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:
<TABLE>
<CAPTION>
<S> <C>
[ ] PRELIMINARY PROXY STATEMENT
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14A-6(E)(2))
[X] DEFINITIVE PROXY STATEMENT
[ ] DEFINITIVE ADDITIONAL MATERIALS
[ ] SOLICITING MATERIAL PURSUANT TO SEC. 240.14A-11(C) OR SEC. 240.14A-12
</TABLE>
FIDELITY TREND FUND
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:
<TABLE>
<CAPTION>
<S> <C>
[ ] FEE PAID PREVIOUSLY WITH PRELIMINARY MATERIALS.
[ ] CHECK BOX IF ANY PART OF THE FEE IS OFFSET AS PROVIDED BY EXCHANGE ACT RULE 0-11(A) (2)
AND IDENTIFY THE FILING FOR WHICH THE OFFSETTING FEE WAS PAID PREVIOUSLY. IDENTIFY THE
PREVIOUS FILING BY REGISTRATION STATEMENT NUMBER, OR THE FORM OR SCHEDULE AND THE DATE OF
ITS FILING.
</TABLE>
(1) AMOUNT PREVIOUSLY PAID:
(2) FORM, SCHEDULE OR REGISTRATION STATEMENT NO.:
(3) FILING PARTY:
(4) DATE FILED:
FIDELITY TREND FUND
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-544-8888
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of FIDELITY TREND FUND:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
Meeting) of Fidelity Trend Fund (the fund), a series of Fidelity Trend
Fund, a single series trust (the trust), will be held at the office of
the trust, 82 Devonshire Street, Boston, Massachusetts 02109 on
December 16, 1998, at 10:00 a.m. The purpose of the Meeting is to
consider and act upon the following proposals, and to transact such
other business as may properly come before the Meeting or any
adjournments thereof.
1. To elect a Board of Trustees.
2. To ratify the selection of PricewaterhouseCoopers LLP as
independent accountants of the fund.
3. To authorize the Trustees to adopt an Amended and Restated
Declaration of Trust.
4. To adopt a new fundamental investment policy for the fund
permitting the fund to invest all of its assets in another open-end
investment company managed by Fidelity Management & Research Company
or an affiliate with substantially the same investment objective and
policies.
5. To approve an amended management contract for the fund.
6. To approve a new sub-advisory agreement with FMR U.K. for the
fund.
7. To approve a new sub-advisory agreement with FMR Far East for the
fund.
8. To make certain fundamental investment policies of the fund
non-fundamental.
9. To eliminate certain fundamental policies of the fund.
10. To amend the fund's fundamental investment limitation concerning
diversification.
The Board of Trustees has fixed the close of business on October 19,
1998 as the record date for the determination of the shareholders of
the fund entitled to notice of, and to vote at, such Meeting and any
adjournments thereof.
By order of the Board of Trustees,
ERIC D. ROITER, Secretary
October 19, 1998
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 TREND FUND
TO BE HELD ON DECEMBER 16, 1998
This Proxy Statement is furnished in connection with a solicitation
of proxies made by, and on behalf of, the Board of Trustees of
Fidelity Trend Fund (the trust) to be used at the Special Meeting of
Shareholders of Fidelity Trend Fund (the fund) and at any adjournments
thereof (the Meeting), to be held on December 16, 1998 at 10:00 a.m.
at 82 Devonshire Street, Boston, Massachusetts 02109, the principal
executive office of the trust and Fidelity Management & Research
Company (FMR), the fund's investment adviser.
The purpose of the Meeting is set forth in the accompanying Notice.
The solicitation is being made primarily by the mailing of this Proxy
Statement and the accompanying proxy card on or about October 19,
1998. Supplementary solicitations may be made by mail, telephone,
telegraph, facsimile, electronic means or by personal interview by
representatives of the trust. In addition, Management Information
Services Corp. (MIS) and D.F. King & Co., Inc. (D.F. King) may
be paid on a per-call basis to solicit shareholders on behalf of the
fund at an anticipated cost of approximately $3,000. The expenses in
connection with preparing this Proxy Statement and its enclosures and
of all solicitations will be paid by the fund. The fund will reimburse
brokerage firms and others for their reasonable expenses in forwarding
solicitation material to the beneficial owners of shares. The
principal business address of Fidelity Distributors Corporation (FDC),
the fund's principal underwriter and distribution agent, and Fidelity
Management & Research (U.K.) Inc. (FMR U.K.) and Fidelity Management &
Research (Far East) Inc. (FMR Far East), sub-advisers to the fund, 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, by the trust's receipt of a subsequent valid telephonic
vote 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 are
not revoked, will be voted at the Meeting. Shares represented by such
proxies will be voted in accordance with the instructions thereon. If
no specification is made on a proxy card, it will be voted FOR the
matters specified on the proxy card. Only proxies that are voted will
be counted towards establishing a quorum. Broker non-votes are not
considered voted for this purpose. Shareholders should note that while
votes to ABSTAIN will count toward establishing a quorum, passage of
any proposal being considered at the Meeting will occur only if a
sufficient number of votes are cast FOR the proposal. Accordingly,
votes to ABSTAIN and votes AGAINST will have the same effect in
determining whether the proposal is approved.
The fund may also arrange to have votes recorded by telephone. The
expenses in connection with telephone voting will be paid by the fund.
If the fund records votes by telephone, it will use procedures
designed to authenticate shareholders' identities, to allow
shareholders to authorize the voting of their shares in accordance
with their instructions, and to confirm that their instructions have
been properly recorded. Proxies voted by telephone may be revoked at
any time before they are voted in the same manner that proxies voted
by mail may be revoked. D.F. King may be paid on a per-call basis for
vote-by-phone solicitations on behalf of the fund at an anticipated
cost of approximately $3,000.
If a quorum is not present at the Meeting, or if a quorum is present
at the Meeting but sufficient votes to approve one or more of the
proposed items are not received, or if other matters arise requiring
shareholder attention, the persons named as proxy agents 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
proxy agents 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.
On August 31, 1998 there were 23,189,525 shares of the fund
issued and outstanding.
As of August 31, 1998, the nominees and officers of the trust owned,
in the aggregate, less than 1% of the fund's outstanding shares.
Shareholders of record at the close of business on October 19, 1998
will be entitled to vote at the Meeting. Each such shareholder will be
entitled to one vote for each share held on that date.
FOR A FREE COPY OF THE FUND'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1997 AND THE SEMIANNUAL REPORT FOR THE FISCAL PERIOD
ENDED JUNE 30, 1998 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 PROPOSAL 1 AND A MAJORITY OF ALL VOTES OF THE
FUND CAST AT THE MEETING IS SUFFICIENT TO APPROVE PROPOSAL 2. APPROVAL
OF PROPOSAL 3 REQUIRES THE AFFIRMATIVE VOTE OF A "MAJORITY OF THE
OUTSTANDING VOTING SECURITIES" OF THE ENTIRE TRUST. APPROVAL OF
PROPOSALS 4 THROUGH 10 REQUIRES THE AFFIRMATIVE VOTE OF A "MAJORITY OF
THE OUTSTANDING VOTING SECURITIES" OF THE FUND. UNDER THE INVESTMENT
COMPANY ACT OF 1940 (THE 1940 ACT), THE VOTE OF A "MAJORITY OF THE
OUTSTANDING VOTING SECURITIES" MEANS THE AFFIRMATIVE VOTE OF THE
LESSER OF (A) 67% OR MORE OF THE VOTING SECURITIES PRESENT AT THE
MEETING OR REPRESENTED BY PROXY IF THE HOLDERS OF MORE THAN 50% OF THE
OUTSTANDING VOTING SECURITIES ARE PRESENT OR REPRESENTED BY PROXY OR
(B) MORE THAN 50% OF THE OUTSTANDING VOTING SECURITIES. BROKER
NON-VOTES ARE NOT CONSIDERED "PRESENT" FOR THIS PURPOSE.
1. TO 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 Trend Fund, 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.
All nominees named below are currently Trustees of Fidelity Trend
Fund and have served in that capacity continuously since originally
elected or appointed. Robert M. Gates, William O. McCoy, Marvin L.
Mann, and Robert C. Pozen were selected by the trust's Nominating and
Administration Committee (see page ) and were appointed to the Board
in March 1997, January 1997, October 1993, and August 1997,
respectively. None of the nominees are related to one another. Those
nominees indicated by an asterisk (*) are "interested persons" of the
trust by virtue of, among other things, their affiliation with either
the trust, the fund ' s investment adviser (FMR, or the Adviser),
or the fund ' s distribution agent, FDC. The business address of
each nominee who is an "interested person" is 82 Devonshire Street,
Boston, Massachusetts 02109, and the business address of all other
nominees is Fidelity Investments, P.O. Box 9235, Boston, Massachusetts
02205-9235. Except for Robert M. Gates, William O. McCoy, and Robert
C. Pozen, each of the nominees is currently a Trustee of 5 7
registered investment companies advised by FMR. Mr. Gates and Mr.
McCoy are currently a Trustee of 54 registered investment companies
advised by FMR. Mr. Pozen is currently a Trustee of 51 registered
investment companies advised by FMR.
In the election of Trustees, those twelve nominees receiving the
highest number of votes cast at the Meeting, providing a quorum is
present, shall be elected.
NOMINEE PRINCIPAL OCCUPATION** YEAR OF
(AGE) ELECTION OR
APPOINTMENT
RALPH F. COX PRESIDENT OF RABAR ENTERPRISES 1991
(66) (MANAGEMENT CONSULTING-ENGINEERING
INDUSTRY, 1994). PRIOR TO FEBRUARY
1994, HE WAS PRESIDENT OF GREENHILL
PETROLEUM CORPORATION (PETROLEUM
EXPLORATION AND PRODUCTION). UNTIL
MARCH 1990, MR. COX WAS PRESIDENT
AND CHIEF OPERATING OFFICER OF UNION
PACIFIC RESOURCES COMPANY
(EXPLORATION AND PRODUCTION). HE IS A
DIRECTOR OF USA WASTE SERVICES, INC.
(NON-HAZARDOUS WASTE, 1993), CH2M
HILL COMPANIES (ENGINEERING), RIO
GRANDE, INC. (OIL AND GAS
PRODUCTION), AND DANIEL INDUSTRIES
(PETROLEUM MEASUREMENT EQUIPMENT
MANUFACTURER). IN ADDITION, HE IS A
MEMBER OF ADVISORY BOARDS OF TEXAS
A&M UNIVERSITY AND THE UNIVERSITY
OF TEXAS AT AUSTIN.
PHYLLIS BURKE DAVIS PRIOR TO HER RETIREMENT IN SEPTEMBER 1992
(66) 1991, MRS. DAVIS WAS THE SENIOR
VICE PRESIDENT OF CORPORATE AFFAIRS
OF AVON PRODUCTS, INC. SHE IS
CURRENTLY A DIRECTOR OF BELLSOUTH
CORPORATION (TELECOMMUNICATIONS),
EATON CORPORATION (MANUFACTURING,
1991), AND THE TJX COMPANIES, INC.
(RETAIL STORES), 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 1997
(55) (1993). MR. GATES WAS DIRECTOR OF
THE CENTRAL INTELLIGENCE 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 A
DIRECTOR OF 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). MR. GATES
ALSO IS A TRUSTEE OF THE FORUM FOR
INTERNATIONAL POLICY AND OF THE
ENDOWMENT ASSOCIATION OF THE
COLLEGE OF WILLIAM AND MARY. IN
ADDITION, HE IS A MEMBER OF THE
NATIONAL EXECUTIVE BOARD OF THE
BOY SCOUTS OF AMERICA.
*EDWARD C. JOHNSON 3D PRESIDENT, IS CHAIRMAN, CHIEF 1984
(68) EXECUTIVE OFFICER AND A DIRECTOR OF
FMR CORP.; A DIRECTOR AND CHAIRMAN
OF THE BOARD AND OF THE EXECUTIVE
COMMITTEE OF FMR; CHAIRMAN AND A
DIRECTOR OF FIDELITY INVESTMENTS
MONEY MANAGEMENT, INC. (1998),
FIDELITY MANAGEMENT & RESEARCH
(U.K.) INC., AND FIDELITY MANAGEMENT
& RESEARCH (FAR EAST) INC.
E. BRADLEY JONES PRIOR TO HIS RETIREMENT IN 1984, 1990
(71) MR. JONES WAS CHAIRMAN AND CHIEF
EXECUTIVE OFFICER OF LTV STEEL
COMPANY. HE IS A DIRECTOR OF TRW
INC. (ORIGINAL EQUIPMENT AND
REPLACEMENT PRODUCTS),
CONSOLIDATED RAIL CORPORATION,
BIRMINGHAM STEEL CORPORATION, AND
RPM, INC. (MANUFACTURER OF
CHEMICAL PRODUCTS), AND HE
PREVIOUSLY SERVED AS A DIRECTOR OF
NACCO INDUSTRIES, INC. (MINING AND
MANUFACTURING, 1985-1995),
HYSTER-YALE MATERIALS HANDLING, INC.
(1985-1995), AND CLEVELAND-CLIFFS
INC (MINING), AND AS A TRUSTEE OF
FIRST UNION REAL ESTATE INVESTMENTS.
IN ADDITION, HE SERVES AS A TRUSTEE
OF THE CLEVELAND CLINIC FOUNDATION,
WHERE HE HAS ALSO BEEN A MEMBER
OF THE EXECUTIVE COMMITTEE AS WELL
AS CHAIRMAN OF THE BOARD AND
PRESIDENT, A TRUSTEE AND MEMBER OF
THE EXECUTIVE COMMITTEE OF
UNIVERSITY SCHOOL (CLEVELAND), AND A
TRUSTEE OF CLEVELAND CLINIC FLORIDA.
DONALD J. KIRK EXECUTIVE-IN-RESIDENCE (1995) AT 1987
(66) COLUMBIA UNIVERSITY GRADUATE SCHOOL
OF BUSINESS AND A FINANCIAL
CONSULTANT. FROM 1987 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 NATIONAL ARTS
STABILIZATION INC., CHAIRMAN OF THE
BOARD OF TRUSTEES OF THE GREENWICH
HOSPITAL ASSOCIATION, DIRECTOR OF THE
YALE-NEW HAVEN HEALTH SERVICES
CORP. (1998), 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 FMR. 1990
(55) PRIOR TO MAY 31, 1990, HE WAS A
DIRECTOR OF FMR 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). IN
ADDITION, HE SERVES AS A TRUSTEE OF
BOSTON COLLEGE, MASSACHUSETTS EYE
& EAR INFIRMARY, HISTORIC DEERFIELD
(1989) AND SOCIETY FOR THE
PRESERVATION OF NEW ENGLAND
ANTIQUITIES, AND AS AN OVERSEER OF
THE MUSEUM OF FINE ARTS OF BOSTON.
WILLIAM O. MCCOY VICE PRESIDENT OF FINANCE FOR THE 1997
(65) UNIVERSITY OF NORTH CAROLINA
(16-SCHOOL SYSTEM, 1995). PRIOR TO
HIS RETIREMENT IN DECEMBER 1994,
MR. MCCOY WAS VICE CHAIRMAN OF THE
BOARD OF BELLSOUTH CORPORATION
(TELECOMMUNICATIONS, 1984) AND
PRESIDENT OF BELLSOUTH ENTERPRISES
(1986). HE IS CURRENTLY A DIRECTOR OF
LIBERTY CORPORATION (HOLDING
COMPANY, 1984), WEEKS CORPORATION
OF ATLANTA (REAL ESTATE, 1994),
CAROLINA POWER AND LIGHT COMPANY
(ELECTRIC UTILITY, 1996) AND THE KENAN
TRANSPORT CO. (1996). PREVIOUSLY, HE
WAS A DIRECTOR OF FIRST AMERICAN
CORPORATION (BANK HOLDING COMPANY,
1979-1996). IN ADDITION, MR. MCCOY
SERVES AS A MEMBER OF THE BOARD OF
VISITORS FOR THE UNIVERSITY OF NORTH
CAROLINA AT CHAPEL HILL (1994) AND FOR
THE KENAN-FLAGER BUSINESS SCHOOL
(UNIVERSITY OF NORTH CAROLINA AT
CHAPEL HILL, 1988).
GERALD C. MCDONOUGH CHAIRMAN OF G.M. MANAGEMENT 1989
(70) GROUP (STRATEGIC ADVISORY SERVICES).
MR. MCDONOUGH IS A DIRECTOR OF 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 AND
BRUSH-WELLMAN INC. (METAL REFINING)
FROM 1983-1997).
MARVIN L. MANN CHAIRMAN OF THE BOARD OF LEXMARK 1993
(65) INTERNATIONAL, INC. (OFFICE MACHINES,
1991). PRIOR TO 1991, HE HELD THE
POSITIONS OF VICE PRESIDENT OF
INTERNATIONAL BUSINESS MACHINES
CORPORATION ("IBM") AND PRESIDENT
AND GENERAL MANAGER OF VARIOUS IBM
DIVISIONS AND SUBSIDIARIES. MR. MANN
IS A DIRECTOR OF M.A. HANNA
COMPANY (CHEMICALS, 1993) AND
IMATION CORP. (IMAGING AND
INFORMATION STORAGE, 1997).
*ROBERT C. POZEN SENIOR VICE PRESIDENT, IS ALSO 1997
(52) PRESIDENT AND A DIRECTOR OF FMR
(1997); AND PRESIDENT AND A
DIRECTOR OF FIDELITY INVESTMENTS
MONEY MANAGEMENT, INC. (1998),
FIDELITY MANAGEMENT & RESEARCH
(U.K.) INC. (1997), AND FIDELITY
MANAGEMENT & RESEARCH (FAR EAST)
INC. (1997). PREVIOUSLY, MR. POZEN
SERVED AS GENERAL COUNSEL,
MANAGING DIRECTOR, AND SENIOR VICE
PRESIDENT OF FMR CORP.
THOMAS R. WILLIAMS PRESIDENT OF THE WALES GROUP, INC. 1989
(70) (MANAGEMENT AND FINANCIAL ADVISORY
SERVICES). PRIOR TO RETIRING IN 1987,
MR. WILLIAMS SERVED AS CHAIRMAN OF
THE BOARD OF FIRST WACHOVIA
CORPORATION (BANK HOLDING COMPANY),
AND CHAIRMAN AND CHIEF EXECUTIVE
OFFICER OF THE FIRST NATIONAL BANK OF
ATLANTA AND FIRST ATLANTA CORPORATION
(BANK HOLDING COMPANY). HE IS
CURRENTLY A OF DIRECTOR OF CONAGRA,
INC. (AGRICULTURAL PRODUCTS), GEORGIA
POWER COMPANY (ELECTRIC UTILITY),
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 August 31, 1998 the nominees, Trustees and officers of the
Trust and the fund owned, in the aggregate, less than 1% of the fund's
outstanding shares.
If elected, the Trustees will hold office without limit in time
except that (a) any Trustee may resign; (b) any Trustee may be removed
by written instrument, signed by at least two-thirds of the number of
Trustees prior to such removal; (c) any Trustee who requests to be
retired or who has become incapacitated by illness or injury may be
retired by written instrument signed by a majority of the other
Trustees; and (d) a Trustee may be removed at any Special Meeting of
shareholders by a two-thirds vote of the outstanding voting securities
of the trust. In case a vacancy shall for any reason exist, the
remaining Trustees will fill such vacancy by appointing another
Trustee, so long as, immediately after such appointment, at least
two-thirds of the Trustees have been elected by shareholders. If, at
any time, less than a majority of the Trustees holding office has been
elected by the shareholders, the Trustees then in office will promptly
call a shareholders' meeting for the purpose of electing a Board of
Trustees. Otherwise, there will normally be no meeting of shareholders
for the purpose of electing Trustees.
The trust's Board, which is currently composed of three interested
and nine non-interested Trustees, met 11 times during the twelve
months ended December 31, 1997. 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, Messrs. Kirk (Chairman), Gates,
McCoy, and Mrs. Davis are members of the Committee. The committee
oversees and monitors the trust's internal control structure, its
auditing function and its financial reporting process, including the
resolution of material reporting issues. The committee recommends to
the Board of Trustees the appointment of auditors for the trust. It
reviews audit plans, fees and other material arrangements in respect
of the engagement of auditors, including non-audit services to be
performed. It reviews the qualifications of key personnel involved in
the foregoing activities. The committee plays an oversight role in
respect of the trust's investment compliance procedures and the code
of ethics. During the twelve months ended December 31, 1997, the
committee held four meetings.
The trust's Nominating and Administration Committee is currently
composed of Messrs. McDonough (Chairman), Jones and Williams. The
committee members confer periodically and hold meetings as required.
The committee makes nominations for independent trustees, and for
membership on committees. The committee periodically reviews
procedures and policies of the Board of Trustees and committees. It
acts as the administrative committee under the Retirement Plan for
non-interested trustees who retired prior to December 30, 1996. It
monitors the performance of legal counsel employed by the trust and
the independent trustees. The committee in the first instance monitors
compliance with, and acts as the administrator of the provisions of
the code of ethics applicable to the independent trustees. During the
twelve months ended December 31, 1997, the committee held no meetings.
The Nominating and Administration Committee will consider nominees
recommended by shareholders. Recommendations should be submitted to
the committee in care of the Secretary of the Trust. The trust does
not have a compensation committee; such matters are considered by the
Nominating and Administration Committee.
The following table sets forth information describing the
compensation of each Trustee and Member of the Advisory Board of the
fund for his or her services for the fiscal year ended December 31,
1997.
COMPENSATION TABLE
TRUSTEES AND MEMBERS AGGREGATE TOTAL
OF THE COMPENSATION COMPENSATION
ADVISORY BOARD FROM FROM THE
TREND FUNDB,C,D FUND COMPLEX*A
J. GARY BURKHEAD** ,# $ 0 $ 0
RALPH F. COX $ 598 214,500
PHYLLIS BURKE DAVIS $ 585 210,000
ROBERT M. GATES*** $ 502 176,000
EDWARD C. JOHNSON 3D** $ 0 0
E. BRADLEY JONES $ 590 211,500
DONALD J. KIRK $ 590 211,500
PETER S. LYNCH** $ 0 0
WILLIAM O. MCCOY**** $ 615 214,500
GERALD C. MCDONOUGH $ 737 264,500
MARVIN L. MANN $ 598 214,500
ROBERT C. POZEN** $ 0 0
THOMAS R. WILLIAMS $ 598 214,500
* Information is for the calendar year ended December 31, 1997 for 230
funds in the complex.
