SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
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[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
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(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which
transaction applies:
(2) Aggregate number of securities to which
transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total Fee Paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a) (2)
and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of
its filing.
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(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
FIDELITY FIFTY
FIDELITY FUND
FUNDS OF
FIDELITY HASTINGS STREET TRUST
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-544-8888
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of the above funds:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
Meeting) of Fidelity Fifty and Fidelity Fund (the funds) will be held at
the office of Fidelity Hastings Street Trust (the trust), 82 Devonshire
Street, Boston, Massachusetts 02109 on July 16, 1997, at 9:45 a.m. The
purpose of the Meeting is to consider and act upon the following proposals,
and to transact such other business as may properly come before the Meeting
or any adjournments thereof.
1. To elect a Board of Trustees.
2. To ratify the selection of Coopers & Lybrand L.L.P. as independent
accountants of the trust.
3. To amend the Declaration of Trust to provide dollar-based voting
rights for shareholders of the trust.
4. To amend the Declaration of Trust regarding shareholder notification
of appointment of Trustees.
5. To amend the Declaration of Trust to provide each fund with the
ability to invest all of its assets in another open-end investment
company with substantially the same investment objective and policies.
6. To adopt a new fundamental investment policy for each fund permitting
each fund to invest all of its assets in another open-end investment
company with substantially the same investment objective and policies.
7. To approve an amended management contract for Fidelity Fifty.
8. To approve an amended management contract for Fidelity Fund.
9. To approve a new Sub-Advisory Agreement with FMR Far East for Fidelity
Fund.
10. To approve a new Sub-Advisory Agreement with FMR U.K. for Fidelity
Fund.
11. To amend Fidelity Fund's fundamental investment limitation concerning
real estate.
ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS
12. To amend Fidelity Fund's fundamental investment limitation concerning
diver- sification to permit increased investment in the securities of
any single issuer.
13. To amend Fidelity Fund's fundamental investment limitation concerning
diver- sification to exclude securities of other investment companies
from the li- mitation.
14. To eliminate Fidelity Fund's fundamental investment limitation
concerning short sales of securities.
15. To eliminate Fidelity Fund's fundamental investment limitation
concerning margin purchases.
16. To eliminate Fidelity Fund's fundamental investment limitation
concerning investments in other investment companies.
17. To eliminate Fidelity Fund's fundamental investment limitation
concerning investments in securities of newly-formed issuers.
18. To amend Fidelity Fund's fundamental investment limitation concerning
the is- suance of senior securities.
19. To amend Fidelity Fund's fundamental investment limitation concerning
bor- rowing.
20. To amend Fidelity Fund's fundamental investment limitation concerning
underwriting.
21. To amend Fidelity Fund's fundamental investment limitation concerning
the concentration of its investments in a single industry.
22. To amend Fidelity Fund's fundamental investment limitation concerning
lend- ing.
The Board of Trustees has fixed the close of business on May 19, 1997 as
the record date for the determination of the shareholders of each of the
funds entitled to notice of, and to vote at, such Meeting and any
adjournments thereof.
By order of the Board of Trustees,
ARTHUR S. LORING, Secretary
May 19, 1997
YOUR VOTE IS IMPORTANT -
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY SHAREHOLDER
WHO DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO INDICATE VOTING
INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND SIGN IT, AND RETURN IT IN
THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED
STATES. IN ORDER TO AVOID UNNECESSARY EXPENSE, WE ASK YOUR COOPERATION IN
MAILING YOUR PROXY CARD PROMPTLY, NO MATTER HOW LARGE OR SMALL YOUR
HOLDINGS MAY BE.
INSTRUCTIONS FOR EXECUTING PROXY CARD
The following general rules for executing proxy cards may be of assistance
to you and help avoid the time and expense involved in validating your vote
if you fail to execute your proxy card properly.
1. INDIVIDUAL ACCOUNTS: Your name should be signed exactly as it appears
in the registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.
3. ALL OTHER ACCOUNTS should show the capacity of the individual signing.
This can be shown either in the form of the account registration itself or
by the individual executing the proxy card. For example:
REGISTRATION VALID
SIGNATURE
A. 1) ABC Corp. John Smith,
Treasurer
2) ABC Corp. John Smith,
Treasurer
c/o John Smith, Treasurer
B. 1) ABC Corp. Profit Sharing Plan Ann B. Collins,
Trustee
2) ABC Trust Ann B. Collins,
Trustee
3) Ann B. Collins, Trustee Ann B. Collins,
Trustee
u/t/d 12/28/78
C. 1) Anthony B. Craft, Cust. Anthony B. Craft
f/b/o Anthony B. Craft, Jr.
UGMA
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS OF
FIDELITY HASTINGS STREET TRUST:
FIDEITY FIFTY
FIDELITY FUND
TO BE HELD ON JULY 16, 1997
This Proxy Statement is furnished in connection with a solicitation of
proxies made by, and on behalf of, the Board of Trustees of Fidelity
Hastings Street Trust (the trust) to be used at the Special Meeting of
Shareholders of Fidelity Fifty and Fidelity Fund (the funds) and at any
adjournments thereof (the Meeting), to be held on July 16, 1997 at 9:45
a.m. at 82 Devonshire Street, Boston, Massachusetts 02109, the principal
executive office of the trust and Fidelity Management & Research Company
(FMR), the funds' investment adviser.
The purpose of the Meeting is set forth in the accompanying Notice. The
solicitation is made primarily by the mailing of this Proxy Statement and
the accompanying proxy card on or about May 19, 1997. Supplementary
solicitations may be made by mail, telephone, telegraph, facsimile, or by
personal interview by representatives of the trust. In addition, D.F. King
& Co. may be paid _____ to solicit shareholders on behalf of the funds at
an anticipated cost of approximately $______(Fidelity Fifty), and $____
(Fidelity Fund), respectively. The expenses in connection with preparing
this Proxy Statement and its enclosures and of all solicitations will be
paid by the funds. The funds will reimburse brokerage firms and others for
their reasonable expenses in forwarding solicitation material to the
beneficial owners of shares. The principal business address of Fidelity
Distributors Corporation (FDC), the funds' principal underwriter and
distribution agent, and Fidelity Management & Research (U.K.) Inc. (FMR
U.K.) and Fidelity Management & Research (Far East) Inc. (FMR Far East),
subadvisers to the funds, is 82 Devonshire Street, Boston, Massachusetts
02109.
If the enclosed proxy card is executed and returned, it may nevertheless
be revoked at any time prior to its use by written notification received by
the trust, by the execution of a later-dated proxy card, or by attending
the Meeting and voting in person.
All proxy cards solicited by the Board of Trustees that are properly
executed and received by the Secretary prior to the Meeting, and which are
not revoked, will be voted at the Meeting. Shares represented by such
proxies will be voted in accordance with the instructions thereon. If no
specification is made on a proxy card, it will be voted FOR the matters
specified on the proxy card. Only proxies that are voted will be counted
towards establishing a quorum. Broker non-votes are not considered voted
for this purpose. Shareholders should note that while votes to ABSTAIN will
count toward establishing a quorum, passage of any proposal being
considered at the Meeting will occur only if a sufficient number of votes
are cast FOR the proposal. Accordingly, votes to ABSTAIN and votes AGAINST
will have the same effect in determining whether the proposal is approved.
The funds may also arrange to have votes recorded by telephone. D.F. King
& Co. may be paid on a per call basis for vote-by-phone solicitations on
behalf of the funds at an anticipated cost of approximately $_______
(Fidelity Fifty) and $______ (Fidelity Fund). The expenses in connection
with telephone voting will be paid by the funds. If the funds record votes
by telephone, they will use procedures designed to authenticate
shareholders' identities, to allow shareholders to authorize the voting of
their shares in accordance with their instructions, and to confirm that
their instructions have been properly recorded. Proxies voted by telephone
may be revoked at any time before they are voted in the same manner that
proxies voted by mail may be revoked.
If a quorum is present at the Meeting, but sufficient votes to approve one
or more of the proposed items are not received, or if other matters arise
requiring shareholder attention, the persons named as proxies may propose
one or more adjournments of the Meeting to permit further solicitation of
proxies. Any such adjournment will require the affirmative vote of a
majority of those shares present at the Meeting or represented by proxy.
When voting on a proposed adjournment, the persons named as proxies will
vote FOR the proposed adjournment all shares that they are entitled to vote
with respect to each item, unless directed to vote AGAINST the item, in
which case such shares will be voted AGAINST the proposed adjournment with
respect to that item. A shareholder vote may be taken on one or more of the
items in this Proxy Statement prior to such adjournment if sufficient votes
have been received and it is otherwise appropriate.
Shares of each fund of the trust issued and outstanding as of March 31,
1997 are indicated in the following table:
Fidelity Fifty Fidelity Fund
Shareholders of record at the close of business on May 19, 1997 will be
entitled to vote at the Meeting. Each such shareholder will be entitled to
one vote for each share held on that date.
FOR A FREE COPY OF EACH FUND'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED
JUNE 30, 1996 AND THE SEMIANNUAL REPORT FOR THE FISCAL PERIOD ENDED
DECEMBER 31, 1996 CALL 1-800-544-8888 OR WRITE TO FIDELITY DISTRIBUTORS
CORPORATION AT 82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109.
VOTE REQUIRED: A PLURALITY OF ALL VOTES CAST AT THE MEETING IS SUFFICIENT
TO APPROVE PROPOSALS 1 AND 2. APPROVAL OF PROPOSAL 3 REQUIRES THE
AFFIRMATIVE VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES" OF
BOTH THE TRUST AND OF EACH FUND OF THE TRUST AND, IN THE CASE OF PROPOSALS
4 AND 5 A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES" OF THE ENTIRE
TRUST. APPROVAL OF PROPOSALS 6 THROUGH 22 REQUIRES THE AFFIRMATIVE VOTE OF
A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES" OF THE APPROPRIATE FUNDS.
UNDER THE INVESTMENT COMPANY ACT OF 1940 (THE 1940 ACT), THE VOTE OF A
"MAJORITY OF THE OUTSTANDING VOTING SECURITIES" MEANS THE AFFIRMATIVE VOTE
OF THE LESSER OF (A) 67% OR MORE OF THE VOTING SECURITIES PRESENT AT THE
MEETING OR REPRESENTED BY PROXY IF THE HOLDERS OF MORE THAN 50% OF THE
OUTSTANDING VOTING SECURITIES ARE PRESENT OR REPRESENTED BY PROXY OR (B)
MORE THAN 50% OF THE OUTSTANDING VOTING SECURITIES. BROKER NON-VOTES ARE
NOT CONSIDERED "PRESENT" FOR THIS PURPOSE.
The following tables summarize the proposals applicable to each fund.
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Proposal # Proposal Description Applicable Funds
1. To elect as Trustees the 12 Fidelity Fifty
nominees presented. Fidelity Fund
2. To ratify the selection of Fidelity Fifty
Coopers & Lybrand L.L.P. as Fidelity Fund
independent accountants of
the trust.
3. To amend the Declaration of Fidelity Fifty
Trust to provide voting rights Fidelity Fund
based on a shareholder's
total dollar investment in a
fund, rather than on the
number of shares owned.
4. To amend the Declaration of Fidelity Fifty
Trust to eliminate the Fidelity Fund
requirement that
shareholders be notified
within three months in the
event of an appointment of a
trustee.
5. To amend the Declaration of Fidelity Fifty
Trust to clarify that the Fidelity Fund
Trustees may authorize the
investment of all of a fund's
assets in another open-end
investment company with
substantially the same
investment objective and
policies.
6. To adopt a new fundamental Fidelity Fifty
investment policy for the fund Fidelity Fund
that would permit it to invest
all of its assets in another
open-end investment
company managed by FMR
or an affiliate with
substantially the same
investment objective and
policies.
7. To approve an amended Fidelity Fifty
management contract for the
fund that would reduce the
management fee payable to
FMR by the fund as FMR's
assets under management
increase and would modify
the performance adjustment
calculation to calculate the
fund's investment
performance and that of its
comparative index to the
nearest .01%.
8. To approve an amended Fidelity Fund
management contract for the
fund that would reduce the
management fee payable to
FMR by the fund as FMR's
assets under management
increase.
9. To approve a new Fidelity Fund
sub-advisory agreement with
FMR Far East to provide
investment advice and
research services or
investment management
services.
10. To approve a new Fidelity Fund
sub-advisory agreement with
FMR U.K. to provide
investment advice and
research services or
investment management
services.
11. REAL ESTATE: To make explicit Fidelity Fund
the ability of the fund to
purchase any security or
instrument backed by real
estate or real estate interests
and any security of
companies engaged in the
real estate business.
ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS
12. DIVERSIFICATION: To replace Fidelity Fund
the fund's fundamental
investment limitation
concerning diversification
with a fundamental
diversification limitation
permitting increased
investment in the securities
of any single issuer.
13. DIVERSIFICATION: To amend Fidelity Fund
the diversification limitation to
exclude "securities of other
investment companies" from
issuer diversification limits.
14. SHORT SALES: To eliminate Fidelity Fund
the fundamental investment
limitation on short sales and
adopt a similar
non-fundamental investment
limitation.
15. MARGIN PURCHASES: To Fidelity Fund
eliminate the fundamental
investment limitation on
margin purchases and adopt
a similar non-fundamental
investment limitation.
16. OTHER INVESTMENT Fidelity Fund
COMPANIES: To eliminate the
fundamental investment
limitation restricting
ownership of other
investment companies.
17. NEWLY-FORMED ISSUERS: To Fidelity Fund
eliminate the fundamental
investment limitation
restricting ownership of
newly-formed issuers.
18. SENIOR SECURITIES: To add Fidelity Fund
the ability to issue senior
securities to the extent
permitted under the
Investment Company Act of
1940.
19. BORROWING: To amend the Fidelity Fund
borrowing limitation to require
a reduction in borrowing if
borrowings exceed the 33
1/3% limit for any reason
rather than solely because of
a decline in net assets.
20. UNDERWRITING: To clarify the Fidelity Fund
fundamental policy with
respect to underwriting.
21. CONCENTRATION: To Fidelity Fund
standardize the language of
the limitation on industry
concentration and modify it to
refer to "companies with
principal business activities in
the same industry" rather
than "companies in any one
industry."
22. LENDING: To clarify that the Fidelity Fund
fund can purchase an entire
issue of debt securities and
to eliminate the reference to
"portfolio securities" in the
exception for repurchase
agreements.
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1. TO ELECT A BOARD OF TRUSTEES.
The purpose of this proposal is to elect a Board of Trustees of the Trust.
Pursuant to the provisions of the Declaration of Trust of Fidelity Hastings
Street Trust, the Trustees have determined that the number of Trustees
shall be fixed at twelve. It is intended that the enclosed proxy card will
be voted for the election as Trustees of the twelve nominees listed below,
unless such authority has been withheld in the proxy card.
Except for Robert M. Gates and William O. McCoy, all nominees named below
are currently Trustees of Fidelity Hastings Street Trust and have served in
that capacity continuously since originally elected or appointed. Ralph F.
Cox, Phyllis Burke Davis, and Marvin L. Mann were selected by the trust's
Nominating and Administration Committee (see page 14) and were appointed to
the Board in November 1991, December 1992, and October 1993, respectively.
None of the nominees is related to one another. Those nominees indicated by
an asterisk (*) are "interested persons" of the trust by virtue of, among
other things, their affiliation with either the trust, the funds'
investment adviser (FMR, or the Adviser), or the funds' distribution agent,
FDC. The business address of each nominee who is an "interested person" is
82 Devonshire Street, Boston, Massachusetts 02109, and the business address
of all other nominees is Fidelity Investments, P.O. Box 9235, Boston,
Massachusetts 02205-9235. Except for Robert M. Gates, Peter S. Lynch, and
William O. McCoy, each of the nominees is currently a Trustee or General
Partner, as the case may be, of ___ other funds advised by FMR. Mr. Lynch
is currently a Trustee or General Partner, as the case may be, of ___ other
funds advised by FMR or an affiliate. Messrs. Gates and McCoy are currently
Trustees or General Partners, as the case may be, of ___ other funds
advised by FMR or an affiliate.
In the election of Trustees, those twelve nominees receiving the highest
number of votes cast at the Meeting, providing a quorum is present, shall
be elected.
Nominee Principal Occupation ** Year of
(Age) Election or
Appointmen
t
*J. Gary Burkhead Senior Vice President, is 1986
President of FMR; and President
and a Director of FMR Texas
(56) Inc., Fidelity Management &
Research (U.K.) Inc., and
Fidelity Management &
Research (Far East) Inc.
Ralph F. Cox Management consultant (1994). 1991
Prior to February 1994, he was
President of Greenhill Petroleum
(65) Corporation (petroleum
exploration and production).
Until March 1990, Mr. Cox was
President and Chief Operating
Officer of Union Pacific
Resources Company
(exploration and production). He
is a Director of Sanifill
Corporation (non-hazardous
waste, 1993), CH2M Hill
Companies (engineering), Rio
Grande, Inc. (oil and gas
production), and Daniel
Industries (petroleum
measurement equipment
manufacturer). In addition, he is
a member of advisory boards of
Texas A&M University and the
University of Texas at Austin.
Phyllis Burke Davis Prior to her retirement in 1992
September 1991, Mrs. Davis
was the Senior Vice President of
(65) Corporate Affairs of Avon
Products, Inc. She is currently a
Director of BellSouth
Corporation
(telecommunications), Eaton
Corporation (manufacturing),
and the TJX Companies, Inc.
(retail stores), and previously
served as a Director of Hallmark
Cards, Inc. (1985-1991) and
Nabisco Brands, Inc. In addition,
she is a member of the
President's Advisory Council of
The University of Vermont
School of Business
Administration.
Robert M. Gates Consultant, author, and lecturer ____
(1993). Mr. Gates was Director
of the Central Intelligence
(53) Agency (CIA) from 1991-1993.
From 1989 to 1991, Mr. Gates
served as Assistant to the
President of the United States
and Deputy National Security
Advisor. Mr. Gates is currently a
Trustee for the Forum For
International Policy, a Board
Member for the Virginia
Neurological Institute, and a
Senior Advisor of the Harvard
Journal of World Affairs. In
addition, Mr. Gates also serves
as a member of the corporate
board for LucasVarity PLC
(automotive components and
diesel engines), Charles Stark
Draper Laboratory (non-profit),
NACCO Industries, Inc. (mining
and manufacturing), and TRW
Inc. (original equipment and
replacement products).
*Edward C. Johnson President, is Chairman, Chief 1968
3d Executive Officer and a Director
of FMR Corp.; a Director and
Chairman of the Board and of
(67) the Executive Committee of
FMR; Chairman and a Director
of FMR Texas Inc., Fidelity
Management & Research (U.K.)
Inc., and Fidelity Management &
Research (Far East) Inc.
E. Bradley Jones Prior to his retirement in 1984, 1990
Mr. Jones was Chairman and
Chief Executive Officer of LTV
(69) Steel Company. He is a Director
of TRW Inc. (original equipment
and replacement products),
Cleveland-Cliffs Inc (mining),
Consolidated Rail Corporation,
Birmingham Steel Corporation,
and RPM, Inc. (manufacturer of
chemical products), and he
previously served as a Director
of NACCO Industries, Inc.
(mining and marketing,
1985-1995) and Hyster-Yale
Materials Handling, Inc.
(1985-1995). In addition, he
serves as a Trustee of First
Union Real Estate Investments,
a Trustee and member of the
Executive Committee of the
Cleveland Clinic Foundation, a
Trustee and member of the
Executive Committee of
University School (Cleveland),
and a Trustee of Cleveland
Clinic Florida.
Donald J. Kirk Executive-in-Residence (1995) 1987
at Columbia University Graduate
School of Business and a
financial consultant. From 1987
(64) to January 1995, Mr. Kirk was a
Professor at Columbia University
Graduate School of Business.
Prior to 1987, he was Chairman
of the Financial Accounting
Standards Board. Mr. Kirk is a
Director of General Re
Corporation (reinsurance), and
he previously served as a
Director of Valuation Research
Corp. (appraisals and
valuations, 1993-1995). In
addition, he serves as Chairman
of the Board of Directors of the
National Arts Stabilization Fund,
Chairman of the Board of
Trustees of the Greenwich
Hospital Association, a Member
of the Public Oversight Board of
the American Institute of
Certified Public Accountants'
SEC Practice Section (1995),
and as a Public Governor of the
National Association of
Securities Dealers, Inc. (1996).
*Peter S. Lynch Vice Chairman and Director of 1990
FMR (1992). Prior to May 31,
1990, he was a Director of FMR
(54) and Executive Vice President of
FMR (a position he held until
March 31, 1991); Vice President
of Fidelity Magellan Fund and
FMR Growth Group Leader; and
Managing Director of FMR Corp.
Mr. Lynch was also Vice
President of Fidelity Investments
Corporate Services (1991-1992).
He is a Director of W.R. Grace &
Co. (chemicals) and Morrison
Knudsen Corporation
(engineering and construction).
In addition, he serves as a
Trustee of Boston College,
Massachusetts Eye & Ear
Infirmary, Historic Deerfield and
Society for the Preservation of
New England Antiquities, and as
an Overseer of the Museum of
Fine Arts of Boston.
William O. McCoy Vice President of Finance for the ____
University of North Carolina
(16-school system, 1995). Prior to
(63) his retirement in December 1994,
Mr. McCoy was Vice Chairman of
the Board of BellSouth
Corporation (telecommunications)
and President of BellSouth
Enterprises. He is currently a
Director of Liberty Corporation
(holding company), Weeks
Corporation of Atlanta (real
estate, 1994), and Carolina
Power and Light Company
(electric utility, 1996). Previously,
he was a Director of First
American Corporation (bank
holding company, 1979-1996). In
addition, Mr. McCoy serves as a
member of the Board of Visitors
for the University of North
Carolina at Chapel Hill (1994) and
for the Kenan Flager Business
School (University of North
Carolina at Chapel Hill).
Gerald C. McDonough Chairman of G.M. Management 1989
Group (strategic advisory
services). Prior to his retirement
(69) in July 1988, he was Chairman
and Chief Executive Officer of
Leaseway Transportation Corp.
(physical distribution services).
Mr. McDonough is a Director of
Brush-Wellman Inc. (metal
refining), York International
Corp. (air conditioning and
refrigeration), Commercial
Intertech Corp. (hydraulic
systems, building systems, and
metal products, 1992), CUNO,
Inc. (liquid and gas filtration
products, 1996), and Associated
Estates Realty Corporation (a
real estate investment trust,
1993). Mr. McDonough served
as a Director of
ACME-Cleveland Corp. (metal
working, telecommunications,
and electronic products) from
1987-1996.
Marvin L. Mann Chairman of the Board, 1993
President, and Chief Executive
Officer of Lexmark International,
(64) Inc. (office machines). Prior to
1991, he held the positions of
Vice President of International
Business Machines Corporation
("IBM") and President and
General Manager of various IBM
divisions and subsidiaries. Mr.
Mann is a Director of M.A.
Hanna Company (chemicals,
1993) and Infomart (marketing
services), a Trammell Crow Co.
In addition, he serves as the
Campaign Vice Chairman of the
Tri-State United Way (1993) and
is a member of the University of
Alabama President's Cabinet.
Thomas R. Williams President of The Wales Group, 1989
Inc. (management and financial
advisory services). Prior to
retiring in 1987, Mr. Williams
(68) served as Chairman of the
Board of First Wachovia
Corporation (bank holding
company), and Chairman and
Chief Executive Officer of The
First National Bank of Atlanta
and First Atlanta Corporation
(bank holding company). He is
currently a Director of BellSouth
Corporation
(telecommunications), ConAgra,
Inc. (agricultural products),
Fisher Business Systems, Inc.
(computer software), Georgia
Power Company (electric utility),
Gerber Alley & Associates, Inc.
(computer software), National
Life Insurance Company of
Vermont, American Software,
Inc., and AppleSouth, Inc.
(restaurants, 1992).
__________________
** Except as otherwise indicated, each individual has held the office shown
or other offices in the same company for the last five years.
As of April 30, 1997, the nominees and officers of the trust owned, in the
aggregate, ______% of each fund's shares.
If elected, the Trustees will hold office without limit in time except
that (a) any Trustee may resign; (b) any Trustee may be removed by written
instrument, signed by at least two-thirds of the number of Trustees prior
to such removal; (c) any Trustee who requests to be retired or who has
become incapacitated by illness or injury may be retired by written
instrument signed by a majority of the other Trustees; and (d) a Trustee
may be removed at any Special Meeting of shareholders by a two-thirds vote
of the outstanding voting securities of the trust. In case a vacancy shall
for any reason exist, the remaining Trustees will fill such vacancy by
appointing another Trustee, so long as, immediately after such appointment,
at least two-thirds of the Trustees have been elected by shareholders. If,
at any time, less than a majority of the Trustees holding office has been
elected by the shareholders, the Trustees then in office will promptly call
a shareholders' meeting for the purpose of electing a Board of Trustees.
Otherwise, there will normally be no meeting of shareholders for the
purpose of electing Trustees.
The trust's Board, which is currently composed of three interested and
seven non-interested Trustees, met eleven times during the twelve months
ended June 30, 1996. It is expected that the Trustees will meet at least
ten times a year at regularly scheduled meetings.
