<PAGE>
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how each
fund invests and the services available to shareholders.
FIDELITY INSTITUTIONAL
MONEY MARKET
FUNDS - CLASS A
To learn more about each fund and its investments, you can obtain a copy of
the applicable fund's most recent financial report and portfolio listing or
a copy of the Statement of Additional Information (SAI) dated July 1, 1995.
The SAI has been filed with the Securities and Exchange Commission (SEC)
and is incorporated herein by reference (legally forms a part of the
prospectus). For a free copy of either document, call your Financial
Institution, or call Fidelity Client Services at 1-800-843-3001.
INVESTMENTS IN THE FUNDS ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT A FUND WILL MAINTAIN A
STABLE $1.00 SHARE PRICE.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED BY, ANY
DEPOSITORY INSTITUTION. SHARES ARE NOT
INSURED BY THE FDIC, THE FEDERAL RESERVE
BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT
TO INVESTMENT RISK, INCLUDING THE POSSIBLE
LOSS OF PRINCIPAL.
LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
IMM-pro-795
FIDELITY INSTITUTIONAL CASH PORTFOLIOS (FICP):
Treasury
Treasury II
Government
Domestic
Money Market
DAILY MONEY FUND (DMF):
Treasury Only
FIDELITY INSTITUTIONAL TAX-EXEMPT CASH PORTFOLIOS (FITECP):
Tax-Exempt
PROSPECTUS
JULY 1, 1995(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA 02109
CONTENTS
KEY FACTS WHO MAY WANT TO INVEST
EXPENSES Class A's yearly operating expenses.
FINANCIAL HIGHLIGHTS A summary of each fund's
financial data.
PERFORMANCE
THE FUNDS IN DETAIL CHARTER How each fund is organized.
INVESTMENT PRINCIPLES AND RISKS Each fund's
overall approach to investing.
BREAKDOWN OF EXPENSES How operating costs
are calculated and what they include.
YOUR ACCOUNT HOW TO BUY SHARES Opening an account and
making additional investments.
HOW TO SELL SHARES Taking money out and closing
your account.
INVESTOR SERVICES Services to help you manage
your account.
SHAREHOLDER AND DIVIDENDS, CAPITAL GAINS, AND TAXES
ACCOUNT POLICIES
TRANSACTION DETAILS Share price calculations and
the timing of purchases and redemptions.
EXCHANGE RESTRICTIONS
KEY FACTS
WHO MAY WANT TO INVEST
Each fund offers institutional and corporate investors a convenient and
economical way to invest in a professionally managed portfolio of money
market instruments.
Each fund is designed for those investors who would like to earn current
income while preserving the value of their investment.
The rate of income will vary from day to day, generally reflecting
short-term interest rates.
Each fund is managed to keep its share price stable at $1.00. Treasury,
Treasury II, Government, and Treasury Only each offer an added measure of
safety with their focus on U.S. Government securities.
None of the funds constitutes a balanced investment plan. However, because
they emphasize stability, they could be well-suited for a portion of your
investment .
Each fund is composed of multiple classes of shares. Each class of a
fund has a common investment objective and investment portfolio. Class A
shares do not have a sales charge and do not pay a distribution fee. Class
B shares do not have a sales charge, but do pay a distribution fee. Because
Class A shares have no sales charge and do not pay a distribution fee,
Class A shares are expected to have a higher total return than Class B
shares. You may obtain more information about Class B shares, which are not
offered through this prospectus, from your Financial Institution, or by
calling Fidelity Client Services 1-800-843-3001. Contact your Financial
Institution to discuss which class is appropriate for you.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy or sell
Class A shares of a fund.
Maximum sales charge on purchases and None
reinvested distributions
Maximum deferred sales charge None
Redemption fee None
Exchange fee None
ANNUAL OPERATING EXPENSES are paid out of each fund's Class A
assets. Each fund pays a management fee to Fidelity Management &
Research Company (FMR). Each fund also incurs other expenses for services
such as maintaining shareholder records and furnishing shareholder
statements and financial reports.
Class A 's expenses are factored into its share price or dividends
and are not charged directly to shareholder accounts (see "Breakdown of
Expenses" on page ).
The following are projections based on historical expenses of Class A of
each fund , and are calculated as a percentage of average net assets
of Class A of each fund.
Class A Operating Expenses
TREASURY Management fee .16%
A
12b-1 fee (Distribution fee) None
Other expenses .04
%
Total operating expenses .20%
A
TREASURY II Management fee .15%
A
12b-1 fee (Distribution fee) None
Other expenses .05
%
Total operating expenses .20%
A
GOVERNMENT Management fee .16%
A
12b-1 fee (Distribution fee) None
Other expenses .04
%
Total operating expenses .20%
A
A AFTER EXPENSE REDUCTIONS.
<TABLE>
<CAPTION>
<S> <C> <C>
Class A Operating Expenses
DOMESTIC Management fee .13%
A
12b-1 fee (Distribution fee) None
Other expenses .07
%
Total operating expenses .20%
A
MONEY MARKET Management fee .14%
A
12b-1 fee (Distribution fee) None
Other expenses .04
%
Total operating expenses .18%
A
TREASURY ONLY Management fee .20 %
A
12b-1 fee (Distribution fee) None
Other expenses None
Total operating expenses .20%
A
TAX-EXEMPT Management fee .14 %
A
12b-1 fee (Distribution fee) None
Other expenses .06
%
Total operating expenses .20%
A
</TABLE>
A AFTER EXPENSE REDUCTIONS.
EXPENSE TABLE EXAMPLE: You would pay the following expenses on a $1,000
investment in Class A shares, assuming a 5% annual return and full
redemption at the end of each time period:
1 3 5 10
Year Years Year Years
Treasury $ 2 $ 6 $ 11 $ 26
Treasury II $ 2 $ 6 $ 11 $ 26
Government $ 2 $ 6 $ 11 $ 26
Domestic $ 2 $ 6 $ 11 $ 26
Money Market $ 2 $ 6 $ 10 $ 23
Treasury Only $ 2 $ 6 $ 11 $ 26
Tax-Exempt $ 2 $ 6 $ 11 $ 26
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED COSTS OR RETURNS, ALL OF WHICH MAY VARY.
FMR has voluntarily agreed to reimburse Class A of each fund to the extent
that total operating expenses (excluding taxes, brokerage commissions, and
extraordinary expenses) are in excess of .20% (.18% for Money Market) of
its average net assets. If this agreement were not in effect, management
fees and total operating expenses for Class A of each fund would have been
the following amounts, as a percentage of average net assets: .20% and .24%
for Treasury; .20% and .25% for Treasury II; .20% and .24% for Government;
.20% and .27% for Domestic; .20% and .24% for Money Market; .42% and .42%
for Treasury Only; and .20% and .26% for Tax-Exempt.
FINANCIAL HIGHLIGHTS
The financial highlights tables that follow and each fund's financial
statements are included in each fund's Annual Report and have been audited
by independent accountants. Price Waterhouse LLP serve s as
independent accountant s for each of the FICP funds, while Coopers
& Lybrand L.L.P. serve s as independent accountant s for
both Tax-Exempt and Treasury Only. Their reports , as applicable, on
the financial statements and financial highlights are included in
the Annual Report s . The financial statements, the financial
highlights, and the reports are incorporated by reference into the funds'
SAI, which may be obtained free of charge from Fidelity Distributors
Corporation ( FDC ) .
FICP: TREASURY - CLASS AD
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1.Select
ed
Per-Sha
re Data
2.Years
1986A 1987 1988 1989 1990 1991 1992 1993 1994 1995
ended
March
31
3.Net
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
asset
value,
beginnin
g of
period
4.Incom
.030 .062 .065 .079 .088 .076 .053 .035 .030 .047
e from
Investm
ent
Operati
ons
Net
interest
income
5.Less
(.030) (.062) (.065) (.079) (.088) (.076) (.053) (.035) (.030) (.047)
Distribut
ions
From
net
interest
income
6.Net
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
asset
value,
end of
period
7.Total
3.02% 6.36 6.65 8.17 9.15 7.89 5.48 3.51 3.08 4.79
returnB % % % % % % % % %
8.RATIOS AND
SUPPLEMENTAL
DATA
9.Net
$ 239,945 $ 637,115 $ 650,114 $ 1,179,6 $ 1,721,1 $ 1,782,9 $ 2,629,0 $ 2,036,8 $ 1,611,8 $ 1,197,7
assets, 20 26 57 72 06 77 21
end of
period
(000
omitted)
10.Rati
.20%C .20 .20 .20 .20 .18 .18 .18 .18 .18
o of % % % % % % % % %
expense
s to
average
net
assets
11.Rati
.34%C .25 .23 .26 .25 .24 .25 .23 .23 .24
o of % % % % % % % % %
expense
s to
average
net
assets
before
expense
reductio
ns
12.Rati
7.56%C 6.13 6.45 8.06 8.72 7.57 5.29 3.46 3.03 4.63
o of net % % % % % % % % %
interest
income
to
average
net
assets
</TABLE>
A NOVEMBER 9, 1985 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1986
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
D AS OF MARCH 31, 1995 CLASS B FOR TREASURY HAD NOT COMMENCED OPERATIONS.
FICP: TREASURY II - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
13.Sele
cted
Per-Sha
re Data
14.Year 1987A 1988 1989 1990 1991 1992 1993 1994 1995
s ended
March
31
15.Net $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
asset
value,
beginnin
g of
period
16.Inco
me from
Investm
ent
Operati
ons
17. Ne .009 .064 .078 .088 .076 .053 .034 .030 .047
t
interest
income
18.Less
Distribut
ions
19. Fr (.009) (.064) (.078) (.088) (.076) (.053) (.034) (.030) (.047)
om net
interest
income
20.Net $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
asset
value,
end of
period
21.Total .93% 6.60 8.11 9.13 7.87 5.41 3.46 3.06 4.78
return B % % % % % % % %
22.RATIOS AND
SUPPLEMENTAL
DATA
23.Net $ 26,314 $ 379,50 $ 658,06 $ 1,481,3 $ 3,281,6 $ 5,476,8 $ 5,589,6 $ 4,551,9 $ 4,688,1
assets, 1 8 24 86 52 63 18 98
end of
period
(000
omitted)
24.Rati .20% .20 .20 .19 .18 .18 .18 .18 .18
o of C % % % % % % % %
expense
s to
average
net
assets
25.Rati .99% .32 .26 .27 .25 .25 .23 .24 .25
o of C % % % % % % % %
expense
s to
average
net
assets
before
expense
reductio
ns
26.Rati 6.11% 6.46 7.92 8.63 7.50 5.12 3.38 3.01 4.71
o of net C % % % % % % % %
interest
income
to
average
net
assets
</TABLE>
A FEBRUARY 2, 1987 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1987
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
FICP: TREASURY II - CLASS B
27.Sele
cted
Per-Sha
re Data
28.Year 1994A 1995
s ended
March
31
29.Net $ 1.000 $ 1.000
asset
value,
beginnin
g of
period
30.Inco
me from
Investm
ent
Operati
ons
31. Ne .012 .044
t
interest
income
32.Less
Distribut
ions
33. Fr (.012) (.044)
om net
interest
income
34.Net $ 1.000 $ 1.000
asset
value,
end of
period
35.Total 1.21% 4.45
return B %
36.RATI
OS AND
SUPPLE
MENTAL
DATA
37.Net $ 5,175 $ 585,57
assets, 1
end of
period
(000
omitted)
38.Rati .50% .50
o of C %
expense
s to
average
net
assets
39.Rati .56% .81
o of C %
expense
s to
average
net
assets
before
expense
reductio
ns
40.Rati 2.69% 4.91
o of net C %
interest
income
to
average
net
assets
A OCTOBER 22, 1993 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1994
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
FICP: GOVERNMENT - CLASS A
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
41.Sele
cted
Per-Sha
re Data
42.Year
1986 A 1987 1988 1989 1990 1991 1992 1993 1994 1995
s ended
March
31
43.Net
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
asset
value,
beginnin
g of
period
44.Inco
me from
Investm
ent
Operati
ons
45. Ne
.053 .063 .068 .079 .088 .077 .054 .035 .031 .048
t
interest
income
46.Less
Distribut
ions
47. Fr
(.053) (.063) (.068) (.079) (.088) (.077) (.054) (.035) (.031) (.048)
om net
interest
income
48.Net
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
asset
value,
end of
period
49.Total
5.47% 6.51 6.98 8.19 9.15 7.94 5.55 3.56 3.13 4.86
return B % % % % % % % % %
50.RATIOS AND
SUPPLEMENTAL
DATA
51.Net
$ 511,720 $ 1,358,6 $ 1,878,7 $ 1,918,3 $ 2,815,6 $ 3,613,8 $ 4,603,7 $ 5,686,1 $ 3,764,5 $ 3,321,0
assets, 59 86 42 22 38 81 66 44 66
end of
period
(000
omitted)
52.Rati
.20% .20 .20 .20 .20 .18 .18 .18 .18 .18
o of
C % % % % % % % % %
expense
s to
average
net
assets
53.Rati
.30% .25 .23 .24 .25 .25 .25 .24 .24 .24
o of
C % % % % % % % % %
expense
s to
average
net
assets
before
expense
reductio
ns
54.Rati
7.81% 6.28 6.78 7.90 8.74 7.62 5.33 3.50 3.07 4.77
o of net
C % % % % % % % % %
interest
income
to
average
net
assets
</TABLE>
A JULY 25, 1985 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1986
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
FICP: GOVERNMENT - CLASS B
55.Sele
cted
Per-Sha
re Data
56.Year 1995 A
ended
March
31
57.Net $ 1.000
asset
value,
beginnin
g of
period
58.Inco
me from
Investm
ent
Operati
ons
59. Ne .045
t
interest
income
60.Less
Distribut
ions
61. Fr (.045)
om net
interest
income
62.Net $ 1.000
asset
value,
end of
period
63.Total 4.57%
return B
64.RATI
OS AND
SUPPLE
MENTAL
DATA
65.Net $ 40,516
assets,
end of
period
(000
omitted)
66.Rati .43%
o of C
expense
s to
average
net
assets
67.Rati .66%
o of C
expense
s to
average
net
assets
before
expense
reductio
ns
68.Rati 5.13%
o of net C
interest
income
to
average
net
assets
A APRIL 4, 1994 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1995
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
FICP: DOMESTIC - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
69.Sele
cted
Per-Sha
re Data
70.Year 1990A 1991 1992 1993 1994 1995
s ended
March
31
71.Net $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
asset
value,
beginnin
g of
period
72.Inco
me from
Investm
ent
Operati
ons
73. Ne .035 .078 .054 .034 .031 .049
t
interest
income
74.Less
Distribut
ions
75. Fr (.035) (.078) (.054) (.034) (.031) (.049)
om net
interest
income
76.Net $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
asset
value,
end of
period
77.Total 3.52% 8.11 5.50 3.50 3.14 4.97
return B % % % % %
78.RATI
OS AND
SUPPLE
MENTAL
DATA
79.Net $ 330,974 $ 355,36 $ 558,72 $ 804,35 $ 656,97 $ 771,93
assets, 9 7 4 6 7
end of
period
(000
omitted)
80.Rati .06% .18 .18 .18 .18 .18
o of C % % % % %
expense
s to
average
net
assets
81.Rati .43% .30 .29 .26 .26 .27
o of C % % % % %
expense
s to
average
net
assets
before
expense
reductio
ns
82.Rati 8.44% 7.79 5.24 3.43 3.09 4.94
o of net C % % % % %
interest
income
to
average
net
assets
</TABLE>
A NOVEMBER 3, 1989 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1990
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
FICP: DOMESTIC - CLASS B
83.Sele
cted
Per-Sha
re Data
84.Year 1995A
ended
March
31
85.Net $ 1.000
asset
value,
beginnin
g of
period
86.Inco
me from
Investm
ent
Operati
ons
87. Ne .035
t
interest
income
88.Less
Distribut
ions
89. Fr (.035)
om net
interest
income
90.Net $ 1.000
asset
value,
end of
period
91.Total 3.51%
return B
92.RATI
OS AND
SUPPLE
MENTAL
DATA
93.Net $ 26,545
assets,
end of
period
(000
omitted)
94.Rati .50%
o of C
expense
s to
average
net
assets
95.Rati .79%
o of C
expense
s to
average
net
assets
before
expense
reductio
ns
96.Rati 5.14%
o of net C
interest
income
to
average
net
assets
A JULY 19, 1994 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1995
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
FICP: MONEY MARKET - CLASS A
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
97.Sele
cted
Per-Sha
re Data
98.Year
1986A 1987 1988 1989 1990 1991 1992 1993 1994 1995
s ended
March
31
99.Net
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
asset
value,
beginnin
g of
period
100.Inc
ome
from
Investm
ent
Operati
ons
101. Ne
.059 .064 .069 .080 .089 .078 .055 .035 .032 .049
t
interest
income
102.Le
ss
Distribut
ions
103. Fr
(.059) (.064) (.069) (.080) (.089) (.078) (.055) (.035) (.032) (.049)
om net
interest
income
104.Net
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
asset
value,
end of
period
105.Tot
6.01% 6.57 7.14 8.35 9.25 8.13 5.59 3.58 3.20 4.99
al return% % % % % % % % %
B
106.RATIOS AND
SUPPLEMENTAL
DATA
107.Net
$ 960,784 $ 1,569,1 $ 2,524,7 $ 2,627,4 $ 4,127,8 $ 4,706,9 $ 3,990,3 $ 4,332,9 $ 3,200,2 $ 5,130,1
assets, 99 67 50 79 36 95 95 77 23
end of
period
(000
omitted)
108.Rat
.19% .20 .20 .20 .20 .18 .18 .18 .18 .18
io of
C % % % % % % % % %
expense
s to
average
net
assets
109.Rat
.28% .23 .23 .24 .24 .25 .24 .23 .23 .24
io of
C % % % % % % % % %
expense
s to
average
net
assets
before
expense
reductio
ns
110.Rat
7.97% 6.33 6.95 8.11 8.82 7.80 5.42 3.50 3.15 5.00
io of net
C % % % % % % % % %
interest
income
to
average
net
assets
</TABLE>
A JULY 5, 1985 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1986
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
FICP: MONEY MARKET - CLASS B
111.Sel
ected
Per-Sha
re Data
112.Ye 1994A 1995
ars
ended
March
31
113.Net $ 1.000 $ 1.000
asset
value,
beginnin
g of
period
114.Inc
ome
from
Investm
ent
Operati
ons
115. Ne .011 .046
t
interest
income
116.Les
s
Distribut
ions
117. Fr (.011) (.046)
om net
interest
income
118.Net $ 1.000 $ 1.000
asset
value,
end of
period
119.Tot 1.07% 4.66%
al return
B
120.RA
TIOS
AND
SUPPLE
MENTAL
DATA
121.Net $ 89,463 $ 457,286
assets,
end of
period
(000
omitted)
122.Rat .50% .50%
io of C
expense
s to
average
net
assets
123.Rat .55% .59%
io of C
expense
s to
average
net
assets
before
expense
reductio
ns
124.Rat 2.83% 4.94%
io of net C
interest
income
to
average
net
assets
A NOVEMBER 17,1993 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1994
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
TREASURY ONLY - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
125.Sel
ected
Per-Sha
re Data
126.Ye 1991A 1992 1993 1994 1995D
ars
ended
July 31
127.Net $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
asset
value,
beginnin
g of
period
128.Inc .055 .045 .031 .032 .033
ome
from
Investm
ent
Operati
ons
Net
interest
income
129.Le (.055) (.045) (.031) (.032) (.033)
ss
Distribut
ions
From
net
interest
income
130.Net $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
asset
value,
end of
period
131.Tot 5.63% 4.64% 3.10% 3.27% 3.38%
al
returnB
132.RA
TIOS
AND
SUPPLE
MENTAL
DATA
133.Net $ 705,543 $ 1,197,559 $ 1,047,791 $ 1,049,170 $ 1,266,285
assets,
end of
period
(000
omitted)
134.Rat .03% .20% .20% .20% .20%
io of C C
expense
s to
average
net
assets
135.Rat .42% .42% .42% .42% .42%
io of C C
expense
s to
average
net
assets
before
expense
reductio
ns
136.Rat 6.34% 4.43% 3.05% 3.22% 5.02%
io of net C C
interest
income
to
average
net
assets
</TABLE>
A OCTOBER 3, 1990 (COMMENCEMENT OF OPERATIONS) TO JULY 31, 1991
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
D AUGUST 1, 1994 TO MARCH 31, 1995
TAX-EXEMPT - CLASS A
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
137.Sel
ected
Per-Sha
re Data
138.Ye
1986A 1987 1988 1989 1990 1991 1992 1993 1994 1995D
ars
ended
May 31
139.Net
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
asset
value,
beginnin
g of
period
140.Inc
.044 .042 .046 .058 .058 .053 .040 .026 .024 .027
ome
from
Investm
ent
Operati
ons
Net
interest
income
141.Le
(.044) (.042) (.046) (.058) (.058) (.053) (.040) (.026) (.024) (.027)
ss
Distribut
ions
From
net
interest
income
142.Net
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
asset
value,
end of
period
143.Tot
4.51% 4.28 4.72 5.97 6.00 5.40 4.02 2.66 2.44 2.74%
al % % % % % % % %
returnB
144.RATIOS AND
SUPPLEMENTAL DATA
145.Net
$ 1,162,9 $ 1,850,0 $ 2,080,8 $ 2,006,8 $ 1,984,6 $ 2,116,8 $ 2,556,9 $ 2,239,0 $ 2,390,6 $ 1,876,815
assets,
39 53 46 67 36 41 95 31 63
end of
period
(000
omitted)
146.Rat
.19% .20 .20 .20 .20 .18 .18 .18 .18 .18%C
io of
C % % % % % % % %
expense
s to
average
net
assets
147.Rat
.25% .23 .22 .24 .23 .23 .25 .24 .24 .26%C
io of
C % % % % % % % %
expense
s to
average
net
assets
before
expense
reductio
ns
148.Rat
5.18% 4.20 4.65 5.80 5.82 5.28 3.90 2.62 2.41 3.20%C
io of net
C % % % % % % % %
interest
income
to
average
net
assets
</TABLE>
A JULY 25, 1985 (COMMENCEMENT OF OPERATIONS) TO MAY 31, 1986
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
D JUNE 1, 1994 TO MARCH 31, 1995
PERFORMANCE
Money market fund performance can be measured as TOTAL RETURN or YIELD.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment in a fund over
a given period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results.
Average annual total returns covering periods of less than one year
assume that performance will remain constant for the rest of the year.
YIELD refers to the income generated by an investment in a fund over a
given period of time, expressed as an annual percentage rate.
When a yield assumes that income earned is reinvested, it is called an
EFFECTIVE YIELD.
A TAX-EQUIVALENT YIELD shows what an investor would have to earn before
taxes to equal a tax-free yield.
SEVEN-DAY YIELD illustrates the income earned by an investment in a
money market fund over a recent seven-day period. Since money market funds
maintain a stable $1.00 share price, current seven-day yields are the most
common illustration of money market fund performance.
The funds' recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders.
For current performance call Fidelity Client Services at
1-800-843-3001 .
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money
and invests it toward a specified goal. Treasury, Treasury II,
Government, Domestic, and Money Market are diversified
funds of Fidelity Institutional Cash Portfolios, an open-end
management investment company organized as a Delaware business trust on May
30, 1993. Treasury Only is a diversified fund of Daily Money Fund,
an open-end management investment company organized as a Delaware business
trust on September 30, 1993. Tax-Exempt is a diversified fund of
Fidelity Institutional Tax-Exempt Cash Portfolios, an open-end management
investment company organized as a Delaware business trust on January 29,
1992. There is a remote possibility that one fund might become
liable for a misstatement in the prospectus about another fund.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the funds' activities,
review contractual arrangements with companies that provide services to the
funds, and review the funds' performance. The majority of trustees are not
otherwise affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These
meetings may be called to elect or remove trustees, change fundamental
policies, approve a management contract, or for other purposes.
Shareholders not attending these meetings are encouraged to vote by proxy.
The transfer agent will mail proxy materials in advance, including a voting
card and information about the proposals to be voted on. You are entitled
to one vote for each share you own.
Separate votes are taken by each class of shares, fund, or trust, if a
matter affects just that class of shares, fund, or trust, respectively.
The Board of Trustees of Fidelity Institutional Cash Portfolios has
unanimously approved an Agreement and Plan of Reorganization between
Treasury and Treasury II (Agreement and Plan). The Agreement and Plan will
be presented to Treasury shareholders for their vote of approval or
disapproval at a Special Meeting to be held on September 13, 1995. If the
proposal is approved by a majority of Treasury shareholders on or about
November 1, 1995, all of the assets of Treasury will be merged into
Treasury II. Effective on or about July 17, 1995, you will be unable to
open a new account in Class A shares of Treasury.
FMR AND ITS AFFILIATES
Fidelity Investments is one of the largest investment management
organizations in the United States and has its principal business address
at 82 Devonshire Street, Boston, Massachusetts 02109. It includes a number
of different subsidiaries and divisions which provide a variety of
financial services and products. The funds employ various Fidelity
companies to perform activities required for their operation.
The funds are managed by FMR, which handles their business affairs.
FMR Texas , Inc. (FMR Texas), located in Irving, Texas, has
primary responsibility for providing investment management services.
As of April 30 , 1995, FMR advised funds having approximately
20 million shareholder accounts with a total value of more than
$ 285 billion.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
FDC distributes and markets Fidelity's funds and services. Fidelity
Investments Institutional Operations Company (FIIOC) performs
certain transfer agent servicing functions for Class A shares of
the funds.
FMR Corp. is the ultimate parent company of FMR and FMR Texas. Through
ownership of voting common stock, members of the Edward C. Johnson 3d
family form a controlling group with respect to FMR Corp. Changes may occur
in the Johnson family group, through death or disability, which would
result in changes in each individual family member's holding of stock. Such
changes could result in one or more family members becoming holders of over
25% of the stock. FMR Corp. has received an opinion of counsel that changes
in the composition of the Johnson family group under these circumstances
would not result in the termination of the funds' management or
distribution contracts and, accordingly, would not require a shareholder
vote to continue operation under those contracts.
UMB Bank, n.a. (UMB) is Tax-Exempt's transfer agent, although it employs
FIIOC to perform these functions. UMB is located at 1010 Grand Avenue,
Kansas City, Missouri.
To carry out the funds' transactions, FMR may use its broker-dealer
affiliates and other firms that sell fund shares, provided that a fund
receives services and commission rates comparable to those of other
broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
TREASURY ONLY seeks as high a level of current income as is consistent
with the security of principal and liquidity, and to maintain a constant
net asset value per share (NAV) of $1.00.
The fund invests only in U.S. Treasury securities, including bills, notes,
bonds and other direct obligations of the U.S. Treasury that are guaranteed
as to payment of principal and interest by the full faith and credit of the
U.S. Government.
The fund will invest in those securities whose interest is specifically
exempt from state and local income taxes under federal law; such interest
is not exempt from federal income tax.
TREASURY seeks to obtain as high a level of current income as is consistent
with the preservation of principal and liquidity within the limitations
prescribed for the fund.
Under normal conditions, the fund invests at least 65% of its total assets
in U.S. Treasury bills, notes and bonds, and repurchase agreements backed
by those obligations. The balance of its assets may be invested in other
direct obligations of the United States.
TREASURY II seeks to obtain as high a level of current income as is
consistent with the preservation of principal and liquidity within the
limitations prescribed for the fund.
Under normal conditions, the fund invests 100% of its total assets in U.S.
Treasury bills, notes and bonds and other direct obligations of the U.S.
Treasury. The fund may also engage in repurchase agreements backed by those
obligations.
GOVERNMENT seeks to obtain as high a level of current income as is
consistent with the preservation of principal and liquidity within the
limitations prescribed for the fund.
The fund invests in U.S. Government obligations issued or guaranteed as to
principal and interest by the U.S. Government, including bills, notes,
bonds and other U.S. Treasury debt securities, and instruments issued by
U.S. Government instrumentalities or agencies.
DOMESTIC seeks to obtain as high a level of current income as is consistent
with the preservation of principal and liquidity within the limitations
prescribed for the fund.
The fund invests in U.S. dollar-denominated money market instruments of
domestic issuers rated in the highest rating category by at least two
nationally recognized rating services, or by one if only one rating service
has rated an obligation. The fund may purchase unrated obligations
determined to be of equivalent quality pursuant to procedures adopted by
the Board of Trustees. Under normal conditions, the fund will invest more
than 25% of its total assets in obligations of companies in the financial
services industry.
MONEY MARKET seeks to obtain as high a level of current income as is
consistent with the preservation of principal and liquidity within the
limitations prescribed for the fund.
The fund invests in high-quality, U.S. dollar-denominated money market
instruments of domestic and foreign issuers rated in the highest rating
category by at least two nationally recognized rating services, or by one
if only one rating service has rated an obligation. The fund may purchase
unrated obligations determined to be of equivalent quality pursuant to
procedures adopted by the Board of Trustees. Under normal conditions, the
fund will invest more than 25% of its total assets in obligations of
companies in the financial services industry.
TAX-EXEMPT seeks as high a level of interest income exempt from federal
income tax as is consistent with a portfolio of high - quality,
short-term municipal obligations selected on the basis of liquidity and
stability of principal.
The fund invests primarily in high - quality, short-term municipal
securities, but also may invest in high - quality, long-term fixed,
variable, or floating rate instruments (including tender option bonds)
whose features give them interest rates, maturities, and prices similar to
short-term instruments. Securities in which the fund invests
must be rated, in accordance with applicable rules, in the highest
rating category for short-term securities by at least one nationally
recognized statistical rating organization (NRSRO) and rated in one of the
two highest categories for short-term securities by another NRSRO if rated
by more than one NRSRO; or, if unrated, judged by FMR to be equivalent
quality to those securities rated in the highest short-term rating
category, pursuant to procedures adopted by the Board of Trustees. The
fund's policy regarding limiting investments to the highest rating category
may be changed upon 90 days' prior notice to shareholders.
The fund, under normal conditions, will invest so that at least 80% of
its income distributions is exempt from federal income tax. The fund does
not currently intend to purchase municipal obligations that are subject to
the federal alternative minimum tax.
FMR normally invests the fund's assets according to its investment strategy
and does not expect to invest in federally taxable obligations. The fund
also reserves the right to hold a substantial amount of uninvested cash or
to invest more than normally permitted in federally taxable obligations for
temporary, defensive purposes.
COMMON POLICIES
The funds follow industry-standard guidelines on the quality and maturity
of their investments, which are designed to help maintain a stable $1.00
share price. The funds will purchase only high-quality securities that FMR
believes present minimal credit risks and will observe maturity
restrictions on securities they buy. In general, securities with longer
maturities are more vulnerable to price changes, although they may provide
higher yields. It is possible that a major change in interest rates or a
default on the funds' investments could cause their share prices (and the
value of your investment) to change. It is important to note that the funds
are not guaranteed by the U.S. Government.
