (FSC), a wholly-owned subsidiary of FMR Corp., in
accordance with its regular practice as pricing agent for the Fund.
5. FEES; EXPENSES
(a) 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) The Fund shall be responsible for all expenses, fees and other
charges, subject to FMR's voluntary expense limitation (2.5% of average net
assets), if applicable. Such expenses shall include, without limitation:
(i) expenses incurred in connection with the entering into and the carrying
out of the provisions of this Agreement; (ii) expenses associated with the
preparation and filing of the Registration Statement under the 1933 Act
covering the Trust Series Shares to be issued pursuant to the provisions of
this Agreement; (iii) registration or qualification fees and expenses of
preparing and filing such forms as are necessary under applicable state
securities laws to qualify the Trust Series Shares to be issued in
connection herewith in each state in which the Fund shareholders are
resident as of the date of the mailing of the Proxy Statement to such
shareholders; (iv) postage; (v) printing; (vi) accounting fees; (vii) legal
fees; and (viii) solicitation costs of the transactions.
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 the Beacon Street Trust and the Trust, 82
Devonshire Street, Boston, Massachusetts, on December 20, 1997, or at such
other place or date as the parties may agree in writing (the Closing Date).
All acts taking place at the Closing shall be deemed to take place
simultaneously as of the Valuation Time or at such other time and/or place
as the parties may agree.
(b) In the event that, on the Closing Date: (i) any of the markets for
securities held by the Fund are closed to trading, or (ii) trading thereon
is restricted, or (iii) trading or reporting of trading on said markets or
elsewhere is disrupted, all so that accurate appraisal of the total net
asset value of the Fund is impracticable, the Closing Date shall be
postponed until the first business day after the day when such trading
shall have been fully resumed and reporting shall have been restored, or
such other date as the parties may agree.
(c) The Fund shall deliver at the Closing a certificate of an authorized
officer stating that it has notified UMB Bank, n.a., as custodian for the
Fund, of the Fund's reorganization to a series of the Trust.
(d) Fidelity Service 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
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.
(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 Beacon Street Trust 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 Beacon Street Trust, certifying that
as of the Valuation Time and the Closing Date all representations and
warranties of the Fund made in this Agreement are true and correct in all
material respects and that the Fund has complied with all the agreements
and satisfied all the conditions on its part to be performed or satisfied
at or prior to such dates;
(b) That the Fund furnishes the Trust with copies of the resolutions,
certified by an officer of Beacon Street Trust, 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;
(e) That the Fund's transfer agent shall deliver to the Trust at the
Closing a certificate setting forth the number of shares of the Fund
outstanding as of the Valuation Time and the name and address of each
holder of record of any such shares and the number of shares held of record
by each such shareholder;
(f) 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;
(g) That the Fund delivers to the Trust a certificate of an officer of
Beacon Street Trust, dated the Closing Date, that there has been no
material adverse change in the Fund's financial position since October 31,
1996, other than changes in the market value of its portfolio securities,
or changes due to net redemptions of its shares, dividends paid, or losses
from operations; and
(h) That all of the issued and outstanding shares of beneficial interest
of the Fund shall have been offered for sale and sold in conformity with
all applicable state securities laws and, to the extent that any audit of
the records of the Fund or its transfer agent by 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 and the assumption of the Fund's liabilities followed by the
distribution of those the Trust Series Shares to the shareholders of the
Fund in liquidation of the Fund;
(iii) No gain or loss will be recognized by the Series on the receipt of
the Fund's assets in exchange solely for the the 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 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
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
A copy of the Trust Instrument of the Trust and Beacon Street Trust is 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 Beacon Street Trust as trustees and not individually and that
the obligations of the Fund and the Series under this instrument are not
binding upon any of 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.