** Interested Trustees of the fund and Mr. Burkhead are compensated by
FMR.
*** Mr. Gates was appointed to the Board of Trustees effective March
1, 1997.
**** Mr. McCoy was appointed to the Board of Trustees effective
January 1, 1997.
# J. Gary Burkhead served on the Board of Trustees through July 31,
1997. Effective August 1, 1997, Mr. Burkhead serves as a Member of the
Advisory Board of the trust.
A Compensation figures include cash, amounts required to be deferred,
and may include amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1997, the Trustees accrued required
deferred compensation from the funds as follows: Ralph F. Cox,
$75,000; Phyllis Burke Davis, $75,000; Robert M. Gates, $62,500; E.
Bradley Jones, $75,000; Donald J. Kirk, $75,000; William O. McCoy,
$75,000; Gerald C. McDonough, $87,500; Marvin L. Mann, $75,000; and
Thomas R. Williams, $75,000. Certain of the non-interested Trustees
elected voluntarily to defer a portion of their compensation as
follows: Ralph F. Cox, $53,699; Marvin L. Mann, $53,699; and Thomas R.
Williams, $62,462.
B Compensation figures include cash, and may include 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 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 , $282 ; Phyllis Burke Davis, $282 ; Robert M.
Gates, $237 ; E. Bradley Jones, $282 ; Donald J. Kirk,
$282 ; William O. McCoy, $289 ; Gerald C. McDonough,
$329 ; Marvin L. Mann, $282 ; and Thomas R. Williams,
$282.
D For the fiscal year ended December 31, 1997, certain of the
non-interested Trustees' aggregate compensation from the fund includes
accrued voluntary deferred compensation as follows: Ralph F. Cox,
$235; Marvin L. Mann, $235; and Thomas R. Williams, $235.
Under a deferred compensation plan adopted in September 1995 and
amended in November 1996 (the Plan), non-interested Trustees must
defer receipt of a portion of, and may elect to defer receipt of an
additional portion of, their annual fees. Amounts deferred under the
Plan are subject to vesting and are treated as though equivalent
dollar amounts had been invested in shares of a cross-section of
Fidelity funds including funds in each major investment discipline and
representing a majority of Fidelity's assets under management (the
Reference Funds). The amounts ultimately received by the Trustees
under the Plan will be directly linked to the investment performance
of the Reference Funds. Deferral of fees in accordance with the Plan
will have a negligible effect on a fund's assets, liabilities, and net
income per share, and will not obligate a fund to retain the services
of any Trustee or to pay any particular level of compensation to the
Trustee. A fund may invest in the Reference Funds under the Plan
without shareholder approval.
2. TO RATIFY THE SELECTION OF PRICEWATERHOUSECOOPERS LLP
AS INDEPENDENT ACCOUNTANTS OF THE FUND.
By a vote of the non-interested Trustees, the firm of
PricewaterhouseCoopers LLP has been selected as independent
accountants for the fund to sign or certify any financial statements
of the fund 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 fund, 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.
PricewaterhouseCoopers LLP has advised the fund that it has no direct
or material indirect ownership interest in the fund.
For the fund's most recently completed fiscal year, the firm of
Coopers & Lybrand L.L.P. acted as the fund's independent accountant.
Effective July 1, 1998, Coopers & Lybrand L.L.P. and Price Waterhouse
LLP combined their businesses and practices and began doing business
as PricewaterhouseCoopers LLP.
The independent accountants examine annual financial statements for
the fund and provide other audit and tax-related services. In
recommending the selection of the fund'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 PricewaterhouseCoopers LLP are not expected to be present at the
Meeting, but have been given the opportunity to make a statement if
they so desire and will be available should any matter arise requiring
their presence.
3. TO AUTHORIZE THE TRUSTEES TO ADOPT AN AMENDED AND RESTATED
DECLARATION OF TRUST.
The Board of Trustees has approved and recommends that the
shareholders of the trust authorize them to adopt and execute an
Amended and Restated Declaration of Trust for the fund in the form
attached to this Proxy Statement as Exhibit 1 (New Declaration of
Trust). The attached New Declaration of Trust has been marked to show
changes from the trust's existing Declaration of Trust (Current
Declaration of Trust). The New Declaration of Trust is a more modern
form of trust instrument for a Massachusetts business trust, and,
going forward, will be used as the standard Declaration of Trust for
all new Fidelity Massachusetts business trusts.
The New Declaration of Trust gives the Trustees more flexibility and,
subject to applicable requirements of the 1940 Act and Massachusetts
law, broader authority to act. This increased flexibility may allow
the Trustees to react more quickly to changes in competitive and
regulatory conditions and, as a consequence, may allow the fund to
operate in a more efficient and economical manner. ADOPTION OF THE NEW
DECLARATION OF TRUST WILL NOT ALTER IN ANY WAY THE TRUSTEES' EXISTING
FIDUCIARY OBLIGATIONS TO ACT WITH DUE CARE AND IN THE SHAREHOLDERS'
INTERESTS. BEFORE UTILIZING ANY NEW FLEXIBILITY THAT THE NEW
DECLARATION OF TRUST MAY AFFORD, THE TRUSTEES MUST FIRST CONSIDER THE
SHAREHOLDERS' INTERESTS AND THEN ACT IN ACCORDANCE WITH SUCH
INTERESTS.
Adoption of the New Declaration of Trust will NOT result in any
changes in the fund's Trustees or officers or in the investment
policies and shareholder services described in the fund's current
prospectus.
Generally, a majority of the Trustees may amend the Current
Declaration of Trust when authorized by a "majority of the outstanding
voting securities" (as defined in the 1940 Act) of the trust. On
October 16, 1997, the Trustees approved the form of the New
Declaration of Trust. On December 18, 1997, the Board approved several
additional changes to the form of the New Declaration of Trust, which
changes have been incorporated into the form attached to this Proxy
Statement. On October 16, 1997, the Board authorized the submission of
the New Declaration of Trust to the trust's shareholders for their
authorization at this Meeting.
The New Declaration of Trust amends the Current Declaration of Trust
in a number of significant ways. The following discussion summarizes
some of the more significant amendments to the Current Declaration of
Trust effected by the New Declaration of Trust.
IN ADDITION TO THE CHANGES DESCRIBED BELOW, THERE ARE OTHER
SUBSTANTIVE AND STYLISTIC DIFFERENCES BETWEEN THE NEW DECLARATION OF
TRUST AND THE CURRENT DECLARATION OF TRUST. THE FOLLOWING SUMMARY IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE NEW DECLARATION OF TRUST
ITSELF, WHICH IS ATTACHED AS EXHIBIT 1 TO THIS PROXY STATEMENT.
SIGNIFICANT CHANGES EFFECTED BY THE NEW DECLARATION OF TRUST.
REORGANIZATION OR TERMINATION OF THE TRUST OR ITS SERIES. Unlike the
Current Declaration of Trust, the New Declaration of Trust generally
permits the Trustees, subject to applicable Federal and state law, to
reorganize or terminate the trust or any of its series. The Current
Declaration of Trust requires shareholder approval in order to
reorganize or terminate the trust or any of its series.
Under certain circumstances, it may not be in the shareholders'
interest to require a shareholder meeting to permit the trust or fund
to reorganize into another entity. For example, in order to reduce the
cost and scope of state regulatory constraints or to take advantage of
a more favorable tax treatment offered by another state, the Trustees
may determine that it would be in the shareholders' interests to
reorganize a fund to domicile it in another state or to change its
legal form. Under the Current Declaration of Trust, the Trustees
cannot effectuate such a potentially beneficial reorganization without
first conducting a shareholder meeting and incurring the attendant
costs and delays. In contrast, the New Declaration of Trust gives the
Trustees the flexibility to reorganize the trust or its series and
achieve potential shareholder benefits without incurring the delay and
potential costs of a proxy solicitation. Such flexibility should help
to assure that the trust and its fund operate under the most
appropriate form of organization.
Similarly, under certain circumstances, it may not be in the
shareholders' interest to require a shareholder meeting to permit the
Trustees to terminate the fund. For example, a fund may have
insufficient assets to invest effectively or excessively high expense
levels due to operational needs. Under such circumstances, absent
viable alternatives, the Trustees may determine that terminating the
fund is in the shareholders' interest and the only appropriate course
of action. The process of obtaining shareholder approval of the fund's
termination may, however, make it more difficult to complete the
fund's liquidation and termination and, in general, will increase the
costs associated with the termination. In such a case, it may be in
the shareholders' interest to permit fund termination without
incurring the costs and delays of a shareholder meeting.
As discussed above, before allowing a trust or fund reorganization or
termination to proceed without shareholder approval, the Trustees have
a fiduciary responsibility to first determine that the proposed
transaction is in the shareholders' interest. Any exercise of the
Trustees' increased authority under the New Declaration of Trust is
also subject to any applicable requirements of the 1940 Act and
Massachusetts law. Of course, in all cases, the New Declaration of
Trust would require that shareholders receive written notification of
any proposed transaction.
The New Declaration of Trust does NOT give the Trustees the authority
to merge a fund with another operating mutual fund or sell all of a
fund's assets to another operating mutual fund without first seeking
shareholder approval. Under the New Declaration of Trust, shareholder
approval is still required for these transactions.
FUTURE AMENDMENTS OF THE DECLARATION OF TRUST. The New Declaration of
Trust permits the Trustees, with certain exceptions, to amend the
Declaration of Trust without shareholder approval. Under the New
Declaration of Trust, shareholders generally have the right to vote on
any amendment affecting their right to vote, on any amendment altering
the maximum number of permitted Trustees, on any amendment affecting
the New Declaration of Trust's amendment provisions, on any amendment
required by law or the trust's registration statement, and on any
matter submitted to shareholders by the Trustees. The Current
Declaration of Trust, on the other hand, generally gives shareholders
the exclusive power to amend the Declaration of Trust. By allowing
amendment of the Declaration of Trust without shareholder approval,
the New Declaration of Trust gives the Trustees the necessary
authority to react quickly to future contingencies. As mentioned
above, such increased authority remains subordinate to the Trustees'
continuing fiduciary obligations to act with due care and in the
shareholders' interest.
DOLLAR-BASED VOTING RIGHTS. The New Declaration of Trust also
provides for voting rights based on a shareholder's total dollar
in v est ment (dollar-based voting), rather than on the
number of shares owned. As a result, under the New Declaration of
Trust, voting power is allocated in proportion to the value of each
shareholder's investment. Under the Current Declaration of Trust, each
share is entitled to one vote. 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. However, under the current
voting provisions, if the trust ha d several series or
funds, an investment in a fund with a lower net asset value
per share (NAV) would have significantly greater voting
power than the same dollar amount invested in another fund with a
higher NAV. Thus, assuming the trust had more than one fund, on
trust-wide proposals requiring the approval of the shareholders of all
of the funds, a shareholder of a fund with a lower NAV would have
greater voting power than a shareholder invested in a fund with a
higher NAV.
In sum, if the Trustees create a new fund or funds, the New
Declaration of Trust would provide a more equitable distribution of
voting rights for trust-wide 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.
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 New Declaration of Trust will
comply with the conditions stated in the no-action letter.
MASTER FEEDER FUND STRUCTURE. The New Declaration of Trust clarifies
that the Trustees may authorize the investment of all of the fund's
assets in another open-end investment company (Master Feeder Fund
Structure). The current Declaration of Trust does not specifically
provide the Trustees the ability to authorize the 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 fund's policies must permit the structure. Currently,
the fund's policies do not allow for such investments. Proposal 4
beginning on page seeks the approval of the fund's shareholders to
adopt a fundamental investment policy to permit investment in another
open-end investment company with substantially the same investment
objective and policies. For more information on the Master Feeder Fund
Structure, see Proposal 4 on page .
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 have
determined that the fund should invest in a master fund, the Trustees
believe it could be in the best interest of the fund to adopt such a
structure at a future date. If approved, the New Declaration of Trust
would provide the Trustees with the power to authorize the 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 4), if they determine that a Master Feeder Fund Structure is
in the best interest of the fund, and if, upon advice of counsel, they
determine that the investment will not have material adverse tax
consequences to the fund or its shareholders. 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.
SHAREHOLDER NOTIFICATION OF TRUSTEE APPOINTMENT. The New Declaration
of Trust generally 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. Trustees may also 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 requires, that within three months of a Trustee
appointment, notification of such appointment be mailed to each
shareholder of the trust. The New Declaration of Trust eliminates this
notification requirement.
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 may be costly. If the New Declaration
of Trust is approved, shareholders would normally be
notified of future Trustee appointments in the next financial
report for the fund following the appointment.
OTHER CHANGES EFFECTED BY THE NEW DECLARATION OF TRUST.
In addition to the significant changes above, the New Declaration of
Trust modifies the Current Declaration of Trust in a number of
important ways, including the following:
1. The New Declaration of Trust modifies the Current Declaration of
Trust to allow FMR and the trust, on behalf of the fund, to amend the
fund's Management Contract subject to the provisions of Section 15 of
the 1940 Act, as modified or interpreted by the SEC. In contrast, the
Current Declaration of Trust explicitly requires the vote of a
majority of the outstanding voting securities of the fund to authorize
all such amendments. A corresponding change is also proposed for the
fund's Management Contract. For more information on this topic
generally, see "Modification of Management Contract Amendment
Provisions" on page .
2. The New Declaration of Trust clarifies that the Trustees may
impose other fees (for example, purchase fees) in addition to sales
charges upon investment in a fund and clarifies that deferred sales
charges and other fees (for example, redemption fees) may be imposed
upon redemption of a fund's shares.
3. The New Declaration of Trust confirms and clarifies various
existing Trustee powers. For example, the New Declaration of Trust
clarifies that the Trustees, may employ as fund custodians in addition
to banks and trust companies, companies that are members of a national
securities exchange or other entities permitted under the 1940 Act;
delegate authority to investment advisers and other agents; adopt and
offer dividend reinvestment and related plans; operate and carry on
the business of an investment company; and interpret the investment
policies, practices, and limitations of any fund.
4. The New Declaration of Trust clarifies that no shareholder of a
trust series shall have a claim on the assets of another series and
further clarifies that, by virtue of investing in a fund, a
shareholder is deemed to have assented to and agreed to be bound by
the terms of the New Declaration of Trust.
5. The New Declaration of Trust deletes various technical and/or
antiquated requirements from the Current Declaration of Trust,
including existing requirements that a Trustee vacancy be deemed to
occur when a Trustee is absent from his or her state of residence,
that Trustee vacancies must be filled within six calendar months, and
that portfolio securities be held pursuant to safeguards prescribed by
usual Massachusetts practice.
6. As a general matter, the New Declaration of Trust modifies the
Current Declaration of Trust to incorporate appropriate references to
classes of shares.
7. Lastly, the New Declaration of Trust generally expands various
1940 Act defined terms to encompass SEC modifications and
interpretations. Specific references to discrete sections of the 1940
Act that are contained in the New Declaration of Trust have likewise
been expanded to include SEC modifications and interpretations.
CONCLUSION. The Board of Trustees has concluded that the proposed
adoption of the New Declaration of Trust is in the best interests of
the trust's shareholders. Accordingly, the Trustees unanimously
recommend that the shareholders vote FOR the proposal to authorize
them to adopt and execute the New Declaration of Trust. If the
proposal is not approved, the Current Declaration of Trust will remain
unchanged and in effect.
4. TO ADOPT A NEW FUNDAMENTAL INVESTMENT POLICY FOR THE FUND
PERMITTING THE FUND TO INVEST ALL OF ITS ASSETS IN ANOTHER OPEN-END
INVESTMENT COMPANY MANAGED BY FIDELITY MANAGEMENT & RESEARCH
COMPANY OR AN AFFILIATE WITH SUBSTANTIALLY THE SAME INVESTMENT
OBJECTIVE AND POLICIES.
The Board of Trustees has approved, and recommends that shareholders
of the fund approve, the adoption of a new fundamental investment
policy that would permit the fund to invest all of its assets in
another open-end investment company managed by FMR or an affiliate
with substantially the same investment objective and policies.
Adoption of the policy would allow the Fund to participate in a
so-called "Master Feeder Fund" organizational format (Master Feeder
Fund Structure).
Participation in a Master Feeder Fund Structure would allow the fund
to combine its assets with other funds having substantially the same
investment objective and policies, but differing distribution or
servicing arrangements. By combining its assets in a central "Master
Fund" with other participating "Feeder Funds," the fund would be able
to maintain its unique distribution and servicing structure while
potentially achieving operational efficiencies through the
consolidation of portfolio management. For example, if FMR managed
three funds all with the same investment objective and policies, a
Master Feeder Fund Structure would allow FMR to manage one combined
fund (rather than three), but still offer three distinct products each
having different servicing features and pricing (e.g., one distinct
product for retail investors, a second for institutional investors and
a third for foreign investors). The purpose of a Master Feeder Fund
Structure would be to allow FMR to manage only one fund in each
investment discipline (Master Fund), but still be able to offer that
investment discipline with a variety of different servicing features
and pricing (Feeder Funds). The Master Feeder Fund Structure is
explained in more detail below. A diagram comparing a typical "stand
alone" fund structure to a Master Feeder Fund Structure is attached to
this Proxy Statement as Exhibit 2.
If the proposal is approved by shareholders, THE TRUSTEES WILL ONLY
AUTHORIZE INVESTING THE FUND'S ASSETS IN A MASTER FUND IF THEY
DETERMINE THAT A MASTER FEEDER FUND STRUCTURE IS IN THE BEST INTERESTS
OF THE FUND'S SHAREHOLDERS, and if, upon advice of counsel, they
determine that the investment will not have material adverse tax
consequences to the fund or its shareholders.
THE MASTER FEEDER FUND STRUCTURE. The term "Master Feeder Fund
Structure" refers to a two-tiered arrangement in which typically one
or more mutual funds with substantially identical investment
objectives (the Feeder Funds) combine their assets by investing in a
single investment company having the same investment objective (the
Master Fund). The Feeder Funds sell their shares to the public and
invest all of their assets in shares of the Master Fund. In turn, the
Master Fund, in accordance with its and the Feeder Funds' common
investment objective, invests its assets in appropriate portfolio
securities (e.g., stocks, bonds, or money market instruments). The
Master Fund is not offered to the public: it sells its shares only to
the Feeder Funds. The individual Feeder Funds are generally sold
through different distribution channels to discrete targeted markets,
such as retail investors, institutional investors or foreign
investors. Administrative and service features will vary among Feeder
Funds depending upon the level of service sought by the funds '
investors. Simply stated, the Master Feeder Fund Structure
consolidates portfolio management and related functions at the Master
Fund (or bottom tier) level and segregates marketing and distribution
to the Feeder Fund (or top tier) level.
The Master Feeder Fund Structure may offer certain advantages over
more traditional "stand alone" funds. For example, participating
Feeder Funds may achieve economies of scale by sharing among a greater
number of investment dollars fixed expenses of portfolio management
and fund administration. Feeder Funds may also be able to achieve
greater diversification by means of a larger portfolio of securities
than could be achieved by individual funds. In short, the Master
Feeder Fund Structure gives participating Feeder Funds the ability to
tailor services and fees for particular market segments while
providing the economies of scale available to a larger fund.
REASON FOR THE PROPOSAL. FMR and the Board of Trustees continually
review methods of structuring mutual funds to take advantage of
potential efficiencies. While neither the Board nor FMR has determined
that the fund should invest in a Master Fund, the Trustees believe it
could be in the best interests of the fund to adopt such a structure
at a future date.
At present, certain of the fund's fundamental investment policies and
limitations would prevent the fund from investing all of its assets in
a Master Fund and would require a vote of shareholders before the fund
could participate in a Master Feeder Fund Structure. These policies
include the fund's concentration limit, diversification limit and
underwriting limit. To avoid the costs associated with a subsequent
shareholder meeting, the Trustees recommend that shareholders approve
the proposal to permit the fund to invest its assets in a single
Master Fund, without a further vote of shareholders. If shareholders
approve this proposal, the above-mentioned restrictive policies would
no longer preclude the fund's investment in a Master Fund.
To allow possible future implementation of a Master Feeder Fund
Structure, an amendment to the Declaration of Trust is also proposed.
Proposal 3 requests approval for the adoption of an amended and
restated Declaration of Trust (New Declaration of Trust) that would
allow the Trustees to authorize the fund's conversion to a Master
Feeder Fund Structure when permitted by its policies. This proposal
would add a fundamental policy for the fund that permits the Master
Feeder Fund Structure.
DISCUSSION. As discussed above, FMR may manage a number of mutual
funds with similar investment objectives, policies, and limitations,
but with different features and services. Were these comparable funds
to combine their assets, operational efficiencies could be achieved,
offering the opportunity to reduce costs. Similarly, FMR anticipates
that a Master Feeder Fund Structure would facilitate the introduction
of new Fidelity mutual funds, increasing the investment options
available to shareholders.
The fund's method of operation and shareholder services would not be
materially affected by its investment in a Master Fund, except that
the assets of the fund would be managed as part of a larger fund. Were
the fund to invest all of its assets in a Master Fund, it would hold
only a single investment security (i.e., shares of the Master Fund).
The Master Fund, in turn, would directly invest in individual
securities pursuant to its investment objective (which would be
identical to the fund's investment objective). The Master Fund would
be managed by FMR or an affiliate, such as Fidelity Investments Money
Management, Inc. in the case of a money market fund.
The Trustees would retain the right to withdraw the fund's
investments from a Master Fund at any time and would do so if the
Master Fund's investment objective and policies were no longer
appropriate for the fund. The fund would then resume investing
directly in individual securities as it does currently.
If, as a Feeder Fund, the fund is asked to vote at a shareholder
meeting of the Master Fund, the fund, if required by applicable law or
its policies, would hold a meeting of its shareholders to vote on the
matters to be considered at the Master Fund shareholder meeting. The
fund would 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 a Master Feeder Fund Structure. As mentioned, the Trustees
will authorize investing the fund's assets in a Master Fund only if
they determine that a Master Feeder Fund Structure is in the best
interests of the fund's shareholders and if, upon advice of counsel,
they determine that the investment will not have material adverse tax
consequences to the fund or its shareholders. In determining whether
to invest in a Master Fund, the Trustees will consider, among other
things, the opportunity to reduce costs and to achieve operational
efficiencies. The Trustees will not authorize investment in a Master
Fund if doing so would materially increase costs (including fees) to
shareholders.