Each fund stresses income (tax-free income in the case of Tax-Exempt),
preservation of capital, and liquidity, and does not seek the higher yields
or capital appreciation tha t more aggressive investments may
provide. Each fund's yield will vary from day to day, generally reflecting
current short-term interest rates and other market conditions.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, and strategies FMR may employ in
pursuit of a fund's investment objective. A summary of risks and
restrictions associated with these instrument types and investment
practices is included as well. A complete listing of each fund's policies
and limitations and more detailed information about each fund's investments
is contained in the funds ' SAI. Policies and limitations are
considered at the time of purchase; the sale of instruments is not required
in the event of a subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques to
the full extent permitted unless it believes that doing so will help a fund
achieve its goal. Current holdings and recent investment strategies are
described in a fund's financial reports, which are sent to shareholders
twice a year. For a free SAI or financial report, call Fidelity Client
Services 1-800-843-3001.
MONEY MARKET SECURITIES are high-quality, short-term obligations issued by
the U.S. Government, corporations, financial institutions, municipalities,
local and state governments, and other entities. These obligations may
carry fixed, variable, or floating interest rates. Some money market
securities employ a trust or other similar structure to modify the
maturity, price characteristics, or quality of financial assets so that
they are eligible investments for money market funds. A security's credit
may be enhanced by a bank, insurance company, or other entity. If the
structure does not perform as intended, adverse tax or investment
consequences may result.
U.S. GOVERNMENT MONEY MARKET SECURITIES are short-term debt obligations
issued or guaranteed by the U.S. Treasury or by an agency or
instrumentality of the U.S. Government. Not all U.S. Government securities
are backed by the full faith and credit of the United States. For example,
securities issued by the Federal Farm Credit Bank or by the Federal
National Mortgage Association are supported by the instrumentality's right
to borrow money from the U.S. Treasury under certain circumstances.
However, securities issued by the Financing Corporation are supported only
by the credit of the entity that issued them.
MUNICIPAL SECURITIES are issued to raise money for a variety of public or
private purposes, including general financing for state and local
governments, or financing for specific projects or public facilities. They
may be issued in anticipation of future revenues, and may be backed by the
full taxing power of a municipality, the revenues from a specific project,
or the credit of a private organization. The value of some or all municipal
securities may be affected by uncertainties in the municipal market related
to legislation or litigation involving the taxation of municipal securities
or the rights of municipal securities holders. A fund may own a municipal
security directly or through a participation interest.
FOREIGN SECURITIES may involve different risks than domestic securities,
including risks relating to the political and economic conditions of the
foreign country involved, which could affect the payment of principal or
interest. Issuers of foreign securities include foreign governments,
corporations, and banks.
RESTRICTIONS: Treasury, Treasury II, Government, Domestic, Treasury
Only, and Tax-Exempt may not invest in foreign securities. Money Market may
not invest in foreign securities unless they are denominated in U.S.
dollars.
ASSET-BACKED SECURITIES include (i) interests in pools of mortgages, loans,
or receivables, (ii) pools of purchase contracts, financing leases, or
sales agreements entered into by municipalities, or (iii) pools of other
assets. Payment of principal and interest may be largely dependent upon the
cash flows generated by the assets backing the securities. Securities
backed by assets related to municipalities usually rely on continued
payments by such municipalities.
VARIABLE AND FLOATING RATE SECURITIES have interest rates that are
periodically adjusted either at specific intervals or whenever a benchmark
rate changes. These interest rate adjustments are designed to help
stabilize the security's price.
STRIPPED SECURITIES are the separate income or principal components of a
debt security. Their risks are similar to those of other money market
securities, although they may be more volatile.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at
one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
temporarily transfers possession of a portfolio instrument to another party
in return for cash. This could increase the risk of fluctuation in the
fund's yield or in the market value of its assets.
RESTRICTIONS. Subject to revision upon 90 days' notice to shareholders,
Treasury Only will not engage in reverse repurchase agreements.
Tax-Exempt and Treasury II do not intend to engage in reverse
repurchase agreements.
OTHER MONEY MARKET SECURITIES may include commercial paper, certificates of
deposit, bankers' acceptances, and time deposits.
MUNICIPAL LEASE OBLIGATIONS are used by municipalities to acquire land,
equipment, or facilities. If the municipality stops making payments or
transfers its obligations to a private entity, the obligation could lose
value or become taxable.
OTHER MUNICIPAL SECURITIES may include obligations of U.S. territories and
possessions such as Guam, the Virgin Islands, and Puerto Rico, and their
political subdivisions and public corporations.
PUT FEATURES entitle the holder to put (sell back) a security to the issuer
or a financial intermediary. In exchange for this benefit, a fund may pay
periodic fees or accept a lower interest rate. The credit quality of the
investment may be affected by the creditworthiness of the put provider.
Demand features, standby commitments, and tender options are types of put
features.
PRIVATE ENTITIES may be involved in some municipal securities. For example,
industrial revenue bonds are backed by private entities, and resource
recovery bonds often involve private corporations. The viability of a
project or tax incentives could affect the value and credit quality of
these securities.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid
securities , which means that they may be difficult to sell promptly at
an acceptable price. The sale of some illiquid securities and some
other securities, may be subject to legal restrictions. Difficulty in
selling securities may result in a loss or may be costly to a fund.
RESTRICTIONS. A fund may not purchase a security if, as a result, more than
10% of its net assets would be invested in illiquid securities.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS are trading practices in
which payment and delivery for the securities take place at a future date.
The market value of a security could change during this period, which could
affect the market value of a fund's assets.
FINANCIAL SERVICES INDUSTRY. Companies in the financial services industry
are subject to various risks related to that industry, such as government
regulation, changes in interest rates, and exposure on loans, including
loans to foreign borrowers. If a fund invests substantially in this
industry, its performance may be affected by conditions affecting the
industry.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry or type of
project. Economic, business, or political changes can affect all securities
of a similar type.
RESTRICTIONS: Each fund (other than Treasury Only and Tax-Exempt) may not
purchase a security, if, as a result, more than 5% of its total assets
would be invested in any issuer, except that, with respect to 25% of its
total assets, each fund (other than Treasury Only and Tax-Exempt) may
invest up to 10% of its total assets in the securities of any issuer.
With respect to 75% of its total assets,Tax-Exempt may not purchase a
security if, as a result, more than 5% of its total assets would be
invested in the securities of a single issuer.
These limitations do not apply to U.S. Government securities.
BORROWING. Each fund may borrow from banks or from other funds advised by
FMR, or through reverse repurchase agreements, and may make additional
investments while borrowings are outstanding.
RESTRICTIONS: Each fund, may borrow only for temporary or emergency
purposes, or (except for Tax-Exempt) engage in reverse repurchase
agreements, but not in an amount exceeding 33% of its total assets.
LENDING. A fund may lend money to other funds advised by FMR .
RESTRICTIONS: Loans, in the aggregate, may not exceed 33% of a fund's total
assets. Treasury , Treasury II, Government, Treasury Only and Tax-Exempt
do not intend to engage in lending.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
Treasury Only seeks as high a level of current income as is consistent
with the security of principal and liquidity, and to maintain a constant
NAV of $1.00.
Each of Treasury, Treasury II, Government, Domestic and Money
Market seeks to obtain as high a level of current income as is
consistent with the preservation of principal and liquidity within the
limitations prescribed for the fund.
Tax-Exempt seeks as high a level of interest income exempt from federal
income tax as is consistent with a portfolio of high - quality,
short-term municipal obligations selected on the basis of liquidity and
stability of principal. The fund, under normal conditions, will invest
so that at least 80% of its income distributions is exempt from federal
income tax.
Each fund (other than Treasury Only and Tax-Exempt) may not purchase a
security, if, as a result, more than 5% of its total assets would be
invested in any issuer, except that, with respect to 25% of its total
assets, each fund (other than Treasury Only and Tax-Exempt) may invest up
to 10% of its total assets in the securities of any issuer.
With respect to 75% of its total assets, Tax-Exempt may not purchase a
security if, as a result, more than 5% of its total assets would be
invested in the securities of a single issuer.
Each fund may borrow only for temporary or emergency purposes, or
(except in Tax-Exempt) engage in reverse repurchase agreements, but not
in an amount exceeding 33% of its total assets.
Loans, in the aggregate, may not exceed 33% of a fund's total
assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. E xpenses paid out of each class 's assets are
reflected in that class's share price or dividends; they are neither billed
directly to shareholders nor deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to an affiliate who provides
assistance with these services. Each fund also pays OTHER EXPENSES, which
are explained below.
MANAGEMENT FEE
FMR HAS SUB-ADVISORY AGREEMENTS with FMR Texas, which has primary
responsibility for providing investment management for each fund, while FMR
retains responsibility for providing the fund with other management
services. FMR pays FMR Texas 50% of its management fee (before
expense reimbursements) for these services . For fiscal 1995, FMR
paid FMR Texas the following percentages of each fund ' s average net
assets.
Fund Name Percentage of
Average
Net Assets
Treasury .10%
Treasury II .10%
Government .10%
Domestic .10%
Money Market .10%
Treasury Only .21%
Tax-Exempt .10%
OTHER EXPENSES
While the management fee is a significant component of each fund's annual
operating costs, the funds , other than Treasury Only, have other
expenses as well.
FIIOC performs transfer agency, dividend disbursing and shareholder
servicing functions for Class A shares of each of Treasury, Treasury II,
Government, Domestic, Money Market, and Treasury Only (the Taxable
Funds). Fidelity Service Co. (FSC) calculates the NAV and dividends for
Class A of each Taxable Fund , maintains the general
accounting records for Class A of each Taxable F und , and
administers the securities lending program for each Taxable
Fun d . For fiscal 1995, FIIOC and FSC received the following
fees:
Fund Name Percentage of Percentage of
Class A's Class A's
Average Net Average Net
Assets Assets Paid to
Paid to FIIOC FSC
Treasury .01% .01%
Treasury II .03% .01%
Government .01% .01%
Domestic .03% .01%
Money Market .01% .01%
Treasury Only -- --
UMB has entered into sub-arrangements pursuant to which FIIOC performs
certain transfer agency, dividend disbursing and shareholder services for
Class A shares of Tax-Exempt. UMB has entered into sub-arrangements
pursuant to which FSC calculates the NAV and dividends for Class A shares
of Tax-Exempt and maintains Tax-Exempt's general accounting records.
All of the fees are paid to FIIOC or FSC by UMB, which is reimbursed by
Class A or the fund, as applicable, for such payments.
In fiscal 1995, fees paid by UMB to FIIOC on behalf of Class A of
Tax-Exempt amounted to .02 % of Class A's average net assets, and
fees paid by UMB to FSC on behalf of Tax-Exempt amounted to .01 % of
the fund's average net assets.
Class A of each fund has adopted a DISTRIBUTION AND SERVICE PLAN. Each plan
recognizes that FMR may use its resources, including management fees, to
pay expenses associated with the sale of Class A shares. This may
include payments to third parties, such as banks or broker-dealers, that
provide shareholder support services or engage in the sale of the funds'
shares. The Board of Trustees of each fund has not authorized such
payments. Each fund does not pay FMR separate fees for this service.
E ach fund also pays other expenses, such as legal, audit, and
custodian fees; in some instances, proxy solicitation costs; and the
compensation of trustees who are not affiliated with Fidelity.
YOUR ACCOUNT
HOW TO BUY SHARES
If you are investing through a securities dealer, financial or other
institution (Financial Institution), contact that Financial Institution
directly. Certain features of a fund may be modified when it is made
available through a program of services offered by a Financial Institution,
and administrative charges (in addition to payments the Financial
Institution may receive pursuant to the Distribution and Service Plan) may
be imposed for the services rendered. It is the responsibility of your
Financial Institution to submit purchases and redemptions in order for you
to receive the next determined NAV.
EACH CLASS'S SHARE PRICE called NAV, is calculated every business day. The
funds are managed to keep share prices stable at $1.00. Each fund's shares
are sold without a sales charge.
Shares are purchased at the next NAV calculated after your order is
received and accepted by the transfer agent. NAV is normally calculated at
12:00 p.m. Eastern time for Treasury Only and Tax-Exempt; 3:00 p.m. Eastern
time for Treasury, Government, Domestic, and Money Market; and 3:00 p.m.
and 5:00 p.m. Eastern time for Treasury II.
IF YOU ARE NEW TO FIDELITY an initial investment must be preceded or
accompanied by a completed, signed application, which should be forwarded
to:
Fidelity Client Services
c/o Fidelity Institutional Money Market Funds
FIIOC
P.O. Box 1182
Boston, MA 02103-1182
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, YOU CAN
(small solid bullet) Place a purchase order and wire money into your
account, or
(small solid bullet) Open an account by exchanging from the same class of
any fund that is offered through this prospectus.
INVESTMENTS IN THE FUNDS MUST BE MADE USING THE FEDERAL RESERVE WIRE
SYSTEM. Checks will not be accepted as a means of investment.
BY TELEPHONE. For wiring information and instructions, you should call the
Financial Institution through which you trade , or if you trade
directly through Fidelity, call Fidelity Client Services. There is no
fee imposed by the funds for wire purchases. However, if you buy shares
through a Financial Institution, the Financial Institution may impose a fee
for wire purchases.
Fidelity Client Services:
Nationwide 1-800-843-3001
In order to receive same-day acceptance of your investment, you must
call Fidelity Client Services and place your order between 8:30 a.m.
and 12:00 p.m. Eastern time for Tax-Exempt and Treasury Only; 8:30 a.m. and
3:00 p.m. Eastern time for Treasury, Government, Domestic, and Money
Market ; and 8:30 a.m. and 5:00 p.m. Eastern time for Treasury II, on
days the fund is open for business .
If Fidelity Client Services is not advised of your purchase prior to the
stated cutoff time, your purchase will not be accepted by the transfer
agent. All wires must be received by the transfer agent in good order at
the applicable fund's designated wire bank before the close of the Federal
Reserve Wire System.
In order to purchase shares of Treasury II after 3:00 p.m. Eastern time,
you must contact Fidelity Client Services one week in advance to make
late-trading arrangements. In order to receive same-day acceptance of your
purchase order for Treasury II after 3:00 p.m. Eastern time, you must call
Fidelity Client Services as early in the day as possible. Wired money
for purchase orders for Treasury II placed after 3:00 p.m. Eastern
time that is not properly identified with a wire reference number will be
returned to the bank from which it was wired and will not be credited to
your account.
You are advised to wire funds as early in the day as possible, and to
provide advance notice to Fidelity Client Services for purchases over $10
million ($5 million for Treasury Only).
You will earn dividends on the day of your investment, provided (i)
you telephone Fidelity Client Services and place your trade between
8:30 a.m. and 12:00 p.m. Eastern time for Treasury Only and Tax-Exempt;
8:30 a.m. and 3:00 p.m. Eastern time for Treasury, Government, Domestic
and Money Market ; and 8:30 a.m. and 5:00 p.m. Eastern time for Treasury
II, on days the fund is open for business, and (ii) the fund's designated
wire bank receives the wire before the close of the Federal Reserve
Wire System on the day your purchase order is accepted by the
transfer agent .
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $1,000,000
MINIMUM BALANCE $1,000,000
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next NAV calculated after your order is received and accepted by the
transfer agent. NAV is normally calculated at 12:00 p.m. Eastern time for
Tax-Exempt and Treasury Only, 3:00 p.m. Eastern time for Treasury,
Government, Domestic and Money Market , and 3:00 and 5:00 p.m. Eastern
time for Treasury II.
BY TELEPHONE. Redemption requests may be made by calling Fidelity Client
Services at the phone number listed on page . You must designate on
your account application the U.S. commercial bank account(s) into which you
wish the redemption proceeds to be deposited. Fidelity Client Services will
then notify you that this feature has been activated and that you may
request wire redemptions.
You may change the bank account(s) designated to receive redemption
proceeds at any time prior to making a redemption request. You should send
a letter of instruction, including a signature guarantee, to Fidelity
Client Services at the address shown on page .
There is no fee imposed by the funds for wiring of redemption proceeds.
However, if you buy shares through a Financial Institution, the Financial
Institution may impose a fee for wire redemptions.
You should be able to obtain a signature guarantee from a bank,
broker-dealer, credit union (if authorized under state law), securities
exchange or association, clearing agency, or savings association. A notary
public cannot provide a signature guarantee.
Redemption proceeds will be wired via the Federal Reserve Wire System to
your bank account of record. If your redemption request is
received by telephone between 8:30 a.m. and 12:00 p.m. Eastern time for
Tax-Exempt and Treasury Only, 8:30 a.m. and 3:00 p.m. Eastern time for
Treasury, Government, Domestic, and Money Market , and 8:30 a.m. and
5:00 p.m. Eastern time for redemptions from Treasury II, redemption
proceeds will normally be wired on the same day your redemption
request is received by the transfer agent .
A fund reserves the right to take up to seven days to pay you if making
immediate payment would adversely affect the fund.
In order to redeem shares of Treasury II after 3:00 p.m. Eastern
time, you must contact Fidelity Client Services one week in advance to
make late - trading arrangements .
You are advised to place your trades as early in the day as
possible.
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
STATEMENTS AND REPORTS that the transfer agent sends to you include the
following:
(small solid bullet) Confirmation statements (after every transaction,
except a reinvestment, that affects your account balance or your account
registration)
(small solid bullet) Account statements (monthly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports will be mailed,
even if you have more than one account in a fund. Call Fidelity
Client Services at 1-800-843-3001 if you need additional copies of
financial reports or historical account information.
SUB- A CCOUNTING AND SPECIAL SERVICES. Special processing has been
arranged with FIIOC for institutions that wish to open multiple accounts (a
master account and sub-accounts). You may be required to enter into a
separate agreement with FIIOC. Charges for these services, if any, will be
determined based on the level of services to be rendered.
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net investment income and
capital gains, if any, to shareholders each year. Income dividends are
declared daily and paid monthly.
Income dividends declared are accrued daily throughout the month and are
distributed on the first business day of the following month. Based on
prior approval of the fund, dividends relating to Class A shares redeemed
during the month can be distributed on the day of redemption. Each fund
reserves the right to limit this service.
DISTRIBUTION OPTIONS
When you open an account, specify on your account application how you want
to receive your distributions. The funds offer two options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions, if
any, will be automatically reinvested in additional shares of the same
class of the fund. If you do not indicate a choice on your application,
you will be assigned this option.
2. CASH OPTION. You will be sent a wire for your dividend and capital gain
distributions, if any.
Dividends will be reinvested at each fund's Class A NAV on the last day
of the month. Capital gain distributions, if any, will be reinvested at the
NAV as of the record date of the distribution.
TAXES
As with any investment, you should consider how an investment in the funds
could affect you. Below are some of the funds' tax implications.
TAXES ON DISTRIBUTIONS. Interest income that Tax-Exempt earns is
distributed to shareholders as income dividends. Interest that is federally
tax-free remains tax-free when it is distributed. Distributions from the
Taxable Funds, however, are subject to federal income tax and may also be
subject to state or local taxes. If you live outside the United States,
your distributions from these funds could also be taxed by the country in
which you reside.
For federal tax purposes, the income and short-term capital gains
distributions from each of Treasury, Treasury II, Government, Domestic,
Money Market and Treasury Only are taxed as dividends. Long-term
capital gains distributions, if any, are taxed as long-term capital gains.
Mutual fund dividends from U.S. Government securities are generally
free from state and local income taxes. However, particular states may
limit this benefit, and some types of securities, such as repurchase
agreements and some agency-backed securities, may not qualify for the
benefit. In addition, some states may impose intangible property taxes. You
should consult your own tax adviser for details and up-to-date information
on the tax laws in your state.
During the fiscal year ended March 31, 1995, the following percentages of
each fund's income distributions were derived from interest on
U.S. Government securities which is generally exempt from state
income tax: 30% for Treasury; 27% for Treasury II; 20 % for
Government; 2% for Domestic; 1% for Money Market; and 100% for Treasury
Only.
For shareholders of Tax-Exempt, gain on the sale of tax-free bonds results
in taxable distributions. S hort-term capital gains and a portion of
the gain on bonds purchased at a discount are taxed as dividends; long-term
capital gain distributions, if any, are taxed as long-term capital gains.
Distributions are taxable when they are paid, whether you take them in cash
or reinvest them. However, distributions declared in December and paid in
January are taxable as if they were paid on December 31.
Every January, the transfer agent will send you and the IRS a statement
showing the taxable distributions paid to you in the previous year.
A portion of Tax-Exempt's dividends may be free from state or local taxes.
Income from investments in your state are often tax-free to you. Each year,
the transfer agent will send you a breakdown of Tax-Exempt's income from
each state to help you calculate your taxes.
During the fiscal year ended March 31, 1995, 100% of Tax-Exempt's income
dividends was free from federal income tax.
EFFECT OF FOREIGN TAXES. Foreign governments may impose taxes on Money
Market and its investments and these taxes generally will reduce the fund's
distributions.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, the fund
may have to limit its investment activity in some types of instruments.
TRANSACTION DETAILS
EACH FUND IS OPEN FOR BUSINESS and its NAV is normally calculated each day
that both the Federal Reserve Bank of New York (New York Fed) (for all
Taxable Funds) or the Federal Reserve Bank of Kansas City (Kansas City Fed)
(for Tax-Exempt) and the New York Stock Exchange (NYSE) are open. The
following holiday closings have been scheduled for 1995: New Year's Day
(observed), Martin Luther King 's Birthday, Washington's Birthday, Good
Friday, Memorial Day, Independence Day, Labor Day, Columbus Day,
Thanksgiving Day, and Christmas Day. Although FMR expects the same holiday
schedule to be observed in the future, the New York Fed, the Kansas City
Fed, or the NYSE may modify its holiday schedule at any time. On any day
that the New York Fed, the Kansas City Fed, or the NYSE closes early, the
principal government securities markets close early (such as on days in
advance of holidays generally observed by participants in such markets), or
as permitted by the SEC, the right is reserved to advance the time on that
day by which purchase and redemption orders must be received.
To the extent that portfolio securities are traded in other markets on days
when the New York Fed, the Kansas City Fed, or the NYSE is closed, each
fund's NAV may be affected on days when investors do not have access to the
fund to purchase or redeem shares. Certain Fidelity funds may follow
different holiday closing schedules.
A CLASS' NAV is the value of a single share. The NAV of Class A of each
fund is computed by adding Class A's pro rata share of the value of the
fund's investments, cash, and other assets, subtracting Class A's pro rata
share of the value of the fund's liabilities, subtracting the liabilities
directly attributed to Class A, and dividing the result by the number of
Class A shares of that fund that are outstanding. Each fund values its
portfolio securities on the basis of amortized cost. This method minimizes
the effect of changes in a security's market value and helps each fund
maintain a stable $1.00 share price.
THE OFFERING PRICE (price to buy one share) and REDEMPTION PRICE (price to
sell one share) of Class A are its NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your social security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require a fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity and the transfer
agent may only be liable for losses resulting from unauthorized
transactions if they do not follow reasonable procedures designed to verify
the identity of the caller. Fidelity and the transfer agent will request
personalized security codes or other information, and may also record
calls. You should verify the accuracy of the confirmation statements
immediately after receipt. If you do not want the ability to redeem and
exchange by telephone, call the transfer agent for instructions. Additional
documentation may be required from corporations, associations and certain
fiduciaries.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. Each fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they
would disrupt management of a fund.
TO ALLOW FMR TO MANAGE THE FUNDS MOST EFFECTIVELY, you are urged to
initiate all trades as early in the day as possible and to notify Fidelity
Client Services in advance of transactions in excess of $10 million for
Tax-Exempt and each FICP fund, and $5 million for Treasury Only.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased at the
next NAV calculated after your order is received and accepted by the
transfer agent. Note the following:
(small solid bullet) All of your purchases must be made by federal fund
wire; checks will not be accepted for purchases.
(small solid bullet) If your wire is not received by the close of the
Federal Reserve Wire System, you could be liable for any losses or fees a
fund or Fidelity has incurred, or for interest and penalties.
Net interest income for dividend purposes is determined by FSC on a daily
basis and shall be payable to shareholders of record at the time of its
declaration (including, for this purpose, holders of Class A shares
purchased, but excluding holders of shares redeemed, on that day).
The income declared for Treasury II is based on estimates of net interest
income for the fund. Actual income may differ from estimates and
differences, if any, will be included in the calculation of subsequent
dividends.
Shareholders of record as of 12:00 p.m. Eastern time for Tax-Exempt and
Treasury-Only, or 3:00 p.m. Eastern time for the FICP funds
(5:00 p.m. Eastern time for Treasury II) will be entitled to
dividends declared that day.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your order is received and accepted by
the transfer agent . Note the following:
(small solid bullet) Shares redeemed do not receive the dividend declared
on the day of redemption.
(small solid bullet) A fund may withhold redemption proceeds until it is
reasonably assured that investments credited to your account have been
received and collected.
When the NYSE, the Kansas City Fed, or the New York Fed is closed (or when
trading is restricted) for any reason other than its customary weekend or
holiday closings, or under any emergency circumstances as determined by the
SEC to merit such action, a fund may suspend redemption or postpone payment
dates. In cases of suspension of the right of redemption, the request for
redemption may either be withdrawn or payment may be made based on the NAV
next determined after the termination of the suspension.
IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000,000 due to redemption,
the account may be closed and the proceeds may be wired to the bank account
of record. You will be given 30 days ' notice that your account will
be closed unless it is increased to the minimum.
THE TRANSFER AGENT MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
EXCHANGE RESTRICTIONS
As a shareholder you have the privilege of exchanging Class A shares of any
fund offered through this prospectus at no charge for Class A shares of any
other fund offered through this prospectus.
An exchange involves the redemption of all or a portion of the shares of
one fund and the purchase of shares of another fund.
BY TELEPHONE. Exchanges may be requested on any day a fund is open for
business by calling Fidelity Client Services (at the number listed
on page ) between 8:30 a . m . and 12:00 p . m .
Eastern time for Treasury Only and Tax-Exempt ; and
8:30 a . m . and 3:00 p . m . Eastern time for
Treasury, Government, Domestic, Money Market and Treasury II.
BY MAIL. You may exchange shares on any business day by submitting written
instructions with an authorized signature which is on file for that
account. Written requests for exchanges should contain the fund name,
account number, the number of shares to be redeemed, and the name of
the fund to be purchased. Written requests for exchange should be mailed to
Fidelity Client Services at the address on page .
WHEN YOU PLACE AN ORDER TO EXCHANGE SHARES, Class A shares will be redeemed
at the next determined NAV after your order is received and accepted by
the transfer agent . Shares of the fund to be acquired will be purchased
at its next determined NAV after redemption proceeds are made available.
You should note that, under certain circumstances, a fund may take up to
seven days to make redemption proceeds available for the exchange purchase
of shares of another fund. In addition, please note the following:
(small solid bullet) The fund you are exchanging into must be registered
for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Each fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Your exchanges may be restricted or refused if a fund
receives or anticipates simultaneous orders affecting significant portions
of a fund's assets. In particular, a pattern of exchanges that coincides
with a "market timing" strategy may be disruptive to a fund.
(small solid bullet) Exchanges will not be permitted until a completed and
signed account application is on file.
(small solid bullet) You will earn dividends in the acquired fund in
accordance with the fund's customary policy, normally on the day the
exchange request is received.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time.
The funds reserve the right to terminate or modify the exchange privilege
in the future.
No dealer, sales representative or any other person has been authorized to
give any information or to make any representations, other than those
contained in this Prospectus and in the related SAI, in connection with the
offer contained in this Prospectus. If given or made, such other
information or representations must not be relied upon as having been
authorized by the fund or FDC. This Prospectus and the related SAI do not
constitute an offer by the fund or by FDC to sell or to buy shares of a
fund to any person to whom it is unlawful to make such offer.
FIDELITY INSTITUTIONAL MONEY MARKET FUNDS : CLASS A
FIDELITY INSTITUTIONAL CASH PORTFOLIOS :
Domestic, Government, Money Market
Treasury, Treasury II,
FIDELITY INSTITUTIONAL TAX-EXEMPT CASH PORTFOLIOS:
Tax-Exempt
DAILY MONEY FUND:
Treasury Only
STATEMENT OF ADDITIONAL INFORMATION
JULY 1, 1995
This Statement of Additional Information (SAI) is not a prospectus
but should be read in conjunction with the funds' current Prospectus (dated
July 1, 1995). Please retain this document for future reference. The funds'
financial statements and financial highlights, included in the Annual
Report, for the fiscal year ended March 31, 1995, are incorporated herein
by reference. To obtain an additional copy of the Prospectus or the Annual
Report, please call Fidelity Distributors Corporation at 1-800-544-8888.
TABLE OF CONTENTS PAGE
Investment Policies and Limitation s
Portfolio Transactions
Valuation
Performance
Additional Purchase, Exchange and Redemption Information
Distributions and Taxes
FMR
Trustees and Officers
Management Contracts
Contracts with FMR Affiliates
Distribution and Service Plan s
Description of the Trusts
Financial Statements
Appendix
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
SUB-ADVISER
FMR Texas Inc. (FMR Texas)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT FOR TAXABLE FUNDS
Fidelity Investments Institutional Operations Company (FIIOC)
TRANSFER AGENT FOR TAX-EXEMPT
UMB Bank, n.a. (UMB)
IMM-ptb-795
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of a fund's assets that may be
invested in any security or other asset, or sets forth a policy regarding
quality standards, such standard or percentage limitation shall be
determined immediately after and as a result of a fund's acquisition of
such security or other asset. Accordingly, any subsequent change in values,
net assets, or other circumstances will not be considered when determining
whether the investment complies with each fund's investment policies and
limitations.
Each fund's fundamental investment policies and limitations may not be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940 (1940 Act))
of each fund. However, except for the fundamental investment limitations
set forth below, the investment policies and limitations described in this
SAI are not fundamental, and may be changed without shareholder approval.
INVESTMENT LIMITATIONS OF FIDELITY INSTITUTIONAL CASH PORTFOLIOS:
TREASURY
THE FOLLOWING ARE TREASURY'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) purchase the securities of any issuer (other than obligations issued or
guaranteed as to principal and interest by the government of the United
States, its agencies or instrumentalities) if, as a result, more than 5% of
its total assets would be invested in the securities of such issuer,
provided, however, that with respect to 25% of its total assets, 10% of its
assets may be invested in the securities of an issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act 1940;
(3) borrow money, except that the fund may (i) borrow money for temporary
or emergency purposes (not for leveraging or investment) and (ii) engage in
reverse repurchase agreements for any purpose; provided that (i) and (ii)
in combination do not exceed 33 1/3% of the value of the fund's total
assets (including the amount borrowed) less liabilities (other than
borrowings). Any borrowings that come to exceed this amount will be reduced
within three days (not including Sundays and holidays) to the extent
necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) buy or sell real estate;
(7) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements;
(8) invest in oil, gas, or other mineral exploration or development
programs; or
(9) invest in companies for the purpose of exercising control or
management.
