FILE NO. 2-34100
FIDELITY SYSTEMATIC INVESTMENT PLANS
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 66
TO
FORM S-6
For registration under the Securities Act of 1933 of Securities of
Unit Investment Trusts Registered on Form N-8B-2.
A. EXACT NAME OF TRUST:
FIDELITY SYSTEMATIC INVESTMENT PLANS:
Destiny New Plans I and Destiny New Plans II
B. NAME OF DEPOSITOR:
FIDELITY DISTRIBUTORS CORPORATION
C. COMPLETE ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES:
82 Devonshire Street
Boston, Massachusetts 02109
D. NAME AND COMPLETE ADDRESS OF AGENT FOR SERVICES:
Eric D. Roiter
Fidelity Distributors Corporation
82 Devonshire Street
Boston, Massachusetts 02109
It is proposed that this filing will become effective (check
appropriate box):
[ ] immediately upon filing pursuant to paragraph (b)
[ X] On April 2, 1999 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(i)
[ ] on ( ) pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on ( ) pursuant to paragraph (a)(ii) of Rule 485
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
CONTENTS OF REGISTRATION STATEMENT FILE NO. 2-34100
PAGE
Facing Sheet 1
Table of Contents 2
Cross-Reference Sheet 3
Prospectus
Signature Page
Exhibits
RECONCILIATION AND TIE OF INFORMATION SHOWN IN
INVESTMENT PLANS PROSPECTUS WITH THAT REQUIRED BY FORM N-8B-2
FORM N-8B-2 CAPTION
ITEM NUMBER REFERENCE
1 (a) Front Cover
(b) Fidelity Systematic Investment Plans
(First Page); General
2 The Sponsor ; Back Cover
3 The Custodian; The Sponsor; Back Cover
4 Back Cover
5 General
6 (a) General; The Custodian
(b) General; The Custodian
7 Not applicable
8 September 30
9 Not applicable
10 (a) How Fidelity Systematic Investment Plans
Can Help You Meet Your Objectives;
General
(b) Distributions
(c) Partial Liquidation of Your Plan;
Systematic Withdrawal Program; Your
Cancellation and Refund Rights;
Terminating Your Plan
(d) Partial Liquidation of Your Plan;
Systematic Withdrawal Program;
Transferring or Assigning Your Rights in
a Plan; Your Cancellation and Refund
Rights; Terminating Your Plan; Plan
Reinstatement; Completed Plans and
Exchanges
(e) Termination of Your Plan by the
Sponsor or Custodian; Partial Liquidation
of Your Plan; Plan Reinstatement
(f) Your Voting Rights
(g) (1)(2) Substitution of the Underlying Investment
FORM N-8B-2 CAPTION
ITEM NUMBER REFERENCE
(3)(4) The Custodian
(h) (1)(2) Substitution of the Underlying Investment
(3)(4) The Custodian
(i) Fees and Expenses
11 Investment Objective of the Funds
12 (a) Investment Objective of the Funds
(b)-(d) Not applicable
(e) Not a pplicable
13 (a) (A)(B) How Fidelity Systematic Investment
Plans Can Help You Meet Your
Objectives ; Fees and Expenses;
Purchasing Two or More Plans at the Same
Time; Changing the Face Amount of Your
Plan; Extended Investment Option; Your
Cancellation and Refund Rights;
Terminating Your Plan; Plan
Reinstatement; The Custodian; The
Sponsor
(C) The Sponsor; The Custodian;
General
(D) How Fidelity Systematic Investment Plans
Can Help You Meet Your Objectives; Fees
and Expenses; Purchasing Two or More
Plans at the Same Time; Changing the Face
Amount of Your Plan; Extended Investment
Option; Your Cancellation and Refund
Rights; Terminating Your Plan; Plan
Reinstatement; The Custodian; The
Sponsor
(b) Fees and Expenses
(c) Fidelity Systematic Investment Plans
(Page 1) ; How Fidelity Systematic
Investment Plans Can Help You Meet Your
Objectives
(d) Purchasing Two or More Plans at the
Same Time; General
(e) ; (f) Not applicable
(g) Fees and Expenses ; Financial
Statements
14 How to Start a Destiny Plan
15 How to Start a Destiny Plan; The
Custodian; The Sponsor
16 Investment Objectives of the Funds;
The Custodian; The Sponsor
17 Partial Liquidation of Your Plan;
Systematic Withdrawal Program; Your
Cancellation and Refund Rights;
Terminating Your Plan; Plan
Reinstatement; Completed Plans and
Exchanges
18 (a) ; (b) Distributions; The Custodian; The Sponsor
(c) Not applicable
(d) Not applicable
19 The Custodia n
FORM N-8B-2 CAPTION
ITEM NUMBER REFERENCE
20 (a- c ) Termination of Your Plan by the
Sponsor or Custodian; General; The
Custodian; Reference is made to the
statements in Exhibit A.(1) filed
herewith.
( d- f) Not applicable
21 Not applicable
22 Reference is made to the statements in
Exhibit A.(1) filed herewith .
23 The Sponsor
24 Not applicable
25 The Sponsor
26 (a) Financial Statements
(b) Not applicable
27 The Sponsor
28 The Sponsor
29 The Sponsor
30 Not applicable
31 Not applicable
32 Not applicable
33 Not applicable
34 Not applicable
35 ( a)(b ) General
( c ) Not applicable
36 Not applicable
37 Not applicable
38 Fidelity Systematic Investment Plans
(Page 1); General ; The Sponsor
39 The Sponsor
40 Financial Statements
41 (a) The Sponsor
FORM N-8B-2 CAPTION
ITEM NUMBER REFERENCE
(b) (c) Not applicable
42 The Sponsor
43 Not applicable
44 (a) Financial Statements
(b) Fees and Expenses; Financial
Statements
45 Not applicable
46 (a) ; (b) Partial Liquidation of Your Plan;
Systematic Withdrawal Plan; Your
Cancellation and Refund Rights;
Terminating Your Plan; Completed Plans
and Exchanges; The Custodian
47 Investment Objective of the Funds;
Substitution of the Underlying
Investment; The Custodian; The
Sponsor
48 The Custodian; The Sponsor
49 Fees and Expenses The Custodian;
The Sponsor; Statement of Operations
50 Not applicable
51 Not applicable
52 (a) Not applicable
(b) Not applicable
(c) Substitution of the Underlying Investment
(d) Not applicable
53 Taxes
54 Not applicable
55 Fees and Expenses
56-59 Not applicable
Fidelity Systematic
Investment Plans:
Destin y New Plans I
Destiny New Plans II
PROSPECTUS
APRIL 2 , 199 9
DESTINY
FIDELITY SYSTEMATIC INVESTMENT PLANS:
Destiny New Plans I and Destiny New Plans II
The Destiny New Plans are systematic investment plans that allow you
to build equity over a period of years by investing regularly each
month in mutual fund shares. This prospectus describes the two Destiny
New Plans: Destiny New Plans I and Destiny New Plans II. You may make
fixed monthly investments in a New Plan for a term of either 10 or 15
years. You may continue to make investments for as long as 25 years.
You may invest in one of several monthly investment plan amounts and
may make investments of as little as $50 per month. Investments in
your New Plan are applied to the purchase of shares of the New Class
of one of the Fidelity Destiny Portfolios. New Plans I purchases
shares of the New Class of Fidelity Destiny Portfolios I and New Plans
II purchases shares of the New Class of Fidelity Destiny Portfolios
II. The New Plans charge Creation and Sales Charges equal to 50% of
each of your first twelve monthly investments. The Creation and Sales
Charges are deducted from your Plan investment, and the balance is
invested in shares of the New Class of the Funds. Your New Plan
purchases shares of the New Class of the appropriate Fund at the
Class' net asset value (NAV), without the deduction of a sales charge.
The Classes of the Funds are subject to an annual 12b-1 fee. The
Creation and Sales Charges and the other fees and expenses that either
you or your Plan will pay are described in the "Fees and Expenses"
section, beginning on page __.
YOUR NEW PLAN AND YOUR PLAN'S INVESTMENT IN FUND SHARES IS INTENDED
TO BE A LONG-TERM INVESTMENT. YOU SHOULD NOT PURCHASE A PLAN IF YOU
ARE SEEKING QUICK PROFITS OR IF YOU MIGHT BE UNABLE TO COMPLETE THE
PLAN. If you terminate or withdraw from your Plan in the early years
of your Plan, you may incur a loss because the full amount of the
Creation and Sales Charges are deducted from your first twelve
investments. Your Plan does not eliminate the risk involved in the
ownership of individual securities, and your Plan's value will
increase or decrease over time as the result of increases or decreases
in the price of the securities owned by the Fund. You will incur a
loss if you terminate your Plan at a time when the value of your
Plan's shares is less than their cost. Preinvestment of any part of
your Plan investments increases the possibility that a loss may result
from early termination. You have the right to a refund of your entire
investment in a Plan within 45 days of the purchase of a Plan. You
also have a right to a refund of some or all of your Plan investment
within 18 months of the purchase of a Plan. These rights are subject
to the conditions described in the "Your Cancellation and Refund
Rights" section on page __.
Shares of the New Class of the Funds are available to the public only
through the New Plans. A separate prospectus describes two other
Fidelity Systematic Investment Plans: Destiny Initial Plans I and
Destiny Initial Plans II. This prospectus is available from your
investment professional or Fidelity Distributors Corporation, the
Sponsor of the Plans. The fee arrangements of these other Plans are
different than those of the New Plans. You should consider the
information contained in the section called "General" on page __ and
consult with your investment professional when deciding which Plan's
fee arrangements are most appropriate for you. You do not have to
purchase a Plan to make monthly investments in mutual funds. Other
mutual funds managed by the Funds' investment adviser have investment
objectives similar in many respects to those of the Funds. Your
investment in shares of these other funds may not be subject to any
sales charges or other charges that may apply to an investment in the
New Plans.
New Plans established while this Prospectus is effective are governed
by the terms of this Prospectus, including all the rules, rights,
privileges and benefits it describes. THEREFORE IT IS IMPORTANT THAT
YOU READ THIS PROSPECTUS AND RETAIN IT FOR FUTURE REFERENCE. No
salesman, dealer, or other person is authorized by the Sponsor,
Fidelity Systematic Investment Plans, or Fidelity Destiny Portfolios
to give any information or make any representation that is not
contained in either the Prospectus of the Plans, the Prospectus of
Fidelity Destiny Portfolios, or in other printed or written material
issued by the Sponsor, the Plans, or Fidelity Destiny Portfolios. You
should only rely upon the information contained in these prospectuses.
Mutual fund shares are not deposits or obligations of, or guaranteed
by, any depository institution. Shares are not insured by the FDIC,
Federal Reserve Board or any other agency, and are subject to
investment risks, including possible loss of principal amount
invested. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS AGAINST THE LAW.
THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE CURRENT
PROSPECTUS FOR FIDELITY DESTINY PORTFOLIOS.
Table of Contents
Page
How Fidelity Systematic Investment Plans Can Help You Meet Your
Objectives
Investment Objective of the Funds
How to Start a Destiny New Plan
1. Tax-Advantaged Retirement Plans
Fees and Expenses
1. Creation and Sales Charges
2. Account Fees
3. Comparison of the Costs of a New Plan and an Initial Plans
Illustration of Two Hypothetical Destiny New Plans
Keeping Your New Plan Current
Dollar-Cost Averaging and Diversification
Plan Features and Your Rights and Privileges
1. Automatic Investment Program and Government Allotments
2. Purchasing Two or More Plans at the Same Time
3. Rights of Accumulation
4. Distributions
5. Federal Income Tax Withholding
6. Your Voting Rights
7. Prepaying Your Investments
8. Changing the Face Amount of Your Plan
9. Extended Investment Option
10. Partial Liquidation of Your Plan
11. Systematic Withdrawal Program
12. Transferring or Assigning Your Rights in a Plan
13. Transfer of Broker
14. Your Cancellation and Refund Rights
16. Terminating Your Plan
17. Plan Reinstatement
18. Completed Plans and Exchanges
19. Taxes
20. Termination of Your Plan by the Sponsor or Custodian
Substitution of the Underlying Investment
General
The Custodian
The Sponsor
Glossary
Financial Statements
Fidelity Destiny Portfolios Prospectus F-1
HOW FIDELITY SYSTEMATIC INVESTMENT PLANS CAN HELP YOU MEET YOUR
OBJECTIVES
Many people who want to build an investment portfolio find it
difficult to save the money necessary to make periodic stock
purchases. The Destiny Plans are designed to help. The Plans make it
possible for you to build equity over a period of years by investing a
modest sum each month in mutual fund shares.
The value of each Fund's shares is subject to fluctuations in the
values of its underlying securities. A Plan calls for monthly
investments at regular intervals regardless of the value of the Fund's
shares. A Plan offers no assurance against loss in a declining market
and does not eliminate the risk inherent in the ownership of any
security. Terminating the Plan at a time when the value of the Fund
shares you own is less than their cost will result in a loss. You
should therefore consider your financial ability to continue and
complete a Plan.
Before opening a Plan you should consider the following:
1. A Plan represents an agreement between you (the Planholder), the
Sponsor and State Street Bank and Trust Company (the Custodian) under
which amounts invested, after the deduction of Creation and Sales
Charges, are used to purchase shares of the Funds at net asset value.
2. Investments made through the Plans will not result in direct
ownership of the shares of either Fidelity Destiny Portfolios: Destiny
I or Destiny II (the Funds), but rather will represent an interest in
a series of a unit investment trust, which will have direct ownership
of the shares of a class of the Funds. You will have a beneficial
interest in the underlying Fund's shares.
3. Unlike most other plans of this type, the Funds do not sell their
shares directly to the public. Initial investments in the Funds may be
made only through the trust arrangements provided by the Plans.
4. The Plans contain Creation and Sales Charges, sometimes called a
"front-end load". The effect of the Plans' front-end load is that if
you were to terminate your Plan between 2 months and 18 months, you
could lose as much as [xx.x]% of your total investments made up to the
time you terminate your Plan. If you terminate your Plan after 18
months, you could lose as much as [xx.x]% of your total investments.
However, if you complete a 15-year Plan, the maximum Creation and
Sales Charge would be 3.33% of your total investments. Accordingly, a
Plan is not suited for short-term investments. See the subsection
called "Creation and Sales Charges" in the section called "Fees and
Expenses" on page __.
INVESTMENT OBJECTIVE OF THE FUNDS
Fidelity Destiny Portfolios, an open-end investment management
company, is a series fund consisting of two separate funds, Destiny I
and Destiny II. The Funds are diversified mutual funds: an investment
vehicle that pools shareholders' money and invests it in a number of
different securities. Each Fund's objective is to seek growth of
capital, primarily from investment in equity securities. Each Fund
will tend to be fully invested in common stocks and securities
convertible into common stocks, but may also buy other types of
securities such as preferred stocks and bonds. The Funds have the
flexibility to invest in the securities of issuers with large or small
market capitalizations, as well as the securities of both domestic and
foreign issuers. The investment objective, policies and restrictions
of the Funds are described in the accompanying Fidelity Destiny
Portfolios prospectus, which begins on page F-1.
The Funds' investments are selected and supervised by Fidelity
Management & Research Company (FMR). For more information about the
business experience of FMR, see "FMR and its Affiliates" on page F-__
of the Funds' prospectus.
HOW TO START A DESTINY NEW PLAN
To start a New Plan, you should complete a New Plan Application and
mail it to the address specified on the application. Your application
asks you to choose either a 10-year or a 15-year New Plan, and the
amount of your monthly investment. You should include a check in the
amount of the first monthly investment, made payable to Destiny New
Plans I or Destiny New Plans II, as the case may be, when you return
the completed application to the address on the application.
Alternatively, you may establish an Automatic Investment Program or,
if you are a military employee, a government allotment, so that your
monthly investments are automatically sent from your checking account
to the New Plans. (See "Automatic Investment Program and Government
Allotments" on page __.) After your New Plan Application and initial
investment is received in proper form by the Sponsor, the applicable
Creation and Sales Charges will be deducted. The balance of your
investment will be invested in shares of the New Class of the Funds,
and you will receive a confirmation statement showing the number of
whole and fractional shares purchased for your Plan account.
After you make your initial investment, your subsequent monthly
investments, made payable to Destiny New Plans I or Destiny New Plans
II, may be sent directly to the Custodian, Boston Financial Data
Services, Inc. (Boston Financial), at P.O. Box 8300, Boston,
Massachusetts 02266-8300. Your subsequent investments in your New Plan
will also be applied toward the purchase of shares of the New Class of
the Funds at the current NAV of the New Class after the deduction of
any applicable Creation and Sales Charges.
1. TAX-ADVANTAGED RETIREMENT PLANS
The New Plans may serve as the investment vehicle for tax-advantaged
retirement plans, including individual retirement accounts (IRAs) and
qualified money purchase pension and profit sharing plans. However,
the only retirement plan made available by Fidelity Destiny Portfolios
is the Fidelity Destiny IRA (which includes SEP IRAs, traditional IRAs
and Fidelity Destiny Roth IRAs). IRA plans can be established through
contributions, through a rollover, or through a trustee-to-trustee
transfer of IRA assets from another financial institution. These
rollovers or transfers may contain assets that originated from an
employer-sponsored retirement plan or annual IRA contributions.
Detailed information concerning the Fidelity Destiny IRA is available
from the Sponsor. This information should be read carefully. The
information describes the additional service fees charged for IRAs and
describes the federal income tax consequences of establishing an IRA.
You may wish to consult with an attorney or tax adviser before
establishing a Fidelity Destiny IRA.
Under the Fidelity Destiny IRA, dividends and distributions will be
reinvested automatically in additional Fund shares. You may not
establish a new Destiny tax-advantaged retirement plan by changing the
registration of an existing Destiny Plan account. The annual
maintenance fee charged by the Custodian for the Fidelity Destiny IRA
is $10. This $10 fee will be deducted from Fund shares unless it is
paid in advance.
FEES AND EXPENSES
Your Plan pays two kinds of fees: Creation and Sales Charges and
Account Fees. You will pay Creation and Sales Charges equal to 50% of
each of the first twelve investments in your New Plan. Your Plan may
also pay certain Account Fees for services provided by the Custodian.
Each of these fees is described in more detail below.
Your Plan also indirectly pays a 12b-1 service fee imposed by the New
Class of the Funds. The 12b-1 service fee is equal to an annual rate
of 0.25% of the average value of the shares of the New Class in your
Plan. Your New Plan indirectly pays this fee because it invests in
shares of the New Class of the Funds. For more information about the
12b-1 service fee, see "______" on page F-__ of the Funds' prospectus.
1. CREATION AND SALES CHARGES
You will pay Creation and Sales Charges equal to 50% of your first
twelve investments in your New Plan. When you have completed a 10-year
New Plan (120 monthly investments), the Creation and Sales Charges you
paid on your first twelve investments will amount to 5.00% of your
total New Plan investments, assuming that you invest in a Plan with
the smallest monthly investment of $50 a month ($6,000 Face Amount).
The percentage of Creation and Sales Charges for each invested dollar
decreases proportionately as Face Amount increases. The Creation and
Sales Charges on the largest 10-year Face Amount, $10,000 a month
($1,200,000 Face Amount), amount to ____% of your total New Plan
investments.
When you have completed a 15-year New Plan (180 monthly investments),
the Creation and Sales Charges you paid on your first twelve
investments will amount to 3.33% of your total New Plan investments,
assuming a monthly investment amount of $50 a month ($9,000 Face
Amount). The Creation and Sales Charges on the largest 15-year Face
Amount, $10,000 a month ($1,800,000 Face Amount), amount to ____% of
your total New Plan investments.
You have certain refund and cancellation rights, described on page
__. However, these rights are limited, and early termination of your
New Plan or your inability to complete your Plan may result in your
having paid Creation and Sales Charges that represent a substantial
percentage of your total investments in your Plan. For example, if you
terminate your New Plan between 45 days and 18 months after you start
your Plan, the Creation and Sales Charges that would not be refunded
to you could be as much as [37.5]% of your total investments made. If
you terminate your New Plan after 18 months, the Creation and Sales
Charges that would not be refunded to you could be as much as [28.33]%
of your total investments made.
The following tables illustrate the effect of the Creation and Sales
Charges on New Plans with different monthly investment amounts and
different Plan lengths.
Creation and Sales Charges
10-Year New Plans (120 investments)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Monthly Total Face Creation and Total Creation and Percentage of Percentage of
Investment Amount of Sales Charges Sales Charges* Total Investments Net Investments
in New Plan New Plan per first 12 in New Plans* in New Plans*
investments
$50.00 $6,000.00 $25.00 $300.00 5.00% 5.26%
75.00
100.00
125.00
150.00
166.66
200.00
250.00
300.00
350.00
400.00
500.00
750.00
1,000.00
1,500.00
2,000.00
2,500.00
5,000.00
10,000.00
</TABLE>
* Assuming completion of your Plan.
"Investments" means only your monthly Plan investments and does not
include any re-investment of capital gain or dividend distributions.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Creation and Sales Charges
15-Year New Plans (180 investments)
Monthly Total Creation and Total Creation and Percentage of Percentage of
Investment Face Amount of Sales Charges Sales Charges* Total Investments Net Investments
in New Plan New Plan per first 12 in New Plans* in New Plans*
investments
$50.00 $9,000.00 $25.00 $300.00 3.33% 3.49%
75.00
100.00
125.00
150.00
166.66
200.00
250.00
300.00
350.00
400.00
500.00
750.00
1,000.00
1,500.00
2,000.00
2,500.00
5,000.00
10,000.00
</TABLE>
* Assuming completion of your Plan.
"Investments" means only your monthly Plan investments and does not
include any re-investment of capital gain or dividend distributions.
Creation and Sales Charges
Extended Investment Option New Plan (300 Payments)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Monthly Total Creation and Total Creation and Percentage of Percentage of
Investment Investment Sales Charges Sales Charges** Total Investments Net Investments
in New Plan in New Plan per first 12 in New Plans** in New Plans**
investments
$50.00 15,000.00 $25.00 $300.00 2.00% 2.04%
75.00
100.00
125.00
150.00
166.66
200.00
250.00
300.00
350.00
400.00
500.00
750.00
1,000.00
1,500.00
2,000.00
2,500.00
5,000.00
10,000.00
</TABLE>
* For a description of the Extended Investment Option, see page __.
** Assuming completion of your Plan.
"Investments" means only your monthly Plan investments and does not
include any re-investment of capital gain or dividend distributions.
ILLUSTRATION OF A $50 MONTHLY INVESTMENT IN A NEW PLAN
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
At the End At the End At the End At the End
of Your Plan of 6 Months of 1 Year of 2 Years
(120 Investments) (6 Investments) (12 Investments) (24 Investments)
% of % of % of % of
Total Total Total Total
Amount Invest Amount Invest Amount Invest Amount Investments
ments ments ments
10 YEARS (120 INVESTMENTS)
Total Investments $6,000.00 100.00% $ 300.00 100.00% $ 600.00 100.00% $ 1,200.00 100.00%
Less: Creation and
Sales Charges 300.00 5.00 150.00 50.00 300.00 50.00 300.00 25.00
Net Amount
Invested in Plan 5,700.00 95.00 150.00 50.00 300.00 500.00 900.00 75.00
15 YEARS (180 INVESTMENTS)
Total Investments $9,000.00 100.00% $ 300.00 100.00% $ 600.00 100.00% $ 1,200.00 100.00%
Less: Creation and
Sales Charges 300.00 3.33 150.00 50.00 300.00 50.00 300.00 25.00
Net Amount
Invested in Plan 8,700.00 97.67 150.00 50.00 300.00 500.00 900.00 75.00
25 YEARS (300 INVESTMENTS)*
Total Investments $15,000.00 100.00% $ 300.00 100.00% $ 600.00 100.00% $ 1,200.00 100.00%
Less: Creation and
Sales Charges 300.00 2.00 150.00 50.00 300.00 50.00 300.00 25.00
Net Amount
Invested in Plan 14,700.00 98.00 150.00 50.00 300.00 500.00 900.00 75.00
</TABLE>
* The 25-years (300 investments) schedule reflects the charges
applicable to a 15-year Plan which is continued under the Extended
Investment Option. For a description of the Extended Investment
Option, see page __.
** Assuming completion of your Plan.
"Investments" means only your monthly Plan investments and does not
include any re-investment of capital gain or dividend distributions.
2. ACCOUNT FEES
You may also pay additional Account Fees to the Custodian for certain
services provided by the Custodian. These fees are described below.
Completed Plan Fee: An annual fee of $12 or 2/10ths of 1% of the Face
Amount of the Plan, whichever is less, will be charged if you have
completed your Plan but have elected not to hold shares of the New
Class of the Fund directly. (See "Completed Plans" on page __.)
Inactive Account Fee: An annual $12 fee will also be charged to your
Plan if you have not completed your Plan and your Plan is not current.
(See "Keeping Your New Plan Current" on page __.) These fees are paid
first from dividends and distributions and then, if necessary, from
principal.
Termination Fee: A fee of $2.50 will be charged to your Plan if you
make a complete withdrawal or you terminate your Plan prior to
completion. (See "Terminating Your Plan" on page __.)
Returned Check Fee: A fee of $2.50 will be charged to your Plan for
any check or preauthorized check which is not honored by the bank on
which it is drawn.
Fidelity Destiny IRA Maintenance Fee: If you have a Fidelity Destiny
IRA, you will also be charged an annual $10 maintenance fee. (See
"Tax-Advantaged Retirement Plans" on page __.)
You may avoid these Account Fees, except for the Fidelity Destiny IRA
Maintenance Fee, by terminating your Plan and receiving shares of the
Fund. However, if you terminate your Plan before completing all the
scheduled investments, the percentage of your total investments that
will have been paid as Creation and Sales Charges will be higher than
if you had completed your Plan. If you choose to own shares of the
Fund directly, you will not be able to make partial liquidations and
replace them at NAV. (See "Partial Liquidation of Your Plan" on page
__.)
These services are provided by the Custodian, State Street Bank and
Trust Company, or its affiliated bookkeeping and administrative
service agent, Boston Financial (see "The Custodian" on page __). The
Custodian deducts the fees described above, and any other charges that
may be provided for in the Custodian Agreement or in the Plans, from
your Plan account. These fees are paid first from dividends and
distributions and then, if necessary, from principal. The Custodian
has certain rights to charge your Plan account, either on a pro rata
basis or by retaining shares on a pro rata basis, to pay fees, taxes
or expenses in connection with the Plans or to set up reserves. The
Custodian has a lien upon your shares to the extent of these rights.