The trust's Audit Committee is composed entirely of Trustees who are not
interested persons of the trust, FMR or its affiliates and normally meets
four times a year, or as required, prior to meetings of the Board of
Trustees. Currently, Mr. Kirk (Chairman), and Mrs. Davis are members of the
Committee. If elected, it is anticipated that Mr. McCoy will also be a
member of the Committee. This Committee oversees and monitors the financial
reporting process, including recommending to the Board the independent
accountants to be selected for the trust, reviewing internal controls and
the auditing function (both internal and external), reviewing the
qualifications of key personnel performing audit work, and overseeing
compliance procedures. During the twelve months ended June 30, 1996, the
Committee held four meetings.
The trust's Nominating and Administration Committee is currently composed
of Messrs. McDonough (Chairman), Jones, and Williams. The Committee members
confer periodically and hold meetings as required. The Committee is charged
with the duties of reviewing the composition and compensation of the Board
of Trustees, proposing additional non-interested Trustees, monitoring the
performance of legal counsel employed by the funds and the non-interested
Trustees, and acting as the administrative committee under the Retirement
Plan for non-interested Trustees. During the twelve months ended June 30,
1996, the Committee held six meetings. The Nominating and Administration
Committee will consider nominees recommended by shareholders.
Recommendations should be submitted to the Committee in care of the
Secretary of the Trust. The trust does not have a compensation committee;
such matters are considered by the Nominating and Administration Committee.
The following table sets forth information describing the compensation of
each Trustee of each fund for his or her services for the fiscal year ended
June 30, 1997.
COMPENSATION TABLE
Trustees Aggregate Aggregate Total
Compensation Compensation Compensation
from from from the
Fidelity Fifty Fidelity Fund Fund Complex*
[B,]C,+ [B,]D,+ A
J. Gary $ $ $ 0
Burkhead **
Ralph F. Cox $ $ 137,700
Phyllis Burke $ $ 134,700
Davis
Richard J. $ $ 168,000
Flynn***
Robert M. $ $ 0
Gates ****
Edward C. $ $ 0
Johnson 3d **
E. Bradley $ $ 134,700
Jones
Donald J. $ $ 136,200
Kirk
Peter S. Lynch $ $ 0
**
William O. $ $ 85,333
McCoy*****
Gerald C. $ $ 136,200
McDonough
Edward H. $ $ 136,200
Malone***
Marvin L. $ $ 134,700
Mann
Thomas R. $ $ 136,200
Williams
* Information is as of December 31, 1996 for 235 funds in the complex.
** Interested Trustees of the fund are compensated by FMR.
*** Richard J. Flynn and Edward H. Malone served on the Board of Trustees
through December 31, 1996.
**** Mr. Gates was appointed to the Board of Trustees of Fidelity Hastings
Street Trust effective March 1, 1997.
***** During the period from May 1, 1996 through December 31, 1996, William
O. McCoy served as a Member of the Advisory Board of the trust.
+ Estimated
[A Compensation figures include cash, a pro rata portion of benefits
accrued under the retirement program for the period ended December 30, 1996
and required to be deferred, and may include amounts deferred at the
election of Trustees.]
B Compensation figures include cash, amounts required to be deferred, a pro
rata portion of benefits accrued under the retirement program for the
period ended December 30, 1996 and required to be deferred, and may include
amounts deferred at the election of Trustees.
C The following amounts are required to be deferred by each non-interested
Trustee, most of which is subject to vesting: Ralph F. Cox, $__, Phyllis
Burke Davis, $__, Richard J. Flynn, $0, Robert M. Gates, $__, E. Bradley
Jones, $__, Donald J. Kirk, $__, William O. McCoy, $__, Gerald C.
McDonough, $__, Edward H. Malone, $__, Marvin L. Mann, $__, and Thomas R.
Williams, $__.
F For the fiscal year ended June 30, 1997, certain of the non-interested
Trustees' aggregate compensation from a fund includes accrued voluntary
deferred compensation as follows: _____________.
Under a retirement program adopted in July 1988 and modified in November
1995 and November 1996, each non-interested Trustee who retired before
December 30, 1996 may receive payments from a Fidelity fund during his or
her lifetime based on his or her basic trustee fees and length of service.
The obligation of a fund to make such payments is neither secured nor
funded. A Trustee became eligible to participate in the program at the end
of the calendar year in which he or she reached age 72, provided that, at
the time of retirement, he or she had served as a Fidelity fund Trustee for
at least five years.
The non-interested Trustees may elect to defer receipt of all or a
percentage of their annual fees in accordance with the terms of a Deferred
Compensation Plan (the Plan). Under the Plan, compensation deferred by a
Trustee is periodically adjusted as though an equivalent amount had been
invested and reinvested in shares of one or more funds in the complex
designated by such Trustee (designated securities). The amount paid to the
Trustee under the Plan will be determined based upon the performance of
such investments. Deferral of fees in accordance with the Plan will have a
negligible effect on the fund's assets, liabilities, and net income per
share, and will not obligate the funds to retain the services of any
Trustee or to pay any particular level of compensation to the Trustee. The
funds may invest in such designated securities under the Plan without
shareholder approval.
As of December 30, 1996, the non-interested Trustees terminated the
retirement program for Trustees who retire after such date. In connection
with the termination of the retirement program, each existing
non-interested Trustee received a credit to his or her Plan account equal
to the present value of the estimated benefits that would have been payable
under the retirement program. The amounts credited to the non-interested
Trustees' Plan accounts are subject to vesting. The termination of the
retirement program and related crediting of estimated benefits to the
Trustees' Plan accounts did not result in a material cost to the funds.
2. TO RATIFY THE SELECTION OF COOPERS & LYBRAND L.L.P. AS INDEPENDENT
ACCOUNTANTS OF THE TRUST.
By a vote of the non-interested Trustees, the firm of Coopers & Lybrand
L.L.P has been selected as independent accountants for the trust to sign or
certify any financial statements of the trust required by any law or
regulation to be certified by an independent accountant and filed with the
Securities and Exchange Commission (SEC) or any state. Pursuant to the 1940
Act, such selection requires the ratification of shareholders. In addition,
as required by the 1940 Act, the vote of the Trustees is subject to the
right of the trust, by vote of a majority of its outstanding voting
securities at any meeting called for the purpose of voting on such action,
to terminate such employment without penalty. Coopers & Lybrand L.L.P. has
advised the trust that it has no direct or material indirect ownership
interest in the trust.
The independent accountants examine annual financial statements for the
funds and provide other audit and tax-related services. In recommending the
selection of the trust's accountants, the Audit Committee reviewed the
nature and scope of the services to be provided (including non-audit
services) and whether the performance of such services would affect the
accountants' independence. Representatives of Coopers & Lybrand L.L.P. are
not expected to be present at the Meeting, but have been given the
opportunity to make a statement if they so desire and will be available
should any matter arise requiring their presence.
3. TO AMEND THE DECLARATION OF TRUST TO PROVIDE DOLLAR-BASED VOTING RIGHTS
FOR SHAREHOLDERS OF THE TRUST.
The Board of Trustees has approved, and recommends that shareholders of
the trust approve a proposal to amend Article VIII, Section 1 of the
Declaration of Trust. The amendment would provide voting rights based on a
shareholder's total dollar interest in a fund (dollar-based voting), rather
than on the number of shares owned, for all shareholder votes for a fund.
As a result, voting power would be allocated in proportion to the value of
each shareholder's investment.
BACKGROUND. Fidelity Fifty and Fidelity Fund are funds of Fidelity
Hastings Street Trust, an open-end management investment company organized
as a Massachusetts business trust. Currently, there are two funds in the
trust. Shareholders of each fund vote separately on matters concerning
only that fund and vote on a trust-wide basis on matters that effect the
trust as a whole, such as electing trustees or amending the Declaration of
Trust. Currently, under the Declaration of Trust, each share is entitled
to one vote, regardless of the relative value of the shares of each fund in
the trust.
The original intent of the one-share, one-vote provision was to provide
equitable voting rights to all shareholders as required by the 1940 Act. In
the case where a trust has several series or funds, such as Fidelity
Hastings Street Trust, voting rights may have become disproportionate since
the net asset value per share (NAV) of the separate funds generally diverge
over time. The Staff of the Securities and Exchange Commission (SEC) has
issued a "no-action" letter permitting a trust to seek shareholder approval
of a dollar-based voting system. The proposed amendment will comply with
the conditions stated in the no-action letter.
REASON FOR PROPOSAL. If approved, the amendment would provide a more
equitable distribution of voting rights for certain votes than the
one-share, one-vote system currently in effect. The voting power of each
shareholder would be commensurate with the value of the shareholder's
dollar investment rather than with the number of shares held.
Under the current voting provisions, an investment in a fund with a lower
NAV may have significantly greater voting power than the same dollar amount
invested in a fund with a higher NAV. The table below shows each fund's
net asset value. To illustrate the potentially disproportionate calculation
of voting power currently in place, the table below shows a hypothetical
example of a trust with funds with fluctuating NAVs.
Fund Net Asset Value $1,000
as of March 31, investment in
1997 terms of shares
on March 31,
1997
Fidelity Fifty $
Fidelity Fund $
For example, Fidelity Fifty shareholders would have approximately ______%
greater voting power than Fidelity Fund shareholders because at current
NAVs, a $1,000 investment in Fidelity Fifty would equal ___ shares whereas
a $1,000 investment in Fidelity Fund would equal _____ shares. Accordingly,
a one share, one-vote system may provide certain shareholders with a
disproportionate ability to affect the vote relative to shareholders of
other funds in the trust. If dollar-based voting had been in effect, each
shareholder would have had 1,000 voting shares. Their voting power would be
proportionate to their economic interest, which FMR believes is a more
equitable result, and which is the result with respect to a typical
corporation where each voting share generally has an equal market price.
On matters requiring trust-wide votes where all funds are required to
vote, shareholders who own shares with a lower NAV than other funds in the
trust would be giving other shareholders in the trust more voting "power"
than they currently have. On matters affecting only one fund, only
shareholders of that fund vote on the issue In this instance, under both
the current Declaration of Trust and an amended Declaration of Trust, all
shareholders of the fund would have the same voting rights, since the NAV
is the same for all shares in a single fund.
AMENDMENT TO THE DECLARATION OF TRUST Article VIII, Section 1 sets forth
the method of calculating voting rights for all shareholder votes for the
trust. If approved, Article VIII, Section 1 will be amended as follows
(material to be added is ((underlined)) and material to be deleted is
[bracketed]):
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
Section 1. The Shareholders shall have power to vote... On any matter
submitted to a vote of the Shareholders, all shares shall be voted by
individual Series, except (i) when required by the 1940 Act, Shares shall
be voted in the aggregate and not by individual Series; and (ii) when the
Trustees have determined that the matter affects only the interests of one
or more Series, then only the Shareholders of such Series shall be entitled
to vote thereon. [Each whole Share shall be entitled to one vote as to any
matter on which it is entitled to vote, and each fractional share shall be
entitled to a proportionate fractional vote.] ((A Shareholder of each
Series shall be entitled to one vote for each dollar of net asset value
(number of Shares owned times net asset value per share) of such Series, on
any matter on which such Shareholder is entitled to vote and each
fractional dollar amount shall be entitled to a proportionate fractional
vote.))There shall be no cumulative voting in the election of Trustees.
Shares may be voted in person or by proxy. Until Shares are issued, the
Trustees may exercise all rights of Shareholders and may take any action
required or permitted by law, this Declaration of Trust or any Bylaws of
Trust to be taken by Shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the trust and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the amended Declaration of Trust
will become effective immediately. If the proposal is not approved by the
shareholders of the trust, the Declaration of Trust will remain unchanged.
4. TO AMEND THE DECLARATION OF TRUST REGARDING SHAREHOLDER NOTIFICATION OF
APPOINTMENT OF TRUSTEES.
The trust's Declaration of Trust provides that in the case of a vacancy on
the Board of Trustees, the remaining Trustees shall fill the vacancy by
appointing a person they, in their discretion, see fit, consistent with the
limitations of the 1940 Act. Section 16 of the 1940 Act states that a
vacancy may be filled by the Trustees, if after filling the vacancy, at
least two-thirds of the Trustees then holding office were elected by the
holders of the outstanding voting securities of the trust. It also states
that if at any time less than 50% of the Trustees were elected by
shareholders, a shareholder meeting must be called within 60 days for the
purposes of electing Trustees to fill the existing vacancies.
The Declaration of Trust currently requires that within three months of a
Trustee appointment, notification of such be mailed to each shareholder of
the trust. Trustees may appoint a Trustee in anticipation of a current
Trustee's retirement or resignation, or in the event of an increase in the
number of Trustees. The current Declaration of Trust also requires
shareholder notification within three months of such an appointment.
The Trustees recommend that shareholders of the trust vote to eliminate
the notification requirement from the trust's Declaration of Trust. The
language to be deleted from the Declaration of Trust is [bracketed].
ARTICLE IV
TRUSTEES
RESIGNATION AND APPOINTMENT OF TRUSTEES
Section 4. In case of the declination, death, resignation, retirement,
removal, incapacity, or inability of any of the Trustees, or in case a
vacancy shall, by reason of an increase in number, or for any other reason,
exist, the remaining Trustees shall fill such vacancy by appointing such
other person as they in their discretion shall see fit consistent with the
limitations under the Investment Company Act of 1940. Such appointment
shall be evidenced by a written instrument signed by a majority of the
Trustees in office or by recording in the records of the Trust, whereupon
the appointment shall take effect. [Within three months of such appointment
the Trustees shall cause notice of such appointment to be mailed to each
Shareholder at his address as recorded on the books of the Trust.] An
appointment of a Trustee may be made by the Trustees then in office [and
notice thereof mailed to Shareholders as aforesaid] in anticipation of a
vacancy to occur by reason of retirement, resignation or increase in number
of Trustees effective at a later date, provided that said appointment shall
become effective only at or after the effective date of said retirement,
resignation or increase in number of Trustees. As soon as any Trustee so
appointed shall have accepted this trust, the trust estate shall vest in
the new Trustee or Trustees, together with the continuing Trustees, without
any further act or conveyance, and he shall be deemed a Trustee hereunder.
The power of appointment is subject to the provisions of Section 16 (a) of
the 1940 Act.
Notifying a trust's shareholders in the event of an appointment of a
Trustee is not required by any federal or state law. Such notification to
all shareholders of a trust would be costly to the funds of the trust. If
the proposal is approved, shareholders will be notified of Trustee
appointments in the next financial report for the fund. Other than
eliminating the notification requirement, this proposal does not amend any
other aspect of Trustee resignation or appointment.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the trust and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the amended Declaration of Trust
will become effective immediately. If the proposal is not approved by the
shareholders of the trust, the Declaration of Trust will remain unchanged.
5. TO AMEND THE DECLARATION OF TRUST TO PROVIDE EACH FUND WITH THE ABILITY
TO INVEST ALL OF ITS ASSETS IN ANOTHER OPEN-END INVESTMENT COMPANY WITH
SUBSTANTIALLY THE SAME INVESTMENT OBJECTIVE AND POLICIES.
The Board of Trustees has approved, and recommends that shareholders of
the trust approve, a proposal to amend Article V, Section 1 of the
Declaration of Trust to clarify that the Trustees may authorize the
investment of all of a fund's assets in another open-end investment company
with substantially the same investment objective and policies ("Master
Feeder Fund Structure"). The purpose of a Master Feeder Fund Structure is
to achieve operational efficiencies by consolidating portfolio management
while maintaining different distribution and servicing structures. In order
to implement a Master Feeder Fund Structure, both the Declaration of Trust
and the funds' policies must permit the structure. Currently, each fund's
policies do not allow for such investments. Proposal 6 on page 22 seeks the
approval of each fund's shareholders to adopt a fundamental investment
policy to permit investment in another open-end investment company. This
proposal, which amends the Declaration of Trust, clarifies the Board's
ability to implement the Master Feeder Fund Structure if a fund's policies
permit it.
BACKGROUND. A number of mutual funds have developed so called
"master-feeder" fund structures under which several "feeder" funds invest
all of their assets in a single pooled investment, or "master" fund. For
example, an institutional equity fund with a high initial minimum
investment amount for large investors might pool its investments with an
equity fund with low minimums designed for retail investors. This structure
allows several Feeder Funds with substantially the same objective but
different distribution and servicing features to combine their investments
and manage them as one Master Fund instead of managing them separately. The
Feeder Funds combine their investments by investing all of their assets in
one Master Fund. (Each Feeder Fund invested in a single Master Fund retains
its own characteristics, but is able to achieve operational efficiencies by
investing together with the other Feeder Funds in the Master Feeder Fund
Structure.) The current Declaration of Trust does not specifically provide
the Trustees the ability to authorize the Master Feeder Fund Structure.
REASON FOR THE PROPOSAL. FMR and the Board of Trustees continually review
methods of structuring mutual funds to take maximum advantage of potential
efficiencies. While neither FMR nor the Trustees has determined that a fund
should invest in a Master Fund, the Trustees believe it could be in the
best interest of each fund to adopt such a structure at a future date. If
this proposal is approved, the Declaration of Trust amendment would provide
the Trustees with the power to authorize a fund to invest all of its assets
in a single open-end investment company. The Trustees will authorize such a
transaction only if a Master Feeder Fund Structure is permitted under the
fund's investment policies (see Proposal 6), if they determine that a
Master Feeder Fund Structure is in the best interest of a fund, and if,
upon advice of counsel, they determine that the investment will not have
material adverse tax consequences to each fund or its shareholders. The
Trustees will specifically consider the impact, if any, on fees paid by the
fund as a result of adopting a Master Feeder Fund Structure. Although the
current Declaration of Trust does not contain any explicit prohibition
against implementing a Master Feeder Fund Structure, the specific authority
is being sought in the event the Trustees deem it appropriate to adopt a
Master Feeder Fund Structure in the future.
AMENDMENT TO THE DECLARATION OF TRUST. If the proposal is approved,
Article V, Section 1 of the Declaration of Trust will be amended as
follows: (material to be added is ((underlined))):
"Subject to any applicable limitation in the Declaration of Trust or the
Bylaws of the Trust, the Trustees shall have the power and authority:
(((t) Notwithstanding any other provision hereof, to invest all of the
assets of any series in a single open-end investment company, including
investment by means of transfer of such assets in exchange for an interest
or interests in such investment company;"))
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the trust and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the amended Declaration of Trust
will become effective immediately. If the proposal is not approved by the
shareholders of the trust, the Declaration of Trust will remain unchanged.
6. TO ADOPT A NEW FUNDAMENTAL INVESTMENT POLICY FOR EACH FUND PERMITTING
EACH FUND TO INVEST ALL OF ITS ASSETS IN ANOTHER OPEN-END INVESTMENT
COMPANY WITH SUBSTANTIALLY THE SAME INVESTMENT OBJECTIVE AND POLICIES.
The Board of Trustees has approved, and recommends that shareholders of
each fund approve, the adoption of a new fundamental investment policy that
would permit each fund to invest all of its assets in another open-end
investment company with substantially the same investment objective and
policies ("Master Feeder Fund Structure"). The purpose of the Master Feeder
Fund Structure would be to achieve operational efficiencies by
consolidating portfolio management while maintaining different distribution
and servicing structures.
BACKGROUND. A number of mutual funds have developed so called
"master-feeder" fund structures under which several "feeder" funds invest
all of their assets in a single "master" fund. In order to implement a
Master Feeder Fund Structure, an amendment to the Declaration of Trust is
proposed, as is the adoption of a new fundamental investment policy.
Proposal (5) proposes to amend the Declaration of Trust to allow the
Trustees to authorize the conversion to a Master Feeder Fund Structure when
permitted by each fund's policies. This proposal would add a fundamental
policy for each fund that permits a Master Feeder Fund Structure.
REASON FOR THE PROPOSAL. FMR and the Board of Trustees continually review
methods of structuring mutual funds to take advantage of potential
efficiencies. While neither the Board nor FMR has determined that each fund
should invest in a Master Fund, the Trustees believe it could be in the
best interests of each fund to adopt such a structure at a future date.
At present, certain of each fund's fundamental investment policies and
limitations would prevent each fund from investing all of its assets in
another investment company, and would require a vote of shareholders before
such a structure could be adopted. To avoid the costs associated with a
subsequent shareholder meeting, the Trustees recommend that shareholders
vote to permit each fund's assets to be invested in a single Master Fund,
without a further vote of shareholders. The Trustees will authorize such an
investment only if they determine that action to be in the best interests
of each fund and its shareholders and if, upon advice of counsel, they
determine that the investment will not have material adverse consequences
to each fund. Approval of Proposal 5 provides the Trustees with explicit
authority to approve a Master Feeder Fund Structure. If shareholders
approve this proposal, certain fundamental and non-fundamental policies and
limitations of each fund that currently prohibit investment in shares of
one investment company would not apply to permit the investment in a Master
Fund managed by FMR or its affiliates or successor. These policies include
each fund's limitations on concentration and underwriting.
DISCUSSION. FMR may manage a number of mutual funds with similar
investment objectives, policies, and limitations but with different
features and services (Comparable Funds). Were these Comparable Funds to
pool their assets, operational efficiencies could be achieved, offering the
opportunity to reduce costs. Similarly, FMR anticipates that a Master
Feeder Fund Structure would facilitate the introduction of new Fidelity
mutual funds, increasing the investment options available to shareholders.
Each fund's method of operation and shareholder services would not be
materially affected by its investment in a Master Fund, except that the
assets of each fund would be managed as part of a larger pool. Were each
fund to invest all of its assets in a Master Fund, it would hold only a
single investment security, and the Master Fund would directly invest in
individual securities pursuant to its investment objective. The Master Fund
would be managed by FMR or an affiliate, such as FMR Texas, Inc. in the
case of a money market fund. The Trustees would retain the right to
withdraw each fund's investments from a Master Fund at any time and would
do so if the Master Fund's investment objective and policies were no longer
appropriate for each fund. Each fund would then resume investing directly
in individual securities as it does currently. Whenever a Feeder Fund is
asked to vote at a shareholder meeting of the Master Fund, the Feeder Fund
will hold a meeting of its shareholders if required by applicable law or
the Feeder Fund's policies to vote on the matters to be considered at the
Master Fund shareholder meeting. The fund will cast its votes at the Master
Fund meeting in the same proportion as the fund's shareholders voted at
their meeting.
At present, the Trustees have not considered any specific proposal to
authorize pooling of assets. The Trustees will authorize investing each
fund's assets in a Master Fund only if they determine that pooling is in
the best interests of each fund and if, upon advice of counsel, they
determine that the investment will not have material adverse tax
consequences to each fund or its shareholders. In determining whether to
invest in a Master Fund, the Trustees will consider, among other things,
the opportunity to reduce costs and to achieve operational efficiencies.
The Trustees will not authorize investment in a Master Fund if doing so
would materially increase costs (including fees) to shareholders.
FMR may benefit from the use of a Master Feeder Fund Structure if overall
assets under management are increased (since FMR's fees are based on
assets). Also, FMR's expenses of providing investment and other services to
each fund may be reduced. If a fund's investment in a Master Fund were to
reduce FMR's expenses materially, the Trustees would consider whether a
reduction in FMR's management fee would be appropriate if and when a Master
Feeder Fund Structure is implemented.
PROPOSED FUNDAMENTAL POLICY. To allow each fund to invest in a Master Fund
at a future date, the Trustees recommend that each fund adopt the following
fundamental policy:
"The fund may, notwithstanding any other fundamental investment policy or
limitation, invest all of its assets in the securities of a single open-end
management investment company managed by Fidelity Management & Research
Company or an affiliate or successor with substantially the same
fundamental investment objective, policies, and limitations as the fund."
If the proposal is adopted, the Trustees intend to adopt a non-fundamental
investment limitation for each fund which states:
"The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company managed by
Fidelity Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund."
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit each fund and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the fundamental limitation will
become effective immediately. If the proposal is not approved by the
shareholders of a fund, that fund's current fundamental investment policies
will remain unchanged with respect to potential investment in Master Funds.
7. TO APPROVE AN AMENDED MANAGEMENT CONTRACT FOR FIDELITY FIFTY.
The Trustees recommend that the shareholders of the fund approve
amendments to the fund's management contract with Fidelity Management &
Research Company (FMR) (the Amended Contract). The Amended Contract
modifies the management fee that FMR receives from the fund to provide for
lower fees when FMR's assets under management exceed certain levels. The
Amended Contract also modifies the performance adjustment calculation to
calculate the fund's investment performance and that of its comparative
Index (the Index) to the nearest .01%, rather than to the nearest percent.
In addition, the Amended Contract specifies that the fund's investment
performance and that of its Index are rounded prior to comparison. THE
AMENDED CONTRACT WILL RESULT IN A GROUP FEE THAT IS THE SAME AS, OR LOWER
THAN, THE FEE PAYABLE UNDER THE PRESENT MANAGEMENT CONTRACT (THE PRESENT
CONTRACT). THE MODIFICATIONS TO THE PERFORMANCE ADJUSTMENT CALCULATION WILL
NOT NECESSARILY INCREASE OR DECREASE THE PORTION OF THE FUND'S MANAGEMENT
FEE ATTRIBUTABLE TO THE PERFORMANCE ADJUSTMENT. For the performance period
ended June 30, 1996, the proposed change to the performance adjustment
calculation would have resulted in a 2.18% decrease in the performance
adjustment. (For information on FMR, see the section entitled "Activities
and Management of FMR" on page 51.)