(10) 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 with substantially the same
fundamental investment objectives, policies and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or fund for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party. The fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase or sell futures
contracts or call options. This limitation does not apply to options
attached to, or acquired or traded together with, their underlying
securities, and does not apply to securities that incorporate features
similar to options or futures contracts.
(v) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(vi) The fund does not currently intend to (a) purchase securities of other
investment companies, except in the open market where no commission except
the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(vii) The fund does not currently intend to make loans, but this limitation
does not apply to purchases of debt securities or to repurchase agreements.
(viii) The fund does not currently intend to invest in interests in real
estate investment trusts that are not readily marketable, or to invest in
interests in real estate limited partnerships that are not listed on the
New York Stock Exchange (NYSE) or the American Stock Exchange
(AMEX) or traded on the NASDAQ National Market System.
(ix) The fund does not currently intend to purchase the securities of any
issuer if those officers and Trustees of the Trust and those officers and
directors of FMR who individually own more than 1/2 of 1% of the securities
of such issuer together own more than 5% of such issuer's securities.
(x) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xi) 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
FMR or an affiliate or successor with substantially the same fundamental
investment objective, policies, and limitations as the fund.
For the fund's policies on quality and maturity, see section entitled
"Quality and Maturity" on page .
INVESTMENT LIMITATIONS OF FIDELITY INSTITUTIONAL CASH PORTFOLIOS:
TREASURY II
THE FOLLOWING ARE TREASURY II'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) purchase the securities of any issuer (other than obligations issued or
guaranteed as to principal and interest by the government of the United
States, its agencies or instrumentalities) if, as a result, more than 5% of
its total assets would be invested in the securities of such issuer,
provided, however, that with respect to 25% of its total assets, 10% of its
assets may be invested in the securities of an issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940 ;
(3) borrow money, except that the fund may (i) borrow money for temporary
or emergency purposes (not for leveraging or investment) and (ii) engage in
reverse repurchase agreements for any purpose; provided that (i) and (ii)
in combination do not exceed 33 1/3% of the value of the fund's total
assets (including the amount borrowed) less liabilities (other than
borrowings). Any borrowings that come to exceed this amount will be reduced
within three days (not including Sundays and holidays) to the extent
necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) buy or sell real estate;
(7) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements;
(8) invest in oil, gas, or other mineral exploration or development
programs; or
(9) invest in companies for the purpose of exercising control or
management.
(10) 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 with substantially the same
fundamental investment objectives, policies and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only from a bank or from a registered
investment company or fund for which FMR or an affiliate serves as
investment adviser. The fund will not purchase any security while
borrowings representing more than 5% of its total assets are outstanding.
The fund will not borrow from other funds advised by FMR or its affiliates
if total outstanding borrowings immediately after such borrowing would
exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase or sell futures
contracts or call options. This limitation does not apply to options
attached to, or acquired or traded together with, their underlying
securities, and does not apply to securities that incorporate features
similar to options or futures contracts.
(v) The fund does not currently intend to (a) purchase securities of other
investment companies, except in the open market where no commission except
the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(vi) The fund does not currently intend to make loans, but this limitation
does not apply to purchases of debt securities or to repurchase agreements.
(vii) The fund does not currently intend to invest in interests in real
estate investment trusts that are not readily marketable, or to invest in
interests in real estate limited partnerships that are not listed on the
NYSE or the A M E X or traded on the NASDAQ National Market
System.
(viii) The fund does not currently intend to purchase the securities of any
issuer if those officers and Trustees of the Trust and those officers and
directors of FMR who individually own more than 1/2 of 1% of the securities
of such issuer together own more than 5% of such issuer's securities.
(ix) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(x) 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
FMR or an affiliate or successor with substantially the same fundamental
investment objective, policies, and limitations as the fund.
For the fund's policies on quality and maturity, see section entitled
"Quality and Maturity" on page .
INVESTMENT LIMITATIONS OF FIDELITY INSTITUTIONAL CASH PORTFOLIOS:
GOVERNMENT
THE FOLLOWING ARE GOVERNMENT'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) purchase the securities of any issuer (other than obligations issued or
guaranteed as to principal and interest by the government of the United
States, its agencies or instrumentalities) if, as a result, more than 5% of
its total assets would be invested in the securities of such issuer,
provided, however, that with respect to 25% of its total assets, 10% of its
assets may be invested in the securities of an issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940 ;
(3) borrow money, except that the fund may (i) borrow money for temporary
or emergency purposes (not for leveraging or investment) and (ii) engage in
reverse repurchase agreements for any purpose; provided that (i) and (ii)
in combination do not exceed 33 1/3% of the value of the fund's total
assets (including the amount borrowed) less liabilities (other than
borrowings). Any borrowings that come to exceed this amount will be reduced
within three days (not including Sundays and holidays) to the extent
necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted
securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) buy or sell real estate;
(7) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements;
(8) invest in oil, gas, or other mineral exploration or development
programs; or
(9) invest in companies for the purpose of exercising control or
management.
(10) 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 with substantially the same
fundamental investment objectives, policies and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to purchase a security (other than a
security issued or guaranteed by the U.S. Government or any of its agencies
or instrumentalities) if, as a result, more than 5% of its total assets
would be invested in the securities of a single issuer; provided that the
fund may invest up to 10% of its total assets in the first tier securities
of a single issuer for up to three business days.
(ii) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(iii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iv) The fund may borrow money only (a) from a bank or from a registered
investment company or fund for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party. The fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(v) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(vi) The fund does not currently intend to purchase or sell futures
contracts or call options. This limitation does not apply to options
attached to, or acquired or traded together with, their underlying
securities, and does not apply to securities that incorporate features
similar to options or futures contracts.
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(viii) The fund does not currently intend to make loans, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(ix) The fund does not currently intend to invest in interests in real
estate investment trusts that are not readily marketable, or to invest in
interests in real estate limited partnerships that are not listed on the
NYSE or the A M E X or traded on the NASDAQ National Market
System.
(x) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xi) 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
FMR or an affiliate or successor with substantially the same fundamental
investment objective, policies, and limitations as the fund.
For the fund's policies on quality and maturity, see section entitled
"Quality and Maturity" on page .
INVESTMENT LIMITATIONS OF FIDELITY INSTITUTIONAL CASH PORTFOLIOS:
DOMESTIC
THE FOLLOWING ARE DOMESTIC'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) purchase the securities of any issuer (other than obligations issued or
guaranteed as to principal and interest by the government of the United
States, its agencies or instrumentalities) if, as a result, more than 5% of
its total assets would be invested in the securities of such issuer,
provided, however, that with respect to 25% of its total assets, 10% of its
assets may be invested in the securities of an issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may (i) borrow money for temporary
or emergency purposes (not for leveraging or investment) and (ii) engage in
reverse repurchase agreements for any purpose; provided that (i) and (ii)
in combination do not exceed 33 1/3% of the value of the fund's total
assets (including the amount borrowed) less liabilities (other than
borrowings). Any borrowings that come to exceed this amount will be reduced
within three days (not including Sundays and holidays) to the extent
necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the
Securities Act of 1933 Act in the disposition of restricted
securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry, except that the fund will
invest more than 25% of its total assets in the financial services
industry;
(6) buy or sell real estate;
(7) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements;
(8) invest in oil, gas, or other mineral exploration or development
programs; or
(9) invest in companies for the purpose of exercising control or
management.
(10) 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 with substantially the same
fundamental investment objectives, policies and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to purchase a security (other than a
security issued or guaranteed by the U.S. Government or any of its agencies
or instrumentalities) if, as a result, more than 5% of its total assets
would be invested in the securities of a single issuer; provided that the
fund may invest up to 10% of its total assets in the first tier securities
of a single issuer for up to three business days.
(ii) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(iii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iv) The fund may borrow money only (a) from a bank or from a registered
investment company or fund for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party. The fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
( v ) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to legal
or contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
( vi ) The fund does not currently intend to purchase or sell futures
contracts or call options. This limitation does not apply to options
attached to, or acquired or traded together with, their underlying
securities, and does not apply to securities that incorporate features
similar to options or futures contracts.
( vii ) The fund does not currently intend to lend assets other than
securities to other parties, except by lending money (up to 10% of the
fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser. (This
limitation does not apply to purchases of debt securities or to repurchase
agreements.)
( viii ) The fund does not currently intend to (a) purchase securities
of other investment companies, except in the open market where no
commission except the ordinary broker's commission is paid, or (b) purchase
or retain securities issued by other open-end investment companies.
Limitations (a) and (b) do not apply to securities received as dividends,
through offers of exchange, or as a result of a reorganization,
consolidation, or merger.
( i x) The fund does not currently intend to invest in interests in
real estate investment trusts that are not readily marketable, or to invest
in interests in real estate limited partnerships that are not listed on the
NYSE or the A MEX or traded on the NASDAQ National Market System.
( x ) The fund does not currently intend to purchase the securities of
any issuer if those officers and Trustees of the Trust and those officers
and directors of FMR who individually own more than 1/2 of 1% of the
securities of such issuer together own more than 5% of such issuer's
securities.
( xi ) The fund does not currently intend to invest in oil, gas, or
other mineral exploration or development programs or leases.
(x i i) 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 FMR or an affiliate or successor with substantially the same
fundamental investment objective, policies, and limitations as the fund.
For the fund's policies on quality and maturity, see section entitled
"Quality and Maturity" on page .
INVESTMENT LIMITATIONS OF FIDELITY INSTITUTIONAL CASH PORTFOLIOS:
MONEY MARKET
THE FOLLOWING ARE MONEY MARKET'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) purchase the securities of any issuer (other than obligations issued or
guaranteed as to principal and interest by the government of the United
States, its agencies or instrumentalities) if, as a result, more than 5% of
its total assets would be invested in the securities of such issuer,
provided, however, that with respect to 25% of its total assets, 10% of its
assets may be invested in the securities of an issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940 Act ;
(3) borrow money, except that the fund may (i) borrow money for temporary
or emergency purposes (not for leveraging or investment) and (ii) engage in
reverse repurchase agreements for any purpose; provided that (i) and (ii)
in combination do not exceed 33 1/3% of the value of the fund's total
assets (including the amount borrowed) less liabilities (other than
borrowings). Any borrowings that come to exceed this amount will be reduced
within three days (not including Sundays and holidays) to the extent
necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted
securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry, except that the fund will
invest more than 25% of its total assets in the financial services
industry;
(6) buy or sell real estate;
(7) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements;
(8) invest in oil, gas, or other mineral exploration or development
programs; or
(9) invest in companies for the purpose of exercising control or
management.
(10) 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 with substantially the same
fundamental investment objectives, policies and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to purchase a security (other than a
security issued or guaranteed by the U.S. Government or any of its agencies
or instrumentalities) if, as a result, more than 5% of its total assets
would be invested in the securities of a single issuer; provided that the
fund may invest up to 10% of its total assets in the first tier securities
of a single issuer for up to three business days.
(ii) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(iii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iv) The fund may borrow money only (a) from a bank or from a registered
investment company or fund for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party. The fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(v) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(vi) The fund does not currently intend to purchase or sell futures
contracts or call options. This limitation does not apply to options
attached to, or acquired or traded together with, their underlying
securities, and does not apply to securities that incorporate features
similar to options or futures contracts.
(vii) The fund does not currently intend to lend assets other than
securities to other parties, except by lending money (up to 10% of the
fund's net assets) to a registered investment company or fund for which FMR
or an affiliate serves as investment adviser. (This limitation does not
apply to purchases of debt securities or to repurchase agreements.)
(viii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(ix) The fund does not currently intend to invest in interests in real
estate investment trusts that are not readily marketable, or to invest in
interests in real estate limited partnerships that are not listed on the
NYSE or the A MEX or traded on the NASDAQ National Market System.
(x) The fund does not currently intend to purchase the securities of any
issuer if those officers and Trustees of the Trust and those officers and
directors of FMR who individually own more than 1/2 of 1% of the securities
of such issuer together own more than 5% of such issuer's securities.
(xi) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xii) 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
FMR or an affiliate or successor with substantially the same fundamental
investment objective, policies, and limitations as the fund.
For the fund's policies on quality and maturity, see section entitled
"Quality and Maturity" on page .
INVESTMENT LIMITATIONS OF TAX-EXEMPT
THE FOLLOWING ARE TAX-EXEMPT'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.
Government, or any of its agencies, or instrumentalities) if, as a result
thereof, (a) more than 5% of the fund's total assets would be invested in
the securities of that issuer, or (b) the fund would hold more than 10% of
the outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940 ;
(3) make short sales of securities;
(4) purchase any securities on margin, except for such short-term credits
as are necessary for the clearance of transactions;
(5) borrow money, except for temporary or emergency purposes (not for
leveraging or investment) in an amount not to exceed 33 1/3% of the value
of the fund's total assets (including the amount borrowed) less liabilities
(other than borrowings). Any borrowings that come to exceed 33 1/3% of the
fund's assets by reason of a decline in net assets will be reduced within
three days (exclusive of Sundays and Holidays) to the extent necessary to
comply with the 33 1/3% limitation;
(6) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(7) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government, or any of its agencies,
instrumentalities, territories or possessions, or issued or guaranteed by a
state government or political subdivision thereof) if as a result more than
25% of the value of its total assets would be invested in securities of
companies having their principal business activities in the same industry;
(8) purchase or sell real estate, but this shall not prevent the fund from
investing in municipal bonds or other obligations secured by real estate or
interest therein;
(9) purchase or sell physical commodities;
(10) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties (but this limit
does not apply to purchases of debt securities or to repurchase
agreements); or
(11) invest in oil, gas or other mineral exploration or development
programs.
(12) 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 with substantially the same
fundamental investment objectives, policies and limitations as the fund.
For purposes of limitations (1) and (7), FMR identifies the issuer of a
security depending on the terms and conditions of the security. In
identifying the issuer, FMR will consider the entity or entities
responsible for payment of interest and repayment of principal and the
source of such payments; the way in which assets and revenues of an issuing
political subdivision are separated from those of other political entities;
and whether a governmental body is guaranteeing the security.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE CHANGED WITHOUT
SHAREHOLDER APPROVAL.
(i) The fund may borrow money only (a) from a bank or from a registered
investment company or fund for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party. The fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(ii) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(iii) The fund does not currently intend to invest more than 25% of its
total assets in industrial revenue bonds related to a single industry.
(iv) The fund does not currently intend to purchase or sell futures
contracts or call options. This limitation does not apply to options
attached to, or acquired or traded together with, their underlying
securities, and does not apply to securities that incorporate features
similar to options or futures contracts.
(v) The fund does not currently intend to engage in repurchase agreements
or make loans, but this limitation does not apply to purchases of debt
securities.
(vi) The fund does not currently intend to purchase the securities of any
issuer if those officers and Trustees of the fund and those officers and
directors of FMR who individually own more than 1/2 of 1% of the securities
of such issuer together own more than 5% of such issuer's securities.
For the fund's policies on quality and maturity, see the section entitled
"Quality and Maturity" on page .
INVESTMENT LIMITATIONS OF TREASURY ONLY
THE FOLLOWING ARE TREASURY ONLY'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(2) borrow money, except that the fund may (i) borrow money for temporary
or emergency purposes (not for leveraging or investment) and (ii) engage in
reverse repurchase agreements for any purpose; provided that (i) and (ii)
in combination do not exceed 33 1/3% of the fund's total assets (including
the amount borrowed) less liabilities (other than borrowings). Any
borrowings that come to exceed this amount will be reduced within three
days (not including Sundays and holidays) to the extent necessary to comply
with the 33 1/3% limitation;
(3) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted
securities;
(4) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(5) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(6) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments; or
(7) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(8) 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 with substantially the same
fundamental investment objectives, policies and limitations as the fund.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT
SHAREHOLDER APPROVAL:
(i) The fund may borrow money only (a) from a bank or from a registered
investment company or fund for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party. The fund will not purchase any security while borrowings
representing more than 5% of its total assets are outstanding. The fund
will not borrow from other funds advised by FMR or its affiliates if total
outstanding borrowings immediately after such borrowing would exceed 15% of
the fund's total assets.
(ii) The fund does not currently intend to make loans, but this limitation
does not apply to purchases of debt securities.
(i ii ) The fund does not currently intend to invest all of its assets
in the securities of a single open-end management investment company with
substantially the same fundamental investment objectives, policies, and
limitations as the fund.
For the fund's policies on quality and maturity, see the section entitled
"Quality and Maturity" below.
Each funds' investments must be consistent with its investment objective
and policies. Accordingly, not all of the security types and investment
techniques discussed below are eligible investments for each of the funds.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund under the 1940 Act. These transactions may include
repurchase agreements with custodian banks; short-term obligations of, and
repurchase agreements with, the 50 largest U.S. banks (measured by
deposits); municipal securities; U.S. Government securities with affiliated
financial institutions that are primary dealers in these securities;
short-term currency transactions; and short-term borrowings. In accordance
with exemptive orders issued by the Securities and Exchange Commission
(SEC), the Board of Trustees has established and periodically reviews
procedures applicable to transactions involving affiliated financial
institutions.
ASSET-BACKED SECURITIES include pools of mortgages, loans, receivables or
other assets. Payment of principal and interest may be largely dependent
upon the cash flows generated by the assets backing the securities and, in
certain cases, supported by letters of credit, surety bonds, or other
credit enhancements. The value of asset-backed securities may also be
affected by the creditworthiness of the servicing agent for the pool, the
originator of the loans or receivables, or the entities providing
the credit support.
DELAYED-DELIVERY TRANSACTIONS. Each fund may buy and sell securities
on a delayed-delivery or when-issued basis. These transactions involve a
commitment by a fund to purchase or sell specific securities at a
predetermined price or yield, with payment and delivery taking place after
the customary settlement period for that type of security .
Typically, no interest accrues to the purchaser until the security is
delivered.
When purchasing securities on a delayed-delivery basis, each fund assumes
the rights and risks of ownership, including the risk of price and yield
fluctuations. Because a fund is not required to pay for securities until
the delivery date, these risks are in addition to the risks associated with
the fund's other investments. If a fund remains substantially fully
invested at a time when delayed-delivery purchases are outstanding, the
delayed-delivery purchases may result in a form of leverage. When
delayed-delivery purchases are outstanding, the fund will set aside
appropriate liquid assets in a segregated custodial account to cover its
purchase obligations. When a fund has sold a security on a delayed-delivery
basis, the fund does not participate in further gains or losses with
respect to the security. If the other party to a delayed-delivery
transaction fails to deliver or pay for the securities, the fund could miss
a favorable price or yield opportunity, or could suffer a loss.
Each fund may renegotiate delayed-delivery transactions after they
are entered into, and may sell underlying securities before they are
delivered, which may result in capital gains or losses.
DOMESTIC AND FOREIGN ISSUERS. Investments may be made in U.S.
dollar-denominated time deposits, certificates of deposit, and bankers'
acceptances of U.S. banks and their branches located outside of the United
States, U.S. branches and agencies of foreign banks, and foreign branches
of foreign banks. A fund may also invest in U.S. dollar-denominated
securities issued or guaranteed by other U.S. or foreign issuers, including
U.S. and foreign corporations or other business organizations, foreign
governments, foreign government agencies or instrumentalities, and U.S. and
foreign financial institutions, including savings and loan institutions,
insurance companies, mortgage bankers, and real estate investment trusts,
as well as banks.
The obligations of foreign branches of U.S. banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation and by governmental
regulation. Payment of interest and principal on these obligations may also
be affected by governmental action in the country of domicile of the branch
(generally referred to as sovereign risk). In addition, evidence of
ownership of portfolio securities may be held outside of the United
States and the fund may be subject to the risks associated with the holding
of such property overseas. Various provisions of federal law governing the
establishment and operation of U.S. branches do not apply to foreign
branches of U.S. banks.
Obligations of U.S. branches and agencies of foreign banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation and by federal and state
regulation, as well as by governmental action in the country in which the
foreign bank has its head office.
Obligations of foreign issuers involve certain additional risks. These
risks may include future unfavorable political and economic developments,
withholding taxes, seizures of foreign deposits, currency controls,
interest limitations, or other governmental restrictions that might affect
payment of principal or interest , or the ability to honor a credit
committment . Additionally, there may be less public information
available about foreign entities . Foreign issuers may be subject to
less governmental regulation and supervision than U.S. issuers. Foreign
issuers also generally are not bound by uniform accounting, auditing and
financial reporting requirements comparable to those applicable to U.S.
issuers.
FEDERALLY TAXABLE OBLIGATIONS. Under normal conditions, Tax-Exempt does
not intend to invest in securities whose interest is federally taxable.
However, from time to time on a temporary basis, Tax-Exempt may invest a
portion of its assets in fixed-income obligations whose interest is subject
to federal income tax.
Should Tax-Exempt invest in federally taxable obligations, it would
purchase securities that, in FMR's judgment, are of high quality. These
obligations would include those issued or guaranteed by the U.S.
G overnment or its agencies or instrumentalities and
repurchase agreements backed by such obligations .
Proposals to restrict or eliminate the federal income tax exemption for
interest on municipal obligations are introduced before Congress from time
to time. Proposals also may be introduced before state legislatures
that would affect the state tax treatment of Tax-Exempt's
distributions. If such proposals were enacted, the availability of
municipal obligations and the value of Tax-Exempt's funds' holdings
would be affected , and the Trustees would reevaluate
Tax-Exempt's investment objectives and policies.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Board of Trustees, FMR determines
the liquidity of a fund's investments and, through reports from FMR, the
Board monitors investments in illiquid instruments. In determining the
liquidity of a fund's investments, FMR may consider various factors,
including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including
any demand or tender features), and (5) the nature of the marketplace for
trades (including the ability to assign or offset the fund's rights and
obligations relating to the investment).
Investments currently considered by the funds to be illiquid include
repurchase agreements not entitling the holder to payment of principal and
interest within seven days. Also, FMR may determine some restricted
securities, time deposits, and municipal lease obligations to be illiquid.
In the absence of market quotations, illiquid investments are valued for
purposes of monitoring amortized cost valuation at fair value as determined
in good faith by a committee appointed by the Board of Trustees. If through
a change in values, net assets, or other circumstances, a fund were in a
position where more than 10% of its net assets were invested in illiquid
securities, it would seek to take appropriate steps to protect liquidity.
INTERFUND BORROWING PROGRAM. Pursuant to an exemptive order issued by the
SEC, each fund has received permission to lend money to, and borrow money
from, other funds advised by FMR or its affiliates. Tax-Exempt
will participate in the interfund borrowing program only as a
borrower. Interfund loans and borrowings normally extend overnight, but
can have a maximum duration of seven days. Loans may be called on one day's
notice. Treasury II, Treasury Only, Domestic , Money
Market , Government and Treasury will lend through the program only
when the returns are higher than those available from other short-term
instruments (such as repurchase agreements). A fund will borrow through the
program only when the costs are equal to or lower than the cost of bank
loans. A fund may have to borrow from a bank at a higher interest rate if
an interfund loan is called or not renewed. Any delay in repayment to a
lending fund could result in a lost investment opportunity or additional
borrowing costs. Treasury, Treasury II, Government and Treasury Only do
not currently intend to participate in the program except as a lender.
MARKET DISRUPTION RISK. The value of municipal securities may be
affected by uncertainties in the municipal market related to legislation or
litigation involving the taxation of municipal securities or the rights of
municipal securities holders in the event of a bankruptcy. Municipal
bankruptcies are relatively rare, and certain provisions of the U.S.
Bankruptcy Code governing such bankruptcies are unclear and remain
untested. Further, the application of state law to municipal issuers could
produce varying results among the states or among municipal securities
issuers within a state. These legal uncertainties could affect the
municipal securities market generally, certain specific segments of the
market, or the relative credit quality of particular securities. Any of
these effects could have a significant impact on the prices of some or all
of the municipal securities held by a fund, making it more difficult for
the fund to maintain a stable net asset value per share.
MONEY MARKET SECURITIES are high-quality, short-term obligations. Some
money market securities employ a trust or other similar structure to modify
the maturity, price characteristics, or quality of financial assets. For
example, put features can be used to modify the maturity of a security or
interest rate adjustment features can be used to enhance price stability.
If the structure does not perform as intended, adverse tax or investment
consequences may result. Neither the Internal Revenue Service (IRS) nor any
other regulatory authority has ruled definitively on certain legal issues
presented by structured securities. Future tax or other regulatory
determinations could adversely affect the value, liquidity, or tax
treatment of the income received from these securities or the nature and
timing of distributions made by the funds.
MUNICIPAL LEASE S and participation interests therein may take the form
of a lease, an installment purchase, or a conditional sale contract, and
are issued by state and local governments and authorities to acquire land
or a wide variety of equipment and facilities. Generally, the funds will
not hold such obligations directly as a lessor of the property, but will
purchase a participation interest in a municipal obligation from a bank or
other third party. A participation interest gives a fund a specified,
undivided interest in the obligation in proportion to its purchased
interest in the total amount of the obligation.
Municipal leases frequently have risks distinct from those associated with
general obligation or revenue bonds. State constitutions and statutes set
forth requirements that states or municipalities must meet to incur debt.
These may include voter referenda, interest rate limits, or public sale
requirements. Leases, installment purchases, or conditional sale contracts
(which normally provide for title to the leased asset to pass to the
governmental issuer) have evolved as a means for governmental issuers to
acquire property and equipment without meeting their constitutional and
statutory requirements for the issuance of debt. Many leases and contracts
include "non-appropriation clauses" providing that the governmental issuer
has no obligation to make future payments under the lease or contract
unless money is appropriated for such purposes by the appropriate
legislative body on a yearly or other periodic basis. Non-appropriation
clauses free the issuer from debt issuance limitations.
MUNICIPAL SECTORS:
ELECTRIC UTILITIES INDUSTRY. The electric utilities industry has been
experiencing, and will continue to experience, increased competitive
pressures. Federal legislation in the last two years will open transmission
access to any electricity supplier, although it is not presently known to
what extent competition will evolve. Other risks include: (a) the
availability and cost of fuel, (b) the availability and cost of capital,
(c) the effects of conservation on energy demand, (d) the effects of
rapidly changing environmental, safety, and licensing requirements, and
other federal, state, and local regulations, (e) timely and sufficient rate
increases, and (f) opposition to nuclear power.
HEALTH CARE INDUSTRY. The health care industry is subject to regulatory
action by a number of private and governmental agencies, including federal,
state, and local governmental agencies. A major source of revenues for the
health care industry is payments from the Medicare and Medicaid programs.
As a result, the industry is sensitive to legislative changes and
reductions in governmental spending for such programs. Numerous other
factors may affect the industry, such as general and local economic
conditions; demand for services; expenses (including malpractice insurance
premiums); and competition among health care providers. In the future, the
following elements may adversely affect health care facility operations:
adoption of legislation proposing a national health insurance program;
other state or local health care reform measures; medical and technological
advances which dramatically alter the need for health services or the way
in which such services are delivered; changes in medical coverage which
alter the traditional fee-for-service revenue stream; and efforts by
employers, insurers, and governmental agencies to reduce the costs of
health insurance and health care services.
HOUSING. Housing revenue bonds are generally issued by a state, county,
city, local housing authority, or other public agency. They generally are
secured by the revenues derived from mortgages purchased with the proceeds
of the bond issue. It is extremely difficult to predict the supply of
available mortgages to be purchased with the proceeds of an issue or the
future cash flow from the underlying mortgages. Consequently, there are
risks that proceeds will exceed supply, resulting in early retirement of
bonds, or that homeowner repayments will create an irregular cash flow.
Many factors may affect the financing of multi-family housing projects,
including acceptable completion of construction, proper management,
occupancy and rent levels, economic conditions, and changes to current laws
and regulations.
EDUCATION. In general, there are two types of education-related bonds;
those issued to finance projects for public and private colleges and
universities, and those representing pooled interests in student loans.
Bonds issued to supply educational institutions with funds are subject to
the risk of unanticipated revenue decline, primarily the result of
decreasing student enrollment or decreasing state and federal funding.
Among the factors that may lead to declining or insufficient revenues are
restrictions on students' ability to pay tuition, availability of state and
federal funding, and general economic conditions. Student loan revenue
bonds are generally offered by state (or substate) authorities or
commissions and are backed by pools of student loans. Underlying student
loans may be guaranteed by state guarantee agencies and may be subject to
reimbursement by the United States Department of Education through its
guaranteed student loan program. Others may be private, uninsured loans
made to parents or students which are supported by reserves or other forms
of credit enhancement. Recoveries of principal due to loan defaults may be
applied to redemption of bonds or may be used to re-lend, depending on
program latitude and demand for loans. Cash flows supporting student loan
revenue bonds are impacted by numerous factors, including the rate of
student loan defaults, seasoning of the loan portfolio, and student
repayment deferral during periods of forbearance. Other risks associated
with student loan revenue bonds include potential changes in federal
legislation regarding student loan revenue bonds, state guarantee agency
reimbursement and continued federal interest and other program subsidies
currently in effect.
WATER AND SEWER. Water and sewer revenue bonds are often considered to have
relatively secure credit as a result of their issuer's importance, monopoly
status, and generally unimpeded ability to raise rates. Despite this, lack
of water supply due to insufficient rain, run-off, or snow pack is a
concern that has led to past defaults. Further, public resistance to rate
increases, costly environmental litigation, and federal environmental
mandates are challenges faced by issuers of water and sewer bonds.
TRANSPORTATION. Transportation debt may be issued to finance the
construction of airports, toll roads, highways or other transit
facilities. Airport bonds are dependent on the general stability of the
airline industry and on the stability of a specific carrier who uses the
airport as a hub. Air traffic generally follows broader economic trends and
is also affected by the price and availability of fuel. Toll road bonds are
also affected by the cost and availability of fuel as well as toll levels,
the presence of competing roads, and the general economic health of the
area. Fuel costs and availability also affect other transportation-related
securities, as does the presence of alternate forms of transportation, such
as public transportation.
PUT FEATURES entitle the holder to sell a security back to the issuer or a
third party at any time or at specified intervals. They are subject to the
risk that the put provider is unable to honor the put feature
(purchase the security). Put providers often support their ability to buy
securities on demand by obtaining letters of credit or other guarantees
from other entities . Demand features, standby commitments,
and tender options are types of put features.