FMR may benefit from the use of a Master Feeder Fund Structure if
overall assets under management are increased (since FMR's fees are
based on assets). Also, FMR's expenses of providing investment and
other services to the fund may be reduced. If the fund's investment in
a Master Fund were to reduce FMR's expenses materially, the Trustees
would consider whether a reduction in FMR's management fee would be
appropriate if and when a Master Feeder Fund Structure is implemented.
PROPOSED FUNDAMENTAL POLICY. To allow the fund to invest in a Master
Fund at a future date, the Trustees recommend that the fund adopt the
following fundamental policy:
"The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund."
If the proposal is adopted, the Trustees intend to adopt a
non-fundamental investment limitation for the fund that 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 the fund and its shareholders. The Trustees
recommend voting FOR the proposal. Upon shareholder approval, the
fundamental limitation will become effective when disclosure is
revised to reflect the changes. If the proposal is not approved by the
shareholders of the fund, the fund's current fundamental investment
policies will remain unchanged with respect to potential investment in
Master Funds.
5. TO APPROVE AN AMENDED MANAGEMENT CONTRACT FOR THE FUND.
The Board of Trustees, including the Trustees who are not "interested
persons" of the Trust or of FMR (the Independent Trustees), has
approved, and recommends that shareholders of the fund approve, a
proposal to adopt an amended management contract with FMR (the Amended
Contract). The Amended Contract modifies several aspects of the
management fee that FMR receives from the fund for managing its
investments and business affairs. In addition, the Amended Contract
allows FMR and the trust, on behalf of the fund, to modify the
Management Contract subject to the requirements of the 1940 Act. The
existing Management Contract (Present Contract) currently requires the
vote of a majority of the fund's outstanding voting securities to
authorize all amendments. See "Modification of Management Contract
Amendment Provisions" on page for more details. (For information on
FMR, see the section entitled "Activities and Management of FMR" on
page .)
CURRENT MANAGEMENT FEE. The management fee is calculated and paid
monthly, and is normally expressed as an annual percentage of the
fund's average net assets. The fee has two components: a Basic Fee and
a Performance Adjustment. The Basic Fee is an annual percentage of the
fund's average net assets for the current month. The Basic Fee rate is
the sum of a Group Fee rate, which declines as FMR's fund assets under
management increase, and a fixed individual fund fee rate of 0.30%.
The Basic Fee rate for the fund's fiscal year ended December 31, 1997
(not including the fee amendments discussed below) was 0.6106%.
The Performance Adjustment is a positive or negative dollar amount
based on the fund's performance and assets for the most recent 36
months. If the fund outperforms the Standard & Poor's 500 Index
( S&P 500 (registered trademark)) (the Index) over 36 months,
FMR receives a positive Performance Adjustment, and if the fund
underperforms the Index, the management fee is reduced by a negative
Performance Adjustment. The Performance Adjustment is an annual
percentage of the fund's average net assets over the 36-month
performance period. The Performance Adjustment rate is 0.02% for each
percentage point of outperformance or underperformance, subject to a
maximum of 0.20% if the fund outperforms or underperforms the Index by
more than ten percentage points. Performance of the fund and the Index
are rounded to the nearest whole percentage point for purposes of the
calculation.
PROPOSED MANAGEMENT FEE AMENDMENTS. The Amended Contract would (1)
reduce the Group Fee rate further if FMR's assets under management
remain over $210 billion, (2) modify the Performance Adjustment
calculation to round the performance of the fund and the Index to the
nearest 0.01%, rather than the nearest 1.00%, and (3) allow FMR and
the trust, on behalf of the fund, to modify the Amended Contract
subject to the requirements of the 1940 Act. The Present Contract
currently requires the vote of a majority of the fund's outstanding
voting securities to authorize all amendments. See "Modification of
Management Contract Amendment Provisions" on page for more
details.
IMPACT OF GROUP FEE RATE REDUCTION. At FMR's current level of assets
under management (approximately $619 billion as of August 31, 1998 ),
the changes to the Group Fee rate reduce the management fee. FMR has
voluntarily implemented the Group Fee rate reductions pending
shareholder approval, and the Fund has paid lower management fees as a
result. For the fund's fiscal year ended December 31, 1997, the
management fee using the proposed Group Fee rate reductions
(including the Performance Adjustment) was 0.4187% of the Fund's
average net assets. The Group Fee rate reductions lowered the
management fee rate by 0.0138% compared to the rate of 0.4325% that
FMR was entitled to receive under the Present Contract.
IMPACT OF PERFORMANCE ADJUSTMENT CHANGES. The more precise rounding
method for the Performance Adjustment would not have changed the
management fee rate for the fiscal year ended December 31, 1997.
COMBINED EFFECT OF FEE CHANGE S. In the fiscal year ended
December 31, 1997, the Group Fee rate reductions and the
changes to the Performance Adjustment would have resulted in a 0.0138%
reduction in the total management fee rate . The future impact
will depend on many different factors, and may represent an increase
or decrease from the management fee under the Present Contract. The
Group Fee rate reductions will either reduce the management fee or
leave it unchanged, depending on the level of FMR's assets under
management. Calculating performance to the nearest 0.01% may increase
or decrease the Performance Adjustment, depending on whether
performance would have been rounded up or down.
A copy of the Amended Contract, marked to indicate the proposed
amendments, is supplied as Exhibit 3 on page . Except for the
material modifications discussed in this proposal, the
Amended Contract is substantially the same as the fund's
Present Contract with FMR. (For a detailed discussion of the fund's
Present Contract, refer to the section entitled "Present Management
Contract," beginning on page . ) If approved by shareholders,
the Amended Contract will take effect on the first day of the first
month following approval and will remain in effect through July 31,
1999 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 the Independent Trustees and (ii)
the vote of either a majority of the Trustees or a majority of the
outstanding shares of the fund. If the Amended Contract is not
approved, the Present Contract will continue in effect through July
31, 1999, and thereafter only as long as its continuance is approved
at least annually as described above.
MODIFICATION TO GROUP FEE RATE. The Group Fee rate varies based on
the aggregate net assets of all registered investment companies having
management contracts with FMR (group assets). As group assets
increase, the Group Fee rate declines. The Amended Contract would not
change the Group Fee rate if group assets are $210 billion or less.
Above $210 billion in group assets, the Group Fee rate declines under
both contracts, but under the Amended Contract, it declines faster.
The Group Fee rate is calculated according to a graduated schedule
providing for different rates for different levels of group assets.
The rate at which the Group Fee rate declines is determined by fee
"breakpoints" that provide for lower fee rates when group assets
increase. The Amended Contract would add 10 new, lower breakpoints
applicable when group assets are above $210 billion as illustrated in
the following table. (For an explanation of how the Group Fee rate is
used to calculate the management fee , see the section entitled
"Present Management Contract" beginning on page .)
GROUP FEE RATE BREAKPOINTS
AVERAGE GROUP PRESENT AVERAGE GROUP AMENDED
ASSETS CONTRACT ASSETS CONTRACT
($ 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 resulting Group Fee rates at various levels of group assets are
indicated below. (For an explanation of how the breakpoints are
combined to arrive at the Group Fee rate, see "Present Management
Contract" beginning on page .)
EFFECTIVE GROUP FEE RATES
Group 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%
FMR voluntarily adopted various additional Group Fee breakpoints for
group assets over $174 billion in 1993, 1994 and 1996. Although the
new fee breakpoints have not been added to the management contract
pending shareholder approval, FMR has voluntarily based its management
fee on the Group Fee schedule contained in the Amended Contract since
January 1, 1996. Group assets for August 31, 1998 were approximately
$619 billion.
MODIFICATIONS TO PERFORMANCE ADJUSTMENT - ROUNDING METHOD. The annual
Performance Adjustment rate equals 0.02% for each percentage point by
which the fund outperforms or underperforms the Index over a 36-month
performance period. Under the Present Contract, the investment
performance of both the fund and the Index are rounded to the nearest
full percentage point (for example, 15.5123% is rounded to 16%.)
Rounding to full percentage points results in the Performance
Adjustment rate being applied in 0.02% increments. In comparison,
under the Amended Contract, the investment performance of both the
fund and Index are rounded to the nearest 0.01% (using the prior
example, 15.5123% is rounded to 15.51%) prior to calculating the
difference between the fund's and the Index's investment
performance. The more precise rounding method results in a more
accurate measure of the difference in investment performance and
allows for the Performance Adjustment to be applied in 0.0002%
increments. This reduces the chance of minor changes in performance
resulting in significant changes to the Performance Adjustment, and
ultimately the fund's management fee.
During fiscal 1997, using the more precise rounding methodology,
there was no impact on the performance fee rate for the year.
COMPARISON OF MANAGEMENT FEES. The following table compares the
fund's management fee as calculated under the terms of the Present
Contract (not including FMR's voluntary implementation of the Group
Fee reductions) for fiscal 1997 to the management fee the fund would
have incurred if the Amended Contract had been in effect. Management
fees are expressed in dollars and as percentages of the fund's average
net assets for the year.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Present Contract Amended Contract Difference
$ % $ % $ %
Basic Fee 8,806,731 0.6106 8,608,122 0.5968 (198,609) (0.0138)
Performance (2,569,241) (0.1781) (2,569,241) (0.1781) 0 0
Adjustment
Total 6,237,490 0.432 5 6,038,88 1 0.418 7 (198,609) (0.0138)
Management
Fee
</TABLE>
The following table provides data concerning the fund's management
fees and expenses as a percentage of average net assets for the fiscal
year ended December 31, 1997 under the Present Contract (not including
FMR's voluntary implementation of the Group Fee reductions) and
under the Amended Contract , assuming it had been in effect
during the same period.
The following figures are based on historical expenses adjusted to
reflect current fees of the fund and are calculated as a percentage of
average net assets.
COMPARATIVE EXPENSE TABLE
ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)
Present Contract Amended Contract
Management Fee 0.43% 0.42%
12b-1 Fee None None
Other Expenses 0.23% 0.23%
Total Fund Operating Expenses 0.66% 0.65%
A portion of the brokerage commissions that the fund pays is used to
reduce the fund's expenses. The fund has entered into arrangements
with its custodian and transfer agent whereby credits realized as a
result of uninvested cash balances are used to reduce a portion of
the fund's expenses. Including these reductions, the total
operating expenses presented in the table would have been 0.60% under
the Present Contract and 0.59% under the Amended Contract.
EXAMPLE: The following illustrates the expenses on a $1,000
investment under the fees and expenses stated above, assuming (1) 5%
annual return and (2) redemption at the end of each time period:
1 Year 3 Years 5 Years 10 Years
Present Contract $7 $21 $37 $82
Amended Contract $7 $21 $36 $81
The purpose of this example and the table is to assist investors in
understanding the various costs and expenses of investing in shares of
the fund. The example above should not be considered a representation
of past or future expenses of the fund. Actual expenses may vary from
year to year and may be higher or lower than those shown above.
MODIFICATION OF MANAGEMENT CONTRACT AMENDMENT PROVISIONS. The Amended
Contract allows FMR and the trust, on behalf of the fund, to amend the
Management Contract subject to the provisions of Section 15 of the
1940 Act, as modified or interpreted by the Securities and Exchange
Commission. In contrast, the Present Contract explicitly requires the
vote of a majority of the outstanding voting securities of the fund to
authorize all amendments. Generally, the proposed modification to the
Present Contract's amendment provisions will allow FMR and the trust,
on behalf of the fund, to amend the Management Contract without
shareholder vote IF THE 1940 ACT PERMITS THEM TO DO SO. For example,
under current interpretations of Section 15 of the 1940 Act, the
Amended Contract would give FMR and the trust the ability to amend the
Management Contract to immediately reflect a management fee decrease
without the delay of having to first conduct a proxy solicitation. In
short, the proposed modification gives FMR and the trust added
flexibility to amend the Management Contract subject to 1940 Act
constraints. Of course, any future amendments to the Management
Contract would require the approval of the fund's Board of Trustees.
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 proposal to present the Amended Contract to shareholders was
approved by the Board of Trustees of the fund, including all of the
Independent Trustees, on October 16, 1997. 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
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, the Trustees received materials that relate to
the Amended Contract. These materials included: (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 results and 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, (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 and
(7) the nature, cost, and character of non-investment management
services provided by FMR and its affiliates.
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.
In considering the Amended Contract, the Board of Trustees and the
Independent Trustees did not identify any single factor as
all-important or controlling, and the following summary does not
detail all of the matters considered. Matters considered by the Board
of Trustees and the Independent Trustees 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 review at least annually 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 Present Contract and 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 marketing 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 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, 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. With regard to the proposed
modification to the Present Contract's amendment provisions, the Board
of Trustees and the Independent Trustees considered the benefit to
shareholders of FMR's and the trust's increased flexibility (within
1940 Act constraints) to amend the Management Contract without the
delays and potential costs of a proxy solicitation.
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, and the proposed modification to the Present
Contract's amendment provisions, are in the best interest of the
fund's shareholders . The Board of Trustees, including the
Independent Trustees, voted to approve the submission of the Amended
Contract to shareholders of the fund and recommends that shareholders
of the fund vote FOR the Amended Contract.
6. TO APPROVE A NEW SUB-ADVISORY AGREEMENT WITH FMR U.K. FOR THE 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 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. In addition, the
Proposed Agreement would allow FMR, FMR U.K., and the trust, on behalf
of the fund, to modify the Proposed Agreement subject to the
requirements of the 1940 Act. The existing sub-advisory agreement
currently in effect with FMR U.K. requires the vote of a majority of
the fund's outstanding voting securities to authorize all amendments.
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 16, 1997, 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. With regard to the
proposed modification to the existing sub-advisory agreement's
amendment provisions, the Trustees considered the benefit to
shareholders of FMR's, FMR U.K.'s, and the trust's increased
flexibility (within 1940 Act constraints) to amend the agreement
without the delays and potential costs of a proxy solicitation.
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
December 1, 1989, was approved by the fund's shareholders on November
15, 1989. A copy of the Proposed Agreement is attached to this proxy
statement as Exhibit 4.
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" beginning on page .
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 December 31, 1997, FMR paid FMR U.K.
$132,928 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 also allow FMR, FMR U.K., and the trust,
on behalf of the fund, to amend the Proposed Agreement subject to the
provisions of Section 15 of the 1940 Act, as modified or interpreted
by the Securities and Exchange Commission. In contrast, the Current
Agreement explicitly requires the vote of a majority of the
outstanding voting securities of the fund to authorize all amendments.
Generally, the proposed modification to the Current Agreement's
amendment provisions would allow amendment of the sub-advisory
agreement without shareholder vote ONLY IF THE 1940 ACT SO PERMITS. In
short, the proposed modification gives FMR, FMR U.K., and the trust
added flexibility to amend the sub-advisory agreement subject to 1940
Act constraints. Of course, any future amendments to the sub-advisory
agreement would require the approval of the Board of Trustees.
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 the first day of the first month following approval and would
continue in force until July 31, 1999 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 approved by
shareholders, the Proposed Agreement will take effect on the first day
of the first month following approval. If the Proposed Agreement is
not approved, FMR will continue to manage the fund and the Current
Agreement with FMR U.K. will remain in effect.
7. TO APPROVE A NEW SUB-ADVISORY AGREEMENT WITH FMR FAR EAST FOR THE
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 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. In addition, the Proposed Agreement would allow FMR, FMR
Far East, and the trust, on behalf of the fund, to modify the Proposed
Agreement subject to the requirements of the 1940 Act. The existing
sub-advisory agreement currently in effect with FMR Far East requires
the vote of a majority of the fund's outstanding voting securities to
authorize all amendments. 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 16, 1997, 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. With regard to the proposed modification to the existing
sub-advisory agreement's amendment provisions, the Trustees considered
the benefit to shareholders of FMR's, FMR Far East's, and the trust's
increased flexibility (within 1940 Act constraints) to amend the
agreement without delays and potential costs of a proxy solicitation.
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 December 1, 1989, was approved by the fund's shareholders on
November 15, 1989. A copy of the Proposed Agreement is attached to
this proxy statement as Exhibit 5.
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" beginning on page .
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 December 31, 1997, FMR paid FMR Far East
$132,971 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 also allow FMR, FMR Far East, and the
trust, on behalf of the fund, to amend the Proposed Agreement subject
to the provisions of Section 15 of the 1940 Act, as modified or
interpreted by the Securities and Exchange Commission. In contrast,
the Current Agreement explicitly requires the vote of a majority of
the outstanding voting securities of the fund to authorize all
amendments. Generally, the proposed modification to the Current
Agreement's amendment provisions would allow amendment of the
sub-advisory agreement without shareholder vote ONLY IF THE 1940 ACT
SO PERMITS. In short, the proposed modification gives FMR, FMR Far
East, and the trust added flexibility to amend the sub-advisory
agreement subject to 1940 Act constraints. Of course, any future
amendments to the sub-advisory agreement would require the approval of
the Board of Trustees.
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 the first day of the first month following approval and would
continue in force until July 31, 1999 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 approved by
shareholders, the Proposed Agreement will take effect on the first day
of the first month following approval. If the Proposed Agreement is
not approved, FMR will continue to manage the fund and the Current
Agreement with FMR Far East will remain in effect.
8. TO MAKE CERTAIN FUNDAMENTAL INVESTMENT POLICIES OF THE FUND
NON-FUNDAMENTAL.
The Board of Trustees has approved, and recommends that the
shareholders of the fund approve, a proposal that would make certain
fundamental investment policies of the fund non-fundamental.
Fundamental policies can be changed or eliminated only with
shareholder approval, while non-fundamental policies may be changed
without shareholder approval. It is anticipated that making these
policies non-fundamental will have no material impact on the way the
fund is managed.
Specifically, the Trustees propose to make the following fundamental
investment policies non-fundamental:
"FMR seeks to take advantage of trends in security values reflecting
changes in general and particular economic and financial conditions.
Purchases and sales of securities for the fund are based on FMR's
study of momentum in trends of individual company, industry, and
general market security prices and earnings, and on a fundamental
analysis of the particular company and its industry."
If shareholders approve this proposal, the Trustees intend to adopt
the foregoing policies unchanged as new non-fundamental investment
policies of the fund.
DISCUSSION OF PROPOSED MODIFICATION. Making the investment
policies above non-fundamental will allow the fund to more clearly
communicate its investment strategy in conformity with the
requirements of newly revised Form N-1A (the form used by open-end
investment companies, like the fund, to register under the Investment
Company Act of 1940 and the Securities Act of 1933). Revised Form N-1A
requires concise, understandable descriptions of investment objectives
and policies.
In addition, by making these policies non-fundamental, the
Trustees will be able to modify these policies, as necessary, to
comply with the SEC's proposed "name test rule" (Name Test Rule)
without having to incur the potential costs and delays of conducting a
shareholder meeting.
The SEC first proposed the Name Test Rule in February 1997. The
Name Test Rule governs the use of mutual fund names and, when
eventually adopted by the SEC, may apply to the fund. When a
definitive version of the rule is ultimately adopted, the foregoing
investment policies may require modification to comply with the
requirements of the definitive rule. Briefly stated, approval of the
proposal will give the Trustees the flexibility to comply more quickly
with the definitive Name Test Rule.
Approval of the proposal will not alter the fund's fundamental
investment objective requiring it to seek growth of capital by
investing in securities of well-known and established companies as
well as smaller, less well-known companies.
As mentioned, it is anticipated that approval of the proposal will
not materially affect the manner in which the fund is managed, its
investment performance 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 changes will
become effective when the disclosure is revised to reflect the
changes. If the proposal is not approved by the fund's shareholders,
the fundamental investment policies described above will remain
unchanged and in effect.
9. TO ELIMINATE CERTAIN FUNDAMENTAL POLICIES OF THE FUND.
The Board of Trustees has approved, and recommends that shareholders
of the fund approve, a proposal that would eliminate certain
fundamental investment policies of the fund. The elimination of these
policies will allow the fund to more clearly communicate its
investment strategy in conformity with the requirements of newly
revised Form N-1A (the form used by open-end investment companies,
like the fund, to register under the Investment Company Act of 1940
and the Securities Act of 1933). The elimination of these investment
policies is not expected to materially affect the way in which the
fund is managed.
Specifically, the Trustees propose to eliminate the following
fundamental investment policies:
"Securities may be purchased for the short term when FMR believes
doing so will benefit shareholders and is consistent with sound
investment procedure. There is no restriction as to the type of
security that may be purchased, and the fund may invest substantially
in cyclical or defensive industries."
DISCUSSION OF PROPOSED MODIFICATION. The fund's investment objective
and related policies (such as the policies above) have remained
essentially unchanged since the fund commenced operations in 1958. As
a result, the fund's investment strategies and policies, as currently
disclosed, are lengthier and less well defined than the strategies and
policies currently disclosed for other Fidelity funds.
If the proposal is approved, the fundamental investment policies
enumerated above would be eliminated. Eliminating these policies will
allow the fund to comply with the requirements of revised Form N-1A
for concise, understandable descriptions of its investment objectives
and policies, and will allow the fund to more clearly communicate its
investment strategy to shareholders.
Approval of the proposal will not alter the fund's fundamental
investment objective requiring it to seek growth of capital by
investing in securities of well-known and established companies as
well as smaller, less well-known companies.
As mentioned, it is anticipated that approval of the proposal will
not materially affect the manner in which the fund is managed, its
investment performance or the securities or instruments in which the
fund invests.
CONCLUSION. The Board of Trustees has concluded that the proposed
elimination of the foregoing fundamental investment policies will
benefit the fund and its shareholders. The Trustees recommend voting
FOR the proposal. If approved by shareholders, the elimination of the
policies will become effective when the disclosure is revised
to reflect the changes. If the proposal is not approved by the fund's
shareholders, the fundamental investment policies described above will
remain unchanged and in effect.
10. TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT LIMITATION CONCERNING
DIVERSIFICATION.
The fund's current fundamental investment limitation concerning
diversification is as follows:
"The fund may not with respect to 75% of the fund's total assets,
purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, (a) more than 5% of the fund's
total assets would be invested in the securities of that issuer, or
(b) the fund would hold more than 10% of the outstanding voting
securities of that issuer."
The Trustees recommend that shareholders of the fund vote to replace
the fund's current fundamental investment limitation with the
following amended fundamental investment limitation governing
diversification:
"The fund may not with respect to 75% of the fund's total assets,
purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or
instrumentalities, ((or securities of other investment companies)))
if, as a result, (a) more than 5% of the fund's total assets would be
invested in the securities of that issuer, or (b) the fund would hold
more than 10% of the outstanding voting securities of that issuer."