[Signature Lines Omitted]
EXHIBIT 2
FORM OF
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the Agreement) is made as of
the __ day of ____ 1997, [date trustees approved the reorganization] by and
between Spartan New Jersey Municipal Money Market Fund (the Fund), a
separate series of Fidelity Beacon Street Trust (Beacon Street Trust) and
Fidelity Court Street Trust II (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
in 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 by 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 (Fund Shares). The Fund shall receive shares of
the Series equal to the number of Fund Shares on the Closing Date (as
defined below). Immediately thereafter, the Fund shall then distribute to
each Fund Shareholder one 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
The Beacon Street Trust on behalf of the Fund represents and warrants as
follows:
(a) The Fund is a series of Beacon Street Trust, 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 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;
(y) 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 April 30, 1997 and those incurred in the
ordinary course of the Fund's business as an investment company since April
30, 1997; and
(z) 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 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 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
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 equal to the value
and number of full and fractional shares of the Fund outstanding at the
time of the closing, as described in paragraph 6, 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 Beacon Street Trust or any officer duly authorized
by them, on the Beacon Street Trust's behalf as the then sole shareholder
of the Series, shall (1) approve (i) a Management Contract between the
Trust on behalf of the Series and FMR, (ii) a Sub-Advisory Agreement
between FMR and FMR Texas Inc., (iii) a Distribution and Service Plan under
Rule 12b-1 under the 1940 Act between the Trust on behalf of the Series and
Fidelity Distributors Corporation (FDC) substantively identical to the plan
and contracts currently in effect with the Fund, except as to the parties
to such plan or contract, (and except as the Management Contract may be
modified pursuant to a vote of the shareholders of the fund pursuant to the
proxy statement distributed in connection with the Special Meeting of Fund
Shareholders (Proxy Statement)) (iv) the independent accountants who
currently serve in that capacity for the Fund, and (v) the adoption of
revised fundamental policies described in Proposals 4, 6, 10, 11, and 12 of
the Proxy Statement.
(d) Pursuant to this Agreement, as soon after the Closing Date as is
conveniently practicable (the Liquidation Date), the Fund will
constructively distribute the Trust Series Shares pro rata in proportion to
their respective shares of beneficial interest in 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 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 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, 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, and denomination of full and fractional Fund
Shares outstanding on the Closing Date.
(d) All computations pursuant to this Section shall be made by Fidelity
Service Company, Inc. (FSC), a wholly-owned subsidiary of FMR Corp., in
accordance with its regular practice as pricing agent for the Fund.
5. FEES; EXPENSES
(a) 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 the Beacon Street Trust and the Trust, 82
Devonshire Street, Boston, Massachusetts, on January 21, 1998, or at such
other place or date as the parties may agree in writing (the Closing Date).
All acts taking place at the Closing shall be deemed to take place
simultaneously as of the Valuation Time or at such other time and/or place
as the parties may agree.
(b) In the event that, on the Closing Date: (i) any of the markets for
securities held by the Fund are closed to trading, or (ii) trading thereon
is restricted, or (iii) trading or reporting of trading on said markets or
elsewhere is disrupted, all so that accurate appraisal of the total net
asset value of the Fund is impracticable, the Closing Date shall be
postponed until the first business day after the day when such trading
shall have been fully resumed and reporting shall have been restored, or
such other date as the parties may agree.
(c) The Fund shall deliver at the Closing a certificate of an authorized
officer stating that it has notified UMB Bank, n.a., as custodian for the
Fund, of the Fund's reorganization to a series of the Trust.
(d) Fidelity Service 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
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.
(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 Beacon Street Trust 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 Beacon Street Trust, certifying that
as of the Valuation Time and the Closing Date all representations and
warranties of the Fund made in this Agreement are true and correct in all
material respects and that the Fund has complied with all the agreements
and satisfied all the conditions on its part to be performed or satisfied
at or prior to such dates;
(b) That the Fund furnishes the Trust with copies of the resolutions,
certified by an officer of Beacon Street Trust, 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;
(e) That the Fund's transfer agent shall deliver to the Trust at the
Closing a certificate setting forth the number of shares of the Fund
outstanding as of the Valuation Time and the name and address of each
holder of record of any such shares and the number of shares held of record
by each such shareholder;
(f) 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;
(g) That the Fund delivers to the Trust a certificate of an officer of
Beacon Street Trust, dated the Closing Date, that there has been no
material adverse change in the Fund's financial position since October 31,
1996, other than changes in the market value of its portfolio securities,
or changes due to net redemptions of its shares, dividends paid, or losses
from operations; and
(h) That all of the issued and outstanding shares of beneficial interest
of the Fund shall have been offered for sale and sold in conformity with
all applicable state securities laws and, to the extent that any audit of
the records of the Fund or its transfer agent by 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 and the assumption of the Fund's liabilities followed by the
distribution of those the Trust Series Shares to the shareholders of the
Fund in liquidation of the Fund;
(iii) No gain or loss will be recognized by the Series on the receipt of
the Fund's assets in exchange solely for the the 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 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
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
A copy of the Trust Instrument of the Trust and Beacon Street Trust is 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 Beacon Street Trust as trustees and not individually and that
the obligations of the Fund and the Series under this instrument are not
binding upon any of 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.