1.QUALITY AND MATURITY. Pursuant to procedures adopted by the Board of
Trustees, the funds may purchase only high-quality securities that FMR
believes present minimal credit risks. To be considered high-quality, a
security must be rated in accordance with applicable rules in one of the
two highest categories for short-term securities by at least two nationally
recognized rating services (or by one, if only one rating service has rated
the security); or, if unrated, judged to be of equivalent quality by FMR.
High-quality securities are divided into "first tier" and "second tier"
securities. First tier securities are those deemed to be in the highest
rating category (e.g., Standard & Poor's A-1 or SP-1), and second tier
securities are those deemed to be in the second highest rating category
(e.g., Standard & Poor's A-2 or SP-2). Split-rated securities may be
determined to be either first or second tier based on applicable
regulations.
A fund may not invest more than 5% of its total assets in second tier
securities. In addition, a fund may not invest more than 1% of its total
assets or $1 million (whichever is greater) in the second tier securities
of a single issuer.
A fund currently intends to limit its investments to securities with
remaining maturities of 397 days or less, and to maintain a dollar-weighted
average maturity of 90 days or less. When determining the maturity of a
security, a fund may look to an interest rate reset or demand feature.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to sell that security back to the
original seller at an agreed-upon price. The resale price reflects the
purchase price plus an agreed-upon incremental amount which is unrelated to
the coupon rate or maturity of the purchased security. The securities
purchased by a fund are used to collateralize the repurchase obligation. As
such, they are held in an account of the fund at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus the
accrued incremental amount. While it does not presently appear possible
to eliminate all risks from these transactions (particularly the
possibility that the value of the underlying security will be less than the
resale price, as well as delays and costs to a fund in connection with
bankruptcy proceedings), it is each fund's current policy to engage in
repurchase agreement transactions with parties whose creditworthiness has
been reviewed and found satisfactory by FMR.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933 , or in a registered public offering. Where
registration is required, a fund may be obligated to pay all or part of the
registration expense and a considerable period may elapse between the time
it decides to seek registration and the time it may be permitted to sell a
security under an effective registration statement. If, during such a
period, adverse market conditions were to develop, a fund might obtain a
less favorable price than prevailed when it decided to seek registration of
the security. However, in general, each fund anticipates holding restricted
securities to maturity or selling them in an exempt transaction.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement. A
fund will enter into reverse repurchase agreements only with parties whose
creditworthiness has been found satisfactory by FMR. Such transactions may
increase fluctuations in the market value of the fund's assets and may be
viewed as a form of leverage.
SECURITIES LENDING. A fund may lend securities to parties such as
broker-dealers or institutional investors, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange and
a subsidiary of FMR Corp.
Securities lending allows a fund to retain ownership of the securities
loaned and, at the same time, to earn additional income. Since there may be
delays in the recovery of loaned securities, or even a loss of rights in
collateral supplied should the borrower fail financially, loans will be
made only to parties deemed by FMR to be of good standing. Furthermore,
they will only be made if, in FMR's judgment, the consideration to be
earned from such loans would justify the risk.
FMR understands that it is the current view of the SEC Staff that a fund
may engage in loan transactions only under the following conditions: (1)
the fund must receive 100% collateral in the form of cash or cash
equivalents (e.g., U.S. Treasury bills or notes) from the borrower; (2) the
borrower must increase the collateral whenever the market value of the
securities loaned (determined on a daily basis) rises above the value of
the collateral; (3) after giving notice, the fund must be able to terminate
the loan at any time; (4) the fund must receive reasonable interest on the
loan or a flat fee from the borrower, as well as amounts equivalent to any
dividends, interest, or other distributions on the securities loaned and to
any increase in market value; (5) the fund may pay only reasonable
custodian fees in connection with the loan; and (6) the Board of Trustees
must be able to vote proxies on the securities loaned, either by
terminating the loan or by entering into an alternative arrangement with
the borrower.
Cash received through loan transactions may be invested in any security in
which a fund is authorized to invest. Investing this cash subjects that
investment, as well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
SHORT SALES "AGAINST THE BOX." A fund may sell securities short when it
owns or has the right to obtain securities equivalent in kind and
amount to the securities sold short. Short sales could be used to protect
the net asset value per share of the fund in anticipation of increased
interest rates, without sacrificing the current yield of the securities
sold short. If a fund enters into a short sale against the box, it will be
required to set aside securities equivalent in kind and amount to the
securities sold short (or securities convertible or exchangeable into such
securities) and will be required to hold such securities while the short
sale is outstanding. The fund will incur transaction costs, including
interest expenses, in connection with opening, maintaining, and closing
short sales against the box.
SOURCES OF CREDIT OR LIQUIDITY SUPPORT. FMR may rely on its evaluation
of the credit of a bank or another entity in determining whether to
purchase a security supported by a letter of credit guarantee, insurance or
other source of credit or liquidity. In evaluating the credit of a foreign
bank or other foreign entities, FMR will consider whether adequate public
information about the entity is available and whether the entity may be
subject to unfavorable political or economic developments, currency
controls, or other government restrictions that might affect its ability to
honor its commitment.
STRIPPED GOVERNMENT SECURITIES. Stripped securities are created by
separating the income and principal components of a debt instrument and
selling them separately. U.S. Treasury STRIPS (Separate Trading of
Registered Interest and Principal of Securities), are created when the
coupon payments and the principal payment are stripped from an outstanding
Treasury bond by the Federal Reserve Bank. Bonds issued by government
agencies may also be stripped in this fashion.
Privately stripped government securities are created when a dealer deposits
a Treasury security or federal agency security with a custodian for
safekeeping and then sells the coupon payments and principal payment that
will be generated by this security. Proprietary receipts, such as
Certificates of Accrual on Treasury Securities (CATS), Treasury Investment
Growth Receipts (TIGRS), and generic Treasury Receipts (TRs), are stripped
U.S. Treasury securities that are separated into their component parts
through trusts created by their broker sponsors. Bonds issued by
government agencies may also be stripped in this fashion.
Because of the SEC's views on privately stripped government securities,
a fund must evaluate them as it would non-government securities
pursuant to regulatory guidelines applicable to all money market funds.
A fund currently intends to purchase only those privately
stripped government securities that have either received the highest rating
from two nationally recognized rating services (or one, if only one has
rated the security) or, if unrated, have been judged to be of
equivalent quality by FMR pursuant to procedures adopted by the Board of
Trustees.
VARIABLE AND FLOATING RATE SECURITIES provide for periodic adjustments
of the interest rate paid on the security. Variable rate securities provide
for a specified periodic adjustment in the interest rate, while floating
rate securities have interest rates that change whenever there is a change
in a designated benchmark rate. Some variable or floating rate securities
have put features.
ZERO COUPON BONDS do not make regular interest payments. Instead, they are
sold at a deep discount from their face value and are redeemed at face
value when they mature. Because zero coupon bonds do not pay current
income, their prices can be very volatile when interest rates change. In
calculating its daily dividend, a fund takes into account as income a
portion of the difference between a zero coupon bond's purchase price and
its face value.
SHAREHOLDER NOTICE. Treasury, under normal conditions, invests at least
65% of its total assets in U.S. Treasury bills, notes and bond, and
repurchase agreements backed by those obligations. The balance of its
assets may be invested in other direct obligations of the United States.
These operating policies may be changed upon 90 days' notice to
shareholders.
Treasury II, under normal conditions, invests 100% of its total assets in
U.S. Treasury bills, notes and bonds and other direct obligations of the
U.S. Treasury. The fund may also engage in repurchase agreements backed by
those obligations. These operating policies may be changed upon 90 days'
notice to shareholders.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are
placed on behalf of each fund by FMR pursuant to authority contained in
each fund's management contract. If FMR grants investment management
authority to the sub-adviser (see the section entitled " Management
Contracts"), the sub-adviser will be authorized to place orders for the
purchase and sale of portfolio securities, and will do so in
accordance with the policies described below. FMR is also responsible for
the placement of transaction orders for other investment companies and
accounts for which it or its affiliates act as investment adviser.
Securities purchased and sold by the fund generally will be traded on a net
basis (i.e., without commission). In selecting broker-dealers, subject
to applicable limitations of the federal securities laws, FMR considers
various relevant factors, including, but not limited to, the size and type
of the transaction; the nature and character of the markets for the
security to be purchased or sold; the execution efficiency, settlement
capability, and financial condition of the broker- dealer firm; the
broker-dealer's execution services rendered on a continuing basis; and the
reasonableness of any commissions.
The funds may execute portfolio transactions with broker-dealers who
provide research and execution services to the funds or other accounts over
which FMR or its affiliates exercise investment discretion. Such services
may include advice concerning the value of securities; the advisability of
investing in, purchasing, or selling securities; and the
availability of securities or the purchasers or sellers of securities .
In addition, such broker-dealers may furnish analyses and reports
concerning issuers, industries, securities, economic factors and trends,
portfolio strategy and performance of accounts; effect securities
transactions , and perform functions incidental thereto (such as
clearance and settlement). FMR maintains a listing of broker-dealers who
provide such services on a regular basis. However, as many transactions on
behalf of the funds are placed with broker-dealers (including
broker-dealers on the list) without regard to the furnishing of such
services, it is not possible to estimate the proportion of such
transactions directed to such broker-dealers solely because such services
were provided. The selection of such broker-dealers generally is made by
FMR (to the extent possible consistent with execution considerations) based
upon the quality of research and execution services provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the funds may be useful to FMR in rendering investment management
services to the funds or its other clients, and conversely, such research
provided by broker-dealers who have executed transaction orders on behalf
of other FMR clients may be useful to FMR in carrying out its obligations
to the funds. The receipt of such research has not reduced FMR's normal
independent research activities; however, it enables FMR to avoid the
additional expenses that could be incurred if FMR tried to develop
comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause the
funds to pay such higher commissions, FMR must determine in good faith that
such commissions are reasonable in relation to the value of the brokerage
and research services provided by such executing broker-dealers, viewed in
terms of a particular transaction or FMR's overall responsibilities to the
funds and its other clients. In reaching this determination, FMR will not
attempt to place a specific dollar value on the brokerage and research
services provided, or to determine what portion of the compensation should
be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided
assistance in the distribution of shares of the funds or shares of other
Fidelity funds to the extent permitted by law. FMR may use research
services provided by and place agency transactions with FBSI and
Fidelity Brokerage Services (FBS), subsidiaries of FMR Corp., if the
commissions are fair, reasonable, and comparable to commissions charged by
nonaffiliated, qualified brokerage firms for similar services. From
September 1992 through December 1994, FBS operated under the name Fidelity
Brokerage Services Limited, Inc. (FBSL). As of January 1995, FBSL was
converted to an unlimited liability company and assumed the name FBS. Prior
to September 4, 1992, FBSL operated under the name Fidelity Portfolio
Services, Ltd. (FPSL) as a wholly owned subsidiary of Fidelity
International Limited (FIL). Edward C. Johnson 3d is Chairman of FIL. Mr.
Johnson 3d, Johnson family members, and various trusts for the benefit of
the Johnson family own, directly or indirectly, more than 25% of the voting
common stock of FIL.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, unless certain requirements
are satisfied. Pursuant to such requirements, the Board of Trustees has
authorized FBSI to execute fund transactions on national securities
exchanges in accordance with approved procedures and applicable SEC rules.
Each fund's Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio
transactions on behalf of the funds and review the commissions paid by each
fund over representative periods of time to determine if they are
reasonable in relation to the benefits to the funds.
For the fiscal years ended March 31, 1995, 1994, and 1993, the funds paid
no brokerage commissions.
From time to time, the Trustees will review whether the recapture for the
benefit of the funds of some portion of the brokerage commissions or
similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each fund seeks to recapture soliciting
broker-dealer fees on the tender of fund securities, but at present no
other recapture arrangements are in effect. The Trustees intend to continue
to review whether recapture opportunities are available and are legally
permissible and, if so, to determine in the exercise of their business
judgment whether it would be advisable for each fund to seek such
recapture.
Although the Trustees and officers of each fund are substantially the same
as those of other funds managed by FMR, investment decisions for each fund
are made independently from those of other funds managed by FMR or accounts
managed by FMR affiliates. It sometimes happens that the same security is
held in the portfolio of more than one of these funds or accounts.
Simultaneous transactions are inevitable when several funds and accounts
are managed by the same investment adviser, particularly when the same
security is suitable for the investment objective of more than one fund or
account.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with procedures believed to be appropriate and equitable for each fund. In
some cases this system could have a detrimental effect on the price or
value of the security as far as each fund is concerned. In other cases,
however, the ability of the funds to participate in volume transactions
will produce better executions and prices for the funds. It is the current
opinion of the Trustees that the desirability of retaining FMR as
investment adviser to each fund outweighs any disadvantages that may be
said to exist from exposure to simultaneous transactions.
VALUATION
Each fund values its investments on the basis of amortized cost. This
technique involves valuing an instrument at its cost as adjusted for
amortization of premium or accretion of discount rather than its value
based on current market quotations or appropriate substitutes which reflect
current market conditions. The amortized cost value of an instrument may be
higher or lower than the price a fund would receive if it sold the
instrument.
Valuing each fund's instruments on the basis of amortized cost and use of
the term " money market fund" are permitted by Rule 2a-7 under
the 1940 Act. The funds must adhere to certain conditions under Rule 2a-7;
these conditions are summarized on page .
The Board of Trustees oversees FMR's adherence to SEC rules
concerning money market funds, and has established procedures designed to
stabilize each fund's NAV at $1.00. At such intervals as they deem
appropriate, the Trustees consider the extent to which NAV calculated by
using market valuations would deviate from $1.00 per share. If the Trustees
believe that a deviation from a fund's amortized cost per share may result
in material dilution or other unfair results to shareholders, the Trustees
have agreed to take such corrective action, if any, as they deem
appropriate to eliminate or reduce, to the extent reasonably practicable,
the dilution or unfair results. Such corrective action could include
selling fund instruments prior to maturity to realize capital gains or
losses or to shorten average portfolio maturity; withholding
dividends; redeeming shares in kind; establishing NAV by using available
market quotations; and such other measures as the Trustees may deem
appropriate.
During periods of declining interest rates, each fund's yield based on
amortized cost may be higher than the yield based on market valuations.
Under these circumstances, a shareholder in a fund would be able to obtain
a somewhat higher yield than would result if a fund utilized market
valuations to determine its NAV. The converse would apply in a period of
rising interest rates.
PERFORMANCE
The funds may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is not
intended to indicate future returns. Y ield and total return
fluctuate in response to market conditions and other factors.
YIELD CALCULATIONS. To compute a fund's yield for a period, the net
change in value of a hypothetical account containing one share reflects the
value of additional shares purchased with dividends from the one original
share and dividends declared on both the original share and any additional
shares. The net change is then divided by the value of the account at the
beginning of the period to obtain a base period return. This base
period return is annualized to obtain a current annualized yield. A n
effective yield may also be calculated by compounding the base
period return over a one-year period. In addition to the current yield, the
funds may quote yields in advertising based on any historical seven-day
period. Yields are calculated on the same basis as other money
market funds, as required by applicable regulations.
Yield information may be useful in reviewing a class's performance
and in providing a basis for comparison with other investment alternatives.
However, each class's yield fluctuates, unlike investments that pay
a fixed interest rate over a stated period of time. When comparing
investment alternatives, investors should also note the quality and
maturity of the portfolio securities of respective investment
companies they have chosen to consider.
Investors should recognize that in periods of declining interest rates a
class's yield will tend to be somewhat higher than prevailing market
rates, and in periods of rising interest rates a class's yield will
tend to be somewhat lower. Also, when interest rates are falling, the
inflow of net new money to a fund from the continuous sale of its shares
will likely be invested in instruments producing lower yields than the
balance of a fund's holdings, thereby reducing a class's current
yield. In periods of rising interest rates, the opposite can be expected to
occur.
T ax-equivalent yield is the rate an investor would have to earn from
a fully taxable investment after taxes to equal the fund's tax-free yield.
Tax-equivalent yields are calculated by dividing a yield by the
result of one minus a stated federal or combined federal and state tax
rate. If any portion of the yield is tax-exempt, only that portion
is adjusted in the calculation.
The following table shows the effect of a shareholder's tax status on
effective yield under federal income tax laws for 1995. It shows the
approximate yield a taxable security must provide at various income
brackets to produce after-tax yields equivalent to those of hypothetical
tax-exempt obligations yielding from 2.00% to 8.00%. Of course, no
assurance can be given that a fund will achieve any specific tax-exempt
yield. While Tax-Exempt invests principally in obligations whose interest
is exempt from federal income tax, other income received by the fund may be
taxable.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1995 TAX RATES AND TAX-EQUIVALENT YIELDS
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Federal If individual tax-exempt yield is:
Income
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Tax 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
<C> <C>
Single Return* Joint Return* Bracket** Then taxable equivalent yield is:
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 23,351 - $ 36,001 - 28.0% 2.78% 4.17% 5.56% 6.94% 8.33% 9.72% 11.11%
$ 56,500 $ 94,250
$ 56,551 - $ 94,251 - 31.0% 2.90% 4.35% 5.80% 7.25% 8.70% 10.14% 11.59%
$117,950 $143,600
$117,951 - $143,601 - 36.0% 3.13% 4.69% 6.25% 7.81% 9.38% 10.94% 12.50%
$256,500 $256,500
$256,501 - $256,501 39.6% 3.31% 4.97% 6.62% 8.28% 9.93% 11.59% 13.25%
</TABLE>
* Net amount subject to federal income tax after deductions and
exemptions. Assumes ordinary income only.
** Excludes the impact of the phaseout of personal exemptions, limitations
on itemized deductions, and other credits, exclusions, and adjustments
which may increase a taxpayer's marginal tax rate. An increase in a
shareholder's marginal tax rate would increase that shareholder's
tax-equivalent yield.
Tax-Exempt may invest a portion of its assets in obligations that are
subject to state or federal income taxes. When the fund invests in these
obligations, its tax-equivalent yield will be lower. In the table above,
the tax-equivalent yields are calculated assuming investments are 100%
federally and state tax-free.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of a class's return, including the effect of reinvesting
dividends and capital gain distributions, and any change in class's
NAV over a stated period. Average annual total returns are calculated by
determining the growth or decline in value of a hypothetical historical
investment over a stated period, and then calculating the annually
compounded percentage rate that would have produced the same result if the
rate of growth or decline in value had been constant over the period. For
example, a cumulative total return of 100% over ten years would produce an
average annual return of 7.18%, which is the steady annual rate of return
that would equal 100% growth on a compounded basis in ten years. While
average annual returns are a convenient means of comparing investment
alternatives, investors should realize that performance is not constant
over time, but changes from year to year, and that average annual returns
represent averaged figures as opposed to the actual year-to-year
performance of a class .
In addition to average annual total returns, a class may quote
unaveraged or cumulative total returns reflecting the simple change in
value of an investment over a stated period. Average annual and cumulative
total returns may be quoted as a percentage or as a dollar amount,
and may be calculated for a single investment, a series of investments, or
a series of redemptions, over any time period. Total returns may be broken
down into their components of income and capital (including capital gains
and changes in share price) in order to illustrate the relationship of
these factors and their contributions to total return. Total returns may be
quoted on a before-tax or after-tax basis. Total returns, yields, and other
performance information may be quoted numerically or in a table, graph, or
similar illustration.
HISTORICAL RESULTS. The following tables show each fund's Class A
7-day yields, as well as Tax-Exempt's Class A tax-equivalent
yields, and Class A total returns for the period ended March 31,
1995.
Tax-Exempt's Class A tax-equivalent yield is based on a 36 %
federal income tax rate.
Average Annual Total Returns Cumulative Total Returns
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C>
Seven-Day Tax One Five Life of One Five Life of
Yield Equivalent Year Years Fund* Year Years Fund*
Yield
Treasury
5.98% N/A 4.79% 4.93% 6.18% 4.79% 27.23% 75.55%
- Class A
Treasury
5.98% N/A 4.78% 4.90% 6.03% 4.78% 27.03% 61.24%
II - Class
A
Governm
6.01% N/A 4.86% 4.99% 6.32% 4.86% 27.60% 81.07%
ent -
Class A
Domestic
6.06% N/A 4.97% 5.03% 5.31% 4.97% 27.81% 32.32%
- Class A
Money
6.07% N/A 4.99% 5.09% 6.43% 4.99% 28.15% 83.60%
Market -
Class A
Treasury
5.80% N/A 4.65% N/A 4.45% 4.65% N/A 21.65%
Only -
Class A
Tax-Exem
3.94% 6.16% 3.18% 3.65% 4.41% 3.18% 19.61% 51.86%
pt - Class
A
</TABLE>
* Life of Fund figures are from commencement of operations of each fund.
Commencement of operations for each fund are as follows: Domestic -
November 3, 19 89; Government - July 25, 19 85; Money Market -
July 3, 19 85; Treasury - November 1, 19 85; Treasury II -
February 2, 19 87; Treasury Only - October 3, 19 90; and
Tax-Exempt - July 25, 19 85.
Note: If FMR had not reimbursed certain fund expenses during these periods,
the total returns would have been lower and the yields for Class
A of each fund would have been:
Fund Yield
Treasury - Class A 5.92%
Treasury II - Class A 5.91%
Government - Class A 5.95%
Domestic - Class A 5.97%
Money Market - Class A 6.01%
Treasury Only - Class A 5.58%
Tax-Exempt - Class A 3.86%
The following tables show the income and capital elements of each fund's
Class A cumulative total return. The tables compare each fund's Class A
return to the record of the Standard & Poor's Composite Index of 500 Stocks
(S&P 500), the Dow Jones Industrial Average (DJIA), and the cost of living
(measured by the Consumer Price Index, or CPI) over the same period. The
CPI information is as of the month end closest to the initial investment
date for each fund. The S&P 500 and DJIA comparisons are provided to show
how each class's total return compared to the record of a broad average of
common stocks and a narrower set of stocks of major industrial companies,
respectively, over the same period. Of course, since each fund invests in
short-term fixed-income securities, common stocks represent a different
type of investment from the fund. Common stocks generally offer greater
growth potential than the funds, but generally experience greater price
volatility, which means greater potential for loss. In addition, common
stocks generally provide lower income than fixed-income investments, such
as the funds. Figures for the S&P 500 and DJIA are based on the prices of
unmanaged groups of stocks and, unlike the funds' returns, do not include
the effect of paying brokerage commissions or other costs of investing.
TREASURY
HISTORICAL FUND RESULTS
During the period from November 9, 1985 through March 31, 1995, a
hypothetical investment of $10,000 in Class A of the fund would have grown
to $17,555 assuming all dividends were reinvested. This was a period of
fluctuating interest rates and the figures below should not be considered
representative of the dividend income or capital gain or loss that could be
realized from an investment in Class A of the fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of
3/31 Initial Reinvested Reinvested Value Living**
$10,000 Dividends Capital Gain
Investment Distributions
1986* $ 10,000 $ 302 $ 0 $ 10,302 $ 12,516 $ 13,138 $ 10,009
1987 10,000 957 0 10,957 15,797 17,230 10,313
1988 10,000 1,686 0 11,686 14,482 15,351 10,718
1989 10,000 2,641 0 12,641 17,110 18,357 11,251
1990 10,000 3,798 0 13,798 20,408 22,502 11,840
1991 10,000 4,886 0 14,886 23,346 25,158 12,420
1992 10,000 5,702 0 15,702 25,927 28,822 12,815
1993 10,000 6,253 0 16,253 29,882 31,525 13,211
1994 10,000 6,753 0 16,753 30,323 34,307 13,542
1995 10,000 7,555 0 17,555 35,041 40,304 13,928
</TABLE>
* From November 9, 1985 (commencement of operations).
** From month end closest to Initial Investment Date.
Explanatory Notes: With an initial investment of $10,000 made on November
9, 1985, the net amount invested in Class A shares of the fund was $10,000.
The cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends for the period covered (that is, their cash
value at the time they were reinvested) amounted to $17,555. If
distributions had not been reinvested, the amount of distributions earned
from Class A shares of the fund over time would have been smaller and the
cash payments (dividends) for the period would have come to $5,643. The
fund did not distribute any capital gains during the period. Tax
consequences of different investments have not been factored into the above
figures.
TREASURY II
HISTORICAL FUND RESULTS
During the period from February 2, 1987 through March 31, 1995, a
hypothetical investment of $10,000 in Class A of the fund would have grown
to $16,124 assuming all dividends were reinvested. This was a period of
fluctuating interest rates and the figures below should not be considered
representative of the dividend income or capital gain or loss that could be
realized from an investment in Class A of the fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of
3/31 Initial Reinvested Reinvested Value Living**
$10,000 Dividends Capital Gain
Investment Distributions
1987* $ 10,000 $ 93 $ 0 $ 10,093 $ 10,694 $ 10,731 $ 10,081
1988 10,000 759 0 10,759 9,804 9,560 10,477
1989 10,000 1,632 0 11,632 11,583 11,432 10,998
1990 10,000 2,693 0 12,693 13,816 14,014 11,574
1991 10,000 3,692 0 13,692 15,805 15,668 12,140
1992 10,000 4,433 0 14,433 17,552 17,950 12,527
1993 10,000 4,932 0 14,932 20,229 19,633 12,914
1994 10,000 5,389 0 15,389 20,528 21,366 13,237
1995 10,000 6,124 0 16,124 23,722 25,101 13,615
</TABLE>
* From February 2, 1987 (commencement of operations).
** From month end closest to Initial Investment Date.
Explanatory Notes: With an initial investment of $10,000 made on February
2, 1987, the net amount invested in Class A shares of the fund was $10,000.
The cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends for the period covered (that is, their cash
value at the time they were reinvested) amounted to $16,124. If
distributions had not been reinvested, the amount of distributions earned
from Class A shares of the fund over time would have been smaller and the
cash payments (dividends) for the period would have come to $4,790. The
fund did not distribute any capital gains during the period. Tax
consequences of different investments have not been factored into the above
figures.
GOVERNMENT
HISTORICAL FUND RESULTS
During the period from July 25, 1985 through March 31, 1995, a hypothetical
investment of $10,000 in Class A of the fund would have grown to $18,107
assuming all dividends were reinvested. This was a period of fluctuating
interest rates and the figures below should not be considered
representative of the dividend income or capital gain or loss that could be
realized from an investment in Class A of the fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of
3/31 Initial Reinvested Reinvested Value Living**
$10,000 Dividends Capital Gain
Investment Distributions
1986* $ 10,000 $ 547 $ 0 $ 10,547 $ 12,812 $ 13,855 $ 10,093
1987 10,000 1,233 0 11,233 16,170 18,170 10,399
1988 10,000 2,017 0 12,017 14,824 16,188 10,807
1989 10,000 3,001 0 13,001 17,514 19,358 11,345
1990 10,000 4,191 0 14,191 20,890 23,729 11,939
1991 10,000 5,318 0 15,318 23,897 26,530 12,523
1992 10,000 6,167 0 16,167 26,540 30,395 12,922
1993 10,000 6,743 0 16,743 30,588 33,245 13,321
1994 10,000 7,267 0 17,267 31,039 36,179 13,655
1995 10,000 8,107 0 18,107 35,869 42,502 14,045
</TABLE>
* From July 25, 1985 (commencement of operations).
** From month end closest to Initial Investment Date.
Explanatory Notes: With an initial investment of $10,000 made on July 25,
1985, the net amount invested in Class A shares of the fund was $10,000.
The cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends for the period covered (that is, their cash
value at the time they were reinvested) amounted to $18,107. If
distributions had not been reinvested, the amount of distributions earned
from Class A shares of the fund over time would have been smaller and the
cash payments (dividends) for the period would have come to $5,954. The
fund did not distribute any capital gains during the period. Tax
consequences of different investments have not been factored into the above
figures.
DOMESTIC
HISTORICAL FUND RESULTS
During the period from November 3, 1989 through March 31, 1995, a
hypothetical investment of $10,000 in Class A of the fund would have grown
to $13,232 assuming all dividends were reinvested. This was a period of
fluctuating interest rates and the figures below should not be considered
representative of the dividend income or capital gain or loss that could be
realized from an investment in Class A of the fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of
3/31 Initial Reinvested Reinvested Value Living**
$10,000 Dividend Capital Gain
Investment Distributions
1990* $ 10,000 $ 352 $ 0 $ 10,352 $ 10,189 $ 10,451 $ 10,247
1991 10,000 1,192 0 11,192 11,655 11,685 10,748
1992 10,000 1,808 0 11,808 12,944 13,387 11,091
1993 10,000 2,222 0 12,222 14,919 14,642 11,433
1994 10,000 2,605 0 12,605 15,139 15,935 11,720
1995 10,000 3,232 0 13,232 17,494 18,720 12,054
</TABLE>
* From November 3, 1989 (commencement of operations).
** From month end closest to Initial Investment Date.
Explanatory Notes: With an initial investment of $10,000 made on November
3, 1989, the net amount invested in Class A shares of the fund was
$10,000 . The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends for the period covered (that is,
their cash value at the time they were reinvested) amounted to $13,232 .
If distributions had not been reinvested, the amount of distributions
earned from Class A shares of the fund over time would have been smaller
and the cash payments (dividends) for the period would have come to $2,807
. The fund did not distribute any capital gains during the period. Tax
consequences of different investments have not been factored into the above
figures.
MONEY MARKET
HISTORICAL FUND RESULTS
During the period from July 5 , 1985 through March 31, 1995, a
hypothetical investment of $10,000 in Class A of the fund would have
grown to $ 18,360 assuming all dividends were reinvested. This was a
period of fluctuating interest rates and the figures below should not be
considered representative of the dividend income or capital gain or loss
that could be realized from an investment in Class A of the fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of
3/31 Initial Reinvested Reinvested Value Living**
$10,000 Dividends Capital Gain
Investment Distributions
1986* $ 10,000 $ 601 $ 0 $ 10,601 $ 12,848 $ 14,126 $ 10,112
1987 10,000 1,297 0 11,297 16,217 18,525 10,418
1988 10,000 2,103 0 12,103 14,867 16,504 10,827
1989 10,000 3,113 0 13,113 17,564 19,736 11,366
1990 10,000 4,327 0 14,327 20,950 24,192 11,961
1991 10,000 5,492 0 15,492 23,965 27,048 12,546
1992 10,000 6,358 0 16,358 26,615 30,988 12,946
1993 10,000 6,945 0 16,945 30,675 33,894 13,346
1994 10,000 7,486 0 17,486 31,128 36,885 13,680
1995 10,000 8,360 0 18,360 35,971 43,332 14,071
</TABLE>
* From July 5 , 1985 (commencement of operations).
** From month end closest to Initial Investment Date.
Explanatory Notes: With an initial investment of $10,000 made on July 5 ,
1985, the net amount invested in Class A shares of the fund was $ 10,000
. The cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends for the period covered (that is, their cash
value at the time they were reinvested) amounted to $ 18,360 . If
distributions had not been reinvested, the amount of distributions earned
from Class A shares of the fund over time would have been smaller and the
cash payments (dividends) for the period would have come to $ 6,093 . The
fund did not distribute any capital gains during the period. Tax
consequences of different investments have not been factored into the above
figures.