The percentage limits in the proposed fundamental limitation
concerning diversification are the percentage limitations imposed by
the 1940 Act for diversified investment companies. The amended
fundamental diversification limitation makes one change from the
current limitation: subject to applicable 1940 Act requirements, 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 managed by
FMR or an affiliate of FMR (the Central Funds) . The Central
Funds do not currently pay investment advisory, management, or
transfer agent fees, but do pay minimal fees for services, such as
custodian, auditor, and Independent Trustees fees. FMR anticipates
that making use of the Central Funds will benefit the fund by
enhancing the efficiency of cash management 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 the fund.
If this proposal is approved, the amended fundamental diversification
limitation cannot be changed without the approval of the shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit the fund and its shareholders. The Trustees
recommend voting FOR the proposal. The amended fundamental
diversification limitation, upon shareholder approval, will become
effective when the disclosure is revised to reflect the changes. If
the proposal is not approved by the shareholders of the fund, the
fund's current fundamental diversification limitation will remain
unchanged.
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 Trend Fund and advised by FMR is
contained in the Table of Average Net Assets and Expense Ratios in
Exhibit 6 beginning on page .
FMR, its officers and directors, its affiliated companies, and the
Trustees, from time to time have transactions with various banks,
including the custodian banks for certain of the funds advised by FMR.
Those transactions that have occurred to date have included mortgages
and personal and general business loans. In the judgment of FMR, the
terms and conditions of those transactions were not influenced by
existing or potential custodial or other fund relationships.
The Directors of FMR are Edward C. Johnson 3d, Chairman of the Board
and of the Executive Committee; Robert C. Pozen, President; and Peter
S. Lynch, Vice Chairman. Each of the Directors is also a Trustee of
the trust. Messrs. Johnson 3d, Pozen, John H. Costello, Eric D.
Roiter, Richard A. Silver, Leonard M. Rush, Ms. Abigail Johnson, and
Mr. Arieh Coll are currently officers of the trust and officers or
employees of FMR or FMR Corp. With the exception of Mr. Costello and
Mr. Silver, all of these persons hold or have options to acquire stock
of FMR Corp. The principal business address of each of the Directors
of FMR is 82 Devonshire Street, Boston, Massachusetts 02109.
All of the stock of FMR is owned by its parent company, FMR Corp., 82
Devonshire Street, Boston, Massachusetts 02109, which was organized on
October 31, 1972. Members of Mr. Edward C. Johnson 3d's family are the
predominant owners of a class of shares of common stock, representing
approximately 49% of the voting power of FMR Corp., and, therefore,
under the 1940 Act may be deemed to form a controlling group with
respect to FMR Corp.
During the period January 1, 1997 through August 31, 1998, 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 Trend 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 6 beginning on page .
The Directors of FMR U.K. and FMR Far East are Edward C. Johnson 3d,
Chairman, and Robert C. Pozen, President. Mr. Johnson 3d is also
President and a Trustee of the trust and other funds advised by
FMR; Chairman and a Director of Fidelity Investments Money Management,
Inc. (FIMM); Chairman, Chief Executive Officer, President, and a
Director of FMR Corp., and a Director and Chairman of the Board and of
the Executive Committee of FMR. In addition, Mr. Pozen is Senior Vice
President and a Trustee of the trust and of other funds advised by
FMR; President and a Director of FMR; and President and a Director of
FIMM. Each of the Directors is a stock holder of FMR Corp. The
principal business address of the Directors is 82 Devonshire Street,
Boston, Massachusetts 02109.
PRESENT MANAGEMENT CONTRACT
The fund employs FMR to furnish investment advisory and other
services. Under its management contract with the fund, FMR acts as
investment adviser and, subject to the supervision of the Board of
Trustees, directs the investments of the fund in accordance with its
investment objective, policies, and limitations. FMR also provides the
fund with all necessary office facilities and personnel for servicing
the fund's investments, compensates all officers of the fund and all
Trustees who are "interested persons" of the trust or of FMR, and all
personnel of the fund or FMR performing services relating to research,
statistical, and investment activities.
In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administrative services
necessary for the operation of the fund. These services include
providing facilities for maintaining the fund's organization;
supervising relations with custodians, transfer and pricing agents,
accountants, underwriters, and other persons dealing with the fund;
preparing all general shareholder communications and conducting
shareholder relations; maintaining the fund's records and the
registration of the fund's shares under federal and state laws;
developing management and shareholder services for the fund; and
furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees. Services provided by affiliates of FMR will continue
under the proposed management contract described in proposal 5.
In addition to the management fee payable to FMR, the 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 the fund's
current management contract provides that the fund will pay for
typesetting, printing, and mailing prospectuses, statements of
additional information, notices, and reports to shareholders, the
trust, on behalf of the fund has entered into a revised transfer agent
agreement with FSC, pursuant to which FSC bears the costs of providing
these services to existing shareholders. Other expenses paid by the
fund include interest, taxes, brokerage commissions, and the fund's
proportionate share of insurance premiums and Investment Company
Institute dues. The fund is also liable for such non-recurring
expenses as may arise, including costs of any litigation to which the
fund may be a party, and any obligation it may have to indemnify 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 the fund for
fiscal 1997 amounted to $2,956, 000.
The fund also has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer
registered under the Securities Exchange Act of 1934 and is a member
of the National Association of Securities Dealers, Inc. The
distribution agreement calls for FDC to use all reasonable efforts,
consistent with its other business, to secure purchasers for shares of
the fund, which are continuously offered at net asset value per share.
Promotional and administrative expenses in connection with the offer
and sale of shares are paid by FMR.
FMR is the fund's manager pursuant to a management contract dated
August 1, 1993, which was approved by shareholders on July 14, 1993.
Shareholder approval had been requested for changes affecting the
basic fee portion of the total management fee that FMR receives from
the fund. The approved contract modified the group fee by providing
for lower fee rates if FMR's assets under management remain above $138
billion, and also raised the individual fund fee rate from 0.12% to
0.30%.
For the services of FMR under the management contract, the fund pays
FMR a monthly management fee which has two components: a basic fee,
which is the sum of a group fee rate and an individual fund fee rate,
and a performance adjustment based on a comparison of the fund's
performance to that of the S&P 500.
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 $550 billion of group net assets - the approximate level for
December 1997 - was 0.2942%, which is the weighted average of the
respective fee rates for each level of group net assets up to $550
billion.
On January 1, 1996, August 1, 1994, and November 1, 1993, FMR
voluntarily modified the breakpoints in the group fee rate schedule.
The revised group fee rate schedule, depicted below, provides for
lower management fee rates as FMR's assets under management increase.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Annualized Group Net Effective Annual
Assets Rate Assets 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 .3249
36 - 42 .3400 250 .3219
42 - 48 .3350 275 .3190
48 - 66 .3250 300 .3163
66 - 84 .3200 325 .3137
84 - 102 .3150 350 .3113
102 - 138 .3100 375 .3090
138 - 174 .3050 400 .3067
174 - 210 .3000 425 .3046
210 - 246 .2950 450 .3024
246 - 282 .2900 475 .3003
282 - 318 .2850 500 .2982
318 - 354 .2800 525 .2962
354 - 390 .2750 550 .2942
390 - 426 .2700
426 - 462 .2650
462 - 498 .2600
498 - 534 .2550
Over 534 .2500
The fund's individual fund fee rate is 0.30%. Based on the average
group net assets of the funds advised by FMR for December 31, 1997,
the fund's annual basic fee rate would be calculated as follows:
Group Fee Rate Individual Fund Fee Rate Basic Fee Rate
0.2942% + 0.30% = 0.5942%
One-twelfth of this annual basic fee rate is applied to the fund's
net assets averaged for the most recent month, giving a dollar amount,
which is the fee for that month.
COMPUTING THE PERFORMANCE ADJUSTMENT. The basic fee for the fund is
subject to upward or downward adjustment, depending upon whether, and
to what extent, the fund'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
most recent month plus the previous 35 months. Each percentage point
of difference, calculated to the nearest 1.00% (up to a maximum
difference of +/-10.00 ) is multiplied by a performance adjustment
rate of 0.02%. Thus, the maximum annualized adjustment rate is
+/-0.20%. 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.
The fund's performance is calculated based on change in net asset
value (NAV). 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 NAV 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 the fund'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 the
fund is based solely on the relevant performance period without regard
to the cumulative performance over a longer or shorter period of time.
During fiscal 1997, FMR received $6,03 9,000 for its services
as investment adviser to the fund. This fee, which includes both the
basic fee and the performance adjustment, was equivalent to 0.4187% of
the average net assets of the fund. For 1997, the downward performance
adjustment amounted to $2,569, 000 for the fund.
FMR may, from time to time, agree to reimburse all or a portion of
the fund's total 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.
SUB-ADVISORY AGREEMENTS
On behalf of Fidelity Trend 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. The
sub-advisory agreements, dated December 1, 1989, were approved by
shareholders on November 15, 1989.
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.
For providing investment advice and research services, the fees paid
to the sub-advisers for the fiscal year ended 1997 were as follows:
FMR U.K. FMR Far East
$132,928 $132,971
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are
placed on behalf of the fund by FMR pursuant to authority
contained in the fund's management contract.
FMR may place agency transactions with National Financial Services
Corporation (NFSC) and Fidelity Brokerage Services (Japan), LLC
(FBSJ), indirect subsidiaries of FMR Corp., if the commissions are
fair, reasonable, and comparable to commissions charged by
non-affiliated, qualified brokerage firms for similar services. Prior
to December 9, 1997, FMR used research services provided by and placed
agency transactions with Fidelity Brokerage Services (FBS), an
indirect subsidiary of FMR Corp.
During fiscal 1997, the fund paid brokerage commissions of $903,000
to NFSC and $127,000 to FBS. During fiscal 1997, this amounted to
approximately 14.18% and 1.99%, respectively, of the aggregate
brokerage commissions paid by the fund.
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.,
P.O. Box 789, Boston, Massachusetts 02102, 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
EXHIBIT 1
((UNDERLINED)) LANGUAGE WILL BE ADDED;
[BRACKETED] LANGUAGE WILL BE DELETED.
FORM OF AMENDED AND RESTATED DECLARATION OF TRUST
(HEADINGS THAT WERE UNDERLINED IN THE TRUST'S CURRENT AMENDED AND
RESTATED DECLARATION OF TRUST REMAIN UNDERLINED IN THIS EXHIBIT.)
[RESTATED] ((AMENDED AND RESTATED)) DECLARATION OF TRUST
[DATED February 16, 1995]
((DATED ______, 199_))
((AMENDED AND)) RESTATED DECLARATION OF TRUST, made [February 16,
1995](( ______, 199_)) by each of the Trustees whose signature is
affixed hereto (the "Trustees")((.))
WHEREAS, the Trustees desire to ((amend and)) restate this
Declaration of Trust for the sole purpose of supplementing the
Declaration ((of Trust)) to incorporate amendments duly adopted; and
WHEREAS, this Trust was initially made on September 18, 1984 by
Edward C. Johnson 3d, Caleb Loring, Jr., and Frank Nesvet (the
"Trustees") in order to establish a trust fund for the investment and
reinvestment of funds contributed thereto;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust fund hereunder shall be held and managed in
[T]((t))rust under this ((Amended and)) Restated Declaration of Trust
as herein set forth below.
ARTICLE I
NAME AND DEFINITIONS
NAME
SECTION 1. This Trust shall be known as "Fidelity Trend Fund((.))"[.]
DEFINITIONS
SECTION 2. Wherever used herein, unless otherwise required by the
context or specifically provided:
(a) The [T]((t))erms "Affiliated Person((,))" [,]"Assignment((,))"[,]
"Commission((,))"[,] "Interested Person((,))"[,] "Majority Shareholder
Vote" (the 67% or 50% requirement of the third sentence of Section
2(a)(42) of the 1940 Act, whichever may be applicable)((,)) and
"Principal Underwriter" shall have the meanings given them in the 1940
Act, as [amended from time to time] ((modified by or interpreted by
any applicable order or orders of the Commission or any rules or
regulations adopted or interpretative releases of the Commission
thereunder;
(b) "Bylaws" shall mean the bylaws of the Trust, if any, as amended
from time to time;
(c) "Class" refers to the class of Shares of a Series of the Trust
established in accordance with the provisions of Article III;
(d) "Declaration of Trust" means this Amended and Restated
Declaration of Trust, as further amended or restated, from time to
time;))
[(c)](((e))) "Net Asset Value" means the net asset value of each
Series of the Trust ((or Class thereof)) determined in the manner
provided in Article X, Section 3;
[(d)](((f))) "Shareholder" means a record owner of Shares of the
Trust;
[(f)](((g))) "Shares" means the equal proportionate transferable
units of interest into which the beneficial interest of ((the Trust
or)) each Series shall be divided from time to time, [and
includes]((including such Class or Classes of Shares as the Trustees
may from time to time create and establish including)) fractions of
[s]((S))hares as well as whole [s]((S))hares ((as)) consistent with
the requirements of Federal and/or [other] ((state)) securities laws;
[and]
(h) "Series" refers to ((any)) series of Shares of the Trust
established in accordance with the provisions of Article III[.]((;))
[(b)](((i))) [The] "Trust" refers to Fidelity Trend Fund and
reference to the Trust, when applicable to one or more Series of the
Trust, shall refer to any such Series;
[(e)] (((j))) [The] "Trustees" refer to the individual trustees in
their capacity as trustees hereunder of the Trust and their successor
or successors for the time being in office as such trustee or
trustees; ((and))
[(g)] (((k))) [The] "1940 Act" refers to the Investment Company Act
of 1940, as amended from time to time.
ARTICLE II
PURPOSE OF TRUST
The purpose of this Trust is to provide investors a continuous source
of managed investment in securities.
ARTICLE III
BENEFICIAL INTEREST
SHARES OF BENEFICIAL INTEREST
SECTION 1. The beneficial interest in the Trust shall be divided into
such transferable Shares of one or more separate and distinct Series
((or Classes of Series)) as the Trustees shall((,)) from time to
time((,)) create and establish. The number of ((authorized)) Shares
((of each Series, and Class thereof,)) is unlimited((.)) [and
each]((Each)) Share shall be without par value and shall be fully paid
and nonassessable. The Trustees shall have full power and authority,
in their sole discretion((,)) and without obtaining any prior
authorization or vote of the ((Shareholders of any Series or Class))
of the Trust (((a))) to create and establish (and to change in any
manner) Shares ((or any Series or Classes thereof)) with such
preferences, voting powers, rights((,)) and privileges as the Trustees
may((,)) from time to time((,)) determine[,]((; (b))) to divide or
combine the Shares ((or any Series or Classes thereof)) into a greater
or lesser ((number))[,]((; (c))) to classify or reclassify any issued
Shares into one or more Series ((or Classes)) of ((Shares))[,]((;
(d))) to abolish any one or more Series ((or Classes)) of Shares[,]
((;)) and (((e))) to take such other action with respect to the Shares
as the Trustees may deem desirable.
[ESTABLISHMENT OF SERIES]
((ESTABLISHMENT OF SERIES AND CLASSES))
SECTION 2. The establishment of any Series ((or Class thereof)) shall
be effective upon the adoption of a resolution by a majority of the
then Trustees setting forth such establishment and designation and the
relative rights and preferences of the Shares of such Series ((or
Class)). At any time that there are no Shares outstanding of any
particular Series ((or Class)) previously established and designated,
the Trustees may by a majority vote abolish [that] ((such)) Series
((or Class)) and the establishment and designation thereof.
OWNERSHIP OF SHARES
SECTION 3. The ownership of Shares shall be recorded in the books of
the Trust ((or a transfer or similar agent)). The Trustees may make
such rules as they consider appropriate for the transfer of Shares and
similar matters. The record books of the Trust ((as kept by the Trust
or by any transfer or similar agent, as the case may be,)) shall be
conclusive as to who are the holders of Shares and as to the number of
Shares held from time to time by each Shareholder.
INVESTMENT IN THE TRUST
SECTION 4. The Trustees shall accept investments in the Trust from
such persons and on such terms as they may((,)) from time to time((,))
authorize. Such investments may be in the form of cash((,)) [or]
securities((, or other property)) in which the appropriate Series is
authorized to invest, valued as provided in Article X, Section 3.
After the date of the initial contribution of capital, the number of
Shares to represent the initial contribution may in the Trustees'
discretion be considered as outstanding((,)) and the amount received
by the Trustees on account of the contribution shall be treated as an
asset of the Trust. Subsequent investments in the Trust shall be
credited to each Shareholder's account in the form of full Shares at
the Net Asset Value per Share next determined after the investment is
received; provided, however, that the Trustees may, in their sole
discretion[,] (a) impose a sales charge ((or other fee)) upon
investments in the Trust ((or Series or any Classes thereof,)) and (b)
issue fractional Shares.
[ASSETS AND LIABILITIES OF SERIES]
((ASSETS AND LIABILITIES OF SERIES AND CLASSES))
SECTION 5. All consideration received by the Trust for the issue or
sale of Shares of a particular Series, together with all assets in
which such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof, including any proceeds
derived from the sale, exchange((,)) or liquidation of such assets,
and any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall be referred to as
"assets belonging to" that Series. In addition((,)) any assets,
income, earnings, profits, and proceeds thereof, funds, or payments
[which] ((that)) are not readily identifiable as belonging to any
particular Series ((or Class)), shall be allocated by the Trustees
between and among one or more of the Series ((or Classes)) in such
manner as they, in their sole discretion, deem fair and equitable.
Each such allocation shall be conclusive and binding upon the
Shareholders of all Series ((or Classes)) for all purposes[,] and
shall be referred to as assets belonging to that Series ((or Class)).
The assets belonging to a particular Series shall be so recorded upon
the books of the Trust[,] ((or of its agent or agents)) and shall be
held by the Trustees in [T]((t))rust for the benefit of the holders of
Shares of that Series.
The assets belonging to each particular Series shall be charged with
the liabilities of that Series and all expenses, costs, charges((,))
and reserves attributable to that Series((, except that liabilities
and expenses may, in the Trustees' discretion, be allocated solely to
a particular Class and, in which case, shall be borne by that Class)).
Any general liabilities, expenses, costs, charges((,)) or reserves of
the Trust [which] ((that)) are not readily identifiable as belonging
to any particular Series ((or Class)) shall be allocated and charged
by the Trustees between or among any one or more of the Series ((or
Classes)) in such manner as the Trustees((,)) in their sole
discretion((,)) deem fair and equitable[,] and shall be referred to as
"liabilities belonging to" that Series ((or Class)). Each such
allocation shall be conclusive and binding upon the Shareholders of
all Series ((or Classes)) for all purposes. Any creditor of any Series
may look only to the assets of that Series to satisfy such creditor's
debt. ((No Shareholder or former Shareholder of any Series shall have
a claim on or any right to any assets allocated or belonging to any
other Series)).
NO PREEMPTIVE RIGHTS
SECTION 6. Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued by the
Trust or the Trustees.
[LIMITATION OF PERSONAL LIABILITY]
((STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY))
SECTION 7. ((Shares shall be deemed to be personal property giving
only the rights provided in this instrument. Every shareholder by
virtue of having become a shareholder shall be held to have expressly
assented and agreed to be bound by the terms hereof. No Shareholder of
the Trust and of each Series shall be personally liable for the debts,
liabilities, obligations, and expenses incurred by, contracted for, or
otherwise existing with respect to, the Trust or by or on behalf of
any Series.)) The Trustees shall have no power to bind any Shareholder
personally or to call upon any ((S))[s]hareholder for the payment of
any sum of money or assessment whatsoever other than such as the
Shareholder may((,)) at any time((,)) personally agree to pay by way
of subscription for any Shares or otherwise. Every note, bond,
contract((,)) or other undertaking issued by or on behalf of the Trust
or the Trustees relating to the Trust ((or to a Series)) shall include
a recitation limiting the obligation represented thereby to the Trust
((or to one or more Series)) and its ((or their)) assets (but the
omission of such a recitation shall not operate to bind any
Shareholder ((or Trustee))).
ARTICLE IV
THE TRUSTEES
MANAGEMENT OF THE TRUST
SECTION 1. The business and affairs of the Trust shall be managed by
the Trustees, and they shall have all powers necessary and desirable
to carry out that responsibility.
[ELECTION: INITIAL TRUSTEES]
((INITIAL TRUSTEES; ELECTION))
SECTION 2. ((The initial Trustees shall be at least three individuals
who shall affix their signatures hereto.)) On a date fixed by the
Trustees, the Shareholders shall elect not less than three Trustees. A
Trustee shall not be required to be a Shareholder of the Trust. [The
initial Trustees shall be Edward C. Johnson 3d, Caleb Loring, Jr. and
Frank Nesvet and such other individuals as the Board of Trustees shall
appoint pursuant to Section 4 of the Article IV.]
TERM OF OFFICE OF TRUSTEES
SECTION 3. The Trustees shall hold office during the lifetime of this
Trust, and until its termination as hereinafter provided; except (a)
that any Trustee may resign his trust by written instrument signed by
him and delivered to the other Trustees, which shall take effect upon
such delivery or upon such later date as is specified therein; (b)
that any Trustee may be removed at any time by written instrument,
signed by at least two-thirds (((2/3))) of the number of Trustees
prior to such removal, specifying the date when such removal shall
become effective; (c) that any Trustee who requests in writing to be
retired or who has become incapacitated by illness or injury may be
retired by written instrument signed by a majority of the other
Trustees, specifying the date of his retirement; and (d) a Trustee may
be removed at any [S]((s))pecial [M]((m))eeting of the Trust by a vote
of two-thirds (((2/3))) of the outstanding Shares.
RESIGNATION AND APPOINTMENT OF TRUSTEES
SECTION 4. In case of the declination, death, resignation,
retirement, ((or)) removal[, incapacity, or inability] of any of the
Trustees, or in case a vacancy shall, by reason of an increase in
number ((of the Trustees)), 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 ((Act)). 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
[t]((T))rust, the [t]((T))rust 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
((foregoing)) power of appointment is subject to the provisions of
Section 16(a) of the 1940 Act ((, as modified by or interpreted by any
applicable order or orders of the Commission or any rules or
regulations adopted or interpretative releases of the Commission)).
[TEMPORARY ABSENCE OF TRUSTEES
((TEMPORARY ABSENCE OF TRUSTEES))
SECTION 5. Any Trustee may, by power of attorney, delegate his power
for a period not exceeding six (((6))) months at any one time to any
other Trustee or Trustees, provided that in no case shall less than
two Trustees personally exercise the other powers hereunder except as
herein otherwise expressly provided.