[Signature Lines Omitted]
EXHIBIT 2
FUNDS ADVISED BY FMR - TABLE OF AVERAGE NET ASSETS AND EXPENSE RATIOS (A)
<TABLE>
<CAPTION>
INVESTMENT FISCAL AVERAGE RATIO OF NET
OBJECTIVE AND FUND YEAR END (A) NET ASSETS ADVISORY FEES
(MILLIONS)(B) TO AVERAGE
NET ASSETS
PAID
TO FMR (C)
<S> <C> <C> <C> <C>
MUNICIPAL MONEY MARKET ((yen))
Institutional Tax-Exempt Cash
Portfolios:
Tax-Exempt:
Class I 3/31/96 $ 1,940.2 0.19%*
Class II 3/31/96** 0.6 0.20(dagger)*
Class III 3/31/96** 2.6 0.20(dagger)*
Daily Money Fund: Capital Reserves: 7/31/96 131.6 0.29*
Municipal Money Market
Spartan Arizona Municipal Money 8/31/96 66.9 0.22*
Market
Spartan Municipal Money Market 8/31/96 2,280.1 0.39*
Daily Tax-Exempt Money 10/31/96 521.4 0.40*
Municipal Money Market 10/31/96 3,673.6 0.30
Spartan New Jersey Municipal 10/31/96 491.1 0.35*
Money Market
Connecticut Municipal Money Market 11/30/96 330.7 0.40
New Jersey Municipal Money Market 11/30/96 436.4 0.40
Spartan Connecticut Municipal 11/30/96 180.9 0.50
Money Market
Spartan Florida Municipal Money 11/30/96 391.7 0.50
Market
Michigan Municipal Money Market 12/31/96 235.5 0.40
Ohio Municipal Money Market 12/31/96 311.8 0.40
Spartan Pennsylvania Municipal 12/31/96 237.1 0.50
Money Market
Massachusetts Municipal Money 1/31/97 877.1 0.39
Market
New York Municipal Money Market 1/31/97 826.6 0.40
Spartan Massachusetts Municipal 1/31/97 574.4 0.50
Money Market
Spartan New York Municipal 1/31/97 703.2 0.50
Money Market
California Municipal Money Market 2/28/97 742.8 0.39
Spartan California Municipal Money 2/28/97 1,343.5 0.35*
Market
</TABLE>
(a) All data is as of the fiscal year end noted.
(b) Average net assets are computed on the basis of average net assets of
each fund or class at the close of business on each business day throughout
its fiscal period.
(c) Reflects reductions for any expense reimbursement paid by or due from
FMR pursuant to voluntary or state expense limitations. Funds so affected
are indicated by an (*).
(dagger) Annualized
** 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.
Vote this proxy card TODAY! Your prompt response will
save your fund the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------------
- --------------------
FIDELITY BEACON STREET TRUST: FIDELITY MUNICIPAL MONEY MARKET FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring, and Ralph F. Cox, or any one or more of them,
attorneys, with full power of substitution, to vote all shares of Fidelity
Beacon Street Trust as indicated above 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 November 19,
1997 at 9:00 a.m. and at any adjournments thereof. All powers may be
exercised by a majority of said proxy holders or substitutes voting or
acting or, if only one votes and acts, then by that one. This Proxy shall
be voted on the proposals described in the Proxy Statement as specified on
the reverse side. Receipt of the Notice of the Meeting and the
accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1997
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
010, 423 HH
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- --------------------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the 12 nominees specified below as [ ] FOR all nominees [ ] 1.