TREASURY ONLY
HISTORICAL FUND RESULTS
During the period from October 3, 1990 through March 31, 1995, a
hypothetical investment of $10,000 in Class A of the fund would have
grown to $ 18,183 assuming all dividends were reinvested. This was a
period of fluctuating interest rates and the figures below should not be
considered representative of the dividend income or capital gain or loss
that could be realized from an investment in Class A of the fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of
7/31 Initial Reinvested Reinvested Value Living**
$10,000 Dividends Capital Gain
Investment Distributions
1991* $ 10,000 $ 353 $ 0 $ 10,353 $ 12,114 $ 11,848 $ 10,173
1992 10,000 913 0 10,913 13,454 13,573 10,497
1993 10,000 1,285 0 11,285 15,506 14,846 10,821
1994 10,000 1,624 0 11,624 15,735 16,157 11,093
1995+ 10,000 2,165 0 12,165 18,183 18,980 11,409
</TABLE>
* From October 3, 1990 (commencement of operations).
** From month end closest to Initial Investment Date.
+ Figures are for the fiscal period August 1, 1994 to March 31, 1995.
(Annualized)
Explanatory Notes: With an initial investment of $10,000 made on October 3,
1990, the net amount invested in Class A shares of the fund was $ 10,000
. The cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends for the period covered (that is, their cash
value at the time they were reinvested) amounted to $ 12,165 . If
distributions had not been reinvested, the amount of distributions earned
from Class A shares of the fund over time would have been smaller and the
cash payments (dividends) for the period would have come to $ 1,963 . The
fund did not distribute any capital gains during the period. Tax
consequences of different investments have not been factored into the above
figures.
TAX-EXEMPT
HISTORICAL FUND RESULTS
During the period from July 25, 1985 through March 31, 1995, a hypothetical
investment of $10,000 in Class A of the fund would have grown to $ 15,186
assuming all dividends were reinvested. This was a period of fluctuating
interest rates and the figures below should not be considered
representative of the dividend income or capital gain or loss that could be
realized from an investment in Class A of the fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of
5/31 Initial Reinvested Reinvested Value Living**
$10,000 Dividends Capital Gain
Investment Distributions
1986* $ 10,000 $ 368 $ 0 $ 10,368 $ 12,812 $ 13,855 $ 10,093
1987 10,000 814 0 10,814 16,170 18,170 10,399
1988 10,000 1,323 0 11,323 14,824 16,188 10,807
1989 10,000 1,958 0 11,958 17,514 19,358 11,345
1990 10,000 2,697 0 12,697 20,890 23,729 11,939
1991 10,000 3,411 0 13,411 23,897 26,530 12,523
1992 10,000 3,973 0 13,973 26,540 30,395 12,922
1993 10,000 4,369 0 14,369 30,588 33,245 13,321
1994 10,000 4,718 0 14,718 31,039 36,179 13,655
1995+ 10,000 5,186 0 15,186 35,869 42,502 14,045
</TABLE>
* From July 25, 1985 (commencement of operations)
** From month end closest to Initial Investment Date.
+ Figures are for the fiscal period June 1, 1994 to March 31, 1995.
(Annualized)
Explanatory Notes: With an initial investment of $10,000 made on July 25,
1985, the net amount invested in Class A shares of the fund was
$1 0 ,000. The cost of the initial investment ($10,000) together with
the aggregate cost of reinvested dividends for the period covered (that is,
their cash value at the time they were reinvested) amounted to $15,186. If
distributions had not been reinvested, the amount of distributions earned
from Class A shares of the fund over time would have been smaller
and the cash payments (dividends) for the period would have come to $4,186.
The fund did not distribute any capital gains during the period. Tax
consequences of different investments have not been factored into the above
figures.
PERFORMANCE COMPARISONS. A fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed as
mutual fund rankings prepared by Lipper Analytical Services, Inc. (Lipper),
an independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Lipper generally ranks funds on the basis of
total return, assuming reinvestment of distributions, but does not take
sales charges or redemption fees into consideration, and is prepared
without regard to tax consequences. Lipper may also rank funds based on
yield. In addition to the mutual fund rankings, a fund's performance may be
compared to stock, bond, and money market mutual fund performance indices
prepared by Lipper or other organizations. When comparing these indices, it
is important to remember the risk and return characteristics of each type
of investment. For example, while stock mutual funds may offer higher
potential returns, they also carry the highest degree of share price
volatility. Likewise, money market funds may offer greater stability of
principal, but generally do not offer the higher potential returns
available from stock mutual funds.
From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, the fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. Rankings that
compare the performance of Fidelity funds to one another in appropriate
categories over specific periods of time may also be quoted in advertising.
A fund may be compared in advertising to Certificates of Deposit (CDs) or
other investments issued by banks or other depository institutions. Mutual
funds differ from bank investments in several respects. For example, a fund
may offer greater liquidity or higher potential returns than CDs, a fund
does not guarantee your principal or your return, and fund shares are not
FDIC insured.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. Such
information may include information about current economic, market, and
political conditions; materials that describe general principles of
investing, such as asset allocation, diversification, risk tolerance, and
goal setting; questionnaires designed to help create a personal financial
profile; worksheets used to assess savings needs based on assumed rates of
inflation and hypothetical rates of return; and action plans offering
investment alternatives. Materials may also include discussions of
Fidelity's asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the CPI), and combinations of
various capital markets. The performance of these capital markets is based
on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any
of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the
funds. Ibbotson calculates total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
A fund may compare its performance or the performance of securities in
which it may invest to averages published by IBC USA (Publications), Inc.
of Ashland, Massachusetts. These averages assume reinvestment of
distributions. The IBC/Donoghue's MONEY FUND AVERAGES(trademark), which is
reported in the MONEY FUND REPORT(registered trademark), covers over
695 money market funds and 210 U.S. Government Money Market
Funds .
In advertising materials, Fidelity may reference or discuss its products
and services, which may include the following : other Fidelity funds;
retirement investing; brokerage products and services; model portfolios
or allocations; the effects of periodic investment plans and dollar
cost averaging; saving for college or other goals; charitable giving; and
the Fidelity credit card. In addition, Fidelity may quote or reprint
financial or business publications and periodicals as they relate to
current economic and political conditions, fund management, fund
composition, investment philosophy, investment techniques, the desirability
of owning a particular mutual fund, and Fidelity services and products.
Fidelity may also reprint, and use as advertising and sales literature,
articles from Fidelity Focus, a quarterly magazine provided free of charge
to Fidelity fund shareholders.
A fund may present its fund number, Quotron(trademark) number, and CUSIP
number, and discuss or quote its current fund manager.
As of April 30, 1995, FMR advised over $ 25 billion in tax-free fund
assets, $ 70 billion in money market fund assets, $ 175 billion
in equity fund assets, $ 42 billion in international fund assets, and
$ 21 billion in Spartan fund assets. The funds may reference the
growth and variety of money market mutual funds and the adviser's
innovation and participation in the industry. The equity funds under
management figure represents the largest amount of equity fund assets under
management by a mutual fund investment adviser in the United States, making
FMR America's leading equity (stock) fund manager. FMR, its subsidiaries,
and affiliates maintain a worldwide information and communications network
for the purpose of researching and managing investments abroad.
In addition to performance rankings, each fund may compare its total
expense ratio to the average total expense ratio of similar funds tracked
by Lipper. A fund's total expense ratio is a significant factor in
comparing bond and money market investments because of its effect on yield.
ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing a class's NAV. Shareholders receiving securities or other
property on redemption may realize a gain or loss for tax purposes, and
will incur any costs of sale, as well as the associated inconveniences.
Pursuant to Rule 11a-3 under the 1940 Act, each fund is required to give
shareholders at least 60 days' notice prior to terminating or modifying its
exchange privilege. Under the Rule, the 60-day notification requirement may
be waived if (i) the only effect of a modification would be to reduce or
eliminate an administrative fee, redemption fee, or deferred sales charge
ordinarily payable at the time of an exchange, or (ii) a fund suspends the
redemption of the shares to be exchanged as permitted under the 1940 Act or
the rules and regulations thereunder, or a fund to be acquired suspends the
sale of its shares because it is unable to invest amounts effectively in
accordance with its investment objective and policies.
In the prospectus, each fund has notified shareholders that it reserves the
right at any time, without prior notice, to refuse exchange purchases by
any person or group if, in FMR's judgment, a fund would be unable to invest
effectively in accordance with its investment objective and policies, or
would otherwise potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DIVIDENDS. Because each fund's income is primarily derived from interest,
dividends from the fund generally will not qualify for the
dividends-received deduction available to corporate shareholders.
Short-term capital gains are distributed as dividend income, but do not
qualify for the dividends received deduction. A portion of each fund's
dividends derived from certain U.S. Government obligations may be exempt
from state and local taxation.
To the extent that each fund's income is designated as federally tax-exempt
interest, the daily dividends declared by the fund are also federally
tax-exempt. Short-term capital gains are distributed as dividend income,
but do not qualify for the dividends-received deduction. These gains will
be taxed as ordinary income. Each fund will send each shareholder a
notice in January describing the tax status of dividend and capital gain
distributions (if any) for the prior year.
Shareholders are required to report tax-exempt income on their federal tax
returns. Shareholders who earn other income, such as social security
benefits, may be subject to federal income tax on up to 85% of such
benefits to the extent that their income, including tax-exempt income,
exceeds certain base amounts.
Tax-Exempt purchases municipal obligations based on opinions of bond
counsel regarding the federal income tax status of the obligations. These
opinions generally will be based on covenants by the issuers or other
parties regarding continuing compliance with federal tax requirements.
If , at any time, the covenants are not complied with,
distribution to shareholders of interest on a security could
become federally taxable retroactive to the date a security was
issued. For certain types of structured securities, opinions of counsel
may also be based on the effort of the structure on the federal tax
treatment of the income.
As a result of the Tax Reform Act of 1986, interest on certain "private
activity" securities is subject to the federal alternative minimum tax
(AMT), although the interest continues to be excludable from gross income
for other tax purposes. Interest from private activity securities will be
considered tax-exempt for purposes of the fund's policy on investing so
that at least 80% of its income is free from federal income tax. Interest
from private activity securities is a tax preference item for the purposes
of determining whether a taxpayer is subject to the AMT and the the amount
of AMT to be paid, if any. Private activity securities issued after August
7, 1986 to benefit a private or industrial user or to finance a private
facility are affected by this rule.
A portion of the gain on bonds purchased with market discount after April
30, 1993 and short-term capital gains distributed by the fund are taxable
to shareholders as dividends, not as capital gains. Dividend distributions
resulting from a recharacterization of gain form the sale of bonds
purchased with market discount after April 30, 1993 are not considered
income for the purposes of Tax-Exempt's policy of investing so that
at least 80% of its income is free from federal income tax. The fund may
distribute any net realized short-term capital gains and taxable market
discounts once a year or more often, as necessary, to maintain its net
asset value at $1.00 per share.
Corporate investors should note that a tax preference item for the purposes
of the corporate AMT is 75% of the amount by which adjusted current
earnings (which includes tax-exempt interest) exceeds the alternative
minimum taxable income of the corporation. If a shareholder receives an
exempt-interest dividend and sells shares at a loss after holding them for
a period of six months or less, the loss will be disallowed to the extent
of the amount of the exempt-interest dividend.
CAPITAL GAIN DISTRIBUTIONS. Each fund may distribute any net realized
short-term capital gains once a year or more often as necessary, to
maintain its net asset value at $1.00 per share. Each fund does not
anticipate earning long-term capital gains on securities held by the
fund .
STATE AND LOCAL TAX ISSUES. For mutual funds organized as business trusts,
most state's laws provide for a pass-through of the state and local income
tax exemption afforded to direct owners of U.S. Government securities. Some
states limit this to mutual funds that invest a certain amount in U.S.
Government securities, and some types of securities, such as repurchase
agreements and some agency backed securities, may not qualify for this
benefit. The tax treatment of your dividend distributions from the fund
will be the same as if you directly owned your proportionate share of the
U.S. Government securities in a fund's portfolio. Because the income earned
on most U.S. Government securities in which the fund invests is exempt from
state and local income taxes , the portion of your dividends from a
fund attributable to these securities will also be free from income taxes.
The exemption from state and local income taxation does not preclude states
from assessing other taxes on the ownership of U.S. Government securities.
In a number of states, corporate franchise (income) tax laws do not exempt
interest earned on U.S. Government securities whether such securities are
held directly or through a fund.
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities. Foreign governments may
also impose taxes on other payments or gains with respect to foreign
securities. Because a fund does not currently anticipate that securities
of foreign issuers will constitute more than 50% of its total
assets at the end of the fiscal year shareholders should not expect to
claim a foreign tax credit or deduction on their federal income tax returns
with respect to foreign taxes withheld.
TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a
"regulated investment company" for tax purposes so that it will not be
liable for federal tax on income and capital gains distributed to
shareholders. In order to qualify as a regulated investment company and
avoid being subject to federal income or excise taxes at the fund level,
each fund intends to distribute substantially all of its net investment
income and net realized capital gains within each calendar year as well as
on a fiscal year basis.
FMR may determine some restricted securities and municipal lease
obligations to be illiquid.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting each fund and its shareholders,
and no attempt has been made to discuss individual tax consequences. In
addition to federal income taxes, shareholders may be subject to state and
local taxes on fund distributions, and shares may be subject to state and
local personal property taxes. Investors should consult their tax advisers
to determine whether a fund is suitable to their particular tax situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent company organized
in 1972. Through ownership of voting common stock and the execution of a
shareholders' voting agreement, Edward C. Johnson 3d, Johnson family
members, and various trusts for the benefit of the Johnson family form a
controlling group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by three of its divisions as follows: Fidelity Service Co. (FSC),
which is the transfer and shareholder servicing agent for certain of the
funds advised by FMR; FIIOC, which performs shareholder servicing
functions for institutional customers and funds sold through
intermediaries; and Fidelity Investments Retail Marketing Company, which
provides marketing services to various companies within the Fidelity
organization.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures for
personal investing and restricts certain transactions. For example, all
personal trades in most securities require pre-clearance, and participation
in initial public offerings is prohibited. In addition, restrictions on the
timing of personal investing in relation to trades by Fidelity funds and on
short-term trading have been adopted.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the funds are listed below. Except
as indicated, each individual has held the office shown or other offices in
the same company for the last five years. Trustees and officers elected or
appointed prior to the funds' conversion to a Delaware business trust
served the Massachusetts business trust in identical capacities. All
persons named as Trustees and officers also serve in similar capacities for
other funds advised by FMR. Unless otherwise noted, the business address of
each Trustee and officer is 82 Devonshire Street, Boston, Massachusetts
02109, which is also the address of FMR. Those Trustees who are "interested
persons" (as defined in the 1940 Act ) by virtue of their affiliation
with the funds or FMR are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (64), Trustee and President, is Chairman, Chief
Executive Officer and a Director of FMR Corp.; a Director and Chairman of
the Board and of the Executive Committee of FMR; Chairman and a Director of
FMR Texas Inc., Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD (53), Trustee and Senior Vice President, is President of
FMR; and President and a Director of FMR Texas Inc., Fidelity Management &
Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc.
RALPH F. COX (62), 200 Rivercrest Drive, Fort Worth, TX, Trustee (1991), is
a consultant to Western Mining Corporation (1994). Prior to February 1994,
he was President of Greenhill Petroleum Corporation (petroleum exploration
and production, 1990). Until March 1990, Mr. Cox was President and Chief
Operating Officer of Union Pacific Resources Company (exploration and
production). He is a Director of Sanifill Corporation (non-hazardous waste,
1993) and CH2M Hill Companies (engineering). In addition, he served on the
Board of Directors of the Norton Company (manufacturer of industrial
devices, 1983-1990) and continues to serve on the Board of Directors of the
Texas State Chamber of Commerce, and is a member of advisory boards of
Texas A&M University and the University of Texas at Austin.
PHYLLIS BURKE DAVIS (63), P.O. Box 264, Bridgehampton, NY, Trustee (1992).
Prior to her retirement in September 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, 1990),
and she 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.
RICHARD J. FLYNN (71), 77 Fiske Hill, Sturbridge, MA, Trustee, is a
financial consultant. Prior to September 1986, Mr. Flynn was Vice Chairman
and a Director of the Norton Company (manufacturer of industrial devices).
He is currently a Trustee of College of the Holy Cross and Old Sturbridge
Village, Inc. , and he previously served as a director of Mechanics Bank
(1971-1995).
E. BRADLEY JONES (67), 3881-2 Lander Road, Chagrin Falls, OH, Trustee
(1990). Prior to his retirement in 1984, Mr. Jones was Chairman and Chief
Executive Officer of LTV Steel Company. He is a Director of TRW Inc.
(original equipment and replacement products), Cleveland-Cliffs Inc
(mining), Consolidated Rail Corporation, Birmingham Steel
Corporation, and RPM, Inc. (manufacturer of chemical products,
1990) and he previously served as a director of NACCO Industries, Inc.
(mining and marketing, 1985-1995) and Hyster-Yale Materials Handling, Inc.
(1985-1995). In addition, he serves as a Trustee of First Union Real
Estate Investments, a Trustee and member of the Executive Committee of the
Cleveland Clinic Foundation, a Trustee and member of the Executive
Committee of University School (Cleveland), and a Trustee of Cleveland
Clinic Florida.
DONALD J. KIRK (62), One Harborside, 680 Steamboat Road, Greenwich, CT,
Trustee, is Executive-in-Residence (1995) at 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 Vice Chairman of the Board of Directors of the
National Arts Stabilization Fund, Vice Chairman of the Board of Trustees of
the Greenwich Hospital Association, and as a Member of the Public Oversight
Board of the American Institute of Certified Public Accountants' SEC
Practice Section (1995).
*PETER S. LYNCH (52), Trustee (1990) is Vice Chairman and Director of FMR
(1992). 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). He is a Director of W.R. Grace
& Co. (chemicals) and Morrison Knudsen Corporation (engineering and
construction). In addition, he serves as a Trustee of Boston College,
Massachusetts Eye & Ear Infirmary, Historic Deerfield and Society for the
Preservation of New England Antiquities, and as an Overseer of the Museum
of Fine Arts of Boston (1990).
GERALD C. McDONOUGH (65), 135 Aspenwood Drive, Cleveland, OH, Trustee, is
Chairman of G.M. Management Group (strategic advisory services). Prior to
his retirement in July 1988, he was Chairman and Chief Executive Officer of
Leaseway Transportation Corp. (physical distribution services). Mr.
McDonough is a Director of ACME-Cleveland Corp. (metal working,
telecommunications and electronic products), Brush-Wellman Inc. (metal
refining), York International Corp. (air conditioning and refrigeration),
Commercial Intertech Corp. (water treatment equipment, 1992), and
Associated Estates Realty Corporation (a real estate investment trust,
1993).
EDWARD H. MALONE (70), 5601 Turtle Bay Drive #2104, Naples, FL, Trustee.
Prior to his retirement in 1985, Mr. Malone was Chairman, General Electric
Investment Corporation and a Vice President of General Electric Company. He
is a Director of Allegheny Power Systems, Inc. (electric utility), General
Re Corporation (reinsurance) and Mattel Inc. (toy manufacturer). In
addition, he serves as a Trustee of Corporate Property Investors, the EPS
Foundation at Trinity College, the Naples Philharmonic Center for the Arts,
and Rensselaer Polytechnic Institute, and he is a member of the Advisory
Boards of Butler Capital Corporation Funds and Warburg, Pincus Partnership
Funds.
MARVIN L. MANN (71), 55 Railroad Avenue, Greenwich, CT, Trustee (1993) is
Chairman of the Board, President, and Chief Executive Officer of Lexmark
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 Infomart (marketing services, 1991), a Trammell Crow Co. In
addition, he serves as the Campaign Vice Chairman of the Tri-State United
Way (1993) and is a member of the University of Alabama President's Cabinet
(1990).
THOMAS R. WILLIAMS (66), 21st Floor, 191 Peachtree Street, N.E., Atlanta,
GA, Trustee, is President of The Wales Group, Inc. (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 Director of BellSouth Corporation (telecommunications),
ConAgra, Inc. (agricultural products), Fisher Business Systems, Inc.
(computer software), Georgia Power Company (electric utility), Gerber Alley
& Associates, Inc. (computer software), National Life Insurance Company of
Vermont, American Software, Inc., and AppleSouth, Inc. (restaurants, 1992).
FRED L. HENNING, JR.(55), Vice President (1994), is Vice President of
Fidelity's money market funds and Senior Vice President of FMR Texas Inc.
LELAND BARRON (36), Vice President (1989) is also Vice President of other
funds advised by FMR and an employee of FMR Texas Inc.
BURNELL STEHMAN (63), Vice President (1992), is also Vice President of
other funds advised by FMR and an employee of FMR Texas Inc.
JOHN TODD (46), Vice President (1992), is also Vice President of other
funds advised by FMR and an employee of FMR Texas Inc.
SARAH H. ZENOBLE (46), Vice President (1988), is also Vice President FMR
Texas and of other funds advised by FMR and an employee of FMR.
ARTHUR S. LORING (47), Secretary, is Senior Vice President (1993) and
General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice
President and Clerk of FDC.
STEPHEN P. JONAS (42), Treasurer (1995), is Treasurer and Vice President of
FMR (1993). Mr. Jonas is also Treasurer of FMR Texas Inc. (1994), Fidelity
Management & Research (U.K.) Inc. (1994), and Fidelity Management &
Research (Far East) Inc. (1994). Prior to becoming Treasurer of FMR, Mr.
Jonas was Senior Vice President, Finance - Fidelity Brokerage Services,
Inc. (1991-1992) and Senior Vice President, Strategic Business Systems -
Fidelity Investments Retail Marketing Company (1989-1991).
THOMAS D. MAHER (50), Assistant Vice President (1990), is Assistant Vice
President of Fidelity's money market funds and Vice President and Associate
General Counsel of FMR Texas Inc. (1990). Prior to 1990, Mr. Maher was an
employee of FMR.
MICHAEL D. CONWAY (41), Assistant Treasurer (1995), is Assistant Treasurer
of Fidelity's money market funds and is an employee of FMR (1995). Before
joining FMR, Mr. Conway was an employee of Waddell & Reed Inc. (investment
advisor, 1986-1994), where he served as Assistant Treasurer (1992) and as
Assistant Vice President and Director of Operations of Waddell & Reed Asset
Management Company (1994).
JOHN H. COSTELLO (48), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (49), Assistant Treasurer (1994), is an employee of FMR
(1994). Prior to becoming Assistant Treasurer of the Fidelity funds, Mr.
Rush was Chief Compliance Officer of FMR Corp. (1993-1994); Chief Financial
Officer of Fidelity Brokerage Services, Inc. (1990-1993); and Vice
President, Assistant Controller, and Director of the Accounting Department
- - First Boston Corp. (1986-1990).
The following table sets forth information describing the compensation of
each current Trustee of each fund for his or her services as trustee for
the fiscal year ended March 31, 1995.
COMPENSATION TABLE
Aggregate Compensation
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
J. Gary Ralph F. Phyllis Richard E. Edward C. Donald Peter S. Edward Marvin Gerald C. Thomas
Burkhead Cox Burke J. Flynn Bradley Johnson, J. Kirk Lynch* H. L. Mann McDonough R.
* Davis Jones 3d* Malone Williams
Trea
$ 0 $ 670 $ 641 $ 823 $ 662 $ 0 $ 683 $ 0 $ 691 $ 655 $ 684 $ 676
sury
Trea
0 2,082 1,985 2,568 2,059 0 2,811 0 2,134 2,032 2,112 2,084
sury
II
Gov
0 1,672 1,600 2,059 1,654 0 1,706 0 2,908 1,632 1,708 1,683
ernm
ent+
Dom
0 464 440 575 459 0 468 0 472 452 467 460
estic
Mon
0 2,371 2,246 2,942 2,345 0 2,395 0 2,416 2,312 2,395 2,360
ey
Mar
ket+
Trea
0 555 529 683 548 0 562 0 568 542 563 555
sury
Only
Tax-
0 1,152 1,100 1,417 1,138 0 1,169 0 1,185 1,127 1,169 1,160
Exe
mpt
</TABLE>
* Interested trustees of each fund are compensated by FMR.
+ Estimated.
Pension or Estimated Annual Total
Retirement Benefits Upon Compensation
Benefits Accrued Retirement from from the Fund
as Part of Fund the Fund Complex*
Expenses from the Complex*
Fund Complex*
J. $ 0 $ 0 $ 0
Gary
Burkh
ead**
Ralph 5,200 52,000 125,000
F. Cox
Phylli 5,200 52,000 122,000
s
Burke
Davis
Richar 0 52,000 154,500
d J.
Flynn
E. 5,200 49,400 123,500
Bradle
y
Jones
Edwar 0 0 0
d C.
Johnso
n 3d**
Donal 5,200 52,000 125,000
d J.
Kirk
Peter 0 0 0
S.
Lynch
**
Edwar 5,200 44,200 128,000
d H.
Malon
e
Marvi 5,200 52,000 125,000
n L.
Mann
Gerald 5,200 52,000 125,000
C.
McDo
nough
Thom 5,200 52,000 126,500
as R.
Willia
ms
* Information is as of December 31, 1994 for 206 funds in the
complex.
** Interested trustees of each fund are compensated by FMR.
Under a retirement program adopted in July 1988, the non-interested
Trustees, upon reaching age 72, become eligible to participate in a
retirement program under which they receive payments during their lifetime
from a fund based on their basic trustee fees and length of service. The
obligation of a fund to make such payments are not secured or funded.
Trustees become eligible if, at the time of retirement, they have served on
the Board for at least five years. Currently, Messrs. Ralph S. Saul,
William R. Spaulding, Bertram H. Witham, and David L. Yunich, all former
non-interested Trustees, receive retirement benefits under the program.
As of March 31, 1995, the Trustees and officers of each fund owned, in
the aggregate, 0% of each fund's total outstanding shares.
MANAGEMENT CONTRACTS
Each fund employs FMR to furnish investment advisory and other services.
Under its management contract with each fund, FMR acts as investment
adviser and, subject to the supervision of the Board of Trustees, directs
the investments of each fund in accordance with its investment objective,
policies, and limitations. FMR also provides each fund with all necessary
office facilities and personnel for servicing each fund's investments,
compensates all officers of each fund, all Trustees who are "interested
persons" of the trusts or of FMR, and all personnel of each fund or FMR for
performing services relating to research, statistical and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the Board
of Trustees, provide the management and administrative services necessary
for the operation of each fund. These services include providing facilities
for maintaining each fund's organization; supervising relations with
custodians, transfer and pricing agents, accountants, underwriters, and
other persons dealing with each fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining each
fund's records and the registration of each fund's shares under federal and
state laws; developing management and shareholder services for each fund;
and furnishing reports, evaluations and analyses on a variety of subjects
to the Trustees.
In addition to the management fee payable to FMR and the fees payable to
FIIOC, FSC, and UMB, each fund pays all of its expenses, without
limitation, that are not assumed by those parties. Each fund pays for the
typesetting, printing, and mailing of its proxy materials to shareholders,
legal expenses, and the fees of the custodian, auditor and non-interested
Trustees. Although each fund's current management contract provides that
each fund will pay for typesetting, printing, and mailing prospectuses,
statements of additional information, notices and reports to shareholders,
the Trust, on behalf of each fund has entered into a revised transfer agent
agreement with FIIOC and UMB, as applicable, pursuant to which FIIOC or UMB
bears the costs of providing these services to existing shareholders. Other
expenses paid by each fund include interest, taxes, brokerage commissions,
each fund's proportionate share of insurance premiums and Investment
Company Institute dues, and the costs of registering shares under federal
and state securities laws. Each fund is also liable for such non-recurring
expenses as may arise, including costs of any litigation to which each fund
may be a party, and any obligation it may have to indemnify its officers
and Trustees with respect to litigation.
FMR is each fund's manager pursuant to a management contracts dated May
30, 1993 for the FICP funds; January 29, 1992 for Tax-Exempt; and September
30, 1993 for Treasury Only , which were approved by shareholders on
November 18, 1992, November 13, 1991 and March 24, 1993 ,
respectively.
For the services of FMR under each contract, each fund , except Treasury
Only, pays FMR a monthly management fee at the annual rate of
.20 % of average net assets throughout the month. Treasury Only
pays FMR a monthly management fee of .42% of average net assets. Fees
received by FMR for the last three fiscal years are shown in the table
below.
Fund Fiscal Year Ended Management Fees Paid to FMR
Treasu 1995 $ 2,645,934
ry
1994 3,796,042
1993 5,351,147
Treasu 1995 8,680,344
ry II
1994 9,834,025
1993 14,029,197
Gover 1995 6,680,088
nment
1994 9,660,519
1993 12,610,880
Dome 1995 1,923,368
stic
1994 1,525,574
1993 1,536,740
Mone 1995 10,436,518
y
Marke
t
1994 10,551,990
1993 10,066,276
Treasu 1995 3,283,265
ry
Only
1994 4,716,697
1993 4,892,175
Tax-E 1995 3,789,731
xempt
1994 5,099,831
1993 5,036,875
FMR may, from time to time, voluntarily reimburse all or a portion of each
fund's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to be
repaid for these expense reimbursements in the amount that expenses fall
below the limit prior to the end of the fiscal year. Expense reimbursements
by FMR will increase each fund's total returns and yield and repayment of
the reimbursement by each fund will lower its total returns and yield.
During the fiscal periods reported, FMR voluntarily agreed to reimburse
certain funds to the extent that the fund's aggregate operating expenses
were in excess of an annual rate of its average net assets. The table below
identifies the funds in reimbursement; the level at which reimbursement
began; and the dollar amount reimbursed for each period.
Fund Level at Which Dollar Amount Reimbursed
Reimbursement Began
1995 1994 1993
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Treasu .20 $ 822,285 $ 903,610 $ 1,246,151
ry
Treasu .20 3,539,319 2,956,802 3,246,298
ry II
Gover .20 1,936,406 2,665,587 3,508,338
nment
Dome .20 866,856 638,552 645,507
stic
Mone .18 3,002,430 2,444,993 2,697,402
y
Marke
t
Treasu .20 1,719,806 2,474,345 2,567,107
ry
Only
Tax-E .20 1,429,650 1,643,561 1,591,107
xempt
</TABLE>
To comply with the California Code of Regulations, FMR will reimburse each
fund if and to the extent that fund's aggregate annual operating
expenses exceed specified percentages of its average net assets. The
applicable percentages are 2 1/2% of the first $30 million, 2% of the next
$70 million, and 1 1/2% of average net assets in excess of $100 million.