NUMBER OF TRUSTEES
SECTION 6. The number of Trustees, not less than three (3) nor more
than twelve (12), serving hereunder at any time shall be determined by
the Trustees themselves.
Whenever a vacancy in the Board of Trustees shall occur, until such
vacancy is filled, or while any Trustee [is absent from the
Commonwealth of Massachusetts or, if not a domiciliary of
Massachusetts, is absent from his state of domicile, or] is physically
or mentally incapacitated by reason of disease or otherwise, the other
Trustees shall have all the powers hereunder and the certificate of
the other Trustees of such vacancy[, absence] or incapacity[,] shall
be conclusive[, provided, however, that no vacancy shall remain
unfilled for a period longer than six calendar months].
EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE
SECTION 7. The death, declination, resignation, retirement, removal,
incapacity, or inability of the Trustees, or any one of them, shall
not operate to annul the Trust or to revoke any existing agency
created pursuant to the terms of this Declaration of Trust.
OWNERSHIP OF ASSETS OF THE TRUST
SECTION 8. The assets of the Trust shall be held separate and apart
from any assets now or hereafter held in any capacity other than as
Trustee hereunder by the Trustees or any successor Trustees. All of
the assets of the Trust shall at all times be considered as vested in
the Trustees. No Shareholder shall be deemed to have a severable
ownership in any individual asset of the Trust or any right of
partition or possession thereof, but each Shareholder shall have a
proportionate undivided beneficial interest in the Trust.
ARTICLE V
POWERS OF THE TRUSTEES
POWERS
SECTION 1. The Trustees((,)) in all instances((,)) shall act as
principals[,] and are and shall be free from the control of the
Shareholders. The Trustees shall have full power and authority to do
any and all acts and to make and execute any and all contracts and
instruments that they may consider necessary or appropriate in
connection with the management of the Trust. ((Except as otherwise
provided herein or in the 1940 Act,)) [T]((t))he Trustees shall not in
any way be bound or limited by present or future laws or customs in
regard to trust investments, but shall have full authority and power
to make any and all investments [which] ((that)) they, in their
[uncontrolled] discretion, shall deem proper to accomplish the purpose
of this Trust. Subject to any applicable limitation in [the] ((this))
Declaration of Trust or the Bylaws of the Trust, ((if any,)) the
Trustees shall have power and authority:
(a) To invest and reinvest cash and other property, and to hold cash
or other property uninvested[,] without((,)) in any event((,)) being
bound or limited by any present or future law or custom in regard to
investments by Trustees, and to sell, exchange, lend, pledge,
mortgage, hypothecate, write options on((,)) and lease any or all of
the assets of the Trust.
(b) To adopt Bylaws not inconsistent with this Declaration of Trust
providing for the conduct of the business of the Trust and to amend
and repeal them to the extent that they do not reserve that right to
the Shareholders.
(c) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate.
(d) To employ [a] ((one or more)) banks((,)) [or] trust [company]
((companies, companies that are members of a national securities
exchange, or other entities permitted under the 1940 Act, as modified
by or interpreted by any applicable order or orders of the Commission
or any rules or regulations adopted or interpretative releases of the
Commission thereunder,)) as custodian((s)) of any assets of the Trust
subject to any conditions set forth in this Declaration of Trust or in
the Bylaws, if any.
(e) To retain a transfer agent and Shareholder servicing agent, or
both.
(f) To provide for the distribution of interests of the Trust either
through a [p]((P))rincipal [u]((U))nderwriter in the manner
hereinafter provided for or by the Trust itself, or both.
(g) To set record dates in the manner hereinafter provided for.
(h) To delegate such authority as they consider desirable to any
officers of the Trust and to any [agent] ((investment adviser,
manager,)) custodian((,)) [or] underwriter, ((or other agent or
independent contractor)).
(i) To sell or exchange any or all of the assets of the Trust,
subject to the provisions of Article XII, Section 4[(b)] hereof.
(j) To vote or give assent[,] or exercise any rights of ownership[,]
with respect to stock or other securities or property; and to execute
and deliver powers of attorney to such person or persons as the
Trustees shall deem proper, granting to such person or persons such
power and discretion with relation to securities or property as the
Trustees shall deem proper.
(k) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities.
(l) To hold any security or property in a form not indicating any
trust, whether in bearer, unregistered((,)) or other negotiable form;
or either in its own name or in the name of a custodian or a nominee
or nominees[, subject in either case to proper safeguards according to
the usual practice of Massachusetts trust companies or investment
companies].
(m) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes in
accordance with the provisions of Article III ((and to establish
Classes of such Series having relative rights, powers, and duties as
the Trustees may provide consistent with applicable laws)).
(n) To allocate assets, liabilities((,)) and expenses of the Trust to
a particular Series ((or Class, as appropriate,)) or to apportion the
same between or among two or more Series ((or Classes, as
appropriate)), provided that any liabilities or expenses incurred by a
particular Series ((or Class)) shall be payable solely out of the
assets belonging to that Series as provided for in Article III.
(o) To consent to or participate in any plan for the reorganization,
consolidation, or merger of any corporation or concern, any security
of which is held in the Trust; to consent to any contract, lease,
mortgage, purchase, or sale of property by such corporation or
concern, and to pay calls or subscriptions with respect to any
security held in the Trust.
(p) To compromise, arbitrate, or otherwise adjust claims in favor of
or against the Trust or any matter in controversy((,)) including, but
not limited to, claims for taxes.
(q) To make distributions of income and of capital gains to
Shareholders in the manner hereinafter provided for.
(r) To borrow money, and to pledge, mortgage((,)) or hypothecate the
assets of the Trust, subject to ((the)) applicable [limitations]
((requirements)) of the 1940 Act.
(s) To establish, from time to time, a minimum total investment for
Shareholders[,] and to require the redemption of the Shares of any
Shareholders whose investment is less than such minimum upon giving
notice to such Shareholder.
(((t) To operate as and carry on the business of an investment
company and to exercise all the powers necessary and appropriate to
the conduct of such operations.
(u) To interpret the investment policies, practices or limitations of
any Series.
(v) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary,
suitable or proper for the accomplishment of any purpose or the
attainment of any object or the furtherance of any power hereinbefore
set forth, either alone or in association with others, and to do every
other act or thing incidental or appurtenant to or growing out of or
connected with the aforesaid business or purposes, objects or powers.
(w) 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.
The foregoing clauses shall be construed both as objects and powers,
and the foregoing enumeration of specific powers shall not be held to
limit or restrict in any manner the general powers of the Trustees.
Any action by one or more of the Trustees in their capacity as such
hereunder shall be deemed an action on behalf of the Trust or the
applicable Series and not an action in an individual capacity.
The Trustees shall not be limited to investing in obligations
maturing before the possible termination of the Trust or any Series or
Class thereof.))
No one dealing with the Trustees shall be under any obligation to
make any inquiry concerning the authority of the Trustees, or to see
to the application of any payments made or property transferred to the
Trustees or upon their order.
TRUSTEES AND OFFICERS AS SHAREHOLDERS
[Section 2. In case any holder of record of Shares of a particular
Series desires to dispose of his Shares, he may deposit at the office
of the transfer agent or other authorized agent of that Series a
written request or such other form of request as the Trustees may from
time to time authorize, requesting that the Series purchase the Shares
in accordance with this Section 2; and the Shareholder so requesting
shall be entitled to require the Series to purchase, and the Series or
the principal underwriter of the Series shall purchase his said
Shares, but only at the Net Asset Value thereof (as described in
Section 3 hereof). The Series shall make payment for any such Shares
to be redeemed, as aforesaid, in cash or property from the assets of
that Series and payment for such Shares shall be made by the Series or
the principal underwriter of the Series to the Shareholder of record
within seven (7) days after the date upon which the request is
effective.]
((SECTION 2. Any Trustee, officer or other agent of the Trust may
acquire, own and dispose of Shares to the same extent as if he were
not a Trustee, officer or agent; and the Trustees may issue and sell
or cause to be issued and sold Shares to and buy such Shares from any
such person of any firm or company in which he is interested, subject
only to the general limitations herein contained as to the sale and
purchase of such Shares; and all subject to any restrictions which may
be contained in the Bylaws, if any.))
ACTION BY THE TRUSTEES
SECTION 3. ((Except as otherwise provided herein or in the 1940
Act,)) [T]((t))he Trustees shall act by majority vote at a meeting
duly called or by unanimous written consent without a meeting or by
telephone consent provided a quorum of Trustees participate in any
such telephonic meeting, unless the 1940 Act requires that a
particular action be taken only at a meeting [of] ((at which)) the
Trustees ((are present in person)). At any meeting of the Trustees, a
majority of the Trustees shall constitute a quorum. Meetings of the
Trustees may be called orally or in writing by the Chairman of the
Trustees or by any two other Trustees. Notice of the time, date, and
place of all meetings of the Trustees shall be given by the party
calling the meeting to each Trustee by telephone((, telefax,)) [or]
telegram((,or other electro-mechanical means)) sent to his home or
business address at least twenty-four (((24))) hours in advance of the
meeting or by written notice mailed to his home or business address at
least seventy-two (((72))) hours in advance of the meeting. Notice
need not be given to any Trustee who attends the meeting without
objecting to the lack of notice or who executes a written waiver of
notice with respect to the meeting. Subject to the requirements of the
1940 Act, the Trustees by majority vote may delegate to any one of
their number their authority to approve particular matters or take
particular actions on behalf of the Trust. ((Written consents or
waivers of Trustees may be executed in one or more counterparts.
Execution of a written consent or waiver and delivery thereof to the
Trust may be accomplished by telefax or other electro-mechanical
means.))
CHAIRMAN OF THE TRUSTEES
SECTION 4. The Trustees may appoint one of their number to be
Chairman of the Board of Trustees. The Chairman shall preside at all
meetings of the Trustees, shall be responsible for the execution of
policies established by the Trustees and the administration of the
Trust, and may be the chief executive, financial and accounting
officer of the Trust.
ARTICLE VI
EXPENSES OF THE TRUST
TRUSTEE REIMBURSEMENT
SECTION 1. Subject to the provisions of Article III, Section 5, the
Trustees shall be reimbursed from the Trust estate or the assets
belonging to the appropriate Series for their expenses and
disbursements, including, without limitation, fees and expenses of
Trustees who are not Interested Persons of the Trust[,]((;)) interest
expense, taxes, fees and commissions of every kind[,]((;)) expenses of
pricing Trust portfolio securities[,]((;)) expenses of issue,
repurchase and redemption of shares including expenses attributable to
a program of periodic repurchases or redemptions, expenses of
registering and qualifying the Trust and its Shares under Federal and
[S]((s))tate laws and regulations[,]((;)) charges of custodians,
transfer agents, and registrars[,]((;)) expenses of preparing and
setting up in type [P]((p))rospectuses and [S]((s))tatements of
[A]((a))dditional [I]((i))nformation[,]((;)) expenses of printing and
distributing prospectuses sent to existing Shareholders[,]((;))
auditing and legal expenses[,]((;)) reports to Shareholders[,]((;))
expenses of meetings of Shareholders and proxy solicitations
therefor[,]((;)) insurance expense[,]((;)) association membership
dues((;)) and for such non-recurring items as may arise, including
litigation to which the Trust is a party[,]((;)) and for all losses
and liabilities by them incurred in administering the Trust, and for
the payment of such expenses, disbursements, losses((,)) and
liabilities the Trustees shall have a lien on the assets belonging to
the appropriate Series prior to any rights or interests of the
Shareholders thereto. This section shall not preclude the Trust from
directly paying any of the aforementioned fees and expenses.
ARTICLE VII
[INVESTMENT ADVISER, PRINCIPAL UNDERWRITER AND TRANSFER AGENT]
((INVESTMENT ADVISER, PRINCIPAL UNDERWRITER, AND TRANSFER AGENT))
INVESTMENT ADVISER
SECTION 1. Subject to a Majority Shareholder Vote, the Trustees may,
in their discretion ((and)) from time to time((,)) enter into an
investment advisory or management contract(s) with respect to the
Trust or any Series thereof whereby the other party(ies) to such
contract(s) shall undertake to furnish the Trustees such management,
investment advisory, statistical((,)) and research facilities and
services and such other facilities and services, if any, and all upon
such terms and conditions, as the Trustees may((,)) in their
discretion((,)) determine. Notwithstanding any provisions of this
Declaration of Trust, the Trustees may authorize the investment
adviser(s) (subject to such general or specific instructions as the
Trustees may from time to time adopt) to effect purchases, sales or
exchanges of portfolio securities and other investment instruments of
the Trust on behalf of the Trustees or may authorize any officer,
agent, or Trustee to effect such purchases, sales((,)) or exchanges
pursuant to recommendations of the investment adviser (and all without
further action by the Trustees). Any such purchases, sales((,)) and
exchanges shall be deemed to have been authorized by all of the
Trustees.
The Trustees may, subject to applicable requirements of the 1940 Act,
((as modified by or interpreted by any applicable order or orders of
the Commission or any rules or regulations adopted or interpretative
releases of the Commission thereunder,)) including those relating to
Shareholder approval, authorize the investment adviser to employ one
or more ((sub-advisers))from time to time to perform such of the acts
and services of the investment adviser, and upon such terms and
conditions, as may be agreed upon between the investment adviser and
((sub-adviser.))
PRINCIPAL UNDERWRITER
SECTION 2. The Trustees may in their discretion from time to time
enter into [(a)] ((an exclusive or non-exclusive)) contract(s) ((on
behalf of the Trust or any Series or Class thereof)) providing for the
sale of the Shares, whereby the Trust may either agree to sell the
Shares to the other party to the contract or appoint such other party
its sales agent for such Shares. In either case, the contract shall be
on such terms and conditions as may be prescribed in the Bylaws, if
any, and such further terms and conditions as the Trustees may((,)) in
their discretion((,)) determine not inconsistent with the provisions
of this Article VII[,] or of the Bylaws, if any[;]((.)) [and]
[s]((S))uch contract may also provide for the repurchase or sale of
Shares by such other party as principal or as agent of the Trust.
TRANSFER AGENT
SECTION 3. The Trustees may((,)) in their discretion ((and)) from
time to time((,)) enter into [a] ((one or more)) transfer agency and
Shareholder service contract((s)) whereby the other party shall
undertake to furnish the Trustees with transfer agency and Shareholder
services.[The]((Such)) contract((s)) shall be on such terms and
conditions as the Trustees may((, ))in their discretion((,)) determine
not inconsistent with the provisions of this Declaration of Trust or
of the Bylaws, if any. Such services may be provided by one or more
entities.
PARTIES TO CONTRACT
SECTION 4. Any contract of the character described in Sections 1, 2
and 3 of this Article VII or in Article IX hereof may be entered into
with any corporation, firm, partnership, trust or association,
although one or more of the Trustees or officers of the Trust may be
an officer, director, trustee, shareholder, or member of such other
party to the contract, and no such contract shall be invalidated or
rendered voidable by reason of the existence of any relationship, nor
shall any person holding such relationship be liable merely by reason
of such relationship for any loss or expense to the Trust under or by
reason of said contract or accountable for any profit realized
directly or indirectly therefrom, provided that the contract when
entered into was reasonable and fair and not inconsistent with the
provisions of this Article VII or the Bylaws, if any. The same person
(including a firm, corporation, partnership, trust, or association)
may be the other party to contracts entered into pursuant to Sections
1, 2 and 3 above or Article IX, and any individual may be financially
interested or otherwise affiliated with persons who are parties to any
or all of the contracts mentioned in this Section 4.
PROVISIONS AND AMENDMENTS
SECTION 5. Any contract entered into pursuant to Sections 1 and 2 of
this Article VII shall be consistent with and subject to the
requirements of Section 15 of the 1940 Act((, as modified by or
interpreted by any applicable order or orders of the Commission or any
rules or regulations adopted or interpretative releases of the
Commission)) ([including any amendments thereof] or other applicable
Act of Congress hereafter enacted)((,)) with respect to its
continuance in effect, ((its amendment,)) its termination, and the
method of authorization and approval of such contract or renewal
thereof[, and no amendment to any contract, entered into pursuant to
Section 1 shall be effective unless assented to by a Majority
Shareholder Vote].
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
SECTION 1. The Shareholders shall have power to vote [(i)](((a))) for
the election of Trustees as provided in Article IV, Section 2[,
(ii)]((; (b))) for the removal of Trustees as provided in Article IV,
Section 3(d)[, (iii)]((; (c))) with respect to any investment advisory
or management contract as provided in Article VII, Section((s)) 1
((and 5))[, (iv)]((; (d) with respect to any termination, merger,
consolidation, reorganization, or sale of assets of the Trust or any
of its Series or Classes as provided in Article XII, Section 4; (e)))
with respect to the amendment of this Declaration of Trust as provided
in Article XII, Section 7[, (v)]((; (f))) to the same extent as the
shareholders of a Massachusetts business corporation, as to whether or
not a court action, proceeding or claim should be brought or
maintained derivatively or as a class action on behalf of the Trust or
the Shareholders, provided, however, that a Shareholder of a
particular Series shall not be entitled to bring any derivative or
class action on behalf of any other Series of the Trust[,]((;)) and
[(vi)](((g))) with respect to such additional matters relating to the
Trust as may be required or authorized by law, by this Declaration of
Trust, or the Bylaws of the Trust, if any, or any registration of the
Trust with the [Securities and Exchange] Commission [(the
"Commission")] or any [S]((s))tate, as the Trustees may consider
desirable.
On any matter submitted to a vote of the Shareholders, all
[s]((S))hares shall be voted by individual Series, ((except as
provided in the following sentence and)) except [(i)](((a))) when
required by the 1940 Act, Shares shall be voted in the aggregate and
not by individual Series; and [(ii)](((b))) 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. ((The Trustees may also determine that a matter affects
only the interests of one or more Classes of a Series, in which case,
any such matter shall be voted on by such Class or Classes.)) [Each
whole Share](( A Shareholder of each Series or Class thereof)) 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 or
Class thereof)) [as to] ((on)) any matter on which [it] ((such
Shareholder)) is entitled to vote, and each fractional [Share]
((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 the Trust((, if any,)) to be taken by Shareholders.
MEETINGS
SECTION 2. The first Shareholders' meeting shall be held as specified
in Section 2 of Article IV at the principal office of the Trust or
such other place as the Trustees may designate. Special meetings of
the Shareholders of any Series may be called by the Trustees and shall
be called by the Trustees upon the written request of Shareholders
owning at least one-tenth (((1/10))) of the outstanding Shares
entitled to vote. Whenever ten or more Shareholders meeting the
qualifications set forth in Section 16(c) of the 1940 Act, as
((modified by or interpreted by any applicable order or orders of the
Commission or any rules or regulations adopted or interpretative
releases of the Commission)), [same may be amended from time to time]
seek the opportunity of furnishing materials to the other Shareholders
with a view to obtaining signatures on such a request for a meeting,
the Trustees shall comply with the provisions of said Section 16(c)
with respect to providing such Shareholders access to the list of the
Shareholders of record of the Trust or the mailing of such materials
to such Shareholders of record. Shareholders shall be entitled to at
least fifteen (((15))) days' notice of any meeting.
QUORUM AND REQUIRED VOTE
SECTION 3. A majority of Shares entitled to vote in person or by
proxy shall be a quorum for the transaction of business at a
Shareholders' meeting, except that where any provision of law or of
this Declaration of Trust permits or requires that holders of any
Series ((or Class)) shall vote as a Series[,] ((or Class)) then a
majority of the aggregate number of Shares of that Series ((or Class))
entitled to vote shall be necessary to constitute a quorum for the
transaction of business by that Series ((or Class)). Any lesser number
shall be sufficient for adjournments. Any adjourned session or
sessions may be held, within a reasonable time after the date set for
the original meeting, without the necessity of further notice. Except
when a larger vote is required ((by applicable law or)) by any
provision of this Declaration of Trust or the Bylaws, ((if any,)) a
majority of the Shares voted in person or by proxy shall decide any
questions and a plurality shall elect a Trustee, provided that where
any provision of law or of this Declaration of Trust permits or
requires that the holders of any Series ((or Class)) shall vote as a
Series ((or Class)), then a majority of the Shares of that Series ((or
Class)) voted on the matter shall decide that matter insofar as that
Series ((or Class)) is concerned. ((Shareholders may act by unanimous
written consent. Actions taken by a Series or Class may be consented
to unanimously in writing by Shareholders of that Series or Class.))
ARTICLE IX
CUSTODIAN
APPOINTMENT AND DUTIES
SECTION 1. The Trustees shall at all times employ a bank((,)) [or]
((a company that is a member of a national securities exchange,))
trust company((, or other entity permitted under the 1940 Act, as
modified by or interpreted by any applicable order or orders of the
Commission or any rules or regulations adopted or interpretative
releases of the Commission thereunder,)) having capital, surplus((,))
and undivided profits of at least two million dollars ($2,000,000), or
such other amount [or such other entity] as shall be allowed by the
Commission or by the 1940 Act, as custodian with authority as its
agent, but subject to such restrictions, limitations ((and)) other
requirements, if any, as may be contained in the Bylaws of the
Trust((, if any)):
(1) to hold the securities owned by the Trust and deliver the same
upon written order or oral order, if confirmed in writing, or by such
electro-mechanical or electronic devices as are agreed to by the Trust
and the custodian, if such procedures have been authorized in writing
by the Trust;
(2) to receive and receipt for any moneys due to the Trust and
deposit the same in its own banking department or elsewhere as the
Trustees may direct; ((and))
(3) to disburse such funds upon orders or vouchers;
and the Trust may also employ such custodian as its agent:
(1) to keep the books and accounts of the Trust and furnish clerical
and accounting services; and
(2) to compute, if authorized to do so [by the Trustees], the Net
Asset Value of any Series ((or Class thereof)) in accordance with the
provisions hereof; all upon such basis of compensation as may be
agreed upon between the Trustees and the custodian.
[ if so directed by a Majority Shareholder Vote, the custodian shall
deliver and pay over all property of the Trust held by it as specified
in such vote.]
The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and
services of the custodian, and upon such terms and conditions, as may
be agreed upon between the custodian and ((such)) [the] sub-custodian
and approved by the Trustees, provided that in every case such
sub-custodian shall be a bank((, a company that is a member of a
national securities exchange,)) [or] trust company [organized under
the laws of the United States or one of the states thereof and]((, or
other entity permitted under the 1940 Act, as modified by or
interpreted by any applicable order or orders of the Commission or any
rules or regulations adopted or interpretative releases of the
Commission thereunder)), having capital((,)) [and] surplus((,)) and
[individual] ((undivided)) profits of at least [2] ((two)) million
dollars ($2,000,000)((,)) or such other [person] ((amount)) as [may]
((shall)) be [permitted] ((allowed)) by the Commission[,] or
[otherwise in accordance with] ((by)) the 1940 Act [as from time to
time amended].