Trustees: Ralph F. Cox, Phyllis Burke Davis, Robert listed (except as WITHHOLD
M. Gates, Edward C. Johnson 3d, E. Bradley Jones, marked to the contrary authority to
Donald J. Kirk, Peter S. Lynch, William O. McCoy, below). vote for all
Gerald C. McDonough, Marvin L. Mann, Robert C. nominees.
Pozen, and Thomas R. Williams (INSTRUCTION: TO
WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE(S), WRITE THE NAME(S) OF THE NOMINEE(S)
ON THE LINE BELOW.)
</TABLE>
__________________________________________________________________________
___________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of Price Waterhouse LLP as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust.
3. To amend the Trust Instrument to provide dollar-based FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
voting rights for shareholders of the trust.
4. To approve an amended management contract for FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
Fidelity Municipal Money Market Fund
5. To amend Fidelity Municipal Money Market Fund's FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
fundamental limitation concerning diversification to
exclude securities of other investment companies from
the limitation.
6. To approve an agreement and plan providing for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
reorganization of Fidelity Municipal Money Market
Fund from a separate series of one Delaware business
trust to another.
</TABLE>
MMM/SNJ-PXC-0997 [cusip # 316048107/fund# 010 ]
Vote this proxy card TODAY! Your prompt response will
save the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------------
- --------------------
FIDELITY BEACON STREET TRUST: SPARTAN NEW JERSEY MUNICIPAL MONEY MARKET
FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring, and Ralph F. Cox, or any one or more of them,
attorneys, with full power of substitution, to vote all shares of Fidelity
Beacon Street Trust as indicated above 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 November 19,
1997 at 9:00 a.m. and at any adjournments thereof. All powers may be
exercised by a majority of said proxy holders or substitutes voting or
acting or, if only one votes and acts, then by that one. This Proxy shall
be voted on the proposals described in the Proxy Statement as specified on
the reverse side. Receipt of the Notice of the Meeting and the
accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1997
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
010, 423 HH
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- --------------------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the 12 nominees specified below as [ ] FOR all nominees [ ] 1.
Trustees: Ralph F. Cox, Phyllis Burke Davis, Robert listed (except as WITHHOLD
M. Gates, Edward C. Johnson 3d, E. Bradley Jones, marked to the contrary authority to
Donald J. Kirk, Peter S. Lynch, William O. McCoy, below). vote for all
Gerald C. McDonough, Marvin L. Mann, Robert C. nominees.
Pozen, and Thomas R. Williams (INSTRUCTION: TO
WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE(S), WRITE THE NAME(S) OF THE NOMINEE(S)
ON THE LINE BELOW.)
</TABLE>
__________________________________________________________________________
___________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of Price Waterhouse LLP as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust.
3. To amend the Trust Instrument to provide dollar-based FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
voting rights for shareholders of the trust.
4. To adopt a new fundamental policy for Spartan New FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
Jersey Municipal Money Market Fund permitting the
fund to invest all of its assets in another open-end
investment company with substantially the same
investment objective and policies.
5. To amend Spartan New Jersey Municipal Money FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
Market Fund's fundamental investment limitation
concerning real estate.
6. To approve an agreement and plan providing for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
reorganization of Spartan New Jersey Municipal
Money Market Fund from a separate series of one
Delaware business trust to another.
7. To amend Spartan New Jersey Municipal Money FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
Market Fund's fundamental investment limitation
concerning the issuance of senior securities.
8. To amend Spartan New Jersey Municipal Money FOR [ ] AGAINST [ ] ABSTAIN [ ] 8.
Market Fund's fundamental investment limitation
concerning borrowing.
9. To amend Spartan New Jersey Municipal Money FOR [ ] AGAINST [ ] ABSTAIN [ ] 9.
Market Fund's fundamental investment limitation
concerning the concentration of its investments in a
single industry.
</TABLE>
MMM/SNJ-PXC-0997 [cusip # 316048206/fund# 423 ]