Although there is no current intention to do so, the Funds and the
Sponsor each reserve the right to stop paying the charges for any or
all of the services provided by the Custodian under the Custodian
Agreement or in this Prospectus and to cause these charges to be paid
by the Plans, individual Plan accounts, Planholders and Fund dividends
and distributions. These charges shall include, without limitation,
the Account Fees and Custodian and Other Fees and Charges provided for
in the Custodian Agreement or its schedules.
Except as described in this "Fees and Expenses" section, there are
currently no other deductions made against Planholder accounts, or
deducted from Fund dividends or distributions, to compensate the
Sponsor or the Custodian for their services. All other Custodian fees
which would otherwise be charged to the Plan or Planholders, or
deducted from Fund dividends or distributions, may be paid by the Fund
or the Sponsor. Although there is no current intention to do so, the
Fund reserves the right to cease paying such fees, and the Sponsor
reserves the right to cause deductions in the future against the
Plans, the Planholders, and Fund dividends or distributions to
compensate the Custodian for its services.
ILLUSTRATION OF TWO HYPOTHETICAL DESTINY NEW PLANS
1. ILLUSTRATION OF AN HYPOTHETICAL $50 MONTHLY DESTINY NEW PLANS I
The table below assumes an initial investment of $50 and subsequent
investments of $50 per month in a New Plan with income, dividends and
capital gain distributions reinvested in additional shares. The
illustration includes the effect of expenses paid by the New Class. No
adjustments have been made for any income taxes payable by investors
on capital gain distributions and dividends reinvested. The table
covers the period from October 1983 through September 1998, with all
investments made at the end of each month.
This period was one of widely fluctuating common stock prices. The
results shown are based on historical performance and should not be
considered a representation of the investment results you would obtain
if you started a New Plan today. Your Plan does not assure a profit or
protect against a loss. When you sell your shares they may be worth
more or less than you paid for them.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Creation Annual Annual
Invest- Fiscal and Dividend Capital Gain Cumulative Total Value of Shares
ment Year Cumulative Sales Total Income Distributions From From From Total Value
No. Ended Investments Charges Shares Reinvested Reinvested Investment Dividends Capital Gains of Plan(A)
1-12 Sept-84 $600.00 $300.00 25.771 $5.91 $38.01 $292.73 $5.72 $36.83 $335.28
13-24 Sept-85 1,200.00
25-36 Sept-86 1,800.00
37-48 Sept-87 2,400.00
49-60 Sept-88 3,000.00
61-72 Sept-89 3,600.00
73-84 Sept-90 4,200.00
85-96 Sept-91 4,800.00
97-108 Sept-92 5,400.00
109-120 Sept-93 6,000.00
121-132 Sept-94 6,600.00
133-144 Sept-95 7,200.00
145-156 Sept-96 7,800.00
157-168 Sept-97 8,400.00
169-180 Sept-98 9,000.00
$9,000.00 TOTAL $XX
</TABLE>
(A) Total is determined by Destiny I's fiscal year-end NAV.
2. ILLUSTRATION OF AN HYPOTHETICAL $166.66 MONTHLY DESTINY NEW PLANS
I
The table below assumes an initial investment of $166.66 and
subsequent investments of $166.66 per month in a New Plan with income,
dividends and capital gain distributions reinvested in additional
shares. The illustration includes the effect of expenses paid by the
New Class. No adjustments have been made for any income taxes payable
by investors on capital gain distributions and dividends reinvested.
The table covers the period from October 1983 through September 1998,
with all investments made at the end of each month.
This period was one of widely fluctuating common stock prices. The
results shown are based on historical performance and should not be
considered a representation of the investment results you would obtain
if you started a New Plan today. Your Plan does not assure a profit or
protect against a loss. When you sell your shares they may be worth
more or less than you paid for them.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Creation Annual Annual
Invest- Fiscal and Dividend Capital Gain Cumulative Total Value of Shares
ment Year Cumulative Sales Total Income Distributions From From From Total Value
No. Ended Investments Charges Shares Reinvested Reinvested Investment Dividends Capital Gains of Plan(A)
1-12 Sept-84 $1,999.92 $999.96
13-24 Sept-85
25-36 Sept-86
37-48 Sept-87
49-60 Sept-88
61-72 Sept-89
73-84 Sept-90
85-96 Sept-91
97-108 Sept-92
109-120 Sept-93
121-132 Sept-94
133-144 Sept-95
145-156 Sept-96
157-168 Sept-97
169-180 Sept-98
$29,998.80 TOTAL $XX
</TABLE>
(A) Total is determined by Destiny I's fiscal year-end NAV.
KEEPING YOUR NEW PLAN CURRENT
Your New Plan calls for monthly investments for a period of either 10
or 15 years, with the option of extending a 15-year Plan for another
10 years. You are not likely to realize the full benefit of your Plan
unless you complete your Plan. You should carefully consider your
ability to make monthly investments for the length of time required to
complete your Plan before you start a Plan. The Plans offer an
Automatic Investment Program to assist you in making your monthly
investments. (See "Automatic Investment Program and Government
Allotment Program" on page __.)
If you stop making monthly investments, your ability to benefit from
dollar-cost averaging will be reduced. (See "Diversification and
Dollar-Cost Averaging" on page __.) If you stop making monthly
investments and have not made any of your monthly investments in
advance of their due date, your Plan will no longer be current. An
inactive account fee of $12 is charged annually if you have not
completed your Plan and no investment has been made for a 12-month
period, after giving credit for any prepayment of monthly investments
that you may have made. This fee is deducted from dividends and
distributions or, if these are not sufficient, the Custodian has the
right to obtain the amount needed to pay its fee by selling Fund
shares from your New Plan account.
Under current policy, one investment is required during each 6-month
period of the calendar year to prevent the Plan from being in default.
Your Plan may be terminated by the Sponsor or the Custodian if it is
in default. (See "Termination of Your Plan" on page __.)
DOLLAR-COST AVERAGING AND DIVERSIFICATION
The Destiny Plans were created to utilize the investing method of
dollar-cost averaging. Dollar-cost averaging is a system of buying
fixed dollar amounts of securities at regular intervals, regardless of
the price of the shares. In the Destiny Plans, you invest a fixed
amount on a monthly basis. Your monthly investment of a fixed dollar
amount buys more shares when the share price is low and fewer shares
when the share price is high. The benefit of this method is that, over
time, the average cost of your shares will be lower than the average
price of those shares. Dollar-cost averaging does not assure a profit
or guard against a loss. If you sell your Fund shares when their value
is less than their cost, you will incur a loss.
Diversification can help you manage the investment risk by decreasing
the volatility of a portfolio of securities. The Destiny Funds are
diversified funds, which means that the Funds invest in a number of
different securities.
PLAN FEATURES AND YOUR RIGHTS AND PRIVILEGES
1. AUTOMATIC INVESTMENT PROGRAM AND GOVERNMENT ALLOTMENT PROGRAM
To encourage and assist you in making monthly investments and to
eliminate the burden of writing a check every month, you may establish
an Automatic Investment Program. Under an Automatic Investment
Program, your monthly investments are automatically debited from your
bank account. If you are a military employee, you may establish a
government allotment program so that your monthly investments will be
made automatically.
To initiate an Automatic Investment Program, you should complete a
Preauthorized Check Transaction Form, attach a voided blank check, and
send it to Boston Financial. Boston Financial will then draft your
bank account each month in the amount of the monthly Plan investment
amount. The proceeds of the draft, less any applicable Creation and
Sales Charges and other applicable Account Fees, will be invested in
your New Plan account. Military personnel may initiate a government
allotment program by completing a government allotment form.
You may begin or change these programs at any time by written notice
to Boston Financial, provided the notice is received by Boston
Financial at least 15 days before the date the program or the change
is to go into effect. You may terminate these programs at any time by
written notice to Boston Financial, provided the notice is received by
Boston Financial at least five business days before the date of the
next scheduled draft or government allotment.
2. RIGHTS OF ACCUMULATION
You may qualify to pay lower Creation and Sales Charges by
aggregating the Face Amounts of two or more Fidelity Destiny Plans or
Fidelity Destiny New Plans when you purchase one or more new Plans or
when you increase the Face Amount of a Plan. 10-year and 15-year Plans
may not be combined.
To use this privilege, you or your investment professional must
notify the Sponsor in writing that you wish to aggregate the Face
Amounts of each of the Plans that qualify for the rights of
accumulation for the purpose of determining the applicable Creation
and Sales Charges. The applications for each new Plan that you are
purchasing must be submitted at the same time that you send your
notice.
Each Plan that you already own must be current at the time you send
your notice. Qualified retirement plans are always considered current
for the purpose of rights of accumulation. If one or more of the
Plans, other than a qualified retirement plan, that are combined to
take advantage of this privilege subsequently stops making monthly
investments and is no longer a Current Plan, the remaining Creation
and Sales Charges will be recalculated to reflect the charges
applicable to the Plan or Plans that remains current.
You may only combine Plans that are registered to you, your spouse,
your children under the age of 21, or a trustee or other fiduciary of
a single trust estate or single fiduciary account. You may also
combine any Fidelity Destiny IRA Plan registered to you, your spouse
or your children under the age of 21, as long as the monthly
investment in that Plan is equal to $166.66 per month. For the purpose
of this privilege, a single fiduciary account includes a pension,
profit-sharing or other employee benefit trust created pursuant to a
plan qualified under Section 401 of the Internal Revenue Code, and a
trust estate or fiduciary account may have more than one beneficiary.
This privilege is not available to any group of individuals whose
funds are combined, directly or indirectly, for the purchase of
redeemable securities of a registered investment company whether
jointly or through a trustee, agent, custodian or other representative
for that group of individuals.
4. DISTRIBUTIONS
Unless you direct otherwise, all dividends and other distributions,
after applicable deductions, are automatically used to purchase
additional Fund shares at NAV as of the record date for the
distribution. No sales charge is made on any reinvestment of dividends
or other distributions.
You must instruct Boston Financial in writing if you wish to receive
the dividends and other distributions in cash rather than additional
shares. Your instructions must be received at least seven days before
the record date of a dividend or distribution. You may change these
instructions at any time. A fee of $2.50 is charged for each change.
Distributions on Fidelity Destiny IRAs are automatically reinvested
unless the Planholder is age 59 1/2 or older.
Dividends and other distributions are made on a per-share basis.
After every distribution, the value of a share drops by the amount of
the distribution. If you make an investment shortly before the
ex-dividend date of the dividend or distribution, you will pay a price
for the shares that includes the amount of the dividend or
distribution. This is called "buying a dividend". Dividends and
distributions, if declared, are normally paid annually by each Fund,
and may be taxable to you. (See "Taxes" on page __).
5. FEDERAL INCOME TAX WITHHOLDING
Boston Financial can withhold 28% of any dividend or other
distribution paid by the Funds and send that amount to the Internal
Revenue Service as a credit against your tax liability, if any. The
amount withheld may or may not be equal to the additional taxes you
may owe on the dividend or distribution. If you choose to authorize
this withholding, the number of Fund shares purchased with the
remainder of the dividend or distribution will be less than would
otherwise have been the case.
Withholding is available only if your Plan reinvests dividends and
other distributions. It is not available for tax-advantaged retirement
plans, including Fidelity Destiny IRAs. The withholding option can be
started by submitting a Tax Withholding Form, which is included with
your Plan Application, to Boston Financial at least 30 days before the
option is to take effect. Once started, the withholding option will
remain in effect until you notify Boston Financial in writing to end
the withholding.
6. YOUR VOTING RIGHTS
You will receive a notice at least 15 days before any matter is
submitted to a vote of the shareholders of Fidelity Destiny
Portfolios: Destiny I and Destiny II. The Custodian will vote on these
matters according to your instructions. In the absence of instructions
on how you wish to vote, the Custodian will vote all the votes of the
New Plans in the same proportion as it votes the votes for which it
has received instructions from other Planholders in your New Plan. The
number of votes you are entitled to is based upon the dollar value of
your investment. If you wish to attend a meeting at which shares may
be voted, you may request Boston Financial to furnish a proxy or
otherwise make arrangements for exercising your voting rights.
7. PREPAYING YOUR INVESTMENTS
You may prepay your monthly investments and you may complete your
Plan ahead of schedule by making investments in advance of their due
dates, but you may not make more than 24 investments, including any
monthly investments, in any single calendar year. In addition to
investments that you make in advance of their due date, you may make
an additional prepayment in a single lump sum equal in amount to not
more than 24 investments. This prepayment option may be exercised only
once, either initially, or at any one time during the term of your
Plan. These prepayment provisions may be waived only to make a Plan
that is in arrears current, for a transfer of assets from a
tax-advantaged retirement plan to a Destiny tax-advantaged retirement
plan, or in the event of your death, to allow the Plan to be completed
at one time by your estate or beneficiary. There is no reduction in
the Creation and Sales Charges for the prepayment of your monthly
investments.
8. CHANGING THE FACE AMOUNT OF YOUR PLAN
You may increase the Face Amount of your Plan at any time. This is
called making a Face Change to your Plan. You may choose a new Face
Amount that is one of the "Monthly Investment in New Plan" amounts
shown on page __. Within six months of the time you open a new Plan,
your may decrease your Face Amount by as much as 50%. Within six
months of the time you increase the Face Amount of your Plan, you may
decrease your Face Amount back to the Plan's previous Face Amount. You
must send your request for a change in the Face Amount of a Plan to
Boston Financial along with a completed Plan Application for the new
Face Amount.
Whether you increase or decrease your Face Amount, a change in the
Face Amount does not create new cancellation and refund rights.
However, your new Plan will be subject to the fees and deductions
applicable to Plans of the same Face Amount opened at the time that
you change the Face Amount of your Plan, as described in the then
currently effective prospectus. The Creation and Sales Charges you
have already paid on your existing Plan will be recomputed and applied
as a credit to the Creation and Sales Charges due on your new Plan, if
any, at the time you change the Face Amount of your Plan. Any
additional Creation and Sales Charges due on your new Plan will be
paid by liquidating Fund shares held by your Plan. A charge of $2.50
will be made for any change in the Face Amount of your Plan.
9. EXTENDED INVESTMENT OPTION
If you purchase a 15-year Plan, you may continue making monthly
investments into your Plan after you complete all scheduled
investments, automatically activating the Extended Investment option.
If you purchase a 10-year Plan, you must first change the Face Amount
of your Plan to that of a 15-year Plan and complete that Plan before
activating the Extended Investment option. You may make as many as 120
additional monthly investments. Your additional investments are
subject to the same deductions as your last scheduled investment. Your
Extended Investment option will end after your 300th monthly Plan
investment.
If you make investments under the Extended Investment option and your
Plan is not current for six consecutive months, the Sponsor or the
Custodian may terminate your Plan. If the Extended Investment option
expires because your Plan is not current, because written notice of
termination is given to Boston Financial, or for any other reason, the
Custodian has the right to increase or impose Account Fees at the rate
currently being charged for new Plans of the same Face Amount.
10. PARTIAL LIQUIDATION OF YOUR PLAN
Normally, if you redeem all of your Plan shares, your Plan will
terminate. However, you may sell less than all of your Plan shares
without terminating your Plan. If you have owned your Plan for at
least 45 days, you may direct the Custodian, as agent, to sell up to
90% of the value of your Plan shares, expressed in dollars, and to pay
you the proceeds. You may make partial liquidations as often as you
desire. Any partial sale of shares and cash withdrawal must involve at
least $100.
If your partial liquidation results in a cash withdrawal of more than
$100,000, or if the proceeds are to be sent to an address other than
the address of record, a signature guarantee is required. A signature
guarantee is also required if you have changed your address within 30
days of your partial liquidation request. A signature guarantee is a
widely accepted way to protect you and Fidelity by guaranteeing the
signature that appears on your request. A signature guarantee may not
be provided by a notary public. The Custodian will accept signature
guarantees from banks, brokers, dealers, municipal securities dealers,
municipal securities brokers, government securities dealers,
government securities brokers, credit unions (if authorized under
state law), national securities exchanges, registered securities
associations, clearing agencies and savings associations. Your partial
liquidation request should be sent to Boston Financial Data Services,
Inc., P.O. Box 8300, Boston, Massachusetts 02266-8300. Your request
must be signed and any required signature guarantee must be received
in proper order before any withdrawals or liquidations can be
executed.
You may also make partial liquidations by telephone by calling
1-800-225-5270, as long as you are not withdrawing more than $100,000
from your Plan and your request does not require a signature
guarantee. You may not make a partial liquidation by telephone from a
Destiny tax-advantaged retirement plan.
Partial liquidation requests must be made by 4:00 p.m. Eastern time.
The redemption price for the partial liquidation will be the next
determined NAV after your request is accepted. You will receive
proceeds by check made payable as the account is registered and mailed
to the address of record. Ordinarily, you will be sent the proceeds of
a partial liquidation within seven calendar days from the time Boston
Financial accepts the request. However, Boston Financial will not mail
redemption proceeds until checks received for the shares purchased
have cleared (which may take up to 7 calendar days).
You may realize a capital gain or loss for federal income tax
purposes on partial liquidations. If assets from a Destiny New Plan
IRA are distributed directly to you, you will be responsible for any
income taxes due on the distribution and, if you are under the age of
59 1/2, you may be subject to an early distribution penalty if those
assets are not reinvested into another IRA within 60 days of receipt
of the distribution.
If you make a partial liquidation of some of your New Plan shares,
you may, but are not obligated to, replace those shares by
repurchasing them, up to the dollar amount of the original sale, at
any time after 90 days from the date of the original sale. If you own
a Destiny New Plan IRA, you may replace those shares by repurchasing
them, up to the dollar amount of the original sale, at any time after
45 days from the date of the original sale.
You may replace Destiny New Plan shares at any time, and the
replacement need not be made in one transaction. However, the amount
of any repurchase of shares following a partial liquidation must be at
least 25% of the amount liquidated or $2,000, whichever is less.
Replacements of partial liquidations should be clearly identified
clearly to distinguish them from additional investments. The Custodian
or Boston Financial may require additional documentation. Your
replacement will be applied to the purchase of Fund shares at the next
determined NAV. Partial liquidations and replacements do not affect
the total number of monthly investments to be made or the unpaid
balance of monthly investments.
The partial liquidation and replacement privileges are intended to
facilitate the temporary use of funds invested in your Plan for
emergency purposes. The Sponsor reserves the right to limit the number
of transactions you may use to replace a partial liquidation and to
impose such additional restrictions as, in its judgment, are conform
with the requirements of Rule 2830 of the Rules of the Association of
the National Association of Securities Dealers, Inc. (NASD). A charge
of $2.50 will be made for each partial liquidation and each
replacement, and you will be liable for any transfer taxes that may be
incurred.
11. SYSTEMATIC WITHDRAWAL PROGRAM
When you have completed your Plan, you may choose to start a
Systematic Withdrawal Program. If you have a Fidelity Destiny IRA and
are 59 1/2 years old or older, you do not have to complete your Plan
before you start a Systematic Withdrawal Program. To start this
program, you direct the Custodian, as your agent, to withdraw the
necessary shares from your Plan account so that the Custodian may make
regular cash withdrawals on the first day of every month or every
quarter. You may authorize cash withdrawals of any amount, subject to
a $50 minimum. The Sponsor has established the $50 minimum for
administrative convenience: it should not be considered a recommended
Systematic Withdrawal amount. You may change the dollar amount of the
withdrawal or stop the Systematic Withdrawal Program at any time.
Your Plan will remain in full force and effect with all rights and
privileges until all shares have been withdrawn from your account.
While the Systematic Withdrawal Program is in force, you may not elect
to receive dividends and distributions in cash. You should realize
that withdrawals in excess of the dividends and distributions paid on
your Plan shares will be made from principal and eventually may
exhaust your Plan account. Therefore, these withdrawals cannot be
considered as income on your investment. You may also realize a
capital gain or loss for federal income tax purposes upon payment of
each withdrawal. If you purchase two or more Plans, it is ordinarily
disadvantageous to participate in the Systematic Withdrawal Program on
a completed Plan while still making monthly investments on the
uncompleted Plan.
The Sponsor reserves the right to stop offering the Systematic
Withdrawal Program at any time after giving 90-days' notice to all
Planholders who have not elected to participate in the program. If you
are currently participating in the program at that time, you will be
allowed to continue your program. The Sponsor is not currently
contemplating ending the program.
A charge of $1 per check will be made for each withdrawal under a
Systematic Withdrawal Program. This charge is collected by redeeming
the necessary Fund shares. For any withdrawal made 10 years after the
issuance of your Plan, the charge may be increased to the amount
specified in the then current prospectus, up to $1.75.
12. TRANSFERRING OR ASSIGNING YOUR RIGHTS IN A PLAN
To secure a loan, you may assign your right, title and interest in
your entire Plan to a bank or other lending institution. You may not
assign your Plan if it is a Fidelity Destiny IRA, a UTMA Plan, or an
UGMA Plan. You may not make a partial assignment of your Plan. The
bank or other lending institution will not be entitled to exercise the
right of partial withdrawal or partial redemption.
You may also transfer your right, title, and interest to another
person whose only right shall be the privilege of complete withdrawal
from the Plan, or transfer your right, title, and interest to another
person, trustee, or custodian acceptable to the Sponsor, who has
applied to the Sponsor for a similar Plan. Additional documentation
may be required. Boston Financial will provide you with the
appropriate assignment forms. A charge of $2.50 is made for each
transaction. You will be liable for any transfer taxes that may be
incurred.
13. TRANSFER OF BROKER
The dealer firm of record has proprietary rights to all commissions
and 12b-1 fees earned during the duration of your Plan. It is also
under no obligation to transfer your Plan to another dealer firm as
long as its dealer agreement with Fidelity Destiny Plans remains
active. If the dealer firm of record chooses to release your Plan and,
therefore, subsequent commissions and 12b-1 fees to a new dealer firm,
it must first complete and sign an Assignment of Amounts Due form.
This form must be returned to the Custodian, State Street Bank and
Trust Company.
14. YOUR CANCELLATION AND REFUND RIGHTS
You have certain cancellation rights. Within 60 days after your
initial investment in a new Plan, the Sponsor will send you a notice
about these rights. If you elect to cancel your Plan within 45 days of
the date of the mailing of that notice, you will receive a cash refund
equal to the sum of (1) the total net asset value of the Fund shares
credited to your Plan account on the date that the cancellation
request is received by Boston Financial and (2) an amount equal to the
difference between the total investments made under the Plan and the
net amount invested in Fund shares.
In addition, you may cancel your Plan at any time within 18 months of
your initial investment by sending written instructions to Boston
Financial. If you cancel your Plan after the 45-day cancellation
period described above has expired but before the 18 month
cancellation period expires, you will receive a cash refund equal to
the sum of (1) the total net asset value of the Fund shares credited
to your Plan account on the date that the cancellation request is
received by Boston Financial and (2) the amount by which the Creation
and Sales Charges deducted from your total investments exceed 15% of
the investments made up to the date of redemption.
In order to receive the above refunds, you must send a written
cancellation request to Boston Financial Data Services, Inc., P.O. Box
8300, Boston, Massachusetts 02266-8300. For your protection, if the
amount of your refund will be more than $100,000, or if the proceeds
are to be sent to an address other than the address of record, your
request must be signed by all the registered owners and you must
include a signature guarantee on your cancellation request.
If you exercise your Cancellation and Refund Rights and redeem your
Plan, you may not reinstate the proceeds from such a cancellation or
refund at NAV, except as described under "Plan Reinstatement
Privilege" on page __. You may realize a capital gain or loss for
federal income tax purposes at the time of redemption.
The Sponsor will send you a written notice of the 18-month right of
cancellation if, during the first 15 months after the issuance of your
Plan, you have missed three or more investments, or if, after the
first 15 months but prior to the end of 18 months from the issuance of
your Plan, you have missed one investment or more. If the Sponsor has
previously sent you a notice during the first 15 months after the
issuance of your Plan, a second notice will not be sent even if
additional investments are missed. These notices will inform you of
your Plan cancellation rights, and will include the value of your Plan
and the amount you would be entitled to receive upon cancellation, as
of the date of the notice.
16. TERMINATING YOUR PLAN
You may terminate your Plan completely at any time by redeeming all
your shares. However, if you terminate your Plan before completing all
the scheduled investments, the percentage of your total investments
that will have been paid as Creation and Sales Charge will be higher
than if you had completed your Plan. You may also partially liquidate
your Plan. (See "Partial Liquidations" on page __.) If you terminate
your Plan more than 60 days from the date of issuance of your Plan,
you may avoid paying any commission that a security dealer may charge
for terminating your Plan by sending written notice of termination to
Boston Financial. If your Plan is not complete, a charge of $2.50 will
be made for terminating your Plan.
When you terminate your Plan, you have three options. First, you may
choose to hold Fund shares directly by requesting that the Custodian
deliver any or all of the Fund shares that have accumulated in the
Plan for at least 60 days, properly registered in your name, to
Fidelity Service Company, Inc. (Service), the transfer agent of the
Funds. Second, you may receive a check for the proceeds by directing
the Custodian, as your agent, to withdraw the shares, redeem them, and
send the proceeds to you. Third, you may reinvest the proceeds in any
of the Fidelity Advisor Funds by requesting that the Custodian deliver
the proceeds of your Plan to Boston Financial, as agent for the
Fidelity Advisor Funds, for investment at NAV into a similarly
registered account. To reinvest in a Fidelity Advisor Fund, you will
need to complete a Fidelity Advisor Funds application. FMR is the
investment adviser for the Fidelity Advisor Funds. For more
information, see "Exchange Restrictions" on page F-__ of the Funds'
prospectus.
For your protection, if the amount of your proceeds from termination
will be more than $100,000, or if the proceeds are to be sent to an
address other than the address of record, your request must be signed
by all the registered owners and you must include a signature
guarantee on your cancellation request. Your termination request and
any necessary signature guarantees must be received in proper order
before any withdrawals or liquidations can be executed. The redemption
price will be the NAV next determined after your documents have been
received. Termination requests should be sent to Boston Financial Data
Services, Inc., P.O. Box 8300, Boston, Massachusetts 02266-8300.
Termination requests must be made by 4:00 p.m. Eastern time. The
redemption price of your Fund shares will be the next determined NAV
after your request is accepted. You will receive proceeds by check
made payable as the account is registered and mailed to the address of
record. Ordinarily, you will be sent the proceeds within seven
calendar days from the time Boston Financial accepts your termination
request. The right of redemption of shares of the Funds may be
suspended at times when the New York Stock Exchange is closed or if
the Securities and Exchange Commission have determined that certain
other emergencies exist. If the right of redemption of shares is
suspended, Fund shares may not be redeemed, and therefore, cash
withdrawals may not be made.
17. PLAN REINSTATEMENT
You may reinstate a terminated Plan without any Creation and Sales
Charges on the reinstated amount once during the original term of your
former Plan under the same account registration as your former Plan.