[CENTRAL CERTIFICATE SYSTEM]
((CENTRAL DEPOSITORY SYSTEM))
SECTION 2. Subject to such rules, regulations and orders as the
Commission may adopt, the Trustees may direct the custodian to deposit
all or any part of the securities owned by the Trust in a system for
the central handling of securities established by a national
securities exchange or a national securities association registered
with the Commission under the Securities Exchange Act of 1934[,] or
such other person as may be permitted by the Commission[,] or
otherwise in accordance with the 1940 Act [as from time to time
amended], pursuant to which system all securities of any particular
class or series of any issuer deposited within the system are treated
as fungible and may be transferred or pledged by bookkeeping entry
without physical delivery of such securities[,]((;)) provided that all
such deposits shall be subject to withdrawal only upon the order of
the Trust ((or its custodian, subcustodians, or other authorized
agents)).
ARTICLE X
[DISTRIBUTIONS AND REDEMPTIONS]
((DISTRIBUTIONS, REDEMPTIONS AND DETERMINATION OF NET ASSET VALUE))
DISTRIBUTIONS
SECTION 1.
(a) The Trustees may from time to time declare and pay dividends. The
amount of such dividends and the payment of them shall be wholly in
the discretion of the Trustees.
(b) The Trustees shall have ((the)) power, to the fullest extent
permitted by the laws of Massachusetts, at any time to declare and
cause to be paid dividends on Shares of a particular Series, from the
assets belonging to that Series, which dividends, at the election of
the Trustees, may be paid daily or otherwise pursuant to a standing
resolution or resolutions adopted only once or with such frequency as
the Trustees may determine, and may be payable in Shares of that
Series((, or Classes thereof,)) at the election of each Shareholder of
that Series.
((The Trustees may adopt and offer to Shareholders such dividend
reinvestment plans, cash dividend payout plans, or related plans as
the Trustees shall deem appropriate.))
(c) Anything in this instrument to the contrary notwithstanding, the
Trustees may at any time declare and distribute ((a stock dividend))
pro rata among the Shareholders of a particular Series((, or Class
thereof,)) as of the record date of that Series ((or Class)) fixed as
provided in ((Article XII,)) Section 3 [hereof a "stock dividend"].
REDEMPTIONS
SECTION 2. In case any holder of record of Shares of a particular
Series ((or Class of a Series)) desires to dispose of his Shares, he
may deposit at the office of the transfer agent or other authorized
agent of that Series a written request or such other form of request
as the Trustees may((,)) from time to time((,)) authorize, requesting
that the Series purchase the Shares in accordance with this Section 2;
and the Shareholder so requesting shall be entitled to require the
Series to purchase, and the Series or the principal underwriter of the
Series shall purchase his said Shares, but only at the Net Asset Value
thereof (as described in Section 3 hereof). The Series shall make
payment for any such Shares to be redeemed, as aforesaid, in cash or
property from the assets of that Series((,)) and payment for such
Shares ((less any applicable deferred sales charges and/or fees))
shall be made by the Series or the principal underwriter of the Series
to the Shareholder of record within seven (7) days after the date upon
which the request is effective.
DETERMINATION OF NET ASSET VALUE AND VALUATION OF PORTFOLIO ASSETS
SECTION 3. The term "Net Asset Value" of any Series ((or Class))
shall mean that amount by which the assets of that Series[,] ((or
Class)) exceed its liabilities, all as determined by or under the
direction of the Trustees. Such value per Share shall be determined
separately for each Series ((or Class)) of Shares and shall be
determined on such days and at such times as the Trustees may
determine. Such determination shall be made with respect to securities
for which market quotations are readily available, at the market value
of such securities; and with respect to other securities and assets,
at the fair value as determined in good faith by the Trustees,
provided, however, that the Trustees, without Shareholder approval,
may alter the method of appraising portfolio securities insofar as
permitted under the 1940 Act and the rules, regulations((,)) and
interpretations thereof promulgated or issued by the Commission or
insofar as permitted by any [O]((o))rder of the Commission applicable
to the Series. The Trustees may delegate any of its powers and duties
under this Section 3 with respect to appraisal of assets and
liabilities. At any time((,)) the Trustees may cause the value per
Share last determined to be determined again in ((a)) similar manner
and may fix the time when such redetermined value shall become
effective.
SUSPENSION OF THE RIGHT OF REDEMPTION
SECTION 4. The Trustees may declare a suspension of the right of
redemption or postpone the date of payment as permitted under the 1940
Act. Such suspension shall take effect at such time as the Trustees
shall specify((,)) but not later than the close of business on the
business day next following the declaration of suspension, and
thereafter there shall be no right of redemption or payment until the
Trustees shall declare the suspension at an end. In the case of a
suspension of the right of redemption, a Shareholder may either
withdraw his request for redemption or receive payment based on the
Net Asset Value per Share existing after the termination of the
suspension. ((In the event that any Series is divided into Classes,
the provisions of this Section, to the extent applicable as determined
in the discretion of the Trustees and consistent with applicable law,
may be equally applied to each such Class.))
ARTICLE XI
LIMITATION OF LIABILITY AND INDEMNIFICATION
LIMITATION OF LIABILITY
SECTION 1. Provided they have exercised reasonable care and have
acted under the reasonable belief that their actions are in the best
interest of the Trust, the Trustees shall not be responsible for or
liable in any event for neglect or wrongdoing of them or any officer,
agent, employee((,)) or investment adviser of the Trust, but nothing
contained herein shall protect any Trustee against any liability to
which he would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence((,)) or reckless disregard of the duties
involved in the conduct of his office.
[INDEMNIFICATION]
((INDEMNIFICATION OF COVERED PERSONS))
SECTION 2.
(a) Subject to the exceptions and limitations contained in Section
(b) below:
(i) every person who is, or has been, a Trustee or officer of the
Trust (hereinafter referred to as "Covered Person") shall be
indemnified by the appropriate Series to the fullest extent permitted
by law against liability and against all expenses reasonably incurred
or paid by him in connection with any claim, action, suit((,)) or
proceeding in which he becomes involved as a party or otherwise by
virtue of his being or having been a Trustee or officer and against
amounts paid or incurred by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall
apply to all claims, actions, suits or proceedings (civil, criminal or
other, including appeals), actual or threatened while in office or
thereafter, and the words "liability" and "expenses" shall include,
without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered
Person:
(i) who shall have been adjudicated by a court or body before which
the proceeding was brought (A) to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his office((;)) or (B) not to have acted in good faith in the
reasonable belief that his action was in the best interest of the
Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence((,)) or reckless disregard of
the duties involved in the conduct of his office,
(A) by the court or other body approving the settlement;
(B) by at least a majority of those Trustees who are neither
[i]Interested [p]((P))ersons of the Trust nor are parties to the
matter based upon a review of readily available facts (as opposed to a
full ((trial-type))inquiry); or
(C) by written opinion of independent legal counsel based upon a
review of readily available facts (as opposed to a full
((trial-type))inquiry);
provided, however, that any Shareholder may, by appropriate legal
proceedings, challenge any such determination by the Trustees, or by
independent counsel.
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall
not be exclusive of or affect any other rights to which any Covered
Person may now or hereafter be entitled, shall continue as to a person
who has ceased to be such Trustee or officer((,)) and shall inure to
the benefit of the heirs, executors((,)) and administrators of such a
person. Nothing contained herein shall affect any rights to
indemnification to which Trust personnel, other than Trustees and
officers, and other persons may be entitled by contract or otherwise
under law.
(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit((,)) or proceeding of the character
described in [p]((P))aragraph (a) of this Section 2 may be paid by the
applicable Series from time to time prior to final disposition thereof
upon receipt of an undertaking or on behalf of such Covered Person
that such amount will be paid over by him to the applicable Series if
it is ultimately determined that he is not entitled to indemnification
under this Section 2; provided, however, that either [(a)] (((i)))
such Covered Person shall have provided appropriate security for such
undertaking[,]((;)) [((ii))) the Trust is insured against losses
arising out of any such advance payments((;)) or [(c)] (((iii)))
either a majority of the Trustees who are neither interested persons
of the Trust nor parties to the matter, or independent legal counsel
in a ((trial-type))written opinion, shall have determined, based upon
a review of readily available facts (as opposed to a
((trial-type))inquiry or full investigation), that there is reason to
believe that such Covered Person will be found entitled to
indemnification under this Section 2.
[SHAREHOLDERS]
((INDEMNIFICATION OF SHAREHOLDERS))
SECTION 3. In case any Shareholder or former Shareholder of any
Series of the Trust shall be held to be personally liable solely by
reason of his being or having been a Shareholder and not because of
his acts or omissions or for some other reason, the Shareholder or
former Shareholder (or his heirs, executors, administrators((,)) or
other legal representatives or((,)) in the case of a corporation or
other entity, its corporate or other general successor) shall be
entitled out of the assets belonging to the applicable Series to be
held harmless from and indemnified against all loss and expense
arising from such liability. The Series shall, upon request by the
Shareholder, assume the defense of any claim made against the
Shareholder for any act or obligation of the Series and satisfy any
judgment thereon.
ARTICLE XII
MISCELLANEOUS
[TRUST NOT A PARTNERSHIP]
((TRUST NOT A PARTNERSHIP, ETC.))
SECTION 1. It is hereby expressly declared that a trust ((is created
hereby)) and not a partnership((, joint stock association,
corporation, bailment, or any form of)) a ((legal relationship other
than a trust ))[is created hereby]. No Trustee hereunder shall have
any power to ((personally)) bind [personally] either the Trust's
officers or any Shareholder. All persons extending credit to,
contracting with((,)) or having any claim against the Trust or the
Trustees shall look only to the assets of the appropriate Series for
payment under such credit, contract((,)) or claim; and neither the
Shareholders nor the Trustees, nor any of their agents, whether past,
present((,)) or future, shall be personally liable therefor. Nothing
in this Declaration of Trust shall protect a Trustee against any
liability to which the Trustee would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence((,)) or reckless
disregard of the duties involved in the conduct of the office of
Trustee hereunder.
[TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY]
((TRUSTEES' GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY))
SECTION 2. The exercise by the Trustees of their powers and
discretions hereunder in good faith and with reasonable care under the
circumstances then prevailing, shall be binding upon everyone
interested. Subject to the provisions of Section 1 of this Article XII
and to Article XI, the Trustees shall not be liable for errors of
judgment or mistakes of fact or law. The Trustees may take advice of
counsel or other experts with respect to the meaning and operation of
this Declaration of Trust, and subject to the provisions of Section 1
of this Article XII and to Article XI, shall be under no liability for
any act or omission in accordance with such advice or for failing to
follow such advice. The Trustees shall not be required to give any
bond as such, nor any surety if a bond is obtained.
ESTABLISHMENT OF RECORD DATES
SECTION 3. The Trustees may close the stock transfer books of the
Trust for a period not exceeding sixty (60) days preceding the date of
any meeting of Shareholders, or the date for the payment of any
dividends, or the date for the allotment of rights, or the date when
any change or conversion or exchange of Shares shall go into effect;
or in lieu of closing the stock transfer books as aforesaid, the
Trustees may fix in advance a date[,] not exceeding sixty (60) days
preceding the date of any meeting of Shareholders, or the date for
payment of any dividend((s)), or the date for the allotment of rights,
or the date when any change or conversion or exchange of Shares shall
go into effect, as a record date for the determination of the
Shareholders entitled to notice of, and to vote at, any such meeting,
or entitled to receive payment of any such dividend, or to any such
allotment of rights, or to exercise the rights in respect of any such
change, conversion or exchange of Shares, and in such case such
Shareholders and only such Shareholders as shall be Shareholders of
record on the date so fixed shall be entitled to such notice of, and
to vote at, such meeting, or to receive payment of such dividend, or
to receive such allotment or rights, or to exercise such rights, as
the case may be, notwithstanding any transfer of any Shares on the
books of the Trust after any such record date fixed or aforesaid.
[TERMINATION OF TRUST]
((DURATION; TERMINATION OF TRUST, A SERIES OR A CLASS; MERGERS, ETC.))
SECTION 4. [(a)] ((1. DURATION)). [This] ((The)) Trust shall continue
without limitation of time((,)) but subject to the provisions of
[sub-section (b) of] this [Section 4] ((Article XII)).
[(b) Subject to a Majority Shareholder Vote of each Series affected
by the matter or, if applicable, to a Majority Shareholder Vote of the
Trust, the Trustees may]
((SECTION 4.2. TERMINATION OF THE TRUST, A SERIES OR A CLASS. (a)
Subject to applicable Federal and state law, the Trust or any Series
or Class thereof may be terminated (i) by Majority Shareholder Vote of
the Trust, each Series affected, or each Class affected, as the case
may be; or (ii) without the vote or consent of Shareholders by a
majority of the Trustees either at a meeting or by written consent.
The Trustees shall provide written notice to the affected Shareholders
of a termination effected under clause (ii) above. Upon the
termination of the Trust or the Series or Class,
(i) the Trust or the Series or Class shall carry on no business
except for the purpose of winding up its affairs;))
[(i) sell and convey the assets of the Trust or any affected Series
to another trust, partnership, association or corporation organized
under the laws of any state which is a diversified open-end management
investment company as defined in the 1940 Act, for adequate
consideration which may include the assumption of all outstanding
obligations, taxes and other liabilities, accrued or contingent, of
the Trust or any affected Series, and which may include shares of
beneficial interest or stock of such trust, partnership, association
or corporation; or]
(((ii) the Trustees shall proceed to wind up the affairs of the
Trust or the Series or Class, and all of the powers of the Trustees
under this Declaration of Trust shall continue until the affairs of
the Trust shall have been wound up, including the power to fulfill or
discharge the contracts of the Trust or the Series or Class thereof;
collect its assets; sell, convey, assign, exchange, transfer, or
otherwise dispose of all or any part of the remaining Trust property
or Trust property allocated or belonging to such Series or Class to
one or more persons at public or private sale for consideration that
may consist in whole or in part of cash, securities, or other property
of any kind; discharge or pay its liabilities; and do all other acts
appropriate to liquidate its business; provided that any sale,
conveyance, assignment, exchange, transfer, or other disposition of
all or substantially all the Trust property or Trust property
allocated or belonging to such Series or Class (other than as provided
in (iii) below) shall require Shareholder approval in accordance with
Section 4.3 below; and))
[(ii) at any time sell and convert into money all of the assets of
the Trust or any affected Series.]
[Upon making provision for the payment of all such liabilities in
either (i) or (ii), by such assumption or otherwise, the Trustees
shall distribute the remaining proceeds or assets (as the case may be)
ratably among the holders of the Shares of the Trust or any affected
Series then outstanding.]
(((iii) after paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities, and
refunding agreements as they deem necessary for their protection, the
Trustees may distribute the remaining Trust property or the remaining
property of the terminated Series or Class, in cash or in kind or
partly each, among the Shareholders of the Trust or the Series or
Class according to their respective rights; and))
[(c) Upon completion of the distribution of the remaining proceeds or
the remaining assets as provided in sub-section (b), the Trust or any
affected Series shall terminate and the Trustees shall be discharged
of any and all further liabilities and duties hereunder and the right,
title and interest of all parties shall be cancelled and discharged.]
(((b) after termination of the Trust or the Series or Class and
distribution to the Shareholders as herein provided, a majority of the
Trustees shall execute and lodge among the records of the Trust and
file with the Secretary of The Commonwealth of Massachusetts, as
appropriate, an instrument in writing setting forth the fact of such
termination, and the Trustees shall thereupon be discharged from all
further liabilities and duties with respect to the Trust or the
terminated Series or Class, and the rights and interests of all
Shareholders of the Trust or the terminated Series or Class shall
thereupon cease.
SECTION 4.3. MERGER, CONSOLIDATION, AND SALE OF ASSETS. Subject to
applicable Federal and state law and except as otherwise provided in
Section 4.4 below, the Trust or any Series thereof may merge or
consolidate with any other corporation, association, trust, or other
organization or may sell, lease, or exchange all or substantially all
of the Trust property or Trust property allocated or belonging to such
Series, including its good will, upon such terms and conditions and
for such consideration when and as authorized at any meeting of
Shareholders called for such purpose by a Majority Shareholder Vote of
the Trust or affected Series, as the case may be. Any such merger,
consolidation, sale, lease, or exchange shall be deemed for all
purposes to have been accomplished under and pursuant to Massachusetts
law.
SECTION 4.4. INCORPORATION; REORGANIZATION. Subject to applicable
Federal and state law, the Trustees may without the vote or consent of
Shareholders cause to be organized or assist in organizing a
corporation or corporations under the laws of any jurisdiction or any
other trust, partnership, limited liability company, association, or
other organization to take over all of the Trust property or the Trust
property allocated or belonging to such Series or to carry on any
business in which the Trust shall directly or indirectly have any
interest, and to sell, convey and transfer the Trust property or the
Trust property allocated or belonging to such Series to any such
corporation, trust, limited liability company, partnership,
association, or organization in exchange for the shares or securities
thereof or otherwise, and to lend money to, subscribe for the shares
or securities of, and enter into any contracts with any such
corporation, trust, partnership, limited liability company,
association, or organization, or any corporation, partnership, limited
liability company, trust, association, or organization in which the
Trust or such Series holds or is about to acquire shares or any other
interest. Subject to applicable Federal and state law, the Trustees
may also cause a merger or consolidation between the Trust or any
successor thereto and any such corporation, trust, partnership,
limited liability company, association, or other organization. Nothing
contained herein shall be construed as requiring approval of
Shareholders for the Trustees to organize or assist in organizing one
or more corporations, trusts, partnerships, limited liability
companies, associations, or other organizations and selling,
conveying, or transferring the Trust property or a portion of the
Trust property to such organization or entities; provided, however,
that the Trustees shall provide written notice to the affected
Shareholders of any transaction whereby, pursuant to this Section 4.4,
the Trust or any Series therof sells, conveys, or transfers
substantially all of its assets to another entity or merges or
consolidates with another entity.))
FILING OF COPIES, REFERENCES, AND HEADINGS
SECTION 5. The original or a copy of this instrument and of each
[d]((D))eclaration of [t]((T))rust supplemental hereto shall be kept
at the office of the Trust where it may be inspected by any
Shareholder. A copy of this instrument and of each supplemental
[d]((D))eclaration of [t]((T))rust shall be filed by the Trustees with
the Secretary of [t]((T))he Commonwealth of Massachusetts and the
Boston City Clerk, as well as any other governmental office where such
filing may from time to time be required. Anyone dealing with the
Trust may rely on a certificate by an officer or Trustee of the Trust
as to whether or not any such supplemental [d]((D))eclarations of
[t]((T))rust have been made and as to any matters in connection with
the Trust hereunder, and with the same effect as if it were the
original, may rely on a copy certified by an officer or Trustee of the
Trust to be a copy of this instrument or of any such supplemental
[d]((D))eclaration of [t]((T))rust. In this instrument or in any such
supplemental [d]((D))eclaration of [t]((T))rust, references to this
instrument and all expressions like "herein," "hereof" and
"hereunder," shall be deemed to refer to this instrument as amended or
affected by any such supplemental [d]((D))eclaration of [t]((T))rust.
Headings are placed herein for convenience of reference only and in
case of any conflict, the text of this instrument, rather than the
headings, shall control. This instrument may be executed in any number
of counterparts each of which shall be deemed an original.
APPLICABLE LAW
SECTION 6. The [t]((T))rust set forth in this instrument is made in
[t]((T))he Commonwealth of Massachusetts, and it is created under and
is to be governed by and construed and administered according to the
laws of said Commonwealth. The Trust shall be of the type commonly
called a Massachusetts business trust, and without limiting the
provisions hereof, the Trust may exercise all powers which are
ordinarily exercised by such a trust((, and the absence of a
trust.specific reference herein to any such power, privilege, or
action shall not imply that the Trust may not exercise such power or
privilege or take such actions)).
AMENDMENTS
SECTION 7. [ If authorized by votes of the Trustees and a Majority
Shareholder Vote, or by any larger vote which may be required by
applicable law or this Declaration of Trust in any particular case]
((Except as specifically provided herein)), the Trustees [shall]
((may, without shareholder vote,)) amend or otherwise supplement this
[instrument,] ((Declaration of Trust)) by making((an amendment,)) a
[d]((D))eclaration of [t]((T))rust supplemental hereto [, which
thereafter shall form a part hereof, except that an amendment which
shall affect the Shareholders of one or more Series but not the
Shareholders of all outstanding Series shall be authorized by vote of
the Shareholders holding a majority of the Shares entitled to vote of
each Series affected and no vote of Shareholders of a Series not
affected shall be required. Amendments having the purpose of changing
the name of the Trust or of supplying any omission, curing any
ambiguity or curing, correcting or supplementing any defective or
inconsistent provision contained herein shall not require
authorization by Shareholder vote. Copies of the supplemental
declaration of trust shall be filed as specified in Section 5 of this
Article XII.]((or an amended and restated Declaration of Trust.
Shareholders shall have the right to vote (a) on any amendment that
would affect their right to vote granted in Section 1 of Article VIII;
(b) on any amendment that would alter the maximum number of Trustees
permitted under Section 6 of Article IV; (c) on any amendment to this
Section 7; (d) on any amendment as may be required by law or by the
Trust's registration statement filed with the Commission; and (e) on
any amendment submitted to them by the Trustees. Any amendment
required or permitted to be submitted to Shareholders that, as the
Trustees determine, shall affect the Shareholders of one or more
Series or Classes shall be authorized by vote of the Shareholders of
each Series or Class affected and no vote of shareholders of a Series
or Class not affected shall be required. Notwithstanding anything else
herein, any amendment to Article XI shall not limit the rights to
indemnification or insurance provided therein with respect to action
or omission of Covered Persons prior to such amendment.))
FISCAL YEAR
SECTION 8. The fiscal year of the Trust shall end on a specified date
as set forth in the Bylaws, ((if any,)) provided, however, that the
Trustees may, without Shareholder approval, change the fiscal year of
the Trust.