When calculating each fund's expenses for purposes of this regulation, each
fund may exclude interest, taxes, brokerage commissions, and extraordinary
expenses, as well as a portion of its distribution plan expense s and
custodian fees attributable to investment in foreign securities.
SUB-ADVISER. FMR has entered into a sub-advisory agreement with FMR Texas
pursuant to which FMR Texas has primary responsibility for providing
portfolio investment management services to each fund.
Under each sub-advisory agreement dated May 30, 1993 , January 29,
1992 and September 30, 1973 , respectively, for the
FICP funds , Tax-Exempt and Treasury Only,
respectively , FMR pays FMR Texas fees equal to 50% of the management
fees payable by FMR under its current Management Contract with each
fund . The fees paid to FMR Texas are not reduced by any voluntary or
mandatory expense reimbursements that may be in effect from time to time.
The table below shows fees paid to FMR Texas for the fiscal years ended
March 31, 1995, 1994, and 1993.
1995 1994 1993
Treasu $ 1,322,967 $ 1,898,021 $ 2,675,574
ry
Treasu 4,340,172 4,917,008 7,014,599
ry II
Gover 3,340,044 4,830,260 6,305,440
nment
Dome 961,684 762.787 768,370
stic
Mone 5,218,259 5,275,995 5,033,138
y
Marke
t
Treasu 1,639,715 2,358,349 2,567,107
ry
Only
Tax-E 1,894,866 2,549,916 2,518,438
xempt
CONTRACTS WITH FMR AFFILIATES
FIIOC is transfer, dividend disbursing, and shareholder servicing agent for
Class A shares of Treasury, Treasury II, Government, Domestic, Money
Market and Treasury Only (the Taxable Funds) . UMB is the
transfer agent and shareholder servicing agent for Class A shares of
Tax-Exempt. UMB has entered into a sub-arrangement with FIIOC pursuant to
which FIIOC serves as transfer, dividend disbursing, and shareholder
servicing agent for Class A shares of Tax-Exempt. Class A of each fund pays
FIIOC o r UMB, as applicable, an annual fee and an asset-based fee
based on account size.
For accounts that FIIOC maintains on behalf of UMB, FIIOC receives all such
fees.
FIIOC pays out-of-pocket expenses associated with providing transfer agent
services. In addition, FIIOC bears the expense of typesetting, printing,
and mailing prospectuses, statements of additional information, and all
other reports, notices, and statements to shareholders, with the exception
of proxy statements.
FSC performs the calculations necessary to determine NAV and
dividends for the Class A shares of each Taxable Fund, maintains each
Taxable Fund's accounting records ' and administers each Taxable
Fund's securities lending program. UMB has sub-arrangements with FSC
pursuant to which FSC performs the calculations necessary to determine the
NAV and dividends for Class A shares of Tax-Exempt , and maintains
the accounting records for Tax-Exempt . The fee rates for pricing and
bookkeeping services are based on each fund's average net assets ,
specifically .0175 % for the first $500 million of average net assets
and .0075 % for average net assets in excess of $500 million. The fee
is limited to a minimum of $ 20,000 and a maximum of $750,000 per
year. Pricing and bookkeeping fees, including related out-of-pocket
expenses, paid by the fund s for the past three fiscal years were as
follows:
Pricing and Bookkeeping Fees
1995 1994 1993
Treasu $ 149,193 $ 192,236 $ 251,607
ry
Treasu 375,762 419,147 576,072
ry II
Gover 331,070 412,411 523,696
nment
Dome 122,139 107,464 108,548
stic
Mone 441,370 445,362 429,428
y
Marke
t
Treasu N/A N/A N/A
ry
Only
Tax-E 309,306* 304,324 325,195
xempt
* Annualized
FSC also receives fees for administering the Taxable Funds' securities
lending program. Securities lending fees are based on the number and
duration of individual securities loans. For the past three fiscal
years, the funds incurred no securities lending fees.
Each fund 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 each fund, which are continuously
offered at net asset value. Promotional and administrative expenses in
connection with the offer and sale of shares are paid by FMR.
DISTRIBUTION AND SERVICE PLANS
The Trustees have approved a Distribution and Service Plan on
behalf of Class A of each fund (the Plans) pursuant to Rule
12b-1 under the 1940 Act (the Rule). The Rule provides in
substance that a mutual fund may not engage directly or indirectly in
financing any activity that is primarily intended to result in the sale of
shares of a fund except pursuant to a plan approved on behalf of the fund
under the Rule. The Plans, as approved by the Trustees, allow Class A of
the funds and FMR to incur certain expenses that might be considered to
constitute indirect payment by the funds of distribution expenses.
Under each Plan, if the payment of management fees by the funds to FMR is
deemed to be indirect financing by the funds of the distribution of their
shares, such payment is authorized by the Plans. Each Plan also
specifically recognizes that FMR, either directly or through FDC, may use
its management fee revenue, past profits, or other resources, without
limitation, to pay promotional and administrative expenses in connection
with the offer and sale of shares of the applicable class of each fund. In
addition, each Plan provides that FMR may use its resources, including its
management fee revenues, to make payments to third parties that assist in
selling shares of the applicable class of each fund, or to third parties,
including banks, that render shareholder support services.
The Trustees have not authorized such payments to date.
Prior to approving each Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of each Plan, and have
determined that there is a reasonable likelihood that the Plan will benefit
the applicable class of each fund and its shareholders. In particular, the
Trustees noted that each Plan does not authorize payments by Class A of
each fund other than those made to FMR under its management contract with
the fund. To the extent that each Plan gives FMR and FDC greater
flexibility in connection with the distribution of shares of the applicable
class of each fund, additional sales of fund shares may result.
Furthermore, certain shareholder support services may be provided more
effectively under the Plans by local entities with whom shareholders have
other relationships.
The Plans were approved by shareholders of Class A of FICP on November
18 , 199 2 , Fidelity Institutional Tax-Exempt Cash Portfolios:
Tax-Exempt on November 31 , 199 1 , and Daily Money Fund:
Treasury Only on March 24 , 199 3 . Each Plan was
approved by shareholders, in connection with the corresponding
reorganization transactions which took place on May 30, 1993 for the
FICP funds; January 29, 1992 for Tax-Exempt; and September 29, 1993 for
Treasury Only , pursuant to Agreements and Plans of Conversion.
The Glass-Steagall Act generally prohibits federally and state chartered or
supervised banks from engaging in the business of underwriting, selling, or
distributing securities. Although the scope of this prohibition under the
Glass-Steagall Act has not been clearly defined by the courts or
appropriate regulatory agencies, FDC believes that the Glass-Steagall Act
should not preclude a bank from performing shareholder support services, or
servicing and recordkeeping functions. FDC intends to engage banks only to
perform such functions. However, changes in federal or state statutes and
regulations pertaining to the permissible activities of banks and their
affiliates or subsidiaries, as well as further judicial or administrative
decisions or interpretations, could prevent a bank from continuing to
perform all or a part of the contemplated services. If a bank were
prohibited from so acting, the Trustees would consider what actions, if
any, would be necessary to continue to provide efficient and effective
shareholder services. In such event, changes in the operation of the funds
might occur, including possible termination of any automatic investment or
redemption or other services then provided by the bank. It is not expected
that shareholders would suffer any adverse financial consequences as a
result of any of these occurrences. In addition, state securities laws on
this issue may differ from the interpretations of federal law expressed
herein, and banks and other financial institutions may be required
to register as dealers pursuant to state law.
Each fund may execute portfolio transactions with, and purchase securities
issued by, depository institutions that receive payments under the Plans.
No preference for the instruments of such depository institutions will be
shown in the selection of investments.
DESCRIPTION OF THE TRUSTS
TRUST ORGANIZATION. Treasury, Treasury II, Government, Domestic and Money
Market are funds of Fidelity Institutional Cash Portfolios, an open-end
management investment company organized as a Delaware business Trust on May
30, 1993. The funds acquired all of the assets of the corresponding
funds of Fidelity Institutional Cash Portfolios, a Massachusetts business
trust, respectively, on May 30, 1993 . Currently, there
are five funds of Fidelity Institutional Cash Portfolios: Treasury,
Treasury II, Government, Domestic, and Money Market. The Trust Instrument
permits the Trustees to create additional funds.
Tax-Exempt is a fund of Fidelity Institutional Tax-Exempt Cash Portfolios,
an open-end management investment company organized as a Delaware business
Trust on January 29, 1992. The fund acquired all of the assets of
Fidelity Institutional Tax-Exempt Cash Portfolio the Massachusetts
trust of Fidelity Institutional Tax-Exempt Cash Portfolios on January
29, 1992 . Currently, there is one fund of Fidelity Institutional
Tax-Exempt Cash Portfolio: Tax-Exempt. The Trust Instrument permits the
Trustees to create additional funds.
Treasury Only is a fund of Daily Money Fund, an open-end management
investment company organized as a Delaware business Trust on September 30,
1993. The fund acquired all of the assets of U.S. Treasury Income
Portfolio of the Massachusetts trust of Daily Money Fund on January
29, 1993 . The Trust Instrument permits the Trustees to create
additional funds.
In the event that FMR ceases to be the investment adviser to the funds, the
right of the Trust or fund to use the identifying name "Fidelity" may be
withdrawn. There is a remote possibility that one fund might become liable
for any misstatement in its prospectus or statement of additional
information about another fund.
The assets of the Trust received for the issue or sale of shares of each
fund and all income, earnings, profits, and proceeds thereof, subject only
to the rights of creditors, are especially allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets of
each fund are segregated on the books of account, and are to be charged
with the liabilities with respect to such fund and with a share of the
general expenses of the Trust. Expenses with respect to the Trust are to be
allocated in proportion to the asset value of the respective funds, except
where allocations of direct expense can otherwise be fairly made. The
officers of the Trust, subject to the general supervision of the Board of
Trustees, have the power to determine which expenses are allocable to a
given fund, or which are general or allocable to all of the funds. In the
event of the dissolution or liquidation of the Trust, shareholders of each
fund are entitled to receive as a class the underlying assets of such fund
available for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. Each Trust is a business trust
organized under Delaware law. Delaware law provides that shareholders
shall be entitled to the same limitations of personal liability extended to
stockholders of private corporations for profit. The courts of some states,
however, may decline to apply Delaware law on this point. The Trust
Instruments contains an express disclaimer of shareholder liability for the
debts, liabilities, obligations, and expenses of the Trusts and requires
that a disclaimer be given in each contract entered into or executed by the
fund or the Trustees. The Trust Instruments provide for indemnification out
of each fund's property of any shareholder or former shareholder held
personally liable for the obligations of the fund. The Trust
Instrument s also provide that each fund shall, upon request, assume
the defense of any claim made against any shareholder for any act or
obligation of the fund and satisfy any judgment thereon. Thus, the risk of
a shareholder incurring financial loss on account of shareholder liability
is limited to circumstances in which Delaware law does not apply, no
contractual limitation of liability was in effect, and the funds are unable
to meet their obligations. FMR believes that, in view of the above, the
risk of personal liability to shareholders is extremely remote.
The Trust Instruments further provide that the Trustees, if they have
exercised reasonable care, shall not be personally liable to any person
other than the fund or its shareholders; moreover, the Trustees shall not
be liable for any conduct whatsoever, provided that Trustees are not
protected against any liability to which they would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of their office.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. The shares have no preemptive or conversion rights; the voting
and dividend rights, the right of redemption, and the privilege of exchange
are described in the Prospectus. Shares are fully paid and non-assessable,
except as set forth under the heading "Shareholder and Trustee Liability"
above. Shareholders representing 10% or more of a trust , fund or
class may, as set forth in each of the Trust Instruments, call meetings
of the Trust, fund , or class, for any purpose related to the
Trust, fund, or class, as the case may be, including, in the case of
a meeting of the entire Trust, the purpose of voting on removal of one or
more Trustees.
Any trust or fund may be terminated upon the sale of its assets to, or
merger with, another open-end management investment company or series
thereof, or upon liquidation and distribution of its assets. Generally such
terminations must be approved by vote of the holders of a majority of the
outstanding shares of the Trust or fund; however, the Trustees may, without
prior shareholder approval, change the form or organization of the trust or
fund by merger, consolidation, or incorporation. If not so terminated, the
fund and the funds will continue indefinitely. Under the Trust Instruments,
the Trustees may, without shareholder vote, cause a trust to merge or
consolidate into one or more trusts, partnerships, or corporations, or
cause the trust to be incorporated under Delaware law, so long as the
surviving entity is an open-end management investment company that will
succeed to or assume the trust's registration statement.
As of March 31, 1995 the following owned of record or beneficially more
than 5% of the outstanding shares of each fund:
Treasury: Michigan Public funds Investment Trust, Farmington Hills, MI
(24.6%); FBS Investment Services, Inc., Minneapolis, MN (11.00%); Wachovia
Bank & Trust Company, Winston-Salem, NC (6.89%).
Treasury II: Bank of America, San Francisco, CA (18.1%); First Union
National Bank, Charlotte, NC (13.71%); Bank of New York, New York, (8.86%)
Texas Commence Bank, N.A., Houston, TX (7.86%); First Interstate Bank of
Oregon, Portland, OR (7.15%).
Government: First Tennessee Bank, Memphis, TN (12.8%); Hillsborough County,
Tampa, FL (6.58%); Texas Commerce Bank, N.A., Houston, TX (5.81%);
Pennsylvania Housing Finance Agency, Harrisburg, PA (5.1%).
Domestic: First Union National Bank, Charlotte, NC (25.34%); Texas Commerce
Bank, N.A., Houston, TX (7.94%).
Money Market: FMR Corp., Boston, MA (24.71%); Shawmut Bank of Boston, N.A.,
Boston, MA (5.47%); First Union National Bank, Charlotte, NC (5.39%).
Treasury Only: First Union National Bank, Charlotte, NC (37.85%); Shawmut
Bank of Boston, N.A., Boston, MA (10.46%); Ropes & Gray, Boston, MA
(7.17%); Allen & Company, Inc., New York, NY (5.9%).
Tax-Exempt: Shawmut Bank of Boston, N.A., Boston, MA (9.18%); Wachovia Bank
& Trust Company, Winston-Salem, NC (8.98%)
A shareholder owning of record or beneficially more than 25% of a fund's
shares outstanding shares may be considered a controlling person. Their
votes could have a more significant effect on matters presented at a
shareholders' meeting than votes of other shareholders.
CUSTODIAN. Morgan Guaranty Trust Company of New York, 60 Wall Street, New
York, NY 10260 is custodian of the assets of all funds, except Treasury II
and Tax-Exempt. Bank of New York, 48 Wall Street, New York, New
York is custodian of the assets of Treasury II . The custodian for
Tax-Exempt is UMB, 1010 Grand Avenue, Kansas City Missouri. The
custodian is responsible for the safekeeping of a fund ' s
assets and the appointment of subcustodian banks and clearing agencies. The
custodian takes no part in determining the investment policies of a
fund or in deciding which securities are purchased or sold by a
fund. H owever, a fund may invest in obligations of the
custodian and may purchase securities from or sell securities to the
custodian. Chemical Bank, headquartered in New York, may also serve as a
special purpose custodian of certain assets in connection with pooled
repurchase agreement transactions.
FMR, its officers and directors and its affiliated companies and the funds'
Trustees may, from time to time, have transactions with various banks,
including banks serving as custodians for certain other funds advised by
FMR. Transactions that have occurred to date include 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.
AUDITOR. Coopers and Lybrand L.L.P. , 1999 Bryan St. Suite 3000,
Dallas, TX 75201 serves as the independent accountant for
Tax-Exempt and Treasury Only . Price Waterhouse, LLP ,
2001 Ross Avenue, Suite 1800, Dallas, TX 75201 serves as the
independent accountant for the FICP funds . The auditor s
examines financial statements for the fund s and provides other
audit, tax, and related services.
FINANCIAL STATEMENTS
Each fund's financial statements and financial highlights for the fiscal
year ended March 31, 1995 are included in each fund's Annual Report, which
is a separate report attached to this SAI. Each fund's financial statements
and financial highlights are incorporated herein by reference.
APPENDIX
The descriptions that follow are examples of eligible ratings for the
funds. The funds may, however, consider the ratings for other types of
investments and the ratings assigned by other rating organizations when
determining the eligibility of a particular investment.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S COMMERCIAL PAPER RATINGS:
PRIME-1 - issuers (or related institutions) have a superior capacity for
repayment of short-term promissory obligations. Prime-1 repayment capacity
will normally be evidenced by the following characteristics:
(medium solid bullet) Leading market positions in well established
industries.
(medium solid bullet) High rates of return on funds employed.
(medium solid bullet) Conservative capitalization structures with moderate
reliance on debt and ample asset protection.
(medium solid bullet) Broad margins in earnings coverage of fixed financial
charges and with high internal cash generation.
(medium solid bullet) Well-established access to a range of financial
markets and assured sources of alternate liquidity.
PRIME-2 - issuers (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be
more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternative
liquidity is maintained.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S CORPORATE BOND RATINGS:
AAA - Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issuers.
AA - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long term risks appear somewhat
larger than in Aaa securities.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S COMMERCIAL PAPER RATINGS:
A-1 - This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics will be denoted with a plus (+)
sign designation.
A-2 - Capacity for timely payment on issues with this designation is
strong. However, the relative degree of safety is not as high as for issues
designated A-1.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S CORPORATE BOND RATINGS:
AAA - Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated debt issues only in small
degree.
<PAGE>
U.S. GOVERNMENT PORTFOLIO
(a series of Fidelity Money Market Trust)
82 Devonshire Street, Boston, Massachusetts 02109
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
to be held September 13, 1995
To The Shareholders:
A Special Meeting of Shareholders (the Meeting) of U.S.
Government Portfolio (FMMT Government), a series of Fidelity Money Market
Trust (Trust), will be held at the principal executive office of the Trust
at 82 Devonshire Street, Boston, Massachusetts, 02109 on September 13,
1995, at 11:15 a.m. Eastern time. The purpose of the Meeting is as
follows:
1. To approve an Agreement and Plan of Reorganization and
Liquidation between FMMT Government and Fidelity Institutional Cash
Portfolios: Government (FICP Government), providing for the transfer of
substantially all of the assets of FMMT Government to FICP Government in
exchange solely for Class A Shares of beneficial interest of FICP
Government and the assumption by FICP Government of FMMT Government's
liabilities followed by the distribution of Class A Shares of FICP
Government to shareholders of FMMT Government in liquidation of FMMT
Government.
2. To transact such other business as may properly come
before the Meeting or any adjournment thereof.
The Board of Trustees has fixed the close of business on July 17,
1995 as the record date for determination of shareholders entitled to
notice of and to vote at the Meeting and any adjournments thereof.
By order of the Board of Trustees,
ARTHUR S. LORING, Secretary
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.
<PAGE>
U.S. GOVERNMENT PORTFOLIO
(a series of Fidelity Money Market Trust)
82 Devonshire Street, Boston, Massachusetts, 02109
(Toll Free) 1-800-843-3001
PROXY STATEMENT
July 26, 1995
This Proxy Statement is being furnished to shareholders of U.S.
Government Portfolio (FMMT Government), a series of Fidelity Money Market
Trust (FMMT or a Trust), in connection with the solicitation of proxies by
the Trust's Board of Trustees for use at a Special Meeting of Shareholders
of FMMT Government and at any adjournment thereof (the Meeting). The
Meeting will be held on Wednesday, September 13, 1995 at 11:15 a.m.
Eastern time at 82 Devonshire Street, Boston, Massachusetts, 02109, the
principal executive office of the Trust.
As more fully described in the Proxy Statement, the purpose of
the Meeting is to vote on a proposed reorganization (Reorganization).
Pursuant to an Agreement and Plan of Reorganization and Liquidation (the
Agreement), FMMT Government would transfer substantially all of its assets
to Fidelity Institutional Cash Portfolios: Government (FICP Government) in
exchange solely for Class A Shares of beneficial interest of FICP
Government and the assumption by FICP Government of FMMT Government's
liabilities. FICP Government Class A Shares then would be distributed to
FMMT Government shareholders, so that each such shareholder would receive
a number of full and fractional shares of FICP Government equal to the
number of shares of FMMT Government held by such shareholder. Following
the distribution, FMMT Government will have neither assets, liabilities,
nor shareholders, and it is expected that the Trust's Board of Trustees
will liquidate FMMT Government as soon as practical.
FICP Government, a money market fund, is a diversified portfolio
of the Fidelity Institutional Cash Portfolios (FICP or a Trust), an open-
end management investment company. FICP Government's investment objective
is to obtain as high a level of current income as is consistent with the
preservation of principal and liquidity. FICP Government seeks to achieve
its investment objective by investing in U.S. government obligations
issued or guaranteed as to principal and interest by the U.S. government,
including bills, notes, bonds, and other U.S. Treasury debt securities;
and instruments issued by U.S. government instrumentalities or agencies
(agency obligations).
This Proxy Statement, which should be retained for future
reference, sets forth concisely the information about the Reorganization
and FICP Government that a shareholder should know before voting on the
Reorganization. This Proxy Statement is accompanied by the Prospectus
dated July 1, 1995, which offers shares of FICP Government. The Statement
of Additional Information dated July 26, 1995 is incorporated herein by
reference. The Statement of Additional Information for FICP Government,
dated July 1, 1995, and a Prospectus and a Statement of Additional
Information for FMMT Government, both dated December 24, 1994, have been
filed with the Securities and Exchange Commission (SEC) and are
<PAGE>
incorporated herein by this reference. Copies of these documents may be
obtained without charge and further inquiries may be made by contacting
Fidelity Distributors Corporation, 82 Devonshire Street, Boston,
Massachusetts, 02109 or by calling 1-800-843-3001.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
Voting Information 1
Synopsis 4
Comparison of Principal Risk Factors 9
The Proposal 9
Additional Information About FICP Government 14
Miscellaneous 15
Exhibit 1 - Form of Agreement and Plan of 16
Reorganization and Liquidation
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U.S. GOVERNMENT PORTFOLIO
(a series of Fidelity Money Market Trust)
82 Devonshire Street, Boston, Massachusetts 02109
PROXY STATEMENT
Special Meeting of Shareholders of
Fidelity Money Market Trust: U.S.
Government Portfolio
to be held on
September 13, 1995
VOTING INFORMATION
This Proxy Statement is being furnished to shareholders of U.S.
Government Portfolio (FMMT Government or the Acquired Fund), a series of
Fidelity Money Market Trust, (FMMT or a Trust), in connection with the
solicitation of proxies by the Board of Trustees of the Trust (the Board),
for use at a Special Meeting of Shareholders (the Meeting) of FMMT
Government to be held on September 13, 1995, or at any adjournment
thereof. This Proxy Statement will first be mailed to shareholders on or
about August 2, 1995.
If a quorum is not present at the Meeting or a quorum is present
but sufficient votes to approve the proposal are not received, the persons
named as proxies may propose one or more adjournments of the Meeting to
permit further solicitation of proxies. Any such adjournment will require
the affirmative vote of a majority of those shares of FMMT Government
present at the Meeting or represented by proxy. When voting on a proposed
adjournment, the persons named as proxies will vote FOR the proposed
adjournment all shares that they are entitled to vote, unless directed to
vote AGAINST an item, in which case such shares will be voted against such
adjournment with respect to that item. A shareholder vote may be taken on
the proposal in this Proxy Statement or on any other business properly
presented at the Meeting prior to any such adjournment if sufficient votes
have been received and it is otherwise appropriate.
Broker non-votes are shares held in a street name for which the
broker indicates that instructions have not been received from the
beneficial owners or other persons entitled to vote and the broker does
not have discretionary voting authority. Abstentions and broker non-votes
will be counted as shares present for purposes of determining whether a
quorum is present but will not be voted for or against any adjournment or
proposal. Accordingly, abstentions and broker non-votes effectively will
be a vote against adjournment or against any proposal where the required
vote is a percentage of the shares present. Abstentions and broker non-
votes will not be counted, however, as votes cast for purposes of
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determining whether sufficient votes have been received to approve a
proposal.
The individuals named as proxies on the enclosed proxy card will
vote in accordance with your direction as indicated thereon if your proxy
card is received properly executed by you or by your duly appointed agent
or attorney-in-fact. If you sign, date and return the proxy card, but give
no voting instructions, your shares will be voted in favor of approval of
the Agreement and Plan of Reorganization and Liquidation (Reorganization
Plan) attached to this Proxy Statement as Exhibit 1. Under the
Reorganization Plan, Fidelity Institutional Cash Portfolios: Government
(FICP Government or the Acquiring Fund) would acquire substantially all of
the assets of FMMT Government in exchange solely for Class A Shares of
beneficial interest in FICP Government and the assumption by FICP
Government of FMMT Government's liabilities; those FICP Government Class A
Shares then would be distributed to the FMMT Government's shareholders.
(This transaction is referred to herein as a Reorganization.) The duly
appointed proxies may, in their discretion, vote upon such other matters
as may come before the Meeting or any adjournments thereof. The proxy card
may be revoked by giving another proxy or by letter or telegram revoking
such proxy. To be effective, such revocation must be received by FMMT
prior to the Meeting and must indicate your name and account number. In
addition, if you attend the Meeting in person you may, if you wish, vote
by ballot at the Meeting thereby canceling any proxy previously given.
As of June 30, 1995, FMMT Government had 230,150,076 shares of
beneficial interest outstanding and FICP Government had 3,526,935,004
shares of beneficial interest outstanding. The solicitation of proxies,
the cost of which will be borne by Fidelity Management & Research Company
(FMR), the investment adviser of FMMT Government, will be made primarily
by mail but also may include telephone or oral communications by regular
employees of FMR who will not receive any compensation therefor from FMMT
Government.
As of June 30, 1995, the following shareholders were known by
FMMT or by Fidelity Institutional Cash Portfolios (FICP) to own of record
or beneficially the percentage of each Fund's outstanding shares shown in
the tables below.
Percent of
Outstanding
Shareholder Address Fund Shares
FMMT Government
The Bank of California, 400 California Street 12.91%
N.A. San Francisco, CA 94115
Fred Alger Management, 75 Maiden Lane 11.06%
Inc. New York, NY 10038
Student Loan Marketing 1050 Thomas Jefferson 8.30%
Association St.
Washington, DC 20057
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National Presto 3925 North Hastings Way 6.47%
Industries, Inc. Eau Claire, WI 54703
FICP Government - Class A Shares
First Tennessee Bank, 165 Madison Avenue 13.94%
Memphis Memphis, TN 38101
Texas Commerce Bank, N.A. 712 Travis Street 8.11%
Houston, TX 77002
Bank of America 555 California Street 5.46%
San Francisco, CA 94104
Shawmut Bank of Boston, One Federal Street 5.45%
N.A. Boston, MA 02111
FICP Government - Class B Shares
Nationsbank One Nationsbank Plaza 25.70%
Charlotte, NC 28288
Liberty Bank & Trust of 15 E. 5th Street 17.98%
Tulsa Tulsa, OK 74103
Whitney National Bank 228 St. Charles 17.56%
New Orleans, LA 70130
Boatmen's Trust Co. of St One Boatmen's Plaza 16.13%
Louis 800 Market
St. Louis, MO 63101
First Union National Bank 301 S. College St. 12.56%
Charlotte, NC 28288
First Interstate Bank of 707 Wilshire Blvd. 9.66%
California Los Angeles, CA
To the knowledge of FMMT or FICP, no other shareholder owned of
record or beneficially more than 5% of the outstanding shares of FMMT
Government or FICP Government on that date.
Trustees and officers of FMMT Government and FICP Government own
in the aggregate less than 1% of the shares of their respective Fund.
Shareholders of FMMT Government are entitled to one vote for each dollar
of net asset value of the Fund they own. Shareholders of FICP Government
are entitled to one vote for each full share they own and a proportionate
share of one vote for each fractional share they own.
Summarized below is the proposal FMMT Government shareholders are
being asked to consider:
To approve an Agreement and Plan of Reorganization and
Liquidation under which FICP Government would acquire substantially all of
the assets of FMMT Government in exchange solely for Class A Shares of
beneficial interest in FICP Government and the assumption by FICP
Government of FMMT Government's liabilities, followed by the distribution
of FICP Government Class A Shares to the shareholders of FMMT Government.
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Approval of the Reorganization Plan requires the affirmative vote
of a majority of the outstanding voting securities of FMMT Government.
Under the Investment Company Act of 1940 (1940 Act) a "majority of the
outstanding voting securities" means the lesser of (1) 67% or more of a
fund's shares present at a meeting of shareholders if the owners of more
than 50% of the fund's shares then outstanding are present in person or by
proxy, or (2) more than 50% of a fund's outstanding shares.
SYNOPSIS
The following is a summary of certain information contained
elsewhere in this Proxy Statement, in the Reorganization Plan, in the
prospectus of FMMT Government, which is incorporated herein by this
reference, and in the Prospectus of FICP Government. Shareholders should
read the entire Proxy Statement and the prospectus of FICP Government
carefully. As discussed more fully below, the Board believes that the
proposed Reorganization will benefit FMMT Government's shareholders. FICP
Government has an investment objective identical to that of FMMT
Government. As shareholders of FICP Government, it is anticipated that the
former shareholders of FMMT Government will be subject to lower operating
expenses measured as a percentage of net assets.
The Proposed Reorganization
FICP Government currently offers two classes of shares (each, a
Class and collectively, Classes), designated as Class A and Class B. FMMT
Government currently offers one class of shares.
The Reorganization Plan provides for the acquisition by FICP
Government of substantially all of the assets of FMMT Government in
exchange solely for Class A Shares of FICP Government and the assumption
by FICP Government of the liabilities of FMMT Government. (FMMT Government
and FICP Government are referred to herein collectively as Funds and
individually as a Fund.) FMMT Government will then distribute the FICP
Government Class A Shares to its shareholders so that each such
shareholder will receive the number of full and fractional Class A Shares
of FICP Government that corresponds to the number of Acquired Fund shares
held by such shareholder as of the Closing Date (defined below). The
exchange of FMMT Government's assets for FICP Government Class A Shares
will occur at or as of 5:00 p.m., Eastern time, on October 31, 1995 (the
Closing Date), or such other date as the parties may agree. FMMT
Government then will be liquidated as soon as practicable thereafter.
The rights and privileges of the former shareholders of FMMT
Government will be effectively unchanged by the Reorganization, other than
as described under "Minimum Initial Investment and Account Balance,"
"Shareholder Services," "Purchases and Redemptions" and "Exchanges".