You must make your reinstatement within 90 days after the date you
terminated your former Plan. You need not reinstate all of the
proceeds which you received upon termination, but you must reinstate
at least 10% of the gross proceeds from the termination of your former
Plan. When you reinstate your Plan, your new Plan will invest in the
same New Class of the Fund as your former Plan, at the NAV of that New
Class next determined after your reinstatement request is accepted in
good order by Boston Financial.
You may terminate tax-advantaged retirement Plan accounts and
reinstate the assets in another tax-advantaged retirement account
without any sales charge as often as you wish as long as the only
difference between the account registration of the former Plan account
and the new Plan account is the name of the type of tax-advantaged
retirement account. You may wish to consult with a tax adviser before
terminating a tax-advantaged retirement account.
If you terminated your former Plan and redeemed your shares under the
Cancellation and Refund Rights described on page __, you may not
reinstate the proceeds from such a cancellation or refund at NAV until
all refunded Creation and Sales Charges that were refunded in the
cancellation have been deducted from the amount being replaced. The
Plan Reinstatement privilege is separate from the Partial Liquidation
privilege described on page __.
When you reinstate your Plan, your new Plan will resume at the same
monthly investment number that would have been due if you had not
terminated your former Plan. Your Plan will be credited for all
monthly investments made to your former Plan. If your Plan was not
current when it was terminated and you had an unpaid balance on your
monthly investments under your former Plan, you will be responsible
for any monthly investments due on your former Plan. However, you will
not need to make up any monthly investment that would have been made
while your Plan was terminated. The total number of monthly
investments to be made on your Plan will remain the same.
The Sponsor may, from time to time, extend the Plan Reinstatement
privilege beyond the 90-day period on the terms described above. The
extended reinstatement period will not be available unless the Sponsor
has specified a time period during which the 90-day reinstatement
period has been extended.
You should recognize that if you terminate your Plan you may realize
a gain or loss for federal income tax purposes, but if you reinvest
some or all of the proceeds in your Destiny New Plan within 30 days of
that termination date, you may not recognize a loss for federal income
tax purposes.
18. COMPLETED PLANS AND EXCHANGES
Shares of completed or terminated Plans may be converted into shares
of the related Fund. Thereafter, Fund shares may be exchanged at NAV
for shares of any of the Fidelity Advisor Funds, subject to minimum
initial investment requirements. For more information, see "Exchange
Restrictions" on page F-__ of the Funds' prospectus.
Exchanges between the two Plans are not permitted, and shares of any
class of Destiny I held by a Plan may not be exchanged for shares of
any class of Destiny II, nor may shares of any class of Destiny II
held by a Plan be exchanged for shares of Destiny I.
19. TAXES
For tax purposes, you are treated as directly owning Fund shares. The
Fidelity Destiny Portfolios prospectus more fully describes how the
dividends and distributions that are paid to you or reinvested for you
may be taxable to you. You bear the responsibility for any taxes
payable with respect to any of the profits realized on sales or
transfers by the Custodian or Sponsor of Fund shares or other property
credited to your account in accordance with the provisions of your
Plan and for any taxes levied or assessed with respect to Fund shares
or the income from Fund shares, not the Custodian or Sponsor. For more
information, see "Taxes" on page F-__ of Funds' prospectus.
Appropriate notices about taxable distributions will be sent to you as
necessary.
The cost basis of your shares is the amount you paid for those
shares, including the Creation and Sales Charges and the cost of any
reinvested distributions. If you own a Destiny New Plan IRA and
itemize your deductions, you may be able to claim a miscellaneous
itemized deduction for any administrative or trustee fees incurred in
connection with that IRA if those fees are billed separately or paid
separately.
20. TERMINATION OF YOUR PLAN BY THE SPONSOR OR CUSTODIAN
Although a Plan may call for regular investments over a 10-year or
15-year period, neither the Sponsor nor the Custodian can terminate
your Plan until 300 investments have been made unless the Plan is in
default or unless shares of the Fund are not obtainable and a
substitution is not made. (See "Substitution of the Underlying
Investment" on page __.) Normally, a Plan is in default if no
investments have been made for six consecutive months. However, under
the current policy, a Plan is not in default if one investment has
been made during each six-month period of the calendar year. Although
the Sponsor does not currently intend to do so, the Sponsor reserves
the right to change the current default policy in the future. The
default period will not start until you have been given full credit
for the amount of any preinvestments you have made.
After 300 investments, or if other events justify termination, the
Sponsor or the Custodian may terminate your Plan with 60 days written
notice by mailing you notice of termination at the address shown on
your Plan account registration. The notice will request that you
choose to have the Plan distributed either in cash or in Fund shares
(together with the cash value of any fractional shares) after
deduction for all authorized charges, fees and expenses. Upon
termination, the Custodian, acting as your agent, may surrender for
liquidation either all of the Fund shares credited to your Plan or
sufficient Fund shares to pay all authorized deductions and leave no
fractional shares. The Fund shares and any cash remaining after paying
all authorized deductions will be held by the Custodian for delivery
to you.
No interest will be paid by the Custodian on any cash balances. If
you do not respond within 60 days after the notice of termination is
mailed to you, the Custodian, at its discretion, may at any time
thereafter fully discharge its obligations by mailing a check for the
liquidated value of the Fund shares to you. You will then have no
further rights under the Plan except that if the check is returned to
the Custodian undelivered, the Custodian will continue to hold these
assets for your benefit, subject only to escheat laws. The Custodian
has no obligation to pay interest on or to reinvest checks returned to
it.
SUBSTITUTION OF THE UNDERLYING INVESTMENT
The Sponsor may substitute the shares of another investment medium as
the underlying investment if it deems the substitution to be in the
best interest of Planholders. The substituted shares shall be
generally comparable in character and quality to the present Fund
shares, and shall be registered with the SEC under the Securities Act
of 1933. Before any substitution can be effected, the Sponsor must:
(a) obtain an order from the SEC approving the substitution;
(b) give written notice of the proposed substitution to the Custodian;
(c) give a written notice of the proposed substitution to each
Planholder that includes a reasonable description of the new fund
shares, with the advice that, unless the Plan is surrendered within 30
days of the date of the mailing of the notice, you will be considered
to have consented to the substitution and to have agreed to bear the
pro rata share of expenses and taxes in connection with it; and
(d) provide the Custodian with a signed certificate stating that
proper notice under these provisions has been given to each
Planholder.
If your Plan is not surrendered within 30 days from the date the
notice was sent to you, the Custodian shall purchase the new shares
for your Plan with any dividends or distributions which may be
reinvested for your Plan. If the new shares are also to be substituted
for the shares your Plan already holds, the Sponsor must arrange to
have the Custodian furnished, without payment of a sales charge or
fees of any kind, with new shares having an aggregate value equal to
the value of the shares for which they are to be exchanged.
If Fund shares are not available for purchase for a period of 120
days or longer, and the Sponsor fails to substitute other shares, the
Custodian may, but is not required to, either select another
underlying investment or terminate the Plan. If the Custodian selects
a substitute investment, it shall first obtain an order from the SEC
approving the substitution, as specified above, and then shall notify
each Planholder. If, within 30 days after mailing the required notice
to you, you give your written approval of the substitution and agree
to bear the pro rata share of actual expenses, including tax liability
sustained by the Custodian, the Custodian may thereafter purchase the
substituted shares. Your failure to give written approval of the
substitution within the 30-day period shall give the Custodian the
authority to terminate your Plan.
GENERAL
The terms of the Plans are set out in a Custodian Agreement which is
governed by the laws of the Commonwealth of Massachusetts. The Plans
are a unit investment trust under the Investment Company Act of 1940,
and are registered with the SEC. Registration with the SEC does not
imply supervision of management or investment practices or policies by
the SEC. No Plan certificates are available. Fidelity Destiny
Portfolios does not sell its shares directly to the public, except to
Fidelity employees investing through certain Fidelity retirement
plans. Fidelity Systematic Investment Plans are currently offered for
sale in all states. [Ohio salesmen must be registered under the Ohio
Bond Debenture Act. ]
In addition to the two New Plans offered in this prospectus, there
are currently two other series of Fidelity Systematic Investment
Plans, Destiny Initial Plans I and Destiny Initial Plans II. The fee
arrangements for the Initial Plans are different from those of the New
Plans. In general, investors in the Initial Plans pay a fixed
percentage of each investment in Creation and Sales Charges and also
pay directly for certain Custodian Fees and other administrative
expenses. In contrast, investors in the New Plans do not pay Creation
and Sales Charges after the first twelve investments and do not pay
directly for the Custodian Fees and other administrative expenses paid
by the Initial Plans. However, investors in the New Plans indirectly
pay certain 12b-1 fees and transfer agent fees that are charged to the
class of the underlying Fund's shares in which the New Plan invests.
A copy of a separate prospectus describing the two Initial Plans in
detail is available from your investment professional or from Fidelity
Distributors Corporation.
In determining which Plan is appropriate for you, you should
consider, among other factors, the size and term of the Plan in which
you plan to invest and your ability to qualify for lower creation and
sales charges. In general, the larger the amount of each monthly
payment in your Plan and the longer the term of your Plan, the more
likely it is that the total expenses you would pay under the Initial
Plan will be less than the total expenses you would pay under the New
Plan. The actual amount that you pay under the New Plan, however,
will depend on a number of factors, including the performance of the
underlying Fund and whether you continue to hold your investment in
the underlying Fund after you have completed or terminated your Plan.
You should consult with your investment professional as to which Plan
is the most appropriate for you.
The organization, management and investment policies of Fidelity
Destiny Portfolios are fully described in the Funds' prospectus
beginning on page F-1. Generally, shares of the Funds are purchased at
NAV within two business days of the date the Custodian receives Plan
investments. Dividends and distributions received on Fund shares will
be reinvested by the Custodian, after making authorized deductions, in
additional shares of the Fund at the then-current NAV unless otherwise
directed by the Sponsor or unless you direct Boston Financial to remit
them to you in cash.
Commissions ranging from 41.7% to 92.4% of the total Creation and
Sales Charges will be paid to authorized investment broker-dealer
firms and mutual fund dealers that are members of the NASD and have
executed a Destiny Selling Dealer Agreement with the Sponsor. From
time to time the Sponsor may increase the commissions paid to
broker-dealer firms to 100%. 12b-1 fees may also be paid to these
broker-dealers. Also, the Sponsor may, at its expense, provide
promotional incentives such as sales contests and luxury trips to
investment professionals who support the sale and service of the
Destiny New Plans without reimbursement from the Fidelity Destiny
Portfolios. In some instances, these incentives may be offered only to
certain investment professionals whose representatives provide
services in connection with the sale or expected sale of significant
amounts of Destiny New Plans. These broker-dealers are independent
contractors. Nothing in this prospectus or in other literature or
confirmations issued by the Sponsor, the Custodian or Boston Financial
including the words "representative" or "commission," makes any
broker-dealer, a partner, employee or agent of the Sponsor, the
Custodian or Boston Financial. Neither the Sponsor, the Custodian nor
Boston Financial shall be liable for any acts or obligations of any
dealer or investment broker.
THE CUSTODIAN
State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts, is the Custodian for the Plans under a Custodian
Agreement with the Sponsor and maintains custody of the Plans. Plan
services are provided by the Custodian or its affiliated bookkeeping
and administrative service agent, Boston Financial Data Services, Inc.
(Boston Financial). Acting as your agent, the Custodian assumes the
responsibility for the many administrative details of your Plan.
All correspondence should be directed to Boston Financial Data
Services, Inc., P.O. Box 8300, Boston, Massachusetts 02266-8300.
The Custodian has delegated certain administrative functions to
Boston Financial, an affiliate of the Custodian. Under the delegation
arrangement, the Custodian pays to Boston Financial all or a portion
of the fees and charges made in the course of performing the
administrative functions. Boston Financial mails to each Planholder a
receipt for each investment, a statement of the number of shares held
in the Plan, notices, including distribution notices and tax
statements, reports to shareholders, prospectuses and proxy material.
You send your investments into the Plans to Boston Financial. After
making authorized deductions, Boston Financial applies the money to
the purchase of Fund shares. Investments in Destiny New Plans I
purchase shares of the New Class of Destiny I. Investments in Destiny
New Plans II purchase shares of the New Class of Destiny II. The
Custodian holds these Fund shares in its custody, receiving dividends
and distributions that, at your option, may be remitted either to you
or reinvested in additional Fund shares.
The Custodian causes periodic audits to be taken of the records it
maintains relating to the Plans, unless those audits are arranged for
by the Sponsor, and prepares certain other reports required by law.
The Custodian has assumed only those obligations specifically imposed
on it under the Custodian Agreement with the Sponsor. These
obligations do not include the duties of investment ordinarily imposed
upon a trustee. The Custodian has no responsibility for the choice of
the underlying investment, for the investment policies and practices
of the manager of the Fund or for the acts or omissions of the
Sponsor.
The Custodian Agreement cannot be amended to affect your rights and
privileges without your written consent, nor may the Custodian resign
unless a successor has been designated and has accepted the
Custodianship. That successor must be a bank or trust company that has
capital, surplus and undivided profits totaling at least $2,000,000.
The Custodian may be changed without notice to you or your approval.
The Custodian may terminate its obligation to accept new Plans for
custodianship if the Sponsor fails to perform certain activities it is
required to perform under the Custodian Agreement or if the Custodian
terminates its custodianship on 90 days' notice after the third year
of the term of the Custodian Agreement, or on 30 days' notice after
the expiration of any further two-year period.
THE SPONSOR
Fidelity Distributors Corporation (Distributors or Sponsor), 82
Devonshire Street, Boston, Massachusetts 02109, is a Massachusetts
corporation organized on July 18, 1960. It is a broker-dealer
registered under the Securities Exchange Act of 1934 and a member of
the NASD. The Sponsor's Directors and Executive Officers are listed
below.
Edward C. Johnson 3d, Director, is Chairman, Chief Executive Officer
and a Director of FMR Corp., a Director and Chairman of the Board and
of the Executive Committee of FMR; Chairman and a Director of Fidelity
Investments Money Management, Inc. (1988 - present), Fidelity
Management & Research (U.K.) Inc., and Fidelity Management & Research
(Far East) Inc. He is Trustee and President of Fidelity's mutual
funds. Abigail Johnson, Vice President of certain Fidelity equity
funds, is Mr. Johnson's daughter.
James C. Curvey, Director (1997), is President of FMR Corp. (1998 -
present).
Martha B. Willis, President and Director, (1997 - present).
Kevin J. Kelly, Vice President, (1997 - present).
Eric D. Roiter, Vice President and Clerk, is Vice President, General
Counsel and Clerk of FMR (1998 - present).
Caron Ketchum, Treasurer and Controller (1995 - present).
Gary Greenstein, Assistant Treasurer (1995 - present).
Jay Freedman, Assistant Clerk (1996 - present).
Linda Capps Holland, Compliance Officer (1995 - present).
During the twelve months ended September 30, 1998, officers of the
Sponsor received no compensation from the Sponsor for their services
to the Sponsor. All officers and employees of the Sponsor are
currently covered by a broker's blanket bond in the amount of
$220,000,000.
Plans may be purchased and investments in those Plans may be made at
NAV by the Trustees of the Funds, directors, officers and full-time
employees of FMR Corp. or its direct or indirect subsidiaries, and
employee benefit plans covering employees of FMR Corp. or its
affiliates provided that the purchases are made for investment
purposes and that the shares will not be resold except to the
Custodian or to the Funds.
The Sponsor is an affiliate of FMR, which is a wholly owned
subsidiary of FMR Corp. The Sponsor is principal underwriter for other
Fidelity funds whose shares are offered for sale to the public and is
sponsor for other unit investment trusts for accumulation of shares of
certain other Fidelity funds. FMR is adviser to the funds in the
Fidelity family of funds.
GLOSSARY
COMPLETED PLAN: A Plan is complete once the Face Amount of the Plan
has been invested.
CONTRACTUAL PLAN: A type of capital accumulation plan in which the
investor makes a firm commitment to invest a specific amount of money
in a fund during a specified time period.
CURRENT PLAN: A plan in which there are at least as many investments
recorded as there are months elapsed since establishment of the plan.
A Completed Plan that has not been redeemed is a Current Plan.
Tax-advantaged retirement plans are Current Plans.
DOLLAR-COST AVERAGING: A system of buying fixed dollar amounts of
securities at regular intervals, regardless of the price of the
shares. This method may result in an average cost that is lower than
the average price at which the securities were purchased because an
investment of a fixed dollar amount buys more shares when the share
price is low and fewer shares when the share price is high.
FACE AMOUNT: The total dollar amount of investments needed to complete
a particular plan. For example, a $300 per month, 15-year plan would
have a Face Amount of $54,000.
FACE CHANGE: Increasing or decreasing the dollar amount needed to
complete a particular plan is known as a Face Change.
MUTUAL FUND: An investment company that pools capital from
shareholders and invests in stocks, bonds, options, or other
securities. Mutual funds offer investors the advantages of
diversification and professional management.
RIGHTS OF ACCUMULATION: The right to reduce the Creation and Sales
Charges paid on two or more Plans based on the total Face Amount of
the Plans.
SYSTEMATIC INVESTMENT PLAN OR PERIODIC PAYMENT PLAN: An investment
program in which an investor invests a specified amount of money in a
fund at regular intervals. A Contractual Plan is a special type of
systematic investment plan.
UNIT INVESTMENT TRUST (UIT): An investment company that has its own
portfolio of securities in which it invests. It sells interests in
this portfolio in the form of redeemable securities. Unit investment
trusts are organized under a trust indenture, not a corporate charter.
FIDELITY SYSTEMATIC INVESTMENT PLANS: DESTINY PLANS I
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
September 30, 1998
ASSETS:
Securities of investment company:
241,669,303
shares of Destiny I held for investors,
valued at net asset value of $24.58 per
share (Note 1)
(average cost $3,851,390,103) $ 5,940,231,473
Cash 222,414
Receivable for Destiny I shares sold 190,478
Total assets 5,940,644,365
LIABILITIES:
Payable for Destiny I shares purchased $ 331,469
Payable to custodian, sponsor and
broker/dealer (Note 4) 1,058,184
Total liabilities 1,389,653
NET ASSETS (Note 2) $ 5,939,254,712
Statements of Operations
Year Ended Year Ended Year Ended
September 30, September 30, September 30,
1998 1997 1996
INVESTMENT INCOME:
Distributions received
on shares of Destiny I
from:
Net investment income $ 106,844,269 $ 96,561,988 $ 89,281,971
EXPENSES (Note 4):
Custodian Fees 415,994 394,357 367,960
Administrative expenses 571,646 601,473 585,608
Net expenses 987,640 995,830 953,568
Net investment income 105,856,629 95,566,158 88,328,403
REALIZED AND
UNREALIZED GAIN ON
INVESTMENTS:
Complete and partial
liquidations, including
Destiny I shares
delivered
to investors at
market value:
Proceeds received 391,959,152 311,271,265 239,729,317
Cost of Destiny I
shares (243,294,998) (211,499,168) (176,894,004)
Net realized gain on
Plan liquidations 148,664,154 99,772,097 62,835,313
Net (decrease)/increase
in unrealized
appreciation (210,974,989) 993,262,758 300,213,194
Net realized and
unrealized gain/(loss)
on Plan shares (62,310,835) 1,093,034,855 363,048,507
Distributions received
on shares of Destiny I
from
net realized gains
on investments 461,476,309 371,227,198 168,182,318
Net increase in net
assets resulting from
operations $505,022,103 $1,559,828,211 $619,559,228
DESTINY PLANS I - FINANCIAL STATEMENTS - CONTINUED
Statements of Changes in Net Assets Invested in Shares of Destiny
I
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Year Ended Year Ended Year Ended
September 30, 1998 September 30, 1997 September 30, 1996
Amount Shares Amount Shares Amount Shares
Net assets at
beginning of
period $ 5,726,389,970 228,364,289 $ 4,391,840,146 215,228,493 $ 3,908,031,571 208,146,062
Additions during period:
From investor
payments 164,550,079 119,944,885 123,968,130
Less: creation and
sales charges
(Note 4) (5,911,794) (4,415,669) (4,613,942)
Custodian Fees
and insurance
premiums
(Note 4) (816,861) (832,079) (879,688)
Balance invested in
Destiny I shares 157,821,424 6,409,698 114,697,137 5,401,996 118,474,500 6,323,547
Net investment income
and
net realized gains on
investments 567,332,938 466,793,356 256,510,721
Less: Cash
distributions
to investors (58,019,633) (28,704,259) (14,495,836)
Balance reinvested in
Destiny I shares 509,313,305 22,269,509 438,089,097 21,927,033 242,014,885 13,211,616
Net realized gain on
Plan liquidations 148,664,154 99,772,097 62,835,313
Net increase/(decrease)
in unrealized
appreciation (210,974,989) 993,262,758 300,213,194
Total 6,331,213,864 257,043,496 6,037,661,235 242,557,522 4,631,569,463 227,681,225
Deductions during period:
Redemptions and
cancellations of
Destiny I shares (391,959,152) (15,374,193) (311,271,265) (14,193,233) (239,729,317) (12,452,732)
Net assets at end
of period $ 5,939,254,712 241,669,303 $ 5,726,389,970 228,364,289 $ 4,391,840,146 215,228,493
</TABLE>
FIDELITY SYSTEMATIC INVESTMENT PLANS: DESTINY PLANS II
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
September 30, 1998
ASSETS:
Securities of investment company: 274,615,300
shares of Destiny II held for investors,
valued at net asset value of $14.07
per share (Note 1)
(average cost $2,768,491,216) $ 3,863,837,271
Cash 3,035,690
Receivable for Destiny II shares sold 3,087
Total assets 3,866,876,048
LIABILITIES:
Payable for Destiny II shares
purchased $ 2,692,311
Payable to custodian, sponsor and
broker/dealer (Note 4) 2,161,133
Total liabilities 4,853,444
NET ASSETS (Note 2) $ 3,862,022,604
Statements of Operations
Year Ended Year Ended Year Ended
September 30, September 30, September 30,
1998 1997 1996
INVESTMENT INCOME:
Distributions received
on shares of Destiny
II from:
Net investment income $ 61,646,651 $ 161,931,472 $ 42,663,716
EXPENSES (Note 4):
Custodian Fees 526,319 446,865 367,638
Administrative
expenses 1,359,835 1,219,410 1,204,257
Net expenses 1,886,154 1,666,275 1,571,895
Net investment
income 59,760,497 160,265,197 41,091,821
REALIZED AND
UNREALIZED GAIN
ON INVESTMENTS:
Complete and partial
liquidations, including
Destiny II shares
delivered to investors
at market value:
Proceeds received 357,872,401 150,705,546 115,283,136
Cost of Destiny II
shares (236,739,289) (106,291,151) (82,011,653)
Net realized gain on
Plan liquidations 121,133,112 44,414,395 33,271,483
Net (decrease)/increase
in unrealized
appreciation (188,590,035) 625,457,740 185,902,326
Net realized and
unrealized gain/(loss)
on Plan shares (67,456,923) 669,872,135 219,173,809
Distributions received
on shares of Destiny II
from
net realized gains on
investments 239,189,005 53,977,157 59,856,556
Net increase in net
assets resulting from
operations $ 231,492,579 $ 884,114,489 $ 320,122,186
DESTINY PLANS II - FINANCIAL STATEMENTS - CONTINUED
Statements of Changes in Net Assets Invested in Shares of Destiny
II
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Year Ended Year Ended Year Ended
September 30, 1998 September 30, 1997 September 30, 1996
Amount Shares Amount Shares Amount Shares
Net assets at
beginning of
period $ 3,505,991,367 243,583,375 $ 2,465,355,584 212,482,392 $ 1,978,480,817 187,243,794
Additions during period:
From investor
payments 516,456,857 338,228,567 311,357,075
Less: creation and
sales charges
(Note 4) (27,033,563) (27,036,368) (26,843,231)
Custodian Fees
(Note 4) (2,160,566) (2,062,876) (1,961,326)
Balance invested in
Destiny II shares 487,262,728 32,903,678 309,129,323 24,641,643 282,552,518 26,251,535
Net investment income and
net realized gains on
investments 298,949,502 214,242,354 100,948,377
Less: Cash
distributions
to investors (4,851,669) (1,902,483) (516,801)
Balance reinvested in
Destiny II shares 294,097,833 22,061,716 212,339,871 18,308,982 100,431,576 9,616,656
Net realized gain
on Plan liquidations 121,133,112 44,414,395 33,271,483
Net increase/(decrease)
in
unrealized appreciation (188,590,035) 625,457,740 185,902,326
Total 4,219,895,005 298,548,769 3,656,696,913 255,433,017 2,580,638,720 223,111,985
Deductions during period:
Redemptions and
cancellations of
Destiny II shares (357,872,401) (23,933,469) (150,705,546) (11,849,642) (115,283,136) (10,629,593)
Net assets at end
of period $ 3,862,022,604 274,615,300 $ 3,505,991,367 243,583,375 $ 2,465,355,584 212,482,392
</TABLE>
Shares have been adjusted for a 3 - for - 1 split (see note 3).
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES: The Plans are a unit investment
trust registered under the Investment Company Act of 1940, as amended,
with the Securities and Exchange Commission, investing only in shares
of Fidelity Destiny Portfolios: Destiny I and Destiny II (the
"Funds"). Destiny Plans I is for the accumulation of shares of
Fidelity Destiny Portfolios: Destiny I; Destiny Plans II is for the
accumulation of shares of Fidelity Destiny Portfolios: Destiny II.
The financial statements have been prepared in conformity with
generally accepted accounting principles for unit investment trusts
which permit management to make certain estimates and assumptions at
the date of the financial statements. The following summarizes the
significant accounting policies of the Plans:
SECURITY VALUATION. The investments in shares of Fidelity Destiny
Portfolios: Destiny I and Destiny II are valued at each of the Fund's
respective bid market price which is equal to the net asset value per
share of each Fund at period end.
FEDERAL INCOME TAXES. No provisions are made for federal income
taxes. All income dividends and capital gain distributions received by
investors are treated as if received directly from the underlying
Fund. A Planholder will not realize any gain or loss upon withdrawal
from the Plans when transferring to an account for direct ownership of
the underlying Fund shares. Any liquidation by a Planholder of a Fund
will be treated as if the underlying Fund shares were sold.
TRANSACTION DATES. Share transactions are recorded on the trade
date. Dividend income and capital gain distributions are recorded on
the ex-dividend date.
COST METHOD. The investment in shares of each Fund at cost is based
on average cost, which represents the amount available for investment
(including reinvested distributions of net investment income and
realized gains) in such shares after deduction of sales charges,
custodian fees, and insurance fees, if applicable.