USE OF THE WORD "FIDELITY"
SECTION 9. Fidelity Management & Research Company ("FMR") has
consented to the use by any Series of the Trust of the identifying
word "Fidelity" in the name of any Series of the Trust at some future
date. Such consent is conditioned upon the employment of FMR ((or a
subsidiary or affiliate thereof)) as investment adviser of each Series
of the Trust. As between the Trust and itself, FMR controls the use of
the name of the Trust insofar as such name contains the identifying
word "Fidelity((.))"[.] FMR may from time to time use the identifying
word "Fidelity" in other connections and for other purposes,
including, without limitation, in the names of other investment
companies, corporations((,)) or businesses [which] ((that)) it may
manage, advise, sponsor or own or in which it may have a financial
interest. FMR may require the Trust or any Series thereof to cease
using the identifying word "Fidelity" in the name of the Trust or any
Series thereof if the Trust or any Series thereof ceases to employ FMR
or a subsidiary or affiliate thereof as investment adviser.
PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS.
((SECTION 10. (a) The provisions of this Declaration of Trust are
severable, and, if the Trustees shall determine, with the advice of
counsel, that any of such provisions is in conflict with the 1940 Act,
the regulated investment company provisions of the Internal Revenue
Code or with other applicable laws and regulations, the conflicting
provision shall be deemed never to have constituted a part of this
Declaration of Trust; provided, however, that such determination shall
not affect any of the remaining provisions of this Declaration of
Trust or render invalid or improper any action taken or omitted prior
to such determination.
(b) If any provision of this Declaration Trust shall be held invalid
or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such
jurisdiction and shall not in any manner affect such provisions in any
other jurisdiction or any other provision of this Declaration of Trust
in any jurisdiction.))
IN WITNESS WHEREOF, the undersigned, being all of the Trustees of the
Trust, have executed this instrument [this 16 day] ((as)) of
[February, 1995.]((the date set forth above.))
[signature lines omitted]
EXHIBIT 2
COMPARISON OF STAND ALONE FUNCTION STRUCTURE
TO
MASTER FEEDER FUND STRUCTURE
STAND ALONE FUND STRUCTURE
The "Stand Alone Fund Structure" diagram contains three circles
labeled "Individual Fund A-1 (Managed by FMR)," "Individual Fund A-2
(Managed by FMR)," and "Individual Fund A-3 (Managed by FMR),"
respectively. Above each circle attached by a line is a single
rectangular box. The three rectangular boxes are labeled "Retail
Investors," "Institutional Investors," and "Retirement Investors,"
respectively.
MASTER FEEDER FUND STRUCTURE
The "Master Feeder Fund Structure" diagram contains a single circle
labeled "Master Fund (Managed by FMR)." Surrounding the circle
attached by lines are three square boxes labeled "Feeder Fund A-1,"
"Feeder Fund A-2," and "Feeder Fund A-3," respectively. Attached to
each square box a line is a single rectangular box. The three
rectangular boxes are labeled "Retail Investors," "Institutional
Investors," and Retirement Investors," respectively.
EXHIBIT 3
((UNDERLINED)) DISCLOSURE WILL BE ADDED;
[BRACKETED] DISCLOSURE WILL BE DELETED.
FORM OF
MANAGEMENT CONTRACT
BETWEEN
FIDELITY TREND FUND
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
[Modification] ((AGREEMENT AMENDED and RESTATED as of)) made this
[1st] ((__)) day of [August,] [1993] ((1999,)) by and between Fidelity
Trend 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 (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 [November 1, 1989] August 1, 1993, to a
modification of said Contract in the manner set forth below. The
[Modified] ((Amended)) Management Contract shall, when executed by
duly authorized officers of the Fund and [the] Adviser, take effect on
[the later of August 1, 1993] ((________________)).
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 [Trust]
((Fund)) shall periodically review the commissions paid by the
Portfolio to determine if the commissions paid over representative
periods of time were reasonable in relation to the benefits to the
Portfolio.
The Adviser 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
[b]((B))asic [f]((F))ee and a [p]((P))erformance [a]((A))djustment [to
the basic fee based upon the investment performance of the Portfolio
in relation to the]((. 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
500 [Composite Stock Price] 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 [b]((B))asic [f]((F))ee and the [p]((P))erformance
[a]((A))djustment will be computed as follows:
(a) Basic Fee Rate[.]((:)) The annual [b]((B))asic [f]((F))ee
[r]((R))ate shall be the sum of the [g]((G))roup [f]((F))ee
[r]((R))ate and the [i]((I))ndividual [f]((F))und [f]((F))ee
[r]((R))ate calculated to the nearest millionth decimal place as
follows:
[(i)] (((i))) Group Fee Rate. The [g]((G))roup [f]((F))ee
[r]((R))ate 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] (( F und's Declaration)) of [each
investment company)] ((Trust or other organizational document)))
determined as of the close of business on each business day throughout
the month. The [g]((G))roup [f]((F))ee [r]((R))ate 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 [i]((I))ndividual [f]((F))und
[f]((F))ee [r]((R))ate shall be ((0)).30%.
(b) Basic Fee[:]((.)) One-twelfth of the [b]((B))asic [f]((F))ee
[r]((R))ate 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 [b]((B))asic [f]((F))ee. [This
basic fee will be subject to upward or downward adjustment on the
basis of the Portfolio's investment performance as follows:]
(c) Performance Adjustment ((Rate)): An adjustment to the monthly
basic fee will be made by applying the P erformance
A djustment R ate to the average net assets of the
Portfolio over the performance period. One-twelfth of the resulting
dollar figure will be added to or subtracted from the B asic
F ee depending on whether the Portfolio experienced better or
wor se performance than the Index. The [p]((P))erformance
[a]((A))djustment [r]((R))ate is 0.02% for each percentage point
[rounded to the nearer point (the higher point if exactly one-half a
point)] (((the performance of the Portfolio and the Index each being
calculated to the nearest 0.01%))) that the Portfolio's investment
performance over the month and the preceding 35 months (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 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 whose stocks comprise 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.
[The adjustment to the basic fee will not be cumulative. An increased
fee rate 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 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.]
(d) ((Performance Adjustment)). One-twelfth of the annual
[p]((P))erformance [a]((A))djustment [r]((R))ate [shall] ((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 adjusted as
provided in sub-paragraph (e) of this paragraph 3 below, if applicable
((or other organizational document))) determined as of the close of
business on each business day throughout the month and the performance
period. The resulting dollar amount is added to or deducted from the
basic fee.
(e) In the event of a merger or other business combination involving
another entity for which the Adviser is the investment adviser, and
where such other entity utilizes a performance adjustment in
determining its investment advisory fee, then:
(A) For purposes of determining the amount of the performance
adjustment, the net assets of the acquired entity averaged over the
period from the first day of the performance period through the date
of the transaction shall be considered to have been included in the
net assets of the Portfolio for the period from the first day of the
performance period through the date of the transaction.
(B) For purposes of determining the performance adjustment, the
opening net asset value of one share of the Portfolio on the first
business day of the performance period shall be adjusted on a
dollar-weighted basis by (i) multiplying the percentage change (to the
nearest one-hundredth of one percent) between the actual net asset
value of one share of the Portfolio and of the other entity on the
first day of the Portfolio's performance period and such respective
net asset values per share on the date of the transaction (as computed
in paragraph 3(c) by the respective average net assets of the
Portfolio and such other entity (measured from the first day of the
Portfolio's performance period through the date of the transaction);
(ii) combining the products determined in (i); (iii) dividing by the
sum of the average net assets of the Portfolio and such other entity;
and (iv) if a positive percentage, dividing 1 plus the percentage
determined in (iii) (expressed as a decimal to the nearest
one-hundredth of a percent) into the net asset value of one share of
the Portfolio on the date of the transaction (as computed in paragraph
3(c); or (v) if a negative percentage, deducting the percentage
determined in (iii) (expressed as a decimal to the nearest
one-hundredth of a percent) from 1 and dividing the result into the
net asset value of one share of the Portfolio on the date of the
transaction (as computed in paragraph 3 (c). The resulting adjusted
net asset value of one share of the Portfolio on the first business
day of the Portfolio's performance period shall be utilized in
calculating the annual rate of performance adjustment under paragraph
3 (c) for the 36 monthly fee calculations following the date of the
transaction. One-twelfth of the annual performance adjustment rate
shall be applied to the average of the net assets of the Portfolio
determined as provided in paragraph 3(e) (A). The performance
adjustment so computed shall be added to or deducted from the amount
of the basic fee (as computed in paragraph 3(b) depending upon whether
the performance of the Portfolio exceeded or was exceeded by the
record of the Index.
(f) In [the] 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 [b]((B))asic [f]((F))ee [r]((R))ate 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 [p]((P))erformance [a]((A))djustment to the
[b]((B))asic [f]((F))ee 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.
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, [1994] ((1999)) 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.] ((subject to the
provisions of Section 15 of the 1940 Act, as modified by or
interpreted by any applicable order or orders of the Securities and
Exchange Commission (the "Commission") or any rules or regulations
adopted by, or interpretative releases of, the Commission.))
(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 [the] ((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.
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 4
((UNDERLINED)) DISCLOSURE WILL BE ADDED;
[BRACKETED] DISCLOSURE WILL BE DELETED.
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
AND
((FIDELITY TREND FUND ON BEHALF OF FIDELITY TREND FUND))
((AMENDMENT)) [AGREEMENT] made this [1st] ((___)) day of [December,
1989] ((____)), ((1999)), by and between Fidelity Management &
Research [(U.K.) Inc.,] ((Company)), a Massachusetts corporation with
principal offices at 82 Devonshire Street, Boston, Massachusetts
(hereinafter called the ["Sub-Adviser"] "((Advisor))") [and] ((;))
Fidelity Management & Research [Company, a Massachusetts corporation
with principal offices at 82 Devonshire Street, Boston, Massachusetts]
(((U.K.) Inc.)) (hereinafter called the ["Adviser"] (("Sub-Advisor");
and Fidelity Trend Fund, a Massachusetts business trust which may
issue one or more series of shares of beneficial interest (hereinafter
called the "Trust") on behalf of Fidelity Trend Fund (hereinafter
called the "Portfolio").
Required authorization and approval by shareholders and Trustees
having been obtained, the Fund, on behalf of the Portfolio, the
Adviser and the Sub-Advisor hereby consent, pursuant to Paragraph 6 of
the existing Sub-Advisory Agreement dated December 1, 1989, to a
modification of said Agreement in the manner set below. The Amended
Sub-Advisory Agreement shall, when executed by duly authorized
officers of the Fund, the Adviser and the Sub-Advisor, take effect on
.))
WHEREAS the ((Trust and the)) [Adviser has] ((Advisor have)) entered
into a Management Contract [with Fidelity Trend 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
Trend Fund (hereinafter called] the ["]Portfolio [")](( , ))pursuant
to which the [Adviser] ((Advisor))is to act as investment [adviser to
the Fund,] ((manager of the Portfolio;)) and
WHEREAS the [Sub-Adviser] ((Sub-Advisor and its subsidiaries and
other affiliated persons)) [has] ((have)) personnel in [Western
Europe] ((various locations throughout the world)) and [was] ((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 [outside
of North America, principally in Western Europe] ((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)) [Adviser]
((Advisor)) and the [Sub-Adviser] ((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. The Sub-Adviser shall act as an investment consultant to the
Adviser and shall furnish the Adviser 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 Adviser may reasonably require. Such information
shall include written and oral reports and analyses.]
(((a) INVESTMENT ADVICE: If and to the extent requested by the
Advisor, the Sub-Advisor shall 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 as the Advisor may
reasonably require. Such information 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.
4. Compensation: The Advisor shall compensate the Sub-Advisor on the
following basis for the services to be furnished hereunder.))
[2. The Sub-Adviser will be compensated by the Adviser on the
following basis for the services to be furnished hereunder: the
Adviser agrees to pay the Sub-Adviser a monthly fee equal to 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 benefits 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 [Adviser] ((Advisor)) [and] ((or)) the
[Sub-Adviser] ((Sub-Advisor)) as directors, officers or otherwise and
that directors, officers and stockholders of the [Adviser] ((Advisor))
[and] ((or)) the [Sub-Adviser] ((Sub-Advisor)) are or may be or become
similarly interested in the [Fund] ((Trust)), and that the [Adviser]
((Advisor)) or the [Sub-Adviser] ((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
[S]((s))ervices of the [Sub-Adviser] ((Sub-Advisor)) to the [Adviser]
((Advisor)) are not to be deemed to be exclusive, the [Sub-Adviser]
((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-Adviser's] ((Sub-Advisor's)) ability to
meet all of its obligations [with respect to rendering investment
advice] hereunder. [In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Sub-Adviser, the Sub-Adviser shall not be
subject to liability to the Adviser, the Fund or to any shareholder of
the Portfolio for any act or omission in the course of, or connected
with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security.] ((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 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.))
9. ((Duration and Termination of Agreement; Amendments)):
[6.] (a) Subject to prior termination as provided in [sub-paragraph]
((subparagraph (d) of this paragraph [6] ((9)), this Agreement shall
continue in force until July 31, [1990] ((1999)) 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
[Adviser] ((Advisor)), the [Sub-Adviser] ((Sub-Advisor)) and the
Portfolio [, such consent on the part of the Fund to be authorized by
vote of a majority of the outstanding voting securities of the
Portfolio.] ((subject to the provisions of Section 15 of the 1940 Act,
as modified by or interpreted by any applicable order or orders of the
Securities and Exchange Commission (the "Commission") or any rules or
regulations adopted by, or interpretative releases of, the
Commission.))
(c) In addition to the requirements of [sub-paragraphs]
((subparagraphs)) (a) and (b) of this paragraph [6] ((9)), the terms
of any continuance [of] ((or)) modification of [the] ((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 [Adviser] ((Advisor)), the [Sub-Adviser]
((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-Adviser]
((Sub-Advisor)) is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Declaration of Trust ((or
other organizational document)) of the [Fund] ((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-Adviser] ((Sub-Advisor)) shall
not seek satisfaction of any such obligation from the shareholders or
any shareholder of the Portfolio. Nor shall the [Sub-Adviser]
((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 ((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
((UNDERLINED)) DISCLOSURE WILL BE ADDED;
[BRACKETED] DISCLOSURE WILL BE DELETED.
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC.
AND
((FIDELITY TREND FUND ON BEHALF OF FIDELITY TREND FUND))
((AMENDMENT)) [AGREEMENT] made this [1st] ((___)) day of [December
1989] ((____, 1999)), by and between Fidelity Management & Research
[(Far East) Inc.,] ((Company)), a Massachusetts corporation with
principal offices at 82 Devonshire Street, Boston, Massachusetts
(hereinafter called the ["Sub-Adviser"] "((Advisor))") [and] ((;))
Fidelity Management & Research [Company, a Massachusetts corporation
with principal offices at 82 Devonshire Street, Boston, Massachusetts]
(((Far East) Inc.)) (hereinafter called the ["Adviser"]
(("Sub-Advisor"); and Fidelity Trend Fund, a Massachusetts business
trust which may issue one or more series of shares of beneficial
interest (hereinafter called the "Trust") on behalf of Fidelity Trend
Fund (hereinafter called the "Portfolio").
Required authorization and approval by shareholders and Trustees
having been obtained, the Fund, on behalf of the Portfolio, the
Adviser and the Sub-Advisor hereby consent, pursuant to Paragraph 6 of
the existing Sub-Advisory Agreement dated December 1, 1989, to a
modification of said Agreement in the manner set below. The Amended
Sub-Advisory Agreement shall, when executed by duly authorized
officers of the Fund, the Adviser and the Sub-Advisor, take effect on
.))
WHEREAS the ((Trust and the)) [Adviser has] ((Advisor have)) entered
into a Management Contract [with Fidelity Trend 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
Trend Fund (hereinafter called] the ["]Portfolio [")](( , ))pursuant
to which the [Adviser] ((Advisor)) is to act as investment [adviser to
the Fund,] ((manager of the Portfolio;)) and
WHEREAS the [Sub-Adviser] ((Sub-Advisor and its subsidiaries and
other affiliated persons)) [has] ((have)) personnel in [Asia and the
Pacific Basin] ((various locations throughout the world)) and [was]
((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 [outside of North America, principally in Asia and the Pacific
Basin] ((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)) [Adviser]
((Advisor)) and the [Sub-Adviser] ((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. The Sub-Adviser shall act as an investment consultant to the
Adviser and shall furnish the Adviser 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 Adviser may reasonably require. Such information
shall include written and oral reports and analyses.]
(((a) INVESTMENT ADVICE: If and to the extent requested by the
Advisor, the Sub-Advisor shall 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 as the Advisor may
reasonably require. Such information 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.
4. Compensation: The Advisor shall compensate the Sub-Advisor on the
following basis for the services to be furnished hereunder.))
[2. The Sub-Adviser will be compensated by the Adviser on the
following basis for the services to be furnished hereunder: the
Adviser agrees to pay the Sub-Adviser a monthly fee equal to 105% 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 105% 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 and 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 [Adviser] ((Advisor)) [and] ((or)) the
[Sub-Adviser] ((Sub-Advisor)) as directors, officers or otherwise and
that directors, officers and stockholders of the [Adviser] ((Advisor))
[and] ((or)) the [Sub-Adviser] ((Sub-Advisor)) are or may be or become
similarly interested in the [Fund] ((Trust)), and that the [Adviser]
((Advisor)) or the [Sub-Adviser] ((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
[S]((s))ervices of the [Sub-Adviser] ((Sub-Advisor)) to the [Adviser]
((Advisor)) are not to be deemed to be exclusive, the [Sub-Adviser]
((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-Adviser's] ((Sub-Advisor's)) ability to
meet all of its obligations [with respect to rendering investment
advice] hereunder. [In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Sub-Adviser, the Sub-Adviser shall not be
subject to liability to the Adviser, the Fund or to any shareholder of
the Fund 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.] ((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 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.))
9.(( Duration and Termination of Agreement; Amendments)):
[6.] (a) Subject to prior termination as provided in [sub-paragraph]
((subparagraph)) (d) of this paragraph [6] ((9)), this Agreement shall
continue in force until July 31, [1990] ((1999)) 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
[Adviser] ((Advisor)), the [Sub-Adviser] ((Sub-Advisor)) and the
Portfolio [, such consent on the part of the Fund to be authorized by
vote of a majority of the outstanding voting securities of the
Portfolio.] ((subject to the provisions of Section 15 of the 1940 Act,
as modified by or interpreted by any applicable order or orders of the
Securities and Exchange Commission (the "Commission") or any rules or
regulations adopted by, or interpretative releases of, the
Commission.))