PROPOSED AMENDMENTS TO THE PRESENT MANAGEMENT CONTRACT. A copy of the
Amended Contract, marked to indicate the proposed amendments, is supplied
as Exhibit 2 on page 65. Except for the modifications discussed above, it
is substantially identical to the Present Contract. (For a detailed
discussion of the fund's Present Contract, refer to the section entitled
"Present Management Contracts" beginning on page 52.) If approved by
shareholders, the Amended Contract will take effect on August 1, 1997 (or,
if later, the first day of the first month following approval) and will
remain in effect through July 31, 1998 and thereafter, but only as long as
its continuance is approved at least annually by (i) the vote, cast in
person at a meeting called for the purpose, of a majority of those Trustees
who are not "interested persons" of the trust or FMR (the Independent
Trustees) and (ii) the vote of either a majority of the Trustees or by the
vote of a majority of the outstanding shares of the fund. If the Amended
Contract is not approved, the Present Contract will continue in effect
through July 31, 1998, and thereafter only as long as its continuance is
approved at least annually by (i) the vote, cast in person at a meeting
called for the purpose, of a majority of the Independent Trustees and (ii)
the vote of either a majority of the Trustees or by the vote of a majority
of the outstanding shares of the fund.
The management fee is an annual percentage of the fund's average net
assets (the management fee rate), calculated and paid monthly. The
management fee rate is the sum of two components: a Basic Fee Rate and a
Performance Adjustment Rate. The Basic Fee Rate is the sum of a Group Fee
Rate, which varies according to assets under management by FMR, and a fixed
Individual Fund Fee Rate. The Amended Contract modifies the Group Fee Rate
by providing for lower fee rates if FMR's assets under management remain
above $174 billion. The sum of the Group Fee Rate and the Individual Fund
Fee Rate is referred to as the fund's Basic Fee Rate. One-twelfth (1/12) of
the Basic Fee Rate is applied to the fund's average net assets as
determined daily, resulting in a dollar amount which is the Basic Fee for
the month. The Performance Adjustment is added to or subtracted from the
Basic Fee depending on whether the fund experienced better or worse
performance than the Index. The Performance Adjustment consists of
one-twelfth (1/12) of the annual Performance Adjustment Rate as applied to
the fund's average net assets as determined daily. Under the Present
Contract, the Performance Adjustment Rate is calculated by multiplying .02%
by each percentage point that the fund's investment performance for the
performance period was better or worse than the Index. The investment
performance of the fund and the Index are calculated to the nearest
percentage point prior to comparison. Under the Amended Contract, the
fund's investment performance and the performance of the Index are
calculated to the nearest .01% prior to comparison.
MODIFICATION TO GROUP FEE RATE. The Group Fee Rate varies based upon the
monthly average of the aggregate net assets of all registered investment
companies having management contracts with FMR (assets under management by
FMR). For example, as assets under management by FMR increase, the Group
Fee Rate declines. The Amended Contract would not change the group fee
calculation for assets under management by FMR of $174 billion or less.
Above $174 billion in assets under FMR's management, the Group Fee Rate
declines under both the Present Contract and the Amended Contact, but under
the Amended Contract, it declines faster. Group Fee Rates that are lower
than those contained in the fund's Present Contract have been voluntarily
implemented by FMR on November 1, 1993, August 1, 1994, and January 1,
1996.
The Group Fee Rate is calculated according to a graduated schedule
providing for different rates for different levels of assets under
management by FMR. The rate at which the Group Fee Rate declines is
determined by fee "breakpoints" that provide for lower fee rates when
assets increase. The Amended Contract adds 10 new fee breakpoints for
assets under FMR's management above $174 billion as illustrated in the
following table. (For an explanation of how the Group Fee Rate is used to
calculate the management fee, see the section entitled "Present Management
Contracts" beginning on page 52.)
GROUP FEE RATE BREAKPOINTS
PRESENT CONTRACT AMENDED CONTRACT
Average Group Present Average Group Amended
Assets Contract* Assets Contract
($ billions) ($ billions)
Over 174 .3000% 174 - 210 .3000%
210 - 246 .2950%
246 - 282 .2900%
282 - 318 .2850%
318 - 354 .2800%
354 - 390 .2750%
390 - 426 .2700%
426 - 462 .2650%
462 - 498 .2600%
498 - 534 .2550%
Over 534 .2500%
The result at various levels of group net assets is illustrated by the
table below.
EFFECTIVE ANNUAL GROUP FEE RATES
Group Net Present Amended
Assets Contract* Contract
($ billions)
150 .3371% .3371%
200 .3284% .3284%
250 .3227% .3219%
300 .3190% .3163%
350 .3162% .3113%
400 .3142% .3067%
450 .3126% .3024%
500 .3114% .2982%
550 .3103% .2942%
* Does not reflect voluntary adoption of extended group fee rate schedules
by FMR on November 1, 1993, August 1, 1994, and January 1, 1996.
Assets under FMR's management for March 1997 were approximately $___
billion.
MODIFICATION TO PERFORMANCE ADJUSTMENT CALCULATION. Under the Present
Contract, the Performance Adjustment is applied in increments of .02%,
whereas under the Amended Contract, the Performance Adjustment is applied
in increments of .0002%. Under the Present Contract, the Performance
Adjustment Rate is calculated by multiplying .02% by each percentage point
that the fund's investment performance for the performance period was
better or worse than the performance of the Index. The Present Contract
states that the fund's investment performance and the Index be calculated
to the nearest percentage point. The Amended Contract provides for the
fund's investment performance and the performance of the Index to be
calculated to the nearest .01%, and specifically provides that the
performance of the fund and that of its Index be rounded prior to
comparison. Calculating the investment performance of the fund and the
Index to the nearest .01% rather than 1% and applying the adjustment in
.0002% increments rather than .02% increments will produce more precise
performance comparisons and, therefore, reduce the chances of minor changes
in performance resulting in significant changes to the Performance
Adjustment, and ultimately the fund's management fee.
COMPARISON OF MANAGEMENT FEES. For March 1997, average assets under
management by FMR were $___ billion. The fund's Basic Fee Rate under the
Amended Contract would have been __%, compared to __% under the Present
Contract. The Basic Fee Rate will remain the same under both the Present
Contract and the Amended Contract until assets under FMR's management
exceed $174 billion, at which point the Basic Fee Rate under the Amended
Contract begins to decline relative to the Present Contract. The following
chart compares the fund's management fee (including the performance
adjustment) under the terms of the Present Contract for the fiscal year
ended June 30, 1996 to the management fee the fund would have incurred if
the Amended Contract had been in effect.
Present Amended
Contract Contract
Management Management Percentage
Fee* Fee Difference
Basic Fee $ 993,073 $ 982,846 (1.03)%
Performance $ 12,092 $ 11,828 (2.18)%
Adjustment
Total $ 1,005,165 $ 994,674 (1.04)%
* Does not reflect voluntary adoption of extended group fee rate schedules
by FMR on November 1, 1993, August 1, 1994, and January 1, 1996.
While the management fee under the Amended Contact for the fiscal year
ended June 30, 1996 is lower as a result of the proposed changes to the
performance adjustment calculation, the proposed changes to the performance
adjustment calculation will not necessarily result in a higher or lower
management fee over time.
MATTERS CONSIDERED BY THE BOARD
The mutual funds for which the members of the Board of Trustees serve as
Trustees are referred to herein as the "Fidelity funds." The Board of
Trustees meets eleven times a year. The Board of Trustees, including the
Independent Trustees, believe that matters bearing on the appropriateness
of the fund's management fees are considered at most, if not all, of their
meetings. While the full Board of Trustees or the Independent Trustees, as
appropriate, act on all major matters, a significant portion of the
activities of the Board of Trustees (including certain of those described
herein) are conducted through committees. The Independent Trustees meet
frequently in executive session and are advised by independent legal
counsel selected by the Independent Trustees.
The Amended Contract was approved by the Board of Trustees of the fund,
including all of the Independent Trustees on October 9, 1996. The Board of
Trustees considered and approved the modifications to the Group Fee Rate
schedule during the two month periods from November to December 1995, June
to July 1994, and September to October 1993, and the modifications to the
Performance Adjustment calculation during the two month period from June to
July 1995. The Board of Trustees received materials relating to the Amended
Contract in advance of the meeting at which the Amended Contract was
considered, and had the opportunity to ask questions and request further
information in connection with such consideration.
INFORMATION RECEIVED BY THE INDEPENDENT TRUSTEES. In connection with their
monthly meetings Trustees receive materials specifically relating to the
Amended Contract. These materials include: (i) information on the
investment performance of the fund, a peer group of funds and an
appropriate index or combination of indices, (ii) sales and redemption data
in respect of the fund, (iii) the economic outlook and the general
investment outlook in the markets in which the fund invests, and (iv)
notable changes in the fund's investments. The Board of Trustees and the
Independent Trustees also consider periodically other material facts such
as (1) FMR's financial condition, (2) arrangements in respect of the
distribution of the fund's shares, (3) the procedures employed to determine
the value of the fund's assets, (4) the allocation of the fund's brokerage,
if any, including allocations to brokers affiliated with FMR and the use of
"soft" commission dollars to pay fund expenses and to pay for research and
other similar services, (5) FMR's management of the relationships with the
fund's custodian and subcustodians, and (6) the resources devoted to and
the record of compliance with the fund's investment policies and
restrictions and with policies on personal securities transactions.
In response to questions raised by the Independent Trustees, additional
information was furnished by FMR including, among other items, information
on and analysis of (a) the overall organization of FMR, (b) the impact of
performance adjustments to management fees, (c) the choice of performance
indices and benchmarks, (d) the composition of peer groups of funds, (e)
transfer agency and bookkeeping fees paid to affiliates of FMR, (f)
investment performance, (g) investment management staffing, (h) the
potential for achieving further economies of scale, (i) operating expenses
paid to third parties, and (j) the information furnished to investors,
including the fund's shareholders.
Matters considered by the Board of Trustees and the Independent Trustees
in connection with their approval of the Amended Contract include the
following:
INVESTMENT COMPLIANCE AND PERFORMANCE. The Board of Trustees and the
Independent Trustees considered whether the fund has operated within its
investment objective and its record of compliance with its investment
restrictions. They also reviewed monthly the fund's investment performance
as well as the performance of a peer group of mutual funds, and the
performance of an appropriate index or combination of indices.
FMR'S PERSONNEL AND METHODS. The Board of Trustees and the Independent
Trustees annually review a report detailing the background of the fund's
portfolio manager, and the fund's investment objective and discipline. The
Independent Trustees have also had discussions with senior management of
FMR responsible for investment operations, and the senior management of
Fidelity's equity group. Among other things they considered the size,
education and experience of FMR's investment staff, its use of technology,
and FMR's approach to recruiting, training and retaining portfolio managers
and other research, advisory and management personnel.
NATURE AND QUALITY OF OTHER SERVICES. The Board of Trustees and the
Independent Trustees considered the nature, quality, cost and extent of
administrative and shareholder services performed by FMR and affiliated
companies, both under the Amended Contract and under separate agreements
covering transfer agency functions and pricing, bookkeeping and securities
lending services, if any. The Board of Trustees and the Independent
Trustees have also considered the nature and extent of FMR's supervision of
third party service providers, principally custodians and subcustodians.
EXPENSES. The Board of Trustees and the Independent Trustees considered the
fund's expense ratio and expense ratios of a peer group of funds. They also
considered the amount and nature of fees paid by shareholders.
PROFITABILITY. The Board of Trustees and the Independent Trustees
considered the level of FMR's profits in respect of the management of the
Fidelity funds, including the fund. This consideration included an
extensive review of FMR's methodology in allocating its costs to the
management of the fund. The Board of Trustees and the Independent Trustees
have concluded that the cost allocation methodology employed by FMR has a
reasonable basis and is appropriate in light of all of the circumstances.
They considered the profits realized by FMR in connection with the
operation of the fund and whether the amount of profit is a fair
entrepreneurial profit for the management of the fund. They also considered
the profits realized from non-fund businesses which may benefit from or be
related to the fund's business. The Board of Trustees and the Independent
Trustees also considered FMR's profit margins in comparison with available
industry data, both accounting for and ignoring market expenses.
ECONOMIES OF SCALE. The Board of Trustees and the Independent Trustees
considered whether there have been economies of scale in respect of the
management of the Fidelity funds, whether the Fidelity funds (including the
fund) have appropriately benefitted from any economies of scale, and
whether there is potential for realization of any further economies of
scale. The Board of Trustees and the Independent Trustees have concluded
that FMR's mutual fund business presents some limited opportunities to
realize economies of scale and that these economies are being shared
between fund shareholders and FMR in an appropriate manner. The Independent
Trustees have also concluded that the existing group fee structure should
be continued but determined that it would be appropriate to change the
group fee structure as proposed herein.
OTHER BENEFITS TO FMR. The Board of Trustees and the Independent Trustees
also considered the character and amount of fees paid by the fund and the
fund's shareholders for services provided by FMR and its affiliates,
including fees for services like transfer agency, fund accounting and
direct shareholder services. They also considered the allocation of fund
brokerage to brokers affiliated with FMR and the receipt of sales loads and
payments under Rule 12b-1 plans in respect of certain of the Fidelity
funds. The Board of Trustees and the Independent Trustees also considered
the revenues and profitability of FMR businesses other than its mutual fund
business, including FMR's retail brokerage, correspondent brokerage,
capital markets, trust, investment advisory, pension record keeping, credit
card, insurance, publishing, real estate, international research and
investment funds, and others. The Board of Trustees and the Independent
Trustees considered the intangible benefits that accrue to FMR and its
affiliates by virtue of their relationship with the fund.
OTHER BENEFITS TO SHAREHOLDERS. The Board of Trustees and the Independent
Trustees considered the benefit to shareholders of investing in a fund that
is part of a large family of funds offering a variety of investment
disciplines and providing for a large variety of fund and shareholder
services.
CONCLUSION. In considering the Amended Contract, the Board of Trustees and
the Independent Trustees did not identify any single factor as
all-important or controlling, and the foregoing summary does not detail all
of the matters considered. Based on their evaluation of all material
factors and assisted by the advice of independent counsel, the Trustees
concluded (i) that the existing management fee structure is fair and
reasonable and (ii) that the proposed modifications to the management fee
rates, that is the reduction of the Group Fee Rate schedule and the
modifications to the performance adjustment calculation, are in the best
interest of the fund's shareholders. The Board of Trustees, including the
Independent Trustees, voted to approve the submission of the Amended
Contract to shareholders of the fund and recommends that shareholders of
the fund vote FOR the Amended Contract.
8. TO APPROVE AN AMENDED MANAGEMENT CONTRACT FOR FIDELITY FUND.
The Trustees recommend that the shareholders of the fund approve an
amendment to the fund's management contract with Fidelity Management &
Research Company (FMR) (the Amended Contract). The Amended Contract
modifies the management fee that FMR receives from the fund to provide for
lower fees when FMR's assets under management exceed certain levels. THE
AMENDED CONTRACT WILL RESULT IN A MANAGEMENT FEE THAT IS THE SAME AS, OR
LOWER THAN, THE FEE PAYABLE UNDER THE PRESENT MANAGEMENT CONTRACT (THE
PRESENT CONTRACT). (For information on FMR, see the section entitled
"Activities and Management of FMR" on page 51.)
PROPOSED AMENDMENT TO THE PRESENT MANAGEMENT CONTRACT. A copy of the
Amended Contract, marked to indicate the proposed amendment, is supplied as
Exhibit 1 on page 59. Except for the modifications discussed above, it is
substantially identical to the Present Contract. (For a detailed discussion
of the fund's Present Contract, refer to the section entitled "Present
Management Contract" beginning on page 52.) If approved by shareholders,
the Amended Contract will take effect on August 1, 1997 (or, if later, the
first day of the first month following approval) and will remain in effect
through July 31, 1998 and thereafter, but only as long as its continuance
is approved at least annually by (i) the vote, cast in person at a meeting
called for the purpose, of a majority of those Trustees who are not
"interested persons" of the trust or FMR (the Independent Trustees) and
(ii) the vote of either a majority of the Trustees or by the vote of a
majority of the outstanding shares of the fund. If the Amended Contract is
not approved, the Present Contract will continue in effect through July 31,
1998, and thereafter only as long as its continuance is approved at least
annually by (i) the vote, cast in person at a meeting called for the
purpose, of a majority of the Independent Trustees and (ii) the vote of
either a majority of the Trustees or by the vote of a majority of the
outstanding shares of the fund.
The management fee is an annual percentage of the fund's average net
assets (the management fee rate), calculated and paid monthly. The
management fee rate is the sum of two components: a Group Fee Rate, which
varies according to assets under management by FMR, and a fixed Individual
Fund Fee Rate. The Amended Contract modifies the Group Fee Rate by
providing for lower fee rates if FMR's assets under management remain above
$102 billion.
MODIFICATION TO GROUP FEE RATE. The Group Fee Rate varies based upon the
monthly average of the aggregate net assets of all registered investment
companies having management contracts with FMR (assets under management by
FMR). For example, as assets under management by FMR increase, the Group
Fee Rate declines. The Amended Contract would not change the group fee
calculation for assets under management by FMR of $102 billion or less.
Above $102 billion in assets under FMR's management, the Group Fee Rate
declines under both the Present Contract and the Amended Contact, but under
the Amended Contract, it declines faster. Group Fee Rates that are lower
than those contained in the fund's Present Contract have been voluntarily
implemented by FMR on January 1, 1992, November 1, 1993, August 1, 1994,
and January 1, 1996.
The Group Fee Rate is calculated according to a graduated schedule
providing for different rates for different levels of assets under
management by FMR. The rate at which the Group Fee Rate declines is
determined by fee "breakpoints" that provide for lower fee rates when
assets increase. The Amended Contract adds 12 new fee breakpoints for
assets under FMR's management above $102 billion as illustrated in the
following table. (For an explanation of how the Group Fee Rate is used to
calculate the management fee, see the section entitled "Present Management
Contracts" beginning on page 52.)
GROUP FEE RATE BREAKPOINTS
PRESENT CONTRACT AMENDED CONTRACT
Average Group Present Average Group Amended
Assets Contract* Assets Contract
($ billions) ($ billions)
Over 102 .3100% 102 - 138 .3100%
138 - 174 .3050%
174 - 210 .3000%
210 - 246 .2950%
246 - 282 .2900%
282 - 318 .2850%
318 - 354 .2800%
354 - 390 .2750%
390 - 426 .2700%
426 - 462 .2650%
462 - 498 .2600%
498 - 534 .2550%
Over 534 .2500%
The result at various levels of group net assets is illustrated by the
table below.
EFFECTIVE ANNUAL GROUP FEE RATES
Group Net Present Amended
Assets Contract* Contract
($ billions)
150 .3375% .3371%
200 .3306% .3284%
250 .3265% .3219%
300 .3238% .3163%
350 .3218% .3113%
400 .3203% .3067%
450 .3192% .3024%
500 .3183% .2982%
550 .3175% .2942%
* Does not reflect voluntary adoption of extended group fee rate schedules
by FMR on January 1, 1992, November 1, 1993, August 1, 1994, and January 1,
1996.
Assets under FMR's management for March 1997 were approximately $___
billion.
COMPARISON OF MANAGEMENT FEES. For March 1997, average assets under
management by FMR were $___ billion. The fund's management fee rate under
the Amended Contract would have been __%, compared to __% under the Present
Contract. The management fee rate will remain the same under both the
Present Contract and the Amended Contract until assets under FMR's
management exceed $102 billion, at which point the management fee rate
under the Amended Contract begins to decline relative to the Present
Contract. The following chart compares the fund's management fee under the
terms of the Present Contract for the fiscal year ended June 30, 1996 to
the management fee the fund would have incurred if the Amended Contract had
been in effect.
Present Contract Amended Contract
Management Management Percentage
Fee* Fee Difference
$ 13,384 $ 12,986 (2.97)%
* Does not reflect voluntary adoption of extended group fee rate schedules
by FMR on January 1, 1992, November 1, 1993, August 1, 1994, and January 1,
1996.
MATTERS CONSIDERED BY THE BOARD
The mutual funds for which the members of the Board of Trustees serve as
Trustees are referred to herein as the "Fidelity funds." The Board of
Trustees meets eleven times a year. The Board of Trustees, including the
Independent Trustees, believe that matters bearing on the appropriateness
of the fund's management fees are considered at most, if not all, of their
meetings. While the full Board of Trustees or the Independent Trustees, as
appropriate, act on all major matters, a significant portion of the
activities of the Board of Trustees (including certain of those described
herein) are conducted through committees. The Independent Trustees meet
frequently in executive session and are advised by independent legal
counsel selected by the Independent Trustees.
The Amended Contract was approved by the Board of Trustees of the fund,
including all of the Independent Trustees on October 9, 1996. The Board of
Trustees considered and approved the modifications to the Group Fee Rate
schedule during the two month periods from November to December 1995, June
to July 1994, September to October 1993, and November to December 1991.
The Board of Trustees received materials relating to the Amended Contract
in advance of the meeting at which the Amended Contract was considered, and
had the opportunity to ask questions and request further information in
connection with such consideration.
INFORMATION RECEIVED BY THE INDEPENDENT TRUSTEES. In connection with their
monthly meetings Trustees receive materials specifically relating to the
Amended Contract. These materials include: (i) information on the
investment performance of the fund, a peer group of funds and an
appropriate index or combination of indices, (ii) sales and redemption data
in respect of the fund, (iii) the economic outlook and the general
investment outlook in the markets in which the fund invests, and (iv)
notable changes in the fund's investments. The Board of Trustees and the
Independent Trustees also consider periodically other material facts such
as (1) FMR's financial condition, (2) arrangements in respect of the
distribution of the fund's shares, (3) the procedures employed to determine
the value of the fund's assets, (4) the allocation of the fund's brokerage,
if any, including allocations to brokers affiliated with FMR and the use of
"soft" commission dollars to pay fund expenses and to pay for research and
other similar services, (5) FMR's management of the relationships with the
fund's custodian and subcustodians, and (6) the resources devoted to and
the record of compliance with the fund's investment policies and
restrictions and with policies on personal securities transactions.
In response to questions raised by the Independent Trustees, additional
information was furnished by FMR including, among other items, information
on and analysis of (a) the overall organization of FMR, (b) the impact of
performance adjustments to management fees, (c) the choice of performance
indices and benchmarks, (d) the composition of peer groups of funds, (e)
transfer agency and bookkeeping fees paid to affiliates of FMR, (f)
investment performance, (g) investment management staffing, (h) the
potential for achieving further economies of scale, (i) operating expenses
paid to third parties, and (j) the information furnished to investors,
including the fund's shareholders.
Matters considered by the Board of Trustees and the Independent Trustees
in connection with their approval of the Amended Contract include the
following:
INVESTMENT COMPLIANCE AND PERFORMANCE. The Board of Trustees and the
Independent Trustees considered whether the fund has operated within its
investment objective and its record of compliance with its investment
restrictions. They also reviewed monthly the fund's investment performance
as well as the performance of a peer group of mutual funds, and the
performance of an appropriate index or combination of indices.
FMR'S PERSONNEL AND METHODS. The Board of Trustees and the Independent
Trustees annually review a report detailing the background of the fund's
portfolio manager, and the fund's investment objective and discipline. The
Independent Trustees have also had discussions with senior management of
FMR responsible for investment operations, and the senior management of
Fidelity's equity group. Among other things they considered the size,
education and experience of FMR's investment staff, its use of technology,
and FMR's approach to recruiting, training and retaining portfolio managers
and other research, advisory and management personnel.
NATURE AND QUALITY OF OTHER SERVICES. The Board of Trustees and the
Independent Trustees considered the nature, quality, cost and extent of
administrative and shareholder services performed by FMR and affiliated
companies, both under the Amended Contract and under separate agreements
covering transfer agency functions and pricing, bookkeeping and securities
lending services, if any. The Board of Trustees and the Independent
Trustees have also considered the nature and extent of FMR's supervision of
third party service providers, principally custodians and subcustodians.
EXPENSES. The Board of Trustees and the Independent Trustees considered the
fund's expense ratio and expense ratios of a peer group of funds. They also
considered the amount and nature of fees paid by shareholders.
PROFITABILITY. The Board of Trustees and the Independent Trustees
considered the level of FMR's profits in respect of the management of the
Fidelity funds, including the fund. This consideration included an
extensive review of FMR's methodology in allocating its costs to the
management of the fund. The Board of Trustees and the Independent Trustees
have concluded that the cost allocation methodology employed by FMR has a
reasonable basis and is appropriate in light of all of the circumstances.
They considered the profits realized by FMR in connection with the
operation of the fund and whether the amount of profit is a fair
entrepreneurial profit for the management of the fund. They also considered
the profits realized from non-fund businesses which may benefit from or be
related to the fund's business. The Board of Trustees and the Independent
Trustees also considered FMR's profit margins in comparison with available
industry data, both accounting for and ignoring market expenses.
ECONOMIES OF SCALE. The Board of Trustees and the Independent Trustees
considered whether there have been economies of scale in respect of the
management of the Fidelity funds, whether the Fidelity funds (including the
fund) have appropriately benefitted from any economies of scale, and
whether there is potential for realization of any further economies of
scale. The Board of Trustees and the Independent Trustees have concluded
that FMR's mutual fund business presents some limited opportunities to
realize economies of scale and that these economies are being shared
between fund shareholders and FMR in an appropriate manner. The Independent
Trustees have also concluded that the existing group fee structure should
be continued but determined that it would be appropriate to change the
group fee structure as proposed herein.