RECLASSIFICATIONS. To conform to the 1998 presentation, net
realized gains on investments have been reclassified from investment
income to realized and unrealized gain on investments. This
reclassification had no effect on net increase in net assets resulting
from operations or distributions for any period.
2. PLAN ASSETS
Destiny Plans I assets consisted of the following at September 30,
1998:
Systematic
Systematic Investment
Investment Plans with Total of
Plans Insurance All Plans
Payments received
from investors on
outstanding Plans $ 1,495,713,703 $ 923,564 $ 1,496,637,267
Deduct:
Sponsor fees 75,003,857 48,953 75,052,810
Custodian Fees 10,915,815 9,882 10,925,697
Insurance
premiums 0 27,500 27,500
Total
deductions 85,919,672 86,335 86,006,007
Net payments
invested in shares
of Destiny I 1,409,794,031 837,229 1,410,631,260
Add:
Distributions from
investment income
reinvested 391,449,488 990,364 392,439,852
Distributions from
realized gains
reinvested 2,043,478,817 4,840,174 2,048,318,991
Unrealized
appreciation in
Destiny I shares
held at September
30, 1998 2,084,927,677 3,913,693 2,088,841,370
Deduct:
Fees payable (976,742) (19) (976,761)
Net assets $ 5,928,673,271 $ 10,581,441 $ 5,939,254,712
NOTES TO FINANCIAL STATEMENTS - CONTINUED
2. PLAN ASSETS - CONTINUED
Destiny Plans II assets consisted of the following at September
30, 1998:
Systematic
Investment
Plans
Payments received from investors on
outstanding Plans $ 2,131,977,046
Deduct:
Sponsor fees 195,056,353
Custodian Fees 14,838,053
Total deductions 209,894,406
Net payments invested in shares of Destiny II 1,922,082,640
Add:
Distributions from investment income reinvested 146,403,007
Distributions from realized gains reinvested 700,005,569
Unrealized appreciation in Destiny II shares
held at
September 30, 1998 1,095,346,055
Deduct:
Fees payable (1,814,667)
Net assets $ 3,862,022,604
3. CAPITAL SHARES: On January 18, 1997, the Trustees of Destiny II
approved a three-for-one stock split of the capital shares of Destiny
II for shareholders of record as of June 21, 1997. A total of
139,172,552 capital shares of Destiny II were issued to Destiny Plans
II in connection with the split. Share amounts in the accompanying
financial statements have been restated to reflect the aforementioned
split.
4. EXPENSES AND DEDUCTIONS: For information regarding Creation and
Sales Charges, Custodian Fees, and Administrative expenses see page
of this Prospectus.
Fidelity Distributors Corporation, a wholly owned subsidiary of FMR
Corp. and sponsor of Fidelity Systematic Investment Plans, received
approximately $1,152,000, $1,427,000, and $812,000 as its portion of
the Creation and Sales Charges on sales of Plans I during the years
ended September 30, 1998, 1997, and 1996, respectively and $2,126,000,
$2,908,000, and $3,285,000 on sales of Plans II during the years ended
September 30, 1998, 1997, and 1996, respectively.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Directors of Fidelity Distributors Corporation and Investors
under Fidelity Systematic Investment Plans: Destiny Plans I and
Destiny Plans II:
In our opinion, the accompanying statements of assets and
liabilities and the related statements of operations and of changes in
net assets invested in shares of Fidelity Systematic Investment Plans:
Destiny Plans I and Destiny Plans II (the "Plans") present fairly, in
all material respects, the financial position of the Plans at
September 30, 1998, the results of their operations for each of the
three years in the period then ended and the changes in their net
assets for each of the three years in the period then ended, in
conformity with generally accepted accounting principles. These
financial statements are the responsibility of the Plan's management;
our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
November 12, 1998
FIDELITY DISTRIBUTORS CORPORATION
(A WHOLLY-OWNED SUBSIDIARY OF FMR CORP.)
STATEMENT OF FINANCIAL CONDITION
as of December 31, 1997
(in thousands except for share amounts)
ASSETS
Cash $ 128
Receivables:
Brokers, dealers, and customers 34,447
Other 20,678
Investments, at market (cost $17,805) 17,963
Property and equipment, net 6,018
Other assets 62,707
Total Assets $ 141,941
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Payable to mutual funds $ 34,412
Other liabilities 439
Total Liabilities 34,851
Stockholder's equity:
Preferred stock, 5% noncumulative, $100 par value;
authorized 5,000 shares;
issued and outstanding 4,750 shares 475
Common stock, $1 par value; authorized 1,000,000 shares;
issued and outstanding 1,061 shares 1
Additional paid-in capital 13,494
Retained earnings 130,171
144,141
Less: Receivable from parent company (37,051)
Total Stockholder's Equity 107,090
Total Liabilities and Stockholder's Equity $ 141,941
The accompanying notes are an integral part of this financial
statement.
FIDELITY DISTRIBUTORS CORPORATION
(A WHOLLY-OWNED SUBSIDIARY OF FMR CORP.)
NOTES TO STATEMENT OF FINANCIAL CONDITION
A. PRINCIPAL BUSINESS ACTIVITIES:
Fidelity Distributors Corporation ("FDC" or the "Company") is a
registered broker/dealer under the Securities Exchange Act of 1934.
The Company is the principal underwriter and distributor of mutual
funds under agreements with funds managed by an affiliate, Fidelity
Management & Research Company and is the sponsor of Fidelity Destiny
Plans. A division of Fidelity Distributors Corporation provides mutual
fund transfer agent services and other processing functions on behalf
of affiliated companies.
B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
USE OF ESTIMATES
The preparation of the statement of financial condition in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities as of December 31, 1997. Actual
results could differ from the estimates included in the statement of
financial condition.
INCOME TAXES
The Company is included in the consolidated federal and certain
state income tax returns filed by FMR Corp.
The Company's deferred tax asset at December 31, 1997 approximated
$3,561,000. The principal sources of temporary differences relate to
deferred compensation, pension expense, and depreciation.
INVESTMENTS
Investments, comprised of shares held in Fidelity mutual funds, are
stated at market value.
PROPERTY AND EQUIPMENT
Property and equipment is stated at cost less accumulated
depreciation and amortization. Depreciation is computed over the
estimated useful lives of the related assets, which vary from three to
five years, using primarily the straight line method. Leasehold
improvements are amortized over the lesser of their economic useful
life or the term of the lease. Maintenance and repairs are charged to
operations when incurred. Renewals and betterments of a nature
considered to materially extend the useful lives of the assets are
capitalized. Internally developed software is expensed as incurred.
Any gain or loss on the sale or retirement of property and equipment
is included in net income.
OTHER ASSETS
Other assets includes deferred charges in the amount of $58,681,000
net of amortization of $20,106,000. These deferred charges represent
dealer concessions paid to dealers of funds that are subject to
contingent deferred sales charges. The charges are amortized over the
term of the contingent deferred sales charge.
FIDELITY DISTRIBUTORS CORPORATION
(A WHOLLY-OWNED SUBSIDIARY OF FMR CORP.)
NOTES TO STATEMENT OF FINANCIAL CONDITION (continued)
C. TRANSACTIONS WITH AFFILIATED COMPANIES:
FDC is party to several arrangements with affiliated companies.
Under these arrangements, FDC charged these affiliates for shareholder
services, marketing and distribution expenses and other administrative
services and was charged for commission expenses, promotional
expenses, equipment processing services, and occupancy expenses. In
addition, certain direct and indirect expenses incurred in connection
with the underwriting and distribution of Fidelity mutual fund shares
are borne by affiliated companies.
FDC participates in FMR Corp.'s noncontributory defined benefit
pension plan covering all of its eligible employees. There are no
statistics available for the actuarial data of this separate company.
There are no unfunded vested benefits relating to employees of
FDC.
FDC also participates in FMR Corp.'s defined contribution profit
sharing and retirement plans covering substantially all employees.
Annual contributions to the plans are based on either stated
percentages of eligible employee compensation or employee
contributions.
All intercompany transactions are charged or credited through an
intercompany account with FMR Corp. and may not be the same as those
which would otherwise exist or result from agreements and transactions
among unrelated parties. The Company receives credit for the
collection of its receivables and is charged for the settlement of its
liabilities through its intercompany account with FMR Corp. Under an
agreement with FMR Corp., the Company offsets liabilities to
affiliated companies which will ultimately be settled by FMR Corp. on
behalf of the Company against its receivable from FMR Corp.
D. PROPERTY AND EQUIPMENT:
Property and equipment consists of the following (in
thousands):
Equipment $ 27,041
Leasehold improvements 54
Furniture and fixtures 1,438
28,533
Less: Accumulated depreciation and amortization 22,515
$ 6,018
FIDELITY DISTRIBUTORS CORPORATION
(A WHOLLY-OWNED SUBSIDIARY OF FMR CORP.)
NOTES TO STATEMENT OF FINANCIAL CONDITION (continued)
E. NET CAPITAL REQUIREMENT:
FDC is subject to the Securities and Exchange Commission's Uniform
Net Capital Rule (Rule 15c3-1), which requires the maintenance of
minimum net capital and requires that the ratio of aggregate
indebtedness to net capital, both as defined, shall not exceed 15 to
1. At December 31, 1997, FDC had net capital of $16,996,000 which was
$16,967,000 in excess of its required net capital of $29,000.
Additionally, the ratio of aggregate indebtedness to net capital at
December 31, 1997 was 0.03 to 1.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholder of Fidelity Distributors
Corporation
(A Wholly-Owned Subsidiary of FMR Corp.):
We have audited the accompanying statement of financial condition
of Fidelity Distributors Corporation as of December 31, 1997. This
financial statement is the responsibility of the Company's management.
Our responsibility is to express an opinion on this financial
statement based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statement is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statement referred to above presents
fairly, in all material respects, the financial position of Fidelity
Distributors Corporation as of December 31, 1997 in conformity with
generally accepted accounting principles.
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 28, 1998
- - - - - - - - - - - - - Page 1 of Application - - - - - - - - - - - -
PLANS APPLICATION
FIDELITY DESTINY I OR DESTINY II
GENERAL INSTRUCTIONS
1. Please print clearly with a ballpoint pen.
IMPORTANT: Application must be signed by both the Applicant(s)
and Dealer.
A 2. DETACH AND MAIL WITH THE INITIAL INVESTMENT TO:
P Boston Financial Data Services, Inc.
P P.O. Box 8300
L Boston, MA 02266-8300
I
C Note: (small solid bullet) If you have completed the
A Preauthorized Check Transaction Form a voided check MUST
T BE ATTACHED.
I
O (small solid bullet) If you would like BFDS to
N automatically withhold 28% from all distributions the
Federal Income Tax Withholding form must be attached.
3. If registering an account under the Uniform Gifts/Transfers to
Minors Act, only one Custodian and one minor are allowed per
account.
4. If registering an account as: individual, joint tenants, or
custodial account under the Uniform Gifts/Transfers to Minors
Act; then supply the Social Security Number of the registered
account owner who is to be taxed. If registering as a Uniform
Gifts/Transfers to Minors, the child is the registered account
owner. If registering an account as a trust, a corporation,
partnership, organization, etc.; then supply the Employer
Identification Number of the legal entity or organization that
will report income and/or gains.
(Complete and sign reverse side)
- - - - - - - - - - - - - Page 2 of Application - - - - - - - - - - - -
DESTINY PLANS APPLICATION .
.
PLEASE CHECK ONE DESTINY PLANS I __ OR DESTINY PLANS II __ .
.
Monthly Investment Unit: $______ My objective in adopting a long- .
Total Plan Amount: $______ term Plan of this nature is to .
Initial investment accumulate Fund Share for _________ .
submitted herewith: $______ Special Pricing .
No. of Investments applicable? Yes __ No __ .
__120 __180 If yes, associated account names .
(10-yr. Plan) (15-yr. Plan) and/or numbers and monthly .
investment unit .
__________________ $_______________ .
__________________ $_______________ .
__________________ $_______________ .
.
REGISTER PLAN .
AS FOLLOWS: .
(PLEASE PRINT Special Pricing Breakpoint .
OR TYPE) ________________________ _________________________ .
REGISTRANT'S TAXPAYER (DEALER-USE) .
IDENTIFICATION NUMBER OR .
SOCIAL SECURITY NUMBER .
.
Individual__________________________________________________________ .
(First) (Middle Initial) (Last) .
.
Joint Tenant________________________________________________________ .
(First) (Middle Initial) (Last) .
(Please Print Name of Joint Registrant, if desired) (dagger) T
E
Gifts/Transfers to Minors___________as Custodian for _______________ A
(Custodian) (Minor) R
under the ___________ Uniform Gifts/Transfers to Minors Act. O
State N
Mailing Address ____________________________________________________ D
Street City State Zip O
T
Occupation _________________________________________________________ T
(If Military give serial Citizen of Birth Date E
#, Rank and Branch) D
SIGNATURE: I (We) am (are) of legal age, have received and read L
Prospectuses for the Plans and Fidelity Destiny Funds: Destiny I I
and Destiny II and agree to their terms. As required by federal N
law, I (we) certify under penalties of perjury (1) that the Social E
Security or Taxpayer Identification Number provided above is .
correct and (2) that the IRS has never notified me (us) that I .
(we) am (are) subject to 31% backup withholding, OR has notified .
me (us) that I (we) am (are) no longer subject to such backup .
withholding. (Note: If part (2) of this sentence is not true in .
your case, please strike out that part before signing.) I .
(we) understand that you will comply with instructions given by .
one registrant on joint accounts. Furthermore, I (we) hereby .
ratify any instructions, including telephone instructions or, .
for joint accounts, written instructions signed by one .
registrant , given on this account and agree that the Plans, .
Fidelity Destiny Portfolios : Destiny I and Destiny II, .
Boston Financial Data Services , Inc. , and State Street .
Bank and Trust Company will not be liable for any loss, .
cost, or expense for acting upon such instructions (by telephone .
or in writing) believed by one or more of them to be genuine and .
in accordance with reasonable procedures designed to prevent .
unauthorized transactions. MUTUAL FUND SHARES ARE NOT DEPOSITS .
OR OBLIGATIONS OF, OR GUARANTEED BY, ANY DEPOSITORY INSTITUTION. .
SHARES ARE NOT INSURED BY THE FDIC, FEDERAL RESERVE BOARD OR ANY .
OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISKS, INCLUDING .
POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED. .
.
__ I do not want the Telephone Redemption Privilege. .
.
MUST Date__________19____At____________________________________ .
COMPLETE City State .
X___________________________ X____________________________ .
Signature of Signature of Joint .
Registrant/Custodian Registrant (if any)(dagger) .
.
A Preauthorized Check Form (dagger) If Joint .
is attached: Yes__ No __ Registrant, both the .
Monthly Investment Date: 1st__ 15th__ Registrant and Joint .
A Federal Tax Withholding Registrant must sign, .
Form is attached: Yes__ No __ and joint tenancy with .
Check box for Government right of survivorship will .
Allotment: __ be created unless another .
form of ownership is .
clearly indicated. .
.
Preassigned account number .
if applicable ___________ .
.
MAKE ALL CHECKS PAYABLE TO DESTINY PLANS I OR DESTINY PLANS II .
____________________________________________________________________ .
DEALER ONLY SECTION .
IF DOCUMENTATION IS TO BE MAILED .
TO REPRESENTATIVE, PLEASE CHECK .
AND PROVIDE ADDRESS BELOW. __ .
DEALER'S NO. _ _ _ _ _ - _ _ _ REPRESENTATIVE'S NO. _ _ _ _ .
.
_______________________________ _________________________________ .
Firm Name (Print) Representative's Name (Print) .
.
_______________________________ _________________________________ .
Home Office Address (Print) Branch Address (Print) .
.
_______________________________ _________________________________ .
.
X______________________________ X________________________________ .
Authorized Signature of Dealer Representative's Signature .
.
MAIL APPLICATION AND INITIAL INVESTMENT TO BOSTON FINANCIAL DATA .
SERVICES, INC., P.O. BOX 8300, BOSTON, MA 02266-8300 .
- - - - - - - - - - - - - Page 3 of Application - - - - - - - - - - - -
.
. PREAUTHORIZED CHECK TRANSACTION FORM
. FOR STATE STREET BANK AND TRUST COMPANY
. FIDELITY SYSTEMATIC INVESTMENT PLANS
.
. PLEASE PRINT CLEARLY WITH A BALLPOINT PEN;
. __________________________________________________________________
.
. Plan Name: Please Check Account Monthly Account
. Number Amount Registration
.
. Destiny Plans I __ Destiny Plans II __ ___________________________
. Destiny Plans I __ Destiny Plans II __ ___________________________
. Destiny Plans I __ Destiny Plans II __ ___________________________
. Destiny Plans I __ Destiny Plans II __ ___________________________
.
. Monthly Investment Date:( )1st or ( ) 15th (Should coincide with
. Plans Application)
.
. Month to Begin:______(Please note: Authorization to begin or
. change draft must be received no later than FIFTEEN BUSINESS DAYS
. prior to date of request change. Authorization to cancel a draft
. must be received no later than FIVE BUSINESS DAYS prior to date of
. requested cancellation.)
.
. A VOIDED CHECK MUST BE ATTACHED.
.
T I (We) hereby request that the State Street Bank and Trust
E Company collect deposits of funds to be made by me (us)
A monthly, pursuant to my (our) investment plan(s) described
R below by drawing checks to its own order on my (our)
account(s).
O
N X_________________________________________ __________________
X_________________________________________ __________________
D Signature of Depositor(s) Date
O
T
T AUTHORIZATION TO HONOR CHECKS DRAWN BY STATE STREET BANK AND TURST
E COMPANY
D ___________________________________________________________________
Please print clearly As a convenience to me, I (we) hereby
L with a ballpoint pen; request and authorize you to pay and charge
I it will be used as a my (our) account with checks drawn on my
N mailing label to (our) account by, and payable to, the order
E notify your bank. of the State Street Bank and Trust Company.
. ____________________ I (we) agree that your rights in regard to
. Bank Name each such check shall be the same as if the
. ____________________ check were drawn on you and personally by me
. Street/P.O.Box (us). This authority is to remain in effect
. ____________________ until revoked in writing, and until you
. City,State,ZIP actually receive wuch notice, I (we) agree
. ____________________ that you shall be fully protected on
. Bank Acct.# honoring any such check.
. X___________________
. X___________________ I (We) further agree that if any such check
. Name of Depositor(s) be dishonored, whether with or without
. cause, and whether unintentionally or
. inadvertently you shall be under no
. liability whatsoever.
. X___________________________________________
. X___________________________________________
. Signature of Depositor(s)
.
. MAIL TO BOSTON FINANCIAL DATA SERVICES, INC., P.O. BOX 8300, BOSTON,
. MA 02266-8300
. BFDS COPY
- - - - - - - - - - - - - Page 4 of Application - - - - - - - - - - - -
. PREAUTHORIZED CHECK TRANSACTION FORM
. FOR STATE STREET BANK AND TRUST COMPANY
. FIDELITY SYSTEMATIC INVESTMENT PLANS
.
. PLEASE PRINT CLEARLY WITH A BALLPOINT PEN;
. _______________________________________________________________
.
. Plan Name: Please Check Account Monthly Account
. Number Amount Registration
.
. Destiny Plans I __ Destiny Plans II __ ___________________________
. Destiny Plans I __ Destiny Plans II __ ___________________________
. Destiny Plans I __ Destiny Plans II __ ___________________________
. Destiny Plans I __ Destiny Plans II __ ___________________________
.
. Monthly Investment Date:( )1st or ( ) 15th (Should coincide with
. Plans Application)
.
. Month to Begin:______(Please note: Authorization to begin or
. change draft must be received no later than FIFTEEN BUSINESS DAYS
. prior to date of request change. Authorization to cancel a draft
. must be received no later than FIVE BUSINESS DAYS prior to date of
. requested cancellation.)
.
. A VOIDED CHECK MUST BE ATTACHED.
.
T I (We) hereby request that the State Street Bank and Trust
E Company collect deposits of funds to be made by me (us)
A monthly, pursuant to my (our) investment plan(s) described
R below by drawing checks to its own order on my (our)
account(s).
O
N X_________________________________________ __________________
X_________________________________________ __________________
D Signature of Depositor(s) Date
O
T
T AUTHORIZATION TO HONOR CHECKS DRAWN BY STATE STREET BANK AND TURST
E COMPANY
D ___________________________________________________________________
Please print clearly As a convenience to me, I (we) hereby
L with a ballpoint pen; request and authorize you to pay and charge
I it will be used as a my (our) account with checks drawn on my
N mailing label to (our) account by, and payable to, the order
E notify your bank. of the State Street Bank and Trust Company.
. ____________________ I (we) agree that your rights in regard to
. Bank Name each such check shall be the same as if the
. ____________________ check were drawn on you and personally by me
. Street/P.O.Box (us). This authority is to remain in effect
. ____________________ until revoked in writing, and until you
. City,State,ZIP actually receive wuch notice, I (we) agree
. ____________________ that you shall be fully protected on
. Bank Acct.# honoring any such check.
. X___________________
. X___________________ I (We) further agree that if any such check
. Name of Depositor(s) be dishonored, whether with or without
. cause, and whether unintentionally or
. inadvertently you shall be under no
. liability whatsoever.
. X___________________________________________
. X___________________________________________
. Signature of Depositor(s)
.
. MAIL TO BOSTON FINANCIAL DATA SERVICES, INC., P.O. BOX 8300, BOSTON,
. MA 02266-8300
. BANK COPY
- - - - - - - - - - - - - Page 5 of Application - - - - - - - - - - - -
. FEDERAL INCOME TAX WITHHOLDING FORM
. FOR FIDELITY DESTINY I OR DESTINY II
.
. I hereby authorize and direct Boston Financial Data Services, Inc.
. (Boston Financial, administrative service agent for the Fidelity
. Destiny Plans) to withhold at the rate of 28 percent on dividend
. and capital gains distributions paid by the Fidelity Destiny
. Portfolios to my Fidelity Destiny Plans account(s). I understand
. that all amounts withheld shall be submitted to the IRS as backup
. withholding on capital gains and dividend income and as a credit
. against my Federal income tax liability. Withholding will not
. apply to withdrawals. I will not be entitled to obtain a refund
. or credit of such amount or assert any other amounts withheld with
. respect to my Fidelity Destiny Plans account(s). I understand that
. the amount withheld may be less than, equal to, or greater than the
. amount of corresponding Federal income tax liability. I shall hold
. harmless and indemnify Boston Financial, State Street Bank and
. Trust Company, Fidelity Systematic Investment Plans, Fidelity
. Destiny Portfolios: Destiny I and Destiny II, Fidelity Distributors
. Corporation (and its affiliates), and their respective agents
. against any and all loss, costs, damages, expenses, liabilities,
. and claims, including, without limitation, IRS claims, for such
. amounts.
T
E I understand that written authorization and direction to begin or
A cancel withholding shall be implemented within 30 days of receipt
R in good order of the requested change by Boston Financial. I
further understand that this authorization shall not be implemented
O if, in Boston Financial's sole judgement, any information necessary
N to do so has not been provided to or verified by BFDS. This service
is available only to Fidelity Destiny Plans that reinvest their
D dividends and other distributions but is not available for
O tax-sheltered retirement plans, including IRAs.
T
T _________________________________ _______________________________
E Name of Planholder Name of Joint Tenant
D (Please Print) (Please Print)
L ___________________________________________
I Social Security or Tax Idetification Number
N
E PLAN NAME: PLEASE CHECK ACCOUNT NUMBER(S)
.
. DESTINY PLANS I __ DESTINY PLANS II __ ______________________
. DESTINY PLANS I __ DESTINY PLANS II __ ______________________
. DESTINY PLANS I __ DESTINY PLANS II __ ______________________
. DESTINY PLANS I __ DESTINY PLANS II __ ______________________
.
. x______________________________________________ ___________________
. Signature of Planholder Date
.
. x______________________________________________ ___________________
. Signature of Planholder Date
.
. MAIL TO BOSTON FINANCIAL DATA SERVICES, INC., P.O. BOX 8300,
. BOSTON, MA 02266-8300
- - - - - - - - - - - - - - End of Application - - - - - - - - - - - - -
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how
each fund invests and the services available to shareholders.
To learn more about each fund and its investments, you can obtain a
copy of a fund's most recent financial report and portfolio listing or
a copy of the Statement of Additional Information (SAI) dated April
2, 1999 . The SAI has been filed with the Securities and Exchange
Commission (SEC) and is available along with other related materials
on the SEC's Internet Web site (http://www.sec.gov). The SAI is
incorporated herein by reference (legally forms a part of the
prospectus). For a free copy of either document, call Fidelity
Distributors Corporation (FDC), 82 Devonshire Street, Boston, MA 02109
at the appropriate number listed below or your investment
professional.
FIDELITY DISTRIBUTORS CORPORATION
FIDELITY INVESTMENTS INSTITUTIONAL SERVICES COMPANY, INC.,
BROKER/DEALER SERVICES DIVISION
Nationwide (toll-free) 1-800-433-0734
In Alaska or Overseas (call collect) 1-617-328-5000
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS
OF, OR GUARANTEED BY, ANY DEPOSITORY INSTITUTION.
SHARES ARE NOT INSURED BY THE FDIC, FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY, AND ARE
SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS
OF PRINCIPAL AMOUNT INVESTED.
LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE
NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, NOR
HAS THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
DES-pro-0499
FIDELITY
DESTINY PORTFOLIOS:
Destiny I : New Class (fund number ___)
Destiny II : New Class (fund number ___)
Each fund seeks capital growth. Although many of the securities in
each fund's portfolio at any given time may be income-producing,
income generally will not be a consideration in the selection of
securities.
Shares of New Class of each fund may be purchased only through
Fidelity Systematic Investment Plans: Destiny New Plans I and
Destiny New Plans II (the New Plans or a New
Plan), a unit investment trust. Details of the New Plans,
including the Creation and Sales Charges, are discussed in the
Prospectus for the New Plans. The Creation and Sales
C harges for the first year of a New Plan may amount to as
much as 50% of the amounts paid under a New Plan. Prospective
investors should read this Prospectus in conjunction with the New
Plans' Prospectus.
PROSPECTUS
APRIL 2, 1999
(FIDELITY_LOGO_GRAPHIC) (REGISTERED TRADEMARK)
82 DEVONSHIRE STREET, BOSTON, MA 02109
CONTENTS
PROSPECTUS
KEY FACTS 2 WHO MAY WANT TO INVEST
3 EXPENSES Each class's yearly
operating expenses.
5 PERFORMANCE
THE FUNDS IN DETAIL 6 CHARTER How each fund is
organized.