For the reasons set forth under The Proposal - Reasons for the
Reorganization," the Board, including the trustees who are not interested
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persons" of FMMT as that term is defined in the 1940 Act (Independent
Trustees), has concluded that the Reorganization is in the best interests
of FMMT Government, that the terms of the Reorganization are fair and
reasonable, and that the interests of FMMT Government's shareholders will
not be diluted as a result of the proposed transaction. Accordingly, the
Board recommends approval of the transaction. In addition, the Board of
Trustees of FICP, including the Independent Trustees, has concluded that
the Reorganization is in the best interests of FICP Government, the terms
of the Reorganization are fair and reasonable, and that the interests of
FICP Government's shareholders will not be diluted as a result of the
proposed transaction.
Expenses
If FMMT Government shareholders approve the Reorganization Plan,
the total operating expenses they would bear as shareholders of FICP
Government Class A Shares are currently limited to .20% of average net
assets because of a voluntary expense limitation currently in effect for
Class A Shares of FICP Government. Voluntary expense limitations exclude
interest, taxes, brokerage commissions, extraordinary expenses, and 12b-1
fees paid by Class B Shares and may be terminated at any time.
Effective July 1, 1995, FMR voluntarily limited the total
operating expenses of FICP Government's Class A Shares to .20% of its
average net assets. Prior to that date, total operating expenses for FICP
Government's Class A Shares were voluntarily limited to .18% of its
average net assets. If these limitations were not in effect, FICP
Government's management fee and total operating expenses for the fiscal
year ended March 31, 1995, would have been .20% and .24%, respectively.
Total operating expenses include, but are not limited to, the management
fee; fees paid to other FMR affiliates for transfer agency and pricing and
bookkeeping services; and fees paid to unaffiliated parties that provide
the Fund with services. Although FICP Government, unlike FMMT Government,
pays for each of these services separately (i.e., its management fee is
not all-inclusive) total operating expenses are currently limited to .20%
of its average net assets. (See Comparative Fee Tables" below for more
information.)
FMMT Government pays FMR a management fee at the annual rate of
.42% of its average net assets. Because the fee is all-inclusive it
represents FMMT Government's total operating expenses. The Fund normally
does not incur other expenses. FMR not only provides the Fund with
investment advisory and research services, but also pays all of the Fund's
other expenses, with certain limited exceptions.
Comparative Fee Tables
Reorganization of FMMT Government into FICP Government
The following table shows the current fees and expenses incurred
by shares of FMMT Government and by Class A Shares of FICP Government for
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the year ended March 31, 1995 adjusted to reflect the current .20%
voluntary expense limitation in effect for Class A Shares of FICP
Government, and pro forma fees for FICP Government's Class A Shares
including the effect of the Reorganization.
Annual Fund Operating Expenses
(as a percentage of average net assets)
FMMT FICP Pro Forma Fees
Government Government Class Combined Fund
A Shares
Management .42% .16% .16%
Fees
O t h e r .00% .04% .04%
Expenses
Total Fund .42% .20%* .20%*
Operating
Expenses
* Net of reimbursement
Example of Effect of Fund Expenses
The following illustrates the expenses on a $1,000 investment
under the existing and estimated fees and the expenses stated above,
assuming a 5% annual return.
One Three Five Ten
Year Years Years Years
---- ----- ----- -----
FMMT Government $4 $13 $24 $53
FICP Government Class A $2 $6 $11 $26
Shares
Combined Fund $2 $6 $11 $26
This Example assumes that all dividends and other distributions
are reinvested and that the percentage amounts listed under Annual Fund
Operating Expenses remain the same in the years shown. The above tables
and the assumption in the Example of a 5% annual return are required by
regulations of the SEC; the assumed 5% annual return is not a prediction
of, and does not represent, the projected or actual performance of any
Fund.
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The Example should not be considered a representation of past or
future expenses, and a Fund's actual expenses may be more or less than
those shown. The actual expenses attributable to each Fund will depend
upon, among other things, its level of average net assets. In addition,
the actual expenses of FICP Government and the Combined Fund will also
depend on the extent to which a fund incurs variable expenses, such as
transfer agency costs and the terms of any reimbursement arrangements with
FMR. FMR currently limits the total operating expenses of FICP
Government's Class A Shares to .20% of its average net assets. Prior to
July 1, 1995, FMR limited these expenses to .18% of the average net assets
of FICP Government's Class A Shares.
Forms of Organization
Fidelity Institutional Cash Portfolios (FICP) is organized as a
Delaware business trust. FICP Government, a series of FICP, commenced
operations on July 25, 1985. FMMT is also organized as a Delaware business
trust. FMMT Government, a series of FMMT, commenced operations on May 1,
1979. FMMT Government offers one class of shares. FICP Government
currently offers two classes of shares: Class A and Class B. Each Trust is
authorized to issue an unlimited number of each class of shares. Because
FICP Government and FMMT Government are each series of a Delaware business
trust, organized under substantially similar trust instruments, the rights
of the security holders of FMMT Government under state law and the
governing documents are expected to remain unchanged after the
Reorganization.
Investment Objectives and Policies
The investment objective and policies of each Fund are set forth
below. There can be no assurance that any Fund will achieve its investment
objective.
The investment objective of FMMT Government and of FICP
Government is to obtain as high a level of current income as is consistent
with the preservation of principal and liquidity within the limitations
prescribed for each Fund. Although each Fund seeks to maintain a stable
$1.00 share price, there can be no assurance that it will be able to do
so. An investment in a Fund is neither insured nor guaranteed by the U.S.
government.
FMMT Government and FICP Government each invests in instruments
which are issued or guaranteed as to principal and interest by the U.S.
government and in instruments issued by U.S. government agencies or
instrumentalities (agency obligations). Government securities purchased by
the Funds include instruments issued or guaranteed by the Export-Import
Bank of the United States, the General Services Administration, the
Government National Mortgage Association, the Small Business
Administration and the Washington Metropolitan Area Transit Authority.
Agency obligations that the Funds may purchase include obligations of the
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Federal Home Loan Banks, Federal Farm Credit Banks, and Federal National
Mortgage Association, which are backed only by the right of the issuer to
borrow from the U.S. Treasury under certain circumstances or are backed by
the credit of the issuer. Agency obligations are not deemed direct
obligations of the United States and involve more risk than direct
obligations of the U.S. government or U.S. Treasury.
Other Policies of the Funds. Each Fund may invest up to 10% of
its net assets in illiquid securities and may engage in repurchase
agreements and reverse repurchase agreements.
Operations of FICP Government Following the Reorganization
Because FMMT Government and FICP Government have the same
investment objective, investment policies and level of risk, FICP
Government's objective, policies, and risk level would not change as a
result of the proposed Reorganization. In addition, FMR currently does not
anticipate significant changes to the Fund's management or to agents that
provide the Fund with services.
Minimum Initial Investment and Account Balance
FICP Government requires a minimum initial investment of $1
million and a minimum account balance of $1 million. FMMT Government's
minimum initial investment and minimum account balance are each $100,000.
If the proposed Reorganization Plan is approved, former FMMT Government
shareholders would be subject to FICP Government's $1 million minimum.
Nevertheless, FICP Government intends to waive these requirements for FMMT
Government accounts that, as of the Closing Date, have balances of less
than $1 million.
Shareholder Services
Unlike FICP Government, FMMT Government offers its shareholders
subaccounting services, such as recordkeeping. If FMMT Government
shareholders approve the Fund's Reorganization Plan, these services would
continue to be available only to those accounts that currently use them;
they would not be offered to existing accounts which currently do not use
them or to new accounts. FMMT Government offers certain other services
that FICP Government does not, such as a broad exchange policy (see
Purchases and Redemptions" and Exchanges" below for more information).
Thus, these services would no longer be available to former FMMT
Government shareholders after the Reorganization.
Purchases and Redemptions
Shares of FMMT Government are normally priced at 3:00 p.m. and at
4:00 p.m. Eastern time each day the Fund is open for business. Class A
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Shares of FICP Government are normally priced at 3:00 p.m. Eastern time
each day the Fund is open for business.
Shares of FMMT Government and Class A Shares of FICP Government
purchased at the 3:00 p.m. price will begin to earn income dividends that
day. FMMT Government shares purchased at the 4:00 p.m. price will begin to
earn income dividends on the following business day.
Shares of each Fund may be redeemed on any business day at their
net asset value, normally expected to be $1.00 per share. Each Fund's
shareholders may redeem shares by telephone. If telephone instructions are
received between 8:30 a.m. and 3:00 p.m. Eastern time for redemptions from
FMMT Government or from FICP Government, redemption proceeds will be wired
that day to the shareholder's bank account of record and the shares will
not receive that day's dividend. Shares of FMMT Government redeemed at the
4:00 p.m. price will receive that day's dividend and redemption proceeds
will be wired on the following business day.
If FMMT Government shareholders approve the Reorganization Plan,
shares of FMMT Government will continue to be available for purchase,
including purchases through the reinvestment of dividends, by existing
shareholders through the Closing Date. FMMT Government was closed to new
accounts on July 18, 1995. If the Meeting is adjourned and the
Reorganization is approved on a later date, shares will no longer be
available for purchase or exchange on the business day following the date
on which the Reorganization is approved. Redemptions of FMMT Government's
shares and exchanges of such shares for shares of any other Fidelity fund
may be effected through the Closing Date (see Exchanges" below).
Exchanges
If shareholders of FMMT Government approve the Reorganization
Plan, former FMMT Government shareholders would be subject to the exchange
privilege currently offered by FICP Government. Specifically, Class A
shareholders of FICP Government may exchange their shares only for Class A
Shares of other FICP Portfolios, Class A Shares of Fidelity Institutional
Tax-Exempt Cash Portfolios: Tax-Exempt and for Class A Shares of Daily
Money Fund: Treasury Only. Currently, shares of FMMT Government may be
exchanged for shares of any other Fidelity fund registered in a
shareholder's state. FICP Government shareholders may redeem their FICP
Government shares and subsequently purchase shares of other Fidelity
funds.
Dividends and Other Distributions
Each Fund ordinarily declares dividends from its net investment
income daily and pays such dividends monthly. Each Fund also distributes
annually and on a fiscal-year basis substantially all of its net
investment income. On or before the Closing Date, FMMT Government will
declare as a dividend substantially all of its taxable income and net
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realized capital gain, if any, in order to maintain its tax status as a
regulated investment company.
Federal Income Tax Consequences of the Reorganizations
Each Trust has received an opinion of its counsel, Kirkpatrick &
Lockhart LLP, to the effect that the Reorganization will be tax-free.
Please see the section entitled Federal Income Tax Considerations" for
more information.
COMPARISON OF PRINCIPAL RISK FACTORS
Because FMMT Government and FICP Government are money market
funds, each must comply with federal regulatory requirements applicable to
all money market funds concerning the quality and maturity of their
investments. Federal regulations limit money market fund investments to
high-quality securities (those securities rated by at least two nationally
recognized rating services in one of the two highest categories for short-
term securities or by one rating service, if only one has rated the
security, or unrated securities deemed by FMR to be of equivalent
quality). The maturity (calculated according to applicable regulations) of
money market investments cannot exceed 397 days and a money market fund's
dollar-weighted average maturity cannot exceed 90 days. These
requirements, coupled with each Fund's emphasis on high-quality U.S.
government securities, mean that the Funds have substantially the same
investment policies and levels of risk.
Although the Funds seek to maintain stable $1.00 share prices,
the Funds' investment income is based on the income earned on the
securities they hold, less expenses incurred. Thus, the Funds' investment
income may be expected to fluctuate in response to changes in such
expenses or income.
THE PROPOSAL
TO APPROVE AN AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION BETWEEN
FMMT GOVERNMENT AND FICP GOVERNMENT
Reorganization Plan
The terms and conditions under which the proposed transaction may
be consummated are set forth in the Reorganization Plan. Significant
provisions of the Plan are summarized below; however, this summary is
qualified in its entirety by reference to the Plan, a copy of which is
attached as Exhibit 1 to this Proxy Statement.
The Plan contemplates (a) FICP Government acquiring on the
Closing Date substantially all of the assets of FMMT Government in
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exchange solely for Class A Shares of FICP Government and the assumption
by FICP Government of FMMT Government's liabilities; and (b) distribution
of the Class A Shares of FICP Government to the shareholders of FMMT
Government as provided in the Reorganization Plan.
The assets of FMMT Government to be acquired by FICP Government,
include substantially all cash, cash equivalents, securities, receivables
(including interest or dividends receivable), claims, choses in action,
and other property owned by FMMT Government, and any deferred or prepaid
expenses shown as an asset on the books of FMMT Government on the Closing
Date. FICP Government will assume from FMMT Government all debts,
liabilities, obligations, and duties of FMMT Government of whatever kind
or nature; provided however, that FMMT Government will use its best
efforts, to the extent practicable, to discharge all of its known debts,
liabilities, and obligations prior to the Closing Date. FICP Government
also will deliver to FMMT Government Class A Shares of FICP Government,
which FMMT Government shall then distribute to its shareholders.
The value of FMMT Government's assets to be acquired by FICP
Government, the amount of its liabilities to be assumed by FICP
Government, and the net asset value of a Class A Share of FICP Government
will be determined as of the close business of each fund on the Closing
Date. Portfolio securities will be valued on the basis of amortized cost.
This method of valuation involves valuing an instrument at its cost as
adjusted for amortization of premium or accretion of discount rather than
its value based on current market quotations or appropriate substitutes
which reflect current market conditions. If the Board of FMMT or FICP
(collectively, the Boards) believe that a deviation from a Fund's
amortized cost per share may result in material dilution or other unfair
results to shareholders, the Boards have agreed to take such corrective
action, if any, as they deem appropriate to eliminate or reduce, to the
extent reasonably practicable, the dilution or unfair results.
Immediately after the Closing Date, FMMT Government will
liquidate and distribute pro rata to its shareholders of record the Class
A Shares of FICP Government it received, so that each FMMT Government
shareholder will receive a number of full and fractional Class A Shares of
FICP Government equal to the number of full and fractional shares in FMMT
Government held by such shareholder on the Closing Date; FMMT Government
will be liquidated as soon as is practicable thereafter. Such liquidation
and distribution will be accomplished by transferring Class A Shares then
credited to the account of FMMT Government to FICP Government, opening
accounts on the books of FICP Government in the names of FMMT Government
shareholders and representing the respective pro rata number of FICP
Government shares due such shareholders. Fractional shares of FICP
Government will be rounded to the third decimal place.
Accordingly, immediately after the Reorganization, each former
shareholder of FMMT Government will own Class A Shares of FICP Government
that will be equal to the number of that shareholder's shares of FMMT
Government immediately prior to the Reorganization. The net asset value
per share of FICP Government will be unchanged by the transaction. Thus,
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the Reorganization will not result in a dilution of any shareholder
interest.
Any transfer taxes payable upon issuance of Class A Shares of
FICP Government in a name other than that of the registered holder of the
shares on the books of FMMT Government as of that time shall be paid by
the person to whom such shares are to be issued as a condition of such
transfer. Any reporting responsibility of FMMT Government will continue to
be its responsibility up to and including the Closing Date and such later
date on which FMMT Government is liquidated.
FMR will bear the cost of the Reorganization, including
professional fees and the cost of soliciting proxies for the Meeting,
consisting principally of printing and mailing prospectuses and proxy
statements, together with the cost of any supplementary solicitation, and
expenses associated with the filing of registration statements.
The consummation of the Reorganization is subject to a number of
conditions set forth in the Plan, some of which may be waived by a Fund.
In addition, the Reorganization Plan may be amended in any mutually
agreeable manner, except that no amendment that may have a materially
adverse effect on the shareholders' interests may be made subsequent to
the Meeting.
Reasons for the Reorganization
In considering the Reorganization, the Boards made an extensive
inquiry into a number of factors, including the following:
(1) the compatibility of the investment objectives and
policies of the Funds;
(2) the expense ratios of the Funds after the Reorganization
relative to their current expense ratios;
(3) the tax consequences of the Reorganization;
(4) each Fund's current asset level;
(5) anticipated reductions in duplicative funds resulting in
facilitated portfolio management and increased
operational efficiencies; and
(6) services available to shareholders before and after the
proposed Reorganization.
The Boards also noted that although FMMT Government offers more
shareholder services and has lower minimum initial investment and account
balance requirements than does FICP Government, it has not successfully
attracted substantial assets, only a few shareholders currently take
advantage of its sub-accounting services, and it has higher total
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operating expenses than FICP Government. FMR believes that FICP Government
has been more successful in building a large asset base because of its
lower expense ratios.
The Boards concluded that, if the Reorganization is approved,
former FMMT Government shareholders will lose the opportunity to obtain
certain services and features to the extent that they do not currently
utilize them, but will benefit from FICP Government's larger asset base
and lower operating expenses.
Description of Securities to be Issued
FICP is registered with the SEC as an open-end management
investment company. FICP's trustees are authorized to issue an unlimited
number of shares of beneficial interest of separate series (net asset
value $1.00 per share). FICP Government is one of five series of FICP.
FICP's Trustees have authorized the public offering of three classes of
shares of FICP Government. Each share in a class represents an equal
proportionate interest in FICP Government with each other share in that
class. Shares of FICP Government entitle their holders to one vote per
full share and fractional votes for fractional shares held with respect to
matters affecting that class or the Fund as a whole.
On the Closing Date, FICP Government will have two classes of
shares outstanding: Class A and Class B. Only Class A Shares will be
issued to FMMT Government and distributed to its shareholders as part of
the Reorganization. Each Class represents interests in the same assets of
the Fund. The Classes differ as follows: (1) each Class has exclusive
voting rights on matters pertaining to the plan of distribution with
respect to that class; (2) Class B Shares bear ongoing distribution
expenses; and (3) each Class may bear differing amounts of certain Class-
specific expenses. Each share of each Class of FICP Government is entitled
to participate equally in dividends and other distributions and in the
proceeds of any liquidation, except that dividends on each Class may be
affected by the allocation of expenses to that Class.
FICP does not hold annual meetings of shareholders. There will
normally be no meetings of shareholders for the purpose of electing
Trustees unless less than a majority of the trustees holding office have
been elected by shareholders, at which time the Trustees then in office
will call a shareholders meeting for the election of Trustees. Under the
1940 Act, shareholders of record of at least two-thirds of the outstanding
shares of an investment company may remove a trustee by votes cast in
person or by proxy at a meeting called for that purpose. The Trustees are
required to call a meeting of shareholders for the purpose of voting upon
the question of removal of any Trustee when requested in writing to do so
by the shareholders of record holding at least 10% of the Trust's
outstanding shares.
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Federal Income Tax Considerations
The exchange of the Acquired Fund's assets for Acquiring Fund
shares and the Acquiring Fund's assumption of the liabilities of the
Acquired Fund is intended to qualify for federal income tax purposes as a
tax-free reorganization under section 368(a)(1)(C) of the United States
Internal Revenue Service Code of 1986, as amended (the Code). With respect
to the Reorganization, the participating Funds have received an opinion
from Kirkpatrick & Lockhart LLP, counsel to FMMT and FICP, substantially
to the effect that:
(i) The acquisition by FICP Government of substantially all of the
assets of FMMT Government solely in exchange for FICP Government
Class A Shares, and the assumption by FICP Government of FMMT
Government's liabilities, followed by the distribution by FMMT
Government of FICP Government Class A Shares to the shareholders
of FMMT Government pursuant to the liquidation of FMMT Government
and constructively in exchange for their FMMT Government shares,
will constitute a reorganization within the meaning of section
368(a)(1)(C) of the Code, and FMMT Government and FICP Government
will each be a party to a reorganization" within the meaning of
section 368(b) of the Code;
(ii) No gain or loss will be recognized by FMMT Government upon the
transfer of substantially all of its assets to FICP Government in
exchange solely for FICP Government Class A Shares and FICP
Government's assumption of FMMT Government's liabilities,
followed by FMMT Government's subsequent distribution of those
Class A Shares to shareholders in liquidation of FMMT Government;
(iii) No gain or loss will be recognized by FICP Government upon the
receipt of the assets of FMMT Government in exchange solely for
FICP Government Class A Shares and its assumption of FMMT
Government's liabilities;
(iv) The shareholders of FMMT Government will recognize no gain or
loss upon the exchange of their FMMT Government shares solely for
FICP Government Class A Shares;
(v) The basis of FMMT Government's assets in the hands of FICP
Government will be the same as the basis of those assets in the
hands of FMMT Government immediately prior to the Reorganization,
and the holding period of those assets in the hands of FICP
Government will include the holding period of those assets in the
hands of FMMT Government;
(vi) The basis of FMMT Government shareholders in FICP Government
Class A Shares will be the same as their basis in FMMT Government
shares to be constructively surrendered in exchange therefor; and
(vii) The holding period of the FICP Government Class A Shares to be
received by the FMMT Government shareholders will include the
14
<PAGE>
period during which the FMMT Government shares to be
constructively surrendered in exchange therefor were held,
provided such FMMT Government shares were held as capital assets
by those shareholders on the date of the Reorganization.
Shareholders of FMMT Government should consult their tax advisers
regarding the effect, if any, of the proposed Reorganization in light of
their individual circumstances. Because the foregoing discussion only
relates to the federal income tax consequences of the Reorganization,
those shareholders also should consult their tax advisers as to state and
local tax consequences, if any, of the Reorganization.
Capitalization
The following table shows the capitalization of the Funds as of
March 31, 1995 (unaudited for FMMT Government), and on a pro forma
combined basis (unaudited) as of that date giving effect to the
Reorganization.
FICP FMMT Pro Forma
Government Government Combined
---------- ---------- ---------
Net Assets Class A (1) $3,321,065,528 $208,419,684 $3,529,485,212
Net Asset Value Per $1.00 $1.00 $1.00
Share Class A (1)
Shares Outstanding Class 3,321,584,137 208,392,418 3,529,976,555
A (1)
(1) Currently, only FICP Government offers different classes of
shares. Shares of FMMT Government will be exchanged for Class A Shares of
FICP Government.
Conclusion
The Agreement and Plan of Reorganization and Liquidation and the
transactions provided for therein were approved by the Board at a meeting
held on March 16, 1995. The Boards of Trustees of FMMT and FICP determined
that the interests of existing shareholders of FMMT Government and FICP
Government would not be diluted as a result of the Reorganization. In the
event that the Reorganization is not consummated, FMMT Government will
continue to engage in business as a fund of a registered investment
company and the Board of FMMT will consider other proposals for the
reorganization or liquidation of the Fund.
15
<PAGE>
ADDITIONAL INFORMATION ABOUT FICP GOVERNMENT
Financial Highlights
The table below provides condensed information concerning income
changes for one Class A Share of FICP Government for the periods shown.
This information is supplemented by the financial statements and
accompanying notes appearing in FICP Government's Annual Report to
Shareholders for the fiscal year ended March 31, 1995, which are
incorporated herein by this reference into the Statement of Additional
Information. The financial statements and notes and the financial
information in the table below have been audited by Price Waterhouse LLP,
independent certified public accountants, whose report thereon is included
in the Annual Report to Shareholders and may be obtained by shareholders.
<TABLE>
<CAPTION>
Selected Per Share Data
Years ended March 31 1986 A 1987 1988 1989 1990 1991 1992 1993 1994 1995
<S> <C> <C> C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
period
Income from Investment
Operations
Net interest income .053 .063 .068 .079 .088 .077 .054 .035 .031 .048
Less Distributions
From net interest (.053) (.063) (.068) (.079) (.088) (.077) (.054) (.035) (.031) (.048)
income
Net asset value, $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
end of period
Total return B 5.47% 6.51% 6.98% 8.19% 9.15% 7.94% 5.55% 3.56% 3.13% 4.86%
Ratios and Supplemental Data
Net assets, end of period (In $512 $1,359 $1,879 $1,918 $2,816 $3,614 $4,604 $5,686 $3,765 $3,321
millions)
Ratio of expenses to average .20%C .20% .20% .20% .20% .18% .18% .18% .18% .18%
net assets
16
<PAGE>
Years ended March 31 1986 A 1987 1988 1989 1990 1991 1992 1993 1994 1995
Ratio of expenses to average .30%C .25% .23% .24% .25% .25% .25% .24% .24% .24%
net assets before expense
reductions
Ratio of net interest income 7.81%C 6.28% 6.78% 7.90% 8.74% 7.62% 5.33% 3.50% 3.07% 4.77%
to average net assets
</TABLE>
A July 25, 1985 (commencement of operations) to March 31, 1986
B Total returns for periods of less than one year are not
annualized. Total returns would have been lower had certain
expenses not been reduced during the periods shown.
C Annualized
MISCELLANEOUS
Available Information
FMMT and FICP are each subject to the informational requirements
of the Securities Exchange Act of 1934 and the 1940 Act, and in accordance
therewith file reports, proxy material and other information with the SEC.
Such reports, proxy material and other information can be inspected and
copied at the Public Reference Room maintained by the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549. Copies of such material can also be
obtained from the Public Reference Branch, Office of Consumer Affairs and
Information Services, Securities and Exchange Commission, Washington, D.C.
20549, at prescribed rates.
Legal Matters
Certain legal matters in connection with the issuance of Class A
Shares of FICP Government will be passed upon by Kirkpatrick & Lockhart
LLP, counsel to the Trusts.
Experts
The audited financial statements of FICP Government incorporated
by reference in the Statement of Additional Information, have been
examined by Price Waterhouse LLP, independent accountants, whose report
thereon is included in the Fund's Annual Report to Shareholders for the
fiscal year ended March 31, 1995. The audited financial statements of FMMT
Government incorporated by reference in the Statement of Additional
17
<PAGE>
Information, have been examined by Coopers & Lybrand L.L.P., independent
accountants, whose report thereon is included in the Fund's Annual Report
to Shareholders for the fiscal year ended August 31, 1994. Unaudited
financial statements for FMMT Government for the six-month period ended
February 28, 1995 are also incorporated by reference. The financial
statements audited by Price Waterhouse LLP and Coopers & Lybrand L.L.P.
have been incorporated herein by reference in reliance on their reports
given on their authority as experts in auditing and accounting.
Notice to Banks, Broker-Dealers and Voting Trustees and Their Nominees
Please advise FMMT Government, in care of Fidelity Money Market
Trust, 82 Devonshire Street, Boston, MA 02109, whether other persons are
beneficial owners of shares for which Proxy Statements are being solicited
and if so, the number of copies of the Proxy Statement you wish to receive
in order to supply copies to the beneficial owners of the respective
shares.
18
<PAGE>
EXHIBIT 1
FORM OF AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION
FIDELITY MONEY MARKET TRUST: U.S. GOVERNMENT PORTFOLIO
THIS AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION (the
Agreement) is made as of the ____ day of ________, 1995 by and among U.S.
Government Portfolio (FMMT Government), a fund of Fidelity Money Market
Trust (FMMT), Government (FICP Government), a fund of Fidelity
Institutional Cash Portfolios (FICP), and Fidelity Management & Research
Company (FMR). (FMMT and FICP may hereinafter be referred to collectively
as the "Trusts" or individually as a "Trust".) Each trust is a duly
organized business trust under the laws of the State of Delaware and FMR
is a Massachusetts corporation, each with its principal place of business
at 82 Devonshire Street, Boston, Massachusetts 02109.
This Agreement is intended to be, and is adopted as, a plan of
reorganization and liquidation within the meaning of Section 368(a)(1)(C)
of the United States Internal Revenue Code of 1986, as amended (the Code).
The reorganization (Reorganization) will comprise the transfer of
substantially all of the assets of FMMT Government in exchange solely for
Class A Shares of beneficial interest of FICP Government, and the
assumption by FICP Government of FMMT Government's liabilities, followed
by the constructive distribution, after the Closing Date hereinafter
referred to, of such Class A Shares of FICP Government to the shareholders
of FMMT Government in liquidation of FMMT Government as provided herein,
all upon the terms and conditions hereinafter set forth in this Agreement.
In consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSFER OF ASSETS AND ASSUMPTION OF LIABILITIES OF FMMT
GOVERNMENT IN EXCHANGE FOR CLASS A SHARES OF FICP GOVERNMENT AND
LIQUIDATION OF FMMT GOVERNMENT
1. As of the date of this Agreement, FICP Government
offers two classes of shares, Class A and Class B and FMMT
Government offers one class of shares. As contemplated herein, in
exchange for substantially all of the assets of FMMT Government
and the assumption by FICP Government of FMMT Government's
liabilities, FICP Government shall deliver Class A Shares of FICP
Government to FMMT Government.
2. Subject to the terms and conditions herein set forth, and
on the basis of the representations and warranties contained
herein, FMMT Government agrees to transfer its assets as set
forth in paragraph 1.3 to FICP Government and FICP Government
agrees to assume FMMT Government's liabilities described in
paragraph 1.4 hereof, and deliver to FMMT Government in exchange
therefor the number of Class A Shares of FICP Government equal in
value (calculated in the manner and as of the time set forth in
paragraph 2.2) to the net asset value per share of FMMT
Government (calculated in the manner and as of the time set forth
<PAGE>
in paragraph 2.1) multiplied by the number of shares of FMMT
Government then outstanding.
3. The assets of FMMT Government to be acquired by FICP
Government shall include substantially all cash, cash
equivalents, securities, receivables (including interest or
dividends receivable), claims, choses in action, and other
property owned by FMMT Government and any deferred or prepaid
expenses shown as an asset on the books of FMMT Government on the
closing date provided in Article 3 hereof (the Closing Date).
4. The liabilities to be assumed by FICP Government shall
include (except as otherwise provided herein) all of FMMT
Government's liabilities, debts, obligations, and duties of
whatever kind or nature, whether absolute, accrued, contingent or
otherwise, arising in the ordinary course of business.
Notwithstanding the foregoing, FMMT Government agrees to use its
best efforts to discharge all of its known liabilities prior to
the Closing Date.
5. In order for FMMT Government to comply with Section
852(a)(1) of the Code and to avoid having any taxable income in
the short taxable year ending with its dissolution, FMMT
Government will, prior to the Closing Date, as defined below,
declare a dividend so that it will have declared dividends of
substantially all of its investment company taxable income and
net realized capital gain, if any, for such taxable year.
6. As provided in paragraph 3.4, as soon after the Closing
Date as is conveniently practicable (the Liquidation Date), FMMT
Government will liquidate and distribute pro rata to its
shareholders of record, determined as of the close of business on
the Closing Date, the FICP Government Class A Shares received by
FMMT Government pursuant to Article 1 in exchange for their
interest in FMMT Government evidenced by their shares of
beneficial interest in FMMT Government shares. Such liquidation
and distribution will be accomplished by the transfer of the
shares then credited to the account of FMMT Government on the
books of FICP Government, to open accounts on the share records
of FICP Government in the names of the FMMT Government
shareholders and representing the respective pro rata number of
FICP Government Class A Shares due such shareholders. FICP
Government shall not issue certificates representing its shares
in connection with such exchange. Fractional shares of FICP
Government shall be rounded to the third decimal place.