OTHER BENEFITS TO FMR. The Board of Trustees and the Independent Trustees
also considered the character and amount of fees paid by the fund and the
fund's shareholders for services provided by FMR and its affiliates,
including fees for services like transfer agency, fund accounting and
direct shareholder services. They also considered the allocation of fund
brokerage to brokers affiliated with FMR and the receipt of sales loads and
payments under Rule 12b-1 plans in respect of certain of the Fidelity
funds. The Board of Trustees and the Independent Trustees also considered
the revenues and profitability of FMR businesses other than its mutual fund
business, including FMR's retail brokerage, correspondent brokerage,
capital markets, trust, investment advisory, pension record keeping, credit
card, insurance, publishing, real estate, international research and
investment funds, and others. The Board of Trustees and the Independent
Trustees considered the intangible benefits that accrue to FMR and its
affiliates by virtue of their relationship with the fund.
OTHER BENEFITS TO SHAREHOLDERS. The Board of Trustees and the Independent
Trustees considered the benefit to shareholders of investing in a fund that
is part of a large family of funds offering a variety of investment
disciplines and providing for a large variety of fund and shareholder
services.
CONCLUSION. In considering the Amended Contract, the Board of Trustees and
the Independent Trustees did not identify any single factor as
all-important or controlling, and the foregoing summary does not detail all
of the matters considered. Based on their evaluation of all material
factors and assisted by the advice of independent counsel, the Trustees
concluded (i) that the existing management fee structure is fair and
reasonable and (ii) that the proposed modifications to the management fee
rates, that is the reduction of the Group Fee Rate schedule, are in the
best interest of the fund's shareholders. The Board of Trustees, including
the Independent Trustees, voted to approve the submission of the Amended
Contract to shareholders of the fund and recommends that shareholders of
the fund vote FOR the Amended Contract.
9. TO APPROVE A NEW SUB-ADVISORY AGREEMENT WITH FMR FAR EAST FOR FIDELITY
FUND.
In conjunction with its portfolio management responsibilities on behalf of
the fund, FMR has entered into sub-advisory agreements with affiliates
whose offices are geographically dispersed around the world. To strengthen
and coordinate these relationships, the Board of Trustees proposes that
shareholders of the fund approve a new sub-advisory agreement (the Proposed
Agreement) between FMR Far East and FMR on behalf of the fund to replace
FMR's existing agreement with FMR Far East. The Proposed Agreement would
allow FMR not only to receive investment advice and research services from
FMR Far East, but also would permit FMR to grant FMR Far East investment
management authority if FMR believes it would be beneficial to the fund and
its shareholders. Because FMR pays all of FMR Far East's fees, the Proposed
Agreement would not affect the fees paid by the fund to FMR.
On October 9, 1996, the Board of Trustees agreed to submit the Proposed
Agreement to shareholders of the fund pursuant to a unanimous vote of both
the full Board of Trustees and those Trustees who were not "interested
persons" of the trust or FMR. FMR provided substantial information to the
Trustees to assist them in their deliberations. The Trustees determined
that allowing FMR to grant investment management authority to FMR Far East
would provide FMR increased flexibility in the assignment of portfolio
managers and give the fund access to managers located abroad who may have
more specialized expertise with respect to local companies and markets.
Additionally, the Trustees believe that the fund and its shareholders may
benefit from giving FMR, through FMR Far East, the ability to execute
portfolio transactions from points in the Far East that are physically
closer to foreign issuers and the primary markets in which their securities
are traded. Increasing FMR's proximity to foreign markets should enable the
fund to participate more readily in full trading sessions on foreign
exchanges, and to react more quickly to changing market conditions.
If approved by shareholders, the Proposed Agreement will replace the
sub-advisory agreement currently in effect with FMR Far East with respect
to the fund (the Current Agreement). The Current Agreement, dated March 1,
1990, was approved by the fund's shareholders on December 13, 1989. A copy
of the Proposed Agreement is attached to this proxy statement as Exhibit 4.
FMR Far East, with its principal office in Tokyo, Japan is a wholly-owned
subsidiary of FMR established in 1986 to provide investment research to FMR
with respect to foreign securities. This research complements other
research on foreign securities produced by FMR's U.S.-based research
analysts and portfolio managers, or obtained from broker-dealers or other
sources.
FMR Far East may also provide investment advisory services to FMR with
respect to other investment companies for which FMR serves as investment
adviser, and to other clients. Currently, FMR Far East's only client other
than FMR is Fidelity International Limited (FIL), an affiliate of FMR
organized under the laws of Bermuda. FIL provides investment advisory
services to non-U.S. investment companies and institutional investors
investing in securities of issuers throughout the world. Edward C. Johnson
3d, President and a Trustee of the trust, is Chairman and a Director of FMR
Far East, Chairman, and a Director of FIL, and a principal stockholder of
both FIL and FMR. For more information on FMR Far East, see the section
entitled "Activities and Management of FMR U.K. and FMR Far East" on page
52.
Under the Current Agreement, FMR Far East acts as an investment
consultant to FMR and supplies FMR with investment research information and
portfolio management advice as FMR reasonably requests on behalf of the
fund. FMR Far East provides investment advice and research services with
respect to issuers located outside of the United States, focusing primarily
on companies based in the Far East. Under the Current Agreement with FMR
Far East, FMR, NOT THE FUND, pays FMR Far East's fee equal to 105% of its
costs incurred in connection with the agreement.
For the fiscal year ended June 30, 1996, FMR paid FMR Far East $97,831 on
behalf of the fund. Fees paid to the sub-adviser are not reduced to reflect
expense reimbursements or fee waivers by FMR, if any, in effect from time
to time.
Although FMR employees are expected to consult regularly with FMR Far
East, under the Current Agreement, FMR Far East has no authority to make
investment decisions on behalf of the fund. Under the Proposed Agreement,
FMR would continue to receive investment advice from FMR Far East, but it
could also grant investment management authority to FMR Far East with
respect to all or a portion of the fund's assets. If FMR Far East were to
exercise investment management authority on behalf of the fund, it would be
required, subject to the supervision of FMR, to direct the investments of
the fund in accordance with the fund's investment objective, policies, and
limitations as provided in the fund's Prospectus or other governing
instruments and such other limitations as the fund may impose by notice in
writing to FMR or FMR Far East. If FMR grants investment management
authority to FMR Far East with respect to all or a portion of the fund's
assets, FMR Far East would be authorized to buy or sell stocks, bonds, and
other securities for the fund subject to the overall supervision of FMR and
the Board of Trustees. In addition, the Proposed Agreement would authorize
FMR to delegate other investment management services to FMR Far East,
including, but not limited to, currency management services (including
buying and selling currency options and entering into currency forward and
futures contracts on behalf of the fund), other transactions in futures
contracts and options, and borrowing or lending portfolio securities. If
any of these investment management services were delegated, FMR Far East
would continue to be subject to the control and direction of FMR and the
Board of Trustees and to be bound by the investment objective, policies,
and limitations of the fund.
THE PROPOSED AGREEMENT WOULD NOT INCREASE THE FEES PAID TO FMR BY THE
FUND. The fees paid by FMR to FMR Far East for investment advice as
described above would remain unchanged. However, to the extent that FMR
granted investment management authority to FMR Far East, FMR would pay FMR
Far East 50% of its monthly management fee with respect to the average net
assets managed on a discretionary basis by FMR Far East for investment
management and portfolio execution services.
If approved by shareholders, the Proposed Agreement would take effect on
August 1, 1997 (or, if later, the first day of the first month following
approval) and would continue in force until July 31, 1998 and from year to
year thereafter, but only as long as its continuance was approved at least
annually by (i) the vote, cast in person at a meeting called for the
purpose, of a majority of those Trustees who are not "interested persons"
of the trust or FMR and (ii) the vote of either a majority of the Trustees
or by the vote of a majority of the outstanding shares of the fund.
The Proposed Agreement could be transferred to a successor of FMR Far East
without resulting in its termination and without shareholder approval, as
long as the transfer did not constitute an assignment under applicable
securities regulations. The Proposed Agreement would be terminable on 60
days' written notice by either party to the agreement and the Proposed
Agreement would terminate automatically in the event of its assignment.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the fund and its shareholders. The Trustees recommend voting FOR
the proposal. If the Proposed Agreement is not approved, FMR's Current
Agreement on behalf of the fund will continue in effect.
10. TO APPROVE A NEW SUB-ADVISORY AGREEMENT WITH FMR U.K. FOR FIDELITY
FUND.
In conjunction with its portfolio management responsibilities on behalf of
the fund, FMR has entered into sub-advisory agreements with affiliates
whose offices are geographically dispersed around the world. To strengthen
and coordinate these relationships, the Board of Trustees proposes that
shareholders of the fund approve a new sub-advisory agreement (the Proposed
Agreement) between FMR U.K. and FMR on behalf of the fund to replace FMR's
existing agreement with FMR U.K. The Proposed Agreement would allow FMR not
only to receive investment advice and research services from FMR U.K., but
also would permit FMR to grant FMR U.K. investment management authority if
FMR believes it would be beneficial to the fund and its shareholders.
Because FMR pays all of FMR U.K.'s fees, the Proposed Agreement would not
affect the fees paid by the fund to FMR.
On October 9, 1996, the Board of Trustees agreed to submit the Proposed
Agreement to shareholders of the fund pursuant to a unanimous vote of both
the full Board of Trustees and those Trustees who were not "interested
persons" of the trust or FMR. FMR provided substantial information to the
Trustees to assist them in their deliberations. The Trustees determined
that allowing FMR to grant investment management authority to FMR U.K.
would provide FMR increased flexibility in the assignment of portfolio
managers and give the fund access to managers located abroad who may have
more specialized expertise with respect to local companies and markets.
Additionally, the Trustees believe that the fund and its shareholders may
benefit from giving FMR, through FMR U.K., the ability to execute portfolio
transactions from points in Europe that are physically closer to foreign
issuers and the primary markets in which their securities are traded.
Increasing FMR's proximity to foreign markets should enable the fund to
participate more readily in full trading sessions on foreign exchanges, and
to react more quickly to changing market conditions.
If approved by shareholders, the Proposed Agreement will replace the
sub-advisory agreement currently in effect with FMR U.K. with respect to
the fund (the Current Agreement). The Current Agreement, dated March 1,
1990, was approved by the fund's shareholders on December 13, 1989. A copy
of the Proposed Agreement is attached to this proxy statement as Exhibit 3.
FMR U.K., with its principal office in London, England is a wholly-owned
subsidiary of FMR established in 1986 to provide investment research to FMR
with respect to foreign securities. This research complements other
research on foreign securities produced by FMR's U.S.-based research
analysts and portfolio managers, or obtained from broker-dealers or other
sources.
FMR U.K. may also provide investment advisory services to FMR with respect
to other investment companies for which FMR serves as investment adviser,
and to other clients. Currently, FMR U.K.'s only client other than FMR is
Fidelity International Limited (FIL), an affiliate of FMR organized under
the laws of Bermuda. FIL provides investment advisory services to non-U.S.
investment companies and institutional investors investing in securities of
issuers throughout the world. Edward C. Johnson 3d, President and a Trustee
of the trust, is Chairman and a Director of FMR U.K., Chairman, and a
Director of FIL, and a principal stockholder of both FIL and FMR. For more
information on FMR U.K., see the section entitled "Activities and
Management of FMR U.K. and FMR Far East" on page 52.
Under the Current Agreement, FMR U.K. acts as an investment consultant to
FMR and supplies FMR with investment research information and portfolio
management advice as FMR reasonably requests on behalf of the fund. FMR
U.K. provides investment advice and research services with respect to
issuers located outside of the United States, focusing primarily on
companies based in Europe. Under the Current Agreement with FMR U.K., FMR,
NOT THE FUND, pays FMR U.K.'s fee equal to 110% of its costs incurred in
connection with the agreement.
For the fiscal year ended June 30, 1996, FMR paid FMR U.K. $87,879 on
behalf of the fund. Fees paid to the sub-adviser are not reduced to reflect
expense reimbursements or fee waivers by FMR, if any, in effect from time
to time.
Although FMR employees are expected to consult regularly with FMR U.K.,
under the Current Agreement, FMR U.K. has no authority to make investment
decisions on behalf of the fund. Under the Proposed Agreement, FMR would
continue to receive investment advice from FMR U.K., but it could also
grant investment management authority to FMR U.K. with respect to all or a
portion of the fund's assets. If FMR U.K. were to exercise investment
management authority on behalf of the fund, it would be required, subject
to the supervision of FMR, to direct the investments of the fund in
accordance with the fund's investment objective, policies, and limitations
as provided in the fund's Prospectus or other governing instruments and
such other limitations as the fund may impose by notice in writing to FMR
or FMR U.K. If FMR grants investment management authority to FMR U.K. with
respect to all or a portion of the fund's assets, FMR U.K. would be
authorized to buy or sell stocks, bonds, and other securities for the fund
subject to the overall supervision of FMR and the Board of Trustees. In
addition, the Proposed Agreement would authorize FMR to delegate other
investment management services to FMR U.K., including, but not limited to,
currency management services (including buying and selling currency options
and entering into currency forward and futures contracts on behalf of the
fund), other transactions in futures contracts and options, and borrowing
or lending portfolio securities. If any of these investment management
services were delegated, FMR U.K. would continue to be subject to the
control and direction of FMR and the Board of Trustees and to be bound by
the investment objective, policies, and limitations of the fund.
THE PROPOSED AGREEMENT WOULD NOT INCREASE THE FEES PAID TO FMR BY THE
FUND. The fees paid by FMR to FMR U.K. for investment advice as described
above would remain unchanged. However, to the extent that FMR granted
investment management authority to FMR U.K., FMR would pay FMR U.K. 50% of
its monthly management fee with respect to the average net assets managed
on a discretionary basis by FMR U.K. for investment management and
portfolio execution services.
If approved by shareholders, the Proposed Agreement would take effect on
August 1, 1997 (or, if later, the first day of the first month following
approval) and would continue in force until July 31, 1998 and from year to
year thereafter, but only as long as its continuance was approved at least
annually by (i) the vote, cast in person at a meeting called for the
purpose, of a majority of those Trustees who are not "interested persons"
of the trust or FMR and (ii) the vote of either a majority of the Trustees
or by the vote of a majority of the outstanding shares of the fund.
The Proposed Agreement could be transferred to a successor of FMR U.K.
without resulting in its termination and without shareholder approval, as
long as the transfer did not constitute an assignment under applicable
securities regulations. The Proposed Agreement would be terminable on 60
days' written notice by either party to the agreement and the Proposed
Agreement would terminate automatically in the event of its assignment.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the fund and its shareholders. The Trustees recommend voting FOR
the proposal. If the Proposed Agreement is not approved, FMR's Current
Agreement on behalf of the fund will continue in effect.
11. TO AMEND FIDELITY FUND'S FUNDAMENTAL INVESTMENT LIMITATION CONCERNING
REAL ESTATE.
The fund's fundamental investment limitation concerning real estate
currently states:
"The fund may not buy or sell real estate unless acquired as a result of
ownership of securities."
The Trustees recommend that shareholders of the fund vote to replace this
fundamental investment limitation with the following fundamental investment
limitation governing purchases and sales of real estate.
"The fund may not purchase or sell real estate unless acquired as a result
of ownership of securities or other instruments (but this shall not prevent
the fund from investing in securities or other instruments backed by real
estate or securities of companies engaged in the real estate business)."
The primary purpose of the proposed amendment is to clarify the types of
securities in which the fund is authorized to invest and to conform the
fund's fundamental real estate limitation to a limitation that is expected
to become standard for all funds managed by FMR. (See "Adoption of
Standardized Investment Limitations" on page 41.) If the proposal is
approved, the new fundamental real estate limitation may not be changed
without the approval of shareholders.
Adoption of the proposed limitation concerning real estate is not expected
to significantly affect the way in which the fund is managed, the
investment performance of the fund, or the securities or instruments in
which the fund invests. However, to the extent that the fund invests to a
greater extent in real estate related securities, it will be subject to the
risks of the real estate market. This industry is sensitive to factors such
as changes in real estate values and property taxes, overbuilding,
variations in rental income, and interest rates. Performance could also be
affected by the structure, cash flow, and management skill of real estate
companies.
The fund does not expect to acquire real estate. However, the proposed
limitation would clarify several points. First, the proposed limitation
would make explicit that the fund may acquire a security or other
instrument that is secured by a mortgage or other right to foreclose on
real estate, in the event of a default. Second, the proposed limitation
would clarify the fact that the fund may invest without limitation in
securities issued or guaranteed by companies engaged in acquiring,
constructing, financing, developing, or operating real estate projects
(e.g., securities of issuers that develop various industrial, commercial,
or residential real estate projects such as factories, office buildings, or
apartments). Any investments in these securities or other instruments are,
of course, subject to the fund's investment objective and policies and to
other limitations regarding diversification and concentration in particular
industries.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the fund and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the amended fundamental limitation
will become effective immediately. If the proposal is not approved by the
shareholders of the fund, the fund's current limitation will remain
unchanged.
ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS
The primary purpose of Proposals 12 through 22 is to revise several of
Fidelity Fund's investment limitations to conform to limitations which are
standard for similar types of funds managed by FMR. The Board of Trustees
asked FMR to analyze the various fundamental and non-fundamental investment
limitations of the Fidelity funds, and, where practical and appropriate to
a fund's investment objective and policies, propose to shareholders
adoption of standard fundamental limitations and elimination of certain
other fundamental limitations. Generally, when fundamental limitations are
eliminated, Fidelity's standard non-fundamental limitations replace them.
By making these limitations non-fundamental, the Board of Trustees may
amend a limitation as they deem appropriate, without seeking shareholder
approval. The Board of Trustees would amend the limitations to respond, for
instance, to developments in the marketplace, or changes in federal or
state law. The costs of shareholder meetings called for these purposes are
generally borne by a fund and its shareholders.
It is not anticipated that these proposals will substantially affect the
way the fund is currently managed. However, FMR is presenting them to you
for your approval because FMR believes that increased standardization will
help to promote operational efficiencies and facilitate monitoring of
compliance with fundamental and non-fundamental investment limitations.
Although adoption of a new or revised limitation is not likely to have any
impact on the current investment techniques employed by the fund, it will
contribute to the overall objectives of standardization.
12. TO AMEND FIDELITY FUND'S FUNDAMENTAL INVESTMENT LIMITATION CONCERNING
DIVERSIFICATION TO PERMIT INCREASED INVESTMENT IN THE SECURITIES OF ANY
SINGLE ISSUER.
Fidelity Fund's current fundamental investment limitation concerning
diversification is as follows:
"The fund may not purchase the securities of any issuer (other than
obligations of the U.S. government and its instrumentalities) if, as a
result thereof: (a) more than 5% of the fund's total assets (taken at
market value) would be invested in the securities of such issuer; or (b)
more than 10% of the outstanding voting securities of such issuer would be
held in the fund's portfolio."
The Trustees recommend that shareholders of Fidelity Fund vote to replace
the fund's current fundamental investment limitation with the following
amended fundamental investment limitation governing diversification:
"The fund may not with respect to 75% of the fund's total assets, purchase
the securities of any issuer (other than securities issued or guaranteed by
the U.S. government or any of its agencies or instrumentalities) if, as a
result, (a) more than 5% of the fund's total assets would be invested in
the securities of that issuer, or (b) the fund would hold more than 10% of
the outstanding voting securities of that issuer."
The proposed fundamental limitation concerning diversification is the
limitation imposed by the 1940 Act for diversified investment companies.
The amended fundamental limitation allows the fund, with respect to 25% of
its total assets, to invest more than 5% of its total assets in the
securities of each of one or more issuers and to hold more than 10% of the
voting securities of any issuer. The fund will continue to be required to
invest 75% of its total assets so that no more than 5% of total assets are
invested in any one issuer, and so that the fund owns no more than 10% of
the voting securities of any such issuer.
The amended limitation would permit the fund, for example, to invest 25%
of its assets in a single issuer's securities, or to invest 10% of its
total assets in securities of one issuer and 15% in securities of another
issuer. The proposal would give the fund greater investment flexibility by
permitting it to acquire larger positions in the securities of individual
issuers. FMR believes that this increased flexibility may provide
opportunities to enhance the fund's performance. At the same time,
investing a larger percentage of the fund's assets in a single issuer's
securities increases the fund's exposure to credit and other risks
associated with that issuer's financial condition and business operations,
including the risk of default on debt securities. FMR will only invest more
than 5% of the fund's total assets in an issuer's securities when it
believes the securities' potential return justifies accepting the risks
associated with the higher level of investment. FMR does not currently
expect that approval of this proposal will materially affect the way in
which the fund is managed with regard to the fund's holding more than 10%
of the voting securities of an issuer.
If the proposal is approved, the amended fundamental diversification
limitation cannot be changed without the approval of shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit Fidelity Fund and its shareholders. The Trustees
recommend voting FOR the proposal. The amended fundamental diversification
limitation, upon shareholder approval, will become effective immediately.
If Proposal 13 is also approved, the fundamental diversification limitation
will be further changed as discussed below. If the proposal is not approved
by the shareholders of the fund, but Proposal 13 is approved, the fund's
fundamental diversification limitation will be changed as discussed in
Proposal 13. If neither this proposal nor Proposal 13 is approved, the
fund's fundamental diversification limitation will remain unchanged.
13. TO AMEND FIDELITY FUND'S FUNDAMENTAL INVESTMENT LIMITATION CONCERNING
DIVERSIFICATION TO EXCLUDE SECURITIES OF OTHER INVESTMENT COMPANIES FROM
THE LIMITATION.
The Trustees recommend that the shareholders of Fidelity Fund amend the
fund's fundamental investment limitation to exclude securities of other
investment companies from the limitation. If Proposal 12 is adopted, this
amendment would be effected by adding the underlined text below to the
fundamental investment limitation recommended in Proposal 12:
"The fund may not, with respect to 75% of the fund's total assets,
purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities ((or securities of other investment companies))) if, as a
result, (a) more than 5% of the fund's total assets would be invested in
the securities of that issuer, or (b) the fund would hold more than 10% of
the outstanding voting securities of that issuer."
If Proposal 12 is not adopted, this amendment would be effected by adding
the same underlined language to the fund's current fundamental investment
limitation, so that the fundamental investment limitation would read as
follows:
"The fund may not purchase the securities of any issuer (other than
obligations of the U.S. government and its instrumentalities ((or
securities of other investment companies))) if, as a result thereof: (a)
more than 5% of the fund's total assets (taken at market value) would be
invested in the securities of such issuer; or (b) more than 10% of the
outstanding voting securities of such issuer would be held in the fund's
portfolio."
In either case, the exclusion recommended in this Proposal 13 would make
one change to the fund's fundamental diversification limitation: it would
permit the fund to invest without limit in the securities of other
investment companies. Pursuant to an order of exemption granted by the SEC,
the fund may invest up to 25% of total assets in non-publicly offered money
market or short-term bond funds (the Central Funds) managed by FMR or an
affiliate of FMR. The Central Funds do not currently pay investment
advisory, management, or transfer agent fees, but do pay minimal fees for
services, such as custodian, auditor, and Independent Trustee fees. FMR
anticipates that the Central Funds will benefit the fund by enhancing the
efficiency of cash management for the Fidelity funds and by providing
increased short-term investment opportunities. If the proposal is approved,
the Central Funds are expected to serve as a principal option for cash
investment for most Fidelity funds.
If this proposal is approved, the amended fundamental diversification
limitation cannot be changed without the approval of shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit the fund and its shareholders. If this proposal is
approved by the shareholders, whether or not Proposal 12 is adopted, the
fund's fundamental limitation with respect to diversification will be
revised to exclude "securities of other investment companies" from the
diversification limits. The amended fundamental diversification limitation,
upon shareholder approval, would become effective immediately. If neither
this proposal nor Proposal 12 is adopted, the fund's fundamental
diversification limit will remain unchanged.
14. TO ELIMINATE FIDELITY FUND'S FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING SHORT SALES OF SECURITIES.
The fund's current fundamental investment limitation on selling securities
short is as follows:
"The fund may not engage in short sales of securities (unless it owns, or
by virtue of its ownership of other securities, has the right to obtain
securities equivalent in kind and amount to the securities sold); provided,
however, that the fund may purchase or sell futures contracts."
The Trustees recommend that shareholders of the fund vote to eliminate the
above fundamental investment limitation. If the proposal is approved by
shareholders, the Trustees intend to adopt a non-fundamental limitation
that could be changed without a vote of shareholders. The proposed
non-fundamental limitation is set forth below, with a brief analysis of the
substantive differences between it and the current limitation.
"The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short."
In a short sale, an investor sells a borrowed security and has a
corresponding obligation to the lender to return the identical security. In
an investment technique known as a short sale "against the box," an
investor sells securities short while owning the same securities in the
same amount, or having the right to obtain equivalent securities. The
investor could have the right to obtain equivalent securities, for example,
through its ownership of warrants, options, or convertible bonds.
The proposed non-fundamental limitation would clarify that transactions in
futures contracts and options are not deemed to constitute selling
securities short.
The fund does not currently anticipate entering into any short sales other
than short sales against the box. If the proposal is approved, however, the
Board of Trustees would be able to change the proposed non-fundamental
limitation in the future, without a vote of shareholders subject to
appropriate disclosure to investors.