7 INVESTMENT PRINCIPLES AND
RISKS Each fund's overall
approach to investing.
9 BREAKDOWN OF EXPENSES How
operating costs are
calculated and what they
include.
YOUR ACCOUNT 10 HOW TO BUY SHARES
10 HOW TO SELL SHARES Taking
money out and closing your
account.
11 INVESTOR SERVICES Services to
help you manage your account.
SHAREHOLDER AND ACCOUNT 12 DIVIDENDS, CAPITAL GAINS, AND
POLICIES TAXES
12 TRANSACTION DETAILS Share
price calculations and the
timing of purchases and
redemptions.
13 EXCHANGE RESTRICTIONS
KEY FACTS
WHO MAY WANT TO INVEST
Each fund is designed for investors who are willing to ride out stock
market fluctuations in pursuit of potentially high long-term returns
and who want to be invested in the stock market for its long-term
growth potential. Each fund invests for growth and does not pursue
income.
Shares of New Class of each fund may be acquired only through
the purchase of an interest in Fidelity Systematic Investment Plans:
Destiny New Plans I or Destiny New Plans II. The funds
are designed for you if you are seeking accumulation of capital
through regular, systematic investing over a period of 10 years or
more. Investments in the funds are based on the concept of
"dollar-cost averaging." This involves consistently buying uniform
dollar amounts of a security regardless of the price, at
regular intervals. When prices are low, more shares are bought than
when prices are high. Because the value of the securities in each fund
fluctuates with market conditions, if you liquidate your New
Plan investment when the market value of your shares is less than
their original cost, including the New Plan's initial
Creation and Sales Charges, you will incur a loss. Investments in
a systematic investment plan do not eliminate market risk. While
Fidelity Management & Research Company (FMR) will seek to
realize capital growth over the lifetime of a New Plan, the
policies FMR follows may not be appropriate if you are unable to
complete your New Plan. You should also consider your ability
to continue to invest during periods of varying economic and market
conditions.
Receipt by each fund of investments on a systematic basis tends to
provide a more consistent level of fund assets than might be the case
for those funds whose shares are sold directly and may allow each fund
to plan for the gradual accumulation of various individual security
positions. One example of how each fund could employ this concept is
through the program of dollar-cost averaging as described above. Such
a program could be hampered by increased net redemptions or the
failure of New Plan investors to purchase shares.
FMR is also the investment adviser to certain other investment
companies not sold through systematic investment plans, which also
have objectives of capital growth. The investment policies employed by
each of these funds vary, as do the sales charges assessed to fund
share purchases and the investment results each has attained.
The value of each fund's investments varies from day to day, generally
reflecting changes in market conditions and other company, political,
and economic news. In the short term, stock prices can fluctuate
dramatically in response to these factors. Over time, however, stocks
have shown greater growth potential than other types of securities.
Each fund is not in itself a balanced investment plan. You should
consider your investment objective and tolerance for risk when making
an investment decision. When you sell your fund shares, they may be
worth more or less than what you paid for them.
Each fund is composed of multiple classes of shares. All classes of
a fund have a common investment objective and investment portfolio.
New Class shares of each fund are offered at net asset value (NAV) and
are subject to a 12b-1 fee. Initial Class shares, the original class
of shares of each fund, are offered at NAV and are not subject to a
12b-1 fee, but are only available through other systematic investment
plans. The Initial Class shares are not offered through this
prospectus. You may obtain more information about Initial Class shares
and the Fidelity Systematic Investment Plans through which the Initial
Class shares are offered, by calling FDC at 1-800-___-____, or your
investment professional.
The performance of one class of shares of a fund may be different
from the performance of another class of shares of the same fund
because of different sales charges and class expenses. Contact FDC or
your investment professional to discuss which class is appropriate for
you.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you buy
or sell New Class shares of a fund. Neither fund will offer its
New Class shares publicly except through the Destiny New
Plans, which impose separate Creation and Sales Charges. Creation
and Sales Charges vary according to the monthly investment size and
duration of each New Plan. Please refer to the New
Plans' Prospectus for details.
Destiny I: New Class Destiny II: New Class
Sales charge on purchases and None None
reinvested distributions
Deferred sales charge on None None
redemptions
ANNUAL OPERATING EXPENSES are paid out of each fund's assets. Each
fund pays a management fee to FMR that varies based on its
performance. Each fund also incurs other expenses for services such as
maintaining shareholder records and furnishing shareholder statements
and financial reports.
12b-1 fees for the New Class of each fund include a shareholder
service fee paid by the New Class to FDC for services and expenses in
connection with providing personal service and/or maintenance of New
Class shareholder accounts. Long-term shareholders may pay more than
the economic equivalent of the maximum sales charges permitted by the
National Association of Securities Dealers, Inc., due to 12b-1
fees.
Management fees , 12b-1 fees and other expenses are reflected in
the New Class's share price and are not charged directly to
individual shareholder accounts. Please refer to the section
"Breakdown of Expenses," beginning on page 10 for further
information.
The following figures are based on estimated expenses of the New
Class of each fund and are calculated as a percentage of average net
assets of New Class of each fund.
Destiny I: New Class Destiny II: New Class
Management fee 0.31% 0.45%
12b-1 fee (Service Fee) 0.25% 0.25%
Other expenses % %
TOTAL OPERATING EXPENSES % %
EXPENSE TABLE EXAMPLE: You would pay the following amount in total
expenses on a $1,000 investment in New Class shares of a fund,
assuming a 5% annual return and either (1) full redemption or (2)
no redemption at the end of each time period. Total expenses shown
below include any shareholder transaction expenses and New
Class's annual operating expenses.
[To Be Updated]
Examples
Full Redemption No Redemption
Destiny I: New Class 1 Year
3 Years
5 Years
10 Years
Destiny II: New Class 1 Year
3 Years
5 Years
10 Years
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED EXPENSES OR RETURNS, ALL OF WHICH MAY VARY.
As stated above, Creation and Sales Charges vary for each New
Plan. Generally, however, these charges are all incurred within
the first year of the life of a New Plan. For a detailed
explanation of applicable rate structure, please refer to the
New Plans' Prospectus.
PERFORMANCE
Mutual fund performance is commonly measured as TOTAL RETURN. The
total returns that follow are based on historical results for the
Initial Class, restated to reflect the higher 12b-1 and transfer agent
fees and expenses applicable to the New Class, set forth in "Expenses
- - Annual Operating Expenses" on page ___. The total returns that
follow do not reflect the effect of taxes.
All total returns quoted below do not include the effect of paying the
separate Creation and Sales Charges associated with the purchase of
New Clas s shares of the funds through the New Plans.
Total returns would be lower if Creation and Sales Charges were taken
into account. As previously discussed, New Clas s shares of the
funds may be acquired only through the New Plans. Investors
should consult the New Plans' Prospectus for complete
information regarding Creation and Sales Charges .
Each fund's fiscal year runs from October 1 through September 30.
New Class of each fund is expected to commence operations on or
about _____ 1999. The tables below show each fund's performance
over past fiscal years. The charts on page ___ present calendar
year performance for each fund compared to different measures,
including the Standard and Poor's 500 Index.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURNS
Fiscal periods ended Past 1 year Past 5 years Past 10 years Life of fund
September 30, 1998
Destiny I: New Class % % % %*
Destiny II: New Class % % % %**
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
Fiscal periods ended Past 1 year Past 5 years Past 10 years Life of fund
September 30, 1998
Destiny I: New Class % % % %*
Destiny II: New Class % % % %**
</TABLE>
* FROM JULY 10, 1970 (COMMENCEMENT OF OPERATIONS).
** FROM DECEMBER 30, 1985 (COMMENCEMENT OF OPERATIONS).
[Bar Charts of Calendar Year Information]
The following tables show Destiny New Plans I and Destiny New Plans
II average annual total returns calculated for the one, five, ten, and
fifteen years or Life of New Plan ended September 30, 1998 for a
$50/month, 15 year New Plan. Past 15 years or Life of New Plan figures
are for the periods October 1, 1983 to September 30, 1998 for Destiny
New Plans I and Commencement of Operations (December 30, 1985) through
September 30, 1998 for Destiny New Plans II. The following New
Plan-related average annual total returns include change in share
price, reinvestment of dividends and capital gains, and the effects of
the separate Creation and Sales Charges assessed through the New
Plans. The total returns for the New Plan are based on historical
results for the Initial Plan, restated to reflect the higher 12b-1 and
transfer agent fees and expenses applicable to the New Class, as set
forth in "Expenses - Annual Operating Expenses" on page ___. The
illustrations assume an initial $600 lump sum investment at the
beginning of each period shown with no subsequent New Plan
investments. Because the illustrations assume lump sum investments,
they do not reflect what investors would have earned had they made
only regular monthly investments over the period. Consult the New
Plans' Prospectus for more complete information on applicable charges
and fees.
[To Be Updated]
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURNS -
DESTINY NEW PLANS
Fiscal periods ended Past 1 year Past 5 years Past 10 years Past 15 years/ Life of Plan
September 30, 1998
Destiny New Plans I % % % %A
Destiny New Plans II % % % %B
</TABLE>
A FROM OCTOBER 1, 1983 TO SEPTEMBER 30, 1998.
B FROM DECEMBER 30, 1985 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30,
1998.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated
period of time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate
of return that, if achieved annually, would have produced the same
cumulative total return if performance had been constant over the
entire period. Average annual total returns smooth out variations in
performance; they are not the same as actual year-by-year results.
Average annual total returns covering periods of less than one year
assume that performance will remain constant for the rest of the
year.
STANDARD & POOR'S 500 INDEX (S&P 500(registered trademark)) is a
widely recognized, unmanaged index of common stocks.
Unlike each fund's returns, the total returns of the comparative index
do not include the effect of any brokerage commissions, transaction
fees, or other costs of investing.
Other illustrations of fund performance may show moving averages over
specified periods.
The funds' recent strategies, performance, and holdings are detailed
twice a year in financial reports, which are sent to all shareholders.
TOTAL RETURNS ARE BASED ON PAST RESULTS AND ARE NOT AN INDICATION OF
FUTURE PERFORMANCE.
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders'
money and invests it toward a specified goal. Each fund is a
diversified fund of Fidelity Destiny Portfolios, an open-end
management investment company originally organized as a Massachusetts
corporation on January 7, 1969 and reorganized as a Massachusetts
business trust on June 20, 1984.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet periodically throughout the year to oversee the
funds' activities, review contractual arrangements with companies that
provide services to the funds, and review the funds' performance. The
trustees serve as trustees for other Fidelity funds. The majority of
trustees are not otherwise affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL SHAREHOLDER MEETINGS AND MAIL PROXY
MATERIALS. These meetings may be called to elect or remove trustees,
change fundamental policies, approve a management contract, or for
other purposes. Shareholders not attending these meetings are
encouraged to vote by proxy. The transfer agent or the New
Plans' custodian, as applicable, will mail proxy materials in
advance, including a voting card and information about the proposals
to be voted on. The number of votes you are entitled to is based upon
the dollar value of your investment.
Separate votes are taken by each class of shares, fund, or trust,
if a matter affects just that class of shares, fund, or trust,
respectively.
FMR AND ITS AFFILIATES
Fidelity Investments is one of the largest investment management
organizations in the United States and has its principal business
address at 82 Devonshire Street, Boston, Massachusetts 02109. It
includes a number of different subsidiaries and divisions which
provide a variety of financial services and products. The funds employ
various Fidelity companies to perform activities required for their
operation.
The funds are managed by FMR, which chooses the funds' investments and
handles their business affairs.
Affiliates assist FMR with foreign investments:
(small solid bullet) Fidelity Management & Research (U.K.) Inc. (FMR
U.K.), in London, England, serves as a sub-adviser for each fund.
(small solid bullet) Fidelity Management & Research Far East Inc. (FMR
Far East), in Tokyo, Japan, serves as a sub-adviser for each fund.
As of _____________ , FMR advised funds having approximately
__ million shareholder accounts with a total value of more than
$ ____ billion.
George A. Vanderheiden is Vice President and manager of Destiny I,
which he has managed since 1980. He also manages several other
Fidelity Advisor Funds. Mr. Vanderheiden is a member of the
Board of Directors for FMR Corp. Mr. Vanderheiden joined Fidelity in
1971.
Beth Terrana is Vice President and manager of Destiny II, which she
has managed since June 1998. She also manages other Fidelity funds.
Since joining Fidelity in 1983, Ms. Terrana has worked as an analyst,
portfolio assistant and manager.
Fidelity 's investment personnel may invest in securities for
their own accounts pursuant to a code of ethics that establishes
procedures for personal investing and restricts certain transactions.
FDC distributes and markets Fidelity's funds and services.
Fidelity Service Company, Inc. (FSC) performs transfer agent servicing
functions for New Class of each fund.
FMR Corp. is the ultimate parent company of FMR, FMR U.K. and FMR Far
East. Members of the Edward C. Johnson 3d family are the predominant
owners of a class of shares of common stock representing approximately
49% of the voting power of FMR Corp. Under the Investment Company Act
of 1940 (the 1940 Act), control of a company is presumed where one
individual or group of individuals owns more than 25% of the voting
stock of that company; therefore, the Johnson family may be deemed
under the 1940 Act to form a controlling group with respect to FMR
Corp.
FMR may allocate brokerage transactions to its broker-dealer
affiliates and in a manner that takes into account the sale of shares
of the Destiny Portfolios, provided that the funds receive brokerage
services and commission rates comparable to those of other
broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
EACH FUND seeks capital growth. Although many of the securities in
each fund's portfolio at any given time may be income-producing,
income generally will not be a consideration in the selection of
securities.
Each fund seeks capital growth primarily from equity securities. Each
fund will tend to be fully invested in common stocks and securities
convertible into common stocks, but may also buy other types of
securities such as preferred stocks or bonds. The funds have the
flexibility to invest in large or small, domestic or foreign issuers.
The value of the funds' investments varies in response to many
factors. Stock values fluctuate in response to the activities of
individual companies and general market and economic conditions.
FMR may use various investment techniques to hedge a portion of a
fund's risks, but there is no guarantee that these strategies will
work as FMR intends. As a mutual fund, each fund seeks to spread
investment risk by diversifying its holdings among many companies and
industries. When you sell your shares of a fund, they may be worth
more or less than what you paid for them.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related
risks. Any restrictions listed supplement those discussed earlier in
this section. A complete listing of each fund's limitations and more
detailed information about each fund's investments are contained in
the funds' SAI. Policies and limitations are considered at the time of
purchase; the sale of instruments is not required in the event of a
subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these
techniques unless it believes that they are consistent with a fund's
investment objective and policies and that doing so will help the fund
achieve its goal. Fund holdings and recent investment strategies are
detailed in each fund's financial reports, which are sent to
shareholders twice a year. For a free SAI or financial report, call
the appropriate number listed on the front cover, or your investment
professional.
EQUITY SECURITIES may include common stocks, preferred stocks,
convertible securities, and warrants. Common stocks, the most familiar
type, represent an equity (ownership) interest in a corporation.
Although equity securities have a history of long-term growth in
value, their prices fluctuate based on changes in a company's
financial condition and on overall market and economic conditions.
Smaller companies are especially sensitive to these factors.
RESTRICTIONS: With respect to 75% of its total assets, each fund may
not invest in more than 10% of the outstanding voting securities of a
single issuer.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers
to borrow money from investors. The issuer generally pays the investor
a fixed, variable, or floating rate of interest, and must repay the
amount borrowed at maturity. Some debt securities, such as zero coupon
bonds, do not pay current interest, but are sold at a discount from
their face values.
Debt securities have varying levels of sensitivity to changes in
interest rates and varying degrees of credit quality. In general, bond
prices rise when interest rates fall, and fall when interest rates
rise. Longer-term bonds and zero coupon bonds are generally more
sensitive to interest rate changes.
Lower-quality debt securities are considered to have speculative
characteristics, and involve greater risk of default or price changes
due to changes in the issuer's creditworthiness, or they may already
be in default. The market prices of these securities may fluctuate
more than higher-quality securities and may decline significantly in
periods of general or regional economic difficulty.
The following tables provide a summary of ratings assigned to debt
holdings (not including money market instruments) in the funds'
portfolios. These figures are dollar-weighted averages of month-end
portfolio holdings during the fiscal year ended September 1998, and
are presented as a percentage of total security investments. These
percentages are historical and do not necessarily indicate a fund's
current or future debt holdings.
DESTINY I
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FISCAL YEAR ENDED SEPTEMBER 199 8 MOODY'S
DEBT HOLDINGS, BY RATING INVESTORS SERVICE STANDARD & POOR'S
(AS A % OF INVESTMENTS) (AS A % OF INVESTMENTS)
AVERAGE AVERAGE
RATING OF TOTAL INVESTMENTS RATING OF TOTAL
INVESTMENTS
INVESTMENT GRADE
Highest quality Aaa 11.8 % AAA 11.8 %
High quality Aa 0.0 % AA 0.0 %
Upper-medium grade A 0.0 % A 0.0 %
Medium grade Baa 0.0 % BBB 0.0 %
LOWER QUALITY
Moderately speculative Ba 0.0 % BB 0.0 %
Speculative B 0.0 % B 0.0 %
Highly speculative Caa 0.0 % CCC 0.0 %
Poor quality Ca 0.0 % CC 0.0 %
Lowest quality, no interest C 0.0 % C 0.0 %
In default, in arrears -- D 0.0 %
</TABLE>
REFER TO THE FUND'S SAI FOR A MORE COMPLETE DISCUSSION OF THESE
RATINGS.
THE FUND DOES NOT NECESSARILY RELY ON THE RATINGS OF MOODY'S OR S&P TO
DETERMINE COMPLIANCE WITH ITS DEBT QUALITY POLICY. SECURITIES NOT
RATED BY MOODY'S OR S&P AMOUNTED TO 0.0 % OF THE FUND'S
INVESTMENTS. THIS PERCENTAGE MAY INCLUDE SECURITIES RATED BY OTHER
NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATIONS, AS WELL
AS UNRATED SECURITIES. UNRATED LOWER-QUALITY SECURITIES AMOUNTED TO
0.0 % OF THE FUND'S INVESTMENTS.
DESTINY II
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FISCAL YEAR ENDED SEPTEMBER 199 8 MOODY'S
DEBT HOLDINGS, BY RATING INVESTORS SERVICE STANDARD & POOR'S
(AS A % OF INVESTMENTS) (AS A % OF INVESTMENTS)
AVERAGE AVERAGE
RATING OF TOTAL INVESTMENTS RATING OF TOTAL
INVESTMENTS
INVESTMENT GRADE
Highest quality Aaa 6.2 % AAA 6.2 %
High quality Aa 0.0 % AA 0.0 %
Upper-medium grade A 0.0 % A 0.0 %
Medium grade Baa 0.0 % BBB 0.0 %
LOWER QUALITY
Moderately speculative Ba 0.0 % BB 0.0 %
Speculative B 0.1 % B 0.0 %
Highly speculative Caa 0.0 % CCC 0.0 %
Poor quality Ca 0.0 % CC 0.0 %
Lowest quality, no interest C 0.0 % C 0.0 %
In default, in arrears -- D 0.0 %
</TABLE>
REFER TO THE FUND'S SAI FOR A MORE COMPLETE DISCUSSION OF THESE
RATINGS.
THE FUND DOES NOT NECESSARILY RELY ON THE RATINGS OF MOODY'S OR S&P TO
DETERMINE COMPLIANCE WITH ITS DEBT QUALITY POLICY. SECURITIES NOT
RATED BY MOODY'S OR S&P AMOUNTED TO 0.0 % OF THE FUND'S
INVESTMENTS. THIS PERCENTAGE MAY INCLUDE SECURITIES RATED BY OTHER
NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATIONS, AS WELL
AS UNRATED SECURITIES. UNRATED LOWER-QUALITY SECURITIES AMOUNTED TO
0.0 % OF THE FUND'S INVESTMENTS.
RESTRICTIONS: Purchase of a debt security is consistent with each
fund's debt quality policy if it is rated at or above the stated level
by Moody's Investors Service (Moody's), Standard & Poor's (S&P), or is
unrated but judged to be of equivalent quality by FMR. Each fund
currently intends to limit its investments in lower than Baa-quality
debt securities (sometimes called "junk bonds") to 10% of its assets.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies,
and securities issued by U.S. entities with substantial foreign
operations may involve additional risks and considerations. These
include risks relating to political, economic, or regulatory
conditions in foreign countries; fluctuations in foreign currencies;
withholding or other taxes; trading, settlement, custodial, and other
operational risks; and the potentially less stringent investor
protection and disclosure standards of foreign markets. In
addition , governmental issuers of foreign debt securities may be
unwilling to pay interest and repay principal when due and may require
that the conditions for payment be renegotiated. All of these factors
can make foreign investments, especially those in emerging markets,
more volatile and potentially less liquid than U.S. investments.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a
security at one price and simultaneously agrees to sell it back at a
higher price. Delays or losses could result if the other party to the
agreement defaults or becomes insolvent.
ADJUSTING INVESTMENT EXPOSURE. A fund can use various techniques to
increase or decrease its exposure to changing security prices,
interest rates, currency exchange rates, commodity prices, or other
factors that affect security values. These techniques may involve
derivative transactions such as buying and selling options and futures
contracts, entering into currency exchange contracts or swap
agreements, purchasing indexed securities, and selling securities
short.
FMR can use these practices to adjust the risk and return
characteristics of a fund's portfolio of investments. If FMR judges
market conditions incorrectly or employs a strategy that does not
correlate well with a fund's investments, these techniques could
result in a loss, regardless of whether the intent was to reduce risk
or increase return. These techniques may increase the volatility of a
fund and may involve a small investment of cash relative to the
magnitude of the risk assumed. In addition, these techniques could
result in a loss if the counterparty to the transaction does not
perform as promised.
DIRECT DEBT. Loans and other direct debt instruments are interests in
amounts owed to another party by a company, government, or other
borrower. They have additional risks beyond conventional debt
securities because they may entail less legal protection for a fund,
or there may be a requirement that the fund supply additional cash to
a borrower on demand.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined
by FMR, under the supervision of the Board of Trustees, to be
illiquid, which means that they may be difficult to sell promptly at
an acceptable price. The sale of some illiquid securities, and some
other securities, may be subject to legal restrictions. Difficulty in
selling securities may result in a loss or may be costly to a fund.
RESTRICTIONS: A fund may not invest more than 10% of its assets in
illiquid securities.
OTHER INSTRUMENTS may include real estate-related instruments.
CASH MANAGEMENT. A fund may invest in money market securities, in
repurchase agreements, and in a money market fund available only to
funds and accounts managed by FMR or its affiliates, whose goal is to
seek a high level of current income while maintaining a stable $1.00
share price. A major change in interest rates or a default on the
money market fund's investments could cause its share price to change.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce
the risks of investing. This may include limiting the amount of money
invested in any one issuer or, on a broader scale, in any one
industry. Economic, business, or political changes can affect all
securities of a similar type.
RESTRICTIONS: With respect to 75% of its total assets, each fund may
not invest more than 5% in the securities of any one issuer. This
limitation does not apply to U.S. Government securities.
Each fund may not invest more than 25% of its total assets in any one
industry. This limitation does not apply to U.S. Government
securities.
BORROWING. Each fund may borrow from banks or from other funds advised
by FMR or its affiliates, or through reverse repurchase agreements. If
a fund borrows money, its share price may be subject to greater
fluctuation until the borrowing is paid off. If a fund makes
additional investments while borrowings are outstanding, this may be
considered a form of leverage.
RESTRICTIONS: Each fund may borrow only for temporary or emergency
purposes, but not in an amount exceeding 331/3% of its total assets.
LENDING securities to broker-dealers and institutions, including
Fidelity Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a
means of earning income. This practice could result in a loss or a
delay in recovering a fund's securities. A fund may also lend money to
other funds advised by FMR or its affiliates.
RESTRICTIONS: Loans, in the aggregate, may not exceed 331/3% of a
fund's total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages
are fundamental, that is, subject to change only by shareholder
approval. The following paragraphs restate all those that are
fundamental. All policies stated throughout this prospectus, other
than those identified in the following paragraphs, can be changed
without shareholder approval.
DESTINY I AND DESTINY II seek capital growth. Although many of
the securities in each fund's portfolio at any given time may be
income-producing, income generally will not be a consideration in the
selection of securities.
With respect to 75% of total assets, each fund may not invest more
than 5% in the securities of any one issuer and may not invest in more
than 10% of the outstanding voting securities of a single issuer.
These limitations do not apply to U.S. Government securities.
Each fund may not invest more than 25% of its total assets in any one
industry. This limitation does not apply to U.S. Government
securities.
Each fund may borrow only for temporary or emergency purposes, but not
in an amount exceeding 331/3% of its total assets.
Loans, in the aggregate, may not exceed 331/3% of each fund's total
assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, each fund pays fees related to its daily
operations. Expenses paid out of each class 's assets are
reflected in that class's share price or dividends; they are
neither billed directly to shareholders nor deducted from shareholder
accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments
and business affairs. FMR in turn pays fees to affiliates who
provide assistance with these services. Each fund also pays OTHER
EXPENSES, which are explained on page 14.
FMR may, from time to time, agree to reimburse the funds or a
class for management fees and other expenses above a specified
limit. FMR retains the ability to be repaid by a fund if expenses fall
below the specified limit prior to the end of the fiscal year.
Reimbursement arrangements, which may be terminated at any time
without notice, can decrease the funds' or a class's expenses
and boost its performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. The fee
is determined by calculating a BASIC FEE and then applying a
PERFORMANCE ADJUSTMENT. The performance adjustment either increases or
decreases the management fee, depending on how well a fund has
performed relative to the S&P 500.
Management fee = Basic fee +/- Performance adjustment
THE BASIC FEE is calculated by adding a group fee rate to an
individual fund fee rate, dividing by twelve, and multiplying the
result by a fund's average net assets throughout the month.
The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0.52%, and it
drops as total assets under management increase.
For September 1998 , the group fee rate was 0.2911 % for
Destiny I and Destiny II. The individual fund fee rate is 0.17 %
for Destiny I and 0.30 % for Destiny II.
The basic fee for Destiny I and Destiny II for the fiscal year ended
September 1998 , was 0.46 % and 0.59 %,
respectively, of the fund's average net assets.
THE PERFORMANCE ADJUSTMENT rate is calculated monthly by comparing
the performance of each fund's Initial Class to that of
the S&P 500 over the performance period.
The performance period is the most recent 36-month period.
The performance adjustment rate is divided by twelve and multiplied by
the fund's average net assets throughout the month, and the resulting
dollar amount is then added to or subtracted from the basic fee. The
maximum annualized performance adjustment rate is +0.24% of the fund's
average net assets up to and including $100,000,000 and +0.20% of the
fund's average net assets in excess of $100,000,000 over the
performance period.