7. Ownership of FICP Government Class A Shares will be shown
on the books of FICP Government's transfer agent. FICP Government
Class A Shares will be issued in the manner described in FICP
Government's current Class A Prospectus and Statement of
Additional Information.
2
<PAGE>
8. Any transfer taxes payable upon the issuance of Class A
Shares of FICP Government in a name other than the registered
holder of the shares on the books of FMMT Government as of that
time shall be paid by the person to whom such shares are to be
issued as a condition of such transfer.
9. Any reporting responsibility of FMMT Government is and
shall remain the responsibility of FMMT Government up to and
including the Closing Date and such later date on which FMMT
Government is liquidated.
2. VALUATION
1. The net asset value per share of FMMT Government's shares
shall be computed as of the close of business on the Closing
Date, using the valuation procedures set forth in FMMT
Government's then current Prospectus or Statement of Additional
Information.
2. The value of FICP Government Class A Shares shall be the
net asset value per share computed as of the Closing Date, using
the valuation procedures set forth in FICP Government's then
current Class A Prospectus or Statement of Additional
Information.
3. All computations of value shall be made by Fidelity
Service Co., a division of FMR Corp., in accordance with its
regular practice as pricing agent for FICP Government and FMMT
Government.
3. CLOSING AND CLOSING DATE
1. The Closing Date shall be October 31, 1995, or such other
date as the parties may agree in writing. All acts taking place
at the Closing shall be deemed to take place simultaneously as of
5:00 p.m. Eastern time on the Closing Date unless otherwise
provided. The Closing shall be held at 5:00 p.m. Eastern time at
the office of FMMT or at such other time and/or place as the
parties may agree.
2. Morgan Guaranty Trust Company of New York, as custodian
for FMMT Government and FICP Government (the Custodian), shall
deliver at the Closing a certificate of an authorized officer
stating that (a) FMMT Government's securities, cash, and other
assets have been delivered in proper form to FICP Government
prior to close of business on the Closing Date; and (b) all
necessary taxes including all applicable Federal and state stock
transfer stamps, if any, shall have been paid, or provision for
payment shall have been made by FMMT Government, in conjunction
with the delivery of portfolio securities.
3
<PAGE>
3. In the event that on the Closing Date (a) The Federal
Reserve Bank of New York is closed, (b) the market for government
securities is closed to trading or trading thereon is restricted,
or (c) trading or the reporting of trading on said market or
elsewhere is disrupted so that accurate appraisal of the value of
the total net assets of FMMT Government and FICP Government is
impracticable, the Closing Date shall be postponed until the
first business day after the day when trading shall have been
fully resumed and reporting shall have been restored, or such
other date as the parties may agree.
4. Fidelity Investments Institutional Operations Co.
(FIIOC), as transfer agent for FMMT Government and FICP
Government, shall deliver at the Closing a list of the names and
addresses of FMMT Government's shareholders and the number and
percentage ownership of outstanding shares owned by each such
shareholder of FMMT Government, all as of the close of business
on the Closing Date, certified by an officer of FIIOC. FICP
Government shall issue and deliver to the Secretary or Assistant
Secretary of FMMT Government a confirmation evidencing the Class
A Shares of FICP Government to be credited on the Liquidation
Date, or provide evidence satisfactory to FMMT Government that
such Class A Shares of FICP Government have been credited to FMMT
Government's account on the books of FICP Government. At the
Closing, each party shall deliver to the other such bills of
sale, checks, assignments, stock certificates, receipts or other
documents as such other party or its counsel may reasonably
request.
4. REPRESENTATIONS AND WARRANTIES
1. FMMT Government represents and warrants as follows:
A. FMMT Government is a series of FMMT, a Delaware
business trust duly organized, validly existing and in
good standing under the laws of the State of Delaware;
B. FMMT is an open-end, management investment
company duly registered under the Investment Company Act
of 1940 (the 1940 Act), and such registration is in full
force and effect;
C. FMMT Government is not in, and the execution,
delivery and performance of this Agreement will not
result in, violation of any provision of the Trust
Instrument or By-Laws of FMMT, or, to the knowledge of
FMMT Government, of any agreement, indenture, instrument,
contract, lease or other undertaking to which FMMT
Government is a party or by which FMMT Government is
bound;
4
<PAGE>
D. FMMT Government has no material contracts or
other commitments (other than this Agreement) which will
not be terminated without liability to FMMT Government
prior to the Closing Date;
E. No material litigation or administrative
proceeding or investigation of or before any court or
governmental body is presently pending or to the
knowledge of FMMT Government threatened against FMMT
Government or any of its properties or assets, except as
previously disclosed in writing to FICP Government. FMMT
Government knows of no facts which might form the basis
for the institution of such proceedings, and FMMT
Government is not a party to or subject to the provisions
of any order, decree or judgment of any court or
governmental body which materially and adversely affects
its business or its ability to consummate the
transactions herein contemplated;
F. The Statement of Assets and Liabilities, the
Statement of Operations, the Statement of Changes in Net
Assets, Per-Share Data and Ratios, and the Schedule of
Investments of FMMT Government at August 31, 1994 which
have been audited by Coopers & Lybrand L.L.P.,
independent accountants, in accordance with generally
accepted auditing standards, and unaudited statements for
the six months ended February 28, 1995, have been
furnished to FICP Government. Such financial statements
are presented in accordance with generally accepted
accounting principles, and fairly present, in all
material respects, the financial condition of FMMT
Government as of such dates, and there are no material
known liabilities of FMMT Government at such date
(contingent or otherwise) not disclosed therein;
G. Since August 31, 1994, there has not been any
material adverse change in FMMT Government's financial
condition, assets, liabilities or business, other than
changes occurring in the ordinary course of business;
H. At the date hereof and at the Closing Date, all
Federal and other tax returns and reports of FMMT
Government required by law to have been filed by such
dates shall have been filed, and all Federal and other
taxes shall have been paid so far as due, or provision
shall have been made for the payment thereof, and, to the
best of FMMT Government's knowledge, no such return is
currently under audit and no assessment has been asserted
with respect to such returns;
I. For the taxable fiscal years from October 31,
1985 through October 31, 1991, the fiscal period from
5
<PAGE>
November 1, 1991 through August 31, 1992, and for each
subsequent taxable fiscal year ended August 31 through
the fiscal year ended August 31, 1994, FMMT Government
has met the requirements of Subchapter M of the Code for
qualification and treatment as a regulated investment
company and intends to meet such requirements for its
taxable year ending with its dissolution;
J. All issued and outstanding FMMT Government shares
are, and at the Closing Date will be, duly and validly
issued and outstanding, fully paid and nonassessable as a
matter of Delaware law. All of the issued and outstanding
FMMT Government shares will, at the time of Closing, be
held by the persons and in the amounts set forth in the
list of shareholders submitted to FICP Government in
accordance with the provisions of paragraph 3.4 hereof.
K. At the Closing Date, FMMT Government will have
good and marketable title to its assets to be transferred
to FICP Government pursuant to paragraph 1.2 hereof, and
full right, power and authority to sell, assign, transfer
and deliver such assets hereunder free of any liens or
other encumbrances, and upon delivery and payment for
such assets, FICP Government will acquire good and
marketable title thereto, subject to no restrictions on
the full transfer thereof, including such restrictions as
might arise under the Securities Act of 1933, as amended
(the 1933 Act);
L. The execution, delivery and performance of this
Agreement will have been duly authorized prior to the
Closing Date by all necessary corporate action on the
part of FMMT Government, and this Agreement constitutes a
valid and binding obligation of FMMT Government
enforceable in accordance with its terms, subject to
shareholder approval;
M. The information to be furnished by FMMT
Government for use in applications for orders,
registration statements, proxy materials and other
documents which may be necessary in connection with the
transactions contemplated hereby shall be accurate and
complete and shall comply in all material respects with
Federal securities and other laws and regulations
thereunder applicable thereto;
N. The proxy statement of FMMT Government to be
included in the registration statement filed with the
Securities and Exchange Commission by FMMT on Form N-14
relating to the FICP Government Class A Shares issuable
thereunder, and any supplement or amendment thereto (the
Registration Statement), on the effective date of the
6
<PAGE>
Registration Statement, at the time of the meeting of
FMMT Government's shareholders, and on the Closing Date
(i) will comply in all material respects with the
provisions of the Securities Exchange Act of 1934 (the
1934 Act) and the 1940 Act and the rules and regulations
thereunder, and (ii) will not contain any untrue
statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make
the statements therein not misleading;
O. FMMT Government will declare to shareholders of
record, on or prior to the Closing Date, one or more
dividends or distributions which, together with all
previous such dividends or distributions, shall have the
effect of distributing to the shareholders substantially
all of its investment company taxable income and net
realized capital gains, if any, as of the Closing Date;
P. FMMT Government will, from time to time, as and
when requested by FICP Government, execute and deliver or
cause to be executed and delivered, all such assignments
and other instruments, and will take or cause to be taken
such further action, as FICP Government may deem
necessary or desirable in order to vest in and confirm to
FICP Government title to and possession of all the assets
of FMMT Government to be sold, assigned, transferred and
delivered hereunder and otherwise to carry out the intent
and purpose of this Agreement;
Q. The execution and delivery of this Agreement does
not, and the consummation of the transactions
contemplated hereby will not, conflict with FMMT's Trust
Instrument or By-Laws or, to FMMT Government's knowledge,
any provision of any agreement to which FMMT Government
is a party or by which it is bound or, to the knowledge
of FMMT Government, result in the acceleration of any
obligation or the imposition of any penalty under any
agreement, judgment or decree to which FMMT Government is
a party or by which it is bound;
R. To FMMT Government's knowledge, no consent,
approval, authorization or order of any court or
governmental authority is required for the consummation
by FMMT Government of the transactions contemplated
herein, except such as have been obtained under the 1933
Act, the 1934 Act, and the 1940 Act and such as may be
required under state securities laws;
S. The fair market value of the assets of FMMT
Government will equal or exceed the liabilities to be
assumed by FICP Government and to which the assets are
subject; and
7
<PAGE>
T. FMMT Government's liabilities to be assumed by
FICP Government were incurred by FMMT Government in the
ordinary course of business.
2. FICP Government represents and warrants as follows:
A. FICP Government is a series of FICP, a Delaware
business trust duly organized, validly existing and in
good standing under the laws of the State of Delaware;
B. FICP is an open-end, management investment
company duly registered under the 1940 Act, and such
registration is in full force and effect;
C. FICP Government is not in, and the execution,
delivery and performance of this agreement will not
result in, violation of any provisions of the Trust
Instrument or By-Laws of FICP, or, to the knowledge of
FICP Government, of any agreement, indenture, instrument,
contract, lease or other undertaking to which FICP
Government is a party or by which FICP Government is
bound;
D. No material litigation or administrative
proceeding or investigation of or before any court or
governmental body is presently pending or, to the
knowledge of FICP Government, threatened against FICP
Government or any of its properties or assets, except as
previously disclosed in writing to FMMT Government. FICP
Government knows of no facts which might form the basis
for the institution of such proceedings and FICP
Government is not a party to or subject to the provisions
of any order, decree or judgment of any court or
governmental body which materially and adversely affects
its business or its ability to consummate the
transactions herein contemplated;
E. The Statement of Assets and Liabilities, the
Statement of Operations, the Statement of Changes in Net
Assets, Per-Share Data and Ratios and the Schedule of
Investments of FICP Government at March 31, 1995 (copies
of which have been furnished to FMMT Government) are
presented in accordance with generally accepted
accounting principles, and fairly present, in all
material respects, the financial condition of FICP
Government as of such date, and there are no material
known liabilities of FICP Government at such date
(contingent or otherwise) not disclosed therein;
F. Since March 31, 1995, there has not been any
material adverse change in FICP Government's financial
8
<PAGE>
condition, assets, liabilities or business other than
changes occurring in the ordinary course of business;
G. At the date hereof and at the Closing Date, all
Federal and other tax returns and reports of FICP
Government required by law to have been filed by such
dates shall have been filed, and all Federal and other
taxes shall have been paid insofar as due, or provision
shall have been made for the payment thereof, and, to the
best of FICP Government's knowledge, no such return is
currently under audit and no assessment has been asserted
with respect to such returns;
H. For the taxable fiscal period from February 2,
1987 through March 31, 1987 and for each subsequent
taxable fiscal year ended March 31 through the fiscal
year ended March 31, 1995, FICP Government has met the
requirements of Subchapter M of the Code for
qualification and treatment as a regulated investment
company and intends to meet such requirements for its
current fiscal year;
I. All issued and outstanding FICP Government Class
A Shares are, and at the Closing will be, duly and
validly issued and outstanding, fully paid and
non-assessable, under Delaware law;
J. The execution, delivery and performance of this
Agreement will have been duly authorized prior to the
Closing Date by all necessary corporate action on the
part of FICP Government, and this Agreement constitutes
the valid and binding obligation of FICP Government
enforceable in accordance with its terms;
K. The FICP Government Class A Shares to be issued
and delivered to FMMT Government pursuant to the terms of
this Agreement will at the Closing Date have been duly
authorized and, when so issued and delivered, will be
duly and validly issued Class A Shares of FICP
Government, fully paid and non-assessable under Delaware
law;
L. On the effective date of the Registration
Statement, at the time of the meeting of FMMT
Government's shareholders, and on the Closing Date, the
Registration Statement (i) will comply in all material
respects with the provisions of the 1933 Act, the 1934
Act, and the 1940 Act and the rules and regulations
thereunder, and (ii) will not contain any untrue
statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however,
9
<PAGE>
that the representations and warranties in this
subsection shall not apply to statements in or omissions
from the Registration Statement made in reliance upon and
in conformity with information furnished by FMMT
Government for use in the Registration Statement;
M. The information to be furnished by FICP
Government for use in applications for orders,
registration statements, proxy materials and other
documents which may be necessary in connection with the
transactions contemplated hereby shall be accurate and
complete and shall comply in all material respects with
Federal securities and other laws and regulations
applicable thereto;
N. FICP Government agrees to use all reasonable
efforts to obtain the approvals and authorizations
required by the 1933 Act, the 1940 Act, and such of the
state Blue Sky or securities laws as it may deem
appropriate in order to continue its operations after the
Closing Date;
O. FICP Government will, from time to time, as and
when requested by FMMT Government, execute and deliver or
cause to be executed and delivered, all such assignments
and other instruments, and will take and cause to be
taken such further action as FMMT Government may deem
necessary or desirable in order to vest in and confirm to
FMMT Government, title to and possession of all of the
FICP Government's Class A Shares to be sold, assigned,
transferred and delivered hereunder and otherwise to
carry out the intent and purpose of this Agreement;
P. The execution and delivery of this Agreement does
not, and the consummation of the transactions
contemplated hereby will not, conflict with FICP's Trust
Instrument or By-Laws, or to FICP Government's knowledge,
any provision of any agreement to which FICP Government
is a party or by which it is bound or, to the knowledge
of FICP Government, result in the acceleration of any
obligations or the imposition of any penalty under any
agreement, judgment or decree to which FICP Government is
a party or by which it is bound; and
Q. To FICP Government's knowledge, no consent,
approval, authorization or order of any court or
governmental authority is required for the consummation
by FICP Government of the transactions contemplated
herein, except such as have been obtained under the 1933
Act, the 1934 Act, and the 1940 Act and such as may be
required under state securities laws.
10
<PAGE>
5. COVENANTS OF FICP GOVERNMENT AND FMMT GOVERNMENT
1. FICP Government and FMMT Government each covenants to
operate its respective business in the ordinary course between
the date hereof and the Closing Date, it being understood that
such ordinary course of business will include customary dividends
and distributions.
2. FMMT Government covenants to call a shareholder meeting
to consider and act upon this Agreement and to take all other
action necessary to obtain approval of the transactions
contemplated herein.
3. FMMT Government covenants that FICP Government Class A
Shares to be issued hereunder are not being acquired for the
purpose of making any distribution thereof other than in
accordance with the terms of this Agreement.
4. FMMT Government covenants that it will assist FICP
Government in obtaining such information as FICP Government
reasonably requests concerning the beneficial ownership of FMMT
Government's shares.
5. Subject to the provisions of this Agreement, FICP
Government and FMMT Government each will take, or cause to be
taken, all action, and will do or cause to be done all things,
reasonably necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Agreement.
6. FMMT Government covenants that as promptly as
practicable, but in any case within 180 days after the Closing
Date, FICP Government will be furnished with an analysis of the
earnings and profits of FMMT Government for Federal income tax
purposes, which will be carried over by FICP Government as a
result of Section 381 of the Code, and which will be certified by
its Treasurer.
7. FMMT Government will prepare a Prospectus (the
Prospectus) which will include a Proxy Statement (the Proxy
Statement), both documents to be included in a Registration
Statement on Form N-14 for Fidelity Institutional Cash Portfolios
(the Registration Statement) in compliance with the 1933 Act, the
1934 Act, and the 1940 Act in connection with the special
shareholders meeting to consider approval of this Agreement and
the transactions contemplated herein.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF FMMT GOVERNMENT
The obligations of FMMT Government to consummate the transactions
provided for herein shall be subject, at its election, to the performance
by FICP Government of all the obligations to be performed by it hereunder
11
<PAGE>
on or before the Closing Date, and, in addition thereto, the following
further conditions:
1. All representations and warranties of FICP Government
contained in this Agreement shall be true and correct in all
material respects as of the date hereof and, except as they may
be affected by the transactions contemplated by this Agreement,
as of the Closing Date with the same force and effect as if made
on and as of the Closing Date;
2. FICP Government shall have delivered to FMMT Government
on the Closing Date a certificate executed in its name by a duly
authorized officer of FICP, in form and substance satisfactory to
FMMT Government dated as of the Closing Date, to the effect that
the representations and warranties of FICP Government made in
this Agreement are true and correct at and as of the Closing Date
except as they may be affected by the transactions contemplated
by this Agreement, and as to such other matters as FMMT
Government shall reasonably request.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF FICP GOVERNMENT
The obligations of FICP Government to complete the transactions
provided for herein shall be subject, at its election, to the performance
by FMMT Government of all the obligations to be performed by it hereunder
on or before the Closing Date and, in addition thereto, the following
further conditions:
1. All representations and warranties of FMMT Government
contained in this Agreement shall be true and correct in all
material respects as of the date hereof, and except as they may
be affected by the transactions contemplated by this Agreement,
as of the Closing Date with the same force and effect as if made
on and as of the Closing Date;
2. FMMT Government shall have delivered to FICP Government a
statement of its assets and liabilities, together with a list of
its portfolio securities showing the tax costs of such securities
by lot, as of the Closing Date, certified by the Treasurer or
Assistant Treasurer of FMMT Government;
3. FMMT Government shall have delivered to FICP Government
on the Closing Date a certificate executed in its name by a duly
authorized officer of FMMT in form and substance satisfactory to
FICP Government, dated as of the Closing Date, to the effect that
the representations and warranties of FMMT Government made in
this Agreement are true and correct at and as of the Closing Date
except as they may be affected by the transactions contemplated
by this Agreement, and as to such other matters as FICP
Government shall reasonably request.
12
<PAGE>
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF FICP GOVERNMENT
AND FMMT GOVERNMENT
The obligations of FMMT Government hereunder are, at the option
of FICP Government, and the obligations of the FICP Government hereunder
are, at the option of FMMT Government, each subject to the further
conditions that on or before the Closing Date:
1. This Agreement and the transactions contemplated herein
shall have been approved by the requisite vote of the holders of
the outstanding shares of beneficial interest of FMMT Government
in accordance with the provisions of the law of business trusts
of the State of Delaware, and certified copies of the resolutions
evidencing such approval shall have been delivered to FICP
Government;
2. On the Closing Date, no action, suit or other proceeding
shall be pending before any court or governmental agency in which
it is sought to restrain, prohibit, obtain damages or other
relief in connection with this Agreement or any of the
transactions contemplated herein;
3. All consents of other parties and all other consents,
orders and permits of Federal, state and local regulatory
authorities (including those of the Securities and Exchange
Commission and of state Blue Sky and securities authorities,
including "no-action" positions of such Federal or state
authorities) deemed necessary by FICP Government or FMMT
Government to permit consummation, in all material respects, of
the transactions contemplated hereby shall have been obtained,
except where failure to obtain any such consent, order or permit
would not involve a risk of a material adverse effect on the
assets or properties of FICP Government or FMMT Government,
provided that either party hereto may for itself waive any of
such conditions;
4. The Registration Statement shall have become effective
under the 1933 Act and no stop orders suspending the
effectiveness thereof shall have been issued and, to the best
knowledge of parties hereto, no investigation or proceeding for
that purpose shall have been instituted or be pending, threatened
or contemplated under the 1933 Act;
5. FMMT Government will declare to shareholders of record,
on or prior to the Closing Date, one or more dividends or
distributions which, together with all previous such dividends or
distributions, shall have the effect of distributing to the
shareholders substantially all of its investment company taxable
income and net realized capital gain, if any, as of the Closing
Date;
13
<PAGE>
6. FMMT Government and FICP Government shall have received
on or before the Closing Date an opinion of Kirkpatrick &
Lockhart LLP satisfactory to FMMT Government and FICP Government,
that for Federal income tax purposes:
A. The Reorganization will be a reorganization under
section 368(a)(1)(C) of the Internal Revenue Code of
1986, as amended ("Code"), and FMMT Government and FICP
Government will each be parties to the reorganization
under section 368(b) of the Code.
B. No gain or loss will be recognized by FMMT
Government upon the transfer of substantially all of its
assets to FICP Government in exchange solely for FICP
Government Class A Shares and FICP Government's
assumption of FMMT Government's liabilities followed by
the distribution of those FICP Government Class A Shares
to the FMMT Government shareholders in liquidation of
FMMT Government.
C. No gain or loss will be recognized by FICP
Government on the receipt of FMMT Government's assets in
exchange solely for the FICP Government Class A Shares
and the assumption of FMMT Government's liabilities.
D. The basis of FMMT Government's assets in the
hands of FICP Government will be the same as the basis of
such assets in FMMT Government's hands immediately prior
to the Reorganization.
E. FICP Government's holding period in the assets to
be received from FMMT Government will include FMMT
Government's holding period in such assets.
F. The FMMT Government shareholders will recognize
no gain or loss on the exchange of the shares of
beneficial interest in FMMT Government ("FMMT Government
Shares") for the FICP Government Class A Shares in the
Reorganization.
G. The FMMT Government shareholders' basis in the
FICP Government Class A Shares to be received by them
will be the same as their basis in the FMMT Government
Shares to be surrendered in exchange therefor.
H. The holding period of the FICP Government Class A
Shares to be received by the FMMT Government shareholders
will include the holding period of the FMMT Government
Shares to be surrendered in exchange therefor, provided
those FMMT Government Shares were held as capital assets
on the date of the Reorganization.
14
<PAGE>
Notwithstanding anything herein to the contrary, FMMT Government
may not waive the conditions set forth in this Paragraph 8.6.
9. BROKERAGE FEES AND EXPENSES
1. FICP Government and FMMT Government each represents and
warrants to the other that there are no brokers' or finders' fees
payable in connection with the transactions provided for herein.
2. Fidelity Management & Research Company will assume
expenses incurred by FMMT and FMMT Government, in connection with
entering into and carrying out the provisions of this Agreement,
whether or not the transactions contemplated hereby are
consummated. Such expenses shall include, without limitation: (i)
expenses incurred in connection with the entering into and the
carrying out of the provisions of this Agreement; (ii) postage;
(iii) printing; (iv) accounting fees; (v) legal fees; and (vi)
solicitation costs of the transactions.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
1. FICP Government and FMMT Government agree that neither
party has made any representation, warranty or covenant not set
forth herein and that this Agreement constitutes the entire
agreement between the parties.
2. The representations, warranties, and covenants contained
in the Agreement or in any document delivered pursuant hereto or
in connection herewith shall survive the consummation of the
transactions contemplated hereunder.
11. TERMINATION
This Agreement may be terminated by the mutual agreement of FICP
Government and FMMT Government. In addition, either FICP Government or
FMMT Government may at its option terminate this Agreement at or prior to
Closing Date because:
1. of a material breach by the other of any representation,
warranty, or agreement contained herein to be performed at or
prior to the Closing Date; or
2. a condition herein expressed to be precedent to the
obligations of the terminating party has not been met and it
reasonably appears that it will not or cannot be met.
In the event of any such termination, there shall be no liability
for damages on the part of FICP Government or FMMT Government, or their
respective Trustees or officers.
12. AMENDMENT; WAIVER
15
<PAGE>
1. This Agreement may be amended, modified or supplemented
in such manner as may be mutually agreed upon in writing by the
respective President, any Vice President or Treasurer of FMMT
Government, FICP Government, and FMR; provided, however, that
following the shareholders' meeting called by FMMT Government
pursuant to Paragraph 5.2 of this Agreement, no such amendment
may have the effect of changing the provisions for determining
the number of Class A Shares of FICP Government to be paid to
FMMT Government shareholders under this Agreement to the
detriment of such shareholders without their further approval.
2. At any time before the Closing Date, FICP Government or
FMMT Government may waive any of the conditions set forth herein,
provided that such waiver will not have a material adverse effect
on the interests of such Fund's shareholders.
13. NOTICES
Any notice, report, or demand required or permitted by any
provision of this Agreement shall be in writing and shall be given by
prepaid telegraph or prepaid certified mail addressed to Fidelity
Institutional Cash Portfolios, Fidelity Money Market Trust, or FMR as
appropriate, 82 Devonshire Street, Boston, Massachusetts 02109, Attention:
Arthur S. Loring.
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
1. This Article and paragraph Headings contained in this
Agreement will have reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
2. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original.
3. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
4. The parties acknowledge that FICP is a Delaware business
trust. Notice is hereby given that this Agreement is executed on
behalf of the Trusts' trustees solely in their capacity as
trustees, and not individually, and that the Trusts' obligations
under this Agreement are not binding on or enforceable against
any of its trustees, officers, or shareholders, but are only
binding on and enforceable against the Trusts' assets and
property. Each party agrees that, in asserting any rights or
claims under this Agreement, it shall look only to FICP
Government's assets and property in settlement of such rights or
claims and not to such trustees or shareholders. Each party
agrees that their obligations hereunder apply only to FMMT
Government and FICP Government, respectively, and not to their
shareholders individually or to the Trustees of FICP or FMMT.
16
<PAGE>
5. This Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns, but
no assignment or transfer hereof or of any rights or obligations
hereunder shall be made by any party without the written consent
of the other parties. Nothing herein expressed or implied is
intended or shall be construed to confer upon or give any person,
firm or corporation other than the parties hereto and their
respective successors and assigns any rights or remedies under or
by reason of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by an appropriate officer.
FIDELITY MONEY MARKET TRUST
on behalf of U.S. Government Portfolio
[Signature lines omitted]
FIDELITY INSTITUTIONAL CASH PORTFOLIOS
on behalf of Government
[Signature lines omitted]
FIDELITY MANAGEMENT & RESEARCH COMPANY
[Signature lines omitted.]
2933
GOV-PXS-895 CUSIP #316191105/FUND #051
17
<PAGE>
Fidelity Money Market Trust: U.S. Government Portfolio
Dear Shareholder:
On September 13, 1995, Fidelity is holding a Special Meeting for
shareholders of Fidelity Money Market Trust: U.S. Government Portfolio
(FMMT Government). The purpose of the meeting is to transfer all of the
assets of FMMT Government to another Fidelity institutional money market
fund that has the same investment objectives and policies as FMMT
Government. After the transfer, institutional investors will continue to
enjoy the benefits of a U.S. Government money market fund, and will reduce
expenses by more than half, from .42% to .20%. The transfer will afford
investors the additional benefits of a larger investment portfolio. The
cost of the transfer will be borne exclusively by Fidelity. Accordingly,
the Trustees recommend you approve the transfer.
At this important meeting, shareholders are being asked to consider and
approve an Agreement and Plan of Reorganization (the Agreement) FMMT
Government and Fidelity Institutional Cash Portfolios: Government (FICP
Government) (the Reorganization). The terms of the proposed
Reorganization provide for the transfer of substantially all of the assets
of FMMT Government to FICP Government in exchange for Class A Shares of
FICP Government. Following such transfer, FMMT Government will be
liquidated and Class A Shares of FICP Government will be distributed to
shareholders of FMMT Government in exchange for their FMMT Government
shares. Each shareholder will receive the number and value of FICP
Government shares equal to the number and value of such shareholder's
shares in FMMT Government.
FICP Government, like FMMT Government, is a money market fund that seeks a
high level of current income by investing in securities issued by the U.S.
government and its agencies. Enclosed is a Proxy Statement further
describing the reasons for the Reorganization and a Prospectus describing
in detail the investment objective and policies of FICP Government.
Fidelity Management & Research Company, FMMT Government's adviser,
anticipates that approval of the Reorganization will result in lower fund
operating expenses. FMMT Government has received an opinion of counsel to
the effect that the Reorganization will qualify as a tax-free
reorganization under the Internal Revenue Code. The exchange of shares of
FMMT Government for Class A Shares of FICP Government therefore will not
result in the recognition of any taxable gain or loss to the shareholders
of FMMT Government on the date of the transaction.
The Board of Trustees of Fidelity Money Market Trust has unanimously
approved the proposed Reorganization and recommends voting to approve the
Agreement. Approval of the Agreement requires the affirmative vote of a
majority of outstanding shares. Your participation is extremely important
no matter how many or how few shares you own. Once you have marked your
<PAGE>
vote on the enclosed proxy card, be sure to sign and return it in the
enclosed postage-paid envelope. Call a Fidelity representative at 1-800-
843-3001 if you have any questions.
Sincerely,
Edward C. Johnson 3d
President 2688
GOV-PXL-0895
<PAGE>
Vote this proxy card TODAY! Your prompt response will
save the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
Fidelity Investments
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
Please detach at perforation before mailing.
--------------------------------------------------------------------
FIDELITY MONEY MARKET TRUST: U.S. Government Portfolio
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring, and Ralph F. Cox, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
FIDELITY MONEY MARKET TRUST: U.S. Government Portfolio, 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 September 13, 1995 at 11:15 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 proposal
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 ______________________________________, 1995
___________________________________________
___________________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
CUSIP #316191105/FUND #051
<PAGE>
Please refer to the Proxy Statement discussion of this matter.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSAL.
---
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING:
---
_________________________________________________________________________
_________________________________________________________________________
1. To approve an Agreement and FOR [] AGAINST [] ABSTAIN [] 1.
Plan of Reorganization and
Liquidation whereby
Government, a series of
Fidelity Institutional Cash
Portfolios, acquires
substantially all of the
assets of FMMT: U.S.
Government Portfolio solely
in exchange for Class A
shares of beneficial interest
in Government and the
assumption by Government of
FMMT: U.S. Government
Portfolio's liabilities.
FMMT-PXC-795 (2936) CUSIP #316191105/FUND #051