Elimination of the fund's fundamental limitation on short selling is
unlikely to affect the fund's investment techniques at this time. The Board
of Trustees believes that efforts to standardize the fund's investment
limitation will facilitate FMR's investment compliance efforts (see
"Adoption of Standardized Investment Limitations" on page 41) and are in
the best interests of shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the fund and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the non-fundamental limitation
will become effective immediately. If the proposal is not approved by the
shareholders of the fund, the fund's current limitation will remain
unchanged.
15. TO ELIMINATE FIDELITY FUND'S FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING MARGIN PURCHASES.
The fund's current fundamental investment limitation concerning purchasing
securities on margin is as follows:
"The fund may not buy any securities or other property on margin;
provided, however, that the fund may make initial and variation margin
payments in connection with purchases or sales of futures contracts or of
options on futures contracts."
The Trustees recommend that shareholders of the fund vote to eliminate the
above fundamental investment limitation. If the proposal is approved, the
Trustees intend to adopt a substantially identical non-fundamental
limitation for the fund that could be changed without the approval of
shareholders.
Margin purchases involve the purchase of securities with money borrowed
from a broker. "Margin" is the cash or eligible securities that the
borrower places with a broker as collateral against the loan. The fund's
current fundamental limitation prohibits the fund from purchasing
securities on margin, except for initial and variation margin payments made
in connection with the purchase and sale of futures contracts and options
on futures contracts. With these exceptions, mutual funds are prohibited
from entering into most types of margin purchases by applicable SEC
policies. The proposed non-fundamental limitation includes these
exceptions.
If the proposal is approved by shareholders, the Trustees intend to adopt
the following non-fundamental investment limitation, which would prohibit
margin purchases except as permitted under the conditions referred to
above:
"The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin."
In addition, the fund's non-fundamental limitation clarifies that the fund
may obtain short-term credits that are necessary for the clearance of
transactions.
Although elimination of the fund's fundamental limitation on margin
purchases is unlikely to affect the fund's investment techniques at this
time, in the event of a change in federal regulatory requirements, the fund
may alter its investment practices in the future. The Board of Trustees
believes that efforts to standardize investment limitations will facilitate
FMR's investment compliance efforts (see "Adoption of Standardized
Investment Limitations" on page 41) and are in the best interests of
shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the fund and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the new non-fundamental limitation
will become effective immediately. If the proposal is not approved by the
shareholders of the fund, the fund's current limitation will remain
unchanged.
16. TO ELIMINATE FIDELITY FUND'S FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING INVESTMENTS IN OTHER INVESTMENT COMPANIES.
The fund's current fundamental investment limitation concerning investment
in other investment companies states:
"The fund may not purchase securities of other investment companies except
in the open market where no commission other than the ordinary broker's
commission is paid, or as a part of a merger, and in no event may
investments in such securities exceed 10% of the value of the total assets
of the fund. The fund may not purchase or retain securities issued by
another open-end investment company."
The Trustees recommend that shareholders of the fund vote to eliminate the
above fundamental investment limitation.
The ability of mutual funds to invest in other investment companies is
restricted by rules under the 1940 Act, and, until recently, by some state
regulations. The fund's fundamental restriction incorporates some of the
1940 Act restrictions and the state regulations. The federal 1940 Act
restrictions will remain applicable to the fund whether or not they are
recited in a fundamental limitation. Because the state regulations are no
longer applicable and federal requirements apply whether or not the fund
has a fundamental policy, shareholder approval is sought to eliminate this
fundamental limitation. Elimination of the limitation would permit the fund
to purchase the securities of other investment companies to the extent
permitted under the 1940 Act, or an exemption granted by the SEC. Under the
1940 Act, a fund may purchase the securities of other investment companies
if immediately thereafter not more than (i) 3% of the total outstanding
voting stock of such company is owned by the fund, (ii) 5% of the fund's
total assets, taken at market value, would be invested in any one such
company, (iii) 10% of the fund's total assets, taken at market value, would
be invested in such securities, and (iv) the fund, together with other
investment companies having the same investment adviser and companies
controlled by such companies, owns not more than 10% of the total
outstanding stock of any one closed-end investment company.
If the proposal is approved, the fund would also be able to enhance its
cash management by investing in the Central Funds. (See Proposals 12 and
13.) Furthermore, adoption of the proposal would allow the fund to change
its policies with respect to the purchase of securities of other investment
companies, if federal requirements change, without the cost of a
shareholder vote. In addition, the Board of Trustees believes that efforts
to standardize the fund's investment limitations will facilitate FMR's
investment compliance efforts. (See "Adoption of Standardized Investment
Limitations" on page 41.) Elimination of the fundamental restriction is not
expected to have any impact on the fund's current investment practices,
except with respect to cash management as discussed above.
CONCLUSION. The Board of Trustees recommends voting FOR the proposal to
eliminate the fund's fundamental limitation regarding investments in other
investment companies. If approved, the proposal would take effect
immediately. If the proposal is not approved, the fund's current limitation
will remain unchanged.
17. TO ELIMINATE FIDELITY FUND'S FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING INVESTMENTS IN SECURITIES OF NEWLY-FORMED ISSUERS.
The fund's current fundamental limitation regarding investments in
securities of newly-formed issuers states:
"The fund may not purchase the securities of an issuer, if, as a result
thereof, more than 5% of the market value of the fund's total assets would
be invested in companies which, including predecessors, have a record of
less than three years' continuous operation."
The Trustees recommend that shareholders vote to eliminate the fund's
fundamental investment limitation referenced above. Newly-formed issuers or
"unseasoned issuers" are issuers with less than three years' continuous
operation. The purpose of the fundamental limitation on investments in
unseasoned issuers was to comply with state laws. Because newly-formed
companies have no proven track record in business, their prospects are
uncertain. Their securities may, as a result, be difficult to value and are
likely to fluctuate in price more widely than the securities of established
companies. The Board of Trustees has concluded that the proposed
elimination would benefit the fund by providing more investment
flexibility. Elimination of the restriction will give the fund the ability
to invest in new companies that otherwise meet the investment objective and
criteria of the fund. In addition, the Board of Trustees believes that
efforts to standardize the fund's investment limitations will facilitate
FMR's investment compliance efforts (see "Adoption of Standardized
Investment Limitations" on page 41.)
CONCLUSION. The Board of Trustees recommends voting FOR the proposal to
eliminate the fund's fundamental investment limitation regarding
investments in securities of newly-formed issuers. If approved, the
proposal will take effect immediately. The Board of Trustees has concluded
that the proposed elimination would benefit the fund by providing more
investment flexibility. If the proposal is not approved, the fund's current
limitation will remain unchanged.
18. TO AMEND FIDELITY FUND'S FUNDAMENTAL INVESTMENT LIMITATION CONCERNING
THE ISSUANCE OF SENIOR SECURITIES.
The fund's current fundamental investment limitation regarding the
issuance of senior securities states:
"The fund may not issue senior securities."
The Trustees recommend that shareholders vote to replace this limitation
with the following fundamental investment limitation governing the issuance
of senior securities:
"The fund may not issue senior securities, except as permitted under the
Investment Company Act of 1940."
The primary purpose of the proposal is to revise the fund's fundamental
senior securities limitation to conform to a limitation that is expected to
become standard for all funds managed by FMR. (See "Adoption of
Standardized Investment Limitations" on page 41.) If the proposal is
approved, the new fundamental senior securities limitation cannot be
changed without the approval of shareholders.
Adoption of the proposed limitation on senior securities is not expected
to affect the way in which the fund is managed, the investment performance
of the fund, or the securities or instruments in which the fund invests.
However, the proposed limitation clarifies that the fund may issue senior
securities to the extent permitted under the 1940 Act.
Although the definition of a "senior security" involves complex statutory
and regulatory concepts, a senior security is generally thought of as an
obligation of a fund which has a claim to the fund's assets or earnings
that takes precedence over the claims of the fund's shareholders. The 1940
Act generally prohibits mutual funds from issuing senior securities;
however, mutual funds are permitted to engage in certain types of
transactions that might be considered "senior securities" as long as
certain conditions are satisfied. For example, a transaction which
obligates a fund to pay money at a future date (e.g., the purchase of
securities for settlement on a date that is further away than the normal
settlement period) may be considered a "senior security." A mutual fund,
however, is permitted to enter into this type of transaction if it
maintains a segregated account containing liquid securities in an amount
equal to its obligation to pay cash for the securities at a future date.
The fund utilizes transactions that may be considered "senior securities"
only in accordance with applicable regulatory requirements under the 1940
Act.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the fund and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the amended fundamental limitation
will become effective immediately. If the proposal is not approved by the
shareholders of the fund, the fund's current limitation will remain
unchanged.
19. TO AMEND FIDELITY FUND'S FUNDAMENTAL INVESTMENT LIMITATION CONCERNING
BORROWING.
The fund's current fundamental investment limitation concerning borrowing
states:
"The fund may not borrow money, except that the fund may borrow money for
temporary or emergency purposes (not for leveraging or investment) in an
amount not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings that
come to exceed 33 1/3% of the value of the fund's total assets by reason of
a decline in net assets will be reduced within three days (exclusive of
Sunday and holidays) to the extent necessary to comply with the 33 1/3%
limitation."
The Trustees recommend that shareholders of the fund vote to replace the
fund's current fundamental investment limitation with the following amended
fundamental investment limitation governing borrowing:
"The fund may not borrow money, except that the fund may borrow money for
temporary or emergency purposes (not for leveraging or investment) in an
amount not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings that
come to exceed this amount will be reduced within three days (not including
Sundays and holidays) to the extent necessary to comply with the 33 1/3%
limitation."
The primary purpose of the proposal is to revise the fund's fundamental
borrowing limitation to conform to a limitation that is expected to become
standard for all funds managed by FMR. (See "Adoption of Standardized
Investment Limitations" on page 41.) If the proposal is approved, the
amended fundamental borrowing limitation cannot be changed without the
approval of shareholders.
Adoption of the proposed fundamental limitation concerning borrowing is
not expected to affect the way in which the fund is managed, the investment
performance of the fund, or the securities or instruments in which the fund
invests. However, the proposed fundamental limitation would clarify one
point. Under the proposed limitation, the fund must reduce borrowings that
come to exceed 33 1/3% of its total assets for any reason. While under the
current limitation, the fund must reduce borrowings that come to exceed 33
1/3% of total assets only when there is a decline in net assets.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the fund and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the amended fundamental limitation
will become effective immediately. If the proposal is not approved by the
shareholders of the fund, the fund's current limitation will remain
unchanged.
20. TO AMEND FIDELITY FUND'S FUNDAMENTAL INVESTMENT LIMITATION CONCERNING
UNDERWRITING.
The fund's current fundamental investment limitation concerning
underwriting states:
"The fund may not underwrite securities issued by others."
The trustees recommend that shareholders of the fund vote to replace this
limitation with the following fundamental limitation governing
underwriting:
"The fund may not underwrite securities issued by others, except to the
extent that the fund may be considered an underwriter within the meaning of
the Securities Act of 1933 in the disposition of restricted securities."
The primary purpose of the proposed amendment is to clarify that the fund
is not prohibited from selling restricted securities if, as a result of
such sale, the fund is considered an underwriter under federal securities
laws. The proposal also serves to conform the fund's fundamental investment
limitation concerning underwriting to a limitation which is expected to
become standard for all funds managed by FMR. (See "Adoption of
Standardized Investment Limitations" on page 41.) If the proposal is
approved, the new limitation may not be changed without the approval of
shareholders.
Adoption of the proposed limitation concerning underwriting is not
expected to affect the way in which the fund is managed, the investment
performance of the fund, or the securities or instruments in which the fund
invests.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the fund and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the amended fundamental limitation
will become effective immediately. If the proposal is not approved by the
shareholders of the fund, the fund's current limitation will remain
unchanged.
21. TO AMEND FIDELITY FUND'S FUNDAMENTAL INVESTMENT LIMITATION CONCERNING
THE CONCENTRATION OF ITS INVESTMENTS IN A SINGLE INDUSTRY.
The fund's current fundamental investment limitation concerning the
concentration of its investments within a single industry states:
"The fund may not purchase securities of any issuer (other than
obligations of the U.S. government and its instrumentalities) if, as a
result thereof, the fund would have more than 25% of the value of its total
assets invested in securities of companies in any one industry."
The Trustees recommend that shareholders of the fund vote to replace this
fundamental investment limitation with the following amended fundamental
investment limitation governing concentration:
"The fund may not purchase the securities of any issuer (other than
securities issued or guaranteed by the U.S. Government or any of its
agencies or instrumentalities) if, as a result, more than 25% of the fund's
total assets would be invested in the securities of companies whose
principal business activities are in the same industry."
The primary purpose of the proposal is to revise the fund's fundamental
concentration limitation to conform to a limitation which is expected to
become standard for all funds managed by FMR. (See "Adoption of
Standardized Investment Limitations" on page 41.) If the proposal is
approved, the new fundamental concentration limitation could not be changed
without the approval of shareholders.
Adoption of the proposed amended limitation on concentration is not
expected to affect the way the fund is managed, the investment performance
of the fund, or the securities or instruments in which the fund invests.
The proposed amended limitation is not substantially different from the
current policy and is not likely to have any impact on the investment
techniques employed by the fund.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the fund and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the amended fundamental limitation
will become effective immediately. If the proposal is not approved by the
shareholders of the fund, the fund's current limitation will remain
unchanged.
22. TO AMEND FIDELITY FUND'S FUNDAMENTAL INVESTMENT LIMITATION CONCERNING
LENDING.
The fund's current fundamental investment limitation concerning lending is
as follows:
"The fund may not lend any security or make any other loan if, as a
result, more than 33 1/3% of the fund's total assets would be lent to other
parties, except, (i) through the purchase of a portion of an issue of debt
securities in accordance with its investment objective, policies, and
limitations, or (ii) by engaging in repurchase agreements with respect to
portfolio securities."
The Trustees recommend that the shareholders of the fund vote to replace
the fund's limitation with the following amended fundamental investment
limitation governing lending:
"The fund may not lend any security or make any other loan if, as a
result, more than 33 1/3% of its total assets would be lent to other
parties, but this limitation does not apply to purchases of debt securities
or to repurchase agreements."
The primary purpose of this proposal is to revise the fund's fundamental
lending limitation to conform to a limitation expected to become standard
for all funds managed by FMR. (See "Adoption of Standardized Investment
Limitations" on page 41.) If the proposal is approved, the new fundamental
lending limitation cannot be changed without the approval of shareholders.
Adoption of the proposed limitation on lending is not expected to affect
the way in which the fund is managed, the investment performance of the
fund, or the instruments in which the fund invests. However, the proposed
limitation would clarify two points. First, the proposed limitation
provides specific authority for the fund to acquire the entire portion of
an issue of debt securities. Ordinarily, if a fund purchases an entire
issue of debt securities, there may be greater risks of illiquidity and
unavailability of public information if the issuer has no other issue of
securities outstanding, and it may be more difficult to obtain pricing
information to be used in establishing a fund's daily share price. Second,
the proposed amendment eliminates the reference to "portfolio securities"
in the exception for repurchase agreements.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the fund and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the amended fundamental limitation
will become effective immediately. If the proposal is not approved by the
shareholders of the fund, the fund's current limitation will remain
unchanged.
OTHER BUSINESS
The Board knows of no other business to be brought before the Meeting.
However, if any other matters properly come before the Meeting, it is the
intention that proxies that do not contain specific instructions to the
contrary will be voted on such matters in accordance with the judgment of
the persons therein designated.
ACTIVITIES AND MANAGEMENT OF FMR
FMR, a corporation organized in 1946, serves as investment adviser to a
number of investment companies. Information concerning the advisory fees,
net assets, and total expenses of funds with investment objectives similar
to Fidelity Fifty and Fidelity Fund and advised by FMR is contained in the
Table of Average Net Assets and Expense Ratios in Exhibit 5 beginning on
page 86.
FMR, its officers and directors, its affiliated companies, and the
Trustees, from time to time have transactions with various banks, including
the custodian banks for certain of the funds advised by FMR. Those
transactions that have occurred to date have included mortgages and
personal and general business loans. In the judgment of FMR, the terms and
conditions of those transactions were not influenced by existing or
potential custodial or other fund relationships.
The Directors of FMR are Edward C. Johnson 3d, Chairman of the Board; J.
Gary Burkhead, President; and Peter S. Lynch, Vice Chairman. Each of the
Directors is also a Trustee of the trust. Messrs. Johnson 3d, Burkhead,
John H. Costello, Arthur S. Loring, Robert H. Morrison, Kenneth A.
Rathgeber, Leonard M. Rush, William J. Hayes, and Beth Terrana are
currently officers of the trust and officers or employees of FMR or FMR
Corp. With the exception of Mr. Costello, [Mr. Rathgeber,] Mr. Rush, and
[PORTFOLIO MANAGER(S) IF NOT A STOCKHOLDER], all of these persons are
stockholders of FMR Corp. The principal business address of each of the
Directors of FMR is 82 Devonshire Street, Boston, Massachusetts 02109.
All of the stock of FMR is owned by its parent company, FMR Corp., 82
Devonshire Street, Boston, Massachusetts 02109, which was organized on
October 31, 1972. Members of Mr. Edward C. Johnson 3d's family are the
predominant owners of a class of shares of common stock, representing
approximately 49% of the voting power of FMR Corp., and, therefore, under
the 1940 Act may be deemed to form a controlling group with respect to FMR
Corp.
During the period July 1, 1996 through March 31, 1997, no transactions
were entered into by Trustees and nominees as Trustee of the trust
involving more than 1% of the voting common, non-voting common and
equivalent stock, or preferred stock of FMR Corp.
ACTIVITIES AND MANAGEMENT OF FMR U.K. AND FMR FAR EAST
FMR U.K. and FMR Far East are wholly-owned subsidiaries of FMR formed in
1986 to provide research and investment advice with respect to companies
based outside the United States for certain funds for which FMR acts as
investment adviser. FMR may also grant the sub-advisers investment
management authority as well as authority to buy and sell securities for
certain of the funds for which it acts as investment adviser, if FMR
believes it would be beneficial to a fund.
Funds with investment objectives similar to Fidelity Fund managed by FMR
with respect to which FMR currently has sub-advisory agreements with either
FMR U.K. or FMR Far East, and the net assets of each of these funds, are
indicated in the Table of Average Net Assets and Expense Ratios in Exhibit
5 beginning on page 86.
The Directors of FMR U.K. and FMR Far East are Edward C. Johnson 3d,
Chairman, and J. Gary Burkhead, President. Mr. Johnson 3d also is President
and a Trustee of the trust and other funds advised by FMR; Chairman and a
Director of FMR Texas Inc. (FMR Texas); Chairman, Chief Executive Officer,
President, and a Director of FMR Corp., Chairman of the Board and of the
Executive Committee of FMR, and a Director of FMR. In addition, Mr.
Burkhead is Senior Vice President and a Trustee of the trust and of other
funds advised by FMR; a Director of FMR Corp.; President and Director of
FMR; and President and Director of FMR Texas. Each of the Directors is a
stockholder of FMR Corp. The principal business address of the Directors is
82 Devonshire Street, Boston, Massachusetts 02109.
PRESENT MANAGEMENT CONTRACTS
Each fund employs FMR to furnish investment advisory and other services.
Under its management contract with each fund, FMR acts as investment
adviser and, subject to the supervision of the Board of Trustees, directs
the investments of each fund in accordance with its investment objective,
policies, and limitations. FMR also provides each fund with all necessary
office facilities and personnel for servicing each fund's investments,
compensates all officers of each fund and all Trustees who are "interested
persons" of the trust or of FMR, and all personnel of each fund or FMR
performing services relating to research, statistical, and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administrative services
necessary for the operation of each fund. These services include providing
facilities for maintaining each fund's organization; supervising relations
with custodians, transfer and pricing agents, accountants, underwriters,
and other persons dealing with each fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining each
fund's records and the registration of each fund's shares under federal and
state laws; developing management and shareholder services for each fund;
and furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees. Services provided by affiliates of FMR will continue under
the proposed management contracts described in proposals 7 and 8.
In addition to the management fee payable to FMR, each fund pays transfer
agent and pricing and bookkeeping fees to Fidelity Service Company, Inc.
(FSC), an affiliate of FMR, its transfer, dividend disbursing, and
shareholder servicing agent. Although each fund's current management
contract provides that each fund will pay for typesetting, printing, and
mailing prospectuses, statements of additional information, notices, and
reports to shareholders, the trust, on behalf of each fund has entered into
a revised transfer agent agreement with FSC, pursuant to which FSC bears
the costs of providing these services to existing shareholders. Other
expenses paid by each fund include interest, taxes, brokerage commissions,
and each fund's proportionate share of insurance premiums and Investment
Company Institute dues. Each fund is also liable for such non-recurring
expenses as may arise, including costs of any litigation to which each fund
may be a party, and any obligation it may have to indemnify its officers
and Trustees with respect to litigation.
Transfer agent fees and pricing and bookkeeping fees, including
reimbursement for out-of-pocket expenses, paid to FSC by Fidelity Fifty and
Fidelity Fund for the fiscal year ended June 30, 1996 are presented in the
table below. FSC also receives fees for administering each fund's
securities lending program. Securities lending fees are based on the number
and duration of individual securities loans. Securities lending fees for
the fiscal year ended June 30, 1996 for Fidelity Fund and Fidelity Fifty
were $12,000 and $0, respectively.
Transfer Agent Pricing and
Fund Fees Bookkeeping
Fees
Fidelity Fifty $ $ 98,089
446,267
Fidelity Fund $ 6,152,00 $785,000
0
Each fund also has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer registered
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. Each distribution agreement calls
for FDC to use all reasonable efforts, consistent with its other business,
to secure purchasers for shares of the fund, which are continuously offered
at net asset value per share. Promotional and administrative expenses in
connection with the offer and sale of shares are paid by FMR.
FMR is each fund's manager pursuant to a management contract dated March
1, 1990 (Fidelity Fund), and July 15, 1993 (Fidelity Fifty), which was
approved by shareholders on December 13, 1989 (Fidelity Fund) and on August
27, 1993 by FMR, then sole shareholder of Fidelity Fifty.
For the services of FMR under the contract, Fidelity Fund pays FMR a
monthly management fee composed of the sum of two elements: a group fee
rate and an individual fund fee rate.
For the services of FMR under the contract, Fidelity Fifty pays FMR a
monthly management fee composed of the sum of two elements: a basic fee and
a performance adjustment based on a comparison of the fund's performance to
that of the Standard & Poor's 500 Index (S&P 500).
COMPUTING THE BASIC FEE (FIDELITY FIFTY) AND MANAGEMENT FEE (FIDELITY
FUND). Fidelity Fifty's basic fee rate and Fidelity Fund's management fee
rate are composed of two elements: a group fee rate and an individual fund
fee rate.
The group fee rate is based on the monthly average net assets of all of
the registered investment companies with which FMR has management contracts
and is calculated on a cumulative basis pursuant to the graduated fee rate
schedule shown below on the left. The schedule below on the right shows the
effective annual group fee rate at various asset levels, which is the
result of cumulatively applying the annualized rates on the left. For
example, the effective annual fee rate at $___ billion of group net assets
- - the approximate level for March 1997 - was ___%, which is the weighted
average of the respective fee rates for each level of group net assets up
to $__ billion.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE
RATES
Average Group Annualized Group Net Effective
Assets Rate Assets Annual
Fee Rate
0 - $ 3 billion .5200% $ 0.5 billion .5200%
3 - 6 .4900 25 .4238
6 - 9 .4600 50 .3823
9 - 12 .4300 75 .3626
12 - 15 .4000 100 .3512
15 - 18 .3850 125 .3430
18 - 21 .3700 150 .3371
21 - 24 .3600 175 .3325
24 - 30 .3500 200 .3284
30 - 36 .3450 225 .3253
36 - 42 .3400 250 .3223
42 - 48 .3350 275 .3198
48 - 66 .3250 300 .3175
66 - 84 .3200 325 .3153
84 - 102 .3150 350 .3133
102 - 138 .3100
138 - 174 .3050
174 - 228 .3000
228 - 282 .2950
282 - 336 .2900
Over 336 .2850
Under Fidelity Fund's current management contract with FMR, the group fee
rate is based on a schedule with breakpoints ending at .3100% for average
group assets in excess of $102 billion. The group fee rate breakpoints
shown above for average group assets in excess of $138 billion and under
$228 billion were voluntarily adopted by FMR on January 1, 1992. The
additional breakpoints shown above for average group assets in excess of
$228 billion were voluntarily adopted by FMR on November 1, 1993.
Under Fidelity Fifty's current management contract with FMR, the group fee
rate is based on a schedule with breakpoints ending at .3000% for average
group assets in excess of $174 billion. The additional breakpoints shown
above for average group assets in excess of $228 billion were voluntarily
adopted by FMR on November 1, 1993.
On August 1, 1994, FMR voluntarily revised the prior extensions to the
group fee rate schedule, and added new breakpoints for average group assets
in excess of $210 billion and under $390 billion as shown in the schedule
below, pending shareholder approval of a new management contract reflecting
the revised schedule. The revised group fee rate schedule provides for
lower management fees as FMR's assets under management increase. The
revised group fee rate schedule was identical to the above schedule for
average group assets under $210 billion.