The total management fee for the fiscal year ended September 30,
1998 was 0.31 % of the fund's average net assets for Destiny
I and 0.45 % of the fund's average net assets for Destiny II.
FMR HAS SUB-ADVISORY AGREEMENTS with FMR U.K. and FMR Far East. These
sub-advisers provide FMR with investment research and advice on
issuers based outside the United States. Under the sub-advisory
agreements, FMR pays FMR U.K. and FMR Far East fees equal to 110% and
105%, respectively, of the costs of providing these services.
A fund could be adversely affected if the computer systems used by
FMR and other service providers do not properly process and calculate
date-related information from and after January 1, 2000. FMR has
advised each fund that it is actively working on necessary changes to
its computer systems and expects that its systems, and those of other
major service providers, will be modified prior to January 1, 2000.
However, there can be no assurance that there will be no adverse
impact on a fund.
OTHER EXPENSES
While the management fee is a significant component of each fund's
annual operating costs, the funds have other expenses as well.
FSC performs transfer agency, dividend disbursing, and shareholder
servicing functions for the New Class of each fund. The New
Class will pay FSC a transfer agent fee for such services that may not
exceed an annual rate of ___% of the fund's average net assets.
FSC also calculates the net asset value per share (NAV) and
dividends for the New Class of each fund, maintains the funds'
general accounting records, and administers each fund's securities
lending program. For the fiscal year ended September 1998,
Destiny I and Destiny II paid fees equal to 0.01 % and
0.02 %, respectively, of each fund's average net assets
for pricing and bookkeeping services. These amounts are before expense
reductions, if any.
Each fund also pays other expenses, such as legal, audit, and
custodian fees; in some instances, proxy solicitation costs; and the
compensation of trustees who are not affiliated with Fidelity. A
broker-dealer may use a portion of the commissions paid by a fund to
reduce that fund's custodian or transfer agent fees.
New Class shares of each fund have adopted a DISTRIBUTION AND
SERVICE PLAN. Under the plans, the New Class of each fund is
authorized to pay FDC a monthly distribution fee as compensation for
its services and expenses in connection with the distribution of New
Class shares. The New Class may pay FDC a distribution fee at an
annual rate of 0.75% of its average net assets, or such lesser amount
as the Trustees may determine from time to time. The New Class of each
fund currently pays FDC a monthly fee at an annual rate of 0.25% of
its average net assets throughout the month. New Class distribution
fee rates may be increased only when the Trustees believe that it is
in the best interests of New Class shareholders to do so.
For the fiscal year ended September 30, 1998, the portfolio
turnover rates for Destiny I and Destiny II were 27 % and
106 %, respectively. These rates vary from year to year. High
turnover rates increase transaction costs and may increase taxable
capital gains. FMR considers these effects when evaluating the
anticipated benefits of short-term investing.
YOUR ACCOUNT
HOW TO BUY SHARES
THE PRICE TO BUY ONE SHARE of New Class is the class's
NAV.
Each fund has an agreement with FDC under which each fund issues
shares at NAV to State Street Bank and Trust Company (State Street) as
Custodian for the Plans. EACH FUND WILL NOT OFFER ITS SHARES PUBLICLY
EXCEPT THROUGH THE NEW PLANS. Generally, State Street will hold
directly all shares of each fund unless a New Planholder
owns fund shares directly after completing or terminating a
New Plan. The terms of the offering of the New
Plans are contained in the Prospectus of Fidelity
Systematic Investment Plans: Destiny New Plans I and Destiny
New Plans II.
Your shares will be purchased at the next NAV calculated after
your order is received in proper form . New Class 's NAV
is normally calculated each business day at 4:00 p.m. Eastern time.
Each fund reserves the right to reject any specific purchase order,
including certain purchases by exchange. See "Exchange Restrictions"
on page 19. Purchase orders may be refused if, in FMR's opinion, they
would disrupt management of a fund.
Share certificates are not available for New Class shares.
If you are investing through a tax-advantaged retirement plan, such
as an IRA, for the first time, you will need a special application.
Contact [your investment professional] for more information and a
retirement account application.
HOW TO SELL SHARES
TH E FOLLOWING DISCUSSION RELATES ONLY TO THOSE SHAREHOLDERS WHO
HAVE COMPLETED OR TERMINATED A NEW PLAN AND HOLD SHARES OF A FUND
DIRECTLY. NEW PLANHOLDERS SHOULD CONSULT THE SECTION ENTITLED
"CANCELLATION AND REFUND RIGHTS" OF THEIR NEW PLAN'S PROSPECTUS FOR A
DISCUSSION OF THE REQUIREMENTS FOR REDEMPTION OF SHARES FROM A
PLAN .
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares.
THE PRICE TO SELL ONE SHARE of New Class is the class 's
NAV.
Your shares will be sold at the next NAV calculated after your order
is received in proper form. New Class 's NAV is normally
calculated each business day at 4:00 p.m. Eastern time.
If you have certificates for your shares, you must submit them to FSC
in order to sell your shares, and you should call the appropriate
number listed on the front cover for specific instructions.
For more information, see "Systematic Withdrawal Program" on page __
of the Destiny New Plans' prospectus.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. A signature
guarantee is designed to protect you and Fidelity from fraud. Your
request must be made in writing and include a signature guarantee if
any of the following situations apply:
(small solid bullet) You wish to redeem more than $100,000 worth of
shares,
(small solid bullet) Your account registration has changed within the
last 30 days,
(small solid bullet) The check is being mailed to a different address
than the one on your account (record address),
(small solid bullet) The check is being made payable to someone other
than the account owner, or
(small solid bullet) The redemption proceeds are being transferred to
a Fidelity account with a different registration.
You should be able to obtain a signature guarantee from a bank,
broker, dealer, credit union (if authorized under state law),
securities exchange or association, clearing agency, or savings
association. A notary public cannot provide a signature guarantee.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(small solid bullet) Your name,
(small solid bullet) The fund's name,
(small solid bullet) The applicable class name,
(small solid bullet) Your fund account number,
(small solid bullet) The dollar amount or number of shares to be
redeemed, signed certificates (if applicable), and
(small solid bullet) Any other applicable requirements listed in the
following table.
Mail your letter to the following address:
Fidelity Investments
P. O. Box 770002
Cincinnati, OH 45277-0086
Unless otherwise instructed, Fidelity will send a check to the record
address.
<TABLE>
<CAPTION>
<S> <C> <C>
TYPE OF REGISTRATION* SPECIAL REQUIREMENTS
PHONE All accounts (small solid bullet) Maximum
(phone_graphic) check request: $100,000.
(small solid bullet) You may
exchange to other Fidelity
funds if both accounts are
registered with the same
name(s), address, and
taxpayer ID number.
(small solid bullet) Call FDC
at the appropriate number
listed on the front cover.
Mail or in Person (mail_graphic)(hand_graphic) Individual, Joint Tenants, (small solid bullet) The
Sole Proprietorship, letter of instruction must
Custodial (Uniform be signed by all person(s)
Gifts/Transfers to Minors required to sign for the
Act), General Partners account exactly as it is
Corporations, Associations registered, accompanied by
Trusts signature guarantee(s).
(small solid bullet) The
letter of instruction and a
corporate resolution must be
signed by all person(s)
required to sign for the
account, accompanied by
signature guarantee(s).
(small solid bullet) The
letter of instruction must
be signed by the Trustee(s),
accompanied by signature
guarantee(s). (If the
Trustee's name is not
registered on your account,
also provide a copy of the
trust document, certified
within the last 60 days.)
</TABLE>
* IF YOU DO NOT FALL INTO ANY OF THE ABOVE REGISTRATION CATEGORIES
(E.G., EXECUTORS, ADMINISTRATORS, CONSERVATORS OR GUARDIANS), PLEASE
CALL THE APPROPRIATE NUMBER LISTED ON THE FRONT COVER FOR FURTHER
INSTRUCTIONS.
INVESTOR SERVICES
THE FOLLOWING SHAREHOLDER SERVICES ARE APPLICABLE ONLY TO THOSE
SHAREHOLDERS WHO HAVE COMPLETED OR TERMINATED A NEW PLAN AND
HOLD NEW CLASS SHARES OF A FUND DIRECTLY. New Planholders
should consult the sections titled "Rights and Privileges of
Planholders" on page __ in their New Plan's Prospectus for a
discussion of distribution options and other pertinent data.
For accounts not associated with the New Plan s, Fidelity
provides a variety of services to help you manage your account.
INFORMATION SERVICES
STATEMENTS AND REPORTS that Fidelity sends to you include the
following:
(small solid bullet) Confirmation statements (after every transaction,
except a reinvestment, that affects your account balance or your
account registration)
(small solid bullet) Account statements (quarterly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and
prospectuses may be mailed, even if you have more than one account in
a fund. Call FDC at the appropriate number listed on the front cover,
or your investment professional if you need additional copies of
financial reports and prospectuses.
FSC pays for shareholder services but not for special services, such
as producing and mailing historical account documents. You may be
required to pay a fee for special services.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your New Class shares and buy
shares of other Fidelity Advisor Funds by telephone or in writing. The
shares you exchange will carry credit for any front-end sales charge
you previously paid in connection with the purchase of New Plan
shares.
Note that exchanges out of a fund are limited to four per calendar
year, and that they may have tax consequences for you. For details on
policies and restrictions governing exchanges, including circumstances
under which a shareholder's exchange privilege may be suspended or
revoked, see "Exchange Restrictions," page 20.
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net investment income
and capital gains to shareholders each year. Normally, dividends and
capital gains are distributed in December.
DISTRIBUTION OPTIONS
THE FOLLOWING DISTRIBUTION OPTIONS ARE APPLICABLE ONLY TO THOSE
SHAREHOLDERS WHO HAVE COMPLETED OR TERMINATED A NEW PL AN AND
HOLD NEW CLASS SHARES OF THE FUNDS DIRECTLY. New
Pl anholders should consult the section titled "Plan Features
and your Rights and Privileges, Distributions" on page __ of the
New Pl ans' Prospectus for a discussion of distribution options
and other pertinent information.
You can choose from three distribution options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions
will be automatically reinvested in additional shares of the same
class of the fund. If you do not indicate a choice on your
application, you will be assigned this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested in additional shares of the same class
of the fund, but you will be sent a check for each dividend
distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital
gain distributions.
When a class deducts a distribution from its NAV, the
reinvestment price is the class 's NAV at the close of business
that day. Distribution checks will be mailed within seven days.
TAXES
As with any investment, you should consider how your investment in a
fund will be taxed. If your account is not a tax-advantaged retirement
account, you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income
tax, and may also be subject to state or local taxes. If you live
outside the United States, your distributions could also be taxed by
the country in which you reside. Your distributions are taxable when
they are paid, whether you take them in cash or reinvest them.
However, distributions declared in December and paid in January are
taxable as if they were paid on December 31.
For federal tax purposes, each fund's income and short-term capital
gains are distributed as dividends and taxed as ordinary income;
capital gain distributions are taxed as long-term capital gains.
Every January, Fidelity will send you and the IRS a statement showing
the tax characterization of distributions paid to you in the previous
year.
TAXES ON TRANSACTIONS. Your redemptions - including exchanges - are
subject to capital gains tax. A capital gain or loss is the difference
between the cost of your shares and the price you receive when you
sell them.
Whenever you sell shares of a fund, Fidelity will send you a
confirmation statement showing how many shares you sold and at what
price.
You will also receive a transaction statement at least quarterly.
However, it is up to you or your tax preparer to determine whether
this sale resulted in a capital gain and, if so, the amount of tax to
be paid. BE SURE TO KEEP YOUR REGULAR ACCOUNT STATEMENTS; the
information they contain will be essential in calculating the amount
of your capital gains.
"BUYING A DIVIDEND." If you buy shares when a class has
realized but not yet distributed income or capital gains, you will pay
the full price for the shares and then receive a portion of the price
back in the form of a taxable distribution.
CURRENCY CONSIDERATIONS. If a fund's dividends exceed its taxable
income in any year, which is sometimes the result of currency-related
losses, all or a portion of the fund's dividends may be treated as a
return of capital to shareholders for tax purposes. To minimize the
risk of a return of capital, each fund may adjust its dividends to
take currency fluctuations into account, which may cause the dividends
to vary. Any return of capital will reduce the cost basis of your
shares, which will result in a higher reported capital gain or a lower
reported capital loss when you sell your shares. The statement you
receive in January will specify if any distributions included a return
of capital.
EFFECT OF FOREIGN TAXES. Foreign governments may impose taxes on a
fund and its investments, and these taxes generally will reduce a
fund's distributions. However, if you meet certain holding period
requirements with respect to your fund shares, an offsetting tax
credit may be available to you. If you do not meet such holding period
requirements, you may still be entitled to a deduction for certain
foreign taxes. In either case, your tax statement will show more
taxable income or capital gains than were actually distributed by the
fund, but will also show the amount of the available offsetting credit
or deduction.
There are tax requirements that all funds must follow in order to
avoid federal taxation. In its effort to adhere to these requirements,
a fund may have to limit its investment activity in some types of
instruments.
TRANSACTION DETAILS
THE FUNDS ARE OPEN FOR BUSINESS each day the New York Stock Exchange
(NYSE) is open. FSC normally calculates New Class 's NAV as of
the close of business of the NYSE, normally 4:00 p.m. Eastern time.
A CLASS 'S NAV is the value of a single share. The NAV of
each class is computed by adding that class's pro rata share of
the value of the applicable fund's investments, cash, and
other assets, subtracting that class's pro rata share of the value
of the applicable fund's liabilities, subtracting the
liabilities allocated to that class, and dividing the result by
the number of shares of that class outstanding.
Each fund's assets are valued primarily on the basis of market
quotations. Short-term securities with remaining maturities of sixty
days or less for which quotations are not readily available are valued
on the basis of amortized cost. This method minimizes the effect of
changes in a security's market value. Foreign securities are valued on
the basis of quotations from the primary market in which they are
traded, and are translated from the local currency into U.S. dollars
using current exchange rates. In addition, if quotations are not
readily available, or if the values have been materially affected by
events occurring after the closing of a foreign market, assets may be
valued by another method that the Board of Trustees believes
accurately reflects fair value.
New Planholders who have redeemed shares under "Cancellation
and Refund Rights" (discussed in the New Plans' Prospectus),
may not reinstate at NAV the proceeds from such a cancellation or
refund until all refunded Creation and Sales Charges included in the
cancellation have first been deducted in full from the amount being
replaced. To redeem shares from a New Pl an, refer to the
section entitled "Plan Features and your Rights and Privileges,
Distributions" in your New Pl an's Prospectus, or contact
your investment professional.
WHEN YOU SIGN YOUR NEW PL AN'S APPLICATION, you will be asked to
certify that your social security or taxpayer identification number is
correct and that you are not subject to 31% backup withholding for
failing to report income to the IRS. If you violate IRS regulations,
the IRS can require a fund to withhold 31% of your taxable
distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity will
not be responsible for any losses resulting from unauthorized
transactions if it follows reasonable security procedures designed to
verify the identity of the investor. Fidelity will request
personalized security codes or other information, and may also record
calls. You should verify the accuracy of your confirmation statements
immediately after you receive them. If you do not want the ability to
redeem and exchange by telephone, call Fidelity at the appropriate
number listed on the front cover for instructions. Additional
documentation may be required from corporations, associations, and
certain fiduciaries.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during
periods of unusual market activity), consider placing your order by
mail.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a
period of time.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at
the next NAV calculated after your order is received in proper form.
Note the following:
(small solid bullet) Normally, redemption proceeds will be mailed to
you on the next business day, but if making immediate payment could
adversely affect a fund, it may take up to seven days to pay you.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays),
when trading on the NYSE is restricted, or as permitted by the SEC.
(small solid bullet) You will not receive interest on amounts
represented by uncashed redemption checks.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging New Class
shares of a fund for shares of other Fidelity Advisor Funds. The
exchange privilege is available only to those who have completed or
terminated a New Plan and received New Class shares of the fund
directly. The Fidelity Advisor funds includes, among others, common
stock funds, tax exempt and corporate bond funds and money market
funds. Before you make an exchange from either fund you should note
the following:
(small solid bullet) The fund you are exchanging into must be
available for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification
number.
(small solid bullet) Before exchanging into a fund, read its
prospectus.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund
performance and shareholders, each fund reserves the right to
temporarily or permanently terminate the exchange privilege of any
investor who makes more than four exchanges out of a fund per calendar
year. Accounts under common ownership or control, including accounts
with the same taxpayer identification number, will be counted together
for purposes of the four exchange limit.
(small solid bullet) Each fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would
be unable to invest the money effectively in accordance with its
investment objective and policies, or would otherwise potentially be
adversely affected.
(small solid bullet) The exchange limit may be modified for accounts
in certain institutional retirement plans to conform to plan exchange
limits and Department of Labor regulations. See your plan materials
for further information.
(small solid bullet) Your exchanges may be restricted or refused if a
fund receives or anticipates simultaneous orders affecting significant
portions of the fund's assets. In particular, a pattern of exchanges
that coincides with a "market timing" strategy may be disruptive to a
fund.
Although the funds will attempt to give you prior notice whenever they
are reasonably able to do so, they may impose these restrictions at
any time. The funds reserve the right to terminate or modify these
exchange privileges in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to 1.00% and trading fees of up to 3.00% of
the amount exchanged. Check each fund's prospectus for details.
No dealer, sales representative, or any other person has been
authorized to give any information or to make any representations,
other than those contained in this Prospectus and in the related SAI,
in connection with the offer contained in this Prospectus. If given or
made, such other information or representations must not be relied
upon as having been authorized by the funds or FDC. This Prospectus
and the related SAI do not constitute an offer by the funds or by FDC
to sell or to buy shares of the funds to any person to whom it is
unlawful to make such offer.
Fidelity, Fidelity Investments & (Pyramid) Design, and Fidelity
Investments are registered trademarks of FMR Corp.
The third party marks appearing above are the marks of their
respective owners.
JMW PRO
SPONSOR
FIDELITY DISTRIBUTORS CORPORATION
82 Devonshire Street
Boston, Massachusetts 02109
FIDELITY INVESTMENTS INSTITUTIONAL
SERVICES COMPANY, INC.
BROKER/DEALER SERVICES DIVISION
82 Devonshire Street
Boston, MA 02109
FOR INVESTMENT PROFESSIONALS OR POTENTIAL
INVESTORS SEEKING AN INVESTMENT PROFESSIONAL
RECOMMENDATION CALL:
NATIONWIDE: 1-800-433-0734
IN ALASKA OR OVERSEAS (CALL COLLECT): 617-328-5000
CUSTODIAN
STATE STREET BANK AND TRUST COMPANY
Boston, Massachusetts
TRANSFER AND SHAREHOLDERS'
SERVICING AGENT
BOSTON FINANCIAL DATA SERVICES, INC.
P.O. Box 8300
Boston, Massachusetts 02266-8300
FOR ACTIVE PLANS CALL:
Nationwide: 1-800-225-5270
FIDELITY SERVICE COMPANY, INC.
P.O. Box 770002
Cincinnati, OH 45277-0002
Nationwide: 1-800-433-0734
AUDITORS
PRICEWATERHOUSECOOPERS L.L.P.
Boston, Massachusetts
I.DES-PRO- 2 9 9
Printed on recycled paper
EXHIBITS
A. (1) Custodian Agreement, as amended and restated, dated as of
March 30, 1999, between Fidelity Distributors Corporation
and State Street Bank and Trust Company is electronically
filed herein as Exhibit A(1).
(2) None.
(3) (a) Not applicable.
(b) Fidelity Systematic Investment Plans (Destiny) Selling
Dealer Agreement is electronically filed herein as Exhibit
A(3)(b).
(c) Schedule B to Fidelity Systematic Investment Plans
(Destiny) Selling Dealer Agreement is electronically filed
herein as Exhibit A(3)(b).
(4) None.
(5) (a) Not applicable.
(b) Not applicable.
(6) Articles of Incorporation and By-laws of Fidelity
Distributors Corporation are incorporated herein by
reference to Exhibit 1.A.(6) of Post-Effective Amendment
No. 50.
(7) The Undertaking required by Rule 27d-2(a)(2) and the
Consolidated Financial Statements of Federal Insurance
Company, for the fiscal year ended December 31, 1997, are
electronically filed herein as Exhibit A(7).
(8) Franchise Agreement dated March 30, 1999, between Fidelity
Distributors Corporation and Fidelity Destiny Portfolios,
on behalf of Destiny I, is electronically filed herein as
Exhibit A(8).
Franchise Agreement dated December 30, 1985 between
Fidelity Distributors Corporation and Fidelity Destiny
Portfolios, on behalf of Destiny II, is electronically
filed herein as Exhibit A(8).
(9) None.
(10) Not applicable.
B. (1) Not applicable.
(2) Audited Financial Statements, for the fiscal year ended
September 30, 1998, are filed herein as part of the
Prospectus.
C. Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets
all of the requirements for the effectiveness of this Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and
has duly caused this Post-Effective Amendment No. 66 to the
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Boston, and Commonwealth of
Massachusetts, on this 2nd day of April, 1999.
FIDELITY DISTRIBUTORS CORPORATION
By /s/ Martha Willis
Martha Willis, President and Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons
in the capacities and on the dates indicated.
(Signature) (Title) (Date)
/s/Martha Willis President and Director April 2, 1999
Martha Willis
/s/Edward C. Johnson 3d Director April 2, 1999
Edward C. Johnson 3d
/s/James C. Curvey Director April 2, 1999
James C. Curvey
/s/Caron Ketchum Treasurer April 2, 1999
Caron Ketchum
Exhibit A(1)
FIDELITY SYSTEMATIC INVESTMENT PLANS
AMENDED AND RESTATED
CUSTODIAN AGREEMENT
MADE AS OF [MARCH 30, 1999]
This AGREEMENT ("Agreement") made as of [March 30, 1999] between
FIDELITY DISTRIBUTORS CORPORATION, a Massachusetts corporation with an
office at 82 Devonshire Street, Boston, Massachusetts (hereinafter
called the "Sponsor") and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts corporation with an office at 225 Franklin Street,
Boston Massachusetts 02110 (hereinafter called the "Custodian"),
amending and restating the original custodian agreement between Crosby
Plans Corporation (whose name has been changed to Fidelity
Distributors Corporation) and State Street Bank and Trust Company
dated July 15, 1969 and subsequently amended on March 15, 1972, June
30, 1975, November 1, 1982, and by a 1985 memorandum, and as
subsequently amended and restated on September 16, 1994 (the original
custodian agreement and the original custodian agreement as amended
from time to time prior to the date of this Agreement each hereinafter
referred to as a "Predecessor Custodian Agreement" and collectively as
the "Predecessor Custodian Agreements"), all relating to FIDELITY
SYSTEMATIC INVESTMENT PLANS ("Fidelity Plans"), for the purposes of:
(1) updating administrative procedures applicable to all periodic
payment plans of Fidelity Plans issued pursuant to any of the
Predecessor Custodian Agreements, provided that such updating of
procedures does not affect adversely any such plan issued and
outstanding prior to the date of this Agreement, and (2) setting forth
the terms, conditions and procedures that shall govern such plans
issued hereafter.
WITNESSETH
WHEREAS, the Sponsor was formed to develop financial planning programs
and to sell shares of mutual funds and other securities, and desires
to obtain the services of the Custodian in connection with the
administration of certain plans providing for investment in shares of
Fidelity Destiny Portfolios, a Massachusetts business trust registered
as an open-end management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"), the shares of
beneficial interest of which are divided into series and classes
consisting of Destiny I: Initial Class and New Class and Destiny II:
Initial Class and New Class (collectively hereinafter called the
"Fund") or shares of other open-end management investment companies as
herein provided. Such plans include plans that are issued and
outstanding prior to the date of this Agreement, as well as plans that
the Sponsor proposes to sell and distribute to the public on or after
the date of this Agreement; and
WHEREAS, Fidelity Plans is a unit investment trust consisting of four
series of periodic payment plans (defined more specifically below and
referred to collectively in this preamble as the "Plans"), providing
for the accumulation of shares of the Fund; and
WHEREAS, Plans of one series of Plans ("Destiny Initial Plans I")
accumulate shares of Destiny I: Initial Class of the Fund, Plans of a
second series of Plans ("Destiny New Plans I") accumulate shares of
Destiny I: New Class of the Fund, Plans of a third series of Plans
("Destiny Initial Plans II") accumulate shares of Destiny II: Initial
Class of the Fund, and Plans of a fourth series of Plans ("Destiny New
Plans II") accumulate shares of Destiny II: New Class of the Fund; and
WHEREAS, in accordance with the terms of Destiny Initial Plans I and
Destiny Initial Plans II, administrative procedures applicable to such
Plans under the terms of a Predecessor Custodian Agreement may be
updated, provided that such updating of procedures does not affect
adversely Plans issued and outstanding at the time such updated
procedures are implemented; and
WHEREAS, the Sponsor and the Custodian have determined that the
updated procedures contemplated by this Agreement would not affect
adversely Plans issued and outstanding at the time such updated
procedures are proposed to be implemented; and
WHEREAS, it is the intent of the Sponsor and the Custodian that the
updated procedures contemplated by this Agreement be applicable to all
Plans issued prior to, and on or after the effective date of this
Agreement; and
WHEREAS, under each of the Predecessor Custodian Agreements, the
Sponsor and the Custodian have the right to make changes in the
administration of Destiny Initial Plans I and Destiny Initial Plans
II, respectively, issued and outstanding, provided that such changes
will not adversely affect the rights and privileges of the planholders
thereof; and
WHEREAS, the Sponsor and the Custodian believe that it is in the best
interests of holders of Destiny Initial Plans I and Destiny Initial
Plans II to administer the Destiny Initial Plans I and Destiny Initial
Plans II under this Agreement as plans of an existing series of
Fidelity Plans and to treat such Destiny Initial Plans I and Destiny
Initial Plans II as having been issued under and governed by this
Agreement; and
WHEREAS, the Sponsor and the Custodian believe that this action will
not adversely affect the rights and privileges of any holder of an
outstanding Plan; and
WHEREAS, the Sponsor and the Custodian intend to effect this action on
March 30, 1999; and
WHEREAS, the Custodian is willing to render the services specified in
this Agreement, but only on the terms and conditions set forth herein
and in the Plans:
NOW, THEREFORE, in consideration of the mutual covenants herein set
forth, the parties hereto agree as follows:
1. PLANS AND CUSTODIANSHIP.
(a) The Sponsor offers four types of periodic payment plans:
"Fidelity Systematic Investment Plans: Destiny Initial Plans I, for
the Accumulation of Shares of Fidelity Destiny Portfolios: Destiny I:
Initial Class" (referred to hereinafter as "Destiny Initial Plans I"),
"Fidelity Systematic Investment Plans: Destiny New Plans I, for the
Accumulation of Shares of Fidelity Destiny Portfolios: Destiny I: New
Class" (referred to hereinafter as "Destiny New Plans I"), "Fidelity
Systematic Investment Plans: Destiny Initial Plans II, for the
Accumulation of Shares of Fidelity Destiny Portfolios: Destiny II:
Initial Class" (referred to hereinafter as "Destiny Initial Plans
II"), and "Fidelity Systematic Investment Plans: Destiny New Plans
II, for the Accumulation of Shares of Fidelity Destiny Portfolios:
Destiny II: New Class" (referred to hereinafter as "Destiny New Plans
II") (collectively, the "Plans"). The Plans provide for the purchase
of shares of a specified series and class of the Fund, or of shares of
any other open-end management investment company substituted therefor
under the terms of the Plans (all such shares and any fractional
interests therein are hereinafter referred to as "Fund Shares"). In
the event of a conflict between an applicable Plan Document in effect
at the time of establishment of an account in connection with such
Plan, the Custodian shall administer the applicable Plan according to
this Agreement unless instructed otherwise by the Sponsor.