(c) In addition to the requirements of [sub-paragraphs]
((subparagraphs)) (a) and (b) of this paragraph [6] ((9)), the terms
of any continuance [of] ((or)) modification of [the] ((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 [Adviser] ((Advisor)), the [Sub-Adviser]
((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-Adviser]
((Sub-Advisor)) is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Declaration of Trust ((or
other organizational document)) of the [Fund] ((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-Adviser] ((Sub-Advisor)) shall
not seek satisfaction of any such obligation from the shareholders or
any shareholder of the Portfolio. Nor shall the [Sub-Adviser]
((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 ((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 6
FUNDS ADVISED BY FMR - TABLE OF AVERAGE NET ASSETS AND EXPENSE RATIOS
(A)
<TABLE>
<CAPTION>
INVESTMENT FISCAL AVERAGE RATIO OF NET
OBJECTIVE AND FUND YEAR END (A) NET ASSETS ADVISORY FEES
(MILLIONS)(B) TO AVERAGE
NET ASSETS
PAID
TO FMR (C)
<S> <C> <C> <C> <C>
GROWTH
Export and Multinational Fund 8/31/97 $ 415.7 0.60%
((pound))
Advisor Korea Fund, Inc. ((psi)) 9/30/97 49.9 1.00
Destiny I ((pound)) 9/30/97 5,260.4 0.36
Destiny II ((pound)) 9/30/97 3,074.7 0.50
Advisor Emerging Asia Fund, 10/31/97 130.4 1.16
Inc. ((psi))
Advisor Overseas: ((epslon))
Class A 10/31/97 2.6 0.81
Class T 10/31/97 1,112.8 0.81
Class B 10/31/97 29.0 0.81
Class C ((hollow diamond)) 10/31/98** 4.2 0.81
Institutional Class 10/31/97 30.4 0.81
Canada ((epslon)) 10/31/97 127.5 0.39
Capital Appreciation ((pound)) 10/31/97 1,773.3 0.41
Disciplined Equity ((pound)) 10/31/97 2,212.1 0.44
Diversified International ((epslon)) 10/31/97 1,106.3 0.83
Emerging Markets ((epslon)) 10/31/97 1,049.2 0.75
Europe ((epslon)) 10/31/97 874.8 0.78
Europe Capital Appreciation 10/31/97 335.4 0.65
((epslon))
France ((epslon)) 10/31/97 6.3 0.00*
Germany ((epslon)) 10/31/97 11.9 0.48*
Hong Kong and China ((rex-all)) 10/31/97 217.5 0.75
International Value ((rex-all)) 10/31/97 305.5 0.85
Japan ((rex-all)) 10/31/97 295.1 0.93
Japan Small Companies ((rex-all)) 10/31/97 94.1 0.75
Latin America ((epslon)) 10/31/97 868.0 0.75
Nordic ((epslon))** 10/31/97 68.5 0.75
Overseas ((epslon)) 10/31/97 3,574.3 0.84
Pacific Basin ((rex-all)) 10/31/97 347.5 0.70
Southeast Asia ((rex-all)) 10/31/97 584.7 0.76
Stock Selector ((pound)) 10/31/97 1,738.2 0.47
TechnoQuant Growth** 10/31/97 63.4 0.59(dagger)
United Kingdom ((epslon)) 10/31/97 5.1 0.00*
Value ((pound)) 10/31/97 7,464.9 0.46
Worldwide ((epslon)) 10/31/97 1,067.5 0.75
Advisor Equity Growth: ((pound))
Class A 11/30/97 $ 14.6 0.60%
Class T 11/30/97 3,860.7 0.60
Class B 11/30/97 31.7 0.60
Class C 11/30/97 0.5 0.60
Institutional Class 11/30/97 1,154.7 0.60
Advisor Growth Opportunities:
((pound))
Class A 11/30/97 136.1 0.52(dagger)
Class T 11/30/97 20,087.8 0.52(dagger)
Class B 11/30/97 395.4 0.52(dagger)
Class C 11/30/97 2.9 0.52(dagger)
Institutional Class 11/30/97 384.3 0.52(dagger)
Advisor Large Cap: ((pound))
Class A 11/30/97 1.5 0.60
Class T 11/30/97 35.8 0.60
Class B 11/30/97 16.1 0.60
Class C ((sunburst)) 11/30/97 0.0 0.60
Institutional Class 11/30/97 7.7 0.60
Advisor Mid Cap: ((pound))
Class A 11/30/97 2.6 0.60
Class T 11/30/97 266.9 0.60
Class B 11/30/97 43.5 0.60
Class C 11/30/97 0.1 0.60
Institutional Class 11/30/97 52.0 0.60
Advisor Strategic
Opportunities: ((pound))
Class A 11/30/97 1.1 0.40(dagger)
Class T 11/30/97 494.6 0.40(dagger)
Class B 11/30/97 99.5 0.40(dagger)
Institutional Class 11/30/97 5.9 0.40(dagger)
Initial Class 11/30/97 20.5 0.40(dagger)
Advisor TechnoQuant
Growth: ((pound))
Class A 11/30/97 4.1 0.60
Class T 11/30/97 13.0 0.60
Class B 11/30/97 6.4 0.60
Class C ((sunburst)) 11/30/97 0.0 0.60
Institutional Class 11/30/97 1.3 0.60
Emerging Growth ((pound)) 11/30/97 $ 1,907.1 0.77%
Growth Company ((pound)) 11/30/97 10,175.2 0.47
New Millennium ((pound)) 11/30/97 1,437.9 0.74
Retirement Growth ((pound)) 11/30/97 4,042.6 0.41
Congress Street 12/31/97 86.8 0.45
Contrafund ((pound)) 12/31/97 27,817.1 0.48
Exchange 12/31/97 291.8 0.54
Trend ((pound)) 12/31/97 1,442.4 0.42
Variable Insurance Products:
Growth
Initial Class 12/31/97 6,937.2 0.60
Service Class 12/31/97 0.6 0.60
Overseas ((epslon))
Initial Class 12/31/97 1,917.4 0.75
Service Class 12/31/97 0.3 0.75
Variable Insurance Products II:
Asset Manager: Growth ((pound))
Initial Class 12/31/97 389.5 0.60
Service Class ((sunburst)) 12/31/97 0.0 0.60
Contrafund ((pound))
Initial Class 12/31/97 3,294.9 0.60
Service Class 12/31/97 1.4 0.60
Variable Insurance Products III:
Growth Opportunities ((pound))
Initial Class 12/31/97 703.1 0.60
Service Class 12/31/97 0.7 0.60
Select Portfolios:
Air Transportation ((pound)) 2/28/98 62.7 0.60
American Gold 2/28/98 279.5 0.60
Automotive ((pound)) 2/28/98 62.2 0.59
Biotechnology ((pound)) 2/28/98 577.4 0.60
Brokerage and Investment 2/28/98 416.4 0.60
Management ((pound))
Business Services and 2/28/98 7.1 0.60((italic B))
Outsourcing ((pound))
Chemicals ((pound)) 2/28/98 83.4 0.60
Computers ((pound)) 2/28/98 658.0 0.60
Construction and 2/28/98 26.0 0.60
Housing ((pound))
Consumer Industries ((pound)) 2/28/98 26.5 0.61
Select Portfolios: continued
Cyclical Industries ((pound)) 2/28/98 $ 3.6 0.00%*
Defense and Aerospace ((pound)) 2/28/98 63.9 0.60
Developing 2/28/98 238.7 0.60
Communications ((pound))
Electronics ((pound)) 2/28/98 2,374.6 0.60
Energy ((pound)) 2/28/98 191.3 0.59
Energy Service ((pound)) 2/28/98 964.1 0.59
Environmental Services ((pound)) 2/28/98 27.8 0.60
Financial Services ((pound)) 2/28/98 468.5 0.60
Food and Agriculture ((pound)) 2/28/98 247.0 0.60
Health Care ((pound)) 2/28/98 1,590.8 0.60
Home Finance ((pound)) 2/28/98 1,334.7 0.60
Industrial Equipment ((pound)) 2/28/98 60.1 0.60
Industrial Materials ((pound)) 2/28/98 29.9 0.60
Insurance ((pound)) 2/28/98 110.4 0.60
Leisure ((pound)) 2/28/98 142.1 0.60
Medical Delivery ((pound)) 2/28/98 159.1 0.60
Medical Equipment and 2/28/99** 11.0 0.60 ((italic B))
Systems ((pound))((hollow diamond))
Multimedia ((pound)) 2/28/98 59.1 0.60
Natural Gas ((pound)) 2/28/98 82.3 0.59
Natural Resources ((pound)) 2/28/98 6.4 0.00*
Paper and Forest 2/28/98 24.2 0.60
Products ((pound))
Precious Metals and 2/28/98 194.7 0.60
Minerals ((pound))
Regional Banks ((pound)) 2/28/98 1,035.6 0.60
Retailing ((pound)) 2/28/98 152.9 0.60
Software and Computer 2/28/98 434.9 0.60
Services ((pound))
Technology ((pound)) 2/28/98 552.2 0.60
Telecommunications ((pound)) 2/28/98 413.4 0.60
Transportation ((pound)) 2/28/98 57.4 0.59
Utilities Growth ((pound)) 2/28/98 273.5 0.60
Magellan ((pound)) 3/31/98 61,521.2 0.43
Large Cap Stock ((pound)) 4/30/98 133.9 0.45
Mid Cap Stock ((pound)) 4/30/98 1,579.2 0.60
Small Cap Stock ((pound))** 4/30/98 383.2 0.35*(dagger)
Small Cap Stock Selector ((pound)) 4/30/98 727.3 0.67
Contrafund II ((pound)) 6/30/98 226.3 0.59
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
INVESTMENT FISCAL AVERAGE RATIO OF NET
OBJECTIVE AND FUND YEAR END (A) NET ASSETS ADVISORY FEES
(MILLIONS)(B) TO AVERAGE
NET ASSETS
PAID
TO FMR (C)
Fidelity Fifty ((pound)) 6/30/98 $ 180.5 0.43%
Advisor Focus Funds:
Consumer Industries: ((pound))
Class A 7/31/98 1.3 0.59
Class T 7/31/98 10.7 0.59
Class B 7/31/98 2.2 0.59
Class C 7/31/98 0.5 0.59
Institutional Class 7/31/98 2.7 0.59
Cyclical Industries: ((pound))
Class A 7/31/98 0.4 0.59
Class T 7/31/98 2.7 0.59
Class B 7/31/98 0.5 0.59
Class C 7/31/98 0.1 0.59
Institutional Class 7/31/98 1.5 0.59
Financial Services: ((pound))
Class A 7/31/98 12.6 0.59
Class T 7/31/98 82.7 0.59
Class B 7/31/98 30.1 0.59
Class C 7/31/98 8.3 0.59
Institutional Class 7/31/98 3.9 0.59
Health Care: ((pound))
Class A 7/31/98 10.5 0.59
Class T 7/31/98 79.2 0.59
Class B 7/31/98 22.1 0.59
Class C 7/31/98 6.5 0.59
Institutional Class 7/31/98 7.1 0.59
Natural Resources: ((pound))
Class A 7/31/98 6.9 0.59
Class T 7/31/98 499.5 0.59
Class B 7/31/98 54.7 0.59
Class C 7/31/98 1.6 0.59
Institutional Class 7/31/98 6.2 0.59
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Technology: ((pound))
Class A 7/31/98 11.7 0.59
Class T 7/31/98 76.3 0.59
Class B 7/31/98 17.6 0.59
Class C 7/31/98 3.0 0.59
Institutional Class 7/31/98 5.2 0.59
Advisor Focus Funds: continued
Utilities Growth: ((pound))
Class A 7/31/98 $ 1.4 0.59%
Class T 7/31/98 13.9 0.59
Class B 7/31/98 5.9 0.59
Class C 7/31/98 1.6 0.59
Institutional Class 7/31/98 3.7 0.59
Blue Chip Growth ((pound)) 7/31/98 14,487.5 0.47
Low-Priced Stock ((pound)) 7/31/98 10,834.5 0.74
OTC Portfolio ((pound)) 7/31/98 4,213.9 0.50
</TABLE>
(a) All fund data are as of the fiscal year end noted in the chart or
as of July 31, 1998, 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 (*). The ratio for certain multi-class
funds is presented gross of expense reductions.
(dagger) Annualized
(sunburst) Average net assets for the period shown were less than
$100,000
** Less than a complete fiscal year
(italic B) Based on estimated expenses
(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 (FIIA (U.K.)
L), with respect to the fund.
((epslon)) Fidelity Management & Research Company has entered into
sub-advisory agreements with the following affiliates: FMR U.K., FMR
Far East, FIIA, and FIIA (U.K.) L, 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.
(psi) Fidelity Management & Research Company has entered into
sub-advisory agreements with FIIA and FIJ, with respect to the fund.
((hollow diamond)) The ratio of net advisory fees to average net
assets paid to FMR represents the amount as of the prior fiscal year
end. Updated ratios will be presented for each class of shares of the
fund when the next fiscal year end figures are available.
TRE-pxs-1098 CUSIP#316423102/FUND#005
1.707794.100
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 TREND FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward
C. Johnson 3d, Ralph F. Cox, and Eric D. Roiter, or any one or more of
them, attorneys, with full power of substitution, to vote all shares
of Fidelity Trend Fund 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
December 16, 1998 at 10:00 a.m. and at any adjournments thereof. All
powers may be exercised by a majority of said proxy holders or
substitutes voting or acting or, if only one votes and acts, then by
that one. This Proxy shall be voted on the proposals described in the
Proxy Statement as specified on the reverse side. Receipt of the
Notice of the Meeting and the accompanying Proxy Statement is hereby
acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When
signing in a fiduciary capacity, such as executor, administrator,
trustee, attorney, guardian, etc., please so indicate. Corporate and
partnership proxies should be signed by an authorized person
indicating the person's title.
Date ,
1998
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
cusip # 316423102/fund# 005
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 twelve nominees specified below as [ ] FOR all [ ] 1.
Trustees: Ralph F. Cox, Phyllis Burke Davis, nominees listed WITHHOLD
Robert M. Gates, Edward C. Johnson 3d, E. (except as marked to authority to
Bradley Jones, Donald J. Kirk, Peter S. Lynch, the contrary at left ). vote for all
William O. McCoy, Gerald C. McDonough, Marvin nominees.
L. Mann, Robert C. Pozen, and Thomas R.
Williams. (INSTRUCTION: TO WITHHOLD AUTHORITY TO
VOTE FOR ANY INDIVIDUAL NOMINEE(S), WRITE THE
NAME(S) OF THE NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
______________________________________________________________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of PricewaterhouseCoopers FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
LLP as independent accountants of the fund.
3. To authorize the Trustees to adopt an Amended and FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
Restated Declaration of Trust.
4. To adopt a new fundamental investment policy for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
fund permitting the fund to invest all of its assets in
another open-end investment company managed by
Fidelity Management & Research Company or an
affiliate with substantially the same investment
objective and policies.
5. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
fund.
6. To approve a new sub-advisory agreement with FMR FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
U.K. for the fund.
7. To approve a new sub-advisory agreement with FMR FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
Far East for the fund.
8. To make certain fundamental investment policies of FOR [ ] AGAINST [ ] ABSTAIN [ ] 8.
the fund non-fundamental.
9. To eliminate certain fundamental policies of the fund. FOR [ ] AGAINST [ ] ABSTAIN [ ] 9.
10. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 10.
limitation concerning diversification.
</TABLE>
TRE-PXC-1098 cusip # 316423102/fund# 005
Important information to help you understand and vote on the proposals
Please read the full text of the enclosed proxy statement. Below is a
brief overview of the proposals to be voted upon. Your vote is
important. We appreciate you placing your trust in Fidelity and look
forward to helping you achieve your financial goals.
WHAT PROPOSALS AM I BEING ASKED TO VOTE ON?
You are being asked to vote on the following proposals:
(v) To elect a Board of Trustees.
(w) To ratify the selection of PricewaterhouseCoopers LLP as
independent accountants of the fund.
(x) To authorize the Trustees to adopt an Amended and Restated
Declaration of Trust.
(y) To adopt a new fundamental investment policy for the fund
permitting the fund to invest all of its assets in another open-end
investment company managed by Fidelity Management & Research Company
or an affiliate with substantially the same investment objective and
policies.
(z) To approve an amended management contract for the fund.
(aa) To approve a new sub-advisory agreement with FMR U.K. for the
fund.
(ab) To approve a new sub-advisory agreement with FMR Far East for the
fund.
(ac) To make certain fundamental investment policies of the fund
non-fundamental.
(ad) To eliminate certain fundamental policies of the fund.
(ae) To amend the fund's fundamental investment limitation concerning
diversification.
WHAT ROLE DOES THE BOARD PLAY? (PROPOSAL 1)
The Trustees oversee the investment policies of the fund. Members of
the Board are fiduciaries and have an obligation to serve the best
interests of shareholders, including approving policy changes such as
those proposed in the proxy statement. In addition, the Trustees
review fund performance, oversee fund activities, and review
contractual arrangements with companies that provide services to the
fund.
WHAT IS THE ROLE OF THE INDEPENDENT ACCOUNTANTS? (PROPOSAL 2)
The independent accountants examine annual financial statements for
the fund and provide other audit and tax-related services. They also
sign or certify any financial statements of the fund that are required
by law to be independently certified and filed with the Securities and
Exchange Commission (SEC).
WHY IS THE FUND PROPOSING TO ADOPT AN AMENDED AND RESTATED DECLARATION
OF TRUST? (PROPOSAL 3)
The new Declaration of Trust is a more modern form of trust instrument
for a Massachusetts business trust. It gives the Trustees more
flexibility, and, subject to the applicable requirements of federal
and state law, broader authority to act. This increased flexibility
may allow the Trustees to react more quickly to changes in competitive
and regulatory conditions.
Adoption of the new Declaration of Trust will not alter the Trustees'
existing fiduciary obligations to act in the best interests of the
fund's shareholders. Before utilizing any new flexibility that the
new Declaration of Trust may afford, the Trustees must first consider
the shareholders' interests and act in accordance with such interests.
The new Declaration of Trust amends the current Declaration of Trust
in a number of significant ways. Please review the proxy statement
for specific details.
WHAT ARE THE BENEFITS OF PERMITTING THE FUND TO INVEST ITS ASSETS IN
ANOTHER OPEN-END INVESTMENT COMPANY MANAGED BY FIDELITY MANAGEMENT &
RESEARCH COMPANY (FMR) OR AN AFFILIATE WITH SUBSTANTIALLY THE SAME
INVESTMENT OBJECTIVE AND POLICIES? (PROPOSALS 3 AND 4)
FMR and the Board of Trustees continually review methods of
structuring mutual funds to take maximum advantage of potential
efficiencies. A number of mutual fund companies have developed
"master-feeder" fund structures under which several "feeder" funds
invest all of their assets in a single pooled investment, or "master"
fund. The purpose of the master-feeder fund structure is to achieve
operational efficiencies by consolidating portfolio management while
maintaining different distribution and servicing structures. An
example would be funds with the same investment objective but
different minimum investments due to the servicing of individual
shareholders versus institutional clients.
These proposals would enable the fund 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. In
order to implement the master-feeder structure, both the Declaration
of Trust and the fund's policies must permit the structure. Proposal
3 would amend the Declaration of Trust to permit the structure and
Proposal 4 would amend the policy at the fund level.
The master-feeder fund structure could generate operational
efficiencies and the opportunity to reduce costs. However, no such
plans are being contemplated at this time and the Trustees would only
allow it in the future if they determined that it would be in the best
interest of the fund and its shareholders.
WHY IS THE FUND PROPOSING TO ADOPT AN AMENDED MANAGEMENT CONTRACT?
(PROPOSAL 5)
The amended management contract for the fund principally modifies the
fund's current contract to provide for lower management fees to be
paid to FMR when FMR's assets under management exceed certain levels.
The fund's amended management contract also allows FMR and the trust,
on behalf of the fund, to modify the fund's management contract
subject to the requirements of the Investment Company Act of 1940 (the
1940 Act).
In addition, the amended management contract revises the performance
adjustment calculation by rounding the investment performance of both
the fund and the comparative index to the nearest 0.01%, rather than
the nearest 1.00%. This reduces the chance of minor changes in
performance resulting in significant changes to the performance
adjustment, and ultimately the fund's management fee.
The amended management contract will result in a management fee that
is the same as or lower than the fee payable under the fund's present
contract. The proposed change to the fund's performance adjustment
calculation will either increase each fund's management fee or reduce
it, depending on the performance of the fund and the relative
performance of its respective index. Please refer to the proxy
statement for specific details of the fund's amended management
contract proposal.
WHAT IS A SUB-ADVISORY AGREEMENT, AND HOW DOES IT AFFECT FIDELITY
TREND FUND? (PROPOSALS 6 AND 7)
The sub-advisory agreements would allow FMR to receive investment
advice and research services from FMR U.K. and FMR Far East. FMR
U.K., with its principal office in London, England, and FMR Far East,
with its principal office in Tokyo, Japan are wholly owned
subsidiaries of FMR. The agreements would also permit FMR to grant
FMR U.K. and/or FMR Far East investment management authority if FMR
believes it would be beneficial to the fund and its shareholders. In
addition, the proposed agreements would allow FMR, FMR U.K., FMR Far
East, and the trust, on behalf of the fund, to modify the proposed
agreements subject to the requirements of the 1940 Act.
The sub-advisory agreements would allow FMR increased access to more
specialized investment expertise in foreign markets. The proposed
agreements would not increase the fees paid to FMR by the fund.
WHAT IS THE BENEFIT OF MAKING CERTAIN FUNDAMENTAL INVESTMENT POLICIES
OF THE FUND NON-FUNDAMENTAL? (PROPOSAL 8)
By making some of the fund's fundamental (cannot be changed without
shareholder approval) investment policies non-fundamental (future
changes to the policy would only require approval by the Board of
Trustees, not shareholders), the fund will be able to comply with the
recently revised SEC requirements for concise, understandable
descriptions of investment objectives and policies.
In addition, by making some of the fund's fundamental investment
policies non-fundamental, the Trustees will be able to react more
quickly, if necessary, when the SEC adopts a definitive version of its
proposed name test rule (Name Test Rule) without the delay and expense
of a shareholder meeting. The Name Test Rule governs the use of
mutual fund names and, when eventually adopted by the SEC, may apply
to the fund. It is not known what the final rule will require. It is
anticipated that the approval of the proposal will not materially
affect the manner in which the fund is managed, its investment
performance, or the securities or instruments in which the fund
invests.
WHY IS THE FUND PROPOSING TO ELIMINATE CERTAIN FUNDAMENTAL POLICIES?
(PROPOSAL 9)
The fund's investment objective and investment policies are
fundamental (cannot be changed without shareholder approval) and have
essentially remained the same since the fund commenced operations in
1958. As a result, the fund's investment strategies and policies are
lengthier and less well defined than the strategies and policies of
other Fidelity funds. Elimination of these policies will enable the
fund to comply with the recently revised SEC requirements for concise,
understandable descriptions of investment objectives and policies, and
will allow the fund to more clearly communicate its investment
strategy to shareholders.
If the proposal is approved, the fund's investment objective would
remain unchanged while certain fundamental policies will be
eliminated. The elimination of these investment policies is not
expected to materially 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.
WHAT IS THE BENEFIT OF AMENDING THE FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING DIVERSIFICATION? (PROPOSAL 10)
This proposal would permit the fund, subject to the requirements of
the 1940 Act, to invest without limit in the securities of other
investment companies. As a result of an order of exemption granted by
the SEC, the fund may currently invest up to 25% of its total assets
in non-publicly offered money market or short-term bond funds managed
by FMR or an affiliate of FMR (the Central Funds). FMR anticipates
that the Central Funds will benefit the fund by enhancing the
efficiency of cash management and by providing increased short-term
investment opportunities.
HAS THE FUND'S BOARD OF TRUSTEES APPROVED EACH PROPOSAL?
Yes. The Board of Trustees has unanimously approved all of the
proposals and recommends that you vote to approve them.
HOW MANY VOTES AM I ENTITLED TO CAST?
As a shareholder, you are entitled to one vote for each share you own
of the fund on the record date. The record date is October 19, 1998.
HOW DO I VOTE MY SHARES?
You can vote your shares by completing and signing the enclosed proxy
card, and mailing it in the enclosed postage paid envelope. If you
need any assistance, or have any questions regarding the proposals or
how to vote your shares, please call Fidelity at 1-800-544-8888.
HOW DO I SIGN THE PROXY CARD?
INDIVIDUAL ACCOUNTS: Shareholders should sign exactly as their names
appear on the account registration shown on the card.
JOINT ACCOUNTS: Either owner may sign, but the name of the person
signing should conform exactly to a name shown in the registration.
ALL OTHER ACCOUNTS: The person signing must indicate his or her
capacity. For example, a trustee for a trust or other entity should
sign, "Ann B. Collins, Trustee."
IMPORTANT PROXY MATERIALS
PLEASE CAST YOUR VOTE NOW!
FIDELITY TREND FUND
Dear Shareholder:
I am writing to let you know that a special meeting of shareholders of
Fidelity Trend Fund will be held in December. The purpose of the
meeting is to vote on several important proposals that affect the fund
and your investment in it. As a shareholder, you have the opportunity
to voice your opinion on the matters that affect your fund. This
package contains information about the proposals and the materials to
use when voting by mail.
Please read the enclosed materials and cast your vote on the proxy
card. PLEASE VOTE AND RETURN YOUR CARD PROMPTLY. YOUR VOTE IS
EXTREMELY IMPORTANT, NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY
BE.
All of the proposals have been carefully reviewed by the Board of
Trustees. The Trustees, most of whom are not affiliated with
Fidelity, are responsible for protecting your interests as a
shareholder. The Trustees believe these proposals are in the best
interest of shareholders. They recommend that you vote for each
proposal.
The following Q&A is provided to assist you in understanding the
proposals. Each of the proposals is described in greater detail in
the enclosed proxy statement.
VOTING BY MAIL IS QUICK AND EASY. EVERYTHING YOU NEED IS ENCLOSED.
To cast your vote, simply complete the proxy card enclosed in this
package. Be sure to sign the card before mailing it in the
postage-paid envelope.
If you have any questions before you vote, please call Fidelity at
1-800-544-8888. We'll be glad to help you get your vote in quickly.
Thank you for your participation in this important initiative.
Sincerely,
Edward C. Johnson 3d
Chairman and Chief Executive Officer