On January 1, 1996, FMR voluntarily added new breakpoints to the revised
schedule for average group assets in excess of $390 billion, pending
shareholder approval of a new management contract reflecting the revised
schedule and additional breakpoints. The revised group fee rate schedule
and its extensions provide for lower management fee rates as FMR's assets
under management increase. For average group assets in excess of $210
billion, the revised group fee rate schedule with additional breakpoints
voluntarily adopted by FMR is as follows:
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE
RATES
Average Group Annualized Group Net Effective
Assets Rate Assets Annual
Fee Rate
174 - $210 .3000% $ 150 billion .3371%
billion
210 - 246 .2950% 175 .3325
246 - 282 .2900 200 .3284
282 - 318 .2850 225 .3249
318 - 354 .2800 250 .3219
354 - 390 .2750 275 .3190
390 - 426 .2700 300 .3163
426 - 462 .2650 325 .3137
462 - 498 .2600 350 .3113
498 - 534 .2550 375 .3090
Over 534 .2500 400 .3067
425 .3046
450 .3024
475 .3003
500 .2982
525 .2962
550 .2942
The individual fund fee rate is .30% for Fidelity Fifty and .09% for
Fidelity Fund. Based on the average group net assets of the funds advised
by FMR for March 1997, the annual management fee or basic fee rate would be
calculated as follows:
Fidelity Fifty
Group Fee Rate Individual Fund Basic Fee Rate
Fee Rate
% + % = %
Fidelity Fund
Group Fee Rate Individual Fund Management Fee
Fee Rate Rate
% + % = %
One-twelfth of this annual basic fee/management fee rate is applied to
each fund's net assets averaged for the month, giving a dollar amount,
which is the fee for that month.
COMPUTING THE PERFORMANCE ADJUSTMENT FOR FIDELITY FIFTY. The basic fee is
subject to upward or downward adjustment, depending upon whether, and to
what extent, Fidelity Fifty's investment performance for the performance
period exceeds, or is exceeded by, the record of the S&P 500 (the Index)
over the same period. The performance period consists of the current month
plus the previous 35 months. Each percentage point of difference,
calculated to the nearest 1.0% (up to a maximum difference of +/-10.00 ) is
multiplied by a performance adjustment rate of .02%. Thus, the maximum
annualized adjustment rate is +/-.20%. This performance comparison is made
at the end of each month. One twelfth (1/12) of this rate is then applied
to the fund's average net assets for the entire performance period, giving
a dollar amount which will be added to (or subtracted from) the basic fee.
Fidelity Fifty's performance is calculated based on change in net asset
value. For purposes of calculating the performance adjustment, any
dividends or capital gain distributions paid by the fund are treated as if
reinvested in fund shares at the net asset value as of the record date for
payment. The record of the Index is based on change in value and is
adjusted for any cash distributions from the companies whose securities
compose the Index.
Because the adjustment to the basic fee is based on Fidelity Fifty's
performance compared to the investment record of the Index, the controlling
factor is not whether the fund's performance is up or down per se, but
whether it is up or down more or less than the record of the Index.
Moreover, the comparative investment performance of Fidelity Fifty is based
solely on the relevant performance period without regard to the cumulative
performance over a longer or shorter period of time.
During the fiscal year ended June 30, 1996, FMR received $12,985,000 for
its services as investment adviser to Fidelity Fund. This fee was
equivalent to .40% of the average net assets of Fidelity Fund.
During the fiscal year ended June 30, 1996, FMR received $1,006,419 for
its services as investment adviser to Fidelity Fifty. This fee, which
includes both the basic fee and the performance adjustment, was equivalent
to .62% of the average net assets of Fidelity Fifty. For the fiscal year
ended June 30, 1996, the upward performance adjustment amounted to $23,625
for Fidelity Fifty.
FMR may, from time to time, voluntarily reimburse all or a portion of each
fund's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to be
repaid for these expense reimbursements in the amount that expenses fall
below the limit prior to the end of the fiscal year. Expense reimbursements
by FMR will increase each fund's total returns and repayment of the
reimbursement by each fund will lower its total returns.
SUB-ADVISORY AGREEMENTS
On behalf of Fidelity Fifty and Fidelity Fund, FMR has entered into
sub-advisory agreements with FMR U.K. and FMR Far East. Pursuant to the
sub-advisory agreements, FMR may receive investment advice and research
services outside the United States from the sub-advisers. On behalf of
Fidelity Fifty, FMR may also grant the sub-advisers investment management
authority as well as the authority to buy and sell securities if FMR
believes it would be beneficial to the fund. Fidelity Fund's sub-advisory
agreements, dated March 1, 1990, were approved by shareholders on December
13, 1989. Fidelity Fifty's sub-advisory agreements, dated July 15, 1993,
were approved by FMR as sole shareholder of the fund on August 27, 1993.
Currently, FMR U.K. and FMR Far East each focus on issuers in countries
other than the United States such as those in Europe, Asia, and the Pacific
Basin.
FMR U.K. and FMR Far East, which were organized in 1986, are wholly owned
subsidiaries of FMR. Under the sub-advisory agreements FMR pays the fees of
FMR U.K. and FMR Far East. For providing non-discretionary investment
advice and research services, FMR pays FMR U.K. and FMR Far East fees equal
to 110% and 105%, respectively, of FMR U.K.'s and FMR Far East's costs
incurred in connection with providing investment advice and research
services.
On behalf of Fidelity Fifty, for providing discretionary investment
management and executing portfolio transactions, FMR pays FMR U.K. and FMR
Far East a fee equal to 50% of its monthly management fee rate (including
any performance adjustment) with respect to the fund's average net assets
managed by the sub-adviser on a discretionary basis.
For providing investment advice and research services on behalf of each
fund, the fees paid to the sub-advisers for the fiscal year ended June 30
1996 were as follows:
FMR U.K. FMR Far East
Fidelity Fund $ 87,880 $ 97,832
Fidelity Fifty 2,818 3,150
There were no fees paid to FMR U.K. and FMR Far East for providing
discretionary investment management and executing portfolio transactions on
behalf of Fidelity Fifty for the fiscal year ended June 30, 1996.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of each fund by FMR pursuant to authority contained in the fund's
management contract.
FMR may place agency transactions with Fidelity Brokerage Services, Inc.
(FBSI) and Fidelity Brokerage Services (FBS), subsidiaries of FMR Corp., if
the commissions are fair, reasonable, and comparable to commissions charged
by non-affiliated, qualified brokerage firms for similar services.
The brokerage commissions paid to FBSI and FBS by each fund for the fiscal
year ended June 30, 1996 are listed in the following table:
To To % To % To Transac Transac
FBSI FBS FBSI FBS tions tions
Through Through
FBSI FBS
Fidelity Fund $ 1,960,000 $ 10,000 33.3% .18 45.9% .09%
%
Fidelity Fifty 72,507 24.67 33.95
SUBMISSION OF CERTAIN SHAREHOLDER PROPOSALS
The trust does not hold annual shareholder meetings. Shareholders wishing
to submit proposals for inclusion in a proxy statement for a subsequent
shareholder meeting should send their written proposals to the Secretary of
the Trust, 82 Devonshire Street, Boston, Massachusetts 02109.
NOTICE TO BANKS, BROKER-DEALERS AND
VOTING TRUSTEES AND THEIR NOMINEES
Please advise the trust, in care of Fidelity Service Company, Inc.,
whether other persons are beneficial owners of shares for which proxies are
being solicited and, if so, the number of copies of the Proxy Statement and
Annual Reports you wish to receive in order to supply copies to the
beneficial owners of the respective shares.
EXHIBIT 1
((Underlined)) disclosure will be added; [bracketed] disclosure will be
deleted.
FORM OF
MANAGEMENT CONTRACT
BETWEEN
((FIDELITY HASTINGS STREET TRUST:))
FIDELITY FUND
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
((AMENDMENT)) [AGREEMENT] made this ___ day of [March 1990] ((_____
1997, )) by and between Fidelity (( Hastings Street )) [ Fund]
((Trust, )) a Massachusetts business trust which may issue one or more
series of shares of beneficial interest (hereinafter called the "Fund"), on
behalf of [ its single existing series of ] (( Fidelity ))
[ shares of beneficial interest ] (( Fund )) (hereinafter called
the "Portfolio"), and Fidelity Management & Research Company, a
Massachusetts corporation (hereinafter called the "Adviser") ((as set
forth in its entirety below.))
((Required authorization and approval by shareholders and Trustees having
been obtained, the Fund, on behalf of the Portfolio, and the Adviser hereby
consent, pursuant to Paragraph 6 of the existing Management Contract dated
March 1, 1990, to a modification of said Contract in the manner set below.
The Amended Management Contract shall, when executed by duly authorized
officers of the Fund and Adviser, take effect on August 1, 1997 or the
first day of the month following approval.))
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision
of the Fund's Board of Trustees, direct the investments of the Portfolio in
accordance with the investment objective, policies and limitations as
provided in the Portfolio's Prospectus or other governing instruments, as
amended from time to time, the Investment Company Act of 1940 and rules
thereunder, as amended from time to time (the "1940 Act"), and such other
limitations as the Portfolio may impose by notice in writing to the
Adviser. The Adviser shall also furnish for the use of the Portfolio
office space and all necessary office facilities, equipment and personnel
for servicing the investments of the Portfolio; and shall pay the salaries
and fees of all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all personnel of
the Fund or the Adviser performing services relating to research,
statistical and investment activities. The Adviser is authorized, in its
discretion and without prior consultation with the Portfolio, to buy, sell,
lend and otherwise trade in any stocks, bonds and other securities and
investment instruments on behalf of the Portfolio. The investment policies
and all other actions of the Portfolio are and shall at all times be
subject to the control and direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for the
performance by its affiliates of) the management and administrative
services necessary for the operation of the Fund. The Adviser shall,
subject to the supervision of the Board of Trustees, perform various
services for the Portfolio, including but not limited to: (i) providing the
Portfolio with office space, equipment and facilities (which may be its
own) for maintaining its organization; (ii) on behalf of the Portfolio,
supervising relations with, and monitoring the performance of, custodians,
depositories, transfer and pricing agents, accountants, attorneys,
underwriters, brokers and dealers, insurers and other persons in any
capacity deemed to be necessary or desirable; (iii) preparing all general
shareholder communications, including shareholder reports; (iv) conducting
shareholder relations; (v) maintaining the Fund's existence and its
records; (vi) during such times as shares are publicly offered, maintaining
the registration and qualification of the Portfolio's shares under federal
and state law; and (vii) investigating the development of and developing
and implementing, if appropriate, management and shareholder services
designed to enhance the value or convenience of the Portfolio as an
investment vehicle.
The Adviser shall also furnish such reports, evaluations, information or
analyses to the Fund as the Fund's Board of Trustees may request from time
to time or as the Adviser may deem to be desirable. The Adviser shall make
recommendations to the Fund's Board of Trustees with respect to Fund
policies, and shall carry out such policies as are adopted by the Trustees.
The Adviser shall, subject to review by the Board of Trustees, furnish such
other services as the Adviser shall from time to time determine to be
necessary or useful to perform its obligations under this Contract.
(c) The Adviser [ at its own expense,] shall place all
orders for the purchase and sale of portfolio securities for the
Portfolio's account with brokers or dealers selected by the Adviser, which
may include brokers or dealers affiliated with the Adviser. The Adviser
shall use its best efforts to seek to execute portfolio transactions at
prices which are advantageous to the Portfolio and at commission rates
which are reasonable in relation to the benefits received. In selecting
brokers or dealers qualified to execute a particular transaction, brokers
or dealers may be selected who also provide brokerage and research services
(as those terms are defined in Section 28(e) of the Securities Exchange Act
of 1934) to the Portfolio and/or the other accounts over which the Adviser
or its affiliates exercise investment discretion. The Adviser is
authorized to pay a broker or dealer who provides such brokerage and
research services a commission for executing a portfolio transaction for
the Portfolio which is in excess of the amount of commission another broker
or dealer would have charged for effecting that transaction if the Adviser
determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services provided by
such broker or dealer. This determination may be viewed in terms of either
that particular transaction or the overall responsibilities which the
Adviser and its affiliates have with respect to accounts over which they
exercise investment discretion. The Trustees of the Fund shall
periodically review the commissions paid by the Portfolio to determine if
the commissions paid over representative periods of time were reasonable in
relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors,
officers or otherwise and that directors, officers and stockholders of the
Adviser are or may be or become similarly interested in the Fund, and that
the Adviser may be or become interested in the Fund as a shareholder or
otherwise.
3. The Adviser will be compensated on the following basis for the services
and facilities to be furnished hereunder. The Adviser shall receive a
monthly management fee, payable (( monthly )) as soon as practicable
after the last day of each month, composed of a Group Fee and an Individual
Fund Fee [ Rate].
[ (i)] (((a) )) Group Fee Rate. The Group Fee Rate shall be based
upon the monthly average of the net assets of the registered investment
companies having Advisory and Service or Management Contracts with the
Adviser (computed in the manner set forth in the [ charter] ((fund's
Declaration )) of ((Trust or )) [ each] ((other ))
[ investment] ((organizational )) [ company] ((document) ))
determined as of the close of business on each business day throughout the
month. The Group [fee rate] ((Fee Rate)) shall be determined on a
cumulative basis pursuant to the following sche dule:
Average Net Assets Annualized Fee Rate (for each level)
0 - $ 3 billion .5200%
3 - 6 .4900
6 - 9 .4600
9 - 12 .4300
12 - 15 .4000
15 - 18 .3850
18 - 21 .3700
21 - 24 .3600
24 - 30 .3500
30 - 36 .3450
36 - 42 .3400
42 - 48 .3350
48 - 66 .3250
66 - 84 .3200
84 - 102 .3150
[Over 102] [.3100]
((102 - 138)) ((.3100))
((138 - 174)) ((.3050))
((174 - 210)) ((.3000))
((210 - 246)) ((.2950))
((246 - 282)) ((.2900))
((282 - 318)) ((.2850))
((318 - 354)) ((.2800))
((354 - 390)) ((.2750))
((390 - 426)) ((.2700))
((426 - 462)) ((.2650))
((462 - 498)) ((.2600))
((498 - 534)) ((.2550))
((Over 534)) ((.2500))
[(ii)] (((b) )) Individual Fund Fee Rate. The Individual Fund Fee
Rate shall be .09%.
[The sum of the Cumulative Group Fee rate, calculated as described
above to the nearest millionth, and the Individual Fund Fee rate shall
constitute the annual fee rate.]
[One-twelfth of the annual fee rate shall be applied to the average of
the net assets of the Portfolio (computed in the manner set forth in
Article X of the Declaration of Trust of the Fund) determined as of the
close of business on each business day throughout the month.]
((The sum of the Group Fee Rate, calculated as described above to the
nearest millionth, and the Individual Fund Fee Rate shall constitute the
Annual Management Fee Rate. One-twelfth of the Annual Management
Fee Rate shall be applied to the average of the net assets of the Portfolio
(computed in the manner set forth in the Fund's Declaration of Trust or
other organizational document) determined as of the close of business on
each business day throughout the month. ))
[In case of termination of this Contract during any month, the fee for
that month shall be reduced proportionately on the basis of the number of
business days during which it is in effect for that month. The basic fee
rate will be computed on the basis of and applied to net assets averaged
over that month ending on the last business day on which this Contract is
in effect.]
(((c) In case of termination of this Contract during any month, the fee
for that month shall be reduced proportionately on the basis of the number
of business days during which it is in effect, and the fee computed upon
the average net assets for the business days it is so in effect for that
month. ))
4. It is understood that the Portfolio will pay all its expenses,
[ other than those expressly stated to be payable by the Adviser
hereunder,] which expenses payable by the Portfolio shall include,
without limitation, (i) interest and taxes; (ii) brokerage commissions and
other costs in connection with the purchase or sale of securities and other
investment instruments; (iii) fees and expenses of the Fund's Trustees
other than those who are "interested persons" of the Fund or the Adviser;
(iv) legal and audit expenses; (v) custodian, registrar and transfer agent
fees and expenses; (vi) fees and expenses related to the registration and
qualification of the Fund and the Portfolio's shares for distribution under
state and federal securities laws; (vii) expenses of printing and mailing
reports and notices and proxy material to shareholders of the Portfolio;
(viii) all other expenses incidental to holding meetings of the Portfolio's
shareholders, including proxy solicitations therefor; (ix) a pro rata
share, based on relative net assets of the Portfolio and other registered
investment companies having Advisory and Service or Management Contracts
with the Adviser, of 50% of insurance premiums for fidelity and other
coverage; (x) its proportionate share of association membership dues; (xi)
expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (xii) expenses of printing
and mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Portfolio is a party
and the legal obligation which the Portfolio may have to indemnify the
Fund's Trustees and officers with respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and engage
in other activities, provided, however, that such other services and
activities do not, during the term of this Contract, interfere, in a
material manner, with the Adviser's ability to meet all of its obligations
with respect to rendering services to the Portfolio hereunder. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser,
the Adviser shall not be subject to liability to the Portfolio or to any
shareholder of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security ((or other
investment instrument.))
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Contract shall continue in force until July 31,
[ 1991] ((1998)) and indefinitely thereafter, but only so long as the
continuance after such date shall be specifically approved at least
annually by vote of the Trustees of the Fund or by vote of a majority of
the outstanding voting securities of the Portfolio.
(b) This Contract may be modified by mutual consent, such consent on the
part of the Fund to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 6, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to the Contract or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval.
(d) Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Contract, without payment of any
penalty, by action of its Trustees or Board of Directors, as the case may
be, or with respect to the Portfolio by vote of a majority of the
outstanding voting securities of the Portfolio. This Contract shall
terminate automatically in the event of its assignment.
7. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Declaration of Trust
(( or other organizational document )) and agrees that the obligations
assumed by the Fund pursuant to this Contract shall be limited in all cases
to the Portfolio and its assets, and the Adviser shall not seek
satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio or any other Portfolios of the Fund. In
addition, the Adviser shall not seek satisfaction of any such obligations
from the Trustees or any individual Trustee. The Adviser understands that
the rights and obligations of any Portfolio under the Declaration of Trust
(( or other organizational document )) are separate and distinct from
those of any and all other Portfolios.
((8. This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Massachusetts, without giving effect
to the choice of laws provisions thereof. ))
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, as now in effect or as
hereafter amended, and subject to such orders as may be granted by the
Securities and Exchange Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be signed in
their behalf by their respective officers thereunto duly authorized, and
their respective seals to be hereunto affixed, all as of the date written
above.
[SIGNATURE LINES OMITTED]
EXHIBIT 2
((Underlined)) disclosure will be added; [bracketed] disclosure will be
deleted.
FORM OF
MANAGEMENT CONTRACT
BETWEEN
FIDELITY HASTINGS STREET TRUST:
FIDELITY FIFTY
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
((AMENDMENT)) [AGREEMENT] made this ___ day of [July 1993] ((_____
1997, )) by and between Fidelity Hastings Street Trust, a Massachusetts
business trust which may issue one or more series of shares of beneficial
interest (hereinafter called the "Fund"), on behalf of Fidelity Fifty
(hereinafter called the "Portfolio"), and Fidelity Management & Research
Company, a Massachusetts corporation (hereinafter called the "Adviser")
((as set forth in its entirety below.))
((Required authorization and approval by shareholders and Trustees having
been obtained, the Fund, on behalf of the Portfolio, and the Adviser hereby
consent, pursuant to Paragraph 6 of the existing Management Contract dated
July 15, 1993, to a modification of said Contract in the manner set below.
The Amended Management Contract shall, when executed by duly authorized
officers of the Fund and Adviser, take effect on August 1, 1997 or the
first day of the month following approval.))
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision
of the Fund's Board of Trustees, direct the investments of the Portfolio in
accordance with the investment objective, policies and limitations as
provided in the Portfolio's Prospectus or other governing instruments, as
amended from time to time, the Investment Company Act of 1940 and rules
thereunder, as amended from time to time (the "1940 Act"), and such other
limitations as the Portfolio may impose by notice in writing to the
Adviser. The Adviser shall also furnish for the use of the Portfolio
office space and all necessary office facilities, equipment and personnel
for servicing the investments of the Portfolio; and shall pay the salaries
and fees of all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all personnel of
the Fund or the Adviser performing services relating to research,
statistical and investment activities. The Adviser is authorized, in its
discretion and without prior consultation with the Portfolio, to buy, sell,
lend and otherwise trade in any stocks, bonds and other securities and
investment instruments on behalf of the Portfolio. The investment policies
and all other actions of the Portfolio are and shall at all times be
subject to the control and direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for the
performance by its affiliates of) the management and administrative
services necessary for the operation of the Fund. The Adviser shall,
subject to the supervision of the Board of Trustees, perform various
services for the Portfolio, including but not limited to: (i) providing the
Portfolio with office space, equipment and facilities (which may be its
own) for maintaining its organization; (ii) on behalf of the Portfolio,
supervising relations with, and monitoring the performance of, custodians,
depositories, transfer and pricing agents, accountants, attorneys,
underwriters, brokers and dealers, insurers and other persons in any
capacity deemed to be necessary or desirable; (iii) preparing all general
shareholder communications, including shareholder reports; (iv) conducting
shareholder relations; (v) maintaining the Fund's existence and its
records; (vi) during such times as shares are publicly offered, maintaining
the registration and qualification of the Portfolio's shares under federal
and state law; and (vii) investigating the development of and developing
and implementing, if appropriate, management and shareholder services
designed to enhance the value or convenience of the Portfolio as an
investment vehicle.
The Adviser shall also furnish such reports, evaluations, information or
analyses to the Fund as the Fund's Board of Trustees may request from time
to time or as the Adviser may deem to be desirable. The Adviser shall make
recommendations to the Fund's Board of Trustees with respect to Fund
policies, and shall carry out such policies as are adopted by the Trustees.
The Adviser shall, subject to review by the Board of Trustees, furnish such
other services as the Adviser shall from time to time determine to be
necessary or useful to perform its obligations under this Contract.
(c) The Adviser [ at its own expense,] shall place all
orders for the purchase and sale of portfolio securities for the
Portfolio's account with brokers or dealers selected by the Adviser, which
may include brokers or dealers affiliated with the Adviser. The Adviser
shall use its best efforts to seek to execute portfolio transactions at
prices which are advantageous to the Portfolio and at commission rates
which are reasonable in relation to the benefits received. In selecting
brokers or dealers qualified to execute a particular transaction, brokers
or dealers may be selected who also provide brokerage and research services
(as those terms are defined in Section 28(e) of the Securities Exchange Act
of 1934) to the Portfolio and/or the other accounts over which the Adviser
or its affiliates exercise investment discretion. The Adviser is
authorized to pay a broker or dealer who provides such brokerage and
research services a commission for executing a portfolio transaction for
the Portfolio which is in excess of the amount of commission another broker
or dealer would have charged for effecting that transaction if the Adviser
determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services provided by
such broker or dealer. This determination may be viewed in terms of either
that particular transaction or the overall responsibilities which the
Adviser and its affiliates have with respect to accounts over which they
exercise investment discretion. The Trustees of the Fund shall
periodically review the commissions paid by the Portfolio to determine if
the commissions paid over representative periods of time were reasonable in
relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors,
officers or otherwise and that directors, officers and stockholders of the
Adviser are or may be or become similarly interested in the Fund, and that
the Adviser may be or become interested in the Fund as a shareholder or
otherwise.
3. The Adviser will be compensated on the following basis for the services
and facilities to be furnished hereunder. The Adviser shall receive a
monthly management fee, payable monthly as soon as practicable after the
last day of each month, composed of a Basic Fee and a Performance
Adjustment. The Performance Adjustment is added to or subtracted from the
Basic Fee depending on whether the Portfolio experienced better or worse
performance than the Standard & Poor's [Composite Price] ((500))
Index (the "Index"). The Performance Adjustment is not cumulative. An
increased fee will result even though the performance of the Portfolio over
some period of time shorter than the performance period has been behind
that of the Index, and, conversely, a reduction in the fee will be made for
a month even though the performance of the Portfolio over some period of
time shorter than the performance period has been ahead of that of the
Index. The Basic Fee and the Performance Adjustment will be computed as
follows:
(a) Basic Fee Rate: The annual Basic Fee Rate shall be the sum of the
Group Fee Rate and the Individual Fund Fee Rate calculated to the nearest
millionth decimal place as follows:
(i) Group Fee Rate. The Group Fee Rate shall be based upon the monthly
average of the net assets of the registered investment companies having
Advisory and Service or Management Contracts with the Adviser (computed in
the manner set forth in the [ charter] ((fund's Declaration )) of
(( Trust or )) [ each] ((other )) [ investment]
((organizational )) [ company] ((document) )) determined as of the
close of business on each business day throughout the month. The Group Fee
Rate shall be determined on a cumulative basis pursuant to the following
schedule:
Average Net Assets Annualized Fee Rate (for each level)
0 - $ 3 billion .5200%
3 - 6 .4900
6 - 9 .4600
9 - 12 .4300
12 - 15 .4000
15 - 18 .3850
18 - 21 .3700
21 - 24 .3600
24 - 30 .3500
30 - 36 .3450
36 - 42 .3400
42 - 48 .3350
48 - 66 .3250
66 - 84 .3200
84 - 102 .3150
102 - 138 .3100
138 - 174 .3050
[Over 174] [.3000]
((174 - 210)) ((.3000))
((210 - 246)) ((.2950))
((246 - 282)) ((.2900))
((282 - 318)) ((.2850))
((318 - 354)) ((.2800))
((354 - 390)) ((.2750))
((390 - 426)) ((.2700))
((426 - 462)) ((.2650))
((462 - 498)) ((.2600))
((498 - 534)) ((.2550))
((Over 534)) ((.2500))
(ii) Individual Fund Fee Rate. The Individual Fund Fee Rate shall be
.30%.