Plans may, but need not, be issued in certificate form. Plans that
have been issued in certificate form (a "Certificate") under a
Predecessor Custodian Agreement or a Security Agreement, respectively,
are substantially in one of the forms attached hereto at Exhibit A and
Exhibit B. If a Certificate has been issued in connection with a
Plan, then such Plan shall be governed by the terms and conditions set
forth in the Certificate. In addition, each Plan, including Plans
issued in Certificate form and Plans not issued in Certificate form,
shall be governed by the terms and conditions set forth in the
prospectus for such Plan as in effect at the time such Plan was issued
("Prospectus"). The terms and conditions set forth in the respective
Certificates and Prospectuses (together, the "Plan Documents") are
incorporated herein and made a part of this Agreement. Each Plan
shall be administered under this Agreement in accordance with
applicable Plan Documents in effect at the time of the establishment
of an account in connection with such Plan.
The Plan Documents are subject to such changes in form and content as
the Sponsor may effect from time to time and, with respect to changes
in form and content of any issued and outstanding Plans, in accordance
with the terms of applicable Plan Documents. In addition, the Sponsor
may elect to apply such changes to Plans already issued only if such
changes do not adversely affect the rights and privileges of the
Planholders thereof. Any such changes in Plan Documents affecting
implementation of the provisions of this Agreement shall be
acknowledged by the Sponsor and the Custodian.
(b) The Custodian accepts the custodianship hereunder with respect to
Plans issued pursuant to the terms of each of the Predecessor
Custodian Agreements that are outstanding on the date of this
Agreement, on the terms and conditions set forth in the Plan Documents
applicable to such Plans. The Custodian accepts the custodianship
hereunder with respect to Destiny New Plans I and Destiny New Plans
II, on the same terms and conditions as those set forth in the Plan
Documents applicable to Destiny Initial Plans I and Destiny Initial
Plans II on the date hereof.
(c) The Custodian accepts the custodianship hereunder with respect to
Plans issued after the date of this Agreement on the terms and
conditions set forth in this Agreement and in the Plan Documents
applicable to such Plans; provided that the Custodian may, as a
condition to accepting custodianship with respect to a Plan, require
the Sponsor to furnish to the Custodian:
(i) Evidence satisfactory to the Custodian that the Sponsor has
taken all necessary action to satisfy the requirements of the
Investment Company Act of 1940, as amended (the "1940 Act"), in
connection with the issuance of the Plans; that a registration
statement under the Securities Act of 1933, as amended (the "1933
Act"), covering Plans to be offered after the date of this Agreement
is effective; that the Fund shares are the subject of a currently
effective registration statement under the 1933 Act; that the
registration of the Sponsor as a broker-dealer under the Securities
Exchange Act of 1934, as amended (the "1934 Act") is effective; that
the Sponsor is a member in good standing of the National Association
of Securities Dealers, Inc.; and that all other necessary approvals of
the Plans and the issuance and sale thereof by governmental
authorities having jurisdiction with respect thereto has been duly
obtained.
(ii) Such additional documents, certificates and opinions as the
Custodian may reasonably require.
2. CUSTODIAN'S FUNCTIONS.
(a) Issuance of New Plans. Upon receipt by the Custodian or its agent
of an application for a Plan, and of funds, check or other order for
the payment of money representing the initial payment for a Plan by
the purchaser thereof (hereinafter called the "Planholder"), and any
Designation of Beneficiary that may be required by the Sponsor or
pursuant to applicable Plan Documents, the Custodian will then:
(i) establish an account for such Planholder that reflects the face
amount of the new Plan;
(ii) forward for collection such check or other order for the payment
of money as hereinafter provided in section 2(b)(i) hereof; and
(iii) forward to the Planholder by first-class mail the Custodian's
letter of transmittal and a notice conforming to the requirements of
Section 27(f) of the 1940 Act, Rule 27f-1 thereunder (or any successor
rule) and as described in the Plan Documents for such Plan, and such
other explanatory information or communication to the Planholders as
may be furnished by the Sponsor, including, but only if so directed by
the Sponsor, a Plan Certificate. Such form of notice shall be
approved by the Sponsor.
(b) Application of Payments Under Issued and Outstanding Plans. Upon
receipt by the Custodian or its agent of any payment identified by the
Custodian as being for the account of a Planholder and that is made in
accordance with applicable Plan Documents, including any payment being
made pursuant to an extended investment option, the Custodian will:
(i) Forward for collection any check or other order for the payment
of money representing such payment. In the event any check or other
order for the payment of money forwarded by the Custodian for
collection is returned unpaid for any reason, the Custodian may, in
its discretion or as from time to time instructed by the Sponsor,
redeposit such check for collection. If such item is returned a
second time as unpaid, any Fund Shares acquired with said check shall
be redeemed and to the extent there is a deficiency the Custodian
shall charge any deficiency (including applicable custodian fees) to
the Sponsor. The Custodian shall promptly notify the Planholder of
any such returned item and send a copy of such notice to the Sponsor
or selling broker-dealer.
(ii) Deduct from the payment the amount of any applicable original
issue, stock transfer, sales or other taxes and apply such amounts to
the purchase of the necessary tax stamps or to payments to the proper
taxing authorities, as the case may be.
(iii) Deduct therefrom the applicable fees of the Sponsor and the
Custodian as set forth in Schedules 1 and 2 to this Agreement
applicable to such Plan. Such deductions shall be credited to the
Sponsor or the Custodian, as the case may be.
(iv) Apply, within two business days unless impracticable, the
balance of the payment to the purchase of Fund Shares, and credit the
account of the Planholder (computed to three decimal places) with the
number of Fund Shares so purchased.
(v) Prepare and mail to the Planholder a receipt in a form to be
approved by the Sponsor, which receipt shall be substantially in the
form attached hereto as Exhibit C and comply as to form and delivery
with the requirements of Rule 10b-10 of the 1934 Act (or any successor
rule), and which receipt shall show the Plan number, the amount of the
payment received, the price paid per Fund Share, the sales charges
deducted, the custodian charge deducted, the number of such Fund
Shares purchased after the deductions and the total Fund Shares then
held by the Custodian for the Planholder. Such receipts shall be
mailed by the Custodian to Planholders, and at the same time a copy of
the receipt shall be sent to the selling broker-dealer, both to be
mailed within two business days (within seven business days for
receipts issued in connection with the purchase of Fund Shares for the
establishment of new accounts) from the date the Custodian purchases
Fund Shares with the payment for which a receipt is being prepared and
mailed (or as soon thereafter as possible).
(c) Additional Notices.
(i) Reminder Notices. The Custodian shall mail to each Planholder
prior to the Planholder's payment date a remittance form and, unless
otherwise agreed to, a return envelope to be used with the
Planholder's next payment. Such form of notice shall be approved by
the Sponsor and shall be substantially in the form attached hereto as
Exhibit D.
(ii) Past Due Payment Notices. On a periodic basis as agreed upon
from time to time by the Sponsor and the Custodian, the Custodian
shall prepare and mail to the Planholder a notice of past due payment
in accordance with applicable Plan Documents and applicable law. Such
form of notice shall be approved by the Sponsor and shall be
substantially in the form attached hereto as Exhibit E. The Custodian
shall provide the selling broker-dealer, or in the absence of such,
the Sponsor, with a duplicate of each such notice sent to any
Planholder.
(iii) Refund Notices. The Custodian also shall mail to each
Planholder any notice(s) required by Section 27(e) of the 1940 Act and
Rule 27e-1 thereunder (or any successor rule). Such notice(s) shall
comply with Section 27(e) and Rule 27e-1 thereunder (or any successor
rule) and shall be in accordance with applicable Plan Documents. Such
form of notice shall be approved by the Sponsor and shall be
substantially in the form attached hereto as Exhibit F.
(iv) Termination Notices. In the event that a Plan is being
terminated by the Sponsor or the Custodian in accordance with the
terms of applicable Plan Documents and Section 7 of this Agreement,
the Custodian shall also mail or deliver to the affected Planholder a
notice of termination as described in applicable Plan Documents and in
Section 7(c) of this Agreement. The Custodian will provide the
selling broker-dealer or, in the absence of such, the Sponsor with a
duplicate of each such notice sent to any Planholder. Such form of
notice shall be approved by the Sponsor and shall be substantially in
the form attached hereto as Exhibit G.
(v) Other Notices. The Custodian shall also mail or deliver to
each Planholder any other notices required by any applicable federal
or state law, rule, or regulation, in such form and by such means as
are required by such law, rule, or regulation. The form of any such
notice shall be approved by the Sponsor.
(d) Refund Procedures. In the event that the Custodian is required
under applicable provisions of Plan Documents to accept the return of
the Plan and to reimburse to the Planholder all or a portion of the
Planholder's payments made as specified in the Plan Documents for such
Plan, the Custodian shall charge against the deposit account of the
Sponsor in the banking department of the Custodian the amount of any
such reimbursed payment in excess of the net asset value of Fund
Shares purchased under such Plan; and, unless such return is elected
within 45 days of the mailing of the notice described in Section
2(a)(iii) above, less the amount of any Custodian fees. In the event
that such refund procedures are initiated with respect to the account
of a Planholder, the Custodian shall inform the selling broker-dealer
or in the absence of such, the Sponsor.
(e) Prepayments. A Planholder will be permitted to complete a Plan
ahead of schedule, but only in accordance with the terms and
conditions of applicable Plan Documents. Any such prepayments
received by the Custodian shall be applied, to the extent of the
balance thereof after authorized deductions, to the next succeeding
payments due and payable under the Plan in the order in which they
become due. In computing the commencement of any period of default,
the Planholder shall first be given full credit for a period equal to
that covered by any and all payments made ahead of schedule by the
Planholder.
(f) Changes in Plan Face Amount. A Planholder may change the face
amount of a Plan, but only in accordance with the terms and conditions
of applicable Plan Documents. If such change in face amount is
approved by the Sponsor, the Custodian shall make appropriate changes
in the Planholder's account, and if so requested by the Sponsor,
prepare and countersign a Certificate for a Plan in the changed
denomination and forward it by first class mail to the Planholder with
such communications as may be furnished to the Custodian by the
Sponsor. Changes in the face amount of a Plan shall be implemented by
the Custodian only upon receipt of:
(i) written instructions from the Planholder, Sponsor or selling
broker-dealer, as applicable, as to the increase or decrease in Plan
face amount, which instructions shall set forth the Plan account
number, the face amount of the new Plan, the amount of each monthly
payment on the new Plan, the number of Plan payments which are to be
credited to the new Plan, and the amount, if any, of the adjustment in
sales charges and custodian fees resulting from the change in face
amount and such other information as may be reasonably requested from
time to time by the Custodian. Such adjustment shall be in accordance
with the terms of applicable Plan Documents and shall be effective
concurrently with the change in face amount; i.e., at the time a new
Plan is established that reflects the new face amount;
(ii) in the case of a face amount increase, payment by check in the
amount of the first payment to be made under the Plan as increased in
face amount, as specified in applicable Plan Documents, unless such
payment is reduced or waived by the Sponsor;
(iii) if the total payments made on the Plan surrendered are not an
integral multiple of the monthly payments required on the new Plan, a
check in the sum that is required by the Sponsor to enable the
remaining monthly payments (after giving credit for payments already
made) to equal the face amount of the new Plan; and
(iv) the Plan Certificate for the Plan being surrendered, if
applicable.
(g) Partial Liquidations and Replacement. A Planholder may make a
partial liquidation from the Planholder's account, but only in
accordance with the terms and conditions of applicable Plan Documents.
Any such request for a withdrawal received by the Custodian or its
agent shall be processed by the Custodian, and proceeds shall be
payable by the Custodian to such Planholder, in accordance with the
terms and conditions of applicable Plan Documents and with the 1940
Act. Following a partial liquidation, a Planholder is permitted to
exercise a replacement privilege with respect to such partial
liquidation if and to the extent such replacement is provided for in
applicable Plan Documents. Upon receipt by the Custodian or its agent
of any payment identified by the Custodian as being a replacement of a
partial liquidation for the account of a Planholder and that is made
in accordance with applicable Plan Documents, the Custodian will
process and credit such payment for the account of the Planholder in
accordance with the provisions of section 2(b) of this Agreement,
applicable Plan Documents, and the 1940 Act.
(h) Transfers or Assignments of Plans. A Planholder may make a
transfer or assignment of the Planholder's right, title, and interest
in the entire plan, but only in accordance with the terms and
conditions of applicable Plan Documents. Any such request for a
transfer or assignment received by the Custodian or its agent shall be
recorded by the Custodian in accordance with the terms and conditions
of applicable Plan Documents until the assignee shall have notified
the Custodian that the transfer or assignment has terminated. The
terms of any such transfer or assignment shall be subject to
applicable Plan Documents. During the term of the transfer or
assignment, such Planholder shall retain those rights specified in
applicable Plan Documents.
(i) Termination on Default. If the Planholder defaults in making Plan
payments for the period of time specified in applicable Plan Documents
as the default period, or if Fund Shares are not obtainable and a
substitution is not made, the Plan shall be considered in a state of
default, and the Plan may be terminated in accordance with applicable
Plan Documents in the manner and with the effect set forth therein.
Such termination may only be effected after mailing by the Custodian
of written notice of the termination to the Planholder in accordance
with the terms of applicable Plan Documents; a copy of such written
notice of termination shall also be mailed to the selling
broker-dealer or in the absence of such, the Sponsor.
(j) Plan Reinstatement or Replacement Following Termination. A
Planholder that has terminated a Plan may exercise a Plan
reinstatement provision, which provides for reinvestment of a
specified amount in a Plan, but only in accordance with and pursuant
to the terms and conditions of applicable Plan Documents. Any such
reinstatement order and investment received by the Custodian or its
agent shall be processed by the Custodian and credited for the account
of such Planholder in accordance with the terms and conditions of
applicable Plan Documents, section 2(b) of this Agreement, and the
1940 Act.
(k) Records.
(i) The Custodian will prepare and maintain complete up-to-date
records of the performance of its duties hereunder, on magnetic tape
or otherwise, including records showing a separate account for each
Planholder, and the name and address of the Planholder; the number,
date and amount of each payment made by the Planholder; the date and
amount of all dividends and distributions received by the Custodian on
Fund Shares held for the account of the Planholder; any amounts
withheld from withdrawals under a Plan in accordance with the Internal
Revenue Code of 1986, as amended, and any regulations thereunder (or
successor regulations); and all deductions made and the number of Fund
Shares acquired and held by the Custodian for the account of the
Planholder. These records shall be maintained and preserved in
accordance with applicable requirements of Section 31 of the 1940 Act
and rules thereunder (or any successor rule), and in accordance with
state securities laws ("Blue Sky laws") applicable to records kept
with regard to the Plans. Such records shall be made available to the
Sponsor for inspection or audit via magnetic tape or at the office of
the Custodian at all reasonable times.
(ii) The Custodian shall maintain a separate account for each
Planholder showing the number of Fund Shares (to three decimal places)
and the amount of cash, if any, to the credit of each account. The
records of such accounts shall be maintained separate and apart from
the Custodian's corporate records.
(l) Statements Furnished to Sponsor and Selling Broker-Dealer. The
Custodian will render statements to the Sponsor at such time and in
such form as may be agreed upon by the parties hereto, showing for
each account in which transactions were recorded during the specified
period the number of the account, the amount of the payment(s)
received, the number of such payment(s), the deductions made, the
balance applied to the purchase of Fund Shares, and the number of
Shares purchased.
(m) Application of Dividends and Distributions. The Custodian will
receive all dividends and distributions on the Fund Shares held by it
as Custodian for each Planholder and, after deduction therefrom of (i)
any applicable charges and deductions set forth in Schedules 1 or 2 or
otherwise specified in the Plan Documents, and (ii) applicable taxes
required by law or elected by a Planholder to be withheld therefrom,
will with respect to each account for a Planholder, either apply the
balance to the purchase of Fund Shares, or distribute the balance to
the Planholder as he shall have elected in accordance with applicable
Plan Documents. Any dividend or distribution payable optionally in
cash or in Fund Shares, may, at the discretion of the Custodian, be
accepted by the Custodian in cash or in Fund Shares in such proportion
as may be determined by the Custodian and the Fund.
(n) Custodian Fees and Charges. The Custodian will perform the
functions required of it by the terms of this Agreement and will be
entitled to deduct the charges set forth in Schedule 2 applicable to
the Plans and as specified in the applicable Plan Documents. These
charges shall be deducted from payments or the Planholders' accounts,
or shall be paid by Fidelity Service Company (FSC), as specified in
applicable Plan Documents, unless the Custodian is otherwise
reimbursed by the Sponsor. In connection with the foregoing:
(i) With respect only to Plan accounts established after October
31, 1982, for the calendar year commending January 1, 1982 and each
calendar year thereafter, the Custodian shall reimburse the Sponsor
for any amounts paid to it by the Sponsor in prior fiscal years
pursuant to Schedule 2 of this Agreement the extent that the actual
expenses of the Custodian covered by the Service Charge (as specified
in Schedule 2) for that fiscal year are less than $10.00 per Plan
account, and will charge each Plan account the amount of such
reimbursement in an amount not to exceed the difference between $10.00
and the actual expenses to be charged to a Plan account for that
fiscal year.
(ii) If the amount of deductions from the accounts of Planholders or
amount paid by FSC, as the case may be, as provided in Schedule 2 are
not sufficient to reimburse the Custodian for the charges, fees, and
expenses specified in Schedule 2, the Sponsor shall pay to the
Custodian the difference between the total amount of all such charges,
fees, and expenses, and the amounts which the Custodian deducted.
(iii) In case of default by the Sponsor in the performance of any
administrative service relating to the custodianship described in this
Agreement required of it under the provisions of Section 3(c) below,
or at the election of the Custodian, the Custodian will perform such
service for a consideration payable by or from the account of the
Planholders or the New Classes of the Funds, as the case may be. Such
consideration shall not be in excess of the amount provided for in
this Agreement, including schedules hereto.
(iv) Any deductions under the terms of this provision shall be made
in accordance with the terms of Section 26(a)(2) of the 1940 Act and
any rules thereunder (or any successor rules).
(o) Purchases of Fund Shares. All purchases of Fund Shares by the
Custodian pursuant to the provisions of this Agreement shall be made
from the Fund, or its issuing agent (or any underwriter of Fund Shares
with which the Sponsor may contract for such purpose) at the net asset
value of the Fund at the time of purchase as calculated by Fidelity
Service Co. (or any successor thereto) in accordance with the terms of
the Fund's then current prospectus. The Custodian shall be entitled
to presume conclusively that the price set by Fidelity Service Co. (or
any successor thereto) with respect to any Fund Shares purchased by
the Custodian is said net asset value. Funds received by the
Custodian to be applied to the purchase of Fund Shares shall, unless
impracticable, be applied to such purchase within two business days
after the receipt by the Custodian of said payments, dividends or
distributions.
(p) Sales of Fund Shares. All sales of Fund Shares by the Custodian,
as agent, pursuant to the provisions of this Agreement, shall be made
by deposit of the shares with the Fund or its duly authorized agent
together with a request that the shares be repurchased at the net
asset value of the Fund at the time of sale as calculated by Fidelity
Service Co. (or any successor thereto) in accordance with the terms of
the Fund's then current prospectus, so long as the privilege of
redemption at net asset value is available to holders of Fund Shares
as set forth in the Fund's then current prospectus. Whenever pursuant
to the provisions of this Agreement Fund Shares are to be sold or
redeemed, the Custodian shall first withdraw the Fund Shares from the
custodianship hereunder and, as agent for the Planholder, shall sell
or redeem said shares by depositing them for repurchase as set forth
above. Anything herein to the contrary notwithstanding, (i) the
Custodian, as agent for the Planholders, is authorized to offset sales
and purchases for all of the Planholders on a business day and,
accordingly, to place with the Fund or its agent a net purchase order
for the excess of purchases over sales, or a net sale order for the
excess of sales over purchases; and (ii) any such sales of Fund Shares
in connection with a Plan termination, a withdrawal of shares by a
Planholder, or an exercise of an exchange privilege by a Planholder,
shall be effected by the Custodian in accordance with the terms and
conditions of applicable Plan Documents.
(q) Holding Fund Shares. The Custodian shall have possession of, and
shall segregate and hold all of the securities and other properties in
which the funds of the Planholders of each Series are invested, all
funds held for such investment, any redemption or other special funds
to the Planholders, and all income upon and accretion to and proceeds
of such properties and funds subject only to the deductions specified
in this Agreement or in the Plan Documents, unless and until
distributed to the Planholders in accordance with the terms of
applicable Plan Documents. The Custodian is authorized to commingle
all cash or other property and all Fund Shares held by it hereunder
for a Series, but only with other cash, property or Fund Shares held
by it hereunder for such Series, and to cause any certificates for
Fund shares to be registered in its name as Custodian or in the name
of its nominees. Except as provided below with respect to bank
accounts, nothing herein shall be construed as permitting the
Custodian to commingle the Fund Shares, securities or other properties
of Plans of one Series with plans other than the Plans of the same
Series. All monies deposited with or received by the Custodian
hereunder shall be held by it without interest as part of the
custodianship until required to be disbursed in accordance with the
provisions of this Agreement or of the Plans. The Custodian shall
open and maintain separate bank accounts in the banking department of
the Custodian in the name and for the benefit of each Series of the
Plans, subject only to the draft order of the Custodian or order of
the Custodian acting pursuant to the terms of this Agreement, and
shall hold in such bank accounts all monies received by the Custodian
from and for the account of each Series of the Plans. The Custodian
may aggregate or commingle the bank accounts of each Series as
instructed by the Sponsor.
(r) Reports and Other Mailings to Planholders. The Custodian will:
(i) Upon the instructions of the Sponsor or the Fund, mail to all
Planholders such prospectuses, annual reports, semi-annual reports,
quarterly reports and/or other periodic financial reports, dividend or
other account statements, tax notices, notices of meetings and proxy
soliciting material as are available and the mailing of which is
required by applicable law or regulation. The cost of the above,
including postage, shall be reimbursed to the Custodian by the
Sponsor. It is understood and agreed that the services performed by
the Custodian hereunder are separate and apart from the services
performed under Section 2(n) above and Section 2(s) below.
(ii) Prepare and file such reports and returns as are required by
law or regulation to be prepared and filed by the Custodian to permit
its custodianship under the Agreement to continue in operation.
(s) IRS Reporting. The Custodian shall furnish to the Internal
Revenue Service and to each Planholder all required returns relating
to dividends or other distributions to such Planholder's account(s)
for federal income tax reporting purposes.
(t) Court Orders and Levies. The Custodian is empowered to make a
distribution absent the Sponsor's direction if instructed to do so
pursuant to a court order of any kind, or a levy issued by the
Internal Revenue Service.
(u) Delegation of Duties. The Custodian assumes primary
responsibility for the preparation and filing of all such reports or
documents as are required of it as Custodian by law or regulation, but
may delegate the performance of such duties to the Sponsor. Upon the
written request of the Sponsor, the Custodian will delegate any of its
functions described in this Section 2 or in Section 3 of this
Agreement, provided that such delegation is not inconsistent with
Sections 26 or 27 of the 1940 Act. In addition, the Custodian may
delegate its duties under this Agreement to its affiliate, Boston
Financial Data Services, Inc. ("BFDS"), a transfer agent registered
under Section 17A(c)(2) of the 1934 Act, provided that such delegation
is not inconsistent with Sections 26 or 27 of the 1940 Act. In the
event that the Custodian delegates one or more of its duties hereunder
to BFDS, the Custodian shall remain responsible for the acts and
omissions of BFDS as it is for its own acts and omissions hereunder.
3. SPONSOR'S FUNCTIONS.
(a) General Functions. The Sponsor agrees to perform the functions
required of it by the terms hereof and of the Plan Documents. The
Sponsor will use its best efforts to distribute Plans, maintain
adequate office facilities and management staff, and keep current
records. The Sponsor assumes full responsibility for the preparation,
contents, and distribution of the current Plan prospectus and the
current Fund prospectus, for complying with all applicable
requirements of the 1933 Act, the 1940 Act, and any other applicable
laws, rules and regulations of governmental authorities having
jurisdiction. With respect to any duties for which the Custodian
assumes primary responsibility but which it delegates to the Sponsor,
the Sponsor covenants and agrees to take all action, and not to omit
any action, necessary to carry out such duties, and agrees to furnish
to the Custodian, upon request, evidence thereof satisfactory to the
Custodian and its counsel. The Sponsor will use its best efforts to
make shares of the Fund available for purchase by the Custodian at net
asset value.
(b) Issuance of New Plans. The Sponsor will require each selling
broker-dealer to agree to forward to the Custodian upon the sale of
each Plan the application for such Plan, the check, funds (by wire or
Automatic Clearinghouse (ACH) transfer) or order for the payment of
money representing the initial payment under such Plan, and any
required Designation of Beneficiary.
(c) Statements Furnished to Custodian. The Sponsor will furnish to
the Custodian and file to the extent required by law on behalf of the
Custodian:
(i) As soon as available, a copy of each audit report and other
financial statements relating to the custodianship of the Plans and
sufficient reports and other documents required to be mailed to
Planholders under Section 2(r)(i) and (ii) above.
(ii) Not less than 20 calendar days prior to the due date thereof,
all Federal and State income tax returns, and all other tax returns,
if any, required by law to be filed by the Custodian with respect to
its custodianships hereunder, prepared in form for execution and
filing, together with advice concerning the proper allocation of
expenses and other items among the Planholders. Such tax returns
shall be filed by the Sponsor on behalf of the Custodian.