(b) Basic Fee. One-twelfth of the Basic Fee Rate shall be applied to the
average of the net assets of the Portfolio (computed in the manner set
forth in the Fund's Declaration of Trust or other organizational document)
determined as of the close of business on each business day throughout the
month. The resulting dollar amount comprises the Basic Fee.
(c) Performance Adjustment Rate: The Performance Adjustment Rate is 0.02%
for each percentage point [rounded to the nearer point (the higher point
if exactly one-half point)] (((the performance of the Portfolio and the
Index each being calculated to the nearest .01%))) that the Portfolio's
investment performance for the performance period was better or worse
than the record of the Index as then constituted. The maximum performance
adjustment rate is 0.20%.
The performance period will commence with the first day of the first full
month following the Portfolio's commencement of operations. During the
first eleven months of the performance period for the Portfolio, there will
be no performance adjustment. Starting with the twelfth month of the
performance period, the performance adjustment will take effect. Following
the twelfth month a new month will be added to the performance period until
the performance period equals 36 months. Thereafter the performance period
will consist of the current month plus the previous 35 months.
The Portfolio's investment performance will be measured by comparing (i)
the opening net asset value of one share of the Portfolio on the first
business day of the performance period with (ii) the closing net asset
value of one share of the Portfolio as of the last business day of such
period. In computing the investment performance of the Portfolio and the
investment record of the Index, distributions of realized capital gains,
the value of capital gains taxes per share paid or payable on undistributed
realized long-term capital gains accumulated to the end of such period and
dividends paid out of investment income on the part of the Portfolio, and
all cash distributions of the [companies] (( securities )) [whose]
(( included )) [stocks comprise] (( in )) the Index, will be
treated as reinvested in accordance with Rule 205-1 or any other applicable
rules under the Investment Advisers Act of 1940, as the same from time to
time may be amended.
(d) Performance Adjustment. One-twelfth of the annual Performance
Adjustment Rate will be applied to the average of the net assets of the
Portfolio (computed in the manner set forth in the Fund's Declaration of
Trust or other organizational document) determined as of the close of
business on each business day throughout the month and the performance
period.
(e) In case of termination of this Contract during any month, the fee for
that month shall be reduced proportionately on the basis of the number of
business days during which it is in effect for that month. The Basic Fee
Rate will be computed on the basis of and applied to net assets averaged
over that month ending on the last business day on which this Contract is
in effect. The amount of this Performance Adjustment to the Basic Fee will
be computed on the basis of and applied to net assets averaged over the 36
month period ending on the last business day on which this Contract is in
effect provided that if this Contract has been in effect less than 36
months, the computation will be made on the basis of the period of time
during which it has been in effect.
4. It is understood that the Portfolio will pay all its expenses,
[ other than those expressly stated to be payable by the Adviser
hereunder,] which expenses payable by the Portfolio shall include,
without limitation, (i) interest and taxes; (ii) brokerage commissions and
other costs in connection with the purchase or sale of securities and other
investment instruments; (iii) fees and expenses of the Fund's Trustees
other than those who are "interested persons" of the Fund or the Adviser;
(iv) legal and audit expenses; (v) custodian, registrar and transfer agent
fees and expenses; (vi) fees and expenses related to the registration and
qualification of the Fund and the Portfolio's shares for distribution under
state and federal securities laws; (vii) expenses of printing and mailing
reports and notices and proxy material to shareholders of the Portfolio;
(viii) all other expenses incidental to holding meetings of the Portfolio's
shareholders, including proxy solicitations therefor; (ix) a pro rata
share, based on relative net assets of the Portfolio and other registered
investment companies having Advisory and Service or Management Contracts
with the Adviser, of 50% of insurance premiums for fidelity and other
coverage; (x) its proportionate share of association membership dues; (xi)
expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (xii) expenses of printing
and mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Portfolio is a party
and the legal obligation which the Portfolio may have to indemnify the
Fund's Trustees and officers with respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and engage
in other activities, provided, however, that such other services and
activities do not, during the term of this Contract, interfere, in a
material manner, with the Adviser's ability to meet all of its obligations
with respect to rendering services to the Portfolio hereunder. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser,
the Adviser shall not be subject to liability to the Portfolio or to any
shareholder of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security (( or other
investment instrument. ))
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Contract shall continue in force until July 31,
[1995] (( 1998 )) and indefinitely thereafter, but only so long as
the continuance after such date shall be specifically approved at least
annually by vote of the Trustees of the Fund or by vote of a majority of
the outstanding voting securities of the Portfolio.
(b) This Contract may be modified by mutual consent, such consent on the
part of the Fund to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 6, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to the Contract or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval.
(d) Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Contract, without payment of any
penalty, by action of its Trustees or Board of Directors, as the case may
be, or with respect to the Portfolio by vote of a majority of the
outstanding voting securities of the Portfolio. This Contract shall
terminate automatically in the event of its assignment.
7. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Declaration of Trust or
other organizational document and agrees that the obligations assumed by
the Fund pursuant to this Contract shall be limited in all cases to the
Portfolio and its assets, and the Adviser shall not seek satisfaction of
any such obligation from the shareholders or any shareholder of the
Portfolio or any other Portfolios of the Fund. In addition, the Adviser
shall not seek satisfaction of any such obligations from the Trustees or
any individual Trustee. The Adviser understands that the rights and
obligations of any Portfolio under the Declaration of Trust or other
organizational document are separate and distinct from those of any and all
other Portfolios.
8. This Agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, as now in effect or as
hereafter amended, and subject to such orders as may be granted by the
Securities and Exchange Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be signed in
their behalf by their respective officers thereunto duly authorized, and
their respective seals to be hereunto affixed, all as of the date written
above.
[SIGNATURE LINES OMITTED]
EXHIBIT 3
((Underlined)) disclosure will be added; [bracketed] disclosure will be
deleted.
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
[FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.]
[AND]
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
AND
(( FIDELITY HASTINGS STREET TRUST ON BEHALF OF FIDELITY FUND ))
AGREEMENT made this ___ day of [March, 1990] ((_____, 1997,)) by and
between Fidelity Management & Research (U.K.) Inc., [a Massachusetts
corporation with principal offices at 82 Devonshire Street, Boston,
Massachusetts ] (hereinafter called the "Sub-Adviser") [, and]
Fidelity Management & Research Company, a Massachusetts corporation with
principal offices at 82 Devonshire Street, Boston, Massachusetts
(hereinafter called the "Adviser"). ((and Fidelity Hastings Street Trust, a
Massachusetts business trust which may issue one or more series of shares
of beneficial interest (hereinafter called the "Trust") on behalf
of Fidelity Fund (hereinafter called the "Portfolio"). ))
[WHEREAS the Adviser has entered into a Management Contract with Fidelity
Fund, a Massachusetts business trust which may issue one or more series of
shares of beneficial interest (hereinafter called the "Fund"), on behalf of
its single existing series of shares of beneficial interest, Fidelity Fund
(hereinafter called the "Portfolio"), pursuant to which the Adviser is to
act as investment adviser to the Portfolio, and]
((WHEREAS the Trust and the Advisor have entered into a Management
Contract on behalf of the Portfolio, pursuant to which the Advisor is to
act as investment manager of the Portfolio; and ))
[ WHEREAS the Sub-Adviser has personnel in Western Europe and was formed
for the purpose of researching and compiling information and
recommendations with respect to the economies of various countries and
issuers located outside of North America, principally in Western
Europe. ]
((WHEREAS the Sub-Advisor and its subsidiaries and other affiliated
persons have personnel in various locations throughout the world and have
been formed in part for the purpose of researching and compiling
information and recommendations with respect to the economies of various
countries, and securities of issuers located in such countries, and
providing investment advisory services in connection therewith; ))
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, (( the Trust, )) the Advisor and the
Sub-Advisor agree as follows:
((1. Duties: The Advisor may, in its discretion,
appoint the Sub-Advisor to perform one or more of the following services
with respect to all or a portion of the investments of the Portfolio.
The services and the portion of the investments of the Portfolio to be
advised or managed by the Sub-Advisor shall be as agreed upon from time to
time by the Advisor and the Sub-Advisor. The Sub-Advisor shall pay the
salaries and fees of all personnel of the Sub-Advisor performing services
for the Portfolio relating to research, statistical and investment
activities. ))
[1] (((a) INVESTMENT ADVICE: If and to the extent requested by
the Advisor, the)) [The] Sub-Advisor shall [act as an investment consultant
to the Adviser and] ((provide investment advice to the Portfolio and the
Advisor with respect to all or a portion of the investments of the
Portfolio, and in connection with such advice)) shall furnish ((the
Portfolio and)) the Advisor ((such)) factual information, research reports
and investment recommendations [relating to non-U.S. issuers of securities
located in, and the economies of, various countries outside the U.S., all]
as the Advisor may reasonably require. Such information [shall]
((may)) include written and oral reports and analyses.
(((b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Advisor, the Sub-Advisor shall, subject to the supervision of the Advisor,
manage all or a portion of the investments of the Portfolio in accordance
with the investment objective, policies and limitations provided in the
Portfolio's Prospectus or other governing instruments, as amended from time
to time, the Investment Company Act of 1940 (the "1940 Act") and rules
thereunder, as amended from time to time, and such other limitations as the
Trust or Advisor may impose with respect to the Portfolio by notice to the
Sub-Advisor. With respect to the portion of the investments of the
Portfolio under its management, the Sub-Advisor is authorized to make
investment decisions on behalf of the Portfolio with regard to any stock,
bond, other security or investment instrument, and to place orders for the
purchase and sale of such securities through such broker-dealers as the
Sub-Advisor may select. The Sub-Advisor may also be authorized, but
only to the extent such duties are delegated in writing by the Advisor, to
provide additional investment management services to the Portfolio,
including but not limited to services such as managing foreign currency
investments, purchasing and selling or writing futures and options
contracts, borrowing money or lending securities on behalf of the
Portfolio. All investment management and any other activities of
the Sub-Advisor shall at all times be subject to the control and direction
of the Advisor and the Trust's Board of Trustees. ))
(((c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform
any or all of the services contemplated by this Agreement directly or
through such of its subsidiaries or other affiliated persons as the
Sub-Advisor shall determine; provided, however, that performance of such
services through such subsidiaries or other affiliated persons shall have
been approved by the Trust to the extent required pursuant to the 1940 Act
and rules thereunder. ))
((2. Information to be Provided to the Trust and the
Advisor: The Sub-Advisor shall furnish such reports, evaluations,
information or analyses to the Trust and the Advisor as the Trust's Board
of Trustees or the Advisor may reasonably request from time to time, or as
the Sub-Advisor may deem to be desirable. ))
((3. Brokerage: In connection with the services
provided under subparagraph (b) of paragraph 1 of this Agreement, the
Sub-Advisor shall place all orders for the purchase and sale of portfolio
securities for the Portfolio's account with brokers or dealers selected by
the Sub-Advisor, which may include brokers or dealers affiliated with the
Advisor or Sub-Advisor. The Sub-Advisor shall use its best efforts
to seek to execute portfolio transactions at prices which are advantageous
to the Portfolio and at commission rates which are reasonable in relation
to the benefits received. In selecting brokers or dealers qualified
to execute a particular transaction, brokers or dealers may be selected who
also provide brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of l934) to the Portfolio
and/or to the other accounts over which the Sub-Advisor or Advisor exercise
investment discretion. The Sub-Advisor is authorized to pay a
broker or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for the Portfolio which is
in excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Sub-Advisor determines in
good faith that such amount of commission is reasonable in relation to the
value of the brokerage and research services provided by such broker or
dealer. This determination may be viewed in terms of either that
particular transaction or the overall responsibilities which the
Sub-Advisor has with respect to accounts over which it exercises investment
discretion. The Trustees of the Trust shall periodically review the
commissions paid by the Portfolio to determine if the commissions paid over
representative periods of time were reasonable in relation to the benefits
to the Portfolio. ))
[2] ((4. Compensation:)) The [Sub-] ((Advisor)) [will
be compensated by the Adviser] ((shall compensate the Sub-Advisor)) on the
following basis for the services to be furnished hereunder. [the
Adviser agrees to pay the Sub-Adviser a monthly fee equal to 110% of the
Sub-Adviser's costs incurred in connection with the Agreement, said costs
to be determined in relation to the assets of the Portfolio that benefit
from the services of the Sub-Adviser.]
(((a) INVESTMENT ADVISORY FEE: For services provided under
subparagraph (a) of paragraph 1 of this Agreement, the Advisor agrees to
pay the Sub-Advisor a monthly Sub-Advisory Fee. The Sub-Advisory
Fee shall be equal to 110% of the Sub-Advisor's costs incurred in
connection with rendering the services referred to in subparagraph (a) of
paragraph 1 of this Agreement. The Sub-Advisory Fee shall not be
reduced to reflect expense reimbursements or fee waivers by the Advisor, if
any, in effect from time to time. ))
(((b) INVESTMENT MANAGEMENT FEE: For services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Advisor agrees to
pay the Sub-Advisor a monthly Investment Management Fee. The
Investment Management Fee shall be equal to: (i) 50% of the monthly
management fee rate (including performance adjustments, if any) that the
Portfolio is obligated to pay the Advisor under its Management Contract
with the Advisor, multiplied by: (ii) the fraction equal to the net assets
of the Portfolio as to which the Sub-Advisor shall have provided investment
management services divided by the net assets of the Portfolio for that
month. If in any fiscal year the aggregate expenses of the
Portfolio exceed any applicable expense limitation imposed by any state or
federal securities laws or regulations, and the Advisor waives all or a
portion of its management fee or reimburses the Portfolio for expenses to
the extent required to satisfy such limitation, the Investment Management
Fee paid to the Sub-Advisor will be reduced by 50% of the amount of such
waivers or reimbursements multiplied by the fraction determined in
(ii). If the Sub-Advisor reduces its fees to reflect such waivers
or reimbursements and the Advisor subsequently recovers all or any portion
of such waivers or reimbursements, then the Sub-Advisor shall be entitled
to receive from the Advisor a proportionate share of the amount
recovered. To the extent that waivers and reimbursements by the
Advisor required by such limitations are in excess of the Advisor's
management fee, the Investment Management Fee paid to the Sub-Advisor will
be reduced to zero for that month, but in no event shall the Sub-Advisor be
required to reimburse the Advisor for all or a portion of such excess
reimbursements. ))
(((c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall
have provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph (1) for
the same portion of the investments of the Portfolio for the same period,
the fees paid to the Sub-Advisor with respect to such investments shall be
calculated exclusively under subparagraph (b) of this paragraph 4. ))
((5. Expenses: It is understood that the Portfolio will pay all
of its expenses other than those expressly stated to be payable by the
Sub-Advisor hereunder or by the Advisor under the Management Contract with
the Portfolio, which expenses payable by the Portfolio shall include,
without limitation, (i) interest and taxes; (ii) brokerage commissions and
other costs in connection with the purchase or sale of securities and other
investment instruments; (iii) fees and expenses of the Trust's Trustees
other than those who are "interested persons" of the Trust, the Sub-Advisor
or the Advisor; (iv) legal and audit expenses; (v) custodian, registrar and
transfer agent fees and expenses; (vi) fees and expenses related to the
registration and qualification of the Trust and the Portfolio's shares for
distribution under state and federal securities laws; (vii) expenses of
printing and mailing reports and notices and proxy material to shareholders
of the Portfolio; (viii) all other expenses incidental to holding meetings
of the Portfolio's shareholders, including proxy solicitations therefore;
(ix) a pro rata share, based on relative net assets of the Portfolio and
other registered investment companies having Advisory and Service or
Management Contracts with the Advisor, of 50% of insurance premiums for
fidelity and other coverage; (x) its proportionate share of association
membership dues; (xi) expenses of typesetting for printing Prospectuses and
Statements of Additional Information and supplements thereto; (xii)
expenses of printing and mailing Prospectuses and Statements of Additional
Information and supplements thereto sent to existing shareholders; and
(xiii) such non-recurring or extraordinary expenses as may arise, including
those relating to actions, suits or proceedings to which the Portfolio is a
party and the legal obligation which the Portfolio may have to indemnify
the Trust's Trustees and officers with respect thereto. ))
[3] ((6. Interested Persons:)) It is understood that
Trustees, officers, and shareholders of the [Fund] ((Trust)) are or may be
or become interested in the Advisor [and] ((or)) the Sub-Advisor as
directors, officers or otherwise and that directors, officers and
stockholders of the Advisor [and] ((or)) the Sub-Advisor are or may be or
become similarly interested in the [Fund] ((Trust,)) and that the Advisor
or the Sub-Advisor may be or become interested in the [Fund] ((Trust ))
as a shareholder or otherwise.
[4 The Sub-Adviser shall for all purposes be an independent contractor
and not an agent or employee of the Adviser or the Fund . The
Sub-Adviser shall have no authority to act for, represent, bind or obligate
the Adviser or the Fund, and shall in no event have discretion to invest or
reinvest assets held by the Portfolio. ]
[5] ((7. Services to Other Companies or Accounts:)) The
services of the Sub-Advisor to the Advisor are not to be deemed to be
exclusive, the Sub-Advisor being free to render services to others and
engage in other activities, provided, however, that such other services and
activities do not, during the term of this Agreement, interfere, in a
material manner, with the Sub-Advisor's ability to meet all of its
obligations [with respect to rendering investment advice] hereunder.
((The Sub-Advisor shall for all purposes be an independent contractor
and not an agent or employee of the Advisor or the Trust. ))
((8. Standard of Care:)) In the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Sub-Advisor, the Sub-Advisor shall not be
subject to liability to the Advisor, the [Fund] ((Trust)) or to any
shareholder of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security.
[6] ((9. Duration and Termination of Agreement; Amendments: ))
(a) Subject to prior termination as provided in subparagraph (d) of
this paragraph [6] ((9,)) this Agreement shall continue in force until July
31, [1991] ((1998)) and indefinitely thereafter, but only so long as the
continuance after such period shall be specifically approved at least
annually by vote of the [Fund's] ((Trust's)) Board of Trustees or by vote
of a majority of the outstanding voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor, the
Sub-Advisor and the Portfolio, such consent on the part of the Portfolio to
be authorized by vote of a majority of the outstanding voting securities of
the Portfolio.
(c) In addition to the requirements of subparagraphs (a) and (b) of this
paragraph [6] ((9,)) the terms of any continuance or modification of this
Agreement must have been approved by the vote of a majority of those
Trustees of the [Fund] ((Trust)) who are not parties to [such] ((this))
Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval.
(d) Either the Advisor, the Sub-Advisor or the Portfolio may, at any time
on sixty (60) days' prior written notice to the other parties, terminate
this Agreement, without payment of any penalty, by action of its Board of
Trustees or Directors, or ((with respect to the Portfolio)) by vote of a
majority of its outstanding voting securities. This Agreement shall
terminate automatically in the event of its assignment.
[7] ((10. Limitation of Liability:)) The Sub-Advisor is
hereby expressly put on notice of the limitation of shareholder liability
as set forth in the Declaration of Trust [of the Fund] ((or other
organizational document of the Trust)) and agrees that any obligations of
the [Fund] ((Trust)) or the Portfolio arising in connection with this
Agreement shall be limited in all cases to the Portfolio and its assets,
and the Sub-Advisor shall not seek satisfaction of any such obligation from
the shareholders or any shareholder of the Portfolio. Nor shall the
Sub-Advisor seek satisfaction of any such obligation from the Trustees or
any individual Trustee.
((11. Governing Law: This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of
Massachusetts, without giving effect to the choice of laws provisions
thereof. ))
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested persons,"
when used herein, shall have the respective meanings specified in the
[Investment Company Act of 1940] ((1940 Act)) as now in effect or as
hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized((, and their respective seals to be hereunto affixed,)) all as
of the date written above.
[SIGNATURE LINES OMITTED]
EXHIBIT 4
((Underlined)) disclosure will be added; [bracketed] disclosure will be
deleted.
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
[FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC.]
[AND]
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC.
AND
(( FIDELITY HASTINGS STREET TRUST ON BEHALF OF FIDELITY FUND ))
AGREEMENT made this ___ day of [March, 1990] ((_____, 1997,)) by and
between Fidelity Management & Research (Far East) Inc., [a Massachusetts
corporation with principal offices at 82 Devonshire Street, Boston,
Massachusetts ] (hereinafter called the "Sub-Adviser") [, and]
Fidelity Management & Research Company, a Massachusetts corporation with
principal offices at 82 Devonshire Street, Boston, Massachusetts
(hereinafter called the "Adviser"). ((and Fidelity Hastings Street Trust, a
Massachusetts business trust which may issue one or more series of shares
of beneficial interest (hereinafter called the "Trust") on behalf
of Fidelity Fund (hereinafter called the "Portfolio"). ))
[WHEREAS the Adviser has entered into a Management Contract with Fidelity
Fund, a Massachusetts business trust which may issue one or more series of
shares of beneficial interest (hereinafter called the "Fund"), on behalf of
its single existing series of shares of beneficial interest, Fidelity Fund
(hereinafter called the "Portfolio"), pursuant to which the Adviser is to
act as investment adviser to the Portfolio, and]
((WHEREAS the Trust and the Advisor have entered into a Management
Contract on behalf of the Portfolio, pursuant to which the Advisor is to
act as investment manager of the Portfolio; and ))
[ WHEREAS the Sub-Adviser has personnel in Asia and the Pacific Basin
and was formed for the purpose of researching and compiling information and
recommendations with respect to the economies of various countries and
issuers located outside of North America, principally in Asia and the
Pacific Basin. ]
((WHEREAS the Sub-Advisor and its subsidiaries and other affiliated
persons have personnel in various locations throughout the world and have
been formed in part for the purpose of researching and compiling
information and recommendations with respect to the economies of various
countries, and securities of issuers located in such countries, and
providing investment advisory services in connection therewith; ))
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, (( the Trust, )) the Advisor and the
Sub-Advisor agree as follows:
((1. Duties: The Advisor may, in its discretion,
appoint the Sub-Advisor to perform one or more of the following services
with respect to all or a portion of the investments of the Portfolio.
The services and the portion of the investments of the Portfolio to be
advised or managed by the Sub-Advisor shall be as agreed upon from time to
time by the Advisor and the Sub-Advisor. The Sub-Advisor shall pay the
salaries and fees of all personnel of the Sub-Advisor performing services
for the Portfolio relating to research, statistical and investment
activities. ))
[1] (((a) INVESTMENT ADVICE: If and to the extent requested by
the Advisor, the)) [The] Sub-Advisor shall [act as an investment consultant
to the Adviser and] ((provide investment advice to the Portfolio and the
Advisor with respect to all or a portion of the investments of the
Portfolio, and in connection with such advice)) shall furnish ((the
Portfolio and)) the Advisor ((such)) factual information, research reports
and investment recommendations [relating to non-U.S. issuers of securities
located in, and the economies of, various countries outside the U.S., all]
as the Advisor may reasonably require. Such information [shall]
((may)) include written and oral reports and analyses.
(((b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Advisor, the Sub-Advisor shall, subject to the supervision of the Advisor,
manage all or a portion of the investments of the Portfolio in accordance
with the investment objective, policies and limitations provided in the
Portfolio's Prospectus or other governing instruments, as amended from time
to time, the Investment Company Act of 1940 (the "1940 Act") and rules
thereunder, as amended from time to time, and such other limitations as the
Trust or Advisor may impose with respect to the Portfolio by notice to the
Sub-Advisor. With respect to the portion of the investments of the
Portfolio under its management, the Sub-Advisor is authorized to make
investment decisions on behalf of the Portfolio with regard to any stock,
bond, other security or investment instrument, and to place orders for the
purchase and sale of such securities through such broker-dealers as the
Sub-Advisor may select. The Sub-Advisor may also be authorized, but
only to the extent such duties are delegated in writing by the Advisor, to
provide additional investment management services to the Portfolio,
including but not limited to services such as managing foreign currency
investments, purchasing and selling or writing futures and options
contracts, borrowing money or lending securities on behalf of the
Portfolio. All investment management and any other activities of
the Sub-Advisor shall at all times be subject to the control and direction
of the Advisor and the Trust's Board of Trustees. ))
(((c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform
any or all of the services contemplated by this Agreement directly or
through such of its subsidiaries or other affiliated persons as the
Sub-Advisor shall determine; provided, however, that performance of such
services through such subsidiaries or other affiliated persons shall have
been approved by the Trust to the extent required pursuant to the 1940 Act
and rules thereunder. ))
((2. Information to be Provided to the Trust and the
Advisor: The Sub-Advisor shall furnish such reports, evaluations,
information or analyses to the Trust and the Advisor as the Trust's Board
of Trustees or the Advisor may reasonably request from time to time, or as
the Sub-Advisor may deem to be desirable. ))
((3. Brokerage: In connection with the services
provided under subparagraph (b) of paragraph 1 of this Agreement, the
Sub-Advisor shall place all orders for the purchase and sale of portfolio
securities for the Portfolio's account with brokers or dealers selected by
the Sub-Advisor, which may include brokers or dealers affiliated with the
Advisor or Sub-Advisor. The Sub-Advisor shall use its best efforts
to seek to execute portfolio transactions at prices which are advantageous
to the Portfolio and at commission rates which are reasonable in relation
to the benefits received. In selecting brokers or dealers qualified
to execute a particular transaction, brokers or dealers may be selected who
also provide brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of l934) to the Portfolio
and/or to the other accounts over which the Sub-Advisor or Advisor exercise
investment discretion. The Sub-Advisor is authorized to pay a
broker or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for the Portfolio which is
in excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Sub-Advisor determines in
good faith that such amount of commission is reasonable in relation to the
value of the brokerage and research services provided by such broker or
dealer. This determination may be viewed in terms of either that
particular transaction or the overall responsibilities which the
Sub-Advisor has with respect to accounts over which it exercises investment
discretion. The Trustees of the Trust shall periodically review the
commissions paid by the Portfolio to determine if the commissions paid over
representative periods of time were reasonable in relation to the benefits
to the Portfolio. ))
[2] ((4. Compensation:)) The [Sub-] ((Advisor)) [will
be compensated by the Adviser] ((shall compensate the Sub-Advisor)) on the
following basis for the services to be furnished hereunder. [the
Adviser agrees to pay the Sub-Adviser a monthly fee equal to 110% of the
Sub-Adviser's costs incurred in connection with the Agreement, said costs
to be determined in relation to the assets of the Portfolio that benefit
from the services of the Sub-Adviser.]
(((a) INVESTMENT ADVISORY FEE: For services provided under
subparagraph (a) of paragraph 1 of this Agreement, the Advisor agrees to
pay the Sub-Advisor a monthly Sub-Advisory Fee. The Sub-Advisory
Fee shall be equal to 110% of the Sub-Advisor's costs incurred in
connection with rendering the services referred to in subparagraph (a) of
paragraph 1 of this Agreement. The Sub-Advisory Fee shall not be
reduced to reflect expense reimbursements or fee waivers by the Advisor, if
any, in effect from time to time. ))
(((b) INVESTMENT MANAGEMENT FEE: For services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Advisor agrees to
pay the Sub-Advisor a monthly Investment Management Fee. The
Investment Management Fee shall be equal to: (i) 50% of the monthly
management fee rate (including performance adjustments, if any) that the
Portfolio is obligated to pay the Advisor under its Management Contract
with the Advisor, multiplied by: (ii) the fraction equal to the net assets
of the Portfolio as to which the Sub-Advisor shall have provided investment
management services divided by the net assets of the Portfolio for that
month. If in any fiscal year the aggregate expenses of the
Portfolio exceed any applicable expense limitation imposed by any state or
federal securities laws or regulations, and the Advisor waives all or a
portion of its management fee or reimburses the Portfolio for expenses to
the extent required to satisfy such limitation, the Investment Management
Fee paid to the Sub-Advisor will be reduced by 50% of the amount of such
waivers or reimbursements multiplied by the fraction determined in
(ii). If the Sub-Advisor reduces its fees to reflect such waivers
or reimbursements and the Advisor subsequently recovers all or any portion
of such waivers or reimbursements, then the Sub-Advisor shall be entitled
to receive from the Advisor a proportionate share of the amount
recovered. To the extent that waivers and reimbursements by the
Advisor required by such limitations are in excess of the Advisor's
management fee, the Investment Management Fee paid to the Sub-Advisor will
be reduced to zero for that month, but in no event shall the Sub-Advisor be
required to reimburse the Advisor for all or a portion of such excess
reimbursements. ))
(((c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall
have provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph (1) for
the same portion of the investments of the Portfolio for the same period,
the fees paid to the Sub-Advisor with respect to such investments shall be
calculated exclusively under subparagraph (b) of this paragraph 4. ))
((5. Expenses: It is understood that the Portfolio will pay all
of its expenses other than those expressly stated to be payable by the
Sub-Advisor hereunder or by the Advisor under the Management Contract with
the Portfolio, which expenses payable by the Portfolio shall include,
without limitation, (i) interest and taxes; (ii) brokerage commissions and
other costs in connection with the purchase or sale of securities and other
investment instruments; (iii) fees and expenses of the Trust's Trustees
other than those who are "interested persons" of the Trust, the Sub-Advisor
or the Advisor; (iv) legal and audit expenses; (v) custodian, registrar and
transfer agent fees and expenses; (vi) fees and expenses related to the
registration and qualification of the Trust and the Portfolio's shares for
distribution under state and federal securities laws; (vii) expenses of
printing and mailing reports and notices and proxy material to shareholders
of the Portfolio; (viii) all other expenses incidental to holding meetings
of the Portfolio's shareholders, including proxy solicitations therefore;
(ix) a pro rata share, based on relative net assets of the Portfolio and
other registered investment companies having Advisory and Service or
Management Contracts with the Advisor, of 50% of insurance premiums for
fidelity and other coverage; (x) its proportionate share of association
membership dues; (xi) expenses of typesetting for printing Prospectuses and
Statements of Additional Information and supplements thereto; (xii)
expenses of printing and mailing Prospectuses and Statements of Additional
Information and supplements thereto sent to existing shareholders; and
(xiii) such non-recurring or extraordinary expenses as may arise, including
those relating to actions, suits or proceedings to which the Portfolio is a
party and the legal obligation which the Portfolio may have to indemnify
the Trust's Trustees and officers with respect thereto. ))
[3] ((6. Interested Persons:)) It is understood that
Trustees, officers, and shareholders of the [Fund] ((Trust)) are or may be
or become interested in the Advisor [and] ((or)) the Sub-Advisor as
directors, officers or otherwise and that directors, officers and
stockholders of the Advisor [and] ((or)) the Sub-Advisor are or may be or
become similarly interested in the [Fund] ((Trust,)) and that the Advisor
or the Sub-Advisor may be or become interested in the [Fund] ((Trust ))
as a shareholder or otherwise.
[4 The Sub-Adviser shall for all purposes be an independent contractor
and not an agent or employee of the Adviser or the Fund . The
Sub-Adviser shall have no authority to act for, represent, bind or obligate
the Adviser or the Fund, and shall in no event have discretion to invest or
reinvest assets held by the Portfolio. ]
[5] ((7. Services to Other Companies or Accounts:)) The
services of the Sub-Advisor to the Advisor are not to be deemed to be
exclusive, the Sub-Advisor being free to render services to others and
engage in other activities, provided, however, that such other services and
activities do not, during the term of this Agreement, interfere, in a
material manner, with the Sub-Advisor's ability to meet all of its
obligations [with respect to rendering investment advice] hereunder.
((The Sub-Advisor shall for all purposes be an independent contractor
and not an agent or employee of the Advisor or the Trust. ))
((8. Standard of Care:)) In the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Sub-Advisor, the Sub-Advisor shall not be
subject to liability to the Advisor, the [Fund] ((Trust)) or to any
shareholder of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security.
[6] ((9. Duration and Termination of Agreement; Amendments: ))
(a) Subject to prior termination as provided in subparagraph (d) of
this paragraph [6] ((9,)) this Agreement shall continue in force until July
31, [1991] ((1998)) and indefinitely thereafter, but only so long as the
continuance after such period shall be specifically approved at least
annually by vote of the [Fund's] ((Trust's)) Board of Trustees or by vote
of a majority of the outstanding voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor, the
Sub-Advisor and the Portfolio, such consent on the part of the Portfolio to
be authorized by vote of a majority of the outstanding voting securities of
the Portfolio.
(c) In addition to the requirements of subparagraphs (a) and (b) of this
paragraph [6] ((9,)) the terms of any continuance or modification of this
Agreement must have been approved by the vote of a majority of those
Trustees of the [Fund] ((Trust)) who are not parties to [such] ((this))
Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval.
(d) Either the Advisor, the Sub-Advisor or the Portfolio may, at any time
on sixty (60) days' prior written notice to the other parties, terminate
this Agreement, without payment of any penalty, by action of its Board of
Trustees or Directors, or ((with respect to the Portfolio)) by vote of a
majority of its outstanding voting securities. This Agreement shall
terminate automatically in the event of its assignment.
[7] ((10. Limitation of Liability:)) The Sub-Advisor is
hereby expressly put on notice of the limitation of shareholder liability
as set forth in the Declaration of Trust [of the Fund] ((or other
organizational document of the Trust)) and agrees that any obligations of
the [Fund] ((Trust)) or the Portfolio arising in connection with this
Agreement shall be limited in all cases to the Portfolio and its assets,
and the Sub-Advisor shall not seek satisfaction of any such obligation from
the shareholders or any shareholder of the Portfolio. Nor shall the
Sub-Advisor seek satisfaction of any such obligation from the Trustees or
any individual Trustee.
((11. Governing Law: This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of
Massachusetts, without giving effect to the choice of laws provisions
thereof. ))
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested persons,"
when used herein, shall have the respective meanings specified in the
[Investment Company Act of 1940] ((1940 Act)) as now in effect or as
hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized((, and their respective seals to be hereunto affixed,)) all as
of the date written above.
[SIGNATURE LINES OMITTED]
EXHIBIT 5
[TABLE WILL BE UPDATED IN A SUBSEQUENT FILING]
FUNDS ADVISED BY FMR - TABLE OF AVERAGE NET ASSETS AND EXPENSE RATIOS (A)
<TABLE>
<CAPTION>
INVESTMENT FISCAL AVERAGE RATIO OF NET RATIO OF
OBJECTIVE AND FUND YEAR END (A) NET ASSETS ADVISORY FEES EXPENSES TO
(MILLIONS)(B) TO AVERAGE AVERAGE NET
NET ASSETS ASSETS (C)
PAID
TO FMR (C)
<S> <C> <C> <C> <C> <C> <C>
GROWTH AND
INCOME
Variable Insurance
Products:
Equity-Income 12/31/93 $ 952.1 0.53% 0.62%
Variable Insurance
Products II:
Index 500 12/31/93 20.8 -* 0.28*
Equity-Income ((pound)) 1/31/94 6,040.5 0.38 0.66
Real Estate ((pound)) 1/31/94 417.9 0.63 1.13*
Utilities Fund((pound))(psi) 1/31/94 1,394.4 0.53 0.86*
U.S. Equity Index 2/28/94 1,647.0 -* 0.28*
Market Index 4/30/94 300.9 0.45 0.45
Fidelity Fund ((pound)) 6/30/94 1,545.0 0.41 0.65*
Balanced ((pound)) 7/31/94 4,835.3 0.52 1.01*
Dividend Growth ((pound)) 7/31/94 74.0 0.67 1.40*
Global Balanced 7/31/94 322.0 0.77 1.67*
(Rex-all)
Growth & Income 7/31/94 7,818.3 0.52 0.82*
Puritan ((pound)) 7/31/94 9,378.9 0.53 0.79*
Advisor Income & 10/31/94 2,556.9 0.52 1.58*
Growth - Class A
International Growth 10/31/94 1,327.7 0.77 1.21
& Income ((sigma))
Advisor Equity
Portfolio Income :
Class A ((pound)) 11/30/94 88.6 0.50 1.64*
Class B ((pound)) 11/30/94** 15.7 0.50 2.18(dagger)*
Institutional Class 11/30/94 183.2 0.50 0.71*
((pound))
Convertible 11/30/94 974.5 0.52 0.85*
Securities ((pound))
Equity-Income II ((pound)) 11/30/94 6,253.8 0.52 0.81*
Congress Street 12/31/93 63.4 0.46 0.61
Contrafund ((pound)) 12/31/93 4,138.1 0.69 1.06*
Exchange 12/31/93 187.7 0.54 0.57
Trend ((pound)) 12/31/93 1,296.7 0.65 0.92*
Variable Insurance
Products:
Growth 12/31/93 1,016.0 0.63 0.71
Overseas ((sigma)) 12/31/93 398.7 0.77 1.03
Mid-Cap Stock ((pound)) 1/31/95** 46.1 0.62(dagger) 1.61(dagger)*
INVESTMENT FISCAL AVERAGE RATIO OF NET RATIO OF
OBJECTIVE AND FUND YEAR END (E) NET ASSETS ADVISORY FEES EXPENSES TO
(MILLIONS)(B) TO AVERAGE AVERAGE NET
NET ASSETS ASSETS (C)
PAID
TO FMR (C)
GROWTH
Select Portfolios:
Air Transportation 2/28/95 $ 9.4 0.24%* 2.50%*
((pound))
American Gold 2/28/95 350.5 0.62 1.41
Automotive ((pound)) 2/28/95 102.2 0.62 1.80*
Biotechnology ((pound)) 2/28/95 413.9 0.62 1.59
Brokerage and
Investment
Management ((pound)) 2/28/95 30.5 0.26* 2.54*
Chemicals ((pound)) 2/28/95 144.0 0.62 1.51*
Computers ((pound)) 2/28/95 131.6 0.62 1.69*
Construction and 2/28/95 40.9 0.62 1.74*
Housing ((pound))
Consumer 2/28/95 7.9 0.30* 2.49*
Products ((pound))
Defense and 2/28/95 5.2 -* 2.49*
Aerospace ((pound))
Developing 2/28/95 222.6 0.62 1.50*
Communication
s ((pound))
Electronics ((pound)) 2/28/95 155.8 0.62 1.71*
Energy ((pound)) 2/28/95 104.4 0.62 1.85
Energy Service 2/28/95 59.4 0.62 1.79*
((pound))
Environmental 2/28/95 45.0 0.62 2.01*
Services ((pound))
Financial Services 2/28/95 108.2 0.62 1.54*
((pound))
Food and 2/28/95 92.7 0.62 1.68*
Agriculture ((pound))
Health Care ((pound)) 2/28/95 642.9 0.62 1.36*
Home Finance ((pound)) 2/28/95 200.7 0.62 1.45*
Industrial 2/28/95 123.8 0.62 1.78*
Equipment ((pound))
Industrial 2/28/95 177.3 0.62 1.53*
Materials ((pound))
Insurance ((pound)) 2/28/95 10.3 0.62 2.34*
Leisure ((pound)) 2/28/95 73.1 0.62 1.62*
Medical Delivery 2/28/95 214.0 0.62 1.45*
((pound))
Multimedia 2/28/95 31.5 0.62 2.03*
((pound))((psi)(psi))
Natural Gas ((pound)) 2/28/95 77.1 0.62 1.66*
Paper and Forest 2/28/95 56.2 0.62 1.87*
Products ((pound))
Precious Metals 2/28/95 437.1 0.62 1.46
and
Minerals ((pound))
Regional Banks 2/28/95 143.9 0.62 1.56*
((pound))
Select Portfolios
(continued):
Retailing ((pound)) 2/28/95 $ 60.8 0.62% 1.96*%
Software and 2/28/95 182.1 0.62 1.50*
Computer
Services ((pound))
Technology ((pound)) 2/28/95 206.1 0.62 1.56*
Telecommunicatio 2/28/95 374.3 0.62 1.55*
ns ((pound))
Transportation ((pound)) 2/28/95 12.7 0.62 2.36*
Utilities 2/28/95 224.4 0.62 1.42*
Growth((pound))((psi)(psi))
Magellan ((pound)) 3/31/95 35,788.6 0.75 0.96*
Mid Cap Stock 4/30/95** 300.2 0.66(dagger) 1.22(dagger)*
Small Cap Stock 4/30/95 640.2 0.56 0.90*
Fidelity Fifty ((pound)) 6/30/94** 44.2 0.63(dagger) 1.58(dagger)
Blue Chip Growth 7/31/94 1,359.3 0.70 1.22
Low-Priced Stock 7/31/94 2,084.5 0.79 1.13
((pound))
OTC Portfolio 7/31/94 1,296.9 0.50 .88
Export Fund 8/31/95** 62.6 0.62(dagger) 1.65(dagger)
Advisor Strategic
Opportunities:
Class A ((pound)) 9/30/94 337.0 0.72 1.84
Class B ((pound)) 9/30/94** 3.3 0.72 2.63(dagger)
Initial Shares ((pound)) 9/30/94 19.6 0.72 1.14
Destiny I 9/30/94 3,204.9 0.65 0.70
Destiny II 9/30/94 1,326.8 0.73 0.80
Advisor Emerging 10/31/94 125.5 1.00(dagger) 1.78(dagger)
Asia Fund, Inc.
((oval))
Advisor Global 10/31/94 115.8 0.77 2.07*
Resources ((pound))
Advisor Growth 10/31/94 3,215.2 0.69 1.62*
Opportunities -
Class A
Advisor Overseas 10/31/94 428.7 0.80 2.12
((sigma))
Canada ((sigma)) 10/31/94 214.8 0.80 1.57
Capital Appreciation 10/31/94 1,720.3 0.77 1.17
((pound))
Disciplined Equity 10/31/94 891.4 0.72 1.05
((pound))
Diversified 10/31/94 316.5 0.72 1.25
International ((sigma))
Emerging Markets 10/31/94 1,639.2 0.77 1.52
((sigma))
Europe ((sigma)) 10/31/94 493.3 0.72 1.35
Europe Capital 10/31/94** 288.2 0.77(dagger) 1.54(dagger)
Appreciation ((sigma))
International Value 10/31/95** 9.6 0.77(dagger) 2.00(dagger)*
((rex-all))
Japan ((Rex-all)) 10/31/94 362.4 0.75 1.42
Latin America ((sigma)) 10/31/94 $ 782.5 0.77% 1.48%
Overseas ((sigma)) 10/31/94 1,895.8 0.80 1.24
Pacific Basin ((Rex-all)) 10/31/94 509.8 0.86 1.54
Southeast Asia ((Rex-all)) 10/31/94 806.9 0.69 1.47
Stock Selector ((pound)) 10/31/94 710.5 0.72 1.09
Value ((pound)) 10/31/94 3,325.0 0.52 0.79
Worldwide ((sigma)) 10/31/94 530.6 0.77 1.32
Advisor Equity
Portfolio Growth :
Class A ((pound)) 11/30/94 663.9 0.64 1.70
Institutional Class 11/30/94 364.1 0.64 0.84
((pound))
Emerging Growth 11/30/94 617.7 0.66 1.02
((pound))
Growth Company 11/30/94 2,748.9 0.73 1.05
((pound))
New Millennium 11/30/94 312.2 0.82 1.29
Retirement Growth 11/30/94 2989.2 0.77 1.07
((pound))
</TABLE>
(a) All fund data are as of the fiscal year end noted in the chart or as of
November 30,1994, if fiscal year end figures are not yet available.
(b) Average net assets are computed on the basis of average net assets of
each fund at the close of business on each business day throughout its
fiscal period.
(c) Reflects reductions for any expense reimbursement paid by or due from
FMR pursuant to voluntary or state expense limitations. Funds so affected
are indicated by an (*).
(d) Reflects reductions for any expense reimbursement paid by or due from
FMR pursuant to voluntary or state expense limitations, or paid by or due
from brokers to which certain portfolio trades have been directed. Funds so
affected are indicated by an (*).
(e) All fund data are as of the fiscal year end noted in the chart or as of
April 30,1995, if fiscal year end figures are not yet available.
(dagger) Annualized
# Year end changed
** Less than a complete fiscal year
((Rex-all)) Fidelity Management & Research Company has entered into
sub-advisory agreements with the following affiliates: Fidelity Management
& Research (U.K.) Inc. (FMR U.K.), Fidelity Management & Research (Far
East) Inc. (FMR Far East), Fidelity Investments Japan Ltd. (FIJ), Fidelity
International Investment Advisors (FIIA), and Fidelity International
Investment Advisors (U.K.) Limited (FIIAL U.K.), with respect to the fund.
((sigma)) Fidelity Management & Research Company has entered into
sub-advisory agreements with the following affiliates: FMR U.K., FMR Far
East, FIJ (New Markets Income and Advisor Emerging Markets only), FIIA, and
FIIAL U.K., with respect to the fund.
((pound)) Fidelity Management & Research Company has entered into
sub-advisory agreements with FMR U.K. and FMR Far East, with respect to the
fund.
((yen)) Fidelity Management & Research Company has entered into a
sub-advisory agreement with FMR Texas Inc., with respect to the fund.
((oval)) Fidelity Management & Research Company has entered into
sub-advisory agreements with FIIA and FIJ, with respect to the fund.
((psi)) Effective April 25, 1994, Select Broadcast and Media Portfolio has
been renamed to Multimedia Portfolio. Effective August 3, 1994, Utilities
Income Fund and Select Utilities Portfolio have been renamed to Utilities
Fund and Utilities Growth Portfolio, respectively.
((psi)(psi)) Effective August 3, 1994, Utilities Income Fund and Select
Utilities Portfolio have been renamed to Utilities Fund and Utilities
Growth Portfolio, respectively.
Vote this proxy card TODAY! Your prompt response will
save your fund the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------------
- --------------------
FIDELITY HASTINGS STREET TRUST: FIDELITY FIFTY
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring, and Phyllis Burke Davis, or any one or more
of them, attorneys, with full power of substitution, to vote all shares of
Fidelity Hastings Street Trust as indicated above which the undersigned is
entitled to vote at the Special Meeting of Shareholders of the fund to be
held at the office of the trust at 82 Devonshire St., Boston, MA 02109, on
July 16, 1997 at 9:45 a.m. and at any adjournments thereof. All powers may
be exercised by a majority of said proxy holders or substitutes voting or
acting or, if only one votes and acts, then by that one. This Proxy shall
be voted on the proposals described in the Proxy Statement as specified on
the reverse side. Receipt of the Notice of the Meeting and the
accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1997
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
003, 500 HH
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- --------------------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the 12 nominees specified below as [ ]FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Robert M. Gates, Edward C. Johnson marked to the contrary authority to
3d, E. Bradley Jones, Donald J. Kirk, Peter S. below). vote for all
Lynch, William O. McCoy, Gerald C. McDonough, nominees.
Marvin L. Mann, and Thomas R. Williams.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S), WRITE THE NAME(S) OF
THE NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
__________________________________________________________________________
___________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of Coopers & Lybrand L.L.P. as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust.
3. To amend the Declaration of Trust to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the trust.
4. To amend the Declaration of Trust regarding FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
shareholder notification of appointment of Trustees.
5. To amend the Declaration of Trust to provide each FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
fund with the ability to invest all of its assets in another
open-end investment company with substantially
the same investment objective and policies.
6. To adopt a new fundamental investment policy for FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
each fund permitting each fund to invest all of its assets
in another open-end investment company with
substantially the same investment objective and
policies.
7. To approve an amended management contract for FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
Fidelity Fifty.
</TABLE>
FIF/FID-PXC-0597 CUSIP #31617F106/FUND #500HH
Vote this proxy card TODAY! Your prompt response will
save your fund the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------------
- --------------------
FIDELITY HASTINGS STREET TRUST: FIDELITY FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring, and Phyllis Burke Davis, or any one or more
of them, attorneys, with full power of substitution, to vote all shares of
Fidelity Hastings Street Trust as indicated above which the undersigned is
entitled to vote at the Special Meeting of Shareholders of the fund to be
held at the office of the trust at 82 Devonshire St., Boston, MA 02109, on
July 16, 1997 at 9:45 a.m. and at any adjournments thereof. All powers may
be exercised by a majority of said proxy holders or substitutes voting or
acting or, if only one votes and acts, then by that one. This Proxy shall
be voted on the proposals described in the Proxy Statement as specified on
the reverse side. Receipt of the Notice of the Meeting and the
accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1997
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
003, 500 HH
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- --------------------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the 12 nominees specified below as [ ]FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Robert M. Gates, Edward C. Johnson marked to the contrary authority to
3d, E. Bradley Jones, Donald J. Kirk, Peter S. below). vote for all
Lynch, William O. McCoy, Gerald C. McDonough, nominees.
Marvin L. Mann, and Thomas R. Williams.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S), WRITE THE NAME(S) OF
THE NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
__________________________________________________________________________
___________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of Coopers & Lybrand L.L.P. as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust.
3. To amend the Declaration of Trust to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the trust.
4. To amend the Declaration of Trust regarding FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
shareholder notification of appointment of Trustees.
5. To amend the Declaration of Trust to provide each FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
fund with the ability to invest all of its assets in another
open-end investment company with substantially
the same investment objective and policies.
6. To adopt a new fundamental investment policy for FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
each fund permitting each fund to invest all of its assets
in another open-end investment company with
substantially the same investment objective and
policies.
8. To approve an amended management contract for FOR [ ] AGAINST [ ] ABSTAIN [ ] 8.
Fidelity Fund.
9. To approve a new Sub-Advisory Agreement with FOR [ ] AGAINST [ ] ABSTAIN [ ] 9.
FMR Far East for Fidelity Fund.
10. To approve a new Sub-Advisory Agreement with FOR [ ] AGAINST [ ] ABSTAIN [ ] 10.
FMR U.K. for Fidelity Fund.
11. To amend Fidelity Fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 11.
limitation concerning real estate.
12. To amend Fidelity Fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 12.
limitation concerning diversification to permit
increased investment in the securities of any single
issuer.
13. To amend Fidelity Fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 12.
limitation concerning diversification to exclude
securities of other investment companies from the
limitation.
14. To eliminate Fidelity Fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 13.
limitation concerning short sales of securities.
15. To eliminate Fidelity Fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 14.
limitation concerning margin purchases.
</TABLE>
Proposed changes to the fund's fundamental investment limitations should be
voted as marked below.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
16. other investment companies [ ] [ ] [ ] 20. underwriting [ ]
[ ] [ ]
17. newly-formed issuers [ ] [ ] [ ] 21. concentration[ ] [
] [ ]
18. senior securities [ ] [ ] [ ] 22. lending [ ] [ ]
[ ]
19. borrowing [ ] [ ] [ ]
FIF/FID-PXC-0597 CUSIP #316153105/FUND #003HH