(iii) Any instructions received by the Sponsor from Planholders as a
result of the distribution of proxy soliciting material or otherwise
in connection with the voting of Fund Shares held by the Custodian.
The Custodian will vote those Fund Shares for which instructions have
been received from Planholders only in accordance with such
instructions. The Custodian will vote Fund Shares for which
instructions have not been received such that the total votes cast by
the Custodian in favor, abstaining, or opposed on any matter submitted
to Fund shareholders, including the election of Directors, will be in
the same proportion as the votes in favor, abstaining, or opposed cast
by the Custodian with respect to the Fund Shares for which
instructions have been received.
(iv) Draft copies of all literature, plans, prospectuses, printed
matter and other material which contain any reference to the
Custodian, except material which is merely circulated among or sent to
employees, stockholders, or representatives of the Sponsor and except
for correspondence in the ordinary course of business which refers in
accurate terms to the Custodian's functions under the Plans. The
Sponsor agrees that none of the documents specified in this clause
shall be reproduced in final form or distributed without the
Custodian's approval (which in each instance must be given or denied
within fifteen business days and which will not in any instance be
unreasonably withheld) of the Custodian.
(v) As soon as possible after January first of each year, printed
forms for reporting distributions to Planholders for income tax
purposes, unless the Custodian furnishes its own form.
(vi) As promptly as possible after receiving notice of the
declaration of dividends and distributions or the fixing of any record
date, notice thereof.
(d) Plans in Default. Upon receipt from the Custodian of a monthly
statement of Planholders specifying those Plans in current default on
payments, the Sponsor will require the selling broker-dealer to
promptly endeavor to have said Planholders remedy their defaults.
(e) Planholder Inquiries. The Sponsor and the Custodian will respond
promptly to each Planholder inquiry received by the Sponsor and
Custodian, respectively, to the extent that the Sponsor or Custodian,
as applicable, can respond to such inquiry. In the event that any
such inquiry cannot be responded to, the party receiving such inquiry
will refer the inquiry to other party to this Agreement.
(f) Plan Cancellations. In the event that the Sponsor receives from
the Custodian a notice of Plan cancellation by a Planholder, and such
cancellation is subject under applicable law and Plan Documents to a
refund of a portion of the Creation and Sales Charge previously
imposed under the Plan, the Sponsor shall transmit funds to the order
of the Custodian in an amount equal to the refundable amount
calculated in accordance with applicable law and Plan Documents.
4. SUBSTITUTION.
(a) Procedures and Expenses. In the event that the Sponsor
substitutes shares of another investment medium for shares of the Fund
in accordance with the procedures set forth in applicable Plan
Documents, all required notices shall be prepared and mailed by the
Sponsor. In connection with such substitution, the Custodian is
authorized to charge against the account of a Planholder such
Planholder's pro rata share of the expenses (including tax liability)
incurred by the Custodian, BFDS as the agent of the Custodian, or the
Sponsor, and to pay over to BFDS or to the Sponsor, as applicable, the
amount of such charge attributable to expenses incurred by BFDS or the
Sponsor, respectively, in connection with the substitution. The
Sponsor and the Custodian shall furnish to one another, and make
available to Planholders upon request, a detailed statement itemizing
their respective expenses.
(b) Purchases of Fund Shares. In the event of a substitution of
shares as described in Section 4(a) above, any purchases of fund
shares associated with such substitution shall be made at the net
asset value or at the liquidation value of such fund shares (whichever
term the issuer of such fund shares uses) as determined by the issuer
or the issuer's agent thereof as of the date such substitution is
effected.
(c) Effect of Substitution. In the event of any substitution of
shares as described in Section 4(a) above, the term "Fund" as used
throughout this Agreement shall be deemed to include the open-end
management investment company the shares of which have been thereby
substituted for Fund Shares; and the term "Fund Shares" as used
throughout this Agreement shall be deemed to include the shares (or
comparable interests) in the open-end management company the shares of
which have been substituted for Fund Shares.
5. INDEMNIFICATION.
The Sponsor, its successors and assigns, shall at all times fully
indemnify and hold harmless the Custodian, its successors and assigns,
from any and all liability, claims, demands, actions, suits, cost or
expense of any nature as the same may arise or be made against or be
incurred by the Custodian from the failure of the Sponsor to comply
with any law, rule, regulation or order of the United States, any
State or any other jurisdiction, governmental authority, body or board
having jurisdiction, relating to the sale, registration or
qualification of the Plans or any of them, or the securities sold in
connection therewith. The Sponsor also agrees to indemnify the
Custodian for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on the part of the
Custodian, arising out of or in connection with the acceptance hereof
or the performance of its duties hereunder, as well as the costs and
expenses of defending against any claim or liability in the premises,
provided that no claim against the Custodian which might be subject to
the foregoing indemnification provisions shall be confessed, settled
or compromised by the Custodian without the Custodian first having
given fifteen days notice in writing to the Sponsor of the material
facts, and provided further that the Sponsor shall have the right upon
written demand delivered to the Custodian within fifteen days
following the date of such notice to contest or defend such claim in
the name of the Custodian.
6. QUALIFICATIONS AND RESIGNATION OF CUSTODIAN.
(a) Capital. The Custodian and any successor Custodian shall be a
bank or trust company having at all times an aggregate capital,
surplus and undivided profits in excess of $2,000,000. The Custodian
certifies that it is now, and agrees that so long as it acts as
Custodian under any Plan will continue to be, so qualified.
(b) Holding of Monies. All monies received by the Custodian under or
pursuant to any provision of this Agreement or any Plan or other
instrument referred to herein shall be held by the Custodian as a
deposit for the purposes for which they were paid or are held, and the
Custodian shall not be under any liability for interest on any such
monies, except such as it may agree to pay thereon.
(c) Duties of the Custodian. The Custodian shall be obligated to
perform such duties and only such duties as are specifically set forth
in this Agreement and Plan Documents, and no implied obligations shall
be read into this Agreement or Plan Documents against the Custodian,
and in the absence of bad faith on its part the Custodian may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any instruments,
certificates, opinions or other writings furnished to the Custodian
and conforming to the requirements hereof. The Custodian shall not be
responsible in any manner whatsoever for the correctness of the
recitals (as distinguished from particular covenants) of the Custodian
herein, or recitals in Plan Documents made solely by the Sponsor. The
Custodian makes no representations as to Plan Documents or the
securities issued in connection therewith, or the validity thereof,
and the Custodian shall incur no liability or responsibility with
respect to any such matters. The Custodian shall not be responsible
for any actions or inactions of, and may rely on information, records,
documents or services (including functions performed by the Sponsor
under Section 2(t) of this Agreement) that have been taken or have
failed to be taken, prepared, maintained or performed by, the Sponsor
or any other person authorized by the Sponsor on behalf of the
Custodian, the Sponsor or the Plans, including but not limited to any
previous Sponsor or Custodian of the Plans.
(d) Additional Capacities. The Custodian may, at the same time it
acts hereunder, act in any one or more of the following capacities:
as registrar, transfer agent and custodian for the issuer of Fund
Shares, as agent for the parties or for the Planholders or the
Sponsor, or the issuer of Fund Shares, and in other capacities
customary for banks on behalf of these persons and of others dealing
with them.
(e) Advice of Counsel; Liabilities. The Custodian may consult with
legal counsel to be selected with reasonable care by the Custodian
(who may be counsel to the Sponsor) and the Custodian shall not be
liable for any action taken, omitted or suffered by it in good faith
in accordance with the advice of such counsel. Whenever in the
performance of its duties hereunder the Custodian shall deem it
necessary or desirable, a matter may be proved or established by a
certificate signed by any two officers of the Sponsor and delivered to
the Custodian, and such certificate shall be full warrant what is this
to the Custodian for any action taken, suffered or omitted by or in
reliance thereon. The Custodian may, in the absence of bad faith on
its part, rely and shall be protected in acting upon any request,
letter or transmittal, certificate, opinion of counsel, statement,
instrument, report, notice, consent, order, Plan or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties. The Custodian shall be
liable only for its wilful misconduct or gross negligence.
(f) Resignation. The Custodian may resign at any time if, but only
if, either (I) the securities and other property in which the funds of
the Planholders are invested have been completely liquidated and the
proceeds of such liquidation distributed to the Planholders, or (II) a
successor Custodian meeting with the reasonable approval of the
Sponsor and having the qualifications specified in Section 6(a) above
has been designated by the resigning Custodian or the Sponsor and has
accepted such custodianship.
7. TERMINATIONS.
(a) Termination of Plan by Planholder. A Plan may be terminated by
the Planholder in accordance with the provisions of applicable Plan
Documents.
(b) Termination of Plan by Sponsor or Custodian. Neither the Sponsor
nor the Custodian may terminate a Plan until such time as is specified
in applicable Plan Documents, unless and to the extent that conditions
specified in Plan Documents applicable to such Plan and permitting
such termination have been satisfied. If a Plan is in a state of
default or delinquency, as defined in applicable Plan Documents,
either the Sponsor or the Custodian may terminate such Plan in the
manner provided in such Plan Documents.
(c) Plan Termination Procedures. In connection with the termination
of any Plan in accordance with the provisions of applicable Plan
Documents and this Section 7, the Custodian will furnish the
Planholder and the Sponsor with a notice of termination showing all
changes in such Planholder's account since the date of the last
previous statement issued by the Custodian, and the Planholder shall
thereafter have no further claim against the Custodian, except as may
be set forth in such statement, and shall not be entitled to any
further accounting. In the event of termination of a Plan,
liquidation of the Planholder's account and final payment to said
Planholder shall be effected by the Custodian in accordance with
applicable Plan Documents.
(d) Return of Certificate Upon Termination of Plan. If a Certificate
was issued in connection with such terminated Plan and the Planholder
fails to surrender the Planholder's Certificate within a period of
sixty days after the mailing of the notice of termination referred to
above, the Custodian may in its discretion mail to such Planholder at
the Planholder's address noted upon its records, its check for all
cash standing to the Planholder's credit and such Fund Shares, if any,
which have been transferred to the Planholder's name; and such
Planholder shall have no further rights hereunder and such Certificate
shall be null and void and shall convey no rights whatsoever except
that if such check or Fund Shares are returned to the Custodian
undelivered, the Custodian shall continue to hold the assets for the
benefit of the Planholder subject only to escheat laws.
(e) Termination by Custodian of Custodian's Obligation.
(i) The obligation of the Custodian to accept any new Plan for
custodianship hereunder shall terminate if the Sponsor (I) fails to
maintain an effective registration statement under the Securities Act
of 1933, as amended, in connection with the issuance of the Plans;
(II) fails to cause the requirements of the 1940 Act to remain
satisfied in connection with the issuance of the Plans; (III) has
either its membership in the National Association of Securities
Dealers, Inc., or its registration as a broker-dealer under the
Securities Exchange Act of 1934, as amended, cancelled or revoked, or
suspended for more than 120 days for any cause involving failure on
the part of an executive officer or director to follow ethical
standards or serious neglect of that person's duty to require
representatives to follow such standards; (IV) defaults in the
performance of any other duty, covenant or agreement contained in this
Agreement, and such default shall remain unremedied for 30 days after
written notice thereof shall have been given to the Sponsor by the
Custodian (except with respect to item III, for which such remedy
period shall be 120 days), or (V) shall without the approval of the
Custodian change the form or content of the Plans in any way
materially affecting the rights or duties of the Custodian.
(ii) Notwithstanding the provisions of Section 7(e)(i) above, the
Custodian may terminate its obligation to accept any new Plans for
custodianship hereunder by giving written notice to the Sponsor at
least 90 days prior to the expiration of the third year from the date
of this Agreement, or at least 30 days prior to the expiration of any
further two-year period. In the event that the Custodian does not so
terminate its obligation to accept any new Plans for custodianship
hereunder as of the expiration of three years from the date of this
Agreement, then this Agreement shall be automatically renewed for
further periods of two years each with the right on the part of the
Custodian to terminate its obligations under the Agreement by giving
written notice at least 30 days prior to the expiration of any further
two-year period.
(f) Replacement of Custodian by Sponsor; Assumption of Administrative
Functions by Sponsor. The Sponsor shall have the right, by giving
written notice to the Custodian at least 90 days prior to the
expiration of this three-year Agreement, or at least 90 days prior to
the expiration of any two year extension period described in Section
7(e)(ii) above, to replace the Custodian with any other bank or trust
company having the requisite qualifications as the Custodian, both
with respect to any Plans issued and outstanding at the time of such
replacement, and under any Plans issued after such time, whether such
Plans are otherwise identical with those issued under this Agreement
or not. The Sponsor shall further have the right, by giving written
notice to the Custodian 90 days prior to the event, to assume such
administrative functions with respect to Plans as may be mutually
agreed upon by it and the Custodian.
(g) Upon such termination the Sponsor shall bear the cost of all
reasonable out-of-pocket expenses associated with the movement of
materials and records. Additionally, the Custodian reserves the right
to charge for any other reasonable expenses associated with such
termination, provided that the Custodian advises the Sponsor of such
additional charges in advance.
8. MISCELLANEOUS.
(a) This Agreement shall not be assigned by either of the parties
hereto without the prior consent in writing of the other party.
Notwithstanding the foregoing, (I) the Custodian shall delegate
responsibilities under this Agreement to the extent so directed by the
Sponsor in accordance with Section 2(t) of this Agreement; and (II)
each party to this Agreement may enter into such agreements with third
parties as are deemed necessary by such party to perform such party's
obligations under this Agreement or under the Plans, provided that
written acknowledgement of such third party agreements is obtained
from the other party to this Agreement.
(b) All communications provided hereunder shall be in writing sent by
first-class mail or delivered to the respective parties as follows:
Fidelity Distributors Corporation State Street Bank and Trust Company
82 Devonshire Street 225 Franklin Street
Boston, MA 02109 Boston, MA 02110
provided that either party may by notice given in accordance herewith
specify a different address for the purpose hereof.
(c) This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original and all of which shall be deemed
one and the same instrument.
(d) An executed copy of this Agreement and all amendments thereto
shall be kept on file by the Custodian and shall be open to inspection
by any Planholder at any time during the business hours of the
Custodian.
(e) This Agreement, including but not limited to Schedules 1 and 2
hereto, may be amended from time to time as mutually agreed by the
parties hereto in writing. Notwithstanding the foregoing, this
Agreement shall not be amended in such a manner as to affect adversely
the rights and privileges of any Planholder without first obtaining
the Planholder's written consent.
(f) All references herein to Schedules 1 and 2 hereto shall be deemed
to refer to Schedules 1 and 2 attached to this Agreement which are
hereby expressly made a part thereof; provided, however, that in the
case of Plans issued prior to the effective date of this Agreement of
which the Custodian has notice, references to Schedules 1 and 2 shall
be deemed to refer to such schedules as in effect at the time of such
issuance.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their respective corporate seals to be hereunto
affixed and attested, all as of the day and year above written.
FIDELITY DISTRIBUTORS CORPORATION
By_________________________________
ATTEST: Date: ____________________________
___________________________
Date: ____________________
STATE STREET BANK AND TRUST COMPANY
By_________________________________
ATTEST: Date: ____________________________
___________________________
Date: ____________________
EXHIBIT A
PLAN CERTIFICATE
EXHIBIT B
PLAN CERTIFICATE
EXHIBIT C
FORM OF CONFIRMATION
EXHIBIT D
FORM OF REMINDER NOTICE
EXHIBIT E
FORM OF PAST DUE PAYMENT NOTICE
EXHIBIT F
FORM OF REFUND NOTICE
EXHIBIT G
FORM OF TERMINATION NOTICE
SCHEDULE 1
FEES TO BE PAID TO FIDELITY DISTRIBUTORS CORPORATION BY THE CUSTODIAN
FROM PLANHOLDER FEE PROCEEDS
A. With respect to each Destiny Plan I and each Destiny Plan II for
which an account was established prior to the effective date of this
Agreement, fees paid to Fidelity Distributors Corporation by the
Custodian shall be such fees as specified in the Predecessor Custodian
Agreement in effect at the time that the account for such Destiny Plan
I or Destiny Plan II, as applicable, was established.
B. With respect to each Destiny Initial Plan I and each Destiny
Initial Plan II for which an account is established on or after the
effective date of this Agreement, fees paid to Fidelity Distributors
Corporation by the Custodian shall be the fees specified below:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Monthly Plan Fee for each of the First Fee for each Succeeding Fee for each Succeeding Payment
Payment 12 Plan Payments Payment under 10-Year Plan under 15-Year Plan and
Extended Investment Period
$ 50.00 $ 25.00 $ 1.80 $ 2.86
75.00 37.50 2.70 4.06
93.75 46.88 3.38 5.07
100.00 50.00 3.60 5.41
125.00 62.50 4.50 6.76
150.00 75.00 5.40 5.70
166.66 83.33 5.00 6.33
200.00 100.00 4.02 7.43
250.00 125.00 5.00 9.29
300.00 150.00 5.00 5.04
350.00 175.00 4.50 5.31
400.00 200.00 4.00 3.80
500.00 225.00 2.78 5.36
750.00 300.00 2.50 8.70
1,000.00 300.00 5.00 15.54
1,500.00 315.00 6.00 17.52
2,000.00 325.00 7.00 18.57
2,500.00 350.00 8.00 20.26
5,000.00 400.00 11.00 25.00
10,000.00 500.00 15.56 29.64
</TABLE>
C. With respect to each Destiny New Plan I and each Destiny New Plan
II for which an account is established on or after the effective date
of this Agreement, fees paid to Fidelity Distributors Corporation by
the Custodian shall be the fees specified below:
Monthly Plan Fee for each of the First 12 Fee for each Succeeding
Payment Plan Payments Payment under
10-Year Plan, 15-Year
Plan and
Extended Investment
Period
$ 50.00 $ 25.00 For all Plan sizes, a fee
75.00 37.50 assessed at an annual rate
100.00 50.00 of 0.25% of average monthly
125.00 62.50 net assets attributable to
150.00 75.00 the Plan
166.66 83.33
200.00 100.00
250.00 125.00
300.00 150.00
350.00 175.00
400.00 200.00
500.00 225.00
750.00 300.00
1,000.00 300.00
1,500.00 315.00
2,000.00 325.00
2,500.00 350.00
5,000.00 400.00
10,000.00 500.00
D. With respect to each Destiny Plan II-A for which an account was
established prior to the effective date of this Agreement, fees paid
to Fidelity Distributors Corporation by the Custodian shall be such
fees to be paid by the custodian to the plan sponsor as are specified
in the custodian agreement in effect for such plan at the time that
the account for such plan was established.
SCHEDULE 2
CUSTODIAN AND OTHER FEES AND CHARGES
Custodian Fee
A. With respect to each Destiny Plan I and each Destiny Plan II for
which an account was established prior to the effective date of this
Agreement, the Custodian Fee under each such Plan shall be such fees
as specified in the Predecessor Custodian Agreement in effect at the
time that the account for such Destiny Plan I or Destiny Plan II, as
applicable, was established.
B. With respect to each Destiny Initial Plan I, each Destiny New Plan
I, each Destiny Initial Plan II and each Destiny New Plan II for which
an account is established on or after the effective date of this
Agreement, the Custodian Fee shall be as specified below:
Monthly Fee for
Plan Each Plan
Payment Payment
$ 50.00 $ 1.10
75.00 1.25
93.75 1.50
100.00 1.50
125.00 1.50
150.00 1.50
166.66 1.50
200.00 1.50
250.00 1.50
300.00 1.50
350.00 1.50
400.00 1.50
500.00 1.50
750.00 1.50
1,000.00 1.50
1,500.00 1.50
2,000.00 1.50
2,500.00 1.50
5,000.00 1.50
10,000.00 1.50
For new accounts established on or after August 29, 1993 that use an
"automated" method of payment (I.E., PAC, ACH, or allotment), a "flat
fee" of $0.75 per payment will be paid to the Custodian. This flat
fee is available only with respect to new accounts established on or
after August 29, 1993 and will not be applied to any
previously-established accounts, unless otherwise directed by the
Sponsor and agreed upon by the Custodian.
1. In the event that a Planholder elects the Extended Investment
Option, the amount of the Custodian Service Fee to be charged for each
Plan payment during the extended period will be the same as the Fee
indicated in the above schedule for such Plan, provided that the
Custodian may increase its fee to the rate charged for new Plans of
the same denomination at the time of the first payment under the
Extended Investment Option, but not more than 75% in excess of the fee
set forth in the above schedule for each such Plan.
2. The Custodian Service Fee assessed on multiple payments will be
computed on the basis of one Custodian Service Fee for each payment
unit included in such multiple payment except that the Custodian
Service Fee may not exceed $5.00 for each multiple payment.
After the completion of all the Plan payments, or if payments have
been made in advance, after the end of 10 years from the date of
issuance of a 10-Year Plan and 15 years from the date of a 15-Year
Plan (and the Extended Investment Option is not exercised), or if
during any such period the Planholder shall have failed to make any
payment for a period of six months after the same has become due, the
Custodian shall receive in payment for its services an annual charge
at the rate of 2/10 of 1% of the face amount of the Plan, but not more
than $12.00 annually.
In the event that a Planholder has elected the Extended Investment
Option and has completed payments under said Option by either written
notice to the Custodian that he intends to stop all future payments or
by failure to make regularly scheduled investments for a period of six
consecutive months his Plan will be deemed a completed Plan. On such
Plans the Custodian shall receive an annual charge at the rate of 2/10
of 1% of the face amount of the Plan but not more than $12.00
annually.
On such Plans the Custodian reserves the right to increase its fee
applicable during the remaining period of the Plan to the rate then
charged for new Plans of the same denomination, but not more than 75%
in excess of the annual rate of 2/10 of 1% of the face amount of the
Plan, limited to $12.00 annually.
C. With respect to each Destiny Plan II-A for which an account was
established prior to the effective date of this Agreement, Custodian
Fees shall be such custodian fees as are specified in the custodian
agreement in effect for such plan at the time that the account for
such plan was established.
Additional Fees and Charges
A. With respect to each Destiny Plan I and each Destiny Plan II for
which an account was established prior to the effective date of this
Agreement, the Additional Fees and Charges under each such Plan shall
be such additional fees and charges as are specified in the
Predecessor Custodian Agreement in effect at the time that the account
for such Destiny Plan I or Destiny Plan II, as applicable, was
established.
B. With respect to each Destiny Initial Plan I, each Destiny New Plan
I, each Destiny Initial Plan II and each Destiny New Plan II for which
an account is established on or after the effective date of this
Agreement, the Custodian Fee shall be as specified below:
1. From the Planholder's account or from the proceeds of the sale by
the Custodian, as agent for the Planholder, of Fund Shares, a charge
of $2.50, in addition to any transfer or other taxes, if such amounts
shall not have been paid directly to the Custodian by the Planholder
at the time of the transaction, in the case of (1) each transfer of
title, (2) each partial or complete withdrawal of Fund Shares, (3)
each change of Plan denomination, (4) each recording of an assignment,
(5) each redeposit of cash or Fund Shares withdrawn, (6) each payment
check returned unpaid, and (7) each distribution option change.
2. A charge of $3.00 per year in connection with the preparation of a
transcript of the Planholder's account.
3. A charge of $2.50 in connection with the issuance of any type of
Plan in exchange for a different type of Plan.
4. A charge of $1.00 per check for each monthly or quarterly payment
to a Planholder in connection with his participation in the Automatic
Withdrawal Program, as more fully described in the applicable Plan
Documents. With respect to any payment made after 120 investments
into the establishment of such Planholder's account, such charge may
be increased to the amount then charged for making such payments on
newly issued Plans, but in no event may such charge be increased more
than 75%.
5. A Service Charge deducted annually against the accounts of the
Planholders of Destiny Initial Plans I and Destiny Initial Plans II
and, for the Planholders of Destiny New Plans I and Destiny New Plans
II, against the New Class of Fidelity Destiny Portfolios: Destiny I
and Destiny II, respectively, first out of dividends and distributions
payable in respect thereof, and then, if necessary, from principal.
The annual Service Charge will be determined by dividing the total
administrative costs for a calendar year by the total number of Plans.
The annual Service Charge is intended to compensate the Custodian for
charges and expenses incurred in the performance of the functions
referred to in Sections 2(k) and 2(l) of the Agreement, and also for
printing and/or mailing (including postage) the receipts, dividend
reinvestment notices, record forms and other forms used in connection
with the Plans, and reasonable counsel fees incurred by the Custodian
arising out of or in connection with the administration of the
custodianship hereunder (other than counsel fees and expenses incurred
by the Custodian in the defense of any claim occasioned by its own
negligence, bad faith or wilful misconduct) and also for the auditing,
not less often than annually, of the books of the Custodian relating
to the custodianship described in the Agreement by independent
certified public accountants selected by the Sponsor.
Notwithstanding the above, the annual Service Charge amount charged
to the account of a Planholder shall not in any fiscal year exceed any
maximum annual Service Charge amount specified in the Plan Documents
applicable to such Planholder's Plan. The Sponsor may, in its sole
discretion, waive the additional fees and charges listed in Paragraphs
B.1, B.2, B.3, B.4, and B.5 of this Schedule 2. In the event of such
waiver, the Sponsor shall pay the Custodian all such fees on behalf of
the Planholders and the Sponsor may, in its sole discretion and at any
time, determine to recommence imposition of such additional fees and
charges.
C. With respect to each Destiny Plan II-A for which an account was
established prior to the effective date of this Agreement, Custodian
Fees shall be such custodian fees as are specified in the custodian
agreement in effect for such plan at the time that the account for
such plan was established.
D. In addition to the Custodian fees set forth above, the Sponsor
will pay to the Custodian the following "communications" costs and
out-of-pocket expenses:
Communications Activity Fees
New Account Kits - $ 3.00 each
Telephone Calls - $ 3.00 each
Correspondence - $ 3.00 each
Out-of-Pocket Expenses
Out-of-Pocket expenses include but are not limited to: confirmation
production, postage, forms, telephone, microfilm, microfiche, and
expenses incurred at the specific direction of the Sponsor. Postage
for mass mailings is due seven days in advance of the mailing date.
Exhibit A(7)
Securities and Exchange Commission
Washington, DC 20549
To Whom It May Concern:
This letter will confirm that Federal Insurance Company has met the
requirements of Proviso (1) under Rule 27 (d-2) of the Investment
Company Act of 1940 on a monthly basis throughout our fiscal year in
connection with the undertaking executed on behalf of Fidelity
Distributors Corporation.
Very truly yours,
FEDERAL INSURANCE COMPANY
Gerardo G. Mauriz
Vice President
GGM/dms
